G.R. No.

78763 July 12,1989

MANILA ELECTRIC COMPANY, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M. SIGNO, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
Dominador Maglalang for private respondent.
MEDIALDEA, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the resolution of the respondent National Labor
Relations Commission dated March 12, 1987 (p. 28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant,
versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiter which ordered the reinstatement of private
respondent herein, Apolinario Signo, to his former position without backwages.

The antecedent facts are as follows:

Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services
were terminated on May 18, 1983.

In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia
Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the
required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from
Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the
company.

It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the
place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de
Lara's residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at
the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the
latter.

As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of
the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.

Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the
installation. Thus, the services of the latter were terminated on May 18, 1983.

On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.

After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p. 79, Rollo) on April 29, 1985, which
stated, inter alia:

Verily, complainant's act of inducing the Meralco employees to effectuate the installation on Engr. de Lara's residence
prejudiced the respondent, and therefore, complainant himself had indeed became a participant in the transactions,
although not directly, which turned out to be illegal, not to mention that some of the materials used therein belongs to
Meralco, some of which were inferior quality. . . .

While complainant may deny the violation, he cannot do away with company's Code on Employee Discipline, more
particularly Section 7, par. 8 and Section 6, par. 24 thereof However, as admitted by the respondent, the infraction of the
above cited Code is punishable by reprimand to dismissal."

... . And in this case, while considering that complainant indeed committed the above-cited infractions of company Code of
Employee Discipline, We shall also consider his records of uninterrupted twenty (20) years of service coupled with two (2)
commendations for honesty. Likewise, We shall take note that subject offense is his first, and therefore, to impose the
extreme penalty of dismissal is certainly too drastic. A penalty short of dismissal is more in keeping with justice, and
adherence to compassionate society.

WHEREFORE, respondent Meralco is hereby directed to reinstate complainant Apolinario M. Signo to his former position as
Supervisor Leadman without backwages, considering that he is not at all faultless. He is however, here warned, that
commission of similar offense in the future, shall be dealt with more severely.

SO ORDERED.

Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the respondent Commission dismissed both
appeals for lack of merit and affirmed in toto the decision of the Labor Arbiter.

On June 23, 1987, the instant petition was filed with the petitioner contending that the respondent Commission committed grave abuse of
discretion in affirming the decision of the Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987, enjoining
the respondents from enforcing the questioned resolution of the respondent Commission.

The issue to resolve in the instant case is whether or not respondent Signo should be dismissed from petitioner company on grounds of
serious misconduct and loss of trust and confidence.

Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code on Employee Discipline, which provide:
 Section 6, Par. 24—Encouraging, inducing or threatening another employee to perform an act constituting a violation of
this Code or of company work, rules or an offense in connection with the official duties of the latter, or allowing himself to
be persuaded, induced or influenced to commit such offense.

Penalty—Reprimand to dismissal, depending upon the gravity of the offense.

Section 7, Par. 8—Soliciting or receiving money, gift, share, percentage or benefits from any person, personally or through
the mediation of another, to perform an act prejudicial to the Company.

Penalty—Dismissal. (pp. 13-14, Rollo)

Petitioner further argues that the acts of private respondent constituted breach of trust and caused the petitioner company economic losses
resulting from the unbilled electric consumption of de Lara; that in view thereof, the dismissal of private respondent Signo is proper
considering the circumstances of the case.

The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and
authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his
employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation
of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC,
G.R. No. 75782, December 1, 1987,156 SCRA 78).

There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges
from reprimand to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor
Arbiter found that dismissal should not be meted to respondent Signo considering his twenty (20) years of service in the employ of
petitioner, without any previous derogatory record, in addition to the fact that petitioner company had awarded him in the past, two (2)
commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found
to be the fault of petitioner's Power Sales Division.

We find no reason to disturb these findings. Well-established is the principle that findings of administrative agencies which have acquired
expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review
by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office
based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office
Workers Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30,1983,122 SCRA 557).

This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as
breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed
for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et al., G.R. No. L- 54280, September
30,1982,117 SCRA 523; Meracap v. International Ceramics Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA
412; Sampang v. Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30,1980, 100 SCRA
691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57 SCRA 489).

In a similar case, this Court ruled:

As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a
person who admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the
latter is patently inimical to its interest. The law in protecting the rights of the laborers, authorized neither oppression nor
self- destruction of the employer.

However, taking into account private respondent's 'twenty-three (23) years of service which undisputedly is unblemished
by any previous derogatory record' as found by the respondent Commission itself, and since he has been under preventive
suspension during the pendency of this case, in the absence of a showing that the continued employment of private
respondent would result in petitioner's oppression or self-destruction, We are of the considered view that his dismissal is a
drastic punishment. ... .

xxx xxx xxx

The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without
backwages in view of petitioner's obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)

Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be
the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit
of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No.
71812, July 30,1987,152 SCRA 140).

In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering
the good faith of the employer in dismissing the respondent.

ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations
Commission dated March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted.

SO ORDERED.

G.R. No. L-2779 October 18, 1950

DANIEL SANCHEZ, ET AL., plaintiffs-appellees,
vs.
HARRY LYONS CONSTRUCTION, INC., ET AL., defendants-appellants.
Gibbs, Gibbs, Chuidian and Quasha for appellant Harry Lyons Construction, Inc.
Cecilio I. Lim and Antonio M. Castro for appellees.
MORAN, C. J.:

This case originated in the Municipal Court of Manila upon a complaint filed on March 9, 1948, by the herein appellees as plaintiffs, against
the herein appellants as defendants, for the sum of P2,210 plus interest, which plaintiffs claimed as one month advance pat due them. On
April 28, 1948, the parties entered into a stipulation of facts upon which said municipal court rendered judgment for the plaintiffs. Upon
denial of their motion for reconsideration of this judgment, the defendants filed an appeal to the Court of First Instance of Manila, wherein
the parties submitted the case upon the same facts agreed upon in the Municipal Court. On October 2, 1948, the Court of First Instance of
Manila rendered its decision holding for plaintiffs, as follows:

Wherefore judgment is hereby rendered —

1. Ordering defendant Material Distributors, Inc. to pay plaintiff Enrique Ramirez the sum of P360 and plaintiff Juan Ramirez the sum of
P250 with legal interest on each of the said sums from the date of the filing of the complaint in the Municipal Court of Manila until the date
of full payment thereof; and

2. Ordering defendant Harry Lyons Construction, Inc. to pay plaintiff Daniel Sanchez the sum of P250, and plaintiff Mariano Javier, Venancio
Diaz, Esteban Bautista, Faustino Aquillo, Godofredo Diamante, Marcial Lazaro, Ambrosio de la Cruz, and Marcelino Maceda the sum of P150
each, with legal interest on each of the said sums from the date of the filing of the complaint in the Municipal Court of Manila until the date
of full payment thereof.

One half of the costs is to be paid by Material Distributors, Inc. and the other half by Harry Lyons Construction, Inc.

From this judgment, defendants filed an appeal with this court purely upon a question of law. The stipulation of facts entered into by the
parties on April 28, 1948, is as follows: lawphil.net

STIPULATION OF FACTS.

Come now the plaintiffs and the defendants, by their respective undersigned attorneys and to this Honorable Court, respectfully submit the
following stipulation of facts:

1. That the plaintiffs were respectively employed as follows:

EMPLOYED BY DEFENDANT MATERIAL DISTRIBUTORS, INC.

Name Date of Position Salary

employment
Enrique Ramirez .............. 12/16/46 Warehouseman P450 a mo.
Juan Ramirez ................... do do 250 a mo.

NOTE. — The salary of Enrique Ramirez was later reduced to P360 per month. This was the amount he was receiving at the time of his
dismissal.

EMPLOYED BY DEFENDANT HARRY LYONS CONSTRUCTION, INC.

Daniel Sanchez ................ 1/1/47 Carpenter- P250 a mo.

Foreman
Mariano Javier ................. ....do.................. Guard................. 5 a day
Venancio Diaz ................. ....do.................. do....................... 5 a day
Esteban Bautista ............ ....do.................. do....................... 5 a day
Faustino Aquillo ............ ....do.................. do....................... 5 a day
Godofredo Diamante ..... ....do.................. do....................... 5 a day
Marcial Lazaro ................ ....do.................. do....................... 5 a day
Ambrosio de la Cruz ..... ....do.................. do....................... 5 a day
Marcelino Macada ........ ....do.................. do....................... 5 a day

as per contracts of employment, copies of which are attached to defendants' answer marked Exhibits 1 to 11 inclusive

2. That in said contracts of employment the plaintiff agreed as follows:

"I accept the foregoing appointment, and in consideration thereof I hereby agree that such employment may be terminated at any time,
without previous notice, and I further agree that salary and wages, shall be computed and paid at the rate specified up to the date of such
termination.

"Also in consideration of such employment I hereby expressly waive the benefit of article 302 of the Code of Commerce and that of any
other law, ruling, or custom which might require notice of discharge or payment of salary or wages after date of the termination of such
employment."

3. That the plaintiffs were dismissed by the defendants on December 31, 1947 without one months' previous notice.

4. That each of the plaintiffs demanded payment of one month's salary from the defendants and that the latter refused to pay the same.

WHEREFORE, it is respectfully prayed that judgment on the foregoing stipulation of facts be rendered by this Honorable Court.

The points in issue herein are: first, whether plaintiffs, both those paid on a monthly and daily basis, are entitled to the benefit granted in
article 302 of the Code of Commerce; and secondly, if they are so entitled, was their waiver of such benefits legal and valid?

Article 302 of the Code of Commerce reads as follows:

ART. 302. In cases in which no special time is fixed in the contracts of service, any one of the parties thereto may cancel it, advising the
other party thereof one month in advance.

The factor or shop clerk shall be entitled, in such case, to the salary due for said month.

It is a clear doctrine, as gleaned from the provision of the law and settled jurisprudence, 1 that in a mercantile contract of service in which
no special time is fixed, any one of the parties may cancel said contract upon giving of a one-month notice, called a mesada, to the other
party. The law gives an added proviso that in the case of factors or shop clerks, these shall be entitled to salary during this one month of
standing notice. In any case, the one-month notice must be given to any employee, whether factor, shop clerk or otherwise, so long as the
two conditions concur, namely, that no special time is fixed in the contract of service, and that said employee is a commercial employee.
And when such notice is not given under these conditions, not only the factor or shop clerk but any employee discharged without cause, is
entitled to indemnity which may be one month's salary. 2

In the instant case, there lies no doubt that plaintiffs are commercial employees of appellant corporations, rendering service as
warehousemen, carpenter-foreman and guards. There is likewise no doubt as can be seen from the contracts of employment submitted as
exhibits, that no special time has been fixed in the contracts of services between plaintiffs-appellees and defendants-appellants. The stated
computation or manner of payment, whether monthly or daily, does not represent nor determine a special time of employment. Thus, a
commercial employee may be employed for one year and yet receive his salary on the daily or weekly or monthly or other basis.

Appellants allege that the use of the word "temporary" in the contracts of services of some of the plaintiffs shows that their employment
was with a term, and the term was "temporary, on a day to day basis." The record discloses that this conclusion is unwarranted. The
contracts simply say — "You are hereby employed as temporary guard with a compensation at the rate of P5 a day . . . ." The word
"temporary" as used herein does not mean the special time fixed in the contracts referred to in article 302 of the Code of Commerce. The
daily basis therein stipulated is for the computation of pay, and is not necessarily the period of employment. Hence, this Court holds that
plaintiffs-appellants come within the purview of article 302 of the Code of Commerce.

Now, as the second question, namely, the validity of plaintiffs' waiver of the benefits given them by said article 302. This court holds that
such a waiver, made in advance, is void as being contrary to public policy. Granting that the " mesada" given in article 302 of the Code of
Commerce, is for the bilateral benefit of both employer and employee, nevertheless, this does not preclude the finding that a waiver of such
"mesada" in advance by the employee is contrary to public policy.

Public policy, with regard to labor, is clearly stated in article II, section 5, of the Philippine Constitution, which reads —

The promotion of social justice to insure the well-being and economic security of all the people should be the concern of the State.

and article XIV, section 6, which reads —

The State shall afford protection to labor, especially to working women and minors, and shall regulate the relations between land-owner and
tenant, and between labor and capital in industry and in agriculture. . . .

Article 302 of the Code of Commerce must be applied in consonance with these provisions of our constitution. In the matter of employment
bargaining, there is no doubt that the employer stands on higher footing than the employee. First of all, there is greater supply than
demand for labor. Secondly, the need for employment by labor comes from vital and even desperate, necessity. Consequently, the law must
protect labor, at least, to the extent of raising him to equal footing in bargaining relations with capital and to shield him from abuses
brought about by the necessity for survival. It is safe to presume therefore, that an employee or laborer who waives in advance any benefit
granted him by law does so, certainly not in his interest or through generosity but under the forceful intimidation of urgent need, and
hence, he could not have so acted freely and voluntarily.

For all the foregoing, this court hereby affirms the decision of the lower court, with costs against appellants.