FIRST DIVISION

G.R. No. 162053

March 7, 2007

ST. LUKE'S MEDICAL CENTER EMPLOYEE'S

ASSOCIATION-AFW (SLMCEA-AFW) AND MARIBEL S.
SANTOS, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
AND ST. LUKE'S MEDICAL CENTER, INC.,Respondents.
DECISION
AZCUNA, J.:
Challenged in this petition for review on certiorari is the
Decision1 of the Court of Appeals (CA) dated January 29, 2004
in CA-G.R. SP No. 75732 affirming the decision 2 dated August
23, 2002 rendered by the National Labor Relations
Commission (NLRC) in NLRC CA No. 026225-00.
The antecedent facts are as follows:
Petitioner Maribel S. Santos was hired as X-Ray Technician in
the Radiology department of private respondent St. Luke's
Medical Center, Inc. (SLMC) on October 13, 1984. She is a
graduate of Associate in Radiologic Technology from The
Family Clinic Incorporated School of Radiologic Technology.
On April 22, 1992, Congress passed and enacted Republic Act
No. 7431 known as the "Radiologic Technology Act of 1992."
Said law requires that no person shall practice or offer to
practice as a radiology and/or x-ray technologist in the
Philippines without having obtained the proper certificate of
registration from the Board of Radiologic Technology.

On September 12, 1995, the Assistant Executive DirectorAncillary Services and HR Director of private respondent
SLMC issued a final notice to all practitioners of Radiologic
Technology to comply with the requirement of Republic Act
No. 7431 by December 31, 1995; otherwise, the unlicensed
employee will be transferred to an area which does not
require a license to practice if a slot is available.
On March 4, 1997, the Director of the Institute of Radiology
issued a final notice to petitioner Maribel S. Santos requiring
the latter to comply with Republic Act. No. 7431 by taking
and passing the forthcoming examination scheduled in June
1997; otherwise, private respondent SLMC may be compelled
to retire her from employment should there be no other
position available where she may be absorbed.
On May 14, 1997, the Director of the Institute of Radiology,
AED-Division of Ancillary Services issued a memorandum to
petitioner Maribel S. Santos directing the latter to submit her
PRC Registration form/Examination Permit per Memorandum
dated March 4, 1997.
On March 13, 1998, the Director of the Institute of Radiology
issued another memorandum to petitioner Maribel S. Santos
advising her that only a license can assure her of her
continued employment at the Institute of Radiology of the
private respondent SLMC and that the latter is giving her the
last chance to take and pass the forthcoming board
examination scheduled in June 1998; otherwise, private
respondent SLMC shall be constrained to take action which
may include her separation from employment.
On November 23, 1998, the Director of the Institute of
Radiology issued a notice to petitioner Maribel S. Santos
informing the latter that the management of private

respondent SLMC has approved her retirement in lieu of

separation pay.
On November 26, 1998, the Personnel Manager of private
respondent SLMC issued a "Notice of Separation from the
Company" to petitioner Maribel S. Santos effective December
30, 1998 in view of the latter's refusal to accept private
respondent SLMC's offer for early retirement. The notice also
states that while said private respondent exerted its efforts
to transfer petitioner Maribel S. Santos to other position/s,
her qualifications do not fit with any of the present vacant
positions in the hospital.

In the meantime, petitioner Alliance of Filipino Workers

(AFW), through its President and Legal Counsel, in a letter
dated September 22, 1999 addressed to Ms. Rita Marasigan,
Human Resources Director of private respondent SLMC,
requested the latter to accommodate petitioner Maribel S.
Santos and assign her to the vacant position of CSS Aide in
the hospital arising from the death of an employee more than
two (2) months earlier.
In a letter dated September 24, 1999, Ms. Rita Marasigan
replied thus:
Gentlemen:

In a letter dated December 18, 1998, a certain Jack C.

Lappay, President of the Philippine Association of Radiologic
Technologists, Inc., wrote Ms. Judith Betita, Personnel
Manager of private respondent SLMC, requesting the latter to
give "due consideration" to the organization's three (3)
regular members of his organization (petitioner Maribel S.
Santos included) "for not passing yet the Board of
Examination for X-ray Technology," "by giving them an
assignment in any department of your hospital awaiting their
chance to pass the future Board Exam."
On January 6, 1999, the Personnel Manager of private
respondent SLMC again issued a "Notice of Separation from
the Company" to petitioner Maribel S. Santos effective
February 5, 1999 after the latter failed to present/ submit her
appeal for rechecking to the Professional Regulation
Commission (PRC) of the recent board examination which she
took and failed.
On March 2, 1999, petitioner Maribel S. Santos filed a
complaint against private respondent SLMC for illegal
dismissal and non-payment of salaries, allowances and other
monetary benefits. She likewise prayed for the award of
moral and exemplary damages plus attorney's fees.

Thank you for your letter of September 22, 1999 formally

requesting to fill up the vacant regular position of a CSS Aide
in Ms. Maribel Santos' behalf.
The position is indeed vacant. Please refer to our Recruitment
Policy for particulars especially on minimum requirements of
the job and the need to meet said requirements, as well as
other pre-employment requirements, in order to be
considered for the vacant position. As a matter of fact, Ms.
Santos is welcome to apply for any vacant position on the
condition that she possesses the necessary qualifications.
As to the consensus referred to in your letter, may I correct
you that the agreement is, regardless of the vacant position
Ms. Santos decides to apply, she must go through the usual
application procedures. The formal letter, I am afraid, will not
suffice for purposes of recruitment processing. As you know,
the managers requesting to fill any vacancy has a say on the
matter and correctly so. The manager's inputs are
necessarily factored into the standard recruitment
procedures. Hence, the need to undergo the prescribed
steps.

Indeed we have gone through the mechanics to

accommodate Ms. Santos' transfer while she was employed
with SLMC given the prescribed period. She was given 30
days from issuance of the notice of termination to look for
appropriate openings which incidentally she wittingly
declined to utilize. She did this knowing fully well that the
consequences would be that her application beyond the 30day period or after the effective date of her termination from
SLMC would be considered a re-application with loss of
seniority and shall be subjected to the pertinent application
procedures.
Needless to mention, one of the 3 X-ray Technologists in
similar circumstances as Ms. Santos at the time successfully
managed to get herself transferred to E.R. because she opted
to apply for the appropriate vacant position and qualified for
it within the prescribed 30-day period. The other X-ray
Technologist, on the other hand, as you may recall, was
eventually terminated not just for his failure to comply with
the licensure requirement of the law but for cause (refusal to
serve a customer).
Why Ms. Santos opted to file a complaint before the Labor
Courts and not to avail of the opportunity given her, or
assuming she was not qualified for any vacant position even
if she tried to look for one within the prescribed period, I
simply cannot understand why she also refused the
separation pay offered by Management in an amount beyond
the minimum required by law only to re-apply at SLMC, which
option would be available to her anyway even (if she) chose
to accept the separation pay!
Well, here's hoping that our Union can timely influence our
employees to choose their options well as it has in the past.

Subsequently, in a letter dated December 27, 1999, Ms.

Judith Betita, Personnel Manager of private respondent SLMC
wrote Mr. Angelito Calderon, President of petitioner union as
follows:
Dear Mr. Calderon:
This is with regard to the case of Ms. Maribel Santos. Please
recall that last Oct. 8, 1999, Ms. Rita Marasigan, HR Director,
discussed with you and Mr. Greg Del Prado the terms
regarding the re-hiring of Ms. Maribel Santos. Ms. Marasigan
offered Ms. Santos the position of Secretary at the Dietary
Department. In that meeting, Ms. Santos replied that she
would think about the offer. To date, we still have no definite
reply from her. Again, during the conference held on Dec. 14,
1999, Atty. Martir promised to talk to Ms. Santos, and inform
us of her reply by Dec. 21, 1999. Again we failed to hear her
reply through him.
Please be informed that said position is in need of immediate
staffing. The Dietary Department has already been
experiencing serious backlog of work due to the said
vacancy. Please note that more than 2 months has passed
since Ms. Marasigan offered this compromise. Management
cannot afford to wait for her decision while the operation of
the said department suffers from vacancy.
Therefore, Management is giving Ms. Santos until the end of
this month to give her decision. If we fail to hear from her or
from you as her representatives by that time, we will
consider it as a waiver and we will be forced to offer the
position to other applicants so as not to jeopardize the
Dietary Department's operation.
For your immediate action.

(Signed)
RITA MARASIGAN

(Signed)
JUDITH BETITA
Personnel Manager
On September 5, 2000, the Labor Arbiter came out with a
Decision ordering private respondent SLMC to pay petitioner
Maribel S. Santos the amount of One Hundred Fifteen
Thousand Five Hundred Pesos (P115,500.00) representing her
separation pay. All other claims of petitioner were dismissed
for lack of merit.
Dissatisfied, petitioner Maribel S. Santos perfected an appeal
with the public respondent NLRC.
On August 23, 2002, public respondent NLRC promulgated its
Decision affirming the Decision of the Labor Arbiter. It
likewise denied the Motion for Reconsideration filed by
petitioners in its Resolution promulgated on December 27,
2002.
Petitioner thereafter filed a petition for certiorari with the CA
which, as previously mentioned, affirmed the decision of the
NLRC.
Hence, this petition raising the following issues:
I. Whether the CA overlooked certain material facts
and circumstances on petitioners' legal claim in
relation to the complaint for illegal dismissal.
II. Whether the CA committed grave abuse of
discretion and erred in not resolving with clarity the
issues on the merit of petitioner's constitutional right
of security of tenure.3
For its part, private respondent St. Luke's Medical Center, Inc.
(SLMC) argues in its comment4 that: 1) the petition should be

dismissed for failure of petitioners to file a motion for

reconsideration; 2) the CA did not commit grave abuse of
discretion in upholding the NLRC and the Labor Arbiter's
ruling that petitioner was legally dismissed; 3) petitioner was
legally and validly terminated in accordance with Republic
Act Nos. 4226 and 7431; 4) private respondent's decision to
terminate petitioner Santos was made in good faith and was
not the result of unfair discrimination; and 5) petitioner
Santos' non-transfer to another position in the SLMC was a
valid exercise of management prerogative.
The petition lacks merit.
Generally, the Court has always accorded respect and finality
to the findings of fact of the CA particularly if they coincide
with those of the Labor Arbiter and the NLRC and are
supported by substantial evidence.5 True this rule admits of
certain exceptions as, for example, when the judgment is
based on a misapprehension of facts, or the findings of fact
are not supported by the evidence on record 6 or are so
glaringly erroneous as to constitute grave abuse of
discretion.7 None of these exceptions, however, has been
convincingly shown by petitioners to apply in the present
case. Hence, the Court sees no reason to disturb such
findings of fact of the CA.
Ultimately, the issue raised by the parties boils down to
whether petitioner Santos was illegally dismissed by private
respondent SLMC on the basis of her inability to secure a
certificate of registration from the Board of Radiologic
Technology.
The requirement for a certificate of registration is set forth
under R.A. No. 74318 thus:
Sec. 15. Requirement for the Practice of Radiologic
Technology and X-ray Technology. - Unless exempt from the

examinations under Sections 16 and 17 hereof, no person

shall practice or offer to practice as a radiologic and/or x-ray
technologist in the Philippines without having obtained the
proper certificate of registration from the Board.
It is significant to note that petitioners expressly concede
that the sole cause for petitioner Santos' separation from
work is her failure to pass the board licensure exam for X-ray
technicians, a precondition for obtaining the certificate of
registration from the Board. It is argued, though, that
petitioner Santos' failure to comply with the certification
requirement did not constitute just cause for termination as it
violated her constitutional right to security of tenure. This
contention is untenable.
While the right of workers to security of tenure is guaranteed
by the Constitution, its exercise may be reasonably regulated
pursuant to the police power of the State to safeguard
health, morals, peace, education, order, safety, and the
general welfare of the people. Consequently, persons who
desire to engage in the learned professions requiring
scientific or technical knowledge may be required to take an
examination as a prerequisite to engaging in their chosen
careers.9 The most concrete example of this would be in the
field of medicine, the practice of which in all its branches has
been closely regulated by the State. It has long been
recognized that the regulation of this field is a reasonable
method of protecting the health and safety of the public to
protect the public from the potentially deadly effects of
incompetence and ignorance among those who would
practice medicine.10 The same rationale applies in the
regulation of the practice of radiologic and x-ray technology.
The clear and unmistakable intention of the legislature in
prescribing guidelines for persons seeking to practice in this
field is embodied in Section 2 of the law:

Sec. 2. Statement of Policy. - It is the policy of the State to

upgrade the practice of radiologic technology in the
Philippines for the purpose of protecting the public from the
hazards posed by radiation as well as to ensure safe and
proper diagnosis, treatment and research through the
application of machines and/or equipment using radiation. 11
In this regard, the Court quotes with approval the disquisition
of public respondent NLRC in its decision dated August 23,
2002:
The enactment of R.A. (Nos.) 7431 and 4226 are recognized
as an exercise of the State's inherent police power. It should
be noted that the police power embraces the power to
prescribe regulations to promote the health, morals,
educations, good order, safety or general welfare of the
people. The state is justified in prescribing the specific
requirements for x-ray technicians and/or any other
professions connected with the health and safety of its
citizens. Respondent-appellee being engaged in the hospital
and health care business, is a proper subject of the cited law;
thus, having in mind the legal requirements of these laws,
the latter cannot close its eyes and [let] complainantappellant's private interest override public interest.
Indeed, complainant-appellant cannot insist on her "sterling
work performance without any derogatory record" to make
her qualify as an x-ray technician in the absence of a proper
certificate of Registration from the Board of Radiologic
Technology which can only be obtained by passing the
required examination. The law is clear that the Certificate of
Registration cannot be substituted by any other requirement
to allow a person to practice as a Radiologic Technologist
and/or X-ray Technologist (Technician).12
No malice or ill-will can be imputed upon private respondent
as the separation of petitioner Santos was undertaken by it

conformably to an existing statute. It is undeniable that her

continued employment without the required Board
certification exposed the hospital to possible sanctions and
even to a revocation of its license to operate. Certainly,
private respondent could not be expected to retain petitioner
Santos despite the inimical threat posed by the latter to its
business. This notwithstanding, the records bear out the fact
that petitioner Santos was given ample opportunity to qualify
for the position and was sufficiently warned that her failure to
do so would result in her separation from work in the event
there were no other vacant positions to which she could be
transferred. Despite these warnings, petitioner Santos was
still unable to comply and pass the required exam. To
reiterate, the requirement for Board certification was set by
statute. Justice, fairness and due process demand that an
employer should not be penalized for situations where it had
no participation or control.13
It would be unreasonable to compel private respondent to
wait until its license is cancelled and it is materially injured
before removing the cause of the impending evil. Neither can
the courts step in to force private respondent to reassign or
transfer petitioner Santos under these circumstances.
Petitioner Santos is not in the position to demand that she be
given a different work assignment when what necessitated
her transfer in the first place was her own fault or failing. The
prerogative to determine the place or station where an
employee is best qualified to serve the interests of the
company on the basis of the his or her qualifications, training
and performance belongs solely to the employer. 14 The Labor
Code and its implementing Rules do not vest in the Labor
Arbiters nor in the different Divisions of the NLRC (nor in the
courts) managerial authority.15
While our laws endeavor to give life to the constitutional
policy on social justice and the protection of labor, it does not

mean that every labor dispute will be decided in favor of the

workers. The law also recognizes that management has
rights which are also entitled to respect and enforcement in
the interest of fair play.16 Labor laws, to be sure, do not
authorize interference with the employer's judgment in the
conduct of the latter's business. Private respondent is free to
determine, using its own discretion and business judgment,
all elements of employment, "from hiring to firing" except in
cases of unlawful discrimination or those which may be
provided by law. None of these exceptions is present in the
instant case.
The fact that another employee, who likewise failed to pass
the required exam, was allowed by private respondent to
apply for and transfer to another position with the hospital
does not constitute unlawful discrimination. This was a valid
exercise of management prerogative, petitioners not having
alleged nor proven that the reassigned employee did not
qualify for the position where she was transferred. In the
past, the Court has ruled that an objection founded on the
ground that one has better credentials over the appointee is
frowned upon so long as the latter possesses the minimum
qualifications for the position.17 Furthermore, the records
show that Ms. Santos did not even seriously apply for another
position in the company.
WHEREFORE, the petition is DENIED for lack of merit. Costs
against petitioners.
SO ORDERED.

THIRD DIVISION
[G.R. No. 146650. January 13, 2003]
DOLE

PHILIPPINES, INC., petitioner, vs. PAWIS NG

MAKABAYANG
OBRERO
(PAMAONFL), respondent.
DECISION

CORONA, J.:
Before us is a petition for review filed under Rule 45 of
the 1997 Rules of Civil Procedure, assailing the January 9,
2001 resolution of the Court of Appeals which denied

petitioners motion for reconsideration of its September 22,

2000 decision[1] which in turn upheld the Order issued by the
voluntary arbitrator[2] dated 12 October 1998, the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the complainant. Respondent is hereby
directed to extend the free meal benefit as provided for in
Article XVIII, Section 3 of the collective bargaining agreement
to those employees who have actually performed overtime
works even for exactly three (3) hours only.
SO ORDERED.

[3]

The core of the present controversy is the interpretation

of the provision for free meals under Section 3 of Article XVIII
of the 1996-2001 Collective Bargaining Agreement (CBA)
between petitioner Dole Philippines, Inc. and private
respondent labor union PAMAO-NFL. Simply put, how many
hours of overtime work must a Dole employee render to be
entitled to the free meal under Section 3 of Article XVIII of the
1996-2001 CBA? Is it when he has rendered (a) exactly, or no
less than, three hours of actual overtime work or (b) more
than three hours of actual overtime work?

Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant

a MEAL ALLOWANCE of TEN PESOS (P10.00) to all employees
who render at least TWO (2) hours or more of actual overtime
work on a workday, and FREE MEALS, as presently practiced,
not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3)
hours of actual overtime work.[4]
Pursuant to the above provision of the CBA, some
departments of Dole reverted to the previous practice of
granting free meals after exactly three hours of actual
overtime work. However, other departments continued the
practice of granting free meals only after more than three
hours of overtime work. Thus, private respondent filed a
complaint before the National Conciliation and Mediation
Board alleging that petitioner Dole refused to comply with
the provisions of the 1996-2001 CBA because it granted free
meals only to those who rendered overtime work for more
than three hours and not to those who rendered exactly three
hours overtime work.
The parties agreed to submit the dispute to voluntary
arbitration. Thereafter, the voluntary arbitrator, deciding in
favor of the respondent, issued an order directing petitioner
Dole to extend the free meal benefit to those employees who
actually did overtime work even for exactly three hours only.

The antecedents are as follows:

On February 22, 1996, a new five-year Collective
Bargaining Agreement for the period starting February 1996
up to February 2001, was executed by petitioner Dole
Philippines, Inc., and private respondent Pawis Ng
Makabayang Obrero-NFL (PAMAO-NFL). Among the provisions
of the new CBA is the disputed section on meal allowance
under Section 3 of Article XVIII on Bonuses and Allowances,
which reads:

Petitioner sought a reconsideration of the above order

but the same was denied. Hence, petitioner elevated the
matter to the Court of Appeals by way of a petition for review
on certiorari.
On September 22, 2000, the Court of Appeals rendered
its decision upholding the assailed order.
Thus, the instant petition.

Petitioner Dole asserts that the phrase after three hours

of actual overtime work should be interpreted to mean after
more than three hours of actual overtime work.

work on a workday, and FREE MEALS, as presently practiced,

not exceeding SIXTEEN PESOS (P16.00) after THREE (3)
hours of actual overtime work.[6]

On the other hand, private respondent union and the

voluntary arbitrator see it as meaning after exactly three
hours of actual overtime work.

The provision above was later amended when the parties

renegotiated the economic provisions of the CBA pursuant to
Article 253-A of the Labor Code. Section 3 of Article XVIII of
the 14 January 1993 to 13 January 1995 Supplement to the
1990-1995 CBA reads:

The meal allowance provision in the 1996-2001 CBA is

not new. It was also in the 1985-1988 CBA and the 19901995 CBA. The 1990-1995 CBA provision on meal allowance
was amended by the parties in the 1993-1995 CBA
Supplement. The clear changes in each CBA provision on
meal allowance were in the amount of the meal allowance
and free meals, and the use of the words after and after more
than to qualify the amount of overtime work to be performed
by an employee to entitle him to the free meal.
To arrive at a correct interpretation of the disputed
provision of the CBA, a review of the pertinent section of past
CBAs is in order.
The CBA covering the period 21 September 1985 to 20
September 1988 provided:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant
a MEAL ALLOWANCE of FOUR (P4.00) PESOS to all employees
who render at least TWO (2) hours or more of actual overtime
work on a workday, and FREE MEALS, as presently practiced,
after THREE (3) hours of actual overtime work. [5]
The CBA for 14 January 1990 to 13 January 1995 likewise
provided:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant
a MEAL ALLOWANCE of EIGHT PESOS (P8.00) to all employees
who render at least TWO (2) hours or more of actual overtime

Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant

a MEAL SUBSIDY of NINE PESOS (P9.00) to all employees who
render at least TWO (2) hours or more of actual overtime
work on a workday, and FREE MEALS, as presently practiced,
not exceeding TWENTY ONE PESOS (P21.00) after more than
THREE (3) hours of actual overtime work (Section 3, as
amended).[7]
We note that the phrase more than was neither in the
1985-1988 CBA nor in the original 1990-1995 CBA. It was
inserted only in the 1993-1995 CBA Supplement. But said
phrase is again absent in Section 3 of Article XVIII of the
1996-2001 CBA, which reverted to the phrase after three (3)
hours.
Petitioner asserts that the phrase after three (3) hours of
actual overtime work does not mean after exactly three
hours of actual overtime work; it means after more than
three hours of actual overtime work. Petitioner insists that
this has been the interpretation and practice of Dole for the
past thirteen years.
Respondent, on the other hand, maintains that after
three (3) hours of actual overtime work simply means after
rendering exactly, or no less than, three hours of actual
overtime work.

The
Court
interpretation.

finds

logic

in

private

respondents

The omission of the phrase more than between after and

three hours in the present CBA spells a big difference.
No amount of legal semantics can convince the Court
that after more than means the same as after.

the welfare of the employees, it must also protect the right of

the employer to exercise what clearly are management
prerogatives.[8] Petitioner claims that, being the employer, it
has the right to determine whether it will grant a free meal
benefit to its employees and, if so, under what conditions. To
see it otherwise would amount to an impairment of its rights
as an employer.
We do not think so.

Petitioner asserts that the more than in the 1993-1995

CBA Supplement was mere surplusage because, regardless of
the absence of said phrase in all the past CBAs, it had always
been the policy of petitioner corporation to give the meal
allowance only after more than 3 hours of overtime
work. However, if this were true, why was it included only in
the 1993-1995 CBA Supplement and the parties had to
negotiate its deletion in the 1996-2001 CBA?

The exercise of management prerogative is not

unlimited. It is subject to the limitations found in law, a
collective bargaining agreement or the general principles of
fair play and justice.[9] This situation constitutes one of the
limitations. The CBA is the norm of conduct between
petitioner and private respondent and compliance therewith
is mandated by the express policy of the law. [10]

Clearly then, the reversion to the wording of previous

CBAs can only mean that the parties intended that free
meals be given to employees after exactly, or no less than,
three hours of actual overtime work.

Petitioner Dole cannot assail the voluntary arbitrators

interpretation of the CBA for the supposed impairment of its
management
prerogatives
just
because
the
same
interpretation is contrary to its own.

The disputed provision of the CBA is clear and

unambiguous. The terms are explicit and the language of the
CBA is not susceptible to any other interpretation. Hence, the
literal meaning of free meals after three (3) hours of overtime
work shall prevail, which is simply that an employee shall be
entitled to a free meal if he has rendered exactly, or no less
than, three hours of overtime work, not after more than or in
excess of three hours overtime work.
Petitioner also invokes the well-entrenched principle of
management prerogative that the power to grant benefits
over and beyond the minimum standards of law, or the Labor
Code for that matter, belongs to the employer x x
x. According to this principle, even if the law is solicitous of

WHEREFORE, petition is hereby denied.

SO ORDERED.

EN BANC
G.R. No. 71813

July 20, 1987

ROSALINA PEREZ ABELLA/HDA. DANAORAMONA, petitioners,

vs.
THE HONORABLE NATIONAL LABOR RELATIONS
COMMISSION, ROMEO QUITCO and RICARDO DIONELE,
SR., respondents.
PARAS, J.:
This is a petition for review on certiorari of the April 8, 1985
Resolution of the Ministry of Labor and Employment affirming
the July 16, 1982 Decision of the Labor Arbiter, which ruled in
favor of granting separation pay to private respondents.
On June 27, 1960, herein petitioner Rosalina Perez Abella
leased a farm land in Monteverde, Negros Occidental, known
as Hacienda Danao-Ramona, for a period of ten (10) years,
renewable, at her option, for another ten (10) years (Rollo,
pp. 16-20).

On August 13, 1970, she opted to extend the lease contract

for another ten (10) years (Ibid, pp. 26-27).
During the existence of the lease, she employed the herein
private respondents. Private respondent Ricardo Dionele, Sr.
has been a regular farm worker since 1949 and he was
promoted to Cabo in 1963. On the other hand, private
respondent Romeo Quitco started as a regular employee in
1968 and was promoted to Cabo in November of the same
year.
Upon the expiration of her leasehold rights, petitioner
dismissed private respondents and turned over the hacienda
to the owners thereof on October 5, 1981, who continued the
management, cultivation and operation of the farm (Rollo,
pp. 33; 89).
On November 20, 1981, private respondents filed a
complaint against the petitioner at the Ministry of Labor and
Employment, Bacolod City District Office, for overtime pay,
illegal dismissal and reinstatement with backwages. After the
parties had presented their respective evidence, Labor
Arbiter Manuel M. Lucas, Jr., in a Decision dated July 16, 1982
(Ibid, pp. 29-31), ruled that the dismissal is warranted by the
cessation of business, but granted the private respondents
separation pay. Pertinent portion of the dispositive portion of
the Decision reads:
In the instant case, the respondent closed its business
operation not by reason of business reverses or losses.
Accordingly, the award of termination pay in
complainants' favor is warranted.
WHEREFORE, the respondent is hereby ordered to pay
the complainants separation pay at the rate of halfmonth salary for every year of service, a fraction of six

(6) months being considered one (1) year. (Rollo pp.

29-30)
On appeal on August 11, 1982, the National Labor Relations
Commission, in a Resolution dated April 8, 1985 (Ibid, pp.
3940), affirmed the decision and dismissed the appeal for
lack of merit.
On May 22, 1985, petitioner filed a Motion for
Reconsideration (Ibid, pp. 41-45), but the same was denied in
a Resolution dated June 10, 1985 (Ibid, p. 46). Hence, the
present petition (Ibid, pp. 3-8).
The First Division of this Court, in a Resolution dated
September 16, 1985, resolved to require the respondents to
comment (Ibid, p. 58). In compliance therewith, private
respondents filed their Comment on October 23, 1985 (Ibid,
pp. 53-55); and the Solicitor General on December 17, 1985
(Ibid, pp. 71-73-B).
On February 19, 1986, petitioner filed her Consolidated Reply
to the Comments of private and public respondents (Ibid, pp.
80-81).
The First Division of this Court, in a Resolution dated March
31, 1986, resolved to give due course to the petition; and to
require the parties to submit simultaneous memoranda (Ibid.,
p. 83). In compliance therewith, the Solicitor General filed his
Memorandum on June 18, 1986 (Ibid, pp. 89-94); and
petitioner on July 23, 1986 (Ibid, pp. 96-194).
The petition is devoid of merit.
The sole issue in this case is
WHETHER OR NOT PRIVATE RESPONDENTS ARE ENTITLED TO
SEPARATION PAY.

Petitioner claims that since her lease agreement had already

expired, she is not liable for payment of separation pay.
Neither could she reinstate the complainants in the farm as
this is a complete cessation or closure of a business
operation, a just cause for employment termination under
Article 272 of the Labor Code.
On the other hand, the legal basis of the Labor Arbiter in
granting separation pay to the private respondents is Batas
Pambansa Blg. 130, amending the Labor Code, Section 15 of
which, specifically provides:
Sec 15 Articles 285 and 284 of the Labor Code are
hereby amended to read as follows:
xxx

xxx

xxx

Art. 284. Closure of establishment and reduction of

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

least one-half (1/2) month pay for every year of

service whichever is higher. A fraction of at least six
(6) months shall be considered one (1) whole
year.1avvphi1
There is no question that Article 284 of the Labor Code as
amended by BP 130 is the law applicable in this case.
Article 272 of the same Code invoked by the petitioner
pertains to the just causes of termination. The Labor Arbiter
does not argue the justification of the termination of
employment but applied Article 284 as amended, which
provides for the rights of the employees under the
circumstances of termination.
Petitioner then contends that the aforequoted provision
violates the constitutional guarantee against impairment of
obligations and contracts, because when she leased
Hacienda Danao-Ramona on June 27, 1960, neither she nor
the lessor contemplated the creation of the obligation to pay
separation pay to workers at the end of the lease.
Such contention is untenable.
This issue has been laid to rest in the case of Anucension v.
National Labor Union (80 SCRA 368-369 [1977]) where the
Supreme Court ruled:
It should not be overlooked, however, that the
prohibition to impair the obligation of contracts is not
absolute and unqualified. The prohibition is general,
affording a broad outline and requiring construction to
fill in the details. The prohibition is not to read with
literal exactness like a mathematical formula for it
prohibits unreasonable impairment only. In spite of the
constitutional prohibition the State continues to
possess authority to safeguard the vital interests of its

people. Legislation appropriate to safeguard said

interest may modify or abrogate contracts already in
effect. For not only are existing laws read into
contracts in order to fix the obligations as between the
parties but the reservation of essential attributes of
sovereign power is also read into contracts as a
postulate of the legal order. All contracts made with
reference to any matter that is subject to regulation
under the police power must be understood as made
in reference to the possible exercise of that power.
Otherwise, important and valuable reforms may be
precluded by the simple device of entering into
contracts for the purpose of doing that which
otherwise maybe prohibited. ...
In order to determine whether legislation
unconstitutionally impairs contract of obligations, no
unchanging yardstick, applicable at all times and
under all circumstances, by which the validity of each
statute may be measured or determined, has been
fashioned, but every case must be determined upon its
own circumstances. Legislation impairing the
obligation of contracts can be sustained when it is
enacted for the promotion of the general good of the
people, and when the means adopted must be
legitimate, i.e. within the scope of the reserved power
of the state construed in harmony with the
constitutional limitation of that power. (Citing Basa vs.
Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas [FOITAF] [L-27113],
November 19, 1974; 61 SCRA 93,102-113]).
The purpose of Article 284 as amended is obvious-the
protection of the workers whose employment is terminated
because of the closure of establishment and reduction of
personnel. Without said law, employees like private

respondents in the case at bar will lose the benefits to which

they are entitled for the thirty three years of service in the
case of Dionele and fourteen years in the case of Quitco.
Although they were absorbed by the new management of the
hacienda, in the absence of any showing that the latter has
assumed the responsibilities of the former employer, they will
be considered as new employees and the years of service
behind them would amount to nothing.
Moreover, to come under the constitutional prohibition, the
law must effect a change in the rights of the parties with
reference to each other and not with reference to nonparties.
As correctly observed by the Solicitor General, Article 284 as
amended refers to employment benefits to farm hands who
were not parties to petitioner's lease contract with the owner
of Hacienda Danao-Ramona. That contract cannot have the
effect of annulling subsequent legislation designed to protect
the interest of the working class.
In any event, it is well-settled that in the implementation and
interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should
be the primordial and paramount consideration. (Volshel
Labor Union v. Bureau of Labor Relations, 137 SCRA 43
[1985]). It is the kind of interpretation which gives meaning
and substance to the liberal and compassionate spirit of the
law as provided for in Article 4 of the New 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." The policy is to extend the applicability of the
decree to a greater number of employees who can avail of
the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and
protection to labor. (Sarmiento v. Employees Compensation

Commission, 144 SCRA 422 [1986] citing Cristobal v.

Employees Compensation Commission, 103 SCRA 329;
Acosta v. Employees Compensation Commission, 109 SCRA
209).
PREMISES CONSIDERED, the instant petition is hereby
DISMISSED and the July 16, 1982 Decision of the Labor
Arbiter and the April 8, 1985 Resolution of the Ministry of
Labor and Employment are hereby AFFIRMED.
SO ORDERED.

THIRD DIVISION
FERNANDO G. MANAYA,
Petitioner,
- versus -

G.R. No. 168988

ALABANG
COUNTRY
CLUB
Promulgated:
INCORPORATED,
Respondent.
June 19, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
1997

Rules

of

Civil

Procedure

filed

by

Fernando

G. Manaya (petitioner) assailing: (1) the Decision[1] of the

Court of Appeals in CA-G.R. SP No. 75417, dated 9 May 2005,
granting

the

Petition

of Alabang Country

Club

Inc.

(respondent) and setting aside the Resolutions dated 30

August 2002 and 30 October 2002 of the National Labor
Relations Commission (NLRC); and (2) the Resolution [2] of the
Court of Appeals dated 21 July 2005 denying petitioners
Motion for Reconsideration of its earlier Decision.
The assailed decision of the Court of Appeals reversed the
Resolution of the NLRC dismissing the appeal of the
respondent for failure to perfect its appeal within the
statutory period.Instead, the Court of Appeals ordered the
NLRC to give due course to the appeal of the respondent.
The antecedent facts are:

Petitioner alleged that on 21 August 1989, he was initially

In a Decision, dated 20 November 2000, the Labor Arbiter

hired by the respondent as a maintenance helper [3] receiving

held:

a salary of P198.00 per day. He was later designated as

company

electrician. He

continued

to

work

for

the

respondent until 22 August 1998 when the latter, through its

Engineering and Maintenance Department Manager, Engr.
Ronnie B. de la Cruz, informed him that his services were no
longer required by the company. [4] Petitioner alleged that he
was forcibly and illegally dismissed without cause and
without due process on 22 August 1998.[5] Hence, he filed a
Complaint[6] before the Labor Arbiter. He claimed that he had
not committed any infraction of company policies or rules
and that he was not paid his service incentive leave pay,
holiday pay and 13th month pay. He further asserted that with
his more or less nine years of service with the respondent, he
had become a regular employee.He, therefore, demanded his
reinstatement without loss of seniority rights with full
backwages and all monetary benefits due him. [7]
In its Answer, respondent denied that petitioner was its
employee. It

countered

by

saying

that

petitioner

was

employed by First Staffing Network Corporation (FSNC), with

which

respondent

had

an

existing

Memorandum

of

Agreement dated 21 August 1989. Thus, by virtue of a

legitimate job contracting, petitioner, as an employee of
FSNC, came to work with respondent, first, as a maintenance
helper, and subsequently as an electrician. Respondent
prayed for the dismissal of the complaint insisting that
petitioner had no cause of action against it.

WHEREFORE, premises considered, complainant

Fernando G. Manaya is hereby found to be a
regular
employee
of
respondent Alabang Country
Club,
Inc.,
as aforediscussed. His
dismissal
from
the
service having been effected without just and
valid cause and without the due observance of
due
process
is
hereby
declared
illegal. Consequently,
respondent Alabang Country Club, Inc. is hereby
ordered to reinstate complainant to his former
position without loss of seniority rights and
other benefits appurtenant thereto with full
backwages in the partial amount of P160,724.48
as
computed
by
Ms.
Ma. Concepcion Manliclic and duly noted by Ms.
Ma. Elena L. Estadilla, OIC-CEU, NCR-South
Sector which computation has been made part
of the records.
Furthermore, respondent Alabang Country Club,
Inc. and First Staffing Network Corporation are
hereby ordered to pay complainant, jointly and
severally the following amounts by way of the
following:
1. Service Incentive Leave 2,961.75
2. 13th Month Pay 15,401.10, and
3. Attorneys fees of ten (10%)
percent of the total
monetary award herein adjudged due him,
within ten (10) days from receipt hereof.[8]

Respondent filed an Appeal with the NLRC which dismissed

final and executory on 28 November 2002; thus, Entry of

the same.[9] In a Resolution dated 30 August 2002, the NLRC

Judgment, dated 8 January 2003[16] was issued.

held:
Respondent filed a Petition for Certiorari[17] under Rule 65 of
PREMISES CONSIDERED, instant appeal from the
Decision of November 20, 2000 is hereby
DISMISSED for failure to perfect appeal within
the statutory period of appeal. The Decision is
now final and executory.[10]

the Rules of Court before the Court of Appeals. In a Decision

dated 9 May 2005,[18] the Court of Appeals granted the
petition and ordered the NLRC to give due course to
respondents appeal of the Labor Arbiters Decision. Petitioner
filed a Motion for Reconsideration which was denied by the

The NLRC found that respondents counsel of record Atty.

Court of Appeals in a Resolution[19] dated 21 July 2005.

Angelina

Not to be dissuaded, petitioner filed the instant petition

A. Mailon of Monsod, Valencia and

Associates

received a copy of the Labor Arbiters Decision on or

before this Court.

before 11 December 2000 as shown by the postal stamp or

registry return card.[11] Said counsel did not file a withdrawal
of

appearance. Instead,

Appeal[12] dated 26

December

respondents

counsel,

new

Memorandum

2000 was

filed

Atty. Arizala of

The issue for resolution:

of

by

the

Tierra

and

Associates Law Office. Reckoned from 11 December 2000,

the date of receipt of the Decision by respondents previous
counsel, the filing of the Memorandum of Appeal by its new

WHETHER OR NOT THE COURT OF APPEALS

COMMITTED AN ERROR WHEN IT ORDERED THE
NLRC TO GIVE DUE COURSE TO THE APPEAL OF
RESPONDENT
ALABANG
COUNTRY
CLUB,
INCORPORATED EVEN IF THE SAID APPEAL WAS
FILED BEYOND THE REGLEMENTARY PERIOD OF
TEN (10) DAYS FOR PERFECTING AN APPEAL. [20]

counsel on 26 December 2000 was clearly made beyond the

reglementary period. The NLRC held that the failure to
perfect an appeal within the statutory period is not only
mandatory

but

jurisdictional. The

appeal

having

been

belatedly filed, the Decision of the Labor Arbiter had become

final and executory.[13]
Respondent filed a Motion for Reconsideration, [14] which the
NLRC denied in a Resolution dated 30 October 2002.[15] The
NLRC held that the decision of the Labor Arbiter has become

Essentially, the issue raised by the respondent before the

NLRC in assailing the decision of the Labor Arbiter pertains to
the finding of the Labor Arbiter that petitioner was a regular
employee of the respondent.
In granting the petition, the Court of Appeals relied mainly on
the case of Aguam v. Court of Appeals,[21] where this Court
held that litigation must be decided on the merits and not on

technicalities. The appellate court further justified the grant

of an adverse judgment resulting in the loss of his right to

of respondents petition by saying that the negligence of its

appeal is not a ground for setting aside a judgment, valid and

counsel should not bind the respondent.

[22]

regular on its face.[25]

Even more, it is respondents duty as a client to be in touch

The Court of Appeals gave credence to respondents claim

with his counsel so as to be constantly posted about the

that its lawyer abandoned the case; hence, they were not

case. It is mandated to inquire from its counsel about the

effectively represented by a competent counsel. It further

status and progress of the case from time to time and cannot

held that the respondent, upon its receipt of the Decision of

expect that all it has to do is sit back, relax and await the

the Labor Arbiter on 15 December 2000, filed its appeal

outcome of the case.[26]

on 26 December 2000 through a new lawyer. The appeal filed

by respondent through its new lawyer on 26 December

On this score, we hold that the notice to respondents

2000 was well within the reglementary period, 25 December

counsel, Atty. Angelina A. Mailon on 11 December 2000 is the

2000 being a holiday.

controlling date of the receipt of the decision.

It is axiomatic that when a client is represented by counsel,

We now come to the issue of whether or not the Court of

notice to counsel is notice to client. In the absence of a

Appeals properly gave due course to the petition of the

notice of withdrawal or substitution of counsel, the Court will

respondent before it.

rightly assume that the counsel of record continues to

represent his client and receipt of notice by the former is the

Of relevance is Section 1, Rule VI of the 2005 Revised Rules

reckoning point of the reglementary period.[23] As heretofore

of the NLRC

adverted, the original counsel did not file any notice of

withdrawal. Neither was there any intimation by respondent
at that time that it was terminating the services of its
counsel.
For negligence not to be binding on the client, the same must
constitute gross negligence as to amount to a deprivation of
property without due process. [24] This does not exist in the
case at bar. Notice sent to counsel of record is binding upon
the client and the neglect or failure of counsel to inform him

Section 1. PERIODS OF APPEAL. Decisions,

resolutions or orders of the Labor Arbiter shall
be final and executory unless appealed to the
Commission by any or both parties within ten
(10) calendar days from receipt thereof; and in
case of decisions, resolutions or orders of the
Regional Director of the Department of Labor
and Employment pursuant to Article 129 of the
Labor Code, within five (5) calendar days from
receipt thereof. If the 10th or 5th day, as the case
may be, falls on a Saturday, Sunday or holiday,
the last day to perfect the appeal shall be the

first working day

Sunday or holiday.

following

such

Saturday,
In all these, the Court allowed liberal interpretation given the

No motion or request for extension of the period

within which to perfect an appeal shall be
allowed.

extraordinary circumstances that justify a deviation from an

otherwise stringent rule.[29]

Remarkably, in highly exceptional instances, we have allowed

the

relaxing

of

the

rules

on

the

application

of

the

reglementary periods of appeal.[27] Thus:

In Ramos v. Bagasao, 96 SCRA 395, we excused
the delay of four days in the filing of a notice of
appeal because the questioned decision of the
trial court was served upon appellant Ramos at
a time when her counsel of record was already
dead. Her new counsel could only file the appeal
four days after the prescribed reglementary
period was over. In Republic v. Court of Appeals,
83 SCRA 453, we allowed the perfection of an
appeal by the Republic despite the delay of six
days to prevent a gross miscarriage of justice
since the Republic stood to lose hundreds of
hectares of land already titled in its name and
had since then been devoted for educational
purposes. In Olacao v. National Labor Relations
Commission, 177 SCRA 38, 41, we accepted a
tardy appeal considering that the subject matter
in issue had theretofore been judicially settled,
with finality, in another case. The dismissal of
the appeal would have had the effect of the
appellant being ordered twice to make the same
reparation to theappellee.[28]

Clearly, emphasized in these cases is that the policy of liberal

interpretation is qualified by the requirement that there must
be exceptional circumstances to allow the relaxation of the
rules.[30]
Absent exceptional circumstances, we adhere to the rule that
certain procedural precepts must remain inviolable, like
those setting the periods for perfecting an appeal or filing a
petition for review, for it is doctrinally entrenched that the
right to appeal is a statutory right and one who seeks to avail
oneself of that right must comply with the statute or
rules. The rules, particularly the requirements for perfecting
an appeal within the reglementary period specified in the
law, must be strictly followed as they are considered
indispensable interdictions against needless delays and for
orderly

discharge

of

judicial

business. Furthermore,

the

perfection of an appeal in the manner and within the period

permitted by law is not only mandatory but also jurisdictional
and the failure to perfect the appeal renders the judgment of
the court final and executory. Just as a losing party has the
right to file an appeal within the prescribed period, the

We pronounced in those cases that technicality should not be

allowed to stand in the way of equitably and completely
resolving the rights and obligations of the parties.

winning party also has the correlative right to enjoy the

finality of the resolution of his/her case. [31]
In this particular case, we adhere to the strict interpretation
of the rule for the following reasons:

Firstly, in this case, entry of judgment had already been

made[32] which rendered the Decision of the Labor Arbiter as
final and executory.

where it would render futile the very purpose for

which the principle of liberality is adopted. The
liberal interpretation stems from the
mandate that the workingmans welfare
should be the primordial and paramount
consideration. We see no reason in this case
to waive the rules on the perfection of appeal. [35]

Secondly, it is a basic and irrefragable rule that in carrying

out and in interpreting the provisions of the Labor Code and
its implementing

regulations,

the

workingmans welfare

should be the primordial and paramount consideration. The

interpretation herein made gives meaning and substance to
the liberal and compassionate spirit of the law enunciated in
Article

4 of

the

Labor

Code

that

all

doubts

in

the

implementation and interpretation of the provisions of the

Labor Code including its implementing rules and regulations
shall be resolved in favor of labor.[33]
In the case of Bunagan v. Sentinel[34] we declared that:
[T]hat the perfection of an appeal within the
statutory or reglementary period is not only
mandatory, but jurisdictional, and failure to do
so renders the questioned decision final
and executory and deprives the appellate court
of jurisdiction to alter the final judgment, much
less to entertain the appeal. The underlying
purpose of this principle is to prevent needless
delay, a circumstance which would allow the
employer to wear out the efforts and meager
resources of the worker to the point that the
latter is constrained to settle for less than what
is due him. This Court has declared that
although the NLRC is not bound by the technical
rules of procedure and is allowed to be liberal in
the interpretation of the rules in deciding labor
cases, such liberality should not be applied

The Court is aware that the NLRC is not bound

by the technical rules of procedure and is
allowed to be liberal in the interpretation of
rules in deciding labor cases. However, such
liberality should not be applied in the
instant case as it would render futile the
very purpose for which the principle of
liberality is adopted. The liberal interpretation
in favor of labor stems from the mandate that
the workingmans welfare should be the
primordial and paramount consideration. x x x.
[36]
(Emphases supplied.)

Indeed, there is no room for liberality in the instant case as it

would render futile the very purpose for which the principle
of liberality is adopted. As so rightfully enunciated, the liberal
interpretation in favor of labor stems from the mandate that
the workingmans welfare should be the primordial and
paramount consideration. This Court has repeatedly ruled
that delay in the settlement of labor cases cannot be
countenanced. Not only does it involve the survival of an
employee and his loved ones who are dependent on him for
food, shelter, clothing, medicine and education; it also wears
down the meager resources of the workers to the point that,
not infrequently, they either give up or compromise for less
than what is due them.[37]

Commission by any or both parties within ten

(10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may
be entertained only on any of the following
grounds:

Without doubt, to allow the appeal of the respondent as what

the Court of Appeals had done and remand the case to the
NLRC would only result in delay to the detriment of the

(a) If there is prima facie evidence of abuse of

discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft an
corruption;
(c) If made purely on question of law; and
(d) If serious errors in the finding of facts are
raised which would cause grave or irreparable
damage or injury to the appellant.

petitioner. In Narag v. National Labor Relations Commission,

[38]

citing Vir-Jen

Shipping

and

Marine

National Labor Relations Commission,

[39]

Services,

Inc.

v.

we held that delay

in most instances gives the employers more opportunity not

only to prepare even ingenious defenses, what with well-paid
talented lawyers they can afford, but even to wear out the
efforts and meager resources of the workers, to the point
that not infrequently the latter either give up or compromise
for less than what is due them.[40]
Nothing is more settled in our jurisprudence than the rule
that when the conflicting interest of loan and capital are
weighed on the scales of social justice, the heavier influence
of the latter must be counter-balanced by the sympathy and
compassion the law must accord the under-privileged worker.
[41]

Under the above provision, to obtain a reversal of the

decision of the Labor Arbiter, the respondent must be able to
show in his appeal that any one of the above instances
exists.
Respondent failed to show the existence of any of the
above. A more than perfunctory reading of the Decision of
the Labor Arbiter shows that the same is supported by the
evidence on record.

Thirdly, respondent has not shown sufficient justification to

reverse the findings of the Labor Arbiter as affirmed by the
NLRC.

Respondent narrates that it had a contract of services, first,

with Supreme Construction (Supreme). Supreme assigned
petitioner to work with the respondent starting as a painter

Pertinent provision of the Labor Code provides:

and

moving

on

to

perform

electrical

jobs. Respondent

terminated its contract with Supreme and entered into

ART. 223. APPEAL. Decisions, awards, or orders
of
the
Labor
Arbiter
are
final
and executory unless
appealed
to
the

another contract of services with another job-contracting

agency,

First

Staffing

Network

Corporation. Petitioner

continued to work for the respondent which claimed that the

former was supplied by FNSC to it as part of its contract to
supply

the

manpower

respondent. Petitioner

is

not

requirements
the

employee

of
of

the
the

respondent. He was directly hired first by Supreme then later

by FNSC and deployed to work with the respondent based on
the contract of services between respondent and these jobcontracting agencies. All these considered, respondent insists
that petitioner is therefore not its employee.
We do not agree to this submission of the respondent. The
Labor Arbiter concluded otherwise and this finds support
from the evidence, thus:
[R]espondent was not able to convincingly
disprove complainants claims that at the outset,
he was directly hired by it as a maintenance
helper on 21 August 1989. Although said
respondent alleges that complainant was hired
by its job contractor, Supreme Construction, it
failed to submit in evidence the Contract of
Service it had entered into in order to establish
the entry of complainant as deployed by said
company for his duties at Alabang Country Club,
Inc. pursuant to the said Agreement. It can
therefore be readily presumed that said
respondent did not produce the said document
because the production of the same will readily
prove complainants assertion of having been
hired long before said contractor Supreme
Construction entered into the picture. We have
noted complainants admission of having been
later coerced to sign up with said Supreme
Construction by respondent Alabang Country
Club, Inc. which he did as he was told in his fear
of losing his job.

As shown by respondent Alabang Country Club,

Inc.s own evidence, it later terminated its
contract of service or Memorandum of
Agreement with Supreme Construction and
entered into a new contract of service with
respondent First Staffing Network Corporation
effective on 16 June 1994. However by said
respondents own allegation, even with the
absence of complainants supposed direct
employer Supreme Construction, he still
remained in its employ until he signed up with
respondent First Staffing Network Corporation
on 11 February 1996. This indeed runs counter
to the normal course of human experience such
that when a contractor losses (sic) his contract
of service he packs up along with all his
employees, but in this case, complainant was
not terminated from the service notwithstanding
the expiration/termination of the contract of
service
of
his
alleged
direct
employer. Complainant remained working with
respondent Alabang Country Club, Inc. despite
the severance of the contractual relations
between itself and Supreme Construction.
The initial Memorandum of Agreement entered
into by respondents Alabang Country Club, Inc.
and First Staffing Network Corporation was
dated, 16 June 1994, and was apparently
renewed thereafter providing under Article III On
Compensation thereof, the following, viz:
3.01 For and in consideration of the
performance by FIRST STAFFING of
its
obligations
under
this
AGREEMENT, the CLIENT agrees to
pay the former based on the
schedule of billing rates which shall
be specified in the Personnel
Requisition Form signed by the

CLIENT. The schedule of

rates is as follows, to wit:

billing

BILLING RATES/HOUR PLUS 10%

VALUE ADDED TAX
Covered Pos.
ABC
Waiters Accounting Supervisor
Janitors Data Encoders
Bag Boy Gen. Clerks
Stewards Secretary
Cook Helpers Receptionist
Messengers Secretary
Cashier
xxx.
Nowhere, does complainants position of
electrician appear as covered in the said
contract. Finally, suffice it for Us to stress that
the said contract covers almost all of
respondents Alabang Country
Club,
Inc.s
workforce including those whose jobs or
activities
are
directly
related
to
said
respondents business, emphasizing in no
uncertain terms that respondent First Staffing
Network
Corporation
was
not
a
truly bonafide job contractor, as it did not
contract out specific service but merely supplied
work personnel, a clear indication, that it was
engaged in a job only contracting which is
prohibited by law.
Besides, the said respondent First Staffing
Network Corporation failed to prove that it is
a bonafide job contractor by showing that it had
an adequate capital or investment in tools,
equipments and machineries and premises for
that
matter,
and
so
did
respondent Alabang Country Club, Inc. fail to
establish the same. For that matter, respondent

First Staffing Network Corporation had waived

its right to present any evidence in its favor in
this case.
Obviously, herein respondent Alabang Country
Club, Inc. actually resorted to contracting out all
the positions for its workforce in violation of law
in its desire to circumvent said employees rights
as regular employees under the law.[42]

The existence of an employer-employee relationship

between petitioner and respondent is fortified by the fact
that during his stint with the respondent, petitioner was
given the opportunity to attend a seminar/training on
refrigeration and air conditioning from 16 January 1995 to 18
February 1995.[43] A certificate of participation signed by
three of respondents officials was issued to the petitioner.
Equally significant is Article 106 of the Labor Code, as
amended, which provides that legitimate job contracting is
permitted, but labor-only contracting is prohibited. The said
provision reads:
Art. 106. CONTRACTOR OR SUBCONTRACTOR.
Whenever an employer enters into a contract
with another person for the performance of
the formers work, the employees of the
contractor and of the latters 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 the 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.
There is laboronly contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of
tools, equipment, machineries, work premises,
among others, and the workers recruited and
placed by such person are performing activities
which are directly related to the principal
business of such employer. In such cases, 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.
Rule VIII-A, Book III of the Omnibus Rules
Implementing the Labor Code, as amended by
Department Order No. 18, distinguishes
between legitimate and labor only contracting:
Section 3. Trilateral Relationship in
Contracting
Arrangements.
- In
legitimate contracting, there exists a

trilateral relationship under which

there is a contract for a specific job,
work or service between the principal
and the contractor or subcontractor,
and a contract of employment
between
the
contractor
and
subcontractor and its workers. Hence,
there are three parties involved in
these arrangements, the principal
which decides to farm out a job or
service
to
a
contractor
or
subcontractor,
the
contractor or
subcontractor which has the capacity
to
independently
undertake
the
performance of the job, work or
service, and the contractual workers
engaged
by
the
contractor
or
subcontractor to accomplish the job,
work or service.
Section 5. Prohibition against laboronly
contracting. Labor-only contracting is
hereby declared prohibited. For this
purpose, labor only contracting shall
refer to an arrangement where the
contractor or subcontractor merely
recruits, supplies or places workers to
perform a job, work or service for a
principal, and any of the following
elements are present:
i)

The contractor
or subcontractor does
not have substantial
capital or investment
which relates to the
job, work or service to
be performed and the
employees recruited,
supplied or placed by
such contractor or
subcontractor
are

ii)

performing activities
which
are
directly
related to the main
business
of
the
principal, or
The contractor
does not exercise the
right to control over
the performance of
the
work
of
the
contractual employee.

The foregoing provisions shall be without

prejudice to the application of Article 248(c) of
the Labor Code, as amended.
Substantial capital or investment refers to
capital stocks and subscribed capitalization in
the case of corporations, tools, equipments,
implements, machineries and work premises,
actually and directly used by the contractor or
subcontractor in the performance or completion
of the job, work or service contracted out.
The right to control shall refer to the right
reserved to the person for whom the services of
the contractual workers are performed, to
determine not only the end to be achieved, but
also the manner and means to be used in
reaching that end.
The test to determine the existence of
independent contractorship is
whether
one
claiming to be an independent contractor has
contracted to do the work according to his on
methods and without being subject to the
control of the employer, except only as to the
results of the work.
In legitimate labor contracting, the law creates
an employer-employee relationship for a limited
purpose, i.e., to ensure that the employees are

paid their wages. The principal employer

becomes jointly and severally liable with the job
contractor, only for the payment of the
employees wages whenever the contractor fails
to pay the same. Other than that, the principal
employer is not responsible for any claim made
by the employees. [44]

Despite respondents disavowal of the existence of the

employer-employee relationship between it and petitioner
and its insistence that petitioner is an employee first, of
Supreme and subsequently, of FSNC, the totality of the facts
and surrounding circumstances of the case convey otherwise.
On this point, the law is clear-cut. In laboronly contracting,
the statute creates an employeremployee relationship for a
comprehensive purpose: to prevent a circumvention of labor
laws.The contractor is considered merely an agent of the
principal employer and the latter is responsible to the
employees of the laboronly contractor as if such employees
had been directly employed by the principal employer.
The Labor Code and its implementing rules empower the
Labor Arbiter to be the trier of facts in labor cases. Much
reliance is placed on findings of facts of the Arbiter having
had the opportunity to talk to and discuss with the parties
and their witnesses the factual matters of the case during the
conciliation phase.[45] We, thus, give full credence to the
findings of facts of the labor arbiter.

WHEREFORE,

premises

considered,

the

Petition

is GRANTED. The Decision of the Court of Appeals dated 9

May

2005 and

its

2005 is REVERSED. The

Resolution
Decision

of

dated 21
the

Labor

July
Arbiter

dated 20 November 2000 is REINSTATED. Let the records of

the above-entitled case be remanded to the Labor Arbiter for
immediate execution of the Decision. No costs.
SO ORDERED.

THIRD DIVISION
G.R. No. L-47521

July 31, 1987

CAROLINA CLEMENTE, petitioner,

vs.
GOVERNMENT SERVICE INSURANCE SYSTEM
Department of Health (Dagupan City) and EMPLOYEES'
COMPENSATION COMMISSION, respondents.
GUTIERREZ, JR., J.:

This is a petition to review the decision of the Employees'

Compensation Commission in ECC Case No. 0509 which
affirmed the decision of the Government Service Insurance
System (GSIS) and denied the claim for death benefits filed
by Carolina Clemente, widow of the late Pedro Clemente,
The undisputed facts of the case are summarized in the
memorandum for the respondent Government Service
Insurance System, as follows:
Petitioner's husband, the late Pedro Clemente, was for
ten (10) years a janitor in the Department of Health
(Dagupan City), assigned at the Ilocos Norte Skin
Clinic, Laoag City. He was hospitalized from November
3 to 14, 1976 at the Central Luzon Sanitarium, Tala
Sanitarium, Tala, Caloocan City, due to his ailment of
"nephritis," as per medical certification of his attending
physician, Dr. Winifredo Samson. He was also found to
be suffering from such ailments as portal cirrhosis and
leprosy, otherwise known as Hansen's Disease.
On November 14, 1976, Pedro Clemente died of
uremia due to nephritis. Thereafter, petitioner filed
with the GSIS a claim for employees' compensation
under the Labor Code, as amended.
On February 4, 1977, the GSIS denied the claim of the
petitioner because the ailments of her husband are not
occupational diseases taking into consideration the
nature of his work and/or (sic) or were not in the least
causally related to his duties and conditions of work.
On March 9, 1977, petitioner requested for
reconsideration of the GSIS' denial of her claim, stating
that the ailments of her husband were contracted in
the course of employment and were aggravated by the
nature of his work. Petitioner alleged that her husband,

as janitor of the Ilocos Norte Skin Clinic (Laoag City),

worked in direct contact with persons suffering from
different skin diseases and was exposed to obnoxious
dusts and other dirt which contributed to his ailment of
Hansen's disease. Citing further the cases of Seven-Up
Bottling Co., of the Phil. v. Rimerata, L-24349,
December 24, 1968 and Avana v. Quisumbing, L23489, March 27, 1968. Petitioner stated that her
husband's ailment recurred in the course of
employment presumably due to his direct contact with
persons suffering from this ailment.
Acting upon petitioner's request for reconsideration,
the GSIS, on April 11, 1977, reiterated its previous
denial of her claim.
On April 14, 1977, treating the request for
reconsideration as an appeal, the GSIS forwarded the
records of the petitioner' claim for review by the ECC.
On October 26, 1977, respondent ECC affirmed the
GSIS' action of denial and rendered its own decision
dismissing petitioner's claim (ECC Case No. 0509).
Respondent ECC's decision was anchored upon the
findings that the ailments are not listed as
occupational diseases; that there was no substantial
evidence of causal connection; and that, in fact, the
evidence was that the deceased had already
contracted the Hansen's disease before his
employment. In the exact words of the ECC:
In the case at bar, since the deceased's ailments
are not listed as occupational diseases,
appellant herein must prove that such ailments
were caused by deceased's employment and
that the risk of contracting the same was

increased by his working conditions in order to

be compensable.
A mere cursory reading of the evidences on
record, however, will disclose that appellant
failed to submit the required proof of causation.
There is no substantial proof in the record from
which we could draw the conclusion that indeed
the nature of deceased's employment as Janitor
of Ilocos Norte Skin Clinic could be traced as the
direct cause of his ailment. Hence, in the
absence of such evidence, we are not disposed
to disturb on appeal the findings of the
respondent System.
On the contrary, we find the records that the
deceased, prior to his employment in this office,
was already suffering from his ailment of
Hansen's disease. This proves that his working
conditions did not increase the risk of his
contracting the same. If at all, his employment
merely aggravated his ailments. Unfortunately,
however, aggravation of a preexisting illness, a
rule under the old law, is not anymore a ground
for compensation under the new law. Thus, the
cases cited by the appellant cannot be raised as
authorities to support her claim.
Petitioner now seeks a review of the ECC decision. (pp.
76-78, Rollo)
There is no question that the claim falls under the provisions
of the Labor Code, as amended. Under Article 167(L) of the
Labor Code and Section 1 (b) Rule III of the Amended Rules
on Employees' Compensation, for the sickness and the
resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under

Annex "A" of the Rules with the conditions therein satisfied;

otherwise, proof must be shown that the risk of contracting
the disease is increased by the working conditions (De Jesus
v. Employees' Compensation Commission, 142 SCRA 92, 96).
As the illnesses of the deceased are admittedly, not listed
under Annex "A" of the Rules as occupational diseases, the
petitioner bases her claim under the theory of increased risk.
She alleges that the deceased, as janitor of the Ilocos Norte
Skin Clinic, was exposed to patients suffering from various
kinds of skin diseases, including Hansen's disease or leprosy.
She avers that for ten years, the deceased had to clean the
clinic and its surroundings and to freely mix with its patients.
She claims that it was during this time that he was attacked
by other dreadful diseases such as uremia, cancer of the
liver, and nephritis.
On the other hand, the respondent Employees' Compensation
Commission contends that the petitioner failed to prove by
substantial evidence that the deceased's ailments were
indeed caused by his employment. It maintains that the
deceased merely had a recurrence of a pre-existing illness
aggravated possibly by the nature of his employment and
that there is no evidence on record showing that the nature
of the deceased's employment was the direct cause of any of
his illnesses.
The respondent Government Service Insurance System
concurs with the views of the respondent Commission. It,
however, argues that it should be dropped as a party
respondent in this case. It claims that the petitioner has no
cause of action against it, the subject of judicial review being
the adverse decision of the respondent Commission.
We rule for the petitioner.

In Sarmiento v. Employees' Compensation Commission (144

SCRA 421, 46) we held that:
Strict rules of evidence are not applicable in claims for
compensation (San Valentin v. Employees'
Compensation Commission, 118 SCRA 160; Better
Building, Inc., v. Puncan, 135 SCRA 62). There are no
stringent criteria to follow. The degree of proof
required under P.D. 626; is merely substantial
evidence, which means, "such relevant evidence as a
reasonable mind might accept as adequate to support
a conclusion" (Cristobal v. Employees' Compensation
Commission, supra, citing Ang Tibay v. Court of
Industrial Relations and National Labor Union, Inc., 69
Phil. 635; and Acosta v. Employees' Compensation
Commission, 109 SCRA 209). The claimant must show,
at least, by substantial evidence that the development
of the disease is brought largely by the conditions
present in the nature of the job. What the law requires
is a reasonable work-connection and not a direct
causal relation (Cristobal v. Employees' Compensation
Commission, supra; Sagliba v. Employees'
Compensation Commission, 128 SCRA 723; Neri v.
Employees' Compensation Commission, 127 SCRA 672;
Juala v. Employees' Compensation Commission, 128
SCRA 462; and De Vera v. Employees' Compensation
Commission, 133 SCRA 685). It is enough that the
hypothesis on which the workmen's claim is based is
probable. Medical opinion to the contrary can be
disregarded especially where there is some basis in
the facts for inferring a work-connection (Delegente v.
Employees' Compensation Commission, 118 SCRA 67;
and Cristobal v. Employees' Compensation
Commission, supra). Probability not certainty is the
touchstone (San Valentin v. Employees' Compensation
Commission, supra).

In this case, we find sufficient evidence on record to sustain

the petitioner's view. The records disclose that in resisting
the petitioner's claim, the respondent Commission cited the
following medical authorities:
Uremia refers to the toxic clinical condition associated
with renal insufficiency and retention in the blood of
nitrogenous urinary waste products (azotemia). Renal
insufficiency may be due to (1) nephritis, bilateral
pyelonephritis, polycystic kidney disease, uretral or
bladder obstruction, SLE, polyarteritis, amyloid
disease, or bilateral cortical necrosis; (2) acute tubular
necrosis resulting from transfusion reaction, shock,
burns, crushing injuries, or poisons; (3) sulfonamides
precipitated in the kidneys or ureters; (4)
nephrocalcinosis resulting from extreme alkalosis,
diabetic acidosis, dehydration, or congestive heart
failure may result in azotemia, or may predipitate (sic)
severe uremia in the presence of already damages
kidneys.
Reference: Lyght, Charles E.: The Merck Manual of
Diagnosis and Therapy; M.S. & D. Research Lab.; 11th
Edition, 1966, pp. 257-258.
Portal Cirrhosis: A chronic disease characterized by
incresed connective tissue that spreads from the portal
spaces, distorting liver architecture and impairing liver
functions. Etiology, Incidence and pathology: Portal
cirrhosis occurs chiefly in males in late middle life.
Malnutrition is believed to be a predisposing if not a
primary etiology factor. The role of alcohol is not
clearly established. Alcohol probably exerts a direct
toxic effect on the liver, and also increases
malnutrition by providing calories without essential
nutrients. Cirrhosis has been produced in animals by
diets low in protein and specifically low in choline. The

addition of choline to these diets prevents cirrhosis.

Chronic poisoning with carbon tetrachloride or
phosphorus produces changes similar to those from
portal cirrhosis. The liver is diffusely nodular, scarred
and dense. Microscopic section shows parenchymal
degeneration cellular infiltration, proliferation or scar
tissue and areas of regeneration. Fatty changes are
present in the early states.
Reference: Lyght, C.E.: The Merck Manual of Diagnosis
and Therapy: M.S. & D. N.J. 11th Edition, 1966, p. 928.
Hepatoma (Liver cancer) refers to malignant primary
tumor of the liver destroying the parenchyma arise
(sic) from both liver cell and bile duct elements. It
develops most frequently in the previous cirrhosis liver.
A higher fraction of patients with post necrotic cirrhosis
develop hepatoma than those with portal alcoholic
cirrhosis. This may reflect the more active necrotic and
regenerative processes in the post necrotic cirrhosis
liver. Most large series indicate that 60% or more of
hepatomas develop in a previously cirrhotic liver. The
cirrhosis of hemochromatosis seems particularly liable
to hepatomas as high a fraction as 20% of patients
with hemochromatosis die from this cause.
Reference: Harrison, T.R.: Principles of Internal
Medicine; McGraw Hill; N.Y., 5th Ed.; 1966, p. 1072.
Leprosy is a chronic, mildly contagious, infectious
disease characterized by both cutaneous and
constitutional symptoms and the production of various
deformities and mutilations. The causative organism is
an acid fast rod. Mycobacterium leprae, first described
by Hansen in 1874. The mode of transmission is
obscure, although infection by direct contact appears
likely. The disease is found predominantly in tropical

and sub-tropical Asia, Africa, and South America. It is

endemic in the Gulf States of the USA, Hawaii, the
Philippines and Puerto Rico.
Reference: Lyght, C.E.: The Merk Manuel of Diagnosis
and Therapy; " M.S. & D.; 11th Ed.; 1966, p. 847.
The nature of nephritis, however, was discussed by Mr. Daniel
Mijares, GSIS Manager, Employees' Compensation
Department, in his letter dated February 4, 1977, denying
petitioner's claim, as follows:
Nephritis is an acute, diffuse inflammation of the
glomeruli or kidneys. It usually follows previous
streptoccocal infection mostly in the upper respiratory
tract. Because of this, it is always thought that
nephritis is the result of an auto-immune or allergic
reaction to infection, usually streptococcal. (Rollo, p.
20)
The foregoing discussions support rather than negate the
theory of increased risk. We note that the major ailments of
the deceased, i.e. nephritis, leprosy, etc., could be traced
from bacterial and viral infections. In the case of leprosy, it is
known that the source of infection is the discharge from
lesions of persons with active cases. It is believed that the
bacillus enters the body through the skin or through the
mucous membrane of the nose and throat (Miller and Keane,
Encyclopedia and Dictionary of Medicine and Nursing, (1972),
p. 530).
On the other hand, infectious diseases which give rise to
nephritis are believed to be as follows:
Table 294-1
Causes of acute glomerulonephritis

Infectious diseases
A. Post streptococcal glumerulonephritis
B. Non-Post streptococcal glumerulonephritis
1. Bacterial: Infective endocarditis, "Shunt
nephritis," sepsis, pneumococcal
pneumonia, typhoid fever, secondary
syphilis, meningococcemia
2. Viral: Hepatitis B, infectious
menoneucleosis, mumps, measles,
varicella, vaccinia, echovirus, and
coxsackievirus
3. Parasitic: Malaria, taxoplasmosis
(Harrison's Principles of Internal Medicine, 10th edition,
p. 1633)
The husband of the petitioner worked in a skin clinic. As
janitor of the Ilocos Norte Skin Clinic, Mr. Clemente was
exposed to different carriers of viral and bacterial diseases.
He had to clean the clinic itself where patients with different
illnesses come and go. He had to put in order the hospital
equipments that had been used. He had to dispose of
garbage and wastes that accumulated in the course of each
working day. He was the employee most exposed to the
dangerous concentration of infected materials, and not being
a medical practitioner, least likely to know how to avoid
infection. It is, therefore, not unreasonable to conclude that
Mr. Clemente's working conditions definitely increased the
risk of his contracting the aforementioned ailments. This
Court has held in appropriate cases that the conservative
posture of the respondents is not consistent with the liberal
interpretation of the Labor Code and the social justice

guarantee embodied in the Constitution in favor of the

workers (Cabanes v. Employees' Compensation Commission,
et al., L-50255, January 30, 1982; and Cristobal v. Employees'
Compensation Commission, et al., supra). It clashes with the
injunction in the Labor Code (Article 4, New Labor Code) that,
as a rule, doubts should be resolved in favor of the claimantemployee (Mercado, Jr., v. Employees' Compensation
Commission, 139 SCRA 270, 277).
The respondents admit there may have been aggravation of
an existing ailment but point out that aggravating is no
longer a ground for compensation under the present law.
They contend that the compensable factor of increased risks
of contracting the disease is not present in this case.
The fallacy in this theory lies in the failure to explain how a
sick person was able to enter the government service more
than ten years before he became too ill to work and at a time
when aggravation of a disease was compensable. There is no
evidence to show that Mr. Clemente was hired inspite of
having an existing disease liable to become worse.
The petitioner's arguments of recurrence of an already cured
disease or the contracting of the disease due to increased
risks become more plausible. When there are two or more
possible explanations regarding an issue of compensability
that which favors the claimant must be chosen.1avvphi1
We also do not find merit in the respondent GSIS' contention
that it should be dropped as a party in this case. This Court
has passed upon this issue on several occasions. Thus, in the
case of Cabanero v. Employees' Compensation Commission
(111 SCRA 413, 419), this Court citing Lao v. Employees'
Compensation Commission (97 SCRA 782), held:
xxx

xxx

xxx

... This Court is of the opinion that respondent System,

as the ultimate implementing agency of the ECC's
decision, is a proper party in this case. The fact that
this Court chose to require respondent GSIS to
comment is an indication that it is a necessary party. It
must be noted that the law and the rules refer to the
said System in all aspects of employee compensation
(including enforcement of decisions (Article 182 of
Implementing Rules.) (at p. 793).
WHEREFORE, in view of the foregoing, the decision appealed
from is hereby SET ASIDE and the respondent Government
Service Insurance System is hereby ordered to pay the
petitioner:
1) The sum of TWELVE THOUSAND PESOS (P12,000.00)
as death benefits; and
2) The sum of ONE THOUSAND TWO HUNDRED PESOS
(P1,200.00) as attorney's fees.
SO ORDERED.

SECOND DIVISION
G.R. No. 73681 June 30, 1988
COLGATE PALMOLIVE PHILIPPINES, Inc., petitioners, vs.
HON. BLAS F. OPLE, COLGATE PALMOLIVE SALES
UNION, respondents.

PARAS, J.:Before Us is a Petition for certiorari seeking to set

aside and annul the Order of respondent Minister of Labor
and Employment (MOLE) directly certifying private
respondent as the recognized and duly-authorized collective
bargaining agent for petitioner's sales force and ordering the
reinstatement of three employees of petitioner.
Acting on the petition for certiorari with prayer for temporary
restraining order, this Court issued a Temporary Restraining

Order enjoining respondents from enforcing and/or carrying

out the assailed order.

the formation of the Colgate Palmolive Sales Labor

Union which is supposed to represent them;

The antecedent facts are as follows:

(d) The preventive suspensions of salesmen Peregrino

Sayson, Salvador Reynante and Cornelio Mejia, and
their eventual dismissal from the employ of the
company were carried out pursuant to the inherent
right and prerogative of management to discipline
erring employees; that based on the preliminary
investigation conducted by the company, there
appeared substantial grounds to believe that Sayson,
Reynante and Mejia violated company rules and
regulations necessitating their suspension pending
further investigation of their respective cases;

On March 1, 1985, the respondent Union filed a Notice of

Strike with the Bureau of Labor Relations (BLR) on ground of
unfair labor practice consisting of alleged refusal to bargain,
dismissal of union officers/members; and coercing employees
to retract their membership with the union and restraining
non-union members from joining the union.
After efforts at amicable settlement proved unavailing, the
Office of the MOLE, upon petition of petitioner assumed
jurisdiction over the dispute pursuant to Article 264 (g) of the
Labor Code, Thereafter the case was captioned AJML-3-14285, BLR-3-86-85 "In Re: Assumption of Jurisdiction over the
Labor Dispute at Colgate Palmolive Philippines, Inc." In its
position paper, petitioner pointed out that
(a) There is no legal basis for the charge that the
company refused to bargain collectively with the union
considering that the alleged union is not the certified
agent of the company salesmen;
(b) The union's status as a legitimate labor
organization is still under question because on 6 March
1985, a certain Monchito Rosales informed the BLR
that an overwhelming majority of the salesmen are not
in favor of the Notice of Strike allegedly filed by the
Union (Annex "C");
(c) Upon verification of the records of the Ministry of
Labor and Employment, it appeared that a petition for
cancellation of the registration of the alleged union
was filed by Monchito Rosales on behalf of certain
salesmen of the company who are obviously against

(e) It was also ascertained that the company sustained

damages resulting from the infractions committed by
the three salesmen, and that the final results of the
investigation fully convinced the company of the
existence of just causes for the dismissal of the three
salesmen;
(f) The formation of the union and the membership
therein of Sayson, Reynante and Mejia were not in any
manner connected with the company's decision to
dismiss the three; that the fact that their dismissal
came at a time when the alleged union was being
formed was purely coincidental;
(g) The union's charge therefore, that the membership
in the union and refusal to retract precipitated their
dismissal was totally false and amounted to a
malicious imputation of union busting;
(h) The company never coerced or attempted to
coerce employees, much less interfered in the exercise
of their right to self-organization; the company never

thwarted nor tried to defeat or frustrate the

employees' right to form their union in pursuit of their
collective interest, as long as that right is exercised
within the limits prescribed by law; in fact, there are at
present two unions representing the rank and file
employees of the company-the factory workers who
are covered by a CBA which expired on 31 October
1985 (which was renewed on May 31, 1985) and are
represented by Colgate Palmolive Employees Union
(PAFLU); whereas, the salaried employees are covered
by a CBA which will expire on 31 May 1986
represented by Philippine Association of Free Labor
Union (PAFLU)-CPPI Office Chapter. (pp. 4-6, Rollo)
The respondent Union, on the other hand, in its position
paper, reiterated the issue in its Notice to Strike, alleging that
it was duly registered with the Bureau of Labor Relations
under Registry No. 10312-LC with a total membership of 87
regular salesmen (nationwide) out of 117 regular salesmen
presently employed by the company as of November 30,
1985 and that since the registration of the Union up to the
present, more than 2/3 of the total salesmen employed are
already members of the Union, leaving no doubt that the true
sentiment of the salesmen was to form and organize the
Colgate-Palmolive Salesmen Union. The Union further alleged
that the company is unreasonably delaying the recognition of
the union because when it was informed of the organization
of the union, and when presented with a set of proposals for
a collective bargaining agreement, the company took an
adversarial stance by secretly distributing a "survey sheet on
union membership" to newly hired salesmen from the
Visayas, Mindanao and Metro Manila areas, purposely
avoiding regular salesmen who are now members of the
union; that in the accomplishment of the form, District Sales
Managers, and Sales Supervisors coerced salesmen from the
Visayas and Mindanao by requiring them to fill up and/or

accomplish said form by checking answers which were

adverse to the union; that with a handful of the survey
sheets secured by management through coercion, it now
would like to claim that all salesmen are not in favor of the
organization of the union, which acts are clear manifestations
of unfair labor practices.
On August 9,1985, respondent Minister rendered a decision
which:
(a) found no merit in the Union's Complaint for unfair
labor practice allegedly committed by petitioner as
regards the alleged refusal of petitioner to negotiate
with the Union, and the secret distribution of survey
sheets allegedly intended to discourage unionism,
(b) found the three salesmen, Peregrino Sayson,
Salvador Reynante & Cornelio Mejia "not without
fault" and that "the company 1 has grounds to
dismiss above named salesmen"
and at the same time respondent Minister directly certified
the respondent Union as the collective bargaining agent for
the sales force in petitioner company and ordered the
reinstatement of the three salesmen to the company on the
ground that the employees were first offenders.
Petitioner filed a Motion for Reconsideration which was
denied by respondent Minister in his assailed Order, dated
December 27, 1985. Petitioner now comes to Us with the
following:
Assignment of Errors
I

Respondent Minister committed a grave abuse

of discretion when he directly certified the Union
solely on the basis of the latter's self-serving
assertion that it enjoys the support of the
majority of the sales force in petitioner's
company.

II
Respondent Minister committed a grave abuse
of discretion when, notwithstanding his very
own finding that there was just cause for the
dismissal of the three (3) salesmen, he
nevertheless ordered their reinstatement. (pp.
7-8, Rollo)
Petitioner concedes that respondent Minister has the power
to decide a labor dispute in a case assumed by him under
Art. 264 (g) of the Labor Code but this power was exceeded
when he certified respondent Union as the exclusive
bargaining agent of the company's salesmen since this is not
a representation proceeding as described under the Labor
Code. Moreover the Union did not pray for certification but
merely for a finding of unfair labor practice imputed to
petitioner-company.
The petition merits our consideration. The procedure for a
representation case is outlined in Arts. 257-260 of the Labor
Code, in relation to the provisions on cancellation of a Union
registration under Arts. 239-240 thereof, the main purpose of
which is to aid in ascertaining majority representation. The
requirements under the law, specifically Secs. 2, 5, and 6 of
Rule V, Book V, of the Rules Implementing the Labor Code are
all calculated to ensure that the certified bargaining
representative is the true choice of the employees against all

contenders. The Constitutional mandate that the State shall

"assure the rights of the workers to self-organization,
collective bargaining, security of tenure and just and humane
conditions of work," should be achieved under a system of
law such as the aforementioned provisions of the pertinent
statutes. When an overzealous official by-passes the law on
the pretext of retaining a laudable objective, the intendment
or purpose of the law will lose its meaning as the law itself is
disregarded. When respondent Minister directly certified the
Union, he in fact disregarded this procedure and its legal
requirements. There was therefore failure to determine with
legal certainty whether the Union indeed enjoyed majority
representation. Contrary to the respondent Minister's
observation, the holding of a certification election at the
proper time is not necessarily a mere formality as there was
a compelling legal reason not to directly and unilaterally
certify a union whose legitimacy is precisely the object of
litigation in a pending cancellation case filed by certain
"concerned salesmen," who also claim majority status. Even
in a case where a union has filed a petition for certification
elections, the mere fact that no opposition is made does not
warrant a direct certification. More so as in the case at bar,
when the records of the suit show that the required proof was
not presented in an appropriate proceeding and that the
basis of the direct certification was the Union's mere
allegation in its position paper that it has 87 out of 117
regular salesmen. In other words, respondent Minister merely
relied on the self-serving assertion of the respondent Union
that it enjoyed the support of the majority of the salesmen,
without subjecting such assertion to the test of competing
claims. As pointed out by petitioner in its petition, what the
respondent Minister achieved in rendering the assailed
orders was to make a mockery of the procedure provided
under the law for representation cases because:

(a) He has created havoc by impliedly

establishing a procedural short-cut to obtaining
a direct certification-by merely filing a notice of
strike.
(b) By creating such a short-cut, he has officially
encouraged disrespect for the law.
(c) By directly certifying a Union without sufficient
proof of majority representation, he has in effect
arrogated unto himself the right, vested naturally in
the employees, to choose their collective bargaining
representative.
(d) He has in effect imposed upon the petitioner the
obligation to negotiate with a union whose majority
representation is under serious question. This is highly
irregular because while the Union enjoys the blessing
of the Minister, it does not enjoy the blessing of the
employees. Petitioner is therefore under threat of
being held liable for refusing to negotiate with a union
whose right to bargaining status has not been legally
established. (pp. 9-10, Rollo)
The order of the respondent Minister to reinstate the
employees despite a clear finding of guilt on their part is not
in conformity with law. Reinstatement is simply incompatible
with a finding of guilt. Where the totality of the evidence was
sufficient to warrant the dismissal of the employees the law
warrants their dismissal without making any distinction
between a first offender and a habitual delinquent. Under the
law, respondent Minister is duly mandated to equally protect
and respect not only the labor or workers' side but also the
management and/or employers' side. The law, in protecting
the rights of the laborer, authorizes neither oppression nor
self-destruction of the employer. To order the reinstatement
of the erring employees namely, Mejia, Sayson and Reynante

would in effect encourage unequal protection of the laws as a

managerial employee of petitioner company involved in the
same incident was already dismissed and was not ordered to
be reinstated. As stated by Us in the case of San Miguel
Brewery vs. National Labor Union, 2 "an employer cannot
legally be compelled to continue with the employment of a
person who admittedly was guilty of misfeasance or
malfeasance towards his employer, and whose continuance
in the service of the latter is patently inimical to his interest."
In the subject order, respondent Minister cited a
cases 3 implying that "the proximity of the dismissal of the
employees to the assumption order created a doubt as to
whether their dismissal was really for just cause or due to
their activities." 4
This is of no moment for the following reasons:
(a) Respondent Minister has still maintained in his assailed
order that a just cause existed to justify the dismissal of the
employees.
(b) Respondent Minister has not made any finding
substantiated by evidence that the employees were
dismissed because of their union activities.
WHEREFORE, judgment is hereby rendered REVERSING and
SETTING ASIDE the Order of the respondent Minister, dated
December 27, 1985 for grave abuse of discretion. However,
in view of the fact that the dismissed employees are first
offenders, petitioner is hereby ordered to give them
separation pay. The temporary restraining order is hereby
made permanent.
SO ORDERED.

THIRD DIVISION
[G.R. No. 125340. September 17, 1998]
EMELITA NICARIO, petitioner, vs. NATIONAL LABOR
RELATIONS
COMMISSION,
MANCAO
SUPERMARKET
INC.,
AND/OR
MANAGER,
ANTONIO MANCAO,respondents.
DECISION
ROMERO, J.:
For resolution before this Court is a special civil action
for certiorari under Ruled 65 of the Rules of Court which
seeks to set aside the resolution of the National Labor
Relations Commission (Fifth Division, Cagayan de Oro City)
dated December 21, 1995 in NLRC CA No. M-002047-94
entitled Emelita Nicario v. Mancao Supermarket Inc. and/or
Manager which ruled that petitioner, Emelita Nicario, is not
entitled to overtime pay. Nor is private respondent, Antonio
Mancao jointly and severally liable with the respondent
company for thirteenth month pay, service incentive leave
pay, and rest day pay.[1]

Petitioner, Emelita Nicario, was employed with

respondent company Mancao Supermarket, on June 6, 1986
as a salesgirl and was later on promoted as sales
supervisor. However, private respondent terminated her
services on February 7, 1989.
A complaint for illegal dismissal with prayer for
backwages, wage differential, service incentive leave pay,
overtime pay, 13th month pay and unpaid wages was filed by
petitioner before the National Labor Relations Commission,
Sub-Regional Arbitration Branch X in Butuan City.
On July 25, 1989, Labor Arbiter Amado M. Solamo
dismissed the complaint for lack of merit. Petitioner appealed
to the National Labor Relations Commission (NLRC), Fifth
Division, Cagayan de Oro City. In a resolution dated July 25,
1989, the NLRC set aside the labor arbiters decision for lack
of due process. It ruled that since petitioner assailed her
supposed signatures appearing on the payrolls presented by
the company as a forgery, the labor arbiter should not have
merely depended on the xerox copies of the payrolls, as
submitted in evidence by the private respondent but ordered
a formal hearing on the issue. Thus, the Commission ordered
the case remanded to the arbitration branch for appropriate
proceedings. The case was assigned to Labor Arbiter Marissa
Macaraig-Guillen.[2]
In a decision dated May 23, 1994, Labor Arbiter
Macaraig-Guillen awarded petitioners claims for unpaid
service incentive leave pay, 13th month pay, overtime pay
and rest day pay for the entire period of her employment, but
dismissed her claims for holiday premium pay and unpaid
salaries from February 3 to 5, 1989. The dispositive portion of
the decision read as follows:
WHEREFORE, in view of the foregoing, judgment is
rendered directing respondent Mancao Supermarket,

Inc., and/or Mr. Antonio Mancao to pay complainant

Emelita Nicario the sum of forty thousand three
hundred ninety pesos and fifteen
centavos (P40,393.15) representing unpaid services
incentive leave pay, thirteenth month pay, overtime
pay, and rest day for the entire period of employment.
All other claims are dismissed for lack of merit.
SO ORDERED.[3]
Not satisfied with the decision, private respondent
appealed to the NLRC, and in a resolution dated August 16,
1995,[4] the Commission affirmed in toto Labor Arbiter
Macaraig-Guillens decision. Private respondent then filed a
motion for reconsideration. In a resolution dated December
21, 1995, public respondent NLRC modified its earlier
resolution by deleting the award for overtime pay and ruling
that private respondent Antonio Mancao is not jointly and
severally liable with Mancao Supermarket to pay petitioner
the monetary award adjudged.
Petitioner now comes before this Court alleging grave
abuse of discretion on the part of the public respondent NLRC
in ruling that (a) she is not entitled to overtime pay and (b)
private respondent, Antonio Mancao cannot be held jointly
and severally liable with respondent supermarket as to the
monetary award.
The Solicitor General, in a manifestation and motion in
lieu of comment[5] stated that public respondent NLRC acted
with grave abuse of discretion in modifying its earlier
resolution (dated August 16, 1995) and thus recommends
that the December 21, 1995 resolution be set aside, and its
August 16, 1995 resolution be reinstated.

Public respondent NLRC, on the other hand, filed its own

comment[6] praying for the dismissal of the petition and for
the December 21, 1995 resolution to be affirmed with finality.
The petition is partly impressed with merit.

xxx xxx xxx

e) they would make it appear that petitioner has a
two-hour rest period from 12:00 to 2:00 p.m.,
this is highly unusual for a store
establishment because employees should
attend to customers almost every minute as
well as contrary to the judicial notice that no
noon break is observed.

In her claim for payment of overtime pay, petitioner

alleged that during her period of employment, she worked
twelve (12) hours a day from 7:30 a.m. to 7:30 p.m., thus
rendering overtime work for four hours each day. Labor
Arbiter Macaraig-Guillen, in her decision dated May 23, 1994,
awarded overtime pay to petitioner by taking judicial notice
of the fact that all Mancao establishments open at 8:00 a.m.
and close at 8:00 p.m.. Upon appeal, this particular finding
was affirmed by the Commission. However, when private
respondent filed a motion for reconsideration from the
resolution dated August 16, 1995, the NLRC modified its
earlier ruling and deleted the award for overtime pay. Public
respondent NLRC instead gave credence to the daily time
records (DTRs) presented by respondent corporation showing
that petitioner throughout her employment from June 6, 1986
to February 1989, worked only for eight hours a day from
9:00 a.m. to 12:00 p.m. and 2:00 p.m. to 7:00 p.m., and did
not render work on her rest days.

Labor Arbiter Macaraig-Guillen, in taking judicial

cognizance of the fact that private respondent company
opens twelve (12) hours a day, the same number of hours
worked by petitioner everyday, applied Rule 129, Section 2 of
the Rules of Court which provides that a court may take
judicial notice of matters which are of public knowledge, or
are capable of unquestionable demonstration, or ought to be
known because of their judicial functions. In awarding
overtime pay to petitioner, the labor arbiter ruled:

Public respondents reliance on the daily time records

submitted by private respondent is misplaced. As aptly
stated by the Solicitor General in lieu of comment, the DTRs
presented by respondent company are unreliable based on
the following observations:

However, it is of judicial notice that all Mancao

establishments open at eight a.m. and close at eight
p.m. with no noon break, so it is believable that
employees rendered 4-1/2 hours of overtime
everyday, 7 days a week.[8]

a) the originals thereof were not presented in

evidence; petitioners allegation of forgery
should have prompted respondent to submit
the same for inspection; evidence wilfully
suppressed would be adverse if produced
(Sec. 3(e), Rule 131, Rules of Court)

f) petitioner never reported earlier or later than

9:00 a.m., likewise she never went home
earlier or later than 8:00 pm; all entries are
suspiciously consistent.[7]

Generally, findings of facts of quasi-judicial agencies like

the NLRC are accorded great respect and at times even
finality if supported by substantial evidence. [9] Substantial
evidence is such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a
conclusion. However in cases where there is a conflict

between the factual findings of the NLRC and the labor

arbiter, a review of such factual findings is necessitated. [10]
While private respondent company submitted the daily
time records of the petitioner to show that she rendered work
for only eight (8) hours a day, it did not refute nor seek to
disprove the judicial notice taken by Labor Arbiter MacaraigGuillen
that
Mancao
establishments,
including
the
establishment where petitioner worked, opens twelve hours a
day, opening at 8:00 a.m. and closing at 8:00 p.m.
This Court, in previously evaluating the evidentiary value
of daily time records, especially those which show uniform
entries with regard to the hours of work rendered by an
employee, has ruled that such unvarying recording of a daily
time record is improbable and contrary to human
experience. It is impossible for an employee to arrive at the
workplace and leave at exactly the same time, day in day
out. The uniformity and regularity of the entries are badges
of untruthfulness and as such indices of dubiety. [11] The
observations made by the Solicitor General regarding the
unreliability of the daily time records would therefore seem
more convincing. On the other hand, respondent company
failed to present substantial evidence, other than the
disputed DTRs, to prove that petitioner indeed worked for
only eight hours a day.
It is a well-settled doctrine, that if doubts exist between
the evidence presented by the employer and the employee,
the scales of justice must be tilted in favor of the latter. It is a
time-honored rule that in controversies between a laborer
and his master, doubts reasonably arising from the evidence,
or in the interpretation of agreements and writing should be
resolved in the formers favor.[12] The policy is to extend the
doctrine to a greater number of employees who can avail of
the benefits under the law, which is in consonance with the
avowed policy of the State to give maximum aid and

protection of labor.[13] This rule should be applied in the case

at bar, especially since the evidence presented by the private
respondent company is not convincing. Accordingly, we
uphold the finding that petitioner rendered overtime work,
entitling her to overtime pay.
As to the liability of private respondent Antonio Mancao,
petitioner
contends
that
as
manager
of
Mancao
establishment, he should be jointly and severally liable with
respondent corporation as to the monetary award adjudged.
The general rule is that officers of a corporation are not
personally liable for their official acts unless it is shown that
they have exceeded their authority. However, the legal fiction
that a corporation has a personality separate and distinct
from stockholders and members may be disregarded if it is
used as a means to perpetuate fraud or an illegal act or as a
vehicle for the evasion of an existing obligation, the
circumvention of statutes, or to confuse legitimate issues. [14]
In this case, there is no showing that Antonio Mancao, as
manager of respondent company, deliberately and
maliciously evaded the respondent's company financial
obligation to the petitioner. Hence, there appearing to be no
evidence on record that Antonio Mancao acted maliciously or
deliberately in the non-payment of benefits to petitioner, he
cannot be held jointly and severally liable with Mancao
supermarket.
WHEREFORE, in view of the foregoing, the instant
petition is hereby PARTIALLY GRANTED. Accordingly, the
resolution of the NLRC dated December 21, 1995 in NLRC
NCR CA No. M-002047-94 is hereby MODIFIED by awarding
petitioner, Emelita Nicario her overtime pay and relieving
private respondent, Antonio Mancao, of any liability as
manager of Mancao Supermarket and further holding Mancao
Supermarket solely liable. No costs.

SO ORDERED.

THIRD DIVISION
[G.R. No. 122955. April 15, 1998]
ST. THERESAS SCHOOL OF NOVALICHES FOUNDATION
and
ADORACION
ROXAS, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION
and ESTHER REYES, respondents.
DECISION
PURISIMA, J.:

Justitia nemini neganda est. Justice is to be denied to

none. The law, while protecting the rights of the employees,
authorizes neither the oppression nor destruction of the
employer.[1] When the law angles the scale of justice in favor
of labor, the scale should never be so tilted if the result is an
injustice to the employer.[2]
The petition at bench seeks to modify the Resolution
issued on November 29, 1994 by the National Labor
Relations Commission (NLRC) and its Decision of 29
November, 1995 in NLRC NCR Case No. 00-6078-94.
Petitioners contend that the public respondent acted with
grave abuse of discretion amounting to lack or excess of
jurisdiction in handing down its disposition wherein,
notwithstanding the finding that the dismissal of private
respondent was valid, it awarded backwages for the latter,
computed from November 12, 1993 up to the time of
rendition of the decision under attack.
Undisputed are the following facts:
Petitioner Adoracion Roxas is the president of St. Theresas
School of Novaliches Foundation. She hired private
respondent, Esther Reyes, on a contract basis, for the period
from June 1, 1991 to March 31, 1992. However, private
respondent commenced work on May 2, 1991. During the
said period of employment, private respondent became
ill. She went on a leave of absence from February 17 to 21
and from February 24 to 28, 1992, such leave of absence
having been duly approved by petitioner Roxas. On March 2,
1992, private respondent reported for work, but she only
stayed in her place of work from 6:48 to 9:38
a.m. Thereafter, she never returned. For what reason did
private respondent stop working?

Petitioners theorize that the private respondent abandoned

her work. On the other hand, the latter maintains that she
was replaced. When she went back to work on February 20,
1992, she found out that her table, chair, and other
belongings were moved to a corner of their office, and she
was replaced by Annie Roxas, daughter of petitioner
Adoracion Roxas. She tried to contact her employer but the
latter could not be found within the school premises.
On March 25, 1992, petitioners sent private respondent a
letter by registered mail, informing her that her contract, due
to expire on March 31, 1992, would not be renewed. Prior
thereto, or on March 3, 1992, to be precise, the private
respondent instituted NLRC NCR Case No. 00-03-0148192[3] against the herein petitioners for unfair labor practice
based on harassment, illegal dismissal, 13th month pay,
allowances, removal of desk and chair form place of work,
and refusal to communicate, moral and exemplary damages.
[4]
On November 12, 1993, absent any amicable settlement
hammered out by the parties, the Labor Arbiter came out
with a decision, disposing, thus:
WHEREFORE, responsive to the foregoing, judgment is
hereby ordered declaring complainant (sic) dismissal from
the service illegal. Respondent is hereby ordered to reinstate
complainant to her former position without loss of seniority
rights and to pay for full backwages from the time of
dismissal to her actual reinstatement in the amount of
Seventy Six Thousand Seven Hundred One (P76,701.00)
Pesos.
Respondent is hereby ordered to pay complainant P25,000
as moral damages and P10,000 by way of exemplary
damages.
Respondent (sic) are further assessed attorneys fees of 10%
of the award.

On December 7, 1993, after posting the necessary

supersedeas bond, petitioners appealed the aforesaid
decision to the NLRC.

On November 29, 1995, the same Second Division of NLRC

rendered its challenged Decision, denying subject motions for
reconsideration.

On January 12, 1994, private respondent presented a Motion

for Partial Execution of the reinstatement aspect of the Labor
Arbiters decision.

Sometime in February 1996, the private respondent filed with

NLRC a Motion for Execution, through the deciding Labor
Arbiter. But until now, no writ of execution
issued. Unfortunately for private respondent, she never
interposed any appeal from NLRCs ruling, upholding the
validity of her dismissal. It is therefore settled, beyond the
reach of this courts power of review, that private respondents
employment was validly terminated.

On April 5, 1994, when no action was taken by the Labor

Arbiter on her motion, she filed a Motion for Immediate
Resolution, and, on July 13, 1994, after three months, still
without any action taken by the same Labor Arbiter on her
yearning, the private respondent sent in a second Motion for
Immediate Resolution. However, Labor Arbiter Raul T. Aquino
was appointed as Commissioner of the NLRC, thereby leaving
subject motions of private respondent unresolved.

On the part of petitioners, they have come here to

question the award of backwages for the private respondent,
whose dismissal has been upheld with finality.

On November 29, 1994, petitioners appeal, docketed as

NLRC NCR Case No. 006078-94, was resolved in the assailed
Resolution of the of the Second Division of the NLRC;
disposing, as follows:

Before delving into and passing upon the propriety of the

assailed award of backwages, which is the core of the Petition
before us, the court takes note of the undisputed fact that
private respondent was employed on a contract basis.

WHEREFORE, all premises considered, the decision of the

Labor Arbiter below dated November 12, 1993 is hereby
reversed and set aside and another one rendered, declaring
the separation of Esther Reyes from service legal and valid.

Article 280 of the Labor Code does not proscribe or

prohibit an employment contract with a fixed period provided
the same is entered into by the parties, without any force,
duress or improper pressure being brought to bear upon the
employee and absent any other circumstance vitiating
consent. It does not necessarily follow that where the duties
of the employee consist of activities usually necessary or
desirable in the usual business of the employer, the parties
are forbidden from agreeing on a period of time for the
performance of such activities. There is thus nothing
essentially contradictory between a definite period of
employment and the nature of the employees duties. [5]

However, respondent is directed to pay the backwages of

herein complainant from November 12, 1993 up to the date
of the promulgation of this Resolution.
Therefrom, both parties moved for reconsideration;
petitioners assailing the award of backwages in favor of
private respondent.

It goes without saying that contracts of employment

govern the relationship of the parties. In this case, private

respondents contract provided for a fixed term of nine (9)

months, from June 1, 1991 to March 31, 1992. Such
stipulation, not being contrary to law, morals, good customs,
public order and public policy, is valid, binding and must be
respected.[6]
It bears stressing that private teachers are subject to
special rules with respect to requisites for their permanent
employment and security of tenure, to wit:
1. He must be a full time teacher;
2. He must have rendered at least three consecutive years of
service; and,

Jurisprudence is filled to the brim with cases wherein

backwages were awarded to an employee illegally dismissed.
[13]
But where, as in this case of a pitiful employee rendered
hapless by her lawyers inaction or ignorance, the dismissal
has been adjudged valid and lawful, the challenged award of
backwages is decidedly improper and contrary to law and
jurisprudence.
WHEREFORE, the Petition is GRANTED; the Decision of
the respondent NLRC rendered on November 29, 1995 in
NLRC NCR Case No. 00-6078-94 is hereby MODIFIED by
deleting therefrom the award of backwages in question. No
pronouncement as to costs.
SO ORDERED.

3. Such service must be satisfactory. [7]

This is in accord with the Manual of Regulations for Private
Schools issued by the then Department of Education. [8]
We now tackle the pivotal point of inquiry - the award of
backwages in favor of private respondent. Is it proper in light
of the finding that her dismissal was valid?
The term backwages has been defined as that for
earnings lost by a worker due to his illegal dismissal.
[9]
Backwages are generally granted on grounds of equity.
[10]
Payment thereof is a form of relief that restores the
income lost by reason of such unlawful dismissal. [11] It is not
private compensation or damages, but is awarded in
furtherance and effectuation of the public objectives of the
Labor Code. Nor is it a redress of a private right but, rather,
in the nature of a command to the employer to make public
reparation for dismissing an employee, either due to the
formers unlawful act or bad faith.[12]

SECOND DIVISION
[G.R. No. 153660. June 10, 2003]
PRUDENCIO BANTOLINO, et. al.,, petitioners, vs. COCA-COLA
BOTTLERS PHILS., INC., respondent.
DECISION
BELLOSILLO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court assailing the Decision of the Court of Appeals [1] dated
21 December 2001 which affirmed with modification the decision of
the National Labor Relations Commission promulgated 30 March
2001.[2]
On 15 February 1995 sixty-two (62) employees of respondent
Coca-Cola Bottlers, Inc., and its officers, Lipercon Services, Inc.,

Peoples Specialist Services, Inc., and Interim Services, Inc., filed a

complaint against respondents for unfair labor practice through
illegal dismissal, violation of their security of tenure and the
perpetuation of the Cabo System. They thus prayed for
reinstatement with full back wages, and the declaration of their
regular employment status.
For failure to prosecute as they failed to either attend the
scheduled mandatory conferences or submit their respective
affidavits, the claims of fifty-two (52) complainant-employees were
dismissed. Thereafter, Labor Arbiter Jose De Vera conducted
clarificatory hearings to elicit information from the ten (10)
remaining complainants (petitioners herein) relative to their alleged
employment with respondent firm.
In substance, the complainants averred that in the
performance of their duties as route helpers, bottle segregators,
and others, they were employees of respondent Coca-Cola Bottlers,
Inc. They further maintained that when respondent company
replaced them and prevented them from entering the company
premises, they were deemed to have been illegally dismissed.
In lieu of a position paper, respondent company filed a motion
to dismiss complaint for lack of jurisdiction and cause of action,
there being no employer-employee relationship between
complainants and Coca-Cola Bottlers, Inc., and that respondents
Lipercon Services, Peoples Specialist Services and Interim Services
being bona fide independent contractors, were the real employers
of the complainants.[3] As regards the corporate officers, respondent
insisted that they could not be faulted and be held liable for
damages as they only acted in their official capacities while
performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision
ordering respondent company to reinstate complainants to their
former positions with all the rights, privileges and benefits due
regular employees, and to pay their full back wages which, with the
exception of Prudencio Bantolino whose back wages must be
computed upon proof of his dismissal as of 31 May 1998, already
amounted to an aggregate of P1,810,244.00.[4]

In finding for the complainants, the Labor Arbiter ruled that in

contrast with the negative declarations of respondent companys
witnesses who, as district sales supervisors of respondent company
denied knowing the complainants personally, the testimonies of the
complainants were more credible as they sufficiently supplied every
detail of their employment, specifically identifying who their
salesmen/drivers were, their places of assignment, aside from their
dates of engagement and dismissal.
On appeal, the NLRC sustained the finding of the Labor Arbiter
that there was indeed an employer-employee relationship between
the complainants and respondent company when it affirmedin
toto the latters decision.
In a resolution dated 17 July 2001 the NLRC subsequently
denied for lack of merit respondents motion for consideration.
Respondent Coca-Cola Bottlers appealed to the Court of
Appeals which, although affirming the finding of the NLRC that an
employer-employee relationship existed between the contending
parties, nonetheless agreed with respondent that the affidavits of
some of the complainants, namely, Prudencio Bantolino, Nestor
Romero, Nilo Espina, Ricardo Bartolome, Eluver Garcia, Eduardo
Garcia and Nelson Manalastas, should not have been given
probative value for their failure to affirm the contents thereof and
to undergo cross-examination. As a consequence, the appellate
court dismissed their complaints for lack of sufficient evidence. In
the same Decision however, complainants Eddie Ladica, Arman
Queling and Rolando Nieto were declared regular employees since
they were the only ones subjected to cross-examination. [5] Thus x x x (T)he labor arbiter conducted clarificatory hearings to ferret
out the truth between the opposing claims of the parties thereto.
He did not submit the case based on position papers and their
accompanying documentary evidence as a full-blown trial was
imperative to establish the parties claims. As their allegations were
poles apart, it was necessary to give them ample opportunity to
rebut each others statements through cross-examination. In fact,
private respondents Ladica, Quelling and Nieto were subjected to
rigid cross-examination by petitioners counsel. However, the

testimonies of private respondents Romero, Espina, and Bantolino

were not subjected to cross-examination, as should have been the
case, and no explanation was offered by them or by the labor
arbiter as to why this was dispensed with. Since they were
represented by counsel, the latter should have taken steps so as
not to squander their testimonies. But nothing was done by their
counsel to that effect.[6]
Petitioners now pray for relief from the adverse Decision of the
Court of Appeals; that, instead, the favorable judgment of the NLRC
be reinstated.
In essence, petitioners argue that the Court of Appeals should
not have given weight to respondents claim of failure to crossexamine them. They insist that, unlike regular courts, labor cases
are decided based merely on the parties position papers and
affidavits in support of their allegations and subsequent pleadings
that may be filed thereto. As such, according to petitioners, the
Rules of Court should not be strictly applied in this case specifically
by putting them on the witness stand to be cross-examined
because the NLRC has its own rules of procedure which were
applied by the Labor Arbiter in coming up with a decision in their
favor.
In its disavowal of liability, respondent commented that since
the other alleged affiants were not presented in court to affirm their
statements, much less to be cross-examined, their affidavits
should, as the Court of Appeals rightly held, be stricken off the
records for being self-serving, hearsay and inadmissible in
evidence. With respect to Nestor Romero, respondent points out
that he should not have been impleaded in the instant petition
since he already voluntarily executed a Compromise Agreement,
Waiver and Quitclaim in consideration of P450,000.00. Finally,
respondent argues that the instant petition should be dismissed in
view of the failure of petitioners[7] to sign the petition as well as the
verification and certification of non-forum shopping, in clear
violation of the principle laid down in Loquias v. Office of the
Ombudsman.[8]

The crux of the controversy revolves around the propriety of

giving evidentiary value to the affidavits despite the failure of the
affiants to affirm their contents and undergo the test of crossexamination.
The petition is impressed with merit. The issue confronting the
Court is not without precedent in jurisprudence. The oft-cited case
of Rabago v. NLRC[9] squarely grapples a similar challenge involving
the propriety of the use of affidavits without the presentation of
affiants for cross-examination. In that case, we held that the
argument that the affidavit is hearsay because the affiants were
not presented for cross-examination is not persuasive because the
rules of evidence are not strictly observed in proceedings before
administrative bodies like the NLRC where decisions may be
reached on the basis of position papers only.
In Rase v. NLRC,[10] this Court likewise sidelined a similar
challenge when it ruled that it was not necessary for the affiants to
appear and testify and be cross-examined by counsel for the
adverse party. To require otherwise would be to negate the
rationale and purpose of the summary nature of the proceedings
mandated by the Rules and to make mandatory the application of
the technical rules of evidence.
Southern
Cotabato
Dev.
and
Construction
Co.
v.
[11]
NLRC
succinctly states that under Art. 221 of the Labor Code, the
rules of evidence prevailing in courts of law do not control
proceedings before the Labor Arbiter and the NLRC. Further, it
notes that the Labor Arbiter and the NLRC are authorized to adopt
reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law and
procedure, all in the interest of due process. We find no compelling
reason to deviate therefrom.
To reiterate, administrative bodies like the NLRC are not bound
by the technical niceties of law and procedure and the rules
obtaining in courts of law. Indeed, the Revised Rules of Court and
prevailing jurisprudence may be given only stringent application,
i.e., by analogy or in a suppletory character and effect. The
submission by respondent, citing People v. Sorrel,[12] that an

affidavit not testified to in a trial, is mere hearsay evidence and has

no real evidentiary value, cannot find relevance in the present case
considering that a criminal prosecution requires a quantum of
evidence different from that of an administrative proceeding. Under
the Rules of the Commission, the Labor Arbiter is given the
discretion to determine the necessity of a formal trial or hearing.
Hence, trial-type hearings are not even required as the cases may
be decided based on verified position papers, with supporting
documents and their affidavits.
As to whether petitioner Nestor Romero should be properly
impleaded in the instant case, we only need to follow the doctrinal
guidance set by Periquet v. NLRC[13] which outlines the parameters
for valid compromise agreements, waivers and quitclaims Not all waivers and quitclaims are invalid as against public policy. If
the agreement was voluntarily entered into and represents a
reasonable settlement, it is binding on the parties and may not
later be disowned simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the person
making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as a
valid and binding undertaking.
In closely examining the subject agreements, we find that on
their face the Compromise Agreement[14] and Release, Waiver and
Quitclaim[15] are devoid of any palpable inequity as the terms of
settlement therein are fair and just. Neither can we glean from the
records any attempt by the parties to renege on their contractual
agreements, or to disavow or disown their due execution.
Consequently, the same must be recognized as valid and binding
transactions and, accordingly, the instant case should be dismissed
and finally terminated insofar as concerns petitioner Nestor
Romero.

We cannot likewise accommodate respondents contention that

the failure of all the petitioners to sign the petition as well as the
Verification and Certification of Non-Forum Shopping in
contravention of Sec. 5, Rule 7, of the Rules of Court will cause the
dismissal of the present appeal. While the Loquias case requires
the strict observance of the Rules, it however provides an escape
hatch for the transgressor to avoid the harsh consequences of nonobservance. Thus x x x x We find that substantial compliance will not suffice in a
matter involving strict observance of the rules. The attestation
contained in the certification on non-forum shopping requires
personal knowledge by the party who executed the
same. Petitioners must show reasonable cause for failure to
personally sign the certification. Utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal
construction (underscoring supplied).
In
their Ex
Parte
Motion
to
Litigate
as
Pauper
Litigants, petitioners made a request for a fifteen (15)-day
extension, i.e., from 24 April 2002 to 8 May 2002, within which to
file their petition for review in view of the absence of a counsel to
represent them.[16] The records also reveal that it was only on 10
July 2002 that Atty. Arnold Cacho, through the UST Legal Aid Clinic,
made his formal entry of appearance as counsel for herein
petitioners. Clearly, at the time the instant petition was filed on 7
May 2002 petitioners were not yet represented by counsel. Surely,
petitioners who are non-lawyers could not be faulted for the
procedural lapse since they could not be expected to be conversant
with the nuances of the law, much less knowledgeable with the
esoteric technicalities of procedure. For this reason alone, the
procedural infirmity in the filing of the present petition may be
overlooked and should not be taken against petitioners.
WHEREFORE, the petition is GRANTED. The Decision of the
Court of Appeals is REVERSED and SET ASIDE and the decision of
the NLRC dated 30 March 2001 which affirmed in toto the decision
of the Labor Arbiter dated 29 May 1998 ordering respondent CocaCola Bottlers Phils., Inc., to reinstate Prudencio Bantolino, Nilo
Espina, Eddie Ladica, Arman Queling, Rolando Nieto, Ricardo

Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas to

their former positions as regular employees, and to pay them their
full back wages, with the exception of Prudencio Bantolino whose
back wages are yet to be computed upon proof of his dismissal, is
REINSTATED, with the MODIFICATION that herein petition is DENIED
insofar as it concerns Nestor Romero who entered into a valid and
binding Compromise
Agreement and Release,
Waiver
and
Quitclaim with respondent company.
SO ORDERED.

DECISION
DAVIDE, JR., C.J.:
In this petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, petitioners assail the
dismissal by the Court of Appeals of their petition
for certiorari for having been filed beyond the sixty-day
reglementary period.
Respondent Edwin V. Galan was an employee of
petitioner Pfizer, Inc., a drug manufacturer. He was initially
hired in August 1982 as a professional sales representative,
commonly known as a medical representative. He was a
recipient of several company awards, which eventually
resulted in his promotion as District Manager for Mindanao in
1996. He continued to reap more awards as he exceeded
sales targets.

FIRST DIVISION
[G.R. No. 143389. May 25, 2001]
PFIZER INC., MA. ANGELICA B. LLEANDER and SANDRA
WEBB, petitioners,
vs.
EDWIN
V.
GALAN, respondent.

In September 1997, respondent was recalled to Manila to

meet with his superiors. In the meeting, the sales manager of
Pfizer, Inc., issued a memorandum requiring him to explain
his alleged unauthorized use of, and questionable expense
claims made on, the company vehicle, as well as the doubtful
liquidation of his cash advance of US$5,000 for a recent
official trip to Indonesia. After the submission of his
explanation, a formal hearing on the charges was set. In the
meantime, respondent was placed under preventive
suspension and was advised to seek legal assistance. On
October 1998, after the conclusion of the hearing,
respondent received a notice of termination signed by Pfizers
co-petitioner Ma. Angelica B. Lleander. The cause for his
dismissal was loss of trust and confidence.
Respondent then filed a complaint for illegal dismissal
against petitioners before the National Labor Relations
Commission (NLRC) Regional Arbitration Branch No. 9 in

Zamboanga City. He demanded his reinstatement or

separation pay; the payment of back wages, thirteenthmonth pay, and bonuses; the reimbursement of expenses
and incentives; and the payment of moral and exemplary
damages and attorneys fees.Sandra Webb and Ma. Angelica
Lleander were impleaded as respondents in their capacities
as Country Manager and Employee Resources Director,
respectively, of Pfizer, Inc. The case was docketed as NLRC
Case No. RAB-09-02-00048-98.

We made a second look at the records. It is obvious to Us

that the Petition for Certiorari was filed beyond the 60-day
reglementary period, and is hereby DISMISSED. Consider
these:

In a Decision[1] rendered on 14 August 1998, Labor

Arbiter Rhett Julius Plagata declared that respondent was
illegally dismissed and ordered Pfizer, Inc., to pay him back
wages, separation pay, thirteenth month pay, incentives and
bonuses, reimbursement of expenses and attorneys fees.
Respondents monetary award totalled P2,052,013.50.

2) The Order dated April 29, 1999, denying the

Motion for Reconsideration was received on May
13, 1999. Herein petition, in turn, was received by
the Court already on July 12, 1999.

Petitioners appealed from the decision to the NLRC in

Cagayan de Oro City. In its Resolution[2]of 17 December 1998,
the NLRC affirmed the decision of the Labor Arbiter. A copy of
the Resolution was received by petitioners on 29 December
1998. On 8 January 1999, petitioners filed a motion for
reconsideration, which was denied by the NLRC in its
Resolution[3] of 29 April 1999. Petitioners received a copy of
the latter Resolution on 13 May 1999.
On 5 July 1999, the NLRC decreed the entry of
judgment[4] of the case, and upon respondents motion, issued
a writ of execution[5] on 3 August 1999.
Meanwhile, on 12 July 1999, or prior to the issuance of a
writ of execution, petitioners filed with the Court of Appeals a
petition for certiorari assailing the aforementioned NLRC
Resolutions. In its Resolution[6]of 11 August 1999 the Court of
Appeals required the NLRC and respondent Galan to
comment on the petition. However, on 11 November 1999 it
issued the challenged resolution,[7] which reads as follows:

1) The December 17, 1998 contested Resolution was

received on December 29, 1998. On January 8,
1999, the Motion for Reconsideration was filed,
meaning, after a period of ten (10) days.

3) From May 13, 1999, up to and until July 12, 1999,

computation wise, is already a period of 60
days. Adding ten (10) days would mean a total of
seventy (70) days.
Aside from that, the Verification that was executed by Ma.
Cleofe R. Legaspi, supposedly an Employment Specialist of
Pfizer, Inc., was not properly executed. While she alleges
being one of the petitioners (Rollo, p. 41) actually she is
not. As a matter of fact, the parties (Ibid., p. 4), as
petitioners, were only Pfizer, Inc., Ma. Angeles Lleander, and
Sandra Webb. Miss Cleofe Legaspi certainly cannot be
treated as one of the petitioners.
Petitioners moved to reconsider the Resolution. However,
in its Resolution[8]of 25 May 2000, the Court of Appeals
denied the motion for reconsideration.
Petitioners then filed the herein petition invoking Rule 1,
Section 6, of the 1997 Rules of Civil Procedure, which
provides for the liberal construction of procedural rules. They
also cite cases where we allowed the suspension of

procedural rules to adhere to substantial justice. They claim

that Section 4, Rule 65 of the 1997 Rules of Civil Procedure
originally provided:
SEC. 4. Where and when petition to be filed. The petition may
be filed not later than sixty (60) days from notice of the
judgment, order or resolution sought to be assailed in the
Supreme Court or, if it relates to the acts or omissions of a
lower court or of a corporation, board, officer or person, in
the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also
be filed in the Court of Appeals whether or not the same is in
aid of its jurisdiction, or in the Sandiganbayan if it is in aid of
its jurisdiction. If it involves the acts or omissions of a quasijudicial agency, and unless otherwise provided by law or
these Rules, the petition shall be filed in and cognizable only
by the Court of Appeals.
In the Courts En Banc Resolution of 21 July 1998 in Bar
Matter No. 803, the section was amended by adding the
following paragraph:
If the petitioner had filed a motion for new trial or
reconsideration in due time after notice of said judgment,
order or resolution the period herein fixed shall be
interrupted. If the motion is denied, the aggrieved party may
file the petition within the remaining period, but which shall
not be less than five (5) days in any event, reckoned from
notice of such denial. No extension of time to file the petition
shall be granted except for the most compelling reason and
in no case to exceed fifteen (15) days.
The amendment took effect on 1 September 1998. It was
published in the 26 July 1998 issues of the Manila
Bulletin, Philippine Daily Inquirer and Philippine Star.

Petitioners assert that the publication of the amendment

was not accorded wide dissemination unlike previous
amendments of the rules on procedure, such as the 1997
Rules of Civil Procedure. When their petition for certiorari was
filed before the Court of Appeals, their counsel relied on the
original provision of Section 4, Rule 65 of the 1997 Rules of
Civil Procedure. Such an honest mistake is excusable and
should not prejudice the merit of their case.
Petitioners also call our attention to the implementation
of Section 11, Rule 13 of the 1997 Rules of Civil Procedure,
which allows a party to explain the failure to effect a personal
filing of a pleading in court or personal service thereof to an
adverse party. The said Rules took effect on 1 July 1997, but
because of the failure of many parties and counsel to comply
with it due to ignorance, we declared in Solar Team
Entertainment, Inc. v. Ricafort[9] that strict compliance with
the said provision should be required after one month from
the promulgation of our decision, or two years from the time
the Rules actually took effect.Petitioners then urge us to
accord their case with the consideration we conceded
in Solar Team.
In his comment respondent Galan seeks the dismissal of
the petition. He maintains that the Court of Appeals was
correct in dismissing the petition for certiorari for having
been filed out of time in light of the amendment of Section 4,
Rule 65 of the Rules of Court. The ignorance of petitioners
counsel should not be used to prevent the execution of the
judgment of the NLRC. While respondent agrees that
procedural rules should be liberally construed, he,
nonetheless, contends that provisions on reglementary
periods should be strictly applied since they are
indispensable in preventing needless delays and are
necessary to ensure orderly and speedy discharge of judicial
business. He also cites jurisprudence where we declared

strict compliance with those provisions, especially those

involving
the
manner
and
period
for
perfecting
appeals. Respondent
further
notes
that
petitioners
conveniently ignored the Court of Appeals observation that
the verification of its petition was fatally defective.
In their reply to the respondents comment, petitioners
underscore that in the entire proceedings from the Labor
Arbiter up to the NLRC, they had seasonably filed their
pleadings. Moreover, if the original provision of Section 4,
Rule 65 of the 1997 Rules of Civil Procedure would be
observed, they could be deemed to have complied with the
mandated period for the filing a petition for certiorari. They
reaffirm our pronouncements that in labor cases the rules on
technicality must yield to the broader interest of substantial
justice, especially in this case where there is an unwarranted
monetary award to respondent. They also fault the NLRC in
failing to appreciate the overwhelming evidence in their
favor.
Finally, petitioners cite the Courts En Banc Resolution in
Administrative Matter No. 00-2-03-SC, which took effect on 1
September 2000. The resolution amends Section 4 of Rule 65
of the 1997 Rules of Civil Procedure, and as amended it
reads:
Sec. 4. When and where petition filed. - The petition shall be
filed not later than sixty (60) days from notice of judgment,
order or resolution. In case a motion for reconsideration or
new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of
the denial of said motion. [Emphasis supplied]
The petition shall be filed in the Supreme Court or, if it
relates to the acts or omissions of a lower court or of a
corporation, board, officer, or person, in the Regional Trial
Court exercising jurisdiction over the territory as defined by

the Supreme Court. It may also be filed in the Court of

Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan, if it is in aid of its
appellate jurisdiction. If it involves the acts or omissions of a
quasi-judicial agency, unless otherwise provided by these
rules, the petition shall be filed in and cognizable only by the
Court of Appeals.
No extension of time to file the petition shall be granted
except for compelling reason and in no case exceeding
fifteen (15) days.
We gave due course to the petition, and the parties
submitted their respective Memoranda as required.
In Systems Factors Corporation v. NLRC[10] we declared
that the amendment introduced under A.M. No. 00-2-03-SC is
procedural or remedial in character, as it does not create new
or remove vested rights, but only operates in furtherance of
the remedy or confirmation of rights already existing. It is
settled that procedural laws may be given retroactive effect
to actions pending and undetermined at the time of their
passage, there being no vested rights in the rules of
procedure. Thus, the said amendment may be given a
retroactive effect. We reiterated this ruling in Unity Fishing
Development Corporation v. Court of Appeals.[11]
Thus, by virtue of the retroactive effect of the
amendment of Section 4, Rule 65 of the 1997 Rules of Civil
Procedure introduced by our Resolution in A.M. No. 00-2-03SC, which allows the filing of a petition for certiorari within
sixty days from notice of the denial of a motion for
reconsideration, the filing of petitioners petition before the
Court of Appeals was on time. Indeed, there is no dispute
that their petition was filed on the sixtieth day from notice of
the denial of their motion for reconsideration.

The Court of Appeals dismissed the petition also on the

ground that the Verification in the petition was not properly
executed; thus:
Aside from that, the Verification that was executed by Ma.
Cleofe R. Legaspi, supposedly an Employment Specialist of
Pfizer, Inc., was not properly executed. While she alleges
being one of the petitioners (Rollo, p. 41) actually she is
not. As a matter of fact, the parties (Ibid., p. 4) as petitioners,
were only Pfizer, Inc., Ma. Angeles Lleander and Sandra
Webb. Miss Cleofe Legaspi certainly cannot be treated as one
of the petitioners.
A petition for review filed pursuant to Rule 65 of the 1997
Rules of Civil Procedure must be verified. [12] Section 4, Rule 7
of said Rules, which provides for verification, pertinently
reads as follows:
A pleading is verified by an affidavit that the affiant has read
the pleading and that the allegations therein are true and
correct his knowledge and belief.
Verification is intended to assure that the allegations in
the pleading have been prepared in good faith or are true
and correct, not mere speculations.[13] Generally, lack of
verification is merely a formal defect that is neither
jurisdictional nor fatal. The court may order the correction of
the pleading or act on the unverified pleading if the attending
circumstances are such that strict compliance with the rule
may be dispensed with in order to serve the ends of justice.
[14]

We firmly believe that the purpose of verification was

served in the instant case wherein the verification of the
petition filed with the Court of Appeals was done by Ms.
Cleofe R. Legaspi. It remains undisputed that Ms. Legaspi was
an Employment Specialist of petitioner Pfizer, Inc., who

coordinated and actually took part in the investigation of the

administrative charges against respondent Galan. As such,
she was in a position to verify the truthfulness and
correctness of the allegations in the petition. Besides, as
pointed out by petitioners, Pfizer, being a corporate entity,
can only act through an officer. Ms. Legaspi, who was an
officer having personal knowledge of the case, was,
therefore, merely acting for and in behalf of petitioner Pfizer
when she signed the verification. Thus, the disputed
verification is in compliance with the Rules.
It may not be amiss to state that, contrary to the finding
of the Court of Appeals, Ms. Legaspi never represented
herself as one of the petitioners in the petition before the
Court of Appeals. Her declaration in number 1 of the
verification reads:
I am an Employment Specialist of Pfizer, Inc., one of the
petitioners in the instant case.
If we take this statement together with that in number 4,
which reads: Our company has not commenced any action or
proceeding involving the same issues in the Supreme Court,
it is clear that the phrase one of the petitioners refers to
Pfizer, Inc., and not to Ms. Legaspi. Hence, the finding of
misrepresentation on Legaspis part is without basis.
WHEREFORE, the Resolutions of 11 November 1999 and
25 May 2000 of the Court of Appeals in CA-G.R. SP No. 53671
are hereby SET ASIDE, and the case is REMANDED to the
Court of Appeals for further proceedings.
No pronouncement as to costs.
SO ORDERED.