Documente Academic
Documente Profesional
Documente Cultură
149329
DECISION
NLRC,20the NLRC held that service by registered mail is completed only "upon
actual receipt thereof by the addressee." Since the addressee of the mail is
the respondent's counsel and the person who received it was a non-member
of the Legal Staff, the decision cannot be said to have been validly served on
the respondent's counsel on October 28, 1997.
The NLRC also held that the petitioners, who were temporary or contractual
employees of the respondent, were legally terminated upon the expiration of
their respective contracts. Citing the case of Brent School, Inc. vs.
Zamora,21 the NLRC explained that while the petitioners' work was necessary
and desirable in the usual business of GMC, they cannot be considered as
regular employees since they agreed to a fixed term.
The petitioners' motion for reconsideration of the decision having been
denied by the NLRC on October 12, 1998,22 they filed a petition for certiorari
before the Court of Appeals and assigned the following errors:
I
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND ACTED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR IN
EXCESS OF ITS JURISDICTION IN ENTERTAINING AND GIVING DUE
COURSE TO RESPONDENT COMPANY'S APPEAL WHICH WAS
UNDENIABLY FILED OUT OF TIME AND CONSEQUENTLY SETTING ASIDE
THE FINAL DECISION OF THE LABOR ARBITER.
II
THE RESPONDENT COMMISSION SERIOUSLY ERRED AND ACTED WITH
GRAVE ABUSE OF DISCRETION IN HOLDING THAT PETITIONERS'
DISMISSAL WAS LEGAL ON THE GROUND OF EXPIRATION OF
EMPLOYMENT CONTRACT WHICH IS NOT A STATUTORY CAUSE UNDER
THE LABOR CODE.
III
THE RESPONDENT COMMISSION [S]ERIOUSLY ERRED AND ACTED WITH
GRAVE ABUSE OF DISCRETION IN NOT FINDING THAT PETITIONERS, AS
REGULAR EMPLOYEES, CANNOT BE DISMISSED WITHOUT JUST CAUSE
AND THE REQUIRED DUE PROCESS.23
On September 29, 2000, the CA rendered a decision affirming with
modification the decision of the NLRC, the decretal portion of which reads:
WHEREFORE, the appealed decision of the NLRC is hereby AFFIRMED,
with the MODIFICATION that the award of 13th month pay, holiday pay,
and service incentive leave pay shall cover only the year or years when
petitioners were actually employed with herein respondent General
Milling Corporation.24
The CA ruled that no grave abuse of discretion could be imputed to the
NLRC, considering that the ten-day period to appeal began to run only from
the date the decision of the LA was validly served on the respondent's
counsel. The appellate court also ruled that even assuming arguendo that
the respondent GMC's appeal was filed late, in view of the substantial
amount involved, giving due course to the appeal did not amount to grave
abuse of discretion.
On the merits of the petition, the CA ruled that where the duties of the
employee consist of activities usually necessary or desirable in the usual
business of the employer, it does not necessarily follow that the parties are
forbidden from agreeing on a period of time for the performance of such
activities, and cited the case of St. Theresa's School of Novaliches
Foundation v. NLRC.25 The CA affirmed the entitlement of the petitioners to a
proportionate thirteenth (13th) month pay for the particular year/s the
petitioners were employed. As to the awards of holiday pay and service
incentive leave pay, the CA ruled that they should be limited to the year/s of
actual service.26
The petitioners filed a motion for reconsideration of the said decision, which
was denied on July 24, 2001.27
The Present Petition
The petitioners filed the instant petition, ascribing the following errors to the
appellate court:
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND ACTED
WITHOUT JURISDICTION WHEN IT MODIFIED THE LABOR ARBITER'S
JUDGMENT THAT HAS BECOME FINAL AND EXECUTORY FOR FAILURE OF
THE RESPONDENT TO APPEAL WITHIN THE REGLEMENTARY PERIOD.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE DECISION OF THE LABOR ARBITER WAS DEEMED SERVED
NOT ON THE DATE WHEN THE DECISION WAS DELIVERED BY THE
POSTMASTER TO THE OFFICE OF THE RESPONDENT'S LAWYER, BUT ON
THE DATE WHEN THE RECEIVING CLERK GAVE THE DECISION TO THE
LAWYER.
III
THE RESPONDENT'S PRACTICE OF HIRING CHICKEN DRESSERS ON A 5MONTH CONTRACT AND REPLACING THEM WITH ANOTHER SET OF 5MONTH CONTRACT WORKERS, OBVIOUSLY TO PREVENT THEM FROM
ATTAINING REGULAR STATUS, IS VIOLATIVE OF THE CONSTITUTION AND
ARTICLES 279 AND 280 OF THE LABOR CODE.28
The issues for resolution are (a) whether or not the respondent's appeal from
the Labor Arbiter's decision was filed within the reglementary period
therefor; and, (b) whether or not the petitioners were regular employees of
the respondent GMC when their employment was terminated.
In petitions for review on certiorari of the decision of the CA, only errors of
law are generally reviewed.29Normally, the Supreme Court is not a trier of
facts.30 In the absence of any showing that the NLRC committed grave abuse
of discretion, or otherwise acted without or in excess of jurisdiction, the Court
is bound by its findings.31 Such findings are not infallible, however,
particularly when there is a showing that they were arrived at arbitrarily or in
disregard of the evidence on record. In such case, they may be re-examined
by the Court.
Hence, when the factual findings of the NLRC are contrary to those of the
Labor Arbiter, the evidentiary facts may be reviewed by the appellate
court.32 Considering that the NLRC's findings clash with those of the Labor
Arbiter's, this Court is compelled to go over the records of the case as well as
the submissions of the parties.33
The Ruling of the Court
The petition is bereft of merit.
Anent the first issue, we agree with the CA that the NLRC did not act with
grave abuse of discretion when it gave due course to the appeal of the
respondent. Decisions of the Labor Arbiter are final and executory, unless
appealed to the Commission, within ten (10) calendar days from receipt
thereof.34 Copies of decisions or final awards are served on both parties and
their counsel by registered mail,35 and such service by registered mail is
completed upon actual receipt by the addressee or five (5) days from receipt
of the first notice of the postmaster, whichever is earlier.36
The records show that the August 18, 1997 Decision of the Labor Arbiter was
served via registered mail, addressed to the respondent GMC's counsel, Atty.
Emmanuel O. Pacsi, at the sixth (6th) Floor, Corinthian Plaza Bldg., 121 Paseo
de Roxas, Makati City.37 It was received by Beth Cacal, a clerk of the
respondent, on October 28, 1997. The petitioners insist that Cacal is a
person with authority to receive legal and judicial correspondence for the
respondent's Legal Department. They point out that such authority to receive
mail for and in behalf of the respondent's Legal Department is bolstered by
the certification from the Makati Post Office that she received the copy of
their motion to dismiss the appeal, addressed to the said department.
The respondent GMC counters that the service of the LA's decision to a
person not connected to its Legal Department is not a valid service, and that
it is only when a copy of such decision is actually given to such department
that a valid service of the decision is deemed to have been made. Stressing
that factual issues are not proper in a petition for certiorari under Rule 45,
the respondent no longer discussed Cacal's authority to receive legal and
judicial communications for the respondent.
A review of the records reveal that Cacal was a clerk at the respondent's
office and was assigned at the sixth floor of the Corinthian Plaza Bldg. She
was not assigned at the respondent's Legal Department, which has its own
office staff, including a secretary who serves as the department's receiving
clerk.38 The Court has ruled that a service of a copy of a decision on a person
who is neither a clerk nor one in charge of the attorney's office is
invalid.39 Thus, there was no grave abuse of discretion on the part of the
NLRC in giving due course to the respondent's appeal.
On the second issue, we agree that the petitioners were employees with a
fixed period, and, as such, were not regular employees.
Article 280 of the Labor Code comprehends three kinds of employees: (a)
regular employees or those whose work is necessary or desirable to the
usual business of the employer; (b) project employees or those whose
employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season;
and, (c) casual employees or those who are neither regular nor project
employees.40
A regular employee is one who is engaged to perform activities which are
necessary and desirable in the usual business or trade of the employer as
against those which are undertaken for a specific project or are
seasonal.41There are two separate instances whereby it can be determined
that an employment is regular: (1) if the particular activity performed by the
employee is necessary or desirable in the usual business or trade of the
employer; and, (2) if the employee has been performing the job for at least a
year.42
In the case of St. Theresa's School of Novaliches Foundation vs. NLRC,43 we
held that Article 280 of the Labor Code does not proscribe or prohibit an
discharged private
employment.[5]
respondent
from
any
liability
arising
from
their
that will therefore exempt the respondent company from the effects of
Article 280.
Following the rule on precedents, we once again hold that the respective
employments of the present petitioners is not subject to a term but rather to
a condition, that is, progress accomplishment. As we have stated in De Jesus,
it cannot be said that their employment had been pre-determined because,
firstly, the duration of their work is contingent upon the progress
accomplishment and, secondly, the contract gives private respondent the
liberty to determine the personnel and the number as the work progresses. It
is ineluctably not definite so as to exempt private respondent from the
strictures and effects of Article 280.
To add our own observation, the appointments of petitioners herein were
not coterminous with NSC ETL #3 Civil Works but with the need for such
particular items of work as were assigned to them, as distinguished from the
completion of the project.
With such ambiguous and obscure words and conditions, petitioners
employment was not co-existent with the duration of their particular work
assignments because their employer could, at any stage of such work,
determine whether their services were needed or not. Their services could
then be terminated even before the completion of the phase of work
assigned to them.
We find this explication necessary and in accord with the principle that in
controversies between a laborer and his master, doubts reasonably arising
from the evidence, or in the interpretation of agreements and writings should
be resolved in the formers favor.[18]
To be exempted from the presumption of regularity of employment,
therefore, the agreement between a project employee and his employer
must strictly conform with the requirements and conditions provided in
Article 280. It is not enough that an employee is hired for a specific project or
phase of work. There must also be a determination of or a clear agreement
on the completion or termination of the project at the time the employee is
engaged if the objective of Article 280 is to be achieved. Since this second
requirement was not met in petitioners case, they should be considered as
regular employees despite their admissions and declarations that they are
project employees made under circumstances unclear to us.
after the completion of every project or item of work in which they were
previously employed, each over a span of about 10 years.
Public respondent contends that the gaps in the employment of
petitioners, consisting of the periods in between the completion of one
project and the engagement of petitioners in the next, show that they could
not have been regular employees under the control of private respondent,
and that petitioners could have applied for or accepted employment from
other employers during those periods. This is puerile and speculative.
In the first place, Article 280 of the Labor Code contemplates both
continuous and broken services. In the second place, there is absolutely no
evidence of petitioners having applied for or accepted such other or outside
employment during the brief interregna in the continuity of their work with
private respondent. Their undertaking in the Employment Terms and
Conditions of their service to private respondent bound them to work in such
place of work or project as DISC may assign or transfer them, with the
further agreement that they would so work during rest day, holidays, night
time and night shift or during emergencies.[21]
These are self-evident refutations of private respondents theory and
further bolster petitioners position that they were not mere employees
engaged for a single or particular project.They were thus removed from the
scope of project employment and considered as regular employees since
their employment as so-called project employees was extended long after
the termination of different projects.[22]
The fact that petitioners signed quitclaims will not bar them from
pursuing their claims against private respondent because quitclaims
executed by laborers are frowned upon as contrary to public policy, and are
ineffective to bar claims for the full measure of the workers legal rights.
[23]
The so-called quitclaims signed by petitioners were actually pro
forma provisions printed in the clearance certificate they had to get from
private respondent. These were not in the nature of a compromise but a
compulsory general release required from them, for which no consideration
was either given or even stated.
In answer to private respondents reliance on Department of Labor and
Employment (DOLE) Order No. 19, Series of 1993, which took effect on April
1, 1993, we have ruled in Samson vs. National Labor Relations Commission,
et al.[24] that said administrative order does not have retroactive effect. Since
the termination of petitioners services and the filing of their complaints took
place long before the effectivity of the said regulation, it cannot be applied in
favor of private respondent.
Besides, as expounded earlier, contrary to private respondents
insistence, the following badges of project employment are lacking in this
particular case, viz.: (1) the duration of the specific/identified undertaking for
which the worker is engaged is reasonably determinable, and (2) such
duration, as well as the specific work/service to be performed, is defined in
an employment agreement and made clear to the employee at the time of
hiring. Hence, even assuming for the moment that DOLE Order No. 19 is
effectual in the case at bar, private respondent cannot successfully invoke
the Order in its favor because the absence of the above indicia persuades us
all the more that petitioners are really regular employees of private
respondent.
WHEREFORE, the instant petition for certiorari is GRANTED. The
challenged resolution of the Fifth Division of respondent National Labor
Relations Commission dated November 15, 1994 in NLRC CA No. M-001233 is
REVERSED and SET ASIDE, and its earlier resolution therein dated August 17,
1994 is hereby REINSTATED.
SO ORDERED.
result, the cooperative hereby warrants that it will perform such work
or services in such manner as will be consistent with the achievement
of the result herein contracted for.
xxx
8. The cooperative undertakes to pay the wages or salaries of its
member-workers, as well as all benefits, premiums and protection in
accordance with the provisions of the labor code, cooperative code and
other applicable laws and decrees and the rules and regulations
promulgated by competent authorities, assuming all responsibility
therefor.
The cooperative further undertakes to submit to the company within
the first ten (10) days of every month, a statement made, signed and
sworn to by its duly authorized representative before a notary public or
other officer authorized by law to administer oaths, to the effect that
the cooperative has paid all wages or salaries due to its employees or
personnel for services rendered by them during the month
immediately preceding, including overtime, if any, and that such
payments were all in accordance with the requirements of law.
xxx
12. Unless sooner terminated for the reasons stated in paragraph 9 this
contract shall be for a period of one (1) year commencing on January 1,
1993. Thereafter, this Contract will be deemed renewed on a month-tomonth basis until terminated by either party by sending a written
notice to the other at least thirty (30) days prior to the intended date
of termination.
xxx3 (Underscoring supplied)
Pursuant to the contract, Sunflower engaged private respondents to, as they
did, render services at SMCs Bacolod Shrimp Processing Plant at Sta. Fe,
Bacolod City. The contract was deemed renewed by the parties every month
after its expiration on January 1, 1994 and private respondents continued to
perform their tasks until September 11, 1995.
In July 1995, private respondents filed a complaint before the NLRC, Regional
Arbitration Branch No. VI, Bacolod City, praying to be declared as regular
employees of SMC, with claims for recovery of all benefits and privileges
enjoyed by SMC rank and file employees.
Private respondents subsequently filed on September 25, 1995 an Amended
Complaint4 to include illegal dismissal as additional cause of action following
SMCs closure of its Bacolod Shrimp Processing Plant on September 15,
19955 which resulted in the termination of their services.
SMC filed a Motion for Leave to File Attached Third Party Complaint6 dated
November 27, 1995 to implead Sunflower as Third Party Defendant which
was, by Order7 of December 11, 1995, granted by Labor Arbiter Ray Alan T.
Drilon.
In the meantime, on September 30, 1996, SMC filed before the Regional
Office at Iloilo City of the Department of Labor and Employment (DOLE) a
Notice of Closure8 of its aquaculture operations effective on even date, citing
serious business losses.
By Decision of September 23, 1997, Labor Arbiter Drilon dismissed private
respondents complaint for lack of merit, ratiocinating as follows:
We sustain the stand of the respondent SMC that it could properly exercise
its management prerogative to contract out the preparation and processing
aspects of its aquaculture operations. Judicial notice has already been taken
regarding the general practice adopted in government and private
institutions and industries of hiring independent contractors to perform
special services. xxx
xxx
Indeed, the law allows job contracting. Job contracting is permissible under
the Labor Code under specific conditions and we do not see how this activity
could not be legally undertaken by an independent service cooperative like
the third-party respondent herein.
There is no basis to the demand for regularization simply on the theory that
complainants performed activities which are necessary and desirable in the
business of respondent. It has been held that the definition of regular
employees as those who perform activities which are necessary and
desirable for the business of the employer is not always
determinative because any agreement may provide for one (1) party to
render services for and in behalf of another for a consideration even without
being hired as an employee.
The charge of the complainants that third-party respondent is a mere laboronly contractor is a sweeping generalization and completely
unsubstantiated. xxx In the absence of clear and convincing evidence
showing that third-party respondent acted merely as a labor only contractor,
we are firmly convinced of the legitimacy and the integrity of its service
contract with respondent SMC.
In the same vein, the closure of the Bacolod Shrimp Processing Plant was a
management decision purely dictated by economic factors which was (sic)
mainly serious business losses. The law recognizes the right of the employer
to close his business or cease his operations for bonafide reasons, as much
as it recognizes the right of the employer to terminate the employment of
any employee due to closure or cessation of business operations, unless the
closing is for the purpose of circumventing the provisions of the law on
security of tenure. The decision of respondent SMC to close its Bacolod
Shrimp Processing Plant, due to serious business losses which has (sic)
clearly been established, is a management prerogative which could hardly be
interfered with.
xxx The closure did affect the regular employees and workers of the Bacolod
Processing Plant, who were accordingly terminated following the legal
requisites prescribed by law. The closure, however, in so far as the
complainants are concerned, resulted in the termination of SMCs service
contract with their cooperative xxx9(Underscoring supplied)
Private respondents appealed to the NLRC.
By Decision of December 29, 1998, the NLRC dismissed the appeal for lack of
merit, it finding that third party respondent Sunflower was an independent
contractor in light of its observation that "[i]n all the activities of private
respondents, they were under the actual direction, control and supervision of
third party respondent Sunflower, as well as the payment of wages, and
power of dismissal."10
Private respondents Motion for Reconsideration11 having been denied by the
NLRC for lack of merit by Resolution of September 10, 1999, they filed a
petition for certiorari12 before the Court of Appeals (CA).
Before the CA, SMC filed a Motion to Dismiss13 private respondents petition
for non-compliance with the Rules on Civil Procedure and failure to show
grave abuse of discretion on the part of the NLRC.
SMC subsequently filed its Comment14 to the petition on March 30, 2000.
By Decision of February 7, 2001, the appellate court reversed the NLRC
decision and accordingly found for private respondents, disposing as follows:
WHEREFORE, the petition is GRANTED. Accordingly, judgment is hereby
RENDERED: (1) REVERSING and SETTING ASIDE both the 29 December 1998
decision and 10 September 1999 resolution of the National Labor Relations
Commission (NLRC), Fourth Division, Cebu City in NLRC Case No. V-0361-97
as well as the 23 September 1997 decision of the labor arbiter in RAB Case
No. 06-07-10316-95; (2) ORDERING the respondent, San Miguel Corporation,
to GRANT petitioners: (a) separation pay in accordance with the computation
given to the regular SMC employees working at its Bacolod Shrimp
Processing Plant with full backwages, inclusive of allowances and other
benefits or their monetary equivalent, from 11 September 1995, the time
their actual compensation was withheld from them, up to the time of the
finality of this decision; (b) differentials pays (sic) effective as of and from the
time petitioners acquired regular employment status pursuant to the
disquisition mentioned above, and all such other and further benefits as
provided by applicable collective bargaining agreement(s) or other relations,
or by law, beginning such time up to their termination from employment on
11 September 1995; and ORDERING private respondent SMC to PAY unto the
petitioners attorneys fees equivalent to ten (10%) percent of the total
award.
No pronouncement as to costs.
SO ORDERED.15 (Underscoring supplied)
Justifying its reversal of the findings of the labor arbiter and the NLRC, the
appellate court reasoned:
Although the terms of the non-exclusive contract of service between SMC
and [Sunflower] showed a clear intent to abstain from establishing an
employer-employee relationship between SMC and [Sunflower] or the latters
members, the extent to which the parties successfully realized this intent in
the light of the applicable law is the controlling factor in determining the real
and actual relationship between or among the parties.
xxx
With respect to the power to control petitioners conduct, it appears
that petitioners were under the direct control and supervision of SMC
supervisors both as to the manner they performed their functions and as to
the end results thereof. It was only after petitioners lodged a complaint to
have their status declared as regular employees of SMC that certain
members of [Sunflower] began to countersign petitioners daily time records
to make it appear that they (petitioners) were under the control and
supervision of [Sunflower] team leaders (rollo, pp. 523-527). xxx
Even without these instances indicative of control by SMC over the
petitioners, it is safe to assume that SMC would never have allowed the
petitioners to work within its premises, using its own facilities, equipment
and tools, alongside SMC employees discharging similar or identical activities
unless it exercised a substantial degree of control and supervision over the
petitioners not only as to the manner they performed their functions but also
as to the end results of such functions.
xxx
xxx it becomes apparent that [Sunflower] and the petitioners do not qualify
as independent contractors.[Sunflower] and the petitioners did not have
substantial capital or investment in the form of tools, equipment,
implements, work premises, et cetera necessary to actually perform the
service under their own account, responsibility, and method. The only "work
premises" maintained by [Sunflower] was a small office within the confines of
a small "carinderia" or refreshment parlor owned by the mother of its chair,
Roy Asong; the only equipment it owned was a typewriter (rollo, pp. 525525) and, the only assets it provided SMC were the bare bodies of its
members, the petitioners herein (rollo, p. 523).
In addition, as shown earlier, petitioners, who worked inside the premises of
SMC, were under the control and supervision of SMC both as to
the manner and method in discharging their functions and as to
the resultsthereof.
Besides, it should be taken into account that the activities undertaken by the
petitioners as cleaners, janitors, messengers and shrimp harvesters, packers
and handlers were directly related to the aquaculture business of
SMC (See Guarin vs. NLRC, 198 SCRA 267, 273). This is confirmed by
the renewal of the service contract from January 1993 to September 1995, a
period of close to three (3) years.
Moreover, the petitioners here numbering ninety seven (97), by itself, is a
considerable workforce and raises the suspicion that the non-exclusive
service contract between SMC and [Sunflower] was "designed to evade the
obligations inherent in an employer-employee relationship" (See RhonePoulenc Agrochemicals Philippines, Inc. vs. NLRC, 217 SCRA 249, 259).
Equally suspicious is the fact that the notary public who signed the
by-laws of [Sunflower] and its [Sunflower] retained counsel are both
partners of the local counsel of SMC (rollo, p. 9).
xxx
With these observations, no other logical conclusion can be reached except
that [Sunflower] acted as an agent of SMC, facilitating the manpower
requirements of the latter, the real employer of the petitioners. We simply
cannot allow these two entities through the convenience of a non-exclusive
service contract to stipulate on the existence of employer-employee relation.
Such existence is a question of law which cannot be made the subject of
agreement to the detriment of the petitioners (Tabas vs. California
Manufacturing, Inc., 169 SCRA 497, 500).
xxx
There being a finding of "labor-only" contracting, liability must be shouldered
either by SMC or [Sunflower] or shared by both (See Tabas vs. California
Manufacturing, Inc., supra, p. 502). SMC however should be
heldsolely liable for [Sunflower] became non-existent with the closure
of the aquaculture business of SMC.
Furthermore, since the closure of the aquaculture operations of SMC appears
to be valid, reinstatement is no longer feasible. Consistent with the
pronouncement in Bustamante, et al., vs. NLRC, G.R. No. 111651, 28
November 1996, petitioners are thus entitled to separation pay (in the
computation similar to those given to regular SMC employees at its Bacolod
SMC bewails the failure of the appellate court to outrightly dismiss the
petition for certiorari as only three out of the ninety seven named petitioners
signed the verification and certification against forum-shopping.
While the general rule is that the certificate of non-forum shopping must be
signed by all the plaintiffs or petitioners in a case and the signature of only
one of them is insufficient,19 this Court has stressed that the rules on forum
shopping, which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective.20 Strict
compliance with the provisions regarding the certificate of non-forum
shopping merely underscores its mandatory nature in that the certification
cannot be altogether dispensed with or its requirements completely
disregarded.21It does not, however, thereby interdict substantial compliance
with its provisions under justifiable circumstances.22
Thus in the recent case of HLC Construction and Development Corporation v.
Emily Homes Subdivision Homeowners Association,23 this Court held:
Respondents (who were plaintiffs in the trial court) filed the complaint
against petitioners as a group, represented by their homeowners association
president who was likewise one of the plaintiffs, Mr. Samaon M.
Buat.Respondents raised one cause of action which was the breach of
contractual obligations and payment of damages. They shared a common
interest in the subject matter of the case, being the aggrieved residents of
the poorly constructed and developed Emily Homes Subdivision. Due to the
collective nature of the case, there was no doubt that Mr. Samaon M. Buat
could validly sign the certificate of non-forum shopping in behalf of all his coplaintiffs. In cases therefore where it is highly impractical to require all the
plaintiffs to sign the certificate of non-forum shopping, it is sufficient, in order
not to defeat the ends of justice, for one of the plaintiffs, acting as
representative, to sign the certificate provided that xxx the plaintiffs share
a common interest in the subject matter of the case or filed the case
as a "collective," raising only one common cause of action or
defense.24 (Emphasis and underscoring supplied)
Given the collective nature of the petition filed before the appellate court by
herein private respondents, raising one common cause of action against
SMC, the execution by private respondents Winifredo Talite, Renelito Deon
and Jose Temporosa in behalf of all the other private respondents of the
employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as
amended by Department Order No. 18, distinguishes between legitimate and
labor-only contracting:
Section 3. Trilateral Relationship in Contracting
Arrangements. In legitimate contracting, there exists a trilateral
relationship under which there is a contract for a specific job, work or service
between the principal and the contractor or subcontractor, and a contract of
employment between the contractor or subcontractor and its workers.
Hence, there are three parties involved in these arrangements, the principal
which decides to farm out a job or service to a contractor or subcontractor,
the contractor or subcontractor which has the capacity to independently
undertake the performance of the job, work or service, and the contractual
workers engaged by the contractor or subcontractor to accomplish the job,
work or service.
Section 5. Prohibition against labor-only contracting. Labor-only
contracting Sis hereby declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job,
work or service for a principal, and any of the following elements are present:
i) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed
and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the
main business of the principal, or
ii) The contractor does not exercise the right to control over the
performance of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of
Article 248 (c) of the Labor Code, as amended.
"Substantial capital or investment" refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor
While indeed Sunflower was issued Certificate of Registration No. IL087555 on February 10, 1992 by the Cooperative Development Authority, this
merely shows that it had at least P2,000.00 in paid-up share capital as
mandated by Section 5 of Article 1456 of Republic Act No. 6938, otherwise
known as the Cooperative Code, which amount cannot be considered
substantial capitalization.
What appears is that Sunflower does not have substantial capitalization or
investment in the form of tools, equipment, machineries, work premises and
other materials to qualify it as an independent contractor.
On the other hand, it is gathered that the lot, building, machineries and all
other working tools utilized by private respondents in carrying out their tasks
were owned and provided by SMC. Consider the following uncontroverted
allegations of private respondents in the Joint Affidavit:
[Sunflower], during the existence of its service contract with respondent
SMC, did not own a single machinery, equipment, or working tool used in the
processing plant. Everything was owned and provided by respondent SMC.
The lot, the building, and working facilities are owned by respondent SMC.
The machineries and equipments (sic) like washer machine, oven or cooking
machine, sizer machine, freezer, storage, and chilling tanks, push carts,
hydrolic (sic) jack, tables, and chairs were all owned by respondent SMC. All
the boxes, trays, molding pan used in the processing are also owned by
respondent SMC. The gloves and boots used by the complainants were also
owned by respondent SMC. Even the mops, electric floor cleaners, brush,
hoose (sic), soaps, floor waxes, chlorine, liquid stain removers, lysol and the
like used by the complainants assigned as cleaners were all owned and
provided by respondent SMC.
Simply stated, third-party respondent did not own even a small capital in the
form of tools, machineries, or facilities used in said prawn processing
xxx
The alleged office of [Sunflower] is found within the confines of a small
"carinderia" or "refreshment" (sic) owned by the mother of the Cooperative
Chairman Roy Asong.
xxx In said . . . office, the only equipment used and owned by [Sunflower]
was a typewriter. 57
And from the job description provided by SMC itself, the work assigned to
private respondents was directly relatedto the aquaculture operations of
SMC. Undoubtedly, the nature of the work performed by private respondents
in shrimp harvesting, receiving and packing formed an integral part of the
shrimp processing operations of SMC. As for janitorial and messengerial
services, that they are considered directly related to the principal business of
the employer58 has been jurisprudentially recognized.
Furthermore, Sunflower did not carry on an independent business or
undertake the performance of its service contract according to its own
manner and method, free from the control and supervision of its principal,
SMC, its apparent role having been merely to recruit persons to work for
SMC.
Thus, it is gathered from the evidence adduced by private respondents
before the labor arbiter that their daily time records were signed by SMC
supervisors Ike Puentebella, Joemel Haro, Joemari Raca, Erwin Tumonong,
Edison Arguello, and Stephen Palabrica, which fact shows that SMC exercised
the power of control and supervision over its employees.59 And control of the
premises in which private respondents worked was by SMC. These tend to
disprove the independence of the contractor.60
More. Private respondents had been working in the aqua processing plant
inside the SMC compound alongside regular SMC shrimp processing workers
performing identical jobs under the same SMC supervisors.61 This
circumstance is another indicium of the existence of a labor-only
contractorship.62
And as private respondents alleged in their Joint Affidavit which did not
escape the observation of the CA, no showing to the contrary having been
proffered by SMC, Sunflower did not cater to clients other than SMC,63 and
with the closure of SMCs Bacolod Shrimp Processing Plant, Sunflower
likewise ceased to exist. This Courts ruling in San Miguel Corporation v.
MAERC Integrated Services, Inc.64 is thus instructive.
xxx Nor do we believe MAERC to have an independent business. Not only
was it set up to specifically meet the pressing needs of SMC which was then
having labor problems in its segregation division, none of its workers was
also ever assigned to any other establishment, thus convincing us that it was
created solely to service the needs of SMC. Naturally, with the severance of
relationship between MAERC and SMC followed MAERCs cessation of
operations, the loss of jobs for the whole MAERC workforce and the resulting
actions instituted by the workers.65(Underscoring supplied)
All the foregoing considerations affirm by more than substantial evidence the
existence of an employer-employee relationship between SMC and private
respondents.
Since private respondents who were engaged in shrimp processing
performed tasks usually necessary or desirable in the aquaculture business
of SMC, they should be deemed regular employees of the latter66 and as such
are entitled to all the benefits and rights appurtenant to regular
employment.67 They should thus be awarded differential pay corresponding
to the difference between the wages and benefits given them and those
accorded SMCs other regular employees.1awphi1.zw+
Respecting the private respondents who were tasked with janitorial and
messengerial duties, this Court quotes with approval the appellate courts
ruling thereon:
Those performing janitorial and messengerial services however acquired
regular status only after rendering one-year service pursuant to Article 280
of the Labor Code. Although janitorial and messengerial services are
considered directly related to the aquaculture business of SMC, they are
deemed unnecessary in the conduct of its principal business; hence, the
distinction (See Coca Cola Bottlers Phils., Inc. v. NLRC, 307 SCRA 131, 136137 and Philippine Bank of Communications v. NLRC, supra, p. 359).68
The law of course 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.69
As for those of private respondents who were engaged in janitorial and
messengerial tasks, they fall under the second category and are thus entitled
to differential pay and benefits extended to other SMC regular employees
from the day immediately following their first year of service.70
Regarding the closure of SMCs aquaculture operations and the consequent
termination of private respondents, Article 283 of the Labor Code provides:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
1. Jose Dagle
7. Alejandro
Tejares
2. Rico Dagle
8. Gaudioso
Rombo
3. Ricardo Dagle
9. Martin Alas-as
Jr.
4. Jesus Silva
10. Cresensio
Abrega
Issues
Petitioners raise the following issues for the Court's consideration:
"A. Whether or not the Court of Appeals erred in holding that
respondents, admittedly seasonal workers, were regular employees,
contrary to the clear provisions of Article 280 of the Labor Code, which
categorically state that seasonal employees are not covered by the
definition of regular employees under paragraph 1, nor covered under
paragraph 2 which refers exclusively to casual employees who have
served for at least one year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling in
Mercado, . . . and relying instead on rulings which are not directly
applicable to the case at bench, viz, Philippine Tobacco, BacolodMurcia, and Gaco, . . .
13
xxx
xxx
". . . [T]he fact that [respondents] do not work continuously for one
whole year but only for the duration of the . . . season does not detract
from considering them in regular employment since in a litany of cases
this Court has already settled that seasonal workers who are called to
work from time to time and are temporarily laid off during off-season
are not separated from service in said period, but merely considered
on leave until re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable
to the case at bar. In the earlier case, the workers were required to perform
phases of agricultural work for a definite period of time, after which their
services would be available to any other farm owner. They were not hired
regularly and repeatedly for the same phase/s of agricultural work, but on
and off for any single phase thereof. On the other hand, herein respondents,
having performed the same tasks for petitioners every season for several
years, are considered the latter's regular employees for their respective
tasks. Petitioners' eventual refusal to use their services even if they were
ready, able and willing to perform their usual duties whenever these were
available and hiring of other workers to perform the tasks originally
assigned to respondents amounted to illegal dismissal of the latter.
The Court finds no reason to disturb the CA's dismissal of what petitioners
claim was their valid exercise of a management prerogative. The sudden
changes in work assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized themselves into
a union and started demanding collective bargaining. Those who were union
members were effectively deprived of their jobs. Petitioners' move actually
amounted to unjustified dismissal of respondents, in violation of the Labor
Code.
"Where there is no showing of clear, valid and legal cause for the termination
of employment, the law considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the termination was for a valid
and authorized cause." 16 In the case at bar, petitioners failed to prove any
such cause for the dismissal of respondents who, as discussed above, are
regular employees.
Second Issue:
Unfair Labor Practice
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled
as follows:
"Indeed, from respondents' refusal to bargain, to their acts of economic
inducements resulting in the promotion of those who withdrew from
the union, the use of armed guards to prevent the organizers to come
in, and the dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their haciendaa
clear interference in the right of the workers to self-organization." 17
We uphold the CA's affirmation of the above findings. Indeed, factual findings
of labor officials, who are deemed to have acquired expertise in matters
within their respective jurisdictions, are generally accorded not only respect
but even finality. Their findings are binding on the Supreme Court. 18 Verily,
their conclusions are accorded great weight upon appeal, especially when
supported by substantial evidence. 19 Consequently, the Court is not dutybound to delve into the accuracy of their factual findings, in the absence of a
clear showing that these were arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the
sanction of moral and exemplary damages." 21
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
MARTINEZ, J.:
These are consolidated petitions for review emanating from Civil Case No. Q93-15266 of the Regional Trial Court of Quezon City, Branch 78, entitled
"Metropolitan Waterworks and Sewerage System (hereafter MWSS) vs.
Capitol Hills Golf & Country Club Inc. (hereafter, CHGCCI), STC (hereafter,
SILHOUETTE), Ayala Corporation, Ayala Land, Inc. (hereafter AYALA) Pablo
Roman, Jr., Josefina A. Roxas, Jesus Hipolito, Alfredo Juinito, National Treasurer
of the Philippines and the Register of Deeds of Quezon City."
From the voluminous pleadings and other documents submitted by the
parties and their divergent styles in the presentation of the facts, the basic
antecedents attendant herein are as follows:
Sometime in 1965, petitioner MWSS (then known as NAWASA) leased around
one hundred twenty eight (128) hectares of its land (hereafter, subject
property) to respondent CHGCCI (formerly the International Sports
Development Corporation) for twenty five (25) years and renewable for
another fifteen (15) years or until the year 2005, with the stipulation allowing
the latter to exercise a right of first refusal should the subject property be
made open for sale. The terms and conditions of respondent CHGCCI's
purchase thereof shall nonetheless be subject to presidential approval.
Pursuant to Letter of instruction (LOI) No. 440 issued on July 29,1976 by then
President Ferdinand E. Marcos directing petitioner MWSS to negotiate the
cancellation of the MWSS-CHGCCI lease agreement for the disposition of the
subject property, Oscar Ilustre, then General Manager of petitioner MWSS,
sometime in November of 1980 informed respondent CHGCCI, through its
president herein respondent Pablo Roman, Jr., of its preferential right to buy
the subject property which was up for sale. Valuation thereof was to be made
by an appraisal company of petitioner MWSS' choice, the Asian Appraisal Co.,
Inc. which, on January 30, 1981, pegged a fair market value of P40.00 per
square meter or a total of P53,800,000.00 for the subject property.
Upon being informed that petitioner MWSS and respondent CHGCCI had
already agreed in principle on the purchase of the subject property, President
Marcos expressed his approval of the sale as shown in his marginal note on
the letter sent by respondents Jose Roxas and Pablo Roman, Jr. dated
December 20, 1982.
The Board of Trustees of petitioner MWSS thereafter passed Resolution 3683, approving the sale of the subject property in favor of respondent
SILHOUETTE, as assignee of respondent CHGCCI, at the appraised value
given by Asian Appraisal Co., Inc. Said Board Resolution reads:
NOW, THEREFORE, BE IT RESOLVED, as it is hereby resolved, that
in accordance with Section 3, Par. (g) of the MWSS Charter and
subject to the approval of the President of the Philippines, the
sale of a parcel of land located in Balara, Quezon City, covered
by TCT No. 36069 of the Registry of Deeds of Quezon City,
containing an area of ONE HUNDRED TWENTY SEVEN (127.313)
hectares more or less, which is the remaining portion of the area
under lease after segregating a BUFFER ZONE already surveyed
along the undeveloped area near the treatment plant and the
developed portion of the CHGCCI golf course, to SILHOUETTE
TRADING CORPORATION as Assignee of Capitol Hills Golf &
Country Club, Inc., at FORTY (P40.00) PESOS per square meter,
be and is hereby approved.
BE IT RESOLVED FURTHER, that the General Manager be
authorized, as he is hereby authorized to sign for and in behalf of
the MWSS the contract papers and other pertinent documents
relative thereto.
Ruling upon these motions, the trial court issued an order dated December
13, 1993 denying all of them. The motions for reconsideration of the
respondents concerned met a similar fate in the May 9, 1994 Order of the
trial court. They thus filed special civil actions for certiorari before the
respondent Court which were docketed as CA-G.R. SP Nos. 34605, 34718 and
35065 and thereafter consolidated with CA-G.R. CV No. 50694 for disposition.
Respondent court, on August 19, 1996, rendered the assailed decision, the
dispositive portion of which reads:
WHEREFORE, judgment is rendered:
1.) DENYING the petitions for writ of certiorari for lack of merit;
and
2.) AFFIRMING the order of the lower court dismissing the
complaint against the appellees Ayalas.
SO ORDERED.
Petitioner MWSS appealed to this Court that portion of the respondent
Court's decision affirming the trial court's dismissal of its complaint against
respondent AYALA, docketed as G.R. No. 126000. The portion dismissing the
petition for certiorari (CA-GR Nos. 34605, 347718 and 35065) of respondents
Roman, CHGCCI and SILHOUETTE, however, became final and executory for
their failure to appeal therefrom. Nonetheless, these respondents were able
to thereafter file before the trial court another motion to dismiss grounded,
again, on prescription which the trial court in an Order of October 1996
granted.
This prompted petitioner MWSS to file another petition for review of said trial
court Order before this Court and docketed as G.R. No. 128520. On motion of
petitioner MWSS, this Court in a Resolution dated December 3, 1997 directed
the consolidation of G.R. Nos. 126000 and 128520.
The errors assigned by petitioner MWSS in CA-GR No. 126000 are:
I.
In holding, per the questioned Decision dated 19 August 1996,
that plaintiffs cause of action is for annulment of contract which
that determines the nature of the action. True, the caption and
prayer of the Complaint state that the action is for a judicial
declaration of nullity of a contract, but alas, as already pointed
out, its body unmistakably alleges only a voidable contract. One
cannot change the real nature of an action adopting a different
nomenclature any more than one can change gin into whisky by
just replacing the label on the bottle with that of the latter's and
calling it whisky. No matter what, the liquid inside remains gin.
xxx xxx xxx
Petitioner MWSS also theorizes that the May 11, 1983 MWSS-SILHOUTTE
Agreement and the August 11, 1983 Supplemental Agreement were void ab
initio because the "initial agreement" from which these agreements
emanated was executed "without the knowledge, much less the approval" of
petitioner MWSS through its Board of Trustees. The "initial agreement"
referred to in petitioner MWSS' argument is the December 20, 1982 letter of
respondents Roxas and Roman, Jr. to President Marcos where the authors
mentioned that they had reached an agreement with petitioner's then
general manager, Mr. Oscar Ilustre. Petitioner MWSS maintains that Mr.
Ilustre was not authorized to enter into such "initial agreement", contrary to
Art. 1874 of the New Civil Code which provides that "when a sale of a parcel
of land or any interest therein is through an agent, the authority of the latter
shall be in writing otherwise the sale shall be void." It then concludes that
since its Res. No. 36-83 and the May 11, 1983 and August 11, 1983
Agreements are "fruits" of the "initial agreement" (for which Mr. Ilustre was
allegedly not authorized in writing), all of these would have been also void
under Art. 1422 of NCC, which provides that a contract which is the direct
result of a pronounced illegal contract, is also void and inexistent."
The argument does not impress. The "initial agreement" reflected in the
December 20, 1982 letter of respondent Roman to Pres. Marcos, is not a sale
under Art. 1874. Since the nature of the "initial agreement" is crucial, we
quotes 8 the letter in full:
We respectfully approach Your Excellency in all humility and in
the spirit of the Yuletide Season. We have explained to Your
Excellency when you allowed us the honor to see you, that the
negotiations with MWSS which the late Pablo R. Roman initiated
WPP MARKETING
COMMUNICATIONS, INC.,
JOHN STEEDMAN,
MARK WEBSTER, and
NOMINADA LANSANG,
Petitioners,
- versus -
Present:
WPP MARKETING
COMMUNICATIONS, INC.,
JOHN STEEDMAN,
MARK WEBSTER, and
NOMINADA LANSANG,
Respondents.
DECISION
CARPIO, Acting C.J.:
The Case
G.R. Nos. 169207 and 169239 are petitions for review [1] assailing the
Decision[2] promulgated
on
14
April
2005
as
well
as
the
[3]
Resolution promulgated on 1 August 2005 of the Court of Appeals
(appellate court) in CA-G.R. SP No. 78721. The appellate court granted and
gave due course to the petition filed by Jocelyn M. Galera (Galera). The
appellate courts decision reversed and set aside that of the National Labor
The Facts
The appellate court narrated the facts as follows:
Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen
who was recruited from the United States of America by private
respondent John Steedman, Chairman-WPP Worldwide and Chief
Executive Officer of Mindshare, Co., a corporation based in Hong
Kong, China, to work in the Philippines for private respondent
WPP Marketing Communications, Inc. (WPP), a corporation
registered and operating under the laws of Philippines. GALERA
accepted the offer and she signed an Employment Contract
entitled Confirmation of Appointment and Statement of Terms
and Conditions (Annex B to Petition for Certiorari). The relevant
portions of the contract entered into between the parties are as
follows:
Particulars:
Name: Jocelyn M. Galera
Address: 163 Mediterranean Avenue
Hayward, CA 94544
Position: Managing Director
Mindshare Philippines
Annual Salary: Peso 3,924,000
Start Date: 1 September 1999
Commencement Date: 1 September 1999
(for continuous service)
Office: Mindshare Manila
6. Housing Allowance
The Company will provide suitable housing in Manila
at a maximum cost (including management fee and
other associated costs) of Peso 576,000 per annum.
7. Other benefits.
In
his
Decision
dated
31
January
2002,
Labor
Arbiter Edgardo M. Madriaga (Arbiter Madriaga)
held
WPP, Steedman,
Webster,
and Lansang liable
for
illegal
dismissal
and
damages. Arbiter Madriaga stated
that Galera was
not
only
illegally
dismissed
but
was
also
not
accorded
due
process. Arbiter Madriaga explained, thus:
[WPP] failed to observe the two-notice rule. [WPP] through
respondent Steedman for a five (5) minute meeting on December
14, 2000 where she was verbally told that as of that day, her
employment was being terminated. [WPP] did not give [Galera]
an opportunity to defend herself and explain her side. [Galera]
was even prohibited from reporting for work that day and was
told not to report for work the next day as it would be awkward
for her and respondent Steedman to be in the same premises
after her termination. [WPP] only served [Galera] her written
notice of termination only on 15 December 2001, one day after
she was verbally apprised thereof.
The law mandates that the dismissal must be properly
done otherwise, the termination is gravely defective and may be
declared unlawful as we hereby hold [Galeras] dismissal to be
illegal and unlawful. Where there is no showing of a clear, valid
and legal cause for the termination of employment, the law
considers the matter a case of illegal dismissal and the burden is
on the employer to prove that the termination was for a valid or
authorized cause. The law mandates that both the substantive
and procedural aspects of due process should be observed. The
facts clearly show that respondents were remiss on both
aspects. Perforce, the dismissal is void and unlawful.
xxxx
Considering the work performance and achievements of [Galera]
for the year 2000, we do not find any basis for the alleged claim
of incompetence by herein respondents. Had [Galera] been really
incompetent, she would not have been able to generate
enormous amounts [sic] of revenues and business for [WPP]. She
also appears to be well liked as a leader by her subordinates,
who have come forth in support of [Galera]. These facts remain
undisputed by respondents.
A mans job being a property right duly protected by our laws, an
employer who deprives an employee [of] the right to defend
himself is liable for damages consistent with Article 32 of the
Civil Code. To allow an employer to terminate the employment of
his worker based merely on allegations without proof places the
[employee] in an uncertain situation. The unflinching rule in
illegal dismissal cases is that the employer bears the burden of
proof.
In the instant case, respondents have not been able to muster
evidence to counter [Galeras] allegations. [Galeras] allegations
remain and stand absent proof from respondents rebutting
them.Hence, our finding of illegal dismissal against respondents
who clearly have conspired in bad faith to deprive [Galera] of her
right to substantive and procedural due process.[5]
Reinstatement
without
loss
of
seniority
b.
Backwages amounting to $120,000 per year
at P50.00 to US $1 exchange rate, 13th month pay,
transportation and housing benefits.
c.
Remuneration for business acquisitions
amounting to Two Million Eight Hundred Fifty Thousand
Pesos (P2,850,000.00) and Media Plowback Incentive
equivalent to Three Million Pesos (P3,000,000.00) or a total
equivalent
to
One
SO ORDERED.[6]
election as Vice President for Media on May 31, 2000 was subject
to approval by the SEC, she continued to hold her previous
position as Vice President under the December 31, 1999 election
until such time that her successor is duly elected and qualified. It
is a basic principle in corporation law, which principle is also
embodied in WPPs by-laws, that a corporate officer continues to
hold his position as such until his successor has been duly
elected and qualified. When Ms. Galera was elected as Vice
President on December 31, 1999, she was supposed to have held
that position until her successor has been duly elected and
qualified. The record shows that Ms. Galera was not replaced by
anyone. She continued to be Vice President of WPP with the
same operational title of Managing Director for Mindshare and
continued to perform the same functions she was performing
prior to her May 31, 2000 election.
In
the
recent
case
of Dily Dany Nacpil v.
International
Broadcasting Corp., the definition of corporate officer for
purposes of intra-corporate controversy was even broadened to
include a Comptroller/Assistant Manager who was appointed by
the General Manager, and whose appointment was later
approved by the Board of Directors. In this case, the position of
comptroller was not even expressly mentioned in the By-Laws of
the corporation, and yet, the Supreme Court found him to be a
corporate officer. The Court ruled that
(since) petitioners appointment as comptroller
required the approval and formal action of IBCs
Board of Directors to become valid, it is clear
therefore that petitioner is a corporate officer whose
dismissal may be the subject of a controversy
cognizable by the SEC... Had the petitioner been an
ordinary employee, such board action would not
have been required.
Such being the case, the imperatives of law require that we hold
that the Arbiter below had no jurisdiction over Galeras case as,
again, she was a corporate officer at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor
Arbiter Edgardo Madriaga dated January 31, 2002 and his Order
dated March 21, 2002, respectively, are granted. The January 31,
2002 decision of the Labor Arbiter is set aside for being null and
void and the temporary restraining order we issued on April 24,
2002
is
hereby
made
permanent. The
complaint
Jocelyn Galera is dismissed for lack of jurisdiction.
of
SO ORDERED.[8]
In its Resolution[9] promulgated on 4 June 2003, the NLRC further stated:
We are fully convinced that this is indeed an intra-corporate
dispute which is beyond the labor arbiters jurisdiction. These
consolidated cases clearly [involve] the relationship between a
corporation and its officer and is properly within the definition of
an intra-corporate relationship which, under P.D. No. 902-A, is
within the jurisdiction of the SEC (now the commercial courts).
Such being the case, We are constrained to rule that the Labor
Arbiter below had no jurisdiction over Ms. Galeras complaint for
illegal dismissal.
WHEREFORE, the motion for reconsideration filed by
Ms. Galera is hereby denied for lack of merit. We reiterate our
February 19, 2003 Decision setting aside the Labor Arbiters
Decision dated January 31, 2002 for being null and void.
SO ORDERED.[10]
Galera assailed the NLRCs decision and resolution before the appellate court
and raised a lone assignment of error.
The National Labor Relations Commission acted with grave abuse
of discretion amounting to lack or excess of jurisdiction when
it reversed the decision of the Labor Arbiter not on the merits
but for alleged lack of jurisdiction.[11]
The appellate court reversed and set aside the decision of the NLRC. The
appellate court ruled that the NLRCs dismissal of Galeras appeal is not in
accord with jurisprudence. A person could be considered a corporate officer
only if appointed as such by a corporations Board of Directors, or if pursuant
to the power given them by either the Articles of Incorporation or the ByLaws.[12]
2.
Pay
x x x GALERA
the
peso
equivalent
US$185,000.00 separation pay (1 years);
3.
4.
Pay
x x x GALERA
the
reduced
PhP2,000,000.00 as moral damages;
5.
6.
7.
amount
of
of
SO ORDERED.[14]
II.
On the other hand, in G.R. No. 169239, Galera raised the following
grounds in support of her petition:
The CA decision should be consistent with Article 279 of the
Labor
Code
and
applicable
jurisprudence,
that
full backwages and
separation
pay
(when
in
lieu
of
reinstatement), should be reckoned from time of dismissal up to
time of reinstatement (or payment of separation pay, in case
separation instead of reinstatement is awarded).
Accordingly,
petitioner Galera should
be
awarded
full backwages and separation pay for the period from 14
December 2000 until the finality of judgment by the
respondents, or, at the very least, up to the promulgation date of
the CA decision.
The
individual
respondents Steedman,
Webster
and Lansang must be held solidarily liable with respondent WPP
This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a
resolution dated 16 January 2006.[18]
An
examination
of WPPs by-laws
resulted
in
a
finding
that Galeras appointment as a corporate officer (Vice-President with the
operational title of Managing Director of Mindshare) during a special meeting
of WPPs Board of Directors is an appointment to a non-existent corporate
office. WPPs by-laws provided for only one Vice-President. At the time
of Galeras appointment on 31 December 1999, WPP already had one VicePresident in the person of Webster. Galera cannot be said to be a director of
WPP also because all five directorship positions provided in the by-laws are
already occupied. Finally, WPP cannot rely on its Amended By-Laws to
support its argument that Galera is a corporate officer. The Amended ByLaws provided for more than one Vice-President and for two additional
directors. Even though WPPs stockholders voted for the amendment on 31
May 2000, the SEC approved the amendments only on 16 February
2001. Galera was dismissed on 14 December 2000. WPP, Steedman,
Webster, and Lansang did not present any evidence that Galeras dismissal
took effect with the action of WPPs Board of Directors.
The appellate court further justified that Galera was an employee and not a
corporate officer by subjecting WPP and Galeras relationship to the four-fold
test: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employers power to control
the employee with respect to the means and methods by which the work is
to be accomplished. The appellate court found:
x x x Sections 1 and 4 of the employment contract mandate
where and how often she is to perform her work; sections 3, 5, 6
and 7 show that wages she receives are completely controlled by
xx x WPP; and sections 10 and 11 clearly state that she is subject
to the regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular employee and not a
corporate officer is Section 14 of the contract, which clearly
states that she is a permanent employee not a Vice-President or
a member of the Board of Directors.
xxxx
Another indication that the Employment Contract was one of
regular employment is Section 12, which states that the rights to
1.
2.
Termination disputes;
3.
If
accompanied
with
a
claim
for
reinstatement, those cases that workers may file involving
wages, rates of pay, hours of work and other terms and
conditions of employment;
4.
Claims for actual, moral, exemplary and other
forms of damages arising from the employer-employee
relations;
5.
Cases arising from any violation of Article
264 of this Code, including questions involving the legality
of strikes and lockouts;
6.
Except claims for Employees Compensation,
Social Security, Medicare and other maternity benefits, all
other claims, arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with
a claim for reinstatement.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective
bargaining agreements and those arising from the
interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by
referring the same to the grievance machinery and
voluntary arbitration as may be provided in said
agreements.
In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation
Code, states:
The Commissions jurisdiction over all cases enumerated under
Section 5 of Presidential Decree No. 902-A is hereby transferred
to the courts of general jurisdiction or the appropriate Regional
Trial Court: Provided, That the Supreme Court in the exercise of
its authority may designate the Regional Trial Court branches
Apart from Steedmans letter dated 15 December 2000 to Galera, WPP failed
to prove any just or authorized cause for Galeras dismissal. Steedmans letter
to Galera reads:
The operations are currently in a shamble. There is lack of
leadership and confidence in your abilities from within, our
agency partners and some clients.
Most of the staff I spoke with felt they got more guidance and
direction from Minda than yourself. In your role as Managing
Director, that is just not acceptable.
I believe your priorities are mismanaged. The recent situation
where you felt an internal strategy meeting was more important
than a new business pitch is a good example.
You failed to lead and advise on the two new business pitches. In
both cases, those involved sort (sic) Mindas input. As I discussed
with you back in July, my directive was for you to lead and review
all business pitches. It is obvious [that] confusion existed
internally right up until the day of the pitch.
The quality output is still not to an acceptable standard, which
was also part of my directive that you needed to focus on back in
July.
I do not believe you understand the basic skills and industry
knowledge required to run a media special operation.[21]
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the
allegations in Steedmans letter. Galera, on the other hand, presented
documentary evidence[22] in the form of congratulatory letters, including one
from Steedman, which contents are diametrically opposed to the 15
December 2000 letter.
The law further requires that the employer must furnish the worker sought to
be dismissed with two written notices before termination of employment can
be legally effected: (1) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought; and (2) the subsequent
notice which informs the employee of the employers decision to dismiss
him. Failure to comply with the requirements taints the dismissal with
illegality.[23] WPPs acts clearly show that Galeras dismissal did not comply
with the two-notice rule.
Whether Galera is entitled to the monetary award
WPP, Steedman, Webster, and Lansang argue that Galera is not entitled
to backwages because she is an alien. They further state that there is no
guarantee that the Bureau of Immigration and the Department of Labor and
Employment will continue to grant favorable rulings on the applications for a
9(g) visa and an Alien Employment Permit after the expiry of the validity
of Galeras documents on 31 December 2000. WPPs argument is a circular
argument, and assumes what it attempts to prove. Had WPP not
dismissedGalera, there is no doubt in our minds that WPP would have taken
action for the approval of documents required for Galeras continued
employment.
This is Galeras dilemma: Galera worked in the Philippines without a proper
work permit but now wants to claim employees benefits under Philippine
labor laws.
Employment of GALERA with private respondent WPP
became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without
any further action from the Board of Directors of
private respondent WPP.
Four months had passed when private respondent WPP
filed before the Bureau of Immigration an application for
petitioner GALERA to receive a working visa, wherein she
was designated as Vice President of WPP. Petitioner alleged that
she was constrained to sign the application in order that she
could remain in the Philippines and retain her employment.[24]
The law and the rules are consistent in stating that the employment permit
must be acquired prior to employment. The Labor Code states: Any alien
seeking admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the
Department of Labor.[25] Section 4, Rule XIV, Book 1 of the Implementing
Rules and Regulations provides:
Employment permit required for entry. No alien seeking
employment, whether as a resident or non-resident, may enter
the Philippines without first securing an employment permit from
the Ministry. If an alien enters the country under a non-working
visa and wishes to be employed thereafter, he may only be
Your Honor:
Apropos to the complaints filed by NICOLAS MADOLID with your honorable
office are as stated and corresponding allegations as our defense to said
complaints.
A. ILLEGAL DISMISSAL- There is no course (sic) to complain since
employment contract signed by complainant with respondent is coterminus with the project. xxx
B. UNPAID WAGES- Admitting that salary payment was delayed due to
late remittance of collection from respondents Japanese prime
contractor but nonetheless settled with complainant as evidenced
by signed Payroll Slips by complainant. xxx
C. NON-PAYMENT OF 13th MONTH PAY- As earlier admitted, there
was a relative delay in the remittance of collection payment from
our Japanese prime contractor but respondent knowing the
economic predecament (sic) of complainant has seen to it that
respondent be satisfied without awaiting for remittance of 13th
month from its Japanese contractor. attached is a xxx
In full satisfaction of the enumerated complaints made by complainant
NICOLAS MADOLID against respondent THE AUDION ELECTRIC CO., INC., we
pray that charges against respondent be withdrawn and dropped.[3]
On November 15, 1990, Labor Arbiter Cresencio R. Iniego rendered a
decision, the dispositive portion states:
WHEREFORE, judgment is hereby rendered ordering respondent Audion
Electric Co., Inc. and/or Robert S. Coran, Manager:
1. to reinstate complainant Nicolas Madolid to his former position with
full backwages from the date of his dismissal on August 15, 1989
up to the signing of this decision without loss of seniority rights in
the amount of P34,710.00;
2. to pay complainant his overtime pay for the period March 16 to
April 3, 1989 in the amount of P 765.63;
3. to pay complainant his project allowances as follows:
Private
respondents
employment
status
was
established
by
the Certification of Employment dated April 10, 1989 issued by petitioner
which certified that private respondent is a bonafide employee of the
petitioner from June 30, 1976 up to the time the certification was issued on
April 10, 1989. The same certificate of employment showed that private
respondents exposure to their field of operation was as fabricator,
helper/electrician, stockman/timekeeper. This proves that private respondent
was regularly and continuously employed by petitioner in various job
assignments from 1976 to 1989, for a total of 13 years. The alleged gap in
employment service cited by petitioner does not defeat private respondents
regular status as he was rehired for many more projects without interruption
and performed functions which are vital, necessary and indispensable to the
usual business of petitioner.
We have held that where the employment of project employees is
extended long after the supposed project has been finished, the employees
are removed from the scope of project employees and considered regular
employees.[10] Private respondent had presented substantial evidence to
support his position, while petitioner merely presented an unverified position
paper merely stating therein that private respondent has no cause to
complain since the employment contract signed by private respondent with
petitioner was co-terminous with the project. Notably, petitioner failed to
present such employment contract for a specific project signed by private
respondent that would show that his employment with the petitioner was for
the duration of a particular project. Moreover, notwithstanding petitioners
claim in its reply that in taking interest in the welfare of its workers,
petitioner would strive to provide them with more continuous work by
successively employing its workers, in this case, private respondent,
petitioner failed to present any report of termination. Petitioner should have
submitted or filed as many reports of termination as there were construction
projects actually finished, considering that private respondent had been
hired since 1976. The failure of petitioner to submit reports of termination
supports the claim of private respondent that he was indeed a regular
employee.
Policy Instruction No. 20 of the Department of Labor is explicit that
employers of project employees are exempted from the clearance
requirement but not from the submission of termination report. This court
has consistently held that failure of the employer to file termination reports
after every project completion with the nearest public employment office is
an indication that private respondent was not and is not a project employee.
[11]
Department Order No. 19 superseding Policy Instruction No. 20 expressly
provides that the report of termination is one of the indications of project
employment.[12]
As stated earlier, the rule in our jurisdiction is that findings of facts of the
NLRC affirming those of the Labor Arbiter are entitled to great weight and will
not be disturbed if they are supported by substantial evidence. [13] Substantial
evidence is an amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion. [14] We find no grave abuse of
discretion committed by NLRC in finding that private respondent was not a
project employee.
Our ruling in the case of Sandoval Shipyard vs. NLRC, supra, is not in
point. In the said case, the hiring of construction workers was not continuous
for the reason that the shipyard merely accepts contracts for shipbuilding or
for repair of vessels from third parties and, it is only on occasions when it has
work contracts of this nature that it hires workers for the job which lasts only
for less than a year or longer. With respect to Cartagenas vs. Romago Electric
Co. also relied upon by the petitioner, the complainants were considered
project employees because they were issued appointments from project to
project, which were co-terminous with the phase or item of work assigned to
them in said project, a situation which is not obtaining in the instant case.
Petitioner further claims that respondent Commission erred in sustaining
the awards for overtime pay, project allowances, minimum wage increase
adjustment and proportionate 13th month pay to private respondent in the
absence of any substantial evidence supporting the same; that private
respondent failed to present any documentary evidence other than his selfserving allegation that he actually rendered overtime work and that he failed
to specify in his position paper the actual number of overtime work alleged
to have been rendered; that in petitioners letter-communication filed with the
labor arbiter, it showed that claims for allowances and salary differential and
13th month pay were already satisfied although petitioner admitted that
there was a delay in the payment which was not rebutted by private
respondent.
We find no merit in petitioners contention.
Private respondent clearly specified in his affidavit the specific dates in
which he was not paid overtime pay, that is, from the period March 16, 1989
to April 3, 1989 amounting to P765.63, project allowance from April 16, 1989
to July 31, 1989 in the total amount of P255.00, wage adjustment for the
period from August 1, 1989 to August 14, 1989 in the amount of P256.50 and
the proportionate 13th month pay for the period covering January to May
1988, November-December 1988, and from January to August 1989. This
same affidavit was confirmed by private respondent in one of the scheduled
hearings where he moved that he be allowed to present his evidence exparte for failure of petitioner or any of his representative to appear
thereat. On the other hand, petitioner submitted its unverified Comment to
private respondents complaint stating that he had already satisfied the
unpaid wages and 13th month pay claimed by private respondent, but this
was not considered by the Labor Arbiter for being unverified. As a rule, one
who pleads payment has the burden of proving it. Even where the plaintiff
must allege non-payment, the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove nonpayment.[15] The debtor has the burden of showing with legal certainty that
the obligation has been discharged by payment.[16] Petitioner failed to rebut
the claims of private respondent. It failed to show proof by means of payroll
or other evidence to disprove the claim of private respondent. Petitioner was
given the opportunity to cross-examine private respondent yet petitioner
forfeited such chance when it did not attend the hearing, and failed to rebut
the claims of private respondent.
Petitioners contention that it was denied due process when it was not
given the chance to cross-examine the adverse party and his witnesses, is
devoid of merit. The essence of due process is simply an opportunity to be
heard[17] or as applied to administrative proceedings, an opportunity to
explain ones side or an opportunity to seek a reconsideration of the action or
ruling complained of.[18] What the law prohibits is absolute absence of the
opportunity to be heard; hence, a party cannot feign denial of due process
where he had been afforded the opportunity to present his side. [19] Petitioner
was not denied due process. As the respondent commission observed:
The case was initially set for hearing on September 12, 1989 wherein
complainant himself appeared. Respondents representative appeared
late. For this reason, the case was reset to September 26, 1989 at 9:30 a.m.
wherein both parties appeared. Complainant filed his position paper and
respondents through its project manager filed a one-page unverified
communication stating therein its defense. The case was then reset to
October 9 and 10, 1990 both at 3:00 p.m. warning the parties that no further