WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES
submitted his report to the Management
A. Women
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 123737 May 28, 1999
CARLOS C. LIBRES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NATIONAL STEEL CORPORATION,
OSMUNDO G. WAGA, JR., ANTONIE D. SEVA, PETER J. LOQUILLANO, SATURNINO
P. MEJORADA and ISIDRO F. HYNSON, JR., respondent.
BELLOSILLO, J.:
This petition for certiorari seeks to annul the decision of public respondent National
Labor Relations Commission (NLRC) sustaining the Labor Arbiter's finding that
petitioner was validly suspended by private respondents, as well as the NLRC
resolution denying petitioner's motion to reconsider its decision.
Petitioner Carlos G. Libres, an electrical engineer, was holding a managerial
position with National Steel Corporation (NSC) as Assistant Manager. On 3 August
1993 he received a Notice of Investigation from Assistant Vice president Isidro F.
Hynson Jr., his immediate superior, requesting him to submit a written explanation
relative to the charge of sexual harassment made by Susan D. Capiral, Hynson's
secretary, allegedly committed by Libres sometime in May 1992, and subsequently
to answer clarificatory questions on the matter. The notice also warned him that
failure to file his written explanation would be construed as a waiver of his right to
be heard. On 14 August 1993 petitioner submitted his written explanation denying
the accusation against him and offering to submit himself for clarificatory
interrogation.
Subsequently, Hynson Jr. conducted an internal investigation to which Libres and
Capiral were invited to ventilate their respective sides of the issue. They readily
responded. Thereafter, Hynson Jr.
Evaluation Committee (MEC).
The MEC, after deliberation concluded that the charges against petitioner
constituted a violation of Item 2, Table V, of the Plant's Rules and Regulations.1 It
opined that "touching a female subordinate's hand and shoulder, caressing her
nape and telling other people that Capiral was the one who hugged and kissed or
that she responded to the sexual advances are unauthorized acts that damaged her
honor". 2 Referring to the Manual of the Philippine Daily Inquirer in defining sexual
harassment, 3 the MEC finally concluded that petitioner's acts clearly constituted
sexual harassment as charged and recommended petitioner's suspension for thirty
(30) days without pay.
On 5 January 1994 petitioner wrote Melchor Q. Villamor, Vice President for
Manufacturing requesting reconsideration of his suspension, but the same was
denied. On 12 February 1994 the suspension order was finally implemented.
Seeking to reverse his misfortune, Libres filed a complaint for illegal suspension and
unjust discrimination against respondent NSC and its officers, private respondents
herein, before the Labor Arbiter. Citing the failure of the MEC to grant him
audience despite his offer to answer clarificatory questions, petitioner claimed
denial of due process. Labor Arbiter Nicodemus G. Palangan however ruled that
due process was properly observed and that there was a positive finding of sexual
harassment to justify petitioner's suspension. He pointed out that there was no
substantial inconsistency between the narration of complainant Capiral and
petitioner regarding the incident in the evening of May 1992. The Labor Arbiter
found that aside from a few facts which were controverted by Capiral in her
complaint-affidavit, petitioner's admissions approximated the truth; consequently,
he ruled that the MEC was correct in concluding that sexual harassment had indeed
transpired. The Labor Arbiter observed that petitioner should welcome that his
penalty was only for suspension of thirty (30) days as opposed to termination
imposed in Villarama v. NLRC and Golden Donuts.4
In this recourse petitioner maintains that public respondent grievously erred
amounting to lack or excess of jurisdiction in finding that he committed sexual
harassment justifying his suspension, and in concluding that he was afforded due
process.
Petitioner argues that the issue of sexual harassment was not adequately
considered as he noted that the finding of the NLRC was made without proper basis
in fact and in law. He maintains that the NLRC merely adopted the conclusions of
the Labor Arbiter which in turn were simply derived from the report of the MEC.
Petitioner primarily disputes the failure of the NLRC to apply RA No. 7877, "An Act
Declaring Sexual Harassment Unlawful in the Employment, Education or Training
Environment and for Other Purposes," in determining whether he actually
committed sexual harassment. He asserts that his acts did not fall within the
definition and criteria of sexual harassment as laid down in Sec. 3 of the
law.5 Specifically, he cites public respondent's failure to show that his acts of
fondling the hand and massaging the shoulders of Capiral "discriminated against
her continued employment," "impaired her rights and privileges under the Labor
Code," or "created a hostile, intimidating or offensive environment."6
Petitioner also contends that public respondent's reliance on Villarama v. NLRC and
Golden Donuts7 was misplaced. He draws attention to victim Divina Gonzaga's
immediate filing of her letter of resignation in the Villarama case as opposed to the
one-year delay of Capiral in filing her complaint against him. He now surmises that
the filing of the case against him was merely an afterthought and not borne out of
a valid complaint, hence, the Villarama case should have no bearing on the instant
case.
As regards his assertion that he was not afforded due process, petitioner would
point to his demand for personal confrontation which was brushed aside by the
MEC. He argues strongly that in rejecting his plea, the MEC clearly denied him an
opportunity to be heard and present his side.
The issues raised in this petition require this Court to delve into the findings of fact
by the public respondent. We have ruled in a litany of cases that resort to judicial
review of the decisions of the NLRC under Rule 65 of the Rules of Court is confined
only to issues of want or excess of jurisdiction and grave abuse of discretion on the
part of the tribunal rending them. It does not include an inquiry on the correctness
of the evaluation of evidence, which served as basis for the labor official in
determining his conclusion. Findings of fact of administrative officers are generally
given finality.8 Nonetheless, the Court shall discuss the matter if only to emphasize
that the contentions of petitioner are definitely without merit.
Petitioner assails the failure of the NLRC to strictly apply RA No. 7877 to the instant
case. We note however that petitioner never raised the applicability of the law in
his appeal to the NLRC nor in his motion for reconsideration. Issues or arguments
must chiefly be raised before the court or agency concerned so as to allow it to
pass upon and correct its mistakes without the intervention of a higher court.
Having failed to indicate his effort along this line, petitioner cannot now belatedly
raise its application in this petition.
Republic Act No. 7877 was not yet in effect at the time of the occurrence of the act
complained of. It was still being deliberated upon in Congress when petitioner's
case was decided by the Labor Arbiter. As a rule, laws shall have no retroactive
effect unless otherwise provided, or except in a criminal case when their
application will favor the accused.9 Hence, the Labor Arbiter have to rely on the
MEC report and the common connotation of sexual harassment as it is generally as
understood by the public. Faced with the same predicament, the NLRC had to
agree with the Labor Arbiter. In so doing, the NLRC did not commit any abuse of
discretion in affirming the decision of the Labor Arbiter.
Petitioner next trains his gun on the reliance by the NLRC on Villarama and claims it
was erroneous. We rule otherwise and hold that it was both fitting and appropriate
since it singularly addressed the issue of a managerial employee committing sexual
harassment on a subordinate. The disparity in the periods of filing the complaints in
the two (2) cases did not in any way reduce this case into insignificance. On the
contrary, it even invited the attention of the Court to focus on sexual harassment
as a just and valid cause for termination. Whereas petitioner Libres was only meted
a 30-day suspension by the NLRC, Villarama in the other case was penalized with
termination. As Mr. Justice Puno elucidated, "As a managerial employee, petitioner
is bound by more exacting work ethics. He failed to live up to his higher standard of
responsibility when he succumbed to his moral perversity. And when such moral
perversity is perpetrated against his subordinate, he provides a justifiable ground
for his dismissal for lack of trust and confidence. It is the right, nay, the duty of
every employer to protect its employees from oversexed superiors." 10 Public
respondent therefore is correct in its observation that the Labor Arbiter was in fact
lenient in his application of the law and jurisprudence for which petitioner must be
grateful and not gripe against.
Petitioner further claims that the delay in instituting the complaint shows that it
was only an afterthought. We disagree. As pointed out by the Solicitor General, it
could be expected since Libres was Capiral's immediate superior. Fear of retaliation
and backlash, not to forget the social humiliation and embarrassment that victims
of this human frailty usually suffer, are all realities that Capiral had to contend with.
Moreover, the delay did not detract from the truth derived from the facts.
Petitioner Libres never questioned the veracity of Capiral's allegations. In fact his
narration even corroborated the latter's assertion in several material points. He
only raised issue on the complaint's protracted filing.
On the question of due process, we find that the requirements thereof were
sufficiently complied with. Due process as a constitutional precept does not always
and in all situations require a trial type proceeding. Due process is satisfied when a
person is notified of the charge against him and given an opportunity to explain or
defend himself. The essence of due process is simply to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side, or an opportunity
to seek a reconsideration of the action or ruling complained of. 11 It is undeniable
that petitioner was given a Notice of Investigation informing him of the charge of
sexual harassment as well as advising him to submit a written explanation
regarding the matter; that he submitted his written explanation to his superior,
Isidro F. Hyson Jr.; that Hynson Jr. further allowed him to air his grievance in a
private session; and, that upon release of the suspension order made by the MEC
petitioner requested its reconsideration but was denied. From the foregoing it can
be gleaned that petitioner was given more than adequate opportunity to explain
his side and air his grievances.

The personal confrontation with the MEC officers, which he requested, was not
necessary. The parties had already exhaustively presented their claims and
defenses in different fora. As stated in Howevers Savings and Loan Association
v. NLRC, litigants may be heard through pleadings, written explanations, position
papers, memoranda or oral arguments. 12 Petitioner has been afforded all of the
above means to air his side. Due process was therefore properly observed.

WHEREFORE, the petition is DISMISSED, no grave abuse of discretion having been

committed by public respondent National Labor Relations Commission in upholding
the suspension of petitioner Carlos G. Libres as justified and in accordance with due
process. Consequently, its decision of 28 August 1995 as well as its resolution of 31
October 1995 is AFFIRMED.1âwphi1.nêt

SO ORDERED.
 Republic of the Philippines Sexual harassment is an imposition of misplaced "superiority" which is enough to
SUPREME COURT dampen an employee’s spirit and her capacity for advancement. It affects her sense
Manila of judgment; it changes her life.1

THIRD DIVISION Before this Court are three Petitions for Review on Certiorari assailing the October
18, 2002 Resolution of the CA’s Former Ninth Division2 in CA-G.R. SP No. 61026.
G.R. No. 155831 February 18, 2008 The Resolution modified the December 14, 2001 Decision3 of the Court of Appeals’
Eleventh Division, which had affirmed the Decision of the Office of the President
(OP) dismissing from the service then National Labor Relations Commission (NLRC)
MA. LOURDES T. DOMINGO, petitioner,
Chairman Rogelio I. Rayala (Rayala) for disgraceful and immoral conduct.
vs.
ROGELIO I. RAYALA, respondent.
All three petitions stem from the same factual antecedents.
x-------------------------x
On November 16, 1998, Ma. Lourdes T. Domingo (Domingo), then Stenographic
Reporter III at the NLRC, filed a Complaint for sexual harassment against Rayala
G.R. No. 155840 February 18, 2008
before Secretary Bienvenido Laguesma of the Department of Labor and
Employment (DOLE).
ROGELIO I. RAYALA, petitioner,
vs.
To support the Complaint, Domingo executed an Affidavit narrating the incidences
OFFICE OF THE PRESIDENT; RONALDO V. ZAMORA, in his capacity as Executive
of sexual harassment complained of, thus:
Secretary; ROY V. SENERES, in his capacity as Chairman of the National Labor
Relations Commission (in lieu of RAUL T. AQUINO, in his capacity as Acting
Chairman of the National labor Relations Commission); and MA. LOURDES T. xxxx
DOMINGO, respondents.
4. Sa simula ay pabulong na sinasabihan lang ako ni Chairman Rayala ng
x-------------------------x mga salitang "Lot, gumaganda ka yata?"

G.R. No. 158700 February 18, 2008 5. Sa ibang mga pagkakataon nilalapitan na ako ni Chairman at
hahawakan ang aking balikat sabay pisil sa mga ito habang ako ay nagta-
type at habang nagbibigay siya ng diktasyon. Sa mga pagkakataong ito,
The REPUBLIC OF THE PHILIPPINES, represented by the OFFICE OF THE
kinakabahan ako. Natatakot na baka mangyari sa akin ang mga
PRESIDENT; and ALBERTO G. ROMULO, in his capacity as Executive
napapabalitang insidente na nangyari na noon tungkol sa mga sekretarya
Secretary, petitioners,
niyang nagbitiw gawa ng mga mahahalay na panghihipo ni Chairman.
vs.
ROGELIO I. RAYALA, respondent.
6. Noong ika-10 ng Setyembre, 1998, nang ako ay nasa 8th Floor, may
nagsabi sa akin na kailangan akong bumaba sa 7th Floor kung nasaan ang
DECISION
aming opisina dahil sa may koreksyon daw na gagawin sa mga papel na
tinayp ko. Bumaba naman ako para gawin ito. Habang ginagawa ko ito,
NACHURA, J.: lumabas si Chairman Rayala sa silid ni Mr. Alex Lopez. Inutusan ako ni
Chairman na sumunod sa kaniyang silid. Nang nasa silid na kami, sinabi
niya sa akin:
 Chairman: Lot, I like you a lot. Naiiba ka sa lahat.
At pagkatapos ako ay kaniyang inusisa tungkol sa mga personal na bagay
sa aking buhay. Ang ilan dito ay tungkol sa aking mga magulang, kapatid,
pag-aaral at kung may boyfriend na raw ba ako.
Chairman: May boyfriend ka na ba?
Lourdes: Dati nagkaroon po.
Chairman: Nasaan na siya?
Lourdes: Nag-asawa na ho.
Chairman: Bakit hindi kayo nagkatuluyan?
Lourdes: Nainip po.
Chairman: Pagkatapos mo ng kurso mo ay kumuha ka ng Law
at ako ang bahala sa iyo, hanggang ako pa ang Chairman dito.
Pagkatapos ay kumuha siya ng pera sa kaniyang amerikana at inaabot sa
akin.
Chairman: Kuhanin mo ito.
Lourdes: Huwag na ho hindi ko kailangan.
Chairman: Hindi sige, kuhanin mo. Ayusin mo ang dapat ayusin.
Tinanggap ko po ang pera ng may pag-aalinlangan. Natatakot at
kinakabahan na kapag hindi ko tinanggap ang pera ay baka siya magagalit
kasabay na rito ang pagtapon sa akin kung saan-saan opisina o kaya ay
tanggalin ako sa posisyon.
Chairman: Paglabas mo itago mo ang pera. Ayaw ko ng may
makaka-alam nito. Just the two of us.
Lourdes: Bakit naman, Sir?
Chairman: Basta. Maraming tsismosa diyan sa labas. But I don’t
give them a damn. Hindi ako mamatay sa kanila.
Tumayo na ako at lumabas. Pumanhik na ako ng 8th Floor at pumunta ako
sa officemate ko na si Agnes Magdaet. Ikinwento ko ang nangyari sa akin
sa opisina ni Chairman. Habang kinikwento ko ito kay Agnes ay binilang
namin ang pera na nagkakahalaga ng tatlong libong piso (PHP 3,000).
Sinabi ni Agnes na isauli ko raw ang pera, pero ang sabi ko ay natatakot
ako baka magalit si Sir. Nagsabi agad kami kay EC Perlita Velasco at
sinalaysay ko ang nangyari. Sinabi niya na isauli ko ang pera at noong
araw ding iyon ay nagpasiya akong isauli na nga ito ngunit hindi ako
nagkaroon ng pagkakataon dahil marami siyang naging bisita. Isinauli ko
nga ang pera noong Lunes, Setyembre 14, 1998.
7. Noong huling linggo ng Setyembre, 1998, ay may tinanong din sa akin si
Chairman Rayala na hindi ko masikmura, at sa aking palagay at tahasang
pambabastos sa akin.
Chairman: Lot, may ka live-in ka ba?
Lourdes: Sir, wala po.
Chairman: Bakit malaki ang balakang mo?
Lourdes: Kayo, Sir ha! Masama sa amin ang may ka live-in.
Chairman: Bakit, ano ba ang relihiyon ninyo?
Lourdes: Catholic, Sir. Kailangan ikasal muna.
Chairman: Bakit ako, hindi kasal.
Lourdes: Sir, di magpakasal kayo.
Chairman: Huh. Ibahin na nga natin ang usapan.
8. Noong Oktubre 29, 1998, ako ay pumasok sa kwarto ni Chairman
Rayala. Ito ay sa kadahilanang ang fax machine ay nasa loob ng kaniyang
kwarto. Ang nag-aasikaso nito, si Riza Ocampo, ay naka-leave kaya ako
ang nag-asikaso nito noong araw na iyon. Nang mabigyan ko na ng fax
tone yung kausap ko, pagharap ko sa kanan ay nakaharang sa dadaanan
ko si Chairman Rayala. Tinitingnan ako sa mata at ang titig niya ay
umuusad mula ulo hanggang dibdib tapos ay ngumiti na may mahalay na
pakahulugan.
9. Noong hapon naman ng pareho pa ring petsa, may nag-aapply na
sekretarya sa opisina, sinabi ko ito kay Chairman Rayala:
Lourdes: Sir, si Pinky po yung applicant, mag-papainterview po
yata sa inyo.
Chairman: Sabihin mo magpa-pap smear muna siya
Chairman: O sige, i-refer mo kay Alex. (Alex Lopez, Chief of
Staff).
10. Noong Nobyembre 9, 1998, ako ay tinawag ni Chairman Rayala sa
kaniyang opisina upang kuhanin ko ang diktasyon niya para kay ELA Oscar
Uy. Hindi pa kami nakakatapos ng unang talata, may pumasok na bisita si
Chairman, si Baby Pangilinan na sinamahan ni Riza Ocampo. Pinalabas
muna ako ni Chairman. Nang maka-alis na si Ms. Pangilinan, pinapasok na
niya ako ulit. Umupo ako. Lumapit sa likuran ko si Chairman, hinawakan
ang kaliwang balikat ko na pinipisil ng kanang kamay niya at sinabi:
Chairman: Saan na ba tayo natapos?
Palakad-lakad siya sa aking likuran habang nag-didikta. Huminto siya
pagkatapos, at nilagay niya ang kanang kamay niya sa aking kanang
balikat at pinisil-pisil ito pagkatapos ay pinagapang niya ito sa kanang
bahagi ng aking leeg, at pinagapang hanggang kanang tenga at saka
kiniliti. Dito ko inalis ang kaniyang kamay sa pamamagitan ng aking
kaliwang kamay. At saka ko sinabi:
Lourdes: Sir, yung kamay ninyo alisin niyo!
Natapos ko rin ang liham na pinagagawa niya pero halos hindi ko na
maintindihan ang na-isulat ko dahil sa takot at inis na nararamdaman ko.4
After the last incident narrated, Domingo filed for leave of absence and asked to be
immediately transferred. Thereafter, she filed the Complaint for sexual harassment
on the basis of Administrative Order No. 250, the Rules and Regulations
Implementing RA 7877 in the Department of Labor and Employment.
Upon receipt of the Complaint, the DOLE Secretary referred the Complaint to the
OP, Rayala being a presidential appointee. The OP, through then Executive
Secretary Ronaldo Zamora, ordered Secretary Laguesma to investigate the
allegations in the Complaint and create a committee for such purpose. On
December 4, 1998, Secretary Laguesma issued Administrative Order (AO) No. 280,
Series of 1998,5 constituting a Committee on Decorum and Investigation
(Committee) in accordance with Republic Act (RA) 7877, the Anti-Sexual
Harassment Act of 1995.6
The Committee heard the parties and received their respective evidence. On March
2, 2000, the Committee submitted its report and recommendation to Secretary
Laguesma. It found Rayala guilty of the offense charged and recommended the
imposition of the minimum penalty provided under AO 250, which it erroneously
stated as suspension for six (6) months.
The following day, Secretary Laguesma submitted a copy of the Committee Report
and Recommendation to the OP, but with the recommendation that the penalty
should be suspension for six (6) months and one (1) day, in accordance with AO
250.
On May 8, 2000, the OP, through Executive Secretary Zamora, issued AO 119,7 the
pertinent portions of which read:
Upon a careful scrutiny of the evidence on record, I concur with the
findings of the Committee as to the culpability of the respondent
[Rayala], the same having been established by clear and convincing
evidence. However, I disagree with the recommendation that respondent
be meted only the penalty of suspension for six (6) months and one (1)
day considering the circumstances of the case.
What aggravates respondent’s situation is the undeniable circumstance
that he took advantage of his position as the superior of the complainant.
 Respondent occupies the highest position in the NLRC, being its same was dismissed in a Resolution dated June 26, 2000 for disregarding the
Chairman. As head of said office, it was incumbent upon respondent to hierarchy of courts.10 Rayala filed a Motion for
set an example to the others as to how they should conduct themselves
in public office, to see to it that his subordinates work efficiently in Reconsideration11 on August 15, 2000. In its Resolution12 dated September 4, 2000,
accordance with Civil Service Rules and Regulations, and to provide them the Court recalled its June 26 Resolution and referred the petition to the Court of
with healthy working atmosphere wherein co-workers treat each other Appeals (CA) for appropriate action.
with respect, courtesy and cooperation, so that in the end the public
interest will be benefited (City Mayor of Zamboanga vs. Court of Appeals,
The CA rendered its Decision13 on December 14, 2001. It held that there was
182 SCRA 785 [1990]).
sufficient evidence on record to create moral certainty that Rayala committed the
acts he was charged with. It said:
What is more, public service requires the utmost integrity and strictest
discipline (Gano vs. Leonen, 232 SCRA 99 [1994]). Thus, a public servant
The complainant narrated her story complete with details. Her
must exhibit at all times the highest sense of honesty and integrity, and
straightforward and uninhibited testimony was not emasculated by the
"utmost devotion and dedication to duty" (Sec. 4 (g), RA 6713), respect
declarations of Commissioner Rayala or his witnesses. x x x
the rights of others and shall refrain from doing acts contrary to law, and
good morals (Sec. 4(c)). No less than the Constitution sanctifies the
principle that a public office is a public trust, and enjoins all public officers Moreover, Commissioner Rayala has not proven any vicious motive for
and employees to serve with the highest degree of responsibility, Domingo and her witnesses to invent their stories. It is very unlikely that
integrity, loyalty and efficiency (Section 1, Article XI, 1987 Constitution). they would perjure themselves only to accommodate the alleged
conspiracy to oust petitioner from office. Save for his empty conjectures
and speculations, Rayala failed to substantiate his contrived conspiracy. It
Given these established standards, I see respondent’s acts not just [as] a
is a hornbook doctrine that conspiracy must be proved by positive and
failure to give due courtesy and respect to his co-employees
convincing evidence (People v. Noroña, 329 SCRA 502 [2000]). Besides, it
(subordinates) or to maintain good conduct and behavior but defiance of
is improbable that the complainant would concoct a story of sexual
the basic norms or virtues which a government official must at all times
harassment against the highest official of the NLRC and thereby expose
uphold, one that is contrary to law and "public sense of morality."
herself to the possibility of losing her job, or be the subject of reprisal
Otherwise stated, respondent – to whom stricter standards must apply
from her superiors and perhaps public ridicule if she was not telling the
being the highest official [of] the NLRC – had shown an attitude, a frame
truth.
of mind, a disgraceful conduct, which renders him unfit to remain in the
service.
It also held that Rayala’s dismissal was proper. The CA pointed out that Rayala was
dismissed for disgraceful and immoral conduct in violation of RA 6713, the Code of
WHEREFORE, in view of the foregoing, respondent Rogelio I. Rayala,
Conduct and Ethical Standards for Public Officials and Employees. It held that the
Chairman, National Labor Relations Commission, is found guilty of the
OP was correct in concluding that Rayala’s acts violated RA 6713:
grave offense of disgraceful and immoral conduct and is
hereby DISMISSED from the service effective upon receipt of this Order.
Indeed, [Rayala] was a public official, holding the Chairmanship of the
National Labor Relations Commission, entrusted with the sacred duty of
SO ORDER[ED].
administering justice. Occupying as he does such an exalted position,
Commissioner Rayala must pay a high price for the honor bestowed upon
Rayala filed a Motion for Reconsideration, which the OP denied in a him. He must comport himself at all times in such a manner that the
Resolution8 dated May 24, 2000. He then filed a Petition for Certiorari and conduct of his everyday life should be beyond reproach and free from
Prohibition with Prayer for Temporary Restraining Order under Rule 65 of the any impropriety. That the acts complained of were committed within the
Revised Rules on Civil Procedure before this Court on June 14, 2000.9 However, the
 sanctuary of [his] office compounded the objectionable nature of his ACCORDINGLY, by a majority vote, public respondents’ Motion for
wrongdoing. By daring to violate the complainant within the solitude of Reconsideration, (sic) is DENIED.
his chambers, Commissioner Rayala placed the integrity of his office in
disrepute. His disgraceful and immoral conduct warrants his removal SO ORDERED.
from office.14
The Republic then filed its own Petition for Review.20
Thus, it dismissed the petition, to wit:
On June 28, 2004, the Court directed the consolidation of the three (3) petitions.
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
DISMISSED and Administrative Order No. 119 as well [as] the Resolution
G.R. No. 155831
of the Office of the President in O.P. Case No. 00-E-9118 dated May 24,
2000 are AFFIRMED IN TOTO. No cost.
Domingo assails the CA’s resolution modifying the penalty imposed by the Office of
the President. She raises this issue:
SO ORDERED.15

The Court of Appeals erred in modifying the penalty for the respondent
Rayala timely filed a Motion for Reconsideration. Justices Vasquez and Tolentino
from dismissal to suspension from service for the maximum period of one
voted to affirm the December 14 Decision. However, Justice Reyes dissented
year. The President has the prerogative to determine the proper penalty
mainly because AO 250 states that the penalty imposable is suspension for six (6)
to be imposed on an erring Presidential appointee. The President was
months and one (1) day.16 Pursuant to the internal rules of the CA, a Special
well within his power when he fittingly used that prerogative in deciding
Division of Five was constituted.17 In its October 18, 2002 Resolution, the CA
to dismiss the respondent from the service.21
modified its earlier Decision:

She argues that the power to remove Rayala, a presidential appointee, is lodged
ACCORDINGLY, the Decision dated December [14], 2001 is MODIFIED to
with the President who has control of the entire Executive Department, its bureaus
the effect that the penalty of dismissal is DELETED and instead the
and offices. The OP’s decision was arrived at after affording Rayala due process.
penalty of suspension from service for the maximum period of one (1)
Hence, his dismissal from the service is a prerogative that is entirely with the
year is HEREBY IMPOSED upon the petitioner. The rest of the challenged
President.22
decision stands.

SO ORDERED.
Domingo filed a Petition for Review18 before this Court, which we denied in our
February 19, 2003 Resolution for having a defective verification. She filed a Motion
for Reconsideration, which the Court granted; hence, the petition was reinstated.
Rayala likewise filed a Petition for Review19 with this Court essentially arguing that
he is not guilty of any act of sexual harassment.
As to the applicability of AO No. 250, she argues that the same was not intended to
cover cases against presidential appointees. AO No. 250 refers only to the instances
wherein the DOLE Secretary is the disciplining authority, and thus, the AO does not
circumscribe the power of the President to dismiss an erring presidential
appointee.
G.R. No. 155840
In his petition, Rayala raises the following issues:

Meanwhile, the Republic filed a Motion for Reconsideration of the CA’s October 18,
I. CONTRARY TO THE FINDINGS OF THE COURT OF APPEALS, THE ACTS
2002 Resolution. The CA denied the same in its June 3, 2003 Resolution, the
OF HEREIN PETITIONER DO NOT CONSTITUTE SEXUAL HARASSMENT AS
dispositive portion of which reads:
 LAID DOWN BY THE En Banc RULING IN THE CASE OF AQUINO vs.
ACOSTA, ibid., AS WELL AS IN THE APPLICATION OF EXISTING LAWS.
II. CONTRARY TO THE FINDINGS OF THE HONORABLE COURT OF
APPEALS, INTENT IS AN INDISPENSABLE ELEMENT IN A CASE FOR
SEXUAL HARASSMENT. THE HONORABLE COURT ERRED IN ITS FINDING
THAT IT IS AN OFFENSE THAT IS MALUM PROHIBITUM.
III. THE INVESTIGATION COMMITTEE, THE OFFICE OF THE PRESIDENT,
AND NOW, THE HONORABLE COURT OF APPEALS, HAS MISAPPLIED AND
EXPANDED THE DEFINITION OF SEXUAL HARASSMENT IN THE
WORKPLACE UNDER R.A. No. 7877, BY APPLYING DOLE A.O. 250, WHICH
RUNS COUNTER TO THE RECENT PRONOUNCEMENTS OF THIS
HONORABLE SUPREME COURT.23
Invoking Aquino v. Acosta,24 Rayala argues that the case is the definitive ruling on
what constitutes sexual harassment. Thus, he posits that for sexual harassment to
exist under RA 7877, there must be: (a) demand, request, or requirement of a
sexual favor; (b) the same is made a pre-condition to hiring, re-employment, or
continued employment; or (c) the denial thereof results in discrimination against
the employee.
Rayala asserts that Domingo has failed to allege and establish any sexual favor,
demand, or request from petitioner in exchange for her continued employment or
for her promotion. According to Rayala, the acts imputed to him are without malice
or ulterior motive. It was merely Domingo’s perception of malice in his alleged acts
– a "product of her own imagination"25 – that led her to file the sexual harassment
complaint.
Likewise, Rayala assails the OP’s interpretation, as upheld by the CA, that RA 7877
is malum prohibitum such that the defense of absence of malice is unavailing. He
argues that sexual harassment is considered an offense against a particular person,
not against society as a whole. Thus, he claims that intent is an essential element of
the offense because the law requires as a conditio sine qua non that a sexual favor
be first sought by the offender in order to achieve certain specific results. Sexual
harassment is committed with the perpetrator’s deliberate intent to commit the
offense.26
Rayala next argues that AO 250 expands the acts proscribed in RA 7877. In
particular, he assails the definition of the forms of sexual harassment:
Rule IV
FORMS OF SEXUAL HARASSMENT
Section 1. Forms of Sexual Harassment. – Sexual harassment may be
committed in any of the following forms:
a) Overt sexual advances;
b) Unwelcome or improper gestures of affection;
c) Request or demand for sexual favors including but not limited to going
out on dates, outings or the like for the same purpose;
d) Any other act or conduct of a sexual nature or for purposes of sexual
gratification which is generally annoying, disgusting or offensive to the
victim.27
He posits that these acts alone without corresponding demand, request, or
requirement do not constitute sexual harassment as contemplated by the law.28 He
alleges that the rule-making power granted to the employer in Section 4(a) of RA
7877 is limited only to procedural matters. The law did not delegate to the
employer the power to promulgate rules which would provide other or additional
forms of sexual harassment, or to come up with its own definition of sexual
harassment.29
G.R. No. 158700
The Republic raises this issue:
Whether or not the President of the Philippines may validly dismiss
respondent Rayala as Chairman of the NLRC for committing acts of
sexual harassment.30
The Republic argues that Rayala’s acts constitute sexual harassment under AO 250.
His acts constitute unwelcome or improper gestures of affection and are acts or
conduct of a sexual nature, which are generally annoying or offensive to the
victim.31
It also contends that there is no legal basis for the CA’s reduction of the penalty
imposed by the OP. Rayala’s dismissal is valid and warranted under the
circumstances. The power to remove the NLRC Chairman solely rests upon the
President, limited only by the requirements under the law and the due process
clause.
The Republic further claims that, although AO 250 provides only a one (1) year
suspension, it will not prevent the OP from validly imposing the penalty of dismissal
on Rayala. It argues that even though Rayala is a presidential appointee, he is still
subject to the Civil Service Law. Under the Civil Service Law, disgraceful and
immoral conduct, the acts imputed to Rayala, constitute grave misconduct
punishable by dismissal from the service.32 The Republic adds that Rayala’s position
is invested with public trust and his acts violated that trust; thus, he should be
dismissed from the service.
This argument, according to the Republic, is also supported by Article 215 of the
Labor Code, which states that the Chairman of the NLRC holds office until he
reaches the age of 65 only during good behavior.33 Since Rayala’s security of tenure
is conditioned upon his good behavior, he may be removed from office if it is
proven that he has failed to live up to this standard.
All the issues raised in these three cases can be summed up in two ultimate
questions, namely:
(1) Did Rayala commit sexual harassment?
(2) If he did, what is the applicable penalty?
Initially, however, we must resolve a procedural issue raised by Rayala. He accuses
the Office of the Solicitor General (OSG), as counsel for the Republic, of forum
shopping because it filed a motion for reconsideration of the decision in CA-G.R. SP
No. 61026 and then filed a comment in G.R. No. 155840 before this Court.
We do not agree.
Forum shopping is an act of a party, against whom an adverse judgment or order
has been rendered in one forum, of seeking and possibly securing a favorable
opinion in another forum, other than by appeal or special civil action
for certiorari.34 It consists of filing multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of
obtaining a favorable judgment.35
There is forum shopping when the following elements concur: (1) identity of the
parties or, at least, of the parties who represent the same interest in both actions;
(2) identity of the rights asserted and relief prayed for, as the latter is founded on
the same set of facts; and (3) identity of the two preceding particulars such that
any judgment rendered in the other action will amount to res judicata in the action
under consideration or will constitute litis pendentia.36
Reviewing the antecedents of these consolidated cases, we note that the CA
rendered the assailed Resolution on October 18, 2002. The Republic filed its
Motion for Reconsideration on November 22, 2002. On the other hand, Rayala filed
his petition before this Court on November 21, 2002. While the Republic’s Motion
for Reconsideration was pending resolution before the CA, on December 2, 2002, it
was directed by this Court to file its Comment on Rayala’s petition, which it
submitted on June 16, 2003.
When the CA denied the Motion for Reconsideration, the Republic filed its own
Petition for Review with this Court on July 3, 2003. It cited in its "Certification and
Verification of a Non-Forum Shopping" (sic), that there was a case involving the
same facts pending before this Court denominated as G.R. No. 155840. With
respect to Domingo’s petition, the same had already been dismissed on February
19, 2003. Domingo’s petition was reinstated on June 16, 2003 but the resolution
was received by the OSG only on July 25, 2003, or after it had filed its own
petition.37
Based on the foregoing, it cannot be said that the OSG is guilty of forum shopping.
We must point out that it was Rayala who filed the petition in the CA, with the
Republic as the adverse party. Rayala himself filed a motion for reconsideration of
the CA’s December 21, 2001 Decision, which led to a more favorable ruling, i.e., the
lowering of the penalty from dismissal to one-year suspension. The parties
adversely affected by this ruling (Domingo and the Republic) had the right to
question the same on motion for reconsideration. But Domingo directly filed a
Petition for Review with this Court, as did Rayala. When the Republic opted to file a
motion for reconsideration, it was merely exercising a right. That Rayala and
Domingo had by then already filed cases before the SC did not take away this right.
Thus, when this Court directed the Republic to file its Comment on Rayala’s
petition, it had to comply, even if it had an unresolved motion for reconsideration
with the CA, lest it be cited for contempt.
Accordingly, it cannot be said that the OSG "file[d] multiple suits involving the same
parties for the same cause of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment."
We now proceed to discuss the substantive issues.
It is noteworthy that the five CA Justices who deliberated on the case were
unanimous in upholding the findings of the Committee and the OP. They found the
assessment made by the Committee and the OP to be a "meticulous and
dispassionate analysis of the testimonies of the complainant (Domingo), the
respondent (Rayala), and their respective witnesses." 38 They differed only on the
appropriate imposable penalty.
That Rayala committed the acts complained of – and was guilty of sexual
harassment – is, therefore, the common factual finding of not just one, but three
independent bodies: the Committee, the OP and the CA. It should be remembered
that when supported by substantial evidence, factual findings made by quasi-
judicial and administrative bodies are accorded great respect and even finality by
the courts.39 The principle, therefore, dictates that such findings should bind us.40
Indeed, we find no reason to deviate from this rule. There appears no valid ground
for this Court to review the factual findings of the CA, the OP, and the Investigating
Committee. These findings are now conclusive on the Court. And quite significantly,
Rayala himself admits to having committed some of the acts imputed to him.
He insists, however, that these acts do not constitute sexual harassment, because
Domingo did not allege in her complaint that there was a demand, request, or
requirement of a sexual favor as a condition for her continued employment or for
her promotion to a higher position.41 Rayala urges us to apply to his case our ruling
in Aquino v. Acosta.42
We find respondent’s insistence unconvincing.
Basic in the law of public officers is the three-fold liability rule, which states that the
wrongful acts or omissions of a public officer may give rise to civil, criminal and
administrative liability. An action for each can proceed independently of the
others.43 This rule applies with full force to sexual harassment.
The law penalizing sexual harassment in our jurisdiction is RA 7877. Section 3
thereof defines work-related sexual harassment in this wise:
Sec. 3. Work, Education or Training-related Sexual Harassment Defined. –
Work, education or training-related sexual harassment is committed by
an employer, manager, supervisor, agent of the employer, teacher,
instructor, professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a work or
training or education environment, demands, requests or otherwise
requires any sexual favor from the other, regardless of whether the
demand, request or requirement for submission is accepted by the object
of said Act.
(a) In a work-related or employment environment, sexual harassment is
committed when:
(1) The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation, terms,
conditions, promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the employee which in
a way would discriminate, deprive or diminish employment opportunities
or otherwise adversely affect said employee;
(2) The above acts would impair the employee’s rights or privileges under
existing labor laws; or
(3) The above acts would result in an intimidating, hostile, or offensive
environment for the employee.
This section, in relation to Section 7 on penalties, defines the criminal aspect of the
unlawful act of sexual harassment. The same section, in relation to Section 6,
authorizes the institution of an independent civil action for damages and other
affirmative relief.
Section 4, also in relation to Section 3, governs the procedure for administrative
cases, viz.:
Sec. 4. Duty of the Employer or Head of Office in a Work-related,
Education or Training Environment. – It shall be the duty of the employer
or the head of the work-related, educational or training environment or
institution, to prevent or deter the commission of acts of sexual
harassment and to provide the procedures for the resolution, settlement
or prosecution of acts of sexual harassment. Towards this end, the
employer or head of office shall:
(a) Promulgate appropriate rules and regulations in
consultation with and jointly approved by the employees or
students or trainees, through their duly designated
representatives, prescribing the procedure for the investigation
or sexual harassment cases and the administrative sanctions
therefor.
Administrative sanctions shall not be a bar to prosecution in the
proper courts for unlawful acts of sexual harassment.
The said rules and regulations issued pursuant to this section
(a) shall include, among others, guidelines on proper decorum
in the workplace and educational or training institutions.
(b) Create a committee on decorum and investigation of cases
on sexual harassment. The committee shall conduct meetings,
as the case may be, with other officers and employees,
teachers, instructors, professors, coaches, trainors and students
or trainees to increase understanding and prevent incidents of
sexual harassment. It shall also conduct the investigation of the
alleged cases constituting sexual harassment.
In the case of a work-related environment, the committee shall be
composed of at least one (1) representative each from the management,
the union, if any, the employees from the supervisory rank, and from the
rank and file employees.
In the case of the educational or training institution, the committee shall
be composed of at least one (1) representative from the administration,
the trainors, teachers, instructors, professors or coaches and students or
trainees, as the case maybe.
The employer or head of office, educational or training institution shall
disseminate or post a copy of this Act for the information of all
concerned.
The CA, thus, correctly ruled that Rayala’s culpability is not to be determined solely
on the basis of Section 3, RA 7877, because he is charged with the administrative
offense, not the criminal infraction, of sexual harassment.44 It should be enough
that the CA, along with the Investigating Committee and the Office of the
President, found substantial evidence to support the administrative charge.
Yet, even if we were to test Rayala’s acts strictly by the standards set in Section 3,
RA 7877, he would still be administratively liable. It is true that this provision calls
for a "demand, request or requirement of a sexual favor." But it is not necessary
that the demand, request or requirement of a sexual favor be articulated in a
categorical oral or written statement. It may be discerned, with equal certitude,
from the acts of the offender. Holding and squeezing Domingo’s shoulders, running
his fingers across her neck and tickling her ear, having inappropriate conversations
with her, giving her money allegedly for school expenses with a promise of future
privileges, and making statements with unmistakable sexual overtones – all these
acts of Rayala resound with deafening clarity the unspoken request for a sexual
favor.
Likewise, contrary to Rayala’s claim, it is not essential that the demand, request or
requirement be made as a condition for continued employment or for promotion
to a higher position. It is enough that the respondent’s acts result in creating an
intimidating, hostile or offensive environment for the employee.45 That the acts of
Rayala generated an intimidating and hostile environment for Domingo is clearly
shown by the common factual finding of the Investigating Committee, the OP and
the CA that Domingo reported the matter to an officemate and, after the last
incident, filed for a leave of absence and requested transfer to another unit.
Rayala’s invocation of Aquino v. Acosta46 is misplaced, because the factual setting
in that case is different from that in the case at bench. In Aquino, Atty. Susan
Aquino, Chief of the Legal and Technical Staff of the Court of Tax Appeals (CTA),
charged then CTA Presiding Judge (now Presiding Justice) Ernesto Acosta of sexual
harassment. She complained of several incidents when Judge Acosta allegedly
kissed her, embraced her, and put his arm around her shoulder. The case was
referred to CA Justice Josefina G. Salonga for investigation. In her report, Justice
Salonga found that "the complainant failed to show by convincing evidence that
the acts of Judge Acosta in greeting her with a kiss on the cheek, in a `beso-beso’
fashion, were carried out with lustful and lascivious desires or were motivated by
malice or ill motive. It is clear from the circumstances that most of the kissing
incidents were done on festive and special occasions," and they "took place in the
presence of other people and the same was by reason of the exaltation or
happiness of the moment." Thus, Justice Salonga concluded:
 In all the incidents complained of, the respondent's pecks on the cheeks
of the complainant should be understood in the context of having been
done on the occasion of some festivities, and not the assertion of the
latter that she was singled out by Judge Acosta in his kissing escapades.
The busses on her cheeks were simply friendly and innocent, bereft of
malice and lewd design. The fact that respondent judge kisses other
people on the cheeks in the 'beso-beso' fashion, without malice, was
corroborated by Atty. Florecita P. Flores, Ms. Josephine Adalem and Ms.
Ma. Fides Balili, who stated that they usually practice 'beso-beso' or
kissing on the cheeks, as a form of greeting on occasions when they meet
each other, like birthdays, Christmas, New Year's Day and even
Valentine's Day, and it does not matter whether it is Judge Acosta's
birthday or their birthdays. Theresa Cinco Bactat, a lawyer who belongs
to complainant's department, further attested that on occasions like
birthdays, respondent judge would likewise greet her with a peck on the
cheek in a 'beso-beso' manner. Interestingly, in one of several festive
occasions, female employees of the CTA pecked respondent judge on the
cheek where Atty. Aquino was one of Judge Acosta's well wishers.
In sum, no sexual harassment had indeed transpired on those six
occasions. Judge Acosta's acts of bussing Atty. Aquino on her cheek were
merely forms of greetings, casual and customary in nature. No evidence
of intent to sexually harass complainant was apparent, only that the
innocent acts of 'beso-beso' were given malicious connotations by the
complainant. In fact, she did not even relate to anyone what happened to
her. Undeniably, there is no manifest sexual undertone in all those
incidents.47
This Court agreed with Justice Salonga, and Judge Acosta was exonerated.
To repeat, this factual milieu in Aquino does not obtain in the case at bench. While
in Aquino, the Court interpreted the acts (of Judge Acosta) as casual gestures of
friendship and camaraderie, done during festive or special occasions and with other
people present, in the instant case, Rayala’s acts of holding and squeezing
Domingo’s shoulders, running his fingers across her neck and tickling her ear, and
the inappropriate comments, were all made in the confines of Rayala’s office when
no other members of his staff were around. More importantly, and a circumstance
absent in Aquino, Rayala’s acts, as already adverted to above, produced a hostile
work environment for Domingo, as shown by her having reported the matter to an
officemate and, after the last incident, filing for a leave of absence and requesting
transfer to another unit.
Rayala also argues that AO 250 does not apply to him. First, he argues that AO 250
does not cover the NLRC, which, at the time of the incident, was under the DOLE
only for purposes of program and policy coordination. Second, he posits that even
assuming AO 250 is applicable to the NLRC, he is not within its coverage because he
is a presidential appointee.
We find, however, that the question of whether or not AO 250 covers Rayala is of
no real consequence. The events of this case unmistakably show that the
administrative charges against Rayala were for violation of RA 7877; that the OP
properly assumed jurisdiction over the administrative case; that the participation of
the DOLE, through the Committee created by the Secretary, was limited to
initiating the investigation process, reception of evidence of the parties,
preparation of the investigation report, and recommending the appropriate action
to be taken by the OP. AO 250 had never really been applied to Rayala. If it was
used at all, it was to serve merely as an auxiliary procedural guide to aid the
Committee in the orderly conduct of the investigation.
Next, Rayala alleges that the CA erred in holding that sexual harassment is an
offense malum prohibitum. He argues that intent is an essential element in sexual
harassment, and since the acts imputed to him were done allegedly without malice,
he should be absolved of the charges against him.
We reiterate that what is before us is an administrative case for sexual harassment.
Thus, whether the crime of sexual harassment is malum in se or malum
prohibitum is immaterial.
We also reject Rayala’s allegations that the charges were filed because of a
conspiracy to get him out of office and thus constitute merely political harassment.
A conspiracy must be proved by clear and convincing evidence. His bare assertions
cannot stand against the evidence presented by Domingo. As we have already
ruled, the acts imputed to Rayala have been proven as fact. Moreover, he has not
proven any ill motive on the part of Domingo and her witnesses which would be
ample reason for her to conjure stories about him. On the contrary, ill motive is
belied by the fact that Domingo and her witnesses – all employees of the NLRC at
that time – stood to lose their jobs or suffer unpleasant consequences for coming
forward and charging their boss with sexual harassment.
Furthermore, Rayala decries the alleged violation of his right to due process. He
accuses the Committee on Decorum of railroading his trial for violation of RA 7877.
He also scored the OP’s decision finding him guilty of "disgraceful and immoral
conduct" under the Revised Administrative Code and not for violation of RA 7877.
Considering that he was not tried for "disgraceful and immoral conduct," he argues
that the verdict is a "sham and total nullity."
We hold that Rayala was properly accorded due process. In previous cases, this
Court held that:
[i]n administrative proceedings, due process has been recognized to
include the following: (1) the right to actual or constructive notice of the
institution of proceedings which may affect a respondent’s legal rights;
(2) a real opportunity to be heard personally or with the assistance of
counsel, to present witnesses and evidence in one’s favor, and to defend
one’s rights; (3) a tribunal vested with competent jurisdiction and so
constituted as to afford a person charged administratively a reasonable
guarantee of honesty as well as impartiality; and (4) a finding by said
tribunal which is supported by substantial evidence submitted for
consideration during the hearing or contained in the records or made
known to the parties affected.48
The records of the case indicate that Rayala was afforded all these procedural due
process safeguards. Although in the beginning he questioned the authority of the
Committee to try him,49 he appeared, personally and with counsel, and
participated in the proceedings.
On the other point raised, this Court has held that, even in criminal cases, the
designation of the offense is not controlling, thus:
What is controlling is not the title of the complaint, nor the designation of
the offense charged or the particular law or part thereof allegedly
violated, these being mere conclusions of law made by the prosecutor,
but the description of the crime charged and the particular facts therein
recited. The acts or omissions complained of must be alleged in such
form as is sufficient to enable a person of common understanding to
know what offense is intended to be charged, and enable the court to
pronounce proper judgment. No information for a crime will be sufficient
if it does not accurately and clearly allege the elements of the crime
charged. Every element of the offense must be stated in the information.
What facts and circumstances are necessary to be included therein must
be determined by reference to the definitions and essentials of the
specified crimes. The requirement of alleging the elements of a crime in
the information is to inform the accused of the nature of the accusation
against him so as to enable him to suitably prepare his defense.50
It is noteworthy that under AO 250, sexual harassment amounts to disgraceful and
immoral conduct.51 Thus, any finding of liability for sexual harassment may also be
the basis of culpability for disgraceful and immoral conduct.
With the foregoing disquisitions affirming the finding that Rayala committed sexual
harassment, we now determine the proper penalty to be imposed.
Rayala attacks the penalty imposed by the OP. He alleges that under the pertinent
Civil Service Rules, disgraceful and immoral conduct is punishable by suspension for
a period of six (6) months and one (1) day to one (1) year. He also argues that since
he is charged administratively, aggravating or mitigating circumstances cannot be
appreciated for purposes of imposing the penalty.
Under AO 250, the penalty for the first offense is suspension for six (6) months and
one (1) day to one (1) year, while the penalty for the second offense is
dismissal.52 On the other hand, Section 22(o), Rule XVI of the Omnibus Rules
Implementing Book V of the Administrative Code of 198753 and Section 52 A(15) of
the Revised Uniform Rules on Administrative Cases in the Civil Service54 both
provide that the first offense of disgraceful and immoral conduct is punishable by
suspension of six (6) months and one (1) day to one (1) year. A second offense is
punishable by dismissal.
Under the Labor Code, the Chairman of the NLRC shall hold office during good
behavior until he or she reaches the age of sixty-five, unless sooner removed for
cause as provided by law or becomes incapacitated to discharge the duties of the
office.55
In this case, it is the President of the Philippines, as the proper disciplining
authority, who would determine whether there is a valid cause for the removal of
Rayala as NLRC Chairman. This power, however, is qualified by the phrase "for
cause as provided by law." Thus, when the President found that Rayala was indeed
guilty of disgraceful and immoral conduct, the Chief Executive did not have
unfettered discretion to impose a penalty other than the penalty provided by law
for such offense. As cited above, the imposable penalty for the first offense of
either the administrative offense of sexual harassment or for disgraceful and
immoral conduct is suspension of six (6) months and one (1) day to one (1) year.
Accordingly, it was error for the Office of the President to impose upon Rayala the
penalty of dismissal from the service, a penalty which can only be imposed upon
commission of a second offense.
Even if the OP properly considered the fact that Rayala took advantage of his high
government position, it still could not validly dismiss him from the service. Under
the Revised Uniform Rules on Administrative Cases in the Civil Service,56 taking
undue advantage of a subordinate may be considered as an aggravating
circumstance57 and where only aggravating and no mitigating circumstances are
present, the maximum penalty shall be imposed.58 Hence, the maximum penalty
that can be imposed on Rayala is suspension for one (1) year.
disposition of the case. It is his character that is in question here and sadly, the
inquiry showed that he has been found wanting.
WHEREFORE, the foregoing premises considered, the October 18, 2002 Resolution
of the Court of Appeals in CA-G.R. SP No. 61026 is AFFIRMED. Consequently, the
petitions in G.R. Nos. 155831, 155840, and 158700 are DENIED. No pronouncement
as to costs.

Rayala holds the exalted position of NLRC Chairman, with the rank equivalent to a SO ORDERED.
CA Justice. Thus, it is not unavailing that rigid standards of conduct may be
demanded of him. In Talens-Dabon v. Judge Arceo,59 this Court, in upholding the
liability of therein respondent Judge, said:

The actuations of respondent are aggravated by the fact that

complainant is one of his subordinates over whom he exercises control
and supervision, he being the executive judge. He took advantage of his
position and power in order to carry out his lustful and lascivious desires.
Instead of he being in loco parentis over his subordinate employees,
respondent was the one who preyed on them, taking advantage of his
superior position.

In yet another case, this Court declared:

As a managerial employee, petitioner is bound by more exacting work

ethics. He failed to live up to his higher standard of responsibility when
he succumbed to his moral perversity. And when such moral perversity is
perpetrated against his subordinate, he provides a justifiable ground for
his dismissal for lack of trust and confidence. It is the right, nay, the duty
of every employer to protect its employees from oversexed superiors.60

It is incumbent upon the head of office to set an example on how his employees
should conduct themselves in public office, so that they may work efficiently in a
healthy working atmosphere. Courtesy demands that he should set a good
example.61

Rayala has thrown every argument in the book in a vain effort to effect his
exoneration. He even puts Domingo’s character in question and casts doubt on the
morality of the former President who ordered, albeit erroneously, his dismissal
from the service. Unfortunately for him, these are not significant factors in the
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 162994 September 17, 2004
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
RESOLUTION
TINGA, J.:
Confronting the Court in this petition is a novel question, with constitutional
overtones, involving the validity of the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any competitor company.
This is a Petition for Review on Certiorari assailing the Decision1 dated May 19, 2003
and the Resolution dated March 26, 2004 of the Court of Appeals in CA-G.R. SP No.
62434.2
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome
Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after
Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or affinity with
co-employees or employees of competing drug companies and should
management find that such relationship poses a possible conflict of interest, to
resign from the company.
The Employee Code of Conduct of Glaxo similarly provides that an employee is
expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug
companies. If management perceives a conflict of interest or a potential conflict
between such relationship and the employee’s employment with the company, the
management and the employee will explore the possibility of a "transfer to another
department in a non-counterchecking position" or preparation for employment
outside the company after six months.
Tecson was initially assigned to market Glaxo’s products in the Camarines Sur-
Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals3 (Astra), a competitor of Glaxo. Bettsy was
Astra’s Branch Coordinator in Albay. She supervised the district managers and
medical representatives of her company and prepared marketing strategies for
Astra in that area.
Even before they got married, Tecson received several reminders from his District
Manager regarding the conflict of interest which his relationship with Bettsy might
engender. Still, love prevailed, and Tecson married Bettsy in September 1998.
In January 1999, Tecson’s superiors informed him that his marriage to Bettsy gave
rise to a conflict of interest. Tecson’s superiors reminded him that he and Bettsy
should decide which one of them would resign from their jobs, although they told
him that they wanted to retain him as much as possible because he was performing
his job well.
Tecson requested for time to comply with the company policy against entering into
a relationship with an employee of a competitor company. He explained that Astra,
Bettsy’s employer, was planning to merge with Zeneca, another drug company; and
Bettsy was planning to avail of the redundancy package to be offered by Astra.
With Bettsy’s separation from her company, the potential conflict of interest would
be eliminated. At the same time, they would be able to avail of the attractive
redundancy package from Astra.
In August 1999, Tecson again requested for more time resolve the problem. In
September 1999, Tecson applied for a transfer in Glaxo’s milk division, thinking that
since Astra did not have a milk division, the potential conflict of interest would be
eliminated. His application was denied in view of Glaxo’s "least-movement-
possible" policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-
Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his
request was denied.
Tecson sought Glaxo’s reconsideration regarding his transfer and brought the
matter to Glaxo’s Grievance Committee. Glaxo, however, remained firm in its
decision and gave Tescon until February 7, 2000 to comply with the transfer order.
Tecson defied the transfer order and continued acting as medical representative in
the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his salary, but
was not issued samples of products which were competing with similar products
manufactured by Astra. He was also not included in product conferences regarding
such products.
Because the parties failed to resolve the issue at the grievance machinery level,
they submitted the matter for voluntary arbitration. Glaxo offered Tecson a
separation pay of one-half (½) month pay for every year of service, or a total of
₱50,000.00 but he declined the offer. On November 15, 2000, the National
Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid
Glaxo’s policy on relationships between its employees and persons employed with
competitor companies, and affirming Glaxo’s right to transfer Tecson to another
sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing the
NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying
the Petition for Review on the ground that the NCMB did not err in rendering
its Decision. The appellate court held that Glaxo’s policy prohibiting its employees
from having personal relationships with employees of competitor companies is a
valid exercise of its management prerogatives.4
Tecson filed a Motion for Reconsideration of the appellate court’s Decision, but the
motion was denied by the appellate court in its Resolution dated March 26, 2004.5
Petitioners filed the instant petition, arguing therein that (i) the Court of Appeals
erred in affirming the NCMB’s finding that the Glaxo’s policy prohibiting its
employees from marrying an employee of a competitor company is valid; and (ii)
the Court of Appeals also erred in not finding that Tecson was constructively
dismissed when he was transferred to a new sales territory, and deprived of the
opportunity to attend products seminars and training sessions. 6
Petitioners contend that Glaxo’s policy against employees marrying employees of
competitor companies violates the equal protection clause of the Constitution
because it creates invalid distinctions among employees on account only of
marriage. They claim that the policy restricts the employees’ right to marry.7
They also argue that Tecson was constructively dismissed as shown by the
following circumstances: (1) he was transferred from the Camarines Sur-Camarines
Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he suffered a
diminution in pay, (3) he was excluded from attending seminars and training
sessions for medical representatives, and (4) he was prohibited from promoting
respondent’s products which were competing with Astra’s products.8
In its Comment on the petition, Glaxo argues that the company policy prohibiting
its employees from having a relationship with and/or marrying an employee of a
competitor company is a valid exercise of its management prerogatives and does
not violate the equal protection clause; and that Tecson’s reassignment from the
Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City and
Agusan del Sur sales area does not amount to constructive dismissal.9
Glaxo insists that as a company engaged in the promotion and sale of
pharmaceutical products, it has a genuine interest in ensuring that its employees
avoid any activity, relationship or interest that may conflict with their
responsibilities to the company. Thus, it expects its employees to avoid having
personal or family interests in any competitor company which may influence their
actions and decisions and consequently deprive Glaxo of legitimate profits. The
policy is also aimed at preventing a competitor company from gaining access to its
secrets, procedures and policies.10
It likewise asserts that the policy does not prohibit marriage per se but only
proscribes existing or future relationships with employees of competitor
companies, and is therefore not violative of the equal protection clause. It
maintains that considering the nature of its business, the prohibition is based on
valid grounds.11
According to Glaxo, Tecson’s marriage to Bettsy, an employee of Astra, posed a real
and potential conflict of interest. Astra’s products were in direct competition with
67% of the products sold by Glaxo. Hence, Glaxo’s enforcement of the foregoing
policy in Tecson’s case was a valid exercise of its management prerogatives.12 In
any case, Tecson was given several months to remedy the situation, and was even
encouraged not to resign but to ask his wife to resign form Astra instead.13
Glaxo also points out that Tecson can no longer question the assailed company
policy because when he signed his contract of employment, he was aware that
such policy was stipulated therein. In said contract, he also agreed to resign from
respondent if the management finds that his relationship with an employee of a
competitor company would be detrimental to the interests of Glaxo.14
Glaxo likewise insists that Tecson’s reassignment to another sales area and his
exclusion from seminars regarding respondent’s new products did not amount to
constructive dismissal.
It claims that in view of Tecson’s refusal to resign, he was relocated from the
Camarines Sur-Camarines Norte sales area to the Butuan City-Surigao City and
Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it also
considered the welfare of Tecson’s family. Since Tecson’s hometown was in Agusan
del Sur and his wife traces her roots to Butuan City, Glaxo assumed that his transfer
from the Bicol region to the Butuan City sales area would be favorable to him and
his family as he would be relocating to a familiar territory and minimizing his travel
expenses.15
In addition, Glaxo avers that Tecson’s exclusion from the seminar concerning the
new anti-asthma drug was due to the fact that said product was in direct
competition with a drug which was soon to be sold by Astra, and hence, would
pose a potential conflict of interest for him. Lastly, the delay in Tecson’s receipt of
his sales paraphernalia was due to the mix-up created by his refusal to transfer to
the Butuan City sales area (his paraphernalia was delivered to his new sales area
instead of Naga City because the supplier thought he already transferred to
Butuan).16
The Court is tasked to resolve the following issues: (1) Whether the Court of
Appeals erred in ruling that Glaxo’s policy against its employees marrying
employees from competitor companies is valid, and in not holding that said policy
violates the equal protection clause of the Constitution; (2) Whether Tecson was
constructively dismissed.
The Court finds no merit in the petition.
The stipulation in Tecson’s contract of employment with Glaxo being questioned by
petitioners provides:
…
10. You agree to disclose to management any existing or future
relationship you may have, either by consanguinity or affinity with co-
employees or employees of competing drug companies. Should it pose a
possible conflict of interest in management discretion, you agree to
resign voluntarily from the Company as a matter of Company policy.
…17
The same contract also stipulates that Tescon agrees to abide by the existing
company rules of Glaxo, and to study and become acquainted with such
policies.18 In this regard, the Employee Handbook of Glaxo expressly informs its
employees of its rules regarding conflict of interest:
1. Conflict of Interest
Employees should avoid any activity, investment relationship, or interest
that may run counter to the responsibilities which they owe Glaxo
Wellcome.
Specifically, this means that employees are expected:
a. To avoid having personal or family interest, financial or
otherwise, in any competitor supplier or other businesses
which may consciously or unconsciously influence their actions
or decisions and thus deprive Glaxo Wellcome of legitimate
profit.
b. To refrain from using their position in Glaxo Wellcome or
knowledge of Company plans to advance their outside personal
interests, that of their relatives, friends and other businesses.
c. To avoid outside employment or other interests for income
which would impair their effective job performance.
 d. To consult with Management on such activities or
relationships that may lead to conflict of interest.
1.1. Employee Relationships
Employees with existing or future relationships either by consanguinity or
affinity with co-employees of competing drug companies are expected to
disclose such relationship to the Management. If management perceives
a conflict or potential conflict of interest, every effort shall be made,
together by management and the employee, to arrive at a solution within
six (6) months, either by transfer to another department in a non-counter
checking position, or by career preparation toward outside employment
after Glaxo Wellcome. Employees must be prepared for possible
resignation within six (6) months, if no other solution is feasible. 19
No reversible error can be ascribed to the Court of Appeals when it ruled that
Glaxo’s policy prohibiting an employee from having a relationship with an
employee of a competitor company is a valid exercise of management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors,
especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees of
competitor companies upon Glaxo’s employees is reasonable under the
circumstances because relationships of that nature might compromise the interests
of the company. In laying down the assailed company policy, Glaxo only aims to
protect its interests against the possibility that a competitor company will gain
access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be denied.
No less than the Constitution recognizes the right of enterprises to adopt and
enforce such a policy to protect its right to reasonable returns on investments and
to expansion and growth.20 Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it does not mean
that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and
enforcement in the interest of fair play.21
As held in a Georgia, U.S.A case,22 it is a legitimate business practice to guard
business confidentiality and protect a competitive position by even-handedly
disqualifying from jobs male and female applicants or employees who are married
to a competitor. Consequently, the court ruled than an employer that discharged
an employee who was married to an employee of an active competitor did not
violate Title VII of the Civil Rights Act of 1964.23 The Court pointed out that the
policy was applied to men and women equally, and noted that the employer’s
business was highly competitive and that gaining inside information would
constitute a competitive advantage.
The challenged company policy does not violate the equal protection clause of the
Constitution as petitioners erroneously suggest. It is a settled principle that the
commands of the equal protection clause are addressed only to the state or those
acting under color of its authority.24 Corollarily, it has been held in a long array of
U.S. Supreme Court decisions that the equal protection clause erects no shield
against merely private conduct, however, discriminatory or wrongful.25 The only
exception occurs when the state29 in any of its manifestations or actions has been
found to have become entwined or involved in the wrongful private
conduct.27 Obviously, however, the exception is not present in this case.
Significantly, the company actually enforced the policy after repeated requests to
the employee to comply with the policy. Indeed, the application of the policy was
made in an impartial and even-handed manner, with due regard for the lot of the
employee.
In any event, from the wordings of the contractual provision and the policy in its
employee handbook, it is clear that Glaxo does not impose an absolute prohibition
against relationships between its employees and those of competitor companies.
Its employees are free to cultivate relationships with and marry persons of their
own choosing. What the company merely seeks to avoid is a conflict of interest
between the employee and the company that may arise out of such relationships.
As succinctly explained by the appellate court, thus:
The policy being questioned is not a policy against marriage. An employee
of the company remains free to marry anyone of his or her choosing. The
policy is not aimed at restricting a personal prerogative that belongs only
to the individual. However, an employee’s personal decision does not
detract the employer from exercising management prerogatives to
ensure maximum profit and business success. . .28
The Court of Appeals also correctly noted that the assailed company policy which
forms part of respondent’s Employee Code of Conduct and of its contracts with its
employees, such as that signed by Tescon, was made known to him prior to his
employment. Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with Bettsy. Since
Tecson knowingly and voluntarily entered into a contract of employment with
Glaxo, the stipulations therein have the force of law between them and, thus,
should be complied with in good faith."29 He is therefore estopped from
questioning said policy.
The Court finds no merit in petitioners’ contention that Tescon was constructively
dismissed when he was transferred from the Camarines Norte-Camarines Sur sales
area to the Butuan City-Surigao City-Agusan del Sur sales area, and when he was
excluded from attending the company’s seminar on new products which were
directly competing with similar products manufactured by Astra. Constructive
dismissal is defined as a quitting, an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable, or unlikely; when there
is a demotion in rank or diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to the
employee.30 None of these conditions are present in the instant case. The record
does not show that Tescon was demoted or unduly discriminated upon by reason
of such transfer. As found by the appellate court, Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area:
. . . In this case, petitioner’s transfer to another place of assignment was
merely in keeping with the policy of the company in avoidance of conflict
of interest, and thus valid…Note that [Tecson’s] wife holds a sensitive
supervisory position as Branch Coordinator in her employer-company
which requires her to work in close coordination with District Managers
and Medical Representatives. Her duties include monitoring sales of Astra
products, conducting sales drives, establishing and furthering relationship
with customers, collection, monitoring and managing Astra’s
inventory…she therefore takes an active participation in the market war
characterized as it is by stiff competition among pharmaceutical
companies. Moreover, and this is significant, petitioner’s sales territory
covers Camarines Sur and Camarines Norte while his wife is supervising a
branch of her employer in Albay. The proximity of their areas of
responsibility, all in the same Bicol Region, renders the conflict of interest
not only possible, but actual, as learning by one spouse of the other’s
market strategies in the region would be inevitable. [Management’s]
appreciation of a conflict of interest is therefore not merely illusory and
wanting in factual basis…31
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations Commission,32 which
involved a complaint filed by a medical representative against his employer drug
company for illegal dismissal for allegedly terminating his employment when he
refused to accept his reassignment to a new area, the Court upheld the right of the
drug company to transfer or reassign its employee in accordance with its
operational demands and requirements. The ruling of the Court therein, quoted
hereunder, also finds application in the instant case:
By the very nature of his employment, a drug salesman or medical
representative is expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a poor drug
corporation which cannot even assign its representatives or detail men to
new markets calling for opening or expansion or to areas where the need
for pushing its products is great. More so if such reassignments are part
of the employment contract.33
As noted earlier, the challenged policy has been implemented by Glaxo impartially
and disinterestedly for a long period of time. In the case at bar, the record shows
that Glaxo gave Tecson several chances to eliminate the conflict of interest brought
about by his relationship with Bettsy. When their relationship was still in its initial
stage, Tecson’s supervisors at Glaxo constantly reminded him about its effects on
his employment with the company and on the company’s interests. After Tecson
married Bettsy, Glaxo gave him time to resolve the conflict by either resigning from
the company or asking his wife to resign from Astra. Glaxo even expressed its
desire to retain Tecson in its employ because of his satisfactory performance and
suggested that he ask Bettsy to resign from her company instead. Glaxo likewise
acceded to his repeated requests for more time to resolve the conflict of interest.
When the problem could not be resolved after several years of waiting, Glaxo was
constrained to reassign Tecson to a sales area different from that handled by his
wife for Astra. Notably, the Court did not terminate Tecson from employment but
only reassigned him to another area where his home province, Agusan del Sur, was
included. In effecting Tecson’s transfer, Glaxo even considered the welfare of
Tecson’s family. Clearly, the foregoing dispels any suspicion of unfairness and bad
faith on the part of Glaxo.34
WHEREFORE, the Petition is DENIED for lack of merit. Costs against petitioners.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 164774 April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN
CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents.
DECISION
PUNO, J.:
We are called to decide an issue of first impression: whether the policy of the
employer banning spouses from working in the same company violates the rights of
the employee under the Constitution and the Labor Code or is a valid exercise of
management prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of Appeals
dated August 3, 2004 in CA-G.R. SP No. 73477 reversing the decision of the National
Labor Relations Commission (NLRC) which affirmed the ruling of the Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in
trading – principally of paper products. Josephine Ongsitco is its Manager of the
Personnel and Administration Department while Sebastian Chua is its Managing
Director.
The evidence for the petitioners show that respondents Ronaldo D. Simbol
(Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular
employees of the company.1
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit,
also an employee of the company, whom he married on June 27, 1998. Prior to the
marriage, Ongsitco advised the couple that should they decide to get married, one
of them should resign pursuant to a company policy promulgated in 1995,2 viz.:
1. New applicants will not be allowed to be hired if in case he/she has [a]
relative, up to [the] 3rd degree of relationship, already employed by the
company.
2. In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course of
their employment and then decided to get married, one of them should
resign to preserve the policy stated above.3
Simbol resigned on June 20, 1998 pursuant to the company policy.4
Comia was hired by the company on February 5, 1997. She met Howard Comia, a
co-employee, whom she married on June 1, 2000. Ongsitco likewise reminded
them that pursuant to company policy, one must resign should they decide to get
married. Comia resigned on June 30, 2000.5
Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a co-
worker. Petitioners stated that Zuñiga, a married man, got Estrella pregnant. The
company allegedly could have terminated her services due to immorality but she
opted to resign on December 21, 1999.6
The respondents each signed a Release and Confirmation Agreement. They stated
therein that they have no money and property accountabilities in the company and
that they release the latter of any claim or demand of whatever nature.7
Respondents offer a different version of their dismissal. Simbol and Comia allege
that they did not resign voluntarily; they were compelled to resign in view of an
illegal company policy. As to respondent Estrella, she alleges that she had a
relationship with co-worker Zuñiga who misrepresented himself as a married but
separated man. After he got her pregnant, she discovered that he was not
separated. Thus, she severed her relationship with him to avoid dismissal due to
the company policy. On November 30, 1999, she met an accident and was advised
by the doctor at the Orthopedic Hospital to recuperate for twenty-one (21) days.
She returned to work on December 21, 1999 but she found out that her name was
on-hold at the gate. She was denied entry. She was directed to proceed to the
personnel office where one of the staff handed her a memorandum. The
memorandum stated that she was being dismissed for immoral conduct. She
refused to sign the memorandum because she was on leave for twenty-one (21)
days and has not been given a chance to explain. The management asked her to
write an explanation. However, after submission of the explanation, she was
nonetheless dismissed by the company. Due to her urgent need for money, she
later submitted a letter of resignation in exchange for her thirteenth month pay.8
Respondents later filed a complaint for unfair labor practice, constructive dismissal,
separation pay and attorney’s fees. They averred that the aforementioned
company policy is illegal and contravenes Article 136 of the Labor Code. They also
contended that they were dismissed due to their union membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the
complaint for lack of merit, viz.:
[T]his company policy was decreed pursuant to what the respondent corporation
perceived as management prerogative. This management prerogative is quite
broad and encompassing for it covers hiring, work assignment, working method,
time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of workers.
Except as provided for or limited by special law, an employer is free to regulate,
according to his own discretion and judgment all the aspects of
employment.9 (Citations omitted.)
On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter
on January 11, 2002. 10
Respondents filed a Motion for Reconsideration but was denied by the NLRC in a
Resolution11 dated August 8, 2002. They appealed to respondent court via Petition
for Certiorari.
In its assailed Decision dated August 3, 2004, the Court of Appeals reversed the
NLRC decision, viz.:
WHEREFORE, premises considered, the May 31, 2002 (sic)12 Decision of the
National Labor Relations Commission is hereby REVERSED and SET ASIDE and a new
one is entered as follows:
(1) Declaring illegal, the petitioners’ dismissal from employment and
ordering private respondents to reinstate petitioners to their former
positions without loss of seniority rights with full backwages from the
time of their dismissal until actual reinstatement; and
(2) Ordering private respondents to pay petitioners attorney’s fees
amounting to 10% of the award and the cost of this suit.13
On appeal to this Court, petitioners contend that the Court of Appeals erred in
holding that:
1. x x x the subject 1995 policy/regulation is violative of the constitutional
rights towards marriage and the family of employees and of Article 136 of
the Labor Code; and
2. x x x respondents’ resignations were far from voluntary.14
We affirm.
The 1987 Constitution15 states our policy towards the protection of labor under the
following provisions, viz.:
Article II, Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
xxx
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law.
The State shall promote the principle of shared responsibility between workers and
employers, recognizing the right of labor to its just share in the fruits of production
and the right of enterprises to reasonable returns on investments, and to
expansion and growth.
The Civil Code likewise protects labor with the following provisions:
Art. 1700. The relation between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the
common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.
Art. 1702. 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.
The Labor Code is the most comprehensive piece of legislation protecting labor.
The case at bar involves Article 136 of the Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of her
marriage.
Respondents submit that their dismissal violates the above provision. Petitioners
allege that its policy "may appear to be contrary to Article 136 of the Labor Code"
but it assumes a new meaning if read together with the first paragraph of the rule.
The rule does not require the woman employee to resign. The employee spouses
have the right to choose who between them should resign. Further, they are free to
marry persons other than co-employees. Hence, it is not the marital status of the
employee, per se, that is being discriminated. It is only intended to carry out its no-
employment-for-relatives-within-the-third-degree-policy which is within the ambit
of the prerogatives of management.16
It is true that the policy of petitioners prohibiting close relatives from working in
the same company takes the nature of an anti-nepotism employment policy.
Companies adopt these policies to prevent the hiring of unqualified persons based
on their status as a relative, rather than upon their ability.17 These policies focus
upon the potential employment problems arising from the perception of favoritism
exhibited towards relatives.
With more women entering the workforce, employers are also enacting
employment policies specifically prohibiting spouses from working for the same
company. We note that two types of employment policies involve spouses: policies
banning only spouses from working in the same company (no-spouse employment
policies), and those banning all immediate family members, including spouses,
from working in the same company (anti-nepotism employment policies).18
Unlike in our jurisdiction where there is no express prohibition on marital
discrimination,19 there are twenty state statutes20 in the United States prohibiting
marital discrimination. Some state courts21 have been confronted with the issue of
whether no-spouse policies violate their laws prohibiting both marital status and
sex discrimination.
In challenging the anti-nepotism employment policies in the United States,
complainants utilize two theories of employment discrimination:
the disparate treatment and the disparate impact. Under the disparate treatment
analysis, the plaintiff must prove that an employment policy is discriminatory on its
face. No-spouse employment policies requiring an employee of a particular sex to
either quit, transfer, or be fired are facially discriminatory. For example, an
employment policy prohibiting the employer from hiring wives of male employees,
but not husbands of female employees, is discriminatory on its face.22
On the other hand, to establish disparate impact, the complainants must prove
that a facially neutral policy has a disproportionate effect on a particular class. For
example, although most employment policies do not expressly indicate which
spouse will be required to transfer or leave the company, the policy often
disproportionately affects one sex.23
The state courts’ rulings on the issue depend on their interpretation of the scope of
marital status discrimination within the meaning of their respective civil rights acts.
Though they agree that the term "marital status" encompasses discrimination
based on a person's status as either married, single, divorced, or widowed, they are
divided on whether the term has a broader meaning. Thus, their decisions vary.24
The courts narrowly25 interpreting marital status to refer only to a person's status
as married, single, divorced, or widowed reason that if the legislature intended a
broader definition it would have either chosen different language or specified its
intent. They hold that the relevant inquiry is if one is married rather than to whom
one is married. They construe marital status discrimination to include only whether
a person is single, married, divorced, or widowed and not the "identity, occupation,
and place of employment of one's spouse." These courts have upheld the
questioned policies and ruled that they did not violate the marital status
discrimination provision of their respective state statutes.
The courts that have broadly26 construed the term "marital status" rule that it
encompassed the identity, occupation and employment of one's spouse. They
strike down the no-spouse employment policies based on the broad legislative
intent of the state statute. They reason that the no-spouse employment policy
violate the marital status provision because it arbitrarily discriminates against all
spouses of present employees without regard to the actual effect on the
individual's qualifications or work performance.27 These courts also find the no-
spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses in
the same workplace might adversely affect the business.28 They hold that the
absence of such a bona fide occupational qualification29 invalidates a rule denying
employment to one spouse due to the current employment of the other spouse in
the same office.30 Thus, they rule that unless the employer can prove that the
reasonable demands of the business require a distinction based on marital status
and there is no better available or acceptable policy which would better accomplish
the business purpose, an employer may not discriminate against an employee
based on the identity of the employee’s spouse.31 This is known as the bona fide
occupational qualification exception.
We note that since the finding of a bona fide occupational qualification justifies an
employer’s no-spouse rule, the exception is interpreted strictly and narrowly by
these state courts. There must be a compelling business necessity for which no
alternative exists other than the discriminatory practice.32 To justify a bona fide
occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job
involved; and, (2) that there is a factual basis for believing that all or substantially
all persons meeting the qualification would be unable to properly perform the
duties of the job.33
The concept of a bona fide occupational qualification is not foreign in our
jurisdiction. We employ the standard of reasonableness of the company policy
which is parallel to the bona fide occupational qualification requirement. In the
recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v.
Glaxo Wellcome Philippines, Inc.,34 we passed on the validity of the policy of a
pharmaceutical company prohibiting its employees from marrying employees of
any competitor company. We held that Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing strategies and other confidential programs and
information from competitors. We considered the prohibition against personal or
marital relationships with employees of competitor companies upon Glaxo’s
employees reasonable under the circumstances because relationships of that
nature might compromise the interests of Glaxo. In laying down the assailed
company policy, we recognized that Glaxo only aims to protect its interests against
the possibility that a competitor company will gain access to its secrets and
procedures.35
The requirement that a company policy must be reasonable under the
circumstances to qualify as a valid exercise of management prerogative was also at
issue in the 1997 case of Philippine Telegraph and Telephone Company v.
NLRC.36 In said case, the employee was dismissed in violation of petitioner’s policy
of disqualifying from work any woman worker who contracts marriage. We held
that the company policy violates the right against discrimination afforded all
women workers under Article 136 of the Labor Code, but established a permissible
exception, viz.:
[A] requirement that a woman employee must remain unmarried could be justified
as a "bona fide occupational qualification," or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a general
principle, such as the desirability of spreading work in the workplace. A
requirement of that nature would be valid provided it reflects an inherent
quality reasonably necessary for satisfactory job performance.37 (Emphases
supplied.)
The cases of Duncan and PT&T instruct us that the requirement of reasonableness
must be clearly established to uphold the questioned employment policy. The
employer has the burden to prove the existence of a reasonable business necessity.
The burden was successfully discharged in Duncan but not in PT&T.
We do not find a reasonable business necessity in the case at bar.
Petitioners’ sole contention that "the company did not just want to have two (2) or
more of its employees related between the third degree by affinity and/or
consanguinity"38 is lame. That the second paragraph was meant to give teeth to the
first paragraph of the questioned rule39 is evidently not the valid reasonable
business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they
were found fit for the job, but were asked to resign when they married a co-
employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the Repacking Section,
could be detrimental to its business operations. Neither did petitioners explain how
this detriment will happen in the case of Wilfreda Comia, then a Production Helper
in the Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees married to
each other will be less efficient. If we uphold the questioned rule without valid
justification, the employer can create policies based on an unproven presumption
of a perceived danger at the expense of an employee’s right to security of tenure.
Petitioners contend that their policy will apply only when one employee marries a
co-employee, but they are free to marry persons other than co-employees. The
questioned policy may not facially violate Article 136 of the Labor Code but it
creates a disproportionate effect and under the disparate impact theory, the only
way it could pass judicial scrutiny is a showing that it is reasonable despite the
discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy cannot prejudice the
employee’s right to be free from arbitrary discrimination based upon stereotypes
of married persons working together in one company.40
The contention of petitioners that Estrella was pressured to resign because she got
impregnated by a married man and she could not stand being looked upon or
talked about as immoral43 is incredulous. If she really wanted to avoid
embarrassment and humiliation, she would not have gone back to work at all. Nor
would she have filed a suit for illegal dismissal and pleaded for reinstatement. We
have held that in voluntary resignation, the employee is compelled by personal
reason(s) to dissociate himself from employment. It is done with the intention of
relinquishing an office, accompanied by the act of abandonment. 44 Thus, it is
illogical for Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the resignation was
voluntary, Estrella’s dismissal is declared illegal.
IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No. 73477
dated August 3, 2004 is AFFIRMED.

Lastly, the absence of a statute expressly prohibiting marital discrimination in our SO ORDERED.
jurisdiction cannot benefit the petitioners. The protection given to labor in our
jurisdiction is vast and extensive that we cannot prudently draw inferences from
the legislature’s silence41 that married persons are not protected under our
Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for
failure of petitioners to present undisputed proof of a reasonable business
necessity, we rule that the questioned policy is an invalid exercise of management
prerogative. Corollarily, the issue as to whether respondents Simbol and Comia
resigned voluntarily has become moot and academic.

As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the
singular fact that her resignation letter was written in her own handwriting. Both
ruled that her resignation was voluntary and thus valid. The respondent court failed
to categorically rule whether Estrella voluntarily resigned but ordered that she be
reinstated along with Simbol and Comia.

Estrella claims that she was pressured to submit a resignation letter because she
was in dire need of money. We examined the records of the case and find Estrella’s
contention to be more in accord with the evidence. While findings of fact by
administrative tribunals like the NLRC are generally given not only respect but, at
times, finality, this rule admits of exceptions,42 as in the case at bar.

Estrella avers that she went back to work on December 21, 1999 but was dismissed
due to her alleged immoral conduct. At first, she did not want to sign the
termination papers but she was forced to tender her resignation letter in exchange
for her thirteenth month pay.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 169295-96 November 20, 2006
REMINGTON INDUSTRIAL SALES CORPORATION, Petitioner,
vs.
ERLINDA CASTANEDA, Respondent.
DECISION
PUNO, J.:
Before this Court is the Petition for Review on Certiorari1 filed by Remington
Industrial Sales Corporation to reverse and set aside the Decision2 of the Fourth
Division of the Court of Appeals in CA-G.R. SP Nos. 64577 and 68477, dated January
31, 2005, which dismissed petitioner’s consolidated petitions for certiorari, and its
subsequent Resolution,3 dated August 11, 2005, which denied petitioner’s motion
for reconsideration.
The antecedent facts of the case, as narrated by the Court of Appeals, are as
follows:
The present controversy began when private respondent, Erlinda Castaneda
("Erlinda") instituted on March 2, 1998 a complaint for illegal dismissal,
underpayment of wages, non-payment of overtime services, non-payment of
service incentive leave pay and non-payment of 13th month pay against Remington
before the NLRC, National Capital Region, Quezon City. The complaint impleaded
Mr. Antonio Tan in his capacity as the Managing Director of Remington.
Erlinda alleged that she started working in August 1983 as company cook with a
salary of Php 4,000.00 for Remington, a corporation engaged in the trading
business; that she worked for six (6) days a week, starting as early as 6:00 a.m.
because she had to do the marketing and would end at around 5:30 p.m., or even
later, after most of the employees, if not all, had left the company premises; that
she continuously worked with Remington until she was unceremoniously
prevented from reporting for work when Remington transferred to a new site in
Edsa, Caloocan City. She averred that she reported for work at the new site in
Caloocan City on January 15, 1998, only to be informed that Remington no longer
needed her services. Erlinda believed that her dismissal was illegal because she was
not given the notices required by law; hence, she filed her complaint for
reinstatement without loss of seniority rights, salary differentials, service incentive
leave pay, 13th month pay and 10% attorney’s fees.
Remington denied that it dismissed Erlinda illegally. It posited that Erlinda was a
domestic helper, not a regular employee; Erlinda worked as a cook and this job had
nothing to do with Remington’s business of trading in construction or hardware
materials, steel plates and wire rope products. It also contended that contrary to
Erlinda’s allegations that the (sic) she worked for eight (8) hours a day, Erlinda’s
duty was merely to cook lunch and "merienda", after which her time was hers to
spend as she pleased. Remington also maintained that it did not exercise any
degree of control and/or supervision over Erlinda’s work as her only concern was to
ensure that the employees’ lunch and "merienda" were available and served at the
designated time. Remington likewise belied Erlinda’s assertion that her work
extended beyond 5:00 p.m. as she could only leave after all the employees had
gone. The truth, according to Remington, is that Erlinda did not have to punch any
time card in the way that other employees of Remington did; she was free to roam
around the company premises, read magazines, and to even nap when not doing
her assigned chores. Remington averred that the illegal dismissal complaint lacked
factual and legal bases. Allegedly, it was Erlinda who refused to report for work
when Remington moved to a new location in Caloocan City.
In a Decision4 dated January 19, 1999, the labor arbiter dismissed the complaint
and ruled that the respondent was a domestic helper under the personal service of
Antonio Tan, finding that her work as a cook was not usually necessary and
desirable in the ordinary course of trade and business of the petitioner corporation,
which operated as a trading company, and that the latter did not exercise control
over her functions. On the issue of illegal dismissal, the labor arbiter found that it
was the respondent who refused to go with the family of Antonio Tan when the
corporation transferred office and that, therefore, respondent could not have been
illegally dismissed.
Upon appeal, the National Labor Relations Commission (NLRC) rendered a
Decision,5 dated November 23, 2000, reversing the labor arbiter, ruling, viz:
We are not inclined to uphold the declaration below that complainant is a domestic
helper of the family of Antonio Tan. There was no allegation by respondent that
complainant had ever worked in the residence of Mr. Tan. What is clear from the
facts narrated by the parties is that complainant continuously did her job as a cook
in the office of respondent serving the needed food for lunch and merienda of the
employees. Thus, her work as cook inured not for the benefit of the family
members of Mr. Tan but solely for the individual employees of respondent.
Complainant as an employee of respondent company is even bolstered by no less
than the certification dated May 23, 1997 issued by the corporate secretary of the
company certifying that complainant is their bonafide employee. This is a solid
evidence which the Labor Arbiter simply brushed aside. But, such error would not
be committed here as it would be at the height of injustice if we are to declare that
complainant is a domestic helper.
Complainant’s work schedule and being paid a monthly salary of ₱4,000.00 are
clear indication that she is a company employee who had been employed to cater
to the food needed by the employees which were being provided by respondent to
form part of the benefit granted them.
With regard to the issue of illegal dismissal, we believe that there is more reason to
believe that complainant was not dismissed because allegedly she was the one who
refused to work in the new office of respondent. However, complainant’s refusal to
join the workforce due to poor eyesight could not be considered abandonment of
work or voluntary resignation from employment.
Under the Labor Code as amended, an employee who reaches the age of sixty years
old (60 years) has the option to retire or to separate from the service with payment
of separation pay/retirement benefit.
In this case, we notice that complainant was already 60 years old at the time she
filed the complaint praying for separation pay or retirement benefit and some
money claims.
Based on Article 287 of the Labor Code as amended, complainant is entitled to be
paid her separation pay/retirement benefit equivalent to one-half (1/2) month for
every year of service. The amount of separation pay would be based on the
prescribed minimum wage at the time of dismissal since she was then underpaid. In
as much as complainant is underpaid of her wages, it behooves that she should be
paid her salary differential for the last three years prior to separation/retirement.
xxx xxx xxx
WHEREFORE, premises considered, the assailed decision is hereby, SET ASIDE, and
a new one is hereby entered ordering respondents to pay complainant the
following:
1. Salary differential - ₱12,021.12 2. Service Incentive Leave Pay - 2,650.00 3. 13th
Month Pay differential - 1,001.76 4. Separation Pay/retirement benefit - 36,075.00
Total - ₱51,747.88
SO ORDERED.
Petitioner moved to reconsider this decision but the NLRC denied the motion. This
denial of its motion prompted petitioner to file a Petition for Certiorari6 with the
Court of Appeals, docketed as CA-G.R. SP No. 64577, on May 4, 2001, imputing
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the NLRC in (1) reversing in toto the decision of the labor arbiter, and (2) awarding
in favor of respondent salary differential, service incentive leave pay, 13th month
pay differential and separation benefits in the total sum of ₱51,747.88.
While the petition was pending with the Court of Appeals, the NLRC rendered
another Decision7 in the same case on August 29, 2001. How and why another
decision was rendered is explained in that decision as follows:
On May 17, 2001, complainant filed a Manifestation praying for a resolution of her
Motion for Reconsideration and, in support thereof, alleges that, sometime
December 18, 2000, she mailed her Manifestation and Motion for Reconsideration
registered as Registered Certificate No. 188844; and that the said mail was received
by the NLRC, through a certain Roland Hernandez, on December 26, 2000.
Certifications to this effect was issued by the Postmaster of the Sta. Mesa Post
Office bearing the date May 11, 2001 (Annexes A and B, Complainant’s
Manifestation).
Evidence in support of complainant’s having actually filed a Motion for
Reconsideration within the reglementary period having been sufficiently
established, a determination of its merits is thus, in order.
On the merits, the NLRC found respondent’s motion for reconsideration
meritorious leading to the issuance of its second decision with the following
dispositive portion:
WHEREFORE, premises considered, the decision dated November 23, 2000, is
MODIFIED by increasing the award of retirement pay due the complainant in the
total amount of SIXTY TWO THOUSAND FOUR HUNDRED THIRTY-SEVEN and 50/100
(₱62,437.50). All other monetary relief so adjudged therein are maintained and
likewise made payable to the complainant.
SO ORDERED.
Petitioner challenged the second decision of the NLRC, including the resolution
denying its motion for reconsideration, through a second Petition for
Certiorari8 filed with the Court of Appeals, docketed as CA-G.R. SP No. 68477 and
dated January 8, 2002, this time imputing grave abuse of discretion amounting to
lack of or excess of jurisdiction on the part of the NLRC in (1) issuing the second
decision despite losing its jurisdiction due to the pendency of the first petition for
certiorari with the Court of Appeals, and (2) assuming it still had jurisdiction to
issue the second decision notwithstanding the pendency of the first petition for
certiorari with the Court of Appeals, that its second decision has no basis in law
since respondent’s motion for reconsideration, which was made the basis of the
second decision, was not filed under oath in violation of Section 14, Rule VII9 of the
New Rules of Procedure of the NLRC and that it contained no certification as to why
respondent’s motion for reconsideration was not decided on time as also required
by Section 10, Rule VI10 and Section 15, Rule VII11 of the aforementioned rules.
Upon petitioner’s motion, the Court of Appeals ordered the consolidation of the
two (2) petitions, on January 24, 2002, pursuant to Section 7, par. b(3), Rule 3 of
the Revised Rules of the Court of Appeals. It summarized the principal issues raised
in the consolidated petitions as follows:
1. Whether respondent is petitioner’s regular employee or a domestic
helper;
2. Whether respondent was illegally dismissed; and
3. Whether the second NLRC decision promulgated during the pendency
of the first petition for certiorari has basis in law.
On January 31, 2005, the Court of Appeals dismissed the consolidated petitions for
lack of merit, finding no grave abuse of discretion on the part of the NLRC in issuing
the assailed decisions.
On the first issue, it upheld the ruling of the NLRC that respondent was a regular
employee of the petitioner since the former worked at the company premises and
catered not only to the personal comfort and enjoyment of Mr. Tan and his family,
but also to that of the employees of the latter. It agreed that petitioner enjoys the
prerogative to control respondent’s conduct in undertaking her assigned work,
particularly the nature and situs of her work in relation to the petitioner’s
workforce, thereby establishing the existence of an employer-employee
relationship between them.
On the issue of illegal dismissal, it ruled that respondent has attained the status of
a regular employee in her service with the company. It noted that the NLRC found
that no less than the company’s corporate secretary certified that respondent is
a bonafide company employee and that she had a fixed schedule and routine of
work and was paid a monthly salary of ₱4,000.00; that she served with petitioner
for 15 years starting in 1983, buying and cooking food served to company
employees at lunch and merienda; and that this work was usually necessary and
desirable in the regular business of the petitioner. It held that as a regular
employee, she enjoys the constitutionally guaranteed right to security of tenure
and that petitioner failed to discharge the burden of proving that her dismissal on
January 15, 1998 was for a just or authorized cause and that the manner of
dismissal complied with the requirements under the law.
Finally, on petitioner’s other arguments relating to the alleged irregularity of the
second NLRC decision, i.e., the fact that respondent’s motion for reconsideration
was not under oath and had no certification explaining why it was not resolved
within the prescribed period, it held that such violations relate to procedural and
non-jurisdictional matters that cannot assume primacy over the substantive merits
of the case and that they do not constitute grave abuse of discretion amounting to
lack or excess of jurisdiction that would nullify the second NLRC decision.
The Court of Appeals denied petitioner’s contention that the NLRC lost its
jurisdiction to issue the second decision when it received the order indicating the
Court of Appeals’ initial action on the first petition for certiorari that it filed. It ruled
that the NLRC’s action of issuing a decision in installments was not prohibited by its
own rules and that the need for a second decision was justified by the fact that
respondent’s own motion for reconsideration remained unresolved in the first
decision. Furthermore, it held that under Section 7, Rule 65 of the Revised Rules of
Court,12 the filing of a petition for certiorari does not interrupt the course of the
principal case unless a temporary restraining order or a writ of preliminary
injunction has been issued against the public respondent from further proceeding
with the case.
From this decision, petitioner filed a motion for reconsideration on February 22,
2005, which the Court of Appeals denied through a resolution dated August 11,
2005.
Hence, the present petition for review.
The petitioner raises the following errors of law: (1) the Court of Appeals erred in
affirming the NLRC’s ruling that the respondent was petitioner’s regular employee
and not a domestic helper; (2) the Court of Appeals erred in holding that petitioner
was guilty of illegal dismissal; and (3) the Court of Appeals erred when it held that
the issuance of the second NLRC decision is proper.
The petition must fail. We affirm that respondent was a regular employee of the
petitioner and that the latter was guilty of illegal dismissal.
Before going into the substantive merits of the present controversy, we shall first
resolve the propriety of the issuance of the second NLRC decision.
The petitioner contends that the respondent’s motion for reconsideration, upon
which the second NLRC decision was based, was not under oath and did not
contain a certification as to why it was not decided on time as required under the
New Rules of Procedure of the NLRC.13 Furthermore, the former also raises for the
first time the contention that respondent’s motion was filed beyond the ten (10)-
calendar day period required under the same Rules,14 since the latter received a
copy of the first NLRC decision on December 6, 2000, and respondent filed her
motion only on December 18, 2000. Thus, according to petitioner, the respondent’s
motion for reconsideration was a mere scrap of paper and the second NLRC
decision has no basis in law.
We do not agree.
It is well-settled that the application of technical rules of procedure may be relaxed
to serve the demands of substantial justice, particularly in labor cases.15 Labor
cases must be decided according to justice and equity and the substantial merits of
the controversy.16 Rules of procedure are but mere tools designed to facilitate the
attainment of justice.17 Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must
always be avoided.18
This Court has consistently held that the requirement of verification is formal, and
not jurisdictional. Such requirement is merely a condition affecting the form of the
pleading, non-compliance with which does not necessarily render it fatally
defective. Verification is simply intended to secure an assurance that the
allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good
faith.19 The court may order the correction of the pleading if verification is lacking
or act on the pleading although it is not verified, if the attending circumstances are
such that strict compliance with the rules may be dispensed with in order that the
ends of justice may thereby be served.20
Anent the argument that respondent’s motion for reconsideration, on which the
NLRC’s second decision was based, was filed out of time, such issue was only
brought up for the first time in the instant petition where no new issues may be
raised by a party in his pleadings without offending the right to due process of the
opposing party.
Nonetheless, the petitioner asserts that the respondent received a copy of the
NLRC’s first decision on December 6, 2000, and the motion for reconsideration was
filed only on December 18, 2000, or two (2) days beyond the ten (10)-calendar day
period requirement under the New Rules of Procedure of the NLRC and should not
be allowed.21
This contention must fail.
Under Article 22322 of the Labor Code, the decision of the NLRC shall be final and
executory after ten (10) calendar days from the receipt thereof by the parties.
While it is an established rule that the perfection of an appeal in the manner and
within the period prescribed by law is not only mandatory but jurisdictional, and
failure to perfect an appeal has the effect of rendering the judgment final and
executory, it is equally settled that the NLRC may disregard the procedural lapse
where there is an acceptable reason to excuse tardiness in the taking of the
appeal.23 Among the acceptable reasons recognized by this Court are (a) counsel's
reliance on the footnote of the notice of the decision of the Labor Arbiter that "the
aggrieved party may appeal. . . within ten (10) working days";24 (b) fundamental
consideration of substantial justice;25 (c) prevention of miscarriage of justice or of
unjust enrichment, as where the tardy appeal is from a decision granting
separation pay which was already granted in an earlier final decision;26 and (d)
special circumstances of the case combined with its legal merits27 or the amount
and the issue involved.28
We hold that the particular circumstances in the case at bar, in accordance with
substantial justice, call for a liberalization of the application of this rule. Notably,
respondent’s last day for filing her motion for reconsideration fell on December 16,
2000, which was a Saturday. In a number of cases,29 we have ruled that if the tenth
day for perfecting an appeal fell on a Saturday, the appeal shall be made on the
next working day. The reason for this ruling is that on Saturdays, the office of the
NLRC and certain post offices are closed. With all the more reason should this
doctrine apply to respondent’s filing of the motion for reconsideration of her cause,
which the NLRC itself found to be impressed with merit. Indeed, technicality should
not be permitted to stand in the way of equitably and completely resolving the
rights and obligations of the parties for the ends of justice are reached not only
through the speedy disposal of cases but, more importantly, through a meticulous
and comprehensive evaluation of the merits of a case.
Finally, as to petitioner’s argument that the NLRC had already lost its jurisdiction to
decide the case when it filed its petition for certiorari with the Court of Appeals
upon the denial of its motion for reconsideration, suffice it to state that under
Section 7 of Rule 6530 of the Revised Rules of Court, the petition shall not interrupt
the course of the principal case unless a temporary restraining order or a writ of
preliminary injunction has been issued against the public respondent from further
proceeding with the case. Thus, the mere pendency of a special civil action for
certiorari, in connection with a pending case in a lower court, does not interrupt
the course of the latter if there is no writ of injunction.31 Clearly, there was no
grave abuse of discretion on the part of the NLRC in issuing its second decision
which modified the first, especially since it failed to consider the respondent’s
motion for reconsideration when it issued its first decision.
Having resolved the procedural matters, we shall now delve into the merits of the
petition to determine whether respondent is a domestic helper or a regular
employee of the petitioner, and whether the latter is guilty of illegal dismissal.
Petitioner relies heavily on the affidavit of a certain Mr. Antonio Tan and contends
that respondent is the latter’s domestic helper and not a regular employee of the
company since Mr. Tan has a separate and distinct personality from the petitioner.
It maintains that it did not exercise control and supervision over her functions; and
that it operates as a trading company and does not engage in the restaurant
business, and therefore respondent’s work as a cook, which was not usually
necessary or desirable to its usual line of business or trade, could not make her its
regular employee.
This contention fails to impress.
In Apex Mining Company, Inc. v. NLRC,32 this Court held that a househelper in the
staff houses of an industrial company was a regular employee of the said firm. We
ratiocinated that:
Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms
"househelper" or "domestic servant" are defined as follows:
"The term ‘househelper’ as used herein is synonymous to the term ‘domestic
servant’ and shall refer to any person, whether male or female, who renders
services in and about the employer’s home and which services are usually
necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer’s family."
The foregoing definition clearly contemplates such househelper or domestic
servant who is employed in the employer’s home to minister exclusively to the
personal comfort and enjoyment of the employer’s family. Such definition covers
family drivers, domestic servants, laundry women, yayas, gardeners, houseboys
and similar househelps.
xxx xxx xxx
The criteria is the personal comfort and enjoyment of the family of the employer in
the home of said employer. While it may be true that the nature of the work of a
househelper, domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their circumstances is that in
the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is being rendered in the
staffhouses or within the premises of the business of the employer. In such
instance, they are employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is
assigned to certain aspects of the business of the employer that such househelper
or domestic servant may be considered as such an employee. The Court finds no
merit in making any such distinction. The mere fact that the househelper or
domestic servant is working within the premises of the business of the employer
and in relation to or in connection with its business, as in its staffhouses for its
guest or even for its officers and employees, warrants the conclusion that such
househelper or domestic servant is and should be considered as a regular
employee of the employer and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended.
In the case at bar, the petitioner itself admits in its position paper33 that
respondent worked at the company premises and her duty was to cook and
prepare its employees’ lunch and merienda. Clearly, the situs, as well as the nature
of respondent’s work as a cook, who caters not only to the needs of Mr. Tan and
his family but also to that of the petitioner’s employees, makes her fall squarely
within the definition of a regular employee under the doctrine enunciated in the
Apex Mining case. That she works within company premises, and that she does not
cater exclusively to the personal comfort of Mr. Tan and his family, is reflective of
the existence of the petitioner’s right of control over her functions, which is the
primary indicator of the existence of an employer-employee relationship.
Moreover, it is wrong to say that if the work is not directly related to the
employer's business, then the person performing such work could not be
considered an employee of the latter. The determination of the existence of an
employer-employee relationship is defined by law according to the facts of each
case, regardless of the nature of the activities involved.34 Indeed, it would be the
height of injustice if we were to hold that despite the fact that respondent was
made to cook lunch and merienda for the petitioner’s employees, which work
ultimately redounded to the benefit of the petitioner corporation, she was merely
a domestic worker of the family of Mr. Tan.
We note the findings of the NLRC, affirmed by the Court of Appeals, that no less
than the company’s corporate secretary has certified that respondent is
a bonafide company employee;35 she had a fixed schedule and routine of work and
was paid a monthly salary of ₱4,000.00;36 she served with the company for 15 years
starting in 1983, buying and cooking food served to company employees at lunch
and merienda, and that this service was a regular feature of employment with the
company.37
Indubitably, the Court of Appeals, as well as the NLRC, correctly held that based on
the given circumstances, the respondent is a regular employee of the
petitioner.1âwphi1
Having determined that the respondent is petitioner’s regular employee, we now
proceed to ascertain the legality of her dismissal from employment.
Petitioner contends that there was abandonment on respondent’s part when she
refused to report for work when the corporation transferred to a new location in
Caloocan City, claiming that her poor eyesight would make long distance travel a
problem. Thus, it cannot be held guilty of illegal dismissal.
On the other hand, the respondent claims that when the petitioner relocated, she
was no longer called for duty and that when she tried to report for work, she was
told that her services were no longer needed. She contends that the petitioner
dismissed her without a just or authorized cause and that she was not given prior
notice, hence rendering the dismissal illegal.
We rule for the respondent.
As a regular employee, respondent enjoys the right to security of tenure under
Article 27938 of the Labor Code and may only be dismissed for a just39 or
authorized40 cause, otherwise the dismissal becomes illegal and the employee
becomes entitled to reinstatement and full backwages computed from the time
compensation was withheld up to the time of actual reinstatement.
Abandonment is the deliberate and unjustified refusal of an employee to resume
his employment.41 It is a form of neglect of duty; hence, a just cause for
termination of employment by the employer under Article 282 of the Labor Code,
which enumerates the just causes for termination by the employer.42 For a valid
finding of abandonment, these two factors should be present: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship, with the second as the more
determinative factor which is manifested by overt acts from which it may be
deduced that the employee has no more intention to work.43 The intent to
discontinue the employment must be shown by clear proof that it was deliberate
and unjustified.44 This, the petitioner failed to do in the case at bar.
Alongside the petitioner’s contention that it was the respondent who quit her
employment and refused to return to work, greater stock may be taken of the
respondent’s immediate filing of her complaint with the NLRC. Indeed, an
employee who loses no time in protesting her layoff cannot by any reasoning be
said to have abandoned her work, for it is well-settled that the filing of an
employee of a complaint for illegal dismissal with a prayer for reinstatement is
proof enough of her desire to return to work, thus, negating the employer’s charge
of abandonment.45
In termination cases, the burden of proof rests upon the employer to show that the
dismissal is for a just and valid cause; failure to do so would necessarily mean that
the dismissal was illegal.46 The employer’s case succeeds or fails on the strength of
its evidence and not on the weakness of the employee’s defense.47 If doubt exists
between the evidence presented by the employer and the employee, the scales of
justice must be tilted in favor of the latter.48

IN VIEW WHEREOF, the petition is DENIED for lack of merit. The assailed Decision
dated January 31, 2005, and the Resolution dated August 11, 2005, of the Court of
Appeals in CA-G.R. SP Nos. 64577 and 68477 are AFFIRMED. Costs against
petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 122917 July 12, 1999
MARITES BERNARDO, ELVIRA GO DIAMANTE, REBECCA E. DAVID, DAVID P.
PASCUAL, RAQUEL ESTILLER, ALBERT HALLARE, EDMUND M. CORTEZ, JOSELITO O.
AGDON GEORGE P. LIGUTAN JR., CELSO M. YAZAR, ALEX G. CORPUZ, RONALD M.
DELFIN, ROWENA M. TABAQUERO, CORAZON C. DELOS REYES, ROBERT G.
NOORA, MILAGROS O. LEQUIGAN, ADRIANA F. TATLONGHARI, IKE CABANDUCOS,
COCOY NOBELLO, DORENDA CANTIMBUHAN, ROBERT MARCELO, LILIBETH Q.
MARMOLEJO, JOSE E. SALES, ISABEL MAMAUAG, VIOLETA G. MONTES, ALBINO
TECSON, MELODY V. GRUELA, BERNADETH D. AGERO, CYNTHIA DE VERA, LANI R.
CORTEZ, MA. ISABEL B. CONCEPCION, DINDO VALERIO, ZENAIDA MATA, ARIEL
DEL PILAR, MARGARET CECILIA CANOZA, THELMA SEBASTIAN, MA. JEANETTE
CERVANTES, JEANNIE RAMIL, ROZAIDA PASCUAL, PINKY BALOLOA, ELIZABETH
VENTURA, GRACE S. PARDO and TIMOSA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and FAR EAST BANK AND TRUST
COMPANY, respondents.
PANGANIBAN, J.:
The Magna Carta for Disabled Persons mandates that qualified disabled persons be
granted the same terms and conditions of employment as qualified able-bodied
employees. Once they have attained the status of regular workers, they should be
accorded all the benefits granted by law, notwithstanding written or verbal
contracts to the contrary. This treatments is rooted not merely on charity or
accomodation, but on justice for all.
The Case
Challenged in the Petition for Certiorari 1 before us is the June 20, 1995 Decision2 of
the National Labor Relations Commission (NLRC), 3 which affirmed the August, 22
1994 ruling of Labor Arbiter Cornelio L. Linsangan. The labor arbiter's Decision
disposed as follows: 4
WHEREFORE, judgment is hereby rendered dismissing the
above-mentioned complaint for lack of merit.
Also assailed is the August 4, 1995 Resolution 5 of the NLRC, which denied the
Motion for Reconsideration.
The Facts
The facts were summarized by the NLRC in this wise: 6
Complainants numbering 43 (p. 176, Records) are deaf-mutes who were hired
on various periods from 1988 to 1993 by respondent Far East Bank and Trust
Co. as Money Sorters and Counters through a uniformly worded agreement
called "Employment Contract for Handicapped Workers". (pp. 68 & 69,
Records) The full text of said agreement is quoted below:
EMPLOYMENT CONTRACT FOR
HANDICAPPED WORKERS
This Contract, entered into by and between:
FAR EAST BANK AND TRUST COMPANY, a universal banking corporation duly
organized and existing under and by virtue of the laws of the Philippines, with
business address at FEBTC Building, Muralla, Intramuros, Manila, represented
herein by its Assistant Vice President, MR. FLORENDO G. MARANAN,
(hereinafter referred to as the "BANK");
-and-
—————, ————— years old, of legal age, ————, and residing at
(hereinafter referred to as the ("EMPLOYEE").
WITNESSETH : That
WHEREAS, the BANK, cognizant of its social responsibility, realizes that there
is a need to provide disabled and handicapped persons gainful employment
and opportunities to realize their potentials, uplift their socio-economic well
being and welfare and make them productive, self-reliant and useful citizens
to enable them to fully integrate in the mainstream of society;
WHEREAS, there are certain positions in the BANK which may be filled-up by
disabled and handicapped persons, particularly deaf-mutes, and the BANK
ha[s] been approached by some civic-minded citizens and authorized
government agencies [regarding] the possibility of hiring handicapped
workers for these positions;
WHEREAS, the EMPLOYEE is one of those handicapped workers who [were]
recommended for possible employment with the BANK;
NOW, THEREFORE, for and in consideration of the foregoing premises and in
compliance with Article 80 of the Labor Code of the Philippines as amended,
the BANK and the EMPLOYEE have entered into this Employment Contract as
follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the EMPLOYEE
agrees to diligently and faithfully work with the BANK, as Money
Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following duties and
responsibilities:
i. Sort out bills according to color;
ii. Count each denomination per hundred, either manually or with the
aid of a counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1) month, after
which the BANK shall determine whether or not he/she should be allowed to
finish the remaining term of this Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of P118.00 per
day, subject to adjustment in the sole judgment of the BANK, payable every
15th and end of the month.1âwphi1.nêt
5. The regular work schedule of the EMPLOYEE shall be five (5) days per
week, from Mondays thru Fridays, at eight (8) hours a day. The EMPLOYEE
may be required to perform overtime work as circumstance may warrant, for
which overtime work he/she [shall] be paid an additional compensation of
125% of his daily rate if performed during ordinary days and 130% if
performed during Saturday or [a] rest day.
6. The EMPLOYEE shall likewise be entitled to the following benefits:
i. Proportionate 13th month pay based on his basic daily wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and comply with all the
BANK Rules and Regulations and Policies, and to conduct himself/herself in a
manner expected of all employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been employed
under a special employment program of the BANK, for which reason the
standard hiring requirements of the BANK were not applied in his/her case.
Consequently, the EMPLOYEE acknowledges and accepts the fact that the
terms and conditions of the employment generally observed by the BANK
with respect to the BANK's regular employee are not applicable to the
EMPLOYEE, and that therefore, the terms and conditions of the EMPLOYEE's
employment with the BANK shall be governed solely and exclusively by this
Contract and by the applicable rules and regulations that the Department of
Labor and Employment may issue in connection with the employment
of disabled and handicapped workers. More specifically, the EMPLOYEE
hereby acknowledges that the provisions of Book Six of the Labor Code of the
Philippines as amended, particularly on regulation of employment and
separation pay are not applicable to him/her.
9. The Employment Contract shall be for a period of six (6) months or from —
— to —— unless earlier terminated by the BANK for any just or reasonable
 cause. Any continuation or extension of this Contract shall be in writing and bank in the Philippines which deals with purely counting and sorting of bills in
therefore this Contract will automatically expire at the end of its terms unless banking operations.
renewed in writing by the BANK.
Petitioners specified when each of them was hired and dimissed, viz: 7
IN WITNESS WHEREOF, the parties, have hereunto affixed their signature[s]
this —— day of ———, ——— at Intramuros, Manila, Philippines. NAME OF PETITIONER WORKPLACE Date Hired Date Dismissed
1. MARITES BERNARDO Intramuros 12-Nov-90 17-Nov-93
In 1988, two (2) deaf-mutes were hired under this Agreement; in 1989 another
two (2); in 1990, nineteen (19); in 1991 six (6); in 1992, six (6) and in 1993, 2. ELVIRA GO DIAMANTE Intramuros 24-Jan-90 11-Jan-94
twenty-one (21). Their employment[s] were renewed every six months such that 3. REBECCA E. DAVID Intramuros 16-Apr-90 23-Oct-93
by the time this case arose, there were fifty-six (56) deaf-mutes who were
employed by respondent under the said employment agreement. The last one 4. DAVID P. PASCUAL Bel-Air 15-Oct-88 21-Nov-94
was Thelma Malindoy who was employed in 1992 and whose contract expired on 5. RAQUEL ESTILLER Intramuros 2-Jul-92 4-Jan-94
July 1993. 6. ALBERT HALLARE West 4-Jan-91 9-Jan-94
7. EDMUND M. CORTEZ Bel-Air 15-Jan-91 3-Dec-93
xxx xxx xxx
8. JOSELITO O. AGDON Intramuros 5-Nov-90 17-Nov-93
Disclaiming that complainants were regular employees, respondent Far East Bank 9. GEORGE P. LIGUTAN JR. Intramuros 6-Sep-89 19-Jan-94
and Trust Company maintained that complainants who are a special class of 10. CELSO M. YAZAR Intramuros 8-Feb-93 8-Aug-93
workers — the hearing impaired employees were hired temporarily under [a]
special employment arrangement which was a result of overtures made by some 11. ALEX G. CORPUZ Intramuros 15-Feb-93 15-Aug-93
civic and political personalities to the respondent Bank; that complainant[s] were 12. RONALD M. DELFIN Intramuros 22-Feb-93 22-Aug-93
hired due to "pakiusap" which must be considered in the light of the context 13. ROWENA M. TABAQUERO Intramuros 22-Feb-93 22-Aug-93
career and working environment which is to maintain and strengthen a corps of
professionals trained and qualified officers and regular employees who are 14. CORAZON C. DELOS REYES Intramuros 8-Feb-93 8-Aug-93
baccalaureate degree holders from excellent schools which is an unbending 15. ROBERT G. NOORA Intramuros 15-Feb-93 15-Aug-93
policy in the hiring of regular employees; that in addition to this, training
16. MILAGROS O. LEQUIGAN Intramuros 1-Feb-93 1-Aug-93
continues so that the regular employee grows in the corporate ladder; that the
idea of hiring handicapped workers was acceptable to them only on a special 17. ADRIANA F. TATLONGHARI Intramuros 22-Jan-93 22-Jul-93
arrangement basis; that it was adopted the special program to help tide over a 18. IKE CABUNDUCOS Intramuros 24-Feb-93 24-Aug-93
group of workers such as deaf-mutes like the complainants who could do manual
19. COCOY NOBELLO Intramuros 22-Feb-93 22-Aug-93
work for the respondent Bank; that the task of counting and sorting of bills which
was being performed by tellers could be assigned to deaf-mutes that the 20. DORENDA CATIMBUHAN Intramuros 15-Feb-93 15-Aug-93
counting and sorting of money are tellering works which were always logically 21. ROBERT MARCELO West 31 JUL 93 8 1-Aug-93
and naturally part and parcel of the tellers' normal functions; that from the
beginning there have been no separate items in the respondent Bank plantilla for 22. LILIBETH Q. MARMOLEJO West 15-Jun-90 21-Nov-93
sortes or counters; that the tellers themselves already did the sorting and 23. JOSE E. SALES West 6-Aug-92 12-Oct-93
counting chore as a regular feature and integral part of their duties (p. 97, 24. ISABEL MAMAUAG West 8-May-92 10-Nov-93
Records); that through the "pakiusap" of Arturo Borjal, the tellers were relieved
of this task of counting and sorting bills in favor of deaf-mutes without creating 25. VIOLETA G. MONTES Intramuros 2-Feb-90 15-Jan-94
new positions as there is no position either in the respondent or in any other 26. ALBINO TECSON Intramuros 7-Nov-91 10-Nov-93
27. MELODY B. GRUELA West 28-Oct-91 3-Nov-93 The NLRC also declared that the Magna Carta for Disabled Persons was not
applicable, "considering the prevailing circumstances/milieu of the case."
28. BERNADETH D. AGERO West 19-Dec-90 27-Dec-93
29. CYNTHIA DE VERA Bel-Air 26-Jun-90 3-Dec-93 Issues
30. LANI R. CORTEZ Bel-Air 15-Oct-88 10-Dec-93
31. MARIA ISABEL B.CONCEPCION West 6-Sep-90 6-Feb-94 In their Memorandum, petitioners cite the following grounds in support of their
cause:
32. DINDO VALERIO Intramuros 30-May-93 30-Nov-93
33. ZENAIDA MATA Intramuros 10-Feb-93 10-Aug-93
I. The Honorable Commission committed grave abuse of
34. ARIEL DEL PILAR Intramuros 24-Feb-93 24-Aug-93 discretion in holding that the petitioners — money sorters and
35. MARGARET CECILIA CANOZA Intramuros 27-Jul-90 4-Feb-94 counters working in a bank — were not regular employees.
36. THELMA SEBASTIAN Intramuros 12-Nov-90 17-Nov-93
II. The Honorable Commission committed grave abuse of
37. MA. JEANETTE CERVANTES West 6-Jun-92 7-Dec-93 discretion in holding that the employment contracts signed and
38. JEANNIE RAMIL Intramuros 23-Apr-90 12-Oct-93 renewed by the petitioners — which provide for a period of six
(6) months — were valid.
39. ROZAIDA PASCUAL Bel-Air 20-Apr-89 29-Oct-93
40. PINKY BALOLOA West 3-Jun-91 2-Dec-93
III. The Honorable Commission committed grave abuse of
41. ELIZABETH VENTURA West 12-Mar-90 FEB 94 [sic] discretion in not applying the provisions of the Magna Carta for
42. GRACE S. PARDO West 4-Apr-90 13-Mar-94 the Disabled (Republic Act No. 7277), on proscription against
discrimination against disabled persons. 11
43. RICO TIMOSA Intramuros 28-Apr-93 28-Oct-93

As earlier noted, the labor arbiter and, on appeal, the NLRC ruled against herein
petitioners. Hence, this recourse to this Court. 9
The Ruling of the NLRC
In affirming the ruling of the labor arbiter that herein petitioners could not be
deemed regular employees under Article 280 of the Labor Code, as amended,
Respondent Commission ratiocinated as follows:
We agree that Art. 280 is not controlling herein. We give due
credence to the conclusion that complainants were hired as an
accommodation to [the] recommendation of civic oriented
personalities whose employment[s] were covered by . . .
Employment Contract[s] with special provisions on duration of
contract as specified under Art. 80. Hence, as correctly held by
the Labor Arbiter a quo, the terms of the contract shall be the
law between the parties. 10
In the main, the Court will resolve whether petitioners have become regular
employees.
This Court's Ruling
The petition is meritorious. However, only the employees, who worked for more
than six months and whose contracts were renewed are deemed regular. Hence,
their dismissal from employement was illegal.
Preliminary Matter:
Propriety of Certiorari
Respondent Far East Bank and Trust Company argues that a review of the findings
of facts of the NLRC is not allowed in a petition for certiorari. Specifically, it
maintains that the Court cannot pass upon the findings of public respondent that
petitioners were not regular employees.
True, the Court, as a rule, does not review the factual findings of public
respondents in a certiorari proceeding. In resolving whether the petitioners have
become regular employees, we shall not change the facts found by the public
respondent. Our task is merely to determine whether the NLRC committed grave
abuse of discretion in applying the law to the established facts, as above-quoted
from the assailed Decision.
Main Issue
Are Petitioners Regular Employee?
Petitioners maintain that they should be considered regular employees, because
their task as money sorters and counters was necessary and desirable to the
business of respondent bank. They further allege that their contracts served merely
to preclude the application of Article 280 and to bar them from becoming regular
employees.
Private respondent, on the other hand, submits that petitioners were hired only as
"special workers and should not in any way be considered as part of the regular
complement of the Bank." 12 Rather, they were "special" workers under Article 80
of the Labor Code. Private respondent contends that it never solicited the services
of petitioners, whose employment was merely an "accommodation" in response to
the requests of government officials and civic-minded citizens. They were told from
the start, "with the assistance of government representatives," that they could not
become regular employees because there were no plantilla positions for "money
sorters," whose task used to be performed by tellers. Their contracts were renewed
several times, not because of need "but merely for humanitarian reasons."
Respondent submits that "as of the present, the "special position" that was created
for the petitioners no longer exist[s] in private respondent [bank], after the latter
had decided not to renew anymore their special employment contracts."
At the outset, let it be known that this Court appreciates the nobility of private
respondent's effort to provide employment to physically impaired individuals and
to make them more productive members of society. However, we cannot allow it
to elude the legal consequences of that effort, simply because it now deems their
employment irrelevant. The facts, viewed in light of the Labor Code and the Magna
Carta for Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal
rights that this Court is duty-bound to protect and uphold, not as a matter of
compassion but as a consequence of law and justice.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine
whether or not they should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any time for a just and
reasonable cause. Unless renewed in writing by the employer, the contract shall
automatically expire at the end of the term.1âwphi1.nêt
According to private respondent, the employment contracts were prepared in
accordance with Article 80 of the Labor code, which provides;
Art. 80. Employment agreement. — Any employer who employs
handicapped workers shall enter into an employment
agreement with them, which agreement shall include:
(a) The names and addresses of the
handicapped workers to be employed;
(b) The rate to be paid the handicapped
workers which shall be not less than
seventy five (75%) per cent of the
applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by
handicapped workers.
The employment agreement shall be subject to inspection by
the Secretary of Labor or his duly authorized representatives.
The stipulations in the employment contracts indubitably conform with the
aforecited provision. Succeeding events and the enactment of RA No. 7277 (the
Magna Carta for Disabled Persons), 13 however, justify the application of Article 280
of the Labor Code.
Respondent bank entered into the aforesaid contract with a total of 56
handicapped workers and renewed the contracts of 37 of them. In fact, two of
them worked from 1988 to 1993. Verily, the renewal of the contracts of the
handicapped workers and the hiring of others lead to the conclusion that their
tasks were beneficial and necessary to the bank. More important, these facts show
that they were qualified to perform the responsibilities of their positions. In other
words, their disability did not render them unqualified or unfit for the tasks
assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a
qualified disabled employee should be given the same terms and conditions of
employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:
Sec. 5. Equal Opportunity for Employment. — No disabled
person shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject to
the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or
allowances as a qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes
the employment contracts from the ambit of Article 80. Since the Magna Carta
accords them the rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. — The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered
by the preceding paragraph: Provided, That, any employee who
has rendered at least one year of service, whether such service
is continuous or broken, shall be considered as regular
employee with respect to the activity in which he is employed
and his employment shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, 14 in
which this Court held:
The primary standard, therefore, of determining regular
employment is the reasonable connection between the
particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation
to the scheme of the particular business or trade in its entirety.
Also if the employee has been performing the job for at least
one year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not
indispensibility of that activity to the business. Hence, the
employment is considered regular, but only with respect to
such activity, and while such activity exist.
Without a doubt, the task of counting and sorting bills is necessary and desirable to
the business of respondent bank. With the exception of sixteen of them,
petitioners performed these tasks for more than six months. Thus, the following
twenty-seven petitioners should be deemed regular employees: Marites Bernardo,
Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q.
Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson,
Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera, Lani R. Cortez, Ma. Isabel
B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace S.
Pardo.
As held by the Court, "Articles 280 and 281 of the Labor Code put an end to the
pernicious practice of making permanent casuals of our lowly employees by the
simple expedient of extending to them probationary appointments, ad
infinitum."15 The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees' fitness for the job.
When the bank renewed the contract after the lapse of the six-month probationary
period, the employees thereby became regular employees. 16 No employer is
allowed to determine indefinitely the fitness of its employees.
As regular employees, the twenty-seven petitioners are entitled to security of
tenure; that is, their services may be terminated only for a just or authorized cause.
Because respondent failed to show such cause, 17 these twenty-seven petitioners
are deemed illegally dismissed and therefore entitled to back wages and
reinstatement without loss of seniority rights and other privileges. 18 Considering
the allegation of respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally
belonged, 18 petitioners are hereby awarded separation pay in lieu of
reinstatement. 20
Because the other sixteen worked only for six months, they are not deemed regular
employees and hence not entitled to the same benefits.
Applicability of the
Brent Ruling
Respondent bank, citing Brent School v. Zamora 21 in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties
entered into the contract on equal footing. It adds that the petitioners had in fact
an advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact that
the petitioners were disabled, and that the bank had to determine their fitness for
the position. Indeed, its validity is based on Article 80 of the Labor Code. But as
noted earlier, petitioners proved themselves to be qualified disabled persons who,
under the Magna Carta for Disabled Persons, are entitled to terms and conditions
of employment enjoyed by qualified able-bodied individuals; hence, Article 80 does
not apply because petitioners are qualified for their positions. The validation of the
limit imposed on their contracts, imposed by reason of their disability, was a glaring
instance of the very mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with
public interest. 22 Provisions of applicable statutes are deemed written into the
contract, and the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
with each other." 23 Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as qualified able-bodied
employees.
Respondent's reason for terminating the employment of petitioners is instructive.
Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be
turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons
that this task "could not be done by deaf mutes because of their physical
limitations as it is very risky for them to travel at night." 24 We find no basis for this
argument. Travelling at night involves risks to handicapped and able-bodied
persons alike. This excuse cannot justify the termination of their employment.
Other Grounds Cited by Respondent
Respondent argues that petitioners were merely "accommodated" employees. This
fact does not change the nature of their employment. As earlier noted, an
employee is regular because of the nature of work and the length of service, not
because of the mode or even the reason for hiring them.
Equally unavailing are private respondent's arguments that it did not go out of its
way to recruit petitioners, and that its plantilla did not contain their positions. In L.
T. Datu v. NLRC, 25 the Court held that "the determination of whether employment
is casual or regular does not depend on the will or word of the employer, and the
procedure of hiring . . . but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its continued
existence."
Private respondent argues that the petitioners were informed from the start that
they could not become regular employees. In fact, the bank adds, they agreed with
the stipulation in the contract regarding this point. Still, we are not persuaded. The
well-settled rule is that the character of employment is determined not by
stipulations in the contract, but by the nature of the work performed. 26 Otherwise,
no employee can become regular by the simple expedient of incorporating this
condition in the contract of employment.
In this light, we iterate our ruling in Romares v. NLRC: 27
Art. 280 was emplaced in our statute books to prevent the
circumvention of the employee's right to be secure in his
tenure by indiscriminately and completely ruling out all written
 and oral agreements inconsistent with the concept of regular petitioners, namely, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David
employment defined therein. Where an employee has been P. Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez, Joselito O. Agdon,
engaged to perform activities which are usually necessary or George P. Ligutan Jr., Liliberh Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta
desirable in the usual business of the employer, such employee G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de Vera,
is deemed a regular employee and is entitled to security of Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma
tenure notwithstanding the contrary provisions of his contract Sebastian, Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa,
of employment. Elizabeth Ventura and Grace S. Pardo. The NLRC is hereby directed to compute the
exact amount due each of said employees, pursuant to existing laws and
xxx xxx xxx regulations, within fifteen days from the finality of this Decision. No
costs.1âwphi1.nêt
At this juncture, the leading case of Brent School,
Inc. v. Zamora proves instructive. As reaffirmed in subsequent SO ORDERED.
cases, this Court has upheld the legality of fixed-term
employment. It ruled that the decisive determinant in "term
employment" should not be the activities that the employee is
called upon to perform but the day certain agreed upon the
parties for the commencement and termination of their
employment relationship. But this Court went on to say that
where from the circumstances it is apparent that the periods
have been imposed to preclude acquisition of tenurial security
by the employee, they should be struck down or disregarded as
contrary to public policy and morals.

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

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

WHEREFORE, premises considered, the Petition is hereby GRANTED. The June 20,
1995 Decision and the August 4, 1995 Resolution of the NLRC are REVERSED and
SET ASIDE. Respondent Far East Bank and Trust Company is hereby ORDERED to
pay back wages and separation pay to each of the following twenty-seven (27)
HUMAN RESOURCES DEVELOPMENT PROGRAM
private respondent.
A. National Manpower Development Program – Government Machinery
The following day, Roberto Capili was asked to resign in a letter3 which reads:
B. Apprenticeship and Learnership
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 114337 September 29, 1995
NITTO ENTERPRISES, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.
KAPUNAN, J.:
This petition for certiorari under Rule 65 of the Rules of Court seeking to annul the
decision1 rendered by public respondent National Labor Relations Commission,
which reversed the decision of the Labor Arbiter.
Briefly, the facts of the case are as follows:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and aluminum
products, hired Roberto Capili sometime in May 1990 as an apprentice machinist,
molder and core maker as evidenced by an apprenticeship agreement2 for a period
of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage rate
of P66.75 which was 75% of the applicable minimum wage.
At around 1:00 p.m. of August 2, 1990, Roberto Capili who was handling a piece of
glass which he was working on, accidentally hit and injured the leg of an office
secretary who was treated at a nearby hospital.
Later that same day, after office hours, private respondent entered a workshop
within the office premises which was not his work station. There, he operated one
of the power press machines without authority and in the process injured his left
thumb. Petitioner spent the amount of P1,023.04 to cover the medication of
Wala siyang tanggap ng utos mula sa superbisor at wala siyang
experiensa kung papaano gamitin and "TOOL" sa pagbuhat ng
salamin, sarili niyang desisyon ang paggamit ng tool at may
disgrasya at nadamay pa ang isang sekretarya ng kompanya.
Sa araw ding ito limang (5) minute ang nakakalipas mula alas-
singko ng hapon siya ay pumasok sa shop na hindi naman sakop
ng kanyang trabaho. Pinakialaman at kinalikot ang makina at
nadisgrasya niya ang kanyang sariling kamay.
Nakagastos ang kompanya ng mga
sumusunod:
Emergency and doctor fee P715.00
Medecines (sic) and others 317.04
Bibigyan siya ng kompanya ng Siyam na araw na libreng sahod
hanggang matanggal ang tahi ng kanyang kamay.
Tatanggapin niya ang sahod niyang anim na araw, mula ika-30
ng Hulyo at ika-4 ng Agosto, 1990.
Ang kompanya ang magbabayad ng lahat ng gastos pagtanggal
ng tahi ng kanyang kamay, pagkatapos ng siyam na araw mula
ika-2 ng Agosto.
Sa lahat ng nakasulat sa itaas, hinihingi ng kompanya ang
kanyang resignasyon, kasama ng kanyang comfirmasyon at pag-
ayon na ang lahat sa itaas ay totoo.
 Naiintindihan ko ang lahat ng nakasulat sa itaas, at ang lahat ng
ito ay aking pagkakasala sa hindi pagsunod sa alintuntunin ng
kompanya.
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of
petitioner for and in consideration of the sum of P1,912.79.4
Three days after, or on August 6, 1990, private respondent formally filed before the
NLRC Arbitration Branch, National Capital Region a complaint for illegal dismissal
and payment of other monetary benefits.
On October 9, 1991, the Labor Arbiter rendered his decision finding the
termination of private respondent as valid and dismissing the money claim for lack
of merit. The dispositive portion of the ruling reads:
WHEREFORE, premises considered, the termination is valid and
for cause, and the money claims dismissed for lack of merit.
The respondent however is ordered to pay the complainant the
amount of P500.00 as financial assistance.
SO ORDERED.5
Labor Arbiter Patricio P. Libo-on gave two reasons for ruling that the dismissal of
Roberto Capilian was valid. First, private respondent who was hired as an
apprentice violated the terms of their agreement when he acted with gross
negligence resulting in the injury not only to himself but also to his fellow worker.
Second, private respondent had shown that "he does not have the proper attitude
in employment particularly the handling of machines without authority and proper
training.6
On July 26, 1993, the National Labor Relations Commission issued an order
reversing the decision of the Labor Arbiter, the dispositive portion of which reads:
WHEREFORE, the appealed decision is hereby set aside. The
respondent is hereby directed to reinstate complainant to his
work last performed with backwages computed from the time
his wages were withheld up to the time he is actually
reinstated. The Arbiter of origin is hereby directed to further
hear complainant's money claims and to dispose them on the
basis of law and evidence obtaining.
SO ORDERED.7
The NLRC declared that private respondent was a regular
employee of petitioner by ruling thus:
As correctly pointed out by the complainant, we cannot
understand how an apprenticeship agreement filed with the
Department of Labor only on June 7, 1990 could be validly used
by the Labor Arbiter as basis to conclude that the complainant
was hired by respondent as a plain "apprentice" on May 28,
1990. Clearly, therefore, the complainant was respondent's
regular employee under Article 280 of the Labor Code, as early
as May 28,1990, who thus enjoyed the security of tenure
guaranteed in Section 3, Article XIII of our 1987 Constitution.
The complainant being for illegal dismissal (among others) it
then behooves upon respondent, pursuant to Art. 227(b) and as
ruled in Edwin Gesulgon vs. NLRC, et al. (G.R. No. 90349, March
5, 1993, 3rd Div., Feliciano, J.) to prove that the dismissal of
complainant was for a valid cause. Absent such proof, we
cannot but rule that the complainant was illegally dismissed.8
On January 28, 1994, Labor Arbiter Libo-on called for a conference at which only
private respondent's representative was present.
On April 22, 1994, a Writ of Execution was issued, which reads:
NOW, THEREFORE, finding merit in [private respondent's] Motion for
Issuance of the Writ, you are hereby commanded to proceed to the
premises of [petitioner] Nitto Enterprises and Jovy Foster located at No. l 74
Araneta Avenue, Portero, Malabon, Metro Manila or at any other places
where their properties are located and effect the reinstatement of herein
[private respondent] to his work last performed or at the option of the
respondent by payroll reinstatement.
 You are also to collect the amount of P122,690.85 representing his
backwages as called for in the dispositive portion, and turn over such
amount to this Office for proper disposition.
Petitioner filed a motion for reconsideration but the same was denied.
Hence, the instant petition — for certiorari.
The issues raised before us are the following:
I Department of Labor and Employment. However, the apprenticeship Agreement
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT PRIVATE RESPONDENT WAS NOT AN
APPRENTICE.
II
WHETHER OR NOT PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE
OF DISCRETION IN HOLDING THAT PETITIONER HAD NOT ADEQUATELY
PROVEN THE EXISTENCE OF A VALID CAUSE IN TERMINATING THE SERVICE
OF PRIVATE RESPONDENT.
We find no merit in the petition.
Petitioner assails the NLRC's finding that private respondent Roberto Capili cannot
plainly be considered an apprentice since no apprenticeship program had yet been
filed and approved at the time the agreement was executed.
Petitioner further insists that the mere signing of the apprenticeship agreement
already established an employer-apprentice relationship.
Petitioner's argument is erroneous.
The law is clear on this matter. Article 61 of the Labor Code provides:
Contents of apprenticeship agreement. — Apprenticeship agreements,
including the main rates of apprentices, shall conform to the rules issued by the
Minister of Labor and Employment. The period of apprenticeship shall not
exceed six months. Apprenticeship agreements providing for wage rates below
the legal minimum wage, which in no case shall start below 75% per cent of the
applicable minimum wage, may be entered into only in accordance with
apprenticeship program duly approved by the Minister of Labor and
Employment. The Ministry shall develop standard model programs of
apprenticeship. (emphasis supplied)
In the case at bench, the apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 allegedly employing the latter as an
apprentice in the trade of "care maker/molder." On the same date, an
apprenticeship program was prepared by petitioner and submitted to the
was filed only on June 7, 1990. Notwithstanding the absence of approval by the
Department of Labor and Employment, the apprenticeship agreement was
enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with the requirements
of the law. It is mandated that apprenticeship agreements entered into by the
employer and apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor and Employment.
Prior approval by the Department of Labor and Employment of the proposed
apprenticeship program is, therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the Department of
Labor and Employment is a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to "establish a national
apprenticeship program through the participation of employers, workers and
government and non-government agencies" and "to establish apprenticeship
standards for the protection of apprentices." To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship agreement can
be fully enforced. The role of the DOLE in apprenticeship programs and agreements
cannot be debased.
Hence, since the apprenticeship agreement between petitioner and private
respondent has no force and effect in the absence of a valid apprenticeship
program duly approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence. He should rightly be considered as a regular employee of
petitioner as defined by Article 280 of the Labor Code:
Art. 280. Regular and Casual Employment. — The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in which
he is employed and his employment shall continue while such activity
exists. (Emphasis supplied)
and pursuant to the constitutional mandate to "protect the rights of workers
and promote their welfare."9
Petitioner further argues that, there is a valid cause for the dismissal of private
respondent.
There is an abundance of cases wherein the Court ruled that the twin requirements
of due process, substantive and procedural, must be complied with, before valid
dismissal exists. 10 Without which, the dismissal becomes void.
The twin requirements of notice and hearing constitute the essential elements of
due process. This simply means that the employer shall afford the worker ample
opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.
Ample opportunity connotes every kind of assistance that management must
accord the employee to enable him to prepare adequately for his defense including
legal representation. 11
As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC: 12
The law requires that the employer must furnish the worker sought to be
dismissed with two (2) written notices before termination of employee can be
legally effected: (1) notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought; and (2) the subsequent notice
which informs the employee of the employer's decision to dismiss him (Sec. 13,
BP 130; Sec. 2-6 Rule XIV, Book V, Rules and Regulations Implementing the
Labor Code as amended). Failure to comply with the requirements taints the
dismissal with illegality. This procedure is mandatory, in the absence of which,
any judgment reached by management is void and in existent (Tingson, Jr. vs.
NLRC, 185 SCRA 498 [1990]; National Service Corp. vs. NLRC, 168 SCRA 122;
Ruffy vs. NLRC. 182 SCRA 365 [1990]).
The fact is private respondent filed a case of illegal dismissal with the Labor Arbiter
only three days after he was made to sign a Quitclaim, a clear indication that such
resignation was not voluntary and deliberate.
Private respondent averred that he was actually employed by petitioner as a
delivery boy ("kargador" or "pahinante").
He further asserted that petitioner "strong-armed" him into signing the
aforementioned resignation letter and quitclaim without explaining to him the
contents thereof. Petitioner made it clear to him that anyway, he did not have a
choice. 13
Petitioner cannot disguise the summary dismissal of private respondent by
orchestrating the latter's alleged resignation and subsequent execution of a
Quitclaim and Release. A judicious examination of both events belies any
spontaneity on private respondent's part.
WHEREFORE, finding no abuse of discretion committed by public respondent
National Labor Relations Commission, the appealed decision is hereby AFFIRMED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 75112 August 17, 1992
FILAMER CHRISTIAN INSTITUTE, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his
capacity as Judge of the Regional Trial Court, Branch XIV, Roxas City and
POTENCIANO KAPUNAN, SR., respondents.
Bedona & Bedona Law Office for petitioner.
Rhodora G. Kapunan for private respondents.
GUTIERREZ, JR., J.:
The private respondents, heirs of the late Potenciano Kapunan, seek
reconsideration of the decision rendered by this Court on October 16, 1990
(Filamer Christian Institute v. Court of Appeals, 190 SCRA 477) reviewing the
appellate court's conclusion that there exists an employer-employee relationship
between the petitioner and its co-defendant Funtecha. The Court ruled that the
petitioner is not liable for the injuries caused by Funtecha on the grounds that the
latter was not an authorized driver for whose acts the petitioner shall be directly
and primarily answerable, and that Funtecha was merely a working scholar who,
under Section 14, Rule X, Book III of the Rules and Regulations Implementing the
Labor Code is not considered an employee of the petitioner.
The private respondents assert that the circumstances obtaining in the present
case call for the application of Article 2180 of the Civil Code since Funtecha is no
doubt an employee of the petitioner. The private respondents maintain that under
Article 2180 an injured party shall have recourse against the servant as well as the
petitioner for whom, at the time of the incident, the servant was performing an act
in furtherance of the interest and for the benefit of the petitioner. Funtecha
allegedly did not steal the school jeep nor use it for a joy ride without the
knowledge of the school authorities.
After a re-examination of the laws relevant to the facts found by the trial court and
the appellate court, the Court reconsiders its decision. We reinstate the Court of
Appeals' decision penned by the late Justice Desiderio Jurado and concurred in by
Justices Jose C. Campos, Jr. and Serafin E. Camilon. Applying Civil Code provisions,
the appellate court affirmed the trial court decision which ordered the payment of
the P20,000.00 liability in the Zenith Insurance Corporation policy, P10,000.00
moral damages, P4,000.00 litigation and actual expenses, and P3,000.00 attorney's
fees.
It is undisputed that Funtecha was a working student, being a part-time janitor and
a scholar of petitioner Filamer. He was, in relation to the school, an employee even
if he was assigned to clean the school premises for only two (2) hours in the
morning of each school day.
Having a student driver's license, Funtecha requested the driver, Allan Masa, and
was allowed, to take over the vehicle while the latter was on his way home one late
afternoon. It is significant to note that the place where Allan lives is also the house
of his father, the school president, Agustin Masa. Moreover, it is also the house
where Funtecha was allowed free board while he was a student of Filamer Christian
Institute.
Allan Masa turned over the vehicle to Funtecha only after driving down a road,
negotiating a sharp dangerous curb, and viewing that the road was clear. (TSN,
April 4, 1983, pp. 78-79) According to Allan's testimony, a fast moving truck with
glaring lights nearly hit them so that they had to swerve to the right to avoid a
collision. Upon swerving, they heard a sound as if something had bumped against
the vehicle, but they did not stop to check. Actually, the Pinoy jeep swerved
towards the pedestrian, Potenciano Kapunan who was walking in his lane in the
direction against vehicular traffic, and hit him. Allan affirmed that Funtecha
followed his advise to swerve to the right. (Ibid., p. 79) At the time of the incident
(6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.
Allan testified that he was the driver and at the same time a security guard of the
petitioner-school. He further said that there was no specific time for him to be off-
duty and that after driving the students home at 5:00 in the afternoon, he still had
to go back to school and then drive home using the same vehicle.
Driving the vehicle to and from the house of the school president where both Allan
and Funtecha reside is an act in furtherance of the interest of the petitioner-school.
Allan's job demands that he drive home the school jeep so he can use it to fetch
students in the morning of the next school day.
It is indubitable under the circumstances that the school president had knowledge
that the jeep was routinely driven home for the said purpose. Moreover, it is not
improbable that the school president also had knowledge of Funtecha's possession
of a student driver's license and his desire to undergo driving lessons during the
time that he was not in his classrooms.
In learning how to drive while taking the vehicle home in the direction of Allan's
house, Funtecha definitely was not having a joy ride. Funtecha was not driving for
the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the
service for which the jeep was intended by the petitioner school. (See L. Battistoni
v. Thomas, Can SC 144, 1 D.L.R. 577, 80 ALR 722 [1932]; See also Association of
Baptists for World Evangelism, Inc. v. Fieldmen's Insurance Co., Inc. 124 SCRA 618
[1983]). Therefore, the Court is constrained to conclude that the act of Funtecha in
taking over the steering wheel was one done for and in behalf of his employer for
which act the petitioner-school cannot deny any responsibility by arguing that it
was done beyond the scope of his janitorial duties. The clause "within the scope of
their assigned tasks" for purposes of raising the presumption of liability of an
employer, includes any act done by an employee, in furtherance of the interests of
the employer or for the account of the employer at the time of the infliction of the
injury or damage. (Manuel Casada, 190 Va 906, 59 SE 2d 47 [1950]) Even if
somehow, the employee driving the vehicle derived some benefit from the act, the
existence of a presumptive liability of the employer is determined by answering the
question of whether or not the servant was at the time of the accident performing
any act in furtherance of his master's business. (Kohlman v. Hyland, 210 NW 643,
50 ALR 1437 [1926]; Jameson v. Gavett, 71 P 2d 937 [1937])
Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the
petitioner anchors its defense, was promulgated by the Secretary of Labor and
Employment only for the purpose of administering and enforcing the provisions of
the Labor Code on conditions of employment. Particularly, Rule X of Book III
provides guidelines on the manner by which the powers of the Labor Secretary
shall be exercised; on what records should be kept; maintained and preserved; on
payroll; and on the exclusion of working scholars from, and inclusion of resident
physicians in the employment coverage as far as compliance with the substantive
labor provisions on working conditions, rest periods, and wages, is concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law
on labor. The Court, thus, makes the distinction and so holds that Section 14, Rule
X, Book III of the Rules is not the decisive law in a civil suit for damages instituted
by an injured person during a vehicular accident against a working student of a
school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment
between an alleged employee and an alleged employer. It invokes a claim brought
by one for damages for injury caused by the patently negligent acts of a person,
against both doer-employee and his employer. Hence, the reliance on the
implementing rule on labor to disregard the primary liability of an employer under
Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot
be used by an employer as a shield to avoid liability under the substantive
provisions of the Civil Code.
There is evidence to show that there exists in the present case an extra-contractual
obligation arising from the negligence or reckless imprudence of a person "whose
acts or omissions are imputable, by a legal fiction, to other(s) who are in a position
to exercise an absolute or limited control over (him)." (Bahia v. Litonjua and Leynes,
30 Phil. 624 [1915])
Funtecha is an employee of petitioner Filamer. He need not have an official
appointment for a driver's position in order that the petitioner may be held
responsible for his grossly negligent act, it being sufficient that the act of driving at
the time of the incident was for the benefit of the petitioner. Hence, the fact that
Funtecha was not the school driver or was not acting within the scope of his
janitorial duties does not relieve the petitioner of the burden of rebutting the
presumption juris tantum that there was negligence on its part either in the
selection of a servant or employee, or in the supervision over him. The petitioner
has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.
The Court reiterates that supervision includes the formulation of suitable rules and
regulations for the guidance of its employees and the issuance of proper
instructions intended for the protection of the public and persons with whom the
employer has relations through his employees. (Bahia v. Litonjua and
Leynes, supra, at p. 628; Phoenix Construction, v. Intermediate Appellate Court,
148 SCRA 353 [1987])
An employer is expected to impose upon its employees the necessary discipline
called for in the performance of any act indispensable to the business and
beneficial to their employer.
In the present case, the petitioner has not shown that it has set forth such rules
and guidelines as would prohibit any one of its employees from taking control over
its vehicles if one is not the official driver or prohibiting the driver and son of the
Filamer president from authorizing another employee to drive the school vehicle.
Furthermore, the petitioner has failed to prove that it had imposed sanctions or
warned its employees against the use of its vehicles by persons other than the
driver.

The petitioner, thus, has an obligation to pay damages for injury arising from the
unskilled manner by which Funtecha drove the vehicle. (Cangco v. Manila Railroad
Co., 38 Phil. 768, 772 [1918]). In the absence of evidence that the petitioner had
exercised the diligence of a good father of a family in the supervision of its
employees, the law imposes upon it the vicarious liability for acts or omissions of its
employees. (Umali v. Bacani, 69 SCRA 263 [1976]; Poblete v. Fabros, 93 SCRA 200
[1979]; Kapalaran Bus Liner v. Coronado, 176 SCRA 792 [1989]; Franco v.
Intermediate Appellate Court, 178 SCRA 331 [1989]; Pantranco North Express, Inc.
v. Baesa, 179 SCRA 384 [1989]) The liability of the employer is, under Article 2180,
primary and solidary. However, the employer shall have recourse against the
negligent employee for whatever damages are paid to the heirs of the plaintiff.

It is an admitted fact that the actual driver of the school jeep, Allan Masa, was not
made a party defendant in the civil case for damages. This is quite understandable
considering that as far as the injured pedestrian, plaintiff Potenciano Kapunan, was
concerned, it was Funtecha who was the one driving the vehicle and presumably
was one authorized by the school to drive. The plaintiff and his heirs should not
now be left to suffer without simultaneous recourse against the petitioner for the
consequent injury caused by a janitor doing a driving chore for the petitioner even
for a short while. For the purpose of recovering damages under the prevailing
circumstances, it is enough that the plaintiff and the private respondent heirs were
able to establish the existence of employer-employee relationship between
Funtecha and petitioner Filamer and the fact that Funtecha was engaged in an act
not for an independent purpose of his own but in furtherance of the business of his
employer. A position of responsibility on the part of the petitioner has thus been
satisfactorily demonstrated.

WHEREFORE, the motion for reconsideration of the decision dated October 16,
1990 is hereby GRANTED. The decision of the respondent appellate court affirming
the trial court decision is REINSTATED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 187320 January 26, 2011
ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN, Petitioners,
vs.
APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMOITE, and JOSEPH S.
SAGUN, Respondents.
DECISION
BRION, J.:
For resolution is the petition for review on certiorari1 assailing the decision2 and the
resolution3 of the Court of Appeals (CA) rendered on November 4, 2008 and March
25, 2009, respectively, in CA-G.R. SP. No. 99340.4
The Antecedents
The facts are summarized below.
In the months of February and March 2005, complainants Aprilito R. Sebolino, Khim
V. Costales, Alvin V. Almoite, Joseph S. Sagun, Agosto D. Zaño, Domingo S. Alegria,
Jr., Ronie Ramos, Edgar Villagomez, Melvin Pedregoza, Teofanes B. Chiong, Jr.,
Leonardo L. dela Cruz, Arnold A. Magalang, and Saturnino M. Mabanag filed several
complaints for illegal dismissal, regularization, underpayment, nonpayment of
wages and other money claims, as well as claims for moral and exemplary damages
and attorney’s fees against the petitioners Atlanta Industries, Inc. (Atlanta) and its
President and Chief Operating Officer Robert Chan. Atlanta is a domestic
corporation engaged in the manufacture of steel pipes.
The complaints were consolidated and were raffled to Labor Arbiter Daniel Cajilig,
but were later transferred to Labor Arbiter Dominador B. Medroso, Jr.
The complainants alleged that they had attained regular status as they were
allowed to work with Atlanta for more than six (6) months from the start of a
purported apprenticeship agreement between them and the company. They
claimed that they were illegally dismissed when the apprenticeship agreement
expired.
In defense, Atlanta and Chan argued that the workers were not entitled to
regularization and to their money claims because they were engaged as
apprentices under a government-approved apprenticeship program. The company
offered to hire them as regular employees in the event vacancies for regular
positions occur in the section of the plant where they had trained. They also
claimed that their names did not appear in the list of employees (Master List)5 prior
to their engagement as apprentices.
On May 24, 2005, dela Cruz, Magalang, Zaño and Chiong executed a Pagtalikod at
Pagwawalang Saysay before Labor Arbiter Cajilig.
The Compulsory Arbitration Rulings
On April 24, 2006, Labor Arbiter Medroso dismissed the complaint with respect to
dela Cruz, Magalang, Zaño and Chiong, but found the termination of service of the
remaining nine to be illegal.6 Consequently, the arbiter awarded the dismissed
workers backwages, wage differentials, holiday pay and service incentive leave pay
amounting to ₱1,389,044.57 in the aggregate.
Atlanta appealed to the National Labor Relations Commission (NLRC). In the
meantime, or on October 10, 2006, Ramos, Alegria, Villagomez, Costales and
Almoite allegedly entered into a compromise agreement with Atlanta.7 The
agreement provided that except for Ramos, Atlanta agreed to pay the workers a
specified amount as settlement, and to acknowledge them at the same time as
regular employees.
On December 29, 2006,8 the NLRC rendered a decision, on appeal, modifying the
ruling of the labor arbiter, as follows: (1) withdrawing the illegal dismissal finding
with respect to Sagun, Mabanag, Sebolino and Pedregoza; (2) affirming the
dismissal of the complaints of dela Cruz, Zaño, Magalang and Chiong; (3) approving
the compromise agreement entered into by Costales, Ramos, Villagomez, Almoite
and Alegria, and (4) denying all other claims.
Sebolino, Costales, Almoite and Sagun moved for the reconsideration of the
decision, but the NLRC denied the motion in its March 30, 20079 resolution. The
four then sought relief from the CA through a petition for certiorari under Rule 65
of the Rules of Court. They charged that the NLRC committed grave abuse of
discretion in: (1) failing to recognize their prior employment with Atlanta; (2)
declaring the second apprenticeship agreement valid; (3) holding that the dismissal
of Sagun, Mabanag, Sebolino and Melvin Pedregoza is legal; and (4) upholding the
compromise agreement involving Costales, Ramos, Villagomez, Almoite and
Alegria.
The CA Decision
The CA granted the petition based on the following findings:10
1. The respondents were already employees of the company before they
entered into the first and second apprenticeship agreements – Almoite
and Costales were employed as early as December 2003 and,
subsequently, entered into a first apprenticeship agreement from May
13, 2004 to October 12, 2004; before this first agreement expired, a
second apprenticeship agreement, from October 9, 2004 to March 8,
2005 was executed. The same is true with Sebolino and Sagun, who were
employed by Atlanta as early as March 3, 2004. Sebolino entered into his
first apprenticeship agreement with the company from March 20, 2004
to August 19, 2004, and his second apprenticeship agreement from
August 20, 2004 to January 19, 2005. Sagun, on the other hand, entered
into his first agreement from May 28, 2004 to October 8, 2004, and the
second agreement from October 9, 2004 to March 8, 2005.
2. The first and second apprenticeship agreements were defective as they
were executed in violation of the law and the rules.11 The agreements did
not indicate the trade or occupation in which the apprentice would be
trained; neither was the apprenticeship program approved by the
Technical Education and Skills Development Authority (TESDA).
3. The positions occupied by the respondents – machine operator,
extruder operator and scaleman – are usually necessary and desirable in
the manufacture of plastic building materials, the company’s main
business. Costales, Almoite, Sebolino and Sagun were, therefore, regular
employees whose dismissals were illegal for lack of a just or authorized
cause and notice.
4. The compromise agreement entered into by Costales and Almoite,
together with Ramos, Villagomez and Alegria, was not binding on
Costales and Almoite because they did not sign the agreement.
The petitioners themselves admitted that Costales and Almoite were initially
planned to be a part of the compromise agreement, but their employment has
been regularized as early as January 11, 2006; hence, the company did not pursue
their inclusion in the compromise agreement.12
The CA faulted the NLRC for failing to appreciate the evidence regarding the
respondents’ prior employment with Atlanta. The NLRC recognized the prior
employment of Costales and Almoite on Atlanta’s monthly report for December
2003 for the CPS Department/Section dated January 6, 2004.13 This record shows
that Costales and Almoite were assigned to the company’s first shift from 7:00 a.m.
to 3:00 p.m. The NLRC ignored Sebolino and Sagun’s prior employment under the
company’s Production and Work Schedule for March 7 to 12, 2005 dated March 3,
2004,14 as they had been Atlanta’s employees as early as March 3, 2004, with
Sebolino scheduled to work on March 7-12, 2005 at 7:00 a.m. to 7:00 p.m., while
Sagun was scheduled to work for the same period but from 7:00 p.m. to 7:00 a.m.
The CA noted that Atlanta failed to challenge the authenticity of the two
documents before it and the labor authorities.
Atlanta and Chan moved for reconsideration, but the CA denied the motion in a
resolution rendered on March 25, 2009.15 Hence, the present petition.
The Petition
Atlanta seeks a reversal of the CA decision, contending that the appellate court
erred in (1) concluding that Costales, Almoite, Sebolino and Sagun were employed
by Atlanta before they were engaged as apprentices; (2) ruling that a second
apprenticeship agreement is invalid; (3) declaring that the respondents were
illegally dismissed; and (4) disregarding the compromise agreement executed by
Costales and Almoite. It submits the following arguments:
First. The CA’s conclusion that the respondent workers were company employees
before they were engaged as apprentices was primarily based on the Monthly
Report16 and the Production and Work Schedule for March 7-12, 2005,17 in total
disregard of the Master List18 prepared by the company accountant, Emelita M.
Bernardo. The names of Costales, Almoite, Sebolino and Sagun do not appear as
employees in the Master List which "contained the names of all the persons who
were employed by and at petitioner."19
Atlanta faults the CA for relying on the Production and Work Schedule and the
Monthly Report which were not sworn to, and in disregarding the Master List
whose veracity was sworn to by Bernardo and by Alex Go who headed the
company’s accounting division. It maintains that the CA should have given more
credence to the Master List.
Second. In declaring invalid the apprenticeship agreements it entered into with the
respondent workers, the CA failed to recognize the rationale behind the law on
apprenticeship. It submits that under the law,20 apprenticeship agreements are
valid, provided they do not exceed six (6) months and the apprentices are paid the
appropriate wages of at least 75% of the applicable minimum wage.
The respondents initially executed a five-month apprenticeship program with
Atlanta, at the end of which, they "voluntarily and willingly entered into another
apprenticeship agreement with the petitioner for the training of a second
skill"21 for five months; thus, the petitioners committed no violation of the
apprenticeship period laid down by the law.
Further, the apprenticeship agreements, entered into by the parties, complied with
the requisites under Article 62 of the Labor Code; the company’s authorized
representative and the respondents signed the agreements and these were ratified
by the company’s apprenticeship committee. The apprenticeship program itself
was approved and certified by the TESDA.22 The CA, thus, erred in overturning the
NLRC’s finding that the apprenticeship agreements were valid.
Third. There was no illegal dismissal as the respondent workers’ tenure ended with
the expiration of the apprenticeship agreement they entered into. There was,
therefore, no regular employer-employee relationship between Atlanta and the
respondent workers.
The Case for Costales, Almoite, Sebolino and Sagun
In a Comment filed on August 6, 2009,23 Costales, Almoite, Sebolino and Sagun pray
for a denial of the petition for being procedurally defective and for lack of merit.
The respondent workers contend that the petition failed to comply with Section 4,
Rule 45 of the Rules of Court which requires that the petition be accompanied by
supporting material portions of the records. The petitioners failed to attach to the
petition a copy of the Production and Work Schedule despite their submission that
the CA relied heavily on the document in finding the respondent workers’ prior
employment with Atlanta. They also did not attach a copy of the compromise
agreement purportedly executed by Costales and Almoite. For this reason, the
respondent workers submit that the petition should be dismissed.
The respondents posit that the CA committed no error in holding that they were
already Atlanta’s employees before they were engaged as apprentices, as
confirmed by the company’s Production and Work Schedule. 24 They maintain that
the Production and Work Schedule meets the requirement of substantial evidence
as the petitioners failed to question its authenticity. They point out that the
schedule was prepared by Rose A. Quirit and approved by Adolfo R. Lope, head of
the company’s PE/Spiral Section. They argue that it was highly unlikely that the
head of a production section of the company would prepare and assign work to the
complainants if the latter had not been company employees.
The respondent workers reiterate their mistrust of the Master List25 as evidence
that they were not employees of the company at the time they became
apprentices. They label the Master List as "self-serving, dubious and even if
considered as authentic, its content contradicts a lot of petitioner’s claim and
allegations,"26 thus -
1. Aside from the fact that the Master List is not legible, it contains only
the names of inactive employees. Even those found by the NLRC to have
been employed in the company (such as Almoite, Costales and Sagun) do
not appear in the list. If Costales and Almoite had been employed with
Atlanta since January 11, 2006, as the company claimed,27 their names
would have been in the list, considering that the Master List accounts for
all employees "as of May 2006" – the notation carried on top of each
page of the document.
2. There were no entries of employees hired or resigned in the years
2005 and 2006 despite the "as of May 2006" notation; several pages
making up the Master List contain names of employees for the years
1999 - 2004.
3. The fact that Atlanta presented the purported Master List instead of
the payroll raised serious doubts on the authenticity of the list.
In sum, the respondent workers posit that the presentation of the Master List
revealed the "intention of the herein petitioner[s] to perpetually hide the fact of
[their] prior employment."28
On the supposed apprenticeship agreements they entered into, Costales, Almoite,
Sebolino and Sagun refuse to accept the agreements’ validity, contending that the
company’s apprenticeship program is merely a ploy "to continually deprive [them]
of their rightful wages and benefits which are due them as regular
employees."29 They submit the following "indubitable facts and ratiocinations:"30
1. The apprenticeship agreements were submitted to TESDA only in 2005
(with dates of receipt on "1/4/05" & "2/22/05"31 ), when the agreements
were supposed to have been executed in April or May 2004. Thus, the
submission was made long after the starting date of the workers’
apprenticeship or even beyond the agreement’s completion/termination
date, in violation of Section 23, Rule VI, Book II of the Labor Code.
2. The respondent workers were made to undergo apprenticeship for
occupations different from those allegedly approved by TESDA. TESDA
approved Atlanta’s apprenticeship program on "Plastic Molder"32 and not
for extrusion molding process, engineering, pelletizing process and mixing
process.
3. The respondents were already skilled workers prior to the
apprenticeship program as they had been employed and made to work in
the different job positions where they had undergone training. Sagun and
Sebolino, together with Mabanag, Pedregoza, dela Cruz, Chiong,
Magalang and Alegria were even given production assignments and work
schedule at the PE/Spiral Section from May 11, 2004 to March 23, 2005,
and some of them were even assigned to the 3:00 p.m. – 11:00 p.m. and
graveyard shifts (11:00 p.m. – 7:00 a.m.) during the period.33
4. The respondent workers were required to continue as apprentices
beyond six months. The TESDA certificate of completion indicates that
the workers’ apprenticeship had been completed after six months. Yet,
they were suffered to work as apprentices beyond that period.
Costales, Almoite, Sebolino and Sagun resolutely maintain that they were illegally
dismissed, as the reason for the termination of their employment – notice of the
completion of the second apprenticeship agreement – did not constitute either a
just or authorized cause under Articles 282 and 283 of the Labor Code.
Finally, Costales and Almoite refuse to be bound by the compromise
agreement34 that Atlanta presented to defeat the two workers’ cause of action.
They claim that the supposed agreement is invalid as against them, principally
because they did not sign it.
The Court’s Ruling
The procedural issue
The respondent workers ask that the petition be dismissed outright for the
petitioners’ failure to attach to the petition a copy of the Production and Work
Schedule and a copy of the compromise agreement Costales and Almoite allegedly
entered into — material portions of the record that should accompany and support
the petition, pursuant to Section 4, Rule 45 of the Rules of Court.
In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo J. Garchitorena35 where
the Court addressed essentially the same issue arising from Section 2(d), Rule 42 of
the Rules of Court,36 we held that the phrase "of the pleadings and other material
portions of the record xxx as would support the allegation of the petition clearly
contemplates the exercise of discretion on the part of the petitioner in the
selection of documents that are deemed to be relevant to the petition. The crucial
issue to consider then is whether or not the documents accompanying the petition
sufficiently supported the allegations therein."37
As in Mariners, we find that the documents attached to the petition sufficiently
support the petitioners’ allegations. The accompanying CA decision38 and
resolution,39 as well as those of the labor arbiter40 and the NLRC,41 referred to the
parties’ position papers and even to their replies and rejoinders. Significantly, the
CA decision narrates the factual antecedents, defines the complainants’ cause of
action, and cites the arguments, including the evidence the parties adduced. If any,
the defect in the petition lies in the petitioners’ failure to provide legible copies of
some of the material documents mentioned, especially several pages in the
decisions of the labor arbiter and of the NLRC. This defect, however, is not fatal as
the challenged CA decision clearly summarized the labor tribunal’s rulings. We,
thus, find no procedural obstacle in resolving the petition on the merits.
The merits of the case
We find no merit in the petition. The CA committed no reversible error in nullifying
the NLRC decision42 and in affirming the labor arbiter’s ruling,43 as it applies to
Costales, Almoite, Sebolino and Sagun. Specifically, the CA correctly ruled that the
four were illegally dismissed because (1) they were already employees when they
were required to undergo apprenticeship and (2) apprenticeship agreements were
invalid.
The following considerations support the CA ruling.
First. Based on company operations at the time material to the case, Costales,
Almoite, Sebolino and Sagun were already rendering service to the company as
employees before they were made to undergo apprenticeship. The company itself
recognized the respondents’ status through relevant operational records – in the
case of Costales and Almoite, the CPS monthly report for December 200344 which
the NLRC relied upon and, for Sebolino and Sagun, the production and work
schedule for March 7 to 12, 200545 cited by the CA.
Under the CPS monthly report, Atlanta assigned Costales and Almoite to the first
shift (7:00 a.m. to 3:00 p.m.) of the Section’s work. The Production and Work
Schedules, in addition to the one noted by the CA, showed that Sebolino and Sagun
were scheduled on different shifts vis-à-vis the production and work of the
company’s PE/Spiral Section for the periods July 5-10, 2004;46 October 25-31,
2004;47 November 8-14, 2004;48 November 16-22, 2004;49 January 3-9,
2005;50 January 10-15, 2005;51 March 7-12, 200552 and March 17-23, 2005.53
We stress that the CA correctly recognized the authenticity of the operational
documents, for the failure of Atlanta to raise a challenge against these documents
before the labor arbiter, the NLRC and the CA itself. The appellate court, thus,
found the said documents sufficient to establish the employment of the
respondents before their engagement as apprentices.
Second. The Master List54 (of employees) that the petitioners heavily rely upon as
proof of their position that the respondents were not Atlanta’s employees, at the
time they were engaged as apprentices, is unreliable and does not inspire belief.
The list, consisting of several pages, is hardly legible. It requires extreme effort to
sort out the names of the employees listed, as well as the other data contained in
the list. For this reason alone, the list deserves little or no consideration. As the
respondents also pointed out, the list itself contradicts a lot of Atlanta’s claims and
allegations, thus: it lists only the names of inactive employees; even the names of
those the NLRC found to have been employed by Atlanta, like Costales and Almoite,
and those who even Atlanta claims attained regular status on January 11,
2006,55 do not appear in the list when it was supposed to account for all employees
"as of May 6, 2006." Despite the "May 6, 2006" cut off date, the list contains no
entries of employees who were hired or who resigned in 2005 and 2006. We note
that the list contains the names of employees from 1999 to 2004.
We cannot fault the CA for ignoring the Master List even if Bernardo, its head office
accountant, swore to its correctness and authenticity.56 Its substantive unreliability
gives it very minimal probative value. Atlanta would have been better served, in
terms of reliable evidence, if true copies of the payroll (on which the list was based,
among others, as Bernardo claimed in her affidavit) were presented
instead.1âwphi1
Third. The fact that Costales, Almoite, Sebolino and Sagun were already rendering
service to the company when they were made to undergo apprenticeship (as
established by the evidence) renders the apprenticeship agreements irrelevant as
far as the four are concerned. This reality is highlighted by the CA finding that the
respondents occupied positions such as machine operator, scaleman and extruder
operator - tasks that are usually necessary and desirable in Atlanta’s usual business
or trade as manufacturer of plastic building materials.57 These tasks and their
nature characterized the four as regular employees under Article 280 of the Labor
Code. Thus, when they were dismissed without just or authorized cause, without
notice, and without the opportunity to be heard, their dismissal was illegal under
the law.58
Even if we recognize the company’s need to train its employees through
apprenticeship, we can only consider the first apprenticeship agreement for the
purpose. With the expiration of the first agreement and the retention of the
employees, Atlanta had, to all intents and purposes, recognized the completion of
their training and their acquisition of a regular employee status. To foist upon them
the second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself,59 is a violation of the Labor Code’s
implementing rules60 and is an act manifestly unfair to the employees, to say the
least. This we cannot allow.
Fourth. The compromise agreement61 allegedly entered into by Costales and
Almoite, together with Ramos, Villagomez and Alegria, purportedly in settlement of
the case before the NLRC, is not binding on Costales and Almoite because they did
not sign it. The company itself admitted62 that while Costales and Almoite were
initially intended to be a part of the agreement, it did not pursue their inclusion
"due to their regularization as early as January 11, 2006."63

WHEREFORE, premises considered, we hereby DENY the petition for lack of

merit.1âwphi1 The assailed decision and resolution of the Court of Appeals are
AFFIRMED. Costs against the petitioner Atlanta Industries, Inc.

SO ORDERED.
C. Employment of Aliens
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 93666 April 22, 1991
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,
vs.
HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment,
HON. BIENVENIDO E. LAGUESMA, in his capacity as Acting Secretary of Labor and
Employment, and BASKETBALL COACHES ASSOCIATION OF THE
PHILIPPINES, respondents.
Sobrevinas, Diaz, Hayudini & Bodegon Law Office for petitioners.
Rodrigo, Cuevas & De Borja for respondent BCAP.
RESOLUTION
FELICIANO, J.:
On 1 May 1989, the National Capital Region of the Department of Labor and
Employment issued Alien Employment Permit No. M-0689-3-535 in favor of
petitioner Earl Timothy Cone, a United States citizen, as sports consultant and
assistant coach for petitioner General Milling Corporation ("GMC").
On 27 December 1989, petitioners GMC and Cone entered into a contract of
employment whereby the latter undertook to coach GMC's basketball team.
On 15 January 1990, the Board of Special Inquiry of the Commission on
Immigration and Deportation approved petitioner Cone's application for a change
of admission status from temporary visitor to pre-arranged employee.
On 9 February 1990, petitioner GMC requested renewal of petitioner Cone's alien
employment permit. GMC also requested that it be allowed to employ Cone as full-
fledged coach. The DOLE Regional Director, Luna Piezas, granted the request on 15
February 1990.
On 18 February 1990, Alien Employment Permit No. M-02903-881, valid until 25
December 1990, was issued.
Private respondent Basketball Coaches Association of the Philippines ("BCAP")
appealed the issuance of said alien employment permit to the respondent
Secretary of Labor who, on 23 April 1990, issued a decision ordering cancellation of
petitioner Cone's employment permit on the ground that there was no showing
that there is no person in the Philippines who is competent, able and willing to
perform the services required nor that the hiring of petitioner Cone would redound
to the national interest.
Petitioner GMC filed a Motion for Reconsideration and two (2) Supplemental
Motions for Reconsideration but said Motions were denied by Acting Secretary of
Labor Bienvenido E. Laguesma in an Order dated 8 June 1990.
Petitioners are now before the Court on a Petition for Certiorari, dated 14 June
1990, alleging that:
1. respondent Secretary of Labor gravely abused his discretion when he
revoked petitioner Cone's alien employment permit; and
2. Section 6 (c), Rule XIV, Book I of the Omnibus Rules Implementing the
Labor Code is null and void as it is in violation of the enabling law as the
Labor Code does not empower respondent Secretary to determine if the
employment of an alien would redound to national interest.
Deliberating on the present Petition for Certiorari, the Court considers that
petitioners have failed to show any grave abuse of discretion or any act without or
in excess of jurisdiction on the part of respondent Secretary of Labor in rendering
his decision, dated 23 April 1990, revoking petitioner Cone's Alien Employment
Permit.
The alleged failure to notify petitioners of the appeal filed by private respondent
BCAP was cured when petitioners were allowed to file their Motion for
Reconsideration before respondent Secretary of Labor.1
Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative
has no legal basis at all. Under Article 40 of the Labor Code, an employer seeking
employment of an alien must first obtain an employment permit from the
Department of Labor. Petitioner GMC's right to choose whom to employ is, of
course, limited by the statutory requirement of an alien employment permit.
Petitioners will not find solace in the equal protection clause of the Constitution. As
pointed out by the Solicitor-General, no comparison can be made between
petitioner Cone and Mr. Norman Black as the latter is "a long time resident of the
country," and thus, not subject to the provisions of Article 40 of the Labor Code
which apply only to "non-resident aliens." In any case, the term "non-resident
alien" and its obverse "resident alien," here must be given their technical
connotation under our law on immigration.
Neither can petitioners validly claim that implementation of respondent Secretary's
decision would amount to an impairment of the obligations of contracts. The
provisions of the Labor Code and its Implementing Rules and Regulations requiring
alien employment permits were in existence long before petitioners entered into
their contract of employment. It is firmly settled that provisions of applicable laws,
especially provisions relating to matters affected with public policy, are deemed
written into contracts.2 Private parties cannot constitutionally contract away the
otherwise applicable provisions of law.
Petitioners' contention that respondent Secretary of Labor should have deferred to
the findings of Commission on Immigration and Deportation as to the necessity of
employing petitioner Cone, is, again, bereft of legal basis. The Labor Code itself
specifically empowers respondent Secretary to make a determination as to the
availability of the services of a "person in the Philippines who is competent, able
and willing at the time of application to perform the services for which an alien is
desired."3
In short, the Department of Labor is the agency vested with jurisdiction to
determine the question of availability of local workers. The constitutional validity of
legal provisions granting such jurisdiction and authority and requiring proof of non-
availability of local nationals able to carry out the duties of the position involved,
cannot be seriously questioned.
Petitioners apparently also question the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the Implementing Rules, as
imposing a condition not found in the Labor Code itself. Section 6 (c), Rule XIV,
Book I of the Implementing Rules, provides as follows:
Section 6. Issuance of Employment Permit –– the Secretary of Labor may
issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements
of Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability
of any person in the Philippines who is competent and willing to do the
job for which the services of the applicant are desired.
(c) His assessment as to whether or not the employment of the applicant
will redound to the national interest;
(d) Admissibility of the alien as certified by the Commission on
Immigration and Deportation;
(e) The recommendation of the Board of Investments or other
appropriate government agencies if the applicant will be employed in
preferred areas of investments or in accordance with the imperative of
economic development;
xxx xxx xxx
(Emphasis supplied)
Article 40 of the Labor Code reads as follows:
Art. 40. Employment per unit of non-resident aliens. –– Any alien seeking
admission to the Philippines for employment purposes and any domestic
or foreign employer who desires to engage an alien for employment in
the Philippines shall obtain an employment permit from the Department
of Labor.
The employment permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-availability of a
person in the Philippines who is competent, able and willing at the time
of application to perform the services for which the alien is desired.
 For an enterprise registered in preferred areas of investments, said
employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise. (Emphasis supplied)
Petitioners apparently suggest that the Secretary of Labor is not authorized to take
into account the question of whether or not employment of an alien applicant
would "redound to the national interest" because Article 40 does not explicitly
refer to such assessment. This argument (which seems impliedly to concede that
the relationship of basketball coaching and the national interest is tenuous and
unreal) is not persuasive. In the first place, the second paragraph of Article 40 says:
"[t]he employment permit may be issued to a non-resident alien or to the applicant
employer after a determination of the non-availability of a person in the Philippines
who is competent, able and willing at the time of application to perform the
services for which the alien is desired." The permissive language employed in the
Labor Code indicates that the authority granted involves the exercise of discretion
on the part of the issuing authority. In the second place, Article 12 of the Labor
Code sets forth a statement of objectives that the Secretary of Labor should, and
indeed must, take into account in exercising his authority and jurisdiction granted
by the Labor Code,
Thus, we find petitioners' arguments on the above points of constitutional law too
insubstantial to require further consideration.1avvphi1
Petitioners have very recently manifested to this Court that public respondent
Secretary of Labor has reversed his earlier decision and has issued an Employment
Permit to petitioner Cone. Petitioners seek to withdraw their Petition
for Certiorari on the ground that it has become moot and academic.
While ordinarily this Court would dismiss a petition that clearly appears to have
become moot and academic, the circumstances of this case and the nature of the
questions raised by petitioners are such that we do not feel justified in leaving
those questions unanswered.4
Moreover, assuming that an alien employment permit has in fact been issued to
petitioner Cone, the basis of the reversal by the Secretary of Labor of his earlier
decision does not appear in the record. If such reversal is based on some view of
constitutional law or labor law different from those here set out, then such
employment permit, if one has been issued, would appear open to serious legal
objections.

ACCORDINGLY, the Court Resolved to DISMISS the Petition for certiorari for lack of
Art. 12. Statement of Objectives. –– It is the policy of the State:
merit. Costs against petitioners.

a) To promote and maintain a state of full employment through improved

manpower training, allocation and utilization;

xxx xxx xxx

c) To facilitate a free choice of available employment by persons seeking

work in conformity with the national interest;

d) To facilitate and regulate the movement of workers in conformity with

the national interest;

e) To regulate the employment of aliens, including the establishment of a

registration and/or work permit system;

xxx xxx xxx

 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 128845 June 1, 2000
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner,
vs.
HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and
Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting
Secretary of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and INTERNATIONAL SCHOOL,
INC., respondents.
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of
private respondent School, mostly Filipinos, cry discrimination. We agree. That the
local-hires are paid more than their colleagues in other schools is, of course, beside
the point. The point is that employees should be given equal pay for work of equal
value. That is a principle long honored in this jurisdiction. That is a principle that
rests on fundamental notions of justice. That is the principle we uphold
today.1âwphi1.nêt
Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established primarily
for dependents of foreign diplomatic personnel and other temporary residents.1 To
enable the School to continue carrying out its educational program and improve its
standard of instruction, Section 2(c) of the same decree authorizes the School to
employ its own teaching and management personnel selected by it either locally or
abroad, from Philippine or other nationalities, such personnel being exempt from
otherwise applicable laws and regulations attending their employment, except laws
that have been or will be enacted for the protection of employees.
Accordingly, the School hires both foreign and local teachers as members of its
faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The
School employs four tests to determine whether a faculty member should be
classified as a foreign-hire or a local hire:
a. What is one's domicile?
b. Where is one's home economy?
c. To which country does one owe economic allegiance?
d. Was the individual hired abroad specifically to work in the School and
was the School responsible for bringing that individual to the
Philippines?2
Should the answer to any of these queries point to the Philippines, the faculty
member is classified as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-
hires.1avvphi1 These include housing, transportation, shipping costs, taxes, and
home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five
percent (25%) more than local-hires. The School justifies the difference on two
"significant economic disadvantages" foreign-hires have to endure, namely: (a) the
"dislocation factor" and (b) limited tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his home country,
leave his family and friends, and take the risk of deviating from a promising
career path — all for the purpose of pursuing his profession as an educator, but
this time in a foreign land. The new foreign hire is faced with economic
realities: decent abode for oneself and/or for one's family, effective means of
transportation, allowance for the education of one's children, adequate
insurance against illness and death, and of course the primary benefit of a basic
salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the same
economic reality after his term: that he will eventually and inevitably return to
his home country where he will have to confront the uncertainty of obtaining
suitable employment after along period in a foreign land.
The compensation scheme is simply the School's adaptive measure to remain
competitive on an international level in terms of attracting competent
professionals in the field of international education.3
When negotiations for a new collective bargaining agreement were held on June
1995, petitioner International School Alliance of Educators, "a legitimate labor
union and the collective bargaining representative of all faculty members"4 of the
School, contested the difference in salary rates between foreign and local-hires.
This issue, as well as the question of whether foreign-hires should be included in
the appropriate bargaining unit, eventually caused a deadlock between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted
the Department of Labor and Employment (DOLE) to assume jurisdiction over the
dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano,
issued an Order resolving the parity and representation issues in favor of the
School. Then DOLE Secretary Leonardo A. Quisumbing subsequently denied
petitioner's motion for reconsideration in an Order dated March 19, 1997.
Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired
locally and classified as local hires.5 The Acting Secretary of Labor found that these
non-Filipino local-hires received the same benefits as the Filipino local-hires.
The compensation package given to local-hires has been shown to apply
to all, regardless of race. Truth to tell, there are foreigners who have
been hired locally and who are paid equally as Filipino local hires.6
The Acting secretary upheld the point-of-hire classification for the distinction in
salary rates:
The Principle "equal pay for equal work" does not find applications in the
present case. The international character of the School requires the hiring of
foreign personnel to deal with different nationalities and different cultures,
among the student population.
We also take cognizance of the existence of a system of salaries and benefits
accorded to foreign hired personnel which system is universally recognized. We
agree that certain amenities have to be provided to these people in order to
entice them to render their services in the Philippines and in the process
remain competitive in the international market.
Furthermore, we took note of the fact that foreign hires have limited contract
of employment unlike the local hires who enjoy security of tenure. To apply
parity therefore, in wages and other benefits would also require parity in other
terms and conditions of employment which include the employment which
include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions and
provisions for salary and professional compensation wherein the parties agree
as follows:
All members of the bargaining unit shall be compensated only in
accordance with Appendix C hereof provided that the Superintendent of
the School has the discretion to recruit and hire expatriate teachers from
abroad, under terms and conditions that are consistent with accepted
international practice.
Appendix C of said CBA further provides:
The new salary schedule is deemed at equity with the Overseas Recruited
Staff (OSRS) salary schedule. The 25% differential is reflective of the agreed
value of system displacement and contracted status of the OSRS as
differentiated from the tenured status of Locally Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of the
difference in the status of two types of employees, hence, the difference in
their salaries.
The Union cannot also invoke the equal protection clause to justify its claim of
parity. It is an established principle of constitutional law that the guarantee of
equal protection of the laws is not violated by legislation or private covenants
based on reasonable classification. A classification is reasonable if it is based on
substantial distinctions and apply to all members of the same class. Verily,
there is a substantial distinction between foreign hires and local hires, the
former enjoying only a limited tenure, having no amenities of their own in the
Philippines and have to be given a good compensation package in order to
attract them to join the teaching faculty of the School.7
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution8 in the
Article on Social Justice and Human Rights exhorts Congress to "give highest
priority to the enactment of measures that protect and enhance the right of all
people to human dignity, reduce social, economic, and political inequalities." The
very broad Article 19 of the Civil Code requires every person, "in the exercise of his
rights and in the performance of his duties, [to] act with justice, give everyone his
due, and observe honesty and good faith.
International law, which springs from general principles of law,9 likewise proscribes
discrimination. General principles of law include principles of equity, 10 i.e., the
general principles of fairness and justice, based on the test of what is
reasonable. 11 The Universal Declaration of Human Rights, 12 the International
Covenant on Economic, Social, and Cultural Rights, 13 the International Convention
on the Elimination of All Forms of Racial Discrimination, 14 the Convention against
Discrimination in Education, 15 the Convention (No. 111) Concerning Discrimination
in Respect of Employment and Occupation 16 — all embody the general principle
against discrimination, the very antithesis of fairness and justice. The Philippines,
through its Constitution, has incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed
in favor of capital, inequality and discrimination by the employer are all the more
reprehensible.
The Constitution 17 specifically provides that labor is entitled to "humane conditions
of work." These conditions are not restricted to the physical workplace — the
factory, the office or the field — but include as well the manner by which
employers treat their employees.
The Constitution 18 also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code 19 provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed." It would be an
affront to both the spirit and letter of these provisions if the State, in spite of its
primordial obligation to promote and ensure equal employment opportunities,
closes its eyes to unequal and discriminatory terms and conditions of
employment. 20
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.
Article 135, for example, prohibits and penalizes 21 the payment of lesser
compensation to a female employee as against a male employee for work of equal
value. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage membership in
any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural
Rights, supra, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favourable conditions of work,
which ensure, in particular:
a. Remuneration which provides all workers, as a minimum,
with:
(i) Fair wages and equal remuneration for work of
equal value without distinction of any kind, in
particular women being guaranteed conditions of
work not inferior to those enjoyed by men, with equal
pay for equal work;
xxx xxx xxx
The foregoing provisions impregnably institutionalize in this jurisdiction the long
honored legal truism of "equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries. 22 This rule applies to the School, its
"international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires. 23 The Court finds this argument a little
cavalier. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is
borne by logic and human experience. If the employer pays one employee less than
the rest, it is not for that employee to explain why he receives less or why the
others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence
here that foreign-hires perform 25% more efficiently or effectively than the local-
hires. Both groups have similar functions and responsibilities, which they perform
under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to
rationalize the distinction in salary rates without violating the principle of equal
work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense
for services performed." Similarly, the Philippine Legal Encyclopedia states that
"salary" is the "[c]onsideration paid at regular intervals for the rendering of
services." In Songco v. National Labor Relations Commission, 24 we said that:
"salary" means a recompense or consideration made to a person for his
pains or industry in another man's business. Whether it be derived from
"salarium," or more fancifully from "sal," the pay of the Roman soldier, it
carries with it the fundamental idea of compensation for services
rendered. (Emphasis supplied.)
While we recognize the need of the School to attract foreign-hires, salaries should
not be used as an enticement to the prejudice of local-hires. The local-hires
perform the same services as foreign-hires and they ought to be paid the same
salaries as the latter. For the same reason, the "dislocation factor" and the foreign-
hires' limited tenure also cannot serve as valid bases for the distinction in salary
rates. The dislocation factor and limited tenure affecting foreign-hires are
adequately compensated by certain benefits accorded them which are not enjoyed
by local-hires, such as housing, transportation, shipping costs, taxes and home
leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote
their welfare," 25 "to afford labor full protection." 26 The State, therefore, has the
right and duty to regulate the relations between labor and capital. 27 These
relations are not merely contractual but are so impressed with public interest that
labor contracts, collective bargaining agreements included, must yield to the
common good. 28 Should such contracts contain stipulations that are contrary to
public policy, courts will not hesitate to strike down these stipulations.
In this case, we find the point-of-hire classification employed by respondent School
to justify the distinction in the salary rates of foreign-hires and local hires to be an
invalid classification. There is no reasonable distinction between the services
rendered by foreign-hires and local-hires. The practice of the School of according
higher salaries to foreign-hires contravenes public policy and, certainly, does not
deserve the sympathy of this Court.1avvphi1
We agree, however, that foreign-hires do not belong to the same bargaining unit as
the local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all or
less than all of the entire body of employees, consistent with equity to the
employer, indicate to be the best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of the law." 29 The factors in
determining the appropriate collective bargaining unit are (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees' interest, such
as substantial similarity of work and duties, or similarity of compensation and
working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. 30 The basic test of an
asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective
bargaining rights. 31
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective
bargaining history in the School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure.
Although foreign-hires perform similar functions under the same working
conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their
status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either
group the exercise of their respective collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED
IN PART. The Orders of the Secretary of Labor and Employment dated June 10,
1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they
uphold the practice of respondent School of according foreign-hires higher salaries
than local-hires.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013
ANDREW JAMES MCBURNIE, Petitioner,
vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.
RESOLUTION
REYES, J.:
For resolution are the –
(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon),
EGI-Managers, Inc. (EGI) and E. Ganzon, Inc. (respondents) on March 27,
2012, seeking a reconsideration of the Court’s Decision2 dated September
18, 2009 that ordered the dismissal of their appeal to the National Labor
Relations Commission (NLRC) for failure to post additional appeal bond in
the amount of ₱54,083,910.00; and
(2) motion for reconsideration3 filed by petitioner Andrew James
McBurnie (McBurnie) on September 26, 2012, assailing the Court en
banc’s Resolution4 dated September 4, 2012 that (1) accepted the case
from the Court’s Third Division and (2) enjoined the implementation of
the Labor Arbiter’s (LA) decision finding him to be illegally dismissed by
the respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent facts
and proceedings –
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for
illegal dismissal and other monetary claims against the respondents. McBurnie
claimed that on May 11, 1999, he signed a five-year employment agreement5 with
the company EGI as an Executive Vice-President who shall oversee the
management of the company’s hotels and resorts within the Philippines. He
performed work for the company until sometime in November 1999, when he
figured in an accident that compelled him to go back to Australia while
recuperating from his injuries. While in Australia, he was informed by respondent
Ganzon that his services were no longer needed because their intended project
would no longer push through.
The respondents opposed the complaint, contending that their agreement with
McBurnie was to jointly invest in and establish a company for the management of
hotels. They did not intend to create an employer-employee relationship, and the
execution of the employment contract that was being invoked by McBurnie was
solely for the purpose of allowing McBurnie to obtain an alien work permit in the
Philippines. At the time McBurnie left for Australia for his medical treatment, he
had not yet obtained a work permit.
In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been
illegally dismissed from employment, and thus entitled to receive from the
respondents the following amounts: (a) US$985,162.00 as salary and benefits for
the unexpired term of their employment contract, (b) ₱2,000,000.00 as moral and
exemplary damages, and (c) attorney’s fees equivalent to 10% of the total
monetary award.
Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC.7 On
November 5, 2004, they filed their Memorandum of Appeal8 and Motion to Reduce
Bond9, and posted an appeal bond in the amount of ₱100,000.00. The respondents
contended in their Motion to Reduce Bond, inter alia, that the monetary awards of
the LA were null and excessive, allegedly with the intention of rendering them
incapable of posting the necessary appeal bond. They claimed that an award of
"more than ₱60 Million Pesos to a single foreigner who had no work permit and
who left the country for good one month after the purported commencement of
his employment" was a patent nullity.10 Furthermore, they claimed that because of
their business losses that may be attributed to an economic crisis, they lacked the
capacity to pay the bond of almost ₱60 Million, or even the millions of pesos in
premium required for such bond.
On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining that
"in cases involving monetary award, an employer seeking to appeal the [LA’s]
decision to the Commission is unconditionally required by Art. 223, Labor Code to
post bond in the amount equivalent to the monetary award x x x."12 Thus, the NLRC
required from the respondents the posting of an additional bond in the amount of
₱54,083,910.00.
When their motion for reconsideration was denied,13 the respondents decided to
elevate the matter to the Court of Appeals (CA) via the Petition for Certiorari and
Prohibition (With Extremely Urgent Prayer for the Issuance of a Preliminary
Injunction and/or Temporary Restraining Order)14 docketed as CA-G.R. SP No.
90845.
In the meantime, in view of the respondents’ failure to post the required additional
bond, the NLRC dismissed their appeal in a Resolution15 dated March 8, 2006. The
respondents’ motion for reconsideration was denied on June 30, 2006.16 This
prompted the respondents to file with the CA the Petition for Certiorari (With
Urgent Prayers for the Immediate Issuance of a Temporary Restraining Order and a
Writ of Preliminary Injunction)17 docketed as CA-G.R. SP No. 95916, which was later
consolidated with CA-G.R. SP No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the respondents’
application for a writ of preliminary injunction. It directed the NLRC, McBurnie, and
all persons acting for and under their authority to refrain from causing the
execution and enforcement of the LA’s decision in favor of McBurnie, conditioned
upon the respondents’ posting of a bond in the amount of ₱10,000,000.00.
McBurnie sought reconsideration of the issuance of the writ of preliminary
injunction, but this was denied by the CA in its Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on Certiorari20 docketed
as G.R. Nos. 178034 and 178117, assailing the CA Resolutions that granted the
respondents’ application for the injunctive writ. On July 4, 2007, the Court denied
the petition on the ground of McBurnie’s failure to comply with the 2004 Rules on
Notarial Practice and to sufficiently show that the CA committed any reversible
error.21 A motion for reconsideration was denied with finality in a
Resolution22 dated October 8, 2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for
Reconsideration and (2) To Admit the Attached Supplemental Motion for
Reconsideration,23 which was treated by the Court as a second motion for
reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of
Court. Thus, the motion for leave was denied by the Court in a Resolution24 dated
November 26, 2007. The Court’s Resolution dated July 4, 2007 then became final
and executory on November 13, 2007; accordingly, entry of judgment was made in
G.R. Nos. 178034 and 178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R.
SP No. 95916 and rendered its Decision26 dated October 27, 2008, allowing the
respondents’ motion to reduce appeal bond and directing the NLRC to give due
course to their appeal. The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition
docketed as CA GR SP No. 90845 and the petition for certiorari docketed as CA GR
SP No. 95916 are GRANTED. Petitioners’ Motion to Reduce Appeal Bond is
GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the amount of
₱10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners’
appeal in CA GR SP No. 95916 which is ordered remanded to the NLRC for further
proceedings.
SO ORDERED.27
On the issue28 of the NLRC’s denial of the respondents’ motion to reduce appeal
bond, the CA ruled that the NLRC committed grave abuse of discretion in
immediately denying the motion without fixing an appeal bond in an amount that
was reasonable, as it denied the respondents of their right to appeal from the
decision of the LA.29 The CA explained that "(w)hile Art. 223 of the Labor Code
requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of
the NLRC Rules of Procedure, as amended, recognized as exception a motion to
reduce bond upon meritorious grounds and upon posting of a bond in a reasonable
amount in relation to the monetary award."30
On the issue31 of the NLRC’s dismissal of the appeal on the ground of the
respondents’ failure to post the additional appeal bond, the CA also found grave
abuse of discretion on the part of the NLRC, explaining that an appeal bond in the
amount of ₱54,083,910.00 was prohibitive and excessive. Moreover, the appellate
court cited the pendency of the petition for certiorari over the denial of the motion
to reduce bond, which should have prevented the NLRC from immediately
dismissing the respondents’ appeal.32
Undeterred, McBurnie filed a motion for reconsideration. At the same time, the
respondents moved that the appeal be resolved on the merits by the CA. On March
3, 2009, the CA issued a Resolution33 denying both motions. McBurnie then filed
with the Court the Petition for Review on Certiorari34 docketed as G.R. Nos.
186984-85.
In the meantime, the NLRC, acting on the CA’s order of remand, accepted the
appeal from the LA’s decision, and in its Decision35 dated November 17, 2009,
reversed and set aside the Decision of the LA, and entered a new one dismissing
McBurnie’s complaint. It explained that based on records, McBurnie was never an
employee of any of the respondents, but a potential investor in a project that
included said respondents, barring a claim of dismissal, much less, an illegal
dismissal. Granting that there was a contract of employment executed by the
parties, McBurnie failed to obtain a work permit which would have allowed him to
work for any of the respondents.36 In the absence of such permit, the employment
agreement was void and thus, could not be the source of any right or obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its
Decision37 which reversed the CA Decision dated October 27, 2008 and Resolution
dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-
G.R. SP Nos. 90845 and 95916 dated October 27, 2008 granting respondents’
Motion to Reduce Appeal Bond and ordering the National Labor Relations
Commission to give due course to respondents’ appeal, and its March 3, 2009
Resolution denying petitioner’s motion for reconsideration, are REVERSED and SET
ASIDE. The March 8, 2006 and June 30, 2006 Resolutions of the National Labor
Relations Commission in NLRC NCR CA NO. 042913-05 dismissing respondents’
appeal for failure to perfect an appeal and denying their motion for
reconsideration, respectively, are REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents’ failure to post a bond equivalent in
amount to the LA’s monetary award was fatal to the appeal.39 Although an appeal
bond may be reduced upon motion by an employer, the following conditions must
first be satisfied: (1) the motion to reduce bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant. Unless the NLRC grants the motion to reduce the cash bond
within the 10-day reglementary period to perfect an appeal from a judgment of the
LA, the employer is mandated to post the cash or surety bond securing the full
amount within the said 10-day period.40 The respondents’ initial appeal bond of
₱100,000.00 was grossly inadequate compared to the LA’s monetary award.
The respondents’ first motion for reconsideration41 was denied by the Court for
lack of merit via a Resolution42 dated December 14, 2009.
Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a
motion for reconsideration with motion to recall and expunge from the records the
NLRC Decision dated November 17, 2009.43 The motion was granted by the NLRC in
its Decision44 dated January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the Decision
dated September 18, 2009, the respondents filed with the Court a Motion for Leave
to Submit Attached Second Motion for Reconsideration46 and Second Motion for
Reconsideration,47 which motion for leave was granted in a Resolution48 dated
March 15, 2010. McBurnie was allowed to submit his comment on the second
motion, and the respondents, their reply to the comment. On January 25, 2012,
however, the Court issued a Resolution49 denying the second motion "for lack of
merit," "considering that a second motion for reconsideration is a prohibited
pleading x x x."50
The Court’s Decision dated September 18, 2009 became final and executory on
March 14, 2012. Thus, entry of judgment51 was made in due course, as follows:
ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in the above-
entitled cases was filed in this Office, the dispositive part of which reads as follows:
xxxx
and that the same has, on March 14, 2012 become final and executory and is
hereby recorded in the Book of Entries of Judgments.52
The Entry of Judgment indicated that the same was made for the Court’s Decision
rendered in G.R. Nos. 186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third
Motion for Reconsideration, with an attached Motion for Reconsideration (on the
Honorable Court’s 25 January 2012 Resolution) with Motion to Refer These Cases
to the Honorable Court En Banc.53 The third motion for reconsideration is founded
on the following grounds:
I.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT
ACTUALLY GRANTED RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND
MOTION FOR RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25
JANUARY 2012 RESOLUTION CANNOT DENY THE " SECOND MOTION FOR
RECONSIDERATION " ON THE GROUND THAT IT IS A PROHIBITED PLEADING.
MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY PECULIAR
CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT
CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS’ "SECOND MOTION FOR
RECONSIDERATION," WHICH ARE:
II.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE
OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND
SPECIAL MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS
APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH
RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW
SHOULD BE GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE SPECIAL
MERITORIOUS CIRCUMSTANCES AND ISSUES.
IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN ₱60
MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO
WORKING VISA.
V.
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS
COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE
AGAINST THE NLRC.
VI.
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS
NOVEMBER 17, 2009 DECISION.
VII.
THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH
VERY SERIOUS IRREGULARITIES.
VIII.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.
IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY
MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE
[LA] (WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE
EXPERTS, INC., BUT NOT OF ANY OF THE RESPONDENTS.
(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO
GANZON CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR
EVEN DISMISSED BY ANY OF THE RESPONDENTS AND PETITIONER EVEN
PROMISED TO PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS.
PETITIONER PRESENTED WORK FOR CORONADO BEACH RESORT WHICH
IS [NEITHER] OWNED NOR CONNECTED WITH ANY OF THE
RESPONDENTS.
 (E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF
THERE WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT
PETITIONER WAS DISMISSED BY THE RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS
AFTER THE START OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS
STILL NOT RETURNED TO THE PHILIPPINES AS CONFIRMED BY THE
BUREAU OF IMMIGRATION.
(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED
BEFORE THE NLRC ADMINISTERING OFFICER AS INDICATED IN THE
COMPLAINT SHEET SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE
COMPLAINT WAS FILED AND HE NEVER CAME BACK.54
On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case
from the Third Division. It also issued a temporary restraining order (TRO) enjoining
the implementation of the LA’s Decision dated September 30, 2004. This prompted
McBurnie’s filing of a Motion for Reconsideration,57 where he invoked the fact that
the Court’s Decision dated September 18, 2009 had become final and executory,
with an entry of judgment already made by the Court.
Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second hard look of
the parties’ arguments and the records of the case, the Court has ascertained that
a reconsideration of this Court’s Decision dated September 18, 2009 and
Resolutions dated December 14, 2009 and January 25, 2012, along with the lifting
of the entry of judgment in G.R. No. 186984-85, is in order.
The Court’s acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions for
reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of the Rules of
Court provides that "no second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained." The rule rests on the basic tenet
of immutability of judgments. "At some point, a decision becomes final and
executory and, consequently, all litigations must come to an end."58
The general rule, however, against second and subsequent motions for
reconsideration admits of settled exceptions. For one, the present Internal Rules of
the Supreme Court, particularly Section 3, Rule 15 thereof, provides:
Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a
second motion for reconsideration, and any exception to this rule can only be
granted in the higher interest of justice by the Court en banc upon a vote of at least
two-thirds of its actual membership. There is reconsideration "in the higher interest
of justice" when the assailed decision is not only legally erroneous, but is likewise
patently unjust and potentially capable of causing unwarranted and irremediable
injury or damage to the parties. A second motion for reconsideration can only be
entertained before the ruling sought to be reconsidered becomes final by
operation of law or by the Court’s declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second motions for
reconsideration "in the higher interest of substantial justice," as allowed under the
Internal Rules when the assailed decision is "legally erroneous," "patently unjust"
and "potentially capable of causing unwarranted and irremediable injury or
damage to the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET,
Inc.),59 we also explained that a second motion for reconsideration may be allowed
in instances of "extraordinarily persuasive reasons and only after an express leave
shall have been obtained."60 In Apo Fruits Corporation v. Land Bank of the
Philippines,61 we allowed a second motion for reconsideration as the issue involved
therein was a matter of public interest, as it pertained to the proper application of
a basic constitutionally-guaranteed right in the government’s implementation of its
agrarian reform program. In San Miguel Corporation v. NLRC,62 the Court set aside
the decisions of the LA and the NLRC that favored claimants-security guards upon
the Court’s review of San Miguel Corporation’s second motion for reconsideration.
In Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al.,63 the Court en banc
reversed on a third motion for reconsideration the ruling of the Court’s Division on
therein private respondents’ claim for wages and monetary benefits.
It is also recognized that in some instances, the prudent action towards a just
resolution of a case is for the Court to suspend rules of procedure, for "the power
of this Court to suspend its own rules or to except a particular case from its
operations whenever the purposes of justice require it, cannot be questioned." 64 In
De Guzman v. Sandiganbayan,65 the Court, thus, explained:
The rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must
always be avoided. Even the Rules of Court envision this liberality. This power to
suspend or even disregard the rules can be so pervasive and encompassing so as to
alter even that which this Court itself has already declared to be final, as we are
now compelled to do in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth guidelines in the
dispensation of justice but not to bind and chain the hand that dispenses it, for
otherwise, courts will be mere slaves to or robots of technical rules, shorn of
judicial discretion. That is precisely why courts in rendering real justice have always
been, as they in fact ought to be, conscientiously guided by the norm that when on
the balance, technicalities take a backseat against substantive rights, and not the
other way around. Truly then, technicalities, in the appropriate language of Justice
Makalintal, "should give way to the realities of the situation." x x x.66 (Citations
omitted)
Consistent with the foregoing precepts, the Court has then reconsidered even
decisions that have attained finality, finding it more appropriate to lift entries of
judgments already made in these cases. In Navarro v. Executive Secretary,67 we
reiterated the pronouncement in De Guzman that the power to suspend or even
disregard rules of procedure can be so pervasive and compelling as to alter even
that which this Court itself has already declared final. The Court then recalled in
Navarro an entry of judgment after it had determined the validity and
constitutionality of Republic Act No. 9355, explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of entries of
judgment in light of attendant extraordinary circumstances. The power to suspend
or even disregard rules of procedure can be so pervasive and compelling as to alter
even that which this Court itself had already declared final. In this case, the
compelling concern is not only to afford the movants-intervenors the right to be
heard since they would be adversely affected by the judgment in this case despite
not being original parties thereto, but also to arrive at the correct interpretation of
the provisions of the [Local Government Code (LGC)] with respect to the creation of
local government units. x x x.68 (Citations omitted)
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a
miscarriage of justice. This justification was likewise applied in Tan Tiac Chiong v.
Hon. Cosico,70 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA ,
where the case was elevated to this Court and a first and second motion for
reconsideration had been denied with finality , the Court, in the interest of
substantial justice, recalled the Entry of Judgment as well as the letter of
transmittal of the records to the Court of Appeals.71 (Citation omitted)
In Barnes v. Judge Padilla,72 we ruled:
A final and executory judgment can no longer be attacked by any of the parties or
be modified, directly or indirectly, even by the highest court of the land.
However, this Court has relaxed this rule in order to serve substantial justice
considering (a) matters of life, liberty, honor or property, (b) the existence of
special or compelling circumstances, (c) the merits of the case, (d) a cause not
entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (e) a lack of any showing that the review sought is merely
frivolous and dilatory, and (f) the other party will not be unjustly prejudiced
thereby.73 (Citations omitted)
As we shall explain, the instant case also qualifies as an exception to, first, the
proscription against second and subsequent motions for reconsideration, and
second, the rule on immutability of judgments; a reconsideration of the Decision
dated September 18, 2009, along with the Resolutions dated December 14, 2009
and January 25, 2012, is justified by the higher interest of substantial justice.
To begin with, the Court agrees with the respondents that the Court’s prior resolve
to grant , and not just merely note, in a Resolution dated March 15, 2010 the
respondents’ motion for leave to submit their second motion for reconsideration
already warranted a resolution and discussion of the motion for reconsideration on
its merits. Instead of doing this, however, the Court issued on January 25, 2012 a
Resolution74 denying the motion to reconsider for lack of merit, merely citing that it
was a "prohibited pleading under Section 2, Rule 52 in relation to Section 4, Rule 56
of the 1997 Rules of Civil Procedure, as amended."75 In League of Cities of the
Philippines (LCP) v. Commission on Elections,76 we reiterated a ruling that when a
motion for leave to file and admit a second motion for reconsideration is granted
by the Court, the Court therefore allows the filing of the second motion for
reconsideration. In such a case, the second motion for reconsideration is no longer
a prohibited pleading. Similarly in this case, there was then no reason for the Court
to still consider the respondents’ second motion for reconsideration as a prohibited
pleading, and deny it plainly on such ground. The Court intends to remedy such
error through this resolution.
More importantly, the Court finds it appropriate to accept the pending motion for
reconsideration and resolve it on the merits in order to rectify its prior disposition
of the main issues in the petition. Upon review, the Court is constrained to rule
differently on the petitions. We have determined the grave error in affirming the
NLRC’s rulings, promoting results that are patently unjust for the respondents, as
we consider the facts of the case, pertinent law, jurisprudence, and the degree of
the injury and damage to the respondents that will inevitably result from the
implementation of the Court’s Decision dated September 18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the sufficiency of the
appeal bond that was posted by the respondents. The present rule on the matter is
Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was substantially the
same provision in effect at the time of the respondents’ appeal to the NLRC, and
which reads:
RULE VI
APPEALS
Sec. 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 cash or surety bond. The appeal bond shall either be in cash or
surety in an amount equivalent to the monetary award, exclusive of damages and
attorney’s fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious grounds and
upon the posting of a bond in a reasonable amount in relation to the monetary
award.
The filing of the motion to reduce bond without compliance with the requisites in
the preceding paragraph shall not stop the running of the period to perfect an
appeal. (Emphasis supplied)
While the CA, in this case, allowed an appeal bond in the reduced amount of
₱10,000,000.00 and then ordered the case’s remand to the NLRC, this Court’s
Decision dated September 18, 2009 provides otherwise, as it reads in part:
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 lawmakers
clearly intended to make the bond a mandatory requisite for the perfection of an
appeal by the employer as inferred from the provision that an appeal by the
employer may be perfected "only upon the posting of a cash or surety bond." The
word "only" makes it clear that the posting of a cash or surety bond by the
employer is the essential and exclusive means by which an employer’s appeal may
be perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction
upon the NLRC. Non-compliance therewith 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.
xxxx
Thus, 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 would
deem such insufficient posting as sufficient to perfect the appeal.
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. 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 10-day period.77 (Emphasis supplied;
underscoring ours)
To begin with, the Court rectifies its prior pronouncement – the unqualified
statement that even an appellant who seeks a reduction of an appeal bond before
the NLRC is expected to post a cash or surety bond securing the full amount of the
judgment award within the 10-day reglementary period to perfect the appeal.
The suspension of the period to
perfect the appeal upon the filing of
a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing of a
motion to reduce bond, coupled with compliance with the two conditions
emphasized in Garcia v. KJ Commercial78 for the grant of such motion, namely, (1) a
meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice
to suspend the running of the period to perfect an appeal from the labor arbiter’s
decision to the NLRC.79 To require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions which allow
an appellant to seek a reduction of the bond. Thus, we explained in Garcia:
The filing of a motion to reduce bond and compliance with the two conditions stop
the running of the period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce bond, and it
may rule on the motion beyond the 10-day period within which to perfect an
appeal. Obviously, at the time of the filing of the motion to reduce bond and
posting of a bond in a reasonable amount, there is no assurance whether the
appellant’s motion is indeed based on "meritorious ground" and whether the bond
he or she posted is of a "reasonable amount." Thus, the appellant always runs the
risk of failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond, the
appellant must be allowed to wait for the ruling of the NLRC on the motion even
beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and
rules that there is indeed meritorious ground and that the amount of the bond
posted is reasonable, then the appeal is perfected. If the NLRC denies the motion,
the appellant may still file a motion for reconsideration as provided under Section
15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and
rules that there is indeed meritorious ground and that the amount of the bond
posted is reasonable, then the appeal is perfected. If the NLRC denies the motion,
then the decision of the labor arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall not stop the
running of the period to perfect an appeal is not absolute. The Court may relax the
rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held:
"Jurisprudence tells us that in labor cases, an appeal from a decision involving a
monetary award may be perfected only upon the posting of cash or surety bond.
The Court, however, has relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their merits. These
circumstances include: (1) fundamental consideration of substantial justice; (2)
prevention of miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the amount and the
issue involved."80 (Citations omitted and emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce the
bond, without even considering the respondents’ arguments and totally unmindful
of the rules and jurisprudence that allow the bond’s reduction. Instead of resolving
the motion to reduce the bond on its merits, the NLRC insisted on an amount that
was equivalent to the monetary award, merely explaining:
We are constrained to deny respondents’ motion for reduction. As held by the
Supreme Court in a recent case, in cases involving monetary award, an employer
seeking to appeal the Labor Arbiter’s decision to the Commission is unconditionally
required by Art. 223, Labor Code to post bond in the amount equivalent to the
monetary award (Calabash Garments vs. NLRC, G.R. No. 110827, August 8, 1996). x
x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to fully decide
on the motion. It refused to at least make a preliminary determination of the
merits of the appeal, as it held:
We are constrained to dismiss respondents’ Motion for Reconsideration.
Respondents’ contention that the appeal bond is excessive and based on a decision
which is a patent nullity involves the merits of the case. x x x82
Prevailing rules and jurisprudence
allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents’ motion
without considering the respondents’ arguments, it effectively denied the
respondents of their opportunity to seek a reduction of the bond even when the
same is allowed under the rules and settled jurisprudence. It was equivalent to the
NLRC’s refusal to exercise its discretion, as it refused to determine and rule on a
showing of meritorious grounds and the reasonableness of the bond tendered
under the circumstances.83 Time and again, the Court has cautioned the NLRC to
give Article 223 of the Labor Code, particularly the provisions requiring bonds in
appeals involving monetary awards, a liberal interpretation in line with the desired
objective of resolving controversies on the merits. 84 The NLRC’s failure to take
action on the motion to reduce the bond in the manner prescribed by law and
jurisprudence then cannot be countenanced. Although an appeal by parties from
decisions that are adverse to their interests is neither a natural right nor a part of
due process, it is an essential part of our judicial system. Courts should proceed
with caution so as not to deprive a party of the right to appeal, but rather, ensure
that every party has the amplest opportunity for the proper and just disposition of
their cause, free from the constraints of technicalities.85 Considering the mandate
of labor tribunals, the principle equally applies to them.
Given the circumstances of the case, the Court’s affirmance in the Decision dated
September 18, 2009 of the NLRC’s strict application of the rule on appeal bonds
then demands a re-examination. Again, the emerging trend in our jurisprudence is
to afford every party-litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities.86 Section 2,
Rule I of the NLRC Rules of Procedure also provides the policy that "the Rules shall
be liberally construed to carry out the objectives of the Constitution, the Labor
Code of the Philippines and other relevant legislations, and to assist the parties in
obtaining just, expeditious and inexpensive resolution and settlement of labor
disputes."87
In accordance with the foregoing, although the general rule provides that an appeal
in labor cases from a decision involving a monetary award may be perfected only
upon the posting of a cash or surety bond, the Court has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on their
merits. These circumstances include: (1) the fundamental consideration of
substantial justice; (2) the prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal
merits, and the amount and the issue involved.88 Guidelines that are applicable in
the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
Corporation.89 The bond requirement in appeals involving monetary awards has
been and may be relaxed in meritorious cases, including instances in which (1)
there was substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired
objective of resolving controversies on the merits, or (4) the appellants, at the very
least, exhibited their willingness and/or good faith by posting a partial bond during
the reglementary period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article 22392 of the
Labor Code, as amended by Republic Act No. 6715, which requires a cash or surety
bond in an amount equivalent to the monetary award in the judgment appealed
from may be considered a jurisdictional requirement for the perfection of an
appeal, nevertheless, adhering to the principle that substantial justice is better
served by allowing the appeal on the merits to be threshed out by the NLRC, the
foregoing requirement of the law should be given a liberal interpretation.
As the Court, nonetheless, remains firm on the importance of appeal bonds in
appeals from monetary awards of LAs, we stress that the NLRC, pursuant to Section
6, Rule VI of the NLRC Rules of Procedure, shall only accept motions to reduce bond
that are coupled with the posting of a bond in a reasonable amount. Time and
again, we have explained that the bond requirement imposed upon appellants in
labor cases is intended to ensure the satisfaction of awards that are made in favor
of appellees, in the event that their claims are eventually sustained by the
courts.93 On the part of the appellants, its posting may also signify their good faith
and willingness to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bond’s filing, the question of what
constitutes "a reasonable amount of bond" that must accompany the motion may
be subject to differing interpretations of litigants. The judgment of the NLRC which
has the discretion under the law to determine such amount cannot as yet be
invoked by litigants until after their motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his
opportunity to seek a reduction of the required bond and thus, to appeal, when the
NLRC eventually disagrees with the party’s assessment. These have also resulted in
the filing of numerous petitions against the NLRC, citing an alleged grave abuse of
discretion on the part of the labor tribunal for its finding on the sufficiency or
insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the litigants’
and the NLRC’s guidance on the amount of bond that shall hereafter be filed with a
motion for a bond’s reduction. To ensure that the provisions of Section 6, Rule VI of
the NLRC Rules of Procedure that give parties the chance to seek a reduction of the
appeal bond are effectively carried out, without however defeating the benefits of
the bond requirement in favor of a winning litigant, all motions to reduce bond that
are to be filed with the NLRC shall be accompanied by the posting of a cash or
surety bond equivalent to 10% of the monetary award that is subject of the appeal,
which shall provisionally be deemed the reasonable amount of the bond in the
meantime that an appellant’s motion is pending resolution by the Commission. In
conformity with the NLRC Rules, the monetary award, for the purpose of
computing the necessary appeal bond, shall exclude damages and attorney’s
fees.94 Only after the posting of a bond in the required percentage shall an
appellant’s period to perfect an appeal under the NLRC Rules be deemed
suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its
discretion, given that the percentage of bond that is set by this guideline shall be
merely provisional. The NLRC retains its authority and duty to resolve the motion
and determine the final amount of bond that shall be posted by the appellant, still
in accordance with the standards of "meritorious grounds" and "reasonable
amount". Should the NLRC, after considering the motion’s merit, determine that a
greater amount or the full amount of the bond needs to be posted by the
appellant, then the party shall comply accordingly. The appellant shall be given a
period of 10 days from notice of the NLRC order within which to perfect the appeal
by posting the required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond
In all cases, the reduction of the appeal bond shall be justified by meritorious
grounds and accompanied by the posting of the required appeal bond in a
reasonable amount.
The requirement on the existence of a "meritorious ground" delves on the worth of
the parties’ arguments, taking into account their respective rights and the
circumstances that attend the case. The condition was emphasized in University
Plans Incorporated v. Solano,95 wherein the Court held that while the NLRC’s
Revised Rules of Procedure "allows the [NLRC] 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."96 By jurisprudence, the merit referred to may pertain to an appellant’s
lack of financial capability to pay the full amount of the bond,97 the merits of the
main appeal such as when there is a valid claim that there was no illegal dismissal
to justify the award,98 the absence of an employer-employee
relationship,99 prescription of claims,100 and other similarly valid issues that are
raised in the appeal.101 For the purpose of determining a "meritorious ground", the
NLRC is not precluded from receiving evidence, or from making a preliminary
determination of the merits of the appellant’s contentions.102
In this case, the NLRC then should have considered the respondents’ arguments in
the memorandum on appeal that was filed with the motion to reduce the requisite
appeal bond. Although a consideration of said arguments at that point would have
been merely preliminary and should not in any way bind the eventual outcome of
the appeal, it was apparent that the respondents’ defenses came with an indication
of merit that deserved a full review of the decision of the LA. The CA, by its
Resolution dated February 16, 2007, even found justified the issuance of a
preliminary injunction to enjoin the immediate execution of the LA’s decision, and
this Court, a temporary restraining order on September 4, 2012.
Significantly, following the CA’s remand of the case to the NLRC, the latter even
rendered a Decision that contained findings that are inconsistent with McBurnie’s
claims. The NLRC reversed and set aside the decision of the LA, and entered a new
one dismissing McBurnie’s complaint. It explained that McBurnie was not an
employee of the respondents; thus, they could not have dismissed him from
employment. The purported employment contract of the respondents with the
petitioner was qualified by the conditions set forth in a letter dated May 11, 1999,
which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,
It is understood that this Contract is made subject to the understanding that it is
effective only when the project financing for our Baguio Hotel project pushed
through.
The agreement with EGI Managers, Inc. is made now to support your need to
facilitate your work permit with the Department of Labor in view of the expiration
of your contract with Pan Pacific.
Regards,
Sgd. Eulalio Ganzon (p. 203, Records)103
For the NLRC, the employment agreement could not have given rise to an
employer-employee relationship by reason of legal impossibility. The two
conditions that form part of their agreement, namely, the successful completion of
the project financing for the hotel project in Baguio City and McBurnie’s acquisition
of an Alien Employment Permit, remained unsatisfied.104 The NLRC concluded that
McBurnie was instead a potential investor in a project that included Ganzon, but
the said project failed to pursue due to lack of funds. Any work performed by
McBurnie in relation to the project was merely preliminary to the business venture
and part of his "due diligence" study before pursuing the project, "done at his own
instance, not in furtherance of the employment contract but for his own
investment purposes."105 Lastly, the alleged employment of the petitioner would
have been void for being contrary to law, since it is undisputed that McBurnie did
not have any work permit. The NLRC declared:
Absent an employment permit, any employment relationship that McBurnie
contemplated with the respondents was void for being contrary to law. A void or
inexistent contract, in turn, has no force and effect from the beginning as if it had
never been entered into. Thus, without an Alien Employment Permit, the
"Employment Agreement" is void and could not be the source of a right or
obligation. In support thereof, the DOLE issued a certification that McBurnie has
neither applied nor been issued an Alien Employment Permit (p. 204, Records).106
McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009
that reversed and set aside the CA’s Decision authorizing the remand. Although the
NLRC granted the motion on the said ground via a Decision107 that set aside the
NLRC’s Decision dated November 17, 2009, the findings of the NLRC in the
November 17, 2009 decision merit consideration, especially since the findings
made therein are supported by the case records.
In addition to the apparent merit of the respondents’ appeal, the Court finds the
reduction of the appeal bond justified by the substantial amount of the LA’s
monetary award. Given its considerable amount, we find reason in the
respondents’ claim that to require an appeal bond in such amount could only
deprive them of the right to appeal, even force them out of business and affect the
livelihood of their employees.108 In Rosewood Processing, Inc. v. NLRC,109 we
emphasized: "Where a decision may be made to rest on informed judgment rather
than rigid rules, the equities of the case must be accorded their due weight
because labor determinations should not be ‘secundum rationem but also
secundum caritatem.’"110
What constitutes a reasonable
amount in the determination of the
final amount of appeal bond
As regards the requirement on the posting of a bond in a "reasonable amount," the
Court holds that the final determination thereof by the NLRC shall be based
primarily on the merits of the motion and the main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof,
provides that the bond to be posted shall be "in a reasonable amount in relation to
the monetary award ," the merit of the motion shall always take precedence in the
determination. Settled is the rule that procedural rules were conceived, and should
thus be applied in a manner that would only aid the attainment of justice. If a
stringent application of the rules would hinder rather than serve the demands of
substantial justice, the former must yield to the latter.111
Thus, in Nicol where the appellant posted a bond of ₱10,000,000.00 upon an
appeal from the LA’s award of ₱51,956,314.00, the Court, instead of ruling right
away on the reasonableness of the bond’s amount solely on the basis of the
judgment award, found it appropriate to remand the case to the NLRC, which
should first determine the merits of the motion. In University Plans,112 the Court
also reversed the outright dismissal of an appeal where the bond posted in a
judgment award of more than ₱30,000,000.00 was ₱30,000.00. The Court then
directed the NLRC to first determine the merit, or lack of merit, of the motion to
reduce the bond, after the appellant therein claimed that it was under receivership
and thus, could not dispose of its assets within a short notice. Clearly, the rule on
the posting of an appeal bond should not be allowed to defeat the substantive
rights of the parties.113
Notably, in the present case, following the CA’s rendition of its Decision which
allowed a reduced appeal bond, the respondents have posted a bond in the
amount of ₱10,000,000.00. In Rosewood, the Court deemed the posting of a surety
bond of ₱50,000.00, coupled with a motion to reduce the appeal bond, as
substantial compliance with the legal requirements for an appeal from a
₱789,154.39 monetary award "considering the clear merits which appear, res ipsa
loquitor, in the appeal from the LA’s Decision, and the petitioner’s substantial
compliance with rules governing appeals."114 The foregoing jurisprudence strongly
indicate that in determining the reasonable amount of appeal bonds, the Court
primarily considers the merits of the motions and appeals.
Given the circumstances in this case and the merits of the respondents’ arguments
before the NLRC, the Court holds that the respondents had posted a bond in a
"reasonable amount", and had thus complied with the requirements for the
perfection of an appeal from the LA’s decision. The CA was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, President Rodolfo Jimenez, and members, Reynaldo Fajardo, et al. vs.
NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) and Patricio de la Peña (GR
No. 116066, January 24, 2000), the Supreme Court recognized that: "the NLRC, in
its Resolution No. 11-01-91 dated November 7, 1991 deleted the phrase "exclusive
of moral and exemplary damages as well as attorney’s fees in the determination of
the amount of bond, and provided a safeguard against the imposition of excessive
bonds by providing that "(T)he Commission may in meritorious cases and upon
motion of the appellant, reduce the amount of the bond."
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
"The unreasonable and excessive amount of bond would be oppressive and unjust
and would have the effect of depriving a party of his right to appeal."
xxxx
In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused
its discretion. It should have fixed an appeal bond in a reasonable amount. Said
dismissal deprived petitioners of their right to appeal the Labor Arbiter’s decision.
xxxx
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI,
NLRC Rules of Procedure). This Court finds the appeal bond in the amount of
₱54,083,910.00 prohibitive and excessive, which constitutes a meritorious ground
to allow a motion for reduction thereof.115
The foregoing declaration of the Court requiring a bond in a reasonable amount,
taking into account the merits of the motion and the appeal, is consistent with the
oft-repeated principle that letter-perfect rules must yield to the broader interest of
substantial justice.116
The effect of a denial of the appeal
to the NLRC
In finding merit in the respondents’ motion for reconsideration, we also take into
account the unwarranted results that will arise from an implementation of the
Court’s Decision dated September 18, 2009. We emphasize, moreover, that
although a remand and an order upon the NLRC to give due course to the appeal
would have been the usual course after a finding that the conditions for the
reduction of an appeal bond were duly satisfied by the respondents, given such
results, the Court finds it necessary to modify the CA’s order of remand, and
instead rule on the dismissal of the complaint against the respondents.
Without the reversal of the Court’s Decision and the dismissal of the complaint
against the respondents, McBurnie would be allowed to claim benefits under our
labor laws despite his failure to comply with a settled requirement for foreign
nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to
claim under our labor laws, it was necessary for him to establish, first and
foremost, that he was qualified and duly authorized to obtain employment within
our jurisdiction. A requirement for foreigners who intend to work within the
country is an employment permit, as provided under Article 40, Title II of the Labor
Code which reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to
the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor.
In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign
national’s failure to seek an employment permit prior to employment poses a
serious problem in seeking relief from the Court.118 Thus, although the respondent
therein appeared to have been illegally dismissed from employment, we explained:
This is Galera’s dilemma: Galera worked in the Philippines without proper work
permit but now wants to claim employee’s benefits under Philippine labor laws.
xxxx
The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking admission
to the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor." Section 4, Rule XIV, Book I of
the Implementing Rules and Regulations provides:
"Employment permit required for entry. – No alien seeking employment, whether
as a resident or non-resident, may enter the Philippines without first securing an
employment permit from the Ministry. If an alien enters the country under a non-
working visa and wishes to be employed thereafter, he may be allowed to be
employed upon presentation of a duly approved employment permit."
Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to
sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. This ruling, however, does
not bar Galera from seeking relief from other jurisdictions.119 (Citations omitted
and underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an employment
permit, by itself, necessitates the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its Decision
dated November 17, 2009 on the issue of illegal dismissal. It declared that
McBurnie was never an employee of any of the respondents.120 It explained:
All these facts and circumstances prove that McBurnie was never an employee of
Eulalio Ganzon or the respondent companies, but a potential investor in a project
with a group including Eulalio Ganzon and Martinez but said project did not take off
because of lack of funds.
McBurnie further claims that in conformity with the provision of the employment
contract pertaining to the obligation of the respondents to provide housing,
respondents assigned him Condo Unit # 812 of the Makati Cinema Square
Condominium owned by the respondents. He was also allowed to use a Hyundai
car. If it were true that the contract of employment was for working visa purposes
only, why did the respondents perform their obligations to him?
There is no question that respondents assigned him Condo Unit # 812 of the MCS,
but this was not free of charge. If it were true that it is part of the compensation
package as employee, then McBurnie would not be obligated to pay anything, but
clearly, he admitted in his letter that he had to pay all the expenses incurred in the
apartment.
Assuming for the sake of argument that the employment contract is valid between
them, record shows that McBurnie worked from September 1, 1999 until he met an
accident on the last week of October. During the period of employment, the
respondents must have paid his salaries in the sum of US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the respondents] paid
his salaries like payslip, check or cash vouchers duly signed by him or any document
showing proof of receipt of his compensation from the respondents or activity in
furtherance of the employment contract. Granting again that there was a valid
contract of employment, it is undisputed that on November 1, 1999, McBurnie left
for Australia and never came back. x x x.121 (Emphasis supplied)
Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision
dated January 14, 2010, the Court’s resolve to now reconsider its Decision dated
September 18, 2009 and to affirm the CA’s Decision and Resolution in the
respondents’ favor effectively restores the NLRC’s basis for rendering the Decision
dated November 17, 2009.
More importantly, the NLRC’s findings on the contractual relations between
McBurnie and the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established.122 Although an employment agreement
forms part of the case records, respondent Ganzon signed it with the notation "per
my note."123 The respondents have sufficiently explained that the note refers to the
letter124 dated May 11, 1999 which embodied certain conditions for the
employment’s effectivity. As we have previously explained, however, the said
conditions, particularly on the successful completion of the project financing for
the hotel project in Baguio City and McBurnie’s acquisition of an Alien Employment
Permit, failed to materialize. Such defense of the respondents, which was duly
considered by the NLRC in its Decision dated November 17, 2009, was not
sufficiently rebutted by McBurnie.
Second, McBurnie failed to present any employment permit which would have
authorized him to obtain employment in the Philippines. This circumstance negates
McBurnie’s claim that he had been performing work for the respondents by virtue
of an employer-employee relationship. The absence of the employment permit
instead bolsters the claim that the supposed employment of McBurnie was merely
simulated, or did not ensue due to the non-fulfillment of the conditions that were
set forth in the letter of May 11, 1999.
Third, besides the employment agreement, McBurnie failed to present other
competent evidence to prove his claim of an employer-employee relationship.
Given the parties’ conflicting claims on their true intention in executing the
agreement, it was necessary to resort to the established criteria for the
determination of an employer-employee relationship, namely: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee’s conduct.125 The rule of
thumb remains: the onus probandi falls on the claimant to establish or substantiate
the claim by the requisite quantum of evidence. Whoever claims entitlement to the
benefits provided by law should establish his or her right thereto. 126 McBurnie
failed in this regard.1âwphi1 As previously observed by the NLRC, McBurnie even
failed to show through any document such as payslips or vouchers that his salaries
during the time that he allegedly worked for the respondents were paid by the
company. In the absence of an employer-employee relationship between McBurnie
and the respondents, McBurnie could not successfully claim that he was dismissed,
much less illegally dismissed, by the latter. Even granting that there was such an
employer-employee relationship, the records are barren of any document showing
that its termination was by the respondents’ dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to
remand the case to the NLRC, more so in the absence of any showing that the NLRC
should now rule differently on the case’s merits. In Medline Management, Inc. v.
Roslinda,127 the Court ruled that when there is enough basis on which the Court
may render a proper evaluation of the merits of the case, the Court may dispense
with the time-consuming procedure of remanding a case to a labor tribunal in
order "to prevent delays in the disposition of the case," "to serve the ends of
justice" and when a remand "would serve no purpose save to further delay its
disposition contrary to the spirit of fair play."128 In Real v. Sangu Philippines,
Inc.,129 we again ruled:
With the foregoing, it is clear that the CA erred in affirming the decision of the
NLRC which dismissed petitioner’s complaint for lack of jurisdiction. In cases such
as this, the Court normally remands the case to the NLRC and directs it to properly
dispose of the case on the merits. "However, when there is enough basis on which
a proper evaluation of the merits of petitioner’s case may be had, the Court may
dispense with the time-consuming procedure of remand in order to prevent further
delays in the disposition of the case." "It is already an accepted rule of procedure
for us to strive to settle the entire controversy in a single proceeding, leaving no
root or branch to bear the seeds of litigation. If, based on the records, the
pleadings, and other evidence, the dispute can be resolved by us, we will do so to
serve the ends of justice instead of remanding the case to the lower court for
further proceedings." x x x.130 (Citations omitted)
It bears mentioning that although the Court resolves to grant the respondents’
motion for reconsideration, the other grounds raised in the motion, especially as
they pertain to insinuations on irregularities in the Court, deserve no merit for
being founded on baseless conclusions. Furthermore, the Court finds it
unnecessary to discuss the other grounds that are raised in the motion, considering
the grounds that already justify the dismissal of McBurnie’s complaint.
All these considered, the Court also affirms its Resolution dated September 4,
2012; accordingly, McBurnie’s motion for reconsideration thereof is denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration filed on September 26, 2012 by
petitioner Andrew James McBurnie is DENIED;
(b) The motion for reconsideration filed on March 27, 2012 by
respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is
GRANTED.
 (c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This
Court’s Decision dated September 18, 2009 and Resolutions dated
December 14, 2009 and January 25, 2012 are SET ASIDE. The Court of
Appeals Decision dated October 27, 2008 and Resolution dated March 3,
2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED
WITH MODIFICATION. In lieu of a remand of the case to the National
Labor Relations Commission, the complaint for illegal dismissal filed by
petitioner Andrew James McBurnie against respondents Eulalio Ganzon,
EGI-Managers, Inc. and E. Ganzon, Inc. is DISMISSED.

Furthermore, on the matter of the filing and acceptance of motions to reduce

appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure,
the Court hereby RESOLVES that henceforth, the following guidelines shall be
observed:

(a) The filing o a motion to reduce appeal bond shall be entertained by

the NLRC subject to the following conditions: (1) there is meritorious
ground; and (2) a bond in a reasonable amount is posted;

(b) For purposes o compliance with condition no. (2), a motion shall be
accompanied by the posting o a provisional cash or surety bond
equivalent to ten percent (10,) of the monetary award subject o the
appeal, exclusive o damages and attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to suspend the
running o the 1 0-day reglementary period to perfect an appeal from the
labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to
reduce bond and determine the final amount o bond that shall be posted
by the appellant, still in accordance with the standards o meritorious
grounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or
requires a bond that exceeds the amount o the provisional bond, the
appellant shall be given a fresh period o ten 1 0) days from notice o the
NLRC order within which to perfect the appeal by posting the required
appeal bond.

SO ORDERED.