ANFLO MANAGEMENT & INVESTMENT CORP. and/or LINDA F.

LAGDAMEO, petitioners, vs. RODOLFO D. BOLANIO, respondent.

Assails CA Decision which annulled and set aside the decision rendered by NLRC and the
resolution of the appellate court dated Jan. 14, 2000 to deny petitioners MR.
1992 - Respondent Bolanio was employed as a company driver by the Petitioner Corporation
and was assigned to the residence of its senior VP Linda Lagdameo at Dasmarias Village,
Makati.
He was mainly tasked to transport Lindas daughter, Regina Lagdameo to and from her work at
Sky Cable in Quezon City.
Nov. 3, 1994 he was involved in a heated argument with Regina while they were going home
stemming from Respondents failure to follow instructions regarding road directions.
Upon arrival at the village, Regina ordered the respondent to go to the drugstore to buy an
ointment. When he returned, he was then confronted by Linda saying that he verbally abused
her daughter. This led her to outrightly terminate the respondent and thereafter requested the
latter to turnover his company and village IDs including his uniforms. He was not allowed to
report to work anymore. Subsequently, the respondent filed a complaint for illegal dismissal on
Nov. 4, 1994 with a prayer for reinstatement and collection of monetary claims.
PET = Denied dismissing respondent from employment. Accordingly, it was the respondent who
abandoned his work when he failed to report for work on Nov. 4, 1994, the day after the
altercation. On Nov. 5, the companys personnel manager made a visit to the respondent at his
residence and assured him that he had not been dismissed from work but was merely
reassigned to the companys pool of drivers. Despite this, however, respondent still refused to
report back for work.
On Nov. 10, 1994, prompted petitioners to send a notice of offense upon respondent but the
latter just ignored it.
Dec. 28, 1995 = Labor Arbiter dismissed the complaint for illegal dismissal on the ground that
herein respondent had abandoned his work.
Respondent appealed to NLRC
Feb. 25, 1997 = NLRC set aside the LA decision. It directed respondent Bolanio to report for
work and ordered petitioners to accept him back as company driver. NLRC said that neither did
the respondent abandon his work nor the petitioner illegally dismissed the former.
Respondent filed a petitioner for certiorari with CA which held that the respondent was illegally
dismissed. CA said that there could be no any clearer interpretation deduced from the
actuations of the Respondent and the fact that the company personnel manager came to visit
him guaranteeing the respondent that he was not dismissed but was merely reassigned is of no
moment, as it did not cure the earlier arbitrary dismissal of the respondent and as it was from
that stance where the wrong has been committed and that the damage has been done.
PET = moved for a reconsideration of the CA decision but was denied by CA in its Jan. 14, 2000
resolution.
ISSUES RAISED BY PET BEFORE SC:
1. Findings of NLRC, as supported by substantial evidence should have been given due weight
and respect, if not finality
2. Evidence shows that Respondent was not dismissed and it was in fact the respondent who
abandoned his employment
3. Because it was respondent who severed his employment with the company, no basis to rule
then that RES was denied of due process
4. Award for payment of back wages cannot be properly granted as the respondent willfully
refused to report back to work.
SC:
1. The presented issues are questions of fact. Thus, it is not the function of the SC to assess and
evaluate the facts and the evidence all over again. Jurisdiction of SC is generally limited to
reviewing errors of law that might have been committed by the lower court. But since in this
case, the factual findings of the CA are at variance with those of the NLRC, this compelled SC to
review the records presented in both the Court of Appeals and the said agency.
2. The thrust of the controversy may be narrowed down to two main issues: W/N respondent
was unlawfully dismissed by PET and (2) W/N respondent abandoned his work
While the findings of the NLRC are generally accorded not only respect, but also at times even
the stamp of finality, the rule is settled that the Court will not uphold erroneous conclusions of
the NLRC if the Court finds that it committed GAD or if the NLRCs findings of fact on which its
conclusions are based are NOT supported by substantial evidence.
Substantial evidence is that level of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion.
NLRC found that respondent was not dismissed from work. Court is of different opinion.
Nov. 3, 1994 = immediately after a verbal commotion with Regina, respondent was
reprimanded and castigated by Reginas mother, Linda. The words youre fired were clear,
unequivocal and categorical.
RES was ordered to surrender his company IDs and uniforms and these orders came from no
less than the SVP of the Company. Thus, these circumstances were sufficient to create
impression in the mind of respondent that his services were being terminated. Acts of Linda
Lagdameo were indicative of her intention to dismiss respondent from employment.
PET effort to visit respondent in his residence and to assure him that he was not dismissed from
work was futile and did little to rectify the situation. Twin requirements of notice and hearing
must be complied with before a valid dismissal can take place. Any procedural shortcut that
allows an employer, in effect, to assume the roles of an accuser and a judge treads on
dangerous ground. Needless to state, failure to comply with the requirements taints the
dismissal with illegality.
COMPLIANCE WITH MANDATORY REQUIREMENTS WAS UNDENIABLY ABSENT
1. Petitioners dismissed respondent on Nov. 3, 1994 w/o giving him any written notice
informing him of the cause of his termination. No hearing was conducted in order to give the
respondent the opportunity to be heard and defend himself. Clearly, respondents services
were terminated without regard for an employees right to procedural and substantive due
process.
Other findings:
- No showing of clear, valid, and legal cause for the termination of employment.
SC did not accept the contention that it was the respondent who abandoned his employment.
Elements of abandonment:
1. Failure to report for work or absence without valid or justifiable reason.
2. A clear intention to sever the employer-employee relationship. This one is the more
determinative factor.
Mere absence is not sufficient and it is the employer who has the burden of proof to show a
deliberate and unjustified refusal on the part of the employee to resume his employment
without any intention of returning.
Alleged intent of respondent to discontinue his employment was belied by his filing of
complaint for illegal dismissal the very next day after he was removed from service by
Lagdameo. The filing of said complaint was proof enough of his desire to return to work thus
negating any suggestion of abandonment. Settled is the rule that the filing of a complaint for
Illegal dismissal is inconsistent with a charge of abandonment, for an employee who takes steps
to protest his layoff cannot by any logic be said to have abandoned his work.
THUS RESOLVED TTHAT RESPONDENT DID NOT ABANDON HIS JOB BUT WAS ILLEGALLY
DISMISSED.
W/N the respondent is entitled to reinstatement and back wages.
Art. 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges and to his full
back wages, inclusive of allowances and to other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his actual
reinstatement. It being clearly established that RES was illegally dismissed, the decision of CA
ordering his reinstatement and awarding him back wages is definitely in order. Thus, the
petition is denied and the assailed decision of CA is affirmed.
Main issue: Exclusion of sales personnel from the holiday pay award and the change of the divisor in
the computation of benefits from 251 to 261 days.

Nov. 8, 1995 = RES Filipro, Inc., now Nestle Philippines, Inc., filed with NLRC a petition for declaratory
relief seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for
holiday pay (Chartered Bank Employees Assoc. v. Ople)

Both Filipro and the Union of Filipino Employees agreed to submit the case for voluntary arbitration and
appointed respondent Vivar as the voluntary arbitrator.

Jan. 2, 1980, Vivar rendered a decision directing Filipro to:

Pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only to
the exclusions and limitations specified in Article 82 and such other legal restrictions as are
provided for in the Code. (Rollo, p. 31)

Filipro filed a motion for clarification seeking the:

a. Limitation of the award to three years

b. Exclusion of salesman, sales representative, truck drivers, merchandisers and medical representatives
(sales personnel) from the award of the holiday pay, and

c. Deduction from the holiday pay award of overpayment for overtime, night differential, vacation and
sick leave benefits due to the use of 251 divisor.

PET = answered that the award should be made effective from the date of effectivity of the LC. That
their sales personnel are not field personnel and are therefore entitled to holiday pay, and that the
use of 251 as divisor is an established employee benefits which cannot be diminished.

Jan. 14, 1986 = Vivar issued order declaring the effectivity of the holiday pay award shall retroact to Nov.
1, 1974, the date of effectivity of LC. He however adjudged that the companys sales personnel are field
personnel and, as such, are not entitled to holiday pay. He likewise ruled that with the grant of 10 days'
holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick leave pay due to the use of 251 days as
divisor.

Both Nestle and UFE filed their respective motions for partial reconsideration. Arbitrator treated it as
appeal thus forwarded the case to NLRC which issued a resolution remanding the case to Vivar on the
ground that it has no jurisdiction to review decisions in voluntary arbitration cases pursuant to Art. 263
of the Labor Code.

July 6, 1987 respondent ARB refused to take cognizance of the case reasoning that he had no more
jurisdiction to continue as arbitrator because he had resigned from service effective May 1, 1986.

PET raises the following issues:

1. W/N Nestles sales personnel are entitled to holiday pay.

2. W/N the divisor should be changed from 251 to 261 days and W/N the previous use of 251 as divisor
resulted in overpayment for overtime, night differential, vacation and sick leave pay.

PET (UFE) insists that respondents sales personnel are not field personnel under Art. 82 of the Labor
Code. The respondent company controverts this assertion.

ARTICLE 82. Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as "non-agricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of work in the field cannot
be determined with reasonable certainty."

The controversy centers on the interpretation of the clause "whose actual hours of work in the
field cannot be determined with reasonable certainty."

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

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

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

We concur with the following disquisition by the respondent arbitrator:

The requirement for the salesmen and other similarly situated employees to report
for work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not within the
realm of work in the field as defined in the Code but an exercise of purely
management prerogative of providing administrative control over such personnel.
This does not in any manner provide a reasonable level of determination on
the actual field work of the employees which can be reasonably ascertained.
The theoretical analysis that salesmen and other similarly-situated workers regularly
report for work at 8:00 a.m. and return to their home station at 4:00 or 4:30 p.m.,
creating the assumption that their field work is supervised, is surface projection.
Actual field work begins after 8:00 a.m., when the sales personnel follow their field
itinerary, and ends immediately before 4:00 or 4:30 p.m. when they report back to
their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their
hours of work in the field, the extent or scope and result of which are subject
to their individual capacity and industry and which "cannot be determined with
reasonable certainty." This is the reason why effective supervision over field work
of salesmen and medical representatives, truck drivers and merchandisers is
practically a physical impossibility. Consequently, they are excluded from the ten
holidays with pay award. (Rollo, pp. 36-37)

Moreover, the requirement that "actual hours of work in the field cannot be determined with
reasonable certainty" must be read in conjunction with Rule IV, Book III of the Implementing Rules
which provides:
 Rule IV Holidays with Pay

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

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is
unsupervised by the employer . . . (Emphasis supplied)

While contending that such rule added another element not found in the law (Rollo, p. 13), the
petitioner nevertheless attempted to show that its affected members are not covered by the
abovementioned rule. The petitioner asserts that the company's sales personnel are strictly
supervised as shown by the SOD (Supervisor of the Day) schedule and the company circular dated
March 15, 1984 (Annexes 2 and 3, Rollo, pp. 53-55).

Contrary to the contention of the petitioner, the Court finds that the aforementioned rule did not add
another element to the Labor Code definition of field personnel. The clause "whose time and
performance is unsupervised by the employer" did not amplify but merely interpreted and expounded
the clause "whose actual hours of work in the field cannot be determined with reasonable certainty."
The former clause is still within the scope and purview of Article 82 which defines field personnel.
Hence, in deciding whether or not an employee's actual working hours in the field can be determined
with reasonable certainty, query must be made as to whether or not such employee's time and
performance is constantly supervised by the employer.

The SOD schedule adverted to by the petitioner does not in the least signify that these sales
personnel's time and performance are supervised. The purpose of this schedule is merely to
ensure that the sales personnel are out of the office not later than 8:00 a.m. and are back in
the office not earlier than 4:00 p.m.

Likewise, the Court fails to see how the company can monitor the number of actual hours spent in
field work by an employee through the imposition of sanctions on absenteeism contained in the
company circular of March 15, 1984.

The petitioner claims that the fact that these sales personnel are given incentive bonus every quarter
based on their performance is proof that their actual hours of work in the field can be determined
with reasonable certainty.

The Court thinks otherwise.

The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based
on sales target; (2) good collection performance; (3) proper compliance with good market
hygiene; (4) good merchandising work; (5) minimal market returns; and (6) proper truck
maintenance. (Rollo, p. 190).

The above criteria indicate that these sales personnel are given incentive bonuses precisely
because of the difficulty in measuring their actual hours of field work. These employees are
evaluated by the result of their work and not by the actual hours of field work which are
hardly susceptible to determination.
In San Miguel Brewery, Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had
occasion to discuss the nature of the job of a salesman. Citing the case of Jewel Tea
Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:

The reasons for excluding an outside salesman are fairly apparent. Such a
salesman, to a greater extent, works individually. There are no restrictions respecting
the time he shall work and he can earn as much or as little, within the range of his
ability, as his ambition dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away from his employer's place of
business, is not subject to the personal supervision of his employer, and his
employer has no way of knowing the number of hours he works per day.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same
rationale for their exclusion as field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrator's ruling that, concomitant with the award
of holiday pay, the divisor should be changed from 251 to 261 days to include the additional 10
holidays and the employees should reimburse the amounts overpaid by Filipro due to the use of 251
days' divisor.

Arbitrator Vivar's rationale for his decision is as follows:

. . . The new doctrinal policy established which ordered payment of ten holidays
certainly adds to or accelerates the basis of conversion and computation by ten days.
With the inclusion of ten holidays as paid days, the divisor is no longer 251 but 261
or 262 if election day is counted. This is indeed an extremely difficult legal question
of interpretation which accounts for what is claimed as falling within the concept of
"solutio indebti."

When the claim of the Union for payment of ten holidays was granted, there was a
consequent need to abandon that 251 divisor. To maintain it would create an
impossible situation where the employees would benefit with additional ten days with
pay but would simultaneously enjoy higher benefits by discarding the same ten days
for purposes of computing overtime and night time services and considering sick and
vacation leave credits. Therefore, reimbursement of such overpayment with the use
of 251 as divisor arises concomitant with the award of ten holidays with pay. (Rollo,
p. 34)

The divisor assumes an important role in determining whether or not holiday pay is already included
in the monthly paid employee's salary and in the computation of his daily rate. This is the thrust of
our pronouncement in Chartered Bank Employees Association v. Ople (supra). In that case, We
held:

It is argued that even without the presumption found in the rules and in the policy
instruction, the company practice indicates that the monthly salaries of the
employees are so computed as to include the holiday pay provided by law. The
petitioner contends otherwise.

One strong argument in favor of the petitioner's stand is the fact that the Chartered
Bank, in computing overtime compensation for its employees, employs a "divisor" of
251 days. The 251 working days divisor is the result of subtracting all
Saturdays, Sundays and the ten (10) legal holidays from the total number of
 calendar days in a year. If the employees are already paid for all non-working
days, the divisor should be 365 and not 251.

In the petitioner's case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months

251 days

Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by
respondent Filipro indicates that holiday pay is not yet included in the employee's salary,
otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
constant figure for the purpose of computing overtime and night differential pay and commutation of
sick and vacation leave credits. Necessarily, the daily rate should also be the same basis for
computing the 10 unpaid holidays.

The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a
lower daily rate which is violative of the prohibition on non-diminution of benefits found in
Article 100 of the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261
days, then the dividend, which represents the employee's annual salary, should correspondingly be
increased to incorporate the holiday pay. To illustrate, if prior to the grant of holiday pay, the
employee's annual salary is P25,100, then dividing such figure by 251 days, his daily rate is P100.00
After the payment of 10 days' holiday pay, his annual salary already includes holiday pay and totals
P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still P100.00. There is thus no
merit in respondent Nestle's claim of overpayment of overtime and night differential pay and sick and
vacation leave benefits, the computation of which are all based on the daily rate, since the daily
rate is still the same before and after the grant of holiday pay.

Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251 days
as divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor." (Article 4). Moreover, prior to September 1, 1980, when the company was on a 6-day
working schedule, the divisor used by the company was 303, indicating that the 10 holidays were
likewise not paid. When Filipro shifted to a 5-day working schedule on September 1, 1980, it
had the chance to rectify its error, if ever there was one but did not do so. It is now too late to
allege payment by mistake.

Nestle also questions the voluntary arbitrator's ruling that holiday pay should be computed from
November 1, 1974. This ruling was not questioned by the petitioner union as obviously said decision
was favorable to it. Technically, therefore, respondent Nestle should have filed a separate petition
raising the issue of effectivity of the holiday pay award. This Court has ruled that an appellee who
is not an appellant may assign errors in his brief where his purpose is to maintain the
judgment on other grounds, but he cannot seek modification or reversal of the judgment or
affirmative relief unless he has also appealed. (Franco v. Intermediate Appellate Court, 178
SCRA 331 [1989], citing La Campana Food Products, Inc. v. Philippine Commercial and Industrial
Bank, 142 SCRA 394 [1986]). Nevertheless, in order to fully settle the issues so that the execution of
the Court's decision in this case may not be needlessly delayed by another petition, the Court
resolved to take up the matter of effectivity of the holiday pay award raised by Nestle.
Nestle insists that the reckoning period for the application of the holiday pay award is 1985 when
the Chartered Bank decision, promulgated on August 28, 1985, became final and executory, and not
from the date of effectivity of the Labor Code. Although the Court does not entirely agree with Nestle,
we find its claim meritorious.

In Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong, 132 SCRA 663 [1984],
hereinafter referred to as the IBAA case, the Court declared that Section 2, Rule IV, Book III of the
implementing rules and Policy Instruction No. 9, issued by the then Secretary of Labor on February
16, 1976 and April 23, 1976, respectively, and which excluded monthly paid employees from holiday
pay benefits, are null and void. The Court therein reasoned that, in the guise of clarifying the Labor
Code's provisions on holiday pay, the aforementioned implementing rule and policy instruction
amended them by enlarging the scope of their exclusion. The Chartered Bank case reiterated the
above ruling and added the "divisor" test.

However, prior to their being declared null and void, the implementing rule and policy instruction
enjoyed the presumption of validity and hence, Nestle's non-payment of the holiday benefit up to
the promulgation of the IBAA case on October 23, 1984 was in compliance with these
presumably valid rule and policy instruction.

In the case of De Agbayani v. Philippine National Bank, 38 SCRA 429 [1971], the Court discussed
the effect to be given to a legislative or executive act subsequently declared invalid:

xxx xxx xxx

. . . It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be
complied with. This is so as until after the judiciary, in an appropriate case, declares
its invalidity, it is entitled to obedience and respect. Parties may have acted under it
and may have changed their positions. What could be more fitting than that in a
subsequent litigation regard be had to what has been done while such legislative or
executive act was in operation and presumed to be valid in all respects. It is now
accepted as a doctrine that prior to its being nullified, its existence as a fact must be
reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the government organ which has the final say on whether or not a
legislative or executive measure is valid, a period of time may have elapsed before it
can exercise the power of judicial review that may lead to a declaration of nullity. It
would be to deprive the law of its quality of fairness and justice then, if there
be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of

a statute, prior to such a determination of [unconstitutionality], is an operative
fact and may have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in various aspects, with respect
to particular relations, individual and corporate, and particular conduct, private and
official." (Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]). This language has been quoted with approval in a resolution in Araneta
v. Hill (93 Phil. 1002 [1952]) and the decision in Manila Motor Co., Inc. v. Flores (99
Phil. 738 [1956]). An even more recent instance is the opinion of Justice Zaldivar
speaking for the Court in Fernandez v. Cuerva and Co. (21 SCRA 1095 [1967]. (At
pp. 434-435)
The "operative fact" doctrine realizes that in declaring a law or rule null and void, undue harshness
and resulting unfairness must be avoided. It is now almost the end of 1991. To require various
companies to reach back to 1975 now and nullify acts done in good faith is unduly harsh.
1984 is a fairer reckoning period under the facts of this case.

Applying the aforementioned doctrine to the case at bar, it is not far-fetched that Nestle, relying on
the implicit validity of the implementing rule and policy instruction before this Court nullified them,
and thinking that it was not obliged to give holiday pay benefits to its monthly paid employees, may
have been moved to grant other concessions to its employees, especially in the collective bargaining
agreement. This possibility is bolstered by the fact that respondent Nestle's employees are among
the highest paid in the industry. With this consideration, it would be unfair to impose additional
burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in any
way attributed to Nestle's fault.

The Court thereby resolves that the grant of holiday pay be effective, not from the date of
promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code,
but from October 23, 1984, the date of promulgation of the IBAA case.

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in
computing holiday pay shall be 251 days. The holiday pay as above directed shall be computed
from October 23, 1984. In all other respects, the order of the respondent arbitrator is hereby
AFFIRMED.

MAKASIAR, J.: +.wp h!1

This is a petition for certiorari to set aside the order dated November 10, 1979, of respondent Deputy
Minister of Labor, Amado G. Inciong, in NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia
and America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America"
(respondent-appellant), the dispositive portion of which reads as follows: t.hqw

xxx xxx xxx

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the
National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set
aside and a new judgment. promulgated dismissing the instant case for lack of merit
(p. 109 rec.).

The antecedent facts culled from the records are as follows:

On June 20, 1975, petitioner filed a complaint against the respondent bank for the payment of
holiday pay before the then Department of Labor, National Labor Relations Commission, Regional
Office No. IV in Manila. Conciliation having failed, and upon the request of both parties, the case
was certified for arbitration on July 7, 1975 (p. 18, NLRC rec.

On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the above-entitled
case, granting petitioner's complaint for payment of holiday pay. Pertinent portions of the
decision read: t.hqw
 xxx xxx xxx

The records disclosed that employees of respondent bank were not paid their wages
on unworked regular holidays as mandated by the Code, particularly Article 208, to
wit:t.hqw

Art. 208. Right to holiday pay.

(a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly
employing less than 10 workers.

(b) The term "holiday" as used in this chapter, shall include: New
Year's Day, Maundy Thursday, Good Friday, the ninth of April the first
of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and the thirtieth of December and the day
designated by law for holding a general election.

xxx xxx xxx

This conclusion is deduced from the fact that the daily rate of pay of the bank
employees was computed in the past with the unworked regular holidays as
excluded for purposes of determining the deductible amount for absences
incurred Thus, if the employer uses the factor 303 days as a divisor in
determining the daily rate of monthly paid employee, this gives rise to a
presumption that the monthly rate does not include payments for unworked
regular holidays. The use of the factor 303 indicates the number of ordinary working
days in a year (which normally has 365 calendar days), excluding the 52 Sundays
and the 10 regular holidays. The use of 251 as a factor (365 calendar days less 52
Saturdays, 52 Sundays, and 10 regular holidays) gives rise likewise to the same
presumption that the unworked Saturdays, Sundays and regular holidays are unpaid.
This being the case, it is not amiss to state with certainty that the instant claim for
wages on regular unworked holidays is found to be tenable and meritorious.

WHEREFORE, judgment is hereby rendered:

(a) xxx xxxx xxx

(b) Ordering respondent to pay wages to all its employees for all regular
h(olidays since November 1, 1974 (pp. 97-99, rec., underscoring supplied).

Respondent bank did not appeal from the said decision. Instead, it complied with the order of Arbiter
Ricarte T. Soriano by paying their holiday pay up to and including January, 1976.

On December 16, 1975, Presidential Decree No. 850 was promulgated amending, among others,
the provisions of the Labor Code on the right to holiday pay to read as follows: t.hqw

Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily
wages during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
 (b) The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate and

(c) As used in this Article, "holiday" includes New Year's Day, Maundy Thursday,
Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July,
the thirtieth of November, the twenty-fifth and the thirtieth of December, and the day
designated by law for holding a general election.

Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the Department of
Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of
holidays with pay. The controversial section thereof reads: t.hqw

Sec. 2. Status of employees paid by the month. Employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary
of not less than the statutory or established minimum wage shall be presumed to be
paid for all days in the month whether worked or not.

For this purpose, the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve" (italics supplied).

On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister)
interpreting the above-quoted rule, pertinent portions of which read: t.hqw

xxx xxx xxx

The ten (10) paid legal holidays law, to start with, is intended to benefit principally
daily employees. In the case of monthly, only those whose monthly salary did not yet
include payment for the ten (10) paid legal holidays are entitled to the benefit.

Under the rules implementing P.D. 850, this policy has been fully clarified to
eliminate controversies on the entitlement of monthly paid employees, The new
determining rule is this: If the monthly paid employee is receiving not less than P240,
the maximum monthly minimum wage, and his monthly pay is uniform from January
to December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays in
months where they occur, then he is still entitled to the ten (10) paid legal holidays.
..." (emphasis supplied).

Respondent bank, by reason of the ruling laid down by the aforecited rule implementing Article 94 of
the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to an its
employees.

On August 30, 1976, petitioner filed a motion for a writ of execution to enforce the arbiter's decision
of August 25, 1975, whereby the respondent bank was ordered to pay its employees their daily wage
for the unworked regular holidays.

On September 10, 1975, respondent bank filed an opposition to the motion for a writ of execution
alleging, among others, that: (a) its refusal to pay the corresponding unworked holiday pay in
accordance with the award of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, is based on
and justified by Policy Instruction No. 9 which interpreted the rules implementing P. D. 850; and (b)
that the said award is already repealed by P.D. 850 which took effect on December 16, 1975, and by
said Policy Instruction No. 9 of the Department of Labor, considering that its monthly paid employees
are not receiving less than P240.00 and their monthly pay is uniform from January to December, and
that no deductions are made from the monthly salaries of its employees on account of holidays in
months where they occur (pp. 64-65, NLRC rec.).

On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ of execution, issued
an order enjoining the respondent bank to continue paying its employees their regular holiday pay on
the following grounds: (a) that the judgment is already final and the findings which is found in the
body of the decision as well as the dispositive portion thereof is res judicata or is the law of the case
between the parties; and (b) that since the decision had been partially implemented by the
respondent bank, appeal from the said decision is no longer available (pp. 100-103, rec.).

On November 17, 1976, respondent bank appealed from the above-cited order of Labor Arbiter
Soriano to the National Labor Relations Commission, reiterating therein its contentions averred in its
opposition to the motion for writ of execution. Respondent bank further alleged for the first time that
the questioned order is not supported by evidence insofar as it finds that respondent bank
discontinued payment of holiday pay beginning January, 1976 (p. 84, NLRC rec.).

On June 20, 1978, the National Labor Relations Commission promulgated its resolution en
banc dismissing respondent bank's appeal, the dispositive portion of which reads as follows: t.hqw

In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss,

respondent's appeal; to set aside Labor Arbiter Ricarte T. Soriano's order of 18
October 1976 and, as prayed for by complainant, to order the issuance of the proper
writ of execution (p. 244, NLRC rec.).

Copies of the above resolution were served on the petitioner only on February 9, 1979 or almost
eight. (8) months after it was promulgated, while copies were served on the respondent bank on
February 13, 1979.

On February 21, 1979, respondent bank filed with the Office of the Minister of Labor a motion for
reconsideration/appeal with urgent prayer to stay execution, alleging therein the following: (a) that
there is prima facie evidence of grave abuse of discretion, amounting to lack of jurisdiction on the
part of the National Labor Relations Commission, in dismissing the respondent's appeal on pure
technicalities without passing upon the merits of the appeal and (b) that the resolution appealed from
is contrary to the law and jurisprudence (pp. 260-274, NLRC rec.).

On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal and alleged the
following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the
instant appeal pursuant to the provisions of P. D. 1391; (b) that the labor arbiter's decision being
final, executory and unappealable, execution is a matter of right for the petitioner; and (c) that the
decision of the labor arbiter dated August 25, 1975 is supported by the law and the evidence in the
case (p. 364, NLRC rec.).

On July 30, 1979, petitioner filed a second motion for execution pending appeal, praying that a writ
of execution be issued by the National Labor Relations Commission pending appeal of the case with
the Office of the Minister of Labor. Respondent bank filed its opposition thereto on August 8, 1979.

On August 13, 1979, the National Labor Relations Commission issued an order which states: t.hqw

The Chief, Research and Information Division of this Commission is hereby directed
to designate a Socio-Economic Analyst to compute the holiday pay of the employees
 of the Insular Bank of Asia and America from April 1976 to the present, in
accordance with the Decision of the Labor Arbiter dated August 25, 1975" (p. 80,
rec.).

On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G.
Inciong, issued an order, the dispositive portion of which states:
t.hqw

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the
National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set
aside and a new judgment promulgated dismissing the instant case for lack of merit
(p. 436, NLRC rec.).

Hence, this petition for certiorari charging public respondent Amado G. Inciong with abuse of
discretion amounting to lack or excess of jurisdiction.

The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular
holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has
already become final and had been partially executed, the finality of which was affirmed by the
National Labor Relations Commission sitting en banc, on the basis of an Implementing Rule and
Policy Instruction promulgated by the Ministry of Labor long after the said decision had become final
and executory.

WE find for the petitioner.

WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules
and Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in the
guise of clarifying the Labor Code's provisions on holiday pay, they in effect amended them by
enlarging the scope of their exclusion (p. 1 1, rec.).

Article 94 of the Labor Code, as amended by P.D. 850, provides: t.hqw

Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers. ...

The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out
under Article 82 thereof which reads: t.hqw

Art. 82. Coverage. The provision of this Title shall apply to employees in all
establishments and undertakings, whether for profit or not, but not to government
employees, managerial employees, field personnel members of the family of the
employer who are dependent on him for support domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations.

... (emphasis supplied).

From the above-cited provisions, it is clear that monthly paid employees are not excluded from the
benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then
Secretary of Labor excludes monthly paid employees from the said benefits by inserting, under Rule
IV, Book Ill of the implementing rules, Section 2, which provides that: "employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary of not less than
the statutory or established minimum wage shall be presumed to be paid for all days in the month
whether worked or not. "

Public respondent maintains that "(T)he rules implementing P. D. 850 and Policy Instruction No. 9
were issued to clarify the policy in the implementation of the ten (10) paid legal holidays. As
interpreted, 'unworked' legal holidays are deemed paid insofar as monthly paid employees are
concerned if (a) they are receiving not less than the statutory minimum wage, (b) their monthly pay is
uniform from January to December, and (c) no deduction is made from their monthly salary on
account of holidays in months where they occur. As explained in Policy Instruction No, 9, 'The ten
(10) paid legal holidays law, to start with, is intended to benefit principally daily paid employees. In
case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid
legal holidays are entitled to the benefit' " (pp. 340-341, rec.). This contention is untenable.

It is elementary in the rules of statutory construction that when the language of the law is clear and
unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of
the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit - it provides for
both the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary
of Labor went as far as to categorically state that the benefit is principally intended for daily paid
employees, when the law clearly states that every worker shall be paid their regular holiday pay.
This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that
"All doubts in the implementation and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor." Moreover, it shall always be
presumed that the legislature intended to enact a valid and permanent statute which would have the
most beneficial effect that its language permits (Orlosky vs. Haskell, 155 A. 112.)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5
of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations.

Public respondent vehemently argues that the intent and spirit of the holiday pay law, as expressed
by the Secretary of Labor in the case of Chartered Bank Employees Association v. The Chartered
Bank (NLRC Case No. RB-1789-75, March 24, 1976), is to correct the disadvantages inherent in the
daily compensation system of employment holiday pay is primarily intended to benefit the daily
paid workers whose employment and income are circumscribed by the principle of "no work, no
pay." This argument may sound meritorious; but, until the provisions of the Labor Code on holiday
pay is amended by another law, monthly paid employees are definitely included in the benefits of
regular holiday pay. As earlier stated, the presumption is always in favor of law, negatively put, the
Labor Code is always strictly construed against management.

While it is true that the contemporaneous construction placed upon a statute by executive officers
whose duty is to enforce it should be given great weight by the courts, still if such construction is so
erroneous, as in the instant case, the same must be declared as null and void. It is the role of the
Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the
context of the interactions of the three branches of the government, almost always in situations
where some agency of the State has engaged in action that stems ultimately from some legitimate
area of governmental power (The Supreme Court in Modern Role, C. B. Swisher 1958, p. 36).

Thus. in the case of Philippine Apparel Workers Union vs. National Labor Relations
Commission (106 SCRA 444, July 31, 1981) where the Secretary of Labor enlarged the scope of
exemption from the coverage of a Presidential Decree granting increase in emergency allowance,
this Court ruled that:
t.hqw

... the Secretary of Labor has exceeded his authority when he included paragraph (k)
in Section 1 of the Rules implementing P. D. 1 1 23.

xxx xxx xxx

Clearly, the inclusion of paragraph k contravenes the statutory authority granted to

the Secretary of Labor, and the same is therefore void, as ruled by this Court in a
long line of cases . . . .. t.hqw

The recognition of the power of administrative officials to promulgate

rules in the administration of the statute, necessarily limited to what is
provided for in the legislative enactment, may be found in the early
case of United States vs. Barrios decided in 1908. Then came in a
1914 decision, United States vs. Tupasi Molina (29 Phil. 119)
delineation of the scope of such competence. Thus: "Of course the
regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and for
the sole purpose of carrying into effect its general provisions. By such
regulations, of course, the law itself cannot be extended. So long,
however, as the regulations relate solely to carrying into effect the
provisions of the law, they are valid." In 1936, in People vs.
Santos, this Court expressed its disapproval of an administrative
order that would amount to an excess of the regulatory power vested
in an administrative official We reaffirmed such a doctrine in a 1951
decision, where we again made clear that where an administrative
order betrays inconsistency or repugnancy to the provisions of the
Act, 'the mandate of the Act must prevail and must be followed.
Justice Barrera, speaking for the Court in Victorias Milling inc. vs.
Social Security Commission, citing Parker as well as Davis did tersely
sum up the matter thus: "A rule is binding on the Courts so long as
the procedure fixed for its promulgation is followed and its scope is
within the statutory authority granted by the legislature, even if the
courts are not in agreement with the policy stated therein or its innate
wisdom. ... On the other hand, administrative interpretation of the law
is at best merely advisory, for it is the courts that finally determine
chat the law means."

"It cannot be otherwise as the Constitution limits the authority of the

President, in whom all executive power resides, to take care that the
laws be faithfully executed. No lesser administrative executive office
or agency then can, contrary to the express language of the
Constitution assert for itself a more extensive prerogative.
Necessarily, it is bound to observe the constitutional mandate. There
must be strict compliance with the legislative enactment. Its terms
must be followed the statute requires adherence to, not departure
from its provisions. No deviation is allowable. In the terse language of
the present Chief Justice, an administrative agency "cannot amend
an act of Congress." Respondents can be sustained, therefore, only if
it could be shown that the rules and regulations promulgated by them
 were in accordance with what the Veterans Bill of Rights provides"
(Phil. Apparel Workers Union vs. National Labor Relations
Commission, supra, 463, 464, citing Teozon vs. Members of the
Board of Administrators, PVA 33 SCRA 585; see also Santos vs.
Hon. Estenzo, et al, 109 Phil. 419; Hilado vs. Collector of Internal
Revenue, 100 Phil. 295; Sy Man vs. Jacinto & Fabros, 93 Phil. 1093;
Olsen & Co., Inc. vs. Aldanese and Trinidad, 43 Phil. 259).

This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union
(TUPAS) vs. The National Labor Relations Commission and American Wire & Cable Co., Inc., G.R.
No. 53337, promulgated on June 29, 1984.

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and
Policy instruction No. 9 issued by the then Secretary of Labor must be declared null and void.
Accordingly, public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to
deny the members of petitioner union their regular holiday pay as directed by the Labor Code.

II

It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, had
already become final, and was, in fact, partially executed by the respondent bank.

However, public respondent maintains that on the authority of De Luna vs. Kayanan, 61 SCRA 49,
November 13, 1974, he can annul the final decision of Labor Arbiter Soriano since the ensuing
promulgation of the integrated implementing rules of the Labor Code pursuant to P.D. 850 on
February 16, 1976, and the issuance of Policy Instruction No. 9 on April 23, 1976 by the then
Secretary of Labor are facts and circumstances that transpired subsequent to the promulgation of
the decision of the labor arbiter, which renders the execution of the said decision impossible and
unjust on the part of herein respondent bank (pp. 342-343, rec.).

This contention is untenable.

To start with, unlike the instant case, the case of De Luna relied upon by the public respondent is not
a labor case wherein the express mandate of the Constitution on the protection to labor is applied.
Thus Article 4 of the Labor Code provides that, "All doubts in the implementation and interpretation
of the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor and Article 1702 of the Civil Code provides that, " In case of doubt, all labor legislation
and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Consequently, contrary to public respondent's allegations, it is patently unjust to deprive the

members of petitioner union of their vested right acquired by virtue of a final judgment on the basis
of a labor statute promulgated following the acquisition of the "right".

On the question of whether or not a law or statute can annul or modify a judicial order issued prior to
its promulgation, this Court, through Associate Justice Claro M. Recto, said: t.hqw

xxx xxx xxx

We are decidedly of the opinion that they did not. Said order, being unappealable,
became final on the date of its issuance and the parties who acquired rights
thereunder cannot be deprived thereof by a constitutional provision enacted or
 promulgated subsequent thereto. Neither the Constitution nor the statutes, except
penal laws favorable to the accused, have retroactive effect in the sense of annulling
or modifying vested rights, or altering contractual obligations" (China Ins. & Surety
Co. vs. Judge of First Instance of Manila, 63 Phil. 324, emphasis supplied).

In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "... when a court
renders a decision or promulgates a resolution or order on the basis of and in accordance with a
certain law or rule then in force, the subsequent amendment or even repeal of said law or rule may
not affect the final decision, order, or resolution already promulgated, in the sense of revoking or
rendering it void and of no effect." Thus, the amendatory rule (Rule IV, Book III of the Rules to
Implement the Labor Code) cannot be given retroactive effect as to modify final judgments. Not even
a law can validly annul final decisions (In re: Cunanan, et al., Ibid).

Furthermore, the facts of the case relied upon by the public respondent are not analogous to that of
the case at bar. The case of De Luna speaks of final and executory judgment, while iii the instant
case, the final judgment is partially executed. just as the court is ousted of its jurisdiction to annul or
modify a judgment the moment it becomes final, the court also loses its jurisdiction to annul or
modify a writ of execution upon its service or execution; for, otherwise, we will have a situation
wherein a final and executed judgment can still be annulled or modified by the court upon mere
motion of a panty This would certainly result in endless litigations thereby rendering inutile the rule of
law.

Respondent bank counters with the argument that its partial compliance was involuntary because it
did so under pain of levy and execution of its assets (p. 138, rec.). WE find no merit in this argument.
Respondent bank clearly manifested its voluntariness in complying with the decision of the labor
arbiter by not appealing to the National Labor Relations Commission as provided for under the Labor
Code under Article 223. A party who waives his right to appeal is deemed to have accepted the
judgment, adverse or not, as correct, especially if such party readily acquiesced in the judgment by
starting to execute said judgment even before a writ of execution was issued, as in this case. Under
these circumstances, to permit a party to appeal from the said partially executed final judgment
would make a mockery of the doctrine of finality of judgments long enshrined in this jurisdiction.

Section I of Rule 39 of the Revised Rules of Court provides that "... execution shall issue as a matter
of right upon the expiration of the period to appeal ... or if no appeal has been duly perfected." This
rule applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since
"... the rule of execution of judgments under the rules should govern all kinds of execution of
judgment, unless it is otherwise provided in other laws" Sagucio vs. Bulos 5 SCRA 803) and Article
223 of the Labor Code provides that "... decisions, awards, or orders of the Labor Arbiter or
compulsory arbitrators are final and executory unless appealed to the Commission by any or both of
the parties within ten (10) days from receipt of such awards, orders, or decisions. ..."

Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to
alter the final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143,
citing Cruz vs. WCC, 2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA
621; Carrero vs. WCC and Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75
SCRA 436; Ramos vs. Republic, 69 SCRA 576).

In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where
the lower court modified a final order, this Court ruled thus: t.hqw

xxx xxx xxx

 The lower court was thus aware of the fact that it was thereby altering or modifying
its order of January 8, 1959. Regardless of the excellence of the motive for acting as
it did, we are constrained to hold however, that the lower court had no authorities to
make said alteration or modification. ...

xxx xxx xxx

The equitable considerations that led the lower court to take the action complained of
cannot offset the dem ands of public policy and public interest which are also
responsive to the tenets of equity requiring that an issues passed upon in
decisions or final orders that have become executory, be deemed conclusively
disposed of and definitely closed for, otherwise, there would be no end to litigations,
thus setting at naught the main role of courts of justice, which is to assist in the
enforcement of the rule of law and the maintenance of peace and order, by settling
justiciable controversies with finality.

xxx xxx xxx

In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said: t.hqw

xxx xxx xxx

In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is
absolute that after a judgment becomes final by the expiration of the period provided
by the rules within which it so becomes, no further amendment or correction can be
made by the court except for clerical errors or mistakes. And such final judgment is
conclusive not only as to every matter which was offered and received to sustain or
defeat the claim or demand but as to any other admissible matter which must have
been offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contreras
and Ginco vs. Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated
that the rule must be adhered to regardless of any possible injustice in a particular
case for (W)e have to subordinate the equity of a particular situation to the over-
mastering need of certainty and immutability of judicial pronouncements

xxx xxx xxx

III

The despotic manner by which public respondent Amado G. Inciong divested the members of the
petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of
property without due process of law Public respondent completely ignored the rights of the petitioner
union's members in dismissing their complaint since he knew for a fact that the judgment of the labor
arbiter had long become final and was even partially executed by the respondent bank.

A final judgment vests in the prevailing party a right recognized and protected by law under the due
process clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63
Phil. 324). A final judgment is "a vested interest which it is right and equitable that the government
should recognize and protect, and of which the individual could no. be deprived arbitrarily without
injustice" (Rookledge v. Garwood, 65 N.W. 2d 785, 791).
lt is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of
then Justice, later Chief Justice, Concepcion "... acts of Congress, as well as those of the Executive,
can deny due process only under pain of nullity, and judicial proceedings suffering from the same
flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding (Vda.
de Cuaycong vs. Vda. de Sengbengco 110 Phil. 118, emphasis supplied), And "(I)t has been
likewise established that a violation of a constitutional right divested the court of jurisdiction; and as a
consequence its judgment is null and void and confers no rights" (Phil. Blooming Mills Employees
Organization vs. Phil. Blooming Mills Co., Inc., 51 SCRA 211, June 5, 1973).

Tested by and pitted against this broad concept of the constitutional guarantee of due process, the
action of public respondent Amado G. Inciong is a clear example of deprivation of property without
due process of law and constituted grave abuse of discretion, amounting to lack or excess of
jurisdiction in issuing the order dated November 10, 1979.

WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC RESPONDENT

IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T. SORIANO DATED
AUGUST 25, 1975, IS HEREBY REINSTATED.

COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA

REPUBLIC V. ASIAPRO COOPERATIVE

(G.R. NO. 172101)
Facts:
Respondent Asiapro Cooperative is composed of owners-members with
primary objectives of providing them savings and credit facilities and
livelihood services. In discharge of said objectives, Asiapro entered into
several service contracts with Stanfilco. Sometime later, the cooperative
owners-members requested Stanfilcos help in registering them with SSS and
remitting their contributions. Petitioner SSS informed Asiapro that being
actually a manpower contractor supplying employees to Stanfilco, it must be
the one to register itself with SSS as an employer and remit the contributions.
Respondent continuously ignoring the demand of SSS the latter filed before
the SSC. Asiapro alleges that there exists no employer-employee relationship
between it and its owners-members. SSC ruled in favor of SSS. On appeal,
CA reversed the decision.
Issue:
Whether or not there is employer-employee relationship between Asiapro and
its owners-members.
Ruling: YES.
In determining the existence of an employer-employee relationship, the
following elements are considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever means; (3) the power of
dismissal; and (4) the power to control the workers conduct, with the latter
assuming primacy in the overall consideration. All the aforesaid elements are
present in this case.
First. It is expressly provided in the Service Contracts that it is the respondent
cooperative which has the exclusive discretion in the selection and
engagement of the owners-members as well as its team leaders who will be
assigned at Stanfilco.
Second. It cannot be doubted then that those stipends or shares in the service
surplus are indeed wages, because these are given to the owners-members as
compensation in rendering services to respondent cooperatives client,
Stanfilco.
Third. It is also stated in the above-mentioned Service Contracts that it is the
respondent cooperative which has the power to investigate, discipline and
remove the owners-members and its team leaders who were rendering
services at Stanfilco.
Fourth. In the case at bar, it is the respondent cooperative which has the sole
control over the manner and means of performing the services under the
Service Contracts with Stanfilco as well as the means and methods of work.
Also, the respondent cooperative is solely and entirely responsible for its
owners-members, team leaders and other representatives at Stanfilco. All
these clearly prove that, indeed, there is an employer-employee relationship
between the respondent cooperative and its owners-members.