G.R. No.

L-44717 August 28, 1985

THE CHARTERED BANK EMPLOYEES ASSOCIATION, petitioner,
vs.
HON. BLAS F. OPLE, in his capacity as the Incumbent Secretary of Labor, and THE
CHARTERED BANK,respondents.

GUTIERREZ, JR., J .:
This is a petition for certiorari seeking to annul the decision of the respondent Secretary, now
Minister of Labor which denied the petitioner's claim for holiday pay and its claim for premium and
overtime pay differentials. The petitioner claims that the respondent Minister of Labor acted contrary
to law and jurisprudence and with grave abuse of discretion in promulgating Sec. 2, Rule IV, Book III
of the Integrated Rules and in issuing Policy Instruction No. 9, both referring to holidays with pay.
On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly paid
employees/members, instituted a complaint with the Regional Office No. IV, Department of Labor,
now Ministry of Labor and Employment (MOLE) against private respondent Chartered Bank, for the
payment of ten (10) unworked legal holidays, as well as for premium and overtime differentials for
worked legal holidays from November 1, 1974.
The memorandum for the respondents summarizes the admitted and/or undisputed facts as follows:
l. The work force of respondent bank consists of 149 regular employees, all of whom
are paid by the month;
2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthly
paid employees are paid for overtime work as follows:
Section l. The basic work week for all employees excepting security guards who by
virtue of the nature of their work are required to be at their posts for 365 days per
year, shall be forty (40) hours based on five (5) eight (8) hours days, Monday to
Friday.
Section 2. Time and a quarter hourly rate shall be paid for authorized work performed
in excess of eight (8) hours from Monday through Friday and for any hour of work
performed on Saturdays subject to Section 5 hereof.
Section 3. Time and a half hourly rate shall be paid for authorized work performed on
Sundays, legal and special holidays.
xxx xxx xxx
xxx xxx xxx
Section 5. The provisions of Section I above notwithstanding the BANK may revert to
the six (6) days work week, to include Saturday for a four (4) hour day, in the event
the Central Bank should require commercial banks to open for business on Saturday.
3. In computing overtime pay and premium pay for work done during regular
holidays, the divisor used in arriving at the daily rate of pay is 251 days although
formerly the divisor used was 303 days and this was when the respondent bank was
still operating on a 6-day work week basis. However, for purposes of computing
deductions corresponding to absences without pay the divisor used is 365 days.
4. All regular monthly paid employees of respondent bank are receiving salaries way
beyond the statutory or minimum rates and are among the highest paid employees in
the banking industry.
5. The salaries of respondent bank's monthly paid employees suffer no deduction for
holidays occurring within the month.
On the bases of the foregoing facts, both the arbitrator and the National Labor Relations
Commission (NLRC) ruled in favor of the petitioners ordering the respondent bank to pay its monthly
paid employees, holiday pay for the ten (10) legal holidays effective November 1, 1974 and to pay
premium or overtime pay differentials to all employees who rendered work during said legal holidays.
On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed the petitioner's
claim for lack of merit basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and
Policy Instruction No. 9, which respectively provide:
Sec. 2. Status of employees paid by the month. Employees who are uniformly paid
by the month, irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be presumed to be paid
for all days in the month whether worked or not.
POLICY INSTRUCTION NO. 9
TO: All Regional Directors
SUBJECT: PAID LEGAL HOLIDAYS
The rules implementing PD 850 have clarified the policy in the implementation of the
ten (10) paid legal holidays. Before PD 850, the number of working days a year in a
firm was considered important in determining entitlement to the benefit. Thus, where
an employee was working for at least 313 days, he was considered definitely already
paid. If he was working for less than 313, there was no certainty whether the ten (10)
paid legal holidays were already paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended to benefit principally
daily employees. In the case of monthly, only those whose monthly salary did not yet
include payment for the ten (10) paid legal holidays are entitled to the benefit.
Under the rules implementing PD 850, this policy has been fully clarified to eliminate
controversies on the entitlement of monthly paid employees. The new determining
rule is this: 'If the monthly paid employee is receiving not less than P240, the
maximum monthly minimum wage, and his monthly pay is uniform from January to
December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays in
months where they occur, then he is still entitled to the ten (10) paid legal holidays.
These new interpretations must be uniformly and consistently upheld.
This issuance shall take effect immediately.
The issues are presented in the form of the following assignments of errors:
First Error
Whether or not the Secretary of Labor erred and acted contrary to law
in promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and
Policy Instruction No. 9.
Second Error
Whether or not the respondent Secretary of Labor abused his
discretion and acted contrary to law in applying Sec. 2, Rule IV of the
Integrated Rules and Policy Instruction No. 9 abovestated to private
respondent's monthly-paid employees.
Third Error
Whether or not the respondent Secretary of Labor, in not giving due
credence to the respondent bank's practice of paying its employees
base pay of 100% and premium pay of 50% for work done during
legal holidays, acted contrary to law and abused his discretion in
denying the claim of petitioners for unworked holidays and premium
and overtime pay differentials for worked holidays.
The petitioner contends that the respondent Minister of Labor gravely abused his discretion in
promulgating Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9 as
guidelines for the implementation of Articles 82 and 94 of the Labor Code and in applying said
guidelines to this case. It maintains that while it is true that the respondent Minister has the authority
in the performance of his duty to promulgate rules and regulations to implement, construe and clarify
the Labor Code, such power is limited by provisions of the statute sought to be implemented,
construed or clarified. According to the petitioner, the so-called "guidelines" promulgated by the
respondent Minister totally contravened and violated the Code by excluding the employees/members
of the petitioner from the benefits of the holiday pay, when the Code itself did not provide for
their expanding the Code's clear and concise conclusion and notwithstanding the Code's clear and
concise phraseology defining those employees who are covered and those who are excluded from
the benefits of holiday pay.
On the other hand, the private respondent contends that the questioned guidelines did not deprive
the petitioner's members of the benefits of holiday pay but merely classified those monthly paid
employees whose monthly salary already includes holiday pay and those whose do not, and that the
guidelines did not deprive the employees of holiday pay. It states that the question to be clarified is
whether or not the monthly salaries of the petitioner's members already includes holiday pay. Thus,
the guidelines were promulgated to avoid confusion or misconstruction in the application of Articles
82 and 94 of the Labor Code but not to violate them. Respondent explains that the rationale behind
the promulgation of the questioned guidelines is to benefit the daily paid workers who, unlike
monthly-paid employees, suffer deductions in their salaries for not working on holidays. Hence, the
Holiday Pay Law was enacted precisely to countervail the disparity between daily paid workers and
monthly-paid employees.
The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132
SCRA 663) resolved a similar issue. Significantly, the petitioner in that case was also a union of
bank employees. We ruled that Section 2, Rule IV, Book III of the Integrated Rules and Policy
Instruction No. 9, are contrary to the provisions of the Labor Code and, therefore, invalid This Court
stated:
It is elementary in 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. In
the case at bar, the provisions of the Labor Code on the entitlement to the benefits of
holiday pay are clear and explicit it provides for both the coverage of and exclusion
from the benefit. In Policy Instruction No. 9, the then Secretary of Labor went as far
as to categorically state that the benefit is principally intended for daily paid
employees, when the law clearly states that every worker shall be paid their regular
holiday pay. This is flagrant violation of the mandatory directive of Article 4 of the
Labor Code, which states that 'All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor.' Moreover, it shall always be presumed that the legislature
intended to enact a valid and permanent statute which would have the most
beneficial effect that its language permits (Orlosky v. Hasken, 155 A. 112)
Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority
granted by Article 5 of the Labor Code authorizing him to promulgate the necessary
implementing rules and regulations.
We further ruled:
While it is true that the contemporaneous construction placed upon a statute by
executive officers whose duty is to enforce it should be given great weight by the
courts, still if such construction is so erroneous, as in the instant case, the same
must be declared as null and void. It is the role of the Judiciary to refine and, when
necessary correct constitutional (and/or statutory) interpretation, in the context of the
interactions of the three branches of the government, almost always in situations
where some agency of the State has engaged in action that stems ultimately from
some legitimate area of governmental power (The Supreme Court in Modern Role,
C.B. Swisher 1958, p. 36).
xxx xxx xxx
In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the
Labor Code and Policy Instruction No. 9 issued by the then Secretary of Labor must
be declared null and void. Accordinglyl public respondent Deputy Minister of Labor
Amado G. Inciong had no basis at all to deny the members of petitioner union their
regular holiday pay as directed by the Labor Code.
Since the private respondent premises its action on the invalidated rule and policy instruction, it is
clear that the employees belonging to the petitioner association are entitled to the payment of ten
(10) legal holidays under Articles 82 and 94 of the Labor Code, aside from their monthly salary. They
are not among those excluded by law from the benefits of such holiday pay.
Presidential Decree No. 850 states who are excluded from the holiday provisions of that law. It
states:
ART. 82. Coverage. The provision of this Title shall apply to employees in all
establishments and undertakings, whether for profit or not, but not to government
employees, managerial employees, field personnel members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations. (Emphasis supplied).
The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy
Instruction No. 9 add another excluded group, namely, "employees who are uniformly paid by the
month." While the additional exclusion is only in the form of a presumption that all monthly paid
employees have already been paid holiday pay, it constitutes a taking away or a deprivation which
must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of
labor more than what the statute delimits or withholds is obviously ultra vires.
It is argued that even without the presumption found in the rules and in the policy instruction, the
company practice indicates that the monthly salaries of the employees are so computed as to
include the holiday pay provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in
computing overtime compensation for its employees, employs a "divisor" of 251 days. The 251
working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal
holidays from the total number of calendar days in a year. If the employees are already paid for all
non-working days, the divisor should be 365 and not 251.
The situation is muddled somewhat by the fact that, in computing the employees' absences from
work, the respondent bank uses 365 as divisor. Any slight doubts, however, must be resolved in
favor of the workers. This is in keeping with the constitutional mandate of promoting social justice
and affording protection to labor (Sections 6 and 9, Article II, Constitution). The Labor Code, as
amended, itself provides:
ART. 4. Construction in favor of labor. All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.
Any remaining doubts which may arise from the conflicting or different divisors used in the
computation of overtime pay and employees' absences are resolved by the manner in which work
actually rendered on holidays is paid. Thus, whenever monthly paid employees work on a holiday,
they are given an additional 100% base pay on top of a premium pay of 50%. If the employees'
monthly pay already includes their salaries for holidays, they should be paid only premium pay but
not both base pay and premium pay.
The contention of the respondent that 100% base pay and 50% premium pay for work actually
rendered on holidays is given in addition to monthly salaries only because the collective bargaining
agreement so provides is itself an argument in favor of the petitioner stand. It shows that the
Collective Bargaining Agreement already contemplated a divisor of 251 days for holiday pay
computations before the questioned presumption in the Integrated Rules and the Policy Instruction
was formulated. There is furthermore a similarity between overtime pay, which is computed on the
basis of 251 working days a year, and holiday pay, which should be similarly treated notwithstanding
the public respondents' issuances. In both cases overtime work and holiday work- the employee
works when he is supposed to be resting. In the absence of an express provision of the CBA or the
law to the contrary, the computation should be similarly handled.
We are not unmindful of the fact that the respondent's employees are among the highest paid in the
industry. It is not the intent of this Court to impose any undue burdens on an employer which is
already doing its best for its personnel. we have to resolve the labor dispute in the light of the parties'
own collective bargaining agreement and the benefits given by law to all workers. When the law
provides benefits for "employees in all establishments and undertakings, whether for profit or not"
and lists specifically the employees not entitled to those benefits, the administrative agency
implementing that law cannot exclude certain employees from its coverage simply because they are
paid by the month or because they are already highly paid. The remedy lies in a clear redrafting of
the collective bargaining agreement with a statement that monthly pay already includes holiday pay
or an amendment of the law to that effect but not an administrative rule or a policy instruction.
WHEREFORE, the September 7, 1976 order of the public respondent is hereby REVERSED and
SET ASIDE. The March 24, 1976 decision of the National Labor Relations Commission which
affirmed the October 30, 1975 resolution of the Labor Arbiter but deleted interest payments is
REINSTATED.
SO ORDERED.

G.R. No. 114698 July 3, 1995
WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION, petitioner,
vs.
CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA,
and 34 others, respondents.

NARVASA, C.J .:
The basic issue raised by petitioner in this case is, as its counsel puts it, "whether or not a monthly-
paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from
his usual holiday pay, whenever a regular holiday falls on a Sunday."
The case arose from a routine inspection conducted by a Labor Enforcement Officer on August 6,
1991 of the Wellington Flour Mills, an establishment owned and operated by petitioner Wellington
Investment and Manufacturing Corporation (hereafter, simply Wellington). The officer thereafter drew
up a report, a copy of which was "explained to and received by" Wellington's personnel manager, in
which he set forth his finding of "(n)on-payment of regular holidays falling on a Sunday for monthly-
paid employees."
1

Wellington sought reconsideration of the Labor Inspector's report, by letter dated August 10, 1991. It
argued that "the monthly salary of the company's monthly-salaried employees already includes
holiday pay for all regular holidays . . . (and hence) there is no legal basis for the finding of alleged
non-payment of regular holidays falling on a Sunday."
2
It expounded on this thesis in a position paper
subsequently submitted to the Regional Director, asserting that it pays its monthly-paid employees a fixed
monthly compensation "using the 314 factor which undeniably covers and already includes payment for
all the working days in a month as well as all the 10 unworked regular holidays within a year."
3

Wellington's arguments failed to persuade the Regional Director who, in an Order issued on July 28,
1992, ruled that "when a regular holiday falls on a Sunday, an extra or additional working day is
created and the employer has the obligation to pay the employees for the extra day except the last
Sunday of August since the payment for the said holiday is already included in the 314 factor," and
accordingly directed Wellington to pay its employees compensation corresponding to four (4) extra
working days.
4

Wellington timely filed a motion for reconsideration of this Order of August 10, 1992, pointing out that
it was in effect being compelled to "shell out an additional pay for an alleged extra working day"
despite its complete payment of all compensation lawfully due its workers, using the 314 factor.
5
Its
motion was treated as an appeal and was acted on by respondent Undersecretary. By Order dated
September 22, the latter affirmed the challenged order of the Regional Director, holding that "the divisor
being used by the respondent (Wellington) does not reliably reflect the actual working days in a year, "
and consequently commanded Wellington to pay its employees the "six additional working days resulting
from regular holidays falling on Sundays in 1988, 1989 and 1990."
6
Again, Wellington moved for
reconsideration,
7
and again was rebuffed.
8

Wellington then instituted the special civil action of certiorari at bar in an attempt to nullify the orders
above mentioned. By Resolution dated July 4, 1994, this Court authorized the issuance of a
temporary restraining order enjoining the respondents from enforcing the questioned orders.
9

Every worker should, according to the Labor Code,
10
"be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;" this,
of course, even if the worker does no work on these holidays. The regular holidays include: "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 of December, and the day designated by law for holding a
general election (or national referendum or plebiscite).
11

Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum
wage shall not be less than the statutory minimum wage multiplied by 365 days divided by
twelve."
12
This monthly salary shall serve as compensation "for all days in the month whether worked or
not," and "irrespective of the number of working days therein."
13
In other words, whether the month is of
thirty (30) or thirty-one (31) days' duration, or twenty-eight (28) or twenty-nine (29) (as in February), the
employee is entitled to receive the entire monthly salary. So, too, in the event of the declaration of any
special holiday, or any fortuitous cause precluding work on any particular day or days (such as
transportation strikes, riots, or typhoons or other natural calamities), the employee is entitled to the salary
for the entire month and the employer has no right to deduct the proportionate amount corresponding to
the days when no work was done. The monthly compensation is evidently intended precisely to avoid
computations and adjustments resulting from the contingencies just mentioned which are routinely made
in the case of workers paid on daily basis.
In Wellington's case, there seems to be no question that at the time of the inspection conducted by
the Labor Enforcement Officer on August 6, 1991, it was and had been paying its employees "a
salary of not less than the statutory or established minimum wage," and that the monthly salary thus
paid was "not . . . less than the statutory minimum wage multiplied by 365 days divided by
twelve," supra. There is, in other words, no issue that to this extent, Wellington complied with the
minimum norm laid down by law.
Apparently the monthly salary was fixed by Wellington to provide for compensation for every working
day of the year including the holidays specified by law and excluding only Sundays. In fixing the
salary, Wellington used what it calls the "314 factor;" that is to say, it simply deducted 51 Sundays
from the 365 days normally comprising a year and used the difference, 314, as basis for determining
the monthly salary. The monthly salary thus fixed actually covers payment for 314 days of the
year, including regular and special holidays, as well as days when no work is done by reason of
fortuitous cause, as above specified, or causes not attributable to the employees.
The Labor Officer who conducted the routine inspection of Wellington discovered that in certain
years, two or three regular holidays had fallen on Sundays. He reasoned that this had precluded the
enjoyment by the employees of a non-working day, and the employees had consequently had to
work an additional day for that month. This ratiocination received the approval of his Regional
Director who opined
14
that "when a regular holiday falls on a Sunday, an extra or additional working day
is created and the employer has the obligation to pay its employees for the extra day except the last
Sunday of August since the payment for the said holiday is already included in the 314 factor."
15

This ingenuous theory was adopted and further explained by respondent Labor Undersecretary, to
whom the matter was appealed, as follows:
16

. . . By using said (314) factor, the respondent (Wellington) assumes that all the
regular holidays fell on ordinary days and never on a Sunday. Thus, the respondent
failed to consider the circumstance that whenever a regular holiday coincides with a
Sunday, an additional working day is created and left unpaid. In other words, while
the said divisor may be utilized as proof evidencing payment of 302 working days, 2
special days and the ten regular holidays in a calendar year, the same does not
cover or include payment of additional working days created as a result of some
regular holidays falling on Sundays.
He pointed out that in 1988 there was "an increase of three (3) working days resulting from regular
holidays falling on Sundays;" hence Wellington "should pay for 317 days, instead of 314 days." By
the same process of ratiocination, respondent Undersecretary theorized that there should be
additional payment by Wellington to its monthly-paid employees for "an increment of three (3)
working days" for 1989 and again, for 1990. What he is saying is that in those years, Wellington
should have used the "317 factor," not the "314 factor."
The theory loses sight of the fact that the monthly salary in Wellington which is based on the so-
called "314 factor" accounts for all 365 days of a year; i.e., Wellington's "314 factor" leaves no day
unaccounted for; it is paying for all the days of a year with the exception only of 51 Sundays.
The respondents' theory would make each of the years in question (1988, 1989, 1990), a year of 368
days. Pursuant to this theory, no employer opting to pay his employees by the month would have
any definite basis to determine the number of days in a year for which compensation should be
given to his work force. He would have to ascertain the number of times legal holidays would fall on
Sundays in all the years of the expected or extrapolated lifetime of his business. Alternatively, he
would be compelled to make adjustments in his employees' monthly salaries every year, depending
on the number of times that a legal holiday fell on a Sunday.
There is no provision of law requiring any employer to make such adjustments in the monthly salary
rate set by him to take account of legal holidays falling on Sundays in a given year, or, contrary to
the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days. As
earlier mentioned, what the law requires of employers opting to pay by the month is to assure that
"the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365
days divided by twelve,"
17
and to pay that salary "for all days in the month whether worked or not," and
"irrespective of the number of working days therein."
18
That salary is due and payable regardless of the
declaration of any special holiday in the entire country or a particular place therein, or any fortuitous
cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or
other natural calamities), or cause not imputable to the worker. And as also earlier pointed out, the legal
provisions governing monthly compensation are evidently intended precisely to avoid re-computations
and alterations in salary on account of the contingencies just mentioned, which, by the way, are routinely
made between employer and employees when the wages are paid on daily basis.
The public respondents argue that their challenged conclusions and dispositions may be justified by
Section 2, Rule X, Book III of the Implementing Rules, giving the Regional Director power
19

. . . to order and administer (in cases where employer-employee relations still exist),
after due notice and hearing, compliance with the labor standards provisions of the
Code and the other labor legislations based on the findings of their Regulations
Officers or Industrial Safety Engineers (Labor Standard and Welfare Officers) and
made in the course of inspection, and to issue writs of execution to the appropriate
authority for the enforcement of his order, in line with the provisions of Article 128 in
relation to Articles 289 and 290 of the Labor Code, as amended. . . .
The respondents beg the question. Their argument assumes that there are some "labor standards
provisions of the Code and the other labor legislations" imposing on employers the obligation to give
additional compensation to their monthly-paid employees in the event that a legal holiday should fall
on a Sunday in a particular month with which compliance may be commanded by the Regional
Director when the existence of said provisions is precisely the matter to be established.
In promulgating the orders complained of the public respondents have attempted to legislate, or
interpret legal provisions in such a manner as to create obligations where none are intended. They
have acted without authority, or at the very least, with grave abuse of their discretion. Their acts
must be nullified and set aside.
WHEREFORE, the orders complained of, namely: that of the respondent Undersecretary dated
September 22, 1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND
SET ASIDE, and the proceeding against petitioner DISMISSED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 146775. January 30, 2002]
SAN MIGUEL CORPORATION, petitioner, vs. THE HONORABLE
COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON.
UNDERSECRETARY JOSE M. ESPAOL, JR., Hon.
CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR
ALLAN M. MACARAYA, respondents.
D E C I S I 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), Iligan
District Office, conducted a routine inspection in the premises of San Miguel
Corporation (SMC) in Sta. Filomena, Iligan City. In 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.
[1]
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 IV of DOLE Iligan
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.
[2]

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 MODIFIED 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.
[3]

Its motion for reconsideration having been denied for lack of merit, SMC filed a
petition for certiorari before this Court, alleging that:
PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE
ABUSE OF DISCRETION WHEN THEY GRANTED MUSLIM HOLIDAY PAY
TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO
PAY THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF
THE PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON
DECEMBER 17, 1993, IT BEING CONTRARY TO THE PROVISIONS, INTENT
AND PURPOSE OF P.D. 1083 AND PREVAILING JURISPRUDENCE.
THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH
GRAVE ABUSE OF DISCRETION IN THAT SAN MIGUEL CORPORATION
WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSAILED
COMPLIANCE ORDER AND ALL SUBSEQUENT ORDERS, DECISION AND
RESOLUTION OF PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE
ABUSE OF DISCRETION AND ARE VOID AB INITIO.
THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT DECLARED THAT REGIONAL DIRECTOR
MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY
ESPAOL, JR., WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF
DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION,
HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER
AND SUBSEQUENT ORDERS, WHEN IN FACT THEY HAVE NO
JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR
STANDARD CASE.
[4]

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. In National
Irrigation Administration vs. Court of Appeals,
[5]
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. If 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. In this case, appeal was not only
available but also a speedy and adequate remedy.
[6]

Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost
appeal.
[7]
For failure of petitioner to file a timely appeal, the questioned decision of the
Court of Appeals had already become final and executory.
In 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 I, Book V, of
Presidential Decree No. 1083,
[8]
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 Jadd (New Year), which falls on the first day of the first lunar month
of Muharram;
(b) Maulid-un-Nab (Birthday of the Prophet Muhammad), which falls on the twelfth day
of the third lunar month of Rabi-ul-Awwal;
(c) Lailatul Isr Wal Mirj (Nocturnal Journey and Ascension of the Prophet
Muhammad), which falls on the twenty-seventh day of the seventh lunar month
of Rajab;
(d) d-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) d-l-Adh (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month
of Dhl-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, Iligan, 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 respondents 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 workers 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.
In addition, the 1999 Handbook on Workers 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.
[9]

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
In 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. In 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. Indeed, 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. In 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),
[10]
the Court notes that the case
was primarily for illegal dismissal and the claim for benefits was only incidental to the
main case. In 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. It 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.
[11]

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.
[12]

WHEREFORE, in view of the foregoing, the petition is DISMISSED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 118289. December 13, 1999]
TRANS-ASIA PHILS. EMPLOYEES ASSOCIATION (TAPEA) and ARNEL
GALVEZ, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, TRANS-ASIA (PHILS.) and ERNESTO S. DE
CASTRO, respondents.
D E C I S I O N
KAPUNAN, J .:
This petition for certiorari under Rule 65 of the Rules of Court seeks to reverse and set aside
the Resolutions, dated 23 November 1993 and 13 September 1994 of the National Labor
Relations Commission (NLRC) which dismissed petitioners appeal from the adverse decision
of the labor arbiter and denied petitioners motion for reconsideration, respectively.
The antecedents of this case are as follows:
On 7 July 1988, Trans-Asia Philippines Employees Association (TAPEA), the duly-
recognized collective bargaining agent of the monthly-paid rank-and-file employees of Trans-
Asia (Phils.), entered into a Collective Bargaining Agreement (CBA) with their employer. The
CBA, which was to be effective from 1 April 1988 up to 31 March 1991, provided for, among
others, the payment of holiday pay with a stipulation that if an employee is permitted to work on
a legal holiday, the said employee will receive a salary equivalent to 200% of the regular daily
wage plus a 60% premium pay.
Despite the conclusion of the CBA, however, an issue was still left unresolved with regard
to the claim of TAPEA for payment of holiday pay covering the period from January of 1985 up
to December of 1987. Thus, the parties underwent preventive mediation meetings with a
representative from the National Mediation and Conciliation Board in order to settle their
disagreement on this particular issue. Since the parties were not able to arrive at an amicable
settlement despite the conciliation meetings, TAPEA, led by its President, petitioner Arnie
Galvez, filed a complaint before the labor arbiter, on 18 August 1988, for the payment of their
holiday pay in arrears. On 18 September 1988, petitioners amended their complaint to include
the payment of holiday pay for the duration of the recently concluded CBA (from 1988 to
1991), unfair labor practice, damages and attorneys fees.
In their Position Paper, petitioners contended that their claim for holiday pay in arrears is
based on the non-inclusion of the same in their monthly pay. In this regard, petitioners cited
certain circumstances which, according to them, would support their claim for past due holiday
pay. First, petitioners presented Trans-Asias Employees Manual which requires, as a pre-
condition for the payment of holiday pay, that the employee should have worked or was on
authorized leave with pay on the day immediately preceding the legal holiday. Petitioners
argued that if the intention [of Trans-Asia] was not to pay holiday pay in addition to the
employees monthly pay, then there would be no need to impose or specify the pre-condition for
the payment.
[1]
Second, petitioners proffered as evidence their appointment papers which do not
contain any stipulation on the inclusion of holiday pay in their monthly salary. According to
petitioners, the absence of such stipulation is an indication that the mandated holiday pay is not
incorporated in the monthly salary. Third, petitioners noted the inclusion of a provision in the
CBA for the payment of an amount equivalent to 200% of the regular daily wage plus 60%
premium pay to employees who are permitted to work on a regular holiday. Petitioners claimed
that this very generous provision was the remedy availed of by Trans-Asia to allow its
employees to recoup the holiday pay in arrears and, as such, is a tacit admission of the non-
payment of the same during the period prior to the current CBA.
Finally, petitioners cited the current CBA provision which obligates Trans-Asia to give
holiday pay. Petitioners asserted that this provision is an acknowledgment by Trans-Asia of its
failure to pay the same in the past since, if it was already giving holiday pay prior to the CBA,
there was no need to stipulate on the said obligation in the current CBA.
With regard to the claim for the payment of holiday pay for the duration of the CBA, the
accusation of unfair labor practice and the claim for damages and attorneys fees, petitioners
asserted that Trans-Asia is guilty of bad faith in negotiating and executing the current CBA
since, after it recognized the right of the employees to receive holiday pay, Trans-Asia allegedly
refused to honor the CBA provision on the same.
In response to petitioners contentions, Trans-Asia refuted the same in seriatim. With regard
to the pre-condition for the payment of holiday pay stated in the Employees Manual and the
absence of a stipulation on holiday pay in the employees appointment papers, Trans-Asia
asserted that the above circumstances are not indicative of its non-payment of holiday pay since
it has always honored the labor law provisions on holiday pay by incorporating the same in the
payment of the monthly salaries of its employees. In support of this claim, Trans-Asia pointed
out that it has long been the standing practice of the company to use the divisor of 286 days in
computing for its employees overtime pay and daily rate deductions for absences. Trans-Asia
explained that this divisor is arrived at through the following formula:
52 x 44
---------- = 286 days
8
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286 days divisor already takes into account the ten (10)
regular holidays in a year since it only subtracts from the 365 calendar days the unworked and
unpaid 52 Sundays and 26 Saturdays (employees are required to work half-day during
Saturdays). Trans-Asia claimed that if the ten (10) regular holidays were not included in the
computation of their employees monthly salary, the divisor which they would have used would
only be 277 days which is arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 Legal
holidays from 365 calendar days. Furthermore, Trans-Asia explained that the 286 days divisor
is based on Republic Act No. 6640,
[2]
wherein the divisor of 262 days (composed of the 252
working days and the 10 legal holidays) is used in computing for the monthly rate of workers
who do not work and are not considered paid on Saturdays and Sundays or rest days. According
to Trans-Asia, if the additional 26 working Saturdays in a year is factored-in to the divisor
provided by Republic Act No. 6640, the resulting divisor would be 286 days.
On petitioners contention with regard to the CBA provision on the allegedly generous
holiday pay rate of 260%, Trans-Asia explained that this holiday pay rate was included in the
CBA in order to comply with Section 4, Rule IV, Book III of the Omnibus Rules Implementing
the Labor Code. The aforesaid provision reads:
Sec. 4. Compensation for holiday work. Any employee who is permitted or suffered
to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least
two hundred percent (200%) of his regular daily wage. If the holiday falls on the
scheduled rest day of the employee, he shall be entitled to an additional premium pay
of at least 30% of his regular holiday rate of 200% based on his regular wage rate.
On the contention that Trans-Asias acquiescence to the inclusion of a holiday pay provision
in the CBA is an admission of non-payment of the same in the past, Trans-Asia reiterated that it
is simply a recognition of the mandate of the Labor Code that employees are entitled to holiday
pay. It clarified that the companys firm belief in the payment of holiday pay to employees led it
to agree to the inclusion of the holiday pay provision in the CBA.
With regard to the accusation of unfair labor practice because of Trans-Asias act of
allegedly bargaining in bad faith and refusal to give holiday pay in accordance with the CBA,
Trans-Asia explained that what petitioners would like the company to do is to give double
holiday pay since, as previously stated, the company has already included the same in its
employees monthly salary and, yet, petitioners want it to pay a second set of holiday pay.
On 13 February 1989, the labor arbiter rendered a decision dismissing the complaint, to wit:
After considering closely the arguments of the parties in support of their respective
claims and defenses, this Branch upholds a different view from that espoused by the
complainants.
Just like in the Chartered Bank Case (L-44717), August 28, 1985, 138 SCRA 273,
which is cited by the complainants in their Position Paper, there appears to be no clear
agreement between the parties in the instant case, whether verbal or in writing, that
the monthly salary of the employees included the mandated holiday pay. In the
absence of such agreement, the Supreme Court in said Chartered Bank Case took into
consideration existing practices in the bank in resolving the issue, such as
employment by the bank of a divisor of 251 days which is the result of subtracting all
Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar
days in a year. Further, the Court took note of the fact that the bank used conflicting
or different divisors in computing salary-related benefits as well as the employees
absence from work. In the case at bar, not only did the CBA between the
complainants and respondents herein provides (sic) that the ten (10) legal holidays are
recognized by the Company as full holiday with pay. What is more, there can be no
doubt that since 1977 up to the execution of the CBA, the Trans-Asia, unlike that
obtaining in the Chartered Bank Case, never used conflicting or different divisors but
consistently employed the divisor of 286 days, which as earlier pointed out, was
arrived at by subtracting only the unworked 52 Sundays and the 26 half-day-worked
Saturdays from the total number of days in a year. The consistency in the established
practice of the Trans-Asia, which incidentally is not disputed by complainants, did not
give rise to any doubt which could have been resolved in favor of complainants.
Besides, the respondents unlike the respondent bank in the Chartered Bank Employees
Association vs. Hon. Blas F. Ople, et al. (supra) citing also the case of IBAAEU vs.
Hon,. Amado Inciong (132 SCRA 663) which case have (sic) invalidated Section 2,
Rule IV, Book III of the Implementing Rules of the Labor Code and Policy
Instruction No. 9, have never relied on the said invalidated rule and Policy Instruction.
The complainants arguments and juxtapositions in claiming that they were denied
payment of their holiday pay paled in the face of the prevailing company practices and
circumstances abovestated.
Also, for the reasons adverted to above, the complainants charge of unfair labor
practice claiming that respondents in bad faith refused to comply with their
contractual obligation under the CBA by not paying the complainants holiday pay,
must fail. Since respondents have nothing more to pay by way of legal holiday pay as
it has already been included in their monthly salaries, the provision in the CBA
relative to holiday pay is just but a recognition of the complainants right to payment
of legal holiday pay as mandated by the Labor Code.
WHEREFORE, all the foregoing premises being considered, judgment is hereby
rendered dismissing the complaint for lack of merit.
SO ORDERED.
[3]

Petitioners appealed to the National Labor Relations Commission. In its Resolution, dated
23 November 1993, the NLRC dismissed the appeal and affirmed the decision of the labor
arbiter, to wit:
We find no cogent reason to change or disturb the decision appealed from, the same
being substantially supported by the facts and evidence on record. "It is a well-settled
rule that findings of facts of administrative bodies, if based on substantial evidence are
controlling on the reviewing authority. (Planters Products, Inc. vs. NLRC, G. R. No.
78524 & 78739, January 20, 1989; 169 SCRA 328).
We find no abuse of discretion and/or error in the assailed decision.
WHEREFORE, the appeal are (sic) hereby DISMISSED for lack of merit and the
decision appealed from is AFFIRMED.
SO ORDERED.
[4]

Petitioners motion for reconsideration was, likewise, denied by the NLRC in its Resolution,
dated 13 September 1994.
Petitioners are now before us faulting the NLRC with the following assignment of errors:
I
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN
UPHOLDING THE LABOR ARBITERS DECISION DESPITE THE LACK OF
SUBSTANTIAL EVIDENCE TO SUPPORT IT
II
IN UPHOLDING THE LABOR ARBITERS DECISION DESPITE THE LACK
OF SUBSTANTIAL EVIDENCE TO SUPPORT IT, PUBLIC RESPONDENT
NLRC VIOLATED THE CONSTITUTIONAL AND LEGAL MANDATE TO
RESOLVE ALL DOUBTS IN SOCIAL LEGISLATION IN FAVOR OF
LABOR.
[5]

Petitioners, in furtherance of their first assignment of error, assert that the NLRC blatantly
an unshamedly disregarded the numerous evidence in support of their claim and relied merely
on the sole evidence presented by Trans-Asia, the 286 days divisor, in dismissing their appeal
and, in so doing, is guilty of grave abuse of discretion.
[6]

We do not agree.
Trans-Asias inclusion of holiday pay in petitioners monthly salary is clearly established by
its consistent use of the divisor of 286 days in the computation of its employees benefits and
deductions. The use by Trans-Asia of the 286 days divisor was never disputed by
petitioners. A simple application of mathematics would reveal that the ten (10) legal holidays in
a year are already accounted for with the use of the said divisor. As explained by Trans-Asia, if
one is to deduct the unworked 52 Sundays and 26 Saturdays (derived by dividing 52 Saturdays in
half since petitioners are required to work half-day on Saturdays) from the 365 calendar days in a
year, the resulting divisor would be 286 days (should actually be 287 days). Since the ten (10)
legal holidays were never included in subtracting the unworked and unpaid days in a calendar
year, the only logical conclusion would be that the payment for holiday pay is already
incorporated into the said divisor. Thus, when viewed against this very convincing piece of
evidence, the arguments put forward by petitioners to support their claim of non-payment of
holiday pay, i.e., the pre-condition stated in the Employees Manual for entitlement to holiday
pay, the absence of a stipulation in the employees appointment papers for the inclusion of
holiday pay in their monthly salary, the stipulation in the CBA recognizing the entitlement of the
petitioners to holiday pay with a concomitant provision for the granting of an allegedly very
generous holiday pay rate, would appear to be merely inferences and suppositions which, in the
apropos words of the labor arbiter, paled in the face of the prevailing company practices and
circumstances abovestated.
Hence, it is on account of the convincing and legally sound arguments and evidence of
Trans-Asia that the labor arbiter rendered a decision adverse to petitioners. Acknowledging that
the decision of the labor arbiter was based on substantial evidence, the NLRC affirmed the
formers disposition. It is also with this acknowledgment that the Court affirms the questioned
resolutions of the NLRC. As aptly put by the Solicitor General, citing Sunset View
Condominium Corporation vs. NLRC,
[7]
findings of fact of administrative bodies should not be
disturbed in the absence of grave abuse of discretion or unless the findings are not supported by
substantial evidence.
[8]
In this regard, the Solicitor General observed: As said above, public
respondent acted on the basis of substantial evidence, hence, grave abuse of discretion is ruled
out.
[9]

However, petitioners insist that the agreement of Trans-Asia in the CBA to give a generous
260% holiday pay rate to employees who work on a holiday is conclusive proof that the monthly
pay of petitioners does not include holiday pay.
[10]
Petitioners cite as basis the case of Chartered
Bank Employees Association vs. Ople,
[11]
which reads:
Any remaining doubts which may arise from the conflicting or different divisors used
in the computation of overtime pay and employees absences are resolved by the
manner in which work actually rendered on holidays is paid. Thus, whenever
monthly paid employees work on a holiday, they are given an additional 100% base
pay on top of a premium pay of 50%. If the employees monthly pay already includes
their salaries for holidays, they should be paid only premium pay but not both base
pay and premium pay.
[12]

We are not convinced. The cited case cannot be relied upon by petitioners since the facts
obtaining in the Chartered Bank case are very different from those in the present case. In
the Chartered Bank case, the bank used different divisors in computing for its employees
benefits and deductions. For computing overtime compensation, the bank used 251 days as its
divisor. On the other hand, for computing deductions due to absences, the bank used 365 days as
divisor. Due to this confusing situation, the Court declared that there existed a doubt as to
whether holiday pay is already incorporated in the employees monthly salary. Since doubts
should be resolved in favor of labor, the Court in the Chartered Bank case ruled in favor of the
employees and further stated that its conclusion is fortified by the manner in which the
employees are remunerated for work rendered on holidays. In the present case, however, there is
no confusion with regard to the divisor used by Trans-Asia in computing for petitioners benefits
and deductions. Trans-Asia consistently used a 286 days divisor for all its computations.
Nevertheless, petitioners cause is not entirely lost. The Court notes that there is a need to
adjust the divisor used by Trans-Asia to 287 days, instead of only 286 days, in order to properly
account for the entirety of regular holidays and special days in a year as prescribed by Executive
Order No. 203
[13]
in relation to Section 6 of the Rules Implementing Republic Act 6727.
[14]

Section 1 of Executive Order No. 203 provides:
SECTION 1. Unless otherwise modified by law, order or proclamation, the following
regular holidays and special days shall be observed in the country:
A. Regular Holidays
New Years Day - January 1
Maundy Thursday - Movable Date
Good Friday - Movable Date
Araw ng Kagitingan - April 9
(Bataan and Corregidor Day)
Labor Day - May 1
Independence Day - June 12
National Heroes Day - Last Sunday of August
Bonifacio Day - November 30
Christmas Day - December 25
Rizal Day - December 30
B. Nationwide Special Days
All Saints Day - November 1
Last Day of the Year - December 31
On the other hand, Section 6 of the Implementing Rules and Regulations of Republic Act
No. 6727 provides:
Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory
Minimum Wage Rates.- Without prejudice from existing company practices,
agreements or policies, the following formulas may be used as guides in determining
the equivalent monthly statutory minimum wage rates:
x x x x x x x x x
d) For those who do not work and are not considered paid on Saturdays and Sundays
or rest days:
Equivalent Monthly = Average Daily Wage Rate x 262 days
Rate (EMR) 12
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; if actually worked, this is equivalent to
2.6 days)
-----------
262 days Total equivalent number of days
Based on the above, the proper divisor that should be used for a situation wherein the
employees do not work and are not considered paid on Saturdays and Sundays or rest days is 262
days. In the present case, since the employees of Trans-Asia are required to work half-day on
Saturdays, 26 days should be added to the divisor of 262 days, thus, resulting to 288
days. However, due to the fact that the rest days of petitioners fall on a Sunday, the number of
unworked but paid legal holidays should be reduced to nine (9), instead of ten (10), since one
legal holiday under E.O. No. 203 always falls on the last Sunday of August, National Heroes
Day. Thus, the divisor that should be used in the present case should be 287 days.
However, the Court notes that if the divisor is increased to 287 days, the resulting daily rate
for purposes of overtime pay, holiday pay and conversions of accumulated leaves would be
diminished. To illustrate, if an employee receives P8,000.00 as his monthly salary, his daily rate
would be P334.49, computed as follows:
P8,000.00 x 12 months
------------------------- = P334.49/day
287 days
Whereas if the divisor used is only 286 days, the employees daily rate would be P335.66,
computed as follows:
P8,000.00 x 12 months
------------------------ = P335.66/day
286 days
Clearly, this muddled situation would be violative of the proscription on the non-diminution of
benefits under Section 100 of the Labor Code. On the other hand, the use of the divisor of 287
days would be to the advantage of petitioners if it is used for purposes of computing for
deductions due to the employees absences. In view of this situation, the Court rules that the
adjusted divisor of 287 days should only be used by Trans-Asia for computations which would
be advantageous to petitioners, i.e., deductions for absences, and not for computations which
would diminish the existing benefits of the employees, i.e., overtime pay, holiday and leave
conversions.
For their second assignment of error, petitioners argue that, since they provided the NLRC
with overwhelming proof of their claim against Trans-Asia, the least that the NLRC could
have done was to declare that there existed an ambiguity with regard to Trans-Asias payment of
holiday pay. Petitioners then posits that if the NLRC had only done so, this ambiguity would
have been resolved in their favor because of the constitutional mandate to resolve doubts in favor
of labor.
We are not persuaded. As previously stated, the decision of the labor arbiter and the
resolutions of the NLRC were based on substantial evidence and, as such, no ambiguity or doubt
exists which could be resolved in petitioners favor.
WHEREFORE, premises considered, the Resolutions of the NLRC, dated 23 November
1993 and 13 September 1994, are hereby AFFIRMED with the MODIFICATION that Trans-
Asia is hereby ordered to adjust its divisor to 287 days and pay the resulting holiday pay in
arrears brought about by this adjustment starting from 30 June 1987, the date of effectivity of
E.O. No. 203.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
FIRST DIVISION
[G.R. No. 118289. December 13, 1999]
TRANS-ASIA PHILS. EMPLOYEES ASSOCIATION (TAPEA) and ARNEL
GALVEZ, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, TRANS-ASIA (PHILS.) and ERNESTO S. DE
CASTRO, respondents.
D E C I S I O N
KAPUNAN, J .:
This petition for certiorari under Rule 65 of the Rules of Court seeks to reverse and set aside
the Resolutions, dated 23 November 1993 and 13 September 1994 of the National Labor
Relations Commission (NLRC) which dismissed petitioners appeal from the adverse decision
of the labor arbiter and denied petitioners motion for reconsideration, respectively.
The antecedents of this case are as follows:
On 7 July 1988, Trans-Asia Philippines Employees Association (TAPEA), the duly-
recognized collective bargaining agent of the monthly-paid rank-and-file employees of Trans-
Asia (Phils.), entered into a Collective Bargaining Agreement (CBA) with their employer. The
CBA, which was to be effective from 1 April 1988 up to 31 March 1991, provided for, among
others, the payment of holiday pay with a stipulation that if an employee is permitted to work on
a legal holiday, the said employee will receive a salary equivalent to 200% of the regular daily
wage plus a 60% premium pay.
Despite the conclusion of the CBA, however, an issue was still left unresolved with regard
to the claim of TAPEA for payment of holiday pay covering the period from January of 1985 up
to December of 1987. Thus, the parties underwent preventive mediation meetings with a
representative from the National Mediation and Conciliation Board in order to settle their
disagreement on this particular issue. Since the parties were not able to arrive at an amicable
settlement despite the conciliation meetings, TAPEA, led by its President, petitioner Arnie
Galvez, filed a complaint before the labor arbiter, on 18 August 1988, for the payment of their
holiday pay in arrears. On 18 September 1988, petitioners amended their complaint to include
the payment of holiday pay for the duration of the recently concluded CBA (from 1988 to
1991), unfair labor practice, damages and attorneys fees.
In their Position Paper, petitioners contended that their claim for holiday pay in arrears is
based on the non-inclusion of the same in their monthly pay. In this regard, petitioners cited
certain circumstances which, according to them, would support their claim for past due holiday
pay. First, petitioners presented Trans-Asias Employees Manual which requires, as a pre-
condition for the payment of holiday pay, that the employee should have worked or was on
authorized leave with pay on the day immediately preceding the legal holiday. Petitioners
argued that if the intention [of Trans-Asia] was not to pay holiday pay in addition to the
employees monthly pay, then there would be no need to impose or specify the pre-condition for
the payment.
[1]
Second, petitioners proffered as evidence their appointment papers which do not
contain any stipulation on the inclusion of holiday pay in their monthly salary. According to
petitioners, the absence of such stipulation is an indication that the mandated holiday pay is not
incorporated in the monthly salary. Third, petitioners noted the inclusion of a provision in the
CBA for the payment of an amount equivalent to 200% of the regular daily wage plus 60%
premium pay to employees who are permitted to work on a regular holiday. Petitioners claimed
that this very generous provision was the remedy availed of by Trans-Asia to allow its
employees to recoup the holiday pay in arrears and, as such, is a tacit admission of the non-
payment of the same during the period prior to the current CBA.
Finally, petitioners cited the current CBA provision which obligates Trans-Asia to give
holiday pay. Petitioners asserted that this provision is an acknowledgment by Trans-Asia of its
failure to pay the same in the past since, if it was already giving holiday pay prior to the CBA,
there was no need to stipulate on the said obligation in the current CBA.
With regard to the claim for the payment of holiday pay for the duration of the CBA, the
accusation of unfair labor practice and the claim for damages and attorneys fees, petitioners
asserted that Trans-Asia is guilty of bad faith in negotiating and executing the current CBA
since, after it recognized the right of the employees to receive holiday pay, Trans-Asia allegedly
refused to honor the CBA provision on the same.
In response to petitioners contentions, Trans-Asia refuted the same in seriatim. With regard
to the pre-condition for the payment of holiday pay stated in the Employees Manual and the
absence of a stipulation on holiday pay in the employees appointment papers, Trans-Asia
asserted that the above circumstances are not indicative of its non-payment of holiday pay since
it has always honored the labor law provisions on holiday pay by incorporating the same in the
payment of the monthly salaries of its employees. In support of this claim, Trans-Asia pointed
out that it has long been the standing practice of the company to use the divisor of 286 days in
computing for its employees overtime pay and daily rate deductions for absences. Trans-Asia
explained that this divisor is arrived at through the following formula:
52 x 44
---------- = 286 days
8
Where: 52 = number of weeks in a year
44 = number of work hours per week
8 = number of work hours per day
Trans-Asia further clarified that the 286 days divisor already takes into account the ten (10)
regular holidays in a year since it only subtracts from the 365 calendar days the unworked and
unpaid 52 Sundays and 26 Saturdays (employees are required to work half-day during
Saturdays). Trans-Asia claimed that if the ten (10) regular holidays were not included in the
computation of their employees monthly salary, the divisor which they would have used would
only be 277 days which is arrived at by subtracting 52 Sundays, 26 Saturdays and the 10 Legal
holidays from 365 calendar days. Furthermore, Trans-Asia explained that the 286 days divisor
is based on Republic Act No. 6640,
[2]
wherein the divisor of 262 days (composed of the 252
working days and the 10 legal holidays) is used in computing for the monthly rate of workers
who do not work and are not considered paid on Saturdays and Sundays or rest days. According
to Trans-Asia, if the additional 26 working Saturdays in a year is factored-in to the divisor
provided by Republic Act No. 6640, the resulting divisor would be 286 days.
On petitioners contention with regard to the CBA provision on the allegedly generous
holiday pay rate of 260%, Trans-Asia explained that this holiday pay rate was included in the
CBA in order to comply with Section 4, Rule IV, Book III of the Omnibus Rules Implementing
the Labor Code. The aforesaid provision reads:
Sec. 4. Compensation for holiday work. Any employee who is permitted or suffered
to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least
two hundred percent (200%) of his regular daily wage. If the holiday falls on the
scheduled rest day of the employee, he shall be entitled to an additional premium pay
of at least 30% of his regular holiday rate of 200% based on his regular wage rate.
On the contention that Trans-Asias acquiescence to the inclusion of a holiday pay provision
in the CBA is an admission of non-payment of the same in the past, Trans-Asia reiterated that it
is simply a recognition of the mandate of the Labor Code that employees are entitled to holiday
pay. It clarified that the companys firm belief in the payment of holiday pay to employees led it
to agree to the inclusion of the holiday pay provision in the CBA.
With regard to the accusation of unfair labor practice because of Trans-Asias act of
allegedly bargaining in bad faith and refusal to give holiday pay in accordance with the CBA,
Trans-Asia explained that what petitioners would like the company to do is to give double
holiday pay since, as previously stated, the company has already included the same in its
employees monthly salary and, yet, petitioners want it to pay a second set of holiday pay.
On 13 February 1989, the labor arbiter rendered a decision dismissing the complaint, to wit:
After considering closely the arguments of the parties in support of their respective
claims and defenses, this Branch upholds a different view from that espoused by the
complainants.
Just like in the Chartered Bank Case (L-44717), August 28, 1985, 138 SCRA 273,
which is cited by the complainants in their Position Paper, there appears to be no clear
agreement between the parties in the instant case, whether verbal or in writing, that
the monthly salary of the employees included the mandated holiday pay. In the
absence of such agreement, the Supreme Court in said Chartered Bank Case took into
consideration existing practices in the bank in resolving the issue, such as
employment by the bank of a divisor of 251 days which is the result of subtracting all
Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar
days in a year. Further, the Court took note of the fact that the bank used conflicting
or different divisors in computing salary-related benefits as well as the employees
absence from work. In the case at bar, not only did the CBA between the
complainants and respondents herein provides (sic) that the ten (10) legal holidays are
recognized by the Company as full holiday with pay. What is more, there can be no
doubt that since 1977 up to the execution of the CBA, the Trans-Asia, unlike that
obtaining in the Chartered Bank Case, never used conflicting or different divisors but
consistently employed the divisor of 286 days, which as earlier pointed out, was
arrived at by subtracting only the unworked 52 Sundays and the 26 half-day-worked
Saturdays from the total number of days in a year. The consistency in the established
practice of the Trans-Asia, which incidentally is not disputed by complainants, did not
give rise to any doubt which could have been resolved in favor of complainants.
Besides, the respondents unlike the respondent bank in the Chartered Bank Employees
Association vs. Hon. Blas F. Ople, et al. (supra) citing also the case of IBAAEU vs.
Hon,. Amado Inciong (132 SCRA 663) which case have (sic) invalidated Section 2,
Rule IV, Book III of the Implementing Rules of the Labor Code and Policy
Instruction No. 9, have never relied on the said invalidated rule and Policy Instruction.
The complainants arguments and juxtapositions in claiming that they were denied
payment of their holiday pay paled in the face of the prevailing company practices and
circumstances abovestated.
Also, for the reasons adverted to above, the complainants charge of unfair labor
practice claiming that respondents in bad faith refused to comply with their
contractual obligation under the CBA by not paying the complainants holiday pay,
must fail. Since respondents have nothing more to pay by way of legal holiday pay as
it has already been included in their monthly salaries, the provision in the CBA
relative to holiday pay is just but a recognition of the complainants right to payment
of legal holiday pay as mandated by the Labor Code.
WHEREFORE, all the foregoing premises being considered, judgment is hereby
rendered dismissing the complaint for lack of merit.
SO ORDERED.
[3]

Petitioners appealed to the National Labor Relations Commission. In its Resolution, dated
23 November 1993, the NLRC dismissed the appeal and affirmed the decision of the labor
arbiter, to wit:
We find no cogent reason to change or disturb the decision appealed from, the same
being substantially supported by the facts and evidence on record. "It is a well-settled
rule that findings of facts of administrative bodies, if based on substantial evidence are
controlling on the reviewing authority. (Planters Products, Inc. vs. NLRC, G. R. No.
78524 & 78739, January 20, 1989; 169 SCRA 328).
We find no abuse of discretion and/or error in the assailed decision.
WHEREFORE, the appeal are (sic) hereby DISMISSED for lack of merit and the
decision appealed from is AFFIRMED.
SO ORDERED.
[4]

Petitioners motion for reconsideration was, likewise, denied by the NLRC in its Resolution,
dated 13 September 1994.
Petitioners are now before us faulting the NLRC with the following assignment of errors:
I
PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN
UPHOLDING THE LABOR ARBITERS DECISION DESPITE THE LACK OF
SUBSTANTIAL EVIDENCE TO SUPPORT IT
II
IN UPHOLDING THE LABOR ARBITERS DECISION DESPITE THE LACK
OF SUBSTANTIAL EVIDENCE TO SUPPORT IT, PUBLIC RESPONDENT
NLRC VIOLATED THE CONSTITUTIONAL AND LEGAL MANDATE TO
RESOLVE ALL DOUBTS IN SOCIAL LEGISLATION IN FAVOR OF
LABOR.
[5]

Petitioners, in furtherance of their first assignment of error, assert that the NLRC blatantly
an unshamedly disregarded the numerous evidence in support of their claim and relied merely
on the sole evidence presented by Trans-Asia, the 286 days divisor, in dismissing their appeal
and, in so doing, is guilty of grave abuse of discretion.
[6]

We do not agree.
Trans-Asias inclusion of holiday pay in petitioners monthly salary is clearly established by
its consistent use of the divisor of 286 days in the computation of its employees benefits and
deductions. The use by Trans-Asia of the 286 days divisor was never disputed by
petitioners. A simple application of mathematics would reveal that the ten (10) legal holidays in
a year are already accounted for with the use of the said divisor. As explained by Trans-Asia, if
one is to deduct the unworked 52 Sundays and 26 Saturdays (derived by dividing 52 Saturdays in
half since petitioners are required to work half-day on Saturdays) from the 365 calendar days in a
year, the resulting divisor would be 286 days (should actually be 287 days). Since the ten (10)
legal holidays were never included in subtracting the unworked and unpaid days in a calendar
year, the only logical conclusion would be that the payment for holiday pay is already
incorporated into the said divisor. Thus, when viewed against this very convincing piece of
evidence, the arguments put forward by petitioners to support their claim of non-payment of
holiday pay, i.e., the pre-condition stated in the Employees Manual for entitlement to holiday
pay, the absence of a stipulation in the employees appointment papers for the inclusion of
holiday pay in their monthly salary, the stipulation in the CBA recognizing the entitlement of the
petitioners to holiday pay with a concomitant provision for the granting of an allegedly very
generous holiday pay rate, would appear to be merely inferences and suppositions which, in the
apropos words of the labor arbiter, paled in the face of the prevailing company practices and
circumstances abovestated.
Hence, it is on account of the convincing and legally sound arguments and evidence of
Trans-Asia that the labor arbiter rendered a decision adverse to petitioners. Acknowledging that
the decision of the labor arbiter was based on substantial evidence, the NLRC affirmed the
formers disposition. It is also with this acknowledgment that the Court affirms the questioned
resolutions of the NLRC. As aptly put by the Solicitor General, citing Sunset View
Condominium Corporation vs. NLRC,
[7]
findings of fact of administrative bodies should not be
disturbed in the absence of grave abuse of discretion or unless the findings are not supported by
substantial evidence.
[8]
In this regard, the Solicitor General observed: As said above, public
respondent acted on the basis of substantial evidence, hence, grave abuse of discretion is ruled
out.
[9]

However, petitioners insist that the agreement of Trans-Asia in the CBA to give a generous
260% holiday pay rate to employees who work on a holiday is conclusive proof that the monthly
pay of petitioners does not include holiday pay.
[10]
Petitioners cite as basis the case of Chartered
Bank Employees Association vs. Ople,
[11]
which reads:
Any remaining doubts which may arise from the conflicting or different divisors used
in the computation of overtime pay and employees absences are resolved by the
manner in which work actually rendered on holidays is paid. Thus, whenever
monthly paid employees work on a holiday, they are given an additional 100% base
pay on top of a premium pay of 50%. If the employees monthly pay already includes
their salaries for holidays, they should be paid only premium pay but not both base
pay and premium pay.
[12]

We are not convinced. The cited case cannot be relied upon by petitioners since the facts
obtaining in the Chartered Bank case are very different from those in the present case. In
the Chartered Bank case, the bank used different divisors in computing for its employees
benefits and deductions. For computing overtime compensation, the bank used 251 days as its
divisor. On the other hand, for computing deductions due to absences, the bank used 365 days as
divisor. Due to this confusing situation, the Court declared that there existed a doubt as to
whether holiday pay is already incorporated in the employees monthly salary. Since doubts
should be resolved in favor of labor, the Court in the Chartered Bank case ruled in favor of the
employees and further stated that its conclusion is fortified by the manner in which the
employees are remunerated for work rendered on holidays. In the present case, however, there is
no confusion with regard to the divisor used by Trans-Asia in computing for petitioners benefits
and deductions. Trans-Asia consistently used a 286 days divisor for all its computations.
Nevertheless, petitioners cause is not entirely lost. The Court notes that there is a need to
adjust the divisor used by Trans-Asia to 287 days, instead of only 286 days, in order to properly
account for the entirety of regular holidays and special days in a year as prescribed by Executive
Order No. 203
[13]
in relation to Section 6 of the Rules Implementing Republic Act 6727.
[14]

Section 1 of Executive Order No. 203 provides:
SECTION 1. Unless otherwise modified by law, order or proclamation, the following
regular holidays and special days shall be observed in the country:
A. Regular Holidays
New Years Day - January 1
Maundy Thursday - Movable Date
Good Friday - Movable Date
Araw ng Kagitingan - April 9
(Bataan and Corregidor Day)
Labor Day - May 1
Independence Day - June 12
National Heroes Day - Last Sunday of August
Bonifacio Day - November 30
Christmas Day - December 25
Rizal Day - December 30
B. Nationwide Special Days
All Saints Day - November 1
Last Day of the Year - December 31
On the other hand, Section 6 of the Implementing Rules and Regulations of Republic Act
No. 6727 provides:
Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory
Minimum Wage Rates.- Without prejudice from existing company practices,
agreements or policies, the following formulas may be used as guides in determining
the equivalent monthly statutory minimum wage rates:
x x x x x x x x x
d) For those who do not work and are not considered paid on Saturdays and Sundays
or rest days:
Equivalent Monthly = Average Daily Wage Rate x 262 days
Rate (EMR) 12
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; if actually worked, this is equivalent to
2.6 days)
-----------
262 days Total equivalent number of days
Based on the above, the proper divisor that should be used for a situation wherein the
employees do not work and are not considered paid on Saturdays and Sundays or rest days is 262
days. In the present case, since the employees of Trans-Asia are required to work half-day on
Saturdays, 26 days should be added to the divisor of 262 days, thus, resulting to 288
days. However, due to the fact that the rest days of petitioners fall on a Sunday, the number of
unworked but paid legal holidays should be reduced to nine (9), instead of ten (10), since one
legal holiday under E.O. No. 203 always falls on the last Sunday of August, National Heroes
Day. Thus, the divisor that should be used in the present case should be 287 days.
However, the Court notes that if the divisor is increased to 287 days, the resulting daily rate
for purposes of overtime pay, holiday pay and conversions of accumulated leaves would be
diminished. To illustrate, if an employee receives P8,000.00 as his monthly salary, his daily rate
would be P334.49, computed as follows:
P8,000.00 x 12 months
------------------------- = P334.49/day
287 days
Whereas if the divisor used is only 286 days, the employees daily rate would be P335.66,
computed as follows:
P8,000.00 x 12 months
------------------------ = P335.66/day
286 days
Clearly, this muddled situation would be violative of the proscription on the non-diminution of
benefits under Section 100 of the Labor Code. On the other hand, the use of the divisor of 287
days would be to the advantage of petitioners if it is used for purposes of computing for
deductions due to the employees absences. In view of this situation, the Court rules that the
adjusted divisor of 287 days should only be used by Trans-Asia for computations which would
be advantageous to petitioners, i.e., deductions for absences, and not for computations which
would diminish the existing benefits of the employees, i.e., overtime pay, holiday and leave
conversions.
For their second assignment of error, petitioners argue that, since they provided the NLRC
with overwhelming proof of their claim against Trans-Asia, the least that the NLRC could
have done was to declare that there existed an ambiguity with regard to Trans-Asias payment of
holiday pay. Petitioners then posits that if the NLRC had only done so, this ambiguity would
have been resolved in their favor because of the constitutional mandate to resolve doubts in favor
of labor.
We are not persuaded. As previously stated, the decision of the labor arbiter and the
resolutions of the NLRC were based on substantial evidence and, as such, no ambiguity or doubt
exists which could be resolved in petitioners favor.
WHEREFORE, premises considered, the Resolutions of the NLRC, dated 23 November
1993 and 13 September 1994, are hereby AFFIRMED with the MODIFICATION that Trans-
Asia is hereby ordered to adjust its divisor to 287 days and pay the resulting holiday pay in
arrears brought about by this adjustment starting from 30 June 1987, the date of effectivity of
E.O. No. 203.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
[G.R. No. 94237. February 26, 1997]
BUILDING CARE CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, FIRST DIVISION, and ROGELIO
RODIL, respondents.
D E C I S I O N
PANGANIBAN, J .:
In dismissing this petition, the Court reiterates the well-entrenched
doctrine that (1) a motion for reconsideration, as a rule, is an indespensible
pre-condition to the filing of a petition for certiorari, and (2) findings of facts of
the National Labor Relations Commission (NLRC), affirming those of the
Labor Arbiter, are binding upon the Supreme Court.
This petition for certiorari under Rule 65 of the Rules of Court seeks to
annul the Decision
[1]
promulgated on May 9, 1990 of the First Division
[2]
of
public respondent in NLRC Case No. NCR-00-04-01605-88 which affirmed
the decision of Labor Arbiter Quintin C. Mendoza. The dispositive portion of
the affirmed decision of the labor arbiter reads:
[3]

"WHEREFORE, decision is hereby rendered for the complainant declaring his
suspension and dismissal illegal and ordering the respondent to reinstate him plus
backwages from time his (sic) dismissal at the adjusted rate under R.A. 6640 and
retaining whatever seniority rights in the job he has (sic) plus his legal holidays pay
of P1,178.00 and differential pay of P369.40 and attorney's fees of not more than ten
(10%) of the total award."
The Facts
The facts as found by public respondent are as follows:
[4]

Complainant (herein private respondent) alleged that his wages, 13th month pay and
service incentive leave pay were unpaid; that he was not paid for work rendered
during legal holidays; that on February 11, 1988, he was suspended for one week by
his supervisor, H. Silvestre, for no apparent reason; that the suspension was illegal
because of the absence of just cause and respondent's (herein petitioner) non-
compliance with the requirements of due process; that thereafter, he was not given any
assignment, despite repeated follow-ups, summarized as follows:
Date Person Approached Result
2-19-88 Supervisor H. Silvestre Required complainant to return
(on) 2-20-88
2-20-88 FEBTC Worked for one pay (should be day);
no time card & pay
2-23-88 Mr. Adriatico Referred to Silvestre not given work
2-23-88 Mr. Barbosa, FEBTC Told to go home; promise(d) to talk
to Silvestre
2-24-88 H. Silvestre/Mr. Adriatico Scolded; not given work
2-26-88 Supervisor Ms. Carol Told to return the following day
2-27-88 Supervisors Silvestre/Ms. Carol Not given work
2-29-88 Silvestre Not given work
3-04-88 Supervisors Silvestre, Viray, Melanie No results
3-23-88 Silvestre No results
3-25-88 Ms. Malig Promised to ask supervisors what
happened
3-28&29-88 Ms. Malig Told supervisors not around
4-04-88 Ms. Malig Informed he would no longer be
given Work
Respondent contended that complainant was paid his wages and holiday pay in
accordance with law; that it was unable to comply with R.A. 6640 immediately
because of its client's delay in approving the adjusted contract rates; that it was ready
to pay complainant P369.40 representing salary differentials from December 14,
1987 to February 11, 1988; that on February 9, 1988, FEBTC complained that
complainant's area of responsibility was improperly cleaned; that complainant was
twice instructed to report to respondent's night shift supervisor, but on both times, he
failed to do so; that because of such defiance, he was verbally warned that drastic
disciplinary action would be taken against him should he persist in failing to report
as directed; that on February 11, 1988, the assistant supervisor erroneously noted on
the logbook that complainant was being suspended; that the suspension was not
carried out as complainant was allowed to work the following day, as shown by his
daily time record; that he was advised to report to respondent's office the following
day; that, instead, complainant took a long absence without leave starting on
February 12, 1988; that he showed up at respondent's office only on March 28,
1988; that he was required to submit a written explanation of his long absence
without leave, frequent absences in the post and deteriorating performance; that
complainant wrote that he failed to report because his supervisor suspended him for
no apparent reason; that he was told that an investigation of his alleged suspension
would be conducted and, in view of the forthcoming non-working holidays, advised
to report on April 4, 1988; that, in the meantime, respondent's supervisor reported
that FEBTC had indicated that it would no longer accept complainant; that
complainant was advised of FEBTC's decision on April 4, 1988; that for
humanitarian reasons, complainant was advised that he was going to be temporarily
assigned as reliever at respondent's office while there was no available post in its
other clients; that complainant requested for a week-long leave, allegedly because he
had to bring his family to Quezon Province; that complainant again failed to report
for work on April 18, 1988; that he was sent a letter advising him to report to
respondent's office; that he never went back to respondent's office; but instead, filed
the instant case.
Complainant maintained that he did his work properly; that he was absent from
January 18-22 (1988) because he was sick, and he duly advised respondent of his
sickness; that he was absent from February 1-8 (1988) because he had to take care of
his wife who was sick, as shown by her medical certificate; that he was absent again
for one week starting February 12, 1988 because he was illegally suspended; that
thereafter, he was never given another assignment, contrary to respondent's untruthful
averments; that he was denied due process of law by respondent; that respondent may
have sent him a letter after April 4, 1988, but it was too late because he had already
instituted the instant case.
Respondent submitted the affidavits of Wendel Viray, Hernani Silvestre and Germel
Villamor, its over-all Supervisor and janitor, respectively, stating that instead of
implementing the suspension, complainant was transferred from the night shift to the
day shift; that complainant requested to be returned to the night shift, but his request
was not granted; that he was given a chance to work at respondent's office, but he
failed to report there as instructed."(Citations omitted).
Hence, on April 19, 1988, private respondent filed with the Arbitration
Branch of the NLRC a complaint for illegal dismissal, underpayment and non-
payment of legal holiday pay against petitioner. At the initial hearing, private
respondent was offered reinstatement, but he insisted on being paid his
backwages because of his alleged unjustified dismissal. Petitioner did not
agree. Thus, after the parties submitted their respective position papers and
other documentary evidence, the Labor Arbiter issued a decision in favor of
private respondent.
[5]

The Issue
Petitioner raises single issue in its petition, to wit:
[6]

With all due respects to the Hon. National Labor Relations Commission, First
Division, petitioner submits that in affirming the decision of the Hon. Labor Arbiter
and (in) dismissing petitioner's appeal, public respondent committed grave abuse of
discretion and acted arbitrarily and capriciously as the questioned (Decision) is
contrary to law and evidence."
Petitioner alleges that the labor arbiter relied only on complainant's
affidavit. Public respondent failed to consider that the Labor Arbiter gave
very little or no probative value to evidence adduced by petitioner, both
documentary and testimonial. Petitioner further claims that both public
respondent and the Labor Arbiter missed the antecedent and most important
issue of whether or not private respondent had really been dismissed by
petitioner.
[7]
According to petitioner, the employer is tasked with the burden of
proving just cause for dismissal but "the primary burden of proving the fact of
dismissal itself rests upon the complaining employee."
[8]

Petitioner states that even if it is assumed that private respondent was
dismissed, there were just causes for the termination of his service;
[9]
the
conduct of private respondent was inconsistent with proper subordination."
[10]

Petitioner alleges too that private respondent failed to prove that he was
not paid amounts corresponding to the legal holidays and there being no
merit to private respondents complaint, attorney's fees should not be awarded
either.
[11]

Public respondent in affirming the decision of the labor arbiter reasoned as
follows:
[12]

"Contrary to respondent's (herein petitioner) argument on appeal, the burden of proof
in dismissal cases is borne by the employer, who has to prove the existence of a just
cause (Asphalt & Cement Pavers, Inc. vs. Leogardo, Jr., 162 SCRA 312). This is
even more true if, like the respondent, the employer puts up the defense of
abandonment. The rule is that the defense of abandonment should be proved
(Penaflor vs. NLRC, 120 SCRA 68; Polymedic General Hospital vs. NLRC, 134
SCRA 420).
We have perused the entire records, and We are inclined to conclude that respondent's
theory of abandonment has not been sufficiently proven.
Complainant's (herein private respondent) claim that he was suspended for no
apparent reason for one week is borne out by the logbook entry for February 11, 1988
and by his letter-explanation dated March 28, 1988. It should also be noted that
complainant stood pat on this claim throughout the entire proceedings.
On the other hand, respondent, in its position paper filed on July 13, 1988, simply
contended that complainant failed, without prior leave, to report for work despite
respondent's repeated instructions. In the affidavits submitted on September 21, 1988,
three of respondent's employees averred that complainant was transferred to the day
shift and he quit his job because he was against such transfer. This is an entirely new
twist which did not appear in the memoranda and logbook entries earlier submitted by
respondent, nor even in its position paper. For this reason, said averment appears to
be an afterthought, which cannot be given much weight.
x x x x x x x x x
Finally, We find no compelling reason to disturb the award of holiday pay amounting
to P1,178.00 and salary differentials amounting to P369.40. If respondent had really
paid complainant holiday pay, it could easily have presented its payrolls, which
constitute the best proof of payment. These are necessarily in the possession of
respondent, so complainant cannot be blamed for their non-production. Moreover,
respondent admitted its failure to comply with the wage increase mandated by R.A.
6640."(Citations omitted).
The Court's Ruling
The contention of petitioner is without merit. We totally support the
Decision of the National Labor Relations Commission.
At the outset, we note that the petition suffers from a procedural defect
that warrants its outright dismissal. Petitioner prematurely acted. It did not file
a motion for reconsideration with public respondent before availing of the
special civil action of certiorari. This premature action constitutes a fatal
infirmity as ruled in a catena of cases, most recently in the case of Interorient
Maritime Enterprises, Inc., et al. vs. National Labor Relations Commission, et
al.
[13]
in this wise:
x x x The unquestioned rule in this jurisdiction is that certiorari will lie only if there
is no appeal or any other plain, speedy and adequate remedy in the ordinary course of
law against the acts of public respondent. In the instant case, the plain and adequate
remedy expressly provided by the law was a motion for reconsideration of the assailed
decision, based on palpable or patent errors, to be made under oath and filed within
ten (10) calendar days from receipt of the questioned decision.
(T)he filing of such a motion is intended to afford public respondent an opportunity to
correct any actual or fancied error attributed to it by way of a re-examination of the
legal and factual aspects of the case. Petitioner's inaction or negligence under the
circumstances is tantamount to a deprivation of the right and opportunity of the
respondent Commission to cleanse itself of an error unwittingly committed or to
vindicate itself of an act unfairly imputed. x x x
x x x And for failure to avail of the correct remedy expressly provided by law,
petitioner has permitted the subject Resolution to become final and executory after the
lapse of the ten day period within which to file such motion for reconsideration."
On the merits, petitioner wants this Court to determine if private
respondent was really dismissed. This is a question of fact which cannot be
raised in a petition for certiorari under Rule 65.
"It should be noted, in the first place, that the instant petition is a special civil action
for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy,
its use is available only and restrictively in truly exceptional cases -- those wherein the
action of an inferior court, board or officer performing judicial or quasi-judicial acts
is challenged for being wholly void on grounds of jurisdiction. The sole office of the
writ of certiorari is the correction of errors of jurisdiction including the commission
of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not
include correction of public respondent NLRC's evaluation of the evidence and factual
findings based thereon, which are geerally accorded not only great respect but even
finality."
[14]

The recitation of facts evidently shows that public respondents did not rely
on the evidence presented by private respondents. All the evidence
presented for or against, the position of private respondents have been duly
considered in arriving at its conclusion.
"Both the Labor Arbiter and the respondent NLRC gave credence to the evidence of
the private respondents that he was illegally dismissed. We are not free to tamper
with their calibration of the weight of evidence in the absence of a clear showing that
it is arbitrary and bereft of any rational basis."
[15]

Indeed if petitioner wanted to prove its payment of holiday pays and salary
differentials, it could have easily presented proofs of such monetary
benefits. But it did not. It had failed to comply with the mandate of the
law. As public respondent ruled, the burden of proof in this regard belongs to
the employer, nor to the employee.
We also sustain the award of the attorney's fees. "It is settled that in
actions for recovery of wages or where an employee was forced to litigate and
incur expenses to protect his right and interest, he is entitled to an award of
attorney's fee's."
[16]

WHEREFORE, premises considered, the Petition is DISMISSED and the
assailed Decision is AFFIRMED. Double costs against petitioner.
SO ORDERED.
[G.R. No. 105892. January 28, 1998]
LEIDEN FERNANDEZ, BRENDA GADIANO, GLORIA ADRIANO,
EMELIA NEGAPATAN, JESUS TOMONGHA, ELEONOR
QUIANOLA, ASTERIA CAMPO, FLORIDA VILLACERAN,
FLORIDA TALLEDO, MARILYN LIM and JOSEPH
CANONIGO, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, FOURTH DIVISION, MARGUERITE
[1]
LHUILLIER
AND/OR AGENCIA CEBUANA-H. LHUILLIER, respondents.
D E C I S I O N
PANGANIBAN, J .:
Is failure to attend hearings before the labor arbiter a waiver of the right to present
evidence? Are moral damages included in the computation of monetary award for
purposes of determining the amount of the appeal bond? Is there a limit to the amount
of service incentive leave pay and backwages that may be awarded to an illegally
dismissed employee?
The Case
These are the main questions raised in this petition for certiorari under Rule 65 of
the Rules of Court assailing the March 11, 1992 Decision
[2]
of Respondent National
Labor Relations Commission (NLRC),
[3]
the dispositive portion of which reads:
[4]

WHEREFORE, premises considered, the appealed decision is hereby
declared VACATED and the entire records of these cases are hereby ordered
remanded to the Regional Arbitration Branch VII for further proceedings.
This petition also challenges the NLRCs May 29, 1992 Resolution denying the
motion for reconsideration.
The decision
[5]
vacated by the NLRC and penned by Labor Arbiter Gabino A.
Velasquez, Jr. disposed as follows:
[6]

WHEREFORE, judgment is hereby rendered in favor of the complainants and
against the respondent. The respondent is hereby ordered:
1. To reinstate the complainants to their respective position [sic] at the
Agencia Cebuana with full backwages without qualification; if reinstatement is
not feasible, for one reason or another, to pay to the complainants their
respective separation pay, service incentive leave pay with full backwages
without qualification computed hereunder as follows:
1. LEIDEN FERNANDEZ:
a) Separation Pay for 6 years = P 8,640.00
b) Service Incentive Leave (6 yrs.)= 3,322.50
c) Backwages for one year only = 34,560.00
TOTAL = P 46,522.50
2. GLORIA ADRIANO:
a) Separation pay for 17 years = P 28,560.00
b) Service incentive leave (17 yrs.)= 10,986.25
c) Backwages for one year = 40,320.00
TOTAL = P 79,866.25
3. EMELIA NEGAPATAN:
a) Separation pay for 24 yrs. =P 35,760.00
b) Service incentive leave (24 yrs.)= 13,752.00
c) Backwages for one year = 35,760.00
TOTAL = P 85,272.00
4. JESUS P. TOMONGHA:
a) Separation pay for 33 years = P 50,655.00
b) Service Incentive leave = 19,478.25
c) Backwages for one year = 36,840.00
TOTAL = P 106,973.25
5. ELEONOR QUIANOLA:
a) Separation pay for 14 years = P20,860.00
b) Service Incentive Leave = 8,022.00
c) Backwages for one year = 35,760.00
TOTAL = P 64,642.00
6. ASTERIA CAMPO:
a) Separation pay for 13 years = P19,240.00
b) Service Incentive Leave (13 yrs.) = 7,400.00
c) Backwages for one year = 35,520.00
TOTAL = P62,160.25
7. FLORIDA VILLACERAN:
a) Separation pay for 17 yrs. = P25,160.00
b) Service Incentive leave (17 yrs.) = 9,677.25
c) Backwages for one year = 35,520.00
TOTAL = P 70,357.25
8. FLORIDA TALLEDO:
a) Separation pay for 18 yrs. = P 27,450.00
b) Service Incentive leave (18 yrs.) = 10,557.00
c) Backwages for one year = 36,600.00
TOTAL = P 74,607.00
9. BRENDA GADIANO:
a) Separation pay for 13 yrs. = P19,597.50
b) Service Incentive leave (13 yrs.) 7,536.75
c) Backwages for one year 36,180.00
TOTAL = P 63,313.25
10. MARILYN LIM:
a) Separation pay for 7 yrs. = P12,950.00
b) Service Incentive for 7 yrs. = 4,980.50
c) Backwages for one year = 44,400.00
TOTAL P 62,330.00
11. JOSEPH CANONIGO:
a) Separation Pay for 2 years = P 2,700.00
b) Service Incentive Leave (2 yrs.) = 1,038.50
c) Backwages for 1 year = 32,400.00
TOTAL = P 36,138.50
2) To pay to all complainants the amount of P100,000.00 for moral damages
and the amount of another P100,000.00 for exemplary damages, plus the
amount of P98,018.25 as attorneys fees representing 10% of the total award
and the amount of P30,000.00 for litigation expenses.
The totality of the award amounting to P1,078,200.55 must be deposited with
this Office ten (10) days from receipt of this decision for further
disposition. However, the payment of backwages will be computed as of the
actual date of payment provided it will not exceed a period of three years.
The Facts
The factual milieu of this case is recited by the solicitor general in his Comment
dated December 21, 1992 as follows:
[7]

1. The instant case stemmed from a consolidated complaint against private
respondents Agencia Cebuana-H. Lhuillier and/or Margueritte Lhuillier
(Lhuillier) for illegal dismissal (Rec., pp. 56-58). The Agencia Cebuana is a
sole proprietorship operated by Margueritte Lhuillier.
2. Two (2) Position Papers were filed by petitioners, one by Leiden E.
Fernandez, Gloria B. Adriano, Emilia A. Negapatan, Jesus P. Tomongha,
Eleonor A. Quianola, Asteria C. Ocampo [sic], Florida Villaceran, Florida B.
Tallado [sic] and Brenda A. Gadiano (Rec., pp. 79-88) and the other by
Marilyn E. Lim and Joseph Canonigo (Exhibit C-4).
3. In their Position Papers, petitioners alleged that they were employed by
Lhuillier, as follows:
Name Position
Date of Employment Latest
Salary/Month
Date of Dismissal
1. Leiden E.
Fernande
z
Cashier Dec. 3, 1984
P2,880.00
July 19, 1990
2. Gloria B.
Adriano
Appraiser July 10, 1973
3,360.00
July 19, 1990
3. Emilia A.
Negapatan
Sales Girl March 9, 1966
2,980.00
July 19, 1990
4. Jesus
P.
Tomongha
Office Clerk July 1957 3,070.00
July 19, 1990
5. Eleonor
A.
Quianola
Office
Clerk
Dec. 8, 1976
2,980.00
July 21, 1990
6. Asteria
C. Campo
Clerk May 27, 1977
2,960.00
July 19, 1990
7. Florida
Villaceran
Sales
Clerk
March 8, 1973
2,960.00
July 19, 1990
8. Florida B.
Talledo
Pawnsho
p Writer
June 19, 1972
3,050.00
July 19, 1990
9. Brenda
A. Gadiano
Pawnsho
p Teller
March 7, 1977
3,015.00
July 19, 1990
10. Marilyn
E. Lim
Branch
Manager
June 1984
3,700.00
Feb. 16, 1990
11. Joseph
M.
Canonigo
Record
Keeper
June 1988
2,700.00
July 14, 1990
Petitioners Fernandez, Adriano, Negapatan, Tomongha, Quianola, Campo,
Villaceran, Talledo, and Gadiano further alleged that prior to and during early
July 1990, they demanded from Margueritte Lhuillier an increase in their
salaries since her business was making good and that she was evading
payment of taxes by making false entries in her records of account; that
Lhuillier became angry and threatened them that something would happen to
their employment if they would report her to the BIR; that shortly thereafter,
Lhuillier suspected them of stealing jewelry from the pawnshop; that on July
19, 1990, Lhuillier verbally informed them not to report for work as their
employment had been terminated; that from July 20, 1990 they did not report
for work; and on July 23, 1990, they filed the instant complaint (Rec., pp. 79-
88).
On their part, petitioners Lim and Canonigo alleged that in early January 1990
and in June 1990, respectively, they demanded increases in their salaries
since they noted that Lhuillier had a very lucrative business besides evading
tax payments by making false entries in her records of account; that they also
informed her that they intended to join the Associated Labor Union (ALU),
which made Lhuillier angry, causing her to threaten them that should they
report her to the BIR and join the ALU something would happen to their
employment; that Lhuillier advised them to tender their resignations as they
were reportedly responsible for some anomalies at the Agencia Cebuana-H
Lhuillier; that Lhuillier assured them that they will be given separation pay; that
they asked Lhuillier that they be allowed to confront the persons who reported
to her about their supposed involvement in the alleged anomalies but she
ignored it and told them to tender their respective resignations effective
February 16, 1990 (for Lim) and July 14, 1990 (for Canonigo); and that they
were not given separation pay (Decision, pp. 6-8; Rec., pp. 256-258).
5. In her Position Paper, Lhuillier, represented initially by Atty. Malcolm V.
Seno, alleged that:
a) In the case of Marilyn Lim, on January 13, 1990, she was informed that an
investigation will be conducted by Lhuillier because of the report received by
Flora Go, also an employee of Lhuillier, that Lim sold to a company consumer
her own jewelry, in violation of the company house rules; on January 22,
1990, a Notice of Intended Termination was served upon her requiring her to
submit a written explanation within 48 hours from receipt; Lim did not submit a
written explanation but actively participated in the investigation where she
admitted having committed the violation complained of; in view of her
admission of guilt, the company lawyer recommended to the management her
demotion and transfer without reduction of salary; after Lims receipt of a copy
of the investigation report, she sent through her lawyer a letter signifying her
intention to resign and her willingness to execute a promissory note for her
indebtedness; the company gave Lim a draft of the promissory note which
was never returned by her; on February 24, 1990 she tendered an irrevocable
letter of resignation, hence, she was not terminated; and because of the
malicious and false complaint filed by Lim, the company was compelled to file
a counter-complaint for Perjury against her before the Office of the City
Prosecutor of Cebu City (Rec., pp. 92-93; 97).
b) In the case of Jesus Tomongha, he was found to have stolen rematado
jewelries worth P70,670.00 sometime in March 1990; instead of attending the
investigation scheduled for this offense, he abandoned his job although his
application for leave of absence was not approved; Lhuillier asked the
company lawyer to talk with Tomongha for him to return to work so that he
could pay his pecuniary liability out of his salary; Lhuillier made it a pre-
condition for his return to work that he executes a promissory note for his
indebtedness; on April 10, 1990, he executed a promissory note and was
allowed to return to work; on July 20, 1990, he and the other petitioners,
abandoned their employment; he was not dismissed but he was allowed to
return to work and was only made to execute a promissory note when the
company found out sometime in March 1990 that he had stolen rematado
jewelries worth P70,670.00 (Rec., pp. 97-101).
c) In the case of the other petitioners, on July 19, 1990, Gloria Adriano was
found by Flora Go to have over-declared the weights and values of certain
items of jewelry pawned to the company, as a result of which, upon
investigation, the pawnshop was found to have lost the amount
ofP174,850.00; a letter dated July 19, 1990 was served upon Adriano to
explain within 72 hours why she should not be terminated; on July 20, 1990,
Gloria Adriano, Florida Villaceran, Emilia Negapatan, Brenda Gadiano, Leiden
Fernandez, Jesus Tomongha, Asteria Campo and Florida Talledo did not
report for work although no requests for leave of absence were filed by them,
which absence violated company rules; on July 21, 1990, the said employees
did not report for work; another employee, Eleonor Quianola, also did not
report for work although she did not file a request for leave of absence; on
July 23, 1990 the said nine (9) employees did not report for work; because of
this unusual incident, the management decided to make an inventory of the
transactions in Agencia Cebuana and the rematado diamond-studded
jewelry; the inventory showed that the pawnshop incurred a considerable loss
as a result of the anomalous overpricing of pawned items and the employees
immediately responsible were Gloria Adriano, Florida Talledo and Leiden
Fernandez, being the appraiser, writer and payer, respectively; the inventory
also showed that of the rematado diamond-studded jewelries, items
worth P1,592,200.00 were lost for which Florida Villaceran and Emilia
Negapatan were directly responsible, being the employees entrusted with
their safekeeping; a case of Estafa was filed on July 24, 1990 before the
Office of the City Prosecutor of Cebu City against Gloria Adriano, Florida
Talledo, Leiden Fernandez, Asteria Campo, Brenda Gadiano, Florida
Villaceran, Emilia Negapatan, and Jesus Tomongha and three (3) other
unknown persons; a case of Theft was filed on August 16, 1990 with the
Office of the City Prosecutor of Cebu City against Florida Villaceran and
Emilia Negapatan; when Lhuillier left for Hongkong on July 19, 1990, she did
not terminate the employment of Gloria Adriano nor was she advised not to
report for work, although a letter was served upon her requiring her to explain
within 72 hours why she should not be terminated from her employment; when
Lhuillier arrived from Hongkong, she caused to be served upon the eight (8)
petitioners who joined Adriano, letters dated July 25, 1990 requiring them to
explain the sudden abandonment of their posts; petitioners, except Lim,
instead of giving an explanation, claimed that their employment[s] were
terminated on July 19, 1990; Lhuillier was prevented from pursuing any action
in respect of the illegal abandonment of their work by the nine (9) petitioners
because she was served with summons in the instant case; petitioners did not
report for work and voluntarily abandoned their work on July 19, 1990 in order
to dramatize their sympathy for Gloria Adriano, and they were not dismissed
from their employment; their demand for an award of damages and attorneys
fees was unwarranted; petitioners had no cause of action against Lhuillier
because they were not terminated from employment; and Quianola could not
have been terminated from employment on July 21, 1990 because Lhuillier
was in Hongkong at that time (Rec., pp. 96-108).
6. Trial on the merits ensued and hearings were scheduled on July 5, 8, and
12, 1991.
7. The hearing scheduled on July 5, 1991 was, however, postponed by
agreement of the parties as shown in the minutes of the proceedings on July
8, 1991:
x x x x x x x x x
REMARKS
This case was scheduled for the cross-examination of the last witnesses (sic),
Marilyn Lim, who is one of the complainants of this (sic) consolidated cases.
The scheduled dates was (sic) July 5, 8, and 12, 1991 which dates were for
the crossexamination (sic) of Marilyn Lim and for the respondents to present
their evidence.
The July 5, 1991 (sic) was postponed upon aggreement [sic] of the parties
and counsels and that it was aggreed (sic) the repondents (sic) counsel will
cross examine Marilyn Lim on July 8, 1991 and for the respondents to present
their evidence on July 12, 1991. In as much (sic) as the respondents and
their counsel failed to appear today to cross-examine Marilyn Lim, we moved
that the respondent be declared having waived their rights (sic) to cross-
examine Marilyn Lim. (Rec., p. 176).
8. On July 8, 1991, counsel for petitioners filed Complainants Formal Offer of
Evidence (Rec., pp. 182-187).
9. At the hearing scheduled on July 12, 1991, Atty. Seno and Lhuillier failed
to appear. Thus, counsel for petitioners submitted the instant case for
resolution (Rec., p. 181).
10. On July 18, 1991, a Ruling was issued by Labor Arbiter Velasquez,
admitting complainants exhibits (Rec., pp. 189-190).
11. On July 30, 1991, counsel for petitioners filed an Urgent Motion For Early
Decision (Rec., pp. 191-193).
12. On August 6, 1991, Atty. Seno filed a Comment to the Offer of Exhibits
With Counter-Manifestation stating that:
[T]he failure of undersigned to appear on the date of hearing was for the
reason that his car bogged down, as in fact he called up the Office of the
Hearing Officer. While his absence may be considered a waiver to cross-
examine the witness, it cannot be taken to mean forfeiture of the right to
present admissible evidence against the complainant witness. (Rec., pp.
195-197)
13. On August 9, 1991, Atty. Seno filed his Comment on Complainants
Urgent Motion For Early Decision praying that Lhuillier be given a period of
ten (10) days from August 9, 1991 within which to submit additional affidavits
and thereafter to consider the cases submitted for resolution (Rec., pp. 199-
200).
14. On August 15, 1991, petitioners filed a Counter-Comment On
Respondents Comment of [sic] Motion For Early Decision alleging that under
Rule VII, Section 10 (c) of the Revised Rules of Court of the NLRC which
reads:
x x x x x x x x x
c) In case of unjustified non-appearance by the respondent during her/his
turn to present evidence, despite due notice, the case shall be considered
submitted for decision on the basis of the evidence so far presented.
the non-appearance of Lhuillier or its counsel on the scheduled dates of
hearing on July 8 and 12, 1991, was clearly unjustified (Rec., pp. 202-205).
15. On October 14, 1991, Atty. Seno filed a Motion Reiterating The Request
For Submission Of Additional Affidavits therein alleging that Lhuilliers
previous motion to present additional affidavits had not been acted upon; and
that he had not received an order considering the instant case submitted for
resolution. With the motion, Lhuillier submitted the affidavits of additional
witnesses, praying that said supplemental affidavits be admitted and
presentation of additional evidence be allowed (Rec., pp. 207-209).
16. On October 16, 1991, petitioners filed an Opposition On [sic]
Respondents Request For Submission Of Additional Affidavits And Urgent
Motion To Release Decision, alleging that counsel for Lhuillier was given
ample opportunity to present his evidence; that by his failure to appear at the
scheduled hearings without any reason or prior motion for postponement, he
was deemed to have waived his right to present evidence; and that about the
later part of August 1991, upon learning that Labor Arbiter Velasquez would
be transferred to NLRC, Tacloban, they (petitioners) inquired about the status
of the instant case and they were informed by Labor Arbiter Velasquez that a
Decision was already rendered (Rec., pp. 203-205).
On August 30, 1991, the labor arbiter rendered a decision in favor of
petitioners. On appeal, Respondent NLRC vacated the labor arbiters order and
remanded the case for further proceedings. It subsequently denied the motion for
reconsideration.
Respondent NLRCs Ruling
Ruled the NLRC:
[8]

In resolving this issue [of due process], it is necessary to go over the
pertinent provisions of the 1990 NLRC Rules of Procedure, more particularly
Sec. 11, Rule V.
Rule V - Proceedings Before the Labor Arbiters:
Section 11. Non-appearance of Parties at Conference/Hearings. - (a) Two (2)
successive absences at a conference/hearing by the complainant or
petitioner, who was duly notified thereof may be sufficient cause to dismiss
the case without prejudice. Where proper justification, however, is shown by
proper motion to warrant the re-opening of the case, the Labor Arbiter shall
call a second hearing and continue the proceedings until the case is finally
decided. Dismissal of the case for the second time due to the unjustified non-
appearance of the complainant or petitioner who was duly notified thereof
shall be with prejudice.
b) In case of two (2) successive non-appearances by the respondent, despite
due notice, during the complainants presentation of evidence, the
complainant shall be allowed to present evidence ex-parte, subject to cross-
examination by the respondent, where proper, at the next hearing. Upon
completion of such presentation of evidence for the complainant, another
notice of hearing for the reception of the respondents evidence shall be
issued, with a warning that failure of the respondent to appear shall be
construed as submission by him of the case for resolution without presenting
his evidence.
c) In case of two (2) successive unjustified non-appearances by the
respondent during his turn to present evidence, despite due notice, the case
shall be considered submitted for decision on the basis of the evidence so far
presented.
The established fact is that July 8 and 12, 1991 were the scheduled dates for
the cross-examination of Marilyn Lim, last witness for the complainants and
the start of respondents presentation of evidence. It is also not disputed that
respondent and counsel failed to appear at the July 8 hearing. A scrutiny of
the minutes of the July 8, 1991 hearing would however reveal that that date
was alloted [sic] purposely for the cross-examination of Marilyn Lim and that
respondents presentation of evidence would start on July 12, 1991. (page
176, records) Technically, the Labor Arbiter was correct in ruling that
respondent had waived her right to cross-examine complainant Marilyn Lim
when she failed to appear on July 8, 1991. But definitely, it was error for him
to consider the case submitted for decision when respondent failed to appear
on July 12, 1991. The above-cited rules are clear and explicit. It takes two
successive and unjustified non-appearance on the part of respondent before
he or she can be considered to have waived his/her right to present evidence
and thereafter to consider the case submitted for decision on the basis of the
evidence thus far presented. Respondents absence on July 12, 1991 was
but her first since, as pointed out, it was on that day that she was supposed to
start presenting her evidence. What the Labor Arbiter should have done was
to set another date for the reception of respondents evidence. If she still
failed to appear, his reliance on Sec. 11 (c), Rule V of the New Rules of
Procedure of the NLRC would have been justified and this Commission would
not hesitate to uphold him on that respect. As it is, the questioned ruling was,
indeed, premature to say the least. While concern for the less privileged
workers and speediin [sic] the disposition of labor cases are highly
commendable, those considerations should not run roughshod over well-
established principles of due process.
It may be argued that the evidence sought to be introduced by respondent are
contained in the additional affidavits which now form part of the records,
hence this Commission can now decide this appeal on the merits. It is with
more reason that this case should be remanded not only to allow respondent
to formally present her evidence, but also to allow complainants to cross-
examine and confront their accusers. (Underscoring supplied.)
Not satisfied, petitioners filed the present petition before us under Rule 65 of the
Rules of Court.
[9]

The Issues
Petitioners submit to this Court the following issues:
[10]

A
The Honorable Commission has committed serious reversible error amounting
to a grave abuse of discretion and in excess of jurisdiction in finding that the
private respondent was not afforded due process by the hearing labor arbiter,
particularly the reception of private respondents evidence.
B
The Honorable Commission has committed serious reversible error amounting
to a grave abuse of discretion and in excess of jurisdiction in finding that the
declaration by the hearing labor arbiter submitting these cases for decision on
July 12, 1991 was not in accordance with Rule V Section II of the 1990 New
Rules of Procedure of the NLRC (attached hereto as annex C).
C
The Honorable Commission has committed serious reversible error amounting
to a grave abuse of discretion and in excess of jurisdiction in giving
importance to private respondents additional alleged affidavits which were
filed only on October 14, 1991 (attached hereto as annex G-1), by way of
attaching the same in private respondents motion reiterating request for
submission of additional affidavits (attached hereto as annex G), long after
the hearing labor arbiter rendered a decision on August 30, 1992 (attached
hereto as annex E), contrary to the private respondents prayer and
commitment (attached hereto as annex F-1).
D
The Honorable Commission has committed serious reversible error amounting
to a grave abuse of discretion, in substance and in law, in not modifying the
appealed decision of the hearing labor arbiter (attached hereto as annex E)
with respect to the accuracy of the monetary awards pursuant to the pertinent
provisions of the Labor Code, its implementing rules and regulations and
pursuant particularly to the celebrated case of Roche (Philippines), et als. [sic]
vs. NLRC, et als., [sic] G.R. No. 83335, October 12, 1989.
E
The Honorable Commission has no jurisdiction to entertain private
respondents two appeals.
Put differently but more plainly, the issues in this case are as follows:
1. Did the NLRC acquire jurisdiction over the appeal notwithstanding the alleged
insufficiency of the appeal bond?
2. Were private respondents deprived of due process of law by the labor arbiter?
3. Were petitioners illegally dismissed?
4. Assuming petitioners were illegally dismissed, was the computation of the
backwages, service incentive leave pay and damages valid and correct?
The Courts Ruling
The petition is meritorious. We hold that the private respondents were not denied
due process of law by the labor arbiter; and that nine of the petitioners were illegally
dismissed, but that Petitioners Lim and Canonigo were not.
First Issue: Insufficiency of Appeal Bond
Petitioners contend that Respondent NLRC did not acquire jurisdiction over the
appeal of private respondents because the appeal bond was insufficient. Although the
total monetary award in their favor was P1,078,200.55, private respondents posted a
cash bond in the amount ofP752,183.00 only. In computing the monetary award for the
purpose of posting an appeal bond, private respondents relied on Rule VI, Section 6, of
the 1990 New Rules of Procedure of the NLRC and excluded the award for damages,
litigation expenses and attorneys fees. Petitioners argue however that the said rule
cannot prevail over Article 223 of the Labor Code, which does not provide for such
exclusion.
We agree with private respondents. Article 223 of the Labor Code provides:
x x x x x x x x x
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing
prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay
the execution for reinstatement provided therein. x x x. (Underscoring
supplied.)
On the other hand, Rule VI, Section 6 of the 1990 NLRC New Rules of
Procedure,
[11]
invoked by private respondent, provides:
Section 6. Bond. In case of the decision of a Labor Arbiter involves a
monetary award, an appeal by the employer shall be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission or the Supreme Court in an amount equivalent
to the monetary award.
The Commission may, in meritorious cases and upon Motion of the Appellant,
reduce the amount of the bond. However, an appeal is deemed perfected
upon the posting of the bond equivalent to the monetary award exclusive of
moral and exemplary damages as well as attorneys fees.
Nothing herein however, shall be construed as extending the period of
appeal. (Underscoring supplied.)
There is no conflict between the two provisions. Article 223 lays down the
requirement that an appeal bond should be filed. The implementing rule, on the other
hand, explains how the appeal bond shall be computed. The rule explicitly excludes
moral and exemplary damages and attorneys fees from the computation of the appeal
bond. This exclusion has been recognized by the Court in a number of cases. Hence,
in Erectors vs. NLRC,
[12]
the Court nullified an NLRC order requiring the posting of an
appeal bond which, among others, even included in the computation the award
of P400,000.00 for moral and exemplary damages. Indeed, the said implementing rule
is a contemporaneous construction of Article 223 by the NLRC pursuant to the mandate
of the Labor Code; hence, it is accorded great respect by this Court.
[13]

In line with the desired objective of our labor laws to resolve controversies on their
merits, the Court has held that the filing of a bond in appeals involving monetary awards
should be given liberal construction.
[14]
The rule requiring the employer to post a cash or
surety bond to perfect his appeal assures the workers that they will receive the money
judgment awarded to them upon the dismissal of the employers appeal. It also
discourages employers from using an appeal to delay or even evade their obligation to
satisfy the just and lawful claims of their employees.
[15]

Hence, deducting from the total monetary award of P1,078,200.55 the amount
of P200,000.00 for moral and exemplary damages,P98,018.25 for attorneys fees
and P30,000.00 for litigation expenses, the amount of the bond should
be P750,182.55. Thus, the appeal bond actually posted in the amount of P752,183 is
even more than the amount of appeal bond that may be required from private
respondents under Respondent NLRCs rules.
Second Issue: No Denial of Due Process
The NLRC ruled that private respondents were denied due process because the
labor arbiter deemed the case submitted for resolution when they failed to attend the
hearings on July 8 and 12, 1991. Under the NLRC Rules of Procedure, a case may be
deemed submitted for decision on the basis of the evidence thus far adduced in the
event respondent incurs two successive absences during his turn to present
evidence. While the hearing on July 12, 1991 was for the presentation of herein private
respondents evidence, the NLRC found that the hearing on July 8, 1991 was scheduled
for the cross-examination of petitioners witness. Since the absences were not made
during respondents turn to present evidence, public respondent remanded the case to
the labor arbiter for further proceedings.
Petitioners dispute the NLRC ruling, contending that the parties in this case were
able to submit their respective position papers together with supporting affidavits and
other documents. They stress that private respondents failure to attend the hearings
on July 8 and 12, 1991, without any justification or a motion for postponement,
warranted the submission of the case for decision pursuant to Section 11, Rule V of the
1990 New Rules of Procedure of the NLRC. They insist that the hearing on July 8,
1991 was scheduled to afford private respondents not only an opportunity to cross-
examine petitioners last witness, Marilyn Lim, [but also] to start the presentation of
[their] evidence xxx.
[16]

On the other hand, private respondents argue that the labor arbiter erred in
considering the absence of their counsel during the hearings scheduled on July 8 and
July 12, 1991 as waiver not only of the right to cross-examine but of the right to present
evidence. They further contend that the labor arbiter released his decision
notwithstanding the pendency of three unresolved motions.
[17]
These circumstances
clearly show that they were not afforded due process of law.
[18]

To make a clear ruling, we again cite Rule V, Section 11 of the 1990 Rules of
Procedure of Respondent NLRC, which provides:
Section 11. Non-appearance of Parties at Conference/Hearings. -- (a) Two
(2) successive absences at a conference/hearing by the complainant or
petitioner, who was duly notified thereof, may be sufficient cause to dismiss
the case without prejudice. Where proper justification, however, is shown by
proper motion to warrant the re-opening of the case, the Labor Arbiter shall
call a second hearing and continue the proceedings until the case is finally
decided. Dismissal of the case of the second time due to the unjustified non-
appearance of the complainant or petitioner who was duly notified thereof
shall be with prejudice.
(b) In case of two (2) successive non-appearances by the respondent,
despite due notice, during the complainants presentation of evidence, the
complainant shall be allowed to present evidence ex parte, subject to cross-
examination by the respondent, where proper, at the next hearing. Upon
completion of such presentation of evidence for the complainant, another
notice of hearing for the reception of the respondents evidence shall be
issued, with a warning that failure of the respondent to appear shall be
construed as submission by him of the case for resolution without presenting
his evidence.
(c) In case of two (2) successive unjustified non-appearances by the
respondent during his turn to present evidence, despite due notice, the case
shall be considered submitted for decision on the basis of the evidence so far
presented. (Underscoring supplied).
It is undisputed that private respondents counsel failed to attend the hearings on
the two aforementioned dates. Moreover, the labor arbiter
[19]
and the NLRC held that the
hearing on July 8, 1991 was only for the cross-examination of herein petitioners
witness, while that on July 12, 1991 was for the reception of private respondents
evidence. This notwithstanding, we hold that the NLRC committed grave abuse of
discretion in remanding the case to the labor arbiter.
Private respondents were able to file their respective position papers and the
documents in support thereof, and all these were duly considered by the labor
arbiter.
[20]
Indeed, the requirements of due process are satisfied where the parties are
given the opportunity to submit position papers.
[21]
In any event, Respondent NLRC and
the labor arbiter are authorized under the Labor Code to decide a case on the basis of
the position papers and documents submitted.
[22]
The holding of an adversarial trial
depends on the discretion of the labor arbiter, and the parties cannot demand it as a
matter of right. In other words, the filing of position papers and supporting documents
fulfilled the requirements of due process.
[23]
Therefore, there was no denial of this right
because private respondents were given the opportunity to present their side.
[24]

Moreover, it should be noted that private respondents did not dispute the order of
the labor arbiter submitting the case for decision immediately after its
issuance. Likewise, they failed to present additional evidence on the date they
themselves specified. It was only on August 6, 1991 that private respondents counsel,
in his Comments to the Offer of Exhibits
[25]
with counter-manifestation, explained his
failure to appear at the hearing on July 8, 1991. His explanation, quoted below, is not
compelling.
[26]

The failure of the undersigned to appear on the date of hearing was for the
reason that his car bogged down, as in fact he called up the Office of the
Hearing Officer. While his absence may be considered a waiver to cross-
examine the witness, it cannot be taken to mean forfeiture of the right to
present admissible evidence against the complainant-witness.
Three days later on August 9, 1991, private respondents moved that they be given
a period of ten days from August 9, 1991 -- or until August 19, 1991 -- within which to
submit additional affidavits, after which, the cases will be deemed submitted for
resolution on the basis of complainants evidence and respondents position paper and
the additional affidavits.
[27]
Counsel, however, failed to submit the supposed evidence on
said date. On October 14, 1991, private respondents filed a Motion Reiterating the
Request for Submission of Additional Affidavits.
[28]
Again, private respondents did not
submit the said documents.
As earlier noted, the essence of due process is simply an opportunity to be heard,
to explain ones side, or to seek a reconsideration of the action or ruling complained
of. In the case at bar, private respondents were given ample opportunity to do just that
but they failed, for unknown reasons, to avail themselves of such opportunity. They
themselves moved that they be allowed to present additional affidavits on August 19,
1991, but they never did; no valid reason was given for their failure to do so. Their
contention that the labor arbiter failed to rule on their motion deserves scant
consideration. It is axiomatic in fact, it is plainly commonsensical that when a
counsel asks for an extension of time within which to file a pleading, he must be ready
with that pleading on the date specified in his motion, even absent a resolution or order
disposing of his motion.
We cannot remand the instant case to the labor arbiter for further
proceedings. Respondent NLRC, on the basis of the evidence on record, could have
resolved the dispute. To remand it to the labor arbiter is to delay needlessly the
disposition of this case, which has been pending since July 23, 1990. It becomes our
duty under the circumstances to determine the validity of the allegations of the
parties. Remanding the case to the labor arbiter will just frustrate speedy justice and, in
any event, would be a futile exercise, as in all probability the case would end up with
this Court. We shall thus rule on the substantial claims of the parties.
Third Issue: Petitioners Were Illegally Dismissed
Private respondents controvert the claim of illegal dismissal by maintaining that
petitioners abandoned their employment. They aver that on July 19, 1990, Petitioner
Gloria Adriano, pawnshop appraiser, over-declared the weights and values of pawned
pieces of jewelry, which allegedly caused a loss of at least P174,850. In a letter dated
July 19, 1990, they required Petitioner Adriano to explain within 72 hours why her
employment should not be terminated. On July 20, 1990, however, Petitioner Adriano
together with Petitioners Asteria Campo, Leiden Fernandez, Brenda Gadiano, Emilia
Negapatan, Eleonor Quianola, Jesus Tomongha, Florida Talledo and Florida
Villaceran allegedly did not report for work without any excuse. Thus, private
respondents concluded that petitioners abandoned their employment. They also state
that they intended to pursue legal action against the said petitioners for illegal
abandonment. But before they could do so, they received summons requiring them to
respond to the complaints of illegal dismissal filed by the said nine petitioners.
[29]

On the other hand, petitioners maintain that on July 19, 1990, Private Respondent
Marguerite Lhuillier, the pawnshop owner, told them not to report for work because their
employment had been terminated. Thus, they did not report for work the following day,
July 20, 1990. On July 23, 1990, they filed their respective complaints before the
Regional Arbitration Board of Respondent NLRC.
In view of the conflicting claims of the parties, we examined the records of this case
and found that private respondents did not abandon their employment; rather, they were
illegally dismissed.
To succeed in pleading abandonment as a valid ground for dismissal, the employer
must prove (1) the intention of an employee to abandon his or her employment and (2)
an overt act from which such intention may be inferred; i.e., the employee showed no
desire to resume his work.
[30]
Mere absence is not sufficient. The employer must prove a
deliberate and unjustified refusal of the employee to resume his employment without
any intention of returning.
[31]
Private respondents failed to discharge this burden. The
claim of abandonment was inconsistent with the immediate filing of petitioners
complaint for illegal dismissal and prayer for reinstatement. For how can an inference
be made that an employee had no intention of returning to work, when he filed a
complaint for illegal dismissal praying for reinstatement three days after the alleged
abandonment?
[32]
Moreover, considering that petitioners had been with Pawnshop
Lhuillier for several years -- ranging from six (6) years to thirty three (33) years -- it is
unlikely that they would simply leave their employment. Clearly, there is no cogent
basis for private respondents theory that said petitioners abandoned their work. In this
light, we sustain the finding of the labor arbiter that said petitioners were illegally
dismissed, with neither just cause nor due process.
Petitioners Lim and Canonigo Resigned
The foregoing holding cannot apply to Petitioners Marilyn Lim and Joseph
Canonigo, however.
Lim claims that Private Respondent Lhuillier forced her to resign, but at the same
time assured her of separation pay.
[33]
On February 5, 1990, prior to Lims letter of
resignation dated February 24, 1990,
[34]
her lawyer proposed the following to Private
Respondent Lhuillier:
[35]

1. That our client Ms. Marilyn Lim be given immediately a clearance upon
resignation from your good company and payment of separation pay at the
rate of one month per year of service; and
2. That our client is willing to execute a promissory note on her indebtedness,
and will pay upon the same terms prevailing before her resignation. Our
clients ability to settle her indebtedness should be given kind consideration by
your company considering that her eventual resignation will render her jobless
for a while. Besides, per Investigation Report No. 2, Series of 1990,
conducted by your Resident Counsel, Atty. Malcolm V. Seno, our client has
impressed your Resident Counsel as a person of much valor and great
determination when she immediately admitted her guilt.
3. That the various checks she endorsed to your company be returned to our
client, so that she could file a case against the issuers or drawers of the same,
be it criminal or civil in nature. (Emphasis supplied).
Petitioner Lims testimony
[36]
that she has never been informed of any wrongdoing
until her termination is belied by her assertions in the aforequoted letter. Her admission
of the offense charged shows that she was not coerced to resign. Besides, the
fact that her complaint for illegal dismissal was filed long after her resignation on
February 24, 1990 suggests that it was a mere afterthought.
On the other hand, Petitioner Canonigo contends that he was forced to sign his
letter of resignation dated July 14, 1990, because Private Respondent Lhuillier received
reports from other employees that he was responsible for some anomalies in the
pawnshop. He also stated that he resigned because he was assured of separation
pay.
[37]
Like Petitioner Lim, he did not immediately file a complaint for illegal dismissal,
doing so only on July 23, 1990. From the foregoing facts, we see no cogent basis for
holding that he was forced to resign. On the contrary, we find that he voluntarily
tendered his resignation on the assurance of separation pay. Clearly, Petitioner
Canonigo, like Lim, was not dismissed; rather, he resigned voluntarily.
Fourth Issue: Service Incentive Leave Pay and Damages
In his decision, the labor arbiter granted varying amounts of service incentive leave
pay to the petitioners based on the length of their tenure;i.e, the shortest was six years
and the longest was thirty-three years. While recommending that the labor arbiters
decision be reinstated substantially, the solicitor general recommended that the award
of service incentive leave be limited to three years. This is based on Article 291 of the
Labor Code which provides:
ART. 291. Money Claims. -- 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.
x x x x x x x x x.
Petitioners counter that Article 291 speaks clearly on the prescription of filing [an]
action upon monetary claims within three (3) years from the time the cause of action
accrued, but it is not a prescription of a period of time for the computation of monetary
claims.
[38]

The clear policy of the Labor Code is to grant service incentive leave pay to workers
in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the
Implementing Rules and Regulations
[39]
provides that [e]very employee who has
rendered at least one year of service shall be entitled to a yearly service incentive leave
of five days with pay. Service incentive leave is a right which accrues to every
employee who has served 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 contracts, is less than 12 months, in which
case said period shall be considered as one year.
[40]
It is also commutable to its money
equivalent if not used or exhausted at the end of the year.
[41]
In other words, an
employee who has served for one year is entitled to it. He may use it as leave days or
he may collect its monetary value. To limit the award to three years, as the solicitor
general recommends, is to unduly restrict such right. The law indeed does not prohibit
its commutation. Moreover, the solicitor generals recommendation is contrary to the
ruling of the Court in Bustamante et al. vs. NLRC et al.
[42]
lifting the three-year restriction
on the amount of backwages and other allowances that may be awarded an illegally
dismissed employee, thus:
Therefore, in accordance with R.A. No. 6715, petitioners are entitled to their
full backwages, inclusive of allowances and other benefits or their monetary
equivalent, from the time their actual compensation was withheld from them
up to the time of their actual reinstatement. (Underscoring supplied.)
Since 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 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. (underscoring supplied).
However, the Implementing Rules clearly state that entitlement to benefit provided
under this Rule shall start December 16, 1975, the date the amendatory provision of the
[Labor] Code took effect.
[43]
Hence, petitioners, except Lim and Canonigo, should be
entitled to service incentive leave pay from December 16, 1975 up to their actual
reinstatement.
Petitioners, citing Roche Philippines et al. vs. NLRC et al.,
[44]
further contend that the
award of damages in the case at bar should be increased, for there are eleven (11)
complainants/petitioners whose long years of employment was illegally, oppressively
and wantonly terminated by the private respondent.
[45]

We disagree. Determination of the amount of moral damages and attorneys fees is
best left to the discretion of the labor arbiter.
[46]
Moral damages are recoverable where
the dismissal of the employee was attended by bad faith or fraud, or it constituted an act
oppressive to labor, or it was done in a manner contrary to morals, good customs or
public policy.
[47]
In the case before us, records show that petitioners dismissals were
done oppressively and in bad faith, for they were just summarily dismissed without even
the benefit of notice and hearing. The well-settled rule is that the employer shall be
sanctioned for noncompliance with the requirements of, or for failure to observe, due
process in dismissing its employees.
[48]
Petitioners were likewise subjected to
unnecessary embarrassment or humiliation because of the filing of the criminal charge
of qualified theft, which was later dismissed
[49]
by the investigating prosecutor.
[50]
It follows
then that the award of attorneys fees is likewise proper, for the defendants act or
omission has compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest.
[51]

Full Backwages for Dismissals Effected After March 21, 1989
Having determined that petitioners, except Lim and Canonigo, were illegally
dismissed, we next resolve the question of whether Respondent NLRC gravely abused
its discretion in ordering the reinstatement of dismissed employees and the payment to
them of full backwages; or, if reinstatement was no longer feasible, whether the grant to
them of separation pay plus backwages was correct. In several cases,
[52]
this Court has
held that illegally dismissed employees are entitled to reinstatement and full
backwages. If reinstatement is not possible, the employees are entitled to separation
pay and full backwages. Accordingly, the award to petitioners of backwages for three
years should be modified in accordance with Article 279
[53]
of the Labor Code, as
amended by R.A. 6715, by giving them full backwages without conditions and
limitations, the dismissals having occurred after the effectivity of the amendatory law on
March 21, 1989.
[54]
Thus, the Court held in Bustamante:
[55]

The clear legislative intent of the amendment in Rep. Act No. 6715 is to give
more benefits to workers than was previously given them under the Mercury
Drug rule or the deduction of earnings elsewhere rule. Thus, a closer
adherence to the legislative policy behind Rep. Act No. 6715 points to full
backwages as meaning exactly that, i.e., without deducting from backwages
the earnings derived elsewhere by the concerned employee during the period
of his illegal dismissal.
WHEREFORE, the petition is hereby GRANTED and the assailed Decision and
Resolution are REVERSED and SET ASIDE. The labor arbiters decision
is REINSTATED with MODIFICATIONS, such that the award of separation pay is
deleted and the service incentive leave pay is computed from December 16, 1975 up to
petitioners actual reinstatement. Full backwages, including the accrued thirteenth
month pay, are also awarded to the nine petitioners -- Leiden Fernandez, Brenda
Gadiano, Gloria Adriano, Emelia Negapatan, Jesus Tomongha, Eleonor Quianola,
Asteria Campo, Florida Villaceran and Florida Talledo -- from the date of their illegal
dismissal to the time of their actual reinstatement. Petitioners Lim and Canonigo, whom
we find to have voluntarily resigned, are not entitled to any benefit.
SO ORDERED.
Narvasa, C.J., (Chairman), Romero, Melo, and Francisco, JJ., concur.
[G.R. No. 122468. September 3, 1998]
SENTINEL SECURITY AGENCY, INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, ADRIANO CABANO, JR., VERONICO
C. ZAMBO, HELCIAS ARROYO, RUSTICO ANDOY, and MAXIMO
ORTIZ,respondents.
[G.R. No. 122716. September 3, 1998]
PHILIPIPPINE AMERICAN LIFE INSURANCE COMPANY, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION, VERONICO
ZAMBO, HELCIAS ARROYO, ADRIANO CABANO, MAXIMO
ORTIZ, and RUSTICO ANDOY, respondents.
D E C I S I O N
PANGANIBAN, J .:
The transfer of an employee involves a lateral movement within the business or operation of
the employer, without demotion in rank, diminution of benefits or, worse, suspension of
employment even if temporary. The recall and transfer of security guards require reassignment
to another post and are not equivalent to their placement on floating status. Off-detailing
security guards for a reasonable period of six months is justified only in bona fide cases of
suspension of operation, business or undertaking.
The Case

This is the rationale used by the Court in dismissing the two consolidated petitions
for certiorari before us, seeking the reversal of the Decision dated August 25, 1995, and the
Resolution date October 24, 1995, both promulgated by the National Labor Relations
Commission
[1]
in NLRC Case No. V-0317-94 (RAB VII-01-0097-94, RAB VII-020173-94, and RAB VII-01-
0133-94).
In the action for illegal dismissal and payment of salary differential, service incentive leave
pay and separation pay filed by private respondents, Labor Arbiter Dominador A. Almirante
rendered a Decision, which disposed:
[2]

WHEREFORE, premises considered[,] judgment is hereby rendered ordering xxx
Sentinel Security Agency, Inc. jointly and severally with xxx Philamlife, Cebu
Branch, to pay complainants the total amount of [s]ixty [t]housand [o]ne [h]undred
[t]welve [p]esos and 50/100 (P60,112.50) in the concept of 13
th
month pay and service
incentive leave benefits as computed by our Labor Arbitration Associate whose
computation is hereto attached and forming part thereof.
[3]

On appeal, the NLRC modified the labor arbiters Decision. The dispositive portion of the
NLRC Decision
[4]
reads:
WHEREFORE, the assailed Decision is hereby MODIFIED in so far as the award of
13
th
month pay for the previous years which is hereby excluded. Further, xxx Sentinel
Security Agency, Inc. is hereby ORDERED to pay complainants separation pay at the
rate of month pay for every year of service and for both xxx Philippine American
Life Insurance, Inc. and Sentinel Security Agency, Inc. and/or Daniel Iway to pay to
the [complainants] jointly and severally their backwages from January 16, 1994 to
January 15, 1995 and the corresponding 13
th
month pay for the said year. The
monetary awards hereby granted are broken down as follows [into separation pay,
back wages, 13
th
month pay and service incentive leave pay]:
x x x x x x x x x.
[5]

The challenged Resolution denied reconsideration for lack of merit.
[6]

The Facts

The undisputed factual backdrop is narrated by Respondent Commission as follows:
[7]

The complainants were employees of Sentinel [Security Agency, Inc. hereafter
referred to as the Agency] since March 1, 1966 in the case of Veronico Zambo;
October 27, 1975 in the case of Helcias Arroyo; September 20, 1985 in the case of
Adriano Cabano; February 1, 1990 in the case of Maximo Ortiz; and Ortiz and
November 1, 1967 in the case of Rustico Andoy. They were assigned to render guard
duty at the premises of [Philippine American Life Insurance Company] at Jones
Avenue, Cebu City. On December 16, 1993 Philippine American Life Insurance
Company [the Client, for brevity], through Carlos De Pano, Jr., sent notice to all
concerned that the [Agency] was again awarded the contract of [s]ecurity [s]ervices
together with a request to replace all the security guards in the companys offices at
the cities of Cebu, Bacolod, Cagayan de Oro, Dipolog and Ilagan. In compliance
therewith, [the Agency] issued on January 12, 1994, a Relief and Transfer Order
replacing the complainants as guards [of the Client] and for then to be re-assigned [to]
other clients effective January 16, 1994. As ordered, the complainants reported but
were never given new assignments but instead they were told in the vernacular, gui-
ilisa mo kay mga tigulang naman mo which when translated means, you were
replace[d] because you are already old. Precisely, the complainants lost no time but
filed the subject illegal dismissal cases on January 18, January 26 and February 4,
1994 and prayed for payment of separation pay and other labor standard benefits.
[The Client and the Agency] maintained there was no dismissal on the part of the
complainants, constructive or otherwise, as they were protected by the contract of
security services which allows the recall of security guards from their assigned posts
at the will of either party. It also advanced that the complainants prematurely filed the
subject cases without giving the [Agency] a chance to give them some assignments.
On the part of [the Client], it averred further that there [was] no employer-employee
relationship between it and the complainants as the latter were merely assigned to its
Cebu Branch under a job contract; that [the Agency] ha[d] its own separate corporate
personality apart from that of [the Client]. Besides, it pointed out that the functions of
the complainants in providing security services to [the Clients] property [were] not
necessary and desirable to the usual business or trade of [the Client], as it could still
operate and engage in its life insurance business without the security guards. In fine,
[the Client] maintains that the complainants have no cause of action against it.
Ruling of Respondent Commission

Respondent Commission ruled that the complainants were constructively dismissed, as the
recall of the complainants from their long time post[s] at [the premises of the Client] without any
good reason is a scheme to justify or camouflage illegal dismissal.
It ruled Superstar Security Agency, Inc. vs. National Labor Relations Commission
[8]
and A
Prime Security Services, Inc. vs. national Labor Relations Commission
[9]
were not applicable to the case at bar. In
the former, the security guard was placed on temporary off-detail due to his poor performance and lack of
elementary courtesy and tact, and to the cost-cutting program of the agency. In the latter, the relief of the security
guard was due to his sleeping while on duty and his repeated refusal to resume work despite notice.
In the present case, the complainants case, the complainants were told by the Agency that
they lost their assignment at the Clients premises because they were already old, and not
because they had committed any infraction or irregularity. The NLRC applied RA 7641,
[10]
which
gives retirement benefits of one-half month pay per year of service to retirable employees, viz.:
xxx As stated earlier xxx, the complainants were in the service of [the Client] for
nearly twenty (20) years in the cases of Helcias Arroyo and for more than twenty (20)
years in the cases of Veronico Zambo and Rustico Andoy, which long years of service
[appear] on record to be unblemished. The complainants were then confronted with
an impending sudden loss of earning for while the order of [the Agency] to
immediately report for reassignment momentarily gave them hope, there was in fact
no immediate reinstatement. While it could have been prudent for the complainants to
wait, they were set unstable and were actually threatened by the statement of the
personnel in charge of [the Agency] that they were already old, that was why they
were replaced.
Against these glaring facts is the new Retirement Law, R.A. 7641 which took effect
on January 7, 1993 giving retirement benefits of month pay per year of service to an
employee upon reaching retirement age to be paid by the employer, in this case at
quiet a sizeable amount and in not so long due time as some of the complainants were
described as already old.
As complainants were illegally dismissed, the NLRC ruled that they were entitled to the
twin remedies of back wages for one (1) year from the time of their dismissal on January 15,
1994, payable by both the Client and the Agency, and separation pay one-half month pay for
every year of service payable only by the Agency. Reinstatement was not granted due to the
resulting antipathy and resentment among the complainants, the Agency and the Client.
Hence, this petition.
[11]

The Issues

In their memoranda, the Agency poses this question:
[12]

xxx [W]hether xxx Sentinel is guilty of illegal dismissal[,]
On the other hand, the Client raises the following issues:
[13]

Whether xxx [the complainants] were illegally dismissed by their employer, Sentinel
Security Agency, Inc., and in holding petitioner to be equally liable therefor.
Whether xxx petitioner is jointly and severally liable with Sentinel Security Agency,
Inc., in the latters payment of backwages, 13
th
month pay and service incentive leave
pay to its employees xxx.
In sum, the resolution of these consolidated petitions hinges on (1) whether the complainants
were illegally dismissed, and (2) whether the Client is jointly and severally liable for their
thirteenth-month and service incentive leave pays.
The Courts Ruling

The petition is partly meritorious.
First Issue: I llegal Dismissal

The private respondents transfer, according to Respondent Commission, was affected to
circumvent the mandate of Republic Act 7641 (New Retirement Law), which by then had
already taken effect, in view of the fact that the complainants had worked for both the Client and
the Agency for 10 to 20 years and were nearing retirement age. With this premise, the NLRC
concluded that the guards were illegally dismissed. The complainants add that the findings of
the Commission match the remarks of the personnel manager of the Agency, Feliciano
Marticion; that is, that they were being replaced because they were already old. They insist that
their service records are unblemished; hence, they could not have been dismissed by reason of
any just cause.
We agree that the security guards were illegally dismissed, but not for the reasons given by
the public respondent. The aforecited contentions of the NLRC are speculative and unsupported
by the evidence on record. As the solicitor general said in his Manifestation in Lieu of
Comment, the relief and transfer order was akin to placing private respondents on temporary
off-detail.
Being sidelined temporarily is a standard stipulation in employment contracts, as the
availability of assignment for security guards is primarily dependent on the contracts entered into
by the agency with third parties. Most contracts for security services, as in this case, stipulate
that the client may request the replacement of the guards assigned to it. In security agency
parlance, being placed off detail or on floating status means waiting to be posted.
[14]
This
circumstance is not equivalent to dismissal, so long as such status does not continue beyond
reasonable time.
[15]

In the case at bar, the relief and transfer order per se did not sever the employment
relationship between the complainants and the Agency. Thus, despite the fact that complainants
were no longer assigned to the Client, Article 287 of the Labor Code, as amended by RA 7641,
still binds the Agency to provide them upon their reaching the retirement age of sixty to sixty-
five years retirement pay or whatever else was established in the collective bargaining
agreement or in any other applicable employment contract. On the other hand, the Client is not
liable to the complainants for their retirement pay because of the absence of an employer-
employee relationship between them.
However, the Agency claims that the complainants, after being placed off-detail, abandoned
their employ. The solicitor general, siding with the Agency and the labor arbiter, contends that
while abandonment of employment is inconsistent with the filing of a complaint for illegal
dismissal, such rule is not applicable where [the complainant] expressly rejects this relief and
asks for separation pay instead.
The Court disagrees. Abandonment, as a just and valid cause for termination, requires a
deliberate and unjustified refusal of an employee to resume his work, coupled with a clear
absence of any intention of returning to his or her work.
[16]
That complainants did not pray for
reinstatement is not sufficient proof of abandonment. A strong indication of the intention of
complainants to resume work is their allegation that on several dates they reported to the Agency
for reassignment, but were not given any. In fact, the contention of complainant is that the
Agency constructively dismissed them. Abandonment has recently been ruled to be
incompatible with constructive dismissal. We, thus, rule that complainants did not abandon their
jobs.
[17]
We will now demonstrate why we believe complainants were illegally dismissed.
In several cases, the Court has recognized the prerogative of management to transfer an
employee from one office to another within the same business establishment, as the exigency of
the business may require, provided that the said transfer does not result in a demotion in rank or
a diminution in salary, benefits and other privileges of the employee;
[18]
or is not unreasonable,
inconvenient or prejudicial to the latter;
[19]
or is not used as a subterfuge by the employer to rid himself of an
undesirable worker.
[20]

A transfer means a movement (1) from one position to another of equivalent rank, level or
salary, without a break in the service;
[21]
and (2) from one office to another within the same business
establishment.
[22]
It is distinguished from a promotion in the sense that it involves a lateral change as opposed to a
scalar ascent.
[23]

In this case, transfer of the complainants implied more than a relief from duty to give them
time to rest a mere changing of the guards. Rather, their transfer connoted a reshuffling or
exchange of their posts, or their reassignment to other posts, such that no security guard would
be without an assignment.
However, this legally recognized concept of transfer was not implemented. The agency
hired new security guards to replace the complainants, resulting in a lack of posts to which the
complainants could have been reassigned. Thus, it refused to reassign Complainant Andoy when
he reported for duty on February 2, 4 and 7, 1994; and merely told the other complainants on
various dates from January 25 to 27, 1994 that they were already too old to be posted anywhere.
The Agency now explains that since, under the law, the Agency is given a period of not
more than six months to retain the complainants on floating status, the complaint for illegal
dismissal is premature. This contention is incorrect.
A floating status requires the dire exigency of the employers bona fide suspension of
operation, business or undertaking. In security services, this happens when the clients that do not
renew their contracts with a security agency are more than those that do and the new ones that
the agency gets. However, in the case at bar, the Agency was awarded a new contract by the
Client. There was no surplus of security guards over available assignments. If there were, it was
because the Agency hired new security guards. Thus, there was no suspension of operation,
business or undertaking, bona fide or not, that would have justified placing the complainants off-
detail and making them wait for a period of six months. If indeed they were merely transferred,
there would have been no need to make them wait for six months.
The only logical conclusion from the foregoing discussion is that the Agency illegally
dismissed the complainants. Hence, as a necessary consequence, the complainants are entitled to
reinstatement and back wages.
[24]
However, reinstatement is no longer feasible in this case. The Agency
cannot reassign them to the Client, as the former has recruited new security guards; the complainants, on the other
hand, refuse to accept other assignments. Verily, complainants do not pray for reinstatement; in fact, they refused to
be reinstated. Such refusal is indicative of strained relations.
[25]
Thus, separation pay is awarded in lieu of
reinstatement.
[26]

Second Issue:

Clients Liability

The Client did not, as it could not, illegally dismiss the complainants. Thus, it should not be
held liable for separation pay and back wages. But even if the Client is not responsible for the
illegal dismissal of the complainants, it is jointly and severally liable with the Agency for the
complainants service incentive leave pay. In Rosewood Processing, Inc. vs. National Labor
Relations Commission,
[27]
the Court explained that, notwithstanding the service contract between
the client and the security agency, the two are solidarily liable for the proper wages prescribed by
the Labor Code, pursuant to Article 106, 107 and 109 thereof, which we quote hereunder:
ART. 106. Contractor or subcontractor.Whenever an employer enters into a
contract with another person for the performance of the former[s] work, the
employees of the contractor and of the latter[s] subcontractor, if any, shall be paid in
accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the
contracting out of labor to protect the rights of workers established under this
Code. In so prohibiting or restricting, he may make appropriate distinctions between
labor-only contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved shall be
considered the employer for purposes of this Code, to prevent any violation or
circumvention of any provision of this Code.
xxx In such cases [labor-only contracting], the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed by him.
ART. 107. Indirect employer.The provisions of the immediately preceding
Article shall likewise apply to any person, partnership, association or corporation
which, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
ART. 109. Solidary liability.The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of any provision of this Code. For
purpose of determining the extent of their civil liability under this Chapter, they shall
be considered as direct employers.
Under these provisions, the indirect employer, who is the Client in the case at bar, is jointly
and severally liable with the contractor for the workers wages, in the same manner and extent
that it is liable to its direct employees. This liability of the Client covers the payment of the
service incentive leave pay of the complainants during the time they were posted at the Cebu
branch of the Client. As service had been rendered, the liability accrued, even if the
complainants were eventually transferred or reassigned.
The service incentive leave is expressly granted by these pertinent provisions of the Labor
Code:
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.
(b) This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those
employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor after
considering the viability or financial condition of such establishment.
(c) The grant of benefit in excess of that provided herein shall not be made a subject
of arbitration or any court [or] admnistrative action.
Under the Implementing Rules and Regulations of the Labor Code, an unused service
incentive leave is commutable to its money equivalent, viz.:
Sec. 5. Treatment of Banefit. - The service incentive leave shall be commutable to its
money equivalent if not used or exhausted at the end of the year.
The award of the thirteenth-month pay is deleted in view of the evidence presented by the
Agency that such claim has already been paid to the complainants. Obviously then, the award of
such benefit in the dispositive portion of the assailed Decision is merely an oversight,
considering that Respondent Commission itself deleted it from the main body of the said
Decision.
WHEREFORE, the petition is DI SMI SSED and the assailed Decision and Resolution are
hereby AFFI RMED, but the award of the thirteenth-month pay isDELETED. Costs against
petitioners.
SO ORDERED.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.