1

the additional one (1) salary payable every year, the same to be paid at the
ue thereon; rate of P26.30 instead of the following rate computed as follows:
4. office rentals at the rate of US$300.00 or its peso equivalent for
the use of his residence as office of Philmalay for the period July 1997 - P27.66 P1.36 - P7, 480.00
December 1, 1989 to July 1996; and
5. retention of the services of the law firm Quasha Ancheta Pena August 1997 - 29.33 3.02 - 16, 665.00
and Nolasco Law Firm, which was hired by respondents to
defend him in the illegal recruitment case filed against him in September - 32.39 - 6.09 - 33, 495.00
connection with his employment with respondents.[6]
In a letter dated January 19, 1998, respondent Philmalay retrenched October 1997 - 34.46 - 8.16 - 44, 880.00
petitioner effective January 20, 1998 and promised to pay him separation
benefits pursuant to the provisions of the Labor Code. [7] He was, however, November 1997 - 34.51 - 8.21 - 45, 155.00
offered a separation pay equivalent to four months only, or the total amount
of P578,600.00 (P144,650 x 4). The offer was not accepted by petitioner and December 1997 - 37.17 - 10.57- 59, 785.00
efforts to settle the impasse proved futile.
Petitioner filed with the Arbitration Branch of the National Labor P207,460.00
Relations Commission a complaint[8] for underpayment of wages and non-
payment of separation pay, sick leave, vacation leave and other benefits (c) 13th month pay for December 1997 computed as follows: December 1997
against respondents. P37.17 P10.57 P59,785.00.
On December 22, 1999, the Labor Arbiter rendered a decision [9] in
favor of petitioner, the dispositive portion of which reads: 2. To order respondents to pay jointly and severally the complainant the
following:
PREMISES CONSIDERED, judgment is hereby rendered in favor of the
complainant and against the respondents, as follows: (a) Unused vacation and sick leaves from December 01, 1989 to December
31, 1997 based on the same salary, to be computed as follows:
1. To order respondents to pay jointly and severally the complainant, the
following: i) Vacation Leave Fifteen (15) days for every year of services x 9 years =
135 days
(a) Unpaid salary from January 1, 1998 to January 19, 1998, the same to be
computed in the following manner: 135 days % 26 working days a month

19 = days % 31 days of January 98 = 5.2 months

= 0.613 month x US$5,500.00 = US$28,600.00

= US$3,370.00 ii) Sick Leave Fifteen (15) Days for every [year] of service x 9 years = 135
days
(b) Underpayment of salary, the same to be computed at net US$5,500.00
or its peso-equivalent from July 1, 1997 to December 31, 1997, together with 135 days % 26 working days a month

= 5.2 months x US$5,500.00 / month
= US$28,600.00
3) To order respondents to pay jointly and severally the complainant his
separation pay equivalent to one (1) month pay for very year of service at
the rate of US $5,500.00 or its peso equivalent from December 1, 1989 to
January 19, 1998, computed as follows:
9 years x US$5,500.00 = US$49,500.00
4) To order respondents to pay jointly and severally the complainants other
claims and benefits:
a) A brand new car (Galant super saloon) or its equivalent in the sum of
P945,100.00;
b) Office rentals for the use of his residence situated at No. 38 Don Wilfredo
St., Don Enrique Heights Diliman, Quezon City, [from] 01 December 1989 to
July 1996 at the rate of US$300.00 or its peso equivalent to US$23,700.00;
c) Life insurance policy for US$100,000.00 from December 1, 1989 to
December 31, 1997, or if the same was not secured the premiums due
thereon for the above period, the same to be computed as follows:
US$2,736.50 x 9 years = US$24,628.50
d) The services of the Law firm of Quasha Ancheta Pea and Nolasco be
continued to be retained by the two (2) companies to represent complainant
in the illegal recruitment case before the Regional Trial Court of Quezon
City, Branch 96, docketed as Crim. Case No. Q-93-46421, entitled People of
the Philippines vs. Dr. Antonio B. Mangahas, et al., filed against him in
connection with his employment by Leong Hup, or in default thereof to pay
the attorneys fees of the new counsel, that may be hired by the complainant
to defend him in the said case estimated in the sum of P200,000.00, more or
less;
5) To order the respondents to pay jointly and severally the complainant
moral damages in the sum of P2.5 million and exemplary damages of P2.5
million;
2
6) To order the respondents to pay jointly and severally the complainant in
the sum equivalent to ten percent (10%) of the total claim as and for
attorneys fees.
7) Respondents counterclaims are hereby dismissed for lack of merit.
SO ORDERED.[10]
On appeal by respondents to the National Labor Relations Commission
(NLRC), the Decision of the Labor Arbiter was modified by deleting the
awards of (1) US$3,370.00 representing unpaid salary for the period
January 1, 1998 to January 19, 1998; (2) US$28,600.00 as vacation leave;
(3) brand new car or its equivalent in the sum of P945,100.00; (4)
US$23,700.00 as office rentals for the period of December 1, 1989 to July
1996; (5) US$100,000.00 life insurance policy or the equivalent premium in
the amount of US$24,628.50; (6) P2.5 million as moral damages; and (7)
P2.5 million as exemplary damages. The NLRC likewise reduced the
amount of petitioners separation pay to US$44,400.00 after adjusting its
computation based on the length of service of petitioner which it lowered
from 9 years to 8 years; and by limiting the basis of the 10% attorneys fees
to the total of the awards of underpayment of salary (P207,460.00),
13th month pay differential (P59,785.00) and cash equivalent of sick leave
(US$28,600.00) only, and excluding therefrom the award of separation pay
in the amount of US$44,400.00. The decretal portion of the said
decision[11] states:
WHEREORE, premises considered, the Decision dated December 22, 1999
is hereby MODIFIED as follows:
Respondents are hereby ordered to pay jointly and severally the
complainant, the following:
(a) underpayment of salary as computed in the appealed Decision in the
amount of P207, 460.00;
(b) 13th month pay differential as computed in the appealed Decision in the
amount of P59,785.00;
(c) monetary equivalent of complainants sick leave as computed in the
appealed Decision in the amount of US$28,600.00;

(d) separation pay in the amount of US$44,000.00 as earlier computed in
this Decision;
(e) attorneys fees equivalent to ten (10%) percent of the total award based
on the awards representing underpayment of salary, 13th month pay, [and]
cash equivalent of sick leave.
Respondents are likewise directed to provide legal counsel to complainant
as defendant in Criminal Case No. Q-93-46421.
The awards of unpaid wages from June 1-19, 1998, vacation leave in the
amount of US$28,600, P945,000 for car, US23,700.00, for office rentals, life
insurance policy in the amount of US$100,000.00 and moral and exemplary
damages in the amount of 2.5 million pesos are hereby DELETED on
grounds above-discussed.
SO ORDERED.[12]
Petitioner filed a motion for reconsideration, however, the same was
denied.[13] Undaunted, petitioner filed a petition for certiorari with the Court of
Appeals, which was dismissed on January 28, 2002 for failure to attach to
the petition the following: (1) complainants (petitioner) Position Paper filed
before the Labor Arbiter; (2) Decision dated 22 December 1992 penned by
Labor Arbiter Ariel Cadiente Santos; and (3) Memorandum of Appeal filed by
the petitioner.[14]
On February 21, 2002, petitioner filed a motion for reconsideration,
attaching thereto a copy of the Labor Arbiters decision and the pleadings he
failed to attach to the petition. The Court of Appeals, however, denied
petitioners motion for reconsideration. Hence, the instant petition based on
the following grounds:
1. COURT OF APPEALS COMMITTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF
JURISDICTION, IN ISSUING THE QUESTIONED RESOLUTION
DISMISSING THE PETITION FOR CERTIORARI BASED ON
TECHNICALITIES, THAT PETITIONER FAILED TO COMPLY WITH SEC.
1, RULE 65, RULES OF CIVIL PROCEDURE FOR FAILURE TO ATTACH
THREE (3) DOCUMENTS CONSISTING OF:
Complainants (petitioner) Position Paper filed before the
labor arbiter;
3
Decision dated 22 December 1999 penned by Labor Arbiter
Ariel Cadiente Santos; and
Memorandum of Appeal filed by the petitioner.
WHICH RESPONDENT COURT OF APPEALS CONSIDERED AS
MATERIAL PORTIONS OF THE RECORD DESPITE THE FACT
THAT THE SUBJECT DOCUMENTS SOUGHT TO BE PRODUCED
HAVE ACTUALLY BEEN REPRODUCED OR SUBSTANTIALLY
COVERED BY THE QUESTIONED JUDGMENT, ORDER OR
RESOLUTION FILED/SUBMITTED BEFORE IT.
2. COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
DISCRETION IN DISMISSING THE PETITION, AND IN DENYING THE
MOTION FOR RECONSIDERATION THEREOF ON THE GROUND THAT
THERE IS NO COGENT REASON FOR IT TO OVERTURN ITS
DISMISSAL, DESPITE CLEAR AND CONVINCING EVIDENCE, EXTANT
ON THE RECORDS SHOWING THAT THE NATIONAL LABOR
RELATIONS COMMISSIONS (NLRC) DECISION AND RESOLUTION
WERE FLAWED, A PALPABLE OR PATENT ERROR, WHICH MAY BE
SUMMARIZED, TO WIT:
(A) IN DECLARING THAT PETITIONER HAD RESIGNED FROM
HIS EMPLOYMENT, AND NOT RETRENCHED OR
TERMINATED DESPITE A DOCUMENTARY EVIDENCE
EXTANT ON THE RECORD ISSUED BY PRIVATE
RESPONDENTS DATED JANUARY 19, 1998 GIVING
FORMAL NOTICE TO YOU (PETITIONER) OF YOUR
TERMINATION DUE TO RETRENCHMENT EFFECTIVE
JANUARY 20, 1998.
(B) IN HOLDING AGAIN, AND DENYING PETITIONERS VALID
CLAIMS DESPITE DOCUMENTARY EVIDENCE OR THE
EXISTENCE OF A CONTRACT OF EMPLOYMENT
STATING THAT:
(1) EMPLOYEES (INCLUDING PETITIONER AS GENERAL
MANAGER) AS A MATTER OF COMPANY POLICY AND/OR PRACTICE)
WHO ARE RETRENCHED ARE ENTITLED TO INCENTIVES INCLUDING
15-DAYS VACATION LEAVE AND 15-DAYS SICK LEAVE WITH PAY; A
FACT ADMITTED NO LESS BY PRIVATE RESPONDENTS OWN
WITNESS, MS. MA. ROWENA LOPEZ (FORMER PERSONNEL

MANAGER OR PHILMALAY) WHO EXECUTED AN AFFIDAVIT
ADMITTING THE SAME.
(2) PETITIONERS ENTITLEMENT AS PER CONTRACT TO A
BRAND NEW CAR (OR AT LEAST TO THE CASH EQUIVALENT
THEREOF); $100,000.00 LIFE INSURANCE POLICY (OR IN DEFAULT
THEREOF AT LEAST TO THE PREMIUMS THEREIN), AND OFFICE
RENTALS FOR THE USE OF THE PETITIONERS PRIVATE RESIDENCE
AS OFFICE OF RESPONDENTS.
(3) PETITIONER IS ENTITLED, TO MORAL AND EXEMPLARY
DAMAGES DUE TO PRIVATE RESPONDENTS ACTS OF BAD FAITH IN
REQUIRING PETITIONER TO EXECUTE A LETTER OF RESIGNATION,
WHEN IN FACT HE WAS ADMITTEDLY TERMINATED THRU
RETRENCHMENT, AND ITS REFUSAL TO PAY HIM HIS VALID CLAIMS,
DESPITE HIS CONTRACT OF EMPLOYMENT, COMPANY POLICY, AND
LETTER OF TERMINATION ISSUED BY PRIVATE RESPONDENTS.
(4) PETITIONERS ENTITLEMENT TO 10% OF THE TOTAL
AMOUNT OF THE AWARD OF ATTORNEYS FEES AS PROVIDED FOR
BY LAW AND AS PER PETITIONERS CONTRACT WITH COUNSEL, AND
NOT ONLY 10% OF THE TOTAL AWARD REPRESENTING UNDER
PAYMENT OF SALARY, 13TH MONTH PAY, AND CASH EQUIVALENT OF
SICK LEAVE AND IN ORDERING PRIVATE RESPONDENT TO PROVIDE
LEGAL COUNSEL TO PETITIONER IN CRIM. CASE NO. Q-93-46421,
WHEN THE SUBJECT CASE HAD ALREADY BEEN DISMISSED AT THE
EXPENSE OF PETITIONER WHO HAD PREVIOUSLY HIRED HIS OWN
COUNSEL OF CHOICE FOR THE PURPOSE.
The issues for resolution are: (1) whether or not the Court of Appeals
erred in dismissing the petition; and (2) whether or not the decision of the
Labor Arbiter should be reinstated.
The allowance of the petition on the ground of substantial compliance
with the Rules is not a novel occurrence in our jurisdiction. As consistently
held by the Court, rules of procedure should not be applied in a very
technical sense, for they are adopted to help secure, not override,
substantial justice.[15] In Ramos v. Court of Appeals,[16] the Court of Appeals
dismissed a petition for review of the decision of the Regional Trial Court
because the petitioner failed to attach to the petition a certified true copy of
the Metropolitan Trial Courts decision in addition to the certified true copy of
the assailed decision of the RTC. Holding that the Court of Appeals should
have given due course to the petition considering that petitioner
4
subsequently submitted a certified true copy of the decision of the MeTC, we
held:
Petitioner is right that the MeTCs decision cannot be considered a disputed
decision. The phrase is the equivalent of ruling, order or decision appealed
from in Rule 32, 2 of the 1964 Rules made applicable to appeals from
decisions of the then Courts of First Instance to the Court of Appeals by R.A.
No. 296, as amended by R.A. No. 5433. Since petitioner was not appealing
from the decision of the MeTC in her favor, she was not required to attach a
certified true copy but only a true or plain copy of the aforesaid decision of
the MeTC. The reason is that inclusion of the decision is part of the
requirement to attach to the petition for review other material portion of the
record as would support the allegations of the petition. Indeed, petitioner
referred to the MeTC decision in many parts of her petition for review in the
Court of Appeals for support of her theory.
Nonetheless, the Court of Appeals should have reconsidered its dismissal of
petitioners appeal after petitioner submitted a certified true copy of the
MeTCs decision. It was clear from the petition for review that the RTC
incurred serious errors in awarding damages to private respondents which
were made without evidence to support the award and without any
explanation[17]
In Jaro v. Court of Appeals,[18] we applied the rule on substantial
compliance because the petitioner amended his defective petition and
attached thereto the relevant annexes certified according to the rules.Thus
There is ample jurisprudence holding that the subsequent and substantial
compliance of an appellant may call for the relaxation of the rules of
procedure. In Cusi-Hernandez vs. Diaz and Piglas-Kamao vs. National
Labor Relations Commission, we ruled that the subsequent submission of
the missing documents with the motion for reconsideration amounts to
substantial compliance. The reasons behind the failure of the petitioners in
these two cases to comply with the required attachments were no longer
scrutinized. What we found noteworthy in each case was the fact that the
petitioners therein substantially complied with the formal requirements [19]
The same leniency should be applied to the instant case considering
that petitioner subsequently submitted with his motion for reconsideration the
certified true copy of the Labor Arbiters decision, the complainants position
paper and the respondents memorandum of appeal. Clearly, petitioner had
demonstrated willingness to comply with the requirements set by the rules. If

we are to apply the rules of procedure in a very rigid and technical sense, as
the Court of Appeals did in this case, the ends of justice would be defeated.
The pleadings and documents filed extensively discussed the issues
raised by the parties. Such being the case, there is sufficient basis to resolve
the instant controversy.[20] Labor laws mandate the speedy disposition of
cases, with the least attention to technicalities but without sacrificing the
fundamental requisites of due process.[21] Remanding the case to the Court
of Appeals will only frustrate speedy justice and, in any event, would be a
futile exercise, as in all probability the case would end up with this
Court.[22] We shall thus rule on the substantial claims of the parties.
Was the termination of petitioners employment caused by
retrenchment or by voluntary resignation?
The Court finds that petitioners dismissal from service was due to
retrenchment. This is evident from the termination letter sent by Philmalay to
petitioner, to wit
We regret to inform you that in view of the prevailing market conditions and
the continuous losses being incurred by the company, the management has
decided to cut down on expenses and prevent further losses through
retrenchment of some of our personnel effective January 19, 1998.
In compliance with the requirement of the law, this will serve as a formal
notice to you of your termination due to retrenchment effective January 20,
1998. To provide you with sufficient time to seek alternative employment,
you need not report for work (unless otherwise requested) starting January
20, 1998. Notwithstanding the above mentioned affectivity date, you may
come down to the office and receive your separation benefits pursuant to the
Labor Code[23]
While it is true that petitioner tendered his resignation letter to
respondents requesting that he be given the same benefits granted by the
company to resigned/retrenched employees, there is no showing that
respondents accepted his resignation. Acceptance of a resignation tendered
by an employee is necessary to make the resignation effective. [24] No such
acceptance, however, was shown in the instant case. What appears in the
record is a letter terminating the services of petitioner due to retrenchment
effective January 20, 1998. Verily, said letter should be interpreted as a non-
acceptance of petitioners resignation effective December 31, 1997. As
correctly pointed out by the Labor Arbiter, if respondents considered
petitioner resigned as of December 31, 1997, then there would be no need
to retrench him.
5
The length of service of petitioner, which the NLRC correctly reduced
to 8 years, as well as the solidary liability of respondent corporations are no
longer assailed here. Whether petitioner is considered resigned on
December 31, 1997 or retrenched on January 20, 1998, his length of
employment reckoned from August 24, 1989 would still be 8
years. Moreover, respondents did not appeal from the decision of the NLRC
and in fact sought its affirmance in their Opposition to the motion for
reconsideration[25] and Comment to the motion for reconsideration[26] filed
before the NLRC and the Court of Appeals, respectively. So also, petitioner
is estopped from claiming that he was illegally dismissed and that his
retrenchment was without basis. His request for benefits granted to
retrenched employees during such time when respondent was in the
process of retrenching its employees is tantamount to a recognition of the
existence of a valid cause for retrenchment. What remains to be resolved by
the Court is the validity of the NLRCs deletion/modification of the awards of
(1) unpaid salary; (2) vacation leave; (3) car and insurance policy/premiums;
(4) moral and exemplary damages; (5) reimbursement for expenses for legal
services; (6) rental payment; and (7) attorneys fees.
As regards the award of unpaid salary, the NLRC was correct in
holding that petitioner is not entitled to compensation from January 1, 1998
to January 19, 1998, because he was not able to prove that he rendered
services during said period. In the same vein, there is no basis in awarding
moral and exemplary damages, inasmuch as respondents were not shown
to have acted in bad faith in initially refusing to award separation pay
equivalent to 1 month salary for every year of service. Respondents even
offered to pay petitioner separation pay, albeit in an amount not acceptable
to petitioner. Moral damages are recoverable only where the act complained
of is tainted by bad faith or fraud, or where it is oppressive to labor, and done
in a manner contrary to morals, good customs, or public policy. Exemplary
damages may be awarded only if the act was done in a wanton, oppressive,
or malevolent manner.[27] None of these circumstances exist in the present
case.
The NLRC also correctly ruled that the car and insurance benefits are
granted only during the course of employment; hence, they should not be
part of petitioners separation package. Likewise, petitioners claim for
payment of rental for the use of his house as office of Philmalay should be
denied for having been ventilated in the wrong forum. Not all money claims
that may be asserted by an employee against his employer are within the
jurisdiction of the NLRC. Money claims of workers which fall within the
jurisdiction of Labor Arbiters are those which arise out of employer-employee
relationship. Obviously, the demand for rental payment is not a labor
dispute; rather, it is based on contractual relations independent of employer-

employee relationship. Hence, the jurisdiction thereon is with the regular
courts.[28]
Since respondents did not appeal from the decision of the NLRC, it is
presumed that they are satisfied with the adjudications therein, including the
order of NLRC directing them to provide legal services to petitioner in the
illegal recruitment case filed against the latter while he was still employed by
respondents. This is in accord with the doctrine that a party who has not
appealed cannot obtain from the appellate court any affirmative relief other
than the ones granted in the appealed decision. [29] Nonetheless,
respondents cannot be ordered to reimburse the amount of P200,000.00 for
the legal services of the law firm allegedly hired by petitioner because he
failed to establish that he indeed hired the services of a law firm and that he
spent P200,000.00 as a consequence thereof.
Petitioner is, however, entitled to the award of vacation leave as part of
respondents retrenchment incentives. In granting sick leave but deleting
vacation leave benefits, the NLRC based its ruling on the affidavit of one Ms.
Rowena Lopez, a former personnel of Philmalay, viz:
3. That based on company policy and/or practice the rank-and-file
employees are entitled to 15-days vacation leave and 15-days sick
leaves. However, the vacation leave must be availed of within the year or
applied to the remaining period of employment for those who resigned or go
on terminal leave. In case of sick leaves all unused sick leaves are also
commutable to cash;
4. That employees who were retrenched are entitled to the following
incentives:
(a) One (1) month additional leave with pay effective after their last
day of employment to enable them to look for a new job;
(b) Plus one (1) month separation pay for every year of service; and
(c) 15-days vacation leave and 15-days sick leave with pay as stated
in paragraph 3 hereof.[30]
The foregoing expressly states that a retrenched employee is entitled
to 15-day vacation leave. Paragraph 4 is the retrenchment package granted
to retrenched employees, whereas paragraph 3 refers to the feasibility of
commutation of unused sick and vacation leaves. Except for the sentence
entitling employees to vacation and sick leaves, the last 2 sentences in
6
paragraph 3 have nothing to do with the retrenchment benefits in paragraph
4. Note that the 15-day vacation and sick leave with pay in paragraph 4(c)
are not qualified by the word unused. The 15-day vacation and sick leaves
are granted to retrenched employees as part of the retrenchment benefits
regardless of whether or not they have unused sick and vacation leaves at
the time of the retrenchment. Moreover, the applicability of the said
provisions to petitioner was not disputed by respondents. They even invoked
the same in manifesting conformity to the deletion by the NLRC of the award
of 15-day vacation leave for every year of service. At any rate, any ambiguity
therein must be resolved strictly against the respondents, who drafted these
provisions.[31] Hence, petitioner is entitled not only to 15 days sick leave but
also to 15 days vacation leave with pay
The Labor Arbiters computation of petitioners 15-day sick leave pay
must be modified. The NLRC, which affirmed the Labor Arbiters decision,
reduced petitioners number of years of service from 9 to 8 years but it did
not make the corresponding adjustment in the determination of petitioners
sick leave pay which used 9 years as the basis in the computation
thereof. Accordingly, the awards of 15-day sick leave and 15-day vacation
leave for every year of service must be computed using 8 years as its basis.
Finally, the award of attorneys fees must also be modified. In Traders
Royal Bank Employees Union-Independent v. National Labor Relations
Commission,[32] it was held that there are two commonly accepted concepts
of attorney's fees, the so-called ordinary and extraordinary. In its ordinary
concept, an attorneys fee is the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to the latter. The basis of
this compensation is the fact of his employment by and his agreement with
the client. In its extraordinary concept, attorneys fees are deemed indemnity
for damages ordered by the court to be paid by the losing party in a
litigation. The instances where these may be awarded are those enumerated
in Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to
actions for recovery of wages, and is payable not to the lawyer but to the
client, unless they have agreed that the award shall pertain to the lawyer as
additional compensation or as part thereof. The extraordinary concept of
attorneys fees is the one contemplated in Article 111 of the Labor Code,
which provides:
Art. 111. Attorneys fees. (a) In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees equivalent to ten percent of
the amount of wages recovered
The afore-quoted Article 111 is an exception to the declared policy of
strict construction in the awarding of attorneys fees. Although an express
finding of facts and law is still necessary to prove the merit of the award,
 7

there need not be any showing that the employer acted maliciously or in bad
faith when it withheld the wages. There need only be a showing that the
lawful wages were not paid accordingly, as in this case.[33]
In carrying out and interpreting the Labor Code's provisions and its
implementing regulations, the employees welfare should be the primordial
and paramount consideration. This kind of interpretation gives meaning and
substance to the liberal and compassionate spirit of the law as provided in
Article 4 of the Labor Code which states that [a]ll 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, and Article 1702 of the Civil Code which provides that [i]n case of
doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.[34]
In the case at bar, what was withheld from petitioner was not only his
salary, vacation and sick leave pay, and 13th month pay differential, but also
his separation pay. Hence, pursuant to current jurisprudence, separation pay
must be included in the basis for the computation of attorneys
fees. Petitioner is entitled to attorneys fees equivalent to 10% of his total
monetary award.[35]
WHEREFORE, in view of all the foregoing, the instant petition is
GRANTED. The assailed Resolutions dated January 28, 2002 and July 22,
2002 of the Court of Appeals in CA-G.R. SP No. 67431, are REVERSED
and SET ASIDE. The Decision of the National Labor Relations Commission
in NLRC NCR CA 023679-2000, is MODIFIED. In addition to the awards of
underpayment of salary, 13th month pay differential, sick leave pay and
separation pay, respondents are ordered to pay petitioner vacation leave
pay and 10% attorneys fees, the basis of which shall be the total monetary
award. Petitioners vacation leave and sick leave pay shall be computed on
the basis of his 8 years of service with respondents. For this purpose, the
case is ordered REMANDED to the Labor Arbiter for the computation of the
amounts due petitioner.
SO ORDERED.

[G.R. No. 140812. August 28, 2001]
CANDIDO ALFARO, petitioner, vs. COURT OF APPEALS, NATIONAL
LABOR RELATIONS COMMISSION and STAR PAPER
CORPORATION, respondents.
DECISION
PANGANIBAN, J.:
Generally, separation pay need not be paid to an employee who
voluntarily resigns. However, an employer who agrees to expend such
benefit as an incident of the resignation should not be allowed to renege in
the performance of such commitment.
The Case
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Court, seeking to set aside the Decision [2] of the Court of Appeals
8
(CA), which affirmed the June 16, 1998 Decision of the National Labor
Relations Commission (NLRC).[3]
The Facts
The facts as related by petitioner in his Memorandum [4] are hereunder
reproduced as follows:
Petitioner was employed as a helper/operator of private respondent since
November 8, 1990. From November 23, 1993 until December 5, 1993, he
took a sick leave. When he reported back to work on December 6, 1993, he
was surprised to find out that another worker was recruited to take his place,
and instead, he was transferred to [the] wrapping section where he was
required to work with overtime up to 9:30 PM, from his regular working hours
of from 7:00 a.m., to 4:00 p.m., despite the fact that he had just recovered
from illness. On December 7, 1993, he was given a new assignment where
the work was even more difficult[;] when he complained o[f] what he felt was
rude treatment or sort of punishment since he was being exposed to hard
labor notwithstanding his predicament of just coming from sickness,
petitioner was told to look for another job because he was dismissed
effective on said date, December 7, 1993, when petitioner was seeking his
13th month pay and fifteen (15) days sick leave pay [o]n the afternoon of the
same day, he was ignored when he refused to sign documents which
indicated that he was renouncing claims against private respondent. Before
Christmas of 1993, petitioner sought private respondent to pay his 13th
month pay and [his] 15 days sick leave pay, but he was told to come next
year.
On January 12, 1994, petitioner came to private respondent for his
aforestated money claims. During that occasion, private respondent dangled
to petitioner a check worth P3,000.00 which [would] be released to him, only
if he [signed] the documents, being forced upon him to sign on December 7,
1993. Deperate for the money to support his subsistence, and against his
will, petitioner was constrained to sign the said documents which contained
no amount of money released to him. The actual sum of money received by
petitioner from private respondent amounted to P3,000.00 in the form of
check, while his claims for 15 days sick leave pay was secured by him from
the Social Security System.
The documents forced upon the petitioner to sign were a resignation letter,
and a Release and Quit Claim. Said resignation letter read, thus:

To the Personal Manager
Mr. Michael Philip Elizalde
Star Paper Corporation
46 Joy St., Grace Village, Q.C.
Dear Sir,
Ako po si Candido Alfaro ay nagbibigay ng aking resignation letter dahilan
po sa aking sakit. Umaasa po ako na mabigyan ng tulong.
Lubos na gumagalang
(sgd) Candido Alfaro
As submitted by private respondent in its pleadings on record, petitioner
allegedly tendered said resignation letter on January 12, 1994, on the basis
of which, the former maintains that the latter was not illegally dismissed, was
paid [his] separation pay of P8,455.50, and that he voluntarily resigned from
his job effective January 12, 1994.[5]
Private respondent, in its Memorandum[6], adopts Labor Arbiter Donato
Quintos findings of fact as follows:
Complainant alleges that he was hired by respondent corporation in
November 1990 [as] the latters machine tape operator. Thereafter, or in the
month[s] of September and October, 1993, he was suffered to do some
painting work on pallets guide using [a] spray gun. As a result, in the third
week of October, 1993 he felt general body weakness coupled with constant
coughing and fever.
As a consequence of his illness, complainant alleges that he took a vacation
leave from November 22, 1993 to December 5, 1993. However, upon
reporting for work on December 6, 1993, complainant was surprised to find
out that somebody was already recruited to take his place. Instead, he was
transferred to the wrapping section.
On December 7, 1993, complainant complained of the work being given to
him for being difficult which was interpreted as some sort of a punishment
given to him by the respondent. As a result thereof, complainant alleges that
he was dismissed without valid cause and without due process of law. He
further alleges that he was not paid his 13th month pay and 15 days sick
leave which he was claiming because he refused to sign a document
renouncing all his claim[s] against respondent corporation.
9
On January 12, 1994, complainant went to the respondent corporation to
claim his 13th month pay and his 15 days sick leave pay. He received the
amount of P3,000.00 but he was allegedly pressured to sign a Quitclaim and
Release with no amount or consideration written on said document. Further,
complainant also alleges that he was also made to sign a prepared
resignation letter in exchange for the P3,000.00 which he received which
[was] contrary to the claim of the respondent corporation that he
received P8,452.00.
On June 14, 1996, the complainant filed a case against the respondent
corporation for non-payment of separation pay. Said complaint was later
amended on August 1, 1996 by claiming illegal dismissal and damages in
lieu of separation pay, with a prayer for reinstatement with backwages and
attorneys fees.
On the other hand, respondent corporation maintains that complainant while
still under its employ contracted PTB Minimal Active for which reason he
applied for SSS benefits on November 25, 1993. Considering his illness,
complainant asked the respondent corporation that he be allowed to resign
with benefits. After getting a favorable reply, complainant submitted a
resignation letter to the respondent corporation on January 12, 1994.
Because of his request for help, separation benefits were likewise given to
complainant in the amount of P8,452.50 Complainant, upon receipt of said
benefits, executed a Release and Quitclaim in favor of respondent
corporation.
The CA Ruling
In denying petitioners claims, the CA ruled as follows:
It is not easy to uphold petitioners submission. For, the Labor Arbiters report
to the National Labor Relations Commission shows that petitioner resigned
voluntarily. Thus, as written in the letter of resignation:
Ako po si candido Alfaro ay nagbibigay ng aking resignation dahilan po sa
aking sakit.
Umaasa po ako na mabigyan ng tulong.

The same report likewise mentioned the Quitclaim and Release (Annex 2, of
private respondents position paper) which further strengthened the fact that
petitioner resigned due to his ailment. If petitioners concatenation is true that
he was forced to sign the resignation letter against his better judgment, then
why should he also sign the quitclaim and release[?]
We find no reason to reverse and set aside the findings and
recommendation of the Labor Arbiter, and affirmed by the NLRC. As a quasi-
judicial body, the findings of the NLRC deserve respect, even finality (M.
Ramirez Industries vs. Secretary of Labor, 266 SCRA 111; Bataan Shipyard
and Engineering Corporation vs. NLRC, 269 SCRA 199; Naguiat vs. NLRC,
269 SCRA 564; Conti vs. NLRC, 271 SCRA 114.)
Hence, this recourse.[7]
The Issues
Petitioner submits the following issues for the consideration of this
Court:
1.) Whether or not the Honorable Court of Appeals committed
grave abuse of discretion tantamount to lack or x x x excess
of jurisdiction and/or serious reversible error in holding that
petitioner was not illegally dismissed by private respondent;
2.) Whether or not the Honorable Court of Appeals committed
grave abuse of discretion tantamount to lack of or x x x
excess of jurisdiction, and/or serious reversible error in
holding that petitioner voluntarily resigned from employment
3.) Whether or not the Honorable Court of Appeals committed
grave abuse of discretion tantamount to lack of or x x x
excess of jurisdiction and/or reversible error in holding that the
finding of the NLRC, deserve respect and even finality despite
serious flaws in its appreciation of facts and evidence;
4.) Whether or not the Honorable Court of Appeals committed
grave abuse of discretion tantamount to lack of or x x x
excess of jurisdiction, and/or serious reversible error in
dismissing the petition for certiorari[8]
10
The Courts Ruling
The Petition has no merit.
Main Issue: Illegal Dismissal and Separation Pay
At the outset, it bears stressing that in a petition for review on certiorari,
the scope of the Supreme Courts judicial review of decisions of the Court of
Appeals is generally confined only to errors of law[9]; questions of fact are not
entertained.[10] Thus, only questions of law may be brought by the parties
and passed upon by this Court in the exercise of its power to review. [11]
The Supreme Court is not a trier of facts, and this doctrine applies with
greater force in labor cases.[12] Factual questions are for the labor tribunals
to resolve.[13] In this case, the factual issues have already been determined
by the labor arbiter and the National Labor Relations Commission. Their
findings were affirmed by the CA. Judicial review by this Court does not
extend to a reevaluation of the sufficiency of the evidence upon which the
proper labor tribunal has based its determination.[14]
Indeed, factual findings of labor officials who are deemed to have
acquired expertise in matters within their respective jurisdictions are
generally accorded not only respect, but even finality, and are binding on the
Supreme Court.[15] Verily, their conclusions are accorded great weight upon
appeal, especially when supported by substantial
evidence.[16] Consequently, the Supreme Court is not duty-bound to delve
into the accuracy of their factual findings, in the absence of a clear showing
that the same were arbitrary and bereft of any rational basis. [17]
The factual findings of the labor arbiter and the NLRC, as affirmed by
the CA, reveal that petitioner resigned from his work due to his illness, with
the understanding that private respondent would give him separation
pay.Unfortunately, it seems that private respondent did not keep its promise
to grant the separation pay, prompting petitioner to institute the present
action for illegal dismissal. It was only for this reason that the Court gave due
course to this Petition.
Generally, an employee who voluntarily resigns from employment is
not entitled to separation pay.[18] In the present case, however, upon the
request of petitioner, private respondent agreed to a scheme whereby the
former would receive separation pay despite having resigned
voluntarily. Thus, the terms and conditions they both agreed upon

constituted a contract freely entered into, which should be performed in good
faith, as it constituted the law between the parties.
Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represented a reasonable
settlement, it is binding on the parties and may not later be disowned, simply
because of a change of mind.[19] The position taken by petitioner on the
alleged illegal dismissal was vacillating and indecisive, as correctly found by
the labor arbiter who provided a ratiocination on the matter as follows:
Thus, after a careful perusal of the evidence on hand, we are of the opinion
that the position taken by the respondent corporation is more credible than
that of complainant. This is evident from the fact that the complaint filed by
complainant on June 14, 1996, or more than two (2) years from his alleged
dismissal on December 7, 1993, was only payment of separation pay. It was
only on August 1, 1996 when complainant abandoned his claim for
separation pay and instead filed an amended complaint claiming that he
was, illegally dismissed.
To our mind, therefore, the foregoing coupled with the fact that there is
practically no evidence on record which shows that complainant was
pressured and made to sign a resignation letter and Release and Quitclaim
against his will [and] better judgment only shows that his claim of illegal
dismissal is unsubstantiated and is a mere afterthought.
Moreover, if indeed complainant was illegally dismissed, he should have
pursued his claim against the respondent corporation by immediately filing a
complaint for illegal dismissal. As it is, however, complainant filed a
complaint for separation pay against the respondent corporation only after
two (2) years from his alleged dismissal which complaint was amended for
the purpose of claiming illegal dismissal almost two (2) months thereafter. [20]
Voluntary resignation is defined as the act of an employee, who finds
himself in a situation in which he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service; thus, he has no other
choice but to disassociate himself from his employment. [21] As discussed
above, petitioner negotiated for a resignation with separation pay as the
manner in which his employment relations with private respondent would
end. He was already suffering from a lingering illness at the time he
tendered his resignation. His continued employment would have been
detrimental not only to his health, but also to his performance as an
employee of private respondent.
11
Hence, the termination of the employment relations of petitioner with
private respondent was ultimately, if not outrightly inevitable. Resignation
with separation pay was the best option for him under the
circumstances. Rightly so, this was the mode adopted and agreed upon by
the parties, as evidenced by the Release and Quitclaim petitioner executed
in connection with his resignation.
Clearly then, the claim of petitioner that he was illegally dismissed
cannot be sustained, considering that his voluntary resignation has been
indubitably established as a fact by the three tribunals below. Indeed, illegal
dismissal and voluntary resignation are adversely opposed modes of
terminating employment relations, in that the presence of one precludes that
of the other.
Although the Supreme Court has, more often than not, been inclined
towards the workers and has upheld their cause in their conflicts with the
employers, such inclination has not blinded it to the rule that justice is in
every case for the deserving, to be dispensed in the light of the established
facts and applicable law and doctrine.[22] An employee who resigns and
executes a quitclaim in favor of the employer is generally estopped from
filing any further money claims against the employer arising from the
employment.[23]
However, private respondent has not complied with its obligation to
give petitioners separation pay in the amount of P8,542.50. It was this
deliberate withholding of monetary benefits that necessitated the long,
litigious and lethargic proceedings in this case. Had private respondent
simply paid the measly amount of P8,452.50 as separation pay to petitioner,
this legal controversy could have been avoided and the court dockets
unclogged.
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision of the Court of Appeals AFFIRMED, with the modification that
private respondent is directed to pay petitioner P8,452.50 plus legal interest
thereon, computed from December 7, 1993, until fully paid, representing the
unpaid separation pay benefit agreed upon by the parties.
SO ORDERED.
 12

Petitioner GLOBE TELECOM, INC. (GLOBE) is a corporation duly

organized and existing under the laws of the
Philippines. Petitioners Delfin Lazaro Jr. was its President and Roberto
Galang its former Director-Regional Sales. Respondent Joan Florendo-
Flores was the Senior Account Manager for Northern Luzon.
On 1 July 1998 Joan Florendo-Flores filed with the Regional Arbitration
Branch of the National Labor Relations Commission (NLRC) an amended
complaint for constructive dismissal against GLOBE, Lazaro, Galang, and
Cacholo M. Santos, her immediate superior, Luzon Head-Regional Sales. In
her affidavit submitted as evidence during the arbitration proceedings,
Florendo-Flores bared that Cacholo M. Santos never accomplished and
submitted her performance evaluation report thereby depriving her of salary
increases, bonuses and other incentives which other employees of the same
rank had been receiving; reduced her to a house-to-house selling agent
(person-to-person sales agent or direct sales agent) of company products
("handyphone") despite her rank as supervisor of company dealers and
agents; never supported her in the sales programs and recommendations
she presented; and, withheld all her other benefits, i.e., gasoline allowance,
per diems, representation allowance, and car maintenance, to her extreme
pain and humiliation.[3]
GLOBE and its co-petitioners claimed that after receiving her salary in
the second week of May 1998 Florendo-Flores went AWOL (Absent Without
Leave) without signifying through letter or any other means that she was
[G.R. No. 150092. September 27, 2002] resigning from her position; that notwithstanding her absence and the filing
of her case, respondent Florendo-Flores' employment was not terminated as
shown by the fact that salary was still provided her until July
1998 to be released upon her presentation of the attendance-record sheet
indicating that she already returned and reported for work; that she
GLOBE TELECOM, INC., DELFIN LAZARO, JR., and ROBERTO continued to have the use a of company car and company "handyphone"
GALANG, petitioners, vs. JOAN FLORENDO- unit; that she was replaced only when her absence became indefinite and
FLORES, respondent. intolerable as the marketing operations in Northern Luzon began to suffer;
that during the pre-trial conference it was learned that Florendo-Flores'
DECISION complaint rested on her alleged personal and private disagreement with her
immediate superior Cacholo M. Santos; that there was no official act from
BELLOSILLO, J.: GLOBE or from other officers of the company, including respondents Lazaro
and Galang, which called for Florendo-Flores' termination, diminution in
This is a petition for review under Rule 45 of the Rules of Court seeking rank, seniority and benefits, or would imply, even remotely, any of the same;
to annul and set aside the Decision[1] of the Court of Appeals of 25 May 2001 and, that Florendo-Flores filed the complaint without going through the
in CA-G.R. SP No. 60284 which affirmed the Decision of the National Labor grievance process of GLOBE's Human Resources Department and without
Relations Commission of 28 January 2000 in NLRC RAB-CAR 05-0170-98, informing its officers of her problems with Cacholo M. Santos.
NLRC NCR CA No. 020270-99.[2] Labor Arbiter Monroe C. Tabingan declared Florendo-Flores to have
been illegally dismissed and ordered petitioners to reinstate her without loss
of seniority rights and full benefits; and to pay full back wages, inclusive of

basic pay, allowances and bonuses as prayed for in the complaint
amounting to P307,625.00, exemplary damages in the sum of P200,000.00,
and ten percent (10%) of the total monetary award as attorney's
fees. However, the Labor Arbiter set aside the claim of abandonment as the
company failed to send the requisite notice to Florendo-Flores,[4] hence,
there was no adherence to procedural due process.Although he recognized
that the problem brewed and eventually boiled over due to the acts of
Cacholo M. Santos, GLOBE's former Head of Regional Sales, Luzon Area,
the Labor Arbiter found the company negligent in monitoring all its key
personnel, and thus assessed against it exemplary damages at the same
time deleting actual and moral damages.[5]
Petitioners appealed the decision to the NLRC which modified the
judgment of the Labor Arbiter. The NLRC ruled that petitioners did not
dismiss Florendo-Flores but that the latter actually abandoned her
employment because of a disagreement with her immediate superior which
she failed to bring to the attention of GLOBE and its officers, particularly
petitioners Lazaro and Galang.[6] However, the NLRC declared that if only as
an act of grace for the latter's past services with the company, GLOBE,
Lazaro and Galang should be held accountable for the back wages of
Florendo-Flores amounting to P307,625.00 minus the amount of P63,000.00
for the value of the company car in Florendo-Flores' possession, or the net
amount of P244,625.00.[7]
Both parties elevated the NLRC decision to the Court of Appeals, each
side through a petition for certiorari. In its Resolution of 2 September 2000
the appellate court dismissed the petition of Florendo-Flores for failure to
append the required verification and certification of non-forum
shopping,[8] while it gave due course to the petition of GLOBE, Lazaro and
Galang.
In their petition before the appellate court, GLOBE, Lazaro and Galang
averred that the NLRC committed grave abuse of discretion amounting to
lack or excess of jurisdiction when it ordered them to pay Florendo-Flores
full back wages and damages despite its express finding that they did not
cause the dismissal of Florendo-Flores as the latter had actually abandoned
her employment on account of her personal differences with her superior.
In its Decision of 25 May 2001 the Court of Appeals found that
Florendo-Flores was constructively dismissed and that payment of back
wages and damages was in order. On 21 June 2001 GLOBE, Lazaro and
Galang filed a motion for reconsideration but the motion was denied in the
appellate court's Resolution of 19 September 2001.
Petitioners pose the following questions in this petition: In a special civil
action for certiorari where factual findings are deemed to be final and
13
conclusive, can the Court of Appeals alter or substitute the findings of fact of
the lower court/tribunal? In the face of the finding of the NLRC that
respondent abandoned her employment because of a personal squabble
with her immediate superior, and that petitioners had nothing to do with the
severance of Flores' employment, can petitioners be held legally liable for
back wages while the guilty party Cacholo M. Santos is legally absolved of
liability?
Petitioners submit that the answers to both questions must be in the
negative. They argue that the appellate court can neither alter nor substitute
the factual findings of the NLRC as they are legally deemed to be final and
conclusive in a certiorari proceeding. They contend that a special civil action
for certiorari is an extraordinary remedy created not to correct mistakes in
the factual findings or conclusions of the lower court or tribunal, but a
remedy intended to rectify jurisdictional errors and grave abuse of
discretion. Thus, the Court of Appeals cannot make its own factual findings
and substitute them for the factual findings of the NLRC, and on such basis
render a decision.
Petitioners further note that the appellate court failed to address the
issues raised in their petition. They reiterate their position that they cannot
be held liable for payment of back wages as an act of grace in view of the
express finding by the NLRC that respondent abandoned her employment
because of a personal rift with her immediate superior and not due to any act
attributable to them. They stress that there can be no liability in the absence
of any wrongful act.
Invoking the principle of res inter alios acta declaring that the rights of a
party cannot be prejudiced by the act, declaration or omission of another,
petitioners insist that since the NLRC found that respondent's problems
arose from the acts and deeds of Santos, he alone should be held
liable. Petitioners find special exception to the NLRC's application of the
concept of "act of grace" to justify the award since an "act of grace is not a
source of demandable obligation. They argue that it is not within the power
of any judicial or administrative agency to compel an employer to be liberal.
In the review of an NLRC decision through a special civil action for
certiorari, resolution is confined only to issues of jurisdiction and grave
abuse of discretion on the part of the labor tribunal. [9] Hence, the Court
refrains from reviewing factual assessments of lower courts and agencies
exercising adjudicative functions, such as the NLRC. Occasionally, however,
the Court is constrained to delve into factual matters where, as in the instant
case, the findings of the NLRC contradict those of the Labor Arbiter.
In this instance, the Court in the exercise of its equity jurisdiction may
look into the records of the case and re-examine the questioned

findings.[10] As a corollary, this Court is clothed with ample authority to review
matters, even if they are not assigned as errors in their appeal, if it finds that
their consideration is necessary to arrive at a just decision of the
case.[11] The same principles are now necessarily adhered to and are
applied by the Court of Appeals in its expanded jurisdiction over labor cases
elevated through a petition for certiorari; thus, we see no error on its part
when it made anew a factual determination of the matters and on that basis
reversed the ruling of the NLRC.
Glaring however is the discrepancy between the text of the decision of
the appellate court which declares that respondent Florendo-Flores "was
unlawfully constructively dismissed" from employment, [12] and its dispositive
portion which declares that "the assailed judgment is
affirmed."[13] It should be noted that the "assailed judgment" referred to the
NLRC Decision which declared that respondent was not illegally dismissed
but that she abandoned her employment. Even in the award of back wages
and exemplary damages the two (2) decisions are at odds: The award of
back wages made by the NLRC was a gratuity or an act of grace from
petitioners while the award made by the Court of Appeals could be assumed
to be anchored on its finding of illegal dismissal. How should the
inconsistency be reconciled?
Where there is conflict between the dispositive portion of the decision
and the body thereof, the dispositive portion controls irrespective of what
appears in the body.[14] While the body of the decision, order or resolution
might create some ambiguity in the manner the court's reasoning
preponderates, it is the dispositive portion thereof that finally invests rights
upon the parties, sets conditions for the exercise of those rights, and
imposes the corresponding duties or obligations.[15] Hence, for the Court of
Appeals to have affirmed the assailed judgment is to adopt and uphold the
NLRC finding of abandonment and its award of full back wages to
respondent as an "act of grace" from petitioners.
However, we believe this is not the proper view as the records reveal
that respondent was constructively dismissed from service.
Constructive dismissal exists where there is cessation of work because
"continued employment is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank and a diminution in pay." [16] All these
are discernible in respondent's situation. She was singularly edged out of
employment by the unbearable or undesirable treatment she received from
her immediate superior Cacholo M. Santos who discriminated against her
without reason - not preparing and submitting her performance evaluation
report that would have been the basis for her increased salary; not
forwarding her project proposals to management that would have been the
source of commendation; diminishing her supervisor stature by assigning
14
her to house-to-house sales or direct sales; and withholding from her the
enjoyment of bonuses, allowances and other similar benefits that were
necessary for her efficient sales performance. Although respondent
continued to have the rank of a supervisor, her functions were reduced to a
mere house-to-house sales agent or direct sales agent. This was tantamount
to a demotion. She might not have suffered any diminution in her basic
salary but petitioners did not dispute her allegation that she was deprived of
all benefits due to another of her rank and position, benefits which she
apparently used to receive.
Far from pointing to Santos alone as the source of her woes,
respondent attributes her degraded state to petitioners as well. Florendo-
Flores cited petitioners' apathy or indifference to her plight as she was twice
left out in a salary increase in August 1987 and May 1998, without
petitioners giving her any reason.[17] It eludes belief that petitioners were
entirely in the dark as the salary increases were granted to all
employees across-the-board but respondent was the only one left receiving
a P19,100.00 per month basic salary while the rest received a basic salary
of almost P35,000.00 per month.[18] It is highly improbable that the exclusion
of respondent had escaped petitioners' notice. The absence of an evaluation
report from Santos should have been noted by petitioners and looked into for
proper action to have been made. If a salary increase was unwarranted,
then it should have been sufficiently explained by petitioners to respondent.
Petitioners argue that respondent Florendo-Flores could have brought
to their attention the deplorable treatment she received from Santos by
resorting to the company's grievance machinery so that the problems in her
relationship with Santos could then have been easily ironed out, but she did
not. It remains uncontroverted that respondent had inquired from petitioners
the reason why her other benefits had been withheld and sought clarification
for her undeserved treatment but petitioner company and Santos remained
mum.[19]
Thus, contrary to the observation of the NLRC, the dispute was not a
mere private spat between respondent Florendo-Flores and her immediate
superior Santos. Granting that this was the case, it had exceeded the
periphery of simple personal affairs that overflowed into the realm of
respondent's employment.
Respondent narrates that sometime in June 1997 Santos wrote her a
baseless accusatory letter, and he together with GLOBE Sales Director
Roberto Galang, one of petitioners herein, verbally told her that she should
resign from her job, but she refused.[20] Thereafter, in July 1997 and the
months subsequent thereto all of respondent's other benefits were withheld
without any reason nor explanation from the company. [21] Even as petitioners
endeavored to lay the blame on Santos alone, he would not have been able

to single-handedly mastermind the entire affair as to influence Sales Director
Galang and manipulate the payroll. It only stands to reason that Santos was
acting pursuant to a management directive, or if not, then petitioners had
condoned it, or at the very least, were negligent in supervising all of their
employees.As aptly observed by the Labor Arbiter -
x x x x it would appear however that the respondent company was negligent
in monitoring all its key personnel. For it is the bounden duty of the corporate
officialdom to constantly monitor their managerial staff if only to ascertain the
smooth flow of work and operations, which includes the inter-personal
relations of each and every key segment of the corporate machinery. For
such, it must be assessed with just and reasonable exemplary damages. [22]
The unauthorized absence of respondent should not lead to the drastic
conclusion that she had chosen to abandon her work. To constitute
abandonment, there must be: (a) failure to report for work or absence
without valid or justifiable reason; and, (b) a clear intention, as manifested by
some overt act, to sever the employer-employee relationship,[23] requisites
that are negated by the immediate filing by respondent Florendo-Flores of a
complaint for constructive dismissal against petitioners. A charge of
abandonment is totally inconsistent with the immediate filing of a complaint
for illegal dismissal; more so, when it includes a prayer for reinstatement. [24]
The reduction of respondent's functions which were originally
supervisory in nature to a mere house-to-house sales agent or direct sales
agent constitutes a demotion in rank. For this act of illegal dismissal, she
deserves no less than full back wages starting from the time she had been
illegally dismissed until her actual reinstatement to her former position
without loss of seniority rights and other benefits - earned, accrued and
demandable. She shall continue to enjoy her benefits, privileges and
incentives including the use of the company car and "handyphone."
The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion. It must always bear in mind the basic
elements of justice and fair play. Having the right should not be confused
with the manner that right is exercised. Thus, it cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker.[25]
In constructive dismissal, the employer has the burden of proving that
the transfer and demotion of an employee are for just and valid grounds
such as genuine business necessity.[26] The employer must be able to show
that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee. It must not involve a demotion in rank or a diminution of salary
and other benefits. If the employer cannot overcome this burden of proof, the
employee's demotion shall be tantamount to unlawful constructive dismissal.
15
It should be noted that the award of back wages in the instant case is
justified upon the finding of illegal dismissal, and not under the principle of
"act of grace" for past services rendered. There are occasions when the
Court exercises liberality in granting financial awards to employees, but even
then they contemplate only the award of separation pay and/or financial
assistance, and only as a measure of social justicewhen the circumstances
of the case so warrant, such as instances of valid dismissal for causes other
than serious misconduct or those reflecting on the employees' moral
character.[27] Proper regard for the welfare of the labor sector should not
dissuade us from protecting the rights of management such that an award of
back wages should be forthcoming only when valid grounds exist to support
it.
An award of actual and moral damages is not proper as the dismissal
is not shown to be attended by bad faith, or was oppressive to labor, or done
in a manner contrary to morals, good customs or public policy. [28] Exemplary
damages are likewise not proper as these are imposed only if moral,
temperate, liquidated or compensatory damages are awarded.[29]
WHEREFORE, the judgment appealed from is MODIFIED. The
Decision of the Court of Appeals of 25 May 2001 in CA-G.R. SP No. 60284
affirming the Decision of the National Labor Relations Commission of 28
January 2000 declaring that respondent Joan Florendo-Flores had
abandoned her work is SET ASIDE. Petitioners Globe Telecom, Inc., Delfin
Lazaro, Jr., and Roberto Galang are ordered to pay respondent Joan
Florendo-Flores full back wages from the time she was constructively
dismissed on 15 May 1998 until the date of her effective reinstatement,
without qualification or deduction. Accordingly, petitioners are ordered to
cause the immediate reinstatement of respondent to her former position,
without loss of seniority rights and other benefits. No pronouncement as to
costs.
SO ORDERED.
 16

DECISION
PUNO, J.:

This case arose from a complaint for illegal dismissal, underpayment

of salaries and wages, overtime pay, holiday pay, 13th month pay and
service incentive leave pay filed by respondent Virgilio D. Dapiton against
petitioner Philippine Industrial Security Agency Corporation and its
President, Isidro Lirag.
The evidence for petitioner shows that on November 2, 1990 petitioner
hired respondent as a security guard. His initial assignment was at PCIBank
in Kalookan City. During his tour of duty at PCIBank on January 25, 1994,
respondent had a heated argument with his fellow security guard, Roderick
Lumen. The incident almost led to a shootout. After investigation, petitioners
chief investigator recommended their dismissal. Lumen was compelled to
resign while respondent was suspended from work for seven (7) days.
Petitioner alleged that respondent did not serve his suspension and
instead went on a leave of absence. Nonetheless, he was assigned at the
BPI Family Bank in Navotas when he reported back for duty. Allegedly,
respondent refused to accept his assignment.
In March 1994, respondent was assigned at Sevilla Candle Factory in
Malabon. Three (3) weeks later, he abandoned his post and went on
absence without leave (AWOL).
Respondent was given another assignment at Security Bank and Trust
Company. He was required to report for an interview and to undergo a
neurological examination. Respondent refused and allegedly again went on
AWOL.
On April 15, 1994, petitioner sent a telegram to respondent to report to
its office for a conference. Respondent did not show up. Instead, on April 22,
1994, respondent filed the present illegal dismissal case.
Respondent denied petitioners allegations. He claimed that after he
served his suspension, he was assigned at BPI Family Bank in Navotas. He
[G.R. No. 127421. December 8, 1999] accepted the new post. However, after a short period, he was relieved and
was transferred to the Mercury Drugstore in Grand Central, Kalookan
City. Again, after a brief tour of duty, he was relieved.
In March 1994, he was posted at Sevilla Candle Factory. While on
PHILIPPINE INDUSTRIAL SECURITY AGENCY duty, he witnessed some shabu dealers doing their illegal trade. Fearful for
CORPORATION, petitioner, vs. VIRGILIO DAPITON and the his life, he left his post and requested petitioner to transfer him to another
NATIONAL LABOR RELATIONS COMMISSION, respondents. post.

He admitted that his assignment at Security Bank did not materialize
for he failed to take the neurological test. He explained he could not pay the
examination fee in the amount of P250.00. He asked petitioner to pay the
said amount but it refused.
Respondent alleged that thereafter, he was reduced to a mere reliever
of absent security guards and was frequently transferred from one post to
another. His last assignment was at the Philippine Savings Bank (PSB) in
Makati. It lasted for only one (1) day. Since April 13, 1994, he was not given
any assignment. He reported to petitioners office regularly for his posting but
to no avail. Consequently, on April 22, 1994, he sued petitioner for illegal
dismissal and asked for separation pay. The case was docketed as NLRC-
NCR Case No. 00-04-03291-94.
On June 15, 1994, respondent filed an Amended Complaint and
Position Paper.[1] He prayed for reinstatement and further charged petitioner
with underpayment of salaries and wages, overtime pay, holiday pay, 13th
month pay and service incentive leave pay. He alleged that he was only
paid P4,800.00 monthly for 12 hours of work per day. He became a reliever
of absent security guards and sometimes he worked for more than eight (8)
hours. The daily rate before December 1993 was P118.00. The rate
increased by P17.00 in December 1993 and by P10.00 in April 1994. Thus,
using the rate of P118.00 alone, respondent claimed that petitioner should
have paid him as much as P5,752.50 per month.
On August 25, 1994, after further exchange of pleadings, Labor Arbiter
Felipe Pati issued an order declaring the case as submitted for
decision.[2] Nonetheless, on October 24, 1994, petitioner filed a Motion to
Admit to rebut respondents money claims.[3] Attached to the motion was a
summary of the computation of the salaries, overtime pay, 13th month pay
and other monetary benefits allegedly received by respondent from 1992-
1994. Petitioner did not submit the employment records and payrolls of
respondent for the said period allegedly because they were
voluminous. However, petitioner undertook to submit said documents should
the labor arbiter require it. Additionally, its managing director executed an
affidavit[4] attesting to the truthfulness of its computation per the existing
records of the company. The motion was not acted upon.
On December 14, 1994, Labor Arbiter Felipe P. Pati rendered a
decision[5] finding petitioner liable for constructive dismissal. Essentially, the
labor arbiter found that from 1990 up to 1993, respondent was assigned at
PCIBank in Kalookan City. After his suspension on January 26, 1994,
respondent was transferred frequently to different posts and despite its
accusation that respondent was always absent from work, it continued to
give him new assignments and did not take any disciplinary action against
him. Thus, the labor arbiter concluded that said transfers were a mere
17
scheme of petitioner to ease out respondent from work. The labor arbiter
ordered respondents reinstatement with payment of backwages. Moreover,
petitioner and its president, Isidro Lirag, were required to pay the sum
of P74,844.24, representing respondents wage differential, overtime pay,
13th month pay and night shift differential.
Petitioner and Lirag appealed to the NLRC.
The NLRC dismissed the appeal, albeit respondent Isidro Lirag was
held not liable for the money claims of respondent. The fallo of the NLRC
decision reads:[6]
WHEREFORE, the appealed Decision is hereby AFFIRMED, except the
awards, conformably with this Resolution, shall be solely the liability of
(petitioner) appellant agency.
Petitioners motion for reconsideration was denied on July 31,
1996.[7] Hence, this petition. Petitioner contends that the NLRC gravely
abused its discretion in:
I
DENYING PETITIONERS MOTION FOR RECONSIDERATION AND
AFFIRMING THE LABOR ARBITERS FINDING OF ILLEGAL
DISMISSAL NOTWITHSTANDING THE FACT THAT THERE WERE
OVERWHELMING EVIDENCE TO SHOW THAT IT WAS THE
PRIVATE RESPONDENT HIMSELF WHO ABANDONED HIS POST
AND REFUSED PETITIONERS OFFER OF NEW ASSIGNMENT;
II
AFFIRMING THE DECISION OF THE LABOR ARBITER HOLDING
PETITIONER LIABLE FOR UNDERPAYMENT SOLELY ON THE
BASIS OF PRIVATE RESPONDENTS UNSUBSTANTIATED
ALLEGATIONS OR CLAIMS AND AT THE SAME TIME, TOTALLY
DISREGARDING PETITIONERS EVIDENCE.
The petition is partly meritorious.
The first issue is substantivewhether petitioner constructively dismissed
the respondent. Petitioner contends that there was no dismissal,
constructive or otherwise. Petitioner claims that respondent abandoned his
post, refused to accept his new assignments and went on AWOL.

The records belie petitioners posture.
Constructive dismissal is defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer
involving a demotion in rank and diminution in pay. [8] On the other
hand, abandonment of work means a clear, deliberate and unjustified
refusal of an employee to resume his employment and a clear intention to
sever the employer-employee relationship.[9] Abandonment is
incompatible with constructive dismissal.[10]
In the case at bar, we hold that there was no deliberate intent on the
part of the respondent to abandon his employment with petitioner. The clear
evidence that respondent did not wish to be separated from work is that,
after his last assignment on April 12, 1994, he reported to petitioners office
regularly for a new posting but to no avail. He then lost no time in filing the
illegal dismissal case. An employee who forthwith takes steps to protest his
layoff cannot by any logic be said to have abandoned his work.[11]
Moreover, respondent's failure to assume his posts in Sevilla Candle
Factory and the Security Bank and Trust Company is not without reason. He
explained that he requested for a transfer of assignment from Sevilla Candle
Factory because he feared for his life after he witnessed shabu dealers
doing their business in his workstation. As regards the Security Bank
assignment, he failed to take the neurological test for lack of money to pay
for the examination fee.
Petitioner cannot overinflate the significance of the fact that respondent
often absented himself from work without an approved leave. It is a settled
rule that mere absence or failure to report for work is not tantamount to
abandonment of work.[12] Even the failure to report for work after a notice to
return to work has been served does not necessarily constitute
abandonment nor does it bar reinstatement.[13]
The burden of proving that respondent has abandoned his job rests
with petitioner. However, petitioner failed miserably to discharge the
burden. The records show no memoranda concerning respondents alleged
unauthorized absences and refusal to work. Even the telegram petitioner
sent to respondent after he allegedly went on AWOL merely required
respondent to report to its office for a conference but did not mention
anything about his absences. We find it incredible that petitioner did not
even write respondent on his alleged refusal to accept the posts assigned to
him and the abandonment of his posts considering that such acts constitute
willful disobedience and gross neglect of duty which are valid grounds for
dismissal.[14]
Petitioner could have also submitted the daily time records of
respondent to prove that he indeed went on AWOL. It did not. Instead, it only
18
submitted the following documents, viz: a letter-petition of respondents
fellow security guards demanding respondents removal from their unit for his
alleged arrogance (Annex A); the result of petitioners investigation on the
January 25, 1994 incident at the PCIBank, where its chief investigator
recommended the dismissal of respondent and Lumen from the service
(Annex B); a memorandum dated January 26, 1994, addressed to
respondent, informing the latter of his suspension for seven (7) days due to
his involvement in the January 25, 1994 incident (Annex C); a letter of
introduction dated April 15, 1994, addressed to Security Bank and Trust
Company, issued by Mr. Isidro Lirag for the benefit of respondent for his
possible detail at said bank (Annex D), and a telegram dated April 15, 1994
allegedly sent by petitioner to respondent, requiring him to report to
petitioners office for a conference.
By no stretch of the imagination can the foregoing documents prove
that respondent has abandoned his job or that he unjustifiably refused the
new posts assigned to him. They only show that respondent had bad
relationship with his fellow security guards and that petitioner was justified in
suspending and subsequently relieving him from his post at PCIBank.
Petitioner contends that respondent was only provisionally relieved
from his last post and not dismissed from employment. Hence, the filing of
the illegal dismissal case on April 22, 1994 was premature. If at all, it is
argued that respondent should be considered on temporary off-detail
status. Petitioner relies on the case of Superstar Security Agency, Inc. vs.
NLRC,[15] where we held that placing an employee on temporary off-detail
is not equivalent to dismissal provided that such temporary inactivity should
continue only for a period of six (6) months. Otherwise, the security agency
concerned could be held liable for constructive dismissal under Article 287
(now Article 286) of the Labor Code.
Petitioners argument lacks merit. The case of Superstar Security
Agency does not apply to the case at bar as it was decided on a different
factual milieu. In said case, the security guard was temporarily sidelined
because the agencys client, SMY, did not renew its security contract
pursuant to its cost-cutting program. The agency was constrained to put the
guard detailed at SMY on a floating status for lack of available post. We then
held that there was no constructive dismissal to speak of, taking into
consideration that, at times, security guards could be placed on temporary
off-detail as their assignments primarily depend on the contracts entered into
by the security agency with third parties. The ruling was anchored in Article
286 of the Labor Code. It reads:
Art. 286. When employment not deemed terminated.The bona fide
suspension of the operation of a business or undertaking for a period not

exceeding six (6) months, or the fulfillment by the employee of a military or
civic duty shall not terminate employment. In all such cases, the employer
shall reinstate the employee to his former position without loss of seniority
rights if he indicates his desire to resume his work not later than one (1)
month from the resumption of operations of his employer or from his relief
from the military or civic duty.
We stress that Article 286 applies only when there is a bona
fide suspension of the employers operation of a business or
undertaking for a period not exceeding six (6) months. In such a case,
there is no termination of employment but only a temporary displacement of
employees, albeit the displacement should not exceed six (6) months. The
paramount consideration should be the dire exigency of the business of the
employer that compels it to put some of its employees temporarily out of
work. In security services, the temporary off-detail of guards takes place
when the security agencys clients decide not to renew their contracts with
the security agency, resulting in a situation where the available posts under
its existing contracts are less than the number of guards in its roster. [16]
In the case at bar, the records do not show that respondent had to be
placed on temporary off-detail for lack of available post. Petitioner just
stopped giving respondent his assignment after his duty at the PSB. It was
the straw that broke the camels back, so to speak, as far as respondent was
concerned.
This is not to denigrate the inherent prerogative of an employer to
transfer and reassign its employees to meet the requirements of its
business.[17] For instance, where the rotation of employees from the day shift
to the night shift was a standard operating procedure of management, an
employee who had been on the day shift for sometime may be transferred to
the night shift.[18] Similarly, transfers can be effected pursuant to a company
policy to transfer employees from one place of work to another place of
work owned by the employer to prevent connivance among
them.[19] Likewise, we have affirmed the right of an employer to transfer an
employee to another office in the exercise of what it took to be sound
business judgment and in accordance with pre-determined and
established office policy and practice. Particularly so when no illicit,
improper or underhanded purpose can be ascribed to the employer and the
objection to the transfer was grounded solely on the personal inconvenience
or hardship that will be caused to the employee by virtue of the transfer. [20] In
security services, the transfer connotes a changing of guards or exchange of
their posts, or their reassignment to other posts. However, all are considered
given their respective posts.
19
Be that as it may, the prerogative of the management to transfer its
employees must be exercised without grave abuse of discretion. The
exercise of the prerogative should not defeat an employee's right to security
of tenure. The employers privilege to transfer its employees to different
workstations cannot be used as a subterfuge to rid itself of an
undesirable worker.[21]
In the case at bar, the evidence show that respondent enjoyed a single
post at the PCIBank for three (3) years. It changed after his suspension. In a
span of less than three (3) months, respondent was assigned to at least four
(4) establishments, namely, BPI Family Bank, Mercury Drugstore, Sevilla
Candle Factory and Philippine Savings Bank. He suddenly found himself
being tossed to different posts and relieving absent security
guards. Respondent was then left uncertain as to when and where his next
assignments would be. Considering the totality of the facts of this case, the
labor officials below rightly found that the frequent transfers of respondent to
different posts on short periods of time were indirect ways of dismissing
him.[22]
The second issue is proceduraldid public respondent gravely abuse its
discretion in affirming petitioners monetary liabilities without considering the
evidence it submitted to the labor arbiter?
The settled rule is that the NLRC is not precluded from receiving
evidence on appeal as technical rules of evidence are not binding in labor
cases.[23] In fact, labor officials are mandated by the Labor Code to use
every and all reasonable means to ascertain the facts in each
case speedily and objectively, without regard to technicalities of law or
procedure, all in the interest of due process. [24] Thus, in Lawin Security
Services vs. NLRC[25] and Bristol Laboratories Employees Association-
DFA vs. NLRC,[26] we held that even if the evidence was not submitted to
the labor arbiter, the fact that it was duly introduced on appeal to the NLRC
is enough basis for the latter to be more judicious in admitting the same,
instead of falling back on the mere technicality that said evidence can no
longer be considered on appeal. Certainly, the first course of action would be
more consistent with equity and the basic notions of fairness.
We find no cogent reason to disregard the above ruling.
We note that the labor arbiters decision hardly mentioned the basis for
allowing the money claims of respondent. The labor arbiter merely held that
As regards the issue of money claims, we likewise find for the
complainants. Records show that complainant was not paid the correct
minimum wage, overtime pay, night shift differential and 13th month pay.

WHEREFORE, foregoing premises considered, judgment is hereby
rendered finding respondents (petitioners) to have illegally dismissed the
complainant. Accordingly, respondents (petitioners) are hereby ordered to
reinstate complainant with backwages. Respondents (Petitioners) are
likewise ordered to pay complainant the amount of Seventy Four Thousand
Eight Hundred Forty Four Pesos and 24/100 (P74,844.24), representing his
wage differential, overtime pay, 13th month pay, night shift differential,
computation of which is hereto attached.
Other claims are hereby dismissed for lack of merit.
SO ORDERED.
The computation of the sum awarded to respondent is also vague,
thus:
RE: COMPUTATION OF UNDERPAYMENT AND OVERTIME PAY AS PER
INSTRUCTION OF L.A. FELIPE P. PATI
Underpayment 12-hours
4/22/91 - 12/15/93 = 31.77 mos.
P6,826.37 - P4,800 = P2,026.37
x 31.77 mos = . . . . . . . . . . . . . . . . . . . . . . . . .P64,377.77
12/16/93 3/31/94 = 3.5/ mos.
P7,790.42 P4,800 = P2,990.42
X 3.5 mos. = . . . . . . . . . . . . . . . . . . . . . . . . . . 10,466.47
Total . . . . . . . . . . . . . . P74,844.24
Manila, Philippines, December 20, 1994.
It assumes that respondent rendered overtime work from April 22, 1991 to
March 31, 1994. We could not even tell from said computation which part of
the sum awarded was for the wage differential, 13th month pay, overtime
pay, etc.Moreover, respondents salary and other monetary benefits, if any,
from April 1-12, 1994, were not included in the computation.
20
Even the computation of the backwages was not specified, although
the labor arbiters decision stated that said claim for backwages was already
included in the sum of P74,844.24. However, judging from the dates
mentioned in the computation, i.e., from April 22, 1991 to March 31, 1994, it
appears that no backwages were awarded. Backwages have to be paid by
an employer as part of the price or penalty he has to pay for illegally
dismissing his employee. It is computed from the time of the employees
illegal dismissal (or from the time his compensation was withheld from him)
up to the time of his reinstatement.[27]
Article 291 of the Labor Code should also be considered. It reads:
Art. 291. Money claims.All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three
(3) years from the time the cause of action accrued; otherwise, they shall be
forever barred.
Clearly, respondents money claims should be filed within three (3) years
from the time his cause of action accrued or forever be barred by
prescription. Respondent filed his money claims on June 15, 1994, through
his Amended Complaint and Position Paper. His money claims from
November 2, 1990 to June 14, 1992, are barred by prescription pursuant to
Article 291 of the Labor Code. Apparently, the labor arbiter mistakenly relied
on the date of filing of the original complaint of respondent. It is true that said
complaint was filed on April 22, 1994, however, at that time, respondent
merely accused petitioner of illegal dismissal and has not yet charged
petitioner with underpayment of wages or non-payment of overtime pay,
13th month pay, etc.
Before the labor arbiter decided the case, petitioner had already
submitted its computation of the salaries and other benefits received by
respondent during his employment. Yet, the labor arbiter simply ignored
petitioners evidence and decided the case without even stating the basis of
his decision. The labor arbiters failure to discuss the facts and the law which
would support the award of P74,844.24 in favor of the respondent should
have prompted the NLRC to remand the case to the labor arbiter for further
proceedings to determine the monetary liabilities of petitioner to
respondent. A stringent application of procedural rules may be relaxed to
meet the ends of substantial justice.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The
assailed decision of the National Labor Relations Commission in NLRC-NCR
No. 00-04-03291-94, dated May 10, 1996, is AFFIRMED, subject to the
modification that the monetary award in favor of respondent Virgilio Dapiton
in the sum of P74,844.24 is SET ASIDE. Accordingly, the case is remanded
 21

to the labor arbiter for further proceedings solely for the purpose of
determining the monetary liabilities of petitioner, if any.
SO ORDERED.