You are on page 1of 55

G.R. No.

195466 July 2, 2014 engaged to report for work and, accordingly, did not receive any fee when no
ARIEL L. DAVID, doing business under the name and style "YIELS HOG hogs were delivered.
DEALER," Petitioner,
vs. Macasio disputed David’s allegations.11 He argued that, first, David did not start
JOHN G. MACASIO, Respondent. his business only in 2005. He pointed to the Certificate of Employment12 that
DECISION David issued in his favor which placed the date of his employment, albeit
BRION, J.: erroneously, in January 2000. Second, he reported for work every day which the
payroll or time record could have easily proved had David submitted them in
We resolve in this petition for review on certiorari1 the challenge to the evidence.
November 22, 2010 decision2 and the January 31, 2011 resolution3 of the Court
of Appeals (CA) in CA-G.R. SP No. 116003. The CA decision annulled and set Refuting Macasio’s submissions,13 David claims that Macasio was not his
aside the May 26, 2010 decision4 of the National Labor Relations Commission employee as he hired the latter on "pakyaw" or task basis. He also claimed that
(NLRC)5 which, in turn, affirmed the April 30, 2009 Decision6 of the Labor he issued the Certificate of Employment, upon Macasio’s request, only for
Arbiter (LA). The LA's decision dismissed respondent John G. Macasio's overseas employment purposes. He pointed to the "Pinagsamang Sinumpaang
monetary claims. Salaysay,"14 executed by Presbitero Solano and Christopher (Antonio Macasio’s
The Factual Antecedents co-butchers), to corroborate his claims.

In January 2009, Macasio filed before the LA a complaint7 against petitioner In the April 30, 2009 decision,15 the LA dismissed Macasio’s complaint for lack
Ariel L. David, doing business under the name and style "Yiels Hog Dealer," for of merit. The LA gave credence to David’s claim that he engaged Macasio on
non-payment of overtime pay, holiday pay and 13th month pay. He also claimed "pakyaw" or task basis. The LA noted the following facts to support this finding:
payment for moral and exemplary damages and attorney’s fees. Macasio also (1) Macasio received the fixed amount of ₱700.00 for every work done,
claimed payment for service incentive leave (SIL).8 regardless of the number of hours that he spent in completing the task and of
the volume or number of hogs that he had to chop per engagement; (2) Macasio
Macasio alleged9 before the LA that he had been working as a butcher for David usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of
since January 6, 1995. Macasio claimed that David exercised effective control the following day; and (3) the ₱700.00 fixed wage far exceeds the then
and supervision over his work, pointing out that David: (1) set the work day, prevailing daily minimum wage of ₱382.00. The LA added that the nature of
reporting time and hogs to be chopped, as well as the manner by which he was David’s business as hog dealer supports this "pakyaw" or task basis
to perform his work; (2) daily paid his salary of ₱700.00, which was increased arrangement.
from ₱600.00 in 2007, ₱500.00 in 2006 and ₱400.00 in 2005; and (3) approved
and disapproved his leaves. Macasio added that David owned the hogs delivered The LA concluded that as Macasio was engaged on "pakyaw" or task basis, he is
for chopping, as well as the work tools and implements; the latter also rented not entitled to overtime, holiday, SIL and 13th month pay.
the workplace. Macasio further claimed that David employs about twenty-five
(25) butchers and delivery drivers.
The NLRC’s Ruling
In his defense,10 David claimed that he started his hog dealer business in 2005
and that he only has ten employees. He alleged that he hired Macasio as a In its May 26, 2010 decision,16 the NLRC affirmed the LA ruling.17 The NLRC
butcher or chopper on "pakyaw" or task basis who is, therefore, not entitled to observed that David did not require Macasio to observe an eight hour work
schedule to earn the fixed ₱700.00 wage; and that Macasio had been performing
overtime pay, holiday pay and 13th month pay pursuant to the provisions of the
a non-time work, pointing out that Macasio was paid a fixed amount for the
Implementing Rules and Regulations (IRR) of the Labor Code. David pointed out
that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of completion of the assigned task, irrespective of the time consumed in its
the following day or earlier, depending on the volume of the delivered hogs; (2) performance. Since Macasio was paid by result and not in terms of the time that
received the fixed amount of ₱700.00 per engagement, regardless of the actual he spent in the workplace, Macasio is not covered by the Labor Standards laws
number of hours that he spent chopping the delivered hogs; and (3) was not
1
on overtime, SIL and holiday pay, and 13th month pay under the Rules and under their arrangement, Macasio was at liberty to choose whether to report for
Regulations Implementing the 13th month pay law.18 work or not as other butchers could carry out his tasks. He points out that
Solano and Antonio had, in fact, attested to their (David and Macasio’s)
Macasio moved for reconsideration19 but the NLRC denied his motion in its established "pakyawan" arrangement that rendered a written contract
August 11, 2010 resolution,20 prompting Macasio to elevate his case to the CA unnecessary. In as much as Macasio is a task basis employee – who is paid the
via a petition for certiorari.21 fixed amount of ₱700.00 per engagement regardless of the time consumed in
the performance – David argues that Macasio is not entitled to the benefits he
The CA’s Ruling claims. Also, he posits that because he engaged Macasio on "pakyaw" or task
basis then no employer-employee relationship exists between them.
In its November 22, 2010 decision,22 the CA partly granted Macasio’s certiorari
petition and reversed the NLRC’s ruling for having been rendered with grave Finally, David argues that factual findings of the LA, when affirmed by the NLRC,
abuse of discretion. attain finality especially when, as in this case, they are supported by substantial
evidence. Hence, David posits that the CA erred in reversing the labor tribunals’
findings and granting the prayed monetary claims.
While the CA agreed with the LAand the NLRC that Macasio was a task basis
employee, it nevertheless found Macasio entitled to his monetary claims
following the doctrine laid down in Serrano v. Severino Santos Transit. 23 The CA The Case for the Respondent
explained that as a task basis employee, Macasio is excluded from the coverage
of holiday, SIL and 13th month pay only if he is likewise a "field personnel." As Macasio counters that he was not a task basis employee or a "field personnel" as
defined by the Labor Code, a "field personnel" is one who performs the work David would have this Court believe.28 He reiterates his arguments before the
away from the office or place of work and whose regular work hours cannot be lower tribunals and adds that, contrary to David’s position, the ₱700.00 fee that
determined with reasonable certainty. In Macasio’s case, the elements that he was paid for each day that he reported for work does not indicate a "pakyaw"
characterize a "field personnel" are evidently lacking as he had been working as or task basis employment as this amount was paid daily, regardless of the
a butcher at David’s "Yiels Hog Dealer" business in Sta. Mesa, Manila under number or pieces of hogs that he had to chop. Rather, it indicates a daily-wage
David’s supervision and control, and for a fixed working schedule that starts at method of payment and affirms his regular employment status. He points out
10:00 p.m. that David did not allege or present any evidence as regards the quota or
number of hogs that he had to chop as basis for the "pakyaw" or task basis
Accordingly, the CA awarded Macasio’s claim for holiday, SIL and 13th month payment; neither did David present the time record or payroll to prove that he
pay for three years, with 10% attorney’s fees on the total monetary award. The worked for less than eight hours each day. Moreover, David did not present any
CA, however, denied Macasio’s claim for moral and exemplary damages for lack contract to prove that his employment was on task basis. As David failed to
of basis. prove the alleged task basis or "pakyawan" agreement, Macasio concludes that
he was David’s employee. Procedurally, Macasio points out that David’s
submissions in the present petition raise purely factual issues that are not
David filed the present petition after the CA denied his motion for
proper for a petition for review on certiorari. These issues – whether he
reconsideration24 in the CA’s January 31, 2011 resolution.25 (Macasio) was paid by result or on "pakyaw" basis; whether he was a "field
personnel"; whether an employer-employee relationship existed between him
The Petition and David; and whether David exercised control and supervision over his work
– are all factual in nature and are, therefore, proscribed in a Rule 45 petition. He
In this petition,26 David maintains that Macasio’s engagement was on a argues that the CA’s factual findings bind this Court, absent a showing that such
"pakyaw" or task basis. Hence, the latter is excluded from the coverage of findings are not supported by the evidence or the CA’s judgment was based on a
holiday, SIL and 13th month pay. David reiterates his submissions before the misapprehension of facts. He adds that the issue of whether an employer-
lower tribunals27 and adds that he never had any control over the manner by employee relationship existed between him and David had already been settled
which Macasio performed his work and he simply looked on to the "end-result." by the LA29 and the NLRC30 (as well as by the CA per Macasio’s manifestation
He also contends that he never compelled Macasio to report for work and that
2
before this Court dated November 15, 2012),31 in his favor, in the separate confuses engagement on "pakyaw" or task basis with the lack of employment
illegal case that he filed against David. relationship. Impliedly, David asserts that their "pakyawan" or task basis
arrangement negates the existence of employment relationship.
The Issue
At the outset, we reject this assertion of the petitioner. Engagement on
The issue revolves around the proper application and interpretation of the "pakyaw" or task basis does not characterize the relationship that may exist
labor law provisions on holiday, SIL and 13th month pay to a worker engaged between the parties, i.e., whether one of employment or independent
on "pakyaw" or task basis. In the context of the Rule 65 petition before the CA, contractorship. Article 97(6) of the Labor Code defines wages as "xxx the
the issue is whether the CA correctly found the NLRC in grave abuse of remuneration or earnings, however designated, capable of being expressed in
discretion in ruling that Macasio is entitled to these labor standards benefits. terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by
The Court’s Ruling an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be
rendered[.]"35 In relation to Article 97(6), Article 10136 of the Labor Code
We partially grant the petition. speaks of workers paid by results or those whose pay is calculated in terms of
the quantity or quality of their work output which includes "pakyaw" work and
Preliminary considerations: the Montoya ruling and the factual-issue-bar rule other non-time work.

In this Rule 45 petition for review on certiorari of the CA’s decision rendered More importantly, by implicitly arguing that his engagement of Macasio on
under a Rule 65 proceeding, this Court’s power of review is limited to resolving "pakyaw" or task basis negates employer-employee relationship, David would
matters pertaining to any perceived legal errors that the CA may have want the Court to engage on a factual appellate review of the entire case to
committed in issuing the assailed decision. This is in contrast with the review determine the presence or existence of that relationship. This approach
for jurisdictional errors, which we undertake in an original certiorari action. In however is not authorized under a Rule 45 petition for review of the CA
reviewing the legal correctness of the CA decision, we examine the CA decision decision rendered under a Rule 65 proceeding.
based on how it determined the presence or absence of grave abuse of
discretion in the NLRC decision before it and not on the basis of whether the
First, the LA and the NLRC denied Macasio’s claim not because of the absence of
NLRC decision on the merits of the case was correct. 32 In other words, we have
an employer-employee but because of its finding that since Macasio is paid on
to be keenly aware that the CA undertook a Rule 65 review, not a review on pakyaw or task basis, then he is not entitled to SIL, holiday and 13th month pay.
appeal, of the NLRC decision challenged before it.33 Second, we consider it crucial, that in the separate illegal dismissal case Macasio
filed with the LA, the LA, the NLRC and the CA uniformly found the existence of
Moreover, the Court’s power in a Rule 45 petition limits us to a review of an employer-employee relationship.37
questions of law raised against the assailed CA decision.34
In other words, aside from being factual in nature, the existence of an employer-
In this petition, David essentially asks the question – whether Macasio is employee relationship is in fact a non-issue in this case. To reiterate, in deciding
entitled to holiday, SIL and 13th month pay. This one is a question of law. The a Rule 45 petition for review of a labor decision rendered by the CA under 65,
determination of this question of law however is intertwined with the largely the narrow scope of inquiry is whether the CA correctly determined the
factual issue of whether Macasio falls within the rule on entitlement to these presence or absence of grave abuse of discretion on the part of the NLRC. In
claims or within the exception. In either case, the resolution of this factual issue concrete question form, "did the NLRC gravely abuse its discretion in denying
presupposes another factual matter, that is, the presence of an employer- Macasio’s claims simply because he is paid on a non-time basis?"
employee relationship between David and Macasio.

In insisting before this Court that Macasio was not his employee, David argues
that he engaged the latter on "pakyaw" or task basis. Very noticeably, David
3
At any rate, even if we indulge the petitioner, we find his claim that no still engage Macasio’s services and have him report for work even during the
employer-employee relationship exists baseless. Employing the control days when only few hogs were delivered for butchering.
test,38 we find that such a relationship exist in the present case.
Under this overall setup, all those working for David, including Macasio, could
Even a factual review shows that Macasio is David’s employee naturally be expected to observe certain rules and requirements and David
would necessarily exercise some degree of control as the chopping of the hog
To determine the existence of an employer-employee relationship, four meats would be subject to his specifications. Also, since Macasio performed his
elements generally need to be considered, namely: (1) the selection and tasks at David’s workplace, David could easily exercise control and supervision
engagement of the employee; (2) the payment of wages; (3) the power of over the former. Accordingly, whether or not David actually exercised this right
dismissal; and (4) the power to control the employee’s conduct. These elements or power to control is beside the point as the law simply requires the existence
or indicators comprise the so-called "four-fold" test of employment relationship. of this power to control 4243 or, as in this case, the existence of the right and
Macasio’s relationship with David satisfies this test. opportunity to control and supervise Macasio.44

First, David engaged the services of Macasio, thus satisfying the element of In sum, the totality of the surrounding circumstances of the present case
"selection and engagement of the employee." David categorically confirmed this sufficiently points to an employer-employee relationship existing between
fact when, in his "Sinumpaang Salaysay," he stated that "nag apply po siya sa David and Macasio.
akin at kinuha ko siya na chopper[.]"39 Also, Solano and Antonio stated in their
"Pinagsamang Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Macasio is engaged on "pakyaw" or task basis
Yiels xxx na pag-aari ni Ariel David bilang butcher" and "kilalanamin si xxx
Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa aming At this point, we note that all three tribunals – the LA, the NLRC and the CA –
trabaho." found that Macasio was engaged or paid on "pakyaw" or task basis. This factual
finding binds the Court under the rule that factual findings of labor tribunals
Second, David paid Macasio’s wages.Both David and Macasio categorically when supported by the established facts and in accord with the laws, especially
stated in their respective pleadings before the lower tribunals and even before when affirmed by the CA, is binding on this Court.
this Court that the former had been paying the latter ₱700.00 each day after the
latter had finished the day’s task. Solano and Antonio also confirmed this fact of A distinguishing characteristic of "pakyaw" or task basis engagement, as
wage payment in their "Pinagsamang Sinumpaang Salaysay." 41 This satisfies the opposed to straight-hour wage payment, is the non-consideration of the time
element of "payment of wages." spent in working. In a task-basis work, the emphasis is on the task itself, in the
sense that payment is reckoned in terms of completion of the work, not in terms
Third, David had been setting the day and time when Macasio should report for of the number of time spent in the completion of work.45 Once the work or task
work. This power to determine the work schedule obviously implies power of is completed, the worker receives a fixed amount as wage, without regard to the
control. By having the power to control Macasio’s work schedule, David could standard measurements of time generally used in pay computation.
regulate Macasio’s work and could even refuse to give him any assignment,
thereby effectively dismissing him. In Macasio’s case, the established facts show that he would usually start his
work at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
And fourth, David had the right and power to control and supervise Macasio’s workplace or of the total number of the hogs assigned to him for chopping,
work as to the means and methods of performing it. In addition to setting the Macasio would receive the fixed amount of ₱700.00 once he had completed his
day and time when Macasio should report for work, the established facts show task. Clearly, these circumstances show a "pakyaw" or task basis engagement
that David rents the place where Macasio had been performing his tasks. that all three tribunals uniformly found.
Moreover, Macasio would leave the workplace only after he had finished
chopping all of the hog meats given to him for the day’s task. Also, David would In sum, the existence of employment relationship between the parties is
determined by applying the "four-fold" test; engagement on "pakyaw" or task
4
basis does not determine the parties’ relationship as it is simply a method of pay Article 82 of the Labor Code provides the exclusions from the coverage of Title I,
computation. Accordingly, Macasio is David’s employee, albeit engaged on Book III of the Labor Code - provisions governing working conditions and rest
"pakyaw" or task basis. periods.

As an employee of David paid on pakyaw or task basis, we now go to the core Art. 82. Coverage.— The provisions of [Title I] shall apply to employees in all
issue of whether Macasio is entitled to holiday, 13th month, and SIL pay. establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of the
On the issue of Macasio’s entitlement to holiday, SIL and 13th month pay family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are paid
The LA dismissed Macasio’s claims pursuant to Article 94 of the Labor Code in by results as determined by the Secretary of Labor in appropriate regulations.
relation to Section 1, Rule IV of the IRR of the Labor Code, and Article 95 of the
Labor Code, as well as Presidential Decree (PD) No. 851. The NLRC, on the other xxxx
hand, relied on Article 82 of the Labor Code and the Rules and Regulations
Implementing PD No. 851. Uniformly, these provisions exempt workers paid on "Field personnel" shall refer to non-agricultural employees who regularly
"pakyaw" or task basis from the coverage of holiday, SIL and 13th month pay. perform their duties away from the principal place of business or branch office
of the employer and whose actual hours of work in the field cannot be
In reversing the labor tribunals’ rulings, the CA similarly relied on these determined with reasonable certainty. [emphases and underscores ours]
provisions, as well as on Section 1, Rule V of the IRR of the Labor Code and the
Court’s ruling in Serrano v. Severino Santos Transit. 46 These labor law Among the Title I provisions are the provisions on holiday pay (under Article 94
provisions, when read together with the Serrano ruling, exempt those engaged of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under
on "pakyaw" or task basis only if they qualify as "field personnel." Article 82,"field personnel" on one hand and "workers who are paid by results"
on the other hand, are not covered by the Title I provisions. The wordings of
In other words, what we have before us is largely a question of law regarding Article82 of the Labor Code additionally categorize workers "paid by results"
the correct interpretation of these labor code provisions and the implementing and "field personnel" as separate and distinct types of employees who are
rules; although, to conclude that the worker is exempted or covered depends on exempted from the Title I provisions of the Labor Code.
the facts and in this sense, is a question of fact: first, whether Macasio is a "field
personnel"; and second, whether those engaged on "pakyaw" or task basis, but The pertinent portion of Article 94 of the Labor Code and its corresponding
who are not "field personnel," are exempted from the coverage of holiday, SIL provision in the IRR47 reads:
and 13th month pay.
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily
To put our discussion within the perspective of a Rule 45 petition for review of wage during regular holidays, except in retail and service establishments
a CA decision rendered under Rule 65 and framed in question form, the legal regularly employing less than (10) workers[.] [emphasis ours]
question is whether the CA correctly ruled that it was grave abuse of discretion
on the part of the NLRC to deny Macasio’s monetary claims simply because he is xxxx
paid on a non-time basis without determining whether he is a field personnel or
not. SECTION 1. Coverage. – This Rule shall apply to all employees except:

To resolve these issues, we need tore-visit the provisions involved. xxxx

Provisions governing SIL and holiday pay (e)Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or

5
contract basis, purely commission basis, or those who are paid a fixed amount Because of this difference, it may be argued that the Labor Code may be
for performing work irrespective of the time consumed in the performance interpreted to mean that those who are engaged on task basis, per se, are
thereof. [emphases ours] excluded from the SIL and holiday payment since this is what the Labor Code
provisions, in contrast with the IRR, strongly suggest. The arguable
On the other hand, Article 95 of the Labor Code and its corresponding provision interpretation of this rule may be conceded to be within the discretion granted
in the IRR48 pertinently provides: to the LA and NLRC as the quasi-judicial bodies with expertise on labor matters.

Art. 95. Right to service incentive. (a) Every employee who has rendered at least However, as early as 1987 in the case of Cebu Institute of Technology v.
one year of service shall be entitled to a yearly service incentive leave of five Ople49 the phrase "those who are engaged on task or contract basis" in the rule
days with pay. has already been interpreted to mean as follows:

(b) This provision shall not apply to those who are already enjoying the benefit [the phrase] should however, be related with "field personnel" applying the rule
herein provided, those enjoying vacation leave with pay of at least five days and on ejusdem generis that general and unlimited terms are restrained and limited
those employed in establishments regularly employing less than ten employees by the particular terms that they follow xxx Clearly, petitioner's teaching
or in establishments exempted from granting this benefit by the Secretary of personnel cannot be deemed field personnel which refers "to non-agricultural
Labor and Employment after considering the viability or financial condition of employees who regularly perform their duties away from the principal place of
such establishment. [emphases ours] business or branch office of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty. [Par. 3, Article 82, Labor
xxxx Code of the Philippines]. Petitioner's claim that private respondents are not
entitled to the service incentive leave benefit cannot therefore be sustained.
Section 1. Coverage. – This rule shall apply to all employees except:
In short, the payment of an employee on task or pakyaw basis alone is
insufficient to exclude one from the coverage of SIL and holiday pay. They are
xxxx exempted from the coverage of Title I (including the holiday and SIL pay) only if
they qualify as "field personnel." The IRR therefore validly qualifies and limits
(e) Field personnel and other employees whose performance is unsupervised the general exclusion of "workers paid by results" found in Article 82 from the
by the employer including those who are engaged on task or contract basis, coverage of holiday and SIL pay. This is the only reasonable interpretation since
purely commission basis, or those who are paid a fixed amount for performing the determination of excluded workers who are paid by results from the
work irrespective of the time consumed in the performance thereof. [emphasis coverage of Title I is "determined by the Secretary of Labor in appropriate
ours] regulations."

Under these provisions, the general rule is that holiday and SIL pay provisions The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus
cover all employees. To be excluded from their coverage, an employee must be Transport Systems, Inc., v. Bautista:
one of those that these provisions expressly exempt, strictly in accordance with
the exemption. Under the IRR, exemption from the coverage of holiday and SIL A careful perusal of said provisions of law will result in the conclusion that the
pay refer to "field personnel and other employees whose time and performance grant of service incentive leave has been delimited by the Implementing Rules
is unsupervised by the employer including those who are engaged on task or and Regulations of the Labor Code to apply only to those employees not
contract basis[.]" Note that unlike Article 82 of the Labor Code, the IRR on
explicitly excluded by Section 1 of Rule V. According to the Implementing Rules,
holiday and SIL pay do not exclude employees "engaged on task basis" as a Service Incentive Leave shall not apply to employees classified as "field
separate and distinct category from employees classified as "field personnel."
personnel." The phrase "other employees whose performance is unsupervised
Rather, these employees are altogether merged into one classification of by the employer" must not be understood as a separate classification of
exempted employees. employees to which service incentive leave shall not be granted. Rather, it

6
serves as an amplification of the interpretation of the definition of field identically worded with the rule exempting "field personnel" from the grant of
personnel under the Labor Code as those "whose actual hours of work in the SIL pay. To be clear, the phrase "employees engaged on task or contract basis
field cannot be determined with reasonable certainty." "found in the IRR on both SIL pay and holiday pay should be read together with
the exemption of "field personnel."
The same is true with respect to the phrase "those who are engaged on task or
contract basis, purely commission basis." Said phrase should be related with In short, in determining whether workers engaged on "pakyaw" or task basis" is
"field personnel," applying the rule on ejusdem generis that general and entitled to holiday and SIL pay, the presence (or absence) of employer
unlimited terms are restrained and limited by the particular terms that they supervision as regards the worker’s time and performance is the key: if the
follow. worker is simply engaged on pakyaw or task basis, then the general rule is that
he is entitled to a holiday pay and SIL pay unless exempted from the exceptions
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the specifically provided under Article 94 (holiday pay) and Article95 (SIL pay) of
CA cited in support of granting Macasio’s petition. the Labor Code. However, if the worker engaged on pakyaw or task basis also
falls within the meaning of "field personnel" under the law, then he is not
In Serrano, the Court, applying the rule on ejusdem generis50 declared that entitled to these monetary benefits.
"employees engaged on task or contract basis xxx are not automatically
exempted from the grant of service incentive leave, unless, they fall under the Macasio does not fall under the classification of "field personnel"
classification of field personnel."51 The Court explained that the phrase
"including those who are engaged on task or contract basis, purely commission Based on the definition of field personnel under Article 82, we agree with the CA
basis" found in Section 1(d), Rule V of Book III of the IRR should not be that Macasio does not fall under the definition of "field personnel." The CA’s
understood as a separate classification of employees to which SIL shall not be finding in this regard is supported by the established facts of this case: first,
granted. Rather, as with its preceding phrase - "other employees whose Macasio regularly performed his duties at David’s principal place of business;
performance is unsupervised by the employer" - the phrase "including those second, his actual hours of work could be determined with reasonable certainty;
who are engaged on task or contract basis" serves to amplify the interpretation and, third, David supervised his time and performance of duties. Since Macasio
of the Labor Code definition of "field personnel" as those "whose actual hours of cannot be considered a "field personnel," then he is not exempted from the
work in the field cannot be determined with reasonable certainty." grant of holiday, SIL pay even as he was engaged on "pakyaw" or task basis.

In contrast and in clear departure from settled case law, the LA and the NLRC Not being a "field personnel," we find the CA to be legally correct when it
still interpreted the Labor Code provisions and the IRR as exempting an reversed the NLRC’s ruling dismissing Macasio’s complaint for holiday and SIL
employee from the coverage of Title I of the Labor Code based simply and solely pay for having been rendered with grave abuse of discretion.
on the mode of payment of an employee. The NLRC’s utter disregard of this
consistent jurisprudential ruling is a clear act of grave abuse of discretion. 52 In Entitlement to 13th month pay
other words, by dismissing Macasio’s complaint without considering whether
Macasio was a "field personnel" or not, the NLRC proceeded based on a With respect to the payment of 13th month pay however, we find that the CA
significantly incomplete consideration of the case. This action clearly smacks of legally erred in finding that the NLRC gravely abused its discretion in denying
grave abuse of discretion. this benefit to Macasio.1âwphi1

Entitlement to holiday pay The governing law on 13th month pay is PD No. 851.53

Evidently, the Serrano ruling speaks only of SIL pay. However, if the LA and the As with holiday and SIL pay, 13th month pay benefits generally cover all
NLRC had only taken counsel from Serrano and earlier cases, they would have employees; an employee must be one of those expressly enumerated to be
correctly reached a similar conclusion regarding the payment of holiday pay exempted. Section 3 of the Rules and Regulations Implementing P.D. No.
since the rule exempting "field personnel" from the grant of holiday pay is 85154enumerates the exemptions from the coverage of 13th month pay benefits.
7
Under Section 3(e), "employers of those who are paid on xxx task basis, and from 7 o'clock in the morning until 4 o'clock in the afternoon, without any rest
those who are paid a fixed amount for performing a specific work, irrespective day.7 On December 18, 2005, Lopez was purportedly terminated from his
of the time consumed in the performance thereof"55 are exempted. employment, whereupon he was told "Jkaw ay lay-off muna."8 Thus, on January
10, 2006, he filed a complaint9 for illegal dismissal with prayer for the payment
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of separation benefits against Irvine before the NLRC Sub-Regional Arbitration
of the Rules and Regulations Implementing PD No. 851 exempts employees Branch No. IV in San Pablo City, Laguna, docketed as NLRC Case No. SRAB-IV 1-
"paid on task basis" without any reference to "field personnel." This could only 8693-06-Q.
mean that insofar as payment of the 13th month pay is concerned, the law did
not intend to qualify the exemption from its coverage with the requirement that For its part, Irvine denied Lopez's claims, alleging that he was employed only as
the task worker be a "field personnel" at the same time. a laborer who, however, sometimes doubled as a guard. As laborer, Lopez's duty
was to bring construction materials from the suppliers' vehicles to the company
WHEREFORE, in light of these considerations, we hereby PARTIALLY GRANT warehouse when there is a construction project in Cavite. 10 As evidenced by an
the petition insofar as the payment of 13th month pay to respondent is Establishment Termination Report11 dated December 28, 2005 which Irvine
concerned. In all other aspects, we AFFIRM the decision dated November 22, previously submitted before the Department of Labor and Employment (DOLE),
2010 and the resolution dated January 31, 2011 of the Court of Appeals in CA- Lopez was, however, temporarily laid-off on December 27, 2005 after the Cavite
G.R. SP No. 116003. project was finished.12 Eventually, Lopez was asked to return to work through a
letter13 dated June 5, 2006 (return to work order), allegedly sent to him within
SO ORDERED. the six ( 6) month period under Article 286 of the Labor Code which pertinently
provides that "[t]he bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months x x x shall not terminate
Republic of the Philippines employment." As such, Irvine argued that Lopez's filing of the complaint for
SUPREME COURT
illegal dismissal was premature.14
Manila
SECOND DIVISION
G.R. No. 207253 August 20, 2014 The LA Ruling
CRISPIN B. LOPEZ, Petitioner,
vs. On December 6, 2007, the Labor Arbiter (LA) rendered a Decision15 ruling that
IRVINE CONSTRUCTION CORP. and TOMAS SY SANTOS, Respondents. Lopez was illegally dismissed. The LA did not give credence to Irvine's
DECISION argument that the lack of its project in Cavite resulted in the interruption of
PERLAS-BERNABE, J.: Lopez's employment in view of Irvine's contradictory averment that Lopez was
Assailed in this petition for review on certiorari 1 are the Decision2 dated merely employed on temporary detail and that he only doubled as a guard.
September 14, 2012 and the Resolution3dated April 12, 2013 of the Court of Granting that Lopez's work as a laborer or as a guard was really affected by the
Appeals (CA) in CA-GR. SP No. 108385-MIN which annulled and set aside the suspension of the operations of Irvine in Cavite, the LA still discredited Irvine's
Resolutions dated October 31, 20084 and February 12, 20095 of the National lay-off claims considering that the return to work order Irvine supposedly sent
Labor Relations Commission (NLRC) in NLRC LAC No. 01-000428-2008, and to Lopez was not even attached to its pleadings. Hence, without any proof that
thereby dismissed petitioner Crispin B. Lopez's (Lopez) complaint for illegal Lopez was asked to return to work, the LA concluded that the dismissal of Lopez
dismissal. went beyond the six-month period fixed by Article 286 of the Labor Code and
The Facts was therefore deemed to be a permanent one effectuated without a valid cause
and due process.16 Accordingly, Irvine was ordered to pay Lopez the sum of
Respondent Irvine Construction Corp. (Irvine) is a construction firm with office ₱272,222.l 7, consisting of Pl 76,905.70 as backwages and other statutory
address at San Juan, Manila.6 It initially hired Lopez as laborer in November benefits, and ₱95,316.00 as separation pay.17
1994 and, thereafter, designated him as a guard at its warehouse in Dasmarifias,
Cavite in the year 2000, with a salary of ₱238.00 per day and working hours At odds with the LA's ruling, Irvine elevated the matter on appeal18 to the NLRC.

8
The NLRC Ruling The Court's Ruling

On October 31, 2008, the NLRC rendered a Resolution19 upholding the LA's The petition is meritorious.
ruling.
Ruling on the propriety of Irvine's course of action in this case preliminarily
It debunked Irvine's contention that Lopez was not illegally dismissed since he calls for a determination of Lopez's employment status - that is, whether Lopez
was merely placed on temporary lay-off due to the lack of project in Cavite for was a project or a regular employee.
the reason that there was no indication, much less substantial evidence, that
Lopez was a project employee who was assigned to carry out a specific project Case law states that the principal test for determining whether particular
or undertaking, with the duration and scope specified at the time of the employees are properly characterized as "project employees" as distinguished
engagement. In this relation, it observed that Lopez worked with Irvine since from "regular employees," is whether or not the "project employees" were
1994 and therefore earned the disputable presumption that he was a regular assigned to carry out a "specific project or undertaking," the duration and scope
employee entitled to security of tenure.20 Thus, since Lopez was not relieved for of which were specified at the time the employees were engaged for that
any just or authorized cause under Articles 282 and 283 of the Labor Code, the project. The project could either be (1) a particular job or undertaking that is
NLRC upheld the LA's finding that he was illegally dismissed. 21 within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of
Dissatisfied, Irvine filed a motion for reconsideration22 which was, however, the company; or (2) a particular job or undertaking that is not within the
denied in a Resolution23 dated February 12, 2009; hence, it filed a petition for regular business of the corporation. In order to safeguard the rights of workers
certiorari24 before the CA. against the arbitrary use of the word "project" to prevent employees from
attaining the status of regular employees, employers claiming that their
The CA Ruling workers are project employees should not only prove that the duration and
scope of the employment was specified at the time they were engaged, but also
The CA granted Irvine's certiorari petition in a Decision25 dated September 14, that there was indeed a project.30
2012, thereby reversing the NLRC.
In this case, the NLRC found that no substantial evidence had been presented by
It held that Lopez's complaint for illegal dismissal was prematurely filed since Irvine to show that Lopez had been assigned to carry out a "specific project or
there was no indicia that Lopez was actually prevented by Irvine from returning undertaking," with its duration and scope specified at the time of engagement.
to work or was deprived of any work assignments or duties.26 On the contrary, In view of the weight accorded by the courts to factual findings of labor
the CA found that Lopez was asked to return to work within the six-month tribunals such as the NLRC, the Court, absent any cogent reason to hold
period under Article 286 of the Labor Code. Accordingly, it concluded that otherwise, concurs with its ruling that Lopez was not a project but a regular
Lopez was merely temporarily laid off, and, thus, he could not have been employee.31 This conclusion is bolstered by the undisputed fact that Lopez had
dismissed.27 been employed by Irvine since November 1994,32 or more than 10 years from
the time he was laid off on December 27, 2005.33 Article 280 of the Labor Code
provides that any employee who has rendered at least one year of service,
Aggrieved, Lopez sought reconsideration28 but the same was denied in a
whether such service is continuous or broken, shall be considered a regular
Resolution29 dated April 12, 2013, hence, this petition.
employee:

The Issue Before the Court Art. 280. Regular and casual employment. The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
The core issue for the Court's resolution is whether or not the CA erred in parties, an employment shall be deemed to be regular where the employee has
finding that the NLRC gravely abused its discretion in affirming the LA's ruling been engaged to perform activities which are usually necessary or desirable in
that Lopez was illegally dismissed. the usual business or trade of the employer, except where the employment has

9
been fixed for a specific project or undertaking the completion or termination of It is defined as the severance of employment, through no fault of and without
which has been determined at the time of the engagement of the employee or prejudice to the employee, resorted to by management during the periods of
where the work or service to be performed is seasonal in nature and the business recession, industrial depression, or seasonal fluctuations, or during
employment is for the duration of the season. lulls caused by lack of orders, shortage of materials, conversion of the plant to a
new production program or the introduction of new methods or more efficient
An employment shall be deemed to be casual if it is not covered by the machinery, or of automation.34 Elsewise stated, lay-off is an act of the employer
preceding paragraph: Provided, That any employee who has rendered at least of dismissing employees because of losses in the operation, lack of work, and
one year of service, whether such service is continuous or broken, shall be considerable reduction on the volume of its business, a right recognized and
considered a regular employee x x x. (Emphasis supplied) affirmed by the Court.35 However, a lay-off would be tantamount to a dismissal
only if it is permanent. When a lay-off is only temporary, the employment status
As a regular employee, Lopez is entitled to security of tenure, and, hence, of the employee is not deemed terminated, but merely suspended.36
dismissible only if a just or authorized cause exists therefor. Article 279 of the
Labor Code states this fundamental rule: Pursuant to Article 286 of the Labor Code, the suspension of the operation of
business or undertaking in a temporary lay-off situation must not exceed six (6)
Art. 279. Security of tenure. In cases of regular employment, the employer shall months:37
not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall ART. 286. When Employment not Deemed Terminated. The bona-fide
be entitled to reinstatement without loss of seniority rights and other privileges suspension of the operation of a business or undertaking for a period not
and to his full backwages, inclusive of allowances, and to his other benefits or exceeding six (6) months, or the fulfillment by the employee of a military or
their monetary equivalent computed from the time his compensation was civic duty shall not terminate employment. In all such cases, the employer shall
withheld from him up to the time of his actual reinstatement. (Emphasis reinstate the employee to his former position without loss of seniority rights if
supplied) 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
Among the authorized causes for termination under Article 283 of the Labor military or civic duty. (Emphasis supplied)
Code is retrenchment, or what is sometimes referred to as a "lay-off':
Within this six-month period, the employee should either be recalled or
Art. 283. Closure of Establishment and Reduction of Personnel. The employer permanently retrenched. Otherwise, the employee would be deemed to have
may also terminate the employment of any employee due to the installation of been dismissed, and the employee held liable therefor. As pronounced in the
labor-saving devices, redundancy, retrenchment to prevent losses or the closing case of PT & T Corp. v. NLRC:38
or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a [Article 283 of the Labor Code as above-cited] x x x speaks of a permanent
written notice on the workers and the Ministry of Labor and Employment at retrenchment as opposed to a temporary lay-off as is the case here. There is no
least one (1) month before the intended date thereof. In case of termination due specific provision of law which treats of a temporary retrenchment or lay-off
to the installation of labor-saving devices or redundancy, the worker affected and provides for the requisites in effecting it or a period or duration therefor.
thereby shall be entitled to a separation pay equivalent to at least his one (1) These employees cannot forever be temporarily laid-off. To remedy this
month pay or to at least one (1) month pay for every year of service, whichever situation or fill the hiatus, Article 286 may be applied but only by analogy to set
is higher. In case of retrenchment to prevent losses and in cases of closures or a specific period that employees may remain temporarily laid-off or in floating
cessation of operations of establishment or undertaking not due to serious status. Six months is the period set by law that the operation of a business or
business losses or financial reverses, the separation pay shall be equivalent to undertaking may be suspended thereby suspending the employment of the
one (1) month pay or at least one-half (1/2) month pay for every year of employees concerned. The temporary lay-off wherein the employees likewise
service, whichever is higher. A fraction of at least six (6) months shall be cease to work should also not last longer than six months. After six months, the
considered one (1) whole year. (Emphases supplied) employees should either be recalled to work or permanently retrenched

10
following the requirements of the law, and that failing to comply with this Although the NLRC did not expound on the matter, it is readily apparent that the
would be tantamount to dismissing the employees and the employer would thus supposed lay-off of Lopez was hardly justified considering the absence of any
be liable for such dismissal.39 (Emphasis supplied) causal relation between the cessation of Irvine's project in Cavite with the
suspension of Lopez's work. To repeat, Lopez is a regular and not a project
Notably, in both a permanent and temporary lay-off, jurisprudence dictates that employee. Hence, the continuation of his engagement with Irvine, either in
the one-month notice rule to both the DOLE and the employee under Article 283 Cavite, or possibly, in any of its business locations, should not have been
of the Labor Code, as above cited, is .mandatory.40 Also, in both cases, the lay-off, affected by the culmination of the Cavite project alone. In light of the well-
being an exercise of the employer's management prerogative, must be exercised entrenched rule that the burden to prove the validity and legality of the
in good faith - that is, one which is intended for the advancement of employers' termination of employment falls on the employer,47 Irvine should have
interest and not for the purpose of defeating or circumventing the rights of the established the bona fide suspension of its business operations or undertaking
employees under special laws or under valid agreements.41 Instructive on the that would have resulted in the temporary lay-off of its employees for a period
nature of a lay-off as a management prerogative is the following excerpt from not exceeding six (6) months in accordance with Article 286 of the Labor Code.
the case of Industrial Timber Corporation v. NLRC:42 As enunciated in Nasipit Lumber Co. v. National Organization of Workingmen
(NOWM),48 citing Somerville Stainless Steel Corporation v. NLRC:49
Closure or [suspension] of operations for economic reasons is, therefore,
recognized as a valid exercise of management prerogative. The determination to [T]he burden of proving, with sufficient and convincing evidence, that such
cease [or suspend] operations is a prerogative of management, which the State closure or suspension is bona fide falls upon the employer. As we ruled in
does not usually interfere with, as no business or undertaking [is] required to Somerville Stainless Steel Corporation v. NLRC:
continue operating at a loss simply because it has to maintain its workers in
employment. Such an act would be tantamount to a taking of property without Considering the severe consequences occasioned by retrenchment on the
due process of law. 43 livelihood of the employee(s) to be dismissed, and the avowed policy of the
State - under Sec. 3, Art. XIII of the Constitution, and Art. 3 of the Labor Code - to
In the case at bar, Irvine asserts that it only temporarily laid-off Lopez from afford full protection to labor and to assure the employee's right to enjoy
work on December 27, 2005 for the reason that its project in Cavite had already security of tenure, the Court reiterates that "not every loss incurred or expected
been finished. To support its claim, it submitted the following pieces of to be incurred by a company will justify retrenchment. The losses must be
evidence: (a) a copy of an Establishment Termination Report44 evidencing substantial and the retrenchment must be reasonably necessary to avert such
Lopez's lay-off; (b) a copy of the return to work order dated June 5, 2006;45 and losses. Settled is the rule that the employer bears the burden of proving this
(c) an affidavit46 from Irvine's personnel manager, Aguinaldo Santos, which allegation of the existence or imminence of substantial losses, which by its
purports that said return to work order was sent to Lopez by ordinary mail on nature is an affirmative defense. It is the duty of the employer to prove with
June 5, 2006. The CA gave credence to the foregoing and thus granted Irvine's Clear and satisfactory evidence that legitimate business reasons exist to justify
certiorari petition against the NLRC ruling which affirmed the LA's finding of retrenchment. Failure to do so "inevitably results in a finding that the dismissal
illegal dismissal. is. unjustified." And the determination of whether an employer has sufficiently
and successfully discharged this burden of proof "is essentially a question of fact
The CA is mistaken. for the Labor Arbiter and the NLRC to determine."

As the NLRC correctly ruled in this case, Lopez, who, as earlier discussed was a Otherwise, such ground for termination would be susceptible to abuse by
regular employee of Irvine, was not merely temporarily laid off from work but scheming employers who might be merely feigning business losses or reverses
was terminated from his employment without any valid cause therefor; thus, in their business ventures to ease out employees.50 (Emphasis supplied;
the proper disposition is to affirm the LA's ruling that Lopez had been illegally citations omitted)
dismissed.
In this case, Irvine failed to prove compliance with the parameters of Article 286
of the Labor Code. As the records would show, it merely completed one of its

11
numerous construction projects which does not, by and of itself, amount to a Lopez to any of its projects. Add to this the fact that Irvine did not proffer any
bona .fide suspension of business operations or undertaking. In invoking Article sufficient justification for singling out Lopez for lay-off among its other three
286 of the Labor Code, the paramount consideration should be the dire exigency hundred employees, thereby casting a cloud of doubt on Irvine's good faith in
of the business of the employer that compels it to put some of its employees pursuing this course of action. Verily, Irvine cannot conveniently suspend the
temporarily out of work.51 This means that the employer should be able to work of any of its employees in the guise of a temporary lay-off when it has not
prove that it is faced with a clear and compelling economic reason which shown compliance with the legal parameters under Article 286 of the Labor
reasonably forces it to temporarily shut down its business operations or a Code. With Irvine failing to prove such compliance, the resulting legal
particular undertaking, incidentally resulting to the temporary lay-off of its conclusion is that Lopez had been constructively dismissed; and since the same
employees. was effected without any valid cause and due process, the NLRC properly
affirmed the LA's ruling that Lopez's dismissal was illegal.
Due to the grim economic consequences to the employee, case law states that
the employer should also bear the burden of proving that there are no posts In light of the foregoing, the CA therefore erred in granting Irvine's certiorari
available to which the employee temporarily out of work can be petition. Indeed, a petition for certiorari should only be granted when grave
assigned.52 Thus, in the case of Mobile Protective & Detective Agency v. abuse of discretion exists - that. is, when a court or tribunal acts in a capricious
Ompad,53 the Court found that the security guards therein were constructively or whimsical exercise of judgment as is equivalent to lack of
dismissed considering that their employer was not able to show any dire jurisdiction.55 These qualities of capriciousness and whimsicality the Court finds
exigency justifying the latter's failure to give said employees any further wanting in any of the NLRC's actions in this case; as such, the reversal of the
assignment, viz.: CA's Decision is hereby warranted.

[Article 286 of the Labor Code] has been applied by analogy to security guards WHEREFORE, the petition is GRANTED. The Decision dated September 14, 2012
in a security agency who are placed "off detail" or on "floating" status. In and the Resolution dated April 12, 2013 of the Court of Appeals in CA-G.R. SP
security agency parlance, to be placed "off detail" or on "floating" status means No. 108385-MIN are hereby REVERSED and SET ASIDE. The Resolutions dated
"waiting to be posted." Pursuant to Article 286 of the Labor Code, to be put off October 31, 2008 and February 12, 2009 of the National Labor Relations
detail or in floating status requires no less than the dire exigency of the Commission in NLRC LAC No. 01-000428-2008 are REINSTATED.
employer's bona fide suspension of operation, business or undertaking. In
security services, this happens when there is a surplus of security guards over SO ORDERED.
available assignments as when the clients that do not renew their contracts
with the security agency are more than those clients that do and the new ones Republic of the Philippines
that the agency gets. SUPREME COURT
Manila
Again, petitioners only alleged that respondent's last assignment was with VVCC THIRD DIVISION
for the period of September 29 to October 31, 1997.1âwphi1 He was not given G.R. NO. 157370 June 8, 2007
further assignment as he allegedly went on AWOL and lost interest to work. As RAMIL P. ORTIZ, Petitioner,
explained, these claims are unconvincing. Worse still, they are inadequate under vs.
the law. The records do not show that there was a lack of available post after COURT OF APPEALS, THE OFFICE OF THE CITY PROSECUTOR OF MANILA
October 1997. It appears that petitioners simply stopped giving respondent any and BENEDICTO S. CAJUCOM,Respondents.
assignment. Absent any dire exigency justifying their failure to give respondent DECISION
further assignment, the only logical conclusion is that respondent was AUSTRIA-MARTINEZ, J.:
constructively dismissed.54 (Emphases supplied) This resolves the petition for certiorari and/or prohibition with prayer for
temporary restraining order and preliminary injunction seeking the
The same can be said of the employee in this case as no evidence was submitted nullification of the Resolution1 of the Court of Appeals (CA) dated June 25, 2002
by Irvine to show any dire exigency which rendered it incapable of assigning dismissing petitioner's petition for certiorari before said court, and the

12
Resolution2 dated February 17, 2003 denying petitioner's motion for CONTRARY TO LAW.3
reconsideration.
The antecedent facts are as follows. Petitioner filed a Motion to Quash with the RTC on the ground that the trial
court had no jurisdiction over the offense charged. Petitioner pointed out that
A complaint for libel was filed by private respondent Benedicto S. Cajucom Article 360 of the Revised Penal Code required that in case the offended party is
(Cajucom) against Ramil P. Ortiz (petitioner). Cajucom indicated therein his a private individual, the criminal action for libel should be filed in the province
postal address as 3863 E. Vallejo, Santol, Sta. Mesa, Manila. On the basis of said or city where the libelous article is first published, or the province or city where
complaint, the Office of the City Prosecutor of Manila (OCP) filed an Information any of the offended parties actually resides at the time of the commission of the
for libel with the Regional Trial Court of Manila, Branch 28 (RTC). Petitioner offense. Petitioner argued that since Cajucom's complaint did not state that he
subsequently moved for reinvestigation and the RTC granted such motion. After was actually residing in Sta. Mesa, Manila at the time of the commission of the
reinvestigation, the OCP filed an Amended Information reading as follows: offense but instead merely indicated the same as his postal address, then there
was no compliance with the requirements of Art. 360 of the Revised Penal Code.
The undersigned accused RAMIL PIAMONTE ORTIZ of the crime of libel, Petitioner also filed a Manifestation with the RTC attaching thereto a copy of the
committed as follows: administrative complaint filed by his sister against Cajucom and copies of
Resolutions of the Supreme Court on said administrative complaint, wherein it
That on or about December 8, 1998, in the City of Manila, Philippines, the said was stated that the address of Cajucom was No. 5 Dao Street, Town and Country
accused, with malicious purpose of impeaching the virtue, honor, character and Executive Village, Marcos Highway, Mayamot, Antipolo, Rizal.
reputation of BENEDICTO A. CAJUCOM VII, a lawyer, then residing at this City,
formerly employed as Vice President for Legal Affairs, TPI Philippine Vinyl The RTC then issued an Order dated October 8, 2001, denying petitioner's
Corporation, TPI Philippine Cement Corporation and Thun Tritasavit, and with motion to quash the information for libel. The RTC ruled that the case was
evident intent of exposing him to public hatred, contempt and ridicule, did then properly filed in Manila, since it has been held that a person may have two or
and there wilfully, unlawfully, feloniously and maliciously write, publish, exhibit more residences. Petitioner's motion for reconsideration of said order was
and circulate and/or caused to be written, published, exhibited and circulated a likewise denied.
letter which was addressed and sent to and received by the President of the TPI
(Philippines) Inc. at Makati City, and the latter attached said letter as Annex 16 Petitioner elevated the issue to the CA via a petition for certiorari, but his
in a Position Paper which was submitted to the National Labor Relations petition was dismissed outright per Resolution dated June 25, 2002. The CA
Commission, National Capital Region (Quezon City)which contains injurious, held that the proper remedy from a denial of a motion to quash is for the
false and malicious, defamatory and libelous statements or remarks concerning petitioner to go to trial on the merits and then to appeal therefrom. Petitioner
the said Benedicto A. Cajucom VII, x x x moved for reconsideration but in its Resolution dated February 17, 2003, the CA
found the motion to be unmeritorious, upholding the ruling of the RTC that a
xxx xxx xxx person can have numerous places of residence.

with which statements, the said accused meant and intended to convey, as in Aggrieved by the Resolutions of the CA, petitioner filed the present petition
fact he did mean and convey false and malicious imputation that the said for certiorari alleging that the CA committed grave abuse of discretion
Benedicto Cajucom VII is an irresponsible, untrustworthy, unscrupulous and amounting to lack of jurisdiction because it completely disregarded the
devious individual which imputations as he well knew, were false and following evidence and/or arguments, to wit:
malicious, offensive and derogatory to the good name, character and reputation
of said Benedicto Cajucom VII and that the said letter was solely written and 1) Private respondent himself did not state Sta. Mesa, Manila as his actual
circulated by the said accused for no other purpose than to impeach and residence, but merely his postal address, showing that private respondent does
besmirch the good name, character and reputation of the said Benedicto not consider said place as his residence. Private respondent's failure to state his
Cajucom VII, in order to expose him, as in fact, he was exposed to dishonor, actual residence is fatal and does not vest jurisdiction over the offense in the
discredit, public hatred, contempt and ridicule. RTC of Manila;

13
2) Petitioner submitted evidence, i.e., certified true copies of documents arguments and evidence submitted by petitioner, as official duty is presumed to
submitted in the administrative case filed against private respondent before the have been regularly performed in the absence of credible proof to the
Supreme Court, showing that private respondent's actual residence is in contrary.6 In this case, there is a dearth of evidence to overturn such
Mayamot, Antipolo City; presumption. Thus, on the point alone that the issues presented by petitioner
are not proper subjects of an action for certiorari or prohibition, the petition is
3) Even the CA stated in its Resolution that private respondent's postal address already clearly dismissible.
in Sta. Mesa, Manila is the residence of private respondent's parents, not his, as
he was not physically present thereat; said address may be private respondent's The present petition for certiorari and prohibition should also be dismissed on
domicile but not his actual residence; and the ground that it does not comply with the requirement of both Sections 1
(for certiorari) and 2 (for prohibition) of Rule 65 of the 1997 Rules of Civil
4) The CA should have given weight to petitioner's argument that the clear Procedure which states that there should be no appeal or any other plain,
intention of Art. 360 of the Revised Penal Code is to exclude a person's domicile speedy, and adequate remedy available in the ordinary course of law. The more
as the venue for the filing of complaints for libel. adequate remedy for petitioner to assail the Resolution of the CA is to file a
petition for review on certiorari under Rule 45 of the aforementioned Rules. In a
The petition is doomed to fail. petition for review, petitioner may question the propriety or correctness of the
legal conclusions reached by the CA.
It should be emphasized that the remedy of certiorari or prohibition is limited
to the correction of errors of jurisdiction. Thus, in People v. Court of Appeals,4 the Nevertheless, it should be stated that the CA did not commit any grave abuse of
Court expounded on the function of the remedy of certiorari in this wise: discretion. The discussion of the issues in its Resolutions precludes any finding
that it ignored petitioner's arguments or evidence. Moreover, petitioner should
be reminded that the jurisdiction of a court over the criminal case is determined
As observed in Land Bank of the Philippines v. Court of Appeals, et al. "the special
by the allegations in the complaint or information.7 In Macasaet v.
civil action for certiorari is a remedy designed for the correction of errors
People,8 the Court clarified that:
of jurisdiction and not errors of judgment. The raison d’etre for the rule is
when a court exercises its jurisdiction, an error committed while so engaged
does not deprive it of the jurisdiction being exercised when the error is x x x as to the venue of the criminal action for written defamation, the
committed. If it did, every error committed by a court would deprive it of its complaint or information should contain allegations as to whether, at the
jurisdiction and every erroneous judgment would be a void judgment. In such a time the offense was committed, the offended party was a public officer or a
scenario, the administration of justice would not survive. Hence, where the private individual and where he was actually residing at that time.
issue or question involved affects the wisdom or legal soundness of the (Emphasis supplied)
decision – not the jurisdiction of the court to render said decision – the
same is beyond the province of a special civil action for certiorari. x x In this case, the Amended Information filed with the RTC clearly alleged that
x 5 (Emphasis supplied) the offended party was "then residing at this City [Manila]." Such allegation is
sufficient to comply with the requirement set forth in the afore-quoted case and
In this case, the arguments in the petition reveal that what petitioner is to vest jurisdiction in the RTC of Manila.
attacking is the correctness or legal soundness of the conclusion reached by the
CA. Indeed, petitioner alleges that the CA failed to take his arguments or IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of
evidence into consideration, but a reading of the CA Resolutions in question merit.
shows that it squarely addressed the essential arguments raised by petitioner.
In the Resolution dated February 17, 2003, the CA fully discussed the issue of SO ORDERED.
whether or not private respondent's postal address of No. 3863 E. Vallejo,
Santol, Sta. Mesa, Manila may be considered as his actual residence. In arriving
at its conclusion, the CA is presumed to have taken into consideration all the
14
Republic of the Philippines In its position paper,8 respondent claimed that there was no dismissal, of
SUPREME COURT petitioners, constructive or otherwise, and asserted that their termination was
Baguio City due to the expiration of the service contract which was coterminus with their
THIRD DIVISION contract of employment.
G.R. No. 193756 April 10, 2013
VENANCIO S. REYES, EDGARDO C. DABBAY, WALTER A. VIGILIA, NEMECIO On August 20, 2007, the Labor Arbiter (LA) rendered a decision9 in favor of
M. CALANNO, ROGELIO A. SUPE, JR., ROLAND R. TRINIDAD, and AURELIO A. petitioners ordering respondent to pay petitioners separation pay, backwages,
DULDULAO, Petitioners, refund of trust fund, moral and exemplary damages, and attorneys fees.
vs.
RP GUARDIANS SECURITY AGENCY, INC., Respondent. Aggrieved, respondent appealed to the NLRC.
DECISION
MENDOZA, J.:
On April 9, 2008, the NLRC promulgated its decision10 sustaining the finding of
Before the Court is a petition for review under Rule 45 of the Rules of Court, constructive dismissal by the LA, and the awards she made in the decision. The
assailing the May 18, 2010 Amended Decision1 and the September 13, 2010 award of moral and exemplary damages, however, were deleted.
Resolution2 of the Court of Appeals (CA), in C.A.-GR. SP No. 106643, which
modified the April 9, 2008 Decision3 of the National Labor Relations Upon denial of its motion for reconsideration,11 respondent filed a petition for
Commission (NLRC) in NLRC LAC Case No. 11-002990-07, insofar as the award certiorari before the CA.
of backwages, the computation of separation pay, and the refund for the trust
fund contributions are concerned. On February 26, 2010, the CA rendered a decision12 dismissing the petition and
The Facts: affirming the assailed NLRC decision and resolution.

Petitioners Venancio S. Reyes, Edgardo C. Dabbay, Walter A. Vigilia, Nemesio M. On motion for reconsideration, the CA issued the Amended Decision13 dated
Calanno, Rogelio A. Supe, Jr., Roland R. Trinidad, and Aurelio A. Duldulao May 18, 2010, modifying its earlier decision. Citing Section 6.5 (4) of
(petitioners) were hired by respondent RP Guardians Security Agency, Inc. Department Order No. 14 of the Department of Labor and Employment (DOLE
(respondent) as security guards. They were deployed to various clients of D.O. No. 14), otherwise known as Guidelines Governing the Employment and
respondent, the last of which were the different branches of Banco Filipino Working Conditions of Security Guards and Similar Personnel in the Private
Savings and Mortgage Bank (Banco Filipino). Security Industry, the CA reduced the computation of the separation pay from
one month pay per year of service to one-half month pay for every year of
In September 2006, respondent’s security contract with Banco Filipino was service; reduced the refund of trust fund contribution from Sixty (₱60.00) Pesos
terminated. In separate letters,4petitioners were individually informed of the to Thirty (₱30.00)Pesos; and deleted the award of backwages and attorney’s
termination of the security contract with Banco de Oro. In two (2) memoranda, fees.
dated September 21, 20065 and September 29, 2006,6 petitioners were directed
to turnover their duties and responsibilities to the incoming security agency Hence, this petition anchored on the following:
and were advised that they would be placed on floating status while waiting for
available post. Petitioners waited for their next assignment, but several months GROUNDS FOR THE PETITION
lapsed and they were not given new assignments.
8.0 The Court of Appeals has decided a question of substance in a way that is not
Consequently, on April 10, 2007, petitioners filed a complaint7 for constructive in accord with law and with applicable decisions of the Supreme Court
dismissal. concerning the Petitioner’s basic right to fair play, justice and due process, with
more reason that a conclusion of law cannot be made in the motion for
reconsideration.

15
8.1 The first decision promulgated by the Court of Appeals on February 26, Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
2010 affirming the decision of the NLRC awarding both backwages and reinstatement. The two reliefs provided are separate and distinct. In instances
separation pay of one month pay for every year of service can only be set aside where reinstatement is no longer feasible because of strained relations between
upon proof of grave abuse of discretion, fraud or error of law. the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation
8.2 Petitioners are entitled to backwages for the period covered from the time pay if reinstatement is no longer viable, and backwages.
the Labor Arbiter rendered the decision in their favor on August 20, 2007 until
said decision was reversed by the Court of Appeals in its Amended Decision The normal consequences of respondents’ illegal dismissal, then, are
promulgated on May 18, 2010.14 reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of actual
There is no doubt that petitioners were constructively dismissed. The LA, the reinstatement. Where reinstatement is no longer viable as an option, separation
NLRC and the CA were one in their conclusion that respondent was guilty of pay equivalent to one (1) month salary for every year of service should be
illegal dismissal when it placed petitioners on floating status beyond the awarded as an alternative. The payment of separation pay is in addition to
reasonable six-month period after the termination of their service contract with payment of backwages. [Emphasis Supplied]
Banco de Oro. Temporary displacement or temporary off-detail of security
guard is, generally, allowed in a situation where a security agency’s client Furthermore, the entitlement of the dismissed employee to separation pay of
decided not to renew their service contract with the agency and no post is one month for every year of service should not be confused with Section 6.5 (4)
available for the relieved security guard.15 Such situation does not normally of DOLE D.O. No. 14 which grants a separation pay of one-half month for every
result in a constructive dismissal. Nonetheless, when the floating status lasts for year service, to wit:
more than six (6) months, the employee may be considered to have been
constructively dismissed.16 No less than the Constitution17 guarantees the right 6.5 Other Mandatory Benefits. In appropriate cases, security guards/similar
of workers to security of tenure, thus, employees can only be dismissed for just personnel are entitled to the mandatory benefits as listed below, although the
or authorized causes and after they have been afforded the due process of law. 18 same may not be included in the monthly cost distribution in the contracts,
except the required premiums for their coverage:
Settled is the rule that that an employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other a. Maternity benefit as provided under the SSS Law;
privileges, and to his full backwages, inclusive of allowances and to his other
benefits or their monetary equivalent computed from the time his b. Separation pay if the termination of employment is for authorized cause as
compensation was withheld up to the time of actual reinstatement. 19 If provided by law and as enumerated below:
reinstatement is not possible, however, the award of separation pay is proper.20
Half-Month Pay Per Year of Service, but in no case less than One Month Pay, if
Backwages and reinstatement are separate and distinct reliefs given to an separation is due to:
illegally dismissed employee in order to alleviate the economic damage brought
about by the employee’s dismissal.21 "Reinstatement is a restoration to a state
1. Retrenchment or reduction of personnel effected by management to prevent
from which one has been removed or separated" while "the payment of
backwages is a form of relief that restores the income that was lost by reason of serious losses;
the unlawful dismissal." Therefore, the award of one does not bar the other. 22
2. Closure or cessation of operation of an establishment not due to serious
In the case of Aliling v. Feliciano,23 citing Golden Ace Builders v. Talde,24 the losses or financial reverses;
Court explained:
3. Illness or disease not curable within a period of 6 months and continued
employment is prohibited by law or prejudicial to the employee's health or that
of co-employees; or
16
4. Lack of service assignment for a continuous period of 6 months.The said NOEL T. DE BORJA, REMEGIO P.
provision contemplates a situation where a security guard is removed for BASCO, MATEO D. DEOCAREZA,
authorized causes such as when the security agency experiences a surplus of EMILIANO A. EBREO, BENJAMIN
security guards brought about by lack of clients. In such a case, the security PAZ, LEONORA PAZ, CLAUDIO DE Present:
agency has the option to resort to retrenchment upon compliance with the LOS REYES, LEANDRO R. CELIS,
procedural requirements of "two-notice rule" set forth in the Labor Code and to PATERNO FERNANDEZ, ANICETO M. YNARES-SANTIAGO, J.,
pay separation pay of one-half month for every year of service. RODRIGUEZ, DONATO M. Chairperson,
PUNZALAN, LOURDES ALFONSO Q., AUSTRIA-MARTINEZ,
In this case, respondent would have been liable for reinstatement and payment ALLAN PANLILIO, DAISY V. ARCEO, CALLEJO, SR.,
of backwages. Reinstatement, however, was no longer feasible because, as ALEJANDRO D. PASCUAL, MA. CHICO-NAZARIO, and
found by the LA, respondent had already ceased operation of its CORAZON T. BAJO, ARNOLD M. NACHURA, JJ.
business.25 Thus, backwages and separation pay, in the amount of one month for BLANCO, CRISTITO S. ABELA,
every year of service, should be paid in lieu of reinstatement. DIOSCORO FAJANILAG, and
AGUSTIN WONG,
As to their claim of attorney's fees, petitioners were compelled to file an action Petitioners,
for the recovery of their lawful wages and other benefits and, in the process,
incurred expenses. Hence, petitioners are entitled to attorney's fees equivalent
to ten percent (10%) of the monetary award.26 - versus -

Finally, as to the refund of the trust fund contribution, a perusal of the records HON. COURT OF APPEALS, MONDE
shows that the amount deducted for the trust fund contribution from each
M.Y. SAN BISCUIT CORP., M.Y. SAN
petitioner varies. Some petitioners were deducted the amount of ₱15.00 every
BISCUIT INC., MRS. MHEW WHA
payday while others were deducted ₱30.00 every payday. Thus, the Court
LIM and MR. KENG SUN MAR,
deems it proper to refer the computation of the same to the LA. Respondents.

WHEREFORE, the pet1t10n is GRANTED. The May 18, 2010 Amended Decision
and the September 13, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. Promulgated:
106643 are REVERSED and SET ASIDE. The April 9, 2008 Decision of the
National Labor Relations Commission, modifying the August 20, 2007 Decision
of the Labor Arbiter, is REINSTATED. March 28, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
The case is REMANDED to the Labor Arbiter for further proceedings to make a
detailed computation of the exact amount of monetary benefits due petitioners.

SO ORDERED.
DECISION
THIRD DIVISION

CHICO-NAZARIO, J.:
PILAR ESPINA, ELEANOR G. AQUINO, G.R. No. 164582
LORENE C. BARNUEVO, MARICRIS S. This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks
J. BANDINO, JULIO M. PETALIO, JR., to reverse the following Resolutions of the Court of Appeals in CA-G.R. SP No.
17
78797 entitled, Pilar Espina, et al. v. National Labor Relations Commission, et al.: 1-5 years ----------- 17 days
(a) Resolution[1] dated 23 September 2003 which dismissed petitioners appeal 5-10 years ----------- 17 days
for failure of all of the petitioners to sign the certification of non-forum 10-20 years ----------- 17 days
shopping; (b) Resolution[2] dated 3 March 2004, denying petitioners motion to 20-30 years ----------- 30 days
drop the names of their co-workers who failed to sign the certification of non- 30-35 years ----------- 32 days
forum shopping; and (c) Resolution[3] dated 23 June 2004, denying petitioners
Motion for Reconsideration. Sick leaves

The factual antecedents of the case are as follows: 1-5 years ---------- 17 days
5-10 years ---------- 17 days
Respondent M.Y. San Biscuits, Inc. (M.Y. San) was previously engaged in 10-20 years ---------- 17 days
the business of manufacturing biscuits and other related products. 20-30 years ---------- 30 days
On 27 December 2000, in a conciliation proceeding before the 30-up ---------- 32 days
Department of Labor and Employment (DOLE) NCMB-NCR Director Leopoldo
de Jesus, the duly authorized representative of M.Y. San Workers Union-PTGWO 5. The Company will pay one-half of the total union
and M.Y. San Sales Force Union-PTGWO was informed of the closure or dues for year 2001.
cessation of business operations of respondent M.Y. San as a result of the
intended sale of the business and all the assets of respondent M.Y. San to 6. The existing local unions affiliated with PTGWO is
respondent Monde M.Y. San Corporation (Monde) and was notified of their directly and voluntarily recognized as the sole and exclusive
termination, effective 31 January 2001. It was agreed that: bargaining agent of the employees at Monde M.Y. San
Corporation, the new owner/name of M.Y. San Biscuits Inc. The
In the interest of industrial peace, the union and company promises to give PTGWO a written confirmation of
management have agreed as follows: recognition from the new owner/company.

1. In consideration of the length of service of the 7. That the separation pay is Tax-Free.
employees, the management will pay separation package in
accordance with their existing Collective Bargaining 8. That the SSS and PAG-IBIG loans shall be directly
Agreement. In addition the company will likewise grant nine remitted by the employees concerned.
(9) days per year of service on top of what is provided for in
the CBA. 9. The company will submit list of all employees to the
new owner for purposes of rehiring, subject to the new
2. The computation of separation package shall be qualifications that may be imposed by the new
based on employees present basic daily rate for year 2000 plus owner/company.The said employees, however, shall be given
the increase of P15.00 per day for all employees. hiring preference.

3. The cut-off date of the length of service is on January 10. As requested, the company furnished the union
31, 2001. with a copy of the list of affected employees and
announcement letter from the President of M.Y. San Biscuit.
4. The Company shall extend to all affected employees
the cash equivalent of their vacation and sick leaves, as follows: 11. The Company agrees to start the giving of
separation pay by the second week of January 2001 but shall in
Vacation leaves no case beyond the third week of the said month.

18
12. The agreement of the parties in this proceeding the UNION. The continued existence of the UNION in the
shall be contained in the Memorandum of Agreement that will company and/or MONDE M.Y. SAN CORPORATION shall not be
be immediately prepared by the parties. interrupted by the payment of the Companys employees of
their separation package or the temporary closure of the
13. In view of this Agreement, the notices of strike Companys operations.[6]
filed with this Office are deemed settled and withdrawn. The
rights of the parties are, however, not waived should any of the
terms of this agreement are violated by any of the parties. On 31 January 2001, all the employees of respondent M.Y. San received
their separation pay and the cash equivalent of their vacation and sick
27 December 2001.[4] leaves. Thereafter, they signed their respective Quitclaims.

On 1 February 2001, an Asset Purchase Agreement was executed


On 28 December 2000, the written notice of the sale and purchase of between respondents M.Y. San and Monde.
the assets of respondent M.Y San to respondent Monde and of the termination
of all the employees of respondent M.Y. San were filed before the DOLE Regional On 2 February 2001, respondent Monde commenced its operations. All
Office No. IV.[5] the former employees of respondent M.Y. San who were terminated upon its
closure and who applied and qualified for probationary employment, including
On 22 January 2001, respondent M.Y. San and the Union signed a petitioners herein, started working for respondent Monde on a contractual
Memorandum of Agreement (MOA) embodying the agreements set forth in the basis for a period of six months.
Minutes/Agreement, dated 27 December 2000. Embodied in the MOA is an
agreement that the existing Collective Bargaining Agreement shall cease to be Subsequently, petitioners were terminated on various dates.
effective on 31 January 2001 and shall in no way be binding upon the buyer,
respondent Monde, and that respondent M.Y. San shall provide respondent Thus, petitioners filed a Complaint for illegal dismissal and
Monde a list of all its present employees who shall be given preference in underpayment, damages and attorneys fees and litigation cost with the National
employment by the latter. Pertinent provisions of the Agreement: Labor Relations Commission (NLRC), Regional Arbitration Branch No. IV.

9. The Company agrees to submit the list of all its Petitioners alleged that respondent My San stopped its operations on
present employees to the new corporation for purposes of 31 January 2001, but three days after, resumed its operation with the same top
rehiring if said employee applies and qualifies, subject to such management running the business; the union officers, in exchange for being re-
criteria as the new corporation may impose. In the rehiring, the hired, acceded to bust the union; and the sale of respondent M.Y. San to
covered employees shall be given hiring preference, if respondent Monde was merely a ploy to circumvent the provisions of the Labor
qualified. The corresponding Notice as to whom of the covered Code.
employees have been hired by the new corporation shall be
issued immediately after January 31, 2001. During the entire Respondent M.Y. San insisted that its employer-employee relationship
rehiring process and until the election and qualification of the with petitioners had ceased to exist, thus, the complaint for illegal dismissal
new officers, the PTGWO, through its National President, or his against it could no longer prosper. It further contended that the power to hire
authorized representative, shall act as the TRUSTEE of and fire employees is now lodged in the new business owner, respondent
the UNION. Monde.

10. All employees hired by MONDE M.Y. SAN On the other hand, respondent Monde alleged that petitioners had no
CORPORATION and/or the new owner of the COMPANY, shall cause of action against it, stating thus:
upon hiring, subject to the terms and conditions of their
probationary employment, become members of

19
A few days before 02 May 2001, the respective Complainants Barnuevo and Ollorsa refused to be
supervisors of Monde conducted an evaluation of the transferred from the mixing department to the packing
performance of all its probationary employees, including department and consequently tendered their resignation
herein complainants, to determine their fitness to qualify as letters and likewise signed their respective release, waiver and
regular employees therein. quitclaims. x x x.

On 02 May 2001, the probationary employees of Seven (7) complainants opted not to report for work
Monde who passed the performance appraisal and who either on 02 May 2001 and the succeeding days thereafter or
qualified as regular employees thereof were accordingly even before the expiration of their probationary employment.
appointed as such. Out of the one hundred sixteen (116) After notice to explain was duly served upon them, they
probationary employees engaged by respondent Monde, a total deliberately failed/refused to explain their absences.
of seventy-four employees qualified for regular employment Accordingly, individual notices informing them of their
on 02 May 2001. x x x. dismissal due to AWOL/gross and habitual neglect of duties
were personally delivered to their respective addresses or by
For those who did not qualify for regular employment registered mail.
on 02 May 2001, including herein complainants
[petitioners], respondent Monde gave complainants the 1. Pilar Espina;
remainder of their probationary period, or until 02 July 2001, 2. Eleanor G. Aquino;
within which to prove their qualification for regular 3. Maricris S.J. Bandino;
employment therewith. 4. Julio M. Petalio, Jr.;
5. Emiliano A. Ebreo;
Notwithstanding the opportunity given to herein 6. Benjamin Paz; and
complainants [petitioners] to improve their performance to 7. Leonora Paz
qualify for regular employment with Monde, complainants
[petitioners] either: (a) resigned from their employment with Copies of the notices to explain and the notice of
Monde; (b) refused to report for work on 02 May 2001 and on dismissal of the foregoing employees are hereto attached x x x.
the days following; or (c) failed to qualify for regular In view of complainants Espino, Aquino and Bandinos refusal
employment at the expiration of the period of their to receive copies of the notice of dismissal personally delivered
probationary employment. to them, Monde likewise submitted copies of the same to he
Rizal Province Labor and Employment Office, DOLE Region 4
More specifically, the following complainants on 29 June 2001.
[petitioners] resigned from their employment with Monde and
for which they signed their respective release, waiver and The following complainants failed to qualify as regular
quitclaims: employees in accordance with the terms and conditions of
their probationary employment with Monde and were duly
1. Lorene C. Barnuevo; informed of their failure to qualify as regular employees by
2. Lina P. Asugao; letter dated 23 June 2001terminating their probationary
3. Noel T. de Borja; employment effective at the close of business hours on 02 July
4. Claudio delos Reyes; 2001:
5. Eddie Ollorsa; and
6. Joey Cerbito 1. Leandro F. Celis;
2. Paterno Fernandez;
3. Aniceto M. Rodriguez;

20
4. Donato M. Punzalan;
5. George Quinquilleria; On appeal, NLRC affirmed the Decision of the Labor Arbiter in a
6. Lourdes Alfonso; Resolution[9] dated 30 August 2002.
7. Allan Palilio;
8. Daisy V. Arceo; Aggrieved, petitioners went to the Court of Appeals via a Petition for
9. Mario Ramos; Certiorari[10]under Rule 65 of the Rules of Court. However, the appellate court
10. Alejandro Pascual; dismissed[11] the petition on the ground that the Special Power of Attorney
11. Ma. Corazon Bajo; (SPA) executed by petitioners did not bear the signatures of their three other
12. Arnold M. Blanco; co-petitioners therein. A perusal of the said SPA would reveal the apparent
13. Cristito Abela; absence therein of the signatures of Eddie Ollorsa, Joey Cerbito and George
14. Dioscoro Fajanilag; and Quinquillera.
15. Agustin Wong.
Subsequently, petitioners filed a motion[12] to drop the names of their
Representative copies of the letter dated 23 June 2001 three co-petitioners who failed to sign the SPA and prayed for the
terminating the probationary employment of the foregoing reconsideration of the dismissal of their petition. The Motion was denied[13] by
employees effective at the close of business hours on 02 July the Court of Appeals on 3 March 2004, on the ground that subsequent
2001 are hereto attached x x x. compliance does not warrant a reconsideration of the Order of dismissal. The
Anent complainant Remegio Basco, on 10 May 2001, appellate court further stated that there was no prima facie error committed by
Mr. Sandy B. Brillantes, the Employee Relation Officer of the NLRC in affirming the Decision of the Labor Arbiter.
Monde, chanced upon the former while serving the Notice of
Termination of complainants Julio Petallo and Emiliano Ebreo. Petitioners again filed a Motion for Reconsideration[14] of the 3 March
Complainant Basco, in response to the query as to why he has 2004Resolution, but the same was denied by the Court of Appeals in a
not been reporting for work, informed Mr. Brillantes that he Resolution[15] dated 23 June 2004. According to the appellate court, the said
had decided to stay home instead of reporting for work. motion for reconsideration was actually a second motion for reconsideration,
which is a prohibited pleading under Sec. 2, Rule 52[16] of the Rules of Court.
With respect to complainant Mateo Deocareza, he has
been absent without official leave (AWOL) since 02 May Petitioners are now before us imputing to the Court of Appeals the
2001 and respondent Monde has yet to receive any following errors, to wit[17]:
information on him and/or his whereabouts.
I.
Complainant Arlene Laguerta last reported for work
on 26 May 2001 and has not reported back for work since THE HONORABLE COURT OF APPEALS (FORMER FIFTEENTH
then.[7] DIVISION) SERIOUSLY ERRED IN DISMISSING THE PETITION
FOR CERTIORARI FOR FAILURE OF ALL THE PETITIONERS TO
SIGN THE VERIFICATION AND CERTIFICATION OF NON-
After evaluation of their respective pleadings, Labor Arbiter Vicente R. FORUM SHOPPING.
Layawen rendered a Decision[8] dismissing the case for lack of merit. It ruled
that respondent M.Y. Sans Decision to shut down its operations by selling its II.
assets is its sole prerogative which must be respected, and that it had faithfully
complied with the requirements of the law, i.e., the notice and payment of THE HONORABLE COURT OF APPEALS (FORMER FIFTEENTH
separation pay. As to respondent Monde, the Labor Arbiter ruled that the DIVISION) SERIOUSLY ERRED IN DENYING PETITIONERS
former satisfactorily discharged the burden of establishing a just and MOTION TO DROP EDDIE OLLORSA, JOEY CERBITO AND
authorized cause for terminating the services of petitioners. GEORGE QUINQUILLERA AS PETITIONERS.

21
dispensed with or its requirements completely disregarded.[20] It does not,
III. however, thereby interdict substantial compliance with its provisions under
justifiable circumstances.[21]
THE HONORABLE COURT OF APPEALS (FORMER FIFTEENTH
DIVISION) SERIOUSLY ERRED IN DENYING PETITIONERS In the case of San Miguel Corporation v. Aballa,[22] the dismissed
MOTION FOR RECONSIDERATION. employees filed with the NLRC a complaint for declaration as regular employees
of San Miguel Corporation (SMC) and for an illegal dismissal case, following
IV. SMCs closure of its Bacolod Shrimp Processing Plant. After an unfavorable
ruling from the NLRC, the dismissed employees filed a petition
THE HONORABLE COURT OF APPEALS (FORMER FIFTEENTH for certiorari with the Court of Appeals. Only three out of the 97 named
DIVISION) SERIOUSLY ERRED IN NOT DECLARING THE petitioners signed the verification and certification of non-forum shopping. This
ALLEGED SALE OF M.Y. SAN TO MONDE AS MERE PLOY TO Court ruled that given the collective nature of the petition filed before the
CIRCUMVENT THE PROVISIONS OF THE LABOR CODE AND appellate court, which raised only one common cause of action against SMC, the
THUS, VIOLATED THE TENURIAL SECURITY OF THE execution by the three petitioners, in behalf of all the other petitioners, of the
PETITIONERS. certificate of non-forum shopping constitutes substantial compliance with the
Rules.
V.
In the case at bar, the signatures of 25 out of the 28 employees who
THE HONORABLE COURT OF APPEALS (FORMER FIFTEENTH filed the Petition for Certiorari in the appellate court, likewise, constitute
DIVISION) SERIOUSLY ERRED IN NOT PIERCING THE VEIL OF substantial compliance with the Rules. Petitioners raised one common cause of
THE CORPORATE PERSONALITIES OF M.Y. SAN AND/OR action against respondents M.Y. San and Monde, i.e., the illegal closure of
MONDE. respondent M.Y. San and its subsequent sale to respondent Monde, which
resulted in the termination of their services. They share a common interest and
VI. common defense in the Complaint for illegal dismissal, which they filed with the
NLRC. Thus, when they appealed their case to the appellate court, they pursued
THE HONORABLE COURT OF APPEALS (FORMER the same as a collective body, raising only one argument in support of their
FIFTEENTH DIVISION) SERIOUSLY ERRED IN NOT DECLARING rights against the illegal dismissal allegedly committed by respondents M.Y. San
THAT THE PETITIONERS WERE ILLEGALY DISMISSED. [18] and Monde. There is sufficient basis, therefore, for the 25 petitioners, to speak
for and in behalf of their co-petitioners, to file the Petition in the appellate court.

Before resolving the substantive issues raised by petitioners, the Court Ordinarily, we would have remanded this case to the Court of Appeals
will first address the procedural infirmities. Petitioners assail the correctness for disposition on the merits. However, so as not to needlessly prolong the
and propriety of the dismissal by the Court of Appeals of their Petition on the resolution of a comparatively simple controversy, we deem it just and equitable
ground that the SPA executed by petitioners does not bear the signatures of to decide the same on the merits.[23]
their three other co-petitioners therein.
While the general rule is that the certificate of non-forum shopping Based on the merits, the petition must, just the same, fail.
must be signed by all the plaintiffs or petitioners in a case and the signature of
only one of them is insufficient, this Court has stressed that the rules on forum The substantive issue being presented by petitioners for resolution is
shopping, which were designed to promote and facilitate the orderly whether they were illegally terminated from work by respondents M.Y. San and
administration of justice, should not be interpreted with such absolute Monde. Corollary to the above issue is whether the closure of business by
literalness as to subvert its own ultimate and legitimate objective.[19] Strict respondent M.Y. San was valid.
compliance with the provision regarding the certificate of non-forum shopping
underscores its mandatory nature in that the certification cannot be altogether

22
We shall first discuss the validity of the closure of business by respondent M.Y. The phrase closure or cessation of operations of establishment or undertaking
San before tackling the alleged illegal dismissal of petitioners by respondent includes a partial or total closure or cessation.
M.Y. San.
x x x Ordinarily, the closing of a warehouse facility and the
Work is a necessity that has economic significance deserving legal termination of the services of employees there assigned is a
protection. The provisions on social justice and protection to labor in the matter that is left to the determination of the employer in the
Constitution[24] dictate so. good faith exercise of its management prerogatives. The
applicable law in such a case is Article 283 of the Labor Code
However, employers are also accorded rights and privileges to assure which permits closure or cessation of operation of an
their self-determination and independence and reasonable return of establishment or undertaking not due to serious business
capital. This mass of privileges comprises the so-called management losses or financial reverses, which, in our reading
prerogatives. Although they may be broad and unlimited in scope, the State has includes both the complete cessation of operations and the
the right to determine whether an employers privilege is exercised in a manner cessation of only part of a companys business.[27]
that complies with the legal requirements and does not offend the protected
rights of labor. One of the rights accorded an employer is the right to close an
establishment or undertaking.[25] Just as no law forces anyone to go into And the phrase closure or cessation not due to serious business losses
business, no law can compel anybody to continue the same.[26] or financial reverses recognizes the right of the employer to close or cease its
business operations or undertaking even in the absence of serious business
The right to close the operations of an establishment or undertaking is losses or financial reverses, as long as he pays his employees their termination
explicitly recognized under the Labor Code as one of the authorized causes in pay in the amount corresponding to their length of service.
terminating employment of workers, the only limitation being that the closure
must not be for the purpose of circumventing the provisions on terminations of It would indeed be stretching the intent and spirit of the law if a court
employment embodied in the Labor Code. Article 283 of the Labor Code reads: were to unjustly interfere in managements prerogative to close or cease its
business operations just because said business operation or undertaking is not
ART. 283. CLOSURE OF ESTABLISHMENT AND suffering from any loss.[28] The determination to cease operations is a
REDUCTION OF PERSONNEL.The employer may also terminate prerogative of management which the State does not usually interfere with, as
the employment of any employee due to the installation of no business or undertaking must be required to continue operating simply
labor saving devices, redundancy, retrenchment to prevent because it has to maintain its workers in employment, and such act would be
losses or the closing or cessation of operation of the tantamount to a taking of property without due process of law. [29] As long as the
establishment or undertaking unless the closing is for the companys exercise of the same is in good faith to advance its interest and not
purpose of circumventing the provisions of this Title, by for the purpose of circumventing the rights of employees under the law or
serving a written notice on the worker and the Ministry of a valid agreement, such exercise will be upheld.[30]
Labor and Employment at least one (1) month before the
intended date thereof. x x x. In case of retrenchment to prevent Clearly then, the right to close an establishment or undertaking may be
losses and in cases of closures or cessation of operations of justified on grounds other than business losses but it cannot be an unbridled
establishment or undertaking not due to serious business prerogative to suit the whims of the employer.[31]
losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) Under Article 283 of the Labor Code, three requirements are necessary
month pay for every year of service, whichever is higher. A for a valid cessation of business operations, namely:
fraction of at least six (6) months shall be considered as one
(1) whole year. (Emphasis supplied.) (1) service of a written notice to the employees and to
the DOLE at least one (1) month before the intended
date thereof;

23
Thus, since private respondent M.Y. Sans closure and cessation of
(2) the cessation must be bona fide in character; and business was lawful, there was no illegal dismissal of petitioners to speak of.

(3) payment to the employees of termination pay We shall now proceed to discuss the validity of the termination of the
amounting to at least one half (1/2) month pay for employment of petitioners by respondent Monde.
every year of service, or one (1) month pay, whichever
is higher. There is no dispute that petitioners were probationary employees as
stated in their individual contracts of employment with respondent Monde.

The records reveal that private respondent M.Y. San complied with the Article 281 of the Labor Code governs probationary employment:
aforecited requirements. M.Y. San employees were adequately informed of the
intended business closure and a written notice to the Regional Director of DOLE Art. 281. PROBATIONARY EMPLOYMENT. Probationary
was filed by respondent M.Y. San, informing the DOLE that M.Y. San will be employment shall not exceed six (6) months from the date the
closed effective 31 January 2001. employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
The ultimate test of the validity of closure or cessation of establishment services of an employee who has been engaged on
or undertaking is that it must be bona fide in character.[32] And the burden of a probationary basis may be terminated for a just cause or
proving such falls upon the employer.[33] when he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to the
Respondent M.Y. San in good faith complied with the requirements for employee at the time of his engagement. An employee who is
closure; sold and conveyed all its assets to respondent Monde for valuable allowed to work after a probationary period shall be
consideration; and there were no previous labor problems. It has been ruled considered a regular employee.
that an employer may adopt policies or changes or adjustments in the
operations to insure profit to itself or protect the investments of its
stockholders, and in the exercise of such management prerogative, the While petitioners were only probationary employees who do not enjoy
employer may merge or consolidate its business with another, or sell or dispose permanent status, nonetheless, they were still entitled to the constitutional
all or substantially all of its assets and properties which may bring about the protection of security of tenure. As may be gleaned in the abovequoted
dismissal or termination of its employees in the process.[34] provision, their employment may only be terminated for a valid and just cause
or for failing to qualify as a regular employee in accordance with the reasonable
Lastly, the petitioners received their termination pay which was even standards made known to him by the employer at the time of engagement and
beyond the amount required by law. The computation of their separation pay after being accorded due process.[37]
was 15 days for every year of service plus an additional nine days for every year
of service, and cash equivalent of their vacation and sick leaves. [35] Petitioners
received their separation pay and accordingly signed their quitclaims. Procedural due process requires that the employee be given two
written notices before he is terminated, consisting of a notice which apprises
The closure, therefore, of the business operation of respondent M.Y. San the employee of the particular acts/omissions for which the dismissal is sought
was not tainted with bad faith or other circumstance that would give rise to and the subsequent notice which informs the employee of the employers
suspicions of malicious intent. Other than their mere allegations, petitioners decision to dismiss him.[38]
failed to present independent evidence that would otherwise show that the
closure of M.Y. San was without factual basis and done in utter bad faith. Mere In the case at bar, petitioners were notified of the standards they have
allegation is not evidence. It is a basic rule in evidence that each party must to meet to qualify as regular employees of respondent Monde when the latter
prove his affirmative allegation.[36] apprised them, at the start of their employment, that:

24
1. You shall be under probation for a maximum period of six sought and a memorandum informing them that they were terminated from
(6) months or until Jul. 03, 2001. During this period, you are work.
expected to learn your job, perform your duties and
responsibilities to the best of your ability, and observe all It must be noted that petitioners were terminated prior to the
company rules and regulations; if during this period, you fail to expiration of their probationary contracts on 3 July 2001. As probationary
meet company standards, your appointment may be employees, they enjoyed only temporary employment status. In general terms,
terminated earlier or at the expiration of your probationary this meant that they were terminable anytime, permanent employment not
period at the discretion of the company. having been attained in the meantime. The employer could well decide if he no
longer needed the probationarys service or his performance fell short of
xxxx expectations, as a probationary employee is one who, for a given period of time,
is under observation and evaluation to determine whether or not he is qualified
5. To determine your fitness to assume your position for permanent employment. During the probationary period, the employer is
on a permanent status, when considered due, your supervisor given the opportunity to observe the skill, competence and attitude of the
shall rate your performance during your probationary employee to determine if he has the qualification to meet the reasonable
period.[39] standards for permanent employment. The length of time is immaterial in
determining the correlative rights of both the employer and the employee in
dealing with each other during said period. Thus, as long as the termination was
Significantly, petitioners Lorene C. Barnuevo, Claudio delos Reyes, made before the expiration of the six-month probationary period, the employer
Eddie Ollorsa, and Joey Cerbito voluntarily resigned from respondent Monde was well within his rights to sever the employer-employee relationship. A
and signed their respective release, waiver and quitclaims. contrary interpretation would defeat the clear meaning of the term
probationary.[40]
Respondent Monde exercised its management prerogative in good faith
when it dismissed petitioners Pilar Espina, Eleanor G. Aquino, Maricris S.J. Terminating employment is one of respondent Mondes prerogatives. As
Bandino, Julio M. Petalio, Jr., Emiliano A. Ebreo, Benjamin Paz, and Leonora Paz, an employer, respondent Monde has the right to regulate, according to its
due to absence without leave (AWOL), gross and habitual neglect of duties, and discretion and best judgment, including work assignment, working methods,
only after the personal delivery of the notices to their respective addresses or processes to be followed, working regulations, transfer of employees, work
by registered mail. With respect to petitioner Mateo Deocareza, he has been supervision, lay-off of workers and the discipline, dismissal and recall of
AWOL since 2 May 2001 and respondent Monde has yet to receive any workers. Management has the prerogative to discipline its employees and to
information on him and/or his whereabouts. There were two notices sent to impose appropriate penalties on erring workers pursuant to company rules and
petitioners individually a notice apprising them of the particular acts or regulations.[41]
omissions for which their dismissal was sought and a memorandum informing
them that they were terminated from work. This Court has upheld a companys management prerogatives so long as
they are exercised in good faith for the advancement of the employers interest
and not for the purpose of defeating or circumventing the rights of the
In the case of petitioners Leandro R. Celis, Paterno Fernandez, Aniceto employees under special laws and valid agreements.[42]
M. Rodriguez, Donato M. Punzalan, Lourdes Alfonso Q., Allan Panlilio, Daisy V.
Arceo, Alejandro Pascual, Ma. Corazon Bajo, Arnold M. Blanco, Cristito Abela, The law imposes many obligations on the employer such as providing
Dioscoro Fajanilag, and Agustin Wong, they failed to qualify as regular just compensation to workers, observance of the procedural requirements of
employees in accordance with the terms and conditions of their probationary notice and hearing in the termination of employment. On the other hand, the
employment with respondent Monde and were duly informed of their failure to law recognizes the right of the employer to expect from its workers not only
qualify as regular employees by letter dated 23 June 2001 terminating their good performance, adequate work and diligence, but also good conduct and
probationary employment effective at the close of the business on 2 July loyalty. The employer may not be compelled to continue to employ such
2001. Again, there were two notices sent to petitioners individually a notice
apprising them of the particular acts or omissions for which their dismissal was
25
persons whose continuance in the service will patently be inimical to his Finally, it is significant to note that both the Labor Arbiter and the NLRC
interest. [43] were unanimous in their findings that the closure of respondent M.Y. San is
valid and that the employees of respondents M.Y. San and Monde were not
illegally dismissed. The issue as to whether there was a valid ground for
Thus, respondent Monde exercised in good faith its management petitioners dismissal is factual in nature.[45] We have always held that factual
prerogative as there is no dispute that petitioners had been habitually absent, findings of the NLRC affirming those of the Labor Arbiter, who are deemed to
neglectful of their work, and rendered unsatisfactory service, to the damage and have acquired expertise in matters within their jurisdiction, when sufficiently
prejudice of the company. supported by evidence on record, are accorded respect if not finality, and are
considered binding on this Court. As long as their Decisions are devoid of any
Anent the validity of quitclaims signed by petitioners. unfairness or arbitrariness in the process of their deduction from the evidence
proffered by the parties before them, all that is left is the Courts stamp of
To be sure, the law looks with disfavor upon quitclaims and releases by finality by affirming the factual findings made by the NLRC and the Labor
employees who are inveigled or pressured into signing them by unscrupulous Arbiter.[46] We find no reason to depart from this Rule.
employers seeking to evade their legal responsibilities. But quitclaims and
releases are not per se invalid. WHEREFORE, this Court GRANTS the instant Petition insofar as
it REVERSES the Resolutions of the Court of Appeals dated 23 September
We have clarified the standards for determining the validity of 2003, 3 March 2004, and 23 June 2004 and DECLARES the signing of the
quitclaim or waiver in the case of Periquet v. National Labor Relations certification of non-forum shopping by 25 of the 28 named petitioners
Commission,[44] to wit: substantial compliance with the Rules. This Court though finds it unnecessary to
remand the case to the Court of Appeals and proceeds to RESOLVE the same
If the agreement was voluntarily entered into and represents a based on the merits. This Court thus AFFIRMS the Decision dated 30 August
reasonable settlement, it is binding on the parties and may not 2002 of the National Labor Relations Commission affirming the Decision dated
later be disowned simply because of a change of mind. It is only 25 April 2002 of the Labor Arbiter finding that the closure of respondent M.Y.
where there is clear proof that the waiver was wangled from San was valid and bona fide and in accordance with statutory requirements, and
an unsuspecting or gullible person, or the terms of settlement that petitioners were not illegally dismissed by either respondent M.Y. San or
are unconscionable on its face, that the law will step in to annul Monde. No costs.
the questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full SO ORDERED.
understanding of what he was doing, and the consideration for
the quitclaim is credible and reasonable, the transaction must G.R. No. 97189 May 11, 1993
be recognized as a valid and binding undertaking. x x x. JISSCOR INDEPENDENT UNION, petitioner,
vs.
HON. RUBEN TORRES and BIENVENIDO E. LAGUESMA, in their capacity as
In the case at bar, there is no showing that petitioners were coerced Secretary and Undersecretary of Labor, respectively; ASSOCIATED LABOR
into signing the quitclaims. In their sworn quitclaims, they freely declared that UNI0N (ALU) and SAMAHANG MANGGAGAWA NG JISSCOR, respondents.
they received to their satisfaction all that are due them by reason of their Romeo B. Igot Law Office for petitioner.
employment and that they were voluntarily releasing respondents M.Y. San and Joji L. Barrios for private respondents.
Monde, for any liability in relation to their employment. Nothing on the face of
their quitclaims would show that they were unconscionable. Further, GRIÑO-AQUINO, J.:
petitioners did not present evidence that they had been forced or intimidated in On June 27, 1990, petitioner JISSCOR Independent Union (JIU) filed a petition
signing the same. for certification election among the rank-and-file employees of the Jacinto Iron
and Steel Sheets Corporation (JISSCOR) before the Med- Arbitration Unit of the
Department of Labor and Employment (DOLE), National Capital Region, Manila.

26
By agreement of the petitioner, JIU, the intervenor SMJ-ALU and the JISSCOR III. Escorting of workers by SMJ-ALU officers and members,
management, the Med-Arbiter issued an Order on August 29, 1990, setting the especially a certain Rene Tan from their place of work to the
certification election on September 4, 1990. election registration;

However, on the appointed date, instead of an election, as previously agreed IV. Forcing the workers to vote for SMJ-ALU by posting of a
upon by all the parties, another pre-election conference was held in the very big streamer with printed words: Vote! Samahang
Department of Labor and Employment. Another agreement was entered into by Manggagawa Ng JISSCOR-ALU at the entrance front door of the
JIU, JISSCOR and SMJ-ALU, providing that the election would be conducted on chapel where the election was held;
September 6, 1990 from 8:00 A.M. to 3:00 P.M., and that "the mandatory five (5)
days posting is hereby waived by agreement of the parties" (p. 172, Rollo). V. Forcing the workers to vote for SMJ-ALU by wearing of
sunvisors and pins with printed words: Vote! SMJ-ALU before
The results of the certification election held on September 6, 1990 were the and during voting inside the polling place (chapel). (pp- 45-
following: 46, Rollo.)

JISSCOR Independent Union 46 On November 21, 1990, Med-Arbiter Tomas F. Falconitin issued an Order
declaring the September 6, 1990 certification election null and void.
Samahang Manggagawa ng JISSCOR-ALU 50
On December 12, 1990, the winner, respondent SMJ-ALU appealed to the DOLE
No Union 0 Secretary and prayed that it be declared the sole and exclusive bargaining agent
of the rank-and-file employees of JISSCOR.
Spoiled 3
On January 18, 1991, a decision was rendered by the Secretary of Labor and
Total Votes Cast 99 (p. 21, Rollo.) Employment granting the appeal of SMJ-ALU and setting aside the Order dated
November 21, 1990 of the Med-Arbiter. A new order was entered certifying
SMJ-ALU as the sole and exclusive bargaining agent of all the rank-and-file
The JIU, which obtained only the second highest number of votes, registered a
workers of JISSCOR pursuant to the results of the certification election
protest in the minutes of the election stating that: "we file protest on the
conducted on September 6, 1990.
following grounds using visor, emblem" (p. 174, Rollo).
In due time, the JIU filed this petition for certiorari alleging that the public
On September 11, 1990, the JIU filed a formal protest before the Department of respondents committed grave abuse of discretion amounting to excess of
Labor, National Capital Region, on the following grounds: jurisdiction in certifying SMJ-ALU as the sole and exclusive bargaining agent of
the rank-and-file employees of JISSCOR.
I. The election was conducted very disorderly and irregular
(sic) as there was no compliance of (sic) mandatory posting of
The petition has no merit.
notice of certification election and necessary list of qualified
voters in accordance to (sic) Section 1 of Rule VI of the
Implementing Rules and Regulations; Section 3, Rule VI, Book V of the Omnibus Rules implementing the Labor Code
provides that the grounds of a protest may be filed on the spot or in writing
with the representation officer and shall be contained in the minutes of the
II. The lack of the required posting had mislead (sic) and/or
proceedings. Protests not so raised are deemed waived.
misinformed the voters/workers of the manner of voting, thus
it resulted to some spoiled votes;
The minutes of the certification election show, however, that JIU only protested
against the use of emblem, visor, pin. Hence, other "protests [such as the posting
27
in the chapel entrance of a huge streamer with the words: "Vote! Samahang G.R. No. L-13778 April 29, 1960
Manggagawa ng JISSCOR-ALU"]not so raised are deemed waived" (Sec. 3, Rule PHILIPPINE EDUCATION CO., INC., petitioner,
VI, Book V of the Omnibus Rules Implementing the Labor Code). vs.
UNION OF PHILIPPINE EDUCATION EMPLOYEES (NLU) and THE COURT OF
There is no merit in the petitioner's contention that the non-posting of the INDUSTRIAL RELATIONS,respondents.
notice of the certification election as prescribed by Section 1, Rule VI, Book V of Marcial Esposo for petitioner.
the Onmibus Rules Implementing the labor Code misled and confused the Eulogio R. Lerum for respondent Union. Jose B. Bolisay for respondent CIR.
workers regarding the mechanics of the election. The petitioner is estopped MONTEMAYOR, J.:
from raising that issue for it signed an agreement with the private respondent The Philippine Education Company, Inc. is appealing the order of the Court of
to waive the mandatory five (5) days posting of election notices. The doctrine of Industrial Relations, dated February 7, 1958, directing it to reinstate its former
estoppel is based on grounds of public policy, fair dealing, good faith and justice, employee, Ernesto Carpio, to his former or equivalent position, without
and its purpose is to forbid one to speak against his own act, representations, or backpay, and from the resolution of the same court in banc, dated March 22,
commitments to the injury of one to whom they were directed and who 1958, denying the company's motion for reconsideration.
reasonably relied thereon (PNB vs. Court of Appeals, 94 SCRA 357).
Ernesto Carpio and other employees of the company, members of the Union of
The results of the certification election belie the petitioner's allegation that the Philippine Education Employees (NLU) joined a strike staged on January 16,
workers were misinformed about the election for the records show that out of 1953. After the labor dispute was settled, the Industrial Court ordered the
104 eligible voters, 99 were able to cast their votes and only 3 were spoiled reinstatement of the strikers, including Carpio. The company, however, opposed
ballots. the reinstatement of Carpio for the reason that a criminal complaint had been
filed against him in the Municipal Court of Manila for theft of magazines
On the alleged use of sunvisors, pins, emblems and the posting of a huge allegedly belonging to the company. He was convicted and sentenced to two
streamer, the Undersecretary found: months and one day of arresto mayor. On appeal to the Court of First Instance,
Carpio was acquitted on the ground of reasonable doubt.
. . . nothing in the records shows that the alleged wearing of
sunvisors and pins, the posting of huge streamers, as well as The question of Carpio's reinstatement was heard by the Industrial Court where
the alleged escorting of voters by SMJ-ALU have unduly the parties submitted as evidence the transcript of the stenographic notes taken
pressured, influenced, vitiated, or in any manner affected the during the hearing in the criminal case before the Court of First Instance of
choice of the workers of their bargaining agent. (p. 49, Rollo.) Manila, the exhibits presented in said case, as well as the decisions of the
Municipal Court convicting him, and that of the Court of First Instance
acquitting him, or rather dismissing the case against him on reasonable doubt.
That finding of fact of the head of an administrative agency is conclusive upon After said hearing, the Industrial Court agreed with the finding of the Court of
the court (Reyes vs. Minister of Labor, 170 SCRA 134). First Instance that the offense had not been proven beyond reasonable doubt
and held that Carpio's acquittal entitled him to reinstatement, though without
WHEREFORE, finding no grave abuse of discretion on the part of the public backpay.
respondents, the Secretary and Undersecretary of Labor and Employment, in
rendering the questioned decision, the petition for certiorari is hereby We have examined the aforementioned evidence, and we are inclined to agree
DISMISSED. The questioned decision of the Undersecretary of Labor, by with the Municipal Court that Carpio's guilt had been duly established. At least,
authority of the Secretary of Labor, is hereby AFFIRMED. the preponderance of evidence was against his innocence. The question for
determination is whether the whether the acquittal of an employee, specially on
SO ORDERED. the ground of reasonable doubt, in a criminal case for theft involving articles
and merchandise belonging to his employer, entitles said employee to
reinstatement.

28
In the case of National Labor Organization of Employees and Laborers vs. Court because of any union affiliation or activity or because the company has been
of Industrial Relations, 95 Phil., 727; Off. Gaz. (9) 4219, we said: guilty of any unfair labor practice. As already stated, Carpio was convicted in the
Municipal Court and although he was acquitted on reasonable doubt in the
. . . the acquittal of a employee in a criminal case is no bar to the Court Court of First Instance, the company had ample reason to distrust him. Under
of Industrial Relations, after proper hearing, finding the same employee the circumstances, we cannot in conscience require the company to reemploy or
guilty of facts inimical to the interests of his employer and justifying reinstate him.
loss of confidence in him by said employer, thereby warranting his
dismissal or the refusal of the Company to reinstate him. The reason for In view of the foregoing, the appealed orders of the Industrial Court of February
this is not difficult to see. The evidence required by law to establish 7, 1958 and March 22, 1958 are hereby reversed. No costs.
guilt and to warrant conviction in a criminal case substantially differs
from the evidence necessary to establish responsibility or liability in a G.R. No. L-15171 April 29, 1961
civil or non-criminal case. The difference is in the amount and weight of LEPANTO CONSOLIDATED MINING COMPANY and CHARLES B.
evidence and also in degree. In a criminal case, the evidence or proof FOSTER, petitioners,
must be beyond reasonable doubt while in a civil or non criminal case it vs.
is merely preponderance of evidence. In further support of this THE COURT OF APPEALS, and LEONARDO ARCA, respondents.
principle we may refer to Art. 29 of the New Civil Code (Rep. Act 386) Ponce Enrile, S. Reyna, Montecillo and Belo for petitioners.
which provides that when the accused in a criminal case is acquitted on Leonardo Rilloraza for respondents.
the ground of reasonable doubt a civil action for damages for the same LABRADOR, J.:
act or omission may be instituted where only a preponderance of
evidence is necessary to establish liability. From all this it is clear that Leonardo Arca instituted this action on October 22, 1954, alleging that on July
the Court of Industrial Relations was justified in denying the petition of 22, 1953, he was employed by the defendants as clerk-typist at P6.25 a day; that
Rivas and Tolentino for reinstatement in the cement company, because on August 22, 1954, the defendants terminated his (plaintiff's) services, on the
of their illegal possession of hand grenades intended by them for alleged ground that they were no longer needed; that his employment was
purposes of sabotage in connection with the strike on March 16, 1952. made under an existing agreement between the employees and the defendants
company on March 27, 1953 under which it was to continue until the work
Then in the case of National Labor Union vs. Standard Vacuum Oil Company, 73 assigned to him was to be finished; that the termination of his employment
Phil., 279, the City Fiscal refused to prosecute two employees charged with theft constituted a breach of the agreement entered into upon his employment; that
for lack of evidence and yet this Tribunal upheld their dismissal from the defendants must have been irked by act of plaintiff in organizing a labor union;
employer company on the ground that their employer had ample reason to that he suffered actual damages consisting of loss of wages, attorney's fees and
distrust them. costs; and that because of the acute employment problem, he has suffered
mental anguish and serious anxiety. He prays for actual, and moral damages and
The relation of employer and employee, specially where the employee has costs.
access to the employer's property in the form of articles and merchandise for After a denial of a motion to dismiss, defendants presented their respective
sale, necessarily involves trust and confidence. If said merchandise are lost and answers. Defendant Charles B. Foster denied the claim of the plaintiff that his
said loss is reasonably attributed to said employee, and he is charged with theft, work was to continue until the completion of the work or project assigned to
even if he is acquitted of the form of articles and merchandise for sale, him, and alleged that under the agreement between the Lepanto Consolidated
necessarily involves trust and confidence. If said merchandise are lost and said Mining Company and its employees dated March 27, 1953, he as the general
loss is reasonably attributed to said employee, and he is charged with theft, superintendent has the power to determine when a particular work in the mine
even if he is acquitted of the charge on reasonable doubt, when the employer is deemed completed or what work should be curtailed, as well as the power
has lost its confidence in him, it would be highly unfair to require said employer and authority to lay-off and discharge an employee when his services are no
to continue employing him or to reinstate him, for in that case the former might longer necessary or when such lay-off or discharge was required in the conduct
find it necessary for its protection to employ another person to watch and keep and furtherance of the company's business; that the defendant was discharged
an eye on him. In the present case, Carpio was refused reinstatement not because his services were no longer needed; that plaintiff accepted the
29
separation slip without any protest; and that the defendants have the exclusive led to real unrest in the Company, had Plaintiff remained in its employ.
right to lay-off employees whose services are no longer required in the As it is Plaintiff could have been discharged summarily without any 30-
furtherance of the business. Practically to the same effect is the defendant day notice or 30-day pay. The Company in giving Plaintiff 30 days pay
Lepanto Consolidated Mining Company's answer. was generous. There is one more aspect of this case. As Plaintiff
admitted organizing a rival labor union as early as August, 1954, and
Issues having been joined, trial was held on January 7, 1956 and Judge Jesus de this union already had legal personality even before registration,
Veyra rendered a judgment finding that plaintiff's separation was justified and Plaintiff can be deemed to have forfeited his membership in the
so dismissing the complaint. Pertinent portion of the decision of the trial judge Lepanto Civic Welfare Union. If this is so, he would not have been
reads as follows: entitled to invoke the protection of the labor contract of this union, and
Plaintiff's standing would be that of any ordinary employee who may
. . . Obviously there is no such 'completion or curtailment' involved be discharged by giving him one month notice or one month pay
here. Defendant Company presented evidence, without objection on the (Republic Act 1052). (pp. 52-55, ROA)
part of plaintiff, to the effect that Plaintiff had been caught snooping
among the papers of Mr. Foster, General Superintendent of the The lower court therefore dismissed the complaint. Appeal having been made to
Company; that he was guilty of dishonesty in that despite the fact that the Court of Appeals, this Court reversed the judgment, ordering the
in the labor management meeting the question of the alleged high reinstatement of the plaintiff, the payment of his back wages from October 1,
prices of the Lepanto Store were under discussion, he still wrote a 1954 at P6.25 a day until reinstated and the payment of costs. The Court of
letter to the President of the Philippines; that he instigated unfounded Appeals reversed the finding of the lower court that the different acts
charges in connection with the Lepanto High School; that he organized committed by the appellant were acts of dishonesty. It held that the act of
his own rival union while working for the company. This rival labor appellant in writing the President of the Philippines requesting for a
union was organized in August, 1954 although only formally further commercial or price control agent to investigate the prices in the store of
proved that the ostensible reason for Plaintiff's separation which was defendants is not an act of dishonesty, as it is an exercise of the constitutional
"services no longer needed" was placed there for Plaintiff's protection right of the citizen to petition the Government for redress of his and his co-
and that at his urging so that he would be able to find work elsewhere employees' grievances; that the act of the plaintiff in preparing a complaint
— although the real reason for Plaintiff's discharge was loss of against the principal of the Lepanto High School was also in accord with a civic
confidence and dishonesty. duty to help the students; that his act of snooping among the papers of the
defendant Foster is only a conclusion, not justified by the premises, for he is
Plaintiff relies for his cause of action on Art. VIII (a) of the labor supposed to be entrusted with the duty of reorganizing the confidential files and
contract Exhibit "A" and admittedly his discharge can not be laid to any one cannot reorganize the confidential files of an office without reshuffling or
supposed "completion of any particular project or curtailment of any reading of the same; that the organization of a rival labor union is neither a
phase of the operation." If this Court were to rely on the separation slip dishonest act prejudicial to defendants unless it is admitted that the Lepanto
(Exhibit "B") alone, then clearly Plaintiff should be reinstated. But Civic Welfare Union to which he belongs is company controlled, and the
Defendant Company was able to introduce evidence, without objection curtailment of his right to organize would constitute an unfair labor practice on
on the part of counsel for the Plaintiff, to the effect that Plaintiff had the part of the employer.
been guilty of dishonesty as well as there was loss of confidence in him.
This Court finds that the discharge of Plaintiff was justified under Art. It is to be noted that in the course of the trial no objection was raised against
VIII, sec. (b), subsec (2), as plaintiff was guilty of dishonesty not only in evidence tending to prove that plaintiff had been caught in the act of shuffling
embarrasing the labor-management conference on the alleged high papers in the desk of Mr. Foster, papers which had no connection with his work,
prices in the Lepanto Store by going over the heads to the President of as a result of which defendant Foster had lost confidence in plaintiff. It was also
the Philippines; not only by instigating trouble at the Lepanto High proved without objection that defendant Foster had intended to assign plaintiff
School; not only by snooping among the papers of Mr. Foster; but to organize or reorganize the confidential files of the company, but in the
principally for organizing a rival labor union while he was still meanwhile had assigned him to work as assistant of his secretary; that the
secretary of the Lepanto Civic Welfare Union — this last act would have secretary had reported that plaintiff's work was not very satisfactory because
30
plaintiff was inattentive; that desiring to terminate his services, defendant WHEREFORE, the decision of the Court of Appeals appealed from is hereby set
Foster gave him his separation slip because he had lost confidence in him; that aside, but the case is hereby remanded to the Court of First Instance for further
no mention was made about the dishonest acts committed by him in order that trial as above indicated. Without costs. So ordered.
he be given opportunity to find other employment.
ARIEL A. TRES REYES, petitioner, vs. MAXIMS TEA HOUSE and JOCELYN
The Court of Appeals reasoned that since plaintiff was assigned to confidential POON, respondents.
work the shuffling of the papers of defendant Foster was within said work. The
above conclusion is not justified first, because Foster testified that plaintiff had DECISION
actually not been working as yet on the confidential files and hence plaintiff was QUISUMBING, J.:
not yet authorized to work on the confidential papers; and second because the
private papers of Foster are not the confidential files of the company.
This is a petition for review of the decision[1] of the Court of Appeals, dated
November 22, 1999 in CA-G.R. SP No. 54110, setting aside the decision[2] of the
The acts committed by the respondent in sending petition to authorities Third Division, National Labor Relations Commission (NLRC) dated March 11,
regarding the activities of his employer, while in themselves, legitimate acts of 1999, in NLRC CA No. 017339-98. In NLRC NCR Case No. 00-12-08773-97, the
an individual protected by law, by such acts plaintiff has shown conduct which NLRC vacated the Labor Arbiters decision and ordered herein respondent
would render him unsuitable for the work for which the employer intended him Maxims Tea House to reinstate petitioner Ariel Tres Reyes to his former
— that is, confidential work. Certainly this is what Foster must have meant position or, should reinstatement no longer prove feasible, to pay Tres Reyes his
when he declared in court that he had lost confidence in plaintiff. separation pay and backwages.

If, as already indicated above, the understanding in respondent's employment The facts of this case, as found by the NLRC and affirmed by the Court of
was for him to be assigned to the arrangement of the confidential files of the Appeals, are as follows:
defendant company, and the defendants had lost confidence in the respondent. Respondent Maxims Tea House (hereinafter Maxims for brevity) had
Would it be proper to order the reinstatement of the latter? employed Ariel Tres Reyes as a driver since October 1995. He was assigned to
its M.H. del Pilar Street, Ermita, Manila branch. His working hours were from
The consensus of opinion among the members of the Court is that it would be 5:00 P.M. to 3:00 A.M., and among his duties was to fetch and bring to their
unfair and unjust to the employer to require it to continue employing the respective homes the employees of Maxims after the restaurant closed for the
services of the person in whom the manager has lost confidence. But if loss of day.
confidence may not justify reinstatement, neither should the employer be
relieved from damages that his refusal to continue the employment may cause In the wee hours of the morning of September 27, 1997, petitioner was
to the employee. The employer has committed a breach of the contract of driving a Mitsubishi L300 van and was sent to fetch some employees of
employment; if it made a mistake in choosing the right person it may be Savannah Moon, a ballroom dancing establishment in Libis, Quezon City.
relieved from continuing the employment, but it should not and would not be Petitioner complied and took his usual route along Julia Vargas Street in Pasig
relieved from liability for the damages arising from the breach of the contract of City. He was headed towards Meralco Avenue at a cruising speed of 50 to 60
employment. kilometers per hour, when he noticed a ten-wheeler truck coming his way at full
speed despite the fact that the latters lane had a red signal light on. Petitioner
maneuvered to avoid a collision, but nonetheless the van he was driving struck
The Court believes that the respondent-employee should be granted an award
the truck. As a result, petitioner and seven of his passengers sustained physical
of such damages as he may have suffered by reason of the breach of the contract
injuries and both vehicles were damaged.
of employment, but his reinstatement should not be ordered, as it is not
appropriate to the peculiar circumstances of the case. The case should be On October 15, 1997, the management of Maxims required petitioner to
remanded to the Court of First Instance for the determination of the amount of submit, within forty-eight hours, a written explanation as to what happened
damages which may be awarded to the respondent-employee. that early morning of September 27, 1997. He complied but his employer found

31
his explanation unsatisfactory and as a result he was preventively suspended In the event that reinstatement is no longer feasible, respondents are hereby
for thirty (30) days, effective October 20, 1997. ordered to pay complainant separation pay in the amount of one month for
every year of service computed from October 7, 1995 to the date of this
On November 19, 1997, Maxims terminated petitioner for cause. Decision, in addition to payment of backwages computed from date of
Feeling that the vehicular accident was neither a just nor a valid cause for termination on November 19, 1997 up to date of this decision.
the severance of his employment, petitioner filed a complaint[3] for illegal
dismissal docketed as NLRC NCR Case No. 00-12-08773-97. All other reliefs herein sought and prayed for are hereby DENIED for lack of
merit.
On July 20, 1998, the Labor Arbiter decided NLRC NCR Case No. 00-12-
08773-97 as follows:
SO ORDERED.[5]
WHEREFORE, as we sustain the validity of the dismissal of complainant Ariel A.
Tres Reyes, we order respondent Maxim (sic) Tea House to pay him the Respondents moved for reconsideration of the foregoing decision, but said
following amount(s): motion was denied by the Commission in its resolution[6] dated May 12, 1999.
Respondents then filed a special civil action for certiorari with the Court of
Financial assistance (210 x 26 days) P5,460.00
Appeals, docketed as CA-G.R. SP No. 54110. It was alleged that the NLRC
committed a grave abuse of discretion amounting to want or excess of
13th month pay for 1997 (P210 x 28 days) jurisdiction in: (a) giving due course to petitioners Motion for Partial
Reconsideration notwithstanding that it was a prohibited pleading under Sec.
x 11.6 months over 12) P5,278.00 17 (now Sec. 19),[7]Rule V of the NLRC Rules of Procedure and despite want of
showing that it was seasonably filed; and (b) for substituting its own findings to
Service incentive leave pay (P210 x 5 days) 1,050.00 the factual findings of the Labor Arbiter.
On November 22, 1999, the appellate court decided CA-G.R. SP No. 54110
TOTAL AWARD P11,788.00 in favor of the employer and its manager, thus:

SO ORDERED.[4] WHEREFORE, premises considered, the petition is given due course and the
assailed decision of public respondent is hereby set aside and the complaint of
In his decision, the Labor Arbiter found that petitioner was grossly private respondent DISMISSED for utter lack of merit.
negligent in failing to avoid the collision.
SO ORDERED.[8]
On October 8, 1998, instead of filing the requisite pleading for appeal,
petitioner filed a Motion for Partial Reconsideration with the NLRC. The NLRC Hence, the instant case.
opted to treat petitioners motion as an appeal docketed as NLRC CA No.
017339-98. Before us, petitioner alleges that the Court of Appeals erred:
On March 11, 1999, the NLRC reversed the decision of the Labor Arbiter on I
the ground that there was no negligence on petitioners part. The decision
concluded, thus: ...IN HOLDING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
TREATING AS APPEAL THE PARTIAL MOTION FOR RECONSIDERATION OF MR.
WHEREFORE, foregoing premises considered, the appeal is hereby GRANTED. TRES REYES, BECAUSE THE COURT OF APPEALS TURNED A BLIND EYE ON
The assailed Decision dated July 20, 1998 is hereby ordered VACATED and SET THE FACTS ON RECORD (A) THAT MR. TRES REYES FILED SAID MOTION ON
ASIDE and new one is hereby entered ordering respondent MAXIMS TEA OCTOBER 8, 1998 (THE 10TH DAY FROM HIS RECEIPT OF A COPY OF ARBITER
HOUSE to reinstate herein complainant Ariel T. Tres Reyes to his former DINOPOLS DECISION), (B) THAT HE PROPERLY VERIFIED SAID MOTION; AND
position without loss of seniority rights plus full backwages. (C) PAID THE APPEAL FEE, BOTH ON THE SAME DATE.
32
II petitioners failure to pay the necessary filing fees. They submit that the
appellate court committed no reversible error when it ruled that petitioners
...IN CONCLUDING THAT THE FREAK TRAFFIC ACCIDENT ON SEPTEMBER 27, Motion for Partial Reconsideration failed to comply with the requisites of a valid
1997 WAS DUE TO NEGLIGENCE OF MR. TRES REYES AS FOUND BY THE appeal, hence fatally defective, e.g. for want of verification and absence of proof
LABOR ARBITER WHO HAD THE CHANCE TO OBSERVE THE DEMEANOR OF that it was filed within the reglementary period.
LITIGANTS AND WITNESSES, DESPITE THE FACT (A) THAT NO TRIAL WAS
HAD IN THE ARBITERS LEVEL TO PROVIDE SUCH A PRETENDED The first issue involves a question of substance versus form. Strictly
OPPORTUNITY; (B) THAT THE NLRCS FACTUAL FINDING BEING IN ACCORD speaking, a motion for reconsideration of a decision, order, or award of a Labor
WITH REALITY AND SUPPORTED BY PREPONDERANCE OF EVIDENCE, IS Arbiter is prohibited by Section 19, Rule V of the NLRC Rules of Procedure. But
CONCLUSIVE UPON THE CA, AND (C) THAT THE COURT OF APPEALS said rule likewise allows that a motion for reconsideration shall be treated as an
REVERSAL OF THE NLRC RULING IS SADDLED WITH SURMISES, appeal provided it meets all the requisites of an appeal. Petitioner insists that
CONJECTURES, AND SUPPOSITIONS, WITHOUT CATEGORICAL SUPPORT OF his pleading was in form a motion for reconsideration, but in substance it was
ANY GROSS OR HABITUAL NEGLECT TO TERMINATE EMPLOYMENT. [9] an appeal which complied with all the technical requirements. Respondents
counter that the formal requisites take precedence.
Petitioners assigned errors may be reduced to two issues for our We have minutely scrutinized the records of this case, particularly the
resolution, namely:
questioned Motion for Partial Reconsideration, but we find no basis for the
(1) Could the Motion for Partial Reconsideration be considered as an appellate courts finding that said pleading did not contain a statement as to
appeal to the NLRC? when petitioner received a copy of the decision in NLRC NCR Case No. 00-12-
08773-97. The lead paragraph of said motion reads:
(2) Is petitioners dismissal from employment valid and legal?
Complainant ARIEL A. TRES REYES, thru counsel, most respectfully moves to
On the first issue, petitioner argues that the Court of Appeals grievously reconsider the Decision dated July 20, 1998 rendered by the Honorable Labor
erred in holding that the NLRC has gravely abused its discretion in treating his Arbiter Ernesto S. Dinopol in the above-captioned case (copy of which was
Motion for Partial Reconsideration as an appeal. Petitioner asserts that when a received by the Complainant on September 28, 1998), and alleges as follows:[11]
motion for reconsideration of a decision of a Labor Arbiter is filed, the
Commission will properly treat it as an appeal. He stresses that under labor law, Note that all that Section 3, Rule VI of the NLRC Rules of Procedure
rules of procedure should be liberally construed to assist the parties in requires with respect to material dates is a statement of the date when the
obtaining a just, expeditious, and inexpensive settlement of disputes. Hence, appellant received the appealed decision. We rule that petitioners declaration in
technicalities should not prevail over substantial merits of the labor case. his motion that he received a copy of the Labor Arbiters decision on September
In the instant case, we note that the Office of the Solicitor General (OSG), 28, 1998 is more than sufficient compliance with said requirement imposed by
whom we required to comment on the petition, filed instead a Manifestation Section 3, Rule VI. We likewise find that the motion in question was filed with
and Motion In Lieu of Comment agreeing with petitioner. The OSG submits that the NLRC on October 8, 1998 or on the tenth (10th) day from the date of receipt
the Motion for Partial Reconsideration was correctly treated by the NLRC as an by petitioner of his copy of the Labor Arbiters decision. Otherwise put, said
appeal, on the principle that technical rules and procedure should be liberally pleading was filed within the reglementary ten-day period, as provided for in
applied in labor cases. Section 1,[12] Rule VI of the NLRC Rules of Procedure. The law [13] on the
timeliness of an appeal from the decision, award, or order of the Labor Arbiters,
Respondents counter that granting without admitting, that the NLRC did states clearly that the aggrieved party has ten (10) calendar days from receipt
indeed correctly treat petitioners Motion for Partial Reconsideration as an thereof to appeal to the Commission.[14]Needless to say, an appeal filed at the
appeal, nonetheless, it still behooves petitioner to comply with the other last minute of the last day of said period is, for all intents and purposes, still
requisites for perfection of an appeal. Respondents point out that said motion seasonably filed.
contained no statement when petitioner received a copy of the Labor Arbiters
decision to determine the timeliness of the motion cum appeal, as required by In CA-G.R. SP No. 54110, the Court of Appeals accepted respondents
Section 3,[10] Rule VI of the NLRC Rules of Procedure. Respondents also point to averment that petitioners Motion for Partial Reconsideration was not verified.
The records, however, contradict their averments. We find that petitioner
33
verified his motion to reconsider the Labor Arbiters decision on October 8, The OSG joins petitioner in his stance, pointing out that the police report
1998, or on the same day that it was filed. [15] We must, perforce, rule that relied upon by the parties before the Labor Arbiter clearly showed that the ten-
petitioner has substantially complied with the verification requirement as wheeler truck lost its brakes, intruded into the lane of the vehicle driven by
provided for in Section 3, Rule VI of the Commissions Rules of Procedure. petitioner, and collided with petitioners van. These factual findings could not be
rebutted by the Labor Arbiter by observing the demeanor of the parties at the
Anent respondents claim that petitioner failed to pay the requisite appeal hearings, more so since the Labor Arbiter did not conduct any trial-type
fee in NLRC CA No. 0 17339-98, the NLRC stated in its decision that: hearing. Thus, concluded the OSG, the Court of Appeals erred when it relied
A review of the record shows that October 8, 1998, complainant-appellant paid upon such ground in sustaining the Labor Arbiters finding that petitioner was
the amount of P110.00 in cash as appeal fee. For this he was issued, O.R. grossly negligent.
#0073761.[16] Respondents counter that the factual findings of the Labor Arbiter showing
gross negligence on petitioners part were correctly upheld by the Court of
This finding refutes respondents claim. The records clearly show the basis Appeals as these were based on the Labor Arbiters independent evaluation of
for the finding of the Commission that the appeal fees were paid. [17] Thus, on the evidence before him. Thus, they add, said findings are final and conclusive.
this point respondents averment, without any supporting evidence and
contradicted by the records, deserves scant consideration. The issue of whether a party is negligent is a question of fact.[21] As a rule,
the Supreme Court is not a trier of facts and this applies with greater force in
How the Court of Appeals could have been misled by respondents labor cases.[22] Hence, factual findings of quasi-judicial bodies like the NLRC,
allegations of technical deficiencies with respect to the questioned Motion for particularly when they coincide with those of the Labor Arbiter and if supported
Partial Reconsideration in NLRC CA No. 0 17339-98, is surprising. Had the court by substantial evidence, are accorded respect and even finality by this
a quo, to use its own words, carefully perused the case records, it would have Court.[23]But where the findings of the NLRC and the Labor Arbiter are
readily seen that said pleading had complied with the technical requirements of contradictory, as in this case, the reviewing court may delve into the records
an appeal. Hence, we are constrained to conclude that the appellate court had and examine for itself the questioned findings.[24]
no basis for concluding that the NLRC had gravely abused its discretion when
the NLRC gave due course to the motion and treated it as an appeal. Our perusal of the records shows that the proceedings before the Labor
Arbiter primarily involved the submission of position papers by the
In labor cases, rules of procedure should not be applied in a very rigid and parties.[25] No trial-type hearing was conducted at all by the Labor Arbiter. Thus,
technical sense.[18]They are merely tools designed to facilitate the attainment of the finding of the Court of Appeals that the latter was in a better position to
justice, and where their strict application would result in the frustration rather evaluate the evidence as he had the better opportunity to observe the demeanor
than promotion of substantial justice, technicalities must be avoided. of the parties at the hearing has no leg to stand on. Moreover, based on the
Technicalities should not be permitted to stand in the way of equitably and police traffic accident investigation report, we are convinced that the accident
completely resolving the rights and obligations of the parties.[19] Where the ends was the fault of the ten-wheeler trucks driver. On seeing the signal light change
of substantial justice shall be better served, the application of technical rules of to red, this driver stepped on his brake, not just once but three times, but his
procedure may be relaxed.[20] truck could not stop. Since the truck was on the wrong lane, petitioners van,
On the second issue, petitioner contends that the Court of Appeals erred in which was in its proper lane with the green light, smashed into the out-of-
control truck.[26] This episode led to petitioners dismissal which, in our view, is
holding that the factual findings made by the Labor Arbiter regarding
negligence should be sustained because at the trial, the Labor Arbiter had the unjustified.
opportunity to observe the demeanor of the litigants. Petitioner points out that Under the Labor Code,[27] gross negligence is a valid ground for an
no such trial or hearing was made. In NLRC NCR Case No. 00-12-08773-97, the employer to terminate an employee. Gross negligence is negligence
Labor Arbiter decided the case based on the position papers submitted by the characterized by want of even slight care, acting or omitting to act in a situation
parties. Moreover, says the petitioner, the Court of Appeals ignored substantial where there is a duty to act, not inadvertently but willfully and intentionally
evidence, showing that there was no gross negligence on his part because the with a conscious indifference to consequences insofar as other persons may be
vehicular accident was entirely due to the fault of the truck driver who was affected.[28] In this case, however, there is no substantial basis to support a
speeding on the wrong lane. finding that petitioner committed gross negligence.
34
In sustaining the Labor Arbiters finding that petitioner was grossly finding petitioner and its principal, TariqHajj Architects, guilty of having
negligent, the appellate court stressed that the cited episode was the second illegally dismissed private respondent and, for this reason, ordering them to pay
vehicular accident involving petitioner, and as such it may clearly reflect against his salaries corresponding to the unexpired portion of his employment contract,
[his] attitudinal character as a driver. [29] We note, however, that the salary differentials and reimbursement of the amount withheld for telephone
Commission found that in the first vehicular accident involving petitioner he bills. The decision reverses the contrary decision of the Philippine Overseas
was the victim of the reckless and negligent act of a fellow driver. [30] We agree Employment Administration, dismissing the complaint filed by private
with the NLRC that an imputation of habitual negligence cannot be drawn respondent.
against petitioner, since the earlier accident was not of his own making.
The facts are as follow:
The CA decision further faulted petitioner despite his explanation that he
had the right in traversing the point of collision because the traffic lights along Private respondent Arturo C. Arrojado was hired by petitioner JGB and
his right of way was green. According to the CA, a good driver of a motor vehicle Associates, Inc. for its principal, Tariq Hajj Architects, to work as draftsman in
has to know defensive attitude even on a clear way.[31]However, such Saudi Arabia. The contract of employment was for two years, commencing May
observation does not support the conclusion that petitioner was negligent. The 27, 1989. The salary was US$500.00 a month, although private respondents
test to determine the existence of negligence is as follows: Did petitioner in Travel Exit Pass (TEP) showed that his monthly salary was US$525.00.
doing the alleged negligent act use that reasonable care and caution which an On February 25, 1990, before the expiration of his contract of employment,
ordinarily prudent person would use in the same situation?[32] It is not disputed private respondent was given notice by his employer that his employment was
that petitioner tried to turn left to avoid a collision. To put it otherwise, terminated for the reason that his performance both in productivity and
petitioner did not insist on his right of way, notwithstanding the green light in efficiency was below average. The termination of his employment took effect on
his lane. Still, the collision took place as the ten-wheeler careened on the wrong the same day. He was immediately scheduled to depart Saudi Arabia and on
lane. Clearly, petitioner exerted reasonable effort under the circumstances to February 28, 1990, three days after his dismissal, he found himself already in
avoid injury not only to himself but also to his passengers and the van he was the Philippines.
driving. To hold that petitioner was grossly negligent under the circumstances
goes against the factual circumstances shown. It appears to us he was more a On March 12, 1990, private respondent filed with the POEA a complaint
victim of a vehicular accident rather than its cause. against JGB and Associates, Inc., Tariq Hajj Architects and Country Bankers
Insurance Corporation, alleging illegal dismissal and seeking payment of
There being no clear showing that petitioner was culpable for gross salaries corresponding to the unexpired portion of his employment contract,
negligence, petitioners dismissal is illegal. It was error for the Court of Appeals salary differential, refund of S.R. 1,000 which was withheld from him for
to reverse and set aside the decision of the Third Division of the NLRC. telephone bills, moral damages and attorneys fees.
WHEREFORE, the petition is GRANTED. The assailed decision of the Court Private respondent alleged that he did his job conscientiously and that he
of Appeals dated November 22, 1999 in CA-G.R. SP No. 54110 is SET ASIDE. The was even asked to make scale models, in addition to his regular duties. He
decision of the National Labor Relations Commission dated March 11, 1999 in claimed that he was never reprimanded nor informed of his alleged negligence
NLRC CA No. 017339-98 is REINSTATED in full. No pronouncement as to costs. and incompetence either by his immediate supervisor or by his employer. He
SO ORDERED. also complained that he was denied due process because his dismissal took
effect on the same day he was given notice and claimed that, because he was
JGB and ASSOCIATES, INC., petitioner, vs. NATIONAL LABOR RELATIONS immediately repatriated, he had no opportunity to challenge his arbitrary
COMMISSION and ARTURO C. ARROJADO, respondents. dismissal. Private respondent admitted that he signed a waiver of claims but
alleged that he did so under compulsion and that, in any event, he was not
DECISION precluded from questioning the legality of his dismissal and from recovering
MENDOZA, J.: monetary claims due him.
On the other hand, petitioner averred that private respondent was
This is a petition for certiorari to annul the decision and the resolution of dismissed for neglect of duties and performance below par. Petitioner also
the National Labor Relations Commission in NLRC NCR CA No. 002149-91, alleged that although no prior notice of dismissal was given to private
35
respondent, he was given in lieu thereof a notice pay equivalent to one month Petitioner filed a motion for reconsideration but the same was dismissed
salary. Petitioner denied liability for salary differential on the ground that the by the NLRC in a resolution dated January 27, 1993, for lack of merit. Hence this
employment contract stipulated that his monthly salary was petition. Petitioner alleges that the NLRC committed grave abuse of discretion.
US$500.00. Petitioner invoked a quitclaim signed by private respondent as
evidence that he had been paid all the monetary claims due him. The issue in this case is whether the NLRC gravely abused its discretion in
reversing the decision of the POEA and ruling that private respondent was
The POEA dismissed private respondents complaint for illegal dismissal illegally dismissed.
but ordered as follows:
We find that petitioner failed to prove that the NLRC committed grave
WHEREFORE, premises considered, judgment is hereby rendered ordering abuse of discretion in holding that private respondent was illegally
respondents to pay complainant jointly and severally the peso equivalent at the dismissed. In termination cases, the burden of proving just cause for dismissal is
time of actual payment the amount of SR1,000 representing the refund of the on the employer. In this case, the grounds for the dismissal of private
telephone bills deducted from the latter. respondent were stated in two documents presented by petitioner before the
POEA: (1) the notice of termination given to private respondent on February 20,
Ten percent (10%) of the total refund as and for attorneys fees to be paid by 1990; and (2) the letter of the principal, Tariq Hajj on August 1, 1990. In the
complainant. termination letter, the foreign employer stated that private respondents
performance was below average. In its August 1, 1990 letter, the foreign
All other claims are dismissed for lack of merit. employer stated that:
ever since the early days of Mr. Arrojado with us (,) we were not fully satisfied
SO ORDERED. with his performance and our expectations from him were much higher than we
saw him actually producing. Nevertheless (,) to be very fare [sic] with
Private respondent timely appealed to the NLRC, which found private Mr. Arrojado(,) we gave him a lot of time to develop and to get acquainted with
respondents dismissal illegal and ordered petitioner as follows: our work, system, environment and standards. However and for more than
eight (8) months he spent with us(,) we have not witnessed any development in
WHEREFORE, premises considered, the assailed decision is hereby set-aside skills or abilities. Moreover, we noticed a very evident neglect by Mr. Arrojadoof
and a new one is entered declaring complainants dismissal from employment the duties assigned to him. This combined with a very thorough evaluation of his
illegal. performance which resulted from his continuous and repeated neglect
throughout the period he spent with us, our decision was very natural. We felt
Hence, respondents are hereby ordered to pay complainant jointly and that Mr. Arrojado was causing our firm tangible financial lose [sic] and
severally the peso equivalent at the time of payment of the following amount: considerable technical difficulties due to his incompetent performance.[1] (Italics
added)
1. US Dollars Seven Thousand Eight Hundred Seventy Five (US$7,875.00 or its
peso equivalent, representing the unexpired portion of the contract. The contract of employment between the parties provided in pertinent
part:
2. US Dollars Two Hundred Twenty Five (US$225.00) representing salary
D. Termination by Employer. An Employer may terminate the contract of
differential for nine (9) months
employment for any of the following causes:

3. Saudi Riyals One Thousand (S.R. 1,000.00) representing refund for telephone
xxx xxx xxx
bill.
(c) Gross and habitual neglect by the employee of his duties
SO ORDERED.
(d) Fraud or willful neglect by the employee of his duties

36
Gross negligence connotes want of care in the performance of ones respondents to substantiate the general charges hurled against complainant, the
duties.[2] Habitual neglect implies repeated failure to perform ones duties for a documents, which comprise respondents evidence in chief, contain empty and
period of time, depending upon the circumstances. On the other hand, fraud and self-serving statements insufficient to establish just and valid cause for the
willful neglect of duties imply bad faith on the part of the employee in failing to dismissal of complainant (Royal Crown International v. NLRC, 178 SCRA
perform his job to the detriment of the employer and the latters business. 569). For to allow an employer to terminate the employment of his worker
merely based on pure allegations and generalities will place the latter on a
None of these causes is stated in the two letters of the employer as reasons dangerous situation as he will be at the sole mercy of the former and therefore,
for dismissing private respondent. None of the reasons there stated even the right to security of tenure which were bound to protect will be unduly
approximates any of the causes provided in the contract of employment for the emasculated.[3]
termination of employment by the employer.
Indeed, the grounds given for private respondents dismissal are nothing Nor is the quitclaim signed by private respondent a bar to the filing of the
but general, vague and amorphous allegations. As the NLRC noted, the letters do complaint. We have already held in a number of cases[4] that a deed of release or
not state particular acts which show that private respondent was indeed quitclaim can not bar an employee from demanding what is legally due him. The
negligent and that his performance was below par. Nor did petitioner show the reason for this is that the employee does not really stand on an equal footing
tangible financial loss which it claimed it suffered as a result of private with his employer. In some cases he may be so penurious that he is willing to
respondents alleged neglect of duty. bargain even rights secured to him by law. There is good reason for applying
this ruling here because private respondent was made to sign the deed of
It is noteworthy that when private respondent was given notice of the quitclaim in this case on the same day he was dismissed. He was in a foreign
termination of his employment, he had already served his employer for nearly country and he had no one to help him. In three days he was due for
ten months. The letter of termination, expressed disappointment that despite repatriation to the Philippines. He had no means of questioning his employers
the length of time he had been with the company he had not shown any acts. He had no choice but to accept what was being offered to him. Necessitous
development in skills or abilities. It may be assumed, however, that before men are not free men.
private respondent was employed, he was tested for his skill and his
ability. Why petitioner suffered him so long in its employ if he did not come up Furthermore, as the NLRC noted, the fact that private respondent had to be
to its expectations has not been explained. On the other hand, what is clear from granted by the POEA salary differential for nine months and ordered
the record is that petitioner made private respondent work on scale models, in reimbursed in the amount of 1,000 Saudi Riyal belies the claim that private
addition to the latters regular work. If private respondents performance was respondent had been paid everything legally due to him.
below average, it is difficult to understand why he should be given additional
task to perform. Employees enjoy security of tenure; they can only be dismissed for just
cause and only after due process.[5] If an employee is dismissed without just
Indeed, the burden of proving just cause for terminating an employee- cause, he is entitled to reinstatement with backwages up to the time of his
employer relationship is on the employer. The employee has no duty to prove actual reinstatement,[6] if the contract of employment is not for a definite
his competence in order to prove the illegality of his dismissal. As the NLRC period; or to the payment of his salaries corresponding to the unexpired portion
rightly held: of the employment contract, if the contract is for a definite period. [7] If the
dismissal is for a just cause but it was made without due process, the employee
What is worse, a finding was made that complainant has the burden of proving is entitled to the payment of an indemnity.[8]
that he was not incompetent or inefficient. This is a serious error and contrary
to the well-settled rule that in termination cases it is the employer who has the In the case at bar, private respondent was not only dismissed without
burden of proof that the dismissal is for a just and valid cause. Failure to do so cause but his dismissal was made without due process. He was informed of the
would necessarily mean that the dismissal is illegal (Polymedic General reason for his dismissal only at the time his employment was terminated on
Hospital v. NLRC, 134 SCRA 420). Hence, there is no valid basis for the February 25, 1990. Giving him notice pay equivalent to his one month salary in
Administrator to conclude that there was a semblance of truth to the charges of lieu of the notice in the contract of employment could not take the place of
incompetence or unsatisfactory performance when the complainant failed to notice before dismissal as required by law. The notice required is not a mere
rebut the same. Thus, in the absence of any other evidence submitted by technicality but a requirement of due process to which every employee is

37
entitled to insure that the employers prerogative to dismiss is not exercised in In her answer5 to the complaint, the respondent justified her refusal to sign and
an arbitrary manner.[9] attributed it to the failure of Nepomuceno and the other concerned employees
to submit sufficient supporting documents for their claims for reimbursement
As the employment contract in the case at bar is for a definite period, and the release of their salaries and allowances.
private respondent is entitled to the payment of his salaries corresponding to
the unexpired portion of his contract. The NLRC, therefore, correctly awarded
private respondent the amount which is equivalent to the unexpired portion of On March 22, 2002, a Formal Charge6 was issued against the respondent for the
his contract. The notice pay given to private respondent should be deemed as offenses of grave misconduct, gross insubordination and conduct prejudicial to
indemnity for his dismissal without due process.[10] the best interest of the service. These offenses were committed as follows:

WHEREFORE, the petition is DISMISSED for lack of merit. 1. That Marilyn G. Arandia intentionally refused to sign boxes A not
only of the disbursement vouchers as payment for the approved and
SO ORDERED.
official travelling expenses to Manila of Director Eriberta B.
G.R. No. 199549 April 7, 2014 Nepomuceno for the period from October 20-28, 1999, but also that of
CIVIL SERVICE COMMISSION and DEPARTMENT OF SCIENCE AND the vouchers as payments for the official travelling expenses incurred
TECHNOLOGY, Regional Office No. V,Petitioners, by Accountant Remegia Caluya and Budget Officer Susana Bertes from
vs. October 26-28, 1999 and that of the disbursement voucher as payment
MARILYN G. ARANDIA, Respondent. for the official travel to Manila of Dr. Felina D. Ferro from February 20
DECISION to 25, 2000;
BRION, J.:
Assailed in this petition for review on certiorari1 are the decision2 dated June 2. That Arandia refused to sign box A of the disbursement voucher as
30, 2011 and the resolution3 dated November 25, 2011 of the Court of Appeals payment for the actual services rendered by one Jobert Mejillano from
(CA) in CA-G.R. SP No. 100422. October 18 to 30, 1999 and from November 16 to 30, 1999;
The CA dismissed the administrative complaint for gross insubordination, gross
neglect of duty, conduct grossly prejudicial to the best interest of public service, 3. That Arandia continuously refused to sign box A of the disbursement
grave misconduct and gross inefficiency in the performance of duty filed against voucher as cash advance payment for diesel expenses to be incurred by
respondent Marilyn. G. Arandia, then Administrative Officer V of the Director Nepomuceno while on official travel to Manila from February
Department of Science and Technology Regional Office No. V (DOST-V) in Rawis, 18 to 22, 2000 in the amount of ₱3,000.00 of ₱4,301.00 for the primary
Legazpi City. reason that Eriberta N. Navera is the authorized and recognized person
who can get cash advance and not Eliberta (sic) B. Nepomuceno
The Facts
In Bringas-Dayson, Carmencita Giselle E.B., CSC Resolution no. 96-2351
In March 2000, Eriberta Nepomuceno, Regional Director of DOST-V, filed an the Commission said that "xxx a judicial decree of nullity of a previous
administrative complaint4 for gross insubordination, gross neglect of duty, marriage is not necessary before a woman can resume using her
conduct grossly prejudicial to the best interest of public service, grave maiden name. No law require that a judicial decree of nullity of a
misconduct and gross inefficiency in the performance of duty against the previous marriage be obtained by a married woman in order to validly
respondent with the Civil Service Commission Regional Office No. V (CSCRO-V), use her maiden name;"
Legazpi City. Nepomuceno alleged that the respondent refused to sign, without
justifiable cause, documents for the payment of certain miscellaneous and 4. That Arandia vehemently refused to obey various directions of
travelling expenses, phone bills, and the release of salaries and allowances of Director Nepomuceno on the approval of telephone call slip for the two
Nepomuceno and other employees of DOST-V. division chiefs per memorandum dated 6 March 2000 and on the
issuance directing Arandia to immediately turn-over all documents
under her direct supervision and the exchange of room assignments
38
with the duly constituted Administrative Officer-Designate pursuant to It must be emphasized that the functions performed by Arandia are not merely
Special Order No. 023, s. of 2000 (dated 9 June 2000); and; clerical in nature, neither are they ministerial. The Position Description Form
(PDF) of Arandia as Administrative Officer V states "supervises and coordinates
5. That on December 15, 1999 and February 16, 2000, Arandia, accounting functions, budget operation and control." Clearly, these functions
respectively, refused to sign box A of the disbursement voucher, to the require a degree of discretion which is even more amplified considering that it
prejudice of the interest of the service, as payment for the registration involves the disbursement of public funds. x x x
fee of three (3) participants to the two-day training on the "Revised
Policies on Performance Evaluation System" and "Updates on Civil Clearly, the provisions of the foregoing law [referring to Section 171 of the
Service Matters."7 GAAM] rendered Arandia to be more circumspect in (sic) performance of the
duties of her office, specifically in affixing her signatures on undocumented
In an Order8 dated April 26, 2006, Director Cecilia R. Nieto of CSCRO-V found disbursements. This circumspection with regard to her duties cannot be
respondent guilty of conduct prejudicial to the best interest of the service only classified as an undue prejudice to the best interest of the service, thus making
and imposed on her the penalty of suspension for six months and one day. The her liable for the offense.
respondent filed a motion for reconsideration but Director Nieto denied the
motion in a subsequent order9 dated June 8, 2006. She then appealed her case Also, her cautious attitude in approving disbursements is not without basis.
to the Civil Service Commission (CSC) National Office. Records show that in the audit conducted by the DOST Central Office for the
period January to August 1999 signed by then DOST Assistant Secretary Imelda
Ruling of the CSC D. Rodriguez yielded adverse findings with regard to the transactions of DOST
Region V. In the said report, it was indicated that: "The findings covered
The CSC partially found merit in respondent’s appeal. In a Resolution No. disbursement of public funds principally approved by Regional Director
070801 dated April 23, 2007,10 the CSC made the following findings: Eriberta N. Navera, which indicate a pattern of dishonesty, consisting largely of
claims of the Regional Director which are unnecessary, irregular, excessive and
extravagant. The disbursements indicate, likewise, a pattern of wanton
After careful evaluation of the records of the case, the Commission finds no disregard for accounting and auditing rules and regulations involving other
substantial evidence to hold Arandia guilty of Conduct Prejudicial to the Best finance officials such as the Budget Officer and the Accountant."
Interest of the Service.
With respect to the salary of Jobert Mejillano, Arandia did not affix her signature
xxxx in box of the disbursement voucher, since there was no valid basis to do so. This
Commission in Memorandum Circular No. 46., s. 1990 (Prohibiting the Practice
First, it must be first pointed out that Arandia was held liable for Conduct of Issuing Job Orders in Hiring Casuals) prohibits the hiring of Job Orders in
Prejudicial to the Best Interest of the Service for her refusal to sign "box A" of hiring casuals. In DOST Memorandum dated May 24, 1999, then Assistant
various disbursement vouchers pertinent to the transactions of her office, Secretary Imelda D. Rodriguez, instructed all Directors of DOST, to comply
namely, the disbursement vouchers for official travelling expenses of the strictly with the aforementioned CSC memorandum circular. Thus, Arandia
complainant Director Nepomuceno for her trip to Manila covering the period of cannot be held liable for her refusal to sign the said disbursement voucher
October 20 to 28, 1999, the disbursement vouchers for the travelling expenses considering that she merely obeyed the DOST memorandum prohibiting the
of Remegio Caluya (Accountant) and Susana Ferro (Budget Officer) from hiring of casuals thru job orders.
October 26-28, 1999, and that of Felina Ferro from February 20-25, 2000 and
the disbursement voucher for the payment of the salary of Jobert Mejillano for
xxxx
the period of October 18- 30, 1999 and November 16-30, 1999. The records are
replete with evidence that indeed Arandia had justifiable reasons in not signing
these disbursement vouchers. Records are bereft of any showing that the aforementioned requirements
[referring to Section 168 of the GAAM] have been complied with. In fact, the
audit investigation conducted by the DOST Central Office showed that DOST

39
Regional Office No. V incurred several unnecessary, irregular, excessive and Special Order No. 23. The respondent filed a motion for reconsideration
extravagant disbursement of public funds. Thus, Arandia, in refusing (sic) affix questioning her reassignment on June 27, 2000.
her signature was exercising her prudent discretion, which by reason of the
office she holds, was incumbent upon her. Also, the CSC found that the respondent refused to comply with an office
memorandum dated March 6, 2000 requiring her and another Division Chief, to
On the issue of the (sic) Arandia’s refusal to sign the appropriate box in the secure Nepomuceno’s approval/signature before using the office telephone. For
disbursement voucher for the travelling expenses for the period of January 20- these reasons, the CSC found the respondent guilty of two counts of
February 14, 2000 of Director Eriberta Nepomuceno, the Commission likewise insubordination and imposed on her the penalty of three months
finds Arandia’s refusal valid. While it is true that Arandia was furnished a copy suspension.12 The respondent filed a motion for reconsideration which the CSC
of the (sic) Director Nepomuceno’s affidavit that the latter is reverting to her denied; thus, the appeal with the CA.
maiden name, records show that Arandia relied on the opinion of the Assistant
Secretary when she refused to sign the same. In fact, Arandia requested for a Ruling of the CA
legal opinion from then DOST Assistant Secretary Apolonio B. Anota Jr., with
regard to the procedure to be followed. In a Memorandum addressed to In its assailed decision, the CA ruled in the respondent’s favor and dismissed the
Director Nepomuceno dated February 28, then Assistant Secretary Anota administrative complaint filed against the respondent after it found that she
relying on Articles 371-373 of the Civil Code replied: actually complied with the subject office memoranda:

"Considering that our records show that your appointment paper, oath of office Immediately upon receipt of such denial [referring to the denial of the
and other official documents are clear that the one appointed to, and who respondent’s motion for reconsideration to her reassignment], petitioner
assumed, the position of Regional Director DOST Regional Office 5 carries the [respondent herein] complied with Nepomuceno’s order and forwarded to
name ERIBERTA N. NAVERA, the following requirements should be complied Engr. Lucena pertinent documents in her possession. This is evinces by the
with before we can consider that the person bearing said name and ERIBERTA Letter dated 28 June 2000 detailing the list of documents entrusted into the
NEPOMUCENO is one and the same: xxx custody of Engr. Lucena, The Letter speaks for itself as it ineluctably established
that petitioner complied with her superior’s order – to turn over pertinent
"For the meantime, this Department will be recognizing all acts and official documents despite her reluctance to relinquish her post as Administrative
matters coming from the Regional Director, DOST 5 under the official name Officer V.
ERIBERTA N. NAVERA only."11
Next, the records unearthed that it was Engr. Lucena who was hesitant, if not,
These findings, notwithstanding, the CSC still found the respondent liable for unwilling to exchange room assignments with petitioner. His Letter dated 28
insubordination for her refusal to obey several memoranda issued by February 2002 to Nepomuceno cannot be any clearer –
Nepomuceno requiring her to immediately turn-over the documents under her
supervision to the new Administrative Officer-Designate, Engr. Manuel Sn. B. This is to request retention of my present room assignment at PMES for the
Lucena, Jr., and to comply with the exchange of room assignment (as well as the very reason that key ASD officers’ (Accountant, Budget Officer and Supply
memoranda directing her to answer or submit an explanation for her refusal) Officer) offices are already located on the first floor adjacent to it. It would be
brought about by the respondent’s reassignment from the position of most convenient and advantageous to all if we were to be located near one
Administrative Officer to Planning Officer. another for an efficient and effective flow of official transactions.

It appears that, on August 29, 1999, Nepomuceno issued Special Order No. 32 I hope that this will merit your kind approval.
designating the respondent as Planning Officer and Co-Division Chief of the
Technical Services Division of DOST-V, which order was temporarily suspended
(pending a motion for clarification) and then re-issued on June 9, 2000 as This was followed by another missive explaining at greater length why he was
skeptic in exchanging rooms with petitioner –

40
Anent your memo dated 1 August 2003 of same subject, may I request that my Insubordination is defined as a refusal to obey some order, which a superior
transfer to TSD Room be temporarily put aside for the following reasons: officer is entitled to give and have obeyed. The term imports a willful or
intentional disregard of the lawful and reasonable instructions of the
1. As I repeatedly conveyed to you, taking into consideration my employer.14
assignment in planning where a lot of concentration is needed,
movement and sound common in a shared room easily distract me. My In this case, the respondent committed insubordination when she failed to
previous Directors recognized it that is why I am assigned in this promptly act on the June 16, 2000 memorandum15 issued by her superior,
present room since 1996. And the whole are including the computer Regional Director Nepomuceno, reminding her of her duties to immediately
room is assigned to PMES and IT where I also belong as its Project turn-over documents to and exchange room assignments with the new
Manager. We worked as a team. Administrative Officer-Designate, Engr. Lucena. The subject memorandum was
a lawful order issued to enforce Special Order No. 23, s. of 2000 reassigning the
2. Scattering me and my Team members in PMES-IT will effectively respondent from Administrative to Planning Officer, and which warranted the
destroy our teamwork to the detriment of the projects and in total respondent’s obedience and compliance.
contrast to sound management practice of teamwork and team
building. Also, I can easily attend to the computer server LAN-internet The reiteration of the directives in the June 16, 2000 memorandum in several
requirements together with and/or in the absence of Mr. Serrano succeeding memoranda issued by Nepomuceno (dated June 19, 2000, 16 June 23,
because it is just within the same work area. 200017 and June 26, 2000),18 all the more demonstrates the respondent’s
inaction and non-compliance with her superior’s orders.1âwphi1 The records
xxxx show that it was only on June 28, 2000 that the respondent complied with the
document tum-over through a letter addressed to Engr. Lucena containing a list
How then could petitioner transfer to Engr. Lucena’s room given that it was the of personnel files, human resource management and general administration
latter who refused to surrender his office space? Petitioner found herself in an documents under her accountability.19
apparent cul-de-sac as she was unable to move in to Engr. Lucena’s room
through no fault of her own.13 We see in the respondent's initial inaction her deliberate choice not to act on
the subject memoranda; she waited until the resolution of her motion for
The CA likewise found that the respondent did not violate the March 6, 2000 reconsideration of her reassignment (that she filed on June 27, 2000) before she
memorandum that required her to seek clearance from the Regional Director’s actually complied. The service would function very inefficiently if these types of
Office before making any phone call because at the time the respondent made dilatory actions would be allowed.
the contested telephone calls, she had not yet received any copy of the
memorandum. As for the memorandum on the use of the office telephone, we find, as the CA
did, the charge against the respondent unmeritorious. Though the subject
The Issue memorandum was issued on March 6, 2000, the respondent's office received it
only on March 7, 2000 at around 10 o'clock in the moming.20 Thus, respondent
could not have committed a violation for the telephone calls she made earlier
The sole issue raised in the present petition for review on certiorari is the
that day.
respondent’s liability for insubordination.
Insubordination is a less grave offense punishable by suspension of one month
Our Ruling and one day to six months.21 Since we merely found the respondent guilty of
insubordination in not promptly complying with the memoranda for the turn-
We find the present petition partially meritorious. The respondent is guilty of over of documents, we find the suspension of one month and one day as
simple insubordination. sufficient penalty for her offense.

41
Considering, however, that respondent is no longer with DOST-V and is now these eleven laborers, the volume of business and the work performed
working abroad, we can no longer impose on her the penalty of suspension by these workers during Sundays, legal holidays, and night shift.
from service. In lieu thereof, we impose on the respondent the penalty of a fine
of one month salary, which amount is to be deducted from her retirement After considering the evidence, both testimonial and documentary and
benefits or from whatever benefits, if any, that she is still entitled to receive the response of the chief of the examining division of this Court, we are
after her resignation. If there is none, the respondent is ordered to pay the fine of the opinion that there was really lack of materials at the time of the
directly to and within the period to be directed by the CSC. laying off of these 11 laborers. However, there is also sufficient
evidence to the effect that the respondent company, in reducing the
WHEREFORE, premises considered, we find Marilyn G. Arandia GUILTY of number of its personnel, selected workers that belonged to the
INSUBORDINATION and impose on her the penalty of a FINE equivalent to her petitioning union. This is discrimination and the same can not be
one month salary. tolerated. The right to reduce personnel must not be abused and must
not be taken advantage of to dismiss laborers with whom the
SO ORDERED. management is displeased due to their union activities. In the present
case, it is the opinion of the Court that the management of the company
PHILIPPINE SHEET METAL WORKERS' UNION (CLO), petitioner, selected these 11 workers because they organized a labor union.
vs. Although the company has the right to reduce its personnel, the said
THE COURT OF INDUSTRIAL RELATIONS, PHILIPPINE CAN COMPANY, and company erred in abusing this right. It is, therefore, ordered that these
LIBERAL LABOR UNION,respondents. 11 workers be retained in the respondent company until the
REYES, J.: occurrence of facts that may give rise to a just cause of their laying off
This is a petition for certiorari to review an order of the Court of Industrial or dismissal, or there is evidence of sufficient weight to convince the
Relations on the ground that the same was rendered in excess of jurisdiction Court that their conduct is not satisfactory. As a consequence, the
and with grave abuse of discretion. company is ordered to pay their corresponding wages from the date of
The said order was issued in case No. 37-V (2) of said court involving an their lay-off to the date of their temporary read-mission in the
industrial dispute between the respondent company (a corporation engaged in company.
the manufacture of tin plates, aluminum sheets, etc.) and its laborers some of
whom belong to the Philippine Sheet Metal Workers' Union (CLO) and some to As a separate incident from the above, the company, on February 10, 1947, that
the Liberal Labor Union. The dispute was over certain demands made upon the is, nine days before the decision came down, filed a motion in the case, asking
company by the laborers, one of the demands (No. 13th in the list) being for the for authority to lay off at least 15 workers in its can department on the ground
recall of eleven workers who had been laid off. Temporarily taken back on that the installation and operation of nine new labor-saving machines in said
certain conditions pending final determination of the controversy, these eleven department had rendered the services of the said workers unnecessary. The
workers were in the end ordered retained in the decision handed down by the Philippine Sheet Metal Workers' Union (CLO) opposed the motion, alleging that
court on February 19, 1947, which disposed of this part of the case as follows: there was more than sufficient work in the company to keep all its workers
busy, and, on the further allegation that the company had hired without the
The petitioner tried to prove that the 11 laborers were laid off by the authority of the courts some ten new laborers pending resolution of the
respondent company due to their union activities. As a matter of fact, of principal case, it in turn asked that the company be declared guilty of contempt
the 11 workers laid off, there are included officers and members of the of court. About a year later, the court, after due hearing and investigation,
petitioning union, namely, the president, Pablo Sicat; the vice- rendered an order, dated February 5, 1948, granting the company's motion to
president, Generoso Villanueva; and the secretary, Marcos Eugenio. The lay off 15 workers and denied the petition to have the company declared in
respondent company proved that the laying off of these eleven workers contempt of court. This order is the one now before us for review.
was due to lack of materials. With regard to this contention, the
examining division of this Court was ordered to investigate the The fifteen laborers slated for dismissal had each of them a bad record
availability of materials used in connection with the work performed by according to the list submitted by the company, which reads as follows:

42
1. Pablo Sicat, coppersmith, por haber abandonado por mucho tiempo And the order complained of is based upon the following conclusions of fact of
su trabajo; the court below:

2. Manuel Pajarillo, making the handles of the cans, por frecuentes 1. La compania tiene instalada y en operacion en su fabrica, ademas de
ausencias; las maquinas antiguas, trece (13) nuevas unidades de 'labor saving
machines', entre similares y enteramente diferentes, que llegaron de los
3. Marcos Eugenio, solderer, por haber estado saliendo a menudo en Estados Unidos de America en distintas fechas, desde el agosto de 1946
horas de trabajo y dejado el servicio sin causa razonable ni permiso; hasta el junio de 1947.

4. Miguel Magcalin, solderer, por haber abandonado definitivamente el 2. Dichas nuevas maquinas ahorran obra de mano y tiempo, hacen mas
trabajo; faciles y rapidos los trabajos y aumentan el volumen de la produccion.

5. Juanito Villanueva, solderer, por ineficiencia; 3. En su fabrica la compania tiene ochenta y cinco (85) obreros, y el
propuesto despido de los quince (15) obreros, entre hombres y
6. Melitona Basilio, solderer, por haber estado saliendo a menudo en mujeres, se debe principalmente a que sus servicios son ya innecesarios
horas de trabajo sin causa razonable; porque sus trabajos han sido absorbidos por las nuevas maquinas.

7. Felicidad Villanueva, painting rubber, por ineficiencia; 4. En la seleccion de dichos quince (15) obreros la compania, mediante
un grupo o comite de tres (3) de sus funcionarios y empleados de
confianza, con el gerente de la misma a la cabeza, se baso en los
8. Conchita Basilio, painting rubber, por ser perezosa y salidas a
servicios y la conducta de cada obrero.
menudo en horas de trabajo;
5. El comite de seleccion no se guio por la afiliacion de los obreros a
9. Soledad del Rosario, painting rubber, por no tener interes en el ninguna de las dos uniones obreras existentes en el seno de la fabrica, y
trabajo y salidas a menudo en horas de labor; solamente tuvo en cuenta al verificar la seleccion estos (a) Abandono
del trabajo, sin aviso o justa causa; (b) Frecuentes ausencias
10. Fortunata Angelo, painting rubber, por ser ineficiente y injustificadas en la (el) servicio; (c) Salidas a menudo durante las horas
desobediente; de labor, sin causa razonable; y (d) ineficiencia, negligencia o falta de
interes en el cumplimiento del deber.
11. Segundina San Juan, painting rubber, por ineficiencia e
inobediencia; todos miembros de la union recurrente; 6. Lot obreros cuyo despido esta propuesto por la compania han
incurrido en las faltas que se atribuyen por la misma a cada uno de
12. Fermino Tiozon, can maker, por ser perezoso; ellos.

13. Genaro Galvez, general helper, por ser perezoso; 7. La compañia no ha aceptado nuevos obreros y si ha hecho trabajar
algunas veces a ciertos obreros o mecanicos suyos en exceso de las
14. Leonardo Soliman, operator-messenger, por ineficiencia, por haber ocho horas, ha sido en interes de la eficiencia o por exigencias del
estado llegando tarde a la fabrica y durmiendo en horas de trabajo; servicio y no por haber tenido mucho volumen de trabajo en su fabrica.
miembros de la union terceristas; y
Indudablemente, la compañia abrigando el deseo laudable de
15. Ho Ching Sing, laborer, por haber abandonado el trabajo sin previa desarrollar su negocio y aumentar su produccion, ha introducido
notificacion; no unionista. importantes cambios y mejoras en la elaboracion de sus productos,
43
recurriendo al empleo de maquinarias modernas para atender La compañia tiene derecho de despedir a sus empleados u obreros. Si
debidamente y satisfacer mejor las demandas del publico consumidor. bien este derecho esta sujeto a la regulacion del Estado, en su normal
El proposito de la compania merece aplausos, el medio de que se vale ejercicio no se inmiscuye la ley. El patrono paga el jornal de sus obreros
para realizarlo es digno de encomio y su objetivo significa por su trabajo, y es logico y justo que el mismo tenga derecho a esperar
desenvolvimiento progresivo en la solucion de los problemas de los mismos lealtad y fiel cumplimiento de sus obligaciones. No es el
industriales para el beneficio de la comunidad. Todo paso o medida que proposito de la ley obligar al principal a retener en su servicio a un
tienda a favorecer el interes publico y con miras a dar impulso a la obrero cuando no recibe de este trabajo adecuado, deligencia
mecanizacion de las industrias, contribuye a la mejora de la economia y (diligencia) y buen comportamiento, o cuando su continuacion en el
la ansiada rehabilitacion del pais; y por lo tanto, no debe ser obstruido empleo es claramente opuesta a los intereses de su patrono, porque la
sino, por el contrario, fomentado. ley al proteger los derechos del obrero no autoriza la opresion ni la
destruccion del principal.
It appearing that there has been fair hearing and that there is ample evidence to
support the conclusions of fact of the lower court, we would have no grounds The petitioner contends that the order complained of was made with grave
for interfering with those conclusions. And these make it clear that there was abuse of discretion and in excess of jurisdiction in that it is contrary to the
real justification for reducing the number of workers in respondent company's pronouncement made by the lower court in its decision in the main case where
factory, such a measure having been made necessary by the introduction of it disapproved of the dismissal of eleven workers "with whom the management
machinery in the manufacture of its products, and that the company cannot be is displeased due to their union activities." It appears, however, that the
charged with discrimination in recommendating the dismissal of the fifteen pronouncement was made upon a distinct set of facts, which are different from
laborers named in the above list since their selection was made by a committee those found by the court in connection with the present incident, and that very
composed of both officers and employees who took no account of the laborers' decision, in ordering the reinstatement of the eleven laborers, qualifies the
affiliation to the unions and only considered their proven record. order by saying that those laborers are to be retained only "until the occurrence
of facts that may give rise to a just cause of their laying off or dismissal, or there
There can be no question as to the right of the manufacturer to use new labor- is evidence of sufficient weight to convince the Court that their conduct is not
saying devices with a view to effecting more economy and efficiency in its satisfactory."
method of production. As the lower court observes in its order,
After a careful review of the record, we find that the Court of Industrial
No se puede detener el curso de los tiempos. Si se quiere sobrevivir y Relations has neither exceeded its jurisdiction nor committed grave abuse of
prosperar, la unica alternativa es adaptarse a las exigencias del discretion in rendering the order complained of. The petition for certiorari is,
presente mundo moderno. No se puede cerrar los ojos a la realidad. No therefore, denied, but without costs against the petitioner for the reasons stated
se puede depender de metodos antiguos, hay que recurrir a metodos in its motion to litigate as pauper.
mas eficientes y avanzados. La produccion no solo debe ser de elevada
calidad sino ilimitada y su costo al alcance de todos. Debe seguirse el DOLORES T. ESGUERRA, G.R. No. 173012
ejemplo de otros paises.
VALLE VERDE COUNTRY CLUB,
The right to reduce personnel should, of course, not be abused. It should not be INC. and ERNESTO VILLALUNA, June 13, 2012
made a pretext for easing out laborers on account of their union activities. But Respondents.
neither should it be denied when it is shows that they are not discharging their x------------------------------------------------------------------------------------x
duties in a manner consistent with good discipline and the efficient operation of
an industrial enterprise. We, therefore, approve of the following DECISION
pronouncement of the court below:
BRION, J.:

44
Before this Court is a petition for review on certiorari,[1] filed by account. She alleged that Judge Bonifacio took pity on her and told her to take
petitioner Dolores T. Esguerra (Esguerra), from the February 7, home some food and to charge it on his account.
2006 decision[2] and the June 2, 2006 resolution[3]of the Court of Appeals (CA) in
CA-G.R. SP No. 85012, ruling that Esguerra had been validly dismissed from her
employment with respondent Valle Verde Country Club, Inc. (Valle Verde). Valle
Verde terminated Esguerras employment for loss of trust and confidence in the Valle Verde found Esguerras explanation unsatisfactory and, on July 26,
custody of cash sales. 2000, issued a second memorandum terminating Esguerras employment.[9]

FACTUAL BACKGROUND
On April 1, 1978, Valle Verde hired Esguerra as Head Food Checker. In 1999, she THE LABOR ARBITERS RULING
was promoted to Cost Control Supervisor.[4]

Esguerra filed a complaint[10] with the National Labor Relations


On January 15, 2000, the Couples for Christ held a seminar at the Commission (NLRC) for illegal dismissal. In her April 5, 2002 decision, Labor
country club. Esguerra was tasked to oversee the seminar held in the two Arbiter Marita V. Padolina dismissed the complaint for lack of merit, but
function rooms the Ballroom and the Tanay Room. The arrangement was that ordered Valle Verde to pay Esguerra 13th month pay in the amount of P2,016.66,
the food shall be served in the form of pre-paid buffet, while the drinks shall be rice subsidy in the amount of P1,100.00, and ten percent (10%) attorneys fees
paid in a pay as you order basis.[5] in the amount of P311.66.[11]

The Valle Verde Management found out the following day that only the THE NLRCS RULING
proceeds from the Tanay Room had been remitted to the accounting
department. There were also unauthorized charges of food on the account of
Judge Rodolfo Bonifacio, one of the participants. To resolve the issue, Valle
Verde conducted an investigation; the employees who were assigned in the two Esguerra appealed the case to the NLRC.[12] In its December 27, 2002
function rooms were summoned and made to explain, in writing, what had decision, the NLRC modified the decision and only awarded P143,000.00 as
transpired.[6] separation pay, equivalent to one-half () month for every year of
service,[13] after taking into account Esguerras long years of service and absence
of previous derogatory records.
On March 6, 2000, Valle Verde sent a memorandum to Esguerra
requiring her to showcause as to why no disciplinary action should be taken
against her for the non-remittance of the Ballrooms sales. Esguerra was placed Esguerra filed a partial motion for reconsideration,[14] while Valle Verde
under preventive suspension with pay, pending investigation.[7] filed its own motion for reconsideration.[15] In its March 31, 2004 resolution, the
NLRC denied Esguerras motion, but granted Valle Verdes motion. Thus, it set
aside its December 27, 2002 decision and affirmed the April 5, 2002 decision of
the labor arbiter.
In her letter-response, Esguerra denied having committed any
misappropriation. She explained that it had been her daughter (who was
assigned as a food checker) who lost the money.[8] To settle the matter, Esguerra
paid the unaccounted amount as soon as her daughter informed her about it. THE CA RULING
Esguerra also explained the unauthorized charging of food on Judge Bonifacios

45
We fail to find any irregularities in the service of notice to Esguerra.
The memorandum dated March 6, 2000[19] informed her of the charges, and
Aggrieved, Esguerra elevated her case to the CA via a Rule 65 petition clearly directed her to show cause, in writing, why no disciplinary action should
for certiorari. In its February 7, 2006 decision, the CA denied Esguerras petition be imposed against her. Esguerras allegation that the notice was insufficient
for certiorari. It found that the NLRC did not commit any grave abuse of since it failed to contain any intention to terminate her is incorrect.
discretion in finding that Esguerra was validly dismissed from employment for
loss of trust and confidence, and that her length of service cannot be counted in In Perez v. Philippine Telegraph and Telephone Company,[20] the Court
her favor. underscored the significance of the two-notice rule in dismissing an employee:

Esguerra filed the present petition after the CA denied[16] her motion
for reconsideration.[17]
To meet the requirements of due process in the dismissal of an
THE PETITION employee, an employer must furnish the worker with two
written notices: (1) a written notice specifying the grounds for
Esguerra argues that the appellate court erred in ruling that she had termination and giving to said employee a reasonable
been validly dismissed on the ground of loss of trust and confidence. She alleges opportunity to explain his side and (2) another written notice
that she was only a regular employee and did not occupy a supervisory position indicating that, upon due consideration of all circumstances,
vested with trust and confidence. Esguerra also questions the manner of grounds have been established to justify the employers
dismissal since Valle Verde failed to comply with procedural requirements. decision to dismiss the employee. [emphases and italics
ours].[21]

Contrary to Esguerras allegation, the law does not require that an intention to
THE ISSUE terminate ones employment should be included in the first notice. It is enough
that employees are properly apprised of the charges brought against them so
they can properly prepare their defenses; it is only during the second notice
that the intention to terminate ones employment should be explicitly stated.
The core issue boils down to whether the CA erred in affirming the NLRCs
decision and resolution.
There is also no basis to question the absence of a proper
OUR RULING hearing. In Perez, the Court provided the following guiding principles in
connection with the hearing requirement in dismissal cases:
The petition is without merit.

Under the Labor Code, the requirements for the lawful dismissal of an employee a) "ample opportunity to be heard" means any meaningful
are two-fold[:] the substantive and the procedural aspects. Not only must the opportunity (verbal or written) given to the employee to
dismissal be for a just or authorized cause, the rudimentary requirements of answer the charges against him and submit evidence in
due process notice and hearing must, likewise, be observed x x x. Without the support of his defense, whether in a hearing, conference or
concurrence of the two, the termination would x x x be illegal[;] employment is some other fair, just and reasonable way.
a property right of which one cannot be deprived of without due process.[18]
b) a formal hearing or conference becomes mandatory only
when requested by the employee in writing or substantial
evidentiary disputes exist or a company rule or practice
There was valid notice and hearing requires it, or when similar circumstances justify it.

46
c) the "ample opportunity to be heard" standard in regardless of who was at fault. Instead, she settled the unaccounted amount
the Labor Code prevails over the "hearing or conference" only after the accounting department informed her about the discrepancy,
requirement in the implementing rules and regulations.[22] almost one month following the incident. Esguerras failure to make the proper
report reflects on her irresponsibility in the custody of cash for which she was
accountable, it was her duty to account for the sales proceeds, and she should
In sum, the existence of an actual, formal "trial-type" hearing, have known about the missing amount immediately after the event.
although preferred, is not absolutely necessary to satisfy the employee's
right to be heard. Esguerra was able to present her defenses; and only upon We cannot favorably consider Esguerras explanation about the
proper consideration of it did Valle Verde send the second memorandum unauthorized charging on Judge Bonifacios account. It is highly unethical for an
terminating her employment. Since Valle Verde complied with the two-notice employee to bring home food intended to be sold to customers. At any rate, her
requirement, no procedural defect exists in Esguerras termination. explanation is self-serving and cannot be believed; the numerous written
testimonies of the other co-workers never even mentioned it.
Esguerra occupied a position of trust and confidence

We now dwell on the substantive aspect of Esguerras dismissal. We have held


that there are two (2) classes of positions of trust the first class consists of WHEREFORE, we hereby DENY the petition for lack of merit. Costs against
managerial employees, or those vested with the power to lay down Dolores T. Esguerra.
management policies; and the second class consists of cashiers, auditors,
property custodians or those who, in the normal and routine exercise of their
functions, regularly handle significant amounts of money or property. [23] SO ORDERED.

Esguerra held the position of Cost Control Supervisor and had the duty to remit
to the accounting department the cash sales proceeds from every transaction G.R. No. 82249 February 7, 1991
she was assigned to.[24] This is not a routine task that a regular employee may WILTSHIRE FILE CO., INC., petitioner,
perform; it is related to the handling of business expenditures or finances. For vs.
this reason, Esguerra occupies a position of trust and confidence a position THE NATIONAL LABOR RELATIONS COMMISSION and VICENTE T.
enumerated in the second class of positions of trust. Any breach of the trust ONG, respondents.
imposed upon her can be a valid cause for dismissal. FELICIANO, J.:

Private respondent Vicente T. Ong was the Sales Manager of petitioner Wiltshire
File Co., Inc. ("Wiltshire") from 16 March 1981 up to 18 June 1985. As such, he
In Jardine Davies, Inc. v. National Labor Relations Commission,[25] we
received a monthly salary of P14,375.00 excluding commissions from sales
held that loss of confidence as a just cause for termination of employment can
which averaged P5,000.00 a month. He also enjoyed vacation leave with pay
be invoked when an employee holds a position of
equivalent to P7,187,50 per year, as well as hospitalization privileges to the
responsibility, trust and confidence. In order to constitute a just cause for
extent of P10,000.00 per year.
dismissal, the act complained of must be related to the performance of the
duties of the dismissed employee and must show that he or she is unfit to
On 13 June 1985, upon private respondent's return from a business and
continue working for the employer for violation of the trust reposed in him or
pleasure trip abroad, he was informed by the President of petitioner Wiltshire
her.
that his services were being terminated. Private respondent maintains that he
We find no merit in the allegation that it was Esguerras daughter who tried to get an explanation from management of his dismissal but to no avail. On
should be held liable. She had no custody of the cash sales since it was not part 18 June 1985, when private respondent again tried to speak with the President
of her duties as a food checker. It was Esguerras responsibility to account for of Wiltshire, the company's security guard handed him a letter which formally
the cash proceeds; in case of problems, she should have promptly reported it, informed him that his services were being terminated upon the ground of
redundancy.
47
Private respondent filed, on 21 October 1985, a complaint before the Labor On the claim for moral damages, the NLRC pointed out that the effective date of
Arbiter for illegal dismissal alleging that his position could not possibly be private respondent's termination was 18 July 1985, although it was only 18
redundant because nobody (save himself) in the company was then performing June 1985 that he received the letter of termination, and concluded that he was
the same duties. Private respondent further contended that retrenching him not given any opportunity to explain his position on the matter. The NLRC held
could not prevent further losses because it was in fact through his remarkable that the termination was attended by malice and bad faith on the part of
performance as Sales Manager that the Company had an unprecedented petitioner, considering the manner of private respondent was ordered by the
increase in domestic market share the preceding year. For that accomplishment, President to pack up and remove his personal belongings from the office.
he continued, he was promoted to Marketing Manager and was authorized by Private respondent was said to have been embarrassed before his immediate
the President to hire four (4) Sales Executives five (5) months prior to his family and other acquaintance due to his inability to explain the reasons behind
termination. the termination of his services.

In its answer, petitioner company alleged that the termination of respondent's In this Petition for Certiorari, it is submitted that private respondent's dismissal
services was a cost-cutting measure: that in December 1984, the company had was justified and not illegal. Petitioner maintains that it had been incurring
experienced an unusually low volume of orders: and that it was in fact forced to business losses beginning 1984 and that it was compelled to reduce the size of
rotate its employees in order to save the company. Despite the rotation of its personnel force. Petitioner also contends that redundancy as a cause for
employees, petitioner alleged; it continued to experience financial losses and termination does not necessarily mean duplication of work but a "situation
private respondent's position, Sales Manager of the company, became where the services of an employee are in excess of what is demanded by the
redundant. needs of an undertaking . . ."

On 2 December 1986, during the proceedings before the Labor Arbiter, Having reviewed the record of this case, the Court has satisfied itself that indeed
petitioner, in a letter1 addressed to the Regional Director of the then Ministry of petitioner had serious financial difficulties before, during and after the
Labor and Employment, notified that official that effective 2 January 1987, termination of the services of private respondent. For one thing, the audited
petitioner would close its doors permanently due to substantial business losses. financial statements of the petitioner for its fiscal year ending on 31 July 1985
prepared by a firm of independent auditors, showed a net loss in the amount of
In a decision dated 11 March 1987, the Labor Arbiter declared the termination P4,431,321.00 and a total deficit or capital impairment at the end of year of
of private respondent's services illegal and ordered petitioner to pay private P6,776,493.00.2
respondent backwages in the amount of P299,000.00, unpaid salaries in the
amount of P22,352.11, accumulated sick and vacation leaves in the amount of In the preceding fiscal year (1983-1984), while the company showed a net after
P12,543.91, hospitalization benefit package in the amount of P10,000.00, tax income of P843,506.00, it actually suffered a deficit or capital impairment of
unpaid commission in the amount of P57,500,00, moral damages in the amount P2,345,172.00. Most importantly, petitioner Wiltshire finally closed its doors
of P100,000.00 and attorney's fees in the amount of P51,639.60. and terminated all operations in the Philippines on January 1987, barely two (2)
years after the termination of private respondent's employment. We consider
On appeal by petitioner Wiltshire, the National Labor Relations Commission that finally shutting down business operations constitutes strong confirmatory
("NLRC") affirmed in toto on 9 February 1988 the decision of the Labor Arbiter. evidence of petitioner's previous financial distress. The Court finds it very
The NLRC held that: difficult to suppose that petitioner Wiltshire would take the final and
irrevocable step of closing down its operations in the Philippines simply for the
The termination letter clearly spelled out that the main reason in sole purpose of easing out a particular officer or employee, such as the private
terminating the services of complainant is REDUNDANT and not respondent.
retrenchment.
Turning to the legality of the termination of private respondent's employment,
The supposed duplication of work of herein complainant and Mr. we find merit in petitioner's basic argument. We are unable to sustain public
Deliva, the Vice-President is absent that would justify redundancy. . . . respondent NLRC's holding that private respondent's dismissal was not justified

48
by redundancy and hence illegal. In the first place, we note that while the letter discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of
informing private respondent of the termination of his services used the word course, as violation of law or merely arbitrary and malicious action is not
"redundant", that letter also referred to the company having "incur[red] shown. It should also be noted that the position held by private respondent,
financial losses which [in] fact has compelled [it] to resort to retrenchment to Sales Manager, was clearly managerial in character. In D.M. Consunji, Inc. v.
prevent further losses".3 National Labor Relations Commission,5 the Court held:

Thus, what the letter was in effect saying was that because of financial losses, An employer has a much wider discretion in terminating the
retrenchment was necessary, which retrenchment in turn resulted in the employment relationship of managerial personnel as compared to rank
redundancy of private respondent's position. and file employees. However, such prerogative of management to
dismiss or lay off an employee must be made without abuse of
In the second place, we do not believe that redundancy in an employer's discretion, for what is at stake is not only the private respondent's
personnel force necessarily or even ordinarily refers to duplication of work. position but also his means of livelihood . . . .6
That no other person was holding the same position that private respondent
held prior to the termination of his services, does not show that his position had The determination of the continuing necessity of a particular officer or position
not become redundant. Indeed, in any well-organized business enterprise, it in a business corporation is management's prerogative, and the courts will not
would be surprising to find duplication of work and two (2) or more people interfere with the exercise of such so long as no abuse of discretion or merely
doing the work of one person. We believe that redundancy, for purposes of our arbitrary or malicious action on the part of management is shown.7
Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. Succinctly On the issue of moral damages, petitioner assails the finding of the NLRC that
put, a position is redundant where it is superfluous, and superfluity of a position the dismissal was done in bad faith. Petitioner argues that it had complied with
or positions may be the outcome of a number of factors, such as overhiring of the one-month notice required by law; that there was no need for private
workers, decreased volume of business, or dropping of a particular product line respondent to be heard in his own defense considering that the termination of
or service activity previously manufactured or undertaken by the enterprise. 4 his services was for a statutory or authorized cause; and that whatever
humiliation might have been suffered by private respondent arose from a lawful
The employer has no legal obligation to keep in its payroll more employees than cause and hence could not be the basis of an award of moral damages.
are necessarily for the operation of its business.
Termination of an employee's services because of retrenchment to prevent
In the third place, in the case at bar, petitioner Wiltshire, in view of the further losses or redundancy, is governed by Article 283 of the Labor Code
contraction of its volume of sales and in order to cut down its operating which provides as follows:
expenses, effected some changes in its organization by abolishing some
positions and thereby effecting a reduction of its personnel. Thus, the position Art. 283. Closure of establishment and reduction of personnel. –– The
of Sales Manager was abolished and the duties previously discharged by the employer may also terminate the employment of any employee due to
Sales Manager simply added to the duties of the General Manager, to whom the the installation of labor saving devices, redundancy, retrenchment to
Sales Manager used to report. prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of
It is of no legal moment that the financial troubles of the company were not of circumventing the provisions of this Title, by serving a written notice
private respondent's making. Private respondent cannot insist on the retention on the workers and the Ministry of Labor and Employment at least one
of his position upon the ground that he had not contributed to the financial (1) month before the intended date thereof. In case of termination due
problems of Wiltshire. The characterization of private respondent's services as to the installation of labor saving devices or redundancy, the worker
no longer necessary or sustainable, and therefore properly terminable, was an affected thereby shall be entitled to a separation pay equivalent to at
exercise of business judgment on the part of petitioner company. The wisdom least his one (1) month pay or to at least one (1) month pay for every
or soundness of such characterization or decision was not subject to year of service, whichever is higher. In case of retrenchment to prevent

49
losses and in cases of closures or cessation of operations of Sec. 5. Answer and hearing. –– The worker may answer the allegations
establishment or undertaking not due to serious business losses or stated against him in the notice of dismissal within a reasonable period
financial reverses, the separation pay shall be equivalent to one (1) from receipt of such notice. The employer shall afford the worker
month pay or at least one-half (1/2) month pay for every of service, ample opportunity to be heard and to defend himself with the
whichever is higher. A fraction of at least six (6) months shall be assistance of his representative if he so desires. (emphasis supplied)
considered one (1) whole year.
We note that Section 2 of Rule XIV quoted above requires the notice to specify
Termination of services for any of the above described causes should be "the particular acts or omissions constituting the ground for his dismissal", a
distinguished from termination of employment by reason of some blameworthy requirement which is obviously applicable where the ground for dismissal is the
act or omission on the part of the employee, in which case the applicable commission of some act or omission falling within Article 282 of the Labor
provision is Article 282 of the Labor Code which provides as follows: Code. Again, Section 5 gives the employee the right to answer and to defend
himself against "the allegations stated against him in the notice of dismissal". It
Art. 282. Termination by employer. –– An employer may terminate an is such allegations by the employer and any counter-allegations that the
employment for any of the following causes: employee may wish to make that need to be heard before dismissal is effected.
Thus, Section 5 may be seen to envisage charges against an employee
(a) Serious misconduct or willful disobedience by the constituting one or more of the just causes for dismissal listed in Article 282 of
employee of the lawful orders of his employer or the Labor Code. Where, as in the instant case, the ground for dismissal or
representative in connection with his work; termination of services does not relate to a blameworthy act or omission on the
part of the employee, there appears to us no need for an investigation and
hearing to be conducted by the employer who does not, to begin with, allege any
(b) Gross and habitual neglect by the employee of his duties; malfeasance or non-feasance on the part of the employee. In such case, there are
no allegations which the employee should refute and defend himself from. Thus,
(c) Fraud or willful breach by the employee of the trust to require petitioner Wiltshire to hold a hearing, at which private respondent
reposed in him by his employer or duly authorized would have had the right to be present, on the business and financial
representative; circumstances compelling retrenchment and resulting in redundancy, would be
to impose upon the employer an unnecessary and inutile hearing as a condition
(d) Commission of a crime or offense by the employee against for legality of termination.
the person of his employer or any immediate member of his
family or his duly authorized representative; and This is not to say that the employee may not contest the reality or good faith
character of the retrenchment or redundancy asserted as grounds for
(e) Other causes analogous to the foregoing. termination of services. The appropriate forum for such controversion would,
however, be the Department of Labor and Employment and not an investigation
Sections 2 and 5 of Rule XIV entitled "Termination of Employment:" of the or hearing to be held by the employer itself. It is precisely for this reason that an
"Rules to Implement the Labor Code" read as follows: employer seeking to terminate services of an employee or employees because of
"closure of establishment and reduction of personnel", is legally required to give
Sec. 2. Notice of dismissal. –– Any employer who seeks to dismiss a a written notice not only to the employee but also to the Department of Labor
worker shall furnish him a written notice stating the particular acts or and Employment at least one month before effectivity date of the termination.
omission constituting the grounds for his dismissal. In cases of In the instant case, private respondent did controvert before the appropriate
abandonment of work, the notice shall be served at the worker's last labor authorities the grounds for termination of services set out in petitioner's
known address. letter to him dated 17 June 1985.

xxx xxx xxx

50
We hold, therefore, that the NLRC's finding that private respondent had not It is of public notice that in the late 1980s, the construction industry
been accorded due process, is bereft of factual and legal bases. The award of experienced a major slump. In 1987, petitioner, a corporation engaged in
moral damages that rests on such ground must accordingly fall. general construction work, reportedly incurred huge operating losses of P134.8
million and net losses of P35.42 million. To save itself, petitioner implemented
While private respondent may well have suffered personal embarrassment by on 1 March 1988, a redundancy program wherein one hundred seventy seven
reason of termination of his services, such fact alone cannot justify the award of (177) employees occupying rank and file, managerial and staff positions were
moral damages. Moral damages are simply a species of damages awarded to separated from employment. Among them were private respondents Gamboa,
compensate one for injuries brought about by a wrongful act. 8 As discussed Tuason, and Din, all members of the AG&P United Rank and File Association
above, the termination of private respondent's services was not a wrongful act. (AG&P URFA), the certified collective bargaining representative for all rank and
There is in this case no clear and convincing evidence of record showing that file employees of petitioner. These employees received all the benefits due them
the termination of private respondent's services, while due to an authorized or under the Labor Code. As separation pay equivalent to one (1) month salary for
statutory cause, had been carried out in an arbitrary, capricious and malicious every year of service, respondent Gamboa received P149,261.13; respondent
manner, with evident personal ill-will. Embarrassment, even humiliation, that is Tuazon was paid P99,037.26; and respondent Din was given P46,111.56. They
not proximately caused by a wrongful act does not constitute a basis for an also signed releases indicating their conformity with petitioners redundancy
award of moral damages. program.[1]
More than a year after, or on 16 May 1989, petitioner was charged with
Private respondent is, of course, entitled to separation pay and other benefits unfair labor practice and illegal dismissal by private respondents. On 31 January
under Act 283 of the Labor Code and petitioner's letter dated 17 June 1985. 1991, Labor Arbiter Crisencio J. Ramos rendered a Decision in favor of private
respondents. The dispositive portion of the decision reads:
ACCORDINGLY, the Court Resolved to GRANT due course to the Petition
for Certiorari. The Resolutions of the National Labor Relations Commission WHEREFORE, premises considered, judgment is hereby rendered in this case as
dated 9 February 1988 and 7 March 1988 are hereby SET ASIDE and follows:
NULLIFIED. The Temporary Restraining Order issued by this Court on 21 March
1988 is hereby made PERMANENT. No pronouncement as to costs. 1. declaring respondents redundancy program as illegal;
2. ordering respondents to reinstate complainants to their previous of
SO ORDERED. equivalent positions without loss of seniority rights with full
backwages, to pay complainants backwages from April 1, 1988 to
ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC. January 31, 1991 (2 years and 10 months) as follows:
(AG&P), petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, SECOND DIVISION, ENRIQUE M. GAMBOA, CLARO M. John Din ---------------------------------------P 90,221.72
TUASON and JOHN DIN, respondents.
Enrique Gamboa ------------------------------ 101,583.60
DECISION
PUNO, J.: Claro Tuason ---------------------------------- 99,373.50

In this special civil action for certiorari, petitioner assails the Decision P291,178.82
dated 30 September 1996, as well as Resolution dated 6 December 1996 of
public respondent National Labor Relations Commission (NLRC), Second 3. ordering respondents to pay complainants ten percent (10%) of the
Division, in NLRC NCR Case No. 05-02295-89 invalidating its redundancy total award as attorneys fees or P29,117.88.
program and the separation from service of private respondents.
The claims for moral and exemplary damages are denied for lack of sufficient
basis.

51
SO ORDERED.[2] aforementioned cases previously decided by the commission, we are
constrained to rule in favor of complainants.[4]
Arbiter Ramos held that the complaint of the private respondents was
similar to the four (4) complaints[3]for illegal dismissal and unfair labor practice In the meanwhile, the NLRC was reorganized pursuant to R.A. No. 6715,
filed on 14 March 1988, by the AG&P URFA and thirty-six (36) union members otherwise known as the New Labor Relations Law. The aforementioned
against the petitioner. In these cases, the Third Division of the NLRC found decision of the former Third Division of the NLRC went to its First
petitioner guilty of the charge of unfair labor practice and illegal dismissal and Division. After admitting on appeal evidence of losses sustained by the
ordered the reinstatement of complainants without loss of seniority rights and petitioner from 1987 up to 1990, the First Division set aside the decision of its
the payment of their full backwages plus attorneys fees. Arbiter Ramos adopted former Third Division and dismissed the employees complaints for illegal
this ruling, thus: dismissal. After their motion for reconsideration was denied, complainants filed
a petition[5] before this Court alleging grave abuse of discretion on the part of
xxx the NLRC. On 29 November 1996, the Second Division of this Court, through Mr.
The evidence on hand provides us with no reason to deviate from the findings of Justice Vicente V. Mendoza, denied the petition.
the Commission in NLRC-NCR CASE NO. 00-03-1072-88 (and other cases Going back to the case at bar, public respondent, on appeal affirmed in
related/consolidated thereto). As correctly found by the Commission, the toto the decision of Labor Arbiter Ramos in a Decision dated 30 September
termination of complainants from their work was placed under the guise of a 1996. Petitioner moved for reconsideration but its motion was denied in a
redundancy program. The implementation of this program, effected in the wake Resolution dated 6 December 1996. Hence, this petition.
of developments arising between the union and the company, particularly the
strike in September 22 to October 18, 1987; the assumption of jurisdiction by Petitioner contends:
the Secretary of Labor which subsequently rendered a decision on the economic
issues of the strike and the CBA; and the pendency of the motion for 1. The NLRC cannot overturn the decision of the Supreme Court dated
reconsideration filed by both company and union with the Secretary of Labor November 29, 1996 in the case of AG&P [United] Rank and File
(sic). Association v. NLRC [First Division] and AG&P (G.R. No. 108259)
upholding the legality of the redundancy program of AG&P.
It was also borne out by the evidence, and viewed correctly by the Honorable 2. The NLRC ignored the fact that the present case is similarly situated
Commission, that the companys redundancy program has no basis for to the facts of NLRC Case No. 00-03-01072-88, NLRC Case No. 00-
implementation on account of the substantial profits obtained by the company 03-01248-88, NLRC Case No. 00-05-01970-88, NLRC Case No. 00-
from 1983 to 1988. 05-01972-88 which were the cases in review in AG&P [United]
Rank and File Association v. NLRC [First Division] and AG&P (G.R.
Thus, the redundancy program was but a mere scheme to get rid of the No. 108259).
complainants, all active union members, from further working at the company
3. The dismissal of the private respondents was in accordance with
and to continue championing the cause of labor which act constitutes not only
law and public policy.[6]
illegal dismissal but unfair labor practice as well.
The petition is impressed with merit.
The receipt by the complainants of their respective separation pay, even if
The key issue is whether our Decision in G.R. No. 108259 is applicable to
without protestation or reservation, does not stop them from asserting their
the case at bar. No less than the Solicitor General[7] makes the submission that
right to security of tenure and self organization. As mere salaried employees,
said Decision is decisive of the case at bar. We quote in extenso the well taken
complainants were faced with no other choice but to accept the money to
view of the Solicitor General, viz:
enable them to meet the demands of everyday living.
xxx
In view of the foregoing and considering further that the individual
complainants herein are similarly situated with the complainants in the
52
It should be noted that this case is similar to and, in fact, ought to be regarded as As already adverted to, Labor Arbiter Cresencio Ramos and the NLRCs Second
part of the cases filed by the employees affected by AG&Ps retrenchment Division both ruled in favor of private respondents, following the Resolution of
program in 1988. the NLRCs Third Division in the former cases.

In [the] implementation of its retrenchment program in 1988, AG & P laid off Since the cases a quo stemmed from the same circumstances as the ones
177 of its employees. Thirty-six (36) of these employees, which excludes private previously filed by the thirty six (36) AG & P employees, they share the same
respondents, filed complainants for illegal dismissal and unfair labor practice core issue: Was the redundancy/retrenchment program undertaken by AG & P
with the NLRC-NCR. These complaints, docketed as NLRC-NCR Cases Nos. 00- in 1988 and the resulting termination of the employment of 177 of its
03-01072, 00-01248-88, 00-05-01970-88 and 00-05-01972-88, were heard by employees, including private respondents herein, valid?
Labor Arbiter Quintin Mendoza who, in his decision dated 8 November 1988
(pp. 181-187, Record), dismissed them for lack of merit. The NLRC decided in the negative in its questioned Decision dated 30
September 1996. The NLRC, however, should have reconsidered its Decision
On appeal, the NLRCs Third Division reversed the aforesaid Labor Arbiters after the Decision of this Honorable Court in G.R. No. 108259, which was
Decision in its Resolution dated 20 March 1989 (pp. 24-30, Record) and promulgated on 29 November 1996, was brought to its attention.
declared AG & Ps redundancy program as illegal and, consequently, found AG &
P guilty of unfair labor practice. AG & P moved for a reconsideration. On 29 May In G.R. No. 108259, this Honorable Courts Second Division, speaking through
1992, the NLRCs First Division, to which the case was reassigned, rendered a Justice Mendoza, ruled in favor of the validity of AG & Ps redundancy
Resolution (pp. 424-430, Record) which reconsidered the Resolution of the program. The Court declared though that the program should have been more
NLRCs Third Division and reinstated Labor Arbiters Decision in its Resolution properly denominated as a retrenchment program because the reason for
dated 20 March 1989 (pp. 24-30, Record) and declared AG & Ps redundancy resorting to the dismissal by AG & P of its employees was economic in
program as illegal and, consequently, found AG & P guilty of unfair labor nature, i.e., to avoid or minimize business losses. The Court rejected the
practice. AG & P moved for a reconsideration. On 29 May 1992, the NLRCs First complaining employees claim that the program was a mere scheme to bust the
Division, to which the case was reassigned, rendered a Resolution (pp. 424-430, local union and instead ruled that AG & P duly established its claim of company
Record) which reconsidered the Resolution of the NLRCs Third Division and losses which was the basis of the questioned retrenchment program. Thus:
reinstated Labor Arbiter Mendozas Decision. After the employees motion for
reconsideration was denied by the NLRC in a Resolution dated 29 October 1992, As already stated, the Labor Code recognizes retrenchment as one of the
they filed a petition for certiorari before this Honorable Court, docketed as G.R. authorized causes for terminating the employer-employee relationship and the
No. 108259 (AG & P United Rank and File Association, et. al. vs. NLRC, et al.). In decision to retrench or not to retrench is a management prerogative.In the case
this case, the employees squarely raised the issue of the validity of AG & Ps at bar, the company losses were duly established by the financial statements
redundancy/retrenchment program as well as the validity of the termination of presented by both parties. As the NLRC (First Division) noted:
their employment.
In the case at bar, there is no question that respondents income had been
Subsequently, private respondents filed on 16 May 1989 their own complaint a continuously decreasing P205 million in 1984; P175 million in 1985 and P101
quo with [the] NLRC-NCR, where it was docketed as NLRC-NCR Case No. 00-05- million in 1986. In 1987, however, it declared a loss of P34 million.The declining
02295-89. They raised the same issues posed in the earlier complaints filed by trend in respondents income and losses in 1987 confirms its allegation that
their thirty six (36) co-employees. The complaint was filed at the time the respondent is predicting a bleak future considering the slump not only in
NLRCs Third Division already rendered its Resolution finding AG & Ps foreign contracts but with respect to domestic contracts as well. True enough,
retrenchment program as illegal and declaring it guilty of unfair labor practice respondent incurred further tremendous losses in 1990 in the amount
in dismissing the 36 complaining AG & P employees but before the NLRCs First of P176,181,505.00. In other words, the losses or abrupt down fall in income
Division set aside the same Resolution. which respondent wanted to abate by resorting to the reduction in the number
of employees was imminent and real.

53
Indeed, the records show that aside from its redundancy program, respondent respondent or its representatives. To the contrary, the employees waived their
company had to resort to other cost-cutting measures in order to stave off claims because of awareness of the precarious financial condition of the
impending losses. company as shown by a steady decline in its income. The documents embodied
reasonable settlements of the parties claims. As a matter of fact, the employees
Petitioners contend that the redundancy program was actually a union-busting received separation pay equivalent to one month pay for every year of service,
scheme of management, aimed at removing union officers who had declared a which was more than what they were entitled to receive under the law which
strike. This contention cannot stand in the face of evidence of substantial losses provides for separation pay equivalent to one month pay or one-half (1/2)
suffered by the company. Moreover, while it is true that the company rehired or month pay for every year of service, whichever is higher.[8]
reemployed some of the dismissed workers, it has been shown that such action
was made only as company projects became available and that this was done in xxx
pursuance of the companys policy of giving preference to its former workers in
the hiring of project employees. The rehiring or reemployment does not negate Private respondents contend that what we upheld in our aforementioned
the imminence to (sic) losses, which prompted private respondent to retrench. Decision is the legality of the redundancy program and not the legality of its
implementation. The claim is untenable. Suffice to quote our Decision:
Lastly, it is not disputed that petitioners signed documents of waiver which, in xxx
part, read:
In the case at bar, evidence of looses for the years 1987 up to 1990 was
belatedly introduced in the NLRC.But the delay was satisfactorily explained by
I do hereby further acknowledge and declare that I have been paid by the
respondent company, as the audit conducted on its financial report by Sycip
Atlantic Gulf and Pacific Company of Manila, Inc. all amounts due me by way of
Gorres Velayo and Co. was completed only in 1991. The additional evidence
compensation arising out in the course of my employment; and that this
presented confirmed private respondents allegation that the losses expected by
separation from the service has no relation whatsoever with my union
the company were substantial and reasonably imminent to justify the layoff of
affiliations or activities; that I admit the regularity of my separation and that I
the individual petitioners.
signed these presents after having fully understood its contents.
At this point, it is necessary to distinguish redundancy from retrenchment. Both
Petitioners insist that the documents are without any effect because quitclaims
are mentioned in Article 283 of the Labor Code as just causes for the closing of
and releases are contrary to public policy and, therefore, null and void. Not all
establishments or reduction of personnel. Redundancy exists when the services
quitclaims and releases are, however, contrary to public policy. As we have
of an employee are in excess of what is required by an
stated:
enterprise. Retrenchment, on the other hand, is one of the economic grounds for
dismissing employees and is resorted to primarily to avoid or minimize
Not all waivers and quitclaims are invalid as against public policy. If the business losses. Private respondents redundancy program, while denominated
agreement was voluntarily entered into and represents a reasonable settlement, as such, is more precisely termed retrenchment because it is primarily intended
it is binding on the parties and may not later be disowned simply because of a to prevent serious business losses.
change of mind. It is only where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or the terms of settlement are
As already stated, the Labor Code recognizes retrenchment as one of the
unconscionable on its face, that the law will step in to annul the questionable
authorized causes for terminating the employer-employee relationship and the
transaction. But where it is shown that the person making the waiver did so
decision to retrench or not to retrench is a management prerogative.In the case
voluntarily, with full understanding of what he was doing, and the consideration
at bar, the company losses were duly established by the financial statements
for the quitclaim is credible and reasonable, the transaction must be recognized
presented by both parties. x x x
as a valid and binding undertaking.
Petitioners contend that the redundancy program was actually a union-busting
In the case at bar, the documents of waiver were executed by the affected
scheme of management, aimed at removing union officers who had declared a
employees without any force or duress used against them by private
strike. This contention cannot stand in the face of evidence of substantial losses
54
suffered by the company. Moreover, while it is true that the company hired or
re-employed some of the dismissed workers, it has been shown that such action
was made only as company projects became available and that it was done in
pursuance of the companys policy of giving preference to its former workers in
the rehiring of project employees. The rehiring or re-employment does not
negate the imminence of losses, which prompted private respondents to
retrench.[9]

xxx
IN VIEW OF WHEREOF, the petition is GRANTED. The public respondents
Decision dated 30 September 1996 and Resolution dated December 6, 1996 are
SET ASIDE. The Temporary Restraining Order issued on 4 February 1998 is
made permanent. No costs.
SO ORDERED.

55

You might also like