Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 149629             October 4, 2004

ALAN D. GUSTILO, Petitioner, vs.WYETH PHILIPPINES, INC., FILEMON VERZANO, JR., AURELIO MERCADO and EDGAR EPILEPSIA, respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

At bar is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated January 24, 2001 and Resolution2 dated August 10, 2001 rendered by the Court of Appeals in CA-G.R. SP No. 57545, entitled "Wyeth Phils., Inc. and/or Filemon Verzano, Jr., Aurelio Mercado and Edgar Epilepsia vs. National Labor Relations Commission (Fourth Division) and Alan Gustilo."

The facts as borne by the records are:

On November 7, 1990, Alan D. Gustilo, petitioner, was employed by Wyeth Philippines, Inc., respondent company, as a pharmaceutical territory manager. Eventually, he was placed in charge of its various branches in Metro Bacolod City and Negros Occidental. To ensure a profitable sale of its pharmaceutical products, he performed various functions, such as visiting hospitals, pharmacies, drugstores and physicians concerned; preparing and submitting his pre-dated itinerary; and submitting periodic reports of his daily call visits, monthly itinerary, and weekly locator and incurred expenses.

Petitioner’s employment records show that respondent company, on various dates, reprimanded and suspended him for habitually neglecting to submit his periodic reports. On November 28, 1994, respondent company sent petitioner a notice reprimanding him for submitting late his weekly expense report. Again, on July 5, 1995, he was late in submitting the same report, prompting respondent company to suspend him for five (5) days. Still, petitioner repeatedly incurred delay in submitting his daily call reports dated October 16-20, 1995, October 23-27, 1995, November 6-10, 1995, and November 13-17, 1995. He did not submit his daily call reports for the period from November 20 to 24, 1995. As a consequence, respondent company sent petitioner another notice suspending him for fifteen (15) days or from January 2 to 22, 1996.

Meantime, respondent company, after integrating its pharmaceutical products with Lederle, a sister company, conducted a nationwide on-the-job training of sales personnel. With this development, petitioner was assigned in charge of promoting four (4) Lederle pharmaceutical products.

Subsequently, petitioner submitted to respondent company a plan of action dated February 6, 1996 where he committed to make an average of 18 daily calls to physicians; submit promptly all periodic reports; and ensure 95% territory program performance for every cycle.

However, petitioner failed to achieve the above objectives, prompting respondent company to send him two (2) separate notices dated February 20, 1996 and April 10, 1996, charging him with willful violation of company rules and regulations and directing him to submit a written explanation.

In his explanation, petitioner stated that he was overworked and an object of reprisal by his immediate supervisor.

On May 22, 1996, upon recommendation of a Review Panel, respondent company terminated the services of petitioner.

Aggrieved, petitioner, on June 21, 1996, filed with the Regional Arbitration Branch No. VI at Bacolod City a complaint against respondent company for illegal suspension, illegal dismissal and payment of allowances, other monetary benefits, damages and attorney’s fees, docketed as RAB Case No. 06-10267-96. Impleaded also as party respondents were Filemon Verzano, Jr., petitioner’s immediate supervisor, and Aurelio Mercado and Edgar Epilepsia, corporate officers of respondent company.

On March 5, 1998, the Labor Arbiter rendered a Decision holding that petitioner was illegally dismissed from employment and ordering respondents company and Verzano, jointly and severally, to pay him P991,157.90 representing his backwages, separation pay, car reimbursement, damages and attorney’s fees. The dispositive portion of the Decision reads:

"WHEREFORE, premises considered, judgment is hereby rendered against respondent company WYETH PHILS., INC. and respondent FILEMON VERZANO, JR., ordering them to pay jointly and severally, complainant ALAN D. GUSTILO, the following:

1. Backwages ………………………. P 676,162.64

2. Separation pay ……………………. 106,890.00

3. Car reimbursement ………………. 68,000.00

4. Moral damages ……………………. 25,000.00

5. Exemplary damages ……………. 25,000.00

6. Attorney’s fees ……………………. 90,105.26

Grand Total ……………………………. P 991,157.90

Respondents are further directed to deposit the total amount of NINE HUNDRED NINETY ONE THOUSAND ONE HUNDRED FIFTY SEVEN PESOS and 90/100 (P991,157.90) with the Cashier, this Arbitration Branch, within ten (10) days from receipt hereof, for proper disposition.

SO ORDERED."

Respondents then appealed to the National Labor Relations Commission (NLRC), Fourth Division at Cebu City.

On August 13, 1999, the NLRC (Fourth Division) promulgated a Decision affirming with modification the Labor Arbiter’s Decision in the sense that respondent company is ordered to reinstate petitioner, or in lieu of reinstatement, to pay his separation benefits, thus:

"WHEREFORE, premises considered, the appeal filed by complainant is GRANTED and that of respondents is DENIED. The Decision of Labor Arbiter Reynaldo J. Gulmatico dated March 5, 1998 is MODIFIED, to wit:

Respondents are ordered:

1. To reinstate complainant Alan Gustilo to his former position without loss of seniority rights and other privileges and to pay his full backwages, inclusive of allowances and other benefits, or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

If reinstatement is no longer feasible, complainant may opt to receive his separation pay equivalent to at least one month salary for every year of service, in lieu of reinstatement.

2. To refund, jointly and severally, complainant in the amount of P4,190.00; and

3. To pay 10% of the total monetary award as attorney’s fees.

SO ORDERED."

Respondents filed their motion for reconsideration but was denied by the NLRC in a Resolution dated December 28, 1999.

As a consequence, respondents filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary restraining order and a writ of preliminary injunction.

On January 24, 2001, the Appellate Court rendered a Decision reversing the NLRC’s Decision and dismissing petitioner’s complaint for illegal dismissal, but awarding him separation pay considering the mitigating "factors" of length of service, the loyalty awards he received, and respondent Verzano’s "grudge" against him.

The Court of Appeals held:

"Respondent Gustilo cannot deny the numerous violations of company rules during his employment with Wyeth. Gustilo’s 201 file reveal the following:

1. On February 2, 1993, he was suspended for falsifying, tampering and/or altering the gasoline receipt (Annex ‘12’, Wyeth’s Position Paper, Rollo, p. 142).

2. On June 28, 1993, he was warned for false reporting of his trade outlet calls (Annex ‘13’, Wyeth’s Position Paper, Rollo, p. 143).

3. On September 8, 1993, he was guilty of unauthorized availment of sick leaves, emergency leaves, vacation leaves and unauthorized absences (Annex ‘14’, Wyeth’s Position Paper, Rollo, p. 144).

4. On November 28, 1994, he was cited for his repeated delay in submitting his expense reports (Annex ‘4’, Wyeth’s Position Paper, Rollo, p. 132).

5. On July 10, 1995, he was cited for failure to submit his expense report on time (Annex ‘5’, Wyeth’s Position Paper, Rollo, p. 133).

6. On September 26, 1995, he was charged with breach of the rule on submission of required reports (Annex ‘8’, Wyeth’s Position Paper, Rollo, p. 136).

7. On November 28, 1995, he was again cited for unauthorized absence on October 19, 1995 and other violations of company rules as contained in a letter of the same date (Annex ‘9’, Wyeth’s Position Paper, Rollo, p. 137).

From 1993 up to 1995, respondent has repeatedly guaranteed not to repeat transgressing company rules under pain of termination, but to no avail (Letter dated January 16, 1993; Rollo, p. 141; Internal Memo dated February 1, 1993; Rollo, p. 142; Internal Memo dated July 11, 1995; Rollo, p. 134; Plan of Action dated February 6, 1996; Rollo, p. 147). It has become clear that respondent Gustilo is a habitual offender whose numerous contraventions of company rules has left Wyeth with no choice but to terminate him based on Article 282 of the Labor Code, gross and habitual neglect by the employee of his duties, being a valid cause for termination.

While dismissal is proper, the Court however considers the length of service of respondent Gustilo with Wyeth, the loyalty awards he received and the grudge

of petitioner Verzano, Jr. as mitigating factors. The Court is inclined to reinstate respondent Gustilo to his former position without backwages and other benefits. However in view of the strained relationship between respondent Gustilo and petitioner Verzano, Jr., the Court rules to award separation pay to respondent Gustilo in the amount of P106,890.00.

In view of our finding that there are valid causes for dismissal, it follows that the award for payment of backwages, damages and attorney’s fees has to be recalled for want of basis.

Being uncontested, the refund of car expenses in the amount of P4,190.00 to respondent Gustilo and payment of P68,000.00 representing the difference between the KIA car, the supposed car and the NISSAN LEC have to be maintained.

In view of our finding that there was a valid dismissal, petitioners Aurello Mercado and Edgar Epilepsia, as a consequence, cannot be held personally liable to respondent Gustilo. Even assuming ex grati argumenti that termination is illegal, corporate officers like petitioners Mercado and Epilepsia are mere agents of Wyeth and acts done in good faith and in representation or on behalf of said company and within the scope of their authority cannot give rise to any liability on their part as said acts are considered corporate acts.

x x x

WHEREFORE, the subject Decision and Resolution, promulgated on August 13, 1999 and December 28, 1999, respectively, by respondent National Labor Relations Commission are SET ASIDE and REVERSED and a new judgment is rendered, as follows:

1. The Complaint for illegal dismissal against petitioners Wyeth Philippines, Inc., Aurelio Mercado and Edgar Epilepsia is dismissed for lack of merit;

2. Petitioner Wyeth Philippines, Inc. is ordered to pay respondent Alan Gustilo P106,890.00 as separation pay;

3. Wyeth Philippines, Inc. is ordered to pay respondent Gustilo P68,000.00 representing the difference between the prices of the supposed car, KIA and the NISSAN LEC, and P4,190.00 equivalent to the cost of one piece of tire, headlight and tire wrench.

SO ORDERED."

On February 16, 2001, petitioner filed a motion for reconsideration, but was denied by the Appellate Court in a Resolution dated August 10, 2001.

Hence, this petition for review on certiorari.

Petitioner, in the present petition, contends that he was illegally dismissed from the service by respondent company. Hence, he should be reinstated and paid his full backwages and other benefits and privileges.

In Philippine Journalists, Inc. vs. Mosqueda,3 we reiterated the well-established rule that "findings of fact by the Court of Appeals are conclusive on the parties and are not reviewable by this Court. x x x. The rationale behind this doctrine is that review of the findings of fact by the Court of Appeals is not a function that the Supreme Court normally undertakes."

Here, the Court of Appeals unequivocally ruled that "Gustilo (herein petitioner) is a habitual offender whose numerous contraventions of company rules has left Wyeth (herein respondent) with no choice but to terminate his services x x x."

Evidently, there is no cogent reason why we should not accord deference and finality to the Appellate Court’s factual findings which are supported by substantial evidence as shown by the records.

In Family Planning Organization of the Philippines, Inc. vs. NLRC,4 we held:

"It is the employer's 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 one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the preemptory dismissal of the employee."

Records show the various violations of respondent company’s rules and regulations committed by petitioner. His dismissal from the service is, therefore, in order. Indeed, in Piedad vs. Lanao del Norte Electric Cooperative, Inc.,5 we ruled that a series of irregularities when put together may constitute serious misconduct, which under Article 282 of the Labor Code, as amended,6 is a just cause for dismissal.

But the Court of Appeals still awarded him separation pay of P106,890.00 by reason of several mitigating factors mentioned in its assailed Decision. The issue for our determination now is whether he is entitled to such an award.

The rule embodied in the Omnibus Rules Implementing the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation pay.7 However, in PLDT vs. NLRC and Abucay,8 we held:

"x x x henceforth, separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character . Where the reason for the valid dismissal is, x x x an offense involving moral turpitude x x x, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice."

Similarly, in Telefunken Semiconductors Employees Union-FFW vs. Court of Appeals,9 we ruled:

"The same view holds with respect to the award of financial assistance or separation pay. The assumption for granting financial assistance or separation pay, which is, that there is an illegally dismissed employee and that illegally dismissed employee would otherwise have been entitled to reinstatement, is not present in the case at bench. Here, the striking workers have been validly dismissed ‘Where the employee’s dismissal was for a just cause, it would be neither fair nor just to allow the employee to recover something he has not earned or could not have earned. This being so, there can be no award of backwages, for it must be pointed out that while backwages are granted on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal, where private respondent’s dismissal is for just cause, as in the case herein, there is no factual or legal basis to order the payment of backwages; otherwise, private respondent would be unjustly enriching herself at the expense of petitioners.’ (Cathedral School of Technology vs. National Labor Relations Commission, 214 SCRA 551). Consequently, granting financial assistance to the strikers is clearly a ‘specious inconsistency’ (supra). We are of course aware that financial assistance may be allowed as a measure of social justice in exceptional circumstances and as an equitable concession. We are likewise mindful that financial assistance is allowed only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character (Zenco Sales, Inc. vs. National Labor Relations Commission, 234 SCRA 689). x x x."

In the case at bar, we find no exceptional circumstances to warrant the grant of financial assistance or separation pay to petitioner. It bears stressing that petitioner did not only violate company disciplinary rules and regulations. As found by the Court of Appeals, he falsified his employment application form by not stating therein that he is the nephew of Mr. Danao, respondent Wyeth’s Nutritional Territory Manager. Also, on February 2, 1993, he

was suspended for falsifying a gasoline receipt. On June 28, 1993, he was warned for submitting a false report of his trade outlet calls. On September 8, 1993, he was found guilty of unauthorized availment of sick, vacation and emergency leaves. These infractions manifest his slack of moral principle. In simple term, he is dishonest.

Neither can petitioner find reliance on the policy of social justice. As aptly held by this Court in the same case of Philippine Long Distance Telephone vs. NLRC and Abucay,10 "[T]hose who invoke social justice may do so only if their hands are clean and their motives blameless x x x." Here, petitioner failed to measure up to such requirement.

In sum, we find that petitioner was legally dismissed from employment and is, therefore, not entitled to reinstatement or an award of separation pay or other benefits. Unfortunately, respondent company did not interpose an appeal to this Court. Hence, no affirmative relief can be extended to it. A party in a case who did not appeal is not entitled to any affirmative relief. 11

Thus, respondent company has to comply with the Appellate Court’s mandate to grant petitioner his separation pay.

WHEREFORE, the petition is DENIED. Costs against petitioner.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-26298 September 28, 1984

CMS ESTATE, INC., petitioner, vs.SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, respondents.

Sison Dominguez & Cervantes for petitioner.

The Legal Counsel for respondent SSS.

 

CUEVAS, J.:

This appeal by the CMS Estate, Inc. from the decision rendered by the Social Security Commission in its Case No. 12, entitled "CMS Estate, Inc. vs. Social Security System, declaring CMS subject to compulsory coverage as of September 1, 1957 and "directing the Social Security System to effect such coverage of the petitioner's employees in its logging and real estate business conformably to the provision of Republic Act No. 1161, as amended was certified to Us by the defunct Court of Appeals 1 for further disposition considering that purely questions of law are involved.

Petitioner is a domestic corporation organized primarily for the purpose of engaging in the real estate business. On December 1, 1952, it started doing business with only six (6) employees. It's Articles of Incorporation was amended on June 4, 1956 in order to engage in the logging business. The Securities and Exchange Commission issued the certificate of filing of said amended articles on June 18, 1956. Petitioner likewise obtained an ordinary license from the Bureau of Forestry to operate a forest concession of 13,000 hectares situated in the municipality of Baganga, Province of Davao.

On January 28, 1957, petitioner entered into a contract of management with one Eufracio D. Rojas for the operation and exploitation of the forest concession The logging operation actually started on April 1, 1957 with four monthly salaried employees. As of September 1, 1957, petitioner had 89 employees and laborers in the logging operation. On December 26, 1957, petitioner revoked its contract of management with Mr. Rojas.

On August 1, 1958, petitioner became a member of the Social Security System with respect to its real estate business. On September 6, 1958, petitioner remitted to the System the sum of P203.13 representing the initial premium on the monthly salaries of the employees in its logging business. However, on October 9, 1958, petitioner demanded the refund of the said amount, claiming that it is not yet subject to compulsory coverage with respect to its logging business. The request was denied by respondent System on the ground that the logging business was a mere expansion of petitioner's activities and for purposes of the Social Security Act, petitioner should be considered a member of the System since December 1, 1952 when it commenced its real estate business.

On November 10, 1958, petitioner filed a petition with the Social Security Commission praying for the determination of the effectivity date of the compulsory coverage of petitioner's logging business.

After both parties have submitted their respective memoranda, the Commission issued on January 14, 1960, Resolution No. 91, 2 the dispositive portion of which reads as follows:

Premises considered, the instant petition is hereby denied and petitioner is hereby adjudged to be subject to compulsory coverage as of Sept. 1, 1957 and the Social Security System is hereby directed to effect such coverage of petitioner's employees in its logging and real

estate business conformably to the provisions of Rep. Act No. 1161, as amended.

SO ORDERED.

Petitioner's motion for reconsideration was denied in Resolution No. 609 of the Commission.

These two (2) resolutions are now the subject of petitioner's appeal. Petitioner submits that respondent Commission erred in holding —

(1) that the contributions required of employers and employees under our Social Security Act of 1954 are not in the nature of excise taxes because the said Act was allegedly enacted by Congress in the exercise of the police power of the State, not of its taxing power;

(2) that no contractee — independent contractor relationship existed between petitioner and Eufracio D. Rojas during the time that he was operating its forest concession at Baganga, Davao;

(3) that a corporation which has been in operation for more than two years in one business is immediately covered with respect to any new and independent business it may subsequently engage in;

(4) that a corporation should be treated as a single employing unit for purposes of coverage under the Social Security Act, irrespective of its separate, unrelated and independent business established and operated at different places and on different dates; and

(5) that Section 9 of the Social Security Act on the question of compulsory membership and employers should be given a liberal interpretation.

Respondent, on the other hand, advances the following propositions, inter alia:

(1) that the Social Security Act speaks of compulsory coverage of employers and not of business;

(2) that once an employer is initially covered under the Social Security Act, any other business undertaken or established by the same employer is likewise subject in spite of the fact that the latter has not been in operation for at least two years;

(3) that petitioner's logging business while actually of a different, distinct, separate and independent nature from its real estate business should be considered as an operation under the same management;

(4) that the amendment of petitioner's articles of incorporation, so as to enable it to engage in the logging business did not alter the juridical personality of petitioner; and

(5) the petitioner's logging operation is a mere expansion of its business activities.

The Social Security Law was enacted pursuant to the policy of the government "to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall provide protection against the hazards of disability, sickness, old age and death" (Sec. 2, RA 1161, as amended). It is thus clear that said enactment implements the general welfare mandate of the Constitution

and constitutes a legitimate exercise of the police power of the State. As held in the case of Philippine Blooming Mills Co., Inc., et al. vs. SSS 3 —

Membership in the SSS is not a result of bilateral, concensual agreement where the rights and obligations of the parties are defined by and subject to their will, RA 1161 requires compulsory coverage of employees and employers under the System. It is actually a legal imposition on said employers and employees, designed to provide social security to the workingmen. Membership in the SSS is therefore, in compliance with the lawful exercise of the police power of the State, to which the principle of non-impairment of the obligation of contract is not a proper defense.

xxx xxx xxx

The taxing power of the State is exercised for the purpose of raising revenues. However, under our Social Security Law, the emphasis is more on the promotion of the general welfare. The Act is not part of out Internal Revenue Code nor are the contributions and premiums therein dealt with and provided for, collectible by the Bureau of Internal Revenue. The funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the hazards provided by the law occur.

All that is required of appellant is to make monthly contributions to the System for covered employees in its employ. These contributions, contrary to appellant's contention, are not 'in the nature of taxes on employment.' Together with the contributions imposed upon employees and the Government, they are intended for the protection of said employees against the hazards of disability, sickness, old age and death in line with the constitutional mandate to promote social justice to insure the well-being and economic security of all the people. 4

Because of the broad social purpose of the Social Security Act, all doubts in construing the Act should favor coverage rather than exemption.

Prior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled to become a member of the System, he must have been in operation for at least two years and has at the time of admission at least six employees. It should be pointed out that it is the employer, either natural, or judicial person, who is subject to compulsory coverage and not the business. If the intention of the legislature was to consider every venture of the employer as the basis of a separate coverage, an express provision to that effect could have been made. Unfortunately, however, none of that sort appeared provided for in the said law.

Should each business venture of the employer be considered as the basis of the coverage, an employer with more than one line of business but with less than six employees in each, would never be covered although he has in his employ a total of more than six employees which is sufficient to bring him within the ambit of compulsory coverage. This would frustrate rather than foster the policy of the Act. The legislative intent must be respected. In the absence of an express provision for a separate coverage for each kind of business, the reasonable interpretation is that once an employer is covered in a particular kind of business, he should be automatically covered with respect to any new name. Any interpretation which would defeat rather than promote the ends for which the Social Security Act was enacted should be eschewed. 5

Petitioner contends that the Commission cannot indiscriminately combine for purposes of coverage two distinct and separate businesses when one has not yet been in operation for more than two years thus rendering nugatory the period for more than two years thus rendering nugatory the period of stabilization fixed by the Act. This contention lacks merit

since the amendatory law, RA 2658, which was approved on June 18, 1960, eliminated the two-year stabilization period as employers now become automatically covered immediately upon the start of the business.

Section 10 (formerly Sec. 9) of RA 1161, as amended by RA 2658 now provides:

Sec. 10. Effective date of coverage. — Compulsory coverage of the employer shall take effect on the first day of his operation, and that of the employee on the date of his employment. (Emphasis supplied)

As We have previously mentioned, it is the intention of the law to cover as many persons as possible so as to promote the constitutional objective of social justice. It is axiomatic that a later law prevails over a prior statute and moreover the legislative in tent must be given effect. 6

Petitioner further submits that Eufrancio Rojas is an independent contractor who engages in an independent business of his own consisting of the operation of the timber concession of the former. Rojas was appointed as operations manager of the logging consession; 7 he has no power to appoint or hire employees; as the term implies, he only manages the employees and it is petitioner who furnishes him the necessary equipment for use in the logging business; and he is not free from the control and direction of his employer in matter connected with the performance of his work. These factors clearly indicate that Rojas is not an independent contractor but merely an employee of petitioner; and should be entitled to the compulsory coverage of the Act.

The records indubitably show that petitioner started its real estate business on December 1, 1952 while its logging operation was actually commenced on April 1, 1957. Applying the provision of Sec. 10 of the Act, petitioner is subject to compulsory coverage as of December 1, 1952 with respect to the real estate business and as of April 1, 1957 with respect to its logging operation.

WHEREFORE, premises considered, the appeal is hereby DISMISSED. With costs against petitioner.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159577             May 3, 2006

CHARLITO PEÑARANDA, Petitioner, vs.BAGANGA PLYWOOD CORPORATION and HUDSON CHUA, Respondents.

D E C I S I O N

PANGANIBAN, CJ:

Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the January 27, 20032 and July 4, 20033 Resolutions of the Court of Appeals (CA) in CA-GR SP No. 74358. The earlier Resolution disposed as follows:

"WHEREFORE, premises considered, the instant petition is hereby DISMISSED."4

The latter Resolution denied reconsideration.

On the other hand, the Decision of the National Labor Relations Commission (NLRC) challenged in the CA disposed as follows:

"WHEREFORE, premises considered, the decision of the Labor Arbiter below awarding overtime pay and premium pay for rest day to complainant is hereby REVERSED and SET ASIDE, and the complaint in the above-entitled case dismissed for lack of merit.5

The Facts

Sometime in June 1999, Petitioner Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler.6 In May 2001, Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager, Hudson Chua, before the NLRC.7

After the parties failed to settle amicably, the labor arbiter8 directed the parties to file their position papers and submit supporting documents.9 Their respective allegations are summarized by the labor arbiter as follows:

"[Peñaranda] through counsel in his position paper alleges that he was employed by respondent [Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19, 2000. Further, [he] alleges that his services [were] terminated without the benefit of due process and valid grounds in accordance with law. Furthermore, he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift

differentials and finally claims for payment of damages and attorney’s fees having been forced to litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and existing under Philippine laws and is represented herein by its General Manager HUDSON CHUA, [the] individual respondent. Respondents thru counsel allege that complainant’s separation from service was done pursuant to Art. 283 of the Labor Code. The respondent [BPC] was on temporary closure due to repair and general maintenance and it applied for clearance with the Department of Labor and Employment, Regional Office No. XI to shut down and to dismiss employees (par. 2 position paper). And due to the insistence of herein complainant he was paid his separation benefits (Annexes C and D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001, [Peñaranda] failed to reapply. Hence, he was not terminated from employment much less illegally. He opted to severe employment when he insisted payment of his separation benefits. Furthermore, being a managerial employee he is not entitled to overtime pay and if ever he rendered services beyond the normal hours of work, [there] was no office order/or authorization for him to do so. Finally, respondents allege that the claim for damages has no legal and factual basis and that the instant complaint must necessarily fail for lack of merit."10

The labor arbiter ruled that there was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed by BPC.11 The temporary closure of BPC’s plant did not terminate his employment, hence, he need not reapply when the plant reopened.

According to the labor arbiter, petitioner’s money claims for illegal dismissal was also weakened by his quitclaim and admission during the clarificatory conference that he accepted separation benefits, sick and vacation leave conversions and thirteenth month pay.12

Nevertheless, the labor arbiter found petitioner entitled to overtime pay, premium pay for working on rest days, and attorney’s fees in the total amount of P21,257.98.13

Ruling of the NLRC

Respondents filed an appeal to the NLRC, which deleted the award of overtime pay and premium pay for working on rest days. According to the Commission, petitioner was not entitled to these awards because he was a managerial employee.14

Ruling of the Court of Appeals

In its Resolution dated January 27, 2003, the CA dismissed Peñaranda’s Petition for Certiorari. The appellate court held that he failed to: 1) attach copies of the pleadings submitted before the labor arbiter and NLRC; and 2) explain why the filing and service of the Petition was not done by personal service.15

In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground that petitioner still failed to submit the pleadings filed before the NLRC.16

Hence this Petition.17

The Issues

Petitioner states the issues in this wise:

"The [NLRC] committed grave abuse of discretion amounting to excess or lack of jurisdiction when it entertained the APPEAL of the respondent[s] despite the lapse of the mandatory period of TEN DAYS.1avvphil.net

"The [NLRC] committed grave abuse of discretion amounting to an excess or lack of jurisdiction when it rendered the assailed RESOLUTIONS dated May 8, 2002 and AUGUST 16, 2002 REVERSING AND SETTING ASIDE the FACTUAL AND LEGAL FINDINGS of the [labor arbiter] with respect to the following:

"I. The finding of the [labor arbiter] that [Peñaranda] is a regular, common employee entitled to monetary benefits under Art. 82 [of the Labor Code].

"II. The finding that [Peñaranda] is entitled to the payment of OVERTIME PAY and OTHER MONETARY BENEFITS."18

The Court’s Ruling

The Petition is not meritorious.

Preliminary Issue:

Resolution on the Merits

The CA dismissed Peñaranda’s Petition on purely technical grounds, particularly with regard to the failure to submit supporting documents.

In Atillo v. Bombay,19 the Court held that the crucial issue is whether the documents accompanying the petition before the CA sufficiently supported the allegations therein. Citing this case, Piglas-Kamao v. NLRC20 stayed the dismissal of an appeal in the exercise of its equity jurisdiction to order the adjudication on the merits.

The Petition filed with the CA shows a prima facie case. Petitioner attached his evidence to challenge the finding that he was a managerial employee.21 In his Motion for Reconsideration, petitioner also submitted the pleadings before the labor arbiter in an attempt to comply with the CA rules.22 Evidently, the CA could have ruled on the Petition on the basis of these attachments. Petitioner should be deemed in substantial compliance with the procedural requirements.

Under these extenuating circumstances, the Court does not hesitate to grant liberality in favor of petitioner and to tackle his substantive arguments in the present case. Rules of procedure must be adopted to help promote, not frustrate, substantial justice.23 The Court frowns upon the practice of dismissing cases purely on procedural grounds.24 Considering that there was substantial compliance,25 a liberal interpretation of procedural rules in this labor case is more in keeping with the constitutional mandate to secure social justice.26

First Issue:

Timeliness of Appeal

Under the Rules of Procedure of the NLRC, an appeal from the decision of the labor arbiter should be filed within 10 days from receipt thereof.27

Petitioner’s claim that respondents filed their appeal beyond the required period is not substantiated. In the pleadings before us, petitioner fails to indicate when respondents received the Decision of the labor arbiter. Neither did the petitioner attach a copy of the challenged appeal. Thus, this Court has no means to determine from the records when the 10-day period commenced and terminated. Since

petitioner utterly failed to support his claim that respondents’ appeal was filed out of time, we need not belabor that point. The parties alleging have the burden of substantiating their allegations.28

Second Issue:

Nature of Employment

Petitioner claims that he was not a managerial employee, and therefore, entitled to the award granted by the labor arbiter.

Article 82 of the Labor Code exempts managerial employees from the coverage of labor standards. Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days.29

Under this provision, managerial employees are "those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision."30

The Implementing Rules of the Labor Code state that managerial employees are those who meet the following conditions:

"(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof;

"(2) They customarily and regularly direct the work of two or more employees therein;

"(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight."31

The Court disagrees with the NLRC’s finding that petitioner was a managerial employee. However, petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards.32 The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities:

"(1) The primary duty consists of the performance of work directly related to management policies of the employer;

"(2) Customarily and regularly exercise discretion and independent judgment;

"(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and

"(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above."33

As shift engineer, petitioner’s duties and responsibilities were as follows:

"1. To supply the required and continuous steam to all consuming units at minimum cost.

"2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.

"3. To evaluate performance of machinery and manpower.

"4. To follow-up supply of waste and other materials for fuel.

"5. To train new employees for effective and safety while working.

"6. Recommend parts and supplies purchases.

"7. To recommend personnel actions such as: promotion, or disciplinary action.

"8. To check water from the boiler, feedwater and softener, regenerate softener if beyond hardness limit.

"9. Implement Chemical Dosing.

"10. Perform other task as required by the superior from time to time."34

The foregoing enumeration, particularly items 1, 2, 3, 5 and 7 illustrates that petitioner was a member of the managerial staff. His duties and responsibilities conform to the definition of a member of a managerial staff under the Implementing Rules.

Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.35

Noteworthy, even petitioner admitted that he was a supervisor. In his Position Paper, he stated that he was the foreman responsible for the operation of the boiler.36 The term foreman implies that he was the representative of management over the workers and the operation of the department.37 Petitioner’s evidence also showed that he was the supervisor of the steam plant.38 His classification as supervisor is further evident from the manner his salary was paid. He belonged to the 10% of respondent’s 354 employees who were paid on a monthly basis; the others were paid only on a daily basis.39

On the basis of the foregoing, the Court finds no justification to award overtime pay and premium pay for rest days to petitioner.

WHEREFORE, the Petition is DENIED. Costs against petitioner.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 86963           August 6, 1999

BATONG BUHAY GOLD MINES, INC., petitioner, vs.HONORABLE DIONISIO DELA SERNA IN HIS CAPACITY AS THE UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, ELSIE ROSALINDA TY, ANTONIO MENDELEBAR, MA. CONCEPCION Q. REYES, AND THE OTHER COMPLAINANTS* IN CASE NO. NCR-LSED-CI-2047-87; MFT CORPORATION AND SALTER HOLDINGS PTY. LTD., respondents.

R E S O L U T I O N

PURISIMA, J.:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court with a Prayer for Preliminary Injunction and or Restraining Order brought by Batong Buhay Gold Mines, Inc. (BBGMI for brevity) to annul three orders issued by respondent Undersecretary Dionisio dela Serna of the Department of Labor and Employment, dated September 16, 1988, December 14, 1988 and February 13, 1989, respectively.

The Order of September 16, 1988 stated the facts as follows:

. . . on 5 February 1987, Elsie Rosalinda B. Ty, Antonia L. Mendelebar, Ma. Concepcion O. Reyes and 1,247 others filed a complaint against Batong Buhay Gold Mines, Inc. for: (1) Non-payment of their basic pay and allowances for the period of 6 July 1983 to 5 July 1984, inclusive, under Wage Order No. 2; (2) Non-payment of their basic pay and allowances for the period 16 June 1984 to 5 October 1986, inclusive under Wage Order No. 5; (3) Non-payment of their salaries for the period 16 March 1986 to the present; (4) Non-payment of their 13th month pay for 1985, 1986 and 1987; (5) Non-payment of their vacation and sick leave, and the compensatory leaves of mine site employees; and (6) Non-payment of the salaries of employees who were placed on forced leaves since November, 1985 to the present, if this is not feasible, the affected employees be awarded corresponding separation pay.

On 9 February 1987, the Regional Director set the case for hearing on 17 February 1987.

On 17 February 1987, the respondent moved for the resetting of the case to 2 March 1987.

On 27 February 1987, the complainants filed a Motion for the issuance of an inspection authority.

x x x           x x x           x x x

On 13 July 1987, the Labor Standards and Welfare Officers submitted their report with the following recommendations:

WHEREFORE, premises considered this case is hereby submitted with the recommendation that an Order of Compliance be issued directing respondent Batong Buhay Gold Mines Inc. to pay complainants' Elsie Rosalina Ty, et al. FOUR MILLION EIGHT HUNDRED EIGHTEEN THOUSAND SEVEN HUNDRED FORTY-SIX PESOS AND FORTY CENTAVOS (P4,818,746.40) by way of unpaid salaries of workers from March 16, 1987 to present, unpaid and ECOLA differentials under Wage Order Nos. 2 and 5 unpaid 13th months pay for 1985 and 1986, and unpaid (sic) vacation/sick/compensatory leave benefits.

On 31 July 1987, the Regional Director1 adopted the recommendation of the LSWOs and issued an order directing the respondent to pay the complainants the sum of P4,818,746.40 representing their unpaid 13th month pay for 1985 and 1986, wage and ECOLA differentials under wage order Nos. 2 and 5, unpaid salaries from 16 March 1986 to present and vacation/sick leave benefits for 1984, 1985 and 1986.

On 19 August 1987, the complainants filed an ex-parte motion for the issuance of a writ of execution and appointment of special sheriff.

x x x           x x x           x x x

On 21 August 1987, the Regional Director issued an Order directing the respondent to put up a cash or surety bond otherwise a writ of execution will be issued.

x x x           x x x           x x x

When the respondent failed to post a cash/surety bond, and upon motion for the issuance of a writ of execution by the complainants, the Regional Director, on 14 September 1987 issued a writ of execution appointing Mr. John Espiridion C. Ramos as Special Sheriff and directing him to do the following:

You are to collect the above-stated amount from the respondent and deposit the same with Cashier of this Office for appropriate disposition to herein complainants under the supervision of the office of the Director. Otherwise, you are to execute this writ by attaching the goods and chattels of the respondent not exempt from execution or in case of insufficiency thereof against the real or immovable property of the respondent.

The Special Sheriff proceeded to execute the appealed Order on 17 September 1987 and seized three (3) units of Peterbuilt trucks and then sold the same by public auction. Various materials and motor vehicles were also seized on different dates and sold at public auction by said sheriff.

x x x           x x x           x x x

On 11 December 1987, the respondent finally posted a supersedeas bond which prompted this Office to issue an Order dated 26 January 1988, restraining the complainants and sheriff Ramos from enforcing the writ of execution. . . .2

BBGMI appealed the Order dated July 31, 1987 of Regional Director Luna C. Piezas to respondent Undersecretary Dionisio de la Serna, contending that the Regional Director had no jurisdiction over the case.

On September 16, 1988, the public respondent issued the first challenged Order upholding the jurisdiction of the Regional Director and annulling all the auction sales conducted by Special Sheriff John Ramos. The decretal portion of the said Order ruled:

WHEREFORE, the Order dated 31 July 1987 of the Regional Director, National Capital Region, is hereby AFFIRMED. Accordingly, the writ of execution dated 14 September 1987 issued in connection thereto is hereby declared VALID.

However, the public auction sales conducted by special sheriff John Ramos pursuant to the writ of execution dated 14 September 1987 on 24 September 2, 20, 23 and 29 October 1987 are all hereby declared NULL AND VOID. Furthermore, the personal properties sold and the proceeds thereof which have been turned over to the complainants thru their legal counsel are hereby ordered returned to the custody of the respondent and the buyers respectively.

SO ORDERED.3

On October 13, 1988, a Motion for Reconsideration of the aforesaid order was presented by the complainants in Case No. NCR-LSED-CI-2047-87 but the same was denied.

On November 7, 1988, a Motion for Intervention was filed by MFT Corporation, inviting attention to a Deed of Sale executed in its favor by Fidel Bermudez, the highest bidder in the auction sale conducted on October 29, 1987.

On December 2, 1988, another Motion for Intervention was filed, this time by Salter Holdings Pty., Ltd., claiming that MFT Corporation assigned its rights over the subject properties in favor of movant as evidenced by a Sales Agreement between MFT Corp. and Salter Holdings Pty., Ltd.

The two Motions for intervention were granted in the second questioned order dated December 14, 1988, directing the exclusion from annulment of the properties sold at the October 29, 1987 auction sale and claimed by the intervenors, including one cluster of junk mining machineries, equipment and supplies, and disposing thus:

WHEREFORE, in view of the foregoing, the motions for reconsideration filed by intervenors MFT and Salter are hereby granted. Correspondingly, this Office's Order dated 16 September 1988 is hereby modified to exclude from annulment "the one lot of junk mining machineries, equipment and supplies as-is-where-is" sold by Sheriff John C. Ramos in the auction sale of 29 October 1987.

x x x           x x x           x x x

Motions for Reconsideration were interposed by Batong Buhay Gold Mining, Inc. and the respondent employees but to no avail. The same were likewise denied in the third assailed Order dated February 13, 1989.

Hence, the petition under scrutiny, ascribing grave abuse of discretion amounting to lack or excess of jurisdiction to the public respondent in issuing the three Orders under attack.

The questioned Orders aforementioned have given rise to the issues: (1) whether the Regional Director has jurisdiction over the complaint filed by the employees of BBGMI; and (2) whether or not the auction sales conducted by the said Special Sheriff are valid.

Anent the first issue, an affirmative ruling is indicated. The Regional Director has jurisdiction over the BBGMI employees who are the complainants in Case Number NCR-LSED-CI-2047-87.

The subject labor standards case of the petition arose from the visitorial and enforcement powers by the Regional Director of Department of Labor and Employment (DOLE). Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards.4 Labor standards cases are governed by Article 128(b) of the Labor Code.

The pivot of inquiry here is whether the Regional Director has jurisdiction over subject labor standards case.

As can be gleaned from the records on hand, subject labor standards case was filed on February 5, 1987 at which time Article 128 (b) read as follows5:

Art. 128 (b) Visitorial and enforcement powers —

(b) The Minister of Labor or his duly authorized representative shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order, except in cases where the employer contests the findings of the labor regulations officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the ordinary course of inspection.

Petitioner theorizes that the Regional Director is without jurisdiction over subject case, placing reliance on the ruling in Zambales Base Inc. vs. Minister of Labor6 and Oreshoot Mining Company vs. Arellano.7

Respondent Undersecretary Dionisio C. Dela Serna, on the other hand, upheld the jurisdiction of Regional Director Luna C. Piezas by relying on E.O. 111, to quote:

Considering therefore that there still exists an employer-employee relationship between the parties; that the case involves violations of the labor standard provisions of the labor code; that the issues therein could be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection; and, if only to give meaning and not render nugatory and meaningless the visitorial and enforcement powers of the Secretary of Labor and Employment as provided by Article 128(b) of the Labor Code, as amended by Section 2 of Executive Order No. 111 which states:

The provisions of article 217 of this code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists, the Minister of Labor and Employment or his duly authorized representative shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provision of this Code based on the findings of the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order, except in cases where the employer contests the findings of the labor regulations officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the ordinary course of inspection.

We agree with the complainants that the regional office a quo has jurisdiction to hear and decide the instant labor standard case.

x x x           x x x           x x x8

The Court agrees with the public respondent. In the case of Maternity Children's Hospital vs. Secretary of Labor (174 SCRA 632), the Court in upholding the jurisdiction of the Regional Director over the complaint on underpayment of wages and ECOLAs filed on May 23, 1986, by the employees of Maternity Children's Hospital, held:

This is a labor standards case and is governed by Art. 128(b) of the Labor Code, as amended by E.O. 111.

x x x           x x x           x x x

Prior to the promulgation of E.O. 111 on December 24, 1986, the Regional Director's authority over money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. 111 was not yet in effect. . . .

We believe, however, that even in the absence of E.O. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration system to the enforcement system.

In the aforecited case, the Court in reinforcing its conclusion that Regional Director has jurisdiction over labor standards cases, treated E.O. 111 as a curative statute, ruling as follows:

E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional Director (Article 128(b)) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases where

an employer-employee relationship still exists. This intention must be given weight and entitled to great respect. As held in Progressive Worker's Union, et al. vs. F.P. Aguas, et al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429:

. . . The interpretation by officers of laws which are entrusted to their administration is entitled to great respect. We see no reason to detract from this rudimentary rule in administrative law, particularly when later events have proved said interpretation to be in accord with the legislative intent. . .

The proceedings before the Regional Director must, perforce be upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered in the nature of a curative statute with retrospective application." (Progressive Workers' Union, et al. vs. Hon. Aguas, et al. (Supra); M. Garcia vs. Judge A. Martinez, et al. G.R. No. I-47629, may 28, 1979, 90 SCRA 331).

With regard to the petitioner's reliance on the cases of Zambales Base, Inc. vs. Minister of Labor (supra) and Oreshoot Mining Company vs. Arellano, (supra), this is misplaced. In the case of Zambales Base, Inc., the court has already ruled that:

. . ., in view of the promulgation of Executive Order No. 111, Zambales Base Metals vs. Minister of Labor is no longer good law. (Emphasis supplied) Executive Order No. 111 is in the character of a curative law, that is to say, it was intended to remedy a defect that, in the opinion of the Legislature (the incumbent Chief Executive in this case, in the exercise of her lawmaking powers under the Freedom Constitution) had attached to the provision under the amendment.

x x x           x x x           x x x9

The case of Oreshoot Mining Corporation, on the other hand, involved money claims of illegally dismissed employees. As the employer-employee relationship has already ceased and reinstatement is sought, jurisdiction necessarily falls under the Labor Arbiter. Petitioner should not have used this to support its theory as this petition involves labor standards cases and not monetary claims of illegally dismissed employees.

The Court would have ruled differently had the petitioner shown that subject labor standards case is within the purview of the exception clause in Article 128 (b) of the Labor Code. Said provision requires the concurrence of the following elements in order to divest the Regional Director or his representatives of jurisdiction, to wit: (a) that the petitioner (employer) contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection.10

Nowhere in the records does it appear that the petitioner alleged any of the aforestated grounds. In fact, in its Motion for Reconsideration of the Order of the Regional Director dated August 20, 1987, the grounds which petitioner raised were the following:

1. This Honorable Office has no jurisdiction to hear this case and its Order of 31 October 1987 is therefore null and void;

2. Batong Buhay Gold Mines, Inc. is erroneously impleaded as the sole party respondent, the complaint should have been directed also against the Asset Privatization Trust.

In the other pleadings filed by petitioner in NCR-LSED-C1-2047-87, such as the Urgent Omnibus Motion to declare void the Writ of Execution for lack of jurisdiction and the Oppositions it filed on the Motions for Intervention questioning the legal personality of the intervenors, questions as to the amounts complained of by the employees or absence of violation of labor standards laws were never raised. Raising lack of jurisdiction in a Motion to Dismiss is not the contest contemplated by the exception clause under Article 128(b) of the Labor Code which would take the case out of the jurisdiction of the Regional Director and bring it before the Labor Arbiter.

The only instance when there was a semblance of raising the aforestated grounds, was when they filed an Appeal Memorandum dated January 14, 1988, before the respondent undersecretary. In the said Appeal Memorandum, petitioner comes up with the defense that the Regional Director was without jurisdiction, as employer-employee relationship was absent, since petitioner had ceased doing business since 1985.

Records indicate that the Labor Standards and Welfare Officers, pursuant to Complaint Inspection Authority No. CI-2-047-87, were not allowed to look into records, vouchers and other related documents. The officers of the petitioner alleged that the company is presently under receivership of the Development Bank of the Philippines.11 In lieu of this, the Regional Director had ordered that a summary investigation be conducted.12 Despite proper notices, the petitioner refused to appear before the Regional Director. To give it another chance, an order to file its position paper was issued to substantiate its defenses. Notwithstanding all these opportunities to be heard, petitioner chose not to avail of such.

As held in the case of M. Ramirez Industries vs. Sec. of Labor and Employment, (266 SCRA 111):

. . . Under Art. 128(a) of the Labor Code, the Secretary of Labor of his duly authorized representatives, such as the Regional Directors, has visitorial powers which authorize him to inspect the records and premises of an employer at any time of the day or night whenever work is being undertaken therein, to question any employee and investigate any fact, condition or matter, and to determine violations of labor laws, wage orders or rules and regulations. If the employer refuses to attend the inspection or conference or to submit any record, such as payrolls and daily time records, he will be deemed to have waived his right to present evidence. (emphasis supplied)

Petitioner's refusal to allow the Labor Standards and Welfare Officers to conduct inspection in the premises of their head office in Makati and the failure to file their position paper is equivalent to a waiver of its right to contest the claims of the employees. This Court had occasion to hold there is no violation of due process where the Regional Director merely required the submission of position papers and resolved the case summarily thereafter.13 Furthermore, the issuance of the compliance order was well within the jurisdiction of the Regional Director, as Section 14 of the Rules on the Disposition of Labor Standards Cases provides:

Sec. 14. Failure to Appear — Where the employer or the complainant fails or refuses to appear during the investigation, despite proper notice, for two (2) consecutive hearings without justifiable reasons, the hearing officer may recommend to the Regional Director the issuance of a compliance order based on the evidence at hand or an order of dismissal of the complaint as the case may be. (Emphasis supplied)

It bears stressing that this petition involves a labor standards case and it is in keeping with the law that "the worker need not litigate to get what legally belongs to him, for the whole enforcement machinery of the Department of Labor exists to insure its expeditious delivery to him free of charge."14

Thus, their claim of closure for business, among other things, are factual issues which cannot be brought here for the first time. As petitioner refused to participate in the proceedings below where it could have ventilated the appropriate defenses, to do so in this petition is unavailing. The reason for this is that factual issues are not proper subjects of a special civil action for certiorari to the Supreme Court.15

It is therefore abundantly clear that at the time of the filing of the claims of petitioner's employees, the Regional Director was already exercising visitorial and enforcement powers.

Regional Director's visitorial and enforcement powers under Art. 128 (b) has undergone series of amendments which the Court feels to be worth mentioning.

Confusion was engendered by the promulgation of the decision in the case of Servando's Inc. vs. Secretary of Labor and Employment and the Regional Director, Region VI, Department of Labor and Employment.16 In the said case, the Regional Director took cognizance of the labor standards cases of the employees of Servando's Inc., but this Court held that:

In the case of Briad Agro Development Corporation vs. Dela Cerna and Camus Engineering Corp. vs. Sec. Of labor applying E.O. 111 the Court recognized the concurrent jurisdiction of the Secretary of labor (or Regional Directors) and the labor Arbiters to pass on employees money claims, including those cases which the labor Arbiters had previously exercised jurisdiction. However, in a subsequent modificatory resolution in the Briad Agro Case, dated 9 November 1989, the Court modified its original decision in view of the enactment of RA 6715, and upheld the power of the Regional Directors to adjudicate money claims subject to the conditions set forth in Section 2 of said law (RA 6715).

The power then of the Regional Director (under the present state of law) to adjudicate employees money claims is subject to the concurrence of all the requisites provided under Sec. 2 of RA 6715, to wit:

(a) the claim is represented by an employer or person employed in domestic or household service, or househelper;

(b) the claim arises from employer-employee relationship;

(c) the claimant does not seek reinstatement; and

(d) the aggregate money claim of each employee or househelper does not exceed P5,000.

x x x           x x x           x x x17

The Servando ruling, in effect, expanded the jurisdictional limitation provided for by RA 6715 as to include labor standards cases under Article 128 (b) and no longer limited to ordinary monetary claims under Article 129.

In fact, in the Motion for Reconsideration18 presented by the private respondents in the Servando case, the court applied more squarely the P5,000 limit to the visitorial and enforcement power of the Regional Director, to wit:

To construe the visitorial power of the Secretary of Labor to order and enforce compliance with labor laws as including the power to hear and decide cases involving employee's claims for wages, arising from employer-employee relations, even if the amount of said claims exceed P5,000 for each employee, would, in our considered opinion, emasculate and render meaningless, if not useless, the provisions of Art. 217 (a) and (6) and Article 129 of the Labor Code which, as above-pointed out, confer exclusive jurisdiction on the Labor Arbiter to hear and decide such employees' claims, regardless of amount, can be heard and determined by the Secretary of Labor his visitorial power. This does not, however, appear to be the legislative intent.

But prevailing law and jurisprudence rendered the Servando ruling inapplicable. In the recent case of Francisco Guico, Jr. versus The Honorable Secretary of Labor & Employment Leonardo A. Quisumbing, GR # 131750, promulgated on November 16, 1998, this Court upheld the jurisdiction of the Regional Director notwithstanding the fact that the amounts awarded exceeded P5,000.

Republic Act 7730, the law governing the visitorial and enforcement powers of the Labor Secretary and his representatives reads:

Art. 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer

and raises issues supported by documentary proofs which were not considered in the course of inspection.

x x x           x x x           x x x(emphasis supplied)

The present law, RA 7730, can be considered a curative statute to reinforce the conclusion that the Regional Director has jurisdiction over the present labor standards case.

Well-settled is the rule that jurisdiction over the subject matter is determined by the law in force when the action was commenced, unless a subsequent statute provides for its retroactive application, as when it is a curative legislation.19

Curative statutes are intended to supply defects, abridge superfluities in existing laws and curb certain evils. They are intended to enable persons to carry into effect that which they have designed and intended, but has failed of expected legal consequence by reason of some statutory disability or irregularity in their own action. They make valid that which, before the enactment of the statute, was invalid.20

In arriving at this conclusion, the case of Briad Agro Development vs. De La Cerna21 comes to the fore. In the said case, RA 6115 was held to be a curative statute. There, the Court ruled that RA 6715 is deemed a curative statute and should be applied to pending cases. The rationale of the ruling of the Court was that prior to RA 6715, Article 217 as amended by E.O. 111, created a scenario where the Labor Arbiter and the Regional Director of DOLE had overlapping jurisdiction over money claims. Such a situation was viewed as a defect in the law so that when RA 6715 was passed, it was treated or interpreted by the Court as a rectification of the infirmity of the law, and therefore curative in nature, with retroactive application.

Parenthetically, the same rationale applies in treating RA 7730 as a curative statute. Explicit in its title22 is the legislative intent to rectify the error brought about by this Court's ruling that RA 6715 covers even labor standards cases where the amounts to be awarded by the Regional Director exceed P5,000 as provided for under RA 6715. Congressional records relative to Republic Act 7730 reveal that, "this bill seeks to do away with the jurisdictional limitations imposed thru said ruling (referring to Servando) and to finally settle any lingering doubts on the visitorial and enforcement powers of the Secretary of Labor and Employment."23

All the foregoing studiedly considered, the ineluctable conclusion is that the application of RA 7730 to the case under consideration is proper.

Thus, it is decisively clear that the public respondent did not act with grave abuse of discretion in issuing the Order dated September 16, 1988.

The second issue for resolution is the validity of the auction sales conducted by Special Sheriff Ramos. It bears stressing that the writ of execution issued by the Regional Director led to the several auction sales conducted on September 24, 1987, October 2, 1987, October 23, 1987, October 29, 1987 and October 30, 1987.

In the first Order of public respondent, the five (5) auction sales were declared null and void. As the public respondent put it, "the scandalously low price for which the personal properties of the respondent were sold leads us to no other recourse but to invalidate the auction sales conducted by the special sheriff."24

In the September 16, 1988 Order25 of public respondent, the personal properties and corresponding prices for which they were sold were as follows:

Personal properties sold on September 24, 1987:

1. One (1) unit peterbuilt truck Model 1978 with Engine No. 6A4102-65, Chassis No. 139155-P not running condition.

2. One (1) unit 1978 Model peterbuilt truck with Engine No. 6467-8040, Chassis No. 6A410235, truck with Engine No. (Truck 4) not running condition.

3. One (1) unit 1978 Model peterbuilt truck with Engine No. 6A410319, Chassis No. 139163-P Truck No. 4 not running condition.

Proceeds of Sale P178,000.00

Personal Properties Sold on October 2, 1987

1. One (1) unit peterbuilt truck model 1978, with Engine No. 6A410347, Chassis No. 1391539-P.

2. One (1) unit peterbuilt truck Model 1978 with Engine No. 6A410325, Chassis No. 139149.

3. One (1) unit payloader (caterpillar with Engine No. (not visible) 966.

4. One (1) unit Forklift; one (1) unit crowler crane, Engine No. (not visible); and one (1) Lot of scarp irons impounded inside the Batong Buhay Compound, Calanan, Kalinga Apayao.

5. One (1) unit panel Isuzu with Engine No. 821 POF200207, Plate No. PBV 386.

Proceeds of Sale P228,750.00

Personal Properties Sold on October 23, 1987:

1. One (1) Unit Toyota Land Cruiser, with Engine No. BO4466340, Chassis No. 81400500227 Plate No. BAT 353, burned, damage not running condition, type of body jeep motor not visible.

2. Two (2) units peterbuilts, damaged, burned motor Nos. (not visible) and Chassis Nos. not visible.

3. One (1) Unit Layland, burned, damaged and Motor No. not visible.

4. Two (units) air compressor, burned, damaged and one (1) generator.

5. One (1) Unit Loader Michigan 50, damaged and burned, and

6. One (1) rock crasher, damaged, burned, scrap iron junk.

Proceeds of Sale P98,000.00

Properties sold on October 29, 1987

1. One (1) lot of scrap construction materials.

2. One (1) lot of scrap mining machineries equipments and supplies.

3. One (1) lot of junk machineries, equipments and supplies.

Proceeds of Sale P1,699,999.99

Personal Properties Sold on October 20, 1987*

1. One (1) lot of scrap construction materials.

2. One (1) lot of scrap mining machineries, equipments and supplies.

Proceeds of Sale P2,185,000.00

Total Proceeds Sale P4,389,749.99

to satisfy the judgment award in the amount of P4,818,746.00.

As a general rule, findings of fact and conclusion of law arrived at by quasi-judicial agencies are not to be disturbed absent any showing of grave abuse of discretion tainting the same. But in the case under scrutiny, there was grave abuse of discretion when the public respondent, without

any evidentiary support, adjudged such prices as "scandalously low". He merely relied on the self-serving assertion by the petitioner that the value of the auctioned properties was more than the price bid. Obviously, this ratiocination did not suffice to set aside the auction sales.

The presumption of regularity in the performance of official function is applicable here. Conformably, any party alleging irregularity vitiating auction sales must come forward with clear and convincing proof.

Furthermore, it is a well-settled principle that:

Mere inadequacy of price is not, of itself sufficient ground to set aside an execution sale where the sale is regular, proper and legal in other respects, the parties stand on an equal footing, there are no confidential relation between them, there is no element of fraud, unfairness, or oppression, and there is no misconduct, accident, mistake or surprise connected with, and tending to cause, the inadequacy.26

Consequently, in declaring the nullity of the subject auction sales on the ground of inadequacy of price, the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

But, this is not to declare the questioned auction sales as valid. The same are null and void since on the properties of petitioner involved was constituted a mortgage between petitioner and the Development Bank of the Philippines, as shown by the:

(a) Deed of Mortgage dated December 28, 1973;

(b) Joint Mortgage (Amending Deed of Mortgage) dated August 25, 1975;

(c) Amendment to Joint Mortgage dated October 18, 1976.

(d) Confirmation of Mortgage dated March 27, 1979; and

(e) Additional Joint First Mortgage dated March 31, 1981.27

The aforementioned documents were executed between the petitioner and Development Bank of the Philippines (DBP) even prior to the filing of the complaint of petitioner's employees. The properties having been mortgaged to DBP, the applicable law is Section 14 of Executive Order No. 81, dated 3 December 1986, otherwise known as the "The 1986 Revised Charter of the Development Bank of the Philippines," which exempts the properties of petitioner mortgaged to DBP from attachment or execution sales. Section 14 of E.O. 81, reads:

Sec. 14. Exemption from Attachment. The provisions of any law to the contrary notwithstanding, securities on loans and/or other accommodations granted by the Bank or its predecessor-in-interest shall not be subject to attachment, execution or any other court process, nor shall they be included in the property of insolvent persons or institutions, unless all debts and obligations of the Bank or its predecessor-in-interest, penalties, collection of expenses, and other charges, subject to the provisions of paragraphs (e) of Sec. 9 of this Charter.

In fact, a letter dated January 31, 1990 of Jose C. Sison, Associate Executive Trustee of the Asset Privatization Trust, to the Office of the Clerk of Court of the Supreme Court, certified that the petitioner is covered by Proclamation No. 50 issued on December 8, 1986 by President Corazon C. Aquino.

Quoted hereunder are the pertinent portions of the said letter:28

RE: BBGMI vs. Hon. dela Serna, GR No. 86963

Supreme Court Certiorari

SIR:

x x x           x x x           x x x

. . . all the assets (real and personal/chattel) of Batong Buhay Gold Mines, Inc. (BBGMI) have been transferred and entrusted to the Asset Privatization Trust (APT) by virtue of Proclamation No. 50 dated December 8, 1986 of her Excellency, President Corazon C. Aquino. All the said assets of BBGMI are covered by real and chattel mortgages executed in favor of the Philippine National Bank ("PNB"), the Development Bank of the Philippines ("DBP") and the National Investment and Development Corporation ("NIDC").

x x x           x x x           x x x

Sec. 14, Executive Order No. 81:

x x x           x x x           x x x

Pursuant to the above-quoted provision of law, you are hereby warned that all the assets (real and personal/chattel) of BBGMI are exempted from writs of execution, attachment, or any other lien or court processes. The Government, through APT, shall initiate any administrative measures and remedies against you for any violation of the vested rights of PNB, DBP and APT.

x x x           x x x           x x x

(sgd).

JOSE C. SISON

The exemption referred to in the aforecited letter is one of the circumstances contemplated by Rule 39 of the Revised Rules of Court, to wit:

Sec. 13. Property exempt from execution. — Except as otherwise expressly provided by law, the following properties, and no other, shall be exempt from execution:

x x x           x x x           x x x

(m) Properties specially exempted by law.

x x x           x x x           x x x

Private respondents contend that even if subject properties were mortgaged to DBP (now under Asset Privatization Trust), Article 11029 of the Labor Code, as amended by RA 6715, applies just the same. According to them, the said provision of law grants preference to money claims of workers over and above all credits of the petitioner. This contention is untenable. In the case of DBP vs. NLRC,30 the Supreme Court held that the workers preference regarding wages and other monetary claims under Article 110 of the Labor Code, as amended, contemplates bankruptcy or liquidation proceedings of the employer's business. What is more, it does not disregard the preferential lien of mortgagees considered as preferred credits under the provisions of the New Civil Code on the classification, concurrence and preference of credits.

We now come to the issue with respect to the second Order, dated December 14, 1988, which declared as valid the auction sale conducted on October 29, 1987 by Special Sheriff John Ramos. Public respondent had no authority to validate the said auction sale on the ground that the intervenors, MFT Corporation and Salter Holdings Pty., Ltd., as purchasers for value, acquired legal title over subject properties.

It is well to remember that the said properties were transferred to the intervenors, when Fidel Bermudez, the highest bidder at the auction sale, sold the properties to MFT Corporation which, in turn, sold the same properties to Salter Holdings Pty., Ltd. Public respondent opined that the contract of sale between the intervenors and the highest bidder should be respected as these sales took place during the interregnum after the auction sale was conducted on October 29, 1987 and before the issuance of the first disputed Order declaring all the auction sales null and void.

On this issue, the Court rules otherwise.

As regards personal properties, the general rule is that title, like a stream, cannot rise higher than its source.31 Consequently, a seller without title cannot transfer a title better than what he

holds. MFT Corporation and Salter Holdings Pty., Ltd. trace their title from Fidel Bermudez, who was the highest bidder of a void auction sale over properties exempt from execution. Such being the case, the subsequent sale made by him (Fidel Bermudez) is incapable of vesting title or ownership in the vendee.

The Order dated December 14, 1988, declaring the October 29, 1987 auction sale as valid, was issued with grave abuse of discretion amounting to lack or excess of jurisdiction.

WHEREFORE, the petition is hereby GRANTED, insofar as the Order dated December 14, 1988 of Undersecretary Dionisio dela Serna is concerned, which Order is SET ASIDE. The Order of September 16, 1988, upholding the jurisdiction of the Regional Director, is AFFIRMED. No pronouncement as to costs.1âwphi1.nêt

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 113161 August 29, 1995

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN, accused-appellant.

 

REGALADO, J.:

On January 12, 1988, an information for illegal recruitment committed by a syndicate and in large scale, punishable under Articles 38 and 39 of the Labor Code (Presidential Decree No. 442) as amended by Section 1(b) of Presidential Decree No. 2018, was filed against spouses Dan and Loma Goce and herein accused-appellant Nelly Agustin in the Regional Trial Court of Manila, Branch 5, alleging —

That in or about and during the period comprised between May 1986 and June 25, 1987, both dates inclusive, in the City of Manila, Philippines, the said accused, conspiring and confederating together and helping one another, representing themselves 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 (1) Rolando Dalida y Piernas, (2) Ernesto Alvarez y Lubangco, (3) Rogelio Salado y Savillo, (4) Ramona Salado y Alvarez, (5) Dionisio Masaya y de Guzman, (6) Dave Rivera y de Leon, (7) Lorenzo Alvarez y Velayo, and (8) Nelson Trinidad y Santos, without first having secured the required license or authority from the Department of Labor. 1

On January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was arrested. 2 Hence, on February 2, 1989, the trial court ordered the case archived but it issued a standing warrant of arrest against the accused. 3

Thereafter, on learning of the whereabouts of the accused, one of the offended parties, Rogelio Salado, requested on March 17, 1989 for a copy of the warrant of arrest. 4 Eventually, at around midday of February 26, 1993, Nelly Agustin was apprehended by the Parañaque police. 5 On March 8, 1993, her counsel filed a motion to revive the case and requested that it be set for hearing "for purposes of due process and for the accused to immediately have her day in court" 6 Thus, on April 15, 1993, the trial court reinstated the case and set the arraignment for May 3, 1993, 7 on which date of Agustin pleaded not guilty 8 and the case subsequently went to trial.

Four of the complainants testified for the prosecution. Rogelio Salado was the first to take the witness stand and he declared that sometime in March or April, 1987, he was introduced by Lorenzo Alvarez, his brother-in-law and a co-applicant, to Nelly Agustin in the latter's residence at Factor, Dongalo, Parañaque, Metro Manila. Representing

herself as the manager of the Clover Placement Agency, Agustin showed him a job order as proof that he could readily be deployed for overseas employment. Salado learned that he had to pay P5,000.00 as processing fee, which amount he gave sometime in April or May of the same year. He was issued the corresponding receipt. 9

Also in April or May, 1987, Salado, accompanied by five other applicants who were his relatives, went to the office of the placement agency at Nakpil Street, Ermita, Manila where he saw Agustin and met the spouses Dan and Loma Goce, owners of the agency. He submitted his bio-data and learned from Loma Goce that he had to give P12,000.00, instead of the original amount of P5,000.00 for the placement fee. Although surprised at the new and higher sum, they subsequently agreed as long as there was an assurance that they could leave for abroad. 10

Thereafter, a receipt was issued in the name of the Clover Placement Agency showing that Salado and his aforesaid co-applicants each paid P2,000.00, instead of the P5,000.00 which each of them actually paid. Several months passed but Salado failed to leave for the promised overseas employment. Hence, in October, 1987, along with the other recruits, he decided to go to the Philippine Overseas Employment Administration (POEA) to verify the real status of Clover Placement Agency. They discovered that said agency was not duly licensed to recruit job applicants. Later, upon learning that Agustin had been arrested, Salado decided to see her and to demand the return of the money he had paid, but Agustin could only give him P500.00. 11

Ramona Salado, the wife of Rogelio Salado, came to know through her brother, Lorenzo Alvarez, about Nelly Agustin. Accompanied by her husband, Rogelio, Ramona went to see Agustin at the latter's residence. Agustin persuaded her to apply as a cutter/sewer in Oman so that she could join her husband. Encouraged by Agustin's promise that she and her husband could live together while working in Oman, she instructed her husband to give Agustin P2,000.00 for each of them as placement fee, or the total sum of P4,000.00. 12

Much later, the Salado couple received a telegram from the placement agency requiring them to report to its office because the "NOC" (visa) had allegedly arrived. Again, around February, or March, 1987, Rogelio gave P2,000.00 as payment for his and his wife's passports. Despite follow-up of their papers twice a week from February to June, 1987, he and his wife failed to leave for abroad. 13

Complainant Dionisio Masaya, accompanied by his brother-in-law, Aquiles Ortega, applied for a job in Oman with the Clover Placement Agency at Parañaque, the agency's former office address. There, Masaya met Nelly Agustin, who introduced herself as the manager of the agency, and the Goce spouses, Dan and Loma, as well as the latter's daughter. He submitted several pertinent documents, such as his bio-data and school credentials. 14

In May, 1986, Masaya gave Dan Goce P1,900.00 as an initial downpayment for the placement fee, and in September of that same year, he gave an additional P10,000.00. He was issued receipts for said amounts and was advised to go to the placement office once in a while to follow up his application, which he faithfully did. Much to his dismay and chagrin, he failed to leave for abroad as promised. Accordingly, he was forced to demand that his money be refunded but Loma Goce could give him back only P4,000.00 in installments. 15

As the prosecution's fourth and last witness, Ernesto Alvarez took the witness stand on June 7, 1993. He testified that in February, 1987, he met appellant Agustin through his cousin, Larry Alvarez, at her residence in Parañaque. She informed him that "madalas siyang nagpapalakad sa Oman" and offered him a job as an ambulance driver at the Royal Hospital in Oman with a monthly salary of about $600.00 to $700.00. 16

On March 10, 1987, Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the latter's residence. In the same month, he gave another P3,000.00, this time in the office of the placement agency. Agustin assured him that he could leave for abroad before the end of 1987. He returned several times to the placement agency's office to follow up his application but to no avail. Frustrated, he demanded the return of the money he had paid, but Agustin could only give back P500.00. Thereafter, he looked for Agustin about eight times, but he could no longer find her. 17

Only herein appellant Agustin testified for the defense. She asserted that Dan and Loma Goce were her neighbors at Tambo, Parañaque and that they were licensed recruiters and owners of the Clover Placement Agency. Previously, the Goce couple was able to send her son, Reynaldo Agustin, to Saudi Arabia. Agustin met the aforementioned complainants through Lorenzo Alvarez who requested her to introduce them to the Goce couple, to which request she acceded. 18

Denying any participation in the illegal recruitment and maintaining that the recruitment was perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts presented by the prosecution. She insisted that the complainants included her in the complaint thinking that this would compel her to reveal the whereabouts of the Goce spouses. She failed to do so because in truth, so she claims, she does not know the present address of the couple. All she knew was that they had left their residence in 1987. 19

Although she admitted having given P500.00 each to Rogelio Salado and Alvarez, she explained that it was entirely for different reasons. Salado had supposedly asked for a loan, while Alvarez needed money because he was sick at that time. 20

On November 19, 1993, the trial court rendered judgment finding herein appellant guilty as a principal in the crime of illegal recruitment in large scale, and sentencing her to serve the penalty of life imprisonment, as well as to pay a fine of P100,000.00. 21

In her present appeal, appellant Agustin raises the following arguments: (1) her act of introducing complainants to the Goce couple does not fall within the meaning of illegal recruitment and placement under Article 13(b) in relation to Article 34 of the Labor Code; (2) there is no proof of conspiracy to commit illegal recruitment among appellant and the Goce spouses; and (3) there is no proof that appellant offered or promised overseas employment to the complainants. 22 These three arguments being interrelated, they will be discussed together.

Herein appellant is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code, as amended by Presidential Decree No. 2018, provides that any recruitment activity, including the prohibited practices enumerated in Article 34 of said Code, undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under Article 39 thereof. The same article further provides that illegal recruitment shall be considered an offense involving economic sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate, i.e., if it is carried out by a group of three or more persons

conspiring and/or confederating with one another; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or as a group.

At the outset, it should be made clear that all the accused in this case were not authorized to engage in any recruitment activity, as evidenced by a certification issued by Cecilia E. Curso, Chief of the Licensing and Regulation Office of the Philippine Overseas Employment Administration, on November 10, 1987. Said certification states that Dan and Loma Goce and Nelly Agustin are neither licensed nor authorized to recruit workers for overseasemployment. 23 Appellant does not dispute this. As a matter of fact her counsel agreed to stipulate that she was neither licensed nor authorized to recruit applicants for overseas employment. Appellant, however, denies that she was in any way guilty of illegal recruitment. 24

It is appellant's defensive theory that all she did was to introduce complainants to the Goce spouses. Being a neighbor of said couple, and owing to the fact that her son's overseas job application was processed and facilitated by them, the complainants asked her to introduce them to said spouses. Allegedly out of the goodness of her heart, she complied with their request. Such an act, appellant argues, does not fall within the meaning of "referral" under the Labor Code to make her liable for illegal recruitment.

Under said Code, 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 placement. 25 On the other hand, referral is the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau. 26

Hence, the inevitable query is whether or not appellant Agustin merely introduced complainants to the Goce couple or her actions went beyond that. The testimonial evidence hereon show that she indeed further committed acts constitutive of illegal recruitment. All four prosecution witnesses testified that it was Agustin whom they initially approached regarding their plans of working overseas. It was from her that they learned about the fees they had to pay, as well as the papers that they had to submit. It was after they had talked to her that they met the accused spouses who owned the placement agency.

As correctly held by the trial court, being an employee of the Goces, it was therefore logical for appellant to introduce the applicants to said spouses, they being the owners of the agency. As such, appellant was actually making referrals to the agency of which she was a part. She was therefore engaging in recruitment activity. 27

Despite Agustin's pretensions that she was but a neighbor of the Goce couple, the testimonies of the prosecution witnesses paint a different picture. Rogelio Salado and Dionisio Masaya testified that appellant represented herself as the manager of the Clover Placement Agency. Ramona Salado was offered a job as a cutter/sewer by Agustin the first time they met, while Ernesto Alvarez remembered that when he first met Agustin, the latter represented herself as "nagpapaalis papunta sa Oman." 28

Indeed, Agustin played a pivotal role in the operations of the recruitment agency, working together with the Goce couple.

There is illegal recruitment when one gives the impression of having the ability to send a worker abroad." 29 It is undisputed that appellant gave complainants the distinct impression that she had the power or ability to send people abroad for work such that the latter were convinced to give her the money she demanded in order to be so employed. 30

It cannot be denied that Agustin received from complainants various sums for purpose of their applications. Her act of collecting from each of the complainants payment for their respective passports, training fees, placement fees, medical tests and other sundry expenses unquestionably constitutes an act of recruitment within the meaning of the law. In fact, appellant demanded and received from complainants amounts beyond the allowable limit of P5,000.00 under government regulations. It is true that the mere act of a cashier in receiving money far exceeding the amount allowed by law was not considered per se as "recruitment and placement" in contemplation of law, but that was because the recipient had no other participation in the transactions and did not conspire with her co-accused in defrauding the victims. 31

That is not the case here.

Appellant further argues that "there is no evidence of receipts of collections/payments from complainants to appellant." On the contrary, xerox copies of said receipts/vouchers were presented by the prosecution. For instance, a cash voucher marked as Exhibit D, 32 showing the receipt of P10,000.00 for placement fee and duly signed by appellant, was presented by the prosecution. Another receipt, identified as Exhibit E, 33 was issued and signed by appellant on February 5, 1987 to acknowledge receipt of P4,000.00 from Rogelio and Ramona Salado for "processing of documents for Oman." Still another receipt dated March 10, 1987 and presented in evidence as Exhibit F, shows that appellant received from Ernesto Alvarez P2,000.00 for "processing of documents for Oman." 34

Apparently, the original copies of said receipts/vouchers were lost, hence only xerox copies thereof were presented and which, under the circumstances, were admissible in evidence. When the original writing has been lost or destroyed or cannot be produced in court, upon proof of its execution and loss or destruction, or unavailability, its contents may be proved by a copy or a recital of its contents in some authentic document, or by the recollection of witnesses. 35

Even assuming arguendo that the xerox copies presented by the prosecution as secondary evidence are not allowable in court, still the absence thereof does not warrant the acquittal of appellant. In People vs. Comia, 36 where this particular issue was involved, the Court held that the complainants' failure to ask for receipts for the fees they paid to the accused therein, as well as their consequent failure to present receipts before the trial court as proof of the said payments, is not fatal to their case. The complainants duly proved by their respective testimonies that said accused was involved in the entire recruitment process. Their testimonies in this regard, being clear and positive, were declared sufficient to establish that factum probandum.

Indeed, the trial court was justified and correct in accepting the version of the prosecution witnesses, their statements being positive and affirmative in nature. This is more worthy of credit than the mere uncorroborated and self-serving denials of appellant. The lame defense consisting of such bare denials by appellant cannot

overcome the evidence presented by the prosecution proving her guilt beyond reasonable doubt. 37

The presence of documentary evidence notwithstanding, this case essentially involves the credibility of witnesses which is best left to the judgment of the trial court, in the absence of abuse of discretion therein. The findings of fact of a trial court, arrived at only after a hearing and evaluation of what can usually be expected to be conflicting testimonies of witnesses, certainly deserve respect by an appellate court. 38 Generally, the findings of fact of the trial court on the matter of credibility of witnesses will not be disturbed on appeal. 39

In a last-ditch effort to exculpate herself from conviction, appellant argues that there is no proof of conspiracy between her and the Goce couple as to make her liable for illegal recruitment. We do not agree. The evidence presented by the prosecution clearly establish that appellant confabulated with the Goces in their plan to deceive the complainants. Although said accused couple have not been tried and convicted, nonetheless there is sufficient basis for appellant's conviction as discussed above.

In People vs. Sendon, 40 we held that the non-prosecution of another suspect therein provided no ground for the appellant concerned to fault the decision of the trial court convicting her. The prosecution of other persons, equally or more culpable than herein appellant, may come later after their true identities and addresses shall have been ascertained and said malefactors duly taken into custody. We see no reason why the same doctrinal rule and course of procedure should not apply in this case.

WHEREFORE, the appealed judgment of the court a quo is hereby AFFIRMED in toto, with costs against accused-appellant Nelly D. Agustin.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 163285             February 27, 2008

DEPARTMENT OF AGRARIAN REFORM, rep. by REGIONAL DIRECTOR NASER M. MUSALI, petitioner, vs.HON. HAKIM S. ABDULWAHID, Presiding Judge, Regional Trial Court, Br. XII of Zamboanga City, and YUPANGCO COTTON MILLS, INC., respondents.

D E C I S I O N

PUNO, C.J.:

The Department of Agrarian Reform Adjudication Board (DARAB) is vested with primary and exclusive jurisdiction to determine and adjudicate agrarian reform matters, including all matters involving the implementation of the agrarian reform program. Thus, when a case is merely an incident involving the implementation of the Comprehensive Agrarian Reform Program (CARP), then jurisdiction remains with the DARAB, and not with the regular courts.

This is a petition for review by certiorari under Rule 45 of the 1997 Rules of Court of a Decision dated November 21, 2003, and the Resolution dated April 21, 2004, both of the Court of Appeals (CA) in C.A.-G.R. SP No. 69699, entitled "Department of Agrarian Reform (DAR) vs. Hon. Hakim S. Abdulwahid, as RTC Judge & Yupangco Cotton Mills, Inc.," on pure question of law. Particularly, the issue concerns the jurisdiction of the trial court below over the complaint in Civil Case No. 5113 vis-à-vis the original, primary and exclusive jurisdiction of the Department of Agrarian Reform (DAR) and the DARAB over agrarian disputes and/or agrarian reform implementation as provided for under Section 50 of Republic Act (R.A.) No. 6657.

On December 28, 2000, Yupangco Cotton Mills, Inc. (Yupangco) filed a complaint for "Recovery of Ownership and Possession, Violations of R.A. Nos. 6657 and 3844[,] as amended, Cancellation of Title, Reconveyance and [D]amages with Prayer for the Issuance of Preliminary Mandatory Injunction and/or Temporary Restraining Order" against Buenavista Yupangco Agrarian Reform Beneficiaries Association, Inc. (BYARBAI), the DAR and the Land Bank of the Philippines. The case was docketed as Civil Case No. 5113 and raffled to the Regional Trial Court (RTC), Branch 12 of Zamboanga City.1

On January 26, 2001, the DAR filed a Motion to Dismiss on the following grounds: (a) Yupangco’s causes of action were not within the jurisdiction of the RTC, (b) forum shopping, and (c) litis pendentia.2

On November 6, 2001, the RTC denied the Motion to Dismiss, ruling that Yupangco’s action was within the jurisdiction of the RTC pursuant to Section 19, Chapter II of Batas Pambansa Blg. 129.3 DAR and BYARBAI filed a motion for reconsideration,4 which was denied for lack of merit.5

On March 20, 2002, DAR filed a special civil action for certiorari under Rule 65 of the 1997 Rules of Court with the CA, alleging that the trial court acted with grave abuse of discretion amounting to lack of jurisdiction when DAR’s motion to dismiss was denied. 6

The appellate court sustained the RTC, finding that the action falls within the jurisdiction of the regular courts and not the DARAB because Yupangco primarily sought the recovery and possession of the subject parcel of land.

Hence the petition at bar. In its lone assignment of error, petitioner submits that the CA erred "when it upheld the jurisdiction of the [RTC] purely on the ground that [Yupangco] primarily seeks the recovery of ownership and possession of subject parcel of land, jurisdiction over which is lodged with regional trial courts, not the DARAB." 7

We grant the petition.

It is the rule that the jurisdiction of a tribunal, including a quasi-judicial office or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or all of such reliefs.8 It is also settled that jurisdiction should be determined by considering not only the status or relationship of the parties but also the nature of the issues or questions that is the subject of the controversy.9 Thus, if the issues between the parties are intertwined with the resolution of an issue within the exclusive jurisdiction of the DARAB, such dispute must be addressed and resolved by the DARAB.10

In the case at bar, the complaint filed by Yupangco seems at first blush to be within the jurisdiction of the RTC, as it has been denominated as "Recovery of Ownership and Possession, Violations of R.A. Nos. 6657 and 3844[,] as amended, Cancellation of Title, Reconveyance and [D]amages with Prayer for the Issuance of Preliminary Mandatory Injunction and/or Temporary Restraining Order." 11 But as correctly pointed out by the DAR, the allegations of the complaint actually impugn the CARP coverage of the landholding involved and its redistribution to farmer beneficiaries, and seek to effect a reversion thereof to the original owner, Yupangco.12 Thus, the complaint filed by Yupangco alleged, inter alia, the following:

(a) [Yupangco] was the registered owner of certain parcels of land13 primarily devoted to coconut plantation, under the administration and supervision of plaintiff corporation with several employees and other persons hired as laborers;14

(b) Sometime in 1993, the DAR placed the subject parcels of land under the Comprehensive Agrarian Reform Program of the government pursuant to the provisions of Republic Act No. 6657, and four (4) Transfer Certificate Titles over the subject land were subsequently issued in favor of BYARBAI;15

(c) [Yupangco] vehemently objected to the coverage of the subject parcels of land by the DAR and the valuation made by LBP, by filing protest and objection with DAR and LBP;16

(d) DAR, through the DAR Regional Director, Zamboanga City, issued the four questioned Transfer Certificates of Title (or Certificates of Land Ownership Awards-- CLOAs) to BYARBAI pursuant to R.A. No. 6657, without LBP paying [Yupangco] the just compensation of the subject parcels of land which valuation was then being contested before the DAR Adjudication Board;17

(e) Majority of the members of BYARBAI are not employees nor hired workers of [Yupangco], hence, [Yupangco] alleged that they should not have been given preference nor be entitled as allocatees in the subject parcels of land;18

(f) Soon after the CLOAs were issued to BYARBAI, the latter took possession of the subject parcels of land to the prejudice and damage of [Yupangco];19

(g) BYARBAI’s real motive in having the land distributed to them (pending resolution of all protests with the DAR and the contested valuation made by the LBP) was to convert the land into rice production resulting in the destruction of coffee plantations and other crops, including the cutting of several hundreds of

coconut trees. This conversion was illegal and in gross violation of Republic Act No. 6657 and Republic Act No. 3844, as amended, and other existing laws and Administrative Issuances.20

Yupangco also alleged in its complaint that other acts were committed "with the purpose of land speculation, for business or industrial purpose, for immediate sale thereof for business profits and not for planting, care and tending of the coconut plantation, which would defeat the purposes and policies of the Agrarian Reform Laws and [breached] the conditions of the questioned award of the land, rendering the acquisition by or distribution to [BYARBAI] as the tenant-tillers of the land null and void, and thus reverting back the ownership and possession thereof to [Yupangco]." 21

These allegations clearly show that Yupangco sought the recovery of the subject property by disputing its inclusion in the CARP, and imputing errors in the enforcement of the law pertaining to the agrarian reform. The primal issues raised in the complaint, viz.: protest against the CARP coverage, alleged breach of conditions of the DAR award under the CARP by the farmer beneficiaries resulting to forfeiture of their right as such; nonpayment of rentals by the farmers to the petitioner under R.A. No. 3844 (Agricultural Land Reform Code), gravitate on the alleged manner the implementation of the CARP under R.A. No. 6657 was carried out.

Under Section 50 of R.A. No. 6657, "all matters involving the implementation of agrarian reform" are within the DAR’s primary, exclusive and original jurisdiction, and at the first instance, only the DARAB—as the DAR’s quasi-judicial body, can "determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations."22

Ultimately, the complaint in the petition at bar seeks for the RTC to cancel Certificates of Land Ownership Awards (CLOAs) issued to the beneficiaries and the Transfer Certificates of Title (TCTs) issued pursuant thereto. These are reliefs which the RTC cannot grant, since the complaint essentially prays for the annulment of the coverage of the disputed property within the CARP, which is but an incident involving the implementation of the CARP. These are matters relating to terms and conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New Rules of Procedure.

The ruling in Social Security System (SSS) v. Department of Agrarian Reform23 is apropos. In this case, the former landowner, the SSS, made a similar attempt to circumvent the jurisdiction of the DARAB by filing a complaint for recovery of possession with the RTC of San Mateo, Rizal. When the RTC dismissed the complaint for lack of jurisdiction, the SSS came to this court for recourse. We ruled:

Irrefragably, the titles sought to be annulled by the SSS, namely, TCTs No. 1259 No. 1260 and No. 1261 originated from the CLOAs issued by the DAR in pursuance of, and in accordance with, the provisions of Rep. Act No. 6657, the Comprehensive Agrarian Reform Program.

Specifically, the SSS in its Complaint implored the trial court "to restrain the DAR from implementing Rep. Act No. 6657 and the defendants, farmers-beneficiaries from occupying/tilling, cultivating/disposing the properties."

Section 1, Rule II, 2002 DARAB Rules of Procedure provides that:

Section 1. Primary And Exclusive Original and Appellate Jurisdiction. — The board shall have primary and exclusive jurisdiction, both original

and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. 6657, Executive Order Nos. 228, 229, and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations. Specifically, such jurisdiction shall include but not be limited to cases involving the following:

a) The rights and obligations of persons, whether natural or juridical engaged in the management, cultivation and use of all agricultural lands covered by the CARP and other agrarian laws.

xxx       xxx       xxx

Specifically, such jurisdiction shall extend over but not limited to the following:

xxx       xxx       xxx

f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of landownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof;

Thus, taking its bearings from the above provision, Centeno v. Centeno explicitly and compellingly validated the jurisdiction of the DARAB over cases involving issuance of CLOAs, and went on further:

xxx under Section 50 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), the DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. The rule is that the DARAB has jurisdiction to try and decide any agrarian dispute or any incident involving the implementation of the Comprehensive Agrarian Reform Program.

Section 1, Rule II of the Revised Rules of Procedure of the DARAB provides:

Section 1. Primary, Original and Appellate Jurisdiction. — The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Orders Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and regulations.

In the relatively recent case of Rivera v. Del Rosario, this Court cited Section 1, Rule II, 2002 DARAB Rules of Procedure and reiterated that:

The DARAB has exclusive original jurisdiction over cases involving the rights and obligations of persons engaged in the management, cultivation and use of all agricultural lands covered by the Comprehensive Agrarian Reform Law.

Again in David v. Rivera, this Court pointed out that the jurisdiction over agrarian reform matters is now expressly vested in the DAR through the DARAB.

Indeed, Section 50 of R.A. No. 6657 confers on the Department of Agrarian Reform (DAR) quasi-judicial powers to adjudicate agrarian

reform matters. In the process of reorganizing the DAR, Executive Order No. 129-A created the DARAB to assume the powers and functions with respect to the adjudication of agrarian reform cases. Section 1, Rule II of the DARAB Rules of Procedure enumerates the cases falling within the primary and exclusive jurisdiction of the DARAB.

In an earlier ruling rendered in the case of Vda. de Tangub v. Court of Appeals, reiterated in Morta, Sr. v. Occidental and Heirs of the late Herman Rey Santos v. Court of Appeals, this Court decreed:

Section 1 of Executive Order No. 229 sets out the scope of the Comprehensive Agrarian Reform Program (CARP); it states that the program —

"xxx shall cover, regardless of tenurial arrangement and commodity produce, all public and private agricultural land as provided in Proclamation No. 131 dated July 22, 1987, including whenever applicable in accordance with law, other lands of the public domain suitable to agriculture."

Section 17 thereof

1) vested the Department of Agrarian Reform with "quasi-judicial powers to determine and adjudicate agrarian reform matters," and

2) granted it "jurisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture (DA), as well as 'powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions.'"

In Nuesa v. Court of Appeals the Court, in addition to re-echoing the jurisdiction of the DARAB, puts emphasis on the extent of the coverage of the term "agrarian dispute," thus:

As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program." The DARAB has primary, original and appellate jurisdiction "to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations."

Under Section 3(d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to include "(d) . . . any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary,

landowner and tenant, or lessor and lessee." (citations and underscoring omitted)24

IN VIEW WHEREOF, the petition is GRANTED. The assailed Decision of the Court of Appeals, dated November 21, 2003, and the Resolution dated April 21, 2004, in C.A.-G.R. SP No. 69699, entitled Department of Agrarian Reform (DAR) vs. Hon. Hakim S. Abdulwahid, as RTC Judge & Yupangco Cotton Mills, Inc., are REVERSED. Civil Case No. 5113, entitled Yupangco Cotton Mills, Inc. v. Buenavista Yupangco Agrarian Reform Beneficiaries Association, Inc. (BYARBAI), et al. is DISMISSED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 149553             February 29, 2008

NICOLAS LAYNESA and SANTOS LAYNESA, petitioners, vs.PAQUITO and PACITA UY, respondents.

D E C I S I O N

VELASCO, JR., J.:

In 1938, Robert Morley was the owner of a four (4)-hectare parcel of land in Barrio Tagbong, Pili, Camarines Sur. Petitioner Santos Laynesa was his tenant over two and a half (2 ½) hectares of the land. In 1947, Morley sold the 4 has. to Sixto Cuba, Sr. He maintained Santos as the tenant over the 2 ½-hectare portion while instituting petitioner Nicolas Laynesa, son of Santos, as his tenant over the remainder of the property. On May 20, 1974, Original Certificate of Title No. 1660 on the property was issued to Cuba, Sr.1

On October 25, 1979, Cuba, Sr. died intestate, survived by his children, Sixto Cuba, Jr., Carmelita Cuba Sunga, and Bienvenido Cuba. Santos and Nicolas continued as tenants, and delivered the owner's share of the produce to Cuba, Jr. and Bienvenido.2

On January 13, 1993, Cuba, Jr. executed a Deed of Absolute Sale of Unregistered Land, transferring the property to respondent Pacita Uy, married to respondent Paquito Uy, in consideration of PhP 80,000. Cuba, Jr. was named owner of the land. Notably, the Deed was not registered with the Register of Deeds. Later, Cuba, Jr. executed a Deed of Assignment or Transfer of Rights of the undelivered owner's share of the produce in favor of Pacita.

On July 13, 1993, Pacita demanded that the Laynesas vacate the land. She claimed that she had purchased the land. The Laynesas asked for proof of Pacita's acquisition, but she could not produce any.

Subsequently, Pacita returned and again demanded that the Laynesas vacate the property, this time exhibiting the Deed of Absolute Sale of Unregistrered Land signed by Cuba, Jr. Consequently, the Laynesas filed on October 13, 1993 a petition against Pacita with the Department of Agrarian Reform Adjudication Board (DARAB), docketed as DARAB Case No. 730 for Legal Redemption entitled Santos Laynesa, et al. v. Paquito Uy. The Laynesas primarily sought that they be allowed to redeem the land from Pacita.3

Thereafter, on November 25, 1993, Pacita filed a complaint docketed as DARAB Case No. 745 entitled Pacita Uy v. Santos Laynesa, et al. for Collection of Rentals and Ejectment against the Laynesas with the DARAB.

Cuba, Jr. died intestate on December 23, 1993.4

On February 10, 1994, the Laynesas deposited PhP 80,000 in the form of a Cashier's Check with the Clerk of Court of the DARAB by way of consignation of the redemption price of the property.

Meanwhile, the heirs of Bienvenido filed a petition with the Camarines Sur Regional Trial Court (RTC) for the judicial declaration of presumptive death of their father who had been missing since 1984.5

Afterwards, on June 20, 1994, the heirs of Bienvenido, with Reynoso and Carmelita Sunga, filed a Complaint docketed as Civil Case No. P-1963 for Annulment of Sale of Real Estate against the spouses Uy with the Camarines Sur RTC. They prayed that the court declare the Deed of Absolute Sale of Unregistered Land executed by Cuba, Jr. in favor of the spouses Uy as null and void, and the property returned to Cuba, Sr.'s intestate estate. The DARAB dismissed the complaint without prejudice to the two cases filed before it by the parties.6

Subsequently, the parties in Civil Case No. P-1963 amicably settled their dispute. In a Compromise Agreement approved by the RTC, the parties agreed to divide the property into two portions. Two hectares of rice lands would be transferred to the spouses Uy, and the remaining portion to Cuba, Sr.'s heirs. Thereafter, the Register of Deeds issued Transfer Certificate of Title (TCT) No. 23276 over a portion of the property with an area of 20,000 square meters in the names of the spouses Uy.

Meanwhile, Pacita obtained a certification from the Municipal Agricultural Office (MAO) that the property was not prime agricultural property, and from the Municipal Agrarian Reform Office (MARO) that TCT No. 23276 was not covered by Operation Land Transfer (OLT) or by Presidential Decree No. (PD) 27. The certifications were sought so the land could be reclassified as industrial land.

On May 29, 1995, the Municipal Council of Tagbong, Pili, Camarines Sur approved Resolution No. 67, which embodied Ordinance No. 28 and reclassified the land from agricultural to industrial.

On July 17, 1995, the Laynesas filed a Complaint dated July 13, 1995, docketed as DARAB Case No. V-RC-028 and entitled Nicolas Laynesa, et al. v. Paquito Uy, et al. for Threatened Ejectment and Redemption with a Prayer for the issuance of Writ of Preliminary Injunction with the DARAB. In the Complaint, the Laynesas sought to redeem the property covered by TCT No. 23276 for PhP 40,000.

In their Answer dated August 15, 1995, the spouses Uy alleged that the Laynesas had no cause of action against them, and even assuming that the Laynesas had, the action was already barred by estoppel and laches, the complaint was already moot and academic, and the DARAB had no jurisdiction since the land had already been reclassified as industrial land.

On January 12, 1996, DARAB Provincial Adjudicator Isabel E. Florin issued a Decision, the dispositive portion of which states:

WHEREFORE, the foregoing considered, judgment is hereby rendered

1. Granting the petition for redemption by the plaintiffs herein of the two-hectare Riceland now titled in the name of Pacita E. Uy with TCT No. T-23276, for Nicolas Laynesa, his .5 hectare tillage and for Santos Laynesa, his 1.5 hectares tillage in the consolidated amount of P60,000.00;

2. Ordering the conveyance of subject lots to herein plaintiffs as above-stated;

3. Ordering defendants to pay plaintiffs temperate damages of P15,000.00; exemplary damages of P20,000.00; Attorney's fees of P12,000.00; and appearance fees of P2,400.00.

4. Declaring the injunction permanent, unless the appropriate Order allowing conversion is thereby presented.

SO ORDERED.7

Thereafter, the spouses Uy filed a Motion for Reconsideration. In an Order dated February 27, 1996,8 the DARAB affirmed the Decision of the adjudicator, but with the modification to set aside the award of damages.

The spouses Uy appealed to the Court of Appeals (CA).

The CA ruled DARAB without jurisdiction

On May 16, 2001, the CA issued a Decision in CA-G.R. SP No. 59454, reversing the Decision of the DARAB. The dispositive portion of the CA Decision reads:

IN THE LIGHT OF ALL THE FOREGOING, the Decision of the DARAB, Annex "A" of the Petition and its Resolution, Annex "B" of the Petition are set aside and reversed. The Complaint of the Respondents and the counterclaims of the Petitioners are DISMISSED.

SO ORDERED.9

According to the CA, the evidence on record shows that when the Laynesas filed their action with the DARAB, the property was no longer agricultural but had been reclassified. Thus, the DARAB had no jurisdiction.

Hence, we have this Petition for Review on Certiorari under Rule 45.

The Issues

[T]he Honorable Court of Appeals (Fourteenth Division), seriously erred and/or committed grave error in:

A. Holding that at the time of the filing of the Complaint (V-RC-028-CS-Branch 1) the land subject matter of the case ceases to be agricultural by virtue of the reclassification made by Municipal Ordinance No. 28 of Pili, Camarines Sur, so that the DARAB has no jurisdiction over the dispute involving said land and that the Decision of the DARAB is null and void.

B. Holding that the reclassification alone of an agricultural land by a Municipal Ordinance from agricultural to any other uses without the necessary conversion Order from the DAR is enough to divest the DAR of jurisdiction to hear and determine any agrarian disputes involving the land.10

The pivotal issue in this case is whether the reclassification of a lot by a municipal ordinance, without the Department of Agrarian Reform's (DAR's) approval, suffices to oust the jurisdiction of the DARAB over a petition for legal redemption filed by the tenants.

There are strict requirements for the

valid reclassification of land by a local government unit

The resolution of this case is not that simple.

There is no question that petitioners-Laynesas are the tenants of the previous owner of the land. As such, disputes pertaining to the land tenancy were within the jurisdiction of the DAR. However, respondents-spouses Uy posit that after the issuance of Municipal Council Resolution No. 67, reclassifying the land on May 29, 1995, the land ceased to be agricultural and is therefore beyond the jurisdiction of the DARAB.

Previously, under Republic Act No. (RA) 3844, all agrarian disputes fell within the exclusive jurisdiction of the Court of Agrarian Relations. Later, the jurisdiction over such disputes went to the RTCs.11 When RA 6657, otherwise known as the Comprehensive Agrarian Reform Law, took effect on June 15, 1988, the adjudication of agrarian reform disputes was placed under the jurisdiction of the DAR, thus:

Section 50. Quasi-Judicial Powers of the DAR.-The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).

x x x x

Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory.

However, Section 56 of RA 6657 vested original and exclusive jurisdiction over controversies involving the determination of just compensation and prosecution of all criminal offenses arising from violations of RA 6657 to RTCs designated as Special Agrarian Courts.

From the cited legal provisions, it cannot be disputed that the DAR, through the DARAB, shall exercise quasi-judicial functions and has exclusive original jurisdiction over all disputes involving the enforcement and implementation of all agrarian reform laws.

Sec. 4 of RA 6657 tells us which lands are covered by the Comprehensive Agrarian Reform Program, thus:

Section 4. Scope.-The Comprehensive Agrarian Reform Law of 1988 shall cover; regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. (Emphasis supplied.)

However, in 1991, RA 7160 or the Local Government Code was passed into law, granting local government units the power to reclassify land. Being a later law, RA 7160 shall govern in case of conflict between it and RA 6657, as to the issue of reclassification. Title I, Chapter 2, Sec. 20 of RA 7160 states:

SEC. 20. Reclassification of Lands.--(a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to third class municipalities, ten percent (10%); and

(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to [RA 6657], otherwise known as "The Comprehensive Agrarian Reform Law", shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act.

(b) The President may, when public interest so requires and upon recommendation of the National Economic and Development Authority, authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph.

(c) The local government units shall, in conformity with existing laws, continue to prepare their respective comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided, That the requirements for food production, human settlements, and industrial expansion shall be taken into consideration in the preparation of such plans.

(d) Where approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof.

(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of [RA] 6657.

Pursuant to RA 7160, then President Fidel Ramos issued Memorandum Circular No. (MC) 54 on June 8, 1993, providing the guidelines in the implementation of the above Sec. 20 of the Local Government Code, as follows:

SECTION 1. Scope and Limitations.-(a) Cities and municipalities with comprehensive land use plans reviewed and approved in accordance with EO 72 (1993), may authorize the reclassification of agricultural lands into non-agricultural uses and provide for the manner of their utilization or disposition, subject to the limitations and other conditions prescribed in this Order.

(b) Agricultural lands may be reclassified in the following cases:

(1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture (DA), in accordance with the standards and guidelines prescribed for the purpose; or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes as determined by the sanggunian concerned, the city/municipality concerned should notify the DA, HLRB, DTI, DOT and other concerned agencies on the proposed reclassification of agricultural lands furnishing them copies of the report of the local development council including the draft ordinance on the matter for their comments, proposals and recommendations within seven (7) days upon receipt.

(c) However, such reclassification shall be limited to a maximum of the percentage of the total agricultural land of a city or municipality at the time of the passage of the ordinance as follows:

(1) For highly urbanized and independent component cities, fifteen percent (15%);

(2) For component cities and first to third class municipalities, ten percent (10%); and

(3) For fourth to sixth class municipalities, five percent (5%).

(d) In addition, the following types of agricultural lands shall not be covered by the said reclassification:

(1) Agricultural lands distributed to agrarian reform beneficiaries subject to Section 65 of RA 6557;

(2) Agricultural lands already issued a notice of coverage or voluntarily offered for coverage under CARP.

(3) Agricultural lands identified under AO 20, s. of 1992, as non-negotiable for conversion as follows:

(i) All irrigated lands where water is available to support rice and other crop production;

(ii) All irrigated lands where water is not available for rice and other crop production but within areas programmed for irrigation facility rehabilitation by DA and National Irrigation Administration (NIA); and

(iii) All irrigable lands already covered by irrigation projects with form funding commitments at the time of the application for land conversion or reclassification.

(e) The President may, when public interest so requires and upon recommendation of the National Economic Development Authority (NEDA), authorize a city or municipality to reclassify lands in excess of the limits set in paragraph (d) hereof. For this purpose, NEDA is hereby directed to issue the implementing guidelines governing the authority of cities and municipalities to reclassify lands in excess of the limits prescribed herein.

SECTION 2. Requirements and Procedures for Reclassification.-(a) The city or municipal development council (CDC/MDC) shall recommend to the sangguniang panlungsod or sangguniang bayan, as the case may be, the reclassification of agricultural lands within its jurisdiction based on the requirements of local development.

(b) Prior to the enactment of an ordinance reclassifying agricultural lands as provided under Sec. 1 hereof, the sanggunian concerned must first secure the following certificates [from] the concerned national government agencies (NGAs):

(1) A certification from DA indicating -

(i) the total area of existing agricultural lands in the LGU concerned;

(ii) that which lands are not classified as non-negotiable for conversion or reclassification under AO 20 (1992); and

(iii) that the land ceases to be economically feasible and sound for agricultural purposes in the case of Sec. 1 (b-1).

(2) A certification from DAR indicating that such lands are not distributed or not covered by a notice of coverage or not voluntarily offered for coverage under CARP.

(c) The HLRB shall serve as the coordinating agency for the issuance of the certificates as required under the preceding paragraph. All applications for reclassification shall, therefore, be submitted by the concerned LGUs to the HLRB, upon receipt of such application, the HLRB shall conduct initial review to determine if:

(1) the city or municipality concerned has an existing comprehensive land use plan reviewed and approved in accordance with EO 72 (1993); and

(2) the proposed reclassification complies with the limitations prescribed in SECTION 1 (d) hereof.

Upon determination that the above conditions have been satisfied, the HLRB shall then consult with the concerned agencies on the required certifications. The HLRB shall inform the concerned agencies, city or municipality of the result of their review and consultation. If the land being reclassified is in excess of the limit, the application shall be submitted to NEDA.

Failure of the HLRB and the NGAs to act on a proper and complete application within three months from receipt of the same shall be deemed as approved thereof.

(d) Reclassification of agricultural lands may be authorized through an ordinance enacted by the sangguniang panlungsod or sangguniang bayan, as the case may be, after conducting public hearings for the purpose. Such ordinance shall be enacted and approved in accordance with Articles 107 and 108 of the IRR of the LGC.

(e) Provisions of Sec. 1 (b-2) hereof to the contrary notwithstanding, the sanggunian concerned shall seek the advice of DA prior to the enactment of an ordinance reclassifying agricultural lands. If the DA has failed to act on such request within thirty (30) days from receipt thereof, the same shall be deemed to have been complied with.

Should the land subject to reclassification is found to be still economically feasible for agriculture, the DA shall recommend to the LGU concerned alternative areas for development purposes.

(f) Upon issuance of the certifications enumerated in Section 2 (b) hereof, the sanggunian concerned may now enact an ordinance authorizing the reclassification of agricultural lands and providing for the manner of their utilization or disposition. Such ordinance shall likewise update the comprehensive land use plans of the LGU concerned. (Emphasis supplied.)

It is because of the authority granted to a city or municipality by Sec. 20 of RA 7160 coupled with the implementing guidelines laid down in MC 54 dated June 8, 1993 that the CA was convinced to rule that the disputed lot is no longer agricultural but industrial land and, hence, the DARAB does not have or has lost jurisdiction over the subject matter of DARAB Case No. V-RC-028.

This position is incorrect.

Despite the reclassification of an agricultural land to non-agricultural land by a local government unit under Sec. 20 of RA 7160, the DARAB still retains jurisdiction over a complaint filed by a tenant of the land in question for threatened ejectment and redemption for the following reasons:

(1) Jurisdiction is determined by the statute in force at the time of the commencement of the action.12 Likewise settled is the rule that jurisdiction over the subject matter is determined by the allegations of the complaint.13 DARAB Case No. V-RC-028 was filed by the tenants of an agricultural land for threatened ejectment and its redemption from respondents. It cannot be questioned that the averments of the DARAB case clearly pertain to an agrarian reform matter and involve the implementation of the agrarian reform laws. Such being the case, the complaint falls within the jurisdiction of the DARAB under Sec. 50 of RA 6657 on the quasi-judicial powers of the DAR. It bears stressing that the DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of the

agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR). Primary jurisdiction means in case of seeming conflict between the jurisdictions of the DAR and regular courts, preference is vested with the DAR because of its expertise and experience in agrarian reform matters. Sec. 50 is also explicit that except for the DA and DENR, all agrarian reform matters are within the exclusive original jurisdiction of the DAR.

(2) Sec. 20(e) of RA 7160 is unequivocal that nothing in said section shall be construed "as repealing, amending or modifying in any manner the provisions of [RA] 6657." As such, Sec. 50 of RA 6657 on quasi-judicial powers of the DAR has not been repealed by RA 7160.

In view of the foregoing reasons, we rule that the DARAB retains jurisdiction over disputes arising from agrarian reform matters even though the landowner or respondent interposes the defense of reclassification of the subject lot from agricultural to non-agricultural use.

On the issue of whether there has been a valid reclassification of the subject lot to industrial land, we rule that respondents failed to adduce substantial evidence to buttress their assertion that all the conditions and requirements set by RA 7160 and MC 54 have been satisfied.

Respondent Pacita only procured a MAO certification that the property was not prime agricultural property. The MARO certified that the land was not covered by the OLT under PD 27. These two certifications will not suffice for the following reasons:

(1) Sec. 20 of RA 7160 requires submission of the recommendation or certification from the DA that the land ceases to be economically feasible or sound for agricultural purposes. In this case, the MAO certification attests only that the lot is no longer "prime agricultural property."

(2) Sec. 20 requires a certification from the DAR that the land has not yet been distributed to beneficiaries under RA 6657 which took effect on June 15, 1988 nor covered by a notice of coverage. In the case at bar, the MARO certification which pertains only to PD 27 does not suffice.

(3) Respondents have not shown any compliance with Sec. 2 of MC 54 on the additional requirements and procedures for reclassification such as the Housing and Land Use Regulatory Board's report and recommendation, the requisite public hearings, and the DA's report and recommendation.

Based on the foregoing reasons, respondents have failed to satisfy the requirements prescribed in Sec. 20 of RA 7160 and MC 54 and, hence, relief must be granted to petitioners.

Landowners must understand that while RA 7160, the Local Government Code, granted local government units the power to reclassify agricultural land, the stringent requirements set forth in Sec. 30 of said Code must be strictly complied with. Such adherence to the legal prescriptions is found wanting in the case at bar.

Be that as it may, the DARAB erred in awarding damages to petitioners.

In Saba v. Court of Appeals, we ruled that the exercise of one's rights does not make him liable for damages, thus: "One who exercises his rights does no injury. Qui jure suo utitur nullum damnum facit. If damage results from a person's exercising his legal rights, it is damnum absque injuria."14

This principle was further explained by this Court in the case of Custodio v. Court of Appeals, to wit:

However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an individual was injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort liability merely because the plaintiff suffered some pain and suffering.

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or loss to another but which violate no legal duty to such other person, and consequently create no cause of action in his favor. In such cases, the consequences must be borne by the injured person alone. The law affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong.

In other words, in order that the law will give redress for an act causing damage, that act must be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many cases, a person sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury, that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum absque injuria.15

Thus, in Government Service Insurance System v. Labung-Deang16 and Premiere Development Bank v. Court of Appeals,17 this Court ruled that temperate damages will only be awarded by virtue of the wrongful act of a party.

Whereas in Cathay Pacific Airways, Ltd. v. Vasquez, we ruled that exemplary damages may only be awarded if the act of the offender is attended by bad faith or done in wanton, fraudulent, or malevolent manner.18

In the instant case, the RTC awarded damages to petitioners on the ground that respondents dumped earthfill materials during the pendency of the case. It must be pointed out that the RTC did not issue a preliminary injunction or temporary restraining order (TRO) against respondents.

Contrary to this finding of the trial court, respondents did not act in bad faith or in a wanton, fraudulent, or malevolent manner; consequently, petitioners are not entitled to an award for damages. Respondents' dumping of earth filling materials on the subject land was but a lawful exercise of their rights as owners of the land. It must be remembered that respondents attempted to have the land reclassified through the Municipal Government of San Juan, Pili, Camarines Sur by virtue of Municipal Council Resolution No. 67 which embodied Ordinance No. 28. Given the disputable presumption that official duty was regularly performed,19 respondents were justified to presume that the reclassification of the

land was lawful. It was also natural for respondents to conclude that such reclassification resulted in the dispossession of petitioners as tenants, there being no tenants of industrial land. Thus, respondents, at the time, could lawfully exercise their proprietary rights over the land, including the dumping of earth filling materials thereon. Moreover, the pendency of the case before the RTC, absent a preliminary injunction or TRO against respondents, would not preclude respondents from exercising their rights. Although this reclassification has now been declared to be ineffectual, for failing to comply with the provisions of RA 7160, respondents cannot be made liable for damages. Respondents' exercise of acts of ownership over the land, at a time that the reclassification had not yet been declared as invalid and ineffectual, is a lawful exercise of their rights. And even though this may have prejudiced or injured petitioners, respondents cannot be made liable for it. As stated, respondents cannot be penalized for a lawful act.

Similarly, the instant case does not fall under any of the grounds set forth in Article 2208 of the Civil Code to justify the award for attorney's fees and expenses of litigation. Thus, there are also no grounds for the DARAB's grant of attorney's fees and appearance fees in favor of petitioners.

Therefore, the RTC's award for exemplary and temperate damages, as well as attorney's and appearance fees, must be deleted.

WHEREFORE, the petition is GRANTED. The May 16, 2001 CA Decision in CA-G.R. SP No. 59454 is REVERSED and SET ASIDE. The February 27, 1996 DARAB Order and January 12, 1996 Decision of DARAB Provincial Adjudicator Florin in DARAB Case No. V-RC-028 are AFFIRMED with the MODIFICATION that the award for temperate and exemplary damages and attorney's and appearance fees is DELETED.

No costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 124915             February 18, 2008

RIZAL SECURITY & PROTECTIVE SERVICES INC., and/or RUFINO S. ANTONIO, JR., petitioners, vs.HON. DIRECTOR ALEX E. MARAAN, Regional Sheriff of DOLE, Cordillera Administrative Region, and RICO GOMEZ, ROLANDO TUPAS, DETECIO VICENTE, EDWIN TUPAS, ROBERTO RUIZ, RONNIE LEABRES, DENNIS LEABRES, and SANDY FIGER, respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

The Petition brought before this Court is a special civil action under Rule 65 of the Revised Rules of Court, with petitioners praying for the issuance of a writ of certiorari and a temporary restraining order (TRO) enjoining from execution the Order1 dated 24 January 1996 issued by public respondent Alex E. Maraan, then Department of Labor and Employment (DOLE) Regional Director for the Cordillera Administrative Region (CAR), in CAR00-9507-CI-25.

Petitioner Rizal Security and Protective Service, Inc. (Rizal Security) is a corporation organized under Philippine laws and is doing business as a security agency. Petitioner Rufino S. Antonio, Jr. (Antonio) is the president of the aforesaid corporation. On the other hand, private respondents were formerly employed by petitioner Rizal Security as security guards detailed at Rainbow End Village in Baguio City.

The instant case arose on 19 May 1995, when private respondents Rico Gomez (Gomez) and Edwin O. Tupas (Tupas), who were then still employed as security guards of petitioner Rizal Security, filed a Complaint with the DOLE-CAR Regional Office, docketed as CAR00-9507-CI-25, to seek assistance regarding petitioners’ alleged violation of laws on labor standards, to wit:

1. Illegal deduction of wages

2. Underpayment of night shift differential

3. Underpayment of minimum wage

4. Nonpayment of overtime pay and legal holiday pay

5. Nonpayment of 13th month pay

Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment or his duly authorized representative under Article 128 of the Labor Code, as amended, an inspection was conducted on petitioner Rizal Security’s establishment by the Labor Inspector on 1 June 1995. The said inspection yielded the following violations as indicated in the Notice of Inspection Results dated 9 October 1995:

1. Underpayment of wages

2. Underpayment of COLA

3. Nonpayment of overtime pay

4. Nonpayment of service incentive leave

5. Underpayment of Night-Shift Differential

6. Frequency of Payment

7. Nonpayment of 13th month pay

8. No emergency medicines2

Hearings were scheduled by the DOLE-CAR to give petitioners the opportunity to present their side.

In the meantime, two significant events apparently took place.

First, private respondents signed and submitted a resignation letter addressed to the personnel manager of petitioner Rizal Security on 10 July 1995, to be effective 1 September 1995.3

And second, a notice of Termination of Services dated 25 July 1995 was sent by Dominador N. Valmonte, Jr., Resident Manager of Rainbow End Village to petitioner Antonio, President of co-petitioner Rizal Security.4 Through the said Notice, Rainbow End Village informed petitioner Rizal Security of the termination of their Security Services also effective 1 September 1995.

In a hearing conducted on 23 October 1995 before the DOLE-CAR Regional Office, petitioner Rizal Security submitted a Manifestation and Motion assailing the jurisdiction of the DOLE-CAR Regional Office over the case. Petitioner Rizal Security alleged that the DOLE-CAR Regional Office had lost its jurisdiction to try the case considering there was no longer any employer-employee relationship between petitioner Rizal Security and private respondents when the latter ceased to be employees of petitioner Rizal Security due to their resignation effective 1 September 1995.

Thereafter, on 24 January 1996, the DOLE-CAR Regional Office, through public respondent Director Maraan, issued the assailed Order denying petitioner Rizal Security’s Manifestation and Motion. It further ordered the payment of the deficiencies owing the private respondents amounting to P560,989.70. The Order reads:

WHEREFORE, in the light of the foregoing, the manifestation and motion filed by the respondent, Rizal Security & Protective Service, through Atty. Salvador M. Solis, is hereby DENIED and is hereby ORDERED to pay the computed deficiencies owing to the affected Security Guards in the total amount of FIVE HUNDRED SIXTY THOUSAND, NINE HUNDRED EIGHTY-NINE PESOS & 70/100 (P560,989.70) covering eight (8) guards which is hereto itemized as to the following employees, to wit:

NAME TOTAL

1. Rico E. Gomez P 99,088.125

2. Rolando Tupas P110,377.170

3. Detecio S. Vicente P107,904.92

4. Edwin Tupas P113,532.67

5. Roberto P. Ruiz P110,604.92

6. Ronnie Llabres P 9,608.25

7. Dennis Llabres P 6,626.60

8. Sandy Figer     P 3,247.05

P560,989.705

This office further holds Mr. Dominador Valmonte, Resident Manager of Rainbow End Village, to be jointly and severally liable pursuant to Articles 107 and 109 of the Labor Code of the Philippines.

In view hereof, respondents Mr. Rufino Antonio of Rizal Security and Protective Service and Mr. Dominador Valmonte, of Rainbow End Village, are directed to pay the above-stated amount within ten (10) calendar days from receipt hereof. Otherwise, this Office shall be constrained to issue a Writ of Execution resulting from non-compliance thereof.5

Petitioners deny that a copy of such Order was ever officially sent to their undersigned counsel. According to petitioners’ counsel:

Despite the fact that the records of the said case disclose that the appearance of the undersigned as counsel for the petitioner has been duly acknowledged and recognized, no copy of such Order was ever sent officially to the undersigned counsel. The undersigned counsel was able to secure a copy thereof from the DOLE Regional Office in Baguio City only on June 18, 1996.6

On 8 May 1996, counsel for petitioners received a copy of the Writ of Execution dated 12 March 1996 issued by public respondent DOLE-CAR Director Maraan ordering the Regional Sheriff to enforce the Order dated 24 January 1996. Pertinent portions of the Writ of Execution are quoted below:

WHEREAS, a copy of said Order was received by respondent on February 1, 1996.

WHEREAS, the period for appeal has already expired without respondent having perfected an appeal from said decision.

WHEREAS, the Order has now become final and executory but respondent has not yet effected the necessary payments of the Monetary Awards due the employee/s concerned.

NOW THEREFORE, pursuant to the provisions of the Labor Code as amended as well as the Rules in the disposition of Labor Standard Cases in the Regional Office, you are hereby directed to cause Messers. Rufino Antonio/ Dominador Valmonte and/or Rizal Security and Protective Service with business address at 37 Rainbow End Village, Tacay Road, Pinsao Proper, Baguio City or wherever they/he/it may be found to pay the amount of FIVE HUNDRED SIXTY THOUSAND NINE HUNDRED EIGHTY-NINE (P560,989.70) PESOS and 70/100 plus legal fee for execution in the amount of FIVE THOUSAND ONE HUNDRED (P5,100.00) PESOS from the goods, chattels or other properties of the respondent/s and to tender to the concerned employees through the Department of Labor and Employment their claims as aforementioned.7

Petitioners are now asking for the issuance of a writ of certiorari and a Temporary Restraining Order to enjoin public respondents from executing the Order of 24 January 1996 and from enforcing the Writ of Execution. Petitioners pray that this Court order that the case be endorsed, on the ground of lack of jurisdiction, from the DOLE-CAR Regional Office to the National Labor Relations Commission (NLRC) and that judgment be rendered

annulling and setting aside the 24 January 1996 Order and quashing the 12 March 1996 Writ of Execution.

Petitioners presented the following assignment of errors:

I. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE ORDER DATED JANUARY 24, 1996 WITHOUT OR IN EXCESS OF HIS JURISDICTION AND IN NOT ENDORSING THE CASE TO THE APPROPRIATE BRANCH OF THE NATIONAL LABOR RELATIONS COMMISSION FOR HEARING.

II. THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN ISSUING THE WRIT OF EXECUTION AGAINST PETITIONERS PREMATURELY AND CONTRARY TO LAW OR WITHOUT DUE PROCESS OF LAW.

III. GRANTING FOR THE SAKE OF ARGUMENT THAT THE ORDER DATED JANUARY 24, 1996 IS VALID, THE HONORABLE DOLE REGIONAL DIRECTOR GRAVELY ERRED IN DECLARING PETITIONER RUFINO ANTONIO AS LIABLE JOINTLY AND SEVERALLY FOR THE PAYMENT OF THE MONETARY CLAIMS OF THE PRIVATE RESPONDENTS.

The Petition was initially dismissed by this Court on 24 July 1996 for failure to comply strictly with the Rules of Court in not submitting a certified true copy of the questioned Writ of Execution dated 12 March 1996. However, upon Motion for Reconsideration and compliance with the foregoing requirement, this Court resolved to grant the reconsideration, thus reinstating the Petition.

The pivotal issue to be resolved in this Petition is whether public respondent DOLE-CAR Regional Director Maraan acted without jurisdiction in issuing the Order dated 24 January 1996.

Certiorari being a remedy narrow in its scope and inflexible in character, it is limited to the issue of jurisdiction and grave abuse of discretion.8 This is the same rule followed in applying the Supreme Court’s power to review labor cases which is limited to the issue of jurisdiction and grave abuse of discretion.9 As this Court has eloquently explained in Condo Suite Club Travel, Inc. v. National Labor Relations Commission10:

Resort to a special civil action for certiorari under Rule 65 of the Rules of Court is limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and grave abuse of discretion amounting to lack of jurisdiction. The respondent acts without jurisdiction if he does not have the legal power to determine the case. There is excess of jurisdiction where the respondent, being clothed with the power to determine the case, oversteps his authority as determined by law. And there is grave abuse of discretion where the respondent acts in a capricious, whimsical, arbitrary or despotic manner in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction. x x x.

This Court has explained the role and function of Rule 65 as an extraordinary remedy in numerous pronouncements, among which is the case of Caltex Refinery Employees Association v. Brillantes11 citing Flores v. National Labor Relations Commission,12 to wit:

It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases -- those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of certiorari

is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of public respondent NLRC’s evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. (Emphasis supplied.)

After a careful scrutiny of petitioners’ arguments, this Court sustains the jurisdiction of public respondent DOLE-CAR Director Maraan over CAR00-9507-CI-25 and, thus, finds that the writ of certiorari does not lie herein.

In support of their position, petitioners call the attention of this Court to the fact that Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices stipulates:

Section 3. Complaints where no employer-employee relationship actually exists. – Where employer-employee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship no longer exists, the case, whether or not accompanied by an allegation of illegal dismissal, shall immediately be endorsed by the Regional Director to the appropriate Branch of the National Labor Relations Commission (NLRC).

It follows, petitioners contend, that where the employer-employee relationship no longer exists by the fact of its severance, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the Labor Arbiters. Petitioners claim that the supervening event of private respondents’ voluntarily resigning from petitioners’ employ in the course of the proceedings in CAR00-9507-CI-25 automatically ousted public respondent DOLE-CAR Director Maraan of his jurisdiction to continue to hear and determine said case. Petitioners insist that public respondent DOLE-CAR Director Maraan should have desisted from further handling the case and should have instead indorsed it to the appropriate regional branch of the NLRC for further hearing, since the jurisdiction over the same belongs to the Labor Arbiter.

Petitioners’ reliance on Rule II, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices is inappropriate.

While it is true that the quoted provision states that where employee-employer relations have been severed, complaints or claims for payment of monetary benefits fall within the exclusive and original jurisdiction of Labor Arbiters; however, such is not the case in the present Petition. To emphasize, at the time private respondents instituted CAR00-9507-CI-25 by filing a complaint with the DOLE-CAR Regional Office, they were still employees of petitioners.

Private respondents Gomez and Tupas filed the Complaint on 19 May 1995 before the DOLE-CAR Regional Office, seeking a routine inspection to be conducted on petitioner Rizal Security relative to underpayment in wages and nonpayment of other benefits under the Labor Code. At the time of filing of the Complaint on said date, the employer-employee relationship between private respondents and petitioner Rizal Security had not yet been severed. As alleged by petitioner Rizal Security itself, deemed as an admission on its part, the employer-employee relations between petitioner Rizal Security and private respondents were terminated on 1 September 1995, or more than three months after the institution of CAR00-9507-CI-25 before the DOLE Regional Office.

Well-settled is the rule that the jurisdiction of a court over the subject matter of an action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted

therein.13 Time and again, this Court has held that the allegations in the complaint determine the nature of the action and, consequently, the jurisdiction of the courts.14

It is but axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein, the character of the relief prayed for, and the law existing at the time of the filing of the complaint or petition.15

It has already been established in a plethora of cases that once jurisdiction is vested, the same is retained up to the end of litigation.16 Neither can it be ousted by subsequent events, although of a character which would have prevented jurisdiction from attaching in the first instance. Even subsequent legislation vesting jurisdiction over such proceedings in another tribunal will not affect such jurisdiction.17

Considering that it is uncontroverted that there still existed an employer-employee relationship between petitioner Rizal Security and private respondents at the time of filing of the complaint on 19 May 1995, and that the case is one involving violations of labor standard provisions of the Labor Code, this Court finds that DOLE-CAR Director Maraan properly retained jurisdiction to hear and decide CAR00-9507-CI-25 and issue the assailed Order dated 24 January 1996, pursuant to the power vested in him by Article 128(b) of the Labor Code, which states:

Art. 128. Visitorial and Enforcement Power. –

x x x x

(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.

Secondary to the issue of jurisdiction is the issue of whether or not public respondent DOLE-CAR Director Maraan acted without or in excess of his jurisdiction in issuing the Writ of Execution dated 12 March 1996.

Petitioners insist that the issuance of the said Writ of Execution was unlawful and premature, without legal basis or due process of law, and implemented against a person not a party litigant.

Petitioners maintain that since the DOLE-CAR Regional Office never furnished petitioners’ counsel a copy of the 24 January 1996 Order, then the said Order never became final with respect to them, and cannot be the subject of a Writ of Execution.

Rule II, Section 4 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that notices and copies of orders shall be served on the parties or their duly authorized representatives at their last known office or home addresses or, if they are represented by counsel, through the latter.

This procedure on service of Orders and Decisions as provided under the Rules on the Disposition of Labor Standards Cases in the Regional Offices is in line with the established rule that notice to counsel is notice to party and when a party is represented by counsel,

notices should be made upon the counsel of record at his given address to which notices of all kinds emanating from the court should be sent.

Petitioners’ counsel never received an official copy of the 24 January 1996 Order and was only able to personally secure a copy thereof from the DOLE-CAR Regional Office in Baguio City on 18 June 1996.18 The records support this allegation. The following is a quote from an internal DOLE correspondence attached to the records of the case:

Is it okay with you if we will schedule this for another hearing despite the Dismissal of respondents’ petition for certiorari?

In the interest of justice respondents did not receive a copy of our Order dated 1/24/96 as it was "returned to sender" by the post office.19

A Notice and a copy of the Order dated 24 January 1996 was sent by the DOLE-CAR Regional Office through registered mail to the address of petitioners’ then counsel-of-record Atty. Salvador Solis (Atty. Solis) on 29 January 1996. However, the same was not received by Atty. Solis. Indicated on the envelope containing the Notice of the Order dated 24 January 1996 were the following notations by the post office on 5 February 1996:

RTS20 for better addressNo #5 at Sto. Nino Street

Not at … (illegible)No such number #5 at Sto. Nino St.

2-5-96

This Court notes that prior notices of the hearings were all sent to the very same address and were received always by petitioners’ counsel. It is a source of no little wonder, therefore, why the post office reported that there was "[n]o such number #5 at Sto. Niño St." We could only conclude, at this time, that the notice was not received by the petitioners not through their fault. Thus, we say that the post office failed to deliver the Notice and copy of the 24 January 1996 Order thereto. This fact was admitted by public respondent.21

Private respondents further argue that petitioners may already be deemed notified of the contents of the 24 January 1996 Order for it merely reiterated the findings in the report on the inspection conducted on 1 June 1995 which was served and duly received by petitioners. This Court is very much aware that the nature of proceedings before the DOLE Regional Office shall be summary and non-litigious in nature, and that the technicalities of law and procedure and the rules governing admissibility and sufficiency of evidence obtaining in the courts of law do not strictly apply thereto, subject, only to the requirements of due process.22

However, the foregoing is obviously not the notice contemplated under the Labor Code. The inspection report is undeniably a distinct and separate document from the Order dated 24 January 1996. More than merely re-stating the findings on the inspection report, the Order of 24 January 1996 ruled on the Manifestation and Motion of the petitioners assailing the jurisdiction of the DOLE-CAR Regional Office by refusing to dismiss and retaining jurisdiction over CAR00-9507-CI-25.

Procedural rules are tools designed to facilitate the adjudication of cases and not defeat justice.23 While the Court, in some instances, allows a relaxation in the application of the rules, it was never intended to forge a bastion for a violation of due process. And although it is true that litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to insure an orderly and speedy administration of justice.

The essence of due process is to provide an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one’s side or seek a reconsideration of the action or ruling complained of.

Rule III, Section 17 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices provides that an aggrieved party may file a motion for reconsideration of the Order of the Regional Office within seven calendar days from receipt by him of a copy of said Order. The judgment becomes "final and executory" when the reglementary period to appeal lapses, and no appeal is perfected within such period. In this case, petitioners never had the opportunity to contest the Order of 24 January 1996 considering that they never received a notice of the issuance thereof nor were they provided with a copy of the same.

Without receipt by the petitioners of the notice and copy of the Order dated 24 January 1996, the same has not yet become final and executory and the Writ of Execution issued pursuant thereto on 12 March 1996 was premature and without legal basis. This renders the Writ of Execution fatally defective and, thus, null.

Finally, the Court declines from addressing at this point the question of petitioner Antonio’s solidary liability with co-petitioner Rizal Security for the payment of the monetary awards granted to the private respondents.

Considering that the Order dated 24 January 1996 has not yet attained finality and the Writ of Execution dated 12 March 1996 has been quashed by reason thereof, to resolve the last issue now would be injudicious and would pre-empt whatever action public respondent DOLE-CAR Director Maraan may still take on CAR00-9507-CI-25. The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly. Thus, for reasons of comity and convenience, our courts of justice will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case.24

WHEREFORE, premises considered, the Court PARTIALLY GRANTS the instant Petition and ISSUES a Writ of Certiorari to quash the Writ of Execution dated 12 March 1996 for being issued prematurely. The Department of Labor and Employment Cordillera Administrative Region is further DIRECTED to proceed with CAR00-9507-CI-25 with DISPATCH. No costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 181475               April 7, 2009

PEOPLE OF THE PHILIPPINES, Appellee, vs.LARRY "LAURO" DOMINGO, Appellant.

D E C I S I O N

CARPIO-MORALES, J.:

On appeal via Petition for Review on Certiorari is the Court of Appeals Decision1

dated September 28, 2007 affirming the Joint Decision2 dated October 19, 2004 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 11 which convicted Larry Domingo (appellant) of Illegal Recruitment (Large Scale) in Criminal Case No. 1224-M-2001 and Estafa in Criminal Case Nos. 1243-M-2001 and 1246-M-2001, and acquitting him in Criminal Case Nos. 1225-M-2001 to 1242-M-2001 and 1244-M-2001, 1245-M-2001 and 1247-M-2001, also for Estafa.

The Information3 in Criminal Case No. 1224-M-2001 reads:

The undersigned Asst. Provincial Prosecutor accuses Larry "Lauro" Domingo y Cruz of the crime of illegal recruitment, defined and penalized under the provisions of Article 38 in relation to Articles 34 and 39 of the Labor Code of the Philippines, as amended by presidential Decree Nos. 1920 and 2018, committed as follows:

That in or about the month of November 1999 to January 20, 2000, in the Municipality of Malolos, province of Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, being a non-licensee or non-holder of authority from the Department of Labor and Employment to recruit and/or place workers under local or overseas employment, did then and there willfully and feloniously, with false pretenses, undertake illegal recruitment, placement or deployment of Wilson A. Manzo, Florentino M. Ondra, Feliciano S. del Rosario, Leo J. Cruz, Norberto S. Surio, Genaro B. Rodriguez, Mariano Aguilar, Dionisio Aguilar, Mario J. Sorel, Marcial "Boy" A. dela Cruz, Edgardo P. Jumaquio, Midel Clara Buensuceso, Remigio S. Carreon, Jr., Romeo Manasala, Magno D. Balatbat, Jose Armen F. Sunga, Rogelio M. Cambay, Junior Balisbis, Ma. Leah Vivas, Simeon S. Cabigao, Edcil P. Mariano, Juanito C. Bartolome, Angelito R. Acevedo, Godofredo P. Samson, Eugenio del Rosario y Tolentino, William B. Bautista, Rodolfo M. Marcelino, Roberto B. Bohol, Felipe H. Cunanan, Carlos P. Dechavez, Carlos J. Cruz, Reynaldo C. Chico, Renato D. Jumaquio, Narciso F. Sunga, Enrico R. Espiritu, Leonardo C. Sunga, Jr., and Iglecerio H. Perez. This offense involved economic sabotage, as it was committed in large scale.

Contrary to law. (Underscoring supplied)

The Informations4 for 23 counts of Estafa, all of which were similarly worded but varying with respect to the name of each complainant and the amount which each purportedly gave to appellant, read:

That in or about the month of November, 1999 to January, 2000, in the municipality of Malolos, province of Bulacan, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, by means of deceit, false pretenses and fraudulent manifestations, and with intent of gain, did then and there willfully, unlawfully and feloniously defraud one [Wilson A. Manzo] by then and there falsely representing that he has the power and capacity to recruit and employ persons in Saipan and could facilitate the necessary papers in connection therewith if given the necessary amount, and by means of deceit of similar import, when in truth and in fact, as the accused knew fully well his representation was false and fraudulent and designed to inveigle [Wilson A. Manzo] to give, as in fact the latter gave and delivered the amount of [P14,000.00] to him, which the accused misappropriated to himself, to the damage and prejudice of Wilson A. Manzo in the said amount of [P14,000.00].

Contrary to law.

Of the 23 complainants, only five testified, namely: Rogelio Cambay, Florentino Ondra, Dionisio Aguilar, Ma. Leah Vivas, and Simeon Cabigao. The substance of their respective testimonies follows:

Rogelio Cambay: Appellant recruited him for a painting job in Marianas Island for which he paid him the amount of P15,000 in two installments – P2,500 during his medical examination at Newton Clinic in Makati City, and the balance of P12,500 before the scheduled departure on January 25, 2000.

On his scheduled departure, appellant did not show up at their meeting place in Malolos, Bulacan, hence, the around one hundred people who waited for him organized a search party to look for him in Zambales. Appellant was arrested on February 25, 2000 at the Balintawak tollgate.

A verification5 with the Department of Labor and Employment showed that appellant was not a licensed recruiter.

Florentino Ondra: He was recruited by appellant for employment as laborer in Saipan, for which he gave P14,700 representing expenses for passporting, NBI clearance, and medical examination.

Dionisio Aguilar: In September, 1999, he met appellant thru a friend whereupon he was interviewed, tested for a hotel job, and scheduled for medical examination. He gave P30,000 to appellant inside the latter’s car on November, 1999 after his medical examination. While he was twice scheduled for departure, it did not materialize.

Ma. Leah Vivas: After meeting appellant thru Eddie Simbayan on October 19, 1999, she applied for a job as a domestic helper in Saipan, for which she paid appellant P10,000, but like the other complainants, she was never deployed.

Simeon Cabigao: He was recruited by appellant in September, 1999 for employment as carpenter in Saipan with a guaranteed salary of $375 per month. For the promised employment, he paid appellant P3,000 for medical fee, and an additional P9,000, supposedly to bribe the examining physician because, per information of appellant, he (Cabigao) was found to have an ailment. He was scheduled for departure on February 23, 2000, but the same never took place.

He was among those who looked for appellant in Zambales.

Private complainant Cabigao later recanted this testimony, per his affidavit6 dated March 3, 2003. Testifying anew, this time for the defense, he averred that the one who actually recruited him and his co-complainants and received their money was Danilo Gimeno (Gimeno), and that they only agreed among themselves to file a case against appellant because Gimeno was nowhere to be found.

Appellant, denying all the accusations against him, claimed as follows: He was a driver hired by the real recruiter, Gimeno, whom he met inside the Victory Liner Bus bound for Manila in September, 2000. It was Gimeno who undertakes recruitment activities in Dakila, Malolos, Bulacan at the residence of Eddie Simbayan, and that the other cases for illegal recruitment filed against him before other courts have all been dismissed.

Appellant likewise presented as witnesses private complainants Enrico Espiritu and Roberto Castillo who corroborated his claim that it was Gimeno who actually recruited them, and that the filing of the complaint against appellant was a desperate attempt on their part to get even because Gimeno could not be located.

By Joint Decision dated October 19, 2004, the trial court found appellant guilty beyond reasonable doubt of Illega

l Recruitment (Large Scale) and of 2 counts of Estafa, viz:

WHEREFORE, in Criminal case No. 1224-M-2001, for Illegal Recruitment (Large Scale), this Court finds the accused LARRY DOMINGO GUILTY beyond reasonable doubt of violation of Article 38(b) of the Labor Code, as amended, in relation to Article 13 (b) and 34 of the same Code (Illegal Recruitment in Large Scale) and hereby sentences him to suffer the penalty of life imprisonment and pay a fine of P100,000.00.

Accused is further ordered to pay the following complainants the amounts opposite their names as actual or compensatory damages, to wit:

1. Rogelio Cambay – P15,000.00

2. Dionisio Aguilar – P30,000.00

3. Florentino Ondra – P14,700.00

4. Ma. Lea Vivas – P10,000.00

In Criminal Case No. 1243-M-2001 for Estafa, this Court finds the accused LARRY DOMINGO GUILTY beyond reasonable doubt of Estafa under Article 315 par. 2(a) of the Revised Penal Code and hereby sentences him to a prison term ranging from Two (2) Years, Eleven (11) Months and Eleven (11) Days of prision correcional as minimum up to Eight (8) Years of prision mayor as maximum.

In Criminal Case No. 1246-M-2001 for Estafa, this Court finds the accused LARRY DOMINGO GUILTY beyond reasonable doubt of Estafa under Article 315 par. 2(a) of the Revised Penal Code and hereby sentences him to a prison term ranging from Two (2) Years, Eleven (11) Months and eleven (11) Days of prision correcional as minimum up to Nine (9) Years of prision mayor as maximum.

In Criminal Cases Nos. 1225-M-2001 to 1242-M-2001 and 1244-M-2001, 1245-M-2001 and 1247-M-2001, accused is hereby ACQUITTED for lack of evidence.

SO ORDERED.

On appeal to the Court of Appeals, appellant maintained that the trial court erred in finding him guilty beyond reasonable doubt, no receipts to show that he actually received money from private complainant having been submitted in evidence. And he faulted the trial court for failing to give weight to Cabigao’s retraction.

The appellate court affirmed the trial court’s decision by the challenged Decision dated September 28, 2007, holding that the straightforward and consistent testimonies of the complaining witnesses sufficiently supported the trial court’s conclusion that appellant undertook recruitment activities beginning September up to December 1999 in Dakila, Malolos, Bulacan without the license therefor, and failed to deploy those he recruited.

Respecting the non-presentation of receipts of payment to appellant in consideration of the promised jobs, the appellate court affirmed the trial court’s ruling that the same had no bearing on his culpability in light of the categorical assertions of the complaining witnesses that appellant was the one who recruited them.

As for Cabigao’s recantation, the appellate court found it immaterial as was the other complainants’ failure to prosecute their claims. The appellate court held that the mere retraction by a prosecution witness does not necessarily vitiate his original testimony and that, in any event, the prosecution had proven beyond reasonable doubt that at least three were illegally recruited by the accused - Cambay, Ondra, Aguilar and Ma. Leah.

As for the estafa cases, the appellate court held that the elements constituting the crime, as penalized under Article 315 paragraph 2(a) of the Revised Penal Code, were sufficiently established, viz: Appellant deceived the complainants by assuring them of employment abroad provided that they submit certain documents and pay the required placement fee; complainants paid appellant the amount he asked on account of appellant’s representations which turned out to be false; and complainants suffered damages when appellant failed to return the amounts they paid and the papers they submitted, despite demand.

Hence, the present appeal, appellant raising the same contentions as those he raised in the appellate court.

The appeal is bereft of merit.

The term "recruitment and placement" is defined under Article 13(b) of the Labor Code of the Philippines as follows:

(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 placement. (Emphasis supplied)

On the other hand, Article 38, paragraph (a) of the Labor Code, as amended, under which the accused stands charged, provides:

Art. 38. Illegal Recruitment. - (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable under

Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement officer may initiate complaints under this Article.1avvphi1

(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. (Emphasis supplied)

From the foregoing provisions, it is clear that any recruitment activities to be undertaken by non-licensee or non-holder of authority shall be deemed illegal and punishable under Article 39 of the Labor Code of the Philippines. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

To prove illegal recruitment in large scale, the prosecution must prove three essential elements, to wit: (1) the person charged undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34 of the Labor Code; (2) he/she did not have the license or the authority to lawfully engage in the recruitment and placement of workers; and (3) he/she committed the prohibited practice against three or more persons individually or as a group.7

The Court finds that the prosecution ably discharged its onus of proving the guilt beyond reasonable doubt of appellant of the crimes charged.

That no receipt or document in which appellant acknowledged receipt of money for the promised jobs was adduced in evidence does not free him of liability. For even if at the time appellant was promising employment no cash was given to him, he is still considered as having been engaged in recruitment activities, since Article 13(b) of the Labor Code states that the act of recruitment may be for profit or not. It suffices that appellant promised or offered employment for a fee to the complaining witnesses to warrant his conviction for illegal recruitment.

That one of the original complaining witnesses, Cabigao, later recanted, via an affidavit and his testimony in open court, does not necessarily cancel an earlier declaration. Like any other testimony, the same is subject to the test of credibility and should be received with caution.8 For a testimony solemnly given in court should not be set aside lightly, least of all by a mere affidavit executed after the lapse of considerable time. In the case at bar, the Affidavit of Recantation was executed three years after the complaint was filed. It is thus not unreasonable to consider his retraction an afterthought to deny its probative value.9

AT ALL EVENTS, and even with Cabigao’s recantation, the Court finds that the prosecution evidence consisting of the testimonies of the four other complainants, whose credibility has not been impaired, has not been overcome.

As to the conviction of appellant for two counts of estafa, it is well established that a person may be charged and convicted of both illegal recruitment and estafa. People v. Comila,10 enlightens:

x x x The reason therefor is not hard to discern: illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the criminal intent of the accused is not necessary for conviction. In the second, such an intent is imperative. Estafa under Article 315, paragraph 2, of the Revised Penal Code, is committed by any person who defrauds another by using fictitious name, or falsely pretends to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of similar deceits executed prior to or simultaneously with the commission of fraud. x x x (Emphasis supplied)

Appellant, who did not have the authority or license to recruit and deploy, misrepresented to the complaining witnesses that he had the capacity to send them abroad for employment. This misrepresentation, which induced the complaining witnesses to part off with their money for placement and medical fees, constitutes estafa under Article 315, par. 2(a) of the Revised Penal Code.

WHEREFORE, the petition is DENIED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 152048               April 7, 2009

FELIX B. PEREZ and AMANTE G. DORIA, Petitioners, vs.PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS SANTIAGO, Respondents.

D E C I S I O N

CORONA, J.:

Petitioners Felix B. Perez and Amante G. Doria were employed by respondent Philippine Telegraph and Telephone Company (PT&T) as shipping clerk and supervisor, respectively, in PT&T’s Shipping Section, Materials Management Group.

Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping Section, respondents formed a special audit team to investigate the matter. It was discovered that the Shipping Section jacked up the value of the freight costs for goods shipped and that the duplicates of the shipping documents allegedly showed traces of tampering, alteration and superimposition.

On September 3, 1993, petitioners were placed on preventive suspension for 30 days for their alleged involvement in the anomaly.1 Their suspension was extended for 15 days twice: first on October 3, 19932 and second on October 18, 1993.3

On October 29, 1993, a memorandum with the following tenor was issued by respondents:

In line with the recommendation of the AVP-Audit as presented in his report of October 15, 1993 (copy attached) and the subsequent filing of criminal charges against the parties mentioned therein, [Mr. Felix Perez and Mr. Amante Doria are] hereby dismissed from the service for having falsified company documents.4 (emphasis supplied)

On November 9, 1993, petitioners filed a complaint for illegal suspension and illegal dismissal.5

They alleged that they were dismissed on November 8, 1993, the date they received the above-mentioned memorandum.

The labor arbiter found that the 30-day extension of petitioners’ suspension and their subsequent dismissal were both illegal. He ordered respondents to pay petitioners their salaries during their 30-day illegal suspension, as well as to reinstate them with backwages and 13th month pay.

The National Labor Relations Commission (NLRC) reversed the decision of the labor arbiter. It ruled that petitioners were dismissed for just cause, that they were accorded due process and that they were illegally suspended for only 15 days (without stating the reason for the reduction of the period of petitioners’ illegal suspension).6

Petitioners appealed to the Court of Appeals (CA). In its January 29, 2002 decision, 7 the CA affirmed the NLRC decision insofar as petitioners’ illegal suspension for 15 days and dismissal for just cause were concerned. However, it found that petitioners were dismissed without due process.

Petitioners now seek a reversal of the CA decision. They contend that there was no just cause for their dismissal, that they were not accorded due process and that they were illegally suspended for 30 days.

We rule in favor of petitioners.

Respondents Failed to Prove Just Cause and to Observe Due Process

The CA, in upholding the NLRC’s decision, reasoned that there was sufficient basis for respondents to lose their confidence in petitioners8 for allegedly tampering with the shipping documents. Respondents emphasized the importance of a shipping order or request, as it was the basis of their liability to a cargo forwarder.9

We disagree.

Without undermining the importance of a shipping order or request, we find respondents’ evidence insufficient to clearly and convincingly establish the facts from which the loss of confidence resulted.10 Other than their bare allegations and the fact that such documents came into petitioners’ hands at some point, respondents should have provided evidence of petitioners’ functions, the extent of their duties, the procedure in the handling and approval of shipping requests and the fact that no personnel other than petitioners were involved. There was, therefore, a patent paucity of proof connecting petitioners to the alleged tampering of shipping documents.

The alterations on the shipping documents could not reasonably be attributed to petitioners because it was never proven that petitioners alone had control of or access to these documents. Unless duly proved or sufficiently substantiated otherwise, impartial tribunals should not rely only on the statement of the employer that it has lost confidence in its employee.11

Willful breach by the employee of the trust reposed in him by his employer or duly authorized representative is a just cause for termination.12 However, in General Bank and Trust Co. v. CA,13

we said:

[L]oss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.

The burden of proof rests on the employer to establish that the dismissal is for cause in view of the security of tenure that employees enjoy under the Constitution and the Labor Code. The employer’s evidence must clearly and convincingly show the facts on which the loss of confidence in the employee may be fairly made to rest.14 It must be adequately proven by substantial evidence.15 Respondents failed to discharge this burden.

Respondents’ illegal act of dismissing petitioners was aggravated by their failure to observe due process. To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying the grounds for termination and giving to said employee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer's decision to dismiss the employee.16

Petitioners were neither apprised of the charges against them nor given a chance to defend themselves. They were simply and arbitrarily separated from work and served notices of termination in total disregard of their rights to due process and security of tenure. The labor arbiter and the CA correctly found that respondents failed to comply with the two-notice requirement for terminating employees.

Petitioners likewise contended that due process was not observed in the absence of a hearing in which they could have explained their side and refuted the evidence against them.

There is no need for a hearing or conference. We note a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. The Labor Code, on one hand, provides that an employer must provide the employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires:

ART. 277. Miscellaneous provisions. — x x x

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. (emphasis supplied)

The omnibus rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him:17

Section 2. Security of Tenure. — x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. (emphasis supplied)

Which one should be followed? Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? Can the apparent conflict between the law and its IRR be reconciled?

At the outset, we reaffirm the time-honored doctrine that, in case of conflict, the law prevails over the administrative regulations implementing it.18 The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform to and be consistent with the provisions of the enabling statute.19 As such, it cannot amend the law either by abridging or expanding its scope.20

Article 277(b) of the Labor Code provides that, in cases of termination for a just cause, an employee must be given "ample opportunity to be heard and to defend himself." Thus, the opportunity to be heard afforded by law to the employee is qualified by the word "ample" which ordinarily means "considerably more than adequate or sufficient."21 In this regard, the phrase "ample opportunity to be heard" can be reasonably interpreted as extensive enough to cover actual hearing or conference. To this extent, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code is in conformity with Article 277(b).

Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to mean that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in termination of employment. The test for the fair procedure guaranteed under Article 277(b) cannot be whether there has been a formal pretermination confrontation between the employer and the employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing. To confine the employee’s right to be heard to a solitary form narrows down that right. It deprives him of other

equally effective forms of adducing evidence in his defense. Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The "very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation."22

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

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

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

A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy.23 "To be heard" does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings.24 Therefore, while the phrase "ample opportunity to be heard" may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal "trial-type" hearing, although preferred, is not absolutely necessary to satisfy the employee’s right to be heard.

This Court has consistently ruled that the due process requirement in cases of termination of employment does not require an actual or formal hearing. Thus, we categorically declared in Skipper’s United Pacific, Inc. v. Maguad:25

The Labor Code does not, of course, require a formal or trial type proceeding before an erring employee may be dismissed. (emphasis supplied)

In Autobus Workers’ Union v. NLRC,26 we ruled:

The twin requirements of notice and hearing constitute the essential elements of due process. Due process of law simply means giving opportunity to be heard before judgment is rendered. In fact, there is no violation of due process even if no hearing was conducted, where the party was given a chance to explain his side of the controversy. What is frowned upon is the denial of the opportunity to be heard.

x x x x x x x x x

A formal trial-type hearing is not even essential to due process. It is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based. This type of hearing is not even mandatory in cases of complaints lodged before the Labor Arbiter. (emphasis supplied)

In Solid Development Corporation Workers Association v. Solid Development Corporation,27 we had the occasion to state:

[W]ell-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer’s decision to dismiss him. The requirement of a hearing, on the other hand, is

complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted.

In separate infraction reports, petitioners were both apprised of the particular acts or omissions constituting the charges against them. They were also required to submit their written explanation within 12 hours from receipt of the reports. Yet, neither of them complied. Had they found the 12-hour period too short, they should have requested for an extension of time. Further, notices of termination were also sent to them informing them of the basis of their dismissal. In fine, petitioners were given due process before they were dismissed. Even if no hearing was conducted, the requirement of due process had been met since they were accorded a chance to explain their side of the controversy. (emphasis supplied)

Our holding in National Semiconductor HK Distribution, Ltd. v. NLRC28 is of similar import:

That the investigations conducted by petitioner may not be considered formal or recorded hearings or investigations is immaterial. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy. It is deemed sufficient for the employer to follow the natural sequence of notice, hearing and judgment.

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

After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation (which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records (such as his 201 file and daily time records) and the sworn statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also include a request that a formal hearing or conference be held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there exist substantial evidentiary disputes29 or where company rules or practice requires an actual hearing as part of employment pretermination procedure. To this extent, we refine the decisions we have rendered so far on this point of law.

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

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

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

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

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference" requirement in the implementing rules and regulations.

Petitioners Were Illegally Suspended for 30 Days

An employee may be validly suspended by the employer for just cause provided by law. Such suspension shall only be for a period of 30 days, after which the employee shall either be reinstated or paid his wages during the extended period.30

In this case, petitioners contended that they were not paid during the two 15-day extensions, or a total of 30 days, of their preventive suspension. Respondents failed to adduce evidence to the contrary. Thus, we uphold the ruling of the labor arbiter on this point.

Where the dismissal was without just or authorized cause and there was no due process, Article 279 of the Labor Code, as amended, mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.31 In this case, however, reinstatement is no longer possible because of the length of time that has passed from the date of the incident to final resolution.32 Fourteen years have transpired from the time petitioners were wrongfully dismissed. To order reinstatement at this juncture will no longer serve any prudent or practical purpose.33

WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals dated January 29, 2002 in CA-G.R. SP No. 50536 finding that petitioners Felix B. Perez and Amante G. Doria were not illegally dismissed but were not accorded due process and were illegally suspended for 15 days, is SET ASIDE. The decision of the labor arbiter dated December 27, 1995 in NLRC NCR CN. 11-06930-93 is hereby AFFIRMED with the MODIFICATION that petitioners should be paid their separation pay in lieu of reinstatement.

SO ORDERED.