Labor Standard 2

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G.R. No. 152894 August 17, 2007

CENTURY CANNING CORPORATION, Petitioner,vs.COURT OF APPEALS and GLORIA C. PALAD, Respondents.

D E C I S I O N

This is a petition for review1 of the Decision

2 dated 12 November 2001 and the Resolution dated 5 April 2002 of the Court of

Appeals in CA-G.R. SP No. 60379.

The Facts

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad (Palad) as "fish cleaner" at petitioner‘s tunaand sardines factory. Palad signed on 17 July 1997 an apprenticeship agreement

3 with petitioner. Palad received an

apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its apprenticeship program for approval to theTechnical Education and Skills Development Authority (TESDA) of the Department of Labor and Employment (DOLE). On26 September 1997, the TESDA approved petitioner‘s apprenticeship program.

4

According to petitioner, a performance evaluation was conducted on 15 November 1997, where petitioner gave Palad arating of N.I. or "needs improvement" since she scored only 27.75% based on a 100% performance indicator. Furthermore,

according to the performance evaluation, Palad incurred numerous tardiness and absences. As a consequence, petitionerissued a termination notice

5 dated 22 November 1997 to Palad, informing her of her termination effective at the close of

business hours of 28 November 1997.

Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-payment of pro-rated 13th month pay forthe year 1997.

On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but ordered petitioner to pay Palad her lastsalary and her pro-rated 13th month pay. The dispositive portion of the Labor Arbiter‘s decision reads:

WHEREFORE, premises considered, judgment is hereby rendered declaring that the complaint for illegal dismissal filed bythe complainant against the respondents in the above-entitled case should be, as it is hereby DISMISSED for lack of merit.However, the respondents are hereby ordered to pay the complainant the amount of ONE THOUSAND SIX HUNDRED

THIRTY-TWO PESOS (P1,632.00), representing her last salary and the amount of SEVEN THOUSAND TWO HUNDREDTWENTY EIGHT (P7,228.00) PESOS representing her prorated 13th month pay.

All other issues are likewise dismissed.

SO ORDERED.6

On appeal, the National Labor Relations Commission (NLRC) affirmed with modification the Labor Arbiter‘s decision, thus:

WHEREFORE, premises considered, the decision of the Arbiter dated 25 February 1999 is hereby MODIFIED in that, inaddition, respondents are ordered to pay complainant‘s backwages for two (2) months in the amount of P7,176.00 (P138.75x 26 x 2 mos.). All other dispositions of the Arbiter as appearing in the dispositive portion of his decision are AFFIRMED.

SO ORDERED.7

Upon denial of Palad‘s motion for reconsideration, Palad filed a special civil action for certiorari with the Court of Appeals.On 12 November 2001, the Court of Appeals rendered a decision, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the questioned decision of the NLRC is hereby SET ASIDE and a new one entered,to wit:

(a) finding the dismissal of petitioner to be illegal;

(b) ordering private respondent to pay petitioner her underpayment in wages;

(c) ordering private respondent to reinstate petitioner to her former position without loss of seniority rights and to payher full backwages computed from the time compensation was withheld from her up to the time of herreinstatement;

(d) ordering private respondent to pay petitioner attorney‘s fees equivalent to ten (10%) per cent of the monetaryaward herein; and

(e) ordering private respondent to pay the costs of the suit.

SO ORDERED.8

The Ruling of the Court of Appeals

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The Court of Appeals held that the apprenticeship agreement which Palad signed was not valid and binding because it wasexecuted more than two months before the TESDA approved petitioner‘s apprenticeship program. The Court of Appealscited Nitto Enterprises v. National Labor Relations Commission ,

9 where it was held that prior approval by the DOLE of the

proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly enteredinto.

The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of Appeals ruled that petitioner failed toshow that Palad was properly apprised of the required standard of performance. The Court of Appeals likewise held thatPalad was not afforded due process because petitioner did not comply with the twin requirements of notice and hearing.

The Issues

Petitioner raises the following issues:

1. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PRIVATERESPONDENT WAS NOT AN APPRENTICE; and

2. WHETHER THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN HOLDING THAT PETITIONERHAD NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE OFPRIVATE RESPONDENT.

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The Ruling of the Court

The petition is without merit.

Registra t ion and Approv al by the TESDA of Apprent icesh ip Program Requi red Before Hir ing o f App rent ices

The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with anemployer .

11 One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to establish

apprenticeship standards for the protection of apprentices.12

In line with this objective, Articles 60 and 61 of the Labor Codeprovide:

ART. 60. Employment of apprentices. — Only employers in the highly technical industries may employ apprenticesand only in apprenticeable occupations approved by the Minister of Labor and Employment . (Emphasis supplied)

ART. 61. Contents of apprenticeship agreements. — Apprenticeship agreements, including the wage rates of apprentices,shall conform to the rules issued by the Minister of Labor and Employment. The period of apprenticeship shall not exceedsix months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no caseshall start below 75 percent of the applicable minimum wage, may be entered into only in accordance withapprenticeship programs duly approved by the Minister of Labor and Employment . The Ministry shall developstandard model programs of apprenticeship. (Emphasis supplied)

In Nitto Enterprises v. National Labor Relations Commission,13

the Court cited Article 61 of the Labor Code and held that anapprenticeship program should first be approved by the DOLE before an apprentice may be hired, otherwise the personhired will be considered a regular employee. The Court held:

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

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

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

The act of filing the proposed apprenticeship program with the Department of Labor and Employment is a preliminary steptowards its final approval and does not instantaneously give rise to an employer-apprentice relationship.

Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship program through theparticipation of employers, workers and government and non-government agencies" and "to establish apprenticeshipstandards for the protection of apprentices." To translate such objectives into existence, prior approval of the DOLE to anyapprenticeship program has to be secured as a condition sine qua non before any such apprenticeship agreement can befully enforced. The role of the DOLE in apprenticeship programs and agreements cannot be debased.

Hence, since the apprenticeship agreement between petitioner and private respondent has no force and effect in theabsence of a valid apprenticeship program duly approved by the DOLE, private respondent‘s assertion that he was hired notas an apprentice but as a delivery boy ("kargador" or "pahinante") deserves credence. He should rightly be considered as aregular employee of petitioner as defined by Article 280 of the Labor Code x x x. (Emphasis supplied )

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Republic Act No. 779615

(RA 7796), which created the TESDA, has transferred the authority over apprenticeship programsfrom the Bureau of Local Employment of the DOLE to the TESDA.

16 RA 7796 emphasizes TESDA‘s approval of the

apprenticeship program as a pre-requisite for the hiring of apprentices. Such intent is clear under Section 4 of RA 7796:

SEC. 4. Definition of Terms. — As used in this Act:

x x x

j) "Apprenticeship" training within employment with compulsory related theoretical instructions involving acontract between an apprentice and an employer on an approved apprenticeable occupation ;

k) "Apprentice" is a person undergoing training for an approved apprenticeable occupation during anestablished period assured by an apprenticeship agreement;

l) "Apprentice Agreement" is a contract wherein a prospective employer binds himself to train the apprentice whoin turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights,duties and responsibilities of each party;

m) "Apprenticeable Occupation" is an occupation officially endorsed by a tripartite body and approved forapprenticeship by the Authority [TESDA]; (Emphasis supplied)

In this case, the apprenticeship agreement was entered into between the parties before petitioner filed its apprenticeshipprogram with the TESDA for approval. Petitioner and Palad executed the apprenticeship agreement on 17 July 1997wherein it was stated that the training would start on 17 July 1997 and would end approximately in December 1997 .

17 On 25

July 1997, petitioner submitted for approval its apprenticeship program, which the TESDA subsequently approved on 26September 1997.

18 Clearly, the apprenticeship agreement was enforced even before the TESDA approved petitioner‘s

apprenticeship program. Thus, the apprenticeship agreement is void because it lacked prior approval from the TESDA.

The TESDA‘s approval of the employer‘s apprenticeship program is required before the employer is allowed to hireapprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly technical industriesmay employ apprentices and only in apprenticeable occupations.

19 Thus, under RA 7796, employers can only hire

apprentices for apprenticeable occupations which must be officially endorsed by a tripartite body and approved forapprenticeship by the TESDA.1avvphil This is to ensure the protection of apprentices and to obviate possible abuses byprospective employers who may want to take advantage of the lower wage rates for apprentices and circumvent the right of

the employees to be secure in their employment.

The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further emphasized bythe DOLE with the issuance of Department Order No. 68-04 on 18 August 2004. Department Order No. 68-04, whichprovides the guidelines in the implementation of the Apprenticeship and Employment Program of the government,specifically states that no enterprise shall be allowed to hire apprentices unless its apprenticeship program isregistered and approved by TESDA.

20

Since Palad is not considered an apprentice because the apprenticeship agreement was enfor ced before the TESDA‘sapproval of petitioner‘s apprenticeship program, Palad is deemed a regular employee performing the job of a "fish cleaner."Clearly, the job of a "fish cleaner" is necessary in petitioner‘s business as a tuna and sardines factory. Un der Article 280

21 of

the Labor Code, an employment is deemed regular where the employee has been engaged to perform activities which areusually necessary or desirable in the usual business or trade of the employer.

I l legal Termin ation o f Palad

We shall now resolve whether petitioner illegally dismissed Palad.

Under Article 27922

of the Labor Code, an employer may terminate the services of an employee for just causes23

or forauthorized causes.

24 Furthermore, under Article 277(b)

25 of the Labor Code, the employer must send the employee who is

about to be terminated, a written notice stating the causes for termination and must give the employee the opportunity to beheard and to defend himself. Thus, to constitute valid dismissal from employment, two requisites must concur: (1) thedismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and todefend himself .

26

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual absenteeism and poor efficiency ofperformance. Under Section 25, Rule VI, Book II of the Implementing Rules of the Labor Code, habitual absenteeism andpoor efficiency of performance are among the valid causes for which the employer may terminate the apprenticeshipagreement after the probationary period.

However, the NLRC reversed the finding of the Labor Arbiter on the issue of the legality of Palad‘s termination:

As to the validity of complainant‘s dismissal in her status as an apprentice, suffice to state that the findings of the Arbiter thatcomplainant was dismissed due to failure to meet the standards is nebulous. What clearly appears is that complainantalready passed the probationary status of the apprenticeship agreement of 200 hours at the time she was terminated on 28November 1997 which was already the fourth month of the apprenticeship period of 1000 hours. As such, under the Code,she can only be dismissed for cause, in this case, for poor efficiency of performance on the job or in the classroom for aprolonged period despite warnings duly given to the apprentice.
















































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We noted that no clear and sufficient evidence exist to warrant her dismissal as an apprentice during the agreedperiod. Besides the absence of any written warnings given to complainant reminding her of "poor performance,"respondents’ evidence in this respect consisted of an indecipherable or unauthenticated xerox of the performanceevaluation allegedly conducted on complainant. This is of doubtful authenticity and/or credibility, being not onlyincomplete in the sense that appearing thereon is a signature (not that of complainant) side by side with a dateindicated as "1/16/98". From the looks of it, this signature is close to and appertains to the typewritten position of"Division/Department Head", which is below the signature of complainant’s immediate superior who made theevaluation indicated as "11-15-97."

The only conclusion We can infer is that this evaluation was made belatedly, specifically, after the filing of the caseand during the progress thereof in the Arbitral level, as shown that nothing thereon indicate that complainant wasnotified of the results. Its authenticity therefor, is a big question mark, and hence lacks any credibility. Evidence, tobe admissible in administrative proceedings, must at least have a modicum of authenticity. This, respondents failedto comply with. As such, complainant is entitled to the payment of her wages for the remaining two (2) months of herapprenticeship agreement.

27 (Emphasis supplied)

Indeed, it appears that the Labor Arbiter‘s conclusion that petitioner validly terminated Palad was based mainly on theperformance evaluation allegedly conducted by petitioner. However, Palad alleges that she had no knowledge of theperformance evaluation conducted and that she was not even informed of the result of the alleged performance evaluation.Palad also claims she did not receive a notice of dismissal, nor was she given the chance to explain. According to petitioner,Palad did not receive the termination notice because Palad allegedly stopped reporting for work after being informed of theresult of the evaluation.

Under Article 227 of the Labor Code, the employer has the burden of proving that the termination was for a valid orauthorized cause.

28 Petitioner failed to substantiate its claim that Palad was terminated for valid reasons. In fact, the NLRC

found that petitioner failed to prove the authenticity of the performance evaluation which petitioner claims to have conductedon Palad, where Palad received a performance rating of only 27.75%. Petitioner merely relies on the performanceevaluation to prove Palad‘s inefficiency. It was likewise not shown that petitioner ever apprised Palad of the performancestandards set by the company. When the alleged valid cause for the termination of employment is not clearly proven, as inthis case, the law considers the matter a case of illegal dismissal.

29

Furthermore, Palad was not accorded due process. Even if petitioner did conduct a performance evaluation on Palad,petitioner failed to warn Palad of her alleged poor performance. In fact, Palad denies any knowledge of the performanceevaluation conducted and of the result thereof. Petitioner likewise admits that Palad did not receive the notice oftermination

30 because Palad allegedly stopped reporting for work. The records are bereft of evidence to show that petitioner

ever gave Palad the opportunity to explain and defend herself. Clearly, the two requisites for a valid dismissal are lacking inthis case.

WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.

SO ORDERED.

G.R. No. 187320 January 26, 2011

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners,vs.

APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN, Respondents.

For resolution is the petition for review on certiorar i1 assailing the decision

2 and the resolution

3 of the Court of Appeals (CA)

rendered on November 4, 2008 and March 25, 2009, respectively, in CA-G.R. SP. No. 99340.4

The Antecedents

The facts are summarized below.

In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim V. Costales, Alvin V. Almoite, JosephS. Sagun, Agosto D. Zaño, Domingo S. Alegria, Jr., Ronie Ramos, Edgar Villagomez, Melvin Pedregoza, Teofanes B.Chiong, Jr., Leonardo L. dela Cruz, Arnold A. Magalang, and Saturnino M. Mabanag filed several complaints for illegaldismissal, regularization, underpayment, nonpayment of wages and other money claims, as well as claims for moral and

exemplary damages and attorney‘s fees against the pe titioners Atlanta Industries, Inc. (Atlanta) and its President and ChiefOperating Officer Robert Chan. Atlanta is a domestic corporation engaged in the manufacture of steel pipes.

The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig, but were later transferred to Labor ArbiterDominador B. Medroso, Jr.

The complainants alleged that they had attained regular status as they were allowed to work with Atlanta for more than six(6) months from the start of a purported apprenticeship agreement between them and the company. They claimed that theywere illegally dismissed when the apprenticeship agreement expired.

In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their money claims becausethey were engaged as apprentices under a government-approved apprenticeship program. The company offered to hire












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them as regular employees in the event vacancies for regular positions occur in the section of the plant where they hadtrained. They also claimed that their names did not appear in the list of employees (Master List)

5 prior to their engagement

as apprentices.

On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at Pagwawalang Saysay before Labor Arbiter Cajilig.

The Compulsory Arbitration Rulings

On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to dela Cruz, Magalang, Zaño and Chiong,but found the termination of service of the remaining nine to be illegal.

6 Consequently, the arbiter awarded the dismissed

workers backwages, wage differentials, holiday pay and service incentive leave pay amounting to P1,389,044.57 in theaggregate.

Atlanta appealed to the National Labor Relations Commission (NLRC). In the meantime, or on October 10, 2006, Ramos, Alegria, Villagomez, Costales and Almoite allegedly entered into a compromise agreement with Atlanta.

7 The agreement

provided that except for Ramos, Atlanta agreed to pay the workers a specified amount as settlement, and to acknowledgethem at the same time as regular employees.

On December 29, 2006,8 the NLRC rendered a decision, on appeal, modifying the ruling of the labor arbiter, as follows: (1)

withdrawing the illegal dismissal finding with respect to Sagun, Mabanag, Sebolino and Pedregoza; (2) affirming the

dismissal of the complaints of dela Cruz, Zaño, Magalang and Chiong; (3) approving the compromise agreement enteredinto by Costales, Ramos, Villagomez, Almoite and Alegria, and (4) denying all other claims.

Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the decision, but the NLRC denied the motion in itsMarch 30, 2007

9 resolution. The four then sought relief from the CA through a petition for certiorari under Rule 65 of the

Rules of Court. They charged that the NLRC committed grave abuse of discretion in: (1) failing to recognize their prioremployment with Atlanta; (2) declaring the second apprenticeship agreement valid; (3) holding that the dismissal of Sagun,Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the compromise agreement involving Costales,Ramos, Villagomez, Almoite and Alegria.

The CA Decision

The CA granted the petition based on the following findings:10

1. The respondents were already employees of the company before they entered into the first and secondapprenticeship agreements – Almoite and Costales were employed as early as December 2003 and, subsequently,entered into a first apprenticeship agreement from May 13, 2004 to October 12, 2004; before this first agreementexpired, a second apprenticeship agreement, from October 9, 2004 to March 8, 2005 was executed. The same istrue with Sebolino and Sagun, who were employed by Atlanta as early as March 3, 2004. Sebolino entered into hisfirst apprenticeship agreement with the company from March 20, 2004 to August 19, 2004, and his secondapprenticeship agreement from August 20, 2004 to January 19, 2005. Sagun, on the other hand, entered into hisfirst agreement from May 28, 2004 to October 8, 2004, and the second agreement from October 9, 2004 to March 8,2005.

2. The first and second apprenticeship agreements were defective as they were executed in violation of the law andthe rules.

11 The agreements did not indicate the trade or occupation in which the apprentice would be trained;

neither was the apprenticeship program approved by the Technical Education and Skills Development Authority(TESDA).

3. The positions occupied by the respondents – machine operator, extruder operator and scaleman – are usuallynecessary and desirable in the manufacture of plastic building materials, the company‘s main business. Costales, Almoite, Sebolino and Sagun were, therefore, regular employees whose dismissals were illegal for lack of a just orauthorized cause and notice.

4. The compromise agreement entered into by Costales and Almoite, together with Ramos, Villagomez and Alegria,was not binding on Costales and Almoite because they did not sign the agreement.

The petitioners themselves admitted that Costales and Almoite were initially planned to be a part of the compromiseagreement, but their employment has been regularized as early as January 11, 2006; hence, the company did not pursuetheir inclusion in the compromise agreement.12

The CA faulted the NLRC for failing to appreciate the evidence regarding the respondents‘ prior employment with Atlanta.The NLRC recognized the prior employment of Costales and Almoite on Atlanta‘s monthly repor t for December 2003 for theCPS Department/Section dated January 6, 2004.

13 This record shows that Costales and Almoite were assigned to the

company‘s first shift from 7:00 a.m. to 3:00 p.m. The NLRC ignored Sebolino and Sagun‘s prior employment under thecompany‘s Production and Work Schedule for March 7 to 12, 2005 dated March 3, 2004 ,

14 as they had been Atlanta‘s

employees as early as March 3, 2004, with Sebolino scheduled to work on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., whileSagun was scheduled to work for the same period but from 7:00 p.m. to 7:00 a.m. The CA noted that Atlanta failed tochallenge the authenticity of the two documents before it and the labor authorities.










































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Atlanta and Chan moved for reconsideration, but the CA denied the motion in a resolution rendered on March 25, 2009.15

Hence, the present petition.

The Petition

Atlanta seeks a reversal of the CA decision, contending that the appellate court erred in (1) concluding that Costales, Almoite, Sebolino and Sagun were employed by Atlanta before they were engaged as apprentices; (2) ruling that a second

apprenticeship agreement is invalid; (3) declaring that the respondents were illegally dismissed; and (4) disregarding thecompromise agreement executed by Costales and Almoite. It submits the following arguments:

First. The CA‘s conclusion that the respondent workers were company employees before they were engaged as apprenticeswas primarily based on the Monthly Repor t

16 and the Production and Work Schedule for March 7-12, 2005,

17 in total

disregard of the Master List18

prepared by the company accountant, Emelita M. Bernardo. The names of Costales, Almoite,Sebolino and Sagun do not appear as employees in the Master List which "contained the names of all the persons whowere employed by and at petitioner."

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Atlanta faults the CA for relying on the Production and Work Schedule and the Monthly Report which were not sworn to, andin disregarding the Master List whose veracity was sworn to by Bernardo and by Alex Go who headed the company‘saccounting division. It maintains that the CA should have given more credence to the Master List.

Second. In declaring invalid the apprenticeship agreements it entered into with the respondent workers, the CA failed to

recognize the rationale behind the law on apprenticeship. It submits that under the law,

20

apprenticeship agreements arevalid, provided they do not exceed six (6) months and the apprentices are paid the appropriate wages of at least 75% of theapplicable minimum wage.

The respondents initially executed a five-month apprenticeship program with Atlanta, at the end of which, they "voluntarilyand willingly entered into another apprenticeship agreement with the petitioner for the training of a second skill"

21 for five

months; thus, the petitioners committed no violation of the apprenticeship period laid down by the law.

Further, the apprenticeship agreements, entered into by the parties, complied with the requisites under Article 62 of theLabor Code; the company‘s authorized representative and the respondents signed the agreements and these were ratifiedby the company‘s apprenticeship committee. The apprenticeship program itself was approved and certif ied by the TESDA.

22

The CA, thus, erred in overturning the NLRC‘s finding that the apprenticeship agreements were valid.

Third. There was no illegal dismissal as the respondent workers‘ tenure ended with the expiration of the apprenticeshipagreement they entered into. There was, therefore, no regular employer-employee relationship between Atlanta and therespondent workers.

The Case for Costales, Almoite, Sebolino and Sagun

In a Comment filed on August 6, 2009,23

Costales, Almoite, Sebolino and Sagun pray for a denial of the petition for beingprocedurally defective and for lack of merit.

The respondent workers contend that the petition failed to comply with Section 4, Rule 45 of the Rules of Court whichrequires that the petition be accompanied by supporting material portions of the records. The petitioners failed to attach tothe petition a copy of the Production and Work Schedule despite their submission that the CA relied heavily on thedocument in finding the respondent workers‘ prior employment with Atlanta. They also did not attach a copy of thecompromise agreement purportedly executed by Costales and Almoite. For this reason, the respondent workers submit thatthe petition should be dismissed.

The respondents posit that the CA committed no error in holding that they were already Atlanta‘s employees before theywere engaged as apprentices, as confirmed by the company‘s Production and Work Schedule .

24 They maintain that the

Production and Work Schedule meets the requirement of substantial evidence as the petitioners failed to question itsauthenticity. They point out that the schedule was prepared by Rose A. Quirit and approved by Adolfo R. Lope, head of thecompany‘s PE/Spiral Section. They argue that it was highly unlikely that the head of a production section of the companywould prepare and assign work to the complainants if the latter had not been company employees.

The respondent workers reiterate their mistrust of the Master List25

as evidence that they were not employees of thecompany at the time they became apprentices. They label the Master List as "self-serving, dubious and even if consideredas authentic, its content contradicts a lot of petitioner‘s claim and allegations,"

26 thus -

1. Aside from the fact that the Master List is not legible, it contains only the names of inactive employees. Eventhose found by the NLRC to have been employed in the company (such as Almoite, Costales and Sagun) do notappear in the list. If Costales and Almoite had been employed with Atlanta since January 11, 2006, as the companyclaimed,

27 their names would have been in the list, considering that the Master List accounts for all employees "as

of May 2006" – the notation carried on top of each page of the document.

2. There were no entries of employees hired or resigned in the years 2005 and 2006 despite the "as of May 2006"notation; several pages making up the Master List contain names of employees for the years 1999 - 2004.

3. The fact that Atlanta presented the purported Master List instead of the payroll raised serious doubts on theauthenticity of the list.























































7

In sum, the respondent workers posit that the presentation of the Master List revealed the "intention of the hereinpetitioner[s] to perpetually hide the fact of [their] prior employment."

28

On the supposed apprenticeship agreements they entered into, Costales, Almoite, Sebolino and Sagun refuse to accept theagreements‘ validity, contending that the company‘s apprenticeship program is merely a ploy "to continually deprive [them]of their rightful wages and benefits which are due them as regular employees. "

29 They submit the following "indubitable facts

and ratiocinations:"30

1. The apprenticeship agreements were submitted to TESDA only in 2005 (with dates of receipt on "1/4/05" &

"2/22/05"31 ), when the agreements were supposed to have been executed in April or May 2004. Thus, thesubmission was made long after the starting date of the workers‘ apprenticeship or even beyond the agreement‘scompletion/termination date, in violation of Section 23, Rule VI, Book II of the Labor Code.

2. The respondent workers were made to undergo apprenticeship for occupations different from those allegedlyapproved by TESDA. TESDA approved Atlanta‘s apprenticeship program on "Plastic Molder "

32 and not for extrusion

molding process, engineering, pelletizing process and mixing process.

3. The respondents were already skilled workers prior to the apprenticeship program as they had been employedand made to work in the different job positions where they had undergone training. Sagun and Sebolino, togetherwith Mabanag, Pedregoza, dela Cruz, Chiong, Magalang and Alegria were even given production assignments andwork schedule at the PE/Spiral Section from May 11, 2004 to March 23, 2005, and some of them were evenassigned to the 3:00 p.m. – 11:00 p.m. and graveyard shifts (11:00 p.m. – 7:00 a.m.) during the period.

33

4. The respondent workers were required to continue as apprentices beyond six months. The TESDA certificate ofcompletion indicates that the workers‘ apprenticeship had been completed after six months. Yet, they were sufferedto work as apprentices beyond that period.

Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally dismissed, as the reason for thetermination of their employment – notice of the completion of the second apprenticeship agreement – did not constituteeither a just or authorized cause under Articles 282 and 283 of the Labor Code.

Finally, Costales and Almoite refuse to be bound by the compromise agreement34

that Atlanta presented to defeat the twoworkers‘ cause of action. They claim that the supposed agreement is invalid as against them, principally because they didnot sign it.

The Court‘s Ruling

The procedural issue

The respondent workers ask that the petition be dismissed outright for the petitioners‘ failure to attach to the petition a copyof the Production and Work Schedule and a copy of the compromise agreement Costales and Almoite allegedly entered into— material portions of the record that should accompany and support the petition, pursuant to Section 4, Rule 45 of theRules of Court.

In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena35

where the Court addressed essentially thesame issue arising from Section 2(d), Rule 42 of the Rules of Court ,

36 we held that the phrase "of the pleadings and other

material portions of the record xxx as would support the allegation of the petition clearly contemplates the exercise ofdiscretion on the part of the petitioner in the selection of documents that are deemed to be relevant to the petition. Thecrucial issue to consider then is whether or not the documents accompanying the petition sufficiently supported theallegations therein."

37

As in Mariners, we find that the documents attached to the petition sufficiently support the petitioners‘ allegations. Theaccompanying CA decision

38 and resolution,

39 as well as those of the labor arbiter

40 and the NLRC,

41 referred to the parties‘

position papers and even to their replies and rejoinders. Significantly, the CA decision narrates the factual antecedents,defines the complainants‘ cause of action, and cites the arguments, including the evidence the parties adduced. If any, thedefect in the petition lies in the petitioners‘ failure to provide legible copies of some of the material documents mentioned ,especially several pages in the decisions of the labor arbiter and of the NLRC. This defect, however, is not fatal as thechallenged CA decision clearly summarized the labor tribunal‘s rulings. We, thus, find no procedural obstacle in resolvingthe petition on the merits.

The merits of the case

We find no merit in the petition. The CA committed no reversible error in nullifying the NLRC decision42

and in affirming thelabor arbiter‘s ruling,

43 as it applies to Costales, Almoite, Sebolino and Sagun. Specifically, the CA correctly ruled that the

four were illegally dismissed because (1) they were already employees when they were required to undergo apprenticeshipand (2) apprenticeship agreements were invalid.

The following considerations support the CA ruling.

First. Based on company operations at the time material to the case, Costales, Almoite, Sebolino and Sagun were alreadyrendering service to the company as employees before they were made to undergo apprenticeship. The company itselfrecognized the respondents‘ status through relevant operational records – in the case of Costales and Almoite, the CPS
































































8

monthly report for December 200344

which the NLRC relied upon and, for Sebolino and Sagun, the production and workschedule for March 7 to 12, 2005

45 cited by the CA.

Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first shift (7:00 a.m. to 3:00 p.m.) of theSection‘s work. The Production and Work Schedules, in addition to the one noted by th e CA, showed that Sebolino andSagun were scheduled on different shifts vis-à-vis the production and work of the company‘s PE/Spiral Section for theperiods July 5-10, 2004;

46 October 25-31, 2004;

47 November 8-14, 2004;

48 November 16-22, 2004;

49 January 3-9, 2005;

50

January 10-15, 2005;51

March 7-12, 200552

and March 17-23, 2005.53

We stress that the CA correctly recognized the authenticity of the operational documents, for the failure of Atlanta to raise achallenge against these documents before the labor arbiter, the NLRC and the CA itself. The appellate court, thus, found thesaid documents sufficient to establish the employment of the respondents before their engagement as apprentices.

Second. The Master List54

(of employees) that the petitioners heavily rely upon as proof of their position that therespondents were not Atlanta‘s employees, at the time they were engaged as apprentices, is unreliable and does n ot inspirebelief.

The list, consisting of several pages, is hardly legible. It requires extreme effort to sort out the names of the employeeslisted, as well as the other data contained in the list. For this reason alone, the list deserves little or no consideration. As therespondents also pointed out, the list itself contradicts a lot of Atlanta‘s claims and allegations, thus: it lists only the names ofinactive employees; even the names of those the NLRC found to have been employed by Atlanta, like Costales and Almoite,and those who even Atlanta claims attained regular status on January 11, 2006 ,

55 do not appear in the list when it was

supposed to account for all employees "as of May 6, 2006." Despite the "May 6, 2006" cut off date, the list contains noentries of employees who were hired or who resigned in 2005 and 2006. We note that the list contains the names ofemployees from 1999 to 2004.

We cannot fault the CA for ignoring the Master List even if Bernardo, its head office accountant, swore to its correctness andauthenticity.

56 Its substantive unreliability gives it very minimal probative value. Atlanta would have been better served, in

terms of reliable evidence, if true copies of the payroll (on which the list was based, among others, as Bernardo claimed inher affidavit) were presented instead.1âwphi1

Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering service to the company when they weremade to undergo apprenticeship (as established by the evidence) renders the apprenticeship agreements irrelevant as faras the four are concerned. This reality is highlighted by the CA finding that the respondents occupied positions such as

machine operator, scaleman and extruder operator - tasks that are usually necessary and desirable in Atlanta‘s usualbusiness or trade as manufacturer of plastic building materials.57

These tasks and their nature characterized the four asregular employees under Article 280 of the Labor Code. Thus, when they were dismissed without just or authorized cause,without notice, and without the opportunity to be heard, their dismissal was illegal under the law.

58

Even if we recognize the company‘s need to train its employees through apprenticeship, we can only consider the firstapprenticeship agreement for the purpose. With the expiration of the first agreement and the retention of the employees, Atlanta had, to all intents and purposes, recognized the completion of their training and their acquisition of a regularemployee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentionedin the agreement itself ,

59 is a violation of the Labor Code‘s implementing rules

60 and is an act manifestly unfair to the

employees, to say the least. This we cannot allow.

Fourth. The compromise agreement61

allegedly entered into by Costales and Almoite, together with Ramos, Villagomez and

Alegria, purportedly in settlement of the case before the NLRC, is not binding on Costales and Almoite because they did notsign it. The company itself admitted62

that while Costales and Almoite were initially intended to be a part of the agreement, itdid not pursue their inclusion "due to their regularization as early as January 11, 2006. "

63

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit.1âwphi1 The assailed decision andresolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Atlanta Industries, Inc.

SO ORDERED.

















































































9

G.R. No. 122917 July 12, 1999

MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P. PASCUAL, RAQUEL ESTILLER,ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O. AGDON GEORGE P. LIGUTAN JR., CELSO M. YAZAR,ALEX G. CORPUZ, RONALD M. DELFIN, ROWENA M. TABAQUERO, CORAZON C. DELOS REYES, ROBERT G.NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS, COCOY NOBELLO,DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q. MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG,VIOLETA G. MONTES, ALBINO TECSON, MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANIR. CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL DEL PILAR, MARGARET

CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL,PINKY BALOLOA, ELIZABETH VENTURA, GRACE S. PARDO and TIMOSA, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST COMPANY, respondents.

PANGANIBAN, J .:

The Magna Carta for Disabled Persons mandates that qualified disabled persons be granted the same terms and conditionsof employment as qualified able-bodied employees. Once they have attained the status of regular workers, they should beaccorded all the benefits granted by law, notwithstanding written or verbal contracts to the contrary. This treatments isrooted not merely on charity or accomodation, but on justice for all.

The Case

Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision

2 of the National Labor Relations

Commission (NLRC),3 which affirmed the August, 22 1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiter's

Decision disposed as follows:4

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

Also assailed is the August 4, 1995 Resolution5 of the NLRC, which denied the Motion for Reconsideration.

The Facts

The facts were summarized by the NLRC in this wise:6

Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired on various periodsfrom 1988 to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Countersthrough a uniformly worded agreement called "Employment Contract for Handicapped Workers".(pp. 68 & 69, Records) The full text of said agreement is quoted below:

EMPLOYMENT CONTRACT FOR

HANDICAPPED WORKERS

This Contract, entered into by and between:

FAR EAST BANK AND TRUST COMPANY, a universal banking corporation dulyorganized and existing under and by virtue of the laws of the Philippines, withbusiness address at FEBTC Building, Muralla, Intramuros, Manila, representedherein by its Assistant Vice President, MR. FLORENDO G. MARANAN,(hereinafter referred to as the "BANK");

-and-

—————, ————— years old, of legal age, ————, and residing at(hereinafter referred to as the ("EMPLOYEE").

WITNESSETH : That

WHEREAS, the BANK, cognizant of its social responsibility, realizes that there is aneed to provide disabled and handicapped persons gainful employment andopportunities to realize their potentials, uplift their socio-economic well being andwelfare and make them productive, self-reliant and useful citizens to enable themto fully integrate in the mainstream of society;

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



10

agencies [regarding] the possibility of hiring handicapped workers for thesepositions;

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

NOW, THEREFORE, for and in consideration of the foregoing premises and incompliance with Article 80 of the Labor Code of the Philippines as amended, theBANK and the EMPLOYEE have entered into this Employment Contract as follows:

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

2. The EMPLOYEE shall perform among others, the following duties andresponsibilities:

i. Sort out bills according to color;

ii. Count each denomination per hundred, eithermanually or with the aid of a counting machine;

iii. Wrap and label bills per hundred;

iv. Put the wrapped bills into bundles; and

v. Submit bundled bills to the bank teller forverification.

3. The EMPLOYEE shall undergo a training period of one (1) month, after whichthe BANK shall determine whether or not he/she should be allowed to finish theremaining term of this Contract.

4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per day,subject to adjustment in the sole judgment of the BANK, payable every 15th andend of the month.1âwphi1.nêt

5. The regular work schedule of the EMPLOYEE shall be five (5) days per week,from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE may berequired to perform overtime work as circumstance may warrant, for whichovertime work he/she [shall] be paid an additional compensation of 125% of hisdaily rate if performed during ordinary days and 130% if performed during Saturdayor [a] rest day.

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

i. Proportionate 13th month pay based on his basicdaily wage.

ii. Five (5) days incentive leave.

iii. SSS premium payment.

7. The EMPLOYEE binds himself/herself to abide [by] and comply with all theBANK Rules and Regulations and Policies, and to conduct himself/herself in amanner expected of all employees of the BANK.

8. The EMPLOYEE acknowledges the fact that he/she had been employed under a

special employment program of the BANK, for which reason the standard hiringrequirements of the BANK were not applied in his/her case. Consequently, theEMPLOYEE acknowledges and accepts the fact that the terms and conditions ofthe employment generally observed by the BANK with respect to the BANK'sregular employee are not applicable to the EMPLOYEE, and that therefore, theterms and conditions of the EMPLOYEE's employment with the BANK shall begoverned solely and exclusively by this Contract and by the applicable rules andregulations that the Department of Labor and Employment may issue in connectionwith the employment of disabled and handicapped workers. More specifically, theEMPLOYEE hereby acknowledges that the provisions of Book Six of the LaborCode of the Philippines as amended, particularly on regulation of employment andseparation pay are not applicable to him/her.



11

9. The Employment Contract shall be for a period of six (6) months or from —— to—— unless earlier terminated by the BANK for any just or reasonable cause. Anycontinuation or extension of this Contract shall be in writing and therefore thisContract will automatically expire at the end of its terms unless renewed in writingby the BANK.

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

In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another two (2); in 1990,nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, twenty-one (21). Their employment[s]were renewed every six months such that by the time this case arose, there were fifty-six (56) deaf-mutes who were employed by respondent under the said employment agreement. The last one wasThelma Malindoy who was employed in 1992 and whose contract expired on July 1993.

xxx xxx xxx

Disclaiming that complainants were regular employees, respondent Far East Bank and TrustCompany maintained that complainants who are a special class of workers — the hearing impairedemployees were hired temporarily under [a] special employment arrangement which was a result ofovertures made by some civic and political personalities to the respondent Bank; thatcomplainant[s] were hired due to "pakiusap" which must be considered in the light of the contextcareer and working environment which is to maintain and strengthen a corps of professionalstrained and qualified officers and regular employees who are baccalaureate degree holders fromexcellent schools which is an unbending policy in the hiring of regular employees; that in addition tothis, training continues so that the regular employee grows in the corporate ladder; that the idea ofhiring handicapped workers was acceptable to them only on a special arrangement basis; that itwas adopted the special program to help tide over a group of workers such as deaf-mutes like thecomplainants who could do manual work for the respondent Bank; that the task of counting andsorting of bills which was being performed by tellers could be assigned to deaf-mutes that thecounting and sorting of money are tellering works which were always logically and naturally partand parcel of the tellers' normal functions; that from the beginning there have been no separateitems in the respondent Bank plantilla for sortes or counters; that the tellers themselves already didthe sorting and counting chore as a regular feature and integral part of their duties (p. 97, Records);that through the "pakiusap" of Arturo Borjal, the tellers were relieved of this task of counting and

sorting bills in favor of deaf-mutes without creating new positions as there is no position either in therespondent or in any other bank in the Philippines which deals with purely counting and sorting ofbills in banking operations.

Petitioners specified when each of them was hired and dimissed, viz :7

NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed

1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93

2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94

3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93

4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94

5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-946. ALBERT HALLARE West 4-Jan-91 9-Jan-94

7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93

8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93

9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94

10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93

11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93

12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93

13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93

14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93

15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-9316. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93

17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93

18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93

19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93

20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93

21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93

22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93

23. JOSE E. SALES West 6-Aug-92 12-Oct-93

24. ISABEL MAMAUAG West 8-May-92 10-Nov-93

25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94



12

26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93

27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93

28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93

29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93

30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93

31. MARIA ISABEL B.CONCEPCION West 6-Sep-90 6-Feb-94

32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93

33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93

34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93

35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94

36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93

37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93

38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93

39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93

40. PINKY BALOLOA West 3-Jun-91 2-Dec-93

41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic]

42. GRACE S. PARDO West 4-Apr-90 13-Mar-94

43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93

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

9

The Ruling of the NLRC

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

We agree that Art. 280 is not controlling herein. We give due credence to the conclusion thatcomplainants were hired as an accommodation to [the] recommendation of civic oriented

personalities whose employment[s] were covered by . . . Employment Contract[s] with specialprovisions on duration of contract as specified under Art. 80. Hence, as correctly held by the Labor Arbiter a quo, the terms of the contract shall be the law between the parties.

10

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

Issues

In their Memorandum, petitioners cite the following grounds in support of their cause:

I. The Honorable Commission committed grave abuse of discretion in holding that the petitioners — money sorters and counters working in a bank — were not regular employees.

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

III. The Honorable Commission committed grave abuse of discretion in not applying the provisionsof the Magna Carta for the Disabled (Republic Act No. 7277), on proscription against discriminationagainst disabled persons.

11

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

This Court's Ruling

The petition is meritorious. However, only the employees, who worked for more than six months and whose contracts wererenewed are deemed regular. Hence, their dismissal from employement was illegal.

Preliminary Matter :

Propriety of Certiorari

Respondent Far East Bank and Trust Company argues that a review of the findings of facts of the NLRC is not allowed in apetition for certiorari . Specifically, it maintains that the Court cannot pass upon the findings of public respondent thatpetitioners were not regular employees.



13

True, the Court, as a rule, does not review the factual findings of public respondents in a certiorari proceeding. In resolvingwhether the petitioners have become regular employees, we shall not change the facts found by the public respondent. Ourtask is merely to determine whether the NLRC committed grave abuse of discretion in applying the law to the establishedfacts, as above-quoted from the assailed Decision.

Main Issue

Are Petitioners Regular Employee?

Petitioners maintain that they should be considered regular employees, because their task as money sorters and counterswas necessary and desirable to the business of respondent bank. They further allege that their contracts served merely topreclude the application of Article 280 and to bar them from becoming regular employees.

Private respondent, on the other hand, submits that petitioners were hired only as "special workers and should not in anyway be considered as part of the regular complement of the Bank."

12 Rather, they were "special" workers under Article 80

of the Labor Code. Private respondent contends that it never solicited the services of petitioners, whose employment wasmerely an "accommodation" in response to the requests of government officials and civic-minded citizens. They were toldfrom the start, "with the assistance of government representatives," that they could not become regular employees becausethere were no plantilla positions for "money sorters," whose task used to be performed by tellers. Their contracts wererenewed several times, not because of need "but merely for humanitarian reasons." Respondent submits that "as of thepresent, the "special position" that was created for the petitioners no longer exist[s] in private respondent [bank], after thelatter had decided not to renew anymore their special employment contracts."

At the outset, let it be known that this Court appreciates the nobility of private respondent's effort to provide employment tophysically impaired individuals and to make them more productive members of society. However, we cannot allow it to eludethe legal consequences of that effort, simply because it now deems their employment irrelevant. The facts, viewed in light ofthe Labor Code and the Magna Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of them,should be deemed regular employees. As such, they have acquired legal rights that this Court is duty-bound to protect anduphold, not as a matter of compassion but as a consequence of law and justice.

The uniform employment contracts of the petitioners stipulated that they shall be trained for a period of one month, afterwhich the employer shall determine whether or not they should be allowed to finish the 6-month term of the contract.Furthermore, the employer may terminate the contract at any time for a just and reasonable cause. Unless renewed inwriting by the employer, the contract shall automatically expire at the end of the term.1âwphi1.nêt

According to private respondent, the employment contracts were prepared in accordance with Article 80 of the Labor code,which provides;

Art. 80. Employment agreement . — Any employer who employs handicapped workers shall enterinto an employment agreement with them, which agreement shall include:

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

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

(c) The duration of employment period; and

(d) The work to be performed by handicapped workers.

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

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

13 however, justify the application of Article 280 of the

Labor Code.

Respondent bank entered into the aforesaid contract with a total of 56 handicapped workers and renewed the contracts of37 of them. In fact, two of them worked from 1988 to 1993. Verily, the renewal of the contracts of the handicapped workers

and the hiring of others lead to the conclusion that their tasks were beneficial and necessary to the bank. More important,these facts show that they were qualified to perform the responsibilities of their positions. In other words, their disability didnot render them unqualified or unfit for the tasks assigned to them.

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

Sec. 5. Equal Opportunity for Employment . — No disabled person shall be denied access toopportunities for suitable employment. A qualified disabled employee shall be subject to the sameterms and conditions of employment and the same compensation, privileges, benefits, fringebenefits, incentives or allowances as a qualified able bodied person.



14

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

Art. 280. Regular and Casual Employment . — The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreement of the parties, an employment shall bedeemed to be regular where the employee has been engaged to perform activities which areusually necessary or desirable in the usual business or trade of the employer, except where theemployment has been fixed for a specific project or undertaking the completion or termination of

which has been determined at the time of the engagement of the employee or where the work orservices to be performed is seasonal in nature and the employment is for the duration of theseason.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:Provided, That, any employee who has rendered at least one year of service, whether such serviceis continuous or broken, shall be considered as regular employee with respect to the activity inwhich he is employed and his employment shall continue while such activity exists.

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

in which this Court held:

The primary standard, therefore, of determining regular employment is the reasonable connectionbetween the particular activity performed by the employee in relation to the usual trade or businessof the employer. The test is whether the former is usually necessary or desirable in the usualbusiness or trade of the employer. The connection can be determined by considering the nature ofthe work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance isnot continuous and merely intermittent, the law deems repeated and continuing need for itsperformance as sufficient evidence of the necessity if not indispensibility of that activity to thebusiness. Hence, the employment is considered regular, but only with respect to such activity, andwhile such activity exist.

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

As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the pernicious practice of making permanentcasuals of our lowly employees by the simple expedient of extending to them probationary appointments, ad infinitum."

15

The contract signed by petitioners is akin to a probationary employment, during which the bank determined the employees'fitness for the job. When the bank renewed the contract after the lapse of the six-month probationary period, the employeesthereby became regular employees.

16 No employer is allowed to determine indefinitely the fitness of its employees.

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

17 these twenty-seven

petitioners are deemed illegally dismissed and therefore entitled to back wages and reinstatement without loss of seniorityrights and other privileges. 18 Considering the allegation of respondent that the job of money sorting is no longer availablebecause it has been assigned back to the tellers to whom it originally belonged,

18 petitioners are hereby awarded

separation pay in lieu of reinstatement.20

Because the other sixteen worked only for six months, they are not deemed regular employees and hence not entitled to thesame benefits.

Applicability of the

Brent Ruling

Respondent bank, citing Brent School v . Zamora 21

in which the Court upheld the validity of an employment contract with a

fixed term, argues that the parties entered into the contract on equal footing. It adds that the petitioners had in fact anadvantage, because they were backed by then DSWD Secretary Mita Pardo de Tavera and Representative Arturo Borjal.

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

Moreover, it must be emphasized that a contract of employment is impressed with public interest.22

Provisions of applicablestatutes are deemed written into the contract, and the "parties are not at liberty to insulate themselves and theirrelationships from the impact of labor laws and regulations by simply contracting with each other."

23 Clearly, the agreement



15

of the parties regarding the period of employment cannot prevail over the provisions of the Magna Carta for DisabledPersons, which mandate that petitioners must be treated as qualified able-bodied employees.

Respondent's reason for terminating the employment of petitioners is instructive. Because the Bangko Sentral ng Pilipinas(BSP) required that cash in the bank be turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,respondent resorted to nighttime sorting and counting of money. Thus, it reasons that this task "could not be done by deafmutes because of their physical limitations as it is very risky for them to travel at night."

24 We find no basis for this

argument. Travelling at night involves risks to handicapped and able-bodied persons alike. This excuse cannot justify thetermination of their employment.

Other Grounds Cited by Respondent

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

Equally unavailing are private respondent's arguments that it did not go out of its way to recruit petitioners, and that itsplantilla did not contain their positions. In L. T. Datu v . NLRC ,

25 the Court held that "the determination of whether

employment is casual or regular does not depend on the will or word of the employer, and the procedure of hiring . . . but onthe nature of the activities performed by the employee, and to some extent, the length of performance and its continuedexistence."

Private respondent argues that the petitioners were informed from the start that they could not become regular employees.In fact, the bank adds, they agreed with the stipulation in the contract regarding this point. Still, we are not persuaded. Thewell-settled rule is that the character of employment is determined not by stipulations in the contract, but by the nature of thework performed.

26 Otherwise, no employee can become regular by the simple expedient of incorporating this condition in

the contract of employment.

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

Art. 280 was emplaced in our statute books to prevent the circumvention of the employee's right tobe secure in his tenure by indiscriminately and completely ruling out all written and oral agreementsinconsistent with the concept of regular employment defined therein. Where an employee has beenengaged to perform activities which are usually necessary or desirable in the usual business of the

employer, such employee is deemed a regular employee and is entitled to security of tenurenotwithstanding the contrary provisions of his contract of employment.

xxx xxx xxx

At this juncture, the leading case of Brent School, Inc . v . Zamora proves instructive. As reaffirmed insubsequent cases, this Court has upheld the legality of fixed-term employment. It ruled that thedecisive determinant in "term employment" should not be the activities that the employee is calledupon to perform but the day certain agreed upon the parties for the commencement and terminationof their employment relationship. But this Court went on to say that where from the circumstances itis apparent that the periods have been imposed to preclude acquisition of tenurial security by theemployee, they should be struck down or disregarded as contrary to public policy and morals.

In rendering this Decision, the Court emphasizes not only the constitutional bias in favor of the working class, but also theconcern of the State for the plight of the disabled. The noble objectives of Magna Carta for Disabled Persons are not basedmerely on charity or accommodation, but on justice and the equal treatment of qualified persons, disabled or not. In thepresent case, the handicap of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of this statementis the repeated renewal of their employment contracts. Why then should they be dismissed, simply because they arephysically impaired? The Court believes, that, after showing their fitness for the work assigned to them, they should betreated and granted the same rights like any other regular employees.

In this light, we note the Office of the Solicitor General's prayer joining the petitioners' cause.28

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20, 1995 Decision and the August 4,1995 Resolution of the NLRC are REVERSED and SET ASIDE. Respondent Far East Bank and Trust Company is herebyORDERED to pay back wages and separation pay to each of the following twenty-seven (27) petitioners, namely, Marites

Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, AlbinoTecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, MargaretCecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, ElizabethVentura and Grace S. Pardo. The NLRC is hereby directed to compute the exact amount due each of said employees,pursuant to existing laws and regulations, within fifteen days from the finality of this Decision. No costs.1âwphi1.nêt

SO ORDERED.

G.R. No. 186070 April 11, 2011



16

CLIENTLOGIC PHILPPINES, INC. (now known as SITEL), JOSEPH VELASQUEZ, IRENE ROA, and RODNEY SPIRES, Petitioners,vs.BENEDICT CASTRO, Respondent.

D E C I S I O N

NACHURA, J .:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the September 1, 2008 Decision1 and the January 7, 2009 Resolution

2 of the Court of Appeals (CA), affirming with modification the November 29, 2007

resolution3 of the National Labor Relations Commission (NLRC), which held that respondent Benedict Castro was not

illegally dismissed. The CA, however, awarded respondent‘s money claims, viz.:

WHEREFORE, premises considered, the instant Petition is PARTLY GRANTED. The Resolutions dated 29 November 2007and 23 January 2008 of the National Labor Relations Commission (Third Division) in NLRC CN. RAB-CAR-02-0091-07 LACNO. 08-002207-07 are AFFIRMED with MODIFICATION in that the monetary awards of Executive Labor Arbiter Vito C.Bose in his Decision dated 29 June 2007, as computed in Annex "A" thereof, ONLY for holiday premiums of Php 16,913.35;service incentive leave pay Php8,456.65; overtime pay of Php 578,753.10; and rest day pay of Php 26,384.80 which(petitioners) shall jointly and solidarily pay to petitioner, are hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.

4

The second assailed issuance of the CA denied petitioners‘ motion for reconsideration.

The facts:

Respondent was employed by petitioner ClientLogic Philippines, Inc. (now known and shall hereafter be referred to asSITEL) on February 14, 2005 as a call center agent for its Bell South Account. After six (6) months, he was promoted to the"Mentor" position, and thereafter to the "Coach" position. A "Coach" is a team supervisor who is in charge of dealing withcustomer complaints which cannot be resolved by call center agents. In June 2006, he was transferred to the Dot Green Account.

During respondent‘s stint at the Dot Green Account, respondent noticed that some of the call center agents under him would

often make excuses to leave their work stations. Their most common excuse was that they would visit the company‘smedical clinic. To verify that they were not using the clinic as an alibi to cut their work hours, respondent sent an e-mail tothe clinic‘s personnel requesting for the details of the agents‘ alleged medical consultation. His request was denied on theground that medical records of employees are highly confidential and can only be disclosed in cases involving health issues,and not to be used to build any disciplinary case against them.

On October 11, 2006, respondent received a notice requiring him to explain why he should not be penalized for: (1) violatingGreen Dot Company‘s Policy and Procedure for Direct Deposit Bank Info Request when he accessed a customer‘s onlineaccount and then gave the latter‘s routing and reference numbers for direct deposit; and (2) gravely abusing his discretionwhen he requested for the medical records of his team members. Respondent did not deny the infractions imputed againsthim. He, however, justified his actuations by explaining that the customer begged him to access the account because shedid not have a computer or an internet access and that he merely requested for a patient tracker, not medical records.

In November 2006, a poster showing SITEL‘s organizational chart was posted on the company‘s bulletin board, butrespondent‘s name and picture were conspicuously missing, and the name and photo of a nother employee appeared in theposition which respondent was supposedly occupying.

On January 22, 2007, SITEL posted a notice of vacancy for respondent‘s position, and on February 12, 2007, he received aNotice of Termination. These events prompted him to file a complaint for illegal dismissal; non-payment of overtime pay, restday pay, holiday pay, service incentive leave pay; full backwages; damages; and attorney‘s fees before the Labor Arbiter(LA) against herein petitioners SITEL and its officers, Joseph Velasquez (Velasquez), Irene Roa (Roa), and Rodney Spires(Spires).

5

In their position paper ,6 petitioners averred that respondent was dismissed on account of valid and justifiable causes. He

committed serious misconduct which breached the trust and confidence reposed in him by the company. He was dulyfurnished the twin notices required by the Labor Code. Further, he is not entitled to overtime pay, rest day pay, night shiftdifferential, holiday pay, and service incentive leave pay because he was a supervisor, hence, a member of the managerialstaff.

In a decision dated June 29, 2007,7 the LA ruled in favor of respondent by declaring him illegally dismissed and ordering

petitioners to pay his full backwages and, in lieu of r einstatement, his separation pay. The LA further awarded respondent‘smoney claims upon finding that he was not occupying a managerial position. The decretal portion of the decision reads:

WHEREFORE, all premises duly considered, the (petitioners) are hereby found guilty of illegally dismissing (respondent). Assuch, (petitioners) shall be jointly and solidarily liable to pay (respondent) his full backwages from the date of his dismissal tothe finality of this decision, computed as of today at One Hundred Thirty Eight Thousand Seven Hundred Fifty Nine Pesosand 80/100 (P138,759.80) plus, Seven Hundred Sixty Three Thousand Two Hundred Forty Eight Pesos and 67/100(P763,248.67) representing his separation pay at one month pay for every year of service, holiday pay and service incentive

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17

leave pay for the three years prior to the filing of this case, overtime pay for six (6) hours daily, rest day and ten percent(10%) as attorney‘s fees.

All other claims are hereby dismissed for lack of evidence.

The computation of the foregoing monetary claims is hereto attached and made an integral part hereof as Annex "A."

SO ORDERED.8

Aggrieved, petitioners appealed to the NLRC, which, in its November 29, 2007 resolution,9 reversed and set aside the

decision of the LA by dismissing the complaint for lack of merit on the ground that responde nt‘s employment was terminatedfor a just cause. The NLRC failed to discuss the money claims.

On September 1, 2008, the CA affirmed the NLRC‘s finding that there was no illegal dismissal. Anent the money claims,however, the CA concurred with the LA‘s ruling.

10

Petitioners and respondent respectively moved for partial reconsideration, but their motions were denied in the CAResolution dated January 7, 2009.

11 From the said denial, only petitioners sought recourse with this Court through the

petition at bar. Respondent‘s failure to partially appeal the CA‘s Decision find ing him not illegally dismissed has nowrendered the same final and executory; hence, the instant petition shall traverse only the issue on money claims.

Petitioners argue in the main12 that, as a team supervisor, respondent was a member of the managerial staff; hence, he isnot entitled to overtime pay, rest day pay, holiday pay, and service incentive leave pay.

We deny the petition.

The petition hinges on the question of whether the duties and responsibilities performed by respondent qualify him as amember of petitioners‘ managerial staff. This is clearly a question of fact, the determination of which entails an evaluation ofthe evidence on record.

The alleged errors of the CA lengthily enumerated in the petition13

are essentially factual in nature and, therefore, outsidethe ambit of a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure. The Court does not try factssince such statutory duty is devolved upon the labor tribunals. It is not for this Court to weigh and calibrate pieces ofevidence otherwise adequately passed upon by the labor tribunals especially when affirmed by the appellate court .

14

Petitioners claim exception to the foregoing rule and assert that the factual findings of the LA and the NLRC were conflicting.This is not correct. The labor tribunals‘ decisions were at odds only with respect to the issue of illegal dismissal. Anent t hemoney claims issue, it cannot be said that their rulings were contradictory because the NLRC, disappointingly, did not makeany finding thereon and it erroneously construed that the resolution of the money claims was intertwined with thedetermination of the legality of respondent‘s dismissal. Nonetheless, the CA has already rectified such lapse when it made adefinitive review of the LA‘s factual findings on respondent‘s money claims. Agreeing with the LA, the CA held:

Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall notapply to managerial employees. Generally, managerial employees are not entitled to overtime pay for services rendered inexcess of eight hours a day.

Article 212 (m) of the Labor Code defines a managerial employee as "one who is vested with powers or prerogatives to laydown and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or disciplineemployees, or to effectively recommend such managerial actions.

In his Position Paper, (respondent) states that he worked from 8:00 p.m. to 10:00 a.m. or 4 p.m. to 12:00 p.m. of thefollowing day; he was also required to work during his restdays and during holidays but he was not paid; he was also notpaid overtime pay; night shift differentials, and service incentive leave. He was employed as call center agent on 14February 2005, then promoted as "Mentor" in August 2005, and again promoted to "Coach" position in September 2005,which was the position he had when he was terminated. A "coach" is a team supervisor who is in charge of dealing withcustomer complaints which could not be dealt with by call center agents, and if a call center agent could not meet the needsof a customer, he passes the customer‘s call to the "coach." Clearly, (respondent) is not a managerial employee as definedby law. Thus, he is entitled to his money claims.

As correctly found by Executive Labor Arbiter Bose:

Employees are considered occupying managerial positions if they meet all of the following conditions, namely:

1) Their primary duty consists of management of the establishment in which they are employed or of a departmentor subdivision thereof;

2) They customarily and regularly direct the work of two or more employees therein;

3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendationsas to the hiring and firing and as to the promotion or any other change of status of other employees are givenparticular weight.





























18

They are considered as officers or members of a managerial staff if they perform the following duties and responsibilities:

1) The primary duty consists of the performance of work directly related to management of policies of theiremployer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists ofmanagement of the establishment in which he is employed or subdivision thereof; or (ii) execute under generalsupervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii)execute, under general supervision, special assignment and tasks xxx.

(Respondent‘s) duties do not fall under any of the categories enum erated above. His work is not directly related tomanagement policies. Even the circumstances shown by the instant case reveal that (respondent) does not regularlyexercise discretion and independent judgment. (Petitioners) submitted a list of the responsibilities of "HRManager/Supervisor" and "Division Manager/Department Manager/Supervisors" but these do not pertain to (respondent)who does not have any of the said positions. He was just a team Supervisor and not (an) HR or Department Supervisor .

15

We find no reversible error in the above ruling. The test of "supervisory" or "managerial status" depends on whether aperson possesses authority to act in the interest of his employer and whether such authority is not merely routinary orclerical in nature, but requires the use of independent judgment.

16 The position held by respondent and its concomitant

duties failed to hurdle this test.

As a coach or team supervisor, respondent‘s main duty was to deal with customer complaints which could not be handled orsolved by call center agents. If the members of his team could not meet the needs of a customer, they passed thecustomer‘s call to respondent.

This job description does not indicate that respondent can exercise the powers and prerogatives equivalent to managerialactions which require the customary use of independent judgment. There is no showing that he was actually conferred orwas actually exercising the following duties attributable to a "member of the managerial staff," viz.:

1) The primary duty consists of the performance of work directly related to management of policies of theiremployer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists ofmanagement of the establishment in which he is employed or subdivision thereof; or (ii) execute under generalsupervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii)execute, under general supervision, special assignment and tasks; and

4) Who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directlyand closely related to the performance of the work described in paragraphs (1), (2), and (3) above .

17

According to petitioners, respondent also performed the following duties, as shown in the company‘s Statement of Policy onDiscipline:

a. Know and understand in full the Policy on Discipline including their underlying reasons.

b. Implement strictly and consistently the Policy on Discipline.

c. Ensure that the said Policy on Discipline is communicated to and understood by all employees.

d. Monitor compliance by employees with the said Policy.

e. Advise HR Manager on the state of discipline in their respective departments; problems, if any, and recommendsolution(s) and corrective action(s).

As correctly observed by the CA and the LA, these duties clearly pertained to "Division Managers/Department Managers/Supervisors," which respondent was not, as he was merely a team supervisor. Petitioners themselves described respondentas "the superior of a call center agent; he heads and guides a specific number of agents, who form a team. "

181âwphi1

From the foregoing, respondent is thus entitled to his claims for holiday pay, service incentive leave pay, overtime pay andrest day pay,

pursuant to Book Three of the Labor Code, specifically Article 82,19

in relation to Articles 87,20

93,21

and 9522

thereof.

WHEREFORE, premises considered, the Petition is hereby DENIED. The September 1, 2008 Decision and the January 7,2009 Resolution of the Court of Appeals are AFFIRMED.

SO ORDERED.




































20

In view of the foregoing, we deem it just and equitable to modify the assailed Decision by deleting the award of 13th

month pay to the complainant.

…

WHEREFORE, the Decision dated 29 September 2000 is MODIFIED by deleting the award of 13th month pay. The

other findings are AFFIRMED.6

In other words, the award of service incentive leave pay was maintained. Petitioner thus sought a reconsideration of thisaspect, which was subsequently denied in a Resolution by the NLRC dated 31 October 2001.

Displeased with only the partial grant of its appeal to the NLRC, petitioner sought the review of said decision with the Courtof Appeals which was subsequently denied by the appellate court in a Decision dated 06 May 2002, the dispositive portionof which reads:

WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit; and the assailed Decision ofrespondent Commission in NLRC NCR CA No. 026584-2000 is hereby AFFIRMED in toto. No costs.

7

Hence, the instant petition.

ISSUES

1. Whether or not respondent is entitled to service incentive leave;

2. Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, isapplicable to respondent‘s claim of service incentive leave pay.

RULING OF THE COURT

The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-vis Section1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code which provides:

Art. 95 . RIGHT TO SERVICE INCENTIVE LEAVE

(a) Every employee who has rendered at least one year of service shall be entitled to a yearly serviceincentive leave of five days with pay.

Bo ok III, Rule V: SERVICE INCENTIVE LEAVE

SECTION 1 . Coverage. – This rule shall apply to all employees except:

…

(d) Field personnel and other employees whose performance is unsupervised by the employer includingthose who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed

amount for performing work irrespective of the time consumed in the performance thereof; . . .

A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has beendelimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitlyexcluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply toemployees classified as "field personnel." The phrase "other employees whose performance is unsupervised by theemployer" must not be understood as a separate classification of employees to which service incentive leave shall not begranted. Rather, it serves as an amplification of the interpretation of the definition of field personnel under the Labor Codeas those "whose actual hours of work in the field cannot be determined with reasonable certainty. "

8

The same is true with respect to the phrase " those who are engaged on task or contract basis, purely commission basis ."Said phrase should be related with "field personnel," applying the rule on ejusdem generis that general and unlimited termsare restrained and limited by the particular terms that they follow.

9 Hence, employees engaged on task or contract basis or

paid on purely commission basis are not automatically exempted from the grant of service incentive leave, unless, they fallunder the classification of field personnel.

Therefore, petitioner‘s contention that respondent is not entitled to the grant of service incentive leave just because he wa spaid on purely commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of thegrant of service incentive leave to respondent is whether or not he is a field personnel.

According to Article 82 of the Labor Code, "field personnel" shall refer to non-agricultural employees who regularly performtheir duties away from the principal place of business or branch office of the employer and whose actual hours of work in thefield cannot be determined with reasonable certainty. This definition is further elaborated in the Bureau of WorkingConditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association

10 which states

that:

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21

As a general rule, [field personnel] are those whose performance of their job/service is not supervised by theemployer or his representative, the workplace being away from the principal office and whose hours and days ofwork cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specificservice or performing specific work. If required to be at specific places at specific times, employees including driverscannot be said to be field personnel despite the fact that they are performing work away from the principal office ofthe employee. [Emphasis ours]

To this discussion by the BWC, the petitioner differs and postulates that under said advisory opinion, no employee wouldever be considered a field personnel because every employer, in one way or another, exercises control over his employees.

Petitioner further argues that the only criterion that should be considered is the nature of work of the employee in that, if theemployee‘s job requires that he works away from the principal office like that of a messenger or a bus driver, then he isinevitably a field personnel.

We are not persuaded. At this point, it is necessary to stress that the definition of a "field personnel" is not merely concernedwith the location where the employee regularly performs his duties but also with the fact that the employee‘s performance isunsupervised by the employer. As discussed above, field personnel are those who regularly perform their duties away fromthe principal place of business of the employer and whose actual hours of work in the field cannot be determined withreasonable certainty . Thus, in order to conclude whether an employee is a field employee, it is also necessary to ascertain ifactual hours of work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry mustbe made as to whether or not the employee‘s time and performance are constantly supervised by the employer.

As observed by the Labor Arbiter and concurred in by the Court of Appeals:

It is of judicial notice that along the routes that are plied by these bus companies, there are its inspectors assignedat strategic places who board the bus and inspect the passengers, the punched tickets, and the conductor‘s reports.There is also the mandatory once-a-week car barn or shop day, where the bus is regularly checked as to itsmechanical, electrical, and hydraulic aspects, whether or not there are problems thereon as reported by the driverand/or conductor. They too, must be at specific place as [sic] specified time, as they generally observe promptdeparture and arrival from their point of origin to their point of destination. In each and every depot, there is alwaysthe Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific timesand arrive at the estimated proper time. These, are present in the case at bar. The driver, the complainant herein,was therefore under constant supervision while in the performance of this work. He cannot be considered a fieldpersonnel.

11

We agree in the above disquisition. Therefore, as correctly concluded by the appellate court, respondent is not a fieldpersonnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner‘sbusiness. Accordingly, respondent is entitled to the grant of service incentive leave.

The question now that must be addressed is up to what amount of service incentive leave pay respondent is entitled to.

The response to this query inevitably leads us to the correlative issue of whether or not the three (3)-year prescriptive periodunder Article 291 of the Labor Code is applicable to respondent‘s claim of service incentive leave p ay.

Article 291 of the Labor Code states that all money claims arising from employer-employee relationship shall be filed withinthree (3) years from the time the cause of action accrued; otherwise, they shall be forever barred.

In the application of this section of the Labor Code, the pivotal question to be answered is when does the cause of action for

money claims accrue in order to determine the reckoning date of the three-year prescriptive period.

It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatevermeans and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or notto violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff orconstituting a breach of the obligation of the defendant to the plaintiff .

12

To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element of a cause ofaction transpired. Stated differently, in the computation of the three-year prescriptive period, a determination must be madeas to the period when the act constituting a violation of the workers‘ right to the benefits being claimed was committed. For ifthe cause of action accrued more than three (3) years before the filing of the money claim, said cause of action has alreadyprescribed in accordance with Article 291.

13

Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits beingclaimed have been withheld from the employee for a period longer than three (3) years, the amount pertaining to the periodbeyond the three-year prescriptive period is therefore barred by prescription. The amount that can only be demanded by theaggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of thecomplaint.

14

It is essential at this point, however, to recognize that the service incentive leave is a curious animal in relation to otherbenefits granted by the law to every employee. In the case of service incentive leave, the employee may choose to eitheruse his leave credits or commute it to its monetary equivalent if not exhausted at the end of the year .

15 Furthermore, if the

employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation orseparation from work to the commutation of his accrued service incentive leave. As enunciated by the Court in Fernandez v.NLRC :

16



























22

The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject toa few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that "[e]veryemployee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of fivedays with pay." Service incentive leave is a right which accrues to every employee who has served "within 12months, whether continuous or broken reckoned from the date the employee started working, including authorizedabsences and paid regular holidays unless the working days in the establishment as a matter of practice or policy,or that provided in the employment contracts, is less than 12 months, in which case said period shall be consideredas one year." It is also "commutable to its money equivalent if not used or exhausted at the end of the year." Inother words, an employee who has served for one year is entitled to it. He may use it as leave days or he may

collect its monetary value. To limit the award to three years, as the solicitor general recommends, is to undulyrestrict such right.

17 [Italics supplied]

Correspondingly, it can be conscientiously deduced that the cause of action of an entitled employee to claim his serviceincentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employeedid not make use of said leave credits but instead chose to avail of its commutation. Accordingly, if the employee wishes toaccumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause ofaction to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay suchamount at the time of his resignation or separation from employment.

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that thethree (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to thecommutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after

demand of commutation or upon termination of the employee‘s services, as the case may be.

The above construal of Art. 291, vis-à-vis the rules on service incentive leave, is in keeping with the rudimentary principlethat in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, theworkingman‘s welfare should be the primordial and paramount consideration.

18 The policy is to extend the applicability of the

decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with theavowed policy of the State to give maximum aid and protection to labor .

19

In the case at bar, respondent had not made use of his service incentive leave nor demanded for its commutation until hisemployment was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive leave pay atthe time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from the time of hisdismissal, that respondent demanded from his former employer commutation of his accumulated leave credits. His cause ofaction to claim the payment of his accumulated service incentive leave thus accrued from the time when his employer

dismissed him and failed to pay his accumulated leave credits.

Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time theemployer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondenthad filed his money claim after only one month from the time of his dismissal, necessarily, his money claim was filed withinthe prescriptive period provided for by Article 291 of the Labor Code.

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed Decision of the Court of Appealsin CA-G.R. SP. No. 68395 is hereby AFFIRMED. No Costs.

SO ORDERED.

MERCIDAR FISHING CORPORATION represented by its President DOMINGO B. NAVAL, peti t ioner, vs . NATIONALLABOR RELATIONS COMMISSION and FERMIN AGAO, JR., respondents.

D E C I S I O N

MENDOZA, J .:

This is a petition for certiorari to set aside the decision, dated August 30, 1993, of the National Labor RelationsCommission dismissing the appeal of petitioner Mercidar Fishing Corporation from the decision of the Labor Arbiter in NLRCNCR Case No. 09-05084-90, as well as the resolution dated October 25, 1993, of the NLRC denying reconsideration.

This case originated from a complaint filed on September 20, 1990 by private respondent Fermin Agao, Jr. againstpetitioner for illegal dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave for 1990.Private respondent had been employed as a ―bodegero‖ or ship‘s quartermaster on February 12, 1988. He complained that

he had been constructively dismissed by petitioner when the latter refused him assignments aboard its boats after he hadreported to work on May 28, 1990.

i

Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April28, 1990 but that when he reported to work at the end of such period with a health clearance, he was told to come backanother time as he could not be reinstated immediately. Thereafter, petitioner refused to give him work. For this reason,private respondent asked for a certificate of employment from petitioner on September 6, 1990. However, when he cameback for the certificate on September 10, petitioner refused to issue the certificate unless he submitted his resignation.Since private respondent refused to submit such letter unless he was given separation pay, petitioner prevented him fromentering the premises.

ii

Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his work. It claimed thatthe latter failed to report for work after his leave had expired and was, in fact, absent without leave for three months until August 28, 1998. Petitioner further claims that, nonetheless, it assigned private respondent to another vessel, but the latter















23

was left behind on September 1, 1990. Thereafter, private respondent asked for a certificate of employment on September6 on the pretext that he was applying to another fishing company. On September 10, 1990, he refused to get the certificateand resign unless he was given separation pay.

iii

On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a decision disposing of the case as follows:

ACCORDINGLY, respondents are ordered to reinstate complainant with backwages, pay him his 13th monthpay and incentive leave pay for 1990.

All other claims are dismissed.

SO ORDERED.

Petitioner appealed to the NLRC which, on August 30, 1993, dismissed the appeal for lack of merit. The NLRCdismissed petitioner‘s claim that it cannot be held liable for service incentive leave pay by fishermen in its employ as thelatter supposedly are ―field personnel‖ and thus not entitled to such pay under the Labor Code.

iv

The NLRC likewise denied petitioner‘s motion for reconsideration of its decision in its order dated October 25, 1993.

Hence, this petition. Petitioner contends:

I

THE RESPONDENT COMMISSION PALPABLY ERRED IN RULING AND SUSTAINING THE VIEW THATFISHING CREW MEMBERS, LIKE FERMIN AGAO, JR., CANNOT BE CLASSIFIED AS FIELD PERSONNELUNDER ARTICLE 82 OF THE LABOR CODE.

II

THE RESPONDENT COMMISSION ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACKOF JURISDICTION WHEN IT UPHELD THE FINDINGS OF THE LABOR ARBITER THAT HEREIN PETITIONERHAD CONSTRUCTIVELY DISMISSED FERMIN AGAO, JR., FROM EMPLOYMENT.

The petition has no merit.

Art. 82 of the Labor Code provides:

ART. 82. Coverage. - The provisions of this Title [Working Conditions and Rest Periods] shall apply toemployees in all establishments and undertakings whether for profit or not, but not to government employees,field personnel, members of the family of the employer who are dependent on him for support, domestic helpers,persons in the personal service of another, and workers who are paid by results as determined by the Secretary

of Labor in appropriate regulations.

. . . . . . . . . .

―Field personnel‖ shall refer to non-agricultural employees who regularly perform their duties away from theprincipal place of business or branch office of the employer and whose actual hours of work in the field cannot bedetermined with reasonable certainty.

Petitioner argues essentially that since the work of private respondent is performed away from its principal place ofbusiness, it has no way of verifying his actual hours of work on the vessel. It contends that private respondent and otherfishermen in its employ should be classified as ―field personnel‖ who have n o statutory right to service incentive leave pay.

In the case of Union of Filipro Employees (UFE) v. Vicar ,v this Court explained the meaning of the phrase ―whose

actual hours of work in the field cannot be determined with reasonable certainty‖ in Art. 82 of the Labor Code, as follows:

Moreover, the requirement that ―actual hours of work in the field cannot be determined with reasonablecertainty‖ must be read in conjunction with Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Section 1. Coverage - This rule shall apply to all employees except:

. . . . . . . . . .

(e) Field personnel and other employees whose time and performance is unsupervised by theemployer xxx (Italics supplied)

While contending that such rule added another element not found in the law (Rollo, p. 13), the petitionernevertheless attempted to show that its affected members are not covered by the abovementioned rule. Thepetitioner asserts that the company‘s sales personnel are strictly supervised as shown by the SOD (Supervisor of

the Day) schedule and the company circular dated March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add another

element to the Labor Code definition of field personnel. The clause ―whose time and performance isunsupervised by the employer‖ did not amplify but merely interpreted and expounded the clause ―whose actualhours of work in the field cannot be determined with reasonable certainty.‖ The former clause is still within thescope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an employee‘sactual working hours in the field can be determined with reasonable certainty, query must be made as to whetheror not such employee‘s time and performance is constantly supervised by th e employer.

vi

Accordingly, it was held in the aforementioned case that salesmen of Nestle Philippines, Inc. were field personnel:

It is undisputed that these sales personnel start their field work at 8:00 a.m. after having reported to the officeand come back to the office at 4:00 p.m. or 4:30 p.m. if they are Makati-based.



24

The petitioner maintains that the period between 8:00 a.m. to 4:00 or 4:30 p.m. comprises the salespersonnel‘s working hours which can be determined with reasonable certainty.

The Court does not agree. The law requires that the actual hours of work in the field be reasonablyascertained. The company has no way of determining whether or not these sales personnel, even if they reportto the office before 8:00 a.m. prior to field work and come back at 4:30 p.m., really spend the hours in between inactual field work.

vii

In contrast, in the case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner haveno choice but to remain on board its vessel. Although they perform non-agricultural work away from petitioner‘s business

offices, the fact remains that throughout the duration of their work they are under the effective control and supervision ofpetitioner through the vessel‘s patron or master as the NLRC c orrectly held.

viii

Neither did petitioner gravely abuse its discretion in ruling that private respondent had constructively been dismissed bypetitioner. Such factual finding of both the NLRC and the Labor Arbiter is based not only on the pleadings of the parties butalso on a medical certificate of fitness which, contrary to petitioner‘s claim, private respondent presented when he reported to work on May 28, 1990.

ix As the NLRC held:

Anent grounds (a) and (b) of the appeal, the respondent, in a nutshell, would like us to believe that the Arbiter abused his discretion (or seriously erred in his findings of facts) in giving credence to the factual version ofthe complainant. But it is settled that ―(W)hen confronted with conflicting versions of factual matters,‖ the Labor Arbiter has the ―discretion to determine which party deserves credence on the basis of evidence received.‖[Gelmart Industries (Phils.), Inc. vs. Leogardo, 155 SCRA 403, 409, L-70544, November 5, 1987]. And besides, itis settled in this jurisdiction that ―to constitute abandonment of position, there must be concurrence of the intention

to abandon and some overt acts from which it may be inferred that the employee concerned has no more interestin working‖ (Dagupan Bus Co., Inc. vs. NLRC, 191 SCRA 328), and that the filing of the complaint which asked forreinstatement plus backwages (Record, p. 20) is inconsistent with respondents‘ defense of abandonment (HuaBee Shirt Factory vs. NLRC, 188 SCRA 586).

x

It is trite to say that the factual findings of quasi-judicial bodies are generally binding as long as they are supportedsubstantially by evidence in the record of the case.

xi This is especially so where, as here, the agency and its subordinate

who heard the case in the first instance are in full agreement as to the facts.xii

As regards the labor arbiter‘s award which was affirmed by respondent NLRC, there is no reason to apply the rule thatreinstatement may not be ordered if, as a result of the case between the parties, their relation is strained.

xiii Even at this late

stage of this dispute, petitioner continues to reiterate its offer to reinstate private respondent.xiv

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

G.R. Nos. 169295-96 November 20, 2006

REMINGTON INDUSTRIAL SALES CORPORATION, Petitioner,vs.ERLINDA CASTANEDA, Respondent.

D E C I S I O N

PUNO, J .:

Before this Court is the Petition for Review on Certiorar i1 filed by Remington Industrial Sales Corporation to reverse and setaside the Decision

2 of the Fourth Division of the Court of Appeals in CA-G.R. SP Nos. 64577 and 68477, dated January 31,

2005, which dismissed petitioner‘s consolidated petitions for certiorari, and its subsequent Resolution,3 dated August 11,

2005, which denied petitioner‘s motion for reconsideration.

The antecedent facts of the case, as narrated by the Court of Appeals, are as follows:

The present controversy began when private respondent, Erlinda Castaneda ("Erlinda") instituted on March 2, 1998 acomplaint for illegal dismissal, underpayment of wages, non-payment of overtime services, non-payment of service incentiveleave pay and non-payment of 13th month pay against Remington before the NLRC, National Capital Region, Quezon City.The complaint impleaded Mr. Antonio Tan in his capacity as the Managing Director of Remington.

Erlinda alleged that she started working in August 1983 as company cook with a salary of Php 4,000.00 for Remington, acorporation engaged in the trading business; that she worked for six (6) days a week, starting as early as 6:00 a.m. becauseshe had to do the marketing and would end at around 5:30 p.m., or even later, after most of the employees, if not all, hadleft the company premises; that she continuously worked with Remington until she was unceremoniously prevented fromreporting for work when Remington transferred to a new site in Edsa, Caloocan City. She averred that she reported for workat the new site in Caloocan City on January 15, 1998, only to be informed that Remington no longer needed her services.Erlinda believed that her dismissal was illegal because she was not given the notices required by law; hence, she filed hercomplaint for reinstatement without loss of seniority rights, salary differentials, service incentive leave pay, 13th month payand 10% attorney‘s fees.

Remington denied that it dismissed Erlinda illegally. It posited that Erlinda was a domestic helper, not a regular employee;Erlinda worked as a cook and this job had nothing to do with Remi ngton‘s business of trading in construction or hardwarematerials, steel plates and wire rope products. It also contended that contrary to Erlinda‘s allegations that the (sic) sheworked for eight (8) hours a day, Erlinda‘s duty was merely to cook lunch an d "merienda", after which her time was hers to

http://www.lawphil.net/judjuris/juri2006/nov2006/gr_169295_2006.html#fnt1















26

On May 17, 2001, complainant filed a Manifestation praying for a resolution of her Motion for Reconsideration and, insupport thereof, alleges that, sometime December 18, 2000, she mailed her Manifestation and Motion for Reconsiderationregistered as Registered Certificate No. 188844; and that the said mail was received by the NLRC, through a certain RolandHernandez, on December 26, 2000. Certifications to this effect was issued by the Postmaster of the Sta. Mesa Post Officebearing the date May 11, 2001 ( Annexes A and B, Complainant‘s Manifestation).

Evidence in support of complainant‘s having actually filed a Motion for Reconsideration within the reglementary periodhaving been sufficiently established, a determination of its merits is thus, in order.

On the merits, the NLRC found respondent‘s motion for reconsideration meritorious leading to the issuance of its seconddecision with the following dispositive portion:

WHEREFORE, premises considered, the decision dated November 23, 2000, is MODIFIED by increasing the award ofretirement pay due the complainant in the total amount of SIXTY TWO THOUSAND FOUR HUNDRED THIRTY-SEVEN and50/100 (P62,437.50). All other monetary relief so adjudged therein are maintained and likewise made payable to thecomplainant.

SO ORDERED.

Petitioner challenged the second decision of the NLRC, including the resolution denying its motion for reconsideration,through a second Petition for Certiorar i

8 filed with the Court of Appeals, docketed as CA-G.R. SP No. 68477 and dated

January 8, 2002, this time imputing grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of theNLRC in (1) issuing the second decision despite losing its jurisdiction due to the pendency of the first petition for certiorariwith the Court of Appeals, and (2) assuming it still had jurisdiction to issue the second decision notwithstanding thependency of the first petition for certiorari with the Court of Appeals, that its second decision has no basis in law sincerespondent‘s motion for reconsideration, which was made the basis of the second decision, was not filed under oath inviolation of Section 14, Rule VII

9 of the New Rules of Procedure of the NLRC and that it contained no certification as to why

respondent‘s motion for reconsideration was not decided on time as also required by Section 10, Ru le VI10

and Section 15,Rule VII

11 of the aforementioned rules.

Upon petitioner‘s motion, the Court of Appeals ordered the consolidation of the two (2) petitions, on January 24, 2002,pursuant to Section 7, par. b(3), Rule 3 of the Revised Rules of the Court of Appeals. It summarized the principal issuesraised in the consolidated petitions as follows:

1. Whether respondent is petitioner‘s regular employee or a domestic helper;

2. Whether respondent was illegally dismissed; and

3. Whether the second NLRC decision promulgated during the pendency of the first petition for certiorari has basisin law.

On January 31, 2005, the Court of Appeals dismissed the consolidated petitions for lack of merit, finding no grave abuse ofdiscretion on the part of the NLRC in issuing the assailed decisions.

On the first issue, it upheld the ruling of the NLRC that respondent was a regular employee of the petitioner since the formerworked at the company premises and catered not only to the personal comfort and enjoyment of Mr. Tan and his family, butalso to that of the employees of the lat ter. It agreed that petitioner enjoys the prerogative to control respondent‘s conduct inundertaking her assigned work, particularly the nature and situs of her work in relation to the petitioner‘s workforce, therebyestablishing the existence of an employer-employee relationship between them.

On the issue of illegal dismissal, it ruled that respondent has attained the status of a regular employee in her service withthe company. It noted that the NLRC found that no less than the company‘s corporate secreta ry certified that respondent isa bonafide company employee and that she had a fixed schedule and routine of work and was paid a monthly salary ofP4,000.00; that she served with petitioner for 15 years starting in 1983, buying and cooking food served to companyemployees at lunch and merienda; and that this work was usually necessary and desirable in the regular business of thepetitioner. It held that as a regular employee, she enjoys the constitutionally guaranteed right to security of tenure and thatpetitioner failed to discharge the burden of proving that her dismissal on January 15, 1998 was for a just or authorized causeand that the manner of dismissal complied with the requirements under the law.

Finally, on petitioner‘s other arguments relating to the alleged irregularity of the second NLRC decision, i.e., the fact thatrespondent‘s motion for reconsideration was not under oath and had no certification explaining why it was not resolvedwithin the prescribed period, it held that such violations relate to procedural and non-jurisdictional matters that cannotassume primacy over the substantive merits of the case and that they do not constitute grave abuse of discretion amountingto lack or excess of jurisdiction that would nullify the second NLRC decision.

The Court of Appeals denied petitioner‘s contention that the NLRC lost its jurisdiction to issue the second decision when itreceived the order indicating the Court of Appeals‘ initial action on the first petition for certiorari that it filed. It ru led that theNLRC‘s action of issuing a decision in installments was not prohibited by its own rules and that the need for a seconddecision was justified by the fact that respondent‘s own motion for reconsideration remained unresolved in the first decision.Furthermore, it held that under Section 7, Rule 65 of the Revised Rules of Court,

12 the filing of a petition for certiorari does

not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction has beenissued against the public respondent from further proceeding with the case.























27

From this decision, petitioner filed a motion for reconsideration on February 22, 2005, which the Court of Appeals deniedthrough a resolution dated August 11, 2005.

Hence, the present petition for review.

The petitioner raises the following errors of law: (1) the Court of Appeals erred in affirming the NLRC‘s ruling that therespondent was petitioner‘s regular employee and not a domestic helper; (2) the Court of Appeals erred in holding thatpetitioner was guilty of illegal dismissal; and (3) the Court of Appeals erred when it held that the issuance of the secondNLRC decision is proper.

The petition must fail. We affirm that respondent was a regular employee of the petitioner and that the latter was guilty ofillegal dismissal.

Before going into the substantive merits of the present controversy, we shall first resolve the propriety of the issuance of thesecond NLRC decision.

The petitioner contends that the respondent‘s motion for reconsideration, upon which the second NLRC decision wasbased, was not under oath and did not contain a certification as to why it was not decided on time as required under theNew Rules of Procedure of the NLRC.

13 Furthermore, the former also raises for the first time the contention that

respondent‘s motion was filed beyond the ten (10)-calendar day period required under the same Rules,14

since the latterreceived a copy of the first NLRC decision on December 6, 2000, and respondent filed her motion only on December 18,

2000. Thus, according to petitioner, the respondent‘s motion for reconsideration was a mere scrap of paper and the secondNLRC decision has no basis in law.

We do not agree.

It is well-settled that the application of technical rules of procedure may be relaxed to serve the demands of substantial justice, particularly in labor cases.

15 Labor cases must be decided according to justice and equity and the substantial merits

of the controversy.16

Rules of procedure are but mere tools designed to facilitate the attainment of justice.17

Their strict andrigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, mustalways be avoided.

18

This Court has consistently held that the requirement of verification is formal, and not jurisdictional. Such requirement ismerely a condition affecting the form of the pleading, non-compliance with which does not necessarily render it fatally

defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and correct andnot the product of the imagination or a matter of speculation, and that the pleading is filed in good faith.

19 The court may

order the correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attendingcircumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice maythereby be served.

20

Anent the argument that respondent‘s motion for reconsideration, on which the NLRC‘s second decision was based, wasfiled out of time, such issue was only brought up for the first time in the instant petition where no new issues may be raisedby a party in his pleadings without offending the right to due process of the opposing party.

Nonetheless, the petitioner asserts that the respondent received a copy of the NLRC‘s first decision on December 6, 2000,and the motion for reconsideration was filed only on December 18, 2000, or two (2) days beyond the ten (10)-calendar dayperiod requirement under the New Rules of Procedure of the NLRC and should not be allowed .

21

This contention must fail.

Under Article 22322

of the Labor Code, the decision of the NLRC shall be final and executory after ten (10) calendar daysfrom the receipt thereof by the parties.

While it is an established rule that the perfection of an appeal in the manner and within the period prescribed by law is notonly mandatory but jurisdictional, and failure to perfect an appeal has the effect of rendering the judgment final andexecutory, it is equally settled that the NLRC may disregard the procedural lapse where there is an acceptable reason toexcuse tardiness in the taking of the appeal.

23 Among the acceptable reasons recognized by this Court are (a) counsel's

reliance on the footnote of the notice of the decision of the Labor Arbiter that "the aggrieved party may appeal. . . within ten(10) working days";

24 (b) fundamental consideration of substantial justice;

25 (c) prevention of miscarriage of justice or of

unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was already granted in anearlier final decision;26 and (d) special circumstances of the case combined with its legal merits27 or the amount and theissue involved.

28

We hold that the particular circumstances in the case at bar, in accordance with substantial justice, call for a liberalization ofthe application of this rule. Notably, respondent‘s last day for filing her motion for reconsideration fell on December 16, 2000,which was a Saturday. In a number of cases,

29 we have ruled that if the tenth day for perfecting an appeal fell on a

Saturday, the appeal shall be made on the next working day. The reason for this ruling is that on Saturdays, the office of theNLRC and certain post offices are closed. With all the more reason should this doctrine apply to respondent‘s filing of themotion for reconsideration of her cause, which the NLRC itself found to be impressed with merit. Indeed, technicality shouldnot be permitted to stand in the way of equitably and completely resolving the rights and obligations of the parties for theends of justice are reached not only through the speedy disposal of cases but, more importantly, through a meticulous andcomprehensive evaluation of the merits of a case.





































































28

Finally, as to petitioner‘s argument that the NLRC had already lost its jurisdiction to decide the case when it filed its petitionfor certiorari with the Court of Appeals upon the denial of its motion for reconsideration, suffice it to state that under Section7 of Rule 65

30 of the Revised Rules of Court, the petition shall not interrupt the course of the principal case unless a

temporary restraining order or a writ of preliminary injunction has been issued against the public respondent from furtherproceeding with the case. Thus, the mere pendency of a special civil action for certiorari, in connection with a pending casein a lower court, does not interrupt the course of the latter if there is no writ of injunction.

31 Clearly, there was no grave

abuse of discretion on the part of the NLRC in issuing its second decision which modified the first, especially since it failedto consider the respondent‘s motion for reconsideration when it issued its first decision.

Having resolved the procedural matters, we shall now delve into the merits of the petition to determine whether respondentis a domestic helper or a regular employee of the petitioner, and whether the latter is guilty of illegal dismissal.

Petitioner relies heavily on the affidavit of a certain Mr. Antonio Tan and contends that respondent is the latter‘s domestichelper and not a regular employee of the company since Mr. Tan has a separate and distinct personality from the petitioner.It maintains that it did not exercise control and supervision over her functions; and that it operates as a trading company anddoes not engage in the restaurant business, and therefore respondent‘s work as a cook, which was not usually necessary ordesirable to its usual line of business or trade, could not make her its regular employee.

This contention fails to impress.

In Apex Mining Company, Inc. v. NLRC,32

this Court held that a househelper in the staff houses of an industrial companywas a regular employee of the said firm. We ratiocinated that:

Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" aredefined as follows:

"The term ‗househelper‘ as used herein is synonymous to the term ‗domestic servant‘ and shall refer to any person, whethermale or female, who renders services in and about the employer‘s home and which services are usually necessary ordesirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment ofthe employer‘s family."

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer‘shome to minister exclusively to the personal comfort and enjoyment of the employer‘s family. Such definition covers familydrivers, domestic servants, laundry women, yayas, gardeners, houseboys and similar househelps.

x x x x x x x x x

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it maybe true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a companystaffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actuallyserving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business orindustry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of thebusiness of the employer. In such instance, they are employees of the company or employer in the business concernedentitled to the privileges of a regular employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the businessof the employer that such househelper or domestic servant may be considered as such an employee. The Court finds no

merit in making any such distinction. The mere fact that the househelper or domestic servant is working within the premisesof the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or evenfor its officers and employees, warrants the conclusion that such househelper or domestic servant is and should beconsidered as a regular employee of the employer and not as a mere family househelper or domestic servant ascontemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended.

In the case at bar, the petitioner itself admits in its position paper 33

that respondent worked at the company premises andher duty was to cook and prepare its employees‘ lunch and merienda. Clearly, the situs, as well as the nature ofrespondent‘s work as a cook, who caters not only to the needs of Mr. Tan and his family but also to that of the petitioner‘semployees, makes her fall squarely within the definition of a regular employee under the doctrine enunciated in the ApexMining case. That she works within company premises, and that she does not cater exclusively to the personal comfort ofMr. Tan and his family, is reflective of the existence of the petitioner‘s right of control over her functions, which is the primaryindicator of the existence of an employer-employee relationship.

Moreover, it is wrong to say that if the work is not directly related to the employer's business, then the person performingsuch work could not be considered an employee of the latter. The determination of the existence of an employer-employeerelationship is defined by law according to the facts of each case, regardless of the nature of the activities involved .

34

Indeed, it would be the height of injustice if we were to hold that despite the fact that respondent was made to cook lunchand merienda for the petitioner‘s employees, which work ultimately redounded to the benefit of the petitioner corporation,she was merely a domestic worker of the family of Mr. Tan.

We note the findings of the NLRC, affirmed by the Court of Appeals, that no less than the company‘s corporate secretaryhas certified that respondent is a bonafide company employee;

35 she had a fixed schedule and routine of work and was paid

a monthly salary of P4,000.00;36

she served with the company for 15 years starting in 1983, buying and cooking food servedto company employees at lunch and merienda, and that this service was a regular feature of employment with thecompany.

37




































30

After hearing, Labor Arbiter Jose G. Gutierrez found private respondents guilty of illegal dismissal and accordingly orderedthem to pay petitioners‘ claims. The dispositive portion of the Labor Arbiter‘s decision reads:

WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring thecomplainants to have been illegally dismissed and ordering the respondents to pay thecomplainants the following monetary awards:

AVELINO LAMBO VICENTE BELOCURA

I. BACKWAGES P64,896.00 P64,896.00

II. OVERTIME PAY 13,447.90 13,447.90

III. HOLIDAY PAY 1,399.30 1,399.30

IV. 13TH MONTH PAY 4,992.00 4,992.00

V. SEPARATION PAY 9,984.00 11,648.00

—————— ——————

TOTAL P94,719.20 P96,383.20 = P191,102.40

Add: 10% Attorney's Fees 19,110.24

——————

GRAND TOTAL P210,212.64

=========

or a total aggregate amount of TWO HUNDRED TEN THOUSAND TWO HUNDRED TWELVE AND64/100 (P210,212.64).

All other claims are dismissed for lack of merit.

SO ORDERED.2

On appeal by private respondents, the NLRC reversed the decision of the Labor Arbiter. It found that petitioners had notbeen dismissed from employment but merely threatened with a closure of the business if they insisted on their demand for a"straight payment of their minimum wage," after petitioners, on January 17, 1989, walked out of a meeting with privaterespondents and other employees. According to the NLRC, during that meeting, the employees voted to maintain thecompany policy of paying them according to the volume of work finished at the rate of P18.00 per dozen of tailored clothingmaterials. Only petitioners allegedly insisted that they be paid the minimum wage and other benefits. The NLRC heldpetitioners guilty of abandonment of work and accordingly dismissed their claims except that for 13th month pay. The

dispositive portion of its decision reads:

WHEREFORE, in view of the foregoing, the appealed decision is hereby vacated and a new one enteredordering respondents to pay each of the complainants their 13th month pay in the amount of P4,992.00. Allother monetary awards are hereby deleted.

SO ORDERED.3

Petitioners allege that they were dismissed by private respondents as they were about to file a petition with the Departmentof Labor and Employment (DOLE) for the payment of benefits such as Social Security System (SSS) coverage, sick leaveand vacation leave. They deny that they abandoned their work.

The petition is meritorious.

First . There is no dispute that petitioners were employees of private respondents although they were paid not on the basis oftime spent on the job but according to the quantity and the quality of work produced by them. There are two categories ofemployees paid by results: (1) those whose time and performance are supervised by the employer. (Here, there is anelement of control and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs tothis category especially if he performs his work in the company premises.); and (2) those whose time and performance areunsupervised. (Here, the employer‘s control is over the result of the work. Workers on pakyao and takay basis belong to thisgroup.) Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in garmentfactories where work is done in the company premises, while payment on pakyao and takay basis is commonly observed inthe agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify.

4

Petitioners belong to the first category, i .e., supervised employees.



31

In determining the existence of an employer-employee relationship, the following elements must be considered: (1) theselection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power tocontrol the employee‘s conduct.

5 Of these elements, the most important criterion is whether the employer controls or has

reserved the right to control the employee not only as to the result of the work but also as to the means and methods bywhich the result is to be accomplished.

6

In this case, private respondents exercised control over the work of petitioners. As tailors, petitioners worked in thecompany‘s premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays and holidays. The mere fact that they were paidon a piece-rate basis does not negate their status as regular employees of private respondents. The term "wage" is broadly

defined in Art. 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of money whetherfixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation anddoes not define the essence of the relations.

7 Nor does the fact that petitioners are not covered by the SSS affect the

employer-employee relationship.

Indeed, the following factors show that petitioners, although piece-rate workers, were regular employees of privaterespondents: (1) within the contemplation of Art. 280 of the Labor Code, their work as tailors was necessary or desirable inthe usual business of private respondents, which is engaged in the tailoring business; (2) petitioners worked for privaterespondents throughout the year, their employment not being dependent on a specific project or season; and, (3) petitionersworked for private respondents for more than one year.

8

Second . Private respondents contend, however, that petitioners refused to report for work after learning that the J.C.Tailoring and Dr ess Shop Employees Union had demanded their (petitioners‘) dismissal for conduct unbecoming of

employees. In support of their claim, private respondents presented the affidavits 9 of Emmanuel Y. Caballero, president ofthe union, and Amado Cabañero, member, that petitioners had not been dismissed by private respondents but thatpractically all employees of the company, including the members of the union had asked management to terminate theservices of petitioners. The employees allegedly said they were aga inst petitioners‘ request for change of the mode ofpayment of their wages, and that when a meeting was called to discuss this issue, a petition for the dismissal of petitionerswas presented, prompting the latter to walk out of their jobs and instead file a complaint for illegal dismissal against privaterespondents on January 17, 1989, even before all employees could sign the petition and management could act upon thesame.1âwphi1.nêt

To justify a finding of abandonment of work, there must be proof of a deliberate and unjustified refusal on the part of anemployee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part ofthe employee to discontinue employment.

10 Mere absence is not sufficient. It must be accompanied by manifest acts

unerringly pointing to the fact that the employee simply does not want to work anymore.11

Private respondents failed to discharge this burden. Other than the self-serving declarations in the affidavits of their twoemployees, private respondents did not adduce proof of overt acts of petitioners showing their intention to abandon theirwork. On the contrary, the evidence shows that petitioners lost no time in filing the case for illegal dismissal against privaterespondent. This fact negates any intention on their part to sever their employment relationship.

12 Abandonment is a matter

of intention; it cannot be inferred or presumed from equivocal acts.13

Third . Private respondents invoke the compromise agreement,14

dated March 2, 1993, between them and petitioner AvelinoLambo, whereby in consideration of the sum of P10,000.00, petitioner absolved private respondents from liability for moneyclaims or any other obligations.

To be sure, not all quitclaims are per se invalid or against public policy. But those (1) where there is clear proof that thewaiver was wangled from an unsuspecting or gullible person or (2) where the terms of settlement are unconscionable ontheir face are invalid. In these cases, the law will step in to annul the questionable transaction. 15 However, considering thatthe Labor Arbiter had given petitioner Lambo a total award of P94,719.20, the amount of P10,000.00 to cover any and allmonetary claims is clearly unconscionable. As we have held in another case,

16 the subordinate position of the individual

employee vis-a-vis management renders him especially vulnerable to its blandishments, importunings, and evenintimidations, and results in his improvidently waiving benefits to which he is clearly entitled. Thus, quitclaims, waivers orreleases are looked upon with disfavor for being contrary to public policy and are ineffective to bar claims for the fullmeasure of the workers‘ legal rights.

17 An employee who is merely constrained to accept the wages paid to him is not

precluded from recovering the difference between the amount he actually received and that amount which he should havereceived.

Fourth. The Labor Arbiter awarded backwages, overtime pay, holiday pay, 13th month pay, separation pay and attorney‘sfees, corresponding to 10% of the total monetary awards, in favor of petitioners.

As petitioners were illegally dismissed, they are entitled to reinstatement with backwages. Considering that petitioners weredismissed from the service on January 17, 1989, i .e., prior to March 21, 1989,

18 the Labor Arbiter correctly applied the rule

in the Mercury Drug case,19

according to which the recovery of backwages should be limited to three years withoutqualifications or deductions. Any award in excess of three years is null and void as to the excess.

20

The Labor Arbiter correctly ordered private respondents to give separation pay. Considerable time has lapsed sincepetitioners‘ dismissal, so that reinstatement would now be impractical and hardly in the best interest of the parties. In lieu ofreinstatement, separation pay should be awarded to petitioners at the rate of one month salary for every year of service,with a fraction of at least six (6) months of service being considered as one (1) year.

21



32

The awards for overtime pay, holiday pay and 13th month pay are in accordance with our finding that petitioners are regularemployees, although paid on a piece-rate basis.

22 These awards are based on the following computation of the Labor

Arbiter:

AVELINO LAMBO

I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos.

P 64.00/day x 26 days =

1,664.00/mo. x 36 mos. = P59,904.00

13th Mo. Pay :

P1,664.00/yr. x 3 yrs. = 4,992.00 P64,896.00

————

II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89

Jan. 17/86 - April 30/87 = 15 mos . & 12 day =

(15 mos. x 26 days + 12 days) = 402 days

*2 hours = 25%

402 days x 2 hrs./days = 804 hrs.

P 32.00/day ÷ 8 hrs. =

4.00/hr. x 25% =

1.00/hr. + P4.00/hr. =

5.00/hr. x 804 hrs. = 4,020.00

May 1/87 - Sept . 30/87 = 4 mos. & 26 days =


130 days x 2 hrs./day = 260 hrs.

P 41.00/day ÷ 8 hrs. =

5.12/hr. x 25% =

1.28/hr. + P5.12/hr. =

6.40/hr. x 260 hrs. = P1,664.00

Oct . 1/87 - Dec . 13/87 = 2 mos. & 11 days =



P 49.00/day ÷ 8 hrs. =

6.12/hr. x 25% =

1.53/hr. + P6.12/hr. =

7.65/hr. x 126 hrs. = P963.90

Dec . 14/87 - Jan. 17/89 = 13 mos. & 2 days =





33

P 64.00/day ÷ 8 hrs. =

8.00/hr. x 25% =

2.00/hr. + P8.00/hr =

10.00/hr. x 680 hrs. = P6,800.00 P13,447.90

III. HOLIDAY PAY: Jan. 17/86 - Jan. 17/89

Jan. 17/86 - April 30/87 = 12 RHs ; 8 SHs

P 32.00/day x 200% =

64.00/day x 12 days = 768.00

32.00/day x 12 days = (384.00) P384.00

32.00/day x 30% = ————

9.60/day x 8 days = 76.80 460.80

———

May 1/87 - Sept . 30/87 = 3 RHs; 3 SHs

P 41.00/day x 200% =

82.00/day 3 days = 246.00

41.00/day x 3 days = (123.00) P123.00

41.00/day x 30% = ————

12.30/day x 3 days = 36.90 159.90

————

Oct . 1/87 - Dec . 13/87 = 1 RH

P 49.00/day x 200% =

98.00/day x 1 day = P98.00

49.00/day x 1 day = (49.00) 49.00

————

Dec . 14/87 - Jan. 17/89 = 9 RHs; 8 SHs

P 64.00/day x 200% =

128.00/day x 9 days = P1,152.00

64.00/day x 9 days = (576.00) P576.00

64.00/day x 30% = ————

19.20/day x 8 days = 153.60 729.60 1,399.30

——— ———

IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89 = 3 yrs.

P 64.00/day x 26 days =

1,664.00/yr. x 3 yrs. = 4,992.00



34

V. SEPARATION PAY: Sept . 10/85 - Jan. 17/92 = 6 yrs.

P1,664.00/mo. x 6 yrs. = 9,984.00

————

TOTAL AWARD OF AVELINO LAMBO P94,719.20

========

VICENTE BELOCURA

I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos.

Same computation as A. Lambo P64,896.00

II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89

Same computation as A. Lambo 13,447.90

III. HOLIDAY PAY: Jan. 17/86 - Jan. 17/89


IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89


V. SEPARATION PAY: March 3/85 - Jan. 17/92 = 7 yrs.

P1,664.00/mo. x 7 yrs. = 11,648.00

—————

TOTAL AWARD OF VICENTE BELOCURA P96,383.20

=========

SUMMARY


———————— —————————

I. BACKWAGES P64,896.00 P64,896.00

II. OVERTIME PAY 13,447.90 13,447.90

III. HOLIDAY PAY 1,399.30 1,399.30

IV. 13TH MO. PAY 4,992.00 4,992.00

V. SEPARATION PAY 9,984.00 11,648.00

————— —————

TOTAL P94,719.20 P96,383.20

= P191,102.40

ADD: 10% Attorney's Fees 19,110.24

—————


=========



35

Except for the award of attorney‘s fees in the amount of P19,110.24, the above computation is affirmed. The award ofattorney‘s fees should be disallowed, it appearing that petitioners were represented by the Public Attorney‘s Office. With regard to petitioner Avelino Lambo, the amount of P10,000.00 paid to him under the compromise agreement should bededucted from the total award of P94,719.20. Consequently, the award to each petitioner should be as follows:


———————— —————————

I. BACKWAGES P64,896.00 P64,896.00

II. OVERTIME PAY 13,447.90 13,447.90

III. HOLIDAY PAY 1,399.30 1,399.30

IV. 13TH MONTH PAY 4,992.00 4,992.00

V. SEPARATION PAY 9,984.00 11,648.00

————— —————

P 94,719.20

Less 10,000.00

—————

TOTAL P84,719.20 P96,383.20


=========

WHEREFORE, the decision of the National Labor Relations Commission is SET ASIDE and another one is RENDEREDordering private respondents to pay petitioners the total amount of One Hundred Eighty-One Thousand One Hundred TwoPesos and 40/100 (P181,102.40), as computed above.1âwphi1.nêt

SO ORDERED.

G.R. No. L-9265 April 29, 1957

LUZON STEVEDORING CO., INC., petitioner,vs.LUZON MARINE DEPARTMENT UNION and THE HON. MODESTO CASTILLO, THE HON. JOSE S. BAUTISTA, THEHON. V. JIMENEZ YANSON and THE HON. JUAN L. LANTING, Judges of the Court of Industrial Relations,

respondents.

Perkins, Ponce Enrile and Associates for petitioner.Mariano B. Tuason for respondent Judge of the Court of Industrial Relations.Sioson, Roldan and Vidanes for respondent union.

FELIX, J .:

This case involves a petition for certiorari filed by the Luzon Stevedoring Co., Inc., to review a resolution dated June 5,1955, issued by the Court of Industrial Relations. On September 5, 1955, with leave of court, a supplemental petition wasfiled by said petitioner, and both petitions were given due course by resolution of this Court of September 15, 1955. Thefacts of the case may be summarized as follows:

On June 21, 1948, herein respondent Luzon Marine Department Union filed a petition with the Court of Industrial Relationscontaining several demands against herein petitioner Luzon Stevedoring Co., Inc., among which were the petition for fullrecognition of the right of COLLECTIVE bargaining, close shop and check off. However, on July 18, 1948, while the casewas still pending with the CIR, said labor union declared a strike which was ruled down as illegal by this Court in G.R. No. L-2660 promulgated on May 30, 1950. In view of said ruling, the Union filed a "Constancia" with the Court of IndustrialRelations praying that the remaining unresolved demands of the Union presented in their original petition, be granted. Saidunresolved demands are the following:

a. Point No. 2.

That the work performed in excess of eight (8) hours he paid an overtime pay of 50 per cent the regular rateof pay, and that work performed on Sundays and legal holidays be paid double the regular rate of pay.



36

b. Point No. 7.

That all officers, engineers and crew members of motor tugboats who have not received their paycorresponding to the second half of December, 1941, be paid accordingly.

c. Point No. 11.

That Ciriaco Sarmiento, Chief Mate, M/V Marlin, Rafael Santos, Port Engineer, and Lorenzo de la Cruz,Chief Engineer, M/V Shark who have been suspended without justifiable cause and for union activities, bereinstated with pay from time of suspension.

d. Point No. 12.

That all officers, engineers and crew members of the motor tugboats "Shark", "Hearing", "Pike" and "Ray",who have been discharged without justifiable cause and for union activities, be reinstate with pay from timeof discharge. (p. 65-66, Record).

On the basis of these demands, the case was set for hearing and the parties submitted their respective evidence, both oraland documentary, from June 8,1951, to January 7, 1954. In one of the hearings of the case, the original intervenor in Unionde Obreros Estibadores de Filipinas (UOEF), through counsel, moved for the withdraw al of said Union from the case, whichmotion was granted by the Court.

After the parties had submitted exhaustive memoranda, the trial Judge rendered a decision on February 10, 1955, findingthat the company gave said employees 3 free meals every day and about 20 minutes rest after each mealtime; that theyworked from 6:00 am. to 6:00 p.m. every day including Sundays and holidays, and for work performed in excess of 8 hours,the officers, patrons and radio operators were given overtime pay in the amount of P4 each and P2 each for the rest of thecrew up to March, 1947, and after said date, these payments were increased to P5 and P2.50, respectively, until the time oftheir separation or the strike of July 19, 1948; that when the tugboats underwent repairs, their personnel worked only 8hours a day excluding Sundays and holidays; that although there was an effort on the part of claimants to show that somehad worked beyond 6:00 p.m., the evidence was uncertain and indefinite and that demand was, therefore, denied; thatrespondent Company, by the nature of its business and as defined by law (Section 18-b of Commonwealth Act as amended)is considered a public service operator by the Public Service Commission in its decision in case No. 3035-C entitled"Philippine Shipowners. Association vs. Luzon Stevedoring Co., Inc., et al."(Exh. 23), and, therefore, exempt from payingadditional remuneration or compensation for work performed on Sundays and legal holidays, pursuant to the provisions of

section 4 of Commonwealth Act No. 444 (Manila Electric Co. vs. Public Utilities Employees Association, 79 Phil., 408. 44Off. Gaz., 1760); and ruled that:

For the above reasons, the aforementioned employees are only entitled to receive overtime pay for workrendered in excess of 8 hours on ordinary days including Sundays and legal holidays.

However, the respondent company has proved to the satisfaction of the Court that it has paid its employeesfor such overtime work as shown above Exhs. 1 to 20-B).

It is, therefore, only a matter of computation whether such over time pay by the respondent for overtimeservices rendered covers the actual overtime work performed by the employees concerned equivalent to 25per cent which is the minimum rate fixed by law in the absence of other proof to justify the granting of morebeyond said minimum rate.

Demands Nos. 11 and 12 regarding the reinstatement to the service of the employees named therein were denied andrespondent Company was only or to pay the separation pay and overtime work rendered by Ciriaco Sarmiento, RafaelSantos and Lorenzo de la Cruz, after making the pronouncement that their separation or dismissal was not due to unionactivities but for valid and legal grounds.

The Luzon Marine Department Union, through counsel, therefore, filed a motion for reconsideration praying that the decisionof February 10, 1955, be modified so as to declare and rule that the members of the Union who had rendered services from6:00 a.m. to 6:00 p.m. were entitled to 4 hours' overtime pay; that allotted to the taking of their meals should not bededucted from the 4 hours of overtime rendered by said employees, that the amounts of P3 and P2 set aside for the dailymeals of the employees be considered as part of their actual compensation in determining the amount due to saidemployees separated from the service without just cause be paid their unearned wages and salaries from the date of theirseparation up to the time the decision in case L-2660 became final; and for such other relief as may be just and equitable in

the premises.

Luzon Stevedoring Co., Inc. also sought for the reconsideration of the decision only in so far as it interpreted that the periodduring which a seaman is aboard a tugboat shall be considered as "working time" for the purpose of the Eight-Hour-LaborLaw.

In pursuance of Section 1 of Commonwealth Act No. 103, as amended by Commonwealth Act No. 254 and further amendedby Commonwealth Act No. 559, the motions for reconsideration were passed upon by the Court en banc , and on June 6,1955, a resolution modifying the decision of February 10, 1955, was issued, in the sense that the 4 hours of overtime workincluded in the regular daily schedule of work from 6:00 a.m. to 6:00 p.m. should be paid independently of the so-called"coffee-money", after making a finding that said extra amounts were given to crew members of some tugboats for workperformed beyond 6:00 p.m. over a period of some 16 weeks. The Company's motion for reconsideration was denied.





38

III. When employees with full knowledge of the law, voluntarily agreed to work for so many hours in consideration of acertain definite wage, and continue working without any protest for a period of almost two years, is said compensation asagreed upon legally deemed and retroactively presumed to constitute full payment for all services rendered, includingwhatever overtime wages might be due? Especially so if such wages, though received years before the enactment of theMinimum Wage Law, were already set mostly above said minimum wage?

IV. The members set of respondent Union having expressly manifested acquiescence over a period of almost two years withreference to the sufficiency of their wages and having made no protest whatsoever with reference to said compensationdoes the legal and equitable principle of estoppel operate to bar them from making a claim for, or making any recovery of,

back overtime compensation?

We are going to discuss these two issues jointly. Section 6 of Commonwealth Act No. 444 provides:

Sec. 6. Any agreement or contract between the employer and the laborer or employee contrary to the provisions of this Actshall be null and void ab initio.

In the case of the Manila Terminal Co. vs. Court of Industrial Relations et al ., 91 Phil., 625, 48 Off. Gaz., 2725, this Courtheld:

The principles of estoppel and laches cannot be, invoked against employees or laborers in an action for therecovery of compensation for past overtime work. In the first place, it would be contrary to the spirit of the

Eight-Hour Labor Law, under which. as already seen, the laborers cannot waive their right to extracompensation. In the second place, the law principally obligates the employer to observe it, so much so thatit punishes the employer for its violation and leaves the employee free and blameless. In the third place, theemployee or laborer is in such a disadvantageous position as to be naturally reluctant or even apprehensivein asserting a claim which may cause the employer to devise a way for exercising his right to terminate theemployment.

Moreover, if the principle of estoppel and laches is to be applied, it would bring about a situation wherebythe employee or laborer, can not expressly renounce the right to extra compensation under the Eight-HourLabor Law, may be compelled to accomplish the same thing by mere silence or lapse of time, therebyfrustrating the purpose of the law by indirection.

This is the law on the matter and We certainly adhere, to it in the present case. We deem it, however, convenient to say a

few words of explanation so that the principle enunciated herein may not lead to any misconstruction of the law in futurecases. There is no question that the right of the laborers to overtime pay cannot be waived. But there may be cases in whichthe silence of the employee or laborer who lets the time go by for quite a long period without claiming or asserting his rightto overtime compensation may favor the inference that he has not worked any such overtime or that his extra work has beenduly compensated. But this is not so in the case at bar. The complaining laborers have declared that long before the filing ofthis case, they had informed Mr. Martinez, a sort of overseer of the petitioner, that they had been working overtime andclaiming the corresponding compensation therefor, and there is nothing on record to show that the claimants, at least themajority of them, had received wages in excess of the minimum wage later provided by Republic Act No. 602, approved April 6, 1951. On the contrary, in the decision of the trial Judge, it appears that 34 out of the 58 claimants received salariesless than the minimum wage authorized by said Minimum Wage Law, to wit:

Permonth

1. Ambrosio Tañada …………….. but after passing the

examinations his wages wereincreased to P225 per month;

oiler P82.50

2. Patricio Santiago …………….. but after passing the

examinations his wages wereincreased to P225 per month;

quartermaster 82.50

3. Fidelino Villanueva …………… oiler 82.50

4. Pedro Filamor ………………… then his wage was reduced to

P67.50 per month as cook;

quartermaster 82.50

5. Emiliano Irabon ………………. then his wage was reduced to

P60 and he stayed for 1 month only;it was increased again to P67.50;

seaman 82.50

6. Juanito de Luna oiler 82.50

7. Benigno Curambao oiler 82.50

8. Salvador Mercadillo oiler 82.50

9. Nicasio Sta. Lucia cook 82.50

10. Damaso Arciaga seaman 82.50

11. Leonardo Patnugot oiler 82.50

12. Bienvenido Crisostomo oiler 82.50





40

VII. Should not a Court of Industrial Relations' resolution, en banc, which is clearly unsupported in fact and in law, patentlyarbitrary and capricious and absolutely devoid of sustaining reason, be declared illegal? Especially so, if the trial court'sdecision which the resolution en banc reversed, is most detailed, exhaustive and comprehensive in its findings as well asmost reasonable and legal in its conclusions? This issue was raised by petitioner in its supplemental petition and We havethis much to say. The Court of Industrial Relations has been considered "a court of justice" (Metropolitan TransportationService vs. Paredes,

* G.R. No. L-1232, prom. January 12, 1948), although in another case. We said that it is "more an

administrative board than a part of the integrated judicial system of the nation" (Ang Tibay vs. Court of Industrial Relations,69 Phil., 635). But for procedural purposes, the Court of Industrial Relations is a court with well-defined powers vested bythe law creating it and with such other powers as generally pertain to a court of justice (Sec. 20, Com. Act No. 103). As

such, the general rule that before a judgment becomes final, the Court that rendered the same may alter or modify it so asto conform with the law and the evidence, is applicable to the Court of Industrial Relations (Connel Bros. Co.(Phil.) vs.National Labor Union, G.R. No. L-3631, prom. January 30, 1956). The law also provides that after a judge of the Court ofIndustrial Relations, duly designated by the Presiding Judge therein to hear a particular case, had rendered a decision, anyagrieved party may request for reconsideration thereof and the judges of said Court shall sit together, the concurrence of the3 of them being necessary for the pronouncement of a decision, order or award (See. 1, Com. Act No. 103). It was in virtueof these rules and upon motions for reconsideration presented by both parties that resolution subject of the present petitionwas issued, the Court en banc finding it necessary to modify a part of the decision of February 10, 1955, which is clearlywithin its power to do.

On the other hand, the issue under consideration is predicated on a situation which is not obtaining in the case at bar, for, itpresupposes that the resolutions en banc of the respondent Court "are clearly unsupported in fact and in law, patentlyarbitrary and capricious and absolutely devoid of any sustaining reason", which does not seem to be the case as a matter of

fact.

Wherefore, and on the strength of the foregoing consideration, the resolutions of the Court of Industrial Relations appealedfrom are hereby affirmed, with costs against petitioner. It is so ordered.

Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador. Concepcion, Reyes, J.B.L. and Endencia, JJ., concur.

G.R. No. L-15422 November 30, 1962

NATIONAL DEVELOPMENT COMPANY, petitioner,vs.COURT OF INDUSTRIAL RELATIONS and NATIONAL TEXTILE WORKERS UNION, respondents.

Government Corporate Counsel Simeon M. Gopengco and Lorenzo R. Mosqueda for petitioner.Eulogio R. Lerum for respondent National Textile Workers Union.Mariano B. Tuason for respondent Court of Industrial Relations.

REGALA, J .:

This is a case for review from the Court of Industrial Relations. The pertinent facts are the following:

At the National Development Co., a government-owned and controlled corporation, there were four shifts of work. One shiftwas from 8 a.m. to 4 p.m., while the three other shifts were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m. and, finally,from 10 p.m. to 6 a.m. In each shift, there was a one-hour mealtime period, to wit: From (1) 11 a.m. to 12 noon for thoseworking between 6 a.m. and 2 p.m. and from (2) 7 p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.

The records disclose that although there was a one-hour mealtime, petitioner nevertheless credited the workers with eighthours of work for each shift and paid them for the same number of hours. However, since 1953, whenever workers in oneshift were required to continue working until the next shift, petitioner instead of crediting them with eight hours of overtimework, has been paying them for six hours only, petitioner that the two hours corresponding to the mealtime periods shouldnot be included in computing compensation. On the other hand, respondent National Textile Workers Union whosemembers are employed at the NDC, maintained the opposite view and asked the Court of Industrial Relations to order thepayment of additional overtime pay corresponding to the mealtime periods.

After hearing, Judge Arsenio I. Martinez of the CIR issued an order dated March 19, 1959, holding that mealtime should becounted in the determination of overtime work and accordingly ordered petitioner to pay P101,407.96 by way of overtimecompensation. Petitioner filed a motion for reconsideration but the same was dismissed by the CIR en banc on the groundthat petitioner failed to furnish the union a copy of its motion.

Thereafter, petitioner appealed to this Court, contending, first, that the CIR has no jurisdiction over claims for overtimecompensation and, secondary that the CIR did not make "a correct appraisal of the facts, in the light of the evidence" inholding that mealtime periods should be included in overtime work because workers could not leave their places of work andrest completely during those hours.

In support of its contention that the CIR lost its jurisdiction over claims for overtime pay upon the enactment of the IndustrialPeace Act (Republic Act No. 875), petitioner cites a number of decisions of this Court. On May 23, 1960, however, We ruledin Price Stabilization Corp. v. Court of Industrial Relations, et al ., G.R. No. L-13206, that

Analyzing these cases, the underlying principle, it will be noted in all of them, though not stated in express terms, isthat where the employer-employee relationship is still existing or is sought to be reestablished because of itswrongful severance, (as where the employee seeks reinstatement) the Court of Industrial Relations has jurisdiction



41

over all claims arising out of, or in connection with the employment, such as those related to the Minimum WageLaw and the Eight-Hour Labor Law. After the termination of their relationship and no reinstatement is sought, suchclaims become mere money claims, and come within the jurisdiction of the regular courts,

We are aware that in 2 cases, some statements implying a different view have been made, but we now hold anddeclare the principle set forth in the next preceding paragraph as the one governing all cases of this nature.

This has been the constant doctrine of this Court since May 23, 1960.1

A more recent definition of the jurisdiction of the CIR is found in Campos, et al. v. Manila Railroad Co., et al ., G.R. No. L-17905, May 25, 1962, in which We held that, for such jurisdiction to come into play, the following requisites must becomplied with: (a) there must exist between the parties an employer-employee relationship or the claimant must seek hisreinstatement; and (b) the controversy must relate to a case certified by the President to the CIR as one involving nationalinterest, or must arise either under the Eight-Hour Labor Law, or under the Minimum Wage Law. In default of any of thesecircumstances, the claim becomes a mere money claim that comes under the jurisdiction of the regular courts. Here,petitioner does not deny the existence of an employer-employee relationship between it and the members of the union.Neither is there any question that the claim is based on the Eight-Hour Labor Law (Com. Act No. 444, as amended). Wetherefore rule in favor of the jurisdiction of the CIR over the present claim.

The other issue raised in the appeal is whether or not, on the basis of the evidence, the mealtime breaks should beconsidered working time under the following provision of the law;

The legal working day for any person employed by another shall be of not more than eight hours daily. When thework is not continuous, the time during which the laborer is not working and can leave his working place and canrest completely shall not be counted . (Sec. 1, Com. Act No. 444, as amended. Emphasis ours.)

It will be noted that, under the law, the idle time that an employee may spend for resting and during which he may leave thespot or place of work though not the premises

2 of his employer, is not counted as working time only where the work is

broken or is not continuous.

The determination as to whether work is continuous or not is mainly one of fact which We shall not review as long as thesame is supported by evidence. (Sec. 15, Com. Act No. 103, as amended, Philippine Newspaper Guild v. Evening News,Inc., 86 Phil. 303).

That is why We brushed aside petitioner's contention in one case that workers who worked under a 6 a.m. to 6 p.m.schedule had enough "free time" and therefore should not be credited with four hours of overtime and held that the finding ofthe CIR "that claimants herein rendered services to the Company from 6:00 a.m. to 6:00 p.m. including Sundays andholidays, . . . implies either that they were not allowed to leave the spot of their working place, or that they could not restcompletely" (Luzon Stevedoring Co., Inc. v. Luzon Marine Department Union, et al., G.R. No. L-9265, April 29, 1957).

Indeed, it has been said that no general rule can be laid down is to what constitutes compensable work, rather the questionis one of fact depending upon particular circumstances, to be determined by the controverted in cases. (31 Am. JurisdictionSec. 626 pp. 878.)

In this case, the CIR's finding that work in the petitioner company was continuous and did not permit employees andlaborers to rest completely is not without basis in evidence and following our earlier rulings, shall not disturb the same. Thus,the CIR found:

While it may be correct to say that it is well-high impossible for an employee to work while he is eating, yet underSection 1 of Com. Act No. 444 such a time for eating can be segregated or deducted from his work, if the same iscontinuous and the employee can leave his working place rest completely. The time cards show that the work wascontinuous and without interruption. There is also the evidence adduced by the petitioner that the pertinentemployees can freely leave their working place nor rest completely. There is furthermore the aspect that during theperiod covered the computation the work was on a 24-hour basis and previously stated divided into shifts.

From these facts, the CIR correctly concluded that work in petitioner company was continuous and therefore the mealtimebreaks should be counted as working time for purposes of overtime compensation.

Petitioner gives an eight-hour credit to its employees who work a single shift say from 6 a.m. to 2 p.m. Why cannot it creditthem sixteen hours should they work in two shifts?

There is another reason why this appeal should dismissed and that is that there is no decision by the CIR en banc fromwhich petitioner can appeal to this Court. As already indicated above, the records show that petitioner's motion forreconsideration of the order of March 19, 1959 was dismissed by the CIR en banc because of petitioner's failure to serve acopy of the same on the union.

Section 15 of the rules of the CIR, in relation to Section 1 of Commonwealth Act No. 103, states:

The movant shall file the motion (for reconsideration), in six copies within five (5) days from the date on which hereceives notice of the order or decision, object of the motion for reconsideration, the same to be verified under oathwith respect to the correctness of the allegations of fact, and serving a copy thereof personally or by registered mail,on the adverse party . The latter may file an answer, in six (6) copies, duly verified under oath. (Emphasis ours.)







44

WHEREFORE, the Petition is GRANTED. The Resolution of the National Labor Relations Commission dated 29 November1994 is SET ASIDE and the decision of the Labor Arbiter dated 26 November 1993 dismissing the complaint againstpetitioner for unfair labor practice is AFFIRMED.

SO ORDERED.

G.R. No. 146881 February 5, 2007

COCA COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, Manager, Petitioners,

vs.

DR. DEAN N. CLIMACO, Respondent.

D E C I S I O N

AZCUNA, J.:

This is a petition for review on certiorari of the Decision of the Court of Appeals1 promulgated on July 7, 2000, and itsResolution promulgated on January 30, 2001, denying petitioner‘s motion for reconsideration. The Court of Appeals ruled that an employer-employee relationship exists between respondent Dr. Dean N. Climaco and petitioner Coca-Cola Bottlers

Phils., Inc. (Coca-Cola), and that respondent was illegally dismissed.

Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue ofa Retainer Agreement that stated:

WHEREAS, the COMPANY desires to engage on a retainer basis the services of a physician and the said DOCTOR isaccepting such engagement upon terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual agreement hereinafter contained, the parties agree asfollows:

1. This Agreement shall only be for a period of one (1) year beginning January 1, 1988 up to December 31, 1988. The said

term notwithstanding, either party may terminate the contract upon giving a thirty (30)-day written notice to the other.

2. The compensation to be paid by the company for the services of the DOCTOR is hereby fixed at PESOS: ThreeThousand Eight Hundred (P3,800.00) per month. The DOCTOR may charge professional fee for hospital services renderedin line with his specialization. All payments in connection with the Retainer Agreement shall be subject to a withholding taxof ten percent (10%) to be withheld by the COMPANY under the Expanded Withholding Tax System. In the event thewithholding tax rate shall be increased or decreased by appropriate laws, then the rate herein stipulated shall accordingly beincreased or decreased pursuant to such laws.

3. That in consideration of the above mentioned retainer‘s fee, the DOCTOR agrees to perform the duties and obligationsenumerated in the COMPREHENSIVE MEDICAL PLAN, hereto attached as Annex "A" and made an integral part of thisRetainer Agreement.

4. That the applicable provisions in the Occupational Safety and Health Standards, Ministry of Labor and Employment shallbe followed.

5. That the DOCTOR shall be directly responsible to the employee concerned and their dependents for any injury inflictedon, harm done against or damage caused upon the employee of the COMPANY or their dependents during the course ofhis examination, treatment or consultation, if such injury, harm or damage was committed through professional negligenceor incompetence or due to the other valid causes for action.

6. That the DOCTOR shall observe clinic hours at the COMPANY‘S premises from Monday to Saturday of a minimum of two(2) hours each day or a maximum of TWO (2) hours each day or treatment from 7:30 a.m. to 8:30 a.m. and 3:00 p.m. to4:00 p.m., respectively unless such schedule is otherwise changed by the COMPANY as [the] situation so warrants, subjectto the Labor Code provisions on Occupational Safety and Health Standards as the COMPANY may determine. It isunderstood that the DOCTOR shall stay at least two (2) hours a day in the COMPANY clinic and that such two (2) hours bedevoted to the workshift with the most number of employees. It is further understood that the DOCTOR shall be on call at alltimes during the other workshifts to attend to emergency case[s];

7. That no employee-employer relationship shall exist between the COMPANY and the DOCTOR whilst this contract is ineffect, and in case of its termination, the DOCTOR shall be entitled only to such retainer fee as may be due him at the timeof termination.2

The Comprehensive Medical Plan,3 which contains the duties and responsibilities of respondent, adverted to in the Retainer Agreement, provided:

A. OBJECTIVE



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These objectives have been set to give full consideration to [the] employees‘ and dependents‘ health:

1. Prompt and adequate treatment of occupational and non-occupational injuries and diseases.

2. To protect employees from any occupational health hazard by evaluating health factors related to working conditions.

3. To encourage employees [to] maintain good personal health by setting up employee orientation and education on health,hygiene and sanitation, nutrition, physical fitness, first aid training, accident prevention and personnel safety.

4. To evaluate other matters relating to health such as absenteeism, leaves and termination.

5. To give family planning motivations.

B. COVERAGE

1. All employees and their dependents are embraced by this program.

2. The health program shall cover pre-employment and annual p.e., hygiene and sanitation, immunizations, family planning,physical fitness and athletic programs and other activities such as group health education program, safety and first aidclasses, organization of health and safety committees.

3. Periodically, this program will be reviewed and adjusted based on employees‘ needs.

C. ACTIVITIES

1. Annual Physical Examination.

2. Consultations, diagnosis and treatment of occupational and non-occupational illnesses and injuries.

3. Immunizations necessary for job conditions.

4. Periodic inspections for food services and rest rooms.

5. Conduct health education programs and present education materials.

6. Coordinate with Safety Committee in developing specific studies and program to minimize environmental health hazards.

7. Give family planning motivations.

8. Coordinate with Personnel Department regarding physical fitness and athletic programs.

9. Visiting and follow-up treatment of Company employees and their dependents confined in the hospital.

The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired on December 31,1993. Despite the non-renewal of the Retainer Agreement, respondent continued to perform his functions as company

doctor to Coca-Cola until he received a letter4 dated March 9, 1995 from petitioner company concluding their retainershipagreement effective 30 days from receipt thereof.

It is noted that as early as September 1992, petitioner was already making inquiries regarding his status with petitionercompany. First, he wrote a letter addressed to Dr. Willie Sy, the Acting President and Chairperson of the Committee onMembership, Philippine College of Occupational Medicine. In response, Dr. Sy wrote a letter5 to the Personnel Officer ofCoca-Cola Bottlers Phils., Bacolod City, stating that respondent should be considered as a regular part-time physician,having served the company continuously for four (4) years. He likewise stated that respondent must receive all the benefitsand privileges of an employee under Article 157 (b)6 of the Labor Code.

Petitioner company, however, did not take any action. Hence, respondent made another inquiry directed to the AssistantRegional Director, Bacolod City District Office of the Department of Labor and Employment (DOLE), who referred the inquiryto the Legal Service of the DOLE, Manila. In his letter7 dated May 18, 1993, Director Dennis P. Ancheta, Legal Service,DOLE, stated that he believed that an employer-employee relationship existed between petitioner and respondent based onthe Retainer Agreement and the Comprehensive Medical Plan, and the application of the "four-fold" test. However, Director Ancheta emphasized that the existence of employer-employee relationship is a question of fact. Hence, termination disputesor money claims arising from employer-employee relations exceeding P5,000 may be filed with the National Labor RelationsCommission (NLRC). He stated that their opinion is strictly advisory.

An inquiry was likewise addressed to the Social Security System (SSS). Thereafter, Mr. Romeo R. Tupas, OIC-FID of SSS-Bacolod City, wrote a letter8 to the Personnel Officer of Coca-Cola Bottlers Phils., Inc. informing the latter that the legal staffof his office was of the opinion that the services of respondent partake of the nature of work of a regular company doctorand that he was, therefore, subject to social security coverage.

Respondent inquired from the management of petitioner company whether it was agreeable to recognizing him as a regular

employee. The management refused to do so.



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On February 24, 1994, respondent filed a Complaint9 before the NLRC, Bacolod City, seeking recognition as a regularemployee of petitioner company and prayed for the payment of all benefits of a regular employee, including 13th Month Pay,Cost of Living Allowance, Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus. The case was docketed as RABCase No. 06-02-10138-94.

While the complaint was pending before the Labor Arbiter, respondent received a letter dated March 9, 1995 from petitionercompany concluding their retainership agreement effective thirty (30) days from receipt thereof. This prompted respondentto file a complaint for illegal dismissal against petitioner company with the NLRC, Bacolod City. The case was docketed asRAB Case No. 06-04-10177-95.

In a Decision10 dated November 28, 1996, Labor Arbiter Jesus N. Rodriguez, Jr. found that petitioner company lacked thepower of control over respondent‘s performance of his duties, and recognized as valid the Reta iner Agreement between theparties. Thus, the Labor Arbiter dismissed respondent‘s complaint in the first case, RAB Case No. 06-02-10138-94. Thedispositive portion of the Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered dismissing the instant complaint seeking recognition asa regular employee.

SO ORDERED.11

In a Decision12 dated February 24, 1997, Labor Arbiter Benjamin Pelaez dismissed the case for illegal dismissal (RABCase No. 06-04-10177-95) in view of the previous finding of Labor Arbiter Jesus N. Rodriguez, Jr. in RAB Case No. 06-02-10138-94 that complainant therein, Dr. Dean Climaco, is not an employee of Coca-Cola Bottlers Phils., Inc.

Respondent appealed both decisions to the NLRC, Fourth Division, Cebu City.

In a Decision13 promulgated on November 28, 1997, the NLRC dismissed the appeal in both cases for lack of merit. Itdeclared that no employer-employee relationship existed between petitioner company and respondent based on theprovisions of the Retainer Agreement which contract governed respondent‘s employment.

Respondent‘s motion for reconsideration was denied by the NLRC in a Resolution14 promulgated on August 7, 1998.

Respondent filed a petition for review with the Court of Appeals.

In a Decision promulgated on July 7, 2000, the Court of Appeals ruled that an employer-employee relationship existedbetween petitioner company and respondent after applying the four-fold test: (1) the power to hire the employee; (2) thepayment of wages; (3) the power of dismissal; and (4) the employer‘s power to control the employee with respect to themeans and methods by which the work is to be accomplished.

The Court of Appeals held:

The Retainer Agreement executed by and between the parties, when read together with the Comprehensive Medical Plan

which was made an integral part of the retainer agreements, coupled with the actual services rendered by the petitioner,would show that all the elements of the above test are present.

First, the agreements provide that "the COMPANY desires to engage on a retainer basis the services of a physician and thesaid DOCTOR is accepting such engagement x x x" (Rollo, page 25). This clearly shows that Coca-Cola exercised its powerto hire the services of petitioner.

Secondly, paragraph (2) of the agreements showed that petitioner would be entitled to a final compensation of ThreeThousand Eight Hundred Pesos per month, which amount was later raised to Seven Thousand Five Hundred on the latestcontract. This would represent the element of payment of wages.

Thirdly, it was provided in paragraph (1) of the agreements that the same shall be valid for a period of one year. "The saidterm notwithstanding, either party may terminate the contract upon giving a thirty (30) day written notice to the other." (Rollo,page 25). This would show that Coca-Cola had the power of dismissing the petitioner, as it later on did, and this could bedone for no particular reason, the sole requirement being the former‘s compliance with the 30-day notice requirement.

Lastly, paragraphs (3) and (6) of the agreements reveal that Coca-Cola exercised the most important element of all, that is,control, over the conduct of petitioner in the latter‘s performance of his duties as a doctor for the company.

It was stated in paragraph (3) that the doctor agrees to perform the duties and obligations enumerated in theComprehensive Medical Plan referred to above. In paragraph (6), the fixed and definite hours during which the petitionermust render service to the company is laid down.



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We say that there exists Coca-Cola‘s power to control petitioner because the particular objectives and activities to beobserved and accomplished by the latter are fixed and set under the Comprehensive Medical Plan which was made anintegral part of the retainer agreement. Moreover, the times for accomplishing these objectives and activities are likewisecontrolled and determined by the company. Petitioner is subject to definite hours of work, and due to this, he performs hisduties to Coca-Cola not at his own pleasure but according to the schedule dictated by the company.

In addition, petitioner was designated by Coca-Cola to be a member of its Bacolod Plant‘s Safety Committee. The minutesof the meeting of the said committee dated February 16, 1994 included the name of petitioner, as plant physician, as amongthose comprising the committee.

It was averred by Coca-Cola in its comment that they exercised no control over petitioner for the reason that the latter wasnot directed as to the procedure and manner of performing his assigned tasks. It went as far as saying that "petitioner wasnot told how to immunize, inject, treat or diagnose the employees of the respondent (Rollo, page 228). We believe that if the"control test" would be interpreted this strictly, it would result in an absurd and ridiculous situation wherein we could declarethat an entity exercises control over another‘s activities only in instances where the latter is directed by the former on eachand every stage of performance of the particular activity. Anything less than that would be tantamount to no control at all.

To our minds, it is sufficient if the task or activity, as well as the means of accomplishing it, is dictated, as in this case wherethe objectives and activities were laid out, and the specific time for performing them was fixed by the controlling party.15

Moreover, the Court of Appeals declared that respondent should be classified as a regular employee having rendered sixyears of service as plant physician by virtue of several renewed retainer agreements. It underscored the provision in Article28016 of the Labor Code stating that "any employee who has rendered at least one year of service, whether such service iscontinuous or broken, shall be considered a regular employee with respect to the activity in which he is employed, and hisemployment shall continue while such activity exists." Further, it held that the termination of respondent‘s services withoutany just or authorized cause constituted illegal dismissal.

In addition, the Court of Appeals found that respondent‘s dismissal was an act oppressive to l abor and was effected in awanton, oppressive or malevolent manner which entitled respondent to moral and exemplary damages.

The dispositive portion of the Decision reads:

WHEREFORE, in view of the foregoing, the Decision of the National Labor Relations Commission dated November 28,1997 and its Resolution dated August 7, 1998 are found to have been issued with grave abuse of discretion in applying the

law to the established facts, and are hereby REVERSED and SET ASIDE, and private respondent Coca-Cola Bottlers,Phils.. Inc. is hereby ordered to:

1. Reinstate the petitioner with full backwages without loss of seniority rights from the time his compensation was withheldup to the time he is actually reinstated; however, if reinstatement is no longer possible, to pay the petitioner separation payequivalent to one (1) month‘s salary for every year of service rendered, computed at the rate of his salary at the time he wasdismissed, plus backwages.

2. Pay petitioner moral damages in the amount of P50,000.00.

3. Pay petitioner exemplary damages in the amount of P50,000.00.

4. Give to petitioner all other benefits to which a regular employee of Coca-Cola is entitled from the time petitioner became aregular employee (one year from effectivity date of employment) until the time of actual payment.

SO ORDERED.17

Petitioner company filed a motion for reconsideration of the Decision of the Court of Appeals.

In a Resolution promulgated on January 30, 2001, the Court of Appeals stated that petitioner company noted that itsDecision failed to mention whether respondent was a full-time or part-time regular employee. It also questioned how thebenefits under their Collective Bargaining Agreement which the Court awarded to respondent could be given to himconsidering that such benefits were given only to regular employees who render a full day‘s work of not less that eight

hours. It was admitted that respondent is only required to work for two hours per day.

The Court of Appeals clarified that respondent was a "regular part-time employee and should be accorded all theproportionate benefits due to this category of employees of [petitioner] Corporation under the CBA." It sustained its decisionon all other matters sought to be reconsidered.

Hence, this petition filed by Coca-Cola Bottlers Phils., Inc.

The issues are:

1. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABOR



48

RELATIONS COMMISSION, CONTRARY TO THE DECISIONS OF THE HONORABLE SUPREME COURT ON THEMATTER.

2. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND HOLDING INSTEAD THAT THE WORK OF A PHYSICIAN IS NECESSARY ANDDESIRABLE TO THE BUSINESS OF SOFTDRINKS MANUFACTURING, CONTRARY TO THE RULINGS OF THESUPREME COURT IN ANALOGOUS CASES.

3. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND HOLDING INSTEAD THAT THE PETITIONERS EXERCISED CONTROL OVER THEWORK OF THE RESPONDENT.

4. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND FINDING THAT THERE IS EMPLOYER-EMPLOYEE RELATIONSHIP PURSUANT TO ARTICLE 280 OF THE LABOR CODE.

5. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND FINDING THAT THERE EXISTED ILLEGAL DISMISSAL WHEN THE EMPLOYENT OFTHE RESPONDENT WAS TERMINATED WITHOUT JUST CAUSE.

6. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND FINDING THAT THE RESPONDENT IS A REGULAR PART TIME EMPLOYEE WHO ISENTITLED TO PROPORTIONATE BENEFITS AS A REGULAR PART TIME EMPLOYEE ACCORDING TO THEPETITIONERS‘ CBA.

7. THAT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR, BASED ON A SUBSTANTIALQUESTION OF LAW, IN REVERSING THE FINDINGS OF THE LABOR ARBITERS AND THE NATIONAL LABORRELATIONS COMMISSION, AND FINDING THAT THE RESPONDENT IS ENTITLED TO MORAL AND EXEMPLARYDAMAGES.

The main issue in this case is whether or not there exists an employer-employee relationship between the parties. Theresolution of the main issue will determine whether the termination of respondent‘s employment is illegal.

The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test:(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the powerto control the employee‘s conduct, or the so-called "control test," considered to be the most important element.18

The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that noemployer-employee relationship exists between the parties. The Labor Arbiter and the NLRC correctly found that petitionercompany lacked the power of control over the performance by respondent of his duties. The Labor Arbiter reasoned that theComprehensive Medical Plan, which contains the respondent‘s objectives, duties and obligations, does no t tell respondent"how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients, employees of

[petitioner] company, in each case." He likened this case to that of Neri v. National Labor Relations Commission,19 whichheld:

In the case of petitioner Neri, it is admitted that FEBTC issued a job description which detailed her functions as a radio/telexoperator. However, a cursory reading of the job description shows that what was sought to be controlled by FEBTC wasactually the end result of the task, e.g., that the daily incoming and outgoing telegraphic transfer of funds received andrelayed by her, respectively, tallies with that of the register. The guidelines were laid down merely to ensure that the desiredend result was achieved. It did not, however, tell Neri how the radio/telex machine should be operated.

In effect, the Labor Arbiter held that petitioner company, through the Comprehensive Medical Plan, provided guidelinesmerely to ensure that the end result was achieved, but did not control the means and methods by which respondent

performed his assigned tasks.

The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the company lacks the power ofcontrol that the contract provides that respondent shall be directly responsible to the employee concerned and theirdependents for any injury, harm or damage caused through professional negligence, incompetence or other valid causes ofaction.

The Labor Arbiter also correctly found that the provision in the Retainer Agreement that respondent was on call duringemergency cases did not make him a regular employee. He explained, thus:

Likewise, the allegation of complainant that since he is on call at anytime of the day and night makes him a regularemployee is off-tangent. Complainant does not dispute the fact that outside of the two (2) hours that he is required to be at



49

respondent company‘s premises, he is not at all further required to just sit around in the premises and wait for anemergency to occur so as to enable him from using such hours for his own benefit and advantage. In fact, complainantmaintains his own private clinic attending to his private practice in the city, where he services his patients, bills themaccordingly -- and if it is an employee of respondent company who is attended to by him for special treatment that needshospitalization or operation, this is subject to a special billing. More often than not, an employee is required to stay in theemployer‘s workplace or proximately close thereto that he cannot utilize his time effectively and gainfully for his ownpurpose. Such is not the prevailing situation here.1awphi1.net

In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount

to such control, but are necessary incidents to the Retainership Agreement.

The Court also notes that the Retainership Agreement granted to both parties the power to terminate their relationship upongiving a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termination.

The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of respondent as aretained physician of petitioner company and upholds the validity of the Retainership Agreement which clearly stated that noemployer-employee relationship existed between the parties. The Agreement also stated that it was only for a period of 1year beginning January 1, 1988 to December 31, 1998, but it was renewed on a yearly basis.

Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent.Consequently, there is no basis for the moral and exemplary damages granted by the Court of Appeals to respondent due tohis alleged illegal dismissal.

WHEREFORE, the petition is GRANTED and the Decision and Resolution of the Court of Appeals are REVERSED andSET ASIDE. The Decision and Resolution dated November 28, 1997 and August 7, 1998, respectively, of the NationalLabor Relations Commission are REINSTATED.

SO ORDERED.

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, DANILO BERNABE, MELQUIADES DOHINO, ABONDIO OMERTA, GIL TANGIHAN, SAMUELLABAJO, NESTOR NORBE, RODOLFO CONCEPCION, RICARDO RICHA, RODOLFO NENO, ALBERTO BALATRO,BENJAMIN JUMAMOY, FERMIN DAAROL, JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA, JAIME BUGTAY,and 561 OTHERS, HEREIN REPRESENTED BY KORONADO B. APUZEN, petitionersvs.NATIONAL LABOR RELATIONS COMMISSION, HONORABLE FRANKLIN DRILON, HONORABLE CONRADO B.MAGLAYA, HONORABLE ROSARIO B. ENCARNACION, and STANDARD (PHILIPPINES) FRUIT CORPORATION,respondents.

Koronado B. Apuzen and Jose C. Espinas for petitioners.

The Solicitor General for public respondent.

Dominguez & Paderna Law Offices Co. for private respondent.

PARAS, J .:

This is a petition for review on certiorari of the decision of the National Labor Relations Commission dated December 12,1986 in NLRC Case No. 2327 MC-XI-84 entitled Teofilo Arica et al. vs. Standard (Phil.) Fruits Corporation (STANFILCO)which affirmed the decision of Labor Arbiter Pedro C. Ramos, NLRC, Special Task Force, Regional Arbitration Branch No.XI, Davao City dismissing the claim of petitioners.

This case stemmed from a complaint filed on April 9, 1984 against private respondent Stanfilco for assembly time, moraldamages and attorney's fees, with the aforementioned Regional Arbitration Branch No. XI, Davao City.

After the submission by the parties of their respective position papers (Annex "C", pp. 30-40; Annex "D", Rollo, pp. 41-50),Labor Arbiter Pedro C. Ramos rendered a decision dated October 9, 1985 (Annex 'E', Rollo, pp. 51-58) in favor of privaterespondent STANFILCO, holding that:

Given these facts and circumstances, we cannot but agree with respondent that the pronouncement in thatearlier case, i.e. the thirty-minute assembly time long practiced cannot be considered waiting time or worktime and, therefore, not compensable, has become the law of the case which can no longer be disturbedwithout doing violence to the time- honored principle of res-judicata.



50

WHEREFORE, in view of the foregoing considerations, the instant complaint should therefore be, as it ishereby, DISMISSED.

SO ORDERED. (Rollo, p. 58)

On December 12, 1986, after considering the appeal memorandum of complainant and the opposition of respondents, theFirst Division of public respondent NLRC composed of Acting Presiding Commissioner Franklin Drilon, CommissionerConrado Maglaya, Commissioner Rosario D. Encarnacion as Members, promulgated its Resolution, upholding the Labor Arbiters' decision. The Resolution's dispositive portion reads:

'Surely, the customary functions referred to in the above- quoted provision of the agreement includes thelong-standing practice and institutionalized non-compensable assembly time. This, in effect, estoppedcomplainants from pursuing this case.

The Commission cannot ignore these hard facts, and we are constrained to uphold the dismissal andclosure of the case.

WHEREFORE, let the appeal be, as it is hereby dismissed, for lack of merit.

SO ORDERED. (Annex "H", Rollo, pp. 86-89).

On January 15, 1987, petitioners filed a Motion for Reconsideration which was opposed by private respondent (Annex "I",Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).

Public respondent NLRC, on January 30, 1987, issued a resolution denying for lack of merit petitioners' motion forreconsideration (Annex "K", Rollo, p. 97).

Hence this petition for review on certiorari filed on May 7, 1987.

The Court in the resolution of May 4, 1988 gave due course to this petition.

Petitioners assign the following issues:

1) Whether or not the 30-minute activity of the petitioners before the scheduled working time iscompensable under the Labor Code.

2) Whether or not res judicata applies when the facts obtaining in the prior case and in the case at bar aresignificantly different from each other in that there is merit in the case at bar.

3) Whether or not there is finality in the decision of Secretary Ople in view of the compromise agreementnovating it and the withdrawal of the appeal.

4) Whether or not estoppel and laches lie in decisions for the enforcement of labor standards (Rollo, p. 10).

Petitioners contend that the preliminary activities as workers of respondents STANFILCO in the assembly area iscompensable as working time (from 5:30 to 6:00 o'clock in the morning) since these preliminary activities are necessarilyand primarily for private respondent's benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followed by getting their individual work assignments from the foreman.

(b) Thereafter, they are individually required to accomplish the Laborer's Daily Accomplishment Reportduring which they are often made to explain about their reported accomplishment the following day.

(c) Then they go to the stockroom to get the working materials, tools and equipment.

(d) Lastly, they travel to the field bringing with them their tools, equipment and materials.

All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).

Contrary to this contention, respondent avers that the instant complaint is not new, the very same claim having beenbrought against herein respondent by the same group of rank and file employees in the case of Associated Labor Union andStandard Fruit Corporation, NLRC Case No. 26-LS-XI-76 which was filed way back April 27, 1976 when ALU was thebargaining agent of respondent's rank and file workers. The said case involved a claim for "waiting time", as thecomplainants purportedly were required to assemble at a designated area at least 30 minutes prior to the start of theirscheduled working hours "to ascertain the work force available for the day by means of a roll call, for the purpose ofassignment or reassignment of employees to such areas in the plantation where they are most needed." (Rollo, pp. 64- 65)



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Noteworthy is the decision of the Minister of Labor, on May 12, 1978 in the aforecited case (Associated Labor Union vs.Standard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI-76 where significant findings of facts and conclusions hadalready been made on the matter.

The Minister of Labor held:

The thirty (30)-minute assembly time long practiced and institutionalized by mutual consent of the partiesunder Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as waiting timewithin the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing the Labor Code.

...

Furthermore, the thirty (30)-minute assembly is a deeply- rooted, routinary practice of the employees, andthe proceedings attendant thereto are not infected with complexities as to deprive the workers the time toattend to other personal pursuits. They are not new employees as to require the company to deliver longbriefings regarding their respective work assignments. Their houses are situated right on the area where thefarm are located, such that after the roll call, which does not necessarily require the personal presence, theycan go back to their houses to attend to some chores. In short, they are not subject to the absolute controlof the company during this period, otherwise, their failure to report in the assembly time would justify thecompany to impose disciplinary measures. The CBA does not contain any provision to this effect; the recordis also bare of any proof on this point. This, therefore, demonstrates the indubitable fact that the thirty (30)-minute assembly time was not primarily intended for the interests of the employer, but ultimately for theemployees to indicate their availability or non-availability for work during every working day. (Annex "E",

Rollo, p. 57).

Accordingly, the issues are reduced to the sole question as to whether public respondent National Labor RelationsCommission committed a grave abuse of discretion in its resolution of December 17, 1986.

The facts on which this decision was predicated continue to be the facts of the case in this questioned resolution of theNational Labor Relations Commission.

It is clear that herein petitioners are merely reiterating the very same claim which they filed through the ALU and whichrecords show had already long been considered terminated and closed by this Court in G.R. No. L-48510. Therefore, theNLRC can not be faulted for ruling that petitioners' claim is already barred by res-judicata.

Be that as it may, petitioners' claim that there was a change in the factual scenario which are "substantial changes in thefacts" makes respondent firm now liable for the same claim they earlier filed against respondent which was dismissed. It isthus axiomatic that the non-compensability of the claim having been earlier established, constitute the controlling legal ruleor decision between the parties and remains to be the law of the case making this petition without merit.

As aptly observed by the Solicitor General that this petition is "clearly violative of the familiar principle of res judicata. Therewill be no end to this controversy if the light of the Minister of Labor's decision dated May 12, 1979 that had long acquiredthe character of finality and which already resolved that petitioners' thirty (30)-minute assembly time is not compensable, thesame issue can be re-litigated again." (Rollo, p. 183)

This Court has held:

In this connection account should be taken of the cognate principle that res judicata operates to bar not only

the relitigation in a subsequent action of the issues squarely raised, passed upon and adjudicated in the firstsuit, but also the ventilation in said subsequent suit of any other issue which could have been raised in thefirst but was not. The law provides that 'the judgment or order is, with respect to the matter directly adjudgedor as to any other matter that could have been raised in relation thereto, conclusive between the parties andtheir successors in interest by title subsequent to the commencement of the action .. litigating for the samething and in the same capacity.' So, even if new causes of action are asserted in the second action (e.g.fraud, deceit, undue machinations in connection with their execution of the convenio de transaccion), thiswould not preclude the operation of the doctrine of res judicata. Those issues are also barred, even if notpassed upon in the first. They could have been, but were not, there raised. (Vda. de Buncio v. Estate of thelate Anita de Leon, 156 SCRA 352 [1987]).

Moreover, as a rule, the findings of facts of quasi-judicial agencies which have acquired expertise because their jurisdictionis confined to specific matters are accorded not only respect but at times even finality if such findings are supported by

substantial evidence (Special Events & Central Shipping Office Workers Union v. San Miguel Corporation, 122 SCRA 557[1983]; Dangan v. NLRC, 127 SCRA 706 [1984]; Phil. Labor Alliance Council v. Bureau of Labor Relations, 75 SCRA 162[1977]; Mamerto v. Inciong, 118 SCRA 265 (1982]; National Federation of Labor Union (NAFLU) v. Ople, 143 SCRA 124[1986]; Edi-Staff Builders International, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]; Asiaworld Publishing House, Inc. v.Ople, 152 SCRA 219 [1987]).

The records show that the Labor Arbiters' decision dated October 9, 1985 (Annex "E", Petition) pointed out in detail thebasis of his findings and conclusions, and no cogent reason can be found to disturb these findings nor of those of theNational Labor Relations Commission which affirmed the same.

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the decision of the National Labor RelationsCommission is AFFIRMED.



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SO ORDERED.

G.R. No. 75763 August 2, 1987

GEORGE R. PALENCIA, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, ABERDEEN COURT INC., and RICARDO NG, respondents.

CORTES, J.:

This petition for certiorari originated from a complaint filed by petitioner George R. Palencia against the Aberdeen Court, Inc.for illegal dismissal and the recovery of specified money claims. After direct and cross examination of the complainant andhis witnesses before the Labor Arbiter the parties agreed to forego further presentation of other testimonial evidence.Instead they filed memoranda and supplemental position papers on the basis of which the case was submitted forresolution. Labor Arbiter Manuel R. Caday found for the complainant, the dispositive part of his decision reads:

PREMISES CONSIDERED, judgment is hereby rendered declaring the respondents guilty of illegallydismissing the complainant and ordering them to reinstate him to his former position with full backwagesfrom the date of his dismissal on March 2, 1984, until actually reinstated without loss of seniority rights and

other rights granted by law.

The claim for illegal deduction, overtime pay, premium pay for holiday and rest day, underpayment of 13thmonth pay, unpaid wages and commission and sick leave pay, is hereby dismissed for lack of merit.

There being no clear and sufficient evidence of moral damages, the same must also be dismissed for lackof merit.

SO ORDERED.

On appeal the Second Division of the National Labor Relations Commission (NLRC) composed of Ricardo C. Castro asPresiding Commissioner with Commissioners Cecilio T. Seno and Federico O. Borromeo as members, set aside the Labor Arbiter's award of backwages, but upheld his order of reinstatement, thus:

WHEREFORE, the decision appealed from is hereby Set Aside and a new one entered orderingcomplainant to report for work within ten (10) days from receipt hereof and for the respondents to accepthim back without loss of seniority rights and without backwages.

SO ORDERED.

Motion for reconsideration of the NLRC decision was sought on the following grounds:

A. THAT WITH DUE RESPECT TO THE HONORABLE COMMISSION MATERIAL AND PERTINENT FACTS COULDHAVE BEEN OVERLOOKED.

B. THAT THE PRETENSION OF RESPONDENT APPELLANT THAT HEREIN COMPLAINANT APPELLEE WAS NOTDISMISSED DESERVES SCANT CONSIDERATION.

C. THAT COMPLAINANT APPELLEE IS ENTITLED TO FULL BACKWAGES AND REINSTATEMENT AND BENEFITSUNDER THE LAW, AS A MATTER OF JUSTICE AND EQUITY.

Upon denial, the present petition for certiorari was filed alleging that the NLRC had committed grave abuse of discretionamounting to lack of jurisdiction in reversing the findings and conclusions of the labor arbiter and that there is no plain,speedy, and adequate remedy available under the ordinary course of law. The following two errors are assigned:

IN FLAGRANTLY AND GRAVELY FAILING TO APPLY PETITIONER'S CONSTITUTIONAL RIGHT AGAINST SELF-INCRIMINATION, TO DUE PROCESS, AND PERTINENT PROVISIONS OF THE LABOR CODE;

IN GROSSLY AND SERIOUSLY DISREGARDING, MISAPPRECIATING, AND MISCONCEIVING PALPABLY ANDMANIFESTLY CLEAR EXISTING FACTS ON RECORD TO PETITIONER'S GRAVE DETRIMENT.

The antecedent facts are as follows: Petitioner Palencia, an employee of Aberdeen Court, Inc. was assigned as a marketerand/or collector. On February 23, 1984 after a trip to Baguio to buy vegetables for the respondent, and after the cargo hadbeen unloaded from the company van, a plastic bag containing three (3) pieces of Baguio pechay was seen on the driver'sseat. The next day according to petitioner Palencia, he underwent a series of investigations (Rollo p. 58) which started at11:00 a.m. An investigator of the Quezon City police took the plastic bag containing the vegetables and invited Palencia tothe police station. Palencia apprised of his constitutional rights invoked his right to counsel and declined to give anystatement (Rollo p. 92). He was not released until about midnight of that day. The report on the police investigation of Attempted qualified Theft was prepared on the same date addressed to the City Fiscal.



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From February 25 to March 1, 1984 Palencia did not report for work. According to him he went under treatment for gastriculcers. On March 2, 1984 he went back to Aberdeen Court but was not then admitted. He was asked to return the followingday, according to the company because it wanted to consult its lawyer. Palencia did not come back. Instead on March6,1984 he filed the complaint for illegal dismissal.

The principal issue in the case before the labor arbiter, on appeal to the NLRC and in the present petition for certiorari is:Was Palencia dismissed or did he abandon his work?

Palencia insists that he was dismissed and the labor arbiter so found. The NLRC on review held otherwise.

The question of whether or not evidence adduced establishes dismissal or abandonment raises a factual issue. So does thefirst error assigned in this petition i.e., that the NLRC "flagrantly and gravely failing (failed) to apply petitioner's constitutionalright against self-incrimination, to due-process, and pertinent provisions of the Labor Code". Notwithstanding its beingcouched in terms which appear to raise a question of law, it involves a careful examination of facts to determine if there isbasis for the assertion that these constitutional rights had been disregarded. There is neither averment nor evidence that atany point in the proceedings Palencia was ever compelled to be a witness against himself. When at the police investigationhe invoked the right to counsel and to the right against self-incrimination, the fact was made of record (Rollo p. 92). Theassertion that the right to due process has been violated is even more tenuous. Palencia's complaint was given due course,he was afforded every opportunity to be heard, his Memoranda and other manifestations were taken into account by thelabor arbiter and the NLRC acting under provisions of the Labor Code.

Following a long line of decisions this Court has consistently declined to disturb the findings of fact of the then Court ofIndustrial Relations whose functions the NLRC now performs. [Pambusco Employees' Union Inc. v. Court of IndustrialRelations, 68 Phil. 591 (1939); Manila Electric Co. v. National Labor Union, 70 Phil. 617 (1940); San Carlos Milling Co. v.Court of Industrial Relations, 111 Phil. 323 (1961), 1 SCRA 734; Philippine Educational Institution v. MLQSEA Faculty Assn., 135 Phil. 282 (1968), 26 SCRA 272; University of Pangasinan Faculty Union v. University of Pangasinan and NLRC,G.R. No. L-63122, February 20,1984,127 SCRA 691]. The findings of fact are conclusive and will not be disturbed in theabsence of a showing that there has been grave abuse of discretion [Philippine Educational Institution v. MLQSEA Faculty Association, 26 SCRA 272, 276] and there being no indication that the findings are unsubstantiated by evidence [Universityof Pangasinan Faculty Union v. University of Pangasinan and NLRC, G.R. No. 63122, February 20, 1984, 127 SCRA 694,704].

In the present case the NLRC committed no grave abuse of discretion amounting to lack of jurisdiction in setting aside thedecision of the labor arbiter and entering a new one ordering the complainant to report for work within ten (10) days fromreceipt (hereof) and for the respondents to accept him back without loss of seniority rights and without backwages.

WHEREFORE, PREMISES CONSIDERED the petition is DISMISSED for lack of merit

[G.R. No. L-63122. February 20, 1984.]

UNIVERSITY OF PANGASINAN FACULTY UNION, Petitioner, v. UNIVERSITY OF PANGASINAN And NATIONAL LABORRELATIONS COMMISSION, Respondents.

1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; PRESIDENTIAL DECREES ON EMERGENCY COST OFLIVING ALLOWANCE; REQUISITES FOR ENTITLEMENT TO ALLOWANCES PROVIDED THEREUNDER. — The various

Presidential Decrees on ECOLAs to wit: PD‘s 1614, 1634, 1678 and 1713, pro vide on "Allowances of Fulltime Employees . .." that "Employees shall be paid in full the required monthly allowance regardless of the number of their regular workingdays if they incur no absences during the month. If they incur absences without pay, the amounts corresponding to theabsences may be deducted from the monthly allowance . . ." ; and on "Leave of Absence Without Pay", that "All coveredemployees shall be entitled to the allowance provided herein when they are on leave of absence with pay."cralaw virtua1awlibrary

2. ID.; ID.; ID.; "NO WORK, NO PAY" PRINCIPLE NOT APPLICABLE‘ CASE AT BAR. — It is beyond dispute that thepetitioner‘s members are full-time employees receiving their monthly salaries irrespective of the number of working days orteaching hours in a month. However, they find themselves in a most peculiar situation whereby they are forced to go onleave during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees‘

control. The duration of the semestral break varies from year to year dependent on a variety of circumstances affecting attimes only the private respondent but at other times all educational institutions in the country. As such, these breaks cannotbe considered as absences within the meaning of the law for which deductions may be made from monthly allowances. The"No work, no pay" principle does not apply in the instant case. The petitioner‘s members received their regular salariesduring this period. It is clear from the aforequoted provision of law that it contemplates a "no work" situation where theemployees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem, absent themselvesduring semestral breaks. Rather, they are constrained to take mandatory leave from work. For this they cannot be faultednor can they be begrudged that which is due them under the law.

3. ID.; ID.; ID.; EMPLOYEES WHETHER PAID ON MONTHLY OR DAILY BASIS ENTITLED TO DAILY LIVING ALLOWANCE WHEN PAID THEIR BASIC WAGE. — Respondent‘s contention that the "factor receiving a salary alone



54

should not be the basis of receiving ECOLA", is likewise, without merit. Particular attention is brought to the ImplementingRules and Regulations of Wage Order No. 1 to wit: "Sec. 5. Allowance for Unworked Days. — a) All covered employeeswhether paid on a monthly or daily basis shall be entitled to their daily living allowance when they are paid their basic.." . .

4. ID.; ID.; ID.; PURPOSE OF THE LAW. — The legal principles of "No work, no pay; No pay, no ECOLA" must necessarilygive way to the purpose of the law to augment the income of employees to enable them to cope with the harsh livingconditions brought about by inflation; and to protect employees and their wages against the ravages brought by these

conditions. Significantly, it is the commitment of the State to protect labor and to provide means by which the difficultiesfaced by the working force may best be alleviated.

5. ID.; ID.; ID.; PRESIDENTIAL DECREE 451; CONSTRUED. — Respondent overlooks the elemental principle of statutoryconstruction that the general statements in the whereas clauses cannot prevail over the specific or particular statements inthe law itself which define or limit the purposes of the legislation or proscribe certain acts. True, the whereas clauses of PD451 provide for salary and or wage increase and other benefits, however, the same do not delineate the source of suchfunds and it is only in Section 3 which provides for the limitations wherein the intention of the framers of the law is clearlyoutlined. The law is clear. The sixty (60%) percent incremental proceeds from the tuition increase are to be devoted entirelyto wage or salary increases which means increases in basic salary. The law cannot be construed to include allowanceswhich are benefits over and above the basic salaries of the employees.

6. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF NATIONAL LABOR RELATIONS COMMISSION ARE BINDINGWHEN FULLY SUBSTANTIATED BY EVIDENCE. — As evidenced by the payrolls submitted by them during the periodSeptember 16 to September 30, 1981, the faculty members have been paid for the extra loads. We agree with therespondents that this issue involves a question of fact properly within the competence of the respondent NLRC to passupon. The findings of fact of the respondent Commission are binding on this Court there being no indication of their beingunsubstantiated by evidence.

This is a petition for review on certiorari pursuant to Rule 65 of the Rules of Court to annul and to set aside the decision ofrespondent National Labor Relations Commission (NLRC) dated October 25, 1982, dismissing the appeal of petitioner inNLRC Case No. RBI-47-82, entitled "University of Pangasinan Faculty Union, complainant, versus University ofPangasinan, Respondent." chanrobles law library : red

Petitioner is a labor union composed of faculty members of the respondent University of Pangasinan, an educationalinstitution duly organized and existing by virtue of the laws of the Philippines.

On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed a complaint against the privaterespondent with the Arbitration Branch of the NLRC, Dagupan District Office, Dagupan City. The complaint seeks: (a) thepayment of Emergency Cost of Living Allowances (ECOLA) for November 7 to December 5, 1981, a semestral break; (b)salary increases from the sixty (60%) percent of the incremental proceeds of increased tuition fees; and (c) payment ofsalaries for suspended extra loads.

The petitioner‘s members are full-time professors, instructors, and teachers of respondent University. The teachers in thecollege level teach for a normal duration of ten (10) months a school year, divided into two (2) semesters of five (5) monthseach, excluding the two (2) months summer vacation. These teachers are paid their salaries on a regular monthly basis.

In November and December, 1981, the petitioner‘s members were fully paid their regular monthly salaries. However, fromNovember 7 to December 5, during the semestral break, they were not paid their ECOLA. The private respondent claimsthat the teachers are not entitled thereto because the semestral break is not an integral part of the school year and therebeing no actual services rendered by the teachers during said period, the principle of "No work, no pay" applies.

During the same school year (1981-1982), the private respondent was authorized by the Ministry of Education and Cultureto collect, as it did collect, from its students a fifteen (15%) percent increase of tuition fees. Petitioner‘s members demandeda salary increase effective the first semester of said schoolyear to be taken from the sixty (60%) percent incrementalproceeds of the increased tuition fees. Private respondent refused, compelling the petitioner to include said demand in thecomplaint filed in the case at bar. While the complaint was pending in the arbitration branch, the private respondent grantedan across-the-board salary increase of 5.86%. Nonetheless, the petitioner is still pursuing full distribution of the 60% of theincremental proceeds as mandated by the Presidential Decree No. 451.

Aside from their regular loads, some of petitioner‘s members were given extra loads to handle during the same 1981-1982schoolyear. Some of them had extra loads to teach on September 21, 1981, but they were unable to teach as classes in alllevels throughout the country were suspended, although said days was proclaimed by the President of the Philippines as aworking holiday. Those with extra loads to teach on said day claimed they were not paid their salaries for those loads, butthe private respondent claims otherwise.

The issue to be resolved in the case at bar are the following:chanrob1es virtual 1aw library



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I

"WHETHER OR NOT PETITIONER‘S MEMBERS ARE ENTITLED TO ECOLA DURING THE SEMESTRAL BREAK FROMNOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL YEAR.

II

"WHETHER OR NOT 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES SHALL BE DEVOTEDEXCLUSIVELY TO SALARY INCREASE,

III

"WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER 21, 1981 WASPROVEN BY SUBSTANTIAL EVIDENCE."cralaw virtua1aw library

Anent the first issue, the various Presidential Decrees on ECOLAs to wit: PD‘s 1614, 1634, 1678 and 1713, provide on"Allowances of Fulltime Employees . . ." that "Employees shall be paid in full the required monthly allowance regardless ofthe number of their regular working days if they incur no absences during the month. If they incur absences without pay, theamounts corresponding to the absences may be deducted from the monthly allowance . . ." ; and on "Leave of AbsenceWithout Pay", that "All covered employees shall be entitled to the allowance provided herein when they are on leave ofabsence with pay."cralaw virtua1aw library

It is beyond dispute that the petitioner‘s members are full-time employees receiving their monthly salaries irrespective of the

number of working days or teaching hours in a month. However, they find themselves in a most peculiar situation wherebythey are forced to go on leave during semestral breaks. These semestral breaks are in the nature of work interruptionsbeyond the employees‘ control. The duration of the semestral break varies from year to year dependent on a variety ofcircumstances affecting at times only the private respondent but at other times all educational institutions in the country. Assuch, these breaks cannot be considered as absences within the meaning of the law for which deductions may be madefrom monthly allowances. The "No work, no pay" principle does not apply in the instant case. The petitioner‘s membersreceived their regular salaries during this period. It is clear from the aforequoted provision of law that it contemplates a "nowork" situation where the employees voluntarily absent themselves. Petitioners, in the case at bar, certainly do not, advoluntatem, absent themselves during semestral breaks. Rather, they are constrained to take mandatory leave from work.For this they cannot be faulted nor can they be begrudged that which is due them under the law. To a certain extent, theprivate respondent can specify dates when no classes would be held. Surely, it was not the intention of the framers of thelaw to allow employers to withhold employee benefits by the simple expedient of unilaterally imposing "no work" days andconsequently avoiding compliance with the mandate of the law for those days.chanrobles.com.ph : virtual law library

Respondent‘s contention that "the fact of receiving a salary alone should not be the basis of r eceiving ECOLA", is, likewise,without merit. Particular attention is brought to the Implementing Rules and Regulations of Wage Order No. 1 to wit.

SECTION 5. Allowance for Unworked Days. —

"a) All covered employees whether paid on a monthly or daily basis shall be entitled to their daily living allowance when theyare paid their basic wage."cralaw virtua1aw library

This provision, at once refutes the above contention. It is evident that the intention of the law is to grant ECOLA upon thepayment of basic wages. Hence, we have the principle of "No pay, no ECOLA" the converse of which finds application in thecase at bar. Petitioners cannot be considered to be on leave without pay so as not to be entitled to ECOLA, for, as earlierstated, the petitioners were paid their wages in full for the months of November and December of 1981, notwithstanding theintervening semestral break. This, in itself, is a tacit recognition of the rather unusual state of affairs in which teachers findthemselves. Although said to be on forced leave, professors and teachers are, nevertheless, burdened with the task ofworking during a period of time supposedly available for rest and private matters. There are papers to correct, students toevaluate, deadlines to meet, and periods within which to submit grading reports. Although they may be considered by therespondent to be on leave, the semestral break could not be used effectively for the teacher‘s own purposes for the natureof a teacher‘s job imposes upon him further duties which must be done during the said period of time. Learning is a neverending process. Teachers and professors must keep abreast of developments all the time. Teachers cannot also wait for the







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capacities of private educational institutions are not dependent on the increases in tuition fees allowed by P.D. 451. Accommodation of the allowances required by law require wise and prudent management of all the university resourcestogether with the incremental proceeds of tuition increases. Cognizance should be taken of the fact that the privaterespondent had, before PD 451, managed to grant all allowances required by law. It cannot now claim that it could not affordthe same, considering that additional funds are even granted them by the law in question. We find no compelling reason,therefore, to deviate from our previous ruling in the University of the East case even as we take the second hard look at thedecision requested by the private Respondent. This case was decided in 1982 when PDs 1614, 1634, 1678, and 1713which are also the various Presidential Decrees on ECOLA were already in force. PD 451 was interpreted in the light ofthese subsequent legislations which bear upon but do not modify nor amend, the same. We need not go beyond the ruling

in the University of the East case.

Coming now to the third issue, the respondents are of the considered view that as evidenced by the payrolls submitted bythem during the period September 16 to September 30, 1981, the faculty members have been paid for the extra loads. Weagree with the respondents that this issue involves a question of fact properly within the competence of the respondentNLRC to pass upon. The findings of fact of the respondent Commission are binding on this Court there being no indicationof their being unsubstantiated by evidence. We find no grave abuse in the findings of respondent NLRC on this matter towarrant reversal. Assuming arguendo, however, that the petitioners have not been paid for these extra loads, they are notentitled to payment following the principles of "No work, no pay." This time, the rule applies. Involved herein is a matterdifferent from the payment of ECOLA under the first issue. We are now concerned with extra, not regular loads for which thepetitioners are paid regular salaries every month regardless of the number of working days or hours in such a month. Extra

loads should be paid for only when actually performed by the employee. Compensation is based, therefore, on actual workdone and on the number of hours and days spent over and beyond their regular hours of duty. Since there was no work onSeptember 21, 1981, it would now be unfair to grant petitioner‘s demand for extra wages on that day.chanrobles law library :red

Finally, disposing of the respondent‘s charge of petitioner‘s lack of legal capacity to sue, suffice it to say that this questioncan no longer be raised initially on appeal or certiorari. It is quite belated for the private respondent to question thepersonality of the petitioner after it had dealt with it as a party in the proceedings below. Furthermore, it was not disputedthat the petitioner is a duly registered labor organization and as such has the legal capacity to sue and be sued. Registrationgrants it the rights of a legitimate labor organization and recognition by the respondent University is not necessary for it toinstitute this action in behalf of its members to protect their interests and obtain relief from grievances. The issues raised by

the petitioner do not involve pure money claims but are more intricately intertwined with conditions of employment.

WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is ordered to pay its regular fulltimeteachers/employees emergency cost of living allowances for the semestral break from November 7 to December 5, 1981and the undistributed balance of the sixty (60%) percent incremental proceeds from tuition increases for the sameschoolyear as outlined above. The respondent Commission is sustained insofar as it DENIED the payment of salaries forthe suspended extra loads on September 21, 1981.

SO ORDERED.

G.R. No. 76746 July 27, 1987

DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL MANAGER, petitioners,vs.NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO, HON. ARBITER AMELIA M.GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and REYNALDO BODEGAS, respondents.

GUTIERREZ, JR., J.:

This is a petition to review the May 16, 1986 resolution of respondent National Labor Relations Commission (NLRC)affirming the Labor Arbiter's order in NLRC Case No. NCR-73162083. The sole issue raised is the proper basis for the

computation of backwages in favor of an illegally dismissed employee.

The facts of the case are simple and uncontroverted.

On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against petitioner Durabuilt,a tire recapping company.

In a decision rendered by the Labor Arbiter on February 13, 1984, the private respondent was ordered reinstated to hisformer position with full backwages, from the time he was terminated up to the time he is actually reinstated, without loss ofseniority rights and benefits accruing to him.

The petitioners failed to file a seasonable appeal and entry of final judgment was made on July 8, 1985.



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On August 8, 1985, the Acting Chief of Research and Information and the Corporation Auditing Examiner of the thenMinistry of Labor and Employment submitted a computation of backwages, ECOLA, 13th month pay, sick and vacationleave benefits in favor of Reynaldo Bodegas in the total amount of P24,316.38.

The petitioner filed its opposition to the computation on the ground that it contemplated a straight computation of twenty six(26) working days in one month when the period covered by the computation was intermittently interrupted due to frequentbrownouts and machine trouble and that respondent Bodegas had only a total of 250.75 days of attendance in 1982 due toabsences. According to the petitioner, Bodegas is entitled only to the amount of P3,834.05 broken down as follows: salaries— P1,993.00; ECOLA — P1,433.50, and 13th month pay — P407.55.

On October 23, 1985, the Labor Arbiter denied the opposition to the computation. The petitioner appealed to the NLRCwhich, in an order dated May 16, 1986, affirmed the order of the Labor Arbiter and dismissed the appeal.

Claiming grave abuse of discretion on the part of the public respondents, Durabuilt filed the instant petition.

Backwages, in general, are granted on grounds of equity for earnings which a worker or employee has lost due to hisdismissal from work (New Manila Candy Workers Union (NACONWA-PAFLU v. CIR, 86 SCRA 37).

The general principle is that an employee is entitled to receive as backwages all the amounts he may have lost starting fromthe date of his dismissal up to the time of his reinstatement (Capital Garment Corporation v. Ople, 117 SCRA 473; NewManila Candy Workers' Union (NACONWA-PAFLU) v. CIR, supra).

In a line of cases, this Court has established a policy fixing the amount of backwages to a just and reasonable level withoutqualification or deduction (Insular Life Assurance Co., Ltd. Employees' Association-NATU v. Insular Life Assurance Co.,Ltd., 76 SCRA 501; Feati University Club v. Feati University, 58 SCRA 395; Mercury Drug Co., Inc. v. CIR, 56 SCRA 694).The respondents center their attention on the above underlined portion of this policy. Hence, their contention that thedeductions cited by the petitioners cannot be made.

In their bid to recover a greater amount of backwages, the rationale of the policy has escaped the respondents'consideration. In Insular Life Assurance Employees Association-NATU v. Insular Life Assurance Co., Ltd. (76 SCRA 50) weheld that to fix the amount of backwages without qualification or deduction simply means that the workers are to be paidtheir backwages fixed as of the time of their dismissal or strike without deduction for their earnings elsewhere during theirlaw-off and without qualification of their backwages as thus fixed; i.e. unqualified by any wage increases or other benefitsthat may have been received by their co-workers who were not dismissed or did not go on strike. The principle is justified

"as a realistic, reasonable and mutually beneficial solution for it relieves the employees from proving their earnings duringtheir law-offs and the employer from submitting counter proofs. It was meant to obviate the twin evils of Idleness on the partof the employees and attrition and undue delay in satisfying the award on the part of the employer" (New Manila CandyWorkers Union NACONWA-PAFLU v. CIR supra). The same was not to establish an inflexible rule of computation of anyBackwages due an employee.

The age-old rule governing the relation between labor and capital, or management and employee of a "fair day's wage for afair day's labor" remains as the basic factor in determining employees' wages, and for that matter backwages. If there is nowork performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready towork but was illegally locked out, or suspended (SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746).

The illegal dismissal of the private respondent is conceded by the petitioner. It is willing to pay backwages. However, thepetitioner argues that for days where no work was required and could be done by its employees, no wages could have been

earned and, thereafter, lost by said employees to justify an award of backwages. We quote with approval the SolicitorGeneral's comment,

* to wit:

From the indubitable facts on record, it appears that petitioners have valid reasons to claim that certain days shouldnot be considered days worked for purposes of computing private respondent's backwages since their business wasnot in actual operation due to brownouts or power interruption and the retrenchment of workers they had during theperiod of private respondent's dismissal.

It cannot be denied that during the past years particularly in 1983, there was chronic electrical power interruptionresulting to disruption of business operations. To alleviate the situation, the government thru the Ministry of Tradeand Industry called on the industrial sector to resort to the so-called Voluntary Loan Curtailment Plan (or VLCP),whereby brownouts or electrical power interruption was scheduled by area. The program while it may have beencalled 1. voluntary" was not so as electrical power consumers had no choice then due to the prevailing energy

crisis.

Petitioners heeding the government's call, participated in the VLCP as indicated in their statement of conformitydated November 23, 1982. Thus, beginning March 21, 1983 and every Wednesday thereafter, petitioner's business(which indicentally is recapping rubber tires) was not in actual operation. No less than the former Minister of Tradeand Industry expressed his gratitude to petitioners for participating in the VLCP. Petitioners substantiated claimtherefore, that the days during which they were not in operation due to the VLCP should be excluded in the numberof days worked for purposes of computing private respondents backwages stands reasonable and should havebeen considered by the corporation auditing examiner.1avvphi1

Moreover, as early as May 1978, the Ministry of Labor and Employment, thru Policy Instruction No. 36, has said that—

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2. Brownouts running for more than twenty minutes may not be treated as hours worked provided that any of thefollowing conditions are present;

a) The employees can leave their work place or go elsewhere whether within or without the work premises;or

b) The employees can use the time effectively for their own interest.

It is of record that during electrical power interruptions, petitioners business was not in operation. This was neverdisputed by private respondent.

Petitioners' claim that the period (December 1983) during which they effected retrenchment of workers owing toeconomic crisis then prevailing likewise appears plausible. There is substantial evidence consisting of reports toMOLE and Social Security System showing that petitioners had laid off workers due to lack of raw materials. Thepetitioners payrolls submitted to support their objection to computation indicate that the number of working days wasreduced from the normal weekly six working days to four working days for a great number of petitioners' workers.Obviously, private respondent could not have been among those laid off, as at that time he was already dismissedby petitioner. (Rollo, pp. 31-34).

Thus, we have held that where the failure of workers to work was not due to the employer's fault, the burden of economicloss suffered by the employees should not be shifted to the employer. Each party must bear his own loss (SSS v. SSS

Supervisors' Union-CUGCO, supra; Pan-American World Airways, Inc. v. CIR, 17 SCRA 813). As pointed out by theSolicitor General —

... to allow payment of backwages of P24,316.68 as ordered by public respondents instead of P3,834.16 aspetitioners claim and which appears to be just and reasonable under the circumstances of this case would not onlybe unconscionable but would be grossly unfair to other employees who were not paid when petitioners' businesswas not in operation. (Rollo, p. 35).

Indeed, it would neither be fair nor just to allow respondent to recover something he has not earned and could not haveearned and to further penalize the petitioner company over and above the losses it had suffered due to lack of raw materialsand the energy-saving programs of the government. The private respondent cannot be allowed to enrich himself at theexpense of the petitioner company. The computation of backwages should be based on daily rather than on monthly payschedules where, as in the case at bar, such basis is more realistic and accurate. (Compania Maritima v. United Seamen's

Union of the Philippines, 65 SCRA 393).

In conclusion, we again quote the Solicitor General's comment:

Finally, what strengthens petitioners claim for mitigated liability is their evident good faith as manifested by theirreinstatement of private respondent while the case for illegal dismissal was still pending and their willingness to paybackwages. While it is true that as a general rule order of reinstatement carries with it an award of backwages (Art.280, Labor Code) this Honorable Court did not only mitigate but absolved employers from liability of backwageswhere good faith is evident (Findlay Millar Timber Co. v. PLASLU, 6 SCRA 26: Cromwell Com. Employees &Laborers Union v. CIR, 13 SCRA 259, Norton and Harrison Labor Union v. Harrison Co. Inc. 15 SCRA 310; PAL v.PALEA, 57 SCRA 489; Cruz v. MOLE, 120 SCRA 15). There is no indication, to paraphrase this Honorable Court'sruling in Pantranco North Express Inc. v. NLRC (126 SCRA 526) that private respondent was a "victim of arbitraryand high handed action. Rollo, pp. 34-35).

WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The order of the Labor Arbiter, Amelia M. Guloyin NLRC Case No. NCR-7-3162083, dated October 23, 1985, as affirmed by the NLRC is SET ASIDE. The petitioner isordered to pay private respondent his backwages from the time he was terminated up to the time he was actually reinstatedcomputed on the basis of the number of days when petitioner's business was in actual operation. The number of dayswhere no work was required and could be done by petitioner's employees on account of shutdowns due to electrical powerinterruptions, machine repair, and lack of raw materials are not considered hours worked for purposes of computing thepetitioner's obligation to respondent employee. In no case shall the award exceed three year's backpay as above computed.

SO ORDERED.

G.R. No. 132805 February 2, 1999

PHILIPPINE AIRLINES, INC., petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ROMULUS PROTACIO and DR. HERMINIO A.FABROS, respondents.

Petitioner Philippine Airlines, Inc. assails the decision of the National Labor Relations Commission dismissing its appealfrom the decision of Labor Arbiter Romulus S. Protacio which declared the suspension of private respondent Dr. Herminio A.Fabros illegal and ordered petitioner to pay private respondent the amount equivalent to all the benefits he should havereceived during his period of suspension plus P500,000.00 moral damages.

The facts are as follow:



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Private respondent was employed as flight surgeon at petitioner company. He was assigned at the PAL Medical Clinic atNichols and was on duty from 4:00 in the afternoon until 12:00 midnight.

On February 17, 1994, at around 7:00 in the evening, private respondent left the clinic to have his dinner at his residence,which was about five-minute drive away. A few minutes later, the clinic received an emergency call from the PAL CargoServices. One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The nurse on duty, Mr. Merlino Eusebio,called private respondent at home to inform him of the emergency. The patient arrived at the clinic at 7:50 in the eveningand Mr. Eusebio immediately rushed him to the hospital. When private respondent reached the clinic at around 7:51 in theevening, Mr. Eusebio had already left with the patient. Mr. Acosta died the following day.

Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon ordered the Chief Flight Surgeon toconduct an investigation. The Chief Flight Surgeon, in turn, required private respondent to explain why no disciplinarysanction should be taken against him.

In his explanation, private respondent asserted that he was entitled to a thirty-minute meal break; that he immediately lefthis residence upon being informed by Mr. Eusebio about the emergency and he arrived at the clinic a few minutes later; thatMr. Eusebio panicked and brought the patient to the hospital without waiting for him.

Finding private respondent's explanation unacceptable, the management charged private respondent with abandonment ofpost while on duty. He was given ten days to submit a written answer to the administrative charge.

In his answer, private respondent reiterated the assertions in his previous explanation. He further denied that he abandonedhis post on February 17, 1994. He said that he only left the clinic to have his dinner at home. In fact, he returned to the clinicat 7:51 in the evening upon being informed of the emergency.

After evaluating the charge as well as the answer of private respondent, petitioner company decided to suspend privaterespondent for three months effective December 16, 1994.

Private respondent filed a complaint for illegal suspension against petitioner.

On July 16, 1996, Labor Arbiter Romulus A. Protasio rendered a decision 1 declaring the suspension of private respondent

illegal. It also ordered petitioner to pay private respondent the amount equivalent to all the benefits he should have receivedduring his period of suspension plus P500,000.00 moral damages. The dispositive portion of the decision reads:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered declaring the suspension ofcomplainant as illegal, and ordering the respondents the restitution to the complainant of all employmentbenefits equivalent to his period of suspension, and the payment to the complainant of P500,000.00 by wayof moral damages.

2

Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal after finding that the decision of the Labor Arbiter is supported by the facts on record and the law on the matter.

3 The NLRC likewise denied petitioner's motion for

reconsideration. 4

Hence, this petition raising the following arguments:

1. The public respondents acted without or in excess of their jurisdiction

and with grave abuse of discretion in nullifying the 3-month suspension ofprivate respondent despite the fact that the private respondent hascommitted an offense that warranted the imposition of disciplinary action.

2. The public respondents acted without or in excess of their jurisdictionand with grave abuse of discretion in holding the petitioner liable for moraldamages:

(a) Despite the fact that no formal hearing whatsoever wasconducted for complainant to substantiate his claim;

(b) Despite the absence of proof that the petitioner acted inbad faith in imposing the 3-month suspension; and

(c) Despite the fact that the Labor Arbiter's award of moraldamages is highly irregular, considering that it was morethan what the private respondent prayed for.

5

We find that public respondents did not err in nullifying the three-month suspension of private respondent. They, however,erred in awarding moral damages to private respondent.

First, as regards the legality of private respondent's suspension. The facts do not support petitioner's allegation that privaterespondent abandoned his post on the evening of February 17, 1994. Private respondent left the clinic that night only tohave his dinner at his house, which was only a few minutes' drive away from the clinic. His whereabouts were known to thenurse on duty so that he could be easily reached in case of emergency. Upon being informed of Mr. Acosta's condition,private respondent immediately left his home and returned to the clinic. These facts belie petitioner's claim of abandonment.



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Petitioner argues that being a full-time employee, private respondent is obliged to stay in the company premises for not lessthan eight (8) hours. Hence, he may not leave the company premises during such time, even to take his meals.

We are not impressed.

Art. 83 and 85 of the Labor Code read:

Art. 83. Normal hours of work. — The normal hours of work of any employee shall not exceed eight (8)hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or inhospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours foreight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies ofthe service require that such personnel work for six (6) days or forty-eight (48) hours, in which case theyshall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for workon the sixth day. For purposes of this Article, "health personnel" shall include: resident physicians, nurses,nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians,psychologists, midwives, attendants and all other hospital or clinic personnel. (emphasis supplied)

Art. 85. Meal periods. — Subject to such regulations as the Secretary of Labor may prescribe, it shall be theduty of every employer to give his employees not less than sixty (60) minutes time-off for their regular

meals.

Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:

Sec. 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not lessthan one (1) hour time-off for regular meals, except in the following cases when a meal period of not lessthan twenty (20) minutes may be given by the employer provided that such shorter meal period is creditedas compensable hours worked of the employee;

(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;

(b) Where the establishment regularly operates not less than sixteen hours a day;

(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries,equipment or installations to avoid serious loss which the employer would otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered ascompensable working time.

Thus, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employeesmust take their meals within the company premises. Employees are not prohibited from going out of the premises as long asthey return to their posts on time. Private respondent's act, therefore, of going home to take his dinner does not constituteabandonment.

We now go to the award of moral damages to private respondent.

Not every employee who is illegally dismissed or suspended is entitled to damages. As a rule, moral damages arerecoverable only where the dismissal or suspension of the employee was attended by bad faith or fraud, or constituted anact oppressive to labor, or was done in a manner contrary to morals, good customs or public policy.

6 Bad faith does not

simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It implies a consciousand intentional design to do a wrongful act for a dishonest purpose or some moral obliquity.

7 The person claiming moral

damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. 8

In the case at bar, there is no showing that the management of petitioner company was moved by some evil motive insuspending private respondent. It suspended private respondent on an honest, albeit erroneous, belief that privaterespondent's act of leaving the company premises to take his meal at home constituted abandonment of post which

warrants the penalty of suspension. Also, it is evident from the facts that petitioner gave private respondent all theopportunity to refute the charge against him and to defend himself. These negate the existence of bad faith on the part ofpetitioner. Under the circumstances, we hold that private respondent is not entitled to moral damages.

IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The portion of the assailed decision awarding moral damagesto private respondent is DELETED. All other aspects of the decision are AFFIRMED.



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