*SECONDDIVISION.
564
564
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
565
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Alviadovs.Procter&GamblePhils.,Inc.
566
566
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter&GamblePhils.,Inc.
vestedwithconfidenceondelicatematters,suchascustody,handlingorcare
and protection of the property and assets of the employer. And, in order to
constitute a just cause for dismissal, the act complained of must be work
relatedandmustshowthattheemployeeisunfittocontinuetoworkforthe
employer.Intheinstantcase,thepetitionersemployeesofPrommGemhave
not been shown to be occupying positions of responsibility or of trust and
confidence. Neither is there any evidence to show that they are unfit to
continuetoworkasmerchandisersforPrommGem.
Same Same In termination cases, the burden of proof rests upon the
employertoshowthatthedismissalisforjustandvalidcause.Goingback
tothematterofdismissal,itmustbeemphasizedthattheonusprobandito
provethelawfulnessofthedismissalrestswiththeemployer.Intermination
cases, the burden of proof rests upon the employer to show that the
dismissal is for just and valid cause. In the instant case, P&G failed to
dischargetheburdenofprovingthelegalityandvalidityofthedismissalsof
those petitioners who are considered its employees. Hence, the dismissals
necessarilywerenotjustifiedandarethereforeillegal.
PETITIONforreviewoncertiorariofthedecisionandresolutionof
theCourtofAppeals.
ThefactsarestatedintheopinionoftheCourt.
NenitaC.Mahinayforpetitioners.
Angara, Abello, Concepcion, Regala and Cruz for respondent
Procter&GamblePhilippines,Inc.
DELCASTILLO,J.:
Labor laws expressly prohibit laboronly contracting. To
preventitscircumvention,theLaborCodeestablishesanemployer
employee relationship between the employer and the employees of
thelaboronlycontractor.
567
VOL.614,March9,2010
567
Alviadovs.Procter&GamblePhils.,Inc.
The instant petition for review assails the March 21, 2003
Decision1oftheCourtofAppeals(CA)inCAG.R.SPNo.52082
and its October 20, 2003 Resolution2 denying the motions for
reconsideration separately filed by petitioners and respondent
Procter & Gamble Phils. Inc. (P&G). The appellate court affirmed
the July 27, 1998 Decision of the National Labor Relations
Commission (NLRC), which in turn affirmed the November 29,
1996 Decision3 of the Labor Arbiter. All these decisions found
PrommGem, Inc. (PrommGem) and Sales and Promotions
Services (SAPS) to be legitimate independent contractors and the
employersofthepetitioners.
FactualAntecedents
PetitionersworkedasmerchandisersofP&Gfromvariousdates,
allegedlystartingasearlyas1982oraslateasJune1991,toeither
May5,1992orMarch11,1993,morespecificallyasfollows:
Name
1.JoebM.Aliviado
2.ArthurCorpuz
3.EricAliviado
4.MonchitoAmpeloquio
5.AbrahamBasmayor[,Jr.]
6.JonathanMateo
7.LorenzoPlaton
8.JoseFernandoGutierrez
9.EstanislaoBuenaventura
10.LopeSalonga
11.FranzDavid
12.NestorIgnacio
13.JulioRey
DateEmployed
DateDismissed
November,1985
May5,1992
1988
March11,1993
1985 March11,1993
September,1988
March11,1993
1987
March11,1993
May,1988
March11,1993
1985
March11,1993
1988
May5,1992
June,1988
March11,1993
1982
March11,1993
1989
March11,1993
1982
March11,1993
1989
May5,1992
_______________
1Rollo,pp.8695pennedbyAssociateJusticeEdgardoP.Cruzandconcurredin
byAssociateJusticesSalvadorJ.Valdez,Jr.andMarioL.GuariaIII.
2Id.,atpp.9798.
3Id.,atpp.298312.
568
568
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter&GamblePhils.,Inc.
14.Ruben[Vasquez],Jr.
15.MaximinoPascua
16.ErnestoCalanao[,Jr.]
17.RolandoRomasanta
1985
l990
1987
1983
May5,1992
May5,1992
May5,1992
March11,1993
18.[Roehl]Agoo
19.BonifacioOrtega
20.ArsenioSoriano,Jr.
21.ArnelEndaya
22.RobertoEnriquez
23.Nestor[Es]quila
24.Ed[g]ardoQuiambao
25.SantosBacalso
26.SamsonBasco
27.AladinoGregor[e],Jr.
28.EdwinGarcia
29.ArmandoVillar
30.EmilTawat
31.MarioP.Liongson
32.CresenteJ.Garcia
33.FernandoMacabent[a]
34.MelecioCasapao
35.ReynaldoJacaban
36.FerdinandSalvo
37.AlstandoMontos
38.RainerN.Salvador
39.RamilReyes
40.PedroG.Roy
41.Leonardo[F].Talledo
42.Enrique[F].Talledo
43.WillieOrtiz
44.ErnestoSoyosa
45.RomeoVasquez
46.JoelBillones
47.AllanBaltazar
48.NoliGabuyo
49.EmmanuelE.Laban
50.Ramir[o]E.[Pita]
51.RaulDulay
1988
March11,1993
1988
March11,1993
1985
March11,1993
1983
March11,1993
December,1988
March11,1993
1983
May5,1992
1989
March11,1993
1990
March11,1993
1984
March11,1993
1980
May5,1992
1987
May5,1992
1990
May5,1992
1988
March11,1993
1991
May5,1992
1984
March11,1993
1990
May5,1992
1987
March11,1993
1990
May5,1992
1985
May5,1992
1984
March11,1993
1984
May5,1992
1984
March11,1993
1987
1985 March11,1993
1988
March11,1993
1987
May5,1992
1988
May5,1992
1985
March11,1993
1987
March11,1993
1989
March11,1993
1991
March11,1993
1987
May5,1992
1990
May5,1992
1988
May5,1992
52.TadeoDuran[o]
53.JosephBanico
1988
1988
May5,1992
March11,1993
569
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569
Alviadovs.Procter&GamblePhils.,Inc.
54.AlbertLeynes
55.AntonioDacu[m]a
56.RenatodelaCruz
57.RomeoViernes,Jr.
58.El[ia]sBas[c]o
59.WilfredoTorres
60.MelchorCarda[]o
1990
1990
1982
1986
1989
1986
1991
May5,1992
May5,1992
May5,1992
May5,1992
61.[Marino][Maranion]
62.JohnSumergido
63.RobertoRosales
65.GermanN.Guevara
66.GilbertY.Miranda
67.RodolfoC.Toledo[,Jr.]
68.ArnoldD.[Laspoa]
69.PhilipM.Loza
70.MarioN.C[o]ldayon
71.OrlandoP.Jimenez
72.FredP.Jimenez
73.RestitutoC.Pamintuan,Jr.
74.RolandoJ.deAndres
75.ArtuzBustenera[,Jr.]
76.RobertoB.Cruz
77.RosedyO.Yordan
78.DennisDacasin
79.AlejandrinoAbaton
80.OrlandoS.Balangue
1989
1987
May,1987
May,1990
June,1991
May14,1991
June1991
March5,1992
May14,1991
November6,1992
September,1991
March5,1992
June,1991
December,1989
May4,1990
June,1991
May,1990
1988
May5,1992
May5,1992
May5,1992
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
March11,1993
May5,1992
May5,1992
May5,1992
March11,19934
March,1989
570
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
SAPSandPrommGemimposeddisciplinarymeasuresonerring
merchandisersforreasonssuchashabitualabsenteeism,dishonesty
orchangingdayoffwithoutpriornotice.7
P&Gisprincipallyengagedinthemanufactureandproductionof
different consumer and health products, which it sells on a
wholesale basis to various supermarkets and distributors.8 To
enhanceconsumerawarenessandacceptanceoftheproducts,P&G
entered into contracts with PrommGem and SAPS for the
promotion and merchandising of its products.9In December 1991,
petitioners filed a complaint10 against P&G for regularization,
service incentive leave pay and other benefits with damages. The
complaint was later amended11 to include the matter of their
subsequentdismissal.
RulingoftheLaborArbiter
On November 29, 1996, the Labor Arbiter dismissed the
complaint for lack of merit and ruled that there was no employer
employeerelationshipbetweenpetitionersandP&G.Hefoundthat
theselectionandengagementofthepetitioners,thepaymentoftheir
wages,thepowerofdismissalandcontrolwithrespecttothemeans
andmethodsbywhichtheirworkwasaccomplished,werealldone
andexercisedbyPrommGem/SAPS.HefurtherfoundthatPromm
Gem and SAPS were legitimate independent job contractors. The
dispositiveportionofhisDecisionreads:
_______________
7Id.,atpp.441442.
8Id.,atp.105.
9Id.,atpp.406414.
10Id.,atpp.158164.
11Records,Vol.I,pp.345346,373392Records,Vol.II,pp.396412.
571
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571
Alviadovs.Procter&GamblePhils.,Inc.
WHEREFORE, premises considered, judgment is hereby rendered
Dismissing the aboveentitled cases against respondent Procter & Gamble
(Phils.),Inc.forlackofmerit.
SOORDERED.12
RulingoftheNLRC
AppealingtotheNLRC,petitionersdisputedtheLaborArbiters
findings. On July 27, 1998, the NLRC rendered a Decision13
disposingasfollows:
WHEREFORE, premises considered, the appeal of complainants is
herebyDISMISSEDandthedecisionappealedfromAFFIRMED.
SOORDERED.14
Petitionersfiledamotionforreconsiderationbutthemotionwas
deniedintheNovember19,1998Resolution.15
RulingoftheCourtofAppeals
Petitioners then filed a petition for certiorari with the CA,
alleging grave abuse of discretion amounting to lack or excess of
572
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
Petitionersfiledamotionforreconsiderationbutthemotionwas
alsodenied.Hence,thispetition.
Issues
Petitionersnowcomebeforeusraisingthefollowingissues:
I.
WHETHER X X X THE HONORABLE COURT OF APPEALS HAS
COMMITTED [A] REVERSIBLE ERROR WHEN IT DID NOT FIND
THE PUBLIC RESPONDENTS TO HAVE ACTED WITH GRAVE
ABUSEOFDISCRETIONAMOUNTINGTOLACKOFORINEXCESS
OF JURISDICTION IN RENDERING THE QUESTIONED JUDGMENT
WHEN, OBVIOUSLY, THE PETITIONERS WERE ABLE TO PROVE
AND ESTABLISH THAT RESPONDENT PROCTER & GAMBLE
PHILS., INC. IS THEIR EMPLOYER AND THAT THEY WERE
ILLEGALLYDISMISSEDBYTHEFORMER.
II.
WHETHER X X X THE HONORABLE COURT OF APPEALS HAS
COMMITTED [A] REVERSIBLE ERROR WHEN IT DID NOT
DECLARE THAT THE PUBLIC RESPONDENTS HAD ACTED WITH
GRAVE ABUSE OF DISCRETION WHEN THE LATTER DID NOT
FINDTHEPRIVATERESPONDENTSLIABLETOTHEPETITIONERS
Simplystated,theissuesare:(1)whetherP&Gistheemployerof
petitioners(2)whetherpetitionerswereillegallydismissedand(3)
whether petitioners are entitled for payment of actual, moral and
exemplarydamagesaswellaslitigationcostsandattorneysfees.
PetitionersArguments
Petitioners insist that they are employees of P&G. They claim
thattheywererecruitedbythesalesmenofP&Gand
_______________
17Id.,atp.668.
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VOL.614,March9,2010
573
Alviadovs.Procter###GamblePhils.,Inc.
574
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter&GamblePhils.,Inc.
P&GalsocontendsthattheLaborCodeneitherdefinesnorlimits
which services or activities may be validly outsourced. Thus, an
employer can farm out any of its activities to an independent
contractor,regardlessofwhethersuchactivityisperipheralorcore
innature.Itinsiststhatthedeterminationofwhethertoengagethe
servicesofajobcontractorortoengageindirecthiringiswithinthe
ambitofmanagementprerogative.
Atthisjuncture,itisworthmentioningthatonJanuary29,2007,
wedeemedaswaivedthefilingoftheCommentofPrommGemon
thepetition.21Also,althoughSAPSwasimpleadedasapartyinthe
proceedings before the Labor Arbiter and the NLRC, it was no
longer impleaded as a party in the proceedings before the CA.22
Hence, our pronouncements with regard to SAPS are only for the
purposeofdeterminingtheobligationsofP&G,ifany.
OurRuling
Thepetitionhasmerit.
Asarule,theCourtrefrainsfromreviewingfactualassessments
oflowercourtsandagenciesexercisingadjudicativefunctions,such
as the NLRC. Occasionally, however, the Court is constrained to
wadeintofactualmatterswhenthereisinsufficientorinsubstantial
evidence on record to support those factual findings or when too
muchisconcluded,inferredordeducedfromthebareorincomplete
factsappearingonrecord.23Inthepresentcase,wefindtheneedto
reviewtherecordstoascertainthefacts.
_______________
21Id.,atp.652.
22Id.,atp.89.
23Pascuav.NationalLaborRelationsCommission(ThirdDivision),351Phil.48,
61,287SCRA554,567(1998).
575
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Alviadovs.Procter&GamblePhils.,Inc.
Laboronlycontractingandjobcontracting
InordertoresolvetheissueofwhetherP&Gistheemployerof
petitioners, it is necessary to first determine whether PrommGem
andSAPSarelaboronlycontractorsorlegitimatejobcontractors.
ThepertinentLaborCodeprovisiononthematterstates:
ART.106.Contractor or subcontractor.Whenever an employer
enters into a contract with another person for the performance of the
formers work, the employees of the contractor and of the latters
subcontractor,ifany,shallbepaidinaccordancewiththeprovisionsofthis
Code.
Intheeventthatthecontractororsubcontractorfailstopaythewagesof
his employees in accordance with this Code, the employer shall be jointly
andseverallyliablewithhiscontractororsubcontractortosuchemployeesto
theextentoftheworkperformedunderthecontract,inthesamemannerand
extentthatheisliabletoemployeesdirectlyemployedbyhim.
The Secretary of Labor may, by appropriate regulations, restrict or
prohibit the contracting out of labor to protect the rights of workers
established under this Code. In so prohibiting or restricting, he may make
appropriatedistinctionsbetweenlaboronlycontractingandjobcontracting
as well as differentiations within these types of contracting and determine
who among the parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or circumvention of any
provisionofthisCode.
Thereislaboronlycontractingwherethepersonsupplyingworkersto
an employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the
workersrecruitedandplacedbysuchpersonareperformingactivitieswhich
aredirectlyrelatedtotheprincipalbusinessofsuchemployer.Insuchcases,
the person or intermediary shall be considered merely as an agent of the
employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him. (Emphasis and
underscoringsupplied.)
576
576
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
VOL.614,March9,2010
Alviadovs.Procter&GamblePhils.,Inc.
577
Substantialcapitalorinvestmentreferstocapitalstocksandsubscribed
capitalization in the case of corporations, tools, equipment, implements,
machineriesandworkpremises,actuallyanddirectlyusedbythecontractor
or subcontractor in the performance or completion of the job, work or
servicecontractedout.
The right to control shall refer to the right reserved to the person for
whom the services of the contractual workers are performed, to determine
notonlytheendtobeachieved,butalsothemannerandmeanstobeusedin
reachingthatend.
xxxx(Underscoringsupplied.)
578
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
1990.27ItalsohaslongtermassetsworthP432,895.28andcurrent
assets of P719,042.32. PrommGem has also proven that it
maintaineditsownwarehouseandofficespacewithafloorareaof
870 square meters.28 It also had under its name three registered
vehicles which were used for its promotional/merchandising
business.29PrommGemalsohasotherclients30asidefromP&G.31
Under the circumstances, we find that PrommGem has substantial
investmentwhichrelatestotheworktobeperformed.Thesefactors
negate the existence of the element specified in Section 5(i) of
DOLEDepartmentOrderNo.1802.
The records also show that PrommGem supplied its
complainantworkers with the relevant materials, such as markers,
tapes, liners and cutters, necessary for themtoperformtheirwork.
PrommGem also issued uniforms to them. It is also relevant to
mention that PrommGem already considered the complainants
working under it as its regular, not merely contractual or project,
employees.32Thiscircumstancenegatestheexistenceofelement(ii)
asstatedinSection5ofDOLE
_______________
26Records,Vol.I,p.208.
27Id.,atp.211.
28Rollo,p.453TSN,February22,1994,p.9.
29Rollo,pp580582.
30 a. Adidas Division, Rubberworld Phil., Inc. b. CFC Corporation c. Focus
Enterprise, Inc., d. Procter & Gamble Phil., Inc., e. Roche Phil., Inc. f. Sterling
ProductsIntl.,Inc.g.SoutheastAsiaFoods,Inc.h.PepsiCo.,Inc.i.KraftGeneral
FoodsPhil.,Inc.j.UniversalRobinaCorp.k.WrigleyPhil.,Inc.l.AsiaBrewery,
Inc.m.AyalaLand,Inc.n.Citibank,N.A.o.S.C.Johnson,Inc.p.GlaxoPhil.,Inc.
q.Bankofthe Phil. IslandLoyola Branch r. Republic Chemical, Inc. s. Metrolab,
Inc.and,t.FirstPacificMetroCorp.Records,Vol.I,p.192.
31Id.
32Records,Vol.II,pp.599623.
579
VOL.614,March9,2010
579
Alviadovs.Procter###GamblePhils.,Inc.
policy,morals,goodcustomsorpublicorder.33
Underthecircumstances,PrommGemcannotbeconsideredasa
laboronly contractor. We find that it is a legitimate independent
contractor.
Ontheotherhand,theArticlesofIncorporationofSAPSshows
that it has a paidin capital of only P31,250.00. There is no other
evidencepresentedtoshowhowmuchitsworkingcapitalandassets
are. Furthermore, there is no showing of substantial investment in
tools,equipmentorotherassets.
InVinoya v. National Labor Relations Commission,34theCourt
held that [w]ith the current economic atmosphere in the country,
thepaidincapitalizationofPMCIamountingtoP75,000.00cannot
be considered as substantial capital and, as such, PMCI cannot
qualifyasanindependentcontractor.35Applyingthesamerationale
tothepresentcase,itisclearthatSAPShavingapaidincapitalof
onlyP31,250hasnosubstantialcapital.SAPSlackofsubstantial
capitalisunderlinedbytherecords36whichshowthatitspayrollfor
itsmer
_______________
33Theactofhiringandrehiringworkersoveraperiodoftimewithoutconsidering
themasregularemployeesevincesbadfaithonthepartoftheemployer.SanMiguel
Corporationv.NationalLaborRelationsCommission,G.R.No.147566,December6,
2006,510SCRA181,189Bustamantev.NationalLaborRelationsCommission,G.R.
No.111651,March15,1996,255SCRA145,150.
34381Phil.460324SCRA469(2000).Thiscaseinvolvedanemployeewhowas
dismissedandfiledalaborcasein1991,aboutthesametimeframeasthatinvolved
inthiscaseforpurposesoftakingjudicialnoticeoftheeconomicatmosphere in the
country.
35Id.,atp.476p.481.
36Records,Vol.I,p.556.
580
580
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
referstocapitalizationusedintheperformanceorcompletionofthe
job, work or service contracted out. In the present case, SAPS has
failedtoshowsubstantialcapital.
Furthermore, the petitioners have been charged with the
merchandising and promotion of the products of P&G, an activity
thathasalreadybeenconsideredbytheCourtasdoubtlesslydirectly
related to the manufacturing business,38 which is the principal
businessofP&G.ConsideringthatSAPShasnosubstantialcapital
orinvestmentandtheworkersitrecruitedareperformingactivities
whicharedirectlyrelatedtotheprincipalbusinessofP&G,wefind
thattheformerisengagedinlaboronlycontracting.
Where laboronly contracting exists, the Labor Code itself
establishes an employeremployee relationship between the
employer and the employees of the laboronly contractor.39 The
statuteestablishesthisrelationshipforacomprehensivepurpose:to
preventacircumventionoflaborlaws.Thecontractorisconsidered
merely an agent of the principal employer and the latter is
responsibletotheemployeesofthe
_______________
37Rollo,p.412.
38Tabasv.CaliforniaManufacturingCo.,Inc.,251Phil.448,454169SCRA497,
502(1989).
39 Neri v. National Labor Relations Commission, G.R. Nos. 9700809, July 23,
1993, 224 SCRA 717, 720, citing Philippine Bank of Communications v. National
LaborRelationsCommission,230Phil.430,440146SCRA347,356(1986).
581
VOL.614,March9,2010
581
Alviadovs.Procter###GamblePhils.,Inc.
582
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
Maranion,JosephBanico,MelchorCardano,ReynaldoJacaban,and
JoebAliviado.42
Terminationofservices
We now discuss the issue of whether petitioners were illegally
dismissed. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just43 or
authorized44cause.
42Records,Vol.I,p.193Vol.II,pp.666692.
43LaborCodeofthePhilippines,
ART.282.Termination by employer.An employer may terminate an
employmentforanyofthefollowingcauses:
(a)Serious misconduct or willful disobedience by the employee of the
lawfulordersofhisemployerorrepresentativeinconnectionwithhiswork
(b)Grossandhabitualneglectbytheemployeeofhisduties
(c)Fraudorwillfulbreachbytheemployeeofthetrustreposedinhimby
hisemployerordulyauthorizedrepresentative
(d)Commissionofacrimeoroffensebytheemployeeagainsttheperson
ofhisemployeroranyimmediatememberofhisfamilyorhisdulyauthorized
representativeand
(e)Othercausesanalogoustotheforegoing.
44 ART.283. Closure of establishment and reduction of personnel.The
employermayalsoterminatetheemploymentofanyemployeeduetotheinstallation
oflaborsavingdevices,redundancy,retrenchmenttopreventlossesortheclosingor
cessationofoperationoftheestablishmentorundertakingunlesstheclosingisforthe
purposeofcircumventingtheprovisionsofthisTitle,byservingawrittennoticeon
theworkersandtheMinistryofLaborandEmploymentatleastone(1)monthbefore
theintendeddatethereofxxx
ART.284.Disease as ground for termination.Anemployer may terminate
theservicesofanemployeewhohasbeenfoundtobesufferingfromanydiseaseand
whosecontinuedem
583
VOL.614,March9,2010
583
Alviadovs.Procter&GamblePhils.,Inc.
Intheinstantcase,theterminationlettersgivenbyPrommGem
toitsemployeesuniformlyspecifiedthecauseofdismissalasgrave
misconductandbreachoftrust,asfollows:
xxxx
ThisinformsyouthateffectiveMay5,1992,youremploymentwithour
company, PrommGem, Inc. has been terminated. We find your expressed
admission, that you considered yourself as an employee of Procter &
Gamble Phils., Inc. and assailing the integrity of the Company as
legitimateandindependentpromotionfirm,isdeemedasanactofdisloyalty
prejudicial to the interests of our Company: serious misconduct and breach
of trust reposed upon you as employee of our Company which [co]nstitute
justcausefortheterminationofyouremployment.
xxxx45
Misconducthasbeendefinedasimproperorwrongconductthe
transgression of some established and definite rule of action, a
forbiddenact,aderelictionofduty,unlawfulincharacterimplying
wrongfulintentandnotmereerrorofjudgment.Themisconductto
beseriousmustbeofsuchgraveandaggravatedcharacterandnot
merely trivial and unimportant.46 To be a just cause for dismissal,
such misconduct (a) must be serious (b) must relate to the
performance of the employees duties and (c) must show that the
employeehasbecomeunfittocontinueworkingfortheemployer.47
_______________
ploymentisprohibitedbylaworisprejudicialtohishealthaswellastothehealthof
hiscoemployees:xxx
45Records,Vol.II,p.447.
46NationalLaborRelationsCommissionv.Salgarino, G.R. No. 164376, July 31,
2006,497SCRA361,375Molinav.PacificPlans,Inc.,G.R.No.165476,March 10,
2006,484SCRA498,518Samsonv.NationalLaborRelationsCommission,386Phil.
669,682330SCRA460,471(2000).
47 Baez v. De La Salle University, G.R. No. 167177, September 27, 2006, 503
SCRA691,700Phil. Aeolus Automotive United Corp. v. National Labor Relations
Commission,387Phil.250,261331SCRA237,245246(2000).
584
584
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter###GamblePhils.,Inc.
VOL.614,March9,2010
585
Alviadovs.Procter###GamblePhils.,Inc.
dismissal,heshowedtoustheletter51datedFebruary24,1993,xxx
February24,1993
SalesandPromotionsServices
ArmonsBldg.,142KamiasRoad,
_______________
51Rollo,p.192.
586
586
SUPREMECOURTREPORTSANNOTATED
Alviadovs.Procter&GamblePhils.,Inc.
QuezonCity
Attention:Mr.SaturninoA.Ponce
President&GeneralManager
Gentlemen:
Based on our discussions last 5 and 19 February 1993, this
formally informs you that we will not be renewing our
MerchandisingServicesContractwithyouragency.
Pleaseimmediatelyundertakeeffortstoensurethatyourservices
totheCompanywillterminateeffectivecloseofbusinesshoursof11
March1993.
Thisiswithoutprejudicetowhateverobligationsyoumayhave
tothecompanyundertheabovementionedcontract.
Verytrulyyours,
(Sgd.)
EMMANUELM.NON
SalesMerchandisingIII
obvious from its act that SAPS had no other clients and had no
intention of seeking other clients in order to further its
merchandisingbusiness.FromallindicationsSAPS,existedtocater
solelytotheneedofP&Gfor
_______________
52Records,Vol.II,p.413.
587
VOL.614,March9,2010
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Alviadovs.Procter###GamblePhils.,Inc.
thesupplyofemployeesinthelattersmerchandisingconcernsonly.
Under the circumstances prevailing in the instant case, we cannot
considerSAPSasanindependentcontractor.
Goingbacktothematterofdismissal,itmustbeemphasizedthat
theonusprobanditoprovethelawfulnessofthedismissalrestswith
theemployer.53Interminationcases,theburdenofproofrestsupon
theemployertoshowthatthedismissalisforjustandvalidcause.54
In the instant case, P&G failed to discharge the burden of proving
the legality and validity of the dismissals of those petitioners who
areconsidereditsemployees.Hence,thedismissalsnecessarilywere
notjustifiedandarethereforeillegal.
Damages
We now go to the issue of whether petitioners are entitled to
damages.Moralandexemplarydamagesarerecoverablewherethe
dismissal of an employee was attended by bad faith or fraud or
constituted an act oppressive to labor or was done in a manner
contrarytomorals,goodcustomsorpublicpolicy.55
_______________
53NationalLaborRelationsCommissionv.Salgarino,supranote46at383.
54RoyalCrownInternationalev.NationalLaborRelationsCommission,G.R.No.
78085,October16,1989,178SCRA569,578.
LaborCodeofthePhilippines,
ART.279.SecurityofTenure.Incasesofregularemployment,theemployer
shall not terminate the services of an employee except for a just cause or when
authorizedbythisTitle.Anemployeewhoisunjustlydismissedfromworkshallbe
entitledtoreinstatementwithoutlossofseniorityrightsandotherprivilegesandtohis
full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalentcomputedfromthetimehiscompensationwaswithheldfromhimuptothe
timeofhisactualreinstatement.
55Pascuav.NationalLaborRelationsCommission(ThirdDivision),supranote23
at72p.578Acuav.CourtofAppeals,G.R.
588
588
SUPREMECOURTREPORTSANNOTATED
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Alviadovs.Procter###GamblePhils.,Inc.
back wages and other benefits from the time of their illegal
dismissaluptothetimeoftheiractualreinstatement.
WHEREFORE, the petition is GRANTED. The Decision dated
March21,2003oftheCourtofAppealsinCAG.R.SPNo.52082
and the Resolution dated October 20, 2003 are REVERSED and
SET ASIDE. Procter & Gamble Phils., Inc. and PrommGem, Inc.
areORDEREDtoreinstatetheirrespectiveemployeesimmediately
without loss of seniority rights and with full backwages and other
benefits from the time of their illegal dismissal up to the time of
their actual reinstatement. Procter & Gamble Phils., Inc. is further
ORDERED to pay each of those petitioners considered as its
employees, namely Arthur Corpuz, Eric Aliviado, Monchito
Ampeloquio, Abraham Basmayor, Jr., Jonathan Mateo, Lorenzo
Platon, Estanislao Buenaventura, Lope Salonga, Franz David,
NestorIgnacio,RolandoRomasanta,RoehlAgoo,BonifacioOrtega,
Arsenio Soriano, Jr., Arnel Endaya, Roberto Enriquez, Edgardo
Quiambao, Santos Bacalso, Samson Basco, Alstando Montos,
RainerN.Salvador,PedroG.Roy,LeonardoF.Talledo,EnriqueF.
Talledo, Joel Billones, Allan Baltazar, Noli Gabuyo, Gerry Gatpo,
German Guevara, Gilbert Y. Miranda, Rodolfo C. Toledo, Jr.,
ArnoldD.Las
poa,PhilipM.Loza,MarioN.Coldayon,OrlandoP.
Jimenez, Fred P. Jimenez, Restituto C. Pamintuan, Jr., Rolando J.
De Andres, Artuz Bustenera, Jr., Roberto B. Cruz, Rosedy O.
Yordan, Orlando S. Balangue, Emil Tawat, Cresente J. Garcia,
Melencio Casapao, Romeo Vasquez, Renato dela Cruz, Romeo
Viernes,Jr.,EliasBascoandDennisDacasin,P25,000.00asmoral
damagesplustenpercentofthetotalsumasandforattorneysfees.
Let this case be REMANDED to the Labor Arbiter for the
computation, within 30 days from receipt of this Decision, of
petitioners backwages and other benefits and ten percent of the
total sum as and for attorneys fees as stated above and for
immediateexecution.
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