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FACTS: This case originated from a complaint filed by Agao against petitioner for
illegal dismissal, violation of P.D. No. 851, and non-payment of five days SIL. Private
respondent had been employed as a bodegero or ships quartermaster. He
complained that he had been constructively dismissed by petitioner when the latter
refused him assignments aboard its boats. Private respondent alleged that he had been
sick and thus allowed to go on leave without pay for one month but that when he
reported to work at the end of such period with a health clearance, he was told to come
back another time as he could not be reinstated immediately. Thereafter, petitioner
refused to give him work.
Petitioner, on the other hand, alleged that it was private respondent who actually
abandoned his work. It claimed that the latter failed to report for work after his leave
had expired and was, in fact, absent without leave for three months .
Labor Arbiter Amansec rendered a decision ordering respondents to
reinstatecomplainant with backwages, pay him his 13th month pay and incentive leave
Petitioner appealed to the NLRC which dismissed the appeal for lack of merit. The
NLRC dismissed petitioners claim that it cannot be held liable for SIL pay by fishermen
in its employ as the latter supposedly are field personnel and thus not entitled to
such pay under the Labor Code.
ISSUE:is Agao a field employee, hence not entitled to SIL pay?
NO; Agao is NOT a field employee, he is entitled to SIL pay

Art. 82 of the Labor Code provides:

Art. 82. Coverage. The provisions of this Title [Working Conditions and Rest
Periods]shall applyto employees in all establishments and undertakings whether for
profit or not,but notto government employees,field personnel, members of the family
of the employer who are dependent on him for support, domestic helpers, persons in
the personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations.
Field personnel shall refer to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be determined with reasonable
Petitioner argues essentially that since the work of private respondent is performed
away from its principal place of business, it has no way of verifying his actual hours of
work on the vessel. It contends that private respondent and other fishermen in its
employ should be classified as field personnel who have no statutory right to SIL pay.
In the case of Union of Pilipro Employees (UFE) v. Vicar, this Court explained the
meaning of the phrase whose actual hours of work in the field cannot be determined
with reasonable certainty in Art. 82 of the Labor Code, as follows:
Moreover, the requirement that actual hours of work in the field cannot be determined
with reasonable certainty must be read in conjunction with Rule IV, Book III of the
Implementing Rules which provides:
Rule IV Holidays with Pay
Sec. 1. Coverage This rule shall apply to all employeesexcept:
(e)Field personnel and other employees whose time and performance isunsupervised
by the employer. . . (Emphasis supplied).
Petitioner in said case is contending that such rule added another element not found in
the law. Contrary to the contention of the petitioner, the Court finds that the
aforementioned ruledid not addanother element to the Labor Code definition of field
personnel. The clause whose time and performance is unsupervised by the
employer did not amplify but merely interpreted and expounded the clause whose
actual hours of work in the field cannot be determined with reasonable
certainty.The former clause is stillwithinthe scope and purview of Article 82 which
defines field personnel. Hence, in deciding whether or not an employees actual
working hours in the field can be determined with reasonable certainty, query must
be made as to whether or not such employees time and performance is constantly
supervised by the employer
In the case at bar, during the entire course of their fishing voyage, fishermen employed
by petitioner have no choice but to remain on board its vessel. Although they perform
non-agricultural work away from petitioners business offices, the fact remains that
throughout the duration of their work they are under the effective control and
supervision of petitioner through the vessels patron or masteras the NLRC correctly

Private respondent, a corporation engaged in providing security services to its
client, hired petitioner on November 4, 1980 as one of its security guards.Thereafter, he
was assigned to the Cat House Bar and Restaurant with a monthly salary ofP2,000.00
until its closure on August 31, 1993.
On May 4, 1994, petitioner filed a complaint[1] against private respondent for
underpayment of wages, non-payment of salary from August 16-31, 1993, overtime pay,
premium pay for holiday, rest day, night shift differential, uniform allowance, service
incentive leave pay and 13th month pay from the year 1990 to 1993.
Private respondent, in its position paper,[2] rejected petitioners claim alleging it
merely acted as an agent of the latter in securing his employment at the Cat House Bar
and Restaurant.Thus, the liability for the claims of the petitioner should be charged to
Cat House Bar and its owner, being his direct employer.
In resolving the dispute in a decision dated May 31, 1995,[3] the Labor Arbiter
brushed aside the private respondents contention that it was merely an agent of the
petitioner and concluded:
ORDERED to pay within ten (10) days from receipt hereof herein complainant
EDUARDO B. PRANGAN, the total sum of Nine Thousand Nine Hundred
Thirty Two Pesos & Sixteen Centavos (P9,932.16) premium pay for holiday and
rest days, night shift differential, service incentive leave pay, 13th month pay,
uniform allowance, and unpaid salary.
Complainants other claims as well as respondents counter claim are hereby
DISMISSSED either for the reason of prescription and/or lack of merit.
Apparently not satisfied with the above-mentioned monetary award, petitioner
appealed to the National Labor Relations Commission (NLRC) contending that the
Labor Arbiter erred in concluding that he only worked for four hours and not twelve
hours a day.Evidently, the shorter work hours resulted in a lower monetary award by
the Labor Arbiter.However, the NLRC dismissed his appeal for failure to file the same
within ten-day reglementary period.[4]
Undaunted, petitioner filed a motion for reconsideration which, in the interest of
justice, was favorably granted by the NLRC resulting in the reinstatement of his
appeal. Nonetheless, petitioners victory was short-lived as the NLRC eventually
dismissed his appeal for lack of merit,[5]the dispositive portion of the decision reads:
WHEREFORE, the appeal is hereby dismissed for lack of merit and decision is
affirmedin toto.
Petitioner is now before us imputing grave abuse of discretion on the part of
respondent NLRC (a) declaring that he rendered only four hours and not twelve hours
of work, and (b) affirming the monetary award.
The public respondent, through the Solicitor General, and the private respondent
filed their respective comments on the petition refuting the allegation of the
petitioner.Specifically, they asserted that the decision was supported by ample evidence
showing that petitioner indeed worked for only four hours and not twelve hours a day.
A review of the alleged error raised by the instant petition leads us to conclude that
the same is factual in nature which, as a rule, we do not pass upon.As a general rule, it
is not for us to correct the NLRCs evaluation of the evidence, as our task is confined to
issues of jurisdiction or grave abuse of discretion.[6]Obviously, however, the same will
not apply where the evidence require a reversal or modification.[7]
As proof of petitioners actual hours of work, private respondent submitted the daily
time records allegedly signed by the petitioner himself showing that he only worked
four hours daily.
In contrast, petitioner argues that these daily time records were falsified for the
simple reason that he was not required to submit one. He further stressed that,
assuming such documents exist, its authenticity and due execution are questionable and
of doubtful source.
We find merit in the petition.
To be sure, findings of fact of quasi-judicial bodies like the NLRC, particularly when
they coincide with those of the Labor Arbiter, are accorded with respect even finality if
supported by substantial evidence.[8] In this regard, we have defined substantial
evidence as such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.[9] Absent such quantum of evidence, the Court is not
precluded from making its own independent evaluation of facts.[10]
In the instant case, there is no dispute that matters concerning an employees actual
hours of work are within the ambit of management prerogative. However, when an
employer alleges that his employee works less than the normal hours of employment as
provided for in the law,[11]he bears the burden of proving his allegation with clear and
satisfactory evidence.
In the instant petition, the NLRC, in declaring that petitioner only worked for four
hours, relied solely on the supposed daily time records of the petitioner submitted by
the private respondent.[12]We, however, are of the opinion that these documents cannot
be considered substantial evidence as to conclude that petitioner only worked for four
hours. It is worth mentioning that petitioner, in his Sur-Rejoinder to Respondents
Rejoinder,[13]unequivocably stated that:
Complainant (petitioner herein) never made nor submitted any daily time
record with respondent company considering the fact that he was assigned to a
single post and that the daily time records he allegedly submitted with
respondent company are all falsified and his signature appearing therein forged.
Private respondent hardly bothered to controvert petitioners assertion, much less
bolster its own contention. As petitioners employer, private respondent has unlimited
access to all relevant documents and records on the hours of work of the petitioner.Yet,
even as it insists that petitioner only worked for four hours and not twelve, no
employment contract, payroll, notice of assignment or posting, cash voucher or any
other convincing evidence which may attest to the actual hours of work of the petitioner
were even presented. Instead, what the private respondent offered as evidence were
only petitioners daily time record, which the latter categorically denied ever
accomplishing, much less signing.
In said alleged daily time record, it showed that petitioner started work at 10:00
p.m. and would invariably leave his post at exactly 2:00 a.m.Obviously, 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 very uniformity and regularity of the entries are badges of
untruthfulness and as such indices of dubiety.[14]
Another consideration which militates against private respondents claim is the fact
that in the personnel data sheet of the petitioner,[15] duly signed by the formers
operation manager, it shows on its face that the latters hours of work are from 7:00 p.m.
to 7:00 a.m. or twelve hours a day.Hence, private respondent is estopped from assailing
the contents of its own documents.
Further, the attendance sheets of Cat House Bar and Restaurant[16] showed that
petitioner worked from 7:00 p.m. to 7:00 a.m. daily, documents which were never
repudiated by the private respondent.
All told, private respondent has not adequately proved that petitioners actual hours
of work is only four hours. Its unexplained silence contravening the personnel data
sheet and the attendance sheets of Cat House Bar and Restaurant presented by the
petitioner showing he worked for twelve hours, has assumed the character of an
admission. No reason was proffered for this silence despite private respondent, being
the employer, could have easily done so.
As is well-settled, if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the employee.Since 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
writings should be resolved in the formers favor.[17]
WHEREFORE, in view of the foregoing, the instant petition is hereby
GRANTED. Accordingly, the decision of the NLRC dated July 31, 1996 is hereby
VACATED. Whatever money claims due to the petitioner shall be computed on the
basis of a twelve-hour daily work schedule. For this purpose, the case is hereby
REMANDED to the Labor Arbiter for immediate recomputation of said claims in
accordance with the foregoing findings.No costs.


Sime Darby Pilipinas (the Company) declared and implemented a lockout against all
the hourly employees of its tire factory on the ground of sabotage and work slowdown.
This after failed negotiations with Sime Darby Employees Association (the Union) for
the remaining two years of their CBA. The Union contested the lockout before the
DOLE-NLRC. Subsequently the company decided to sell its tire manufacturing assets
and close the business. As a result, all employees were terminated, including the
petitioners. The company later found a buyer of its assets and business in Goodyear
Philippines, Inc..

Petitioners filed a complaint for Illegal Dismissal before the DOLE and later a complaint
for Unfair Labor Practice (ULP), both cases eventually consolidated. The labor arbiter
ordered the parties to submit their respective memorandum but instead of doing this,
the Union filed an Appeal Memorandum with a petition for injunction and/or a TRO
before the NLRC. The labor arbiter later dismissed the case for lack of merit. It found
the lockout valid and legal, and justified by the incidents of continued work slowdown,
mass absences, and consistent low production output, high rate of waste and scrap tires
and machine breakdown. It also considered the mass termination of all the employees
valid as an authorized termination of employment due to closure of the establishment,
the company having complied with due process.

Petitioners appealed the labor arbiters Decision to the NLRC which was also dismissed
for lack of merit. It also ruled that that the labor arbiter could not have lost jurisdiction
over the case when petitioners appealed the formers order since the order was
interlocutory in nature and cannot be appealed separately. In the Court of Appeals, the
petition was similarly denied.

Petitioners reiterate that they were denied due process when they were dismissed right
on the day they were handed down their termination letters, without the benefit of the
thirty (30)-day notice as required by law, and invoke the Courts ruling in Serrano v.
NLRC; that the labor arbiter had lost jurisdiction over the issue when have already
perfected their appeal to the NLRC; and that labor arbiter deprived petitioners of the
chance to present their evidence during the formal trial.


1. Whether or not the labor arbiter has lost jurisdiction over the Unions petition due to
the appeal on the labor arbiters order that the Union filed before the NLRC?

2. Whether or not petitioners were deprived by the labor arbiter of the right to a
presentation of evidence in a formal trial?

3. Whether or not petitioners were illegally dismissed due to lack of due process and
also as a consequence of an illegal lockout?

Petition DENIED. Decision affirmed as the labor arbiter never lost its jurisdiction to
decide on the case and has decided the case without grave abuse of discretion. The
Court gives due credence to the factual findings of the labor arbiter and NLRC.

The order by the labor arbiter to the parties to submit their respective memorandum is
in the nature of an interlocutory order. An interlocutory order is not appealable until
after the rendition of the judgment on the merits for a contrary rule would delay the
administration of justice and unduly burden the courts. Nor could the Court finds any
grave abuse of discretion on the labor arbiters part. For one, the holding of an
adversarial trial is discretionary on the labor arbiter and the parties cannot demand it as
a matter of right. The New Rules of Procedure of the NLRC grants the labor arbiter
wide latitude to determine, after the submission by the parties of their position papers/
memoranda, if there is need for a formal trial or hearing.

Petitioners argument that had the labor arbiter allowed respondents to present their
evidence during the formal trial, the Decision would have been different, cannot be
sustained. As previously stated, the labor arbiter enjoys wide discretion in determining
whether there is a need for a formal hearing in a given case, and he or she may use all
reasonable means to ascertain the facts of each case without regard to technicalities.
When the parties submitted their position papers and other pertinent pleadings to the
labor arbiter, it is understood / given /deemed that they have included therein all the
pieces of evidence needed to establish their respective cases. A formal hearing is not
compulsory in consonance with the need for speedy disposition of labor cases. If it were
necessary, the parties may then willfully withhold their evidence and disclose the same
only during the formal hearing, thus creating surprises which could merely complicate
the issues and prolong the trial. There is a dire need to lessen technicalities in the
process of settling labor disputes.
Well-settled is the rule that hearings and resolutions of labor disputes are not governed
by the strict and technical rules of evidence and procedure observed in the regular
courts of law. Technical rules of procedure are not applicable in labor cases, but may
apply only by analogy or in a suppletory character, for instance, when there is a need to
attain substantial justice and an expeditious, practical and convenient solution to a labor
Petitioners claim that the alleged failure of the company to notify them of their
termination renders their dismissal illegal, and thus they should be reinstated and paid
with full backwages or given separation pay, following the Courts ruling in Serrano v.
Court of Appeals. The argument does not hold. The ruling in Serrano has already been
superseded by the case of Agabon v. National Labor Relation Commission. The Agabon
enunciates the new doctrine that if the dismissal is for just cause but statutory due
process was not observed, the dismissal should be upheld. While the procedural
infirmity cannot be cured, it should not invalidate the dismissal. However, the employer
should be held liable for non-compliance with the procedural requirements of due
But in any case, the issue of illegal dismissal had already been resolved by the NLRC
and the Court of Appeals, which both found that the company had an authorized cause
and had complied with the requirements of due process when it dismissed petitioners.
Petitioner Philippine Airlines, Inc. assails the decision of the National Labor
Relations Commission dismissing its appeal from the decision of Labor Arbiter
Romulus S. Protacio which declared the suspension of private respondent Dr. Herminio
A. Fabros illegal and ordered petitioner to pay private respondent the amount
equivalent to all the benefits he should have received during his period of suspension
plusP500,000.00 moral damages.
The facts are as follow:
Private respondent was employed as flight surgeon at petitioner company.He was
assigned at the PAL Medical Clinic at Nichols and was on duty from 4:00 in the
afternoon until 12:00 midnight.
On February 17, 1994, at around 7:00 in the evening, private respondent left the
clinic to have his dinner at his residence, which was about five-minute drive away. A
few minutes later, the clinic received an emergency call from the PAL Cargo
Services. One of its employees, Mr. Manuel Acosta, had suffered a heart attack. The
nurse on duty, Mr. Merlino Eusebio, called private respondent at home to inform him of
the emergency.The patient arrived at the clinic at 7:50 in the evening and Mr. Eusebio
immediately rushed him to the hospital.When private respondent reached the clinic at
around 7:51 in the evening, Mr. Eusebio had already left with the patient. Mr. Acosta
died the following day.
Upon learning about the incident, PAL Medical Director Dr. Godofredo B. Banzon
ordered the Chief Flight Surgeon to conduct an investigation.The Chief Flight Surgeon,
in turn, required private respondent to explain why no disciplinary sanction should be
taken against him.
In his explanation, private respondent asserted that he was entitled to a thirty-
minute meal break; that he immediately left his residence upon being informed by Mr.
Eusebio about the emergency and he arrived at the clinic a few minutes later;that Mr.
Eusebio panicked and brought the patient to the hospital without waiting for him.
Finding private respondents explanation unacceptable, the management charged
private respondent with abandonment of post while on duty.He was given ten days to
submit a written answer to the administrative charge.
In his answer, private respondent reiterated the assertions in his previous
explanation. He further denied that he abandoned his post on February 17, 1994. He
said that he only left the clinic to have his dinner at home. In fact, he returned to the
clinic at 7:51 in the evening upon being informed of the emergency.
After evaluating the charge as well as the answer of private respondent, petitioner
company decided to suspend private respondent for three months effective December
16, 1994.
Private respondent filed a complaint for illegal suspension against petitioner.
On July 16, 1996, Labor Arbiter Romulus A. Protasio rendered a decision[1]declaring
the suspension of private respondent illegal. It also ordered petitioner to pay private
respondent the amount equivalent to all the benefits he should have received during his
period of suspension plus P500,000.00 moral damages. The dispositive portion of the
decision reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered declaring the
suspension of complainant as illegal, and ordering the respondents the restitution to the
complainant of all employment benefits equivalent to his period of suspension, and the
payment to the complainant ofP500,000.00 by way of moral damages.[2]
Petitioner appealed to the NLRC. The NLRC, however, dismissed the appeal after
finding that the decision of the Labor Arbiter is supported by the facts on record and the
law on the matter.[3]The NLRC likewise denied petitioners motion for reconsideration.

Hence, this petition raising the following arguments:

1.The public respondents acted without or in excess of their jurisdiction and with
grave abuse of discretion in nullifying the 3-month suspension of private
respondent despite the fact that the private respondent has committed an offense
that warranted the imposition of disciplinary action.
2.The public respondents acted without or in excess of their jurisdiction and with
grave abuse of discretion in holding the petitioner liable for moral damages:
(a) Despite the fact that no formal hearing whatsoever was conducted for
complainant to substantiate his claim;
(b) Despite the absence of proof that the petitioner acted in bad faith in
imposing the 3-month suspension;and
(c)Despite the fact that the Labor Arbiter's award of moral damages is highly
irregular, considering that it was more than what the private respondent
prayed for.[5]
We find that public respondents did not err in nullifying the three-month
suspension of private respondent.They, however, erred in awarding moral damages to
private respondent.
First, as regards the legality of private respondents suspension. The facts do
not support petitioners allegation that private respondent abandoned his post on the
evening ofFebruary 17, 1994.Private respondent left the clinic that night only to have
his dinner at his house, which was only a few minutes drive away from the clinic.His
whereabouts were known to the nurse on duty so that he could be easily reached in case
of emergency. Upon being informed of Mr. Acostas condition, private respondent
immediately left his home and returned to the clinic.These facts belie petitioners claim
of abandonment.
Petitioner argues that being a full-time employee, private respondent is obliged to
stay in the company premises for not less than eight (8) hours. Hence, he may not leave
the company premises during such time, even to take his meals.
We are not impressed.
Articles 83 and 85 of the Labor Code read:
Art. 83. Normal hours of work.The normal hours of work of any employee shall not
exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100)
shall hold regular office hours for eight (8) hours a day, for five (5) days a
week,exclusive of time for meals, except where the exigencies of the service require that
such personnel work for six (6) days or forty-eight (48) hours, in which case they shall
be entitled to an additional compensation of at least thirty per cent (30%) of their
regular wage for work on the sixth day. For purposes of this Article, health personnel
shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel.(emphasis supplied)
Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less than
sixty (60) minutes time-off for their regular meals.
Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code
further states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of
sex, not less than one (1) hour time-off for regular meals, except in the following cases
when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the
(a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion;
(b)Where the establishment regularly operates not less than sixteen hours a day;
(c)In cases of actual or impending emergencies or there is urgent work to be performed
on machineries, equipment or installations to avoid serious loss which the employer
would otherwise suffer;and
(d)Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
considered as compensable working time.
Thus, the eight-hour work period does not include the meal break.Nowhere in the
law may it be inferred that employees must take their meals within the company
premises.Employees are not prohibited from going out of the premises as long as they
return to their posts on time.Private respondents act, therefore, of going home to take
his dinner does not constitute abandonment.
We now go to the award of moral damages to private respondent.
Not every employee who is illegally dismissed or suspended is entitled to
damages. As a rule, moral damages are recoverable only where the dismissal or
suspension of the employee was attended by bad faith or fraud, or constituted an act
oppressive to labor, or was done in a manner contrary to morals, good customs or
public policy.[6]Bad faith does not simply mean negligence or bad judgment.It involves
a state of mind dominated by ill will or motive. It implies a conscious and
intentionaldesign to do a wrongful act for a dishonest purpose or some moral obliquity.
[7]The person claiming moral damages must prove the existence of bad faith by clear

and convincing evidence for the law always presumes good faith.[8]
In the case at bar, there is no showing that the management of petitioner company
was moved by some evil motive in suspending private respondent. It suspended
private respondent on an honest,albeiterroneous, belief that private respondents act of
leaving the company premises to take his meal at home constituted abandonment of
post which warrants the penalty of suspension. Also, it is evident from the facts that
petitioner gave private respondent all the opportunity to refute the charge against him
and to defend himself. These negate the existence of bad faith on the part of
petitioner.Under the circumstances, we hold that private respondent is not entitled to
moral damages.
IN VIEW WHEREOF, the petition is PARTIALLY GRANTED. The portion of the
assailed decision awarding moral damages to private respondent is DELETED. All
other aspects of the decision are AFFIRMED.

FACTS: Lambo and Belocura were employed as tailors by J.C. Tailor Shop and/or
Johnny Co in 1985. As in the case of the other 100 employees of private respondents,
petitioners were paid on a piece-work basis, according to the style of suits they made.
In 1989, petitioners filed a complaint against private respondents for illegal dismissal
and sought recovery of overtime pay, holiday pay, premium pay on holiday and rest
day, SIL pay, separation pay, 13th month pay, and attorneys fees.
After hearing,LA Gutierrez found private respondents guilty of illegal dismissaland
accordingly ordered them to pay petitioners claims.
On appeal, theNLRC reversed the decision of the LA. It found that petitioners had not
been dismissed from employment but merely threatened with a closure of the business
if they insisted on their demand for a straight payment of their minimum wage, after
petitioners, in 1989, walked out of a meeting with private respondents and other
employees. According to the NLRC, during that meeting, the employees voted to
maintain the company policy of paying them according to the volume of work finished.
Only petitioners allegedly insisted that they be paid the minimum wage and other
benefits.The NLRC held petitioners guilty of abandonment of workand accordingly
dismissed their claims except that for 13th month pay. Petitioners deny that they
abandoned their work.
ISSUE:Are Lambo and Belocura regular employees?
HELD: WHEREFORE, the decision of the nlrcis SET ASIDE and another one is
RENDERED ordering private respondents to pay petitioners the total amount of
P181,102.40, as computed [by the LA]

There is no dispute that petitioners were employees of private respondents although

they were paid not on the basis of time spent on the job but according to the quantity
and the quality of work produced by them. There aretwo categories of employeespaid
by results:
(A) those whose time and performance aresupervisedby the employer.
(Here, there is an element of control and supervision over the manner as to how the
work is to be performed. A piece-rate worker belongs to this category especially if he
performs his work in the companypremises.); and
(B) those whose time and performance areunsupervised.
(Here, theemployers control is over the RESULT of the work. Workers on pakyao and
takay basis belong to this group.)
Both classes of workers are paidper unitaccomplished. Piece-rate payment is generally
practiced in garment factories where work is done in the company premises, while
payment on pakyao and takay basis is commonly observed in the agricultural industry,
such as in sugar plantations where the work is performed in bulk or in volumes difficult
to quantify. Petitioners belong to the first category, i.e., supervised employees.
In this case, private respondents exercised control over the work of petitioners. As
tailors, petitioners worked in the companys premises from 8:00 a.m. to 7:00 p.m. daily,
including Sundays and holidays. The mere fact that they were paid on a piece-rate basis
does not negate their status as regular employees of private respondents. Payment by
the piece is just a method of compensation and does not define the essence of the
relations. Nor does the fact that petitioners are not covered by the SSS affect the
employer-employee relationship.
Indeed, the followingfactorsshow that petitioners, although piece-rate workers, were
regular employees of private respondents:
(1) within the contemplation of Art. 280 of the Labor Code, their work as tailors was
necessary or desirable in the usual business of private respondents, which is engaged in
the tailoring business;
(2) petitioners worked for private respondents throughout the year, their employment
not being dependent on a specific project or season; and,
(3) petitioners worked for private respondents for more than one year
1. The term wage is broadly defined in Art. 97 of the Labor Code as remuneration or
earnings, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis.
2. In determining the existence of an employer-employee relationship, the following
elements must be considered:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the power to control the employees conduct.
Of these elements, the most important criterion is whether the employer controls or has
reserved the right tocontrolthe employee not only as to the result of the work but also
as to the means and methods by which the result is to be accomplished
4. A.Was there abandonment of work by Lambo and Belocura? NONE
To justify a finding of abandonment of work, there must be proof of a deliberate and
unjustified refusal on the part of an employee to resume his employment. The burden of
proof is on the employer to show an unequivocal intent on the part of the employee to
discontinue employment. Mere absence is not sufficient. It must be accompanied by
manifest acts unerringly pointing to the fact that the employee simply does not want to
work anymore
Private respondents failed to discharge this burden. Other than the self-serving
declarations in the affidavits of their two employees, private respondents did not
adduce proof of overt acts of petitioners showing their intention to abandon their work.
On the contrary, the evidence shows that petitioners lost no time in filing the case for
illegal dismissal against private respondent. This fact negates any intention on their part
to sever their employment relationship. Abandonment is a matter of intention; it cannot
be inferred or presumed from equivocal acts
1. Private respondents invoke the compromise agreement, dated March 2, 1993,
between them and petitioner Lambo, whereby in consideration of the sum of
P10,000.00, petitioner absolved private respondents from liability for money claims
or any other obligations.
To be sure, not all quitclaims are per se invalid or against public policy. But those
(1) where there is clear proof that the waiver was wangled from an unsuspecting or
gullible person or
(2) where the terms of settlement are unconscionable on their face are invalid.
In these cases, the law will step in to annul the questionable transaction.
However, considering that the LA had given petitioner Lambo a total award of
P94,719.20, the amount of P10,000.00 to cover any and all monetary claims is clearly
unconscionable. As we have held in another case, the subordinate position of the
individual employee vis-a-vis management renders him especially vulnerable to its
blandishments, importunings, and even intimidations, and results in his improvidently
waiving benefits to which he is clearly entitled. Thus, quitclaims, waivers or releases are
looked upon with disfavor for being contrary to public policy and are ineffective to bar
claims for the full measure of the workers legal rights. An employee who is merely
constrained to accept the wages paid to him is not precluded from recovering the
difference between the amount he actually received and that amount which he should
have received.
1. The LA awarded backwages, overtime pay, holiday pay, 13th month pay, separation
pay and attorneys fees, corresponding to 10% of the total monetary awards, in
favor of petitioners.
As petitioners were illegally dismissed, they are entitled to reinstatement with
backwages. Considering that petitioners were dismissed from the service on January 17,
1989, i.e., prior to March 21, 1989, the LA correctly applied the rule in the Mercury Drug
case, according to which the recovery of backwages should be limited to three years
without qualifications or deductions. Any award in excess of three years is null and
void as to the excess.
The Labor Arbiter correctly ordered private respondents to give separation pay.
Considerable time has lapsed since petitioners dismissal, so that reinstatement would
now be impractical and hardly in the best interest of the parties. In lieu of reinstatement,
separation pay should be awarded to petitioners.
The awards for overtime pay, holiday pay and 13th month pay are in accordance with
our finding that petitioners are regular employees, although paid on a piece-rate basis.
Except for the award of attorneys fees, the above computation is affirmed. The award
of attorneys fees should be disallowed, it appearing that petitioners were represented
by the PAO. With regard to petitioner Lambo, the amount of P10,000.00 paid to him
under the compromise agreement should be deducted from the total award of

FACTS: This case stemmed from a complaint filed against private respondent Stanfilco
for assembly time, moral damages and attorneys fees, with the Regional Arbitration-
Davao City. The Labor Arbiter rendered a decision in favor of private respondent
STANFILCO, holding that:

We cannot but agree with respondent that the pronouncement in that earlier case, i.e. the
thirty-minute assembly time long practiced cannot be considered waiting time orwork time and,
therefore, not compensable, has become the law of the case which can no longer be disturbed
without doing violence to the time-honored principle of resjudicata.
NLRC uphold the Labor Arbiters decision and declared that:
Surely, the customary functions referred to in the above-quoted provision of the agreement
includes the long-standing practice and institutionalized non-compensableassembly time. This,
in effect, estopped complainants from pursuing this case.
MR was denied hence this petition for review on certiorari. Petitioners contend that the
preliminary activities as workers of respondents STANFILCO in the assembly area is
compensable as working time (from 5:30am to 6:00 am) since these preliminary
activities are necessarily and primarily for private respondents benefit. These
preliminary activities of the workers are as follows-.
(a) First there is the roll call. Followed by getting their individual work assignments
from the foreman.
(b) Then, they are individually required to accomplish the Laborers Daily
Accomplishment Report during which they are often made to explain about their
reported accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their tools, equipment and
All these activities take 30 minutes to accomplish.
.Respondent avers that the instant complaint is not new because it is the very same
claim they brought against respondent by the same group of rank and file employees in
the case of Arica vs. National Labor Relations Commission which was filed before in a
different case. The said case involved a claim for waiting time, as the complainants
purportedly were required to assemble.
In the previous case, the 30-minute assembly time long practiced and institutionalized
by mutual consent of the parties under their CBA cannot be considered as waiting time
within the purview of Section 5, Rule 1, Book III of the Rules and Regulations
Implementing the Labor.

WON the assembly time is compensable.


1. The 30-minute assembly is a deeply-rooted, routinary practice of the employees,

and the proceedings attendant thereto are not infected with complexities as to
deprive the workers the time to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings regarding their
respective work assignments. Their houses are situated right on the area where the
farms are located, such that after the roll call, which does not necessarily require the
personal presence, they can go back to their houses to attend to some chores. In
short, they are not subject to the absolute control of the company during this period,
otherwise, their failure to report in the assembly time would justify the company to
impose disciplinary measures. The evidence of the case demonstrates that the 30-
minute assembly time was not primarily intended for the interests of the employer,
but ultimately for the employees to indicate their availability or non-availability for
work during every working day.
Herein petitioners are merely reiterating the very same claim which they filed in Arica
vs NLRC and which records show had already long been considered terminated and
closed by this Court. Therefore, the NLRC can not be faulted for ruling that petitioners
claim is already barred by res judicata.
Petition is DISMISSED for lack of merit and the decision of the National Labor Relations
Commission is AFFIRMED.


Facts:In September 1993, Morente, Allauigan and Ofialda and others filed a complaint
for underpayment of wages, non payment of overtime pay, holiday pay, service
incentive leave pay, and premium pay for rest day and holiday and night shift
differential against petitioners in the Arbitration Branch of NLRC. It alleged that Cohu
is engaged in the business of wholesale of plastic products and fruits of different kinds
with more than 24 employees. Respondents were hired on January 1990, May 1990 and
July 19991 as laborers and were paid below the minimum wage for the past 3 years.
They were required to work for more than 8 hours a day and never enjoyed the
minimum benefits. Petitioners filed their comment stating that the respondents were
their helpers.

The Labor Arbiter rendered a decision dismissing the money claims. Respondents filed
an appeal with the NLRC where it granted the money claims of Ofialda, Morente and
Allaguian. Petitioners appealed with the CA but it was denied. It said that the company
having claimed of exemption of the coverage of the minimum wage shall have the
burden of proof to the claim.

In the present petition, the Petitioners insist that C. Planas Commercial is a retail
establishment principally engaged in the sale of plastic products and fruits to the
customers for personal use, thus exempted from the application of the minimum wage
law; that it merely leases and occupies a stall in the Divisoria Market and the level of its
business activity requires and sustains only less than ten employees at a time.
Petitioners contend that private respondents were paid over and above the minimum
wage required for a retail establishment, thus the Labor Arbiter is correct in ruling that
private respondents claim for underpayment has no factual and legal basis. Petitioners
claim that since private respondents alleged that petitioners employed 24 workers, it
was incumbent upon them to prove such allegation which private respondents failed to

Issue: Whether or not petitioner is exempted from the application of minimum wage

Ruling: The contention of the petitioners that they are exempted by the law must be
proven. The petitioners have not successfully shown that they had applied for the

R.A. No. 6727 known as the Wage Rationalization Act provides for the statutory
minimum wage rate of all workers and employees in the private sector. Section 4 of the
Act provides for exemption from the coverage, thus: Sec. 4. (c) Exempted from the
provisions of this Act are household or domestic helpers and persons employed in the
personal service of another, including family drivers. Also, retail/service establishments
regularly employing not more than ten (10) workers may be exempted from the
applicability of this Act upon application with and as determined by the appropriate
Regional Board in accordance with the applicable rules and regulations issued by the
Commission. Whenever an application for exemption has been duly filed with the
appropriate Regional Board, action on any complaint for alleged non-compliance with
this Act shall be deferred pending resolution of the application for exemption by the
appropriate Regional Board.
In the event that applications for exemptions are not granted, employees shall receive
the appropriate compensation due them as provided for by this Act plus interest of one
percent (1%) per month retroactive to the effectivity of this Act.

Clearly, for a retail/service establishment to be exempted from the coverage of the

minimum wage law, it must be shown that the establishment is regularly employing not
more than ten (10) workers and had applied for exemptions with and as determined by
the appropriate Regional Board in accordance with the applicable rules and regulations
issued by the Commission.

This is a special civil action under Rule 65 of the Rules of Court to nullify the 14
August 1995 Decision of the National Labor Relations Commission which affirmed with
modification the Decision of Labor Arbiter Eduardo J. Carpio. The Labor Arbiter held
that private respondents were illegally constructively dismissed and ordered petitioners
to reinstate them and pay them back wages as well as their proportionate 13th month
pay, service incentive leave pay and salary differentials.The NLRC set aside the award
of incentive leave pay.
Petitioners Eduardo Dayot and Susan Dayot were President and Vice President,
respectively, of their co-petitioner Mark Roche International (MRI), a corporation
organized and existing under the laws of the Philippines, engaged in the garments
business. Private respondents Eileen Rufon, Lilia Briones, Beatriz Managaytay, Delia
Arellano, Anita Marcelo, Rio Mariano, Marissa Sadili, Wilma Patacay, Estella Mallari,
Delia Laroya and Divina Villarba were employed as sewers of MRI with lengths of
service varying from three (3) to nine (9) years.
On different dates private respondents filed separate complaints for underpayment
of wages and non-payment of overtime pay against petitioners MRI, Eduardo Dayot
and Susan Dayot.Private respondents alleged that they usually worked eleven (11) to
twelve (12) hours daily, except on Mondays during which they worked eight (8) hours,
and were paid wages on a piece-rate basis amounting to P450.00 to P600.00 per
week.They likewise asserted that sometime in 1992 they were unable to avail of their
SSS benefits, e.g., salary loan, sickness benefits and maternity benefits because, as they
found out, the company did not remit their contributions to the SSS.
On 11 October 1992 private respondents sought the assistance of a labor
organization which helped them organize the Mark Roche Workers Union (MRWU).On
14 October 1992 they registered the union with the Department of Labor and
Employment - National Capital Region (DOLE-NCR) and on the same date filed a
Petition for Certification Election before the Med-Arbitration Board.
On 27 October 1992 petitioners received a notice of hearing of the
petition. Apparently irked by the idea of a union within the company, petitioners
ordered private respondents to withdraw the petition and further threatened them that
should they insist in the organization of a union they would be dismissed. Unfazed,
private respondents refused. As expected, on 29 October 1992 they were discharged
from work.
On 30 October 1992 private respondents amended their earlier complaints to
include as additional causes of action their illegal dismissal, unfair labor practice, non-
payment of 13th month pay, underpayment for legal holidays, and for damages.
Petitioners countered that private respondents were not dismissed from work but
voluntarily abandoned their jobs thereby paralyzing company operations. Petitioners
likewise contended that private respondents incurred numerous absences without prior
notice and clearance from their superiors as evidenced by several company memos sent
to them. Only Divina Villarba showed up and told petitioners that she was voluntary
resigning because she had found better employment elsewhere. It was only later that
petitioners learned that private respondents absences were due to their preoccupation
with the organization of a labor union. Notwithstanding these absences, petitioners
expressed their willingness to reinstate private respondents within a reasonable
time. They however disclaimed knowledge of any deficiency owing to private
respondents since all the benefits due them as required by law were fully paid, except
overtime pay which they were not entitled to on account of their being piece-rate
On 3 March 1993 the Labor Arbiter rendered his decision declaring as illegal the
constructive dismissal of private respondents. Petitioners were thus ordered to
immediately reinstate private respondents as sewers and to pay each of them his (a)
back wages computed from 29 October 1992 to 31 March 1993 in the amount
ofP15,524.08 subject to adjustments until reinstated but not to exceed three (3) years; (b)
proportionate share in the 13th month pay for the period January to October 1992 in the
amount ofP2,538.77; unpaid five (5) days service incentive leave pay for 1989, 1990 and
1991 in the amount ofP1,565.00; and, (c) wage differentials in the amount ofP24,707.38.
On appeal the NLRC affirmed the reinstatement of private respondents and the
payment of back wages, salary differentials and proportionate 13th month pay but set
aside the award of service incentive leave pay on the ground that private respondents
were not entitled thereto as they were piece-rate workers. Petitioners moved for
reconsideration but was denied for lack of merit.
Petitioners now contend that the NLRC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in sustaining the Labor Arbiter by declaring
private respondents as having been constructively dismissed from their jobs, hence,
illegal. On the contrary, they argue that private respondents voluntarily abandoned
their jobs without justifiable reason nor prior notice. The NLRC disregarded the
company memos addressed to each of the private respondents which were indicative of
their intention to leave the company and showed their propensity to incur frequent
absences in violation of company rules and regulations.
Abandonment, as a just and valid ground for dismissal, means the deliberate and
unjustified refusal of an employee to resume his employment.The burden of proof is on
the employer to show an unequivocal intent on the part of the employee to discontinue
employment. The intent cannot be lightly inferred or legally presumed from certain
ambivalent acts. There must be a concurrence of both the intention to abandon and
some overt act from which it can be deducted that the employee has no more intention
to resume his work.[1]
These are not obtaining in the instant case. No overt act was established by
petitioners from which to infer the clear intention of private respondents to desist from
their employment.The company memos submitted by petitioner could not be the basis
of such intention since they referred to absences incurred by private respondents long
before their dismissal. The lack of proximity of those absences to the actual dismissal
rendered them unreliable, even worthless.Moreover, as correctly found by the NLRC, it
was unlikely that private respondents had abandoned their jobs considering their
lengths of service in the company and the difficulty in finding similar employment.In
addition, if they had truly forsaken their jobs, they would not have bothered to file a
complaint for constructive dismissal against petitioners immediately after they were
dismissed and prayed for their reinstatement.An employee who forthwith takes steps
to protest his layoff cannot by any logic be said to have abandoned his work.[2]On the
contrary, there is ample proof showing that private respondents were dismissed from
their jobs for their refusal to withdraw their petition for certification election filed before
the DOLE.
However, it must be made clear here that the dismissal of private respondents was
not a constructive dismissal but an illegal dismissal, and this is where both the NLRC
and the Labor Arbiter erred.Constructive dismissal or a constructive discharge has been
defined as a quitting because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in
pay.[3]In the instant case, private respondents were not demoted in rank nor their pay
diminished considerably. They were simply told without prior warning or notice that
there was no more work for them.After receiving the notice of hearing of the petition
for certification election on 27 October 1992, petitioners immediately told private
respondents that they were no longer employed. Evidently it was the filing of the
petition for certification election and organization of a union within the company which
led petitioners to dismiss private respondents and not petitioners' allegations of absence
or abandonment by private respondents.The formation of a labor union has never been
a ground for valid termination, and where there is an absence of clear, valid and legal
cause, the law considers the termination illegal.[4]
Petitioners likewise contend that the NLRC acted with grave abuse of discretion in
granting private respondents reinstatement with payment of back wages. They argue
that reinstatement can no longer be effected in view of the lapse of a considerable
period of time from the dismissal of private respondents in October 1992 to the time the
order for reinstatement was released.As for the award of back wages, they assert that it
is capricious and arbitrary since it only encourages indolence and promotes enrichment
of private respondents at the expense of petitioners.
The award of reinstatement and back wages belongs to an illegally dismissed
employee by direct provision of law and cannot be defeated by mere allegations of
inconvenience, inconceivability or implausibility. Article 279 of the Labor Code
provides that an illegally dismissed employee is entitled to reinstatement without loss
of seniority rights and other privileges and to his full back wages from the time his
compensation was withheld from him up to the time of his actual reinstatement.Back
wages are granted on grounds of equity for earnings which a worker or employee has
lost due to his illegal dismissal.[5] Petitioners are however given the alternative of
paying separation pay to illegally dismissed employees where reinstatement is no
longer possible.
Petitioners further aver that the NLRC likewise abused its discretion when it
affirmed the Labor Arbiters ruling that private respondents were not paid their money
claims.They insist that they have already paid private respondents all the amounts and
benefits due them and that had the Labor Arbiter conducted trial on the merits, they
could have presented documents proving their claim to be true.
The decision of the Labor Arbiter not to schedule the case for another hearing could
not be considered arbitrary. The holding of a hearing is discretionary with the Labor
Arbiter and is something which the parties cannot demand as a matter of right.[6]It is
entirely within the bounds of the Labor Arbiters authority to decide a case based on
mere position papers and supporting documents without a formal trial or hearing.The
requirements of due process are satisfied when the parties are given the opportunity to
submit position papers wherein they are supposed to attach all the documents that
would prove their claim in case it be decided that no hearing should be conducted or
was necessary.
In case of employees money claims, the employer bears the burden to prove that
employees have received their wages and benefits and that the same were paid in
accordance with law. It is incumbent upon the employer to present the necessary
documents to prove such claims. In their position paper, petitioners failed to present
necessary documentary evidence to substantiate their allegation that private
respondents money claims were fully paid. They cannot use the absence of trial as an
excuse for their failure as they could have presented documentary evidence at any time
before the Labor Arbiter and, on appeal, before the NLRC. Hence, they cannot at this
late stage bewail that they were not afforded due process.
Finally, as correctly held by the NLRC, private respondents as piece-rate employees
are not entitled to service incentive leave pay as well as holiday pay even if they are
entitled to other benefits like COLA and 13th month pay. Service incentive leave pay
shall not apply to employees whose performance is unsupervised by the employer,
including those who are paid in a fixed amount for performing work irrespective of the
time consumed in the performance thereof.[7]
WHEREFORE, this Court finds that private respondents Eileen Rufon, Lilia
Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, Marissa
Sadili, Wilma Patacay, Estrella Mallari, Delia Laroya and Divina Villarba were illegally
dismissed - not merely illegally constructively dismissed - by petitioners Mark Roche
International and/or Eduardo Dayot and Susan Dayot, and to this extent, the assailed
Decision of public respondent National Labor Relations Commission affirming that of
the Labor Arbiter, is MODIFIED. However, it is AFFIRMED insofar as it ordered the
reinstatement of private respondents with back wages, salary differentials and 13th
month pay.The service incentive leave pay awarded by the Labor Arbier but deleted by
the National Labor Relations Commission is likewise DELETED.

This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No.
79225 which modified the decision of the National Labor Relations Commission (NLRC)
in NLRC Case No. V-000580-2000.The NLRC affirmed the decision of the Labor Arbiter
dismissing the complaint for illegal dismissal filed by
petitioner Loida V. Malabago against private respondent Pacifica Agrivet Supplies,
Inc.Oncertioraribefore the Court of Appeals, the appellate court affirmed the dismissal
of the complaint but ordered private respondent to grant separation pay to petitioner as
financial assistance.
The facts are as follows:

Petitioner was the OIC-Store Supervisor at private respondents Torres Branch

inTaclobanCity.On September 29, 1999, petitioner took out twenty (20) heads day-old
chicks, one-half () bag of Chick Booster Mash (CBM)-Vitarich and one (1) 113-gram
bottle ofVetracin.She intended to use the chicks for the first birthday celebration of her
child.Petitioner instructed the branch clerk, RexRegaton, not to issue a charge invoice
for the items as she promised to pay the cost onOctober 15, 1999.

On October 7, 1999, Jennifer Doit replaced Regaton as branch clerk. Petitioner

immediately informed Doit of her procurement. She, however, failed to pay for the
items onOctober 15, 1999.Instead, she got one (1) bag of Boiler Finisher Crumble (BFC)-
General and toldDoitto charge the same to her account.

Petitioner made a partial payment onNovember 15, 1999.She paid only for the CBM-
Vitarich and Vetracin, and told Doit that she would settle the balance on December 8,
1999, upon the release of their 13thmonth pay.

OnNovember 19, 1999, petitioner again took one (1) bag of BFC-Vitarich.She instructed
the store utility man to inform Doit about the matter as the latter was off duty at the

OnNovember 20, 1999,Doitand utility man AllanBaldezamade a written report[1]to
Ms.NimfaBuenafe, Area Manager,Leyte, regarding petitioners act of taking out stocks
without issuing cash slips or sales invoices.They also reported that petitioner paid only
a fraction of her debt at a later date using the cost price and not the selling price, and
that petitioner overpriced the items sold to customers to offset the items taken out
without cash slips or sales invoices.

Acting on the report, the Area Manager issued a memorandum dated November 23,
1999directing petitioner to explain why she did not make the proper documentation for
the items that she took from the stores stock. The memorandum also stated that
releasing stocks without any cash slip or charge invoice is a Type D offense under the
company policy, punishable with dismissal.[2]

Petitioner submitted her explanation on the same date. She admitted the allegations
in Doits and Baldezas report. She however argued that only releasing stocks to
customers without charge slip or sales invoice is considered as Type D offense under
their company policy. The act is not punishable if the items are released to the
companys employees like herself. She also highlighted the fact that she always
informed her co-workers every time that she took out items from the store to show her
good faith.[3]

On November 24, 1999, the Area Manager issued a memorandum[4] suspending

petitioner for fifteen (15) days pending the investigation of her case, thus:


It was noted that you have done a very grievous offense by releasing
stocks without proper documentation. I think you are fully aware that
disciplinary action of this offense is DISMISSAL.

You are hereby suspended for fifteen (15) days effective today,November
24, 1999toDecember 8, 1999without pay.

Further evaluation of this case shall be done during your suspension
Please report directly to the undersigned, your Area Manager, after
expiration of your suspension period which will be on December 9,
1999for further review and discussion.

(sgd) MA. NIMFA BUENAFENoted by:
EasternVisayasLeyteAsst. Vice-President

On November 29, 1999, petitioner received another memorandum from the Area
Manager advising her to report to the Cebu Main Office on December 3, 1999 in
connection with the ongoing investigation of her case.[5]

Petitioner appeared before a panel of investigators at the companys main office

on December 3, 1999. The investigators apprised petitioner of the charges against her
and asked her to explain her side.Petitioner reiterated her position in her letter
datedNovember 23, 1999.[6]

On December 7, 1999, Assistant Vice President Isabel Bunac issued a

memorandum[7] informing petitioner that private respondent has approved the
recommendation of the investigating committee for her dismissal due to the following

1.Releasing of stocks without proper documentation;

2.Paying a portion of the stocks taken after attention was called using the
cost price only and not the companys selling price;
3.Overpricing of some items to offset the items not being issued with cash
slip or sales invoice.

Accordingly, petitioners employment was immediately terminated.

Petitioner filed a complaint for illegal dismissal against private respondent

on December 13, 1999.[8] She also included in the complaint claims for overtime pay,
separation pay, service incentive leave pay, vacation/sick leaves, moral and exemplary
damages, and attorneys fees. Petitioner alleged that she was deprived of due process
before her dismissal. She also argued that her act of taking out stocks from the store
without cash slip or sales invoice may not be considered as just cause for termination of
employment under the Labor Code as she had no intention to defraud or cause damage
to the company and that she acted in utmost good faith.[9]

The Labor Arbiter, in a decision datedMarch 30, 2000, dismissed the complaint for lack
of merit.[10]

Petitioner appealed to the NLRC.The Commission, however, dismissed the appeal and
affirmed the decision of the Labor Arbiter.[11] It likewise denied petitioners motion for

Petitioner filed a petition for certiorari before the Court of Appeals, again raising the
same arguments.

The Court of Appeals upheld the validity of petitioners dismissal on the ground of
violation of a company policy, which violation is punishable by dismissal under the
employees manual. It, however, found appropriate the award of separation pay to
petitioner as financial assistance.[13]

Petitioner filed a petition for review before this Court on the following grounds:

1.The Honorable Court of Appeals erred in ruling that there exists a valid
ground to terminate petitioners employment;
2.The Honorable Court of Appeals erred in ruling that private respondent
has observed procedural due process;and
3.The Honorable Court of Appeals erred in not awarding overtime fee to
the petitioner in addition to the other monetary awards as a
consequence of the illegal dismissal.[14]
Private respondent, meanwhile, filed a motion for reconsideration of the decision
of the Court of Appeals.It sought to set aside the award of separation pay to petitioner.

The Court of Appeals did not rule on the motion for reconsideration in view of
this Courts resolution giving due course to the petition at bar. It instead elevated the
records of the case to this Court.[16]

Hence, the issues that need to be resolved in this case are:

1.Whether petitioners dismissal was valid;

2.Whether petitioner is entitled to overtime pay; and
3.Whether the award of separation pay to petitioner is proper.

We affirm the decision of the Court of Appeals.

First, we find that petitioners dismissal was valid.Two requisites must concur for
the valid termination of an employees services:(a) the dismissal must be for any of the
causes provided for in Article 282 of the Labor Code; and (b) the employee must be
afforded an opportunity to be heard and defend himself.[17]

In the case at bar, petitioner was dismissed for having been found guilty of
taking out items from the store without proper documentation.Petitioner admitted this
during the investigation conducted by the company, although she tried to find excuses
for her deed. Petitioner knew very well that releasing of items from the stores stock
without the corresponding documents is classified as Type D offense and is punishable
by dismissal for the first offense under the companys Manual of Policies.

We have held that it is the employers prerogative to prescribe reasonable rules
and regulations necessary or proper for the conduct of its business or concern, to
provide certain disciplinary measures to implement said rules and to assure that the
same be complied with. At the same time, it is the duty of the employee to obey all
reasonable rules, orders, and instructions of the employer, and willful or intentional
disobedience thereto, as a general rule, justifiesrecissionof the contract of service and
the peremptory dismissal of the employee.[18] Private respondent requires its store
personnel to issue corresponding cash slips or invoices for every item that is brought
out of the store to allow it to monitor its inventory and to protect the company from
theft or unauthorized releases of its merchandise. The employees manual did not
qualify whether the goods are released to customers or to its employees. As Store
Supervisor, petitioner had the heavier burden to be faithful to company rules and
policies not only to protect the companys business but also to set a good example to her
subordinates. Under Article 282 of the Labor Code, willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his
work is a ground for terminating an employment.[19] Petitioners violation of the
companys regulations regarding the release of its stock constitutes a valid ground for
terminating her services.

Petitioners averment that she was deprived of due process before her dismissal is
likewise unfounded. Records show that on November 23, 1999, the Area Manager
issued a memorandum to petitioner informing her of the report against her and
directing her to explain why she did not make the proper documentation for the items
that she took from the stores stock. The memorandum also informed petitioner of the
nature of the offense and the imposable penalty thereon. Petitioner submitted her
explanation on the same date.OnNovember 24, 1999, the Area Manager issued another
memorandum suspending petitioner for fifteen (15) days pending the investigation of
her case. On November 29, 1999, petitioner was advised to appear at the Cebu Main
Office for a formal investigation. A formal investigation took place on December 3,
1999 at the companys main office where petitioner was allowed to explain her side
before a panel of investigators. On December 7, 1999, Assistant Vice President
Isabel Bunac issued a memorandum terminating the employment of petitioner and
stating the groundstherefor.

The essence of due process in administrative proceedings is an opportunity to
explain ones side or an opportunity to seek reconsideration of the action or ruling
complained of. Before an employee can be dismissed, the Labor Code requires the
employer to furnish the employee a written notice containing a statement of the causes
for termination and to afford said employee ample opportunity to be heard and to
defend himself with the assistance of his representative if he so desires. If, after
investigation, the employer decides to terminate the services of the employee, the
employer must notify the worker in writing of the decision to dismiss him, stating
clearly the reasonstherefor.[20]Private respondent has complied with all the procedural
requirements for dismissal of an employee.

As regards petitioners claim for overtime pay, we find nothing in the records to
support her demand except her self-serving allegation that she had rendered service
beyond eight (8) hours.She did not present any official record of the time that she had
rendered work to the company.In the absence of sufficient evidence, we cannot sustain
petitioners claim.

Finally, with respect to the award of separation pay, we sustain the ruling of the
Court of Appeals. Under the Labor Code, an employee dismissed for any of the just
causes enumerated in Article 282 of the Labor Code is not entitled to separation
pay. Exceptionally however, separation pay, in the form of financial assistance, is
granted as a measure of social justice even when the employee is validly dismissed for
cause as long as it is not for serious misconduct or those other causes that reflect on his
moral character.[21]

In the case at bar, we agree with the findings of the Court of Appeals that the
cause for petitioners dismissal did not reflect on her moral character. The appellate
court said:

In the instant case, the cause of petitioners dismissal was the

violation of company policy on releasing stocks without any cash slip or
charge slip.While petitioner was found to have violated the said offense,
the same however, does not reflect on her moral character. The Court
accords due consideration to petitioners honesty in informing the branch
clerks of the items she took out and her further act of paying the value of
the items. However and to reiterate, her honesty does not absolve her
from any liability she may have incurred for violating a known company
policy. The Court also considers [the] fact that petitioners record of
employment with private respondent for more than five (5) years is
entirely unblemished.Hence, the consequent award of separation pay.

Thus, we find that the Court of Appeals did not err in rendering its assailed

IN VIEW WHEREOF, the petition is DENIED. The decision of the Court of
Appeals isAFFIRMED.



Summary:A taxi driver initially worked for the taxi operator, La Mallorca Taxi. It closed
down and a new entity, R&E Transport, was started by the previous owners. Then, the
taxi driver worked in this new company and retired. He filed a complaint with the
NLRC. However, before the NLRC ruling, his widow accepted only a part of the
retirement pay and signed a quitclaim.

Rule of Law:Article 287 of the Labor Code provides that "In the absence of a retirement
plan or agreement providing for retirement benefits of employees in the establishment,
an employee x x x may retire and shall be entitled to retirement pay equivalent to at
least one-half (1/2) month salary for every year of service."

Facts:Pedro Latag (P) was a regular employee of La Mallorca Taxi since 1961. When La
Mallorca closed down, Latag (P) transferred to R&E Transport (P). As a taxi driver,
Latag (P) received an average daily salary of five hundred pesos.

Latag (P) got sick in 1995 and was forced to apply for partial disability with the SSS,
which was granted. When he recovered, he reported for work in 1998 but was no longer
allowed to continue working due to old age.

Latag (P) thus asked R&E Transport (D) for his retirement pay pursuant to Republic Act
7641, but he was ignored. Thus, Latag filed a case for payment of his retirement pay
before the NLRC.

The labor arbiter credited Latag (P) with 37 years of service for La Mallorca and R&E
Transport (D). This was reversed by the NLRC and credited Latag (P) with only 14 years
of service at R&E Transport (D). However, before the NLRC decision, Latag's (P) widow
accepted a part of the retirement pay and signed a quitclaim or waiver.

Later on appeal, the appellate court upheld the finding of the labor arbiter.

Issues:Is a taxi driver entitled to retirement pay despite of the quitclaim?

Ruling: Yes. Latag (P) was credited with 14 years of service with R&E Transport (D)
pursuant Article 287 of the Labor Code, as amended by Republic Act No. 7641,

Article 287. Retirement. - x x x In the absence of a retirement plan or agreement

providing for retirement benefits of employees in the establishment, an employee x x x
may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.

Unless the parties provide for broader inclusions, the term one half-month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves.

As to the Quitclaim and Waiver signed by Latag's (P) widow, the appellate court
committed no error when it ruled that the document was invalid and could not bar
Latag (P) from demanding the benefits legally due.

A quitclaim is ineffective in barring recovery of the full measure of a workers rights,

and the acceptance of benefits therefrom does not amount to estoppel.


Facts: Petitioner, a duly licensed private employment agency, recruited and deployed
private respondent Virgilio for employment with ZAMEL as an architectural draftsman
in Saudi Arabia. Service agreement was executed by private respondent and ZAMEL
whereby the former was to receive per month a salary of US$500.00 plus US$100.00 as
allowance for a period of one year commencing from the date of his arrival in Saudi
Arabia. However, ZAMEL terminated the employment of private respondent on the
ground that his performance was below par. For three successive days thereafter, he
was detained at his quarters and was not allowed to report to work until his exit papers
were ready. On February 16, 1984, he was made to board a plane bound for the
Philippines. Private respondent then filed a complaint for illegal termination against
Petitioner Royal Crown Internationale and ZAMEL with the POEA.

Petitioner contends that there is no provision in the Labor Code, or the omnibus rules
implementing the same, which either provides for the "third-party liability" of an
employment agency or recruiting entity for violations of an employment agreement
performed abroad, or designates it as the agent of the foreign-based employer for
purposes of enforcing against the latter claims arising out of an employment agreement.
Therefore, petitioner concludes, it cannot be held jointly and severally liable with
ZAMEL for violations, if any, of private respondent's service agreement.

Issue: Whether or not petitioner as a private employment agency may be held jointly
and severally liable with the foreign-based employer for any claim which may arise in
connection with the implementation of the employment contracts of the employees
recruited and deployed abroad.

Held: Yes, Petitioner conveniently overlooks the fact that it had voluntarily assumed
solidary liability under the various contractual undertakings it submitted to the Bureau
of Employment Services. In applying for its license to operate a private employment
agency for overseas recruitment and placement, petitioner was required to submit,
among others, a document or verified undertaking whereby it assumed all
responsibilities for the proper use of its license and the implementation of the contracts
of employment with the workers it recruited and deployed for overseas employment. It
was also required to file with the Bureau a formal appointment or agency contract
executed by the foreign-based employer in its favor to recruit and hire personnel for the
former, which contained a provision empowering it to sue and be sued jointly and
solidarily with the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment. Petitioner was required as well to post
such cash and surety bonds as determined by the Secretary of Labor to guarantee
compliance with prescribed recruitment procedures, rules and regulations, and terms
and conditions of employment as appropriate.

These contractual undertakings constitute the legal basis for holding petitioner, and
other private employment or recruitment agencies, liable jointly and severally with its
principal, the foreign-based employer, for all claims filed by recruited workers which
may arise in connection with the implementation of the service agreements or
employment contracts.

Facts:Bulu Chowdury was charged with the crime of illegal recruitment in large scale
by recruiting Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis for employment in
Korea. Evidence shows that accused appellant interviewed private complainant in
1994 at Craftrades office. At that time, he was an interviewer of Craftrade which was
operating under temporary authority given by POEA pending the renewal of license.
He was charged based on the fact that he was not registered with the POEA as
employee of Craftrade and he is not in his personal capacity, licensed to recruit overseas
workers. The complainants also averred that during their applications for employment
for abroad, the license of Craftrade was already expired.

For his defense Chowdury testified that he worked as interviewer at Craftrade from
1990 until 1994. His primary duty was to interview job applicants for abroad. As a mere
employee, he only followed the instructions given by his superiors, Mr. Emmanuel
Geslani, the agency's President and General Manager, and Mr. UtkalChowdury, the
agency's Managing Director.

Issue: Whether or not accused-appellant knowingly and intentionally participated in

the commission of the crime charged.

Held:No, an employee of a company or corporation engaged in illegal recruitment may

be held liable as principal, together with his employer, if it is shown that he actively and
consciously participated in illegal recruitment. In this case, Chowdury merely
performed his tasks under the supervision of its president and managing director. The
prosecution failed to show that the accused-appellant is conscious and has an active
participation in the commission of the crime of illegal recruitment. Moreover, accused-
appellant was not aware of Craftrade's failure to register his name with the POEA and
the prosecution failed to prove that he actively engaged in recruitment despite this
knowledge. The obligation to register its personnel with the POEA belongs to the
officers of the agency. A mere employee of the agency cannot be expected to know the
legal requirements for its operation. The accused-appellant carried out his duties as
interviewer of Craftrade believing that the agency was duly licensed by the POEA and
he, in turn, was duly authorized by his agency to deal with the applicants in its behalf.
Accused-appellant in fact confined his actions to his job description. He merely
interviewed the applicants and informed them of the requirements for deployment but
he never received money from them. Chowdury did not knowingly and intentionally
participated in the commission of illegal recruitment being merely performing his task
and unaware of illegality of recruitment.


On June 21, 1995, herein appellant Maritess Martinez and her daughter,Jenilyn
Martinez, were charged with seven counts of Estafa before the RTCof Manila.That in or
about and during the period comprised between February 1993and July, 1994, the said
accused, conspiring and confederating together andhelping one another, representing
themselves to have the capacity tocontract, enlist and transport Filipino workers for
employment abroad, didthen and there willfully and unlawfully for a fee recruit and
promiseemployment/job placement abroad without first having secured the
necessarylicense or authority from the Department of Labor and Employment (POEA).
Issue:Whether or not appellant should be convicted even if she merely
assistedcomplainants in their applications with the recruitment agency and there is
noproof that she falsely represented to have the capacity to send complainantsas factory
workers in South Korea?
Held:Yes,In this case, all the four complainants unanimously declared thatappellant
offered and promised them employment abroad. Notwithstandingsaid promises and
payments, they were not able to leave for abroad to work.These testimonies, as well as
the documentary evidence they submittedconsisting of the receipts issued them by the
appellant, all prove that thelatter was engaged in recruitment and placement
activities.Even conceding that appellant merely referred the complainants to JHImperial
Organization Placement Corp., the same still constituted an act of recruitment


Accused-appellant Samina Angeles y Calma was charged with four (4) counts of estafa
and one (1) count of illegal recruitment in the following informations:[1]

Criminal Case No. 94-140489 (Illegal Recruitment)

The undersigned accuses SAMINA ANGELES y CALMA of violation of Art. 38 (a) Pres.
Decree No. 1412 amending certain provisions of Book 1, Pres. Decree No. 442 otherwise
known as the New Labor Code of the Philippines in relation to Article 13 (b) and (c) of
said Code, as further amended in a large scale, as follows:
That sometime during the month of September 1994 in the City of Manila, Philippines,
the said accused, representing herself to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did then and there willfully and
unlawfully for a fee, recruit and promise employment/job placement abroad to the
following persons:
1.Marceliano T. Tolosa
2.Precila P. Olpindo
3.Vilma S. Brina
4.Maria Tolosa de Sardea y Tablada
Without first having secured the required license or authority from the Department of
Labor and Employment.
The five (5) cases were consolidated and tried jointly by the Regional Trial Court of
Manila, Branch 50.
Maria Tolosa Sardea was working in Saudi Arabia when she received a call from her
sister, Priscilla Agoncillo, who was in Paris, France.Priscilla advised Maria to return to
the Philippines and await the arrival of her friend, accused-appellant Samina Angeles,
who will assist in processing her travel and employment documents to Paris,
France.Heeding her sisters advice, Maria immediately returned to the Philippines.
Marceliano Tolosa who at that time was in the Philippines likewise received
instructions from his sister Priscilla to meet accused-appellant who will also assist in the
processing of his documents for Paris, France.
Maria and Marceliano eventually met accused-appellant in September 1994 at
Expert Travel Agency on Mabini Street, Manila. During their meeting, accused-
appellant asked if they had the money required for the processing of their
documents. On September 8, 1994, Maria gave P107,000.00 to accused-appellant at
Expert Travel Agency. Subsequently, she gave another P46,000.00 and US$1,500.00 as
additional payments to accused-appellant.
Marceliano, on the other hand, initially gave P100,000.00 to accused-appellant but
on September 28, 1994, he gave an additional P46,000.00 and US$1,500.00 to accused-
appellant at the United Coconut Planters Bank in Makati.
Analyn Olpindo met accused-appellant in Belgium. At that time, Analyn was
working in Canada but she went to Belgium to visit her in-laws.After meeting accused-
appellant, Analyn Olpindo called up her sister, Precila Olpindo, in the Philippines and
told her to meet accused-appellant upon the latters arrival in the Philippines because
accused-appellant can help process her documents for employment in Canada.
Precila Olpindo eventually met accused-appellant at the Expert Travel Agency on
September 7, 1994. Accused-appellant asked for the amount of $4,500.00, but Precila
was only able to give $2,500.00.
No evidence was adduced in relation to the complaint of Vilma Brina since she did
not testify in court.
Accused-appellant told Precila Olpindo and Vilma Brina that it was easier to
complete the processing of their papers if they start from Jakarta, Indonesia rather than
from Manila.Thus, on September 23, 1994, Precila Olpindo, Vilma Brina and accused-
appellant flew to Jakarta, Indonesia. However, accused-appellant returned to the
Philippines after two days, leaving behind Precila and Vilma.They waited for accused-
appellant in Jakarta but the latter never returned. Precila and Vilma eventually came
home to the Philippines on November 25, 1994.
When she arrived in the Philippines, Precila tried to get in touch with accused-
appellant at the Expert Travel Agency, but she could not reach her. Meanwhile, Maria
and Marceliano Tolosa also began looking for accused-appellant after she disappeared
with their money.
Elisa Campanianos of the Philippine Overseas Employment Agency presented a
certification to the effect that accused-appellant was not duly licensed to recruit workers
here and abroad.
In her defense, accused-appellant averred that, contrary to the prosecutions
allegations, she never represented to the complainants that she can provide them with
work abroad. She insisted that she was a marketing consultant and an international
trade fair organizer. In June 1994, she went to Paris, France to organize a trade
fair. There she met Priscilla Agoncillo, a domestic helper, and they became
friends.Priscilla asked her to assist her siblings, Maria and Marceliano, particularly in
the processing of their travel documents for France. Accused-appellant told Priscilla
that she can only help in the processing of travel documents and nothing more.It was
Priscilla who promised employment to Maria and Marceliano.She received money from
complainants not in the form of placement fees but for the cost of tickets, hotel
accommodations and other travel requirements.
According to accused-appellant, she met Analyn Olpindo in Belgium while she was
organizing a trade fair.They also became friends and it was Analyn who asked her to
help Precila.Just like in the case of Maria and Marceliano, accused-appellant explained
that her assistance shall only entail the processing of Precilas travel documents to
After trial on the merits, the trial court found accused-appellant guilty of illegal
recruitment and four (4) counts of estafa and correspondingly sentenced her as follows:

In sum, accused-appellant posits that the prosecution did not present a single
evidence to prove that she promised or offered any of the complainants jobs
abroad. Illegal recruitment is committed when two (2) elements concur: 1) that the
offender has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and 2) that the offender undertakes
either any activity within the meaning of recruitment and placement defined under
Article 13(b), or any prohibited practices enumerated under Article 34.[3]
Article 13(b), of the Labor Code provides, thus:
(b) Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment locally or abroad, whether for profit
or not:Provided, that any person or entity which, in any manner, offers or promises for
a fee employment to two or more persons shall be deemed engaged in recruitment and
To prove illegal recruitment, it must be shown that the accused-appellant gave
complainants the distinct impression that he had the power or ability to send
complainants abroad for work such that the latter were convinced to part with their
money in order to be employed.[4] To be engaged in the practice of recruitment and
placement, it is plain that there must at least be a promise or offer of an employment
from the person posing as a recruiter whether locally or abroad.
In the case at bar, accused-appellant alleges that she never promised nor offered any
job to the complainants.
We agree.
A perusal of the records reveals that not one of the complainants testified that accused-
appellant lured them to part with their hard-earned money with promises of jobs
abroad. On the contrary, they were all consistent in saying that their relatives abroad
were the ones who contacted them and urged them to meet accused-appellant who
would assist them in processing their travel documents. Accused-appellant did not
have to make promises of employment abroad as these were already done by
complainants relatives.Thus, in the cross-examination of Maria Tolosa de Cardena:

(5) In Criminal Case No. 94-140489 for Illegal Recruitment, accused-appellant Samina
Angeles is ACQUITTED for failure of the prosecution to prove her guilt beyond
reasonable doubt.


FACTS:Petitioner is Jocelyn Galera (GALERA), an American citizen who was recruited
from the United States of America by private respondent John Steedman, Chairman-
WPP Worldwide and Chief Executive Officer of Mindshare, Co., a corporation based in
Hong Kong, China, to work in the Philippines for private respondent WPP Marketing
Communications, Inc. (WPP), a corporation registered and operating under the laws of

Employment of GALERA with private respondent WPP became effective on September

1, 1999 solely on the instruction of the CEO and upon signing of the contract, without
any further action from the Board of Directors of private respondent WPP.

Four months had passed when private respondent WPP filed before the Bureau of
Immigration an application for petitioner GALERA to receive a working visa, wherein
she was designated as Vice President of WPP. Petitioner alleged that she was
constrained to sign the application in order that she could remain in the Philippines and
retain her employment.

On December 14, 2000, petitioner GALERA alleged she was verbally notified by private
respondent STEEDMAN that her services had been terminated from private respondent
WPP. A termination letter followed the next day. Thus, a complaint for illegal dismissal
was filed against WPP.

The LA held that WPP, Steedman, Webster, and Lansang liable for illegal dismissal and
damages. Arbiter Madriaga stated that Galera was not only illegally dismissed but was
also not accorded due process. The NLRC reversed the LA decision. The NLRC stressed
that Galera was WPPs Vice-President, and therefore, a corporate officer at the time she
was removed by the Board of Directors. Such being the case, the imperatives of law
require that we hold that the Arbiter below had no jurisdiction over Galeras case as,
again, she was a corporate officer at the time of her removal.

On appeal, the CA reversed the NLRC decision. It ruled that a person could be
considered a "corporate officer" only if appointed as such by a corporations Board of
Directors, or if pursuant to the power given them by either the Articles of Incorporation
or the By-Laws.


Does the LA have jurisdiction over the case?

HELD: Under Section 25 of the Corporation Code, the corporate officers are the
president, secretary, treasurer and such other officers as may be provided in the by-

An examination of WPPs by-laws resulted in a finding that Galeras appointment as a

corporate officer (Vice-President with the operational title of Managing Director of
Mindshare) during a special meeting of WPP's Board of Directors is an appointment to a
non-existent corporate office. WPPs by-laws provided for only one Vice-President. At
the time of Galeras appointment on 31 December 1999, WPP already had one Vice-
President in the person of Webster. Galera cannot be said to be a director of WPP also
because all five directorship positions provided in the by-laws are already occupied.
Finally, WPP cannot rely on its Amended By-Laws to support its argument that Galera
is a corporate officer. The Amended By-Laws provided for more than one Vice-President
and for two additional directors. Even though WPPs stockholders voted for the
amendment on 31 May 2000, the SEC approved the amendments only on 16 February
2001. Galera was dismissed on 14 December 2000. WPP, Steedman, Webster, and
Lansang did not present any evidence that Galeras dismissal took effect with the action
of WPP's Board of Directors.

Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction over
the present case.


WPPs dismissal of Galera lacked both substantive and procedural due process. Apart
from Steedman's letter dated 15 December 2000 to Galera, WPP failed to prove any just
or authorized cause for Galeras dismissal.

The law further requires that the employer must furnish the worker sought to be
dismissed with two written notices before termination of employment can be legally
effected: (1) notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employers decision to dismiss him. Failure to comply with the
requirements taints the dismissal with illegality. WPPs acts clearly show that Galeras
dismissal did not comply with the two-notice rule.


The employment permit must be acquired prior to employment.

The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking admission to
the Philippines for employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor."

Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to
sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. Hence, Galera is not entitled to
monetary awards. This ruling, however, does not bar Galera from seeking relief from
other jurisdictions.

This is a special civil action forcertiorariseeking the reversal of the 7 October 1994
decision[1] of the National Labor Relations Commission (NLRC) in NLRC Case No.
00-06-04136-93 (CA No. L-007370-94), which modified the 11 July 1994 decision[2]of the
Labor Arbiter by directing the reinstatement of private respondent Antonio D. Estrada,
the complainant, without loss of seniority rights and benefits.
Private respondent National Federation of Labor Unions (NAFLU), a co-
complainant in the labor case, is a labor union of which complainant is a member.
The factual and procedural antecedents are summarized in the decision of the Labor
Arbiter which we quote verbatim:
Complainant was first employed by respondent on 16 September 1991 as route helper
with the latest daily wage of P119.00. From 19 April 1993 up to 19 May 1993, for a
period of one (1) month, complainant went on absent without permission (AWOP).On
20 May 1993, respondent thru Mr. Rodolfo Valentin, sent a Memo to complainant, to
Please explain in writing within 24 hours of your receipt of this memo why no
disciplinary action should be taken against you for the following offense:
You were absent since April 19, 1993 up to May 19, 1993.
For your strict compliance.
In answer to the aforesaid memo, complainant explained:
Sa dahilan po na ako ay hindi nakapagpaalam sainyo [sic] dahil inuwi ko ang mga anak
ko sa Samar dahil ang asawa ko ay lumayas at walang mag-aalaga sa mga anak
ko. Kaya naman hindi ako naka long distance or telegrama dahil wala akong pera at
ibinili ko ng gamot ay puro utang pa.
Finding said explanation unsatisfactory, on 16 June 1993, respondent thru its Sales
Manager, Mr. Henry A. Chongco issued a Notice of Termination which reads:
We received your letter of explanation dated May 21, 1993 but we regret to inform you
that we do not consider it valid.You are aware of the company Rules and Regulations
that absence without permission for six (6) consecutive working days is considered
abandonment of work.
In view of the foregoing, the company has decided to terminate your employment
effective June 17, 1993 for abandonment of work.
Hence, this complaint.
Complainants contend that individual complainants dismissal was done without just
cause; that it was not sufficiently established that individual complainants absence from
April 19, 1993 to June 16, 1993 are unjustified; that the penalty of dismissal for such
violation is too severe; that in imposing such penalty, respondent should have taken
into consideration complainants length of service and as a first offender, a penalty less
punitive will suffice such as suspension for a definite period, (Position Paper,
Upon the other hand, respondent contends that individual complainant was dismissed
for cause allowed by the company Rules and Regulations and the Labor Code; that the
act of complainant in absenting from work for one (1) month without official leave is
deleterious to the business of respondent; that it will result to stoppage of production
which will not only destructive to respondents interests but also to the interest of its
employees in general; that the dismissal of complainant from the service is legal,
(Position Paper, respondent).[3]
The Labor Arbiter dismissed the complaint for lack of merit, citing the principle of
managerial control, which recognizes the employers prerogative to prescribe reasonable
rules and regulations to govern the conduct of his employees.The principle allows the
imposition of disciplinary measures which are necessary for the efficiency of both the
employer and the employees. In complainant's case, he persisted in not reporting for
work until 16 June 1993 notwithstanding his receipt of the memorandum requiring him
to explain his absence without approval.The Labor Arbiter, relying onShoemart, Inc. vs.
NLRC,[4]thus concluded:
Verily, it is crystal clear that individual complainant has indeed abandoned his
work. The filing of the complaint on 25 June 1993 or almost two (2) months from the
date complainant failed to report for work affirms the findings of this Office and
therefore, under the law and jurisprudence which upholds the right of an employer to
discharge an employee who incurs frequent, prolonged and unexplained absences as
being grossly remiss in his duties to the employer and is therefore, dismissed for cause,
(Shoemart, Inc. vs. NLRC, 176 SCRA 385).An employee is deemed to have abandoned
his position or to have resigned from the same, whenever he has been absent therefrom
without previous permission of the employer for three consecutive days or more.This
justification is the obvious harm to employers interest, resulting from [sic] the non-
availability of the workers services, (Supra).(underscoring supplied)[5]
and ruled that complainants termination from his employment was legal, the same with
just or authorized cause and due process.[6]
Complainant appealed to the NLRC, alleging that the immediate filing of a
complaint for illegal dismissal verily indicated that he never intended to abandon his
work, then citedPolicarpio v. Vicente Dy Sun, Jr.,[7]where the NLRC ruled that prolonged
absence does not, by itself, necessarily mean abandonment.Accordingly, there must be
a concurrence of intention and overt acts from which it can be inferred that the
employee is no longer interested in working. Complainant likewise invoked
compassion in the application of sanctions, as dismissal from employment brings
untold hardship and sorrows on the dependents of the wage earners. In his case, a
penalty less punitive than dismissal could have sufficed.
In the assailed decision[8]of 7 October 1994, the NLRC modified the Labor Arbiter's
decision and held that complainants dismissal was invalid for the following reasons:
Complainant-appellants prolonged absences, although unauthorized, may not amount
to gross neglect or abandonment of work to warrant outright termination of
employment.Dismissal is too severe a penalty.For one, the mere fact that complainant-
appellant is a first offender must be considered in his favor. Besides, it is generally
impossible for an employee to anticipate when he would be ill or compelled to attend to
some family problems or emergency like in the case at bar.
Reliance on the ruling enunciated in the cited case of Shoemart Inc. vs. National Labor
Relations, 176 SCRA 385, is quite misplaced because of the obvious dissimilarities of the
attendant circumstances in the said case vis-a-vis those obtaining in the case at
bar. Unlike in the aforecited Shoemart Case, herein complainant-appellant was not
dismissed for unauthorized absences and eventually reinstated anterior to his second
dismissal for the same offense nor was he given a second chance which he could have
Otherwise stated, the difference between the two cases greatly lies [in] the fact that
complainant in the Shoemart Case in the language of the Supreme Court was an
inveterate absentee who does not deserve reinstatement compared to herein
complainant-appellant who is afirstoffender[9]
The NLRC then decreed as follows:
PREMISES CONSIDERED, and [sic] the Decision of the Labor Arbiter, dated 11 July
1994 is hereby MODIFIED, by directing the reinstatement of complainant-appellant to
his former position without loss of seniority rights and other benefits, but without
backwages.The other findings in the appealed decision stand AFFIRMED.[10]
Petitioners motion for the reconsideration[11] was denied by the NLRC in its 7
December 1994 resolution.[12] Petitioner thus filed this special civil action contending
that the NLRC committed grave abuse of discretion in ordering complainant's
reinstatement, which in effect countenances the reinstatement of an employee who is
found guilty of excessive absences without prior approval. It further argued that the
NLRC failed to consider the rationale behind petitioners Rules and Regulations; that it
was deprived of its prerogative to enforce them; and that complainant's reinstatement
would adversely affect its business and send the wrong signals to its employees.
In its comment[13] for public respondent NLRC, the Office of the Solicitor General
maintained that dismissal from employment was too severe a penalty for a first time
offender like complainant. Although he violated petitioners rules and regulations, his
absences were justified:he had to bring his children to Samar, his home province, as his
wife deserted him.While that by itself might not excuse the failure to seek permission,
the Office of the Solicitor General submitted, however, that it would be at [sic] the
height of callousness if one, considering his plight under the circumstance[s], would not
give due consideration to [complainants] explanation.There has to be an exception.[14]
Applying Itogon-Suyoc Mines, Inc. v. NLRC,[15] the Office of the Solicitor General
recommended complainants reinstatement, which would be more harmonious to the
dictates of social justice and equity.It further emphasized that the reinstatement should
not be considered a condonation of complainants irresponsible behavior, rather, it must
be viewed as a mitigation of the severity of the penalty of dismissal. Accordingly, it
prays that this petition be dismissed.
In its reply,[16] petitioner disputed the application of Itogon-Suyoc because: (1) the
employee involved therein had been in the service for twenty-three years while
complainant herein had served petitioner for only two years; and (2) the offense
in Itogon-Suyoc was limited to a single act of high grading while complainant herein
committed a series ofunexcused absences.
We gave due course to the petition and dispensed with complainants comment.
The sole issue to be resolved is whether the NLRC committed grave abuse of
discretion in modifying the decision of the Labor Arbiter.
The answer must be in the negative.
A scrutiny of the facts discloses that complainants absence was precipitated by a
grave family problem as his wife unexpectedly deserted him and abandoned the
family. Considering that he had a full-time job, there was no one to whom he could
entrust the children and he was thus compelled to bring them to the province.It would
have been extremely difficult for him to have been husband and wife/father and
mother at the same time to the children in the metropolis. He was then under
emotional, psychological, spiritual and physical stress and strain. The reason for his
absence is, under these circumstances, justified. While his failure to inform and seek
petitioner's approval was an omission which must be corrected and chastised, he did
not merit the severest penalty of dismissal from the service.
Petitioners finding that complainant was guilty of abandonment is misplaced.
Abandonment as a just and valid ground for dismissal requires the deliberate,
unjustified refusal of the employee to resume his employment.Two elements must then
be satisfied: (1) the failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention to sever the employer-employee relationship. The
second element is the more determinative factor and must be evinced by overt acts.
[17]Likewise, the burden of proof is on the employer to show the employees clear and

deliberate intent to discontinue his employment without any intention of returning,

[18]mere absence is not sufficient.[19]These elements are not present here.First, as held

above, complainant's absence was justified under the circumstances. As to the second
requisite, we are not convinced that complainant ever intended to sever the employer-
employee relationship. Complainant immediately complied with the memo requiring
him to explain his absence, and upon knowledge of his termination, immediately sued
for illegal dismissal.These plainly refuted any claim that he was no longer interested in
returning to work.[20]Without doubt, the intention is lacking.
Moreover, petitioner failed to discharge the burden of proof that complainant was
guilty of abandonment. No evidence other than complainants letter explaining his
absence was presented. Needless to state, the letter did not indicate, in the least, that
complainant was no longer interested in returning to work. On the contrary,
complainant sought petitioners understanding. In declaring him guilty of
abandonment, petitioner merely relied on its Rules and Regulations which limited its
application to a six-day continuous absence, contrary to the purpose of the law.While
the employer is not precluded from prescribing rules and regulations to govern the
conduct of his employees, these rules and their implementation must be fair, just and
reasonable. It must be underscored that no less than our Constitution looks with
compassion on the workingman and protects his rights not only under a general
statement of a state policy,[21]but under the Article on Social Justice and Human Rights,
[22] thus placing labor contracts on a higher plane and with greater safeguards. Verily,

relations between capital and labor are not merely contractual.They are impressed with
public interest and labor contracts must, perforce, yield to the common good.[23]
We then conclude that complainants "prolonged" absence without approval does
not fall within the definition of abandonment and that his dismissal was
unjustified. While we do not decide here the validity of petitioner's Rules and
Regulations on continuous, unauthorized absences, what is plain is that it was wielded
with undue haste resulting in a deprivation of due process, thus not allowing for a
determination of just cause or abandonment. In this light, petitioner's dismissal was
illegal.This is not to say that his absence should go unpunished, as impliedly noted by
the NLRC in declining to award back wages.In the absence of the appropriate offense
which defines complainants infraction in the companys Rules and Regulations, equity
dictates that a penalty commensurate to the infraction be imposed.
WHEREFORE,the petition is hereby DISMISSED and the decision of the National
Labor Relations Commission in NLRC Case No. 06-04136-93 is hereby AFFIRMED.No
pronouncement as to costs.
In 1992, the Apex Mining Co., Inc. shut down its Masara mining operations Maco,
Davao Del Norte. As a result, the employment of Rizalino Alcosero and 260 other
employees were terminated. Alcosero et al were supervisors, security guards, and other
personnel for the said mining site.
In June 1992, Alcosero et al filed a labor case against Apex for unpaid 13th month pay
for the years 1990, 1991, and 1992 for a total of about P11.3 million. Apex admitted
liability for unpaid 13th month pay for the year 1990 only or for P3.2 million. The Labor
Arbiter then ordered Apex to pay. Apex made separate payments in December 1992 and
January 1993. Alcosero et al, however, signed a quitclaim when they received the
payment. The quitclaim used was the standard formprepared and issued by the DOLE
and were signedwith the knowledge of the labor arbiter.
But later, Alcosero et al asserted before the labor arbiter that Apex still has to pay the
13th month pays for 1991 and 1992. The Labor Arbiter ordered Apex to file a comment
which it repeatedly failed to do. The labor arbiter then issued an order mandating Apex
to pay the rest.
From the date of receipt of the decision, Apex, under NLRC rules, has 10 days to file an
appeal and pay the appeal bond. Apex appealed on the 7th day before the NLRC but
instead of paying an appeal bond (also required by the rules), Apex filed a motion to
reduce the appeal bond. The NLRC granted an extension and Apex filed a reduced
bond within the extended period.
Eventually, the NLRC ruled that since the employees signed the quitclaim, Apex was
released from the other claims. The employees did not file a motion for reconsideration
for the NLRC decision, instead, they immediately filed, through another petitioner,
Oscar Atup, a petition forcertiorariunder Rule 65 with the Supreme Court.
1. Is the filing of the petition forcertiorariunder Rule 65 by Atup et al proper?
2. Is the appeal by Apex to the NLRC perfected even though Apex did not pay the
appeal bond within the 10-day period?
3. Is the quitclaim valid?
1. No. The filing of a motion for reconsideration is a condition sine qua non to the
institution of a special civil action for certiorari. The rationale therefor is that the law
intends to afford the tribunal, board or office an opportunity to rectify the errors and
mistakes it may have lapsed into before resort to the courts of justice can be had. Atup
et als explanation that it is their quest for justice which prompted them to avail of
Rule 65 is not a valid ground to dispense of the procedural requirement.
2. Yes. As a general rule, in labor cases where the employer has lost and wishes to file an
appeal, he must post an appeal bond equivalent to the monetary award (excluding
award for moral and exemplary damages). The period of appeal and posting of bond
must be within 10 days from receipt of the decision the posting of bond perfects the
appeal. However, if the appellant filed a motion to reduce the appeal bond, the appeal is
nevertheless perfected if the appellant pays within the extended period even if it is
already beyond the original 10-day period prescribed by the rules. In short, the 10-day
rule may be relaxed depending on the merits of the case.
Side issue:Does the Labor Arbiter still have jurisdiction?
Yes, the LA retains jurisdictionover the case until the NLRC has acted on the motion to
reduce the appeal bond and appellant has filed the bond as fixed by the NLRC.
3. Yes. While quitclaims executed by employees are commonly frowned upon as
contrary to public policy and are ineffective to bar claims for the full measure of the
employees legal rights, there are legitimate waivers that represent a voluntary and
reasonable settlement of laborers claims which should be respected by the courts as the
law between the parties.
Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the
parties and may not later be disowned simply because of a change of mind.But where it
is shown that the person making the waiver did so voluntarily, with full understanding
of what he was doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and binding undertaking.
In this case, there is no evidence that Apex pressured the employees into signing the
quitclaim. In fact, the employees were assisted by the DOLE and the signing was with
the knowledge of the labor arbiter. Further, there was no qualification in the quitclaim
which provides that it only covers the liabilities of Apex for the year 1990.


Petitioners numbering 43 aredeafmuteswho were hired on various periods from 1988
to 1993 by respondent Far East Bank and Trust Co. as Money Sorters and Counters
through a uniformly worded agreement called Employment Contract for Handicapped
Workers. Subsequently, they are dismissed.
Petitioners maintain that they should be considered regular employees, because their
task as money sorters and counters was necessary and desirable to the business of
respondent bank.They further allege that their contracts served merely to preclude the
application of Article 280 and to bar them from becoming regular employees.
Private respondent, on the other hand, submits that petitioners were hired only as
special workers and should not in any way be considered as part of the regular
complement of the Bank.[12]Rather, they were special workers under Article 80 of
the Labor Code.
Issue:WON petitioners have become regular employees.
The uniform employment contracts of the petitioners stipulated that they shall be
trained for a period of one month, after which the employer shall determine whether or
not they should be allowed to finish the 6-month term of the contract.Furthermore, the
employer may terminate the contract at any time for a just and reasonable
cause. Unless renewed in writing by the employer, the contract shall automatically
expire at the end of the term.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the
hiring of others lead to the conclusion that their tasks were beneficial and necessary to
the bank. More important, these facts show that they were qualified to perform the
responsibilities of their positions. In other words,their disability did not render them
unqualified or unfit for the tasks assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as
aqualifiedable-bodied person.Section 5 of the Magna Carta provides:
Section 5. Equal Opportunity for Employment.No disabled person shall be denied
access to opportunities for suitable employment. A qualified disabled employee shall
be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta accords
them the rights of qualified able-bodied persons, they are thus covered by Article 280 of
the Labor Code, which provides:
ART. 280. Regular and Casual Employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or
trade of the employer, x x x
The primary standard, therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the
usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection
can be determined by considering the nature of the work performed and its relation to
the scheme of the particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity
to the business.Hence, the employment is considered regular, but only with respect to
such activity, and while such activity exists.
Respondent bank entered into the aforesaid contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of them worked from
1988 to 1993. Verily, the renewal of the contracts of the handicapped workers and the
hiring of others lead to the conclusion that their tasks were beneficial and necessary to
the bank. More important, these facts show that they were qualified to perform the
responsibilities of their positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
Without a doubt,the task of counting and sorting bills is necessary and desirable to the
business of respondent bank. With the exception of sixteen of them, petitioners
performed these tasks for more than six months.
Petition granted



Complainant, Corazon Jamer was employed on February 10, 1976 as a Cashier at Joy
Mart, a sister company of Isetann. After two (2) years, she was later on promoted to the
position of counter supervisor. She was transferred to Isetann, Carriedo Branch, as a
money changer. In 1982 she was transferred to the Cubao Branch of Isetann, as a money
changer, till her dismissal on August 31, 1990.
Complainant Cristina Amortizado, on the other hand, was employed also at Joy Mart in
May, 1977 as a sales clerk. In 1980 she was promoted to the position as counter cashier.
Thereafter, she was transferred to Young Un Department Store as an assistant to the
money changer. Later on, or in 1985, she transferred to Isetann, Cubao Branch where
she worked as a Store Cashier till her dismissal on August 31, 1990.
Both complainants were receiving a salary ofP4,182.00 for eight (8) hours work at the
time of their dismissal.
Respondent Isetann Department Store on the other hand. This complaint arose from the
dismissal of the complainants by the respondents. They were both dismissed on August
31, 1990 on the alleged ground of dishonesty in their work as Store Cashiers.
Complainants (sic) function as Store Cashiers is to accumulate, at the end of daily
operations, the cash sales receipts of the selling floor cash register clerks. At the close of
business hours, all the cash sales of the floor cash register clerks are turned over by
them to the Store Cashiers, complainants herein, together with the tally sheets prepared
by the cash register clerks. Thereafter, complainants will reconcile the cash sales with
the tally sheets to determine shortages or coverages(sic) and deposit the same with the
bank depositor(sic) of respondents company. Thereafter, the recorded transactions are
forwarded to the main branch of respondents company at Carriedo for counter-
On July 16, 1990, complainants discovered a shortage ofP15,353.78. It was complainant
Corazon Jamer who first discovered the shortage. In fact at first, she thought that it was
merely a P1,000.00 shortage but when she reconciled the cash receipts, from the cash
register counters, with the tally sheets and the actual money on hand, the shortage
amounted to P15,353.78. She informed her co-store cashier, complainant Cristina
Amortizado, about the shortage. Cristina Amortizado also reconciled and re-counted
the sale previous to July 16, 1990 and she also confirmed that there was a discrepancy or
a shortage of P15,353.78.. They did not, (sic) immediately report the shortage to
management hoping to find the cause of the shortage but to no avail they failed to
reconcile the same. Hence, they had no other alternative but to report the same to the
management on July 17, 1990.
Complainants, together with another Store Cashier, Lutgarda Inducta, were asked to
explain and they submitted their respective written explanations for the shortage
ofP15,353.78. and theP450.00 under deposit last July 14, 1990.
Respondents placed both complainants and their co-store cashier Lutgarda Inducta
under preventive suspension for the alleged shortages. Thereafter, respondents
conducted an administrative investigation. Finding the explanation of the complainants
to be unsatisfactory, respondent dismissed the complainants from the service on August
31, 1990. Aggrieved and not satisfied with the decision of management terminating
their services, complainant instituted this present action on September 26, 1990 for
illegal dismissal praying for reinstatement with payment of backwages and other
On July 23, 1991, Labor Arbiter Nieves V. de Castro, to whom the instant contoversy
was originally assigned, rendered a decision[9]in favor of herein petitioners, finding that
petitioners had been illegally dismissed, the dispositive portion of which reads:
WHEREFORE, respondents are hereby directed to reinstate complainants to service
effective August 1, 1991 with full backwages and without loss of seniority rights.
Expectedly, respondents Isetann and John Go appealed the aforesaid decision to the
NLRC. On January 31, 1992, the NLRC issued a resolution[11]remanding this case to the
NLRC National Capital Region Arbitrattion Branch for further proceedings in the
following manner:
WHEREFORE, premises considered, the challenged decision is hereby SET ASIDE and
The entire records of this case is hereby remanded to the NLRC National Capital Region
Arbitration Branch for further proceedings.
Consequently, the present case was then re-raffled to Labor Arbiter Pablo C. Espiritu, Jr.
After a full-blown trial, the said Labor Arbiter found for the petitioners and declared
that there was no justification, whether in fact or in law, for their dismissal. The decretal
part of the decision[13]dated March 31, 1993, states:
WHEREFORE, above premises considered, judgement(sic) is hereby rendered finding
the dismissal of complainants, Cristina Amortizado and Corazon Jamer to be illegal and
concomitantly, (r)espondents are hereby ordered to pay complainants, Corazon Jamer
the amount of P125,460.00 and Cristina Amortizado the amount of P125,460.00,
representing full backwages from the time of their dismissal (August 31, 1990) till actual
or payroll reinstatement at the option of the respondent (computed until promulgation
Dissatisfied over the decision of the Labor Arbiter which struck private respondents
as grossly contrary to the evidence presented, the herein private respondents once again
appealed to the NLRC. And, as earlier stated, the NLRC rendered the challenged
decision[15] on November 12, 1993, vacating the decision of the Labor Arbiter and
entering a new one dismissing the petitioners complaint.
ISSUE: Hence, this petition wherein the main issue to be resolved is whether NLRC
committed grave abuse of discretion in finding that petitioners were validly dismissed
on the ground of loss of trust and confidence.
Petitioners asseverate that respondent NLRC committed a grave abuse of discretion
when it reversed the findings of facts of the Labor Arbiter.
We find said submissions untenable.
On the merits, we find and so hold that substantial evidence exists to warrant the
finding that petitioners were validly dismissed for just cause and after observance of
due process.
Under the Labor Code, as amended, the requirements for the lawful dismissal of an
employee by his employer are two-fold: the substantive and the procedural. Not only
must the dismissal be for a valid or authorized cause as provided by law (Articles 282,
283 and 284, of the Labor Code, as amended), but the rudimentary requirements of due
process, basic of which are the opportunity to be heard and to defend himself, must be
observed before an employee may be dismissed.[23]
With respect to the first requisite, Article 282 of the Labor Code, as amended,
ART. 282. Termination by Employer.- An employer may terminate an employment for
any of the following causes:
(a)Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representativein connection with his work;
(b)Gross and habitual neglect by the employee of his duties;
(c)Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representative;
(e)Other causes analogous to the foregoing. (Italics supplied)
In the instant case, we find no difficulty in agreeing with the findings of the public
respondent that the herein petitioners were guilty of acts of dishonesty by incurring
several occurrences of shortages in the amounts of P15,353.78, P1,000.00, P450.00
andP70.00 which they failed to turnover and account for/and in behalf of respondent
With regard to the several occurrences of shortages of the amounts
ofP15,353.78,P1,000.00,P450.00 andP70.00 , the Labor Arbiter has failed to consider the
fact that complainants-appellees were accorded the chance to explain their side as to the
shortages and that they have utterly failed to do so providing basis for their valid
dismissal. This fact has been established by the respondents-appellants in the findings
of the Committee on Discipline on Exhibits 3, 3-A to 3-D, as follows:
From the foregoing premises, it is crystal clear that the failure of petitioners to
report the aforequoted shortages and overages to management as soon as they arose
resulted in the breach of the fiduciary trust reposed in them by respondent company,
thereby causing the latter to lose confidence in them. This warrants their dismissal.
The NLRC, therefore, did not act with grave abuse of discretion in declaring that
petitioners were legally dismissed from employment. The failure of petitioners to report
to management the aforementioned irregularities constitute fraud or willful breach of
the trust reposed in them by their employer or duly authorized representative one of
the just causes in terminating employment as provided for by paragraph (c), Article 282
of the Labor Code, as amended.
The cause of social justice is not served by upholding the interest of petitioners in
disregard of the right of private respondents. Social justice ceases to be an effective
instrument for the equalization of the social and economic forces by the State when it is
used to shield wrongdoing.[29] While it is true that compassion and human
consideration should guide the disposition of cases involving termination of
employment since it affects ones source or means of livelihood, it should not be
overlooked that the benefits accorded to labor do not include compelling an employer
to retain the services of an employee who has been shown to be a gross liability to the
employer. It should be made clear that when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent economic inequality between labor and
management. The intent is to balance the scale of justice; to put up the two parties on
relatively equal positions. There may be cases where the circumstances warrant
favoring labor over the interests of management but never should the scale be so tilted
if the result is an injustice to the employer, Justicia remini regarda est (Justice is to be
denied to none).[30]
Thus, this Court has held time and again, in a number of decisions,[31]that:
Loss of confidence is a valid ground for dismissing an employee and proof beyond
reasonable doubt of the employees misconduct is not required to dismiss him on this
charge. It is sufficient if there is some basis for such loss of confidence or if the employer
has reasonable ground to believe or to entertain the moral conviction that the employee
concerned is responsible for the misconduct and that the nature of his participation
therein rendered him absolutely unworthy of the trust and confidence demanded by his
Parenthetically, the fact that petitioners Jamer and Amortizado had worked for
respondent company for fourteen (14) and thirteen (13) years, respectively, should be
taken against them.
We reiterate the rule that in cases of dismissal for breach of trust and confidence,
proof beyond reasonable doubt of the employees misconduct is not required. It is
sufficient that the employer had reasonable ground to believe that the employees are
responsible for the misconduct which renders him unworthy of the trust and confidence
demanded by their position.[40] In the case at hand, it cannot be doubted that
respondents succeeded in discharging its burden of proof.
As regards to the second requisite, the law requires that the employer must furnish
the worker sought to be dismissed with two (2) written notices before termination may
be validly effected: first, a notice apprising the employee of the particular acts or
omission for which his dismissal is sought and, second, a subsequent notice informing
the employee of the decision to dismiss him.[41]