Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 85519 February 15, 1990UNIVERSITY OF STO. TOMAS, FR. MAXIMO MARINA O.P. AND GILBERTO L. GAMEZ,petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, HONORABLE LABOR ARBITER BIENVENIDO S. HERNANDEZ AND BASILIO E. BORJA,respondents.Abad, Leao & Associates for petitioners.Antonio B. Fidelino for private respondent.GANCAYCO,J.:The herein private respondent Dr. Basilio E. Borja was first appointed as "affiliate faculty" in the Faculty of Medicine and Surgery at the University of Sto. Tomas (UST for short) on September 29, 1976. In the second semester of the school year 1976-77 he was appointed instructor with a load of twelve (12) hours a week. He was reappointed instructor for the school year 1977-78 with a load of nine (9) hours a week in the first semester and two (2) hours a week in the second. On June 10, 1978 he was appointed as Instructor III for the school year 1978-79. His load for the first semester was eight (8) hours a week, and for the second semester, seven (7) hours a week.On March 19, 1979 Dean Gilberto Gamez observed that Dr. Borja should not be reappointed based on the evaluation sheet that shows his sub-standard and inefficient performance.1Nevertheless in view of the critical shortage of staff members in the Department of Neurology and Psychiatry Dr. Gamez recommended the reappointment of Dr. Borja, after informing the latter of the negative feedbacks regarding his teaching and his promise to improve his performance. Thus on July 27, 1979 he was extended a reappointment as Instructor III in the school year 1979-80. He was given a load of six (6) hours a week. In all these appointments he was a part time instructor.At the end of the academic year, it appearing that Dr. Borja had not improved his performance in spite of his assurances of improvement, his reappointment was not recommended.In July, 1982 he filed a complaint in the National Labor Relations Commission (NLRC for short) for illegal dismissal against the UST. After the submission of the pleadings and due proceedings the labor arbiter rendered a decision on July 19, 1984, the dispositive part of which reads as follows:WHEREFORE this Office finds in favor of the complainant. The respondents (sic) university are hereby ordered to effect the immediate reinstatement of complainant to his former position with full backwages, rights and benefits appertaining thereto. Respondent university is likewise ordered to pay the complainant the sum of FIVE HUNDRED THOUSAND PESOS (P500,000.00) as and by way of moral damages and another 1 0% of the gross amount due him, and as and by way of attorney's fees.Respondents are hereby ordered to effect this decision immediately.2The UST appealed therefrom to the NLRC which in due course rendered a decision on September 30, 1988, modifying the appealed decision as follows:WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED with a modification limiting the backwages to three (3) years without qualification or deduction, computed at P660.00 per month, ordering respondents to pay complainant P100,000.00 as and for actual or compensatory damages, ordering respondents to pay complainant P300,000.00 as and for moral damages, and further ordering them to pay complainant P100,000.00 as and for exemplary damages.Finally, respondents are ordered to pay to complainant the sum of ten (10%) percent of the total sum due as and for attorney's fees.3Hence the instant petition for certiorari and prohibition with a prayer for the issuance of a writ of preliminary injunction and restraining order that was filed by the UST and its officers wherein it is alleged that the public respondent NLRC committed the following errors:ITHE HONORABLE NATIONAL LABOR RELATIONS COMMISSION COMMITTED SERIOUS REVERSIBLE ERRORS OF SUBSTANCE AMOUNTING TO GRAVE ABUSE OF DISCRETION AND/OR LACK OR EXCESS OF JURISDICTION IN FINDING THAT BASILIO E. BORJA ACQUIRED TENURE, THE SAID FINDING BEING CLEARLY CONTRARY TO THE EVIDENCE AT HAND AND DEVOID OF BASIS IN LAW.IITHE HONORABLE NLRC COMMITTED A SERIOUS AND REVERSIBLE ERROR AND GRAVELY ABUSED ITS DISCRETION IN HOLDING THAT THE SERVICES OF BASILIO E. BORJA HAD BEEN CONSTRUCTIVELY TERMINATED, HIS APPOINTMENT HAVING MERELY LAPSED IN ACCORDANCE WITH ITS TERMS AS ACCEPTED BY THE COMPLAINANT-APPELLEE BORJA.IIITHE HONORABLE NLRC COMMITTED A SERIOUS AND GRAVE ERROR IN AFFIRMING, ALBEIT REDUCING THE AWARD OF THE HONORABLE LABOR ARBITERA QUOOF CLEARLY EXCESSIVE, UNJUST, UNCONSCIONABLE AND SHOCKING MORAL DAMAGES OF P300,000.00 AND IN AWARDING MOTU PROPIO EXEMPLARY DAMAGES IN THE AMOUNT OF P100,000.00 IN GRAVE ABUSE OF ITS DISCRETION AMOUNTING TO EXCESS OF JURISDICTION.4The petition is impressed with merit.In the questioned decision of the public respondent NLRC it found that private respondent had earned to his credit eight (8) semesters or four (4) academic years of professional duties with the UST and that he has met the requirements to become a regular employee under the three (3) years requirement in the Manual of Regulations for Private Schools.The appealed decision is correct insofar as it declares that it is the Manual of Regulations for Private Schools, not the Labor Code, that determines the acquisition of regular or permanent status of faculty members in an educational institution, but the Court disagrees with the observation that it is only the completion of three (3) years of service that is required to acquire such status.According to Policy Instructions No. 11 issued by the Department of Labor and Employment, "the probationary employment of professors, instructors and teachers shall be subject to standards established by the Department of Education and Culture." Said standards are embodied in paragraph 75 of the Manual of Regulations for Private Schools, to wit:75. Full timeteachers who have rendered three consecutive years of satisfactory service shall be considered permanent." (Emphasis supplied)The legal requisites, therefore, for acquisition by a teacher of permanent employment, or security of tenure, are as follows:1) the teacher is a full time teacher;2) the teacher must have rendered three (3) consecutive years of service; and3) such service must have been satisfactory.Now, the Manual of Regulations also states that "a full-time teacher" is "one whose total working day is devoted to the school, has no other regular remunerative employment and is paid on a regular monthly basis regardless of the number of teaching hours" (Par. 77); and that in college, "the nominal teaching load of a full-time instructor shall beeighteen hours a week" (par. 78).It follows that apart-timemember of the faculty cannot acquire permanence in employment under the Manual of Regulations in relation to the Labor Code.Hence, the crucial question is whether or not the private respondent was afull-time or part-timemember of the faculty during the three (3) years that he served in the petitioner-university's College of Medicine. Stated otherwise, the question is (1) whether or not the said respondent's "total working day ..... (was) devoted to the school" and he had "no other regular remunerative employment" and was "paid on a regular monthly basis regardless of the number of teaching hours;" and/or (2) whether or not his normal teaching load was eighteen (18) hours a week.It cannot be said that respondent's total working day was devoted to the school alone. It is clear from the record that he was practising his profession as a doctor and maintaining a clinic in the hospital for this purpose during the time that he was given a teaching load. In other words, he had another regular remunerative work aside from teaching. His total working day was not, therefore, devoted to the school. Indeed, his salaries from teaching were computed by the respondent Commission itself at only an average ofP660.00 per month; he, therefore, had to have other sources of income, and this of course was his self-employment as a practising psychiatrist. That the compensation for teaching had to be averaged also shows that he was not paid on a regular monthly basis. Moreover, there is absolutely no evidence that he performed other functions for the school when not teaching. All things considered, it would appear that teaching was only a secondary occupation or "sideline," his professional practice as a psychiatrist being his main vocation.The record also discloses that he never had a normal teaching load of eighteen (18) hours a week during the time that he was connected with the university. The only evidence on this equally vital issue was presented by the petitioner through the affidavit of Dr. Gilberts Gamez who was the dean of the medical school during the time material to the proceedings at bar. His sworn declaration is to the effect that as "affiliate faculty" member of the Department of Neurology and Psychiatry from September 29,1976, private respondent had no teaching functions: that in fact, when he was appointed inSeptember, 1976, classes for the first semester were already nearing their end; that as "affiliate faculty" he was merely an observer acquainting himself with the functions of an instructor while awaiting issuance of a formal appointment as such; that in the school year 1977-78 he had a teaching load ofnine (9) hours a weekin the first semester andtwo (2) hours a weekin the second semester; that in the school year 1978-1979 he had a load ofeight (8) hours a weekin the first semester andseven (7) hours a weekin the second semester; that in the school year 1979-1980 he had a load ofsix (6) hours a weekin each semester. This evidence does not appear to have been refuted at all by the private respondent, and has inexplicably been ignored by public respondent. No discussion of this particular point is found in the decisions of the Labor Arbiter or the NLRC.The private respondent, therefore, could not be regarded as a full- time teacher in any aspect. He could not be regarded as such because his total working day was not devoted to the school and he had other regular remunerative employment. Moreover, his average teaching load was only 6.33 hours a week.In view of the explicit provisions of the Manual of Regulations above-quoted, and the fact that private respondent was not a full- time teacher, he could not have and did not become a permanent employee even after the completion of three (3) years of service.Having found that private respondent did not become a permanent employee of petitioner UST, it correspondingly follows that there was no duty on the part of petitioner UST to reappoint private respondent as Instructor, the temporary appointment having lapsed. Such appointment is a matter addressed to the discretion of said petitioner.The findings, therefore, of the public respondent NLRC that private respondent was constructively terminated is without lawful basis. By the same token, the order for reinstatement of private respondent with backwages plus an award of actual or compensatory, moral and exemplary damages must be struck down.WHEREFORE, the petition is hereby GRANTED. The questioned orders of public respondent NLRC dated September 13, 1988 and public respondent labor arbiter Bienvenido S. Hernandez dated July 19,1988 are hereby SET ASIDE and another judgment is hereby rendered DISMISSING the complaint of private respondent, without pronouncement as to costs.SO ORDERED.Fernan (C.J.), Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Bidin, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.Narvasa and Padilla, JJ., took no part.Separate OpinionsSARMIENTO,J.,dissenting:I vote to deny this petition for lack of merit.From the records, it appears, that:Complainant is a Doctor of Medicine with well-rounded experience in the field of Psychiatry. In consideration of his impressive qualifications, respondents appointed him as a faculty member in the UST Faculty of Medicine and Surgery, Department of Neurology and Psychiatry. His services in respondent university are: Affiliate Faculty member for the school year 1976-77; Instructor I in 1976- 1977; Instructor III on January 5, 1977 and for the school year 1978-1979; professor-in-charge of Psychiatry II for the school year 1978-1979; and Instructor II for the school year 1979-1980. He was also allowed by respondents to hold his clinic in the UST Hospital by virtue of a contract which started in 1978, renewable from year to year. Complainant claims that respondents failed without justifiable reason to give him a teaching load for the school year 1980-1981, and, therefore, he called the attention of the Head of Academic Affairs and the Dean of the Faculty who referred the matter to the University Rector. He further wrote a letter to the respondents on August 12, 1981, but the same was not answered at all, and so he went to the Rector's Office on March 16 and 18, 1982, but was told that the Rector could not see or talk to him. For these reasons, the complainant charged respondents of illegal dismissal as he was not given a teaching load for the school year 1980-1981. He further alleged that the door leading to his clinic was locked twice without notice. Based on the above allegations, complainant seeks recovery of actual and moral damages allegedly suffered by him by reason of his dismissal by the respondents. Most importantly, he alleges that he was also denied practice of his profession in the hospital.Respondents traversed complainant's charges alleging that complainant had not yet acquired tenure of employment under the provisions of the UST Faculty Code as he had not completed four (4) academic years of service; hence, his services in the university were no longer renewed upon its expiration.Respondents likewise denied complainant's allegation that the door leading to his clinic in the hospital was locked. (Rollo, 68-70.)The issues are:1. Whether or not complainant's services in the university had been constructively terminated by the respondents when the former was not given a teaching load for the school year 1980-1981; and2. Whether or not complainant's claims for actual, moral and exemplary damages as well as attorney's fees are supported by the facts and jurisprudence.It is Our considered opinion that complainant's services as a member of the faculty in respondent university were terminated without just cause. (Id., 70.)As I have indicated, I sustain the NLRC. No grave abuse of discretion, so I find, has been successfully attributed to it to warrant the extraordinary remedy of certiorari.There is no question that under the Manual of Regulations for Private Schools, employees on probation status have three years within which to serve their probation. Within that period they may not be terminated unless for just cause.From the records, the private respondent had been with the petitioner-university as instructor since 1976, when in 1980, he was laid off. He was also informed that there had been "previous negative feedbacks regarding his teaching." (Id., 6.) That notwithstanding, I submit he had acquired security of tenure after his three-year probation. The fact that it was extended another year means, in my view, that the school had been satisfied of his performance. The petitioner-university can not now be heard to say otherwise.I am agreed that:The records show that the ground relied upon by the respondents in not renewing complainant's last appointment when no teaching load for the school year 1980-1981 was assigned to him was due to the alleged termination of his appointment and there was no obligation on the part of respondents to extend to him a permanent appointment in accordance with the provisions of the UST Faculty Code or Manual of Regulations for private Schools. We do not agree with respondents' view. Complainant was first employed as Affiliate Faculty of respondent University in the first semester of the school year 1976-1977 or on September 29, 1976 as shown in his appointment signed by the Dean of the Faculty of Medicine and Surgery of UST. (Annexes 'A" & 'B", Reply to Respondent's Position Paper.) Additional evidences which will fortify the fact of complainant having rendered forty (40) months of eight (8) semesters could be gleaned from the Faculty Statement of Earnings and Deductions (Exhibits "D', 'E" and 'H" to 'H-38", for complainant). Most likely, complainant's early appointment (supra) had been deliberately omitted by the respondents to confuse the Labor Arbitera quoin believing that the former had not yet acquired the tenurial rights under the Faculty Code. This, to our mind, is a scheme resorted to by the respondents to preclude complainant from becoming a regular professor of the University. We find complainant to have earned to his credit eight (8) semesters or four (4) academic years of professional duties with the respondents. Suffice it to say, therefore, complainant met the requirement to become a regular employee under the 3 years requirement in the Manual of Regulations for Private Schools (par. 75), and, as such, complainant should not have been deprived of subject load by the respondents for the school year 1980-1981. (Decision, 4-6.)The university's contention that under the UST Faculty Code, tenure is acquired after four years in office, has no merit. First, the code can not prevail over the Manual of Regulations for Private Schools, which has the character and force of law. Under the Manual:75). Full-time teachers who have rendered three consecutive years of satisfactory service shall be considered permanent.What "full-time" means is stated as follows:76. ... For this purpose, a full-time teacher should be one whose total working day is devoted to the school. has no other regular remunerative employment, and is paid on a regular monthly basis regardless of the number of teaching hours.It is true that under paragraph 78 of the Manual, "the normal teaching load of a full-time instructor shall be eighteen hours a week." It is my reading of this provision, however, that a full-time instructor can not merely be made to teach for longer hours. Hence, the succeeding paragraph states:79. Any teaching assignment in excess of the foregoing must be taken up with the Bureau, which case shall be considered only on the basis of educational qualifications, experience, efficiency rating, and subject preparations of the teachers concerned.It is my understanding of paragraph 78 that it operates as a restraint upon schools against a grant of excessive manhours, although school authorities may prescribe a longer period, but provided that it has the imprimatur of the Bureau of Private Schools. A lesser number of hours, however, does not make an instructor part-time, if he has otherwise complied with the requisites of paragraph 76. The decision of the NLRC indicates that the private respondent worked on a full-time basis whatever the number of teaching hours given to him and we can not disturb its findings. (See Decision,id., 6.)Second, assuming that the four-year rule is permissible, the private respondent's tenure during that period was nevertheless secure, which could only be perished by a valid cause. "Negative feedbacks," short of actual violations of the faculty code, are no excuse for termination.The rule is that, unless otherwise provided by contract, a probationary employee can not be dismissed (during the three-year period), unless dismissal is compelled by a just cause or causes. However, if thereafter, the school finds the employee's performance unsatisfactory, it is at liberty to rehire or not the employee, unless a grave abuse of discretion has been committed. Here, the fact that the private respondent was allowed to stay one year more gave the latter security of tenure.I must not be understood, however, as holding that schools may or can not enter into contracts for specific periods (less or more than three years; see also Manual, par. 74) with teaching applicants. Here, however, there is no "contract" to speak of, other than the implied agreement between the parties. In that case, the Manual is applicable.The closure of the doctor's clinic, finally, is a valid basis for the award of moral and exemplary damages, and attorney's fees.Hence, I cast this dissenting vote.Separate OpinionsSARMIENTO,J.,dissenting:I vote to deny this petition for lack of merit.From the records, it appears, that:Complainant is a Doctor of Medicine with well-rounded experience in the field of Psychiatry. In consideration of his impressive qualifications, respondents appointed him as a faculty member in the UST Faculty of Medicine and Surgery, Department of Neurology and Psychiatry. His services in respondent university are: Affiliate Faculty member for the school year 1976-77; Instructor I in 1976- 1977; Instructor III on January 5, 1977 and for the school year 1978-1979; professor-in-charge of Psychiatry II for the school year 1978-1979; and Instructor II for the school year 1979-1980. He was also allowed by respondents to hold his clinic in the UST Hospital by virtue of a contract which started in 1978, renewable from year to year. Complainant claims that respondents failed without justifiable reason to give him a teaching load for the school year 1980-1981, and, therefore, he called the attention of the Head of Academic Affairs and the Dean of the Faculty who referred the matter to the University Rector. He further wrote a letter to the respondents on August 12, 1981, but the same was not answered at all, and so he went to the Rector's Office on March 16 and 18, 1982, but was told that the Rector could not see or talk to him. For these reasons, the complainant charged respondents of illegal dismissal as he was not given a teaching load for the school year 1980-1981. He further alleged that the door leading to his clinic was locked twice without notice. Based on the above allegations, complainant seeks recovery of actual and moral damages allegedly suffered by him by reason of his dismissal by the respondents. Most importantly, he alleges that he was also denied practice of his profession in the hospital.Respondents traversed complainant's charges alleging that complainant had not yet acquired tenure of employment under the provisions of the UST Faculty Code as he had not completed four (4) academic years of service; hence, his services in the university were no longer renewed upon its expiration.Respondents likewise denied complainant's allegation that the door leading to his clinic in the hospital was locked. (Rollo, 68-70.)The issues are:1. Whether or not complainant's services in the university had been constructively terminated by the respondents when the former was not given a teaching load for the school year 1980-1981; and2. Whether or not complainant's claims for actual, moral and exemplary damages as well as attorney's fees are supported by the facts and jurisprudence.It is Our considered opinion that complainant's services as a member of the faculty in respondent university were terminated without just cause. (Id., 70.)As I have indicated, I sustain the NLRC. No grave abuse of discretion, so I find, has been successfully attributed to it to warrant the extraordinary remedy of certiorari.There is no question that under the Manual of Regulations for Private Schools, employees on probation status have three years within which to serve their probation. Within that period they may not be terminated unless for just cause.From the records, the private respondent had been with the petitioner-university as instructor since 1976, when in 1980, he was laid off. He was also informed that there had been "previous negative feedbacks regarding his teaching." (Id., 6.) That notwithstanding, I submit he had acquired security of tenure after his three-year probation. The fact that it was extended another year means, in my view, that the school had been satisfied of his performance. The petitioner-university can not now be heard to say otherwise.I am agreed that:The records show that the ground relied upon by the respondents in not renewing complainant's last appointment when no teaching load for the school year 1980-1981 was assigned to him was due to the alleged termination of his appointment and there was no obligation on the part of respondents to extend to him a permanent appointment in accordance with the provisions of the UST Faculty Code or Manual of Regulations for private Schools. We do not agree with respondents' view. Complainant was first employed as Affiliate Faculty of respondent University in the first semester of the school year 1976-1977 or on September 29, 1976 as shown in his appointment signed by the Dean of the Faculty of Medicine and Surgery of UST. (Annexes 'A" & 'B", Reply to Respondent's Position Paper.) Additional evidences which will fortify the fact of complainant having rendered forty (40) months of eight (8) semesters could be gleaned from the Faculty Statement of Earnings and Deductions (Exhibits "D', 'E" and 'H" to 'H-38", for complainant). Most likely, complainant's early appointment (supra) had been deliberately omitted by the respondents to confuse the Labor Arbitera quoin believing that the former had not yet acquired the tenurial rights under the Faculty Code. This, to our mind, is a scheme resorted to by the respondents to preclude complainant from becoming a regular professor of the University. We find complainant to have earned to his credit eight (8) semesters or four (4) academic years of professional duties with the respondents. Suffice it to say, therefore, complainant met the requirement to become a regular employee under the 3 years requirement in the Manual of Regulations for Private Schools (par. 75), and, as such, complainant should not have been deprived of subject load by the respondents for the school year 1980-1981. (Decision, 4-6.)The university's contention that under the UST Faculty Code, tenure is acquired after four years in office, has no merit. First, the code can not prevail over the Manual of Regulations for Private Schools, which has the character and force of law. Under the Manual:75). Full-time teachers who have rendered three consecutive years of satisfactory service shall be considered permanent.What "full-time" means is stated as follows:76. ... For this purpose, a full-time teacher should be one whose total working day is devoted to the school. has no other regular remunerative employment, and is paid on a regular monthly basis regardless of the number of teaching hours.It is true that under paragraph 78 of the Manual, "the normal teaching load of a full-time instructor shall be eighteen hours a week." It is my reading of this provision, however, that a full-time instructor can not merely be made to teach for longer hours. Hence, the succeeding paragraph states:79. Any teaching assignment in excess of the foregoing must be taken up with the Bureau, which case shall be considered only on the basis of educational qualifications, experience, efficiency rating, and subject preparations of the teachers concerned.It is my understanding of paragraph 78 that it operates as a restraint upon schools against a grant of excessive manhours, although school authorities may prescribe a longer period, but provided that it has the imprimatur of the Bureau of Private Schools. A lesser number of hours, however, does not make an instructor part-time, if he has otherwise complied with the requisites of paragraph 76. The decision of the NLRC indicates that the private respondent worked on a full-time basis whatever the number of teaching hours given to him and we can not disturb its findings. (See Decision,id., 6.)Second, assuming that the four-year rule is permissible, the private respondent's tenure during that period was nevertheless secure, which could only be perished by a valid cause. "Negative feedbacks," short of actual violations of the faculty code, are no excuse for termination.The rule is that, unless otherwise provided by contract, a probationary employee can not be dismissed (during the three-year period), unless dismissal is compelled by a just cause or causes. However, if thereafter, the school finds the employee's performance unsatisfactory, it is at liberty to rehire or not the employee, unless a grave abuse of discretion has been committed. Here, the fact that the private respondent was allowed to stay one year more gave the latter security of tenure.I must not be understood, however, as holding that schools may or can not enter into contracts for specific periods (less or more than three years; see also Manual, par. 74) with teaching applicants. Here, however, there is no "contract" to speak of, other than the implied agreement between the parties. In that case, the Manual is applicable.The closure of the doctor's clinic, finally, is a valid basis for the award of moral and exemplary damages, and attorney's fees.Hence, I cast this dissenting vote.Footnotes

Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. L-77629 May 9, 1990KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY, ACTIVISM AND NATIONALISM-ORGANIZED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE (KILUSAN-OLALIA), ROQUE JIMENEZ, MARIO C. RONGALEROS and OTHERS,petitioners,vs.HON. FRANKLIN M. DRILON, KIMBERLY-CLARK PHILIPPINES, INC., RODOLFO POLOTAN, doing business under the firm name "Rank Manpower Co." and UNITED KIMBERLY-CLARK EMPLOYEES UNION-PHILLIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (UKCEU-PTGWO),respondents.KIMBERLY INDEPENDENT LABOR UNION FOR SOLIDARITY, ACTIVITISM AND NATIONALISM-OLALIA (KILUSAN-OLALIA),petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, MANUEL AGUILAR, MA. ESTRELLA ALDA, CAPT. REY L. LANADA, COL. VIVENCIO MANAIG and KIMBERLY-CLARK PHILIPPINES, INC.,respondents.REGALADO,J.:Before us are two consolidated petitions forcertiorarifiled by the above-named petitioner union (hereinafter referred to as KILUSAN-OLALIA, for conciseness) and individual complainants therein, to wit (a) G.R. 77629, which seeks to reverse and set aside the decision, dated November 13, 1986,1and the resolution, dated January 9, 1987,2respectively handed down by the two former Ministers of Labor, both rendered in BLR Case No. NS-5-164-86; and (b) G.R. No. 78791, which prays for the reversal of the resolutions of the National Labor Relations Commission, dated May 25, 19873and June 19,19874issued in Injunction Case No. 1442 thereof.Kimberly-Clark Philippines, Inc. (KIMBERLY, for brevity) executed a three-year collective bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers' Organization (UKCEU-PTGWO) which expired on June 30, 1986.Within the 60-day freedom period prior to the expiration of and during the negotiations for the renewal of the aforementioned CBA, some members of the bargaining unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor Association in Line Industries and Agriculture (KILUSAN-OLALIA)."On April 21, 1986, KILUSAN-OLALIA filed a petition for certification election in Regional Office No. IV, Ministry of Labor and Employment (MOLE), docketed as Case No. RO4-OD-M-415-86.5KIMBERLY and (UKCEU-PTGWO) did not object to the holding of a certification election but objected to the inclusion of the so-called contractual workers whose employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company (RANK for short), as among the qualified voters.Pending resolution of the petition for certification election by the med-arbiter, KILUSAN-OLALIA filed a notice of strike on May 7, 1986 with the Bureau of Labor Relations, docketed as BLR Case No. NS-5-164-86,6charging KIMBERLY with unfair labor practices based on the following alleged acts: (1) dismissal of union members (KILUSAN-OLALIA); (2) non-regularization of casuals/contractuals with over six months service; (3) non-implementation of appreciation bonus for 1982 and 1983; (4) non-payment of minimum wages; (5) coercion of employees; and (6) engaging in CBA negotiations despite the pendency of a petition for certification election. This was later amended to withdraw the charge of coercion but to add, as new charges, the dismissal of Roque Jimenez and the non-payment of backwages of the reinstated Emerito Fuentes .7Conciliation proceedings conducted by the bureau proved futile, and KILUSAN-OLALIA declared a strike at KIMBERLY's premises in San Pedro, Laguna on May 23, 1986.On May 26, 1986, KIMBERLY petitioned MOLE to assume jurisdiction over the labor dispute. On May 30, 1986, finding that the labor dispute would adversely affect national interest, then Minister Augusto S. Sanchez issued an assumption order, the dispositive portion whereof reads:Wherefore, premises considered, immediately upon receipt of this order, the striking union and its members are hereby enjoined to lift the picket and remove all obstacles to the free ingress to and egress from the company premises and to return to work, including the 28 contractual workers who were dismissed; likewise, the company is directed to resume its operations immediately thereafter and to accept all the employees back under the same terms and conditions of employment prevailing prior to the industrial action. Further, all issues in the notice of strike, as amended, are hereby assumed in this assumption order, except for the representation issue pending in Region IV in which the Med-Arbiter is also enjoined to decide the same the soonest possible time.8In obedience to said assumption order, KILUSAN-OLALIA terminated its strike and picketing activities effective June 1, 1986 after a compliance agreement was entered into by it with KIMBERLY.9On June 2, 1986, Med-Arbiter Bonifacio 1. Marasigan, who was handling the certification election case (RO4-OD-M-4-1586), issued an order10declaring the following as eligible to vote in the certification election, thus:1. The regular rank-and-file laborers/employees of the respondent company consisting of 537 as of May 14, 1986 should be considered qualified to vote;2. Those casuals who have worked at least six (6) months as appearing in the payroll months prior to the filing of the instant petition on April 21, 1986; and3. Those contractual employees who are allegedly in the employ of an independent contractor and who have also worked for at least six (6) months as appearing in the payroll month prior to the filing of the instant petition on April 21, 1986.During the pre-election conference, 64 casual workers were challenged by KIMBERLY and (UKCEU-PTGWO) on the ground that they are not employees, of KIMBERLY but of RANK. It was agreed by all the parties that the 64 voters shall be allowed to cast their votes but that their ballots shall be segregated and subject to challenge proceedings. The certification election was conducted on July I., 1986, with the following results:111. KILUSAN-OLALIA = 246 votes2. (UKCEU-PTGWO) = 266 votes3. NO UNION = 1 vote4. SPOILED BALLOTS = 4 votes5. CHALLENGED BALLOTS = 64 votesTOTAL 581 votesOn July 2, 1986, KILUSAN-OLALIA filed with the med-arbiter a "Protest and Motion to Open and Count Challenged Votes"12on the ground that the 64 workers are employees of KIMBERLY within the meaning of Article 212(e) of the Labor Code. On July 7, 1986, KIMBERLY filed an opposition to the protest and motion, asserting that there is no employer-employee relationship between the casual workers and the company, and that the med-arbiter has no jurisdiction to rule on the issue of the status of the challenged workers which is one of the issues covered by the assumption order. The med-arbiter opted not to rule on the protest until the issue of regularization has been resolved byMOLE.13On November 13, 1986, then Minister Sanchez rendered a decision in BLR Case No. NS-5-164-86,14the disposition wherein is summarized as follows:1. The service contract for janitorial and yard maintenance service between KIMBERLY and RANK was declared legal;2. The other casual employees not performing janitorial and yard maintenance services were deemed labor-only contractual and since labor-only contracting is prohibited, such employees were held to have attained the status of regular employees, the regularization being effective as of the date of the decision;3. UKCEU-PTGWO having garnered more votes than KILUSAN-OLALIA was certified as the exclusive bargaining representative of KIMBERLY's employees;4. The reinstatement of 28 dismissed KILUSAN-OLALIA members was ordered;5. Roque Jimenez was ordered reinstated without backwages, the period when he was out of work being considered as penalty for his misdemeanor;6. The decision of the voluntary arbitrator ordering the reinstatement of Ermilo Fuentes with backwages was declared as already final and unappealable; and7. KIMBERLY was ordered to pay appreciation bonus for 1982 and 1983.On November 25, 1986, KIMBERLY flied a motion for reconsideration with respect to the regularization of contractual workers, the appreciation bonus and the reinstatement of Roque Jimenez.15In a letter dated November 24, 1986, counsel for KILUSAN-OLALIA demanded from KIMBERLY the implementation of the November 13, 1986 decision but only with respect to the regularization of the casual workers.16On December 11, 1986, KILUSAN-OLALIA filed a motion for reconsideration questioning the authority of the Minister of Labor to assume jurisdiction over the representation issue. In the meantime, KIMBERLY and UKCEU-PTGWO continued with the negotiations on the new collective bargaining agreement (CBA), no restraining order or junctive writ having been issued, and on December 18, 1986, a new CBA was concluded and ratified by 440 out of 517 members of the bargaining unit.17In an order dated January 9, 1987, former Labor Minister Franklin Drilon denied both motions for reconsideration filed by KIMBERLY and KILUSAN-OLALIA.18On March 10, 1987, the new CBA executed between KIMBERLY and UKCEU-PTGWO was signed.On March 16, 1987, KILUSAN-OLALIA filed a petition forcertiorariin this Court docketed as G.R. No. 77629, seeking to set aside the aforesaid decision, dated November 13, 1986, and the order, dated January 9, 1987, rendered by the aforesaid labor ministers.On March 25, 1987, this Court issued in G.R. No. 77629 a temporary restraining order, enjoining respondents from enforcing and/or carrying out the decision and order above stated, particularly that portion (1) recognizing respondent UKCEU-PTGWO as the exclusive bargaining representative of all regular rank-and-file employees in the establishment of respondent company, (2) enforcing and/or implementing the alleged CBA which is detrimental to the interests of the members of the petitioner union, and (3) stopping respondent company from deducting monthly dues and other union assessments from the wages of all regular rank-and-file employees of respondent company and from remitting the said collection to respondent UKCEU-PTGWO issued in BLR Case No. NS-5-164-86, entitled, "In Re: Labor Dispute at Kimberly-Clark Philippines, Inc.," of the Department of Labor and Employment, Manila,19In its comment,20respondent company pointed out certain events which took place prior to the filing of the petition in G.R. No. 77629, to wit:1. The company and UKCEU-PTGWO have concluded a new collective bargaining agreement which had been ratified by 440 out of 517 members of the bargaining unit;2. The company has already granted the new benefits under the new CBA to all its regular employees, including members of petitioner union who, while refusing to ratify the CBA nevertheless readily accepted the benefits arising therefrom;3. The company has been complying with the check-off provision of the CBA and has been remitting the union dues to UKCEU-PTGWO4. The company has already implement the decision of November 13, 1986 insofar as the regularization of contractual employees who have rendered more than one (1) year of service as of the filing of the Notice of Strike on May 7, 1986 and are not engaged in janitorial and yard maintenance work, are concerned5. Rank Manpower Company had already pulled out, reassigned or replaced the contractual employees engaged in janitorial and yard maintenance work, as well as those with less than one year service; and6. The company has reinstated Roque Jimenez as of January 11, 1987.In G.R. No. 78791, the records21disclose that on May 4, 1987, KILUSAN-OLALIA filed another notice of strike with the Bureau of Labor Relations charging respondent company with unfair labor practices. On May 8, 1987, the bureau dismissed and considered the said notice as not filed by reason of the pendency of the representation issue before this Court in G.R. No. 77629. KILUSAN-OLALIA moved to reconsider said order, but before the bureau could act on said motion, KILUSAN-OLALIA declared a strike and established a picket on respondent company's premises in San Pedro, Laguna on May 17, 1987.On May 18, 1987, KIMBERLY filed a petition for injunction with the National Labor Relations Commission (NLRC), docketed as Injunction Case No. 1442. A supplement to said petition was filed on May 19, 1987. On May 26, 1987, the commissionen bancissued a temporary restraining order (TRO) on the basis of the ocular inspection report submitted by the commission's agent, the testimonies of KIMBERLY's witnesses, and pictures of the barricade. KILUSAN-OLALIA moved to dissolve the TRO on the ground of lack of jurisdiction.Immediately after the expiration of the first TRO on June 9, 1987, the striking employees returned to their picket lines and reestablished their barricades at the gate. On June 19, 1987, the commissionen bancissued a second TRO.On June 25, 1987, KILUSAN-OLALIA filed another petition forcertiorariand prohibition with this Court, docketed as G.R. No. 78791, questioning the validity of the temporary restraining orders issued by the NLRC on May 26, 1987 and June 19, 1987. On June 29, 1987, KILUSAN-OLALIA filed in said case an urgent motion for a TRO to restrain NLRC from implementing the questioned orders. An opposition, as well as a reply thereto, were filed by the parties.Meanwhile, on July 3, 1987, KIMBERLY filed in the NLRC an urgent motion for the issuance of a writ of preliminary injunction when the strikers returned to the strike area after the second TRO expired. After due hearing, the commission issued a writ of preliminary injunction on July 14, 1987, after requiring KIMBERLY to post a bond in the amount of P20,000.00.Consequently, on July 17, 1987, KILUSAN-OLALIA filed in G.R. No. 78791 a second urgent motion for the issuance of a TRO by reason of the issuance of said writ of preliminary injunction, which motion was opposed by KIMBERLY.Thereafter, in its memorandum22filed on December 28, 1989 and in its motion for early resolution23filed on February 28, 1990, both in G.R. No. 78791, KILUSAN-OLALIA alleged that it had terminated its strike and picketing activities and that the striking employees had unconditionally offered to return to work, although they were refused admission by KIMBERLY. By reason of this supervening development, the petition in G.R. No. 78791, questioning the propriety of the issuance of the two temporary restraining orders and the writ of injunction therein, has been rendered moot and academic.In G.R. No. 77629, the petition of KILUSAN-OLALIA avers that the respondent Secretary of Labor and/or the former Minister of Labor have acted with grave abuse of discretion and/or without jurisdiction in (1) ruling on the issue of bargaining representation and declaring respondent UKCEU-PTGWO as the collective bargaining representative of all regular rank-and-file employees of the respondent company; (2) holding that petitioners are not entitled to vote in the certification election; (3) considering the regularization of petitioners (who are not janitors and maintenance employees) to be effective only on the date of the disputed decision; (4) declaring petitioners who are assigned janitorial and yard maintenance work to be employees of respondent RANK and not entitled to be regularized; (5) not awarding to petitioners differential pay arising out of such illegal work scheme; and (6) ordering the mere reinstatement of petitioner Jimenez.The issue of jurisdiction actually involves a question of whether or not former Minister Sanchez committed a grave abuse of discretion amounting to lack of jurisdiction in declaring respondent UKCEU-PTGWO as the certified bargaining representative of the regular employees of KIMBERLY, after ruling that the 64 casual workers, whose votes are being challenged, were not entitled to vote in the certification election.KILUSAN-OLALIA contends that after finding that the 64 workers are regular employees of KIMBERLY, Minister Sanchez should have remanded the representation case to the med-arbiter instead of declaring UKCEU-PTGWO as the winner in the certification election and setting aside the med-arbiter's order which allowed the 64 casual workers to cast their votes.Respondents argue that since the issues of regularization and representation are closely interrelated and that a resolution of the former inevitably affects the latter, it was necessary for the former labor minister to take cognizance of the representation issue; that no timely motion for reconsideration or appeal was made from his decision of November 13, 1986 which has become final and executory; and that the aforesaid decision was impliedly accepted by KILUSAN-OLALIA when it demanded from KIMBERLY the issuance of regular appointments to its affected members in compliance with said decision, hence petitioner employees are now stopped from questioning the legality thereof.We uphold the authority of former Minister Sanchez to assume jurisdiction over the issue of the regularization of the 64 casual workers, which fact is not even disputed by KILUSAN-OLALIA as may be gleaned from its request for an interim order in the notice of strike case (BLR-NS-5-164-86), asking that the regularization issue be immediately resolved. Furthermore, even the med-arbiter who ordered the holding of the certification election refused to resolve the protest on the ground that the issue raised therein correctly pertains to the jurisdiction of the then labor minister. No opposition was offered by KILUSAN-OLALIA. We hold that the issue of regularization was properly addressed to the discretion of said former minister.However, the matter of the controverted pronouncement by former Minister Sanchez, as reaffirmed by respondent secretary, regarding the winner in the certification election presents a different situation.It will be recalled that in the certification election, UKCEU-PTGWO came out as the winner, by garnering a majority of the votes cast therein with the exception of 64 ballots which were subject to challenge. In the protest filed for the opening and counting of the challenged ballots, KILUSAN-OLALIA raised the main and sole question of regularization of the 64 casual workers. The med-arbiter refused to act on the protest on the ground that the issue involved is within the jurisdiction of the then Minister of Labor. KILUSAN-OLALIA then sought an interim order for an early resolution on the employment status of the casual workers, which was one of the issues included in the notice of strike filed by KILUSAN-OLALIA in BLR Case No. NS-5-164-86. Consequently, Minister Sanchez rendered the questioned decision finding that the workers not engaged in janitorial and yard maintenance service are regular employees but that they became regular only on the date of his decision, that is, on November 13, 1986, and, therefore, they were not entitled to vote in the certification election. On the basis of the results obtained in the certification election, Minister Sanchez declared UKCEU-PTGWO as the winner.The pivotal issue, therefore, is when said workers, not performing janitorial or yard maintenance service, became regular employees of KIMBERLY.We find and so hold that the former labor minister gravely abused his discretion in holding that those workers not engaged in janitorial or yard maintenance service attained the status of regular employees only on November 13, 1986, which thus deprived them of their constitutionally protected right to vote in the certification election and choose their rightful bargaining representative.The Labor Code defines who are regular employees, as follows:Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary not withstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or under the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph:Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.The law thus provides for two. kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The individual petitioners herein who have been adjudged to be regular employees fall under the second category. These are the mechanics, electricians, machinists machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing of the Petition for certification election by KILUSAN-OLALIA.Owing to their length of service with the company, these workers became regular employees, by operation of law, one year after they were employed by KIMBERLY through RANK. While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual worker on the day immediately after the end of his first year of service. To rule otherwise, and to instead make their regularization dependent on the happening of some contingency or the fulfillment of certain requirements, is to impose a burden on the employee which is not sanctioned by law.That the first stated position is the situation contemplated and sanctioned by law is further enhanced by the absence of a statutory limitation before regular status can be acquired by a casual employee. The law is explicit. As long as the employee has rendered at least one year of service, he becomes a regular employee with respect to the activity in which he is employed. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.The submission that the decision of November 13, 1986 has become final and executory, on the grounds that no timely appeal has been made therefrom and that KILUSAN-OLALIA has impliedly acceded thereto, is untenable.Rule 65 of the Rules of Court allows original petitions forcertiorarifrom decisions or orders of public respondents provided they are filed within a reasonable time. We believe that the period from January 9, 1987, when the motions for reconsideration separately filed by KILUSAN-OLALIA and KIMBERLY were denied, to March 16, 1987, when the petition in G.R. No. 77629 was filed, constitutes a reasonable time for availing of such recourse.We likewise do not subscribe to the claim of respondents that KILUSAN-OLALIA has impliedly accepted the questioned decision by demanding compliance therewith. In the letter of KILUSAN-OLALIA dated November 24, 198624addressed to the legal counsel of KIMBERLY, it is there expressly and specifically pointed out that KILUSAN-OLALIA intends to file a motion for reconsideration of the questioned decision but that, in the meantime, it was demanding the issuance of regular appointments to the casual workers who had been declared to be regular employees. The filing of said motion for reconsideration of the questioned decision by KILUSAN-OLALIA, which was later denied, sustains our position on this issue and denies the theory of estoppel postulated by respondents.On the basis of the foregoing circumstances, and as a consequence of their status as regular employees, those workers not perforce janitorial and yard maintenance service were performance entitled to the payment of salary differential, cost of living allowance, 13th month pay, and such other benefits extended to regular employees under the CBA, from the day immediately following their first year of service in the company. These regular employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently, the votes cast by those employees not performing janitorial and yard maintenance service, which form part of the 64 challenged votes, should be opened, counted and considered for the purpose of determining the certified bargaining representative.We do not find it necessary to disturb the finding of then Minister Sanchez holding as legal the service contract executed between KIMBERLY and RANK, with respect to the workers performing janitorial and yard maintenance service, which is supported by substantial and convincing evidence. Besides, we take judicial notice of the general practice adopted in several government and private institutions and industries of hiring a janitorial service on an independent contractor basis. Furthermore, the occasional directives and suggestions of KIMBERLY are insufficient to erode primary and continuous control over the employees of the independent contractor.25Lastly, the duties performed by these workers are not independent and integral steps in or aspects of the essential operations of KIMBERLY which is engaged in the manufacture of consumer paper products and cigarette paper, hence said workers cannot be considered regular employees.The reinstatement of Roque Jimenez without backwages involves a question of fact best addressed to the discretion of respondent secretary whose finding thereon is binding and conclusive upon this Court, absent a showing that he committed a grave abuse in the exercise thereof.WHEREFORE, judgment is hereby rendered in G.R. No. 77629:1. Ordering the med-arbiter in Case No. R04-OD-M-4-15-86 to open and count the 64 challenged votes, and that the union with the highest number of votes be thereafter declared as the duly elected certified bargaining representative of the regular employees of KIMBERLY;2. Ordering KIMBERLY to pay the workers who have been regularized their differential pay with respect to minimum wage, cost of living allowance, 13th month pay, and benefits provided for under the applicable collective bargaining agreement from the time they became regular employees.All other aspects of the decision appealed from, which are not so modified or affected thereby, are hereby AFFIRMED. The temporary restraining order issued in G.R. No. 77629 is hereby made permanent.The petition filed in G.R. No. 78791 is hereby DISMISSED.SO ORDERED.Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concur.Footnotes

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 151981 December 1, 2003DIAMOND MOTORS CORPORATION,petitioner,vs.COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION and AGRIPINO C. CADAO,respondents.YNARES-SANTIAGO,J.:This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No. 63143,1which affirmed the decision and resolution2of the National Labor Relations Commission dated October 27, 2000 and December 28, 2001, respectively.The facts are as follows:Petitioner Diamond Motors Corporation hired respondent Agripino C. Cadao on May 17, 1989 and subsequently appointed him Special Accounts Manager in 1993 with a fixed monthly salary excluding commission for every car sold. His tasks included the promotion and sale of Mitsubishi vehicles to precisely listed corporate clients on fleet basis. Units purchased by fleet sale are usually lower by an average amount of P5,000.00 than those bought on retail. The transactions are usually done through letters of intent or purchase orders submitted by the client.3TAPE, Inc. is one of petitioners clients on a fleet sale basis. On July 1, 1994, its purchasing officer and Executive Secretary to the President, Esper Reate, sent a letter of intent to respondent confirming an order for one unit of a 1994 Mitsubishi Lancer EL at P363,000.00, to be registered in the name of Ruth Racela. On July 28, 1994, two other letters of the same tenor were sent to the respondent confirming the orders for two Mitsubishi Lancer GLI 1300 to be registered in the names of Josefina Antonio and Federico de Joya, respectively.4TAPE, Inc. subsequently sent Purchase Order No. 001508 to petitioner for the three units amounting to P1,213,000.00. Petitioner investigated the said transaction through its Finance and Insurance Operations Manager, Ms. Santa T. Vargas. The latter found out that, with the exception of Ruth Racela, the two other customers were not employees of TAPE, Inc. or its sister corporation, M-Zet. Therefore, the production companies manifested that they will not pay for the purchase orders.The report further noted that P.O. No. 001508 was 84 sheets ahead from the purchase order then in use, P.O. No. 001424; and that Esper Reate was not the authorized signatory for the purchases considering that only Mr. Antonio Tuviera as the President of TAPE, Inc., or, in his absence, Ms. Leslie Dionisio, AVP for Administration, can sign for them.On September 3, 1994, respondent received a memorandum dated August 31, 1994 from petitioner, asking him to explain the misrepresentation he committed in favor of the three customers. In addition, he was accused by petitioner of dishonesty and deceit in the conduct of said sale.Respondent, on the same day, submitted his written explanation in answer to the allegations. On September 8, 1994, petitioner terminated the services of respondent.On February 2, 1995, private respondent filed a complaint for illegal dismissal with prayer for the payment of earned salary, commission and other accrued benefits against the petitioner before the National Labor Relations Commission. On April 2, 1998, the Labor Arbiter dismissed the complaint for lack of merit.Aggrieved, private respondent appealed to the National Labor Relations Commission which reversed the decision of the Labor Arbiter and declared his dismissal illegal. Respondent was awarded separation pay plus backwages. Petitioner filed a motion for reconsideration but the same was denied.Petitioner filed a petition for review with the Court of Appeals,5contending that the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it reversed the decision of the Labor Arbiter. Petitioner maintained that respondents dismissal was for a valid cause pursuant to Article 282 of the Labor Code and jurisprudence; and that because of his misrepresentation and deception it suffered losses in the total sum of P115,000.00 corresponding to the differences between the regular and fleet prices of the units sold.The Appellate Court dismissed the petition and affirmed the decision of the NLRC. Hence, this petition for review raising the following errors:I. THAT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT, PETITIONER FAILED TO SUBSTANTIATE ITS CLAIM OF DISHONESTY AND LOSS OF CONFIDENCE AGAINST PRIVATE RESPONDENT AGRIPINO CADAO;II. THAT SAID DECISION OF THE HONORABLE COURT OF APPEALS AND THE NATIONAL LABOR RELATIONS COMMISSION WERE PREMISED IN THE ABSENCE OF EVIDENCE BUT SUCH FINDINGS ARE CONTRADICTED BY THE EVIDENCE ON RECORD; AND THAT THE SAME HAVE BEEN MADE WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION OR IN EXCESS OF JURISDICTION;III. THAT THE PUBLIC RESPONDENT FAILED TO OBSERVE THE PRINCIPLE OFSTARE DECISIS;IV. WHAT KIND OF EVIDENCE IS REQUIRED TO PROVE THE GUILT OF AN EMPLOYEE IN LABOR CASES? IS IT MERE PREPONDERANCE OF EVIDENCE OR PROOF BEYOND REASONABLE DOUBT?6We find merit in the petition.A disharmony between the factual findings of the Labor Arbiter and the National Labor Relations Commission opens the door to a review thereof by this Court.7Factual findings of administrative agencies are not infallible and will be set aside when they fail the test of arbitrariness. Moreover, when the findings of the National Labor Relations Commission contradict those of the labor arbiter, this Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned findings.8In the case at bar, we find that private respondent was not illegally dismissed. In his decision, the Labor Arbiter ruled that based on the evidence adduced by the parties, respondent knowingly violated company rules and regulations. There was also a clear taint of deceit on his part when he passed off what was otherwise a retail sale as a fleet sale.9Indeed, respondent cannot deny that at the time he was negotiating what he claimed to be a fleet sale to TAPE, Inc., he already knew that the would-be end users are not employees of TAPE, Inc. This is shown by Check Voucher No. 004297 dated August 15, 1994 issued by M-ZET in favor of Ruth Racela, two days ahead of the Purchase Order issued by TAPE, Inc. on August 17, 1994,10which means that before TAPE, Inc. prepared and issued the purchase order, respondent already knew that Ruth Racela was an M-ZET employee, otherwise the latter would not have prepared and issued the corresponding check if there was no assurance of a fleet sale by him to the company.11We reiterate the rule under Article 282(c) of the Labor Code, which states that an employer can terminate the employment of the employee concerned for "fraud or willful breach by an employee of the trust reposed in him by his employer or duly authorized representative." The loss of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.12Moreover, we have laid down the guidelines for the application of the doctrine of loss of confidence in the case ofConcorde Hotel v. Court of Appeals,13i.e., (a) the loss of confidence should not be simulated; (b) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (c) it should not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (d) it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.Respondent claims that at the time of the purchase, there was a promotional program by petitioner on its units so that the promotional price of the same were as follows:UNITRegular PricePromotional Price

Mitsubishi EL 1300P 396, 000.00P 363, 000.00

Mitsubishi Gli 1300465, 000.00425, 000.00

Mitsubishi GLXi521, 000.00486, 000.0014

He maintains that it was the promotional price that he quoted to the buyers and which the latter paid to petitioner without any further discount as in fleet sales; hence, no disadvantage was caused to petitioner since the promotional price is open to any client.15We are not persuaded.The fact that petitioner failed to show it suffered losses in revenue as a consequence of private respondents questioned act is immaterial. The fact that respondent attempted to deprive petitioner of its lawful revenue is tantamount to fraud against the company, which warrants dismissal from the service.16Finally, we hold that the Court of Appeals erred in declaring that there was nothing in the letters of intent, purchase orders and checks submitted which would lead petitioner to doubt or suspect that said documents were accomplished through fraud. In the first place, the same were signed by TAPE Inc.s Purchasing Officer and Executive Secretary to the President Ms. Esper Reate, who is not an authorized signatory. It is only Mr. Antonio Tuviera, TAPE Inc. President, or in his absence, Ms. Leslie Dionisio, its Assistant Vice President for Administration, who can duly sign.Secondly, respondent was not able to explain the use of a purchase order not belonging to the series currently in use at the time the transaction took place.In fine, we find that the foregoing constitute substantial evidence to support the conclusion that respondents dismissal was just and legal. Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.17The evidence relied upon by the Court of Appeals in affirming the NLRCs decision failed to establish the fact that respondent was illegally dismissed.WHEREFORE, in view of the foregoing, the instant petition for review isGRANTED. The Decision of the Court of Appeals dated October 18, 2001 and the Resolution dated January 25, 2002 in CA-G.R. SP No. 63143 which affirmed the decision and resolution of the National Labor Relations Commission dated October 27, 2000 and December 28, 2001, respectively areREVERSEDandSET ASIDE. The decision dated April 2, 1998 of Labor Arbiter Jose G. De Vera in NLRC-NCR Case No. 00-02-01363-95, dismissing respondents complaint for illegal dismissal for lack of merit, isREINSTATED.SO ORDERED.Davide, Jr., C.J., Panganiban, Carpio, and Azcuna, JJ.,concur.

Footnotes

THIRD DIVISION[G.R. No. 146118.October 8, 2003]SAMUEL SAMARCA,petitioner, vs.ARC-MEN INDUSTRIES, INC.,respondent.D E C I S I O NSANDOVAL-GUTIERREZ,J.:This is a petition for review oncertiorariunder Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to nullify and set aside the Decision[1]dated May 22, 2000 and Resolution[2]dated November 8, 2000 of the Court of Appeals in CA-G.R. SP No. 54028, entitled Arc-Men Industries, Inc. vs. National Labor Relations Commission (Fifth Division) and Samuel Samarca.The undisputed facts of this case are as follows:On March 8, 1981, Samuel Samarca (herein petitioner) was employed as a laborer by Arc-Men Industries, Inc. (herein respondent).Eventually, petitioner was assigned as a machine operator at respondents white plastic plant where he receivedP130.00 a day or in its loose bonding plant with a daily salary ofP138.00.On September 26, 1993, petitioner filed an application for an emergency leave of absence on account of his sons hospitalization for acute gastroenteritis.Upon his return for work on September 29, 1993, petitioner was immediately served with a notice of respondents order suspending him for thirty (30) days effective September 30 to October 30, 1993 for alleged violation of company Rules and Regulations, particularly Rule No. 17[3]and Rule No. 25.[4]Feeling aggrieved, petitioner filed with the Regional Arbitration Branch No. XI at Davao City a complaint for illegal suspension against respondent and its owner, Arcadio P. Mendoza, docketed as NLRC Case No. RAB-11-10-00828-93.During the pendency of this complaint or on October 30, 1993, petitioners 30-day suspension ended.Consequently, respondent, in a letter dated November 5, 1993, directed petitioner to report for work immediately.However, he refused, prompting respondent, on November 11, 1993, to send him a Notice to Terminate, directing him to submit, within five (5) days, a written explanation why he should not be dismissed from the service for abandonment of work.For his part, petitioner submitted to respondent a letter-reply explaining that because of the pendency of his complaint for illegal suspension with the Labor Arbiter, he could not report for work.Respondent, finding that the petitioner failed to submit a sufficient written explanation, decided to terminate his services effective October 31, 1993viaa notice of termination dated November 23, 1993.On November 24, 1993, petitioner filed an amended complaint for illegal dismissal.On March 29, 1994, the Labor Arbiter rendered a Decision[5]declaring the dismissal of petitioner for cause and upholding its validity, thus:WHEREFORE, in view of all the foregoing, judgment is hereby rendered DISMISSING the above-entitled case for lack of merit and declaring the dismissal of complainant as valid and for cause.Complainant is, however, entitled to his proportionate 13thmonth pay for 1993, subject to computation by respondent AMII.SO ORDERED.On appeal, the National Labor Relations Commission (NLRC), in a Resolution[6]dated August 21, 1995, reversed and set aside the Labor Arbiters Decision, ordering respondent to reinstate petitioner to his former position without loss of seniority rights and to pay his backwages from the date of dismissal up to his actual reinstatementbut limited to a maximum period of three (3) years.The NLRC held:Now brought to focus is the instant complaint for illegal dismissal where respondents bear the burden of proving that it was for just cause.For in labor law determinations, the employer shoulders the burden of proof to show that the dismissal is valid and legal.(Manggagawa ng Komunikasyon ng Pilipinas vs. NLRC, 194 SCRA 573).We note that respondents, in their notice to terminate dated November 11, 1993, gave complainant five (5) days to show cause why he should not be terminated from employment on the ground of abandonment of work. (Records, Vol. 1, p. 39).In a reply thereto, complainant informed respondents he had filed a case of illegal suspension against them with the NLRC.Consequently, respondents served complainant a notice of termination dated November 23, 1994 notifying the latter that effective October 31, 1993 he was deemed to have abandoned his work and as of that date was considered terminated.Accordingly, on November 24, 1994, complainant amended his complaint from illegal suspension to illegal dismissal.Respondents defense of abandonment must fail.It is belied by the fact that complainant had instituted the complaint for illegal dismissal the day after he was dismissed.It would be illogical for him to leave his job and later on file said complaint.Clearly, there is no showing that complainant deliberately refused to continue his employment without a justifiable reason. Complainant initially instituted a complaint for illegal suspension wherein he prayed for backwages as he thought he was illegally suspended from work.We can not readily infer abandonment even if sometime during the pendency of the previous case he refused to heed the warning given by respondent while believing that he was suspended through no fault of his.Considering the circumstances of this case, We hold that complainant is entitled to reinstatement with backwages as it is clearly established that he did not abandon his work, in the absence of clear and deliberate intent to discontinue his employment without returning back.He was only compelled to leave the premises when he was ordered suspended and which suspension he had promptly questioned.Respondent filed a motion for reconsideration but was denied with finality by the NLRC in a Resolution[7]dated April 19, 1996.On May 13, 1996, respondent filed with this Court a petition for certiorari. In a Resolution dated June 23, 1999, this Court referred the petition for disposition to the Court of Appeals.On May 22, 2000, the Court of Appeals rendered a Decision reversing the Resolutions of the NLRC and reinstating the Decision of the Labor Arbiter. In sustaining the validity and legality of petitioners termination from employment, the Appellate Court made the following pronouncements:We agree with the petitioner and the OSG that the public respondent gravely abused its discretion when it ordered the reinstatement of the private respondent and the payment of backwages, for the following reasons:Firstly, there was just cause for terminating the employment of the private respondent under Article 282 of the Labor Code, which states that an employer may terminate an employment for serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with this work, as well as for causes analogous thereto.In the instant case, the private respondent failed to report to work after the expiration of his 30-day suspension. Even after the petitioner formally advised him to resume working five (5) days later, the private respondent still refused to go back to work.After the petitioner sent a Notice to Terminate to the private respondent on November 11, 1993, the latter wrote on the said notice that he has already questioned his alleged illegal suspension before the labor arbiter, and that the petitioner should report immediately to its company attorney about the second hearing.x x xSecondly, the contention of the respondents that the private respondent cannot be deemed to have abandoned his work in light of his immediate filing of a case for illegal dismissal cannot be sustained.We are aware of such ruling of the Supreme Court that the filing of the complaint for illegal dismissal negates the charge of abandonment.However, we are of the view that such doctrine must be taken into consideration with the other factors present in each case.x x xIn contrast, in the case at bar, except for his amendment of his complaint for illegal suspension to illegal dismissal, the private respondent committed no other overt actions indicating his desire to return back to work.We hold that both elements constituting abandonment are present, considering the absence of the private respondent from his place of employment after the expiration of his suspension without any explanation or application for leave, and his subsequent refusal to go back to work.It should be emphasized that private respondent was given several opportunities by the petitioner to explain his continuing absences, but he did not.He did not give any reason for his absence when he was ordered to resume working on November 5, 1993.He did not explain in writing why he should not be terminated for abandonment of work after having received a Notice to Terminate dated November 11, 1993.If he thought that his returning to work would jeopardize his case for illegal suspension, he could have informed the petitioner about such thinking, or he could have requested for an investigation regarding the charge of abandonment.But he did not.Moreover, a co-worker has reported that the private respondent expressed to him the latters intention not to return to work anymore. Such consistent, overt acts are manifestations of a lack of interest to report back to work.x x x.On June 27, 2000, petitioner filed a motion for reconsideration but was denied in a Resolution dated November 8, 2000.Hence, this petition for review on certiorari.Petitioner contends that respondent failed to prove that he abandoned his work; and that the Court of Appeals and the Labor Arbiter erred in considering his alleged insubordination and/or willful disobedience as valid causes for his dismissal from the service inasmuch as respondents reason for dismissing him is abandonment.As an overture, clear and unmistakable is the rule that this Court is not a trier of facts.[8]Just as well entrenched is the doctrine that it is not the function of this Court to assess and evaluate the facts and the evidence all over again, our jurisdiction being generally limited to reviewing errors of law that might have been committed by the appellate court.Nevertheless, since the factual findings of the Court of Appeals are at variance with those of the NLRC, we are compelled to review the records presented in both the Court of Appeals and the said labor tribunal.[9]We agree with petitioner that respondent has failed to substantiate its claim that he abandoned his work and that, therefore, the termination of his services is an unlawful sanction.Jurisprudence holds that for abandonment of work to exist, it is essential (1) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Deliberate and unjustified refusal on the part of the employee to go back to his work post and resume his employment must be established.Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore.And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer.[10]We hold that the above twin essential requirements for abandonment to exist are not present in the case at bar.Petitioners absence is not without a justifiable reason.It must be recalled that upon receipt of the Notice to Terminate by reason of abandonment, petitioner sent respondent a letter explaining that he could not go back to work because of the pendency of his complaint for illegal suspension.And immediately after he was dismissed for "abandonment of work", he lost no time to amend his complaint to illegal dismissal.This alone negates any intention on his part to forsake his work.It is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with the charge of abandonment, for an employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work.[11]Moreover, we find no indication that petitioner has shown by some overt acts his intention to sever the employer-employee relationship.The affidavit of Sergio L. Moreno stating that petitioner expressed his intention not to report for work anymore is plain hearsay.We are aware of the schemes employed by employers to extract favorable statements from their employees and entice them to testify in their favor for some financial considerations or promises.Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts.To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship.Clearly, the operative act is still the employees ultimate act of putting an end to his employment.Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work.Even the failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment nor does it bar reinstatement,[12]as correctly held by the NLRC.Finally, as prudently observed by the NLRC, it was unlikely that petitioner had abandoned his job for no reason at all considering the hardship of the times.To reiterate, if petitioner had truly forsaken his job, he would not have bothered to file an amended complaint for illegal dismissal against respondent and prayed for reinstatement.In sum, we find that petitioner did not abandon his job but was illegally dismissed by respondent.An employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges as well as to his full backwages, inclusive of allowances, and to other benefits or their monetary equivalentcomputed from the time his compensation was withheld from him up to the time of his actual reinstatement.[13]However, the circumstances obtaining in this case do not warrant the reinstatement of petitioner.Antagonism caused a severe strain in the relationship between him and respondent.A more equitable disposition would be an award of separation pay equivalent to one (1) month's pay for every year of service.(This is in addition to his full backwages, allowances and other benefits).WHEREFORE, the petition is GRANTED.The Decision dated May 22, 2000 and Resolution dated November 8, 2000 of the Court of Appeals are hereby REVERSED and SET ASIDE. The Resolution dated August 21, 1995 of the NLRC is AFFIRMED with MODIFICATION in the sense that respondent is hereby ordered to pay petitioner (1) his separation pay (in lieu of his reinstatement) equivalent to one month pay for every year of service; and (2) his full backwages inclusive of allowances and other benefits or their monetary equivalent from his dismissal up to the time of his supposed actual reinstatement.SO ORDERED.Puno, J., (Chairman), Panganiban,andCarpio-Morales, JJ.,concur.Corona, J., on leave.

[1]Annex R, Petition for Review,Rolloat 144-152.[2]Annex T,id.at 167.[3]Making false, vicious and malicious utterances or statements, prejudicial to the company, its business, officers and employees.[4]Failure or refusal to cooperate in any manner feasible with any superior or fellow employee in the performance of the latters duty.[5]Annex J, Petition for Review,Rolloat 56-64.[6]Annex M,id.at 82-89.[7]Annex O,id.at 99-100.[8]JMM Promotions and Management Inc.vs. CA, G.R. No. 139401, October 2, 2002.[9]SeeAnflo Management and Investment Corpvs. Rodolfo Bolanio, G.R. No. 141608, October 4, 2002.[10]MSMG-UWPvs. Ramos, G.R. No. 113907, February 28, 2000, 326 SCRA 428.[11]KAMS International, Inc.vs. NLRC, G.R. No. 128806, September 28, 1999, 315 SCRA 316.Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 80609 August 23, 1988PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,petitioner,vs.THE NATIONAL LABOR RELATIONS COMMISSION and MARILYN ABUCAY,respondents.Nicanor G. Nuevas for petitioner.CRUZ,J.:The only issue presented in the case at bar is the legality of the award of financial assistance to an employee who had been dismissed for cause as found by the public respondent.Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation.1Investigated and heard, she was found guilty as charged and accordingly separated from the service.2She went to the Ministry of Labor and Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive portion of labor arbiter's decision declared:WHEREFORE, the instant complaint is dismissed for lack of merit.Considering that Dr. Helen Bangayan and Mrs. Consolacion Martinez are not totally blameless in the light of the fact that the deal happened outhide the premises of respondent company and that their act of giving P3,800.00 without any receipt is tantamount to corruption of public officers, complainant must be given one month pay for every year of service as financial assistance.3Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said decisionin totoand dismissed the appeals.4The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the affirmance of the above- quoted award as having been made with grave abuse of discretion.In its challenged resolution of September 22, 1987, the NLRC said:... Anent the award of separation pay as financial assistance in complainant's favor, We find the same to be equitable, taking into consideration her long years of service to the company whereby she had undoubtedly contributed to the success of respondent. While we do not in any way approve of complainants (private respondent) mal feasance, for which she is to suffer the penalty of dismissal, it is for reasons of equity and compassion that we resolve to uphold the award of financial assistance in her favor.5The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring corruption.For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa6and Soco v. Mercantile Corporation of Davao,7where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of social and compassionate justice. As the Court put it in the Firestone case:In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that the NLRC acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had worked with the company for eleven years with no known previous bad record, the ends of social and compassionate justice would be served if he is paid full separation pay but not reinstatement without backwages by the NLRC.In the said case, the employee was validly dismissed for theft but the NLRC nevertheless awarded him full separation pay for his 11 years of service with the company. In Soco, the employee was also legally separated for unauthorized use of a company vehicle and refusal to attend the grievance proceedings but he was just the same granted one-half month separation pay for every year of his 18-year service.Similar action was taken in Filipro, Inc. v. NLRC,8where the employee was validly dismissed for preferring certain dealers in violation of company policy but was allowed separation pay for his 2 years of service. In Metro Drug Corporation v. NLRC,9the employee was validly removed for loss of confidence because of her failure to account for certain funds but she was awarded separation pay equivalent to one-half month's salary for every year of her service of 15 years. In Engineering Equipment, Inc. v. NLRC,10the dismissal of the employee was justified because he had instigated labor unrest among the workers and had serious differences with them, among other grounds, but he was still granted three months separation pay corresponding to his 3-year service. In New Frontier Mines, Inc. v. NLRC,11the employee's 3- year service was held validly terminated for lack of confidence and abandonment of work but he was nonetheless granted three months separation pay. And in San Miguel Corporation v. Deputy Minister of Labor and Employment, et al .,12full separation pay for 6, 10, and 16 years service, respectively, was also allowed three employees who had been dismissed after they were found guilty of misappropriating company funds.The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation pay.13The cases above cited constitute the exception, based upon considerations of equity. Equity has been defined as justice outside law,14being ethical rather than jural and belonging to the sphere of morals than of law.15It is grounded on the precepts of conscience and not on any sanction of positive law.16Hence, it cannot prevail against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay.Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article devoted to the promotion of social justice and human rights with a separate sub- topic for labor. Article XIII expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national economy and the welfare of the people in general. The categorical man