Labstandlaw - Part 6

8/10/2019 Labstandlaw - Part 6

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[LABOR] July 24, 2014

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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 114337 September 29, 1995

NITTO ENTERPRISES, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.

KAPUNAN, J .:

This petition for certiorariunder Rule 65 of the Rules of Court seeking to annul the decision

1

rendered by publicrespondent National Labor Relations Commission, which reversed the decision of the Labor Arbiter.

Briefly, the facts of the case are as follows:

Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum products, hired Roberto Capilisometime in May 1990 as an apprentice machinist, molder and core maker as evidenced by an apprenticeshipagreement

2for a period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate ofP66.75 which was 75% of the applicable minimum wage.

At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of glass which he was workingon, accidentally hit and injured the leg of an office secretary who was treated at a nearby hospital.

Later that same day, after office hours, private respondent entered a workshop within the office premises whichwas not his work station. There, he operated one of the power press machines without authority and in the processinjured his left thumb. Petitioner spent the amount of P1,023.04 to cover the medication of private respondent.

The following day, Roberto Capili was asked to resign in a letter3which reads:

August 2, 1990Wala siyang tanggap ng utos mula sa superbisor at wala siyang experiensa kung papaano gamitinand "TOOL" sa pagbuhat ng salamin, sarili niyang desisyon ang paggamit ng tool at maydisgrasya at nadamay pa ang isang sekretarya ng kompanya.Sa araw ding ito limang (5) minute ang nakakalipas mula alas-singko ng hapon siya ay pumasoksa shop na hindi naman sakop ng kanyang trabaho. Pinakialaman at kinalikot ang makina atnadisgrasya niya ang kanyang sariling kamay.

Nakagastos ang kompanya ng mga sumusunod:Emergency and doctor fee P715.00Medecines (sic) and others 317.04

Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod hanggang matanggal ang tahi ngkanyang kamay.Tatanggapin niya ang sahod niyang anim na araw, mula ika-30 ng Hulyo at ika-4 ng Agosto, 1990.Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal ng tahi ng kanyang kamay,pagkatapos ng siyam na araw mula ika-2 ng Agosto.Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang kanyang resignasyon, kasama ngkanyang comfirmasyon at pag-ayon na ang lahat sa itaas ay totoo.Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng ito ay aking pagkakasala sa hindipagsunod sa alintuntunin ng kompanya.

(Sgd.) Roberto Capili

Roberto Capili

On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for and inconsideration of the sum of P1,912.79.

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Three days after, or on August 6, 1990, private respondent formally filed before the NLRC Arbitration Branch,National Capital Region a complaint for illegal dismissal and payment of other monetary benefits.

On October 9, 1991, the Labor Arbiter rendered his decision finding the termination of private respondent as validand dismissing the money claim for lack of merit. The dispositive portion of the ruling reads:

WHEREFORE, premises considered, the termination is valid and for cause, and the money claims

dismissed for lack of merit.


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The respondent however is ordered to pay the complainant the amount of P500.00 as financialassistance.

SO ORDERED.5

Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of Roberto Capilian was valid. First,

private respondent who was hired as an apprentice violated the terms of their agreement when he acted with grossnegligence resulting in the injury not only to himself but also to his fellow worker. Second, private respondent hadshown that "he does not have the proper attitude in employment particularly the handling of machines withoutauthority and proper training.

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On July 26, 1993, the National Labor Relations Commission issued an order reversing the decision of the LaborArbiter, the dispositive portion of which reads:

WHEREFORE, the appealed decision is hereby set aside. The respondent is hereby directed toreinstate complainant to his work last performed with backwages computed from the time hiswages were withheld up to the time he is actually reinstated. The Arbiter of origin is herebydirected to further hear complainant's money claims and to dispose them on the basis of law andevidence obtaining.

SO ORDERED.7

The NLRC declared that private respondent was a regular employee of petitioner by ruling thus:

As correctly pointed out by the complainant, we cannot understand how an apprenticeshipagreement filed with the Department of Labor only on June 7, 1990 could be validly used by theLabor Arbiter as basis to conclude that the complainant was hired by respondent as a plain"apprentice" on May 28, 1990. Clearly, therefore, the complainant was respondent's regularemployee under Article 280 of the Labor Code, as early as May 28,1990, who thus enjoyed thesecurity of tenure guaranteed in Section 3, Article XIII of our 1987 Constitution.

The complainant being for illegal dismissal (among others) it then behooves upon respondent,pursuant to Art. 227(b) and as ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of complainant was for a valid cause.Absent such proof, we cannot but rule that the complainant was illegally dismissed.

8

On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only private respondent'srepresentative was present.

On April 22, 1994, a Writ of Execution was issued, which reads:

NOW, THEREFORE, finding merit in [private respondent's] Motion for Issuance of the Writ, youare hereby commanded to proceed to the premises of [petitioner] Nitto Enterprises and JovyFoster located at No. l 74 Araneta Avenue, Portero, Malabon, Metro Manila or at any other places

where their properties are located and effect the reinstatement of herein [private respondent] to hiswork last performed or at the option of the respondent by payroll reinstatement.

You are also to collect the amount of P122,690.85 representing his backwages as called for in thedispositive portion, and turn over such amount to this Office for proper disposition.

Petitioner filed a motion for reconsideration but the same was denied.

Hence, the instant petition for certiorari.

The issues raised before us are the following:

I

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OFDISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN APPRENTICE.

II

WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OFDISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY PROVEN THEEXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OF PRIVATERESPONDENT.

We find no merit in the petition.


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Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot plainly be considered anapprentice since no apprenticeship program had yet been filed and approved at the time the agreement wasexecuted.

Petitioner further insists that the mere signing of the apprenticeship agreement already established an employer-apprentice relationship.

Petitioner's argument is erroneous.

The law is clear on this matter. Article 61 of the Labor Code provides:

Contents of apprenticeship agreement. Apprenticeship agreements, including the main rates ofapprentices, shall conform to the rules issued by the Minister of Labor and Employment. Theperiod of apprenticeship shall not exceed six months. Apprenticeship agreements providing forwage rates below the legal minimum wage, which in no case shall start below 75% per cent of theapplicable minimum wage, may be entered into only in accordance with apprenticeship programduly approved by the Minister of Labor and Employment. The Ministry shall develop standardmodel programs of apprenticeship. (emphasis supplied)

In the case at bench, the apprenticeship agreement between petitioner and private respondent was executed onMay 28, 1990 allegedly employing the latter as an apprentice in the trade of "care maker/molder." On the samedate, an apprenticeship program was prepared by petitioner and submitted to the Department of Labor andEmployment. However, the apprenticeship Agreement was filed only on June 7, 1990. Notwithstanding theabsence of approval by the Department of Labor and Employment, the apprenticeship agreement was enforcedthe day it was signed.

Based on the evidence before us, petitioner did not comply with the requirements of the law. It is mandated thatapprenticeship agreements entered into by the employer and apprentice shall be entered only in accordance withthe apprenticeship program duly approved by the Minister of Labor and Employment.

Prior approval by the Department of Labor and Employment of the proposed apprenticeship program is, therefore,a condition sine quo nonbefore an apprenticeship agreement can be validly entered into.

The act of filing the proposed apprenticeship program with the Department of Labor and Employment is apreliminary step towards its final approval and does not instantaneously give rise to an employer-apprenticerelationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program throughthe participation of employers, workers and government and non-government agencies" and "to establishapprenticeship standards for the protection of apprentices." To translate such objectives into existence, priorapproval of the DOLE to any apprenticeship program has to be secured as a condition sine qua non before anysuch apprenticeship agreement can be fully enforced. The role of the DOLE in apprenticeship programs andagreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect inthe absence of a valid apprenticeship program duly approved by the DOLE, private respondent's assertion that hewas hired not as an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He shouldrightly be considered as a regular employee of petitioner as defined by Article 280 of the Labor Code:

Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreement of the parties, an employment shall bedeemed to be regular where the employee has been engaged to perform activities which areusually necessary or desirable in the usual business or trade of the employer, except where theemployment has been fixed for a specific project or undertaking the completion or termination ofwhich has been determined at the time of the engagement of the employee or where the work orservices to be performed is seasonal in nature and the employment is for the duration of theseason.

An employment shall be deemed to be casual if it is not covered by the precedingparagraph:Provided, That, any employee who has rendered at least one year of service, whethersuch service is continuous or broken, shall be considered a regular employee with respect to theactivity in which he is employed and his employment shall continue while such activity exists.(Emphasis supplied)

and pursuant to the constitutional mandate to "protect the rights of workers and promote their welfare."9

Petitioner further argues that, there is a valid cause for the dismissal of private respondent.

There is an abundance of cases wherein the Court ruled that the twin requirements of due process, substantiveand procedural, must be complied with, before valid dismissal exists.

10Without which, the dismissal becomes

void.


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The twin requirements of notice and hearing constitute the essential elements of due process. This simply meansthat the employer shall afford the worker ample opportunity to be heard and to defend himself with the assistanceof his representative, if he so desires.

Ample opportunity connotes every kind of assistance that management must accord the employee to enable him toprepare adequately for his defense including legal representation.

11

As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC:12

The law requires that the employer must furnish the worker sought to be dismissed with two (2)written notices before termination of employee can be legally effected: (1) notice which apprisesthe employee of the particular acts or omissions for which his dismissal is sought; and (2) thesubsequent notice which informs the employee of the employer's decision to dismiss him (Sec. 13,BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the Labor Code asamended). Failure to comply with the requirements taints the dismissal with illegality. Thisprocedure is mandatory, in the absence of which, any judgment reached by management is voidand in existent (Tingson, Jr. vs. NLRC, 185 SCRA 498 [1990]; National Service Corp. vs. NLRC,168 SCRA 122; Ruffy vs. NLRC. 182 SCRA 365 [1990]).

The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter only three days after he wasmade to sign a Quitclaim, a clear indication that such resignation was not voluntary and deliberate.

Private respondent averred that he was actually employed by petitioner as a delivery boy ("kargador" or"pahinante").

He further asserted that petitioner "strong-armed" him into signing the aforementioned resignation letter andquitclaim without explaining to him the contents thereof. Petitioner made it clear to him that anyway, he did nothave a choice.

13

Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the latter's allegedresignation and subsequent execution of a Quitclaim and Release. A judicious examination of both events beliesany spontaneity on private respondent's part.

WHEREFORE, finding no abuse of discretion committed by public respondent National Labor RelationsCommission, the appealed decision is hereby AFFIRMED.

SO ORDERED.

Padilla, Davide, Jr., Bellosillo and Hermosisima, Jr., JJ., concur.Footnotes

1 Rollo, pp. 12-15.2 Records, p 12.3 Id., at 13.4 Id., at 14.

5 Id., at .47-48.6 Id., p. 47.7 Rollo, pp. 14-15.8 Ibid.9 Sec. 18, Art. II, The 1987 Constitution of the Republic of the Philippines.10 Century Textile Mills, Inc. v. NLRC, 161 SCRA 528 (1988); Gold City-Integrated PortServices, Inc. v. NLRC, 189 SCRA 811 (1990); Kwikway Engineering Works v. NLRC, 195SCRA 526 (1991).11 Abiera v. National Labor Relations Commission, 215 SCRA 476 (1992).12 210 SCRA 277 (1992).13 Original Record, p. 39.


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THIRD DIVISION

[G.R. No. 122917. July 12, 1999]

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL

ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTANJR., CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO,CORAZON C. DELOS REYES, ROBERT G. NOORA, MILAGROS O. LEQUIGAN, ADRIANA F.TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERTMARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA G. MONTES,ALBINO TECSON, MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R.CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR,MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIERAMIL, ROZAIDA PASCUAL, PINKY BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO & RICOTIMOSA, peti t ionersvs. NATIONAL LABOR RELATIONS COMMISSION & FAR EAST BANK ANDTRUST COMPANY, respondents.

D E C I S I O N

PANGANIBAN, J.:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same termsand conditions of employment as qualified able-bodied employees. Once they have attained the status of regularworkers, they should be accorded all the benefits granted by law, notwithstanding written or verbal contracts to thecontrary. This treatment is rooted not merely on charity or accommodation, but on justice for all.

The Case

Challenged in the Petition for Certiorari[1]

before us is the June 20, 1995 Decision[2]

of the National LaborRelations Commission (NLRC),

[3]which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L.

Linsangan. The labor arbiters Decision disposed as follows:[4]

WHEREFORE, judgment is hereby rendered dismissing the above-mentioned complaint for lack of merit.

Also assailed is the August 4, 1995 Resolution[5]

of the NLRC, which denied the Motion for Reconsideration.

The FactsThe facts were summarized by the NLRC in this wise:

[6]

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various periods from 1988 to1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters through a uniformly wordedagreement called Employment Contract for Handicapped Workers. (pp. 68 & 69, Records) The full text of said

agreement is quoted below:

EMPLOYMENT CONTRACT FOR HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly organized and existing underand by virtue of the laws of the Philippines, with business address at FEBTC Building, Muralla, Intramuros, Manila,represented herein by its Assistant Vice President, MR. FLORENDO G. MARANAN, (hereinafter referred to as theBANK);

- and -

________________, ________________ years old, of legal age, _____________, and residing at__________________ (hereinafter referred to as the (EMPLOYEE).

WITNESSETH: That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is a need to provide disabled andhandicapped persons gainful employment and opportunities to realize their potentials, uplift their socio-economicwell being and welfare and make them productive, self-reliant and useful citizens to enable them to fully integratein the mainstream of society;

WHEREAS, there are certain positions in the BANK which may be filled-up by disabled and handicapped persons,particularly deaf-mutes, and the BANK ha[s] been approached by some civic-minded citizens and authorized

government agencies [regarding] the possibility of hiring handicapped workers for these positions;
http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn1


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WHEREAS, the EMPLOYEE is one of those handicapped workers who [were] recommended for possibleemployment with the BANK;

NOW, THEREFORE, for and in consideration of the foregoing premises and in compliance with Article 80 of theLabor Code of the Philippines as amended, the BANK and the EMPLOYEE have entered into this EmploymentContract as follows:

1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE agrees to diligently andfaithfully work with the BANK, as Money Sorter andCounter.

2. The EMPLOYEE shall perform among others, the following duties and responsibilities:i Sort out bills according to color;ii. Count each denomination per hundred, either manually or with the aid of a counting machine;iii. Wrap and label bills per hundred;iv. Put the wrapped bills into bundles; andv. Submit bundled bills to the bank teller for verification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after which the BANK shall determinewhether or not he/she should be allowed to finish the remaining term of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day, subject to adjustment in thesole judgment of the BANK, payable every 15

thand end of the month.

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week, from Mondays thru Fridays, ateight (8) hours a day. The EMPLOYEE may be required to perform overtime work as circumstance may warrant,for which overtime work he/she [shall] be paid an additional compensation of 125% of his daily rate if performedduring ordinary days and 130% if performed during Saturday or [a] rest day.

6. The EMPLOYEE shall likewise be entitled to the following benefits:i. Proportionate 13

thmonth pay based on his basic daily wage.

ii. Five (5) days incentive leave.iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the BANK Rules and Regulations

and Policies, and to conduct himself/herself in a manner expected of all employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed under a special employmentprogram of the BANK, for which reason the standard hiring requirements of the BANK were not applied in his/hercase. Consequently, the EMPLOYEE acknowledges and accepts the fact that the terms and conditions of theemployment generally observed by the BANK with respect to the BANKs regular employeeare not applicable tothe EMPLOYEE, and that therefore, the terms and conditions of the EMPLOYEEs employment with the BANKshall be governed solely and exclusively by this Contract and by the applicable rules and regulations that theDepartment of Labor and Employment may issue in connection with the employment of disabled and handicappedworkers. More specifically, the EMPLOYEE hereby acknowledges that the provisions of Book Six of the LaborCode of the Philippines as amended, particularly on regulation of employment and separation pay are notapplicable to him/her.

9. The Employment Contract shall be for a period of six (6) months or from ____ to ____ unless earlierterminated by the BANK for any just or reasonable cause. Any continuation or extension of this Contract shall bein writing and therefore this Contract will automatically expire at the end of its terms unless renewed in writing bythe BANK.

IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s] this ____ day of_________________, ____________ at Intramuros, Manila, Philippines.

In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in 1990, nineteen (19); in1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s] were renewed every six monthssuch that by the time this case arose, there were fifty-six (56) deaf-mutes who were employed by respondentunder the said employment agreement. The last one was Thelma Malindoy who was employed in 1992 andwhose contract expired on July 1993.

x x x x x x x x x

Disclaiming that complainants were regular employees, respondent Far East Bank and Trust Companymaintained that complainants who are a special class of workersthe hearing impaired employees were hiredtemporarily under [a] special employment arrangement which was a result of overtures made by some civic andpolitical personalities to the respondent Bank; that complainant[s] were hired due to pakiusap which must beconsidered in the light of the context of the respondent Banks corporate philosophy as well as its career andworking environment which is to maintain and strengthen a corps of professionals trained and qualified officers andregular employees who are baccalaureate degree holders from excellent schools which is an unbending policy inthe hiring of regular employees; that in addition to this, training continues so that the regular employee grows in thecorporate ladder; that the idea of hiring handicapped workers was acceptable to them only on a specialarrangement basis; that it adopted the special program to help tide over a group of handicapped workers such as

deaf-mutes like the complainants who could do manual work for the respondent Bank; that the task of counting andsorting of bills which was being performed by tellers could be assigned to deaf-mutes; that the counting and sorting


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of money are tellering works which were always logically and naturally part and parcel of the tellers normalfunctions; that from the beginning there have been no separate items in the respondent Bank plantilla for sorters orcounters; that the tellers themselves already did the sorting and counting chore as a regular feature and integralpart of their duties (p. 97, Records); that through the pakiusap of Arturo Borjal, the tellers were relieved of thistask of counting and sorting bills in favor of deaf-mutes without creating new positions as there is no position eitherin the respondent or in any other bank in the Philippines which deals with purely counting and sorting of bills inbanking operations.

Petitioners specified when each of them was hired and dismissed, viz:[7]

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed1. MARITES BERNARDO Intramuros 12 NOV 90 17 NOV 932. ELVIRA GO DIAMANTE Intramuros 24 JAN 90 11 JAN 943. REBECCA E. DAVID Intramuros 16 APR 90 23 OCT 934. DAVID P. PASCUAL Bel-Air 15 OCT 88 21 NOV 945. RAQUEL ESTILLER Intramuros 2 JUL 92 4 JAN 946. ALBERT HALLARE West 4 JAN 91 9 JAN 947. EDMUND M. CORTEZ Bel-Air 15 JAN 91 3 DEC 938. JOSELITO O. AGDON Intramuros 5 NOV 90 17 NOV 939. GEORGE P. LIGUTAN, JR. Intramuros 6 SEPT 89 19 JAN 9410. CELSO M. YAZAR Intramuros 8 FEB 93 8 AUG 9311. ALEX G. CORPUZ Intramuros 15 FEB 93 15 AUG 9312. RONALD M. DELFIN Intramuros 22 FEB 93 22 AUG 9313. ROWENA M. TABAQUERO Intramuros 22 FEB 93 22 AUG 9314. CORAZON C. DELOS REYES Intramuros 8 FEB 93 8 AUG 9315. ROBERT G. NOORA Intramuros 15 FEB 93 15 AUG 9316. MILAGROS O. LEQUIGAN Intramuros 1 FEB 93 1 AUG 9317. ADRIANA F. TATLONGHARI Intramuros 22 JAN 93 22 JUL 9318. IKE CABANDUCOS Intramuros 24 FEB 93 24 AUG 9319. COCOY NOBELLO Intramuros 22 FEB 93 22 AUG 9320. DORENDA CATIMBUHAN Intramuros 15 FEB 93 15 AUG 9321. ROBERT MARCELO West 31 JUL 93

[8] 1 AUG 93

22. LILIBETH Q. MARMOLEJO West 15 JUN 90 21 NOV 9323. JOSE E. SALES West 6 AUG 92 12 OCT 9324. ISABEL MAMAUAG West 8 MAY 92 10 NOV 93

25. VIOLETA G. MONTES Intramuros 2 FEB 90 15 JAN 9426. ALBINO TECSON Intramuros 7 NOV 91 10 NOV 9327. MELODY V. GRUELA West 28 OCT 91 3 NOV 9328. BERNADETH D. AGERO West 19 DEC 90 27 DEC 9329. CYNTHIA DE VERA Bel-Air 26 JUN 90 3 DEC 9330. LANI R. CORTEZ Bel-Air 15 OCT 88 10 DEC 9331. MA. ISABEL B. CONCEPCION West 6 SEPT 90 6 FEB 9432. DINDO VALERIO Intramuros 30 MAY 93 30 NOV 9333. ZENAIDA MATA Intramuros 10 FEB 93 10 AUG 9334. ARIEL DEL PILAR Intramuros 24 FEB 93 24 AUG 9335. MARGARET CECILIA CANOZA Intramuros 27 JUL 90 4 FEB 9436. THELMA SEBASTIAN Intramuros 12 NOV 90 17 NOV 9337. MA. JEANETTE CERVANTES West 6 JUN 92 7 DEC 9338. JEANNIE RAMIL Intramuros 23 APR 90 12 OCT 9339. ROZAIDA PASCUAL Bel-Air 20 APR 89 29 OCT 93

40. PINKY BALOLOA West 3 JUN 91 2 DEC 9341. ELIZABETH VENTURA West 12 MAR 90 FEB 94 [SIC]42. GRACE S. PARDO West 4 APR 90 13 MAR 9443. RICO TIMOSA Intramuros 28 APR 93 28 OCT 93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein petitioners. Hence, thisrecourse to this Court.

[9]

The Ruling of the NLRC

In affirming the ruling of the labor arbiter that herein petitioners could not be deemed regular employees underArticle 280 of the Labor Code, as amended, Respondent Commission ratiocinated as follows:

We agree that Art. 280 is not controlling herein. We give due credence to the conclusion that complainants werehired as an accommodation to [the] recommendation of civic oriented personalities whose employment[s] werecovered by xxx Employment Contract[s] with special provisions on duration of contract as specified under Art.80. Hence, as correctly held by the Labor Arbiter a quo, the terms of the contract shall be the law between theparties.

[10]

The NLRC also declared that the Magna Carta for Disabled Persons was not applicable, considering theprevailing circumstances/milieu of the case.

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:
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I.The Honorable Commission committed grave abuse of discretion in holding that the petitioners - money sortersand counters working in a bank - were not regular employees.

II.The Honorable Commission committed grave abuse of discretion in holding that the employment contractssigned and renewed by the petitioners - which provide for a period of six (6) months - were valid.

III.The Honorable Commission committed grave abuse of discretion in not applying the provisions of the MagnaCarta for the Disabled (Republic Act No. 7277), on proscription against discrimination against disabledpersons.

[11]

In the main, the Court will resolve whether petitioners have become regular employees.

This Courts Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and whosecontracts were renewed are deemed regular. Hence, their dismissal from employment was illegal.

Preliminary Matter: Propr iety of Cert iorar i

Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is

not allowed in a petition for certiorari. Specifically, it maintains that the Court cannot pass upon the findings ofpublic respondents that petitioners were not regular employees.

True, the Court, as a rule, does not review the factual findings of public respondents ina certiorariproceeding. In resolving whether the petitioners have become regular employees, we shall not changethe facts found by the public respondent. Our task is merely to determine whether the NLRC committed graveabuse of discretion in applying the law to the established facts, as above-quoted from the assailed Decision.

Main Issue: Are Peti t ioners Regular Employees?

Petitioners maintain that they should be considered regular employees, because their task as money sortersand counters was necessary and desirable to the business of respondent bank. They further allege that theircontracts served merely to preclude the application of Article 280 and to bar them from becoming regularemployees.

Private respondent, on the other hand, submits that petitioners were hired only as special workers andshould not in any way be considered as part of the regular complement of the Bank.

[12]Rather, they were special

workers under Article 80 of the Labor Code. Private respondent contends that it never solicited the services ofpetitioners, whose employment was merely an accommodation in response to the requests of governmentofficials and civic-minded citizens. They were told from the start, with the assistance of governmentrepresentatives, that they could not become regular employees because there were no plantilla positions formoney sorters, whose task used to be performed by tellers. Their contracts were renewed several times, notbecause of need but merely for humanitarian reasons. Respondent submits that as of the present, the specialposition that was created for the petitioners no longer exist[s] in private respondent [bank], after the la tter haddecided not to renew anymore their special employment contracts.

At the outset, let it be known that this Court appreciates the nobility of private respondents effort to provideemployment to physically impaired individuals and to make them more productive members of society. However,we cannot allow it to elude the legal consequences of that effort, simply because it now deems their employmentirrelevant. The facts, viewed in light of the Labor Code and the Magna Carta for Disabled Persons, indubitablyshow that the petitioners, except sixteen of them, should be deemed regular employees. As such, they haveacquired legal rights that this Court is duty-bound to protect and uphold, not as a matter of compassion but as aconsequence of law and justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of onemonth, after which the employer shall determine whether or not they should be allowed to finish the 6-month termof the contract. Furthermore, the employer may terminate the contract at any time for a just and reasonablecause. Unless renewed in writing by the employer, the contract shall automatically expire at the end of the term.

According to private respondent, the employment contracts were prepared in accordance with Article 80 of theLabor Code, which provides:

ART. 80. Employment agreement. Any employer who employs handicapped workers shall enter into anemployment agreement with them, which agreement shall include:

(a) The names and addresses of the handicapped workers to be employed;

(b) The rate to be paid the handicapped workers which shall be not less than seventy five (75%) per cent of theapplicable legal minimum wage;

(c) The duration of employment period; and
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(d) The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorizedrepresentatives.

The stipulations in the employment contracts indubitably conform with the aforecited provision. Succeedingevents and the enactment of RA No. 7277 (the Magna Carta for Disabled Persons) ,

[13]however, justify the

application of Article 280 of the Labor Code.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed thecontracts of 37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of thehandicapped workers and the hiring of others lead to the conclusion that their tasks were beneficial and necessaryto the bank. More important, these facts show that they were qualifiedto perform the responsibilities of theirpositions. In other words, their disability did not render them unqualified or unfit for the tasks assigned to them.

In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled employee should begiven the same terms and conditions of employment as a qualified able-bodied person. Section 5 of the MagnaCarta provides:

Section 5. Equal Opportunity for Employment.No disabled person shall be denied access to opportunities forsuitable employment. A qualified disabled employee shall be subject to the same terms and conditions ofemployment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as aqualified able bodied person.

The fact that the employees were qualified disabled persons necessarily removes the employment contractsfrom the ambit of Article 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, theyare thus covered by Article 280 of the Labor Code, which provides:

ART. 280. Regular and Casual Employment. -- The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regularwhere the employee has been engaged to perform activities which are usually necessary or desirable in the usualbusiness or trade of the employer, except where the employment has been fixed for a specific project orundertaking the completion or termination of which has been determined at the time of the engagement of theemployee 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, anyemployee who has rendered at least one year of service, whether such service is continuous or broken, shall beconsidered as regular employee with respect to the activity in which he is employed and his employment shallcontinue while such activity exists.

The test of whether an employee is regular was laid down in De Leon v. NLRC,[14]

in which this Court held:

The primary standard, therefore, of determining regular employment is the reasonable connection between theparticular activity performed by the employee in relation to the usual trade or business of the employer. The test iswhether the former is usually necessary or desirable in the usual business or trade of the employer. Theconnection can be determined by considering the nature of the work performed and its relation to the scheme of

the particular business or trade in its entirety. Also if the employee has been performing the job for at least oneyear, even if the performance is not continuous and merely intermittent, the law deems repeated and continuingneed for its performance as sufficient evidence of the necessity if not indispensability of that activity to thebusiness. Hence, the employment is considered regular, but only with respect to such activity, and while suchactivity exists.

Without a doubt, the task of counting and sorting bills is necessary and desirable to the business ofrespondent bank. With the exception of sixteen of them, petitioners performed these tasks for more than sixmonths. Thus, the following twenty-seven petitioners should be deemed regular employees: Marites Bernardo,Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G.Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B.Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, RozaidaPascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo.

As held by the Court, Articles 280 and 281 of the Labor Code put an end to the pernicious practice of makingpermanent casuals of our lowly employees by the simple expedient of extending to them probationaryappointments, ad infinitum.

[15]The contract signed by petitioners is akin to a probationary employment, during

which the bank determined the employees fitness for the job. When the bank renewed the contract after the lapseof the six-month probationary period, the employees thereby became regular employees.

[16]No employer is

allowed to determine indefinitely the fitness of its employees.

As regular employees, the twenty-seven petitioners are entitled to security of tenure; that is, their servicesmay be terminated only for a just or authorized cause. Because respondent failed to show such cause ,

[17]these

twenty-seven petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatementwithout loss of seniority rights and other privileges.

[18]Considering the allegation of respondent that the job of

money sorting is no longer available because it has been assigned back to the tellers to whom it originallybelonged,

[19]petitioners are hereby awarded separation pay in lieu of reinstatement.

[20]
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Because the other sixteen worked only for six months, they are not deemed regular employees and hence notentitled to the same benefits.

Appl icabi l i ty of theBrent Rul ing

Respondent bank, citing Brent School v. Zamora

[21]

in which the Court upheld the validity of an employmentcontract with a fixed term, argues that the parties entered into the contract on equal footing. It adds that thepetitioners had in fact an advantage, because they were backed by then DSWD Secretary Mita Pardo de Taveraand Representative Arturo Borjal.

We are not persuaded. The term limit in the contract was premised on the fact that the petitioners weredisabled, and that the bank had to determine their fitness for the position. Indeed, its validity is based on Article 80of the Labor Code. But as noted earlier, petitioners proved themselves to be qualified disabled persons who,under the Magna Carta for Disabled Persons, are entitled to terms and conditions of employment enjoyedby qualified able-bodied individuals; hence, Article 80 does not apply because petitioners are qualified for theirpositions. The validation of the limit imposed on their contracts, imposed by reason of their disability, was a glaringinstance of the very mischief sought to be addressed by the new law.

Moreover, it must be emphasized that a contract of employment is impressed with public

interest.

[22]

Provisions of applicable statutes are deemed written into the contract, and the parties are not at libertyto insulate themselves and their relationships from the impact of labor laws and regulations by simply contractingwith each other.

[23]Clearly, the agreement of the parties regarding the period of employment cannot prevail over

the provisions of the Magna Carta for Disabled Persons, which mandate that petitioners must be treated asqualified able-bodied employees.

Respondents reason for terminating the employment of petitioners is instructive. Because the BangkoSentral ng Pilipinas (BSP) required that cash in the bank be turned over to the BSP during business hours from8:00 a.m. to 5:00 p.m., respondent resorted to nighttime sorting and counting of money. Thus, it reasons that thistask could not be done by deaf mutes because of their physical limitations as it is very risky for them to travel atnight.

[24]We find no basis for this argument. Travelling at night involves risks to handicapped and able-bodied

persons alike. This excuse cannot justify the termination of their employment.

Other Grounds Cited by Respondent

Respondent argues that petitioners were merely accommodated employees. This fact does not change thenature of their employment. As earlier noted, an employee is regular because of the nature of work and the lengthof service, not because of the mode or even the reason for hiring them.

Equally unavailing are private respondents arguments that it did not go out of its way to recruit petitioners,and that its plantilla did not contain their positions. InL. T. Datu v. NLRC,

[25]the Court held that the determination

of whether employment is casual or regular does not depend on the will or word of the employer, and theprocedure of hiring x x x but on the nature of the activities performed by the employee, and to some extent, thelength of performance and its continued existence.

Private respondent argues that the petitioners were informed from the start that they could not becomeregular employees. In fact, the bank adds, they agreed with the stipulation in the contract regarding this

point. Still, we are not persuaded. The well-settled rule is that the character of employment is determined not bystipulations in the contract, but by the nature of the work performed.

[26]Otherwise, no employee can become

regular by the simple expedient of incorporating this condition in the contract of employment.

In this light, we iterate our ruling in Romares v. NLRC:[27]

Article 280 was emplaced in our statute books to prevent the circumvention of the employees right to be secure inhis tenure by indiscriminately and completely ruling out all written and oral agreements inconsistent with theconcept of regular employment defined therein. Where an employee has been engaged to perform activities whichare usually necessary or desirable in the usual business of the employer, such employee is deemed a regularemployee and is entitled to security of tenure notwithstanding the contrary provisions of his contract ofemployment.

x x x x x x x x x

At this juncture, the leading case of Brent School, Inc. v. Zamoraproves instructive. As reaffirmed in subsequentcases, this Court has upheld the legality of fixed-term employment. It ruled that the decisive determinant in termemployment should not be the activities that the employee is called upon to perform but the day certain agreedupon the parties for the commencement and termination of their employment relationship. But this Court went onto say that where from the circumstances it is apparent that the periods have been imposed to preclude acquisitionof tenurial security by the employee, they should be struck down or disregarded as contrary to public policy andmorals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working class,but also the concern of the State for the plight of the disabled. The noble objectives of Magna Carta for DisabledPersons are not based merely on charity or accommodation, but on justice and the equal treatmentof qualifiedpersons, disabled or not. In the present case, the handicap of petitioners (deaf-mutes) is not a

hindrance to their work. The eloquent proof of this statement is the repeated renewal of their employmentcontracts. Why then should they be dismissed, simply because they are physically impaired? The Court believes,
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that, after showing their fitness for the work assigned to them, they should be treated and granted the same rightslike any other regular employees.

In this light, we note the Office of the Solicitor Generals prayer joining the petitioners cause.[28]

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and theAugust 4, 1995 Resolution of the NLRC areREVERSEDandSETASIDE. Respondent Far East Bank and Trust

Company is hereby ORDEREDto pay back wages and separation pay to each of the following twenty-seven (27)petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller,Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lil ibeth Q. Marmolejo, Jose E. Sales,Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, LaniR. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S. Pardo. The NLRC is herebydirected to compute the exact amount due each of said employees, pursuant to existing laws and regulations,within fifteen days from the finality of this Decision. No costs.

SO ORDERED.Romero, (Chairman), Vitug, Purisima,and Gonzaga-Reyes, JJ., concur.

[1]

Rollo, pp. 3-39.[2]Rollo, pp. 46-65.

[3]Penned by Presiding Comm. Lourdes C. Javier and concurred in by Comm. Joaquin A. Tanodra. The other member, Comm.

Ireneo B. Bernardo, dissented.[4]

Rollo, p. 113.[5]

Rollo, pp. 73-74.[6]

NLRC Decision, pp. 2-10; rollo, pp. 47-55.[7]

Petition, p. 12; rollo, p. 14.[8]

This is a typographical error on the part of the petitioner, for it is unlikely that the Contract of Employment was terminated theday after it was executed. In fact, Annex C of petitioners Position Paper, which was submitted before the labor arbiter, showsthat Petitioner Robert Marcelo was hired on July 31, 1992, not 1993 (Rollo, p. 100.).[9]

The case was deemed submitted for resolution on December 1, 1998, when the Memorandum of the private respondent wasreceived by the Court. The case was given due course on December 8, 1997.[10]

NLRC Decision, p. 18; rollo, p. 63.[11]

Petitioners Memorandum, p. 3; rollo, p. 474.[12] Respondents Memorandum, p. 10;rollo, p. 523.[13]

Approved on March 24, 1992.[14]

176 SCRA 615, 621, August 21, 1989, per Fernan, CJ.[15]

CENECO v. NLRC, 236 SCRA 108, September 1, 1994, per Puno, J.[16]

Ibid.; Article 281, Labor Code.[17]

Articles 282 to 284 of the Code.[18]

Article 279 of the Labor Code as amended.[19]

Respondents Memorandum, p. 16;rollo, p. 529.[20]

Zarate v. Olegario, 263 SCRA 1, October 7, 1996.[21]

181 SCRA 802, February 6, 1990.[22]

Article 1700 of the Civil Code provides: The relations between capital and labor are not merely contractual. They are soimpressed with public interest that labor contracts must yield to the common good. x x x.[23]

Pakistan Airlines Corporation v. Ople, 190 SCRA 90, September 28, 1990, per Feliciano, J. See also Servidad v. NLRC,GR No. 128682, March 18, 1999; Villa v. NLRC, 284 SCRA 105, January 14, 1998.[24]

Respondents Memorandum, p. 15;rollo, p. 528.[25] 253 SCRA 440, 450, February 9, 1996, per Kapunan, J.[26]

A.M. Oreta & Co. v. NLRC, 176 SCRA 208, August 10, 1989.[27]

GR No. 122327, August 19, 1998, per Martinez, J.[28]

Manifestation of the Office of the Solicitor General; rollo, pp. 354-375.
http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref1http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref5http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref7http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref8http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref8http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref9http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref10http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref11http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref12http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref13http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref14http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref15http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref16http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref17http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref18http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref19http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref20http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref21http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref22http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref23http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref24http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref25http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref26http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref27http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref28http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref28http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref27http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref26http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref25http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref24http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref23http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref22http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref21http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref20http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref19http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref18http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref17http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref16http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref15http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref14http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref13http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref12http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref11http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref10http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref9http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref8http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref7http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref6http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref5http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref4http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref3http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref2http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_ednref1http://sc.judiciary.gov.ph/jurisprudence/1999/jul99/122917.htm#_edn28


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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-4148 July 16, 1952

MANILA TERMINAL COMPANY, INC.,petitioner,vs.THE COURT OF INDUSTRIAL RELATIONS and MANILA TERMINAL RELIEF AND MUTUAL AIDASSOCIATION,respondents.

Perkins, Ponce Enrile and Contreras for petitioner.Antonio V. Raquiza, Honesto Ricobal and Perfecto E. Llacarfor respondent Association.Mariano R. Padilla for respondent Court of Industrial Relations.

PARAS, C. J.:

On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as to the petitioner,undertook the arrastre service in some of the piers in Manila's Port Area at the request and under the control of theUnited States Army. The petitioner hired some thirty men as watchmen on twelve-hour shifts at a compensation ofP3 per day for the day shift and P6 per day for the night shift. On February 1, 1946, the petitioner began thepostwar operation of the arrastre service at the present at the request and under the control of the Bureau ofCustoms, by virtue of a contract entered into with the Philippine Government. The watchmen of the petitionercontinued in the service with a number of substitutions and additions, their salaries having been raised during themonth of February to P4 per day for the day shift and P6.25 per day for the nightshift. On March 28, 1947,Dominador Jimenez, a member of the Manila Terminal Relief and Mutual Aid Association, sent a letter to theDepartment of Labor, requesting that the matter of overtime pay be investigated, but nothing was done by theDepartment. On April 29, 1947, Victorino Magno Cruz and five other employees, also member of the ManilaTransit Mutual Aid Association, filed a 5-point demand with the Department of Labor, including overtime pay, butthe Department again filed to do anything about the matter. On May 27, 1947, the petitioner instituted the system

of strict eight-hour shifts. On June 19, 1947, the Manila Port Terminal Police Association, not registered inaccordance with the provisions of Commonwealth Act No. 213, filed a petition with the Court of IndustrialRelations. On July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was organized for the firsttime, having been granted certificate No. 375 by the Department of Labor. On July 28, 1947, Manila TerminalRelief and Mutual Aid Association filed an amended petition with the Court of Industrial Relations praying, amongothers, that the petitioner be ordered to pay its watchmen or police force overtime pay from the commencement oftheir employment. On May 9, 1949, by virtue of Customs Administrative Order No. 81 and Executive Order No. 228of the President of the Philippines, the entire police force of the petitioner was consolidated with the Manila HarvorPolice of the Customs Patrol Service, a Government agency under the exclusive control of the Commissioner ofCustoms and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will hereafter bereferred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1, 1950, as amended on April

18, 1950, while dismissing other demands of the Association for lack of jurisdiction, ordered the petitioner to pay toits police force

(a) Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as additional overtimecompensation for the period from September 1, 1945 to May 24, 1947;

(b) Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00 a.m. during the sameperiod:

(c) Additional compensation of 50 per cent for work performed on Sundays and legal holidays during the sameperiod;

(d) Additional compensation of 50 per cent for work performed on Sundays and legal holidays from May 24, 1947to May 9, 1949; and

(e) Additional compensation of 25 per cent for work performed at night from May 29, 1947 to May 9, 1949.

With reference to the pay for overtime service after the watchmen had been integrated into the Manila HarborPolice, Judge Yanson ruled that the court has no jurisdiction because it affects the Bureau of Customs, aninstrumentality of the Government having no independent personality and which cannot be sued without theconsent of the State. (Metran vs. Paredes, 45. Off. Gaz., 2835.)

The petitioner find a motion for reconsideration. The Association also filed a motion for reconsideration in so far itsother demands were dismissed. Judge Yanson, concurred in by Judge Jose S. Bautista, promulgated on July 13,1950, a resolution denying both motions for reconsideration. Presiding Judge Arsenio C. Roldan, in a separate

opinion concurred in by Judge Modesto Castillo, agreed with the decision of Judge Yanson of April 1, 1950, as tothe dismissal of other demands of the Association, but dissented therefrom as to the granting of overtime pay. In a


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separate decisive opinion, Judge Juan S. Lanting concurred in the dismissal of other demands of the Association.With respect to overtime compensation, Judge Lanting ruled:

1. The decision under review should be affirmed in so far it grants compensation for overtime on regular days (notSunday and legal holidays)during the period from the date of entrance to duty to May 24, 1947, suchcompensation to consists of the amount corresponding to the four hours' overtime at the regular rate and an

additional amount of 25 per cent thereof.

2. As to the compensation for work on Sundays and legal holidays, the petitioner should pay to its watchmen thecompensation that corresponds to the overtime (in excess of 8 hours) at the regular rate only, that is, without anyadditional amount, thus modifying the decision under review accordingly.

3. The watchmen are not entitled to night differential pay for past services, and therefore the decision should bereversed with the respect thereto.

The petitioner has filed a present petition for certiorari. Its various contentions may be briefly summed up in thefollowing propositions: (1) The Court of Industrial Relations has no jurisdiction to render a money judgmentinvolving obligation in arrears. (2) The agreement under which its police force were paid certain specific wages fortwelve-hour shifts, included overtime compensation. (3) The Association is barred from recovery by estoppel and

laches. (4) the nullity or invalidity of the employment contract precludes any recovery by the Association. (5)Commonwealth Act No. 4444 does not authorize recovery of back overtime pay.

The contention that the Court of Industrial Relations has no jurisdiction to award a money judgment was alreadyoverruled by this Court in G.R. No. L-4337, Detective & protective Bureau, Inc. vs. Court of Industrial Relations andUnited Employees Welfare Association, 90 Phil., 665, in this wise: "It is also argued that the respondent court hasno jurisdiction to award overtime pay, which is money judgment. We believe that under Commonwealth Act No.103 the Court is empowered to make the order for the purpose of settling disputes between the employer andemployee

1. As a matter of fact this Court has confirmed an order of the Court of Industrial Relations requiring the

Elks Club to pay to its employees certain sum of money as overtime back wages from June 3, 1939 to March 13,1941. This, in spite the allegation of lack or excess of jurisdiction on the part of said court. (45 Off. Gaz., 3829; 80Phil. 272)"

The important point stressed by the petitioner is that the contract between it and the Association upon thecommencement of the employment of its watchman was to the certain rates of pay, including overtimecompensation namely, P3 per day for the day shift and P6 per day for night shift beginning September 1, 1945,and P4 per day shift and P6.25 per day for the night shift since February, 1946. The record does not bear outthese allegations. The petitioner has relied merely on the facts that its watchmen had worked on twelve-hour shiftsat specific wages per day and that no complaint was made about the matter until, first on March 28, 1947 and,secondly, on April 29, 1947.

In times of acute unemployment, the people, urged by the instinct of self-preservation, go from place to place andfrom office to office in search for any employment, regardless of its terms and conditions, their main concern in thefirst place being admission to some work. Specially for positions requiring no special qualifications, applicantswould be good as rejected if they ever try to be inquisitive about the hours of work or the amount of salary, everattempt to dictate their terms. The petitioner's watchmen must have railroaded themselves into their employment,

so to speak, happy in the thought that they would then have an income on which to subsist. But, at the same time,they found themselves required to work for twelve hours a day. True, there was agreement to work, but can it fairlybe supposed that they had the freedom to bargain in any way, much less to insist in the observance of the EightHour Labor Law?

As was aptly said in Floyd vs. Du Bois Soap Co., 1942, 317 U. S. 596, 63 Sup. Ct. 159; 6 CCH Labor Cases, Par.51, 147, "A contract of employment, which provides for a weekly wage for a specified number of hours, sufficient tocover both the statutory minimum wage and overtime compensation, if computed on the basis of the statutoryminimum wage, and which makes no provision for a fixed hourly rate or that the weekly wage includes overtimecompensation, does not meet the requirements of the Act."

Moreover, we note that after the petition had instituted the strict eight-hour shifts, no reduction was made in thesalaries which its watchmen received under the twelve hour arrangement. Indeed, as admitted by the petitioner,

"when the members or the respondent union were placed on strict eight-hour shifts, the lowest salary of all themembers of the respondent union was P165 a month, or P5.50 daily, for both day and night shifts." Although it maybe argued that the salary for the night shift was somewhat lessened, the fact that the rate for the day shift wasincreased in a sense tends to militate against the contention that the salaries given during the twelve-hour shiftsincluded overtime compensation.

Petitioner's allegation that the association had acquiesced in the twelve-hour shifts for more than 18 months, is notaccurate, because the watchmen involved in this case did not enter the service of the petitioner, at one time, onSeptember 1, 1945. As Judge Lanting found, "only one of them entered the service of the company on said date,very few during the rest of said month, some during the rest of that year (1945) and in 1946, and very many in1947, 1948 and 1949."

The case at bar is quite on all fours with the case of Detective & Protective Bureau, Inc. vs. Court of IndustrialRelations and United Employees Welfare Association, supra, in which the facts were as follows: "The record


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discloses that upon petition properly submitted, said court made an investigation and found that the members ofthe United Employees Welfare Association (hereafter called the Association) were in the employ of the petitionerDetective and Protective Bureau, Inc. (herein called the Bureau) which is engaged in the business of furnishingsecurity guards to commercial and industrial establishments, paying to said members monthly salaries out of whatit received from the establishments benefited by guard service. The employment called for daily tours of duty formore than eight hours, in addition to work on Sundays and holidays. Nonetheless the members performed theirlabors without receiving extra compensation." The only difference is that, while in said case the employeesconcerned were paid monthly salaries, in the case now before us the wages were computed daily. In the casecited, we held the following:

It appears that the Bureau had been granting the members of the Association, every month, "two days off"days in which they rendered no service, although they received salary for the whole month. Said Bureaucontended below that the pay corresponding to said 2 day vacation corresponded to the wages for extrawork. The court rejected the contention, quite properly we believe, because in the contract there was noagreement to that effect; and such agreement, if any, would probably be contrary to the provisions of theEight-Hour Law (Act No. 444, sec. 6) and would be null and void ab initio.

It is argued here, in opposition to the payment, that until the commencement of this litigation the membersof the Association never claimed for overtime pay. That may be true. Nevertheless the law gives them the

right to extra compensation. And they could not be held to have impliedly waived such extra compensation,for the obvious reason that could not have expressly waived it.

The foregoing pronouncements are in point. The Association cannot be said to have impliedly waived the right toovertime compensation, for the obvious reason that they could not have expressly waived it."

The principle of estoppel and the laches cannot well be invoked against the Association. In the first place, it wouldbe contrary to the spirit of the Eight Hour Labor Law, under which as already seen, the laborers cannot waive theirright to extra compensation. In the second place, the law principally obligates the employer to observe it, so muchso that it punishes the employer for its violation and leaves the employee or laborer free and blameless. In the thirdplace, the employee or laborer is in such a disadvantageous position as to be naturally reluctant or evenapprehensive in asserting any claim which may cause the employer to devise a way for exercising his right toterminate the employment.

If the principle of estoppel and laches is to be applied, it may bring about a situation, whereby the employee orlaborer, who cannot expressly renounce their right to extra compensation under the Eight-Hour Labor Law, may becompelled to accomplish the same thing by mere silence or lapse of time, thereby frustrating the purpose of law byindirection.

While counsel for the petitioner has cited authorities in support of the doctrine invoked, there are also authoritiespointed out in the opinion of Judge Lanting to the contrary. Suffice it to say, in this connection, that we are inclinedto rule adversely against petitioner for the reasons already stated.

The argument that the nullity or invalidity of the employment contract precludes recovery by the Association of anyovertime pay is also untenable. The argument, based on the supposition that the parties are in pari delicto, was ineffect turned down in Gotamo Lumber Co. vs. Court of Industrial Relations ,

*47 Off. Gaz., 3421, wherein we ruled:

"The petitioner maintains that as the overtime work had been performed without a permit from the Department ofLabor, no extra compensation should be authorized. Several decisions of this court are involved. But thosedecisions were based on the reasoning that as both the laborer and employer were duty bound to secure thepermit from the Department of Labor, both were in pari delicto. However the present law in effect imposed that dutyupon the employer (C.A. No. 444). Such employer may not therefore be heard to plead his own neglect asexemption or defense.

The employee in rendering extra service at the request of his employer has a right to assume that the latterhas complied with the requirement of the law, and therefore has obtained the required permission from theDepartment of Labor.

Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the employer and the laboreror employee contrary to the provisions of this Act shall be null avoid ab initio," (Commonwealth Act No. 444, sec.

6), obviously intended said provision for the benefit of the laborers or employees. The employer cannot, therefore,invoke any violation of the act to exempt him from liability for extra compensation. This conclusion is furthersupported by the fact that the law makes only the employer criminally liable for any violation. It cannot bepretended that, for the employer to commit any violation of the Eight-Hour Labor Law, the participation oracquiescence of the employee or laborer is indispensable, because the latter in view of his need and desire to live,cannot be considered as being on the same level with the employer when it comes to the question of applying forand accepting an employment.

Petitioner also contends that Commonwealth Act No. 444 does not provide for recovery of back overtime pay, andto support this contention it makes referrence to the Fair Labor Standards Act of the United States which providesthat "any employer who violates the provisions of section 206 and section 207 of this title shall be liable to theemployee or employees affected in the amount of their unpaid minimum wages or their unpaid overtimecompensation as the case may be," a provision not incorporated in Commonwealth Act No. 444, our Eight-Hour

Labor Law. We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444 expressly


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provides for the payment of extra compensation in cases where overtime services are required, with the result thatthe employees or laborers are entitled to collect such extra compensation for past overtime work. To holdotherwise would be to allow an employer to violate the law by simply, as in this case, failing to provide for and payovertime compensation.

The point is stressed that the payment of the claim of the Association for overtime pay covering a period of almost

two years may lead to the financial ruin of the petitioner, to the detriment of its employees themselves. It issignificant, however, that not all the petitioner's watchmen would receive back overtime pay for the whole periodspecified in the appealed decision, since the record shows that the great majority of the watchmen were admittedin 1946 and 1947, and even 1948 and 1949. At any rate, we are constrained to sustain the claim of the Associationas a matter of simple justice, consistent with the spirit and purpose of the Eight-Hour Labor Law. The petitioner, inthe first place, was required to comply with the law and should therefore be made liable for the consequences of itsviolation.

It is high time that all employers were warned that the public is interested in the strict enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard the health and welfare of the laborer or employee, but ina way to minimize unemployment by forcing employers, in cases where more than 8-hour operation is necessary,to utilize different shifts of laborers or employees working only for eight hours each.

Wherefore, the appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that thepetitioner's watchmen will be entitled to extra compensation only from the dates they respectively entered theservice of the petitioner, hereafter to be duly determined by the Court of Industrial Relations. So ordered, withoutcosts.

Feria, Pablo, Bengzon, Padilla, Tuason, Bautista Angelo, and Labrador, JJ.,concur.

Footnotes

1Cf. The Shell Co. vs. National Labor Union, 46 Off. Gaz. Supp. 1, p. 97; 81 Phil., 135.

*85 Phil. 291.


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FIRST DIVISION

CHARLITO PEARANDA, G.R. No. 159577Petitioner,

Present:

Panganiban, CJ ,Chairman,

- versus - Ynares-Santiago,Austria-Martinez,

Callejo, Sr., andChico-Nazario, JJ

BAGANGA PLYWOODCORPORATION and Promulgated:HUDSON CHUA,

Respondents. May 3, 2006x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x

DECISION

PANGANIBAN, CJ :

Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Codeon labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay andpremium pay for working on rest days.

The Case

Before us is a Petition for Review[1]

under Rule 45 of the Rules of Court, assailing the January 27,2003

[2]and July 4, 2003

[3]Resolutions of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier

Resolution disposed as follows:

WHEREFORE, premises considered, the instant petition is hereby DISMISSED.[4]

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in the CAdisposed as follows:

WHEREFORE, premises considered, the decision of the Labor Arbiter below awardingovertime pay and premium pay for rest day to complainant is hereby REVERSED and SETASIDE,and the complaint in the above-entitled case dismissed for lack of merit.[5]

The FactsSometime in June 1999, Petitioner Charlito Pearanda was hired as an employee of Baganga Plywood

Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler.[6]

In May 2001,Pearanda filed a Complaint for illegal dismissal with money claims against BPC and its general manager, HudsonChua, before the NLRC.

[7]

After the parties failed to settle amicably, the labor arbiter[8]

directed the parties to file their position papersand submit supporting documents.

[9]Their respective allegations are summarized by the labor arbiter as follows:

[Pearanda] through counsel in his position paper alleges that he was employed byrespondent [Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/BoilerHead/Shift Engineer until he was illegally terminated on December 19, 2000. Further, [he] allegesthat his services [were] terminated without the benefit of due process and valid grounds inaccordance with law. Furthermore, he was not paid his overtime pay, premium pay for workingduring holidays/rest days, night shift differentials and finally claims for payment of damages andattorneys fees having been forced tolitigate the present complaint.

Upon the other hand, respondent [BPC] is a domestic corporation duly organized andexisting under Philippine laws and is represented herein by its General Manager HUDSON CHUA,[the] individual respondent. Respondents thru counsel allege that complainants separation fromservice was done pursuant to Art. 283 of the Labor Code. The respondent [BPC] was ontemporary closure due to repair and general maintenance and it applied for clearance with theDepartment of Labor and Employment, Regional Office No. XI to shut down and to dismissemployees (par. 2 position paper). And due to the insistence of herein complainant he was paidhis separation benefits (Annexes C and D, ibid). Consequently, when respondent [BPC] partiallyreopened in January 2001, [Pearanda] failed to reapply. Hence, he was not terminated from

employment much less illegally. He opted to severe employment when he insisted payment of hisseparation benefits. Furthermore, being a managerial employee he is not entitled to overtime pay
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and if ever he rendered services beyond the normal hours of work, [there] was no office order/orauthorization for him to do so. Finally, respondents allege that the claim for damages has no legaland factual basis and that the instant complaint must necessarily fail for lack of merit.

[10]

The labor arbiter ruled that there was no illegal dismissal and that petiti oners Complaint was prematurebecause he was still employed by BPC.

[11] The temporary closure of BPCs plant did not terminate his

employment, hence, he need not reapply when the plant reopened.

According to the labor arbiter, petitioners money claims for illegal dismissal was also weakened by hisquitclaim and admission during the clarificatory conference that he accepted separation benefits, sick and vacationleave conversions and thirteenth month pay.

[12]

Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for working on restdays, and attorneys fees in the total amount ofP21,257.98.

[13]

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and premium pay forworking on rest days. According to the Commission, petitioner was not entitled to these awards because he was a

managerial employee.[14]

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed Pearandas Petition for Certior

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Labstandlaw - Part 6

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