Labor Cases From Case 1 - 12

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[G.R. No. 105963. August 22, 1996]

PAL EMPLOYEES SAVINGS AND LOANASSOIA!ION, IN. "PESALA#, petitioner, vs.NA!IONAL LA$OR RELA!IONS OMMISSION %&'ANGEL V. ES()E*O, respondent .

D E I S I O N

PANGANI$AN, J.+

Is an employee entitled to overtime pay for work

rendered in excess of eight hours a day, given the fact

that his employment contract species a twelve-hour

workday at a xed monthly salary rate that is above

the legal minimum wage? This is the principal question

answered by this ourt in resolving this petition which

challenges the validity and legality of the !ecision"#$ of

public respondent %ational &abor 'elations

ommission"($ promulgated on )pril (*, #++( in %&'

%' ) %o (.((-+# entitled Angel V. Esquejo vs.

PAL Employees Savings and Loan Association which

!ecision modied /slightly as to amount0 the earlier

decision"*$

dated %ovember ##, #++# of the laborarbiter granting private respondents claim for overtime

pay

!- %/ts %&' t- %s- $-o

1n 1ctober #, #++, private respondent led with

public respondent a complaint docketed as %&'

%' ase %o #-.2.3-+ for non-payment of

overtime pay and non-payment of the 4(. statutory

minimum wage increase mandated by 'epublic )ct %o

53(3

6ubsequently, private respondent led a

supplemental complaint for illegal suspension with

prayer for reinstatement and payment of backwages

7owever, before the case was submitted for resolution,

private respondent led a 8otion to 9ithdraw

6upplemental omplaint on the ground that a separate

action for illegal suspension, illegal dismissal, etc had

been led and was pending before another labor

arbiter 7ence, the issue decided by public respondent

and which is under review by this ourt in this petitioninvolves only his claim for overtime pay

1n %ovember (5, #++, private respondent ledhis position paper"2$ with the labor arbiter alleging thefollowing facts constituting his cause of action:

omplainant /herein private respondent0 startedworking with respondent /4;6)&)0 sometime last8arch #, #+<5 as a company guard and was receivinga monthly basic salary of 4#,++ plus anemergency allowance in the amount of 4.# 7ewas required to work a /sic0 twelve /#(0 hours a day, a/sic0 xerox copies of his appointment are heretoattached and marked as )nnexes and ! of thisposition paper=

That on !ecember #, #+<5, respondent >oard of !irectors in its board meeting held on %ovember (#,#+<5 approved a salary adustment for the

http://sc.judiciary.gov.ph/jurisprudence/1996/aug1996/105963.htm#_edn1










complainant increasing his monthly basic salary to4(,*# and an emergency allowance of 4.#, axerox copy of the salary adustment is hereto attachedand marked as )nnex ; hereof=

That on )ugust (., #+<3, because of his impressiveperformance on his assigned ob, another adustmentwas approved by the 4resident of the associationincreasing his monthly basic salary to 4(,<<, axerox copy of the salary adustment is hereto attachedand marked as )nnex @ hereof=

That from Aanuary 2, #+<< up to Aune #++, severalsalary adustments were made by the respondent onthe monthly basic salary of the complainant including

a letter of appreciation for being as /sic0 one of theoutstanding performers during the rst half of #+<<,the latest salary prior to the ling of the complaint was4*,3(, a /sic0 xerox copies of all the documentsrelative to the salary adustments are hereto attachedand marked as annexes B, 7, I, A and C of this positionpaper=

That during his entire period of employment withrespondent, the former was required to performovertime work without any additional compensation

from the latter It was also at this point wherein therespondent refused to give the 4(. increase on theminimum wage rates as provided for by law 1n1ctober #(, #++, complainant was suspended for theperiod of thirty seven /*30 days for an oDenseallegedly committed by the respondent sometime last)ugust #+<+

1n !ecember #*, #++, petitioner 4;6)&) led its

position paper".$ alleging among other things:

1n # 8arch, #+<5, complainant was appointed in a

permanent status as the company guard of respondent In the )ppointment 8emorandum dated@ebruary (2, #+<5 which has the conformity of complainant, it is expressly stipulated therein thatcomplainant is to receive a monthly salary of 4#,+ plus 4.# emergency allowance for atwelve /#(0 hours work per day with one /#0 day oD )copy of said appointment memorandum is heretoattached as )nnex ) and made an integral part hereof

1n # !ecember, #+<5, the monthly salary of

complainant was increased to 4(,*# plus 4.#emergency allowance &ater, or on # Aanuary, #+<<,the monthly salary of complainant was again increasedto 4*,2( )nd still later, or on # @ebruary, #+<+,complainants monthly salary was increased to4*,3( opies of the memoranda evidencing saidincrease are hereto attached as )nnexes >, >-# and >-( and are made integral parts hereof

1n (+ %ovember, #+<+, the manager of respondentin the person of 6ulpicio Aornales wrote to complainant

informing the latter that the position of a guard will beabolished eDective %ovember *, #+<+, and thatcomplainant will be re-assigned to the position of aledger custodian eDective !ecember #, #+<+

4ursuant to the above-mentioned letter-agreementof 8r Aornales, complainant was formally appointed byrespondent as its ledger custodian on !ecember #,#+<+ The monthly salary of complainant as ledger





custodian starting on !ecember #, #+<+ was4*,3( for forty /20 working hours a week or eight/<0 working hours a day ) copy of said )ppointmentmemorandum is hereto attached as )nnex and madean integral part hereof

1n (+ )ugust, #++, complainant wasadministratively charged with serious misconduct ordisobedience of the lawful orders of respondent or itsoEcers, and gross and habitual neglect of his duties,committed as follows:

# 6ometime in )ugust, #+<+, you /referring tocomplainant ;squeo0 forwarded the checkscorresponding to the withdrawals of 8r Aose

AimeneF and 8r )nselmo dela >anda of !avaoand Iloilo 6tation, respectively, without thesignature of the Treasurer and the 4resident of 4;6)&), in violation of your duty and functionthat you should see to it that the said checksshould be properly signed by the two 4;6)&)oEcials before you send out said checks of their addresses )s a result of which, there wasa substantial delay in the transmission of thechecks to its owners resulting to anembarrassment on the part of the 4;6)&)

oEcers and damage and inury to thereceipients /sic0 of the checks since theyneeded the money badly

( 6ometime in )ugust, #+<+, before you/complainant0 went on your vacation, youfailed to leave or surrender the keys of theoEce, especially the keys to the main andback doors which resulted to damage, inuryand embarrassment to 4;6)&) This is a gross

violation of your assigned duties and youdisobeyed the instruction of your 6uperior

xxx xxx xxx

7erein complainant was informed of the aforequotedcharges against him and was given the opportunity tobe heard and present evidence in his behalf as shownby the %otice of 7earing /)nnex ! hereof0 sent tohimomplainant did in fact appeared /sic0 at thehearing, assisted by his counsel, )tty 8ahinardo B8ailig, and presented his evidence in the form of aounter-)Edavit ) copy of said ounter-)Edavit ishereto attached as )nnex ; and made an integral parthereof

1n #( 1ctober, #++, after due deliberation on themerits of the administrative charges led againstherein complainant, the Investigating 1Ecer in theperson of apt 'ogelio ;nverga resolved the sameimposing a penalty of suspension of hereincomplainant, thus:

4;%)&TG: # @or the rst oDense, you /referring tocomplainant ;squeo0 aresuspended for a period of thirty /*0

working days without pay eDective1ctober #., #++

( @or the second oDense, your /sic0 aresuspended for a period of seven /30working days without pay eDectivefrom the date the rst suspensionwill expire



1n 8arch 3, #++#, private respondent led a

detailed and itemiFed computation of his money

claims totaling 4#3,2+.+, to which petitioner led

its comment on )pril (<, #++# The computation led

on 8arch 3, #++# was later reduced to 45.,*(< Tosuch revised computation, the petitioner submitted its

comment on )pril (<, #++#

Thereafter, labor arbiter ornelio & &insangan

rendered a decision dated %ovember ##, #++#

granting overtime pay as follows:

97;';@1';, udgment is hereby rendered:

# Branting the claim for overtime paycovering the period 1ctober #, #+<3 to%ovember *, #+<+ in the amount of 4(<,*22..

( The claim for non-payment of 4(.salary increase pursuant to 'epublic )ct%o 53(3 is dismissed for lack of merit

)ggrieved by the aforesaid decision, petitioner

appealed to public respondent %&' only to be

reected on )pril (*, #++( via the herein assailed

!ecision, the dispositive portion of which reads as

follows:

97;';@1';, premises considered, the award isreduced to an amount of T9;%TG ;IB7T T71H6)%!6ITG-6I 4;616 )%! 2.J# /4(<,552.0 In all otherrespects, the !ecision under review is hereby)@@I'8;! and the appeal !I68I66;! for lack of merit

%o motion for reconsideration of the !ecision was

led by the petitioner"5$

9hat transpired afterwards is narrated by the

6olicitor Beneral in his memorandum,"3$

which wepresume to be correct since petitioner did not

contradict the same in its memorandum:

x x x 4etitioner did not appeal the !ecision of respondent %&' 9hen it became nal, the partieswere called to a conference on Aune (+, #++( todetermine the possibility of the parties voluntarycompliance with the !ecision /1rder of &abor )rbiter&insangan, dated Auly (*, #++(0

x x x In their second conference, held on Auly #.,#++(, petitioner proposed to private respondent apackage compromise agreement in settlement of allpending claims 4rivate respondent for his partdemanded 4#., as settlement of his complaintwhich was turned down by petitioner as tooexcessive Hnfortunately, no positive results wereachieved

)s a result, a pleading was led by petitioner

captioned: 8otion to !efer ;xecution and 8otion to 'e-ompute alleged overtime pay 4etitioner states thatquite recently, the ;mployee 4ayroll 6heets pertainingto the salaries, overtime pay, vacation and sick leaveof )ngel ;squeo were located

x x x 4etitioners 8otion to !efer ;xecution and8otion to 'e-ompute respondents overtime pay wasdenied in an 1rder dated Auly (*, #++(







x x x 4etitioner moved to reconsider the !enial1rder on Auly (3, #++( 4rivate respondent opposed

In the meantime, petitioner led the instant special

civil action for certiorari before this ourt on Auly #,#++( &ater, on Auly #3, #++(, citing as reason that x x

x quite recently, the ;mployee 4ayroll 6heets which

contained the salaries and overtime pay received by

respondent ;squeo were located in the bodega of the

petitioner and based on said 4ayroll 6heets, it appears

that substantial overtime pay have been paid to

respondent ;squeo in the amount of 4(2,(<*(( for

the period starting Aanuary #+<3 up to %ovember

#+<+, petitioner asked this ourt for the issuance of a

temporary restraining order or writ of preliminaryinunction 1n the same date of Auly #3, #++(, a

6upplemental 4etition >ased 1n %ewly !iscovered

;vidence was led by petitioner to which was attached

photocopies of payroll sheets of the aforestated

period

1n Auly (+, #++(, this ourt issued a temporary

restraining order enoining the respondents from

enforcing the !ecision dated )pril (*, #++( issued in

%&' %' ) %o (.((-+#, the case below subectof the instant petition

!- Issu-s

@or issues have been raised by the petitioner in its

eDort to obtain a reversal of the assailed !ecision, to

wit:

I

T7; ';641%!;%T %&' 188ITT;! ) B')K; )>H6;1@ !I6';TI1% 97;% IT 'H&;! T7)T 4'IK)T;';641%!;%T I6 ;%TIT&;! T1 1K;'TI8; 4)G 97;% T7; 6)8; I6 ) B'166 1%T')K;%TI1% 1@ T7;1%T')T 1@ ;84&1G8;%T >;T9;;% 4;TITI1%;')%! ';641%!;%T ;6LH;A1 )%! ) 4)T;%T KI1&)TI1%1@ )'TI&;6 #*., #*5 )%! ##.+ 1@ T7; IKI&1!;

II

T7; ';641%!;%T %&' 188ITT;! ) B')K; )>H6;1@ !I6';TI1% I% )9)'!I%B 1K;'TI8; 4)G 1@

4(<,552. T1 4'IK)T; ';641%!;%T 97;% T7;6)8; I6 ) &;)' KI1&)TI1% 1@ )'TI&; (( 1@ T7;IKI& 1!; 1% H%AH6T ;%'I78;%T

III

T7; ';641%!;%T %&' 188ITT;! ) B')K; )>H6;!1@ !I6';TI1% 97;% IT 'H&;! T7)T 4'IK)T;';641%!;%T 9)6 %1T 4)I! T7; 1K;'TI8; 4)G>)6;! 1% T7; 184HT)TI1% 1@ &)>1' )'>IT;'1'%;&I1 &I%6)%B)% 97I7 9)6 )@@I'8;! >G 6)I!

';641%!;%T %&' 97;% T7; 6)8; I6 %1T6H441'T;! >G 6H>6T)%TI)& ;KI!;%; )%! IT, T7;';@1';, KI1&)T;! T7; )'!I%)& 4'I8)'G'IB7T6 1@ 4;TITI1%;' )6 4';6'I>;! I% ANG TIA! VS. "I# 5+ 47I& 5*.

IK



97;T7;' 1' %1T T7; 4;TITI1%;'6 6H44&;8;%T)&4;TITI1% >)6;! 1% %;9&G !I61K;';! ;KI!;%;8)G >; )!8ITT;! )6 4)'T 1@ IT6 ;KI!;%; IT >;I%BK;'G KIT)& T1 T7; AH!II1H6 !;T;'8I%)TI1% 1@ T7;)6;/#ollo, p *530

In essence the above issues boil down to this query:

Is an employee entitled to overtime pay for work

rendered in excess of the regular eight hour day given

the fact that he entered into a contract of labor

specifying a work-day of twelve hours at a xed

monthly rate above the legislative minimum wage?

!- outs Ru&g

)t the outset, we would like to rectify the statement

made by the 6olicitor Beneral that the petitioner did

not appeal from the !ecision of /public0

respondent %&' The elevation of the said case by

appeal is not possible The only remedy available from

an order or decision of the %&' is a petition

for certiorari under 'ule 5. of the 'ules of ourt

alleging lack or excess of urisdiction or grave abuse of

discretion "<$ The general rule now is that the special

civil action of certiorari should be instituted within aperiod of three months"+$ 7ence, when the petition

was led on Auly #, #++(, three months had not yet

elapsed from petitioners receipt of the assailed

!ecision /should really be from receipt of the order

denying the motion for reconsideration0

7owever, aside from failing to show clearly grave

abuse of discretion on the part of respondent %&',

which we shall discuss shortly, the petitioner also

failed to comply with the mandatory requirement of

ling a motion for reconsideration from the !ecision of

the 4ublic respondent before resorting to the remedy

of certiorari 9e have previously held that:

x x x The implementing rules of respondent %&'are unequivocal in requiring that a motion forreconsideration of the order, resolution, or decision of respondent commission should be seasonably led asa precondition for pursuing any further or subsequentremedy, otherwise the said order, resolution, ordecision shall become nal and executory after tencalendar days from receipts thereof 1bviously, therationale therefor is that the law intends to aDord the

%&' an opportunity to rectify such errors or mistakesit may have lapsed into before resort to the courts of ustice can be had This merely adopts the rule thatthe function of a motion for reconsideration is to pointto the court the error that it may have committed andto give it a chance to correct itself "#$

)dditionally, the allegations in the petition clearlyshow that petitioner failed to le a motion forreconsideration of the assailed 'esolution before lingthe instant petition )s correctly argued by private

respondent 'olando Tan, such failure constitutes afatal inrmity x x x The unquestioned rule in his urisdiction is that certiorari will lie only if there is noappeal or any other plain, speedy and adequateremedy in the ordinary course of law against the actsof public respondent In the instant case, the plain andadequate remedy expressly provided by law was amotion for reconsideration of the assailed decision,based on palpable or patent errors, to be made under









oath and led within ten /#0 calendar days fromreceipt of the questioned decision )nd for failure toavail of the correct remedy expressly provided by law,petitioner has permitted the subect 'esolution tobecome nal and executory after the lapse of the ten

day period within which to le such motion forreconsideration "##$

In brief, the ling of the instant petition was

premature and did not toll the running of the * month

period Thus, the assailed !ecision became nal and

executory 1n this ground alone, this petition must

therefore be dismissed

7owever, in view of the importance of the

substantial query raised in the petition, we haveresolved to decide the case on the merits also

!- st Issu-+ Was Overtime Pay Included?

The main disagreement between the parties centers

on how the contract of employment of the private

respondent should be interpreted The terms and

conditions thereof read as follows:

!ate: @ebruary (2, #+<5

%)8; : ;6LH;A1, )%B;&

%)TH'; 1@ )TI1% : )441I%T8;%T

@'18 :

416ITI1% TIT&; : 184)%G BH)'!

T1 :

6T)TH6 : 4;'8)%;%T

;@@;TIK; !)T; : 8)'7 #, #+<5

@'18 : 4#,++ per month

plus 4.# emergency

allowance

6)&)'G :

T1 :

------------------------------

';8)'C6 : To conrm permanent

appointment as company

guard who will render #(

hours a day with one /#0

day oD

------------------------------

';188;%!;! >G: )44'1K;! >G:

/6igned0 /6igned0





6H&4II1 > A1'%)&;6 )T)&I%1 @ >)%;M

/6igned0

)%B;& K ;6LH;A1"#($

4etitioner faults the public respondent when it said

that there was no meeting of minds between the

parties, since the employment contract explicitly

states without any equivocation that the overtime pay

for work rendered for four /20 hours in excess of the

eight /<0 hour regular working period is already

included in the 4#,++ basic salary This is very

clear from the fact that the appointment states #(

hours a day work

"#*$

>y its computations,

"#2$

petitionertried to illustrate that private respondent was paid

more than the legally required minimum salary then

prevailing

To prove its contention, petitioner argues that:

The legal minimum wage prescribed by our statutes,the legally computed overtime pay and the monthlysalaries being paid by petitioner to respondent ;squeowould show that indeed, the overtime pay has alwaysbeen absorbed and included in the said agreedmonthly salaries

In #+<5, the legal minimum salary of ;squeo iscomputed as follows /per )ppointment 8emorandadated @ebruary 2, #+<5 and Aune 5, #+<5 ")nnex and! of )nnex > of this 4etition$0:

.2 x *#2 days

#( months N 4#,2#* monthlysalary

The hourly overtime pay is computed as follows:

.2J< hours N 453. x 2 hrs N 4(3

4(3 x #(. N 4**3. x ( /should be (50 daysN 4<<3.

/should be 4<33.0

4#,2#* - legal minimum wage

O <<3./<33.0 - legal overtime pay

4(,(+. - amount due to respondent

;squeo under the law

4(,. - gross salary of ;squeo percontract

-(,(+.

4 (+. - !iDerence /#ollo, p *3#0

1n the other hand, private respondent in his position

paper claims that overtime pay is not so incorporated

and should be considered apart from the 4#,++

basic salary"#.$











9e nd for the private respondent and uphold the

respondent %&'s ruling that he is entitled to overtime

pay

>ased on petitioners own computations, it appearsthat the basic salary plus emergency allowance givento private respondent did not actually include theovertime pay claimed by private respondent @ollowingthe computations it would appear that by adding thelegal minimum monthly salary which at the time was4#,2#* and the legal overtime pay 4<33., thetotal amount due the private respondent as basicsalary should have been 4(,(+. >y adding theemergency cost of living allowance /;1&)0 of 4.# as provided by the employment contract, the

total basic salary plus emergency allowance shouldhave amounted to 4(,<. 7owever, petitioneradmitted that it actually paid private respondent4#,++ as basic salary plus 4.# emergencyallowance or a total of only 4(,. Hndoubtedly,private respondent was shortchanged in the amount of 4*. 4etitioners own computations thus clearlyestablish that private respondents claim for overtimepay is valid

S'- Issu-+ Meeting of the Minds?

The petitioner contends that the employment

contract between itself and the private respondent

perfectly satises the requirements of )rticle #*. of

the ivil ode as to the meeting of the minds such that

there was a legal and valid contract entered into by

the parties Thus, private respondent cannot be

allowed to question the said salary arrangements for

the extra 2 hours overtime pay after the lapse of 2

years and claim only now that the same is not included

in the terms of the employment contract"#5$

9e disagree 4ublic respondent correctly found nosuch agreement as to overtime pay In fact, the

contract was denite only as to the number of hours of

work to be rendered but vague as to what is covered

by the salary stipulated 6uch ambiguity was resolved

by the public respondent, thus:

In resolving the issue of whether or not complainantsovertime pay for the four /20 hours of work rendered inexcess of the normal eight hour work period isincorporated in the computation of his monthly salary,respondent invokes its contract of employment withthe complainant 6aid contract appears to be in thenature of a document identiable as an appointmentmemorandum which took eDect on 8arch #, #+<5/'ecords, p .50 by virtue of which complainantexpressed conformity to his appointment as companyguard with a work period of twelve /#(0 hours a daywith one /#0 day oD )ttached to this post is a basicsalary of 4#,++ plus 4.# emergencyallowance It is /a0 cardinal rule in the interpretation of

a contract that if the terms thereof are clear and leaveno doubt upon the intention of the contracting parties,then the literal meaning of its stipulations shallcontrol /)rt #*3, ivil ode of the 4hilippines0 Tothis, respondent seeks refuge ircumstances,however, do not allow us to consider this rule in thelight of complainants claim for overtime pay which isan evident indication that as to this matter, it cannotbe said that there was a meeting of the mindsbetween the parties, it appearing that respondent





considered the four /20 hours work in excess of theeight hours as overtime work and compensated byway of complainants monthly salary while on thelatters part, said work rendered is likewise claimed asovertime work but yet unpaid in view of complainants

being given only his basic salary omplainant claimsthat the basic salary could not possibly include thereinthe overtime pay for his work rendered in excess of eight hours 7ence, respondents )ppointment8emorandum cannot be taken and accorded credit asit is so worded in view of this ambiguity 9e thereforeproceed to determine the issue in the light of existinglaw related thereto 9hile it is true that thecomplainant received a salary rate which is higher thatthe minimum provided by law, it does not howeverfollow that any additional compensation due the

complainant can be oDset by his salary in excess of the minimum, especially in the absence of an expressagreement to that eDect To consider otherwise wouldbe in disregard of the rule of nondiminution of benetswhich are above the minimum being extended to theemployees @urthermore, such arrangement is likewisein disregard of the manner required by the law on howovertime compensation must be determined There isfurther the possibility that in view of subsequentincreases in the minimum wage, the existing salary fortwelve /#(0 hours could no longer account for theincreased wage level together with the overtime ratefor work rendered in excess of eight hours This fertileground for a violation of a labor standards provisioncan be eDectively thwarted if there is a clear anddenite delineation between an employees regular andovertime compensation It is, further noted that areading of respondents )ppointment 8emorandaissued to the complainant on diDerent dates /'ecords,pp .5-50 shows that the salary being referred to by

the respondent which allegedly included complainantsovertime pay, partakes of the nature of a basic salaryand as such, does not contemplate any othercompensation above thereof including complainantsovertime pay 9e therefore aErm complainants

entitlement to the latter benet"#3$

4etitioner also insists that private respondents delay

in asserting his rightJclaim demonstrates his

agreement to the inclusion of overtime pay in his

monthly salary rate This argument is specious @irst of

all, delay cannot be attributed to the private

respondent 7e was hired on 8arch #, #+<5 7is

twelve-hour work periods continued until %ovember

*, #+<+ 1n 1ctober #, #++ /ust before he was

suspended0 he led his money claims with the laborarbiter Thus, the public respondent in upholding the

decision of the arbiter computed the money claims for

the three year period from the date the claims were

led, with the computation starting as of 1ctober #,

#+<3 onwards

In connection with the foregoing, we should add

that even if there had been a meeting of the minds in

the instant case, the employment contract could not

have eDectively shielded petitioner from the ust and

valid claims of private respondent Benerally speaking,

contracts are respected as the law between the

contracting parties, and they may establish such

stipulations, clauses, terms and conditions as they

may see t= and for as long as such agreements are

not contrary to law, morals, good customs, public

policy or public order, they shall have the force of law





between them"#<$ 7owever, x x x, while it is the

inherent and inalienable right of every man to have

the utmost liberty of contracting, and agreements

voluntarily and fairly made will be held valid and

enforced in the courts, the general right to contract issubect to the limitation that the agreement must not

be in violation of the onstitution, the statute or some

rule of law /#( )m Aur pp 52#-52(0 "#+$ )nd under the

ivil ode, contracts of labor are explicitly subect to

the police power of the 6tate because they are not

ordinary contracts but are impressed with public

interest"($ Inasmuch as in this particular instance the

contract is question would have been deemed in

violation of pertinent labor laws, the provisions of said

laws would prevail over the terms of the contract, andprivate respondent would still be entitled to overtime

pay

8oreover, we cannot agree with petitioners

assertion that by udging the intention of the parties

from their contemporaneous acts it would appear that

the failure of respondent ;squeo to claim such alleged

overtime pay since #+<5 clearly demonstrate/s0 that

the agreement on his gross salary as contained in his

appointment paper is conclusive on the matter of theinclusion of overtime pay /#ollo, pp #*-#.= also, #ollo,

pp *3<-*<0 This is simply not the case here The

interpretation of the provision in question having been

put in issue, the ourt is constrained to determine

which interpretation is more in accord with the intent

of the parties"(#$ To ascertain the intent of the parties,

the ourt is bound to look at their contemporaneous

and subsequent acts"(($ 4rivate respondents silence

and failure to claim his overtime pay since #+<5

cannot be considered as proving the understanding on

his part that the rate provided in his employment

contract covers overtime pay 4recisely, that is thevery question raised by private respondent with the

arbiter, because contrary to the claim of petitioner,

private respondent believed that he was not paid his

overtime pay and that such pay is not covered by the

rate agreed upon and stated in his )ppointment

8emorandum The subsequent act of private

respondent in ling money claims negates the theory

that there was clear agreement as to the inclusion of

his overtime pay in the contracted salary rate 9hen

an employee fails to assert his right immediately uponviolation thereof, such failure cannot ipso $acto be

deemed as a waiver of the oppression 9e must

recogniFe that the worker and his employer are not

equally situated 9hen a worker keeps silent inspite of

Pagrant violations of his rights, it may be because he

is seriously fearful of losing his ob )nd the dire

consequences thereof on his family and his

dependents prevent him from complaining In short,

his thoughts of sheer survival weigh heavily against

launching an attack upon his more powerful employer

The petitioner contends that the agreed salary rate

in the employment contract should be deemed to

cover overtime pay, otherwise serious distortions in

wages would result since a mere company guard will

be receiving a salary much more that the salaries of

other employees who are much higher in rank and













position than him in the company /#ollo, p #50 9e

nd this argument Pimsy and undeserving of

consideration 7ow can paying an employee the

overtime pay due him cause serious distortions in

salary rates or scales? )nd how can other employeesbe aggrieved when they did not render any overtime

service?

4etitioners allegation that private respondent is

guilty of laches is likewise devoid of merit &aches is

dened as failure or neglect for an unreasonable and

unexplained length of time to do that which, by

exercising due diligence, could or should have been

done earlier It is negligence or omission to assert a

right within an unreasonable time, warranting thepresumption that the party entitled to assert it has

either abandoned or declined to assert it"(*$ The

question of laches is addressed to the sound discretion

of the court, and since it is an equitable doctrine, its

application is controlled by equitable considerations It

cannot work to defeat ustice or to perpetrate fraud

and inustice"(2$ &aches cannot be charged against any

worker when he has not incurred undue delay in the

assertion of his rights 4rivate respondent led his

complaint within the three-year reglementaryperiod 7e did not sleep on his rights for an

unreasonable length of time"(.$

S-/o&' Issu-+ Unjust Enrichment?

4etitioner contends that the award of overtime pay

is plain and simple unust and illegal enrichment 6uch

award in eDect sanctioned and approved the grant of

payment to respondent ;squeo which will result in

double payment for the overtime work rendered by

paid employee"(5$ )lso, per petitioner, /n0othing in the

&abor ode nor in the 'ules and 'egulations issued in

the implementation thereof prohibits the manner of paying the overtime pay /by0 including the same in the

salary"(3$

This is begging the issue To reiterate, the main

question raised before the labor tribunals is whether

the provision on wages in the contract of employment

already included the overtime pay for four /20 working

hours rendered six days a week in excess of the

regular eight-hour work )nd we hold that the tribunals

below were correct in ruling that the stipulated pay didnot include overtime7ence, there can be no undue

enrichment in claiming what legally belongs to private

respondent

!' Issu-+ asis of !"#$s %ecision?

4etitioner assails respondent %&' for adopting that

portion of the decision of the labor arbiter, which reads

as follows:

x x x 1ur conclusion is quite clear considering thefact that at the time of his employment in 8arch #+<5,during which the minimum wage was 4*3 a day for< hours work, complainants total take-home-payworking #( hours a day including ;1&), was only4(,. a month )nd immediately prior to hisappointment as &edger ustodian eDective !ecember#, #+<+, with the working hours reduced to < hours or













2 hours a week, complainants monthly salary was4*,2( /instead of 4.,#5## minimum monthlywith 2 hours overtime work everyday, or a diDerenceof 4#,32## a month0

)ccordingly, the claim for overtime pay reckonedfrom 1ctober #, #+<3 up to %ovember *, #+<+should be, as it is hereby, granted"(<$ /#ollo, p (#0

4etitioner believes that by adopting the above-

quoted portion of the arbiters decision,

respondent %&' violated the cardinal rule that its

decisions must be supported by substantial

evidenceIn doing so, petitioner claims that

the %&' violated its primary rights as enunciated in

the case of Ang Ti%ay vs. "I#"(+$ In other words,petitioner holds the view that the arbiters decision

failed to explain how the amount of 4.,#5## was

arrived at"*$

4etitioner is in error The public respondent did not

adopt in toto the aforequoted portion of the arbiters

decision It made its own computations and arrived at

a slightly diDerent amount, with a diDerence of

4(3<# from the award granted by the labor

arbiter To refute petitioners claim, public respondent

attached /as )nnexes #, #-) #-> and #-0 to its

omment, the computations made by the labor arbiter

in arriving at the sum of 4.,#5# 1n the other hand,

public respondent made its own computation in its

assailed !ecision and arrived at a slightly diDerent

gure from that computed by the labor arbiter:

'espondent claims that the award of 4(<,*22.. isbereft of any factual basis 'ecords show that as percomputation of the oEce of the @iscal ;xaminer,/'ecords, p ##50 the said amount was arrived at Thecomputation was however based on the assumption

that the complainant regularly reported forwork 'ecords however show that the complainantabsented himself from work for one day in )ugust#+<+ /'ecords, p 5*0 @or this unworked day, noovertime pay must be due )s to the rest of his periodof employment subect to the three year limitation rulewhich dates from 1ctober #, #+<3 up to hisappointment as &edger ustodian on !ecember #,#+<+ after which is regular work period was alreadyreduced to eight hours, there being no showing thatthe complainant absented himself from work, and he

being then required to work for a period of twelvehours daily, 9e therefore rule on complainantsentitlement to overtime compensation for the durationof the aforesaid period in excess of one workingday onsequently, complainants overtime pay shall becomputed as follows:

1K;'TI8; 4)G: /2 7'6J!)G0

1ctober #, #+<3 !ecember #*, #+<3

N (# mos

4.2J< hrs N 453. x 2 hrs N 4(3

4(3 x #(. N 4**3. x (5 x (# mos N 4#,<2(3.

!ecember #2, #+<3 Aune *, #+<+ N#<.* mos

452J< hrs N 4< x 2 hrs N 4*(









4*( x #(. N 42 x (5 x #<.* N 4#+,(3#(

Auly #, #+<+ %ovember *, #+<+ N . mos

4<+J< hrs N 4###( x 2 hrs N 422.

422. x #(. N 4..5( x (. x . mosN 45,+.(./45,+.*#(.0

T1T)& 1K;'TI8; 4)G

4(<,552./4(<,533.0 /#ollo, pp (#-(#(0

4rescinding therefrom, it is evident that petitioner

had no basis to argue that

respondent %&' committed any grave abuse of discretion in quoting the questioned portion of the

labor arbiters holding

out Issu-+ !e&ly %iscovered Evidence?

In its 6upplemental 4etition led on Auly #3, #++5,

petitioner alleges in part:

( That only recently, the petitioner was able to

locate the ;mployees 4ayroll 6heets which containedthe salaries, overtime pay, vacation and sick leaves of respondent ;squeo which pertains to the periodstarting from Aanuary #, #+<3 up to %ovember#+<+ Therefore, said total amount of overtime paypaid to and received by respondent ;squeo should bededucted from the computed amount of 4(<,552.based on the questioned decision /#ollo, p ((0

ontrary to petitioners claim however, said

documents consisting of payroll sheets, cannot be

considered as newly-discovered evidence since said

papers were in its custody and possession all along,

petitioner being the employer of private respondent

@urthermore, petitioner oDers no satisfactory

explanation why these documents were unavailable at

the time the case was being heard by the labor

arbiter In its 8emorandum, petitioner excused itself

for its failure to present such evidence before the labor

arbiter and respondent %&' by saying that

petitioner/s oEce0 appeared to be in disorder or in a

state of confusion since the then oEcers /of petitioner0

were disqualied by the 8onetary >oard on grounds of misappropriation of funds of the association and other

serious irregularities There was no formal turn-over of

the documents from the disqualied set of oEcers to

the new oEcers of petitioner"*#$ 9e nd such excuse

weak and unacceptable, the same not being

substantiated by any evidence on record8oreover,

payroll records are normally not in the direct custody

and possession of corporate oEcers but of their

subordinates, ie, payroll clerks and the like In the

normal course of business, such payroll sheets are notthe subect of formal turnovers by outgoing oEcers to

their successors in oEce )nd if indeed it is true that

petitioner had been looking for such records or

documents during the pendency of the case with the

labor arbiter and with public respondent, petitioner

never alleged such search before the said labor

tribunals a quo 7ence, such bare allegations of facts





cannot now be fairly appreciated in this petition

for certiorari, which is concerned only with grave

abuse of discretion or lack /or excess0 of urisdiction

The 6olicitor Beneral quotes with approval a portionof private respondents 1pposition to petitioners

motion for reconsideration thus:

It is clear from the payroll, although the substantialpages thereof do not show that the net amountindicated therein have been received or dulyacknowledged to have been received by thecomplainant, T7)T 1K;'TI8; 4)G8;%T6 T7)T 9;';8)!; ';@;' T1 91'C ';%!;';! !H'I%B184&)I%)%T6 1@@ !)G6 9hat has been rightfully

claimed by the complainant and awarded by this7onorable 1Ece is the overtime works /sic0 renderedby the complainant daily for six /50 days a weekcomputed at four /20 hours per day This computationis based on the evidence thus submitted by theparties )ll appointments issued by the respondentcarries /sic0 with it /sic0 that the basic salary of thecomplainant is equivalent to #( hours work everydayfor six /50 days a week, hence, the four /20 hoursovertime daily was not considered and therefore notpaid by the respondent /#ollo, p *(30

It has been consistently held that factual issues are

not proper subects of a petition for certiorari, as the

power of the 6upreme ourt to review labor cases is

limited to questions of urisdiction and grave abuse of

discretion "*($ The introduction in this petition of so-

called newly discovered evidence is unwarranted This

ourt is not a trier of facts and it is not its function to

examine and evaluate the evidence the evidence

presented /or which ought to have been presented0 in

the tribunals below"**$

4EREORE, in view of the foregoingconsiderations, the 4etition is &IS'ISSE&, the

temporary restraining order issued on Auly *,

#++( LI(TE&, and the assailed decision of the public

respondent A((I#'E& osts against petitioner

SO ORDERED.

Narvasa) ".*. +",airman-) &avide) *r.)

'elo and (rancisco) **.) concur.

G.R. No. 102132. M%/ 19, 1993.

!)K)1 I%T;B')T;! 41'T 6T;K;!1'I%B 6;'KI;6,petitioner, vs 'H>;% K )>)'LH;M, in his capacity asan accredited Koluntary )rbitrator and T7;)661I)TI1% 1@ T')!; H%I1%6 /)TH-TH40,

respondents

&ibron, Baspar Q )ssociates for petitioner

>ansalan > 8etilla for )ssociation of Trade Hnions/)THTH40

6G&&)>H6







# &)>1' &)96 )%! 61I)& &;BI6&)TI1%= &)>1'';&)TI1%6= 1&&;TIK; >)'B)I%I%B )B';;8;%T=!;@I%;!= %)TH'; T7;';1@= 1%6T'HTI1% T1 >;4&);! T7;';1% R ) collective bargainingagreement />)0, as used in )rticle (.( of the &abor

ode, refers to a contract executed upon request of either the employer or the exclusive bargainingrepresentative incorporating the agreement reachedafter negotiations with respect to wages, hours of workand all other terms and conditions of employment,including proposals for adusting any grievances orquestions arising under such agreement 9hile theterms and conditions of a >) constitute the lawbetween the parties, it is not, however, an ordinarycontract to which is applied the principles of lawgoverning ordinary contracts ) >), as a labor

contract within the contemplation of )rticle #3 of the ivil ode of the 4hilippines which governs therelations between labor and capital, is not merelycontractual in nature but impressed with publicinterest, thus, it must yield to the common good )ssuch, it must be construed liberally rather thannarrowly and technically, and the courts must place apractical and realistic construction upon it, giving dueconsideration to the context in which it is negotiatedand purpose which it is intended to serve

( I!= I!= I!= I!= I!= I!= )6; )T >)' R It is thuserroneous for petitioner to isolate 6ection #, )rticle KIIIof the #+<+ >) from the other related section on sickleave with pay benets, specically 6ection * thereof,in its attempt to ustify the discontinuance orwithdrawal of the privilege of commutation orconversion to cash of the unenoyed portion of the sickleave benet to regular intermittent workers Themanner they were deprived of the privilege previously

recogniFed and extended to them by petitioner-company during the lifetime of the >) of 1ctober #5,#+<. until three /*0 months from its renewal on )pril#., #+<+, or a period of three /*0 years and nine /+0months, is not only tainted with arbitrariness but

likewise discriminatory in nature It must be noted thatthe #+<+ >) has two /(0 sections on sick leave withpay benets which apply to two /(0 distinct classes of workers in petitionerSs company, namely: /#0 theregular non-intermittent workers or those workers whorender a daily eight-hour service to the company andare governed by 6ection #, )rticle KIII of the #+<+ >)=and /(0 intermittent eld workers who are members of the regular labor pool and the present regular extralabor pool as of the signing of the agreement on )pril#., #+<+ or those workers who have irregular working

days and are governed by 6ection *, )rticle KIII of the#+<+ >) It is not disputed that both classes of workers are entitled to sick leave with pay benetsprovided they comply with the conditions set forthunder 6ection # in relation to the last paragraph of 6ection *, to wit: /#0 the employee-applicant must beregular or must have rendered at least one year of service with the company= and /(0 the applicationmust be accompanied by a certication from acompany-designated physician the phrase herein sickleave privilege, as used in the last sentence of 6ection #, refers to the privilege of having a xed #.-day sick leave with pay which, as mandated by 6ection#, only the non-intermittent workers are entitled to This xed #.-day sick leave with pay benet should bedistinguished from the variable number of days of sickleave, not to exceed #. days, extended to intermittentworkers under 6ection * depending on the number of hours of service rendered to the company, includingovertime pursuant to the schedule provided therein It



is only fair and reasonable for petitioner-company notto stipulate a xed #.-day sick leave with pay for itsregular intermittent workers since, as the termintermittent implies, there is irregularity in theirwork-days 'easonable and practical interpretation

must be placed on contractual provisions Interpetatioenda est ut res magis valeat quam pereat 6uchinterpretation is to be adopted, that the thing maycontinue to have eEcacy rather than fail

* I!= I!= I!= 6IC &;)K; >;%;@IT6= %)TH'; )%!4H'416; R 6ick leave benets, like other economicbenets stipulated in the >) such as maternity leaveand vacation leave benets, among others, are bytheir nature, intended to be replacements for regularincome which otherwise would not be earned because

an employee is not working during the period of saidleaves They are non-contributory in nature, in thesense that the employees contribute nothing to theoperation of the benets >y their nature, uponagreement of the parties, they are intended toalleviate the economic condition of the workers

2 I!= I!= AH'I6!ITI1% 1@ K1&H%T)'G )'>IT')T1'=)6; )T >)' R 4etitioner-companySs obection to theauthority of the Koluntary )rbitrator to direct thecommutation of the unenoyed portion of the sickleave with pay benets of intermittent workers in hisdecision is misplaced )rticle (5# of the &abor ode isclear The questioned directive of the herein publicrespondent is the necessary consequence of theexercise of his arbitral power as Koluntary )rbitratorunder )rticle (5# of the &abor ode to hear anddecide all unresolved grievances arising from theinterpretation or implementation of the ollective>argaining )greement 9e, therefore, nd that no

grave abuse of discretion was committed by publicrespondent in issuing the award /decision0 8oreover,his interpretation of 6ections # and *, )rticle KIII of the#+<+ >) cannot be faulted with and is absolutelycorrect

. I!= 1%!ITI1%6 1@ ;84&1G8;%T= 4'17I>ITI1%)B)I%6T ;&I8I%)TI1% 1' !I8I%HTI1% 1@ >;%;@IT6=>;%;@IT6 B')%T;! 4H'6H)%T T1 184)%G4')TI; 1' 41&IG )%%1T >; 4;';84T1'I&G9IT7!')9% R 9hatever doubt there may have beenearly on was clearly obliterated when petitioner-company recogniFed the said privilege and paid itsintermittent workers the cash equivalent of theunenoyed portion of their sick leave with pay benetsduring the lifetime of the >) of 1ctober #5, #+<.

until three /*0 months from its renewal on )pril #.,#+<+ 9ell-settled is it that the said privilege of commutation or conversion to cash, being an existingbenet, the petitioner-company may not unilaterallywithdraw, or diminish such benets It is a fact thatpetitioner-company had, on several instances in thepast, granted and paid the cash equivalent of theunenoyed portion of the sick leave benets of someintermittent workers Hnder the circumstances, thesemay be deemed to have ripened into companypractice or policy which cannot be peremptorilywithdrawn

! ; I 6 I 1 %

'18;'1, A p:

In this petition for certiorari, petitioner !avaoIntegrated 4ort 6ervices orporation seeks to reversethe )ward # issued on 6eptember #, #++# by



respondent 'uben K )barqueF, in his capacity asKoluntary )rbitrator of the %ational onciliation and8ediation >oard, 'egional )rbitration >ranch I in!avao ity in ase %o )-(##->#-#-*-+# whichdirected petitioner to grant and extend the privilege of

commutation of the unenoyed portion of the sickleave with pay benets to its intermittent eld workerswho are members of the regular labor pool and thepresent regular extra pool in accordance with theollective >argaining )greement />)0 executedbetween petitioner and private respondent )ssociationof Trade Hnions /)TH-TH40, from the time it wasdiscontinued and henceforth

The facts are as follows:

4etitioner !avao Integrated 4ort 6tevedoring 6ervices/petitioner-company0 and private respondent )TH-TH4/Hnion0, the exclusive collective bargaining agent of the rank and le workers of petitioner-company,entered into a collective bargaining agreement />)0on 1ctober #5, #+<. which, under 6ections # and *,)rticle KIII thereof, provide for sick leave with paybenets each year to its employees who haverendered at least one /#0 year of service with thecompany, thus:

)'TI&; KIII

6ection # 6ick &eaves R The ompany agrees to grant#. days sick leave with pay each year to every regularnon-intermittent worker who already rendered at leastone year of service with the company 7owever, suchsick leave can only be enoyed upon certication by acompany designated physician, and if the same is notenoyed within one year period of the current year, any

unenoyed portion thereof, shall be converted to cashand shall be paid at the end of the said one yearperiod )nd provided however, that only those regularworkers of the company whose work are notintermittent, are entitled to the herein sick leave

privilege

xxx xxx xxx

6ection * R )ll intermittent eld workers of thecompany who are members of the 'egular &abor 4oolshall be entitled to vacation and sick leaves per year of service with pay under the following schedule basedon the number of hours rendered including overtime,to wit:

7ours of 6ervice 4er Kacation 6ick &eave

alendar Gear &eave

&ess than 3. %II %II

3.# R <(. 5 days 5 days

<(5 R + 3 3

+# R +(. < <

+(5 R #,. + +

#,.# R #,#(. # #

#,#(5 R #,( ## ##

#,(# R #,(3. #( #(



#,(35 R #,*. #* #*

#,*.# R #,2(. #2 #2

#,2(5 R #,. #. #.

The conditions for the availment of the herein vacationand sick leaves shall be in accordance with the aboveprovided 6ections # and ( hereof, respectively

Hpon its renewal on )pril #., #+<+, the provisions forsick leave with pay benets were reproduced under6ections # and *, )rticle KIII of the new >), but thecoverage of the said benets was expanded to includethe present 'egular ;xtra &abor 4ool as of the signing

of this )greement 6ection *, )rticle KIII, as revised,provides, thus:

6ection * R )ll intermittent eld workers of thecompany who are members of the 'egular &abor 4ooland present 'egular ;xtra &abor 4ool as of the signingof this agreement shall be entitled to vacation and sickleaves per year of service with pay under the followingschedule based on the number of hours renderedincluding overtime, to wit:

7ours of 6ervice 4er Kacation 6ick &eave

alendar Gear &eave

&ess than 3. %II %II

3.# R <(. 5 days 5 days

<(5 R + 3 3

+# R +(. < <

+(5 R #,. + +

#,.# R #,#(. # #

#,#(5 R #,( ## ##

#,(# R #,(3. #( #(

#,(35 R #,*. #* #*

#,*.# R #,2(. #2 #2

#,2(5 R #,. #. #.

The conditions for the availment of the herein vacationand sick leaves shall be in accordance with the aboveprovided 6ections # and ( hereof, respectively

!uring the eDectivity of the >) of 1ctober #5, #+<.until three /*0 months after its renewal on )pril #.,#+<+, or until Auly #+<+ /a total of three /*0 years andnine /+0 months0, all the eld workers of petitioner whoare members of the regular labor pool and the presentregular extra labor pool who had rendered at least 3.

hours up to #,. hours were extended sick leave withpay benets )ny unenoyed portion thereof at the endof the current year was converted to cash and paid atthe end of the said one-year period pursuant to6ections # and *, )rticle KIII of the >) The number of days of their sick leave per year depends on thenumber of hours of service per calendar year inaccordance with the schedule provided in 6ection *,)rticle KIII of the >)



The commutation of the unenoyed portion of the sickleave with pay benets of the intermittent workers orits conversion to cash was, however, discontinued orwithdrawn when petitioner-company under a newassistant manager, 8r >enamin 8arFo /who replaced

8r ecilio >eltran, Ar upon the latterSs resignation in Aune #+<+0, stopped the payment of its cashequivalent on the ground that they are not entitled tothe said benets under 6ections # and * of the #+<+>)

The Hnion obected to the said discontinuance of commutation or conversion to cash of the unenoyedsick leave with pay benets of petitionerSs intermittentworkers contending that it is a deviation from the trueintent of the parties that negotiated the >)= that it

would violate the principle in labor laws that benetsalready extended shall not be taken away and that itwould result in discrimination between the non-intermittent and the intermittent workers of thepetitioner-company

Hpon failure of the parties to amicably settle the issueon the interpretation of 6ections # and *, )rticle KIII of the #+<+ >), the Hnion brought the matter forvoluntary arbitration before the %ational onciliationand 8ediation >oard, 'egional )rbitration >ranch I at!avao ity by way of complaint for enforcement of the>) The parties mutually designated publicrespondent 'uben )barqueF, Ar to act as voluntaryarbitrator

)fter the parties had led their respective positionpapers, ( public respondent 'uben )barqueF, Ar issuedon 6eptember #, #++# an )ward in favor of the Hnionruling that the regular intermittent workers are entitled

to commutation of their unenoyed sick leave with paybenets under 6ections # and * of the #+<+ >), thedispositive portion of which reads:

97;';@1';, premises considered, the management

of the respondent !avao Integrated 4ort 6tevedoring6ervices orporation is hereby directed to grant andextend the sick leave privilege of the commutation of the unenoyed portion of the sick leave of all theintermittent eld workers who are members of theregular labor pool and the present extra pool inaccordance with the >) from the time it wasdiscontinued and henceforth

61 1'!;';!

4etitioner-company disagreed with the aforementionedruling of public respondent, hence, the instant petition

4etitioner-company argued that it is clear from thelanguage and intent of the last sentence of 6ection #,)rticle KIII of the #+<+ >) that only the regularworkers whose work are not intermittent are entitled tothe benet of conversion to cash of the unenoyedportion of sick leave, thus: )nd provided,however, that only those regular workers of the

ompany whose work are not intermittent are entitledto the herein sick leave privilege

4etitioner-company further argued that while theintermittent workers were paid the cash equivalent of their unenoyed sick leave with pay benets during theprevious management of 8r >eltran whomisinterpreted 6ections # and * of )rticle KIII of the#+<. >), it was well within petitioner-companySsrights to rectify the error it had committed and stop



the payment of the said sick leave with pay benets)n error in payment, according to petitioner-company,can never ripen into a practice

9e nd the arguments unmeritorious

) collective bargaining agreement />)0, as used in)rticle (.( of the &abor ode, refers to a contractexecuted upon request of either the employer or theexclusive bargaining representative incorporating theagreement reached after negotiations with respect towages, hours of work and all other terms andconditions of employment, including proposals foradusting any grievances or questions arising undersuch agreement

9hile the terms and conditions of a >) constitute thelaw between the parties, * it is not, however, anordinary contract to which is applied the principles of law governing ordinary contracts 2 ) >), as a laborcontract within the contemplation of )rticle #3 of the ivil ode of the 4hilippines which governs therelations between labor and capital, is not merelycontractual in nature but impressed with publicinterest, thus, it must yield to the common good )ssuch, it must be construed liberally rather than

narrowly and technically, and the courts must place apractical and realistic construction upon it, giving dueconsideration to the context in which it is negotiatedand purpose which it is intended to serve .

It is thus erroneous for petitioner to isolate 6ection #,)rticle KIII of the #+<+ >) from the other relatedsection on sick leave with pay benets, specically6ection * thereof, in its attempt to ustify thediscontinuance or withdrawal of the privilege of

commutation or conversion to cash of the unenoyedportion of the sick leave benet to regular intermittentworkers The manner they were deprived of theprivilege previously recogniFed and extended to themby petitioner-company during the lifetime of the >)

of 1ctober #5, #+<. until three /*0 months from itsrenewal on )pril #., #+<+, or a period of three /*0years and nine /+0 months, is not only tainted witharbitrariness but likewise discriminatory in nature4etitioner-company is of the mistaken notion that sincethe privilege of commutation or conversion to cash of the unenoyed portion of the sick leave with paybenets is found in 6ection #, )rticle KIII, only theregular non-intermittent workers and no other canavail of the said privilege because of the proviso foundin the last sentence thereof

It must be noted that the #+<+ >) has two /(0sections on sick leave with pay benets which apply totwo /(0 distinct classes of workers in petitionerSscompany, namely: /#0 the regular non-intermittentworkers or those workers who render a daily eight-hourservice to the company and are governed by 6ection#, )rticle KIII of the #+<+ >)= and /(0 intermittenteld workers who are members of the regular laborpool and the present regular extra labor pool as of thesigning of the agreement on )pril #., #+<+ or thoseworkers who have irregular working days and aregoverned by 6ection *, )rticle KIII of the #+<+ >)

It is not disputed that both classes of workers areentitled to sick leave with pay benets provided theycomply with the conditions set forth under 6ection # inrelation to the last paragraph of 6ection *, to wit: /#0the employee-applicant must be regular or must haverendered at least one year of service with the



company= and /(0 the application must beaccompanied by a certication from a company-designated physician

6ick leave benets, like other economic benets

stipulated in the >) such as maternity leave andvacation leave benets, among others, are by theirnature, intended to be replacements for regularincome which otherwise would not be earned becausean employee is not working during the period of saidleaves 5 They are non-contributory in nature, in thesense that the employees contribute nothing to theoperation of the benets 3 >y their nature, uponagreement of the parties, they are intended toalleviate the economic condition of the workers

)fter a careful examination of 6ection # in relation to6ection *, )rticle KIII of the #+<+ >) in light of thefacts and circumstances attendant in the instant case,we nd and so hold that the last sentence of 6ection #,)rticle KIII of the #+<+ >), invoked by petitioner-company does not bar the regular intermittent workersfrom the privilege of commutation or conversion tocash of the unenoyed portion of their sick leave withpay benets, if qualied @or the phrase herein sickleave privilege, as used in the last sentence of 6ection #, refers to the privilege of having a xed #.-day sick leave with pay which, as mandated by 6ection#, only the non-intermittent workers are entitled to This xed #.-day sick leave with pay benet should bedistinguished from the variable number of days of sickleave, not to exceed #. days, extended to intermittentworkers under 6ection * depending on the number of hours of service rendered to the company, includingovertime pursuant to the schedule provided therein Itis only fair and reasonable for petitioner-company not

to stipulate a xed #.-day sick leave with pay for itsregular intermittent workers since, as the termintermittent implies, there is irregularity in theirwork-days 'easonable and practical interpretationmust be placed on contractual provisions Interpetatio

enda est ut res magis valeat quam pereat 6uchinterpretation is to be adopted, that the thing maycontinue to have eEcacy rather than fail <

9e nd the same to be a reasonable and practicaldistinction readily discernible in 6ection #, in relationto 6ection *, )rticle KIII of the #+<+ >) between thetwo classes of workers in the company insofar as sickleave with pay benets are concerned )ny otherdistinction would cause discrimination on the part of intermittent workers contrary to the intention of the

parties that mutually agreed in incorporating thequestioned provisions in the #+<+ >)

4ublic respondent correctly observed that the partiesto the >) clearly intended the same sick leaveprivilege to be accorded the intermittent workers inthe same way that they are both given the sametreatment with respect to vacation leaves - non-commutable and non-cumulative If they are treatedequally with respect to vacation leave privilege, withmore reason should they be on par with each otherwith respect to sick leave privileges + >esides, if theintention were otherwise, during its renegotiation, whydid not the parties expressly stipulate in the #+<+ >)that regular intermittent workers are not entitled tocommutation of the unenoyed portion of their sickleave with pay benets?

9hatever doubt there may have been early on wasclearly obliterated when petitioner-company



recogniFed the said privilege and paid its intermittentworkers the cash equivalent of the unenoyed portionof their sick leave with pay benets during the lifetimeof the >) of 1ctober #5, #+<. until three /*0 monthsfrom its renewal on )pril #., #+<+ 9ell-settled is it

that the said privilege of commutation or conversion tocash, being an existing benet, the petitioner-companymay not unilaterally withdraw, or diminish suchbenets # It is a fact that petitioner-company had, onseveral instances in the past, granted and paid thecash equivalent of the unenoyed portion of the sickleave benets of some intermittent workers ## Hnderthe circumstances, these may be deemed to haveripened into company practice or policy which cannotbe peremptorily withdrawn #(

8oreover, petitioner-companySs obection to theauthority of the Koluntary )rbitrator to direct thecommutation of the unenoyed portion of the sickleave with pay benets of intermittent workers in hisdecision is misplaced )rticle (5# of the &abor ode isclear The questioned directive of the herein publicrespondent is the necessary consequence of theexercise of his arbitral power as Koluntary )rbitratorunder )rticle (5# of the &abor ode to hear anddecide all unresolved grievances arising from theinterpretation or implementation of the ollective>argaining )greement 9e, therefore, nd that nograve abuse of discretion was committed by publicrespondent in issuing the award /decision0 8oreover,his interpretation of 6ections # and *, )rticle KIII of the#+<+ >) cannot be faulted with and is absolutelycorrect

97;';@1';, in view of the foregoing, the petition is!I68I66;! The award /decision0 of public respondent

dated 6eptember #, #++# is hereby )@@I'8;! %ocosts

61 1'!;';!

G.R. No. 9172 S-8t-:- 11, 1991

PNO;ENERGY DEVELOPMEN!ORPORA!ION, petitioner,vsNA!IONAL LA$OR RELA!IONS OMMISSION"!' D<so&# %&' DANILOMERADO, respondents.

acorro Associates $or petitioner.

Al%erto L. &almacion $or private respondent.

PARAS, J'(p

This is a petition for certiorari to set aside the'esolution = dated Auly *, #+<3 of respondent %ational&abor 'elations ommission /%&' for brevity0 whichaErmed the decision dated )pril *, #+<5 of &abor)rbiter Kito A 8inoria of the %&', 'egional )rbitration>ranch %o KII at ebu ity in ase %o ')>-KII-..5-<. entitled !anilo 8ercado, omplainant, vs



4hilippine %ational 1il ompany-;nergy !evelopmentorporation, 'espondent, ordering the reinstatementof complainant !anilo 8ercado and the award of various monetary claims

The factual background of this case is as follows:

4rivate respondent !anilo 8ercado was rst employedby herein petitioner 4hilippine %ational 1il ompany-;nergy !evelopment orporation /4%1-;! forbrevity0 on )ugust #*, #+3+ 7e held various positionsranging from clerk, general clerk to shipping clerkduring his employment at its ebu oEce until histransfer to its establishment at 4alimpinon,!umaguete, 1riental %egros on 6eptember ., #+<21n Aune *, #+<., private respondent 8ercado was

dismissed 7is last salary was 4#,.<. a month basicpay plus 4< living allowance /&abor )rbiterSs!ecision, )nnex ; of 4etition, 'ollo, p .(0

The grounds for the dismissal of 8ercado are allegedlyserious acts of dishonesty committed as follows:

# 1n )priI #(, #+<., !anilo 8ercado wasordered to purchase #,2 pieces of nipashingles from 8rs &eonardo %odado of

>anilad, !umaguete ity, for the totalpurchase price of 4l,5< )gainstcompany policy, regulations and specicorders, !anilo 8ercado withdrew the nipashingles from the supplier but paid theamount of 4#, only !anilo 8ercadoappropriated the balance of 45< forhis personal use=

( In the same transaction stated above,the supplier agreed to give the companya discount of 43 which !anilo8ercado did not report to the company=

* 1n 8arch (<, #+<., !anilo 8ercadowas instructed to contract the services of @red ' 8elon of !umaguete ity, for thefabrication of rubber stamps, for the totalamount of 4(<55 !anilo 8ercado paidthe amount of 4( to @red ' 8elonand appropriated for his personal use thebalance of 4<55

In addition, private respondent, !anilo8ercado violated company rules and

regulations in the following instances:

# 1n Aune ., #+<., !anilo 8ercado wasabsent from work without leave, withoutproper turn-over of his work, causingdisruption and delay of company workactivities=

( 1n Aune #., #+<., !anilo 8ercado wenton vacation leave without prior leave,

against company policy, rules andregulations /4etitionerSs 8emorandum,'ollo, p #+.0

1n 6eptember (*, #+<., private respondent 8ercadoled a complaint for illegal dismissal, retirementbenets, separation pay, unpaid wages, etc againstpetitioner 4%1-;! before the %&' 'egional)rbitration >ranch %o KII docketed as ase %o ')>-KII-..5-<.



)fter private respondent 8ercado led his positionpaper on !ecember #5, #+<. /)nnex > of the4etition, 'ollo, pp (<-20, petitioner 4%1-;! led its4osition 4aperJ8otion to !ismiss on Aanuary #., #+<5,praying for the dismissal of the case on the ground

that the &abor )rbiter andJor the %&' had no urisdiction over the case /)nnex of the 4etition,'ollo, pp 2#-2.0, which was assailed by privaterespondent 8ercado in his 1pposition to the 4osition4aperJ8otion to !ismiss dated 8arch #(, #+<5 /)nnex! of the 4etition, 'ollo, pp 25-.0

The &abor )rbiter ruled in favor of private respondent8ercado The dispositive onion of said decision readsas follows:

97;';@1';, in view of the foregoing,respondents are hereby ordered:

#0 To reinstate complainant to his formerposition with full back wages from thedate of his dismissal up to the time of hisactual reinstatement without loss of seniority rights and other privileges=

(0 To pay complainant the amount of

4#, representing his personalshare of his savings account with therespondents=

*0 To pay complainants the amount of 4*, moral damages= 4(,exemplary damages and 4.,attorneySs fees=

20 To pay complainant the amount of 43+(. as his proportionate #*th monthpay for #+<.

'espondents are hereby further ordered

to deposit the aforementioned amountswith this 1Ece within ten days fromreceipt of a copy of this decision forfurther disposition

61 1'!;';!/&abor )rbiterSs !ecision, 'ollo, p .50

The appeal to the %&' was dismissed for lack of meriton Auly *, #+<3 and the assailed decision was aErmed

7ence, this petition

The issues raised by petitioner in this instant petitionare:

# 9hether or not matters of employmentaDecting the 4%1-;!, a government-owned and controlled corporation, arewithin the urisdiction of the &abor )rbiterand the %&'

( )ssuming the aErmative, whether ornot the &abor )rbiter and the %&' are ustied in ordering the reinstatement of private respondent, payment of hissavings, and proportionate #*th monthpay and payment of damages as well asattorneySs fee



4etitioner 4%1-;! alleges that it is a corporationwholly owned and controlled by the government= thatthe ;nergy !evelopment orporation is a subsidiary of the 4hilippine %ational 1il ompany which is agovernment entity created under 4residential !ecree

%o **2, as amended= that being a government-ownedand controlled corporation, it is governed by the ivil6ervice &aw as provided for in 6ection #, )rticle II-> of the #+3* onstitution, 6ection .5 of 4residential!ecree %o <3 /ivil 6ervice !ecree0 and )rticle (33of 4residential !ecree %o 22(, as amended /&aborode0

The #+3* onstitution provides:

The ivil 6ervice embraces every branch,

agency, subdivision and instrumentalityof the government including government-owned or controlled corporations

4etitioner 4%1-;! argued that since &abor )rbiter8inoria rendered the decision at the time when the#+3* onstitution was in force, said decision is nulland void because under the #+3* onstitution,government-owned and controlled corporations weregoverned by the ivil 6ervice &aw ;ven assuming that4%1-;! has no original or special charter and6ection (/i0, )rticle I-> of the #+<3 onstitutionprovides that:

The ivil 6ervice embraces all branches,subdivision, instrumentalities andagencies of the Bovernment, includinggovernment-owned or controlledcorporations with original charters

such circumstances cannot give validity to the decisionof the &abor )rbiter /I%id, pp #+(-#+*0

This issue has already been laid to rest in the caseof PN/"0E&" vs. Leogardo, #3. 6') (5 /Auly ., #+<+0,

involving the same petitioner and the same issue,where this ourt ruled that the doctrine thatemployees of government-owned andJor concontrolled corporations, whether created by speciallaw or formed as subsidiaries under the Beneralorporation law are governed by the ivil 6ervice &awand not by the &abor ode, has been supplanted bythe present onstitution Thus, under the presentstate of the law, the test in determining whether agovernment-owned or controlled corporation is subectto the ivil 6ervice &aw are the manner of its creation,

such that government corporations created by specialcharter are subect to its provisions while thoseincorporated under the Beneral orporation &aw arenot within its coverage

6pecically, the 4%1-;! having been incorporatedunder the Beneral orporation &aw was held to be agovernment owned or controlled corporation whoseemployees are subect to the provisions of the &aborode /I%id0

The fact that the case arose at the time when the #+3*onstitution was still in eDect, does not deprive the%&' of urisdiction on the premise that it is the #+<3onstitution that governs because it is the onstitutionin place at the time of the decision /%)6;1 v %&',B' %o 5+<3, #5< 6') #(( "#+<<$0

In the case at bar, the decision of the %&' waspromulgated on Auly *, #+<3 )ccordingly, this case



falls squarely under the rulings of the aforementionedcases

)s regards the second issue, the record shows that4%1-;!Ss accusations of dishonesty and violations

of company rules are not supported by evidence%onetheless, while acknowledging the rule thatadministrative bodies are not governed by the strictrules of evidence, petitioner 4%1-;! alleges thatthe labor arbiterSs propensity to decide the casethrough the position papers submitted by the parties isviolative of due process thereby rendering the decisionnull and void /I%id, p #+50

1n the other hand, private respondent contends thatas can be seen from petitionerSs 8otion for

'econsideration andJor )ppeal dated Auly (<, #+<5/)nnex @ of the 4etition, 'ollo, pp .3- 520, the latternever questioned the ndings of facts of the &abor)rbiter but simply limited its obection to the lack of legal basis in view of its stand that the %&' had no urisdiction over the case /4rivate 'espondentSs8emorandum, 'ollo, p #20

4etitioner 4%1-;! led its 4osition 4aperJ8otion to!ismiss dated Aanuary #., #+<5 /)nnex of the4etition 'ollo, pp 2#-2.0 before the 'egional)rbitration >ranch %o KII of ebu ity and its 8otionfor 'econsideration andJor )ppeal dated Auly (<, #+<5/)nnex @ of the 4etition, 'ollo, pp .3-520 before the%&' of ebu ity Indisputably, the requirements of due process are satised when the parties are givenan opportunity to submit position papers 9hat thefundamental law abhors is not the absence of previousnotice but rather the absolute lack of opportunity toventilate a partySs side There is no denial of due

process where the party submitted its position paperand Pied its motion for reconsideration /1din 6ecurity)gency vs !e la 6erna, #<( 6') 23( "@ebruary (#,#++$0 4etitionerSs subsequent 8otion for'econsideration andJor )ppeal has the eDect of curing

whatever irregularity might have been committed inthe proceedings below /T7 Kalderama and 6ons, Incvs !rilon, #<# 6') *< "Aanuary ((, #++$0

@urthermore, it has been consistently held thatndings of administrative agencies which haveacquired expertise because their urisdiction isconned to specic matters are accorded not onlyrespect but even nality /)sian onstruction and!evelopment orporation vs %&', #<3 6') 3<2"Auly (3, #++$= &opeF 6ugar orporation vs @ederation

of @ree 9orkers, #<+ 6') #3+ ")ugust *, #++$0 Audicial review by this ourt does not go so far as toevaluate the suEciency of the evidence but is limitedto issues of urisdiction or grave abuse of discretion/@ilipinas 8anufacturers >ank vs %&', #<( 6') <2<"@ebruary (<, #++$0 ) careful study of the recordsshows no substantive reason to depart from theseestablished principles

9hile it is true that loss of trust or breach of condence is a valid ground for dismissing anemployee, such loss or breach of trust must havesome basis /Bubac v %&', #<3 6') 2#( "Auly #*,#++$0 )s found by the &abor )rbiter, the accusationsof petitioner 4%1-;! against private respondent8ercado have no basis 8rs &eonardo %odado, fromwhom the nipa shingles were purchased, suEcientlyexplained in her aEdavit /'ollo, p *50 that the totalpurchase price of 4#,5< was paid by respondent8ercado as agreed upon The alleged discount given



by 8rs %odado is not supported by evidence as wellas the alleged appropriation of 4<55 from the cost of fabrication of rubber stamps The &abor )rbiter,likewise, found no evidence to support the allegedviolation of company rules 1n the contrary, he found

respondent 8ercadoSs explanation in his aEdavit/'ollo, pp *<-20 as to the alleged violations to besatisfactory 8oreover, these ndings were nevercontradicted by petitioner petitioner 4%1-;!

4';8I6;6 1%6I!;';!, the petition is !;%I;! andthe resolution of respondent %&' dated Auly *, #+<3 is)@@I'8;! with the modication that the moraldamages are reduced to Ten Thousand /4#,04esos, and the exemplary damages reduced to @ive Thousand /4.,0 4esos

61 1'!;';!



G.R. No. 11017 S-8t-:- >, 1996

*OSE G. E$RO III, petitioner,

vsNA!IONAL LA$OR RELA!IONS OMMISSION,IN!ERNA!IONAL A!OLI MIGRA!IONOMMISSION, *ON DARRA, ALE? DY;REYES,ARRIE 4ILSON, %&' MARIVISOLIVEN, respondents

MENDO@A, J'(

This is a petition for certiorari to set aside the orderdated 1ctober #*, #++( and the resolution dated8arch *, #++* of the %ational &abor 'elationsommission /%&'0 1

The antecedent facts are as follows:

4rivate respondent International atholic 8igrationommission /I80 is a non-prot agency engaged in

international humanitarian and voluntary work It isduly registered with the Hnited %ational ;conomic and6ocial ouncil /;1610 and enoys onsultative6tatus, ategory II It was one of the agenciesaccredited by the 4hilippine Bovernment to operate

the refugee processing center at 6abang, 8orong,>ataan

1n Aune (2, #+<., private respondent I8 employedpetitioner Aose B ;bro III to teach ;nglish as a 6econd&anguage and ultural 1rientation Training 4rogramat the refugee processing center The employmentcontract provided in pertinent part:

6alary: Gour monthly salary for the rst 5months probationary period is 4*,#..

inclusive of cost of living allowance Hponbeing made regular after successfulcompletion of the six /50 monthsprobationary period your monthly salarywill be adusted to 4*,22. inclusive of cost of living allowance

xxx xxx xxx

Termination of ;mployment: ;mployment

may be terminated by I8 in any of thefollowing situations:

a ) cessation or reduction in programoperations, by !epartment of 6tate order,

b Hnsuccessful completion of probationary period, at any time duringthat period,



c @or due cause, in cases of violation of provisions detailed in I8 4ersonnel4olicies and administrative regulations,

d @or ust and authoriFed causes

expressly provided for or authoriFed bylaw,

e @or reasons of inadequate or decientprofessional performance based onrelevant guidelines and proceduresrelating to the position,

f In cases where, as a member of the4'4 community, I8 is directed to takeaction

If either party wishes to terminateemployment, a notice of two /(0 weeksshould be given in writing to the party

)fter six months, I8 notied petitioner that eDective!ecember (#, #+<., the latterSs services wereterminated for his failure to meet the requirements of # classroom performance up to the standards setin the Buide for Instruction= ( regular attendance in

the mandated teacher training, and in the scheduleteam meetings, one-on-one conferences with thesupervisor, etc= and * compliance with I8 and4'4 policies and procedures

1n @ebruary 2, #+<5, petitioner led a complaint forillegal dismissal, unfair labor practice, underpaymentof wages, accrued leave pay, #2th month pay,damages, attorneySs fees, and expenses of litigation The complaint was led against private respondents

I8 and its 4roect !irector Aon !arrah, 4ersonnel1Ecer )lex !y-'eyes, 4rogram 1Ecer of the ultural1rientation 4rogram arrie 9ilson, and 6upervisor of the ultural 1rientation 4rogram 8arivic 6oliven4etitioner alleged that there was no obective

evaluation of his performance to warrant his dismissaland that he should have been considered a regularemployee from the start because I8 failed toacquaint him with the standards under which he mustqualify as such 7e prayed for reinstatement withbackwages= 4*,#.. for probationary and 4*,22.for regular salary adustments= value of lodging ordormitory privileges= cost of insurance coverage forgroup life, medical, death, dismemberment anddisability benets= moral, and exemplary, and nominaldamages plus interest on the above claims with

attorneySs fees

)nswering the complaint, I8 claimed that petitionerfailed to quality for regular employment because heshowed no interest in improving his professionalperformance both in and out of the classroom after hehad been periodically evaluated /observation summaryfrom )ugust ( to 1ctober (, #+<. and evaluationsummary of !ecember #2, #+<.0= that petitioner waspaid his salary up to !ecember *#, #+<., two weekspay in lieu of notice, and #2th month pay pro-rata= and

that his accrued leave balance already been convertedto cash

)fter the parties had formally oDered their evidence,private respondents submitted their memorandum on Auly *#, #+<+ in which, among other things, theyinvoked I8Ss diplomatic immunity on the basis of the 8emorandum of )greement signed on Auly #.,#+<< between the 4hilippines government and I8



The &abor )rbiter held that petitionerSs legal immunityunder the 8emorandum could not be given retroactiveeDect since "that would$ deprive complainantSsproperty right without due process and impair theobligation of contract of employment In addition, he

expressed doubt about petitionerSs legal immunity onthe ground that it was provided for by agreement andnot through an act of ongress )ccordingly, the &abor)rbiter ordered I8 to reinstate petitioner as regularteacher without loss of seniority rights and to pay himone year backwages, other benets, and ten percentattorneySs fees for a total sum of 43,+22<.

>oth parties appealed to the %&' 1n )ugust #*,#++, petitioner moved to dismiss private respondentSsappeal because of the latterSs failure to post a

cashJsurety bond In its order of 1ctober #*, #++(,however, the %&' ordered the case dismissed on theground that, under the 8emorandum of )greementbetween the 4hilippine government and I8, thelatter was immune from suit

4etitioner moved for reconsideration, arguing amongother things, that the 8emorandum of )greementcould not be given retroactive eDect and that in anycase I8 had waived its immunity by consenting tobe sued

7owever, petitionerSs motion was denied by the %&'in its resolution dated 8arch 2, #++* 2 7ence thispetitioner presenting the following issues:

a0 9hether private respondents haveperfected their appeal and whether publicrespondent may, on appeal, entertain or

review private respondentsS claim of immunity=

b0 9hether a mere 8emorandum of )greement entered into by the 6ecretary

of @oreign )Dairs with respondentInternational atholic 8igrationommission, which is not a law, candivest the &abor )rbiter and the %ational&abor 'elations ommission of their urisdiction over the subect matter andover the persons of respondents in thepending case=

c0 9hether the 8emorandum of )greement may be given retroactive

eDect=

d0 9hether the dismissal of the based onthe claim of immunity will deprivepetitioner of his property without dueprocess of law=

e0 9hether the dismissal of the casebased on the claim of immunity will resultin the impairment of the obligationsassumed by respondent Internationalatholic 8igration ommission under itscontract of employment with petitioner=

f0 )ssuming for the sake of argument thatthe 8emorandum of )greement hasvalidly conferred immunity on privaterespondentSs whether they may beconsidered as having waived suchimmunity=



g0 Hpon the same consideration, whetherprivate respondents may be consideredestopped from claiming immunity

The basic issue in this case is whether the

8emorandum of )greement executed on Auly #., #+<<I8 immunity from suit The ourt holds it didonsequently, both the &abor )rbiter and the %&'had no urisdiction over the case

(irst 4etitionerSs contention that the 8emorandum of )greement is not an act of ongress which is neededto repeal or supersede the provision of the &aborode on the urisdiction of the %&' and of the &abor)rbiter is untenable The grant of immunity to I8 isin virtue of the onvention on the 4rivileges and

Immunities of 6pecialiFed )gencies of the Hnited%ations, adopted by the H% Beneral )ssembly on%ovember (#, #+23, and concurred in by the 4hilippine6enate on 8ay #3, #+2+ This onvention has the forceand eDect of law, considering that under theonstitution, the 4hilippines adopts the generallyaccepted principles of international law as part of thelaw of the land 3 The 8emorandum of )greement inquestion merely carries out the 4hilippinegovernmentSs obligation under the onventionIn International "at,olic 'igration "ommissionv "alleja, > this ourt explained the grant of immunityto I8 in this wise:

The grant of immunity from local urisdiction to I8 is clearlynecessitated by their internationalcharacter and respective purposes Theobective is to avoid the danger of partiality and interference by the host

country in their internal workings Theexercise of urisdiction by the !epartmentof &abor in these instances would defeatthe very purpose of immunity, which is toshield the aDairs of international

organiFations, in accordance withinternational practice, from politicalpressure or control by the host country tothe preudice of member 6tate of theorganiFation, and to ensure theunhampered performance of theirfunctions

Second 4etitioner argues that in any case I8Ssimmunity can not apply because this case was ledbelow before the signing of the 8emorandum on Auly

#., #+<< 4etitioner cites in support the statement of this ourt in the aforesaid case of International "at,olic'igration "ommission v "alleja, 5 distinguishing thatcase from an earlier case 6 also involving I8,wherein the %&', as well as the ourt, tookcogniFance of a complaint against I8 for payment of salary for the unexpired portion of a six-monthprobationary The ourt held:

"%$ot only did the facts of saidcontroversy "I8 v %&', #5+ 6') 55/#+<+0$ occur between #+<*-#+<., orbefore the grant to I8 on #. Auly #+<<of the status of a specialiFed agency withcorresponding immunities, but alsobecause I8 in that case did not invokeits immunity and, therefore, may bedeemed to have waived it, assuming thatduring that period /#+<*-#+<.0 it was



tacitly recogniFed as enoying suchimmunity

7ere, according to petitioner, his employmentand subsequent dismissal by I8 took place in

#+<., prior to the execution of the 8emorandumof )greement on Auly #., #+<< and, therefore,like in the #+<+ I8 case, the 8emorandumshould not be made to apply to him

This ourt did not really reect I8Ss invocation of immunity for causes of action accruing prior to theexecution of the 8emorandum It left open thepossibility that I8 may have been tacitly enoyingdiplomatic immunity beforehand It is important tonote that in the #+<+ case I8 did not invoke its

immunity notwithstanding the fact that the8emorandum took eDect while the case was pendingbefore the ourt 7

8oreover, in the #++ I8 case, I8Ss immunitywas in fact upheld despite the fact that at the casearose, the 8emorandum recogniFing I8Ss status asa specialiFed agency had not yet been signed In thatcase, the petition for certication election among itsrank and le employees was led on Auly #2, #+<5 andthe order directing a certication election was madewhen I8Ss request for recognition as a specialiFedagency was still pending in the !epartment of @oreign)Dairs Get this ourt held that the subsequentexecution of the 8emorandum was a bar to thegranting of the petition for certication election

The scope of immunity of the I8 contained in theonvention on the 4rivileges and Immunities of the6pecialiFed )gencies of the Hnited %ations is

instructive )rt III, U2 of the onvention provides forimmunity from every form of legal process Thus,even if private respondents had been served summonsand subpoenas prior to the execution of the8emorandum, they, as oEcers of I8, can claim

immunity under the same in order to preventenforcement of an adverse udgment, since a writ of execution is a legal process within the meaning of )rticle III, U2 9

T,ird )nother question is whether I8 can invoke itsimmunity because it only did so in its memorandumbefore the &abor )rbiter It is contended that I8waived its immunity in any event )rt III U2 of theonvention on the 4rivileges and Immunities of the6pecialiFed )gencies of the Hnited %ations requires,

however, that the waiver of the privilege must beexpress There was no such waiver of immunity in thiscase %or can I8 be estopped from claimingdiplomatic immunity since estoppel does not operateto confer urisdiction to a tribunal that has none over acause of action 10

(ourt, @inally, neither can it be said that recognitionof I8Ss immunity from suit deprives petitioner of dueprocess )s pointed out in International "at,olic"ommission v "alleja, 11 petitioner is not exactly

without remedy for whatever violation of rights it mayhave suDered for the following reason:

6ection *# of the onvention on the4rivileges and Immunities of the6pecialiFed )gencies of the Hnited%ations provides that each specialiFedagency shall make provision forappropriate modes of settlement of: /a0



disputes arising out of contracts or otherdisputes of private character to which thespecialiFed agency is a party 8oreover,pursuant to )rticle IK of the 8emorandumof )greement between I8 and the

4hilippine Bovernment, whenever there isany abuse of privilege by I8, theBovernment is free to withdraw theprivileges and immunities accorded Thus:

)rticle IK "ooperation 1it, Government Aut,orities R# The ommission shallcooperate at all times with theappropriate authorities of theBovernment to ensure the observance of 4hilippine laws, rules and regulations,

facilitate the proper administration of ustice and prevent the occurrences of any abuse of the privileges andimmunities granted is oEcials and alienemployees in )rticle III of this )greementof the ommission

( In the event that the Bovernmentdetermines that there has been an abuseof the privileges and immunities grantedunder this )greement, consultations shall

be held between the Bovernment and theommission to determine whether anysuch abuse has occurred and, if so, theBovernment shall withdraw the privilegesand immunities granted the ommissionand its oEcials

97;';@1';, the petitioner is !I68I66;! for lack of merit

61 1'!;';!

G.R. No. 75519 -:u% 15, 1990

)NIVERSI!Y O S!O. !OMAS, R. MA?IMOMARINA O.P. AND GIL$ER!O L.GAME@, petitioners,

vsNA!IONAL LA$OR RELA!IONS OMMISSION,ONORA$LE LA$OR AR$I!ER $IENVENIDO S.ERNANDE@ AND $ASILIO E. $OR*A, respondents

A%ad) Lea2o Associates $or petitioners.

Antonio . (idelino $or private respondent.



GANAYO, J'(

The herein private respondent !r >asilio ; >ora was

rst appointed as aEliate faculty in the @aculty of 8edicine and 6urgery at the Hniversity of 6to Tomas/H6T for short0 on 6eptember (+, #+35 In the secondsemester of the school year #+35-33 he was appointedinstructor with a load of twelve /#(0 hours a week 7ewas reappointed instructor for the school year #+33-3<with a load of nine /+0 hours a week in the rstsemester and two /(0 hours a week in the second 1n Aune #, #+3< he was appointed as Instructor III for theschool year #+3<-3+ 7is load for the rst semesterwas eight /<0 hours a week, and for the second

semester, seven /30 hours a week

1n 8arch #+, #+3+ !ean Bilberto BameF observedthat !r >ora should not be reappointed based on theevaluation sheet that shows his sub-standard andineEcient performance 1 %evertheless in view of thecritical shortage of staD members in the !epartmentof %eurology and 4sychiatry !r BameF recommendedthe reappointment of !r >ora, after informing thelatter of the negative feedbacks regarding his teachingand his promise to improve his performance Thus on Auly (3, #+3+ he was extended a reappointment asInstructor III in the school year #+3+-< 7e was givena load of six /50 hours a week In all theseappointments he was a part time instructor

)t the end of the academic year, it appearing that !r>ora had not improved his performance in spite of hisassurances of improvement, his reappointment wasnot recommended

In Auly, #+<( he led a complaint in the %ational &abor'elations ommission /%&' for short0 for illegaldismissal against the H6T )fter the submission of thepleadings and due proceedings the labor arbiterrendered a decision on Auly #+, #+<2, the dispositive

part of which reads as follows:

97;';@1'; this 1Ece nds in favor of the complainant The respondents /sic0university are hereby ordered to eDectthe immediate reinstatement of complainant to his former position withfull backwages, rights and benetsappertaining thereto 'espondentuniversity is likewise ordered to pay thecomplainant the sum of @IK; 7H%!';!

T71H6)%! 4;616 /4.,0 as andby way of moral damages and another #V of the gross amount due him, and asand by way of attorneySs fees

'espondents are hereby ordered to eDectthis decision immediately 2

The H6T appealed therefrom to the %&' which in duecourse rendered a decision on 6eptember *, #+<<,modifying the appealed decision as follows:

97;';@1';, premises considered, theappealed decision is hereby )@@I'8;!with a modication limiting thebackwages to three /*0 years withoutqualication or deduction, computed at455 per month, ordering respondentsto pay complainant 4#, as andfor actual or compensatory damages,



ordering respondents to pay complainant4*, as and for moral damages,and further ordering them to paycomplainant 4#, as and forexemplary damages

@inally, respondents are ordered to pay tocomplainant the sum of ten /#V0percent of the total sum due as and forattorneySs fees 3

7ence the instant petition for certiorari and prohibitionwith a prayer for the issuance of a writ of preliminaryinunction and restraining order that was led by theH6T and its oEcers wherein it is alleged that the publicrespondent %&' committed the following errors:

I

T7; 71%1')>&; %)TI1%)& &)>1'';&)TI1%6 188I66I1% 188ITT;!6;'I1H6 ';K;'6I>&; ;''1'6 1@6H>6T)%; )81H%TI%B T1 B')K;)>H6; 1@ !I6';TI1% )%!J1' &)C 1';;66 1@ AH'I6!ITI1% I% @I%!I%B T7)T >)6I&I1 ; >1'A) )LHI';! T;%H';, T7; 6)I! @I%!I%B >;I%B&;)'&G 1%T')'G T1 T7; ;KI!;%; )T7)%! )%! !;K1I! 1@ >)6I6 I% &)9

II

T7; 71%1')>&; %&' 188ITT;! )6;'I1H6 )%! ';K;'6I>&; ;''1' )%!B')K;&G )>H6;! IT6 !I6';TI1% I%71&!I%B T7)T T7; 6;'KI;6 1@ >)6I&I1

; >1'A) 7)! >;;% 1%6T'HTIK;&G T;'8I%)T;!, 7I6 )441I%T8;%T 7)KI%B8;';&G &)46;! I% )1'!)%; 9IT7IT6 T;'86 )6 );4T;! >G T7;184&)I%)%T-)44;&&;; >1'A)

III

T7; 71%1')>&; %&' 188ITT;! )6;'I1H6 )%! B')K; ;''1' I%)@@I'8I%B, )&>;IT ';!HI%B T7;)9)'! 1@ T7; 71%1')>&; &)>1')'>IT;' A 34/ 1@ &;)'&G ;;66IK;,H%AH6T, H%1%6I1%)>&; )%!671CI%B 81')& !)8)B;6 1@4*, )%! I% )9)'!I%B 81TH

4'14I1 ;;84&)'G !)8)B;6 I% T7;)81H%T 1@ 4#, I% B')K;)>H6; 1@ IT6 !I6';TI1% )81H%TI%B T1 ;;66 1@ AH'I6!ITI1% >

The petition is impressed with merit

In the questioned decision of the public respondent%&' it found that private respondent had earned tohis credit eight /<0 semesters or four /20 academicyears of professional duties with the H6T and that hehas met the requirements to become a regularemployee under the three /*0 years requirement in the8anual of 'egulations for 4rivate 6chools

The appealed decision is correct insofar as it declaresthat it is the 8anual of 'egulations for 4rivate 6chools,not the &abor ode, that determines the acquisition of regular or permanent status of faculty members in aneducational institution, but the ourt disagrees with



the observation that it is only the completion of three/*0 years of service that is required to acquire suchstatus

)ccording to 4olicy Instructions %o ## issued by the

!epartment of &abor and ;mployment, theprobationary employment of professors, instructorsand teachers shall be subect to standards establishedby the !epartment of ;ducation and ulture 6aidstandards are embodied in paragraph 3. of the 8anualof 'egulations for 4rivate 6chools, to wit:

3. (ull time teachers who have renderedthree consecutive years of satisfactoryservice shall be considered permanent/;mphasis supplied0

The legal requisites, therefore, for acquisition by ateacher of permanent employment, or security of tenure, are as follows:

#0 the teacher is a full time teacher=

(0 the teacher must have rendered three /*0consecutive years of service= and

*0 such service must have been satisfactory

%ow, the 8anual of 'egulations also states that a full-time teacher is one whose total working day isdevoted to the school, has no other regularremunerative employment and is paid on a regularmonthly basis regardless of the number of teachinghours /4ar 330= and that in college, the nominal

teaching load of a full-time instructor shall be eig,teen,ours a 1ee5 /par 3<0

It follows that a part0time member of the facultycannot acquire permanence in employment under the

8anual of 'egulations in relation to the &abor ode

7ence, the crucial question is whether or not theprivate respondent was a $ull0time or part0time member of the faculty during the three /*0 yearsthat he served in the petitioner-universitySs ollege of 8edicine 6tated otherwise, the question is /#0 whetheror not the said respondentSs total working day /was0 devoted to the school and he had no otherregular remunerative employment and was paid on aregular monthly basis regardless of the number of

teaching hours= andJor /(0 whether or not his normalteaching load was eighteen /#<0 hours a week

It cannot be said that respondentSs total working daywas devoted to the school alone It is clear from therecord that he was practising his profession as a doctorand maintaining a clinic in the hospital for this purposeduring the time that he was given a teaching load Inother words, he had another regular remunerativework aside from teaching 7is total working day wasnot, therefore, devoted to the school Indeed, hissalaries from teaching were computed by therespondent ommission itself at only an averageof P667.77 per mont,= he, therefore, had to have othersources of income, and this of course was his self-employment as a practising psychiatrist That thecompensation for teaching had to be averaged alsoshows that he was not paid on a regular monthly basis8oreover, there is absolutely no evidence that heperformed other functions for the school when not



teaching )ll things considered, it would appear thatteaching was only a secondary occupation orsideline, his professional practice as a psychiatristbeing his main vocation

The record also discloses that he never had a normalteaching load of eighteen /#<0 hours a week during thetime that he was connected with the university Theonly evidence on this equally vital issue was presentedby the petitioner through the aEdavit of !r BilbertsBameF who was the dean of the medical school duringthe time material to the proceedings at bar 7is sworndeclaration is to the eDect that as aEliate facultymember of the !epartment of %eurology and4sychiatry from 6eptember (+,#+35, privaterespondent had no teaching functions: that in fact,

when he was appointed in Septem%er) 89:6, classesfor the rst semester were already nearing their end=that as aEliate faculty he was merely an observeracquainting himself with the functions of an instructorwhile awaiting issuance of a formal appointment assuch= that in the school year #+33-3< he had ateaching load of nine +9- ,ours a 1ee5 in the rstsemester and t1o +;- ,ours a 1ee5 in the secondsemester= that in the school year #+3<-#+3+ he had aload of eig,t +<- ,ours a 1ee5 in the rst semesterandseven +:- ,ours a 1ee5 in the second semester=

that in the school year #+3+-#+< he had a load of si= +6- ,ours a 1ee5 in each semester This evidence doesnot appear to have been refuted at all by the privaterespondent, and has inexplicably been ignored bypublic respondent %o discussion of this particularpoint is found in the decisions of the &abor )rbiter orthe %&'

The private respondent, therefore, could not beregarded as a full- time teacher in any aspect 7ecould not be regarded as such because his totalworking day was not devoted to the school and he hadother regular remunerative employment 8oreover, his

average teaching load was only 5** hours a week

In view of the explicit provisions of the 8anual of 'egulations above-quoted, and the fact that privaterespondent was not a full- time teacher, he could nothave and did not become a permanent employee evenafter the completion of three /*0 years of service

7aving found that private respondent did not becomea permanent employee of petitioner H6T, itcorrespondingly follows that there was no duty on the

part of petitioner H6T to reappoint private respondentas Instructor, the temporary appointment havinglapsed 6uch appointment is a matter addressed to thediscretion of said petitioner

The ndings, therefore, of the public respondent %&'that private respondent was constructively terminatedis without lawful basis >y the same token, the orderfor reinstatement of private respondent withbackwages plus an award of actual or compensatory,moral and exemplary damages must be struck down

97;';@1';, the petition is hereby B')%T;! Thequestioned orders of public respondent %&' dated6eptember #*, #+<< and public respondent laborarbiter >ienvenido 6 7ernandeF dated Auly #+,#+<<are hereby 6;T )6I!; and another udgment is herebyrendered !I68I66I%B the complaint of privaterespondent, without pronouncement as to costs



61 1'!;';!

*AB()I R. MORENO,4etitioner,

- versus -

SAN SE$AS!IAN OLLEGE;REOLE!OS, MANILA,'espondent

G.R. No. 15273 4resent: )H6T'I)-8)'TI%;M,)cting hairperson, TI%B),W7I1-%)M)'I1,%)7H'), and';G;6, **

4romulgated: 8arch (<, (<

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - -x

! ; I 6 I 1 %

7I1-%)M)'I1, *:

)ssailed in this 4etition for 'eviewon "ertiorari"#$ under 'ule 2. of the 'ules of ourt is

the !ecision"($ of the ourt of )ppeals dated 3

%ovember (5 in )-B' 64 %o +<* The

appellate courts !ecision granted the 6pecial ivil

)ction for "ertiorari led by respondent 6an 6ebastian

ollege-'ecoletos, 8anila /66-'0, and annulled the

!ecision"*$ dated (* %ovember (2 and the

'esolution"2$ dated *# 8arch (. of the %ational

&abor 'elations ommission /%&'0 in %&'-%'-)

%o *3#3.-*

The undisputed facts of the case are as follows:

'espondent 66-' is a domestic corporation and an

educational institution duly registered under the laws

of the 4hilippines, located in 8 'ecto )venue,

Luiapo, 8anila

1n #5 Aanuary #+++, 66-' employed petitioner

Aackqui ' 8oreno /8oreno0 as a teaching fellow 1n (*

1ctober (, 8oreno was appointed as a full-time

college faculty member".$ Then, on (( 1ctober

(#, 8oreno became a member of the permanent

http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/175283.htm#_ftn1












college faculty"5$ 6he was also oDered the

chairmanship "3$ of the >usiness @inance and

)ccountancy !epartment of her college on #*

6eptember ((

6ubsequently, reports and rumors of 8orenos

unauthoriFed external teaching engagements allegedly

circulated and reached 66-' The 7uman 'esource

!epartment of the school thereafter conducted a

formal investigation on the said activities 1n (2

1ctober ((, the !epartment submitted its report,"<$ which stated that 8oreno indeed had unauthoriFed

teaching assignments at the entro ;scolar Hniversityduring the rst semester of the 6chool Gear ((-

(*, and at the ollege of the 7oly 6pirit, 8anila,

during the 6chool Gears (-(#, (#-(( and the

rst semester of 6chool Gear ((-(*

1n (3 1ctober ((, 8oreno received a

memorandum"+$ from the !ean of her college, requiring

her to explain the reports regarding her unauthoriFed

teaching engagements The said activities allegedly

violated S-/to& 2.2 oC At/- II oC SS;Rs )aculty

Manual ,"#$ which reads:

)dministrative permission is required forall full-time faculty members to teachpart-time elsewhere If ever teaching

permission is granted, the total teachingload should not exceed the maximumallowed by 7;! rules andregulations @aculty members arerequired to report all other teaching

assignments elsewhere within two /(0weeks from start of the classes everysemester

1n (< 1ctober ((, 8oreno sent a written

explanation"##$ in which she admitted her failure to

secure any written permission before she taught in

other schools 8orenoexplained that the said teaching

engagements were merely transitory in nature as the

aforesaid schools urgently needed lecturers and that

she was no longer connected with

them8oreno further stated that it was never her

intention to eopardiFe her work in 66-' and that she

merely wanted to improve her familys poor nancial

conditions

) 6pecial Brievance ommittee was then formed in

order to investigate and make recommendations

regarding 8orenos case The said committee was

composed of !ean )braham ;speo of

the ollege of &aw, as chairman, and 8essrs !indo

>unag and 'amon 8ontierro, as members















In a letter"#($ dated ## %ovember ((, the grievance

committee required 8oreno to answer the following

series of questions concerning her case, to wit:

# !id you teach in other schoolswithout rst obtaining the consent ofyour superiors in 66-'?

( !id you ever go beyond the

maximum limit for an outside load?

* !id you ever truthfully disclosecompletely to your superiors at 66-'any outside &oad?

2 !o you deny teaching in ;H?

. !o you deny teaching at 7oly6pirit?

8oreno answered the above queries in a

letter"#*$ dated #( %ovember (( 8oreno admitted

she did not formally disclose her teaching loads at the

ollege of the 7oly 6pirit and at the entro ;scolar

Hniversity for fear that the priest administrators may

no longer grant her permission, as prior similar

requests had already been declined= that the !ean of

her college was aware of her external teaching loads=

that she went beyond the maximum limit for an

outside load in the 6chool Gears ( until ((,

because she needed to support her mother and sister,

her masteral studies, and her sisters canteen business,

all of which coincided with the payment of the

emergency loan from the 66-' administrators that

paid for her mothers illness= that she did not deny

teaching part-time in the aforementioned schools= and

that she did not wish to resign because she felt she

deserved a second chance

1n the same day that 8oreno sent her letter, the

grievance committee issued its resolution, "#2$ which

unanimously found that she violated the prohibition

against a full-time faculty having an unauthoriFedexternal teaching load The maority of the grievance

committee members recommended 8orenos dismissal

from employment in accordance with the school

manual, but !ean ;speo dissented and called only for

a suspension for one semester

Thereafter, 66-' sent a letter"#.$ to 8oreno that was

signed by the ollege 4resident, informing her that

they had approved and adopted the ndings and

recommendations of the grievance committee and, in

accordance therewith, her employment was to be

terminated eDective #5 %ovember ((











8oreno thus instituted with the %&' a complaint for

illegal termination against 66-', docketed as %&'-

%' ase %o ##-#33-(, seeking reinstatement,

money claims, backwages, separation pay if

reinstatement is not viable, and attorneys fees

In the !ecision"#5$ dated * )pril (*, &abor )rbiter

Keneranda Buerrero dismissed 8orenos complaint

for lack of merit, thus:

97;';@1';, premises considered, udgment is hereby rendered dismissingthe complaint for illegal dismissal for lack

of merit 'espondent 6an 6ebastianollege-'ecoletos is hereby ordered topay complainant Aackqui ' 8oreno theamount of %I%; T71H6)%! 1%;7H%!';! @1'TG T7';; )%! 3.J#4;616 /4+,#2*3.0 representing herunpaid salaries

)ll other claims are !I68I66;! forlack of merit

The &abor )rbiter ruled that 8orenos due acceptance

of the appointment as a member of the 4ermanent

@aculty meant that she was bound to the condition

therein not to accept any outside teaching

assignments without permission 8orenos admission of

her violation was likewise said to have rendered her

liable for the penalty of dismissal as provided for in the

66-' (aculty 'anual The &abor )rbiter held that 66-

' had adequately discharged the burden of proof

imposed by law in dismissing 8oreno ;xcept for her

unpaid salary for fteen /#.0 days, which was not

controverted, the rest of 8orenos money claims were

denied for being unsubstantiated

1n appeal by 8oreno, the %&' reversed the rulings of

the &abor )rbiter in a !ecision dated (* %ovember

(2, the relevant portion of which reads:

The four /20 applications for leave ofabsence adduced in evidence by the

respondent "66-'$ are all undated Ifthe absences indicated in the saiddocuments were the only absencesincurred by the complainant "8oreno$ inher four-year tenure, it cannot be saidthat she had a poor attendance In fact,the contrary would be true 1n the otherhand, it is conceded that in the yearlyevaluation of the performance ofteachers, she consistently landed amongthe ve best teachers Thus, neither canit be said that her moonlighting activitiesadversely aDected her workperformance &ikewise, the undisputedfact that she was asked to be thechairman of >usiness @inance and)ccountancy for 6G ((-(* should beconsidered This last circumstance couldonly mean that she was very good at her ob





There are other extenuatingcircumstances that should have beentaken into consideration in determiningthe propriety of the penalty of dismissal

meted upon the complainant Thesecircumstances are the fact that it was herrst oDense in four years of unblemishedemployment, and the fact that shecandidly admitted her fault x x x 8oreover, it is settled that the existenceof some rules agreed upon between theemployer and employee on the subectof dismissal cannot preclude the 6tatefrom inquiring whether its rigid

application would work too harshly onthe employee /Gelmart Industries P,ils.Inc. vs. NL#", #35 6') (+. citedin "alte= #e>nery Employees Associationvs. NL#", (25 6') (3#0 Thus, in the instant case, it must beconcluded that the penalty of dismissalmeted upon the complainant "8oreno$was too harsh and unreasonable underthe circumstances )t most, a one-year

suspension with a warning against therepetition of the same oDense wouldhave been more in keeping with thegenerally accepted principles of law 97;';@1';, the decision appealed fromis hereby ';K;'6;! The respondent"66-'$ is hereby ordered to ';I%6T)T;the complainant "8oreno$ to her former

position, and to pay her full backwagescounted from %ovember #5, (* up tothe date of her actual reinstatement"#3$

66-' led a 8otion for 'econsideration"#<$ of the %&'!ecision, which was denied for lack of merit in a

'esolution"#+$ dated *# 8arch (.

Thus, 66-' instituted with the ourt of )ppeals a

4etition for "ertiorari under 'ule 5. of the 'ules of

ourt, with a prayer for the issuance of a temporary

restraining order andJor a writ of preliminary

inunction,

"($

docketed as )-B' 64 %o +<*,alleging grave abuse of discretion on the part of the

%&'

In a !ecision"(#$ dated 3 %ovember (5, the appellate

court granted the petition and annulled the !ecision

dated (* %ovember (2, and 'esolution dated *#

8arch (. of the %&' In reinstating the !ecision of

the &abor )rbiter dated * )pril (*, the ourt of

)ppeals ruled in this wise:

In the case at bar, there is clearly graveabuse of discretion on the part of the%&' when it reversed the !ecision ofthe &abor )rbiter Its conclusions arehighly preudicial to the interests ofherein petitioner "66-'$, considering the













glaring infractions committed by privaterespondent "8oreno$, which she evenexpressly admitted x x x x

9illful disobedience of the employerslawful orders, as a ust cause fordismissal of an employee, envisages theconcurrence of at least two /(0 requisites:the employees assailed conduct musthave been willful or intentional, thewillfulness being characteriFed by awrongful or perverse attitude= and theorder violated must have beenreasonable, lawful, made known to the

employee and must pertain to the dutieswhich he had been engaged todischarge The foregoing requisites are all present inthis case The prohibition againstunauthoriFed outside teachingengagements found in the @aculty8anual and in private respondents"8oreno$ appointment letter are deemedreasonable under the circumstances Infact, the petitioners "66-'$ policy is

actually permissive since it allows otherteaching engagements so long as itspresident approves of the same oncededly, this policy was made knownto private respondent "8oreno$ for asmentioned earlier, it is found not only inthe @aculty 8anual, but moreimportantly, it is explicitly stated in her

appointment letter >y her ownadmission, it cannot be clearer that, inspite of her knowledge thereof, privaterespondent "8oreno$ willfully disobeyedthe said prohibition 9hen she accepted

the teaching opportunities oDered to herby other schools and altogetherconcealed the same from the petitioner"66-'$, she risked beingadministratively held liabletherefor Thus, the excuses she raisedupon the petitioners "66-'$ discovery of such concealment deserve scantconsideration The policy is obviously in connection with

the private respondents "8oreno$ dutiesas a faculty member It is designed toensure that the petitioners "66-'$teaching staD is well t to functionaccordingly, not only for its benet, butchiePy, for the students who are undertheir care and instruction 4rivaterespondent "8oreno$ argues thatnotwithstanding her violations, hercommitments with petitioner "66-'$were never compromised >e that as it

may, this fact cannot absolve her 6hemay be t at the time when herinfractions were revealed, but there is noassurance that her health would notdeteriorate in time if she persists incarrying on a heavy workload x x x x



4EREORE, the instant petitionis GRAN!ED The (* %ovember(2 !ecision and the *# 8arch(. 'esolution of the %ational &abor'elations ommission /6econd !ivision0

are herebyANN)LLED %&' SE!ASIDE The %ational &abor 'elationsommission is permanently enoinedfrom executing its *# 8arch(. 'esolution The !ecision of the&abor )rbiter dated * )pril (*ishereby REINS!A!ED %&' AIRMED

)ccordingly, 8oreno now impugns before this ourt

the ourt of )ppeals !ecision dated 3 %ovember

(5 raising the following issues:

I 97;T7;' 1' %1T T7; !I68I66)& 1@4;TITI1%;' 9)6 4'14;' )%! &)9@H& II

97;T7;' 1' %1T 4;TITI1%;' I6

;%TIT&;! T1 T7; ';&I;@ 67; 6;;C6)B)I%6T ';641%!;%T

8oreno insists that her right to security of

tenure is a more signicant consideration in this case

than the strict application of a school policy 6he

laments that her dismissal from employment for failing

to secure the necessary permission is too harsh and

undeserved a penalty

The most basic of tenets in employee

termination cases is that no worker shall be dismissed

from employment without the observance of

substantive and procedural due process 6ubstantive

due process means that the ground upon which the

dismissal is based is one of the ust or authoriFed

causes enumerated in the &abor ode 4rocedural due

process, on the other hand, requires that an employee

be apprised of the charge against him, given

reasonable time to answer the same, allowed ampleopportunity to be heard and defend himself, and

assisted by a representative if the employee so

desires"(($ The employee must be furnished two

written notices: the rst notice apprises the employee

of the particular acts or omissions for which his

dismissal is sought, and the second is a subsequent

notice which informs the employee of the employerSs

decision to dismiss him"(*$

)rticle (<( of the &abor ode provides for the

ust causes for the termination of employment, to wit:

/a0 6erious misconduct or willful

disobedience by the employee ofthe lawful orders of his employer or







representative in connection withhis work=

/b0 Bross and habitual neglect by the

employee of his duties=

/c0 @raud or willful breach by the employeeof the trust reposed in him by hisemployer or duly authoriFedrepresentative=

/d0 ommission of a crime or oDense by

the employee against the person of his employer or any immediatemember of his family or his dulyauthoriFed representatives= and

/e0 1ther causes analogous to theforegoing

In termination cases, the burden of proof rests

on the employer to show that the dismissal is for ust

cause 9hen there is no showing of a clear, valid and

legal cause for the termination of employment, the law

considers the matter a case of illegal dismissal and the

burden is on the employer to prove that the

termination was for a valid or authoriFed cause"(2$

'espondent 66-' contends that 8orenos

dismissal from employment was valid because she

knowingly violated the prohibition embodied in the

aforementioned 6ection (( of )rt II of the 66-

' (aculty 'anual, in accordance with 6ection 2."(.$ of

the 8anual of 'egulations for 4rivate 6chools, and

which prohibition was likewise contained in 8orenos

employment contract"(5$ In so doing, 8oreno allegedly

committed serious misconduct and willful disobedience

against the school, and thereby submitted herself to

the corresponding penalty provided for in both

the (aculty 'anual and the employment contract,

which is termination for cause

1n the basis of the evidence on record, the ourt nds

that 8oreno has indeed committed misconduct against

respondent 66-' 7er admitted failure to obtain the

required permission from the school before she

engaged in external teaching engagements is a clear

transgression of 66-'s policy 7owever, said

misconduct falls below the required level of gravity

that would warrant dismissal as a penalty

Hnder )rt (<(/a0 of the &abor ode, willful

disobedience of the employers lawful orders as a ust

cause for termination of employment envisages the









concurrence of at least two requisites: /#0 the

employees assailed conduct must have been willful or

intentional, t- Cu&-ss :-&g /%%/t--' :

% o&gCu %&' 8-<-s- %tttu'-F and /(0 the

order violated must have been reasonable, lawful,

made known to the employee and must pertain to the

duties which he has been engaged to discharge"(3$

6imilarly, with respect to serious misconduct, the

ourt has already ruled in National La%or #elations

"ommission v. Salgarino"(<$ that:

8isconduct is dened as improper

or wrong conduct It is the transgressionof some established and denite rule ofaction, a forbidden act, a dereliction ofduty, Cu & /%%/t- %&' 8-so&gCu &t-&t and not mere error of udgment The misconduct to be seriouswithin the meaning of the act must be ofsuch a g%<- %&' %gg%<%t-'/%%/t- and not merely trivial orunimportant 6uch misconduct, howeverserious, must nevertheless be inconnection with the work of the employeeto constitute ust cause from hisseparation

In order to constitute serious

misconduct which will warrant thedismissal of an employee underparagraph /a0 of )rticle (<( of the &abor

ode, it is not suEcient that the act orconduct complained of has violated someestablished rules or policies It s-u% 8ot%&t %&' -u-' t%tt- %/t o /o&'u/t ust %<- :--&8-Co-' t o&gCu&t-&t. /;mphasis ours0

)fter examining the records of the case, the

ourt nds that 66-' miserably failed to prove

that 8orenos misconduct was induced by a perverse

and wrongful intent as required in )rt (<(/a0 of the

&abor ode 66-' merely anchored 8orenos alleged

bad faith on the fact that she had full knowledge of the

policy that was violated and that it was relatively easy

for her to secure the required permission before she

taught in other schools This posture is utterly lacking

It bears repeating that it is the employer that

has the burden of proving the lawful cause sustaining







the dismissal of the employee ;ven equipoise is not

enough= the employer must aErmatively show

rationally adequate evidence that the dismissal was

for a ustiable cause"(+$

In the present case, 66-' failed to adduce any

concrete evidence to prove that 8oreno indeed

harbored perverse or corrupt motivations in violating

the aforesaid school policy In her letter of explanation

to the grievance committee dated #( %ovember

((, 8oreno explained in detail her role as the

breadwinner and the grave nancial conditions of her

family )s previous requests for permission had already

been denied, 8oreno was thus prompted to engage in

illicit teaching activities in other schools, as she

desperately needed them to augment her

income Instead of submitting controverting evidence,

66-' simply dismissed the above statements as

nothing more than a lame excuse"*$ and are clearly an

afterthought,"*#$ considering that no evidence was

oDered to support them and that 8orenos salary was

allegedly one of the highest among the universities in

the country

In addition, even if dismissal for cause is the

prescribed penalty for the misconduct herein

committed, in accordance with the 66-' (aculty

'anual and 8orenos employment contract, the ourt

nds the same to be disproportionate to the oDense

Time and again, we have ruled that while an

employer enoys a wide latitude of discretion in the

promulgation of policies, rules and regulations on

work-related activities of the employees, those

directives, however, must always be fair and

reasonable, and the corresponding penalties, when

prescribed, must be commensurate to the oDense

involved and to the degree of the infraction "*($











6pecial circumstances were present in the case

at bar which should have been properly taken into

account in the imposition of the appropriate

penalty 8oreno, in this case, had readily admitted her

misconduct, which was undisputedly the rst she has

ever committed against the school 7er teaching

abilities and administrative skills remained apparently

unaDected by her external teaching engagements, as

she was found by the grievance committee to be one

of the better professors in the )ccounting

!epartment"**$ and she was even oDered the

hairmanship of her college"*2$ )lso, the fact

that 8oreno merely wanted to alleviate her familys

poor nancial conditions is a ustication that 66-'

failed to refute 66-' likewise failed to prove any

resulting material damage or preudice on its part as a

consequence of 8orenos misconduct The claim by

66-' that the imposition of a lesser penalty would set

a bad precedent"*.$ for the other faculty members who

comply with the school policies is too speculative for

this ourt to even consider

@inally, the ourt notes that in 8orenos contract

of employment,"*5$ one of the provisions therein

categorically stated that should a violation of any of

the terms and conditions thereof be committed, the

penalty that will be imposed would either

be sus8-&so& o 'sss% from employment Thus,

contrary to its position from the beginning, 66-'

clearly had the discretion to impose a lighter penalty

of suspension and was not at all compelled to

dismiss 8oreno under the circumstances, ust because

the (aculty 'anual said so

9ith regard to the observance of procedural due

process, neither of the parties has put the same into

issue Indeed, based on the evidence on











record, 8oreno was served with the required twin

notices and was aDorded the opportunity to be

heard The rst notice was embodied in the

memorandum"*3$ dated (3 1ctober (( sent by her

ollege !ean, which required her to explain her

unauthoriFed teaching assignments The letter"*<$ by

66-' that informed 8oreno that her services were

being terminated eDective #5 %ovember

(( constituted the second required

notice 8oreno was also given the opportunity to

explain her side when the special grievance committee

asked her a series of questions pertaining to their

investigation in a letter"*+$ dated ## %ovember

(( and to which she replied likewise through a

letter"2$ dated #( %ovember ((

In light of the foregoing, the ourt holds that the

dismissal of petitioner 8oreno failed to comply with

the substantive aspect of due process !espite 66-'s

observance of procedural due process, it nonetheless

failed to discharge its burden of proving the legality

of 8orenos termination from employment Thus, the

imposed penalty of dismissal is hereby declared as

invalid

In so ruling, this ourt does not depreciate the

misconduct committed by 8oreno Indeed, 66-' has

adequate reasons to impose sanctions on

her 7owever, this should not be dismissal from

employment >ecause of the serious implications of

this penalty, our &abor ode decrees that an employee

cannot be dismissed, except for the most serious

causes"2#$

onsidering the presence of extenuating

circumstances in the instant case, the ourt deems it

appropriate to impose the penalty of suspension of one

/#0 year on 8oreno, to be counted from #5 %ovember

((, the eDective date of her illegal

dismissal 7owever, given the period of time in













which 8oreno was actually prevented from working in

the respondent school, the said suspension should

already be deemed served

@urthermore, the ourt holds that 8oreno should bereinstated to her former position, without loss of

seniority rights and other privileges, but without

payment of backwages

)s a general rule, the normal consequences of a

nding that an employee has been illegally dismissed

are, rstly, that the employee becomes entitled to

reinstatement without loss of seniority rights= andsecondly, the payment of backwages corresponding to

the period from his illegal dismissal up to his actual

reinstatement The two forms of relief are, however,

distinct and separate from each other Though the

grant of reinstatement commonly carries with it an

award of backwages, the appropriateness or non-

availability of one does not carry with it the

inappropriateness or non-availability of the other"2($

In accordance with &ura%uilt #ecapping Plant "o. v.

National La%or #elations "ommission) *+- the ourt

may not only mitigate, but also absolve entirely, the

liability of the employer to pay backwages where good

faith is evident &ikewise, backwages may be withheld

from a dismissed employee where exceptional

circumstances are availing"22$

In the present case, the good faith of 66-' is

apparent The termination of 8oreno from her

employment cannot be said to have been carried out

in a malevolent, arbitrary or oppressive

manner Indeed, the only mistake that the respondent

school has committed was to strictly apply the

provisions of its (aculty 'anual and its contract

with 8orenowithout regard for the aforementioned

special circumstances that were attendant in this

case ;ven then, 8orenos right to procedural due

process was fully respected, as she was given the

required twin notices and an ample opportunity to be

heard This fact was not even disputedby 8oreno herself

9ith respect to 8orenos claim for moral and

exemplary damages, the same were never

satisfactorily pleaded and substantiated"2.$ Thus, they











are hereby denied %either is8oreno entitled to the

award of the monetary claims"25$ in her petition, as no

basis and proof for the grant thereof were ever

adduced

The ourt cannot likewise award attorneys fees

to 8oreno in view of the above-mentioned nding of

good faith on the part of 66-'"23$ It is a well-settled

principle that even if a claimant is compelled to litigate

with third persons or to incur expenses to protect the

claimants rights, attorneys fees may still not be

awarded where no suEcient showing of bad faith could

be rePected in a partys persistence in a case other

than an erroneous conviction of the righteousness of

his cause"2<$

4EREORE, the 4etition for 'eview

is GRAN!ED The !ecision of the ourt of )ppeals in

)-B' 64 %o +<* dated 3 %ovember (5 is

hereby REVERSED'espondent 6an 6ebastian

ollege-'ecoletos, 8anila, is hereby ordered to

reinstate 4etitioner Aackqui ' 8oreno without loss of

seniority rights and other privileges %o

pronouncement as to costSO ORDERED.









RIARDO G. PALOMA, G.R. No. 1>7>154etitioner,- versus - 4resent:LHI6H8>I%B, *., hairperson,PILIPPINE AIRLINES, IN. )'4I1 81')&;6,%&' !E NA!IONAL LA$OR TI%B),

RELA!IONS OMMISSION, K;&)61, A', and

'espondents >'I1%, **.x-------------------------------------------x PILIPPINE AIRLINES, IN., G.R. No. 1566>4etitioner,

- versus - 4romulgated:RIARDO G. PALOMA,'espondent Auly #2, (<

x---------------------------------------------------------------------------------------- x D E I S I O N VELASO, *R., J'+

!- %s-

>efore us are these two consolidated petitions

for review under 'ule 2. separately interposed by

'icardo B 4aloma and 4hilippine )irlines, Inc /4)&0 to

nullify and set aside the )mended!ecision"#$ dated 8ay *#, (# of the ourt of )ppeals

/)0 in )-B' 64 %o .52(+, as eDectively reiterated

in its 'esolution"($ of Aanuary #2, (*

!- %/ts

4aloma worked with 4)& from 6eptember #+.3,

rising from the ranks to retire, after *. years of

continuous service, as senior vice president for

nance In 8arch #++(, or some nine /+0 months

before 4aloma retired on %ovember *, #++(, 4)& was

privatiFed

>y way of post-employment benets, 4)& paid

4aloma the total amount of 4h4 .,#5*,*(.52 which

represented his separationJretirement gratuity and

accrued vacation leave pay @or the benets thus

received, 4aloma signed a document

denominated #elease and 3uitclaim"*$ but inscribed

the following reservation therein: 9ithout preudice to

http://sc.judiciary.gov.ph/jurisprudence/2008/july2008/148415.htm#_ftn1








my claim for further leave benets embodied in my

aide memoire transmitted to 8r 'oberto )nonas

covered by my (3 %ov #++( letter x x x

The leave benets 4aloma claimed being

entitled to refer to his 2.-day accrued sick leave

credits which 4)& allegedly only paid the equivalent of

#< days 7e anchored his entitlement on ;xecutive

1rder %o /;10 #33"2$ dated Aanuary +, #+<5, and his

having accumulated a certain number of days of sick

leave credits, as acknowledged in a letter of )lvia '

&eao, then an administrative assistant in 4)& &eaos

letter dated %ovember #(, #++( pertinently reads:

)t your request, we are pleased to

conrm herewith the balance of your sickleave credits as they appear in ourrecords: (* days

)ccording to our existing policy, anemployee is entitled to accumulate sickleave with pay only up to a maximum of(* days

7ad there been no ceiling as

mandated by ompany policy, your sickleave credits would have totaled 2. daysto date".$

)nswering 4alomas written demands for

conversion to cash of his accrued sick leave credits,

4)& asserted having paid all of 4alomas commutable

sick leave credits due him pursuant to company policy

made applicable to 4)& oEcers starting #++

The company leave policy adverted to grants

4)&s regular ground personnel a graduated sick leave

benets, those having rendered at least (. years of

service being entitled to ( days of sick leave for

every year of service )n employee, under the policy,

may accumulate sick leaves with pay up to 230

'%s 6ubect to dened qualications, sick leave

credits in excess of (* days shall be commutable to

cash at the employees option and shall be paid in lump

sum on or before M% 31st of the following year they

were earned"5$ 4er 4)&s records, 4aloma appears to

have, for the period from #++ to #++(, commuted .<

days of his sick leave credits, broken down as follows:

( days each in #++ and #++# and #< days in #++(









6ubsequently, 4aloma led before the

)rbitration >ranch of the %ational &abor 'elations

ommission /%&'0 a omplaint"3$ for "ommutation o$

Accrued Sic5 Leaves Totaling ?9; days. In thecomplaint, docketed as %&'-%'-ase %o -<-

.3+(-+2, 4aloma alleged having accrued sick leave

credits of >50 '%s commutable upon his retirement

pursuant to ;1 #33 which allows retiring government

employees to commute, without limit, all his accrued

vacation and sick leave credits )nd of the 2.-day

credit, 4aloma added, he had commuted only .< days,

leaving him a :%%&/- oC 392 '%s of accrued sick

leave credits for commutation

Ru&g oC t- L%:o A:t-

Issues having been oined with the ling by the

parties of their respective position papers, "<$ the labor

arbiter rendered on Aune *, #++. a

!ecision"+$ dispositively reading:

97;';@1';, premises considered,respondent 47I&I44I%; )I'&I%;"6$, I% ishereby ordered to pay within ten /#0days from receipt hereof hereincomplainant 'icardo B 4aloma, the sum

of 6ix 7undred 6eventy @ive Thousand4esos /453.,0 representing his one7undred sixty two days "#5($accumulated sick leave credits, plus ten/#V0 percent attorneys fees of453,., or a total sum of432(,.

61 1'!;';!

The labor arbiter held that 4)& is not covered by

the civil service system and, accordingly, its

employees, like 4aloma, cannot avail themselves of

the benecent provision of ;1 #33 This executive

issuance, per the labor arbiters decision, applies only

to government oEcers and employees covered by the

civil service, exclusive of the members of the udiciary

whose leave and retirement system is covered by a

special law

7owever, the labor arbiter ruled that 4aloma is

entitled to a commutation of his alternative claim for

(( accrued sick leave credits less 2 days for #++









and #++# Thus, the grant of commutation for #5(

accrued leave credits

>oth parties appealed"#$

the decision of thelabor arbiter to the %&'

Ru&g oC t- NLR & NLR NR A No. 009652;95

"NLR;NR;%s- No. 00;07;0592;9>#

1n %ovember (5, #++3, the @irst !ivision of the %&'

rendered a !ecision aErming that of the labor arbiter,

thus:

97;';@1';, as recommended,

both appeals are !I68I66;! The decisionof &abor )rbiter @elipe T Barduque II

dated Aune *, #++. is )@@I'8;! 61 1'!;';!"##$

>oth parties moved for reconsideration In its

'esolution of %ovember #, #+++, the %&', nding

4aloma to have, upon his retirement, commutable

accumulated sick leave credits of (* days, modied

its earlier decision, disposing as follows:

In view of all the foregoing, our

decision dated %ovember (5, #++3, bemodied by increasing the sick leavebenets of complainant to be commutedto cash from #5( days to (* days

61 1'!;';!"#($

@rom the above modicatory resolution of the

%&', 4)& went to the ) on a petition for certiorari

under 'ule 5., the recourse docketed as )-B' 64

%o .52(+

Ru&g oC t- A & ts A8 27, 2000 D-/so&

>y a !ecision dated )pril (<, (, the ) found

for 4)&, thus:

97;';@1';, the petition is

granted 4ublic respondents %ovember#, #+++ 'esolution is set aside )nd thecomplaint of 'icardo 4aloma is hereby!I68I66;! 9ithout costs

61 1'!;';!"#*$











In time, 4aloma sought reconsideration"#2$

!- M% 31, 2001 A-&'-' D-/so&

1n 8ay *#, (#, the ) issued the assailed

)mended !ecision reversing its )pril (<,

( !ecision The $allo of the )mended !ecision

reads:

97;';@1';, premises considered,our Audgment, dated (< )pril ( ishereby vacated and, set aside, andanother one entered reinstating the'esolution, dated # %ovember #+++,issued by the public respondent %ational&abor 'elations ommission in %&' %'ase %o -<-.3+(-+2 "%&' %' )%o +5.(-+.$, entitled 'icardo B4aloma v 4hilippine )irlines,Incorporated, with the only modication

that the total sums granted by &abor)rbiter @elipe T Barduque II/432(,., inclusive of the ten percent/#V0 attorneys fees0, as aErmed bypublic respondent %ational &abor'elations ommission, @irst !ivision, insaid %&' ase %o -<-.3+(-+2, shallearn legal interest from the date of theinstitution of the complaint until fully

paidJdischarged/)rt ((#(, %ew ivilode0

61 1'!;';!"#.$

Austifying its amendatory action, the ) stated

that ;1 #33 applies to 4)& and necessarily to 4aloma

on the following rationale: 6ection (/#0 of )rticle I/>0

of the #+<3 onstitution applies prospectively and,

thus, the expressed limitation therein on the

applicability of the civil service law only to

government-owned and controlled corporations/B1s0 with original charters does not preclude the

applicability of ;1 #33 to 4)& and its then employees

This conclusion, the ) added, becomes all the more

pressing considering that 4)&, at the time of the

issuance of ;1 #33, was still a B1 and that 4aloma

had already (+ years of service at that time The

appellate court also stated that since 4)& had then noexisting retirement program, the provisions of ;1 #33

shall serve as a retirement program for 4aloma who

had meanwhile acquired vested rights under the ;1

pursuant to )rts #"#5$ and (<3"#3$ of the &abor ode











6ignicantly, despite aErmatively positing the

applicability of ;1 #33, the )mended !ecision still

deferred to 4)&s existing policy on the (*-day limit

for accrued sick leave with pay that may be credited toits employees Incongruously, while the ) reinstated

the %ovember #, #+++ 'esolution of the %&', it

decreed the implementation of the labor arbiters

!ecision dated Aune *, #++. )s may be recalled, the

%&', in its %ovember #, #+++ 'esolution, allowed a

(*-day sick leave commutation, up from the #5( days

granted under the Aune *, #++. !ecision of the laborarbiter

4aloma immediately appealed the )s )mended

!ecision via a 4etition for 'eview on ertiorari under

'ule 2., docketed as G.R. No. 1>7>15 1n the other

hand, 4)& rst sought reconsideration of the )mended

!ecision, coming to us after the ), per its Aanuary #2,

(* 'esolution, denied the desired reconsideration In

net eDect then, 4)&s 4etition for 'eview on ertiorari,

docketed as G.R. No. 1566>, assails both the

)mended !ecision and 'esolution of the )

!- Issu-s

In G.R. No. 1>7>15, 4aloma raises the sole

issue of: 97;T7;' 1' %1T T7; ")$, I% 71&!I%B T7)T ;1 %1 #33 I6 )44&I)>&; T14;TITI1%;' )%! G;T )44&GI%B 184)%G41&IG >G )9)'!I%B T7; )67;LHIK)&;%T 1@ 1%&G #5( !)G6 6IC&;)K; ';!IT6 I%6T;)! 1@ T7; 2.!)G6 6IC &;)K; ';!IT6 4;TITI1%;' I6;%TIT&;! T1 H%!;' ;1 %1 #33,!;I!;! ) LH;6TI1% 1@ 6H>6T)%; I%) 8)%%;' 1%T')'G T1 &)9 )%!)44&I)>&; AH'I64'H!;%;"#<$

In G.R. No. 1566>, 4)& raises the following issues

for our consideration: # 8ay an employee of a non-

government corporation "invoke ;1$

#33 which the then 4resident@erdinand ; 8arcos issued on Aanuary+, #+<5, solely for the benet ofgovernment oEcers and employeescovered by the civil service?

( an a udicial body modify or alter a

company policy by ordering thecommutation of sick leave credits





which, under company policy is non-commutable?"#+$

The issues submitted boil down to the question

of whether or not ;1 #33, before 4)&s privatiFation,

applies to its employees, and corollarily, whether or

not 4aloma is entitled to a commutation of his accrued

sick leave credits 6ubsumed to the main issue

because ;1 #33 applies only to government

employees subect to civil service law is the question

of whether or not 4)&which, as early as #+5 until its

privatiFation, had been considered as a government-

controlled corporationis covered by and subect to the

limitations peculiar under the civil service system

There can be no quibbling, as a preliminary

consideration, about 4)& having been incorporated as

a private corporation whose controlling stocks were

later acquired by the B6I6, which is wholly owned by

the government Through the years before B6I6

divested itself of its controlling interests over the

airline, 4)& was considered a government-controlled

corporation, as we said as much in P,il. Air Lines

Employees Assn. v. P,il. Air Lines) Inc,"($ a case

commenced in )ugust #+.< and nally resolved by the

ourt in #+52 The late >las 1ple, former &abor

6ecretary and a member of the #+<5 onstitutionalommission, described 4)& and other like entities spun

oD from the B6I6 as second generation corporations

functioning as private subsidiaries"(#$ >efore the

coming into force of the #+3* onstitution, a

subsidiary of a wholly government-owned corporation

or a government corporation with original charter was

covered by the &abor ode @ollowing the raticationof the #+3* onstitution, these subsidiaries

theoretically came within the pale of the civil service

on the strength of this provision: "T$he civil service

embraces every branch, agency, subdivision and

instrumentality of the Bovernment, including every

"B1$ x x x"(($ Then came the #+<3 onstitution

which contextually delimited the coverage of the civil

service only to a B1 with original charter "(*$

!- outs Ru&g













onsidering the applicable law and

urisprudence in the light of the undisputed factual

milieu of the instant case, the setting aside of the

assailed amended decision and resolution of the ) isindicated

o- Issu-+ A88/%:t oC EO 10

Insofar as relevant, ;1 #33 dated Aanuary +,

#+<5, entitled #evising t,e "omputation o$ "redita%le

Vacation and Sic5 Leaves o$ Government /@cers andEmployees, provides:

97;';)6, under existing law and civilservice regulations, the number of days of vacation and sick leaves creditable to agovernment oEcer or employee is limitedto * days= 97;';)6, by special law, members of

the udiciary are not subect to suchrestriction= 97;';)6, it is the continuing policy ofthe government to institute to the extentpossible a uniform and equitable systemof compensation and benets and toenhance the morale and performance inthe civil service

x x x x %19, T7;';@1';, I, @;'!I%)%! ;8)'16, 4resident of the 4hilippines, byvirtue of the powers vested in me by theonstitution, do hereby order and directthe following: 6ection # )ny oEcer "or$ employee ofthe government who retires or voluntaryresigns or is separated from the servicethrough no fault of his own and whoseleave benets are not covered by speciallaw, shall be entitled to the commutationof all the accumulated vacation andJor

sick leaves to his credit, exclusive of6aturdays, 6undays, andholidays, tout t%to& %s to t-&u:- oC '%s oC <%/%to& %&' s/H-%<-s t%t - %%//uu%t- /;mphasis supplied0

4aloma maintains that he comes within the

coverage of ;1 #33, the same having been issued in

#+<5, before he severed oEcial relations with 4)&, and

at a time when the applicable constitutional provision

on the coverage of the civil service made no

distinction between B1s with original charters and

those without, like 4)& which was incorporated under

the orporation ode Implicit in 4alomas contention is

the submission that he earned the bulk of his sick



leave credits under the aegis of the #+3* onstitution

when 4)&, being then a government-controlled

corporation, was under civil service coverage

The contention is without merit

PAL &-<- /-%s-' to :- o8-%t-' %s % 8<%t-/o8o%to&, %&' %s &ot su:-/t-' to t- <S-</- L%

The ourt can allow that 4)&, during the period

material, was a government-controlled corporation in

the sense that the B6I6 owned a controlling interest

over its stocks1ne stubborn fact, however,

remains: Through the years, 4)& functioned as a

private corporation and managed as such for prot

Their personnel were never considered government

employees It may perhaps not be amiss for the ourt

to take udicial notice of the fact that the civil service

law and rules and regulations have not actually been

made to apply to 4)& and its employees 1f governing

application to them was the &abor ode onsider: /a0

;ven during the eDectivity of the #+3* onstitution but

prior to the promulgation on Aanuary #3, #+<. of the

decision in %o &-52*#* entitled National ousing

"orporation v. *uco,"(2$ the ourt no less recogniFed the

applicability of the &abor ode to, and the authority of

the %&' to exercise urisdiction over, disputesinvolving discipline, personnel movements, and

dismissal in B1s, among them 4)&="(.$ /b0 ompany

policy and collective bargaining agreements />)s0,

instead of the civil service law and rules, govern the

terms and conditions of employment in 4)& In fact,

1ple rhetorically asked how 4)& can be covered by the

civil service law when, at one time, there were three/*0 >)s in 4)&, one for the ground crew, one for the

Pight attendants, and one for the pilots="(5$ and /c0

9hen public sector unionism was ust an abstract

concept, labor unions in 4)& with the right to engage

in strike and other concerted activities were already

active"(3$

%ot to be overlooked of course is the #+52 case

of P,il. Air Lines Employees Assn, wherein the ourt

stated that the ivil 6ervice &aw has not been actually

applied to 4)&"(<$













Biven the foregoing considerations, 4aloma

cannot plausibly be accorded the benets of ;1 #33

which, to stress, was issued to narrow the gap

between the leave privileges between the members ofthe udiciary, on one hand, and other government

oEcers and employees in the /< s-</-, on the

other That 4)& and 4aloma may have, at a time, come

within the embrace of the civil service by virtue of the

#+3* onstitution is of little moment at this

uncture )s held in National Service "orporation v.

National La%or #elations "ommission +NASE"/-,"(+$

theissue of whether or not a given B1 falls within the

ambit of the civil service subect, vis--vis disputes

respecting terms and conditions of employment, to the

urisdiction of the ivil 6ervice ommission or the

%&', as the case may be, resolves itself into the

question of which between the #+3* onstitution,

which does not distinguish between a B1 with or

without an original charter, and the #+<3 onstitution,

which does, is in place To borrow from the

#+<<NASE"/ ruling, it is the #+<3 onstitution, which

delimits the coverage of the civil service, that should

govern this case because it is the onstitution in place

at the time the case was decided, even if, incidentally,

the cause of action accrued during the eDectivity of

the #+3* onstitution This has been the consistent

holding of the ourt in subsequent cases involvingB1s without original charters"*$

It cannot be overemphasiFed that when 4aloma

led his complaint for commutation of sick leave

credits, private interests already controlled, if not

owned, 4)& >e this as it may, 4aloma, when he led

said complaint, cannot even assert being covered bythe civil service and, hence, entitled to the benets

attached to civil service employment, such as the right

under ;1 #33 to accumulate and commute leave

credits without limit In all, then, 4aloma, while with

4)&, was never a government employee covered by

the civil service law )s such, he did not acquire any

vested rights on the retirement benets accorded by

;1 #33

P%o% &ot -&tt-' to t- :-&-Jts g%&t-' &EO 10F -Kst&g /o8%& 8o/ o& t- %tt-%88-s







9hat governs 4alomas entitlement to sick leave

benets and the computation and commutation of

creditable benets is not ;1 #33, as the labor arbiter

and originally the %&' correctly held, but 4)&scompany policy on the matter which, as found below,

took eDect in #++ The text of the policy is

reproduced in the )s )pril (<, ( !ecision and sets

out the following pertinent rules:

41&IG

'egular employees shall be entitledto a yearly period of sick leave with pay,the exact number of days to bedetermined on the basis of the employeescategory and length of service in thecompany

'H&;6 ) @or ground personnel

( 6ick leave shall be granted onlyupon certication by a company physicianthat an employee is incapable ofdischarging his duties due to illness orinury x x x

x x x x

* 6ick leave entitlement accrues fromthe date of an employees regularemployment x x x

In case of direct conversion from

temporaryJdailyJproectJcontract toregular status, regular employment shallbe deemed to have begun on the date ofthe employees conversion as a regularemployee

x x x x 2 A& -8o-- % %//uu%t-

s/H -%<- t 8% u8 to !ou&'-' !t "230# '%s=

)n employee who has accumulatedseventy-ve /3.0 days sick leave credit atthe end of each year may, at his option,commute seventy-ve percent /3.V0 ofhis current sick leave entitlement to cashand the other twenty-ve percent /(.V0to be added to his accrued sick leavecredits up to two hundred thirty /(*0calendar days

The seventy-ve percent /3.V0commutable to cash as above provided,shall be paid up in lump sum on or before8ay *#st of the following year

S/H -%<- /-'ts & -K/-ss oC to

u&'-' tt "230# '%s s% :-/out%:- to /%s %t t--8o--s o8to&, %&' s% :- 8%'



& u8 su o& o :-Co- M% 31st oCt- Coo&g -% t %s -%&-'"*#$ /;mphasis ours0

)s may be gathered from the records, accrued

sick leave credits in excess of (* days were not, if

earned before #++ when the above policy took eDect,

commutable to cash= they were simply forfeited Those

earned after #++, but still subect to the (*-day

threshold rule, were commutable to cash to the extent

of 3.V of the employees current entitlement, and

payable on or before 8ay *#st of the following year,

necessarily implying that the privilege to commute is

time-bound

It appears that 4aloma had, as of #++, more

than (* days of accrued sick leave credits @ollowing

company policy, 4aloma was deemed to have forfeited

the monetary value of his leave credits in excess of the

(*-day ceiling %ow, then, it is undisputed that he

earned additional accrued sick leave credits of ( days

in #++ and #++# and #< days in #++(, which he duly

commuted pursuant to company policy and received

with the corresponding cash value Therefore, 4)& is

correct in contending that 4aloma had received

whatever was due on the commutation of his accrued

sick leave credits in excess of the (* days limit,

specically the .< days commutation for #++, #++#,and #++(

No /out%to& oC 230 '%s %//u-' s/H -%<-

/-'ts

The query that comes next is how the (* days

accrued sick leave credits 4aloma undoubtedly hadwhen he retired are to be treated Is this otherwise

earned credits commutable to cash? These should be

answered in the negative

The labor arbiter granted #5( days

commutation, while the %&' allowed the

commutation of the maximum (* days The ), while

seemingly aErming the %&'s grant of (* days

commutation, actually decreed a #5(-day

commutation 9e cannot sustain any of the

dispositions thus reached for lack of legal basis, for

4)&s company policy upon which either disposition was





predicated did not provide for a commutation of the

rst (* days accrued sick leave credits employees

may have upon their retirement 7ence, the %&' and

the ), by their act of allowing commutation to cash,erred as they virtually read in the policy something not

written or intended therein Indeed, no law provides for

commutation of unused or accrued sick leave credits in

the private sector ommutation is allowed by way of

voluntary endowment by an employer through a

company policy or by a >) %one of such medium

presently obtains and it would be incongruous if theourt lls up the vacuum

onfronted with a similar situation as depicted

above, the ourt, in altaBar v. San 'iguel re1ery)

Inc, declared as follows:

In connection with the question of

whether or not appellee is entitled to thecash value of six months accumulatedsick leave, it appears that while under thelast paragraph of )rticle . of appellants'ules and 'egulations of the 7ealth,9elfare and 'etirement 4lan /;xhibit *0,unused sick leave may be accumulatedup to a maximum of six months, the

same is not commutable or payable incash upon the employees option

In our view, the only meaning and

import of said rule and regulation is that if an employee does not choose to enoy hisyearly sick leave of thirty days, he mayaccumulate such sick leave up to amaximum of six months and enoy this sixmonths sick leave at the end of the sixthyear but may not commute it to cash "*($

In ne, absent any provision in the applicable

company policy authoriFing the commutation of the

(* days accrued sick leave credits existing upon

retirement, 4aloma may not, as a matter of

enforceable right, insist on the commutation of his sick

leave credits to cash

)s 4)&s senior vice-president for nance upon

his retirement, 4aloma knew or at least ought to have

known the company policy on accrued sick leave

credits and how it was being implemented 7ad he

acted on that knowledge in utmost good faith, these

proceedings would have not come to pass





4EREORE, the petition under G.R. No.

1>7>15 is hereby DISMISSED for lack of merit, while

the petition under G.R. No. 1566> is hereby GIVEN

D)E O)RSE The )mended !ecision dated 8ay *#,(# of the ) in )-B' 64 %o .52(+ and its

'esolution of Aanuary #2, (* are

hereby ANN)LLED and SE! ASIDE, and the )

!ecision dated )pril (<, ( is

accordingly REINS!A!ED

osts against 'icardo B 4alomaSO ORDERED.

GOVERNMEN! SERVIEINS)RANE SYS!EM,4etitioner,

- versus -

*EAN E. RAOE!,

'espondent

G.R. No. 15037

4resent:

)'4I1, *.) ",airperson,

&;1%)'!1-!; )6T'1,

>'I1%,

!;& )6TI&&1, and

)>)!, **.

4romulgated:

!ecember (*, (+

K ---------------------------------------------------------------------------------------- KD E I S I O N

$RION, J.:



In this 4etition for 'eview on "ertiorari)

"#$ petitioner Bovernment 6ervice Insurance 6ystem

/GSIS0 seeks to set aside the ourt of )ppeals /"A0

!ecision"($

dated@ebruary *, (* in )-B' 64 %o3(<(, which overturned and set aside the Auly (2,

(( decision"*$ of the ;mployees ompensation

ommission /E""0 in ; ase %o B8-#*3+-*(,

and granted respondent Aean 'aoets /respondent 0

claim for income benets arising from her husbands

death

$ABGRO)ND A!S

The respondents husband, @rancisco 8 'aoet

/(rancisco0, entered government service on Auly #5,

#+32 as an ;ngineer Trainee at the %ational Irrigation

)dministration /NIA01n Auly ., #+3<, he was appointedas Aunior ivil ;ngineer, and on )pril ((, #+<#, he rose

to the rank of Irrigation ;ngineer > 1n )ugust #, #++<,

he was promoted to the position of ;ngineer ) the

position he held until his death on 8ay ., (# )s

;ngineer ), @rancisco supervised the implementation

of construction activities of &ateral ; and ;-#7e was

also tasked to review and check the structural plan

and the facilities"2$

In (, @rancisco was diagnosed

with ypertension) Severe) Stage III) "oronary Artery

&isease) and he was conned at the 'egion I 8edical

enter from Auly #5 to Auly (., (".$ )s the B6I6

considered this a work-related condition, @rancisco was

awarded * days Temporary Total !isability benets,

plus reimbursement of medical expenses incurred

during treatment

1n 8ay ., (#, @rancisco was rushed to the !r

8arcelo 8 han 8emorial 7ospital because he was

vomiting blood"5$ 7e was pronounced dead on arrival

at the hospital 7is death certicate listed the causes

of his death as follows:

)H6;6 1@ !;)T7

http://sc.judiciary.gov.ph/jurisprudence/2009/december2009/157038.htm#_ftn1














Immediate cause: ardiac )rrest

)ntecedent cause: )cute 8assive7emorrhage

Hnderlying cause: TJ >leeding 4epticHlcer !isease"3$

The respondent, as widow, led with the B6I6 on

8ay (2, (# a claim for income benets accruing

from the death of her husband, pursuant to

4residential !ecree %o 5(5 /P.&. 6;60, as

amended 1n )ugust *#, (#, the B6I6 denied the

claim on the ground that the respondent did not

submit any supporting documents to show that

@ranciscos death was due to peptic ulcer

1n appeal, the ; aErmed the ndings of the

B6I6 in its decision of Auly (2, (( )ccording to the

;, it could not determine if @ranciscos death was

compensable due to the absence of documents

supporting the respondents claim 6ince @rancisco had

no prior history of consultation relating to peptic ulcer

and no autopsy was performed to ascertain the cause

of his death, the ; could not conclude that leedingPeptic 4lcer &isease was the reason for his demise

The respondent elevated the case to the )

through a 4etition for 'eview 6he cited the following

supporting grounds:

# ;mployees ompensationommission failed to consider thatpeptic ulcer is an on and oD diseasewhich does not need connement in ahospital or clinic or submission to a!octor of 8edicine because it can becured by self-medication

( The ;mployees ompensationommission failed to consider alsothat there were medical treatment of@rancisco 'aoet of occupational andcompensable diseases other thanpeptic ulcer as shown by the medical





ndings of certicates, erox copies of which are attached to this petition

The ) reversed"<$ the ; decision The

appellate court held that while the )mended 'ules on

;mployees ompensation does not list peptic ulcer as

an occupational disease, @ranciscos death should be

compensable since its immediate cause was cardiac

arrest Thus, the ) ordered the B6I6 to pay the

respondents claim for death benets under 4! 5(5,

as amended

The B6I6, this time, appealed through the

present petition, raising the following issues:

I 9hether or not the ) was correct

in reversing the decision of the ;

and the B6I6 denying the respondents

claim for income benet under 4!

5(5, as amended, for the death of her

husband, @rancisco

II 9hether or not the ailment Acute

'assive emorr,age tCc leeding

Peptic 4lcer &isease) which caused the

death of the late @rancisco, is work-

connected or whether there was any

proof to show that the risk of

contracting the same was increased

by factors attendant to his

employment

The B6I6 reasons out that since the cause of

@ranciscos death was peptic ulcer, a disease not

included in the occupational diseases listed in )nnex )

of the )mended 'ules on ;mployees ompensation,

proof must be shown that the risk of contracting thedisease was increased by his working conditions The

respondent failed to present any such evidence to

support her claim apart from her bare allegations In

fact, @ranciscos medical records disclose that he did

not consult his doctors regarding peptic ulcer 6ince no





autopsy was performed to ascertain the cause of

death, no assurance exists that leeding Peptic

4lcer was indeed the cause of his death

The B6I6 further argues that @ranciscos other

ailments, i.e., his hypertension and coronary artery

disease, had already been awarded the maximum

benets commensurate to the degree of his disability

when he was granted * days Temporary Total

!isability benets, plus reimbursement of medical

expenses incurred in the treatment of these

illnesses Thus, no death benet for the same diseases

can be claimed

The B6I6 also points out that the employees

compensation trust fund is presently empty, and

claims on this fund are being paid by the B6I6 from

advances coming from its other funds )ccordingly, theB6I6 argues that the trust fund would suDer if benets

are paid to claimants who are not entitled under the

law

In contrast, the respondent claims that the

issues the B6I6 raised are essentially questions of fact

which the ourt is now barred from resolving in a

petition for review oncertiorari Thus, she posits that

the petition should be denied

!E O)R!S R)LING

4- '-& t- 8-tto& Co %/H oC -t.

.he Procedural issue



) petition for review under 'ule 2. of the 'ules

of ourt opens a case for review only on questions of

law, not questions of fact ) question of law exists

when the doubt centers on what the law is on a certain

set of facts ) question of fact exists when the doubt

is on the truth or falsity of the alleged facts "+$

In raising questions regarding @ranciscos cause

of death and its compensability, the B6I6, at rst

blush, appears to be raising a basic question of fact

the actual cause of @ranciscos death Its question,

however, is not on the truth or falsity of the claimed

cause of death, but on whether evidence exists

supporting the claimed cause of death 4osed in this

manner, the question is not purely a factual one as it

involves the appreciation of how evidence is to be

viewed, and whether such evidence supports or reectsthe claimed cause of death Thus, it is a question we

can rule upon in this petition

@rom the perspective of the ) decision, the

issue is not so much the actual cause of death, but a

reading of the cause of death from the point of view of

compensabilityThis is essentially a legal issue,touching as it does on the issue of

compensability 7ence, it is likewise within the power

of this ourt to review in this 'ule 2. petition

)actorsdetermining

compensa/ilit y of death

4! 5(5, as amended, denes compensable

sickness as any illness denitely accepted as an

occupational disease listed by the ommission, or any

illness caused by employment subect to proof by the

employee that the risk of contracting the same is

increased by the working conditions





6ection # /b0, 'ule III of the )mended 'ules on

;mployeesS ompensation implements 4! 5(5 and

requires that for sickness and the resulting disability or

death to be compensable, it must be an occupationaldisease included in the list provided / Anne= DAD0, with

the conditions attached to the listed sickness duly

satised= otherwise, the claimant must show proof that

the risk of contracting the illness is increased by his

working conditions In plainer terms, to be entitled to

compensation, % /%%&t ust so t%t t-

s/H&-ss s -t-: /#0 % -sut oC %& o//u8%to&%'s-%s- st-' u&'- A&&-K A of the )mended

'ules on ;mployeesS ompensation u&'- t-

/o&'to&s A&&-K A s-ts Cot= or /(0 if not so

listed, that the sH oC /o&t%/t&g t- 's-%s- s

&/-%s-' : t- oH&g /o&'to&s"#$

>ased on @ranciscos death certicate, the

immediate cause of his death was cardiac arrest= the

antecedent cause was acute massive hemorrhage, and

the underlying cause was bleeding peptic ulcer

disease

The B6I6 maintains that the respondents claim

for income benets should be denied because she

failed to present any proof, documentary or otherwise,

that peptic ulcer was the underlying cause for

@ranciscos death

9e disagree with this position, as we nd that

the respondent submitted suEcient proof of the cause

of her husbands death when she presented his death

certicate InP,ilippine American Li$e Insurance

"ompany v. "A,"##$ we held that '-%t

/-tJ/%t-s and the notes by a municipal health

oEcer prepared in the regular performance of his

duties %- prima facie -<'-&/- oC C%/ts t--&

st%t-' A 'u;-gst--' '-%t /-tJ/%t- s

/o&s'--' % 8u:/ 'o/u-&t %&' t- -&t-s

Cou&' t--& %- 8-su-' /o-/t, unless the

party who contests its accuracy can produce positive

evidence establishing a contrary conclusion 9e also

ruled in People v. &atun"#($ that %'-%t /-tJ/%t-









-st%:s-s t- C%/t oC '-%t %&' ts -'%t-,

%&t-/-'-&t, %&' u&'-&g /%us-s

6ince neither the B6I6 nor the ; presented

any evidence to refute that cardiac arrest was the

immediate cause, and peptic ulcer was the underlying

cause of @ranciscos death, we accept as established, in

accordance with the death certicate, that the

underlying cause of @ranciscos demise was peptic

ulcer

.he $0decision andPeptic Ulcer

as$ompensa/le

Illness

In the assailed decision, the ) focused on

@ranciscos immediate cause of death cardiac arrest

and ignored the underlying cause of death peptic

ulcer )ccording to the ), @ranciscos death is

compensable even if peptic ulcer is not a listed

occupational disease, since @rancisco died due to alisted cause cardiac arrest

The ) is apparently wrong in its conclusion as

it viewed in isolation the immediate cause of death

/cardiac arrest0, disregarding that what brought about

the cardiac arrest was the ultimate underlying cause

peptic ulcer This error, however, does not signify that

@ranciscos death is not compensable because peptic

ulcer itself, under specic conditions, is a compensable

illness

ontrary to the )s conclusion, peptic ulcer is a

compensable cause of death, pursuant to ;

'esolution %o #535 dated Aanuary (+, #+<#, which

unmistakably provides that 8-8t/ u/- s %

/o8-&s%:- 's-%s- st-' u&'- A&&-K A,



provided the claimant is in %& o//u8%to& t%t

&<o<-s 8oo&g-' -oto&% o 8s/% st-ss,

as among 8oC-sso&% 8-o8-, transport workers

and the like

"#*$

Peptic 4lcer is dened as:

")$n ulceration of the mucous membraneof the esophagus, stomach or duodenum,

caused by the action of the acid gastric uice

4eptic ulcer is ost /oo& %o&g8-so&s who are /o&/% %&Kouso t%t-', o o ot-s- su-Co -&t% t-&so& It occurs aboutthree times as often in men as in women6ymptoms include a pain or gnawing

sensation in the epigastric region Thepain occurs from # to * hours after eating,and is usually relieved by eating or takingan antacid drug Komiting, sometimespreceded by nausea, usually follows asevere bout of pain

184&I)TI1%6 If ulcers are untreated,bleeding can occur, leading to anemiaand therefore weakness and impairedhealth $oo' % :- <ot-', %&'%88-%s :o&s %&' H- /o--gou&'sbecause of the digestive eDect

of gastric secretions on the hemoglobin There may be blood in the stools, givingthem a tarry black color. I& %/ut- /%s-ssu''-& -o%g- /%& o//u %&'% :- C%t% C &ot t-%t-' 8o8-

x x x x

4o %&' %&K-t /%& /o&t:ut- tot- '-<-o8-&t oC %& u/- %&'8-<-&t t Co -%&g If emotionaltensions persist, an ulcer that has beenhealed by medical treatment can return Therefore, every eDort is made to helpthe patient relax 6ometimes counselingor psychotherapy is helpful in relievingemotional strain"#2$ ";mphasis supplied$

>ased on the )nnex ) list and the

accompanying requisite condition for compensability,

the question that really confronts us is: ''

%&/s/os o//u8%to& &<o<- 8oo&g-'







-oto&% o 8s/% st-ss to %H- s '-%t

'u- to 8-8t/ u/- /o8-&s%:-

) signicant point to appreciate in considering

this question is that based on the B6I6 own records,

"#.$ @rancisco was diagnosed with ypertension)

Severe) Stage III) "oronary Artery &isease) and

conned at the 'egion I 8edical enter in Auly (

The B6I6 found this ailment work-connected and

awarded @rancisco * days Temporary Total !isability

benets This nding assumes importance in the

present case because the established underlying

causes of the combination of these diseases are,

among others,t- st-ssCu &%tu- %&' 8-ssu-s

&--&t & %& o//u8%to&.[16] !s %s %t t-

GSIS %/H&o-'g-' & -/og&&g %&/s/os

tot% t-8o% 's%:t.

)s already mentioned, @rancisco worked as

;ngineer ) with the %I), a ob with enormous

responsibilities 7e had to supervise the construction

activities of &ateral ; and ;-#, and review the

structural plan and facilities"#3$ The stresses these

responsibilities carried did not abate for @ranciscowhen he returned from his Temporary Total !isability=

he occupied the same position without change of

responsibilities until his death on 8ay ., (# Thus,

@rancisco had continuous exposure to prolonged

emotional stress that would qualify his peptic ulcer a

stress-driven ailment as a compensable cause of

death

In arriving at this conclusion, we stress that in

determining the compensability of an illness, we do

not require that the employment be the sole factor in

the growth, development, or acceleration of a

claimants illness to entitle him to the benets provided

for It is enough that his employment contributed, even

if only in a small degree, to the development of the

disease"#<$ In the recent case of GSIS v. Vicencio) we

said:"#+$













It is well-settled that the degree ofproof required under 4! %o 5(5 ismerely substantial evidence, whichmeans, such relevant evidence as a

reasonable mind might accept asadequate to support a conclusion 4%tt- % -u-s s % -%so&%:-oH;/o&&-/to& %&' &ot % '-/t/%us% -%to& It is enough that thehypothesis on which the workmans claimis based is probable 8edical opinion tothe contrary can be disregardedespecially where there is some basis inthe facts for inferring a work-connection Po:%:t, &ot /-t%&t,s t- tou/sto&-. It s &ot -u-'t%t t- -8o-&t :- t- so-C%/to & t- got, '-<-o8-&t o%//--%to& oC % /%%&ts &-ss to-&tt- to t- :-&-Jts 8o<'-'Co. It s -&oug t%t s -8o-&t/o&t:ut-', -<-& C to % s%'-g--, to t- '-<-o8-&t oC t-'s-%s-. ";mphasis supplied$

In this case, the chain of causation that led to the

peptic ulcer is too obvious to be disregarded The

pressures of @ranciscos work constant, continuing and

consistent at his level of responsibility inevitably

manifested their physical eDects on @ranciscos health

and body= the initial and most obvious were the

hypertension and coronary artery disease that the

B6I6 itself recogniFed &ess obvious, but neverthelessarising from the same pressures and stresses, were

the silent killers, like peptic ulcer, that might not have

attracted @ranciscos attention to the point of driving

him to seek immediate and active medical

intervention Hltimately, when the ulcer-producing

stresses did not end, his ulcer bled profusely, aDecting

his heart and causing its arrest In this manner,@rancisco died That his widow should now be granted

benets for @ranciscos death is a conclusion we cannot

avoid and is, in fact, one that we should gladly make

as a matter of law and social ustice

Purpose of P'%' 121

Hnderstandably, the B6I6 may accuse us of

leniency in the grant of compensation benets in light



of the urisprudential trends in this area of law 1ur

leniency, however, is not due to our individual

predilections or liberal leanings= it proceeds mainly

from the character of 4! 5(5 as a social legislation

whose primordial purpose is to provide meaningful

protection to the working class against the haFards of

disability, illness, and other contingencies resulting in

loss of income In employee compensation, persons

charged by law to carry out the onstitutions social

ustice obectives should adopt a liberal attitude in

deciding compensability claims and should nothesitate to grant compensability where a reasonable

measure of work-connection can be inferred 1nly this

kind of interpretation can give meaning and substance

to the laws compassionate spirit as expressed in

)rticle 2 of the &abor ode that all doubts in the

implementation and interpretation of the provisions of

the &abor ode, including their implementing rules andregulations, should be resolved in favor of labor

"($ 9hen the implementors fail to reach up to these

standards, this ourt, as guardian of the onstitution,

necessarily has to take up the slack and order what we

must, to ensure that the constitutional obectives are

achieved This is simply what we are doing in this case

)cting on this same role, we remind the B6I6

that when it is called upon to determine the

compensability of an employees disease or death, the

present state of the 6tate Insurance @und cannot be an

excuse to avoid the payment of compensation If the

6tate Insurance @und lacks the nancial capacity, it isnot the responsibility of the insured civil servant, but

rather of the 6tate to ll in the deciency and ensure

the solvency of the 6tate Insurance @und This is the

clear mandate of )rticle #<2 of the &abor ode, which

reads:

)rticle #<2 Governmentguarantee. The 'epublic ofthe 4hilippines guarantees the benetsprescribed under this Title, and acceptsgeneral responsibility for the solvency ofthe 6tate Insurance @und In case ofdeciency, the same shall be covered by





supplemental appropriations from thenational government

In iscarra v. #epu%lic, we explicitly said:"(#$

The fear that this humane, liberal andprogressive view will swamp theBovernment with claims for continuingmedical, hospital and surgical servicesand as a consequence unduly drain the%ational Treasury, is no argument againstit= :-/%us- t- R-8u:/ oC t-

P88&-s %s % -C%- St%t-, &8o<'&g Co t- so/% ust/-gu%%&t-- & ou o&sttuto&,%ssu-s su/ sH. This assumption ofsuch a noble responsibility is, asheretofore stated, only ust and equitablesince the employees to be benetedthereby precisely became permanentlyinured or sick while invariably devotingthe greater portion of their lives to theservice of our country andpeople u%& :-&gs /o&sttut- t-ost <%u%:- &%tu% -sou/-s oCt- &%to& %&' t--Co- sou'-t t- g-st so/tu'- %&' t-g-%t-st 8ot-/to& Co t- St%t- to--<- t- Co u&:-%%:- %go& They have a right to entertain the hopethat during the few remaining years of

their life some dedicated institution orgifted individual may produce a remedyor cure to relieve them from the painful orcrippling or debilitating or humiliatingeDects of their inury or ailment, to fullyand completely rehabilitate them and

develop their mental, vocational andsocial potential, so that they will remainuseful and productive citiFens ";mphasissupplied$

The B6I6, therefore, cannot use the excuse of

the 6tate Insurance @unds present lack of capital to

refuse paying income benets to the respondent,

whose husband devoted (3 years of his life to

government service and whose death was caused by

an ailment aggravated by the emotional stresses and

pressures of his work

4EREORE, premises considered, we

hereby DENY the petition for lack of merit %o costs

SO ORDERED.





ARO ME!AL PROD)!S, O., G.R. No. 103>

IN., %&' MRS. SALVADOR )Y,

P-tto&-s, P-s-&t+

()IS)M$ING, J',

$hairperson,

; <-sus ; !INGA,

VELASO, %&'

$RION, JJ'

SAMAAN NG MGA MANGGAGA4A

SA ARO ME!AL;NAL) "SAMARM;

NAL)#, Poug%t-'+

R-s8o&'-&t.

M%1>, 2007

x---------------------------------------------------------------------------x

D E I S I O N

TI%B), *.:



This treats of the 4etition for 'eview"#$ of the

'esolution"($ and

!ecision"*$ of the ourt of )ppeals dated + !ecem

ber (. and (+ 6eptember (., respectively in )-

B' 64 %o <.<+ entitled

http://sc.judiciary.gov.ph/jurisprudence/2008/may2008/170734.htm#_ftn1








Sama,an ng mga 'anggaga1a sa Arco 'etal0NA(L4+SA'A#'0NA(L4- v. Arco 'etal Products "o.) Inc.

andCor 'r. Salvador 4yCAccredited Voluntary Ar%itrator

Apron '. 'anga%at)"2$ which ruled that the #*th month

pay, vacation leave and sick leave conversion to cash

shall be paid in full to the employees of petitioner

regardless of the actual service they rendered within a

year

4etitioner is a company engaged in the

manufacture of metal products, whereas respondent is

the labor union of petitionerXs rank and le

employees 6ometime in !ecember (*, petitioner

paid the #*th month pay, bonus, and leave encashment

of three union members in amounts proportional to the

service they actually rendered in a year, which is less

than a full twelve /#(0 months The employees were:

# 'ante &amadrid 6ickness (3 )ugust(* to (3 @ebruary (2

( )lberto Bamban 6uspension # Aune(* to # Auly (*

* 'odelio ollantes 6ickness )ugust(* to @ebruary (2

'espondent protested the prorated scheme,

claiming that on several occasions petitioner did not

prorate the payment of the same benets to seven /30

employees who had not served for the full #(

months The payments were made in #++(, #++*,

#++2, #++5, #+++, (*, and (2 )ccording to

respondent, the prorated payment violates the rule

against diminution of benets under )rticle # of the

&abor ode Thus, they led a complaint before the

%ational onciliation and 8ediation >oard

/%8>0 The parties submitted the case for voluntary

arbitration





The voluntary arbitrator, )pron 8 8angabat,

ruled in favor of petitioner and found that the giving

of the contested benets in full, irrespective of the

actual service rendered within one year has

not ripened into a practice 7e noted the aEdavit of

Aoselito >aingan, manufacturing group head of

petitioner, which states that the giving in full of the

benet was a mere error 7e also interpreted the

phrase Yfor each year of serviceZ found in the

pertinent >) provisions to mean that an employee

must have rendered one year of service in order to beentitled to the full benets provided in the >)".$

Hnsatised, respondent led a 4etition for

'eview"5$ under 'ule 2* before the ourt of )ppeals,

imputing serious error to 8angabatXs conclusion The

ourt of )ppeals ruled that the >) did not intend to

foreclose the application of prorated payments of

leave benets to covered employees The appellate

court found that petitioner, however, had an existing

voluntary practice of paying the aforesaid benets in

full to its employees, thereby reecting the claim

that petitioner erred in paying full

employees The appellate court noted that aside from

the aEdavit of petitionerXs oEcer, it has not presented

any evidence in support of its position that it has no

voluntary practice of granting the contested benets in

full and without regard to the service actually rendered

within the year It also questioned why it took

petitioner eleven /##0 years before it was able to

discover the alleged error The dispositive portion of

the courtXs decision reads:

4EREORE, premisesconsidered, the instant petition ishereby GRAN!ED and the !ecision of)ccredited Koluntary )rbiter )pron 88angabat in %8>-%' ase %o 48-#(-*2.-*, dated Aune #<, (2 ishereby AIRMED 4I!MODIIA!ION in that the #*th month

pay, bonus, vacation leave and sick leaveconversions to cash shall be paid to theemployees in full, irrespective of the actualservice rendered within a year "3$









4etitioner moved for the reconsideration of the

decision but its motion was denied, hence this petition

4etitioner submits that the ourt of )ppeals

erred when it ruled that the grant of #*th month pay,

bonus, and leave encashment in full regardless of

actual service rendered constitutes voluntary employer

practice and, consequently, the prorated payment of

the said benets does not constitute diminution of

benets under )rticle # of the &abor ode"<$





The petition ultimately fails

@irst, we determine whether the intent of the >)

provisions is to grant full benets regardless of service

actually rendered by an employee to the company

)ccording to petitioner, there is a one-year cutoD in

the entitlement to the benets provided in the >)

which is evident from the wording of its pertinent

provisions as well as of the existing law

9e agree with petitioner on the rst issue The

applicable >) provisions read:

AR!ILE ?IV;VAA!ION LEAVE

6ection # ;mployeesJworkerscovered by this agreement who haverendered at least one /#0 year ofservice shall be entitled to sixteen /#50days vacation leave with pay for eachyear of service Hnused leaves shall not be

cumulative but shall be converted into itscash equivalent and shall become due andpayable every #st 6aturday of !ecember of each year

7owever, if the #st 6aturday of!ecember falls in !ecember #, %ovember* /@riday0 being a holiday, themanagement will give the cash conversion

of leaves in %ovember (+

6ection ( In case of resignation orretirement of an employee, his vacationleave shall be paid proportionately to hisdays of service rendered during the year

AR!ILE ?V;SIB LEAVE

6ection # ;mployeesJworkerscovered by this agreement who haverendered at least one /#0 year of



service shall be entitled to sixteen /#50days of sick leave with pay for each yearof service Hnused sick leave shall not becumulative but shall be converted into itscash equivalent and shall become due andpayable every #st 6aturday of !ecember of

each year

6ection ( 6ick &eave will only begranted to actual sickness duly certied bythe ompany physician or by a licensedphysician

6ection * )ll commutable earnedleaves will be paid proportionately uponretirement or separation

AR!ILE ?VI EMERGENY LEAVE,E!.

6ection # The ompany shallgrant six /50 days emergency leave toemployees covered by this agreement andif unused shall be converted into cash andbecome due and payable on the#st 6aturday of !ecember each year

6ection ( ;mployeesJworkerscovered by this agreement who haverendered at least one /#0 year ofservice shall be entitled to seven /30 daysof 4aternity &eave with pay in case themarried employeeXs legitimate spousegave birth 6aid benet shall be non-cumulative and non-commutative and

shall be deemed in compliance with thelaw on the same

6ection * 8aternity leaves formarried female employees shall be inaccordance with the 666 &aw plus a cashgrant of 4#,. per month

x x x

AR!ILE ?VIII; 13! MON! PAY $ON)S



6ection # The ompany shallgrant #*th 8onth 4ay to all employeescovered by this agreement The basis ofcomputing such pay shall be the basic

salary per day of the employee multipliedby * and shall become due and payableevery #st 6aturday of !ecember

6ection ( The ompany shallgrant a bonus to all employees aspracticed which shall be distributed on the(nd 6aturday of !ecember



6ection * That the ompanyfurther grants the amount of Two

Thousand @ive 7undred 4esos /4(,.0as signing bonus plus a free >) >ooklet"+$ /Hnderscoring ours0

There is no doubt that in order to be entitled to

the full monetiFation of sixteen /#50 days of vacation

and sick leave, one must have rendered at least one

year of service The clear wording of the provisions

does not allow any other interpretation )nent the#*th month pay and bonus, we agree with the ndings

of 8angabat that the >) provisions did not give any

meaning diDerent from that given by the law, thus it

should be computed at #J#( of the total compensation

which an employee receives for the whole calendar

year The bonus is also equivalent to the amount of

the #*th month pay given, or in proportion to the actual

service rendered by an employee within the year

1n the second issue, however, petitioner

founders

)s a general rule, in petitions for review under

'ule 2., the ourt, not being a trier of facts, does not

normally embark on a re-examination of the evidence

presented by the contending parties during the trial of

the case considering that the ndings of facts of the

ourt of )ppeals are conclusive and binding on the

ourt"#$

The rule, however, admits of severalexceptions, one of which is when the ndings of the

ourt of )ppeals are contrary to that of the lower

tribunals 6uch is the case here, as the factual

conclusions of the ourt of )ppeals diDer from that of

the voluntary arbitrator

4etitioner granted, in several instances, full

benets to employees who have not served a full year,

thus:







%ame 'eason

!uration

# 4ercival>ernas 6ickness Auly #++( to

%ovember #++(

( eFar 8ontero 6ickness (#!ec #++( to @ebruary #++*

* 9ilson 6ayod 6ickness 8ay#++2 to Auly #++2

2 %omer >ecina 6uspension #6ept #++5 to . 1ct #++5

. 'onnie &icuan 6ickness <%ov #+++ to + !ec #+++

5 Builbert Killaruel 6ickness (*)ug (( to 2 @eb (*

3 8elandro 8oque 6ickness (+ )ug(* to * 6ept (*"##$

4etitioner claims that its full payment of

benets regardless of the length of service to the

company does not constitute voluntary employer

practice It points out that the payments had been

erroneously made and they occurred in isolated cases

in the years #++(, #++*, #++2, #+++, (( and

(* )ccording to petitioner, it was only in (* that

the accounting department discovered the error Ywhen

there were already three /*0 employees involved with

prolonged absences and the error was corrected by

implementing the pro-rata payment of benets

pursuant to law and their existing >)Z"#($ It adds that

the seven earlier cases of full payment of

benets went unnoticed considering the proportion

of one employee concerned /per year0 vis vis the #3

employees of the company 4etitioner describes the

situation as a Yclear oversightZ which should not be

taken against it"#*$ To further bolster its case, petitioner

argues that for a grant of a benet to be considered a

practice, it should have been practiced over a long

period of time and must be shown to be consistent,

deliberate and intentional, which is not what happenedin this case 4etitioner tries to make a case out of the

fact that the >) has not been modied to incorporate

the giving of full benets regardless of the length of

service, proof that the grant has not ripened into

company practice









9e disagree

)ny benet and supplement being enoyed by

employees cannot be reduced, diminished,

discontinued or eliminated by the employer"#2$ The

principle of non-diminution of benets is founded on

the onstitutional mandate to protect the rights of

workers and promote their welfare,Z"#.$ and Yto aDord

labor full protectionZ"#5$ 6aid mandate in turn is the

basis of )rticle 2 of the &abor ode which states that

Yall doubts in the implementation and interpretation of

this ode, including its implementing rules and

regulations shall be rendered in favor of laborZ

Aurisprudence is replete with cases which recogniFe the

right of employees to benets which were voluntarily

given by the employer and which ripened into

company practice Thus in &avao (ruits "orporation

v. Associated La%or 4nions) et al."#3$ where an

employer had freely and continuously included in the

computation of the #*th month pay those items that

were expressly excluded by the law, we held that the

act which was favorable to the employees though not

conforming to law had thus ripened into a practice and

could not be withdrawn, reduced, diminished,

discontinued or eliminated In Sevilla Trading

"ompany v. Semana,"#<$ we ruled that the employerXs

act of including non-basic benets in the computation

of the #*th month pay was a voluntary act and had

ripened into a company practice which cannot be

peremptorily withdrawn 8eanwhile

in &avao Integrated Port Stevedoring Services v.

A%arqueB ,"#+$ the ourt ordered the payment of the

cash equivalent of the unenoyed sick leave benets to

its intermittent workers after nding that said workers

had received these benets for almost four years until

the grant was stopped due to a diDerent interpretation

of the >) provisions 9e held that the

employer cannot

unilaterally withdraw the existing privilege of

commutation or conversion to cash given to said

workers, and as also noted that the employer had infact granted and paid said cash equivalent of the

unenoyed portion of the sick leave benets to some

intermittent workers















In the years #++(, #++*, #++2, #+++, (( and

(*, petitioner had adopted a policy of freely,

voluntarily and consistently granting full benets to its

employees regardless of the length of service

rendered True, there were only a total of seven

employees who beneted from such a practice, but it

was an established practice nonetheless Aurisprudence

has not laid down any rule specifying a minimum

number of years within which a company

practice must be exercised in order to constitute

voluntary company practice"($ Thus, it can be six /50

years,"(#$ three /*0 years,"(($ or even as short as two /(0

years"(*$ 4etitioner cannot shirk away from its

responsibility by merely claiming that it was a mistake

or an error, supported only by an aEdavit of its

manufacturing group head portions of which read:

. #*th month pay, bonus, and cashconversion of unusedJearned vacationleave, sick leave and emergency leaveare computed and paid in full toemployees who rendered services to thecompany for the entire year andproportionately to those employees whorendered service to the company for a

period less than one /#0 year or twelve/#(0 months in accordance with the >)provision relative thereto

5 It was never the intention muchless the policy of the management togrant the aforesaid benets to theemployees in full regardless of whether ornot the employee hasrendered services to the company forthe entire year, otherwise, it would beunust and inequitable not only to thecompany but to other employees as well"(2$

In cases involving money claims of employees,

the employer has the

burden of proving that the employees did receive

the wages and benets and that the same were

paid in accordance with law"(.$Indeed, if petitioner

wants to prove that it merely erred in giving full

benets, it could have easily presented other proofs,

such as the names of other employees who did not

fully serve for one year and thus were given prorated















benets ;xperientially, a perfect attendance in the

workplace is always the goal but it is seldom achieved

There must have been other employees who had

reported for work less than a full year and who, as a

consequence received only prorated benets This

could have easily bolstered petitionerXs theory of

mistakeJerror, but sadly, no evidence to that eDect was

presented

I% KI;9 7;';1@, the petition is !;%I;! The!ecision of the ourt of )ppeals in )-B' 64 %o

<.<+ dated (+ 6eptember (. is and its

'esolution dated + !ecember (. are hereby

)@@I'8;!

61 1'!;';!



MANOLO A. PEALOR,4etitioner,

- versus -

O)!DOOR LO!INGMAN)A!)RING

ORPORA!ION,NA!ANIEL !.SY), P-s'-&t, MEDYLENE M.DEMOGENA, &%&/- M%&%g-,%&' PA)L ). LEE, %%&,

'espondents

G.R. No. 111>

4resent:

)'4I1, *.) ",airperson)

>'I1%,

!;& )6TI&&1,

)>)!, and

4;';M, **.

4romulgated:

Aanuary (#, (#

x ------------------------------------------------------------------------------------------x

D E I S I O N

$RION, J:

4etitioner 8anolo ) 4eaPor /PeaFor 0 seeks the

reversal of the ourt of )ppeals /"A0

decision"#$ dated !ecember (+, (5 and its

resolution"($ dated 8arch #2, (3, through the present

petition for review on certiorari led under 'ule 2. of

the 'ules of ourt The assailed ) decision aErmed

the 6eptember (2, (( decision"*$ of the %ational

&abor 'elations ommission /NL#"0 that in turn

reversed the )ugust #., (# decision"2$ of the &abor

)rbiter".$

!E A!)AL AN!EEDEN!S

4eaPor was hired on 6eptember (, #+++ as

probationary 7uman 'esource !epartment /#&0

8anager of respondent 1utdoor lothing

8anufacturing orporation //utdoor "lot,ing or t,e

http://sc.judiciary.gov.ph/jurisprudence/2010/january2010/177114.htm#_ftn1












company 0 )s 7'! head, 4eaPor was expected to /#0

secure and maintain the right quality and quantity of

people needed by the company= /(0 maintain the

harmonious relationship between the employees and

management in a role that supports organiFational

goals and individual aspirations= and /*0 represent the

company in labor cases or proceedings Two staD

members were assigned to work with him to assist him

in undertaking these functions

4eaPor claimed that his relationship with 1utdoorlothing went well during the rst few months of his

employment= he designed and created the companys

4olicy 8anual, 4ersonnel 7andbook, Aob ;xpectations,

and 1rganiFational 6et-Hp during this period 7is woes

began when the companys Kice 4resident for

1perations, ;dgar &ee /Lee0, left the company after a

big ght between &ee and hief orporate 1Ecer

%athaniel 6yfu /Sy$u0 >ecause of his close association

with &ee, 4eaPor claimed that he was among those who

bore 6yfus ire

9hen 1utdoor lothing began undertaking its alleged

downsiFing program due to negative business returns,

4eaPor alleged that his department had been singled

out 1n the pretext of retrenchment, 4eaPors two staD

members were dismissed, leaving him as the only

member of 1utdoor lothings 7'! and compelling him

to perform all personnel-related work 7e worked as a

one-man department, carrying out all clerical,

administrative and liaison work= he personally went to

various government oEces to process the companys

papers

9hen an 1utdoor lothing employee, &ynn

4adilla /Padilla0, suDered inuries in a bombing incident,

the company required 4eaPor to attend to her

hospitaliFation needs= he had to work outside oEce

premises to undertake this task )s he was acting on

the companys orders, 4eaPor considered himself to be

on oEcial business, but was surprised when the

company deducted six days salary corresponding to

the time he assisted 4adilla )ccording to @inance

8anager 8edylene !emogena /&emogena0, he failed

to submit his trip ticket, but 4eaPor belied this claim as

a trip ticket was required only when a company vehicle



was used and he did not use any company vehicle

when he attended to his oD-premises work"5$

)fter 4eaPor returned from his eld work on 8arch #*,

(, his oEcemates informed him that while he was

away, 6yfu had appointed %athaniel >uenaobra

/uenao%ra0 as the new 7'! 8anager This information

was conrmed by 6yfus memorandum of 8arch #,

( to the entire oEce stating that >uenaobra was

the concurrent 7'! and )ccounting 8anager "3$ 4eaPor

was surprised by the news= he also felt betrayed anddiscouraged 7e tried to talk to 6yfu to clarify the

matter, but was unable to do so 4eaPor claimed that

under these circumstances, he had no option but to

resign 7e submitted a letter to 6yfu declaring his

irrevocable resignation from his employment with

1utdoor lothing eDective at the close of oEce hours

on 8arch #., ("<$

4eaPor then led a complaint for illegal dismissal with

the labor arbiter, claiming that he had been

constructively dismissed 7e included in his complaint

a prayer for reinstatement and payment of backwages,

illegally deducted salaries, damages, attorneys fees,

and other monetary claims

1utdoor lothing denied 4eaPors allegation of

constructive dismissal It posited instead that 4eaPor

had voluntarily resigned from his work ontrary to

4eaPors statement that he had been dismissed from

employment upon 6yfus appointment of >uenaobra as

the new 7'! 8anager on 8arch #, (, 4eaPor had

in fact continued working for the company until his

resignation on 8arch #., ( The company cited as

evidence the security report that 4eaPor himself

prepared and signed on 8arch #*, ("+$

1utdoor lothing disclaimed liability for any of

4eaPors monetary claims 6ince 4eaPor had voluntarily

resigned, 1utdoor lothing alleged that he was not

entitled to any backwages and damages The company

likewise denied making any illegal deduction from

4eaPors salary= while deductions were made, they were

due to 4eaPors failure to report for work during the

dates the company questioned )s a probationary











employee, he was not yet entitled to any leave credit

that would oDset his absences

In his )ugust #., (# decision, the labor arbiter found

that 4eaPor had been illegally dismissed"#$

1utdoorlothing was consequently ordered to reinstate 4eaPor

to his former or to an equivalent position, and to pay

him his illegally deducted salary for six days,

proportionate #*th month pay, attorneys fees, moral

and exemplary damages

1utdoor lothing appealed the labor arbiters decision

with the %&' It insisted that 4eaPor had not beenconstructively dismissed, claiming that 4eaPor

tendered his resignation on 8arch #, ( because he

saw no future with the corporation due to its dire

nancial standing 6yfu alleged that he was compelled

to appoint >uenaobra as concurrent 7'! 8anager

through a memorandum dated 8arch #, ( to cover

the position that 4eaPor would soon vacate"##$ The

appointment was also made to address the personnel

matters that had to be taken cared of while 4eaPor was

on unauthoriFed leave Incidentally, 1utdoor lothing

alleged that 4eaPor had already been given two

notices, on 8arch 5 and ##, ( /absence without

oEcial leave memoranda or t,e A/L memoranda0,

for his unauthoriFed absences In a memorandum

dated 8arch *, ( addressed to 6yfu, >uenaobra

accepted the appointment"#($

4eaPor contested 6yfus 8arch #, ( memorandum,>uenaobras 8arch *, ( memorandum, and the

)91& memoranda, claiming these pieces of evidence

were fabricated and were never presented before the

labor arbiter 7e pointed out that nothing in this

resignation letter indicated that it was submitted to

and received by 6yfu on 8arch #, ( 7e claimed

that it was submitted on 8arch #., (, the same

date he made his resignation eDective The )91&

memoranda could not be relied on, as he was never

furnished copies of these 8oreover, he could not be on

prolonged absence without oEcial leave, as his

residence was ust a few meters away from the oEce

The %&' apparently found 1utdoor lothings

submitted memoranda suEcient to overturn the labor

arbiters decision"#*$ It characteriFed 4eaPors

resignation as a response, not to the allegedly

degrading and hostile treatment that he was subected

to by 6yfu, but to 1utdoor lothings downward

nancial spiral >uenaobras appointment was made

only after 4eaPor had submitted his resignation letter,












and this was made to cover the vacancy 4eaPors

resignation would create Thus, 4eaPor was not eased

out from his position as 7'! manager %o malice

likewise was present in the companys decision to

dismiss 4eaPors two staD members= the company

simply exercised its management prerogative to

address the nancial problems it faced 4eaPor, in fact,

drafted the dismissal letters of his staD members In

the absence of any illegal dismissal, no basis existed

for the monetary awards the labor arbiter granted

4eaPor anchored his certiorari petition with the ) on

the claim that the %&' decision was tainted with

grave abuse of discretion, although he essentially

adopted the same arguments he presented before the

labor arbiter and the %&'

In a decision dated !ecember (+, (5,"#2$ the

) aErmed the %&'s decision, stating that 4eaPor

failed to present suEcient evidence supporting his

claim that he had been constructively dismissed The

) ruled that 4eaPors resignation was knowingly and

voluntarily made )ccordingly, it dismissed

4eaPors certiorari petition It likewise denied the

motion for reconsideration that 4eaPor subsequently

led"#.$ @aced with these ) actions, 4eaPor led with

us the present petition for review on certiorari

!E PAR!IES ARG)MEN!S

4eaPor insists that, contrary to the ndings of

the %&' and the ), he had been constructively

dismissed from his employment with 1utdoor

lothing 7e alleges that the dismissal of his two staD

members, the demeaning liaison work he had to

perform as 7'! 8anager, the salary deduction for his

alleged unauthoriFed absences, and the appointment

of >uenaobra as the new 7'! manager even before hetendered his resignation, were clear acts of

discrimination that made his continued employment

with the 1utdoor lothing unbearable 7e was thus

forced to resign

1utdoor lothing claims that 4eaPor voluntarily

resigned from his work and his contrary allegations

were all unsubstantiated The 7'! was not singled outfor retrenchment, but was simply the rst to lose its

staD members because the company had to

downsiFe Thus, all 7'! work had to be performed by

4eaPor Instead of being grateful that he was not

among those immediately dismissed due to the







companys retrenchment program, 4eaPor

unreasonably felt humiliated in performing work that

logically fell under his department= insisted on having

a full staD complement= absented himself from work

without oEcial leave= and demanded payment for his

unauthoriFed absences

!E ISS)E %&' !E O)R!S R)LING

!- out J&'s t- 8-tto& -toous.

) preliminary contentious issue is 1utdoor lothings

argument that we should dismiss the petition outright

because it raises questions of facts, not the legal

questions that should be raised in a 'ule 2. petition "#5$

9e see no merit in this argument as the rule

that a 'ule 2. petition deals only with legal issues is

not an absolute rule= it admits of exceptions In the

labor law setting, we wade into factual issues when

conPict of factual ndings exists among the labor

arbiter, the %&', and the ) This is the exact

situation that obtains in the present case since the

labor arbiter found facts supporting the conclusion that

there had been constructive dismissal, while the %&'s

and the )s factual ndings contradicted the labor

arbiters ndings"#3$ Hnder this situation, the conPicting

factual ndings below are not binding on us, and we

retain the authority to pass on the evidence presented

and draw conclusions therefrom"#<$

The petition turns on the question of whether4eaPors undisputed resignation was a voluntary or a

forced one, in the latter case making it a constructive

dismissal equivalent to an illegal dismissal ) critical

fact necessary in resolving this issue is &hether

Pea3or 4led his letter of resignation /efore or

after the appointment of uenao/ra as the

ne&5concurrent 6#% manager' This question also

gives rise to the side issue of when >uenaobras

appointment was made If the resignation letter was

submitted :-Co- 6yfus appointment of >uenaobra as

new 7'! manager, little support exists for 4eaPors

allegation that he had been forced to resign due to the

prevailing abusive and hostile working

environment >uenaobras appointment would then be

simply intended to cover the vacancy created by

4eaPors resignation 1n the other hand, if the

resignation letter was submitted %Ct- the

appointment of >uenaobra, then factual basis exists

indicating that 4eaPor had been constructively

dismissed as his resignation was a response to the









unacceptable appointment of another person to a

position he still occupied

The question of when 4eaPor submitted his resignation

letter arises because this letter undisputably madewas undated !espite 4eaPors claim of having

impressive intellectual and academic credentials,"#+$ his

resignation letter, for some reason, was undated. Thus,

the parties have directly opposing claims on the

matter 4eaPor claims that he wrote and led the letter

on the same date he made his resignation

eDective 8arch #., ( 1utdoor lothing, on the

other hand, contends that the letter was submitted

on 8arch #, (, for which reason 6yfu issued a

memorandum of the same date appointing >uenaobra

as the concurrent 7'! manager= 6yfus memorandum

cited 4eaPors intention to resign so he could devote

his time to teaching The company further cites in

support of its case >uenaobras 8arch *,

( memorandum accepting his

appointment )nother piece of evidence is the 6yfu

memorandum of 8arch #, (, which informed the

oEce of the appointment of >uenaobra as the

concurrent 7ead of 7'! the position that 4eaPor

occupied Two other memoranda are alleged to exist,

namely, the )91& memoranda of 8arch 5 and ##,

(, allegedly sent to 4enaPor

6everal reasons arising directly from these pieces of

evidence lead us to conclude that 4eaPor did indeedsubmit his resignation letter on 8arch, #., (, i.e.,

on the same day that it was submitted

(irst) we regard the 6yfu memorandum of 8arch

#, ( and the memorandum of >uenaobra of 8arch

*, ( accepting the position of 7'! 7ead to be

highly suspectIn our view, these memoranda, while

dated, do not constitute conclusive evidence of theirdates of preparation and

communication 6urprisingly, 4eaPor was never

informed about these memoranda when they directly

concerned him, particularly the turnover of

responsibilities to >uenaobra if indeed 4eaPor had

resigned on 8arch #, ( and a smooth turnover to

>uenaobra was intended ;ven the recipients of these

communications do not appear to have signed for and

dated their receipt The )91& memoranda, to be sure,

should have been presented with proof of service if

they were to have any binding eDect on 4eaPor





Second)we nd it surprising that these pieces of

evidence pointing to a 8arch #, ( resignation

specically, 6yfus 8arch #, ( memorandum to

>uenaobra about 4enaPors resignation and

>uenaobras own acknowledgment and acceptance

were only presented to t,e NL#" on appeal) not %e$ore

t,e la%or ar%iter. T,e matter 1as not even mentioned

in t,e companys position paper >led 1it, t,e la%or

ar%iter."($ 9hile the presentation of evidence at the

%&' level on appeal is not unheard of in labor cases,

"(#$still suEcient explanation must be adduced to

explain why this irregular practice should be allowed

In the present case, 1utdoor lothing totally failed to

explain the reason for its omission This failure, to us,

is signicant, as these were the clinching pieces of

evidence that allowed the %&' to ustify the reversal

of the labor arbiters decision

T,ird) the circumstances and other evidence

surrounding 4eaPors resignation support his claim that

he was practically compelled to resign from the

company

@oremost among these is the memorandum

of 8arch #, ( signed by 6yfu informing the whole

oEce /ToH All concerned0 about the designation of

>uenaobra as concurrent )ccounting and 7'!

8anager In contrast with the suspect memoranda we

discussed above, this memorandum properly bore

signatures acknowledging receipt and dates of receipt

by at least ve company oEcials, among them the

readable signature of !emogene and one )gbayani=

three of them acknowledged receipt on 8arch #*,

(, showing that indeed it was only on that day that

the appointment of >uenaobra to the 7'! position was

disclosed This evidence is fully consistent with

4eaPors position that it was only in the afternoon

of 8arch #*, ( that he was told, informally at that,

that >uenaobra had taken over his position It explains

as well why as late as 8arch #*, (, 4eaPor still

prepared and signed a security report, "(($ and is fully

consistent with his position that on that day he was

still working on the excuse letter of certain sales

personnel of the company"(*$

9e note that the company only belatedly

questioned the motivation that 4eaPor cited for his

discriminatory treatment, i.e., that he was caught in

the bitter ght between 6yfu and &ee, then Kice

4resident for 1perations, that led the latter to leave

the company"(2$ )fter &ee left, 4eaPor alleged that













those identied with &ee were singled out for adverse

treatment, citing in this regard the downsiFing of 7'!

that occurred on or about this time and which resulted

in his one-man 7'! operation 9e say this downsiFing

was only alleged as the company totally failed despite

4enaPors claim of discriminatory practice to adduce

evidence showing that there had indeed been a

legitimate downsiFing 1ther than its bare claim that it

was facing severe nancial problems, 1utdoor lothing

never presented any evidence to prove both the

reasons for its alleged downsiFing and the fact of such

downsiFing %o evidence was ever oDered to rebut

4eaPors claim that his staD members were dismissed

to make his life as 7'! 7ead diEcult To be sure,

4eaPors participation in the termination of his staD

members employment cannot be used against him, as

the termination of employment was a management

decision that 4eaPor, at his level, could not have

eDectively contested without putting his own ob on

the line

4eaPors own service with the company deserves

close scrutiny 7e started working for the company

on 6eptember (, #+++ so that by 8arch #, (, his

probationary period would have ended and he would

have become a regular employee 9e nd it highly

unlikely that 4eaPor would resign on 8arch #, (

and would then simply leave given his undisputed

record of having successfully worked within his

probationary period on the companys 4olicy 8anual,

4ersonnel 7andbook, Aob ;xpectations, and

1rganiFational 6et-up It does not appear sound and

logical to us that an employee would tender his

resignation on the very same day he was entitled by

law to be considered a regular employee, especially

when a downsiFing was taking place and he could have

availed of its benets if he would be separated from

the service as a regular employee It was strange, too,

that he would submit his resignation on 8arch #,

( and keep completely quiet about this

development until its eDective date on 8arch #.,

( In the usual course, the turnover alone of

responsibilities and work loads to the successor in a

small company would have prevented the matter frombeing completely under wraps for # days before any

announcement was ever made That 4eaPor was

caught by surprise by the turnover of his post to

>uenaobra is in fact indicated by the companys own

evidence that 4eaPor still submitted a security report



on 8arch #*, ( 1n the whole, 4eaPors record with

the company is not that of a company oEcial who

would simply and voluntarily tender a precipitate

resignation on the excuse that he would devote his

time to teaching a lame excuse at best considering

that 8arch is the month the semester usually ends and

is two or three months away from the start of another

school year

In our view, it is more consistent with human

experience that 4eaPor indeed learned of the

appointment of >uenaobra only on 8arch #*, ( and

reacted to this development through his resignation

letter after realiFing that he would only face hostility

and frustration in his working environment Three very

basic labor law principles support this conclusion and

militate against the companys case

The rst is the settled rule that in employee

termination disputes, the employer bears the burden

of proving that the employees dismissal was for ust

and valid cause"(.$ That 4eaPor did indeed le a letter

of resignation does not help the companys case as,

other than the fact of resignation, the company must

still prove that the employee voluntarily resigned"(5$ There can be no valid resignation where the act was

made under compulsion or under circumstances

approximating compulsion, such as when an

employees act of handing in his resignation was a

reaction to circumstances leaving him no alternative

but to resign"(3$ In sum, the evidence does not support

the existence of voluntariness in 4eaPors resignation

)nother basic principle is that expressed in

)rticle 2 of the &abor ode that all dou%ts in t,e

interpretation and implementation o$ t,e La%or "ode

s,ould %e interpreted in $avor o$ t,e 1or5ingman. Thisprinciple has been extended by urisprudence to cover

doubts in the evidence presented by the employer and

the employee"(<$ )s shown above, 4eaPor has, at very

least, shown serious doubts about the merits of the

companys case, particularly in the appreciation of the

clinching evidence on which the %&' and )

decisions were based In such contest of evidence, the

cited )rticle 2 compels us to rule in 4eaPors

favor Thus, we nd that 4eaPor was constructively

dismissed given the hostile and discriminatory working

environment he found himself in, particularly

evidenced by the escalating acts of unfairness against

him that culminated in the appointment of another











7'! manager without any prior notice to him 9here

no less than the companys chief corporate oEcer was

against him, 4eaPor had no alternative but to resign

from his employment"(+$

&ast but not the least, we have repeatedly given

signicance in abandonment and constructive

dismissal cases to the employees reaction to the

termination of his employment and have asked the

question: is the complaint against the employer merely

a convenient afterthought subsequent to anabandonment or a voluntary resignation? 9e nd from

the records that 4eaPor sought almost immediate

oEcial recourse to contest his separation from service

through a complaint for illegal dismissal"*$ This is not

the act of one who voluntarily resigned= his immediate

complaints characteriFe him as one who deeply felt

that he had been wronged

4EREORE, we GRAN! the petitioners

petition for review on certiorari, and REVERSE the

decision and resolution of the ourt of )ppeals in )-

B' 64 %o <3<5. promulgated on !ecember (+,

(5 and 8arch #2, (3,

respectively 9e REINS!A!E the decision of the labor

arbiter dated )ugust #., (#, with

theMODIIA!ION that, due to the strained relations

between the parties, respondents are additionally

ordered to pay separation pay equivalent to the

petitioners one months salary

osts against the respondents

SO ORDERED.

ILARIO S. RAMIRE@,4etitioner,

- versus -

ON. O)R! O APPEALS, -:u

G.R. No. 172626

4resent: 1'1%), *.)hairperson,7I1-%)M)'I1,K;&)61, A',%)7H'), and4;')&T), **

t ON NLR >tD<so&







t, ON. NLR, >tD<so&,-:u t %&' MARIO S.VAL)E$A,'espondents

4romulgated: !ecember 2, (+

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - -x

! ; I 6 I 1 %

7I1-%)M)'I1, *:

This is a 4etition for 'eview under 'ule 2. of the 'ules

of ourt assailing the /a0 #* Auly (3 'esolution"#$ of

the ourt of )ppeals which dismissed the 4etition

for "ertiorariunder 'ule 5. led by petitioner 7ilario

'amireF for failure to properly verify his petition and to

state material dates and /b0 the 3 8arch (<

'esolution"($ of the same court denying petitioners

8otion for reconsideration

The facts are:

'espondent 8ario Kalcueba /Kalcueba0 led a

omplaint"*$ for illegal dismissal and nonpayment of

wage diDerential, #*th month pay diDerential, holiday

pay, premium pay for holidays and rest days, and

service incentive leaves with claims for moral and

exemplary damages and attorneys fees, against 7ilario

'amireF /'amireF0 Kalcueba claimed that 'amireF

hired him as mechanic on (< 8ay #+++ >y ((, he

was paid a daily wage of 4#2, which was increased

to 4#5. a day in (* and to 4#+ in (. 7e

was not paid for holidays and rest days 7e was not

also paid the complete amount of his #*th month

pay 1n (3 @ebruary (5, Aosephine Torres, secretary

of 'amireF, informed Kalcueba that he would not be

allowed to return to work unless he agreed to work

on pa5ya1 basis"2$ )ggrieved, he led this case

'amireF, on the other hand, presented a

diDerent version of the antecedents, asserting that

Kalcueba was rst hired as construction worker, then

as helper of the mechanic, and eventually as

mechanic There were three categories of mechanics

at the workplace @irst were the mechanics assigned to

specic stations 6econd were the mechanics paid

on pa5ya1 basis= and nally, those who were classied

as rescueJemergency mechanics Kalcueba belonged

to the last category )s emergencyJrescue mechanic,











he was assigned to various stations to perform

emergencyJrescue work 1n (5 @ebruary (5, while

he was assigned at the >abag station, 'amireF

directed him to proceed to alawisan, &apu-lapuity,

as a unit had developed engine trouble and the

mechanic assigned in that area was absent Kalcueba

did not report to the alawisan station In fact, he did

not report for work anymore, as he allegedly intended

to return to 8indanao".$

@urther, 'amireF insisted that Kalcueba was

never terminated from his employment 1n the

contrary, it was the latter who abandoned his

ob 1n (5 @ebruary (5, Kalcueba, as rescue or

emergency mechanic, temporarily assigned at >abag

6tation, did not report at alawisan, &apu-

lapu ity when 'amireF ordered him to answer an

emergency call, which required him to x 'amireFs

troubled taxi unit The mechanic assigned in the area

was then absent at that time The refusal of Kalcueba

to obey the lawful order of 'amireF was bolstered by

his failure to report for work the following day, (3

@ebruary (5 Kalcueba advanced no reason

regarding his failure to answer an emergency call of

duty, nor did he le an application for a leave of

absence when he failed to report for work that day

)fter hearing, the &abor )rbiter rendered her decision,

where she pointed out that:

The allegation of complainant that hisrefusal to work on pa5iao basis promptedrespondent 7ilario 'amireF to dismiss himfrom the service is not substantiated byany piece of evidence %ot even adeclaration under oath by any aEantattesting to the credibility ofcomplainants allegation is presented %odocumentary evidence purporting toclearly indicate that complainant wasdischarged was submitted for 1ur udicious consideration ) fortiori, there isreason for Hs to doubt complainantssubmission that he was dismissed fromhis employment grounded ondisobedience to the lawful order ofrespondent

1n the side of respondent 'amireF, heinsisted that complainant was neverterminated from his employment 1n thecontrary, he alleged that it wascomplainant who abandoned his ob )srescue or emergency mechanictemporarily assigned at >abag 6tation,on @ebruary (5, (5, complainant didnot report at alawisan, &apu-

&apu ity when respondent 'amireF





&apu ity when respondent 'amireFordered him to answer an emergency call,which required him to x the respondentstroubled taxi unit The mechanic assignedin the area was then absent at thattime The refusal of complainant to obey

the lawful order of respondent 'amireF isbolstered by his failure to report for workthe following day, @ebruary (3,(5 omplainant advanced no reasonas to why he failed to answer anemergency call of duty nor did he le anapplication for a leave of absence whenhe failed to report for work that day %onetheless, as the records are bereft ofany evidence that respondent sent

complainant a letter which advised thelatter to report for work, 9e do not ruleout a case of abandonment because theovert act of not answering an emergencycall is not insuEcient to constituteabandonment onsequently, there being no dismissalnor abandonment involved in this case, itis best that the parties to this case shouldbe restored to their previous employment

relations omplainant must go back towork within ten /#0 days from receipt ofthis udgment, while respondent mustaccept complainant back to work, alsowithin ten /#0 days from receipt of thisdecision"5$

In the end, the &abor )rbiter decreed:

97;';@1';, KI;9;! @'18 T7;

@1';B1I%B, udgment is hereby rendereddeclaring respondent 7I&)'I1 ')8I';M,

19%;' 1@ 7' T)I, %1T BHI&TG ofillegally dismissing complainant from theservice, it appearing that there is nodismissal to speak of in thiscase onsequently, complainant isordered to report back for work within ten/#0 days from receipt hereof, andrespondent 7ilario 'amireF mustcomplainant /sic0 back to work as soon asthe latter would express his intention toreport for work or within the same period

of ten /#0 days from receipt hereof,whichever comes rst 4roof ofcompliance hereof, must be submittedwithin the same period /sic0, complainantwould be guilty of abandonment andrespondent of illegal dismissal

In addition, respondent 7I&)'I1

')8I';M, owner of 7' Taxi, is herebyordered to pay complainant 8)'I1 6K)&H;>) the following:

a 9age !iDerential - 4*,.*<b #*th 8onth 4ay - #.,(<3+< Total )ward - 42.,<(.+<

4hilippine currency, within ten /#0 daysfrom receipt hereof, through the ashierof this )rbitration >ranch

entertained and his appeal is dismissed





1ther claims are !I68I66;! for failure tosubstantiate"3$

'ecords show that 'amireF received the &abor )rbiters

decision on . Aune (5 7e led a 8otion for

'econsideration andJor 8emorandum of )ppeal with

Hrgent 8otion to 'educe )ppeal >ond"<$ on the +th day

of the reglementary period or on #2 Aune (5 before

the %ational &abor 'elations ommission /%&'0

'esolving the motion, the %&' issued a'esolution"+$ dated (+ 6eptember (5, which reads:

Hpon a careful perusal of the

motion to reduce bond, however, theommission found that the same doesnot comply with 6ection 5, 'ule KI of the%&' 'ules of 4rocedure

x x x x

'espondent has not oDered ameritorious ground for the reduction ofthe appeal bond and the amountof 4#, he posted is not areasonable amount in relation to themonetary awardof42.,<(.+< onsequently, his motionto reduce appeal bond shall not be

entertained and his appeal is dismissedfor non-perfection due to lack of anappeal bond

The %&' then held:

97;';@1';, premises considered,the appeal of respondent is hereby!I68I66;! for non-perfection due to wantof an appeal bond"#$

'amireF led a 8otion for 'econsideration, which the

%&' resolved in a 'esolution dated ( !ecember

(5 in this wise:

The mere ling of a motion to reducebond without complying with therequisites of meritorious grounds andposting of a bond in a reasonable amountin relation to the monetary award doesnot stop the running of the period toperfect an appeal Thus, respondentsfailure to abide with the requisites somentioned has not perfected hisappeal Kerily, since the assailed !ecisionof the &abor )rbiter contains a monetaryaward in favor of complainant, itbehooves upon respondent to post therequired bond

9hile the ling of a motion to reduce











9hile the ling of a motion to reducebond can be considered as a motion ofpreference in case of an appeal, the sameholds true only when such motioncomplies with the requirements statedaboveonsequently, respondents motion

to reduce bond which missed to complywith such requisites does not deserve tobe entertained nor to be given a preferredresolution 97;';@1';, premises considered, themotion for reconsideration of respondentis hereby !;%I;! for lack of merit "##$

The decision of the &abor )rbiter became nal andexecutory on #+ @ebruary (3 and was entered in the

>ook of ;ntries of Audgment on 2 8ay (3"#($

'amireF went up to the ourt of )ppeals The case was

docketed as )-B' 64 %o (5#2 In a resolution

dated #* Auly (3,"#*$ the ourt of )ppeals dismissed

the 4etition outright for failure of 'amireF to properlyverify his petition and to state material dates

'amireFs 8otion for 'econsideration was denied by

the ourt of )ppeals in a resolution dated 3 8arch

(<="#2$ hence, this petition where 'amireF prays that

the dismissal resolution issued by the ourt of )ppeals

be set aside and in its stead to give due course to this

petition by dismissing the unwarranted claims imposed

by the %&' for being highly speculative, with no

evidence to support of /sic0 "#.$

The issues are:

I 4H>&I ';641%!;%T 1H'T 1@ )44;)&6;'';! I% %1T 1%6I!;'I%B T7;

6H>6T)%TI)& 184&I)%; 1@ T7; @I&;!4;TITI1% II T7; !I68I66)& ';61&HTI1% /)%%; )07)6 %1T ';61&K;! T7; &;B)& I66H;6')I6;! I% )-B' 64 %1 (5#2"#5$

The case presents no novel issue

9e rst resolve the propriety of dismissal by the %&'

)t the outset, it should be stressed that the right to

appeal is not a natural right or a part of due process= it

i l i il d b i d















is merely a statutory privilege, and may be exercised

only in the manner prescribed by and in accordance

with the provisions of law The party who seeks to avail

himself of the same must comply with the

requirements of the rules @ailing to do so, he loses the

right to appeal"#3$

)rticle ((* of the &abor ode provides for the

procedure in case of appeal to the %&':

)rt ((* Appeal - !ecisions, awards, or

orders of the &abor )rbiter are nal andexecutory unless appealed to theommission by any or both parties withinten /#0 calendar days from receipt ofsuch decisions, awards, or orders 6uchappeal may be entertained only on any of the following grounds:

a If there is prima facie evidenceof abuse of discretion on thepart of the &abor )rbiter=

b If the decision, order or awardwas secured through fraudor coercion, including graftand corruption=

c If made purely on questions of

law= and

d If serious errors in the nding of

facts are raised which wouldcause grave or irreparabledamage or inury to theappellant

I& /%s- oC % u'g-&t &<o<&g %o&-t% %%', %& %88-% : t--8o- % :- 8-C-/t-' o&u8o& t- 8ost&g oC % /%s o su-t:o&' ssu-' : % -8ut%:- :o&'&g/o8%& 'u %//-'t-' : t-osso& & t- %ou&t-u<%-&t to t- o&-t% %%' &t- u'g-&t %88-%-'Co. /;mphasis supplied0

6ections 2/a0 and 5 of 'ule KI of the %ew 'ules of

4rocedure of the %&', as amended, reaErms the

explicit urisdictional principle in )rticle ((* even as it

allows in ustiable cases the reduction of the appeal

bond The relevant provision states:

6;TI1% 2 ';LHI6IT;6 @1' 4;'@;TI1%1@ )44;)& - /a0 The appeal shall be: #0led within the reglementary periodprovided in 6ection # of this 'ule= (0veried by the appellant himself inaccordance with 6ection 2, 'ule 3 of the'ules of ourt, as amended= *0 in theform of a memorandum of appeal which

shall state the grounds relied upon and shall not stop the running of the period to





shall state the grounds relied upon andthe arguments in support thereof, therelief prayed for, and with a statement ofthe date the appellant received theappealed decision, resolution or order= forin three /*0 legibly type written or printed

copies= and .0 accompanied by i0 proofpayment of the required appeal fee= ii0posting of a cash or surety bond asprovided in 6ection 5 of this 'ule= iii0 acerticate of non-forum shopping= and iv0proof of service upon the other parties x x x x 6;TI1% 5 >1%! In case the decision ofthe &abor )rbiter or the 'egional !irector

involves a monetary award, an appeal bythe employer may be perfected only uponthe posting of a bond, which shall eitherbe in the form of cash deposit or suretybond equivalent in amount to themonetary award, exclusive of damagesand attorneySs fees x x x x %o motion to reduce bond shall be

entertained except on meritoriousgrounds, and only upon the posting of abond in a reasonable amount in relationto the monetary award The mere ling of a motion to reducebond without complying with therequisites in the preceding paragraphs

shall not stop the running of the period toperfect an appeal

Hnder the 'ules, appeals involving monetary awards

are perfected only upon compliance with the following

mandatory requisites, namely: /#0 payment of the

appeal fees= /(0 ling of the memorandum of appeal=

and /*0 payment of the required cash or surety bond

"#<$

The posting of a bond is indispensable to the

perfection of an appeal in cases involving monetary

awards from the decision of the labor arbiter The

intention of the lawmakers to make the bond a

mandatory requisite for the perfection of an appeal by

the employer is clearly expressed in the provision that

an appeal by the employer may be perfected only

upon the posting of a cash or surety bond The word

only in )rticles ((* of the &abor ode makes it

unmistakably plain that the lawmakers intended the

posting of a cash or surety bond by the employer to be

the essential and exclusive means by which an

employerSs appeal may be perfected The word may

refers to the perfection of an appeal as optional on the

t f th d f t d t b t t t th l h ' i ht d ti f th b d h





part of the defeated party, but not to the compulsory

posting of an appeal bond, if he desires to appeal The

meaning and the intention of the legislature in

enacting a statute must be determined from the

language employed= and where there is no ambiguity

in the words used, then there is no room for

construction"#+$

learly, the ling of the bond is not only mandatory

but also a urisdictional requirement that must be

complied with in order to confer urisdiction upon the

%&' %on-compliance with the requirement renders

the decision of the &abor )rbiter nal and

executory This requirement is intended to assure the

workers that if they prevail in the case, they will

receive the money udgment in their favor upon the

dismissal of the employerSs appeal

It is intended to discourage employers from using an

appeal to delay or evade their obligation to satisfy

their employees ust and lawful claims"($

In this case, although 'amireF posted an appeal bond,

the same was insuEcient, as it was not equivalent to

the monetary award of the &abor )rbiter 8oreover,

when 'amireF sought a reduction of the bond, he

merely said that the bond was excessive and baseless

without amplifying why he considered it as such"(#$

"ol%y "onstruction and 'anagement "orporation v.

National La%or #elations "ommission"(($ succinctly

elucidates that an employer who les a motion to

reduce the appeal bond is still required to post the full

amount of cash or surety bond within the ten-day

reglementary period, even pending resolution of his

motion

Kery recently, in 'c%urnie v. GuanBon) the respondents

therein led their memorandum of appeal and motion

to reduce bond on the #th or last day of the

reglementary period)lthough they posted an initial

appeal bond, the same was inadequate compared to

the monetary award The ourt found no basis for

therein respondents contention that the awards of the

&abor )rbiter were null and excessive 9e emphasiFed

in that case that it behooves the ourt to give utmost

regard to the legislative and administrative intent to

strictly require the employer to post a cash or surety

bond securing the Cu amount of the monetary award

within the #-day reglementary period Not&g &

t- L%:o o'- o t- NLR Ru-s oC Po/-'u- same failed to elucidate why the amount of the bond











t- L%:o o'- o t- NLR Ru-s oC Po/-'u-

%uto-s t- 8ost&g oC % :o&' t%t s -ss

t%& t- o&-t% %%' & t- u'g-&t, o

'--s su/ &su/-&t 8ost&g %s su/-&t to

8-C-/t t- %88-%."(*$

>y stating that the bond is excessive and baseless

without more, and without proof that he is incapable of

raising the amount of the bond, 'amireF did not even

come near to substantially complying with the

requirements of )rt ((* of the &abor ode and %&'

'ule of 4rocedure Biven that 'amireF is involved in

taxi business, he has not shown that he had diEculty

raising the amount of the bond or was unable to raise

the amount specied in the award of the &abor )rbiter

)ll given, the %&' ustiably denied the motion to

reduce bond, as it had no basis upon which it could

actually and completely determine 'amireFs motion to

reduce bond 9e have consistently enucleated that a

mere claim of excessive bond without more does not

suEce Thus, in /ng v. "ourt o$ Appeals) *2+- this ourt

held that the %&' did not act with grave abuse of

discretion when it denied petitioners motion, for the

same failed to elucidate why the amount of the bond

was either unustied or prohibitive

In "ala%as, Garments) Inc. v. National La%or #elations

"ommission) *27- it was held that a substantial monetary

award, even if it runs into millions, does not

necessarily give the employer-appellant a [meritorious

case and does not automatically warrant a reduction of

the appeal bondIt is clear from both the &abor ode andthe %&' 'ules of 4rocedure that there islegislative and administrative intent tostrictly apply the appeal bondrequirement, and the ourt should giveutmost regard to this intention There is aconcession to the employer, in excludingdamages and attorneySs fees from thecomputation of the appeal bond %ot eventhe ling of a motion to reduce bond isdeemed to stay the period for requiringan appeal Not&g & t- L%:o o'-o t- NLR Ru-s oC Po/-'u-%uto-s t- 8ost&g oC % :o&' t%ts -ss t%& t- o&-t% %%' &

t- u'g-&t, o ou' '-- su/&su/-&t 8ost%g- %s su/-&t to8-C-/t t- %88-%. 1n the other hand, )rticle ((* indubitablyrequires that the appeal be perfected onlyupon the posting of the cash or suretybond which is equivalent to the monetaryaward in the udgment appealed from

The clear intent of both statutory andustiable causes and circumstances but none obtains









yprocedural law is to require the employerto post a cash or surety bond securing thefull amount of the monetary award withinthe ten /#0-day reglementary period9hile the bond may be reduced upon

motion by the employer, there is thatproviso in 'ule KI, 6ection "5$ that theling of such motion does not stay thereglementary period !- u%J/%to&--/t<- -u-s t%t u&-ss t-NLR g%&ts t- -'u/to& oC t-/%s :o&' t& t- t-& "10#;'%-g--&t% 8-o', t- -8o- sst -K8-/t-' to 8ost t- /%s osu-t :o&' s-/u&g t- Cu %ou&tt& t- s%' t-& "10#;'% 8-o'. If

the %&' does eventually grant themotion for reduction after thereglementary period has elapsed, thecorrect relief would be to reduce the cashor surety bond already posted by theemployer within the ten /#0-day period"(5$ /;mphases supplied0

9hile in certain instances, we allow a relaxation in the

application of the rules to set right an arrant inustice,

we never intend to forge a weapon for erring litigants

to violate the rules with impunity The liberal

interpretation and application of rules apply only to

proper cases of demonstrable merit and under

ustiable causes and circumstances, but none obtains

in this case The %&' had, therefore, the full

discretion to grant or deny 'amireFs motion to reduce

the amount of the appeal bond The nding of the

labor tribunal that 'amireF did not present suEcient

ustication for the reduction thereof cannot be said to

have been done with grave abuse of discretion "(3$

9hile 6ection 5, 'ule KI of the %&'s %ew 'ules of

4rocedure allows the ommission to reduce the

amount of the bond, the exercise of the authority is

not a matter of right on the part of the movant, but lies

within the sound discretion of the %&' upon a

showing of meritorious grounds"(<$

It is daylight-clear from the foregoing that while the

bond may be reduced upon motion by the employer,

this is subect to the conditions that /#0 the motion to

reduce the bond shall be based on -toous

gou&'s= and /(0 a -%so&%:- %ou&t in relation to

the monetary award is posted by the appellant=

otherwise, the ling of the motion to reduce bond shall

not stop the running of the period to perfect an

appeal The qualication eDectively requires that petition of 'amireF The ourt of )ppeals found that he









appeal The qualication eDectively requires that

unless the %&' grants the reduction of the cash bond

within the #-day reglementary period, t- -8o-

s st -K8-/t-' to 8ost t- /%s o su-t :o&'

s-/u&g t- Cu %ou&t t& t- s%' 10;'%

8-o'

9e have always stressed that )rticle ((*, which

prescribes the appeal bond requirement, is a rule of

urisdiction and not of procedure There is little leeway

for condoning a liberal interpretation thereof, and

certainly none premised on the ground that its

requirements are mere technicalities It must be

emphasiFed that there is no inherent right to an appeal

in a labor case, as it arises solely from grant of statute,

namely, the &abor ode

@or the same reason, we have repeatedly emphasiFed

that the requirement for posting the surety bond is not

merely procedural but urisdictional and cannot be

triPed with %on-compliance with such legal

requirements is fatal and has the eDect of rendering

the udgment nal and executory"(+$

That settled, we next resolve the issue of whether or

not the ourt of )ppeals correctly dismissed the

petition of 'amireF The ourt of )ppeals found that he

committed the following fatal defects in his petition:

# @ailure of petitioner to properly verifythe petition in accordance with )8 %o-(-#-6 amending 6ection 2, 'ule 3 inrelation to 6ection #, 'ule 5. of the 'ulesof ourt which now requires that apleading must be veried by an aEdavitthat the aEant has read the pleading andthe allegations therein are true andcorrect of his personal knowledge orbased on authentic records, as aconsequence of which the petition istreated as an unsigned pleading, which

under 6ection *, 'ule 3 of the 'ules ofourt, produces no legal eDect ( 4etitioner failed to indicate in thepetition the material dates showing whennotice of the resolution subect hereofwas received and when the motion forreconsideration was led in violation of6ection *, 'ule 25 of the 'ules of ourt "*$

1n 'amireFs failure to verify his petition, it is true that

verication is merely a formal requirement intended to

secure an assurance that matters that are alleged are

true and correctThus, the court may simply order the

correction of unveried pleadings or act on them and

waive strict compliance with the rules "*#$ 7owever this @or the same reasons above we also nd no reversible









waive strict compliance with the rules" $ 7owever, this

ourt invariably sustains the ourt of )ppeals

dismissal of the petition on technical grounds under

this provision, unless considerations of equity and

substantial ustice present cogent reasons to hold

otherwise In 'oncielcoji "orporation v. National La%or

#elations "ommission,"*($ the ourt states the rationale

'ules of procedure are tools designed topromote eEciency and orderliness as wellas to facilitate attainment of ustice, suchthat strict adherence thereto isrequired The application of the 'ulesmay be relaxed only when rigidity wouldresult in a defeat of equity andsubstantial ustice >ut, petitioner has notpresented any persuasive reason for thisourt to be liberal, even pro ,acvice. Thus, we sustain the dismissal of itspetition by the ourt of )ppeals ontechnical grounds

)gain as in the %&', 'amireF has not shown any

ustiable ground to set aside technical rules for his

failure to comply with the requirement regarding the

verication of his petition

@or the same reasons above, we also nd no reversible

error in the assailed resolution of the ourt of )ppeals

dismissing 'amireFs petition on the ground of failure to

state material dates, because in ling a special civil

action for certiorari without indicating the requisite

material date therein, 'amireF violated basic tenets of

remedial law, particularly 'ule 5. of the 'ules of ourt,

which states:

6;TI1% # Petition $or certiorari x x x x x x x

The petition shall be accompanied by acertied true copy of the udgment, orderor resolution subect thereof, copies of allpleadings and documents relevant andpertinent thereto, and a sworncertication of non-forum shopping asprovided in the third paragraph of 6ection*, 'ule 25

1n the other hand, the pertinent provision under 'ule

25 is explicit:

6ec * "ontents and >ling o$ petitioneJect o$ non0compliance 1it,requirements x x x

i l d d l 5 h i i 'ule 5. 6ection # /(nd par 0 and 'ule 25 6ection *







In actions led under 'ule 5., the petitionshall further indicate the material datesshowing when notice of the udgment ornal order or resolution subect thereofwas received, when a motion for new trial

or reconsideration, if any, was led andwhen notice of the denial thereof wasreceived x x x x The failure of the petitioner to complywith any of the foregoing requirementsshall be suEcient ground for the dismissalof the petition

There are three material dates that must be stated in a

petition for certiorari brought under 'ule 5. @irst, the

date when notice of the udgment or nal order or

resolution was received= second, the date when a

motion for new trial or for reconsideration was led=

and third, the date when notice of the denial thereof

was received In the case before us, the petition led

with the ourt of )ppeals failed to indicate when the

notice of the %&' 'esolution was received and when

the 8otion for 'econsideration was led, in violation of

'ule 5., 6ection # /( par0 and 'ule 25, 6ection *

/(nd par0

)s explicitly stated in the aforementioned 'ule, failure

to comply with any of the requirements shall be

suEcient ground for the dismissal of the petition

The rationale for this strict provision of the 'ules of

ourt is not diEcult to appreciate In Santos v. "ourt o$

Appeals,"**$ the court explains that the requirement is

for purpose of determining the timeliness of the

petition, thus:

The requirement of setting forth the three/*0 dates in a petition for certiorari under'ule 5. is for the purpose of determiningits timeliness 6uch a petition is requiredto be led not later than sixty /50 daysfrom notice of the udgment, order or'esolution sought to be assailed Therefore, that the petitionfor certiorari was led forty-one /2#0 days

from receipt of the denial of the motionfor reconsideration is hardly relevant Theourt of )ppeals was not in any positionto determine when this periodcommenced to run and whether themotion for reconsideration itself was ledon time since the material dates were notstated x x x

decision of the &abor )rbiter is already nal and





In the instant case, the petition was bereft of any

persuasive explanation as to why 'amireF failed to

observe procedural rules properly "*2$

Luite apparent from the foregoing is that the ourt of

)ppeals did not err, much less commit grave abuse of

discretion, in denying due course to and dismissing the

petition forcertiorari for its procedural defects

'amireFs failure to verify and state material dates as

required under the rules warranted the outrightdismissal of his petition

9e are not unmindful of exceptional cases where this

ourt has set aside procedural defects to correct a

patent inustice 7owever, concomitant to a liberal

application of the rules of procedure should be an

eDort on the part of the party invoking liberality to atleast explain its failure to comply with the rules

In sum, we nd no suEcient ustication to set aside

the %&' and ourt of )ppeals resolutions Thus, the

decision of the &abor )rbiter is already nal and

executory and binding upon this ourt "*.$

The relaxation of procedural rules cannot be made

without any valid reasons proDered for or underpinning

it To merit liberality, 'amireF must show reasonable

cause ustifying his non-compliance with the rules and

must convince the court that the outright dismissal of

the petition would defeat the administration of

substantive ustice The desired leniency cannot be

accorded, absent valid and compelling reasons for

such procedural lapse The appellate court saw no

compelling need meriting the relaxation of the rules=

neither do we see any"*5$

4EREORE, premises considered, the petition

is DENIED for lack of merit The 'esolutions of the

ourt of )ppeals dated #* Auly (3 and 3 8arch

(< and the 'esolutions of the %&' dated (+

6eptember (5 and ( !ecember

(5 are AIRMED osts against petitioner

SO ORDERED.










DANILO ESARIO,PANILO AGAO,ARSENIO AMADOR,ELMER OLIO,ROMANO DEL)MEN, DOMINADORAG)ILO, OLYMPIO GOLOSINO,RIARDO LA$AN,LORE!O MORA!A,RO$ER!O !IG)E,GIL$ER! VI$AR,

!OMAS MANILLA, *R., NES!ORLAS!IMOSO, *IMMY MIRA$ALLES, *AILE OLISA, ISIDRO SANE@,AN!ONIO SARIA, OSARON!RERAS, ROMEO @AMORA,MARIANO GAGAL, RO$ER!OMAR!I@ANO, DOMINGO

G.R. No. 160302

4resent:

)'4I1 81')&;6, ",airperso

4;')&T),

W

>;'6)8I%,KI&&)')8), A', and6;';%1, **.

4romulgated:

SAN!ILLIES, ARIEL ESARIO,

http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/160302.htm#_ftn1




EIRS O ELI? L)IANO, ANDMALAYANG SAMAAN NG MGAMANGGAGA4A SA $ALANEDOODS,4etitioners,

-versus - NA!IONAL LA$OR RELA!IONSOMMISSION "!IRD DIVISION#,PINABAMASARAP ORPORA!ION,DR. SY LIAN !IN, AND DOMINGO!AN,'espondents

6eptember (3, (#

x-----------------------------------------------------------------------------------------x

D E I S I O N

$ERSAMIN, J'+

onformably with the long honored principle

of a $air days 1age $or a $air days la%or , employees

dismissed for oining an illegal strike are not entitled to

backwages for the period of the strike even if they are

reinstated by virtue of their being merely members of

the striking union who did not commit any illegal act

during the strike

9e apply this principle in resolving this

appeal via a petition for review on certiorari of the

decision dated )ugust #<, (* of the ourt of )ppeals

/)0,"#$ aErming the decision dated %ovember (+,

(# rendered by the %ational &abor 'elations

ommission /%&'0 directing their reinstatement of

the petitioners to their former positions without

backwages, or, in lieu of reinstatement, the payment

of separation pay equivalent to one-half month per

year of service"($

A&t-/-'-&ts

The petitioners were among the regular employees of

respondent 4inakamasarap orporation /4I%)0, a

corporation engaged in manufacturing and selling food

seasoning They were members of petitioner 8alayang

6amahan ng mga 8anggagawa sa >alanced @oods

/Hnion0

)t <:* in the morning of 8arch #*, #++*, all the oEcers, except aete, had thereby lost their







g , ,

oEcers and some ( members of the Hnion walked

out of 4I%)s premises and proceeded to the barangay

oEce to show support for Auanito aete, an oEcer of

the Hnion charged with oral defamation by )urora

8anor, 4I%)s personnel manager, and Golanda @abella,

8anors secretary"*$ It appears that the proceedings in

the barangay resulted in a settlement, and the oEcers

and members of the Hnion all returned to work

thereafter

)s a result of the walkout, 4I%) preventively

suspended all oEcers of the Hnion because of

the 8arch #*, #++* incident 4I%) terminated the

oEcers of the Hnion after a month

1n )pril #2, #++*, 4I%) led a complaint for

unfair labor practice /H&40 and damages The

complaint was assigned to then &abor )rbiter 'aul

)quino, who ruled in his decision dated Auly #*,

#++2 that the 8arch #*, #++* incident was an illegal

walkout constituting H&4= and that all the Hnions

, p , y

employment"2$

1n )pril (<, #++*, the Hnion led a notice of

strike, claiming that 4I%) was guilty of union busting

through the constructive dismissal of its oEcers

".$ 1n 8ay +, #++*, theHnion held a strike vote, at

which a maority of #+ members of the Hnion voted

to strike"5$ The strike was held in the afternoon of Aune

#., #++*"3$

4I%) retaliated by charging the petitioners with

H&4 and abandonment of work, stating that they had

violated provisions on strike of the collective

bargaining agreement />)0, such as: /a0 sabotage by

the insertion of foreign matter in the bottling of

company products= /%0 decreased production output by

slowdown= /c0 serious misconduct, and willful

disobedience and insubordination to the orders of the

8anagement and its representatives= /d0 disruption of

the work place by invading the premises and

perpetrating commotion and disorder, and by causing

fear and apprehension= /e0 abandonment of work since

Aune (<, #++* despite notices to return to work97;';@1';, all the foregoing premisesbeing considered udgment is hereby













A , p

individually sent to them= and /$ 0 picketing within the

company premises on Aune #., #++* that eDectively

barred with the use of threat and intimidation the

ingress and egress of 4I%)s oEcials, employees,

suppliers, and customers "<$

1n 6eptember *, #++2, the Third !ivision of

the %ational &abor 'elations ommission /%&'0

issued a temporary restraining order /T'10, enoining

the Hnions oEcers and members to cease and desist

from barricading and obstructing the entrance to and

exit from 4I%)s premises, to refrain from committing

any and all forms of violence, and to remove all forms

of obstructions such as streamers, placards, or human

barricade"+$

1n %ovember (+, #++2, the %&' granted the

writ of preliminary inunction"#$

1n )ugust #<, #++<, &abor )rbiter Aose B de Kera /&)0

rendered a decision, to wit:

being considered, udgment is herebyrendered declaring the subect strike tobe illegal The complainants prayer for

decertication of the respondent unionbeing outside of the urisdiction of this)rbitration >ranch may not be given duecourse)nd nally, the claims for moral andexemplary damages for want of factualbasis are dismissed61 1'!;';!"##$

1n appeal, the %&' sustained the nding that

the strike was illegal, but reversed the &)s ruling that

there was abandonment, viB :

7owever, we disagree with the

conclusion that respondents unionmembers should be considered to haveabandoned their employment

Hnder )rticle (52 of the &abor ode,

as amended, the union oEcers whoknowingly participate in the illegal strike

may be declared to have lost theiremployment status 7owever, mereparticipation of a union member in theillegal strike does not mean loss ofemployment status unless he participatesin the commission of illegal acts duringthe strike 9hile it is true thatcomplainant thru individual memorandum

directed the respondents to return towork /pp #*# ###( 'ecords0 there is no












work /pp #*#-###(, 'ecords0 there is noshowing that respondents deliberatelyrefused to return to work ) worker who oins a strike does so precisely to assertor improve the terms and conditions of

his work If his purpose is to abandon hiswork, he would not go to the trouble of oining a strike /LT v. NL#", (#( 6')3+20

97;';@1';, premises considered,

the !ecision appealed from is hereby81!I@I;! in that complainant company isdirected to reinstate respondents namedin the complaint to their former positionsbut without backwages In the event that

reinstatement is not feasible complainantcompany is directed to pay respondentsseparation pay at one /#J(0 half monthper year of service

61 1'!;';!"#($

@ollowing the denial of their motion for

reconsideration, the petitioners assailed the %&'s

decision through a petition for certiorari in the ourt of

)ppeals /)0, claiming that the %&' gravely abused

its discretion in not awarding backwages pursuant to

)rticle (3+ of the La%or "ode, and in not declaring

their strike as a good faith strike

1n )ugust #<, (*, the ) aErmed the %&'

"#*$ In denying the petitioners claim for full backwages,

the ) applied the third paragraph of )rticle (52/a0

instead of )rticle (3+ of the La%or "ode, explaining

that the only instance under )rticle (52 when a

dismissed employee would be reinstated with full

backwages was when he was dismissed by reason of

an illegal lockout= that )rticle (52 was silent on the

award of backwages to employees participating in a

lawful strike= and that a reinstatement with full

backwages would be granted only when the dismissal

of the petitioners was not done in accordance with

)rticle (<( /dismissals with ust causes0 and )rticle

(<* /dismissals with authoriFed causes0 of the La%or

"ode

The ) disposed thus:"#2$

97;';@1';, premises considered,

the 4etition is !I68I66;! for lack of meritand the assailed (+ %ovember(# !ecision of respondent ommissionin %&' %' ) %o +3#-+. is hereby)@@I'8;! in toto %o costs

61 1'!;';!"#.$ "a/or $ode, s A88/%:-











1n 1ctober #*, (*, the ) denied the petitioners

motion for reconsideration"#5$

7ence, this appeal via petition for review on certiorari

Issu-

The petitioners posit that they are entitled to full

backwages from the date of dismissal until the date of

actual reinstatement due to their not being found to

have abandoned their obs They insist that the )

decided the question in a manner contrary to law and

urisprudence

Ru&g

9e sustain the ), but modify the decision on

the amount of the backwages in order to accord with

equity and urisprudence

I!' P%%g%8 oC At/- 26> "a#,

The petitioners contend that they are entitled to

full backwages by virtue of their reinstatement, andsubmit that applicable to their situation is )rticle (3+,

not the third paragraph of )rticle (52/a0, both of

the La%or "ode

9e do not agree with the petitioners

)rticle (3+ provides:

)rticle (3+ Security o$ Tenure In cases of regular employment, the employer shallnot terminate the services of anemployee except for a ust cause or whenauthoriFed by this Title )n employee whoisu&ust 'sss-' from work shall beentitled to reinstatement without loss ofseniority rights and other privileges %&'

to s Cu :%/H%g-s, inclusive ofallowances, and to his other benets ortheir monetary equivalent computed fromthe time his compensation was withheldfrom him up to the time of his actualreinstatement

>y its use of the phrase unjustly dismissed,in the commission of illegal acts during astrike may be declared to have lost his





)rticle (3+ refers to a dismissal that is unustly

done, t,at is, the employer dismisses the employee

without observing due process, either substantive or

procedural 6ubstantive due process requires the

attendance of any of the ust or authoriFed causes for

terminating an employee as provided under )rticle

(3< /termination by employer0, or )rticle (<* /closure

of establishment and reduction of personnel0, or )rticle

(<2 /disease as ground for termination0, all of

the La%or "ode= while procedural due process

demands compliance with the twin-notice requirement

"#3$

In contrast, the third paragraph of )rticle (52/a0

states:

)rt (52 Pro,i%ited activities /a0 xxx

)ny worker whose employment hasbeen terminated as a consequence of anunlawful lockout shall be entitled toreinstatement with full backwages )nyunion oEcer who knowingly participatesin an illegal strike and any worker orunion oEcer who knowingly participates

strike may be declared to have lost hisemployment status= 4rovided, That mereparticipation of a worker in a lawful strikeshall not constitute suEcient ground fortermination of his employment, even if a

replacement had been hired by theemployer during such lawful strike

xxx

ontemplating two causes for the dismissal of

an employee, that is: /a0 unlawful lockout= and /%0

participation in an illegal strike, the third paragraph of

)rticle (52/a0 authoriFes the award of full backwages

only when the termination of employment is a

consequence of an unlawful lockout 1n the

consequences of an illegal strike, the provision

distinguishes between a union oEcer and a union

member participating in an illegal strike ) union

oEcer who knowingly participates in an illegal strike is

deemed to have lost his employment status, but a

union member who is merely instigated or induced to

participate in the illegal strike is more benignly

treated 4art of the explanation for the benign

consideration for the union member is the policy of

reinstating rank-and-le workers who are misled into

supporting illegal strikes, absent any nding that such





workers committed illegal acts during the period of the

illegal strikes"#<$

The petitioners were terminated for oining a

strike that was later declared to be illegal The %&'

ordered their reinstatement or, in lieu of

reinstatement, the payment of their separation pay,

because they were mere rank-and-le workers whom

the Hnions oEcers had misled into oining the illegal

strike They were not unustly dismissed from work

>ased on the text and intent of the two aforequoted

provisions of the La%or "ode, therefore, it is plain that

)rticle (52/a0 is the applicable one

IIP-tto&-s &ot -&tt-' to :%/H%g-s'-s8t- t- -&st%t--&t+ 0 fair days &age for a fair days la/or

The petitioners argue that the nding of no

abandonment equated to a nding of illegal dismissal

in their favor 7ence, they were entitled to full

backwages

The petitioners argument cannot be sustained

The petitioners participation in the illegal strike

was precisely what prompted 4I%) to le a complaint

to declare them, as striking employees, to have lost

their employment status 7owever, the %&'

ultimately ordered their reinstatement after nding

that they had not abandoned their work by oining the

illegal strike They were thus entitled only to

reinstatement, regardless of whether or not the strike

was the consequence of the employers H&4,

"#+$ considering that a strike was not a renunciation of

the employment relation"($

)s a general rule, backwages are granted to

indemnify a dismissed employee for his loss of

earnings during the whole period that he is out of his

ob onsidering that an illegally dismissed employee

is not deemed to have left his employment, he is

entitled to all the rights and privileges that accrue to

him from the employment"(#$ The grant of backwages

to him is in furtherance and eDectuation of the public

obectives of the La%or "ode, and is in the nature of anot obtain in the case at bar /emphasissupplied0











command to the employer to make a public reparation

for his illegal dismissal of the employee in violation of

the La%or "ode"(($

That backwages are not granted to employees

participating in an illegal strike simply accords with the

reality that they do not render work for the employer

during the period of the illegal strike"(*$ )ccording

to GS Transport "orporation v. In$ante:"(2$

9ith respect to backwages, theprinciple of a fair days wage for a fairdays labor remains as the basic factor indetermining the award thereof IC t--s &o oH 8-Co-' : t--8o-- t-- /%& :- &o %g- o8% u&-ss, oC /ous-, t- %:o-%s %:-, &g %&' -%' to oH:ut %s -g% o/H-' out,sus8-&'-' o 'sss-' o ot-s--g% 8-<-&t-' Co oH&g. xxx

In P,ilippine 'arine /@cers Guild v."ompaia 'aritima, as aErmedin P,ilippine &iamond otel and #esort v.'anila &iamond otel Employees 4nion,the ourt stressed thatCo ts-K/-8to& to %88, t s -u-' t%tt- stH- :- -g%, a situation that does

supplied0

The petitioners herein do not deny their participation

in the Aune #., #++* strike )s such, they did not suDer

any loss of earnings during their absence from work

Their reinstatement sans backwages is in order, to

conform to the policy of a $air days 1age $or a $air

days la%or

Hnder the principle of a $air days 1age $or a $air

days la%or , the petitioners were not entitled to the

wages during the period of the strike /even if the strike

might be legal0, because they performed no work

during the strike Kerily, it was neither fair nor ust that

the dismissed employees should litigate against their

employer on the latters time"(.$ Thus, the ourt deleted

the award of backwages and held that the striking

workers were entitled only to reinstatement

in P,ilippine &iamond otel and #esort) Inc. +'anila

&iamond otel- v. 'anila &iamond otel

Employees 4nion,"(5$ considering that the striking

employees did not render work for the employer

during the strike

III

return to work upon being so ordered or after the














IIIA88o8%t- Aou&t Co S-8%%to& P%Is O&- Mo&t 8- Y-% oC S-</-

The petitioners were ordered reinstated because

they were union members merely instigated or

induced to participate in the illegal strike >y oining

the strike, they did not renounce their employment

relation with 4I%) but remained as its employees

The absence from an order of reinstatement of

an alternative relief should the employer or a

supervening event not within the control of the

employee prevent reinstatement negates the very

purpose of the order The udgment favorable to the

employee is thereby reduced to a mere paper victory,

for it is all too easy for the employer to simply refuse

to have the employee back To safeguard the spirit of

social ustice that the ourt has advocated in favor of

the working man, therefore, the right to reinstatement

is to be considered renounced or waived only when the

employee unustiably or unreasonably refuses to

employer has oDered to reinstate him"(3$

7owever, separation pay is made an alternative

relief in lieu of reinstatement in certain circumstances,

like: /a0 when reinstatement can no longer be eDected

in view of the passage of a long period of time or

because of the realities of the situation= /%0

reinstatement is inimical to the employers interest= /c0

reinstatement is no longer feasible= /d0 reinstatement

does not serve the best interests of the parties

involved= /e0 the employer is preudiced by the workers

continued employment= /$ 0 facts that make execution

unust or inequitable have supervened= or /g0 strained

relations between the employer and employee"(<$

7ere, 4I%) manifested that the reinstatement of

the petitioners would not be feasible because: /a0 it

would inPict disruption and oppression upon the

employer= /%0 petitioners "had$ stayed away for more

than #. years= /c0 its machines had depreciated and

had been replaced with newer, better ones= and /d0 it

now sold goods through independent distributors,

thereby abolishing the positions related to sales and refused reinstatement In Association o$ Independent









distribution"(+$

Hnder the circumstances, the grant of

separation pay in lieu of reinstatement of the

petitioners was proper It is not disputable that the

grant of separation pay or some other nancial

assistance to an employee is based on equity, which

has been dened as ustice outside law, or as being

ethical rather than ural and as belonging to the sphere

of morals than of law"*$ This ourt has granted

separation pay as a measure of social ustice even

when an employee has been validly dismissed, as long

as the dismissal has not been due to serious

misconduct or rePective of personal integrity or

morality"*#$

9hat is the appropriate amount for separation pay?

In G S Transport ,"*($ the ourt awarded

separation pay equivalent to one month salary per

year of service considering that #3 years had passed

4nions in t,e P,ilippines v. NL#","**$ the ourt allowed

separation pay equivalent to one month salary per

year of service considering that eight years had

elapsed since the employees had staged their illegal

strike

7ere, we note that this case has dragged for

almost #3 years from the time of the illegal strike

>earing in mind 4I%)s manifestation that the positions

that the petitioners used to hold had ceased to exist

for various reasons, we hold that separation pay

equivalent to one month per year of service in lieu of

reinstatement fully aligns with the aforecited rulings of

the ourt on the matter

4EREORE, we aErm the decision

dated )ugust #<, (* of the ourt of )ppeals, subect

to the modication to the eDect that in lieu of

reinstatement the petitioners are granted backwages

equivalent of one month for every year of service

SO ORDERED.











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