1. Innodata Knowledge Services, Inc. (IKSI) v. Inting (G.R. No.

211892, December 6, 2017)

2. Dizon v. CCBPI, G.R. No. 174365-66, February 4, 2015
3. Oyster Plaza Hotel v. Melivo, (G.R. No. 217455, October 5, 2016)
4. Duncan v. Glaxo, G.R. No. 162994, September 17, 2004
5. Star Paper Corporation v. Simbol, G.R. No. 164774, April 12, 2006
6. Alegria v. Duque, A.M. No. RTJ-06-2019, April 4, 2007
7. Domingo v. Rayala, G.R. No. 155831, February 18, 2008
8. Evelyn Chua-Qua v. Clave, G.R. No. 49549, August 30, 1990
9. Cheryll Santos Leus v. St. Scholastica’s College Westgrove, G.R. No. 187226, January 28, 2015
10. Yrasuegui v. Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008
11. Imasen v. Alcon G.R. No. 194884, October 22, 2014
12. ICT v. Sales, G.R. No. 202090, September 9, 2015
13. Hechanova v. Matorre, G.R. No. 198261, October 16, 2013
14. SPI Technologies v. Mapua, G.R. No. 191154, April 7, 2014
15. Mangagawa v. PLDT, G.R. No. 190389, April 19, 2017

1

December 6, 2017
G.R. No. 211892
INNODATA KNOWLEDGE SERVICES, INC., Petitioner
vs.
SOCORRO D'MARIE T. INTING, ISMAEL R. GARAYGAY, EDSON S. SOLIS,
MICHAEL A. REBATO, JAMES HORACE BALONDA, STEPHEN C. OLINGAY,
DENNIS C. RIZON, JUNETH A. RENTUMA, HERNAN ED NOEL I. DE LEON,
JR., JESS VINCENT A. DELA PENA, RONAN V. ALAMILLO, ENNOH CHENTIS
R. FERNANDEZ, FRITZ J. SEMBRINO, DAX MATTHEW M. QUIJANO,
RODOLFO M. VASQUEZ, MA. NAZELLE B. MIRALLES, MICHAEL RAY B.
MOLDE, WENDELL B. QUIBAN, ALDRIN O. TORRENTIRA, and CARL
HERMES CARSKIT, Respondents
DECISION
PERALTA, J.:
This is a petition for review seeking the reversal of the Decision1 of the Court of
Appeals (CA), Cebu, Twentieth (20th) Division, dated August 30, 2013 and its
Resolution2 dated March 12, 2014 in CA-G.R. CEB-SP No. 06443 which reversed
and set aside Decision3 of the National Labor Relations Commission (NLRC) on
May 31, 2011.
The factual and procedural antecedents, as evidenced by the records of the case,
are the following:
Petitioner Innodata Knowledge Services, Inc. (IKSI) is a company engaged in
data processing, encoding, indexing, abstracting, typesetting, imaging, and other
processes in the capture, conversion, and storage of data and information. At one
time, Applied Computer Technologies (ACT), a company based in the United
States of America, hired IKSI to review various litigation documents. Due to the
nature of the job, ACT required IKSI to hire lawyers, or at least, law graduates,
to review various litigation documents, classify said documents into the
2
prescribed categories, and ensure that outputs are delivered on time. For this
purpose, IKSI engaged the services of respondents Socorro D’Marie Inting,
Ismael R. Garaygay, Edson S. Solis, Michael A. Rebato, James Horace Balonda,
Stephen C. Olingay, Dennis C. Rizon, Juneth A. Rentuma, Hernan Ed Noel I. de
Leon, Jr., Jess Vincent A. dela Pefia, Ronan V. Alamillo, Ennoh Chentis R.
Fernandez, Wendell B. Quiban, Aldrin 0. Torrentira, Michael Ray B. Molde, Fritz J.
Sembrino, Dax Matthew M. Quijano, Rodolfo M. Vasquez, Ma. Nazelle B. Miralles
and Carl Hennes Carskit as senior and junior reviewers with a contract duration
of five (5) years.
On January 7, 2010, however, respondents received a Notice of Forced Leave
from IKSI informing them that they shall be placed on indefinite forced leave
effective that same day due to changes in business conditions, client
requirements, and specifications. Hence, respondents filed a complaint for illegal
dismissal, reinstatement or payment of separation pay, backwages, and damages
against IKSI.
Subsequently, IKSI sent respondents separate notices dated May 27, 2010
informing them that due to the unavailability of new work related to the product
stream and uncertainties pertaining to the arrival of new workloads, their project
employment contracts would have to be terminated.
On November 10, 2010, the Labor Arbiter (LA), in the consolidated cases of NLRC
RAB VII Case No. 01-0159-10, NLRC RAB VII Case No. O 1-0182-10, and NLRC
RAB VII Case No. 02-0301-10, declared that there was no illegal dismissal, thus:
WHEREFORE, in view of the foregoing, a decision is hereby rendered declaring
that complainants were not constructively dismissed but were placed on forced
leave as a cost-saving measure. Consequently, herein respondents are directed
to recall complainants back to work as soon as work becomes available.
Complainants are likewise directed to report back to work within ten (10) days
from receipt of the order of respondents to report back to work, otherwise, their
failure to do so would be construed as an abandonment. In the event that
reinstatement is no longer feasible, in lieu thereof, separation pay is granted
equivalent to one (1) month salary for every year of service, a fraction of six (6)
months is considered as one (1) whole year, sans backwages.
The claim for moral and exemplary damages as well as attorney’s fees are
DISMISSED for lack of merit.
SO ORDERED.4
WHEREFORE, the Decision of the Labor Arbiter is hereby AFFIRMED WITH
MODIFICATION, in that in lieu of reinstatement, to pay the twelve (12)
complainants-appellants namely: Michael A. Rebato, Hernan Ed Noel L. de Leon,
Jr., Wendell B. Quiban, Fritz Sembrino, Ismael R. Garaygay III, Edson S. Solis,
Stephen Olingay, Ronan Alamillo, Jess Vincent A. dela Pena, Dax Matthew M.
Quijano, Juneth A. Rentuma and Socorro D'Marie T. Inting, the total amount of
Php563,500.00.
SO ORDERED.5
Undaunted, the employees elevated the matter to the CA Cebu, alleging grave
abuse of discretion on the NLRC’s part. On August 30, 2013, the CA granted their
petition and reversed the assailed NLRC ruling, thus:
WHEREFORE, premises considered, this petition is GRANTED. The
assailed Decision dated May 31, 2011 and Resolution dated August 26, 2011 of
public respondent in NLRC Case No. VAC-01-000042-2011 are REVERSED and
SET ASIDE. Petitioners Socorro D'Marie Inting, Ismael R. Garaygay, Edson S.
Solis, Michael A. Rebato, James Horace Balonda, Stephen C. Olingay, Dennis C.
Rizon, Juneth A. Rentuma, Hernan Ed Noel I. de Leon, Jr., Jess Vincent A. dela
Pena, Ronan V. Alamillo, Ennoh Chentis R. Fernandez, Wendell B. Quiban, Aldrin
0. Torrentira, Michael Ray B. Molde, Fritz J. Sembrino, Dax Matthew M. Quijano,
Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl Hermes Carskit are declared
to have been illegally dismissed by Innodata and hence, each of them is entitled
to the payment of the following:
(a) Backwages reckoned from the start of their employment up to the
finality of this Decision with interest as six percent (6%) per annum, and
12% legal interest thereafter until fully paid;
(b) Separation pay equivalent to one (1) month salary for every year of
service, with a fraction of at least six (6) months to be considered as one
3
(1) whole year, to be computed from the date of their employment up to
the finality of this decision;
(c) Moral damages of Php50,000 and exemplary damages of Php25,000;
and
(d) Attorney's fees equivalent to 10 percent (10%) of the total award.
The case is hereby ordered REMANDED to the labor arbiter for the computation
of the amounts due each petitioner.
Costs on private respondent Innodata.
SO ORDERED.6
IKSI then filed a Motion for Reconsideration, but the same was denied in a
Resolution dated March 12, 2014. Hence, the instant petition.
The main issue in this case is whether or not the CA committed an error when it
reversed the NLRC, which declared that respondent employees, as mere project
employees, were validly placed on floating status and, therefore, were not
illegally dismissed.
The Court rules in the negative.
Substantive Issues
Nature of respondents’ employment contracts
It is true that factual findings of administrative or quasi-judicial bodies which are
deemed to have acquired expertise in matters within their respective jurisdictions
are generally accorded, not only respect, but even finality, and bind the Court
when supp011ed by substantial evidence. However, the Court may take
cognizance of factual issues when the findings of fact and conclusions of law of
the LA and/or the NLRC are inconsistent with those of the CA, 7 as in the case at
bar.
Here, the NLRC ruled that respondents were project employees. It ratiocinated
that their contracts specifically indicated that they were to hold their positions for
the duration of the project which was expected to be completed after a maximum
of five (5) years, or on or before July 2, 2013. 8 But the CA found that
respondents' employment contracts are fixed-term, which are contrary to the
Constitution and labor laws. It then cited several cases9 that supposedly involved
IKSI itself and would reveal that its fixed-term employment contracts have been
consistently held as a form of circumvention to prevent employees from acquiring
tenurial rights and benefits.
The employment status of a person is defined and prescribed by law and not by
what the parties say it should be. Equally important to consider is that a contract
of employment is impressed with public interest such that labor contracts must
yield to the common good. Thus, provisions of applicable statutes are deemed
written into the contract, and the parties are never at liberty to insulate
themselves and their relationships from the impact of labor laws and regulations
by simply entering into contracts with each other.10
Article 29511 of the Labor Code provides the distinction between a regular and a
project employment:
Art. 295. 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 service 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.
4
The aforecited provision contemplates four (4) kinds of employees: (1) regular
employees or those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer;
(2) 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; (3) seasonal
employees or those who work or perform services which are seasonal in nature,
and the employment is for the duration of the season; and (4) casual
employees or those who are not regular, project, or seasonal employees.
Jurisprudence later added a fifth (5th) kind, the fixed-term employee. Based on
Article 295, the law determines the nature of the employment, regardless of any
agreement expressing otherwise. The supremacy of the law over the
nomenclature of the contract and its pacts and conditions is to bring life to the
policy enshrined in the Constitution to afford full protection to labor. Thus, labor
contracts are placed on a higher plane than ordinary contracts since these are
imbued with public interest and, therefore, subject to the police power of the
State.12
Project employment contracts, which fix the employment for a specific project or
undertaking, are valid under the law. By entering into such a contract, an
employee is deemed to understand that his employment is coterminous with the
project. He may no longer be employed after the completion of the project for
which he was hired. But project employment contracts are not lopsided
agreements in favor of only one party. The employer's interest is equally
important as that of the employees'. While it may be true that it is the employer
who drafts project employment contracts with its business interest as overriding
consideration, such contracts must not prejudice the employee. 13
As stated in IKSI’s petition itself, the following are the basic provisions of the
employment contracts which respondents signed with the company:
(a) the contracts are entitled "Project-Based Employment Contracts";
(b) the first Whereas clause states "the Company [IKSI] desires the services of a
Project Employee for the Content Supply Chain Project";
(c) Clause 1 on Term of Employment provides:
The Employee shall hold the position of [Junior/Senior] Reviewer and
shall perform the duties and responsibilities of such for the duration of
the Project, which is expected to be completed after a maximum of five
(5) years, or on or before___________, (the "Term").
. . . Further, the Employee is granted one Saturday-off per month on a scheduled
basis for the duration of this PROJECT-BASED EMPLOYMENT CONTRACT ...
(d) The second paragraph of Clause 2 on Work Description provides:
The Employee shall render work in accordance with the schedule and/or program
to which he/she may be assigned or reassigned from time to time, in
accordance with the operational requirements for the completion of the
Project. In addition, the Employee shall perform such other duties,
functions, and services related or incidental to the Project which, for
purposes of expediency, convenience, economy, customer interest, may be
assigned by the Company.
(e) Clause 5 on Termination of Employment provides:
At any time during the Term of this Contract, or any extension thereof, the
Company may terminate this Contract, upon thirty (30) days' prior notice to the
Employee...in the following instances:
a. the services contracted for by the Company under the Project is
completed prior to the agreed upon completion date; or
b. the specific phase of the Project requiring the Employee’s services is
sooner completed; or
c. substantial decrease in the volume of work for the Project; or
d. the contract for the Project is cancelled, indefinitely suspended
or terminated;
(e) the first paragraph of Clause 6 on Compensation and
Benefits provides:
5
The Employee shall receive a gross salary of ... In addition to his/her basic pay,
Management may grant an additional incentive pay should the Employee exceed
the Project quota.14
IKSI argued that based on the contract, it is undeniable that respondents’
employment was fixed for a specific project or undertaking, with its completion or
termination clearly determined at the time of the employee’s engagement.
Indeed, records would disclose that respondents signed employment contracts
specifically indicating the Content Supply Chain Project,15 also known as the ACT
Project, as the project for which they were being hired, which was expected to be
completed after a maximum of five (5) years. However, sometime in November
2008, IKSI required respondents to work on another project called "Bloomberg,"
which was not included in the original contracts that they signed and without
entering into a new project employment contracts. Such fact was never refuted
by IKSI. During that time, respondents were required to read and review decided
cases in the United States of America and they were no longer called Senior or
Junior Reviewers, but referred to as Case Classifiers. Respondents initially
opposed working on said project but eventually agreed, in fear of losing their
employment altogether. Months later, they were again required to work on the
ACT Project and reverted to their previous designation as Document Reviewers.16
In the case of ALU-TUCP v. NLRC, 17the Court made a pronouncement on the two
(2) categories of project employees. The project for which project employees are
hired would ordinarily have some relationship to the usual business of the
employer. There should be no difficulty in distinguishing the employees for a
certain project from ordinary or regular employees, as long as the duration and
scope of the project were determined or specified at the time of engagement of
said project employees.18
In order to safeguard the rights of workers against the arbitrary use of the word
"project" which prevents them from attaining regular status, employers claiming
that their workers are project employees have the burden of showing that: (a)
the duration and scope of the employment was specified at the time they were
engaged; and (b) there was indeed a project.19 Therefore, as evident in Article
295, the litmus test for determining whether particular employees are properly
characterized as project employees, as distinguished from regular employees, is
whether or not the employees were assigned to carry out a specific project or
undertaking, the duration and scope of which were specified at the time the
Socorro D’ Marie T. Inting Apr. 7, ’08 Apr. 6, ‘13
employees were engaged for that project.20
James Horace A. Balonda May 12, ’08 May 11, ‘13
Here, while IKSI was able to show the presence of a specific project, the ACT
Project, in the contract and the alleged duration of the same, it failed to prove, Wendell B. Quiban May 12, ’08 May 11, ‘13
however, that respondents were in reality made to work only for that specific
project indicated in their employment documents and that it adequately informed Fritz J. Sembrino May 12, ’08 May 11, ‘13
them of the duration and scope of said project at the time their services were
engaged. It is well settled that a party alleging a critical fact must support his Edson S. Solis May 12, ’08 May 11, ‘13
allegation with substantial evidence, as allegation is not evidence. The fact is IKSI
Rodolfo M. Vasquez, Jr. May 12, ’08 May 11, ‘13
actually hired respondents to work, not only on the ACT Project, but on other
similar projects such as the Bloomberg. When respondents were required to work Stephen C. Olingay May 16, ’08 May 15, ‘13
on the Bloomberg project, without signing a new contract for that purpose, it was
already outside of the scope of the particular undertaking for which they were Michael A. Rebato May 19, ’08 May 18, ‘13
hired; it was beyond the scope of their employment contracts. The fact that the
same happened only once is inconsequential. What matters is that IKSI required Ma. Nazelle B. Miralles May 21, ’08 May 20, ‘13
respondents to work on a project which was separate and distinct from the one
they had signed up for. This act by IKSI indubitably brought respondents outside Dennis C. Rizon July 3, ’08 July 2, ‘13
the realm of the project employees category.
Ronan V. Alamillo July 10, ’08 July 9, ‘13
IKSI likewise fell short in proving that the duration of the project was reasonably
Juneth A. Rentuma July 17, ’08 July16,’13
determinable at the time respondents were hired. As earlier mentioned, the
employment contracts provided for "the duration of the Project, which is expected Jess Vincent A. Dela Peña Aug. 12, ’08 Aug. 11, ‘13
to be completed after a maximum of five (5) years, or on or before______ ."The
NLRC upheld the same, finding that the contracts clearly provided for the Dax Matthew M. Quijano Nov. 17, ’08 Nov. 16, ‘13
duration of the project which was expected to end after a maximum of five (5)
years, or on or before July 2, 2013. It is interesting to note, however, that the Michael Ray B. Molde May 18, ’09 May 17, ‘14
five (5)-year period is not actually the duration of the project but merely that of
the employment contract. Naturally, therefore, not all of respondents' Aldrin O. Torrentira May 25, ’09 May24, ‘14
employment would end on July 2, 2013, as the completion of the five (5)-year
Ennoh Chentis R. Fernandez May 28, ’09 May 27, ‘14
period would depend on when each employee was employed, thus: 21
Hernan Ed Noel L. De Leon, Jr. June 3, ’09 June 2, ‘14
Hiring Date Completion Date
This is precisely the reason why IKSI originally left a blank for the termination
Carl Hermes R. Carskit Nov. 1, ’07 May 31,’12
date because it varied for each employee. If respondents were truly project
Ismael R. Garaygay III Mar. 5, ’08 Mar. 4, ‘13

6
employees, as IKSI claims and as found by the NLRC, then the termination date
would have been uniform for all of them.
Thus, while the CA erred in simply relying on the Court's rulings on previous
cases involving Innodata Phils., Inc. since there is no substantial proof that
Innodata Phils., Inc. and herein petitioner, IKSI, are one and the same entity, it
would appear, however, that respondents indeed entered into fixed-term
employment contracts with IKSI, contracts with a fixed period of five (5) years.
But project employment and fixed-term employment are not the same. While the
former requires a particular project, the duration of a fixed-term employment
agreed upon by the parties may be any day certain, which is understood to be
"that which must necessarily come although it may not be known when." The
decisive determinant in fixed-term employment is not the activity that the
employee is called upon to perform but the day certain agreed upon by the
parties for the commencement and termination of the employment relationship. 22
The Court has previously recognized the validity of fixed-term employment
contracts, but it has consistently held that this is more of an exception rather
than the general rule. Aware of the possibility of abuse in the utilization of fixed-
term employment contracts, the Court has declared that where from the
circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down as
contrary to public policy or morals.23
It is evident that IKSI’s contracts of employment are suspect for being highly
ambiguous. In effect, it sought to alternatively avail of project employment and
employment for a fixed term so as to preclude the regularization of respondents'
status. The fact that respondents were lawyers or law graduates who freely and
with full knowledge entered into an agreement with the company is
inconsequential. The utter disregard of public policy by the subject contracts
negates any argument that the agreement is the law between the parties 24 and
that the fixed period was knowingly and voluntarily agreed upon by the parties.
In the interpretation of contracts, obscure words and provisions shall not favor
the party that caused the obscurity. Consequently, the terms of the present
contract should be construed strictly against the employer, for being the party
who prepared it.25 Verily, the private agreement of the parties can never prevail
over Article 1700 of the Civil Code, which states:
7
Art. 1700. The relation between capital and labor are not merely contractual.
They are so impressed with public interest that labor contracts must yield to the
common good. Therefore, such contracts are subject to special laws on labor
unions, collective bargaining, strikes and lockouts, closed shops, wages, working
conditions, hours of labor and similar subjects.
Thus, there were no valid fixed-term or project contracts and respondents were
IKSI’s regular employees who could not be dismissed except for just or
authorized causes. Any ambiguity in said contracts must be resolved against the
company, especially because under Article 1702 of the Civil Code, in case of
doubt, all labor contracts shall be construed in favor of the worker. The Court
cannot simply allow IKSI to construe otherwise what appears to be clear from the
wordings of the contract itself. The interpretation which IKSI seeks to conjure is
wholly unacceptable, as it would result in the violation of respondents' right to
security of tenure guaranteed in Section 3 of Article XIII of the Constitution and
in Article 29426 of the Labor Code.27
Presence of Just or Authorized Causes
for Termination of Employment
Here, IKSI placed respondents on forced leave, temporary lay-off, or floating
status in January 2010 for the alleged decline in the volume of work in the
product stream where they were assigned. When respondents filed a complaint
for illegal dismissal, the LA dismissed the same for having been filed prematurely,
since placing employees on forced leave or floating status is a valid exercise of
management prerogative and IKSI never really had an intention to terminate
their employment. It relied on the memoranda28 which IKSI issued to
respondents, the tenor of which would show the intention to recall the affected
employees back to work once the company's condition improves. The NLRC
affirmed the LA’s ruling and declared that the fact of dismissal, whether legal or
illegal, is absent in this case.
Among the authorized causes for termination under Article 298 29 of the Labor
Code is retrenchment, or what is sometimes referred to as a layoff, thus:
Art. 298. 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. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (112) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
Retrenchment is the severance of employment, through no fault of and without
prejudice to the employee, which management resorts to during the periods of
business recession, industrial depression, or seasonal fluctuations, or during lulls
caused by lack of orders, shortage of materials, conversion of the plant to a new
production program or the introduction of new methods or more efficient
machinery, or of automation. In other words, lay-off is an act of the employer of
dismissing employees because of losses in the operation, lack of work, and
considerable reduction on the volume of its business. However, a lay-off would
amount to dismissal only if it is permanent. When it is only temporary, the
employment status of the employee is not deemed terminated, but merely
suspended.30
Article 298, however, speaks of permanent retrenchment as opposed to
temporary lay-off, as in the present case.1âwphi1There is no specific provision of
law which treats of a temporary retrenchment or lay-off and provides for the
requisites in effecting it or a specific period or duration. 31 Notably, in both
permanent and temporary lay-offs, the employer must act in good faith - that is,
one which is intended for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of the employees under the
law or under valid agreements.32
Certainly, the employees cannot forever be temporarily laid-off. Hence, in order
to remedy this situation or fill the hiatus, Article 301 33 may be applied to set a
8
specific period wherein employees may remain temporarily laid-off or in floating
status.34 Article 301 states:
Art. 301. When Employment not Deemed Terminated. The bona-fide suspension
of the operation of a business or undertaking for a period not exceeding six (6)
months, or the fulfillment by the employee of a military or civic duty shall not
terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.
The law set six (6) months as the period where the operation of a business or
undertaking may be suspended, thereby also suspending the employment of the
employees concerned. The resulting temporary lay-off, wherein the employees
likewise cease to work, should also not last longer than six (6) months. After the
period of six (6) months, the employees should either then be recalled to work or
permanently retrenched following the requirements of the law. Failure to comply
with this requirement would be tantamount to dismissing the employees, making
the employer responsible for such dismissal.35 Elsewise stated, an employer may
validly put its employees on forced leave or floating status upon bona
fide suspension of the operation of its business for a period not exceeding six (6)
months. In such a case, there is no termination of the employment of the
employees, but only a temporary displacement. When the suspension of the
business operations, however, exceeds six (6) months, then the employment of
the employees would be deemed terminated,36 and the employer would be held
liable for the same.
Indeed, closure or suspension of operations for economic reasons is recognized
as a valid exercise of management prerogative. But the burden of proving, with
sufficient and convincing evidence, that said closure or suspension is bona
fide falls upon the employer. In the instant case, IKSI claims that its act of
placing respondents on forced leave after a decrease in work volume, subject to
recall upon availability of work, was a valid exercise of its right to lay-off, as an
essential component of its management prerogatives. The Court agrees with the
LA's pronouncement that requiring employees on forced leave is one of the cost-
saving measures adopted by the management in order to prevent further losses.
However, IKSI failed to discharge the burden of proof vested upon it. Having the
right should not be confused with the manner in which that right is exercised; the
employer cannot use it as a subterfuge to run afoul of the employees' guaranteed
right to security of tenure. The records are bereft of any evidence of actual
suspension of IKSI's business operations or even of the ACT Project alone. In
fact, while IKSI cited Article 301 to support the temporary lay-off of its
employees, it never alleged that it had actually suspended the subject
undertaking to justify such lay-off. It merely indicated changes in business
conditions and client requirements and specifications as its basis for the
implemented forced leave/lay-off.37
In light of the well-entrenched rule that the burden to prove the validity and
legality of the termination of employment falls on the employer, IKSI should have
established the bona fide suspension of its business operations or undertaking
that could legitimately lead to the temporary layoff of its employees for a period
not exceeding six (6) months, in accordance with Article 301. 38 The LA severely
erred when it sustained respondents' temporary retrenchment simply because
the volume of their work would sometimes decline, thus, several employees at
the ACT Project stream experienced unproductive time.39 Considering the grave
consequences occasioned by retrenchment, whether permanent or temporary, on
the livelihood of the employees to be dismissed, and the avowed policy of the
State to afford full protection to labor and to assure the employee's right to enjoy
security of tenure, the Court stresses that not every loss incurred or expected to
be incurred by a company will justify retrenchment. The losses must be
substantial and the retrenchment must be reasonably necessary to avert such
losses. The employer bears the burden of proving this allegation of the existence
or imminence of substantial losses, which by its nature is an affirmative defense.
It is the employer’s duty to prove with clear and satisfactory evidence that
legitimate business reasons exist in actuality to justify any retrenchment. Failure
to do so would inevitably result in a finding that the dismissal is unjustified.
Otherwise, such ground for termination would be susceptible to abuse by
scheming employers who might be merely feigning business losses or reverses in
their business ventures to dispose of their employees.40
Here, IKSI never offered any evidence that would indicate the presence of a bona
fide suspension of its business operations or undertaking. IKSI’s paramount
consideration should be the dire exigency of its business that compelled it to put
some of its employees temporarily out of work. This means that it should be able
9
to prove that it faced a clear and compelling economic reason which reasonably
constrained it to temporarily shut down its business operations or that of the ACT
Project, incidentally resulting in the temporary lay-off of its employees assigned
to said particular undertaking. Due to the grim economic repercussions to the
employees, IKSI must likewise bear the burden of proving that there were no
other available posts to which the employees temporarily put out of work could
be possibly assigned.41 Unfortunately, IKSI was not able to fulfill any of the
aforementioned duties. IKSI cannot simply rely solely on the alleged decline in
the volume of work for the ACT Project to support the temporary retrenchment of
respondents. Businesses, by their very nature, exist and thrive depending on the
continued patronage of their clients. Thus, to some degree, they are subject to
the whims of clients who may suddenly decide to discontinue patronizing their
services for a variety of reasons. Being inherent in any enterprise, employers
should not be allowed to take advantage of this entrepreneurial risk and use it in
a scheme to circumvent labor laws. Otherwise, no worker could ever attain
regular employment status.42 In fact, IKSI still continued its operations and
retained several employees who were also working on the ACT Project even after
the implementation of the January 2010 forced leave. Much worse, it continued
to hire new employees, with the same qualifications as some of respondents,
through paid advertisements and placements in Suns tar Cebu, 43 a local
newspaper, dated February 24, 2010 and March 7, 2010. The placing of an
employee on floating status presupposes, among others, that there is less work
than there are employees. But if IKSI continued to hire new employees then it
can reasonably be assumed that there was a surplus of work available for its
existing employees. Hence, placing respondents on floating status was
unnecessary. If any, respondents - with their experience, knowledge, and
familiarity with the workings of the company - should be preferred to be given
new projects and not new hires who have little or no experience working for
IKSI.44
There being no valid suspension of business operations, IKSI’s act amounted to
constructive dismissal of respondents since it could not validly put the latter on
forced leave or floating status pursuant to Article 301. And even assuming,
without admitting, that there was indeed suspension of operations, IKSI did not
recall the employees back to work or place them on valid permanent
retrenchment after the period of six (6) months, as required of them by law. IKSI
could not even use the completion of the duration of the alleged project as an
excuse for causing the termination of respondents’ employment. It must be
pointed out that the termination was made in 2010 and the expected completion
of the project in respondents' contracts was still in 2012 to 2014. Also, if the
Court would rely on IKSI’s own Notice of Partial Appeal and Memorandum on
Partial Appeal45 before the NLRC dated December 10, 2010, respondents might
even had been put on floating status for a period exceeding the required
maximum of six (6) months. Evidence reveal that the assailed forced leave took
effect on January 7, 2010 and IKSI eventually sent its termination letters four (4)
months after, or on May 27, 2010, with the effectivity of said termination being
on July 7, 2010. But as of December 10, 2010, IKSI was still insisting that
respondents were never dismissed and were merely placed on forced leave. It
was only in its Comment on Complainants’ Motion for Reconsideration dated
August 3, 2011 did IKSI admit the fact of dismissal when it appended its own
termination letters dated May 27, 2010.
But even on May 27, 2010, there was still no basis for IKSI to finally make the
retrenchment permanent. While it acknowledged the fact that respondents could
not be placed on an indefinite floating status, it still failed to present any proof of
a bona fide closing or cessation of operations or undertaking to warrant the
termination of respondents' employment. The termination letter46 reads:
As you are probably already been aware by now, our Product Stream ACTDR of
Project CSP, have been experiencing a considerably downward trend in terms of
workload. The Company has undertaken every effort to obtain new commitments
from its clients abroad in order to proceed with the expected volume of work
under the same product stream.
Unfortunately, however, it has become evident that despite said efforts being
exerted by the Company, the prospect of new work related to the product stream
coming in, remains uncertain at this point. Management has already utilized all
available options, which include placing its project employees on forced leave.
This, however, cannot go on indefinitely.
It is therefore, with deep regret, that we inform you that in view of the
unavailability of work of the aforementioned product stream as well as
the uncertainties pertaining to the arrival of new worldoads thereof, we
are constrained to terminate your Project Employment Contract in accordance
10
with the terms and conditions stated under the Termination of
Employment of your Project Employment Contract, effective 7/7/2010.
xxx
It bears to point out that said termination letter did not even state any of the
following valid grounds under the law as anchor for the dismissal:
Art. 297. Termination by Employer. An employer may terminate an employment
for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representative; and
(e) Other causes analogous to the foregoing.47
Art. 298. 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. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (1/2) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
The NLRC likewise committed a grave error when it held that there was no basis
for respondents' reliance on the case of Bontia v. NLRc48 on the sole ground that,
in the present case, the employees were neither actually nor constructively
dismissed. The Court affirms respondents’ contention that when IKSI feigned
suspension of operations and placed respondents on forced leave, the same had
already amounted to constructive dismissal. And when IKSI sent letters informing
them that they would be terminated effective July 7, 2010, respondents then had
been actually dismissed. In Bontia, the manner by which the employer severed
its relationship with its employees was remarkably similar to the one in the case
at bar, which was held to be an underhanded circumvention of the law.
Consolidated Plywood Industries summarily required its employees to sign
applications for forced leave deliberately crafted to be without an expiration date,
like in this case. This consequently created an uncertain situation which
necessarily discouraged, if not altogether prevented, the employees from
reporting, or determining when or whether to report for work. The Court further
ruled that even assuming that the company had a valid reason to suspend
operations and had filed the necessary notice with the Department of Labor and
Employment (DOLE), it still would not be a legitimate excuse to cursorily dismiss
employees without properly informing them of their rights and status or paying
their separation pay in case they were eventually laid off. Under the Labor Code,
separation pay is payable to an employee whose services are validly terminated
as a result of retrenchment, suspension, closure of business or disease. Thus, the
Court held that Consolidated Plywood's employees should, at the very least, have
been given separation pay and properly informed of their status so as not to
leave them in a quandary as to how they would properly respond to such a
situation.49 Similarly, respondents never received any separation pay when they
were terminated in July of 2010 since IKSI had been denying the existence of a
dismissal, whether actual or constructive.
Withal, in both permanent and temporary lay-offs, jurisprudence dictates that the
one (1)-month notice rule to both the DOLE and the employee under Article 298
is mandatory.50 Here, both the DOLE and respondents did not receive any prior
notice of the temporary lay-off. The DOLE Region VII Office was only informed on
11
January 11, 201051 or four (4) days after the forced leave had already taken
effect. On the other hand, respondents received the notice 52 of forced leave on
January 7, 2010, after the business day of which the same forced leave was to
take effect. Respondents also pointed out that when they received said notice,
they were told to no longer report starting the next day, made to completely
vacate their workstations and surrender their company identification cards, and
were not even allowed to use their remaining unused leave credits, which gave
them the impression that they would never be returning to the company ever
again.
Since dismissal is the ultimate penalty that can be meted to an employee, the
requisites for a valid dismissal from employment must always be met, namely:
(1) it must be for a just or authorized cause; and (2) the employee must be
afforded due process,53 meaning, he is notified of the cause of his dismissal and
given an adequate opportunity to be heard and to defend himself. Our rules
require that the employer be able to prove that said requisites for a valid
dismissal have been duly complied with. Indubitably, IKSI’s intent was not
merely to put respondents' employment on hold pending the existence of the
unfavorable business conditions and call them back once the same improves, but
really to sever the employer-employee relationship with respondents right from
the very start. The Court cannot just turn a blind eye to IKSI’s manifest bad faith
in terminating respondents under the guise of placing them on a simple floating
status. It is positively aware of the unpleasant practice of some employers of
violating the employees' right to security of tenure under the pretense of a
seemingly valid employment contract and/or valid termination. We must abate
the culture of employers bestowing security of tenure to employees, not on the
basis of the latter's performance on the job, but on their ability to toe the
line.54 Unfortunately for IKSI, they chanced upon respondents who, unlike the
ordinary workingman who always plays an easy prey to these perfidious
companies, are fully aware of their rights under the law and simply refuse to
ignore and endure in silence the flagrant irruption of their rights, zealously
safeguarded by the Constitution and our labor laws.
Procedural Issues
Tested against the above-discussed considerations, the Court finds that the CA
correctly granted respondents’ certiorari petition before it, since the NLRC gravely
abused its discretion in ruling that respondents were merely IKSI’s project
employees and that they were validly put on floating status as part of
management prerogative, when they had satisfactorily established by substantial
evidence that they had become regular employees and had been constructively
dismissed.55 Grave abuse of discretion connotes judgment exercised in a
capricious and whimsical manner that is tantamount to lack of jurisdiction. 56 In
labor disputes, grave abuse of discretion may be ascribed to the NLRC
when, inter alia, its findings and conclusions, as in the case at bar, are not
supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.57
In the NLRC’s Decision, only the following petitioners were included: Michael A.
Rebato, Hernan Ed Noel L. de Leon, Jr., Wendell B. Quiban, Fritz Sembrino,
Ismael R. Garaygay III, Edson S. Solis, Stephen Olingay, Ronan Alamillo, Jess
Vincent A. dela Pefia, Dax Matthew M. Quijano, Juneth A. Rentuma and Socorro
D'Marie T. Inting. On the other hand, James Horace Balonda, Dennis C. Rizon,
Ennoh Chentis R. Fernandez, Aldrin 0. Torrentira, Michael Ray B. Molde, Rodolfo
M. Vasquez, Ma. Nazelle B. Miralles, and Carl Hermes Carskit were excluded. IKSI
argued that those eight (8) who were excluded did not sign the required
Verification and Certification of Non-Forum Shopping of the Appeal Memorandum
before the NLRC, and some of them also failed to execute the Verification in the
Petition for Certiorari before the CA.
The Court has previously set the guidelines pertaining to non-compliance with the
requirements on, or submission of defective, verification and certification against
forum shopping:58
1) A distinction must be made between non-compliance with the requirement on
or submission of defective verification, and noncompliance with the requirement
on or submission of defective certification against forum shopping;
2) As to verification, non-compliance therewith or a defect therein does not
necessarily render the pleading fatally defective. The court may order its
submission or correction, or act on the pleading if the attending circumstances
are such that strict compliance with the Rule may be dispensed with in order that
the ends of justice may be served;
12
3) Verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition
signs the verification, and when matters alleged in the petition have been made
in good faith or are true and correct;
4) As to certification against forum shopping, non-compliance therewith or a
defect therein, unlike in verification, is generally not curable by its subsequent
submission or correction thereof, unless there is a need to relax the Rule on the
ground of substantial compliance or the presence of special circumstances or
compelling reasons;
5) The certification against forum shopping must be signed by all the plaintiffs or
petitioners in a case; otherwise, those who did not sign will be dropped as parties
to the case. Under reasonable or justifiable circumstances, however, as when all
the plaintiffs or petitioners share a common interest and invoke a common cause
of action or defense, the signature of only one of them in the certification against
forum shopping substantially complies with the Rule; and
6) Finally, the certification against forum shopping must be executed by the
party-pleader, not by his counsel.1âwphi1 If, however, for reasonable or
justifiable reasons, the party-pleader is unable to sign, he must execute a Special
Power of Attorney designating his counsel of record to sign on his behalf.
In the case at hand, only twelve (12) of respondents were able to sign the
Verification and Certification Against Forum Shopping since they were only given
ten (10) days from the receipt of the LA's decision to perfect an appeal. Some of
them were even no longer based in Cebu City. But it does not mean that those
who failed to sign were no longer interested in pursuing their case.
In view of the circumstances of this case and the substantive issues raised by
respondents, the Court finds justification to liberally apply the rules of procedure
to the present case. Rules of procedure should be viewed as mere tools designed
to facilitate the attainment of justice; their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote
substantial justice, must always be eschewed.59
In a similar case, the Court found that the signing of the Verification by only 11
out of the 59 petitioners already sufficiently assured the Court that the
allegations in the pleading were true and correct and not the product of the
imagination or a matter of speculation; that the pleading was filed in good faith;
and that the signatories were unquestionably real parties-in-interest who
undoubtedly had sufficient knowledge and belief to swear to the truth of the
allegations in the petition.60 In the same vein, the twelve (12) respondents who
signed the Verification in the instant case had adequate knowledge to swear to
the truth of the allegations in their pleadings, attesting that the matters alleged
therein have been made in good faith or are true and correct. With respect to the
failure of some of respondents to sign the Certification Against Forum Shopping,
IKSI cited the case of Altres, et al. v. Empleo61 which ruled that the non-signing
petitioners were dropped as parties to the case. However, the reason of the Court
for removing said petitioners from the case was not because of the failure to
sign per se, but actually because of the fact that they could no longer be
contacted or were indeed no longer interested in pursuing the case. 62 Here, as
mentioned earlier, those who failed to sign the certification against forum
shopping will not be dropped as parties to the case since reasonable or justifiable
circumstances are extant, as all respondents share a common interest and invoke
a common cause of action or defense; the signatures of some or even only one of
them substantially complies with the Rule.
The Court previously held that the signature of only one of the petitioners
substantially complied with the Rules if all the petitioners share a common
interest and invoke a common cause of action or defense. 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 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.63 Thus, when respondents appealed their case to the NLRC and the CA,
they pursued the same as a collective body, raising only one argument in support
of their rights against the illegal dismissal allegedly committed by IKSI. There
was sufficient basis, therefore, for the twelve (12) respondents to speak and file
the Appeal Memorandum before the NLRC and the petition in the CA for and in
behalf of their co-respondents.
13
Clearly, verification, like in most cases required by the rules of procedure, is a
formal requirement, not jurisdictional.64 Such requirement is simply a condition
affecting the form of pleading, the non-compliance of which does not necessarily
render the pleading fatally defective.65 It is mainly intended to secure an
assurance that matters which are alleged are done in good faith or are true and
correct and not of mere speculation. Thus, when circumstances so warrant, as in
this case, the court may simply order the correction of the unverified pleadings or
act on it and waive strict compliance with the rules in order that the ends of
justice may be served.66 Moreover, no less than the Labor Code directs labor
officials to use all reasonable means to ascertain the facts speedily and
objectively, with little regard to technicalities or formalities, while Section 10,
Rule VII of the New Rules of Procedure of the NLRC provides that technical rules
are not binding. Indeed, the application of technical rules of procedure may be
relaxed in labor cases to serve the demand of substantial justice. Labor cases
must be decided according to justice and equity and the substantial merits of the
controversy. After all, the policy of our judicial system is to encourage full
adjudication of the merits of an appeal. Procedural niceties should be avoided in
labor cases in which the provisions of the Rules of Court are applied only in
suppletory manner. Indeed, rules of procedure may be relaxed to relieve a part
of an injustice not commensurate with the degree of non-compliance with the
process required. For this reason, the Court cannot indulge IKSI in its tendency
to nitpick on trivial technicalities to boost its self-serving arguments.67
The CA, however, erred when it still considered Atty. Ennoh Chentis Fernandez as
one of the petitioners before it and included him in the dispositive portion of its
decision. It must be noted that Fernandez was one of those who filed the Motion
for Execution of Decision68 dated May 28, 2012, which prayed for the issuance of
a writ of execution of the LA and NLRC’s rulings. The movants likewise admitted
therein that while some of them elevated the case to the NLRC, they, however,
did not. Corollarily, Fernandez should have been dropped as one of the parties to
the case before the CA since the rulings of the labor tribunals had already
attained finality with respect to him.
Award of Damages
Inasmuch as IKSI failed to adduce clear and convincing evidence to support the
legality of respondents' dismissal, the latter is entitled to reinstatement without
loss of seniority rights and backwages computed from the time compensation was
withheld up to the date of actual reinstatement, as a necessary consequence.
However, reinstatement is no longer feasible in this case because of the palpable
strained relations between the parties and the possibility that the positions
previously held by respondents are already being occupied by new hires. Thus,
separation pay equivalent to one (1) month salary for every year of service
should be awarded in lieu of reinstatement.69
The Court sustains the CA’s award of moral and exemplary damages. Award of
moral and exemplary damages for an illegally dismissed employee is proper
where the employee had been harassed and arbitrarily terminated by the
employer. Moral damages may be awarded to compensate one for diverse
injuries such as mental anguish, besmirched reputation, wounded feelings, and
social humiliation occasioned by the unreasonable dismissal. The Court has
consistently accorded the working class a right to recover damages for unjust
dismissals tainted with bad faith, where the motive of the employer in dismissing
the employee is far from noble. The award of such damages is based, not on the
Labor Code, but on Article 2220 of the Civil Code. In line with recent
jurisprudence, the Court finds the amount of ₱50,000.00 for each of moral and
exemplary damages adequate.70
The award of attorney's fees is likewise due and appropriate since respondents
incurred legal expenses after they were forced to file an action to protect their
rights.71 The rate of interest, however, has been changed to 6% starting July 1,
2013, pursuant to the Bangko Sentral ng Pilipinas Circular No. 799, Series of
2013.72
Innodata Knowledge Services, Inc. and hence, the latter is hereby ORDERED to
PAY each of them the following:
a) Backwages and all other benefits from the time compensation was
withheld on January 8, 2010 until finality of this Decision;
b) Separation pay equivalent to one (1) month salary for every year of
service, with a fraction of at least six (6) months to be considered as one
(1) whole year, to be computed from the date of their employment up to
the finality of this Decision;
c) Moral and exemplary damages, each in the amount of ₱50,000.00;
d) Attorney’s fees equivalent to ten percent (10%) of the total awards;
and
e) Legal interest of twelve percent (12%) per annum of the total monetary
awards computed from January 8, 2010 up to June 30, 2013 and six
percent (6%) per annum from July 1, 2013 until their full satisfaction.
The case is hereby ordered REMANDED to the labor arbiter for the computation
of the amounts due each respondent.
Costs on petitioner Innodata Knowledge Services, Inc.
SO ORDERED.

WHEREFORE, IN VIEW OF THE FOREGOING, the Court DISMISSES the

petition, and AFFIRMS with MODIFICATIONS the Decision of the Court of
Appeals Cebu, Twentieth (20th) Division, dated August 30, 2013 and Resolution
dated March 12, 2014 in CA-G.R. CEB-SP No. 06443. Respondents Socorro
D'Marie Inting, Ismael R. Garaygay, Edson S. Solis, Michael A. Rebato, James
Horace Balonda, Stephen C. Olingay, Dennis C. Rizon, Juneth A. Rentuma,
Hernan Ed Noel I. de Leon, Jr., Jess Vincent A. dela Pefia, Ronan V. Alamillo,
Wendell B. Quiban, Aldrin 0. Torrentira, Michael Ray B. Molde, Fritz J. Sembrino,
Dax Matthew M. Quijano, Rodolfo M. Vasquez, Ma. Nazelle B. Miralles and Carl
Hermes Carskit are declared to have been illegally dismissed by petitioner

14
 G.R. Nos. 174365-66 February 4, 2015
Donor September 16, 1995 February 13, 1997

ROMEO BASAN, DANILO DIZON, JAIME L. TUMABIAO, JR., ROBERTO Nicolas May 10, 1996 January 30, 1997
DELA RAMA, JR., RICKY S. NICOLAS, CRISPULO D. DONOR, GALO
FALGUERA, and NATIONAL LABOR RELATIONS COMMISSION,Petitioners, Falguera January 15, 1991 April 1996
vs.
COCA-COLA BOTTLERS PHILIPPINES,* Respondent. Respondent corporation, however, countered that it hired petitioners as
temporary route helpers to act as substitutes for its absent regular route helpers
DECISION merely for a fixed period in anticipation of the high volume of work in its plants or
sales offices.6 As such, petitioners’ claims have no basis for they knew that their
PERALTA, J.: assignment as route helpers was temporary in duration.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules On August 21, 1998, the Labor Arbiter ruled in favor of petitioners and found that
of Court seeking to reverse and set aside the Decision1 dated August 31, 2005 since they were performing activities necessary and desirable to the usual
and Resolution2 dated August 24, 2006 of the Court of Appeals (CA) in CA-G.R. business of petitioner for more than the period for regularization, petitioners are
SP Nos. 80977 & 87071, which reversed the Resolutions dated January 30, considered as regular employees, and thus, their dismissal was done contrary to
20033 and September 24, 20034 of the National Labor Relations Commission law in the absence of just cause and prior written notice. 7 Thus, it ordered
(NLRC) in NLRC 00-02-01419-97. respondent to reinstate petitioners with full backwages from the time their
salaries were withheld until their actual reinstatement and to pay their lump sum
The factual antecedents are as follows. increase extended to them in their collective bargaining agreement, their accrued
vacation and sick leave benefits, as well as monetary awards and attorney’s
On February 18, 1997, petitioners Romeo Basan, Danilo Dizon, Jaime L. fees.8
Tumabiao, Jr., Roberto Dela Rama,Jr., Ricky S. Nicolas, Crispulo D. Donor, Galo
Falguera filed a complaint for illegal dismissal with money claims against On January 30, 2003, the NLRC affirmed the Labor Arbiter’s decision and rejected
respondent Coca-Cola Bottlers Philippines, alleging that respondent dismissed respondent’s contention that petitioners were merely employed for a specific
them without just cause and prior written notice required by law. In their position project or undertaking the completion or termination of which has been
paper, petitioners provided for the following material dates: 5 determined at the time of their engagement. It stressed that nowhere in the
records of the case was it shown that petitioners were hired as project or
Name of Petitioner Date of Hiring Date of Dismissal seasonal employees, respondent having failed to submit any contract of project
or other similar proof thereof.9 It also noted that neither can petitioners be
Dela Rama November 16, 1995 February 13, 1997 considered as probationary employees for the fact that they had performed their
services for more than six (6) months. In addition, the NLRC upheld the Labor
Dizon October 1988 December 15, 1996 Arbiter’s ruling that petitioners, as route helpers, performed work directly
connected or necessary and desirable in respondent’s ordinary business of
Tumabiao February 2, 1992 February 13, 1997
manufacturing and distributing its softdrink products. Thus, respondent failed to
Basan July 13, 1996 January 31, 1997 overcome petitioners’ assertion that they were regular employees. As such, their
employment could only be terminated with just cause and after the observance of

15
the required due process. Thereafter, the subsequent motion for reconsideration
filed by respondent was further denied by the NLRC on September 24, 2003.
On December 9, 2003, respondent filed a petition for certiorari 10 with the CA
alleging grave abuse of discretion on the part of the NLRC in finding that
petitioners were regular employees. In the meantime, petitioners filed before the
Labor Arbiter a Motion for Issuance of a Writ of Execution 11 dated December 15,
2003, to which respondent filed a Manifestation and Motion with attached
Opposition.12 On March 25, 2004, the Labor Arbiter ordered that the Writ of
Execution be issued, which was affirmed by the NLRC on June 21, 2004.
Consequently, respondent filed another petition for Certiorari 13 on October 22,
2004, claiming that the NLRC committed grave abuse of discretion in directing
the execution of a judgment, the propriety and validity of which was still under
determination of the appellate court.
In its Decision dated August 31, 2005, the CA consolidated respondent’s two (2)
petitions for certiorari and reversed the rulings of the NLRC and the Labor Arbiter
in the following wise:
That the respondents "performed duties which are necessary or desirable in the
usual trade or business of Coca-Cola," is of no moment. This is not the only
standard for determining the status of one’s employment. Such fact does not
prevent them from being considered as fixed term employees of Coca-Cola whose
engagement was "fixed" for a specific period. The respondent’s repeated hiring
for various periods (ranging from more than six months for private respondent
Basan to eight years in the case of private respondent Dizon) would not
automatically categorize them as REGULAR EMPLOYEES.
xxxx
It being supported by facts on record and there being no showing that the
employment terms were foisted on the employees through circumstances
vitiating or diminishing their consent, following Brent School, Inc. vs.
Zamora(G.R. No. 48494, Feb. 5, 1990), the respondents must be considered as
fixed term employees whose "seasonal employment" or employment for a
"period" have been "set down." After all, as conceded by Brent, fixed term
employment continues to be allowed and enforceable in this jurisdiction. Not
16
being permanent regular employees, it must be held that the respondents are not
entitled to reinstatement and payment of full backwages.14
Petitioners sought a reconsideration of the CA’s Decision on procedural and
substantive grounds. On the procedural, they alleged that respondent, in filing its
appeal of the Labor Arbiter’s August 21, 1998 decision with the NLRC only on
December 20, 1998, rendered the Decision of the Labor Arbiter final and
executory, and thus, deprived the CA of jurisdiction to alter the final
judgment.15 They also claimed that the Resolutions of the NLRC have become
final and executory in view of the Entries of Judgment dated December 16, 2003
and September 16, 2004 issued by the NLRC. As to the substantial matter,
petitioners assert that they are regular employees entitled to security of tenure.
On August 24, 2006, the CA denied petitioners’ motion for reconsideration in
saying that it is no longer necessary to discuss whether respondent was able to
timely appeal the Labor Arbiter’s decision to the NLRC, in view of the fact that the
latter had already given due course to said appeal by deciding the case on the
merits and, more importantly, petitioners’ failure to raise the alleged infirmity
before the NLRC in opposition to respondent’s appeal.
Hence, the instant petition invoking the following grounds:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY AND PATENTLY ERRED
AND COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO THE
LACK OR EXCESS OF JURISDICTION IN RULING THAT THE PETITIONERS
WERE NOT REGULAR EMPLOYEES.
II.
THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN
THE CHALLENGED DECISIONS AS TO WARRANT THE EXERCISE OF THE
COURT’S DISCRETIONARY APPELLATE JURISDICTION.
Petitioners essentially maintain that contrary to the findings of the CA, they were
continuously hired by respondent company to perform duties necessary and
 desirable in the usual trade or business and are, therefore, regular employees.
Falguera
They allege that if their services had really been engaged for fixed specific
periods, respondent should have at least provided the contracts of employment
evidencing the same.
For its part, respondent contends that the petition should be denied due course
for its verification and certification of non-forum shopping was signed by only one
of the petitioners. It alleges that even assuming the validity of the same, it
should still be dismissed for the appellate court aptly found that petitioners were
fixed-term employees who were hired intermittently. Respondent also asserts
that petitioners failed to completely substantiate their claims, for during the
hearing conducted before the Labor Arbiter on March 11, 1998, the payslips
presented by petitioners merely established the following employment terms:
6 months From 1992
To 1997
Considering that the evidence presented showed that petitioners merely rendered
their services for periods of less than a year, respondent claims that petitioners
could not have attained regular employment status. It added that its failure to
present petitioners’ employment contracts was due to a fire that destroyed its
Manila Plant where said contracts were kept. Nevertheless, respondent
persistently asserts that where a fixed period of employment was agreed upon
knowingly and voluntarily by the petitioners, the duration of which was made
known to them at the time of their engagement, petitioners cannot now claim
otherwise. In addition, it disagrees with the contention that petitioners, as route
helpers, were performing functions necessary or desirable to its business.

Name of Petitioner Length of Service Dates The petition is impressed with merit.
Dela Rama 5 months, 4 months Between November 30, 1995
On the procedural issue, We hold that while the general rule is that the
And March 31, 1996
verification and certification of non-forum shopping must be signed by all the
Dizon 4 months In 1993 petitioners in a case, the signature of only one of them, petitioner Basan in this
2 months In 1994 case, appearing thereon may be deemed substantial compliance with the
9 months In 1996 procedural requirement. Jurisprudence is replete with rulings that the rule on
verification is deemed substantially complied with when one who has ample
Tumabiao 3 months From November 15, 1996 knowledge to swear to the truth of the allegations in the complaint or petition
To January 31, 1997 signs the verification, and when matters alleged in the petition have been made
in good faith or are true and correct.16 Similarly, this Court has consistently held
Basan 6.5 months From May 15, 1996
that when under reasonable or justifiable circumstances, as when all the
1 month To December 31, 1996
petitioners share a common interest and invoke a common cause of action or
From January 15, 1997
defense, as in this case, the signature of only one of them in the certification
To January 31, 1997
against forum shopping substantially complies with the certification
Donor 1 month From February 15, 1996 requirement.17 Thus, the fact that the petition was signed only by petitioner
To March 15, 1996 Basan does not necessarily result in its outright dismissal for it is more in accord
1 month From December 15, 1996 with substantial justice to overlook petitioners’ procedural lapses. 18 Indeed, the
To January 15, 1997 application of technical rules of procedure may be relaxed in labor cases to serve
the demand of justice.19
Nicolas 8.5 months In 1996 and 1997
As for the primordial issue in this case, it must be noted that the same has
already been resolved in Magsalin v. National Organization of Working
17
Men,20 wherein this Court has categorically declared that the nature of work of
route helpers hired by Coca Cola Bottlers Philippines, Inc. is necessary and
desirable in its usual business or trade thereby qualifying them as regular
employees, to wit:
Coca-Cola Bottlers Phils., Inc., is one of the leading and largest manufacturers of
softdrinks in the country. Respondent workers have long been in the service of
petitioner company. Respondent workers, when hired, would go with route
salesmen on board delivery trucks and undertake the laborious task of loading
and unloading softdrink products of petitioner company to its various delivery
points.
Even while the language of law might have been more definitive, the clarity of its
spirit and intent, i.e., to ensure a "regular" worker's security of tenure, however,
can hardly be doubted. In determining whether an employment should be
considered regular or non-regular, the applicable test is the reasonable
connection between the particular activity performed by the employee in relation
to the usual business or trade of the employer. The standard, supplied by the law
itself, is whether the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by looking into the
nature of the services rendered and its relation to the general scheme under
which the business or trade is pursued in the usual course. It is distinguished
from a specific undertaking that is divorced from the normal activities required in
carrying on the particular business or trade. But, although the work to be
performed is only for a specific projector seasonal, where a person thus engaged
has been performing the job for at least one year, even if the performance is not
continuous or is merely intermittent, the law deems the repeated and continuing
need for its performance as being sufficient to indicate the necessity or
desirability of that activity to the business or trade of the employer. The
employment of such person is also then deemed to be regular with respect to
such activity and while such activity exists.
The argument of petitioner that its usual business or trade is softdrink
manufacturing and that the work assigned to respondent workers as sales route
helpers so involves merely "postproduction activities," one which is not
indispensable in the manufacture of its products, scarcely can be persuasive. If,
as so argued by petitioner company, only those whose work are directly involved
18
in the production of softdrinks may be held performing functions necessary and
desirable in its usual business or trade, there would have then been no need for it
to even maintain regular truck sales route helpers.1âwphi1 The nature of the
work performed must be viewed from a perspective of the business or trade in its
entirety and not on a confined scope.
The repeated rehiring of respondent workers and the continuing need for their
services clearly attest to the necessity or desirability of their services in the
regular conduct of the business or trade of petitioner company. The Court of
Appeals has found each of respondents to have worked for at least one year with
petitioner company. While this Court, in Brent School, Inc. vs. Zamora, has
upheld the legality of a fixed-term employment, it has done so, however, with a
stern admonition that where from the circumstances it is apparent that the period
has been imposed to preclude the acquisition of tenurial security by the
employee, then it should be struck down as being contrary to law, morals, good
customs, public order and public policy. The pernicious practice of having
employees, workers and laborers, engaged for a fixed period of few months,
short of the normal six-month probationary period of employment, and,
thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious
circumvention of the law cannot be countenanced. The fact that respondent
workers have agreed to be employed on such basis and to forego the protection
given to them on their security of tenure, demonstrate nothing more than the
serious problem of impoverishment of so many of our people and the resulting
unevenness between labor and capital. A contract of employment is impressed
with public interest. The provisions of applicable statutes are deemed written into
the contract, and "the parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
with each other."21
In fact, in Pacquing, et. al. v. Coca-Cola Philippines, Inc.,22 this Court applied the
ruling cited above under the principle of stare decisis et non quieta movere
(follow past precedents and do not disturb what has been settled). It was held
therein that since petitioners, as route helpers, were performing the same
functions as the employees in Magsalin, which are necessary and desirable in the
usual business or trade of Coca Cola Philippines, Inc., they are considered as
regular employees entitled to security of tenure.
Here, respondent, in its position paper, expressly admitted that petitioners were
employed as route helpers in anticipation of the high volume of work in its plants
and sales offices.23 As such, respondent’s contention that petitioners could not
have attained regular employment status for they merely rendered services for
periods of less than a year cannot be sustained in view of the Magsalin doctrine
previously cited. Indeed, the "pernicious practice" of engaging employees for a
fixed period short of the six-month probationary period of employment, and
again, on a day-to-day basis thereafter, mocks the law.
At this point, it is worth recalling that Article 280 of the Labor Code, as amended,
provides:
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 projector 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. Thus, pursuant to the
Article quoted above, there are 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 activities in which they are employed.24 Simply stated, regular employees
are classified into: (1) regular employees by nature of work; and (2) regular
employees by years of service. The former refers to those employees who
perform a particular activity which is necessary or desirable in the usual business
or trade of the employer, regardless of their length of service; while the latter
19
refers to those employees who have been performing the job, regardless of the
nature thereof, for at least a year.25
Petitioners, in this case, fall under the first kind of regular employee above. As
route helpers who are engaged in the service of loading and unloading softdrink
products of respondent company to its various delivery points, which is necessary
or desirable in its usual business or trade, petitioners are considered as regular
employees. That they merely rendered services for periods of less than a year is
of no moment since for as long as they were performing activities necessary to
the business of respondent, they are deemed as regular employees under the
Labor Code, irrespective of the length of their service.
Nevertheless, respondent, as in Magsalin, also asserts that even assuming that
petitioners were performing activities which are usually necessary or desirable in
its usual business or trade, they were employed not as regular employees but
only for a fixed period, which is well within the boundaries of the law, as ruled in
Brent School, Inc. v. Zamora,26 viz.:
There is, on the other hand, the Civil Code, which has always recognized, and
continues to recognize, the validity and propriety of contracts and obligations
with a fixed or definite period, and imposes no restraints on the freedom of the
parties to fix the duration of a contract, whatever its object, be it specie, goods
or services, except the general admonition against stipulations contrary to law,
morals, good customs, public order or public policy. Under the Civil Code,
therefore, and as a general proposition, fixed-term employment contracts are not
limited, as they are under the present Labor Code, to those by nature seasonal or
for specific projects with pre-determined dates of completion; they also include
those to which the parties by free choice have assigned a specific date of
termination.
xxxx
Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly appears to have
been, as already observed, to prevent circumvention of the employee's right to
be secure in his tenure, the clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the substantive
evil that the Code itself has singled out: agreements entered into precisely to
circumvent security of tenure. It should have no application to instances where a
fixed period of employment was agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. Unless thus limited in its purview, the law
would be made to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its effects and apt to
lead to absurd and unintended consequences.27
Thus, under the above Brent doctrine, while it was not expressly mentioned in
the Labor Code, this Court has recognized a fixed-term type of employment
embodied in a contract specifying that the services of the employee shall be
engaged only for a definite period, the termination of which occurs upon the
expiration of said period irrespective of the existence of just cause and regardless
of the activity the employee is called upon to perform. 28Considering, however,
the possibility of abuse by employers in the utilization of fixed-term employment
contracts, this Court, in Brent, laid down the following criteria to prevent the
circumvention of the employee’s security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed
upon by the parties without any force, duress, or improper pressure being
brought to bear upon the employee and absent any other circumstances
vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance
exercised by the former or the latter.29 Unfortunately, however, the
records of this case is bereft of any proof which will show that petitioners
freely entered into agreements with respondent to perform services for a
specified length of time. In fact, there is nothing in the records to show
that there was any agreement at all, the contracts of employment not
having been presented. While respondent company persistently asserted
that petitioners knowingly agreed upon a fixed period of employment and
20
repeatedly made reference to their contracts of employment, the
expiration thereof being made known to petitioners at the time of their
engagement, respondent failed to present the same in spite of all the
opportunities to do so. Notably, it was only at the stage of its appeal to
the CA that respondent provided an explanation as to why it failed to
submit the contracts they repeatedly spoke of. 30 Even granting that the
contracts of employment were destroyed by fire, respondent could have
easily submitted other pertinent files, records, remittances, and other
similar documents which would show the fixed period of employment
voluntarily agreed upon by the parties. They did not, however, aid this
Court with any kind of proof which might tend to show that petitioners
were truly engaged for specified periods, seemingly content with the
convenient excuse that the contracts were destroyed by fire. Indeed,
respondent’s failure to submit the necessary documents, which as
employers are in their possession, gives rise to the presumption that their
presentation is prejudicial to its cause.31
While fixed term employment is not per se illegal or against public policy, the
criteria above must first be established to the satisfaction of this Court. Yet, the
records of this case reveal that for years, petitioners were repeatedly engaged to
perform functions necessary to respondent’s business for fixed periods short of
the six-month probationary period of employment. If there was really no intent to
circumvent security of tenure, respondent should have made it clear to
petitioners that they were being hired only for fixed periods in an agreement
freely entered into by the parties. To this Court, respondent’s act of hiring and
re-hiring petitioners for periods short of the legal probationary period evidences
its intent to thwart petitioner’s security of tenure, especially in view of an
awareness that ordinary workers, such as petitioners herein, are never on equal
terms with their employers.32 It is rather unjustifiable to allow respondent to hire
and rehire petitioners on fixed terms, never attaining regular status. 33 Hence, in
the absence of proof showing that petitioners knowingly agreed upon a fixed term
of employment, We uphold the findings of the Labor Arbiter and the NLRC and so
rule that petitioners are, indeed, regular employees, entitled to security of
tenure. Consequently, for lack of any clear, valid, and just or authorized cause in
terminating petitioners' employment, We find respondent guilty of illegal
dismissal.
WHEREFORE, premises considered, the instant petition is GRANTED. The assailed
Decision dated August 31, 2005 and Resolution dated August 24, 2006 of the
Court of Appeals in CA-G.R. SP Nos. 80977 & 87071 are SET ASIDE. The
Resolutions dated January 30, 2003 and September 24, 2003 of the NLRC in
NLRC 00-02-01419-97, affirming in toto the Decision dated August 21, 1998 of
the Labor Arbiter are REINSTATED with MODIFICATION. Taking into account
petitioners' reinstatement in 199934 and petitioner Falguera's receipt of
₱792,815.64 separation pay,35 respondent is hereby ORDERED to pay petitioners
the following: (1) backwages computed from the date their salaries were withheld
from them until their actual reinstatement; (2) allowances and other benefits, or
their monetary equivalent, at the time of their dismissal; (3) attorney's fees
equivalent to ten percent ( 10%) of the monetary awards; and (4) interest at six
percent ( 6%) per annum of the total monetary awards, computed from the
finality of this Decision until their full satisfaction. For this purpose, the records of
this case are hereby REMANDED to the Labor Arbiter for proper computation of
said awards, deducting amounts already received. Costs against petitioner.

SO ORDERED.

21
G.R. No. 217455, October 05, 2016
OYSTER PLAZA HOTEL, ROLITO GO, AND JENNIFER
AMPEL, Petitioners, v. ERROL O. MELIVO, Respondent.
DECISION
MENDOZA, J.:
This Petition for Review on Certiorari seeks to reverse and set aside the April 30,
2014 Decision1 and the March 12, 2015 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 122767, which affirmed the June 21, 2011
Decision3 of the National Labor Relations Commission (NLRC) in NLRC NCR Case
No. 10-14771-09, a case for illegal dismissal.
The Antecedents:
On October 22, 2009, respondent Errol O. Melivo (Melivo) filed before the NLRC a
Complaint4 for illegal dismissal with prayers for reinstatement and payment of
back wages, holiday pay, overtime pay, service incentive leave, and, 13 th month
pay against petitioners Oyster Plaza Hotel (Oyster Plaza), Rolito Go (Go), and
Jennifer Ampel (Ampel).
The Summons,5 dated October 26, 2009, together with a copy of the complaint,
was served on the petitioners thru registered mail. The said summons ordered
the petitioners to appear before the Labor Arbiter (LA) for mandatory
conciliation/mediation conferences on November 23, 2009 and December 1,
2009. The registry return receipt,6 dated November 27, 2009, showed that the
summons and the copy of the complaint were duly served. The petitioners,
however, failed to appear during the scheduled conferences. Thereafter, the case
was set for formal hearing on January 14, 2010 and a notice of hearing 7 was sent
to the petitioners, requiring them to appear before the LA and file their position
paper, with a warning that failure to appear therein would be construed as a
waiver of the opportunity to be heard. The notice, however, was returned
unserved as there was no one to receive the same. 8 The formal hearing was,
thus, reset to February 17, 2010, and a notice of hearing 9 was again sent to the
petitioners, wherein they were reminded to file their position paper. The registry
22
return receipt10 showed that the said notice was received by a certain Charlie
Miraña (Miraña) on January 25, 2010. At the February 17, 2010 hearing,
however, only Melivo appeared.
On even date, Melivo filed his Position Paper,11 alleging the following: that Oyster
Plaza was a business entity engaged in the business of hotel operation, under the
ownership/management of Go and Ampel; that in August 2008, Oyster Plaza
hired him as a trainee room boy; that in November 2008, Oyster Plaza hired him
as a probationary room boy and he was made to sign an employment contract
but he was not furnished a copy, that the said contract expired in March 2009
and his work ended; that on April 7, 2009, Oyster Plaza hired him again as a
room boy, but without any employment contract or document; and that in
September 2009, his supervisor Ampel verbally told him that his contract was
expiring, thus, he must stop reporting for work.
For the last time, another notice of hearing12 for the March 24, 2010, was again
sent to the petitioners with a directive to file their position paper, but it was again
returned unserved.13 Hence, the case was submitted for decision ex parte.14
The LA Ruling
In its Decision,15 dated April 20, 2010, the LA ruled that Melivo was illegally
dismissed. Considering that Melivo had already rendered six (6) months of
service for Oyster Plaza, the LA held that he had become a regular employee by
operation of law. The LA stated that having attained the regular employment
status, he could only be terminated for a valid cause; and because the petitioners
failed to present countervailing evidence to justify Melivo's dismissal, there could
be no other conclusion except that the dismissal was illegal.
The LA, however, found that there was no underpayment as Melivo was receiving
the basic wage plus cost of living allowance as mandated by law; that he was not
entitled to service incentive leave because he had not rendered at least one (1)
year of service; and that there was no underpayment of holiday pay and
overtime pay because he failed to adduce evidence to support these claims.
In the end, the LA ordered Oyster Plaza to reinstate Melivo to his previous
position and to pay him back wages reckoned from his dismissal on September
15, 2009 until the finality of its decision; his proportionate 13 th month pay; and assigned to it by VICAR Security Agency; that "Oyster Plaza Hotel" was only a
attorney's fees in the amount equivalent to 10% of the total money claims name and business style of its owner, Martyniuk Development
awarded. The dispositive portion of the LA decision Corporation (MDC) and, hence, could not be sued because it had no legal
reads:chanRoblesvirtualLawlibrary personality; that Go was not a stockholder, officer, or director of, and had no
connection with, Oyster Plaza and MDC; that Ampel, whose real name was
CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered finding Jennilyn not Jennifer, was a mere assistant desk officer of Oyster Plaza; and that
complainant illegally dismissed. assuming there was valid service of summons, Melivo was not illegally dismissed
because he was merely employed for a fixed term, which term already expired.
Consequently, respondents must reinstate complainant to his former work as The petitioners also submitted Melivo's Contract of Employment 21 as an
room boy within ten (10) days from receipt of this decision and pay him, in attachment to their memorandum.
solidum, the following amounts:cralawlawlibrary
The NLRC Ruling
a) P57,572.00, as backwages as of March 19, 2010 and to accrue further until
finality of this decision;ChanRoblesVirtualawlibrary On June 21, 2011, the NLRC affirmed the April 20, 2010 Decision of the LA. It
observed that the summons and the complaint, which were addressed to "Oyster
b) P6,631.33, as proportionate 13th month pay; and Plaza Hotel, et al.," were served upon the petitioners by registered mail and
received by them on November 27, 2009. Thus, it was prudent for them to verify
c) 10% of the money awards as attorney's fees. the status of the case with the LA. It further explained that the petitioners'
assertion that they had no knowledge on who received the subject processes and
SO ORDERED.16 pleading did not render the service ineffectual; and that the Rules of Procedure of
chanrobleslaw the NLRC did not specify any person upon whom summons must be served in the
Thereafter, Melivo filed his Motion to Implement Order of Reinstatement. 17 Acting event that the respondent was a juridical entity. Thus, Oyster Plaza was bound by
thereon, the LA issued the Writ of Execution 18 on September 21, 2010. its employee's receipt of the summons.

On October 21, 2010, the petitioners filed their Motion to Quash (Writ of The NLRC was of the view that the petitioners' denial of illegal dismissal did not
Execution, dated September 1, 2010) 19 arguing that they did not receive the deserve any consideration. It posited that the contract of employment failed to
summons, the notices of hearings and the copy of the LA decision. The reveal the specific project or any phase of it where he was employed; and that
petitioners averred that they were only able to secure copies of the records on the petitioners failed to submit a report of his termination to the nearest public
October 14, 2010. employment office, as required under Department Order (D.O.) No, 19. The
failure to file a termination report upon the alleged cessation of Melivo's
Without awaiting the LA's action on their motion to quash, the petitioners filed an employment was an indication that he was not a project employee, but a regular
Appeal before the NLRC In their Appeal Memorandum, 20 the petitioners argued employee. Thus, for want of valid cause for his severance, the NLRC concluded
that none of them was served with summons and notices of the November 23, that Melivo was illegally dismissed.
2009 and December 1, 2009 hearings; that the registry return receipt, dated
November 27, 2009, did not bear a legibly written name to determine who The petitioners moved for reconsideration, but their motion was denied by the
received the summons; that the notice for the February 17, 2010 hearing was NLRC in its Resolution,22dated September 26, 2011.
received by Miraña, a security guard who was not its employee but merely

23
Aggrieved, the petitioners elevated the case to the CA. ISSUES

The CA Ruling I

In its assailed decision, dated April 30, 2014, the CA dismissed the petition for
lack of merit and affirmed the June 21, 2011 NLRC Decision. The appellate court WHETHER OR NOT THE PETITIONERS WERE DEPRIVED OF THEIR RIGHT
held that the failure to implead MDC in the proceedings before the LA and the TO DUE PROCESS OF LAW AS THEY WERE NOT PROPERLY SERVED WITH
NLRC was merely a procedural error which did not affect the jurisdiction of the SUMMONS
labor tribunals. The CA observed that the petitioners failed to raise a valid
argument, much less present sufficient evidence to show that there was II
irregularity in the service of summons. It emphasized that the petitioners'
alternative argument that Ampel was not authorized to receive the summons
bolstered the findings that she indeed received the said summons. It also opined WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT
that the provisions of the Rules of Court only had suppletory application to labor MELIVO WAS ILLEGALLY DISMISSED
cases and, thus, not strictly applied thereto. Finally, it stated that petitioners
failed to produce sufficient evidence, such as the company's General Information III
Sheet, to show that Go was no longer connected with either MDC or Oyster Plaza.

As to the issue of Melivo's illegal dismissal, the CA held that the petitioners failed WHETHER THE COURT OF APPEALS ERRED IN FINDING PETITIONERS GO
to adduce adequate evidence to the contrary. It noted that the petitioners barely AND AMPEL SOLIDARILY LIABLE WITH OYSTER PLAZA/MDC]
argued on the nature of Melivo's employment and they miserably failed to point chanrobleslaw
specific acts by the NLRC which amounted to grave abuse of discretion. The CA The petitioners argue, first, that the service of summons was defective leaving
stated that a perusal of the assailed NLRC decision would readily show that the the proceedings before the LA and the NLRC, and the decisions they rendered,
same was arrived at after considering the evidence presented and arguments void; that neither Miraña nor Ampel was authorized to receive the summons for
raised by the parties. The fallo of the CA decision Oyster Plaza/MDC because they were not its president, manager, secretary,
reads:chanRoblesvirtualLawlibrary cashier, agent, director, corporate secretary, or in-house counsel; that Ampel did
WHEREFORE, the instant Petition is hereby DENIED for lack of merit. The assailed not receive any summons; that Go never received any summons in the New
Decision of the NLRC dated 21 June 2011 is AFFIRMED. Bilibid Prisons in Muntinlupa City, where he was serving his sentence; that Oyster
Plaza, being a mere name and business style, could not be sued because it had
SO ORDERED.23 no legal personality; and that the summons and notices addressed to Oyster
chanrobleslaw Plaza could not bind MDC.
The petitioners filed their motion for reconsideration, but the same was denied by
the CA in its assailed Resolution, dated March 12, 2015. Second, on the assumption that the summons was validly served, the petitioners
argue that Melivo was not illegally dismissed because he was not a regular
Hence, this petition, raising the following:chanRoblesvirtualLawlibrary employee but merely a fixed-term employee. Lastly, assuming that Oyster Plaza
was liable, Go could not be made solidarity liable because he was no longer
connected with the hotel Neither could Ampel be held solidarity liable as there
was no proof that she acted in bad faith.
24
 written order" creates the presumption that the persons who received the
In his Comment, dated October 23, 2015, Melivo refuted the petitioners'
24
summons and notice were presumably able to present a written authorization to
arguments. He countered that in quasi-judicial proceedings before the NLRC and receive them and, therefore, the notices were presumed to be duly received in
its arbitration branch, procedural rules governing service of summons were not the ordinary course of events.
strictly construed; that the service of summons and notices substantially
complied with the requirements of the 2005 Revised NLRC Rules of Procedure; Similarly, in this case, the summons and notices were served by registered mail
that the non-inclusion of the corporate name of MDC was a mere procedural error at the petitioners' place of business. Thus, the person who received the same was
which did not affect the jurisdiction of the labor tribunals; that Go and Ampel presumed authorized to do so. Consequently, the summons and notices were
were responsible officers of Oyster Plaza; and that Melivo's dismissal was done in presumed to be duly served. The burden of proving the irregularity in the service
bad faith because he was verbally and arbitrarily dismissed. of summons and notices, if any, is on the part of the petitioners. In this case, the
petitioners clearly failed to discharge that burden.
In their Reply,25 dated March 23, 2016, the petitioners merely reiterated the
arguments they raised in their petition. The Court concurs with the CA that the failure to implead MDC in the proceedings
before the LA and the NLRC was merely a procedural error which did not divest
The Court's Ruling the labor tribunals of their jurisdiction. In Pison-Arceo Agricultural Development
Corp. vs. NLRC (Pison-Arceo),28 which involved the resolution of substantially the
same issue, the Court held that:chanRoblesvirtualLawlibrary
The petition is partly meritorious. X x x. There is no dispute that Hacienda Lanutan, which was owned SOLELY by
petitioner, was impleaded and was heard. If at all, the non-inclusion of the
Petitioners were Not Deprived of their corporate name of petitioner in the case before the executive labor arbiter
Right to Due Process was a mere procedural error which did not at all affect the jurisdiction of the
labor tribunals.29 [Emphasis supplied]
In quasi-judicial proceedings before the NLRC and its arbitration branch, chanrobleslaw
procedural rules governing service of summons are not strictly construed. By the petitioners' own admission, Oyster Plaza was owned and operated by
Substantial compliance thereof is sufficient. The constitutional requirement of due MDC. This was further underscored in the petitioners'
process with respect to service of summons only exacts that the service of Verification/Certification,30 dated December 8, 2011, attached to their petition
summons be such as may reasonably be expected to give the notice desired. before the CA. It was stated therein that "Elsa Go is the authorized
Once the service provided by the rules reasonably accomplishes that end, the representative of petitioner Oyster Plaza Hotel/Martyniuk Development
requirement of justice is answered, the traditional notion of fair play is satisfied, Corporation." Applying the pronouncement in Pison-Arceo, the failure to include
and due process is served.26 MDC's corporate name in the complaint did not necessarily result in the loss of
the labor tribunals' jurisdiction over the former. The said failure was but a
In Scenarios, Inc. vs. Vinluan,27 the Court considered as substantial compliance procedural blunder which did not render the labor proceedings void, so long as
the service of summons by registered mail at the respondent's place of business. the dictates of justice were substantially complied with.
The Court explained therein that technical rules of procedure were not strictly
applied in quasi-judicial proceedings and only substantial compliance was Further, the essence of due process is simply an opportunity to be heard or, as
required; and that the notation in the registry receipt that "a registered article applied to administrative proceedings, an opportunity to explain one's side or to
must not be delivered to anyone but the addressee, or upon the addressee's seek a reconsideration of the action or ruling complained of. What the law

25
prohibits is the 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.31
The Court notes that even though the petitioners failed to participate in the
proceedings before the LA, they were able to argue their case before the NLRC.
The petitioners, through their pleadings, were able to argue their position and
submit evidence in support of their position that they did not receive the
summons and notices from the LA; and that Melivo was not illegally dismissed.
Evidently, the petitioners' contention that they were denied due process is devoid
of any merit.
Melivo was Illegally Dismissed
Anent the issue of illegal dismissal, the CA correctly affirmed the ruling of the
NLRC.
Probation is the period during which the employer may determine if the employee
is qualified for possible inclusion in the regular force. 32 The employer has the
right or is at liberty to choose who will be hired and who will be denied
employment. In that sense, it is within the exercise of the right to select his
employees that the employer may set or fix a probationary period within which
the latter may test and observe the conduct of the former before hiring him
permanently.33 An employee allowed to work beyond the probationary period is
deemed a regular employee.34
In Holiday Inn Manila vs. NLRC (Holiday Inn),35 the Court considered therein
complainant's 3-week on-the-job training (OJT) period as her probationary
employment period. The Court explained that the complainant was certainly
under observation during her 3-week OJT such that if her services proved
unsatisfactory, she could have been dropped anytime during said period. On the
other hand, when her services were continued after her training, the employer in
effect recognized that she had passed probation and was qualified to be a regular
employee. Thus, the Court ruled that the complainant therein attained regular
employment status when she was formally placed under probation after her OJT.
26
The present case involves substantially the same factual considerations as that of
Holiday Inn. In this case, Melivo was first hired as a trainee in August 2008. His
training lasted for three (3) months. As a room boy, his performance was
certainly under observation. Thus, it can be reasonably deduced that Melivo's
probationary employment actually started in August 2008, at the same time he
started working as a trainee. Therefore, when he was re-hired as room boy after
his training period sometime in November 2008 he attained regular employment
status.
Assuming arguendo that the 3-month training period could be considered a
probationary period, the conclusion would still be the same. It should be
remembered that Melivo was again employed as a room boy in November 2008
under probationary status for five (5) months or until March 2009. Records would
show that Melivo had completed his probationary employment. Thus, when
Oyster Plaza re-hired him for the third time on April 7, 2009, he became its
regular employee thereof.
The petitioners' contention that Melivo was hired as a project employee is
untenable. Under Article 280 of the Labor Code, as amended, a project employee
is one 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. Here, the contract of employment failed to indicate
the specific project or undertaking for which Oyster Plaza sought Melivo's
services. Moreover, as correctly noted by the NLRC, the petitioners failed to
submit a report of Melivo's termination to the nearest public employment office,
as required under Section 2 of D.O. No. 19.
As a regular employee, Melivo could only be dismissed for just or authorized
causes after affording him the procedural requirement of notice and hearing. The
petitioners failed to adduce evidence that Melivo's dismissal was for a just or
authorized cause, or that he was sufficiently notified and given opportunity to be
heard why his employment should not be terminated. Hence, Melivo's dismissal
was illegal.
Go and Ampel cannot be held Solidarity
Liable with Oyster Plaza/MDC
A corporation, being a juridical entity, may act only through its directors, officers Corporation is ORDERED to reinstate Melivo to his former position without loss of
and employees. Obligations incurred by them, acting as such corporate agents, seniority rights; and to pay Melivo his backwages, proportionate 13 th month pay,
are not theirs but the direct accountabilities of the corporation they and attorney's fees equivalent to 10% of the monetary awards.
represent.36 Pursuant to this principle, a director, officer or employee of a
corporation is generally not held personally liable for obligations incurred by the The total monetary awards shall earn interest at the rate of 12% per annum from
corporation; it is only in exceptional circumstances that solidary liability will the date that Melivo was illegally terminated from work until June 30, 2013, and
attach to them.37 Thus, in labor cases, corporate directors and officers are held 6% per annum from July 1, 2013 until their full satisfaction.
solidarity liable with the corporation for the employee's termination only when the
same is done with malice or in bad faith. 38 SO ORDERED.ChanRoblesVirtualawlibrary

In the present case, there is nothing substantial on record which can justify Go
and Ampel's solidary liability with Oyster Plaza or MDC. As to Ampel, records
reveal that her participation in the illegal dismissal was her verbally informing
Melivo that his services were being terminated; and the said act could hardly be
considered malicious enough to make Ampel solidarity liable with Oyster Plaza or
MDC.

With regard to Go, aside from the assertion that he was the owner of Oyster
Plaza, no other act, relating to Melivo's illegal dismissal, was ever averred against
him. Besides, Go's relation with Oyster Plaza or MDC was only based from the
bare allegations of Melivo who failed to provide substantial evidence to prove
them. It is of no moment that Go failed to produce evidence to show that he was
no longer connected with MDC or Oyster Plaza. Melivo should have relied on the
strength of his evidence and not on the weakness of the defense offered by the
petitioners.39 Clearly, without any participation in the illegal dismissal of Melivo,
no malice or bad faith can be attributed to Go to justify his solidary liability with
Oyster Plaza. In fine, the petition must be partially granted to the effect that only
Oyster Plaza/MDC should be adjudged liable to Melivo.

Finally, pursuant to Nacar v. Gallery Frames,40 this Court finds that the award of
the CA should be modified in that the total monetary awards shall earn interest at
the rate of 12% per annum from the date Melivo was terminated from work until
June 30, 2013, and 6% per annum from July 1, 2013 until their full satisfaction.

WHEREFORE, the petition is PARTIALLY GRANTED. The April 30, 2014

Decision of the Court of Appeals in CA-G.R. SP No. 122767 is AFFIRMED with
MODIFICATION in that only Oyster Plaza Hotel/Martyniuk Development

27
G.R. No. 162994 September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
RESOLUTION
TINGA, J.:
Confronting the Court in this petition is a novel question, with constitutional
overtones, involving the validity of the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any competitor company.
This is a Petition for Review on Certiorari assailing the Decision1 dated May 19,
2003 and the Resolution dated March 26, 2004 of the Court of Appeals in CA-G.R.
SP No. 62434.2
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome
Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after
Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to disclose
to management any existing or future relationship by consanguinity or affinity
with co-employees or employees of competing drug companies and should
management find that such relationship poses a possible conflict of interest, to
resign from the company.
The Employee Code of Conduct of Glaxo similarly provides that an employee is
expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug
companies. If management perceives a conflict of interest or a potential conflict
between such relationship and the employee’s employment with the company,
the management and the employee will explore the possibility of a "transfer to
28
another department in a non-counterchecking position" or preparation for
employment outside the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-
Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was
Astra’s Branch Coordinator in Albay. She supervised the district managers and
medical representatives of her company and prepared marketing strategies for
Astra in that area.
Even before they got married, Tecson received several reminders from his District
Manager regarding the conflict of interest which his relationship with Bettsy might
engender. Still, love prevailed, and Tecson married Bettsy in September 1998.
In January 1999, Tecson’s superiors informed him that his marriage to Bettsy
gave rise to a conflict of interest. Tecson’s superiors reminded him that he and
Bettsy should decide which one of them would resign from their jobs, although
they told him that they wanted to retain him as much as possible because he was
performing his job well.
Tecson requested for time to comply with the company policy against entering
into a relationship with an employee of a competitor company. He explained that
Astra, Bettsy’s employer, was planning to merge with Zeneca, another drug
company; and Bettsy was planning to avail of the redundancy package to be
offered by Astra. With Bettsy’s separation from her company, the potential
conflict of interest would be eliminated. At the same time, they would be able to
avail of the attractive redundancy package from Astra.
In August 1999, Tecson again requested for more time resolve the problem. In
September 1999, Tecson applied for a transfer in Glaxo’s milk division, thinking
that since Astra did not have a milk division, the potential conflict of interest
would be eliminated. His application was denied in view of Glaxo’s "least-
movement-possible" policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-
Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his
request was denied.
Tecson sought Glaxo’s reconsideration regarding his transfer and brought the
matter to Glaxo’s Grievance Committee. Glaxo, however, remained firm in its
decision and gave Tescon until February 7, 2000 to comply with the transfer
order. Tecson defied the transfer order and continued acting as medical
representative in the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his salary,
but was not issued samples of products which were competing with similar
products manufactured by Astra. He was also not included in product conferences
regarding such products.
Because the parties failed to resolve the issue at the grievance machinery level,
they submitted the matter for voluntary arbitration. Glaxo offered Tecson a
separation pay of one-half (½) month pay for every year of service, or a total of
₱50,000.00 but he declined the offer. On November 15, 2000, the National
Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid
Glaxo’s policy on relationships between its employees and persons employed with
competitor companies, and affirming Glaxo’s right to transfer Tecson to another
sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing
the NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying
the Petition for Review on the ground that the NCMB did not err in rendering
its Decision. The appellate court held that Glaxo’s policy prohibiting its employees
from having personal relationships with employees of competitor companies is a
valid exercise of its management prerogatives.4
Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but
the motion was denied by the appellate court in its Resolution dated March 26,
2004.5
29
Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals
erred in affirming the NCMB’s finding that the Glaxo’s policy prohibiting its
employees from marrying an employee of a competitor company is valid; and (ii)
the Court of Appeals also erred in not finding that Tecson was constructively
dismissed when he was transferred to a new sales territory, and deprived of the
opportunity to attend products seminars and training sessions. 6
Petitioners contend that Glaxo’s policy against employees marrying employees of
competitor companies violates the equal protection clause of the Constitution
because it creates invalid distinctions among employees on account only of
marriage. They claim that the policy restricts the employees’ right to marry. 7
They also argue that Tecson was constructively dismissed as shown by the
following circumstances: (1) he was transferred from the Camarines Sur-
Camarines Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he
suffered a diminution in pay, (3) he was excluded from attending seminars and
training sessions for medical representatives, and (4) he was prohibited from
promoting respondent’s products which were competing with Astra’s products. 8
In its Comment on the petition, Glaxo argues that the company policy prohibiting
its employees from having a relationship with and/or marrying an employee of a
competitor company is a valid exercise of its management prerogatives and does
not violate the equal protection clause; and that Tecson’s reassignment from the
Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and
Agusan del Sur sales area does not amount to constructive dismissal.9
Glaxo insists that as a company engaged in the promotion and sale of
pharmaceutical products, it has a genuine interest in ensuring that its employees
avoid any activity, relationship or interest that may conflict with their
responsibilities to the company. Thus, it expects its employees to avoid having
personal or family interests in any competitor company which may influence their
actions and decisions and consequently deprive Glaxo of legitimate profits. The
policy is also aimed at preventing a competitor company from gaining access to
its secrets, procedures and policies.10
It likewise asserts that the policy does not prohibit marriage per se but only
proscribes existing or future relationships with employees of competitor
companies, and is therefore not violative of the equal protection clause. It
maintains that considering the nature of its business, the prohibition is based on
valid grounds.11
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a
real and potential conflict of interest. Astra’s products were in direct competition
with 67% of the products sold by Glaxo. Hence, Glaxo’s enforcement of the
foregoing policy in Tecson’s case was a valid exercise of its management
prerogatives.12 In any case, Tecson was given several months to remedy the
situation, and was even encouraged not to resign but to ask his wife to resign
form Astra instead.13
Glaxo also points out that Tecson can no longer question the assailed company
policy because when he signed his contract of employment, he was aware that
such policy was stipulated therein. In said contract, he also agreed to resign from
respondent if the management finds that his relationship with an employee of a
competitor company would be detrimental to the interests of Glaxo. 14
Glaxo likewise insists that Tecson’s reassignment to another sales area and his
exclusion from seminars regarding respondent’s new products did not amount to
constructive dismissal.
It claims that in view of Tecson’s refusal to resign, he was relocated from the
Camarines Sur-Camarines Norte sales area to the Butuan City-Surigao City and
Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it
also considered the welfare of Tecson’s family. Since Tecson’s hometown was in
Agusan del Sur and his wife traces her roots to Butuan City, Glaxo assumed that
his transfer from the Bicol region to the Butuan City sales area would be
favorable to him and his family as he would be relocating to a familiar territory
and minimizing his travel expenses.15
In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning the
new anti-asthma drug was due to the fact that said product was in direct
competition with a drug which was soon to be sold by Astra, and hence, would
pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt
of his sales paraphernalia was due to the mix-up created by his refusal to
transfer to the Butuan City sales area (his paraphernalia was delivered to his new
30
sales area instead of Naga City because the supplier thought he already
transferred to Butuan).16
The Court is tasked to resolve the following issues: (1) Whether the Court of
Appeals erred in ruling that Glaxo’s policy against its employees marrying
employees from competitor companies is valid, and in not holding that said policy
violates the equal protection clause of the Constitution; (2) Whether Tecson was
constructively dismissed.
The Court finds no merit in the petition.
The stipulation in Tecson’s contract of employment with Glaxo being questioned
by petitioners provides:
…
10. You agree to disclose to management any existing or future
relationship you may have, either by consanguinity or affinity with co-
employees or employees of competing drug companies. Should it pose a
possible conflict of interest in management discretion, you agree to resign
voluntarily from the Company as a matter of Company policy.
…17
The same contract also stipulates that Tescon agrees to abide by the existing
company rules of Glaxo, and to study and become acquainted with such
policies.18 In this regard, the Employee Handbook of Glaxo expressly informs its
employees of its rules regarding conflict of interest:
1. Conflict of Interest
Employees should avoid any activity, investment relationship, or interest
that may run counter to the responsibilities which they owe Glaxo
Wellcome.
Specifically, this means that employees are expected:
a. To avoid having personal or family interest, financial or
otherwise, in any competitor supplier or other businesses which
 may consciously or unconsciously influence their actions or
decisions and thus deprive Glaxo Wellcome of legitimate profit.
b. To refrain from using their position in Glaxo Wellcome or
knowledge of Company plans to advance their outside personal
interests, that of their relatives, friends and other businesses.
c. To avoid outside employment or other interests for income which
would impair their effective job performance.
d. To consult with Management on such activities or relationships
that may lead to conflict of interest.
1.1. Employee Relationships
Employees with existing or future relationships either by consanguinity or
affinity with co-employees of competing drug companies are expected to
disclose such relationship to the Management. If management perceives a
conflict or potential conflict of interest, every effort shall be made,
together by management and the employee, to arrive at a solution within
six (6) months, either by transfer to another department in a non-counter
checking position, or by career preparation toward outside employment
after Glaxo Wellcome. Employees must be prepared for possible
resignation within six (6) months, if no other solution is feasible.19
No reversible error can be ascribed to the Court of Appeals when it ruled that
Glaxo’s policy prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management
prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors,
especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees of
competitor companies upon Glaxo’s employees is reasonable under the
circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy, Glaxo only
aims to protect its interests against the possibility that a competitor company will
gain access to its secrets and procedures.
31
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises to adopt
and enforce such a policy to protect its right to reasonable returns on
investments and to expansion and growth.20 Indeed, while our laws endeavor to
give life to the constitutional policy on social justice and the protection of labor, it
does not mean that every labor dispute will be decided in favor of the workers.
The law also recognizes that management has rights which are also entitled to
respect and enforcement in the interest of fair play.21
As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard
business confidentiality and protect a competitive position by even-handedly
disqualifying from jobs male and female applicants or employees who are married
to a competitor. Consequently, the court ruled than an employer that discharged
an employee who was married to an employee of an active competitor did not
violate Title VII of the Civil Rights Act of 1964.23 The Court pointed out that the
policy was applied to men and women equally, and noted that the employer’s
business was highly competitive and that gaining inside information would
constitute a competitive advantage.
The challenged company policy does not violate the equal protection clause of the
Constitution as petitioners erroneously suggest. It is a settled principle that the
commands of the equal protection clause are addressed only to the state or those
acting under color of its authority.24 Corollarily, it has been held in a long array of
U.S. Supreme Court decisions that the equal protection clause erects no shield
against merely private conduct, however, discriminatory or wrongful.25 The only
exception occurs when the state29 in any of its manifestations or actions has been
found to have become entwined or involved in the wrongful private
conduct.27 Obviously, however, the exception is not present in this case.
Significantly, the company actually enforced the policy after repeated requests to
the employee to comply with the policy. Indeed, the application of the policy was
made in an impartial and even-handed manner, with due regard for the lot of the
employee.
In any event, from the wordings of the contractual provision and the policy in its
employee handbook, it is clear that Glaxo does not impose an absolute
prohibition against relationships between its employees and those of competitor
companies. Its employees are free to cultivate relationships with and marry
persons of their own choosing. What the company merely seeks to avoid is a
conflict of interest between the employee and the company that may arise out of
such relationships. As succinctly explained by the appellate court, thus:
The policy being questioned is not a policy against marriage. An employee
of the company remains free to marry anyone of his or her choosing. The
policy is not aimed at restricting a personal prerogative that belongs only
to the individual. However, an employee’s personal decision does not
detract the employer from exercising management prerogatives to ensure
maximum profit and business success. . .28
The Court of Appeals also correctly noted that the assailed company policy which
forms part of respondent’s Employee Code of Conduct and of its contracts with its
employees, such as that signed by Tescon, was made known to him prior to his
employment. Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with Bettsy. Since
Tecson knowingly and voluntarily entered into a contract of employment with
Glaxo, the stipulations therein have the force of law between them and, thus,
should be complied with in good faith."29 He is therefore estopped from
questioning said policy.
The Court finds no merit in petitioners’ contention that Tescon was constructively
dismissed when he was transferred from the Camarines Norte-Camarines Sur
sales area to the Butuan City-Surigao City-Agusan del Sur sales area, and when
he was excluded from attending the company’s seminar on new products which
were directly competing with similar products manufactured by Astra.
Constructive dismissal is defined as a quitting, an involuntary resignation
resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to the
employee.30 None of these conditions are present in the instant case. The record
does not show that Tescon was demoted or unduly discriminated upon by reason
of such transfer. As found by the appellate court, Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area:
. . . In this case, petitioner’s transfer to another place of assignment was
merely in keeping with the policy of the company in avoidance of conflict
32
of interest, and thus valid…Note that [Tecson’s] wife holds a sensitive
supervisory position as Branch Coordinator in her employer-company
which requires her to work in close coordination with District Managers
and Medical Representatives. Her duties include monitoring sales of Astra
products, conducting sales drives, establishing and furthering relationship
with customers, collection, monitoring and managing Astra’s
inventory…she therefore takes an active participation in the market war
characterized as it is by stiff competition among pharmaceutical
companies. Moreover, and this is significant, petitioner’s sales territory
covers Camarines Sur and Camarines Norte while his wife is supervising a
branch of her employer in Albay. The proximity of their areas of
responsibility, all in the same Bicol Region, renders the conflict of interest
not only possible, but actual, as learning by one spouse of the other’s
market strategies in the region would be inevitable. [Management’s]
appreciation of a conflict of interest is therefore not merely illusory and
wanting in factual basis…31
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations
Commission, which involved a complaint filed by a medical representative
32
against his employer drug company for illegal dismissal for allegedly terminating
his employment when he refused to accept his reassignment to a new area, the
Court upheld the right of the drug company to transfer or reassign its employee
in accordance with its operational demands and requirements. The ruling of the
Court therein, quoted hereunder, also finds application in the instant case:
By the very nature of his employment, a drug salesman or medical
representative is expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to
new markets calling for opening or expansion or to areas where the need
for pushing its products is great. More so if such reassignments are part of
the employment contract.33
As noted earlier, the challenged policy has been implemented by Glaxo
impartially and disinterestedly for a long period of time. In the case at bar, the
record shows that Glaxo gave Tecson several chances to eliminate the conflict of
interest brought about by his relationship with Bettsy. When their relationship
was still in its initial stage, Tecson’s supervisors at Glaxo constantly reminded
him about its effects on his employment with the company and on the company’s
interests. After Tecson married Bettsy, Glaxo gave him time to resolve the
conflict by either resigning from the company or asking his wife to resign from
Astra. Glaxo even expressed its desire to retain Tecson in its employ because of
his satisfactory performance and suggested that he ask Bettsy to resign from her
company instead. Glaxo likewise acceded to his repeated requests for more time
to resolve the conflict of interest. When the problem could not be resolved after
several years of waiting, Glaxo was constrained to reassign Tecson to a sales
area different from that handled by his wife for Astra. Notably, the Court did not
terminate Tecson from employment but only reassigned him to another area
where his home province, Agusan del Sur, was included. In effecting Tecson’s
transfer, Glaxo even considered the welfare of Tecson’s family. Clearly, the
foregoing dispels any suspicion of unfairness and bad faith on the part of Glaxo.34

WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.

SO ORDERED.

33
G.R. No. 164774 April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN
CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E.
ESTRELLA, Respondents.
DECISION
PUNO, J.:
We are called to decide an issue of first impression: whether the policy of the
employer banning spouses from working in the same company violates the rights
of the employee under the Constitution and the Labor Code or is a valid exercise
of management prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of
Appeals dated August 3, 2004 in CA-G.R. SP No. 73477 reversing the decision of
the National Labor Relations Commission (NLRC) which affirmed the ruling of the
Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in
trading – principally of paper products. Josephine Ongsitco is its Manager of the
Personnel and Administration Department while Sebastian Chua is its Managing
Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol
(Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all
regular employees of the company.1
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit,
also an employee of the company, whom he married on June 27, 1998. Prior to
the marriage, Ongsitco advised the couple that should they decide to get
married, one of them should resign pursuant to a company policy promulgated in
1995,2 viz.:
34
1. New applicants will not be allowed to be hired if in case he/she has [a]
relative, up to [the] 3rd degree of relationship, already employed by the
company.
2. In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course of
their employment and then decided to get married, one of them should
resign to preserve the policy stated above. 3
Simbol resigned on June 20, 1998 pursuant to the company policy.4
Comia was hired by the company on February 5, 1997. She met Howard Comia, a
co-employee, whom she married on June 1, 2000. Ongsitco likewise reminded
them that pursuant to company policy, one must resign should they decide to get
married. Comia resigned on June 30, 2000.5
Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a co-
worker. Petitioners stated that Zuñiga, a married man, got Estrella pregnant. The
company allegedly could have terminated her services due to immorality but she
opted to resign on December 21, 1999.6
The respondents each signed a Release and Confirmation Agreement. They stated
therein that they have no money and property accountabilities in the company
and that they release the latter of any claim or demand of whatever nature. 7
Respondents offer a different version of their dismissal. Simbol and Comia allege
that they did not resign voluntarily; they were compelled to resign in view of an
illegal company policy. As to respondent Estrella, she alleges that she had a
relationship with co-worker Zuñiga who misrepresented himself as a married but
separated man. After he got her pregnant, she discovered that he was not
separated. Thus, she severed her relationship with him to avoid dismissal due to
the company policy. On November 30, 1999, she met an accident and was
advised by the doctor at the Orthopedic Hospital to recuperate for twenty-one
(21) days. She returned to work on December 21, 1999 but she found out that
her name was on-hold at the gate. She was denied entry. She was directed to
proceed to the personnel office where one of the staff handed her a
memorandum. The memorandum stated that she was being dismissed for
immoral conduct. She refused to sign the memorandum because she was on
leave for twenty-one (21) days and has not been given a chance to explain. The
management asked her to write an explanation. However, after submission of the
explanation, she was nonetheless dismissed by the company. Due to her urgent
need for money, she later submitted a letter of resignation in exchange for her
thirteenth month pay.8
Respondents later filed a complaint for unfair labor practice, constructive
dismissal, separation pay and attorney’s fees. They averred that the
aforementioned company policy is illegal and contravenes Article 136 of the Labor
Code. They also contended that they were dismissed due to their union
membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the
complaint for lack of merit, viz.:
[T]his company policy was decreed pursuant to what the respondent corporation
perceived as management prerogative. This management prerogative is quite
broad and encompassing for it covers hiring, work assignment, working method,
time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of workers.
Except as provided for or limited by special law, an employer is free to regulate,
according to his own discretion and judgment all the aspects of
employment.9 (Citations omitted.)
On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter
on January 11, 2002. 10
Respondents filed a Motion for Reconsideration but was denied by the NLRC in a
Resolution11 dated August 8, 2002. They appealed to respondent
court via Petition for Certiorari.
In its assailed Decision dated August 3, 2004, the Court of Appeals reversed the
NLRC decision, viz.:
35
WHEREFORE, premises considered, the May 31, 2002 (sic)12 Decision of the
National Labor Relations Commission is hereby REVERSED and SET ASIDE and a
new one is entered as follows:
(1) Declaring illegal, the petitioners’ dismissal from employment and
ordering private respondents to reinstate petitioners to their former
positions without loss of seniority rights with full backwages from the time
of their dismissal until actual reinstatement; and
(2) Ordering private respondents to pay petitioners attorney’s fees
amounting to 10% of the award and the cost of this suit.13
On appeal to this Court, petitioners contend that the Court of Appeals erred in
holding that:
1. x x x the subject 1995 policy/regulation is violative of the constitutional
rights towards marriage and the family of employees and of Article 136 of
the Labor Code; and
2. x x x respondents’ resignations were far from voluntary.14
We affirm.
The 1987 Constitution15 states our policy towards the protection of labor under
the following provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic force.
It shall protect the rights of workers and promote their welfare.
xxx
Article XIII, Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality
of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right
to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and benefits as may
be provided by law.
The State shall promote the principle of shared responsibility between workers
and employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns on investments, and
to expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual.
They are so impressed with public interest that labor contracts must yield to the
common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.
The Labor Code is the most comprehensive piece of legislation protecting labor.
The case at bar involves Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by
reason of her marriage.
Respondents submit that their dismissal violates the above provision. Petitioners
allege that its policy "may appear to be contrary to Article 136 of the Labor Code"
but it assumes a new meaning if read together with the first paragraph of the
rule. The rule does not require the woman employee to resign. The employee
spouses have the right to choose who between them should resign. Further, they
are free to marry persons other than co-employees. Hence, it is not the marital
36
status of the employee, per se, that is being discriminated. It is only intended to
carry out its no-employment-for-relatives-within-the-third-degree-policy which is
within the ambit of the prerogatives of management.16
It is true that the policy of petitioners prohibiting close relatives from working in
the same company takes the nature of an anti-nepotism employment policy.
Companies adopt these policies to prevent the hiring of unqualified persons based
on their status as a relative, rather than upon their ability. 17 These policies focus
upon the potential employment problems arising from the perception of
favoritism exhibited towards relatives.
With more women entering the workforce, employers are also enacting
employment policies specifically prohibiting spouses from working for the same
company. We note that two types of employment policies involve spouses:
policies banning only spouses from working in the same company (no-spouse
employment policies), and those banning all immediate family members,
including spouses, from working in the same company (anti-nepotism
employment policies).18
Unlike in our jurisdiction where there is no express prohibition on marital
discrimination,19 there are twenty state statutes20 in the United States prohibiting
marital discrimination. Some state courts21 have been confronted with the issue
of whether no-spouse policies violate their laws prohibiting both marital status
and sex discrimination.
In challenging the anti-nepotism employment policies in the United States,
complainants utilize two theories of employment discrimination:
the disparate treatment and the disparate impact. Under the disparate
treatment analysis, the plaintiff must prove that an employment policy is
discriminatory on its face. No-spouse employment policies requiring an employee
of a particular sex to either quit, transfer, or be fired are facially discriminatory.
For example, an employment policy prohibiting the employer from hiring wives of
male employees, but not husbands of female employees, is discriminatory on its
face.22
On the other hand, to establish disparate impact, the complainants must prove
that a facially neutral policy has a disproportionate effect on a particular class.
For example, although most employment policies do not expressly indicate which
spouse will be required to transfer or leave the company, the policy often
disproportionately affects one sex.23
The state courts’ rulings on the issue depend on their interpretation of the scope
of marital status discrimination within the meaning of their respective civil rights
acts. Though they agree that the term "marital status" encompasses
discrimination based on a person's status as either married, single, divorced, or
widowed, they are divided on whether the term has a broader meaning. Thus,
their decisions vary.24
The courts narrowly25 interpreting marital status to refer only to a person's
status as married, single, divorced, or widowed reason that if the legislature
intended a broader definition it would have either chosen different language or
specified its intent. They hold that the relevant inquiry is if one is married rather
than to whom one is married. They construe marital status discrimination to
include only whether a person is single, married, divorced, or widowed and not
the "identity, occupation, and place of employment of one's spouse." These
courts have upheld the questioned policies and ruled that they did not violate the
marital status discrimination provision of their respective state statutes.
The courts that have broadly26 construed the term "marital status" rule that it
encompassed the identity, occupation and employment of one's spouse. They
strike down the no-spouse employment policies based on the broad legislative
intent of the state statute. They reason that the no-spouse employment policy
violate the marital status provision because it arbitrarily discriminates against all
spouses of present employees without regard to the actual effect on the
individual's qualifications or work performance. 27 These courts also find the no-
spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses
in the same workplace might adversely affect the business. 28 They hold that the
absence of such a bona fide occupational qualification 29 invalidates a rule
denying employment to one spouse due to the current employment of the other
spouse in the same office.30 Thus, they rule that unless the employer can prove
that the reasonable demands of the business require a distinction based on
marital status and there is no better available or acceptable policy which would
better accomplish the business purpose, an employer may not discriminate
37
against an employee based on the identity of the employee’s spouse. 31 This is
known as the bona fide occupational qualification exception.
We note that since the finding of a bona fide occupational qualification justifies an
employer’s no-spouse rule, the exception is interpreted strictly and narrowly by
these state courts. There must be a compelling business necessity for which no
alternative exists other than the discriminatory practice.32 To justify a bona fide
occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the
job involved; and, (2) that there is a factual basis for believing that all or
substantially all persons meeting the qualification would be unable to properly
perform the duties of the job.33
The concept of a bona fide occupational qualification is not foreign in our
jurisdiction. We employ the standard of reasonableness of the company policy
which is parallel to the bona fide occupational qualification requirement. In the
recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson
v. Glaxo Wellcome Philippines, Inc.,34 we passed on the validity of the policy
of a pharmaceutical company prohibiting its employees from marrying employees
of any competitor company. We held that Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing strategies and other confidential
programs and information from competitors. We considered the prohibition
against personal or marital relationships with employees of competitor companies
upon Glaxo’s employees reasonable under the circumstances because
relationships of that nature might compromise the interests of Glaxo. In laying
down the assailed company policy, we recognized that Glaxo only aims to protect
its interests against the possibility that a competitor company will gain access to
its secrets and procedures.35
The requirement that a company policy must be reasonable under the
circumstances to qualify as a valid exercise of management prerogative was also
at issue in the 1997 case of Philippine Telegraph and Telephone Company v.
NLRC.36 In said case, the employee was dismissed in violation of petitioner’s
policy of disqualifying from work any woman worker who contracts marriage. We
held that the company policy violates the right against discrimination afforded all
women workers under Article 136 of the Labor Code, but established a
permissible exception, viz.:
[A] requirement that a woman employee must remain unmarried could be
justified as a "bona fide occupational qualification," or BFOQ, where the
particular requirements of the job would justify the same, but not on the ground
of a general principle, such as the desirability of spreading work in the workplace.
A requirement of that nature would be valid provided it reflects an inherent
quality reasonably necessary for satisfactory job performance. 37(Emphases
supplied.)
The cases of Duncan and PT&T instruct us that the requirement of
reasonableness must be clearly established to uphold the questioned
employment policy. The employer has the burden to prove the existence of a
reasonable business necessity. The burden was successfully discharged in Duncan
but not in PT&T.
We do not find a reasonable business necessity in the case at bar.
Petitioners’ sole contention that "the company did not just want to have two (2)
or more of its employees related between the third degree by affinity and/or
consanguinity"38 is lame. That the second paragraph was meant to give teeth to
the first paragraph of the questioned rule39 is evidently not the valid reasonable
business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they
were found fit for the job, but were asked to resign when they married a co-
employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the Repacking Section,
could be detrimental to its business operations. Neither did petitioners explain
how this detriment will happen in the case of Wilfreda Comia, then a Production
Helper in the Selecting Department, who married Howard Comia, then a helper in
the cutter-machine. The policy is premised on the mere fear that employees
married to each other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies based on an unproven
presumption of a perceived danger at the expense of an employee’s right to
security of tenure.
Petitioners contend that their policy will apply only when one employee marries a
co-employee, but they are free to marry persons other than co-employees. The
38
questioned policy may not facially violate Article 136 of the Labor Code but it
creates a disproportionate effect and under the disparate impact theory, the only
way it could pass judicial scrutiny is a showing that it is reasonable despite the
discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy cannot prejudice
the employee’s right to be free from arbitrary discrimination based upon
stereotypes of married persons working together in one company. 40
Lastly, the absence of a statute expressly prohibiting marital discrimination in our
jurisdiction cannot benefit the petitioners. The protection given to labor in our
jurisdiction is vast and extensive that we cannot prudently draw inferences from
the legislature’s silence41 that married persons are not protected under our
Constitution and declare valid a policy based on a prejudice or stereotype. Thus,
for failure of petitioners to present undisputed proof of a reasonable business
necessity, we rule that the questioned policy is an invalid exercise of
management prerogative. Corollarily, the issue as to whether respondents Simbol
and Comia resigned voluntarily has become moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on
the singular fact that her resignation letter was written in her own handwriting.
Both ruled that her resignation was voluntary and thus valid. The respondent
court failed to categorically rule whether Estrella voluntarily resigned but ordered
that she be reinstated along with Simbol and Comia.
Estrella claims that she was pressured to submit a resignation letter because she
was in dire need of money. We examined the records of the case and find
Estrella’s contention to be more in accord with the evidence. While findings of
fact by administrative tribunals like the NLRC are generally given not only respect
but, at times, finality, this rule admits of exceptions,42 as in the case at bar.
Estrella avers that she went back to work on December 21, 1999 but was
dismissed due to her alleged immoral conduct. At first, she did not want to sign
the termination papers but she was forced to tender her resignation letter in
exchange for her thirteenth month pay.
The contention of petitioners that Estrella was pressured to resign because she
got impregnated by a married man and she could not stand being looked upon or
talked about as immoral43 is incredulous. If she really wanted to avoid
embarrassment and humiliation, she would not have gone back to work at all.
Nor would she have filed a suit for illegal dismissal and pleaded for
reinstatement. We have held that in voluntary resignation, the employee is
compelled by personal reason(s) to dissociate himself from employment. It is
done with the intention of relinquishing an office, accompanied by the act of
abandonment. 44 Thus, it is illogical for Estrella to resign and then file a complaint
for illegal dismissal. Given the lack of sufficient evidence on the part of
petitioners that the resignation was voluntary, Estrella’s dismissal is declared
illegal.

IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No.

73477 dated August 3, 2004 is AFFIRMED.1avvphil.net

SO ORDERED.

39
A.M. No. RTJ-06-2019 April 4, 2007
[Formerly A.M. No. 06-7-418-RTC]
SHARON S. ALEGRIA, Complainant,
vs.
JUDGE MANUEL N. DUQUE, RTC, Branch 197, Las Piñas City, Respondent.
RESOLUTION
TINGA, J.:
It is well to remind judges that this Court has adopted a zero-tolerance policy
towards erring members of the judiciary as part of its effort to cleanse its ranks
and improve the administration of justice.1 In the implementation of this policy,
however, the Court ensures that the requirements of due process are observed,
such that substantial evidence is required to prove the charge against a judge.
Side by side with the observance of due process is this Court’s bestowal of
bounden respect for the sensibilities of complainant. All these considered, the
Court will not hesitate to do its duty to discipline a judge or even dismiss him
from the service when his guilt is proven by the required quantum of evidence.
Conversely, this Court is bound to absolve a judge when the charge against him
is baseless or otherwise does not meet the substantial evidence standard.
On 27 July 2005, Sharon Sanson-Alegria (complainant) then Clerk III, Regional
Trial Court (RTC), Br. 197, Las Piñas City, filed with the Office of the Clerk of
Court, RTC, Las Piñas City, an Affidavit-Complaint2 charging Judge Manuel N.
Duque (respondent) for "commit[ting] acts insulting to and belittling [her] morals
and decency." On 28 July 2005, Zandra T. Bato, Clerk of Court VI, forwarded to
Joselito dj. Vibandor, Executive Judge, RTC, Las Piñas City, said Affidavit-
Complaint.3
The Committee on Decorum and Investigation (Committee) took cognizance of
the case and docketed it as Case No. LP-05-002. Finding the complaint sufficient
in form and substance, the Committee directed respondent to file an answer
under oath.4 On 8 August 2005, respondent filed his Answer.5
40
A pre-hearing conference was conducted on 7 March 2006, after which the
Committee issued a Pre-Hearing Order6containing the stipulation of facts, issue,
and list of the pre-marked exhibits for the parties.
On 14 March 2006, complainant filed an Urgent Motion to order the preventive
suspension of respondent and his inhibition from the criminal cases being handled
by complainant’s counsel and tried by respondent.7 On 4 April 2006, respondent
filed his comment to this motion by complainant. On the same day, the
Committee issued an Order directing the parties to submit their respective
position papers with the affidavits of their witnesses.8 Before the Committee
could take any further action in the case, on 8 May 2006, it forwarded the
records of the case to the Office of the Court Administrator pursuant to this
Court’s Resolution dated 7 March 2006 (A.M. No. 05-12-757-RTC) excluding
"complaints for sexual harassment against Judges of
Regular and Special Courts and Justices of the Court of Appeals, the
Sandiganbayan and the Court of Tax Appeals" from the jurisdiction of the
Committee.9
In a Memorandum dated 26 June 2006, Court Administrator Christopher O. Lock
recommended that the complaint against respondent judge be docketed as a
regular administrative case and that the same be referred to one of the
consultants of his office for investigation, report and recommendation within sixty
(60) days from receipt of the records.10 On 6 September 2006, the Court noted
the Memorandum of the Court Administrator and adopted his
recommendations.11 The complaint was re-docketed as an administrative case
against respondent and the same was referred to a consultant for investigation,
report and recommendation.
Despite four (4) resettings,12 complainant and her counsel failed to appear at the
16 January 2007 scheduled hearing. Respondent judge, on the other hand,
appeared and submitted an "Opposition to Postponement and Consider this Case
Submitted for Resolution."13 Thus, Hearing Officer Designate Romulo S. Quimbo
issued an Order considering the case submitted for resolution.14
The version of complaint as found by the Hearing Officer Designate is as follows:
In her complaint[,] complainant averred that in early February 2005, she went on
leave for one week. She had notified Atty. Jeanette Tolentino, the Branch Clerk of
RTC Branch 197. She had gone on leave because of a personal problem which
was affecting her work. When she returned to work, she was told that respondent
Judge wanted to talk to her. When the latter arrived, he called for her. Before she
went to respondent’s office, she was warned by her office mates to distance
herself from the respondent because the latter had earlier kissed Atty. Ma.
Jeanette Baccay-Tolentino on the lips. Complainant said that she did not think the
respondent Judge would do the same to her considering that he knew her father
who was a chief of police.
Upon entering the respondent’s office, complainant alleged that she sat on the
chair facing him. Respondent asked complainant to relate her problem and not to
be ashamed because he treated as a daughter. She averred that she cried and
because she related her problem in a rather loud voice, the respondent Judge
told her to keep her voice low so as not to be heard outside. Respondent Judge
then stood up and locked the door to his office so that no one would disturb their
conversation. Respondent Judge then sat down beside her and because she was
covering her mouth with her two hands while she was crying, respondent Judge
took her hands away because according to him he could not understand what she
was saying. Immediately after he had removed her hands from covering her
mouth, he kissed her on the lips with his tongue out. This surprised her.
Respondent Judge then repeated his act of kissing her with his tongue out. That
was when complainant regained her composure and she told him that his son is
outside. Before she left, the respondent Judge said "I love you" and told her not
to relate what happened to anyone. She did not mind what he said because she
was then crying.
According to the complainant, she went down to the office of her "daddy" who
saw her crying. He asked her why she was crying, she told him that her husband
did not come home. She did this to prevent any untoward incident and she
thought the incident with the respondent Judge would not be repeated. From her
daddy’s office she returned to the court but she was at a loss as to what she
would do. During lunch at the canteen, she met their branch sheriff who noticed
that she had been crying. The latter asked her why she was weeping, she related
to him what had happened but she asked him to keep the story to
himself.1a\^/phi1.net
41
During the last week of February 2005, the complainant declared that she was
asked by respondent Judge to bring certain folders for his study. As she gave the
folders to him, the respondent immediately embraced her. She pushed him away
and respondent took hold of his "baril." He asked her if they could go out on a
date. Because of her fear, complainant said that she agreed to the respondent’s
invitation. He set it for 08 March but she demurred because it was her birthday.
Respondent suggested 10 March and complainant agreed. After that she went
back to her office.
Complainant further declared that respondent Judge called her at the office to
remind her of their date. They tried to record the call by using the cell phone of
her officemate but it did not work. On 09 March, the day after her birthday,
complainant did not report to her office. Ronaldo Esguerra, a nephew of the
respondent Judge, sent her a text message that the respondent was calling for
her. She called the respondent who asked her why she was absent. She replied
that she had overslept. He reminded her of their date the next day. He suggested
that they meet at "Citimotors" after the raffle because he was the duty judge.
She said yes and the respondent warned her that if she will not appear, she
better not return to the office ever at the same time banging the phone. For this
reason complainant stated that she did not report to the office anymore because
she knew that she will be the recipient of a series of memoranda because that is
what happens when the respondent Judge does not get what he wants. This
same thing had happened to her office mates who do not want to talk for fear of
losing their jobs. Because of his several memoranda her salary and other benefits
were withheld. That is the reason she could not immediately filed her complaint.
Moreover, she realized that she was the underdog because respondent Judge
knew many high and mighty people.15
In his Answer,16 respondent denies the averments in the affidavit-complaint and
refuted in detail the alleged act of sexual harassment. According to respondent,
sometime in February 2005, after he learned that complainant had reported back
for work after a prolonged absence, he talked to her over the phone that he
wanted to see and talk to her about her neglected work as civil case clerk-in-
charge. Complainant came to his office already trembling, crying and appeared
hysterical. The door to respondent’s chamber was only half-closed with
respondent’s son standing by the door.17
Complainant confessed that her husband, who had already become a drug addict,
had another woman, no longer reported for work, and was no longer coming
home. Complainant further informed respondent that her own father was likewise
estranged from her mother and was also living with another woman. To this
revelation, respondent merely advised complainant to work punctually everyday
and to take an interest in her work for her to forget her family problems.
Complainant allegedly apologized and promised not to repeat being
absent.181ªvvphi1.nét
A few days later, on 8 March 2005, complainant called respondent asking
permission for her to be absent as it was her birthday. Respondent told her that it
was her privilege but that she had to notify the Branch Clerk of Court. 19
With respect to the other incident, respondent asserts that at the time
complainant delivered the voluminous folders and records of three cases, she was
accompanied by Ronaldo Esguerra, the process server who carried the said
records and waited with complainant in respondent’s chambers while the latter
went over the said records. Complainant and Esguerra thereafter left together.20
In addition to his denial and refutation of the alleged acts of sexual harassment,
respondent further stated other matters with respect to complainant’s
appointment, performance, and efficiency as Clerk of his court. Respondent
states that complainant was appointed to the position of Clerk in Branch 197
upon his recommendation.21 Despite this, he criticizes her performance as docket
clerk. According to respondent, several memoranda were issued by the Branch
Clerk of Court relative to complainant’s performance of her duties, to wit: (1)
Memorandum22 dated 17 April 2002 directing complainant to immediately submit
all pleadings, motions, memoranda, and other papers to avoid delay and adverse
consequences, (2) Memorandum23 dated 19 April 2002 directing complainant to
attach the registry receipts and return cards to the records of the case to which
they pertained, (3) Memorandum24 dated 9 February 2005, requiring complainant
to explain why she did not furnish the parties with copies of the decision dated 5
November 2004 in Civil Case No. 01-0148, and (4) Memorandum25 dated 2
December 2004 ordering complainant to explain her failure to prepare the order
in LRC LP-04-0097.
42
Complainant also frequently absented herself from September to February 2005,
seriously neglecting her work to the detriment and prejudice of the service. 26 On
at least three occasions too, complainant failed to follow respondent’s instructions
with respect to the release of orders or decisions in various cases assigned to
him,27 as well as to properly keep case records.28 The Branch Clerk of Court also
found further irregularities in complainant’s performance of her duties in four
more cases and informed respondent about these.29 Complainant, in response to
the Memorandum dated 2 December 2004, admitted that she had a domestic
problem that consumed all her time and effort and which also wore her down due
to stress.30
According to respondent, complainant was no longer reporting for work since 9
March 2005 and that they have not received any notice or information as to the
reason for her prolonged absence. 31 Because of these prolonged absences, the
Branch Clerk of Court wrote the Leave Division, Office of the Court Administrator
on 1 July 2005, requesting for the immediate dropping of complainant from the
roll of employees so that her position can be declared vacant for the Court to
indorse a new employee in her place.32 Another letter was addressed to the Office
of the Clerk of Court, RTC, Las Piñas City requesting said office to hold all checks
payable to complainant representing salaries, benefits and other remunerations.33
On 29 June 2005, Caridad A. Pabello, Officer-in-Charge, Administrative Services,
Office of the Court Administrator, wrote complainant requiring her to explain her
unauthorized absences within five (5) days from receipt of the letter, favorably
endorsed by the Presiding/Executive Judge otherwise they will be constrained to
recommend that complainant be dropped from the rolls.34
Respondent surmises that it was because of this letter that complainant filed the
instant administrative complaint against him, dragging the names of the other
personnel of the branch. The malicious prosecution against respondent was also
designed to cover up her misfeasance which had been discovered.35
On 22 February 2007, the Hearing Officer Designate transmitted to this Court,
through the Office of the Court Administrator, five (5) copies of his Report,
recommending the dismissal of the case. In making his recommendations, the
Hearing Officer Designate took note of the following circumstances: 36
 1. Several months (from February) passed before the complainant filed
this case on 27 July 2005.
2. Complainant’s father was then Chief of Police of Las Piñas and his office
and respondent’s office were on the same building. Immediately after she
was assaulted, complainant left respondent’s chambers and proceeded to
her father’s. Why then did she not immediately confide in him what had
happened to her[?] On the other hand[,] she rather freely told their
branch sheriff whom she met at the canteen.
3. Complainant stated that before she went in the chambers of the
respondent when she was called in early February, she was warned by her
office mates not to be too close to respondent as he had earlier kissed
Atty. Tolentino. Complainant had conveniently omitted to mention who
were these office mates who had warned her.
4. The complainant had been a habitual absentee even before the alleged
sexual harassment. The respondent had sought her removal from his
court. To this end, his Branch Clerk of Court had written the Court
Administrator, through the leave section, to report complainant’s
delinquency and asking that her name be dropped from the roll of
employees.
5. Respondent also took steps to prevent complainant from collecting her
salary for the periods she was absent. To this end, letters were written to
the Court Administrator and to the Clerk of Court for the Las Piñas
Regional Trial Court to withhold any check or other benefit that would
accrue to the complainant.
6. It was not until these letters were written that the complaint for sexual
harassment surfaced.
After reviewing the records of the instant administrative case, we find the above
observations and conclusions of the Hearing Officer Designate to be well-taken as
they are adequately substantiated by evidence and are anchored on applicable
law and jurisprudence.
43
Sexual harassment in the workplace is not about a man taking advantage of a
woman by reason of sexual desire – it is about power being exercised by a
superior over his women subordinates. That power emanates from the fact that
he can remove them if they refuse his amorous advances. 37 Under Sec. 3 of A.M.
No. 03-03-13-SC (Re: Rule on Administrative Procedure in Sexual Harassment
Cases and Guidelines on Proper Work Decorum in the Judiciary), work-related
sexual harassment is committed by an official or employee in the Judiciary who,
having authority, influence or moral ascendancy over another in a work
environment, demands, requests or otherwise requires any sexual favor from the
other, regardless of whether the demand, request or requirement for submission
is accepted by the latter. It is committed when "the sexual favor is made as a
condition in the hiring or in the employment, re-employment or continued
employment of said individual, or in granting said individual favorable
compensation, terms, conditions, promotions, or privileges; or the refusal to
grant the sexual favor results in limiting, segregating or classifying the employee
which in any way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee." 38
In the case at bar, while it is true that the element of moral ascendancy is
present, respondent being the person who recommended complainant to her
present position, complainant has failed to prove the alleged sexual advances by
evidence other than her bare allegations in the affidavit-complaint. Even her own
actions or omissions operate to cast doubt on her claim.
With no witnesses presented to prove or refute the allegations of the complaint,
the case becomes a battle of complainant’s word against respondent’s.
It should be remembered that the case was referred to a Hearing Officer who is
not connected with the Las Piñas court but with the Office of the Court
Administrator affording a more neutral venue for both parties. However, despite
four (4) resettings39 of the hearing, complainant and her counsel failed to appear
at the 16 January 2007 scheduled hearing, thereby denying the Hearing Officer
the opportunity to question her and validate her accusation against respondent.
Her dereliction enfeebles her allegations.
With respect to respondent judge, his version of the events is not totally
implausible. Crucially, he does not admit to having committed any positive act
that can be construed as an untoward sexual advance. All told, there is no
inherent weakness in the version he proffers.

Most damaging to complainant’s cause is that, based on the records and

contemporaneous circumstances, there appears to be a strong motive on her part
to make up charges against respondent judge. It should be remembered that
even before the alleged incident, complainant was already in hot water, being the
recipient of at least four memoranda from the Branch Clerk of Court, all of which
called her to task for her poor performance as clerk in charge of civil cases. In
addition, a month before complainant filed the instant case, the Office of the
Court Administrator had directed complainant to explain her unauthorized
absences and to include in said explanation a favorable endorsement from the
Presiding/Executive Judge. Complainant was further warned that upon her failure
to comply with these directives will constrain said office to recommend her
dropping from the rolls.

The circumstances being as they are, it is easy to engender the belief that the
filing of the administrative case against respondent was a belated, vain, and futile
attempt by complainant to cover up for her own misfeasance, i.e., prolonged
leave of absence without official leave, among others, and a chance to get back
at respondent judge for initiating the administrative inquiry against her which
resulted in the withholding of her salaries and benefits as well as the rise of the

possibility of her being dropped from the rolls.40 Considering that complainant has
failed to substantiate her allegations, failing even to attest to her claims before
the investigator appointed by this Court, elementary justice dictates respondent’s
exoneration of the charge.

WHEREFORE, premises considered, the Court resolves to DISMISS the instant

administrative case against Judge Manuel N. Duque, Regional Trial Court, Branch
197, Las Piñas City for lack of merit.

SO ORDERED.

44
G.R. No. 155831 February 18, 2008 Before this Court are three Petitions for Review on Certiorari assailing the
October 18, 2002 Resolution of the CA’s Former Ninth Division 2 in CA-G.R. SP No.
MA. LOURDES T. DOMINGO, petitioner, 61026. The Resolution modified the December 14, 2001 Decision3 of the Court of
vs. Appeals’ Eleventh Division, which had affirmed the Decision of the Office of the
ROGELIO I. RAYALA, respondent. President (OP) dismissing from the service then National Labor Relations
Commission (NLRC) Chairman Rogelio I. Rayala (Rayala) for disgraceful and
x-------------------------x immoral conduct.

G.R. No. 155840 February 18, 2008 All three petitions stem from the same factual antecedents.

ROGELIO I. RAYALA, petitioner,
vs.
OFFICE OF THE PRESIDENT; RONALDO V. ZAMORA, in his capacity as
Executive Secretary; ROY V. SENERES, in his capacity as Chairman of the
National Labor Relations Commission (in lieu of RAUL T. AQUINO, in his
capacity as Acting Chairman of the National labor Relations
Commission); and MA. LOURDES T. DOMINGO, respondents.
On November 16, 1998, Ma. Lourdes T. Domingo (Domingo), then Stenographic
Reporter III at the NLRC, filed a Complaint for sexual harassment against Rayala
before Secretary Bienvenido Laguesma of the Department of Labor and
Employment (DOLE).
To support the Complaint, Domingo executed an Affidavit narrating the
incidences of sexual harassment complained of, thus:

x-------------------------x xxxx

G.R. No. 158700 February 18, 2008 4. Sa simula ay pabulong na sinasabihan lang ako ni Chairman Rayala ng
mga salitang "Lot, gumaganda ka yata?"
The REPUBLIC OF THE PHILIPPINES, represented by the OFFICE OF THE
PRESIDENT; and ALBERTO G. ROMULO, in his capacity as Executive 5. Sa ibang mga pagkakataon nilalapitan na ako ni Chairman at
Secretary, petitioners, hahawakan ang aking balikat sabay pisil sa mga ito habang ako ay nagta-
vs. type at habang nagbibigay siya ng diktasyon. Sa mga pagkakataong ito,
ROGELIO I. RAYALA, respondent. kinakabahan ako. Natatakot na baka mangyari sa akin ang mga
napapabalitang insidente na nangyari na noon tungkol sa mga sekretarya
DECISION niyang nagbitiw gawa ng mga mahahalay na panghihipo ni Chairman.

NACHURA, J.:
Sexual harassment is an imposition of misplaced "superiority" which is enough to
dampen an employee’s spirit and her capacity for advancement. It affects her
sense of judgment; it changes her life.1
6. Noong ika-10 ng Setyembre, 1998, nang ako ay nasa 8 th Floor, may
nagsabi sa akin na kailangan akong bumaba sa 7th Floor kung nasaan ang
aming opisina dahil sa may koreksyon daw na gagawin sa mga papel na
tinayp ko. Bumaba naman ako para gawin ito. Habang ginagawa ko ito,
lumabas si Chairman Rayala sa silid ni Mr. Alex Lopez. Inutusan ako ni
Chairman na sumunod sa kaniyang silid. Nang nasa silid na kami, sinabi
niya sa akin:

45
 Chairman: Lot, I like you a lot. Naiiba ka sa lahat. Lourdes: Bakit naman, Sir?

At pagkatapos ako ay kaniyang inusisa tungkol sa mga personal na bagay Chairman: Basta. Maraming tsismosa diyan sa labas. But I don’t
sa aking buhay. Ang ilan dito ay tungkol sa aking mga magulang, kapatid, give them a damn. Hindi ako mamatay sa kanila.
pag-aaral at kung may boyfriend na raw ba ako.
Tumayo na ako at lumabas. Pumanhik na ako ng 8 th Floor at pumunta ako
Chairman: May boyfriend ka na ba? sa officemate ko na si Agnes Magdaet. Ikinwento ko ang nangyari sa akin
sa opisina ni Chairman. Habang kinikwento ko ito kay Agnes ay binilang
Lourdes: Dati nagkaroon po. namin ang pera na nagkakahalaga ng tatlong libong piso (PHP 3,000).
Sinabi ni Agnes na isauli ko raw ang pera, pero ang sabi ko ay natatakot
Chairman: Nasaan na siya? ako baka magalit si Sir. Nagsabi agad kami kay EC Perlita Velasco at
sinalaysay ko ang nangyari. Sinabi niya na isauli ko ang pera at noong
Lourdes: Nag-asawa na ho. araw ding iyon ay nagpasiya akong isauli na nga ito ngunit hindi ako
nagkaroon ng pagkakataon dahil marami siyang naging bisita. Isinauli ko
Chairman: Bakit hindi kayo nagkatuluyan? nga ang pera noong Lunes, Setyembre 14, 1998.

Lourdes: Nainip po. 7. Noong huling linggo ng Setyembre, 1998, ay may tinanong din sa akin
si Chairman Rayala na hindi ko masikmura, at sa aking palagay at
Chairman: Pagkatapos mo ng kurso mo ay kumuha ka ng Law at tahasang pambabastos sa akin.
ako ang bahala sa iyo, hanggang ako pa ang Chairman dito.
Chairman: Lot, may ka live-in ka ba?
Pagkatapos ay kumuha siya ng pera sa kaniyang amerikana at inaabot sa
akin. Lourdes: Sir, wala po.

Chairman: Kuhanin mo ito. Chairman: Bakit malaki ang balakang mo?

Lourdes: Huwag na ho hindi ko kailangan. Lourdes: Kayo, Sir ha! Masama sa amin ang may ka live-in.

Chairman: Hindi sige, kuhanin mo. Ayusin mo ang dapat ayusin. Chairman: Bakit, ano ba ang relihiyon ninyo?

Tinanggap ko po ang pera ng may pag-aalinlangan. Natatakot at Lourdes: Catholic, Sir. Kailangan ikasal muna.
kinakabahan na kapag hindi ko tinanggap ang pera ay baka siya magagalit
kasabay na rito ang pagtapon sa akin kung saan-saan opisina o kaya ay Chairman: Bakit ako, hindi kasal.
tanggalin ako sa posisyon.
Lourdes: Sir, di magpakasal kayo.
Chairman: Paglabas mo itago mo ang pera. Ayaw ko ng may
makaka-alam nito. Just the two of us. Chairman: Huh. Ibahin na nga natin ang usapan.

46
8. Noong Oktubre 29, 1998, ako ay pumasok sa kwarto ni Chairman
Rayala. Ito ay sa kadahilanang ang fax machine ay nasa loob ng kaniyang
kwarto. Ang nag-aasikaso nito, si Riza Ocampo, ay naka-leave kaya ako
ang nag-asikaso nito noong araw na iyon. Nang mabigyan ko na ng fax
tone yung kausap ko, pagharap ko sa kanan ay nakaharang sa dadaanan
ko si Chairman Rayala. Tinitingnan ako sa mata at ang titig niya ay
umuusad mula ulo hanggang dibdib tapos ay ngumiti na may mahalay na
pakahulugan.
9. Noong hapon naman ng pareho pa ring petsa, may nag-aapply na
sekretarya sa opisina, sinabi ko ito kay Chairman Rayala:
Lourdes: Sir, si Pinky po yung applicant, mag-papainterview po
yata sa inyo.
Chairman: Sabihin mo magpa-pap smear muna siya
Chairman: O sige, i-refer mo kay Alex. (Alex Lopez, Chief of Staff).
10. Noong Nobyembre 9, 1998, ako ay tinawag ni Chairman Rayala sa
kaniyang opisina upang kuhanin ko ang diktasyon niya para kay ELA Oscar
Uy. Hindi pa kami nakakatapos ng unang talata, may pumasok na bisita si
Chairman, si Baby Pangilinan na sinamahan ni Riza Ocampo. Pinalabas
muna ako ni Chairman. Nang maka-alis na si Ms. Pangilinan, pinapasok na
niya ako ulit. Umupo ako. Lumapit sa likuran ko si Chairman, hinawakan
ang kaliwang balikat ko na pinipisil ng kanang kamay niya at sinabi:
Chairman: Saan na ba tayo natapos?
Palakad-lakad siya sa aking likuran habang nag-didikta. Huminto siya
pagkatapos, at nilagay niya ang kanang kamay niya sa aking kanang
balikat at pinisil-pisil ito pagkatapos ay pinagapang niya ito sa kanang
bahagi ng aking leeg, at pinagapang hanggang kanang tenga at saka
kiniliti. Dito ko inalis ang kaniyang kamay sa pamamagitan ng aking
kaliwang kamay. At saka ko sinabi:
Lourdes: Sir, yung kamay ninyo alisin niyo!
47
Natapos ko rin ang liham na pinagagawa niya pero halos hindi ko na
maintindihan ang na-isulat ko dahil sa takot at inis na nararamdaman ko.4
After the last incident narrated, Domingo filed for leave of absence and asked to
be immediately transferred. Thereafter, she filed the Complaint for sexual
harassment on the basis of Administrative Order No. 250, the Rules and
Regulations Implementing RA 7877 in the Department of Labor and Employment.
Upon receipt of the Complaint, the DOLE Secretary referred the Complaint to the
OP, Rayala being a presidential appointee. The OP, through then Executive
Secretary Ronaldo Zamora, ordered Secretary Laguesma to investigate the
allegations in the Complaint and create a committee for such purpose. On
December 4, 1998, Secretary Laguesma issued Administrative Order (AO) No.
280, Series of 1998,5 constituting a Committee on Decorum and Investigation
(Committee) in accordance with Republic Act (RA) 7877, the Anti-Sexual
Harassment Act of 1995.6
The Committee heard the parties and received their respective evidence. On
March 2, 2000, the Committee submitted its report and recommendation to
Secretary Laguesma. It found Rayala guilty of the offense charged and
recommended the imposition of the minimum penalty provided under AO 250,
which it erroneously stated as suspension for six (6) months.
The following day, Secretary Laguesma submitted a copy of the Committee
Report and Recommendation to the OP, but with the recommendation that the
penalty should be suspension for six (6) months and one (1) day, in accordance
with AO 250.
On May 8, 2000, the OP, through Executive Secretary Zamora, issued AO
119,7 the pertinent portions of which read:
Upon a careful scrutiny of the evidence on record, I concur with the
findings of the Committee as to the culpability of the respondent [Rayala],
the same having been established by clear and convincing evidence.
However, I disagree with the recommendation that respondent be meted
only the penalty of suspension for six (6) months and one (1) day
considering the circumstances of the case.
What aggravates respondent’s situation is the undeniable circumstance
that he took advantage of his position as the superior of the complainant.
Respondent occupies the highest position in the NLRC, being its Chairman.
As head of said office, it was incumbent upon respondent to set an
example to the others as to how they should conduct themselves in public
office, to see to it that his subordinates work efficiently in accordance with
Civil Service Rules and Regulations, and to provide them with healthy
working atmosphere wherein co-workers treat each other with respect,
courtesy and cooperation, so that in the end the public interest will be
benefited (City Mayor of Zamboanga vs. Court of Appeals, 182 SCRA 785
[1990]).
What is more, public service requires the utmost integrity and strictest
discipline (Gano vs. Leonen, 232 SCRA 99 [1994]). Thus, a public servant
must exhibit at all times the highest sense of honesty and integrity, and
"utmost devotion and dedication to duty" (Sec. 4 (g), RA 6713), respect
the rights of others and shall refrain from doing acts contrary to law, and
good morals (Sec. 4(c)). No less than the Constitution sanctifies the
principle that a public office is a public trust, and enjoins all public officers
and employees to serve with the highest degree of responsibility,
integrity, loyalty and efficiency (Section 1, Article XI, 1987 Constitution).
Given these established standards, I see respondent’s acts not just [as] a
failure to give due courtesy and respect to his co-employees
(subordinates) or to maintain good conduct and behavior but defiance of
the basic norms or virtues which a government official must at all times
uphold, one that is contrary to law and "public sense of morality."
Otherwise stated, respondent – to whom stricter standards must apply
being the highest official [of] the NLRC – had shown an attitude, a frame
of mind, a disgraceful conduct, which renders him unfit to remain in the
service.
WHEREFORE, in view of the foregoing, respondent Rogelio I. Rayala,
Chairman, National Labor Relations Commission, is found guilty of the
grave offense of disgraceful and immoral conduct and is
hereby DISMISSED from the service effective upon receipt of this Order.
48
SO ORDER[ED].
Rayala filed a Motion for Reconsideration, which the OP denied in a
Resolution8 dated May 24, 2000. He then filed a Petition for Certiorari and
Prohibition with Prayer for Temporary Restraining Order under Rule 65 of the
Revised Rules on Civil Procedure before this Court on June 14, 2000. 9 However,
the same was dismissed in a Resolution dated June 26, 2000 for disregarding the
hierarchy of courts.10 Rayala filed a Motion for
Reconsideration11 on August 15, 2000. In its Resolution12 dated September 4,
2000, the Court recalled its June 26 Resolution and referred the petition to the
Court of Appeals (CA) for appropriate action.
The CA rendered its Decision13 on December 14, 2001. It held that there was
sufficient evidence on record to create moral certainty that Rayala committed the
acts he was charged with. It said:
The complainant narrated her story complete with details. Her
straightforward and uninhibited testimony was not emasculated by the
declarations of Commissioner Rayala or his witnesses. x x x
Moreover, Commissioner Rayala has not proven any vicious motive for
Domingo and her witnesses to invent their stories. It is very unlikely that
they would perjure themselves only to accommodate the alleged
conspiracy to oust petitioner from office. Save for his empty conjectures
and speculations, Rayala failed to substantiate his contrived conspiracy. It
is a hornbook doctrine that conspiracy must be proved by positive and
convincing evidence (People v. Noroña, 329 SCRA 502 [2000]). Besides, it
is improbable that the complainant would concoct a story of sexual
harassment against the highest official of the NLRC and thereby expose
herself to the possibility of losing her job, or be the subject of reprisal
from her superiors and perhaps public ridicule if she was not telling the
truth.
It also held that Rayala’s dismissal was proper. The CA pointed out that Rayala
was dismissed for disgraceful and immoral conduct in violation of RA 6713,
the Code of Conduct and Ethical Standards for Public Officials and Employees. It
held that the OP was correct in concluding that Rayala’s acts violated RA 6713:
Indeed, [Rayala] was a public official, holding the Chairmanship of the
National Labor Relations Commission, entrusted with the sacred duty of
administering justice. Occupying as he does such an exalted position,
Commissioner Rayala must pay a high price for the honor bestowed upon
him. He must comport himself at all times in such a manner that the
conduct of his everyday life should be beyond reproach and free from any
impropriety. That the acts complained of were committed within the
sanctuary of [his] office compounded the objectionable nature of his
wrongdoing. By daring to violate the complainant within the solitude of his
chambers, Commissioner Rayala placed the integrity of his office in
disrepute. His disgraceful and immoral conduct warrants his removal from
office.14
Thus, it dismissed the petition, to wit:
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
DISMISSED and Administrative Order No. 119 as well [as] the Resolution
of the Office of the President in O.P. Case No. 00-E-9118 dated May 24,
2000 are AFFIRMED IN TOTO. No cost.
SO ORDERED.15
Rayala timely filed a Motion for Reconsideration. Justices Vasquez and Tolentino
voted to affirm the December 14 Decision. However, Justice Reyes dissented
mainly because AO 250 states that the penalty imposable is suspension for six
(6) months and one (1) day.16 Pursuant to the internal rules of the CA, a Special
Division of Five was constituted.17 In its October 18, 2002 Resolution, the CA
modified its earlier Decision:
ACCORDINGLY, the Decision dated December [14], 2001 is MODIFIED to
the effect that the penalty of dismissal is DELETED and instead the penalty
of suspension from service for the maximum period of one (1) year is
HEREBY IMPOSED upon the petitioner. The rest of the challenged decision
stands.
49
SO ORDERED.
Domingo filed a Petition for Review18 before this Court, which we denied in our
February 19, 2003 Resolution for having a defective verification. She filed a
Motion for Reconsideration, which the Court granted; hence, the petition was
reinstated.
Rayala likewise filed a Petition for Review19 with this Court essentially arguing
that he is not guilty of any act of sexual harassment.
Meanwhile, the Republic filed a Motion for Reconsideration of the CA’s October
18, 2002 Resolution. The CA denied the same in its June 3, 2003 Resolution, the
dispositive portion of which reads:
ACCORDINGLY, by a majority vote, public respondents’ Motion for
Reconsideration, (sic) is DENIED.
SO ORDERED.
The Republic then filed its own Petition for Review. 20
On June 28, 2004, the Court directed the consolidation of the three (3) petitions.
G.R. No. 155831
Domingo assails the CA’s resolution modifying the penalty imposed by the Office
of the President. She raises this issue:
The Court of Appeals erred in modifying the penalty for the respondent
from dismissal to suspension from service for the maximum period of one
year. The President has the prerogative to determine the proper penalty
to be imposed on an erring Presidential appointee. The President was well
within his power when he fittingly used that prerogative in deciding to
dismiss the respondent from the service.21
She argues that the power to remove Rayala, a presidential appointee, is lodged
with the President who has control of the entire Executive Department, its
bureaus and offices. The OP’s decision was arrived at after affording Rayala due
process. Hence, his dismissal from the service is a prerogative that is entirely
with the President.22
As to the applicability of AO No. 250, she argues that the same was not intended
to cover cases against presidential appointees. AO No. 250 refers only to the
instances wherein the DOLE Secretary is the disciplining authority, and thus, the
AO does not circumscribe the power of the President to dismiss an erring
presidential appointee.
G.R. No. 155840
In his petition, Rayala raises the following issues:
I. CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, THE
ACTS OF HEREIN PETITIONER DO NOT CONSTITUTE SEXUAL
HARASSMENT AS LAID DOWN BY THE En Banc RULING IN THE
CASE OF AQUINO vs. ACOSTA, ibid., AS WELL AS IN THE
APPLICATION OF EXISTING LAWS.
II. CONTRARY TO THE FINDINGS OF THE HONORABLE COURT OF
APPEALS, INTENT IS AN INDISPENSABLE ELEMENT IN A CASE FOR
SEXUAL HARASSMENT. THE HONORABLE COURT ERRED IN ITS
FINDING THAT IT IS AN OFFENSE THAT IS MALUM PROHIBITUM.
III. THE INVESTIGATION COMMITTEE, THE OFFICE OF THE
PRESIDENT, AND NOW, THE HONORABLE COURT OF APPEALS, HAS
MISAPPLIED AND EXPANDED THE DEFINITION OF SEXUAL
HARASSMENT IN THE WORKPLACE UNDER R.A. No. 7877, BY
APPLYING DOLE A.O. 250, WHICH RUNS COUNTER TO THE RECENT
PRONOUNCEMENTS OF THIS HONORABLE SUPREME COURT. 23
Invoking Aquino v. Acosta, Rayala argues that the case is the definitive ruling
24
on what constitutes sexual harassment. Thus, he posits that for sexual
harassment to exist under RA 7877, there must be: (a) demand, request, or
requirement of a sexual favor; (b) the same is made a pre-condition to hiring, re-
50
employment, or continued employment; or (c) the denial thereof results in
discrimination against the employee.
Rayala asserts that Domingo has failed to allege and establish any sexual favor,
demand, or request from petitioner in exchange for her continued employment or
for her promotion. According to Rayala, the acts imputed to him are without
malice or ulterior motive. It was merely Domingo’s perception of malice in his
alleged acts – a "product of her own imagination"25 – that led her to file the
sexual harassment complaint.
Likewise, Rayala assails the OP’s interpretation, as upheld by the CA, that RA
7877 is malum prohibitum such that the defense of absence of malice is
unavailing. He argues that sexual harassment is considered an offense against a
particular person, not against society as a whole. Thus, he claims that intent is an
essential element of the offense because the law requires as a conditio sine qua
non that a sexual favor be first sought by the offender in order to achieve certain
specific results. Sexual harassment is committed with the perpetrator’s deliberate
intent to commit the offense.26
Rayala next argues that AO 250 expands the acts proscribed in RA 7877. In
particular, he assails the definition of the forms of sexual harassment:
Rule IV
FORMS OF SEXUAL HARASSMENT
Section 1. Forms of Sexual Harassment. – Sexual harassment may be
committed in any of the following forms:
a) Overt sexual advances;
b) Unwelcome or improper gestures of affection;
c) Request or demand for sexual favors including but not limited to going
out on dates, outings or the like for the same purpose;
 d) Any other act or conduct of a sexual nature or for purposes of sexual
gratification which is generally annoying, disgusting or offensive to the
victim.27
He posits that these acts alone without corresponding demand, request, or
requirement do not constitute sexual harassment as contemplated by the
law.28 He alleges that the rule-making power granted to the employer in Section
4(a) of RA 7877 is limited only to procedural matters. The law did not delegate to
the employer the power to promulgate rules which would provide other or
additional forms of sexual harassment, or to come up with its own definition of
sexual harassment.29
G.R. No. 158700
The Republic raises this issue:
Whether or not the President of the Philippines may validly
dismiss respondent Rayala as Chairman of the NLRC for
committing acts of sexual harassment.30
The Republic argues that Rayala’s acts constitute sexual harassment under AO
250. His acts constitute unwelcome or improper gestures of affection and are acts
or conduct of a sexual nature, which are generally annoying or offensive to the
victim.31
It also contends that there is no legal basis for the CA’s reduction of the penalty
imposed by the OP. Rayala’s dismissal is valid and warranted under the
circumstances. The power to remove the NLRC Chairman solely rests upon the
President, limited only by the requirements under the law and the due process
clause.
The Republic further claims that, although AO 250 provides only a one (1) year
suspension, it will not prevent the OP from validly imposing the penalty of
dismissal on Rayala. It argues that even though Rayala is a presidential
appointee, he is still subject to the Civil Service Law. Under the Civil Service Law,
disgraceful and immoral conduct, the acts imputed to Rayala, constitute grave
misconduct punishable by dismissal from the service. 32 The Republic adds that
51
Rayala’s position is invested with public trust and his acts violated that trust;
thus, he should be dismissed from the service.
This argument, according to the Republic, is also supported by Article 215 of the
Labor Code, which states that the Chairman of the NLRC holds office until he
reaches the age of 65 only during good behavior.33 Since Rayala’s security of
tenure is conditioned upon his good behavior, he may be removed from office if it
is proven that he has failed to live up to this standard.
All the issues raised in these three cases can be summed up in two ultimate
questions, namely:
(1) Did Rayala commit sexual harassment?
(2) If he did, what is the applicable penalty?
Initially, however, we must resolve a procedural issue raised by Rayala. He
accuses the Office of the Solicitor General (OSG), as counsel for the Republic, of
forum shopping because it filed a motion for reconsideration of the decision in
CA-G.R. SP No. 61026 and then filed a comment in G.R. No. 155840 before this
Court.
We do not agree.
Forum shopping is an act of a party, against whom an adverse judgment or order
has been rendered in one forum, of seeking and possibly securing a favorable
opinion in another forum, other than by appeal or special civil action
for certiorari.34 It consists of filing multiple suits involving the same parties for
the same cause of action, either simultaneously or successively, for the purpose
of obtaining a favorable judgment.35
There is forum shopping when the following elements concur: (1) identity of the
parties or, at least, of the parties who represent the same interest in both
actions; (2) identity of the rights asserted and relief prayed for, as the latter is
founded on the same set of facts; and (3) identity of the two preceding
particulars such that any judgment rendered in the other action will amount
to res judicata in the action under consideration or will constitute litis
pendentia.36
Reviewing the antecedents of these consolidated cases, we note that the CA
rendered the assailed Resolution on October 18, 2002. The Republic filed its
Motion for Reconsideration on November 22, 2002. On the other hand, Rayala
filed his petition before this Court on November 21, 2002. While the Republic’s
Motion for Reconsideration was pending resolution before the CA, on December
2, 2002, it was directed by this Court to file its Comment on Rayala’s petition,
which it submitted on June 16, 2003.
When the CA denied the Motion for Reconsideration, the Republic filed its own
Petition for Review with this Court on July 3, 2003. It cited in its "Certification
and Verification of a Non-Forum Shopping" (sic), that there was a case involving
the same facts pending before this Court denominated as G.R. No. 155840. With
respect to Domingo’s petition, the same had already been dismissed on February
19, 2003. Domingo’s petition was reinstated on June 16, 2003 but the resolution
was received by the OSG only on July 25, 2003, or after it had filed its own
petition.37
Based on the foregoing, it cannot be said that the OSG is guilty of forum
shopping. We must point out that it was Rayala who filed the petition in the CA,
with the Republic as the adverse party. Rayala himself filed a motion for
reconsideration of the CA’s December 21, 2001 Decision, which led to a more
favorable ruling, i.e., the lowering of the penalty from dismissal to one-year
suspension. The parties adversely affected by this ruling (Domingo and the
Republic) had the right to question the same on motion for reconsideration. But
Domingo directly filed a Petition for Review with this Court, as did Rayala. When
the Republic opted to file a motion for reconsideration, it was merely exercising a
right. That Rayala and Domingo had by then already filed cases before the SC did
not take away this right. Thus, when this Court directed the Republic to file its
Comment on Rayala’s petition, it had to comply, even if it had an unresolved
motion for reconsideration with the CA, lest it be cited for contempt.
Accordingly, it cannot be said that the OSG "file[d] multiple suits involving the
same parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment."
52
We now proceed to discuss the substantive issues.
It is noteworthy that the five CA Justices who deliberated on the case were
unanimous in upholding the findings of the Committee and the OP. They found
the assessment made by the Committee and the OP to be a "meticulous and
dispassionate analysis of the testimonies of the complainant (Domingo), the
respondent (Rayala), and their respective witnesses." 38 They differed only on the
appropriate imposable penalty.
That Rayala committed the acts complained of – and was guilty of sexual
harassment – is, therefore, the common factual finding of not just one, but three
independent bodies: the Committee, the OP and the CA. It should be
remembered that when supported by substantial evidence, factual findings made
by quasi-judicial and administrative bodies are accorded great respect and even
finality by the courts.39 The principle, therefore, dictates that such findings should
bind us.40
Indeed, we find no reason to deviate from this rule. There appears no valid
ground for this Court to review the factual findings of the CA, the OP, and the
Investigating Committee. These findings are now conclusive on the Court. And
quite significantly, Rayala himself admits to having committed some of the acts
imputed to him.
He insists, however, that these acts do not constitute sexual harassment,
because Domingo did not allege in her complaint that there was a demand,
request, or requirement of a sexual favor as a condition for her continued
employment or for her promotion to a higher position.41 Rayala urges us to apply
to his case our ruling in Aquino v. Acosta.42
We find respondent’s insistence unconvincing.
Basic in the law of public officers is the three-fold liability rule, which states that
the wrongful acts or omissions of a public officer may give rise to civil, criminal
and administrative liability. An action for each can proceed independently of the
others.43 This rule applies with full force to sexual harassment.
The law penalizing sexual harassment in our jurisdiction is RA 7877. Section 3
thereof defines work-related sexual harassment in this wise:
Sec. 3. Work, Education or Training-related Sexual Harassment Defined. –
Work, education or training-related sexual harassment is committed by an
employer, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or
training or education environment, demands, requests or otherwise
requires any sexual favor from the other, regardless of whether the
demand, request or requirement for submission is accepted by the object
of said Act.
(a) In a work-related or employment environment, sexual harassment is
committed when:
(1) The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said individual,
or in granting said individual favorable compensation, terms, conditions,
promotions, or privileges; or the refusal to grant the sexual favor results
in limiting, segregating or classifying the employee which in a way would
discriminate, deprive or diminish employment opportunities or otherwise
adversely affect said employee;
(2) The above acts would impair the employee’s rights or privileges under
existing labor laws; or
(3) The above acts would result in an intimidating, hostile, or offensive
environment for the employee.
This section, in relation to Section 7 on penalties, defines the criminal aspect of
the unlawful act of sexual harassment. The same section, in relation to Section 6,
authorizes the institution of an independent civil action for damages and other
affirmative relief.
Section 4, also in relation to Section 3, governs the procedure for administrative
cases, viz.:
53
Sec. 4. Duty of the Employer or Head of Office in a Work-related,
Education or Training Environment. – It shall be the duty of the employer
or the head of the work-related, educational or training environment or
institution, to prevent or deter the commission of acts of sexual
harassment and to provide the procedures for the resolution, settlement
or prosecution of acts of sexual harassment. Towards this end, the
employer or head of office shall:
(a) Promulgate appropriate rules and regulations in consultation
with and jointly approved by the employees or students or
trainees, through their duly designated representatives, prescribing
the procedure for the investigation or sexual harassment cases and
the administrative sanctions therefor.
Administrative sanctions shall not be a bar to prosecution in the
proper courts for unlawful acts of sexual harassment.
The said rules and regulations issued pursuant to this section (a)
shall include, among others, guidelines on proper decorum in the
workplace and educational or training institutions.
(b) Create a committee on decorum and investigation of cases on
sexual harassment. The committee shall conduct meetings, as the
case may be, with other officers and employees, teachers,
instructors, professors, coaches, trainors and students or trainees
to increase understanding and prevent incidents of sexual
harassment. It shall also conduct the investigation of the alleged
cases constituting sexual harassment.
In the case of a work-related environment, the committee shall be
composed of at least one (1) representative each from the management,
the union, if any, the employees from the supervisory rank, and from the
rank and file employees.
In the case of the educational or training institution, the committee shall
be composed of at least one (1) representative from the administration,
 the trainors, teachers, instructors, professors or coaches and students or
trainees, as the case maybe.
The employer or head of office, educational or training institution shall
disseminate or post a copy of this Act for the information of all concerned.
The CA, thus, correctly ruled that Rayala’s culpability is not to be determined
solely on the basis of Section 3, RA 7877, because he is charged with the
administrative offense, not the criminal infraction, of sexual harassment. 44 It
should be enough that the CA, along with the Investigating Committee and the
Office of the President, found substantial evidence to support the administrative
charge.
Yet, even if we were to test Rayala’s acts strictly by the standards set in Section
3, RA 7877, he would still be administratively liable. It is true that this provision
calls for a "demand, request or requirement of a sexual favor." But it is not
necessary that the demand, request or requirement of a sexual favor be
articulated in a categorical oral or written statement. It may be discerned, with
equal certitude, from the acts of the offender. Holding and squeezing Domingo’s
shoulders, running his fingers across her neck and tickling her ear, having
inappropriate conversations with her, giving her money allegedly for school
expenses with a promise of future privileges, and making statements with
unmistakable sexual overtones – all these acts of Rayala resound with deafening
clarity the unspoken request for a sexual favor.
Likewise, contrary to Rayala’s claim, it is not essential that the demand, request
or requirement be made as a condition for continued employment or for
promotion to a higher position. It is enough that the respondent’s acts result in
creating an intimidating, hostile or offensive environment for the
employee.45 That the acts of Rayala generated an intimidating and hostile
environment for Domingo is clearly shown by the common factual finding of the
Investigating Committee, the OP and the CA that Domingo reported the matter to
an officemate and, after the last incident, filed for a leave of absence and
requested transfer to another unit.
Rayala’s invocation of Aquino v. Acosta46 is misplaced, because the factual setting
in that case is different from that in the case at bench. In Aquino, Atty. Susan
54
Aquino, Chief of the Legal and Technical Staff of the Court of Tax Appeals (CTA),
charged then CTA Presiding Judge (now Presiding Justice) Ernesto Acosta of
sexual harassment. She complained of several incidents when Judge Acosta
allegedly kissed her, embraced her, and put his arm around her shoulder. The
case was referred to CA Justice Josefina G. Salonga for investigation. In her
report, Justice Salonga found that "the complainant failed to show by convincing
evidence that the acts of Judge Acosta in greeting her with a kiss on the cheek, in
a `beso-beso’ fashion, were carried out with lustful and lascivious desires or were
motivated by malice or ill motive. It is clear from the circumstances that most of
the kissing incidents were done on festive and special occasions," and they "took
place in the presence of other people and the same was by reason of the
exaltation or happiness of the moment." Thus, Justice Salonga concluded:
In all the incidents complained of, the respondent's pecks on the cheeks of
the complainant should be understood in the context of having been done
on the occasion of some festivities, and not the assertion of the latter that
she was singled out by Judge Acosta in his kissing escapades. The busses
on her cheeks were simply friendly and innocent, bereft of malice and
lewd design. The fact that respondent judge kisses other people on the
cheeks in the 'beso-beso' fashion, without malice, was corroborated by
Atty. Florecita P. Flores, Ms. Josephine Adalem and Ms. Ma. Fides Balili,
who stated that they usually practice 'beso-beso' or kissing on the cheeks,
as a form of greeting on occasions when they meet each other, like
birthdays, Christmas, New Year's Day and even Valentine's Day, and it
does not matter whether it is Judge Acosta's birthday or their birthdays.
Theresa Cinco Bactat, a lawyer who belongs to complainant's department,
further attested that on occasions like birthdays, respondent judge would
likewise greet her with a peck on the cheek in a 'beso-beso' manner.
Interestingly, in one of several festive occasions, female employees of the
CTA pecked respondent judge on the cheek where Atty. Aquino was one of
Judge Acosta's well wishers.
In sum, no sexual harassment had indeed transpired on those six
occasions. Judge Acosta's acts of bussing Atty. Aquino on her cheek were
merely forms of greetings, casual and customary in nature. No evidence of
intent to sexually harass complainant was apparent, only that the innocent
acts of 'beso-beso' were given malicious connotations by the complainant.
 In fact, she did not even relate to anyone what happened to her.
Undeniably, there is no manifest sexual undertone in all those incidents.47
This Court agreed with Justice Salonga, and Judge Acosta was exonerated.
To repeat, this factual milieu in Aquino does not obtain in the case at bench.
While in Aquino, the Court interpreted the acts (of Judge Acosta) as casual
gestures of friendship and camaraderie, done during festive or special occasions
and with other people present, in the instant case, Rayala’s acts of holding and
squeezing Domingo’s shoulders, running his fingers across her neck and tickling
her ear, and the inappropriate comments, were all made in the confines of
Rayala’s office when no other members of his staff were around. More
importantly, and a circumstance absent in Aquino, Rayala’s acts, as already
adverted to above, produced a hostile work environment for Domingo, as shown
by her having reported the matter to an officemate and, after the last incident,
filing for a leave of absence and requesting transfer to another unit.
Rayala also argues that AO 250 does not apply to him. First, he argues that AO
250 does not cover the NLRC, which, at the time of the incident, was under the
DOLE only for purposes of program and policy coordination. Second, he posits
that even assuming AO 250 is applicable to the NLRC, he is not within its
coverage because he is a presidential appointee.
We find, however, that the question of whether or not AO 250 covers Rayala is of
no real consequence. The events of this case unmistakably show that the
administrative charges against Rayala were for violation of RA 7877; that the OP
properly assumed jurisdiction over the administrative case; that the participation
of the DOLE, through the Committee created by the Secretary, was limited to
initiating the investigation process, reception of evidence of the parties,
preparation of the investigation report, and recommending the appropriate action
to be taken by the OP. AO 250 had never really been applied to Rayala. If it was
used at all, it was to serve merely as an auxiliary procedural guide to aid the
Committee in the orderly conduct of the investigation.
Next, Rayala alleges that the CA erred in holding that sexual harassment is an
offense malum prohibitum. He argues that intent is an essential element in
55
sexual harassment, and since the acts imputed to him were done allegedly
without malice, he should be absolved of the charges against him.
We reiterate that what is before us is an administrative case for sexual
harassment. Thus, whether the crime of sexual harassment is malum in
se or malum prohibitum is immaterial.
We also reject Rayala’s allegations that the charges were filed because of a
conspiracy to get him out of office and thus constitute merely political
harassment. A conspiracy must be proved by clear and convincing evidence. His
bare assertions cannot stand against the evidence presented by Domingo. As we
have already ruled, the acts imputed to Rayala have been proven as fact.
Moreover, he has not proven any ill motive on the part of Domingo and her
witnesses which would be ample reason for her to conjure stories about him. On
the contrary, ill motive is belied by the fact that Domingo and her witnesses – all
employees of the NLRC at that time – stood to lose their jobs or suffer unpleasant
consequences for coming forward and charging their boss with sexual
harassment.
Furthermore, Rayala decries the alleged violation of his right to due process. He
accuses the Committee on Decorum of railroading his trial for violation of RA
7877. He also scored the OP’s decision finding him guilty of "disgraceful and
immoral conduct" under the Revised Administrative Code and not for violation of
RA 7877. Considering that he was not tried for "disgraceful and immoral
conduct," he argues that the verdict is a "sham and total nullity."
We hold that Rayala was properly accorded due process. In previous cases, this
Court held that:
[i]n administrative proceedings, due process has been recognized to
include the following: (1) the right to actual or constructive notice of the
institution of proceedings which may affect a respondent’s legal rights; (2)
a real opportunity to be heard personally or with the assistance of
counsel, to present witnesses and evidence in one’s favor, and to defend
one’s rights; (3) a tribunal vested with competent jurisdiction and so
constituted as to afford a person charged administratively a reasonable
guarantee of honesty as well as impartiality; and (4) a finding by said
 tribunal which is supported by substantial evidence submitted for
consideration during the hearing or contained in the records or made
known to the parties affected.48
The records of the case indicate that Rayala was afforded all these procedural
due process safeguards. Although in the beginning he questioned the authority of
the Committee to try him,49 he appeared, personally and with counsel, and
participated in the proceedings.
On the other point raised, this Court has held that, even in criminal cases, the
designation of the offense is not controlling, thus:
What is controlling is not the title of the complaint, nor the designation of
the offense charged or the particular law or part thereof allegedly violated,
these being mere conclusions of law made by the prosecutor, but the
description of the crime charged and the particular facts therein recited.
The acts or omissions complained of must be alleged in such form as is
sufficient to enable a person of common understanding to know what
offense is intended to be charged, and enable the court to pronounce
proper judgment. No information for a crime will be sufficient if it does not
accurately and clearly allege the elements of the crime charged. Every
element of the offense must be stated in the information. What facts and
circumstances are necessary to be included therein must be determined
by reference to the definitions and essentials of the specified crimes. The
requirement of alleging the elements of a crime in the information is to
inform the accused of the nature of the accusation against him so as to
enable him to suitably prepare his defense.50
It is noteworthy that under AO 250, sexual harassment amounts to disgraceful
and immoral conduct.51 Thus, any finding of liability for sexual harassment may
also be the basis of culpability for disgraceful and immoral conduct.
With the foregoing disquisitions affirming the finding that Rayala committed
sexual harassment, we now determine the proper penalty to be imposed.
Rayala attacks the penalty imposed by the OP. He alleges that under the
pertinent Civil Service Rules, disgraceful and immoral conduct is punishable by
56
suspension for a period of six (6) months and one (1) day to one (1) year. He
also argues that since he is charged administratively, aggravating or mitigating
circumstances cannot be appreciated for purposes of imposing the penalty.
Under AO 250, the penalty for the first offense is suspension for six (6) months
and one (1) day to one (1) year, while the penalty for the second offense is
dismissal.52 On the other hand, Section 22(o), Rule XVI of the Omnibus Rules
Implementing Book V of the Administrative Code of 1987 53 and Section 52 A(15)
of the Revised Uniform Rules on Administrative Cases in the Civil Service 54 both
provide that the first offense of disgraceful and immoral conduct is punishable by
suspension of six (6) months and one (1) day to one (1) year. A second offense
is punishable by dismissal.
Under the Labor Code, the Chairman of the NLRC shall hold office during good
behavior until he or she reaches the age of sixty-five, unless sooner removed
for cause as provided by law or becomes incapacitated to discharge the duties
of the office.55
In this case, it is the President of the Philippines, as the proper disciplining
authority, who would determine whether there is a valid cause for the removal of
Rayala as NLRC Chairman. This power, however, is qualified by the phrase "for
cause as provided by law." Thus, when the President found that Rayala was
indeed guilty of disgraceful and immoral conduct, the Chief Executive did not
have unfettered discretion to impose a penalty other than the penalty provided
by law for such offense. As cited above, the imposable penalty for the first
offense of either the administrative offense of sexual harassment or for
disgraceful and immoral conduct is suspension of six (6) months and one (1) day
to one (1) year. Accordingly, it was error for the Office of the President to impose
upon Rayala the penalty of dismissal from the service, a penalty which can only
be imposed upon commission of a second offense.
Even if the OP properly considered the fact that Rayala took advantage of his
high government position, it still could not validly dismiss him from the service.
Under the Revised Uniform Rules on Administrative Cases in the Civil
Service,56 taking undue advantage of a subordinate may be considered as an
aggravating circumstance57 and where only aggravating and no mitigating
circumstances are present, the maximum penalty shall be imposed. 58Hence, the
maximum penalty that can be imposed on Rayala is suspension for one (1) year.
Rayala holds the exalted position of NLRC Chairman, with the rank equivalent to
a CA Justice. Thus, it is not unavailing that rigid standards of conduct may be
demanded of him. In Talens-Dabon v. Judge Arceo,59 this Court, in upholding the
liability of therein respondent Judge, said:
WHEREFORE, the foregoing premises considered, the October 18, 2002
Resolution of the Court of Appeals in CA-G.R. SP No. 61026
is AFFIRMED. Consequently, the petitions in G.R. Nos. 155831, 155840, and
158700 are DENIED. No pronouncement as to costs.
SO ORDERED.

The actuations of respondent are aggravated by the fact that complainant

is one of his subordinates over whom he exercises control and
supervision, he being the executive judge. He took advantage of his
position and power in order to carry out his lustful and lascivious desires.
Instead of he being in loco parentis over his subordinate employees,
respondent was the one who preyed on them, taking advantage of his
superior position.

In yet another case, this Court declared:

As a managerial employee, petitioner is bound by more exacting work

ethics. He failed to live up to his higher standard of responsibility when he
succumbed to his moral perversity. And when such moral perversity is
perpetrated against his subordinate, he provides a justifiable ground for
his dismissal for lack of trust and confidence. It is the right, nay, the duty
of every employer to protect its employees from oversexed superiors. 60

It is incumbent upon the head of office to set an example on how his employees
should conduct themselves in public office, so that they may work efficiently in a
healthy working atmosphere. Courtesy demands that he should set a good
example.61

Rayala has thrown every argument in the book in a vain effort to effect his
exoneration. He even puts Domingo’s character in question and casts doubt on
the morality of the former President who ordered, albeit erroneously, his
dismissal from the service. Unfortunately for him, these are not significant factors
in the disposition of the case. It is his character that is in question here and
sadly, the inquiry showed that he has been found wanting.

57
G.R. No. 49549 August 30, 1990
EVELYN CHUA-QUA, petitioner,
vs.
HON. JACOBO C. CLAVE, in his capacity as Presidential Executive
Assistant, and TAY TUNG HIGH SCHOOL, INC., respondents.
William C. Gunitang and Jaime Opinion for petitioner.
Laogan Law Offices for private respondent.
REGALADO, J.:
This would have been just another illegal dismissal case were it not for the
controversial and unique situation that the marriage of herein petitioner, then a
classroom teacher, to her student who was fourteen (14) years her junior, was
considered by the school authorities as sufficient basis for terminating her
services.
Private respondent Tay Tung High School, Inc. is an educational institution in
Bacolod City. Petitioner had been employed therein as a teacher since 1963 and,
in 1976 when this dispute arose, was the class adviser in the sixth grade where
one Bobby Qua was enrolled. Since it was the policy of the school to extend
remedial instructions to its students, Bobby Qua was imparted such instructions
in school by petitioner. 1 In the course thereof, the couple fell in love and on
December 24, 1975, they got married in a civil ceremony solemnized in Iloilo City
by Hon. Cornelio G. Lazaro, City Judge of Iloilo.2 Petitioner was then thirty (30)
years of age but Bobby Qua being sixteen (16) years old, consent and advice to
the marriage was given by his mother, Mrs. Concepcion Ong. 3 Their marriage was
ratified in accordance with the rites of their religion in a church wedding
solemnized by Fr. Nick Melicor at Bacolod City on January 10, 1976. 4
On February 4, 1976, private respondent filed with the sub-regional office of the
Department of Labor at Bacolod City an application for clearance to terminate the
employment of petitioner on the following ground: "For abusive and unethical
58
conduct unbecoming of a dignified school teacher and that her continued
employment is inimical to the best interest, and would downgrade the high moral
values, of the school." 5
Petitioner was placed under suspension without pay on March 12,
1976. 6 Executive Labor Arbiter Jose Y. Aguirre, Jr. of the National Labor
Relations Commission, Bacolod City, to whom the case was certified for
resolution, required the parties to submit their position papers and supporting
evidence. Affidavits 7 were submitted by private respondent to bolster its
contention that petitioner, "defying all standards of decency, recklessly took
advantage of her position as school teacher, lured a Grade VI boy under her
advisory section and 15 years her junior into an amorous relation." 8 More
specifically, private respondent raised issues on the fact that petitioner stayed
alone with Bobby Qua in the classroom after school hours when everybody had
gone home, with one door allegedly locked and the other slightly open.
On September 17, 1976, Executive Labor Arbiter Jose Y. Aguirre, Jr., without
conducting any formal hearing, rendered an "Award" in NLRC Case No. 956 in
favor of private respondent granting the clearance to terminate the employment
of petitioner. It was held therein that —
The affidavits . . . although self-serving but were never disputed by
the respondent pointed out that before the marriage of respondent
to Bobby Qua, fourteen (14) years her junior and during her
employment with petitioner, an amorous relationship existed
between them. In the absence of evidence to the contrary, the
undisputed written testimonies of several witnesses convincingly
picture the circumstances under which such amorous relationship
was manifested within the premises of the school, inside the
classroom, and within the sight of some employees. While no direct
evidences have been introduced to show that immoral acts were
committed during these times, it is however enough for a sane and
credible mind to imagine and conclude what transpired and took
place during these times. . . . 9
Petitioner, however, denied having received any copy of the affidavits referred
to. 10
On October 7, 1976, petitioner appealed to the National Labor Relations
Commission claiming denial of due process for not having been furnished copies
of the aforesaid affidavits relied on by the labor arbiter. She further contended
that there was nothing immoral, nor was it abusive and unethical conduct
unbecoming of a dignified school teacher, for a teacher to enter into lawful
wedlock with her student.11
On December 27, 1976, the National Labor Relations Commission unanimously
reversed the Labor Arbiter's decision and ordered petitioner's reinstatement with
backwages, with the following specific findings:
Affiant Maselliones deposed and said that he saw appellant and
Qua sitting on the student desk inside a classroom after classes.
The depositions of affiants Despi and Chin are of the same tenor.
No statements whatever were sworn by them that they were
eyewitnesses to immoral or scandalous acts.
xxx xxx xxx
Even if we have to strain our sense of moral values to
accommodate the conclusion of the Arbiter, we could not deduce
anything immoral or scandalous about a girl and a boy talking
inside a room after classes with lights on and with the door open.
xxx xxx xxx
Petitioner-appellee naively insisted that the clearance application
was precipitated by immoral acts which did not lend dignity to the
position of appellant. Aside from such gratuitous assertions of
immoral acts or conduct by herein appellant, no evidence to
support such claims was introduced by petitioner-appellee. We
reviewed the the sequence of events from the beginning of the
relationship between appellant Evelyn Chua and Bobby Qua up to
the date of the filing of the present application for clearance in
search of evidence that could have proved detrimental to the
image and dignity of the school but none has come to our
attention. . . . 12
59
The case was elevated by private respondent to the Minister of Labor who, on
March 30, 1977, reversed the decision of the National Labor Relations
Commission. The petitioner was, however, awarded six (6) months salary as
financial assistance. 13
On May 20, 1977, petitioner appealed the said decision to the Office of the
President of the Philippines. 14 After the corresponding exchanges, on September
1, 1978 said office, through Presidential Executive Assistant Jacobo C. Clave,
rendered its decision reversing the appealed decision. Private respondent was
ordered to reinstate petitioner to her former position without loss of seniority
rights and other privileges and with full back wages from the time she was not
allowed to work until the date of her actual reinstatement. 15
Having run the gamut of three prior adjudications of the case with alternating
reversals, one would think that this decision of public respondent wrote finis to
petitioner's calvary. However, in a resolution dated December 6, 1978, public
respondent, acting on a motion for reconsideration 16 of herein private
respondent and despite opposition thereto, 17 reconsidered and modified the
aforesaid decision, this time giving due course to the application of Tay Tung High
School, Inc. to terminate the services of petitioner as classroom teacher but
giving her separation pay equivalent to her six (6) months salary. 18
In thus reconsidering his earlier decision, public respondent reasoned out in his
manifestation/comment filed on August 14, 1979 in this Court in the present
case:
That this Office did not limit itself to the legal issues involved in the
case, but went further to view the matter from the standpoint of
policy which involves the delicate task of rearing and educating of
children whose interest must be held paramount in the school
community, and on this basis, this Office deemed it wise to uphold
the judgment and action of the school authorities in terminating
the services of a teacher whose actuations and behavior, in the
belief of the school authorities, had spawned ugly rumors that had
cast serious doubts on her integrity, a situation which was
considered by them as not healthy for a school campus, believing
that a school teacher should at all times act with utmost
 circumspection and conduct herself beyond reproach and above
suspicion; 19
In this petition for certiorari, petitioner relies on the following grounds for the
reversal of the aforesaid resolution of public respondent, viz.:
1. The dismissal or termination of petitioner's employment, despite
Tay Tung's claim to the contrary, was actually based on her
marriage with her pupil and is, therefore, illegal.
2. Petitioner's right to due process under the Constitution was
violated when the hearsay affidavits of Laddy Maselliones, Eleuterio
Despi, Pina D. Chiu, and Ong Lee Bing, were admitted and
considered in evidence without presenting the affiants as witnesses
and affording the petitioner the right to confront and cross-
examine them.
3. No sufficient proofs were adduced to show that petitioner
committed serious misconduct or breached the trust reposed on
her by her employer or committed any of the other grounds
enumerated in Article 283 (Now Article 282) of the Labor Code
which will justify the termination of her employment. 20
We first dispose of petitioner's claim that her right to due process was violated.
We do not agree. There is no denial of due process where a party was afforded
an opportunity to present his side. Also, the procedure by which issues are
resolved based on position papers, affidavits and other documentary evidence is
recognized as not violative of such right. Moreover, petitioner could have insisted
on a hearing to confront and cross-examine the affiants but she did not do so,
obviously because she was convinced that the case involves a question of law.
Besides, said affidavits were also cited and discussed by her in the proceedings
before the Ministry of Labor.
Now, on the merits. Citing its upright intention to preserve the respect of the
community toward the teachers and to strengthen the educational system,
private respondent submits that petitioner's actuations as a teacher constitute
serious misconduct, if not an immoral act, a breach of trust and confidence
60
reposed upon her and, thus, a valid and just ground to terminate her services. It
argues that as a school teacher who exercises substitute parental authority over
her pupils inside the school campus, petitioner had moral ascendancy over Bobby
Qua and, therefore, she must not abuse such authority and respect extended to
her. Furthermore, it charged petitioner with having allegedly violated the Code of
Ethics for teachers the pertinent provision of which states that a "school official or
teacher should never take advantage of his/her position to court a pupil or
student." 21
On the other hand, petitioner maintains that there was no ground to terminate
her services as there is nothing wrong with a teacher falling in love with her pupil
and, subsequently, contracting a lawful marriage with him. She argued that she
was dismissed because of her marriage with Bobby Qua This contention was
sustained in the aforesaid decision of the National Labor Relations Commission
thus:
. . . One thing, however, has not escaped our observation: That the
application for clearance was filed only after more than one month
elapsed from the date of appellant's marriage to Bobby Qua
Certainly, such belated application for clearance weakens instead of
strengthening the cause of petitioner-appellee. The alleged
immoral acts transpired before the marriage and if it is these
alleged undignified conduct that triggered the intended separation,
then why was the present application for clearance not filed at that
time when the alleged demoralizing effect was still fresh and
abrasive?22
After a painstaking perusal of the records, we are of the considered view that the
determination of the legality of the dismissal hinges on the issue of whether or
not there is substantial evidence to prove that the antecedent facts which
culminated in the marriage between petitioner and her student constitute
immorality and/or grave misconduct. To constitute immorality, the circumstances
of each particular case must be holistically considered and evaluated in the light
of prevailing norms of conduct and the applicable law. Contrary to what petitioner
had insisted on from the very start, what is before us is a factual question, the
resolution of which is better left to the trier of facts.
Considering that there was no formal hearing conducted, we are constrained to
review the factual conclusions arrived at by public respondent, and to nullify his
decision through the extraordinary writ of certiorari if the same is tainted by
absence or excess of jurisdiction or grave abuse of discretion. The findings of fact
must be supported by substantial evidence; otherwise, this Court is not bound
thereby.23
We rule that public respondent acted with grave abuse of discretion. As vividly
and forcefully observed by him in his original decision:
Indeed, the records relied upon by the Acting Secretary of Labor
(actually the records referred to are the affidavits attached as
Annexes "A" to "D" of the position paper dated August 10, 1976
filed by appellee at the arbitration proceedings) in arriving at his
decision are unbelievable and unworthy of credit, leaving many
question unanswered by a rational mind. For one thing, the
affidavits refer to certain times of the day during off school hours
when appellant and her student were found together in one of the
classrooms of the school. But the records of the case present a
ready answer: appellant was giving remedial instruction to her
student and the school was the most convenient place to serve the
purpose. What is glaring in the affidavits is the complete absence
of specific immoral acts allegedly committed by appellant and her
student. For another, and very important at that, the alleged acts
complained of invariably happened from September to December,
1975, but the disciplinenary action imposed by appellee was sought
only in February, 1976, and what is more, the affidavits were
executed only in August, 1976 and from all indications, were
prepared by appellee or its counsel. The affidavits heavily relied
upon by appellee are clearly the product of after-thought. . . . The
action pursued by appellee in dismissing appellant over one month
after her marriage, allegedly based on immoral acts committed
even much earlier, is open to basis of the action sought seriously
doubted; on the question. The basis of the action sought is
seriously doubted; on the contrary, we are more inclined to believe
that appellee had certain selfish, ulterior and undisclosed motives
known only to itself. 24
61
As earlier stated, from the outset even the labor arbiter conceded that there was
no direct evidence to show that immoral acts were committed. Nonetheless,
indulging in a patently unfair conjecture, he concluded that "it is however enough
for a sane and credible mind to imagine and conclude what transpired during
those times." 25 In reversing his decision, the National Labor Relations
Commission observed that the assertions of immoral acts or conducts are
gratuitous and that there is no direct evidence to support such claim, 26 a finding
which herein public respondent himself shared.
We are, therefore, at a loss as to how public respondent could adopt the volte-
face in the questioned resolution, which we hereby reject, despite his prior
trenchant observations hereinbefore quoted. What is revealing however, is that
the reversal of his original decision is inexplicably based on unsubstantiated
surmises and non sequiturs which he incorporated in his assailed resolution in
this wise:
. . . While admittedly, no one directly saw Evelyn Chua and Bobby
Qua doing immoral acts inside the classroom it seems obvious and
this Office is convinced that such a happening indeed transpired
within the solitude of the classrom after regular class hours. The
marriage between Evelyn Chua and Bobby Qua is the best proof
which confirms the suspicion that the two indulged in amorous
relations in that place during those times of the day. . . . 27
With the finding that there is no substantial evidence of the imputed immoral
acts, it follows that the alleged violation of the Code of Ethics governing school
teachers would have no basis. Private respondent utterly failed to show that
petitioner took advantage of her position to court her student. If the two
eventually fell in love, despite the disparity in their ages and academic levels, this
only lends substance to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal
emotion is not to be so casually equated with immorality. The deviation of the
circumstances of their marriage from the usual societal pattern cannot be
considered as a defiance of contemporary social mores.
It would seem quite obvious that the avowed policy of the school in rearing and
educating children is being unnecessarily bannered to justify the dismissal of
petitioner. This policy, however, is not at odds with and should not be capitalized
on to defeat the security of tenure granted by the Constitution to labor. In
termination cases, the burden of proving just and valid cause for dismissing an
employee rests on the employer and his failure to do so would result in a finding
that the dismissal is unjustified.

The charge against petitioner not having been substantiated, we declare her
dismissal as unwarranted and illegal. It being apparent, however, that the
relationship between petitioner and private respondent has been inevitably and
severely strained, we believe that it would neither be to the interest of the parties
nor would any prudent purpose be served by ordering her reinstatement.

WHEREFORE, the petition for certiorari is GRANTED and the resolution of public
respondent, dated December 6, 1978 is ANNULLED and SET ASIDE. Private
respondent Tay Tung High School, Inc. is hereby ORDERED to pay petitioner
backwages equivalent to three (3) years, without any deduction or qualification,
and separation pay in the amount of one (1) month for every year of service.

SO ORDERED.

62
63
 she would not resign from her employment just because she got pregnant without the be
Today is Thursday, November 08, 2018

On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain in writing why

In a letter7 dated May 31, 2003, the petitioner explained that her pregnancy out of wedlo
thus, a ground for dismissal. Further, the petitioner requested a copy of SSCW’s policy an
of Regulations for Private Schools (1992 MRPS) on the causes for termination of employm

On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a letter, 9 which, in p

To us, pre-marital sex between two consenting adults without legal impediment to marry
Republic of
Philippines.
SUPREME
Manila
Your argument that what happened to our client would set a bad example to the students
THIRD DIVISION
Considering her untarnished service for two years, dismissing her with her present condit
G.R. No. 187226 January 28, 2015
In a letter11 dated June 6, 2003, SSCW, through counsel, maintained that pre-marital sex
the 1992 MRPS and the Labor Code. That SSCW, as a Catholic institution of learning, has
CHERYLL SANTOS
Director of the Lay Apostolate and Community Outreach Directorate, a position of respons
vs.
ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO, OSB, Respondents.
On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts her counsel’s lett
DECISION
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao informed the petitioner
married, amounts to immoral conduct. She further pointed out that SSCW finds unaccepta
REYES, J.:

Thereupon, the petitioner filed a complaint for illegal dismissal with the Regional Arbitrati
Cheryll Santos Leus (petitioner) was hired by St. Scholastica's College Westgrove (SSCW), a Catholic educational institution, as a non-teaching personnel, engaged in pre-marital
dismissal. She maintained that her pregnancy out of wedlock cannot be considered as se
that has to be resolved is whether the petitioner's conduct constitutes a ground for her dismissal.
to her dismissal.
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the Decision 1 dated September 24, 2008 and Resolution
For their part, SSCW claimed that there was just cause to terminate the petitioner’s empl
28, 20073 and May 21, 20074 of the National Labor Relations Commission (NLRC)in NLRC CA No. 049222-06.
conduct, which is a ground for the dismissal of an employee under the 1992 MRPS.
The Facts
They pointed out that SSCW is a Catholic educational institution, which caters exclusively
a Catholic educational institution, should have strived to maintain the honor, dignity and r
SSCW is a catholic and sectarian educational institution in Silang, Cavite. In May 2001, SSCW hired the petitioner as an Assistant to SSCW’s Director of the Lay Apostolate and Co

Sometime in 2003, the petitioner and her boyfriend conceived a child out of wedlock. When SSCW learned of the petitioner’s pregnancy, Sr. Edna Quiambao (Sr. Quiambao), SS
64
The Ruling of the Labor Arbiter xxxx

On February 28, 2006, the Labor Arbiter (LA) rendered a Decision, 16 in NLRC Case No. 6-17657-03-C
Petitioner contends
whichthat
dismissed
her pre-marital
the complaint
sexual
filed
relations
by the petitioner.
with her boyfriend
The LA found
and her
thatprt
conduct." The LA pointed out that, as an employee of a Catholic educational institution, the
community.
petitioner is expected to live up to the Catholic values taught by SSCW to its students.

Further, a deep analysis of the facts would lead us to disagree with the complainant that Weshe
arewas
notdismissed
persuaded. simply
Petitioner’s
becausepregnancy
she violate[d]
prior to
a Catholic
marriage[teaching].
is scandalous
It should
in itself
notgivb
[consideration] the nature of her work and the nature of her employer-school. For us, it is
the
notinstitution,
just an ordinary
petitioner’sprivate
violation. It and
was public
committed
life could
by the
not
complainant
be separated.in an
Herenvironment
admitted prw
marriage.
The LA further held that teachers and school employees, both in their official and personal conduct, must display exemplary behavior and act in a manner that is beyond reproach
Finally, petitioner’s dismissal is a valid exercise of the employer-school’s management pre
The petitioner appealed to the NLRC, insisting that there was no valid ground for the termination of her employment. She maintained that her pregnancy out of wedlock canno
character. She asserted that SSCW did not present any evidence to establish that her pregnancy
The petitioner
out of moved
wedlockfor
indeed
reconsideration
eroded the26moral
but it principles
was deniedthat
by itthe
teaches
CA in its Resolution
students. 1827

The Ruling of the NLRC Hence, the instant petition.

On February 28, 2007, the NLRC issued a Resolution,19 which affirmed the LA Decision dated Issues
February 28, 2006. The NLRC pointed out that the termination of the employment of
just cause for dismissal, in addition to the grounds for termination of employment provided for under Article 282 of the Labor Code. The NLRC held that the petitioner’s pregnan
had a valid reason to terminate her employment. Essentially, the issues set forth by the petitioner for this Court’s decision are the followi
second, whether the petitioner’spregnancy out of wedlock constitutes a valid ground to te
The petitioner sought reconsideration20 of the Resolution dated February 28, 2007 but it was denied by the NLRC in its Resolution 21 dated May 21, 2007.
The Ruling of the Court
Unperturbed, the petitioner filed a petition22 for certiorari with the CA, alleging that the NLRC gravely abused its discretion in ruling that there was a valid ground for her dismissa
that its students were indeed gravely scandalized by her pregnancy out of wedlock. She likewise
The Court
asserted
grants that
the petition.
the NLRC erred in applying Section 94(e) of the 1992 MRPS.

The Ruling of the CA First Issue: Applicability of the 1992 MRPS

On September 24, 2008, the CA rendered the herein assailed Decision, 23 which denied the Thepetition
petitioner
for certiorari
contends filed
that by
thethe
CA,petitioner.
in ruling that
The there
CA held
wasthat
a valid
it is ground
the provisions
to dismiss
of the
he
schools, explaining that: 232) or the "Education Act of 1982." That there is no provision in BP 232, which provides
"widened the scope and coverage" of BP 232.
It is a principle of statutory construction that where there are two statutes that apply to a particular case, that which was specially intended for the said case must prevail. Petition
Catholic Church. Accordingly, the Manual of Regulations for Private Schools followed by itThemustCourt
prevail
does
over
notthe
agree.
Labor Code, a general statute. The Manual constitutes the private

The CA further held that the petitioner’s dismissal was a valid exercise of SSCW’s management prerogative
The Court tothe
notes that discipline
argumentandagainst
impose the
penalties
validityonoferring employees
the 1992 pursuant toits
MRPS, specifically Se
"disgraceful and immoral conduct" and, thus, a ground for dismissal under Section 94(e) MRPS.
of the 1992 MRPS. The CA likewise opined that the petitioner’s pregnancy out of wedlock

Under Section 94 (e) of the [MRPS], and even under Article 282 (serious misconduct) of the
"It is
Labor
well Code,
established
"disgraceful
that issues
and immoral
raised for
conduct"
the firstistime
a basis
on appeal
for termination
and not raised
of employme
in the

65
for the first time on appeal. To consider the alleged facts and arguments belatedly raised arbitrarily.
would amount to trampling on the basic principles of fair play, justice, and due process."

In any case, even if the Court were to disregard the petitioner’s belated claim of the invalidity
The CA of and
the 1992
the labor
MRPS,
tribunals
the Court
affirmed
still finds
the validity
the same of untenable.
the petitioner’s dismissal pursuant

The 1992 MRPS, the regulation in force at the time of the instant controversy, was issued Sec.
by94.
theCauses
Secretary
of Terminating
of EducationEmployment
pursuant to–BP In 232.
addition
Section
to the
70just
29
ofcauses
BP 232enumerated
vests the S
57 specifically empowers the Department of Education to promulgate rules and regulations necessary for the administration, supervision and regulation of the educational system
30

xxxx
The qualifications of teaching and non-teaching personnel of private schools, as well as the causes for the termination of their employment, are an integral aspect of the educa
qualified, but competent and efficient as well goes hand in hand with the declared objective of BP 232 –orestablishing
e. Disgraceful and maintaining relevant quality education.31 It is thus within
immoral conduct;
private schools based on their incompetence, inefficiency, or some other disqualification.
xxxx
Moreover, Section 69 of BP 232 specifically authorizes the Secretary of Education to "prescribe and impose such administrative sanction as he may deem reasonable and appr
schools.32 Accordingly, contrary to the petitioner’s claim, the Court sees no reason to invalidate thetribunals
The labor provisions of the 1992
concluded thatMRPS, specificallypregnancy
the petitioner’s Section 94out thereof. Secondper
of wedlock, Issue:
se, isVa"
the circumstances surrounding the same.
The validity of the petitioner’s dismissal hinges on the determination of whether pregnancy out of wedlock by an employee of a catholic educational institution is a cause for the te
However, the Court finds no substantial evidence to support the aforementioned conclusio
In resolving the foregoing question,the Court will assess the matter from a strictly neutral establish
and secular
that pre-marital
point of viewsexual
– the
relations
relationship
and, consequently,
between SSCWpregnancy
as employeroutof
and wedlock,
the petita
cited for the petitioner’s dismissal, i.e., pre-marital sexual relations and, consequently, pregnancy outof wedlock, will be assessed as to whether the same constitutes a valid groun
The totality
The standard surrounding
of review the
petition from be the disgraceful
labor cases. assessed
norms of conduct.
In a petition for review under Rule 45 of the Rules of Court, such as the instant petition, where the CA’s disposition in a labor case is sought to be calibrated, the Court’s review is
ruled upon was presented to it; the Court has to examine the CA decision from the prismIn of Chua-Qua
whether itv.correctly
Clave,37determined
the Court stressed
the presence
that to
orconstitute
absence ofimmorality,
grave abuse theofcircumstanc
discretion i
se that determines whether the same is disgraceful or immoral, but the conduct that is ge
The phrase "grave abuse of discretion" is well-defined in the Court’s jurisprudence. It exists
evidence
wheremust
an act
be of
presented,
a court orwhich
tribunal
would
is performed
establish that
witha aparticular
capriciousconduct,
or whimsical
viewedexerc
in lig
include an inquiry into the correctness of the evaluation of evidence, which was the basis of the labor agency in reaching its conclusion.35
Thus, the determination of whether a conduct is disgraceful or immoral involves a two-st
Nevertheless, while a certiorari proceeding does not strictly include an inquiry as to the correctness
considers moral
of the
andevaluation
respectable.
of evidence (that was the basis of the labor tribunals in det
evidence. Indeed, when there is a showing that the findings or conclusions, drawn from the same pieces of evidence, were arrived at arbitrarily or in disregard of the evidence o
assailed decision or resolution, made a factual finding not supported by substantial evidence.
That Athe
decision
petitioner
thatwas
is not
employed
supportedby by
a Catholic
substantial
educational
evidenceinstitution
is definitely
pera se
decision
does nottainte
ab
with the prevailing norms of conduct.
The labor
conclusions Public that and
pregnancy is determine a the
immoral conduct" were

66
conduct, not religious morality. In this case, it was not disputed that, like respondent, the father of her child was unmarri

However, determining what the prevailing norms of conduct are considered disgraceful or Both
immoral
Estrada
is not
andanRadamare
easy task. administrative
An individual’s cases
perception
againstof employees
what is moral
in theorcivil
respectable
service.
ratiocination in Estrada v. Escritor is instructive.
39
immoral as would constitute a ground for dismissal. More importantly, as in the said adm
depend on him live.45
In Estrada, an administrative case against a court interpreter charged with disgraceful and immoral conduct, the Court stressed that in determining whether a particular condu
morality, on the other, should be kept in mind.40 That the distinction between public and It secular
bears morality
stressingand
that religious
the right
morality
of an employee
is importantto security
becauseofthetenure
jurisdiction
is protected
of thebyCourt
the Ce
necessarily pertains to public and secular morality and not religious morality. Thus, the p
The morality referred to in the law is public and necessarily secular, not religiousx x x. "Religious
tobe considered
teachings
as disgraceful
as expressedor immoral,
in public itdebate
must bemay "‘detrimental
influence the (orcivil
dangerous)
public order
to thos
bu
beliefs in formulating public policies and morals, the resulting policies and morals would require conformity to what some might regard as religious programs or agenda.The no
religion," anathema to religious freedom. Likewise, if government based its actions uponThus, religious
in Santos
beliefs,
v. itNLRC,
would46
tacitly
the Courtapprove
upheld or the
endorse
dismissal
that of
belief
a teacher
and thereby
who had alsoantacitl
ext
religious freedom for all its citizens, or even make it appear that those whose beliefs are disgraceful
disapprovedandare
immoral
second-class
conductcitizens.
is an afront
Expansive
to the sanctity
religiousoffreedom
marriage, therefore
which isrequires
a basic
neutrality.
We cannot overemphasize that having an extra-marital affair is an afront to the sanctity
In other words, government action, including its proscription of immorality as expressed our in criminal
laws cherish
law like
theconcubinage,
validity of marriage
must have
and aunity
secular
of the
purpose.
family.That
Our laws,
is, theingovernment
implementinp
human society" and not because the conduct is proscribed by the beliefs of one religion or the other. Although admittedly, mo ral judgments based on religion might have a comp
law. After all, they might also be adherents of a religion and thus have religious opinions The
and moral codes with a compelling influence on them; the human mind endeavors petitioner’s
to reg
be religious or Kantian or Aquinian or utilitarian in its deepest roots, but it must have an articulable
wedlock and discernible secular purpose and justification to pass is scrutiny of the religion
immoral conduct
Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it pertainsfather to public and secular morality; it refers to those conducts of which are proscribed b
Radam,43 an administrative case involving a court utility worker likewise charged with disgraceful
impediment andtoimmoral
marry eachconduct,
other.
applying the doctrines laid down in Estrada, the Court held

For a particular conduct to constitute "disgraceful and immoral" behavior under civil service
In stark
laws,
contrast
it musttobeSantos,
regulated
the on
Court
account
does not
of the
findconcerns
any circumstance
of public and
in this
secular
case moralit
which w
values not convincingly demonstrated to have been recognized in the realm of public policy
Indeed,
expressed
even prior
in thetoConstitution
her dismissal,
andthe
thepetitioner
laws. At the
married
sameher
time,
boyfriend,
the constitutionally
the father ofgua
he
the majority. situation contravene any fundamental state policy enshrined in the Constitution.

Under these tests, two things may be concluded from the fact that an unmarried woman Admittedly,
gives birth out
theofpetitioner
wedlock:is employed in an educational institution where the teachings
doctrines of the Catholic Church. However, viewed against the prevailing norms of condu
(1) if the father of the child is himself unmarried, the woman is not ordinarily
within
administratively
the contemplation
liableoffor
the
disgraceful
law. and immoral conduct.It may be a not-so-ideal s
which penalizes an unmarried mother under those circumstances by reason of her sexual conduct or proscribes the consensual sexual activity between two unma
accommodates various belief systems irrespective of dogmatic origins. To stress, pre-marital sexual relations between two consenting adults who have no impe
1992 MRPS.
(2) if the father of the child born out of wedlock is himself married to a woman other thanthe mother, then there is a cause for administrative sanction against e
married person. The sanctity of marriage is constitutionally recognized and Accordingly,
likewise affirmed
the labor
by tribunals
our statuteserred
as in
a special
upholding
contract
the validity
of permanent
of the petitioner’s
union. Accordingl
dismiss
fidelity. considered disgraceful or immoral in view of the prevailing norms of conduct. In this rega

67
The labor tribunals’ finding that the petitioner’s pregnancy out of wedlock despite the absence
The Court
of substantial
does not agree.
evidence is not only arbitrary, but a grave abuse of discretion, which s

There is The Court has held that "management

no is free to regulate, according to its own discretion
prove that work supervision, lay off of workers and discipline, dismissalthe
and recall of workers. The e
out of manner.53 wedlock
to SSCW and its students.
SSCW, as employer, undeniably has the right to discipline its employees and, if need be,
SSCW claimed that the petitioner was primarily dismissed because her pregnancy out of wedlock
have admitted
causedthat
grave
SSCW,
scandal
at the
to SSCW
time ofand
theits
controversy,
students. That
doesthe
notscandal
have any
brought
policyabout
or rul
and arbitrary and, thus, not a valid exercise of management prerogative.
In this particular case, an "objective" and "rational evaluation" of the facts and circumstances obtaining in this case would lead us to focus our attention x x x on the impact of th
respondent [C]atholic school to their young lady students.48 (Emphasis in the original) In sum, the Court finds that the petitioner was illegally dismissed as there was no just ca
in light of the prevailing norms of conduct, is considered disgraceful or immoral. The lab
On the other hand, the NLRC opined that: committed reversible error in upholding the validity of the petitioner’s dismissal, failing to

In the instant case, when the complainant-appellant was already conceiving a child even Thebefore she got married, such is considered a shameful and scandalous behavior, petitionerinim
teaching the young girls. Thus, when the respondent-appellee school terminated complainant-appellant’s
separation services, it was a valid exercise of its management pay,prerogative. Whet
uphold the teachings of the Catholic Church on pre-marital sex and that the complainant-appellant
reinstatement, as an employee of the school was expected to abide by this basic principle
engaged in pre-marital sex which the respondent-appellee school denounces as the sameattorney’s
is opposed to the teachings and doctrines it espouses. 49fees, (Emphasis ours)
exemplary damages.
Contrary to the labor tribunals’ declarations, the Court finds that SSCW failed to adduce substantial evidence to prove that the petitioner’s indiscretion indeed caused grave scan
prove that the petitioner’s conduct indeed adversely affected SSCW’s integrity in teaching Having established
the moral that which
doctrines, the petitioner
it standswasfor.illegally dismissed,
The petitioner the aCourt
is only now determines
non-teaching person
grave scandal, as claimed by SSCW, as to warranther dismissal. Articles 28355 and 28456 of the Labor Code, separation pay is, however, granted when rei
latter recourse is no longer practical or in the best interest of the parties.57
Settled is the rule that in termination cases, the burden of proving that the dismissal of the employees was for a valid and authorized cause rests on the employer. It is incumben
failure to discharge that duty would mean that the dismissal is not justified and therefore In Divine Word
illegal.50 High School
"Substantial v. NLRC,
evidence 58
thethan
is more Courta ordered the employer
mere scintilla Catholic
of evidence. school su
It means to
mightconceivably opine otherwise."51 school community."59

Indubitably, bare allegations do not amount to substantial evidence. Considering that theInrespondents
view of the failed
particular
to adduce
circumstances
substantial
of this
evidence
case, to
it would
prove be
their
more
asserted
prudent
cause
to direct
for the
SS
findings, which were arrived at sans any substantial evidence, amounts to a grave abuse Consequently,
of discretion, which
the Court
the CA
awards
should
separation
have rectified.
pay to"Security
the petitioner
of tenure
equivalent
is a right
to one
which
(1)may
mo

The petitioner’s Also, "employees who are illegally dismissed

dismissal
are entitled to full backwages, inclusive of a
valid the backwages
exercise
shall be computed from the time of their illegal termination up to the final
management prerogative.
Nevertheless, the petitioner is not entitled to moral and exemplary damages. "A dismis
The CA be labored the management prerogative of SSCW to discipline its employees. TheExemplary
CA opined damages
that the petitioner’s
may be awarded
dismissal
if the
is dismissal
a valid exercise
is effected
of management
in a wanton,prerogative
oppressive to

68
"Bad faith, under the law, does not simply connote bad judgment or negligence.1âwphi1 It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, o

"It must be noted that the burden of proving bad faith rests on the one alleging it" 63 since basic is the principle that good faith is presumed and he who alleges bad faith has the d

The records of this case are bereft of any clear and convincing evidence showing that the respondents acted in bad faith or in a wanton or fraudulent manner in dismissing the p
alone, it does not establish bad faith to entitle the dismissed employee to moral damages. The award of moral and exemplary damages cannot be justified solely upon the premise

However, the petitioner is entitled to attorney’s fees in the amount of 10% of the total monetary award pursuant to Article 11167 of the Labor Code. "It is settled that where an
morally justifiable."68

Finally, legal interest shall be imposed on the monetary awards herein granted at the rate of six percent (6%) per annumfrom the finality of this judgment until fully paid.69

WHEREFORE, in consideration of the foregoing disquisitions, the petition is GRANTED. The Decision dated September 24, 2008 and Resolution dated March 2, 2009 of the Court of

The respondent, St. Scholastica’s College Westgrove, is hereby declared guilty of illegal dismissal and is hereby ORDERED to pay the petitioner, Cheryll Santos Leus, the following
six (6) months considered as one (1) whole year from the time of her dismissal up to the finality of this Decision; (b) full backwages from the time of her illegal dismissal up to th
herein granted shall earn legal interest at the rate of six percent (6%) per annumfrom the date of the finality of this Decision untilfully paid. The case is REMANDED to the Labor A

SO ORDERED.

69
G.R. No. 168081 October 17, 2008
ARMANDO G. YRASUEGUI, petitioners,
vs.
PHILIPPINE AIRLINES, INC., respondents.
DECISION
REYES, R.T., J.:
THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline
company.
He is now before this Court via a petition for review on certiorari claiming that he
was illegally dismissed. To buttress his stance, he argues that (1) his dismissal
does not fall under 282(e) of the Labor Code; (2) continuing adherence to the
weight standards of the company is not a bona fide occupational qualification;
and (3) he was discriminated against because other overweight employees were
promoted instead of being disciplined.
After a meticulous consideration of all arguments pro and con, We uphold the
legality of dismissal. Separation pay, however, should be awarded in favor of the
employee as an act of social justice or based on equity. This is so because his
dismissal is not for serious misconduct. Neither is it reflective of his moral
character.
The Facts
Petitioner Armando G. Yrasuegui was a former international flight steward of
Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (5’8") with a
large body frame. The proper weight for a man of his height and body structure is
from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual 1 of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him
to go on an extended vacation leave from December 29, 1984 to March 4, 1985
70
to address his weight concerns. Apparently, petitioner failed to meet the
company’s weight standards, prompting another leave without pay from March 5,
1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But
petitioner’s weight problem recurred. He again went on leave without pay from
October 17, 1988 to February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal
weight. In line with company policy, he was removed from flight duty effective
May 6, 1989 to July 3, 1989. He was formally requested to trim down to his ideal
weight and report for weight checks on several dates. He was also told that he
may avail of the services of the company physician should he wish to do so. He
was advised that his case will be evaluated on July 3, 1989.2
On February 25, 1989, petitioner underwent weight check. It was discovered that
he gained, instead of losing, weight. He was overweight at 215 pounds, which is
49 pounds beyond the limit. Consequently, his off-duty status was retained.
On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited
petitioner at his residence to check on the progress of his effort to lose weight.
Petitioner weighed 217 pounds, gaining 2 pounds from his previous weight. After
the visit, petitioner made a commitment3 to reduce weight in a letter addressed
to Cabin Crew Group Manager Augusto Barrios. The letter, in full, reads:
Dear Sir:
I would like to guaranty my commitment towards a weight loss from 217
pounds to 200 pounds from today until 31 Dec. 1989.
From thereon, I promise to continue reducing at a reasonable percentage until
such time that my ideal weight is achieved.
Likewise, I promise to personally report to your office at the designated time
schedule you will set for my weight check.
Respectfully Yours,
F/S Armando Yrasuegui4
Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the PAL
decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every two
weeks for weight checks.
Petitioner failed to report for weight checks. Despite that, he was given one more
month to comply with the weight requirement. As usual, he was asked to report
for weight check on different dates. He was reminded that his grounding would
continue pending satisfactory compliance with the weight standards.5
Again, petitioner failed to report for weight checks, although he was seen
submitting his passport for processing at the PAL Staff Service Division.
On April 17, 1990, petitioner was formally warned that a repeated refusal to
report for weight check would be dealt with accordingly. He was given another
set of weight check dates.6 Again, petitioner ignored the directive and did not
report for weight checks. On June 26, 1990, petitioner was required to explain his
refusal to undergo weight checks.7
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds.
Clearly, he was still way over his ideal weight of 166 pounds.
From then on, nothing was heard from petitioner until he followed up his case
requesting for leniency on the latter part of 1992. He weighed at 219 pounds on
August 20, 1992 and 205 pounds on November 5, 1992.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative
Charge for violation of company standards on weight requirements. He was given
ten (10) days from receipt of the charge within which to file his answer and
submit controverting evidence.8
On December 7, 1992, petitioner submitted his Answer. Notably, he did not deny
9
being overweight. What he claimed, instead, is that his violation, if any, had
already been condoned by PAL since "no action has been taken by the company"
71
regarding his case "since 1988." He also claimed that PAL discriminated against
him because "the company has not been fair in treating the cabin crew members
who are similarly situated."
On December 8, 1992, a clarificatory hearing was held where petitioner
manifested that he was undergoing a weight reduction program to lose at least
two (2) pounds per week so as to attain his ideal weight.10
On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, "and considering the utmost leniency"
extended to him "which spanned a period covering a total of almost five (5)
years," his services were considered terminated "effective immediately." 11
His motion for reconsideration having been denied,12 petitioner filed a complaint
for illegal dismissal against PAL.
Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled 13 that petitioner
was illegally dismissed. The dispositive part of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring
the complainant’s dismissal illegal, and ordering the respondent to reinstate him
to his former position or substantially equivalent one, and to pay him:
a. Backwages of Php10,500.00 per month from his dismissal on June 15, 1993
until reinstated, which for purposes of appeal is hereby set from June 15, 1993
up to August 15, 1998 at ₱651,000.00;
b. Attorney’s fees of five percent (5%) of the total award.
SO ORDERED.14
The Labor Arbiter held that the weight standards of PAL are reasonable in view of
the nature of the job of petitioner. 15 However, the weight standards need not be
complied with under pain of dismissal since his weight did not hamper the
performance of his duties.16 Assuming that it did, petitioner could be transferred
to other positions where his weight would not be a negative factor. 17 Notably,
other overweight employees, i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were
promoted instead of being disciplined.18
Both parties appealed to the National Labor Relations Commission (NLRC).19
On October 8, 1999, the Labor Arbiter issued a writ of execution directing the
reinstatement of petitioner without loss of seniority rights and other benefits.20
On February 1, 2000, the Labor Arbiter denied21 the Motion to Quash Writ of
Execution22 of PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC. 23
On June 23, 2000, the NLRC rendered judgment24 in the following tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18
November 1998 as modified by our findings herein, is hereby AFFIRMED and
that part of the dispositive portion of said decision concerning complainant’s
entitlement to backwages shall be deemed to refer to complainant’s entitlement
to his full backwages, inclusive of allowances and to his other benefits or their
monetary equivalent instead of simply backwages, from date of dismissal until his
actual reinstatement or finality hereof. Respondent is enjoined to manifests (sic)
its choice of the form of the reinstatement of complainant, whether physical or
through payroll within ten (10) days from notice failing which, the same shall be
deemed as complainant’s reinstatement through payroll and execution in case of
non-payment shall accordingly be issued by the Arbiter. Both appeals of
respondent thus, are DISMISSED for utter lack of merit.25
According to the NLRC, "obesity, or the tendency to gain weight uncontrollably
regardless of the amount of food intake, is a disease in itself." 26 As a
consequence, there can be no intentional defiance or serious misconduct by
petitioner to the lawful order of PAL for him to lose weight.27
Like the Labor Arbiter, the NLRC found the weight standards of PAL to be
reasonable. However, it found as unnecessary the Labor Arbiter holding that
petitioner was not remiss in the performance of his duties as flight steward
72
despite being overweight. According to the NLRC, the Labor Arbiter should have
limited himself to the issue of whether the failure of petitioner to attain his ideal
weight constituted willful defiance of the weight standards of PAL. 28
PAL moved for reconsideration to no avail.29 Thus, PAL elevated the matter to the
Court of Appeals (CA) via a petition for certiorari under Rule 65 of the 1997 Rules
of Civil Procedure.30
By Decision dated August 31, 2004, the CA reversed 31 the NLRC:
WHEREFORE, premises considered, we hereby GRANT the petition. The assailed
NLRC decision is declared NULL and VOID and is hereby SET ASIDE. The private
respondent’s complaint is hereby DISMISSED. No costs.
SO ORDERED.32
The CA opined that there was grave abuse of discretion on the part of the NLRC
because it "looked at wrong and irrelevant considerations" 33 in evaluating the
evidence of the parties. Contrary to the NLRC ruling, the weight standards of PAL
are meant to be a continuing qualification for an employee’s position.34 The
failure to adhere to the weight standards is an analogous cause for the dismissal
of an employee under Article 282(e) of the Labor Code in relation to Article
282(a). It is not willful disobedience as the NLRC seemed to suggest. 35 Said the
CA, "the element of willfulness that the NLRC decision cites is an irrelevant
consideration in arriving at a conclusion on whether the dismissal is legally
proper."36 In other words, "the relevant question to ask is not one of willfulness
but one of reasonableness of the standard and whether or not the employee
qualifies or continues to qualify under this standard." 37
Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of
PAL are reasonable.38 Thus, petitioner was legally dismissed because he
repeatedly failed to meet the prescribed weight standards. 39 It is obvious that the
issue of discrimination was only invoked by petitioner for purposes of escaping
the result of his dismissal for being overweight.40
On May 10, 2005, the CA denied petitioner’s motion for
reconsideration. Elaborating on its earlier ruling, the CA held that the weight
41
standards of PAL are a bona fide occupational qualification which, in case of
violation, "justifies an employee’s separation from the service."42
Issues
In this Rule 45 petition for review, the following issues are posed for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER’S OBESITY CAN BE A GROUND FOR DISMISSAL UNDER
PARAGRAPH (e) OF ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER’S DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE
"BONA FIDE OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE";
III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT PETITIONER WAS NOT UNDULY DISCRIMINATED AGAINST WHEN HE WAS
DISMISSED WHILE OTHER OVERWEIGHT CABIN ATTENDANTS WERE EITHER
GIVEN FLYING DUTIES OR PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED
ASIDE PETITIONER’S CLAIMS FOR REINSTATEMENT [AND] WAGES ALLEGEDLY
FOR BEING MOOT AND ACADEMIC.43 (Underscoring supplied)
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article
282(e) 44 of the Labor Code.
73
A reading of the weight standards of PAL would lead to no other conclusion than
that they constitute a continuing qualification of an employee in order to keep the
job. Tersely put, an employee may be dismissed the moment he is unable to
comply with his ideal weight as prescribed by the weight standards. The dismissal
of the employee would thus fall under Article 282(e) of the Labor Code. As
explained by the CA:
x x x [T]he standards violated in this case were not mere "orders" of the
employer; they were the "prescribed weights" that a cabin crew must maintain in
order to qualify for and keep his or her position in the company. In other
words, they were standards that establish continuing qualifications for an
employee’s position. In this sense, the failure to maintain these standards does
not fall under Article 282(a) whose express terms require the element of
willfulness in order to be a ground for dismissal. The failure to meet the
employer’s qualifying standards is in fact a ground that does not squarely fall
under grounds (a) to (d) and is therefore one that falls under Article 282(e) – the
"other causes analogous to the foregoing."
By its nature, these "qualifying standards" are norms that apply prior to and
after an employee is hired. They apply prior to employment because these are
the standards a job applicant must initially meet in order to be hired. They
apply after hiring because an employee must continue to meet these standards
while on the job in order to keep his job. Under this perspective, a violation is not
one of the faults for which an employee can be dismissed pursuant to pars. (a) to
(d) of Article 282; the employee can be dismissed simply because he no longer
"qualifies" for his job irrespective of whether or not the failure to qualify was
willful or intentional. x x x45
Petitioner, though, advances a very interesting argument. He claims that obesity
is a "physical abnormality and/or illness."46 Relying on Nadura v. Benguet
Consolidated, Inc.,47 he says his dismissal is illegal:
Conscious of the fact that Nadura’s case cannot be made to fall squarely within
the specific causes enumerated in subparagraphs 1(a) to (e), Benguet invokes
the provisions of subparagraph 1(f) and says that Nadura’s illness – occasional
attacks of asthma – is a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to
convince anyone that, as the trial court said, "illness cannot be included as an
analogous cause by any stretch of imagination."
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the
others expressly enumerated in the law are due to the voluntary and/or willful act
of the employee. How Nadura’s illness could be considered as "analogous" to any
of them is beyond our understanding, there being no claim or pretense that the
same was contracted through his own voluntary act.48
The reliance on Nadura is off-tangent. The factual milieu in Nadura is
substantially different from the case at bar. First, Nadura was not decided under
the Labor Code. The law applied in that case was Republic Act (RA) No.
1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale
there cannot apply here. Third, in Nadura, the employee who was a miner, was
laid off from work because of illness, i.e., asthma. Here, petitioner was dismissed
for his failure to meet the weight standards of PAL. He was not dismissed due to
illness. Fourth, the issue in Nadura is whether or not the dismissed employee is
entitled to separation pay and damages. Here, the issue centers on the propriety
of the dismissal of petitioner for his failure to meet the weight standards of
PAL. Fifth, in Nadura, the employee was not accorded due process. Here,
petitioner was accorded utmost leniency. He was given more than four (4) years
to comply with the weight standards of PAL.
In the case at bar, the evidence on record militates against petitioner’s claims
that obesity is a disease. That he was able to reduce his weight from 1984 to
1992 clearly shows that it is possible for him to lose weight given the proper
attitude, determination, and self-discipline. Indeed, during the clarificatory
hearing on December 8, 1992, petitioner himself claimed that "[t]he issue is
could I bring my weight down to ideal weight which is 172, then the answer is
yes. I can do it now."49
True, petitioner claims that reducing weight is costing him "a lot of
expenses."50 However, petitioner has only himself to blame. He could have easily
availed the assistance of the company physician, per the advice of PAL. 51 He
chose to ignore the suggestion. In fact, he repeatedly failed to report when
74
required to undergo weight checks, without offering a valid explanation. Thus, his
fluctuating weight indicates absence of willpower rather than an illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental
Health, Retardation and Hospitals,52decided by the United States Court of Appeals
(First Circuit). In that case, Cook worked from 1978 to 1980 and from 1981 to
1986 as an institutional attendant for the mentally retarded at the Ladd Center
that was being operated by respondent. She twice resigned voluntarily with an
unblemished record. Even respondent admitted that her performance met the
Center’s legitimate expectations. In 1988, Cook re-applied for a similar position.
At that time, "she stood 5’2" tall and weighed over 320 pounds." Respondent
claimed that the morbid obesity of plaintiff compromised her ability to evacuate
patients in case of emergency and it also put her at greater risk of serious
diseases.
Cook contended that the action of respondent amounted to discrimination on the
basis of a handicap. This was in direct violation of Section 504(a) of the
Rehabilitation Act of 1973,53 which incorporates the remedies contained in Title VI
of the Civil Rights Act of 1964. Respondent claimed, however, that morbid
obesity could never constitute a handicap within the purview of the Rehabilitation
Act. Among others, obesity is a mutable condition, thus plaintiff could simply lose
weight and rid herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a disability under
the Rehabilitation Act and that respondent discriminated against Cook based on
"perceived" disability. The evidence included expert testimony that morbid
obesity is a physiological disorder. It involves a dysfunction of both the metabolic
system and the neurological appetite – suppressing signal system, which is
capable of causing adverse effects within the musculoskeletal, respiratory, and
cardiovascular systems. Notably, the Court stated that "mutability is relevant
only in determining the substantiality of the limitation flowing from a given
impairment," thus "mutability only precludes those conditions that an individual
can easily and quickly reverse by behavioral alteration."
Unlike Cook, however, petitioner is not morbidly obese. In the words of the
District Court for the District of Rhode Island, Cook was sometime before 1978
"at least one hundred pounds more than what is considered appropriate of her
height." According to the Circuit Judge, Cook weighed "over 320 pounds" in 1988.
Clearly, that is not the case here. At his heaviest, petitioner was only less than 50
pounds over his ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of the
Labor Code that justifies his dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary. As the CA correctly puts it,
"[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a recognized
just cause, is considered voluntary although it lacks the element of intent found
in Article 282(a), (c), and (d)."54
II. The dismissal of petitioner can be predicated on the bona fide occupational
qualification defense.
Employment in particular jobs may not be limited to persons of a particular sex,
religion, or national origin unless the employer can show that sex, religion, or
national origin is an actual qualification for performing the job. The qualification is
called a bona fide occupational qualification (BFOQ). 55 In the United States, there
are a few federal and many state job discrimination laws that contain an
exception allowing an employer to engage in an otherwise unlawful form of
prohibited discrimination when the action is based on a BFOQ necessary to the
normal operation of a business or enterprise.56
Petitioner contends that BFOQ is a statutory defense. It does not exist if there is
no statute providing for it.57 Further, there is no existing BFOQ statute that could
justify his dismissal.58
Both arguments must fail.
First, the Constitution,59 the Labor Code,60 and RA No. 727761 or the Magna Carta
for Disabled Persons62 contain provisions similar to BFOQ.
75
Second, in British Columbia Public Service Employee Commission (BSPSERC) v.
The British Columbia Government and Service Employee’s Union (BCGSEU), 63 the
Supreme Court of Canada adopted the so-called "Meiorin Test" in determining
whether an employment policy is justified. Under this test, (1) the employer must
show that it adopted the standard for a purpose rationally connected to the
performance of the job;64 (2) the employer must establish that the standard is
reasonably necessary65 to the accomplishment of that work-related purpose; and
(3) the employer must establish that the standard is reasonably necessary in
order to accomplish the legitimate work-related purpose. Similarly, in Star Paper
Corporation v. Simbol,66 this Court held that in order to justify a BFOQ, the
employer must prove that (1) the employment qualification is reasonably related
to the essential operation of the job involved; and (2) that there is factual basis
for believing that all or substantially all persons meeting the qualification would
be unable to properly perform the duties of the job.67
In short, the test of reasonableness of the company policy is used because it is
parallel to BFOQ.68 BFOQ is valid "provided it reflects an inherent quality
reasonably necessary for satisfactory job performance." 69
In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines,
Inc.,70 the Court did not hesitate to pass upon the validity of a company policy
which prohibits its employees from marrying employees of a rival company. It
was held that the company policy is reasonable considering that its purpose is the
protection of the interests of the company against possible competitor infiltration
on its trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be applied if it has no
supporting statute. Too, the Labor Arbiter,71 NLRC,72 and CA73 are one in holding
that the weight standards of PAL are reasonable. A common carrier, from the
nature of its business and for reasons of public policy, is bound to observe
extraordinary diligence for the safety of the passengers it transports. 74 It is
bound to carry its passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard for
all the circumstances.75
The law leaves no room for mistake or oversight on the part of a common carrier.
Thus, it is only logical to hold that the weight standards of PAL show its effort to
comply with the exacting obligations imposed upon it by law by virtue of being a
common carrier.
The business of PAL is air transportation. As such, it has committed itself to
safely transport its passengers. In order to achieve this, it must necessarily rely
on its employees, most particularly the cabin flight deck crew who are on board
the aircraft. The weight standards of PAL should be viewed as imposing strict
norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin
attendants must maintain agility at all times in order to inspire passenger
confidence on their ability to care for the passengers when something goes
wrong. It is not farfetched to say that airline companies, just like all common
carriers, thrive due to public confidence on their safety records. People, especially
the riding public, expect no less than that airline companies transport their
passengers to their respective destinations safely and soundly. A lesser
performance is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or
attending to the whims and caprices of the passengers. The most important
activity of the cabin crew is to care for the safety of passengers and the
evacuation of the aircraft when an emergency occurs. Passenger safety goes to
the core of the job of a cabin attendant. Truly, airlines need cabin attendants who
have the necessary strength to open emergency doors, the agility to attend to
passengers in cramped working conditions, and the stamina to withstand grueling
flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are important
factors to consider in case of emergency. Aircrafts have constricted cabin space,
and narrow aisles and exit doors. Thus, the arguments of respondent that
"[w]hether the airline’s flight attendants are overweight or not has no direct
relation to its mission of transporting passengers to their destination"; and that
the weight standards "has nothing to do with airworthiness of respondent’s
airlines," must fail.
76
The rationale in Western Air Lines v. Criswell76 relied upon by petitioner cannot
apply to his case. What was involved there were two (2) airline pilots who were
denied reassignment as flight engineers upon reaching the age of 60, and a flight
engineer who was forced to retire at age 60. They sued the airline company,
alleging that the age-60 retirement for flight engineers violated the Age
Discrimination in Employment Act of 1967. Age-based BFOQ and being
overweight are not the same. The case of overweight cabin attendants is another
matter. Given the cramped cabin space and narrow aisles and emergency exit
doors of the airplane, any overweight cabin attendant would certainly have
difficulty navigating the cramped cabin area.
In short, there is no need to individually evaluate their ability to perform their
task. That an obese cabin attendant occupies more space than a slim one is an
unquestionable fact which courts can judicially recognize without introduction of
evidence.77 It would also be absurd to require airline companies to reconfigure
the aircraft in order to widen the aisles and exit doors just to accommodate
overweight cabin attendants like petitioner.
The biggest problem with an overweight cabin attendant is the possibility of
impeding passengers from evacuating the aircraft, should the occasion call for it.
The job of a cabin attendant during emergencies is to speedily get the passengers
out of the aircraft safely. Being overweight necessarily impedes mobility.
Indeed, in an emergency situation, seconds are what cabin attendants are
dealing with, not minutes. Three lost seconds can translate into three lost lives.
Evacuation might slow down just because a wide-bodied cabin attendant is
blocking the narrow aisles. These possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight standards of
PAL were made known to him prior to his employment. He is presumed to know
the weight limit that he must maintain at all times. 78 In fact, never did he
question the authority of PAL when he was repeatedly asked to trim down his
weight. Bona fides exigit ut quod convenit fiat. Good faith demands that what is
agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin ang
napagkasunduan.
Too, the weight standards of PAL provide for separate weight limitations based on
height and body frame for both male and female cabin attendants. A progressive
discipline is imposed to allow non-compliant cabin attendants sufficient
opportunity to meet the weight standards. Thus, the clear-cut rules obviate any
possibility for the commission of abuse or arbitrary action on the part of PAL.
III. Petitioner failed to substantiate his claim that he was discriminated
against by PAL.
Petitioner next claims that PAL is using passenger safety as a convenient excuse
to discriminate against him.79 We are constrained, however, to hold otherwise.
We agree with the CA that "[t]he element of discrimination came into play in this
case as a secondary position for the private respondent in order to escape the
consequence of dismissal that being overweight entailed. It is a confession-and-
avoidance position that impliedly admitted the cause of dismissal, including the
reasonableness of the applicable standard and the private respondent’s failure to
comply."80It is a basic rule in evidence that each party must prove his affirmative
allegation.81
Since the burden of evidence lies with the party who asserts an affirmative
allegation, petitioner has to prove his allegation with particularity. There is
nothing on the records which could support the finding of discriminatory
treatment. Petitioner cannot establish discrimination by simply naming the
supposed cabin attendants who are allegedly similarly situated with him.
Substantial proof must be shown as to how and why they are similarly situated
and the differential treatment petitioner got from PAL despite the similarity of his
situation with other employees.
Indeed, except for pointing out the names of the supposed overweight cabin
attendants, petitioner miserably failed to indicate their respective ideal weights;
weights over their ideal weights; the periods they were allowed to fly despite
their being overweight; the particular flights assigned to them; the discriminating
treatment they got from PAL; and other relevant data that could have adequately
established a case of discriminatory treatment by PAL. In the words of the CA,
"PAL really had no substantial case of discrimination to meet."82
We are not unmindful that findings of facts of administrative agencies, like the
Labor Arbiter and the NLRC, are accorded respect, even finality. 83 The reason is
simple: administrative agencies are experts in matters within their specific and
77
specialized jurisdiction.84 But the principle is not a hard and fast rule. It only
applies if the findings of facts are duly supported by substantial evidence. If it can
be shown that administrative bodies grossly misappreciated evidence of such
nature so as to compel a conclusion to the contrary, their findings of facts must
necessarily be reversed. Factual findings of administrative agencies do not have
infallibility and must be set aside when they fail the test of arbitrariness. 85
Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We
thus annul their findings.
To make his claim more believable, petitioner invokes the equal protection clause
guaranty86 of the Constitution. However, in the absence of governmental
interference, the liberties guaranteed by the Constitution cannot be
invoked.87 Put differently, the Bill of Rights is not meant to be invoked against
acts of private individuals.88 Indeed, the United States Supreme Court, in
interpreting the Fourteenth Amendment, 89 which is the source of our equal
protection guarantee, is consistent in saying that the equal protection erects no
shield against private conduct, however discriminatory or wrongful. 90 Private
actions, no matter how egregious, cannot violate the equal protection
guarantee.91
IV. The claims of petitioner for reinstatement and wages are moot.
As his last contention, petitioner avers that his claims for reinstatement and
wages have not been mooted. He is entitled to reinstatement and his full
backwages, "from the time he was illegally dismissed" up to the time that the
NLRC was reversed by the CA.92
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
immediately be executory, even pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer shall not stay the execution
for reinstatement provided herein.
The law is very clear. Although an award or order of reinstatement is self-
executory and does not require a writ of execution, 93 the option to exercise actual
reinstatement or payroll reinstatement belongs to the employer. It does not
belong to the employee, to the labor tribunals, or even to the courts.
Contrary to the allegation of petitioner that PAL "did everything under the sun" to
frustrate his "immediate return to his previous position,"94 there is evidence that
PAL opted to physically reinstate him to a substantially equivalent position in
accordance with the order of the Labor Arbiter.95 In fact, petitioner duly received
the return to work notice on February 23, 2001, as shown by his signature. 96
Petitioner cannot take refuge in the pronouncements of the Court in a case 97 that
"[t]he unjustified refusal of the employer to reinstate the dismissed employee
entitles him to payment of his salaries effective from the time the employer failed
to reinstate him despite the issuance of a writ of execution" 98 and ""even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the employee
during the period of appeal until reversal by the higher court." 99 He failed to
prove that he complied with the return to work order of PAL. Neither does it
appear on record that he actually rendered services for PAL from the moment he
was dismissed, in order to insist on the payment of his full backwages.
computed from the time his compensation was withheld from him up to the time
of his actual reinstatement." Luckily for petitioner, this is not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an
act "social justice,"101 or based on "equity."102 In both instances, it is required
that the dismissal (1) was not for serious misconduct; and (2) does not reflect on
the moral character of the employee.103
Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s
pay for every year of service.104 It should include regular allowances which he
might have been receiving.105 We are not blind to the fact that he was not
dismissed for any serious misconduct or to any act which would reflect on his
moral character. We also recognize that his employment with PAL lasted for more
or less a decade.
WHEREFORE, the appealed Decision of the Court of Appeals
is AFFIRMED but MODIFIED in that petitioner Armando G. Yrasuegui is entitled
to separation pay in an amount equivalent to one-half (1/2) month’s pay for
every year of service, which should include his regular allowances.
SO ORDERED.

In insisting that he be reinstated to his actual position despite being overweight,

petitioner in effect wants to render the issues in the present case moot. He asks
PAL to comply with the impossible. Time and again, the Court ruled that the law
does not exact compliance with the impossible.100

V. Petitioner is entitled to separation pay.

Be that as it may, all is not lost for petitioner.

Normally, a legally dismissed employee is not entitled to separation pay. This

may be deduced from the language of Article 279 of the Labor Code that "[a]n
employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent

78
G.R. No. 194884 October 22, 2014
IMASEN PHILIPPINE MANUFACTURING CORPORATION, Petitioner,
vs.
RAMONCHITO T. ALCON and JOANN S. PAPA, Respondents.
DECISION
BRION, J.:
We resolve in this petition for review on certiorari 1 the challenge to the June 9,
2010 decision2 and the December 22, 2010 resolution 3 of the Court of Appeals
(CA) in CA-G.R. SP No. 110327. This CA decision nullified the December 24, 2008
decision4 of the National Labor Relations Commission (NLRC) in NLRC CA No.
043915-05 (NLRC CASE No. RAB IV-12-1661-02-L). The NLRC ruling, in turn,
affirmed the December 10, 2004 decision5 of the Labor Arbiter (LA), dismissing
the illegal dismissal complaint filed by respondents Ramonchito T. Alcon and
Joann S. Papa (collectively referred to as respondents).
The Factual Antecedents
Petitioner Imasen Philippine Manufacturing Corporation is a domestic corporation
engaged in the manufacture of auto seat-recliners and slide-adjusters. It hired
the respondents as manual welders in 2001.
On October 5, 2002, the respondents reported for work on the second shift –
from 8:00 pm to 5:00 am of the following day. At around 12:40 am, Cyrus A.
Altiche, Imasen’s security guard on duty, went to patrol and inspect the
production plant’s premises. When Altiche reached Imasen’s Press Area, he heard
the sound of a running industrial fan. Intending to turn the fan off, he followed
the sound that led him to the plant’s "Tool and Die" section.
At the "Tool and Die" section, Altiche saw the respondents having sexual
intercourse on the floor, using a piece of carton as mattress. Altiche immediately
went back to the guard house and relayed what he saw to Danilo S. Ogana,
another security guard on duty.
79
On Altiche’s request, Ogana madea follow-up inspection. Ogana went to the "Tool
and Die" section and saw several employees, including the respondents, already
leaving the area. He noticed, however, that Alcon picked up the carton that
Altiche claimed the respondents used as mattress during their sexual act, and
returned it to the place where the cartons were kept. Altiche then submitted a
handwritten report6 of the incident to Imasen’s Finance and Administration
Manager.
On October 14, 2002, Imasen issued the respondents separate interoffice
memoranda7 informing them of Altiche’sreport on the October 5, 2002 incident
and directing them to submit their individual explanation. The respondents
complied with the directive; they claimed that they were merely sleeping in the
"Tool and Die" section at the time of the incident. They also claimed that other
employees were near the area, making the commission of the act charged
impossible.
On October 22, 2002, Imasen issued the respondents another interoffice
memorandum8 directing them to appear atthe formal hearing of the
administrative charge against them. The hearing was conducted on October 30,
2002,9presided by a mediator and attended by the representatives of Imasen, the
respondents, Altiche and Ogana. Altiche and Ogana reiterated the narrations in
Altiche’s handwritten report.
On December 4, 2002, Imasen issued the respondents separate interoffice
memoranda10 terminating their services. It found the respondents guilty of the
act charged which it considered as "gross misconduct contrary to the existing
policies, rules and regulations of the company."
On December 5, 2002, the respondents filed before the LA the Complaint 11 for
illegal dismissal. The respondents maintained their version of the incident.
In the December 10, 2004 decision,12 the LA dismissed the respondents’
complaint for lack of merit. The LA found the respondents’ dismissal valid, i.e.,
for the just cause of gross misconduct and with due process. The LA gave weight
to Altiche’s account of the incident, which Ogana corroborated, over the
respondents’mere denial of the incident and the unsubstantiated explanation that
other employees were present near the "Tool and Die" section, making the sexual
act impossible. The LA additionally pointed out that the respondents did not show
any ill motive or intent on the part of Altiche and Ogano sufficient to render their
accounts of the incident suspicious.
The NLRC’s ruling
In its December 24, 2008 decision,13 the NLRC dismissed the respondents’
appeal14 for lack of merit. In affirming the LA’s ruling, the NLRC declared that
Imasen substantially and convincingly proved just cause for dismissing the
respondents and complied with the required due process.
The respondents filed before the CA a petition for certiorari 15 after the NLRC
denied their motion for reconsideration16 in its May 29, 2009 resolution.17
The CA’s ruling
In its June 9, 2010 decision,18 the CA nullified the NLRC’s ruling. The CA agreed
with the labor tribunals’ findings regarding the infraction charged – engaging in
sexual intercourse on October 5, 2002 inside company premises – and Imasen’s
observance of due process in dismissing the respondents from employment.
The CA, however, disagreed with the conclusion that the respondents’ sexual
intercourse inside company premises constituted serious misconduct that the
Labor Code considers sufficient tojustify the penalty of dismissal. The CA pointed
out that the respondents’ act, while provoked by "reckless passion in an inviting
environment and time," was not done with wrongful intent or with the grave or
aggravated character that the law requires. To the CA, the penalty of dismissal is
not commensurate to the respondents’ act, considering especially that the
respondents had not committed any infraction in the past.
Accordingly, the CA reduced the respondents’ penalty to a threemonth
suspension and ordered Imasen to: (1) reinstate the respondents to their former
position without loss of seniority rights and other privileges; and (2) pay the
respondents backwages from December 4, 2002 until actual reinstatement, less
the wages corresponding to the three-month suspension.
80
Imasen filed the present petition after the CA denied its motion for
Reconsideration19 in the CA’s December 22, 2010 resolution.20
The Petition
Imasen argues in this petition that the act of engaging in sexual intercourse
inside company premises during work hours is serious misconduct by whatever
standard it is measured. According to Imasen, the respondents’ infraction is an
affront to its core values and high ethical work standards, and justifies the
dismissal. When the CA reduced the penalty from dismissal to three-month
suspension, Imasen points out that the CA, in effect, substituted its own
judgment with its (Imasen’s) own legally protected management prerogative.
Lastly, Imasen questions the CA’s award of backwages in the respondents’ favor.
Imasen argues that the respondents would virtually gain from their infraction as
they would be paid eight years worth of wages without having rendered any
service; eight (8) years, in fact, far exceeds their actual period of service prior to
their dismissal.
The Case for the Respondents
The respondents argue in their comment21 that the elements of serious
misconduct that justifies an employee’s dismissal are absent in this case,
adopting thereby the CA’s ruling. Hence, to the respondents, the CA correctly
reversed the NLRC’s ruling; the CA, in deciding the case, took a wholistic
consideration of all the attendant facts, i.e., the time, the place, the persons
involved, and the surrounding circumstances before, during, and after the sexual
intercourse, and not merely the infraction committed.
The Issue
The sole issue for this Court’s resolution is whether the respondents’ infraction –
engaging in sexual intercourse inside company premises during work hours –
amounts to serious misconduct within the terms of Article 282 (now Article 296)
of the Labor Code justifying their dismissal.
The Court’s Ruling
We GRANT the petition.
We find that the CA reversibly erred when it nullified the NLRC’s decision for
grave abuse of discretion the NLRC’s decision.
Preliminary considerations: tenurial security vis-à-vis management prerogative
The law and jurisprudence guaranteeto every employee security of tenure. This
textual and the ensuing jurisprudential commitment to the cause and welfare of
the working class proceed from the social justice principles of the Constitution
that the Court zealously implements out of its concern for those with less in life.
Thus, the Court will not hesitate to strike down as invalid any employer act that
attempts to undermine workers’ tenurial security. All these the State undertakes
under Article 279 (now Article 293)22 of the Labor Code which bar an employer
from terminating the services of an employee, except for just or authorized cause
and upon observance of due process.
In protecting the rights of the workers, the law, however, does not authorize the
oppression or self-destruction of the employer.23 The constitutional commitment
to the policy of social justice cannot be understood to mean that every labor
dispute shall automatically be decided in favor of labor. 24 The constitutional and
legal protection equally recognize the employer’s right and prerogative to
manage its operation according to reasonable standards and norms of fair play.
Accordingly, except as limited by special law, an employer is free to regulate,
according to his own judgment and discretion, all aspects of employment,
including hiring, work assignments, working methods, time, place and manner of
work, tools to beused, processes to be followed, supervision of workers, working
regulations, transfer of employees, worker supervision, layoff of workers and the
discipline, dismissal and recall of workers.25 As a general proposition, an
employer has free reign over every aspect of its business, including the dismissal
of his employees as long as the exercise of its management prerogativeis done
reasonably, in good faith, and in a manner not otherwise intended to defeat or
circumvent the rights of workers.
In these lights, the Court’s task inthe present petition is to balance the conflicting
rights of the respondents to security of tenure, on one hand, and of Imasen to
81
dismiss erring employees pursuant to the legitimate exercise of its management
prerogative, on the other.
Management’s right to dismiss an employee; serious misconduct as just cause for
the dismissal
The just causes for dismissing an employee are provided under Article 282 26 (now
Article 296)27 of the Labor Code. Under Article 282(a), serious misconduct by the
employee justifies the employer in terminating his or her employment.
Misconduct is defined as an improper or wrong conduct. It is a transgression of
some established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error in
judgment.28 To constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employee’s misconduct must be
serious, i.e., of such grave and aggravated character and not merely trivial or
unimportant.29
Additionally, the misconduct must be related to the performance of the
employee’s duties showing him tobe unfit to continue working for the
employer.30 Further, and equally important and required, the act or conduct must
have been performed with wrongful intent.31
To summarize, for misconduct or improper behavior to be a just cause for
dismissal, the following elements must concur: (a) the misconduct must be
serious; (b) it must relate to the performance of the employee’s duties showing
that the employee has become unfit to continue working for the employer; 32 and
(c) it must have been performed with wrongful intent.
The respondents’ infraction amounts to serious misconduct within the terms of
Article 282 (now Article296) of the Labor Code justifying their dismissal
Dismissal situations (on the ground of serious misconduct) involving sexual acts,
particularly sexual intercourse committed by employees inside company premises
and during workhours, are not usual violations33 and are not found in abundance
under jurisprudence. Thus, in resolving the present petition, we are largely
guided by the principles we discussed above, as applied to the totality of the
circumstances that surrounded the petitioners’ dismissal.
In other words, we view the petitioners’ act from the prism of the elements that
must concur for an act to constitute serious misconduct, analyzed and
understood within the context of the overall circumstances of the case. In taking
this approach, weare guided, too, by the jurisdictional limitations that a Rule 45
review of the CA’s Rule 65 decision in labor cases imposes on our discretion. 34
In addressing the situation that we are faced with in this petition, we determine
whether Imasen validly exercised its prerogative as employer to dismiss the
respondents-employees who, within company premises and during work hours,
engaged in sexual intercourse. As framed within our limited Rule 45 jurisdiction,
the question that we ask is: whether the NLRC committed grave abuse of
discretion in finding that the respondents’ act amounted to what Article 282 of
the Labor Code textually considers as serious misconduct to warrant their
dismissal.
After due consideration, we find the NLRC legally correct and well within its
jurisdiction when it affirmed the validity of the respondents’ dismissal on the
ground of serious misconduct.
Sexual acts and intimacies between two consenting adults belong, as a principled
ideal, to the realm of purely private relations.1âwphi1 Whether aroused by lust or
inflamed by sincere affection, sexual acts should be carried out at such place,
time and circumstance that, by the generally accepted norms of conduct, will not
offend public decency nor disturb the generally held or accepted social morals.
Under these parameters, sexual acts between two consenting adults do not have
a place in the work environment.
Indisputably, the respondents engaged in sexual intercourse inside company
premisesand during work hours. These circumstances, by themselves, are
already punishablemisconduct. Added to these considerations, however, is the
implication that the respondents did not only disregard company rules but
flaunted their disregard in a manner that could reflect adversely on the status of
ethics and morality in the company.
82
Additionally, the respondents engaged in sexual intercourse in an area where co-
employees or other company personnel have ready and available access. The
respondents likewise committed their act at a time when the employees were
expected to be and had, in fact, been at their respective posts, and when they
themselves were supposed to be, as all other employees had in fact been,
working.
Under these factual premises and inthe context of legal parameters we discussed,
we cannot help but consider the respondents’ misconduct to be of grave and
aggravated character so that the company was justified in imposing the highest
penalty available ― dismissal. Their infraction transgressed the bounds of
sociallyand morally accepted human public behavior, and at the same time
showedbrazen disregard for the respect that their employer expected of them as
employees. By their misconduct, the respondents, in effect, issued an open
invitation for othersto commit the same infraction, with like disregard for their
employer’s rules, for the respect owed to their employer, and for their co-
employees’ sensitivities. Taken together, these considerations reveal a depraved
disposition that the Court cannot but consider as a valid cause for dismissal. In
ruling as we do now, we considered the balancing between the respondents’
tenurial rights and the petitioner’s interests – the need to defend their
management prerogative and to maintain as well a high standard of ethics and
morality in the workplace. Unfortunately for the respondents, in this balancing
under the circumstances ofthe case, we have to rule against their tenurial rights
in favor of the employer’s management rights.
All told, the respondents’ misconduct,under the circumstances of this case, fell
within the terms of Article 282 (now Article 296) of the Labor Code.
Consequently, we reverse the CA’s decision for its failure to recognize that no
grave abuse of discretion attended the NLRC’s decision to support the
respondents’ dismissal for serious misconduct.
WHEREFORE, in light of these considerations, we hereby GRANT the petition. We
REVERSE the decision dated June 9, 2010 and the resolution dated December 22,
2010 of the Court of Appeals in CA-G.R. SP No. 110327 and REINSTATE the
decision dated December 24, 2008 of the National Labor Relations Commission in
NLRC CA No. 043915-05 (NLRC Case No. RAB IV-12-1661-02-L).
SO ORDERED.

83
G.R. No. 202090, September 09, 2015
ICT MAJRKETING SERVICES, INC. (NOW KNOWN AS SYKES MARKETING
SERVICES, INC.), Petitioner, v. MARIPHIL L. SALES, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails: 1) the January 10, 2012
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 109860 nullifying and
setting aside the February 16, 2009 3 and May 20, 20094Resolutions of the
National Labor Relations Commission (NLRC) in NLRC LAC CN. 07-002404-
08(7)/(8) and reinstating with modification the April 30, 2008 Decision 5 of the
Labor Arbiter in NLRC-NCR Case No. 10-11004-07; and 2) the CA's May 28, 2012
Resolution6 denying petitioner's Motion for Reconsideration 7of the herein assailed
Decision.
Factual Antecedents
Petitioner ICT Marketing Services, Inc. (ICT) - now known as Sykes Marketing
Services, Inc. - is a duly registered domestic corporation engaged in the business
of providing outsourced customer relations management and business process
outsourcing solutions to various clients in government and in the financial
services, insurance, telecommunications, health care, information technology,
media, energy, and hospitality industries.
On February 22, 2006, petitioner hired respondent Mariphil L. Sales as its
Customer Service Representative (CSR) or Telephone Service Representative
(TSR), and assigned her to its Capital One account. On August 21, 2006,
respondent became a regular employee, and her monthly base salary was
increased to P16,350.00 and she was given monthly transportation and meal
allowances.
On February 21, 2007, respondent was assigned to the Washington Mutual
account, where she was awarded with a certificate for being the "Top
Converter/Seller (Second Place)" for the month of April 2007. 8
84
On July 3, 2007, respondent wrote to Glen Odom (Odom) - petitioner's Vice
President - complaining about supposed irregularities in the handling of funds
entrusted to petitioner by Washington Mutual which were intended for distribution
to outstanding Washington Mutual CSRs and TSRs as prizes and incentives.
However, no action appears to have been taken on her complaint.
Respondent was then transferred to the Bank of America account on July 30,
2007. Without prior notice to respondent, petitioner scheduled her for training
from July 30 to August 6, 2007 on the very same day of her transfer. On the
third day of training (August 1), respondent was unable to attend. When she
reported for training the next day, respondent was informed that she could not
be certified to handle calls for Bank of America due to her failure to complete the
training. From then on, respondent was placed on "floating status" and was not
given any work assignment.
In a September 28, 2007 letter9 to petitioner's Human Resource (HR) Manager,
respondent tendered her resignation from work, effective upon receipt of the
letter. Respondent wrote:cralawlawlibrary
I was forced to resign due to the reason that my employment was made on
"floating status" effective August 4, 2007 and up to present (almost two months)
I haven't receive [sic] any notice from you or the HR department to report for
work despite my repeated follow-up [with] your office thru telephone and mobile
phone text messages. Hence, I consider your inaction to my follow-up as an
indirect termination of my work with ICT.
The reason I was placed [on] floating status is that, I was absent during the third
day of my training with Bank of America, the account to which I was transferred
from Washington Mutual (WaMu). However, my absence during such period was
justified by the fact that I was sick and I need [sic] to undergo a medical check-
up on that date.
Furthermore, I see my transfer from WaMu Account to Bank of America and the
continued floating status of my work was prompted by the fact that I lodged a
complaint against managers/supervisors assigned in WaMu account regarding
irregularities in the handling of funds given by ICT clients which were supposed to
be distributed as prizes to TSR's assigned with WaMu. After the filing of the said
complaint, through your office, I was transferred to another account (Bank of
America) for no apparent reason. I was not even included in the original list of
those who were supposed to be transferred because my performance record with
WaMu is satisfactory as proven by the fact that I was even awarded with a
certificate as "top converter (seller)" for the month of April and was supposed to
be included again in the top three highest converters] for the month of May, but
unfortunately irregularities were committed, that is why I filed the
aforementioned complaint [with] your office.
On August 1, 2007, a few days after my transfer [to] Bank of America, my coach,
angelo [sic], informed me that I will be having a training on that same day with
Bank of America which is really unexpected. I was not given a notice in advance
about the training. My coach informed me only three hours before the said
training. Later on during my training with Bank of America I was [placed on
floating status] indefinitely due to a single absence even though I am a regular
employee having worked in ICT for almost two years. Another instance [of]
discrimination [sic] and bad faith on the part of ICT management is that, all my
fellow agents who were [placed on floating status] for the same reason were all
ordered to return to work except me [sic]. Moreover, ICT is continuously hiring
TSR's which only shows that there are still accounts open or work available in
ICT. However despite the availability of work, I was still on floating status.
Based on the aforementioned facts and circumstance[s], it is very clear that the
harassment, pressure, and indefinite floating of my employment with ICT are
retaliatory acts perpetrated by the company because of my complaint/ request
for investigation on the irregularities being committed by certain company
officials.
Thus, I can no longer bear the above-mentioned abuses and discrimination
committed against me by ICT management. Therefore, I have no option but to
sever my relationship with the company, as my continued floating status had
already prejudiced me emotionally and financially.10chanrobleslaw
Riding of the Labor Arbiter
85
On October 2, 2007, respondent filed a complaint for constructive dismissal
against petitioner and Odom before the NLRC NCR, Quezon City, docketed as
NLRC-NCR Case No. 10-11004-07.
In her Position Paper,11 Reply,12 Rejoinder,13 and Surrejoinder,14 respondent
claimed that for complaining about the supposed irregularities in the Washington
Mutual account, petitioner discriminated against her and unduly punished her.
Although she was not included in the original list of CSRs/TSRs for program
transfer, she was transferred to another account, and then placed on "floating
status," which is tantamount to suspending her indefinitely without due process,
despite her satisfactory performance. Respondent averred that petitioner's claim
of multiple absences is not true, because not once was she penalized therefor,
assuming such charge is true. Respondent also alleged that her one-day absence
during the training for the Bank of America program cannot justify her being
placed on a "floating status" because the "no-absence during training"
requirement cited by petitioner - using her employment contract 15 and the "New
Hire Training Bay"16 as bases - applies only to new hires on probationary status,
and not to regularized employees. In any case, the "New Hire Training Bay" used
by petitioner was for the Capital One program. She also pointed out that during
her indefinite suspension or "floating status," petitioner continued to hire new
CSRs, as shown by its newspaper advertisements during the period.17Finally, she
asserted that her resignation was not voluntary, but was forced upon her by
petitioner as a result of its unlawful acts. Thus, respondent prayed for the
recovery of backwages, separation pay, P100,000.00 combined moral and
exemplary damages, and attorney's fees equivalent to 10 per cent (10%) of the
total award.
In its Position Paper,18 Reply,19 Rejoinder,20 and Surrejoinder,21 petitioner prayed
for the dismissal of the complaint, arguing that respondent was transferred from
the Washington Mutual account as an exercise of management initiative or
prerogative, and due to infractions22 committed by her, as well as attendance and
punctuality issues that arose. It claimed that respondent could not be certified for
the Bank of America account for failing to complete the training. It maintained
that respondent was placed on standby status only, and not suspended or
constructively dismissed. In fact, she was directed to report to its HR
department, but she did not do so. It also insisted that respondent resigned
voluntarily. It denied committing any act of discrimination or any other act which
rendered respondent's employment impossible, unreasonable or unlikely. Finally, I Separation Pay
it claimed that prior notice of her transfer to the Bank of America account was 2/21/06-8/4/07 = 2yrs.
made through an electronic mail message sent to her; and that respondent has P16,350.00 x 2yrs.= P32.700.00
no cause of action since she resigned voluntarily, and thus could not have been II Damages P50,000.00
illegally dismissed. P82,700.00
10% Attorney's Fees P8.270.00 P90,970.00
On April 30, 2008, the Labor Arbiter rendered a Decision finding complainant to
23

have been constructively dismissed and awarding separation pay, moral and SO ORDERED.24chanrobleslaw
exemplary damages, and attorney's fees to respondent. The Labor Arbiter
held:cralawlawlibrary Riding of the National Labor Relations Commission

xxx Complainant was indeed constructively dismissed from her employment and Petitioner appealed before the NLRC arguing that the Labor Arbiter erred in ruling
she quitted [sic] because her continued employment thereat is rendered that respondent was constructively dismissed. It also argued that Odom was not
impossible, unreasonable or unlikely. personally liable as he was merely acting in good faith and within his authority as
corporate officer.
Complainant's resignation was sparked by her transfer of assignment and
eventual placing her [sic] by the respondent company of [sic] a "on floating" Respondent likewise interposed an appeal 25 arguing that the award of backwages
status. should be computed from the date of her dismissal until finality of the Labor
Arbiter's Decision; and that the proportionate share of her 13 th month pay should
xxx [T]here was no x x x evidence xxx that complainant's transfer was due to the be paid to her as well.
request of a client. Further, if complainant was indeed remised of [sic] her duties
due to her punctuality and attendance problem of committing twelve (12) On February 16, 2009, the NLRC issued a Resolution,26 declaring as
absences alone incurred in July 2007 [sic], why was there no disciplinary action follows:cralawlawlibrary
taken against her like reprimand or warning[?]
We reverse.
xxxx
Upon an examination of the pleadings on file, We find that in the past the
And its effect, complainant is entitled to her claim of separation pay, moral and complainant had been transferred from one program to another without any
exemplary damages of P50,000.00 pesos [sic] including an award of attorney's objection on her part. Insofar as the instant case is concerned, it appears that
fees. the complainant, aside from having been given a warning for wrong disposition of
a call, had been absent or usually late in reporting for work, constraining the
WHEREFORE, premises considered, judgment is rendered ordering the respondent ICT to transfer her to another program/account. Required of the
respondents to pay complainant of [sic] one month pay per year of service as complainant was for her to undergo Product Training for the program from July
separation pay in the total amount of P32,700.00, P50,000.00 moral and 30 to August 6,2007, and the records indicate that she attended only two (2)
exemplary damages plus 10% of the award as attorney's fees, hereunder days of training on July 30 and 31, 2007, did not report on August 1, 2007 and
computed:chanRoblesvirtualLawlibrary again reported for training on August 2, 2007. It was then that ICT's Operations
Subject Matter Expert, Ms. Suzette Lualhati, informed the complainant that she

86
cannot be certified for the program because she tailed to complete the number of This Court finds the petition meritorious.
training days, and there was a need for her to report to Human Resources for
further instructions. As the complainant did not report to Human Resources, and While it is true that management has the prerogative to transfer employees, the
due to her derogatory record, the respondent company could not find another exercise of such right should not be motivated by discrimination, made in bad
program where the complainant could be transferred. faith, or effected as a form of punishment or demotion without sufficient cause.
When the transfer is unreasonable, unlikely, inconvenient, impossible, or
From what has been narrated above, We come to the conclusion that the prejudicial to the employee, it already amounts to constructive dismissal. In
respondent company cannot be faulted for placing the complainant on "floating constructive dismissal, the employer has the burden of proving that the transfer
state." And there does not appear to be any ill will or bad faith that can be and demotion of an employee are for just and valid grounds, such as genuine
attributed to the respondent. business necessity. Should the employer fail to overcome this burden of proof,
the employee's transfer shall be tantamount to unlawful constructive dismissal.
Finally, it is well to emphasize that the complainant tendered her resignation on
October 1, 2007. There is no evidence that the complainant has presented that In the case at bench, private respondent corporation failed to discharge this
would indicate that duress or force has been exerted on her. burden of proof considering the circumstances surrounding the petitioner's July
2007 transfer to another account. Prior to her reassignment, petitioner's annual
All told, We are of the opinion that the findings of the Labor Arbiter are in stark performance merited increase in her salary effective February 2007 and was also
contrast to the evidence on record. awarded a certificate of achievement for performing well in April 2007. Her
transfer was also abrupt as there was no written transfer agreement Morming her
WHEREFORE, in view of the foregoing, the decision appealed from is hereby of the same and its requirements unlike her previous transfer from Capital One to
reversed and set aside. Addordingly [sic], a new one is entered dismissing the Washington Mutual account. It is therefore difficult to see the reasonableness,
complaint for lack of merit. urgency, or genuine business necessity to transfer petitioner to a new account.
While it may be true that petitioner has attendance and punctuality issues, her
SO ORDERED.27chanrobleslaw over-all performance as a CSR/TSR cannot be said to be below par given the
annual merit increase and the certificate of achievement awarded to her. If
Respondent filed a Motion for Reconsideration,28 but in a May 20, 2009 indeed, private respondent corporation had trouble transferring the petitioner to
Resolution,29 the motion was denied. another post because of her derogatory record, the corporation could just have
dismissed her for cause.
Ruling of the Court of Appeals
After petitioner's unjustified transfer, she was informed by private respondent
In a Petition for Certiorari30 filed with the CA and docketed as CA-G.R. SP No. corporation that she could not be "certified" or allowed to handle calls for the new
109860, respondent sought a reversal of the February 16, 2009 and May 20, account because of her absence during training. She was later placed on a
2009 Resolutions of the NLRC. floating status and was not given another post.

Petitioner filed its Comment,31 to which respondent interposed a Reply.32 The Court considers placing the petitioner on a floating status as another
unjustified action of the private respondent corporation prejudicial to petitioner as
On January 10, 2012, the CA issued the assailed Decision containing the following employee. In this case, except for private respondent corporation's bare assertion
pronouncement:cralawlawlibrary that petitioner no longer reported to the human resources department as

87
instructed, no proof was offered to prove that petitioner intended to sever the
employer-employee relationship. Private respondent corporation also offered no
credible explanation why it failed to provide a new assignment to petitioner. Its
assertion that it is petitioner's derogatory record which made it difficult for the
corporation to transfer her to another account despite its efforts is not sufficient
to discharge the burden of proving that there are no posts or no accounts
available or willing to accept her.
In Nationwide Security and Allied Services, Inc. vs. Valderama, 33 the Supreme
Court declared that due to the grim economic consequences to the employee of
being placed on a floating status, the employer should bear the burden of proving
that there are no posts available to which the employee temporarily out of work
can be assigned.
These acts by the private respondent corporation, of transferring petitioner to
another account without sufficient cause and proper notice and its subsequent
failure to provide a new post for her for two months without credible explanation,
constitute unjustified actions prejudicial to the petitioner as an employee, making
it unbearable for her to continue employment.
Thus, petitioner opted to resign, albeit involuntarily. The involuntariness of her
resignation is evident in her letter which states categorically:
"I was forced to resign due to the reason that my employment was made on
'floating status' effective August 4, 2007 and up to the present (almost two
months) I haven't receive [sic] any notice from you or the HR department to
report for work despite my repeated follow-up to your office thru telephone and
mobile phone text messages. Hence, I consider your inaction to my follow-up as
an indirect termination of my work with ICT."
Further, petitioner immediately filed a complaint for illegal dismissal. Resignation,
it has been held, is inconsistent with the filing of a complaint. Thus, private
respondent corporation's mere assertion that petitioner voluntarily resigned
without offering convincing evidence to prove it, is not sufficient to discharge the
burden of proving such assertion. It is worthy to note that the fact of filing a
resignation letter alone does not shift the burden of proof and it is still incumbent
upon the employer to prove that the employee voluntarily resigned.
Therefore, we believe and so hold that petitioner was constructively dismissed
88
from employment. Constructive dismissal exists when the resignation on title part
of the employee was involuntary due to the harsh, hostile and unfavorable
conditions set by the employer. The test for constructive dismissal is whether a
reasonable person in the employee's position would feel compelled to give up his
employment under the prevailing circumstances. With the decision of the private
respondent corporation to transfer and to thereafter placed [sic] her on floating
status, petitioner felt that she was being discriminated and this perception
compelled her to resign. It is clear from her resignation letter that petitioner felt
oppressed by the situation created by the private respondent corporation, and
this forced her to surrender her position.
Under Article 279 of the Labor Code, an employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement.
As petitioner did not pray for reinstatement but only sought payment of money
claims, the labor arbiter is correct in awarding separation pay equivalent to one
month pay for every year of service. We also do not find any cogent reason to
disturb the award of damages and attorney's fees since we have found bad faith
on the part of the private respondent corporation to abruptly [sic] transfer and
place the petitioner on floating status. Individual respondent Glen Odom is
however, exonerated from any liability as there was no clear finding that he acted
with malice or bad faith. Backwages and other monetary benefits must also be
included in compliance with the above-mentioned provision of labor law which
shall be reckoned from the time her constructive dismissal took effect until the
finality of this decision.
WHEREFORE, premises considered, the Resolutions dated February 16, 2009 and
May 20, 2009 respectively, issued by the public respondent National Labor
Relations Commission (NLRC) in NLRC CA No. 07-002404-08 are REVERSED and
SET ASIDE. The decision of the Labor Arbiter dated April 30, 2008 is REINSTATED
with MODIFICATION that the petitioner Mariphil L. Sales, be awarded backwages
and other monetary benefits from the date of her constructive dismissal up to the
finality of this Decision.
SO ORDERED.34
chanrobleslaw Petitioner's Arguments

Petitioner filed a Motion for Reconsideration, but the same was denied in a May Praying that the assailed CA dispositions be set aside and that the NLRC's
28,2012 Resolution. Hence, the present Petition. February 16, 2009 and May 20, 2009 Resolutions be reinstated instead,
petitioner maintains in the Petition and Reply37 that respondent's transfer to
In a November 11, 2013 Resolution,35 this Court resolved to give due course to another account was done as a valid exercise of management prerogative, which
the Petition. allows it to regulate all aspects of employment. Her transfer was done in good
faith, and without diminution in rank and salary. It contends that respondent
Issues knew very well that any CSR/TSR may be transferred to another
program/account anytime for business reasons; in fact, respondent herself was
Petitioner submits that -cralawlawlibrary transferred from Capital One to Washington Mutual, and she did not complain.
Moreover, she knew as well that "schedule adherence" or attendance/punctuality
A. is one of the "metrics" or standards by which the performance of a CSR is
measured, and that she failed to comply in this regard. It claims that the decision
THE COURT OF APPEALS ERRED WHEN IT HELD THAT RESPONDENT'S TRANSFER to place her on "floating status" instead of dismissing her was an accommodation
WAS UNJUSTIFIED NOTWITHSTANDING EVIDENCE TO SHOW THAT RESPONDENT and should not be treated as an illegal or unjustified act; that being on "floating
WAS NOT DEMOTED AND WAS EVEN GIVEN THE SAME RANK AND PAY. status" is not tantamount to constructive dismissal, and the failure to place or
transfer respondent to another account was due to her derogatory record, and
B.
not petitioner's bad faith or inaction. It insists that the placing of an employee on
"floating status" for up to six months is allowed in the event of a bona
THE COURT OF APPEALS ERRED WHEN IT HELD THAT RESPONDENT'S
fide suspension of the operations or undertaking of a business.38 In any event,
PLACEMENT UNDER FLOATING STATUS WAS TANTAMOUNT TO CONSTRUCTIVE
respondent's voluntary resignation prior to the expiration of the allowable six-
DISMISSAL AS THIS IS CONTRARY TO NUMEROUS DECISIONS OF THE
month "floating status" period cannot constitute constructive dismissal, and her
HONORABLE COURT.
immediate filing of the labor case thereafter is thus premature. Finally, petitioner
posits that since there is no illegal dismissal but rather a voluntary
C.
relinquishment of respondent's post, then there is no basis for the pecuniary
awards in her favor.
THE COURT OF APPEALS ERRED WHEN IT REINSTATED LABOR ARBITER
MACAM'S DECISION DATED 30 APRIL 2008 WHICH DECLARED THAT
Respondent's Arguments
RESPONDENT WAS CONSTRUCTIVELY DISMISSED, NOTWITHSTANDING
EVIDENCE THAT CLEARLY SHOWS THAT RESPONDENT VOLUNTARILY RESIGNED.
In her Comment39 praying for dismissal of the Petition and the corresponding
D. affirmance of the assailed dispositions, respondent insists that she was illegally
dismissed. She reiterates that her transfer to the Bank of America account was
THE COURT OF APPEALS ERRED IN AWARDING RESPONDENT SEPARATION PAY, an undue penalty for her complaining about supposed anomalies in the
BACKWAGES, MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S Washington Mutual account. She avers that the documentary evidence of her
FEES. chanrobleslaw
36 supposed unauthorized absences were manufactured to support petitioner's false

89
allegations and mislead this Court into believing that she was delinquent at work.
She argues that assuming that these absences were true, then they should have
merited her dismissal for cause - yet the fact is she was not dismissed nor
punished for these supposed absences. She asserts that petitioner's claim that
she was transferred on the recommendation of a client is untrue and self-serving,
and is unjustified since the client has no authority to order or recommend her
transfer. She maintains that her being placed on "floating status" was illegal,
since a) there is no evidence to prove her alleged "attendance and punctuality
issues," and b) there was no bona fide suspension of petitioner's business or
undertaking for a period not exceeding six months, as prescribed under Article
286 of the Labor Code,40 which would justify the suspension of her employment
for up to months. As enunciated in the Philippine Industrial Security Agency Corp.
v. Dapiton41 case which petitioner itself cited, Article 286 applies only when there
is a bonafide suspension of the employer's operation or undertaking for a period
not exceeding six months, due to dire exigencies of the business that compel the
employer to suspend the employment of its workers. Respondent points out that
petitioner continued with its business, and worse, it in fact continued to hire new
CSRs/TSRs during the period of respondent's suspension from work. In fine,
respondent alleges that she was constructively dismissed and forced to resign,
rather than continue to subject herself to petitioner's discrimination, insensibility,
harassment, and disdain; and that for such illegal acts, she is entitled to
indemnity from petitioner.
Our Ruling
The Court denies the Petition.
Respondent's Transfercralawlawlibrary
Under the doctrine of management prerogative, every employer has the inherent
right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the
principles of equity and substantial justice.
While the law imposes many obligations upon the employer, nonetheless, it also
90
protects the employer's right to expect from its employees not only good
performance, adequate work, and diligence, but also good conduct and loyalty, hi
fact, the Labor Code does not excuse employees from complying with valid
company policies and reasonable regulations for their governance and guidance.
Concerning the transfer of employees, these are the following jurisprudential
guidelines: (a) a transfer is a movement from one position to another of
equivalent rank, level or salary without break in the service or a lateral
movement from one position to another of equivalent rank or salary; (b) the
employer has the inherent right to transfer or reassign an employee for
legitimate business purposes; (c) a transfer becomes unlawful where it is
motivated by discrimination or bad faith or is effected as a form of punishment or
is a demotion without sufficient cause; (d) the employer must be able to show
that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee.42chanrobleslaw
While the prerogative to transfer respondent to another account belonged to
petitioner, it weilded the same unfairly. The evidence suggests that at the
time respondent was transferred from the Washington Mutual account to the
Bank of America program, petitioner was hiring additional CSRs/TSRs.43 This
simply means that if it was then hiring new CSRs/TSRs, then there should be no
need to transfer respondent to the Bank of America program; it could simply
train new hires for that program. Transferring respondent - an experienced
employee who was already familiar with the Washington Mutual account, and who
even proved to be outstanding in handling the same - to another account means
additional expenses for petitioner: it would have to train respondent for the Bank
of America account, and train a new hire to take her place in the Washington
Mutual account. This does not make sense; quite the contrary, it is impractical
and entails more expense on petitioner's part. If respondent already knew her
work at the Washington Mutual account very well, then it is contrary to
experience and logic to transfer her to another account which she is not familiar
with, there to start from scratch; this could have been properly relegated to a
new hire.
There can be no truth to petitioner's claim either that respondent's transfer was
made upon request of the client. If she was performing outstanding work and
bringing in good business for the client, there is no reason - indeed it is beyond
experience and logic - to conclude that the client would seek her transfer. Such a
claim could only be fabricated. Truly,cralawlawlibrary
Experience which is the life of the law — as well as logic and common sense —
militates against the petitioners' cause.44chanrobleslaw
Moreover, as the appellate court correctly observed, even if respondent had
attendance and punctuality issues, her overall performance as a CSR/TSR was
certainly far from mediocre; on the contrary, she proved to be a top performer.
And if it were true that respondent suddenly became lax by way of attendance in
July 2007, it is not entirely her fault. This may be attributed to petitioner's failure
to properly address her grievances relative to the supposed irregularities in the
handling of funds entrusted to petitioner by Washington Mutual which were
intended for distribution to outstanding Washington Mutual CSRs and TSRs as
prizes and incentives. She wrote petitioner about her complaint on July 3, 2007;
however, no explanation was forthcoming from petitioner, and it was only during
these proceedings - or after a case had already been filed - that petitioner
belatedly and for no other useful purpose attempted to address her concerns.
This may have caused a bit of disillusionment on the part of respondent, which
led her to miss work for a few days in July 2007. Her grievance should have been
addressed by petitioner; after all, they were serious accusations, and have a
bearing on the CSRs/TSRs' overall performance in the Washington Mutual
account.
Respondent's work as a CSR - which is essentially that of a call center agent - is
not easy. For one, she was made to work the graveyard shift - that is, from late
at night or midnight until dawn or early morning. This certainly takes a toll on
anyone's physical health. Indeed, call center agents are subjected to conditions
that adversely affect their physical, mental and emotional health; exposed to
extreme stress and pressure at work by having to address the customers' needs
and insure their satisfaction, while simultaneously being conscious of the need to
insure efficiency at work by improving productivity and a high level of service;
subjected to excessive control and strict surveillance by management; exposed to
verbal abuse from customers; suffer social alienation precisely because they work
the graveyard shift - while family and friends are at rest, they are working, and
when they are at rest, family and friends are up and about; and they work at a
quick-paced environment and under difficult circumstances owing to progressive
91
demands and ambitious quotas/targets set by management. To top it all, they
are not exactly well-paid for the work they have to do and the conditions they
have to endure. Respondent's written query about the prizes and incentives is not
exactly baseless and frivolous; the least petitioner could have done was to timely
address it, if it cared about its employee's welfare. By failing to address
respondent's concerns, petitioner exhibited an indifference and lack of concern
for its employees - qualities that are diametrically antithetical to the spirit of the
labor laws, which aim to protect the welfare of the workingman and foster
harmonious relations between capital and labor. By its actions, petitioner
betrayed the manner it treats its employees.
Thus, the only conceivable reason why petitioner transferred respondent to
another account is the fact that she openly and bravely complained about the
supposed anomalies in the Washington Mutual account; it is not her "derogatory
record" or her "attendance and punctuality issues", which are insignificant and
thus irrelevant to her overall performance in the Washington Mutual account.
And, as earlier stated, respondent's "attendance and punctuality issues" were
attributable to petitioner's indifference, inaction, and lack of sensitivity in failing
to timely address respondent's complaint. It should share the blame for
respondent's resultant delinquencies.
Thus, in causing respondent's transfer, petitioner clearly acted in bad faith and
with discrimination, insensibility and disdain; the transfer was effected as a form
of punishment for her raising a valid grievance related to her work. Furthermore,
said transfer was obviously unreasonable, not to mention contrary to experience,
logic, and good business sense. This being the case, the transfer amounted to
constructive dismissal.
The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion, bearing in mind the basic elements of
justice and fair play. Having the right should not be confused with the manner
in which that right is exercised. Thus, it cannot be used as a subterfuge by
the employer to rid himself of an undesirable worker. In particular, the
employer must be able to show that the transfer is not unreasonable,
inconvenient or prejudicial to the employee; nor does it involve a
demotion in rank or a diminution of his salaries, privileges and other
benefits. Should the employer fail to overcome this burden of proof, the
employee's transfer shall be tantamount to constructive dismissal, which
has been defined as a quitting because continued employment is rendered
impossible, unreasonable or unlikely; as an offer involving a demotion in rank
and diminution in pay. Likewise, constructive dismissal exists when an act
of clear discrimination, insensibility or disdain by an employer has
become so unbearable to the employee leaving him with no option but to
forego with his continued employment45 (Emphasis and underscoring
supplied)
The instant case can be compared to the situation in Veterans Security Agency,
Inc. v. Gonzalvo, Jr.,46where the employee concerned - a security guard who was
brave enough to complain about his employer's failure to remit its employees'
Social Security System premiums - was "tossed around" and finally placed on
floating status for no valid reason. Taking the poor employee's side, this Court
declared:cralawlawlibrary
True, it is the inherent prerogative of an employer to transfer and reassign its
employees to meet the requirements of its business. Be that as it may, the
prerogative of the management to transfer its employees must be exercised
without grave abuse of discretion. The exercise of the prerogative should not
defeat an employee's right to security of tenure. The employer's privilege to
transfer its employees to different workstations cannot be used as a subterfuge
to rid itself of an undesirable worker.
Here, riled by respondent's consecutive filing of complaint against it for
nonpayment of SSS contributions, VSAI had been tossing respondent to
different stations thereafter. From his assignment at University of Santo
Tomas for almost a year, he was assigned at the OWWA main [o]ffice in Pasig
where he served for more than three years. After three years at the OWWA main
office, he was transferred to the OWWA Pasay City parking lot knowing that the
security services will end forthwith. VSAI even concocted the reason that he had
to be assigned somewhere because his spouse was already a lady guard assigned
at the OWWA main office. Inasmuch as respondent was single at that time, this
was obviously a mere facade to [get] rid of respondent who was no longer in
VSAIs good graces.
The only logical conclusion from the foregoing discussion is that the
92
VSAI constructively dismissed the respondent. This ruling is in rhyme with
the findings of the Court of Appeals and the NLRC. Dismissal is the ultimate
penalty that can be meted to an employee. Inasmuch as petitioners failed to
adduce clear and convincing evidence to support the legality of respondent's
dismissal, the latter is entitled to reinstatement and back wages as a necessary
consequence. However, reinstatement is no longer feasible in this case because
of the palpable strained relations, thus, separation pay is awarded in lieu of
reinstatement.
x x x x
Indeed, the Court ought to deny this petition lest the wheels of justice
for aggrieved workingmen grind to a halt. We ought to abate the culture
of employers bestowing security of tenure to employees, not on the basis
of the latter's performance on the job, but on their ability to toe the line
set by their employer and endure in silence the flagrant incursion of their
rights, zealously protected by our labor laws and by the Constitution, no
less.47 (Emphasis and underscoring supplied)chanrobleslaw
Respondent's Floating Status
In placing respondent on "floating status," petitioner further acted arbitrarily and
unfairly, making life unbearable for her. In so doing, it treated respondent as if
she were a new hire; it improperly disregarded her experience, status,
performance, and achievements in the company; and most importantly,
respondent was illegally deprived of her salary and other emoluments. For her
single absence during training for the Bank of America account, she was refused
certification, and as a result, she was placed on floating status and her salary was
withheld. Clearly, this was an act of discrimination and unfairness considering
that she was not an inexperienced new hire, but a promising and award-winning
employee who was more than eager to succeed within the company. This
conclusion is not totally baseless, and is rooted in her outstanding performance at
the Washington Mutual account and her complaint regarding the incentives,
which only proves her zeal, positive work attitude, and drive to achieve financial
success through hard work. But instead of rewarding her, petitioner unduly
punished her; instead of inspiring her, petitioner dashed her hopes and dreams;
in return for her industry, idealism, positive outlook and fervor, petitioner left her
with a legacy of, and awful examples in, office politicking, intrigue, and
internecine schemes.
In effect, respondent's transfer to the Bank of America account was not only
jinreasonable, unfair, inconvenient, and prejudicial to her; it was effectively a
demotion in rank and diminution of her salaries, privileges and other benefits.
She was unfairly treated as a new hire, and eventually her salaries, privileges
and other benefits were withheld when petitioner refused to certify her and
instead placed her on floating status. Far from being an "accommodation" as
petitioner repeatedly insists, respondent became the victim of a series of illegal
punitive measures inflicted upon her by the former.
Besides, as correctly argued by respondent, there is no basis to place her on
"floating status" in the first place since petitioner continued to hire new
CSRs/TSRs during the period, as shown by its paid advertisements and
placements in leading newspapers seeking to hire new CSRs/TSRs and
employees.48True enough, the placing of an employee on "floating status"
presupposes, among others, that there is less work than there are
employees;49 but if petitioner continued to hire new CSRs/TSRs, then surely there
is a surplus of work available for its existing employees: there is no need at all to
place respondent on floating status. If any, respondent - with her experience,
knowledge, familiarity with the workings of the company, and achievements -
should be the first to be given work or posted with new clients/accounts, and not
new hires who have no experience working for petitioner or who have no related
experience at all. Once more, experience, common sense, and logic go against
the position of petitioner.
The CA could not be more correct in its pronouncement that placing an employee
on floating status presents dire consequences for him or her, occasioned by the
withholding of wages and benefits while he or she is not reinstated. To restate
what the appellate court cited, "[d]ue to the grim economic consequences to the
employee, the employer should bear the burden of proving that there are no
posts available to which the employee temporarily out of work can be
assigned."50 However, petitioner has failed miserably in this regard.
Resignation
93
While this Court agrees with the appellate court's observation that respondent's
resignation was involuntary as it became unbearable for her to continue with her
employment, expounding on the issue at length is unnecessary. Because she is
deemed constructively dismissed from the time of her illegal transfer, her
subsequent resignation became unnecessary and irrelevant. There was no longer
any position to relinquish at the time of her
Pecuniary Awards
With the foregoing pronouncements, an award of indemnity in favor of
respondent should be forthcoming. In case of constructive dismissal, the
employee is entitled to full backwages, inclusive of allowances, and other benefits
or their monetary equivalent, as well as separation pay in lieu of reinstatement.
The readily determinable amounts, as computed by the Labor Arbiter and
correspondingly reviewed and corrected by the appellate court, should be
accorded finality and deemed binding on this Court.cralawlawlibrary
Settled is the rule that that an employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges, and to his full backwages, inclusive of allowances and to his other
benefits or their monetary equivalent computed from the time his compensation
was withheld up to the time of actual reinstatement. If reinstatement is not
possible, however, the award of separation pay is proper.
Backwages and reinstatement are separate and distinct reliefs given to an
illegally dismissed employee in order to alleviate the economic damage brought
about by the employee's dismissal. "Reinstatement is a restoration to a state
from which one has been removed or separated" while "the payment of
backwages is a form of relief that restores the income that was lost by reason of
the unlawful dismissal." Therefore, the award of one does not bar the other.
In the case of Aliling v. Feliciano, citing Golden Ace Builders v. Talde, the Court
explained:
Thus, an illegally dismissed employee is entitled to two reliefs: backwages and
reinstatement. The two reliefs provided are separate and distinct. In instances
where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally
dismissed employee is entitled to either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and backwages. SO ORDERED.ch

The normal consequences of respondents' illegal dismissal, then, are

reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation
pay equivalent to one (1) month salary for every year of service should be
awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.51
chanrobleslaw

WHEREFORE, the Petition is DENIED. The assailed January 10, 2012 Decision
and May 28, 2012 Resolution of the Court of Appeals in CA-G.R. SP No. 109860
are AFFIRMED, with MODIFICATIONS, in that petitioner ICT Marketing
Services, Inc., now known as Sykes Marketing Services, Inc., is ordered
to PAY respondent Mariphil L. Sales the following:chanRoblesvirtualLawlibrary

1) Backwages and all other benefits from July 30,2007 until finality of this
Decision;ChanRoblesVirtualawlibrary

2) Separation pay equivalent to one (1) month salary for every year of
service;ChanRoblesVirtualawlibrary

3) Moral and exemplary damages in the amount of

P50,000.00;ChanRoblesVirtualawlibrary

4) Attorney's fees equivalent to ten percent (10%) of the total monetary award;
and

5) Interest of twelve per cent (12%) per annum of the total monetary awards,
computed from July 30, 2007 up to June 30, 2013, and thereafter, six per cent
(6%) per annum from July 1,2013 until their full satisfaction.

The appropriate Computation Division of the National Labor Relations Commission

is hereby ordered to COMPUTE and UPDATE the award as herein
determined WITH DISPATCH.

94
G.R. No. 198261 October 16, 2013
HECHANOVA BUGAY VILCHEZ LAWYERS, HECHANOVA & CO., INC., ATTY.
EDITHA R. HECHANOVA,Petitioners,
vs.
ATTY. LENY O. MATORRE, Respondent.
DECISION
VILLARAMA, JR., J.:
On appeal under Rule 45 is the March 14 2011 Decision 1 of the Court of Appeals
CA) which upheld the Decision2 of the National Labor Relations Commission
NLRC) that set aside the Decision3 of the Labor Arbiter in NLRC-NCR Case No. 09-
12260-08. Likewise challenged is the Resolution 4 denying reconsideration of the
said CA decision.
The assailed CA decision upheld the finding of the NLRC that respondent Atty.
Leny 0 Matorre Atty. Matorre) was constructively dismissed by petitioners
Hechanova Bugay Vilchez Lawyers HBV Law Firm), Hechanova Co., Inc. and Atty.
Editha R. Hechanova Atty. Hechanova). The Labor Arbiter, whose decision was
overturned by the NLRC had earlier dismissed the complaint filed by Atty.
Matorre alleging that she was constructively dismissed.5
The facts follow:
Atty. Matorre claimed that on August 1, 2008, she was employed by HBV Law
Firm as a Senior Associate Attorney. Due to her work experience, her
probationary period was waived and she was immediately employed as a regular
employee of the said law firm with a monthly salary of ₱40,000, consultancy fee
of ₱5,000, and an incentive pay equivalent to 8% of ₱1,500 per billable hour. 6
As the managing partner of HBV Law Firm, Atty. Hechanova was the one who
supervised Atty. Matorre and gave her work assignments.
On August 11, 2008, Atty. Matorre, orally or through e-mails, started to express
her feelings of being harassed by Atty. Hechanova.
95
In an e-mail7 sent to Atty. Hechanova on August 11, 2008, Atty. Matorre wrote:
Ma’am Edith,
I cannot register yet the corporate name of Big Flick Animation with SEC online
because the steps to be done require a lot of time and its system or our system is
very slow before I proceed to the next step [sic].
I regret to realize [sic] that you seem to be not pleased with my work output so
far, even if I am trying and doing my best to adjust with your work style here, x
x x.
Honestly, I get seriously offended every time you speak to me because you
always get irritated about the things I say, that I hesitate now to approach you
personally to find out what I need to know about a certain assignment.
I feel so humiliated whenever you scold me or whenever you raise your voice
within the hearing [sic] of x x x other associate lawyers at a distance [sic]. I feel
so embarrassed because it seems that you make it appear I am so stupid x x x.
xxxx
Hoping for your understanding and I pray that you would have a not-so-stressful
work schedule, so that you can keep your cool at all times.
Thanks a lot.
Leny
Atty. Matorre also explained8 that she intended to improve her work and that she
was not making excuses when she could not accomplish assigned tasks on time.
During a meeting between Atty. Matorre and Atty. Hechanova on August 19,
2008,9 Atty. Matorre told Atty. Hechanova that since she (Atty. Hechanova) was
not satisfied with her work and because they were frequently arguing with each
other, it would be best if she (Atty. Matorre) resigns from the firm.10 Atty.
Matorre requested that her resignation be made effective on September 30,
2008, but thinking that the said date was too far off, Atty. Hechanova accepted
the resignation, with the condition that it be made effective on September 15,
2008.11
Atty. Matorre, in her own Position Paper12 which she submitted to the NLRC,
admitted to the fact of her resignation. She recalled the conversation between
her and Atty. Hechanova thus:
Complainant [Atty. Matorre]: Ma’am kung sa tingin po ninyo, wala akong
ginagawa o magagawang trabaho, kahit na kung tutuusin araw-araw akong may
natatapos na trabaho, mas mabuti pa po sigurong mag-resign na lang ho ako,
kasi lagi na lang po ninyo akong hinahanapan ng mali at kinagagalitan kahit hindi
naman kailangang pagalitan.1âwphi1Hindi po tayo nagkakasundo sa trabaho.
Respondent [Atty. Hechanova]: Okay, if that is what you like!
Complainant [Atty. Matorre]: Pero Ma’am kung pwede po sana sa katapusan na
lang ang effectivity, sa katapusan po ng September, kasi alanganin po kung
katapusan ng August, para may enough time pa po ako maghanap ng new job.
Respondent [Atty. Hechanova]: No, you make it earlier! Pumunta ka na ng SEC
habang maaga pa kasi almost 2:00 p.m. na!
Complainant [Atty. Matorre]: Sige po.13
On September 1, 2008, Atty. Matorre received a letter14 from Atty. Hechanova
conveying the latter’s acceptance of her oral resignation. Atty. Hechanova’s
secretary, Gladies Nepomuceno, attested15 that when Atty. Matorre received the
aforementioned letter, Atty. Matorre merely said "okay" without displaying any
sign of protest.
On September 1, 2008, Atty. Matorre filed a complaint for constructive illegal
dismissal, nonpayment of separation pay, and for payment of moral and
exemplary damages and attorneys’ fees against HBV Law Firm.
96
During the mandatory conference on September 18, 2008, Atty. Matorre stated
that her demands consist of damages in the amount of ₱850,000 and a public
apology.16
During the conciliation conference on October 23, 2008, HBV Law Firm stated
that it has no offer for settlement.17
On November 13, 2008, during the conciliation conference, upon previous order
of the Labor Arbiter, HBV Law Firm gave Atty. Matorre’s last pay, consultancy fee,
and incentive pay in the total amount of ₱48,492.35.18
In a Decision19 dated April 22, 2009, the Labor Arbiter rendered judgment in
favor of HBV Law Firm by dismissing Atty. Matorre’s complaint for lack of merit.
It held that Atty. Matorre voluntarily resigned from her employment on August
19, 2008, and that Atty. Hechanova readily accepted Atty. Matorre’s oral
resignation "when as Atty. Matorre was in the process of orally tendering her
resignation, Atty. Hechanova intimated her intention of shortening the period of
effectivity of Atty. Matorre’s resignation from 30 September 2008 to 15
September 2008."20
The Labor Arbiter cited jurisprudence stating that "once resignation is accepted,
the employee no longer has any right to the job. It, therefore, goes without
saying that resignation terminates the employer-employee relationship."21
The Labor Arbiter also denied Atty. Matorre’s monetary claims since she was not
illegally dismissed, holding that these claims could not be awarded because of her
"failure to prove that she was terminated from her employment with the requisite
malice and/or bad faith."22
On May 13, 2010, the NLRC reversed23 the Decision of the Labor Arbiter and
declared that Atty. Matorre was illegally dismissed.
The NLRC held inter alia that a written resignation is the proper proof of her
alleged voluntary resignation.24 The NLRC also reasoned that Atty. Hechanova’s
act of moving Atty. Matorre’s last day of employment with HBV Law Firm from
September 30, 2008 to September 15, 2008 is an act of harassment. 25 This act,
according to the NLRC, pushed Atty. Matorre, leaving her with no other option or
time to save her job or look for another one.26 The NLRC stated that this, along
with Atty. Hechanova’s refusal to give Atty. Matorre any assignment, her
assignment of a subordinate to perform Atty. Matorre’s function while the latter
was still in the office, Atty. Hechanova’s continuing harassment are "all clear acts
constituting constructive dismissal."27
The NLRC thus awarded to Atty. Matorre full back wages and benefits from the
time of illegal dismissal amounting to ₱936,000, separation pay amounting to
₱90,000, moral damages amounting to ₱200,000, exemplary damages
amounting to ₱100,000, and attorney’s fees equivalent to 10% of the monetary
award.28
Aggrieved, HBV Law Firm filed a petition for certiorari with the CA alleging that
the NLRC committed grave abuse of discretion in holding that Atty. Matorre was
constructively dismissed. The CA posed this query to resolve the matter: Whether
Atty. Matorre’s utterance during her conversation with Atty. Hechanova on
August 19, 2008 constitutes voluntary resignation on her part. 29 If said
resignation was a forced one, the CA continued, it is a clear case of constructive
dismissal equivalent to illegal dismissal.30
On March 14, 2011, the CA upheld the ruling of the NLRC and held that no
voluntary resignation took place.31 It ruled in favor of Atty. Matorre, saying that
she was illegally dismissed in light of the circumstances surrounding the
supposed resignation.32
The CA cited jurisprudence saying that constructive dismissal is a cessation of
work because continued employment has been rendered impossible,
unreasonable, or unlikely, as when there is a demotion in rank or diminution in
pay or both or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee.33
The CA justified the existence of constructive dismissal by arguing that first, Atty.
Hechanova belittled Atty. Matorre regarding her work performance thus causing
her emotional strain; second, when Atty. Matorre allegedly tendered her
resignation, HBV Law Firm moved the period of effectivity thereof to an earlier
date, thus making it more difficult for Atty. Matorre to find employment
elsewhere; and third, the refusal of HBV Law Firm to give assignments to Atty.
97
Matorre while she was still at the office is indicative of harassment on their
part.34 The CA held that all these circumstances, taken together, constitute
constructive dismissal.35
Petitioners are now before this Court asserting that the CA erred in not finding
that Atty. Matorre’s resignation was voluntary and that she was not
constructively dismissed.
It should be noted that the fact of resignation is now undisputed. What remains
to be determined is whether Atty. Matorre voluntarily resigned or was
constructively dismissed by petitioners.
We find the petition meritorious. The resignation of Atty. Matorre was voluntary
and she was not constructively dismissed.
Atty. Matorre failed to prove that her resignation was not voluntary, and that
Atty. Hechanova and other members of HBV Law Firm committed acts against her
that would constitute constructive dismissal.
Atty. Matorre was not able to prove her allegations of harassment, insults, and
verbal abuse on the part of Atty. Hechanova.
The case of Vicente v. Court of Appeals (Former 17th Div.) 36 is instructive on this
matter. In the case at bar and in Vicente, the fact of resignation is not disputed,
but only the voluntariness thereof. In Vicente, the employee alleged that her
employer forced her to resign. The Court held that she voluntarily resigned and
was not constructively dismissed. The Court said, Hence, petitioner cannot take
refuge in the argument that it is the employer who bears the burden of proof that
the resignation is voluntary and not the product of coercion or intimidation.
Having submitted a resignation letter, it is then incumbent upon her to prove that
the resignation was not voluntary but was actually a case of constructive
dismissal with clear, positive, and convincing evidence. Petitioner failed to
substantiate her claim of constructive dismissal.
xxxx
We agree with the Court of Appeals that it was grave error on the part of the
NLRC to rely on the allegation that Mr. Tecson threatened and forced petitioner to
resign. Other than being unsubstantiated and self-serving, the allegation does
not suffice to support the finding of force, intimidation, and ultimately
constructive dismissal.
Bare allegations of constructive dismissal, when uncorroborated by the evidence
on record, cannot be given credence.37 (Emphases supplied.)
Digitel Telecommunications Philippines, Inc. v. Soriano38 is similarly enlightening.
In that case, the employee, a Director for Market and Communications, claimed
that her employers harassed her to compel her to resign. This Court found that
the employee failed to present a single witness to substantiate her claims of
harassment and that her narration of events was unbelievable and contrary to
human experience. It was then held that she failed to prove that she was
constructively dismissed.
In relation to the two abovementioned decided cases, in the case of Atty.
Matorre, she also presented no evidence of constructive dismissal, apart from her
self-serving and uncorroborated allegations.
First, Atty. Matorre was not able to present a single witness to corroborate her
claims of verbal abuse and insults from Atty. Hechanova. She was only able to
adduce transcriptions39 of what she claims were conversations between her and
Atty. Hechanova, and nothing more. These are indeed self-serving and
uncorroborated and should not be given evidentiary weight.
On the other hand, the body of evidence presented by HBV Law Firm would show
affidavits demonstrating that the other personnel in the said law firm neither
heard nor saw any inappropriate behavior on the part of Atty. Hechanova towards
Atty. Matorre.
The Affidavit of Gladies Nepomuceno,40 the secretary of HBV Law Firm, states
that the said affiant did "not believe that Atty. Matorre was treated like a slave"
by the firm, as Atty. Matorre argued.
98
The Affidavit of Gladys C. Vilchez,41 a partner at HBV Law Firm, states that Atty.
Vilchez, whose room was near Atty. Matorre’s, never heard Atty. Hechanova
shout at Atty. Matorre nor speak to her in an offensive manner.
Second, the act of HBV Law Firm of moving the effectivity date of Atty. Matorre’s
resignation from September 30, 2008 to September 15, 2008 is not an act of
harassment, as Atty. Matorre would have us believe. The 30-day notice
requirement for an employee’s resignation is actually for the benefit of the
employer who has the discretion to waive such period. Its purpose is to afford the
employer enough time to hire another employee if needed and to see to it that
there is proper turn-over of the tasks which the resigning employee may be
handling. As one author42 puts it,
x x x The rule requiring an employee to stay or complete the 30-day period prior
to the effectivity of his resignation becomes discretionary on the part of
management as an employee who intends to resign may be allowed a shorter
period before his resignation becomes effective. (Emphasis supplied.)
Moreover, the act of HBV Law Firm of moving the effectivity date of Atty.
Matorre’s resignation to an earlier date cannot be seen as a malicious decision on
the part of the firm in order to deprive Atty. Matorre of an opportunity to seek
new employment. This decision cannot be viewed as an act of harassment but
rather merely the exercise of the firm’s management prerogative. Surely, we
cannot expect employers to maintain in their employ employees who intend to
resign, just so the latter can have continuous work as they look for a new source
of income.
Third, the fact that HBV Law Firm was no longer assigning new work to Atty.
Matorre after her resignation is not an act of harassment, but is also an exercise
of management prerogative. Expecting that Atty. Matorre would no longer be
working for HBV Law Firm after three to four weeks, she was no longer given
additional assignments to ensure a smooth turn-over of duties and work. Indeed,
having an employee focus on her remaining tasks and not assigning new ones to
her would be beneficial on the part of HBV Law Firm as there would in fact be less
tasks to be turned over to Atty. Matorre’s replacement. Said actuation is well
within the ambit of the firm’s management prerogative, and is certainly not an
act of harassment.
To reiterate, in line with settled jurisprudence,43 since Atty. Matorre admittedly
resigned, it was incumbent upon her to prove that her resignation was not
voluntary, but was actually a case of constructive dismissal, with clear, positive,
and convincing evidence.

As shown above, Atty. Matorre failed to present any evidence of constructive

dismissal, such as proof of the alleged harassment, insults, and verbal abuse she
allegedly received during her stay at HBV Law Firm that led her to terminate her
employment. Thus, it can be concluded that she resigned voluntarily.

Since Atty. Matorre failed to prove that she was illegally or constructively
dismissed, there is no need to discuss the issue of her monetary claims due to
her lack of entitlement thereto.

WHEREFORE, the petition is GRANTED. The Decision dated March 14, 2011 and
Resolution dated August 12, 2011 of the Court of Appeals in CA-G.R. SP No.
115266 are REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated
April 22, 2009 is hereby REINSTATED. The complaint of respondent Atty. Leny O.
Matorre for illegal dismissal is DISMISSED in its entirety for lack of merit.

No pronouncement as to costs.

SO ORDERED.

99
G.R. No. 191154 April 7, 2014 working on recovering the lost data and asked for their patience for any possible
delay on her part in meeting deadlines.6
SPI TECHNOLOGIES, INC. and LEA VILLANUEVA, Petitioners,
vs. On November 13, 2006, Mapua retrieved the lost data with the assistance of
VICTORIA K. MAPUA, Respondent. National Bureau of Investigation Anti-Fraud and Computer Crimes Division. Yet,
Nolan informed Mapua that she was realigning Mapua’s position to become a
DECISION subordinate of co-manager Sameer Raina (Raina) due to her missing a work
deadline. Nolan also disclosed that Mapua’s colleagues were "demotivated" [sic]
REYES, J.: because she was "taking things easy while they were working very hard," and
that she was "frequently absent, under timing, and coming in late every time
The Court remains steadfast on its stand that the determination of the continuing [Maquera] goes on leave or on vacation."7
necessity of a particular officer or position in a business corporation is a
management prerogative, and the courts will not interfere unless arbitrary or On November 16, 2006, Mapua obtained a summary of her attendance for the
malicious action on the part of management is shown. Indeed, an employer has last six months to prove that she did not have frequent absences or under time
no legal obligation to keep more employees than are necessary for the operation when Maquera would be on leave or vacation. When shown to Nolan, she was
of its business.1 In the instant case however, we find our intrusion indispensable, merely told not to give the matter any more importance and to just move on. 8
to look into matters which we would otherwise consider as an exercise of
management prerogative. "Management prerogative" are not magic words In December 2006, Mapua noticed that her colleagues began to ostracize and
uttered by an employer to bring him to a realm where our labor laws cannot avoid her. Nolan and Raina started giving out majority of her research work and
reach. other duties under Healthcare and Legal Division to the rank-and-file staff. Mapua
lost about 95% of her work projects and job responsibilities.9
This is a petition for review on certiorari 2 under Rule 45 of the Rules of Court of
the Decision3 dated October 28, 2009 and Resolution4 dated January 18, 2010 of Mapua consulted these work problems with SPI’s Human Resource Director, Lea
the Court of Appeals (CA) in CA-G.R. SP. No. 107879. Villanueva (Villanueva), and asked if she can be transferred to another
department within SPI. Subsequently, Villanueva informed Mapua that there is an
The Facts intra-office opening and that she would schedule an exploratory interview for her.
However, due to postponements not made by Mapua, the interview did not
Victoria K. Mapua (Mapua) alleged that she was hired in 2003 by SPI materialize.
Technologies, Inc. (SPI) and was the Corporate Development’s
Research/Business Intelligence Unit Head and Manager of the company. On February 28, 2007, Mapua allegedly saw the new table of organization of the
Subsequently in August 2006, the then Vice President and Corporate Corporate Development Division which would be renamed as the Marketing
Development Head, Peter Maquera (Maquera) hired Elizabeth Nolan (Nolan) as Division. The new structure showed that Mapua’s level will be again downgraded
Mapua’s supervisor.5 because a new manager will be hired and positioned between her rank and
Raina’s.10
Sometime in October 2006, the hard disk on Mapua’s laptop crashed, causing her
to lose files and data. Mapua informed Nolan and her colleagues that she was On March 21, 2007, Raina informed Mapua over the phone that her position was
considered redundant and that she is terminated from employment effective

100
immediately. Villanueva notified Mapua that she should cease reporting for work
the next day. Her laptop computer and company mobile phone were taken right
away and her office phone ceased to function.11
Mapua was shocked and told Raina and Villanueva that she would sue them.
Mapua subsequently called her lawyer to narrate the contents of the termination
letter,12 which reads:
March 21, 2007
xxxx
Dear Ms. MAPUA,
xxxx
This notice of separation, effective March 21, 2007 should be regarded as
redundancy. Your separation pay will be computed as one month’s salary for
every year of service, a fraction of at least six months will be considered as one
year.
Your separation pay will be released on April 20, 2007 subject to your clearance
of accountabilities and as per Company policy.
x x x x13
Mapua’s lawyer, in a phone call, advised Villanueva that SPI violated Mapua’s
right to a 30-day notice.
On March 27, 2007, Mapua filed with the Labor Arbiter (LA) a complaint for illegal
dismissal, claiming reinstatement or if deemed impossible, for separation pay.
Afterwards, she went to a meeting with SPI, where she was given a second
termination letter,14 the contents of which were similar to the first one. 15
On April 25, 2007, Mapua received through mail, a third Notice of
Termination16 dated March 21, 2007 but the date of effectivity of the termination
was changed from March 21 to April 21, 2007. It further stated that her
101
separation pay will be released on May 20, 2007 and a notation was inscribed,
"refused to sign and acknowledge" with unintelligible signatures of witnesses.
On May 13, 2007, a recruitment advertisement17 of SPI was published in the
Philippine Daily Inquirer (Inquirer advertisement, for brevity). It listed all
vacancies in SPI, including a position for Marketing Communications Manager
under Corporate Support – the same group where Mapua previously belonged.
SPI also sent a demand letter18 dated May 15, 2007 to Mapua, asking her to pay
for the remaining net book value of the company car assigned to her under SPI’s
car plan policy. Under the said plan, Mapua should pay the remaining net book
value of her car if she resigns within five years from start of her employment
date.
In her Reply19 and Rejoinder,20 Mapua submitted an affidavit21 and alleged that
on July 16, 2007, Prime Manpower Resources Development (Prime Manpower)
posted an advertisement on the website of Jobstreet Philippines for the
employment of a Corporate Development Manager in an unnamed Business
Process Outsourcing (BPO) company located in Parañaque City. Mapua suspected
that this advertisement was for SPI because the writing style used was similar to
Raina’s. She also claimed that SPI is the only BPO office in Parañaque City at that
time. Thereafter, she applied for the position under the pseudonym of "Jeanne
Tesoro". On the day of her interview with Prime Manpower’s consultant, Ms.
Portia Dimatulac (Dimatulac), the latter allegedly revealed to Mapua that SPI
contracted Prime Manpower’s services to search for applicants for the Corporate
Development Manager position.
Because of these developments, Mapua was convinced that her former position is
not redundant. According to her, she underwent psychiatric counseling and
incurred medical expenses as a result of emotional anguish, sleepless nights,
humiliation and shame from being jobless. She also averred that the manner of
her dismissal was unprofessional and incongruous with her rank and stature as a
manager as other employees have witnessed how she was forced to vacate the
premises on the same day of her termination.
On the other hand, SPI stated that the company regularly makes an evaluation
and assessment of its corporate/organizational structure due to the unexpected
growth of its business along with its partnership with ePLDT and the acquisition of WHEREFORE, prescinding from the foregoing, the redundancy of [Mapua’s]
CyMed.22 As a result, SPI underwent a reorganization of its structure with the position being in want of factual basis, her termination is therefore hereby
objective of streamlining its operations. This was embodied in an Inter-Office declared illegal. Accordingly, she should be paid her backwages, separation pay
Memorandum23 dated August 28, 2006 issued by the company’s Chief Executive in lieu of reinstatement, moral and exemplary damages and attorney’s fees as
Officer.24 It was then discovered after assessment and evaluation that the duties follows:
of a Corporate Development Manager could be performed/were actually being
performed by other officers/managers/departments of the company. As proof
a) Backwages:
that the duties of Mapua are being/could be performed by other SPI officers and
employees, Villanueva executed an affidavit25 attesting that Mapua’s functions 03/21/07-06/30/08
are being performed by other SPI managers and employees.
₱67,996 x 15.30 mos. = ₱1,040,338.80
On March 21, 2007, the company, through Villanueva, served a written notice to
Mapua, informing her of her termination effective April 21, 2007. Mapua refused 13th Month Pay:
to receive the notice, thus, Villanueva made a notation "refused to sign and
acknowledge" on the letter. On that same day, SPI filed an Establishment ₱1,040,338.80/12= ₱520,169.40 ₱1,560,508.20
Termination Report with the Office of the Regional Director of the Department of
b) Separation Pay: (1 mo. per year of service)
Labor and Employment-National Capital Region (DOLE-NCR) informing the latter
of Mapua’s termination. Mapua was offered her separation and final pay, which
12/01/03-06/30/08 = 5.7 or 6 yrs.
she refused to receive. Before the effective date of her termination, she no longer
reported for work. SPI has not hired a Corporate Development Manager since ₱67,996.00 x 6 = 407,976.00
then.
c) Moral Damages: ₱500,000.00
SPI denied contracting the services of Prime Manpower for the hiring of a
Corporate Development Manager and emphasized that Prime Manpower did not d) Exemplary Damages: 250,000.00
even state the name of its client in the Jobstreet website. SPI also countered that
Dimatulac’s alleged revelation to Mapua that its client is SPI must be struck down e) Attorney’s Fees: 196,848.42
as mere hearsay because only Mapua executed an affidavit to prove that such
Total Award ₱2,915,332.62
disclosure was made. While SPI admitted the Inquirer advertisement, the
company stated that Mapua was a Corporate Development Manager and not a
Marketing Communications Manager, and that from the designations of these or a grand total of TWO MILLION NINE HUNDRED FIFTEEN THOUSAND
positions, it is obvious that the functions of one are entirely different from that of THREE HUNDRED THIRTY-TWO and 62/100 (₱2,915,332.62)Pesos only.
the other.26
Respondents are further ordered to award herein complainant the car
LA Decision assigned to her.

On June 30, 2008, the LA rendered a Decision,27 with the following dispositive SO ORDERED.28
portion:

102
Unrelenting, SPI appealed the LA decision to the National Labor
Relations Commission (NLRC).
NLRC Ruling
On October 24, 2008, the NLRC rendered its Decision, 29
with the fallo, as
follows:
WHEREFORE, the foregoing premises considered, the instant appeal is
hereby GRANTED. The Decision appealed from is REVERSED and SET
ASIDE, and a new one is issued finding the appellants not guilty of illegal
dismissal.
However, appellants are ordered to pay the sum of Three Hundred
Thirty[-]Four Thousand Five Hundred Thirty[-]Eight Pesos and Thirty[-
]Four Centavos ([P]334,538.34) representing her separation benefits
and final pay in the amount of [P]203,988.00 and [P]130,550.34,
respectively.
SO ORDERED.30
In ruling so, the NLRC held that "[t]he determination of whether
[Mapua’s] position as Corporate Development Manager is redundant is
not for her to decide. It essentially and necessarily lies within the sound
business management."31 As early as August 28, 2006, Ernest Cu, SPI’s
Chief Executive Officer, announced the corporate changes in the
company.
A month earlier, the officers held their Senior Management Strategic
Planning Session with the theme, "Transformation" or re-invention of
SPI purposely to create an organizational structure that is streamlined,
clear and efficient.32 In fact, Nolan and Raina, Mapua’s superiors were
actually doing her functions with the assistance of the pool of analysts,
as attested to by Villanueva.
103
At odds with the NLRC decision, Mapua elevated the case to the CA by
way of petition for certiorari, arguing that based on evidence, the LA
decision should be reinstated.
CA Ruling
Mapua’s petition was initially dismissed by the CA in its
Resolution dated March 25, 2009 for lack of counsel’s MCLE Compliance
33
number, outdated IBP and PTR numbers of counsel, and lack of affidavit
of service attached to the petition.
Mapua filed a motion for reconsideration which was granted by the CA,
reinstating the petition in its Resolution34 dated May 26, 2009.
On October 28, 2009, the CA promulgated its Decision,35 reinstating the
LA’s decree, viz:
WHEREFORE, in view of the foregoing, the assailed decision dated
October 24, 2008, as well as the resolution dated December 23, 2008 of
the National Labor Relations Commission in NLRC LAC No. 09-003262-08
(8) NLRC NCR CN. 00-03-02761-07 are hereby REVERSED and SET
ASIDE. The decision of the Labor Arbiter dated June 30, 2008 in NLRC-
NCR Case No. 00-03-02761-07 is hereby REINSTATED with
MODIFICATION in that the amount of 13th month pay of [P]520,169.40
is hereby reduced to [P]86,694.90.
SO ORDERED.36
SPI’s motion for reconsideration was denied on January 18, 2010. Thus,
through a petition for review on certiorari, SPI submitted the following
grounds for the consideration of this Court:
I
THE CA DECLARED AS ILLEGAL [MAPUA’S] SEPARATION FROM
SERVICE SOLELY ON THE BASIS OF HER SELF-SERVING AND
UNFOUNDED ALLEGATION OF A SUPPOSED JOB ADVERTISEMENT
 II
THE CA COMPLETELY DISREGARDED THE FACT THAT [MAPUA] WAS
VALIDLY SEPARATED FROM SERVICE ON THE GROUND OF
REDUNDANCY WHICH IS AN AUTHORIZED CAUSE FOR
TERMINATION OF EMPLOYMENT UNDER ARTICLE 283 OF THE
LABOR CODE AND PREVAILING JURISPRUDENCE
III
THE CA FOUND THAT [MAPUA] WAS NOT ACCORDED HER RIGHT
TO DUE PROCESS IN UTTER DEROGATION OF THE APPLICABLE
PROVISIONS OF THE LABOR CODE AND THE PERTINENT
JURISPRUDENCE
IV
THE CA COMPLETELY AFFIRMED THE AWARDS OF SEPARATION
PAY, BACKWAGES, DAMAGES AND ATTORNEY’S FEES IN THE [LA’S]
DECISION IN TOTAL DISREGARD OF THE APPLICABLE LAW AND
JURISPRUDENCE
V considered as one (1) whole year. (Emphasis ours)
THE CA UPHELD THE [LA’S] DECISION HOLDING INDIVIDUAL
PETITIONER SOLIDARILY AND PERSONALLY LIABLE TO [MAPUA]
WITHOUT SHOWING ANY BASIS THEREFOR37
Our Ruling
The Court sustains the CA’s ruling.
Mapua was dismissed from employment supposedly due to redundancy.
However, she contended that her position as Corporate Development
Manager is not redundant. She cited that SPI was in fact actively looking
for her replacement after she was terminated. Furthermore, SPI violated
104
her right to procedural due process when her termination was made
effective on the same day she was notified of it.
Article 283 of the Labor Code provides for the following:
ART. 283. Closure of establishment and reduction of personnel. – The
employer may also terminate the employment of any employee due to
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 worker and the Department of Labor and Employment at least one
(1) month before the intended date thereof. In case of termination due
to installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at
least one (1) month pay or to at least one (1) month pay for every year
of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses and
financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be
Expounding on the above requirements of written notice and separation
pay, this Court in Asian Alcohol Corporation v. NLRC 38 pronounced that
for a valid implementation of a redundancy program, the employer must
comply with the following requisites: (1) written notice served on both
the employee and the DOLE at least one month prior to the intended date
of termination; (2) payment of separation pay equivalent to at least one
month pay or at least one month pay for every year of service, whichever
is higher; (3) good faith in abolishing the redundant position; and (4)
fair and reasonable criteria in ascertaining what positions are to be
declared redundant.39
Anent the first requirement which is written notice served on both the
employee and the DOLE at least one month prior to the intended date of
termination, SPI had discharged the burden of proving that it submitted
a notice to the DOLE on March 21, 2007, stating therein that the effective
date of termination is on April 21, 2007. It is, however, quite peculiar
that two kinds of notices were served to Mapua. One termination letter
stated that its date of effectivity is on the same day, March 21, 2007. The
other termination letter sent through mail to Mapua’s residence stated
that the effective date of her termination is on April 21, 2007.
Explaining the discrepancy, SPI alleged that the company served a notice
to Mapua on March 21, 2007, which stated that the effective date of
termination is on April 21, 2007. However she refused to acknowledge or
accept the letter. Later on, Mapua requested for a copy of the said letter
but due to inadvertence and oversight, a draft of the termination letter
bearing a wrong effectivity date was given to her. To correct the
oversight, a copy of the original letter was sent to her through mail.40
Our question is, after Mapua initially refused to accept the letter, why did
SPI make a new letter instead of just giving her the first one – which the
Court notes was already signed and witnessed by other employees?
Curiously, there was neither allegation nor proof that the original letter
was misplaced or lost which would necessitate the drafting of a new one.
SPI did not even explain in the second letter that the same was being
sent in lieu of the one given to her. Hence, SPI must shoulder the
consequence of causing the confusion brought by the variations of
termination letters given to Mapua.
Also, crucial to the determination of the effective date of termination
was that Mapua was very specific as regards what happened
immediately after: "Ms. Villanueva had Ms. Mapua’s assigned laptop
computer and cellphone immediately taken by Human Resources
supervisor, Ms. Dhang Rondael. Within about an hour, Ms. Mapua’s
landline phone ceased to function after Ms. Villanueva’s and Mr. Raina’s
announcement." Her company I.D. was taken away from her that very
same day.41 To counter these statements, SPI merely stated that before
the effective date of Mapua’s termination on April 21, 2007, she no
longer reported for work. To this Court, this is insufficient rebuttal to the
precise narrative of Mapua.
105
On the matter of separation pay, there is no question that SPI indeed
offered separation pay to Mapua, but the offer must be accompanied
with good faith in the abolishment of the redundant position and fair and
reasonable criteria in ascertaining the redundant position. It is
insignificant that the amount offered to Mapua is higher than what the
law requires because the Court has previously noted that "a job is more
than the salary that it carries. There is a psychological effect or a stigma
in immediately finding one’s self laid off from work." 42
Moving on to the issue of the validity of redundancy program, SPI
asserted that an employer has the unbridled right to conduct its own
business in order to achieve the results it desires. To prove that
Villanueva’s functions are redundant, SPI submitted an Inter-Office
Memorandum43 and affidavit executed by its Human Resources Director,
Villanueva. The pertinent portions of the memorandum read:
ORGANIZATION STRUCTURE
One of the most important elements of successfully effecting change is
to create an organization structure that is streamlined, clear and
efficient. We think we have done that and the new format is illustrated in
Attachment A. The upper part shows my direct reports who are heads of
the various shared services departments and the lower part shows the
set up of the business units. The important features of the structure are
discussed in the following sections. For brevity, I have purposely not
summarized the roles that will remain the same.
xxxx
Corporate Development
Peter Maquera will continue to head Corporate Development but the
group’s scope will be expanded to include Marketing across the whole
company. Essentially, Marketing will be taken out of the business units
and centralized under Corporate Development. Elizabeth Nolan will move
from her role as Publishing’s VP of Sales and Marketing to become the
head of Global Marketing. The unit will continue to focus on
strengthening the SPI brand, while at the same time maximizing the
effectiveness of our spending. Josie Gonzales, head of Corporate
Relations, will also be transitioned to Corporate Development. 44
The memorandum made no mention that the position of the Corporate
Development Manager or any other position would be abolished or
deemed redundant. In this regard, may the affidavit of Villanueva which
enumerated the various functions of a Corporate Development Manager
being performed by other SPI employees be considered as sufficient
proof to uphold SPI’s redundancy program?
In AMA Computer College, Inc. v. Garcia, et al.,45 the Court held that the
presentation of the new table of the organization and the certification of
the Human Resources Supervisor that the positions occupied by the
retrenched employees are redundant are inadequate as evidence to
support the college’s redundancy program. The Court quotes the related
portion of its ruling:
In the case at bar, ACC attempted to establish its streamlining program
by presenting its new table of organization. ACC also submitted a
certification by its Human Resources Supervisor, Ma. Jazmin Reginaldo,
that the functions and duties of many rank and file employees, including
the positions of Garcia and Balla as Library Aide and Guidance Assistant,
respectively, are now being performed by the supervisory employees.
These, however, do not satisfy the requirement of substantial evidence
that a reasonable mind might accept as adequate to support a
conclusion. As they are, they are grossly inadequate and mainly self-
serving. More compelling evidence would have been a comparison of the
old and new staffing patterns, a description of the abolished and newly
created positions, and proof of the set business targets and failure to
attain the same which necessitated the reorganization or
streamlining.46(Citations omitted and emphasis ours)
Also connected with the evidence negating redundancy was SPI’s
publication of job vacancies after Mapua was terminated from
employment. SPI maintained that the CA erred when it considered
Mapua’s self-serving affidavit as regards the Prime Manpower
106
advertisement because the allegations therein were based on Mapua’s
unfounded suspicions. Also, the failure of Mapua to present a sworn
statement of Dimatulac renders the former’s statements hearsay.
Even if we disregard Mapua’s affidavit as regards the Prime Manpower
advertisement, SPI admitted that it caused the Inquirer advertisement
for a Marketing Communications Manager position. 47 Mapua alleged that
this advertisement belied the claim of SPI that her position is redundant
because the Corporate Development division was only renamed to
Marketing division.
Instead of explaining how the functions of a Marketing Communications
Manager differ from a Corporate Development Manager, SPI hardly
disputed Mapua when it stated that, "[j]udging from the titles or
designation of the positions, it is obvious that the functions of one are
entirely different from that of the other." 48 SPI, being the employer, has
possession of valuable information concerning the functions of the
offices within its organization. Nevertheless, it did not even bother to
differentiate the two positions.
Furthermore, on the assumption that the functions of a Marketing
Communications Manager are different from that of a Corporate
Development Manager, it was not even discussed why Mapua was not
considered for the position. While SPI had no legal duty to hire Mapua as
a Marketing Communications Manager, it could have clarified why she is
not qualified for that position. In fact, Mapua brought up the subject of
transfer to Villanueva and Raina several times prior to her termination
but to no avail. There was even no showing that Mapua could not
perform the duties of a Marketing Communications Manager.
Therefore, even though the CA based its ruling only on the Prime
Manpower advertisement coupled with the purported disclosure to
Mapua, the Court holds that the confluence of other factors supports the
said ruling.
The Court does not agree with the rationalization of the NLRC that "[i]f it
were true that her position was not redundant and indispensable, then
the company must have already hired a new one to replace her in order
not to jeopardize its business operations. The fact that there is none only
proves that her position was not necessary and therefore superfluous."49
What the above reasoning of the NLRC failed to perceive is that "[o]f
primordial consideration is not the nomenclature or title given to the
employee, but the nature of his functions."50 "It is not the job title but
the actual work that the employee performs."51 Also, change in the job
title is not synonymous to a change in the functions. A position cannot be
abolished by a mere change of job title. In cases of redundancy, the
management should adduce evidence and prove that a position which
was created in place of a previous one should pertain to functions which
are dissimilar and incongruous to the abolished office.
Thus, in Caltex (Phils.), Inc. (now Chevron Phils., Inc.) v. NLRC, 52 the
Court dismissed the employer’s claim of redundancy because it was
shown that after declaring the employee’s position of Senior Accounting
Analyst as redundant, the company opened other accounting positions
(Terminal Accountant and Internal Auditor) for hiring. There was no
showing that the private respondent therein could not perform the
functions demanded of the vacant positions, to which he could be
transferred to instead of being dismissed.
On the issue of the solidary obligation of the corporate officers
impleaded vis-à-vis the corporation for Mapua’s illegal dismissal, "[i]t is
hornbook principle that personal liability of corporate directors, trustees
or officers attaches only when: (a) they assent to a patently unlawful act
of the corporation, or when they are guilty of bad faith or gross
negligence in directing its affairs, or when there is a conflict of interest
resulting in damages to the corporation, its stockholders or other
persons; (b) they consent to the issuance of watered down stocks or
when, having knowledge of such issuance, do not forthwith file with the
corporate secretary their written objection; (c) they agree to hold
themselves personally and solidarily liable with the corporation; or (d)
they are made by specific provision of law personally answerable for
their corporate action."53
107
While the Court finds Mapua’s averments against Villanueva, Nolan,
Maquera and Raina as detailed and exhaustive, the Court takes notice
that these are mostly suppositions on her part. Thus, the Court cannot
apply the above-enumerated exceptions when a corporate officer
becomes personally liable for the obligation of a corporation to this case.
With respect to the vehicle under the company car plan which the LA
awarded to Mapua, the Court rules that the subject matter is not within
the jurisdiction of the LA but with the regular courts, the remedy being
civil in nature arising from a contractual obligation, following this Court’s
ruling in several cases.54
The Court sustains the CA’s award of moral and exemplary damages.
Award of moral and exemplary damages for an illegally dismissed
employee is proper where the employee had been harassed and
arbitrarily terminated by the employer. Moral damages may be awarded
to compensate one for diverse injuries such as mental anguish,
besmirched reputation, wounded feelings, and social humiliation
occasioned by the employer’s unreasonable dismissal of the employee.
The Court has consistently accorded the working class a right to recover
damages for unjust dismissals tainted with bad faith; where the motive
of the employer in dismissing the employee is far from
noble.1âwphi1 The award of such damages is based not on the Labor
Code but on Article 220 of the Civil Code.55 However, the Court observes
that the CA decision affirming the LA’s award of ₱500,000.00 and
₱250,000.00 as moral and exemplary damages, respectively, is evidently
excessive because the purpose for awarding damages is not to enrich the
illegally dismissed employee. Consequently, the Court hereby reduces
the amount of ₱50,000.00 each as moral and exemplary damages.56
Mapua is also entitled to attorney’s fees but the Court is modifying the
amount of ₱196,848.42 awarded by the LA and fix such attorney’s fees in
the amount of ten percent (10%) of the total monetary award, pursuant
to Article 11157 of the Labor Code.
WHEREFORE, the Decision dated October 28, 2009 and Resolution dated
January 18, 2010 of the Court of Appeals in CA-G.R. SP. No. 107879 are
hereby AFFIRMED with the following MODIFICATIONS:

1. Moral and exemplary damages is hereby reduced to ₱50,000.00

each; and

2. Attorney's fees shall be computed at ten percent (10%) of the

aggregate monetary award.

The monetary awards shall earn interest at the rate of six percent (6%)
per annum from the time of respondent Victoria K. Mapua's illegal
dismissal until finality of this Decision, and twelve percent (12%) legal
interest thereafter until fully paid.

Petitioner SPI Technologies, Inc. shall be liable for the foregoing awards.

SO ORDERED.

108
G.R. No. 190389, April 19, 2017 The first notice of strike was amended twice by Manggagawa ng Komunikasyon
sa Pilipinas.11 On its second amendment dated November 4, 2002, docketed as
MANGGAGAWA NG KOMUNIKASYON SA NCMB-NCR-NS No. 11-405-02,12Manggagawa ng Komunikasyon sa Pilipinas
PILIPINAS, Petitioner, v. PHILIPPINE LONG DISTANCE TELEPHONE accused Philippine Long Distance Telephone Company of the following unfair
COMPANY INCORPORATED, Respondent. labor practices:

G.R. No. 190390 UNFAIR LABOR PRACTICES, to wit:

MANGGAGAWA NG KOMUNIKASYON SA 1. PLDT's abolition of the Provisioning Support Division. Such action,
PILIPINAS, Petitioner, v. PHILIPPINE LONG DISTANCE TELEPHONE together with the consequent redundancy of PSD employees and the
COMPANY INCORPORATED, Respondent. farming out of the jobs to casuals and contractuals, violates the duty to
bargain collectively with MKP in good faith.
DECISION
2. PLDT's unreasonable refusal to honor its commitment before this
LEONEN, J.: Honorable Office that it will provide MKP its comprehensive planls with
respect to personnel downsizing/ reorganization and closure of exchanges.
An employer's declaration of redundancy becomes a valid and authorized cause Such refusal violates its duty to bargain collectively with MKP in good
for dismissal when the employer proves by substantial evidence that the services faith.
of an employee are more than what is reasonably demanded by the requirements
of the business enterprise.1 3. PLDT's continued hiring of "contractual," "temporary," "project," and
"casual" employees for regular jobs performed by union members,
This resolves the Petition for Review on Certiorari2 filed by Manggagawa ng resulting in the decimation of the union membership and in the denial of
Komunikasyon sa Pilipinas assailing the Court of Appeals' Decision3 dated August the right to self-organization to the concerned employees.13
28, 2008 and Resolution4 dated November 24, 2009 in CA-G.R. SP No. 94365 and
CA-G.R. SP No. 98975. CA-G.R. SP No. 94365 upheld the October 28, 20055 and On November 11, 2002, while the first notice of strike was pending, Manggagawa
January 31, 20066 Resolutions of the National Labor Relations Commission in ng Komunikasyon sa Pilipinas filed another notice of strike,14 docketed as NCMB-
NLRC Certified Case No. 000232-03 (NLRC NCR NS 11-405-02 & 11-412-02). In NCR-NS No. 11-412-02, and accused Philippine Long Distance Telephone
turn, CA-G.R. SP No. 98975 upheld the Secretary of Labor and Employment's Company of:chanRoblesvirtualLawlibrary
August 11, 2006 Resolution7 and March 16, 2007 Order.8 UNFAIR LABOR PRACTICES, to wit:

On June 27, 2002, the labor organization Manggagawa ng Komunikasyon sa
Pilipinas, which represented the employees of Philippine Long Distance Telephone
Company, filed a notice of strike with the National Conciliation and Mediation
Board.9 Manggagawa ng Komunikasyon sa Pilipinas charged Philippine Long
Distance Telephone Company with unfair labor practice "for transferring several
employees of its Provisioning Support Division to Bicutan, Taguig." 10
109
1. PLDT's alleged restructuring of its [Greater Metropolitan Manila]
Operation Services December 31, 2002 and its closure of traffic
operations at the Batangas, Calamba, Davao, Iloilo, Lucena,
Malolos and Tarlac Regional Operator Services effective December
31, 2002. These twin moves unjustly imperil the job security of
503 of MKP's members and will substantially decimate the parties'
bargaining unit. And in the light of PLDT's previous commitment
before this Honorable Office that it will provide MKP its
 comprehensive plan/s with respect to personnel insofar as it created a distinction among the striking workers in the return-to-
downsizing/reorganization and closure of exchanges and of its work order. The petition was docketed as CA-G.R. SP No. 76262.20
more recent declaration that the Davao operator services will not
be closed, these moves are treacherous and are thus violative of On November 25, 2003, the Court of Appeals granted the Petition for Certiorari,
PLDT's duty to bargain collectively with MKP in good faith. That setting aside and nullifying the Secretary of Labor and Employment's assailed
these moves were effected with PLDT paying only lip service to its Order.21
duties under Art. III, Section 8 of the parties' CBA do [sic] signifies
PLDT's gross violation of said CBA.15 The Philippine Long Distance Telephone Company appealed the Court of Ap eals'
Decision to this Court. The appeal was docketed as G.R. No. 162783. 22
On December 23, 2002, Manggagawa ng Komunikasyon sa Pilipinas went on
strike.16 On July 14, 2005,23 this Court upheld the Court of Appeals' Decision, and directed
Philippine Long Distance Telephone Company to readmit all striking workers
On December 31, 2002, Philippine Long Distance Telephone Company declared under the same terms and conditions prevailing before the strike. This Court
only 323 employees as redundant as it was able to redeploy 180 of the 503 held:chanRoblesvirtualLawlibrary
affected employees to other positions.17 As Article 263(g) is clear and unequivocal in stating that ALL striking or locked
out employees shall immediately return to work and the employer shall
On January 2, 2003, the Secretary of Labor and Employment certified the labor immediately resume operations and readmit ALL workers under the same terms
dispute for compulsory arbitration.18 The dispositive portion of the Secretary of and conditions prevailing before the strike or lockout, then the unmistakable
Labor and Employment's Order read as follows:chanRoblesvirtualLawlibrary mandate must be followed by the Secretary.24
WHEREFORE, FOREGOING PREMISES CONSIDERED, this Office hereby CERTIFIES On October 28, 2005, the National Labor Relations Commission dismissed
the labor dispute at the Philippine Long Distance Telephone Company to the Manggagawa ng Komunikasyon sa Pilipinas' charges of unfair labor practices
National Labor Relations Commission (NLRC) for compulsory arbitration pursuant against Philippine Long Distance Telephone Company.25
to Article 263 (g) of the Labor Code, as amended.
The National Labor Relations Commission held that Philippine Long Distance
Accordingly, the strike staged by the Union is hereby enjoined. All striking Telephone Company's redundancy program in 2002 was valid and did not
workers are hereby directed to return to work within twenty four (24) hours from constitute unfair legal practice.26 The redundancy program was due to the decline
receipt of this Order, except those who were terminated due to redundancy. The of subscribers for long distance calls and to fixed line services produced by
employer is hereby enjoined to accept the striking workers under the same terms technological advances in the communications industry.27 The National Labor
and conditions prevailing prior to the strike. The parties are likewise directed to Relations Commission ruled that the termination of employment of Philippine
cease and desist from committing any act that might worsen the situation. Long Distance Telephone Company's employees due to redundancy was
legal.28 The dispositive portion of the National Labor Relations Commission's
Let the entire records of the case be forwarded to the NLRC for its immediate and Resolution read:chanRoblesvirtualLawlibrary
appropriate action. WHEREFORE, premises considered, the Union[']s charge of unfair labor practice
against PLDT is ordered DISMISSED for lack of merit.
SO ORDERED.19
Manggagawa ng Komunikasyon sa Pilipinas filed a Petition for Certiorari before SO ORDERED.29
the Court of Appeals, challenging the Secretary of Labor and Employment's Order

110
On January 31, 2006, the National Labor Relations Commission denied As for CA-G.R. SP No. 98975, the Court of Appeals confirmed that its assailed
Manggagawa ng Komunikasyon sa Pilipinas' motion for reconsideration. 30 order of reinstatement indicated that all employees, even those declared
separated effective December 31, 2002, should be reinstated pendente
On May 8, 2006, Manggagawa ng Komunikasyon sa Pilipinas filed a Petition lite.42 However, the Court of Appeals stated that the order of reinstatement
for Certiorari31 with the Court of Appeals. The petition was docketed as CA-G.R. became moot due to the National Labor Relations Commission's October 28, 2005
SP No. 94365, and it assailed the National Labor Relations Commission's Decision, which upheld the validity of the dismissal of the employees affected by
resolutions, which upheld the validity of Philippine Long Distance Telephone the redundancy program.43
Company's redundancy program.32
The Court of Appeals also denied Manggagawa ng Komunikasyon sa Pilipinas'
On August 11, 2006, the Secretary of Labor and Employment dismissed prayer that:chanRoblesvirtualLawlibrary
Manggagawa ng Komunikasyon sa Pilipinas' Motion for Execution 33 of this Court's [T]he affected employees should at least be paid their salaries during the period
July 14, 2005 Decision.34 from January 3, 2003 (the working day immediately following the effectivity of
their separation) to April 29, 2006 (the date when the October 28, 2005 decision
On March 16, 2007, the Secretary of Labor and Employment of the NLRC (declaring the employees' dismissal as valid) became final and
denied Manggagawa ng Komunikasyon sa Pilipinas' motion for reconsideration. 36
35
executory.44
The Court of Appeals compared the case to an illegal dismissal case where the
On May 21, 2007, Manggagawa ng Komunikasyon sa Pilipinas filed a Petition Labor Arbiter found for the employee and ordered the payroll reinstatement of
for Certiorari37 before the Court of Appeals, assailing the August 11, 2006 the employee; however, the finding of illegality was later reversed on appeal. 45
Resolution and March 16, 2007 Order of the Secretary of Labor and Employment.
The petition was docketed as CA-G.R. SP No. 98975. The dispositive portion of the Court of Appeals' Decision
read:chanRoblesvirtualLawlibrary
The Court of Appeals consolidated CA-G.R. SP No. 94365 with CA G.R. SP No. WHEREFORE, the PETITIONS FOR CERTIORARI IN CA-G.R. SP Nos. 94365 and
98975, and dismissed Manggagawa ng Komunikasyon sa Pilipinas' appeals on 98975 are DISMISSED for lack of merit.
August 28, 2008.38
SO ORDERED.46 (Emphasis in the original)
For CA-G.R. SP No. 94365, the Court of Appeals ruled that the National Labor On November 24, 2009, the Court of Appeals denied Manggagawa ng
Relations Commission did not commit grave abuse of discretion when it found Komunikasyon sa Pilipinas' motion for reconsideration.47
that Philippine Long Distance Telephone Company's declaration of redundancy
was justified and valid, as the redundancy program was based on substantial In its Petition for Review on Certiorari, Manggagawa ng Komunikasyon sa
evidence.39 Pilipinas states that employees in the Provisioning Support Division and in the
Operator Services Section had their positions declared redundant in
The Court of Appeals also found that Philippine Long Distance Telephone 2002.48 Manggagawa ng Komunikasyon sa Pilipinas asserts that the total number
Company's 2002 declaration of redundancy "was not attended by [unfair labor of rank-and-file positions actually declared redundant was 538, or 35 positions in
practice] ... [because it was] transparent and forthright in its implementation of the Provisioning Support Division and 503 positions in the Operator Services
the redundancy program."40 Philippine Long Distance Telephone Company also Section.49
successfully redeployed 180 of the 503 affected emp1oyees to other positions. 41
Manggagawa ng Komunikasyon sa Pilipinas maintains that Philippine Long

111
Distance Telephone Company failed to submit evidence in support of its Komunikasyon sa Pilipinas' resort to interrogatories has been denied with finality
declaration of redundancy of the 35 rank-and-file employees in the Provisioning by the Court of Appeals.60 It also claims that the National Labor Relations
Support Division.50 It claimed that "[Philippine Long Distance Telephone Commission's Rules of Procedure do not allow the use of discovery proceedings;
Company] only notified [the Department of Labor and Employment] of the thus, Manggagawa ng Komunikasyon sa Pilipinas cannot assert that their resort
'closure of traffic operations at Regional Operator Services affecting three to interrogatories is a matter of procedural right.61
hundred ninety-two (392) employees and the restructuring of [Greater
Metropolitan Manila] Operator Services affecting one hundred eleven (111) Philippine Long Distance Telephone Company states that neither the Court of
employees.'"51 Manggagawa ng Komunikasyon sa Pilipinas asserts that there was Appeals nor the Supreme Court ordered the reinstatement of Manggagawa ng
no notice given regarding the closure of Philippine Long Distance Telephone Komunikasyon sa Pilipinas' members, since their decisions set aside Secretary of
Company's Provisioning Support Division, and the termination of employment due Labor and Employment's January 2, 2003 Order.62 The order enjoined the striking
to redundancy of the affected rank-and-file employees.52 It points out that the workers to return to work, except those who were terminated due to
justifications for the redundancy put forth by Philippine Long Distance Telephone redundancy.63Philippine Long Distance Telephone Company asserts that "what
Company "only pertained to the affected operator services positions and not the controls execution is the dispositive or decretal statement of the [d]ecision
affected [Provisioning Support Division] positions."53 sought to be executed."64 Furthermore, Philippine Long Distance Telephone
Company maintains that the Court of Appeals correctly ruled that the
Manggagawa ng Komunikasyon sa Pilipinas also maintains that the National Labor reinstatement of the excluded employees was rendered moot when the National
Relations Commission committed grave abuse of discretion when it disallowed the Labor Relations Commission upheld its redundancy program. 65
written interrogatories that Manggagawa ng Komunikasyon sa Pilipinas
submitted.54 Finally, Philippine Long Distance Telephone Company holds that Garcia is not
applicable because the case at bar does not involve a reinstatement award by a
As for the issue of reinstatement pendente lite, Manggagawa ng Komunikasyon Labor Arbiter.66
sa Pilipinas cites Garcia v. Philippine Airlines, Inc.55 to bolster its stand. It holds
that an employee is entitled to reinstatement or backwages pending appeal if the We resolve the following issues:
Labor Arbiter's finding of illegal dismissal is later on reversed by the National
Labor Relations Commission.56 First, whether the Court of Appeals committed grave abuse of discretion in
upholding the validity of Philippine Long Distance Telephone Company's 2002
For its part, Philippine Long Distance Telephone Company claims that the validity redundancy program; and
of redundancy of the affected Provisioning Support Division employees was only
raised by Manggagawa ng Komunikasyon sa Pilipinas for the first time on Second, whether the return-to-work order of the Secretary of Labor and
appeal.57 Philippine Long Distance Telephone Company asserts that the real issue Employment was rendered moot when the National Labor Relations Commission
in that case was whether Philippine Long Distance Telephone Company was upheld the validity of the redundancy program.
obligated to transfer the affected Provisioning Support Division employees, and
not whether their redundancies were valid.58Philippine Long Distance Telephone The Petition is partly meritorious.
Company maintains that the affected Provisioning Support Division personnel
were given the opportunity to apply for another division, yet they chose not to.59 I

Philippine Long Distance Telephone Company avers that Manggagawa ng A petition for review on certiorari under Rule 45 is a mode of appeal where the

112
issue is limited only to questions of law.67 In labor cases, a Rule 45 petition "can
prosper only if the Court of Appeals ... fails to correctly determine whether the
National Labor Relations Commission committed grave abuse of discretion." 68
A court or tribunal is said to have acted with grave abuse of discretion when it
capriciously acts or whimsically exercises judgment to be "equivalent to lack of
jurisdiction."69 Furthermore, the abuse of discretion must be so flagrant to
amount to a refusal to perform a duty or to act as provided by law. 70
Career Philippines Shipmanagement, Inc. v. Serna,71 citing Montoya v.
Transmed,72 provides the parameters of judicial review for a labor case under
Rule 45:chanRoblesvirtualLawlibrary
As a rule, only questions of law may be raised in a Rule 45 petition. In one case,
we discussed the particular parameters of a Rule 45 appeal from the CA's Rule 65
decision on a labor case, as follows:chanRoblesvirtualLawlibrary
In a Rule 45 review, we consider the correctness of the assailed CA decision, in
contrast with the review for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions of law raised against
the assailed CA decision. In ruling for legal correctness, we have to view the CA
decision in the same context that the petition for certiorari it ruled upon was
presented to it; we have to examine the CA decision from the prism of whether it
correctly determined the presence or absence of grave abuse of discretion in the
NLRC decision before it, not on the basis of whether the NLRC decision on the
merits of the case was correct. In other words, we have to be keenly aware that
the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it.73 (Emphasis in the original)
Justice Arturo D. Brion's dissent in Abbot Laboratories, Philippines v.
Alcaraz74 thereafter laid down the guidelines to be followed in reviewing a petition
for review under Rule 45:chanRoblesvirtualLawlibrary
If the NLRC ruling has basis in the evidence and the applicable law and
jurisprudence, then no grave abuse of discretion exists and the CA should so
declare and, accordingly, dismissthe petition. If grave abuse of discretion exists,
We shall adopt these parameters in resolving the substantive issues in the
Petition.
II
Redundancy is one of the authorized causes for the termination of employment
provided for in Article 29876 of the Labor Code, as amended:
Article 298. 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. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (112) month pay for every year of service, whichever is higher.
A fraction of at least six (6) months shall be considered one (1) whole year.
Wiltshire File Co. Inc. v. National Labor Relations Commission 77 has explained
that redundancy exists when "the services of an employee are in excess of what
is reasonably demanded by the actual requirements of the enterprise." 78
While a declaration of redundancy is ultimately a management decision in
exercising its business judgment, and the employer is not obligated to keep in its
payroll more employees than are needed for its day to-day
operations, management must not violate the law nor declare redundancy
79

then the CA must grant the petition and nullify the NLRC ruling, entering at the without sufficient basis.80
same time the ruling that is justified under the evidence and the governing law,
rules and jurisprudence. In our Rule 45 review, this Court must deny the petition Asian Alcohol Corporation v. National Labor Relations Commission 81 listed down
if it finds that the CA correctly acted.75 (Emphasis in the original) the elements for the valid implementation of a redundancy
program:chanRoblesvirtualLawlibrary

113
For the implementation of a redundancy program to be valid, the employer must reduction."85 It has attributed the reduction of demand for operatorassisted
comply with the following requisites: (1) written notice served on both the 108/109 calls to "migration calls to direct distance dialing," and to "more
employees and the Department of Labor and Employment at least one month usage/substitution of text message over voice." 86 It has added that "migration of
prior to the intended date of retrenchment; (2) payment of separation pay calls from landline to cell," competitors' eating into the Philippine Long Distance
equivalent to at least one month pay or at least one month pay for every year of Telephone Company's market, and "compliance with the regulatory requirement
service, whichever is higher; (3) good faith in abolishing the redundant positions; of local integration per province" likewise aggravated the situation. 87
and (4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished.82 (Citations omitted) Philippine Long Distance Telephone Company claims that the pattern of decline
To establish good faith, the company must provide substantial proof that the with operator-assisted calls has been consistent through the years,88 and it has
services of the employees are in excess of what is required of the company, and summarized the challenges facing its long distance services as
that fair and reasonable criteria were used to determine the redundant follows:chanRoblesvirtualLawlibrary
positions.83
(a) international long distance revenues in 2001 stood at P11.4 billion; in
In order to prove the validity of its redundancy program, Philippine Long Distance 2002, this declined to P10.6 billion (pg. 33, PLDT's Financial Statement and
Telephone Company has presented data on the decreasing volume of the Annual Report; Atmex "4-A") - a decrease of P813 million. More drastically,
received calls by the Operator Services Center for the years 1996 to 2002: 84 this figure stood at P18.2 billion in 1997, indicating that international long
distance call revenue has declined to the tune of P8 billion in five years.
RECEIVED CALLS
(b) national long distance revenues in 2001 were P8.388 billion in 2001; in
YEAR 108 109 TOTAL 2002, this declined to P7.6 billion (pg. 35, PLDT's Financial Statement and
Annual Report; Annex "4-B") a decrease of P719 million. As with
1996 33,641,751 430,125,633 463,767,384 international calls, there is a pattern on decline: PLDT earned P10.6 billion
from this service in 2000, so it is accurate to say that the company has
1997 34,834,800 318,942,573 353,777,373 seen revenue from national long distance decline by more than a billion
pesos a year.89
1998 28,651,703 209,458,041 238,109,744
The National Labor Relations Commission has found that Philippine Long Distance
Telephone Company was able to discharge its burden of proving that its
1999 24,797,870 212,363,846 237,161,716
redundancy measures had substantial basis:chanRoblesvirtualLawlibrary
Guided by the foregoing jurisprudence, it is evident that PLDT discharged the
2000 21,697,367 218,380,277 240,077,644 burden of proving that the declaration or implementation of redundancy
measures have basis. For one, PLDT experienced a decline of subscribers, long
2001 15,773,988 158,310,276 174,084,264 distance calls, operated both local and abroad, has declined, landline or fixed line
services also declined. This decrease of the need of PLDT services resulted from
2002 14,363,918 114,430,469 128,794,387 the advent of wireless telephone, of texting as means of communication, the use
of direct dialing including prepaid telesulit and teletipid measures introduced in
Philippine Long Distance Telephone Company has stated that "from 1996 to
the communication services. For another, PLDT has a debt burden of P70 billion
2002, the [t]otal [d]emand of [c]alls dropped by 334,972,997 or a 72%

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pesos and it cannot subsidize the salaries of employees whose positions are employees terminated due to redundancy. For either redundancy or
redundant.90 retrenchment, the law requires that the employer give separation pay equivalent
The Court of Appeals echoed the findings of the National Labor Relations to at least one (1) month pay of the affected employee, or at least one (1) month
Commission regarding the validity of Philippine Long Distance Telephone pay for every year of service, whichever is higher. The employer must also serve
Company's redundancy measures:chanRoblesvirtualLawlibrary a written notice on both the employees and the Department of Labor and
We find that MKP demonstrated no such patent and gross evasion of a positive Employment at least one (1) month before the effective date of termination due
duty on the part of the NLRC. On the contrary, the NLRC's finding that the 2002 to redundancy or retrenchment.93
redundancy declaration of PLDT was justified and valid rested on substantial
evidence, for the NLRC ostensibly based its finding on established facts showing While we agree that Philippine Long Distance Telephone Company complied with
the decline of subscribers, the decline in long distance local and international the notice requirement, the same cannot be said as regards the separation pay
calls, and the decline in landline or fixed line services, constraining PLDT to received by some of the affected workers.
declare certain positions redundant. There could be no question that such factual
circumstances were traceable to "the advent of wireless telephone, of texting as a Philippine Long Distance Telephone Company claims that most employees who
means of communication, the use of direct dialing including were declared redundant received a very generous separation package or "as
prepaid telesulit and teletipid measures introduced in the communication much as 2.75 months [worth of salary] for every year of service, with the
services." average separation package at [P]586,580.27."94 However, the records belie its
claims as shown by the notice of termination of employment received by the
As such, the NLRC did not commit any grave abuse of discretion when it regarded workers affected by the redundancy program:chanRoblesvirtualLawlibrary
the technological advancements resulting in less work for the redundated November 25, 2002
employees as justifying PLOT's declaration of redundancy.91
This Court sees no reason to depart from the findings of the Court of Appeals and MYRNA C. CASTRO
of the National Labor Relations Commission. OPERATOR SERVICES-NORTH

Philippine Long Distance Telephone Company's declaration of redundancy was Dear Ms. Castro:
backed by substantial evidence showing a consistent decline for operator-assisted
calls for both local and international calls because of cheaper alternatives like After a thorough review of operations, Management has determined that there is
direct dialing services, and the growth of wireless communication. Thus, the a need to reduce its manpower requirements considering technological,
National Labor Relations Commission did not commit grave abuse of discretion organization, and process developments. This reduction is inevitable to ensure
when it upheld the validity of PLDT's redundancy program. Redundancy is the company's survival in the long term.
ultimately a management prerogative, and the wisdom or soundness of such
business judgment is not subject to discretionary review by labor tribunals or Your position is one of those affected by such changes and developments. Thus,
even this Court, as long as the law was followed and malicious or arbitrary action with much regret, your service to the company will be considered completed
was not shown.92 by December 30, 2002.

III In recognition of your loyalty and dedicated service, the company is granting a
generous separation pay package that will assist you in making the necessary
Nonetheless, there is a need to review the redundancy package awarded to the adjustments to your new situation.

115
This separation package consists of your regular retirement benefits plus 75% of Aquino v. National Labor Relations Commission99 differentiated between
basic monthly pay for every year of service, or a minimum of 175% of basic separation pay and retirement benefits:chanRoblesvirtualLawlibrary
monthly pay for every year of service for employees with less than 15 years of Separation pay is required in the cases enumerated in Articles 283 and 284 of the
service. Labor Code, which include retrenchment, and is computed at at least one month
salary or at the rate of one-half month salary for every month of service,
Counseling service on financial options in the future will be available to assist you whichever is higher. We have held that it is a statutory right designed to provide
during your period of adjustment. the employee with the wherewithal during the period that he is looking for
another employment.
We would like to take this opportunity to thank you for your service to the
Company and wish you well in all your future undertakings. Retirement benefits, where not mandated by law, may be granted by agreement
of the employees and their employer or as a voluntary act on the part of the
Very truly yours, employer. Retirement benefits are intended to help the employee enjoy the
remaining years of his lifelessening the burden of worrying for his financial sup
PHILIPPINE LONG DISTANCE TELEPHONE CO., INC ort, and are a form of reward for his loyalty and service to the
employer.100 (Citation omitted)
(signed) Separation pay brought about by redundancy is a statutory right, and it is
ERLINDA S. KABIGTING95 irrelevant that the retirement benefits together with the separation pay given to
the terminated workers resulted in a total amount that appeared to be more than
(Emphasis supplied) what is required by the law. The facts. show that instead of the legally required
The notices of termination of employment 96 signed by Erlinda S. Kabigting, one (1) month salary for every year of service rendered, the terminated workers
Philippine Long Distance Telephone Company Vice-President for Operator who were with Philippine Long Distance Telephone Company for more than 15
Services Section,97 provided two (2) types of separation packages for the years received a separation pay of only 75% of their basic pay for every year of
terminated workers. These were: (1) regular retirement benefits plus 75% basic service, despite the clear wording of the law.
monthly pay for every year of service for employees who had been with Philippine
Long Distance Telephone Company for more than 15 years; and (2) 175% of The workers, who were terminated from employment as a result of redundancy,
basic monthly pay for every year of service for employees who had been with are entitled to the separation pay due them under the law.
PLDT for less than 15 years.
IV
When an employer declares redundancy, Article 298 of the Labor Code requires
that the employer provides a separation pay equivalent to at least one (1) month Department of Labor and Employment Secretary Patricia A. Sto. Tomas
pay of the affected employee, or at least one (1) month pay for every year of (Secretary Sto. Tomas) assumed jurisdiction over the labor dispute between
service, whichever is higher.98 In this case, Philippine Long Distance Telephone Manggagawa ng Komunikasyon sa Pilipinas and Philippine Long Distance
Company claims that the terminated workers received a generous separation Telephone Company pursuant to Article. 278(g) 101 of the Labor Code. She
package of about 2.75 months' worth of salary for every year of service. But it certified102 the case to the National Labor Relations Commission for compulsory
seems that the retirement benefits of the terminated workers were added to the arbitration. This return-to-work order from the Secretary of Labor and
separation pay due them, hence the large payout. This should not be the case. Employment aims to preserve the status quo ante103 while the validity of the

116
redundancy program is being threshed out in the proper forum. Company's redundancy program became final and executory.114

In Telefunken Semiconductors Employees Union-FFW v. Secretary of Petitioner is mistaken.

Labor,104 pending resolution of the legality of the strike, the Secretary of Labor
and Employment directed the employer to accept all the striking workers except
the Union Officers, shop stewards, and those with pending criminal
charges.105This Court struck down the Secretary of Labor and Employment's
order for being issued with grave abuse of discretion, 106 and directed the
employer to accept all the striking workers without qualifications. 107
The ruling in Telefunken cannot be applied to the case at bar.
In Philippine Long Distance Telephone Co. Inc. v. Manggagawa ng Komunikasyon
sa Pilipinas,108 which was promulgated on July 14, 2005, this Court struck down
the return-to-work order dated January 2, 2003 issued by Secretary Sto. Tomas
for being tainted with grave abuse of discretion. We ruled that the return-to-work
order should have included all striking workers, and should not have excluded the
workers affected by the redundancy program.109 However, barely three (3)
months after Philippine Long Distance Telephone Co. Inc.'s promulgation, the
National Labor Relations Commission in its October 28, 2005 Resolution 110 upheld
the validity of Philippine Long Distance Telephone Company's redundancy
program. This resolution also dismissed the charges of unfair labor practice, and
illegal dismissal against Philippine Long Distance Telephone Company. 111
When petitioner filed its Motion for Execution 112 on January 17, 2006 pursuant to
this Court's ruling in Philippine Long Distance Telephone Co. Inc., there was no
longer any existing basis for the return-to-work order. This was because the
Secretary of Labor and Employment's return-to-work order had been superseded
by the National Labor Relations Commission's Resolution. Hence, the Secretary of
Labor and Employment did not err in dismissing the motion for execution on the
ground of mootness.
Petitioner cites Garcia v. Philippine Airlines113 to support its claim that the
affected and striking workers are entitled to reinstatement and backwages from
January 2, 2003, when Secretary Sto. Tomas directed the striking workers to
return to work, up to April 29, 2006, when the National Labor Relations
Commission's Resolution upholding Philippine Long Distance Telephone
Garcia upholds the prevailing doctrine that even if a Labor Arbiter's order of
reinstatement is reversed on appeal, the employer is obligated "to reinstate and
pay the wages of the dismissed employee during the period of appeal until
reversal by the higher court."115
There is no order of reinstatement from a Labor Arbiter in the case at bar,
instead, what is at issue is the return-to-work order from the Secretary of Labor
and Employment. An order of reinstatement is different from a return-to-work
order.
The award of reinstatement, including backwages, is awarded by a Labor Arbiter
to an illegally dismissed employee pursuant to Article 294 116 of the Labor
Code:chanRoblesvirtualLawlibrary
Article 294. Security of Tenure. - In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computedfrom the time his compensation was withheld
from him up to the time of his actual reinstatement. (Emphasis supplied)
If actual reinstatement is no longer possible, the employee becomes entitled to
separation pay in lieu of reinstatement.117
On the other hand, a return-to-work order is issued by the Secretary of Labor
and Employment when he or she assumes jurisdiction over a labor dispute in an
industry that is considered indispensable to the national interest. Article 278(g) of
the Labor Code provides that the assumption and certification of the Secretary of
Labor and Employment shall automatically enjoin the intended or impending
strike. When a strike has already taken place at the time the Secretary of Labor
and Employment assumes jurisdiction over the labor dispute, all striking
employees shall immediately return to work. Moreover, the employer shall
immediately resume operations, and readmit all workers under the same terms
and conditions prevailing before the strike.

117
Return-to-work and reinstatement orders are both immediately executory;
however, a return-to-work order is interlocutory in nature, and is merely meant
to maintain status quo while the main issue is being threshed out in the proper
forum. In contrast, an order of reinstatement is a judgment on the merits handed
down by the Labor Arbiter pursuant to the original and exclusive jurisdiction
provided for under Article 224(a)118 of the Labor Code. Clearly, Garcia is not
applicable in the case at bar, and there is no basis to reinstate the employees
who were terminated as a result of redundancy.

WHEREFORE, premises considered, the Petition is PARTIALLY GRANTED. The

Court of Appeals' August 28, 2008 Decision and November 24, 2009 Resolution in
CA-G.R. SP No. 94365 and CA-G.R. SP No. 98975 are AFFIRMED with
MODIFICATION. Private respondent Philippine Long Distance Telephone
Company, Inc. is DIRECTED to pay the workers affected by its 2002 redundancy
program and who had been employed for more than fifteen (15) years prior to
their dismissal, the balance of the separation pay due them or a sum equivalent
to twenty-five percent (25%) of their basic monthly pay for every year of service
with Philippine Long Distance Telephone Company, Inc.

A legal interest of 6% per annum119 shall be imposed on the total judgment

award from the finality of this Decision until its full satisfaction.

118