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G.R. No.

201595

ALLAN M. MENDOZA, Petitioner,


vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU), namely, EDUARDO B. BORELA, BUENAVENTURA QUEBRAL,
ELIZABETH COMETA, ALEJANDRO TORRES, AMORSOLO TIERRA, SOLEDAD YEBAN, LUIS RENDON, VIRGINIA APILADO,
TERESITA BOLO, ROGELIO BARBERO, JOSE CASAAS, ALFREDO MAGA, EMILIO FERNANDEZ, ROSITA BUENA VENTURA,
ALMENIO CANCINO, ADELA IMANA, MARIO MANCENIDO, WILFREDO MANDILAG, ROLANDO MANLAP AZ, EFREN
MONTEMAYOR, NELSON PAGULAYAN, CARLOS VILLA, RIC BRIONES, and CHITO BERNARDO, Respondents.

DECISION

DEL CASTILLO, J.:

This Petition for Review on Certiorari1 assails the April 24, 2012 Decision2 of the Court of Appeals (CA) which dismissed the Petition for
Certiorari3 in CA-G.R. SP No. 115639.

Factual Antecedents

Petitioner was a member of the Manila Water Employees Union (MWEU), a Department of Labor and Employment (DOLE)-registered labor
organization consisting of rank-and-file employees within Manila Water Company (MWC). The respondents herein named Eduardo B. Borela
(Borela), Buenaventura Quebral (Quebral), Elizabeth Cometa (Cometa), Alejandro Torres (Torres), Amorsolo Tierra (Tierra), Soledad Yeban (Yeban),
Luis Rendon (Rendon), Virginia Apilado (Apilado), Teresita Bolo (Bolo), Rogelio Barbero (Barbero), Jose Casaas (Casaas), Alfredo Maga (Maga),
Emilio Fernandez (Fernandez), Rosita Buenaventura (Buenaventura), Almenio Cancino (Cancino), Adela Imana, Mario Mancenido (Mancenido),
Wilfredo Mandilag (Mandilag), Rolando Manlapaz (Manlapaz), Efren Montemayor (Montemayor), Nelson Pagulayan, Carlos Villa, Ric Briones, and
Chito Bernardo were MWEU officers during the period material to this Petition, with Borela as President and Chairman of the MWEU Executive
Board, Quebral as First Vice-President and Treasurer, and Cometa as Secretary.4

In an April 11, 2007 letter,5 MWEU through Cometa informed petitioner that the union was unable to fully deduct the increased P200.00 union dues
from his salary due to lack of the required December 2006 check-off authorization from him. Petitioner was warned that his failure to pay the union
dues would result in sanctions upon him. Quebral informed Borela, through a May 2, 2007 letter,6 that for such failure to pay the union dues,
petitioner and several others violated Section 1(g), Article IX of the MWEUs Constitution and By-Laws.7 In turn, Borela referred the charge to the
MWEU grievance committee for investigation.

On May 21, 2007, a notice of hearing was sent to petitioner, who attended the scheduled hearing. On June 6, 2007, the MWEU grievance committee
recommended that petitioner be suspended for 30 days.

In a June 20, 2007 letter,8 Borela informed petitioner and his corespondents of the MWEU Executive Boards "unanimous approval"9 of the
grievance committees recommendation and imposition upon them of a penalty of 30 days suspension, effective June 25, 2007.

In a June 26, 2007 letter10 to Borela, petitioner and his co-respondents took exception to the imposition and indicated their intention to appeal the
same to the General Membership Assembly in accordance with Section 2(g), Article V of the unions Constitution and By-Laws,11 which grants them
the right to appeal any arbitrary resolution, policy and rule promulgated by the Executive Board to the General Membership Assembly. In a June 28,
2007 reply,12 Borela denied petitioners appeal, stating that the prescribed period for appeal had expired.

Petitioner and his co-respondents sent another letter13 on July 4, 2007, reiterating their arguments and demanding that the General Membership
Assembly be convened in order that their appeal could be taken up. The letter was not acted upon.

Petitioner was once more charged with non-payment of union dues, and was required to attend an August 3, 2007 hearing.14 Thereafter, petitioner
was again penalized with a 30-day suspension through an August 21, 2007 letter15 by Borela informing petitioner of the Executive Boards
"unanimous approval"16 of the grievance committee recommendation to suspend him effective August 24, 2007, to which he submitted a written
reply,17 invoking his right to appeal through the convening of the General Membership Assembly. However, the respondents did not act on
petitioners plea.

Meanwhile, MWEU scheduled an election of officers on September 14, 2007. Petitioner filed his certificate of candidacy for Vice-President, but he
was disqualified for not being a member in good standing on account of his suspension.

On October 2, 2007, petitioner was charged with non-payment of union dues for the third time. He did not attend the scheduled hearing. This time, he
was meted the penalty of expulsion from the union, per "unanimous approval"18 of the members of the Executive Board. His pleas for an appeal to
the General Membership Assembly were once more unheeded.19
In 2008, during the freedom period and negotiations for a new collective bargaining agreement (CBA) with MWC, petitioner joined another union,
the Workers Association for Transparency, Empowerment and Reform, All-Filipino Workers Confederation (WATER-AFWC). He was elected union
President. Other MWEU members were inclined to join WATER-AFWC, but MWEU director Torres threatened that they would not get benefits from
the new CBA.20

The MWEU leadership submitted a proposed CBA which contained provisions to the effect that in the event of retrenchment, non-MWEU members
shall be removed first, and that upon the signing of the CBA, only MWEU members shall receive a signing bonus.21

Ruling of the Labor Arbiter

On October 13, 2008, petitioner filed a Complaint22 against respondents for unfair labor practices, damages, and attorneys fees before the National
Labor Relations Commission (NLRC), Quezon City, docketed as NLRC Case No. NCR-10-14255-08. In his Position Paper and other written
submissions,23 petitioner accused the respondents of illegal termination from MWEU in connection with the events relative to his non-payment of
union dues; unlawful interference, coercion, and violation of the rights of MWC employees to self-organization in connection with the proposed
CBA submitted by MWEU leadership, which petitioner claims contained provisions that discriminated against non-MWEU members. Petitioner
prayed in his Supplemental Position Paper that respondents be held guilty of unfair labor practices and ordered to indemnify him moral damages in
the amount of P100,000.00, exemplary damages amounting to P50,000.00, and 10% attorneys fees.

In their joint Position Paper and other pleadings,24 respondents claimed that the Labor Arbiter had no jurisdiction over the dispute, which is intra-
union in nature; that the Bureau of Labor Relations (BLR) was the proper venue, in accordance with Article 226 of the Labor Code25 and Section 1,
Rule XI of Department Order 40-03, series of 2003, of the DOLE;26 and that they were not guilty of unfair labor practices, discrimination, coercion
or restraint.

On May 29, 2009, Labor Arbiter Virginia T. Luyas-Azarraga issued her Decision27 which decreed as follows:

Indeed the filing of the instant case is still premature. Section 5, Article X-Investigation Procedures and Appeal Process of the Union Constitution and
By-Laws provides that:

Section 5. Any dismissed and/or expelled member shall have the rights to appeal to the Executive Board within seven (7) days from the date of notice
of the said dismissal and/or expulsion, which in [turn] shall be referred to the General Membership Assembly. In case of an appeal, a simple majority
of the decision of the Executive Board is imperative. The same shall be approved/disapproved by a majority vote of the general membership
assembly in a meeting duly called for the purpose.

On the basis of the foregoing, the parties shall exhaust first all the administrative remedies before resorting to compulsory arbitration. Thus, instant
case is referred back to the Union for the General Assembly to act or deliberate complainants appeal on the decision of the Executive Board.

WHEREFORE PREMISES CONSIDERED, instant case is referred back to the Union level for the General Assembly to act on complainants appeal.

SO ORDERED.28

Ruling of the National Labor Relations Commission

Petitioner appealed before the NLRC, where the case was docketed as NLRC LAC No. 07-001913-09. On March 15, 2010, the NLRC issued its
Decision,29 declaring as follows:

Complainant30 imputes serious error to the Labor Arbiter when she decided as follows:

a. Referring back the subject case to the Union level for the General Assembly to act on his appeal.

b. Not ruling that respondents are guilty of ULP as charged.

c. Not granting to complainant moral and exemplary damages and attorneys fees.

Complainant, in support of his charges, claims that respondents restrained or coerced him in the exercise of his right as a union member in violation
of paragraph "a", Article 249 of the Labor Code,31 particularly, in denying him the explanation as to whether there was observance of the proper
procedure in the increase of the membership dues from P100.00 to P200.00 per month. Further, complainant avers that he was denied the right to
appeal his suspension and expulsion in accordance with the provisions of the Unions Constitution and By-Laws. In addition, complainant claims that
respondents attempted to cause the management to discriminate against the members of WATER-AFWC thru the proposed CBA.

Pertinent to the issue then on hand, the Labor Arbiter ordered that the case be referred back to the Union level for the General Assembly to act on
complainants appeal. Hence, these appeals.
After a careful look at all the documents submitted and a meticulous review of the facts, We find that this Commission lacks the jurisdictional
competence to act on this case.

Article 217 of the Labor Code,32 as amended, specifically enumerates the cases over which the Labor Arbiters and the Commission have original and
exclusive jurisdiction. A perusal of the record reveals that the causes of action invoked by complainant do not fall under any of the enumerations
therein. Clearly, We have no jurisdiction over the same.

Moreover, pursuant to Section 1, Rule XI, as amended, DOLE Department Order No. 40-03 in particular, Item A, paragraphs (h) and (j) and Item B,
paragraph (a)(3), respectively, provide:

"A. Inter-Intra-Union disputes shall include:

"(h) violation of or disagreements over any provision of the Constitution and By-Laws of a Union or workers association.

"(j) violation of the rights and conditions of membership in a Union or workers association.

"B. Other Labor Relations disputes, not otherwise covered by Article 217 of the Labor Code, shall include

"3. a labor union and an individual who is not a member of said union."

Clearly, the above-mentioned disputes and conflict fall under the jurisdiction of the Bureau of Labor Relations, as these are inter/intra-union disputes.

WHEREFORE, the decision of the Labor Arbiter a quo dated May 29, 2009 is hereby declared NULL and VOID for being rendered without
jurisdiction and the instant complaint is DISMISSED.

SO ORDERED.33

Petitioner moved for reconsideration,34 but in a June 16, 2010 Resolution,35 the motion was denied and the NLRC sustained its Decision.

Ruling of the Court of Appeals

In a Petition for Certiorari36 filed with the CA and docketed as CA-G.R. SP No. 115639, petitioner sought to reverse the NLRC Decision and be
awarded his claim for damages and attorneys fees on account of respondents unfair labor practices, arguing among others that his charge of unfair
labor practices is cognizable by the Labor Arbiter; that the fact that the dispute is inter- or intra-union in nature cannot erase the fact that respondents
were guilty of unfair labor practices in interfering and restraining him in the exercise of his right to self-organization as member of both MWEU and
WATER-AFWC, and in discriminating against him and other members through the provisions of the proposed 2008 CBA which they drafted; that his
failure to pay the increased union dues was proper since the approval of said increase was arrived at without observing the prescribed voting
procedure laid down in the Labor Code; that he is entitled to an award of damages and attorneys fees as a result of respondents illegal acts in
discriminating against him; and that in ruling the way it did, the NLRC committed grave abuse of discretion.

On April 24, 2012, the CA issued the assailed Decision containing the following pronouncement:

The petition lacks merit.

Petitioners causes of action against MWEU are inter/intra-union disputes cognizable by the BLR whose functions and jurisdiction are largely
confined to union matters, collective bargaining registry, and labor education. Section 1, Rule XI of Department Order (D.O.) No. 40-03, Series of
2003, of the Department of Labor and Employment enumerates instances of inter/intra-union disputes, viz:

Section 1. Coverage. Inter/intra-union disputes shall include:

xxxx

(b) conduct of election of union and workers association officers/nullification of election of union and workers association officers;

(c) audit/accounts examination of union or workers association funds;

xxxx

(g) validity/invalidity of impeachment/ expulsion of union and workers association officers and members;

xxxx
(j) violations of or disagreements over any provision in a union or workers association constitution and by-laws;

xxxx

(l) violations of the rights and conditions of union or workers association membership;

xxxx

(n) such other disputes or conflicts involving the rights to self-organization, union membership and collective bargaining

(1) between and among legitimate labor organizations;

(2) between and among members of a union or workers association.

In brief, "Inter-Union Dispute" refers to any conflict between and among legitimate labor unions involving representation questions for purposes of
collective bargaining or to any other conflict or dispute between legitimate labor unions. "Intra-Union Dispute" refers to any conflict between and
among union members, including grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over
any provision of the unions constitution and by-laws, or disputes arising from chartering or affiliation of union. On the other hand, the circumstances
of unfair labor practices (ULP) of a labor organization are stated in Article 249 of the Labor Code, to wit:

Article 249. Unfair labor practices of labor organizations. It shall be unlawful for labor organization, its officers, agents, or representatives to commit
any of the following unfair labor practices:

(a) To restrain or coerce employees in the exercise of their right to self-organization; Provided, That the labor organization shall have the
right to prescribe its own rules with respect to the acquisition or retention of membership;

(b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with
respect to whom membership in such organization has been denied or terminated on any ground other than the usual terms and conditions
under which membership or continuation of membership is made available to other members;

xxxx

Applying the aforementioned rules, We find that the issues arising from petitioners right to information on the increased membership dues, right to
appeal his suspension and expulsion according to CBL provisions, and right to vote and be voted on are essentially intra-union disputes; these involve
violations of rights and conditions of union membership. But his claim that a director of MWEU warned that non-MWEU members would not
receive CBA benefits is an inter-union dispute. It is more of an "interference" by a rival union to ensure the loyalty of its members and to persuade
non-members to join their union. This is not an actionable wrong because interfering in the exercise of the right to organize is itself a function of self-
organizing.37 As long as it does not amount to restraint or coercion, a labor organization may interfere in the employees right to self-organization.38
Consequently, a determination of validity or illegality of the alleged acts necessarily touches on union matters, not ULPs, and are outside the scope of
the labor arbiters jurisdiction.

As regards petitioners other accusations, i.e., discrimination in terms of meting out the penalty of expulsion against him alone, and attempt to cause
the employer, MWC, to discriminate against non-MWEU members in terms of retrenchment or reduction of personnel, and signing bonus, while We
may consider them as falling within the concept of ULP under Article 249(a) and (b), still, petitioners complaint cannot prosper for lack of
substantial evidence. Other than his bare allegation, petitioner offered no proof that MWEU did not penalize some union members who failed to pay
the increased dues. On the proposed discriminatory CBA provisions, petitioner merely attached the pages containing the questioned provisions
without bothering to reveal the MWEU representatives responsible for the said proposal. Article 249 mandates that "x x x only the officers, members
of the governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable." Plain accusations against all MWEU officers, without specifying their actual
participation, do not suffice. Thus, the ULP charges must necessarily fail.

In administrative and quasi-judicial proceedings, only substantial evidence is necessary to establish the case for or against a party. Substantial
evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Petitioner failed to discharge
the burden of proving, by substantial evidence, the allegations of ULP in his complaint. The NLRC, therefore, properly dismissed the case.

FOR THESE REASONS, the petition is DISMISSED.

SO ORDERED.39

Thus, the instant Petition.

Issue
In an August 28, 2013 Resolution,40 this Court resolved to give due course to the Petition, which claims that the CA erred:

A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION CONFLICTS NEGATES THE COMPLAINT FOR UNFAIR LABOR
PRACTICES AGAINST A LABOR ORGANIZATION AND ITS OFFICERS, AND IN AFFIRMING THAT THE NLRC PROPERLY DISMISSED
THE CASE FOR ALLEGED LACK OF JURISDICTION.

B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR PRACTICES UNDER ARTICLE 249(a) AND (b) OF THE
LABOR CODE.

C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER AGAINST MEMBERS OF A RIVAL UNION IS (sic) MERELY AN
"INTERFERENCE" AND DO NOT AMOUNT TO "RESTRAINT" OR "COERCION".

D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL EVIDENCE IN PROVING RESPONDENTS SPECIFIC
ACTS OF UNFAIR LABOR PRACTICES.

E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO PETITIONER FOR MORAL AND EXEMPLARY DAMAGES,
AND ATTORNEYS FEES.41

Petitioners Arguments

Praying that the assailed CA dispositions be set aside and that respondents be declared guilty of unfair labor practices under Article 249(a) and (b)
and adjudged liable for damages and attorneys fees as prayed for in his complaint, petitioner maintains in his Petition and Reply42 that respondents
are guilty of unfair labor practices which he clearly enumerated and laid out in his pleadings below; that these unfair labor practices committed by
respondents fall within the jurisdiction of the Labor Arbiter; that the Labor Arbiter, the NLRC, and the CA failed to rule on his accusation of unfair
labor practices and simply dismissed his complaint on the ground that his causes of action are intra- or inter-union in nature; that admittedly, some of
his causes of action involved intra- or inter-union disputes, but other acts of respondents constitute unfair labor practices; that he presented substantial
evidence to prove that respondents are guilty of unfair labor practices by failing to observe the proper procedure in the imposition of the increased
monthly union dues, and in unduly imposing the penalties of suspension and expulsion against him; that under the unions constitution and by-laws,
he is given the right to appeal his suspension and expulsion to the general membership assembly; that in denying him his rights as a union member
and expelling him, respondents are guilty of malice and evident bad faith; that respondents are equally guilty for violating and curtailing his rights to
vote and be voted to a position within the union, and for discriminating against non-MWEU members; and that the totality of respondents conduct
shows that they are guilty of unfair labor practices.

Respondents Arguments

In their joint Comment,43 respondents maintain that petitioner raises issues of fact which are beyond the purview of a petition for review on
certiorari; that the findings of fact of the CA are final and conclusive; that the Labor Arbiter, NLRC, and CA are one in declaring that there is no
unfair labor practices committed against petitioner; that petitioners other allegations fall within the jurisdiction of the BLR, as they refer to intra- or
inter-union disputes between the parties; that the issues arising from petitioners right to information on the increased dues, right to appeal his
suspension and expulsion, and right to vote and be voted upon are essentially intra-union in nature; that his allegations regarding supposed coercion
and restraint relative to benefits in the proposed CBA do not constitute an actionable wrong; that all of the acts questioned by petitioner are covered
by Section 1, Rule XI of Department Order 40-03, series of 2003 as intra-/inter-union disputes which do not fall within the jurisdiction of the Labor
Arbiter; that in not paying his union dues, petitioner is guilty of insubordination and deserved the penalty of expulsion; that petitioner failed to
petition to convene the general assembly through the required signature of 30% of the union membership in good standing pursuant to Article VI,
Section 2(a) of MWEUs Constitution and By-Laws or by a petition of the majority of the general membership in good standing under Article VI,
Section 3; and that for his failure to resort to said remedies, petitioner can no longer question his suspension or expulsion and avail of his right to
appeal.

Our Ruling

The Court partly grants the Petition.

In labor cases, issues of fact are for the labor tribunals and the CA to resolve, as this Court is not a trier of facts. However, when the conclusion
arrived at by them is erroneous in certain respects, and would result in injustice as to the parties, this Court must intervene to correct the error. While
the Labor Arbiter, NLRC, and CA are one in their conclusion in this case, they erred in failing to resolve petitioners charge of unfair labor practices
against respondents.

It is true that some of petitioners causes of action constitute intra-union cases cognizable by the BLR under Article 226 of the Labor Code.

An intra-union dispute refers to any conflict between and among union members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision of the unions constitution and by-laws, or disputes arising from
chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of Department Order No. 40-03, Series of 2003 of the DOLE enumerate the
following circumstances as inter/intra-union disputes x x x.44
However, petitioners charge of unfair labor practices falls within the original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217
of the Labor Code. In addition, Article 247 of the same Code provides that "the civil aspects of all cases involving unfair labor practices, which may
include claims for actual, moral, exemplary and other forms of damages, attorneys fees and other affirmative relief, shall be under the jurisdiction of
the Labor Arbiters."

Unfair labor practices may be committed both by the employer under Article 248 and by labor organizations under Article 249 of the Labor Code,45
which provides as follows:

ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for a labor organization, its officers, agents or
representatives:

(a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to
prescribe its own rules with respect to the acquisition or retention of membership;

(b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with
respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms
and conditions under which membership or continuation of membership is made available to other members;

(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees;

(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of
an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations;

(e) To ask for or accept negotiation or attorneys fees from employers as part of the settlement of any issue in collective bargaining or any
other dispute; or

(f) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers, members of governing boards, representatives or agents or members of
labor associations or organizations who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).

Petitioner contends that respondents committed acts constituting unfair labor practices which charge was particularly laid out in his pleadings, but
that the Labor Arbiter, the NLRC, and the CA ignored it and simply dismissed his complaint on the ground that his causes of action were intra- or
inter-union in nature. Specifically, petitioner claims that he was suspended and expelled from MWEU illegally as a result of the denial of his right to
appeal his case to the general membership assembly in accordance with the unions constitution and by-laws. On the other hand, respondents counter
that such charge is intra-union in nature, and that petitioner lost his right to appeal when he failed to petition to convene the general assembly through
the required signature of 30% of the union membership in good standing pursuant to Article VI, Section 2(a) of MWEUs Constitution and By-Laws
or by a petition of the majority of the general membership in good standing under Article VI, Section 3.

Under Article VI, Section 2(a) of MWEUs Constitution and By-Laws, the general membership assembly has the power to "review revise modify
affirm or repeal [sic] resolution and decision of the Executive Board and/or committees upon petition of thirty percent (30%) of the Union in good
standing,"46 and under Section 2(d), to "revise, modify, affirm or reverse all expulsion cases."47 Under Section 3 of the same Article, "[t]he decision
of the Executive Board may be appealed to the General Membership which by a simple majority vote reverse the decision of said body. If the general
Assembly is not in session the decision of the Executive Board may be reversed by a petition of the majority of the general membership in good
standing."48 And, in Article X, Section 5, "[a]ny dismissed and/or expelled member shall have the right to appeal to the Executive Board within
seven days from notice of said dismissal and/or expulsion which, in [turn] shall be referred to the General membership assembly. In case of an
appeal, a simple majority of the decision of the Executive Board is imperative. The same shall be approved/disapproved by a majority vote of the
general membership assembly in a meeting duly called for the purpose."49

In regard to suspension of a union member, MWEUs Constitution and By-Laws provides under Article X, Section 4 thereof that "[a]ny suspended
member shall have the right to appeal within three (3) working days from the date of notice of said suspension. In case of an appeal a simple majority
of vote of the Executive Board shall be necessary to nullify the suspension."

Thus, when an MWEU member is suspended, he is given the right to appeal such suspension within three working days from the date of notice of
said suspension, which appeal the MWEU Executive Board is obligated to act upon by a simple majority vote. When the penalty imposed is
expulsion, the expelled member is given seven days from notice of said dismissal and/or expulsion to appeal to the Executive Board, which is
required to act by a simple majority vote of its members. The Boards decision shall then be approved/ disapproved by a majority vote of the general
membership assembly in a meeting duly called for the purpose.1avvphi1

The documentary evidence is clear that when petitioner received Borelas August 21, 2007 letter informing him of the Executive Boards unanimous
approval of the grievance committee recommendation to suspend him for the second time effective August 24, 2007, he immediately and timely filed
a written appeal. However, the Executive Board then consisting of respondents Borela, Tierra, Bolo, Casaas, Fernandez, Rendon, Montemayor,
Torres, Quebral, Pagulayan, Cancino, Maga, Cometa, Mancenido, and two others who are not respondents herein did not act thereon. Then again,
when petitioner was charged for the third time and meted the penalty of expulsion from MWEU by the unanimous vote of the Executive Board, his
timely appeal was again not acted upon by said board this time consisting of respondents Borela, Quebral, Tierra, Imana, Rendon, Yeban, Cancino,
Torres, Montemayor, Mancenido, Mandilag, Fernandez, Buenaventura, Apilado, Maga, Barbero, Cometa, Bolo, and Manlapaz.

Thus, contrary to respondents argument that petitioner lost his right to appeal when he failed to petition to convene the general assembly through the
required signature of 30% of the union membership in good standing pursuant to Article VI, Section 2(a) of MWEUs Constitution and By-Laws or
by a petition of the majority of the general membership in good standing under Article VI, Section 3, this Court finds that petitioner was illegally
suspended for the second time and thereafter unlawfully expelled from MWEU due to respondents failure to act on his written appeals. The required
petition to convene the general assembly through the required signature of 30% (under Article VI, Section 2[a]) or majority (under Article VI, Section
3) of the union membership does not apply in petitioners case; the Executive Board must first act on his two appeals before the matter could properly
be referred to the general membership. Because respondents did not act on his two appeals, petitioner was unceremoniously suspended, disqualified
and deprived of his right to run for the position of MWEU Vice-President in the September 14, 2007 election of officers, expelled from MWEU, and
forced to join another union, WATER-AFWC. For these, respondents are guilty of unfair labor practices under Article 249 (a) and (b) that is,
violation of petitioners right to self-organization, unlawful discrimination, and illegal termination of his union membership which case falls within
the original and exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217 of the Labor Code.

The primary concept of unfair labor practices is stated in Article 247 of the Labor Code, which states:

Article 247. Concept of unfair labor practice and procedure for prosecution thereof. Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of
healthy and stable labor-management relations.

"In essence, [unfair labor practice] relates to the commission of acts that transgress the workers right to organize."50 "[A]ll the prohibited acts
constituting unfair labor practice in essence relate to the workers right to self-organization."51 "[T]he term unfair labor practice refers to that gamut
of offenses defined in the Labor Code which, at their core, violates the constitutional right of workers and employees to self-organization."52

Guaranteed to all employees or workers is the right to self-organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. This is made plain by no less than three provisions of the Labor Code of the Philippines. Article 243 of the Code
provides as follows:

ART. 243. Coverage and employees right to self-organization. All persons employed in commercial, industrial and agricultural enterprises and in
religious, charitable, medical, or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join,
or assist labor organizations of their own choosing for purposes or collective bargaining. Ambulant, intermittent and itinerant workers, self-employed
people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection.

Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to interfere with, restrain or coerce employees in the exercise
of their right to self-organization. Similarly, Article 249 (a) makes it an unfair labor practice for a labor organization to restrain or coerce employees
in the exercise of their rights to self-organization . . .

xxxx

The right of self-organization includes the right to organize or affiliate with a labor union or determine which of two or more unions in an
establishment to join, and to engage in concerted activities with co-workers for purposes of collective bargaining through representatives of their own
choosing, or for their mutual aid and protection, i.e., the protection, promotion, or enhancement of their rights and interests.53

As members of the governing board of MWEU, respondents are presumed to know, observe, and apply the unions constitution and by-laws. Thus,
their repeated violations thereof and their disregard of petitioners rights as a union member their inaction on his two appeals which resulted in his
suspension, disqualification from running as MWEU officer, and subsequent expulsion without being accorded the full benefits of due process
connote willfulness and bad faith, a gross disregard of his rights thus causing untold suffering, oppression and, ultimately, ostracism from MWEU.
"Bad faith implies breach of faith and willful failure to respond to plain and well understood obligation."54 This warrants an award of moral damages
in the amount of P100,000.00. Moreover, the Civil Code provides:

Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs, defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

xxxx

(12) The right to become a member of associations or societies for purposes not contrary to law;

In Vital-Gozon v. Court of Appeals,55 this Court declared, as follows:

Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. They may be recovered if they are the proximate result of the defendants wrongful act or omission. The instances
when moral damages may be recovered are, inter alia, acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,
which, in turn, are found in the Chapter on Human Relations of the Preliminary Title of the Civil Code. x x x

Under the circumstances, an award of exemplary damages in the amount of P50,000.00, as prayed for, is likewise proper. "Exemplary damages are
designed to permit the courts to mould behavior that has socially deleterious consequences, and their imposition is required by public policy to
suppress the wanton acts of the offender."56 This should prevent respondents from repeating their mistakes, which proved costly for
petitioner.1wphi1

Under Article 2229 of the Civil Code, [e]xemplary or corrective damages are imposed, by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or compensatory damages. As this court has stated in the past: Exemplary damages are designed by our
civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against
such behaviour.57

Finally, petitioner is also entitled to attorneys fees equivalent to 10 per cent (10%) of the total award. The unjustified acts of respondents clearly
compelled him to institute an action primarily to vindicate his rights and protect his interest. Indeed, when an employee is forced to litigate and incur
expenses to protect his rights and interest, he is entitled to an award of attorneys fees.58

WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April 24, 2012 Decision of the Court of Appeals in CA-G.R. SP No. 115639
is hereby MODIFIED, in that all of the respondents - except for Carlos Villa, Ric Briones, and Chito Bernardo - are declared guilty of unfair labor
practices and ORDERED TO INDEMNIFY petitioner Allan M. Mendoza the amounts of Pl00,000.00 as and by way of moral damages, PS0,000.00
as exemplary damages, and attorney's fees equivalent to 10 per cent (10%) of the total award.

SO ORDERED.

THIRD DIVISION

[G.R. NO. 168988 : June 19, 2007]

FERNANDO G. MANAYA, Petitioner, v. ALABANG COUNTRY CLUB INCORPORATED, Respondent.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure filed by Fernando G. Manaya (petitioner) assailing:
(1) the Decision1 of the Court of Appeals in CA-G.R. SP No. 75417, dated 9 May 2005, granting the Petition of Alabang Country Club Inc.
(respondent) and setting aside the Resolutions dated 30 August 2002 and 30 October 2002 of the National Labor Relations Commission (NLRC); and
(2) the Resolution2 of the Court of Appeals dated 21 July 2005 denying petitioner's Motion for Reconsideration of its earlier Decision.

The assailed decision of the Court of Appeals reversed the Resolution of the NLRC dismissing the appeal of the respondent for failure to perfect its
appeal within the statutory period. Instead, the Court of Appeals ordered the NLRC to give due course to the appeal of the respondent.

The antecedent facts are:

Petitioner alleged that on 21 August 1989, he was initially hired by the respondent as a maintenance helper 3 receiving a salary of P198.00 per day. He
was later designated as company electrician. He continued to work for the respondent until 22 August 1998 when the latter, through its Engineering
and Maintenance Department Manager, Engr. Ronnie B. de la Cruz, informed him that his services were no longer required by the company. 4
Petitioner alleged that he was forcibly and illegally dismissed without cause and without due process on 22 August 1998. 5 Hence, he filed a
Complaint6 before the Labor Arbiter. He claimed that he had not committed any infraction of company policies or rules and that he was not paid his
service incentive leave pay, holiday pay and 13th month pay. He further asserted that with his more or less nine years of service with the respondent,
he had become a regular employee. He, therefore, demanded his reinstatement without loss of seniority rights with full backwages and all monetary
benefits due him.7

In its Answer, respondent denied that petitioner was its employee. It countered by saying that petitioner was employed by First Staffing Network
Corporation (FSNC), with which respondent had an existing Memorandum of Agreement dated 21 August 1989. Thus, by virtue of a legitimate job
contracting, petitioner, as an employee of FSNC, came to work with respondent, first, as a maintenance helper, and subsequently as an electrician.
Respondent prayed for the dismissal of the complaint insisting that petitioner had no cause of action against it.

In a Decision, dated 20 November 2000, the Labor Arbiter held:


WHEREFORE, premises considered, complainant Fernando G. Manaya is hereby found to be a regular employee of respondent Alabang Country
Club, Inc., as aforediscussed. His dismissal from the service having been effected without just and valid cause and without the due observance of due
process is hereby declared illegal. Consequently, respondent Alabang Country Club, Inc. is hereby ordered to reinstate complainant to his former
position without loss of seniority rights and other benefits appurtenant thereto with full backwages in the partial amount of P160,724.48 as computed
by Ms. Ma. Concepcion Manliclic and duly noted by Ms. Ma. Elena L. Estadilla, OIC-CEU, NCR-South Sector which computation has been made
part of the records.

Furthermore, respondent Alabang Country Club, Inc. and First Staffing Network Corporation are hereby ordered to pay complainant, jointly and
severally the following amounts by way of the following:

1. Service Incentive Leave 2,961.75

2. 13th Month Pay 15,401.10, and

3. Attorney's fees of ten (10%) percent of the total

monetary award herein adjudged due him, within ten (10) days from receipt hereof. 8

Respondent filed an Appeal with the NLRC which dismissed the same. 9 In a Resolution dated 30 August 2002, the NLRC held:

PREMISES CONSIDERED, instant appeal from the Decision of November 20, 2000 is hereby DISMISSED for failure to perfect appeal within the
statutory period of appeal. The Decision is now final and executory. 10

The NLRC found that respondent's counsel of record Atty. Angelina A. Mailon of Monsod, Valencia and Associates received a copy of the Labor
Arbiter's Decision on or before 11 December 2000 as shown by the postal stamp or registry return card. 11 Said counsel did not file a withdrawal of
appearance. Instead, a Memorandum of Appeal12 dated 26 December 2000 was filed by the respondent's new counsel, Atty. Arizala of Tierra and
Associates Law Office. Reckoned from 11 December 2000, the date of receipt of the Decision by respondent's previous counsel, the filing of the
Memorandum of Appeal by its new counsel on 26 December 2000 was clearly made beyond the reglementary period. The NLRC held that the failure
to perfect an appeal within the statutory period is not only mandatory but jurisdictional. The appeal having been belatedly filed, the Decision of the
Labor Arbiter had become final and executory. 13

Respondent filed a Motion for Reconsideration,14 which the NLRC denied in a Resolution dated 30 October 2002. 15 The NLRC held that the decision
of the Labor Arbiter has become final and executory on 28 November 2002; thus, Entry of Judgment, dated 8 January 2003 16 was issued.

Respondent filed a Petition for Certiorari17 under Rule 65 of the Rules of Court before the Court of Appeals. In a Decision dated 9 May 2005, 18 the
Court of Appeals granted the petition and ordered the NLRC to give due course to respondent's appeal of the Labor Arbiter's Decision. Petitioner
filed a Motion for Reconsideration which was denied by the Court of Appeals in a Resolution 19 dated 21 July 2005.

Not to be dissuaded, petitioner filed the instant petition before this Court.

The issue for resolution:

WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT ORDERED THE NLRC TO GIVE DUE COURSE TO
THE APPEAL OF RESPONDENT ALABANG COUNTRY CLUB, INCORPORATED EVEN IF THE SAID APPEAL WAS FILED BEYOND
THE REGLEMENTARY PERIOD OF TEN (10) DAYS FOR PERFECTING AN APPEAL. 20

Essentially, the issue raised by the respondent before the NLRC in assailing the decision of the Labor Arbiter pertains to the finding of the Labor
Arbiter that petitioner was a regular employee of the respondent.

In granting the petition, the Court of Appeals relied mainly on the case of Aguam v. Court of Appeals, 21 where this Court held that litigation must be
decided on the merits and not on technicalities. The appellate court further justified the grant of respondent's petition by saying that the negligence of
its counsel should not bind the respondent.22

The Court of Appeals gave credence to respondent's claim that its lawyer abandoned the case; hence, they were not effectively represented by a
competent counsel. It further held that the respondent, upon its receipt of the Decision of the Labor Arbiter on 15 December 2000, filed its appeal on
26 December 2000 through a new lawyer. The appeal filed by respondent through its new lawyer on 26 December 2000 was well within the
reglementary period, 25 December 2000 being a holiday.

It is axiomatic that when a client is represented by counsel, notice to counsel is notice to client. In the absence of a notice of withdrawal or
substitution of counsel, the Court will rightly assume that the counsel of record continues to represent his client and receipt of notice by the former is
the reckoning point of the reglementary period. 23 As heretofore adverted, the original counsel did not file any notice of withdrawal. Neither was there
any intimation by respondent at that time that it was terminating the services of its counsel.
For negligence not to be binding on the client, the same must constitute gross negligence as to amount to a deprivation of property without due
process.24 This does not exist in the case at bar. Notice sent to counsel of record is binding upon the client and the neglect or failure of counsel to
inform him of an adverse judgment resulting in the loss of his right to appeal is not a ground for setting aside a judgment, valid and regular on its
face.25

Even more, it is respondent's duty as a client to be in touch with his counsel so as to be constantly posted about the case. It is mandated to inquire
from its counsel about the status and progress of the case from time to time and cannot expect that all it has to do is sit back, relax and await the
outcome of the case.26

On this score, we hold that the notice to respondent's counsel, Atty. Angelina A. Mailon on 11 December 2000 is the controlling date of the receipt of
the decision.

We now come to the issue of whether or not the Court of Appeals properly gave due course to the petition of the respondent before it.

Of relevance is Section 1, Rule VI of the 2005 Revised Rules of the NLRC'

Section 1. PERIODS OF APPEAL. - Decisions, resolutions or orders of the Labor Arbiter shall be final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt thereof; and in case of decisions, resolutions or orders of the Regional
Director of the Department of Labor and Employment pursuant to Article 129 of the Labor Code, within five (5) calendar days from receipt thereof.
If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first working day
following such Saturday, Sunday or holiday.

No motion or request for extension of the period within which to perfect an appeal shall be allowed.

Remarkably, in highly exceptional instances, we have allowed the relaxing of the rules on the application of the reglementary periods of appeal. 27
Thus:

In Ramos v. Bagasao, 96 SCRA 395, we excused the delay of four days in the filing of a notice of appeal because the questioned decision of the trial
court was served upon appellant Ramos at a time when her counsel of record was already dead. Her new counsel could only file the appeal four days
after the prescribed reglementary period was over. In Republic v. Court of Appeals, 83 SCRA 453, we allowed the perfection of an appeal by the
Republic despite the delay of six days to prevent a gross miscarriage of justice since the Republic stood to lose hundreds of hectares of land already
titled in its name and had since then been devoted for educational purposes. In Olacao v. National Labor Relations Commission, 177 SCRA 38, 41,
we accepted a tardy appeal considering that the subject matter in issue had theretofore been judicially settled, with finality, in another case. The
dismissal of the appeal would have had the effect of the appellant being ordered twice to make the same reparation to the appellee. 28

We pronounced in those cases that technicality should not be allowed to stand in the way of equitably and completely resolving the rights and
obligations of the parties.

In all these, the Court allowed liberal interpretation given the extraordinary circumstances that justify a deviation from an otherwise stringent rule. 29

Clearly, emphasized in these cases is that the policy of liberal interpretation is qualified by the requirement that there must be exceptional
circumstances to allow the relaxation of the rules. 30

Absent exceptional circumstances, we adhere to the rule that certain procedural precepts must remain inviolable, like those setting the periods for
perfecting an appeal or filing a Petition for Review, for it is doctrinally entrenched that the right to appeal is a statutory right and one who seeks to
avail oneself of that right must comply with the statute or rules. The rules, particularly the requirements for perfecting an appeal within the
reglementary period specified in the law, must be strictly followed as they are considered indispensable interdictions against needless delays and for
orderly discharge of judicial business. Furthermore, the perfection of an appeal in the manner and within the period permitted by law is not only
mandatory but also jurisdictional and the failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing party has
the right to file an appeal within the prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his/her
case.31

In this particular case, we adhere to the strict interpretation of the rule for the following reasons:

Firstly, in this case, entry of judgment had already been made 32 which rendered the Decision of the Labor Arbiter as final and executory.

Secondly, it is a basic and irrefragable rule that in carrying out and in interpreting the provisions of the Labor Code and its implementing regulations,
the workingman's welfare should be the primordial and paramount consideration. The interpretation herein made gives meaning and substance to the
liberal and compassionate spirit of the law enunciated in Article 4 of the Labor Code that "all doubts in the implementation and interpretation of the
provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of labor." 33

In the case of Bunagan v. Sentinel34 we declared that:


[T]hat the perfection of an appeal within the statutory or reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the
questioned decision final and executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal.
The underlying purpose of this principle is to prevent needless delay, a circumstance which would allow the employer to wear out the efforts and
meager resources of the worker to the point that the latter is constrained to settle for less than what is due him. This Court has declared that although
the NLRC is not bound by the technical rules of procedure and is allowed to be liberal in the interpretation of the rules in deciding labor cases, such
liberality should not be applied where it would render futile the very purpose for which the principle of liberality is adopted. The liberal interpretation
stems from the mandate that the workingman's welfare should be the primordial and paramount consideration. We see no reason in this case to waive
the rules on the perfection of appeal.35

The Court is aware that the NLRC is not bound by the technical rules of procedure and is allowed to be liberal in the interpretation of rules in
deciding labor cases. However, such liberality should not be applied in the instant case as it would render futile the very purpose for which the
principle of liberality is adopted. The liberal interpretation in favor of labor stems from the mandate that the workingman's welfare should be the
primordial and paramount consideration. x x x.36 (Emphases supplied.)

Indeed, there is no room for liberality in the instant case "as it would render futile the very purpose for which the principle of liberality is adopted."
As so rightfully enunciated, "the liberal interpretation in favor of labor stems from the mandate that the workingman's welfare should be the
primordial and paramount consideration." This Court has repeatedly ruled that delay in the settlement of labor cases cannot be countenanced. Not
only does it involve the survival of an employee and his loved ones who are dependent on him for food, shelter, clothing, medicine and education; it
also wears down the meager resources of the workers to the point that, not infrequently, they either give up or compromise for less than what is due
them.37

Without doubt, to allow the appeal of the respondent as what the Court of Appeals had done and remand the case to the NLRC would only result in
delay to the detriment of the petitioner. In Narag v. National Labor Relations Commission, 38 citing Vir-Jen Shipping and Marine Services, Inc. v.
National Labor Relations Commission,39 we held that delay in most instances gives the employers more opportunity not only to prepare even
ingenious defenses, what with well-paid talented lawyers they can afford, but even to wear out the efforts and meager resources of the workers, to the
point that not infrequently the latter either give up or compromise for less than what is due them. 40

Nothing is more settled in our jurisprudence than the rule that when the conflicting interest of loan and capital are weighed on the scales of social
justice, the heavier influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the under-privileged
worker.41

Thirdly, respondent has not shown sufficient justification to reverse the findings of the Labor Arbiter as affirmed by the NLRC.

Pertinent provision of the Labor Code provides:

ART. 223. APPEAL. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following
grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(b) If the decision, order or award was secured through fraud or coercion, including graft an corruption;

(c) If made purely on question of law; andcralawlibrary

(d) If serious errors in the finding of facts are raised which would cause grave or irreparable damage or injury to the appellant.

Under the above provision, to obtain a reversal of the decision of the Labor Arbiter, the respondent must be able to show in his appeal that any one of
the above instances exists.

Respondent failed to show the existence of any of the above. A more than perfunctory reading of the Decision of the Labor Arbiter shows that the
same is supported by the evidence on record.

Respondent narrates that it had a contract of services, first, with Supreme Construction (Supreme). Supreme assigned petitioner to work with the
respondent starting as a painter and moving on to perform electrical jobs. Respondent terminated its contract with Supreme and entered into another
contract of services with another job-contracting agency, First Staffing Network Corporation. Petitioner continued to work for the respondent which
claimed that the former was supplied by FNSC to it as part of its contract to supply the manpower requirements of the respondent. Petitioner is not
the employee of the respondent. He was directly hired first by Supreme then later by FNSC and deployed to work with the respondent based on the
contract of services between respondent and these job-contracting agencies. All these considered, respondent insists that petitioner is therefore not its
employee.

We do not agree to this submission of the respondent. The Labor Arbiter concluded otherwise and this finds support from the evidence, thus:
[R]espondent was not able to convincingly disprove complainant's claims that at the outset, he was directly hired by it as a maintenance helper on 21
August 1989. Although said respondent alleges that complainant was hired by its job contractor, Supreme Construction, it failed to submit in
evidence the Contract of Service it had entered into in order to establish the entry of complainant as deployed by said company for his duties at
Alabang Country Club, Inc. pursuant to the said Agreement. It can therefore be readily presumed that said respondent did not produce the said
document because the production of the same will readily prove complainant's assertion of having been hired long before said contractor Supreme
Construction entered into the picture. We have noted complainant's admission of having been later coerced to sign up with said Supreme Construction
by respondent Alabang Country Club, Inc. which he did as he was told in his fear of losing his job.

As shown by respondent Alabang Country Club, Inc.'s own evidence, it later terminated its contract of service or Memorandum of Agreement with
Supreme Construction and entered into a new contract of service with respondent First Staffing Network Corporation effective on 16 June 1994.
However by said respondent's own allegation, even with the absence of complainant's supposed direct employer Supreme Construction, he still
remained in its employ until he signed up with respondent First Staffing Network Corporation on 11 February 1996. This indeed runs counter to the
normal course of human experience such that when a contractor losses (sic) his contract of service he packs up along with all his employees, but in
this case, complainant was not terminated from the service notwithstanding the expiration/termination of the contract of service of his alleged direct
employer. Complainant remained working with respondent Alabang Country Club, Inc. despite the severance of the contractual relations between
itself and Supreme Construction.

The initial Memorandum of Agreement entered into by respondents Alabang Country Club, Inc. and First Staffing Network Corporation was dated,
16 June 1994, and was apparently renewed thereafter providing under Article III - On Compensation thereof, the following, viz:

"3.01 For and in consideration of the performance by FIRST STAFFING of its obligations under this AGREEMENT, the CLIENT agrees to pay the
former based on the schedule of billing rates which shall be specified in the Personnel Requisition Form signed by the CLIENT. The schedule of
billing rates is as follows, to wit:

"BILLING RATES/HOUR PLUS 10% VALUE ADDED TAX

"Covered Pos.

ABC

Waiters Accounting Supervisor

Janitors Data Encoders

Bag Boy Gen. Clerks

Stewards Secretary

Cook Helpers Receptionist

Messengers Secretary

Cashier"

"xxx."

Nowhere, does complainant's position of electrician appear as covered in the said contract. Finally, suffice it for Us to stress that the said contract
covers almost all of respondent's Alabang Country Club, Inc.'s workforce including those whose jobs or activities are directly related to said
respondents' business, emphasizing in no uncertain terms that respondent First Staffing Network Corporation was not a truly bonafide job contractor,
as it did not contract out specific service but merely supplied work personnel, a clear indication, that it was engaged in a "job - only" contracting
which is prohibited by law.

Besides, the said respondent First Staffing Network Corporation failed to prove that it is a bonafide job contractor by showing that it had an adequate
capital or investment in tools, equipments and machineries and premises for that matter, and so did respondent Alabang Country Club, Inc. fail to
establish the same. For that matter, respondent First Staffing Network Corporation had waived its right to present any evidence in its favor in this
case.

Obviously, herein respondent Alabang Country Club, Inc. actually resorted to contracting out all the positions for its workforce in violation of law in
its desire to circumvent said employees' rights as regular employees under the law. 42

The existence of an employer-employee relationship between petitioner and respondent is fortified by the fact that during his stint with the
respondent, petitioner was given the opportunity to attend a seminar/training on refrigeration and air conditioning from 16 January 1995 to 18
February 1995.43 A certificate of participation signed by three of respondent's officials was issued to the petitioner.
Equally significant is Article 106 of the Labor Code, as amended, which provides that legitimate job contracting is permitted, but labor-only
contracting is prohibited. The said provision reads:

Art. 106. Contractor or subcontractor. - Whenever an employer enters into a contract with another person for the performance of the former's work,
the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly
and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same
manner and extent that he is liable to employees directly employed by him.

The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers established
under the Code. In so prohibiting or restricting, he may make appropriate distinctions between labor - only contracting and job contracting 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 provision of this Code.

There is "labor only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are
directly related to the principal business of such employer. In such cases, 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.

Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 18, distinguishes between
legitimate and labor - only contracting:

Section 3. Trilateral Relationship in Contracting Arrangements. - In legitimate contracting, there exists a trilateral relationship under which there is a
contract for a specific job, work or service between the principal and the contractor or subcontractor, and a contract of employment between the
contractor and subcontractor and its workers. Hence, there are three parties involved in these arrangements, the principal which decides to farm out a
job or service to a contractor or subcontractor, the contractor or subcontractor which has the capacity to independently undertake the performance of
the job, work or service, and the contractual workers engaged by the contractor or subcontractor to accomplish the job, work or service.

Section 5. Prohibition against labor only contracting. - Labor-only contracting is hereby declared prohibited. For this purpose, labor - only
contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or
service for a principal, and any of the following elements are present:

i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the
employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business
of the principal, or

ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.

The foregoing provisions shall be without prejudice to the application of Article 248(c) of the Labor Code, as amended.

"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipments, implements,
machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or
service contracted out.

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 not
only the end to be achieved, but also the manner and means to be used in reaching that end.

The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the
work according to his on methods and without being subject to the control of the employer, except only as to the results of the work.

In legitimate labor contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid
their wages. The principal employer becomes jointly and severally liable with the job contractor, only for the payment of the employees' wages
whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. 44

Despite respondent's disavowal of the existence of the employer-employee relationship between it and petitioner and its insistence that petitioner is
an employee first, of Supreme and subsequently, of FSNC, the totality of the facts and surrounding circumstances of the case convey otherwise.

On this point, the law is clear-cut. In labor only contracting, the statute creates an employer employee relationship for a comprehensive purpose: to
prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the
employees of the labor only contractor as if such employees had been directly employed by the principal employer.
The Labor Code and its implementing rules empower the Labor Arbiter to be the trier of facts in labor cases. Much reliance is placed on findings of
facts of the Arbiter having had the opportunity to talk to and discuss with the parties and their witnesses the factual matters of the case during the
conciliation phase.45 We, thus, give full credence to the findings of facts of the labor arbiter.

Wherefore, premises considered, the Petition is GRANTED. The Decision of the Court of Appeals dated 9 May 2005 and its Resolution dated 21 July
2005 is REVERSED. The Decision of the Labor Arbiter dated 20 November 2000 is reinstated. Let the records of the above-entitled case be
remanded to the Labor Arbiter for immediate execution of the Decision. No costs.

SO ORDERED.

G.R. No. 207838, January 25, 2017

LEO T. MAULA, Petitioner, v. XIMEX DELIVERY EXPRESS, INC., Respondent.

DECISION

PERALTA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Civil Procedure seeks to reverse the November 20, 2012 Decision 1 and June 21,
2013 Resolution2 of the Court of Appeals (CA) in CA G.R. SP No. 121176, which set aside the December 15, 2010 Resolution 3 and July 20, 2011
Decision4 of the National Labor Relations Commission (NLRC) that affirmed the February 18, 2010 Decision5 of the Labor Arbiter (LA) finding the
illegal dismissal of petitioner.

On May 12, 2009, petitioner Leo T. Maula filed a complaint against respondent Ximex Delivery Express, Inc. and its officers (Jerome Ibaez,
Lilibeth Gorospe, and Amador Cabrera) for illegal dismissal, underpayment of salary/wages, non-payment/underpayment of overtime pay,
underpayment of holiday premium, underpayment of 13th month pay, non-payment of ECOLA, non-payment/underpayment of night shift differential,
illegal deduction, illegal suspension, regularization, harassment, underremittance of SSS premiums, deduction of tax without tax identification
number, moral and exemplary damages, and attorney's fees. 6

The factual antecedents, according to petitioner, are as follows:

Petitioner was hired by the respondent as Operation Staff on March 23, 2002. As Operation Staff, he performed a variety of duties such as but not
limited to documentation, checker, dispatcher or airfreight coordinator. He [was] on call anytime of the day or night. He was rendering night duty
which [started] at 6:00p.m. More often it went beyond the normal eight hour schedule such that he normally rendered duty until 6:00 or 7:00 the
following morning. This [was] without payment of the corresponding night shift differential and overtime pay. His salary from March 2002 to
December 2004 was PhP3,600.00 per month; from January 2005 to July 25, 2006 at PhP6,200.00 per month; from July 26, 2006 to March 15, 2008
at PhP7,500.00 per month; from March 16, 2008 to February 15, 2009 at PhP9,412.00 per month; and, from February 16, 2009 to March 31, 2009 at
PhP9,932.00 per month. x x x.

Petitioner's employment was uneventful until came February 18, 2009 when the [respondent's] HRD required him and some other employees to sign
a form sub-titled "Personal Data for New Hires." When he inquired about it he was told it was nothing but merely for the twenty peso increase which
the company owner allegedly wanted to see. He could not help but entertain doubts on the scheme as they were hurriedly made to sign the same. It
also [appeared] from the form that the designated salary/wage [was] daily instead of on a monthly basis. x x x.

On February 21, 2009, a Saturday evening, they were surprised to receive an invitation from the manager for a dinner and drinking spree in a
restaurant-bar. It indeed came as a surprise as he never had that kind of experience with the manager in his seven (7) years working for the company.

On February 25, 2009, he, together with some other concerned employees[,] requested for a meeting with their manager together with the manager of
the HRD. They questioned the document and aired their side voicing their apprehensions against the designation "For New Hires" since they were
long time regular employees earning monthly salary/wages and not daily wage earners. The respondent company's manager[,] Amador Cabrera[,]
retorted: "Ay wala yan walang kwenta yan." When he disclosed that he consulted a lawyer, respondent Cabrera insisted it was nothing and
accordingly, no lawyer could say that it really matters. Cabrera even dared the petitioner to present the lawyer. The meeting was concluded. When he
was about to exit from the conference room he was addressed with the parting words: "'Baka gusto mo, mag-labor ka!" He did not react.

On March 4, 2009, petitioner filed a complaint before the National Conciliation and Mediation Board. During the hearing held on March 25, 2009, it
was stipulated/agreed upon that:

(1) Company's counsel admits that petitioner is a regular employee;


(2) There shall be no retaliatory action between petitioner and the company arising from this complaint;

(3) Issues anent BIR and SSS shall be brought to the proper forum.

xxx

Not long thereafter, or on March 25, 2009, in the evening, a supposed problem cropped up. A misroute of cargo was reported and the company [cast]
the whole blame on the petitioner. It was alleged that he erroneously wrote the label on the box - the name and destination, and allegedly [was] the
one who checked the cargo. The imputation is quite absurd because it was the client who actually wrote the name and destination, whereas, it was not
the petitioner but his co-employee who checked the cargo. The following day, he received a memorandum charging him with "negligence in
performing duties."

On April 2, 2009 at 4:00 p.m., he received another memorandum of '"reassignment" wherein he was directed to report effective April 2, 2009 to
Richard Omalza and Ferdinand Marzan in another department of the company. But then, at around 4:30 p.m. of the same day, he was instructed by
the HR manager to proceed to his former office for him to train his replacement. He went inside the warehouse and at around 6:00 p.m. he began
teaching his replacement. At 8:00 p.m.[,] his replacement went outside. He waited for sometime and came to know later when he verified outside that
the person already went straight home. When he went back inside, his supervisor insisted [to] him to continue with his former work, but due to the
"reassignment paper" he had some reservations. Sensing he might again be framed up and maliciously accused of such as what happened on March
25, 2009, he thus refused. Around 10:30 p.m., he went home. x x x.

The following day, an attempt to serve another memorandum was made on him. This time he was made to explain by the HR Manager why he did
not perform his former work and not report to his reassignment. It only [validated] his apprehension of a set-up. For how could he be at two places at
[the same] time (his former work is situated in Sucat, Parafiaque, whereas, his new assignment is in FTI, Taguig City). It bears emphasizing that the
directive for him to continue discharging his former duties was merely verbal. At this point, petitioner lost his composure. Exasperated, he refused to
receive the memorandum and thus retorted "Seguro na abnormal na ang utak mo" as it dawned on him that they were out looking for every means
possible to pin him down.

Nonetheless, he reported to his reassignment in FTI Taguig on April3, 2009. There he was served with the memorandum suspending him from work
for thirty (30) days effective April 4, 2009 for alleged "Serious misconduct and willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work." His apprehension was thus confirmed. x x x.

On April 8, 2009, he filed a case anew with the NCMB x x x Hearings were scheduled at the NCMB on April 20, 27, and May 5, 2009 but the
respondents never appeared. On May 4, 2009, he reported to the office only to be refused entry. Instead, a dismissal letter was handed to him. X XX.

On May 5, 2009, at the NCMB, the mediator decided that the case be brought to the National Labor Relations Commission for arbitration. Thus, he
withdrew his complaint. On May 12, 2009[,] he was able to re-file his complaint with the Arbitration Branch of the NLRC. Efforts were exerted by
the Labor Arbiter to encourage the parties to amicably settle but without success. 7

Respondent countered that: it is a duly registered domestic corporation engaged in the business of cargo forwarding and truck-hauling; petitioner and
several other employees misinterpreted the use of its old form "For New Hires," that they were relegated to the status of new employees when in fact
they have been employed for quite some time already; after the conciliation conference before the NCMB, it relied on his promise that he would not
disturb the peace in the company premises, which proved to be wishful thinking; as to the misdelivered cargo of Globe Telecoms, initial investigation
disclosed that he was tasked to check the correct information in the package to ensure prompt delivery, hence, a Memorandum dated March 27, 2009
was issued to him to explain his side; thereafter, it was learned from his co-employees that he abandoned his work a few hours after logging in, which
was a serious disobedience to the HR Head's order for him to teach the new employees assigned to his group; also, he refused to accept a company
order with respect to his transfer of assignment to another client, Fullerlife; for the series of willful disobedience, a Memorandum dated April 3, 2009
was personally served to him by Gorospe, but he repeatedly refused to receive the memorandum and howled at her, "Seguro na abnormal ang utak
mo!"; his arrogant actuations, which were directed against a female superior who never made any provocation and in front of many employees, were
contemptuous, gravely improper, and breeds disrespect, even ignominy, against the company and its officers; on April 3, 2009, another memorandum
was issued to give him the opportunity to explain his side and to inform him of his preventive suspension for thirty (30) days pending investigation;
and the management, after evaluating the gravity of the charges and the number of infractions, decided to dismiss him from employment through a
notice of dismissal dated April 27, 2009, which was sent via registered mail.

The LA ruled for petitioner, opining that:

[Petitioner] had cause for alarm and exasperation it appearing that, after he joined a complaint in the NCMB, in a brief period from [March 27, 2009]
to [April 3, 2009], [he] was served with a memo on alleged mishandling which turned out to be baseless, he was reassigned with no clear explanation
and was being charged for disobedience of which was not eventually acted upon. There is no indication that the altercation between [him] and the HR
Manager was of such aggravated character as to constitute serious misconduct.

This Office finds, on the other hand, that the respondents appeared bent on terminating the services of complainant following his taking the
respondents to task for the new form and in the eventual dispute before the NCMB.
As to the relief, [petitioner], as an illegally dismissed employee[,] is entitled to the twin relief of reinstatement with backwages. However, considering
the attendant circumstances, it would not be to the best interest of the [petitioner] to be reinstated as he would be working under an unjustified
suspicion from his employer. Thus, this office finds the award of full backwages from the time of dismissal on [April27, 2009] up to [the] date of this
decision and separation pay of one month pay per year of service in order.

Thus, the backwages due to the [petitioner] is computed at P9,932.00 x 10 months x 1.08 or P107,265.00. His separation pay is also set at P9,932.00
x 8 years or P79,456.00. Other claims are dismissed for lack of factual and legal basis.

Individual respondents Jerome Ibanez, Lilibeth Gorospe and Amador Cabrera are held liable for being the responsible officers of the respondent
company.

WHEREFORE, in view of the foregoing, decision is hereby rendered declaring the dismissal of the [petitioner] to be illegal and ordering respondents
XIMEX DELIVERY EXPRESS, INC., JEROME IBANEZ, LILIBETH GOROSPE and AMADOR CABRERA to pay [petitioner] the amount of
P186,721.00, as computed above, as backwages and separation pay. All other claims are dismissed.

SO ORDERED.8

On appeal, the NLRC affirmed in toto the LA's decision. It added:

While We concur that each employee should deal with his co-employees with due respect, the attending circumstances[,] however[,] should be taken
into consideration why said utterance was made in order to arrive at a fair and equitable decision in this case.

In a span of one week[,] [petitioner] received three (3) [memoranda] requiring him to explain three (3) different offenses. The utterance was more of
an outburst of [his] emotion, having been subjected to three [memoranda] in successive days, the last of which placed him under suspension for 30
days. Clearly[,] said utterance [cannot] be considered grave and aggravated in character to warrant the dismissal of herein [petitioner]. x x x. 9

Respondent and its accountable officers moved for reconsideration. 10 In partially granting the motion, the NLRC ruled that while the memoranda
charging petitioner of negligence, misconduct, and disobedience were unfounded and that he could not be blamed for his emotional flare-up due to
what he considered as successive retaliatory actions, there was no malice or bad faith on the part of Ibaez, Gorospe, and Cabrera to justify their
solidary liability with respondent.11 Petitioner did not move to reconsider the modified judgment.

Still aggrieved, respondent elevated the case to the CA, which reversed and set aside the December 15, 2010 Resolution and the July 20, 2011
Decision of the NLRC. The appellate court held:

x x x [A]fter a careful scrutiny of the facts on record, we find that [petitioner's] behavior constitute serious misconduct which was of grave and
aggravated character. When he threw the Memorandum served on him by HR Supervisor Gorospe in front of her and when he later on shouted at her,
"Siguro na abnormal ang utak mo!", he was not only being disrespectful, he also manifested a willful defiance of authority and insubordination.
Much more, he did it in the presence of his co-employees which if not corrected would create a precedent to [respondent's] detriment. [Petitioner's]
actuations were willfully done as shown by the foul language he used against his superior, with apparent wrongful intent and not mere error in
judgment, making him unfit to continue working for [respondent]. [Petitioner] attempted to blame [respondent] for his behaviour allegedly because
he was provoked by the successive memoranda it issued to him in a span of two (2) days. This, however, is a lame excuse and did not in any way
justify the inflammatory language he used against Gorospe and the throwing of the Memorandum at the HR Supervisor, in the presence of his co-
employees at that. Condoning his behaviour is not what the law contemplates when it mandated a liberal treatment in favor of the working man. An
employer cannot be compelled to continue employing an employee guilty of acts inimical to the employer's interest, justifying loss of confidence in
him. A company has the right to dismiss its erring employees as a measure of self-protection against acts inimical to its interest. x x x.

xxxx

Further, in a long line of cases, it was ruled that accusatory and inflammatory language used by an employee to the employer or superior can be a
ground for dismissal or termination. Likewise, it did not escape Our attention that [petitioner] had been intentionally defying the orders of his
immediate superiors when he refused to train his replacement prior to his transfer at Fullerlife in Taguig City despite being told to do so. This
defiance was also manifested when he left his work station without his superior's permission. Undoubtedly, [petitioner's] behavior makes him unfit to
continue his employment with [respondent] who was rendered helpless by his acts of insubordination.

On the other hand, [respondent] complied with the due process requirements in effecting [petitioner's] dismissal. It furnished the latter two (2) written
notices, first, in Memorandum dated April 3, 2009 apprising him of the charge of serious misconduct for which his dismissal was sought and second,
in Notice of Dismissal dated April27, 2009 which informed him of [respondent's] decision to dismiss him. 12

The petition is meritorious.

Standard of Review

In a Rule 45 petition of the CA decision rendered under Rule 65, We are guided by the following rules:
[I]n a Rule 45 review (of the CA decision rendered under Rule 65), the question of law that confronts the Court is the legal correctness of the CA
decision - i.e., whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before it, and not on
the basis of whether the NLRC decision on the merits of the case was correct. ...

Specifically, in reviewing a CA labor ruling under Rule 45 of the Rules of Court, the Court's review is limited to:

(1) Ascertaining the correctness of the CA's decision in finding the presence or absence of a grave abuse of discretion. This is done by examining, on
the basis of the parties' presentations, whether the CA correctly determined that at the NLRC level, all the adduced pieces of evidence were
considered; no evidence which should not have been considered was considered; and the evidence presented supports the NLRC findings; and

13
(2) Deciding any other jurisdictional error that attended the CA's interpretation or application of the law.

The general rule is that certiorari does not lie to review errors of judgment of a quasi-judicial tribunal since the judicial review does not go as far as to
examine and assess the evidence of the parties and to weigh their probative value. 14 However, the CA may grant the petition when the factual findings
complained of are not supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the
findings of the NLRC contradict those of the Labor Arbiter; and when necessary to arrive at a just decision of the case. 15

As will be shown later, none of the recognized exceptions is present in this case; hence, the CA erred when it made its own factual determination of
the matters involved and, on that basis, reversed the NLRC ruling that affirmed the findings of the labor arbiter. While this Court, in a Rule 45
petition, is not a trier of facts and does not analyze and weigh again the evidence presented before the tribunals below, the conflicting findings of the
administrative bodies exercising quasi-judicial functions and the CA compels Us to make Our own independent findings of facts. 16

Termination of Employment

While an employer is given a wide latitude of discretion in managing its own affairs, in the promulgation of policies, rules and regulations on work-
related activities of its employees, and in the imposition of disciplinary measures on them, the exercise of disciplining and imposing appropriate
penalties on erring employees must be practiced in good faith and for the advancement of the employer's interest and not for the purpose of defeating
or circumventing the rights of employees under special laws or under valid agreements. 17 The reason being that-

Security of tenure of workers is not only statutorily protected, it is also a constitutionally guaranteed right. Thus, any deprivation of this right must be
attended by due process of law. This means that any disciplinary action which affects employment must pass due process scrutiny in both its
substantive and procedural aspects.

The constitutional protection for workers elevates their work to the status of a vested right. It is a vested right protected not only against state action
but against the arbitrary acts of the employers as well. This court in Philippine Movie Pictures Workers' Association v. Premier Productions, Inc.
categorically stated that "[t]he right of a person to his labor is deemed to be property within the meaning of constitutional guarantees." Moreover, it is
of that species of vested constitutional right that also affects an employee's liberty and quality of life. Work not only contributes to defining the
individual, it also assists in determining one's purpose. Work provides for the material basis of human dignity. 18

Dismissal from employment have two facets: first, the legality of the act of dismissal, which constitutes substantive due process; and, second, the
legality of the manner of dismissal, which constitutes procedural due process. 19 The burden of proof rests upon the employer to show that the
disciplinary action was made for lawful cause or that the termination of employment was valid. 20 In administrative and quasi-judicial proceedings, the
quantum of evidence required is substantial evidence or "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion."21 Thus, unsubstantiated suspicions, accusations, and conclusions of the employer do not provide legal justification for dismissing the
employee.22 When in doubt, the case should be resolved in favor of labor pursuant to the social justice policy of our labor laws and the 1987
Constitution.23

Act of Dismissal

Respondent manifestly failed to prove that petitioner's alleged act constitutes serious misconduct.

Misconduct is improper or wrong conduct; it is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error in judgment. 24 The misconduct, to be serious within the meaning of the Labor
Code, must be of such a grave and aggravated character and not merely trivial or unimportant. 25 Thus, for misconduct or improper behavior to be a
just cause for dismissal, (a) it must be serious; (b) it must relate to the performance of the employee's duties; and (c) it must show that the employee
has become unfit to continue working for the employer. 26

While this Court held in past decisions that accusatory and inflammatory language used by an employee to the employer or superior can be a ground
for dismissal or termination,27 the circumstances peculiar to this case find the previous rulings inapplicable. The admittedly insulting and unbecoming
language uttered by petitioner to the HR Manager on April 3, 2009 should be viewed with reasonable leniency in light of the fact that it was
committed under an emotionally charged state. We agree with the labor arbiter and the NLRC that the on-the-spur-of-the-moment outburst of
petitioner, he having reached his breaking point, was due to what he perceived as successive retaliatory and orchestrated actions of respondent.
Indeed, there was only lapse in judgment rather than a premeditated defiance of authority.
Further, petitioner's purported "thug-like" demeanor is not serious in nature. Despite the "grave embarassment" supposedly caused on Gorospe, she
did not even take any separate action independent of the company. Likewise, respondent did not elaborate exactly how and to what extent that its
"nature of business" and "industrial peace" were damaged by petitioner's misconduct. It was not shown in detail that he has become unfit to continue
working for the company and that the continuance of his services is patently inimical to respondent's interest.

Even if a just cause exists, the employer still has the discretion whether to dismiss the employee, impose a lighter penalty, or condone the offense
committed.28 In making such decision, the employee's past offenses may be taken into consideration. 29

x x x In Merin v. National Labor Relations Commission, this Court expounded on the principle of totality of infractions as follows:

The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to
be imposed upon an erring employee. The offenses committed by petitioner should not be taken singly and separately. Fitness for continued
employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other.
While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his employment record would
be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out
since an employee's past misconduct and present behavior must be taken together in determining the proper imposable penalty[.] Despite the
sanctions imposed upon petitioner, he continued to commit misconduct and exhibit undesirable behavior on board. Indeed, the employer cannot be
compelled to retain a misbehaving employee, or one who is guilty of acts inimical to its interests. 30

In this case, respondent contends that aside from petitioner's disrespectful remark against Gorospe, he also committed several prior intentional
misconduct, to wit: erroneous packaging of a cargo of respondent's client, abandoning work after logging in, failing to teach the rudiments of his job
to the new employees assigned to his group despite orders from his superior, and refusing to accept the management's order on the transfer of
assignment. After evaluating the gravity of the charges and the number of infractions, respondent decided to dismiss petitioner from his employment.

We do not agree. Respondent cannot invoke the principle of totality of infractions considering that petitioner's alleged previous acts of misconduct
were not established in accordance with the requirements of procedural due process. In fact, respondent conceded that he "was not even censured for
any infraction in the past." It admitted that "[the] March 25, 2009 incident that [petitioner] was referring to could not be construed as laying the
predicate for his dismissal, because [he] was not penalized for the misrouting incident when he had adequately and satisfactorily explained his side.
Neither was he penalized for the other [memoranda] previously or subsequently issued to him." 31

This Court finds the penalty of dismissal too harsh. Not every case of insubordination or willful disobedience by an employee reasonably deserves
the penalty of dismissal because the penalty to be imposed on an erring employee must be commensurate with the gravity of his or her offense. 32
Petitioner's termination from employment is also inappropriate considering that he had been with respondent company for seven (7) years and he had
no previous derogatory record. It is settled that notwithstanding the existence of a just cause, dismissal should not be imposed, as it is too severe a
penalty, if the employee had been employed for a considerable length of time in the service of his or her employer, and such employment is untainted
by any kind of dishonesty and irregularity.33

Manner of dismissal

The procedural due process requirement was not complied with. King of Kings Transport, Inc. v. Mamac,34 provided for the following rules m
terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive
that the employees are given the opportunity to submit their written explanation within a reasonable period. "Reasonable opportunity" under the
Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their
defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to
study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is
being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the
opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the
evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an
opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination
indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) rounds have been established to
justify the severance of their employment.35

Later, Perez, et al. v. Phil. Telegraph and Telephone Co. et al.,36 clarified that an actual or formal hearing is not an absolute requirement. The Court en
banc held:
Article 277(b) of the Labor Code provides that, in cases of termination for a just cause, an employee must be given "ample opportunity to be heard
and to defend himself." Thus, the opportunity to be heard afforded by law to the employee is qualified by the word "ample" which ordinarily means
"considerably more than adequate or sufficient." In this regard, the phrase "ample opportunity to be heard" can be reasonably interpreted as extensive
enough to cover actual hearing or conference. To this extent, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code is in
conformity with Article 277(b).

Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to mean that holding an actual
hearing or conference is a condition sine qua non for compliance with the due process requirement in termination of employment. The test for the fair
procedure guaranteed under Article 277(b) cannot be whether there has been a formal pretermination confrontation between the employer and the
employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. To confine the employee's right to be
heard to a solitary form narrows down that right. It deprives him of other equally effective forms of adducing evidence in his defense. Certainly, such
an exclusivist and absolutist interpretation is overly restrictive. The "very nature of due process negates any concept of inflexible procedures
universally applicable to every imaginable situation."

The standard for the hearing requirement, ample opportunity, is couched in general language revealing the legislative intent to give some degree of
flexibility or adaptability to meet the peculiarities of a given situation. To confine it to a single rigid proceeding such as a formal hearing will defeat
its spirit.

Significantly, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code itself provides that the so-called standards of due process
outlined therein shall be observed "substantially," not strictly. This is a recognition that while a formal hearing or conference is ideal, it is not an
absolute, mandatory or exclusive avenue of due process.

An employee's right to be heard in termination cases under Article 277(b) as implemented by Section 2(d), Rule I of the Implementing Rules of Book
VI of the Labor Code should be interpreted in broad strokes. It is satisfied not only by a formal face to face confrontation but by any meaningful
opportunity to controvert the charges against him and to submit evidence in support thereof.

A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken
into account in the adjudication of the controversy. "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as
effectively through written explanations, submissions or pleadings. Therefore, while the phrase "ample opportunity to be heard" may in fact include
an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal "trial-type" hearing, although preferred,
is not absolutely necessary to satisfy the employee's right to be heard.

xxxx

[T]he employer may provide an employee with ample opportunity to be heard and defend himself with the assistance of a representative or counsel in
ways other than a formal hearing. The employee can be fully afforded a chance to respond to the charges against him, adduce his evidence or rebut
the evidence against him through a wide array of methods, verbal or written.

After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation (which may be in the form
of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records (such as his 201 file and
daily time records) and the sworn statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance of a
representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also
include a request that a formal hearing or conference be held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just
as it is where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment
pretermination procedure. To this extent, we refine the decisions we have rendered so far on this point of law.

This interpretation of Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code reasonably implements the "ample opportunity to
be heard" standard under Article 277(b) of the Labor Code without unduly restricting the language of the law or excessively burdening the employer.
This not only respects the power vested in the Secretary of Labor and Employment to promulgate rules and regulations that will lay down the
guidelines for the implementation of Article 277(b). More importantly, this is faithful to the mandate of Article 4 of the Labor Code that "[a]ll doubts
in the implementation and interpretation of the provisions of [the Labor Code], including its implementing rules and regulations shall be resolved in
favor of labor."

In sum, the following are the guiding principles in connection with the hearing requirement in dismissal cases:

(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him
and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a
company rule or practice requires it, or when similar circumstances justify it.

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules
and regulations.37
In this case, the Memorandum dated April 3, 2009 provided:

Ito ay patungkol sa pangyayari kanina, mga bandang alas kuwatro ng hapon, na kung saan ang mga ipinakita at ini-asal mo sa akin bilang iyong HR
Supervisor na pagbato/paghagis na may kasamang pagdadabog ang memo na ibinigay para sa iyo na nagsasaad na ikaw ay pinag papaliwanag
lamang sa mga alegasyon laban sa iyo na dinulog sa aming tanggapan. Ikaw ay binigyan ng pagkakataon na ibigay ang iyong paliwanag ngunit ang
iyong ginawa ay, ikaw ay nagdabog at inihagis ang memo sa harapan mismo ng iyong HR Supervisor sa kadahilanang hindi mo lamang matanggap
ang mga alegasyong inirereklamo tungkol sayo. Ang paninigaw mo at pagsasabi na "Abnormal pala utak mo eh" sa HR Supervisor mo na mas
nakatataas sa iyo sa harap ng maraming empleyado ay nagpapakita lang na ikaw ay lumabag sa patakaran ng kumpanya na "Serious Misconduct
and willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work."

Dahil dito, ang pamunuan ay nagdesisyon na ikaw ay suspendihin ng tatlumpung araw (30) habang isinasagawa ang imbestigasyon at ito ay
magsisimula pagkatanggap mo ng liham na ito.

Para sa iyong kaalaman at pagsunod.38

On the other hand, the dismissal letter dated April 27, 2009, which was also signed by Gorospe, stated:

Ito ay patungkol sa pangyayari na kung saan, ipinakita mo ang hindi kagandahang asal at kagaspangan ng iyong pag-uugali at hindi pagbibigay ng
respeto sa mas nakatataas sa iyo. Na kung saan ay iyong ibinato/inihagis ang memo para sa iyo na nagsasaad na ikaw ay pinag papaliwanag at
binibigyan ng pagkakataon na marinig ang iyong panig laban sa mga alegasyon na iyong kinakaharap. Ang paninigaw mo at pagsasabi na
"Abnormal pala utak mo eh" sa akin na HR Supervisor mo na mas nakatataas sa iyo sa harap ng maraming empleyado ay nagpapakita lamang na
ikaw ay lumabag sa patakaran ng kumpanya, ang "Serious Misconduct by the employee of the lawful orders of his employer or representative in
connection with his work." Nais naming sabihin na hindi pinahihintulutan ng pamunuan ang ganitong mga pangyayari.

Dahil dito, ang pamunuan ay nagdesisyon na ikaw ay tanggalin sa kumpanyang ito na magsisimula pagkatanggap mo ng sulat [na] ito.

Paki sa ayos ang iyong mga trabahong maiiwan.39

Evidently, Memorandum dated April 3, 2009 does not contain the following: a detailed narration of facts and circumstances for petitioner to
intelligently prepare his explanation and defenses, the specific company rule violated and the corresponding penalty therefor, and a directive giving
him at least five (5) calendar days to submit a written explanation. No ample opportunity to be heard was also accorded to petitioner. Instead of
devising a just way to get the side of petitioner through testimonial and/or documentary evidence, respondent took advantage of his "refusal" to file a
written explanation. This should not be so. An employer is duty-bound to exert earnest efforts to arrive at a settlement of its differences with the
employee. While a full adversarial hearing or conference is not required, there must be a fair and reasonable opportunity for the employee to explain
the controversy at hand.40 Finally, the termination letter issued by respondent miserably failed to satisfy the requisite contents of a valid notice of
termination. Instead of discussing the facts and circumstances to support the violation of the alleged company rule that imposed a penalty of
dismissal, the letter merely repeats the self-serving accusations stated in Memorandum dated April 3, 2009.

Preventive Suspension

Similar to a case,41 no hearing or conference was called with respect to petitioner's alleged misconduct. Instead, he was immediately placed under
preventive suspension for thirty (30) days and was dismissed while he was still serving his suspension. According to respondent, it is proper to
suspend him pending investigation because his continued employment poses serious and imminent threat to the life of the company officials and also
endanger the operation of the business of respondent, which is a common carrier duty bound to observe extra ordinary diligence.42

Preventive suspension may be legally imposed against an employee whose alleged violation is the subject of an investigation. The purpose of
suspension is to prevent harm or injury to the company as well as to fellow employees. 43 The pertinent rules dealing with preventive suspension are
found in Sections 8 and 9 of Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code, which read:

SEC. 8. Preventive suspension. - The employer may place the worker concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his co-workers.

SEC. 9. Period of suspension. - No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in
his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension,
he pays the wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to dismiss the worker.

As succinctly stated above, preventive suspension is justified where the employee's continued employment poses a serious and imminent threat to the
life or property of the employer or of the employee's co-workers. Without this kind of threat, preventive suspension is not proper. 44 Here, it cannot be
said that petitioner posed a danger on the lives of the officers or employees of respondent or their properties. Being one of the Operation Staff, which
was a rank and file position, he could not and would not be able to sabotage the operations of respondent. The difficulty of finding a logical and
reasonable connection between his assigned tasks and the necessity of his preventive suspension is apparent from the fact that even respondent was
not able to present concrete evidence to support its general allegation.
WHEREFORE, premises considered, the petition is GRANTED. The November 20, 2012 Decision and June 21, 2013 Resolution of the Court of
Appeals in CA G.R. SP No. 121176, which set aside the December 15, 2010 Resolution and July 20, 2011 Decision of the National Labor Relations
Commission that affirmed the February 18, 2010 Decision of the Labor Arbiter finding the illegal dismissal of petitioner, are hereby REVERSED
AND SET ASIDE. The Labor Arbiter is DIRECTED to recompute the proper amount of backwages and separation pay due to petitioner in
accordance with this decision.

SO ORDERED.

FIRST DIVISION

[G.R. NO. 162308 : November 22, 2006]

G & M PHILIPPINES, INC., Petitioner, v. ROMIL V. CUAMBOT,* Respondent.

DECISION

CALLEJO, SR., J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1 of the Court of Appeals (CA) in CA-G.R. SP
No. 64744, as well as the Resolution2 dated February 20, 2004 denying the motion for reconsideration thereof.

The antecedent facts are as follows:

On November 7, 1994, respondent Romil V. Cuambot applied for deployment to Saudi Arabia as a car body builder with petitioner G & M
Philippines, Inc., a duly licensed placement and recruitment agency. Respondent's application was duly processed and he later signed a two-year
employment contract to work at the Al Waha Workshop in Unaizah City, Gassim, Kingdom of Saudi Arabia. He left the country on January 5, 1995.
However, respondent did not finish his contract and returned to the Philippines barely six months later, on July 24, 1995. On July 26, 1995, he filed
before the National Labor Relations Commission (NLRC) a complaint for unpaid wages, withheld salaries, refund of plane ticket and repatriation
bond, later amended to include illegal dismissal, claim for the unexpired portion of his employment contract, actual, exemplary and moral damages,
and attorney's fees. The complaint was docketed as NLRC-NCR Case No. 00-07-05252-95.

Respondent narrated that he began working for Mohd Al Motairi, 3 the President and General Manager of the Al Waha Workshop, on January 8, 1995.
Along with his Filipino co-workers, he was subjected to inhuman and unbearable working conditions, to wit:

1. [He] was required to work from 7:00 o'clock in the morning to 10:00 o'clock in the evening everyday, except Friday, or six (6) hours overtime
work daily from the usual eight (8) working hours per day.

2. [He] was never paid x x x his monthly basic salary of 1,200 [Riyals] including his overtime pay for the six (6) hours overtime work he rendered
every working day during his work in Saudi Arabia except for the amount of 100 [Riyals] given every month for his meal allowance;

3. [He] was subjected to serious insult by respondent Muthiri everytime he asked or demanded for his salary; and,

4. [S]ome of complainant's letters that were sent by his family were not given by respondent Muthiri and/or his staff x x x. 4

When respondent asked Motairi for his salary, he was told that since a huge sum had been paid to the agency for his recruitment and deployment, he
would only be paid after the said amount had already been recovered. He was also told that his salary was only 800 Saudi Riyals (SAR) per month, in
contrast to the SAR1200 that was promised him under the contract. Motairi warned that he would be sent home the next time he demanded for his
salary. Due to his family's incessant letters asking for financial support, however, respondent mustered the courage to again demand for his salaries
during the second week of July 1996. True to his word, Motairi ordered him to pack up and leave. He was able to purchase his plane ticket only
through the contributions of his fellow Filipinos. Motairi even accompanied him to the airport when he bought his plane ticket. In the meantime, his
wife had been making inquiries about him.

To corroborate his claims, respondent submitted the following documents: an undated letter 5 he had written addressed to the Philippine Labor Attach
in Riyadh, with Arabic translation;6 his wife's letter7 dated June 28, 1995 addressed to the "Gulangco Monteverde Agency, Manila Head Office,"
asking for a "favor to help [her] husband to come home as early as possible;" a fax message 8 dated July 17, 1995 from a representative of the Land
Bank of the Philippines (LBP) to a counterpart in Riyadh, asking for assistance to locate respondent; 9 and the reply10 from the Riyadh LBP
representative requesting for contact numbers to facilitate communication with respondent.rbl rl l lbrr

Respondent further claimed that his employer's actuations violated Articles 83 and 103 of the Labor Code. While he was entitled to terminate his
employment in accordance with Article 285 (b) due to the treatment he received, he did not exercise this right. He was nevertheless illegally
dismissed by his employer when he tried to collect the salaries due him. Respondent further claimed that the reduction of his monthly salary from
SAR1,200 to SAR800 and petitioner's failure to furnish him a copy of the employment contract before his departure amounted to prohibited practices
under Article 34 (i) and (k) of the Labor Code.

Respondent prayed for the following relief:

WHEREFORE, premises considered, complainant most respectfully prays unto this Honorable Office that the instant complaint be given due course
and that a decision be rendered in his favor and against respondents G & M (Phils.), Inc., Alwaha (sic) Workshop and/or Muhamd (sic) Muthiri, as
follows:

(1) Ordering the respondents to pay, jointly and severally, complainant the unpaid salaries and overtime pay in the amounts of P61,560.00 and
P66,484.80, respectively, including interests, until the same will be fully paid;

(2) Ordering the respondents to pay, jointly and severally, complainant['s] salary for the unexpired portion of the contract in the amount of
P184,680.00, including interests, until the same will be fully paid;

(3) Ordering the respondents to pay, jointly and severally, complainant['s] actual expenses which he incurred in applying for the job, including
expenses in leaving for the job, including expenses in leaving for Saudi Arabia and plane ticket, as well as repatriation bond and incidental expenses
in going home to the Philippines in the amounts of P49,000.00 and P20,000.00, respectively, including interests, until the same will be fully paid;

(4) Ordering the respondents to pay, jointly and severally, complainant moral damages in the amount of P150,000.00 and exemplary damages in the
amount of P150,000.00, including interests, until the same will be fully paid;

(5) Ordering the respondents to pay, jointly and severally, complainant for and as attorney's fees in the amount of P68,172.48 or the amount
equivalent to 10% of the total amount of the foregoing claims and damages that may be awarded by the Honorable Office to the complainant. 11

In its position paper, petitioner alleged that respondent was deployed "for overseas work as car body builder for its Principal Golden Wings Est. for
General Services and Recruitment in Saudi Arabia for an employment period of 24 months, with a monthly salary of US$400.00." 12 It insisted that
respondent was religiously paid his salaries as they fell due. After working for a little over seven months, respondent pleaded with his employer to be
allowed to return home since there were family problems he had to settle personally. Respondent even submitted a resignation letter 13 dated July 23,
1995.

To support its claim that respondent had been paid his salaries as they fell due, petitioner submitted in evidence copies of seven payslip 14
authenticated by the Philippine Labor Attach in Riyadh, Saudi Arabia. Petitioner asserted that since respondent only worked for a little over seven
months and did not finish his contract, he should pay the cost of the plane ticket. It pointed out that according to the standard employment contract,
the employer would provide the employee with a free plane ticket for the flight home only if the worker finishes his contract.

Respondent countered that his signatures in the purported payslips were forged. He denied having received his salaries for the said period, except
only for the SAR100 as monthly allowance. He pointed out that the authentication of the alleged pay slips and resignation letter before the labor
attach in Riyadh is immaterial, since the documents themselves were falsified.

Respondent further claimed that petitioner required him to pay a P10,000.00 placement fee and that he had to borrow P2,000.00 from a relative. He
was then told that the amount would be considered as an advance payment and that the balance would be deducted from his salary. He was not,
however, given any receipt. He insisted that the employment contract which he signed indicated that he was supposed to receive a monthly salary of
SAR1,200 for working eight hours a day, excluding overtime pay. He was repeatedly promised to be furnished a copy of the contract and was later
told that it would be given to his wife, Minda. However, she was also given the run-around and was told that the contract had already been given to
her husband.

To counter the allegation of forgery, petitioner claimed that there was a great possibility that respondent had changed his signature while abroad so
that he could file a complaint for illegal dismissal upon his return. The argument that the stroke and handwriting on the payslip was written by one
and the same person is mere conjecture, as respondent could have requested someone, i.e., the cashier, to prepare the resignation letter for him. While
it is the employer who fills up the pay slip, respondent could have asked another employee to prepare the resignation letter, particularly if he
(respondent) did not know how to phrase it himself. Moreover, it could not be presumed that the payslip and resignation letter were prepared by one
and the same person, as respondent is not a handwriting expert. Petitioner further pointed out that respondent has different signatures, not only in the
pleadings submitted before the Labor Arbiter, but also in respondents' personal documents.

On January 30, 1997, Labor Arbiter Jose De Vera ruled in favor of respondent on the following ratiocination:

What convinced this Arbitration Branch about the unreliability of the complainant's signature in the payslip is the close semblance of the
handwritings in the payslips and the handwritings in the purported handwritten resignation of the complainant. It unmistakably appears to this
Arbitration Branch that the payslips as well as the handwritten letter-resignation were prepared by one and the same person. If it were true that the
handwritten letter-resignation was prepared by the complainant, it follows that he also prepared the payslips because the handwritings in both
documents are exactly the same and identical. But [this] is quite unbelievable that complainant himself as the payee prepared the payslips with the
corresponding entries therein in his own handwriting. Under the circumstances, the only logical conclusion is that both the payslips and the
handwritten letter-resignation were prepared and signed by one and the same person definitely not the complainant.

With the foregoing findings and conclusions, this Arbitration Branch is of the well-considered view that complainant was not paid his salaries from
January 5, 1995 up to July 23, 1995 and that he was unjustifiably dismissed from his employment when he repeatedly demanded for his unpaid
salaries. Respondents are, therefore, liable to pay the complainant his salaries from January 5, 1995 up to July 23, 1995 which amount to
US$2,640.00 (US$400 x 6.6 mos). Further, respondents are also liable to the complainant for the latter's salaries for the unexpired portion of his
contract up to the maximum of three (3) months pursuant to Section 10 of RA 8042, which amount to US$1,200.00. Respondents must also refund
complainant's plane fare for his return flight. And finally, being compelled to litigate his claims, it is but just and x x x that complainant must be
awarded attorney's fees at the rate of ten percent (10%) of the judgment award.

WHEREFORE, all the foregoing premises considered, judgment is hereby rendered ordering the respondents to pay complainant the aggregate sum
of US$3,840.00 or its equivalent in Philippine Currency at the exchange rate prevailing at the time of payment, and to refund complainant's plane fare
for his return flight. Further, respondents are ordered to pay complainant attorney's fees at the rate of Ten percent (10%) of the foregoing judgment
award.15

Petitioner appealed the Decision of the Labor Arbiter to the NLRC, alleging that the Labor Arbiter, not being a handwriting expert, committed grave
abuse of discretion amounting to lack of jurisdiction in finding for respondent. In its Decision 16 dated December 9, 1997, the NLRC upheld this
contention and remanded the case "to the Arbitration Branch of origin for referral to the government agency concerned for calligraphy examination of
the questioned documents."17

The case was then re-raffled to Labor Arbiter Enrico Angelo Portillo. On September 11, 1998, the parties agreed to a resetting to enable petitioner to
secure the original copies of documents from its foreign principal. However, on December 9, 1998, the parties agreed to submit the case for
resolution based on the pleadings and on the evidence on record.

This time, the complaint was dismissed for lack of merit. According to Labor Arbiter Portillo, aside from respondent's bare allegations, he failed to
substantiate his claim of poor working conditions and long hours of employment. The fact that he executed a handwritten resignation letter is enough
evidence of the fact that he voluntarily resigned from work. Moreover, respondent failed to submit any evidence to refute the pay slips duly signed
and authenticated by the labor attach in Saudi Arabia, inasmuch as their probative value cannot be impugned by mere self-serving allegations. The
Labor Arbiter concluded that as between the oral allegations of workers that they were not paid monetary benefits and the documentary evidence
presented by employer, the latter should prevail. 18

Respondent appealed the decision before the NLRC, alleging that the Labor Arbiter failed to consider the genuineness of the signature which appears
in the purported resignation letter dated July 23, 1995, as well as those that appear in the seven pay slips. He insisted that these documents should
have been endorsed to the National Bureau of Investigation Questioned Documents Division or the Philippine National Police Crime Laboratory for
calligraphy examination.

The NLRC dismissed the appeal for lack of merit in a Resolution 19 dated December 27, 2000. It held that the questioned documents could not be
endorsed to the agency concerned since mere photocopies had been submitted in evidence. The records also revealed that petitioner had
communicated to the foreign employer abroad, who sent the original copies, but there was no response from respondent. It also stressed that during
the December 9, 1998 hearing, the parties agreed to submit the case for resolution on the basis of the pleadings and the evidence on record; if
respondent had wanted to have the documents endorsed to the NBI or the PNP, he should have insisted that the documents be examined by a
handwriting expert of the government. Thus, respondent was estopped from assailing the Labor Arbiter's ruling.

Unsatisfied, respondent elevated the matter to the CA via petition for certiorari . He pointed out that he merely acceded to the submission of the case
for resolution due to the inordinate delays in the case. Moreover, the questioned documents were within petitioner's control, and it was petitioner that
repeatedly failed to produce the original copies.

The CA reversed the ruling of the NLRC. According to the appellate court, a visual examination of the questioned signatures would instantly reveal
significant differences in the handwriting movement, stroke, and structure, as well as the quality of lines of the signatures; Labor Arbiter Portillo
committed patent error in examining the signatures, and it is the decision of Labor Arbiter De Vera which must be upheld. The CA also pointed out
the initial ruling of the NLRC (Second Division) dated December 9, 1997 which set aside the earlier decision of Labor Arbiter De Vera included a
special directive to the Arbitration Branch of origin to endorse the questioned documents for calligraphy examination. However, respondent Cuambot
failed to produce original copies of the documents; hence, Labor Arbiter Portillo proceeded with the case and ruled in favor of petitioner G.M.Phils.
The dispositive portion of the CA ruling reads:

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby GRANTED. Accordingly, the assailed Resolutions dated 27 December 2000
and 12 February 2001, respectively, of the NLRC Second Division are hereby SET ASIDE and the Decision dated 20 February 1997 rendered by
Labor Arbiter Jose De Vera is hereby REINSTATED. 20

Petitioner filed a motion for reconsideration, which the CA denied for lack of merit in its Resolution 21 dated February 20, 2004.

Hence, the present petition, where petitioner claims that '


THE COURT OF APPEALS GRAVELY ERRED ON A MATTER OF LAW IN HOLDING THAT LABOR ARBITER ENRICO PORTILLO
GRAVELY ABUSED HIS DISCRETION WHEN HE HELD THAT THE SIGNATURES APPEARING ON THE QUESTIONED DOCUMENTS
ARE THOSE OF THE PETITIONER.22

Petitioner points out that most of the signatures which Labor Arbiter De Vera used as standards for comparison with the signatures appearing on the
questioned documents were those in the pleadings filed by the respondent long after the questioned documents had been supposedly signed by him. It
claims that respondent affixed his signatures on the pleadings in question and intentionally made them different from his true signature so that he
could later on conveniently impugn their authenticity. Petitioner claims that "had Labor Arbiter De Vera taken pains in considering these
circumstances, he could have determined that respondent may have actually intentionally given a different name and slightly changed his signature in
his application, which name and signature he used when he signed the questioned letter of resignation and payslips, only to conveniently disown the
same when he came back to the country to file the present case." 23 Thus, according to petitioner, the CA clearly committed a palpable error of law
when it reversed the ruling of the NLRC, which in turn affirmed Labor Arbiter Portillo's decision.

For his part, respondent contends that petitioner's arguments were already raised in the pleadings filed before Labor Arbiter De Vera which had
already been passed upon squarely in the Labor Arbiter's Decision of January 30, 1997.

The determinative issues in this case are essentially factual in nature - (a) whether the signatures of respondent in the payslips are mere forgeries, and
(b) whether respondent executed the resignation letter. Generally, it is not our function to review findings of fact. However, in case of a divergence in
the findings and conclusions of the NLRC on the one hand, and those of the Labor Arbiter and the CA on the other, the Court may examine the
evidence presented by the parties to determine whether or not the employee was illegally dismissed or voluntarily resigned from employment. 24 The
instant case thus falls within the exception.

We have carefully examined the evidence on record and find that the petition must fail.

In its Decision25 dated December 9, 1997, the NLRC had ordered the case remanded to the Labor Arbiter precisely so that the questioned documents
purportedly signed/executed by respondent could be subjected to calligraphy examination by experts. It is precisely where a judgment or ruling fails
to make findings of fact that the case may be remanded to the lower tribunal to enable it to determine them. 26 However, instead of referring the
questioned documents to the NBI or the PNP as mandated by the Commission's ruling, Labor Arbiter Portillo proceeded to rule in favor of petitioner,
concluding that respondent's signatures were not forged, and as such, respondent's separation from employment was purely voluntary. In fine, then,
the Labor Arbiter gravely abused his discretion when he ruled in favor of petitioner without abiding by the Commission's directive.

We note, however, that a remand of the case at this juncture would only result in unnecessary delay, especially considering that this case has been
pending since 1995. Indeed, it is this Court's duty to settle, whenever possible, the entire controversy in a single proceeding, "leaving no root or
branch to bear the seeds of future litigation."27 Hence, the case shall be fully resolved on its merits.

We find that petitioner's failure to submit the original copies of the pay slips and the resignation letter raises doubts as to the veracity of its claim that
they were actually signed/penned by respondent. The failure of a party to produce the original copy of the document which is in issue has been taken
against such party, and has even been considered as a mere "bargaining chip," a dilatory tactic so that such party would be granted the opportunity to
adduce controverting evidence.28 In fact, petitioner did not even present in evidence the original copy of the employment contract, much less a
machine copy, giving credence to respondent's claim that he was not at all given a copy of the employment contract after he signed it. What petitioner
presented was a mere photocopy of the OCW Info Sheet29 issued by the Philippine Overseas Employment Administration as well as the Personal Data
Sheet30 which respondent filled up. It bears stressing that the original copies of all these documents, including the employment contract, were in the
possession of petitioner, or, at the very least, petitioner's principal.

Moreover, as correctly noted by the CA, the opinions of handwriting experts, although helpful in the examination of forged documents because of the
technical procedure involved in the analysis, are not binding upon the courts. 31 As such, resort to these experts is not mandatory or indispensable to
the examination or the comparison of handwriting. A finding of forgery does not depend entirely on the testimonies of handwriting experts, because
the judge must conduct an independent examination of the questioned signature in order to arrive at a reasonable conclusion as to its authenticity. 32
No less than Section 22, Rule 132 of the Rules of Court explicitly authorizes the court, by itself, to make a comparison of the disputed handwriting
"with writings admitted or treated as genuine by the party against whom the evidence is offered or proved to be genuine to the satisfaction of the
judge." Indeed, the authenticity of signatures is not a highly technical issue in the same sense that questions concerning, e.g., quantum physics or
topology, or molecular biology, would constitute matters of a highly technical nature. The opinion of a handwriting expert on the genuineness of a
questioned signature is certainly much less compelling upon a judge than an opinion rendered by a specialist on a highly technical issue. 33

Even a cursory perusal of the resignation letter34 and the handwritten pay slips will readily show that they were written by only one person. A mere
layman will immediately notice that the strokes and letters in the documents are very similar, if not identical, to one another. It is also quite apparent
from a comparison of the signatures in the pay slips that they are inconsistent, irregular, with uneven and faltering strokes.

We also find it unbelievable that after having waited for so long to be deployed to Saudi Arabia and with the hopes of opportunity to earn a better
living within his reach, respondent would just suddenly decide to abandon his work and go home due to "family problems." At the very least,
respondent could have at least specified the reason or elaborated on the details of such an urgent matter so as not to jeopardize future employment
opportunities.

That respondent also filed the complaint immediately gives more credence to his claim that he was illegally dismissed.rbl rl l lbrr
He arrived in the Philippines on July 24, 1995, and immediately filed his complaint for illegal dismissal two days later, on July 26, 1995.

We are not impervious of petitioner's claim that respondent could have asked another person to execute the resignation letter for him. However,
petitioner failed to present even an affidavit from a representative of its foreign principal in order to support this allegation.

Indeed, the rule is that all doubts in the implementation and the interpretation of the Labor Code shall be resolved in favor of labor, 35 in order to give
effect to the policy of the State to "afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers," and to "assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work."36 We reiterate the following pronouncement in Nicario v. National Labor Relations
Commission:37

It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted
in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or
in the interpretation of agreements and writing should be resolved in the former's favor. The policy is to extend the doctrine to a greater number of
employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and
protection of labor.

Moreover, one who pleads payment has the burden of proving it. The reason for the rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents - which will show that overtime, differentials, service incentive leave, and other claims of workers have
been paid - are not in the possession of the worker but in the custody and absolute control of the employer. Thus, the burden of showing with legal
certainty that the obligation has been discharged with payment falls on the debtor, in accordance with the rule that one who pleads payment has the
burden of proving it.38 Only when the debtor introduces evidence that the obligation has been extinguished does the burden shift to the creditor, who
is then under a duty of producing evidence to show why payment does not extinguish the obligation. 39 In this case, petitioner was unable to present
ample evidence to prove its claim that respondent had received all his salaries and benefits in full.rbl rl l lbrr

IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED for lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No. 64744 is
AFFIRMED. Costs against the petitioners.

SO ORDERED.

SECOND DIVISION

[G.R. No. 170351, March 30 : 2011]

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION - ALU - TUCP, PETITIONER, VS. PHILIPPINE NATIONAL
OIL COMPANY - ENERGY DEVELOPMENT CORPORATION, RESPONDENT.

DECISION

NACHURA, J.:

Under review is the Decision[1] dated June 30, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 65760, which dismissed the petition for
certiorari filed by petitioner Leyte Geothermal Power Progressive Employees Union - ALU?TUCP (petitioner Union) to annul and set aside the
decision[2] dated December 10, 1999 of the National Labor Relations Commission (NLRC) in NLRC Certified Case No. V-02-99.

The facts, fairly summarized by the CA, follow.

blockquote>[Respondent Philippine National Oil Corporation]-Energy Development Corporation [PNOC-EDC] is a government-owned and
controlled corporation engaged in exploration, development, utilization, generation and distribution of energy resources like geothermal energy.

Petitioner is a legitimate labor organization, duly registered with the Department of Labor and Employment (DOLE) Regional Office No. VIII,
Tacloban City.

Among [respondent's] geothermal projects is the Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte.
The said Project is composed of the Tongonan 1 Geothermal Project (T1GP) and the Leyte Geothermal Production Field Project (LGPF) which
provide the power and electricity needed not only in the provinces and cities of Central and Eastern Visayas (Region VII and VIII), but also in the
island of Luzon as well. Thus, the [respondent] hired and employed hundreds of employees on a contractual basis, whereby, their employment was
only good up to the completion or termination of the project and would automatically expire upon the completion of such project.

Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that
circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA
negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to be
completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner.
On December 28, 1998, the petitioner filed a Notice of Strike with DOLE against the [respondent] on the ground of purported commission by the
latter of unfair labor practice for "refusal to bargain collectively, union busting and mass termination." On the same day, the petitioner declared a
strike and staged such strike.

To avert any work stoppage, then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order, dated January 4, 1999, certifying the
labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking workers were directed to return to work within twelve (12) hours
from receipt of the Order and for the [respondent] to accept them back under the same terms and conditions of employment prior to the strike.
Further, the parties were directed to cease and desist from committing any act that would exacerbate the situation.

However, despite earnest efforts on the part of the Secretary of Labor and Employment to settle the dispute amicably, the petitioner remained
adamant and unreasonable in its position, causing the failure of the negotiation towards a peaceful compromise. In effect, the petitioner did not abide
by [the] assumption order issued by the Secretary of Labor.

Consequently, on January 15, 1999, the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the
NLRC-RAB VIII in Tacloban City and at the same time, filed a Petition for Cancellation of Petitioner's Certificate of Registration with DOLE,
Regional Office No. VIII. The two cases were later on consolidated pursuant to the New NLRC Rules of Procedure. The consolidated case was
docketed as NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-99). The said certified case was
indorsed to the NLRC 4th Division in Cebu City on June 21, 1999 for the proper disposition thereof. [3]

In due course, the NLRC 4th Division rendered a decision in favor of respondent, to wit:

WHEREFORE, based on the foregoing premises, judgment is hereby rendered as follows:

1. Declaring the officers and members of [petitioner] Union as project employees;

2. Declaring the termination of their employment by reason of the completion of the project, or a phase or portion thereof, to which they were
assigned, as valid and legal;

3. Declaring the strike staged and conducted by [petitioner] Union through its officers and members on December 28, 1998 to January 6, 1999
as illegal for failure to comply with the mandatory requirements of the law on strike[;]

4. Declaring all the officers and members of the board of [petitioner] Union who instigated and spearheaded the illegal strike to have lost their
employment[;]

5. Dismissing the claim of [petitioner] Union against PNOC-EDC for unfair labor practice for lack of merit[;]

6. Dismissing both parties' claims against each other for violation of the Assumption Order dated January 4, 1999 for lack of factual basis[;]

7. Dismissing all other claims for lack of merit. [4]

Petitioner Union filed a motion for reconsideration of the NLRC decision, which was subsequently denied. Posthaste, petitioner Union filed a petition
for certiorari before the CA, alleging grave abuse of discretion in the decision of the NLRC. As previously adverted to, the CA dismissed the petition
for certiorari, thus:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the Petition. The assailed Decision dated
December 10, 1999 of the NLRC 4th Division in NLRC Certified Case No. V-02-99 (NCMB-RAB VIII-NS-12-0190-98; RAB Case No. VIII-1-0019-
99) and its Order dated March 30, 2001 are hereby AFFIRMED.

Costs against the Petitioner.[5]

Hence, this appeal by certiorari filed by petitioner Union, positing the following questions of law:

1. MAY THE HONORABLE COURT OF APPEALS SUSTAIN THE "PROJECT CONTRACTS" THAT ARE DESIGNED TO DENY AND
DEPRIVE THE EMPLOYEES' THEIR RIGHT TO SECURITY OF TENURE BY MAKING IT APPEAR THAT THEY ARE MERE PROJECT
EMPLOYEES?

2. WHEN THERE ARE NO INTERVALS IN THE EMPLOYEES' CONTRACT, SUCH THAT THE SO-CALLED UNDERTAKING WAS
CONTINUOUS, ARE THE EMPLOYEES PROPERLY TREATED AS PROJECT EMPLOYEES?

3. MAY THE HONORABLE COURT OF APPEALS IGNORE THE FIRM'S OWN ESTIMATE OF JOB COMPLETION, PROVING THAT
THERE IS STILL 56.25% CIVIL/STRUCTURAL WORK TO BE ACCOMPLISHED, AND RULE THAT THE EMPLOYEES WERE DISMISSED
FOR COMPLETION [OF] THE "PROJECT?"

4. MAY A FIRM HIDE UNDER THE SPURIOUS CLOAK OF "PROJECT COMPLETION" TO DISMISS EN MASSE THE EMPLOYEES WHO
HAVE ORGANIZED AMONG THEMSELVES A LEGITIMATE LABOR ORGANIZATION TO PROTECT THEIR RIGHTS?
5. WHEN THERE IS NO STOPPAGE OF WORK, MAY A PROTEST ACTIVITY BE CONSIDERED AS A STRIKE CONTRARY TO ITS
CONCEPTUAL DEFINITION UNDER ARTICLE 212 (O) OF THE LABOR CODE OF THE PHILIPPINES?

6. WHEN THE DISMISSAL IS AIMED AT RIDDING THE COMPANY OF MEMBERS OF THE UNION, IS THIS UNION BUSTING? [6]

Stripped of rhetoric, the issues for our resolution are:

1. Whether the officers and members of petitioner Union are project employees of respondent; and

2. Whether the officers and members of petitioner Union engaged in an illegal strike.

On the first issue, petitioner Union contends that its officers and members performed activities that were usually necessary and desirable to
respondent's usual business. In fact, petitioner Union reiterates that its officers and members were assigned to the Construction Department of
respondent as carpenters and masons, and to other jobs pursuant to civil works, which are usually necessary and desirable to the department.
Petitioner Union likewise points out that there was no interval in the employment contract of its officers and members, who were all employees of
respondent, which lack of interval, for petitioner Union, "manifests that the `undertaking' is usually necessary and desirable to the usual trade or
business of the employer."

We cannot subscribe to the view taken by petitioner Union.

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, 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
service 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 actually exists. [7]

The foregoing contemplates four (4) kinds of employees: (a) regular employees or those who have been "engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer"; (b) project employees or those "whose 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"; (c)
seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season; [8] and
(d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind-- a fixed-term employee. [9]

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law, regardless of any contract expressing
otherwise. The supremacy of the law over the nomenclature of the contract and the stipulations contained therein is to bring to life the policy
enshrined in the Constitution to "afford full protection to labor." [10] Thus, labor contracts are placed on a higher plane than ordinary contracts; these
are imbued with public interest and therefore subject to the police power of the State. [11]

However, notwithstanding the foregoing iterations, project employment contracts which fix the employment for a specific project or undertaking
remain valid under the law:

x x x By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect
to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or
those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing
special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only
one party thereto. The employer's interest is equally important as that of the employee[s'] for theirs is the interest that propels economic activity.
While it may be true that it is the employer who drafts project employment contracts with its business interest as overriding consideration, such
contracts do not, of necessity, prejudice the employee. Neither is the employee left helpless by a prejudicial employment contract. After all, under the
law, the interest of the worker is paramount.[12]

In the case at bar, the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the specific project
or phase of work for which they were hired, with a fixed period of employment. The NLRC correctly disposed of this issue:

A deeper examination also shows that [the individual members of petitioner Union] indeed signed and accepted the [employment contracts] freely
and voluntarily. No evidence was presented by [petitioner] Union to prove improper pressure or undue influence when they entered, perfected and
consummated [the employment] contracts. In fact, it was clearly established in the course of the trial of this case, as explained by no less than the
President of [petitioner] Union, that the contracts of employment were read, comprehended, and voluntarily accepted by them. x x x.

xxxx
As clearly shown by [petitioner] Union's own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts
tending to vitiate the worker[s'] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. x x x. [13]

Thus, we are hard pressed to find cause to disturb the findings of the NLRC which are supported by substantial evidence.

It is well-settled in jurisprudence that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in
matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by
substantial evidence.[14] Rule 133, Section 5 defines substantial evidence as "that amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion."

Consistent therewith is the doctrine that this Court is not a trier of facts, and this is strictly adhered to in labor cases. [15] We may take cognizance of
and resolve factual issues, only when the findings of fact and conclusions of law of the Labor Arbiter or the NLRC are inconsistent with those of the
CA.[16]

In the case at bar, both the NLRC and the CA were one in the conclusion that the officers and the members of petitioner Union were project
employees. Nonetheless, petitioner Union insists that they were regular employees since they performed work which was usually necessary or
desirable to the usual business or trade of the Construction Department of respondent.

The landmark case of ALU-TUCP v. NLRC[17] instructs on the two (2) categories of project employees:

It is evidently important to become clear about the meaning and scope of the term "project" in the present context. The "project" for the carrying out
of which "project employees" are hired would ordinarily have some relationship to the usual business of the employer. Exceptionally, the "project"
undertaking might not have an ordinary or normal relationship to the usual business of the employer. In this latter case, the determination of the scope
and parameters of the "project" becomes fairly easy. x x x. From the viewpoint, however, of the legal characterization problem here presented to the
Court, there should be no difficulty in designating the employees who are retained or hired for the purpose of undertaking fish culture or the
production of vegetables as "project employees," as distinguished from ordinary or "regular employees," so long as the duration and scope of the
project were determined or specified at the time of engagement of the "project employees." For, as is evident from the provisions of Article 280 of
the Labor Code, quoted earlier, the principal test for determining whether particular employees are properly characterized as "project
employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific
project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2) distinguishable types of activities.
Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is a particular construction job or project of a construction company. A
construction company ordinarily carries out two or more [distinct] identifiable construction projects: e.g., a twenty-five-storey hotel in Makati; a
residential condominium building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of
these separate projects, the scope and duration of which has been determined and made known to the employees at the time of employment, are
properly treated as "project employees," and their services may be lawfully terminated at completion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within the regular business of the corporation. Such a job
or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or
undertaking also begins and ends at determined or determinable times. [18]

Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific
undertaking which completion or termination has been determined at the time of the particular employee's engagement.

In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as project employees for respondent's
Leyte Geothermal Power Project located at the Greater Tongonan Geothermal Reservation in Leyte. Consequently, upon the completion of the project
or substantial phase thereof, the officers and the members of petitioner Union could be validly terminated.

Petitioner Union is adamant, however, that the lack of interval in the employment contracts of its officer and members negates the latter's status

as mere project employees. For petitioner Union, the lack of interval further drives home its point that its officers and members are regular employees
who performed work which was usually necessary or desirable to the usual business or trade of respondent.

We are not persuaded.

Petitioner Union's members' employment for more than a year does equate to their regular employment with respondent. In this regard, Mercado, Sr.
v. NLRC[19] illuminates:

The first paragraph [of Article 280 of the Labor Code] answers the question of who are regular employees. It states that, regardless of any written or
oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or trade
of the employer, except for project employees.

A project employee has been defined to be one whose 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 service to be performed is seasonal in nature and
the employment is for the duration of the season, as in the present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under the definition of the preceding
paragraph. The proviso, in said second paragraph, deems as regular employees those "casual" employees who have rendered at least one year of
service regardless of the fact that such service may be continuous or broken.

Petitioners, in effect, contend that the proviso in the second paragraph of Art. 280 is applicable to their case and that the Labor Arbiter should have
considered them regular by virtue of said proviso. The contention is without merit.

The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the
clause that it immediately follows. Thus, it has been held that a proviso is to be construed with reference to the immediately preceding part of the
provision to which it is attached, and not to the statute itself or to other sections thereof. The only exception to this rule is where the clear legislative
intent is to restrain or qualify not only the phrase immediately preceding it (the proviso) but also earlier provisions of the statute or even the statute
itself as a whole.

Policy Instruction No. 12 of the Department of Labor and Employment discloses that the concept of regular and casual employees was designed to
put an end to casual employment in regular jobs, which has been abused by many employers to prevent so - called casuals from enjoying the benefits
of regular employees or to prevent casuals from joining unions. The same instructions show that the proviso in the second paragraph of Art. 280 was
not designed to stifle small-scale businesses nor to oppress agricultural land owners to further the interests of laborers, whether agricultural or
industrial. What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us believe, to prevent small-
scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is applicable only to the employees who are deemed
"casuals" but not to the "project" employees nor the regular employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their employment legally ends upon
completion of the project or the [end of the] season. The termination of their employment cannot and should not constitute an illegal dismissal.

Considering our holding that the officers and the members of petitioner Union were project employees, its claim of union busting is likewise
dismissed.

On the second issue, petitioner Union contends that there was no stoppage of work; hence, they did not strike. Euphemistically, petitioner Union
avers that it "only engaged in picketing,"[20] and maintains that "without any work stoppage, [its officers and members] only engaged in xxx protest
activity."

We are not convinced. Petitioner Union splits hairs.

To begin with, quite evident from the records is the undisputed fact that petitioner Union filed a Notice of Strike on December 28, 1998 with the
Department of Labor and Employment, grounded on respondent's purported unfair labor practices, i.e., "refusal to bargain collectively, union busting
and mass termination." On even date, petitioner Union declared and staged a strike.

Second, then Secretary of Labor, Bienvenido E. Laguesma, intervened and issued a Return-to-Work Order [21] dated January 4, 1999, certifying the
labor dispute to the NLRC for compulsory arbitration. The Order narrates the facts leading to the labor dispute, to wit:

On 28 December 1998, [petitioner Union] filed a Notice of Strike against [respondent] citing unfair labor practices, specifically: refusal to bargain
collectively, union busting and mass termination as the grounds [therefor]. On the same day, [petitioner] Union went on strike and took control over
[respondent's] facilities of its Leyte Geothermal Project.

Attempts by the National Conciliation and Mediation Board -RBVIII to forge a mutually acceptable solution proved futile.

In the meantime, the strike continues with no settlement in sight placing in jeopardy the supply of much needed power supply in the Luzon and
Visayas grids.

xxxx

The on-going strike threatens the availability of continuous electricity to these areas which is critical to day-to-day life, industry, commerce and trade.
Without doubt, [respondent's] operations [are] indispensable to the national interest and falls (sic) within the purview of Article 263 (g) of the Labor
Code, as amended, which warrants (sic) the intervention of this Office.

Third, petitioner Union itself, in its pleadings, used the word "strike."

Ultimately, petitioner Union's asseverations are belied by the factual findings of the NLRC, as affirmed by the CA:

The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is undisputed
that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban after the submission of the strike
vote was not complied with since there was no strike vote taken.

xxxx

The factual issue of whether a notice of strike was timely filed by [petitioner] Union was resolved by the evidence on record. The evidence revealed
that [petitioner] Union struck even before it could file the required notice of strike. Once again, this relied on [petitioner] Union's proof. [Petitioner]
Union['s] witness said:
Atty. Sinsuat: You stated that you struck on 28 December 1998 is that correct?

Witness : Early in the morning of December 1998.

xxxx

Atty. Sinsuat: And you went there to conduct the strike did you not?

Witness : Our plan then was to strike at noon of December 28 and the strikers will be positioned at their respective areas. [22]

Article 263 of the Labor Code enumerates the requisites for holding a strike:

Art. 263. Strikes, picketing, and lockouts. - (a) x x x.

x x x x.

(c) In cases of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Department at least 30 days before the intended date thereof. In cases of unfair labor practice, the period of notice shall be 15 days
and in the absence of a duly certified bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members.
However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may
constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action
immediately.

(d) The notice must be in accordance with such implementing rules and regulations as the Department of Labor and Employment may promulgate.

(e)During the cooling-off period, it shall be the duty of the Department to exert all efforts at mediation and conciliation to effect a voluntary
settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union
may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret
ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the
corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid
for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The Department may, at
its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall
furnish the Department the results of the voting at least seven days before the intended strike or lockout, subject to the cooling-off period herein
provided.

In fine, petitioner Union's bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that petitioner Union indeed
struck against respondent. In fact, and more importantly, petitioner Union failed to comply with the requirements set by law prior to holding a strike.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 65760 is AFFIRMED. Costs against petitioner
Union.

SO ORDERED.

EMELITA NICARIO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MANCAO SUPERMARKET INC., AND/OR
MANAGER, ANTONIO MANCAO, respondents.

DECISION

ROMERO, J.:

For resolution before this Court is a special civil action for certiorari under Ruled 65 of the Rules of Court which seeks to set aside the resolution of
the National Labor Relations Commission (Fifth Division, Cagayan de Oro City) dated December 21, 1995 in NLRC CA No. M-002047-94 entitled
Emelita Nicario v. Mancao Supermarket Inc. and/or Manager which ruled that petitioner, Emelita Nicario, is not entitled to overtime pay. Nor is
private respondent, Antonio Mancao jointly and severally liable with the respondent company for thirteenth month pay, service incentive leave pay,
and rest day pay.i[1]

Petitioner, Emelita Nicario, was employed with respondent company Mancao Supermarket, on June 6, 1986 as a salesgirl and was later on promoted
as sales supervisor. However, private respondent terminated her services on February 7, 1989.

A complaint for illegal dismissal with prayer for backwages, wage differential, service incentive leave pay, overtime pay, 13 th month pay and unpaid
wages was filed by petitioner before the National Labor Relations Commission, Sub-Regional Arbitration Branch X in Butuan City.
On July 25, 1989, Labor Arbiter Amado M. Solamo dismissed the complaint for lack of merit. Petitioner appealed to the National Labor Relations
Commission (NLRC), Fifth Division, Cagayan de Oro City. In a resolution dated July 25, 1989, the NLRC set aside the labor arbiters decision for
lack of due process. It ruled that since petitioner assailed her supposed signatures appearing on the payrolls presented by the company as a forgery,
the labor arbiter should not have merely depended on the xerox copies of the payrolls, as submitted in evidence by the private respondent but ordered
a formal hearing on the issue. Thus, the Commission ordered the case remanded to the arbitration branch for appropriate proceedings. The case was
assigned to Labor Arbiter Marissa Macaraig-Guillen. ii[2]

In a decision dated May 23, 1994, Labor Arbiter Macaraig-Guillen awarded petitioners claims for unpaid service incentive leave pay, 13 th month pay,
overtime pay and rest day pay for the entire period of her employment, but dismissed her claims for holiday premium pay and unpaid salaries from
February 3 to 5, 1989. The dispositive portion of the decision read as follows:

WHEREFORE, in view of the foregoing, judgment is rendered directing respondent Mancao Supermarket, Inc., and/or Mr. Antonio
Mancao to pay complainant Emelita Nicario the sum of forty thousand three hundred ninety pesos and fifteen centavos (P40,393.15)
representing unpaid services incentive leave pay, thirteenth month pay, overtime pay, and rest day for the entire period of employment.
All other claims are dismissed for lack of merit.
SO ORDERED.iii[3]

Not satisfied with the decision, private respondent appealed to the NLRC, and in a resolution dated August 16, 1995, iv[4] the Commission affirmed in
toto Labor Arbiter Macaraig-Guillens decision. Private respondent then filed a motion for reconsideration. In a resolution dated December 21, 1995,
public respondent NLRC modified its earlier resolution by deleting the award for overtime pay and ruling that private respondent Antonio Mancao is
not jointly and severally liable with Mancao Supermarket to pay petitioner the monetary award adjudged.

Petitioner now comes before this Court alleging grave abuse of discretion on the part of the public respondent NLRC in ruling that (a) she is not
entitled to overtime pay and (b) private respondent, Antonio Mancao cannot be held jointly and severally liable with respondent supermarket as to the
monetary award.

The Solicitor General, in a manifestation and motion in lieu of comment v[5] stated that public respondent NLRC acted with grave abuse of discretion
in modifying its earlier resolution (dated August 16, 1995) and thus recommends that the December 21, 1995 resolution be set aside, and its August
16, 1995 resolution be reinstated.

Public respondent NLRC, on the other hand, filed its own comment vi[6] praying for the dismissal of the petition and for the December 21, 1995
resolution to be affirmed with finality.

The petition is partly impressed with merit.

In her claim for payment of overtime pay, petitioner alleged that during her period of employment, she worked twelve (12) hours a day from 7:30
a.m. to 7:30 p.m., thus rendering overtime work for four hours each day. Labor Arbiter Macaraig-Guillen, in her decision dated May 23, 1994,
awarded overtime pay to petitioner by taking judicial notice of the fact that all Mancao establishments open at 8:00 a.m. and close at 8:00 p.m.. Upon
appeal, this particular finding was affirmed by the Commission. However, when private respondent filed a motion for reconsideration from the
resolution dated August 16, 1995, the NLRC modified its earlier ruling and deleted the award for overtime pay. Public respondent NLRC instead
gave credence to the daily time records (DTRs) presented by respondent corporation showing that petitioner throughout her employment from June 6,
1986 to February 1989, worked only for eight hours a day from 9:00 a.m. to 12:00 p.m. and 2:00 p.m. to 7:00 p.m., and did not render work on her
rest days.

Public respondents reliance on the daily time records submitted by private respondent is misplaced. As aptly stated by the Solicitor General in lieu of
comment, the DTRs presented by respondent company are unreliable based on the following observations:

a) the originals thereof were not presented in evidence; petitioners allegation of forgery should have prompted respondent to submit
the same for inspection; evidence wilfully suppressed would be adverse if produced (Sec. 3(e), Rule 131, Rules of Court)

xxx xxx xxx

e) they would make it appear that petitioner has a two-hour rest period from 12:00 to 2:00 p.m., this is highly unusual for a
store establishment because employees should attend to customers almost every minute as well as contrary to the judicial
notice that no noon break is observed.
f) petitioner never reported earlier or later than 9:00 a.m., likewise she never went home earlier or later than 8:00 pm; all
entries are suspiciously consistent.vii[7]

Labor Arbiter Macaraig-Guillen, in taking judicial cognizance of the fact that private respondent company opens twelve (12) hours a day, the same
number of hours worked by petitioner everyday, applied Rule 129, Section 2 of the Rules of Court which provides that a court may take judicial
notice of matters which are of public knowledge, or are capable of unquestionable demonstration, or ought to be known because of their judicial
functions. In awarding overtime pay to petitioner, the labor arbiter ruled:
However, it is of judicial notice that all Mancao establishments open at eight a.m. and close at eight p.m. with no noon break, so it is
believable that employees rendered 4-1/2 hours of overtime everyday, 7 days a week. viii[8]

Generally, findings of facts of quasi-judicial agencies like the NLRC are accorded great respect and at times even finality if supported by substantial
evidence.ix[9] Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.
However in cases where there is a conflict between the factual findings of the NLRC and the labor arbiter, a review of such factual findings is
necessitated.x[10]

While private respondent company submitted the daily time records of the petitioner to show that she rendered work for only eight (8) hours a day, it
did not refute nor seek to disprove the judicial notice taken by Labor Arbiter Macaraig-Guillen that Mancao establishments, including the
establishment where petitioner worked, opens twelve hours a day, opening at 8:00 a.m. and closing at 8:00 p.m.

This Court, in previously evaluating the evidentiary value of daily time records, especially those which show uniform entries with regard to the hours
of work rendered by an employee, has ruled that such unvarying recording of a daily time record is improbable and contrary to human experience. It
is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The uniformity and regularity of the
entries are badges of untruthfulness and as such indices of dubiety. xi[11] The observations made by the Solicitor General regarding the unreliability of
the daily time records would therefore seem more convincing. On the other hand, respondent company failed to present substantial evidence, other
than the disputed DTRs, to prove that petitioner indeed worked for only eight hours a day.

It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted
in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or
in the interpretation of agreements and writing should be resolved in the formers favor. xii[12] The policy is to extend the doctrine to a greater number
of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and
protection of labor.xiii[13] This rule should be applied in the case at bar, especially since the evidence presented by the private respondent company is
not convincing. Accordingly, we uphold the finding that petitioner rendered overtime work, entitling her to overtime pay.

As to the liability of private respondent Antonio Mancao, petitioner contends that as manager of Mancao establishment, he should be jointly and
severally liable with respondent corporation as to the monetary award adjudged.

The general rule is that officers of a corporation are not personally liable for their official acts unless it is shown that they have exceeded their
authority. However, the legal fiction that a corporation has a personality separate and distinct from stockholders and members may be disregarded if it
is used as a means to perpetuate fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, or to
confuse legitimate issues.xiv[14]

In this case, there is no showing that Antonio Mancao, as manager of respondent company, deliberately and maliciously evaded the respondent's
company financial obligation to the petitioner. Hence, there appearing to be no evidence on record that Antonio Mancao acted maliciously or
deliberately in the non-payment of benefits to petitioner, he cannot be held jointly and severally liable with Mancao supermarket.

WHEREFORE, in view of the foregoing, the instant petition is hereby PARTIALLY GRANTED. Accordingly, the resolution of the NLRC dated
December 21, 1995 in NLRC NCR CA No. M-002047-94 is hereby MODIFIED by awarding petitioner, Emelita Nicario her overtime pay and
relieving private respondent, Antonio Mancao, of any liability as manager of Mancao Supermarket and further holding Mancao Supermarket solely
liable. No costs.

SO ORDERED.

Narvasa, C.J., (Chairman), Kapunan, and Purisima, JJ., concur.


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