Matling Industrial and Commercial Corporation vs
Coros
G.R. No. 157802 October 13, 2010
Facts:
After his dismissal by Matling as its Vice President for
Finance and Administration, the respondent filed on
August 10, 2000 a complaint for illegal suspension and
illegal dismissal against Matling and some of its
corporate officers (petitioners) in the NLRC, Sub-
Regional Arbitration Branch XII, Iligan City. The
petitioners moved to dismiss the complaint, raising the
ground, among others, that the complaint pertained to
the jurisdiction of the Securities and Exchange
Commission (SEC) due to the controversy being
intracorporate inasmuch as the respondent was a
member of Matlings Board of Directors aside from being
its Vice-President for Finance and Administration prior to
his termination. The respondent opposed the petitioners
motion to dismiss, insisting that his status as a member
of Matlings Board of Directors was doubtful, considering
that he had not been formally elected as such; that he
did not own a single share of stock in Matling,
considering that he had been made to sign in blank an
undated indorsement of the certificate of stock he had
been given in 1992; that Matling had taken back and
retained the certificate of stock in its custody; and that
even assuming that he had been a Director of Matling,
he had been removed as the Vice President for Finance
and Administration, not as a Director, a fact that the
notice of his termination dated April 10, 2000 showed.
On October 16, 2000, the LA granted the petitioners
motion to dismiss, ruling that the respondent was a
corporate officer because he was occupying the position
of Vice President for Finance and Administration and at
the same time was a Member of the Board of Directors
of Matling; and that, consequently, his removal was a
corporate act of Matling and the controversy resulting
from such removal was under the jurisdiction of the SEC,
pursuant to Section 5, paragraph (c) of Presidential
Decree No. 902.
Issue: Whether or not the respondent is a corporate
officer within the jurisdiction of the regular courts.
Held:
No. As a rule, the illegal dismissal of an officer or other
employee of a private employer is properly cognizable
by the LA. This is pursuant to Article 217 (a) 2 of the
Labor Code, as amended, which provides as follows:
Article 217. Jurisdiction of the Labor Arbiters and
the Commission. – (a) Except as otherwise provided
under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases;
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; and
6. Except claims for Employees Compensation, Social
Security, Medicare and 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 (P 5,000.00) 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 or implementation
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.
Where the complaint for illegal dismissal concerns a
corporate officer, however, the controversy falls under
the jurisdiction of the Securities and Exchange
Commission (SEC), because the controversy arises out
of intra-corporate or partnership relations between and
among stockholders, members, or associates, or
between any or all of them and the corporation,
partnership, or association of which they are
stockholders, members, or associates, respectively; and
between such corporation, partnership, or association
and the State insofar as the controversy concerns their
individual franchise or right to exist as such entity; or
because the controversy involves the election or
appointment of a director, trustee, officer, or manager of
such corporation, partnership, or association. Such
controversy, among others, is known as an intra-
corporate dispute.
Effective on August 8, 2000, upon the passage of
Republic Act No. 8799, otherwise known as The
Securities Regulation Code, the SECs jurisdiction over
all intra-corporate disputes was transferred to the RTC,
pursuant to Section 5.2 of RA No. 8799.
Thus, pursuant to the above provision (Section 25 of the
Corporation Code), whoever are the corporate officers
enumerated in the by-laws are the exclusive Officers of
the corporation and the Board has no power to create
other Offices without amending first the corporate By-
laws. However, the Board may create appointive
positions other than the positions of corporate Officers,
but the persons occupying such positions are not
considered as corporate officers within the meaning of
Section 25 of the Corporation Code and are not
empowered to exercise the functions of the corporate
Officers, except those functions lawfully delegated to
them. Their functions and duties are to be determined by
the Board of Directors/Trustees.
Moreover, the Board of Directors of Matling could not
validly delegate the power to create a corporate office to
the President, in light of Section 25 of the Corporation
Code requiring the Board of Directors itself to elect the
corporate officers. Verily, the power to elect the
corporate officers was a discretionary power that the law
exclusively vested in the Board of Directors, and could
not be delegated to subordinate officers or agents. The
office of Vice President for Finance and Administration
created by Matlings President pursuant to By Law No. V
was an ordinary, not a corporate, office.
The criteria for distinguishing between corporate officers
who may be ousted from office at will, on one hand, and
ordinary corporate employees who may only be
terminated for just cause, on the other hand, do not
depend on the nature of the services performed, but on
the manner of creation of the office. In the respondents
case, he was supposedly at once an employee, a
stockholder, and a Director of Matling. The
circumstances surrounding his appointment to office
must be fully considered to determine whether the
dismissal constituted an intra-corporate controversy or a
labor termination dispute. We must also consider
whether his status as Director and stockholder had any
relation at all to his appointment and subsequent
dismissal as Vice President for Finance and
Administration
G.R. No. 200575 : February 5, 2014
INTEL TECHNOLOGY PHILIPPINES, INC.,Petitioner,
v. NATIONAL LABOR RELATIONS COMMISSION
AND JEREMIAS CABILES, Respondents.
MENDOZA, J.:
FACTS:
Cabiles was initially hired by Intel Phil. on April 16, 1997
as an Inventory Analyst. He was subsequently promoted
several times over the years and was also assigned at
Intel Arizona and Intel Chengdu. He later applied for a
position at Intel Semiconductor Limited Hong Kong (Intel
HK). He received a letter offering the position of Finance
Manager by Intel HK. Before accepting the offer, he
inquired from Intel Phil., through an email the
consequences of accepting the newly presented
opportunity in Hong Kong. He asked the process he
need to go through regarding the benefits and
clearances in Intel Phils and would an email notification
be enough. He also clarified whether he will receive
retirement benefits considering he will be in the service
for 10 years on April 16, 2007 with Intel and should he
accept the offer of Intel HK, will the 9.5 years in the
service be rounded of to 10 years.
Intel Phil., through Penny Gabronino (Gabronino),
replied that he will not be eligible to receive his
retirement benefit not having reached 10 years of
service at the time he moved to Hong Kong. Further,
Intel do not round up the years of service.
In case he move back to the Philippines his total tenure
of service will be computed less on the period that you
are out of Intel Philippines.
On January 31, 2007, Cabiles signed the job offer.
On March 8, 2007, Intel Phil. issued Cabiles his "Intel
Final Pay Separation Voucher" indicating a net payout
ofP165,857.62. On March 26, 2007, Cabiles executed a
Release, Waiver and Quitclaim in favor of Intel Phil.
acknowledging receipt of P165,857.62 as full and
complete settlement of all benefits due him by reason of
his separation from Intel Phil.
On September 8, 2007, after seven (7) months of
employment, Cabiles resigned from Intel HK.
About two years thereafter, Cabiles filed a complaint for
non-payment of retirement benefits and for moral and
exemplary damages with the NLRC. He insisted that he
was employed by Intel for 10 years and 5 months from
April 1997 to September 2007 a period which included
his seven (7) month stint with Intel HK. Thus, he
believed he was qualified to avail of the benefits under
the company's retirement policy allowing an employee
who served for 10 years or more to receive retirement
benefits.
The LA held that Cabiles did not sever his employment
with Intel Phil. when he moved to Intel HK, similar to the
instances when he was assigned at Intel Arizona and
Intel Chengdu.
On appeal, the NLRC affirmed the LA decision. It
determined that his decision to move to Intel HK was not
definitive proof of permanent severance of his ties with
Intel Phil. It treated his transfer to Hong Kong as akin to
his overseas assignments in Arizona and Chengdu. As
to the email exchange between Cabiles and Intel Phil.,
the NLRC considered the same as insufficient to
diminish his right over retirement benefits under the law.
Meanwhile, the NLRC disregarded the Waiver because
at the time it was signed, the retirement pay due him had
not yet accrued.
Aggrieved, Intel Phil. elevated the case to the CA via a
petition for certiorari with application for a Temporary
Restraining Order (TRO). The application for TRO was
denied. A motion for reconsideration, was filed, but it
was also denied in a Resolution, which also dismissed
the petition for certiorari.
Intel Phil. filed a motion for reconsideration.
The NLRC issued a writ of execution against Intel Phil.
to pay P3,201,398.60 and P31,510.00 representing the
execution fees.
Intel Phil. satisfied the judgment on by paying the
amount of P3,201,398.60 which included the applicable
withholding taxes due and paid to the BIR. Cabiles
received a net amount ofP2,485,337.35, covered by a
BPI Managers check.
Intel Phil. filed restitution of all the amounts paid by them
pursuant to the NLRC's writ of execution and the NLRC
order.
Intel filed a petition for review, however, the CA
dismissed the same, affirming the NLRC decision.
ISSUE: Whether the CA erred in ruling that private
respondent was entitled to retire under Intel Philippines
retirement plan.
HELD: The Court of Appeals decision is reversed.
LABOR LAW Resignation
Resignation is the formal relinquishment of an office,the
overt act of which is coupled with an intent to renounce.
This intent could be inferred from the acts of the
employee before and after the alleged resignation.
In contemplating whether to accept the offer from Intel
HK, Cabiles wrote Intel Phil. through Gabronino. This
communication manifested two of his main concerns: a)
clearance procedures; and b) the probability of getting
his retirement pay despite the non-completion of the
required 10 years of employment service. Beyond these
concerns, however, was his acceptance of the fact that
he would be ending his relationship with Intel Phil. as his
employer. The words he used - local hire, close,
clearance denote nothing but his firm resolve to
voluntarily disassociate himself from Intel Phil. and take
on new responsibilities with Intel HK.
His acceptance of the offer meant letting go of the
retirement benefits he now claims as he was informed
through email correspondence that his 9.5 years of
service with Intel Phil. would not be rounded off in his
favor. He, thus, placed himself in this position, as he
chose to be employed in a company that would pay him
more than what he could earn in Chengdu or in the
Philippines.
LABOR LAW Theory of Secondment
Cabiles views his employment in Hong Kong as an
assignment or an extension of his employment with Intel
Phil.
The continuity, existence or termination of an employer-
employee relationship in a typical secondment contract
or any employment contract for that matter is measured
by the following yardsticks: 1. the selection and
engagement of the employee; 2. the payment of wages;
3. the power of dismissal; and 4. the employers power to
control the employees conduct. Victorio Meteor v.
Creative Creatures Inc, G.R. No. 171275, July 13, 2009
As applied, all of the above benchmarks ceased upon
Cabiles assumption of duties with Intel HK on February
1, 2007. Intel HK became the new employer.
Undoubtedly, Cabiles decision to move to Hong Kong
required the abandonment of his permanent position
with Intel Phil. in order for him to assume a position in an
entirely different company. Clearly, the "transfer" was
more than just an assignment. It constituted a severance
of Cabiles relationship with Intel Phil., for the assumption
of a position with a different employer, rank,
compensation and benefits.
Having effectively resigned before completing his 10th
year anniversary with Intel Phil. and after having validly
waived all the benefits due him, if any, Cabiles is hereby
declared ineligible to receive the retirement pay pursuant
to the retirement policy of Intel Phil.
For that reason, Cabiles must return all the amounts he
received from Intel Phil. pursuant to the Writ of
Execution issued by the NLRC.
The petition is granted

Hence, Cabiles theory of secondment must fail.

What distinguishes Intel Chengdu and Intel Arizona from

Intel HK is the lack of intervention of Intel Phil. on the
matter. In the two previous transfers, Intel Phil. remained
as the principal employer while Cabiles was on a
temporary assignment.

LABOR LAW - Release, Waiver and Quitclaim

Not all waivers and quitclaims are invalid as against

public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is binding
on the parties and may not later be disowned simply
because of a change of mind. It is only where there is
clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law
will step in to annul the questionable transaction. But
where it is shown that the person making the waiver did
so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a
valid and binding undertaking. Goodrich Manufacturing
Corporation, v. Ativo, G.R. No. 188002, February 1,
2010

Suffice it to state that nothing is clearer than the words

used in the Waiver duly signed by Cabiles - that all
claims, in the present and in the future, were waived in
consideration of his receipt of the amount of
P165,857.62. Because the waiver included all present
and future claims, the non-accrual of benefits cannot be
used as a basis in awarding retirement benefits to him.

LABOR LAW Retirement benefits

Cabiles is not entitled to the Retirement Benefits


G.R. No. 195190 July 28, 2014
ROYALE HOMES MARKETING
CORPORATION, Petitioner,
vs.
FIDEL P. ALCANTARA [deceased], substituted by
his heirs, Respondent.
Not every form of control that a hiring party imposes on
the hired party is indicative of employee-employer
relationship. Rules and regulations that merely serve as
guidelines towards the achievement of a mutually
desired result without dictating the means and methods
of accomplishing it do not establish employer-employee
relationship.1
Not every form of control is indicative of employer-
employee relationship. 1 A person who performs work
for another and is subjected to its rules, regulations, and
code of ethics does not necessarily become an
employee. As long as the level of control does not
interfere with the means and methods of accomplishing
the assigned tasks, the rules imposed by the hiring party
on the hired party do not amount to the labor law
concept of control that is indicative of employer-
employee relationship.
Facts: Petitioner Royale Homes appointed Respondent
Alcantara as its Marketing Director for a fixed period of
one year. Royale Homes reappointed him for several
consecutive years, his last position as VP Sales.
On December 2003, Alcantara filed a Complaint for
Illegal Dismissal against Royale Homes and its
corporate officers alleging that he is a regular employee
of Royale Homes since he is performing tasks that are
necessary and desirable to its business; that in 2003 the
company gave him P1.2 million for the services he
rendered to it; that in the first week of November 2003,
however, the executive officers of Royale Homes told
him that they were wondering why he still had the gall to
come to office and sit at his table; and that the acts of
the executive officers of Royale Homes amounted to his
dismissal from work without any valid or just cause and
in gross disregard of the proper procedure for dismissing
employees.
Royale Homes, on the other hand, vehemently denied
that Alcantara is its employee. It argued that the
appointment paper of Alcantara is clear that it engaged
his services as an independent sales contractor for a
fixed term of one year only. He never received any
salary, 13th month pay, overtime pay or holiday pay from
Royale Homes as he was paid purely on commission
basis. In addition, Royale Homes had no control on how
Alcantara would accomplish his tasks and
responsibilities as he was free to solicit sales at any time
and by any manner which he may deem appropriate and
necessary. He is even free to recruit his own sales
personnel to assist him in pursuance of his sales target.
Labor Arbiter: For Alcantara. Heis an employee of
Royale Homes with a fixed-term employment and that
the pre-termination of his contract was against the law.
NLRC (appeal): For Petitioner company. Alcantara is an
independent contractor of Royale Homes. It based its
ruling mainly on the contract which does not require
Alcantara to observe regular working hours. He was also
free to adopt the selling methods he deemed most
effective and can even recruit sales agents to assist him
in marketing the inventories of Royale Homes. He was
also paid on commission basis.
CA (Petition for Certiorari): For Respondent. Applying
the four-fold and economic reality tests, it held that
Alcantara is an employee of Royale Homes. Royale
Homes exercised some degree of control over Alcantara
since his job, is subject to company rules, regulations,
and periodic evaluations. He was also bound by the
company code of ethics. Moreover, the exclusivity
clause of the contract has made Alcantara economically
dependent on Royale Homes, supporting the theory that
he is anemployee of said company.
Issue: Whether there exists an employee-employer
relationship between the parties? NO. Alcantara is an
independent contractor.
The primary evidence of the nature of the parties’
relationship in this case is the written contract that they
signed and executed in pursuance of their mutual
agreement. While the existence of employer-employee
relationship is a matter of law, the characterization made
by the parties in their contract as to the nature of their
juridical relationship cannot be simply ignored,
particularly in this case where the parties’ written
contract unequivocally states their intention at the time
they entered into it. In this case, the contract, duly
signed and not disputed by the parties, conspicuously
provides that "no employer-employee relationship exists
between" Royale Homes and Alcantara, as well as his
sales agents. It is clear that they did not want to be
bound by employer-employee relationship at the time of
the signing of the contract.
In determining the existence of an employer-employee
relationship, among the four-fold test, the most
determinative factor in ascertaining the existence of
employer - employee relationship is the "right of control
test". " It is deemed to be such an important factor that
the other requisites may even be disregarded." This
holds true where the issues to be resolved is whether a
person who performs work for another is the latter’s
employee or is an independent contractor. For where the
person for whom the services are performed reserves
the right to control not only the end to be achieved, but
also the means by which such end is reached, employer-
employee relationship is deemed to exist.
In this case, the Court agrees with Royale Homes that
the rules, regulations, code of ethics, and periodic
evaluation alluded to by Alcantara do not involve control
over the means and methods by which he was to
perform his job. Understandably, Royale Homes has to
fix the price, impose requirements on prospective
buyers, and lay down the terms and conditions of the
sale, including the mode of payment, which the
independent contractors must follow. It is also necessary
for Royale Homes to allocate its inventories among its
independent contractors, determine who has priority in
selling the same, grant commission or allowance based
on predetermined criteria, and regularly monitor the
result of their marketing and sales efforts. But to the
mind of this Court, these do not pertain to the means
and methods of how Alcantara was to perform and
accomplish his task of soliciting sales. They do not
dictate upon him the details of how he would solicit sales
or the manner as to how he would transact business with
prospective clients.
Notably, Alcantara was not required to observe definite
working hours. Except for soliciting sales, Royale Homes
did not assign other tasks to him. He had full control over
the means and methods of accomplishing his tasks as
he can "solicit sales at any time and by any manner
which [he may] deem appropriate and necessary." He
performed his tasks on his own account free from the
control and direction of Royale Homes in all matters
connected therewith, except as to the results thereof.
Neither does the repeated hiring of Alcantara prove the
existence of employer-employee relationship. The
continuous rehiring of Alcantara simply signifies the
renewal of his contract with Royale Homes, and
highlights his satisfactory services warranting the
renewal of such contract. Nor does the exclusivity clause
of contract establish the existence of the labor law
concept of control. In Consulta v. Court of Appeals, it
was held that exclusivity of contract does not necessarily
result in employer-employee relationship.
The element of payment of wages is also absent in this
case. As provided in the contract, Alcantara’s
remunerations consist only of commission override of
0.5%, budget allocation, sales incentive and other forms
of company support. There is no proof that he received
fixed monthly salary.
This Court is, therefore, convinced that Alcantara is not
an employee of Royale Homes, but a mere independent
contractor.
G.R. No.187691
OLYMPIA HOUSING, INC., Petitioner,
vs.
ALLAN LAPASTORA and IRENE
UBALUBAO, Respondents.
FACTS:
The instant case stemmed from a complaint for illegal
dismissal, payment of backwages and other benefits,
and regularization of employment filed by Allan
Lapastora (Lapastora) and Irene Ubalubao (Ubalubao)
against Olympic Housing, Inc. (OHI), the entity engaged
in the management of the Olympia Executive
Residences (OER), a condominium hotel building
situated in Makati City, owned by a Philippine-registered
corporation known as the Olympia Condominium
Corporation (OCC).
To establish employer-employee relationship with OHI,
Lapastora and Ubalubao alleged that they were directly
hired by the company and received salaries directly from
its operations clerk, Myrna Jaylo (Jaylo). They also
claimed that OHI exercised control over them as they
were issued time cards, disciplinary action reports and
checklists of room assignments. It was also OHI which
terminated their employment after they petitioned for
regularization. Prior to their dismissal, they were
subjected to investigations for their alleged involvement
in the theft of personal items and cash belonging to hotel
guests and were summarily dismissed by OHI despite
lack of evidence.5
For their part, OHI and Limcaoco alleged that Lapastora
and Ubalubao were not employees of the company but
of Fast Manpower, with which it had a contract of
services, particularly, for the provision of room
attendants. They claimed that Fast Manpower is an
independent contractor as it (1) renders janitorial
services to various establishments in Metro Manila, with
500 janitors under its employ; (2) maintains an office
where janitors assemble before they are dispatched to
their assignments; (3) exercises the right to select,
refuse or change personnel assigned to OHI; and (4)
supervises and pays the wages of its employees.6
Reinforcing OHI’s claims, Fast Manpower reiterated that
it is a legitimate manpower agency and that it had a valid
contract of services with OHI, pursuant to which
Lapastora and Ubalubao were deployed as room
attendants. Lapastora and Ubalubao were, however,
found to have violated house rules and regulations and
were reprimanded accordingly. It denied the employees’
claim that they were dismissed and maintained they
were only placed on floating status for lack of available
work assignments.7
HELD:
(1) W/N LAPASTORA WAS ILLEGALLY
DISMISSED
Indisputably, Lapastora was a regular employee of OHI.
As found by the LA, he has been under the continuous
employ of OHI since March 3, 1995 until he was placed
on floating status in February 2000. His uninterrupted
employment by OHI, lasting for more than a year,
manifests the continuing need and desirability of his
services, which characterize regular employment. Article
280 of the Labor Code provides as follows:
Art. 280. Regular and casual employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the employer,
except where the employment has been fixed for a
specific project or undertaking, the completion or
termination of which has been determined at the time of
the engagement of the employee or where the work or
services to be performed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That,
any employee who has rendered at least one year of
service, whether such service is continuous or broken,
shall be considered a regular employee with respect to
the activity in which he is employed and his employment
shall continue while such activity exists.
Based on records, OHI is engaged in the business of
managing residential and commercial condominium units
at the OER. By the nature of its business, it is imperative
that it maintains a pool of housekeeping staff to ensure
that the premises remain an uncluttered place of comfort
for the occupants. It is no wonder why Lapastora, among
several others, was continuously employed by OHI
precisely because of the indispensability of their services
to its business. The fact alone that Lapastora was
allowed to work for an unbroken period of almost five
years is all the same a reason to consider him a regular
employee.
The attainment of a regular status of employment
guarantees the employee’s security of tenure that he
cannot be unceremoniously terminated from
employment. "To justify fully the dismissal of an
employee, the employer must, as a rule, prove that the
dismissal was for a just cause and that the employee
was afforded due process prior to dismissal. As a
complementary principle, the employer has the onus of
proving with clear, accurate, consistent, and convincing
evidence the validity of the dismissal."31
OHI miserably failed to discharge its burdens thus
making Lapastora’s termination illegal.
SUBSTANTIVE ASPECT
On the substantive aspect, it appears that OHI failed to
prove that Lapastora’s dismissal was grounded on a just
or authorized cause. While it claims that it had called
Lapastora’s attention several times for tardiness,
unexplained absences and loitering, it does not appear
from the records that the latter had been notified of the
company’s dissatisfaction over his performance and that
he was made to explain his supposed infractions. It does
not even show from the records that Lapastora was ever
disciplined because of his alleged tardiness. In the same
manner, allegations regarding Lapastora’s involvement
in the theft of personal items and cash belonging to hotel
guests remained unfounded suspicions as they were not
proven despite OHI’s probe into the incidents.
PROCEDURAL ASPECT
On the procedural aspect, OHI admittedly failed to
observe the twin notice rule in termination cases.
As a rule, the employer is required to furnish the
concerned employee two written notices:
(1) a written notice served on the
employee specifying the ground or
grounds for termination, and giving
to said employee reasonable
opportunity within which to explain
his side; and
cannot evade the application of labor laws by mere
expedient of a contract considering that labor and
employment are matters imbued with public interest. It
cannot be subjected to the agreement of the parties but
rather on existing laws designed specifically for the
protection of labor.
Thus, it had been repeatedly stressed in a number of
jurisprudence that "[a] party cannot dictate, by the mere
expedient of a unilateral declaration in a contract, the
character of its business, i.e., whether as labor-only
contractor or as job contractor, it being crucial that its
character be measured in terms of and determined by
the criteria set by statute

(2) a written notice of termination

served on the employee indicating
that upon due consideration of all
the circumstances, grounds have
been established to justify his
termination.32

In the present case, Lapastora was not informed of the

charges against him and was denied the opportunity to
disprove the same. He was summarily terminated from
employment.

OHI argues that no formal notices of investigation, notice

of charges or termination was issued to Lapastora since
he was not an employee of the company but of Fast
Manpower.

(2)W/N THERE IS AN EMPLOYER-EMPLOYEE

RELATIONSHIP

The issue of employer-employee relationship between

OHI and Lapastora had been deliberated and ruled upon
by the LA and the NLRC in the affirmative on the basis
of the evidence presented by the parties.

The LA ruled that Lapastora was under the effective

control and supervision of OHI through the company
supervisor. She gave credence to the pertinent records
of Lapastora’s employment, i.e., timecards, medical
records and medical examinations, which all indicated
OHI as his employer. She likewise noted Fast
Manpower’s failure to establish its capacity as
independent contractor based on the standards provided
by law.

That there is an existing contract of services between

OHI and Fast Manpower where both parties
acknowledged the latter as the employer of the
housekeeping staff, including Lapastora, did not alter
established facts proving the contrary. The parties
SMART COMMUNICATIONS v. REGINA M. ASTORGA, GR NO. 148132, 2008-01-23

Facts:

Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) on May 8,
1997 as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). She was
receiving a monthly salary of P33,650.00. As District

Sales Manager, Astorga enjoyed additional benefits, namely, annual performance incentive equivalent to 30% of her
annual gross salary, a group life and hospitalization insurance coverage, and a car plan in the amount of P455,000.00.[5]

In February 1998, SMART launched an organizational realignment to achieve more efficient operations. This was made
known to the employees on February 27, 1998.[6] Part of the reorganization was the outsourcing of the marketing and
sales force. Thus, SMART... entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT
Multimedia, Incorporated (SNMI). Since SNMI was formed to do the sales and marketing work, SMART abolished the
CSMG/FSD, Astorga's division.

To soften the blow of the realignment, SNMI agreed to absorb the CSMG personnel who would be recommended by
SMART. SMART then conducted a performance evaluation of CSMG personnel and those who garnered the highest
ratings were favorably recommended to SNMI. Astorga landed last... in the performance evaluation, thus, she was not
recommended by SMART. SMART, nonetheless, offered her a supervisory position in the Customer Care Department,
but she refused the offer because the position carried lower salary rank and rate.

Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. But on March 3, 1998, SMART issued a
memorandum advising Astorga of the termination of her employment on ground of redundancy, effective April 3, 1998.
Astorga received it on March 16, 1998.[7]

The termination of her employment prompted Astorga to file a Complaint[8] for illegal dismissal, non-payment of salaries
and other benefits with prayer for moral and exemplary damages against SMART and Ann Margaret V. Santiago
(Santiago). She claimed that... abolishing CSMG and, consequently, terminating her employment was illegal for it violated
her right to security of tenure. She also posited that it was illegal for an employer, like SMART, to contract out services
which will displace the employees, especially if the contractor... is an in-house agency.[9]
SMART responded that there was valid termination. It argued that Astorga was dismissed by reason of redundancy, which
is an authorized cause for termination of employment, and the dismissal was effected in accordance with the
requirements of the Labor Code. The redundancy of

Astorga's position was the result of the abolition of CSMG and the creation of a specialized and more technically equipped
SNMI, which is a valid and legitimate exercise of management prerogative.[10]

In the meantime, on May 18, 1998, SMART sent a letter to Astorga demanding that she pay the current market value of
the Honda Civic Sedan which was given to her under the company's car plan program, or to surrender the same to the
company for proper disposition.[11] Astorga, however, failed and refused to do either, thus prompting SMART to file a suit
for replevin with the Regional Trial Court of Makati (RTC) on August 10, 1998. The case was docketed as Civil Case No.
98-1936 and was raffled to Branch 57.[12]

Astorga moved to dismiss the complaint on grounds of (i) lack of jurisdiction; (ii) failure to state a cause of action; (iii) litis
pendentia; and (iv) forum-shopping. Astorga posited that the regular courts have no jurisdiction over the complaint
because the subject... thereof pertains to a benefit arising from an employment contract; hence, jurisdiction over the same
is vested in the labor tribunal and not in regular courts.[13]

Pending resolution of Astorga's motion to dismiss the replevin case, the Labor Arbiter rendered a Decision[14] dated
August 20, 1998, declaring Astorga's dismissal from employment illegal. While recognizing SMART's right to abolish any
of its... departments, the Labor Arbiter held that such right should be exercised in good faith and for causes beyond its
control. The Arbiter found the abolition of CSMG done neither in good faith nor for causes beyond the control of SMART,
but a ploy to terminate Astorga's employment.

The Arbiter also ruled that contracting out the functions performed by Astorga to an in-house agency like SNMI was
illegal, citing Section 7(e), Rule VIII-A of the Rules Implementing the Labor Code.

Issues:

Astorga filed a motion for reconsideration, but the RTC denied it on June 18, 1999.[18]

Astorga elevated the denial of her motion via certiorari to the CA, which, in its February 28, 2000 Decision,[19] reversed
the RTC ruling. Granting the petition and, consequently, dismissing the replevin case, the CA held that the case... is
intertwined with Astorga's complaint for illegal dismissal; thus, it is the labor tribunal that has rightful jurisdiction over the
complaint. SMART's motion for reconsideration having been denied,[20] it elevated the case to this Court, now docketed
as

G.R. No. 148132.

Meanwhile, SMART also appealed the unfavorable ruling of the Labor Arbiter in the illegal dismissal case to the National
Labor Relations Commission (NLRC). In its September 27, 1999 Decision,[21] the NLRC sustained Astorga's dismissal.
Reversing the Labor

Arbiter, the NLRC declared the abolition of CSMG and the creation of SNMI to do the sales and marketing services for
SMART a valid organizational action. It overruled the Labor Arbiter's ruling that SNMI is an in-house agency, holding that
it lacked legal basis. It also declared... that contracting, subcontracting and streamlining of operations for the purpose of
increasing efficiency are allowed under the law. The NLRC further found erroneous the Labor Arbiter's disquisition that
redundancy to be valid must be impelled by economic reasons, and upheld the... redundancy measures undertaken by
SMART.

The NLRC disposed, thus:

WHEREFORE, the Decision of the Labor Arbiter is hereby reversed and set aside. [Astorga] is further ordered to
immediately return the company vehicle assigned to her. [Smart and Santiago] are hereby ordered to pay the final wages
of [Astorga] after [she] had... submitted the required supporting papers therefor.
SO ORDERED.[22]

Astorga filed a motion for reconsideration, but the NLRC denied it on December 21, 1999.[23]

Astorga then went to the CA via certiorari. On June 11, 2001, the CA rendered a Decision[24] affirming with modification
the resolutions of the NLRC. In gist, the CA agreed with the NLRC that the reorganization undertaken by SMART resulting
in the... abolition of CSMG was a legitimate exercise of management prerogative. It rejected Astorga's posturing that her
non-absorption into SNMI was tainted with bad faith. However, the CA found that SMART failed to comply with the
mandatory one-month notice prior to the intended... termination. Accordingly, the CA imposed a penalty equivalent to
Astorga's one-month salary for this non-compliance. The CA also set aside the NLRC's order for the return of the
company vehicle holding that this issue is not essentially a labor concern, but is civil in nature,... and thus, within the
competence of the regular court to decide. It added that the matter had not been fully ventilated before the NLRC, but in
the regular court.

Astorga filed a motion for reconsideration, while SMART sought partial reconsideration, of the Decision. On December 18,
2001, the CA resolved the motions, viz.:

WHEREFORE, [Astorga's] motion for reconsideration is hereby PARTIALLY GRANTED. [Smart] is hereby ordered to pay
[Astorga] her backwages from 15 February 1998 to 06 November 1998. [Smart's] motion for reconsideration is outrightly
DENIED.

SO ORDERED.[25]

Astorga and SMART came to us with their respective petitions for review assailing the CA ruling, docketed as G.R Nos.
151079 and 151372. On February 27, 2002, this Court ordered the consolidation of these petitions with G.R. No.
148132.[26]

In her Memorandum, Astorga argues:

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF ASTORGA'S DISMISSAL DESPITE THE FACT
THAT HER DISMISSAL WAS EFFECTED IN CLEAR VIOLATION OF THE CONSTITUTIONAL RIGHT TO SECURITY
OF TENURE, CONSIDERING THAT THERE WAS NO GENUINE GROUND FOR HER DISMISSAL.

II

SMART'S REFUSAL TO REINSTATE ASTORGA DURING THE PENDENCY OF THE APPEAL AS REQUIRED BY
ARTICLE 223 OF THE LABOR CODE, ENTITLES ASTORGA TO HER SALARIES DURING THE PENDENCY OF THE
APPEAL.

III

THE COURT OF APPEALS WAS CORRECT IN HOLDING THAT THE REGIONAL TRIAL COURT HAS NO
JURISDICTION OVER THE COMPLAINT FOR RECOVERY OF A CAR WHICH ASTORGA ACQUIRED AS PART OF
HER EMPLOYEE (sic) BENEFIT.[27]

WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH APPLICABLE DECISION OF THE HONORABLE SUPREME
COURT AND HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
AS TO CALL FOR AN

EXERCISE OF THE POWER OF SUPERVISION WHEN IT RULED THAT SMART DID NOT COMPLY WITH THE
NOTICE REQUIREMENTS PRIOR TO TERMINATING ASTORGA ON THE GROUND OF REDUNDANCY.

II
WHETHER THE NOTICES GIVEN BY SMART TO ASTORGA AND THE DEPARTMENT OF LABOR AND
EMPLOYMENT ARE SUBSTANTIAL COMPLIANCE WITH THE NOTICE REQUIREMENTS BEFORE TERMINATION.

III

WHETHER THE RULE ENUNCIATED IN SERRANO VS. NATIONAL LABOR RELATIONS COMMISSION FINDS
APPLICATION IN THE CASE AT BAR CONSIDERING THAT IN THE SERRANO CASE THERE WAS ABSOLUTELY NO
NOTICE AT ALL.[28]

IV

WHETHER THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH APPLICABLE DECISION[S] OF THE HONORABLE SUPREME
COURT AND HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS
AS TO CALL FOR AN

EXERCISE OF THE POWER OF SUPERVISION WHEN IT RULED THAT THE REGIONAL TRIAL COURT DOES NOT
HAVE JURISDICTION OVER THE COMPLAINT FOR REPLEVIN FILED BY SMART TO RECOVER ITS OWN
COMPANY VEHICLE FROM A FORMER EMPLOYEE WHO WAS LEGALLY DISMISSED.

WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE THAT THE SUBJECT OF THE
REPLEVIN CASE IS NOT THE ENFORCEMENT OF A CAR PLAN PRIVILEGE BUT SIMPLY THE RECOVERY OF A
COMPANY CAR.

VI

WHETHER THE HONORABLE COURT OF APPEALS HAS FAILED TO APPRECIATE THAT ASTORGA CAN NO
LONGER BE CONSIDERED AS AN EMPLOYEE OF SMART UNDER THE LABOR CODE.[29]

The Court shall first deal with the propriety of dismissing the replevin case filed with the RTC of Makati City allegedly for
lack of jurisdiction, which is the issue raised in G.R. No. 148132.

Replevin is an action whereby the owner or person entitled to repossession of goods or chattels may recover those goods
or chattels from one who has wrongfully distrained or taken, or who wrongfully detains such goods or chattels. It is
designed to permit one having right... to possession to recover property in specie from one who has wrongfully taken or
detained the property.[30] The term may refer either to the action itself, for the recovery of personalty, or to the provisional
remedy traditionally associated with it, by... which possession of the property may be obtained by the plaintiff and retained
during the pendency of the action.[31]

That the action commenced by SMART against Astorga in the RTC of Makati City was one for replevin hardly admits of
doubt.

In reversing the RTC ruling and consequently dismissing the case for lack of jurisdiction, the CA made the following
disquisition, viz.:

[I]t is plain to see that the vehicle was issued to [Astorga] by [Smart] as part of the employment package. We doubt that
[SMART] would extend [to Astorga] the same car plan privilege were it not for her employment as district sales manager
of the company.

Furthermore, there is no civil contract for a loan between [Astorga] and [Smart]. Consequently, We find that the car plan
privilege is a benefit arising out of employer-employee relationship. Thus, the claim for such falls squarely within the
original and exclusive jurisdiction... of the labor arbiters and the NLRC.[32]
We do not agree. Contrary to the CA's ratiocination, the RTC rightfully assumed jurisdiction over the suit and acted well
within its discretion in denying Astorga's motion to dismiss. SMART's demand for payment of the market value of the car
or, in the alternative, the surrender... of the car, is not a labor, but a civil, dispute. It involves the relationship of debtor and
creditor rather than employee-employer relations.[33] As such, the dispute falls within the jurisdiction of the regular courts.

In Basaya, Jr. v. Militante,[34] this Court, in upholding the jurisdiction of the RTC over the replevin suit, explained:

Replevin is a possessory action, the gist of which is the right of possession in the plaintiff. The primary relief sought
therein is the return of the property in specie wrongfully detained by another person. It is an ordinary statutory proceeding
to adjudicate... rights to the title or possession of personal property. The question of whether or not a party has the right of
possession over the property involved and if so, whether or not the adverse party has wrongfully taken and detained said
property as to require its return to... plaintiff, is outside the pale of competence of a labor tribunal and beyond the field of
specialization of Labor Arbiters.

xxxx

The labor dispute involved is not intertwined with the issue in the Replevin Case. The respective issues raised in each
forum can be resolved independently on the other. In fact in 18 November 1986, the NLRC in the case before it had
issued an Injunctive Writ enjoining the... petitioners from blocking the free ingress and egress to the Vessel and ordering
the petitioners to disembark and vacate. That aspect of the controversy is properly settled under the Labor Code. So also
with petitioners' right to picket. But the determination of the question of... who has the better right to take possession of the
Vessel and whether petitioners can deprive the Charterer, as the legal possessor of the Vessel, of that right to possess in
addressed to the competence of Civil Courts.

In thus ruling, this Court is not sanctioning split jurisdiction but defining avenues of jurisdiction as laid down by pertinent
laws.

The CA, therefore, committed reversible error when it overturned the RTC ruling and ordered the dismissal of the replevin
case for lack of jurisdiction.

Having resolved that issue, we proceed to rule on the validity of Astorga's dismissal.

Astorga was terminated due to redundancy, which is one of the authorized causes for the dismissal of an employee. The
nature of redundancy as an authorized cause for dismissal is explained in the leading case of Wiltshire File Co., Inc. v.
National Labor Relations

Commission,[35] viz:... x x x redundancy in an employer's personnel force necessarily or even ordinarily refers to
duplication of work. That no other person was holding the same position that private respondent held prior to termination
of his services does not show that his position had... not become redundant. Indeed, in any well organized business
enterprise, it would be surprising to find duplication of work and two (2) or more people doing the work of one person. We
believe that redundancy, for purposes of the Labor Code, exists where the services of an... employee are in excess of
what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it
is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring
of... workers, decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.

The characterization of an employee's services as superfluous or no longer necessary and, therefore, properly terminable,
is an exercise of business judgment on the part of the employer. The wisdom and soundness of such characterization or
decision is not subject to... discretionary review provided, of course, that a violation of law or arbitrary or malicious action
is not shown.[36]

Astorga claims that the termination of her employment was illegal and tainted with bad faith. She asserts that the
reorganization was done in order to get rid of her. But except for her barefaced allegation, no convincing evidence was
offered to prove it. This Court finds it... extremely difficult to believe that SMART would enter into a joint venture
agreement with NTT, form SNMI and abolish CSMG/FSD simply for the sole purpose of easing out a particular employee,
such as Astorga. Moreover, Astorga never denied that SMART offered her a supervisory... position in the Customer Care
Department, but she refused the offer because the position carried a lower salary rank and rate. If indeed SMART simply
wanted to get rid of her, it would not have offered her a position in any department in the enterprise.

Astorga also states that the justification advanced by SMART is not true because there was no compelling economic
reason for redundancy. But contrary to her claim, an employer is not precluded from adopting a new policy conducive to a
more economical and effective management... even if it is not experiencing economic reverses. Neither does the law
require that the employer should suffer financial losses before he can terminate the services of the employee on the
ground of redundancy. [37]

We agree with the CA that the organizational realignment introduced by SMART, which culminated in the abolition of
CSMG/FSD and termination of Astorga's employment was an honest effort to make SMART's sales and marketing
departments more efficient and competitive. As the CA had... taken pains to elucidate:... x x x a careful and assiduous
review of the records will yield no other conclusion than that the reorganization undertaken by SMART is for no purpose
other than its declared objective - as a labor and cost savings device. Indeed, this Court finds no fault in SMART's...
decision to outsource the corporate sales market to SNMI in order to attain greater productivity. [Astorga] belonged to the
Sales Marketing Group under the Fixed Services Division (CSMG/FSD), a distinct sales force of SMART in charge of
selling SMART's telecommunications... services to the corporate market. SMART, to ensure it can respond quickly,
efficiently and flexibly to its customer's requirement, abolished CSMG/FSD and shortly thereafter assigned its functions to
newly-created SNMI Multimedia Incorporated, a joint venture company of SMART and

NTT of Japan, for the reason that CSMG/FSD does not have the necessary technical expertise required for the value
added services. By transferring the duties of CSMG/FSD to SNMI, SMART has created a more competent and
specialized organization to perform the work required for... corporate accounts. It is also relieved SMART of all
administrative costs - management, time and money-needed in maintaining the CSMG/FSD. The determination to
outsource the duties of the CSMG/FSD to SNMI was, to Our mind, a sound business judgment based on relevant criteria
and... is therefore a legitimate exercise of management prerogative.

Indeed, out of our concern for those lesser circumstanced in life, this Court has inclined towards the worker and upheld
his cause in most of his conflicts with his employer. This favored treatment is consonant with the social justice policy of
the Constitution. But while... tilting the scales of justice in favor of workers, the fundamental law also guarantees the right
of the employer to reasonable returns for his investment.[38] In this light, we must acknowledge the prerogative of the
employer to adopt such measures as will... promote greater efficiency, reduce overhead costs and enhance prospects of
economic gains, albeit always within the framework of existing laws. Accordingly, we sustain the reorganization and
redundancy program undertaken by SMART.

However, as aptly found by the CA, SMART failed to comply with the mandated one (1) month notice prior to termination.
The record is clear that Astorga received the notice of termination only on March 16, 1998[39] or less than a month prior
to its... effectivity on April 3, 1998. Likewise, the Department of Labor and Employment was notified of the redundancy
program only on March 6, 1998.[40]

Article 283 of the Labor Code clearly provides:

Art. 283. Closure of establishment and reduction of personnel. -- The employer may also terminate the employment of any
employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of... the establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof x x... x.

SMART's assertion that Astorga cannot complain of lack of notice because the organizational realignment was made
known to all the employees as early as February 1998 fails to persuade. Astorga's actual knowledge of the reorganization
cannot replace the formal and written notice... required by the law. In the written notice, the employees are informed of the
specific date of the termination, at least a month prior to the effectivity of such termination, to give them sufficient time to
find other suitable employment or to make whatever arrangements are... needed to cushion the impact of termination. In
this case, notwithstanding Astorga's knowledge of the reorganization, she remained uncertain about the status of her
employment until SMART gave her formal notice of termination. But such notice was received by Astorga barely two

(2) weeks before the effective date of termination, a period very much shorter than that required by law.
Be that as it may, this procedural infirmity would not render the termination of Astorga's employment illegal. The validity of
termination can exist independently of the procedural infirmity of the dismissal.[41] In DAP Corporation v. CA,[42] we
found the dismissal of the employees therein valid and for authorized cause even if the employer failed to comply with the
notice requirement under Article 283 of the Labor Code. This Court upheld the dismissal, but held the employer liable for
non-compliance... with the procedural requirements.

The CA, therefore, committed no reversible error in sustaining Astorga's dismissal and at the same time, awarding
indemnity for violation of Astorga's statutory rights.

However, we find the need to modify, by increasing, the indemnity awarded by the CA to Astorga, as a sanction on
SMART for non-compliance with the one-month mandatory notice requirement, in light of our ruling in Jaka Food
Processing Corporation v. Pacot,[43] viz.:

[I]f the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act
imputable to... the employee, and (2) if the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by
the employer's exercise of his management... prerogative.

We deem it proper to increase the amount of the penalty on SMART to P50,000.00.

As provided in Article 283 of the Labor Code, Astorga is, likewise, entitled to separation pay equivalent to at least one (1)
month salary or to at least one (1) month's pay for every year of service, whichever is higher. The records show that
Astorga's length of service is less... than a year. She is, therefore, also entitled to separation pay equivalent to one (1)
month pay.

Finally, we note that Astorga claimed non-payment of wages from February 15, 1998. This assertion was never rebutted
by SMART in the proceedings a quo. No proof of payment was presented by SMART to disprove the allegation. It is
settled that in labor cases, the burden of... proving payment of monetary claims rests on the employer.[44] SMART failed
to discharge the onus probandi. Accordingly, it must be held liable for Astorga's salary from February 15, 1998 until the
effective date of her termination, on April 3,... 1998.

However, the award of backwages to Astorga by the CA should be deleted for lack of basis. Backwages is a relief given to
an illegally dismissed employee. Thus, before backwages may be granted, there must be a finding of unjust or illegal
dismissal from work.[45] The Labor Arbiter ruled that Astorga was illegally dismissed. But on appeal, the NLRC reversed
the Labor Arbiter's ruling and categorically declared Astorga's dismissal valid. This ruling was affirmed by the CA in its
assailed Decision. Since Astorga's dismissal... is for an authorized cause, she is not entitled to backwages. The CA's
award of backwages is totally inconsistent with its finding of valid dismissal.

WHEREFORE, the petition of SMART docketed as G.R. No. 148132 is GRANTED. The February 28, 2000 Decision and
the May 7, 2001 Resolution of the Court of Appeals in CA-G.R. SP. No. 53831 are SET ASIDE. The Regional Trial Court
of Makati City, Branch 57 is

DIRECTED to proceed with the trial of Civil Case No. 98-1936 and render its Decision with reasonable dispatch.

On the other hand, the petitions of SMART and Astorga docketed as G.R. Nos. 151079 and 151372 are DENIED. The
June 11, 2001 Decision and the December 18, 2001 Resolution in CA-G.R. SP. No. 57065, are AFFIRMED with
MODIFICATION. Astorga is declared validly... dismissed. However, SMART is ordered to pay Astorga P50,000.00 as
indemnity for its non-compliance with procedural due process, her separation pay equivalent to one (1) month pay, and
her salary from February 15, 1998 until the effective date of her termination on April 3, 1998.

The award of backwages is DELETED for lack of basis.

SO ORDERED