G.R. No.

147719

January 27, 2006

HA YUAN RESTAURANT, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and JUVY SORIA, Respondents. DECISION AUSTRIA-MARTINEZ, J.: Respondent Juvy Soria worked as a cashier in petitioners establishment located inside the SM Food Court Makati. On January 11, 1998, respondent assaulted her co-worker Ma. Teresa Sumalague resulting in a scuffle between the two. Despite the intervention of their supervisor Fiderlie Recide, they were not pacified, prompting Recide to call for security assistance. The two were then brought to the SM Food Court Administration Office where they continued to cast tirades at each other notwithstanding the request of the SM Food Court Manager to stop. Because they refused to be mollified, they were brought to the Customer Relations Office for further investigation. As a result of the incident, the SM Food Court Manager banned the two from working within the SM Food Courts premises. Respondent then filed with the Labor Arbiter a complaint for illegal dismissal, salary differentials, service incentive leave, separation pay and damages. It was dismissed by the Labor Arbiter for lack of merit in a Decision dated December 4, 1998. 1 On appeal to the National Labor Relations Commission (NLRC), the Labor Arbiters decision was affirmed with the modification that respondent was awarded separation pay. The dispositive portion of NLRC Decision dated September 30, 1999, reads: WHEREFORE, the foregoing premises considered, the Decision of the Labor Arbiter is hereby AFFIRMED with the modification that the respondents are hereby ordered to pay complainant her separation pay equivalent to one (1) month salary per year of service, based on her last salary of P196.00/day and counted from 10 December 1984 until the finality of this Decision. SO ORDERED.2lavvphil.ne+ This prompted petitioner to file a special civil action for certiorari with the Court of Appeals (CA), and in its Decision dated March 30, 2001, it affirmed the NLRCs decision and dismissed the petition for lack of merit. Hence, herein petition for review on certiorari under Rule 45 of the Rules of Court on the following grounds: THE PUBLIC RESPONDENT COURT OF APPEALS DEPARTED FROM ESTABLISHED JURISPRUDENCE AND ERRED AND GRAVELY ABUSED ITS DISCRETION IN AFFIRMING THE NLRC AWARD TO PRIVATE RESPONDENT JOVY SORIA SEPARATION PAY EVEN AS HER DISMISSAL ON GROUNDS OF SERIOUS MISCONDUCT WAS SUSTAINED CORROLARY (sic) TO THIS GROUND THE LEGAL ISSUE RAISED IS WHETHER AN AWARD OF SEPARATION PAY IS PROPER TO AN EMPLOYEE WHO IS FOUND TO HAVE BEEN VALIDLY DISMISSED ON THE GROUND OF SERIOUS MISCONDUCT 3 The sole issue in this case --- whether a validly dismissed employee like respondent is entitled to an award of separation pay --- has already been squarely settled as early as 1988 in the leading case of Philippine Long Distance Telephone Co. vs. NLRC, 4 wherein it was stated, viz.: We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (Emphasis supplied) Separation pay therefore, depends on the cause of dismissal, and may be accordingly awarded provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on the employees moral character. 5 The question that now arises in this case is whether the cause of respondents dismissal falls under the two circumstances, i.e., serious misconduct or the dismissal reflected on the employees moral character.lavvphil.ne+ The Court holds that respondents cause of dismissal in this case amounts as a serious misconduct and as such, separation pay should not have been awarded to her. Thus, the petition should be granted. Misconduct is improper or wrongful conduct. It is the 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 of judgment. To be a valid cause for termination, the misconduct must be serious. 6 While it is true, as respondent contends, that the Labor Arbiter did not tag her cause of dismissal as serious misconduct, nevertheless, it is its nature, not its label that characterizes the cause as serious misconduct. There is no question as regards the incident that caused respondents dismissal. While respondents co-worker Sumalague was eating at the back of the store, respondent rushed toward Sumalague and hit the latter on the face causing injuries. A scuffle ensued and despite their supervisor Recides pleas, the two continued to fight, prompting Recide to call the mall security. When the two were brought to the administration office, they continued bickering and did not heed the request of the manager to stop, and thus they were brought to the Customer Relations Office. Because of the incident, the two were banned from working within the premises. The fact that Sumalague sustained injuries is a matter that cannot be taken lightly. Moreover, the incident disturbed the peace in the work place, not to mention that respondent and Sumalague committed a breach of its discipline.7 Clearly, respondent committed serious misconduct within the meaning of Art. 282 of the Labor Code, providing for the dismissal of employees. Her cause of dismissal amounting to a serious misconduct, respondent is not entitled to an award of separation pay. As further stated in Philippine Long Distance Telephone Co. vs. NLRC: The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. 8

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated March 30, 2001 in CA-G.R. SP No. 58219 is MODIFIED to the effect that the NLRC Decision dated September 30, 1999 is AFFIRMED with MODIFICATION in that the award of separation pay in favor of respondent Juvy Soria is DELETED. SO ORDERED. G.R. No. 150198 March 6, 2006

DOMINADOR S. PEREZ and CELINE CAMPOS, Petitioners, vs. THE MEDICAL CITY GENERAL HOSPITAL, ALFREDO BENGZON, BENITA MACALAGAY and MARIANNE FRANCISCO, Respondents. DECISION AZCUNA, J.: The present case arose from the dismissal of two orderlies of respondent Medical City General Hospital (the Hospital) for allegedly pilfering hospital property. As follows are the antecedent facts:1 Prompted by reports of missing medicines and supplies in the Emergency Room/Trauma Room (ER/TR) and upon the suggestion of one of the Hospitals staff nurses, the Hospital, on September 9, 1999, opened 22 lockers of employees assigned to the ER/TR. The Hospital found four lockers with items belonging to it. The employees corresponding to the lockers and the items found are as follows: Dominador Perez Four rolls of micropore One ovum forcep adson forceps laryngoscope ear pieces monkey wrench Celine Campos Two berodual Two ventolin nebules Two tongue depressors Lailanie Espiritu nulain (a regulated drug) Ventolin nebules Mateo Butardo micropore bath towel PIMS (prescription manual) white linen Dominador Perez, Celine Campos, Lailanie Espiritu and Mateo Butardo were directed to submit written explanations as to why these items were inside their lockers. Perez, Campos and Butardo submitted their written explanations, while Espiritu opted to resign. An administrative hearing was held where the three employees who responded were represented by a union counsel. At the end of the proceedings, the charge against Butardo was dismissed while Perez and Campos, herein petitioners, were found to have violated category seven of the company rules, a serious infraction meriting dismissal. The Hospital offered them the opportunity to voluntarily resign with separation pay, under a clause provided in the Collective Bargaining Agreement. They refused and the Hospital dismissed them from the service. On January 19, 2000, petitioners filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC). 2 On August 29, 2000, after the submission of position papers, the Labor Arbiter found respondents guilty of illegal dismissal and ordered the reinstatement of petitioners with backwages and without loss of seniority rights.3 On appeal to the NLRC,4 the Labor Arbiters decision was reversed and the complaint was dismissed. 5 Petitioners then went to the Court of Appeals (CA) on a petition for certiorari. 6 On August 7, 2001, the CA issued the assailed decision, denying the petition and affirming the decision of the NLRC.7 Hence, petitioners have filed the present petition for review on certiorari under Rule 45 of the Rules of Court, asking the Court to reinstate the decision of the Labor Arbiter. In attempting to account for the presence of the items inside their lockers, petitioners gave the following explanations: Perez maintained that on the day before the lockers were opened, he was replacing the bed sheets in the ER and found a monkey wrench tucked under one of the bed cushions. Not finding any proper person to hand over the wrench, and wanting to go home already, he decided to keep the wrench inside his locker for purposes of safekeeping until he could turn it over at his next shift. As for the ovum and adson forceps, he took these instruments on September 2, 1999 because he noticed that they were already due for evaluation and subsequent condemnation. He claimed that he placed them inside his locker with the intention of eventually endorsing them to his supervisor. Lastly, he explained that the micropore plastics were instruments used by him while on duty and the laryngoscope ear piece was kept by him with the consent of his supervisor. Campos asserted that it has been her practice to carry nebules in her pocket whenever she was on duty as a matter of convenience for patients who suffer from sudden asthma attacks. On September 5, 1999, being tired and in a hurry to get home, she just left these in her locker and simply forgot to endorse them to the proper person. They were eventually abandoned inside the locker after she moved out her stuff when she transferred from the ER to Pediatrics. Petitioners, in essence, maintain that they have sufficiently accounted for the presence of these items inside their lockers and that the evidence presented against them is insufficient to show that they are guilty of misappropriating company property. Moreover, assuming ex gratia argumenti that there was violation of company rules, the penalty of dismissal would be too harsh considering their long years of dedicated service to the Hospital. The Court is not a trier of facts, and this rule applies with greater force in labor cases. Hence, the factual findings of the NLRC are generally accorded not only respect but even finality if supported by substantial evidence and especially when affirmed by the CA. However, a disharmony between the factual findings of the Labor Arbiter and the NLRC opens the door to a review by this Court. 8 The Labor Arbiter ruled, as follows: We disagree with the respondent companys contention that the complainants were found guilty of misappropriation considering that there was no taking of property for the purpose of depriving the respondents of ownership and possession of the same. The hospital did not incur losses on the alleged misappropriated items since they were placed in the lockers for temporary safekeeping. Undoubtedly, the imputation of misappropriation of company properties entirely rests on speculative inferences, which according to the Supreme Court in Pilipinas Bank vs. NLRC. 215 SCRA 756, can never be the basis of illegal dismissal on the ground of dishonesty. The complainants gave valid explanations and justifications on the questioned items found in their lockers, but respondents ignored their explanations and decided to terminate their services x x x.

In reversing the Labor Arbiter, the NLRC concluded: The hospital has convincingly established that all employees, including the herein complainants, are not allowed to place hospital items in their respective lockers as this is contrary to the rules and procedures of the hospital. In the case of the monkey wrench allegedly found by complainant Perez, he should have placed this item in the ER (emergency room) drawer where the instruments are placed in accordance with the Hospitals rules and procedure and not in his locker. The other instruments should be endorsed to the next staff on duty and should not be kept as what Perez did (Annex "B," respondents position paper). With respect to the items for evaluation as well as items to be condemned[,] the same should be submitted to a ward clerk who will endorse it to the Physical Pleat for evaluation. The clerks are the only authorized personnel to keep condemned items and nobody else and these condemned items are to be placed inside the supplies locker. The procedure was attested to by Ms. Imelda M. Lloren, E[R]-TR Supervisor in her latter dated November 19, 1999 (Annex "13," respondents position paper). In the same manner, all staffs in the ER-TR of the hospital are not allowed to put medicines in their pockets. All medicines are placed and should be made accessible in the hospital[s] E-Cart so that in cases of emergency, the said medicines are easily accessible for patients use (Annex "14," respondents[] position paper) x x x. Contrary to the position taken by the Labor Arbiter, the Hospitals dismissal of petitioners did not rest on speculative inferences. Petitioners themselves have admitted that properties belonging to the Hospital were found inside their lockers. As to how these items got inside the lockers, petitioners acknowledged having placed them there against company rules. In view of these admissions, there is ample evidence to support a charge for pilferage unless petitioners can satisfactorily explain their possession. Perez contends that he had the wrench and the forceps inside his lockers for safekeeping with every intention of turning them over. While this may be considered to explain the presence of the wrench, since he claims he found it only a day before the lockers were opened, it does not fully account for the forceps. Perez alleged that he took these instruments on September 2, 1999 after noticing that they were already due for evaluation and condemnation and was going to endorse them to the supervisor. If this were the case, why was he not able to endorse them at his next shift? Instead, the instruments remained inside his locker for more than a week until the Hospital discovered them when it conducted a search. Secondly, as stated in the December 19, 1999 letter of the ERTR Supervisor,9 Perezs responsibility is limited to checking and recommending defective or non-functional equipment. He is not allowed to keep the items but is required to deliver them to the ward clerk who, in turn, will keep them in the supplies locker until their delivery to the scrap officer on the last Friday of the month. It was made clear to all hospital staff that hospital equipment should only be kept in the supplies locker. Plainly, Perez had no business taking instruments into his locker, even if these were already defective. As for the micropore and laryngoscope ear piece, Perez claims that the former is used by him while on duty while the latter was kept by him with the consent of his supervisor. According to the Hospital, micropore is a supply charged to the patient and is not issued to orderlies, while a laryngoscope ear piece is a doctors instrument. 10 The Court sees no reason why Perez needed to have such items. As an orderly, he was not charged with giving out micropores nor did his job entail the use of a laryngoscope ear piece. For her part, Campos claims that it has been her practice to put nebules inside her pocket for emergencies. Similarly, the Court cannot comprehend the need for her to keep them in her pocket when she can easily get hold of them from the emergency cart. Also, keeping nebules inside her pocket does not explain why she had to keep two at a time, as two were found inside her locker. Even assuming that she found it convenient to have nebules in her pocket, this does not explain the need to also keep it in her locker as she could, without much effort, return it to the emergency cart at the end of every shift. Lastly, there were other items found in her locker (the berodual and tongue depressors) for which Campos failed to account. Based on the foregoing consideration, the Court finds there was sufficient basis to hold that petitioners misappropriated hospital property. The next issue is whether dismissal was the appropriate penalty. The power to dismiss an employee is a recognized prerogative that is inherent in the employers right to freely manage and regulate his business. An employer cannot be expected to retain an employee whose lack of morals, respect and loyalty to his employer or regard for his employers rules and appreciation of the dignity and responsibility of his office has so plainly and completely been bared. An employer may not be compelled to continue to employ a person whose continuance in service will patently be inimical to his interest. The dismissal of an employee, in a way, is a measure of self-protection. Nevertheless, whatever acknowledged right the employer has to discipline his employee, it is still subject to reasonable regulation by the State in the exercise of its police power. 11 Thus, it is within the power of this Court not only to scrutinize the basis for dismissal but also to determine if the penalty is commensurate to the offense, notwithstanding the company rules. In this case, the Court agrees with the Labor Arbiter that dismissal would not be proportionate to the gravity of the offense considering the circumstances present in this case. Perez has been an employee of the Hospital for 19 consecutive years. Campos, while not employed with the Hospital as long as Perez, can lay claim to seven consecutive years. During their long tenure with the Hospital, it does not appear that they have been the subject of disciplinary sanctions and they have kept their records unblemished. Moreover, the Court also takes into account the fact that petitioners are not managerial or confidential employees in whom greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. 12 This can be gleaned from the supervisors letter explaining that orderlies duties are limited to checking equipment and recommending their condemnation. 13 Furthermore, in previous cases decided by this Court, a number of employees were granted reinstatement after a determination that their dismissals were not proportionate to the offense committed.14 In Associated Labor Unions-TUCP v. NLRC,15 cited by petitioners, the involved employee was dismissed after being caught pilfering a pair of boots, an aluminum container and 15 hamburger patties. This Court took into account the value of the articles taken, his two years of unblemished service and his position as a rank and file, and ordered his reinstatement without backwages. The reinstatement of petitioners is in line with the social justice mandate of the Constitution. Nevertheless, the Court does not countenance the wrongful act of pilferage but simply maintains that the extreme penalty of dismissal is not justified and a lesser penalty would suffice. Under the facts of this case, suspension would be adequate. Without making any doctrinal pronouncement on the length of the suspension in cases similar to this, the Court holds that considering petitioners non-employment since January 2000, they may be deemed to have already served their period of suspension. Consequently, the Labor Arbiters order of reinstatement is upheld, with the deletion of the award of backwages, so as not to put a premium on acts of dishonesty. WHEREFORE, the petition is PARTIALLY GRANTED and the assailed Decision dated August 7, 2001 rendered by the Court of Appeals is SET ASIDE. Petitioners Dominador Perez and Celine Campos are ordered REINSTATED WITHOUT BACKWAGES BUT WITHOUT LOSS OF SENIORITY. No pronouncement as to costs. SO ORDERED. G.R. No. 162053 March 7, 2007

ST. LUKE'S MEDICAL CENTER EMPLOYEE'S ASSOCIATION-AFW (SLMCEA-AFW) AND MARIBEL S. SANTOS, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) AND ST. LUKE'S MEDICAL CENTER, INC., Respondents. DECISION AZCUNA, J.:

Challenged in this petition for review on certiorari is the Decision1 of the Court of Appeals (CA) dated January 29, 2004 in CA-G.R. SP No. 75732 affirming the decision2 dated August 23, 2002 rendered by the National Labor Relations Commission (NLRC) in NLRC CA No. 026225-00. The antecedent facts are as follows: Petitioner Maribel S. Santos was hired as X-Ray Technician in the Radiology department of private respondent St. Luke's Medical Center, Inc. (SLMC) on October 13, 1984. She is a graduate of Associate in Radiologic Technology from The Family Clinic Incorporated School of Radiologic Technology. On April 22, 1992, Congress passed and enacted Republic Act No. 7431 known as the "Radiologic Technology Act of 1992." Said law requires that no person shall practice or offer to practice as a radiology and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration from the Board of Radiologic Technology. On September 12, 1995, the Assistant Executive Director-Ancillary Services and HR Director of private respondent SLMC issued a final notice to all practitioners of Radiologic Technology to comply with the requirement of Republic Act No. 7431 by December 31, 1995; otherwise, the unlicensed employee will be transferred to an area which does not require a license to practice if a slot is available. On March 4, 1997, the Director of the Institute of Radiology issued a final notice to petitioner Maribel S. Santos requiring the latter to comply with Republic Act. No. 7431 by taking and passing the forthcoming examination scheduled in June 1997; otherwise, private respondent SLMC may be compelled to retire her from employment should there be no other position available where she may be absorbed. On May 14, 1997, the Director of the Institute of Radiology, AED-Division of Ancillary Services issued a memorandum to petitioner Maribel S. Santos directing the latter to submit her PRC Registration form/Examination Permit per Memorandum dated March 4, 1997. On March 13, 1998, the Director of the Institute of Radiology issued another memorandum to petitioner Maribel S. Santos advising her that only a license can assure her of her continued employment at the Institute of Radiology of the private respondent SLMC and that the latter is giving her the last chance to take and pass the forthcoming board examination scheduled in June 1998; otherwise, private respondent SLMC shall be constrained to take action which may include her separation from employment. On November 23, 1998, the Director of the Institute of Radiology issued a notice to petitioner Maribel S. Santos informing the latter that the management of private respondent SLMC has approved her retirement in lieu of separation pay. On November 26, 1998, the Personnel Manager of private respondent SLMC issued a "Notice of Separation from the Company" to petitioner Maribel S. Santos effective December 30, 1998 in view of the latter's refusal to accept private respondent SLMC's offer for early retirement. The notice also states that while said private respondent exerted its efforts to transfer petitioner Maribel S. Santos to other position/s, her qualifications do not fit with any of the present vacant positions in the hospital. In a letter dated December 18, 1998, a certain Jack C. Lappay, President of the Philippine Association of Radiologic Technologists, Inc., wrote Ms. Judith Betita, Personnel Manager of private respondent SLMC, requesting the latter to give "due consideration" to the organization's three (3) regular members of his organization (petitioner Maribel S. Santos included) "for not passing yet the Board of Examination for X-ray Technology," "by giving them an assignment in any department of your hospital awaiting their chance to pass the future Board Exam." On January 6, 1999, the Personnel Manager of private respondent SLMC again issued a "Notice of Separation from the Company" to petitioner Maribel S. Santos effective February 5, 1999 after the latter failed to present/ submit her appeal for rechecking to the Professional Regulation Commission (PRC) of the recent board examination which she took and failed. On March 2, 1999, petitioner Maribel S. Santos filed a complaint against private respondent SLMC for illegal dismissal and non-payment of salaries, allowances and other monetary benefits. She likewise prayed for the award of moral and exemplary damages plus attorney's fees. In the meantime, petitioner Alliance of Filipino Workers (AFW), through its President and Legal Counsel, in a letter dated September 22, 1999 addressed to Ms. Rita Marasigan, Human Resources Director of private respondent SLMC, requested the latter to accommodate petitioner Maribel S. Santos and assign her to the vacant position of CSS Aide in the hospital arising from the death of an employee more than two (2) months earlier. In a letter dated September 24, 1999, Ms. Rita Marasigan replied thus: Gentlemen: Thank you for your letter of September 22, 1999 formally requesting to fill up the vacant regular position of a CSS Aide in Ms. Maribel Santos' behalf. The position is indeed vacant. Please refer to our Recruitment Policy for particulars especially on minimum requirements of the job and the need to meet said requirements, as well as other pre-employment requirements, in order to be considered for the vacant position. As a matter of fact, Ms. Santos is welcome to apply for any vacant position on the condition that she possesses the necessary qualifications. As to the consensus referred to in your letter, may I correct you that the agreement is, regardless of the vacant position Ms. Santos decides to apply, she must go through the usual application procedures. The formal letter, I am afraid, will not suffice for purposes of recruitment processing. As you know, the managers requesting to fill any vacancy has a say on the matter and correctly so. The manager's inputs are necessarily factored into the standard recruitment procedures. Hence, the need to undergo the prescribed steps. Indeed we have gone through the mechanics to accommodate Ms. Santos' transfer while she was employed with SLMC given the prescribed period. She was given 30 days from issuance of the notice of termination to look for appropriate openings which incidentally she wittingly declined to utilize. She did this knowing fully well that the consequences would be that her application beyond the 30-day period or after the effective date of her termination from SLMC would be considered a re-application with loss of seniority and shall be subjected to the pertinent application procedures. Needless to mention, one of the 3 X-ray Technologists in similar circumstances as Ms. Santos at the time successfully managed to get herself transferred to E.R. because she opted to apply for the appropriate vacant position and qualified for it within the prescribed 30-day period. The other X-ray Technologist, on the other hand, as you may recall, was eventually terminated not just for his failure to comply with the licensure requirement of the law but for cause (refusal to serve a customer).

Why Ms. Santos opted to file a complaint before the Labor Courts and not to avail of the opportunity given her, or assuming she was not qualified for any vacant position even if she tried to look for one within the prescribed period, I simply cannot understand why she also refused the separation pay offered by Management in an amount beyond the minimum required by law only to re-apply at SLMC, which option would be available to her anyway even (if she) chose to accept the separation pay! Well, here's hoping that our Union can timely influence our employees to choose their options well as it has in the past. (Signed) RITA MARASIGAN Subsequently, in a letter dated December 27, 1999, Ms. Judith Betita, Personnel Manager of private respondent SLMC wrote Mr. Angelito Calderon, President of petitioner union as follows: Dear Mr. Calderon: This is with regard to the case of Ms. Maribel Santos. Please recall that last Oct. 8, 1999, Ms. Rita Marasigan, HR Director, discussed with you and Mr. Greg Del Prado the terms regarding the re-hiring of Ms. Maribel Santos. Ms. Marasigan offered Ms. Santos the position of Secretary at the Dietary Department. In that meeting, Ms. Santos replied that she would think about the offer. To date, we still have no definite reply from her. Again, during the conference held on Dec. 14, 1999, Atty. Martir promised to talk to Ms. Santos, and inform us of her reply by Dec. 21, 1999. Again we failed to hear her reply through him. Please be informed that said position is in need of immediate staffing. The Dietary Department has already been experiencing serious backlog of work due to the said vacancy. Please note that more than 2 months has passed since Ms. Marasigan offered this compromise. Management cannot afford to wait for her decision while the operation of the said department suffers from vacancy. Therefore, Management is giving Ms. Santos until the end of this month to give her decision. If we fail to hear from her or from you as her representatives by that time, we will consider it as a waiver and we will be forced to offer the position to other applicants so as not to jeopardize the Dietary Department's operation. For your immediate action. (Signed) JUDITH BETITA Personnel Manager On September 5, 2000, the Labor Arbiter came out with a Decision ordering private respondent SLMC to pay petitioner Maribel S. Santos the amount of One Hundred Fifteen Thousand Five Hundred Pesos (P115,500.00) representing her separation pay. All other claims of petitioner were dismissed for lack of merit. Dissatisfied, petitioner Maribel S. Santos perfected an appeal with the public respondent NLRC. On August 23, 2002, public respondent NLRC promulgated its Decision affirming the Decision of the Labor Arbiter. It likewise denied the Motion for Reconsideration filed by petitioners in its Resolution promulgated on December 27, 2002. Petitioner thereafter filed a petition for certiorari with the CA which, as previously mentioned, affirmed the decision of the NLRC. Hence, this petition raising the following issues: I. Whether the CA overlooked certain material facts and circumstances on petitioners' legal claim in relation to the complaint for illegal dismissal. II. Whether the CA committed grave abuse of discretion and erred in not resolving with clarity the issues on the merit of petitioner's constitutional right of security of tenure.3 For its part, private respondent St. Luke's Medical Center, Inc. (SLMC) argues in its comment 4 that: 1) the petition should be dismissed for failure of petitioners to file a motion for reconsideration; 2) the CA did not commit grave abuse of discretion in upholding the NLRC and the Labor Arbiter's ruling that petitioner was legally dismissed; 3) petitioner was legally and validly terminated in accordance with Republic Act Nos. 4226 and 7431; 4) private respondent's decision to terminate petitioner Santos was made in good faith and was not the result of unfair discrimination; and 5) petitioner Santos' non-transfer to another position in the SLMC was a valid exercise of management prerogative. The petition lacks merit. Generally, the Court has always accorded respect and finality to the findings of fact of the CA particularly if they coincide with those of the Labor Arbiter and the NLRC and are supported by substantial evidence.5 True this rule admits of certain exceptions as, for example, when the judgment is based on a misapprehension of facts, or the findings of fact are not supported by the evidence on record 6 or are so glaringly erroneous as to constitute grave abuse of discretion.7 None of these exceptions, however, has been convincingly shown by petitioners to apply in the present case. Hence, the Court sees no reason to disturb such findings of fact of the CA. Ultimately, the issue raised by the parties boils down to whether petitioner Santos was illegally dismissed by private respondent SLMC on the basis of her inability to secure a certificate of registration from the Board of Radiologic Technology. The requirement for a certificate of registration is set forth under R.A. No. 7431 8 thus: Sec. 15. Requirement for the Practice of Radiologic Technology and X-ray Technology. - Unless exempt from the examinations under Sections 16 and 17 hereof, no person shall practice or offer to practice as a radiologic and/or x-ray technologist in the Philippines without having obtained the proper certificate of registration from the Board. It is significant to note that petitioners expressly concede that the sole cause for petitioner Santos' separation from work is her failure to pass the board licensure exam for X-ray technicians, a precondition for obtaining the certificate of registration from the Board. It is argued, though, that petitioner Santos' failure to comply with the certification requirement did not constitute just cause for termination as it violated her constitutional right to security of tenure. This contention is untenable.

While the right of workers to security of tenure is guaranteed by the Constitution, its exercise may be reasonably regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and the general welfare of the people. Consequently, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers.9 The most concrete example of this would be in the field of medicine, the practice of which in all its branches has been closely regulated by the State. It has long been recognized that the regulation of this field is a reasonable method of protecting the health and safety of the public to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. 10 The same rationale applies in the regulation of the practice of radiologic and x-ray technology. The clear and unmistakable intention of the legislature in prescribing guidelines for persons seeking to practice in this field is embodied in Section 2 of the law: Sec. 2. Statement of Policy. - It is the policy of the State to upgrade the practice of radiologic technology in the Philippines for the purpose of protecting the public from the hazards posed by radiation as well as to ensure safe and proper diagnosis, treatment and research through the application of machines and/or equipment using radiation.11 In this regard, the Court quotes with approval the disquisition of public respondent NLRC in its decision dated August 23, 2002: The enactment of R.A. (Nos.) 7431 and 4226 are recognized as an exercise of the State's inherent police power. It should be noted that the police power embraces the power to prescribe regulations to promote the health, morals, educations, good order, safety or general welfare of the people. The state is justified in prescribing the specific requirements for x-ray technicians and/or any other professions connected with the health and safety of its citizens. Respondentappellee being engaged in the hospital and health care business, is a proper subject of the cited law; thus, having in mind the legal requirements of these laws, the latter cannot close its eyes and [let] complainant-appellant's private interest override public interest. Indeed, complainant-appellant cannot insist on her "sterling work performance without any derogatory record" to make her qualify as an x-ray technician in the absence of a proper certificate of Registration from the Board of Radiologic Technology which can only be obtained by passing the required examination. The law is clear that the Certificate of Registration cannot be substituted by any other requirement to allow a person to practice as a Radiologic Technologist and/or X-ray Technologist (Technician).12 No malice or ill-will can be imputed upon private respondent as the separation of petitioner Santos was undertaken by it conformably to an existing statute. It is undeniable that her continued employment without the required Board certification exposed the hospital to possible sanctions and even to a revocation of its license to operate. Certainly, private respondent could not be expected to retain petitioner Santos despite the inimical threat posed by the latter to its business. This notwithstanding, the records bear out the fact that petitioner Santos was given ample opportunity to qualify for the position and was sufficiently warned that her failure to do so would result in her separation from work in the event there were no other vacant positions to which she could be transferred. Despite these warnings, petitioner Santos was still unable to comply and pass the required exam. To reiterate, the requirement for Board certification was set by statute. Justice, fairness and due process demand that an employer should not be penalized for situations where it had no participation or control. 13 It would be unreasonable to compel private respondent to wait until its license is cancelled and it is materially injured before removing the cause of the impending evil. Neither can the courts step in to force private respondent to reassign or transfer petitioner Santos under these circumstances. Petitioner Santos is not in the position to demand that she be given a different work assignment when what necessitated her transfer in the first place was her own fault or failing. The prerogative to determine the place or station where an employee is best qualified to serve the interests of the company on the basis of the his or her qualifications, training and performance belongs solely to the employer.14 The Labor Code and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the courts) managerial authority. 15 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.16 Labor laws, to be sure, do not authorize interference with the employer's judgment in the conduct of the latter's business. Private respondent is free to determine, using its own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. None of these exceptions is present in the instant case. The fact that another employee, who likewise failed to pass the required exam, was allowed by private respondent to apply for and transfer to another position with the hospital does not constitute unlawful discrimination. This was a valid exercise of management prerogative, petitioners not having alleged nor proven that the reassigned employee did not qualify for the position where she was transferred. In the past, the Court has ruled that an objection founded on the ground that one has better credentials over the appointee is frowned upon so long as the latter possesses the minimum qualifications for the position.17 Furthermore, the records show that Ms. Santos did not even seriously apply for another position in the company. WHEREFORE, the petition is DENIED for lack of merit. Costs against petitioners. G.R. No. 80609 August 23, 1988 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION and MARILYN ABUCAY, respondents. Nicanor G. Nuevas for petitioner.

CRUZ, J.: The only issue presented in the case at bar is the legality of the award of financial assistance to an employee who had been dismissed for cause as found by the public respondent. Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation. 1 Investigated and heard, she was found guilty as charged and accordingly separated from the service. 2 She went to the Ministry of Labor and Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack of merit. Nevertheless, the dispositive portion of labor arbiter's decision declared: WHEREFORE, the instant complaint is dismissed for lack of merit. Considering that Dr. Helen Bangayan and Mrs. Consolacion Martinez are not totally blameless in the light of the fact that the deal happened outhide the premises of respondent company and that their act of giving P3,800.00 without any receipt is tantamount to corruption of public officers, complainant must be

given one month pay for every year of service as financial assistance.

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said decision in toto and dismissed the appeals. 4 The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the affirmance of the above- quoted award as having been made with grave abuse of discretion. In its challenged resolution of September 22, 1987, the NLRC said: ... Anent the award of separation pay as financial assistance in complainant's favor, We find the same to be equitable, taking into consideration her long years of service to the company whereby she had undoubtedly contributed to the success of respondent. While we do not in any way approve of complainants (private respondent) mal feasance, for which she is to suffer the penalty of dismissal, it is for reasons of equity and compassion that we resolve to uphold the award of financial assistance in her favor. 5 The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring corruption. For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa 6 and Soco v. Mercantile Corporation of Davao, 7 where the employees were dismissed for cause but were nevertheless allowed separation pay on grounds of social and compassionate justice. As the Court put it in the Firestone case: In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that the NLRC acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had worked with the company for eleven years with no known previous bad record, the ends of social and compassionate justice would be served if he is paid full separation pay but not reinstatement without backwages by the NLRC. In the said case, the employee was validly dismissed for theft but the NLRC nevertheless awarded him full separation pay for his 11 years of service with the company. In Soco, the employee was also legally separated for unauthorized use of a company vehicle and refusal to attend the grievance proceedings but he was just the same granted one-half month separation pay for every year of his 18-year service. Similar action was taken in Filipro, Inc. v. NLRC, 8 where the employee was validly dismissed for preferring certain dealers in violation of company policy but was allowed separation pay for his 2 years of service. In Metro Drug Corporation v. NLRC, 9 the employee was validly removed for loss of confidence because of her failure to account for certain funds but she was awarded separation pay equivalent to one-half month's salary for every year of her service of 15 years. In Engineering Equipment, Inc. v. NLRC, 10 the dismissal of the employee was justified because he had instigated labor unrest among the workers and had serious differences with them, among other grounds, but he was still granted three months separation pay corresponding to his 3-year service. In New Frontier Mines, Inc. v. NLRC, 11 the employee's 3- year service was held validly terminated for lack of confidence and abandonment of work but he was nonetheless granted three months separation pay. And in San Miguel Corporation v. Deputy Minister of Labor and Employment, et al ., 12 full separation pay for 6, 10, and 16 years service, respectively, was also allowed three employees who had been dismissed after they were found guilty of misappropriating company funds. The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation pay. 13 The cases above cited constitute the exception, based upon considerations of equity. Equity has been defined as justice outside law, 14 being ethical rather than jural and belonging to the sphere of morals than of law. 15 It is grounded on the precepts of conscience and not on any sanction of positive law. 16 Hence, it cannot prevail against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay. Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article devoted to the promotion of social justice and human rights with a separate sub- topic for labor. Article XIII expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national economy and the welfare of the people in general. The categorical mandates in the Constitution for the improvement of the lot of the workers are more than sufficient basis to justify the award of separation pay in proper cases even if the dismissal be for cause. The Court notes, however, that where the exception has been applied, the decisions have not been consistent as to the justification for the grant of separation pay and the amount or rate of such award. Thus, the employees dismissed for theft in the Firestone case and for animosities with fellow workers in the Engineering Equipment case were both awarded separation pay notnvithstanding that the first cause was certainly more serious than the second. No less curiously, the employee in the Soco case was allowed only one-half month pay for every year of his 18 years of service, but in Filipro the award was two months separation pay for 2 years service. In Firestone, the emplovee was allowed full separation pay corresponding to his 11 years of service, but in Metro, the employee was granted only one-half month separation pay for every year of her 15year service. It would seem then that length of service is not necessarily a criterion for the grant of separation pay and neither apparently is the reason for the dismissal. The Court feels that distinctions are in order. We note that heretofore the separation pay, when it was considered warranted, was required regardless of the nature or degree of the ground proved, be it mere inefficiency or something graver like immorality or dishonesty. The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the helping hand to the validly dismissed employee whatever the reason for his dismissal. This policy should be re-examined. It is time we rationalized the exception, to make it fair to both labor and management, especially to labor. There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A working mother who has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance, this being another authorized ground. It is not the employee's fault if he does not have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause. But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but

sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified. We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern of the Constitution. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. Applying the above considerations, we hold that the grant of separation pay in the case at bar is unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables. The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed at the rate of one month salary for every year of service, assuming the length of such service is deemed material. This is without prejudice to the application of special agreements between the employer and the employee stipulating a higher rate of computation and providing for more benefits to the discharged employee. 17 WHEREFORE, the petition is GRANTED. The challenged resolution of September 22,1987, is AFFIRMED in toto except for the grant of separation pay in the form of financial assistance, which is hereby DISALLOWED. The temporary restraining order dated March 23, 1988, is LIFTED. It is so ordered. Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Medialdea, JJ., concur.

Separate Opinions

FERNAN, C.J., dissenting: The majority opinion itself declares that the reason for granting separation pay to lawfully dismissed employees is that "our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers." 1 It is my firm belief that providing a rigid mathematical formula for determining the amounts of such separation pay will not be in keeping with these constitutional directives. By computing the allowable financial assistance on the formula suggested, we shall be closing our eyes to the spirit underlying these constitutional mandates that "those who have less in life should have more in law." It cannot be denied that a low salaried employee who is separated from work would suffer more hardship than a well-compensated one. Yet, if we follow the formula suggested, we would in effect be favoring the latter instead of the former, as it would be the low- salaried employee who would encounter difficulty finding another job. I am in accord with the opinion of Justice Sarmiento that we should not rationalize compassion and that of Justice Padilla that the awards of financial assistance should be left to the discretion of the National Labor Relations Commission as may be warranted by the "environmental facts" of the case. PADILIA, J., separate opinion I concur in the decision penned by Mr. Justice Cruz when it disallows separation pay, as financial assistance, to the private respondent, since the ground for termination of employment is dishonesty in the performance of her duties. I do not, however, subscribe to the view that "the separation pay, if found due under the circumstances of each case, should be computed at the rate of one month salary for every year of service, assuming the length of such service is deemed material." (p.11, Decision). It is my considered view that, except for terminations based on dishonesty and serious misconduct involving moral turpitude-where no separation pay should be allowed--in other cases, the grant of separation pay, i.e. the amount thereof, as financial assistance to the terminated employee, should be left to the judgment of the administrative agency concemed which is the NLRC. It is in such cases- where the termination of employment is for a valid cause without, however, involving dishonesty or serious misconduct involving moral turpitude-that the Constitutional policy of affording protection to labor should be allowed full play; and this is achieved by leaving to the NLRC the primary jurisdiction and judgment to determine the amount of separation pay that should be awarded to the terminated employee in accordance with the "environmental facts" of each case. It is further my view that the Court should not, as a rule, disturb or alter the amount of separation pay awarded by the NLRC in such cases of valid termination of employment but with the financial assistance, in the absence of a demonstrated grave abuse of discretion on the part of the NLRC. GRIO AQUINO, J., dissent:

We should not rationalize compassion. I vote to affirm the grant of financial assistance.

Separate Opinions FERNAN, C.J., dissenting: The majority opinion itself declares that the reason for granting separation pay to lawfully dismissed employees is that "our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers." 1 It is my firm belief that providing a rigid mathematical formula for determining the amounts of such separation pay will not be in keeping with these constitutional directives. By computing the allowable financial assistance on the formula suggested, we shall be closing our eyes to the spirit underlying these constitutional mandates that "those who have less in life should have more in law." It cannot be denied that a low salaried employee who is separated from work would suffer more hardship than a well-compensated one. Yet, if we follow the formula suggested, we would in effect be favoring the latter instead of the former, as it would be the low- salaried employee who would encounter difficulty finding another job. I am in accord with the opinion of Justice Sarmiento that we should not rationalize compassion and that of Justice Padilla that the awards of financial assistance should be left to the discretion of the National Labor Relations Commission as may be warranted by the "environmental facts" of the case. PADILIA, J., separate opinion I concur in the decision penned by Mr. Justice Cruz when it disallows separation pay, as financial assistance, to the private respondent, since the ground for termination of employment is dishonesty in the performance of her duties. I do not, however, subscribe to the view that "the separation pay, if found due under the circumstances of each case, should be computed at the rate of one month salary for every year of service, assuming the length of such service is deemed material." (p.11, Decision). It is my considered view that, except for terminations based on dishonesty and serious misconduct involving moral turpitude-where no separation pay should be allowed--in other cases, the grant of separation pay, i.e. the amount thereof, as financial assistance to the terminated employee, should be left to the judgment of the administrative agency concemed which is the NLRC. It is in such cases- where the termination of employment is for a valid cause without, however, involving dishonesty or serious misconduct involving moral turpitude-that the Constitutional policy of affording protection to labor should be allowed full play; and this is achieved by leaving to the NLRC the primary jurisdiction and judgment to determine the amount of separation pay that should be awarded to the terminated employee in accordance with the "environmental facts" of each case. It is further my view that the Court should not, as a rule, disturb or alter the amount of separation pay awarded by the NLRC in such cases of valid termination of employment but with the financial assistance, in the absence of a demonstrated grave abuse of discretion on the part of the NLRC. GRIO AQUINO, J., dissent: We should not rationalize compassion. I vote to affirm the grant of financial assistance. SUPREME COURT FIRST DIVISION MAXIMO CALALANG, Petitioner, -versusA. D. WILLIAMS, ET AL., Respondents. x--------------------------------------------------x DECISION G.R. No. 47800 December 2, 1940 LAUREL, J.: Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court this petition for a writ of prohibition against the respondents, A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila. chanroblespublishingcompany It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de laBarca to Dasmarias Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic; that the Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director of Public Works the adoption of the measure proposed in the resolution aforementioned, in pursuance of the provisions of Commonwealth Act No. 548 which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads; that on August 2, 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission as aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as above indicated, for a period of one year from the date of the opening of the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted; that as a consequence of such enforcement, all animal-drawn vehicles are not allowed to pass and pick up passengers in the places above- mentioned to the detriment not only of their owners but of the riding public as well. chanroblespublishingcompany It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works, with the approval of the Secretary of Public Works and Communications, is authorized to promulgate rules and regulations for the regulation and control of the use of and traffic on national roads and streets is unconstitutional because it constitutes an undue delegation of legislative power. This contention is untenable. As was observed by this court in Rubi vs. Provincial Board of Mindoro (39 Phil, 660, 700), The rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since followed in a multitude of cases, namely: The true distinction therefore is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. vs. Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman vs. Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or official. The Legislature may make decisions of executive departments or subordinate officials thereof, to whom it has committed the execution of certain acts, final on questions of fact. (U.S. vs. Kinkead, 248 Fed., 141.) The growing tendency in

the decisions is to give prominence to the necessity of the case. chanroblespublishingcompany Section 1 of Commonwealth Act No. 548 reads as follows: SECTION1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines, the Director of Public Works, with the approval of the Secretary of Public Works and Communications, shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such roads and streets. Such rules and regulations, with the approval of the President, may contain provisions controlling or regulating the construction of buildings or other structures within a reasonable distance from along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of Public Works and his duly authorized representatives whenever the condition of the road or the traffic thereon makes such action necessary or advisable in the public convenience and interest, or for a specified period, with the approval of the Secretary of Public Works and Communications. chanroblespublishingcompany The above provisions of law do not confer legislative power upon the Director of Public Works and the Secretary of Public Works and Communications. The authority therein conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines and to close them temporarily to any or all classes of traffic whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest. The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated. To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly. It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law. As was said in Lockes Appeal (72 Pa. 491): To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know. The proper distinction the court said was this: The Legislature cannot delegate its power to make the law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law-making power, and, must, therefore, be a subject of inquiry and determination outside of the halls of legislation. (Field vs. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.) In the case of People vs. Rosenthal and Osmea, G.R. Nos. 46076 and 46077, promulgated June 12, 1939, and in Pangasinan Transportation vs. The Public Service Commission, G.R. No. 47065, promulgated June 26, 1940, this Court had occasion to observe that the principle of separation of powers has been made to adapt itself to the complexities of modern governments, giving rise to the adoption, within certain limits, of the principle of subordinate legislation, not only in the United States and England but in practically all modern governments. Accordingly, with the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased difficulty of administering the laws, the rigidity of the theory of separation of governmental powers has, to a large extent, been relaxed by permitting the delegation of greater powers by the legislative and vesting a larger amount of discretion in administrative and executive officials, not only in the execution of the laws, but also in the promulgation of certain rules and regulations calculated to promote public interest. chanroblespublishingcompany The petitioner further contends that the rules and regulations promulgated by the respondents pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate business or trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of the state. chanroblespublishingcompany Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public. In enacting said law, therefore, the National Assembly was prompted by considerations of public convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote the general welfare may interfere with personal liberty, with property, and with business and occupations. Persons and property may be subjected to all kinds of restraints and burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. vs. Gomez Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline, so that there may be established the resultant equilibrium, which means peace and order and happiness for all. The moment greater authority is conferred upon the government, logically so much is withdrawn from the residuum of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of insuring its preservation. chanroblespublishingcompany The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins vs. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), the right to exercise the police power is a continuing one, and a business lawful today may in the future, because of the changed situation, the growth of population or other causes, become a menace to the public health and welfare, and be required to yield to the public good. And in People vs. Pomar (46 Phil., 440), it was observed that advancing civilization is bringing within the police power of the state today things which were not thought of as being within such power yesterday. The development of civilization, the rapidly increasing population, the growth of public opinion, with an increasing desire on the part of the masses and of the government to look after and care for the interests of the individuals of the state, have brought within the police power many questions for regulation which formerly were not so considered. chanroblespublishingcompany The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people. The promotion of social justice, however, is to be achieved not through a mistaken sympathy towards any given group. Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra- constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. chanroblespublishingcompany Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about the greatest good to the greatest number. chanroblespublishingcompany IN VIEW OF THE FOREGOING, the Writ of Prohibition Prayed for is hereby denied, with costs against the petitioner. So ordered. Avancea, C.J., Imperial, Diaz and Horrilleno, JJ., concur.

G.R. No. 153904

January 17, 2005

PNOC-EDC, NAZARIO VASQUEZ, President; MARCELINO TONGCO, Acting Manager Project Operations & Manager, Project Development; JESUS QUEVENCO, JR., Resident Manager, SNGP/PIPE; and REMEGIO B. CORNELIO, Human Resource Officer, SNGP-PIPE, petitioners, vs. FREDERICK V. ABELLA, respondent. DECISION CHICO-NAZARIO, J.: This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, with a prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order, seeking to set aside the Decision 1 of the Court of Appeals dated 30 January 2002 in CA-G.R. SP No. 54484, which affirmed, with modification, the Decision2 of the National Labor Relations Commission (NLRC), Fourth Division, Cebu City, dated 08 May 1998, reversing

the Decision3 of the Labor Arbiter dated 25 April 1997 in the consolidated cases RAB VII-07-0082-94-D and RAB VII-08-0082-95-D. Petitioner Philippine National Oil Company - Energy Development Corporation (PNOC-EDC) is a government-owned and controlled corporation organized under the Corporation Code of the Philippines, with Nazario Vasquez as its president; Marcelino M. Tongco, Acting Manager, Project Development; Jesus Quevenco, Jr., Resident Manager, Southern Negros Geothermal Plant (SNGP)/PIPE; and Remegio Cornelio, Human Resource Officer, SNGP/PIPE. Private respondent Frederick V. Abella is an employee of the petitioner company, assigned as a Security Assistant. The Facts of the Case On 01 June 1989, herein private respondent Frederick V. Abella started working with herein petitioner PNOC-EDC as a probationary Security Assistant at its SNGP in Ticala, Valencia, Negros Oriental. Subsequently, he became a regular employee. Less than one year later, or on 20 April 1990, Abella was informed that his employment with PNOC-EDC would be terminated effective 21 May 1990, allegedly due to a company-wide reorganization pursuant to its Manpower Reduction Program, wherein the position of Security Assistant at PNOC-EDC SNGP had been abolished. Aggrieved, Abella filed a case of illegal dismissal, and for actual, moral, and exemplary damages with the NLRC, Regional Arbitration Branch No. VII at Dumaguete City, docketed as NLRC RAB VII-05-364-90-D, against the PNOC-EDC and its officers. After hearing the parties, Labor Arbiter Geoffrey P. Villahermosa rendered a Decision 4 dated 27 August 1991, holding that Abella was illegally dismissed as the company and its officers failed to show a "clear scheme and convincing proof of reorganization," to wit: WHEREFORE, premises considered judgment is hereby rendered ordering respondents to reinstate complainant to his former position without loss of seniority rights and privileges; his backwages from the time he was terminated on 21 May 1990 up to his actual reinstatement; his withheld second half salary for the month of May 1990 in the amount of P4,291.17; moral damages amounting to P30,000.00; exemplary damages for public good amounting to P20,000.00 and 10% attorneys fees from the total adjudicated claims. The computation of the award of the complainant is hereto attached and forms as [an] integral part hereof. All other claims are dismissed. An appeal was timely filed with the NLRC. Meanwhile, with said appeal still pending in the NLRC, the labor arbiter issued an order 5 dated 20 November 1991, directing the company to "admit back to work or reinstate the complainant 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." Pursuant to the above order, Abella was reinstated in the payroll as a General Services Assistant (PAL II), his original position of Security Assistant having been abolished by virtue of the company-wide reorganization. According to the company, "the position is of the same level as Assistant Security and had the same salary rate and benefits."6 On 11 February 1992, Abella, through counsel, wrote Quevenco, Resident Manager at the SNGP, to protest his assignment in the payroll as General Services Assistant (PAL II). Subsequently, he was again re-slotted in the payroll as a Pipeline Maintenance Foreman, which, according to the petitioners, is another "position with the same salary and benefits"7 as another Security Assistant. This "change" of position was classified as a lateral transfer.8 On 24 August 1992, Abella wrote9 petitioner Quevenco,10 to request that he (Abella) be physically reinstated and allowed to perform security functions. He wrote: Engr. Jesus M. Quevenco, Jr. Resident Manager PNOC Energy Development Corporation Southern Negros Geothermal Project Ticala, Valencia Negros Oriental Sir: This is to officially inform you that despite my lawyers letter11 dated February 11, 1992, I am willing to perform security functions at PNOC-Energy Development Corporation, Southern Negros Geothermal Project. In view of this, may I request adjustments/arrangements with our Head Office so I can immediately assume duty at your convenience. Very respectfully yours, (Sgd.) FREDERICK V. ABELLA12 Said request was granted on 27 October 1992 when Abella was temporarily13 detailed as Security Assistant at SNGPs PAL II Development Project, Northern Cotabato. But on even date, he was also concomitantly designated as Acting Security Officer for the entire SNGP due to the reassignment of the incumbent Security Officer to the Northern Negros Geothermal Project of the company. 141awphi1.nt On 03 November 1992, Abella wrote a letter, this time addressed to Vasquez, then Vice-President of the company, to confirm that he had assumed his security functions; that he was open for negotiations regarding his case; and, that he hoped that his appointment/work status would be normalized. On 15 December 1992, in a telegraphic message, Tongco informed Abella to immediately report to Mindanao I Geothermal Plant (MIGP), Kidapawan, North Cotabato. In the same correspondence, Tongco defined private respondents duties and functions and delimited the duration of his stay at MIGP as temporary, or for about 3 months only. Shortly thereafter, or on 28 January 1993, Abella and the company agreed to settle NLRC RAB Case No. VII-05-364-90-D. Abella consequently received the amount of One Hundred Twenty-Four Thousand Eight Hundred Twenty-Four Pesos and Thirty-One Centavos (P124,824.31) as settlement of the said case and

by virtue of the said agreement, both parties filed a Joint Motion to Dismiss 15 before the NLRC, viz: JOINT MOTION TO DISMISS COMES NOW herein parties to the entitled case, to this Honorable Commission respectfully state that 1. Complainant has offered and Respondent has accepted a proposal to settle the instant case amicably; 2. The parties have agreed to shoulder their respective costs; 3. All other claims, damages, and causes of action arising out of the instant case are waived; 4. Consequently, the parties are no longer interested in pursuing and desire to dismiss the case. WHEREFORE, PREMISES CONSIDERED, it is hereby prayed that the instant case be dismissed. 16 (Emphasis supplied) Acting on the Joint Motion to Dismiss, the NLRC issued a Resolution dated 22 February 1993, granting the above motion dismissing the appeal earlier filed before it, the pertinent portions of which read: Submitted before Us is a joint motion to dismiss the instant case dated February 1, 1993, filed by both parties duly assisted by their respective counsel. In view of the manifest intention of the parties to effect a settlement of the dispute between them and it appearing that the terms of the instant motion is not contrary to law, morals, public order, and public policy, the same is hereby granted. After all "Compromise being the essence of labor justice should be honored." WHEREFORE, in view of the foregoing, the instant joint motion to dismiss is hereby granted. The appeal is hereby dismissed as prayed for by the parties. Let the records of this case be forwarded to the Regional Arbitration Branch of origin for proper disposition. 17 An Entry of Finality of Judgment was subsequently entered in the books on 29 March 1993. At this time, while carrying out security functions at MIGP, Kidapawan, North Cotabato, Abellas official item or position in the payroll was Maintenance Foreman, SNGP, Valencia, Negros Oriental. Said state of affairs prompted the late Jerry T. Susas 18 to write Tongco about it and to recommend that "proper action be made in order to harmonize security-related support services at MIGP."19 On 10 December 1993, Abella filed a motion for the issuance of a writ of execution of the decision dated 27 August 1991, of the labor arbiter. Corollary to the said motion, he informed Quevenco of his intention to report back to SNGP, Ticala, Valencia, Negros Oriental, his original assignment prior to the filing of the 1991 case20 for illegal dismissal. On 31 January 1994, Abella received a show cause memorandum dated 28 January 1994 for his alleged absence without official leave (AWOL) and insubordination. Responding to the above, Abella explained in a letter dated 02 February 1994 that his position as SGS Maintenance is in complete contravention of the decision of the labor arbiter.21 On 01 March 1994, despite the above response, Abella was nevertheless transferred to PNOC-EDC Leyte-A Geothermal Project, as a Security Assistant,22 a position that was vacant at that time. Said transfer was accompanied by a Transfer or Change of Position Form 23 showing Abellas change of official position from Pipeline Maintenance Foreman to Security Assistant to be a lateral transfer. On 24 May 1994, Tongco sent Abella a radiogram message instructing him to present himself, this time at the Mt. Labo Geothermal Project, Camarines Norte, as a Security Assistant. A second message followed emphasizing the need for Abella to report at the said site not later than 25 May 1994. On 01 June 1994, Abella was once more instructed to report to the petitioner companys Mt. Labo Geothermal Project. Said order was again accompanied by a Transfer or Change of Position Form24 stating the transfer of Abella as a Security Assistant from Leyte to Mt. Labo to be a lateral transfer. All the above-mentioned directives were disregarded or ignored. In the intervening time, on 16 June 1994, the labor arbiter ruled on the motion for execution filed by the complainant by issuing a Writ of Execution directing the Sheriff, NLRC, Cebu City, to proceed to the premises of the company at Ticala, Valencia, Negros Oriental, to effect and to cause the reinstatement of Abella either by physical or by payroll reinstatement. On 17 June 1994, Sheriff Remegio B. Cornelio issued a certification that per attached pay slip, private respondent had been reinstated in the payroll with PNOC-EDC. In the meantime, for failing to heed the directives of his supervisors, Abella received another "show cause" memorandum dated 14 July 1994, from Tongco, ordering him to explain in writing why no disciplinary action should be taken against him for insubordination and for being AWOL. Abella, in his reply25 dated 16 July 1994, countered that "he is not guilty of insubordination since he was not reinstated to his former position as Security Assistant at Ticala, Valencia, Negros Oriental, per Writ of Execution issued by the labor arbiter." On 18 July 1994, claiming unfair and prejudicial treatment, Abella filed a complaint before the NLRC, Sub-Regional Arbitration Branch No. VII, Dumaguete City, for unfair labor practice, illegal suspension, nonpayment of mid-year bonus and 13th month pay for 1990 and 1991, claim for hazard pay, and annual salary increase against the company and its officers, docketed as NLRC Sub-RAB Case No. 07-0082-94-D. Several months later, or on 06 October 1994, Abella received a notice 26 of disciplinary action of Grave Suspension with Final Warning, dated 28 September 1994, against him. In response, on 17 October 1994, Abella filed another complaint with the NLRC, against the company and its officers, for unfair labor practice, illegal suspension, and nonpayment of wages with damages, docketed as NLRC Sub-RAB Case No. 010-0123-94-D.

Nevertheless, Abella continued working at SNGP, Ticala, Valencia, Negros Oriental, until he was accordingly notified of his termination for cause. Thereafter, he filed a third complaint with the NLRC against the company and its officers, this time for unfair labor practice, illegal dismissal, and nonpayment of wages, with prayer for reinstatement and payment of moral and exemplary damages as well as attorneys fees docketed as NLRC Sub-RAB Case No. 08-0082-95-D. After hearing the parties, Labor Arbiter Geoffrey Villahermosa27 rendered a consolidated Decision28 dated 25 April 1997, the dispositive portion of which states: WEREFORE, in the light of the foregoing, judgment is hereby rendered declaring the respondents not guilty of unfair labor practice and illegally dismissing the complainant, but however, as a measure of social justice and due to the afore-cited Supreme Court Ruling, the respondents are directed to pay the complainant his separation pay computed from June 1, 1989 to April 30, 1997 at one (1) month pay for every year of service, . . . In maintaining that Abella was not illegally dismissed, the labor arbiter opined that the records of the case show that Abella was "reassigned from his position in Ticala, Valencia, Negros Oriental, to that in Cotabato province by virtue of a memorandum issued by Tongco which Abella readily accepted and agreed to said transfer," therefore there is no valid basis for the claim that he was not validly reinstated.l^vvphi1.net Thus, the charges of insubordination and AWOL committed by Abella fall squarely within the provision of Rule 26 of the petitioner companys rules and regulations as contained in the "PNOC Rules and Regulations on Discipline." Said rules provide for a penalty ranging up to dismissal even for the first offense. On appeal, the NLRC reversed and set aside the Decision29 of the labor arbiter and entered a new one, viz: WHEREFORE, as above-disquisitioned the decision appealed from is REVERSED and SET ASIDE and a new one ENTERED finding the dismissal illegal, hence complainant should be ordered reinstated to his former position as Security Assistant SNGP pursuant to the Decision of August 27, 1991 with full backwages from December 1, 1991 when he was illegally declared as AWOL up to his actual reinstatement. The NLRC found that Abella was illegally dismissed "considering that at bar, the parties had reached a settlement without vacating the decision (of the labor arbiter dated 27 August 1991), then the decision should be given its full force and effect," and as the "[r]ecords show that he was never reinstated to his former position as admitted by the correspondence of J.T. Susas dated 25 March 1993, memorandum of complainant dated 17 September 1993 and letter of complainants counsel to Engr. Quevenco, dated 03 January 1994." The tribunal further held that a "review of the facts and circumstances of the case, we find that while the monetary consideration of the decision of 27 August 1991 has been satisfied the reinstatement aspect of the decision remained unsatisfied which prompted counsel to file a motion for the issuance of [a] writ of execution." "The assignments of the complainants (sic) to the various positions could not equate to full enforcement of the decision of 27 August 1991 considering that these positions were not his former position and his assumption to these positions were under protest." There being a timely motion for reconsideration, the Honorable Commission, in a Resolution 30 dated 14 June 1999, reversed itself insofar as the order for reinstatement and computation of backwages were concerned. Instead, the Commission held that since Abella had already reached the retirement age of sixty (60) years, reinstatement would no longer be possible. Necessarily, the computation of backwages should only be from 01 December 1994 up to 15 January 1998. After 15 January 1998, Abella should be given all the benefits due him under the retirement provision of the collective bargaining agreement of the company. With the denial of their motion for reconsideration, the company and its officers came to the Court of Appeals via a petition for certiorari under Rule 65 of the Revised Rules of Court and sought to nullify the abovestated NLRC Decision dated 08 May 1998 and Resolution dated 14 June 1999. On 27 February 2002, the appellate court promulgated the impugned Decision31 dismissing the petition for lack of merit, the dispositive portion of which states: WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. Accordingly, the assailed decision and resolution of the NLRC, Fourth Division, Cebu City, are hereby AFFIRMED. No pronouncement as to cost. The company and its officers motion for reconsideration having been denied, the instant petition was filed with the following assignment of errors: I. CONTRARY TO THE OPINION OF THE COURT OF APPEALS, IT IS NOT TRUE THAT THE REINSTATEMENT OF RESPONDENT WAS NOT A FAITHFUL COMPLIANCE OF THE PROVISIONS OF PARAGRAPH 3, ARTICLE 223 OF THE LABOR CODE. II. CONTRARY TO THE OPINION OF THE COURT OF APPEALS, THE JOINT MOTION TO DISMISS SUBMITTED BY PETITIONERS AND RESPONDENT BEFORE THE FOURTH DIVISION OF THE NATIONAL LABOR RELATIONS COMMISSION, CEBU CITY, SHOULD OPERATE TO DISMISS THIS CASE IN ITS TOTALITY, AND NOT JUST THE APPEAL PENDING BEFORE THE SAID DIVISION. III. CONTRARY TO THE OPINION OF THE COURT OF APPEALS, THERE IS CLEAR LEGAL AND FACTUAL BASIS TO HOLD RESPONDENT GUILTY OF THE OFFENSES OF INSUBORDINATION AND OF INFRACTION OF COMPANY RULES ON UNAUTHORIZED ABSENCES; HENCE, THE TERMINATION OF RESPONDENT FROM EMPLOYMENT AFTER OBSERVANCE OF DUE PROCESS WAS LEGAL.32 The Ruling of the Court The first and second issues question the validity of the actual reinstatement of the private respondent following the order of the Labor Arbiter Geoffrey P. Villahermosa in NLRC RAB VII-05-364-90-D. The issue of reinstatement is addressed by paragraph three of Article 223 of the Labor Code, to wit: ART. 223. Appeal . . . . 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 above-stated provision of the Labor Code, however, must be read in conjunction with the implementing rules and regulations of the said law. Sec. 4(a) of Rule 1, Book VI of the Rules and Regulations Implementing the Labor Code, provides that: SEC. 4. Reinstatement to former position. (a) An employee who is separated from work without just cause shall be reinstated to his former position, unless such position no longer exists at the time of his reinstatement, in which case he shall be given a substantially equivalent position in the same establishment without loss of seniority rights. [Emphasis supplied.] Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position more or less of a similar nature as this previously occupied by the employee.33 Accordingly, an employee who is separated from his employment on a false or nonexistent cause is entitled to be reinstated to his former position because the separation is illegal. If the position is no longer available for any other valid and justifiable reason, however, the reinstatement of the illegally dismissed employee to his former position would neither be fair nor just. The law itself can not exact compliance with what is impossible. Ad imposible tenetur.34 The employers remedy is to reinstate the employee to a substantially equivalent position without loss of seniority rights as provided for above.1a\^/phi1.net In the case at bar, strictly applying the rules provided above, private respondent Abella should have been reinstated back to his old position as a Security Assistant at the SNGP, Ticala, Valencia, Negros Oriental. Or, at the very least, since the position of Security Assistant at Ticala, Valencia, Negros Oriental, had been abolished as claimed by the petitioners, he should have been reinstated to another position that is substantially equivalent to his former one. In reality, private respondent Abella was first reinstated in the payroll, as a General Services Assistant and subsequently, as a Pipeline Foreman, while he was actually discharging the functions of a Security Assistant. As insisted by the petitioners, this situation was due to the fact that the original position of the private respondent had already been abolished in the previous company-wide reorganization35 in 1991. But then, the private respondent was reslotted as Security Assistant when he was transferred to the Leyte Geothermal Project. He was, thus, performing the functions of a Security Assistant and at the same time occupying the official position of a Security Assistant though in a geographically different location, when said position became vacant. Be that as it may, notwithstanding the above disquisitions, the atypical circumstances in this case capitulate against the outright application of the said rules. Whether or not the private respondent was validly reinstated per Order of the Labor Arbiter dated 27 August 1991, in NLRC RAB VII-05-364-90-D, is beside the point in view of the fact that the Joint Motion to Dismiss filed by the parties in the earlier case contained a clause whereby the parties agreed that "[a]ll other claims, damages and causes of action arising out of the instant case are waived." Regrettably, the Court of Appeals and the NLRC have overlooked this very important fact. The clause agreed to by the parties in the Joint Motion to Dismiss filed before the NLRC was in the nature of a compromise agreement, i.e., "an agreement between two or more persons, who for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing." 36 Settlement of disputes by way of compromise, is an accepted, nay desirable and encouraged practice in courts of law and administrative tribunals.37 Generally favored in law, such agreement is a bilateral act or transaction that is binding on the contracting parties and is expressly acknowledged by the Civil Code as a juridical agreement between them. Prevailing case law provides that "a compromise once approved by final orders of the court has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery. Hence, a decision on a compromise agreement is final and executory. Such agreement has the force of law and is conclusive on the parties. It transcends its identity as a mere contract binding only upon the parties thereto, as it becomes a judgment that is subject to execution in accordance with the Rules. Judges therefore have the ministerial and mandatory duty to implement and enforce it."38 (Underlining supplied.) Hence, compromise agreements duly approved by the courts are considered the decisions in the particular cases they involve. 39 In the case at bar, when both parties agreed to waive "all other claims, damages and causes of action" arising out of NLRC RAB VII-05-364-90-D, a compromise they entered into in good faith absent any allegation otherwise, they did not only agree to dismiss the appeal pending before the NLRC. Particularly, the private respondent also agreed to receive One Hundred Twenty-Four Thousand Eight Hundred Twenty-Four Pesos and Thirty-One Centavos (P124,824.31), thus, relinquishing his claim to the Decision40 dated 27 August 1991, rendered by the labor arbiter in his favor. In return, the petitioner company, to put an end to the labor dispute, acquiesced to have its appeal before the NLRC dismissed. The waiver, executed by the private respondent and the petitioner company in which mutual concessions were given and mutual benefits were derived, was approved and considered by the NLRC when it promulgated its Order dated 22 February 1993, dismissing the appeal of the petitioners. Conformably, to cite jurisprudence, the Compromise Agreement approved by the proper authority became the decision in this particular case. Settlements of this kind not only are recognized to be proper agreements but so encouraged as well. 41 Undoubtedly, the allegations of invalid reinstatement on the part of the petitioners are a mere afterthought on private respondents part in a fascinating attempt to extricate himself from an assignment that brought him to a far away place and caused him to be separated from his family. It is well to note that even if each party agreed to something that neither might have actually wanted, except for the peace that would be brought by the avoidance of a protracted litigation, still, the agreement must govern their relations. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned or conveniently forgotten, simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.42 In the case at bar, the Joint Motion to Dismiss was not only signed by the private respondent, but by his counsel as well. The resolution of the third issue hinges upon a determination of the validity of the orders directing the transfer of the private respondent from one site to another. In this jurisdiction, we recognize that management has wide latitude to regulate, according to his own discretion and judgment, all aspects of employment, to the requirements of its business.43 The scope and limits of the exercise of management prerogative, however, should attain a state of equilibrium when pitted against the constitutional right of labor to security of tenure. Of relevant significance in the case at bar is the right of the employer to transfer employees in their work station. We have previously held that it is the employers prerogative, based on its assessment and perception of its employees qualifications, aptitudes and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit of the company. 44 This right flows from ownership

and from the established rule that labor (laws) do not authorize the substitution of judgment of the employer in the conduct of his business, unless it is shown to be contrary to law, morals, or public policy.45 The rationale behind this rule is that an employees right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. 46 Especially so in this case where the respondent was not appointed for a security assistant for a specified place but was only designated therein. But of course, the managerial prerogative to transfer personnel must be exercised without grave abuse of discretion --- not unnecessary, inconvenient nor prejudicial to the displaced employee, meaning there is no demotion in rank or diminution of salary, benefits and other privileges. In this case, the private respondent was charged with insubordination for failing to heed the directives of his superior transferring him from one site to another. The Court of Appeals negated said charge and declared that when private respondent Abella failed to obey the orders of the petitioners reinstating him to Leyte and Mt. Labo sites, said failure cannot give rise to insubordination as private respondent Abella had the right to be reinstated under the same terms as and conditions prevailing prior to his dismissal on 21 May 1990, especially so when the latters refusal was premised on the fact that the labor arbiter had earlier issued a Writ of Execution ordering the reinstatement of the private respondent to his former position at PNOC-EDC SNGP, Ticala, Valencia, Negros Oriental. We do not agree. First and foremost, as discussed earlier, the order of the labor arbiter reinstating the private respondent to his former position in SNGP had already been superseded by the agreement of both parties to waive "[a]ll other claims, damages and causes of action arising out of the instant case . . . ." Consequently, the writ issued by the labor arbiter executing the order of reinstatement had no leg to stand on. Secondly, the law does not preclude the reinstatement of an employee, who has been separated from work without just cause, to a substantially equivalent position in the same establishment without loss of seniority rights, and with the same rank, salary and privileges,47 if the former position is no longer available. Therefore, the claim of lack of insubordination due to lack of valid reinstatement must fail. Insubordination or willful disobedience by an employee, to constitute a just cause for terminating his employment, the orders, regulations, or instructions of the employer or representative must be: 1. reasonable and lawful; 2. sufficiently known to the employee; and 3. in connection with the duties which the employee has been engaged to discharge. There is no doubt in this case that the assailed transfer orders fulfill the second and third elements above-stated. Private respondent Abella was well informed of the orders of transfer and said orders were well in connection with the security functions of the private respondent. It is only the issue of reasonableness and lawfulness of said orders that have to be elucidated on. The reasonableness and lawfulness of an order, regulation, or instruction depend on the circumstances availing in each case. Reasonableness pertains to the kind or character of directives and commands and to the manner in which they are made. 48 The petitioners aver that the orders were well within their managerial prerogative to make and that there was never any agreement that private respondent Abella had to be posted in a fixed place. The appellate court, on the other hand, stated that its finding that the private respondent was not guilty of insubordination and abandonment was based on the fact that the dismissal of private respondent Abella was effected with bad faith, as it was intended to punish him for refusal to heed his employers unreasonable orders. The records of the present case fail to show any hint of truth to the declaration of the appellate court. A thorough review of the records of the case shows that there is a valid reason behind the transfer of the private respondent to MIGP in Kidapawan, North Cotabato. As stated in the telegraphic message received by the private respondent, DMD-15 DMK-22 DEC 15/92 TO: ABC / SEP CC EBP / JLA / FVA / MBP / BMO FR: MMT IN VIEW OF APOS CRITICAL SECURITY SITUATION, AS DISCUSSED WITH EBP, FVABELLA WILL BE ASSIGNED TO MIGP IMMEDIATELY TO STRENGTHEN OUR APO SECURITY COVERAGE. FVA, WILL HANDLE OVERALL STRATEGIC PLANNING. PLS ADVISE FVAS EARLIEST TRAVEL TO MIGP. EMC49 Nothing in the above message alludes to any bad faith on the part of the petitioners. In truth, it is quite apparent that the order of transfer of the private respondent from Negros Oriental to Northern Cotabato was due to the exigencies of the state of affairs in the geothermal plants of the petitioner company. Other internal messages50 between the petitioner companys officers and employees also sustain the validity of the necessity and lack of bad faith in ordering the transfer of the private respondent, to wit: DMK-35

JAN. 06, 1993 TO: JLA CC: FVA/MBP FM: MMT CC: EBP WITH FVAS PRESENCE IN M1GP, I EXPECT THAT WE WILL ATTAIN FF. OBJECTIVES: COMPLETE, FINALIZE AND PUT INTO EFFECT OUR CONTINGENCY PLANS, SECUTIRY SOPS, ACCESS PROCEDURES AND CONDUCT QEKVTYXELI/NJETTQ. 2. EFFECTIVE COORDINATION BOTH WITH HIGHER KETEXYJM YVXBLJEXERQ AND SITE LPPEARJQ. 3. EFFECTIVE MONITORING AND CONTROL OF OUR SECURITY PROVISIONS I.E. DTVR ZVYJNQ, KETEXYJM. 4. IMPROVE RELATIONS WITH KETEXYJM. 5. ADDRESS CONCERNS OF OUR STAFF REGARDING QRAVJEXM ALCRJYZR. . . . PLS. USE DAY 6 CODE. 2210H51 TO: JLA (KIDAP) FVA (DGTE) FR: MMT CC: FCC (LABO) MBP (KIDAP) AA. DUE TO THE ACCELERATED DRILLING AT LABO REQUIRING IMMEDIATE SECURITY COORDINATION AND SETTING-UP, EFFECTIVE IMMEDIATELY FVABELLA IS TRANSFERRED TO MT. LABO GEOTHERMAL PROJECT AS SECURITY ASSISTANT. . . BB. TO RDO. OPERATOR SNGP PLS ENSURE MESSAGE IS SENT TO FVA. CC. TO FVA, ADVISE ME TRAVEL DETAILS.52 TO: FVA (DGTE) FR: MMT CC: FCC (LABO) THE SITUATION AT LABO IS CRITICAL AND YOU HAVE TO BE THERE IMMEDIATELY. IT IS IMPERATIVE THAT YOU TRAVEL IMMEDIATELY, NOT LATER THEN (sic) 25 MAY. ADVISE TRAVEL DETAILS. 53 By virtue of the characteristic or nature of the functions of security personnel, rotation and reassignment from one place to another, depending on the security needs of the company, are well within the job description of the private respondent. As explained, the orders to the private respondent to report to the Leyte Geothermal Plant and, later on, to the Mt. Labo site in Camarines Norte undeniably met the standards aforestated. What is more, the private respondent, when he accepted the offer of employment with the petitioner company, was aware that there was a possibility of a provincial assignment. When he accomplished his application for employment,54 in answering the question: "Are you Willing To Accept A Provincial Assignment?" the private respondent answered in the affirmative. Another irrefutable fact is that the records of the case bear out that even before the first controversy55 arose between the parties, the private respondent had been reassigned to at least three (3) different locations. His first assignment with the petitioner company was in Negros Oriental. A few months later, he was transferred to Camarines Norte; then again to Negros Oriental in 1990. In fact, in a memorandum56 dated 24 January 1990, the private respondent was one of the three security personnel directed to transfer from one assignment to another. Finally, it cannot be gainsaid that though the private respondent was assigned to perform security functions at other different sites, he had been receiving the same salary and benefits due a security personnel. Records even show that he was even accorded hazard pay for the duties and functions he was currently executing.57 The Philippine Constitution, while inexorably committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed, we should not be unmindful of the legal norm that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence. 58 WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated 30 January 2002, of the Court of Appeals and its Resolution dated 29 May 2002, denying the petitioners Motion for Reconsideration, are REVERSED and SET ASIDE. No costs. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo Sr. and Tinga, JJ., concur. Chanroblespublishingcompany___ G.R. No. 78909 June 30, 1989 MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs. THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, REGION X, respondents.

MEDIALDEA, J.: This is a petition for certiorari seeking the annulment of the Decision of the respondent Secretary of Labor dated September 24, 1986, affirming with modification the Order of respondent Regional Director of Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency cost of living allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's motion for reconsideration dated May 13, 1987, on the ground of grave abuse of discretion. Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86. On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p. 98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May, 1986, were duly submitted for inspection. On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that there was underpayment of wages and ECOLAs of all the employees by the petitioner, the dispositive portion of which reads: IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmed per review of the respondent payrolls and interviews with the complainant workers and all other information gathered by the team, it is respectfully recommended to the Honorable Regional Director, this office, that Antera Dorado, President be ORDERED to pay the amount of SIX HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01), representing underpayment of wages and ecola to the THIRTY SIX (36) employees of the said hospital as appearing in the attached Annex "F" worksheets and/or whatever action equitable under the premises. (p. 99, Rollo) Based on this inspection report and recommendation, the Regional Director issued an Order dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages and ECOLAs to all the petitioner's employees, the dispositive portion of which reads: WHEREFORE, premises considered, respondent Maternity and Children Hospital is hereby ordered to pay the above-listed complainants the total amount indicated opposite each name, thru this Office within ten (10) days from receipt thereof. Thenceforth, the respondent hospital is also ordered to pay its employees/workers the prevailing statutory minimum wage and allowance. SO ORDERED. (p. 34, Rollo) Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the dispositive portion of which reads: WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency wages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986. The case is remanded to the Regional Director, Region X, for recomputation specifying the amounts due each the complainants under each of the applicable Presidential Decrees. (p. 40, Rollo) On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo). The instant petition questions the all-embracing applicability of the award involving salary differentials and ECOLAS, in that it covers not only the hospital employees who signed the complaints, but also those (a) who are not signatories to the complaint, and (b) those who were no longer in the service of the hospital at the time the complaints were filed. Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as affirmed with modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts and the law on which the award was based. In its "Rejoinder to Comment", petitioner further questions the authority of the Regional Director to award salary differentials and ECOLAs to private respondents, (relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961, 1 SCRA 860, as authority for raising the additional issue of lack of jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction over money claims is properly lodged in the Labor Arbiter, based on Article 217, paragraph 3 of the Labor Code. The primary issue here is whether or not the Regional Director had jurisdiction over the case and if so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and enforcement powers under Article 128 of the Labor Code. The matter of whether or not the decision states clearly and distinctly statement of facts as well as the law upon which it is based, becomes relevant after the issue on jurisdiction has been resolved. This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). 1 Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned. Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority over money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus: . . . the Regional Director, in the exercise of his visitorial and enforcement powers under Article 128 of the Labor Code, has no authority to award money claims,

properly falling within the jurisdiction of the labor arbiter. . . . . . . If the inspection results in a finding that the employer has violated certain labor standard laws, then the regional director must order the necessary rectifications. However, this does not include adjudication of money claims, clearly within the ambit of the labor arbiter's authority under Article 217 of the Code. The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director was not empowered to share in the original and exclusive jurisdiction conferred on Labor Arbiters by Article 217." We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration system to the enforcement system. To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the disposition of labor standards cases. Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which read in part: Art. 216. Jurisdiction of the Commission. The Commission shall have exclusive appellate jurisdiction over all cases decided by the Labor Arbiters and compulsory arbitrators. The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers whether agricultural or non-agricultural. xxx xxx xxx (c) All money claims of workers, involving non-payment or underpayment of wages, overtime compensation, separation pay, maternity leave and other money claims arising from employee-employer relations, except claims for workmen's compensation, social security and medicare benefits; (d) Violations of labor standard laws; xxx xxx xxx (Emphasis supplied) The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows: ART. 127. Visitorial Powers. The Secretary of Labor or his duly authorized representatives, including, but not restricted, to the labor inspectorate, shall have access to employers' records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or in aid in the enforcement of this Title and of any Wage Order or regulation issued pursuant to this Code. With the promulgation of PD 850, Regional Directors were given enforcement powers, in addition to visitorial powers. Article 127, as amended, provided in part: SEC. 10. Article 127 of the Code is hereby amended to read as follows: Art. 127. Visitorial and enforcement powers. xxx xxx xxx (b) The Secretary of Labor or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order. xxx xxx xxx Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then amended by PD 850, provided in part: SEC. 22. Article 216 of the Code is hereby amended to read as follows: Art. 216. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-agricultural: xxx xxx xxx (3) All money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits and as otherwise provided in Article 127 of this Code. xxx xxx xxx (Emphasis supplied) Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by PD 850), there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and the Labor Arbiter. It became necessary to clarify and consolidate all governing provisions on jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions No. 6 was issued, and provides in part (on labor standards cases) as follows:

POLICY INSTRUCTIONS NO. 6 TO: All Concerned SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES xxx xxx xxx 1. The following cases are under the exclusive original jurisdiction of the Regional Director. a) Labor standards cases arising from violations of labor standard laws discovered in the course of inspection or complaints where employer-employee relations still exist; xxx xxx xxx 2. The following cases are under the exclusive original jurisdiction of the Conciliation Section of the Regional Office: a) Labor standards cases where employer-employee relations no longer exist; xxx xxx xxx 6. The following cases are certifiable to the Labor Arbiters: a) Cases not settled by the Conciliation Section of the Regional Office, namely: 1) labor standard cases where employer-employee relations no longer exist; xxx xxx xxx (Emphasis supplied) MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the rationale for, and the scope of, the enforcement power of the Regional Director, the first and second paragraphs of which provide as follows: POLICY INSTRUCTIONS NO. 7 TO: All Regional Directors SUBJECT: LABOR STANDARDS CASES Under PD 850, labor standards cases have been taken from the arbitration system and placed under the enforcement system, except where a) questions of law are involved as determined by the Regional Director, b) the amount involved exceeds P100,000.00 or over 40% of the equity of the employer, whichever is lower, c) the case requires evidentiary matters not disclosed or verified in the normal course of inspection, or d) there is no more employer-employee relationship. The purpose is clear: to assure the worker the rights and benefits due to him under labor standards laws without having to go through arbitration. The worker need not litigate to get what legally belongs to him. The whole enforcement machinery of the Department of Labor exists to insure its expeditious delivery to him free of charge. (Emphasis supplied) Under the foregoing, a complaining employee who was denied his rights and benefits due him under labor standards law need not litigate. The Regional Director, by virtue of his enforcement power, assured "expeditious delivery to him of his rights and benefits free of charge", provided of course, he was still in the employ of the firm. After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as Article 217) and with it a corresponding change in the jurisdiction of, and supervision over, the Labor Arbiters: 1. PD 1367 (5-1-78) gave Labor Arbiters exclusive jurisdiction over unresolved issues in collective bargaining, etc., and those cases arising from employeremployee relations duly indorsed by the Regional Directors. (It also removed his jurisdiction over moral or other damages) In other words, the Labor Arbiter entertained cases certified to him. (Article 228, 1978 Labor Code.) 2. PD 1391 (5-29-78) all regional units of the National Labor Relations Commission (NLRC) were integrated into the Regional Offices Proper of the Ministry of Labor; effectively transferring direct administrative control and supervision over the Arbitration Branch to the Director of the Regional Office of the Ministry of Labor. "Conciliable cases" which were thus previously under the jurisdiction of the defunct Conciliation Section of the Regional Office for purposes of conciliation or amicable settlement, became immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. In addition, the Labor Arbiter had jurisdiction even over termination and labor-standards cases that may be assigned to them for compulsory arbitration by the Director of the Regional Office. PD 1391 merged conciliation and compulsory arbitration functions in the person of the Labor Arbiter. The procedure governing the disposition of cases at the Arbitration Branch paralleled those in the Special Task Force and Field Services Division, with one major exception: the Labor Arbiter exercised full and untrammelled authority in the disposition of the case, particularly in the substantive aspect, his decisions and orders subject to review only on appeal to the NLRC. 3 3. MOLE Policy Instructions No. 37 Because of the seemingly overlapping functions as a result of PD 1391, MOLE Policy Instructions No. 37 was issued on October 7, 1978, and provided in part: POLICY INSTRUCTIONS NO. 37

TO: All Concerned SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy disposition of labor cases, the following guidelines are hereby established for the information and guidance of all concerned. 1. Conciliable Cases. Cases which are conciliable per se i.e., (a) labor standards cases where employer-employee relationship no longer exists; (b) cases involving deadlock in collective bargaining, except those falling under P.D. 823, as amended; (c) unfair labor practice cases; and (d) overseas employment cases, except those involving overseas seamen, shall be assigned by the Regional Director to the Labor Arbiter for conciliation and arbitration without coursing them through the conciliation section of the Regional Office. 2. Labor Standards Cases. Cases involving violation of labor standards laws where employer- employee relationship still exists shall be assigned to the Labor Arbiters where: a) intricate questions of law are involved; or b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations officers are required for their proper disposition. 3. Disposition of Cases. When a case is assigned to a Labor Arbiter, all issues raised therein shall be resolved by him including those which are originally cognizable by the Regional Director to avoid multiplicity of proceedings. In other words, the whole case, and not merely issues involved therein, shall be assigned to and resolved by him. xxx xxx xxx (Emphasis supplied) 4. PD 1691(5-1-80) original and exclusive jurisdiction over unresolved issues in collective bargaining and money claims, which includes moral or other damages. Despite the original and exclusive jurisdiction of labor arbiters over money claims, however, the Regional Director nonetheless retained his enforcement power, and remained empowered to adjudicate uncontested money claims. 5. BP 130 (8-21-8l) strengthened voluntary arbitration. The decree also returned the Labor Arbiters as part of the NLRC, operating as Arbitration Branch thereof. 6. BP 227(6-1- 82) original and exclusive jurisdiction over questions involving legality of strikes and lock-outs. The present petition questions the authority of the Regional Director to issue the Order, dated August 4, 1986, on the basis of his visitorial and enforcement powers under Article 128 (formerly Article 127) of the present Labor Code. It is contended that based on the rulings in the Ong vs. Parel (supra) and the Zambales Base Metals, Inc. vs. The Minister of Labor (supra) cases, a Regional Director is precluded from adjudicating money claims on the ground that this is an exclusive function of the Labor Arbiter under Article 217 of the present Code. On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows: (b) The Minister of Labor or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order, except in cases where the employer contests the findings of the labor regulations officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. (Emphasis supplied) On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1, 1980; Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective June 1, 1982, inter alia, provides: ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or nonagricultural: 1. Unfair labor practice cases; 2. Those that workers may file involving wages, hours of work and other terms and conditions of employment; 3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits; 4. Cases involving household services; and 5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes and lock-outs. (Emphasis supplied) The Ong and Zambales cases involved workers who were still connected with the company. However, in the Ong case, the employer disputed the adequacy of

the evidentiary foundation (employees' affidavits) of the findings of the labor standards inspectors while in the Zambales case, the money claims which arose from alleged violations of labor standards provisions were not discovered in the course of normal inspection. Thus, the provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over uncontested money claims discovered in the course of normal inspection, provided an employer-employee relationship still exists, are inapplicable. In the present case, petitioner admitted the charge of underpayment of wages to workers still in its employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest against the findings of the labor inspectors. Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base Metals case, Executive Order No. 111 was issued on December 24, 1986, 5 amending Article 128(b) of the Labor Code, to read as follows: (b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY NOTWITHSTANDING AND IN CASES WHERE THE RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code AND OTHER LABOR LEGISLATION based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. (Emphasis supplied) As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion however, that the inclusion of the phrase, " The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists" ... in Article 128(b), as amended, above-cited, merely confirms/reiterates the enforcement adjudication authority of the Regional Director over uncontested money claims in cases where an employer-employee relationship still exists. 6 Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor authorities to provide our workers immediate access (when still feasible, as where an employer-employee relationship still exists) to their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve-wracking, but financially burdensome in the long run. Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of labor standards cases from the arbitration system to the enforcement system is . . to assure the workers the rights and benefits due to him under labor standard laws, without having to go through arbitration. . . so that . . the workers would not litigate to get what legally belongs to him. .. ensuring delivery . . free of charge. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are meant to promote, not defeat, social justice. This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in the Regional Offices " Franklin M. Drilon on September 16, 1987. Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection", provide as follows: Section 2. Complaint inspection. All such complaints shall immediately be forwarded to the Regional Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the desired results, the Regional Director shall summon the parties for summary investigation to expedite the disposition of the case. . . . Section 3. Complaints where no employer-employee relationship actually exists. Where employer-employee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. . . . (Emphasis supplied) Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts not exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars. (b) and (c), Section 7 on "Restitution", the same Rules, thus: xxx xxx xxx (b) Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand (P50,000.00). . . . (c) Restitutions in excess of the aforementioned amount shall be effected at the Regional Office or at the worksite subject to the prior approval of the Regional Director. which indicate the intention to empower the Regional Director to award money claims in excess of P100,000.00; provided of course the employer does not contest the findings made, based on the provisions of Section 8 thereof: Section 8. Compromise agreement. Should the parties arrive at an agreement as to the whole or part of the dispute, said agreement shall be reduced in writing and signed by the parties in the presence of the Regional Director or his duly authorized representative. E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases where an employer-employee relationship still exists. This intention must be given weight and entitled to great respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429: . . The interpretation by officers of laws which are entrusted to their administration is entitled to great respect. We see no reason to detract from this rudimentary rule in administrative law, particularly when later events have proved said interpretation to be in accord with the legislative intent. ..
7

issued by the Secretary of Labor,

The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered in the nature of a curative statute with retrospective application." (Progressive Workers' Union, et al. vs. Hon. F.P. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L- 47629, May 28, 1979, 90 SCRA 331). We now come to the question of whether or not the Regional Director erred in extending the award to all hospital employees. We answer in the affirmative. The Regional Director correctly applied the award with respect to those employees who signed the complaint, as well as those who did not sign the complaint, but were still connected with the hospital at the time the complaint was filed (See Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de Susi, p. 33, Rollo). The justification for the award to this group of employees who were not signatories to the complaint is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable over establishments, not over the individual members/employees, because what is sought to be achieved by its exercise is the observance of, and/or compliance by, such firm/establishment with the labor standards regulations. Necessarily, in case of an award resulting from a violation of labor legislation by such establishment, the entire members/employees should benefit therefrom. As aptly stated by then Minister of Labor Augusto S. Sanchez: . . It would be highly derogatory to the rights of the workers, if after categorically finding the respondent hospital guilty of underpayment of wages and ECOLAs, we limit the award to only those who signed the complaint to the exclusion of the majority of the workers who are similarly situated. Indeed, this would be not only render the enforcement power of the Minister of Labor and Employment nugatory, but would be the pinnacle of injustice considering that it would not only discriminate but also deprive them of legislated benefits. . . . (pp. 38-39, Rollo). This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of Labor Standards cases in the Regional Offices" (supra) presently enforced, viz: SECTION 6. Coverage of complaint inspection. A complaint inspection shall not be limited to the specific allegations or violations raised by the complainants/workers but shall be a thorough inquiry into and verification of the compliance by employer with existing labor standards and shall cover all workers similarly situated. (Emphasis supplied) However, there is no legal justification for the award in favor of those employees who were no longer connected with the hospital at the time the complaint was filed, having resigned therefrom in 1984, viz: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Jean (Joan) Venzon (See Order, p. 33, Rollo) Rosario Paclijan Adela Peralta Mauricio Nagales Consesa Bautista Teresita Agcopra Felix Monleon Teresita Salvador

18. Edgar Cataluna; and 19. 10. Raymond Manija ( p.7, Rollo) The enforcement power of the Regional Director cannot legally be upheld in cases of separated employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said article is in aid of the enforcement power of the Regional Director; hence, not applicable where the employee seeking to be paid underpayment of wages is already separated from the service. His claim is purely a money claim that has to be the subject of arbitration proceedings and therefore within the original and exclusive jurisdiction of the Labor Arbiter. Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it does not clearly and distinctly state the facts and the law on which the award is based. We invite attention to the Minister of Labor's ruling thereon, as follows: Finally, the respondent hospital assails the order under appeal as null and void because it does not clearly and distinctly state the facts and the law on which the awards were based. Contrary to the pretensions of the respondent hospital, we have carefully reviewed the order on appeal and we found that the same contains a brief statement of the (a) facts of the case; (b) issues involved; (c) applicable laws; (d) conclusions and the reasons therefor; (e) specific remedy granted (amount awarded). (p. 40, Rollo)

ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as regards those employees no longer employed at that time. SO ORDERED. Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino and Regalado, JJ., concur. [G.R. No. 144134. November 11, 2003]

MARIVELES SHIPYARD CORP., petitioner, vs. HON. COURT OF APPEALS, LUIS REGONDOLA, MANUELIT GA TALAN, ORESCA AGAPITO, NOEL ALBADBAD, ROGELIO PINTUAN, DANILO CRISOSTOMO, ROMULO MACALINAO, NESTOR FERER, RICKY CUESTA, ROLLY ANDRADA, LARRY ROGOLA, FRANCISCO LENOGON, AUGUSTO QUINTO, ARFE BERAMO, BONIFACIO TRINIDAD, ALFREDO ASCARRAGA, ERNESTO MAGNO, HONORARIO HORTECIO, NELBERT PINEDA, GLEN ESTIPULAR, FRANCISCO COMPUESTO, ISABELITO CORTEZ, MATURAN ROSAURO, SAMSON CANAS, FEBIEN ISIP, JESUS RIPARIP, ALFREDO SIENES, ADOLAR ALBERT, HONESTO CABANILLAS, AMPING CASTILLO and ELWIN REVILLA, respondents. DECISION QUISUMBING, J.: For review on certiorari is the Resolution,[1] dated December 29, 1999, of the Court of Appeals in CA-G.R. SP No. 55416, which dismissed outright the petition for certiorari of Mariveles Shipyard Corp., due to a defective certificate of non-forum shopping and non-submission of the required documents to accompany said petition. Mariveles Shipyard Corp., had filed a special civil action for certiorari with the Court of Appeals to nullify the resolution[2] of the National Labor Relations Commission (NLRC), dated April 22, 1999, in NLRC NCR Case No. 00-09-005440-96-A, which affirmed the Labor Arbiters decision,[3] dated May 22, 1998, holding petitioner jointly and severally liable with Longest Force Investigation and Security Agency, Inc., for the underpayment of wages and overtime pay due to the private respondents. Likewise challenged in the instant petition is the resolution[4] of the Court of Appeals, dated July 12, 2000, denying petitioners motion for reconsideration. The facts, as culled from records, are as follows: Sometime on October 1993, petitioner Mariveles Shipyard Corporation engaged the services of Longest Force Investigation and Security Agency, Inc. (hereinafter, Longest Force) to render security services at its premises. Pursuant to their agreement, Longest Force deployed its security guards, the private respondents herein, at the petitioners shipyard in Mariveles, Bataan. According to petitioner, it religiously complied with the terms of the security contract with Longest Force, promptly paying its bills and the contract rates of the latter. However, it found the services being rendered by the assigned guards unsatisfactory and inadequate, causing it to terminate its contract with Longest Force on April 1995.[5] Longest Force, in turn, terminated the employment of the security guards it had deployed at petitioners shipyard. On September 2, 1996, private respondents filed a case for illegal dismissal, underpayment of wages pursuant to the PNPSOSIA-PADPAO rates, nonpayment of overtime pay, premium pay for holiday and rest day, service incentive leave pay, 13 th month pay and attorneys fees, against both Longest Force and petitioner, before the Labor Arbiter. Docketed as NLRC NCR Case No. 00-09-005440-96-A, the case sought the guards reinstatement with full backwages and without loss of seniority rights. For its part, Longest Force filed a cross-claim[6] against the petitioner. Longest Force admitted that it employed private respondents and assigned them as security guards at the premises of petitioner from October 16, 1993 to April 30, 1995, rendering a 12 hours duty per shift for the said period. It likewise admitted its liability as to the non-payment of the alleged wage differential in the total amount of P2,618,025 but passed on the liability to petitioner alleging that the service fee paid by the latter to it was way below the PNPSOSIA and PADPAO rate, thus, contrary to the mandatory and prohibitive laws because the right to proper compensation and benefits provided under the existing labor laws cannot be waived nor compromised. The petitioner denied any liability on account of the alleged illegal dismissal, stressing that no employer-employee relationship existed between it and the security guards. It further pointed out that it would be the height of injustice to make it liable again for monetary claims which it had already paid. Anent the cross-claim filed by Longest Force against it, petitioner prayed that it be dismissed for lack of merit. Petitioner averred that Longest Force had benefited from the contract, it was now estopped from questioning said agreement on the ground that it had made a bad deal. On May 22, 1998, the Labor Arbiter decided NLRC NCR Case No. 00-09-005440-96-A, to wit: WHEREFORE, conformably with the foregoing, judgment is hereby rendered ordering the respondents as follows: 1. DECLARING respondents Longest Force Investigation & Security Agency, Inc. and Mariveles Shipyard Corporation jointly and severally liable to pay the money claims of complainants representing underpayment of wages and overtime pay in the total amount of P2,700,623.40 based on the PADPAO rates of pay covering the period from October 16, 1993 up to April 29, 1995 broken down as follows: UNDERPAYMENT OF WAGES: PERIOD COVERED MONTHLY PADPAO

ACTUAL RATES (8 hrs. duty) P5,000

UNDERPAYMENT SALARY FOR THE Wage RECEIVED PERIOD P 485.00 5,000 5,810 5,810 1,280.00 1,410.00 P970.00 1,630.00

DIFFERENTIALS

Oct. 16-Dec. 15/93 (2 mos.) Dec. 16/93-Mar. 31/94 (3.5 mos.) Apr. 1-Dec. 31/94 (9 mos.) Jan. 1-Apr.

P5,485.00

6,630.00 7,090.00 7,220.00

5,705.00 11,520.00 5,597.70

29/95 (3.97 mos.) TOTAL UNDERPAYMENTS - - - - - - - - - - - - - - - OVERTIME: Oct. 16-Dec. 15/93 P5,485 x 2 (2 mos.) 2 Dec. 16/93-Mar. 31/94 (3.5 mos.) Apr. 1-Dec. 31/94 (9 mos.) Jan. 1-Apr. 29/95 (3.97 mos.) 6,630 x 3.5 2 7,090 x 9 2 7,220 x 3.97 2 = P 5,485.00 P23,792.70

= 11,602.50

= 31,905.00

= 14,331.70

TOTAL OVERTIME- - - - - - - - - P63,324.20 Sub-Total of Underpayments and Overtime P87,116.90 1. Luis Regondula (the same) P 87,116.90 2. Manolito Catalan (the same) 87,116.90 3. Oresca Agapito (the same) 87,116.90 4. Noel Alibadbad (the same) 87,116.90 5. Rogelio Pintuan (the same) 87,116.90 6. Danilo Crisostomo (the same) 87,116.90 7. Romulo Macalinao (the same) 87,116.90 8. Nestor Ferrer (the same) 87,116.90 9. Ricky Cuesta (the same) 87,116.90 10. Andrada Ricky (the same) 87,116.90 11. Larry Rogola (the same) 87,116.90 12. Francisco Lenogon (the same) 87,116.90 13. Augosto Quinto (the same) 87,116.90 14. Arfe Beramo (the same) 87,116.90 15. Bonifacio Trinidad (the same) 87,116.90 16. Alfredo Azcarraga (the same) 87,116.90 17. Ernesto Magno (the same) 87,116.90 18. Honario Hortecio (the same) 87,116.90 19. Nelbert Pineda (the same) 87,116.90 20. Glen Estipular (the same) 87,116.90 21. Francisco Compuesto (the same) 87,116.90 22. Isabelito Cortes (the same) 87,116.90 23. Maturan Rosauro (the same) 87,116.90 24. Samson Canas (the same) 87,116.90 25. Febien Isip (the same) 87,116.90 26. Jesus Riparip (the same) 87,116.90 27. Alfredo Sienes (the same) 87,116.90 28. Adolar Albert (the same) 87,116.90 29. Cabanillas Honesto (the same) 87,116.90 30. Castillo Amping (the same) 87,116.90 31. Revilla Elwin (the same) 87,116.90 GRAND TOTAL P 2,700,623.90 2. DECLARING both respondents liable to pay complainants attorneys fees equivalent to ten (10%) percent of the total award recovered or the sum of P270,062.34. 3. ORDERING respondent Longest Force Investigation & Security Agency, Inc. to reinstate all the herein complainants to their former or equivalent positions without loss of seniority rights and privileges with full backwages which as computed as of the date of this decision are as follows: Backwages: 10/16 12/15/93 =2 mos. P 5,485.00 x 2 mos. 12/16/93 3/31/94=3.5 mos. P 6,630.00 x 3.5 mos. = 4/1 12/31/94 = 9 mos. P 7,090.00 x 9 mos. 1/1 4/29/95 = 3.97 mos. P 7,220.00 x 3.97 mos. TOTAL

P 10,970.00

23,205.00

63,810.00

28,663.40 P 126,684.40[7]

1. Luis Regondula (same) 2. Manolito Catalan (same) 3. Oresca Agapito (same) 4. Noel Alibadbad (same) 5. Rogelio Pintuan (same) 6. Danilo Crisostomo (same) 7. Romulo Macalinao (same) 8. Nestor Ferrer (same) 9. Ricky Cuesta (same) 10. Andrada Rolly (same) 11. Larry Rogola (same) 12. Francisco Lenogon (same) 13. Augosto Quinto (same) 14. Arfe Beramo (same) 15. Bonifacio Trinidad (same) 16. Alfredo Azcarraga (same) 17. Ernesto Magno (same) 18. Honario Hortecio (same) 19. Nelbert Pineda (same) 20. Glen Estipular (same) 21. Francisco Compuesto (same) 22. Isabelito Cortes (same) 23. Maturan Rosauro (same) 24. Samson Canas (same) 25. Febien Isip (same) 26. Jesus Riparip (same) 27. Alfredo Sienes (same) 28. Adolar Albert (same) 29. Cabanillas Honesto (same) 30. Castillo Amping (same) 31. Revilla Elwin (same) GRAND TOTAL

126,684.40[8] 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 126,684.40 P3,927,216.40[9]

4. ORDERING said Longest Force Investigation & Security Agency, Inc. to pay attorneys fees equivalent to ten (10%) percent of the total award recovered representing backwages in the amount of P392,721.64.[10] 5. DISMISSING all other claims for lack of legal basis. SO ORDERED.[11] Petitioner appealed the foregoing to the NLRC in NLRC NCR Case No. 00-09-005440-96-A. The labor tribunal, however, affirmed in toto the decision of the Labor Arbiter. Petitioner moved for reconsideration, but this was denied by the NLRC. The petitioner then filed a special civil action for certiorari assailing the NLRC judgment for having been rendered with grave abuse of discretion with the Court of Appeals, docketed as CA-G.R. SP No. 55416. The Court of Appeals, however, denied due course to the petition and dismissed it outright for the following reasons: 1. The verification and certification on non-forum shopping is signed not by duly authorized officer of petitioner corporation, but by counsel (Section 1, Rule 65, 1997 Rules of Civil Procedure). 2. The petition is unaccompanied by copies of relevant and pertinent documents, particularly the motion for reconsideration filed before the NLRC (Section 1, Rule 65, 1997 Rules of Civil Procedure).[12] The petitioner then moved for reconsideration of the order of dismissal. The appellate court denied the motion, pointing out that under prevailing case law subsequent compliance with formal requirements for filing a petition as prescribed by the Rules, does not ipso facto warrant a reconsideration. In any event, it found no grave abuse of discretion on the part of the NLRC to grant the writ of certiorari. Hence, this present petition before us. Petitioner submits that THE COURT OF APPEALS GRAVELY ERRED: 1. .IN DISMISSING THE PETITION AND DENYING THE MOTION FOR RECONSIDERATION DESPITE THE FACT THAT PETITIONER SUBSTANTIALLY COMPLIED WITH THE REQUIREMENTS OF SECTION 1, RULE 65, 1997 RULES OF CIVIL PROCEDURE. 2. .IN RULING THAT PETITIONER WAS NOT DENIED DUE PROCESS OF LAW. 3. .IN AFFIRMING THE DECISION OF THE NATIONAL LABOR RELATIONS COMMISSION THAT LONGEST FORCE AND PETITIONER ARE JOINTLY AND SEVERALLY LIABLE FOR PAYMENT OF WAGES AND OVERTIME PAY DESPITE THE CLEAR SHOWING THAT PETITIONER HAVE ALREADY PAID THE SECURITY SERVICES THAT WAS RENDERED BY PRIVATE RESPONDENTS. 4. WHEN IT FAILED TO RULE THAT ONLY LONGEST FORCE SHOULD BE SOLELY AND ULTIMATELY LIABLE IN THE INSTANT CASE.[13] We find the issues for our resolution to be: (1) Was it error for the Court of Appeals to sustain its order of dismissal of petitioners special civil action for certiorari, notwithstanding subsequent compliance with the requirements under the Rules of Court by the petitioner? (2) Did the appellate court err in not holding that petitioner was denied due process of law by the NLRC? and (3) Did the appellate court grievously err in finding petitioner jointly and severally liable with Longest Force for the payment of wage differentials and overtime pay owing to the private respondents? On the first issue, the Court of Appeals in dismissing CA-G.R. SP No. 55416 observed that: (1) the verification and certification of non-forum shopping was not signed by any duly authorized officer of petitioner but merely by petitioners counsel; and (2) the petition was not accompanied by a copy of motion for reconsideration filed before the NLRC, thus violating Section 1,[14] Rule 65 of the Rules of Court. Hence, a dismissal was proper under Section 3,[15] Rule 46 of the Rules. In assailing the appellate courts ruling, the petitioner appeals to our sense of compassion and kind consideration. It submits that the certification signed by its counsel and attached to its petition filed with the Court of Appeals is substantial compliance with the requirement. Moreover, petitioner calls our attention to the fact that when it filed its motion for reconsideration before the Court of Appeals, a joint verification and certification of non-forum shopping duly signed by its Personnel Manager[16] and a copy of the Motion for Reconsideration[17] filed before the NLRC were attached therein. Thus, petitioner prays that we take a

liberal stance to promote the ends of justice. Petitioners plea for liberality, however, cannot be granted by the Court for reasons herein elucidated. It is settled that the requirement in the Rules that the certification of non-forum shopping should be executed and signed by the plaintiff or the principal means that counsel cannot sign said certification unless clothed with special authority to do so.[18] The reason for this is that the plaintiff or principal knows better than anyone else whether a petition has previously been filed involving the same case or substantially the same issues. Hence, a certification signed by counsel alone is defective and constitutes a valid cause for dismissal of the petition.[19] In the case of natural persons, the Rule requires the parties themselves to sign the certificate of non-forum shopping. However, in the case of the corporations, the physical act of signing may be performed, on behalf of the corporate entity, only by specifically authorized individuals for the simple reason that corporations, as artificial persons, cannot personally do the task themselves.[20] In this case, not only was the originally appended certification signed by counsel, but in its motion for reconsideration, still petitioner utterly failed to show that Ms. Rosanna Ignacio, its Personnel Manager who signed the verification and certification of non-forum shopping attached thereto, was duly authorized for this purpose. It cannot be gainsaid that obedience to the requirements of procedural rule is needed if we are to expect fair results therefrom. Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal construction.[21] Thus, on this point, no error could be validly attributed to respondent Court of Appeals. It did not err in dismissing the petition for non-compliance with the requirements governing the certification of non-forum shopping. Anent the second issue, petitioner avers that there was denial of due process of law when the Labor Arbiter failed to have the case tried on the merits. Petitioner adds that the Arbiter did not observe the mandatory language of the then Sec. 5(b) Rule V (now Section 11, per amendment in Resolution No. 01-02, Series of 2002) of the NLRC New Rules of Procedure which provided that: If the Labor Arbiter finds no necessity of further hearing after the parties have submitted their position papers and supporting documents, he shall issue an Order to that effect and shall inform the parties, stating the reasons therefor. [22] Petitioners contention, in our view, lacks sufficient basis. Well settled is the rule that the essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of.[23] Not all cases require a trial-type hearing. The requirement of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims, in the event the Labor Arbiter determines that no formal hearing would be conducted or that such hearing was not necessary.[24] In any event, as found by the NLRC, petitioner was given ample opportunity to present its side in several hearings conducted before the Labor Arbiter and in the position papers and other supporting documents that it had submitted. We find that such opportunity more than satisfies the requirement of due process in labor cases. On the third issue, petitioner argues that it should not be held jointly and severally liable with Longest Force for underpayment of wages and overtime pay because it had been religiously and promptly paying the bills for the security services sent by Longest Force and that these are in accordance with the statutory minimum wage. Also, petitioner contends that it should not be held liable for overtime pay as private respondents failed to present proof that overtime work was actually performed. Lastly, petitioner claims that the Court of Appeals failed to render a decision that finally disposed of the case because it did not specifically rule on the immediate recourse of private respondents, that is, the matter of reimbursement between petitioner and Longest Force in accordance with Eagle Security Agency Inc. v. NLRC,[25] and Philippine Fisheries Development Authority v. NLRC.[26] Petitioners liability is joint and several with that of Longest Force, pursuant to Articles 106, 107 and 109 of the Labor Code which provide as follows: ART. 106. CONTRACTOR OR SUBCONTRACTOR Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. xxx ART. 107. INDIRECT EMPLOYER. The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. ART. 109. SOLIDARY LIABILITY. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. In this case, when petitioner contracted for security services with Longest Force as the security agency that hired private respondents to work as guards for the shipyard corporation, petitioner became an indirect employer of private respondents pursuant to Article 107 abovecited. Following Article 106, when the agency as contractor failed to pay the guards, the corporation as principal becomes jointly and severally liable for the guards wages. This is mandated by the Labor Code to ensure compliance with its provisions, including payment of statutory minimum wage. The security agency is held liable by virtue of its status as direct employer, while the corporation is deemed the indirect employer of the guards for the purpose of paying their wages in the event of failure of the agency to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution.[27] Petitioner cannot evade its liability by claiming that it had religiously paid the compensation of guards as stipulated under the contract with the security agency. Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of their basic needs. Labor laws are considered written in every contract. Stipulations in violation thereof are considered null. Similarly, legislated wage increases are deemed amendments to the contract. Thus, employers cannot hide behind their contracts in order to evade their (or their contractors or subcontractors) liability for noncompliance with the statutory minimum wage.[28] However, we must emphasize that the solidary liability of petitioner with that of Longest Force does not preclude the application of the Civil Code provision on the right of reimbursement from his co-debtor by the one who paid.[29] As held in Del Rosario & Sons Logging Enterprises, Inc. v. NLRC,[30] the joint and several liability imposed on petitioner is without prejudice to a claim for reimbursement by petitioner against the security agency for such amounts as petitioner may have to pay to complainants, the private respondents herein. The security agency may not seek exculpation by claiming that the principals payments to it were inadequate for the guards lawful compensation. As an employer, the security agency is charged with knowledge of labor laws; and the adequacy of the compensation that it demands for contractual services is its principal concern and not any others.[31] On the issue of the propriety of the award of overtime pay despite the alleged lack of proof thereof, suffice it to state that such involves a determination and evaluation of facts which cannot be done in a petition for review. Well established is the rule that in an appeal via certiorari, only questions of law may be reviewed.[32] One final point. Upon review of the award of backwages and attorneys fees, we discovered certain errors that happened in the addition of the amount

of individual backwages that resulted in the erroneous total amount of backwages and attorneys fees. These errors ought to be properly rectified now. Thus, the correct sum of individual backwages should be P126,648.40 instead of P126,684.40, while the correct sum of total backwages awarded and attorneys fees should be P3,926,100.40 and P392,610.04, instead of P3,927,216.40 and P392,721.64, respectively. WHEREFORE, the Resolution of the Court of Appeals in CA-G.R. SP No. 55416 is AFFIRMED with MODIFICATION. Petitioner and Longest Force are held liable jointly and severally for underpayment of wages and overtime pay of the security guards, without prejudice to petitioners right of reimbursement from Longest Force Investigation and Security Agency, Inc. The amounts payable to complaining security guards, herein private respondents, by way of total backwages and attorneys fees are hereby set at P3,926,100.40 and P392,610.04, respectively. Costs against petitioner. SO ORDERED. Bellosillo, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

PHILIPPINE NATIONAL BANK, petitioner, vs. FLORENCE O. CABANSAG, respondent. DECISION PANGANIBAN, J.:

The Court reiterates the basic policy that all Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations. Our labor statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign country. The Case

Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, seeking to reverse and set aside the July 16, 2002 Decision[2] and the January 29, 2003 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 68403. The assailed Decision dismissed the CA Petition (filed by herein petitioner), which had sought to reverse the National Labor Relations Commission (NLRC)s June 29, 2001 Resolution,[4] affirming Labor Arbiter Joel S. Lustrias January 18, 2000 Decision.[5] The assailed CA Resolution denied herein petitioners Motion for Reconsideration. The Facts

The facts are narrated by the Court of Appeals as follows: In late 1998, [herein Respondent Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank, a private banking corporation organized and existing under the laws of the Philippines, with principal offices at the PNB Financial Center, Roxas Boulevard, Manila. At the time, the Singapore PNB Branch was under the helm of Ruben C. Tobias, a lawyer, as General Manager, with the rank of VicePresident of the Bank. At the time, too, the Branch Office had two (2) types of employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad including Singapore, and (b) locally (direct) hired. She applied for employment as Branch Credit Officer, at a total monthly package of $SG4,500.00, effective upon assumption of duties after approval. Ruben C. Tobias found her eminently qualified and wrote on October 26, 1998, a letter to the President of the Bank in Manila, recommending the appointment of Florence O. Cabansag, for the position. xxx xxx xxx

The President of the Bank was impressed with the credentials of Florence O. Cabansag that he approved the recommendation of Ruben C. Tobias. She then filed an Application, with the Ministry of Manpower of the Government of Singapore, for the issuance of an Employment Pass as an employee of the Singapore PNB Branch. Her application was approved for a period of two (2) years. On December 7, 1998, Ruben C. Tobias wrote a letter to Florence O. Cabansag offering her a temporary appointment, as Credit Officer, at a basic salary of Singapore Dollars 4,500.00, a month and, upon her successful completion of her probation to be determined solely, by the Bank, she may be extended at the discretion of the Bank, a permanent appointment and that her temporary appointment was subject to the following terms and conditions: 1. 2. 3. 4. You will be on probation for a period of three (3) consecutive months from the date of your assumption of duty. You will observe the Banks rules and regulations and those that may be adopted from time to time. You will keep in strictest confidence all matters related to transactions between the Bank and its clients. You will devote your full time during business hours in promoting the business and interest of the Bank.

5. You will not, without prior written consent of the Bank, be employed in anyway for any purpose whatsoever outside business hours by any person, firm or company. 6. Termination of your employment with the Bank may be made by either party after notice of one (1) day in writing during probation, one month notice upon confirmation or the equivalent of one (1) days or months salary in lieu of notice. Florence O. Cabansag accepted the position and assumed office. In the meantime, the Philippine Embassy in Singapore processed the employment contract of Florence O. Cabansag and, on March 8, 1999, she was issued by the Philippine Overseas Employment Administration, an Overseas Employment Certificate, certifying that she was a bona fide contract worker for Singapore. xxx xxx xxx

Barely three (3) months in office, Florence O. Cabansag submitted to Ruben C. Tobias, on March 9, 1999, her initial Performance Report. Ruben C. Tobias

was so impressed with the Report that he made a notation and, on said Report: GOOD WORK. However, in the evening of April 14, 1999, while Florence O. Cabansag was in the flat, which she and Cecilia Aquino, the Assistant Vice-President and Deputy General Manager of the Branch and Rosanna Sarmiento, the Chief Dealer of the said Branch, rented, she was told by the two (2) that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job. Florence O. Cabansag was perplexed at the sudden turn of events and the runabout way Ruben C. Tobias procured her resignation from the Bank. The next day, Florence O. Cabansag talked to Ruben C. Tobias and inquired if what Cecilia Aquino and Rosanna Sarmiento had told her was true. Ruben C. Tobias confirmed the veracity of the information, with the explanation that her resignation was imperative as a cost-cutting measure of the Bank. Ruben C. Tobias, likewise, told Florence O. Cabansag that the PNB Singapore Branch will be sold or transformed into a remittance office and that, in either way, Florence O. Cabansag had to resign from her employment. The more Florence O. Cabansag was perplexed. She then asked Ruben C. Tobias that she be furnished with a Formal Advice from the PNB Head Office in Manila. However, Ruben C. Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. On April 16, 1999, Ruben C. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation, with the pretext that he needed a Chinese-speaking Credit Officer to penetrate the local market, with the information that a Chinese-speaking Credit Officer had already been hired and will be reporting for work soon. She was warned that, unless she submitted her letter of resignation, her employment record will be blemished with the notation DISMISSED spread thereon. Without giving any definitive answer, Florence O. Cabansag asked Ruben C. Tobias that she be given sufficient time to look for another job. Ruben C. Tobias told her that she should be out of her employment by May 15, 1999. However, on April 19, 1999, Ruben C. Tobias again summoned Florence O. Cabansag and adamantly ordered her to submit her letter of resignation. She refused. On April 20, 1999, she received a letter from Ruben C. Tobias terminating her employment with the Bank. xxx xxx xxx

On January 18, 2000, the Labor Arbiter rendered judgment in favor of the Complainant and against the Respondents, the decretal portion of which reads as follows: WHEREFORE, considering the foregoing premises, judgment is hereby rendered finding respondents guilty of Illegal dismissal and devoid of due process, and are hereby ordered: 1. To reinstate complainant to her former or substantially equivalent position without loss of seniority rights, benefits and privileges; 2. Solidarily liable to pay complainant as follows: a) To pay complainant her backwages from 16 April 1999 up to her actual reinstatement. Her backwages as of the date of the promulgation of this decision amounted to SGD 40,500.00 or its equivalent in Philippine Currency at the time of payment; Mid-year bonus in the amount of SGD 2,250.00 or its equivalent in Philippine Currency at the time of payment; Allowance for Sunday banking in the amount of SGD 120.00 or its equivalent in Philippine Currency at the time of payment; Monetary equivalent of leave credits earned on Sunday banking in the amount of SGD 1,557.67 or its equivalent in Philippine Currency at the time of payment; Monetary equivalent of unused sick leave benefits in the amount of SGD 1,150.60 or its equivalent in Philippine Currency at the time of payment. Monetary equivalent of unused vacation leave benefits in the amount of SGD 319.85 or its equivalent in Philippine Currency at the time of payment. 13th month pay in the amount of SGD 4,500.00 or its equivalent in Philippine Currency at the time of payment;

b) c) d)

e)

f)

g)

3. Solidarily to pay complainant actual damages in the amount of SGD 1,978.00 or its equivalent in Philippine Currency at the time of payment, and moral damages in the amount of PhP 200,000.00, exemplary damages in the amount of PhP 100,000.00; 4. To pay complainant the amount of SGD 5,039.81 or its equivalent in Philippine Currency at the time of payment, representing attorneys fees. SO ORDERED. [6] [Emphasis in the original.] PNB appealed the labor arbiters Decision to the NLRC. In a Resolution dated June 29, 2001, the Commission affirmed that Decision, but reduced the moral damages to P100,000 and the exemplary damages to P50,000. In a subsequent Resolution, the NLRC denied PNBs Motion for Reconsideration. Ruling of the Court of Appeals

In disposing of the Petition for Certiorari, the CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latters employment Contract with respondent. The appellate court found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by the Philippine Overseas Employment Administration (POEA), which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent. According to the CA, even though respondent secured an employment pass from the Singapore Ministry of Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC over her Complaint for illegal dismissal. In so doing, neither did she submit herself solely to the Ministry of Manpower of Singapores jurisdiction over disputes arising from her employment. The appellate court further noted that a cursory reading of the Ministrys letter will readily show that no such waiver or submission is stated or implied. Finally, the CA held that petitioner had failed to establish a just cause for the dismissal of respondent. The bank had also failed to give her sufficient

notice and an opportunity to be heard and to defend herself. The CA ruled that she was consequently entitled to reinstatement and back wages, computed from the time of her dismissal up to the time of her reinstatement. Hence, this Petition.[7] Issues

Petitioner submits the following issues for our consideration: 1. 2. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy; Whether or not the arbitration of the NLRC in the National Capital Region is the most convenient venue or forum to hear and decide the instant controversy; and Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and exemplary damages and attorneys fees.[8]

3.

In addition, respondent assails, in her Comment,[9] the propriety of Rule 45 as the procedural mode for seeking a review of the CA Decision affirming the NLRC Resolution. Such issue deserves scant consideration. Respondent miscomprehends the Courts discourse in St. Martin Funeral Home v. NLRC,[10] which has indeed affirmed that the proper mode of review of NLRC decisions, resolutions or orders is by a special civil action for certiorari under Rule 65 of the Rules of Court. The Supreme Court and the Court of Appeals have concurrent original jurisdiction over such petitions for certiorari. Thus, in observance of the doctrine on the hierarchy of courts, these petitions should be initially filed with the CA.[11] Rightly, the bank elevated the NLRC Resolution to the CA by way of a Petition for Certiorari. In seeking a review by this Court of the CA Decision -- on questions of jurisdiction, venue and validity of employment termination -- petitioner is likewise correct in invoking Rule 45.[12] It is true, however, that in a petition for review on certiorari, the scope of the Supreme Courts judicial review of decisions of the Court of Appeals is generally confined only to errors of law. It does not extend to questions of fact. This doctrine applies with greater force in labor cases. Factual questions are for the labor tribunals to resolve. [13] In the present case, the labor arbiter and the NLRC have already determined the factual issues. Their findings, which are supported by substantial evidence, were affirmed by the CA. Thus, they are entitled to great respect and are rendered conclusive upon this Court, absent a clear showing of palpable error or arbitrary disregard of evidence.[14] The Courts Ruling

The Petition has no merit. First Issue: Jurisdiction

The jurisdiction of labor arbiters and the NLRC is specified in Article 217 of the Labor Code as follows: ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of employment 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employeremployee relations, including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. xxx More specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. xxx xxx x x x xxx x x x.

Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations,

including termination disputes involving all workers, among whom are overseas Filipino workers (OFW).[15] We are not unmindful of the fact that respondent was directly hired, while on a tourist status in Singapore, by the PNB branch in that city state. Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. Securing the pass was a regulatory requirement pursuant to the immigration regulations of that country.[16] Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of ones national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country. Noteworthy is the fact that respondent likewise applied for and secured an Overseas Employment Certificate from the POEA through the Philippine Embassy in Singapore. The Certificate, issued on March 8, 1999, declared her a bona fide contract worker for Singapore. Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo that she was considered at the start of her employment as a direct hire governed by and subject to the laws, common practices and customs prevailing in Singapore[17] she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. At the time her employment was illegally terminated, she already possessed the POEA employment Certificate. Moreover, petitioner admits that it is a Philippine corporation doing business through a branch office in Singapore.[18] Significantly, respondents employment by the Singapore branch office had to be approved by Benjamin P. Palma Gil,[19] the president of the bank whose principal offices were in Manila. This circumstance militates against petitioners contention that respondent was locally hired; and totally governed by and subject to the laws, common practices and customs of Singapore, not of the Philippines. Instead, with more reason does this fact reinforce the presumption that respondent falls under the legal definition of migrant worker, in this case one deployed in Singapore. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the NLRC and the labor arbiter. In any event, we recall the following policy pronouncement of the Court in Royal Crown Internationale v. NLRC:[20] x x x. Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. For the State assures the basic rights of all workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work [Article 3 of the Labor Code of the Philippines; See also Section 18, Article II and Section 3, Article XIII, 1987 Constitution]. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determination or conventions agreed upon in a foreign country. Second Issue: Proper Venue

Section 1(a) of Rule IV of the NLRC Rules of Procedure reads: Section 1. Venue (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner; Provided, however that cases of Overseas Filipino Worker (OFW) shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent/employer is situated, at the option of the complainant. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from, and report the results of their assignment to their employers. Under the Migrant Workers and Overseas Filipinos Act of 1995 (RA 8042), a migrant worker refers to a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a legal resident; to be used interchangeably with overseas Filipino worker.[21] Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of migrant worker or overseas Filipino worker. As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue. Third Issue: Illegal Dismissal

The appellate court was correct in holding that respondent was already a regular employee at the time of her dismissal, because her three-month probationary period of employment had already ended. This ruling is in accordance with Article 281 of the Labor Code: An employee who is allowed to work after a probationary period shall be considered a regular employee. Indeed, petitioner recognized respondent as such at the time it dismissed her, by giving her one months salary in lieu of a one-month notice, consistent with provision No. 6 of her employment Contract. Notice and Hearing Not Complied With

As a regular employee, respondent was entitled to all rights, benefits and privileges provided under our labor laws. One of her fundamental rights is that she may not be dismissed without due process of law. The twin requirements of notice and hearing constitute the essential elements of procedural due process, and neither of these elements can be eliminated without running afoul of the constitutional guarantee.[22] In dismissing employees, the employer must furnish them two written notices: 1) one to apprise them of the particular acts or omissions for which their dismissal is sought; and 2) the other to inform them of the decision to dismiss them. As to the requirement of a hearing, its essence lies simply in the opportunity to be heard.[23] The evidence in this case is crystal-clear. Respondent was not notified of the specific act or omission for which her dismissal was being sought. Neither was she given any chance to be heard, as required by law. At any rate, even if she were given the opportunity to be heard, she could not have defended herself

effectively, for she knew no cause to answer to. All that petitioner tendered to respondent was a notice of her employment termination effective the very same day, together with the equivalent of a onemonth pay. This Court has already held that nothing in the law gives an employer the option to substitute the required prior notice and opportunity to be heard with the mere payment of 30 days salary.[24] Well-settled is the rule that the employer shall be sanctioned for noncompliance with the requirements of, or for failure to observe, due process that must be observed in dismissing an employee.[25] No Valid Cause for Dismissal

Moreover, Articles 282,[26] 283[27] and 284[28] of the Labor Code provide the valid grounds or causes for an employees dismissal. The employer has the burden of proving that it was done for any of those just or authorized causes. The failure to discharge this burden means that the dismissal was not justified, and that the employee is entitled to reinstatement and back wages.[29] Notably, petitioner has not asserted any of the grounds provided by law as a valid reason for terminating the employment of respondent. It merely insists that her dismissal was validly effected pursuant to the provisions of her employment Contract, which she had voluntarily agreed to be bound to. Truly, the contracting parties may establish such stipulations, clauses, terms and conditions as they want, and their agreement would have the force of law between them. However, petitioner overlooks the qualification that those terms and conditions agreed upon must not be contrary to law, morals, customs, public policy or public order.[30] As explained earlier, the employment Contract between petitioner and respondent is governed by Philippine labor laws. Hence, the stipulations, clauses, and terms and conditions of the Contract must not contravene our labor law provisions. Moreover, a contract of employment is imbued with public interest. The Court has time and time again reminded parties that they are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.[31] Also, while a contract is the law between the parties, the provisions of positive law that regulate such contracts are deemed included and shall limit and govern the relations between the parties.[32] Basic in our jurisprudence is the principle that when there is no showing of any clear, valid, and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal.[33] Awards for Damages Justified

Finally, moral damages are recoverable when the dismissal of an employee is attended by bad faith or constitutes an act oppressive to labor or is done in a manner contrary to morals, good customs or public policy.[34] Awards for moral and exemplary damages would be proper if the employee was harassed and arbitrarily dismissed by the employer.[35] In affirming the awards of moral and exemplary damages, we quote with approval the following ratiocination of the labor arbiter: The records also show that [respondents] dismissal was effected by [petitioners] capricious and high-handed manner, anti-social and oppressive, fraudulent and in bad faith, and contrary to morals, good customs and public policy. Bad faith and fraud are shown in the acts committed by [petitioners] before, during and after [respondents] dismissal in addition to the manner by which she was dismissed. First, [respondent] was pressured to resign for two different and contradictory reasons, namely, cost-cutting and the need for a Chinese[-]speaking credit officer, for which no written advice was given despite complainants request. Such wavering stance or vacillating position indicates bad faith and a dishonest purpose. Second, she was employed on account of her qualifications, experience and readiness for the position of credit officer and pressured to resign a month after she was commended for her good work. Third, the demand for [respondents] instant resignation on 19 April 1999 to give way to her replacement who was allegedly reporting soonest, is whimsical, fraudulent and in bad faith, because on 16 April 1999 she was given a period of [sic] until 15 May 1999 within which to leave. Fourth, the pressures made on her to resign were highly oppressive, anti-social and caused her absolute torture, as [petitioners] disregarded her situation as an overseas worker away from home and family, with no prospect for another job. She was not even provided with a return trip fare. Fifth, the notice of termination is an utter manifestation of bad faith and whim as it totally disregards [respondents] right to security of tenure and due process. Such notice together with the demands for [respondents] resignation contravenes the fundamental guarantee and public policy of the Philippine government on security of tenure. [Respondent] likewise established that as a proximate result of her dismissal and prior demands for resignation, she suffered and continues to suffer mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock and social humiliation. Her standing in the social and business community as well as prospects for employment with other entities have been adversely affected by her dismissal. [Petitioners] are thus liable for moral damages under Article 2217 of the Civil Code. xxx xxx xxx

[Petitioners] likewise acted in a wanton, oppressive or malevolent manner in terminating [respondents] employment and are therefore liable for exemplary damages. This should served [sic] as protection to other employees of [petitioner] company, and by way of example or correction for the public good so that persons similarly minded as [petitioners] would be deterred from committing the same acts.[36] The Court also affirms the award of attorneys fees. It is settled that when an action is instituted for the recovery of wages, or when employees are forced to litigate and consequently incur expenses to protect their rights and interests, the grant of attorneys fees is legally justifiable.[37] WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner. SO ORDERED. Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur. G.R. No. 162233 March 10, 2006

RONALDO B. CASIMIRO, ELISA M. LAT, JOSE L. LALAP, CELESTIN S, LACHICA, REYNALDO S. MALLILLIN, LEONILA G. ROJO, JULIE H. SEBASTIAN, EDITHA M. SOLOMON, EMILIANO T. TAMBAOAN III, FERNANDO G. TROZADO, Petitioners, vs. STERN REAL ESTATE INC. REMBRANDT HOTEL and/or GRACE KRISTIN MEEHAN (General Manager), and ERIC SINGSON (Owner), Respondents.

DECISION CALLEJO, SR., J.: This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing the Decision1 of the Court of Appeals (CA) in CA-G.R. SP. No. 64536, as well as the Resolution2 dated February 16, 2004 denying the motion for reconsideration thereof. Respondent Stern Real Estate & Development Corporation is a corporation duly organized and existing under Philippine laws, engaged in the business of purchasing, selling and operating buildings and other real properties for profit. One such property it owns is the Hotel Rembrandt located at No. 26 Tomas Morato Avenue, corner Scout Bayoran Street, Quezon City, with Grace Kristine Meehan as General Manager, and Eric Singson as its Director. 3 The hotel has been fully operational since 1996. On May 6, 1999, Meehan issued the following Memorandum 4 announcing a Special Separation Program (SSP) for all interested employees: 1. Due to the hotels dire financial status, the hotel has decided to implement/offer a one-time non-recurring special separation program (SSP) that all employees can avail of for the limited period of 10th May to 24th May 1999 only. Management, however, shall have the sole option to approve/disapprove the application of any employee. 2. If the number of employees who apply for the Special Separation Program do not meet the minimum number required by the company, management will be constrained to involuntary terminate the services of employees due to financial losses. Those employees who would be terminated after this program would only receive the legal benefits mandated by law. A. Guidelines 1. Covered Employees - This program is open only to all regular employees of the hotel. - Pioneer employees will be given a special consideration. 2. Separation Pay - The hotel will pay affected employees in accordance with the following benefit schedule per year of service (computed as 12 months) on a pro-rata basis tax exempt. a. Basic: One-half (1/2) month basic salary for [every] year of service or one (1) month salary, whichever is higher. b. Additional: (1) One year of service or less .. P1,000.00 (2) Two years of service ... P3,000.00 (3) Three years of service . P6,000.00 (4) Four years of service P10,000.00 3. Other Entitlements a. Vacation Leaves. Employees with earned vacation leaves whose applications for separation are accepted under this program, shall be allowed to go on terminal leave to use up their leave credits. While they are on leave, they shall be entitled to correspondingly share in the Service Charges. For employees whose applications for separation are accepted but whose services are needed up to their last day of employment, their earned leaves shall be commuted/paid in cash. b. Thirteenth (13th) Month Pay. All employees approved to avail of the SSP will be entitled to a pro-rata payment of the 13th month pay (i.e., from 1st January 31st May 1999) 4. The basis of computation of the separation pay is the monthly basic salary as of Wednesday, 26th May. 5. The release of the special separation package will be around 2 weeks from the submission of the necessary clearances. 6. All applications accepted under this Program shall be effective 31st May 1999. 7. An employee who avails of the Special Separation Program is not entitled to any other benefits by reason of his separation. The employee waives the right to any other benefits normally associated with his/her employment at Hotel Rembrandt. 8. Employees with physical limitations due to recurring illness or advanced age and who can no longer perform their jobs effectively shall be given priority [u]pon the certification of a physician designated by the hotel, if the concerned employees physical infirmities/limitations that [sic] may adversely affect the employees job performance. 9. The hotel reserves the sole right and discretion to decide on the case of an employee. 10. The number of employees to be separated will depend on: a. The ability of the company to fund this one time, non-recurring special separation program. b. The companys explicit approval of each application on a case-to-case basis. 11. This special separation program is a one-time, non-recurring program. It should not set any precedent nor be invoked in the future. 5

On May 24, 1999, the hotel management accepted 49 applications for its SSP. On May 28, 1999, management filed an Establishment Termination Report6 before the Department of Labor and Employment. Said report covered 29 employees whose termination was to take effect on June 28, 1999. "Financial losses" was the main reason cited, and the other being "company reorganization/downsizing." From June 15 to 21, 1999, letters were sent to the employees concerned informing them that they were considered dismissed from employment one month after receipt of such notice. 7 Petitioners were among the retrenched employees.8 They later filed a complaint for "illegal dismissal in the guise of retrenchment and underpayment/nonpayment of overtime pay, premium compensation for holiday and rest day" with prayer for moral and exemplary damages and attorneys fees before the National Labor Relations Commission (NLRC). The complaint was docketed as NLRC NCR Case No. 00-08-08351-99. According to the complainants, while the hotel management claimed that they were retrenched due to "serious financial losses," it failed to satisfy the requirements of the Labor Code in terminating their employment: no notice was given to the Department of Labor of such intended retrenchment and no evidence was submitted to prove that the hotel had been suffering financial losses. Moreover, respondents had not only advertised their need for personnel vacated by complainants;9 they had already started hiring replacements. The complainants were convinced that their retrenchment was only a ploy to ease them out of their respective jobs.10 On March 6, 2000, Labor Arbiter Donato G. Quinto, Jr. ruled in favor of the retrenched employees. According to the Labor Arbiter, a thorough examination of the financial statements submitted by respondents would readily show that the expenses in 1998 were bloated as compared to the previous year, clearly made to justify the retrenchment of the complainants.11 Moreover, the hotel had advertised job vacancies for extra banquet waiters and waitresses, and likewise failed to rebut the charge that the "last in, first out rule" was not observed in dismissing the employees. The Labor Arbiter also declared that while the complainants executed quitclaims and accepted their separation pay, they were not estopped from challenging the validity of their dismissal. The dispositive portion of the decision reads: WHEREFORE, premises above considered, a decision is hereby issued declaring the retrenchment of the complainants devoid of factual and legal basis, hence respondent firm[,] Grace Kristen [sic] Meehan and Eric Singson is [sic] hereby ordered to reinstate complainants to their former or equivalent position with full backwages minus what have been received by them as separation benefits, reckoned from the date of their actual dismissal [or] retrenchment until reinstated actually or in payroll, plus attorneys fees equivalent to ten (10%) percent of the award. For this purpose, the Examination and Computation Unit of this Arbitration branch is hereby directed to make the necessary computation of the complainants backwages which computation is hereby adopted and to form an integral part of this decision as Annex "A." The other claims including damages are hereby dismissed for lack of merit. 12 In compliance with the Labor Arbiters directive, the Examination and Computation Unit of the NLRC issued a computation of complainants entitlement, awarding in their favor a total of P1,988,908.91.13 Respondents appealed the decision to the NLRC, arguing that the Labor Arbiter committed grave abuse of discretion in disregarding the audited financial statements, and choosing to believe the erroneous computation of the complainants without even checking the veracity of their allegations.[14] Aside from the audited financial statements for 1997[15] and 1998,[16] and the Audit Report[17] of Banaria, Banaria and Company, dated April 14, 1999, respondents also attached receipts and vouchers to show that the hotel had really incurred losses. Complainants, for their part, filed their Comments with Motion to Dismiss Appeal,[18] alleging that respondents did not furnish them with a copy of the Memorandum of Appeal and the Motion to Reduce Supersedeas Bond, which violated their right to due process. They also pointed out that the cash deposit of P50,000.00 made by respondents was a "measly amount," and as such, it was as if no appeal bond was paid and no appeal had been perfected. In its Decision19 dated January 15, 2001, the NLRC reversed the ruling of the Labor Arbiter and dismissed the complaints for lack of merit. It held that through the duly-audited financial statements submitted to it, the respondent hotel was able to show that it suffered losses in 1996, 1997 and 1998 amounting to P19,272,539.37, P18,512,683.00 and P13,669,695.00, respectively. The NLRC further ruled that the Labor Arbiter erred in disregarding these statements and giving full credence to complainants contention that the hotels expenses were bloated. It pointed out that respondents presented receipts on appeal to show that the repair and maintenance, light and water expenses, and telephone and communication expenses were not fabricated. Citing The New Valley Times Press v. National Labor Relations Commission,20 it averred that evidence presented on appeal may be considered by it, and pointed out that the complainants did not rebut the evidence despite due notice. The NLRC further ruled that, contrary to the allegation of the complainants, the first-in-last-out policy was observed by respondents, since evidence of the complainants efficiency and performance for the past years were presented to show that this criteria was considered. The labor tribunal pointed out that this evidence was not rebutted by the complainants. It further ruled that complainants failed to show that they were forced to sign quitclaims when they received their respective separation pay. Citing Veloso v. Department of Labor and Employment, 21 it declared that "dire necessity" is not an acceptable reason to set aside quitclaims otherwise valid. Aggrieved, the retrenched employees filed before the CA a Petition for Certiorari under Rule 65 of the Revised Rules of Court. On July 20, 2001, the CA issued a Resolution22 directing petitioners to amend their petition by dropping seven23 of them who failed to sign the verification and certification of non-forum shopping. On October 19, 2001, petitioners Reantaso, Elisa Lat, Lalap, Lachica, Mallillin, Rojo, Sebastian, Solomon, Tambaoan III, Trozado, and Edwin Lat filed their Amended Petition.24 Petitioner Cabardo filed her Amended Petition on November 7, 2001.25 On July 31, 2003, the CA affirmed the ruling of the NLRC and dismissed the petition for lack of merit. 26 On the issue of the filing of the cash bond, it ruled that respondents action constituted substantial compliance with the rules. It stated that the Labor Arbiters decision did not specify the exact amount of the monetary award due the petitioners, prompting respondents to file a P50,000.00 cash bond and motion for the reduction of the supersedeas bond. Once the computation of the monetary award was received on July 14, 2000, they immediately sought the cancellation of the cash bond, and moved that it be substituted with a surety bond equivalent to the monetary award. The CA further ruled that petitioners failed to show that respondents were in bad faith or that they intended to delay payment. It observed that when the Labor Arbiter issued the writ of execution, respondents instructed petitioners to immediately report to the hotel on July 26, 2000. The appellate court also disagreed with petitioners contention that they were deprived of due process when additional documents were submitted before the NLRC. Under the New Rules of Procedure of the NLRC, the submission of new evidence is not prohibited, not being prejudicial to the other party who could still submit counter-evidence. Citing NDC-Guthrie Plantations, Inc. v. National Labor Relations Commission,27 the CA declared that respondents were able to comply with all the requirements for a valid retrenchment under Article 283 of the Labor Code. Aggrieved, petitioners now come to this Court, assailing the ruling of the CA on the following grounds: 5.1. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF

JURISDICTION WHEN IT RULED THAT THE APPEAL OF THE RESPONDENTS WITH THE NATIONAL LABOR RELATIONS COMMISSION WAS PERFECTED DESPITE THE FACT THAT THE APPEAL OR SURETY BOND OF P1,988,908.91 WAS POSTED SEVENTY (70) DAYS LATE FROM RECEIPT OF THE DECISION OF THE LABOR ARBITER. 5.2. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THE PETITIONERS WERE NOT PREJUDICED WHEN THE NLRC ADMITTED THE APPEAL MEMORANDUM AS WELL AS THE ADDITIONAL EVIDENCE OF THE RESPONDENTS EVEN WITHOUT FURNISHING FIRST THE PETITIONERS COPIES THEREOF MORE SPECIFICALLY THE APPEAL MEMORANDUM. 5.3. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THERE WAS A VALID RETRENCHMENT TO WARRANT THE DISMISSAL OF THE PETITIONERS. 5.4. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT RULED THAT THE PETITIONERS EXECUTED A VALID QUITCLAIM. 5.5. THAT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION EQUIVALENT TO LACK OR IN EXCESS OF JURISDICTION WHEN IT ADMITTED AND ENTERTAINED THE COMMENT OF THE RESPONDENTS DESPITE ITS ORDER THAT CONSIDERED SAID RESPONDENTS TO HAVE WAIVED THE RIGHT TO FILE THEIR COMMENT AND SAID ORDER WAS NOT RECONSIDERED AND SET ASIDE THUS LEGALLY STILL IN FULL FORCE AND EFFECT.28 Petitioners insist that a decision in labor cases involving a monetary award may be perfected only upon the posting of a cash or surety bond, as mandated by Republic Act No. 6715, as well as Section 6, Rule VI of the New Rules of Procedure of the NLRC. They aver that the reason behind the rule is to give the workers an assurance that they will be paid in the event that they win the case. They claim that there was no reason why respondents could not afford to deposit the sum of P1,988.908.01. While the late filing of the supersedeas bond has been relaxed in a number of cases, there is no cogent reason to apply a liberal interpretation in the instant case. The word "only" in the provision, according to petitioners, makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond as the exclusive means by which an employers appeal may be perfected. They insist that the appeal bond of P50,000.00 is shockingly low and grossly inadequate, as it constitutes only 2.5% of the monetary award. Petitioners also aver that, contrary to respondents claim in the appellate court, they (respondents) were furnished a copy of the Labor Arbiters decision, as well as the computation of the monetary award. In fact, it was respondents who did not provide them a copy of their Memorandum of Appeal, contrary to Rule IV, Section 3 of the New Rules of Procedure of the NLRC. On this score alone, the appeal before the NLRC should have been dismissed. Petitioners aver that they were prevented from filing the appropriate pleadings on account of such intentional act. They insist that additional evidence on appeal cannot be filed on personal whims and caprices, and that "there are rules to be observed in order that the rights of the other party will not be prejudiced and trampled upon." They conclude that petitioners intentional failure to furnish them a copy of such appeal memorandum deprived them of their right to be heard - ultimately, their right to due process. On the merits of the case, petitioners stress that respondents were not motivated by honest intentions in effecting their dismissal. They remind the Court that while the law recognizes the employers right to protect its interest, such right should be exercised in a manner which does not infringe on the employees constitutional right to security of tenure. They insist that respondents presented "sanitized financial statements" to justify the legality of their retrenchment. They reiterate that they were not furnished copies of said statements, hence, their failure to submit evidence to controvert the same. Under the circumstances, respondents should have presented respondent hotels income tax returns for the preceding years since audited financial statements are not entirely reliable and can be easily fabricated. On the appellate courts finding that the quitclaims they executed were valid, petitioners insist that they were forced to do so since their employer was determined to carry out their dismissal. Since most of them were their respective families sole breadwinners, there was no other recourse but for them to sign such waivers out of dire necessity. Respondents, for their part, allege that no new matter or issue was raised in the instant petition, a mere rehash of petitioners arguments before the appellate court, and that such arguments had already been passed upon by the appellate court. The issues involved in this case are procedural and substantial in nature. On the procedural aspect, petitioners question the filing of the cash bond, which, according to them, was a measly amount as compared to the award of the Labor Arbiter. They likewise question the fact that the CA considered the evidence submitted by respondents on appeal before the NLRC, and they contend that this is a violation of their right to due process. On the other hand, the main and substantial issue to be resolved by the Court is whether petitioners were validly retrenched, and, corollarily, whether respondents presented adequate proof of financial losses, and whether the quitclaims executed by petitioners are valid and binding. At the outset, the Court stresses that the substantial issues for resolution are factual in nature, and generally, factual findings of the NLRC are accorded respect. However, there is compelling reason to deviate from this salutary principle where, as in this case, such findings of facts of the NLRC are in conflict with that of the Labor Arbiter. Accordingly, this Court must of necessity review the records to determine which findings should be preferred as more conformable to the evidentiary facts.29 A careful perusal of the records show that respondents filed their Memorandum of Appeal on May 17, 2000 before the NLRC, together with the P50,000.00 cash bond. They also filed a Motion for Reduction of Supersedeas Bond. Thereafter, respondents new counsel filed a Manifestation with Motion to Substitute (Cash Bond with Supersedeas Bond), alleging that a copy of the monetary award had not been attached to the copy of the Labor Arbiters decision which was furnished them. The NLRC approved the substitution in a Resolution30 dated December 28, 2000. In light of the fact that in his decision, the Labor Arbiter directed the Examination and Computation Unit of the NLRC to compute the backwages of the retrenched employees, it would not have been possible for respondents to obtain a copy of such computation. As such, the initial filing of the P50,000.00 cash bond was justified under the circumstances. The second paragraph of Article 223 of the Labor Code states that when a judgment involving monetary award is appealed by the employer, the appeal may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment. This is to assure the workers that if they finally prevail in the case, the monetary award will be given to them upon dismissal of the employers appeal, and is meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees.31 However, as provided for in Section 6, Rule VI of the New Rules of Procedure of the NLRC, such amount of the bond may be reduced in meritorious cases, upon motion of the appellant. The exercise of this authority is not a matter of right on the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds. 32 Indeed, an unreasonable and excessive amount of bond would be oppressive and unjust, and would have the effect of depriving a party of his right to appeal.33 The Court likewise holds that the NLRC did not err in admitting the receipts and other evidence attached to the Memorandum of Appeal of respondents. In Tanjuan v. Philippine Postal Savings Bank, Inc.,34 where this Court was confronted with the similar question, i.e., whether proof of business losses may be admitted on appeal before the NLRC, we declared that the NLRC is not precluded from receiving evidence on appeal because technical rules of procedure are not binding in labor cases, which rule applies to both employer and employee. 35 Moreover, the fact that evidence was not presented before the Labor Arbiter will

not justify its outright rejection, particularly since such evidence is absolutely necessary to resolve the issue of whether retrenched employees were validly terminated.36 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,37 while Section 10, Rule VII of the New Rules of Procedure of the NLRC provides that technical rules are not binding. 38 Indeed, the application of technical rules of procedure may be relaxed in labor cases to serve the demand of substantial justice. 39 Contrary to petitioners claim, they were not denied due process. The essence of due process in administrative proceedings is simply an opportunity to explain ones side or an opportunity to present evidence in support of ones defense. 40 In this case, petitioners submitted their respective pleadings to controvert the allegations of respondents. Article 28341 of the Labor Code of the Philippines authorizes retrenchment as one of the valid causes to dismiss employees as a measure to avoid or minimize business losses.42 Retrenchment is the "termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation."43 Simply put, it is a reduction in manpower, a measure utilized by an employer to minimize losses incurred in the operation of its business. It is a management prerogative consistently recognized and affirmed by this Court.44 In Danzas Intercontinental, Inc. v. Daguman, 45 we enumerated the requirements for a valid retrenchment which the employer must prove by clear and convincing evidence: x x x (1) that retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) that the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) that the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher; (4) that the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees right to security of tenure; and (5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.46 In this case, respondents presented audited financial statements and receipts to prove that the hotel had been incurring business losses. As found by the appellate court: In the case at bar, the respondent hotel undertook a Special Separation Program (SSP) which all employees can avail of for the limited period of May 10 to 24, 1999, due to the dire financial status it was experiencing. Forty-nine (49) employees were accepted for this separation program. The private respondents then decided that a retrenchment program was further needed in order to stem the losses. The private respondents then informed the DOLE through an Establishment Termination Report filed on May 28, 1999, that they were retrenching twenty-nine (29) employees effective June 28, 1999, among whom included the herein petitioners. The private respondents likewise informed these twenty-nine (29) employees that their services would be terminated thirty (30) days after the receipt of the written notification. After one month from receipt of the letters of termination, the twenty-nine (29) employees were given their separation pay and the corresponding quitclaims were signed. xxxx The private respondents in the instant case presented balance sheets for the years 1997, 1998 and 1999 as audited by independent auditors, which showed that respondent Stern experienced net losses for several years, as follows: 1996 = P19,272,539.77 1997 = P18,512,683.11 1998 = P13,669, 095.80 1999 = P14,626,684.36 Hence, for a period of four (4) years, respondent Stern accumulated losses amounting to around P66,000,000.00, with no sign of abating in the future. The petitioners failed to back up their allegation that the expenses presented in the financial statements were bloated. Nor did the petitioners explain why independent public accountants Clemente Uson & Co. and Banaria, Banaria and Company would knowingly allow false figures to be included in the balance sheets. Consequently, we are more inclined to affirm the finding of the public respondent that the expenses presented by the private respondents were not fabricated.47 Contrary to the allegation of petitioners, income tax returns are self-serving documents because they are generally filled up by the taxpayer himself, and are still to be examined by the Bureau of Internal Revenue for their correctness. 48 The Court notes that petitioners failed to dispute the validity of the financial statements and receipts submitted by respondents, or that any false entries were made therein. They also failed to prove, much less impute, any ill motive on the part of the independent auditors who prepared the financial statements which respondents submitted. The Court also finds that the quitclaims executed by the individual petitioners in this case are valid and binding. Indeed, quitclaims executed by employees are commonly frowned upon as being contrary to public policy, and where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or where the terms of settlement are unconscionable on their faces, the law will step in to annul the questionable transactions. 49 However, when such quitclaim was made voluntarily and there is no evidence that the employer was guilty of fraud or intimidation in obtaining such waiver, as in this case, the validity of the quitclaim must be upheld. As the Court held in Magsalin v. National Organization of Working Men: 50 x x x While quitclaims executed by employees are commonly frowned upon as being contrary to public policy and are ineffective to bar claims for the full measure of their legal rights, there are, however, legitimate waivers that represent a voluntary and reasonable settlement of laborers claims which should be so respected by the Court as the law between the parties. Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. "Dire necessity" is not an acceptable ground for annulling the release, when it is not shown that the employee has been forced to execute it (emphasis supplied).51 Verily, it is neither the function of the law nor its intent to supplant the prerogative of management in running its business, such as, to compel the latter to operate at a continuing loss simply because it has to maintain its workers in employment. Such an act would be tantamount to the taking of property without due process of law.52 CONSIDERING THE FOREGOING, the instant petition is DENIED for lack of merit. The Decision of the Court of Appeals in CA- CA-G.R. SP. No. 64536 is

AFFIRMED. SO ORDERED. G.R. No. 128845

June 1, 2000

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila; and INTERNATIONAL SCHOOL, INC., respondents. KAPUNAN, J.: Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of course, beside the point. The point is that employees should be given equal pay for work of equal value. That is a principle long honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is the principle we uphold today.1wphi1.nt Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. 1 To enable the School to continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School to employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment, except laws that have been or will be enacted for the protection of employees. Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: a. What is one's domicile? b. Where is one's home economy? c. To which country does one owe economic allegiance? d. Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that individual to the Philippines?2 Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire; otherwise, he or she is deemed a foreign-hire. The School grants foreign-hires certain benefits not accorded local-hires.1avvphi1 These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The School explains: A foreign-hire would necessarily have to uproot himself from his home country, leave his family and friends, and take the risk of deviating from a promising career path all for the purpose of pursuing his profession as an educator, but this time in a foreign land. The new foreign hire is faced with economic realities: decent abode for oneself and/or for one's family, effective means of transportation, allowance for the education of one's children, adequate insurance against illness and death, and of course the primary benefit of a basic salary/retirement compensation. Because of a limited tenure, the foreign hire is confronted again with the same economic reality after his term: that he will eventually and inevitably return to his home country where he will have to confront the uncertainty of obtaining suitable employment after along period in a foreign land. The compensation scheme is simply the School's adaptive measure to remain competitive on an international level in terms of attracting competent professionals in the field of international education.3 When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members" 4 of the School, contested the difference in salary rates between foreign and localhires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between the parties. On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this Court. Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities other than Filipino, who have been hired locally and classified as local hires.5 The Acting Secretary of Labor found that these non-Filipino local-hires received the same benefits as the Filipino localhires. The compensation package given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino local hires.6 The Acting secretary upheld the point-of-hire classification for the distinction in salary rates: The Principle "equal pay for equal work" does not find applications in the present case. The international character of the School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the student population. We also take cognizance of the existence of a system of salaries and benefits accorded to foreign hired personnel which system is universally recognized. We

agree that certain amenities have to be provided to these people in order to entice them to render their services in the Philippines and in the process remain competitive in the international market. Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike the local hires who enjoy security of tenure. To apply parity therefore, in wages and other benefits would also require parity in other terms and conditions of employment which include the employment which include the employment contract. A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary and professional compensation wherein the parties agree as follows: All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof provided that the Superintendent of the School has the discretion to recruit and hire expatriate teachers from abroad, under terms and conditions that are consistent with accepted international practice. Appendix C of said CBA further provides: The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary schedule. The 25% differential is reflective of the agreed value of system displacement and contracted status of the OSRS as differentiated from the tenured status of Locally Recruited Staff (LRS). To our mind, these provisions demonstrate the parties' recognition of the difference in the status of two types of employees, hence, the difference in their salaries. The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good compensation package in order to attract them to join the teaching faculty of the School.7 We cannot agree. That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against these evils. The Constitution8 in the Article on Social Justice and Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good faith. International law, which springs from general principles of law,9 likewise proscribes discrimination. General principles of law include principles of equity, 10 i.e., the general principles of fairness and justice, based on the test of what is reasonable. 11 The Universal Declaration of Human Rights, 12 the International Covenant on Economic, Social, and Cultural Rights, 13 the International Convention on the Elimination of All Forms of Racial Discrimination, 14 the Convention against Discrimination in Education, 15 the Convention (No. 111) Concerning Discrimination in Respect of Employment and Occupation 16 all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws. In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible. The Constitution 17 specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical workplace the factory, the office or the field but include as well the manner by which employers treat their employees. The Constitution 18 also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code 19 provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment.
20

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits and penalizes 21 the payment of lesser compensation to a female employee as against a male employee for work of equal value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organization. Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides: The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable conditions of work, which ensure, in particular: a. Remuneration which provides all workers, as a minimum, with: (i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; xxx xxx xxx

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. 22 This rule applies to the School, its "international character" notwithstanding. The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-hires. 23 The Court finds this argument a little cavalier. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and human experience. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which they perform under similar working conditions. The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary rates without violating the principle of equal work for equal pay. "Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at regular intervals for the rendering of services." In Songco v. National Labor Relations Commission, 24 we said that: "salary" means a recompense or consideration made to a person for his pains or industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. (Emphasis supplied.) While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and home leave travel allowances. The Constitution enjoins the State to "protect the rights of workers and promote their welfare," 25 "to afford labor full protection." 26 The State, therefore, has the right and duty to regulate the relations between labor and capital. 27 These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good. 28 Should such contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down these stipulations. In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this Court.1avvphi1 We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 29 The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status. 30 The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. 31 It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective bargaining history in the School also shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective collective bargaining rights. WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold the practice of respondent School of according foreignhires higher salaries than local-hires. SO ORDERED. G.R. No. 159828 April 19, 2006

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA (KASAMMA-CCO)-CFW LOCAL 245, Petitioner, vs. THE HON. COURT OF APPEALS and COCA-COLA BOTTLERS PHILS., INC., Respondents. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure assailing the Decision1 of the Court of Appeals which affirmed the Decision2 of public respondent National Labor Relations Commission (NLRC) dismissing petitioners complaint against private respondent for violations of the Memorandum of Agreement (MOA)/Collective Bargaining Agreement (CBA), nonpayment of overtime pay and 13th month pay, illegal dismissal, unfair labor practice, recovery of moral and exemplary damages and attorneys fees. On 30 June 1998, the CBA for the years 1995-1998 executed between petitioner union and private respondent company expired. As the duly certified collective bargaining agent for the rank-and-file employees of private respondents Manila and Antipolo plants, petitioner submitted its demands to the company for another round of collective bargaining negotiations. However, said negotiations came to a gridlock as the parties failed to reach a mutually acceptable agreement with respect to certain economic and non-economic issues. Thereafter, petitioner filed a notice of strike on 11 November 1998 with the National Conciliation and Mediation Board (NCMB), National Capital Region, on the ground of CBA negotiation deadlock. With the aim of resolving the impasse, several conciliation conferences were conducted but to no avail as the parties failed to reach a settlement. On 19 December 1998, petitioner held the strike in private respondents Manila and Antipolo plants. Subsequently, through the efforts of NCMB Administrator Buenaventura Magsalin, both parties came to an agreement settling the labor dispute. Thus, on 26 December 1998, both parties executed and signed a MOA providing for salary increases and other economic and non-economic benefits. It likewise contained a provision for the regularization of contractual, casual and/or agency workers who have been working with private respondent for more than one year. Said MOA was later incorporated to form part of the 1998-2001 CBA and was thereafter ratified by the employees of the company. Pursuant to the provisions of the MOA, both parties identified 64 vacant regular positions that may be occupied by the existing casual, contractual or agency

employees who have been in the company for more than one year. Fifty-eight (58)3 of those whose names were submitted for regularization passed the screening and were thereafter extended regular employment status, while the other five failed the medical examination and were granted six months within which to secure a clean bill of health. Within the six-month period, three4 of the five employees who have initially failed in the medical examination were declared fit to work and were accorded regular employment status. Consequently, petitioner demanded the payment of salary and other benefits to the newly regularized employees retroactive to 1 December 1998, in accord with the MOA. However, the private respondent refused to yield to said demands contending that the date of effectivity of the regularization of said employees were 1 May 1999 and 1 October 1999. Thus, on 5 November 1999, petitioner filed a complaint before the NLRC for the alleged violations of the subject MOA by the private respondent. Meanwhile, a certification election was conducted on 17 August 1999 pursuant to the order of the Department of Labor and Employment (DOLE) wherein the KASAMMA-CCO Independent surfaced as the winning union and was then certified by the DOLE as the sole and exclusive bargaining agent of the rank-and-file employees of private respondents Manila and Antipolo plants for a period of five years from 1 July 1999 to 30 June 2004. On 23 August 1999, the KASAMMACCO Independent demanded the renegotiation of the CBA which expired on 30 June 1998. Such request was denied by private respondent on the contention that there was no basis for said demand as there was already an existing CBA which was negotiated and concluded between petitioner and private respondent, thus, it was untimely to reopen the said CBA which was yet to expire on 30 June 2001. On 9 December 1999, despite the pendency of petitioners complaint before the NLRC, private respondent closed its Manila and Antipolo plants resulting in the termination of employment of 646 employees. On the same day, about 500 workers were given a notice of termination effective 1 March 2000 on the ground of redundancy. The affected employees were considered on paid leave from 9 December 1999 to 29 February 2000 and were paid their corresponding salaries. On 13 December 1999, four days after its closure of the Manila and Antipolo plants, private respondent served a notice of closure to the DOLE. As a result of said closure, on 21 December 1999, petitioner amended its complaint filed before the NLRC to include "union busting, illegal dismissal/illegal layoff, underpayment of salaries, overtime, premium pay for holiday, rest day, holiday pay, vacation/sick leaves, 13th month pay, moral and exemplary damages and attorneys fees." On 14 January 2000, KASAMMA-CCO Independent filed a notice of strike due to unfair labor practice with the NCMB-NCR. Failing to arrive at an amicable settlement of the labor dispute with the private respondent, KASAMMA-CCO Independent held a strike from 9 March 2000 to 4 May 2000. On 4 May 2000, the Secretary of Labor issued an order assuming jurisdiction over the labor dispute subject of the strike and certified the case to the NLRC for compulsory arbitration. On 9 July 2001, the NLRC rendered its Decision dismissing the complaint for lack of merit. According to the Commission: Evaluating, with utmost caution, both parties contrasting factual version, supporting proofs, related legal excerpts and applicable jurisprudential citations, we discern that, under the Memorandum of Agreement (MOA) dated December 26, 1998, the 61 regularized employees are not entitled to their claims for the P60.00 per day salary increase, mid-year gratuity pay of P5,000.00, one sack of rice, and overtime and thirteenth month differentials effective December 1, 1998 onward. Initially, under the MOA, only the employees who were regular on July 1998 and continued being such upon the signing of the MOA on December 26, 1998 deserve retroactive payment of the MOA benefits amounting to a lump sum of P35,000.00. This entitlement springs from the following pertinent provisions of the MOA: "All covered employees who were regular as of July 1, 1998 and upon the signing of this Agreement shall each be entitled to a lump sum in the amount of THIRTY FIVE THOUSAND PESOS (P35,000.00) which shall, subject to the ratification of the employees within the bargaining unit, be released on or before 31 December 1998. "The aforesaid amount shall be in lieu of the wage increase as well as THE Operation Performances Incentive DESCRIBED UNDER Item 11(B) hereof, all premium pay, the 13th month and 14th month pay differentials, sick leave and vacation leave credits for the period July 1, 1998 to December 31, 1999." Underscoring supplied) In the case at bar, since the 61 regularized employees were regularized only on May 1, 1999 and October 1, 1999, as the case may be, they therefore have no right whatsoever to claim entitlement to the MOA benefits. Moreover, CFW Local 245s insistence that the 61 regularized employees became regular on December 1, 1998 is non sequitor. It merely flows from its specious interpretation of the MOA provisions. The MOA does not provide that non-regular employees who would be deployed to fill up vacant plantilla positions covered by the 1998 and 1999 manpower budget of CCBPC should be automatically considered regular effective December 1, 1998. What the MOA stipulates are that: 1) effective December 1, 1998, non-regular employees who have been occupying the position to be filled up for at least one year shall be given priority in filling up the positions; and 2) that in that case, they will not undergo the companys regular recruitment procedures, like interviews and qualifying examinations. The only importance of the date of December 1, 1998 is its being the reckoning date from which the one year employment requirement should be computed. Consequently, under the MOA, only the non-regular employees who had worked with the company for at least a year counted retroactively from December 1, 1998 should be given priority in the filling up of vacant plantilla positions. Anyway, even assuming ex gratia argumenti that the 61 regularized employees were regularized effective December 1, 1998, they, still, are not entitled to the MOA benefits. As discussed above, only employees who were regular on July 1, 1998 and were still so until the signing of the MOA on December 26, 1998 could be covered by the retroactivity clause. Furthermore, entitling the 61 regularized employees to the MOA benefits would certainly infringe the well-entrenched principle of "no-work-no-pay". Since such employees started becoming regular only on May 1, 1999 and October 1, 1999, as the case may be, it would thus be most unfair to require CCBPI to pay them for their unworked period, for they would certainly, be unjustly enriched at the expense of CCBPI. We also hold that the allegedly redundant six hundred thirty-nine (639) employees were not illegally dismissed. Initially, there was just cause for the employees dismissal. It bears to stress that, aimed at 1) attaining efficiency and cost effectiveness, 2) maximizing its production capacity and 3) ensuring that its customers obtain products manufactured only under the most stringent quality standards of CCBPIs modern, technologically advanced production plants, CCBPI conducted an extensive study on the operational mechanics of its Manila and Antipolo plants.

From this study, it was established that there was inadequate water supply at CCBPIs Manila and Antipolo plants. As a consequence, the company was constrained to transport water from several sources to its production line in Manila in 1998 and 1999. Worse, it was discovered that the quality of water supply was fast deteriorating due to the rise of its salt level. This reality prompted the company to reduce its production capacity. Moreover, the bottling process of treating this water of decadent quality resulted in higher production costs. Under these twin conditions, the company could not thus efficiently continue on with its operations. The study also reveals the decadent state of the production equipment of CCBPIs Manila and Antipolo Plants. Their production lines were among the oldest and hence, had very low line efficiency. In comparison with the line efficiency of 71.18% of the companys other plants, the Manila and Antipolo Plants had only efficiency ratings of 61.09% and 58.39%, respectively. Whereas the other production lines had an average wastage rating of 1.01%, the twin plants had a higher average wastage ratings of 2.05% and 1.77%, respectively. The companys production studies in 1998 and 1999 likewise reveal substantial issues on Good Manufacturing Practice (GMP) and process control for such plants. From this study, the impracticability of rehabilitating the twin plants was also found out. Although the problems cited may be remedied by way of a major reconstruction, this would, however, entail an investment of huge capital. Further, the congestion of the twin plants sites would render impracticable such a major reconstruction. Besides, there was utter lack of effective solution to the retrograding water supply. The foregoing significant facts are substantially evidenced by the Technical Evaluation of Production Requirements, Annex "20", CCBPIs Rejoinder; Affidavit of its Operations Manager dated 3 March 2000, Annex "1", its Position Paper dated 20 July 2000; and Certification dated May 21, 2001 of Mr. Bruce A. Herbert, its Sur-Rejoinder. To solve the problems cited, however, CCBPI, as soundly recommended by the study, integrated the production capacities of the different CCBPI modern and technologically advanced production facilities. This imperative integration indispensably prompted CCBPI to close, its production lines at the Manila and Antipolo Plants. This measure taken by CCBPI indeed draws jurisprudential justification from the following sound pronouncement of the Supreme Court: "Business enterprises today are faced with the pressures of economic recession, stiff competition and labor unrest. Thus, businessmen are always pressured to adopt certain changes and programs in order to enhance their profits and protect their investments. Such changes may take various forms. Management may even choose to close a branch, department, a plant, or a shop." (Philippine Engineering Corp. vs. CR, 41 SCRA 89) Urgently propelled by this closure, CCBPI inevitably redundated the services of 639 employees based at the Manila and Antipolo Plants. The fact that their services became superfluous or in excess of what were reasonably demanded by the actual requirements of the company as a consequence of the closure certainly shows the undertone of good faith on CCBPIs part in resorting to the redundation measure. Well in support of this urgent economic measure taken is the following postulation of the Supreme Court in the case of Wiltshire File Co., Inc. vs. NLRC, et al., 193 SCRA 665: "We believe that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is a superfluity, and superfluity of a position or positions may be the outcome of a number of facets, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprises. The employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business. "x x x. "x x x The characterization of (the employees) service as no longer necessary or sustainable, and therefore properly terminable, was an exercise of business judgment on the part of (the employer). The wisdom or soundness of such characterizing or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. X x x The determination of the continuing necessity of a particular officer or position in a business corporation is managements prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown." Another reason why the dismissal of the 639 employees was legal is that the same was attended by the observance of the requirements of due process. Indeed, as early as 9 December 1999, more than thirty (30) days prior to their actual dismissal on 1 March 2000, CCBPI served on the affected employees a written notice informing them of the closure of the two plants and subsequent redundation. Later, by 13 December 1999, CCBPI filed with the DOLE the required written notice informing it of the subject closure and consequent redundation. This finding is perfectly in line with the following applicable legal excerpts: "ART. 283. Closure of establishment and reduction of personnel. ---The employer may also terminate the employment of any employee due to .redundancy. or the closing or cessation of operation of the establishment or undertaking by serving a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof."lawphil.net "For termination of employment based on just causes defined in Article 282 of the Labor Code: (i) A written notice served [on] the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side; (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (iii) a written notice of termination served on the employee, indicating that upon, due consideration of all the circumstances, grounds have been established to justify his termination. "For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon the service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before [effectivity] of the termination, specifically the ground or grounds for termination." (Par. D, Section 2, Rule 1, Book VI, Omnibus Rules Implementing the Labor Code) Needless to state, having been lawfully redundated, as comprehensively discussed above, the affected employees are entitled to payment of separation pay

equivalent to one (1) month pay for every year of service, pursuant to Article 283 of the Labor Code which provides: "In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to 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." However, due to the economic adversity besetting our workers today brought about by the ever increasing standards of living, CCBPI realized that such a legal package was no longer conformable with such on obtaining economic reality. Accordingly, CCBPI granted the affected employees separation package much bigger than that legal separation package. Specifically, CCBPI paid affected employees with less than fifteen (15) years of service 150% monthly salary for every year of service and those with fifteen (15) years and above of service 195%. xxxx We, moreover, view that CCBPI is not guilty of unfair labor practice. Contrary to KASAMMA-CCO-Independents contention, CCBPI did not resort to the closure of Manila and Antipolo plants and resultant redundation of their 637 employees just to prevent the renegotiation of the CBA entered into between CCBPI and CFW Local 245. First, there is no substantial evidence on record supporting this claim. Secondly, as exhaustively explained supra, CCBPIs decision to undertake the subject closure and subsequent redundation was due to legitimate business considerations, namely 1) the production lines at the two plants had very low line efficiency; 2) the quality of water supply at such plants was rapidly deteriorating; and 3) the rehabilitation of such plants was not feasible due to the huge capital investment required as well as the congestion of their areas. xxxx WHEREFORE, premises considered, KASAMMA-CCO Independent, and CFW Local 245s charges in the instant labor dispute for non-grant of the CBA salary increase, mid-year gratuity, one sack of rice, overtime pay and thirteenth (13th) month pay; illegal dismissal; unfair labor practice; and recovery of moral and exemplary damages and attorneys fees are hereby DISMISSED for lack of merit. Petitioner Coca-Cola Bottlers Phils., Inc., however, is directed to grant the separation package adverted above to the affected employees who have not yet received the same. Further, the company is ordered to accord the affected employees priority in rehiring in the event the company needs, in the future, additional personnel.5 Petitioners motion for reconsideration was denied in a resolution dated 24 September 2001, thus on 22 November 2001 petitioner filed a petition for certiorari before the Court of Appeals, which was disposed by the appellate court in this wise: After painstaking efforts and a careful examination of the records, we rule against the contention of the petitioner. The conflicting factual submissions of the parties in the case at bar cannot close our eyes to the fact that the instant case pose upon an obligation on this Court to review and re-examine the factual findings and to re-evaluate the pieces of evidence which supported the conclusion of the public respondent in its disposition of the present controversy. This issue has already been settled in Deles, Jr. vs. NLRC [327 SCRA 540 (2000)], where the Supreme Court ruled: "On its face, petitioners contention would require the Court to delve into the findings of fact a quo. This we cannot do. In the review of NLRC decisions through a special civil action for certiorari, we are confined only to issues of want of jurisdiction and grave abuse of discretion on the part of the labor tribunal. We are precluded from inquiring unto the correctness of the evaluation of that evidence that underpins the labor tribunals conclusion on matters of fact. Nor could we examine the evidence, re-evaluate the credibility of the witnesses, nor substitute our findings of fact for those of an administrative body which has the authority and expertise in its specialized field. Arguably, there may even be an error in judgment. This however is not within the ambit of the extraordinary remedy of certiorari." Moreover, the pronouncement of the High Tribunal in Dela Salle University v. Dela Salle University Employees Association [330 SCRA 363 (2000)], citing established jurisprudence, has clarified the guidelines in the resolution of petitions for certiorari involving labor cases in this wise: "As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, the following are the well-settled rules in a petition for certiorari involving labor cases. First, the factual findings of quasi-judicial agencies (such as the DOLE), when supported by substantial evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their respective fields. It is well established that findings of these administrative agencies are generally accorded not only respect but even finality. Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a conclusion. Third, in Flores vs. NLRC, we explained the role and function of Rule 65 as an extraordinary remedy. It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRCs evaluation of the evidence and the factual findings based thereon, which are generally accorded not only great respect but even finality." In the light of the rulings established under the abovecited cases, we find no ground for disturbing the factual findings of the public respondent vis--vis its resolution with regard to the issue of the validity of the claims of the newly-regularized members of the petitioner union, as the same is supported by substantial evidence and in accord with established jurisprudence herein cited. It must be stressed that factual findings of labor officials are conclusive and binding on the Supreme Court when supported by substantial evidence. Anent the issue of the closure of the Manila and Antipolo plants of the private respondent which resulted in the termination from employment of 639 or 646 employees working under the said facilities, we find the same in order and in accord with law. xxxx

It must be noted that in sustaining the contention of the private respondent on the said issue, the public respondent has relied on the grounds asserted by the private respondent as basis in effecting the closure and the resultant cessation of business operations in the aforesaid plants. The recent accretion to the corpus of our jurisprudence is the principle enunciated in National Federation of Labor vs. NLRC [327 SCRA 158 (2000)] which holds the view that: The closure of establishment contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on the part of the employer to close the business establishment as may be gleaned from the use of the word "may" it does not contemplate a situation where the closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. Although the Constitution provides for protection to labor, capital and management must also be protected under a regime of justice and the rule of law. Hence, the claim of the petitioner that the technical evaluation of the private respondent which served as basis for the closure of the said facilities must be presented to the petitioner union first before the private respondent can implement the said action is bereft of legal basis. The same fate must suffer with respect to the claim of the petitioner that a prior consultation is a condition sine qua non as required under the Labor Code vis--vis the provision on the participation of the employees in the decision-making processes of the employer private respondent, before the latter can effectuate the said closure, is devoid of legal and jurisprudential basis. As aptly stated by an authority in labor laws [Cesario A. Azucena, Jr., Everyones Labor Code, 2001 Edition, p. 302], the author opined that even if the business is not losing but its owner, for reasons of his own, wants to stop doing business, he can lawfully do so anytime provided he is in good faith. He further lamented in saying that "just as no law forces anyone to go into business, no law compels anybody to stay in business." Moreover, the private respondent has complied with the aforesaid requirements of the law when it decided to close the said establishments. The records disclose that the alleged redundant, or more appropriately, separated employees affected by the said closure were in fact individually served with a notice of termination. All of the subject employees were offered and given a separation package by the private respondent more than what is provided by the law and more than what is stipulated under their CBA, although, some refused to accept the said benefits, and insisted on their being reinstated. We take note that as of the present, 546 of the 639 terminated or separated employee-members of the petitioner union were ale to receive the said separation benefits. Moreover, the receipt of the said separation benefits was admitted by the petitioner. The Department of Labor and Employment (DOLE) was also notified of such closure through a letter sent by the private respondent dated December 10, 1999. The petitioner claims that the private respondent failed to comply with the one-month notice requirement as required under the said legal provision since the subject employees were no longer allowed to report for work effective immediately upon receipt of their termination notice. However, they were still paid their salaries effective from December 9, 1999 until February 29, 2000, although they did not anymore render service for the period. Significantly, this peculiar fact which petitioner claims as an indirect circumvention of the said law has already been addressed, albeit by analogy, in the recent case of Serrano v. NLRC [331 SCRA 341 (2000)]. In the said case, the Supreme Court held: In that case (Associate Labor Unions-VIMCONTU vs. NLRC [204 SCRA 913]), the employees and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees services would cease on august 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It was held that such written notice was "more than substantial compliance with the notice requirement of the Labor Code." Indeed, there was more than substantial compliance with the law in that case because, in addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from September 1 to 5, 1993, even if they rendered no service for the period.1avvphil.net Had private respondent given a written notice to the petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment would cease although from October 1 he would no longer be required to work, there would be basis for private respondents boast that [p]ayment of this salary even [if he is] no longer working is effective notice and is much better than 30 days formal notice but working until the end of the 30 days period." This is not the case here, however. What happened here was that on October 11, 1991, petitioner was given a memorandum terminating his employment effective on the same day on the ground of retrenchment (actually redundancy). xxx WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The assailed decision dated July 9, 2001 and the Order dated September 24, 2001 issued by public respondent National Labor Relations Commission (NLRC) are hereby AFFIRMED. No costs. 6 Petitioners motion for reconsideration was denied in a resolution dated 5 September 2003. Hence, the instant petition. Petitioner presents before this Court two issues for resolution, namely: 1) whether or not private respondent violated the terms and conditions contained in the MOA dated 26 December 1998 when it did not recognize the regularization of the 61 employees as effective on 1 December 1998; and 2) whether or not the closure of private respondents Manila and Antipolo plants, resulting in the termination of employment of 646 employees, was legal. In dismissing the petition before it, the Court of Appeals opined that the resolution of the validity of the claims of the newly regularized employees would entail a review and re-examination of the factual findings and the re-evaluation of the pieces of evidence which supported the conclusion of the NLRC in the latters disposition of the instant controversy. We do not agree with the Court of Appeals. The said issue is not a question of fact which will necessitate the appellate court to again examine the evidence. It is, rather, a question of law. There is a question of law when the issue does not call for an examination of the probative value of evidence presented, the truth or falsehood of facts being admitted and the doubt concerns the correct application of law and jurisprudence on the matter.7 On the other hand, there is a question of fact when the doubt or controversy arises as to the truth or falsity of the alleged facts. When there is no dispute as to fact, the question of whether or not the conclusion drawn therefrom is correct is a question of law.8 What is necessary in determining whether the private respondent violated the provisions of the MOA with respect to the date of regularization of the 61 employees is an interpretation of the pertinent provision of the MOA as agreed upon by the parties. It must be noted that both parties admit the existence of said MOA and that they have voluntarily entered into said agreement. Furthermore, neither of the parties deny that the 61 employees have indeed been regularized by private respondent. Clearly, as the facts are admitted by the parties, the appellate court does not have to inquire into the veracity of any fact in order to establish the rights of the parties. All that the Court of Appeals must do is to interpret the provisions of the MOA and resolve whether said regularization must be made retroactive to 1 December 1998, which according to petitioner is provided for under the said MOA. The MOA, being a contract freely entered into by the parties, now constitute as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein. Thus, the issue being a question of law, this Court will now endeavor to resolve such matter. According to the pertinent provision of the MOA: 1. Non-economic issues A. Filling-up of vacant regular plantilla positions; regularization

The company shall fill-up all vacant plantilla positions covered by the 1998 manpower budget as already identified by the Task Force created by the parties for the purpose following the following procedures: 1. Non-regular employee (casual, contractual or agency worker) who has already served the company and is presently occupying or has occupied the position to be filled-up for at least one (1) year shall be given priority in filling-up the position by converting his non-regular employment status to regular employment status, effective 01 December 1998 without need of undergoing through the companys regular recruitment procedures such as interview and qualifying examination. x x x9 It is the contention of petitioner that the date 1 December 1998 refers to the effective date of regularization of said employees, while private respondent maintains that said date is merely the reckoning date from which the one year employment requirement shall be computed. We agree with petitioner. It is erroneous for the NLRC to conclude that the regularization of the 61 employees does not retroact to 1 December 1998. A fastidious reading of the above quoted provision will clearly point to the conclusion that what is pertained to by the phrase "effective December 1, 1998" is the phrase immediately preceding it which is "converting his non-regular employment status to regular employment status." It will be defying logic to adopt private respondents contention that the phrase "effective December 1, 1998" designates the period when the non-regular employees will be given priority in filling-up the positions, simply because the MOA was signed only on 26 December 1998. Therefore, it is logically absurd that the company will only begin to extend priority to these employees on a date that has already passed, when in fact they have already extended priority to these employees by agreeing to the contents of the MOA and signing said agreement. Consequently, we hold that the effectivity date of the regularization of the 61 employees was 1 December 1998. We, too, cannot agree with the NLRCs rationale that entitling the 61 regularized employees to the MOA benefits would certainly infringe the well-entrenched principle of "no-work-no-pay," since they only became regular, according to private respondent, on 1 May 1999 and 1 October 1999. As stated in the MOA, only those who have worked with the company for one year as of 1 December 1998 and are still working for the company as of the signing of the MOA, will be considered for regularization. Evidently, it is erroneous for the NLRC to conclude that extending to them the benefits of the MOA would violate the principle of "no-work-no-pay" as they are actually rendering service to the company even before 1 December 1998, and continued to do so thereafter. Truly, they were accorded the status of regular employees precisely because they were rendering service to the company for the required period. Moreover, at this point it must be stressed that under Article 280 of the Labor Code, 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. Also, under the law, a casual employee is only casual for one year, and it is the passage of time that gives him a regular status. Hence, even without the subject MOA provision, the 61 employees must be extended regular employment status after the lapse of one year. Even if we were to follow private respondents contention that the date 1 December 1998 provided in the MOA is merely a reckoning date to determine who among the non-regular employees have rendered one year of service as of said date, all those who have been with the company for one year by said date must automatically be considered regular employees by operation of law. Therefore, contrary to the interpretation of the NLRC, private respondent violated the provision of the MOA when it did not consider the regularization of the 61 employees effective 1 December 1998, and accorded to them the full benefits of the MOA. Relative to the issue of whether the closure of private respondents Manila and Antipolo plants was legal, we agree in the conclusions of the NLRC and the Court of Appeals that the closure of said plants is for an authorized cause. As correctly pointed out by the NLRC, the Court has already resolved that the characterization of the employees service as no longer necessary or sustainable, and therefore properly terminable, is an exercise of business judgment on the part of the employer. 10 The wisdom or soundness of such characterizing or decision is not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown.11 The determination of the continuing necessity of a particular officer or position in a business corporation is managements prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown.12 In the case at bar, the closure of the Manila and Antipolo plants and the resulting termination of the employment of 646 employees is not tainted with bad faith. As found by the NLRC, the private respondents decision to close the plant was a result of a study conducted which established that the most prudent course of action for the private respondent was to stop operations in said plants and transfer production to other more modern and technologically advanced plants of private respondent. Other than its mere allegations, petitioner union failed to show that the closure of the two plants was without factual basis and done in utter bad faith. No evidence was presented by petitioner to prove its assertion that private respondent resorted to the closure of the Manila and Antipolo plants to prevent the renegotiations of the CBA entered into between the parties. As adequately explained by the NLRC, the subject closure and the resulting termination of the 639 employees was due to legitimate business considerations, as evidenced by the technical study conducted by private respondent. Anent the allegation that private respondent failed to comply with the notice requirements as provided by the Labor Code in the cessation of its operations, we have already settled this matter in a similar case which was accordingly cited by the appellate court. In the case of Serrano v. National Labor Relations Commission,13 we held that: In that case [Associate Labor Unions-VIMCONTU v. NLRC (204 SCRA 913)], the employees and the then Ministry of Labor and Employment (MOLE) were notified in writing on August 5, 1983 that the employees services would cease on August 31, 1983 but that they would be paid their salaries and other benefits until September 5, 1983. It was held that such written notice was "more than substantial compliance" with the notice requirement of the Labor Code. Indeed, there was "more than substantial compliance" with the law in that case because, in addition to the advance written notice required under Art. 284 (now Art. 283) of the Labor Code, the employees were paid for five days, from September 1 to 5, 1993, even if they rendered no service for the period. x x x Had private respondent given a written notice to the petitioner on October 1, 1991, at the latest, that effective October 31, 1991 his employment would cease although from October 1 he would no longer be required to work, there would be basis for private respondents boast that [p]ayment of this salary even [if he is] no longer working is effective notice and is much better than 30 days formal notice but working until the end of the 30 days period." This is not the case here, however. What happened here was that on October 11, 1991, petitioner was given a memorandum terminating his employment effective on the same day on the ground of retrenchment (actually redundancy).14 In the instant case, the employees were served notice on 9 December 1999 that their employment were being severed effective 1 March 2000; however they were no longer required to report for work but they will continue to receive their salary up to 29 February 2000. Therefore, as enunciated in the ruling in Serrano v. NLRC, said act of private respondent constitutes substantial compliance with the notice requirement of the Labor Code. WHEREFORE, premises considered, the assailed Decisions of the Court of Appeals in CA-G.R. SP No. 67775 and of the National Labor Relations Commission in NLRC Case No. 30-11-00466-99 and NLRC CC No. 000182-00 are hereby AFFIRMED with MODIFICATION. The 61 subject employees are hereby declared regular employees as of 1 December 1998 and are entitled to the CBA salary increase, mid-year gratuity pay, one sack of rice, overtime pay and thirteenth (13th) month pay as provided for in the Memorandum of Agreement. No costs. SO ORDERED. [G.R. No. 146650. January 13, 2003]

DOLE PHILIPPINES, INC., petitioner, vs. PAWIS NG MAKABAYANG OBRERO (PAMAO-NFL), respondent. DECISION CORONA, J.:

Before us is a petition for review filed under Rule 45 of the 1997 Rules of Civil Procedure, assailing the January 9, 2001 resolution of the Court of Appeals which denied petitioners motion for reconsideration of its September 22, 2000 decision[1] which in turn upheld the Order issued by the voluntary arbitrator[2] dated 12 October 1998, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of the complainant. Respondent is hereby directed to extend the free meal benefit as provided for in Article XVIII, Section 3 of the collective bargaining agreement to those employees who have actually performed overtime works even for exactly three (3) hours only. SO ORDERED. [3] The core of the present controversy is the interpretation of the provision for free meals under Section 3 of Article XVIII of the 1996-2001 Collective Bargaining Agreement (CBA) between petitioner Dole Philippines, Inc. and private respondent labor union PAMAO-NFL. Simply put, how many hours of overtime work must a Dole employee render to be entitled to the free meal under Section 3 of Article XVIII of the 1996-2001 CBA? Is it when he has rendered (a) exactly, or no less than, three hours of actual overtime work or (b) more than three hours of actual overtime work? The antecedents are as follows: On February 22, 1996, a new five-year Collective Bargaining Agreement for the period starting February 1996 up to February 2001, was executed by petitioner Dole Philippines, Inc., and private respondent Pawis Ng Makabayang Obrero-NFL (PAMAO-NFL). Among the provisions of the new CBA is the disputed section on meal allowance under Section 3 of Article XVIII on Bonuses and Allowances, which reads: Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of TEN PESOS (P10.00) to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of actual overtime work.[4] Pursuant to the above provision of the CBA, some departments of Dole reverted to the previous practice of granting free meals after exactly three hours of actual overtime work. However, other departments continued the practice of granting free meals only after more than three hours of overtime work. Thus, private respondent filed a complaint before the National Conciliation and Mediation Board alleging that petitioner Dole refused to comply with the provisions of the 1996-2001 CBA because it granted free meals only to those who rendered overtime work for more than three hours and not to those who rendered exactly three hours overtime work. The parties agreed to submit the dispute to voluntary arbitration. Thereafter, the voluntary arbitrator, deciding in favor of the respondent, issued an order directing petitioner Dole to extend the free meal benefit to those employees who actually did overtime work even for exactly three hours only. Petitioner sought a reconsideration of the above order but the same was denied. Hence, petitioner elevated the matter to the Court of Appeals by way of a petition for review on certiorari. On September 22, 2000, the Court of Appeals rendered its decision upholding the assailed order. Thus, the instant petition. Petitioner Dole asserts that the phrase after three hours of actual overtime work should be interpreted to mean after more than three hours of actual overtime work. On the other hand, private respondent union and the voluntary arbitrator see it as meaning after exactly three hours of actual overtime work. The meal allowance provision in the 1996-2001 CBA is not new. It was also in the 1985-1988 CBA and the 1990-1995 CBA. The 1990-1995 CBA provision on meal allowance was amended by the parties in the 1993-1995 CBA Supplement. The clear changes in each CBA provision on meal allowance were in the amount of the meal allowance and free meals, and the use of the words after and after more than to qualify the amount of overtime work to be performed by an employee to entitle him to the free meal. To arrive at a correct interpretation of the disputed provision of the CBA, a review of the pertinent section of past CBAs is in order. The CBA covering the period 21 September 1985 to 20 September 1988 provided: Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of FOUR (P4.00) PESOS to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as presently practiced, after THREE (3) hours of actual overtime work.[5] The CBA for 14 January 1990 to 13 January 1995 likewise provided: Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of EIGHT PESOS (P8.00) to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as presently practiced, not exceeding SIXTEEN PESOS (P16.00) after THREE (3) hours of actual overtime work.[6] The provision above was later amended when the parties renegotiated the economic provisions of the CBA pursuant to Article 253-A of the Labor Code. Section 3 of Article XVIII of the 14 January 1993 to 13 January 1995 Supplement to the 1990-1995 CBA reads: Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL SUBSIDY of NINE PESOS (P9.00) to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as presently practiced, not exceeding TWENTY ONE PESOS (P21.00) after more than THREE (3) hours of actual overtime work (Section 3, as amended).[7] We note that the phrase more than was neither in the 1985-1988 CBA nor in the original 1990-1995 CBA. It was inserted only in the 1993-1995 CBA Supplement. But said phrase is again absent in Section 3 of Article XVIII of the 1996-2001 CBA, which reverted to the phrase after three (3) hours. Petitioner asserts that the phrase after three (3) hours of actual overtime work does not mean after exactly three hours of actual overtime work; it means after more than three hours of actual overtime work. Petitioner insists that this has been the interpretation and practice of Dole for the past thirteen years.

Respondent, on the other hand, maintains that after three (3) hours of actual overtime work simply means after rendering exactly, or no less than, three hours of actual overtime work. The Court finds logic in private respondents interpretation. The omission of the phrase more than between after and three hours in the present CBA spells a big difference. No amount of legal semantics can convince the Court that after more than means the same as after. Petitioner asserts that the more than in the 1993-1995 CBA Supplement was mere surplusage because, regardless of the absence of said phrase in all the past CBAs, it had always been the policy of petitioner corporation to give the meal allowance only after more than 3 hours of overtime work. However, if this were true, why was it included only in the 1993-1995 CBA Supplement and the parties had to negotiate its deletion in the 1996-2001 CBA? Clearly then, the reversion to the wording of previous CBAs can only mean that the parties intended that free meals be given to employees after exactly, or no less than, three hours of actual overtime work. The disputed provision of the CBA is clear and unambiguous. The terms are explicit and the language of the CBA is not susceptible to any other interpretation. Hence, the literal meaning of free meals after three (3) hours of overtime work shall prevail, which is simply that an employee shall be entitled to a free meal if he has rendered exactly, or no less than, three hours of overtime work, not after more than or in excess of three hours overtime work. Petitioner also invokes the well-entrenched principle of management prerogative that the power to grant benefits over and beyond the minimum standards of law, or the Labor Code for that matter, belongs to the employer x x x. According to this principle, even if the law is solicitous of the welfare of the employees, it must also protect the right of the employer to exercise what clearly are management prerogatives.[8] Petitioner claims that, being the employer, it has the right to determine whether it will grant a free meal benefit to its employees and, if so, under what conditions. To see it otherwise would amount to an impairment of its rights as an employer. We do not think so. The exercise of management prerogative is not unlimited. It is subject to the limitations found in law, a collective bargaining agreement or the general principles of fair play and justice.[9] This situation constitutes one of the limitations. The CBA is the norm of conduct between petitioner and private respondent and compliance therewith is mandated by the express policy of the law.[10] Petitioner Dole cannot assail the voluntary arbitrators interpretation of the CBA for the supposed impairment of its management prerogatives just because the same interpretation is contrary to its own. WHEREFORE, petition is hereby denied. SO ORDERED. G.R. No. 85073 August 24, 1993 DAVAO FRUITS CORPORATION, petitioner, vs. ASSOCIATED LABOR UNIONS (ALU) for in behalf of all the rank-and-file workers/employees of DAVAO FRUITS CORPORATION and NATIONAL LABOR RELATIONS COMMISSION, respondents. Dominguez & Paderna Law Offices for petitioners. The Solicitor General for public respondents.

QUIASON, J.: This is a petition for certiorari to set aside the resolution of the National Labor Relations Commission (NLRC), dismissing for lack of merit petitioner's appeal from the decision of the Labor Arbiter in NLRC Case No. 1791-MC-X1-82. On December 28, 1982 respondent Associated Labor Unions (ALU), for and in behalf of all the rank-and-file workers and employees of petitioner, filed a complaint (NLRC Case No. 1791-MC-XI-82) before the Ministry of Labor and Employment, Regional Arbitration Branch XI, Davao City, against petitioner, for "Payment of the Thirteenth-Month Pay Differentials." Respondent ALU sought to recover from petitioner the thirteenth month pay differential for 1982 of its rankand-file employees, equivalent to their sick, vacation and maternity leaves, premium for work done on rest days and special holidays, and pay for regular holidays which petitioner, allegedly in disregard of company practice since 1975, excluded from the computation of the thirteenth month pay for 1982. In its answer, petitioner claimed that it erroneously included items subject of the complaint in the computation of the thirteenth month pay for the years prior to 1982, upon a doubtful and difficult question of law. According to petitioner, this mistake was discovered only in 1981 after the promulgation of the Supreme Court decision in the case of San Miguel Corporation v. Inciong (103 SCRA 139). A decision was rendered on March 7, 1984 by Labor Arbiter Pedro C. Ramos, in favor of respondent ALU. The dispositive portion of the decision reads as follows: WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered ordering respondent to pay the 1982 13th month pay differential to all its rank-and-file workers/employees herein represented by complainant Union (Rollo, p. 32). Petitioner appealed the decision of the Labor Arbiter to the NLRC, which affirmed the said decision accordingly dismissed the appeal for lack of merit. Petitioner elevated the matter to this Court in a petition for review under Rule 45 of the Revised Rules of Court. This error notwithstanding and in the interest of justice, this Court resolved to treat the instant petition as a special civil action for certiorari under Rule 65 of the Revised Rules of Court (P.D. No. 1391, Sec. 5; Rules Implementing P.D. No. 1391, Rule II, Sec. 7; Cando v. National Labor Relations Commission, 189 SCRA 666 [1990]: Pearl S. Buck Foundation, Inc. v. National Labor Relations Commission, 182 SCRA 446 [1990]). The crux of the present controversy is whether in the computation of the thirteenth month pay given by employers to their employees under P.D. No. 851, payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays may be excluded in the computation and payment thereof, regardless of long-standing company practice.

Presidential Decree No. 851, promulgated on December 16, 1975, mandates all employers to pay their employees a thirteenth month pay. How this pay shall be computed is set forth in Section 2 of the "Rules and Regulations Implementing Presidential Decree No. 851," thus: SECTION 2. . . . (a) "Thirteenth month pay" shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year. (b) "Basic Salary" shall include all renumerations or earnings paid by an employer to an employee for services rendered but may not include cost of living allowances granted pursuant to Presidential Decree No. 525 or Letter of Instructions No. 174, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation of the Decree on December 16, 1975. The Department of Labor and Employment issued on January 16, 1976 the "Supplementary Rules and Regulations Implementing P.D. No. 851" which in paragraph 4 thereof further defines the term "basic salary," thus: 4. Overtime pay, earnings and other renumerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. Clearly, the term "basic salary" includes renumerations or earnings paid by the employer to employee, but excludes cost-of-living allowances, profit-sharing payments, and all allowances and monetary benefits which have not been considered as part of the basic salary of the employee as of December 16, 1975. The exclusion of cost-of-living allowances and profit sharing payments shows the intention to strip "basic salary" of payments which are otherwise considered as "fringe" benefits. This intention is emphasized in the catch all phrase "all allowances and monetary benefits which are not considered or integrated as part of the basic salary." Basic salary, therefore does not merely exclude the benefits expressly mentioned but all payments which may be in the form of "fringe" benefits or allowances (San Miguel Corporation v. Inciong, supra, at 143-144). In fact, the Supplementary Rules and Regulations Implementing P.D. No. 851 are very emphatic in declaring that overtime pay, earnings and other renumerations shall be excluded in computing the thirteenth month pay. In other words, whatever compensation an employee receives for an eight-hour work daily or the daily wage rate in the basic salary. Any compensation or remuneration other than the daily wage rate is excluded. It follows therefore, that payments for sick, vacation and maternity leaves, premium for work done on rest days special holidays, as well as pay for regular holidays, are likewise excluded in computing the basic salary for the purpose of determining the thirteen month pay. Petitioner claims that the mistake in the interpretation of "basic salary" was caused by the opinions, orders and rulings rendered by then Acting Labor Secretary Amado C. Inciong, expressly including the subject items in computing the thirteenth month pay. The inclusion of these items is clearly not sanctioned under P.D. No. 851, the governing law and its implementing rules, which speak only of "basis salary" as the basis for determining the thirteenth month pay. Moreover, whatever doubt arose in the interpretation of P.D. No. 851 was erased by the Supplementary Rules and Regulations which clarified the definition of "basic salary." As pointed out in San Miguel Corporation v. Inciong, (supra): While doubt may have been created by the prior Rules and Regulations and Implementing Presidential Decree 851 which defines basic salary to include all remunerations or earnings paid by an employer to an employee, this cloud is dissipated in the later and more controlling Supplementary Rules and Regulations which categorically, exclude from the definition of basic salary earnings and other remunerations paid by employer to an employee. A cursory perusal of the two sets of Rules indicates that what has hitherto been the subject of broad inclusion is now a subject of broad exclusion. The Supplementary Rules and Regulations cure the seeming tendency of the former rules to include all remunerations and earnings within the definition of basic salary. The all-embracing phrase "earnings and other remunerations which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for work performed on rest days and special holidays, pay for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay. If they were not so excluded, it is hard to find any "earnings and other remunerations" expressly excluded in computation of the 13th month-pay. Then the exclusionary provision would prove to be idle and with purpose. The "Supplementary Rules and Regulations Implementing P.D. No. 851," which put to rest all doubts in the computation of the thirteenth month pay, was issued by the Secretary of Labor as early as January 16, 1976, barely one month after the effectivity of P.D. No. 851 and its Implementing Rules. And yet, petitioner computed and paid the thirteenth month pay, without excluding the subject items therein until 1981. Petitioner continued its practice in December 1981, after promulgation of the afore-quoted San Miguel decision on February 24, 1981, when petitioner purportedly "discovered" its mistake. From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees' thirteenth month pay, the payments for sick, vacation and maternity leaves, premiums for work done on rest days and special holidays, and pay for regular holidays. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Section 10 of the Rules and Regulations Implementing P.D. No. 851, and Article 100 of the labor of the Philippines, which prohibit the diminution or elimination by the employer of the employees' existing benefits (Tiangco v. Leogardo, Jr., 122 SCRA 267, [1983]). Petitioner cannot invoke the principle of solutio indebiti which as a civil law concept that is not applicable in Labor Law. Besides, in solutio indebiti, the obligee is required to return to the obligor whatever he received from the latter (Civil Code of the Philippines, Arts. 2154 and 2155). Petitioner in the instant case, does not demand the return of what it paid respondent ALU from 1975 until 1981; it merely wants to "rectify" the error it made over these years by excluding unilaterally from the thirteenth month pay in 1982 the items subject of litigation. Solutio indebiti, therefore, is not applicable to the instant case. WHEREFORE, finding no grave abuse of discretion on the part of the NLRC, the petition is hereby DISMISSED, and the questioned decision of respondent NLRC is AFFIRMED accordingly. Cruz, Grio-Aquino, Davide, Jr. and Bellosillo, JJ., concur. [G.R. No. 155059. April 29, 2005]

AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION, petitioner, vs. AMERICAN WIRE AND CABLE CO., INC. and THE COURT OF APPEALS, respondents. DECISION CHICO-NAZARIO, J.:

Before Us is a special civil action for certiorari, assailing the Decision[1] of the Special Eighth Division of the Court of Appeals dated 06 March 2002. Said Decision upheld the Decision[2] and Order[3] of Voluntary Arbitrator Angel A. Ancheta of the National Conciliation and Mediation Board (NCMB) dated 25 September 2001 and 05 November 2001, respectively, which declared the private respondent herein not guilty of violating Article 100 of the Labor Code, as amended. Assailed likewise, is the Resolution[4] of the Court of Appeals dated 12 July 2002, which denied the motion for reconsideration of the petitioner, for lack of merit. THE FACTS

The facts of this case are quite simple and not in dispute. American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires and cables. There are two unions in this company, the American Wire and Cable Monthly-Rated Employees Union (Monthly-Rated Union) and the American Wire and Cable Daily-Rated Employees Union (DailyRated Union). On 16 February 2001, an original action was filed before the NCMB of the Department of Labor and Employment (DOLE) by the two unions for voluntary arbitration. They alleged that the private respondent, without valid cause, suddenly and unilaterally withdrew and denied certain benefits and entitlements which they have long enjoyed. These are the following: a. Service Award; b. 35% premium pay of an employees basic pay for the work rendered during Holy Monday, Holy Tuesday, Holy Wednesday, December 23, 26, 27, 28 and 29;

c. d.

Christmas Party; and Promotional Increase.

A promotional increase was asked by the petitioner for fifteen (15) of its members who were given or assigned new job classifications. According to petitioner, the new job classifications were in the nature of a promotion, necessitating the grant of an increase in the salaries of the said 15 members. On 21 June 2001, a Submission Agreement was filed by the parties before the Office for Voluntary Arbitration. Assigned as Voluntary Arbitrator was Angel A. Ancheta. On 04 July 2001, the parties simultaneously filed their respective position papers with the Office of the Voluntary Arbitrator, NCMB, and DOLE. On 25 September 2001, a Decision[5] was rendered by Voluntary Arbitrator Angel A. Ancheta in favor of the private respondent. The dispositive portion of the said Decision is quoted hereunder: WHEREFORE, with all the foregoing considerations, it is hereby declared that the Company is not guilty of violating Article 100 of the Labor Code, as amended, or specifically for withdrawing the service award, Christmas party and 35% premium for work rendered during Holy Week and Christmas season and for not granting any promotional increase to the alleged fifteen (15) Daily-Rated Union Members in the absence of a promotion. The Company however, is directed to grant the service award to deserving employees in amounts and extent at its discretion, in consultation with the Unions on grounds of equity and fairness.[6] A motion for reconsideration was filed by both unions[7] where they alleged that the Voluntary Arbitrator manifestly erred in finding that the company did not violate Article 100 of the Labor Code, as amended, when it unilaterally withdrew the subject benefits, and when no promotional increase was granted to the affected employees. On 05 November 2001, an Order[8] was issued by Voluntary Arbitrator Angel A. Ancheta. Part of the Order is quoted hereunder: Considering that the issues raised in the instant case were meticulously evaluated and length[i]ly discussed and explained based on the pleadings and documentary evidenc[e] adduced by the contending parties, we find no cogent reason to change, modify, or disturb said decision. WHEREFORE, let the instant MOTION[S] FOR RECONSIDERATION be, as they are hereby, denied for lack of merit. Our decision dated 25 September 2001 is affirmed en toto.[9] An appeal under Rule 43 of the 1997 Rules on Civil Procedure was made by the Daily-Rated Union before the Court of Appeals[10] and docketed as CA-G.R. SP No. 68182. The petitioner averred that Voluntary Arbitrator Angel A. Ancheta erred in finding that the company did not violate Article 100 of the Labor Code, as amended, when the subject benefits were unilaterally withdrawn. Further, they assert, the Voluntary Arbitrator erred in adopting the companys unaudited Revenues and Profitability Analysis for the years 1996-2000 in justifying the latters withdrawal of the questioned benefits.[11] On 06 March 2002, a Decision in favor of herein respondent company was promulgated by the Special Eighth Division of the Court of Appeals in CAG.R. SP No. 68182. The decretal portion of the decision reads: WHEREFORE, premises considered, the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit. The Decision of Voluntary Arbitrator Angel A. Ancheta dated September 25, 2001 and his Order dated November 5, 2001 in VA Case No. AAA-10-6-4-2001 are hereby AFFIRMED and UPHELD.[12] A motion for reconsideration[13] was filed by the petitioner, contending that the Court of Appeals misappreciated the facts of the case, and that it committed serious error when it ruled that the unaudited financial statement bears no importance in the instant case. The Court of Appeals denied the motion in its Resolution dated 12 July 2002[14] because it did not present any new matter which had not been considered in arriving at the decision. The dispositive portion of the Resolution states:

WHEREFORE, the motion for reconsideration is hereby DENIED for lack of merit.[15] Dissatisfied with the court a quos ruling, petitioner instituted the instant special civil action for certiorari,[16] citing grave abuse of discretion amounting to lack of jurisdiction. ASSIGNMENT OF ERRORS

The petitioner assigns as errors the following: I THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPANY DID NOT VIOLATE ARTICLE 100 OF THE LABOR CODE, AS AMENDED, WHEN IT UNILATERALLY WITHDREW THE BENEFITS OF THE MEMBERS OF PETITIONER UNION, TO WIT: 1) 35% PREMIUM PAY; 2) CHRISTMAS PARTY AND ITS INCIDENTAL BENEFITS; AND 3) SERVICE AWARD, WHICH IN TRUTH AND IN FACT SAID BENEFITS/ENTITLEMENTS HAVE BEEN GIVEN THEM SINCE TIME IMMEMORIAL, AS A MATTER OF LONG ESTABLISHED COMPANY PRACTICE, WITH THE FURTHER FACT THAT THE SAME NOT BEING DEPENDENT ON PROFITS. II THE COURT OF APPEALS ERRED WHEN IT JUST ACCEPTED HOOK, LINE AND SINKER, THE RESPONDENT COMPANYS SELF SERVING AND UNAUDITED REVENUES AND PROFITABILITY ANALYSIS FOR THE YEARS 1996-2000 WHICH THEY SUBMITTED TO FALSELY JUSTIFY THEIR UNLAWFUL ACT OF UNILATERALLY AND SUDDENLY WITHDRAWING OR DENYING FROM THE PETITIONER THE SUBJECT BENEFITS/ENTITLEMENTS. III THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE YEARLY SERVICE AWARD IS NOT DEPENDENT ON PROFIT BUT ON SERVICE AND THUS, CANNOT BE UNILATERALLY WITHDRAWN BY RESPONDENT COMPANY. ISSUE

Synthesized, the solitary issue that must be addressed by this Court is whether or not private respondent is guilty of violating Article 100 of the Labor Code, as amended, when the benefits/entitlements given to the members of petitioner union were withdrawn. THE COURTS RULING

Before we address the sole issue presented in the instant case, it is best to first discuss a matter which was raised by the private respondent in its Comment. The private respondent contends that this case should have been dismissed outright because of petitioners error in the mode of appeal. According to it, the petitioner should have elevated the instant case to this Court through a petition for review on certiorari under Rule 45, and not through a special civil action for certiorari under Rule 65, of the 1997 Rules on Civil Procedure.[17] Assuming arguendo that the mode of appeal taken by the petitioner is improper, there is no question that the Supreme Court has the discretion to dismiss it if it is defective. However, sound policy dictates that it is far better to dispose the case on the merits, rather than on technicality.[18] The Supreme Court may brush aside the procedural barrier and take cognizance of the petition as it raises an issue of paramount importance. The Court shall resolve the solitary issue on the merits for future guidance of the bench and bar.[19] With that out of the way, we shall now resolve whether or not the respondent company is guilty of violating Article 100 of the Labor Code, as amended. Article 100 of the Labor Code provides: ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code. The petitioner submits that the withdrawal of the private respondent of the 35% premium pay for selected days during the Holy Week and Christmas season, the holding of the Christmas Party and its incidental benefits, and the giving of service awards violated Article 100 of the Labor Code. The grant of these benefits was a customary practice that can no longer be unilaterally withdrawn by private respondent without the tacit consent of the petitioner. The benefits in question were given by the respondent to the petitioner consistently, deliberately, and unconditionally since time immemorial. The benefits/entitlements were not given to petitioner due to an error in interpretation, or a construction of a difficult question of law, but simply, the grant has been a practice over a long period of time. As such, it cannot be withdrawn from the petitioner at respondents whim and caprice, and without the consent of the former. The benefits given by the respondent cannot be considered as a bonus as they are not founded on profit. Even assuming that it can be treated as a bonus, the grant of the same, by reason of its long and regular concession, may be regarded as part of regular compensation.[20] With respect to the fifteen (15) employees who are members of petitioner union that were given new job classifications, it asserts that a promotional increase in their salaries was in order. Salary adjustment is a must due to their promotion.[21] On respondent companys Revenues and Profitability Analysis for the years 1996-2000, the petitioner insists that since the former was unaudited, it should not have justified the companys sudden withdrawal of the benefits/entitlements. The normal and/or legal method for establishing profit and loss of a company is through a financial statement audited by an independent auditor.[22] The petitioner cites our ruling in the case of Saballa v. NLRC,[23] where we held that financial statements audited by independent auditors constitute the normal method of proof of the profit and loss performance of the company. Our ruling in the case of Bogo-Medellin Sugarcane Planters Association, Inc., et al. v. NLRC, et al.[24] was likewise invoked. In this case, we held: The Court has previously ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. On the matter of the withdrawal of the service award, the petitioner argues that it is the employees length of service which is taken as a factor in the

grant of this benefit, and not whether the company acquired profit or not.[25] In answer to all these, the respondent corporation avers that the grant of all subject benefits has not ripened into practice that the employees concerned can claim a demandable right over them. The grant of these benefits was conditional based upon the financial performance of the company and that conditions/circumstances that existed before have indeed substantially changed thereby justifying the discontinuance of said grants. The companys financial performance was affected by the recent political turmoil and instability that led the entire nation to a bleeding economy. Hence, it only necessarily follows that the companys financial situation at present is already very much different from where it was three or four years ago.[26] On the subject of the unaudited financial statement presented by the private respondent, the latter contends that the cases cited by the petitioner indeed uniformly ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. However, these cases do not require that the only legal method to ascertain profit and loss is through an audited financial statement. The cases only provide that an audited financial statement is the normal method.[27] The respondent company likewise asseverates that the 15 members of petitioner union were not actually promoted. There was only a realignment of positions.[28] From the foregoing contentions, it appears that for the Court to resolve the issue presented, it is critical that a determination must be first made on whether the benefits/entitlements are in the nature of a bonus or not, and assuming they are so, whether they are demandable and enforceable obligations. In the case of Producers Bank of the Philippines v. NLRC[29] we have characterized what a bonus is, viz: A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. It is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. Based on the foregoing pronouncement, it is obvious that the benefits/entitlements subjects of the instant case are all bonuses which were given by the private respondent out of its generosity and munificence. The additional 35% premium pay for work done during selected days of the Holy Week and Christmas season, the holding of Christmas parties with raffle, and the cash incentives given together with the service awards are all in excess of what the law requires each employer to give its employees. Since they are above what is strictly due to the members of petitioner-union, the granting of the same was a management prerogative, which, whenever management sees necessary, may be withdrawn, unless they have been made a part of the wage or salary or compensation of the employees. The consequential question therefore that needs to be settled is if the subject benefits/entitlements, which are bonuses, are demandable or not. Stated another way, can these bonuses be considered part of the wage or salary or compensation making them enforceable obligations? The Court does not believe so. For a bonus to be enforceable, it must have been promised by the employer and expressly agreed upon by the parties,[30] or it must have had a fixed amount[31] and had been a long and regular practice on the part of the employer.[32] The benefits/entitlements in question were never subjects of any express agreement between the parties. They were never incorporated in the Collective Bargaining Agreement (CBA). As observed by the Voluntary Arbitrator, the records reveal that these benefits/entitlements have not been subjects of any express agreement between the union and the company, and have not yet been incorporated in the CBA. In fact, the petitioner has not denied having made proposals with the private respondent for the service award and the additional 35% premium pay to be made part of the CBA.[33] The Christmas parties and its incidental benefits, and the giving of cash incentive together with the service award cannot be said to have fixed amounts. What is clear from the records is that over the years, there had been a downtrend in the amount given as service award.[34] There was also a downtrend with respect to the holding of the Christmas parties in the sense that its location changed from paid venues to one which was free of charge,[35] evidently to cut costs. Also, the grant of these two aforementioned bonuses cannot be considered to have been the private respondents long and regular practice. To be considered a regular practice, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate.[36] The downtrend in the grant of these two bonuses over the years demonstrates that there is nothing consistent about it. Further, as held by the Court of Appeals: Anent the Christmas party and raffle of prizes, We agree with the Voluntary Arbitrator that the same was merely sponsored by the respondent corporation out of generosity and that the same is dependent on the financial performance of the company for a particular year[37] The additional 35% premium pay for work rendered during selected days of the Holy Week and Christmas season cannot be held to have ripened into a company practice that the petitioner herein have a right to demand. Aside from the general averment of the petitioner that this benefit had been granted by the private respondent since time immemorial, there had been no evidence adduced that it had been a regular practice. As propitiously observed by the Court of Appeals: . . . [N]otwithstanding that the subject 35% premium pay was deliberately given and the same was in excess of that provided by the law, the same however did not ripen into a company practice on account of the fact that it was only granted for two (2) years and with the express reservation from respondent corporations owner that it cannot continue to rant the same in view of the companys current financial situation.[38] To hold that an employer should be forced to distribute bonuses which it granted out of kindness is to penalize him for his past generosity.[39] Having thus ruled that the additional 35% premium pay for work rendered during selected days of the Holy Week and Christmas season, the holding of Christmas parties with its incidental benefits, and the grant of cash incentive together with the service award are all bonuses which are neither demandable nor enforceable obligations of the private respondent, it is not necessary anymore to delve into the Revenues and Profitability Analysis for the years 1996-2000 submitted by the private respondent. On the alleged promotion of 15 members of the petitioner union that should warrant an increase in their salaries, the factual finding of the Voluntary Arbitrator is revealing, viz: Considering that the Union was unable to adduce proof that a promotion indeed occur[ed] with respect to the 15 employees, the Daily Rated Unions claim for promotional increase likewise fall[s] there being no promotion established under the records at hand.[40] WHEREFORE, in view of all the foregoing, the assailed Decision and Resolution of the Court of Appeals dated 06 March 2002 and 12 July 2002, respectively, which affirmed and upheld the decision of the Voluntary Arbitrator, are hereby AFFIRMED. No pronouncement as to costs. SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur. G.R. No. 146762 January 30, 2007

CULVER B. SUICO, TERESA D. CENIZA and RONALD R. DACUT, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT)/ AUGUSTO G. COTELO, Respondents. x-------------------x G.R. No. 153584 January 30, 2007

BENIGNO MARIANO, JR., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT), Respondents. x-------------------x G.R. No. 163793 January 30, 2007

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT), Petitioner, vs. ERNESTO BORJE, Respondent. DECISION AUSTRIA-MARTINEZ, J.: By Resolution dated January 17, 2005,1 the Court ordered the consolidation of the Petitions for Review on Certiorari under Rule 45 of the Rules of Court docketed as G.R. No. 146762,2 G.R. No. 153584,3 and G.R. No. 163793.4 They involve parallel facts and issues: G.R. No. 146762 Culver B. Suico, Teresa D. Ceniza, and Ronald R. Dacut (complainants) were regular employees of Philippine Long Distance Telephone Company (PLDT) Cebu Jones Exchange and members of Manggagawa ng Komunikasyon ng Pilipinas (MKP). In September 1997, MKP launched a strike against PLDT. Complainants participated in the strike by picketing the PLDT.5 Acting Department of Labor and Employment (DOLE) Secretary Crescencio Trajano assumed jurisdiction over the labor dispute and issued a Return-to-Work Order on September 20, 1997.6 MKP did not heed said order but merely filed an Opposition7 thereto. In an Order8 dated September 29, 1997, DOLE Secretary Leonardo A. Quisumbing9 denied MKPs Opposition. Meanwhile, at the PLDT, complainants continued with their strike. On September 29, 1997, Ann Detelou Fernando (Fernando), a PLDT managerial employee, sustained injuries when strikers blocked her way to the premises of PLDT. Complainants were implicated in said incident. Hence, Emiliano Tanchico (Tanchico), PLDT Vice-President for Personnel Management and Development Center, sent to complainants separate notices dated October 8, 1997, which uniformly read: Please explain in writing why you should not be terminated for committing the following act: On September 30, 1997, while participating in an obviously illegal strike, you physically assaulted Ms. A Fernando, a Traffic Supervisor. Attached as Annex "A" is the statement of Ms. Fernando. xxxx Your illegal act has seriously prejudiced the companys operations, is a violation of the Code of Conduct and is considered, among others, serious misconduct, which is a ground for termination under Article 282 of the Labor Code. Kindly submit your notarized explanation to your Division Head within 48 hours from receipt of this Notice. Failure on your part to submit a written explanation within the given period shall constitute a waiver of your right to be heard. 10 Annex "A" to said notices is an unsworn statement in which Fernando gave a detailed account of the illegal act imputed to complainants.11 Complainants did not file any explanation. Tanchico sent them two other sets of notices dated October 14, 1997 12 and October 24, 1997.13 On October 27, 1997, complainants sent Tanchico separate but uniformly-worded letters which read: This concerns your memo dated October 8, 1997 xxx. In this regard, I hereby elect to exercise my right to be heard and defend myself in a formal hearing, to be set within five (5) days from my receipt of the documents hereinafter requested, pursuant to my right to due process and par. 2.5 of PLDT Systems Practice re the Handling of Administrative Cases. Moreover, kindly furnish me with the copies of formal (written) complaint filed against me as well as statements of witness(es) and preliminary investigation report(s) regarding the complaint, if any. My election to exercise my right to be heard and defend myself in a formal hearing is without prejudice to my right to submit a written explanation at a later time, which I hereby expressly reserve.14 PLDT Division Head Augusto Cotelo (Cotelo) replied on November 3, 1997 that PLDT was deferring action on the request for formal hearing until complainants shall have filed their answers to the charges. Cotelo wrote:

Please submit the notarized explanation that we required in our letters of October 8 & 14, 1997 within forty-eight (48) hours upon receipt of this letter, before we can consider any formal hearing. Please be reminded that we shall consider your failure to comply as a waiver of your right to be heard, and accordingly decide on the charges against you on the basis of the evidence on hand. 15 (Emphasis ours) Complainants merely reiterated their request for formal hearing. Thus, Cotelo sent them termination notices dated November 19, 1997 which read: In light of the repeated demands and your consistent failure to provide the required written explanation for the following acts: On September 30, 1997, while participating in an obviously illegal strike, you physically assaulted Ms. A. Fernando, a Traffic Supervisor. PLDT has proceeded to consider the charges against you for violation of Article 264 of the Labor Code and for serious misconduct. Based on the available evidence, the written copy of which were duly sent to you, the Company finds you guilty as charged. The Company cannot see any reason why the evidence that the statements we considered were motivated by any purpose other than to bear witness to the truth. We find these evidence direct and positive identification of your participation in and commission of the illegal act charged. Your act constitutes a just cause for termination under the Labor Code which authorizes an employer to terminate an employee for serious misconduct and which prohibits the commission of any act of violence, coercion or intimidation, or the obstruction of free ingress and egress, during a strike (see Art. 282-A & 264, Labor Code). There is also the additional attendant circumstances that you committed these acts during a strike that was illegally declared and conducted. Your services with Philippine Long Distance Telephone Company are consequently terminated effective upon receipt of this letter. 16 Complainants filed a Complaint for illegal dismissal and damages with the Labor Arbiter (LA). In a Decision dated July 15, 1998, the LA declared the dismissal of complainants illegal and ordered their reinstatement.17 PLDT appealed to the National Labor Relations Commission (NLRC) which, in its January 3, 2000 Decision, reversed and set aside the July 15, 1998 LA Decision, thus: WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered DISMISSING the instant complaint. SO ORDERED.18 Complainants filed a Motion for Reconsideration which the NLRC denied in its Resolution dated March 27, 2000. 19 Thereafter, complainants filed a Petition for Certiorari under Rule 65 with the Court of Appeals (CA) but the latter dismissed it in a Decision 20 dated September 22, 2000, the dispositive portion of which states: WHEREFORE, premises considered, the petition is DISMISSED and the assailed decision and resolution are affirmed. SO ORDERED. 21 The Motion for Reconsideration filed by complainants was denied by the CA in its January 11, 2001 Resolution. 22 And so, the present Petition for Review where complainants question the CA for its September 22, 2000 Decision and January 11, 2001 Resolution on the sole ground that: THE COURT OF APPEALS HAS DECIDED THE INSTANT DISPUTE IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT REFUSED TO CONSIDER THAT THE DISMISSAL OF HEREIN PETITIONNERS WAS MADE IN VIOLATION OF THEIR RIGHT TO PROCEDURAL DUE PROCESS. 23 G.R. No. 153584 Benigno Mariano, Jr. (Mariano) was an employee of PLDT Laoag City Sub-Exchange and an officer of MKP. During the September 1997 strike which MKP launched against PLDT, Mariano led a picket of the premises of the PLDT. 24 In said picket, Melvyn T. Guillermo (Guillermo), a PLDT subscriber, suffered injury and humiliation at the hands of a striker. In his letter to PLDT, Guillermo identified Mariano as the culprit and demanded that the latter be dismissed.25 Acting on the complaint of Guillermo, Tanchico sent Mariano the following notice dated October 13, 1997: Please explain in writing why you should not be terminated for committing the following act: On 19 September 1997, at around 11:50 a.m., you verbally and physically assaulted MELVYN T. GUILLERMO, a PLDT subscriber xxx. Attached for your reference as Annex "A" is the letter-complaint of Mr. Guillermo. This act is illegal and violates express provisions of the Labor Code which among others provide: ART. 264. xxxx (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employers premises for lawful purposes or obstruct public thoroughfares. Additionally, as provided in the law, any worker who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. Your illegal act has seriously prejudiced the companys operations, is a violation of the Code of Conduct and is considered, among others, serious misconduct,

which is a ground for termination under Article 282 of the Labor Code. Kindly submit your notarized explanation to your Division Head within 48 hours from receipt of this Notice. Failure on your part to submit a written explanation within the given period shall constitute a waiver of your right to be heard. 26 When Mariano did not reply, Tanchico sent him another notice27 dated October 24, 1997, instructing him to submit his notarized explanation otherwise the charges against him will be resolved based on the available evidence. On November 6, 1997, Mariano wrote Tanchico: Sir, your memorandum dated 13 October 1997 xxx is a gross violation of my constitutional right as worker and employee to self organization xxx. Hence, I hereby elect to exercise my right to due process, i.e., to be heard and defend myself in a formal hearing to be set within 5 (FIVE) days from receipt of documents hereinafter requested. Pursuant to PLDT System Practice #94-016 dated August 10, 1994 (Handling of Administrative Cases), please furnish me a copy of formal (written) complaint filed against me, statement of witness/es and preliminary investigations and/or report/s conducted on the aforesaid incident, if any. My option to be heard and defend myself in a formal hearing is without prejudice to my right of recourse at a later time which I hereby expressly reserve.28 Hence, Reynaldo Puzon, PLDT Assistant Vice-President for North Luzon, sent Mariano a notice dated November 18, 1997, informing him of the termination of his employment, thus: xxx You asked in your letter that you be allowed to defend yourself in a formal hearing but you failed to provide a written explanation. In light of the demands and your failure to provide the required written explanation for the following acts: On September 19, 1997, at around 11:50 a.m., you verbally and physically assaulted Mr. Melvyn Guillermo, a PLDT subscriber who had just paid his PLDT bill at the companys Laoag Business Office. After verbally abusing Mr. Guillermo by shouting invectives in his face, you boxed and slapped him, striking his face, left shoulder and arm. PLDT has proceeded to consider the charges against you for violation of Art. 264 of the Labor Code and for serious misconduct. Based on the available evidence, the written copy of which were duly sent to you, the Company finds you guilty as charged. The Company cannot see any reason why the evidence that the statements we considered were motivated by any purpose other than to bear witness to the truth. We find these evidence direct and positive identification of your participation in and commission of the illegal act charged. Your act constitutes a just cause for termination under the Labor Code which authorizes an employer to terminate an employee for serious misconduct and which prohibits the commission of any act of violence, coercion or intimidation, or the obstruction of free ingress and egress, during a strike (see Art. 282-A & 264, Labor Code). There is also the additional attendant circumstances that you committed these acts during a strike that was illegally declared and conducted. Your services with Philippine Long Distance Telephone Company are consequently terminated effective upon receipt of this letter.29 Mariano filed a Complaint30 for illegal dismissal and damages with the LA but the latter dismissed it in a Decision 31 dated December 15, 1998. Mariano appealed to the NLRC but to no avail as the latter, in its December 27, 1999 Resolution,32 affirmed the December 15, 1998 LA Decision. In its Resolution33 of March 3, 2000, the NLRC denied Marianos Motion for Reconsideration. Mariano filed a Petition for Certiorari34 with the CA which rendered the following Decision35 on February 7, 2002: WHEREFORE, premises considered, the petition is DISMISSED and the assailed decision and resolution are AFFIRMED. SO ORDERED.36 Mariano sought reconsideration of the foregoing decision but the CA denied the same in its Resolution 37 of May 9, 2002. Mariano is now before the Court in the present petition assailing the CA Decision and Resolution claiming that: THE COURT OF APPEALS HAD DECIDED THE INSTANT DISPUTE IN A WAY NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT REFUSED TO CONSIDER THAT THE DISMISSAL OF HEREIN PETITIONER WAS MADE IN VIOLATION OF [HIS] RIGHT TO PROCEDURAL DUE PROCESS. 38 G.R. No. 163793 Ernesto Borje (Borje) was an employee of PLDT SFU Mother Exchange and a member of MKP. During the September 1997 strike which MKP staged against PLDT, Borje took part by picketing the premises of PLDT. 39 In a notice dated October 23, 1997 sent by Tanchico to Borje, the latter was accused of engaging in violent activities during the strike. The notice read: Please explain in writing why you should not be terminated for committing the following acts: 1. October 15, 1997, at around 8:35 a.m., you hurled a stone hitting the leg (below the knee) of Mr. Danny N. Garcia, OPM Supervisor xxx as a result of which Mr. Garcia suffered a contusion. Attached as Annex "A" is the incident report of Mr. Garcia; and 2. October 15, 1997, at around 8:20 p.m, you threw stones at Mr. Amelito Visico, an employee of Southland Security Corporation of the Philippines assigned at the PLDT Exchange, San Fernando, La Union. Minutes later or at around 8:35 p.m., you again threw stones inside PLDT premises hitting and damaging the right side window of PLDTs service vehicle with body no. 96-495 and plate no. UJW-359. Attached as Annex "B" is the Affidavit of Mr. Visico. This act is illegal and violates express provisions of the Labor Code xxx.

Additionally, as provided in the law, any worker who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. Your illegal act has seriously prejudiced the companys operations, is a violation of the Code of Conduct and is considered, among others, serious misconduct, which is ground for termination under Article 282 of the Labor Code. Kindly submit your notarized explanation to your Division Head within 48 hours from receipt of this Notice. Failure on your part to submit a written explanation within the given period shall constitute a waiver of your right to be heard. 40 Borje replied on November 7, 1997, to wit: Sir, your memorandum dated 13 October 1997 xxx is a gross violation of my constitutional right as worker and employee to self organization xxx. Hence, I hereby elect to exercise my right to due process, i.e., to be heard and defend myself in a formal hearing to be set within 5 (FIVE) days from receipt of documents hereinafter requested. Pursuant to PLDT System Practice #94-016 dated August 10, 1994 (Handling of Administrative Cases), please furnish me a copy of formal (written) complaint filed against me, statement of witness/es and preliminary investigations and/or report/s conducted on the aforesaid incident, if any. My election to exercise my right to be heard and defend myself in a formal hearing is without prejudice to my right to submit a written explanation at a later time, which I hereby expressly reserve. 41 Puzon sent Borje a notice dated November 18, 1997 informing him of the termination of his employment, thus: xxx You asked in your letter that you be allowed to defend yourself in a formal hearing but you failed to provide a written explanation. In light of the demands and your failure to provide the required written explanation for the following acts: On October 15, 1997, at aroun 8:35 a.m., you hurled a stone hitting the leg (below the knee) of Mr. Danny Garcia, OPM Supervisor. As a result of which Mr. Garcia suffered a contusion. On the same day, at around 8:20 p.m., you threw stones at Mr. Amelito Visico, an employee of Southland Security Corporation of the Philippines assigned at the PLDT Exchange, San Fernando, La Union. Minutes later or at around 8:35 p.m., you again threw stones inside PLDT premises hitting and damaging the right side window of PLDTs service vehicle with body no. 94-495 and plate no. UJW-359. PLDT has proceeded to consider the charges against you for violation of Article 264 of the Labor Code and for serious misconduct. Based on the available evidence, the written copy of which were duly sent to you, the Company finds you guilty as charged. The Company cannot see any reason why the evidence that the statements we considered were motivated by any purpose other than to bear witness to the truth. We find these evidence direct and positive identification of your participation in and commission of the illegal act charged. Your act constitutes a just cause for termination under the Labor Code which authorizes an employer to terminate an employee for serious misconduct and which prohibits the commission of any act of violence, coercion or intimidation, or the obstruction of free ingress and egress, during a strike (see Art. 282-A & 264, Labor Code). There is also the additional attendant circumstances that you committed these acts during a strike that was illegally declared and conducted. Your services with Philippine Long Distance Telephone Company are consequently terminated effective upon receipt of this letter.42 Borje filed a Complaint43 for illegal dismissal and damages with the LA but the latter dismissed it in a Decision dated January 26, 2001. 44 Borje appealed to the NLRC which, in a Resolution dated September 28, 2001, held: WHEREFORE, premises considered, the decision under review is AFFIRMED and complainants appeal, DISMISSED for lack of merit. SO ORDERED. 45 Borjes Motion for Reconsideration was denied by the NLRC in its January 7, 2002 Resolution. 46 However, upon Petition for Certiorari47 filed by Borje, the CA rendered on April 12, 2002 a Decision48 the decretal portion of which reads: WHEREFORE, premises considered, the instant petition is GRANTED. The decision of the Labor Arbiter and the NLRC is REVERSED and new one entered ordering the REINSTATEMENT of the Petitioner without loss of seniority rights and other privileges and to grant him full backwages, to be computed from the time of his illegal dismissal without qualification or deduction. Let the records of this case be REMANDED to the Labor Arbiter for appropriate computation of backwages. SO ORDERED.49 PLDT filed a Motion for Reconsideration but the CA denied the same in a Resolution 50 dated June 1, 2004. Petitioner PLDT is now before the Court questioning the foregoing CA Decision and Resolution on this sole ground: THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN HOLDING THAT THE NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN AFFIRMING IN TOTO THE LABOR ARBITERS DECISION UPHOLDING THE VALIDITY OF RESPONDENTS DISMISSAL ON THE ISSUE OF ALLEGED LACK OF DUE PROCESS, THE SAME BEING CONTRARY TO LAW AND ESTABLISHED JURISPRUDENCE THAT FOR CERTIORARI TO SUCCEED ABUSE OF DISCRETION MUST SATISFACTORILY BE SHOWN TO BE "GRAVE", WHICH IS NOT SO IN THE CASE AT BAR.51[sic] The petitions in G.R. No. 146762 and G.R. No. 153584 are partly meritorious in that the CA did not err in upholding the validity of the dismissal of Suico, Ceniza, Dacut, and Mariano but the PLDT should be ordered to pay said employees nominal damages pursuant to Agabon v. National Labor Relations Commission.52 The petition in G.R. No. 163793 is meritorious in that the CA erroneously reversed the NLRC by holding the dismissal of Borje illegal; but PLDT should also be

ordered to pay Borje nominal damages. In the three petitions, the substantive bases of the dismissal of Suico, Ceniza, Dacut, Mariano and Borje (hereinafter collectively referred to as Suico, et al.) is not in issue. Only the procedural aspect is in issue, specifically, whether PLDT violated the requirements of due process under the Labor Code when it dismissed said employees without heeding their request for the conduct of a formal hearing as provided for under PLDT Systems Practice No. 94-016 and prior to submission of their respective answers to the charges against them. The minimum standards of due process in all cases of termination of employment are prescribed under Article 277(b) of the Labor Code, to wit: Art. 277. Miscellaneous Provisions. xxxx (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the cause for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires, in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. (Emphasis supplied). It is implemented by Rule XXIII of the Implementing Rules of Book V of the Labor Code, 53 which provides: Section 2. Standards of due process; requirements of notice.I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination xxx. It is the view of PLDT that in the dismissal of employees for strike-related violence, it is sufficient to merely declare the latter to have lost their employment without having to comply with any procedure for their termination. 54 PLDT is mistaken. Art. 277 (b) in relation to Art. 264 (a)55 and (e)56 recognizes the right to due process of all workers, without distinction as to the cause of their termination.57 Where no distinction is given, none is construed. 58 Hence, the foregoing standards of due process apply to the termination of employment of Suico, et al. even if the cause therefor was their supposed involvement in strike-related violence prohibited under Art. 264 (a) and (e). Moreover, the procedure for termination prescribed under Art. 277(b) and Rule XXII of the Implementing Rules of Book V is supplemented by existing company policy. Art. 277(b) provides that the procedure for termination prescribed therein is without prejudice to the adoption by the employer of company policy on the matter, provided this conforms with the guidelines set by the DOLE such as Rule XXII of the Implementing Rules of Book V. This is consistent with the established principle that employers are allowed, under the broad concept of management prerogative, to adopt company policies that regulate all aspects of personnel administration including the dismissal and recall of workers. 59 Company policies or practices are binding on the parties. 60 Some can ripen into an obligation on the part of the employer, 61 such as those which confer benefits on employees 62 or regulate the procedures and requirements for their termination. 63 Thus, in Batangas Laguna Tayabas Bus Company (BLTB) v. Court of Appeals,64 the Court held that the employer BLTB is obliged under the Service Manual it issued to grant an erring employee the right to be heard and defend himself, and to apply the table of penalties fixed therein. In its Comment to the Petition in G.R. No. 146762, PLDT objected to the application to this case of the ruling in BLTB, arguing that "xxx the more appropriate case is Mendoza v. National Labor Relations Commission, 19465 SCRA 606 [1991], where the Supreme Court ruled that company procedures for discipline do not require strict observance as long as the essential requirements of due process had been observed xxx." But even Mendoza favors the view that company procedure for termination should be implemented, even if not to the letter. In fact, in said case, the employer San Miguel Corporation implemented company procedure for termination by conducting a formal investigation, in question and answer form, against the employee Mendoza. In the present case, PLDT does not deny the existence of a company procedure in termination cases known as Systems Practice No. 94-016, which provides: Effective Date August 10, 1994 HANDLING OF ADMINISTRATIVE CASES xxxx 1. PURPOSE This practice describes the procedural guidelines for handling administrative cases. 2. GENERAL 2.1 Investigation of offenses or infractions of Company regulations committed by employees shall be handled by various investigating units xxx;

xxxx 2.5 An employee under investigation for the commission of an offense or infraction shall be informed in writing of the particular act constituting the offense or infraction imputed to him. He may answer the charges against him in writing within a reasonable period of time (at least 48 hours but not more than 72 hours) or be afforded the opportunity to be heard and defend himself with the assistance of his counsel or union representative, if he so desires. (Emphasis supplied) PLDT, however, refused to implement said policy, contending that it applies to administrative cases only and not to strike-related cases such as the ones involving Suico, et al..66 We are unable to see the difference. As pointed out by the CA in G.R. No. 163793, while it is true that Systems Practice No. 94-016 relates to administrative cases, PLDT failed to prove that a termination proceeding arising from strike-related violence is not an administrative case. If by administrative case, PLDT refers to cases arising from violation of company rules and regulations, then the proceedings against Suico, et al. were of that nature for the notices sent to said employees accused them not just of breach of Art. 264 of the Labor Code but also of behavior prejudicial to company operations and violative of the company code of conduct.67 The termination proceedings against Suico, et al. were therefore administrative in nature, subject to the requirements of Systems Practice No. 94-016. To repeat, the requirements of due process by which to test the validity of the procedure adopted by PLDT in dismissing Suico, et al. are those embodied in Art. 277 (b) of the Labor Code, Rule XXII of the Implementing Rules of Book V and Systems Practice No. 94-016. Apparently, PLDT complied with the two-notice requirement of due process. The first notices sent to Suico, et al. set out in detail the nature and circumstances of the violations imputed to them, required them to explain their side and expressly warned them of the possibility of their dismissal should their explanation be found wanting. The last notices informed Suico, et al. of the decision to terminate their employment and cited the evidence upon which the decision was based.68 These two notices would have sufficed had it not been for the existence of Systems Practice No. 94-016. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of his counsel or union representative, if he so desires. Suico, et al. exercised their option under Systems Practice No. 94-016 by requesting that a formal hearing be conducted and that they be given copies of sworn statements and other pertinent documents to enable them to prepare for the hearing.69 This option is part of their right to due process. PLDT is bound to comply with the Systems Practice. Yet, instead of respecting the option exercised by Suico, et al., PLDT in G.R. No. 146762 arbitrarily disregarded the same and insisted that Suico, et al. submit their written answers first before their request for formal hearing can be entertained. 70 In G.R. No. 153584 and G.R. No. 163793, PLDT straightaway declared Mariano and Borje to have waived the right to be heard and, based on the available evidence, decided the cases against them. 71 Clearly, such refusal by PLDT to conduct a hearing was unreasonable and arbitrary as it defeated the exercise by Suico, et al. of an option which, by virtue of Systems Practice No. 94-016, was a component of their right to due process. The impairment of their option constituted an impairment of their right to due process. All told, the procedure adopted by PLDT in dismissing Suico, et al. fell short of the requirements of due process. It should be emphasized, however, that, consistent with our ruling in Agabon, 72 the procedural deficiency in the dismissal of Suico, et al. did not affect the validity or effectivity of the dismissal as the substantive bases thereof were never put in issue. 73 Thus, the April 12, 2002 CA Decision in G.R. No. 163793 was erroneous as it declared the dismissal of Borje illegal merely for failure of PLDT to observe due process. The CA should have affirmed the validity of the dismissal of Borje and awarded him nominal damages for the impairment of his statutory right to due process. WHEREFORE, the petitions in G.R. Nos. 146762 and 153584 are PARTLY GRANTED. The assailed Decisions of the Court of Appeals dated September 22, 2000 and February 7, 2002, respectively, are AFFIRMED with MODIFICATION to the effect that Culver B. Suico, Teresa D. Ceniza, Ronald R. Dacut and Benigno Mariano, Jr. are each awarded nominal damages in the amount of P30,000.00. The petition in G.R. No. 163793 is GRANTED. The Decision dated April 12, 2002 of the Court of Appeals is REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated January 26, 2001 and the Resolution of the National Labor Relations Commission dated September 28, 2001 are REINSTATED with MODIFICATION that Ernesto Borje is awarded nominal damages in the amount of P30,000.00. Costs against PLDT. G.R. No. 153192 January 30, 2009

DEALCO FARMS, INC., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), CHIQUITO BASTIDA, and ALBERT CABAN, Respondents. DECISION NACHURA, J.: Under review are Resolutions1 of the Court of Appeals (CA) in CA-G.R. SP No. 68972 denying due course to and dismissing petitioner Dealco Farms, Inc.s petition for certiorari. Petitioner is a corporation engaged in the business of importation, production, fattening and distribution of live cattle for sale to meat dealers, meat traders, meat processors, canned good manufacturers and other dealers in Mindanao and in Metro Manila. Petitioner imports cattle by the boatload from Australia into the ports of General Santos City, Subic, Batangas, or Manila. In turn, these imported cattle are transported to, and housed in, petitioners farms in Polomolok, South Cotabato, or in Magalang, Pampanga, for fattening until the cattle individually reach the market weight of 430 to 450 kilograms. Respondents Albert Caban and Chiquito Bastida were hired by petitioner on June 25, 1993 and October 29, 1994, respectively, as escorts or "comboys" for the transit of live cattle from General Santos City to Manila. Respondents work entailed tending to the cattle during transportation. It included feeding and frequently showering the cattle to prevent dehydration and to develop heat resistance. On the whole, respondents ensured that the cattle would be safe from harm or death caused by a cattle fight or any such similar incident. Upon arrival in Manila, the cattle are turned over to and received by the duly acknowledged buyers or customers of petitioner, at which point, respondents work ceases. For every round trip travel which lasted an average of 12 days, respondents were each paid P1,500.00. The 12-day period is occasionally extended when petitioners customers are delayed in receiving the cattle. In a month, respondents usually made two trips.

On October 15, 1999, respondents Bastida and Caban, together with Ramon Maquinsay and Roland Parrocha, filed a Complaint for illegal dismissal with claims for separation pay with full backwages, salary differentials, service incentive leave pay, 13th month pay, damages, and attorneys fees against petitioner, Delfin Alcoriza2 and Paciano Danilo Ramis3 before the National Labor Relations Commission (NLRC), Sub-Regional Arbitration Branch No. XI, General Santos City. Although the four complainants collectively filed a case against petitioner, Maquinsay and Parrocha never appeared in any of the conferences and/or hearings before the Labor Arbiter. Neither did they sign the verification page of complainants position paper. Most importantly, Maquinsay and Parrocha executed affidavits in favor of petitioner praying for the dismissal of the complaint insofar as they were concerned. It appears that, on August 19, 1999, respondents were told by a Jimmy Valenzuela, a hepe de viaje, that he had been instructed by Ramis to immediately effect their replacement. Valenzuela proffered no reason for respondents replacement. Respondents repeated attempts to see and meet with Ramis, as well as to write Alcoriza, proved futile, compelling them to file an illegal dismissal case against petitioner and its officers. In all, respondents alleged in their position paper that: (1) they were illegally dismissed, as they never violated any of petitioners company rules and policies; (2) their dismissal was not due to any just or authorized cause; and (3) petitioner did not observe due process in effecting their dismissal, failing to give them written notice thereof. Thus, respondents prayed for money claims, i.e., salary differentials, service incentive leave pay, cost of living allowance (COLA) and 13th month pay.lavvphi1.ne+ Petitioner, however, paints a different picture. Petitioner asserts that the finished cattle are sold to traders and middlemen who undertake transportation thereof to Manila for distribution to the wet markets. In fact, according to petitioner, the buyers and end-users of their finished cattle actually purchase the cattle as soon as they are considered ready for the market. Petitioner claims that once the finished cattle are bought by the buyers, these buyers act separately from, and independently of, petitioners business. In this regard, the buyers themselves arrange, through local representatives, for the (a) hauling from petitioners farm to the port area; (b) shipment of the finished cattle to Manila; and (c) escort or "comboy" services to feed and water the cattle during transit. In its position paper, petitioner relates only one instance when it engaged the services of respondents as "comboys." Petitioner maintains that their arrangement with respondents was only on a "per-trip" or "per-contract" basis to escort cattle to Manila which contemplated the cessation of the engagement upon return of the ship to the port of origin the General Santos City port. Petitioner further narrates that sometime in 1998, and well into 1999, its import of cattle from Australia substantially decreased due to the devalued dollar. Consequently, petitioner was forced to downsize, and the sale and shipments to Manila were drastically reduced. Thus, petitioner and/or its buyers no longer retained escort or "comboy" services. Ultimately, petitioner denies the existence of an employer-employee relationship with respondents. Petitioner posits that: (a) respondents are independent contractors who offer "comboy" services to various shippers and traders of cattle, not only to petitioner; (b) in the performance of work on board the ship, respondents are free from the control and supervision of the cattle owner since the latter is interested only in the result thereof; (c) in the alternative, respondents can only be considered as casual employees performing work not necessary and desirable to the usual business or trade of petitioner, i.e., cattle fattening to market weight and production; and (d) respondents likewise failed to complete the one-year service period, whether continuous or broken, set forth in Article 2804 of the Labor Code, as petitioners shipments were substantially reduced in 1998-1999, thereby limiting the escort or "comboy" activity for which respondents were employed. On June 30, 2000, the Labor Arbiter found that respondents were employees of petitioner, thus: [Petitioner] admits having engaged the services of [respondents] as caretakers or "comboys" (convoys) though it qualifies that it was on a "per trip" or "per contract" basis. It also admits paying their remuneration of P1,500.00 per trip. It tacitly admits having terminated [respondents] services when it said that [respondents] were among the group of escorts who were no longer accommodated due to the decrease in volume of imports and shipments. [Petitioner] also undoubtedly exercised control and supervision over [respondents] work as caretakers considering that the value of the cattle shipped runs into hundreds of thousands of pesos. The preparation of the cattle for shipment, manning and feeding them prior to and during transit, and making a report upon return to General Santos City to tally the records of the cattle shipped out versus cattle that actually reached Manila are certainly all in accordance with [petitioners] instructions. Thus, all the four elements in the determination of an employer-employee relationship being present, [x x x] [respondents] were, therefore, employees of [petitioner]. x x x [Respondents] also performed activities which are usually necessary or desirable in the usual business or trade of [petitioner] (Art. 280, Labor Code). [Petitioners] contention, to the contrary, is erroneous. Transporting the cattle to its main market in Manila is an essential and component aspect of [petitioners] operation. As held by [the NLRCs] Fifth Division in one case: Complainants task of escorting the livestock shipped to Manila, taking care of the livestock in transit, is an activity which is necessary and desirable in the usual business or trade of respondent. It is of judicial notice that the bulk of the market for livestock of big livestock raisers such as respondent is in Manila. Hogs do not swim, they are shipped. When in transit (usually two-and-one-half days) they do not queue to the mess hall, they are fed. x x x The caretaker is a component of the business, a part of the scheme of the operation. (NFL and Ricardo Garcia v. Bibiana Farms, Inc., NLRC CA No. XI-065089-99 (rab-xi-0150026-98); prom. April 28, 2000). More, it also appears that [respondents] had rendered service for more than one year doing the same task repeatedly, thus, even assuming they were casual employees they may be considered regular employees with respect to the activity in which they were employed and their employment shall continue while such activity exists (last par. of Art. 280). [Respondents], in fact, were hired on October 29, 1994 (Bastida) and June 25, 1993 (Caban), a fact which [petitioner] dismally failed to refute. Given the foregoing, [petitioners] contention that [respondents] were independent contractors and free lancers deserves little consideration. Its argument that its usual trade or business (importation/production and fattening) ends in General Santos City, and does not include transporting the cattle, does not persuade us. [Petitioners] witnesses tried to corroborate [its] contention that [respondents] also offered their services to various shippers and traders of cattle, not only to [petitioner]. Former complainants Maquinsay and Parrocha mentioned the names of these traders/buyers or shippers as Lozano Farms, Bibiana Farms and other big cattle feedlot farms in SOCSARGEN (Annexes "A" and "E," [petitioners] position paper.) But not a modicum of evidence was adduced to prove payment of [respondents] services by any of these supposed traders or that [respondents] received instructions from them. There is also no record that shows that the trader/s actually shipped livestock and engaged the services of caretakers.5 Accordingly, the Labor Arbiter granted respondents claim for separation pay, COLA and union service fees. The Labor Arbiter awarded respondents: (a) separation pay of one month for every year of service; (b) COLA, as petitioner failed to prove payment thereof or its exemption therefrom; and (c) union service fees fixed at 10% of the total monetary award. The Labor Arbiter computed respondents total monetary awards as follows:

NAME Chiquito Bastida Albert Caban

SEPARATION PAY P15,000.00 18,000.00 Plus 10% Union Service Fees

COLA P2,400.00 2,400.00

SUB-TOTAL P17,400.00 20,400.00

P37,800.00 3,780.00 TOTAL -----P41,580.006 However, the Labor Arbiter denied respondents claim for backwages, 13th month pay, salary differential, service incentive leave pay and damages, to wit: But we deny the "claim" for backwages which was merely inserted in the prayer portion of [respondents] position paper. Reasons are abundant why we decline to grant the same. In their complaint, [respondents] prayed for separation pay (not reinstatement with consequent backwages) thereby indicating right from the start that they do not want to work with [petitioner] again. More importantly[,] during the conference held on January 6, 2000, [petitioner] manifested its willingness to reinstate [respondents] to their former work as [comboys] under the same terms and conditions but [respondents] answered that they do not want to return to work and instead are asking for payment of their separation pay. Finally[,] [respondents] do not dispute that [petitioners] downsizing of its escorts in 1999 was due to a legitimate cause, i.e., dollar devaluation. Also to go are [respondents] labor standard claims for 13th month pay and service incentive leave pay as well as the claim for damages. We also deny the "claim" for salary differentials. [Respondents] are not entitled to their claims for 13th month pay and service incentive leave pay because they were paid on task basis. The claim for damages is denied for lack of factual and legal basis as there is no showing that respondent acted in bad faith in downsizing the number of its caretakers. It even appears that the same is due to a legitimate cause. The "claim" for salary differentials is denied on two grounds: (1) [these are] not prayed for in their complaint; and (2) for lack of merit. It takes not more than 3 days for the Gen. Santos-Manila trip. Even if we include counting the return trip that would be total of six (6) days to the maximum. [Respondents] were paid P1,500.00 per trip. Or, since they made an average of 2 trips/month they were paid P3,000.00 for a twelve (12) days work (or the equivalent of P250.00/day).7 On appeal to the NLRC, the Fifth Division affirmed the Labor Arbiters ruling on the existence of an employer-employee relationship between the parties and the total monetary award of P41,580.00 representing respondents separation pay, COLA and union service fees. The NLRC declared: After a judicious review of the records of this case, we found no cogent reason to disturb the findings of the branch. The presence of the four (4) elements in the determination of an employer-employee relationship has been clearly established by the facts and evidence on record, starting with the admissions of [petitioner] who acknowledged the engagement of [respondents] as escorts of their cattles shipped from General Santos to Manila, and the compensation of the latter at a fee of P1,500.00 per trip. The dates claimed by [respondents] that they were engaged remain not disputed by [petitioner] as observed by the branch. The element of control, jurisprudentially considered the most essential element of the four, has not been demolished by any evidence to the contrary. The branch has noticed that the preparation of the shipment of cattle, manning and feeding them while in transit, and making a report upon their return to General Santos that the cattle shipped and which reached Manila actually tallied were all indicators of instructions, supervision and control by [petitioner] on [respondents] performance of work as escorts for which they were hired. This we agree on all four[s]. The livestock shipment would cost thousands of pesos and the certainty of it reaching its destination would be the only thing any operator would consider at all [time] and under all circumstances. Nothing more, nothing less. It is illogical for [petitioner] to argue that the shipment was not necessary [or] desirable to their business, as their business was mainly livestock production, because they were undeniably the owners of the cattle escorted by [respondents]. Should losses of a shipment occur due to [respondents] neglect these would still be [petitioners] loss, and nobody elses. At this point, we emphasize the fact that even on appeal [petitioner] declines to refute, by way of evidence, the finding of the branch that they failed to prove the payment of [respondents] services by any of the supposed traders, or that said traders actually shipped livestock. This is the point where the case of NFL v. Bibiana Farms cited by [petitioner] differs from the instant case in that bills of lading issued to, thus, in the name of the hog shippers were submitted as proof that said shippers engaged, compensated and supervised the escorts or convoys in their work, and not the hog raisers.8 Undaunted, petitioner filed a petition for certiorari before the CA. As previously adverted to, the CA denied due course and dismissed the petition for the following procedural flaws: 1) other material portions of the record referred to in the petition are not attached thereto such as the Complaint for illegal dismissal and position papers of the parties, in violation of Sec. 3, Rule 46 of the 1997 Rules of Civil Procedure; and 2) there is no written explanation why personal service was not resorted to, as required under Sec. 11, Rule 13, Ibid. 9 Petitioners motion for reconsideration was, likewise, denied by the appellate court. Hence, this appeal positing the following issues: 1. Whether the CA gravely abused its discretion when it dismissed the petition for certiorari based on technical rules of procedure. 2. Whether the NLRC gravely abused its discretion when it affirmed the Labor Arbiters ruling on the existence of an employer-employee relationship between the parties. 3. Corollary thereto, whether the NLRC gravely erred when it affirmed the Labor Arbiters finding that respondents were illegally dismissed by petitioner and the consequent award of money claims to respondents. At the outset, we observe that petitioner raises extraneous issues which were obviously not passed upon by appellate court when the latter denied due course and dismissed outright the petition for certiorari. As such, the instant petition for review on certiorari directly assails the NLRCs decision which mainly involves factual issues, such as whether respondents were employees of petitioner and if they are entitled to their money claims. Petitioner is unconcerned with the CAs reasons for dismissing the petition and, in fact, declares that the dismissal was done with grave abuse of discretion for sticking to the provisions of the Rules of Court a "mere technicality" as petitioner cavalierly puts it. Petitioner asseverates that the CA dismissal "defeat[s] substantial justice considering that [it] has a strong cause of action against [respondents]." In all, petitioner submits that it had faithfully complied with Section

11, Rule 13 of the Rules of Court by submitting an explanation and a duly notarized affidavit of service of Maria Fe Sobrevega. Petitioner likewise points out that the Explanation for the resort to service of the petition for certiorari via registered mail is found on page 30 thereof. Curiously, however, only the copy of the same document submitted to the CA lacked an Explanation. We completely agree with the appellate courts forthright dismissal of the petition for certiorari. Even if we are to overlook petitioners account on the curious case of the missing Explanation only in the CAs copy of the petition, petitioners non-compliance with the requisites for the filing a petition for certiorari remains. We detect petitioners ploy to sidestep a more fatal procedural error, i.e., the failure to attach copies of all pleadings and documents relevant and pertinent to the petition for certiorari set forth in paragraph 2, Section 1, Rule 65 of the Rules of Court which reads: The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. 10 Corollary thereto, the second paragraph of Section 6, Rule 65, the first paragraph of Section 2, Rule 56, and the last paragraph of Section 3, Rule 46 respectively read: SEC. 6. Order to comment. x x x In petitions for certiorari before the Supreme Court and the Court of Appeals, the provisions of Section 2, Rule 56, shall be observed. x x x SEC. 2. Rules applicable. The procedure in original cases for certiorari, prohibition, mandamus, quo warranto and habeas corpus shall be in accordance with the applicable provisions of the Constitution, laws, and Rules 46, 48, 49, 51, 52 and this Rules[.] x x x SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. x x x The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. Quite apparent from the foregoing is that the CA did not err, much less commit grave abuse of discretion, in denying due course to and dismissing the petition for certiorari for its procedural defects. Petitioners failure to attach copies of all pleadings and documents relevant and pertinent to its petition for certiorari warranted the outright dismissal thereof. Petitioner, however, invokes the righteous ends of substantial justice as would exempt it from adherence to procedural rules. Petitioner claims that the merits of its case necessitate a liberal interpretation of the Rules of Court leading to a reversal of the appellate courts outright dismissal of its petition. Regrettably, upon an evaluation of the merits of the petition, we do not find cause to disturb the findings of the Labor Arbiter, affirmed by the NLRC, which are supported by substantial evidence. The well-entrenched rule is 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 supported by substantial evidence. 11 Section 5, Rule 133 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."1avvphi1.ne+ Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases. 12 We may take cognizance of and resolve factual issues only when the findings of fact and conclusions of law of the Labor Arbiter are inconsistent with those of the NLRC and the CA. 13 In the case at bench, both the Labor Arbiter and the NLRC were one in their conclusion that respondents were not independent contractors, but employees of petitioner. In determining the existence of an employer-employee relationship between the parties, both the Labor Arbiter and the NLRC examined and weighed the circumstances against the four-fold test which has the following elements: (1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control the employees conduct, or the so-called "control test."14 Of the four, the power of control is the most important element. More importantly, the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. 15 Naturally, both petitioners and respondents claims are on opposite poles. Respondents aver that they were regular employees of petitioner, designated as escorts or "comboys" for the latters cattle. Petitioner, on the other hand, denies that claim, and simultaneously asserts that respondents are free lance escorts who offer their services to the buyers, middlemen and traders of petitioner. Petitioner further asserts that its business is only confined to the fattening of cattle and their sale once they reach the required market weight. According to petitioner, its business does not include the shipment of cattle, which is undertaken by the middlemen, traders and buyers, who, as owners thereof, engage respondents services to care for the cattle while in transit. Thus, petitioner ultimately asserts that respondents, at that juncture, were under the control and supervision of these middlemen, traders and buyers. To support the foregoing contentions, petitioner simply presents the affidavits of Maquinsay and Parrocha, original complainants before the Labor Arbiter, praying for the withdrawal of the complaint for illegal dismissal insofar as they are concerned. Maquinsay and Parrocha both allege that their engagement with petitioner is on a "per-trip" or "per-contract" basis, and that they and their fellow "comboys" or escorts, herein respondents, did not offer their services to petitioner alone. Paying no heed to petitioners narration of the contemplated arrangement with respondents, the Labor Arbiter pointed out the following: [Maquinsay and Parrocha, petitioners] witnesses, tried to corroborate [petitioners] contention that complainants also offered their services to various shippers and traders of cattle, not only to [petitioner]. Former complainants Maquinsay and Parrocha mentioned the names of these traders/buyers or shippers as Lozano Farms, Bibiana Farms and other big cattle feedlot farms in SOCSARGEN (Annexes "A" and "B", [petitioners] position paper). But not a modicum of evidence was adduced to prove payment of [respondents] services by any of these supposed traders or that [respondents] received instructions from them. There is also no record that the trader/s actually shipped livestock and engaged the services of caretakers.16 Echoing the same observation, the NLRC declared, thus: At this point, we emphasize the fact that even on appeal [petitioner] decline to refute, by way of evidence, the finding of the branch that they failed to prove the payment of [respondents] services by any of the supposed traders, or that said traders actually shipped livestock. This is the point where the case of NFL v. Bibiana Farms cited by [petitioner] differ from the instant case in that bills of lading issued to, thus, in the name of the hog shippers were submitted as proof that said shippers engaged, compensated and supervised the escorts or convoys in their work, and not the hog raisers. 17

Yet, petitioner is adamant that its lack of documentary evidence should not be taken against it since Maquinsay and Parrocha, two of the original complainants, attest to the nature of a "comboys" or escorts work. Significantly, Maquinsays and Parrochas affidavits proffer no reason why, in the first place, they filed, along with herein respondents, the complaint for illegal dismissal against petitioner. Maquinsay and Parrocha made an absolute turnaround and retracted their previous claim of regular employee status without proof to support their allegations as against the claim of the remaining complainants, herein respondents. Conveniently, for its purposes, petitioner claims that Maquinsays and Parrochas affidavits "substantiate the claim of petitioner that indeed shipping arrangements and accommodation of escorts, which are informal in nature and, thus, unrecorded, are under the responsibility, control and supervision of the buyers and traders." Essentially, petitioner insists that the affidavits of Maquinsay and Parrocha should bear more weight than the claims of respondents in their complaint and position paper. We reject petitioners self-serving contention. Having failed to substantiate its allegation on the relationship between the parties, we stick to the settled rule in controversies between a laborer and his master that doubts reasonably arising from the evidence should be resolved in the formers favor.18 The policy is reflected in no less than the Constitution,19 Labor Code20 and Civil Code.21 Moreover, petitioners other contention that the shipment and the escort of live cattle is not part of its business, thus, at most, respondents may only be considered as casual employees, likewise fails to persuade. First. Petitioner failed to disprove respondents claim that they were hired by petitioner as "comboys" from 1993 and 1994, respectively. In fact, petitioner admits that respondents were engaged, at one point, as "comboys," on a "per trip" or "per contract" basis. This assertion petitioner failed anew to substantiate. Noteworthy is the fact that Maquinsays and Parrochas affidavit merely contain a statement that the offer of their services as "comboys" or escorts was not limited to petitioner alone. The affidavits simply aver that they, including herein respondents, were engaged by Dealco on a "per trip" basis, which commenced upon embarkation on a ship for Manila and terminated upon their return to the port of origin. Maquinsay and Parrocha did not state that respondents engagement by petitioner was on a one-time basis. As a result, petitioners claim remains an unsubstantiated and bare-faced allegation. Second. Even assuming that respondents task is not part of petitioners regular course of business, this does not preclude their attainment of regular employee status. Article 280 of the Labor Code explicitly 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 project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.22 Undoubtedly, respondents were regular employees of petitioner with respect to the escort or "comboy" activity for which they had been engaged since 1993 and 1994, respectively, without regard to continuity or brokenness of the service. Lastly, considering that we have sustained the Labor Arbiters and the NLRCs finding of an employer-employee relationship between the parties, we likewise sustain the administrative bodies finding of respondents illegal dismissal. Accordingly, we are not wont to disturb the award of separation pay, claims for COLA and union service fees fixed at 10% of the total monetary award, as these were based on the finding that respondents were dismissed without just or authorized cause. WHEREFORE, the petition is DENIED. The Resolution dated July 29, 2001 of the NLRC in NLRC CA No. M-005974-2000 (RAB-11-10-50453-99) is hereby AFFIRMED. Costs against the petitioner. SO ORDERED. SECOND DIVISION JOSE C. DELVALLE, JR. andADOLFOC.ALEMANIA, Petitioners, G.R. No. 170977 Present: QUISUMBING, J., Chairperson, CARPIO MORALES, TINGA, VELASCO, JR. and BRION, JJ. Promulgated: Respondent. April 16, 2009 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION QUISUMBING, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Decision[1] dated June 17, 2005 and the Resolution[2] dated January 3, 2006 of the Court of Appeals in CA-G.R. SP No. 81536. The appellate court had set aside the Orders dated September 17, 2003,[3] October 2, 2003[4] and November 13, 2003[5] of the Regional Trial Court (RTC), Branch 55 of Lucena City dismissing the complaint for injunction and damages filed by

- versus -

FRANCIS B. DY,

L.C. Big Mak Burger, Inc. and respondent Francis Dy against petitioners Labor Arbiter Jose C. Del Valle, Jr. and National Labor Relations Commission (NLRC) Sheriff Adolfo C. Alemania. The instant petition stemmed from a complaint[6] for illegal dismissal and monetary benefits filed by Clea Deocariza in May 2001 against L.C. Big Mak Burger, Inc.[7] and its Human Resources Officer for Bicol, Teresa Israel.[8] In said labor case, it appears that despite many opportunities given to L.C. Big Mak and Israel, the two did not file their position papers. Labor Arbiter Jose C. Del Valle, Jr. even had the notices and orders sent to L.C. Big Maks head office in Lucena City, addressed to its owner, respondent Francis Dy,[9] when those sent to the Naga branch were returned. Still, they failed to comply. On November 12, 2001, Labor Arbiter Del Valle rendered a Decision[10] in favor of Deocariza. The dispositive portion reads: WHEREFORE, premises considered, judgment is hereby rendered against respondent, ordering the latter to reinstate complainant to her former position without loss of seniority right[s] and to pay complainant the total amount of FORTY-EIGHT THOUSAND SEVEN HUNDRED FIFTY-SIX PESOS and 72/100 (P48,756.72), representing the latters backwages, salary differential pay, unpaid salary, overtime pay, night shift differential and cash bond, as computed above. SO ORDERED.[11] A copy of the decision was sent by registered mail to Dy and Israel at L.C. Big Maks Lucena City office. Based on the registry return receipt, it was received on November 22, 2001.[12] Since no appeal was made, the decision became final and executory. Consequently, a Writ of Execution[13] was issued on December 17, 2001. On February 18, 2002, L.C. Big Mak and Israel filed a Motion to Quash Writ of Execution.[14] They claimed that they were completely unaware of the decision and the writ of execution. They contended that the notices and orders requiring them to file a position paper were not made known to their officers in Lucena City. They further stated that had their legal department in Lucena City been informed of said orders, the requisite position paper would have been filed. On April 4, 2002, Labor Arbiter Del Valle issued an Order[15] denying the Motion to Quash Writ of Execution. He ruled that L.C. Big Mak and Israel waived their opportunity to submit their position paper by their continued inaction on the lawful orders and notices sent to them. He further ruled that the judgment can now be executed as a matter of right, it being final and executory. On April 24, 2003, acting on a motion for issuance of a writ of execution by Deocariza, Labor Arbiter Del Valle issued an Order[16] directing all parties to appear on May 12, 2003 for a pre-execution conference. However, only Deocariza attended the conference. On May 13, 2003, Labor Arbiter Del Valle issued a Writ of Execution[17] directed to NLRC Sheriff Adolfo C. Alemania, the pertinent portion of which reads: NOW THEREFORE, you are hereby ordered to go to the premises of respondent BIG MA[K] BURGER, Incorporated/Tess [I]srael at Lucena City together with the complainant and let her be reinstated to her former position without loss of seniority right[s] and collect from said respondent the amount of P48,756.72, representing complainants backwages, salary differential, unpaid salary, overtime pay, night shift and cash bond and to turn over the said amount to this Branch for further disposition. In case you fail to collect the said amount in CASH from the respondent, you are hereby directed to cause the satisfaction of the same to be made out of movable goods or chattels in the possession of the respondent or any other person or entity holding in behalf of the respondent or in the absence thereof, from immovable property not exempt from execution.[18] xxxx On June 16, 2003, Sheriff Alemania went to L.C. Big Maks head office in Lucena City and levied upon 33 sacks of flour and three sacks of refined sugar.[19] On July 11, 2003, L.C. Big Mak and Dy filed a complaint[20] for injunction and damages with the RTC of Lucena City. They claimed that the labor arbiters decision is void on the grounds of lack of jurisdiction, grave abuse of discretion, violation of due process and denial of substantial justice. They questioned the order for Dy to

reinstate Deocariza despite the fact that she is not his employee and despite her resignation and the release or quitclaim she executed. They alleged that Israel is a franchisee of L.C. Big Mak and Deocariza was one of her employees in the L.C. Big Mak Naga branch which negates the existence of an employer-employee relationship between Dy and Deocariza. They prayed that the properties levied upon be released. On September 17, 2003, the trial court dismissed the complaint on the ground of lack of jurisdiction as it questions the propriety of actions taken by the labor tribunal.[21] Dy and L.C. Big Mak filed a motion for reconsideration,[22] but the same was treated as not filed for failure to include the requisite notice of hearing and explanation why service was not done personally, and for failure of their counsel to indicate his Roll Number on the motion.[23] Dy and L.C. Big Mak filed their motion for reconsideration after effecting the necessary corrections but said motion was denied for lack of merit.[24] Dy, without including L.C. Big Mak as petitioner, then filed a petition for certiorari with the Court of Appeals asking that the orders of the RTC be set aside and the complaint be tried on the merits. He imputed grave abuse of discretion on the part of the RTC when it did not only dismiss the provisional remedy sought but also dismissed the main action for damages without a valid ground. The Court of Appeals granted the petition and disposed as follows: WHEREFORE, the petition for certiorari is GRANTED. The assailed orders of the trial court, dated 17 September 2003, 2 October 2003, and 13 November 2003, respectively, are hereby SET ASIDE. This case is remanded to the trial court for further proceedings. SO ORDERED.[25] The appellate court found Dy a stranger to the labor case. It ruled that contrary to the trial courts stand, deciding Dys complaint on the merits does not encroach upon the jurisdiction of the labor tribunal. It held that the power of the NLRC to execute its judgment extends only to properties unquestionably belonging to the judgment debtor. Thus, if the sheriff levies upon the assets of a third person in which the judgment debtor has no interest, then the sheriff is acting beyond the limits of his authority and is amenable to control and correction by a court of competent jurisdiction in a separate and independent action. Labor Arbiter Del Valle and Sheriff Alemania filed a motion for reconsideration[26] which the Court of Appeals denied. Thus, they come before us raising the following issues: I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, TENTH DIVISION, CORRECTLY APPLIED SECTION 4, RULE 65 OF THE RULES OF COURT IN GRANTING RESPONDENTS BELATED PETITION FOR CERTIORARI. II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, TENTH DIVISION, ERRED IN GRANTING THE PETITION FOR CERTIORARI AND NULLIFYING THE ORDERS OF THE REGIONAL TRIAL COURT DATED SEPTEMBER 17, OCTOBER 2 AND NOVEMBER 13, 2003 WHICH WERE ISSUED IN ACCORDANCE WITH EXISTING LAW AND APPLICABLE JURISPRUDENCE AND MERITS OF THE CASE THEREON. III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS, TENTH DIVISION EXCEEDED ITS JURISDICTION AND ERRED [WHEN IT DISREGARDED THE LAW,] DOCTRINES AND PRINCIPLES IN LAW PARTICULARLY ON: 1. APPEAL; 2. JURISDICTION OVER LABOR DISPUTES; 3. DETERMINATION OF JURISDICTION OVER THE SUBJECT MATTER AND NATURE OF THE ACTION; 4. THIRD PARTY CLAIM[;] AND 5. APPLICATION OF JURISPRUDENCE ON A PARTICULAR CASE WHEN IT ISSUED THE ASSAILED DECISION AND RESOLUTION.[27] Stated simply, the issues to be resolved are: (1) whether the Court of Appeals erred in giving due course to Dys petition despite its procedural infirmities and (2) whether the trial court had jurisdiction over Dys complaint for injunction and damages. Petitioners contend that the appellate court should not have given due course to Dys petition since the proper remedy was appeal and not certiorari. And even if certiorari were the proper remedy, petitioners aver that the petition was still dismissible as it was filed beyond the 60-day period. They also contend that the trial court was correct in dismissing the complaint for lack of jurisdiction. They argue that the complaint was actually in the nature of a Motion to Quash Writ of Execution and with respect to the acts of the labor tribunal, a case growing out of a labor dispute, as the acts complained of were

incidents of the execution.[28] Respondent Dy counters that the appellate courts decision correctly addressed the evasion of the positive duty incumbent upon the trial court to decide [the complaint] according to its merits as the complaint for nullification of wrongful levy with damages was properly within its jurisdiction to resolve.[29] We resolve to grant the instant petition. It was erroneous for the Court of Appeals to have granted the petition and ordered the remand of the case to the trial court for further proceedings. It is established that the Court of Appeals has jurisdiction to entertain original actions for certiorari under Rule 65 of the Rules of Court, including those in which the jurisdiction of any lower court is in issue.[30] It bears emphasis, however, as provided in the Rule itself, that one requisite to a petition for certiorari is that there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law[31] from the acts of the respondent tribunal. In the instant case, the remedy of appeal from the order of the RTC dismissing the complaint for injunction and damages was available to respondent Dy and it was a plain, speedy and adequate remedy. Hence, following the general rule, the questioned petition for certiorari filed by respondent Dy before the Court of Appeals, was not proper. As an exception, the remedy of certiorari may be successfully invoked, both in cases wherein an appeal does not lie and in those wherein the right to appeal having been lost with or without the appellants negligence, where the court has no jurisdiction to issue the order or decision which is the subject matter of the remedy.[32] In the instant case, however, as will be seen from the discussion below, the RTC acted within its jurisdiction in issuing its questioned orders. It is axiomatic that what determines the nature of an action and hence, the jurisdiction of a court, are the allegations of the complaint and the character of the relief sought.[33] This Court has held that: The rule is that, the nature of an action and the subject matter thereof, as well as which court or agency of the government has jurisdiction over the same, are determined by the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed for, whether or not the complainant/plaintiff is entitled to any or all of such reliefs.[34] Although the complaint filed by Dy before the trial court was for injunction and damages, it does not only challenge the legality or propriety of the writ of execution, but also attacks the validity of the decision of the Labor Arbiter. The complaint was in effect a motion to quash the writ of execution of a decision and an action to annul the decision itself, both of which were rendered in an illegal dismissal case. It is thus a case properly within the jurisdiction of the labor arbiter and not the trial court, since the subject matter of Dys complaint is an incident of a labor case. Jurisprudence abound confirming the rule that regular courts have no jurisdiction to act on labor cases or various incidents arising therefrom, including the execution of decisions, awards or orders.[35] Jurisdiction to try and adjudicate such cases pertains exclusively to the proper labor official concerned under the Department of Labor and Employment. To hold otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice.[36] In a desperate attempt to remove his complaint from the labor arbiters jurisdiction, Dy claims that he is not a party to the illegal dismissal case. He alleges that Deocarizas employer is Israel, whom he claims is a mere franchisee of L.C. Big Mak. Dy argues that being a stranger to the case, the levying of his properties is a clear denial of substantial justice and due process. And to further make it appear that his complaint is separate and independent from the labor case, Dy, upon reaching the appellate stage, dropped L.C. Big Mak as co-petitioner and was already claiming that the 33 sacks of flour and three sacks of

sugar are his personal properties. These contentions, however, deserve no credit. Dy failed to substantiate his allegation that Israel is a mere franchisee and that Israel is Deocarizas real employer. On the contrary, it was established that Israel is also just an employee of L.C. Big Mak because of an illegal dismissal complaint filed by Israel against L.C. Big Mak and a memorandum issued by the latter to Israel as one of its Human Resource Officers. Also, contrary to Dys claims, he is not a stranger to the illegal dismissal case. He is a party in his capacity as owner of L.C. Big Mak, the employer sued in the illegal dismissal case. Moreover, Dy cannot claim sole ownership of the properties levied upon by simply dropping L.C. Big Mak as petitioner. In his complaint filed before the RTC, he categorically admitted under oath that the levied properties belong to L.C. Big Mak and not to him. Thus, he is now estopped from contending otherwise. Even assuming that Dy is a stranger or third party to the labor case, jurisdiction over his claim still lies with the labor arbiter. Dy should have filed his thirdparty claim before the labor arbiter from whom the writ of execution originated before instituting a civil case.[37] The NLRCs Manual on Execution of Judgment[38] provides for the mechanism for third-party claimants to assert their claims over properties levied upon by the sheriff pursuant to an order or decision of the NLRC or labor arbiter. WHEREFORE, the petition is GRANTED. The Decision dated June 17, 2005 and Resolution dated January 3, 2006 of the Court of Appeals in CA-G.R. SP No. 81536 are REVERSED and SET ASIDE. The Orders dated September 17, 2003, October 2, 2003 and November 13, 2003 of the Regional Trial Court, Branch 55 of Lucena City dismissing the complaint filed by L.C. Big Mak Burger, Inc. and respondent Francis Dy are hereby REINSTATED. SO ORDERED. G.R. No. 158311 November 17, 2004

HUNTINGTON STEEL PRODUCTS, INC. & SERAFIN NG, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, JAIME ORBASE, REGINO JARDIN, PAULINO JAVIERTO, EDGAR JARDIN, RAMON N. BANA, ANTONIO MAGNO, RICO JARDIN, CELESTINO JARDIN, JR., PEDRO JARDIN, JR., AGUSTIN GASTON, NAZARIO JAVIERTO, JR., and MARCIANO GLINOGO, respondents.

DECISION

QUISUMBING, J.: For review on certiorari is the Decision,1 dated January 22, 2003, in CA-G.R. SP No. 72665, and the Resolution,2 dated May 14, 2003, denying petitioners Motion for Reconsideration. The Court of Appeals affirmed the Order dated April 15, 2002 of the National Labor Relations Commission (NLRC) Second Division reversing the Labor Arbiters Resolution dated June 13, 2001, which had dismissed herein private respondents complaint for lack of a certificate of non-forum shopping. The facts of the case are as follows: The instant petition stemmed from the illegal dismissal complaint with claim for damages initiated by respondent Jaime Orbase and eleven others against petitioners Huntington Steel Products, Inc. and its President, Serafin Ng. Private respondents filed an amended complaint to include Everson Metal Works as a party, being the original employer of private respondents before it changed its business name to Huntington Steel Products, Inc. Thereafter, private respondents filed their position paper. Petitioners also filed their Position Paper with Motion to Dismiss assailing the private respondents failure to comply with the requirements of Revised Circular No. 28-913 as implemented by Supreme Court Administrative Circular No. 04-94.4 They averred that the Complaint which private respondents filed in the Arbitration Branch of the NLRC lacked a certification of non-forum shopping. Petitioners Motion to Dismiss was granted by the Labor Arbiter in his Decision 5 dated June 13, 2001. Private respondents appealed before the NLRC. On April 15, 2002, the NLRC promulgated an Order which reversed the Decision of the Labor Arbiter as follows:

We are [of] the considered view therefore that defects should be corrected in the proceedings below, for which reason, the instant case should be remanded to the Arbitration Branch of origin. WHEREFORE, the instant case is hereby remanded to the Labor Arbiter of origin for further appropriate proceedings. SO ORDERED.6 Aggrieved, petitioners moved for a reconsideration of the Order, but public respondent in its Resolution dated July 11, 2002, denied the motion. Petitioners filed a petition for certiorari before the Court of Appeals, alleging that the NLRC gravely abused its discretion amounting to a lack or an excess of jurisdiction when the NLRC remanded the case for further proceedings, in effect reversing the Labor Arbiters Order, dated July 13, 2001. Petitioners insisted that the requirement of certification of non-forum shopping is mandatory, and non-compliance with said requirement warrants the dismissal of the case. On January 22, 2003, the Court of Appeals promulgated its Decision denying the petition, to wit: WHEREFORE, FOREGOING PREMISES CONSIDERED, this petition is DENIED. The Order dated April 15, 2002 of public respondent in NLRC CA No. 028847-01 (NLRC NCR-00-03-02297-99) entitled "Jaime Orbase, et al. vs. Huntington Steel Product and/or Serafin Ng President" is affirmed in toto. SO ORDERED.7 The Court of Appeals reasoned that the NLRC correctly applied Article 221 of the Labor Code.8 The appellate court said that decisions in labor cases must be supported by substantial evidence, and disregarding technical rules of procedure, will not sacrifice the fundamental requisites of due process.9 Citing the landmark case of The New Valley Times Press v. NLRC,10 the Court of Appeals held that technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working-man. The Court of Appeals declared that private respondents should not be faulted because in filing their complaint, they merely filled up the blanks in the complaint form provided for them in the docket section of the Arbitration Branch. The Court of Appeals added that private respondents should not be punished for whatever defects found in the form provided by the Commission. 11 Dissatisfied, petitioners filed the instant petition praying that we resolve the question: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN DISREGARDING SUPREME COURT CIRCULAR NO. 04-94.12 Simply stated, the issue is whether the case should be dismissed for failure to comply with Supreme Court Administrative Circular No. 04-94 on certification of non-forum shopping. Petitioners claim that although technical rules of procedure in labor cases are not to be strictly applied, such cases must nevertheless be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice. Petitioners contend that the certification of non-forum shopping as required by Supreme Court Administrative Circular No. 04-94 is mandatory even in labor cases. It should accompany pleadings filed before the NLRC, since the NLRC is a quasi-judicial agency. According to the petitioners, failure to comply with the Circular warrants dismissal because the defect cannot be cured by amendment of the complaint, and the proper remedy was to file another complaint instead of an appeal. Although jurisprudence allowed substantial compliance with the requirement, the inclusion of the statement of non-forum shopping in the respondents position paper, according to petitioners, was not substantial compliance. Petitioners further contend that the failure to comply with the requirement rendered the complaint a mere scrap of paper, and the Labor Arbiter could not have acquired jurisdiction over the case. Private respondents, for their part, claim that they had complied with the requirement of certification of non-forum shopping upon filing of their Position Paper. The inclusion of the certificate of non-forum shopping in the Position Paper was the best way to comply with the required undertaking under the Circular because the complaint form supplied by the Labor Arbiter did not contain such undertaking. When they filed the complaint they merely filled up the blanks therein. We note that the cited complaint was filed before the NLRC Resolution No. 01-02 amended the NLRC Rules of Procedure.13 The NLRC Rules of Procedure now requires a declaration of non-forum shopping in the complaint. But this is not to say that the certificate of non-forum shopping was not required then. At the time the complaint was filed, the same was subject to Supreme Court Administrative Circular No. 04-94, now Section 5 of Rule 7 of the Rules of Court. 14 We have established in previous cases15 that compliance with the Circular was mandatory even in labor cases. In the landmark case of Maricalum Mining Corp. v. NLRC16 we held that: The certificate of non-forum shopping as provided by this Court Circular 04-94 is mandatory and should accompany pleadings filed before the NLRC. Court Circular No. 04-94 is clear and needs no further interpretation, viz: "the following requirements, in addition to those in pertinent provisions of the Rules of Court and other existing circulars, shall be strictly complied with in the filing of complaints, petitions, applications or other initiatory pleadings in all courts and agencies other than the Supreme Court and the Court of Appeals, and shall be subject to the sanctions provided hereunder: "1. The plaintiff, petitioner, applicant or principal party seeking relief in the complaint, petition, application or other initiatory pleading shall certify under oath in such original pleading, or in a sworn certificate annexed thereto and simultaneously therewith, to the truth of the following facts and undertakings: (a) he has not heretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding which is either pending or may have been terminated, he must state the status thereof; and (d) if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or any other tribunal or agency, he undertakes to report the fact within five (5) days therefrom to the court or agency wherein the original pleading and sworn certification contemplated herein have been filed. . "2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or other initiatory pleading, upon motion and after hearing." The NLRC is a quasi-judicial agency, hence, initiatory pleadings filed before it should be accompanied by a certificate of non-forum-shopping.

Nevertheless, in Loyola v. Court of Appeals,17 we held that substantial compliance with the requirement of certificate of non-forum shopping is sufficient. Here, we find that the certification of non-forum shopping was not filed simultaneously with the initiatory pleading. But we held that the filing of the certification within the reglementary period of filing the initiatory pleading was substantial compliance. The fact that the Circular requires strict compliance merely underscores its mandatory nature that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances.18 Additionally, Supreme Court Administrative Circular No. 04-94, now Section 5, Rule 7 of the Rules of Civil Procedure, must be construed and applied to achieve its purpose. The Supreme Court promulgated the Circular to promote and facilitate the orderly administration of justice. It should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective which is the goal of all rules of procedure - that is, to achieve substantial justice as expeditiously as possible.19 Meanwhile, in the case of Melo v. Court of Appeals, 20 we said that in those cases where we excused non-compliance with the requirements of Supreme Court Administrative Circular No. 04-94, there were special circumstances or compelling reasons that made the strict application of said Circular clearly unjustified. The rule is crystal clear and plainly unambiguous that the certification is a mandatory part of an initiatory pleading, i.e., the complaint, and its omission may be excused only upon manifest equitable grounds proving substantial compliance therewith. 21 In the present case, the respondents reasoned that they failed to comply with the Circular because the complaint form supplied by the Labor Arbiter did not contain the required undertaking. They simply filled up the blanks therein. Hence, we agree with the Court of Appeals conclusion that respondents should not be faulted for not having the certification of non-forum shopping in their complaint.22 The strict application of the Circular in the instant case, in our view, would be contrary to the goals of the Rules of Civil Procedure that is, "just, speedy and inexpensive disposition of every action and proceeding."23 Technical rules of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working-man.24 Thus, the NLRC did not err in ordering that the corrections be made at the Arbitration Branch, since the NLRC has also the power to order corrections in case of irregularities in the proceedings before it. 25 Anent petitioners contention that the Labor Arbiter did not acquire jurisdiction over the case for failure to include the certificate of non-forum shopping in the complaint, this contention finds no support in law and in jurisprudence. Supreme Court Administrative Circular No. 04-94 is mandatory but not jurisdictional, as jurisdiction over the subject or nature of the cause of action is conferred by law.26 WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated January 22, 2003 and its Resolution dated May 14, 2003 as well as the Order of National Labor Relations Commission (Second Division) dated April 15, 2002 and its Resolution dated July 11, 2002 are hereby AFFIRMED. Costs against petitioners. SO ORDERED.