G.R. No.

179652 March 6, 2012

PEOPLE'S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.), Petitioner, vs. THE SECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, Respondents.R E S O L U T I O N

VELASCO, JR., J.:

In a Petition for Certiorari under Rule 65, petitioner People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and
Resolution of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No. 00855.

Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No.
VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution
of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.1 After the conduct of summary investigations, and after
the parties submitted their position papers, the DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled
to his money claims.2 Petitioner sought reconsideration of the Director’s Order, but failed. The Acting DOLE Secretary dismissed petitioner’s appeal
on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond. When the matter was brought
before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been
given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129
of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.3

In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed. The dispositive portion
of the Decision reads as follows:

WHEREFORE, the petition is GRANTED. The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in
C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE. The Order of the then Acting Secretary of the Department of Labor and Employment
dated 27 January 2005 denying petitioner’s appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February
2004, respectively, are ANNULLED. The complaint against petitioner is DISMISSED.4

The Court found that there was no employer-employee relationship between petitioner and private respondent. It was held that while the DOLE may
make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement
power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was held to be the
primary agency in determining the existence of an employer-employee relationship. This was the interpretation of the Court of the clause "in cases
where the relationship of employer-employee still exists" in Art. 128(b).5

From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as
to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an
employer-employee relationship.6 In its Comment,7 the DOLE sought clarification as well, as to the extent of its visitorial and enforcement power under
the Labor Code, as amended.

The Court treated the Motion for Clarification as a second motion for reconsideration, granting said motion and reinstating the petition.8 It is apparent
that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.

Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery
of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement, or that the
aggregate money claims not exceed PhP 5,000. RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of
Labor, did away with the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP
5,000. The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship.

It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has
no jurisdiction. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads, "Notwithstanding the provisions of Articles
129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment
or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code
and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of
inspection." It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power
of the DOLE. The question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so,
to what extent?

The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE, that is, the determination
of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE. But even in
conceding the power of the DOLE to determine the existence of an employer-employee relationship, the Court held that the determination of the
existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding by the DOLE is merely preliminary.

This conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee relationship. No procedure was
laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC. The law did not say that the DOLE
would first seek the NLRC’s determination of the existence of an employer-employee relationship, or that should the existence of the employer-
employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to determine whether or not an
employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the
Labor Code, as amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the same guide the courts
themselves use. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; (4) the employer’s power to control the employee’s conduct.9 The use of this test is not solely limited
to the NLRC. The DOLE Secretary, or his or her representatives, can utilize the same test, even in the course of inspection, making use of the same
evidence that would have been presented before the NLRC.

The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-
employee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the absence
of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and
it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC.
The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no
employer-employee relationship existed in the first place.

The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of competing conclusions between
the DOLE and the NLRC. The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings,
to the exclusion of the NLRC, and this We believe is the more prudent course of action to take.

This is not to say that the determination by the DOLE is beyond question or review.1avvphi1 Suffice it to say, there are judicial remedies such as a
petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result
in an affirmative finding. The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction
over the case. It must not be precluded from being able to reach its own conclusions, not by the parties, and certainly not by this Court.

Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an
employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the
Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of the DOLE, under
Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under Art. 217. The view states that despite the
wording of Art. 128(b), this would only apply in the course of regular inspections undertaken by the DOLE, as differentiated from cases under Arts.
129 and 217, which originate from complaints. There are several cases, however, where the Court has ruled that Art. 128(b) has been amended to
expand the powers of the DOLE Secretary and his duly authorized representatives by RA 7730. In these cases, the Court resolved that the DOLE
had the jurisdiction, despite the amount of the money claims involved. Furthermore, in these cases, the inspection held by the DOLE regional director
was prompted specifically by a complaint. Therefore, the initiation of a case through a complaint does not divest the DOLE Secretary or his duly
authorized representative of jurisdiction under Art. 128(b).

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation,
and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the
NLRC. If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the
DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code,
which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other
terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing
employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a
petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by
this Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence
presented. Private respondent presented self-serving allegations as well as self-defeating evidence.10 The findings of the Regional Director were not
based on substantial evidence, and private respondent failed to prove the existence of an employer-employee relationship. The DOLE had no
jurisdiction over the case, as there was no employer-employee relationship present. Thus, the dismissal of the complaint against petitioner is proper.

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE’s
visitorial and enforcement power, the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an
employer-employee relationship, to the exclusion of the NLRC.

SO ORDERED.

G.R. No. 131750 November 16, 1998

FRANCISCO GUICO, JR., doing business under the name and style of COPYLANDIA SERVICES &
TRADING, petitioner, vs. THE HON. SECRETARY OF LABOR & EMPLOYMENT LEONARDO A.
QUISUMBING, THE OFFICE OF REGIONAL DIRECTOR OF REGION I, DEP'T. OF LABOR &
EMPLOYMENT, ROSALINA CARRERA, ET. AL., respondents.

PUNO, J.:

This is a petition for certiorari seeking a review of two (2) Orders 1 issued by the respondent Secretary of
Labor and Employment dismissing petitioner's appeal.
The case started when the Office of the Regional Director, Department of Labor and Employment
(DOLE), Region I, San Fernando, La Union, received a letter-complaint dated April 25, 1995, requesting
for an investigation of petitioner's establishment, Copylandia Services & Trading, for violation of labor
standards laws. Pursuant to the visitorial and enforcement powers of the Secretary of Labor and
Employment or his duly authorized representative under Article 128 of the Labor Code, as amended,
inspections were conducted at Copylandia's outlets on April 27 and May 2, 1995. The inspections
yielded the following violations involving twenty-one (21) employees who are copier operators: (1)
underpayment of wages; (2) underpayment of 13th month pay; and (3) no service incentive leave with
pay.2

The first hearing of the case was held on June 14, 1995, where petitioner was represented by Joseph
Botea, Officer-in-Charge of the Dagupan City outlets, while the 21 employees were represented by
Leilani Barrozo, Gemma Gales, Majestina Raymundo and Laureta Clauna. It was established that a
copier operator was receiving a daily salary ranging from P35.00 to P60.00 plus commission of P20.00
per P500.00 worth of photocopying. There was also incentive pay of P20.00 per P250.00 worth of
photocopying in excess of the first P500.00.3

On July 13, 1995, petitioner's representative submitted a Joint Affidavit signed and executed by the 21
employees expressing their disinterest in prosecuting the case and their waiver and release of petitioner
from his liabilities arising from non-payment and underpayment of their salaries and other benefits.
Individually signed documents dated December 21, 1994, purporting to be the employees' Receipt,
Waiver and Quitclaim were also submitted.4

In the investigation conducted by Hearing Officer Adonis Peralta on July 21, 1995, the 21 employees
claimed that they signed the Joint Affidavit for fear of losing their jobs. They added that their daily salary
was increased to P92.00 effective July 1, 1995, but the incentive and commission schemes were
discontinued. They alleged that they did not waive the unpaid benefits due to them.5

On October 30, 1995, Regional Director Guerrero N. Cirilo issued an Order6 favorable to the 21
employees. First, he ruled that the purported Receipt, Waiver and Quitclaim dated December 21 and 22,
1994, could not cause the dismissal of the labor standards case against the petitioner since the same
were executed before the filing of the said case. Moreover, the employees repudiated said waiver and
quitclaim. Second, he held that despite the salary increase granted by the petitioner, the daily salary of
the employees was still below the minimum daily wage rate of P119.00 under Wage Order No. RB-I-03.
Thirdly, he held that the removal of the commission and incentive schemes during the pendency of the
case violated the prohibition against elimination or diminution of benefits under Article 100 of the Labor
Code, as amended. The dispositive portion of the Order states:

WHEREFORE, premises considered and pursuant to the Rules on the Disposition of Labor
Standards Cases in the Regional Offices issued by the Secretary of Labor and
Employment on 16 September 1987, respondent Copylandia Services and Trading thru its
owner/manager Mr. Francisco Guico, is hereby ORDERED to pay the employees the
amount of ONE MILLION EIGHTY ONE THOUSAND SEVEN HUNDRED FIFTY SIX PESOS
AND SEVENTY CENTAVOS (P1,081,756.70) representing their backwages, distributed as
follows:

1. Rosalina Carrera — P 68,010.91

2. Joanna Ventura — 28,568.10

3. Mercelita Paredes — 68,010.91

4. Aida Licuanan — 68,010.91

5. Gemma Gales — 68,010.91

6. Clotilda Zarata — 27,808.33

7. Consolacion Miguel — 65,708.28

8. Gemma Macalalay — 68,010.91

 9. Wandy Aquino — 19,559.58

10. Laureta Clauna — 68,010.91

11. Josephine Valdez — 27,808.33

12. Leilani Berrozo — 27,808.33

13. Majestina Raymundo — 68,010.91

14. Theresa Rosario — 68,010.91

15. Edelyn Maramba — 68,010.91

16. Yolly Dimabayao — 40,380.60

17. Vilma Calaguin — 68,010.91

18. Maila Balolong — 40,380.60

19. Clarissa Villena — 27,808.33

20. Maryann Galinato — 68,010.91

21. Desiree Cabansag — 27,808.33

——————

Total P1,081,756.70.

and to submit proof of payment to this Office within seven (7) day is from receipt hereof.
Otherwise, a Writ of Execution will be issued to enforce this Order.

SO ORDERED.7

Petitioner received a copy of the Order on November 10, 1995. On November 15, 1995, petitioner filed a
Notice of Appeal.8 The next day, he filed a Memorandum of Appeal accompanied by a Motion to Reduce
Amount of Appeal Bond and a Manifestation of an Appeal Bond.

In his appeal memorandum,9 petitioner questioned the jurisdiction of the Regional Director citing Article
123 of the Labor Code, as amended, 10 and Section 1, Rule IX of the Implementing Rules of Republic Act
No. 6715. 11 He argued that the Regional Director has no jurisdiction over the complaint of the 21
employees since their individual monetary claims exceed the P5,000.00 limit. He alleged that the
Regional Director should have indorsed the case to the Labor Arbiter for proper adjudication and for a
more formal proceeding where there is ample opportunity for him to present evidence to contest the
claims of the employees. He further alleged that the Regional Director erred in computing the monetary
award since it was done without regard to the actual number of days and time worked by the employees.
He also faulted the Regional Director for not giving credence to the Receipt, Waiver and Quitclaim of the
employees.

In the Motion to Reduce Amount of Appeal Bond, 12 petitioner claimed he was having difficulty in raising
the monetary award which he denounced as exorbitant. Pending resolution of the motion, he posted an
appeal bond in the amount of P105,000.00 insisting that the jurisdiction of the Regional Director is
limited to claims of P5,000.00 per employee and there were 21 employees involved in the case.

On November 22, 1995, petitioner also filed a request to hold in abeyance any action relative to the case
for a possible amicable settlement with the employees. 13

On January 10, 1996, District Labor Officer Adonis Peralta forwarded a Report showing that the
petitioner and most of the 21 employees had reached a compromise agreement. The Release, Waiver
and Quitclaim was signed by the following employees and show the following amounts they
received, viz:

1. Aida Licuanan — P 3,000.00

2. Clarissa Villena — 3,000.00

3. Gemma Gales — 3,000.00

4. Desiree Cabansag — 3,000.00

5. Clotilda Zarata — 3,000.00

6. Consolacion Miguel — 5,000.00

7. Josephine Valdez — 3,000.00

8. Maryann Galinato — 5,000.00

9. Theresa Rosario — 3,000.00

10. Yolly Dimabayao — 3,000.00

11. Vilma Calaguin — 3,000.00

12. Gemma Macalalay — 3,000.00

13. Edelyn Maramba — 5,000.00

14. Charito Gonzales — 3,000.00

15. Joanna Ventura — 3,000.00

Four (4) employees did not sign in the compromise agreement. They insisted that they be paid
what is due to them according to the Order of the Regional Director in the total amount of
P231,841.06. They were Laureta Clauna, Majestina Raymundo, Leilani Barrozo and Rosalina
Carrera. 14

In a letter 15 dated February 23, 1996, the Regional Director informed petitioner that he could not give due
course to his appeal since the appeal bond of P105,000.00 fell short of the amount due to the 4
employees who did not participate in the settlement of the case. In the same letter, he directed petitioner
to post, within ten (10) days from receipt of the letter, the amount of P126,841.06 or the difference
between the monetary award due to the 4 employees and the appeal bond previously posted.

On March 13, 1996, petitioner filed a Motion for Reconsideration to Reduce Amount of Appeal Bond. 16 He
manifested that he has closed down his business operations due to severe financial losses and
implored the Regional Director to accept the appeal bond already filed for reasons of justice and equity.

In an Order dated December 3, 1936, the respondent Secretary denied the foregoing Motion for
Reconsideration on the ground that the directive from the Regional Director to post an additional surety
bond is contained in a "mere letter" which cannot be the proper subject of a Motion for Reconsideration
and/or Appeal before his office. He added that for failure of the petitioner to post the correct amount of
surety or cash bond, his appeal was not perfected following Article 128 (b) of the Labor Code, as
amended. Despite the non-perfection of the appeal, respondent Secretary looked into the Receipt,
Waiver and Quitclaim signed by the employees and rejected it on the ground that the consideration was
unconscionably inadequate. He ruled, nonetheless, that the amount received by the said employees
should be deducted from the judgment award and the difference should be paid by the petitioner.
On December 26, 1996, petitioner filed a Motion for Reconsideration. On February 13, 1997, he filed a
Motion to Admit Additional Bond and posted the amount of P126,841.06 in compliance with the order of
the Regional Director in his letter dated February 13, 1996. 17

On October 24, 1997, the respondent Secretary denied the Motion for Reconsideration. He ruled that the
Regional Director has jurisdiction over the case citing Article 128 (b) of the Labor Code, as amended. He
pointed out that Republic Act No. 7730 repealed the jurisdictional limitations imposed by Article 129 on
the visitorial and enforcement powers of the Secretary of Labor and Employment or his duly authorized
representatives. In addition, he held that petitioner is now estopped from questioning the computation
made by the Regional Director as a result of the compromise agreement he entered into with the
employees. Lastly, he reiterated his ruling that the Receipt, Waiver and Quitclaim signed by the
employees was not valid.

Petitioner is now before this Court raising the following issues:

Whether or not Public Respondent acted with grave abuse of discretion amounting to lack
or in excess of jurisdiction when he set aside the Release and Quitclaim executed by the
seventeen (sic) complainants before the Office of the Regional Director when Public
Respondent himself ruled that the Appeal of the Petitioner was not perfected and,
therefore, Public Respondent did not acquire jurisdiction over the case.

II

Whether or not Public Respondent acted with grave abuse of discretion amounting to lack
or in excess of jurisdiction when in complete disregard of Article 227 of the Labor Code,
Public Respondent set aside and nullified the Release and Quitclaim executed by the
seventeen (sic) complainants.

III

Whether or not Public Respondent acted with grave abuse of discretion amounting to lack
or in excess of jurisdiction when he affirmed the Order of the Regional Director who, in
complete disregard of the due process requirements of law, computed the monetary
award given to the private respondents without notice to petitioner and without benefit of
hearing.

IV

Whether or not petitioner is deemed estopped from appealing the decision of the Regional
Director when it (sic) entered into a compromise settlement with complainants/private
respondents.

The threshold issues that need to be settled in this case are: (1) whether or not the Regional Director
has jurisdiction over the instant labor standards case, and (2) whether or not petitioner perfected his
appeal.

With regard to the issue of jurisdiction, petitioner alleged that the Regional Director has no jurisdiction
over the instant case since the individual monetary claims of the 21 employees exceed P5,000.00. He
further argued that following Article 129 of the Labor Code, as amended, and Section 1, Rule IX of the
Implementing Rules of Republic Act No. 6715, the jurisdiction over this case belongs to the Labor
Arbiter, and the Regional Director should have indorsed it to the appropriate regional branch of the
National Labor Relations Commission (NLRC). On the other hand, the respondent Secretary held that the
jurisdictional limitation imposed by Article 129 on his visitorial and enforcement power under Article 128
(b) of the Labor Code, as amended, has been repealed by Republic Act No. 7730. 18 He pointed out that
the amendment "[n]otwithstanding the provisions of Article 129 and 217 of the Labor Code to the
contrary" erased all doubts as to the amendatory nature of the new law, and in effect, overturned this
Court's ruling in the case ofServando's Inc. v. Secretary of Labor and Employment. 19
We sustain the jurisdiction of the respondent Secretary. As the respondent correctly pointed out, this
Court's ruling in Servando — that the visitorial power of the Secretary of Labor to order and enforce
compliance with labor standard laws cannot be exercised where the individual claim exceeds P5,000.00,
can no longer be applied in view of the enactment of R.A. No. 7730 amending Article 128(b) of the Labor
Code, viz:

Art. 128 (b) — Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly authorized representatives shall have the
power to issue compliance orders to give effect to the labor standards provisions of the
Code and other labor legislation based on the findings of the labor employment and
enforcement officers or industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the course
of inspection.

An order issued by the duly authorized representative of the Secretary of Labor and
Employment under this article may be appealed to the latter. In case said order involves a
monetary award, an appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the
Secretary of Labor and Employment in the amount equivalent to the monetary award in
the order appealed from. (Emphasis supplied.)

The records of the House of Representatives 20 show that Congressmen Alberto S. Veloso and
Eriberto V. Loreto sponsored the law. In his sponsorship speech, Congressman Veloso
categorically declared that "this bill seeks to do away with the jurisdictional limitations imposed
through said ruling (referring to Servando) and to finally settle any lingering doubts on the
visitorial and enforcement powers of the Secretary of Labor and Employment." 21 Petitioner's
reliance on Servando is thus untenable.

The next issue is whether petitioner was able to perfect his appeal to the Secretary of Labor and
Employment. Article 128(b) of the Labor Code clearly provides that the appeal bond must be "in the
amount equivalent to the monetary award in the order appealed from." The records show that petitioner
failed to post the required amount of the appeal bond. His appeal was therefore not perfected.

IN VIEW WHEREOF, the petition for certiorari is dismissed. No pronouncement as to costs.

G.R. No. 118978 May 23, 1997

PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and GRACE DE GUZMAN, respondents.

REGALADO, J.:

Seeking relief through the extraordinary writ of certiorari, petitioner Philippine Telegraph and Telephone
Company (hereafter, PT & T) invokes the alleged concealment of civil status and defalcation of company funds
as grounds to terminate the services of an employee. That employee, herein private respondent Grace de
Guzman, contrarily argues that what really motivated PT & T to terminate her services was her having
contracted marriage during her employment, which is prohibited by petitioner in its company policies. She thus
claims that she was discriminated against in gross violation of law, such a proscription by an employer being
outlawed by Article 136 of the Labor Code.

Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary Project
Worker," for a fixed period from November 21, 1990 until April 20, 1991 vice one C.F. Tenorio who went on
maternity leave.1Under the Reliever Agreement which she signed with petitioner company, her employment was
to be immediately terminated upon expiration of the agreed period. Thereafter, from June 10, 1991 to July 1,
1991, and from July 19, 1991 to August 8, 1991, private respondent's services as reliever were again engaged
by petitioner, this time in replacement of one Erlinda F. Dizon who went on leave during both periods.2 After
August 8, 1991, and pursuant to their Reliever Agreement, her services were terminated.
On September 2, 1991, private respondent was once more asked to join petitioner company as a probationary
employee, the probationary period to cover 150 days. In the job application form that was furnished her to be
filled up for the purpose, she indicated in the portion for civil status therein that she was single although she had
contracted marriage a few months earlier, that is, on May 26, 1991.3

It now appears that private respondent had made the same representation in the two successive reliever
agreements which she signed on June 10, 1991 and July 8, 1991. When petitioner supposedly learned about the
same later, its branch supervisor in Baguio City, Delia M. Oficial, sent to private respondent a memorandum
dated January 15, 1992 requiring her to explain the discrepancy. In that memorandum, she was reminded about
the company's policy of not accepting married women for employment.4

In her reply letter dated January 17, 1992, private respondent stated that she was not aware of PT&T's policy
regarding married women at the time, and that all along she had not deliberately hidden her true civil
status.5Petitioner nonetheless remained unconvinced by her explanations. Private respondent was dismissed
from the company effective January 29, 1992,6 which she readily contested by initiating a complaint for illegal
dismissal, coupled with a claim for non-payment of cost of living allowances (COLA), before the Regional
Arbitration Branch of the National Labor Relations Commission in Baguio City.

At the preliminary conference conducted in connection therewith, private respondent volunteered the
information, and this was incorporated in the stipulation of facts between the parties, that she had failed to remit
the amount of P2,380.75 of her collections. She then executed a promissory note for that amount in favor of
petitioner7. All of these took place in a formal proceeding and with the agreement of the parties and/or their
counsel.

On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that private
respondent, who had already gained the status of a regular employee, was illegally dismissed by petitioner. Her
reinstatement, plus payment of the corresponding back wages and COLA, was correspondingly ordered, the
labor arbiter being of the firmly expressed view that the ground relied upon by petitioner in dismissing private
respondent was clearly insufficient, and that it was apparent that she had been discriminated against on account
of her having contracted marriage in violation of company rules.

On appeal to the National Labor Relations Commission (NLRC), said public respondent upheld the labor arbiter
and, in its decision dated April 29, 1994, it ruled that private respondent had indeed been the subject of an unjust
and unlawful discrimination by her employer, PT & T. However, the decision of the labor arbiter was modified
with the qualification that Grace de Guzman deserved to be suspended for three months in view of the dishonest
nature of her acts which should not be condoned. In all other respects, the NLRC affirmed the decision of the
labor arbiter, including the order for the reinstatement of private respondent in her employment with PT & T.

The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in its resolution
of November 9, 1994, hence this special civil action assailing the aforestated decisions of the labor arbiter and
respondent NLRC, as well as the denial resolution of the latter.

1. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but,
through the ages, men have responded to that injunction with indifference, on the hubristic conceit that women
constitute the inferior sex. Nowhere has that prejudice against womankind been so pervasive as in the field of
labor, especially on the matter of equal employment opportunities and standards. In the Philippine setting,
women have traditionally been considered as falling within the vulnerable groups or types of workers who must
be safeguarded with preventive and remedial social legislation against discriminatory and exploitative practices
in hiring, training, benefits, promotion and retention.

The Constitution, cognizant of the disparity in rights between men and women in almost all phases of social and
political life, provides a gamut of protective provisions. To cite a few of the primordial ones, Section 14, Article
II8 on the Declaration of Principles and State Policies, expressly recognizes the role of women in nation-building
and commands the State to ensure, at all times, the fundamental equality before the law of women and men.
Corollary thereto, Section 3 of Article XIII9 (the progenitor whereof dates back to both the 1935 and 1973
Constitution) pointedly requires the State to afford full protection to labor and to promote full employment and
equality of employment opportunities for all, including an assurance of entitlement to tenurial security of all
workers. Similarly, Section 14 of Article XIII 10 mandates that the State shall protect working women through
provisions for opportunities that would enable them to reach their full potential.

2. Corrective labor and social laws on gender inequality have emerged with more frequency in the years since
the Labor Code was enacted on May 1, 1974 as Presidential Decree No. 442, largely due to our country's
commitment as a signatory to the United Nations Convention on the Elimination of All Forms of Discrimination
Against Women (CEDAW). 11

Principal among these laws are Republic Act No. 6727 12 which explicitly prohibits discrimination against women
with respect to terms and conditions of employment, promotion, and training opportunities; Republic Act No.
6955 13which bans the "mail-order-bride" practice for a fee and the export of female labor to countries that cannot
guarantee protection to the rights of women workers; Republic Act No. 7192 14 also known as the "Women in
Development and Nation Building Act," which affords women equal opportunities with men to act and to enter
into contracts, and for appointment, admission, training, graduation, and commissioning in all military or similar
schools of the Armed Forces of the Philippines and the Philippine National Police; Republic Act No.
7322 15 increasing the maternity benefits granted to women in the private sector; Republic Act No. 7877 16 which
outlaws and punishes sexual harassment in the workplace and in the education and training environment; and
Republic Act No. 8042, 17 or the "Migrant Workers and Overseas Filipinos Act of 1995," which prescribes as a
matter of policy, inter alia, the deployment of migrant workers, with emphasis on women, only in countries where
their rights are secure. Likewise, it would not be amiss to point out that in the Family Code, 18 women's rights in
the field of civil law have been greatly enhanced and expanded.

In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138 thereof.
Article 130 involves the right against particular kinds of night work while Article 132 ensures the right of women
to be provided with facilities and standards which the Secretary of Labor may establish to ensure their health
and safety. For purposes of labor and social legislation, a woman working in a nightclub, cocktail lounge,
massage clinic, bar or other similar establishments shall be considered as an employee under Article 138. Article
135, on the other hand, recognizes a woman's right against discrimination with respect to terms and conditions
of employment on account simply of sex. Finally, and this brings us to the issue at hand, Article 136 explicitly
prohibits discrimination merely by reason of the marriage of a female employee.

3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection to labor
and security of tenure. Thus, an employer is required, as a condition sine qua non prior to severance of the
employment ties of an individual under his employ, to convincingly establish, through substantial evidence, the
existence of a valid and just cause in dispensing with the services of such employee, one's labor being regarded
as constitutionally protected property.

On the other hand, it is recognized that regulation of manpower by the company falls within the so-called
management prerogatives, which prescriptions encompass the matter of hiring, supervision of workers, work
assignments, working methods and assignments, as well as regulations on the transfer of employees, lay-off of
workers, and the discipline, dismissal, and recall of employees. 19 As put in a case, an employer is free to
regulate, according to his discretion and best business judgment, all aspects of employment, "from hiring to
firing," except in cases of unlawful discrimination or those which may be provided by law. 20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women
workers by our labor laws and by no less than the Constitution. Contrary to petitioner's assertion that it
dismissed private respondent from employment on account of her dishonesty, the record discloses clearly that
her ties with the company were dissolved principally because of the company's policy that married women are
not qualified for employment in PT & T, and not merely because of her supposed acts of dishonesty.

That it was so can easily be seen from the memorandum sent to private respondent by Delia M. Oficial, the
branch supervisor of the company, with the reminder, in the words of the latter, that "you're fully aware that the
company is not accepting married women employee (sic), as it was verbally instructed to you." 21 Again, in the
termination notice sent to her by the same branch supervisor, private respondent was made to understand that
her severance from the service was not only by reason of her concealment of her married status but, over and
on top of that, was her violation of the company's policy against marriage ("and even told you that married
women employees are not applicable [sic] or accepted in our company.") 22 Parenthetically, this seems to be the
curious reason why it was made to appear in the initiatory pleadings that petitioner was represented in this case
only by its said supervisor and not by its highest ranking officers who would otherwise be solidarily liable with the
corporation. 23

Verily, private respondent's act of concealing the true nature of her status from PT & T could not be properly
characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to
retain a permanent job in a stable company. In other words, she was practically forced by that very same illegal
company policy into misrepresenting her civil status for fear of being disqualified from work. While loss of
confidence is a just cause for termination of employment, it should not be simulated. 24 It must rest on an actual
breach of duty committed by the employee and not on the employer's caprices. 25 Furthermore, it should never
be used as a subterfuge for causes which are improper, illegal, or unjustified. 26

In the present controversy, petitioner's expostulations that it dismissed private respondent, not because the latter
got married but because she concealed that fact, does have a hollow ring. Her concealment, so it is claimed,
bespeaks dishonesty hence the consequent loss of confidence in her which justified her dismissal.

Petitioner would asseverate, therefore, that while it has nothing against marriage, it nonetheless takes umbrage
over the concealment of that fact. This improbable reasoning, with interstitial distinctions, perturbs the Court
since private respondent may well be minded to claim that the imputation of dishonesty should be the other way
around.

Petitioner would have the Court believe that although private respondent defied its policy against its female
employees contracting marriage, what could be an act of insubordination was inconsequential. What it submits
as unforgivable is her concealment of that marriage yet, at the same time, declaring that marriage as a trivial
matter to which it supposedly has no objection. In other words, PT & T says it gives its blessings to its female
employees contracting marriage, despite the maternity leaves and other benefits it would consequently respond
for and which obviously it would have wanted to avoid. If that employee confesses such fact of marriage, there
will be no sanction; but if such employee conceals the same instead of proceeding to the confessional, she will
be dismissed. This line of reasoning does not impress us as reflecting its true management policy or that we are
being regaled with responsible advocacy.

This Court should be spared the ennui of strained reasoning and the tedium of propositions which confuse
through less than candid arguments. Indeed, petitioner glosses over the fact that it was its unlawful policy
against married women, both on the aspects of qualification and retention, which compelled private respondent
to conceal her supervenient marriage. It was, however, that very policy alone which was the cause of private
respondent's secretive conduct now complained of. It is then apropos to recall the familiar saying that he who is
the cause of the cause is the cause of the evil caused.

Finally, petitioner's collateral insistence on the admission of private respondent that she supposedly
misappropriated company funds, as an additional ground to dismiss her from employment, is somewhat
insincere and self-serving. Concededly, private respondent admitted in the course of the proceedings that she
failed to remit some of her collections, but that is an altogether different story. The fact is that she was dismissed
solely because of her concealment of her marital status, and not on the basis of that supposed defalcation of
company funds. That the labor arbiter would thus consider petitioner's submissions on this supposed dishonesty
as a mere afterthought, just to bolster its case for dismissal, is a perceptive conclusion born of experience in
labor cases. For, there was no showing that private respondent deliberately misappropriated the amount or
whether her failure to remit the same was through negligence and, if so, whether the negligence was in nature
simple or grave. In fact, it was merely agreed that private respondent execute a promissory note to refund the
same, which she did, and the matter was deemed settled as a peripheral issue in the labor case.

Private respondent, it must be observed, had gained regular status at the time of her dismissal. When she was
served her walking papers on January 29, 1992, she was about to complete the probationary period of 150 days
as she was contracted as a probationary employee on September 2, 1991. That her dismissal would be effected
just when her probationary period was winding down clearly raises the plausible conclusion that it was done in
order to prevent her from earning security of tenure. 27 On the other hand, her earlier stints with the company as
reliever were undoubtedly those of a regular employee, even if the same were for fixed periods, as she
performed activities which were essential or necessary in the usual trade and business of PT & T. 28 The primary
standard of determining regular employment is the reasonable connection between the activity performed by the
employee in relation to the business or trade of the employer. 29

As an employee who had therefore gained regular status, and as she had been dismissed without just cause,
she is entitled to reinstatement without loss of seniority rights and other privileges and to full back wages,
inclusive of allowances and other benefits or their monetary equivalent. 30 However, as she had undeniably
committed an act of dishonesty in concealing her status, albeit under the compulsion of an unlawful imposition of
petitioner, the three-month suspension imposed by respondent NLRC must be upheld to obviate the impression
or inference that such act should be condoned. It would be unfair to the employer if she were to return to its fold
without any sanction whatsoever for her act which was not totally justified. Thus, her entitlement to back wages,
which shall be computed from the time her compensation was withheld up to the time of her actual
reinstatement, shall be reduced by deducting therefrom the amount corresponding to her three months
suspension.
4. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT & T.
The Labor Code state, in no uncertain terms, as follows:

Art. 136. Stipulation against marriage. — It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a woman shall not get married, or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of marriage.

This provision had a studied history for its origin can be traced to Section 8 of Presidential Decree No.
148, 31 better known as the "Women and
Child Labor Law," which amended paragraph (c), Section 12 of Republic Act No. 679, 32 entitled "An Act to
Regulate the Employment of Women and Children, to Provide Penalties for Violations Thereof, and for Other
Purposes." The forerunner to Republic Act No. 679, on the other hand, was Act No. 3071 which became law on
March 16, 1923 and which regulated the employment of women and children in shops, factories, industrial,
agricultural, and mercantile establishments and other places of labor in the then Philippine Islands.

It would be worthwhile to reflect upon and adopt here the rationalization in Zialcita, et al. vs. Philippine Air
Lines, 33 a decision that emanated from the Office of the President. There, a policy of Philippine Air Lines
requiring that prospective flight attendants must be single and that they will be automatically separated from the
service once they marry was declared void, it being violative of the clear mandate in Article 136 of the Labor
Code with regard to discrimination against married women. Thus:

Of first impression is the incompatibility of the respondent's policy or regulation with the codal
provision of law. Respondent is resolute in its contention that Article 136 of the Labor Code
applies only to women employed in ordinary occupations and that the prohibition against
marriage of women engaged in extraordinary occupations, like flight attendants, is fair and
reasonable, considering the pecularities of their chosen profession.

We cannot subscribe to the line of reasoning pursued by respondent. All along, it knew that the
controverted policy has already met its doom as early as March 13, 1973 when Presidential
Decree No. 148, otherwise known as the Women and Child Labor Law, was promulgated. But for
the timidity of those affected or their labor unions in challenging the validity of the policy, the
same was able to obtain a momentary reprieve. A close look at Section 8 of said decree, which
amended paragraph (c) of Section 12 of Republic Act No. 679, reveals that it is exactly the same
provision reproduced verbatim in Article 136 of the Labor Code, which was promulgated on May
1, 1974 to take effect six (6) months later, or on November 1, 1974.

It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code, all
policies and acts against it are deemed illegal and therefore abrogated. True, Article 132 enjoins
the Secretary of Labor to establish standards that will ensure the safety and health of women
employees and in appropriate cases shall by regulation require employers to determine
appropriate minimum standards for termination in special occupations, such as those of flight
attendants, but that is precisely the factor that militates against the policy of respondent. The
standards have not yet been established as set forth in the first paragraph, nor has the Secretary
of Labor issued any regulation affecting flight attendants.

It is logical to presume that, in the absence of said standards or regulations which are as yet to
be established, the policy of respondent against marriage is patently illegal. This finds support in
Section 9 of the New Constitution, which provides:

Sec. 9. The State shall afford protection to labor, promote full employment and equality in
employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the
relations between workers and employees. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work . .
..

Moreover, we cannot agree to the respondent's proposition that termination from employment of
flight attendants on account of marriage is a fair and reasonable standard designed for their own
health, safety, protection and welfare, as no basis has been laid therefor. Actually, respondent
claims that its concern is not so much against the continued employment of the flight attendant
merely by reason of marriage as observed by the Secretary of Labor, but rather on the
 consequence of marriage-pregnancy. Respondent discussed at length in the instant appeal the
supposed ill effects of pregnancy on flight attendants in the course of their employment. We feel
that this needs no further discussion as it had been adequately explained by the Secretary of
Labor in his decision of May 2, 1976.

In a vain attempt to give meaning to its position, respondent went as far as invoking the
provisions of Articles 52 and 216 of the New Civil Code on the preservation of marriage as an
inviolable social institution and the family as a basic social institution, respectively, as bases for
its policy of non-marriage. In both instances, respondent predicates absence of a flight attendant
from her home for long periods of time as contributory to an unhappy married life. This is pure
conjecture not based on actual conditions, considering that, in this modern world, sophisticated
technology has narrowed the distance from one place to another. Moreover, respondent
overlooked the fact that married flight attendants can program their lives to adapt to prevailing
circumstances and events.

Article 136 is not intended to apply only to women employed in ordinary occupations, or it should
have categorically expressed so. The sweeping intendment of the law, be it on special or
ordinary occupations, is reflected in the whole text and supported by Article 135 that speaks of
non-discrimination on the employment of women.

The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial
Corporation 34considered as void a policy of the same nature. In said case, respondent, in dismissing from the
service the complainant, invoked a policy of the firm to consider female employees in the project it was
undertaking as separated the moment they get married due to lack of facilities for married women. Respondent
further claimed that complainant was employed in the project with an oral understanding that her services would
be terminated when she gets married. Branding the policy of the employer as an example of "discriminatory
chauvinism" tantamount to denying equal employment opportunities to women simply on account of their sex,
the appellate court struck down said employer policy as unlawful in view of its repugnance to the Civil Code,
Presidential Decree No. 148 and the Constitution.

Under American jurisprudence, job requirements which establish employer preference or conditions relating to
the marital status of an employee are categorized as a "sex-plus" discrimination where it is imposed on one sex
and not on the other. Further, the same should be evenly applied and must not inflict adverse effects on a racial
or sexual group which is protected by federal job discrimination laws. Employment rules that forbid or restrict the
employment of married women, but do not apply to married men, have been held to violate Title VII of the United
States Civil Rights Act of 1964, the main federal statute prohibiting job discrimination against employees and
applicants on the basis of, among other things, sex. 35

Further, it is not relevant that the rule is not directed against all women but just against married women. And,
where the employer discriminates against married women, but not against married men, the variable is sex and
the discrimination is unlawful. 36 Upon the other hand, a requirement that a woman employee must remain
unmarried could be justified as a "bona fide occupational qualification," or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a general principle, such as the
desirability of spreading work in the workplace. A requirement of that nature would be valid provided it reflects an
inherent quality reasonably necessary for satisfactory job performance. Thus, in one case, a no-marriage rule
applicable to both male and female flight attendants, was regarded as unlawful since the restriction was not
related to the job performance of the flight attendants. 37

5. Petitioner's policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a
woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise
assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her
status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right. 38 Hence,
while it is true that the parties to a contract may establish any agreements, terms, and conditions that they may
deem convenient, the same should not be contrary to law, morals, good customs, public order, or public
policy. 39 Carried to its logical consequences, it may even be said that petitioner's policy against legitimate marital
bonds would encourage illicit or common-law relations and subvert the sacrament of marriage.

Parenthetically, the Civil Code provisions on the contract of labor state that the relations between the parties,
that is, of capital and labor, are not merely contractual, impressed as they are with so much public interest that
the same should yield to the common good. 40 It goes on to intone that neither capital nor labor should visit acts
of oppression against the other, nor impair the interest or convenience of the public. 41 In the final reckoning, the
danger of just such a policy against marriage followed by petitioner PT & T is that it strikes at the very essence,
ideals and purpose of marriage as an inviolable social institution and, ultimately, of the family as the foundation
of the nation. 42 That it must be effectively interdicted here in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land is not only in order but imperatively required.

ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and Telephone Company is hereby
DISMISSED for lack of merit, with double costs against petitioner.

SO ORDERED.

G.R. No. 94951 April 22, 1991

APEX MINING COMPANY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
SINCLITICA CANDIDO, respondents.

GANCAYCO, J.:

Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the
said firm? This is the novel issue raised in this petition.

Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to
perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was
paid on a piece rate basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month
which was ultimately increased to P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she
accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor Mila de
la Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident she was not able to continue
with her work. She was permitted to go on leave for medication. De la Rosa offered her the amount of P
2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she refused the offer
and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4,
1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and
Employment. After the parties submitted their position papers as required by the labor arbiter assigned to the
case on August 24, 1988 the latter rendered a decision, the dispositive part of which reads as follows:

WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent,
Apex Mining Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:

1 Salary

Differential –– P16,289.20

2. Emergency Living

Allowance –– 12,430.00

3. 13th Month Pay

Differential –– 1,322.32

4. Separation Pay

(One-month for

every year of

service [1973-19881) –– 25,119.30

 or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100
(P55,161.42).

SO ORDERED.1

Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission
(NLRC), wherein in due course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing
the appeal for lack of merit and affirming the appealed decision. A motion for reconsideration thereof was denied
in a resolution of the NLRC dated June 29, 1990.

Hence, the herein petition for review by certiorari, which appopriately should be a special civil action
for certiorari, and which in the interest of justice, is hereby treated as such.2 The main thrust of the petition is that
private respondent should be treated as a mere househelper or domestic servant and not as a regular employee
of petitioner.

The petition is devoid of merit.

Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic
servant" are defined as follows:

The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to
any person, whether male or female, who renders services in and about the employer's home and which
services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer's family.3

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the
employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. Such
definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other
similar househelps.

The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a

company, like petitioner who attends to the needs of the company's guest and other persons availing of said
facilities. By the same token, it cannot be considered to extend to then driver, houseboy, or gardener exclusively
working in the company, the staffhouses and its premises. They may not be considered as within the meaning of
a "househelper" or "domestic servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer.
While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home
or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former
instance they are actually serving the family while in the latter case, whether it is a corporation or a single
proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being
rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are
employees of the company or employer in the business concerned entitled to the privileges of a regular
employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the
business of the employer that such househelper or domestic servant may be considered as such as employee.
The Court finds no merit in making any such distinction. The mere fact that the househelper or domestic servant
is working within the premises of the business of the employer and in relation to or in connection with its
business, as in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that
such househelper or domestic servant is and should be considered as a regular employee of the employer and
not as a mere family househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the
Labor Code, as amended.

Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her
work. This argument notwithstanding, there is enough evidence to show that because of an accident which took
1âwphi1

place while private respondent was performing her laundry services, she was not able to work and was
ultimately separated from the service. She is, therefore, entitled to appropriate relief as a regular employee of
petitioner. Inasmuch as private respondent appears not to be interested in returning to her work for valid
reasons, the payment of separation pay to her is in order.
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC
are hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 162994 September 17, 2004

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON, petitioners, vs. GLAXO

WELLCOME PHILIPPINES, INC., Respondent.R E S O L U T I O N

TINGA, J.:

Confronting the Court in this petition is a novel question, with constitutional overtones, involving the validity of
the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor
company.

This is a Petition for Review on Certiorari assailing the Decision1 dated May 19, 2003 and the Resolution dated
March 26, 2004 of the Court of Appeals in CA-G.R. SP No. 62434.2

Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome Philippines, Inc. (Glaxo) as
medical representative on October 24, 1995, after Tecson had undergone training and orientation.

Thereafter, Tecson signed a contract of employment which stipulates, among others, that he agrees to study
and abide by existing company rules; to disclose to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies and should
management find that such relationship poses a possible conflict of interest, to resign from the company.

The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management
of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing
drug companies. If management perceives a conflict of interest or a potential conflict between such relationship
and the employee’s employment with the company, the management and the employee will explore the
possibility of a "transfer to another department in a non-counterchecking position" or preparation for employment
outside the company after six months.

Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-Camarines Norte sales area.

Subsequently, Tecson entered into a romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was Astra’s Branch Coordinator in Albay. She supervised
the district managers and medical representatives of her company and prepared marketing strategies for Astra
in that area.

Even before they got married, Tecson received several reminders from his District Manager regarding the
conflict of interest which his relationship with Bettsy might engender. Still, love prevailed, and Tecson married
Bettsy in September 1998.

In January 1999, Tecson’s superiors informed him that his marriage to Bettsy gave rise to a conflict of interest.
Tecson’s superiors reminded him that he and Bettsy should decide which one of them would resign from their
jobs, although they told him that they wanted to retain him as much as possible because he was performing his
job well.

Tecson requested for time to comply with the company policy against entering into a relationship with an
employee of a competitor company. He explained that Astra, Bettsy’s employer, was planning to merge with
Zeneca, another drug company; and Bettsy was planning to avail of the redundancy package to be offered by
Astra. With Bettsy’s separation from her company, the potential conflict of interest would be eliminated. At the
same time, they would be able to avail of the attractive redundancy package from Astra.

In August 1999, Tecson again requested for more time resolve the problem. In September 1999, Tecson applied
for a transfer in Glaxo’s milk division, thinking that since Astra did not have a milk division, the potential conflict
of interest would be eliminated. His application was denied in view of Glaxo’s "least-movement-possible" policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area.
Tecson asked Glaxo to reconsider its decision, but his request was denied.

Tecson sought Glaxo’s reconsideration regarding his transfer and brought the matter to Glaxo’s Grievance
Committee. Glaxo, however, remained firm in its decision and gave Tescon until February 7, 2000 to comply
with the transfer order. Tecson defied the transfer order and continued acting as medical representative in the
Camarines Sur-Camarines Norte sales area.

During the pendency of the grievance proceedings, Tecson was paid his salary, but was not issued samples of
products which were competing with similar products manufactured by Astra. He was also not included in
product conferences regarding such products.

Because the parties failed to resolve the issue at the grievance machinery level, they submitted the matter for
voluntary arbitration. Glaxo offered Tecson a separation pay of one-half (½) month pay for every year of service,
or a total of ₱50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation and
Mediation Board (NCMB) rendered its Decision declaring as valid Glaxo’s policy on relationships between its
employees and persons employed with competitor companies, and affirming Glaxo’s right to transfer Tecson to
another sales territory.

Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the NCMB Decision.

On May 19, 2003, the Court of Appeals promulgated its Decision denying the Petition for Review on the ground
that the NCMB did not err in rendering its Decision. The appellate court held that Glaxo’s policy prohibiting its
employees from having personal relationships with employees of competitor companies is a valid exercise of its
management prerogatives.4

Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but the motion was denied by the
appellate court in its Resolution dated March 26, 2004.5

Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals erred in affirming the NCMB’s
finding that the Glaxo’s policy prohibiting its employees from marrying an employee of a competitor company is
valid; and (ii) the Court of Appeals also erred in not finding that Tecson was constructively dismissed when he
was transferred to a new sales territory, and deprived of the opportunity to attend products seminars and training
sessions.6

Petitioners contend that Glaxo’s policy against employees marrying employees of competitor companies violates
the equal protection clause of the Constitution because it creates invalid distinctions among employees on
account only of marriage. They claim that the policy restricts the employees’ right to marry.7

They also argue that Tecson was constructively dismissed as shown by the following circumstances: (1) he was
transferred from the Camarines Sur-Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2)
he suffered a diminution in pay, (3) he was excluded from attending seminars and training sessions for medical
representatives, and (4) he was prohibited from promoting respondent’s products which were competing with
Astra’s products.8

In its Comment on the petition, Glaxo argues that the company policy prohibiting its employees from having a
relationship with and/or marrying an employee of a competitor company is a valid exercise of its management
prerogatives and does not violate the equal protection clause; and that Tecson’s reassignment from the
Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and Agusan del Sur sales area
does not amount to constructive dismissal.9

Glaxo insists that as a company engaged in the promotion and sale of pharmaceutical products, it has a genuine
interest in ensuring that its employees avoid any activity, relationship or interest that may conflict with their
responsibilities to the company. Thus, it expects its employees to avoid having personal or family interests in any
competitor company which may influence their actions and decisions and consequently deprive Glaxo of
legitimate profits. The policy is also aimed at preventing a competitor company from gaining access to its
secrets, procedures and policies.10

It likewise asserts that the policy does not prohibit marriage per se but only proscribes existing or future
relationships with employees of competitor companies, and is therefore not violative of the equal protection
clause. It maintains that considering the nature of its business, the prohibition is based on valid grounds.11
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a real and potential conflict of
interest. Astra’s products were in direct competition with 67% of the products sold by Glaxo. Hence, Glaxo’s
enforcement of the foregoing policy in Tecson’s case was a valid exercise of its management prerogatives.12 In
any case, Tecson was given several months to remedy the situation, and was even encouraged not to resign but
to ask his wife to resign form Astra instead.13

Glaxo also points out that Tecson can no longer question the assailed company policy because when he signed
his contract of employment, he was aware that such policy was stipulated therein. In said contract, he also
agreed to resign from respondent if the management finds that his relationship with an employee of a competitor
company would be detrimental to the interests of Glaxo.14

Glaxo likewise insists that Tecson’s reassignment to another sales area and his exclusion from seminars
regarding respondent’s new products did not amount to constructive dismissal.

It claims that in view of Tecson’s refusal to resign, he was relocated from the Camarines Sur-Camarines Norte
sales area to the Butuan City-Surigao City and Agusan del Sur sales area. Glaxo asserts that in effecting the
reassignment, it also considered the welfare of Tecson’s family. Since Tecson’s hometown was in Agusan del
Sur and his wife traces her roots to Butuan City, Glaxo assumed that his transfer from the Bicol region to the
Butuan City sales area would be favorable to him and his family as he would be relocating to a familiar territory
and minimizing his travel expenses.15

In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning the new anti-asthma drug was due
to the fact that said product was in direct competition with a drug which was soon to be sold by Astra, and
hence, would pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt of his sales
paraphernalia was due to the mix-up created by his refusal to transfer to the Butuan City sales area (his
paraphernalia was delivered to his new sales area instead of Naga City because the supplier thought he already
transferred to Butuan).16

The Court is tasked to resolve the following issues: (1) Whether the Court of Appeals erred in ruling that Glaxo’s
policy against its employees marrying employees from competitor companies is valid, and in not holding that
said policy violates the equal protection clause of the Constitution; (2) Whether Tecson was constructively
dismissed.

The Court finds no merit in the petition.

The stipulation in Tecson’s contract of employment with Glaxo being questioned by petitioners provides:

10. You agree to disclose to management any existing or future relationship you may have, either by
consanguinity or affinity with co-employees or employees of competing drug companies. Should it pose
a possible conflict of interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.

…17

The same contract also stipulates that Tescon agrees to abide by the existing company rules of Glaxo, and to
study and become acquainted with such policies.18 In this regard, the Employee Handbook of Glaxo expressly
informs its employees of its rules regarding conflict of interest:

1. Conflict of Interest

Employees should avoid any activity, investment relationship, or interest that may run counter to the
responsibilities which they owe Glaxo Wellcome.

Specifically, this means that employees are expected:

a. To avoid having personal or family interest, financial or otherwise, in any competitor supplier or
other businesses which may consciously or unconsciously influence their actions or decisions
and thus deprive Glaxo Wellcome of legitimate profit.
 b. To refrain from using their position in Glaxo Wellcome or knowledge of Company plans to
advance their outside personal interests, that of their relatives, friends and other businesses.

c. To avoid outside employment or other interests for income which would impair their effective
job performance.

d. To consult with Management on such activities or relationships that may lead to conflict of
interest.

1.1. Employee Relationships

Employees with existing or future relationships either by consanguinity or affinity with co-employees of
competing drug companies are expected to disclose such relationship to the Management. If
management perceives a conflict or potential conflict of interest, every effort shall be made, together by
management and the employee, to arrive at a solution within six (6) months, either by transfer to another
department in a non-counter checking position, or by career preparation toward outside employment
after Glaxo Wellcome. Employees must be prepared for possible resignation within six (6) months, if no
other solution is feasible.19

No reversible error can be ascribed to the Court of Appeals when it ruled that Glaxo’s policy prohibiting an
employee from having a relationship with an employee of a competitor company is a valid exercise of
management prerogative.

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors, especially so that it and Astra are rival companies in the highly
competitive pharmaceutical industry.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s
employees is reasonable under the circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its secrets and procedures.

That Glaxo possesses the right to protect its economic interests cannot be denied. No less than the Constitution
recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth.20 Indeed, 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.21

As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard business confidentiality and
protect a competitive position by even-handedly disqualifying from jobs male and female applicants or
employees who are married to a competitor. Consequently, the court ruled than an employer that discharged an
employee who was married to an employee of an active competitor did not violate Title VII of the Civil Rights Act
of 1964.23 The Court pointed out that the policy was applied to men and women equally, and noted that the
employer’s business was highly competitive and that gaining inside information would constitute a competitive
advantage.

The challenged company policy does not violate the equal protection clause of the Constitution as petitioners
erroneously suggest. It is a settled principle that the commands of the equal protection clause are addressed
only to the state or those acting under color of its authority.24 Corollarily, it has been held in a long array of U.S.
Supreme Court decisions that the equal protection clause erects no shield against merely private conduct,
however, discriminatory or wrongful.25 The only exception occurs when the state29 in any of its manifestations or
actions has been found to have become entwined or involved in the wrongful private conduct.27 Obviously,
however, the exception is not present in this case. Significantly, the company actually enforced the policy after
repeated requests to the employee to comply with the policy. Indeed, the application of the policy was made in
an impartial and even-handed manner, with due regard for the lot of the employee.

In any event, from the wordings of the contractual provision and the policy in its employee handbook, it is clear
that Glaxo does not impose an absolute prohibition against relationships between its employees and those of
competitor companies. Its employees are free to cultivate relationships with and marry persons of their own
choosing. What the company merely seeks to avoid is a conflict of interest between the employee and the
company that may arise out of such relationships. As succinctly explained by the appellate court, thus:
 The policy being questioned is not a policy against marriage. An employee of the company remains free
to marry anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that
belongs only to the individual. However, an employee’s personal decision does not detract the employer
from exercising management prerogatives to ensure maximum profit and business success. . .28

The Court of Appeals also correctly noted that the assailed company policy which forms part of respondent’s
Employee Code of Conduct and of its contracts with its employees, such as that signed by Tescon, was made
known to him prior to his employment. Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with Bettsy. Since Tecson knowingly and
voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law
between them and, thus, should be complied with in good faith."29 He is therefore estopped from questioning
said policy.

The Court finds no merit in petitioners’ contention that Tescon was constructively dismissed when he was
transferred from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur
sales area, and when he was excluded from attending the company’s seminar on new products which were
directly competing with similar products manufactured by Astra. Constructive dismissal is defined as a quitting,
an involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the employee.30 None of these conditions are present in the
instant case. The record does not show that Tescon was demoted or unduly discriminated upon by reason of
such transfer. As found by the appellate court, Glaxo properly exercised its management prerogative in
reassigning Tecson to the Butuan City sales area:

. . . In this case, petitioner’s transfer to another place of assignment was merely in keeping with the
policy of the company in avoidance of conflict of interest, and thus valid…Note that [Tecson’s] wife holds
a sensitive supervisory position as Branch Coordinator in her employer-company which requires her to
work in close coordination with District Managers and Medical Representatives. Her duties include
monitoring sales of Astra products, conducting sales drives, establishing and furthering relationship with
customers, collection, monitoring and managing Astra’s inventory…she therefore takes an active
participation in the market war characterized as it is by stiff competition among pharmaceutical
companies. Moreover, and this is significant, petitioner’s sales territory covers Camarines Sur and
Camarines Norte while his wife is supervising a branch of her employer in Albay. The proximity of their
areas of responsibility, all in the same Bicol Region, renders the conflict of interest not only possible, but
actual, as learning by one spouse of the other’s market strategies in the region would be inevitable.
[Management’s] appreciation of a conflict of interest is therefore not merely illusory and wanting in
factual basis…31

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission,32 which involved a complaint filed
by a medical representative against his employer drug company for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment to a new area, the Court upheld the right of the drug
company to transfer or reassign its employee in accordance with its operational demands and requirements. The
ruling of the Court therein, quoted hereunder, also finds application in the instant case:

By the very nature of his employment, a drug salesman or medical representative is expected to travel.
He should anticipate reassignment according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to new markets calling for
opening or expansion or to areas where the need for pushing its products is great. More so if such
reassignments are part of the employment contract.33

As noted earlier, the challenged policy has been implemented by Glaxo impartially and disinterestedly for a long
period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to eliminate the
conflict of interest brought about by his relationship with Bettsy. When their relationship was still in its initial
stage, Tecson’s supervisors at Glaxo constantly reminded him about its effects on his employment with the
company and on the company’s interests. After Tecson married Bettsy, Glaxo gave him time to resolve the
conflict by either resigning from the company or asking his wife to resign from Astra. Glaxo even expressed its
desire to retain Tecson in its employ because of his satisfactory performance and suggested that he ask Bettsy
to resign from her company instead. Glaxo likewise acceded to his repeated requests for more time to resolve
the conflict of interest. When the problem could not be resolved after several years of waiting, Glaxo was
constrained to reassign Tecson to a sales area different from that handled by his wife for Astra. Notably, the
Court did not terminate Tecson from employment but only reassigned him to another area where his home
province, Agusan del Sur, was included. In effecting Tecson’s transfer, Glaxo even considered the welfare of
Tecson’s family. Clearly, the foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.34

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.