Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 167760 March 7, 2007 MANILA JOCKEY CLUB EMPLOYEES LABOR UNION-PTGWO, Petitioner, vs. MANILA JOCKEY CLUB, INC., Respondent. D E C I S I O N GARCIA, J.: The facts: Petitioner Manila Jockey Club Employees Labor Union-PTGWO and respondent Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate and maintain horse races, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1996 to December 31, 2000. The CBA governed the economic rights and obligations of respondent’s regular monthly paid rank-and-file employees.3 In the CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday, as contained under Section 1, Article IV,4 of the same CBA, to wit: Section 1. Both parties to this Agreement agree to observe the seven- hour work schedule herewith scheduled to be from 9:00 a.m. to 12:00 noon and 1:00 p.m. to 5 p.m. on work week of Monday to Saturday. All work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered overtime and paid as such. Except those monthly compensation which includes work performed during Saturday, Sunday, and Holiday when races are held at the Club. xxx xxx xxx Accordingly, overtime on an ordinary working day shall be remunerated in an amount equivalent to the worker's regular basic wage plus
Petitioner Manila Jockey Club Employees Labor Union-PTGWO and respondent Manila Jockey Club, Inc., a corporation with a legislative franchise to conduct, operate and maintain horse races, entered into a Collective Bargaining Agreement (CBA) effective January 1, 1996 to December 31, 2000. The CBA governed the economic rights and obligations of respondent’s regular monthly paid rank-and-file employees.3 In the CBA, the parties agreed to a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. on a work week of Monday to Saturday, as contained under Section 1, Article IV,4 of the same CBA, to wit:
Section 1. Both parties to this Agreement agree to observe the seven-hour work schedule herewith scheduled to be from 9:00 a.m. to 12:00 noon and 1:00 p.m. to 5 p.m. on work week of Monday to Saturday. All work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered overtime and paid as such. Except those monthly compensation which includes work performed during Saturday, Sunday, and Holiday when races are held at the Club.
xxx xxx xxx
Accordingly, overtime on an ordinary working day shall be remunerated in an amount equivalent to the worker's regular basic wage plus twenty five percent (25%) thereof. Where the employee is permitted or suffered to work on legally mandated holidays or on his designated rest day which is not a legally mandated holiday, thirty percent (30%) shall be added to his basic wage for a seven hour work; while work rendered in excess of seven hours on legally mandated holidays and rest days not falling within the aforestated categories day shall be additionally compensated for the overtime work equivalent to his rate for the first seven hours on a legally mandated holiday or rest day plus thirty percent (30%) thereof.
The CBA likewise reserved in respondent certain management prerogatives, including the determination of the work schedule, as provided under Section 2, Article XI:
Section 2. The COMPANY shall have exclusive control in the management of the offices and direction
of the employees. This shall include, but shall not be limited to, the right to plan, direct and control office operations, to hire, assign and transfer employees from one job to another or from one department to another; to promote, demote, discipline, suspend, discharge or terminate employees for proper cause and/or in accordance with law, to relieve employees from duty because of lack of work or for other legitimate reasons; or to introduce new or improved methods or facilities; or to change existing methods or facilities to change the schedules of work; and to make and enforce rules and regulations to carry out the functions of management, provided, however, that the COMPANY will not use these rights for the purpose of discrimination against any employee because of his membership in the UNION. Provided, further, that the prerogatives provided for under this Section shall be subject to, and in accordance with pertinent directives, proclamations and their implementing rules and regulations.
On April 3, 1999, respondent issued an inter-office memorandum declaring that, effective April 20, 1999, the hours of work of regular monthly-paid employees shall be from 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The memorandum, however, maintained the 9:00 a.m. to 5:00 p.m. schedule for non-race days.
On October 12, 1999, petitioner and respondent entered into an Amended and Supplemental CBA retaining Section 1 of Article IV and Section 2 of Article XI, supra, and clarified that any conflict arising therefrom shall be referred to a voluntary arbitrator for resolution.
Subsequently, before a panel of voluntary arbitrators of the National Conciliation and Mediation Board (NCMB), petitioner questioned the above office memorandum as violative of the prohibition against non-diminution of wages and benefits guaranteed under Section 1, Article IV, of the CBA which specified the work schedule of respondent's employees to be from 9:00 a.m. to 5:00 p.m. Petitioner claimed that as a result of the memorandum, the employees are precluded from rendering their usual overtime work from 5:00 p.m. to 9:00 p.m.
The NCMB’s panel of voluntary arbitrators, in a decision dated October 18, 2001, upheld respondent's prerogative to change the work schedule of regular monthly-paid employees under Section 2, Article XI, of the CBA. Petitioner moved for reconsideration but the panel denied the motion.
Dissatisfied, petitioner then appealed the panel’s decision to the CA in CA-G.R. SP No. 69240. In the herein assailed decision of December 17, 2004, the CA upheld that of the panel and denied petitioner’s subsequent motion for reconsideration via its equally challenged resolution of April 4, 2005.
Hence, petitioner’s present recourse, raising the following issues:
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT MJCI DID NOT RELINQUISH PART OF ITS MANAGEMENT PREROGATIVE WHEN IT STIPULATED A WORK SCHEDULE IN THE CBA.
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT RESPONDENT MJCI DID NOT VIOLATE THE NON-DIMINUTION PROVISION CONTAINED IN ARTICLE 100 OF THE LABOR CODE.
We DENY.
Respondent, as employer, cites the change in the program of horse races as reason for the adjustment of the employees’ work schedule. It rationalizes that when the CBA was signed, the horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no other choice for management but to change the employees' work schedule as there was no work to be done in the morning. Evidently, the adjustment in the work schedule of the employees is justified.
We are not unmindful that every business enterprise endeavors to increase profits. As it is, the Court will not interfere with the business judgment of an employer in the exercise of its prerogative to devise means to improve its operation, provided that it does not violate the law, CBAs, and the general principles of justice and fair play. We have thus held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and discipline, dismissal, and recall of workers.5
While it is true that Section 1, Article IV of the CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays to Saturdays, Section 2, Article XI, however, expressly reserves on respondent the prerogative to change existing methods or facilities to change the schedules of work. As aptly ruled by the CA:
x x x. Such exact language lends no other meaning but that while respondent may have allowed the initial determination of the work schedule to be done through collective bargaining, it expressly retained the prerogative to change it.
Moreover, it cannot be said that in agreeing to Section 1 of Article IV, respondent already waived that customary prerogative of management to set the work schedule. Had that been the intention, Section 2 of Article XI would not have made any reference at all to the retention by respondent of that prerogative. The CBA would have instead expressly prohibited respondent from exercising it. x x x As it were, however, the CBA expressly recognized in respondent the prerogative to change the work schedule. This effectively rules out any notion of waiver on the part of respondent of its prerogative to change the work schedule.
The same provision of the CBA also grants respondent the prerogative to relieve employees from duty because of lack of work. Petitioner’s argument, therefore, that the change in work schedule violates Article 100 of the Labor Code because it resulted in the diminution of the benefit enjoyed by regular monthly-paid employees of rendering overtime work with pay, is untenable. Section 1, Article IV, of the CBA does not guarantee overtime work for all the employees but merely provides that "all work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered overtime and paid as such.".5
While it is true that Section 1, Article IV of the CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays to Saturdays, Section 2, Article XI, however, expressly reserves on respondent the prerogative to change existing methods or facilities to
change the schedules of work. As aptly ruled by the CA:
x x x. Such exact language lends no other meaning but that while respondent may have allowed the initial determination of the work schedule to be done through collective bargaining, it expressly retained the prerogative to change it.
Moreover, it cannot be said that in agreeing to Section 1 of Article IV, respondent already waived that customary prerogative of management to set the work schedule. Had that been the intention, Section 2 of Article XI would not have made any reference at all to the retention by respondent of that prerogative. The CBA would have instead expressly prohibited respondent from exercising it. x x x As it were, however, the CBA expressly recognized in respondent the prerogative to change the work schedule. This effectively rules out any notion of waiver on the part of respondent of its prerogative to change the work schedule.
The same provision of the CBA also grants respondent the prerogative to relieve employees from duty because of lack of work. Petitioner’s argument, therefore, that the change in work schedule violates Article 100 of the Labor Code because it resulted in the diminution of the benefit enjoyed by regular monthly-paid employees of rendering overtime work with pay, is untenable. Section 1, Article IV, of the CBA does not guarantee overtime work for all the employees but merely provides that "all work performed in excess of seven (7) hours work schedule and on days not included within the work week shall be considered overtime and paid as such."
Respondent was not obliged to allow all its employees to render overtime work everyday for the whole year, but only those employees whose services were needed after their regular working hours and only upon the instructions of management. The overtime pay was not given to each employee consistently, deliberately and unconditionally, but as a compensation for additional services rendered. Thus, overtime pay does not fall within the definition of benefits under Article 100 of the Labor Code on prohibition against elimination or diminution of benefits.
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be presumed that every labor dispute will be automatically decided in favor of labor. The partiality for labor has not in any way diminished our belief that justice in every case is for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.6
WHEREFORE, the instant petition is DENIED and the assailed decision and resolution of the CA are AFFIRMED.
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNOChief Justice
Footnote
1 Penned by Associate Justice Godardo A. Jacinto and concurred in by Associate Justices Edgardo P. Cruz and Jose Catral Mendoza; Rollo, pp. 23-30.
2 Id. at 32-33.
3 Sec. 1. Appropriate Bargaining Unit. The appropriate bargaining unit covered by this Agreement consists of all regular monthly paid rank-and file employees employed by the Company to work Monday to Friday, and, in certain instances, also on Saturdays when races are not held at the Club. Consequently, supervisory personnel, security guards, temporary and/or probationary personnel, and especially the hundred of workers and employees working in the Club on weekend when races are held therein, are understood to be outside the Scope of this Agreement. x x x; id. at 35.
4 Id. at 37.
5 United Kimberly-Clark Employees Union-Philippine Transport General Workers' Organization (UKCEU-PTGWO) v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March 6, 2006, 484 SCRA 187.
6 Abella v. Philippine Long Distance Telephone Company, G.R. No. 159469, June 8, 2005, 459 SCRA 724.
LIGHT RAIL TRANSIT AUTHORITY, Petitioner, vs.PERFECTO H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C. RAMOS, SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G. ALINAS, RAMON D. LOFRANCO, AMADOR H.POLICARPIO, REYNALDO B. GENER, and BIENVENIDO G. ARPILLEDA, Respondents.
x-----------------------------x
G.R. No. 163881 March 24, 2006
METRO TRANSIT ORGANIZATION, INC., Petitioner, vs.COURT OF APPEALS, PERFECTO H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C. RAMOS, SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G. ALINAS, RAMON D. LOFRANCO, AMADOR H. POLICARPIO, and REYNALDO B. GENER, Respondents.
D E C I S I O N
PUNO, J.:
Before us are the consolidated petitions of Light Rail Transit Authority (LRTA) and Metro Transit Organization, Inc. (METRO), seeking the reversal of the Decision of the Court of Appeals directing them to reinstate private respondent workers to their former positions without loss of seniority and other rights and privileges, and ordering them to jointly and severally pay the latter their full back wages, benefits, and moral damages. The LRTA and METRO were also ordered to jointly and severally pay attorney’s fees equivalent to ten percent (10%) of the total money judgment.
Petitioner LRTA is a government-owned and controlled corporation created by Executive Order No. 603, Series of 1980, as amended, to construct and maintain a light rail transit system and provide the commuting public with an efficient, economical, dependable and safe transportation. Petitioner METRO, formerly Meralco Transit Organization, Inc., was a qualified transportation corporation duly organized in accordance with the provisions of the Corporation Code, registered with the Securities and Exchange Commission, and existing under Philippine laws.
It appears that petitioner LRTA constructed a light rail transit system from Monumento in Kalookan City to Baclaran in Parañaque, Metro Manila. To provide the commuting public with an efficient and dependable light rail transit system, petitioner LRTA, after a bidding process, entered into a ten (10)-year Agreement for the Management and Operation of the Metro Manila Light Rail Transit System from June 8, 1984 until June 8, 1994 with petitioner METRO.1The Agreement provided, among others, that –
1. Effective on the COMMENCEMENT DATE, METRO shall accept and take over from the AUTHORITY [LRTA] the management, maintenance and operation of the commissioned and tested portion of the [Light Rail Transit] System x x x [par. 2.02];
2. The AUTHORITY [LRTA] shall pay METRO the MANAGEMENT FEE as follows x x x [par. 5.01];
3. In rendering these services, METRO shall apply its best skills and judgment, in attaining the objectives of the [Light Rail Transit] System in accordance with accepted professional standards. It shall exercise the required care, diligence and efficiency in the discharge of its duties and responsibilities and shall work for the best interest of the [Light Rail Transit] System and the AUTHORITY [LRTA] [par. 2.03];
4. METRO shall be free to employ such employees and officers as it shall deem necessary in order to carry out the requirements of [the] Agreement. Such employees and officers shall be the employees of METRO and not of the AUTHORITY [LRTA]. METRO shall prepare a compensation schedule and the corresponding salaries and fringe benefits of [its] personnel in consultation with the AUTHORITY [LRTA] [par. 3.05];
5. METRO shall likewise hold the AUTHORITY [LRTA] free and harmless from any and all fines, penalties, losses and liabilities and litigation expenses incurred or suffered on account of and by reason of death, injury, loss or damage to passengers and third persons, including the employees and representatives of the AUTHORITY [LRTA], except where such death, injury, loss or damage is attributable to a defect or deficiency in the design of the system or its equipment [par. 3.06].
Pursuant to the above Agreement, petitioner METRO hired its own employees, including herein private respondents. Petitioner METRO thereafter entered into a collective bargaining agreement with Pinag-isang Lakas ng Manggagawa sa METRO, Inc. – National Federation of Labor, otherwise known as PIGLAS-METRO, INC. – NFL – KMU (Union), the certified exclusive collective bargaining representative of the rank-and-file employees of petitioner METRO.
Meanwhile, on June 9, 1989, petitioners LRTA and METRO executed a Deed of Sale where petitioner LRTA purchased the shares of stocks in petitioner METRO.2However, petitioners LRTA and METRO continued with their distinct and separate juridical personalities. Hence, when the above ten (10)-year Agreement expired on June 8, 1994, they renewed the same, initially on a yearly basis, and subsequently on a monthly basis.
On July 25, 2000, the Union filed a Notice of Strike with the National Conciliation and Mediation Board – National Capital Region against petitioner METRO on account of a deadlock in the collective bargaining negotiation. On the same day, the Union struck. The power supply switches in the different light rail transit substations were turned off. The members of the Union picketed the various substations. They completely paralyzed the operations of the entire light rail transit system. As the strike adversely affected the mobility of the commuting public, then Secretary of Labor Bienvenido E. Laguesma issued on that same day an assumption of jurisdiction order3directing all the striking employees "to return to work immediately upon receipt of this Order and for the Company to accept them back under the same terms and conditions of employment prevailing prior to the strike."4
In their memorandum,5Department of Labor and Employment Sheriffs Feliciano R. Orihuela, Jr., and Romeo P. Lemi reported to Sec. Laguesma that they tried to personally serve the Order of assumption of jurisdiction to the Union through its officials and members on July 26, 2000, but the latter refused to receive the same. The sheriffs thus posted the Order in the different stations/terminals of the light rail
transit system. Further, the Order of assumption of jurisdiction was published on the July 27, 2000 issues of the Philippine Daily Inquirer6and the Philippine Star.7
Despite the issuance, posting, and publication of the assumption of jurisdiction and return to work order, the Union officers and members, including herein private respondent workers, failed to return to work. Thus, effective July 27, 2000, private respondents, Perfecto Venus, Jr., Bienvenido P. Santos, Jr., Rafael C. Roy, Nancy C. Ramos, Salvador A. Alfon, Noel R. Santos, Manuel A. Ferrer, Salvador G. Alinas, Ramon D. Lofranco, Amador H. Policarpio, Reynaldo B. Gener, and Bienvenido G. Arpilleda, were considered dismissed from employment.
In the meantime, on July 31, 2000, the Agreement for the Management and Operation of the Metro Manila Light Rail Transit System between petitioners LRTA and METRO expired. The Board of Directors of petitioner LRTA decided not to renew the contract with petitioner METRO and directed the LRTA management instead to immediately take over the management and operation of the light rail transit system to avert the mass transportation crisis.
On October 10, 2000, private respondents Venus, Jr., Santos, Jr., and Roy filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC) and impleaded both petitioners LRTA and METRO. Private respondents Ramos, Alfon, Santos, Ferrer, Alinas, Lofranco, Policarpio, Gener, and Arpilleda follwed suit on December 1, 2000.
On October 1, 2001, Labor Arbiter Luis D. Flores rendered a consolidated judgment in favor of the private respondent workers8–
WHEREFORE, judgment is hereby rendered in favor of the complainants and against the respondents, as follows:
1. Declaring that the complainants were illegally dismissed from employment and ordering their reinstatement to their former positions without loss of seniority and other rights and privileges.
2. Ordering respondents Metro Transit Organization, Inc. and Light Rail Transit Authority to jointly and severally pay the complainants their other benefits and full backwages, which as of June 30, 2001 are as follows:
3. Ordering respondents Metro Transit Organization, Inc. and Light Rail Transit Authority to jointly and severally pay each of the complainants the amount of P50,000.00 as moral damages.
4. Ordering respondents Metro Transit Organization, Inc. and Light Rail Transit Authority to jointly and severally pay the complainants attorney’s fees equivalent to ten percent (10%) of the total money judgment.
SO ORDERED.
The complaint filed by Bienvenido G. Arpilleda, although initially consolidated with the main case, was eventually dropped for his failure to appear and submit any document and position paper.9
On May 29, 2002, on appeal, the NLRC found that the striking workers failed to heed the return to work order and reversed and set aside the decision of the labor arbiter. The suit against LRTA was dismissed since "LRTA is a government-owned and controlled corporation created by virtue of Executive Order No. 603 with an original charter"10and "it ha[d] no participation whatsoever with the termination of complainants’ employment."11In fine, the cases against the LRTA and METRO were dismissed, respectively, for lack of jurisdiction and for lack of merit.
On December 3, 2002, the NLRC denied the workers’ Motion for Reconsideration "[t]here being no showing that the Commission committed, (and that) the Motion for Reconsideration was based on, palpable or patent errors, and the fact that (the) said motion is not under oath."
On a petition for certiorari however, the Court of Appeals reversed the NLRC and reinstated the Decision rendered by the Labor Arbiter. Public respondent appellate court declared the workers’ dismissal as illegal, pierced the veil of separate corporate personality and held the LRTA and METRO as jointly liable for back wages.
Hence, these twin petitions for review on certiorari of the decision of public respondent appellate court filed by LRTA and METRO which this Court eventually consolidated.
In the main, petitioner LRTA argues that it has no employer-employee relationship with private respondent workers as they were hired by petitioner METRO alone pursuant to its ten (10)-year Agreement for the Management and Operation of the Metro Manila Light Rail Transit System with petitioner METRO. Private respondent workers recognized that their employer was not petitioner LRTA when their certified exclusive collective bargaining representative, the Pinag-isang Lakas ng Manggagawa sa METRO, Inc. – National Federation of Labor, otherwise known as PIGLAS-METRO, INC. – NFL – KMU, entered into a collective bargaining agreement with petitioner METRO. Piercing the corporate veil of METRO was unwarranted, as there was no competent and convincing evidence of any wrongful, fraudulent or unlawful act on the part of METRO, and, more so, on the part of LRTA.
Petitioner LRTA further contends that it is a government-owned and controlled corporation with an original charter, Executive Order No. 603, Series of 1980, as amended, and thus under the exclusive jurisdiction only of the Civil Service Commission, not the NLRC.
Private respondent workers, however, submit that petitioner METRO was not only fully-owned by petitioner LRTA, but all aspects of its operations and administration were also strictly controlled, conducted and directed by petitioner LRTA. And since petitioner METRO is a mere adjunct, business conduit, and alter ego of petitioner LRTA, their respective corporate veils must be pierced to satisfy the money claims of the illegally dismissed private respondent employees.
We agree with petitioner LRTA. Section 2 (1), Article IX – B, 1987 Constitution, expressly provides that "[t]he civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters." Corporations with original charters are those which have been created by special law and not through the general corporation law. Thus, in Philippine National Oil Company – Energy Development Corporation v. Hon. Leogrado, we held that "under the present state of the law, the test in determining whether a government-owned or controlled corporation is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage."12There should be no dispute then that employment in petitioner LRTA should be governed only by civil service rules, and not the Labor Code and beyond the reach of the Department of Labor and Employment, since petitioner LRTA is a government-owned and controlled corporation with an original charter, Executive Order No. 603, Series of 1980, as amended.
In contrast, petitioner METRO is covered by the Labor Code despite its later acquisition by petitioner LRTA. In Lumanta v. National Labor Relations Commission,13this Court ruled that labor law claims against government-owned and controlled corporations without original charter fall within the jurisdiction of the Department of Labor and Employment and not the Civil Service Commission. Petitioner METRO was originally organized under the Corporation Code, and only became a government-owned and controlled corporation after it was acquired by petitioner LRTA. Even then, petitioner METRO has no original charter, hence, it is the Department of Labor and Employment, and not the Civil Service Commission, which has jurisdiction over disputes arising from the employment of its workers. Consequently, the terms and conditions of such employment are governed by the Labor Code and not by the Civil Service Rules and Regulations.
We therefore hold that the employees of petitioner METRO cannot be considered as employees of petitioner LRTA. The employees hired by METRO are covered by the Labor Code and are under the jurisdiction of the Department of Labor and Employment, whereas the employees of petitioner LRTA, a government-owned and controlled corporation with original charter, are covered by civil service rules. Herein private respondent workers cannot have the best of two worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to strike as private employees under our labor laws. Department of Justice Opinion No. 108, Series of 1999, issued by then Secretary of Justice Serafin R. Cuevas on whether or not employees of petitioner METRO could go on strike is persuasive –
We believe that METRO employees are not covered by the prohibition against strikes applicable to employees embraced in the Civil Service. It is not disputed, but in fact conceded, that METRO employees are not covered by the Civil Service. This being so, METRO employees are not covered by the Civil Service law, rules and regulations but are covered by the Labor Code and, therefore, the rights and prerogatives granted to private employees thereunder, including the right to strike, are available to them.
Moreover, as noted by Secretary Benjamin E. Diokno, of the Department of Budget and Management,
in his letter dated February 22, 1999, the employees of METRO are not entitled to the government amelioration assistance authorized by the President pursuant to Administrative Order No. 37 for government employees, because the employees of METRO are not government employees since Metro, Inc. "could not be considered as GOCC as defined under Section 3 (b) of E.O. 518 x x x x"14
Indeed, there was never an intention to consider the employees of petitioner METRO as government employees of petitioner LRTA as well – neither from the beginning, nor until the end. Otherwise, they could have been easily converted from being employees in the private sector and absorbed as government employees covered by the civil service when petitioner LRTA acquired petitioner METRO in 1989. The stubborn fact is that they remained private employees with rights and prerogatives granted to them under the Labor Code, including the right to strike, which they exercised and from which the instant dispute arose.
We likewise hold that it is inappropriate to pierce the corporate veil of petitioner METRO. In Del Rosario v. National Labor Relations Commission, we ruled that "[u]nder the law a corporation is bestowed juridical personality, separate and distinct from its stockholders. But when the juridical personality of the corporation is used to defeat public convenience, justify wrong, protect fraud or defend crime, the corporation shall be considered as a mere association of persons, and its responsible officers and/or stockholders shall be held individually liable. For the same reasons, a corporation shall be liable for the obligations of a stockholder, or a corporation and its successor-in-interest shall be considered as one and the liability of the former shall attach to the latter. But for the separate juridical personality of a corporation to be disregarded, the wrongdoing must be clearly and convincingly established. It cannot be presumed."15In Del Rosario, we also held that the "substantial identity of the incorporators of the two corporations does not necessarily imply fraud."16
In the instant case, petitioner METRO, formerly Meralco Transit Organization, Inc., was originally owned by the Manila Electric Company and registered with the Securities and Exchange Commission more than a decade before the labor dispute. It then entered into a ten-year agreement with petitioner LRTA in 1984. And, even if petitioner LRTA eventually purchased METRO in 1989, both parties maintained their separate and distinct juridical personality and allowed the agreement to proceed. In 1990, this Court, in Light Rail Transit Authority v. Commission on Audit, even upheld the validity of the said agreement.17Consequently, the agreement was extended beyond its ten-year period. In 1995, METRO’s separate juridical identity was again recognized when it entered into a collective bargaining agreement with the workers’ union. All these years, METRO’s distinct corporate personality continued quiescently, separate and apart from the juridical personality of petitioner LRTA.
The labor dispute only arose in 2000, after a deadlock occurred during the collective bargaining between petitioner METRO and the workers’ union. This alone is not a justification to pierce the corporate veil of petitioner METRO and make petitioner LRTA liable to private respondent workers. There are no badges of fraud or any wrongdoing to pierce the corporate veil of petitioner METRO.
On this point, the Department of Justice Opinion No. 108, Series of 1999, issued by then Secretary of Justice Serafin R. Cuevas is once again apropos:
Anent the issue of piercing the corporate veil, it was held in Concept Builders, Inc. v. NLRC (G.R. No. 108734, May 29, 1996, 257 SCRA 149, 159) that the test in determining the applicability of the doctrine of piercing the veil of corporate fiction is as follows:
"1. Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff’s legal rights; and
3. The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.
The absence of any one of these elements prevents ‘piercing the corporate veil.’ In applying the ‘instrumentality’ or ‘alter ego’ doctrine, the courts are concerned with reality and not form, with how the corporation operated and the individual defendant’s relationship to that operation."
Here, the records do not show that control was used to commit a fraud or wrong. In fact, it appears that piercing the corporate veil for the purpose of delivery of public service, would lead to a confusing situation since the outcome would be that Metro will be treated as a mere alter ego of LRTA, not having a separate corporate personality from LRTA, when dealing with the issue of strike, and a separate juridical entity not covered by the Civil Service when it comes to other matters. Under the Constitution, a government corporation is either one with original charter or one without original charter, but never both.18
In sum, petitioner LRTA cannot be held liable to the employees of petitioner METRO.
With regard the issue of illegal dismissal, petitioner METRO maintains that private respondent workers were not illegally dismissed but should be deemed to have abandoned their jobs after defying the assumption of jurisdiction and return-to-work order issued by the Labor Secretary. Private respondent workers, on the other hand, submit that they could not immediately return to work as the light rail transit system had ceased its operations.
We find for the private respondent workers. In Batangas Laguna Tayabas Bus Co. v. National Labor Relations Commission,19 we said that the five-day period for the strikers to obey the Order of the Secretary of Justice and return to work was not sufficient as "some of them may have left Metro Manila and did not have enough time to return during the period given by petitioner, which was only five days."20 In Batangas Laguna Tayabas Bus Co.,21 we further held –
The contention of the petitioner that the private respondents abandoned their position is also not acceptable. An employee who forthwith takes steps to protest his lay-off cannot by any logic be said to have abandoned his work.
For abandonment to constitute a valid cause for termination of employment, there must be a deliberate, unjustified refusal of the employee to resume his employment. This refusal must be clearly established. As we stressed in a recent case, mere absence is not sufficient; it must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore.
In the instant case, private respondent workers could not have defied the return-to-work order of the
Secretary of Labor simply because they were dismissed immediately, even before they could obey the said order. The records show that the assumption of jurisdiction and return-to-work order was issued by Secretary of Labor Bienvenido E. Laguesma on July 25, 2000. The said order was served and posted by the sheriffs of the Department of Labor and Employment the following day, on July 26, 2000. Further, the said order of assumption of jurisdiction was duly published on July 27, 2000, in the Philippine Daily Inquirer and the Philippine Star. On the same day also, on July 27, 2000, private respondent workers were dismissed. Neither could they be considered as having abandoned their work. If petitioner METRO did not dismiss the strikers right away, and instead accepted them back to work, the management agreement between petitioners LRTA and METRO could still have been extended and the workers would still have had work to return to.
IN VIEW WHEREOF, the Decision of public respondent Court of Appeals is AFFIRMED insofar as it holds Metro Transit Organization, Inc. liable for the illegal dismissal of private respondents and orders it to pay them their benefits and full back wages and moral damages. Further, Metro Transit Organization, Inc. is ordered to pay attorney’s fees equivalent to ten percent (10%) of the total money judgment. The petition of the Light Rail Transit Authority is GRANTED, and the complaint filed against it for illegal dismissal is DISMISSED for lack of merit.
SO ORDERED.
REYNATO S. PUNOAssociate Justice
WE CONCUR:
ANGELINA SANDOVAL-GUTIERREZ Associate Justice
RENATO C. CORONAAssociate Justice
ADOLFO S. AZCUNAAsscociate Justice
CANCIO C. GARCIAAssociate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNOAssociate JusticeChairman
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
ARTEMIO V. PANGANIBANChief Justice
Footnotes
1 Rollo, G.R. No. 163782, pp. 35 – 72, 384 – 421.
2 Id., pp. 339 – 342.
3 Id., G.R. No. 163881, pp. 214 -215.
4 Ibid.
5 Id., G.R. No. 163881, p. 216.
6 Business Section, p. B2.
7 Business Section, p. 19.
8 Decision of the Labor Arbiter, pp. 15 – 16.
9 Id., pp. 14 – 15.
10 Decision of the First Division of the NLRC, penned by Presiding Commissioner Roy V. Señeres and concurred in by Commissioners Vicente S.E. Veloso and Alberto R. Quimpo, p. 6.
11 Ibid.
12 G.R. No. 58494, 5 July 1989, 175 SCRA 26, 30. See also Tanjay Water District v. Gabaton, G.R. No. 63742, 17 April 1989, 172 SCRA 253, and Republic v. Court of Appeals, G.R. No. 87676, 20 December 1989, 180 SCRA 428.
LOLITA LOPEZ, petitioner, vs.BODEGA CITY (Video-Disco Kitchen of the Philippines) and/or ANDRES C. TORRES-YAP, respondents.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the July 18, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 66861, dismissing the petition for certiorari filed before it and affirming the Decision of the National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 00-03-01729-95; and its Resolution dated October 16, 2002,2 denying petitioner's Motion for Reconsideration. The NLRC Decision set aside the Decision of the Labor Arbiter finding that Lolita Lopez (petitioner) was illegally dismissed by Bodega City and/or Andres C. Torres-Yap (respondents).
Respondent Bodega City (Bodega City) is a corporation duly registered and existing under and by virtue of the laws of the Republic of the Philippines, while respondent Andres C. Torres-Yap (Yap) is its owner/ manager. Petitioner was the "lady keeper" of Bodega City tasked with manning its ladies' comfort room.
In a letter signed by Yap dated February 10, 1995, petitioner was made to explain why the concessionaire agreement between her and respondents should not be terminated or suspended in view of an incident that happened on February 3, 1995, wherein petitioner was seen to have acted in a hostile manner against a lady customer of Bodega City who informed the management that she saw petitioner sleeping while on duty.
In a subsequent letter dated February 25, 1995, Yap informed petitioner that because of the incident that happened on February 3, 1995, respondents had decided to terminate the concessionaire agreement between them.
On March 1, 1995, petitioner filed with the Arbitration Branch of the NLRC, National Capital Region, Quezon City, a complaint for illegal dismissal against respondents contending that she was dismissed from her employment without cause and due process.
In their answer, respondents contended that no employer-employee relationship ever existed between them and petitioner; that the latter's services rendered within the premises of Bodega City was by virtue of a concessionaire agreement she entered into with respondents.
The complaint was dismissed by the Labor Arbiter for lack of merit. However, on appeal, the NLRC set aside the order of dismissal and remanded the case for further proceedings. Upon remand, the case was assigned to a different Labor Arbiter. Thereafter, hearings were conducted and the parties were required to submit memoranda and other supporting documents.
On December 28, 1999, the Labor Arbiter rendered judgment finding that petitioner was an employee of respondents and that the latter illegally dismissed her.3
Respondents filed an appeal with the NLRC. On March 22, 2001, the NLRC issued a Resolution, the dispositive portion of which reads as follows:
WHEREFORE, premises duly considered, the Decision appealed from is hereby ordered SET ASIDE and VACATED, and in its stead, a new one entered DISMISSING the above-entitled case for lack of merit.4
Petitioner filed a motion for reconsideration of the above-quoted NLRC Resolution, but the NLRC denied the same.
Aggrieved, petitioner filed a Petition for Certiorari with the CA. On July 18, 2002, the CA promulgated the presently assailed Decision dismissing her special civil action for certiorari. Petitioner moved for reconsideration but her motion was denied.
Hence, herein petition based on the following grounds:
1. WITH DUE RESPECT, PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RULING THAT THE NATIONAL LABOR RELATIONS COMMISSION DID NOT COMMIT GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE LABOR ARBITER FINDING PETITIONER TO HAVE BEEN ILLEGALLY DISMISSED BY PRIVATE RESPONDENTS.
2. WITH DUE RESPECT, PUBLIC RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RULING THAT PETITIONER WAS NOT AN EMPLOYEE OF PRIVATE RESPONDENTS.5
Petitioner contends that it was wrong for the CA to conclude that even if she did not sign the document evidencing the concessionaire agreement, she impliedly accepted and thus bound herself to the terms and conditions contained in the said agreement when she continued to perform the task which was allegedly specified therein for a considerable length of time. Petitioner claims that the concessionaire agreement was only offered to her during her tenth year of service and after she organized a union and filed a complaint against respondents. Prior to all these, petitioner asserts that her job as a "lady keeper" was a task assigned to her as an employee of respondents.
Petitioner further argues that her receipt of a special allowance from respondents is a clear evidence that she was an employee of the latter, as the amount she received was equivalent to the minimum wage at that time.
Petitioner also contends that her identification card clearly shows that she was not a concessionaire but an employee of respondents; that if respondents really intended the ID card issued to her to be used simply for having access to the premises of Bodega City, then respondents could have clearly indicated such intent on the said ID card.
Moreover, petitioner submits that the fact that she was required to follow rules and regulations prescribing appropriate conduct while she was in the premises of Bodega City is clear evidence of the existence of an employer-employee relationship between her and petitioners.
On the other hand, respondents contend that the present petition was filed for the sole purpose of delaying the proceedings of the case; the grounds relied upon in the instant petition are matters that have been exhaustively discussed by the NLRC and the CA; the present petition raises questions of fact which are not proper in a petition for review on certiorari under Rule 45 of the Rules of Court; the respective decisions of the NLRC and the CA are based on evidence presented by both parties; petitioner's compliance with the terms and conditions of the proposed concessionaire contract for a period of three years is evidence of her implied acceptance of such proposal; petitioner failed to present evidence to prove her allegation that the subject concessionaire agreement was only proposed to her in her 10th year of employment with respondent company and after she organized a union and filed a labor complaint against respondents; petitioner failed to present competent documentary and testimonial evidence to prove her contention that she was an employee of respondents since 1985.
The main issue to be resolved in the present case is whether or not petitioner is an employee of respondents.
The issue of whether or not an employer-employee relationship exists in a given case is essentially a question of fact.6
While it is a settled rule that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions,7 there are well-recognized exceptions to this rule, as in this case, when the factual findings of the NLRC as affirmed by the CA contradict those of the Labor Arbiter.8 In that event, it is this Court's task, in the exercise of its equity jurisdiction, to re-evaluate and review the factual issues by looking into the records of the case and re-examining the questioned findings.9
It is a basic rule of evidence that each party must prove his affirmative allegation.10 If he claims a right granted by law, he must prove his claim by competent evidence, relying on the strength of his own evidence and not upon the weakness of that of his opponent.11
The test for determining on whom the burden of proof lies is found in the result of an inquiry as to which party would be successful if no evidence of such matters were given.12
In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause.13 However, before a case for illegal dismissal can prosper, an employer-employee relationship must first be established.14
In filing a complaint before the Labor Arbiter for illegal dismissal based on the premise that she was an employee of respondent, it is incumbent upon petitioner to prove the employee-employer relationship by substantial evidence.15
The NLRC and the CA found that petitioner failed to discharge this burden, and the Court finds no cogent reason to depart from their findings.
The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and Parts Corp.,16 to wit:
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, the last one is the most important. The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.17
To prove the element of payment of wages, petitioner presented a petty cash voucher showing that she received an allowance for five (5) days.18 The CA did not err when it held that a solitary petty cash voucher did not prove that petitioner had been receiving salary from respondents or that she had been respondents' employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of time, she should have been able to present salary vouchers or pay slips and not just a single petty cash voucher. The Court agrees with respondents that petitioner could have easily shown other pieces of evidence such as a contract of employment, SSS or Medicare forms, or certificates of withholding tax on compensation income; or she could have presented witnesses to prove her contention that she was an employee of respondents. Petitioner failed to do so.
Anent the element of control, petitioner's contention that she was an employee of respondents because she was subject to their control does not hold water.
Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar as the manner in which she should perform her job as a "lady keeper" was concerned.
It is true that petitioner was required to follow rules and regulations prescribing appropriate conduct while within the premises of Bodega City. However, this was imposed upon petitioner as part of the terms and conditions in the concessionaire agreement embodied in a 1992 letter of Yap addressed to petitioner, to wit:
January 6, 1992
Dear Ms. Lolita Lopez,
The new owners of Bodega City, 1121 Food Service Corporation offers to your goodself the
concessionaire/contract to provide independently, customer comfort services to assist users of the ladies comfort room of the Club to further enhance its business, under the following terms and conditions:
1. You will provide at your own expense, all toilet supplies, useful for the purpose, such as toilet papers, soap, hair pins, safety pins and other related items or things which in your opinion is beneficial to the services you will undertake;
2. For the entire duration of this concessionaire contract, and during the Club's operating hours, you shall maintain the cleanliness of the ladies comfort room. Provided, that general cleanliness, sanitation and physical maintenance of said comfort rooms shall be undertaken by the owners of Bodega City;
3. You shall at all times ensure satisfaction and good services in the discharge of your undertaking. More importantly, you shall always observe utmost courtesy in dealing with the persons/individuals using said comfort room and shall refrain from doing acts that may adversely affect the goodwill and business standing of Bodega City;
4. All remunerations, tips, donations given to you by individuals/persons utilizing said comfort rooms and/or guests of Bodega City shall be waived by the latter to your benefit provided however, that if concessionaire receives tips or donations per day in an amount exceeding 200% the prevailing minimum wage, then, she shall remit fifty percent (50%) of said amount to Bodega City by way of royalty or concession fees;
5. This contract shall be for a period of one year and shall be automatically renewed on a yearly basis unless notice of termination is given thirty (30) days prior to expiration. Any violation of the terms and conditions of this contract shall be a ground for its immediate revocation and/or termination.
6. It is hereby understood that no employer-employee relationship exists between Bodega City and/or 1121 FoodService Corporation and your goodself, as you are an independent contractor who has represented to us that you possess the necessary qualification as such including manpower compliment, equipment, facilities, etc. and that any person you may engage or employ to work with or assist you in the discharge of your undertaking shall be solely your own employees and/or agents.
1121 FoodService Corporation Bodega City
By: (Sgd.) ANDRES C. TORRES-YAP
Conforme:
_______________LOLITA LOPEZ19
Petitioner does not dispute the existence of the letter; neither does she deny that respondents offered her the subject concessionaire agreement. However, she contends that she could not have entered into the
said agreement with respondents because she did not sign the document evidencing the same.
Settled is the rule that contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made by the offeror.20 For a contract, to arise, the acceptance must be made known to the offeror.21 Moreover, the acceptance of the thing and the cause, which are to constitute a contract, may be express or implied as can be inferred from the contemporaneous and subsequent acts of the contracting parties.22 A contract will be upheld as long as there is proof of consent, subject matter and cause; it is generally obligatory in whatever form it may have been entered into.23
In the present case, the Court finds no cogent reason to disregard the findings of both the CA and the NLRC that while petitioner did not affix her signature to the document evidencing the subject concessionaire agreement, the fact that she performed the tasks indicated in the said agreement for a period of three years without any complaint or question only goes to show that she has given her implied acceptance of or consent to the said agreement.
Petitioner is likewise estopped from denying the existence of the subject concessionaire agreement. She should not, after enjoying the benefits of the concessionaire agreement with respondents, be allowed to later disown the same through her allegation that she was an employee of the respondents when the said agreement was terminated by reason of her violation of the terms and conditions thereof.
The principle of estoppel in pais applies wherein -- by one's acts, representations or admissions, or silence when one ought to speak out -- intentionally or through culpable negligence, induces another to believe certain facts to exist and to rightfully rely and act on such belief, so as to be prejudiced if the former is permitted to deny the existence of those facts.24
Moreover, petitioner failed to dispute the contents of the affidavit25 as well as the testimony26 of Felimon Habitan (Habitan), the concessionaire of the men's comfort room of Bodega City, that he had personal knowledge of the fact that petitioner was the concessionaire of the ladies' comfort room of Bodega City.
Petitioner also claims that the concessionaire agreement was offered to her only in her 10th year of service, after she organized a union and filed a complaint against respondents. However, petitioner's claim remains to be an allegation which is not supported by any evidence. It is a basic rule in evidence that each party must prove his affirmative allegation,27 that mere allegation is not evidence.28
The Court is not persuaded by petitioner's contention that the Labor Arbiter was correct in concluding that there existed an employer-employee relationship between respondents and petitioner. A perusal of the Decision29 of the Labor Arbiter shows that his only basis for arriving at such a conclusion are the bare assertions of petitioner and the fact that the latter did not sign the letter of Yap containing the proposed concessionaire agreement. However, as earlier discussed, this Court finds no error in the findings of the NLRC and the CA that petitioner is deemed as having given her consent to the said proposal when she continuously performed the tasks indicated therein for a considerable length of time. For all intents and purposes, the concessionaire agreement had been perfected.
Petitioner insists that her ID card is sufficient proof of her employment. In Domasig v. National Labor Relations Commission,30 this Court held that the complainant's ID card and the cash vouchers covering his salaries for the months indicated therein were substantial evidence that he was an employee of respondents, especially in light of the fact that the latter failed to deny said evidence. This is not the
situation in the present case. The only evidence presented by petitioner as proof of her alleged employment are her ID card and one petty cash voucher for a five-day allowance which were disputed by respondents.
As to the ID card, it is true that the words "EMPLOYEE'S NAME" appear printed below petitioner's name.31 However, she failed to dispute respondents' evidence consisting of Habitan's testimony,32 that he and the other "contractors" of Bodega City such as the singers and band performers, were also issued the same ID cards for the purpose of enabling them to enter the premises of Bodega City.
The Court quotes, with approval, the ruling of the CA on this matter, to wit:
Nor can petitioners identification card improve her cause any better. It is undisputed that non-employees, such as Felimon Habitan, an admitted concessionaire, musicians, singers and the like at Bodega City are also issued identification cards. Given this premise, it appears clear to Us that petitioner's I.D. Card is incompetent proof of an alleged employer-employee relationship between the herein parties. Viewed in the context of this case, the card is at best a "passport" from management assuring the holder thereof of his unmolested access to the premises of Bodega City.33
With respect to the petty cash voucher, petitioner failed to refute respondent's claim that it was not given to her for services rendered or on a regular basis, but simply granted as financial assistance to help her temporarily meet her family's needs.
Hence, going back to the element of control, the concessionaire agreement merely stated that petitioner shall maintain the cleanliness of the ladies' comfort room and observe courtesy guidelines that would help her obtain the results they wanted to achieve. There is nothing in the agreement which specifies the methods by which petitioner should achieve these results. Respondents did not indicate the manner in which she should go about in maintaining the cleanliness of the ladies' comfort room. Neither did respondents determine the means and methods by which petitioner could ensure the satisfaction of respondent company's customers. In other words, petitioner was given a free hand as to how she would perform her job as a "lady keeper." In fact, the last paragraph of the concessionaire agreement even allowed petitioner to engage persons to work with or assist her in the discharge of her functions.34
Moreover, petitioner was not subjected to definite hours or conditions of work. The fact that she was expected to maintain the cleanliness of respondent company's ladies' comfort room during Bodega City's operating hours does not indicate that her performance of her job was subject to the control of respondents as to make her an employee of the latter. Instead, the requirement that she had to render her services while Bodega City was open for business was dictated simply by the very nature of her undertaking, which was to give assistance to the users of the ladies' comfort room.
In Consulta v. Court of Appeals,35 this Court held:
It should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that gives untrammeled freedom to the party hired and
eschews any intervention whatsoever in his performance of the engagement.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.36
Lastly, the Court finds that the elements of selection and engagement as well as the power of dismissal are not present in the instant case.
It has been established that there has been no employer-employee relationship between respondents and petitioner. Their contractual relationship was governed by the concessionaire agreement embodied in the 1992 letter. Thus, petitioner was not dismissed by respondents. Instead, as shown by the letter of Yap to her dated February 15, 1995,37 their contractual relationship was terminated by reason of respondents' termination of the subject concessionaire agreement, which was in accordance with the provisions of the agreement in case of violation of its terms and conditions.
In fine, the CA did not err in dismissing the petition for certiorari filed before it by petitioner.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner.
1 Penned by Justice Cancio C. Garcia (now a member of this Court) and concurred in by Justices Marina L. Buzon and Eliezer R. de los Santos; rollo, p. 26.
2 CA rollo, p. 452.
3 Rollo, p. 113.
4 CA rollo, p. 16.
5 Rollo, p. 18.
6 Manila Water Company, Inc. v. Peña , G.R. No. 158255, July 8, 2004, 434 SCRA 53, 58.
7 Mitsubishi Motors Philippines Corporation v. Chrysler Philippines Labor Union , G.R. No. 148738, June 29, 2004, 433 SCRA 206, 217.
35 G.R. No. 145443, March 18, 2005, 453 SCRA 732 citing Insular Life Assurance Co., Ltd. v. National Labor Relations Commission, G.R. No. 84484, November 15, 1989, 175 SCRA 459.
36 Consulta v. Court of Appeals, id. at 740.
37 CA rollo, p. 184.
Republic of the PhilipppinesSUPREME COURTManila
THIRD DIVISION
[G.R. No. 148508. May 20, 2004]
R TRANSPORT CORPORATION, Petitioner, vs. ROGELIO EJANDRA, Respondent.
D E C I S I O N
CORONA, J.:chanroblesvirtuallawlibrary
Before us is a petition for review of the decision[1] of the Court of Appeals[2] dated December 22, 2000 dismissing the petition for certiorari of the decision of the National Labor Relations Commission[3] (NLRC) dated May 30, 1997. The latter affirmed the decision[4] of the labor arbiter dated February 27, 1997 holding petitioner liable for illegal dismissal and directing private respondents reinstatement.chanroblesvirtuallawlibrary
Private respondent Rogelio Ejandra alleged that, for almost six years, from July 15, 1990 to January 31, 1996, he worked as a bus driver of petitioner R Transport Corporation. He plied the route Muntilupa-Alabang-Malanday-Monumento-UE-Letre-Sangandaan from 5:00 a.m. up to 2:00 a.m. the next day and was paid 10% of his daily earnings.chanroblesvirtuallawlibrary
On January 31, 1996, an officer of the Land Transportation Office (LTO), Guadalupe Branch, Makati City, apprehended him for obstruction of traffic for which his license was confiscated. Upon his arrival at petitioners garage, he immediately reported the incident to his manager, Mr. Oscar Pasquin, who gave him P500 to redeem his license. The following day, he went to LTO, Guadalupe Branch, to claim
it but he was told that it had not yet been turned over by the officer who apprehended him. He was able to retrieve his license only after a week.chanroblesvirtuallawlibrary
On February 8, 1996, private respondent informed Mr. Pasquin that he was ready to report for work. However, he was told that the company was still studying whether to allow him to drive again. Private respondent was likewise accused of causing damage to the bus he used to drive. Denying the charge, private respondent blamed the person who drove the said bus during his absence, considering that the damage was sustained during the week that he did not drive the bus. Mr. Pacquin nonetheless told him Magpahinga ka muna at tatawagin ka na lang namin kung kailangan ka na para magmaneho. Magbakasyon ka muna, bata. When respondent asked how long he had to rest, the manager did not give a definite time.chanroblesvirtuallawlibrary
Petitioner denied private respondents allegations and claimed that private respondent, a habitual absentee, abandoned his job. To belie private respondents allegation that his license had been confiscated, petitioner asserted that, had it been true, he should have presented an apprehension report and informed petitioner of his problems with the LTO. But he did not. Petitioner further argued that private respondent was not an employee because theirs was a contract of lease and not of employment, with petitioner being paid on commission basis.chanroblesvirtuallawlibrary
On February 23, 1997, labor arbiter Rogelio Yulo rendered his decision in favor of private respondent. The dispositive portion of the decision read:chanroblesvirtuallawlibrary
PREMISES CONSIDERED, judgment is hereby rendered finding the dismissal of Rogelio Ejandra to be without just cause and, therefore, illegal and ORDERING R-Transport to REINSTATE him to his former position without loss of seniority and other benefits and to pay him backwages from the time of his dismissal until actual reinstatement. chanroblesvirtuallawlibrary
SO ORDERED.[5] chanroblesvirtuallawlibrary
Labor arbiter Yulo gave no weight to petitioners claim that private respondent abandoned his work. His one-week absence did not constitute abandonment of work considering that it took him the whole week to reclaim his license. Private respondent could not retrieve it unless and until the apprehending officer first transmitted it to their office. His inability to drive for petitioner that whole week was therefore not his fault and petitioner could be held liable for illegal dismissal. Due process was not accorded to private respondent who was never given the opportunity to contest the charge of abandonment.Moreover, assuming actual abandonment, petitioner should have reported such fact to the nearest employment office of the Department of Labor and Employment. But no such report was ever made. chanroblesvirtuallawlibrary
On May 30, 1997, the NLRC rendered a decision affirming the decision of the labor arbiter:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the appeal is hereby DISMISSED and the appealed decision AFFIRMED in toto. chanroblesvirtuallawlibrary
SO ORDERED.[6] chanroblesvirtuallawlibrary
In disputing petitioners claim that private respondent was not its employee and was not therefore
entitled to notice and hearing before termination, the NLRC held that:chanroblesvirtuallawlibrary
It is very clear that (sic) from no less than appellants admission, that complainant was not afforded his right to due process prior to the severance of his employment with respondents. (First par. p.3, respondents Appeal Memorandum, p. 45, Rollo)chanroblesvirtuallawlibrary
Appellants defense of denying the existence of employer-employee relationship with the complainant based on the manner by which complainant was being paid his salary, cannot hold water. chanroblesvirtuallawlibrary
xxx xxx xxxchanroblesvirtuallawlibrary
While employees paid on piece-rate and commission basis are not covered by the provisions of the Labor Code, as amended, on hours of work, these employees however, for all intents and purposes, are employees of their employers. chanroblesvirtuallawlibrary
xxxxxxxxx[7]chanroblesvirtuallawlibrary
Petitioner filed in the Court of Appeals a petition for certiorari on the ground that the NLRC committed grave abuse of discretion in affirming the decision of the labor arbiter. On December 22, 2000, the Court of Appeals rendered a decision, the dispositive portion of which read:chanroblesvirtuallawlibrary
WHEREFORE, the instant petition is hereby DENIED for lack of merit.chanroblesvirtuallawlibrary
SO ORDERED.[8]chanroblesvirtuallawlibrary
Categorizing the issues raised by petitioner as factual, the appellate court held that the findings of fact of the labor arbiter (affirmed by the NLRC) were entitled to great respect because they were supported by substantial evidence. The Court of Appeals also ruled that petitioner was barred from denying the existence of an employer-employee relationship because petitioner invoked its rights under the law and jurisprudence as an employer in dismissing private respondent.chanroblesvirtuallawlibrary
Hence, this appeal based on the following assignments of errors:chanroblesvirtuallawlibrary
Achanroblesvirtuallawlibrary
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS, TENTH DIVISION COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT AFFIRMED/ADOPTED IN TOTO THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) BASED PURELY ON A SPECULATION, SURMISE OR CONJECTURE. chanroblesvirtuallawlibrary
Bchanroblesvirtuallawlibrary
THE FINDINGS OF FACTS ARE MERE CONCLUSIONS WITHOUT CITATION OR SPECIFIC EVIDENCE ON WHICH THEY ARE BASED. chanroblesvirtuallawlibrary
FURTHER, THE HONORABLE COURT OF APPEALS, TENTH DIVISION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT RULING THAT THE RELATIONSHIP IN LAW OCCURRING BETWEEN THE PETITIONER R TRANSPORT CORPORATION AND THE PRIVATE RESPONDENT WAS IN A NATURE OF LESSOR AND LESSEE.chanroblesvirtuallawlibrary
Dchanroblesvirtuallawlibrary
MOREOVER, THERE IS A NEED BY THIS HONORABLE COURT TO GIVE A SECOND LOOK ON THE RECORDS OF NLRC NCR CASE RAB NO. IV-2-7910-R / NLRC NCR CA-012-605-97 TO AVOID MISCARRIAGE OF JUSTICE AND FURTHERANCE OF THE STATUTORY REQUIREMENTS OF DUE PROCESS. chanroblesvirtuallawlibrary
Echanroblesvirtuallawlibrary
FINALLY, THE HONORABLE COURT OF APPEALS, TENTH DIVISION GRAVELY ERRED IN DENYING THE PETITION IN CA-G.R. SP. NO. 51962 IN ITS DECISION PROMULGATED ON DECEMBER 22, 2000 (ANNEXES G AND G-1) AND IN ITS RESOLUTION DATED JUNE 4, 2001 (ANNEX B), HAS ACTED CONTRARY TO LAW AND THE RULES OF COURT.[9] chanroblesvirtuallawlibrary
According to the petitioner, the appellate court erred in not finding that private respondent abandoned his work; that petitioner was not the lessor of private respondent; that, as such, the termination of the contract of lease of services did not require petitioner to respect private respondents rights to notice and hearing; and, that private respondents affidavit was hearsay and self-serving.chanroblesvirtuallawlibrary
We deny the appeal.chanroblesvirtuallawlibrary
Under Section 1, Rule 45 of the 1997 Rules of Civil Procedure, a petition for review shall only raise questions of law considering that the findings of fact of the Court of Appeals are, as a general rule, conclusive upon and binding on this Court.[10] This doctrine applies with greater force in labor cases where the factual findings of the labor tribunals are affirmed by the Court of Appeals. The reason is because labor officials are deemed to have acquired expertise in matters within their jurisdiction and therefore, their factual findings are generally accorded not only respect but also finality, and are binding on this Court.[11]chanroblesvirtuallawlibrary
In the case at bar, the labor arbiter,the NLRC and the Court of Appeals were unanimous in finding that private respondent worked as a driver of one of the buses of petitioner and was paid on a 10% commission basis. After he was apprehended for a traffic violation, his license was confiscated. When he informed petitioners general manager of such fact, the latter gave him money to redeem his license. He went to the LTO office everyday but it was only after a week that he was able to get back his license. When he reported back to work, petitioners manager told him to wait until his services were needed again. Considering himself dismissed, private respondent filed a complaint for illegal dismissal against petitioner.chanroblesvirtuallawlibrary
We have no reason to disturb all these factual findings because they are amply supported by substantial evidence.chanroblesvirtuallawlibrary
Denying the existence of an employer-employee relationship, petitioner insists that the parties agreement was for a contract of lease of services. We disagree. Petitioner is barred to negate the existence of an employer-employee relationship. In its petition filed before this Court, petitioner invoked our rulings on the right of an employer to dismiss an employee for just cause.[12] Petitioner maintained that private respondent was justifiably dismissed due to abandonment of work. By adopting said rulings, petitioner impliedly admitted that it was in fact the employer of private respondent. According to the control test, the power to dismiss an employee is one of the indications of an employer-employee relationship.[13] Petitioners claim that private respondent was legally dismissed for abandonment was in fact a negative pregnant:[14] an acknowledgement that there was no mutual termination of the alleged contract of lease and that private respondent was its employee. The fact that petitioner paid private respondent on commission basis did not rule out the presence of an employee-employer relationship. Article 97(f) of the Labor Code clearly provides that an employees wages can be in the form of commissions.chanroblesvirtuallawlibrary
We now ask the next question: was private respondent, an employee of petitioner, dismissed for just cause? We do not think so.chanroblesvirtuallawlibrary
According to petitioner, private respondent abandoned his job and lied about the confiscation of his license. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason and (2) a clear intention to sever the employer-employee relationship. Of the two, the second element is the more determinative factor and should be manifested by some overt acts. Mere absence is not sufficient. It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.[15]chanroblesvirtuallawlibrary
In the instant case, petitioner fell short of proving the requisites. To begin with, petitioners absence was justified because the LTO, Guadalupe Branch, did not release his license until after a week. This was the unanimous factual finding of the labor tribunals and the Court of Appeals. As aptly held by labor arbiter Yulo, the process of redeeming a confiscated license, based on common experience, depended on when the apprehending officer turned over the same. Second, private respondent never intended to sever his employment as he in fact reported for work as soon as he got his license back. Petitioner offered no evidence to rebut these established facts. Third, labor arbiter Yulo correctly observed that, if private respondent really abandoned his work, petitioner should have reported such fact to the nearest Regional Office of the Department of Labor and Employment in accordance with Section 7, Rule XXIII, Book V of Department Order No. 9, series of 1997[16] (Rules Implementing Book V of the Labor Code). Petitioner made no such report. chanroblesvirtuallawlibrary
In addition to the fact that petitioner had no valid cause to terminate private respondent from work, it violated the latters right to procedural due process by not giving him the required notice and hearing. Section 2, Rule XXIII, Book V of Department Order No. 9 provides for the procedure for dismissal for just or authorized cause:chanroblesvirtuallawlibrary
SEC. 2. Standards of due process; requirement of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed:chanroblesvirtuallawlibrary
I. For termination of employment based on just causes as defined in Article 282 of the Code:chanroblesvirtuallawlibrary
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;chanroblesvirtuallawlibrary
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; andchanroblesvirtuallawlibrary
(c ) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address.chanroblesvirtuallawlibrary
II. For termination of employment as based on authorized causes defined in Article 283 of the Code, the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty days before the effectivity of the termination, specifying the ground or grounds for termination. chanroblesvirtuallawlibrary
III. If termination is brought about by the completion of the contract or phase thereof, no prior notice is required. If the termination is brought about by the failure of an employee to meet the standards of the employer in case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the petition is hereby DENIED. Costs against the petitioner.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
Vitug, (Chairman and Acting Chief Justice), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.
[15]Id. at 215-216. Namely: Noel R. Acedilla, Joel F. Ada, Ernesto S. Alcantara, Nomer R. Altarejos, Manuel P. Banzon, Roberto P. Blando, Wenifredo P. Blando, Nelio M. Cantiga, Nonito I. Dula, Dante D. Dumape, Felix D. Dumape, Jr., Juanito S. Guillermo, Eduardo C. Gultia, Rodolfo D. Lim, Elezar P. Mellejor, Danilo B. Noble, Robert S. Opelina, Leoncio O. Racasa, Loreta R. Rafol, Fernando R. Rebucas and Mercedes Toldo (widow of Rolando Toldo who died on 8 May 2000).
[16]Id. at 180-181.
[17]Rollo, pp. 182-206. Petition for Review on Certiorari.
[28]Art. 286. When employment not deemed terminated.—The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military service or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer from his relief from the military or civic duty.
[29]Rules of Court, Rule 1, Sec. 5.
[30]Vlason Enterprises Corporation, v. CA, 369 Phil. 269, 304 (1999) citing Contech Construction Technology & Development Corp. v. Court of Appeals, 211 SCRA 692, 695-697, 23 July 1992.
[34]Philippine Bank of Communications v. Court of Appeals, G.R. No. 92067, 22 March 1991, 195 SCRA 567, 573, reiterating Asia Banking Corporation v. Walter E. Olsen & Co. 48 Phil 529.
[35]Ateneo de Naga University et al. v. Manalo, G.R. No. 160455, 9 May 2005, 458 SCRA 325, citing Torres v. Specialized Packaging Development Corporation, G.R. No. 149634, 6 July 2004, 434 SCRA 455.
[36]Rollo, p. 210.
[37]PASUDECO v. NLRC, 339 Phil. 120, 127 (1997).
[38]Precision Electronics Corporation v. NLRC, G.R. No. 86657, 23 October 1989, 178 SCRA 667, 670.
[39]Sps. Ampeloquio, Sr. et al. v. CA, 389 Phil. 13 (2000).
[40]G.R. No. L-80737, 29 September 1988, 166 SCRA 118.
[41]Explanatory Bulletin on the Effect of Reduction of Workdays on Wages/Living Allowances, signed by Director Augusto G. Sanchez, dated 23 July 1985.
[50]Tanjuan v. Phil. Postal Savings Bank, Inc., 457 Phil. 993, 1009 (2003), reiterating Bogo-Medellin Sugarcane Planters Association, Inc. v. NLRC, 357 Phil. 110, 120, 25 September 1998.
[51]CA rollo, p. 36.
[52]CA rollo, pp. 79-81. Computed by the Research and Information Unit of the NLRC, dated 24 February 2000. Names of the 21 workers executing the waivers and quitclaims are excluded.
[53]The special civil action of certiorari being the proper vehicle for judicial review of decisions of the NLRC: See St. Martin Funeral Home v. NLRC, 356 Phil. 811 (1998).
[54]Supra note 51. Made by the Research and Information Unit of the NLRC, dated 24 February 2000.
[55]Supra note 13. Dated 28 January 2000
epublic of the PhilippinesSUPREME COURT
Manila
THIRD DIVISION
G. R. No. 144664 - March 15, 2004
ASIAN TRANSMISSION CORPORATION, Petitioner,
vs.
The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as Director of Bureau of Working Conditions, Respondents.
D E C I S I O N
CARPIO-MORALES, J.:
Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000 Decision1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993 "Explanatory Bulletin"2 of the Department of Labor and Employment (DOLE) entitled "Workers Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and 3) the September 18, 19984 Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration.
The following facts, as found by the Court of Appeals, are undisputed:
The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads:
"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan.
Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998, the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis and underscoring supplied)
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and
(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election,
which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now:
1. New Years Day January 1
2. Maundy Thursday Movable Date
3. Good Friday Movable Date
4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
5. Labor Day May 1
6. Independence Day June 12
7. National Heroes Day Last Sunday of August
8. Bonifacio Day November 30
9. Christmas Day December 25
10. Rizal Day December 30
In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."
In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated."5
The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor."
By the present petition, petitioners raise the following issues:
I
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES
II
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN
III
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE
IV
WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW
V
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY
VI
WHETHER OR NOT RESPONDENTS ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS
The petition is devoid of merit.
At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65.
[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the
appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration.
x x x
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy.6
The records of the case show that following petitioners receipt on August 18, 2000 of a copy of the August 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having expired.
Technicality aside, this Court finds no ground to disturb the assailed decision.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."8 It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance.
Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays.9 The provision is mandatory,10 regardless of whether an employee is paid on a monthly or daily basis.11 Unlike a bonus, which is a management prerogative,12 holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.
It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says.13 In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.
Petitioners assertion that Wellington v. Trajano14 has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees are
entitled to an additional days pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day.15
In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working mans welfare should be the primordial and paramount consideration.16
Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy."17
From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following provision:
ARTICLE XIVPAID LEGAL HOLIDAYS
The following legal holidays shall be paid by the COMPANY as required by law:
1. New Years Day (January 1st)
2. Holy Thursday (moveable)
3. Good Friday (moveable)
4. Araw ng Kagitingan (April 9th)
5. Labor Day (May 1st)
6. Independence Day (June 12th)
7. Bonifacio Day [November 30]
8. Christmas Day (December 25th)
9. Rizal Day (December 30th)
10. General Election designated by law, if declared public non-working holiday
11. National Heroes Day (Last Sunday of August)
Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay.
A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave.
Under similar circumstances, the COMPANY will give a days wage for November 1st and December 31st whenever declared a holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof.18
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Vitug, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.
Endnotes:
1 Rollo at 3951.
2 Rollo at 37.
3 Rollo at 58-70.
4 Rollo at 120.
5 Rollo at 48.
6 San Miguel Corporation v. Court of Appeals, G.R. No. 146775, January 30, 2002, 375 SCRA 311, 315, citing National
Irrigation Administration v. Court of Appeals, G.R. No. 129169, November 17, 1999, 318 SCRA, 263-264.
7 Const., Art. XIII, Sec. 3.
8 Vide Jose Rizal College v. NLRC and NATOW, G.R. No. 65482, December 1, 1987.
9 Vide Book V, Title I of Pres. Decree No. 1083, "Code of Muslim Personal Laws of the Philippines," (February 4, 1977) which recognizes the official Muslim holidays.
10 Art. 94 of the Labor Code provides by way of exception retail and service establishments regularly employing less than ten (10) workers.
11 Insular Bank of Asia and America Employees Union (IBAAEU) v. Inciong, No. L-52415, October 23, 1984, 132 SCRA 663; Chartered Bank Employees Association v. Ople, No. L-44717, August 28, 1985, 138 SCRA 273; Mantrade/FMMC Division Employees and Workers Union v. Bacungan, No. L-48437, September 30, 1986, 144 SCRA 510.
12 Producers Bank of the Philippines v. NLRC, G.R. No. 100701, March 28, 2001, 355 SCRA
489, 496.
13 Insular Bank of Asia and America Employees Union (IBAAEU) v. Inciong, G.R. No. L-52415, October 23, 1984, 132 SCRA 663, 673.
14 Wellington Investment and Manufacturing Corporation v. Trajano, G.R. No. 114698, July 3, 1995, 245 SCRA 561.
16 Abella v. NLRC, G.R. No. 71812, July 20, 1987, 152 SCRA 140, 146.
17 Vide Oceanic Pharmacal Employees Union v. Inciong, No. L-50568, 94 SCRA 270, 275.
18 Rollo at 8.
Republic of the Philippines SUPREME COURT
Manila
FIRST DIVISION
[G.R. No. 152427. August 9, 2005]
INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and GLEN SOLON, Respondents.
D E C I S I O N
QUISUMBING, J.:
This petition for review assails the Decision[1] dated October 30, 2001 of the Court of Appeals and its Resolution[2] dated February 28, 2002 in CA-G.R. SP No. 60136, denying the petitioner's motion for reconsideration for lack of merit. The decision affirmed the National Labor Relations Commission (NLRC) which declared private respondent Glen Solon a regular employee of the petitioner and awarded him 13th month pay, service incentive leave pay, reinstatement to his former position with full backwages from the time his salary was withheld until his reinstatement.
Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients.[3]chanroblesvirtuallawlibrary
Private respondent Solon worked for petitioner. His employment records is as follows:
December 14, 1994 up to January 14, 1995 St. Charbel WarehouseFebruary 1, 1995 up to April 30, 1995 St. Charbel WarehouseMay 23, 1995 up to June 23, 1995 St. Charbel WarehouseAugust 15, 1995 up to October 31, 1995 St. Charbel WarehouseNovember 2, 1995 up to January 31, 1996 St. Charbel WarehouseMay 13, 1996 up to June 15, 1996 Ayala TriangleAugust 27, 1996 up to November 30, 1996 St. Charbel Warehouse[4]July 14, 1997 up to November 1997 ICPWI WarehouseNovember 1997 up to January 5, 1998 Cathedral Heights
January 6, 1998 Rockwell Center[5]chanroblesvirtuallawlibrary
On February 23, 1998, while private respondent was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. When private respondent went to the petitioner's office on February 24, 1998 to verify his status, he found out that indeed, he had been terminated. He went back to petitioner's office on February 27, 1998 to sign a clearance so he could claim his 13th month pay and tax refunds. However, he had second thoughts and refused to sign the clearance when he read the clearance indicating he had resigned. On March 6, 1998, he filed a complaint alleging that he was illegally dismissed without just cause and without due process.[6]chanroblesvirtuallawlibrary
In a Decision dated February 26, 1999, the Labor Arbiter ruled that private respondent was a regular employee and could only be removed for cause. Petitioner was ordered to reinstate private respondent to his former position with full backwages from the time his salary was withheld until his actual reinstatement, and pay him service incentive leave pay, and 13th month pay for three years in the amount of P2,880 and P14,976, respectively.
Petitioner appealed to the National Labor Relations Commission (NLRC), which ruled:
WHEREFORE, prescinding from the foregoing and in the interest of justice, the decision of the Labor Arbiter is hereby AFFIRMED with a MODIFICATION that the 13th month pay should be given only for the year 1997 and portion of 1998. Backwages shall be computed from the time he was illegally dismissed up to the time of his actual reinstatement. Likewise, service incentive leave pay for three (3) years is also awarded to appellee in the amount of P2,880.00.
SO ORDERED.[7]chanroblesvirtuallawlibrary
Petitioner's Motion for Reconsideration was denied.[8]chanroblesvirtuallawlibrary
Petitioner appealed to the Court of Appeals, alleging that the NLRC committed grave abuse of discretion in finding that the private respondent was a regular employee and in awarding 13 th month pay, service incentive leave pay, and holiday pay to the private respondent despite evidence of payment. The said petition was dismissed for lack of merit.[9]chanroblesvirtuallawlibrary
Before us now, petitioner raises the following issues: (1) Whether the respondent is a project employee of the petitioner or a regular employee; and (2) Whether the Court of Appeals erred seriously in awarding 13th month pay for the entire year of 1997 and service incentive leave pay to the respondent and without taking cognizance of the evidence presented by petitioner.[10]chanroblesvirtuallawlibrary
The petitioner asserts that the private respondent was a project employee. Thus, when the project was completed and private respondent was not re-assigned to another project, petitioner did not violate any law since it was petitioner's discretion to re-assign the private respondent to other projects.[11]chanroblesvirtuallawlibrary
Article 280 of the Labor Code states:
The provisions of written agreement of the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season (Italics supplied.)
We held in Tomas Lao Construction v. NLRC [12] that the principal test in determining whether an employee is a 'project employee or 'regular employee, is, whether he is assigned to carry out a 'specific project or undertaking, the duration (and scope) of which are specified at the time the employee is engaged in the project.[13] 'Project refers to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times.[14]chanroblesvirtuallawlibrary
In our review of the employment contracts of private respondent, we are convinced he was initially a project employee. The services he rendered, the duration and scope of each project are clear indications that he was hired as a project employee.
We concur with the NLRC that while there were several employment contracts between private respondent and petitioner, in all of them, private respondent performed tasks which were usually necessary or desirable in the usual business or trade of petitioner. A review of private respondent's work assignments patently showed he belonged to a work pool tapped from where workers are and assigned whenever their services were needed. In a work pool, the workers do not receive salaries and are free to seek other employment during temporary breaks in the business. They are like regular seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is beneficial to both the employer and employee for it prevents the unjust situation of 'coddling labor at the expense of capital and at the same time enables the workers to attain the status of regular employees.[15] 'Nonetheless, the pattern of re-hiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioner's business or trade.[16]chanroblesvirtuallawlibrary
In Maraguinot, Jr. v. NLRC [17] we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.
In this case, did the private respondent become a regular employee then?
The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business.[18] Thus, we held that where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees.[19]chanroblesvirtuallawlibrary
While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a
project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioner's business.[20] Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order.[21]chanroblesvirtuallawlibrary
Further, Policy Instructions No. 20 requires employers to submit a report of an employee's termination to the nearest public employment office every time his employment was terminated due to a completion of a project. The failure of the employer to file termination reports is an indication that the employee is not a project employee.[22] Department Order No. 19 superseding Policy Instructions No. 20 also expressly provides that the report of termination is one of the indications of project employment.[23] In the case at bar, there was only one list of terminated workers submitted to the Department of Labor and Employment.[24] If private respondent was a project employee, petitioner should have submitted a termination report for every completion of a project to which the former was assigned.
Juxtaposing private respondent's employment history, vis the requirements in the test to determine if he is a regular worker, we are constrained to say he is.
As a regular worker, private respondent is entitled to security of tenure under Article 279 of the Labor Code[25] and can only be removed for cause. We found no valid cause attending to private respondent's dismissal and found also that his dismissal was without due process.
Additionally, Article 277(b) of the Labor Code provides that
... Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment
The failure of the petitioner to comply with these procedural guidelines renders its dismissal of private respondent, illegal. An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and to his other benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement, pursuant to Article 279 of the Labor Code.
However, we note that the private respondent had been paid his 13th month pay for the year 1997. The Court of Appeals erred in granting the same to him.
Article 95(a) of the Labor Code governs the award of service incentive leave. It provides that every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay, and Section 3, Rule V, Book III of the Implementing Rules and Regulations, defines the term 'at least one year of service to mean service within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working days in the establishment as a matter of practice
or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. Accordingly, private respondent's service incentive leave credits of five days for every year of service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be computed up to the date of reinstatement pursuant to Article 279 of the Labor Code.[26]chanroblesvirtuallawlibrary
WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of the Court of Appeals in CA-G.R. SP No. 60136, are AFFIRMED with MODIFICATION. The petitioner is hereby ORDERED to (1) reinstate the respondent with no loss of seniority rights and other privileges; and (2) pay respondent his backwages, 13th month pay for the year 1998 and Service Incentive Leave Pay computed from the date of his illegal dismissal up to the date of his actual reinstatement. Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
Endnotes:
[1] Rollo, pp. 36-44. Penned by Associate Justice Marina L. Buzon, with Associate Justices Buenaventura J. Guerrero, and Alicia L. Santos concurring.cralaw
[2] Id. at 46-47.cralaw
[3] Id. at 17.cralaw
[4] Ibid.cralaw
[5] CA Rollo, pp. 20-22.cralaw
[6] Id. at 20-21.cralaw
[7] Rollo, p. 38.cralaw
[8] Ibid.cralaw
[9] Id. at 38-43.cralaw
[10] Id. at 20, 27.cralaw
[11] Id. at 27.cralaw
[12] G.R. No. 116781, 5 September 1997, 278 SCRA 716, 726, citing ALU-TUCP v. National Labor Relations Commission, G.R. No. 109902, 2 August 1994, 234 SCRA 678, 685.cralaw
[13] Uy v. National Labor Relations Commission, G.R. No. 117983, 6 September 1996, 261 SCRA 505, 513.cralaw
[18] De Leon v. National Labor Relations Commission, G.R. No. 70705, 21 August 1989, 176 SCRA 615, 621.cralaw
[19] Tomas Lao Construction v. NLRC, supra, note 12 at 726.cralaw
[20] Id. at 726-727.cralaw
[21] Samson v. National Labor Relations Commission, G.R. No. 113166, 1 February 1996, 253 SCRA 112, 124.cralaw
[22] Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, 2 January 1997, 266 SCRA 48, 63-64; Philippine National Construction Corp. v. NLRC, G.R. No. 95816, 27 October 1992, 215 SCRA 204, 211; Philippine National Construction Corporation v. NLRC, G.R. No. 85323, 20 June 1989, 174 SCRA 191, 194; Ochoco v. National Labor Relations Commission, No. L-56363, 24 February 1983, 120 SCRA 774, 777.cralaw
[23] Tomas Lao Construction v. NLRC, supra, note 12 at 729-730, citing Sec. 2.2 (e), Department Order No. 19, April 1, 1993.cralaw
[24] Rollo, p. 18.cralaw
[25] ART. 279. Security of Tenure. ' In cases of regular employment, the employer shall 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 be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.cralaw
[26] Imbuido v. National Labor Relations Commission, G.R. No. 114734, 31 March 2000, 329 SCRA 357, 368.
epublic of the PhilipppinesSUPREME COURT
Manila
SECOND DIVISION
[G.R. No. 152456. April 28, 2004]
SEVILLA TRADING COMPANY, Petitioner, vs. A.V.A. TOMAS E. SEMANA, SEVILLA TRADING WORKERS UNIONSUPER, Respondents.
D E C I S I O N
PUNO, J.: chanroblesvirtuallawlibrary
On appeal is the Decision[1] of the Court of Appeals in CA-G.R. SP No. 63086 dated 27 November 2001 sustaining the Decision[2] of Accredited Voluntary Arbitrator Tomas E. Semana dated 13 November 2000, as well as its subsequent Resolution[3] dated 06 March 2002 denying petitioners Motion for Reconsideration.chanroblesvirtuallawlibrary
The facts of the case are as follows:chanroblesvirtuallawlibrary
For two to three years prior to 1999, petitioner Sevilla Trading Company (Sevilla Trading, for short), a domestic corporation engaged in trading business, organized and existing under Philippine laws, added to the base figure, in its computation of the 13th-month pay of its employees, the amount of other benefits received by the employees which are beyond the basic pay.These benefits included:chanroblesvirtuallawlibrary
(a)Overtime premium for regular overtime, legal and special holidays;chanroblesvirtuallawlibrary
(b)Legal holiday pay, premium pay for special holidays;chanroblesvirtuallawlibrary
(h)Company vacation and sick leave pay; andchanroblesvirtuallawlibrary
(i)Cash conversion of unused company vacation and sick leave.chanroblesvirtuallawlibrary
Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the computation and payment of the 13th-month pay and other benefits.When it changed its person in charge of the payroll in the process of computerizing its payroll, and after audit was conducted, it allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the computation of the 13th-month pay of its employees.It cited the Rules and Regulations Implementing P.D. No. 851 (13th-Month Pay Law), effective December 22, 1975, Sec. 2(b) which stated that:chanroblesvirtuallawlibrary
Basic salary shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances granted pursuant to P.D. No. 525 or Letter of Instruction No. 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.chanroblesvirtuallawlibrary
Petitioner then effected a change in the computation of the thirteenth month pay, as follows:chanroblesvirtuallawlibrary
13th-month pay = net basic paychanroblesvirtuallawlibrary 12 monthschanroblesvirtuallawlibrary
where:chanroblesvirtuallawlibrary
net basic pay = gross pay (non-basic pay or other benefits)chanroblesvirtuallawlibrary
Now excluded from the base figure used in the computation of the thirteenth month pay are the following:chanroblesvirtuallawlibrary
a)Overtime premium for regular overtime, legal and special holidays;chanroblesvirtuallawlibrary
b)Legal holiday pay, premium pay for special holidays;chanroblesvirtuallawlibrary
h)Company vacation and sick leave pay; andchanroblesvirtuallawlibrary
i)Cash conversion of unused vacation/sick leave.chanroblesvirtuallawlibrary
Hence, the new computation reduced the employees thirteenth month pay.The daily piece-rate workers represented by private respondent Sevilla Trading Workers Union SUPER (Union, for short), a duly organized and registered union, through the Grievance Machinery in their Collective Bargaining Agreement, contested the new computation and reduction of their thirteenth month pay.The parties failed to resolve the issue.chanroblesvirtuallawlibrary
On March 24, 2000, the parties submitted the issue of whether or not the exclusion of leaves and other related benefits in the computation of 13th-month pay is valid to respondent Accredited Voluntary Arbitrator Tomas E. Semana (A.V.A. Semana, for short) of the National Conciliation and Mediation Board, for consideration and resolution.chanroblesvirtuallawlibrary
The Union alleged that petitioner violated the rule prohibiting the elimination or diminution of employees benefits as provided for in Art. 100 of the Labor Code, as amended.They claimed that paid leaves, like sick leave, vacation leave, paternity leave, union leave, bereavement leave, holiday pay and other leaves with pay in the CBA should be included in the base figure in the computation of their 13 th-month pay.chanroblesvirtuallawlibrary
On the other hand, petitioner insisted that the computation of the 13 th-month pay is based on basic salary, excluding benefits such as leaves with pay, as per P.D. No. 851, as amended.It maintained that, in adjusting its computation of the 13th-month pay, it merely rectified the mistake its personnel committed in the previous years.chanroblesvirtuallawlibrary
A.V.A. Semana decided in favor of the Union.The dispositive portion of his Decision reads as follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, this Voluntary Arbitrator hereby declared that:chanroblesvirtuallawlibrary
1.The company is hereby ordered to include sick leave and vacation leave, paternity leave, union leave, bereavement leave and other leave with pay in the CBA, premium for work done on rest days and special holidays, and pay for regular holidays in the computation of the 13 th-month pay to all covered and entitled employees;chanroblesvirtuallawlibrary
2.The company is hereby ordered to pay corresponding backwages to all covered and entitled employees arising from the exclusion of said benefits in the computation of 13 th-month pay for the year 1999.chanroblesvirtuallawlibrary
Petitioner received a copy of the Decision of the Arbitrator on December 20, 2000.It filed before the Court of Appeals, a Manifestation and Motion for Time to File Petition for Certiorari on January 19, 2001.A month later, on February 19, 2001, it filed its Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure for the nullification of the Decision of the Arbitrator.In addition to its earlier allegations, petitioner claimed that assuming the old computation will be upheld, the reversal to the old computation can only be made to the extent of including non-basic benefits actually included by petitioner in the base figure in the computation of their 13th-month pay in the prior years.It must exclude those non-basic benefits which, in the first place, were not included in the original computation.The appellate court denied due course to, and dismissed the petition.chanroblesvirtuallawlibrary
Hence, this appeal.Petitioner Sevilla Trading enumerates the grounds of its appeal, as follows:chanroblesvirtuallawlibrary
1.THE DECISION OF THE RESPONDENT COURT TO REVERT TO THE OLD COMPUTATION OF THE 13TH-MONTH PAY ON THE BASIS THAT THE OLD COMPUTATION HAD RIPENED INTO PRACTICE IS WITHOUT LEGAL BASIS.chanroblesvirtuallawlibrary
2.IF SUCH BE THE CASE, COMPANIES HAVE NO MEANS TO CORRECT ERRORS IN COMPUTATION WHICH WILL CAUSE GRAVE AND IRREPARABLE DAMAGE TO EMPLOYERS.[4]chanroblesvirtuallawlibrary
First, we uphold the Court of Appeals in ruling that the proper remedy from the adverse decision of the arbitrator is a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, not a petition for certiorari under Rule 65.Section 1 of Rule 43 states:chanroblesvirtuallawlibrary
RULE 43chanroblesvirtuallawlibrary
Appeals from the Court of Tax Appeals andchanroblesvirtuallawlibrary
Quasi-Judicial Agencies to the Court of Appealschanroblesvirtuallawlibrary
SECTION 1.Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration,
Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. [Emphasis supplied.]chanroblesvirtuallawlibrary
It is elementary that the special civil action of certiorari under Rule 65 is not, and cannot be a substitute for an appeal, where the latter remedy is available, as it was in this case.Petitioner Sevilla Trading failed to file an appeal within the fifteen-day reglementary period from its notice of the adverse decision of A.V.A. Semana.It received a copy of the decision of A.V.A. Semana on December 20, 2000, and should have filed its appeal under Rule 43 of the 1997 Rules of Civil Procedure on or before January 4, 2001.Instead, petitioner filed on January 19, 2001 a Manifestation and Motion for Time to File Petition for Certiorari, and on February 19, 2001, it filed a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.Clearly, petitioner Sevilla Trading had a remedy of appeal but failed to use it.chanroblesvirtuallawlibrary
A special civil action under Rule 65 of the Rules of Court will not be a cure for failure to timely file a petition for review on certiorari under Rule 45 (Rule 43, in the case at bar) of the Rules of Court.Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45 (Rule 43, in the case at bar), especially if such loss or lapse was occasioned by ones own neglect or error in the choice of remedies.[5]chanroblesvirtuallawlibrary
Thus, the decision of A.V.A. Semana had become final and executory when petitioner Sevilla Trading filed its petition for certiorari on February 19, 2001.More particularly, the decision of A.V.A. Semana became final and executory upon the lapse of the fifteen-day reglementary period to appeal, or on January 5, 2001.Hence, the Court of Appeals is correct in holding that it no longer had appellate jurisdiction to alter, or much less, nullify the decision of A.V.A. Semana.chanroblesvirtuallawlibrary
Even assuming that the present petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a proper action, we still find no grave abuse of discretion amounting to lack or excess of jurisdiction committed by A.V.A. Semana.Grave abuse of discretion has been interpreted to mean such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, in other words where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[6] We find nothing of that sort in the case at bar.chanroblesvirtuallawlibrary
On the contrary, we find the decision of A.V.A. Semana to be sound, valid, and in accord with law and jurisprudence.A.V.A. Semana is correct in holding that petitioners stance of mistake or error in the computation of the thirteenth month pay is unmeritorious.Petitioners submission of financial statements every year requires the services of a certified public accountant to audit its finances.It is quite impossible to suggest that they have discovered the alleged error in the payroll only in 1999.This implies that in previous years it does not know its cost of labor and operations.This is merely basic cost accounting.Also, petitioner failed to adduce any other relevant evidence to support its contention.Aside from its bare claim of mistake or error in the computation of the thirteenth month pay, petitioner merely appended to its petition a copy of the 1997-2002 Collective Bargaining Agreement and an alleged corrected computation of the thirteenth month pay.There was no explanation whatsoever why its inclusion of non-basic benefits in the base figure in the computation of their 13th-month pay in the prior years was made by mistake, despite the clarity of statute and jurisprudence at that time.chanroblesvirtuallawlibrary
The instant case needs to be distinguished from Globe Mackay Cable and Radio Corp. vs. NLRC,[7] which petitioner Sevilla Trading invokes.In that case, this Court decided on the proper computation of the cost-of-living allowance (COLA) for monthly-paid employees.Petitioner Corporation, pursuant to Wage Order No. 6 (effective 30 October 1984), increased the COLA of its monthly-paid employees by multiplying the P3.00 daily COLA by 22 days, which is the number of working days in the company.The Union disagreed with the computation, claiming that the daily COLA rate of P3.00 should be multiplied by 30 days, which has been the practice of the company for several years.We upheld the contention of the petitioner corporation.To answer the Unions contention of company practice, we ruled that:chanroblesvirtuallawlibrary
Payment in full by Petitioner Corporation of the COLA before the execution of the CBA in 1982 and in compliance with Wage Orders Nos. 1 (26 March 1981) to 5 (11 June 1984), should not be construed as constitutive of voluntary employer practice, which cannot now be unilaterally withdrawn by petitioner.To be considered as such, it should have been practiced over a long period of time, and must be shown to have been consistent and deliberate . . .The test of long practice has been enunciated thus:chanroblesvirtuallawlibrary
. . . Respondent Company agreed to continue giving holiday pay knowing fully well that said employees are not covered by the law requiring payment of holiday pay. (Oceanic Pharmacal Employees Union [FFW] vs. Inciong, 94 SCRA 270 [1979])chanroblesvirtuallawlibrary
Moreover, before Wage Order No. 4, there was lack of administrative guidelines for the implementation of the Wage Orders.It was only when the Rules Implementing Wage Order No. 4 were issued on 21 May 1984 that a formula for the conversion of the daily allowance to its monthly equivalent was laid down.chanroblesvirtuallawlibrary
Absent clear administrative guidelines, Petitioner Corporation cannot be faulted for erroneous application of the law . . .chanroblesvirtuallawlibrary
In the above quoted case, the grant by the employer of benefits through an erroneous application of the law due to absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued.Such is not the case now.In the case at bar, the Court of Appeals is correct when it pointed out that as early as 1981, this Court has held in San Miguel Corporation vs. Inciong[8] that:chanroblesvirtuallawlibrary
Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as the basis in the determination of his 13th-month pay.Any compensations or remunerations which are deemed not part of the basic pay is excluded as basis in the computation of the mandatory bonus.chanroblesvirtuallawlibrary
Under the Rules and Regulations Implementing Presidential Decree 851, the following compensations are deemed not part of the basic salary:chanroblesvirtuallawlibrary
a) Cost-of-living allowances granted pursuant to Presidential Decree 525 and Letter of Instruction No. 174;chanroblesvirtuallawlibrary
b) Profit sharing payments;chanroblesvirtuallawlibrary
c) All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975.chanroblesvirtuallawlibrary
Under a later set of Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic salary and in the computation of the 13th-month pay.chanroblesvirtuallawlibrary
The exclusion of cost-of-living allowances under Presidential Decree 525 and Letter of Instruction No. 174 and profit sharing payments indicate the intention to strip basic salary of other payments which are properly considered as fringe benefits.Likewise, the catch-all exclusionary phrase all allowances and monetary benefits which are not considered or integrated as part of the basic salary shows also the intention to strip basic salary of any and all additions which may be in the form of allowances or fringe benefits.chanroblesvirtuallawlibrary
Moreover, the Supplementary Rules and Regulations Implementing Presidential Decree 851 is even more empathic in declaring that earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th-month pay.chanroblesvirtuallawlibrary
While doubt may have been created by the prior Rules and Regulations Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically, exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of a broad inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary.chanroblesvirtuallawlibrary
The all-embracing phrase earnings and other remunerations which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pay for regular holidays and night differentials.As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13 th-month pay.If they were not so excluded, it is hard to find any earnings and other remunerations expressly excluded in the computation of the 13th-month pay.Then the exclusionary provision would prove to be idle and with no purpose.chanroblesvirtuallawlibrary
In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the construction or application of the law.When petitioner Sevilla Trading still included over the years non-basic benefits of its employees, such as maternity leave pay, cash equivalent of unused vacation and sick leave, among others in the computation of the 13th-month pay, this may only be construed as a voluntary act on its part.Putting the blame on the petitioners payroll personnel is inexcusable.chanroblesvirtuallawlibrary
In Davao Fruits Corporation vs. Associated Labor Unions, we likewise held that:[9]chanroblesvirtuallawlibrary
The Supplementary Rules and Regulations Implementing P.D. No. 851 which put to rest all doubts in the computation of the thirteenth month pay, was issued by the Secretary of Labor as early as January 16, 1976, barely one month after the effectivity of P.D. No. 851 and its Implementing Rules.And yet, petitioner computed and paid the thirteenth month pay, without excluding the subject items therein until 1981.Petitioner continued its practice in December 1981, after promulgation of the aforequoted San Miguel decision on February 24, 1981, when petitioner purportedly discovered its mistake.chanroblesvirtuallawlibrary
From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees thirteenth month pay, without the payments for sick, vacation and maternity leave, premium for work done on rest days and special holidays, and pay for regular holidays.The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake.chanroblesvirtuallawlibrary
A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them.And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor Code of the Philippines which prohibit the diminution or elimination by the employer of the employees existing benefits. [Tiangco vs. Leogardo, Jr., 122 SCRA 267 (1983)]chanroblesvirtuallawlibrary
With regard to the length of time the company practice should have been exercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer, we hold that jurisprudence has not laid down any rule requiring a specific minimum number of years.In the above quoted case of Davao Fruits Corporation vs. Associated Labor Unions,[10] the company practice lasted for six (6) years.In another case, Davao Integrated Port Stevedoring Services vs. Abarquez,[11] the employer, for three (3) years and nine (9) months, approved the commutation to cash of the unenjoyed portion of the sick leave with pay benefits of its intermittent workers.While in Tiangco vs. Leogardo, Jr.,[12] the employer carried on the practice of giving a fixed monthly emergency allowance from November 1976 to February 1980, or three (3) years and four (4) months.In all these cases, this Court held that the grant of these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn.In the case at bar, petitioner Sevilla Trading kept the practice of including non-basic benefits such as paid leaves for unused sick leave and vacation leave in the computation of their 13th-month pay for at least two (2) years.This, we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without violating Art. 100 of the Labor Code:chanroblesvirtuallawlibrary
Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.chanroblesvirtuallawlibrary
IN VIEW WHEREOF, the petition is DENIED.The Decision of the Court of Appeals in CA-G.R. SP No. 63086 dated 27 November 2001 and its Resolution dated 06 March 2002 are hereby AFFIRMED.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
Quisumbing, Austria-Martinez, and Tinga, JJ., concur.chanroblesvirtuallawlibrary
Callejo, Sr., J., no part.
Endnotes:
[1] CA Rollo, pp. 124-134.
[2] CA Rollo, pp. 31-43.
[3] Rollo, p. 141.
[4] Rollo, p. 22.
[5] National Irrigation Administration vs. Court of Appeals, 318 SCRA 255, 265 (1999).
[6] Concurring Opinion of Justice Angelina Sandoval-Gutierrez in the consolidated cases of Tecson vs. COMELEC, G.R. No. 161434, Velez vs. Poe, G.R. No. 161634, and Fornier vs. COMELEC, G.R. No. 161824, 03 March 2004, citing Benito vs. COMELEC, 349 SCRA 705 (2001).
CLARION PRINTING HOUSE, INC., and EULOGIO YUTINGCO, Petitioners, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (Third Division) and MICHELLE
MICLAT, Respondents.
D E C I S I O N
CARPIO-MORALES, J.:
Respondent Michelle Miclat (Miclat) was employed on April 21, 1997 on a probationary basis as marketing assistant with a monthly salary of P6,500.00 by petitioner Clarion Printing House (CLARION) owned by its co-petitioner Eulogio Yutingco. At the time of her employment, she was not informed of the standards that would qualify her as a regular employee.
On September 16, 1997, the EYCO Group of Companies of which CLARION formed part filed with the Securities and Exchange Commission (SEC) a 'Petition for the Declaration of Suspension of Payment, Formation and Appointment of Rehabilitation Receiver/ Committee, Approval of Rehabilitation Plan with Alternative Prayer for Liquidation and Dissolution of Corporation[1] the pertinent allegations of which read:
x x x
5. The situation was that since all these companies were sister companies and were operating under a unified and centralized management team, the financial requirements of one company would normally be backed up or supported by one of the available fundings from the other companies.
6. The expansion exhausted the cash availability of Nikon, NKI, and 2000 because those fundings were absorbed by the requirements of NPI and EYCO Properties, Inc. which were placed on real estate investments. However, at the time that those investments and expansions were made, there was no cause for alarm because the market situation was very bright and very promising, hence, the decision of the management to implement the expansion.
7. The situation resulted in the cash position being spread thin. However, despite the thin cash positioning, the management still was very positive and saw a very viable proposition since the expansion and the additional investments would result in a bigger real estate base which would be very credible collateral for further expansions. It was envisioned that in the end, there would be bigger cash procurement which would result in greater volume of production, profitability and other good results based on the expectations and projections of the team itself.
8. Unfortunately, factors beyond the control and anticipation of the management came into play which caught the petitioners flat-footed, such as:
a) The glut in the real estate market which has resulted in the bubble economy for the real estate demand which right now has resulted in a severe slow down in the sales of properties;
b) The economic interplay consisting of the inflation and the erratic changes in the peso- dollar exchange rate which precipitated a soaring banking interest.
c) Labor problems that has precipitated adverse company effect on the media and in the financial circuit.
d) Liberalization of the industry (GATT) which has resulted in flooding the market with imported goods;
e) Other related adverse matters.
9. The inability of the EYCO Group of Companies to meet the obligations as they fall due on the schedule agreed with the bank has now become a stark reality. The situation therefore is that since the obligations would not be met within the scheduled due date, complications and problems would definitely arise that would impair and affect the operations of the entire conglomerate comprising the EYCO Group of Companies.
x x x
12. By virtue of this development, there is a need for suspension of all accounts o[r] obligations incurred by the petitioners in their separate and combined capacities in the meantime that they are working for the rehabilitation of the companies that would eventually redound to the benefit of these creditors.
13. The foregoing notwithstanding, however, the present combined financial condition of the petitioners clearly indicates that their assets are more than enough to pay off the credits.
x x x (Emphasis and underscoring supplied)[2]chanroblesvirtuallawlibrary
On September 19, 1997, the SEC issued an Order[3] the pertinent portions of which read:
x x x
It appearing that the petition is sufficient in form and substance, the corporate petitioners' prayer for the creation of management or receivership committee and creditors' approval of the proposed Rehabilitation Plan is hereby set for hearing on October 22, 1997 at 2:00 oclock in the afternoon at the SICD, SEC Bldg., EDSA, Greenhills, Mandaluyong City.
x x x
Finally, the petitioners are hereby enjoined from disposing any and all of their properties in any manner, whatsoever, except in the ordinary course of business and from making any payment outside of the legitimate business expenses during the pendency of the proceedings and as a consequence of the filing of the Petition, all actions, claims and proceedings against herein petitioners pending before any court, tribunal, office board and/or commission are deemed SUSPENDED until further orders from this Hearing Panel pursuant to the rulings of the Supreme Court in the cases of RCBC v. IAC et al., 213 SCRA 830 and BPI v. CA, 229 SCRA 223. (Underscoring supplied)
And on September 30, 1997, the SEC issued an Order[4] approving the creation of an interim receiver for the EYCO Group of Companies.
On October 10, 1997, the EYCO Group of Companies issued to its employees the following Memorandum:[5]
This is to formally announce the entry of the Interim Receiver Group represented by SGV from today until October 22, 1997 or until further formal notice from the SEC.
This interim receiver group's function is to make sure that all assets of the company are secured and accounted for both for the protection of us and our creditors.
Their function will involve familiarization with the different processes and controls in our organization & keeping physical track of our assets like inventories and machineries.
Anything that would be required from you would need to be in writing and duly approved by the top management in order for us to maintain a clear line.
We trust that this temporary inconvenience will benefit all of us in the spirit of goodwill. Let's extend our full cooperation to them.
Thank you. (Underscoring supplied)
On October 22, 1997, the Assistant Personnel Manager of CLARION informed Miclat by telephone that her employment contract had been terminated effective October 23, 1997. No reason was given for the termination.
The following day or on October 23, 1997, on reporting for work, Miclat was informed by the General Sales Manager that her termination was part of CLARION's cost-cutting measures.
On November 17, 1997, Miclat filed a complaint[6] for illegal dismissal against CLARION and Yutingco (petitioners) before the National Labor Relations Commission (NLRC).
In the meantime, or on January 7, 1998, the EYCO Group of Companies issued a Memorandum[7] addressed to company managers advising them of 'a temporary partial shutdown of some operations of the Company commencing on January 12, 1998 up to February 28, 1998:
In view of the numerous external factors such as slowdown in business and consumer demand and consistent with Art. 286 of the Revised Labor Code of the Philippines, we are constrained to go on a temporary partial shutdown of some operations of the Company.
To implement this measure, please submit to my office through your local HRAD the list of those whom you will require to report for work and their specific schedules. Upon revalidation and approval of this list, all those not in the list will not receive any pay nor will it be credited against their VL.
Please submit the listing no later than the morning of Friday, January 09, 1998.
Shutdown shall commence on January 12, 1998 up to February 28, 1998, unless otherwise recalled at an earlier date.
Implementation of th[ese] directives will be done through your HRAD departments. (Underscoring supplied)
In her Position Paper[8] dated March 3, 1998 filed before the labor arbiter, Miclat claimed that she was never informed of the standards which would qualify her as a regular employee. She asserted, however, that she qualified as a regular employee since her immediate supervisor even submitted a written recommendation in her favor before she was terminated without just or authorized cause.
Respecting the alleged financial losses cited by petitioners as basis for her termination, Miclat disputed the same, she contending that as marketing assistant tasked to receive sales calls, produce sales reports and conduct market surveys, a credible assessment on production and sales showed otherwise.
In any event, Miclat claimed that assuming that her termination was necessary, the manner in which it was carried out was illegal, no written notice thereof having been served on her, and she merely learned of it only a day before it became effective.
Additionally, Miclat claimed that she did not receive separation pay, 13 th month pay and salaries for October 21, 22 and 23, 1997.
On the other hand, petitioners claimed that they could not be faulted for retrenching some of its employees including Miclat, they drawing attention to the EYCO Group of Companies' being placed under receivership, notice of which was sent to its supervisors and rank and file employees via a Memorandum of July 21, 1997; that in the same memorandum, the EYCO Group of Companies advised them of a scheme for voluntary separation from employment with payment of severance pay; and that CLARION was only adopting the 'LAST IN, FIRST OUT PRINCIPLE when it terminated Miclat who was relatively new in the company.
Contending that Miclat's termination was made with due process, petitioners referred to the EYCO Group of Companies' abovesaid July 21, 1997 Memorandum which, so they claimed, substantially complied with the notice requirement, it having been issued more than one month before Miclat was terminated on October 23, 1997.
By Decision[9] of November 23, 1998, the labor arbiter found that Miclat was illegally dismissed and directed her reinstatement. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered ordering the respondent to reinstate complainant to her former or equivalent position without loss of seniority rights and benefits and to pay her backwages , from the time of dismissal to actual reinstatement, proportionate 13 th month pay and two (2) days salary computed as follows:
a.1) Backwages ' 10/23/97 to 11/30/98P6,500.00 x 13.25 months' = P86,125.00
a.2) Proportionate 13th month pay1/12 of P86,125 = 7,177.08
b) 13th month pay - 1997=P6,500 x 9.75 months/12 = 5,281.25
c) Two days salary =P6,500/26 x 2 days = 500.00
TOTAL P 99,083.33
(Emphasis and underscoring supplied).
Before the National Labor Relations Commission (NLRC) to which petitioners appealed, they argued that:[10]
1. [CLARION] was placed under receivership thereby evidencing the fact that it sustained business losses to warrant the termination of [Miclat] from her employment.
2. The dismissal of [Miclat] from her employment having been effected in accordance with the law and in good faith, [Miclat] does not deserve to be reinstated and paid backwages, 13 th month pay and two (2) days salary.
And petitioners pointed out that CLARION had expressed its decision to shutdown its operations by Memorandum[11] of January 7, 1998 to its company managers.
Appended to petitioners' appeal before the NLRC were photocopies of their balance sheets from 1997 to November 1998 which they claimed to unanimously show that x x x [petitioner] company experienced business reverses which were made the basis x x x in retrenching x x x.[12]chanroblesvirtuallawlibrary
By Resolution[13] of June 17, 1999, the NLRC affirmed the labor arbiter's decision. The pertinent portion of the NLRC Resolution reads:
There are three (3) valid requisites for valid retrenchment: (1) the retrenchment is necessary to prevent losses and such losses are proven; (2) written notices to the employees and to the Department of Labor and Employment at least one (1) month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one (1) month pay or at least ' month pay for every year of service, whichever is higher. The two notices are mandatory. If the notice to the workers is later than the notices sent to DOLE, the date of termination should be at least one month from the date of notice to the workers.
In Lopez Sugar Corporation v. Federation of Free Workers Philippine Labor Union Association (PLUA-NACUSIP) and National Labor Relations Commission, the Supreme Court had the occasion to set forth four standards which would justify retrenchment, being, firstly, - the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bona fide nature of the retrenchment would appear to be seriously in question; secondly, - the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic course with serious consequences for the livelihood of the employees retired or otherwise laid-off; thirdly, - because of the consequential nature of retrenchment, it must be reasonably necessary and likely to effectively prevent the expected losses. The employer
should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other cost than labor costs; and lastly, - the alleged losses if already realized and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence.
The records show that these requirements were not substantially complied with. And proofs presented by respondents-appellants were short of being sufficient and convincing to justify valid retrenchment. Their position must therefore fail. The reason is simple. Evidences on record presented fall short of the requirement of substantial, sufficient and convincing evidence to persuade this Commission to declare the validity of retrenchment espoused by respondents-appellants. The petition before the Securit[ies] and Exchange Commission for suspension of payment does not prove anything to come within the bounds of justifying retrenchment. In fact, the petition itself lends credence to the fact that retrenchment was not actually reinstated under the circumstances prevailing when it stated, 'The foregoing notwithstanding, however, the present combined financial condition of the petitioners clearly indicates that their assets are more than enough to pay off the credits . Verily, reading further into the petition, We are not ready to disregard the fact that the petition merely seeks to suspend payments of their obligation from creditor banks and other financing institutions, and not because of imminent substantial financial loss. On this account, We take note of paragraph 7 of the petition which stated: 'The situation resulted in cash position being spread thin. However, despite the thin cash positioning, the management was very positive and saw a very viable proposition since the expansion and the additional investments would result in a bigger real estate base which would be a very credible collateral for further expansions. It was envisioned that in the end, there would a bigger cash procurement which would result in greater volume of production, profitability and other good results based on the expectations and projections of the team itself. Admittedly, this does not create a picture of retrenchable business atmosphere pursuant to Article 283 of the Labor Code.
We cannot disregard the fact that respondent-appellants failed in almost all of the criteria set by law and jurisprudence in justifying valid retrenchment. The two (2) mandatory notices were violated. The supposed notice to the DOLE (Annex '4, List of Employees on Shutdown) is of no moment, the same having no bearing in this case. Herein complainant-appellee was not even listed therein and the date of receipt by DOLE, that is, January 18, 1999, was way out of time in relation to this case. And no proof was adduced to evidence cost cutting measures, to say the least. Nor was there proof shown that separation pay had been awarded to complainant-appellee.
WHEREFORE, premises considered, and finding no grave abuse of discretion on the findings of Labor Arbiter Nieves V. De Castro, the appeal is DENIED for lack of merit.
The decision appealed from is AFFIRMED in toto. (Italics in the original; underscoring supplied; citations omitted)
Petitioners' Motion for Reconsideration of the NLRC resolution having been denied by Resolution[14] of July 29, 1999, petitioners filed a petition for certiorari[15] before the Court of Appeals (CA) raising the following arguments:
1. PETITIONER CLARION WAS PLACED UNDER RECEIVERSHIP THEREBY EVIDENCING THE FACT THAT IT SUSTAINED BUSINESS LOSSES TO WARRANT THE TERMINATION OF PRIVATE RESPONDENT MICLAT FROM HER EMPLOYMENT.
2. THE DISMISSAL OF PRIVATE RESPONDENT MICLAT FROM HER EMPLOYMENT HAVING BEEN EFFECTED IN ACCORDANCE WITH THE LAW AND IN GOOD FAITH, PRIVATE RESPONDENT DOES NOT DESERVE TO BE REINSTATED AND PAID BACKWAGES, 13TH MONTH PAY AND TWO (2) DAYS SALARY. (Underscoring supplied)
By Decision[16] of November 24, 2000, the CA sustained the resolutions of the NLRC in this wise:
In the instant case, Clarion failed to prove its ground for retrenchment as well as compliance with the mandated procedure of furnishing the employee and the Department of Labor and Employment (hereafter, DOLE) with one (1) month written notice and payment of separation pay to the employee. Clarion's failure to discharge its burden of proof is evident from the following instances:
First, Clarion presented no evidence whatsoever before the Labor Arbiter. To prove serious business losses, Clarion presented its 1997 and 1998 financial statements and the SEC Order for the Creation of an Interim Receiver, for the first time on appeal before the NLRC . The Supreme Court has consistently disallowed such practice unless the party making the belated submission of evidence had satisfactorily explained the delay. In the instant case, said financial statements are not admissible in evidence due to Clarion's failure to explain the delay.
Second, even if such financial statements were admitted in evidence, they would not alter the outcome of the case as statements have weak probative value. The required method of proof in such case is the presentation of financial statements prepared by independent auditors and not merely by company accountants. Again, petitioner failed in this regard.
Third, even audited financial statements are not enough. The employer must present the statement for the year immediately preceding the year the employee was retrenched, which Clarion failed to do in the instant case, to prove not only the fact of business losses but more importantly, the fact that such losses were substantial, continuing and without immediate prospect of abatement. Hence, neither the NLRC nor the courts must blindly accept such audited financial statements. They must examine and make inferences from the data presented to establish business losses. Furthermore, they must be cautioned by the fact that 'sliding incomes' or decreasing gross revenues alone are not necessarily business losses within the meaning of Art. 283 since in the nature of things, the possibility of incurring losses is constantly present in business operations.
Last, even if business losses were indeed sufficiently proven, the employer must still prove that retrenchment was resorted to only after less drastic measures such as the reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiency, reduction of marketing and advertising costs, faster collection of customer accounts, reduction of raw materials investment and others, have been tried and found wanting. Again, petitioner failed to prove the exhaustion of less drastic measures short of retrenchment as it had failed with the other requisites.
It is interesting to note that Miclat started as a probationary employee on 21 April 1997. There being no stipulation to the contrary, her probation period had a duration of six (6) months from her date of employment. Thus, after the end of the probation period on 22 October 1997, she became a regular employee as of 23 October 1997 since she was allowed to work after the end of said period. It is also clear that her probationary employment was not terminated at the end of the probation period on the ground that the employee failed to qualify in accordance with reasonable standards made known to her at the time of engagement.
However, 23 October 1997 was also the day of Miclat's termination from employment on the ground of retrenchment. Thus, we have a bizarre situation when the first day of an employee's regular employment was also the day of her termination. However, this is entirely possible, as had in fact happened in the instant case, where the employer's basis for termination is Art. 288, instead of Art. 281 of the Labor Code. If petitioner terminated Miclat with Art. 281 in mind, it would have been too late to present such theory at this stage and it would have been equally devastating for petitioner had it done so because no evidence exists to show that Miclat failed to qualify with petitioner's standards for regularization. Failure to discharge its burden of proof would still be petitioner's undoing.
Whichever way We examine the case, the conclusion is the same ' Miclat was illegally dismissed. Consequently, reinstatement without loss of seniority rights and full backwages from date of dismissal on 23 October 1997 until actual reinstatement is in order.
WHEREFORE, the instant petition is hereby DISMISSED and the 29 July 1999 and 7 June 1999 resolutions of the NLRC are SUSTAINED. (Emphasis and underscoring supplied)
By Resolution[17] of May 23, 2001, the CA denied petitioner's motion for reconsideration of the decision.
Hence, the present petition for review on certiorari, petitioners contending that:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING THE ASSAILED DECISIONS OF HONORABLE PUBLIC RESPONDENT COMMISSION:
A. HOLDING THAT PRIVATE RESPONDENT MICLAT WAS ILLEGALLY DISMISSED; and
B. ORDERING THE REINSTATEMENT OF PRIVATE RESPONDENT MICLAT TO HER FORMER OR EQUIVALENT POSITION WITHOUT LOSS OF SENIORITY RIGHTS AND BENEFITS AND PAYMENT OF BACKWAGES, 1[3]TH MONTH PAY AND TWO (2) DAYS SALARY.[18]chanroblesvirtuallawlibrary
Petitioners argue that the conclusion of the CA that no sufficient proof of financial losses on the part of CLARION was adduced is patently erroneous, given the serious business reverses it had gravely suffered as reflected in its financial statements/balance sheets, thereby leaving as its only option the retrenchment of its employees including Miclat.[19]chanroblesvirtuallawlibrary
Petitioners further argue that when a company is under receivership and a receiver is appointed to take control of its management and corporate affairs, one of the evident reasons is to prevent further losses of said company and protect its remaining assets from being dissipated; and that the submission of
financial reports/statements prepared by independent auditors had been rendered moot and academic, the company having shutdown its operations and having been placed under receivership by the SEC due to its inability to pay or comply with its obligations.[20]chanroblesvirtuallawlibrary
Respecting the CA's holding that the financial statements CLARION submitted for the first time on appeal before the NLRC are inadmissible in evidence due to its failure to explain the delay in the submission thereof, petitioners lament the CA's failure to consider that technical rules on evidence prevailing in the courts are not controlling in proceedings before the NLRC which may consider evidence such as documents and affidavits submitted by the parties for the first time on appeal.[21]chanroblesvirtuallawlibrary
As to the CA's holding that CLARION failed to prove the exhaustion of less drastic measures short of retrenching, petitioners advance that prior to the termination of Miclat, CLARION, together with the other companies under the EYCO Group of Companies, was placed under receivership during which drastic measures to continue business operations of the company and eventually rehabilitate itself were implemented.[22]chanroblesvirtuallawlibrary
Denying Miclat's entitlement to backwages, petitioners proffer that her dismissal rested upon a valid and authorized cause. And petitioners assail as grossly erroneous the award of 13th month pay to Miclat, she not having sought it and, therefore, there was no jurisdiction to award the same.[23]chanroblesvirtuallawlibrary
The petition is partly meritorious.
Contrary to the CA's ruling, petitioners could present evidence for the first time on appeal to the NLRC. It is well-settled that the NLRC is not precluded from receiving evidence, even for the first time on appeal, because technical rules of procedure are not binding in labor cases.
The settled rule is that the NLRC is not precluded from receiving evidence on appeal as technical rules of evidence are not binding in labor cases. In fact, labor officials are mandated by the Labor Code to use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. Thus, in Lawin Security Services v. NLRC, and Bristol Laboratories Employees' Association-DFA v. NLRC, we held that even if the evidence was not submitted to the labor arbiter, the fact that it was duly introduced on appeal to the NLRC is enough basis for the latter to be more judicious in admitting the same, instead of falling back on the mere technicality that said evidence can no longer be considered on appeal. Certainly, the first course of action would be more consistent with equity and the basic notions of fairness. (Italics in the original; citations omitted)[24]chanroblesvirtuallawlibrary
It is likewise well-settled that for retrenchment to be justified, any claim of actual or potential business losses must satisfy the following standards: (1) the losses are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is reasonably necessary and is likely to be effective in preventing expected losses; and (4) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence.[25] And it is the employer who has the onus of proving the presence of these standards.
Sections 5 and 6 of Presidential Decree No. 902-A (P.D. 902-A) (reorganization of the securities and exchange commission with additional powers and placing said agency under the administrative supervision of the office of the president'),[26] as amended, read:
SEC. 5 In addition to the regulatory and adjudicative functions of THE SECURITIES AND EXCHANGE COMMISSION over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving:
x x x
(d) Petitions of corporations, partnerships or associations declared in the state of suspension of payments in cases where the corporation, partnership or association possesses sufficient property to cover all debts but foresees the impossibility of meeting them when they respectively fall due or in cases where the corporation, partnership, association has no sufficient assets to cover its liabilities, but is under the management of a Rehabilitation Receiver or Management Committee created pursuant to this Decree.
SEC. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers:
x x x
(c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in accordance with the provisions of the Rules of Court in such other cases whenever necessary in order to preserve the rights of the parties-litigants and/or protect the interest of the investing public and creditors: Provided, however, That the Commission may in appropriate cases, appoint a rehabilitation receiver of corporations, partnerships or other associations not supervised or regulated by other government agencies who shall have, in addition to powers of the regular receiver under the provisions of the Rules of Court, such functions and powers as are provided for in the succeeding paragraph (d) hereof: x x x
(d) To create and appoint a management committee, board or body upon petition or motu propio to undertake the management of corporations, partnership or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralization of business operations of such corporations or entities which may be prejudicial to the interest of minority stockholders, parties-litigants of the general public: x x x (Emphasis and underscoring supplied).
From the above-quoted provisions of P.D. No. 902-A, as amended, the appointment of a receiver or management committee by the SEC presupposes a finding that, inter alia, a company possesses sufficient property to cover all its debts but 'foresees the impossibility of meeting them when they respectively fall due and 'there is imminent danger of dissipation, loss, wastage or destruction of assets of other properties or paralization of business operations.
That the SEC, mandated by law to have regulatory functions over corporations, partnerships or associations,[27] appointed an interim receiver for the EYCO Group of Companies on its petition in light of, as quoted above, the therein enumerated 'factors beyond the control and anticipation of the
management rendering it unable to meet its obligation as they fall due, and thus resulting to 'complications and problems . . . to arise that would impair and affect [its] operations . . . shows that CLARION, together with the other member-companies of the EYCO Group of Companies, was suffering business reverses justifying, among other things, the retrenchment of its employees.
This Court in fact takes judicial notice of the Decision[28] of the Court of Appeals dated June 11, 2000 in CA-G.R. SP No. 55208, 'Nikon Industrial Corp., Nikolite Industrial Corp., et al. [including CLARION], otherwise known as the EYCO Group of Companies v. Philippine National Bank, Solidbank Corporation, et al., collectively known and referred as the 'Consortium of Creditor Banks, which was elevated to this Court via Petition for Certiorari and docketed as G.R. No. 145977, but which petition this Court dismissed by Resolution dated May 3, 2005:
Considering the joint manifestation and motion to dismiss of petitioners and respondents dated February 24, 2003, stating that the parties have reached a final and comprehensive settlement of all the claims and counterclaims subject matter of the case and accordingly, agreed to the dismissal of the petition for certiorari, the Court Resolved to DISMISS the petition for certiorari (Underscoring supplied).
The parties in G.R. No. 145977 having sought, and this Court having granted, the dismissal of the appeal of the therein petitioners including CLARION, the CA decision which affirmed in toto the September 14, 1999 Order of the SEC, the dispositive portion of which SEC Order reads:
WHEREFORE, premises considered, the appeal is as it is hereby, granted and the Order dated 18 December 1998 is set aside. The Petition to be Declared in State of Suspension of payments is hereby disapproved and the SAC Plan terminated. Consequently, all committee, conservator/ receivers created pursuant to said Order are dissolved and discharged and all acts and orders issued therein are vacated.
The Commission, likewise, orders the liquidation and dissolution of the appellee corporations. The case is hereby remanded to the hearing panel below for that purpose.
x x x (Emphasis and underscoring supplied),
has now become final and executory. Ergo, the SEC's disapproval of the EYCO Group of Companies' 'Petition for the Declaration of Suspension of Payment . . . and the order for the liquidation and dissolution of these companies including CLARION, must be deemed to have been unassailed.
That judicial notice can be taken of the above-said case of Nikon Industrial Corp. et al. v. PNB et al., there should be no doubt.
As provided in Section 1, Rule 129 of the Rules of Court:
SECTION 1. Judicial notice, when mandatory. ' A court shall take judicial notice, without the introduction of evidence, of the existence and territorial extent of states, their political history, forms of government and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the Philippines, the official acts of the legislative, executive and judicial departments of the Philippines, the laws of nature, the measure of time, and the geographical divisions. (Emphasis and underscoring supplied)
which Mr. Justice Edgardo L. Paras interpreted as follows:
A court will take judicial notice of its own acts and records in the same case, of facts established in prior proceedings in the same case, of the authenticity of its own records of another case between the same parties, of the files of related cases in the same court, and of public records on file in the same court. In addition judicial notice will be taken of the record, pleadings or judgment of a case in another court between the same parties or involving one of the same parties, as well as of the record of another case between different parties in the same court. Judicial notice will also be taken of court personnel. (Emphasis and underscoring supplied)[29]chanroblesvirtuallawlibrary
In fine, CLARION's claim that at the time it terminated Miclat it was experiencing business reverses gains more light from the SEC's disapproval of the EYCO Group of Companies' petition to be declared in state of suspension of payment, filed before Miclat's termination, and of the SEC's consequent order for the group of companies' dissolution and liquidation.
This Court's finding that Miclat's termination was justified notwithstanding, since at the time she was hired on probationary basis she was not informed of the standards that would qualify her as a regular employee, under Section 6, Rule I of the Implementing Rules of Book VI of the Labor Code which reads:
SEC. 6. Probationary employment. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
x x x
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee (Emphasis and underscoring supplied),
she was deemed to have been hired from day one as a regular employee.[30]chanroblesvirtuallawlibrary
CLARION, however, failed to comply with the notice requirement provided for in Article 283 of the Labor Code, to wit:
ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. ' The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. x x x (Emphasis and underscoring supplied)
This Court thus deems it proper to award the amount equivalent to Miclat's one (1) month salary of P6,500.00 as nominal damages to deter employers from future violations of the statutory due process rights of employees.[31]chanroblesvirtuallawlibrary
Since Article 283 of the Labor Code also provides that '[i]n case of retrenchment to prevent losses, . . . the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. . . , [a] fraction of at least six (6) months [being] considered one (1) whole year, this Court holds that Miclat is entitled to separation pay equivalent to one (1) month salary.
As to Miclat's entitlement to 13th month pay, paragraph 6 of the Revised Guidelines on the 13th Month Pay Law provides:
6. 13th Month Pay of Resigned or Separated Employee
An employee x x x whose services were terminated any time before the time for payment of the 13 th
month pay is entitled to this monetary benefit in proportion to the length of time he worked during the calendar year up to the time of his resignation or termination from the service. Thus if he worked only from January up to September his proportionate 13th month pay shall be equivalent to 1/12 of his total basic salary he earned during that period.
x x x
Having worked at CLARION for six months, Miclat's 13th month pay should be computed as follows:
With the appointment of a management receiver in September 1997, however, all claims and proceedings against CLARION, including labor claims,[32] were deemed suspended during the existence of the receivership.[33] The labor arbiter, the NLRC, as well as the CA should not have proceeded to resolve respondent's complaint for illegal dismissal and should instead have directed respondent to lodge her claim before the then duly-appointed receiver of CLARION. To still require respondent, however, at this time to refile her labor claim against CLARION under the peculiar circumstances of the case ' that 8 years have lapsed since her termination and that all the arguments and defenses of both parties were already ventilated before the labor arbiter, NLRC and the CA; and that CLARION is already in the course of liquidation ' this Court deems it most expedient and advantageous for both parties that CLARION's liability be determined with finality, instead of still requiring respondent to lodge her claim at this time before the liquidators of CLARION which would just entail a mere reiteration of what has been already argued and pleaded. Furthermore, it would be in the best interest of the other creditors of CLARION that claims against the company be finally settled and determined so as to further expedite the liquidation proceedings. For the lesser number of claims to be proved, the sooner the claims of all creditors of CLARION are processed and settled.
WHEREFORE, the Court of Appeals November 24, 2000 Decision, together with its May 23, 2001 Resolution, is SET ASIDE and another rendered declaring the legality of the dismissal of respondent,
Michelle Miclat. Petitioners are ORDERED, however, to PAY her the following in accordance with the foregoing discussions:
1) P6,500.00 as nominal damages for non-compliance with statutory due process;
2) P6,500.00 as separation pay; and
3) P3,250.00 as 13th month pay.
Let a copy of this Decision be furnished the SEC Hearing Panel charged with the liquidation and dissolution of petitioner corporation for inclusion, in the list of claims of its creditors, respondent Michelle Miclat's claims, to be satisfied in accordance with Article 110 of the Labor Code in relation to the Civil Code provisions on Concurrence and Preference of Credits.
Costs against petitioners.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.
[25] Tanjuan v. Philippine Postal Savings Bank, Inc., 411 SCRA 168, 180 (2003).cralaw
[26] Now amended by the Securities Regulation Code (SRC) which took effect on August 8, 2000. Sec. 5.2 of the SRC provides that the SEC's jurisdiction over all cases enumerated under Section 5 of PD 902-A is transferred to the appropriate Regional Trial Court but shall retain jurisdiction over pending suspension of payments/ rehabilitation cases filed as of June 30, 2000 until finally disposed.cralaw
[27] Sec. 3 of PD 902-A provides that the SEC shall have 'absolute jurisdiction, supervision and control over all corporations, partnerships or associations, who are the grantees of primary franchises and/ or license or permit issued by the government to operate in the Philippines; x x x. The SRC retained said power of the SEC over corporations. Paragraph (a) of Sec. 5 of said law provides that the SEC has jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/ or license or permit issued by the Government.cralaw
[28] G.R. No. 145977 Rollo at 32-47.cralaw
[29] E. Paras, IV Rules of Court Annotated, 3rd
edition at 59 citing Graham on Evidence, 1986 edition; Cited in Republic v. Court of Appeals, 277 SCRA 633, 641 (1997).cralaw
[30] Cielo v. NLRC, 193 SCRA 410, 418 (1991).cralaw
[31] Jaka Food Processing Corporation v. Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab, G.R. No. 151378, March 28, 2005. Vide
Agabon v. National Labor Relations Commission, G.R. No. 158693, November 17, 2004.cralaw
[32] Rubberworld (Phils.), Inc. v. NLRC, 305 SCRA 721, 729-730 (1999).cralaw
SAN MIGUEL CORPORATION, Petitioner, vs. THE HONORABLE COURT OF APPEALS-FORMER THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE M. ESPAOL, JR.,
Hon. CRESENCIANO B. TRAJANO, and HON. REGIONAL DIRECTOR ALLAN M. MACARAYA, Respondents.
D E C I S I O N
KAPUNAN, J.:chanroblesvirtuallawlibrary
Assailed in the petition before us are the decision, promulgated on 08 May 2000, and the resolution, promulgated on 18 October 2000, of the Court of Appeals in CA G.R. SP-53269.chanroblesvirtuallawlibrary
The facts of the case are as follows: chanroblesvirtuallawlibrary
On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta.[1] SMC contested the findings and DOLE conducted summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Office issued a compliance order, dated 17 December 1993, directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order.chanroblesvirtuallawlibrary
SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. The dismissal of the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it was found that the appeal was filed within the reglementary period. However, the appeal was still dismissed for lack of merit and the order of Director Macaraya was affirmed. chanroblesvirtuallawlibrary
SMC went to this Court for relief via a petition for certiorari, which this Court referred to the Court of Appeals pursuant to St. Martin Funeral Homes vs. NLRC.[2]chanroblesvirtuallawlibrary
The appellate court, in the now questioned decision, promulgated on 08 May 2000, ruled, as follows:chanroblesvirtuallawlibrary
WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order dated July 17, 1998 of Undersecretary Espaol, Jr. is hereby MODIFIED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. Let this case be remanded to the Regional Director for the proper computation of the said holiday pay.chanroblesvirtuallawlibrary
SO ORDERED.[3]chanroblesvirtuallawlibrary
Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before this Court, alleging that:chanroblesvirtuallawlibrary
PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY GRANTED MUSLIM HOLIDAY PAY TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO PAY THE SAME RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE PROMULGATION OF THE COMPLIANCE ORDER ISSUED ON DECEMBER 17, 1993, IT BEING CONTRARY TO THE PROVISIONS, INTENT AND PURPOSE OF P.D. 1083 AND PREVAILING JURISPRUDENCE.chanroblesvirtuallawlibrary
THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE ABUSE OF DISCRETION IN THAT SAN MIGUEL CORPORATION WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSAILED COMPLIANCE ORDER AND ALL SUBSEQUENT ORDERS, DECISION AND RESOLUTION OF PUBLIC RESPONDENTS WERE ALL ISSUED WITH GRAVE ABUSE OF DISCRETION AND ARE VOID AB INITIO.chanroblesvirtuallawlibrary
THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DECLARED THAT REGIONAL DIRECTOR MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAOL, JR., WHO ALL LIKEWISE ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION, HAVE JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER AND SUBSEQUENT ORDERS, WHEN IN FACT THEY HAVE NO JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR STANDARD CASE.[4]chanroblesvirtuallawlibrary
At the outset, petitioner came to this Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of the 1997 Rules of Civil Procedure. In National Irrigation Administration vs. Court of Appeals,[5] the Court declared:chanroblesvirtuallawlibrary
x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.chanroblesvirtuallawlibrary
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration.
x x xchanroblesvirtuallawlibrary
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy.[6]chanroblesvirtuallawlibrary
Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal.[7] For failure of petitioner to file a timely appeal, the questioned decision of the Court of Appeals had already become final and executory.chanroblesvirtuallawlibrary
In any event, the Court finds no reason to reverse the decision of the Court of Appeals.chanroblesvirtuallawlibrary
Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083,[8] otherwise known as the Code of Muslim Personal Laws, which states:chanroblesvirtuallawlibrary
Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:chanroblesvirtuallawlibrary
(a) Amun Jadīd (New Year), which falls on the first day of the first lunar month of Muharram;chanroblesvirtuallawlibrary
(b) Maulid-un-Nabī (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal;chanroblesvirtuallawlibrary
(c) Lailatul Isrā Wal Mirāj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of the seventh lunar month of Rajab;chanroblesvirtuallawlibrary
(d) Īd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; andchanroblesvirtuallawlibrary
(e) Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhūl-Hijja.chanroblesvirtuallawlibrary
Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim provinces and cities as may hereafter be created;chanroblesvirtuallawlibrary
(2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces and cities.chanroblesvirtuallawlibrary
The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:chanroblesvirtuallawlibrary
Art. 94. Right to holiday pay. - chanroblesvirtuallawlibrary
(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;chanroblesvirtuallawlibrary
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; x x x.chanroblesvirtuallawlibrary
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that (t)he provisions of this Code shall be applicable only to Muslims x x x. However, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. The Court of Appeals did not err in sustaining Undersecretary Espaol who stated: chanroblesvirtuallawlibrary
Assuming arguendo that the respondents position is correct, then by the same token, Muslims throughout the Philippines are also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must remind the respondent-appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the workers faith or religion.chanroblesvirtuallawlibrary
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim. chanroblesvirtuallawlibrary
In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma on 14 December 1999 categorically stated:chanroblesvirtuallawlibrary
Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays.[9]chanroblesvirtuallawlibrary
On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section B of the Labor Code, as amended by Republic Act No. 7730, provides:chanroblesvirtuallawlibrary
Article 128. Visitorial and enforcement power. -
x x xchanroblesvirtuallawlibrary
(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the
labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.
x x xchanroblesvirtuallawlibrary
In the case before us, Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. In addition, the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Indeed, petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be resolved even without documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection.chanroblesvirtuallawlibrary
Anent the allegation that petitioner was not accorded due process, we sustain the Court of Appeals in finding that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. Further, a series of summary hearings were conducted by DOLE on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC could not claim that it was not given an opportunity to defend itself.chanroblesvirtuallawlibrary
Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. M-000915-92 (Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga),[10] the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. In that case, the NLRC Cagayan de Oro City declared, in passing:chanroblesvirtuallawlibrary
We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legally observed within the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM), particularly in the provinces of Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon Presidential Proclamation that Muslim holidays may be officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said holidays.[11]chanroblesvirtuallawlibrary
The decision has no consequence to issues before us, and as aptly declared by Undersecretary Espaol, it can never be a benchmark nor a guideline to the present case x x x.[12]chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, the petition is DISMISSED.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.
[7] See GSIS vs. Olisa, 304 SCRA 421 (1999); Mathay, Jr. vs. Civil Service Commission, 312 SCRA 91 (1999);
Republic vs. Court of Appeals, 313 SCRA 376 (1999).
[8] A Decree to Ordain and Promulgate a Code Recognizing the System of Filipino Muslim Laws, Codifying Muslim Personal Laws, and Providing for Its Administration and for Other Purposes.
[9] Emphasis supplied.
[10] Resolution, promulgated on 21 July 1993 of the NLRC Cagayan de Oro City.
dismissal.[8] The claims for 13th month pay and service incentive leave pay was also
denied since private respondents were paid way above the applicable minimum wage
during their employment.[9]
Private respondents appealed to the NLRC. In its Resolution,[10] the Second Division of
the NLRC agreed with the Labor Arbiter's finding that when private respondents filed their
complaints, the six-month period had not yet expired, and that CMC's decision to stop its
operations in the areas was beyond the control of JPL, thus, they were not illegally
dismissed. However, it found that despite JPL's effort to look for clients to which private
respondents may be reassigned it was unable to do so, and hence they are entitled to
separation pay.[11] Setting aside the Labor Arbiter's decision, the NLRC ordered the
payment of:
1. Separation pay, based on their last salary rate and counted from the first day of their employment with the respondent JPL up to the finality of this judgment; 2. Service Incentive Leave pay, and 13th month pay, computed as in No.1 hereof.[12]
Aggrieved, JPL filed a petition for certiorari under Rule 65 of the Rules of Court with the
Court of Appeals, imputing grave abuse of discretion on the part of the NLRC. It claimed
that private respondents are not by law entitled to separation pay, service incentive
leave pay and 13th month pay.
The Court of Appeals dismissed the petition and affirmed in toto the NLRC resolution.
While conceding that there was no illegal dismissal, it justified the award of separation
pay on the grounds of equity and social justice.[13] The Court of Appeals rejected JPL's
argument that the difference in the amounts of private respondents' salaries and the
minimum wage in the region should be considered as payment for their service incentive
leave and 13th month pay.[14] Notwithstanding the absence of a contractual agreement
MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.Associate Justice Associate Justice
MINITA V. CHICO-NAZARIOAssociate Justice
ATTESTATION
'I attest that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.
REYNATO S. PUNOAssociate Justice
Chairman, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman's
Attestation, it is hereby certified that the conclusions in the above Decision were reached
in consultation before the case was assigned to the writer of the opinion of the Court's
Division.
HILARIO G. DAVIDE, JR.Chief Justice
Endnotes:
[1]Seventh Division, penned by Associate Justice Eliezer R. De Los Santos, JJ. Godardo A. Jacinto and Bernardo P. Abesamis, concurring; Rollo, pp. 27-36.cralaw
[2]Rollo, pp. 38-40.cralaw
[3]Not 26 December 1997, as stated in the Court of Appeal's Decision. cralaw
[4]CA Rollo, p. 41.cralaw
[5]Id. at 63-64.cralaw
[6]Joint Decision dated 19 May 1999, id. at 48-51.cralaw
[7]Id. at 50.cralaw
[8]Ibid. cralaw
[9]Ibid. cralaw
[10]Rollo, pp. 13-18. cralaw
[11]Id. at 16.cralaw
[12]Id. at 17.cralaw
[13]CA Decision, Rollo, pp. 32-33. cralaw
[14]Id. at 35.cralaw
[15]CA Resolution, id. at 38-40.cralaw
[16]Rollo, p. 16.cralaw
[17]Art. 283, Labor Code.cralaw
[18]Art. 284, id. cralaw
[19]Sec. 4 (b), Rule I, Book VI of the Implementing Rules and Regulations of the Labor Code.cralaw
[20]Citing Phimco Industries, Inc. v. National Labor Relations Commission, 339 Phil. 477 (1997); Hinatuan Mining Corporation v. National Labor Relations Commission, 268 SCRA 622 (1997).cralaw
[32]Capili v. National Labor Relations Commission, 337 Phil. 210, 215 (1997). cralaw
[33]Ibid.cralaw
[34]Reynaldo Valdez v. National Labor Relations Commission, 349 Phil. 760, 766 (1998), citing Agro Commercial Security Services Agency, Inc. v. National Labor Relations Commission, 175 SCRA 790 (1989). cralaw
[35]Rollo, p. 48. cralaw
[36]Philippine National Construction Corporation v. National Labor Relations Commission, 366 Phil. 678 (1999); United South Dockhandlers, Inc. v. National Labor Relations Commission, et al., 267 SCRA 401 (1997); Firestone Tire and Rubber Co. of the Philippines v. Lariosa, et al., 148 SCRA 186 (1987); Rollo, pp. 32-33. cralaw
[37]Supra note 25.
cralaw
[38] G.R. No. 158693, 17 November 2004, 442 SCRA 573.cralaw
[39]Sec. 2, P.D. No. 851.cralaw
[40]Section 3(e), Rules and Regulations Implementing P.D. No. 851.cralaw
[41]Sec. 3, Rule V, Book III, Rules to Implement the Labor Code.cralaw
[42]Imbuido v. National Labor Relations Commission, 385 Phil. 999, 1013 (2000), citing 'Fernandez v. National Labor Relations Commission, 285 SCRA 149 (1998).
cralawOn March 20, 2000, Lebatique filed a complaint for illegal dismissal and nonpayment of overtime
pay.The Labor Arbiter found that Lebatique was illegally dismissed, and ordered his reinstatement and
the payment of his full back wages, 13th month pay, service incentive leave pay, and overtime pay.The
dispositive portion of the decision is quoted herein in full, as follows:
WHEREFORE, we find the termination of complainant illegal.He should thus be ordered
reinstated with full backwages.He is likewise ordered paid his 13th month pay, service incentive leave pay and overtime pay as computed by the Computation and Examination Unit as follows:
cralawa) cralawBackwages:
01/25/00 - 10/31/00 = 9.23 mos.P 223.50 x 26 x 9.23 = P 53,635.5311/01/0006/26/01 = 7.86 mos.P 250.00 x 26 x 7.86 =51,090.00P 104,725.53
13th Month Pay: 1/12 of P 104,725.53 =8,727.13Service Incentive Leave Pay01/25/0010/31/00 = 9.23 mos.P 223.50 x 5/12 x 9.23 =P 859.54cralaw11/01/00 06/26/01 = 7.86 mos.cralawP 250.00 x 5/12 x 7.86 =[818.75]1,678.29115,130.95
b)cralawOvertime Pay: (3 hours/day)
cralaw03/20/97 4/30/97 = 1.36 mos.
cralawP 180/8 x 1.25 x 3 x 26 x 1.36cralaw= cralawP 2,983.50
cralaw05/01/97 02/05/98 = 9.16 mos.
cralawP 185/8 x 1.25 x 3 x 26 x 9.16cralaw=cralaw20,652.94
cralaw02/06/98 10/30/99 = 20.83 mos.
cralawP 198/8 x 1.25 x 3 x 26 x [20.83]cralaw=cralaw50,265.39
cralaw10/31/9901/24/00 = 2.80 mos.
cralawP 223.50/8 x 1.25 x 3 x 26 x 2.80cralaw=cralaw 7,626.94cralaw81,528.77
TOTAL AWARDP 196,659.72
cralawSO ORDERED.[5]cralaw
cralawOn appeal, the NLRC reversed the Labor Arbiter and dismissed the complaint for lack of merit.The
NLRC held that there was no dismissal to speak of since Lebatique was merely suspended.Further, it
found that Lebatique was a field personnel, hence, not entitled to overtime pay and service incentive
leave pay.Lebatique sought reconsideration but was denied.
cralawAggrieved, Lebatique filed a petition for certiorari with the Court of Appeals.
The Court of Appeals, in reversing the NLRC decision, reasoned that Lebatique was suspended on
January 24, 2000 but was illegally dismissed on January 29, 2000 when Alexander told him to look
for another job.It also found that Lebatique was not a field personnel and therefore entitled to
payment of overtime pay, service incentive leave pay, and 13 th month pay.
It reinstated the decision of the Labor Arbiter as follows:
WHEREFORE, premises considered, the decision of the NLRC dated 27 December 2002 is hereby REVERSED and the Labor Arbiters decision dated 27 June 2001 REINSTATED. SO ORDERED.[6]
Petitioners moved for reconsideration but it was denied.
cralaw
cralawHence, the instant petition wherein petitioners assign the following errors:
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT THE PRIVATE RESPONDENT WAS ILLEGALLY DISMISSED.
THE COURT OF APPEALS ERRED IN REVERSING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION DATED 15 OCTOBER 2002 AND IN RULING THAT PRIVATE RESPONDENT IS NOT A FIELD PERSONNEL AND THER[E]FORE ENTITLED TO OVERTIME PAY AND SERVICE INCENTIVE LEAVE PAY.
THE COURT OF APPEALS ERRED IN NOT DISMISSING THE PETITION FOR CERTIORARI FOR FAILURE OF PRIVATE RESPONDENT TO ATTACH CERTIFIED TRUE COPIES OF THE QUESTIONED DECISION AND RESOLUTION OF THE PUBLIC RESPONDENT.[7]
cralawSimply stated, the principal issues in this case are: (1) whether Lebatique was illegally dismissed;
and (2) whether Lebatique was a field personnel, not entitled to overtime pay.cralaw
Petitioners contend that, (1) Lebatique was not dismissed from service but merely suspended for a day
due to violation of company rules; (2) Lebatique was not barred from entering the company premises
since he never reported back to work; and (3) Lebatique is estopped from claiming that he was illegally
dismissal that it was Lebatiques complaint for nonpayment of his overtime pay that provoked the
management to dismiss him, on the erroneous premise that a truck driver is a field personnel not
entitled to overtime pay.
An employee who takes steps to protest his layoff cannot by any stretch of imagination be said to have
abandoned his work and the filing of the complaint is proof enough of his desire to return to work, thus
negating any suggestion of abandonment.[11]A contrary notion would not only be illogical but also
absurd.
cralawIt is immaterial that Lebatique had filed a complaint for nonpayment of overtime pay the day he
was suspended by managements unilateral act.What matters is that he filed the complaint for illegal
dismissal on March 20, 2000, after he was told not to report for work, and his filing was well within the
prescriptive period allowed under the law.
cralawOn the second issue, Article 82 of the Labor Code is decisive on the question of who are referred to
by the term field personnel.It provides, as follows:
ART. 82. Coverage. - The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.
cralawx x x x
Field personnel shall refer to non-agricultural employees who regularly 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 determined with reasonable certainty.
cralawIn Auto Bus Transport Systems, Inc. v. Bautista,[12] this Court emphasized that the definition of a
field personnel is not merely concerned with the location where the employee regularly performs his
cralawI attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R T I F I C A T I O N
cralawPursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
Endnotes:
[1] cralawRollo, pp. 34-44.Penned by Associate Justice Buenaventura J. Guerrero with Associate Justices Andres B. Reyes, Jr. and Regalado E. Maambong concurring.
[2] cralawId. at 62.
[3] cralawId. at 194-203.
[4] cralawId. at 167-174.
[5] cralawId. at 173-174.
[6] cralawId. at 44.
[7] cralawId. at 17.
[8] cralawId. at 375.
[9] cralawMicro Sales Operation Network v. National Labor Relations Commission, G.R. No. 155279, October 11, 2005, 472 SCRA 328, 337.
[11] cralawVeterans Security Agency, Inc. v. Gonzalvo, Jr., G.R. No. 159293, December 16, 2005, 478 SCRA 298, 305.
[12] cralawG.R. No. 156367, May 16, 2005, 458 SCRA 578.
[13] cralawId. at 589.
[14] cralawRollo, p. 42.
[15] cralawId. at 375.
[16] cralawArticle 291 of the Labor Code.
[17] cralawSupra note 12, at 591.
[18] cralawSee Auto Bus Transport Systems, Inc. v. Bautista, supra at 594.
Republic of the Philippines SUPREME COURT
Manila
SECOND DIVISION
[G.R. No. 146530. January 17, 2005]
PEDRO CHAVEZ, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN LEE, Plant Manager, Respondents.
D E C I S I O N
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari of the Resolution[1] dated December 15, 2000 of the Court of Appeals (CA) reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485. The assailed resolution reinstated the Decision dated July 10, 1998 of the National Labor Relations Commission (NLRC), dismissing the complaint for illegal dismissal filed by herein petitioner Pedro Chavez. The said NLRC decision similarly reversed its earlier Decision dated January 27, 1998 which, affirming that of the Labor Arbiter, ruled that the petitioner had been illegally dismissed by respondents Supreme Packaging, Inc. and Mr. Alvin Lee.
The case stemmed from the following facts:
The respondent company, Supreme Packaging, Inc., is in the business of manufacturing cartons and other packaging materials for export and distribution. It engaged the services of the petitioner, Pedro Chavez, as truck driver on October 25, 1984. As such, the petitioner was tasked to deliver the respondent company's products from its factory in Mariveles, Bataan, to its various customers, mostly in Metro . The respondent company furnished the petitioner with a truck. Most of the petitioner's
delivery trips were made at nighttime, commencing at 6:00 p.m. from Mariveles, and returning thereto in the afternoon two or three days after. The deliveries were made in accordance with the routing slips issued by respondent company indicating the order, time and urgency of delivery. Initially, the petitioner was paid the sum of P350.00 per trip. This was later adjusted to P480.00 per trip and, at the time of his alleged dismissal, the petitioner was receiving P900.00 per trip.
Sometime in 1992, the petitioner expressed to respondent Alvin Lee, respondent company's plant manager, his (the petitioner's ) desire to avail himself of the benefits that the regular employees were receiving such as overtime pay, nightshift differential pay, and 13th month pay, among others. Although he promised to extend these benefits to the petitioner, respondent Lee failed to actually do so.
On February 20, 1995, the petitioner filed a complaint for regularization with the Regional Arbitration Branch No. III of the NLRC in San Fernando, Pampanga. Before the case could be heard, respondent company terminated the services of the petitioner. Consequently, on May 25, 1995, the petitioner filed an amended complaint against the respondents for illegal dismissal, unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th month pay, among others. The case was docketed as NLRC Case No. RAB-III-02-6181-95.
The respondents, for their part, denied the existence of an employer-employee relationship between the respondent company and the petitioner. They averred that the petitioner was an independent contractor as evidenced by the contract of service which he and the respondent company entered into. The said contract provided as follows:
That the Principal [referring to Supreme Packaging, Inc.], by these presents, agrees to hire and the Contractor [referring to Pedro Chavez], by nature of their specialized line or service jobs, accepts the services to be rendered to the Principal, under the following terms and covenants heretofore mentioned:
1. That the inland transport delivery/hauling activities to be performed by the contractor to the principal, shall only cover travel route from Mariveles to Metro . Otherwise, any change to this travel
route shall be subject to further agreement by the parties concerned.
2. That the payment to be made by the Principal for any hauling or delivery transport services fully rendered by the Contractor shall be on a per trip basis depending on the size or classification of the
truck being used in the transport service, to wit:
a) If the hauling or delivery service shall require a truck of six wheeler, the payment on a per trip basis from Mariveles to Metro shall be THREE HUNDRED PESOS (P300.00) and EFFECTIVE December 15, 1984.
b) If the hauling or delivery service require a truck of ten wheeler, the payment on a per trip basis, following the same route mentioned, shall be THREE HUNDRED FIFTY (P350.00) Pesos and Effective December 15, 1984.
3. That for the amount involved, the Contractor will be to [sic] provide for [sic] at least two (2) helpers;
4. The Contractor shall exercise direct control and shall be responsible to the Principal for the cost of any damage to, loss of any goods, cargoes, finished products or the like, while the same are in transit,
or due to reckless [sic] of its men utilized for the purpose above mentioned;
5. That the Contractor shall have absolute control and disciplinary power over its men working for him subject to this agreement, and that the Contractor shall hold the Principal free and harmless from any
liability or claim that may arise by virtue of the Contractor's non-compliance to the existing provisions of the Minimum Wage Law, the Employees Compensation Act, the Social Security System Act, or any
other such law or decree that may hereafter be enacted, it being clearly understood that any truck drivers, helpers or men working with and for the Contractor, are not employees who will be
indemnified by the Principal for any such claim, including damages incurred in connection therewith;
6. This contract shall take effect immediately upon the signing by the parties, subject to renewal on a year-to-year basis.[2]chanroblesvirtuallawlibrary
This contract of service was dated December 12, 1984. It was subsequently renewed twice, on July 10, 1989 and September 28, 1992. Except for the rates to be paid to the petitioner, the terms of the contracts were substantially the same. The relationship of the respondent company and the petitioner was allegedly governed by this contract of service.
The respondents insisted that the petitioner had the sole control over the means and methods by which his work was accomplished. He paid the wages of his helpers and exercised control over them. As such, the petitioner was not entitled to regularization because he was not an employee of the respondent company. The respondents, likewise, maintained that they did not dismiss the petitioner. Rather, the severance of his contractual relation with the respondent company was due to his violation of the terms and conditions of their contract. The petitioner allegedly failed to observe the minimum degree of diligence in the proper maintenance of the truck he was using, thereby exposing respondent company to unnecessary significant expenses of overhauling the said truck.
After the parties had filed their respective pleadings, the Labor Arbiter rendered the Decision dated February 3, 1997, finding the respondents guilty of illegal dismissal. The Labor Arbiter declared that the petitioner was a regular employee of the respondent company as he was performing a service that was necessary and desirable to the latter's business. Moreover, it was noted that the petitioner had discharged his duties as truck driver for the respondent company for a continuous and uninterrupted period of more than ten years.
The contract of service invoked by the respondents was declared null and void as it constituted a circumvention of the constitutional provision affording full protection to labor and security of tenure. The Labor Arbiter found that the petitioner's dismissal was anchored on his insistent demand to be regularized. Hence, for lack of a valid and just cause therefor and for their failure to observe the due process requirements, the respondents were found guilty of illegal dismissal. The dispositive portion of the Labor Arbiter's decision states:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring respondent SUPREME PACKAGING, INC. and/or MR. ALVIN LEE, Plant Manager, with business address at BEPZ, Mariveles, Bataan guilty of illegal dismissal, ordering said respondent to pay complainant his separation pay equivalent to one (1) month pay per year of service based on the average monthly pay of P10,800.00 in lieu of reinstatement as his reinstatement back to work will not do any good between the parties as the employment relationship has already become strained and full backwages from the time his compensation was withheld on February 23, 1995 up to January 31, 1997 (cut-off date) until compliance, otherwise, his backwages shall continue to run. Also to pay complainant his 13th month pay, night shift differential pay and service incentive leave pay hereunder computed as follows:
a) Backwages .. P248,400.00b) Separation Pay .... P140,400.00c) 13th month pay .P 10,800.00d) Service Incentive Leave Pay .. 2,040.00
TOTAL P401,640.00Respondent is also ordered to pay ten (10%) of the amount due the complainant as attorney's fees.
SO ORDERED.[3]chanroblesvirtuallawlibrary
The respondents seasonably interposed an appeal with the NLRC. However, the appeal was dismissed by the NLRC in its Decision[4] dated January 27, 1998, as it affirmed in toto the decision of the Labor Arbiter. In the said decision, the NLRC characterized the contract of service between the respondent company and the petitioner as a 'scheme that was resorted to by the respondents who, taking advantage of the petitioner's unfamiliarity with the English language and/or legal niceties, wanted to evade the effects and implications of his becoming a regularized employee.[5]chanroblesvirtuallawlibrary
The respondents sought reconsideration of the January 27, 1998 Decision of the NLRC. Acting thereon, the NLRC rendered another Decision[6] dated July 10, 1998, reversing its earlier decision and, this time, holding that no employer-employee relationship existed between the respondent company and the petitioner. In reconsidering its earlier decision, the NLRC stated that the respondents did not exercise control over the means and methods by which the petitioner accomplished his delivery services. It upheld the validity of the contract of service as it pointed out that said contract was silent as to the time by which the petitioner was to make the deliveries and that the petitioner could hire his own helpers whose wages would be paid from his own account. These factors indicated that the petitioner was an independent contractor, not an employee of the respondent company.
The NLRC ruled that the contract of service was not intended to circumvent Article 280 of the Labor Code on the regularization of employees. Said contract, including the fixed period of employment contained therein, having been knowingly and voluntarily entered into by the parties thereto was declared valid citing Brent School, Inc. v. Zamora.[7] The NLRC, thus, dismissed the petitioner's complaint for illegal dismissal.
The petitioner sought reconsideration of the July 10, 1998 Decision but it was denied by the NLRC in its Resolution dated September 7, 1998. He then filed with this Court a petition for certiorari, which was referred to the CA following the ruling in St. Martin Funeral Home v. NLRC.[8]chanroblesvirtuallawlibrary
The appellate court rendered the Decision dated April 28, 2000, reversing the July 10, 1998 Decision of the NLRC and reinstating the decision of the Labor Arbiter. In the said decision, the CA ruled that the petitioner was a regular employee of the respondent company because as its truck driver, he performed a service that was indispensable to the latter's business. Further, he had been the respondent company's truck driver for ten continuous years. The CA also reasoned that the petitioner could not be considered an independent contractor since he had no substantial capital in the form of tools and machinery. In fact, the truck that he drove belonged to the respondent company. The CA also observed that the routing slips that the respondent company issued to the petitioner showed that it exercised control over the latter. The routing slips indicated the chronological order and priority of delivery, the urgency of certain deliveries and the time when the goods were to be delivered to the customers.
The CA, likewise, disbelieved the respondents' claim that the petitioner abandoned his job noting that he just filed a complaint for regularization. This actuation of the petitioner negated the respondents' allegation that he abandoned his job. The CA held that the respondents failed to discharge their burden to show that the petitioner's dismissal was for a valid and just cause. Accordingly, the respondents were declared guilty of illegal dismissal and the decision of the Labor Arbiter was reinstated.
In its April 28, 2000 Decision, the CA denounced the contract of service between the respondent company and the petitioner in this wise:
In summation, we rule that with the proliferation of contracts seeking to prevent workers from attaining the status of regular employment, it is but necessary for the courts to scrutinize with extreme caution their legality and justness. Where from the circumstances it is apparent that a contract has been entered into to preclude acquisition of tenurial security by the employee, they should be struck down and disregarded as contrary to public policy and morals. In this case, the 'contract of service is just another attempt to exploit the unwitting employee and deprive him of the protection of the Labor Code by making it appear that the stipulations of the parties were governed by the Civil Code as in ordinary transactions.[9]chanroblesvirtuallawlibrary
However, on motion for reconsideration by the respondents, the CA made a complete turn around as it rendered the assailed Resolution dated December 15, 2000 upholding the contract of service between the petitioner and the respondent company. In reconsidering its decision, the CA explained that the extent of control exercised by the respondents over the petitioner was only with respect to the result but not to the means and methods used by him. The CA cited the following circumstances: (1) the respondents had no say on how the goods were to be delivered to the customers; (2) the petitioner had the right to employ workers who would be under his direct control; and (3) the petitioner had no working time.
The fact that the petitioner had been with the respondent company for more than ten years was, according to the CA, of no moment because his status was determined not by the length of service but by the contract of service. This contract, not being contrary to morals, good customs, public order or public policy, should be given the force and effect of law as between the respondent company and the petitioner. Consequently, the CA reinstated the July 10, 1998 Decision of the NLRC dismissing the petitioner's complaint for illegal dismissal.
Hence, the recourse to this Court by the petitioner. He assails the December 15, 2000 Resolution of the appellate court alleging that:
(A)
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN GIVING MORE CONSIDERATION TO THE 'CONTRACT OF SERVICE ENTERED INTO BY PETITIONER AND PRIVATE RESPONDENT THAN ARTICLE 280 OF THE LABOR CODE OF THE PHILIPPINES WHICH CATEGORICALLY DEFINES A REGULAR EMPLOYMENT NOTWITHSTANDING ANY WRITTEN AGREEMENT TO THE CONTRARY AND REGARDLESS OF THE ORAL AGREEMENT OF THE PARTIES;
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN REVERSING ITS OWN FINDINGS THAT PETITIONER IS A REGULAR EMPLOYEE AND IN HOLDING THAT THERE EXISTED NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PRIVATE RESPONDENT AND PETITIONER IN AS MUCH AS THE 'CONTROL TEST WHICH IS CONSIDERED THE MOST ESSENTIAL CRITERION IN DETERMINING THE EXISTENCE OF SAID RELATIONSHIP IS NOT PRESENT.[10]chanroblesvirtuallawlibrary
The threshold issue that needs to be resolved is whether there existed an employer-employee relationship between the respondent company and the petitioner. We rule in the affirmative.
The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's conduct.[11] The most important element is the employer's control of the employee's conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.[12] All the four elements are present in this case.
First. Undeniably, it was the respondents who engaged the services of the petitioner without the intervention of a third party.
Second. Wages are defined as 'remuneration or earnings, however designated, capable of being expressed in 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 an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered.[13] That the petitioner was paid on a per trip basis is not significant. This is merely a method of computing compensation and not a basis for determining the existence or absence of employer-employee relationship. One may be paid on the basis of results or time expended on the work, and may or may not acquire an employment status, depending on whether the elements of an employer-employee relationship are present or not.[14] In this case, it cannot be gainsaid that the petitioner received compensation from the respondent company for the services that he rendered to the latter.
Moreover, under the Rules Implementing the Labor Code, every employer is required to pay his employees by means of payroll.[15] The payroll should show, among other things, the employee's rate of pay, deductions made, and the amount actually paid to the employee. Interestingly, the respondents did not present the payroll to support their claim that the petitioner was not their employee, raising speculations whether this omission proves that its presentation would be adverse to their case.[16]chanroblesvirtuallawlibrary
Third. The respondents' power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver. They exercised this power by terminating the petitioner's services albeit in the guise of 'severance of contractual relation due allegedly to the latter's breach of his contractual obligation.
Fourth. As earlier opined, of the four elements of the employer-employee relationship, the 'control test is the most important. Compared to an employee, an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility according to its own manner and method, free from the
control and direction of the principal in all matters connected with the performance of the work except as to the results thereof.[17] Hence, while an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the employer's power to control the means and methods by which the employee's work is to be performed and accomplished.[18]chanroblesvirtuallawlibrary
Although the respondents denied that they exercised control over the manner and methods by which the petitioner accomplished his work, a careful review of the records shows that the latter performed his work as truck driver under the respondents' supervision and control. Their right of control was manifested by the following attendant circumstances:
1. The truck driven by the petitioner belonged to respondent company;
2. There was an express instruction from the respondents that the truck shall be used exclusively to deliver respondent company's goods; [19]
3. Respondents directed the petitioner, after completion of each delivery, to park the truck in either of two specific places only, to wit: at its office in Metro at 2320 Osmea Street, Makati City or at BEPZ, Mariveles, Bataan;[20] and
4. Respondents determined how, where and when the petitioner would perform his task by issuing to him gate passes and routing slips. [21]
a. The routing slips indicated on the column REMARKS, the chronological order and priority of delivery such as 1st drop, 2nd drop, 3rd drop, etc. This meant that the petitioner had to deliver the same according to the order of priority indicated therein.
b. The routing slips, likewise, showed whether the goods were to be delivered urgently or not by the word RUSH printed thereon.
c. The routing slips also indicated the exact time as to when the goods were to be delivered to the customers as, for example, the words tomorrow morning was written on slip no. 2776.
These circumstances, to the Court's mind, prove that the respondents exercised control over the means and methods by which the petitioner accomplished his work as truck driver of the respondent company. On the other hand, the Court is hard put to believe the respondents' allegation that the petitioner was an independent contractor engaged in providing delivery or hauling services when he did not even own the truck used for such services. Evidently, he did not possess substantial capitalization or investment in the form of tools, machinery and work premises. Moreover, the petitioner performed the delivery services exclusively for the respondent company for a continuous and uninterrupted period of ten years.
The contract of service to the contrary notwithstanding, the factual circumstances earlier discussed indubitably establish the existence of an employer-employee relationship between the respondent company and the petitioner. It bears stressing that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract and providing therein that the employee is an independent contractor when, as in this case, the facts clearly show otherwise. Indeed, the employment status of a person is defined and prescribed by law and not by what the parties say it should be.[22]chanroblesvirtuallawlibrary
Having established that there existed an employer-employee relationship between the respondent company and the petitioner, the Court shall now determine whether the respondents validly dismissed the petitioner.
As a rule, the employer bears the burden to prove that the dismissal was for a valid and just cause.[23] In this case, the respondents failed to prove any such cause for the petitioner's dismissal. They insinuated that the petitioner abandoned his job. To constitute abandonment, these two factors must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship.[24] Obviously, the petitioner did not intend to sever his relationship with the respondent company for at the time that he allegedly abandoned his job, the petitioner just filed a complaint for regularization, which was forthwith amended to one for illegal dismissal. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement.[25]chanroblesvirtuallawlibrary
Neither can the respondents' claim that the petitioner was guilty of gross negligence in the proper maintenance of the truck constitute a valid and just cause for his dismissal. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.[26] The negligence, to warrant removal from service, should not merely be gross but also habitual.[27] The single and isolated act of the petitioner's negligence in the proper maintenance of the truck alleged by the respondents does not amount to 'gross and habitual neglect warranting his dismissal.
The Court agrees with the following findings and conclusion of the Labor Arbiter:
As against the gratuitous allegation of the respondent that complainant was not dismissed from the service but due to complainant's breach of their contractual relation, i.e., his violation of the terms and conditions of the contract, we are very much inclined to believe complainant's story that his dismissal from the service was anchored on his insistent demand that he be considered a regular employee. Because complainant in his right senses will not just abandon for that reason alone his work especially so that it is only his job where he depends chiefly his existence and support for his family if he was not aggrieved by the respondent when he was told that his services as driver will be terminated on February 23, 1995.[28]chanroblesvirtuallawlibrary
Thus, the lack of a valid and just cause in terminating the services of the petitioner renders his dismissal illegal. Under Article 279 of the Labor Code, an employee who is unjustly dismissed is entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.[29] However, as found by the Labor Arbiter, the circumstances obtaining in this case do not warrant the petitioner's reinstatement. A more equitable disposition, as held by the Labor Arbiter, would be an award of separation pay equivalent to one month for every year of service from the time of his illegal dismissal up to the finality of this judgment in addition to his full backwages, allowances and other benefits.
WHEREFORE, the instant petition is GRANTED. The Resolution dated December 15, 2000 of the Court of Appeals reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is REVERSED and SET ASIDE. The Decision dated February 3, 1997 of the Labor Arbiter in NLRC Case No. RAB-III-02-6181-5, finding the respondents guilty of illegally terminating the employment of petitioner Pedro Chavez, is REINSTATED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.
Endnotes:
[1] Penned by Associate Justice Oswaldo D. Agcaoili (retired), with Associate Justices Renato C. Dacudao and Andres B. Reyes, Jr., concurring. cralaw
[2] Rollo, pp. 113-114.cralaw
[3] Id. at 151.cralaw
[4] Penned by Commissioner Rogelio I. Rayala, with Presiding Commissioner Raul T. Aquino and Commissioner Victoriano R. Calaycay, concurring; Id. at 177-184.cralaw
[5] Rollo, pp. 183-184.cralaw
[6] Penned by Commissioner Angelita A. Gacutan, with Presiding Commissioner Raul T. Aquino and Commissioner Victoriano R. Calaycay, concurring; Id. at 60-73.cralaw
[7] 181 SCRA 702 (1990).cralaw
[8] 295 SCRA 494 (1998).cralaw
[9] Rollo, pp. 42-43.cralaw
[10] Id. at 13-14.cralaw
[11] Sy v. Court of Appeals, 398 SCRA 301 (2003).cralaw
[12] Id. at 307-308.cralaw
[13] LABOR CODE, ART. 97(f).cralaw
[14] Tan v. Lagrama, 387 SCRA 393 (2002).cralaw
[15] Book III, Rule X, Sec. 6(a).cralaw
[16] Tan v. Lagrama, supra.cralaw
[17] Id. at 399.cralaw
[18] Id.cralaw
[19] Annex C of Respondents' Position Paper; Rollo, p. 117. cralaw
[21] Annexes A to C of Petitioner's Reply to Respondents' Position Paper. cralaw
[22] AZUCENA, I THE LABOR CODE (1999 ed.) 127.cralaw
[23] Hacienda Fatima v. National Federation of Sugarcane Workers-Food and General Trade, 396 SCRA 518 (2003).
Article 282 of the Labor Code provides: An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative;
(e) Other causes analogous to the foregoing.cralaw
[24] Buenviaje v. Court of Appeals, 391 SCRA 440 (2002).cralaw
[25] Globe Telecom, Inc. v. Florendo-Flores, 390 SCRA 201 (2002)cralaw
[26] Philippine Aeolus Automotive United Corporation v. NLRC, 331 SCRA 237 (2000).cralaw
The well-entrenched rule, especially in labor cases, is that findings of fact of quasi-judicial bodies, like the National Labor Relations Commission (NLRC), are accorded with respect, even finality, if supported by substantial evidence. Particularly when passed upon and upheld by the Court of Appeals, they are binding and conclusive upon the Supreme Court and will not normally be disturbed.[1]
The Court finds no reason in this case to depart from such doctrine.
Petitioner G & M (Phils.), Inc. recruited respondent Cruz as trailer driver for its foreign principal, Salim Al Yami Est., for a period of two years, and with a stipulated monthly salary of US$625, starting June 6, 1990. Respondent alleged that when he arrived in the Kingdom of Saudi Arabia, he was made to sign an employment contract in blank and his salary was reduced to SR604.00. Seven months into employment, his employer deported him on December 28, 1990. According to respondent, the cause for his dismissal was his complaint for sub-human working conditions, non-payment of wages and overtime pay, salary deduction and change of employer. Hence, he filed with the Labor Arbiter an Affidavit/Complaint against petitioner for illegal dismissal, underpayment and non-payment of wages, and refund of transportation expenses. Respondent claims that he was only paid in an amount equivalent to five months salary and he did not receive his salary for the last two months. Respondent submitted a copy of his pay slip showing the amount of SR604.00 as his basic salary.[2]
Petitioner contends that respondent abandoned his job when he joined an illegal strike and refused to report for work, constituting a breach of his employment contract and a valid cause for termination of employment. Petitioner also claims that the pay slip submitted by respondent is inadmissible because the original copy was not presented and that its existence, due execution, genuineness and authenticity were not established.[3]
The Labor Arbiter found merit in petitioner's claim that respondent abandoned his job, but nevertheless granted respondent's claim for underpayment of wages and two months unpaid salary. The dispositive portion of the Labor Arbiter's decision reads:
WHEREFORE, premises considered, the charge of illegal dismissal is hereby denied for lack of merit. However, respondent G & M (Phils.), Inc., is hereby ordered to pay within ten (10) days from receipt hereof, herein complainant Epifanio Cruz, the sums of P77,455.00 to be adjusted as earlier stated, and US$1,250.00 or its peso equivalent at the time of payment.
SO ORDERED.[4]
On partial appeal to the NLRC, the same was dismissed per Resolution dated June 10, 1998, with the following dispositive portion:
WHEREFORE, the appeal is Dismissed for lack of merit. Respondent G & M (Phils.) Inc., and Salim Al Yami Est., are hereby ordered jointly and severally liable to pay complainant Epifanio Cruz the Philippine Peso equivalent at the time of actual payment of the following sums:
a) THREE THOUSAND ONE HUNDRED TWENTY FIVE US DOLLARS (US$3,125.00) less THREE THOUSAND TWENTY SAUDI RIYALS (SR3,020.000) representing salary differentials for five months; and
b) ONE THOUSAND TWO HUNDRED FIFTY US DOLLARS (US$1,250.00) representing unpaid salaries for two (2) months.
Other dispositions of the appealed Decision stand AFFIRMED.
SO ORDERED.[5]
Petitioner filed a special civil action for certiorari in the Court of Appeals, docketed as CA-G.R. SP No. 49729, but it was dismissed for lack of merit.[6]
Hence, this petition for review on certiorari under Rule 45 of the Rules of Court, based on the following grounds:
THE COURT OF APPEALS FAILED TO CONSIDER THE FACT THAT WITH THE RESPONDENT'S ADMISSION OF RECEIPT OF THE PAYMENTS OF HIS SALARIES ALTHOUGH ALLEGEDLY SHORT OF WHAT WAS STIPULATED IN HIS CONTRACT - THE 'BURDEN OF EVIDENCE IS NOW SHIFTED UPON HIM TO SHOW CONCRETE PROOF THAT INDEED HE WAS SHORT-CHANGED OF HIS SALARIES.
CONTRARY TO THE COURT OF APPEAL'S [sic] CONCLUSION, THE 'PAYROLL ISSUE IS OF GREAT IMPORTANCE IN THE DETERMINATION OF THE ISSUES IN THE CASE AT BAR INASMUCH AS IT IS THE RESPONDENT WHO HAS THE BURDEN OF PRESENTING EVIDENCE OF SHORT PAYMENT AFTER HAVING ADMITTED TO HAVE RECEIVED CERTAIN AMOUNTS FOR HIS SALARIES.[7]
This petition mainly involves factual issues, i.e., whether or not there is evidence on record to support the findings of the Labor Arbiter, the NLRC and the Court of Appeals that respondent is entitled to the payment of salary differential and unpaid wages. This calls for a re-examination of the evidence, which the Court cannot entertain. As stated earlier, factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdiction, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence. It is not the Court's function to assess and evaluate the evidence all over again, particularly where the findings of both the Arbiter and the Court of Appeals concur.[8]
Nevertheless, even if the Court delves into the issues posed by petitioner, there is still no reason to grant the petition.
It was the finding of the Court of Appeals that it is the burden of petitioner to prove that the salaries paid by its foreign principal complied with the contractual stipulations of their agency-worker agreement. Since petitioner failed to discharge such burden, then it was correct for the NLRC to rely on respondent's claim of underpayment.[9]
The Court of Appeals also ruled that since the positive testimony of respondent, as creditor, is sufficient to prove non-payment even without the indefinite testimony of petitioner, as debtor, then the payroll (pay slip), presented by respondent to prove that he only received the amount of SR604.00 as basic monthly salary, is immaterial.[10]
Petitioner, however, insists that since respondent already admitted that his employer paid him, albeit short of what was stipulated upon, then petitioner has no more obligation to show that respondent was paid, and it now rests upon respondent to prove underpayment, and the pay slip submitted by respondent, which is of 'questionable authenticity, is not enough to prove the same.[11]
The rule is that the burden of proving payment of monetary claims rests on the employer,[12] in this case, herein petitioner, it being the employment agency or recruitment entity, and agent of the foreign principal, Salim Al Yami Est.,[13] which recruited respondent. In Jimenez vs. NLRC,[14] which involves a claim for unpaid wages/commissions, separation pay and damages against an employer, the Court ruled that where a person is sued for a debt admits that the debt was originally owed, and pleads payment in whole or in part, it is incumbent upon him to prove such payment. This is based on the principle of evidence that each party must prove his affirmative allegations. Since petitioner asserts that respondent has already been fully paid of his stipulated salary, the burden is upon petitioner to prove such fact of full payment.
In this case, while respondent may have admitted that he has actually been paid the amount of SR604.00 as monthly salary, it does not discharge petitioner from proving full payment of the stipulated monthly salary of US$625.00 based on the Agency-Worker Agreement. Respondent's admission that some payments have been made does not change the burden of proof. Petitioner still has the burden of establishing payments beyond those admitted by respondent.[15]
Thus, it was stated in the Jimenez case that:
As a general rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment.
When the existence of a debt is fully established by the evidence contained in the record, the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor. Where the debtor introduces some evidence of payment, the burden of going forward with the evidence - as distinct from the general burden of proof - shifts to the creditor, who is then under a duty of producing some evidence to show non-payment.
Petitioner merely denied respondent's claim of underpayment. It did not present any controverting evidence to prove full payment. Hence, the findings of the Labor Arbiter, the NLRC and the Court of Appeals that respondent was not fully paid of his wages stand.
The positive testimony of a creditor may be sufficient of itself to show non-payment, even when met by indefinite testimony of the debtor. Similarly, the testimony of the debtor may also be sufficient to show payment, but, where his testimony is contradicted by the other party or by a disinterested witness, the issue may be determined against the debtor since he has the burden of proof. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue.
Hence, for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the allegations of private respondents.[16]
With regard to the admissibility of the pay slips, both the Labor Arbiter and the NLRC found that it was admissible as evidence. As a general rule, the Court is not duty-bound to delve into the accuracy of the NLRC's factual findings in the absence of a clear showing that these were arbitrary and bereft of any rational basis.[17] In the present case, petitioner failed to demonstrate any arbitrariness or lack of rational basis on the part of the NLRC.[18]
Article 221 of the Labor Code provides that proceedings before the NLRC are not covered by the technical rules of evidence and procedure. The probative value of the copy of the pay slips is aptly justified by the NLRC, as follows:
the payslips are original duplicates of computerized payslips issued by the employer, Salim Al Yami Est., to its workers which contain entries such as pay date, employee's I.D. number, employee name, category, basic rate, overtime hours and other relevant information, including an itemization of earnings (basic pay, overtime pay, meal allowance for the period covered) and deductions. The fact that the payslips are not authenticated will not militate against complainant's claim, considering that in presenting the payslips, complainant has established the fact of underpayment, and the burden has shifted to the respondent to prove that complainant was totally compensated for actual services rendered.[19] (Emphasis supplied)
WHEREFORE, the petition is DENIED for lack merit.
SO ORDERED.
Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
Endnotes:
[1] San Juan De Dios Educational Foundation Employees Union-Alliance of Filipino Workers vs. San Juan De Dios Educational Foundation, G.R. No. 143341, May 28, 2004, 430 SCRA 193, 205-206.cralaw
[2] CA Rollo, p. 34.cralaw
[3] Id., pp. 35-36, Labor Arbiter's Decision dated October 29, 1997.cralaw
[4] Id., pp. 38-39.cralaw
[5] Id., pp. 23-24.cralaw
[6] Id., p. 64, Court of Appeals Decision dated June 7, 1999, penned by Associate Justice Portia Alio-Hormachuelos, with Associate Justices Bernardo P. Abesamis and Eloy R. Bello, Jr., concurring.cralaw
[7] Rollo, p. 13.cralaw
[8] Stamford Marketing Corp. vs. Julian, G.R. No. 145496, February 24, 2004, 423 SCRA 633, 651.cralaw
[12] Villar vs. National Labor Relations Commission, G.R. No. 130935, May 11, 2000, 331 SCRA 686, 695.cralaw
[13] MC Engineering, Inc. vs. National Labor Relations Commission, G.R. No. 142314, June 28, 2001, 360 SCRA 183, 190; Royal Crowne Internationale vs. NLRC, G.R. No. 78085, October 16, 1989, 178 SCRA 569, 575-576.cralaw
[14] G.R. No. 116960, April 2, 1996, 256 SCRA 84.cralaw
[15] Jimenez case, supra., at pp. 89-90.cralaw
[16] Id., pp. 90-91.cralaw
[17] Hacienda Fatima vs. National Federation of Sugarcane Workers-Food and General Trade, G.R. No. 149440, January 28, 2003, 396 SCRA 518, 527-528.cralaw
[18] Tan vs. National Labor Relations Commission, G.R. No. 128290, November 24, 1998, 299 SCRA 169, 179.cralaw
[19] CA Rollo, pp. 21-22.
Republic of the PhilipppinesSUPREME COURT
Manila
FIRST DIVISION
[G.R. No. 155214. February 13, 2004]
R & E TRANSPORT, INC., and HONORIO ENRIQUEZ, Petitioners, vs. AVELINA P. LATAG, representing her deceased husband, PEDRO M. LATAG, Respondents.
D E C I S I O N
PANGANIBAN, J.:chanroblesvirtuallawlibrary
Factual issues may be reviewed by the Court of Appeals (CA) when the findings of fact of the National Labor Relations Commission (NLRC) conflict with those of the labor arbiter. By the same token, this Court may review factual conclusions of the CA when they are contrary to those of the NLRC or of the labor arbiter.
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to nullify the June 3, 2002 Decision[2] and the August 28, 2002 Resolution[3] of the Court of Appeals in CA-GR SP No. 67998. The appellate court disposed as follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed Order of public respondent NLRC is SET ASIDE. The March 14, 2001[4] [D]ecision of the Labor Arbiter a quo is REINSTATED.[5]chanroblesvirtuallawlibrary
The challenged Resolution denied petitioners Motion for Reconsideration.
The Factual Antecedentschanroblesvirtuallawlibrary
The antecedents of the case are narrated by the CA as follows:chanroblesvirtuallawlibrary
Pedro Latag was a regular employee x x x of La Mallorca Taxi since March 1, 1961. When La Mallorca ceased from business operations, [Latag] x x x transferred to [petitioner] R & E Transport, Inc. x x x. He was receiving an average daily salary of five hundred pesos (P500.00) as a taxi driver.chanroblesvirtuallawlibrary
[Latag] got sick in January 1995 and was forced to apply for partial disability with the SSS, which was granted. When he recovered, he reported for work in September 1998 but was no longer allowed to continue working on account of his old age.chanroblesvirtuallawlibrary
Latag thus asked Felix Fabros, the administrative officer of [petitioners], for his retirement pay pursuant to Republic Act 7641 but he was ignored. Thus, on December 21, 1998, [Latag] filed a case for payment of his retirement pay before the NLRC.chanroblesvirtuallawlibrary
Latag however died on April 30, 1999. Subsequently, his wife, Avelina Latag, substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in favor of [Latag], the dispositive portion of which reads:chanroblesvirtuallawlibrary
WHEREFORE, judgment is hereby rendered ordering x x x LA MALLORCA TAXI, R & E TRANSPORT, INC. and their owner/chief executive officer HONORIO ENRIQUEZ to jointly and severally pay MRS. AVELINA P. LATAG the sum of P277,500.00 by way of retirement pay for her deceased husband, PEDRO M. LATAG.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
On January 21, 2000, [Respondent Avelina Latag,] with her then counsel[,] was invited to the office of [petitioners] counsel and was offered the amount of P38,500.00[,] which she accepted. [Respondent] was also asked to sign an already prepared quitclaim and release and a joint motion to dismiss the case.chanroblesvirtuallawlibrary
After a day or two, [respondent] received a copy of the January 10, 2000 [D]ecision of the Labor Arbiter.chanroblesvirtuallawlibrary
On January 24, 2000, [petitioners] filed the quitclaim and motion to dismiss. Thereafter, on May 23, 2000, the Labor Arbiter issued an order, the relevant portion of which states:chanroblesvirtuallawlibrary
WHEREFORE, the decision stands and the Labor Arbitration Associate of this Office is directed to prepare the Writ of Execution in due course.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
On January 21, 2000, [petitioners] interposed an appeal before the NLRC. On March 14, 2001, the latter handed down a [D]ecision[,] the decretal portion of which provides:chanroblesvirtuallawlibrary
WHEREFORE, in view of the foregoing, respondents Appeal is hereby DISMISSED for failure to post a cash or surety bond, as mandated by law.chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
On April 10, 2001, [petitioners] filed a motion for reconsideration of the above resolution. On September 28, 2001, the NLRC came out with the assailed [D]ecision, which gave due course to the motion for reconsideration.[6] (Citations omitted)chanroblesvirtuallawlibrary
Respondent appealed to the CA, contending that under Article 223 of the Labor Code and Section 3, Rule VI of the New Rules of Procedure of the NLRC, an employers appeal of a decision involving monetary awards may be perfected only upon the posting of an adequate cash or surety bond.
Ruling of the Court of Appealschanroblesvirtuallawlibrary
The CA held that the labor arbiters May 23, 2000 Order had referred to the earlier January 10, 2000 Decision awarding respondentP277,500 as retirement benefit.chanroblesvirtuallawlibrary
According to the appellate court, because petitioners appeal before the NLRC was not accompanied by an appropriate cash or surety bond, such appeal was not perfected. The CA thus ruled that the labor arbiters January 10, 2000 Decision and May 23, 2000 Order had already become final and executory.chanroblesvirtuallawlibrary
Hence, this Petition.[7]
Issueschanroblesvirtuallawlibrary
Petitioners submit the following issues for our consideration:
Ichanroblesvirtuallawlibrary
Whether or not the Court should respect the findings of fact [of] the NLRC as against [those] of the labor arbiter.
IIchanroblesvirtuallawlibrary
Whether or not, in rendering judgment in favor of Petitioners, the NLRC committed grave abuse of discretion.
Whether or not private respondent violated the rule on forum-shopping.
IVchanroblesvirtuallawlibrary
Whether or not the appeal of petitioners from the Order of the labor arbiter to the NLRC involves [a] monetary award.[8]chanroblesvirtuallawlibrary
In short, petitioners raise these issues: (1) whether the CA acted properly when it overturned the NLRCs factual findings; (2) whether the rule on forum shopping was violated; and (3) whether the labor arbiters Order of May 23, 2000 involved a monetary award.
The Courts Rulingchanroblesvirtuallawlibrary
The Petition is partly meritorious.
First Issue:Factual Findings of the NLRCchanroblesvirtuallawlibrary
Petitioners maintain that the CA erred in disregarding the factual findings of the NLRC and in deciding to affirm those of the labor arbiter. Allegedly, the NLRC findings were based on substantial evidence, while those of the labor arbiter were groundless. Petitioners add that the appellate court should have refrained from tackling issues of fact and, instead, limited itself to those of jurisdiction or grave abuse of discretion on the part of the NLRC.chanroblesvirtuallawlibrary
The power of the CA to review NLRC decisions via a Rule 65 petition is now a settled issue. As early as St. Martin Funeral Homes v. NLRC,[9] we have definitively ruled that the proper remedy to ask for the review of a decision of the NLRC is a special civil action for certiorari under Rule 65 of the Rules of Court,[10] and that such petition should be filed with the CA in strict observance of the doctrine on the hierarchy of courts.[11] Moreover, it has already been explained that under Section 9 of Batas Pambansa (BP) 129, as amended by Republic Act 7902,[12] the CA -- pursuant to the exercise of its original jurisdiction over petitions for certiorari -- was specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.[13]chanroblesvirtuallawlibrary
Likewise settled is the rule that when supported by substantial evidence,[14] factual findings made by quasi-judicial and administrative bodies are accorded great respect and even finality by the courts. These findings are not infallible, though; when there is a showing that they were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts.[15] Hence, when factual findings of the NLRC are contrary to those of the labor arbiter, the evidentiary facts may be reviewed by the appellate court.[16] Such is the situation in the present case; thus, the doors to a review are open.[17]chanroblesvirtuallawlibrary
The very same reason that behooved the CA to review the factual findings of the NLRC impels this Court to take its own look at the findings of fact. Normally, the Supreme Court is not a trier of facts.[18] However, since the findings of fact in the present case are conflicting,[19] it waded through the records to find out if there was enough basis for the appellate courts reversal of the NLRC Decision.
Number of Creditable Yearsof Service for Retirement Benefitschanroblesvirtuallawlibrary
Petitioners do not dispute the fact that the late Pedro M. Latag is entitled to retirement benefits. Rather, the bone of contention is the number of years that he should be credited with in computing those benefits. On the one hand, we have the findings of the labor arbiter,[20] which the CA affirmed. According to those findings, the 23 years of employment of Pedro with La Mallorca Taxi must be added to his 14 years with R & E Transport, Inc., for a total of 37 years. On the other, we also have the findings of the NLRC[21] that Pedro must be credited only with his service to R & E Transport, Inc., because the evidence shows that the aforementioned companies are two different entities.chanroblesvirtuallawlibrary
After a careful and painstaking review of the evidence on record, we support the NLRCs findings. The labor arbiters conclusion -- that Mallorca Taxi and R & E Transport, Inc., are one and the same entity -- is negated by the documentary evidence presented by petitioners. Their evidence[22] sufficiently shows the following facts: 1) R & E Transport, Inc., was established only in 1978; 2) Honorio Enriquez, its president, was not a stockholder of La Mallorca Taxi; and 3) none of the stockholders of the latter company hold stocks in the former. In the face of such evidence, which the NLRC appreciated in its Decision, it seems that mere surmises and self-serving assertions of Respondent Avelina Latag formed the bases for the labor arbiters conclusions as follows:chanroblesvirtuallawlibrary
While [Pedro M. Latag] claims that he worked as taxi driver since March 1961 since the days of the La Mallorca Taxi, which was later renamed R & E Transport, Inc., [petitioners] limit the employment period to 14 years.chanroblesvirtuallawlibrary
Resolving this matter, we note [respondents] ID (Annex A, [Latag] position paper), which appears to bear the signature of Miguel Enriquez on the front portion and the date February 27, 1961 when [x x x Latag] started with the company. We also note an SSS document (Annex C) which shows that the date of initial coverage of Pedro Latag, with SSS No. 03-0772155, is February 1961.chanroblesvirtuallawlibrary
Viewed against [petitioners] non-disclaimer [sic] that La Mallorca preceded R & E Taxi, Inc.[;] x x x that both entities were/are owned by the Enriquez family, with [petitioner] Honorio [Enriquez] as the latters President[; and] x x x that La Mallorca was a different entity (page 2, [petitioners] position paper), we are of the conclusion that [Latags] stint with the Enriquez family dated back since February 1961 and thus, he should be entitled to retirement benefits for 37 years, as of the date of the filing of this case on December 12, 1998.[23]chanroblesvirtuallawlibrary
Furthermore, basic is the rule that the corporate veil may be pierced only if it becomes a shield for fraud, illegality or inequity committed against a third person.[24] We have thus cautioned against the inordinate application of this doctrine. In Philippine National Bank v. Andrada Electric & Engineering Company,[25] we said:chanroblesvirtuallawlibrary
x x x [A]ny application of the doctrine of piercing the corporate veil should be done with caution. A court should be mindful of the milieu where it is to be applied. It must be certain that the corporate fiction was misused to such an extent that injustice, fraud, or crime was committed against another, in disregard of its rights. The wrongdoing must be clearly and convincingly established; it cannot be presumed. Otherwise, an injustice that was never unintended may result from an erroneous application.
The question of whether a corporation is a mere alter ego is one of fact. Piercing the veil of corporate fiction may be allowed only if the following elements concur: (1) control -- not mere stock control, but complete domination -- not only of finances, but of policy and business practice in respect to the transaction attacked, must have been such that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) such control must have been used by the defendant to commit a fraud or a wrong to perpetuate the violation of a statutory or other positive legal duty, or a dishonest and an unjust act in contravention of plaintiffs legal right; and (3) the said control and breach of duty must have proximately caused the injury or unjust loss complained of.[26]chanroblesvirtuallawlibrary
Respondent has not shown by competent evidence that one taxi company had stock control and complete domination over the other or vice versa. In fact, no evidence was presented to show the alleged renaming of La Mallorca Taxi to R & E Transport, Inc. The seven-year gap between the time the former closed shop and the date when the latter came into being also casts doubt on any alleged intention of petitioners to commit a wrong or to violate a statutory duty. This lacuna in the evidence compels us to reverse the Decision of the CA affirming the labor arbiters finding of fact that the basis for computing Pedros retirement pay should be 37 years, instead of only 14 years.
Validity of the Quitclaim and Waiverchanroblesvirtuallawlibrary
As to the Quitclaim and Waiver signed by Respondent Avelina Latag, the appellate court committed no error when it ruled that the document was invalid and could not bar her from demanding the benefits legally due her husband. This is not say that all quitclaims are invalid per se. Courts, however, are wary of schemes that frustrate workers rights and benefits, and look with disfavor upon quitclaims and waivers that bargain these away.chanroblesvirtuallawlibrary
Courts have stepped in to annul questionable transactions, especially where there is clear proof that a waiver, for instance, was wangled from an unsuspecting or a gullible person; or where the agreement or settlement was unconscionable on its face.[27] A quitclaim is ineffective in barring recovery of the full measure of a workersrights, and the acceptance of benefits therefrom does not amount to estoppel.[28] Moreover, a quitclaim in which the consideration is scandalously low and inequitable cannot be an obstacle to the pursuit of a workers legitimate claim.[29]chanroblesvirtuallawlibrary
Undisputably, Pedro M. Latag was credited with 14 years of service with R & E Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641,[30] provides:chanroblesvirtuallawlibrary
Art. 287. Retirement. - x x x
x x xx x xx x xchanroblesvirtuallawlibrary
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.chanroblesvirtuallawlibrary
Unless the parties provide for broader inclusions, the term one half-month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
x x xx x xx x x (Italics supplied)chanroblesvirtuallawlibrary
The rules implementing the New Retirement Law similarly provide the above-mentioned formula for computing the one-half month salary.[31] Since Pedro was paid according to the boundary system, he is not entitled to the 13th month[32] and the service incentive pay;[33] hence, his retirement pay should be computed on the sole basis of his salary. chanroblesvirtuallawlibrary
It is accepted that taxi drivers do not receive fixed wages, but retain only those sums in excess of the boundary or fee they pay to the owners or operators of their vehicles.[34] Thus, the basis for computing their benefits should be the average daily income. In this case, the CA found that Pedro was earning an average of five hundred pesos (P500) per day. We thus compute his retirement pay as follows: P500 x 15 days x 14 years of service equals P105,000. Compared with this amount, the P38,850 he received, which represented just over one third of what was legally due him, was unconscionable.
Second Issue:Was There Forum Shopping?chanroblesvirtuallawlibrary
Also assailed are the twin appeals that two different lawyers filed for respondent before the CA. Petitioners argue that instead of accepting her explanation, the appellate court should have dismissed the appeals outright for violating the rule on forum shopping.chanroblesvirtuallawlibrary
Forum shopping is the institution of two or more actions or proceedings grounded on the same cause, on the supposition that one or the other court would render a favorable disposition.[35] Such act is present when there is an identity of parties, rights or causes of action, and reliefs sought in two or more pending cases.[36] It is usually resorted to by a party against whom an adverse judgment or order has been issued in one forum, in an attempt to seek and possibly to get a favorable opinion in another forum, other than by an appeal or a special civil action for certiorari.[37]chanroblesvirtuallawlibrary
We find, as the CA[38] did, that respondent has adequately explained why she had filed two appeals before the appellate court. In the August 5, 2002 Affidavit[39] that she attached as Annex A to her Compliance to Show Cause Order with Comment on petitioners Motion for Reconsideration,[40] she averred that she had sought the services of another counsel to file her Petition for certiorari before the CA. She did so after her original counsel had asked for an extension of time to file the Petition because of time constraints and a tremendous workload, only to discover later that the original counsel had filed a similar Petition.chanroblesvirtuallawlibrary
We cannot fault respondent for her tenacity. Besides, to disallow her appeal would not be in keeping with the policy of labor laws[41] to shun highly technical procedural laws in the higher interest of justice.
Third Issue:Monetary Awardchanroblesvirtuallawlibrary
Petitioners contention is that the labor arbiters January 10, 2000 Decision was supplanted by the Compromise Agreement that had preceded the formers official release[42] to, and receipt[43] by, the parties. It appears from the records that they had entered into an Amicable Settlement on January 21, 2000; that based on that settlement, respondent filed a Motion to Dismiss on January 24, 2000, before the labor arbiter who officially released on the same day his Decision dated January 10, 2000; that upon receipt of a copy thereof, respondent filed a Manifestation and Motion to Set Aside the Motion to Dismiss; and that the labor arbiter subsequently calendared the case for conference, held hearings thereon, and required the parties to exchange positions -- by way of comments, replies and rejoinders -- after which he handed down his May 23, 2000 Order. chanroblesvirtuallawlibrary
Under the circumstances, the case was in effect reopened by the proceedings held after respondent had filed her Manifestation and Motion to Set Aside the Motion to Dismiss. This ruling is in accordance with the fourth paragraph of Section 2, Rule V of the New Rules of Procedure of the NLRC,[44] which therefore correctly held as follows:chanroblesvirtuallawlibrary
x x x Thus, the further hearings conducted thereafter, to determine the validity of complainants manifestation and motion are but mute confirmation that indeed the 10 January 2000 decision in this case has not as yet attained finality. Finally, the appealed order of 23 May 2000 itself declaring [that] the decision stands and the Labor Arbitration Associate of this office is directed to prepare the Writ of Execution in due course, obviously, is a conclusion that the decision in this case has been supplanted and rendered functus officio by the herein parties acts. Thus, when the Labor Arbiter a quo found in his appealed order that the amount of P38,850.00 is unconscionable viewed against the amount awarded in the decision, the same became appealable independently of the 10 January 2000 decision, which has not attained finality, in the first place.[45]
chanroblesvirtuallawlibrary
We cannot concur, however, in petitioners other contention that the May 23, 2000 Order did not involve a monetary award. If the amicable settlement between the parties had rendered the January 10, 2000 Decision functus oficio, then it follows that the monetary award stated therein was reinstated -- by reference -- by the aforementioned Order. The appeal from the latter should perforce have followed the procedural requirements under Article 223 of the Labor Code. chanroblesvirtuallawlibrary
As amended, this provision explicitly provides that an appeal from the labor arbiters decision, award or order must be made within ten (10) calendar days from receipt of a copy thereof by the party intending to appeal it; and, if the judgment involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. Such cash or bond must have been issued by a reputable bonding company duly accredited by the NLRC in the amount equivalent to the monetary award stated in the judgment. Sections 1, 3 and 6 of Rule VI of the New Rules of Procedure of the NLRC implement this Article.chanroblesvirtuallawlibrary
Indeed, this Court has repeatedly ruled that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and the failure to perfect an appeal has the effect of rendering the judgment final and executory.[46] Nonetheless, procedural lapses may be disregarded because of fundamental considerations of substantial justice;[47] or because of the special circumstances of the case combined with its legal merits or the amount and the issue involved.[48]chanroblesvirtuallawlibrary
The requirement to post a bond to perfect an appeal has also been relaxed in cases when the amount of the award has not been included in the decision of the labor arbiter.[49] Besides, substantial justice will be better served in the present case by allowing petitioners appeal to be threshed out on the merits,[50] especially because of serious errors in the factual conclusions of the labor arbiter as to the award of retirement benefits.
chanroblesvirtuallawlibrary
WHEREFORE, this Petition is partly GRANTED. The Decision of the Court of Appeals is MODIFIED by crediting Pedro M. Latag with 14 years of service. Consequently, he is entitled to retirement pay, which is hereby computed at P105,000 less the P38,850 which has already been received by respondent, plus six (6) percent interest thereon from December 21, 1998 until its full payment. No costs. chanroblesvirtuallawlibrary
SO ORDERED.chanroblesvirtuallawlibrary
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
Endnotes:
[1] Rollo, pp. 8-33.
[2] Id., pp. 36-44. Penned by Justice Eliezer R. de los Santos, with the concurrence of acting Presiding Justice Cancio C. Garcia and Justice Marina L. Buzon.
[3] Rollo, p. 46.
[4] This date should be January 10, 2000.
[5] CA Decision, p. 8; rollo, p. 43.
[6] Id., pp. 2-4 & 37-39.
[7] The Petition was deemed submitted for decision on May 27, 2003, upon the Courts receipt of private respondents Memorandum signed by Atty. Ernesto R. Arellano. Petitioners Memorandum, which was signed by Atty. Roberto T. Neri, was received by the Court on May 26, 2003.
[8] Petitioners Memorandum, p. 4; rollo, p. 193. Original in upper case.
[9] 356 Phil. 811, September 16, 1998.
[10] Id., p. 823.
[11] Id., p. 824.
[12] An Act Expanding the Jurisdiction of the Court of Appeals, amending for the purpose Section Nine of Batas Pambansa Blg. 129, as amended, known as the Judiciary Reorganization Act of 1980. Effective March 18, 1995.
[13] Tanjuan v. PPSBI, GR No. 155278, September 16, 2003, pp. 13-14.
[14] Pabu-aya v. Court of Appeals, 356 SCRA 651, 657, April 18, 2001; Philtranco Service Enterprises, Inc. v. NLRC, 351 Phil. 827, 835, April 1, 1998; Philippine Airlines, Inc. v. NLRC, 344 Phil. 860, 873, September 25, 1997.
[15] Columbus Philippines Bus Corp. v. NLRC, 417 Phil. 81, 99, September 7, 2001; Zarate Jr. v. Hon. Olegario, 331 Phil. 278, 288-289, October 7, 1996.
[16] Gonzales v. NLRC, 355 SCRA 195, 204, March 26, 2001; Aklan Electric Cooperative Incorporated v. NLRC, 380 Phil. 225, 237, January 25, 2000; San Jose v. NLRC, 355 Phil. 759, August 17, 1998; Manila Electric Company v. NLRC, 331 Phil. 838, 846, October 24, 1996.
[17] Asuncion v. NLRC, 414 Phil. 329, 336, July 31, 2001.
[18] Dico Jr. v. Court of Appeals, 365 Phil. 184, 193, April 14, 1999.
[19] The instances in which factual issues may be resolved by this Court are as follows: (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court of Appeals goes beyond the issues of the case, and its findings are contrary to the admissions of both appellant and appellees; (7) the findings of fact of the Court of Appeals are contrary to those of the trial court; (8) said findings of fact are conclusions without citation of specific evidence on which they are based; (9) the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; and (10) the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record. (Sarmiento v. Court of Appeals, 353 Phil. 834, 846, July 2, 1998)
[20] Decision of Labor Arbiter Ernesto S. Dinopol dated January 10, 2000, p. 3; rollo, p.53.
[21] NLRC Decision dated September 28, 2001, pp. 7-8; rollo, pp. 121-122.
[22] See the Articles of Incorporation of La Mallorca Taxi and R & E Transport, Inc., which was appended to the Petition for Review on Certiorari as Annexes N-1 and N-2; rollo, pp. 63-83.
[23] Labor Arbiters Decision dated January 10, 2000, pp. 3-4; rollo, p. 52-53.
[24] Philippine National Bank & National Sugar Development Corporation v. Andrada Electric & Engineering Company, 381 SCRA 244, 254, April 17, 2002; Francisco Motors Corporation v. CA, 368 Phil. 374, 384, June 25, 1999; San Juan Structural and Steel Fabricators, Inc. v. CA, 357 Phil. 631, 648-649, September 29, 1998.
[25] Supra.
[26] Id., pp. 254-255, per Panganiban, J.
[27] Periquet v. NLRC, 186 SCRA 724, 731, June 22, 1990, per Cruz, J.
[28] Galicia v. NLRC, 342 Phil. 342, 348, July 28, 1997.
[29] Principe v. Philippine Singapore Transport Services, Inc., 176 SCRA 514, 521, August 16, 1989, per Gancayco, J.
[30] Effective July 7, 1993.
[31] Section 5, Rule II of the Rules Implementing RA 7641 or the New Retirement Law.
[32] Section 3 of the Rules and Regulations Implementing Presidential Decree (PD) 851 reads:chanroblesvirtuallawlibrary
Section 3. Employers Covered. - The Decree shall apply to all employers except to:chanroblesvirtuallawlibrary
x x xx x xx x xchanroblesvirtuallawlibrary
(d) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned.chanroblesvirtuallawlibrary
x x xx x xx x x
[33] Section 1 of Rule V, Book III of the Omnibus Rules Implementing the Labor Code provides:chanroblesvirtuallawlibrary
Section 1. Coverage. - This rule shall apply to all employees except:chanroblesvirtuallawlibrary
x x xx x xx x xchanroblesvirtuallawlibrary
(d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance.chanroblesvirtuallawlibrary
x x xx x xx x x
[34] Jardin v. NLRC, 383 Phil. 187, 196, February 23, 2000; Martinez v. NLRC, 339 Phil. 176, 182, May 29, 1997; National Labor Union v. Dinglasan, 98 Phil. 649, 652, March 3, 1956.
[35] Government Service Insurance System v. Bengson Commercial Buildings, Inc., 375 SCRA 431, 440, January 31, 2002; Gatmaytan v. CA, 335 Phil. 155, 167, February 3, 1997.
[36] International School, Inc. (Manila) v. CA, 368 Phil. 791, 798, June 29, 1999.
[37] Cabarrus Jr. v. Bernas, 344 Phil. 802, 808, September 24, 1997.
[38] CA Resolution dated August 28, 2002; rollo, p. 46.
[39] Id., pp. 128-133 & 267-272.
[40] Rollo, pp. 267-275.
[41] See Article 221 of the Labor Code; and Section 9 of Rule V and Section 10 of Rule VII of the New Rules of Procedure of the NLRC.
[42] The January 10, 2000 Decision was officially released to the parties on January 24, 2000.
[43] Petitioners received a copy of the Decision on January 27, 2000, while respondent received her copy on January 28, 2000.
[44] The pertinent portion of Sec. 2, Rule V, The New Rules of the NLRC, provides:
Section 1. Mandatory Conciliation/Mediation Conference. - x x xchanroblesvirtuallawlibrary
x x x x x xx x xchanroblesvirtuallawlibrary
A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before whom the case is pending shall be approved by him if, after confronting the parties, particularly the complainants, he is satisfied that they understand the terms and conditions of the settlement and that it was entered into freely and voluntarily by them and the agreement is not contrary to law, morals, and public policy.chanroblesvirtuallawlibrary
A compromise agreement duly entered in accordance with this Section shall be final and binding upon the parties and the Order approving it shall have the effect of a judgment rendered by the Labor Arbiter.chanroblesvirtuallawlibrary
[45] NLRC Decision dated September 28, 2001, pp. 6-7; rollo, pp. 120-121.
[46] Philippine Airlines v. NLRC, 331 Phil. 937, 961, October 28, 1996.
[47] Kathy-O Enterprises v. NLRC, 350 Phil. 380, 391, March 2, 1998; Aurora Land Projects Corp. v. NLRC, 334 Phil. 44, 59, January 2, 1997.
[48] Philippine Airlines, Inc. v. NLRC, supra.
[49] Taberrah v. NLRC, 342 Phil. 394, 402-403,July 29, 1997; National Federation of Labor Unions v. Ladrido III, 196 SCRA 833, 844, May 8, 1991.
[50] Manila Mandarin Employees Union v. NLRC, 332 Phil. 354, 364, November 19, 1996; Oriental Mindoro Electric Cooperative, Inc. v. NLRC, 316 Phil. 959, 968, July 31, 1995.
Republic of the PhilippinesSUPREME COURT
Manila
THIRD DIVISION
G.R. No. 169076 January 23, 2007
PEOPLE OF THE PHILIPPINES, Appellee, vs.JOSEPH JAMILOSA, Appellant.
D E C I S I O N
CALLEJO, SR., J.:
This is an appeal from the Decision1 of the Regional Trial Court (RTC) of Quezon City in Criminal Case No. Q-97-72769 convicting appellant Joseph Jamilosa of large scale illegal recruitment under Sections 6 and 7 of Republic Act (R.A.) No. 8042, and sentencing him to life imprisonment and to pay a P500,000.00 fine.
The Information charging appellant with large scale illegal recruitment was filed by the Senior State Prosecutor on August 29, 1997. The inculpatory portion of the Information reads:
That sometime in the months of January to February, 1996, or thereabout in the City of Quezon, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, representing to have the capacity, authority or license to contract, enlist and deploy or transport workers for overseas employment, did then and there, willfully, unlawfully and criminally recruit, contract and promise to deploy, for a fee the herein complainants, namely, Haide R. Ruallo, Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh, for work or employment in Los Angeles, California, U.S.A. in Nursing Home and Care Center without first obtaining the required license and/or authority from the Philippine Overseas Employment Administration (POEA).
On arraignment, the appellant, assisted by counsel, pleaded not guilty to the charge.
The case for the prosecution, as synthesized by the Court of Appeals (CA), is as follows:
The prosecution presented three (3) witnesses, namely: private complainants Imelda D. Bamba, Geraldine M. Lagman and Alma E. Singh.
Witness Imelda D. Bamba testified that on January 17, 1996, she met the appellant in Cubao, Quezon City on board an aircon bus. She was on her way to Shoemart (SM), North EDSA, Quezon City where she was working as a company nurse. The appellant was seated beside her and introduced himself as a recruiter of workers for employment abroad. The appellant told her that his sister is a head nurse in a nursing home in Los Angeles, California, USA and he could help her get employed as a nurse at a monthly salary of Two Thousand US Dollars ($2,000.00) and that she could leave in two (2) weeks time. He further averred that he has connections with the US Embassy, being a US Federal Bureau of Investigation (FBI) agent on official mission in the Philippines for one month. According to the appellant, she has to pay the amount of US$300.00 intended for the US consul. The appellant gave his pager number and instructed her to contact him if she is interested to apply for a nursing job abroad.
On January 21, 1996, the appellant fetched her at her office. They then went to her house where she gave him the photocopies of her transcript of records, diploma, Professional Regulatory Commission (PRC) license and other credentials. On January 28 or 29, 1996, she handed to the appellant the amount of US$300.00 at the McDonalds outlet in North EDSA, Quezon City, and the latter showed to her a photocopy of her supposed US visa. The appellant likewise got several pieces of jewelry which she was then selling and assured her that he would sell the same at the US embassy. However, the appellant did not issue a receipt for the said money and jewelry. Thereafter, the appellant told her to resign from her work at SM because she was booked with Northwest Airlines and to leave for Los Angeles, California, USA on February 25, 1996.
The appellant promised to see her and some of his other recruits before their scheduled departure to hand to them their visas and passports; however, the appellant who was supposed to be with them in the flight failed to show up. Instead, the appellant called and informed her that he failed to give the passport and US visa because he had to go to the province because his wife died. She and her companions were not able to leave for the United States. They went to the supposed residence of the appellant to verify, but nobody knew him or his whereabouts. They tried to contact him at the hotel where he temporarily resided, but to no avail. They also inquired from the US embassy and found out that there was no such person connected with the said office. Thus, she decided to file a complaint with the National Bureau of Investigation (NBI).
Prosecution witness Geraldine Lagman, for her part, testified that she is a registered nurse by profession. In the morning of January 22, 1996, she went to SM North EDSA, Quezon City to visit her cousin Imelda Bamba. At that time, Bamba informed her that she was going to meet the appellant who is an FBI agent and was willing to help nurses find a job abroad. Bamba invited Lagman to go with her. On the same date at about 2:00 o’clock in the afternoon, she and Bamba met the appellant at the SM Fast-Food Center, Basement, North EDSA, Quezon City. The appellant convinced them of his ability to send them abroad and told them that he has a sister in the United States. Lagman told the appellant that she had no working experience in any hospital but the appellant assured her that it is not necessary to have one. The appellant asked for US$300.00 as payment to secure an American visa and an additional amount of Three Thousand Four Hundred Pesos (P3,400.00) as processing fee for other documents.
On January 24, 1996, she and the appellant met again at SM North EDSA, Quezon City wherein she handed to the latter her passport and transcript of records. The appellant promised to file the said documents with the US embassy. After one (1) week, they met again at the same place and the appellant showed to her a photocopy of her US visa. This prompted her to give the amount of US$300.00 and two (2) bottles of Black Label to the appellant. She gave the said money and liquor to the appellant without any receipt out of trust and after the appellant promised her that he would issue the necessary receipt later. The appellant even went to her house, met her mother and uncle and showed to them a computer printout from Northwest Airlines showing that she was booked to leave for Los Angeles, California, USA on February 25, 1996.
Four days after their last meeting, Extelcom, a telephone company, called her because her number was appearing in the appellant’s cellphone documents. The caller asked if she knew him because they were trying to locate him, as he was a swindler who failed to pay his telephone bills in the amount of P100,000.00. She became suspicious and told Bamba about the matter. One (1) week before her scheduled flight on February 25, 1996, they called up the appellant but he said he could not meet them because his mother passed away. The appellant never showed up, prompting her to file a complaint with the NBI for illegal recruitment.
Lastly, witness Alma Singh who is also a registered nurse, declared that she first met the appellant on February 13, 1996 at SM North EDSA, Quezon City when Imelda Bamba introduced the latter to her. The appellant told her that he is an undercover agent of the FBI and he could fix her US visa as he has a contact in the US embassy. The appellant told her that he could help her and her companions Haidee Raullo, Geraldine Lagman and Imelda Bamba find jobs in the US as staff nurses in home care centers.
On February 14, 1996 at about 6:30 in the evening, the appellant got her passport and picture. The following day or on February 15, 1996, she gave the appellant the amount of US$300.00 and a bottle of cognac as "grease money" to facilitate the processing of her visa. When she asked for a receipt, the appellant assured her that there is no need for one because she was being directly hired as a nurse in the United States.
She again met the appellant on February 19, 1996 at the Farmers Plaza and this time, the appellant required her to submit photocopies of her college diploma, nursing board certificate and PRC license. To show his sincerity, the appellant insisted on meeting her father. They then proceeded to the office of her father in Barrio Ugong, Pasig City and she introduced the appellant. Thereafter, the appellant asked permission from her father to allow her to go with him to the Northwest Airlines office in Ermita, Manila to reserve airline tickets. The appellant was able to get a ticket confirmation and told her that they will meet again the following day for her to give P10,000.00 covering the half price of her plane ticket. Singh did not meet the appellant as agreed upon. Instead, she went to Bamba to inquire if the latter gave the appellant the same amount and found out that Bamba has not yet given the said amount. They then paged the appellant through his beeper and told him that they wanted to see him. However, the appellant avoided them and reasoned out that he could not meet them as he had many things to do. When the appellant did not show up, they decided to file a complaint for illegal recruitment with the NBI.
The prosecution likewise presented the following documentary evidence:
Exh. "A" – Certification dated February 23, 1998 issued by Hermogenes C. Mateo, Director II, Licensing Branch, POEA.
Exh. "B" – Affidavit of Alma E. Singh dated February 23, 1996.3
On the other hand, the case for the appellant, as culled from his Brief, is as follows:
Accused JOSEPH JAMILOSA testified on direct examination that he got acquainted with Imelda Bamba inside an aircon bus bound for Caloocan City when the latter borrowed his cellular phone to call her office at Shoe Mart (SM), North Edsa, Quezon City. He never told Bamba that he could get her a job in Los Angeles, California, USA, the truth being that she wanted to leave SM as company nurse because she was having a problem thereat. Bamba called him up several times, seeking advice from him if Los Angeles, California is a good place to work as a nurse. He started courting Bamba and they went out dating until the latter became his girlfriend. He met Geraldine Lagman and Alma Singh at the Shoe Mart (SM), North Edsa, Quezon City thru Imelda Bamba. As complainants were all seeking advice on how they could apply for jobs abroad, lest he be charged as a recruiter, he made Imelda Bamba, Geraldine Lagman and Alma Singh sign separate certifications on January 17, 1996 (Exh. "2"), January 22, 1996 (Exh. "4"), and February 19, 1996 (Exh. "3"), respectively, all to the effect that he never recruited them and no money was involved. Bamba filed an Illegal Recruitment case against him because they quarreled and separated. He came to know for the first time that charges were filed against him in September 1996 when a preliminary investigation was conducted by Fiscal Dañosos of the Department of Justice. (TSN, October 13, 1999, pp. 3-9 and TSN, December 8, 1999, pp. 2-9)4
On November 10, 2000, the RTC rendered judgment finding the accused guilty beyond reasonable doubt of the crime charged.5 The fallo of the decision reads:
WHEREFORE, judgment is hereby rendered finding accused guilty beyond reasonable doubt of Illegal Recruitment in large scale; accordingly, he is sentenced to suffer the penalty of life imprisonment and to pay a fine of Five Hundred Thousand Pesos (P500,000.00), plus costs.
Accused is ordered to indemnify each of the complainants, Imelda Bamba, Geraldine Lagman and Alma Singh the amount of Three Hundred US Dollars ($300.00).
SO ORDERED.6
In rejecting the defenses of the appellant, the trial court declared:
To counter the version of the prosecution, accused claims that he did not recruit the complainants for work abroad but that it was they who sought his advice relative to their desire to apply for jobs in Los Angeles, California, USA and thinking that he might be charged as a recruiter, he made them sign three certifications, Exh. "2," "3" and "4," which in essence state that accused never recruited them and that there was no money involved.
Accused’s contention simply does not hold water. Admittedly, he executed and submitted a counter-affidavit during the preliminary investigation at the Department of Justice, and that he never mentioned the aforesaid certifications, Exhibits 2, 3 and 4 in said counter-affidavit. These certifications were allegedly executed before charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why did he not bring out these certifications which were definitely favorable to him, if the same were authentic. It is so contrary to human nature that one would suppress evidence which would belie the charge against him.
Denials of the accused can not stand against the positive and categorical narration of each complainant as to how they were recruited by accused who had received some amounts from them for the processing of their papers. Want of receipts is not fatal to the prosecution’s case, for as long as it has been shown, as in this case, that accused had engaged in prohibited recruitment. (People v. Pabalan, 262 SCRA 574).
That accused is neither licensed nor authorized to recruit workers for overseas employment, is shown in the Certification issued by POEA, Exh. "A."
In fine, the offense committed by the accused is Illegal Recruitment in large scale, it having been committed against three (3) persons, individually.7
Appellant appealed the decision to this Court on the following assignment of error:
THE TRIAL COURT ERRED IN CONVICTING ACCUSED-APPELLANT OF THE CRIME OF ILLEGAL RECRUITMENT IN LARGE SCALE DESPITE THE FACT THAT THE LATTER’S GUILT WAS NOT PROVED BEYOND REASONABLE DOUBT BY THE PROSECUTION.8
According to appellant, the criminal Information charging him with illegal recruitment specifically mentioned the phrase "for a fee," and as such, receipts to show proof of payment are indispensable. He pointed out that the three (3) complaining witnesses did not present even one receipt to prove the alleged payment of any fee. In its eagerness to cure this "patent flaw," the prosecution resorted to presenting the oral testimonies of complainants which were "contrary to the ordinary course of nature and ordinary habits of life [under Section 3(y), Rule 131 of the Rules on Evidence] and defied credulity." Appellant also pointed out that complainants’ testimony that they paid him but no receipts were issued runs counter to the presumption under Section [3](d), Rule 131 of the Rules on Evidence that persons take ordinary care of their concern. The fact that complainants were not able to present receipts lends credence to his allegation that it was they who sought advice regarding their desire to apply for jobs in Los Angeles, California, USA. Thus, thinking that he might be charged as a recruiter, he made them sign three (3) certifications stating that he never recruited them and there was no money involved. On the fact that the trial court disregarded the certifications due to his failure to mention them during the preliminary investigation at the Department of Justice (DOJ), appellant pointed out that there is no provision in the Rules of Court which bars the presentation of evidence during the hearing of the case in court. He also pointed out that the counter-affidavit was prepared while he was in jail "and probably not assisted by a lawyer."9
Appellee, through the Office of the Solicitor General (OSG), countered that the absence of receipts signed by appellant acknowledging receipt of the money and liquor from the complaining witnesses cannot defeat the prosecution and conviction for illegal recruitment. The OSG insisted that the prosecution was able to prove the guilt of appellant beyond reasonable doubt via the collective testimonies of the complaining witnesses, which the trial court found credible and deserving of full probative weight. It pointed out that appellant failed to prove any ill-motive on the part of the complaining witnesses to falsely charge him of illegal recruitment.
On appellant’s claim that the complaining witness Imelda Bamba was his girlfriend, the OSG averred:
Appellant’s self-serving declaration that Imelda is his girlfriend and that she filed a complaint for illegal recruitment after they quarreled and separated is simply preposterous. No love letters or other
documentary evidence was presented by appellant to substantiate such claim which could be made with facility. Imelda has no reason to incriminate appellant except to seek justice. The evidence shows that Alma and Geraldine have no previous quarrel with appellant. Prior to their being recruited by appellant, Alma and Geraldine have never met appellant. It is against human nature and experience for private complainants to conspire and accuse a stranger of a most serious crime just to mollify their hurt feelings. (People v. Coral, 230 SCRA 499, 510 [1994])10
The OSG posited that the appellant’s reliance on the certifications11 purportedly signed by the complaining witnesses is misplaced, considering that the certifications are barren of probative weight.
On February 23, 2005, the Court resolved to transfer the case to the CA.12 On June 22, 2005, the CA rendered judgment affirming the decision of the RTC.13
The OSG filed a Supplemental Brief, while the appellant found no need to file one.
The appeal has no merit.
Article 13(b) of the Labor Code of the Philippines defines recruitment and placement as follows:
(b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.
Section 6 of R.A. No. 8042 defined when recruitment is illegal:
SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. x x x
Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal and punishable under Article 39 of the Labor Code of the Philippines.14 Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.15
To prove illegal recruitment in large scale, the prosecution is burdened to prove three (3) essential elements, to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34 of the Labor Code; (2) accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers; and (3) accused committed the same against three or more persons individually or as a group.16 As gleaned from the collective testimonies of the complaining witnesses which the trial court and the appellate court found to be credible and deserving of full probative weight, the prosecution mustered the requisite quantum of evidence to prove the guilt of accused beyond reasonable doubt for the crime charged. Indeed, the
findings of the trial court, affirmed on appeal by the CA, are conclusive on this Court absent evidence that the tribunals ignored, misunderstood, or misapplied substantial fact or other circumstance.
The failure of the prosecution to adduce in evidence any receipt or document signed by appellant where he acknowledged to have received money and liquor does not free him from criminal liability. Even in the absence of money or other valuables given as consideration for the "services" of appellant, the latter is considered as being engaged in recruitment activities.
It can be gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment may be for profit or not. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment.17 As the Court held in People v. Sagaydo:18
Such is the case before us. The complainants parted with their money upon the prodding and enticement of accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In the end, complainants were neither able to leave for work abroad nor get their money back.
The fact that private complainants Rogelio Tibeb and Jessie Bolinao failed to produce receipts as proof of their payment to accused-appellant does not free the latter from liability. The absence of receipts cannot defeat a criminal prosecution for illegal recruitment. As long as the witnesses can positively show through their respective testimonies that the accused is the one involved in prohibited recruitment, he may be convicted of the offense despite the absence of receipts.19
Appellant’s reliance on the certifications purportedly signed by the complaining witnesses Imelda Bamba, Alma Singh and Geraldine Lagman20 is misplaced. Indeed, the trial court and the appellate court found the certifications barren of credence and probative weight. We agree with the following pronouncement of the appellate court:
Anent the claim of the appellant that the trial court erred in not giving weight to the certifications (Exhs. "2," "3" & "4") allegedly executed by the complainants to the effect that he did not recruit them and that no money was involved, the same deserves scant consideration.
The appellant testified that he was in possession of the said certifications at the time the same were executed by the complainants and the same were always in his possession; however, when he filed his counter-affidavit during the preliminary investigation before the Department of Justice, he did not mention the said certifications nor attach them to his counter-affidavit.lavvphil.net
We find it unbelievable that the appellant, a college graduate, would not divulge the said certifications which would prove that, indeed, he is not an illegal recruiter. By failing to present the said certifications prior to the trial, the appellant risks the adverse inference and legal presumption that, indeed, such certifications were not genuine. When a party has it in his possession or power to produce the best evidence of which the case in its nature is susceptible and withholds it, the fair presumption is that the evidence is withheld for some sinister motive and that its production would thwart his evil or fraudulent purpose. As aptly pointed out by the trial court:
"x x x These certifications were allegedly executed before charges were filed against him. Knowing that he was already being charged for prohibited recruitment, why did he not bring out these certifications which were definitely favorable to him, if the same were authentic. It is so contrary to
human nature that one would suppress evidence which would belie the charge against him." (Emphasis Ours)21
At the preliminary investigation, appellant was furnished with copies of the affidavits of the complaining witnesses and was required to submit his counter-affidavit. The complaining witnesses identified him as the culprit who "recruited" them. At no time did appellant present the certifications purportedly signed by the complaining witnesses to belie the complaint against him. He likewise did not indicate in his counter-affidavit that the complaining witnesses had executed certifications stating that they were not recruited by him and that he did not receive any money from any of them. He has not come forward with any valid excuse for his inaction. It was only when he testified in his defense that he revealed the certifications for the first time. Even then, appellant lied when he claimed that he did not submit the certifications because the State Prosecutor did not require him to submit any counter-affidavit, and that he was told that the criminal complaint would be dismissed on account of the failure of the complaining witnesses to appear during the preliminary investigation. The prevarications of appellant were exposed by Public Prosecutor Pedro Catral on cross-examination, thus:
Q Mr. Witness, you said that a preliminary investigation [was] conducted by the Department of Justice through State Prosecutor Dañosos. Right?
A Yes, Sir.
Q Were you requested to file your Counter-Affidavit?
A Yes, Sir. I was required.
Q Did you file your Counter-Affidavit?
A Yes, Sir, but he did not accept it.
Q Why?
A Because he said "never mind" because the witness is not appearing so he dismissed the case.
Q Are you sure that he did not accept your Counter-Affidavit, Mr. Witness?
A I don’t know of that, Sir.
Q If I show you that Counter-Affidavit you said you prepared, will you be able to identify the same, Mr. Witness?
A Yes, Sir.
Q I will show you the Counter-Affidavit dated June 16, 1997 filed by one Joseph J. Jamilosa, will you please go over this and tell if this is the same Counter-Affidavit you said you prepared and you are going to file with the investigating state prosecutor?
Q There is a signature over the typewritten name Joseph J. Jamilosa, will you please go over this and tell this Honorable Court if this is your signature, Mr. Witness?
A Yes, Sir. This is my signature.
Q During the direct examination you were asked to identify [the] Certification as Exh. "2" dated January 17, 1996, allegedly issued by Bamba, one of the complainants in this case, when did you receive this Certification issued by Imelda Bamba, Mr. Witness?
A That is the date, Sir.
Q You mean the date appearing in the Certification.
A Yes, Sir.
Q Where was this handed to you by Imelda Bamba, Mr. Witness?
A At SM North Edsa, Sir.
Q During the direct examination you were also asked to identify a Certification Exh. "3" for the defense dated February 19, 1996, allegedly issued by Alma Singh, one of the complainants in this case, will you please go over this and tell us when did Alma Singh allegedly issue to you this Certification?
A On February 19, 1996, Sir.
Q And also during the direct examination, you were asked to identify a Certification which was already marked as Exh. "4" for the defense dated January 22, 1996 allegedly issued by Geraldine M. Lagman, one of the complainants in this case, will you please tell the court when did Geraldine Lagman give you this Certification?
A January 22, 1996, Sir.
Q During that time, January 22, 1996, January 17, 1996 and February 19, 1996, you were in possession of all these Certification. Correct, Mr. Witness?
A Yes, Sir.
Q These were always in your possession. Right?
A Yes, Sir, with my papers.
Q Do you know when did the complainants file cases against you?
A I don’t know, Sir.
Q Alright. I will read to you this Counter-Affidavit of yours, and I quote "I, Joseph Jamilosa, of legal age, married and resident of Manila City Jail, after having duly sworn to in accordance with law hereby depose and states that: 1) the complainants sworn under oath to the National Bureau of Investigation
that I recruited them and paid me certain sums of money assuming that there is truth in those allegation of this (sic) complainants. The charge filed by them should be immediately dismissed for certain lack of merit in their Sworn Statement to the NBI Investigator; 2) likewise, the complainants’ allegation is not true and I never recruited them to work abroad and that they did not give me money, they asked me for some help so I [helped] them in assisting and processing the necessary documents, copies for getting US Visa; 3) the complainant said under oath that they can show a receipt to prove that they can give me sums or amount of money. That is a lie. They sworn (sic), under oath, that they can show a receipt that I gave to them to prove that I got the money from them. I asked the kindness of the state prosecutor to ask the complainants to show and produce the receipts that I gave to them that was stated in the sworn statement of the NBI; 4) the allegation of the complainants that the charges filed by them should be dismissed because I never [received] any amount from them and they can not show any receipt that I gave them," Manila City Jail, Philippines, June 16, 1997. So, Mr. Witness, June 16, 1997 is the date when you prepared this. Correct?
A Yes, Sir.
Q Now, my question to you, Mr. Witness, you said that you have with you all the time the Certification issued by [the] three (3) complainants in this case, did you allege in your Counter-Affidavit that this Certification you said you claimed they issued to you?
A I did not say that, Sir.
Q So, it is not here in your Counter-Affidavit?
A None, Sir.
Q What is your educational attainment, Mr. Witness?
A I am a graduate of AB Course Associate Arts in 1963 at the University of the East.
Q You said that the State Prosecutor of the Department of Justice did not accept your Counter-Affidavit, are you sure of that, Mr. Witness?
A Yes, Sir.
Q Did you receive a copy of the dismissal which you said it was dismissed?
A No, Sir. I did not receive anything.
Q Did you receive a resolution from the Department of Justice?
A No, Sir.
Q Did you go over the said resolution you said you received here?
A I just learned about it now, Sir.
Q Did you read the content of the resolution?
A Not yet, Sir. It’s only now that I am going to read.
COURT
Q You said it was dismissed. Correct?
A Yes, Your Honor.
Q Did you receive a resolution of this dismissal?
A No, Your Honor.
FISCAL CATRAL
Q What did you receive?
A I did not receive any resolution, Sir. It’s just now that I learned about the finding.
Q You said you learned here in court, did you read the resolution filed against you, Mr. Witness?
A I did not read it, Sir.
Q Did you read by yourself the resolution made by State Prosecutor Dañosos, Mr. Witness?
A Not yet, Sir.
Q What did you take, if any, when you received the subpoena from this court?
A I was in court already when I asked Atty. Usita to investigate this case.
Q You said a while ago that your Affidavit was not accepted by State Prosecutor Dañosos. Is that correct?
A Yes, Sir.
Q Will you please read to us paragraph four (4), page two (2) of this resolution of State Prosecutor Dañosos.
(witness reading par. 4 of the resolution)
Alright. What did you understand of this paragraph 4, Mr. Witness?
A Probably, guilty to the offense charge.22
It turned out that appellant requested the complaining witnesses to sign the certifications merely to prove that he was settling the cases:
Q These complainants, why did you make them sign in the certifications?
A Because one of the complainants told me to sign and they are planning to sue me.
Q You mean they told you that they are filing charges against you and yet you [made] them sign certifications in your favor, what is the reason why you made them sign?
A To prove that I’m settling this case.
Q Despite the fact that they are filing cases against you and yet you were able to make them sign certifications?
A Only one person, Your Honor, who told me and he is not around.
Q But they all signed these three (3) certifications and yet they filed charges against you and yet you made them sign certifications in your favor, so what is the reason why you made them sign?
(witness can not answer)23
The Court notes that the trial court ordered appellant to refund US$300.00 to each of the complaining witnesses. The ruling of the appellate court must be modified. Appellant must pay only the peso equivalent of US$300.00 to each of the complaining witnesses.
IN LIGHT OF ALL THE FOREGOING, the appeal is DISMISSED. The Decision of the Court of Appeals affirming the conviction of Joseph Jamilosa for large scale illegal recruitment under Sections 6 and 7 of Republic Act No. 8042 is AFFIRMED WITH MODIFICATION. The appellant is hereby ordered to refund to each of the complaining witnesses the peso equivalent of US$300.00. Costs against appellant.
SO ORDERED.
ROMEO J. CALLEJO, SR.Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO Associate Justice
MA. ALICIA AUSTRIA-MARTINEZAssociate Justice
MINITA V. CHICO-NAZARIOAsscociate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNOChief Justice
Footnotes
1 Penned by Judge Lydia Querubin Layosa; CA rollo, pp. 51-56.
2 Records, p. 7.
3 CA rollo, pp. 130-135.
4 Id. at 44.
5 Id. at 51-56.
6 Id. at 56.
7 Id. at 55.
8 Id. at 45.
9 Id. at 46-48.
10 Id. at 99-100.
11 Exhibits "2," "3" and "4," records, pp. 189-191.
12 CA rollo, p. 127.
13 Id. at 129-141.
14 Labor Code, Art. 38(a).
15 Labor Code, Art. 38(b).
16 People v. Dionisio, 425 Phil. 651, 665 (2002).
17 People v. Dela Piedra, 403 Phil. 31, 51 (2001).
this was a promotion considering that his initial monthly pay of US$674.00 was raised to US$1,164.00.
Later, Captain Kandylis received several derogatory reports against petitioner, such as drunkenness,
insubordination, abandonment of post, and disorderly behavior. These were duly recorded in the ships logbook.
On August 10, 1996, seven (7) members of the crew of M/V Commander (including petitioner) submitted a
request to Captain Kandylis for early repatriation because of family problems. Their requests were granted. After
disembarking, they were furnished hotel accommodations and repatriation expenses. Petitioner then returned to
the Philippines.
On November 18, 1996, petitioner filed with the Arbitration Branch, NLRC, National Capital Region a
complaint for illegal dismissal and underpayment of wages against Medbulk Maritime Management
Corporation[3] and Sea Justice, S.A.
On August 31, 1998, the Labor Arbiter dismissed petitioners complaint, holding that his employment was
validly terminated.He was found liable for drunkenness, a ground for dismissal from the service under his
contract of employment.
On appeal, the NLRC, in its Decision, set aside the Labor Arbiters judgment, thus:
cralawACCORDINGLY, premises considered, the August 31, 1998 decision of the Labor Arbiter is hereby set aside and new one entered ordering respondent Prudential Shipping to pay complainant the amount of US$258.00 as underpayment of wages from September to November 1886 and US$10,000.00 representing his salary from December 1996 to July 1997.
cralawSO ORDERED.
cralaw
Respondents filed a motion for reconsideration but it was denied.
Respondents then filed with the Court of Appeals a petition for certiorari under Rule 65 of the 1997 Rules of
Civil Procedure, as amended.
On March 21, 2002, the Court of Appeals promulgated its Decision granting respondents petition and setting
aside the NLRC Decision.
Petitioner filed a motion for reconsideration.However, it was denied by the appellate court on September 5,
2002.
Hence, the instant petition raising the sole issue of whether the Court of Appeals erred in holding that petitioners
dismissal from employment was for cause.
Section 2, Rule VII, Book IV of the POEA Rules And Regulations Governing Overseas Employment provides:
cralawSEC. 2. Grounds for Disciplinary Action. Commission by the worker of any of the offenses enumerated below or of similar offenses while working overseas shall be subject to appropriate disciplinary actions as the Administration may deem necessary:
x x x
cralaw(c) Desertion or abandonment;
cralaw(d) Drunkenness, especially where the laws of the host country prohibit intoxicating drinks;
x x x
cralaw(g) Creating trouble at the worksite or in the vessel;
Appendix 2 of the POEA Standard Employment Contract for Filipino migrant workers contains a list of offenses
with corresponding sanctions. This list includes drunkenness.
Petitioner contends that Captain Kandylis has a grudge against him, the reason why he entered in the Masters
Report that he (petitioner) was involved in a fight among several members of the crew.
There is nothing in the records of this case that supports petitioners contention. On the contrary, the ships log of
the M/V Commander states that he was drunk four (4) times and was not in his post once.
The Masters Report[4] dated October 6, 1996 signed by Captain Kandylis contains these entries: the illegal
consumption of alcoholic drinks by the Philippine crew put in danger the crew, the vessel, her cargo, the
other nearby sailing vessels as well as environment from eventual destruction. One of the crew members
named therein was petitioner. The Report shows that he was always drunk, disorderly and disobedient; and that
the Conformity for Sobriety which every member of the crew was made to sign was violated every day.
In Haverton Shipping Ltd v. National Labor Relations Commission,[5] we described the ships log as the official
record of a ships voyage which its captain is obligated by law to keep wherein, among others, he records the
decisions he has adopted, a summary of the performance of the vessel, and other daily events. The entries made
therein by a person performing a duty required by law are prima facie evidence of the facts stated therein.
In Abacast Shipping and Management Agency, Inc. v. National Labor Relations Commission,[6] we said that
the logbook is a respectable record that can be relied upon when the entries therein are presented in evidence. In
Stolt-Nielsen Marine Services (Phils.), Inc. v. National Labor Relations Commission,[7] citing Haverton and
Abacast, we reiterated the evidentiary value of the ships log. Consequently, we find no reason why we should
not give credence to Captain Kandylis Masters Report.
In the earlier case of Seahorse Maritime Corporation v. National Labor Relations Commission,[8] which
likewise involved a seaman who was prone to intoxication and creating trouble aboard ship when drunk, we held
that serious misconduct in the form of drunkenness and disorderly and violent behavior, habitual neglect
of duty, and insubordination or willful disobedience to the lawful orders of his superior officer, are just
causes for dismissal of an employee under Article 282[9] of the Labor Code, and that where the dismissal is
for cause, the erring seaman is neither entitled to separation pay or to the salaries for the unexpired portion of his
contract.
We likewise cannot sustain petitioners claim that he was underpaid. In fact, Captain Kandylis increased his
monthly compensation from US$674.00 to US$1,164.00 which he received.While the contract as altered was not
approved by the POEA, however, the lack of such approval is inconsequential since the alteration redounded to
WHEREFORE, we DENY the petition and AFFIRM the assailed Decision of the Court of Appeals in CA-
G.R. SP No. 57111.
Costs against petitioner.
SO ORDERED.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
WE CONCUR:
REYNATO S. PUNOChief JusticeChairperson
RENATO C. CORONA
Associate Justice
(On official leave)
ADOLFO S. AZCUNA
Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNOChief Justice
Endnotes:
* cralawOn official leave.
[1] cralawRollo, pp. 259-268.Penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by Associate Justices Delilah Vidallon-Magtolis and Candido V. Rivera (both retired).
[2] cralawAnnex D-47 of the petition, Rollo, p. 107.
[3] cralawSubsequently, Prudential Shipping and Management Corporation substituted Medbulk Maritime Management Corporation as respondent.
[4] cralawRollo, p. 108.
[5] cralawG.R. No. 65442, April 15, 1985, 135 SCRA 685.
[6] cralawG.R. Nos. 81124-26, June 23, 1988, 162 SCRA 541.
[7] cralawG.R. No. 105396, November 19, 1996, 264 SCRA 307.
[8] cralawG.R. No. 84712, May 15, 1989, 173 SCRA 390.
[9] cralawART. 282. Termination of employment. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or duly authorized representative; and
