1. INTL SCHOOL ALLIANCE OF EDUCATORS (ISAE) v. QUISUMBING
FACTS: Petitioners work under private respondent International School. The school hires both local and foreign hires. Foreign hires are granted with more benefits and higher salary. Respondent says this is because of dislocation factor and limited tenure. Petitioners contested the difference in salary rates between foreign and local hires. They claim that it is discriminatory to Filipinos and it constitutes racial discrimination.
HELD: There is violation of equal protection. Equal pay for equal work, persons who work with substantially equal qualifications, skillsm effort, and responsibility under similar conditions should be paid similar salaries. If an employer accords the same rank and position, the presumption is that they perform equal work. Here, both groups have similar functions which they perform under similar conditions. There is no evidence that foreign hires perform 25% more efficient than local hires. The dislocation factor and tenure are properly accorded by the benefits they received. International School (IS) pays its teachers who are hired from abroad, or foreign-hires, a higher salary than its local-hires, whether the latter are Filipino or not (most are Filipino, but some are American). It justifies this under the dislocation factor that foreigners must be given a higher salary both to attract them to teach here, and to compensate them for the significant economic disadvantages involved in coming here. The Teachers Union cries discrimination. HELD: Discrimination exists. Equal pay for equal work is a principal long honored in this jurisdiction, as it rests on fundamental norms of justice 1. Art. XIII, Sec. 1 of the Constitution (Social Justice and Human Rights) exhorts Congress to give the highest priority to the enactment of measures that protect and ennhance the right od all people to human dignity, reduce social, economic, and political inequalitites. The Constitution also provides that labor is entitled to humane conditions of work.. These conditions are not restricted to the physical workplace, but include as well the manner by which employers treat their employees. Lastly, the Constitution directs the State to promote equality of employment opportunities for all, regardless of sex, race, or creed. It would be an affront to both the spirit and the letter of these provisions if the State closes its eyes to unequal and discriminatory terms and conditions of employment. 2. International law, which springs from general principles of law, likewise proscribes discrimination. General principles of law include principles of equity, i.e., fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human Rights and numerous other international Conventions all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws.
2. Standard Chartered Bank Employees Union Vs. Confesor Confidential Employees Exclusion as Appropriate Bargaining Unit The 1998-2000 Collective Bargaining Agreement between the Standard Chartered Bank employees Union and the Standard Chartered Bank expired so the parties tried to renew it but then a deadlock ensued. Under the old CBA, the following are excluded as appropriate bargaining unit: A. All covenanted and assistant officers (now called National Officers) B. One confidential secretary of each of the: 1. Chief Executive, Philippine Branches 2. Deputy Chief Executive/Head, Corporate Banking Group 3. Head, Finance 4. Head, Human Resources 5. Manager, Cebu 6. Manager, Iloilo 7. Covenanted Officers provided said positions shall be filled by new recruits. C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other branch that the BANK may establish in the country. D. Personnel of the Telex Department E. All Security Guards F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as amended by R.A. 6715, casuals or emergency employees; and G. One (1) HR Staff But then in the renewal sought by SCBEU-NUBE, they only wanted the exclusion to apply only to the following employees from the appropriate bargaining unit all managers who are vested with the right to hire and fire employees, confidential employees, those with access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources (HR) staff. SCBEU-NUBE also averred that employees assigned in an acting capacity for at least a week should be given salary raise. A notice of strike was given to the Department of Labor due to this deadlock. Then DOLE Secretary Patricia Sto. Tomas issued an order dismissing the Unions plea. ISSUE: Whether or not the confidential employees sought to be removed from the exclusion as appropriate bargaining unit by SCBEU-NUBE holds ground. HELD: No. Whether or not the employees sought to be excluded from the appropriate bargaining unit are confidential employees is a question of fact, which is not a proper issue in a petition for review under Rule 45 of the Rules of Court. SCBEU-NUBE insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside from its generalized arguments, and despite the Secretarys finding that there was no evidence to support it, SCBEU-NUBE still failed to substantiate its claim. SCBEU-NUBE did not even bother to state the nature of the duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees. With regards to the salary increase of employees in acting capacities, the Supreme Court agreed with the Court of Appeals that a restrictive provision would curtail managements prerogative, and at the same time, recognized that employees should not be made to work in an acting capacity for long periods of time without adequate compensation. The usual rule that employees in acting capacities for at least a month should be given salary raise is upheld.
3. PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION VS. NLRC G.R. No. 105963 August 22, 1996 PAL EMPLOYEES SAVING AND LOAN ASSOCIATION, INC. (PESALA), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND ANGEL V. ESQUEJO, respondents.
PANGANIBAN, J .:p Is an employee entitled to overtime pay for work rendered in excess of eight hours a day, given the fact that his employment contract specifies a twelve-hour workday at a fixed monthly salary rate that is above the legal minimum wage? This is the principal question answered by this Court in resolving this petition which challenges the validity and legality of the Decision 1 of public respondent National Labor Relations Commission 2 promulgated on April 23, 1992 in NLRC NCR CA No. 002522-91 entitled "Angel V. Esquejo vs. PAL Employees Savings and Loan Association" which Decision modified (slightly as to amount) the earlier decision 3 dated November 11, 1991 of the labor arbiter granting private respondent's claim of overtime pay. The Facts and the Case Below On October 10, 1990, private respondent filed with public respondent a complaint docketed as NLRC NCR Case No. 10-05457-90 for non- payment of overtime pay and non-payment of the P25.00 statutory minimum wage increase mandated by Republic Act No. 6727. Subsequently, private respondent filed a supplemental complaint for illegal suspension with payer for reinstatement and payment of backwages. However, before the case was submitted for resolution, private respondent filed a "Motion to Withdraw Supplemental Complaint" on the ground that a separate action for illegal suspension, illegal dismissal, etc. had been filed and was pending before another labor arbiter. Hence, the issue decide by public respondent and which is under review by this Court in this petition involves only his claim for overtime pay. On November 26, 1990, private respondent filed his position paper 4 with the labor arbiter alleging the following facts constituting his cause of action: Complaint (herein private respondent) started working with respondent (PESALA) sometime last March 1, 1986 as a company guard and was receiving a monthly basic salary of P1,990.00 plus an emergency allowance in the amount of P510.00. He was required to work a (sic) twelve (12) hours a day, a (sic) xerox copies of his appointment are hereto attached and marked as Annexes "C" and "D" of this position paper; That on December 10, 1986, respondent Board of Directors in its board meeting held on November 21, 1986 approved a salary adjustment for the complainant increasing his monthly basic salary to P2,310.00 and an emergency allowance of P510.00, a xerox copy of the salary adjustment is hereto attached and marked as Annex "E" hereof; That on August 25, 1987, because of his impressive performance on his assigned job, another adjustment was approved by the President of the association increasing his monthly basic salary to P2,880.00, a xerox copy of the salary adjustment is hereto attached and marked as Annex "F" hereof; That from January 4, 1988 up to June 1990, several salary adjustments were made by the respondent on the monthly basic salary of the complainant including a letter of appreciation for being as (sic) one of the outstanding performers during the first half of 1988, the latest salary prior to the filing of the complaint was P3,720.00, a (sic) xerox copies of all documents relative to the salary adjustments are hereto attached and marked as annexes "G", "H", and "K" of this position paper; That during his entire period of employment with respondent, the former was required to perform overtime work without any additional compensation from the latter. It was also at this point wherein the respondent refused to give the 25.00 increase on the minimum wage rates as provided for by law. On October 12, 1990, complainant was suspended for the period of thirty seven (37) days for an offense allegedly committed by the respondent sometime last August 1989. On December 13, 1990, petitioner PESALA filed its position paper 5 alleging among other things: On 01 March, 1986, complainant was appointed in a permanent status as the company guard of respondent. In the Appointment Memorandum dated February 24, 1986 which has the conformity of complaint, it is expressly stipulated therein that complainant is to receive a monthly salary of P1,900.00 plus P510.00 emergency allowance for a twelve (12) hours work per day with one (1) day off. A copy of said appointment memorandum is hereto attached as Annex "A" and made an integral part hereof. On 01 December, 1986, the monthly salary of complainant was increased to P2,310,00 plus P510.00 emergency allowance. Latter, or on 01 January, 1988, the monthly salary of complainant was again increased to P3,420.00. And still later, or on 01 February, 1989, complainant's monthly salary was increased are hereto attached as Annexes "B", "B-1" and "B-2" and are made integral parts hereof. On 29, November, 1989, the manager of respondent in the person of Sulpicio Jornales wrote to complainant informing the latter that the position of a guard will be abolished effective November 30, 1989, and that complainant will be re-assigned to the position of a ledger custodian effective December 1, 1989. Pursuant to the above-mentioned letter-agreement of Mr. Jornales, complaint was formally appointed by respondent as its ledger custodian on December 1, 1989. The monthly salary of complainant as ledger custodian starting on December 1, 1989 was P3,720,00 for forty (40) working hours a week or eight (8) working hours a day. a copy of said Appointment memorandum is hereto attached as Annex "C" and made an integral part hereof. On 29 August, 1990, complainant was administratively charged with a serious misconduct or disobedience of the lawful orders of respondent or its officers, and gross and habitual neglect of his duties, committed as follows: 1. Sometime in August, 1989, you (referring to complainant Esquejo) forwarded the checks corresponding to the withdrawals of Mr. Jose Jimenez and Mr. Anselmo dela Banda of Davao and Iloilo Station, respectively, without the signature of the Treasurer and the President of PESALA, in violation of your duty and function that you should see to it that the said checks should be properly signed by the two PESALA officials before you send out said checks to their addresses. As a result of which, there was a substantial delay in the transmission of the checks to its owners resulting to an embarrassment on the part of the PESALA officers and damage and injury to the recipients (sic) of the checks since they needed the money badly. 2. Sometime in August, 1989, before you (complainant) went on your vacation, you failed to leave or surrender the keys of the office, especially the keys of the keys to the main and back doors which resulted to damage, injury and embarrassment to PESALA. This is a gross violation of your assigned duties and you disobeyed the instruction of your Superior. xxx xxx xxx Herein complainant was informed of the aforequoted charges against him and was given the opportunity to be heard and present evidence in his behalf as shown by the Notice of Hearing (Annex "D" hereof) sent to him. Complainant did in fact appeared (sic) at the hearing, assisted by his counsel, Atty. Mahinardo G. Mailig, and presented his evidence in the form of a Counter-Affidavit. A copy of said Counter-Affidavit is hereto attached as Annex "E" and made an integral part hereof. On 12 October, 1990, after due deliberation on the merits of the administrative charges filed against herein complainant, the Investigating Officer in the person of Capt. Rogelio Enverga resolved the same imposing a penalty of suspension of herein complainant, thus: "PENALTY: 1. For the first offense, you (referring to complaint Esquejo) are suspended for a period of thirty (30) working days without pay effective October 15, 1990. 2. For the second offense, your (sic) are suspended for a period of seven (7) working days whiteout pay effective from the date first suspension will expire". On March 7, 1991, private respondent filed a detailed and itemized computation of his money claims totaling P107,495.90, to which petitioner filed its comment on April 28, 1991. The computation filed on March 7, 1991 was later reduced to P65,302.80. To such revised computation, the petitioner submitted its comment on April 28, 1991. WHEREFORE, judgment is hereby rendered: 1. Granting the claim for overtime pay covering the period October 10, 1987 to November 30, 1989 in the amount of P28,344.55. 2. The claim for non-payment of P25.00 salary increase pursuant to Republic Act No. 6727 is dismissed for lack of merit. Aggrieved by the aforesaid decision, petitioner appealed to public respondent NLRC only to be rejected on April 23, 1992 via the herein assailed Decision, the dispositive portion of which reads as follows: WHEREFORE, premises considered, the award is reduced to an amount of TWENTY EIGHT THOUSAND SIXTY-SIX PESOS AND 45/100 (P28,066.45). In all other respects, the Decision under review is hereby AFFIRMED and the appeal DISMISSED for lack of merit. No motion for reconsideration of the Decision was filed by the petitioner. 6
What transpired afterwards is narrated by the Solicitor General in his memorandum, 7 which we presume to be correct since petitioner did not contradict the same in its memorandum: . . . Petitioner did not appeal the Decision of respondent NLRC. When it became final, the parties were called to a conference on June 29, 1992 to determine the possibility of the parties' voluntary compliance with the Decision (Order of Labor Arbiter Linsangan. dated July 23, 1992). . . . In their second conference, held on July 15, 1992, petitioner proposed to private respondent a package compromise agreement in settlement of all pending claims. Private respondent for his part demanded (P150,000.00 as settlement of his complaint which was turned down by petitioner as too excessive. Unfortunately, no positive results were achieved. As a result, pleading was filed by petitioner captioned: Motion to Defer Execution and Motion to Re-Compute alleged overtime pay. Petitioner states that "quite recently, the Employee Payroll Sheets pertaining to the salaries, overtime pay, vacation and sick leave of Angel Esquejo were located". . . . Petitioner's Motion to Defer Execution and Motion to Re- Compute respondent's overtime pay was denied in an Order dated July 23, 1992. . . . Petitioner moved to reconsider the Denial Order on July 27, 1992. Private respondent opposed. In the meantime, petitioner filed the instant special civil action for certiorari before this Court on July 10, 1992. Later, on July 17, 1992, citing as reason that ". . . quite recently, the Employee Payroll Sheets which contained the salaries and overtime pay received by respondent Esquejo were located in the bodega of the petitioner and based on said Payroll Sheets, it appears that substantial overtime pay have been paid to respondent Esquejo in the amount of P24,238.22 for the period starting January 1987 up to November 1989". petitioner asked this Court for the issuance of a temporary restraining order or writ of preliminary injunction. On the same date of July 17, 1992, a "Supplemental Petition Based On Newly Discovered Evidence" was filed by petitioner to which was attached photocopies of payroll sheets of the aforestated period. On July 29, 1992, this court issued a temporary restraining order enjoining the respondents from enforcing the Decision dated April 23, 1992 issued in NLRC NCR No. 002522-91, the case below subject of the instant petition. The Issues Four issues have been raised by the petitioner in its effort to obtain a reversal of the assailed Decision, to wit: I THE RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION WHEN IT RULED THAT PRIVATE RESPONDENT IS ENTITLED TO OVERTIME PAY WHEN THE SAME IS A GROSS CONTRAVENTION OF THE CONTRACT OF EMPLOYMENT BETWEEN PETITIONER AND RESPONDENT ESQUEJO AND A PATENT VIOLATION OF ARTICLES 1305, 1306 AND 1159 OF THE CIVIL CODE. II THE RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IF AWARDING OVERTIME PAY OF P28,066.45 TO PRIVATE RESPONDENT WHEN THE SAME IS A CLEAR VIOLATION OF ARTICLE 22 OF THE CIVIL CODE ON UNJUST ENRICHMENT. III THE RESPONDENT NLRC COMMITTED A GRAVE ABUSED OF DISCRETION WHEN IT RULED THAT PRIVATE RESPONDENT WAS NOT PAID THE OVERTIME PAY BASED ON THE COMPUTATION OF LABOR ARBITER CORNELIO LINSANGAN WHICH WAS AFFIRMED BY SAID RESPONDENT NLRC WHEN THE SAME IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND IT, THEREFORE, VIOLATED THE CARDINAL PRIMARY RIGHTS OF PETITIONER AS PRESCRIBED IN "AND TIBAY VS. CIR." 69 PHIL. 635. IV WHETHER OR NOT THE PETITIONER'S SUPPLEMENTAL PETITION BASED ON NEWLY DISCOVERED EVIDENCE MAY BE ADMITTED AS PART OF ITS EVIDENCE IT BEING VERY VITAL TO THE JUDICIOUS DETERMINATION OF THE CASE. (Rollo, p. 367) In essence the above issued boil down to this query: Is an employee entitled to overtime pay for work rendered in excess of the regular eight hour day given the fact that he entered into a contract of labor specifying a work-day of twelve hours at a fixed monthly rate above the legislated minimum wage? The Court's Ruling At the outset, we would like to rectify the statement made by the Solicitor General that the "petitioner did not appeal from the Decision of (public) respondent NLRC". The elevation of the said case by appeal is not possible. The only remedy available from an order or decision of the NLRC is a petition for certiorari under Rule 65 of the Rules of Court alleging lack or excess of jurisdiction or grave abuse of discretion. 8 The general rule now is that the special civil action of certiorari should be instituted within a period of three months. 9 Hence, when the petition was filed on July 10, 1992, three months had not yet elapsed from petitioner's receipt of the assailed Decision (should really be from receipt of the order denying the motion for reconsideration). However, aside from failing to show clearly grave abuse of discretion on the part of respondent NLRC, which we shall discuss shortly, the petitioner also failed to comply with the mandatory requirement of filing a motion for reconsideration from the Decision of the public respondent before resorting to the remedy of certiorari. We have previously held that: . . . The implementing rules of respondent NLRC are unequivocal in requiring that a motion for reconsideration of the order, resolution, or decision of respondent commission should be seasonably filed as a precondition for pursuing any further or subsequent remedy, otherwise the said order, resolution, or decision shall become final and executory after ten calendar days from receipts thereof. Obviously, the rationale therefor is that the law intends to afford the NLRC an opportunity to rectify such errors or mistakes it may have lapsed into before resort to the courts of justice can be had. This merely adopts the rule that the function of a motion for reconsideration is to point out to the court the error that it may have committed and to give it a chance to correct itself. 10
Additionally, the allegations in the petition clearly show that petitioner failed to file a motion for reconsideration of the assailed Resolution before filing the instant petition. As correctly argued by private respondent Rolando Tan, such failure constitutes a fatal infirmity. . . . The unquestioned rule in this jurisdiction is that certiorari will only if there is no appeal or any other plain, speedy an adequate remedy in the ordinary course of law against the acts of public respondent. In the instant case, the plain and adequate remedy expressly provided by law was a motion for reconsideration of the assailed decision, based on a palpable or patent errors, to be made under oath and filed within ten (10) calendar days from receipt of the questioned decision. And for failure to avail of the correct remedy expressly provided by law, petitioner has permitted the subject Resolution to become final and executory after the lapse of the ten day period within which to file such motion for reconsideration. 11
In brief, the filing of the instant petition was premature and did not toll the running of the 3 month period. Thus, the assailed Decision became final and executory. On this ground alone, this petition must therefore be dismissed. However, in view of the importance of the substantial query raised in the petition, we have resolved to decide the case on the merits also. The First Issue: Was Overtime Pay Included? The main disagreement between the parties centers on how the contract of employment of the private respondent should be interpreted. The terms and conditions thereof reads as follows: Date: February 24, 1986 NAME : ESQUEJO, ANGEL NATURE OF ACTION : APPOINTMENT FROM : POSITION TITLE : COMPANY GUARD TO : STATUS : PERMANENT EFFECTIVE DATE : MARCH 1, 1986 FROM : P1,990.00 per month plus P510.00 emergency allowance SALARY : TO :
REMARKS : To confirm permanent appointment as company guard who will render 12 hours a day with one (1) day off
RECOMMENDED BY: APPROVED BY: (Signed) (Signed) SULPICIO B. JORNALES CATALINO F. BANEZ (Signed) ANGEL V. ESQUEJO 12
Petitioner faults the public respondent when it said that there was "no meeting of minds between the parties," since the employment contract "explicitly states without any equivocation" that the overtime pay for work rendered for four (4) hours in excess of the eight (8) hour regular working period is already included in the P1,990.00 basic salary. "This is very clear from the fact that the appointment states 12 hours a day work." 13 By its computations, 14 petitioner tried to illustrate the private respondent was paid more than the legally required minimum salary then prevailing. To prove its contention, petitioner argues that: The legal minimum wage prescribed by our statutes, the legally computed overtime pay and monthly salaries being paid by petitioner to respondent Esquejo would show that indeed, the overtime pay has always been absorbed and included in the said agreed monthly salaries. In 1986, the legal minimum salary of Esquejo is computed as follows (per Appointment Memoranda dated February 4, 1986 and June 6, 1986 [Annex "C" and "D" of Annex "B" of this Petition]): 54 x 314 days ------------- 12 months = P1,413.00 monthly salary The hourly overtime pay is computed as follows: 54/8 hours = P6.75 x 4 hrs. = P27.00 P27.00 x 1.25 = P33.75 x 20 (should be 26)days = P887.50 (should be P877.50) P1,413.00 legal minimum wage + 887.50(877.50) legal overtime pay --------------- P2,290.50 amount due to respondent Esquejo under the law P2,500.00 gross salary of Esquejo per contract -2,290.50 ---------- P209.50 Difference (Rolllo, p. 371). On the other hand, private respondent in his position paper claims that overtime pay is not so incorporated and should be considered apart from the P1,990.00 basic salary. 15
We find for the private respondent and uphold the respondent NLRC's ruling that he is entitled to overtime pay. Based on petitioner's own computation, it appears that the basic salary plus emergency allowance given to private respondent did not actually include the overtime pay claimed by private respondent. Following the computations it would appear that by adding the legal minimum monthly salary which at the time was P1,413.00 and the legal overtime minimum monthly salary which at the time was P1,413.00 and the legal overtime pay of P877.50, the total amount due the private respondent as basic salary should have been P2,290.50. By adding the emergency cost of living allowance (ECOLA) of P510.00 as provided by the employment contract, the total basic salary plus emergency allowance should have amounted to P2,800.50. However, petitioner admitted that it actually paid private respondent P1,990.00 as basic salary plus P510.00 emergency allowance or a total of only P2,500.00. Undoubtedly, private respondent was shortchanged in the amount of P300.50. Petitioner's own computations thus clearly establish that private respondent's claim for overtime pay is valid. Side Issue: Meeting of the Minds? The petitioner contends that the employment contract between itself and the private respondent "perfectly satisfies" the requirements of Article 1305 of the Civil Code as to the "meeting of the minds" such that there was a "legal and valid contract" entered into by the parties. Thus, private respondent "cannot be allowed to question the said salary arrangements for the extra 4 hours overtime pay after the lapse of 4 years and claim only now that the same is not included in the terms of the employment contracts." 16
We disagree. Public respondent correctly found no such agreement as to overtime pay. In fact. the contract was definite only as to the number of hours of work to be rendered but vague as to what is covered by the salary stipulated. Such ambiguity was resolved by the public respondent, thus: In resolving the issue of whether or not complainant's overtime pay for the four (4) hours of work rendered in excess of the normal eight hour work period is incorporated in the computation of his monthly salary, respondent invokes its contract of employment with the complainant. Said contract appears to be in the nature of a document identifiable as an appointment memorandum which took effect on March 1, 1986 (Records, p. 56) by virtue of which complaint expressed conformity to his appointment as company guard with a work period of twelve (12) hours a day with one (1) day off. Attached to this post is a basic salary of P1,900.00 plus P510.00 emergency allowance. It is (a) cardinal rule in the interpretation of a contract that if the terms thereof are clear and leave no doubt upon the intention of the contracting parties, then the literal meaning of its stipulations shall control. (Art. 1370, Civil Code of the Philippines). To this, respondent seeks refuge. Circumstances, however, do not allow us to consider this rule in the light of complainant's claim for overtime pay which is an evident indication that as to this matter, it cannot be said that there was a meeting of the minds between the parties, it appearing that respondent considered the four (4) hours work in excess of the eight hours as overtime work and compensated by way of complainant's monthly salary while on the latter's part, said work rendered is likewise claimed as overtime work but yet unpaid in view of complainant's being given only his basic salary. Complainant claims that the basic salary could not possibly include therein the overtime pay for his work rendered in excess of eight hours. Hence, respondent's Appointment Memorandum cannot be taken and accorded credit as it is so worded in view of this ambiguity. We therefore proceeded to determine the issue in the light of existing law related thereto. while it is true that the complainant received a salary rate which is higher that the minimum provided by law, it does not however follow that any additional compensation due the complainant can be offset by his salary in excess of the minimum, especially in the absence of an express agreement to that effect. To consider otherwise would be in disregard of the rule of non- diminution of benefits which are above the minimum being extended to the employees. Furthermore, such arrangement is likewise in disregard of the manner required by the law on how overtime compensation must be determined. There is further the possibility that in view of subsequent increases in the minimum wage, the existing salary for twelve (12) hours could no longer account for the increased wage level together with the overtime rate for work rendered in excess of eight hours. This fertile ground for a violation of a labor standards provision can be effectively thwarted if there is a clear and definite delineation between an employee's regular and overtime compensation. It is, further noted that a reading of respondent's Appointment Memoranda issued to the complainant on different dates (Records, pp. 56-60) shows that the salary being referred to by the respondent which allegedly included complainant's overtime pay, partakes of the nature of a basic salary and as such, does not contemplate any other compensation above thereof including complaint's overtime pay. We therefore affirm complainant's entitlement to the latter benefit. 1 7 Petitioner also insists that private respondent's delay in asserting his right/claim demonstrates his agreement to the inclusion of overtime pay in his monthly salary rate. This argument is specious. First of all, delay cannot be attributed to the private respondent. He was hired on March 1, 1986. His twelve-hour work periods continued until November 30, 1989. On October 10, 1990 (just before he was suspended) he filed his money claims with the labor arbiter. Thus, the public respondent in upholding the decision of the arbiter computed the money claims for the three years period from the date claims were filed, with the computation starting as of October 10, 1987 onwards. In connection with the foregoing, we should add that even if there had been a meeting of the minds in the instant case, the employment contract could not have effectively shielded petitioner from the just and valid claims of private respondent. Generally speaking, contracts are respected as the law between the contracting, parties, and they may establish such stipulation, clause, terms and conditions as they may see fit; and for as long as such agreements are not contrary to law, morals, good customs, public policy or public order, they shall have the fore of law between them. 18 However, ". . ., while it is the inherent and inalienable right of every man to have the most liberty of contracting, and agreements voluntarily and fairly made will be held valid and enforced in the courts, the general right to contract is subject to the limitation that the agreement must not be in violation of the Constitution, the statute of some rule of law (12 Am. Jur. pp. 641-642)." 19 And under the Civil Code, contracts of labor are explicitly subject to the police power of the State because they are not ordinary contracts but are impressed with public interest. 20 Inasmuch as in this particular instance the contract is question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay. Moreover, we cannot agree with petitioner's assertion that by judging the intention of the parties from their contemporaneous acts it would appear that the "failure of respondent Esquejo to claim such alleged overtime pay since 1986 clearly demonstrate(s) that the agreement on his gross salary as contained in his appointment paper is conclusive on the matter of the inclusion of overtime pay." (Rollo, pp. 13-15; also, Rollo, pp. 378-380). This is simply not the case here. The interpretation of the provision in question having been put in issue, the Court is constrained to determine which interpretation is more in accord with the intent of the parties. 21 To ascertain the intent of the parties, the Court is bound to look at their contemporaneous and subsequent acts. 22 Private respondent's silence and failure to claim his overtime pay since 1986 cannot be considered as proving the understanding on his part that the rate provided in his employment contract covers overtime pay. Precisely, that is the very question raised by private respondent with the arbiter, because contrary to the claim of petitioner, private respondent believed that he was not paid his overtime pay and that such pay is not covered by the rate agreed upon and stated in his Appointment Memorandum. The subsequent act of private respondent in filing money claims negates the theory that there was clear agreements as to the inclusion of his overtime pay in the contracted salary rate. When an employee fails to assert his right immediately upon violation thereof, such failure cannot ipso facto be deemed as a waiver of the oppression. We must recognize that the worker and his employer are not equally situated. When a worker keeps silent inspite of flagrant violations of his rights, it may be because he is seriously fearful of losing his job. And the dire consequences thereof on his family and his dependents prevent him from complaining. In short, his thoughts of sheer survival weight heavily against launching an attack upon his more powerful employer. The petitioner contends that the agreed salary rate in the employment contract should be deemed to cover overtime pay, otherwise serious distortions in wages would result "since a mere company guard will be receiving a salary much more that the salaries of other employees who are much higher in rank and position than him in the company." (Rollo, p. 16) We find this argument flimsy and undeserving of consideration. How can paying an employee the overtime pay due him cause serious distortions in salary rates or scales? And how can "other employees" be aggrieved when they did not render any overtime service? Petitioner's allegation that private respondent is guilty of laches is likewise devoid of merit. Laches is defined as failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within an unreasonable time, warranting the presumption that the party entitled to assert it has either abandoned or declined to assert it 23 The question of laches is addressed to the sound discretion of the court, and since it is an equitable doctrine, its application is controlled by equitable considerations. It cannot work to defeat justice or to perpetrate fraud and injustice. 24 Laches cannot be charged against any worker when he has not incurred undue delay in the assertion of his rights. Private respondent filed his complaint within the three-year reglementary period. He did not sleep on his rights for an unreasonable length of time. 25
Second Issue: Unjust Enrichment? Petitioner contends that the award of overtime pay is "plain and simple unjust and illegal enrichment." Such award "in effect sanctioned and approved the grant of payment to respondent Esquejo which will result in double payment for the overtime work rendered by paid employee." 26 Also, per petitioner, "(n)othing in the Labor Code nor in the Rules and Regulations issued in the implementation thereof prohibits the manner of paying the overtime pay (by) including the same in the salary." 2 7 This is begging the issue. To reiterate, the main question raised before the labor tribunals is whether the provision on wages in the contract of employment already included the overtime pay for four (4) working hours rendered six days a week in excess of the regular eight-hour work. And we hold that the tribunals below were correct in ruling that the stipulated pay did not include overtime. Hence, there can be no undue enrichment in claiming what legally belongs to private respondent. Third Issue: Basic of NLRC's Decision? Petitioner assails respondent NLRC for adopting that portion of the decision of the labor arbiter, which reads as follows: . . . Our conclusion is quite clear considering the fact that at the time of his employment in March 1986, during which the minimum wage was P37.00 a day for 8 hours work, complaint's total take-home-pay working 12 hours a day including ECOLA, was only P2,500.00 a month. And immediately prior to his appointment as Ledger Custodian effective December 1, 1989, with the working hours reduced to 8 hours a week, complainant's monthly salary was P3,420.00 (instead of P5,161.01 minimum monthly with 4 hours overtime work everyday, or a difference of P1,741.01 a month). Accordingly, the claim for overtime pay reckoned from October 10, 1987 up to November 30, 1989 should be, as it is hereby, granted. 28 (Rollo, p. 201). Petitioner believes that by adopting the above-quoted portion of the arbiter's decision, respondent NLRC violated the cardinal rule that its decisions must be supported by substantial evidence. In doing so, petitioner claims that the NLRC violated is primary rights as enunciated in the case of Ang Tibay vs. CIR 29. In other words, petitioner holds the view that the arbiter's decision failed to explain how the amount of P5,161.01 was arrived at. 30
Petitioner is in error. The public respondent did not adopt in toto the aforequoted portion of the arbiter's decision. It made its own computations and arrived at a slightly different amount, with a difference of P278.10 from the award granted by the labor arbiter. To refute petitioner's claim, public respondent attached (as Annexes "1", "1-A" "1-B" and "1-C") to its Comment, the computations made by the labor arbiter in arriving at the sum of P5,161,00. On the other hand, public respondent made its own computation in its assailed Decision and arrived at a slightly different figure from the computed by the labor arbiter: Respondent claims that the award of P28,344.55 is bereft of any factual basis. Records show that as per computation of the office of the Fiscal Examiner, (Records, p. 116) the said amount was arrived at. The computation was however based on the assumption that the complainant regularly reported for work. Records however show that the complainant absented himself from work for one day in August 1989. (Records, p. 63) For this unworked day, no overtime pay must be due. As to the rest of his period of employment subject to the three year limitation rule which dates from October 10, 1987 up to his appointment as Ledger Custodian on December 1, 1989 after which his regular work period was already reduced to eight hours, there being no showing that the complainant absented himself from work, and he being then required to work for period of twelve hours daily, We therefore rule on complainant's entitlement to overtime compensation for the duration of the aforesaid period in excess of one working day. Consequently, complainant's overtime pay shall be computed as follow: OVERTIME PAY: (4 HRS/DAY) October 10, 1987 December 13, 1987 = 2.10 mos. P54/8hrs. = P6.75 x 4 hrs. = P27.00 P27 x 1.25 = P33.75 x 26 x 2.10 mos. = P1,842.75
December 14, 1987 June 30, 1989 = 18.53 mos. P64/8 hrs. = P8 x 4 hrs. = P32.00 P32 x 1.25 = P40 x 26 x 18.53 = P19,271.20
July 1, 1989 November 30, 1989 = 5 mos. P89/8 hrs. = P11.12 x 4 hrs. = P44.50 P44.50 x 1.25 = P55.62 x 25 x 5 mos. = P6,952.50 (P6,953.125)
TOTAL OVERTIME PAY P28,066.45 (P28,067.075)" (Rollo, pp. 210-212) Prescinding therefrom, it is evident that petitioner had no basis to argue that respondent NLRC committed any grave abuse of discretion in quoting the questioned portion of the labor arbiter's holding. Fourth Issue: Newly Discovered Evidence? In its Supplemental Petition filed on July 17, 1996, petitioner alleges in part: 2. That only recently, the petitioner was able to locate the Employees Payroll Sheets which contained the salaries, overtime pay, vacation and sick leaves of respondent Esquejo which pertains to the period starting from January 1, 1987 up to November 1989. Therefore, said total amount of overtime pay paid to and received by respondent Esquejo should be deducted from the computed amount of P28,066.45 based on the questioned decision; (Rollo, p. 220). Contrary to petitioner's claim however, said documents consisting of payroll sheets, cannot be considered as "newly-discovered evidence" since said papers were in its custody and possession all along, petitioner being the employer of private respondent Furthermore, petitioner offers no satisfactory explanation why these documents were unavailable at the time the case was being heard by the labor arbiter. In its Memorandum, petitioner excused itself for its failure to present such evidence before the labor arbiter and respondent NLRC by saying that "petitioner('s office) appeared to be in disorder or in a state of confusion since the then officers (of petitioner) were disqualified by the Monetary Board on grounds of misappropriation of funds of the association and other serious irregularities. There was no formal turn-over of the documents from the disqualified set of officer to the new officers of petitioner." 31 We find such excuse weak and unacceptable, the same not being substantiated by any evidence on record. Moreover, payroll records are normally not in the direct custody and possession of corporate officers but of their subordinates, i.e., payroll clerks and the like. In the normal course of business, such payroll sheets are not the subject of formal turnovers by outgoing officers to their successors of office. And if indeed it is true that the petitioner had been looking for such records or documents during the pendency of the case with the labor arbiter and with public respondent, petitioner never alleged such search before the said labor tribunals a quo. Hence, such bare allegations of facts cannot be fairly appreciated in this petition for certiorari, which is concerned only with grave abuse of discretion of lack (or excess) of jurisdiction. The Solicitor General quotes with approval a portion of private respondent's Opposition to petitioner's motion for reconsideration thus: It is clear from the payroll, although the substantial pages thereof do not show that the net amount indicated therein have been received or duly acknowledged to have been received by the complainant, THAT OVERTIME PAYMENTS THAT WERE MADE REFER TO WORK RENDERED DURING COMPLAINANT'S OFF DAYS. What has been rightfully, claimed by the complainant and awarded by this Honorable Office is the overtime works (sic) rendered by the complainant daily for six (6) days a week computed at four (4) hours per day. This computation is based on the evidence thus submitted by the parties. All appointment by the respondent carries (sic) with it (sic) that the basic salary of the complainant is equivalent to 12 hours work everyday for six (6) days a week, hence, the four (4) hours overtime daily was not considered and therefore not paid by the respondent. (Rollo, p. 327). It has been consistently held that factual issued are not proper subjects of a petition for certiorari, as the power of the Supreme Court to review labor cases is limited to questions of jurisdiction and grave abuse of discretion. 32 The introduction in this petition of so-called newly discovered evidence is unwarranted. This Court is not a trier of facts and it is not its function to examine and evaluate the evidence presented (or which ought to have been presented) in the tribunals below. 33
WHEREFORE, in view of the foregoing considerations, the Petition is DISMISSED, the temporary restraining order issued on July 30, 1992 LIFTED, and the assailed decision of the public respondent AFFIRMED. Cost against petitioner. 4. PT&T VS. NLRC Fact s: Grace de Guzman, pri vate respondent, was initiall y hired as a reliever by PT&T, petitioner, specifical l yas a Supernumerary Project Worker, for a fixed period due to a certain employee whos having a maternity l eave.Under t he agr eement she si gned, her empl oyment was t o i mmedi at el y t er mi nat e upon t he expi r at i on of t he agr eed period. Thereafter, PT&T again hired Grace as reliever for the succeeding periods, thi s time as a replacement to anempl oyee who went on l eave. The r el i ever st at us was t hen f or mal l y compl et ed unt i l she was asked agai n t o j oi nPT&T as a pr obat i onar y empl oyee cover i ng 150 days. I n t he j ob appl i cat i on f or m, she i ndi cat ed i n t he por t i on of t he ci vi l st at us t her ei n t hat she was si ngl e al t hough she had cont r act ed mar r i age a f ew mont hs ear l i er . Gr ace hasalso made the same representation on her two successi ve reliever agreements. The branch supervisor of PT&Thavi ng di scover ed t he di scr epancy sent Gr ace a memor andum r equi r i ng her t o expl ai n t he sai d di scr epancy andshe was r emi nded about t he company s pol i cy of not accept i ng mar r i ed women f or empl oyment . I n her r epl y, shest at ed t hat she wasn t awar e of such pol i cy at t hat t i me and al l al ong she hadn t del i ber at el y hi dden her t r ue ci vi l status. However, PT&T remained unconvinced of this reasoning pledge by Grace and thus she was dismissed fromt he company. Gr ace cont est ed by i ni t i at i ng a compl ai nt f or i l l egal di smi ssal and wi t h a cl ai m f or non- payment of cost of l i vi ng al l owances. I ssue: Whet her or not PT&T i s l i abl e agai nst Gr ace s i l l egal di smi ssal due t o cer t ai n company pol i cy. Ru l i n g : Mar r i age as a speci al cont r act cannot be r est r i ct ed by di scr i mi nat or y pol i ci es of pr i vat e i ndi vi dual s or corporations. Wheres a company pol icy di squalified from work any woman worker who contracts marri age, theSupr eme Cour t i nval i dat ed such pol i cy as i t not onl y r uns af oul t he const i t ut i onal pr ovi si on on equal pr ot ect i on but al so on t he f undament al pol i cy of t he St at e t owar d mar r i age. The danger of such policy against marriage followed by PT&T is that it strike at the very essence, idealsand pur pose of mar r i age as an i nvi ol abl e soci al i nst i t ut i on and ul t i mat el y of t he f ami l y as t he f oundat i on of t henation. Therefore, PT&T is deemed liable for Graces il legal dismi ssal and the latter shall claim for damages. 5. DAVAO INTEGRATED PORT SERVICES VS. ABARQUEZ In this petition for certiorari, petitioner Davao Integrated Port Services Corporation seeks to reverse the Award 1 issued on September 10, 1991 by respondent Ruben V. Abarquez, in his capacity as Voluntary Arbitrator of the National Conciliation and Mediation Board, Regional Arbitration Branch XI in Davao City in Case No. AC-211-BX1-10-003-91 which directed petitioner to grant and extend the privilege of commutation of the unenjoyed portion of the sick leave with pay benefits to its intermittent field workers who are members of the regular labor pool and the present regular extra pool in accordance with the Collective Bargaining Agreement (CBA) executed between petitioner and private respondent Association of Trade Unions (ATU-TUCP), from the time it was discontinued and henceforth.chanroblesvirtualawl ibrary chanrobles vi rtual law library The facts are as follows: chanrobles vi rtual law l ibrary Petitioner Davao Integrated Port Stevedoring Services (petitioner-company) and private respondent ATU-TUCP (Union), the exclusive collective bargaining agent of the rank and file workers of petitioner-company, entered into a collective bargaining agreement (CBA) on October 16, 1985 which, under Sections 1 and 3, Article VIII thereof, provide for sick leave with pay benefits each year to its employees who have rendered at least one (1) year of service with the company, thus: ARTICLE VIIIchanrobles vi rtual law li brary Sec. 1. Sick Leaves - The Company agrees to grant 15 days sick leave with pay each year to every regular non-intermittent worker who already rendered at least one year of service with the company. However, such sick leave can only be enjoyed upon certification by a company designated physician, and if the same is not enjoyed within one year period of the current year, any unenjoyed portion thereof, shall be converted to cash and shall be paid at the end of the said one year period. And provided however, that only those regular workers of the company whose work are not intermittent, are entitled to the herein sick leave privilege. xxx xxx xxxchanrobles virtual law l ibrary Sec. 3. - All intermittent field workers of the company who are members of the Regular Labor Pool shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit: Hours of Service Per Vacation Sick Leave Calendar Year Leave Less than 750 NII NII 751 - 825 6 days 6 days 826 - 900 7 7 901 - 925 8 8 926 - 1,050 9 9 1,051 - 1,125 10 10 1,126 - 1,200 11 11 1,201 - 1,275 12 12 1,276 - 1,350 13 13 1,351 - 1,425 14 14 1,426 - 1,500 15 15 chanrobles virtual law l ibrary The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively. Upon its renewal on April 15, 1989, the provisions for sick leave with pay benefits were reproduced under Sections 1 and 3, Article VIII of the new CBA, but the coverage of the said benefits was expanded to include the "present Regular Extra Labor Pool as of the signing of this Agreement." Section 3, Article VIII, as revised, provides, thus: Sec. 3. - All intermittent field workers of the company who are members of the Regular Labor Pool and present Regular Extra Labor Pool as of the signing of his agreement shall be entitled to vacation and sick leaves per year of service with pay under the following schedule based on the number of hours rendered including overtime, to wit: Hours of Service Per Vacation Sick Leave Calendar Year Leave Less than 750 NII NII 751 - 825 6 days 6 days 826 - 900 7 7 901 - 925 8 8 926 - 1,050 9 9 1,051 - 1,125 10 10 1,126 - 1,200 11 11 1,201 - 1,275 12 12 1,276 - 1,350 13 13 1,351 - 1,425 14 14 1,426 - 1,500 15 15 chanrobles virtual law l ibrary The conditions for the availment of the herein vacation and sick leaves shall be in accordance with the above provided Sections 1 and 2 hereof, respectively. During the effectivity of the CBA of October 16, 1985 until three (3) months after its renewal on April 15, 1989, or until July 1989 (a total of three (3) years and nine (9) months), all the field workers of petitioner who are members of the regular labor pool and the present regular extra labor pool who had rendered at least 750 hours up to 1,500 hours were extended sick leave with pay benefits. Any unenjoyed portion thereof at the end of the current year was converted to cash and paid at the end of the said one-year period pursuant to Sections 1 and 3, Article VIII of the CBA. The number of days of their sick leave per year depends on the number of hours of service per calendar year in accordance with the schedule provided in Section 3, Article VIII of the CBA.chanroblesvirtualawli brary chanrobles virtual law li brary The commutation of the unenjoyed portion of the sick leave with pay benefits of the intermittent workers or its conversion to cash was, however, discontinued or withdrawn when petitioner-company under a new assistant manager, Mr. Benjamin Marzo (who replaced Mr. Cecilio Beltran, Jr. upon the latter's resignation in June 1989), stopped the payment of its cash equivalent on the ground that they are not entitled to the said benefits under Sections 1 and 3 of the 1989 CBA.chanroblesvi rtualawlibrary chanrobles vi rtual law li brary The Union objected to the said discontinuance of commutation or conversion to cash of the unenjoyed sick leave with pay benefits of petitioner's intermittent workers contending that it is a deviation from the true intent of the parties that negotiated the CBA; that it would violate the principle in labor laws that benefits already extended shall not be taken away and that it would result in discrimination between the non-intermittent and the intermittent workers of the petitioner-company.chanroblesvirtualawl ibrary chanrobles vi rtual law library Upon failure of the parties to amicably settle the issue on the interpretation of Sections 1 and 3, Article VIII of the 1989 CBA, the Union brought the matter for voluntary arbitration before the National Conciliation and Mediation Board, Regional Arbitration Branch XI at Davao City by way of complaint for enforcement of the CBA. The parties mutually designated public respondent Ruben Abarquez, Jr. to act as voluntary arbitrator.chanroblesvirtualawl ibrarychanrobles vi rtual law library After the parties had filed their respective position papers, 2 public respondent Ruben Abarquez, Jr. issued on September 10, 1991 an Award in favor of the Union ruling that the regular intermittent workers are entitled to commutation of their unenjoyed sick leave with pay benefits under Sections 1 and 3 of the 1989 CBA, the dispositive portion of which reads: WHEREFORE, premises considered, the management of the respondent Davao Integrated Port Stevedoring Services Corporation is hereby directed to grant and extend the sick leave privilege of the commutation of the unenjoyed portion of the sick leave of all the intermittent field workers who are members of the regular labor pool and the present extra pool in accordance with the CBA from the time it was discontinued and henceforth.chanroblesvi rtual awlibrary chanrobles virtual law li brary SO ORDERED. Petitioner-company disagreed with the aforementioned ruling of public respondent, hence, the instant petition.chanroblesvirtualawli brary chanrobles vi rtual law library Petitioner-company argued that it is clear from the language and intent of the last sentence of Section 1, Article VIII of the 1989 CBA that only the regular workers whose work are not intermittent are entitled to the benefit of conversion to cash of the unenjoyed portion of sick leave, thus: ". . . And provided, however, that only those regular workers of the Company whose work are not intermittent are entitled to the herein sick leave privilege." chanrobles vi rtual law library Petitioner-company further argued that while the intermittent workers were paid the cash equivalent of their unenjoyed sick leave with pay benefits during the previous management of Mr. Beltran who misinterpreted Sections 1 and 3 of Article VIII of the 1985 CBA, it was well within petitioner-company's rights to rectify the error it had committed and stop the payment of the said sick leave with pay benefits. An error in payment, according to petitioner-company, can never ripen into a practice.chanroblesvirtualawli brary chanrobles vi rtual law li brary We find the arguments unmeritorious.chanroblesvirtualawl ibrary chanrobles vi rtual law library A collective bargaining agreement (CBA), as used in Article 252 of the Labor Code, refers to a contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement.chanroblesvirtualawlibrary chanrobles virtual law library While the terms and conditions of a CBA constitute the law between the parties, 3 it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. 4 A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. 5 chanrobles virtual law l ibrary It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other related section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave benefit to regular intermittent workers. The manner they were deprived of the privilege previously recognized and extended to them by petitioner-company during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989, or a period of three (3) years and nine (9) months, is not only tainted with arbitrariness but likewise discriminatory in nature. Petitioner-company is of the mistaken notion that since the privilege of commutation or conversion to cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1, Article VIII, only the regular non-intermittent workers and no other can avail of the said privilege because of the proviso found in the last sentence thereof.chanroblesvirtualawl ibrary chanrobles vi rtual law library It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-intermittent workers or those workers who render a daily eight-hour service to the company and are governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article VIII of the 1989 CBA.chanroblesvi rtualawlibrary chanrobles vi rtual law li brary It is not disputed that both classes of workers are entitled to sick leave with pay benefits provided they comply with the conditions set forth under Section 1 in relation to the last paragraph of Section 3, to wit: (1) the employee-applicant must be regular or must have rendered at least one year of service with the company; and (2) the application must be accompanied by a certification from a company-designated physician.chanroblesvi rtualawlibrarychanrobles virtual law l ibrary Sick leave benefits, like other economic benefits stipulated in the CBA such as maternity leave and vacation leave benefits, among others, are by their nature, intended to be replacements for regular income which otherwise would not be earned because an employee is not working during the period of said leaves. 6 They are non-contributory in nature, in the sense that the employees contribute nothing to the operation of the benefits. 7 By their nature, upon agreement of the parties, they are intended to alleviate the economic condition of the workers.chanroblesvirtualawl ibrary chanrobles vi rtual law li brary After a careful examination of Section 1 in relation to Section 3, Article VIII of the 1989 CBA in light of the facts and circumstances attendant in the instant case, we find and so hold that the last sentence of Section 1, Article VIII of the 1989 CBA, invoked by petitioner-company does not bar the regular intermittent workers from the privilege of commutation or conversion to cash of the unenjoyed portion of their sick leave with pay benefits, if qualified. For the phrase "herein sick leave privilege," as used in the last sentence of Section 1, refers to the privilege of having a fixed 15-day sick leave with pay which, as mandated by Section 1, only the non-intermittent workers are entitled to. This fixed 15-day sick leave with pay benefit should be distinguished from the variable number of days of sick leave, not to exceed 15 days, extended to intermittent workers under Section 3 depending on the number of hours of service rendered to the company, including overtime pursuant to the schedule provided therein. It is only fair and reasonable for petitioner-company not to stipulate a fixed 15-day sick leave with pay for its regular intermittent workers since, as the term "intermittent" implies, there is irregularity in their work-days. Reasonable and practical interpretation must be placed on contractual provisions. Interpretatio fienda est ut res magis valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail. 8 chanrobles vi rtual law library We find the same to be a reasonable and practical distinction readily discernible in Section 1, in relation to Section 3, Article VIII of the 1989 CBA between the two classes of workers in the company insofar as sick leave with pay benefits are concerned. Any other distinction would cause discrimination on the part of intermittent workers contrary to the intention of the parties that mutually agreed in incorporating the questioned provisions in the 1989 CBA.chanroblesvirtualawl ibrary chanrobles vi rtual law library Public respondent correctly observed that the parties to the CBA clearly intended the same sick leave privilege to be accorded the intermittent workers in the same way that they are both given the same treatment with respect to vacation leaves - non-commutable and non-cumulative. If they are treated equally with respect to vacation leave privileges, with more reason should they be on par with each other with respect to sick leave privileges. 9 Besides, if the intention were otherwise, during its renegotiation, why did not the parties expressly stipulate in the 1989 CBA that regular intermittent workers are not entitled to commutation of the unenjoyed portion of their sick leave with pay benefits? chanrobles vi rtual law library Whatever doubt there may have been early on was clearly obliterated when petitioner- company recognized the said privilege and paid its intermittent workers the cash equivalent of the unenjoyed portion of their sick leave with pay benefits during the lifetime of the CBA of October 16, 1985 until three (3) months from its renewal on April 15, 1989. Well-settled is it that the said privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not unilaterally withdraw, or diminish such benefits. 10 It is a fact that petitioner-company had, on several instances in the past, granted and paid the cash equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. 11 Under the circumstances, these may be deemed to have ripened into company practice or policy which cannot be peremptorily withdrawn. 12 chanrobles virtual law l ibrary Moreover, petitioner-company's objection to the authority of the Voluntary Arbitrator to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code "to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement." We, therefore, find that no grave abuse of discretion was committed by public respondent in issuing the award (decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted with and is absolutely correct.chanroblesvirtualawl ibrary chanrobles vi rtual law library WHEREFORE, in view of the foregoing, the petition is DISMISSED. The award (decision) of public respondent dated September 10, 1991 is hereby AFFIRMED. No costs.chanroblesvirtualawl ibrary chanrobles vi rtual law li brary 6. PNOC ENERGY DEVELOPMENT CORPORATION VS. NLRC In June 1985, Danilo Mercado was dismissed by PNOC-Energy Development Corporation (PNOC-EDC) due to serious acts of dishonesty allegedly committed by Mercado. Mercado then filed a complaint for illegal dismissal against PNOC-EDC. PNOC-EDC filed a motion to dismiss on the ground that the Labor arbiter and/or the National Labor Relations Commission (NLRC) has no jurisdiction over PNOC-EDC because it is a subsidiary of the Philippine National Oil Company (PNOC), a government owned or controlled corporation, and as a subsidiary, it is also a GOCC and as such, the proper forum for Mercados suit is the Civil Service Commission. ISSUE: Whether or not PBOC-EDC is correct. HELD: No. The issue in this case has been decided already in the case of PNOC-EDC vs Leogardo. It is true that PNOC is a GOCC and that PNOC-EDC, being a subsidiary of PNOC, is likewise a GOCC. It is also true that under the 1973 Constitution, all GOCCs are under the jurisdiction of the CSC. However, the 1987 Constitution change all this as it now provides: The Civil Service embraces all branches, subdivisions, instrumentalities and agencies of the Government, including government-owned or controlled corporations with original charters. (Article IX-B, Section 2 [1]) [emphasis supplied] Hence, the above provision sets the rule that the mere fact that a corporation is a GOCC does not automatically place it under the CSC. Under this provision, the test in determining whether a GOCC is subject to the Civil Service Law is the manner of its creation such that government corporations created by special charter are subject to its provisions while those incorporated under the general Corporation Law are not within its coverage. In the case at bar, PNOC-EDC, even though it is a GOCC, was incorporated under the general Corporation Law it does not have its own charter, hence, it is under the jurisdiction of the MOLE. Even though the facts of this case occurred while the 1973 Constitution was still in force, the provisions of the 1987 Constitution regarding the legal matters [procedural aspect] are applicable because it is the law in force at the time of the decision. 7. EBRO VS. NLRC This is a petition for certiorari to set aside the order dated October 13, 1992 and the resolution dated March 3, 1993 of the National Labor Relations Commission (NLRC). [1]
The antecedent facts are as follows: Private respondent International Catholic Migration Commission (ICMC) is a non-profit agency engaged in international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II. It was one of the agencies accredited by the Philippine government to operate the refugee processing center at Sabang, Morong, Bataan. On June 24, 1985, private respondent ICMC employed petitioner Jose G. Ebro III to teach English as a Second Language and Cultural Orientation Training Program at the refugee processing center. The employment contract provided in pertinent part: Salary: Your monthly salary for the first 6 months probationary period is P3,155.00 inclusive of cost of living allowance. Upon being made regular after successful completion of the six (6) months probationary period your monthly salary will be adjusted to P3,445.00 inclusive of cost of living allowance. . . . . Termination of Employment: Employment may be terminated by ICMC in any of the following situations: a. A cessation or reduction in program operation, by Department of State order, b. Unsuccessful completion of probationary period, at any time during that period, c. For due cause, in cases of violation of provisions detailed in ICMC Personnel Policies and administrative regulations, d. For just and authorized causes expressly provided for or authorized by law, e. For reasons of inadequate or deficient professional performance based on relevant guidelines and procedures relating to the position, f. In cases where, as a member of the PRPC community, ICMC is directed to take action. If either party wishes to terminate employment, a notice of two (2) weeks should be given in writing to the other party. After six months, ICMC notified petitioner that effective December 21, 1985, the latters services were terminated for his failure to meet the requirements of 1. classroom performance . . . up to the standards set in the Guide for Instruction; 2. regular attendance in the mandated teacher training, and in the scheduled team meetings, one-on-one conferences with the supervisor, etc.; 3. compliance with ICMC and PRPC policies and procedures. On February 4, 1986, petitioner filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages, accrued leave pay, 14th month pay, damages, attorneys fees, and expenses of litigation. The complaint was filed against private respondents ICMC and its Project Director Jon Darrah, Personnel Officer Alex Dy- Reyes, Program Officer of the Cultural Orientation Program Carrie Wilson, and Supervisor of the Cultural Orientation Program Marivic Soliven. Petitioner alleged that there was no objective evaluation of his performance to warrant his dismissal and that he should have been considered a regular employee from the start because ICMC failed to acquaint him with the standards under which he must qualify as such. He prayed for reinstatement with backwages; P3,155.00 for probationary and P3,445.00 for regular salary adjustments; value of lodging or dormitory privileges; cost of insurance coverage for group life, medical, death, dismemberment and disability benefits; moral, and exemplary, and nominal damages plus interest on the above claims with attorneys fees. Answering the complaint, ICMC claimed that petitioner failed to qualify for regular employment because he showed no interest in improving his professional performance both in and out of the classroom after he had been periodically evaluated (observation summary from August 20 to October 2, 1985 and evaluation summary of December 14, 1985); that petitioner was paid his salary up to December 31, 1985, two weeks pay in lieu of notice, and 14th month pay pro-rata; and that his accrued leave balance had already been converted to cash. After the parties had formally offered their evidence, private respondents submitted their memorandum on July 31, 1989 in which, among other things, they invoked ICMCs diplomatic immunity on the basis of the Memorandum of Agreement signed on July 15, 1988 between the Philippine government and ICMC. The Labor Arbiter held that petitioners legal immunity under the Memorandum could not be given retroactive effect since [that would] deprive complainants property right without due process and impair the obligation of contract of employment. In addition, he expressed doubt about petitioners legal immunity on the ground that it was provided for by agreement and not through an act of Congress. Accordingly, the Labor Arbiter ordered ICMC to reinstate petitioner as regular teacher without loss of seniority rights and to pay him one year backwages, other benefits, and ten percent attorneys fees for a total sum of P70,944.85. Both parties appealed to the NLRC. On August 13, 1990, petitioner moved to dismiss private respondents appeal because of the latters failure to post a cash/surety bond. In its order of October 13, 1992, however, the NLRC ordered the case dismissed on the ground that, under the Memorandum of Agreement between the Philippine government and ICMC, the latter was immune from suit. Petitioner moved for reconsideration, arguing among other things, that the Memorandum of Agreement could not be given retroactive effect and that in any case ICMC had waived its immunity by consenting to be sued. However, petitioners motion was denied by the NLRC in its resolution dated March 4, 1993. [2] Hence this petition presenting the following issues: a) Whether private respondents have perfected their appeal and whether public respondent may, on appeal, entertain or review private respondents claim of immunity; b) Whether a mere Memorandum of Agreement entered into by the Secretary of Foreign Affairs with respondent International Catholic Migration Commission, which is not a law, can divest the Labor Arbiter and the National Labor Relations Commission of their jurisdiction over the subject matter and over the persons of respondents in the pending case; c) Whether the Memorandum of Agreement may be given retroactive effect; d) Whether the dismissal of the case based on the claim of immunity will deprive petitioner of his property without due process of law; e) Whether the dismissal of the case based on the claim of immunity will result in the impairment of the obligations assumed by respondent International Catholic Migration Commission under its contract of employment with petitioner; f) Assuming for the sake of argument that the Memorandum of Agreement has validly conferred immunity on private respondents, whether they may be considered as having waived such immunity; g) Upon the same consideration, whether private respondents may be considered estopped from claiming immunity. The basic issue in this case is whether the Memorandum of Agreement executed on July 15, 1988 gave ICMC immunity from suit. The Court holds it did. Consequently, both the Labor Arbiter and the NLRC had no jurisdiction over the case. First. Petitioners contention that the Memorandum of Agreement is not an act of Congress which is needed to repeal or supersede the provision of the Labor Code on the jurisdiction of the NLRC and of the Labor Arbiter is untenable. The grant of immunity to ICMC is in virtue of the Convention on the Privileges and Immunities of Specialized Agencies of the United Nations, adopted by the UN General Assembly on November 21, 1947, and concurred in by the Philippine Senate on May 17, 1949. This Convention has the force and effect of law, considering that under the Constitution, the Philippinesadopts the generally accepted principles of international law as part of the law of the land. [3] The Memorandum of Agreement in question merely carries out the Philippine governments obligation under the Convention. In International Catholic Migration Commission v. Calleja, [4] this Court explained the grant of immunity to ICMC in this wise: The grant of immunity from local jurisdiction to ICMC . . . is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of member States of the organization, and to ensure the unhampered performance of their functions. Second. Petitioner argues that in any case ICMCs immunity can not apply because this case was filed below before the signing of the Memorandum on July 15, 1988. Petitioner cites in support the statement of this Court in the aforesaid case of International Catholic Migration Commission v. Calleja, [5] distinguishing that case from an earlier case
[6]
also involving ICMC, wherein the NLRC, as well as the Court, took cognizance of a complaint against ICMC for payment of salary for the unexpired portion of a six-month probationary employment. The Court held: [7]
[N]ot only did the facts of said controversy [ICMC v. NLRC, 169 SCRA 606 (1989)] occur between 1983-1985, or before the grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC in that case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was tacitly recognized as enjoying such immunity. Here, according to petitioner, his employment and subsequent dismissal by ICMC took place in 1985, prior to the execution of the Memorandum of Agreement on July 15, 1988 and, therefore, like in the 1989 ICMC case, the Memorandum should not be made to apply to him. This Court did not really reject ICMCs invocation of immunity for causes of action accruing prior to the execution of the Memorandum. It left open the possibility that ICMC may have been tacitly enjoying diplomatic immunity beforehand. It is important to note that in the 1989 case ICMC did not invoke its immunity notwithstanding the fact that the Memorandum took effect while the case was pending before the Court. [8]
Moreover, in the 1990 ICMC case, ICMCs immunity was in fact upheld despite the fact that at the time the case arose, the Memorandum recognizing ICMCs status as a specialized agency had not yet been signed. In that case, the petition for certification election among its rank and file employees was filed on July 14, 1986 and the order directing a certification election was made when ICMCs request for recognition as a specialized agency was still pending in the Department of Foreign Affairs. Yet this Court held that the subsequent execution of the Memorandum was a bar to the granting of the petition for certification election. The scope of immunity of the ICMC contained in the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations is instructive. Art. III, 4 of the Convention provides for immunity from every form of legal process. Thus, even if private respondents had been served summons and subpoenas prior to the execution of the Memorandum, they, as officers of ICMC, can claim immunity under the same in order to prevent enforcement of an adverse judgment, since a writ of execution is a legal process within the meaning of Article III, 4. [9]
Third. Another question is whether ICMC can invoke its immunity because it only did so in its memorandum before the Labor Arbiter. It is contended that ICMC waived its immunity in any event. Art. III, 4 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations requires, however, that the waiver of the privilege must be express. There was no such waiver of immunity in this case. Nor can ICMC be estopped from claiming diplomatic immunity since estoppel does not operate to confer jurisdiction to a tribunal that has none over a cause of action. [10]
Fourth. Finally, neither can it be said that recognition of ICMCs immunity from suit deprives petitioner of due process. As pointed out in International Catholic Migration Commission v. Calleja, [11] petitioner is not exactly without remedy for whatever violation of rights it may have suffered for the following reason: Section 31 of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations provides that each specialized agency shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which the specialized agency is a party. Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC and the Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and immunities accorded. Thus: Article IV. Cooperation with Government Authorities. 1. The Commission shall cooperate at all times with the appropriate authorities of the Government to ensure the observance of Philippine laws, rules and regulations, facilitate the proper administration of justice and prevent the occurrences of any abuse of the privileges and immunities granted its officials and alien employees in Article III of this Agreement to the Commission. 2. In the event that the Government determines that there has been an abuse of the privileges and immunities granted under this Agreement, consultations shall be held between the Government and the Commission to determine whether any such abuse has occurred and, if so, the Government shall withdraw the privileges and immunities granted the Commission and its officials. WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED.
8. UST VS. NLRC 9. MORENO VS. SAN SEBASTIAN COLLEGE Assailed in this Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court is the Decision 2 of the Court of Appeals dated 7 November 2006 in CA-G.R. SP No. 90083. The appellate courts Decision granted the Special Civil Action for Certiorari filed by respondent San Sebastian College-Recoletos, Manila (SSC-R), and annulled the Decision 3 dated 23 November 2004 and the Resolution 4 dated 31 March 2005 of the National Labor Relations Commission (NLRC) in NLRC-NCR-CA No. 037175-03. The undisputed facts of the case are as follows: Respondent SSC-R is a domestic corporation and an educational institution duly registered under the laws of the Philippines, located in C. M. Recto Avenue, Quiapo, Manila. On 16 January 1999, SSC-R employed petitioner Jackqui R. Moreno (Moreno) as a teaching fellow. On 23 October 2000, Moreno was appointed as a full-time college faculty member. 5 Then, on 22 October 2001, Moreno became a member of the permanent college faculty. 6 She was also offered the chairmanship 7 of the Business Finance and Accountancy Department of her college on 13 September 2002. Subsequently, reports and rumors of Morenos unauthorized external teaching engagements allegedly circulated and reached SSC-R. The Human Resource Department of the school thereafter conducted a formal investigation on the said activities. On 24 October 2002, the Department submitted its report, 8 which stated that Moreno indeed had unauthorized teaching assignments at the Centro Escolar University during the first semester of the School Year 2002-2003, and at the College of the Holy Spirit, Manila, during the School Years 2000-2001, 2001-2002 and the first semester of School Year 2002-2003. On 27 October 2002, Moreno received a memorandum 9 from the Dean of her college, requiring her to explain the reports regarding her unauthorized teaching engagements. The said activities allegedly violated Section 2.2 of Article II of SSC-Rs Faculty Manual, 10 which reads: Administrative permission is required for all full-time faculty members to teach part-time elsewhere. If ever teaching permission is granted, the total teaching load should not exceed the maximum allowed by CHED rules and regulations. Faculty members are required to report all other teaching assignments elsewhere within two (2) weeks from start of the classes every semester. On 28 October 2002, Moreno sent a written explanation 11 in which she admitted her failure to secure any written permission before she taught in other schools. Moreno explained that the said teaching engagements were merely transitory in nature as the aforesaid schools urgently needed lecturers and that she was no longer connected with them. Moreno further stated that it was never her intention to jeopardize her work in SSC-R and that she merely wanted to improve her familys poor financial conditions. A Special Grievance Committee was then formed in order to investigate and make recommendations regarding Morenos case. The said committee was composed of Dean Abraham Espejo of the College of Law, as chairman, and Messrs. Dindo Bunag and Ramon Montierro, as members. In a letter 12 dated 11 November 2002, the grievance committee required Moreno to answer the following series of questions concerning her case, to wit: 1. Did you teach in other schools without first obtaining the consent of your superiors in SSC-R? 2. Did you ever go beyond the maximum limit for an outside load? 3. Did you ever truthfully disclose completely to your superiors at SSC-R any outside Load? 4. Do you deny teaching in CEU? 5. Do you deny teaching at Holy Spirit? Moreno answered the above queries in a letter 13 dated 12 November 2002. Moreno admitted she did not formally disclose her teaching loads at the College of the Holy Spirit and at the Centro Escolar University for fear that the priest administrators may no longer grant her permission, as prior similar requests had already been declined; that the Dean of her college was aware of her external teaching loads; that she went beyond the maximum limit for an outside load in the School Years 2000 until 2002, because she needed to support her mother and sister, her masteral studies, and her sisters canteen business, all of which coincided with the payment of the emergency loan from the SSC-R administrators that paid for her mothers illness; that she did not deny teaching part-time in the aforementioned schools; and that she did not wish to resign because she felt she deserved a second chance. On the same day that Moreno sent her letter, the grievance committee issued its resolution, 14 which unanimously found that she violated the prohibition against a full-time faculty having an unauthorized external teaching load. The majority of the grievance committee members recommended Morenos dismissal from employment in accordance with the school manual, but Dean Espejo dissented and called only for a suspension for one semester. Thereafter, SSC-R sent a letter 15 to Moreno that was signed by the College President, informing her that they had approved and adopted the findings and recommendations of the grievance committee and, in accordance therewith, her employment was to be terminated effective 16 November 2002. Moreno thus instituted with the NLRC a complaint for illegal termination against SSC-R, docketed as NLRC-NCR Case No. 11-10077-02, seeking reinstatement, money claims, backwages, separation pay if reinstatement is not viable, and attorneys fees. In the Decision 16 dated 30 April 2003, Labor Arbiter Veneranda C. Guerrero dismissed Morenos complaint for lack of merit, thus: WHEREFORE, premises considered, judgment is hereby rendered dismissing the complaint for illegal dismissal for lack of merit. Respondent San Sebastian College- Recoletos is hereby ordered to pay complainant Jackqui R. Moreno the amount of NINE THOUSAND ONE HUNDRED FORTY THREE AND 75/100 PESOS (P9,143.75) representing her unpaid salaries. All other claims are DISMISSED for lack of merit. The Labor Arbiter ruled that Morenos due acceptance of the appointment as a member of the Permanent Faculty meant that she was bound to the condition therein not to accept any outside teaching assignments without permission. Morenos admission of her violation was likewise said to have rendered her liable for the penalty of dismissal as provided for in the SSC-R Faculty Manual. The Labor Arbiter held that SSC-R had adequately discharged the burden of proof imposed by law in dismissing Moreno. Except for her unpaid salary for fifteen (15) days, which was not controverted, the rest of Morenos money claims were denied for being unsubstantiated. On appeal by Moreno, the NLRC reversed the rulings of the Labor Arbiter in a Decision dated 23 November 2004, the relevant portion of which reads: The four (4) applications for leave of absence adduced in evidence by the respondent [SSC-R] are all undated. If the absences indicated in the said documents were the only absences incurred by the complainant [Moreno] in her four-year tenure, it cannot be said that she had a poor attendance. In fact, the contrary would be true. On the other hand, it is conceded that in the yearly evaluation of the performance of teachers, she consistently landed among the five best teachers. Thus, neither can it be said that her moonlighting activities adversely affected her work performance. Likewise, the undisputed fact that she was asked to be the chairman of Business Finance and Accountancy for SY 2002- 2003 should be considered. This last circumstance could only mean that she was very good at her job. There are other extenuating circumstances that should have been taken into consideration in determining the propriety of the penalty of dismissal meted upon the complainant. These circumstances are the fact that it was her first offense in four years of unblemished employment, and the fact that she candidly admitted her fault. x x x Moreover, it is settled that the existence of some rules agreed upon between the employer and employee on the subject of dismissal cannot preclude the State from inquiring whether its rigid application would work too harshly on the employee. (Gelmart Industries Phils. Inc. vs. NLRC, 176 SCRA 295 cited in Caltex Refinery Employees Association vs. NLRC, 246 SCRA 271). Thus, in the instant case, it must be concluded that the penalty of dismissal meted upon the complainant [Moreno] was too harsh and unreasonable under the circumstances. At most, a one-year suspension with a warning against the repetition of the same offense would have been more in keeping with the generally accepted principles of law. WHEREFORE, the decision appealed from is hereby REVERSED. The respondent [SSC-R] is hereby ordered to REINSTATE the complainant [Moreno] to her former position, and to pay her full backwages counted from November 16, 2003 up to the date of her actual reinstatement. 17
SSC-R filed a Motion for Reconsideration 18 of the NLRC Decision, which was denied for lack of merit in a Resolution 19 dated 31 March 2005.1avvphi 1 Thus, SSC-R instituted with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court, with a prayer for the issuance of a temporary restraining order and/or a writ of preliminary injunction, 20 docketed as CA-G.R. SP No. 90083, alleging grave abuse of discretion on the part of the NLRC. In a Decision 21 dated 7 November 2006, the appellate court granted the petition and annulled the Decision dated 23 November 2004, and Resolution dated 31 March 2005 of the NLRC. In reinstating the Decision of the Labor Arbiter dated 30 April 2003, the Court of Appeals ruled in this wise: In the case at bar, there is clearly grave abuse of discretion on the part of the NLRC when it reversed the Decision of the Labor Arbiter. Its conclusions are highly prejudicial to the interests of herein petitioner [SSC-R], considering the glaring infractions committed by private respondent [Moreno], which she even expressly admitted. x x x x "Willful disobedience of the employers lawful orders, as a just cause for dismissal of an employee, envisages the concurrence of at least two (2) requisites: the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful or perverse attitude; and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. The foregoing requisites are all present in this case. The prohibition against unauthorized outside teaching engagements found in the Faculty Manual and in private respondents [Moreno] appointment letter are deemed reasonable under the circumstances. In fact, the petitioners [SSC-R] policy is actually permissive since it allows other teaching engagements so long as its president approves of the same. Concededly, this policy was made known to private respondent [Moreno] for as mentioned earlier, it is found not only in the Faculty Manual, but more importantly, it is explicitly stated in her appointment letter. By her own admission, it cannot be clearer that, in spite of her knowledge thereof, private respondent [Moreno] willfully disobeyed the said prohibition. When she accepted the teaching opportunities offered to her by other schools and altogether concealed the same from the petitioner [SSC-R], she risked being administratively held liable therefor. Thus, the excuses she raised upon the petitioners [SSC-R] discovery of such concealment deserve scant consideration. The policy is obviously in connection with the private respondents [Moreno] duties as a faculty member. It is designed to ensure that the petitioners [SSC-R] teaching staff is well fit to function accordingly, not only for its benefit, but chiefly, for the students who are under their care and instruction. Private respondent [Moreno] argues that notwithstanding her violations, her commitments with petitioner [SSC-R] were never compromised. Be that as it may, this fact cannot absolve her. She may be fit at the time when her infractions were revealed, but there is no assurance that her health would not deteriorate in time if she persists in carrying on a heavy workload. x x x x WHEREFORE, the instant petition is GRANTED. The 23 November 2004 Decision and the 31 March 2005 Resolution of the National Labor Relations Commission (Second Division) are hereby ANNULLED and SET ASIDE. The National Labor Relations Commission is permanently enjoined from executing its 31 March 2005 Resolution. The Decision of the Labor Arbiter dated 30 April 2003 is hereby REINSTATED and AFFIRMED. Accordingly, Moreno now impugns before this Court the Court of Appeals Decision dated 07 November 2006 raising the following issues: I. WHETHER OR NOT THE DISMISSAL OF PETITIONER WAS PROPER AND LAWFUL. II. WHETHER OR NOT PETITIONER IS ENTITLED TO THE RELIEF SHE SEEKS AGAINST RESPONDENT. Moreno insists that her right to security of tenure is a more significant consideration in this case than the strict application of a school policy. She laments that her dismissal from employment for failing to secure the necessary permission is too harsh and undeserved a penalty. The most basic of tenets in employee termination cases is that no worker shall be dismissed from employment without the observance of substantive and procedural due process. Substantive due process means that the ground upon which the dismissal is based is one of the just or authorized causes enumerated in the Labor Code. Procedural due process, on the other hand, requires that an employee be apprised of the charge against him, given reasonable time to answer the same, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires. 22 The employee must be furnished two written notices: the first notice apprises the employee of the particular acts or omissions for which his dismissal is sought, and the second is a subsequent notice which informs the employee of the employer's decision to dismiss him. 23
Article 282 of the Labor Code provides for the just causes for the termination of employment, to wit: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (e) Other causes analogous to the foregoing. In termination cases, the burden of proof rests on the employer to show that the dismissal is for just cause. When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid or authorized cause. 24
Respondent SSC-R contends that Morenos dismissal from employment was valid because she knowingly violated the prohibition embodied in the aforementioned Section 2.2 of Art. II of the SSC-R Faculty Manual, in accordance with Section 45 25 of the Manual of Regulations for Private Schools, and which prohibition was likewise contained in Morenos employment contract. 26 In so doing, Moreno allegedly committed serious misconduct and willful disobedience against the school, and thereby submitted herself to the corresponding penalty provided for in both the Faculty Manual and the employment contract, which is termination for cause. On the basis of the evidence on record, the Court finds that Moreno has indeed committed misconduct against respondent SSC-R. Her admitted failure to obtain the required permission from the school before she engaged in external teaching engagements is a clear transgression of SSC-Rs policy. However, said misconduct falls below the required level of gravity that would warrant dismissal as a penalty. Under Art. 282(a) of the Labor Code, willful disobedience of the employers lawful orders as a just cause for termination of employment envisages the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a "wrongful and perverse attitude"; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. 27
Similarly, with respect to serious misconduct, the Court has already ruled in National Labor Relations Commission v. Salgarino 28 that: Misconduct is defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error of judgment. The misconduct to be serious within the meaning of the act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the work of the employee to constitute just cause from his separation. In order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. (Emphasis ours.) After examining the records of the case, the Court finds that SSC-R miserably failed to prove that Morenos misconduct was induced by a perverse and wrongful intent as required in Art. 282(a) of the Labor Code. SSC-R merely anchored Morenos alleged bad faith on the fact that she had full knowledge of the policy that was violated and that it was relatively easy for her to secure the required permission before she taught in other schools. This posture is utterly lacking. It bears repeating that it is the employer that has the burden of proving the lawful cause sustaining the dismissal of the employee. Even equipoise is not enough; the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. 29
In the present case, SSC-R failed to adduce any concrete evidence to prove that Moreno indeed harbored perverse or corrupt motivations in violating the aforesaid school policy. In her letter of explanation to the grievance committee dated 12 November 2002, Moreno explained in detail her role as the breadwinner and the grave financial conditions of her family. As previous requests for permission had already been denied, Moreno was thus prompted to engage in illicit teaching activities in other schools, as she desperately needed them to augment her income. Instead of submitting controverting evidence, SSC- R simply dismissed the above statements as nothing more than a "lame excuse" 30 and are "clearly an afterthought," 31 considering that no evidence was offered to support them and that Morenos salary was allegedly one of the highest among the universities in the country. In addition, even if dismissal for cause is the prescribed penalty for the misconduct herein committed, in accordance with the SSC-R Faculty Manual and Morenos employment contract, the Court finds the same to be disproportionate to the offense. Time and again, we have ruled that while an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees, those directives, however, must always be fair and reasonable, and the corresponding penalties, when prescribed, must be commensurate to the offense involved and to the degree of the infraction. 32
Special circumstances were present in the case at bar which should have been properly taken into account in the imposition of the appropriate penalty. Moreno, in this case, had readily admitted her misconduct, which was undisputedly the first she has ever committed against the school. Her teaching abilities and administrative skills remained apparently unaffected by her external teaching engagements, as she was found by the grievance committee to be one of the better professors in the Accounting Department 33 and she was even offered the Chairmanship of her college. 34 Also, the fact that Moreno merely wanted to alleviate her familys poor financial conditions is a justification that SSC-R failed to refute. SSC-R likewise failed to prove any resulting material damage or prejudice on its part as a consequence of Morenos misconduct. The claim by SSC-R that the imposition of a lesser penalty would set a bad precedent 35 for the other faculty members who comply with the school policies is too speculative for this Court to even consider. Finally, the Court notes that in Morenos contract of employment, 36 one of the provisions therein categorically stated that should a violation of any of the terms and conditions thereof be committed, the penalty that will be imposed would either be suspension or dismissal from employment. Thus, contrary to its position from the beginning, SSC-R clearly had the discretion to impose a lighter penalty of suspension and was not at all compelled to dismiss Moreno under the circumstances, just because the Faculty Manual said so. With regard to the observance of procedural due process, neither of the parties has put the same into issue. Indeed, based on the evidence on record, Moreno was served with the required twin notices and was afforded the opportunity to be heard. The first notice was embodied in the memorandum 37 dated 27 October 2002 sent by her College Dean, which required her to explain her unauthorized teaching assignments. The letter 38 by SSC-R that informed Moreno that her services were being terminated effective 16 November 2002 constituted the second required notice. Moreno was also given the opportunity to explain her side when the special grievance committee asked her a series of questions pertaining to their investigation in a letter 39 dated 11 November 2002 and to which she replied likewise through a letter 40 dated 12 November 2002. In light of the foregoing, the Court holds that the dismissal of petitioner Moreno failed to comply with the substantive aspect of due process. Despite SSC-Rs observance of procedural due process, it nonetheless failed to discharge its burden of proving the legality of Morenos termination from employment. Thus, the imposed penalty of dismissal is hereby declared as invalid. In so ruling, this Court does not depreciate the misconduct committed by Moreno. Indeed, SSC-R has adequate reasons to impose sanctions on her. However, this should not be dismissal from employment. Because of the serious implications of this penalty, "our Labor Code decrees that an employee cannot be dismissed, except for the most serious causes." 41
Considering the presence of extenuating circumstances in the instant case, the Court deems it appropriate to impose the penalty of suspension of one (1) year on Moreno, to be counted from 16 November 2002, the effective date of her illegal dismissal. However, given the period of time in which Moreno was actually prevented from working in the respondent school, the said suspension should already be deemed served. Furthermore, the Court holds that Moreno should be reinstated to her former position, without loss of seniority rights and other privileges, but without payment of backwages. As a general rule, the normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement without loss of seniority rights; and secondly, the payment of backwages corresponding to the period from his illegal dismissal up to his actual reinstatement. The two forms of relief are, however, distinct and separate from each other. Though the grant of reinstatement commonly carries with it an award of backwages, the appropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. 42
In accordance with Durabuilt Recapping Plant & Co. v. National Labor Relations Commission, 43 the Court may not only mitigate, but also absolve entirely, the liability of the employer to pay backwages where good faith is evident. Likewise, backwages may be withheld from a dismissed employee where exceptional circumstances are availing. 44
In the present case, the good faith of SSC-R is apparent. The termination of Moreno from her employment cannot be said to have been carried out in a malevolent, arbitrary or oppressive manner. Indeed, the only mistake that the respondent school has committed was to strictly apply the provisions of its Faculty Manual and its contract with Moreno without regard for the aforementioned special circumstances that were attendant in this case. Even then, Morenos right to procedural due process was fully respected, as she was given the required twin notices and an ample opportunity to be heard. This fact was not even disputed by Moreno herself. With respect to Morenos claim for moral and exemplary damages, the same were never satisfactorily pleaded and substantiated. 45 Thus, they are hereby denied. Neither is Moreno entitled to the award of the monetary claims 46 in her petition, as no basis and proof for the grant thereof were ever adduced. The Court cannot likewise award attorneys fees to Moreno in view of the above- mentioned finding of good faith on the part of SSC-R 47 . It is a well-settled principle that even if a claimant is compelled to litigate with third persons or to incur expenses to protect the claimants rights, attorneys fees may still not be awarded where no sufficient showing of bad faith could be reflected in a partys persistence in a case other than an erroneous conviction of the righteousness of his cause. 48
WHEREFORE, the Petition for Review is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No 90083 dated 7 November 2006 is hereby REVERSED. Respondent San Sebastian College-Recoletos, Manila, is hereby ordered to reinstate Petitioner Jackqui R. Moreno without loss of seniority rights and other privileges. No pronouncement as to cost. SO ORDERED. 10, PALOMA VS. NLRC Before us are these two consolidated petitions for review under Rule 45 separately interposed by Ricardo G. Paloma and Philippine Airlines, Inc. (PAL) to nullify and set aside the Amended Decision 1 dated May 31, 2001 of the Court of Appeals (CA) in CA- G.R. SP No. 56429, as effectively reiterated in its Resolution 2 of January 14, 2003. The Facts Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35 years of continuous service, as senior vice president for finance. In March 1992, or some nine (9) months before Paloma retired on November 30, 1992, PAL was privatized. By way of post-employment benefits, PAL paid Paloma the total amount of PhP 5,163,325.64 which represented his separation/retirement gratuity and accrued vacation leave pay. For the benefits thus received, Paloma signed a document denominated Release and Quitclaim 3 but inscribed the following reservation therein: "Without prejudice to my claim for further leave benefits embodied in my aide memoire transmitted to Mr. Roberto Anonas covered by my 27 Nov. 1992 letter x x x." The leave benefits Paloma claimed being entitled to refer to his 450-day accrued sick leave credits which PAL allegedly only paid the equivalent of 18 days. He anchored his entitlement on Executive Order No. (EO) 1077 4 dated January 9, 1986, and his having accumulated a certain number of days of sick leave credits, as acknowledged in a letter of Alvia R. Leao, then an administrative assistant in PAL. Leaos letter dated November 12, 1992 pertinently reads: At your request, we are pleased to confirm herewith the balance of your sick leave credits as they appear in our records: 230 days. According to our existing policy, an employee is entitled to accumulate sick leave with pay only up to a maximum of 230 days. Had there been no ceiling as mandated by Company policy, your sick leave credits would have totaled 450 days to date. 5
Answering Palomas written demands for conversion to cash of his accrued sick leave credits, PAL asserted having paid all of Palomas commutable sick leave credits due him pursuant to company policy made applicable to PAL officers starting 1990. The company leave policy adverted to grants PALs regular ground personnel a graduated sick leave benefits, those having rendered at least 25 years of service being entitled to 20 days of sick leave for every year of service. An employee, under the policy, may accumulate sick leaves with pay up to 230 days. Subject to defined qualifications, sick leave credits in excess of 230 days shall be commutable to cash at the employees option and shall be paid in lump sum on or before May 31st of the following year they were earned. 6 Per PALs records, Paloma appears to have, for the period from 1990 to 1992, commuted 58 days of his sick leave credits, broken down as follows: 20 days each in 1990 and 1991 and 18 days in 1992. Subsequently, Paloma filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a Complaint 7 for Commutation of Accrued Sick Leaves Totaling 392 days. In the complaint, docketed as NLRC-NCR-Case No. 00-08-05792-94, Paloma alleged having accrued sick leave credits of 450 days commutable upon his retirement pursuant to EO 1077 which allows retiring government employees to commute, without limit, all his accrued vacation and sick leave credits. And of the 450-day credit, Paloma added, he had commuted only 58 days, leaving him a balance of 392 days of accrued sick leave credits for commutation. Ruling of the Labor Arbiter Issues having been joined with the filing by the parties of their respective position papers, 8 the labor arbiter rendered on June 30, 1995 a Decision 9 dispositively reading: WHEREFORE, premises considered, respondent PHILIPPINE AIRLINE[S], INC. is hereby ordered to pay within ten (10) days from receipt hereof herein complainant Ricardo G. Paloma, the sum of Six Hundred Seventy Five Thousand Pesos (P675,000.00) representing his one Hundred sixty two days [162] accumulated sick leave credits, plus ten (10%) percent attorneys fees of P67,500.00, or a total sum of P742,500.00. SO ORDERED. The labor arbiter held that PAL is not covered by the civil service system and, accordingly, its employees, like Paloma, cannot avail themselves of the beneficent provision of EO 1077. This executive issuance, per the labor arbiters decision, applies only to government officers and employees covered by the civil service, exclusive of the members of the judiciary whose leave and retirement system is covered by a special law. However, the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim for 202 accrued sick leave credits less 40 days for 1990 and 1991. Thus, the grant of commutation for 162 accrued leave credits. Both parties appealed 10 the decision of the labor arbiter to the NLRC. Ruling of the NLRC in NLRC NCR CA No. 009652-95 (NLRC-NCR-Case No. 00-08-05792-94) On November 26, 1997, the First Division of the NLRC rendered a Decision affirming that of the labor arbiter, thus: WHEREFORE, as recommended, both appeals are DISMISSED. The decision of Labor Arbiter Felipe T. Garduque II dated June 30, 1995 is AFFIRMED. SO ORDERED. 11
Both parties moved for reconsideration. In its Resolution of November 10, 1999, the NLRC, finding Paloma to have, upon his retirement, commutable accumulated sick leave credits of 230 days, modified its earlier decision, disposing as follows: In view of all the foregoing, our decision dated November 26, 1997, be modified by increasing the sick leave benefits of complainant to be commuted to cash from 162 days to 230 days. SO ORDERED. 12
From the above modificatory resolution of the NLRC, PAL went to the CA on a petition for certiorari under Rule 65, the recourse docketed as CA-G.R. SP No. 56429. Ruling of the CA in its April 28, 2000 Decision By a Decision dated April 28, 2000, the CA found for PAL, thus: WHEREFORE, the petition is granted. Public respondents November 10, 1999 Resolution is set aside. And the complaint of Ricardo Paloma is hereby DISMISSED. Without costs. SO ORDERED. 13
In time, Paloma sought reconsideration. 14
The May 31, 2001 Amended Decision On May 31, 2001, the CA issued the assailed Amended Decision reversing its April 28, 2000 Decision. The fallo of the Amended Decision reads: WHEREFORE, premises considered, our Judgment, dated 28 April 2000 is hereby vacated and, set aside, and another one entered reinstating the Resolution, dated 10 November 1999, issued by the public respondent National Labor Relations Commission in NLRC NCR Case No. 00-08-05792-94 [NLRC NCR CA No. 009652-95], entitled Ricardo G. Paloma v. Philippine Airlines, Incorporated, with the only modification that the total sums granted by Labor Arbiter Felipe T. Garduque II (P742,500.00, inclusive of the ten percent (10%) attorneys fees), as affirmed by public respondent National Labor Relations Commission, First Division, in said NLRC Case No. 00-08-05792-94, shall earn legal interest from the date of the institution of the complaint until fully paid/discharged. (Art. 2212, New Civil Code). SO ORDERED. 15
Justifying its amendatory action, the CA stated that EO 1077 applies to PAL and necessarily to Paloma on the following rationale: Section 2(1) of Article IX(B) of the 1987 Constitution applies prospectively and, thus, the expressed limitation therein on the applicability of the civil service law only to government-owned and controlled corporations (GOCCs) with original charters does not preclude the applicability of EO 1077 to PAL and its then employees. This conclusion, the CA added, becomes all the more pressing considering that PAL, at the time of the issuance of EO 1077, was still a GOCC and that Paloma had already 29 years of service at that time. The appellate court also stated that since PAL had then no existing retirement program, the provisions of EO 1077 shall serve as a retirement program for Paloma who had meanwhile acquired vested rights under the EO pursuant to Arts. 100 16 and 287 17 of the Labor Code. Significantly, despite affirmatively positing the applicability of EO 1077, the Amended Decision still deferred to PALs existing policy on the 230-day limit for accrued sick leave with pay that may be credited to its employees. Incongruously, while the CA reinstated the November 10, 1999 Resolution of the NLRC, it decreed the implementation of the labor arbiters Decision dated June 30, 1995. As may be recalled, the NLRC, in its November 10, 1999 Resolution, allowed a 230-day sick leave commutation, up from the 162 days granted under the June 30, 1995 Decision of the labor arbiter. Paloma immediately appealed the CAs Amended Decision via a Petition for Review on Certiorari under Rule 45, docketed as G.R. No. 148415. On the other hand, PAL first sought reconsideration of the Amended Decision, coming to us after the CA, per its January 14, 2003 Resolution, denied the desired reconsideration. In net effect then, PALs Petition for Review on Certiorari, docketed as G.R. No. 156764, assails both the Amended Decision and Resolution of the CA. The Issues In G.R. No. 148415, Paloma raises the sole issue of: WHETHER OR NOT THE [CA], IN HOLDING THAT E.O. NO. 1077 IS APPLICABLE TO PETITIONER AND YET APPLYING COMPANY POLICY BY AWARDING THE CASH EQUIVALENT OF ONLY 162 DAYS SICK LEAVE CREDITS INSTEAD OF THE 450 DAYS SICK LEAVE CREDITS PETITIONER IS ENTITLED TO UNDER E.O. NO. 1077, DECIDED A QUESTION OF SUBSTANCE IN A MANNER CONTRARY TO LAW AND APPLICABLE JURISPRUDENCE. 18
In G.R. No. 156764, PAL raises the following issues for our consideration: 1. May an employee of a non-government corporation [invoke EO] 1077 which the then President Ferdinand E. Marcos issued on January 9, 1986, solely for the benefit of government officers and employees covered by the civil service? 2. Can a judicial body modify or alter a company policy by ordering the commutation of sick leave credits which, under company policy is non- commutable? 19
The issues submitted boil down to the question of whether or not EO 1077, before PALs privatization, applies to its employees, and corollarily, whether or not Paloma is entitled to a commutation of his accrued sick leave credits. Subsumed to the main issue because EO 1077 applies only to government employees subject to civil service law is the question of whether or not PALwhich, as early as 1960 until its privatization, had been considered as a government-controlled corporationis covered by and subject to the limitations peculiar under the civil service system. There can be no quibbling, as a preliminary consideration, about PAL having been incorporated as a private corporation whose controlling stocks were later acquired by the GSIS, which is wholly owned by the government. Through the years before GSIS divested itself of its controlling interests over the airline, PAL was considered a government-controlled corporation, as we said as much in Phil. Air Lines Employees Assn. v. Phil. Air Lines, Inc., 20 a case commenced in August 1958 and finally resolved by the Court in 1964. The late Blas Ople, former Labor Secretary and a member of the 1986 Constitutional Commission, described PAL and other like entities spun off from the GSIS as "second generation corporations functioning as private subsidiaries." 21 Before the coming into force of the 1973 Constitution, a subsidiary of a wholly government-owned corporation or a government corporation with original charter was covered by the Labor Code. Following the ratification of the 1973 Constitution, these subsidiaries theoretically came within the pale of the civil service on the strength of this provision: "[T]he civil service embraces every branch, agency, subdivision and instrumentality of the Government, including every [GOCC] x x x." 22 Then came the 1987 Constitution which contextually delimited the coverage of the civil service only to a GOCC "with original charter." 23
The Courts Ruling Considering the applicable law and jurisprudence in the light of the undisputed factual milieu of the instant case, the setting aside of the assailed amended decision and resolution of the CA is indicated. Core Issue: Applicability of EO 1077 Insofar as relevant, EO 1077 dated January 9, 1986, entitled Revising the Computation of Creditable Vacation and Sick Leaves of Government Officers and Employees, provides: WHEREAS, under existing law and civil service regulations, the number of days of vacation and sick leaves creditable to a government officer or employee is limited to 300 days; WHEREAS, by special law, members of the judiciary are not subject to such restriction; WHEREAS, it is the continuing policy of the government to institute to the extent possible a uniform and equitable system of compensation and benefits and to enhance the morale and performance in the civil service. x x x x NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and direct the following: Section 1. Any officer [or] employee of the government who retires or voluntary resigns or is separated from the service through no fault of his own and whose leave benefits are not covered by special law, shall be entitled to the commutation of all the accumulated vacation and/or sick leaves to his credit, exclusive of Saturdays, Sundays, and holidays, without limitation as to the number of days of vacation and sick leaves that he may accumulate. (Emphasis supplied.) Paloma maintains that he comes within the coverage of EO 1077, the same having been issued in 1986, before he severed official relations with PAL, and at a time when the applicable constitutional provision on the coverage of the civil service made no distinction between GOCCs with original charters and those without, like PAL which was incorporated under the Corporation Code. Implicit in Palomas contention is the submission that he earned the bulk of his sick leave credits under the aegis of the 1973 Constitution when PAL, being then a government-controlled corporation, was under civil service coverage. The contention is without merit. PAL never ceased to be operated as a private corporation, and was not subjected to the Civil Service Law The Court can allow that PAL, during the period material, was a government-controlled corporation in the sense that the GSIS owned a controlling interest over its stocks. One stubborn fact, however, remains: Through the years, PAL functioned as a private corporation and managed as such for profit. Their personnel were never considered government employees. It may perhaps not be amiss for the Court to take judicial notice of the fact that the civil service law and rules and regulations have not actually been made to apply to PAL and its employees. Of governing application to them was the Labor Code. Consider: (a) Even during the effectivity of the 1973 Constitution but prior to the promulgation on January 17, 1985 of the decision in No. L-64313 entitled National Housing Corporation v. Juco, 24 the Court no less recognized the applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving discipline, personnel movements, and dismissal in GOCCs, among them PAL; 25 (b) Company policy and collective bargaining agreements (CBAs), instead of the civil service law and rules, govern the terms and conditions of employment in PAL. In fact, Ople rhetorically asked how PAL can be covered by the civil service law when, at one time, there were three (3) CBAs in PAL, one for the ground crew, one for the flight attendants, and one for the pilots; 26 and (c) When public sector unionism was just an abstract concept, labor unions in PAL with the right to engage in strike and other concerted activities were already active. 27
Not to be overlooked of course is the 1964 case of Phil. Air Lines Employees Assn., wherein the Court stated that "the Civil Service Law has not been actually applied to PAL." 28
Given the foregoing considerations, Paloma cannot plausibly be accorded the benefits of EO 1077 which, to stress, was issued to narrow the gap between the leave privileges between the members of the judiciary, on one hand, and other government officers and employees in the civil service, on the other. That PAL and Paloma may have, at a time, come within the embrace of the civil service by virtue of the 1973 Constitution is of little moment at this juncture. As held in National Service Corporation v. National Labor Relations Commission (NASECO), 29 the issue of whether or not a given GOCC falls within the ambit of the civil service subject, vis--vis disputes respecting terms and conditions of employment, to the jurisdiction of the Civil Service Commission or the NLRC, as the case may be, resolves itself into the question of which between the 1973 Constitution, which does not distinguish between a GOCC with or without an original charter, and the 1987 Constitution, which does, is in place. To borrow from the 1988 NASECO ruling, it is the 1987 Constitution, which delimits the coverage of the civil service, that should govern this case because it is the Constitution in place at the time the case was decided, even if, incidentally, the cause of action accrued during the effectivity of the 1973 Constitution. This has been the consistent holding of the Court in subsequent cases involving GOCCs without original charters. 30
It cannot be overemphasized that when Paloma filed his complaint for commutation of sick leave credits, private interests already controlled, if not owned, PAL. Be this as it may, Paloma, when he filed said complaint, cannot even assert being covered by the civil service and, hence, entitled to the benefits attached to civil service employment, such as the right under EO 1077 to accumulate and commute leave credits without limit. In all, then, Paloma, while with PAL, was never a government employee covered by the civil service law. As such, he did not acquire any vested rights on the retirement benefits accorded by EO 1077. Paloma not entitled to the benefits granted in EO 1077; existing company policy on the matter applies What governs Palomas entitlement to sick leave benefits and the computation and commutation of creditable benefits is not EO 1077, as the labor arbiter and originally the NLRC correctly held, but PALs company policy on the matter which, as found below, took effect in 1990. The text of the policy is reproduced in the CAs April 28, 2000 Decision and sets out the following pertinent rules: POLICY Regular employees shall be entitled to a yearly period of sick leave with pay, the exact number of days to be determined on the basis of the employees category and length of service in the company. RULES A. For ground personnel 2. Sick leave shall be granted only upon certification by a company physician that an employee is incapable of discharging his duties due to illness or injury x x x. x x x x 3. Sick leave entitlement accrues from the date of an employees regular employment x x x. In case of direct conversion from temporary/daily/project/contract to regular status, regular employment shall be deemed to have begun on the date of the employees conversion as a regular employee. x x x x 4. An employee may accumulate sick leave with pay up to Two Hundred Thirty (230) days; An employee who has accumulated seventy-five (75) days sick leave credit at the end of each year may, at his option, commute seventy-five percent (75%) of his current sick leave entitlement to cash and the other twenty-five percent (25%) to be added to his accrued sick leave credits up to two hundred thirty (230) calendar days. The seventy-five percent (75%) commutable to cash as above provided, shall be paid up in lump sum on or before May 31st of the following year. Sick leave credits in excess of two hundred thirty (230) days shall be commutable to cash at the employees option, and shall be paid in lump sum on or before May 31st of the following year it was earned. 31 (Emphasis ours.) As may be gathered from the records, accrued sick leave credits in excess of 230 days were not, if earned before 1990 when the above policy took effect, commutable to cash; they were simply forfeited. Those earned after 1990, but still subject to the 230-day threshold rule, were commutable to cash to the extent of 75% of the employees current entitlement, and payable on or before May 31st of the following year, necessarily implying that the privilege to commute is time-bound. It appears that Paloma had, as of 1990, more than 230 days of accrued sick leave credits. Following company policy, Paloma was deemed to have forfeited the monetary value of his leave credits in excess of the 230-day ceiling. Now, then, it is undisputed that he earned additional accrued sick leave credits of 20 days in 1990 and 1991 and 18 days in 1992, which he duly commuted pursuant to company policy and received with the corresponding cash value. Therefore, PAL is correct in contending that Paloma had received whatever was due on the commutation of his accrued sick leave credits in excess of the 230 days limit, specifically the 58 days commutation for 1990, 1991, and 1992. No commutation of 230 days accrued sick leave credits The query that comes next is how the 230 days accrued sick leave credits Paloma undoubtedly had when he retired are to be treated. Is this otherwise earned credits commutable to cash? These should be answered in the negative. The labor arbiter granted 162 days commutation, while the NLRC allowed the commutation of the maximum 230 days. The CA, while seemingly affirming the NLRCs grant of 230 days commutation, actually decreed a 162-day commutation. We cannot sustain any of the dispositions thus reached for lack of legal basis, for PALs company policy upon which either disposition was predicated did not provide for a commutation of the first 230 days accrued sick leave credits employees may have upon their retirement. Hence, the NLRC and the CA, by their act of allowing commutation to cash, erred as they virtually read in the policy something not written or intended therein. Indeed, no law provides for commutation of unused or accrued sick leave credits in the private sector. Commutation is allowed by way of voluntary endowment by an employer through a company policy or by a CBA. None of such medium presently obtains and it would be incongruous if the Court fills up the vacuum. Confronted with a similar situation as depicted above, the Court, in Baltazar v. San Miguel Brewery, Inc., declared as follows: In connection with the question of whether or not appellee is entitled to the cash value of six months accumulated sick leave, it appears that while under the last paragraph of Article 5 of appellants Rules and Regulations of the Health, Welfare and Retirement Plan (Exhibit 3), unused sick leave may be accumulated up to a maximum of six months, the same is not commutable or payable in cash upon the employees option. In our view, the only meaning and import of said rule and regulation is that if an employee does not choose to enjoy his yearly sick leave of thirty days, he may accumulate such sick leave up to a maximum of six months and enjoy this six months sick leave at the end of the sixth year but may not commute it to cash. 32 1avvphi 1 In fine, absent any provision in the applicable company policy authorizing the commutation of the 230 days accrued sick leave credits existing upon retirement, Paloma may not, as a matter of enforceable right, insist on the commutation of his sick leave credits to cash. As PALs senior vice-president for finance upon his retirement, Paloma knew or at least ought to have known the company policy on accrued sick leave credits and how it was being implemented. Had he acted on that knowledge in utmost good faith, these proceedings would have not come to pass. WHEREFORE, the petition under G.R. No. 148415 is hereby DISMISSED for lack of merit, while the petition underG.R. No. 156764 is hereby GIVEN DUE COURSE. The Amended Decision dated May 31, 2001 of the CA in CA-G.R. SP No. 56429 and its Resolution of January 14, 2003 are hereby ANNULLED and SET ASIDE, and the CA Decision dated April 28, 2000 is accordingly REINSTATED. Costs against Ricardo G. Paloma. SO ORDERED. 11. GSIS VS. RAOET Facts:
The respondents husband, Francisco, entered government service as an Engineer Trainee at the National Irrigation Administration (NIA). He was then promoted to the position of Engineer A the position he held until his death on May 5, 2001.
In 2000, Francisco was diagnosed with Hypertension, Severe, Stage III, Coronary Artery Disease, and he was confined at the Region I Medical Center from July 16 to July 25, 2000. As the GSIS considered this a work-related condition, Francisco was awarded 30 days Temporary Total Disability benefits, plus reimbursement of medical expenses incurred during treatment. On May 5, 2001, Francisco was rushed to the Dr. Marcelo M. Chan Memorial Hospital because he was vomiting blood. He was pronounced dead on arrival at the hospital. His death certificate listed the causes of his death as cardiac arrest. The respondent, as widow, filed with the GSIS a claim for income benefits accruing from the death of her husband, pursuant to Presidential Decree No. 626, as amended. The GSIS denied the claim on the ground that the respondent did not submit any supporting documents to show that Franciscos death was compensable. On appeal, the ECC affirmed the findings of the GSIS since it could not determine if Franciscos death was compensable due to the absence of documents supporting the respondents claim. The CA reversed the ECC decision. The appellate court held that while the Amended Rules on Employees Compensation does not list peptic ulcer as an occupational disease, Franciscos death should be compensable since its immediate cause was cardiac arrest. Issue: Is the CA correct in reversing the ruling of the ECC
Ruling: Yes. To be entitled to compensation, a claimant must show that the sickness is either: (1) a result of an occupational disease listed under Annex A of the Amended Rules on Employees Compensation under the conditions Annex A sets forth; or (2) if not so listed, that the risk of contracting the disease is increased by the working conditions. Based on Franciscos death certificate, the immediate cause of his death was cardiac arrest; the antecedent cause was acute massive hemorrhage, and the underlying cause was bleeding peptic ulcer disease. In determining the compensability of an illness, the workers employment need not be the sole factor in the growth, development, or acceleration of a claimants illness to entitle him to the benefits provided for. It is enough that his employment contributed, even if only in a small degree, to the development of the disease. P.D. 626 is a social legislation whose primordial purpose is to provide meaningful protection to the working class against the hazards of disability, illness, and other contingencies resulting in loss of income. In employee compensation, persons charged by law to carry out the Constitutions social justice objectives should adopt a liberal attitude in deciding compensability claims and should not hesitate to grant compensability where a reasonable measure of work-connection can be inferred. Only this kind of interpretation can give meaning and substance to the laws compassionate spirit as expressed in Article 4 of the Labor Code that all doubts in the implementation and interpretation of the provisions of the Labor Code, including their implementing rules and regulations, should be resolved in favor of labor.
[1] 3. upon sign off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one-hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. 11. ARCO METAL PRODUCTS VS. SAMRM-NAFLU TINGA, J .: This treats of the Petition for Review 1 of the Resolution 2 and Decision 3 of the Court of Appeals dated 9 December 2005 and 29 September 2005, respectively in CA-G.R. SP No. 85089 entitled Samahan ng mga Manggagawa sa Arco Metal-NAFLU (SAMARM-NAFLU) v. Arco Metal Products Co., Inc. and/or Mr. Salvador Uy/Accredited Voluntary Arbitrator Apron M. Mangabat, 4 which ruled that the 13 th month pay, vacation leave and sick leave conversion to cash shall be paid in full to the employees of petitioner regardless of the actual service they rendered within a year. Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor union of petitioners rank and file employees. Sometime in December 2003, petitioner paid the 13 th month pay, bonus, and leave encashment of three union members in amounts proportional to the service they actually rendered in a year, which is less than a full twelve (12) months. The employees were: 1. Rante Lamadrid Sickness 27 August 2003 to 27 February 2004 2. Alberto Gamban Suspension 10 June 2003 to 1 July 2003 3. Rodelio Collantes Sickness August 2003 to February 2004 Respondent protested the prorated scheme, claiming that on several occasions petitioner did not prorate the payment of the same benefits to seven (7) employees who had not served for the full 12 months. The payments were made in 1992, 1993, 1994, 1996, 1999, 2003, and 2004. According to respondent, the prorated payment violates the rule against diminution of benefits under Article 100 of the Labor Code. Thus, they filed a complaint before the National Conciliation and Mediation Board (NCMB). The parties submitted the case for voluntary arbitration. The voluntary arbitrator, Apron M. Mangabat, ruled in favor of petitioner and found that the giving of the contested benefits in full, irrespective of the actual service rendered within one year has not ripened into a practice. He noted the affidavit of Joselito Baingan, manufacturing group head of petitioner, which states that the giving in full of the benefit was a mere error. He also interpreted the phrase "for each year of service" found in the pertinent CBA provisions to mean that an employee must have rendered one year of service in order to be entitled to the full benefits provided in the CBA. 5
Unsatisfied, respondent filed a Petition for Review 6 under Rule 43 before the Court of Appeals, imputing serious error to Mangabats conclusion. The Court of Appeals ruled that the CBA did not intend to foreclose the application of prorated payments of leave benefits to covered employees. The appellate court found that petitioner, however, had an existing voluntary practice of paying the aforesaid benefits in full to its employees, thereby rejecting the claim that petitioner erred in paying full benefits to its seven employees. The appellate court noted that aside from the affidavit of petitioners officer, it has not presented any evidence in support of its position that it has no voluntary practice of granting the contested benefits in full and without regard to the service actually rendered within the year. It also questioned why it took petitioner eleven (11) years before it was able to discover the alleged error. The dispositive portion of the courts decision reads: WHEREFORE, premises considered, the instant petition is hereby GRANTED and the Decision of Accredited Voluntary Arbiter Apron M. Mangabat in NCMB-NCR Case No. PM-12-345-03, dated June 18, 2004 is hereby AFFIRMED WITH MODIFICATION in that the 13 th month pay, bonus, vacation leave and sick leave conversions to cash shall be paid to the employees in full, irrespective of the actual service rendered within a year. 7
Petitioner moved for the reconsideration of the decision but its motion was denied, hence this petition. Petitioner submits that the Court of Appeals erred when it ruled that the grant of 13 th month pay, bonus, and leave encashment in full regardless of actual service rendered constitutes voluntary employer practice and, consequently, the prorated payment of the said benefits does not constitute diminution of benefits under Article 100 of the Labor Code. 8
The petition ultimately fails. First, we determine whether the intent of the CBA provisions is to grant full benefits regardless of service actually rendered by an employee to the company. According to petitioner, there is a one-year cutoff in the entitlement to the benefits provided in the CBA which is evident from the wording of its pertinent provisions as well as of the existing law. We agree with petitioner on the first issue. The applicable CBA provisions read: ARTICLE XIV-VACATION LEAVE Section 1. Employees/workers covered by this agreement who have rendered at least one (1) year of service shall be entitled to sixteen (16) days vacation leave with pay for each year of service. Unused leaves shall not be cumulative but shall be converted into its cash equivalent and shall become due and payable every 1 st Saturday of December of each year. However, if the 1 st Saturday of December falls in December 1, November 30 (Friday) being a holiday, the management will give the cash conversion of leaves in November 29. Section 2. In case of resignation or retirement of an employee, his vacation leave shall be paid proportionately to his days of service rendered during the year. ARTICLE XV-SICK LEAVE Section 1. Employees/workers covered by this agreement who have rendered at least one (1) year of service shall be entitled to sixteen (16) days of sick leave with pay for each year of service. Unused sick leave shall not be cumulative but shall be converted into its cash equivalent and shall become due and payable every 1 st Saturday of December of each year. Section 2. Sick Leave will only be granted to actual sickness duly certified by the Company physician or by a licensed physician. Section 3. All commutable earned leaves will be paid proportionately upon retirement or separation. ARTICLE XVI EMERGENCY LEAVE, ETC. Section 1. The Company shall grant six (6) days emergency leave to employees covered by this agreement and if unused shall be converted into cash and become due and payable on the 1 st Saturday of December each year. Section 2. Employees/workers covered by this agreement who have rendered at least one (1) year of service shall be entitled to seven (7) days of Paternity Leave with pay in case the married employees legitimate spouse gave birth. Said benefit shall be non-cumulative and non-commutative and shall be deemed in compliance with the law on the same. Section 3. Maternity leaves for married female employees shall be in accordance with the SSS Law plus a cash grant of P1,500.00 per month. x x x ARTICLE XVIII- 13 TH MONTH PAY & BONUS Section 1. The Company shall grant 13 th Month Pay to all employees covered by this agreement. The basis of computing such pay shall be the basic salary per day of the employee multiplied by 30 and shall become due and payable every 1 st Saturday of December. Section 2. The Company shall grant a bonus to all employees as practiced which shall be distributed on the 2 nd Saturday of December. Section 3. That the Company further grants the amount of Two Thousand Five Hundred Pesos (P2,500.00) as signing bonus plus a free CBA Booklet. 9 (Underscoring ours) There is no doubt that in order to be entitled to the full monetization of sixteen (16) days of vacation and sick leave, one must have rendered at least one year of service. The clear wording of the provisions does not allow any other interpretation. Anent the 13 th month pay and bonus, we agree with the findings of Mangabat that the CBA provisions did not give any meaning different from that given by the law, thus it should be computed at 1/12 of the total compensation which an employee receives for the whole calendar year. The bonus is also equivalent to the amount of the 13 th month pay given, or in proportion to the actual service rendered by an employee within the year. On the second issue, however, petitioner founders. As a general rule, in petitions for review under Rule 45, the Court, not being a trier of facts, does not normally embark on a re-examination of the evidence presented by the contending parties during the trial of the case considering that the findings of facts of the Court of Appeals are conclusive and binding on the Court. 10 The rule, however, admits of several exceptions, one of which is when the findings of the Court of Appeals are contrary to that of the lower tribunals. Such is the case here, as the factual conclusions of the Court of Appeals differ from that of the voluntary arbitrator. Petitioner granted, in several instances, full benefits to employees who have not served a full year, thus: Name Reason Duration 1. Percival Bernas Sickness July 1992 to November 1992 2. Cezar Montero Sickness 21 Dec. 1992 to February 1993 3. Wilson Sayod Sickness May 1994 to July 1994 4. Nomer Becina Suspension 1 Sept. 1996 to 5 Oct. 1996 5. Ronnie Licuan Sickness 8 Nov. 1999 to 9 Dec. 1999 6. Guilbert Villaruel Sickness 23 Aug. 2002 to 4 Feb. 2003 7. Melandro Moque Sickness 29 Aug. 2003 to 30 Sept. 2003 11
Petitioner claims that its full payment of benefits regardless of the length of service to the company does not constitute voluntary employer practice. It points out that the payments had been erroneously made and they occurred in isolated cases in the years 1992, 1993, 1994, 1999, 2002 and 2003. According to petitioner, it was only in 2003 that the accounting department discovered the error "when there were already three (3) employees involved with prolonged absences and the error was corrected by implementing the pro-rata payment of benefits pursuant to law and their existing CBA." 12 It adds that the seven earlier cases of full payment of benefits went unnoticed considering the proportion of one employee concerned (per year) vis vis the 170 employees of the company. Petitioner describes the situation as a "clear oversight" which should not be taken against it. 13 To further bolster its case, petitioner argues that for a grant of a benefit to be considered a practice, it should have been practiced over a long period of time and must be shown to be consistent, deliberate and intentional, which is not what happened in this case. Petitioner tries to make a case out of the fact that the CBA has not been modified to incorporate the giving of full benefits regardless of the length of service, proof that the grant has not ripened into company practice. We disagree. Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or eliminated by the employer. 14 The principle of non-diminution of benefits is founded on the Constitutional mandate to "protect the rights of workers and promote their welfare," 15 and "to afford labor full protection." 16 Said mandate in turn is the basis of Article 4 of the Labor Code which states that "all doubts in the implementation and interpretation of this Code, including its implementing rules and regulations shall be rendered in favor of labor." Jurisprudence is replete with cases which recognize the right of employees to benefits which were voluntarily given by the employer and which ripened into company practice. Thus in Davao Fruits Corporation v. Associated Labor Unions, et al. 17 where an employer had freely and continuously included in the computation of the 13 th month pay those items that were expressly excluded by the law, we held that the act which was favorable to the employees though not conforming to law had thus ripened into a practice and could not be withdrawn, reduced, diminished, discontinued or eliminated. In Sevilla Trading Company v. Semana, 18 we ruled that the employers act of including non-basic benefits in the computation of the 13 th month pay was a voluntary act and had ripened into a company practice which cannot be peremptorily withdrawn. Meanwhile in Davao Integrated Port Stevedoring Services v. Abarquez, 19 the Court ordered the payment of the cash equivalent of the unenjoyed sick leave benefits to its intermittent workers after finding that said workers had received these benefits for almost four years until the grant was stopped due to a different interpretation of the CBA provisions. We held that the employer cannot unilaterally withdraw the existing privilege of commutation or conversion to cash given to said workers, and as also noted that the employer had in fact granted and paid said cash equivalent of the unenjoyed portion of the sick leave benefits to some intermittent workers. In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and consistently granting full benefits to its employees regardless of the length of service rendered. True, there were only a total of seven employees who benefited from such a practice, but it was an established practice nonetheless. Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice. 20 Thus, it can be six (6) years, 21 three (3) years, 22 or even as short as two (2) years. 23 Petitioner cannot shirk away from its responsibility by merely claiming that it was a mistake or an error, supported only by an affidavit of its manufacturing group head portions of which read: 5. 13 th month pay, bonus, and cash conversion of unused/earned vacation leave, sick leave and emergency leave are computed and paid in full to employees who rendered services to the company for the entire year and proportionately to those employees who rendered service to the company for a period less than one (1) year or twelve (12) months in accordance with the CBA provision relative thereto. 6. It was never the intention much less the policy of the management to grant the aforesaid benefits to the employees in full regardless of whether or not the employee has rendered services to the company for the entire year, otherwise, it would be unjust and inequitable not only to the company but to other employees as well. 24
In cases involving money claims of employees, the employer has the burden of proving that the employees did receive the wages and benefits and that the same were paid in accordance with law. 25
Indeed, if petitioner wants to prove that it merely erred in giving full benefits, it could have easily presented other proofs, such as the names of other employees who did not fully serve for one year and thus were given prorated benefits. Experientially, a perfect attendance in the workplace is always the goal but it is seldom achieved. There must have been other employees who had reported for work less than a full year and who, as a consequence received only prorated benefits. This could have easily bolstered petitioners theory of mistake/error, but sadly, no evidence to that effect was presented. IN VIEW HEREOF, the petition is DENIED. The Decision of the Court of Appeals in CA- G.R. SP No. 85089 dated 29 September 2005 is and its Resolution dated 9 December 2005 are herebyAFFIRMED. SO ORDERED.
12. MANOLO A. PENAFLOR VS. OUTDOOR CLOTHING MANUFACTURING CORPORATION Peaflor was hired on September 2, 1999 as probationary Human Resource Department (HRD) Manager of respondent Outdoor Clothing Manufacturing Corporation (Outdoor Clothing or the company). As HRD head, Peaflor was expected to (1) secure and maintain the right quality and quantity of people needed by the company; (2) maintain the harmonious relationship between the employees and management in a role that supports organizational goals and individual aspirations; and (3) represent the company in labor cases or proceedings. Two staff members were assigned to work with him to assist him in undertaking these functions. Peaflor claimed that his relationship with Outdoor Clothing went well during the first few months of his employment; he designed and created the companys Policy Manual, Personnel Handbook, Job Expectations, and Organizational Set-Up during this period. His woes began when the companys Vice President for Operations, Edgar Lee (Lee), left the company after a big fight between Lee and Chief Corporate Officer Nathaniel Syfu (Syfu). Because of his close association with Lee, Peaflor claimed that he was among those who bore Syfus ire. When Outdoor Clothing began undertaking its alleged downsizing program due to negative business returns, Peaflor alleged that his department had been singled out. On the pretext of retrenchment, Peaflors two staff members were dismissed, leaving him as the only member of Outdoor Clothings HRD and compelling him to perform all personnel-related work. He worked as a one-man department, carrying out all clerical, administrative and liaison work; he personally went to various government offices to process the companys papers. When an Outdoor Clothing employee, Lynn Padilla (Padilla), suffered injuries in a bombing incident, the company required Peaflor to attend to her hospitalization needs; he had to work outside office premises to undertake this task. As he was acting on the companys orders, Peaflor considered himself to be on official business, but was surprised when the company deducted six days salary corresponding to the time he assisted Padilla. According to Finance Manager Medylene Demogena (Demogena), he failed to submit his trip ticket, but Peaflor belied this claim as a trip ticket was required only when a company vehicle was used and he did not use any company vehicle when he attended to his off-premises work. After Peaflor returned from his field work on March 13, 2000, his officemates informed him that while he was away, Syfu had appointed Nathaniel Buenaobra (Buenaobra) as the new HRD Manager. This information was confirmed by Syfus memorandum of March 10, 2000 to the entire office stating that Buenaobra was the concurrent HRD and Accounting Manager. Peaflor was surprised by the news; he also felt betrayed and discouraged. He tried to talk to Syfu to clarify the matter, but was unable to do so. Peaflor claimed that under these circumstances, he had no option but to resign. He submitted a letter to Syfu declaring his irrevocable resignation from his employment with Outdoor Clothing effective at the close of office hours on March 15, 2000. Peaflor then filed a complaint for illegal dismissal with the labor arbiter, claiming that he had been constructively dismissed. He included in his complaint a prayer for reinstatement and payment of backwages, illegally deducted salaries, damages, attorneys fees, and other monetary claims. In his August 15, 2001 decision, the labor arbiter found that Peaflor had been illegally dismissed. Outdoor Clothing was consequently ordered to reinstate Peaflor to his former or to an equivalent position, and to pay him his illegally deducted salary for six days, proportionate 13th month pay, attorneys fees, moral and exemplary damages. Outdoor Clothing appealed the labor arbiters decision with the NLRC. It insisted that Peaflor had not been constructively dismissed, claiming that Peaflor tendered his resignation on March 1, 2000 because he saw no future with the corporation due to its dire financial standing. The NLRC apparently found Outdoor Clothings submitted memoranda sufficient to overturn the labor arbiters decision. It characterized Peaflors resignation as a response, not to the allegedly degrading and hostile treatment that he was subjected to by Syfu, but to Outdoor Clothings downward financial spiral. Buenaobras appointment was made only after Peaflor had submitted his resignation letter, and this was made to cover the vacancy Peaflors resignation would create. Thus, Peaflor was not eased out from his position as HRD manager. No malice likewise was present in the companys decision to dismiss Peaflors two staff members; the company simply exercised its management prerogative to address the financial problems it faced. Peaflor, in fact, drafted the dismissal letters of his staff members. In the absence of any illegal dismissal, no basis existed for the monetary awards the labor arbiter granted. In a decision dated December 29, 2006, the CA affirmed the NLRCs decision, stating that Peaflor failed to present sufficient evidence supporting his claim that he had been constructively dismissed. The CA ruled that Peaflors resignation was knowingly and voluntarily made.Faced with these CA actions, Peaflor filed with us the present petition for review on certiorari. THE ISSUE and THE COURTS RULING The Court finds the petition meritorious. The petition turns on the question of whether Peaflors undisputed resignation was a voluntary or a forced one, in the latter case making it a constructive dismissal equivalent to an illegal dismissal. A critical fact necessary in resolving this issue is whether Peaflor filed his letter of resignation before or after the appointment of Buenaobra as the new/concurrent HRD manager. This question also gives rise to the side issue of when Buenaobras appointment was made. If the resignation letter was submitted before Syfus appointment of Buenaobra as new HRD manager, little support exists for Peaflors allegation that he had been forced to resign due to the prevailing abusive and hostile working environment. Buenaobras appointment would then be simply intended to cover the vacancy created by Peaflors resignation. On the other hand, if the resignation letter was submitted after the appointment of Buenaobra, then factual basis exists indicating that Peaflor had been constructively dismissed as his resignation was a response to the unacceptable appointment of another person to a position he still occupied. The question of when Peaflor submitted his resignation letter arises because this letter undisputably made was undated. Despite Peaflors claim of having impressive intellectual and academic credentials, his resignation letter, for some reason, was undated. Thus, the parties have directly opposing claims on the matter. Peaflor claims that he wrote and filed the letter on the same date he made his resignation effective March 15, 2000. Outdoor Clothing, on the other hand, contends that the letter was submitted on March 1, 2000, for which reason Syfu issued a memorandum of the same date appointing Buenaobra as the concurrent HRD manager; Syfus memorandum cited Peaflors intention to resign so he could devote his time to teaching. The company further cites in support of its case Buenaobras March 3, 2000 memorandum accepting his appointment. Another piece of evidence is the Syfu memorandum of March 10, 2000, which informed the office of the appointment of Buenaobra as the concurrent Head of HRD the position that Peaflor occupied. Two other memoranda are alleged to exist, namely, the AWOL memoranda of March 6 and 11, 2000, allegedly sent to Penaflor. Several reasons arising directly from these pieces of evidence lead us to conclude that Peaflor did indeed submit his resignation letter on March, 15, 2000, i.e., on the same day that it was submitted. The circumstances and other evidence surrounding Peaflors resignation support his claim that he was practically compelled to resign from the company. Foremost among these is the memorandum of March 10, 2000 signed by Syfu informing the whole office ("To: All concerned") about the designation of Buenaobra as concurrent Accounting and HRD Manager. In contrast with the suspect memoranda we discussed above, this memorandum properly bore signatures acknowledging receipt and dates of receipt by at least five company officials, among them the readable signature of Demogene and one Agbayani; three of them acknowledged receipt on March 13, 2000, showing that indeed it was only on that day that the appointment of Buenaobra to the HRD position was disclosed. This evidence is fully consistent with Peaflors position that it was only in the afternoon of March 13, 2000 that he was told, informally at that, that Buenaobra had taken over his position. It explains as well why as late as March 13, 2000, Peaflor still prepared and signed a security report, and is fully consistent with his position that on that day he was still working on the excuse letter of certain sales personnel of the company. In our view, it is more consistent with human experience that Peaflor indeed learned of the appointment of Buenaobra only on March 13, 2000 and reacted to this development through his resignation letter after realizing that he would only face hostility and frustration in his working environment. Three very basic labor law principles support this conclusion and militate against the companys case. The first is the settled rule that in employee termination disputes, the employer bears the burden of proving that the employees dismissal was for just and valid cause. That Peaflor did indeed file a letter of resignation does not help the companys case as, other than the fact of resignation, the company must still prove that the employee voluntarily resigned. There can be no valid resignation where the act was made under compulsion or under circumstances approximating compulsion, such as when an employees act of handing in his resignation was a reaction to circumstances leaving him no alternative but to resign. In sum, the evidence does not support the existence of voluntariness in Peaflors resignation. Last but not the least, we have repeatedly given significance in abandonment and constructive dismissal cases to the employees reaction to the termination of his employment and have asked the question: is the complaint against the employer merely a convenient afterthought subsequent to abandonment or a voluntary resignation? We find from the records that Peaflor sought almost immediate official recourse to contest his separation from service through a complaint for illegal dismissal. This is not the act of one who voluntarily resigned; his immediate complaints characterize him as one who deeply felt that he had been wronged.
13. HILARIO S. RAMIREZ VS. CA Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 182626 December 4, 2009 HILARIO S. RAMIREZ, Petitioner, vs. HON. COURT OF APPEALS, Cebu City, HON. NLRC, 4th Division, Cebu City and MARIO S. VALCUEBA, Respondents. D E C I S I O N CHICO-NAZARIO, J .: This is a Petition for Review under Rule 45 of the Rules of Court assailing the (a) 13 July 2007 Resolution1 of the Court of Appeals which dismissed the Petition for Certiorari under Rule 65 filed by petitioner Hilario Ramirez for failure to properly verify his petition and to state material dates and (b) the 7 March 2008 Resolution2 of the same court denying petitioners Motion for reconsideration. The facts are: Respondent Mario Valcueba (Valcueba) filed a Complaint3 for illegal dismissal and nonpayment of wage differential, 13th month pay differential, holiday pay, premium pay for holidays and rest days, and service incentive leaves with claims for moral and exemplary damages and attorneys fees, against Hilario Ramirez (Ramirez). Valcueba claimed that Ramirez hired him as mechanic on 28 May 1999. By 2002, he was paid a daily wage of P140.00, which was increased to P165.00 a day in 2003 and to P190.00 in 2005. He was not paid for holidays and rest days. He was not also paid the complete amount of his 13th month pay. On 27 February 2006, Josephine Torres, secretary of Ramirez, informed Valcueba that he would not be allowed to return to work unless he agreed to work on pakyaw basis.4 Aggrieved, he filed this case. Ramirez, on the other hand, presented a different version of the antecedents, asserting that Valcueba was first hired as construction worker, then as helper of the mechanic, and eventually as mechanic. There were three categories of mechanics at the workplace. First were the mechanics assigned to specific stations. Second were the mechanics paid on pakyaw basis; and finally, those who were classified as rescue/emergency mechanics. Valcueba belonged to the last category. As emergency/rescue mechanic, he was assigned to various stations to perform emergency/rescue work. On 26 February 2006, while he was assigned at the Babag station, Ramirez directed him to proceed to Calawisan, Lapu-lapu City, as a unit had developed engine trouble and the mechanic assigned in that area was absent. Valcueba did not report to the Calawisan station. In fact, he did not report for work anymore, as he allegedly intended to return to Mindanao.5 Further, Ramirez insisted that Valcueba was never terminated from his employment. On the contrary, it was the latter who abandoned his job. On 26 February 2006, Valcueba, as rescue or emergency mechanic, temporarily assigned at Babag Station, did not report at Calawisan, Lapulapu City when Ramirez ordered him to answer an emergency call, which required him to fix Ramirezs troubled taxi unit. The mechanic assigned in the area was then absent at that time. The refusal of Valcueba to obey the lawful order of Ramirez was bolstered by his failure to report for work the following day, 27 February 2006. Valcueba advanced no reason regarding his failure to answer an emergency call of duty, nor did he file an application for a leave of absence when he failed to report for work that day. After hearing, the Labor Arbiter rendered her decision, where she pointed out that: The allegation of complainant that his refusal to work on pakiao basis prompted respondent Hilario Ramirez to dismiss him from the service is not substantiated by any piece of evidence. Not even a declaration under oath by any affiant attesting to the credibility of complainants allegation is presented. No documentary evidence purporting to clearly indicate that complainant was discharged was submitted for Our judicious consideration. A fortiori, there is reason for Us to doubt complainants submission that he was dismissed from his employment grounded on disobedience to the lawful order of respondent. On the side of respondent Ramirez, he insisted that complainant was never terminated from his employment. On the contrary, he alleged that it was complainant who abandoned his job. As rescue or emergency mechanic temporarily assigned at Babag Station, on February 26, 2006, complainant did not report at Calawisan, Lapu-Lapu City when respondent Ramirez ordered him to answer an emergency call, which required him to fix the respondents troubled taxi unit. The mechanic assigned in the area was then absent at that time. The refusal of complainant to obey the lawful order of respondent Ramirez is bolstered by his failure to report for work the following day, February 27, 2006. Complainant advanced no reason as to why he failed to answer an emergency call of duty nor did he file an application for a leave of absence when he failed to report for work that day. Nonetheless, as the records are bereft of any evidence that respondent sent complainant a letter which advised the latter to report for work, We do not rule out a case of abandonment because the overt act of not answering an emergency call is not insufficient to constitute abandonment. Consequently, there being no dismissal nor abandonment involved in this case, it is best that the parties to this case should be restored to their previous employment relations. Complainant must go back to work within ten (10) days from receipt of this judgment, while respondent must accept complainant back to work, also within ten (10) days from receipt of this decision.6 In the end, the Labor Arbiter decreed: WHEREFORE, VIEWED FROM THE FOREGOING, judgment is hereby rendered declaring respondent HILARIO RAMIREZ, OWNER OF H.R. TAXI, NOT GUILTY of illegally dismissing complainant from the service, it appearing that there is no dismissal to speak of in this case. Consequently, complainant is ordered to report back for work within ten (10) days from receipt hereof, and respondent Hilario Ramirez must complainant (sic) back to work as soon as the latter would express his intention to report for work or within the same period of ten (10) days from receipt hereof, whichever comes first. Proof of compliance hereof, must be submitted within the same period (sic), complainant would be guilty of abandonment and respondent of illegal dismissal. In addition, respondent HILARIO RAMIREZ, owner of H.R. Taxi, is hereby ordered to pay complainant MARIO S. VALCUEBA the following: a. Wage Differential - P30,538.00 b. 13th Month Pay - 15,287.98 Total Award - P45,825.98 Philippine currency, within ten (10) days from receipt hereof, through the Cashier of this Arbitration Branch. Other claims are DISMISSED for failure to substantiate.7 Records show that Ramirez received the Labor Arbiters decision on 5 June 2006. He filed a Motion for Reconsideration and/or Memorandum of Appeal with Urgent Motion to Reduce Appeal Bond8 on the 9th day of the reglementary period or on 14 June 2006 before the National Labor Relations Commission (NLRC). Resolving the motion, the NLRC issued a Resolution9 dated 29 September 2006, which reads: Upon a careful perusal of the motion to reduce bond, however, the Commission found that the same does not comply with Section 6, Rule VI of the NLRC Rules of Procedure. x x x x Respondent has not offered a meritorious ground for the reduction of the appeal bond and the amount of P10,000.00 he posted is not a reasonable amount in relation to the monetary award of P45,825.98. Consequently, his motion to reduce appeal bond shall not be entertained and his appeal is dismissed for non-perfection due to lack of an appeal bond. The NLRC then held: WHEREFORE, premises considered, the appeal of respondent is hereby DISMISSED for nonperfection due to want of an appeal bond.10 Ramirez filed a Motion for Reconsideration, which the NLRC resolved in a Resolution dated 20 December 2006 in this wise: The mere filing of a motion to reduce bond without complying with the requisites of meritorious grounds and posting of a bond in a reasonable amount in relation to the monetary award does not stop the running of the period to perfect an appeal. Thus, respondents failure to abide with the requisites so mentioned has not perfected his appeal. Verily, since the assailed Decision of the Labor Arbiter contains a monetary award in favor of complainant, it behooves upon respondent to post the required bond. While the filing of a motion to reduce bond can be considered as a motion of preference in case of an appeal, the same holds true only when such motion complies with the requirements stated above. Consequently, respondents motion to reduce bond which missed to comply with such requisites does not deserve to be entertained nor to be given a preferred resolution. WHEREFORE, premises considered, the motion for reconsideration of respondent is hereby DENIED for lack of merit.11 The decision of the Labor Arbiter became final and executory on 19 February 2007 and was entered in the Book of Entries of Judgment on 4 May 2007.12 Ramirez went up to the Court of Appeals. The case was docketed as CA-G.R. SP No. 02614. In a resolution dated 13 July 2007,13 the Court of Appeals dismissed the Petition outright for failure of Ramirez to properly verify his petition and to state material dates. Ramirezs Motion for Reconsideration was denied by the Court of Appeals in a resolution dated 7 March 2008;14 hence, this petition where Ramirez prays that the "dismissal resolution issued by the Court of Appeals be set aside and in its stead to give due course to this petition by dismissing the unwarranted claims imposed by the NLRC for being highly speculative, with no evidence to support of (sic)."15 The issues are: I PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT CONSIDERING THE SUBSTANTIAL COMPLIANCE OF THE FILED PETITION. II THE DISMISSAL RESOLUTION (ANNEX "A") HAS NOT RESOLVED THE LEGAL ISSUES RAISED IN CA-G.R. SP NO. 02614.16 The case presents no novel issue. We first resolve the propriety of dismissal by the NLRC. At the outset, it should be stressed that the right to appeal is not a natural right or a part of due process; it is merely a statutory privilege, and may be exercised only in the manner prescribed by and in accordance with the provisions of law. The party who seeks to avail himself of the same must comply with the requirements of the rules. Failing to do so, he loses the right to appeal.17 Article 223 of the Labor Code provides for the procedure in case of appeal to the NLRC: Art. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and d. If serious errors in the finding of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. (Emphasis supplied.) Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as amended, reaffirms the explicit jurisdictional principle in Article 223 even as it allows in justifiable cases the reduction of the appeal bond. The relevant provision states: SECTION 4. Requisites for Perfection of Appeal. - (a) The appeal shall be: 1) filed within the reglementary period provided in Section 1 of this Rule; 2) verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; 3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; for in three (3) legibly type written or printed copies; and 5) accompanied by i) proof payment of the required appeal fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of service upon the other parties. x x x x SECTION 6. Bond. In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees. x x x x No motion to reduce bond shall be entertained except on meritorious grounds, and only upon the posting of a bond in a reasonable amount in relation to the monetary award. The mere filing of a motion to reduce bond without complying with the requisites in the preceding paragraphs shall not stop the running of the period to perfect an appeal. Under the Rules, appeals involving monetary awards are perfected only upon compliance with the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the memorandum of appeal; and (3) payment of the required cash or surety bond.18 The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the labor arbiter. The intention of the lawmakers to make the bond a mandatory requisite for the perfection of an appeal by the employer is clearly expressed in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" in Articles 223 of the Labor Code makes it unmistakably plain that the lawmakers intended the posting of a cash or surety bond by the employer to be the essential and exclusive means by which an employer's appeal may be perfected. The word "may" refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction.19 Clearly, the filing of the bond is not only mandatory but also a jurisdictional requirement that must be complied with in order to confer jurisdiction upon the NLRC. Non- compliance with the requirement renders the decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer's appeal. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees just and lawful claims.20 In this case, although Ramirez posted an appeal bond, the same was insufficient, as it was not equivalent to the monetary award of the Labor Arbiter. Moreover, when Ramirez sought a reduction of the bond, he merely said that the bond was excessive and baseless without amplifying why he considered it as such.21 Colby Construction and Management Corporation v. National Labor Relations Commission22 succinctly elucidates that an employer who files a motion to reduce the appeal bond is still required to post the full amount of cash or surety bond within the ten-day reglementary period, even pending resolution of his motion. Very recently, in Mcburnie v. Guanzon, the respondents therein filed their memorandum of appeal and motion to reduce bond on the 10th or last day of the reglementary period. Although they posted an initial appeal bond, the same was inadequate compared to the monetary award. The Court found no basis for therein respondents contention that the awards of the Labor Arbiter were null and excessive. We emphasized in that case that it behooves the Court to give utmost regard to the legislative and administrative intent to strictly require the employer to post a cash or surety bond securing the full amount of the monetary award within the 10-day reglementary period. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bond that is less than the monetary award in the judgment, or deems such insufficient posting as sufficient to perfect the appeal.23 By stating that the bond is excessive and baseless without more, and without proof that he is incapable of raising the amount of the bond, Ramirez did not even come near to substantially complying with the requirements of Art. 223 of the Labor Code and NLRC Rule of Procedure. Given that Ramirez is involved in taxi business, he has not shown that he had difficulty raising the amount of the bond or was unable to raise the amount specified in the award of the Labor Arbiter. All given, the NLRC justifiably denied the motion to reduce bond, as it had no basis upon which it could actually and completely determine Ramirezs motion to reduce bond. We have consistently enucleated that a mere claim of excessive bond without more does not suffice. Thus, in Ong v. Court of Appeals,24 this Court held that the NLRC did not act with grave abuse of discretion when it denied petitioners motion, for the same failed to elucidate why the amount of the bond was either unjustified or prohibitive. In Calabash Garments, Inc. v. National Labor Relations Commission,25 it was held that "a substantial monetary award, even if it runs into millions, does not necessarily give the employerappellant a `meritorious case and does not automatically warrant a reduction of the appeal bond." It is clear from both the Labor Code and the NLRC Rules of Procedure that there is legislative and administrative intent to strictly apply the appeal bond requirement, and the Court should give utmost regard to this intention. There is a concession to the employer, in excluding damages and attorney's fees from the computation of the appeal bond. Not even the filing of a motion to reduce bond is deemed to stay the period for requiring an appeal. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bond that is less than the monetary award in the judgment, or would deem such insufficient postage as sufficient to perfect the appeal. On the other hand, Article 223 indubitably requires that the appeal be perfected only upon the posting of the cash or surety bond which is equivalent to the monetary award in the judgment appealed from. The clear intent of both statutory and procedural law is to require the employer to post a cash or surety bond securing the full amount of the monetary award within the ten (10)- day reglementary period. While the bond may be reduced upon motion by the employer, there is that proviso in Rule VI, Section [6] that the filing of such motion does not stay the reglementary period. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the ten (10)-day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said ten (10)-day period. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the employer within the ten (10)-day period.26 (Emphases supplied.) While in certain instances, we allow a relaxation in the application of the rules to set right an arrant injustice, we never intend to forge a weapon for erring litigants to violate the rules with impunity. The liberal interpretation and application of rules apply only to proper cases of demonstrable merit and under justifiable causes and circumstances, but none obtains in this case. The NLRC had, therefore, the full discretion to grant or deny Ramirezs motion to reduce the amount of the appeal bond. The finding of the labor tribunal that Ramirez did not present sufficient justification for the reduction thereof cannot be said to have been done with grave abuse of discretion.27 While Section 6, Rule VI of the NLRCs New Rules of Procedure allows the Commission to reduce the amount of the bond, the exercise of the authority is not a matter of right on the part of the movant, but lies within the sound discretion of the NLRC upon a showing of meritorious grounds.28 It is daylight-clear from the foregoing that while the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant; otherwise, the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. We have always stressed that Article 223, which prescribes the appeal bond requirement, is a rule of jurisdiction and not of procedure. There is little leeway for condoning a liberal interpretation thereof, and certainly none premised on the ground that its requirements are mere technicalities. It must be emphasized that there is no inherent right to an appeal in a labor case, as it arises solely from grant of statute, namely, the Labor Code. For the same reason, we have repeatedly emphasized that the requirement for posting the surety bond is not merely procedural but jurisdictional and cannot be trifled with. Non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final and executory.29 That settled, we next resolve the issue of whether or not the Court of Appeals correctly dismissed the petition of Ramirez. The Court of Appeals found that he committed the following fatal defects in his petition: 1. Failure of petitioner to properly verify the petition in accordance with A.M. No. 00-2- 10-SC amending Section 4, Rule 7 in relation to Section 1, Rule 65 of the Rules of Court which now requires that a pleading must be verified by an affidavit that the affiant has read the pleading and the allegations therein are true and correct of his personal knowledge or based on authentic records, as a consequence of which the petition is treated as an unsigned pleading, which under Section 3, Rule 7 of the Rules of Court, produces no legal effect. 2. Petitioner failed to indicate in the petition the material dates showing when notice of the resolution subject hereof was received and when the motion for reconsideration was filed in violation of Section 3, Rule 46 of the Rules of Court.30 On Ramirezs failure to verify his petition, it is true that verification is merely a formal requirement intended to secure an assurance that matters that are alleged are true and correct. Thus, the court may simply order the correction of unverified pleadings or act on them and waive strict compliance with the rules.31 However, this Court invariably sustains the Court of Appeals dismissal of the petition on technical grounds under this provision, unless considerations of equity and substantial justice present cogent reasons to hold otherwise. In Moncielcoji Corporation v. National Labor Relations Commission,32 the Court states the rationale Rules of procedure are tools designed to promote efficiency and orderliness as well as to facilitate attainment of justice, such that strict adherence thereto is required. The application of the Rules may be relaxed only when rigidity would result in a defeat of equity and substantial justice. But, petitioner has not presented any persuasive reason for this Court to be liberal, even pro hac vice. Thus, we sustain the dismissal of its petition by the Court of Appeals on technical grounds. Again as in the NLRC, Ramirez has not shown any justifiable ground to set aside technical rules for his failure to comply with the requirement regarding the verification of his petition. For the same reasons above, we also find no reversible error in the assailed resolution of the Court of Appeals dismissing Ramirezs petition on the ground of failure to state material dates, because in filing a special civil action for certiorari without indicating the requisite material date therein, Ramirez violated basic tenets of remedial law, particularly Rule 65 of the Rules of Court, which states: SECTION 1. Petition for certiorari. x x x. x x x x The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of Section 3, Rule 46. On the other hand, the pertinent provision under Rule 46 is explicit: Sec. 3. Contents and filing of petition; effect of non-compliance with requirements. x x x . In actions filed under Rule 65, the petition shall further indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received. x x x x The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground for the dismissal of the petition. There are three material dates that must be stated in a petition for certiorari brought under Rule 65. First, the date when notice of the judgment or final order or resolution was received; second, the date when a motion for new trial or for reconsideration was filed; and third, the date when notice of the denial thereof was received. In the case before us, the petition filed with the Court of Appeals failed to indicate when the notice of the NLRC Resolution was received and when the Motion for Reconsideration was filed, in violation of Rule 65, Section 1 (2nd par.) and Rule 46, Section 3 (2nd par.). 1avvphi1 As explicitly stated in the aforementioned Rule, failure to comply with any of the requirements shall be sufficient ground for the dismissal of the petition. The rationale for this strict provision of the Rules of Court is not difficult to appreciate. In Santos v. Court of Appeals,33 the court explains that the requirement is for purpose of determining the timeliness of the petition, thus: The requirement of setting forth the three (3) dates in a petition for certiorari under Rule 65 is for the purpose of determining its timeliness. Such a petition is required to be filed not later than sixty (60) days from notice of the judgment, order or Resolution sought to be assailed. Therefore, that the petition for certiorari was filed forty-one (41) days from receipt of the denial of the motion for reconsideration is hardly relevant. The Court of Appeals was not in any position to determine when this period commenced to run and whether the motion for reconsideration itself was filed on time since the material dates were not stated. x x x. In the instant case, the petition was bereft of any persuasive explanation as to why Ramirez failed to observe procedural rules properly. 34 Quite apparent from the foregoing is that the Court of Appeals did not err, much less commit grave abuse of discretion, in denying due course to and dismissing the petition for certiorari for its procedural defects. Ramirezs failure to verify and state material dates as required under the rules warranted the outright dismissal of his petition. We are not unmindful of exceptional cases where this Court has set aside procedural defects to correct a patent injustice. However, concomitant to a liberal application of the rules of procedure should be an effort on the part of the party invoking liberality to at least explain its failure to comply with the rules. In sum, we find no sufficient justification to set aside the NLRC and Court of Appeals resolutions. Thus, the decision of the Labor Arbiter is already final and executory and binding upon this Court.35 The relaxation of procedural rules cannot be made without any valid reasons proffered for or underpinning it. To merit liberality, Ramirez must show reasonable cause justifying his noncompliance with the rules and must convince the court that the outright dismissal of the petition would defeat the administration of substantive justice. The desired leniency cannot be accorded, absent valid and compelling reasons for such procedural lapse. The appellate court saw no compelling need meriting the relaxation of the rules; neither do we see any.36 Wherefore, premises considered, the petition is Denied for lack of merit. The Resolutions of the Court of Appeals dated 13 July 2007 and 7 March 2008 and the Resolutions of the NLRC dated 29 September 2006 and 20 December 2006 are AFFIRMED. Costs against petitioner. SO ORDERED.
OLISA VS. ESCARIO Conformably with the long honored principle of a fair days wage for a fair days labor, employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike.
We apply this principle in resolving this appeal via a petition for review on certiorari of the decision dated August 18, 2003 of the Court of Appeals (CA), [1] affirming the decisiondated November 29, 2001 rendered by the National Labor Relations Commission (NLRC) directing their reinstatement of the petitioners to their former positions without backwages, or, in lieu of reinstatement, the payment of separation pay equivalent to one-half month per year of service. [2]
Antecedents
The petitioners were among the regular employees of respondent Pinakamasarap Corporation (PINA), a corporation engaged in manufacturing and selling food seasoning. They were members of petitioner Malayang Samahan ng mga Manggagawa sa Balanced Foods (Union).
At 8:30 in the morning of March 13, 1993, all the officers and some 200 members of the Union walked out of PINAs premises and proceeded to the barangay office to show support for Juanito Caete, an officer of the Union charged with oral defamation by Aurora Manor, PINAs personnel manager, and Yolanda Fabella, Manors secretary. [3] It appears that the proceedings in the barangay resulted in a settlement, and the officers and members of the Union all returned to work thereafter.
As a result of the walkout, PINA preventively suspended all officers of the Union because of the March 13, 1993 incident. PINA terminated the officers of the Union after a month.
On April 14, 1993, PINA filed a complaint for unfair labor practice (ULP) and damages. The complaint was assigned to then Labor Arbiter Raul Aquino, who ruled in his decision dated July 13, 1994 that the March 13, 1993 incident was an illegal walkout constituting ULP; and that all the Unions officers, except Caete, had thereby lost their employment. [4]
On April 28, 1993, the Union filed a notice of strike, claiming that PINA was guilty of union busting through the constructive dismissal of its officers. [5] On May 9, 1993, the Unionheld a strike vote, at which a majority of 190 members of the Union voted to strike. [6] The strike was held in the afternoon of June 15, 1993. [7]
PINA retaliated by charging the petitioners with ULP and abandonment of work, stating that they had violated provisions on strike of the collective bargaining agreement (CBA), such as: (a) sabotage by the insertion of foreign matter in the bottling of company products; (b) decreased production output by slowdown; (c) serious misconduct, and willful disobedience and insubordination to the orders of the Management and its representatives; (d) disruption of the work place by invading the premises and perpetrating commotion and disorder, and by causing fear and apprehension; (e) abandonment of work since June 28, 1993 despite notices to return to work individually sent to them; and (f) picketing within the company premises on June 15, 1993 that effectively barred with the use of threat and intimidation the ingress and egress of PINAs officials, employees, suppliers, and customers. [8]
On September 30, 1994, the Third Division of the National Labor Relations Commission (NLRC) issued a temporary restraining order (TRO), enjoining the Unions officers and members to cease and desist from barricading and obstructing the entrance to and exit from PINAs premises, to refrain from committing any and all forms of violence, and to remove all forms of obstructions such as streamers, placards, or human barricade. [9]
On November 29, 1994, the NLRC granted the writ of preliminary injunction. [10]
On August 18, 1998, Labor Arbiter Jose G. de Vera (LA) rendered a decision, to wit:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered declaring the subject strike to be illegal.
The complainants prayer for decertification of the respondent union being outside of the jurisdiction of this Arbitration Branch may not be given due course. And finally, the claims for moral and exemplary damages for want of factual basis are dismissed.
SO ORDERED. [11]
On appeal, the NLRC sustained the finding that the strike was illegal, but reversed the LAs ruling that there was abandonment, viz:
However, we disagree with the conclusion that respondents union members should be considered to have abandoned their employment.
Under Article 264 of the Labor Code, as amended, the union officers who knowingly participate in the illegal strike may be declared to have lost their employment status. However, mere participation of a union member in the illegal strike does not mean loss of employment status unless he participates in the commission of illegal acts during the strike. While it is true that complainant thru individual memorandum directed the respondents to return to work (pp. 1031-1112, Records) there is no showing that respondents deliberately refused to return to work. A worker who joins a strike does so precisely to assert or improve the terms and conditions of his work. If his purpose is to abandon his work, he would not go to the trouble of joining a strike (BLTB v. NLRC, 212 SCRA 794).
WHEREFORE, premises considered, the Decision appealed from is hereby MODIFIED in that complainant company is directed to reinstate respondents named in the complaint to their former positions but without backwages. In the event that reinstatement is not feasible complainant company is directed to pay respondents separation pay at one (1/2) half month per year of service.
SO ORDERED. [12]
Following the denial of their motion for reconsideration, the petitioners assailed the NLRCs decision through a petition for certiorari in the Court of Appeals (CA), claiming that the NLRC gravely abused its discretion in not awarding backwages pursuant to Article 279 of the Labor Code, and in not declaring their strike as a good faith strike.
On August 18, 2003, the CA affirmed the NLRC. [13] In denying the petitioners claim for full backwages, the CA applied the third paragraph of Article 264(a) instead of Article 279 of the Labor Code, explaining that the only instance under Article 264 when a dismissed employee would be reinstated with full backwages was when he was dismissed by reason of an illegal lockout; that Article 264 was silent on the award of backwages to employees participating in a lawful strike; and that a reinstatement with full backwages would be granted only when the dismissal of the petitioners was not done in accordance with Article 282 (dismissals with just causes) and Article 283 (dismissals with authorized causes) of the Labor Code.
The CA disposed thus: [14]
WHEREFORE, premises considered, the Petition is DISMISSED for lack of merit and the assailed 29 November 2001 Decision of respondent Commission in NLRC NRC CA No. 009701-95 is hereby AFFIRMED in toto. No costs.
SO ORDERED. [15]
On October 13, 2003, the CA denied the petitioners motion for reconsideration. [16]
Hence, this appeal via petition for review on certiorari.
Issue
The petitioners posit that they are entitled to full backwages from the date of dismissal until the date of actual reinstatement due to their not being found to have abandoned their jobs. They insist that the CA decided the question in a manner contrary to law and jurisprudence.
Ruling
We sustain the CA, but modify the decision on the amount of the backwages in order to accord with equity and jurisprudence.
I Third Paragraph of Article 264 (a), Labor Code, is Applicable
The petitioners contend that they are entitled to full backwages by virtue of their reinstatement, and submit that applicable to their situation is Article 279, not the third paragraph of Article 264(a), both of the Labor Code.
We do not agree with the petitioners.
Article 279 provides:
Article 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who isunjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
By its use of the phrase unjustly dismissed, Article 279 refers to a dismissal that is unjustly done, that is, the employer dismisses the employee without observing due process, either substantive or procedural. Substantive due process requires the attendance of any of the just or authorized causes for terminating an employee as provided under Article 278 (termination by employer), or Article 283 (closure of establishment and reduction of personnel), or Article 284 (disease as ground for termination), all of the Labor Code; while procedural due process demands compliance with the twin-notice requirement. [17]
In contrast, the third paragraph of Article 264(a) states:
Art. 264. Prohibited activities. (a) xxx
Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status; Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. xxx
Contemplating two causes for the dismissal of an employee, that is: (a) unlawful lockout; and (b) participation in an illegal strike, the third paragraph of Article 264(a) authorizes the award of full backwages only when the termination of employment is a consequence of an unlawful lockout. On the consequences of an illegal strike, the provision distinguishes between a union officer and a union member participating in an illegal strike. A union officer who knowingly participates in an illegal strike is deemed to have lost his employment status, but a union member who is merely instigated or induced to participate in the illegal strike is more benignly treated. Part of the explanation for the benign consideration for the union member is the policy of reinstating rank-and- file workers who are misled into supporting illegal strikes, absent any finding that such workers committed illegal acts during the period of the illegal strikes. [18]
The petitioners were terminated for joining a strike that was later declared to be illegal. The NLRC ordered their reinstatement or, in lieu of reinstatement, the payment of their separation pay, because they were mere rank-and-file workers whom the Unions officers had misled into joining the illegal strike. They were not unjustly dismissed from work. Based on the text and intent of the two aforequoted provisions of the Labor Code, therefore, it is plain that Article 264(a) is the applicable one.
II Petitioners not entitled to backwages despite their reinstatement: A fair days wage for a fair days labor
The petitioners argue that the finding of no abandonment equated to a finding of illegal dismissal in their favor. Hence, they were entitled to full backwages.
The petitioners argument cannot be sustained.
The petitioners participation in the illegal strike was precisely what prompted PINA to file a complaint to declare them, as striking employees, to have lost their employment status. However, the NLRC ultimately ordered their reinstatement after finding that they had not abandoned their work by joining the illegal strike. They were thus entitled only to reinstatement, regardless of whether or not the strike was the consequence of the employers ULP, [19] considering that a strike was not a renunciation of the employment relation. [20]
As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings during the whole period that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. [21] The grant of backwages to him is in furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a command to the employer to make a public reparation for his illegal dismissal of the employee in violation of the Labor Code. [22]
That backwages are not granted to employees participating in an illegal strike simply accords with the reality that they do not render work for the employer during the period of the illegal strike. [23] According to G&S Transport Corporation v. Infante: [24]
With respect to backwages, the principle of a fair days wage for a fair days labor remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working. xxx In Philippine Marine Officers Guild v. Compaia Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is required that the strike be legal, a situation that does not obtain in the case at bar. (emphasis supplied)
The petitioners herein do not deny their participation in the June 15, 1993 strike. As such, they did not suffer any loss of earnings during their absence from work. Their reinstatementsans backwages is in order, to conform to the policy of a fair days wage for a fair days labor.
Under the principle of a fair days wage for a fair days labor, the petitioners were not entitled to the wages during the period of the strike (even if the strike might be legal), because they performed no work during the strike. Verily, it was neither fair nor just that the dismissed employees should litigate against their employer on the latters time. [25] Thus, the Court deleted the award of backwages and held that the striking workers were entitled only to reinstatement in Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel) v. Manila Diamond Hotel Employees Union, [26] considering that the striking employees did not render work for the employer during the strike.
III Appropriate Amount for Separation Pay Is One Month per Year of Service
The petitioners were ordered reinstated because they were union members merely instigated or induced to participate in the illegal strike. By joining the strike, they did not renounce their employment relation with PINA but remained as its employees.
The absence from an order of reinstatement of an alternative relief should the employer or a supervening event not within the control of the employee prevent reinstatement negates the very purpose of the order. The judgment favorable to the employee is thereby reduced to a mere paper victory, for it is all too easy for the employer to simply refuse to have the employee back. To safeguard the spirit of social justice that the Court has advocated in favor of the working man, therefore, the right to reinstatement is to be considered renounced or waived only when the employee unjustifiably or unreasonably refuses to return to work upon being so ordered or after the employer has offered to reinstate him. [27]
However, separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers continued employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations between the employer and employee. [28]
Here, PINA manifested that the reinstatement of the petitioners would not be feasible because: (a) it would inflict disruption and oppression upon the employer; (b) petitioners [had] stayed away for more than 15 years; (c) its machines had depreciated and had been replaced with newer, better ones; and (d) it now sold goods through independent distributors, thereby abolishing the positions related to sales and distribution. [29]
Under the circumstances, the grant of separation pay in lieu of reinstatement of the petitioners was proper. It is not disputable that the grant of separation pay or some other financial assistance to an employee is based on equity, which has been defined as justice outside law, or as being ethical rather than jural and as belonging to the sphere of morals than of law. [30] This Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal has not been due to serious misconduct or reflective of personal integrity or morality. [31]
What is the appropriate amount for separation pay?
In G & S Transport, [32] the Court awarded separation pay equivalent to one month salary per year of service considering that 17 years had passed from the time when the striking employees were refused reinstatement. In Association of Independent Unions in the Philippines v. NLRC, [33] the Court allowed separation pay equivalent to one month salary per year of service considering that eight years had elapsed since the employees had staged their illegal strike.
Here, we note that this case has dragged for almost 17 years from the time of the illegal strike. Bearing in mind PINAs manifestation that the positions that the petitioners used to hold had ceased to exist for various reasons, we hold that separation pay equivalent to one month per year of service in lieu of reinstatement fully aligns with the aforecited rulings of the Court on the matter. WHEREFORE, we affirm the decision dated August 18, 2003 of the Court of Appeals, subject to the modification to the effect that in lieu of reinstatement the petitioners are granted backwages equivalent of one month for every year of service.