Embed Size (px)
Citation preview
ON DEFINITION OF TERMS
G.R. No. 101761. March 24, 1993.
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
Jose Mario C. Bunag for petitioner.
The Solicitor General and the Chief Legal Officer, NLRC, for public respondent.
Zoilo V. de la Cruz for private respondent.
D E C I S I O N
REGALADO, J p:
The main issue presented for resolution in this original petition for certiorari is whether supervisory employees, as defined in Article 212 (m), Book V of the Labor Code, should be considered as officers or members of the managerial staff under Article 82, Book III of the same Code, and hence are not entitled to overtime rest day and holiday pay.
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is fully owned and controlled by the Government, operates three (3) sugar refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. 1 Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar Refinery, namely, the Technical Assistant to the Refinery Operations Manager, Shift Sugar Warehouse Supervisor, Senior Financial/Budget Analyst, General Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift Boiler Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services Supervisor, Instrumentation Supervisor, Community Development Officer, Employment and Training Supervisor, Assistant Safety and Security Officer, Head and Personnel Services, Head Nurse, Property Warehouse Supervisor, Head of Inventory Control Section, Shift Process Supervisor, Day Maintenance Supervisor and Motorpool Supervisor.
On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to department heads. The JE Program was designed to rationalized the duties and functions of all positions, reestablish levels of responsibility, and recognize both wage and operational structures. Jobs were ranked according to effort, responsibility, training and working conditions and relative worth of the job. As a result, all positions were re-evaluated, and all employees including the members of respondent union were granted salary adjustments and increases in benefits commensurate to their actual duties and functions.
We glean from the records that for about ten years prior to the JE Program, the members of respondent union were treated in the same manner as rank-and file employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended. With the implementation of the JE Program, the following adjustments were made: (1) the members of respondent union were re-classified under levels S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with the union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the
highest paid rank-and-file employee; (3) longevity pay was increased on top of alignment adjustments; (4) they were entitled to increased company COLA of P225.00 per month; (5) there was a grant of P100.00 allowance for rest day/holiday work.
On May 11, 1990, petitioner NASUREFCO recognized herein respondent union, which was organized pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own unions, as the bargaining representative of all the supervisory employees at the NASUREFCO Batangas Sugar Refinery.
Two years after the implementation of the JE Program, specifically on June 20, 1990, the members of herein respondent union filed a complainant with the executive labor arbiter for non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.
On January 7, 1991, Executive Labor Arbiter Antonio C. Pido rendered a decision 2 disposing as follows:
"WHEREFORE, premises considered, respondent National Sugar refineries Corporation is hereby directed to —
1. pay the individual members of complainant union the usual overtime pay, rest day pay and holiday pay enjoyed by them instead of the P100.00 special allowance which was implemented on June 11, 1988; and
2. pay the individual members of complainant union the difference in money value between the P100.00 special allowance and the overtime pay, rest day pay and holiday pay that they ought to have received from June 1, 1988.
All other claims are hereby dismissed for lack of merit.
SO ORDERED."
In finding for the members therein respondent union, the labor ruled that the along span of time during which the benefits were being paid to the supervisors has accused the payment thereof to ripen into contractual obligation; at the complainants cannot be estopped from questioning the validity of the new compensation package despite the fact that they have been receiving the benefits therefrom, considering that respondent union was formed only a year after the implementation of the Job Evaluation Program, hence there was no way for the individual supervisors to express their collective response thereto prior to the formation of the union; and the comparative computations presented by the private respondent union showed that the P100.00 special allowance given NASUREFCO fell short of what the supervisors ought to receive had the overtime pay rest day pay and holiday pay not been discontinued, which arrangement, therefore, amounted to a diminution of benefits.
On appeal, in a decision promulgated on July 19, 1991 by its Third Division, respondent National Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of respondent union are not managerial employees, as defined under Article 212 (m) of the Labor Code and, therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these supervisory employees are merely exercising recommendatory powers subject to the evaluation, review and final action by their department heads; their responsibilities do not require the exercise of discretion and independent judgment; they do not participate in the formulation of management policies nor in the hiring or firing of employees; and their main function is
to carry out the ready policies and plans of the corporation. 3 Reconsideration of said decision was denied in a resolution of public respondent dated August 30, 1991. 4
Hence this petition for certiorari, with petitioner NASUREFCO asseverating that public respondent commission committed a grave abuse of discretion in refusing to recognized the fact that the members of respondent union are members of the managerial staff who are not entitled to overtime, rest day and holiday pay; and in making petitioner assume the "double burden" of giving the benefits due to rank-and-file employees together with those due to supervisors under the JE Program.
We find creditable merit in the petition and that the extraordinary writ of certiorari shall accordingly issue.
The primordial issue to be resolved herein is whether the members of respondent union are entitled to overtime, rest day and holiday pay. Before this can be resolved, however it must of necessity be ascertained first whether or not the union members, as supervisory employees, are to be considered as officers or members of the managerial staff who are exempt from the coverage of Article 82 of the Labor Code.
It is not disputed that the members of respondent union are supervisory employees, as defined employees, as defined under Article 212(m), Book V of the Labor Code on Labor Relations, which reads:
"(m) 'Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory employees are those who, in the interest of the employer effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of those above definitions are considered rank-and-file employees of this Book."
Respondent NLRC, in holding that the union members are entitled to overtime, rest day and holiday pay, and in ruling that the latter are not managerial employees, adopted the definition stated in the aforequoted statutory provision.
Petitioner, however, avers that for purposes of determining whether or not the members of respondent union are entitled to overtime, rest day and holiday pay, said employees should be considered as "officers or members of the managerial staff" as defined under Article 82, Book III of the Labor Code on "Working Conditions and Rest Periods" and amplified in Section 2, Rule I, Book III of the Rules to Implement the Labor Code, to wit:
"Art. 82 Coverage. — The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in Appropriate regulations.
"As used herein, 'managerial employees' refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff." (Emphasis supplied.)
xxx xxx xxx
'Sec. 2. Exemption. — The provisions of this rule shall not apply to the following persons if they qualify for exemption under the condition set forth herein:
xxx xxx xxx
(b) Managerial employees, if they meet all of the following conditions, namely:
(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.
(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of their 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 20 percent of their hours worked in a work-week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and above."
It is the submission of petitioner that while the members of respondent union, as supervisors, may not be occupying managerial positions, they are clearly officers or members of the managerial staff because they meet all the conditions prescribed by law and, hence, they are not entitled to overtime, rest day and supervisory employees under Article 212 (m) should be made to apply only to the provisions on Labor Relations, while the right of said employees to the questioned benefits should be considered in the light of the meaning of a managerial employee and of the officers or members of the managerial staff, as contemplated under Article 82 of the Code and Section 2, Rule I Book III of the implementing rules. In other words, for purposes of forming and joining unions, certification elections, collective bargaining, and so forth, the union members are supervisory employees. In terms of working conditions and rest periods and entitlement to the questioned benefits, however, they are officers or members of the managerial staff, hence they are not entitled thereto.
While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice is in every case for
the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine. 5
This is one such case where we are inclined to tip the scales of justice in favor of the employer.
The question whether a given employee is exempt from the benefits of the law is a factual one dependent on the circumstances of the particular case, In determining whether an employee is within the terms of the statutes, the criterion is the character of the work performed, rather than the title of the employee's position. 6
Consequently, while generally this Court is not supposed to review the factual findings of respondent commission, substantial justice and the peculiar circumstances obtaining herein mandate a deviation from the rule.
A cursory perusal of the Job Value Contribution Statements 7 of the union members will readily show that these supervisory employees are under the direct supervision of their respective department superintendents and that generally they assist the latter in planning, organizing, staffing, directing, controlling communicating and in making decisions in attaining the company's set goals and objectives. These supervisory employees are likewise responsible for the effective and efficient operation of their respective departments. More specifically, their duties and functions include, among others, the following operations whereby the employee:
1) assists the department superintendent in the following:
a) planning of systems and procedures relative to department activities;
b) organizing and scheduling of work activities of the department, which includes employee shifting scheduled and manning complement;
c) decision making by providing relevant information data and other inputs;
d) attaining the company's set goals and objectives by giving his full support;
e) selecting the appropriate man to handle the job in the department; and
f) preparing annual departmental budget;
2) observes, follows and implements company policies at all times and recommends disciplinary action on erring subordinates;
3) trains and guides subordinates on how to assume responsibilities and become more productive;
4) conducts semi-annual performance evaluation of his subordinates and recommends necessary action for their development/advancement;
5) represents the superintendent or the department when appointed and authorized by the former;
6) coordinates and communicates with other inter and intra department supervisors when necessary;
7) recommends disciplinary actions/promotions;
8) recommends measures to improve work methods, equipment performance, quality of service and working conditions;
9) sees to it that safety rules and regulations and procedure and are implemented and followed by all NASUREFCO employees, recommends revisions or modifications to said rules when deemed necessary, and initiates and prepares reports for any observed abnormality within the refinery;
10) supervises the activities of all personnel under him and goes to it that instructions to subordinates are properly implemented; and
11) performs other related tasks as may be assigned by his immediate superior.
From the foregoing, it is apparent that the members of respondent union discharge duties and responsibilities which ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the performance of work directly related to management policies of their employer; (2) they customarily and regularly exercise discretion and independent judgment; (3) they regularly and directly assist the managerial employee whose primary duty consist of the management of a department of the establishment in which they are employed (4) they execute, under general supervision, work along specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to the performance of their work hereinbefore described.
Under the facts obtaining in this case, we are constrained to agree with petitioner that the union members should be considered as officers and members of the managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and holiday.
The distinction made by respondent NLRC on the basis of whether or not the union members are managerial employees, to determine the latter's entitlement to the questioned benefits, is misplaced and inappropriate. It is admitted that these union members are supervisory employees and this is one instance where the nomenclatures or titles of their jobs conform with the nature of their functions. Hence, to distinguish them from a managerial employee, as defined either under Articles 82 or 212 (m) of the Labor Code, is puerile and in efficacious. The controversy actually involved here seeks a determination of whether or not these supervisory employees ought to be considered as officers or members of the managerial staff. The distinction, therefore, should have been made along that line and its corresponding conceptual criteria.
II. We likewise no not subscribe to the finding of the labor arbiter that the payment of the questioned benefits to the union members has ripened into a contractual obligation.
A. Prior to the JE Program, the union members, while being supervisors, received benefits similar to the rank-and-file employees such as overtime, rest day and holiday pay, simply because they were treated in the same manner as rank-and-file employees, and their basic pay was nearly on the same level as those of the latter, aside from the fact that their specific functions and duties then as supervisors had not been properly defined and delineated from those of the rank-and-file. Such fact is apparent from the clarification made by petitioner in its motion for reconsideration 8 filed with respondent commission in NLRC Case No. CA No. I-000058, dated August 16, 1991, wherein, it lucidly explained:
"But, complainants no longer occupy the same positions they held before the JE Program. Those positions formerly classified as 'supervisory' and found after the JE Program to be rank-and-file were classified correctly and continue to receive overtime, holiday and restday pay. As to them, the practice subsists.
"However, those whose duties confirmed them to be supervisory, were re-evaluated, their duties re-defined and in most cases their organizational positions re-designated to confirm their superior rank and duties. Thus, after the JE program, complainants cannot be said to occupy the same positions." 9
It bears mention that this positional submission was never refuted nor controverted by respondent union in any of its pleadings filed before herein public respondent or with this Court. Hence, it can be safely concluded therefrom that the members of respondent union were paid the questioned benefits for the reason that, at that time, they were rightfully entitled thereto. Prior to the JE Program, they could not be categorically classified as members or officers of the managerial staff considering that they were then treated merely on the same level as rank-and-file. Consequently, the payment thereof could not be construed as constitutive of voluntary employer practice, which cannot be now be unilaterally withdrawn by petitioner. To be considered as such, it should have been practiced over a long period of time, and must be shown to have been consistent and deliberate. 10
The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowingly fully well that said employees are not covered by the law requiring payment thereof. 11 In the case at bar, respondent union failed to sufficiently establish that petitioner has been motivated or is wont to give these benefits out of pure generosity.
B. It remains undisputed that the implementation of the JE Program, the members of private respondent union were re-classified under levels S-5 S-8 which were considered under the program as managerial staff purposes of compensation and benefits, that they occupied re-evaluated positions, and that their basic pay was increased by an average of 50% of their basic salary prior to the JE Program. In other words, after the JE Program there was an ascent in position, rank and salary. This in essence is a promotion which is defined as the advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. 12
Quintessentially, with the promotion of the union members, they are no longer entitled to the benefits which attach and pertain exclusively to their positions. Entitlement to the benefits provided for by law requires prior compliance with the conditions set forth therein. With the promotion of the members of respondent union, they occupied positions which no longer met the requirements imposed by law. Their assumption of these positions removed them from the coverage of the law, ergo, their exemption therefrom.
As correctly pointed out by petitioner, if the union members really wanted to continue receiving the benefits which attach to their former positions, there was nothing to prevent them from refusing to accept their promotions and their corresponding benefits. As the sating goes by, they cannot have their cake and eat it too or, as petitioner suggests, they could not, as a simple matter of law and fairness, get the best of both worlds at the expense of NASUREFCO.
Promotion of its employees is one of the jurisprudentially-recognized exclusive prerogatives of management, provided it is done in good faith. In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive.
Not so long ago, on this particular score, we had the occasion to hold that:
". . . it is the prerogative of the management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating on circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite." 13
WHEREFORE, the impugned decision and resolution of respondent National Labor Relations Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED and SET ASIDE for having been rendered and adopted with grave abuse of discretion, and the basic complaint of private respondent union is DISMISSED.
ON LIBERAL INTERPRETATION
G.R. No. 78763 July 12,1989
MANILA ELECTRIC COMPANY, petitioner, vs.THE NATIONAL LABOR RELATIONS COMMISSION, and APOLINARIO M. SIGNO, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
Dominador Maglalang for private respondent.
MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the resolution of the respondent National Labor Relations Commission dated March 12, 1987 (p. 28, Rollo) in NLRC Case No. NCR-8-3808-83, entitled, "Apolinario M. Signo, Complainant, versus Manila Electric Company, Respondents", affirming the decision of the Labor Arbiter which ordered the reinstatement of private respondent herein, Apolinario Signo, to his former position without backwages.
The antecedent facts are as follows:
Private respondent Signo was employed in petitioner company as supervisor-leadman since January 1963 up to the time when his services were terminated on May 18, 1983.
In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private respondent Signo facilitated the processing of the said application as well as the required documentation for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent received from Fernando de Lara the amount of P7,000.00. Signo thereafter filed the application for electric services with the Power Sales Division of the company.
It was established that the area where the residence of de Lara was located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter distance from the nearest existing Meralco facilities. In order to expedite the electrical connections at de Lara's residence, certain employees of the company, including respondent Signo, made it appear in the application that the sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's establishment, which, in reality is not owned by the latter.
As a result of this scheme, the electrical connections to de Lara's residence were installed and made possible. However, due to the fault of the Power Sales Division of petitioner company, Fernando de Lara was not billed for more than a year.
Petitioner company conducted an investigation of the matter and found respondent Signo responsible for the said irregularities in the installation. Thus, the services of the latter were terminated on May 18, 1983.
On August 10 1983, respondent Signo filed a complaint for illegal dismissal, unpaid wages, and separation pay.
After the parties had submitted their position papers, the Labor Arbiter rendered a decision (p. 79, Rollo) on April 29, 1985, which stated, inter alia:
Verily, complainant's act of inducing the Meralco employees to effectuate the installation on Engr. de Lara's residence prejudiced the respondent, and therefore, complainant himself had indeed became a participant in the transactions, although not directly, which turned out to be illegal, not to mention that some of the materials used therein belongs to Meralco, some of which were inferior quality. . . .
While complainant may deny the violation, he cannot do away with company's Code on Employee Discipline, more particularly Section 7, par. 8 and Section 6, par. 24 thereof However, as admitted by the respondent, the infraction of the above cited Code is punishable by reprimand to dismissal."
... . And in this case, while considering that complainant indeed committed the above-cited infractions of company Code of Employee Discipline, We shall also consider his records of uninterrupted twenty (20) years of service coupled with two (2) commendations for honesty. Likewise, We shall take note that subject offense is his first, and therefore, to impose the extreme penalty of dismissal is certainly too drastic. A penalty short of dismissal is more in keeping with justice, and adherence to compassionate society.
WHEREFORE, respondent Meralco is hereby directed to reinstate complainant Apolinario M. Signo to his former position as Supervisor Leadman without backwages, considering that he is not at all faultless. He is
however, here warned, that commission of similar offense in the future, shall be dealt with more severely.
SO ORDERED.
Both parties appealed from the decision to the respondent Commission. On March 12, 1987, the respondent Commission dismissed both appeals for lack of merit and affirmed in toto the decision of the Labor Arbiter.
On June 23, 1987, the instant petition was filed with the petitioner contending that the respondent Commission committed grave abuse of discretion in affirming the decision of the Labor Arbiter. A temporary restraining order was issued by this Court on August 3, 1987, enjoining the respondents from enforcing the questioned resolution of the respondent Commission.
The issue to resolve in the instant case is whether or not respondent Signo should be dismissed from petitioner company on grounds of serious misconduct and loss of trust and confidence.
Petitioner contends that respondent Signo violated Sections 6 and 7 of the company's Code on Employee Discipline, which provide:
Section 6, Par. 24—Encouraging, inducing or threatening another employee to perform an act constituting a violation of this Code or of company work, rules or an offense in connection with the official duties of the latter, or allowing himself to be persuaded, induced or influenced to commit such offense.
Penalty—Reprimand to dismissal, depending upon the gravity of the offense.
Section 7, Par. 8—Soliciting or receiving money, gift, share, percentage or benefits from any person, personally or through the mediation of another, to perform an act prejudicial to the Company.
Penalty—Dismissal. (pp. 13-14, Rollo)
Petitioner further argues that the acts of private respondent constituted breach of trust and caused the petitioner company economic losses resulting from the unbilled electric consumption of de Lara; that in view thereof, the dismissal of private respondent Signo is proper considering the circumstances of the case.
The power to dismiss is the normal prerogative of the employer. An employer, generally, can dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by the State, basically in the exercise of its paramount police power. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phil. Inc. v. NLRC, G.R. No. 75782, December 1, 1987,156 SCRA 78).
There is no question that herein respondent Signo is guilty of breach of trust and violation of company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that dismissal should not be meted to respondent Signo considering his twenty (20) years of service in
the employ of petitioner, without any previous derogatory record, in addition to the fact that petitioner company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of petitioner's Power Sales Division.
We find no reason to disturb these findings. Well-established is the principle that findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality. Judicial review by this Court on labor cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer or office based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion (Special Events and Central Shipping Office Workers Union v. San Miguel Corporation, G.R. Nos. L-51002-06, May 30,1983,122 SCRA 557).
This Court has held time and again, in a number of decisions, that notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time in the service of his employer. (Itogon-Suyoc Mines, Inc. v. NLRC, et al., G.R. No. L- 54280, September 30,1982,117 SCRA 523; Meracap v. International Ceramics Manufacturing Co., Inc., et al., G.R. Nos. L-48235-36, July 30,1979, 92 SCRA 412; Sampang v. Inciong, G.R. No. 50992, June 19,1985,137 SCRA 56; De Leon v. NLRC, G.R. No. L-52056, October 30,1980, 100 SCRA 691; Philippine Airlines, Inc. v. PALEA, G.R. No. L-24626, June 28, 1974, 57 SCRA 489).
In a similar case, this Court ruled:
As repeatedly been held by this Court, an employer cannot legally be compelled to continue with the employment of a person who admittedly was guilty of breach of trust towards his employer and whose continuance in the service of the latter is patently inimical to its interest. The law in protecting the rights of the laborers, authorized neither oppression nor self- destruction of the employer.
However, taking into account private respondent's 'twenty-three (23) years of service which undisputedly is unblemished by any previous derogatory record' as found by the respondent Commission itself, and since he has been under preventive suspension during the pendency of this case, in the absence of a showing that the continued employment of private respondent would result in petitioner's oppression or self-destruction, We are of the considered view that his dismissal is a drastic punishment. ... .
xxx xxx xxx
The ends of social and compassionate justice would therefore be served if private respondent is reinstated but without backwages in view of petitioner's obvious good faith. (Itogon- Suyoc Mines, Inc. v. NLRC, et al., 11 7 SCRA 528)
Further, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and
regulations shall be resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140).
In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but without the award of backwages, considering the good faith of the employer in dismissing the respondent.
ACCORDINGLY, premises considered, the petition is hereby DISMISSED and the assailed decision of the National Labor Relations Commission dated March 12, 1987 is AFFIRMED. The temporary restraining order issued on August 3, 1987 is lifted.
SO ORDERED.
[G.R. No. 125340. September 17, 1998]
EMELITA NICARIO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MANCAO SUPERMARKET INC., AND/OR MANAGER, ANTONIO MANCAO, respondents.
D E C I S I O N
ROMERO, J.:
For resolution before this Court is a special civil action for certiorari under Ruled 65 of the Rules of Court which seeks to set aside the resolution of the National Labor Relations Commission (Fifth Division, Cagayan de Oro City) dated December 21, 1995 in NLRC CA No. M-002047-94 entitled “Emelita Nicario v. Mancao Supermarket Inc. and/or Manager” which ruled that petitioner, Emelita Nicario, is not entitled to overtime pay. Nor is private respondent, Antonio Mancao jointly and severally liable with the respondent company for thirteenth month pay, service incentive leave pay, and rest day pay.[1]
Petitioner, Emelita Nicario, was employed with respondent company Mancao Supermarket, on June 6, 1986 as a salesgirl and was later on promoted as sales supervisor. However, private respondent terminated her services on February 7, 1989.
A complaint for illegal dismissal with prayer for backwages, wage differential, service incentive leave pay, overtime pay, 13th month pay and unpaid wages was filed by petitioner before the National Labor Relations Commission, Sub-Regional Arbitration Branch X in Butuan City.
On July 25, 1989, Labor Arbiter Amado M. Solamo dismissed the complaint for lack of merit. Petitioner appealed to the National Labor Relations Commission (NLRC), Fifth Division,
Cagayan de Oro City. In a resolution dated July 25, 1989, the NLRC set aside the labor arbiter’s decision for lack of due process. It ruled that since petitioner assailed her supposed signatures appearing on the payrolls presented by the company as a forgery, the labor arbiter should not have merely depended on the xerox copies of the payrolls, as submitted in evidence by the private respondent but ordered a formal hearing on the issue. Thus, the Commission ordered the case remanded to the arbitration branch for appropriate proceedings. The case was assigned to Labor Arbiter Marissa Macaraig-Guillen.[2]
In a decision dated May 23, 1994, Labor Arbiter Macaraig-Guillen awarded petitioner’s claims for unpaid service incentive leave pay, 13 th month pay, overtime pay and rest day pay for the entire period of her employment, but dismissed her claims for holiday premium pay and unpaid salaries from February 3 to 5, 1989. The dispositive portion of the decision read as follows:
“WHEREFORE, in view of the foregoing, judgment is rendered directing respondent Mancao Supermarket, Inc., and/or Mr. Antonio Mancao to pay complainant Emelita Nicario the sum of forty thousand three hundred ninety pesos and fifteen centavos (P40,393.15) representing unpaid services incentive leave pay, thirteenth month pay, overtime pay, and rest day for the entire period of employment.
All other claims are dismissed for lack of merit.
SO ORDERED.”[3]
Not satisfied with the decision, private respondent appealed to the NLRC, and in a resolution dated August 16, 1995,[4] the Commission affirmed in toto Labor Arbiter Macaraig-Guillen’s decision. Private respondent then filed a motion for reconsideration. In a resolution dated December 21, 1995, public respondent NLRC modified its earlier resolution by deleting the award for overtime pay and ruling that private respondent Antonio Mancao is not jointly and severally liable with Mancao Supermarket to pay petitioner the monetary award adjudged.
Petitioner now comes before this Court alleging grave abuse of discretion on the part of the public respondent NLRC in ruling that (a) she is not entitled to overtime pay and (b) private respondent, Antonio Mancao cannot be held jointly and severally liable with respondent supermarket as to the monetary award.
The Solicitor General, in a manifestation and motion in lieu of comment [5] stated that public respondent NLRC acted with grave abuse of discretion in modifying its earlier resolution (dated August 16, 1995) and thus recommends that the December 21, 1995 resolution be set aside, and its August 16, 1995 resolution be reinstated.
Public respondent NLRC, on the other hand, filed its own comment[6] praying for the dismissal of the petition and for the December 21, 1995 resolution to be affirmed with finality.
The petition is partly impressed with merit.
In her claim for payment of overtime pay, petitioner alleged that during her period of employment, she worked twelve (12) hours a day from 7:30 a.m. to 7:30 p.m., thus rendering overtime work for four hours each day. Labor Arbiter Macaraig-Guillen, in her decision dated
May 23, 1994, awarded overtime pay to petitioner by taking judicial notice of the fact that all Mancao establishments open at 8:00 a.m. and close at 8:00 p.m.. Upon appeal, this particular finding was affirmed by the Commission. However, when private respondent filed a motion for reconsideration from the resolution dated August 16, 1995, the NLRC modified its earlier ruling and deleted the award for overtime pay. Public respondent NLRC instead gave credence to the daily time records (DTRs) presented by respondent corporation showing that petitioner throughout her employment from June 6, 1986 to February 1989, worked only for eight hours a day from 9:00 a.m. to 12:00 p.m. and 2:00 p.m. to 7:00 p.m., and did not render work on her rest days.
Public respondent’s reliance on the daily time records submitted by private respondent is misplaced. As aptly stated by the Solicitor General in lieu of comment, the DTR’s presented by respondent company are unreliable based on the following observations:
“a) the originals thereof were not presented in evidence; petitioner’s allegation of forgery should have prompted respondent to submit the same for inspection; evidence wilfully suppressed would be adverse if produced (Sec. 3(e), Rule 131, Rules of Court)
xxx xxx xxx
e) they would make it appear that petitioner has a two-hour rest period from 12:00 to 2:00 p.m., this is highly unusual for a store establishment because employees should attend to customers almost every minute as well as contrary to the judicial notice that no noon break is observed.
f) petitioner never reported earlier or later than 9:00 a.m., likewise she never went home earlier or later than 8:00 pm; all entries are suspiciously consistent.”[7]
Labor Arbiter Macaraig-Guillen, in taking judicial cognizance of the fact that private respondent company opens twelve (12) hours a day, the same number of hours worked by petitioner everyday, applied Rule 129, Section 2 of the Rules of Court which provides that “a court may take judicial notice of matters which are of public knowledge, or are capable of unquestionable demonstration, or ought to be known because of their judicial functions.” In awarding overtime pay to petitioner, the labor arbiter ruled:
“However, it is of judicial notice that all Mancao establishments open at eight a.m. and close at eight p.m. with no noon break, so it is believable that employees rendered 4-1/2 hours of overtime everyday, 7 days a week.”[8]
Generally, findings of facts of quasi-judicial agencies like the NLRC are accorded great respect and at times even finality if supported by substantial evidence. [9]“Substantial evidence” is such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. However in cases where there is a conflict between the factual findings of the NLRC and the labor arbiter, a review of such factual findings is necessitated.[10]
While private respondent company submitted the daily time records of the petitioner to show that she rendered work for only eight (8) hours a day, it did not refute nor seek to disprove the judicial notice taken by Labor Arbiter Macaraig-Guillen that Mancao establishments, including the establishment where petitioner worked, opens twelve hours a day, opening at 8:00 a.m. and closing at 8:00 p.m.
This Court, in previously evaluating the evidentiary value of daily time records, especially those which show uniform entries with regard to the hours of work rendered by an employee, has ruled that “such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The uniformity and regularity of the entries are ‘badges of untruthfulness and as such indices of dubiety.’[11] The observations made by the Solicitor General regarding the unreliability of the daily time records would therefore seem more convincing. On the other hand, respondent company failed to present substantial evidence, other than the disputed DTRs, to prove that petitioner indeed worked for only eight hours a day.
It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the former’s favor.[12] The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor.[13] This rule should be applied in the case at bar, especially since the evidence presented by the private respondent company is not convincing. Accordingly, we uphold the finding that petitioner rendered overtime work, entitling her to overtime pay.
As to the liability of private respondent Antonio Mancao, petitioner contends that as manager of Mancao establishment, he should be jointly and severally liable with respondent corporation as to the monetary award adjudged.
The general rule is that officers of a corporation are not personally liable for their official acts unless it is shown that they have exceeded their authority. However, the legal fiction that a corporation has a personality separate and distinct from stockholders and members may be disregarded if it is used as a means to perpetuate fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, or to confuse legitimate issues.[14]
In this case, there is no showing that Antonio Mancao, as manager of respondent company, deliberately and maliciously evaded the respondent's company financial obligation to the petitioner. Hence, there appearing to be no evidence on record that Antonio Mancao acted maliciously or deliberately in the non-payment of benefits to petitioner, he cannot be held jointly and severally liable with Mancao supermarket.
WHEREFORE, in view of the foregoing, the instant petition is hereby PARTIALLY GRANTED. Accordingly, the resolution of the NLRC dated December 21, 1995 in NLRC NCR CA No. M-002047-94 is hereby MODIFIED by awarding petitioner, Emelita Nicario her overtime pay and relieving private respondent, Antonio Mancao, of any liability as manager of Mancao Supermarket and further holding Mancao Supermarket solely liable. No costs.
SO ORDERED.
THIRD DIVISION
G.R. No. 178835 February 13, 2009
MAGIS YOUNG ACHIEVERS' LEARNING CENTER and MRS. VIOLETA T. CARIÑO, Petitioners, vs.ADELAIDA P. MANALO, Respondent.
D E C I S I O N
NACHURA, J.:
This is a petition for review on certiorari of the Decision dated January 31, 2007 and of the Resolution dated June 29, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 93917 entitled Magis Young Achievers’ Learning Center and Violeta T. Cariño v. National Labor Relations Commission, 3rd Division, Quezon City, and Adelaida P. Manalo.
The pertinent facts are as follows:
On April 18, 2002, respondent Adelaida P. Manalo was hired as a teacher and acting principal of petitioner Magis Young Achievers’ Learning Center with a monthly salary of P15,000.00.
It appears on record that respondent, on March 29, 2003, wrote a letter of resignation addressed to Violeta T. Cariño, directress of petitioner, which reads:
Dear Madame:
I am tendering my irrevocable resignation effective April 1, 2003 due to personal and family reasons.
I would like to express my thanks and gratitude for the opportunity, trust and confidence given to me as an Acting Principal in your prestigious school.
God bless and more power to you.
Sincerely yours,
(Signed)Mrs. ADELAIDA P. MANALO1
On March 31, 2003, respondent received a letter of termination from petitioner, viz.:
Dear Mrs. Manalo:
Greetings of Peace!
The Board of Trustees of the Cariño Group of Companies, particularly that of Magis Young Achievers’ Learning Center convened, deliberated and came up with a Board Resolution that will strictly impose all means possible to come up with a cost-cutting scheme. Part of that scheme is a systematic reorganization which will entail streamlining of human resources.
As agreed upon by the Board of Directors, the position of PRINCIPAL will be abolished next school year. Therefore, we regret to inform you that we can no longer renew your contract, which will expire on March 31, 2003. Thus, thank you for the input you have given to Magis during your term of office as Acting Principal. The function of the said position shall be delegated to other staff members in the organization.
Hoping for your understanding on this matter and we pray for your future endeavors.
Very truly yours,
(Signed)Mrs. Violeta T. CariñoSchool Directress
Noted by:
(Signed)Mr. Severo CariñoPresident2
On April 4, 2003, respondent instituted against petitioner a Complaint3 for illegal dismissal and non-payment of 13th month pay, with a prayer for reinstatement, award of full backwages and moral and exemplary damages.
In her position paper,4 respondent claimed that her termination violated the provisions of her employment contract, and that the alleged abolition of the position of Principal was not among the grounds for termination by an employer under Article 2825 of the Labor Code. She further asserted that petitioner infringed Article 2836 of the Labor Code, as the required 30-day notice to the Department of Labor and Employment (DOLE) and to her as the employee, and the payment of her separation pay were not complied with. She also claimed that she was terminated from service for the alleged expiration of her employment, but that her contract did not provide for a fixed term or period. She likewise prayed for the payment of her 13th month pay under Presidential Decree (PD) No. 851.
Petitioner, in its position paper,7 countered that respondent was legally terminated because the one-year probationary period, from April 1, 2002 to March 3, 2003, had already lapsed and she failed to meet the criteria set by the school pursuant to the Manual of Regulation for Private Schools, adopted by the then Department of Education, Culture and Sports (DECS), paragraph 75 of which provides that:
(75) Full-time teachers who have rendered three years of satisfactory service shall be considered permanent.
On December 3, 2003, Labor Arbiter (LA) Renell Joseph R. dela Cruz rendered a Decision8 dismissing the complaint for illegal dismissal, including the other claims of respondent, for lack of merit, except that it ordered the payment of her 13th month pay in the amount of P3,750.00. The LA ratiocinated in this wise:
It is our considered opinion [that] complainant was not dismissed, much less, illegally. On the contrary, she resigned. It is hard for us to imagine complainant would accede to sign a resignation letter as a precondition to her hiring considering her educational background. Thus, in the absence
of any circumstance tending to show she was probably coerced her resignation must be upheld. x x x
x x x The agreement (Annex "1" to Respondent’s [petitioner’s] Position Paper; Annex "A" to Complainant’s Position Paper) by its very nature and terms is a contract of employment with a period (from 01 April 2002 to 31 March 2003, Annex ‘1’ to Respondent’s Position Paper). Complainant’s observation that the space reserved for the duration and effectivity of the contract was left blank (Annex ‘A’ to Complainant’s [respondent’s] Position Paper) to our mind is plain oversight. Read in its entirety, it is a standard contract which by its very terms and conditions speaks of a definite period of employment. The parties could have not thought otherwise. The notification requirement in the contract in case of "termination before the expiration of the period" confirms it. x x x
On appeal, on October 28, 2005, the National Labor Relations Commission (NLRC), Third Division,9 in its Decision10 dated October 28, 2005, reversed the Arbiter’s judgment. Petitioner was ordered to reinstate respondent as a teacher, who shall be credited with one-year service of probationary employment, and to pay her the amounts of P3,750.00 and P325,000.00 representing her 13th month pay and backwages, respectively. Petitioner’s motion for reconsideration was denied in the NLRC’s Resolution11 dated January 31, 2006.
Imputing grave abuse of discretion on the part of the NLRC, petitioner went up to the CA via a petition for certiorari. The CA, in its Decision dated January 31, 2007, affirmed the NLRC decision and dismissed the petition. It likewise denied petitioner’s motion for reconsideration in the Resolution dated June 29, 2007. Hence, this petition anchored on the following grounds—
I. THE COURT OF APPEALS ERRED WHEN IT CONCLUDED THAT THE RESIGNATION OF RESPONDENT MANALO DID NOT BECOME EFFECTIVE DUE TO ALLEGED LACK OF ACCEPTANCE;
II. THE COURT OF APPEALS ERRED WHEN IT RULED THAT RESPONDENT MANALO IS A PERMANENT EMPLOYEE;
III. THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONTRACT OF EMPLOYMENT BETWEEN PETITIONER AND RESPONDENT DID NOT STIPULATE A PERIOD.12
Before going to the core issues of the controversy, we would like to restate basic legal principles governing employment of secondary school teachers in private schools, specifically, on the matter of probationary employment.
A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he is qualified for permanent employment. The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length.13
Indeed, the employer has the right, or is at liberty, to choose who will be hired and who will be declined. As a component of this right to select his employees, the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently.14
But the law regulates the exercise of this prerogative to fix the period of probationary employment. While there is no statutory cap on the minimum term of probation, the law sets a maximum "trial period" during which the employer may test the fitness and efficiency of the employee.
The general rule on the maximum allowable period of probationary employment is found in Article 281 of the Labor Code, which states:
Art. 281. Probationary Employment. – Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.1avvphi1.zw+
This upper limit on the term of probationary employment, however, does not apply to all classes of occupations.
For "academic personnel" in private schools, colleges and universities, probationary employment is governed by Section 92 of the 1992 Manual of Regulations for Private Schools15 (Manual), which reads:
Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.16
This was supplemented by DOLE-DECS-CHED-TESDA Order No. 1 dated February 7, 1996, which provides that the probationary period for academic personnel shall not be more than three (3) consecutive school years of satisfactory service for those in the elementary and secondary levels.17 By this supplement, it is made clear that the period of probation for academic personnel shall be counted in terms of "school years," and not "calendar years."18 Then, Section 4.m(4)[c] of the Manual delineates the coverage of Section 92, by defining the term "academic personnel" to include:
(A)ll school personnel who are formally engaged in actual teaching service or in research assignments, either on full-time or part-time basis; as well as those who possess certain prescribed academic functions directly supportive of teaching, such as registrars, librarians, guidance counselors, researchers, and other similar persons. They include school officials responsible for academic matters, and may include other school officials.19
The reason for this disparate treatment was explained many years ago in Escudero v. Office of the President of the Philippines,20 where the Court declared:
However, the six-month probationary period prescribed by the Secretary of Labor is merely the general rule. x x x
It is, thus, clear that the Labor Code authorizes different probationary periods, according to the requirements of the particular job. For private school teachers, the period of probation is governed by the 1970 Manual of Regulations for Private Schools x x x.21
The probationary period of three years for private school teachers was, in fact, confirmed earlier in Labajo v. Alejandro,22 viz.:
The three (3)-year period of service mentioned in paragraph 75 (of the Manual of Regulations for Private Schools) is of course the maximum period or upper limit, so to speak, of probationary employment allowed in the case of private school teachers. This necessarily implies that a regular or permanent employment status may, under certain conditions, be attained in less than three (3) years. By and large, however, whether or not one has indeed attained permanent status in one’s employment, before the passage of three (3) years, is a matter of proof.
Over the years, even with the enactment of a new Labor Code and the revision of the Manual, the rule has not changed.
Thus, for academic personnel in private elementary and secondary schools, it is only after one has satisfactorily completed the probationary period of three (3) school years and is rehired that he acquires full tenure as a regular or permanent employee. In this regard, Section 93 of the Manual pertinently provides:
Sec. 93. Regular or Permanent Status. - Those who have served the probationary period shall be made regular or permanent. Full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.
Accordingly, as held in Escudero, no vested right to a permanent appointment shall accrue until the employee has completed the prerequisite three-year period necessary for the acquisition of a permanent status. Of course, the mere rendition of service for three consecutive years does not automatically ripen into a permanent appointment. It is also necessary that the employee be a full-time teacher, and that the services he rendered are satisfactory.23
The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher’s performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year – since it would be the third school year – of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract.24 It is when the yearly contract is renewed for the third time that Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or permanent employment status.
It is important that the contract of probationary employment specify the period or term of its effectivity. The failure to stipulate its precise duration could lead to the inference that the contract is binding for the full three-year probationary period.25
All this does not mean that academic personnel cannot acquire permanent employment status earlier than after the lapse of three years. The period of probation may be reduced if the employer, convinced of the fitness and efficiency of a probationary employee, voluntarily extends a permanent appointment even before the three-year period ends. Conversely, if the purpose sought by the
employer is neither attained nor attainable within the said period, the law does not preclude the employer from terminating the probationary employment on justifiable ground;26 or, a shorter probationary period may be incorporated in a collective bargaining agreement.27 But absent any circumstances which unmistakably show that an abbreviated probationary period has been agreed upon, the three-year probationary term governs.
Be that as it may, teachers on probationary employment enjoy security of tenure. In Biboso v. Victorias Milling Co., Inc.,28 we made the following pronouncement:
This is, by no means, to assert that the security of tenure protection of the Constitution does not apply to probationary employees. x x x During such period, they could remain in their positions and any circumvention of their rights, in accordance with the statutory scheme, is subject to inquiry and thereafter correction by the Department of Labor.
The ruling in Biboso simply signifies that probationary employees enjoy security of tenure during the term of their probationary employment. As such, they cannot be removed except for cause as provided by law, or if at the end of every yearly contract during the three-year period, the employee does not meet the reasonable standards set by the employer at the time of engagement. But this guarantee of security of tenure applies only during the period of probation. Once that period expires, the constitutional protection can no longer be invoked.29
All these principles notwithstanding, we do not discount the validity of fixed-term employment where –
the fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter.30
It does not necessarily follow that where the duties of the employees consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities.31 Thus, in St. Theresa’s School of Novaliches Foundation v. NLRC,32 we held that a contractual stipulation providing for a fixed term of nine (9) months, not being contrary to law, morals, good customs, public order and public policy, is valid, binding and must be respected, as it is the contract of employment that governs the relationship of the parties.
Now, to the issues in the case at bench.
There should be no question that the employment of the respondent, as teacher, in petitioner school on April 18, 2002 is probationary in character, consistent with standard practice in private schools. In light of our disquisition above, we cannot subscribe to the proposition that the respondent has acquired regular or permanent tenure as teacher. She had rendered service as such only from April 18, 2002 until March 31, 2003. She has not completed the requisite three-year period of probationary employment, as provided in the Manual. She cannot, by right, claim permanent status. lawphil.net
There should also be no doubt that respondent’s appointment as Acting Principal is merely temporary, or one that is good until another appointment is made to take its place.33 An "acting" appointment is essentially a temporary appointment, revocable at will. The undisturbed unanimity of cases shows that one who holds a temporary appointment has no fixed tenure of office; his employment can be terminated any time at the pleasure of the appointing power without need to
show that it is for cause.34 Further, in La Salette of Santiago v. NLRC,35 we acknowledged the customary arrangement in private schools to rotate administrative positions, e.g., Dean or Principal, among employees, without the employee so appointed attaining security of tenure with respect to these positions.
We are also inclined to agree with the CA that the resignation of the respondent36 is not valid, not only because there was no express acceptance thereof by the employer, but because there is a cloud of doubt as to the voluntariness of respondent’s resignation.
Resignation is the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and that he has no other choice but to dissociate himself from employment.37 Voluntary resignation is made with the intention of relinquishing an office, accompanied by the act of abandonment.38 It is the acceptance of an employee’s resignation that renders it operative.39
Furthermore, well-entrenched is the rule that resignation is inconsistent with the filing of a complaint for illegal dismissal.40 To be valid, the resignation must be unconditional, with the intent to operate as such; there must be a clear intention to relinquish the position.41 In this case, respondent actively pursued her illegal dismissal case against petitioner, such that she cannot be said to have voluntarily resigned from her job.
What is truly contentious is whether the probationary appointment of the respondent on April 18, 2002 was for a fixed period of one (1) year, or without a fixed term, inasmuch as the parties presented different versions of the employment agreement. As articulated by the CA:
In plain language, We are confronted with two (2) copies of an agreement, one with a negative period and one provided for a one (1) year period for its effectivity. Ironically, none among the parties offered corroborative evidence as to which of the two (2) discrepancies is the correct one that must be given effect. x x x.42
The CA resolved the impassé in this wise:
Under this circumstance, We can only apply Article 1702 of the Civil Code which provides that, in case of doubt, all labor contracts shall be construed in favor of the laborer. Then, too, settled is the rule that any ambiguity in a contract whose terms are susceptible of different interpretations must be read against the party who drafted it. In the case at bar, the drafter of the contract is herein petitioners and must, therefore, be read against their contention.43
We agree with the CA.
In this case, there truly existed a doubt as to which version of the employment agreement should be given weight. In respondent’s copy, the period of effectivity of the agreement remained blank. On the other hand, petitioner’s copy provided for a one-year period, surprisingly from April 1, 2002 to March 31, 2003, even though the pleadings submitted by both parties indicated that respondent was hired on April 18, 2002. What is noticeable even more is that the handwriting indicating the one-year period in petitioner’s copy is different from the handwriting that filled up the other needed information in the same agreement.44
Thus, following Article 1702 of the Civil Code that all doubts regarding labor contracts should be construed in favor of labor, then it should be respondent’s copy which did not provide for an express period which should be upheld, especially when there are circumstances that render the version of
petitioner suspect. This is in line with the State policy of affording protection to labor, such that the lowly laborer, who is usually at the mercy of the employer, must look up to the law to place him on equal footing with his employer.45
In addition, the employment agreement may be likened into a contract of adhesion considering that it is petitioner who insists that there existed an express period of one year from April 1, 2002 to March 31, 2003, using as proof its own copy of the agreement. While contracts of adhesion are valid and binding, in cases of doubt which will cause a great imbalance of rights against one of the parties, the contract shall be construed against the party who drafted the same. Hence, in this case, where the very employment of respondent is at stake, the doubt as to the period of employment must be construed in her favor.
The other issue to resolve is whether respondent, even as a probationary employee, was illegally dismissed. We rule in the affirmative.
As above discussed, probationary employees enjoy security of tenure during the term of their probationary employment such that they may only be terminated for cause as provided for by law, or if at the end of the probationary period, the employee failed to meet the reasonable standards set by the employer at the time of the employee’s engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it was incumbent upon petitioner to show by competent evidence that she did not meet the standards set by the school. This requirement, petitioner failed to discharge. To note, the termination of respondent was effected by that letter stating that she was being relieved from employment because the school authorities allegedly decided, as a cost-cutting measure, that the position of "Principal" was to be abolished. Nowhere in that letter was respondent informed that her performance as a school teacher was less than satisfactory.
Thus, in light of our ruling of Espiritu Santo Parochial School v. NLRC46 that, in the absence of an express period of probation for private school teachers, the three-year probationary period provided by the Manual of Regulations for Private Schools must apply likewise to the case of respondent. In other words, absent any concrete and competent proof that her performance as a teacher was unsatisfactory from her hiring on April 18, 2002 up to March 31, 2003, respondent is entitled to continue her three-year period of probationary period, such that from March 31, 2003, her probationary employment is deemed renewed for the following two school years.47
Finally, we rule on the propriety of the monetary awards. Petitioner, as employer, is entitled to decide whether to extend respondent a permanent status by renewing her contract beyond the three-year period. Given the acrimony between the parties which must have been generated by this controversy, it can be said unequivocally that petitioner had opted not to extend respondent’s employment beyond this period. Therefore, the award of backwages as a consequence of the finding of illegal dismissal in favor of respondent should be confined to the three-year probationary period. Computing her monthly salary of P15,000.00 for the next two school years (P15,000.00 x 10 months x 2), respondent already having received her full salaries for the year 2002-2003, she is entitled to a total amount of P300,000.00.48 Moreover, respondent is also entitled to receive her 13th month pay correspondent to the said two school years, computed as yearly salary, divided by 12 months in a year, multiplied by 2, corresponding to the school years 2003-2004 and 2004-2005, or P150,000.00 / 12 months x 2 =P25,000.00. Thus, the NLRC was correct in awarding respondent the amount of P325,000.00 as backwages, inclusive of 13th month pay for the school years 2003-2004 and 2004-2005, and the amount of P3,750.00 as pro-rated 13th month pay.
WHEREFORE, the petition is DENIED. The assailed Decision dated January 31, 2007 and the Resolution dated June 29, 2007 of the Court of Appeals are AFFIRMED.
SO ORDERED
ON EMPLOYER-EMPLOYEE RELATIONSHIP
[G.R. No. 146530. January 17, 2005]
PEDRO CHAVEZ, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN LEE, Plant Manager, respondents.
D E C I S I O N
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari of the Resolution [1] dated December 15, 2000 of the Court of Appeals (CA) reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485. The assailed resolution reinstated the Decision dated July 10, 1998 of the National Labor Relations Commission (NLRC), dismissing the complaint for illegal dismissal filed by herein petitioner Pedro Chavez. The said NLRC decision similarly reversed its earlier Decision dated January 27, 1998 which, affirming that of the Labor Arbiter, ruled that the petitioner had been illegally dismissed by respondents Supreme Packaging, Inc. and Mr. Alvin Lee.
The case stemmed from the following facts:
The respondent company, Supreme Packaging, Inc., is in the business of manufacturing cartons and other packaging materials for export and distribution. It engaged the services of the petitioner, Pedro Chavez, as truck driver on October 25, 1984. As such, the petitioner was tasked to deliver the respondent company’s products from its factory in Mariveles, Bataan, to its various customers, mostly in Metro Manila. The respondent company furnished the petitioner with a truck. Most of the petitioner’s delivery trips were made at nighttime, commencing at 6:00 p.m. from Mariveles, and returning thereto in the afternoon two or three days after. The deliveries were made in accordance with the routing slips issued by respondent company indicating the order, time and urgency of delivery. Initially, the petitioner was paid the sum of P350.00 per trip. This was later adjusted to P480.00 per trip and, at the time of his alleged dismissal, the petitioner was receiving P900.00 per trip.
Sometime in 1992, the petitioner expressed to respondent Alvin Lee, respondent company’s plant manager, his (the petitioner’s) desire to avail himself of the benefits that the regular employees were receiving such as overtime pay, nightshift differential
pay, and 13th month pay, among others. Although he promised to extend these benefits to the petitioner, respondent Lee failed to actually do so.
On February 20, 1995, the petitioner filed a complaint for regularization with the Regional Arbitration Branch No. III of the NLRC in San Fernando, Pampanga. Before the case could be heard, respondent company terminated the services of the petitioner. Consequently, on May 25, 1995, the petitioner filed an amended complaint against the respondents for illegal dismissal, unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th month pay, among others. The case was docketed as NLRC Case No. RAB-III-02-6181-95.
The respondents, for their part, denied the existence of an employer-employee relationship between the respondent company and the petitioner. They averred that the petitioner was an independent contractor as evidenced by the contract of service which he and the respondent company entered into. The said contract provided as follows:
That the Principal [referring to Supreme Packaging, Inc.], by these presents, agrees to hire and the Contractor [referring to Pedro Chavez], by nature of their specialized line or service jobs, accepts the services to be rendered to the Principal, under the following terms and covenants heretofore mentioned:
1. That the inland transport delivery/hauling activities to be performed by the contractor to the principal, shall only cover travel route from Mariveles to Metro Manila. Otherwise, any change to this travel route shall be subject to further agreement by the parties concerned.
2. That the payment to be made by the Principal for any hauling or delivery transport services fully rendered by the Contractor shall be on a per trip basis depending on the size or classification of the truck being used in the transport service, to wit:
a) If the hauling or delivery service shall require a truck of six wheeler, the payment on a per trip basis from Mariveles to Metro Manila shall be THREE HUNDRED PESOS (P300.00) and EFFECTIVE December 15, 1984.
b) If the hauling or delivery service require a truck of ten wheeler, the payment on a per trip basis, following the same route mentioned, shall be THREE HUNDRED FIFTY (P350.00) Pesos and Effective December 15, 1984.
3. That for the amount involved, the Contractor will be to [sic] provide for [sic] at least two (2) helpers;
4. The Contractor shall exercise direct control and shall be responsible to the Principal for the cost of any damage to, loss of any goods, cargoes, finished products or the like, while the same are in transit, or due to reckless [sic] of its men utilized for the purpose above mentioned;
5. That the Contractor shall have absolute control and disciplinary power over its men working for him subject to this agreement, and that the Contractor shall hold the Principal free and harmless from any liability or claim that may arise by virtue of the Contractor’s non-compliance to the existing provisions of the Minimum Wage Law, the Employees Compensation Act, the Social Security System Act, or any other such law or decree that may hereafter be enacted, it being clearly understood that any truck drivers, helpers or men working with and for the Contractor, are not
employees who will be indemnified by the Principal for any such claim, including damages incurred in connection therewith;
6. This contract shall take effect immediately upon the signing by the parties, subject to renewal on a year-to-year basis.[2]
This contract of service was dated December 12, 1984. It was subsequently renewed twice, on July 10, 1989 and September 28, 1992. Except for the rates to be paid to the petitioner, the terms of the contracts were substantially the same. The relationship of the respondent company and the petitioner was allegedly governed by this contract of service.
The respondents insisted that the petitioner had the sole control over the means and methods by which his work was accomplished. He paid the wages of his helpers and exercised control over them. As such, the petitioner was not entitled to regularization because he was not an employee of the respondent company. The respondents, likewise, maintained that they did not dismiss the petitioner. Rather, the severance of his contractual relation with the respondent company was due to his violation of the terms and conditions of their contract. The petitioner allegedly failed to observe the minimum degree of diligence in the proper maintenance of the truck he was using, thereby exposing respondent company to unnecessary significant expenses of overhauling the said truck.
After the parties had filed their respective pleadings, the Labor Arbiter rendered the Decision dated February 3, 1997, finding the respondents guilty of illegal dismissal. The Labor Arbiter declared that the petitioner was a regular employee of the respondent company as he was performing a service that was necessary and desirable to the latter’s business. Moreover, it was noted that the petitioner had discharged his duties as truck driver for the respondent company for a continuous and uninterrupted period of more than ten years.
The contract of service invoked by the respondents was declared null and void as it constituted a circumvention of the constitutional provision affording full protection to labor and security of tenure. The Labor Arbiter found that the petitioner’s dismissal was anchored on his insistent demand to be regularized. Hence, for lack of a valid and just cause therefor and for their failure to observe the due process requirements, the respondents were found guilty of illegal dismissal. The dispositive portion of the Labor Arbiter’s decision states:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered declaring respondent SUPREME PACKAGING, INC. and/or MR. ALVIN LEE, Plant Manager, with business address at BEPZ, Mariveles, Bataan guilty of illegal dismissal, ordering said respondent to pay complainant his separation pay equivalent to one (1) month pay per year of service based on the average monthly pay of P10,800.00 in lieu of reinstatement as his reinstatement back to work will not do any good between the parties as the employment relationship has already become strained and full backwages from the time his compensation was withheld on February 23, 1995 up to January 31, 1997 (cut-off date) until compliance, otherwise, his backwages shall continue to run. Also to pay complainant his 13th month pay, night shift differential pay and service incentive leave pay hereunder computed as follows:
a) Backwages ………………….. P248,400.00b) Separation Pay ………….…... P140,400.00c) 13th month pay ………….……P 10,800.00d) Service Incentive Leave Pay .. 2,040.00
TOTAL P401,640.00
Respondent is also ordered to pay ten (10%) of the amount due the complainant as attorney’s fees.
SO ORDERED.[3]
The respondents seasonably interposed an appeal with the NLRC. However, the appeal was dismissed by the NLRC in its Decision [4] dated January 27, 1998, as it affirmed in toto the decision of the Labor Arbiter. In the said decision, the NLRC characterized the contract of service between the respondent company and the petitioner as a “scheme” that was resorted to by the respondents who, taking advantage of the petitioner’s unfamiliarity with the English language and/or legal niceties, wanted to evade the effects and implications of his becoming a regularized employee.[5]
The respondents sought reconsideration of the January 27, 1998 Decision of the NLRC. Acting thereon, the NLRC rendered another Decision [6] dated July 10, 1998, reversing its earlier decision and, this time, holding that no employer-employee relationship existed between the respondent company and the petitioner. In reconsidering its earlier decision, the NLRC stated that the respondents did not exercise control over the means and methods by which the petitioner accomplished his delivery services. It upheld the validity of the contract of service as it pointed out that said contract was silent as to the time by which the petitioner was to make the deliveries and that the petitioner could hire his own helpers whose wages would be paid from his own account. These factors indicated that the petitioner was an independent contractor, not an employee of the respondent company.
The NLRC ruled that the contract of service was not intended to circumvent Article 280 of the Labor Code on the regularization of employees. Said contract, including the fixed period of employment contained therein, having been knowingly and voluntarily entered into by the parties thereto was declared valid citing Brent School, Inc. v. Zamora.[7] The NLRC, thus, dismissed the petitioner’s complaint for illegal dismissal.
The petitioner sought reconsideration of the July 10, 1998 Decision but it was denied by the NLRC in its Resolution dated September 7, 1998. He then filed with this Court a petition for certiorari, which was referred to the CA following the ruling in St. Martin Funeral Home v. NLRC.[8]
The appellate court rendered the Decision dated April 28, 2000, reversing the July 10, 1998 Decision of the NLRC and reinstating the decision of the Labor Arbiter. In the said decision, the CA ruled that the petitioner was a regular employee of the respondent company because as its truck driver, he performed a service that was indispensable to the latter’s business. Further, he had been the respondent company’s truck driver for ten continuous years. The CA also reasoned that the petitioner could not be considered an independent contractor since he had no substantial capital in the form of tools and machinery. In fact, the truck that he drove belonged to the respondent company. The
CA also observed that the routing slips that the respondent company issued to the petitioner showed that it exercised control over the latter. The routing slips indicated the chronological order and priority of delivery, the urgency of certain deliveries and the time when the goods were to be delivered to the customers.
The CA, likewise, disbelieved the respondents’ claim that the petitioner abandoned his job noting that he just filed a complaint for regularization. This actuation of the petitioner negated the respondents’ allegation that he abandoned his job. The CA held that the respondents failed to discharge their burden to show that the petitioner’s dismissal was for a valid and just cause. Accordingly, the respondents were declared guilty of illegal dismissal and the decision of the Labor Arbiter was reinstated.
In its April 28, 2000 Decision, the CA denounced the contract of service between the respondent company and the petitioner in this wise:
In summation, we rule that with the proliferation of contracts seeking to prevent workers from attaining the status of regular employment, it is but necessary for the courts to scrutinize with extreme caution their legality and justness. Where from the circumstances it is apparent that a contract has been entered into to preclude acquisition of tenurial security by the employee, they should be struck down and disregarded as contrary to public policy and morals. In this case, the “contract of service” is just another attempt to exploit the unwitting employee and deprive him of the protection of the Labor Code by making it appear that the stipulations of the parties were governed by the Civil Code as in ordinary transactions.[9]
However, on motion for reconsideration by the respondents, the CA made a complete turn around as it rendered the assailed Resolution dated December 15, 2000 upholding the contract of service between the petitioner and the respondent company. In reconsidering its decision, the CA explained that the extent of control exercised by the respondents over the petitioner was only with respect to the result but not to the means and methods used by him. The CA cited the following circumstances: (1) the respondents had no say on how the goods were to be delivered to the customers; (2) the petitioner had the right to employ workers who would be under his direct control; and (3) the petitioner had no working time.
The fact that the petitioner had been with the respondent company for more than ten years was, according to the CA, of no moment because his status was determined not by the length of service but by the contract of service. This contract, not being contrary to morals, good customs, public order or public policy, should be given the force and effect of law as between the respondent company and the petitioner. Consequently, the CA reinstated the July 10, 1998 Decision of the NLRC dismissing the petitioner’s complaint for illegal dismissal.
Hence, the recourse to this Court by the petitioner. He assails the December 15, 2000 Resolution of the appellate court alleging that:
(A)
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN GIVING MORE CONSIDERATION TO THE “CONTRACT OF SERVICE” ENTERED INTO BY
PETITIONER AND PRIVATE RESPONDENT THAN ARTICLE 280 OF THE LABOR CODE OF THE PHILIPPINES WHICH CATEGORICALLY DEFINES A REGULAR EMPLOYMENT NOTWITHSTANDING ANY WRITTEN AGREEMENT TO THE CONTRARY AND REGARDLESS OF THE ORAL AGREEMENT OF THE PARTIES;
(B)
THE COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN REVERSING ITS OWN FINDINGS THAT PETITIONER IS A REGULAR EMPLOYEE AND IN HOLDING THAT THERE EXISTED NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN PRIVATE RESPONDENT AND PETITIONER IN AS MUCH AS THE “CONTROL TEST” WHICH IS CONSIDERED THE MOST ESSENTIAL CRITERION IN DETERMINING THE EXISTENCE OF SAID RELATIONSHIP IS NOT PRESENT. [10]
The threshold issue that needs to be resolved is whether there existed an employer-employee relationship between the respondent company and the petitioner. We rule in the affirmative.
The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the employee’s conduct. [11] The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.[12] All the four elements are present in this case.
First. Undeniably, it was the respondents who engaged the services of the petitioner without the intervention of a third party.
Second. Wages are defined as “remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered.” [13]
That the petitioner was paid on a per trip basis is not significant. This is merely a method of computing compensation and not a basis for determining the existence or absence of employer-employee relationship. One may be paid on the basis of results or time expended on the work, and may or may not acquire an employment status, depending on whether the elements of an employer-employee relationship are present or not.[14] In this case, it cannot be gainsaid that the petitioner received compensation from the respondent company for the services that he rendered to the latter.
Moreover, under the Rules Implementing the Labor Code, every employer is required to pay his employees by means of payroll. [15] The payroll should show, among other things, the employee’s rate of pay, deductions made, and the amount actually paid to the employee. Interestingly, the respondents did not present the payroll to support their claim that the petitioner was not their employee, raising speculations whether this omission proves that its presentation would be adverse to their case.[16]
Third. The respondents’ power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver. They exercised this power by terminating the petitioner’s services albeit in the guise of “severance of contractual relation” due allegedly to the latter’s breach of his contractual obligation.
Fourth. As earlier opined, of the four elements of the employer-employee relationship, the “control test” is the most important. Compared to an employee, an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. [17] Hence, while an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the employer’s power to control the means and methods by which the employee’s work is to be performed and accomplished.[18]
Although the respondents denied that they exercised control over the manner and methods by which the petitioner accomplished his work, a careful review of the records shows that the latter performed his work as truck driver under the respondents’ supervision and control. Their right of control was manifested by the following attendant circumstances:
1. The truck driven by the petitioner belonged to respondent company;
2. There was an express instruction from the respondents that the truck shall be used exclusively to deliver respondent company’s goods; [19]
3. Respondents directed the petitioner, after completion of each delivery, to park the truck in either of two specific places only, to wit: at its office in Metro Manila at 2320 Osmeña Street, Makati City or at BEPZ, Mariveles, Bataan;[20] and
4. Respondents determined how, where and when the petitioner would perform his task by issuing to him gate passes and routing slips. [21]
a. The routing slips indicated on the column REMARKS, the chronological order and priority of delivery such as 1st drop, 2nd drop, 3rd drop, etc. This meant that the petitioner had to deliver the same according to the order of priority indicated therein.
b. The routing slips, likewise, showed whether the goods were to be delivered urgently or not by the word RUSH printed thereon.
c. The routing slips also indicated the exact time as to when the goods were to be delivered to the customers as, for example, the words “tomorrow morning” was written on slip no. 2776.
These circumstances, to the Court’s mind, prove that the respondents exercised control over the means and methods by which the petitioner accomplished his work as truck driver of the respondent company. On the other hand, the Court is hard put to believe the respondents’ allegation that the petitioner was an independent contractor engaged in providing delivery or hauling services when he did not even own the truck used for such services. Evidently, he did not possess substantial capitalization or investment in the form of tools, machinery and work premises. Moreover, the petitioner
performed the delivery services exclusively for the respondent company for a continuous and uninterrupted period of ten years.
The contract of service to the contrary notwithstanding, the factual circumstances earlier discussed indubitably establish the existence of an employer-employee relationship between the respondent company and the petitioner. It bears stressing that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract and providing therein that the employee is an independent contractor when, as in this case, the facts clearly show otherwise. Indeed, the employment status of a person is defined and prescribed by law and not by what the parties say it should be.[22]
Having established that there existed an employer-employee relationship between the respondent company and the petitioner, the Court shall now determine whether the respondents validly dismissed the petitioner.
As a rule, the employer bears the burden to prove that the dismissal was for a valid and just cause.[23] In this case, the respondents failed to prove any such cause for the petitioner’s dismissal. They insinuated that the petitioner abandoned his job. To constitute abandonment, these two factors must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship.[24] Obviously, the petitioner did not intend to sever his relationship with the respondent company for at the time that he allegedly abandoned his job, the petitioner just filed a complaint for regularization, which was forthwith amended to one for illegal dismissal. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement.[25]
Neither can the respondents’ claim that the petitioner was guilty of gross negligence in the proper maintenance of the truck constitute a valid and just cause for his dismissal. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. [26] The negligence, to warrant removal from service, should not merely be gross but also habitual.[27] The single and isolated act of the petitioner’s negligence in the proper maintenance of the truck alleged by the respondents does not amount to “gross and habitual neglect” warranting his dismissal.
The Court agrees with the following findings and conclusion of the Labor Arbiter:
… As against the gratuitous allegation of the respondent that complainant was not dismissed from the service but due to complainant’s breach of their contractual relation, i.e., his violation of the terms and conditions of the contract, we are very much inclined to believe complainant’s story that his dismissal from the service was anchored on his insistent demand that he be considered a regular employee. Because complainant in his right senses will not just abandon for that reason alone his work especially so that it is only his job where he depends chiefly his existence and support for his family if he was not aggrieved by the respondent when he was told that his services as driver will be terminated on February 23, 1995.[28]
Thus, the lack of a valid and just cause in terminating the services of the petitioner renders his dismissal illegal. Under Article 279 of the Labor Code, an employee who is unjustly dismissed is entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of 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. [29] However, as found by the Labor Arbiter, the circumstances obtaining in this case do not warrant the petitioner’s reinstatement. A more equitable disposition, as held by the Labor Arbiter, would be an award of separation pay equivalent to one month for every year of service from the time of his illegal dismissal up to the finality of this judgment in addition to his full backwages, allowances and other benefits.
WHEREFORE, the instant petition is GRANTED. The Resolution dated December 15, 2000 of the Court of Appeals reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is REVERSED and SET ASIDE. The Decision dated February 3, 1997 of the Labor Arbiter in NLRC Case No. RAB-III-02-6181-5, finding the respondents guilty of illegally terminating the employment of petitioner Pedro Chavez, is REINSTATED.
SO ORDERED.
SECOND DIVISION
G.R. No. L-48645 January 7, 1987
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ANTONIO CASBADILLO, PROSPERO TABLADA, ERNESTO BENGSON, PATRICIO SERRANO, ANTONIO B. BOBIAS, VIRGILIO ECHAS, DOMINGO PARINAS, NORBERTO GALANG, JUANITO NAVARRO, NESTORIO MARCELLANA, TEOFILO B. CACATIAN, RUFO L. EGUIA, CARLOS SUMOYAN, LAMBERTO RONQUILLO, ANGELITO AMANCIO, DANILO B. MATIAR, ET AL., petitioners, vs.HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS, OFFICE OF THE PRESIDENT, HON. AMADO G. INCIONG, UNDERSECRETARY OF LABOR, SAN MIGUEL CORPORATION, GENARO OLIVES, ENRIQUE CAMAHORT, FEDERICO OÑATE, ERNESTO VILLANUEVA, ANTONIO BOCALING and GODOFREDO CUETO, respondents.
Armando V. Ampil for petitioners.
Siguion Reyna, Montecillo and Ongsiako Law Office for private respondents.
GUTIERREZ, JR., J.:
The elemental question in labor law of whether or not an employer-employee relationship exists between petitioners-members of the "Brotherhood Labor Unit Movement of the Philippines" (BLUM) and respondent San Miguel Corporation, is the main issue in this petition. The disputed decision of public respondent Ronaldo Zamora, Presidential Assistant for legal Affairs, contains a brief summary of the facts involved:
1. The records disclose that on July 11, 1969, BLUM filed a complaint with the now defunct Court of Industrial Relations, charging San Miguel Corporation, and the following officers: Enrique Camahort, Federico Ofiate Feliciano Arceo, Melencio Eugenia Jr., Ernesto Villanueva, Antonio Bocaling and Godofredo Cueto of unfair labor practice as set forth in Section 4 (a), sub-sections (1) and (4) of Republic Act No. 875 and of Legal dismissal. It was alleged that respondents ordered the individual complainants to disaffiliate from the complainant union; and that management dismissed the individual complainants when they insisted on their union membership.
On their part, respondents moved for the dismissal of the complaint on the grounds that the complainants are not and have never been employees of respondent company but employees of the independent contractor; that respondent company has never had control over the means and methods followed by the independent contractor who enjoyed full authority to hire and control said employees; and that the individual complainants are barred by estoppel from asserting that they are employees of respondent company.
While pending with the Court of Industrial Relations CIR pleadings and testimonial and documentary evidences were duly presented, although the actual hearing was delayed by several postponements. The dispute was taken over by the National Labor Relations Commission (NLRC) with the decreed abolition of the CIR and the hearing of the case intransferably commenced on September 8, 1975.
On February 9, 1976, Labor Arbiter Nestor C. Lim found for complainants which was concurred in by the NLRC in a decision dated June 28, 1976. The amount of backwages awarded, however, was reduced by NLRC to the equivalent of one (1) year salary.
On appeal, the Secretary in a decision dated June 1, 1977, set aside the NLRC ruling, stressing the absence of an employer-mployee relationship as borne out by the records of the case. ...
The petitioners strongly argue that there exists an employer-employee relationship between them and the respondent company and that they were dismissed for unionism, an act constituting unfair labor practice "for which respondents must be made to answer."
Unrebutted evidence and testimony on record establish that the petitioners are workers who have been employed at the San Miguel Parola Glass Factory since 1961, averaging about seven (7) years of service at the time of their termination. They worked as "cargadores" or "pahinante" at the SMC Plant loading, unloading, piling or palleting empty bottles and woosen shells to and from company trucks and warehouses. At times, they accompanied the company trucks on their delivery routes.
The petitioners first reported for work to Superintendent-in-Charge Camahort. They were issued gate passes signed by Camahort and were provided by the respondent company with the tools, equipment and paraphernalia used in the loading, unloading, piling and hauling operation.
Job orders emanated from Camahort. The orders are then transmitted to an assistant-officer-in-charge. In turn, the assistant informs the warehousemen and checkers regarding the same. The latter, thereafter, relays said orders to the capatazes or group leaders who then give orders to the workers as to where, when and what to load, unload, pile, pallet or clean.
Work in the glass factory was neither regular nor continuous, depending wholly on the volume of bottles manufactured to be loaded and unloaded, as well as the business activity of the company. Work did not necessarily mean a full eight (8) hour day for the petitioners. However, work,at times, exceeded the eight (8) hour day and necessitated work on Sundays and holidays. For this, they were neither paid overtime nor compensation for work on Sundays and holidays.
Petitioners were paid every ten (10) days on a piece rate basis, that is, according to the number of cartons and wooden shells they were able to load, unload, or pile. The group leader notes down the number or volume of work that each individual worker has accomplished. This is then made the basis of a report or statement which is compared with the notes of the checker and warehousemen as to whether or not they tally. Final approval of report is by officer-in-charge Camahort. The pay check is given to the group leaders for encashment, distribution, and payment to the petitioners in accordance with payrolls prepared by said leaders. From the total earnings of the group, the group leader gets a participation or share of ten (10%) percent plus an additional amount from the earnings of each individual.
The petitioners worked exclusive at the SMC plant, never having been assigned to other companies or departments of SMC plant, even when the volume of work was at its minimum. When any of the glass furnaces suffered a breakdown, making a shutdown necessary, the petitioners work was temporarily suspended. Thereafter, the petitioners would return to work at the glass plant.
Sometime in January, 1969, the petitioner workers — numbering one hundred and forty (140) organized and affiliated themselves with the petitioner union and engaged in union activities. Believing themselves entitled to overtime and holiday pay, the petitioners pressed management, airing other grievances such as being paid below the minimum wage law, inhuman treatment, being forced to borrow at usurious rates of interest and to buy raffle tickets, coerced by withholding their salaries, and salary deductions made without their consent. However, their gripes and grievances were not heeded by the respondents.
On February 6, 1969, the petitioner union filed a notice of strike with the Bureau of Labor Relations in connection with the dismissal of some of its members who were allegedly castigated for their union membership and warned that should they persist in continuing with their union activities they would be dismissed from their jobs. Several conciliation conferences were scheduled in order to thresh out their differences, On February 12, 1969, union member Rogelio Dipad was dismissed from work. At the scheduled conference on February 19, 1969, the complainant union through its officers headed by National President Artemio Portugal Sr., presented a letter to the respondent company containing proposals and/or labor demands together with a request for recognition and collective bargaining.
San Miguel refused to bargain with the petitioner union alleging that the workers are not their employees.
On February 20, 1969, all the petitioners were dismissed from their jobs and, thereafter, denied entrance to respondent company's glass factory despite their regularly reporting for work. A complaint for illegal dismissal and unfair labor practice was filed by the petitioners.
The case reaches us now with the same issues to be resolved as when it had begun.
The question of whether an employer-employee relationship exists in a certain situation continues to bedevil the courts. Some businessmen try to avoid the bringing about of an employer-employee relationship in their enterprises because that judicial relation spawns obligations connected with workmen's compensation, social security, medicare, minimum wage, termination pay, and unionism. (Mafinco Trading Corporation v. Ople, 70 SCRA 139).
In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It. is the called "control test" that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra,and Rosario Brothers, Inc. v. Ople, 131 SCRA 72).
Applying the above criteria, the evidence strongly indicates the existence of an employer-employee relationship between petitioner workers and respondent San Miguel Corporation. The respondent asserts that the petitioners are employees of the Guaranteed Labor Contractor, an independent labor contracting firm.
The facts and evidence on record negate respondent SMC's claim.
The existence of an independent contractor relationship is generally established by the following criteria: "whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises tools, appliances, materials and labor; and the mode, manner and terms of payment" (56 CJS Master and Servant, Sec. 3(2), 46; See also 27 AM. Jur. Independent Contractor, Sec. 5, 485 and Annex 75 ALR 7260727)
None of the above criteria exists in the case at bar.
Highly unusual and suspect is the absence of a written contract to specify the performance of a specified piece of work, the nature and extent of the work and the term and duration of the relationship. The records fail to show that a large commercial outfit, such as the San Miguel Corporation, entered into mere oral agreements of employment or labor contracting where the same would involve considerable expenses and dealings with a large number of workers over a long period of time. Despite respondent company's allegations not an iota of evidence was offered to prove the same or its particulars. Such failure makes respondent SMC's stand subject to serious doubts.
Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners had worked continuously and exclusively for the respondent company's shipping and warehousing department. Considering the length of time that the petitioners have worked with the respondent company, there is justification to conclude that they were engaged to perform activities necessary or desirable in the usual business or trade of the respondent, and the petitioners are, therefore regular employees (Phil.
Fishing Boat Officers and Engineers Union v. Court of Industrial Relations, 112 SCRA 159 and RJL Martinez Fishing Corporation v. National Labor Relations Commission, 127 SCRA 454).
As we have found in RJL Martinez Fishing Corporation v. National Labor Relations Commission (supra):
... [T]he employer-employee relationship between the parties herein is not coterminous with each loading and unloading job. As earlier shown, respondents are engaged in the business of fishing. For this purpose, they have a fleet of fishing vessels. Under this situation, respondents' activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. So that the activities performed by herein complainants, i.e. unloading the catch of tuna fish from respondents' vessels and then loading the same to refrigerated vans, are necessary or desirable in the business of respondents. This circumstance makes the employment of complainants a regular one, in the sense that it does not depend on any specific project or seasonable activity. (NLRC Decision, p. 94, Rollo). lwphl@itç
so as it with petitioners in the case at bar. In fact, despite past shutdowns of the glass plant for repairs, the petitioners, thereafter, promptly returned to their jobs, never having been replaced, or assigned elsewhere until the present controversy arose. The term of the petitioners' employment appears indefinite. The continuity and habituality of petitioners' work bolsters their claim of employee status vis-a-vis respondent company,
Even under the assumption that a contract of employment had indeed been executed between respondent SMC and the alleged labor contractor, respondent's case will, nevertheless, fail.
Section 8, Rule VIII, Book III of the Implementing Rules of the Labor Code provides:
Job contracting. — There is job contracting permissible under the Code if the following conditions are met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and
(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.
We find that Guaranteed and Reliable Labor contractors have neither substantial capital nor investment to qualify as an independent contractor under the law. The premises, tools, equipment and paraphernalia used by the petitioners in their jobs are admittedly all supplied by respondent company. It is only the manpower or labor force which the alleged contractors supply, suggesting the existence of a "labor only" contracting scheme prohibited by law (Article 106, 109 of the Labor Code; Section 9(b), Rule VIII, Book III, Implementing Rules and Regulations of the Labor Code). In fact, even the alleged contractor's office, which consists of a space at respondent company's warehouse, table, chair, typewriter and cabinet, are provided for by respondent SMC. It is therefore clear that the alleged contractors have no capital outlay involved in the conduct of its business, in the maintenance thereof or in the payment of its workers' salaries.
The payment of the workers' wages is a critical factor in determining the actuality of an employer-employee relationship whether between respondent company and petitioners or between the alleged independent contractor and petitioners. It is important to emphasize that in a truly independent contractor-contractee relationship, the fees are paid directly to the manpower agency in lump sum without indicating or implying that the basis of such lump sum is the salary per worker multiplied by the number of workers assigned to the company. This is the rule inSocial Security System v. Court of Appeals (39 SCRA 629, 635).
The alleged independent contractors in the case at bar were paid a lump sum representing only the salaries the workers were entitled to, arrived at by adding the salaries of each worker which depend on the volume of work they. had accomplished individually. These are based on payrolls, reports or statements prepared by the workers' group leader, warehousemen and checkers, where they note down the number of cartons, wooden shells and bottles each worker was able to load, unload, pile or pallet and see whether they tally. The amount paid by respondent company to the alleged independent contractor considers no business expenses or capital outlay of the latter. Nor is the profit or gain of the alleged contractor in the conduct of its business provided for as an amount over and above the workers' wages. Instead, the alleged contractor receives a percentage from the total earnings of all the workers plus an additional amount corresponding to a percentage of the earnings of each individual worker, which, perhaps, accounts for the petitioners' charge of unauthorized deductions from their salaries by the respondents.
Anent the argument that the petitioners are not employees as they worked on piece basis, we merely have to cite our rulings in Dy Keh Beng v. International Labor and Marine Union of the Philippines (90 SCRA 161), as follows:
"[C]ircumstances must be construed to determine indeed if payment by the piece is just a method of compensation and does not define the essence of the relation. Units of time . . . and units of work are in establishments like respondent (sic) just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot construe payment by the piece where work is done in such an establishment so as to put the worker completely at liberty to turn him out and take in another at pleasure."
Article 106 of the Labor Code provides the legal effect of a labor only contracting scheme, to wit:
... the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
Firmly establishing respondent SMC's role as employer is the control exercised by it over the petitioners that is, control in the means and methods/manner by which petitioners are to go about their work, as well as in disciplinary measures imposed by it.
Because of the nature of the petitioners' work as cargadores or pahinantes, supervision as to the means and manner of performing the same is practically nil. For, how many ways are there to load and unload bottles and wooden shells? The mere concern of both respondent SMC and the alleged contractor is that the job of having the bottles and wooden shells brought to and from the warehouse be done. More evident and pronounced is respondent company's right to control in the discipline of petitioners. Documentary evidence presented by the petitioners establish respondent SMC's right to impose disciplinary measures for violations or infractions of its rules and regulations as well as its right to recommend transfers and dismissals of the piece workers. The inter-office memoranda submitted in evidence prove the company's control over the petitioners. That respondent SMC has
the power to recommend penalties or dismissal of the piece workers, even as to Abner Bungay who is alleged by SMC to be a representative of the alleged labor contractor, is the strongest indication of respondent company's right of control over the petitioners as direct employer. There is no evidence to show that the alleged labor contractor had such right of control or much less had been there to supervise or deal with the petitioners.
The petitioners were dismissed allegedly because of the shutdown of the glass manufacturing plant. Respondent company would have us believe that this was a case of retrenchment due to the closure or cessation of operations of the establishment or undertaking. But such is not the case here. The respondent's shutdown was merely temporary, one of its furnaces needing repair. Operations continued after such repairs, but the petitioners had already been refused entry to the premises and dismissed from respondent's service. New workers manned their positions. It is apparent that the closure of respondent's warehouse was merely a ploy to get rid of the petitioners, who were then agitating the respondent company for benefits, reforms and collective bargaining as a union. There is no showing that petitioners had been remiss in their obligations and inefficient in their jobs to warrant their separation.
As to the charge of unfair labor practice because of SMC's refusal to bargain with the petitioners, it is clear that the respondent company had an existing collective bargaining agreement with the IBM union which is the recognized collective bargaining representative at the respondent's glass plant.
There being a recognized bargaining representative of all employees at the company's glass plant, the petitioners cannot merely form a union and demand bargaining. The Labor Code provides the proper procedure for the recognition of unions as sole bargaining representatives. This must be followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The San Miguel Corporation is hereby ordered to REINSTATE petitioners, with three (3) years backwages. However, where reinstatement is no longer possible, the respondent SMC is ordered to pay the petitioners separation pay equivalent to one (1) month pay for every year of service.
SO ORDERED
G.R. No. 106231 November 16, 1994
HAWAIIAN-PHILIPPINE COMPANY, petitioner, vs.REYNALDO J. GULMATICO, Labor Arbiter, Regional Arbitration Branch No. VI, AND NATIONAL FEDERATION OF SUGAR WORKERS-FOOD AND GENERAL TRADES representing all the sugar farm workers of the HAWAIIAN PHILIPPINE MILLING DISTRICT, respondents.
Angara, Abella, Concepcion, Regala & Cruz for petitioner.
Manlapao, Ymballa and Chaves for private respondent.
BIDIN, J.:
This petition for certiorari and prohibition with preliminary injunction seeks to annul the Order dated June 29, 1992 issued by public respondent Labor Arbiter Reynaldo J. Gulmatico denying petitioner's motion for "Claims on R.A. 809" in RAB VI Case No. 06-07-10256-89, the dispositive portion of which reads, in part:
WHEREFORE, premises considered, the motion to dismiss dated July 31, 1989 and the supplement thereto dated September 19, 1989 filed by respondent company together with the motion to dismiss filed by respondent Ramon Jison dated August 27, 1990 and Francisco Jison dated September 20, 1990, respectively, are hereby DENIED.
xxx xxx xxx
(Rollo, p. 59)
The antecedent facts are as follows:
On July 4, 1989, respondent union, the National Federation of Sugar Workers-Food and General Trades (NFSW-FGT) filed RAB VI Case No. 06-07-10256-89 against herein petitioner Hawaiian-Philippine Company for claims under Republic Act 809 (The Sugar Act of 1952). Respondent union claimed that the sugar farm workers within petitioner's milling district have never availed of the benefits due them under the law.
Under Section 9 of R.A 809, otherwise known as the Sugar Act of 1952, it is provided, to wit:
Sec. 9. In addition to the benefits granted by the Minimum Wage Law, the proceeds of any increase in participation granted to planters under this Act and above their present share shall be divided between the planter and his laborers in the following proportions;
Sixty per centum of the increase participation for the laborers and forty per centum for the planters. The distribution of the share corresponding to the laborers shall be made under the supervision of the Department of Labor.
xxx xxx xxx
(Emphasis supplied.)
On July 31, 1989, petitioner filed a "Motion to Dismiss," followed by a "Supplemental Motion to Dismiss" on September 19, 1989. Petitioner contended that public respondent Labor Arbiter has no jurisdiction to entertain and resolve the case, and that respondent union has no cause of action against petitioner.
On August 23, 1989, respondent union filed an "Opposition to Motion to Dismiss."
On October 3,1989, petitioner applied a "Reply to Opposition" followed by a "Citation of Authorities in Support of Motion to Dismiss."
On December 20, 1989, respondent union filed an amended complaint additionally impleading as complainants Efren Elaco, Bienvenido Gulmatico, Alberto Amacio, Narciso Vasquez, Mario Casociano and all the other farm workers of the sugar planters milling with petitioner from 1979 up to the present, and as respondents, Jose Maria Regalado, Ramon Jison, Rolly Hernaez, Rodolfo Gamboa, Francisco Jison and all other sugar planters milling their canes with petitioner from 1979 up to the present.
On August 27, 1990, Ramon Jison, one of the respondents impleaded in the amended complaint, filed a "Motion to Dismiss and/or to Include Necessary Parties," praying for the inclusion as co-respondents of the Asociacion de Hacenderos de Silan-Saravia, Inc. and the Associate Planters of Silay-Saravia, Inc.
On June 29, 1992, public respondent promulgated the assailed Order denying petitioner's Motion to Dismiss and Supplemental Motion to Dismiss.
Hence, this petition filed by Hawaiian-Philippine Company.
Petitioner reasserts the two lesson earlier raised in its Motion to Dismiss which public respondent unfavorably resolved in the assailed Order.
These two issues are first, whether public respondent Labor Arbiter has jurisdiction to hear and decide the case against petitioner; and the second, whether respondent union and/or the farm workers represented by it have a cause of action against petitioner.
Petitioner contends that the complaint filed against it cannot be categorized under any of the cases falling within the jurisdiction of the Labor Arbiter as enumerated in Article 217 of the Labor Code, as amended, considering that no employer-employee relationship exists between petitioner milling company and the farm workers represented by respondent union. Article 217 of the Labor Code provides:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
6. Except claims for employees' compensation, social security, medicare from maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding Five Thousand Pesos (P5,000.00), whether or not accompanied with a claim for reinstatement. (Emphasis supplies)
In support of the contention that the Labor Arbiter has no jurisdiction to hear and decide the case against petitioner, the latter cites the ruling in San Miguel Corporation vs. NLRC, 161 SCRA 719 [1988], wherein it was held that a single unifying element runs through the cases and disputes falling under the jurisdiction of the Labor Arbiter and that is that all the enumerated cases and disputes arise out of or are in connection with an employer-employee relationship, or some aspect or incident of such relationship. Likewise, in Federation of Free Farmers vs. Court of Appeals, 107 SCRA 411 [1981], this Court held that:
. . . . From the beginning of the sugar industry, the centrals have never had any privity with the plantation laborers, since they had their own laborers to take care of. . . . Nowhere in Republic Act 809 (the Sugar Act of 1952) can we find anything that creates any relationship between the laborers of the planters and the centrals. . . .
. . . Under no principle of law or equity can we impose on the central . . . any liability to the plantation laborers. . . . (Emphasis supplied)
On the strength of the aforecited authorities, petitioner contends that it is not a proper party and has no involvement in the case filed by respondent union as it is not the employer of the respondent sugar workers.
Furthermore, to bolster its contention, petitioner cites the Rules and Regulations Implementing RA 809 issued by the then Wage Administration Service pursuant to the Administrative Order of the Labor Secretary dated October 1, 1952. Section 1 thereof states:
Sec. 1. The payment of the proceeds derived from the sixty per centum of any increase in the participation due the laborers shall be directly paid to the individual laborer concerned at the end of each milling season by his respective planter under the Supervision of the Secretary of Labor or his duly authorized representative by means of payrolls prepared by said planter. (Emphasis supplied)
In addition, under Letter of Instruction No. 854 dated May 1, 1979, it is provided:
1. Payment subject to supervision. The workers' share shall be paid directly by the planter concerned to the workers or claimants entitled thereto subject to the supervision of the Minister of Labor or his duly designated representative.
The responsibility for the payment of the sugar workers' benefits under R.A. 809 was categorically ruled upon in the Federation of Free Farmers case, supra., to wit:
. . . the matter of paying the plantation laborers of the respective planters becomes exclusively the concern of the planters, the laborers and the Department of Labor. Under no principle of law or equity can we impose on the Central — here VICTORIAS any liability to the respective plantation laborers, should any of their respective planters-employers fail to pay their legal share. After all, since under the law it is the Department of Labor which is the office directly called upon to supervise such payment, it is but reasonable to maintain that if any blame is to be fixed for the unfortunate situation of the unpaid laborers, the same should principally be laid on the planters and secondarily on the Department of Labor, but surely never on the central.
Whatever liability there exists between favor of the plantation laborers should be pinned on the PLANTERS, their respective employers. (Emphasis supplied)
On the other hand, public respondent and respondent union maintain the position that privity exists between petitioner and the sugar workers. Actually, public respondent, in resolving petitioner's Motion to Dismiss, skirted the issue of whether an employer-employee relationship indeed exists between petitioner milling company and the sugar workers. He did not categorically rule thereon but instead relied on the observation that when petitioner delivered to its planters the quedans representing its share, petitioner did not first ascertain whether the shares of all workers or claimants were fully paid/covered pursuant to LOI No. 854, and that petitioner did not have the necessary certification from the Department of Labor attesting to such fact of delivery. In view of these observations, public respondent subscribed to the possibility that petitioner may still have a liability vis-a-vis the workers' share. Consequently, in order that the workers would not have to litigate their claim separately, which would be tantamount to tolerating the splitting of a cause of action, public respondent held that petitioner should still be included in this case as an indispensable party without which a full determination of this case would not be obtained.
We find for petitioner.
The Solicitor General, in its adverse Comment, correctly agreed with petitioner's contention that while the jurisdiction over controversies involving agricultural workers has been transferred from the Court of Agrarian Relations to the Labor Arbiters under the Labor Code as amended, the said transferred jurisdiction is however, not without limitations. The dispute or controversy must still fall under one of the cases enumerated under Article 217 of the Labor Code, which cases, as ruled in San Miguel, supra., arise out of or are in connection with an employer-employee relationship.
In the case at bar, it is clear that there is no employer-employee relationship between petitioner milling company and respondent union and/or its members-workers, a fact which, the Solicitor General notes, public respondent did not dispute or was silent about. Absent the jurisdictional requisite of an employer-employee relationship between petitioner and private respondent, the inevitable conclusion is that public respondent is without jurisdiction to hear and decide the case with respect to petitioner.
Anent the issue of whether respondent union and/or its members-workers have a cause of action against petitioner, the same must be resolved in the negative. To have a cause of action, the claimant must show that he has a legal right and the respondent a correlative duty in respect thereof,
which the latter violated by some wrongful act or omission (Marquez vs. Varela, 92 Phil. 373 [1952]). In the instant case, a simple reading of Section 9 of R.A. 809 and Section 1 of LOI 845 as aforequoted, would show that the payment of the workers' share is a liability of the planters-employers, and not of the milling company/sugar central. We thus reiterate Our ruling on this matter, as enunciated in Federation of Free Farmers, supra., to wit:
. . . . Nowhere in Republic Act No. 809 can we find anything that creates any relationship between the laborers of the planters and the centrals. Under the terms of said Act, the old practice of the centrals issuing the quedans to the respective PLANTERS for their share of the proceeds of milled sugar per their milling contracts has not been altered or modified. In other words, the language of the Act does not in any manner make the central the insurer on behalf of the plantation laborers that the latter's respective employers-planters would pay them their share. . . .
. . . . Accordingly, the only obligation of the centrals (under Section 9 of the Act), like VICTORIAS, is to give to the respective planters, like PLANTERS herein, the planters' share in the proportion stipulated in the milling contract which would necessarily include the portion of 60% pertaining to the laborers. Once this has been done, the central is already out of the picture. . . . (Emphasis supplied)
In the case at bar, it is disputed that petitioner milling company has already distributed to its planters their respective shares. Consequently, petitioner has fulfilled its part and has nothing more to do with the subsequent distribution by the planters of the workers' share.
Public respondent's contention that petitioner is an indispensable party is not supported by the applicable provisions of the Rules of Court. Under Section 7, Rule 3 thereof, indispensable parties are "parties in interest" without whom no final determination of the action can be obtained. In this case, petitioner cannot be deemed as a party in interest since there is no privity or legal obligation linking it to respondent union and/or its members-workers.
In order to further justify petitioner's compulsory joinder as a party to this case, public respondent relies on petitioners' lack of certification from the Department of Labor of its delivery of the planters' shares as evidence of an alleged "conspicuous display of concerted conspiracy between the respondent sugar central (petitioner) and its adherent planters to deprive the workers or claimants of their shares in the increase in participation of the adherent planters." (Rollo, p. 56)
The assertion is based on factual conclusions which have yet to be proved. And even assuming for the sake of argument that public respondent's conclusions are true, respondent union's and/or its workers' recourse lies with the Secretary of Labor, upon whom authority is vested under RA 809 to supervise the payment of the workers' shares. Any act or omission involving the legal right of the workers to said shares may be acted upon by the Labor Secretary either motu proprio or at the instance of the workers. In this case however, no such action has been brought by the subject workers, thereby raising the presumption that no actionable violation has been committed.
Public respondent is concerned that the respondent planters may easily put up the defense that the workers' share is with petitioner milling company, giving rise to multiplicity of suits. The Solicitor General correctly postulates that the planters cannot legally set up the said defense since the payment of the workers' share is a direct obligation of the planters to their workers that cannot be shifted to the miller/central. Furthermore, the Solicitor General notes that there is nothing in RA 809 which suggests directly or indirectly that the obligation of the planter to pay the workers' share is
dependent upon his receipt from the miller of his own share. If indeed the planter did not receive his just and due share from the miller, he is not without legal remedies to enforce his rights. The proper recourse against a reneging miller or central is for the planter to implead the former not as an indispensable party but as a third party defendant under Section 12, Rule 6 of the Rules of Court. In such case, herein petitioner milling company would be a proper third party dependent because it is directly liable to the planters (the original defendants) for all or part of the workers' claim. However, the planters involved in this controversy have not filed any complaint of such a nature against petitioner, thereby lending credence to the conclusion that petitioner has fulfilled its part vis-a-vis its obligation under RA 809.
WHEREFORE, premises considered, the petition is GRANTED. Public respondent Reynaldo J. Gulmatico is hereby ORDERED to DISMISS RAB VI Case No. 06-07-10256-89 with respect to herein petitioner Hawaiian-Philippine Company and to PROCEED WITH DISPATCH in resolving the said case.
SO ORDERED.
[G.R. No. 159890. May 28, 2004]
EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING & PARTS CORP. and JOSE LAMADRID, President, respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
This is a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure assailing the Decision dated March 7, 2003 of the Court of Appeals in CA-G.R. SP No. 73102 which affirmed the Resolution dated April 2, 2002 of the National Labor Relations Commission.
Petitioner was employed by respondent company Lamadrid Bearing and Parts Corporation sometime in June 1985 as a salesman earning a commission of 3% of the total paid-up sales covering the whole area of Mindanao. His average monthly income was more or less P16,000.00, but later was increased to approximately P20,269.50. Aside from selling the merchandise of respondent corporation, he was also tasked to collect payments from his various customers. Respondent corporation had complete control over his work because its President, respondent Jose Lamadrid,
frequently directed him to report to a particular area for his sales and collection activities, and occasionally required him to go toManila to attend conferences regarding product competition, prices, and other market strategies.
Sometime in 1998, petitioner encountered five customers/clients with bad accounts, namely:
Customers/Clients Amount
1) A&B Engineering Services P 86,431.202) Emmanuel Engineering Services 126,858.503) Panabo Empire Marketing 226,458.764) Southern Fortune Marketing 191,208.005) Alreg Marketing 56, 901.18 Less Returns: 691.02 56, 210.16 Total Bad Accounts P 687,166.62
Petitioner was confronted by respondent Lamadrid over the bad accounts and warned that if he does not issue his own checks to cover the said bad accounts, his commissions will not be released and he will lose his job. Despite serious misgivings, he issued his personal checks in favor of respondent corporation on condition that the same shall not be deposited for clearing and that they shall be offset against his periodic commissions.[1]
Not contented with the issuance of the foregoing checks as security for the bad accounts, respondents “tricked” petitioner into signing two documents, which he later discovered to be a Promissory Note[2] and a Deed of Real Estate Mortgage.[3]
Pursuant to the parties’ agreement that the checks would not be deposited, as their corresponding values would be offset from petitioner’s sales commissions, respondents returned the same to petitioner as evidenced by the undeposited checks and respondent Lamadrid’s computations of petitioner’s commissions.[4]
Due to financial difficulties, petitioner inquired about his membership with the Social Security System in order to apply for a salary loan. To his dismay, he learned that he was not covered by the SSS and therefore was not entitled to any benefit. When he brought the matter of his SSS coverage to his employer, the latter berated and hurled invectives at him and, contrary to their agreement, deposited the remaining checks which were dishonored by the drawee bank due to “Account Closed.”
On March 22, 2001, counsel for respondent corporation sent a letter to petitioner demanding that he make good the dishonored checks or pay their cash equivalent. In response, petitioner sent a letter addressed to Atty. Meneses, counsel for respondent corporation, which reads:[5]
This has reference to your demand letter dated March 22, 2001 which I received on March 30, 2001, relative to the checks I issued to my employer LAMADRID BEARING PARTS CORPORATION.
May I respectfully request for a consideration as to the payment of the amount covered by the said checks, as follows:
1. I have an earned commission in the amount of P33,412.39 as shown in the hereto attached Summary of Sales as of February 28, 2001 (P22,748.60) and as of March 31, 2001 (P10,664.79), which I offer to be charged or deducted as partial payment thereof;
2. I hereby commit One Hundred Percent (100%) of all my commission to be directly charged or deducted as payment, from date onward, until such time that payment will be completed;
Sir, kindly convey my good faith to your client and my employer, as is shown by my willingness to continue working as Commission Salesman, having served the Company for the last sixteen (16) years.
I’m sincerely appealing to my employer, through you, Sir, to settle these accountabilities which all resulted from the checks issued by my customers which bounced and later charged to my account, in the manner afore-cited.
May this request merit your kindest consideration, Sirs.
Thank you very much.
On April 2, 2001, petitioner sent another letter to respondent Lamadrid, to wit:[6]
Dear Mr. Lamadrid,
This is to inform your good office that if you pursue the case against me, I may refer this problem to Mr. Paul Dominguez and Atty. Jesus Dureza to solicit proper legal advice. I may also file counter charges against your company of (sic) unfair labor practice and unfair compensation of 3% commission to my sales and commissions of more or less 90,000,000.00 (all collected and covered with cleared check payments) for 16 years working with your company up to the present year 2001.
If I am not wrong your company did not exactly declare the correct amount of P90,000,000.00 more or less representing my sales and collections (all collected and covered with cleared check payments to the Bureau of Internal Revenue [BIR] for tax declaration purposes). In short your company profited large amount of money to (sic) the above-mentioned sales and collections of P90,000,000.00 more or less for 16 years working with your company.
I remember that upon my employment with your company last 1985 up to the present year 2001 as commission basis salesman, I have not signed any contract with your company stating that all uncollected accounts including bounced checks from Lamadrid Bearing & Parts Corp. will be charged to me. I wonder why your company forcibly instructed me to secure checking account to pay and issue check payment of P15,000.00 per month to cover your company’s bad accounts in which this amount is too heavy on my part paying a total bad accounts of more than P650,000.00 for my 16 years employment with your company as commission basis salesman.
Recalling your visit here at my Davao City residence, located at Zone 1 2nd Avenue, San Vicente Buhangin Davao City, way back 1998, you even forced me to sign mortgage contract of my house and lot located at Zone 1 2nd Avenue, San Vicente, Buhangin, Davao City, according to Mr. Jose Lamadrid this mortgage contract of my house and lot will serve as guarantee to the uncollected and bounced checks from Lamadrid Bearing and Parts Corp., customers. I have asked 1 copy of the mortgage contract I have signed but Mr. Jose C. Lamadrid never furnished me a copy.
Very truly yours,(Sgd) Empermaco B. Abante, Jr.
While doing his usual rounds as commission salesman, petitioner was handed by his customers a letter from the respondent company warning them not to deal with petitioner since it no longer recognized him as a commission salesman.
In the interim, petitioner received a subpoena from the Office of the City Prosecutor of Manila for violations of Batas Pambansa Blg. 22 filed by respondent Lamadrid.
Petitioner thus filed a complaint for illegal dismissal with money claims against respondent company and its president, Jose Lamadrid, before the NLRC Regional Arbitration Branch No. XI, Davao City.
By way of defense, respondents countered that petitioner was not its employee but a freelance salesman on commission basis, procuring and purchasing auto parts and supplies from the latter on credit, consignment and installment basis and selling the same to his customers for profit and commission of 3% out of his total paid-up sales. Respondents cite the following as indicators of the absence of an employer-employee relationship between them:
(1) petitioner constantly admitted in all his acts, letters, communications with the respondents that his relationship with the latter was strictly commission basis salesman;
(2) he does not have a monthly salary nor has he received any benefits accruing to regular employment;
(3) he was not required to report for work on a daily basis but would occasionally drop by the Manila office when he went to Manila for some other purpose;
(4) he was not given the usual pay-slip to show his monthly gross compensation;
(5) neither has the respondent withheld his taxes nor was he enrolled as an employee of the respondent under the Social Security System and Philhealth;
(6) he was in fact working as commission salesman of five other companies, which are engaged in the same line of business as that of respondent, as shown by certifications issued by the said companies;[7]
(7) if respondent owed petitioner his alleged commissions, he should not have executed the Promissory Note and the Deed of Real Estate Mortgage.[8]
Finding no necessity for further hearing the case after the parties submitted their respective position papers, the Labor Arbiter rendered a decision dated November 29, 2001, the decretal portion of which reads:[9]
WHEREFORE, premises considered judgment is hereby rendered DECLARING respondents LAMADRID BEARING & PARTS CORPORATION AND JOSE LAMADRID to pay jointly and severally complainant EMPERMACO B. ABANTE, JR., the sum of PESOS ONE MILLION THREE HUNDRED THIRTY SIX THOUSAND SEVEN HUNDRED TWENTY NINE AND 62/100 ONLY (P1,336,729.62) representing his awarded separation pay, back wages (partial) unpaid commissions, refund of deductions, damages and attorney’s fees.
SO ORDERED.
On appeal, the National Labor Relations Commission reversed the decision of the Labor Arbiter in a Resolution dated April 5, 2002, the dispositive portion of which reads:[10]
WHEREFORE, the Appeal is GRANTED. Accordingly, the appealed decision is Set Aside and Vacated. In lieu thereof, a new judgment is entered dismissing the instant case for lack of cause of action.
SO ORDERED.
Petitioner challenged the decision of the NLRC before the Court of Appeals, which rendered the assailed judgment on March 7, 2003, the dispositive portion of which reads:[11]
WHEREFORE, premises considered, petition is hereby DENIED. Let the supersedeas bond dated 09 January 2002, issued the Philippine Charter Insurance Corporation be cancelled and released.
SO ORDERED.
Upon denial of his motion for reconsideration, petitioner filed the instant appeal based on the following grounds:
I
THE HONORABLE COURT OF APPEALS IN GRAVE ABUSE OF DISCRETION “MODIFIED” THE IMPORT OF THE “RELEVANT ANTECEDENTS” AS ITS PREMISE IN ITS QUESTIONED DECISION CAUSING IT TO ARRIVE AT ERRONEOUS CONCLUSIONS OF FACT AND LAW.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN APPRECIATING THE TRUE FACTS OF THIS CASE THEREBY IT MADE A WRONG CONCLUSION BY STATING THAT THE FOURTH ELEMENT FOR DETERMINING EMPLOYER-EMPLOYEE RELATIONSHIP, WHICH IS THE “CONTROL TEST,” IS WANTING IN THIS CASE.
III
THE HONORABLE COURT OF APPEALS IS AT WAR WITH THE EVIDENCE PRESENTED IN THIS CASE AS WELL AS WITH THE APPLICABLE LAW AND ESTABLISHED RULINGS OF THIS HONORABLE COURT.
Initially, petitioner challenged the statement by the appellate court that “petitioner, who was contracted a 3% of the total gross sales as his commission, was tasked to sell private respondent’s merchandise in the Mindanao area and to collect payments of his sales from the customers.” He argues that this statement, which suggests contracting or subcontracting under Department Order No. 10-97 Amending the Rules Implementing Books III and VI of the Labor Code, is erroneous because the circumstances to warrant such conclusion do not exist. Not being an independent contractor, he must be a regular employee pursuant to Article 280 of the Labor Code because an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.
Petitioner likewise disputes the finding of the appellate court that no employer-employee relationship exists between him and respondent corporation since the power of control, which is the most decisive element to determine such relationship, is wanting. He argues that the following circumstances show that he was in truth an employee of the respondent corporation:
(1) As salesman of the private respondents, petitioner was also the one collecting payment of his sales from various customers. Thus, he was bringing with him Provisional Receipts, samples of which are attached to his Position Paper filed with the Labor Arbiter.
(2) Private respondents had complete control over the work of the petitioner. From time to time, respondent JOSE LAMADRID was directing him to report to a particular area in Mindanao for his sales and collection activities, and sometimes he was required to go to Manila for a conference regarding competitions, new prices (if any), special offer (if competitors gave special offer or discounts), and other selling/marketing strategy. In other words, respondent JOSE LAMADRID was closely monitoring the sales and collection activities of the petitioner.
Petitioner further contends that it was illogical for the appellate court to conclude that since he was not required to report for work on a daily basis, the power of control is absent. He reasons that being a field personnel, as defined under Article 82 of the Labor Code, who is covering the Mindanao area, it would be impractical for him to report to the respondents’ office in Manila in order to keep tab of his actual working hours.
Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the Labor Arbiter and the National Labor Relations Commission shall be accorded not only respect but even finality when supported by substantial evidence. The decisive factor in such finality is the presence of substantial evidence to support said finding, otherwise, such factual findings cannot be accorded finality by this Court. [12] Considering the conflicting findings of fact by the Labor Arbiter and the NLRC as well as the Court of Appeals, there is a need to reexamine the records to determine with certainty which of the propositions espoused by the contending parties is supported by substantial evidence.
We are called upon to resolve the issue of whether or not petitioner, as a commission salesman, is an employee of respondent corporation. To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, the last one is the most important.[13] The so-called “control test” is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.
Applying the aforementioned test, an employer-employee relationship is notably absent in this case. It is undisputed that petitioner Abante was a commission salesman who received 3% commission of his gross sales. Yet no quota was imposed on him by the respondent; such that a dismal performance or even a dead result will not result in any sanction or provide a ground for dismissal. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. Although he had the whole of Mindanao as his base of operation, he was not designated by respondent to conduct his sales activities at any particular or specific place. He pursued his selling activities without interference or supervision from
respondent company and relied on his own resources to perform his functions. Respondent company did not prescribe the manner of selling the merchandise; he was left alone to adopt any style or strategy to entice his customers. While it is true that he occasionally reported to the Manila office to attend conferences on marketing strategies, it was intended not to control the manner and means to be used in reaching the desired end, but to serve as a guide and to upgrade his skills for a more efficient marketing performance. As correctly observed by the appellate court, reports on sales, collection, competitors, market strategies, price listings and new offers relayed by petitioner during his conferences to Manila do not indicate that he was under the control of respondent.[14] Moreover, petitioner was free to offer his services to other companies engaged in similar or related marketing activities as evidenced by the certifications issued by various customers.[15]
In Encyclopedia Britannica (Philippines), Inc. v. NLRC,[16] we reiterated the rule that there could be no employer-employee relationship where the element of control is absent. Where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the result of his efforts and not the amount thereof, no relationship of employer-employee exists.
We do not agree with petitioner’s contention that Article 280 [17] is a crucial factor in determining the existence of an employment relationship. It merely distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining their rights to certain benefits, such as to join or form a union, or to security of tenure. Article 280 does not apply where the existence of an employment relationship is in dispute.[18]
Neither can we subscribe to petitioner’s misplaced reliance on the case of Songco v. NLRC.[19] While in that case the term “commission” under Article 96 of the Labor Code was construed as being included in the definition of the term “wage” available to employees, there is no categorical pronouncement that the payment of compensation on commission basis is conclusive proof of the existence of an employer-employee relationship. After all, commission, as a form of remuneration, may be availed of by both an employee or a non-employee.
Petitioner decried the alleged intimidation and trickery employed by respondents to obtain from him a Promissory Note and to issue forty-seven checks as security for the bad accounts incurred by five customers.
While petitioner may have been coerced into executing force to issue the said documents, it may equally be true that petitioner did so in recognition of a valid financial obligation. He who claims that force or intimidation was employed upon him lies the onus probandi. He who asserts must prove. It is therefore incumbent upon petitioner to overcome the disputable presumption that private transactions have been prosecuted fairly and regularly, and that there is sufficient consideration for every contract.[20] A fortiori, it is difficult to imagine that petitioner, a salesman of long standing, would accede without raising a protest to the patently capricious and oppressive demand by respondent of requiring him to assume bad accounts which, as he contended, he had not incurred. This lends credence to the respondent’s assertion that
petitioner procured the goods from the said company on credit, consignment or installment basis and then sold the same to various customers. In the scheme of things, petitioner, having directly contracted with the respondent company, becomes responsible for the amount of merchandise he took from the respondent, and in turn, the customer/s would be liable for their respective accounts to the seller, i.e., the petitioner, with whom they contracted the sale.
All told, we sustain the factual and legal findings of the appellate court and accordingly, find no cogent reason to overturn the same.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals dated March 7, 2003 in CA-G.R. SP No. 73102, which denied the petition of Empermaco B. Abante, is AFFIRMED in toto.
SO ORDERED
ON LABOR DISPUTES
FIRST DIVISION
G.R. No. L-65377 May 28, 1984
MOLAVE MOTOR SALES, INC., petitioner, vs.HON. CRISPIN C. LARON, Presiding Judge of the Regional Trial Court of Pangasinan, Branch XLIV and PEDRO GEMENIANO, respondents.
Nuelino B. Ranchez for petitioner.
Santos Areola for private respondent.
MELENCIO-HERRERA, J.:
Respondent Judge, presiding Branch XLIV of the Regional Trial Court in Dagupan City, had dismissed the case below for lack of jurisdiction and had denied reconsideration for lack of merit.
Petitioner, PLAINTIFF in the case below, is a corporation engaged in the sale and repair of motor vehicles in Dagupan City. Private respondent, the DEFENDANT in the case below, was, or is, the sales manager of PLAINTIFF. Whether or not there was still a relationship of employer and employee between the parties when the complaint was filed is an unsettled question which need not be resolved in this instance.
Alleging that DEFENDANT was a former employee, PLAINTIFF had sued him, on March 22, 1983, for payment of accounts pleaded as follows:
That during his incumbency as such the defendant caused and without authority from the plaintiff incurred accounts with the remaining balances in the total sum of P33,890.38 excluding interests, arising from
the purchases of vehicles and parts,
repair jobs of his personal cars and
cash advances,
faithful reproductions of the Vehicle Invoice, Debit Memos, Deed of Absolute Sale, Repair Orders, Charge Invoices, Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account, hereto attached and marked as Annexes "A", "B", "C", "D", "E", "F", "G", "H", "I", "J", "K", "L", "M", and "N" respectively and the contents of which being herein additionally pleaded and made integral parts hereof; (Emphasis supplied)
In his Answer, DEFENDANT denied
... that he incurred any unpaid unauthorized accounts with the plaintiff in the total sum of P33,890.38 excluding interests therefor, and,
specifically denies under oath that the annexed Vehicle Invoice, Debits Memos Deed of Absolute Sale, Repair Orders, Charge Invoices, Vouchers, Promissory Notes, Acknowledgement Letter and Statement of Account
have remained unpaid as in fact the truth of the matter is as follows, to wit: (Emphasis supplied)
DEFENDANT further alleged in a counterclaim that he should still be considered an employee of PLAINTIFF inasmuch as there has been no application for clearance in regards to his separation.
At the pre-trial conference, the DEFENDANT raised the question of jurisdiction of the Court stating that PLAINTIFF's complaint arose out of employer-employee relationship, and he subsequently moved for dismissal. It was then when respondent Judge dismissed the case finding that the sum of money and damages sued upon arose from employer-employee relationship and that jurisdiction belonged to the Labor Arbiter and the NLRC.
Before the enactment of BP Blg. 227 on June 1, 1982, Labor Arbiters, under paragraph 5 of Article 217 of the Labor Code had jurisdiction over "all other cases arising from employer-employee relation, unless expressly excluded by this Code." Even then, the principle followed by this Court was that, although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved. In Medina vs. Castro-Bartolome, 116 SCRA 597, 604, in negating jurisdiction of the Labor Arbiter, although the parties were an employer and two employees, Mr. Justice Abad Santos stated:
The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary.
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise.
And in Singapore Airlines Limited vs. Paño, 122 SCRA 671, 677, the following was said:
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or separation pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil dispute.
In the case below, PLAINTIFF had sued for monies loaned to DEFENDANT, the cost of repair jobs made on his personal cars, and for the purchase price of vehicles and parts sold to him. Those accounts have no relevance to the Labor Code. The cause of action was one under the civil laws, and it does not breach any provision of the Labor Code or the contract of employment of DEFENDANT. Hence, the civil courts, not the Labor Arbiters and the NLRC, should have jurisdiction.
BP Blg. 227 has amended Article 217 of the Labor Code to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that ( involve) WORKERS MAY FILE INVOLVING wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees compensation, social security, and maternity benefits;
4. Cases involving household services; and
5. CASES ARISING FROM ANY VIOLATION OF ARTICLE 265 OF THIS CODE, INCLUDING QUESTIONS INVOLVING THE LEGALITY OF STRIKES AND LOCKOUTS.
6. All other claims arising from employer-employee relations, unless expressly excluded by this Code]. (Italics and bracketed portions indicate the deletions, while the amendments introduced are capitalized).
The dismissal of the case below on the ground that the sum of money and damages sued upon arose from employer-employee relationship was erroneous. Claims arising from employer-employee relations are now limited to those mentioned in paragraphs 2 and 3 of Article 217. There is no difficulty on our part in stating that those in the case below should not be faulted for not being aware of the last amendment to the frequently changing Labor Code.
The claim of DEFENDANT that he should still be considered an employee of PLAINTIFF, because the latter has not sought clearance for his separation from the service, will not affect the jurisdiction of respondent Judge to resolve the complaint of PLAINTIFF. DEFENDANT could still be liable to PLAINTIFF for payment of the accounts sued for even if he remains an employee of PLAINTIFF.
WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to take cognizance of the case below and to render judgment therein accordingly.
No costs.
SO ORDERED
THIRD DIVISION
G.R. No. 80774 May 31, 1988
SAN MIGUEL CORPORATION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA, respondents.
Siguion Reyna, Montecillo & Ongsiako Law Offices for petitioner.
The Solicitor General for public respondent.
FELICIANO, J.:
In line with an Innovation Program sponsored by petitioner San Miguel Corporation ("Corporation;" "SMC") and under which management undertook to grant cash awards to "all SMC employees ... except [ED-HO staff, Division Managers and higher-ranked personnel" who submit to the Corporation Ideas and suggestions found to be beneficial to the Corporation, private respondent Rustico Vega submitted on 23 September 1980 an innovation proposal. Mr. Vega's proposal was entitled "Modified Grande Pasteurization Process," and was supposed to eliminate certain alleged defects in the quality and taste of the product "San Miguel Beer Grande:"
Title of Proposal
Modified Grande Pasteurization Process
Present Condition or Procedure
At the early stage of beer grande production, several cases of beer grande full goods were received by MB as returned beer fulls (RBF). The RBF's were found to have sediments and their contents were hazy. These effects are usually caused by underpasteurization time and the pasteurzation units for beer grande were almost similar to those of the steinie.
Proposed lnnovation (Attach necessary information)
In order to minimize if not elienate underpasteurization of beer grande, reduce the speed of the beer grande pasteurizer thereby, increasing the pasteurization time and the pasteurization acts for grande beer. In this way, the self-life (sic) of beer grande will also be increased. 1
Mr. Vega at that time had been in the employ of petitioner Corporation for thirteen (1 3) years and was then holding the position of "mechanic in the Bottling Department of the SMC Plant Brewery situated in Tipolo, Mandaue City.
Petitioner Corporation, however, did not find the aforequoted proposal acceptable and consequently refused Mr. Vega's subsequent demands for a cash award under the Innovation Program. On 22 February 1983., a Complaint 2 (docketed as Case No. RAB-VII-0170-83) was filed against petitioner Corporation with Regional Arbitration Branch No. VII (Cebu City) of the then.", Ministry of Labor and Employment. Frivate respondent Vega alleged there that his proposal "[had] been accepted by the methods analyst and implemented by the Corporation [in] October 1980," and that the same "ultimately and finally solved the problem of the Corporation in the production of Beer Grande." Private respondent thus claimed entitlement to a cash prize of P60,000.00 (the maximum award per proposal offered under the Innovation Program) and attorney's fees.
In an Answer With Counterclaim and Position Paper, 3 petitioner Corporation alleged that private respondent had no cause of action. It denied ever having approved or adopted Mr. Vega's proposal as part of the Corporation's brewing procedure in the production of San Miguel Beer Grande. Among other things, petitioner stated that Mr. Vega's proposal was tumed down by the company "for lack of originality" and that the same, "even if implemented [could not] achieve the desired result." Petitioner further alleged that the Labor Arbiter had no jurisdiction, Mr. Vega having improperly bypassed the grievance machinery procedure prescribed under a then existing collective bargaining agreement between management and employees, and available administrative remedies provided under the
rules of the Innovation Program. A counterclaim for moral and exemplary damages, attorney's fees, and litigation expenses closed out petitioner's pleading.
In an Order 4 dated 30 April 1986, the Labor Arbiter, noting that the money claim of complainant Vega in this case is "not a necessary incident of his employment" and that said claim is not among those mentioned in Article 217 of the Labor Code, dismissed the complaint for lack of jurisdiction. However, in a gesture of "compassion and to show the government's concern for the workingman," the Labor Arbiter also directed petitioner to pay Mr. Vega the sum of P2,000.00 as "financial assistance."
The Labor Arbiter's order was subsequently appealed by both parties, private respondent Vega assailing the dismissal of his complaint for lack of jurisdiction and petitioner Corporation questioning the propriety of the award of "financial assistance" to Mr. Vega. Acting on the appeals, the public respondent National Labor Relations Commission, on 4 September 1987, rendered a Decision, 5 the dispositive portion of which reads:
WHEREFORE, the appealed Order is hereby set aside and another udgment entered, order the respondent to pay the complainant the amount of P60,000.00 as explained above.
SO ORDERED.
In the present Petition for certiorari filed on 4 December 1987, petitioner Corporation, invoking Article 217 of the Labor Code, seeks to annul the Decision of public respondent Commission in Case No. RAB-VII-01 70-83 upon the ground that the Labor Arbiter and the Commission have no jurisdiction over the subject matter of the case.
The jurisdiction of Labor Arbiters and the National Labor Relations Commission is outlined in Article 217 of the Labor Code, as last amended by Batas Pambansa Blg. 227 which took effect on 1 June 1982:
ART. 217. Jurisdiction of Labor Arbiters and the commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving are workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this; Code, including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (Emphasis supplied)
While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose that the entire universe of money claims that might be asserted by workers against their employers has been absorbed into the original and exclusive jurisdiction of Labor Arbiters. In the first place, paragraph 3 should be read not in isolation from but rather within the context formed by paragraph 1 related to unfair labor practices), paragraph 2 (relating to claims concerning terms and conditions of employment), paragraph 4 (claims relating to household services, a particular species of employer-employee relations), and paragraph 5 (relating to certain activities prohibited to employees or to employers).<äre||anº•1àw> It is evident that there is a unifying element which runs through paragraphs 1 to 5 and that is, that they all refer to cases or disputes arising out of or in connection with an employer-employee relationship. This is, in other words, a situation where the rule of noscitur a sociis may be usefully invoked in clarifying the scope of paragraph 3, and any other paragraph of Article 217 of the Labor Code, as amended. We reach the above conclusion from an examination of the terms themselves of Article 217, as last amended by B.P. Blg. 227, and even though earlier versions of Article 217 of the Labor Code expressly brought within the jurisdiction of the Labor Arbiters and the NLRC "cases arising from employer employee relations," 6 which clause was not expressly carried over, in printer's ink, in Article 217 as it exists today. For it cannot be presumed that money claims of workers which do not arise out of or in connection with their employer-employee relationship, and which would therefore fall within the general jurisdiction of the regular courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds that the money claims of workers" referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer-employee relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal connection with the employer-employee relationship.
Applying the foregoing reading to the present case, we note that petitioner's Innovation Program is an employee incentive scheme offered and open only to employees of petitioner Corporation, more specifically to employees below the rank of manager. Without the existing employer-employee relationship between the parties here, there would have been no occasion to consider the petitioner's Innovation Program or the submission by Mr. Vega of his proposal concerning beer grande; without that relationship, private respondent Vega's suit against petitioner Corporation would never have arisen. The money claim of private respondent Vega in this case, therefore, arose out of or in connection with his employment relationship with petitioner.
The next issue that must logically be confronted is whether the fact that the money claim of private respondent Vega arose out of or in connection with his employment relation" with petitioner Corporation, is enough to bring such money claim within the original and exclusive jurisdiction of Labor Arbiters.
In Molave Motor Sales, Inc. v. Laron, 7 the petitioner was a corporation engaged in the sale and repair of motor vehicles, while private respondent was the sales Manager of petitioner. Petitioner had sued private respondent for non-payment of accounts which had arisen from private respondent's own purchases of vehicles and parts, repair jobs on cars personally owned by him, and cash advances from the corporation. At the pre-trial in the lower court, private respondent raised the
question of lack of jurisdiction of the court, stating that because petitioner's complaint arose out of the employer-employee relationship, it fell outside the jurisdiction of the court and consequently should be dismissed. Respondent Judge did dismiss the case, holding that the sum of money and damages sued for by the employer arose from the employer-employee relationship and, hence, fell within the jurisdiction of the Labor Arbiter and the NLRC. In reversing the order of dismissal and requiring respondent Judge to take cognizance of the case below, this Court, speaking through Mme. Justice Melencio-Herrera, said:
Before the enactment of BP Blg. 227 on June 1, 1982, Labor Arbiters, under paragraph 5 of Article 217 of the Labor Code had jurisdiction over" all other cases arising from employer-employee relation, unless, expressly excluded by this Code." Even then, the principle followed by this Court was that, although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved. In Medina vs. Castro-Bartolome, 11 SCRA 597, 604, in negating jurisdiction of the Labor Arbiter, although the parties were an employer and two employees, Mr. Justice Abad Santos stated:
The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by the plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary.
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise.
And in Singapore Airlines Limited v. Paño, 122 SCRA 671, 677, the following was said:
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or separation pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil dispute.
In the case below, PLAINTIFF had sued for monies loaned to DEFENDANT, the cost of repair jobs made on his personal cars, and for the purchase price of vehicles and parts sold to him. Those accounts have no relevance to the Labor Code. The cause of action was one under the civil laws, and it does not breach any provision of the Labor Code or the contract of employment of DEFENDANT. Hence the civil courts, not the Labor Arbiters and the NLRC should have jurisdiction. 8
It seems worth noting that Medina v. Castro-Bartolome, referred to in the above excerpt, involved a claim for damages by two (2) employees against the employer company and the General Manager thereof, arising from the use of slanderous language on the occasion when the General Manager fired the two (2) employees (the Plant General Manager and the Plant Comptroller). The Court treated the claim for damages as "a simple action for damages for tortious acts" allegedly committed by private respondents, clearly if impliedly suggesting that the claim for damages did not necessarily arise out of or in connection with the employer-employee relationship. Singapore Airlines Limited v. Paño, also cited in Molave, involved a claim for liquidated damages not by a worker but by the employer company, unlike Medina. The important principle that runs through these three (3) cases is that where the claim to the principal relief sought 9 is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.
Applying the foregoing to the instant case, the Court notes that the SMC Innovation Program was essentially an invitation from petitioner Corporation to its employees to submit innovation proposals, and that petitioner Corporation undertook to grant cash awards to employees who accept such invitation and whose innovation suggestions, in the judgment of the Corporation's officials, satisfied the standards and requirements of the Innovation Program 10 and which, therefore, could be translated into some substantial benefit to the Corporation. Such undertaking, though unilateral in origin, could nonetheless ripen into an enforceable contractual (facio ut des) 11 obligation on the part of petitioner Corporation under certain circumstances. Thus, whether or not an enforceable contract, albeit implied arid innominate, had arisen between petitioner Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it had been breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to do with wages or other terms and conditions of employment, but rather having recourse to our law on contracts.
WEREFORE, the Petition for certiorari is GRANTED. The decision dated 4 September 1987 of public respondent National Labor Relations Commission is SET ASIDE and the complaint in Case No. RAB-VII-0170-83 is hereby DISMISSED, without prejudice to the right of private respondent Vega to file a suit before the proper court, if he so desires. No pronouncement as to costs.
SO ORDERED.
G.R. No. 109272 August 10, 1994
GEORG GROTJAHN GMBH & CO., petitioner, vs.HON. LUCIA VIOLAGO ISNANI, Presiding Judge, Regional Trial Court, Makati, Br. 59; ROMANA R. LANCHINEBRE; and TEOFILO A. LANCHINEBRE, respondents.
A.M. Sison, Jr. & Associates for petitioner.
Pedro L. Laso for private respondents.
PUNO, J.:
Petitioner impugns the dismissal of its Complaint for a sum of money by the respondent judge for lack of jurisdiction and lack of capacity to sue.
The records show that petitioner is a multinational company organized and existing under the laws of the Federal Republic of Germany. On July 6, 1983, petitioner filed an application, dated July 2, 1983, 1 with the Securities and Exchange Commission (SEC) for the establishment of a regional or area headquarters in the Philippines, pursuant to Presidential Decree No. 218. The application was approved by the Board of Investments (BOI) on September 6, 1983. Consequently, on September 20, 1983, the SEC issued a Certificate of Registration and License to petitioner. 2
Private respondent Romana R. Lanchinebre was a sales representative of petitioner from 1983 to mid-1992. On March 12, 1992, she secured a loan of twenty-five thousand pesos (P25,000.00) from petitioner. On March 26 and June 10, 1992, she made additional cash advances in the sum of ten thousand pesos (P10,000.00). Of the total amount, twelve thousand one hundred seventy pesos and thirty-seven centavos (P12,170.37) remained unpaid. Despite demand, private respondent Romana failed to settle her obligation with petitioner.
On July 22, 1992, private respondent Romana Lanchinebre filed with the Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila, a Complaint for illegal suspension, dismissal and non-payment of commissions against petitioner. On August 18, 1992, petitioner in turn filed against private respondent a Complaint for damages amounting to one hundred twenty thousand pesos (P120,000.00) also with the NLRC Arbitration Branch (Manila). 3 The two cases were consolidated.
On September 2, 1992, petitioner filed another Complaint for collection of sum of money against private respondents spouses Romana and Teofilo Lanchinebre which was docketed as Civil Case No. 92-2486 and raffled to the sala of respondent judge. Instead of filing their Answer, private respondents moved to dismiss the Complaint. This was opposed by petitioner.
On December 21, 1992, respondent judge issued the first impugned Order, granting the motion to dismiss. She held, viz:
Jurisdiction over the subject matter or nature of the action is conferred by law and not subject to the whims and caprices of the parties.
Under Article 217 of the Labor Code of the Philippines, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days
after the submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:
(4) claims for actual, moral, exemplary and other forms of damages arising from an employer-employee relations.
xxx xxx xxx
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether or not accompanied with a claim for reinstatement.
In its complaint, the plaintiff (petitioner herein) seeks to recover alleged cash advances made by defendant (private respondent herein) Romana Lanchinebre while the latter was in the employ of the former. Obviously the said cash advances were made pursuant to the employer-employee relationship between the (petitioner) and the said (private respondent) and as such, within the original and exclusive jurisdiction of the National Labor Relations Commission.
Again, it is not disputed that the Certificate of Registration and License issued to the (petitioner) by the Securities and Exchange Commission was merely "for the establishment of a regional or area headquarters in the Philippines, pursuant to Presidential Decree No. 218 and its implementing rules and regulations." It does not include a license to do business in the Philippines. There is no allegation in the complaint moreover that (petitioner) is suing under an isolated transaction. It must be considered that under Section 4, Rule 8 of the Revised Rules of Court, facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity or the legal existence of an organized association of persons that is made a party must be averred. There is no averment in the complaint regarding (petitioner's) capacity to sue or be sued.
Finally, (petitioner's) claim being clearly incidental to the occupation or exercise of (respondent) Romana Lanchinebre's profession, (respondent) husband should not be joined as party defendant. 4
On March 8, 1993, the respondent judge issued a minute Order denying petitioner's Motion for Reconsideration.
Petitioner now raises the following assignments of errors:
I
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE REGULAR COURTS HAVE NO JURISDICTION OVER DISPUTES BETWEEN AN EMPLOYER AND AN EMPLOYEE INVOLVING THE APPLICATION PURELY OF THE GENERAL CIVIL LAW.
II
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT PETITIONER HAS NO CAPACITY TO SUE AND BE SUED IN THE PHILIPPINES DESPITE THE FACT THAT PETITIONER IS DULY LICENSED BY THE SECURITIES AND EXCHANGE COMMISSION TO SET UP AND OPERATE A REGIONAL OR AREA HEADQUARTERS IN THE COUNTRY AND THAT IT HAS CONTINUOUSLY OPERATED AS SUCH FOR THE LAST NINE (9) YEARS.
III
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE ERRONEOUS INCLUSION OF THE HUSBAND IN A COMPLAINT IS A FATAL DEFECT THAT SHALL RESULT IN THE OUTRIGHT DISMISSAL OF THE COMPLAINT.
IV
THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE HUSBAND IS NOT REQUIRED BY THE RULES TO BE JOINED AS A DEFENDANT IN A COMPLAINT AGAINST THE WIFE.
There is merit to the petition.
Firstly, the trial court should not have held itself without jurisdiction over Civil Case No. 92-2486. It is true that the loan and cash advances sought to be recovered by petitioner were contracted by private respondent Romana Lanchinebre while she was still in the employ of petitioner. Nonetheless, it does not follow that Article 217 of the Labor Code covers their relationship.
Not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement. In this regard, we held in the earlier case of Molave Motor Sales, Inc. vs. Laron, 129 SCRA 485 (1984), viz:
Before the enactment of BP Blg. 227 on June 1, 1982, Labor Arbiters, under paragraph 5 of Article 217 of the Labor Code had jurisdiction over "all other cases arising from employer-employee relation, unless expressly excluded by this Code." Even then, the principal followed by this Court was that, although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved. In Medina vs. Castro-Bartolome, 116 SCRA 597, 604 in negating jurisdiction of the Labor Arbiter, although the parties were an employer and two employees, Mr. Justice Abad Santos stated:
The pivotal question to Our mind is whether or not the Labor Code has any relevance to the reliefs sought by plaintiffs. For if the Labor Code has no relevance, any discussion concerning the statutes amending it and whether or not they have retroactive effect is unnecessary.
xxx xxx xxx
And in Singapore Airlines Limited vs. Paño, 122 SCRA 671, 677, the following was said:
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or separation pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil dispute.
xxx xxx xxx
In San Miguel Corporation vs. NLRC, 161 SCRA 719 (1988), we crystallized the doctrines set forth in the Medina, Singapore Airlines, and Molave Motors cases, thus:
. . . The important principle that runs through these three (3) cases is that where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations, resolutions of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.
Civil Case No. 92-2486 is a simple collection of a sum of money brought by petitioner, as creditor, against private respondent Romana Lanchinebre, as debtor. The fact that they were employer and employee at the time of the transaction does not negate the civil jurisdiction of the trial court. The case does not involve adjudication of a labor dispute but recovery of a sum of money based on our civil laws on obligation and contract.
Secondly, the trial court erred in holding that petitioner does not have capacity to sue in the Philippines. It is clear that petitioner is a foreign corporation doing business in the Philippines. Petitioner is covered by the Omnibus Investment Code of 1987. Said law defines "doing business," as follows:
. . . shall include soliciting orders, purchases, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the Philippines for a period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization. 5
There is no general rule or governing principle as to what constitutes "doing" or "engaging in" or "transacting" business in the Philippines. Each case must be judged in the light of its peculiar circumstances. 6 In the case at bench, petitioner does not engage in commercial dealings or
activities in the country because it is precluded from doing so by P.D. No. 218, under which it was established. 7 Nonetheless, it has been continuously, since 1983, acting as a supervision, communications and coordination center for its home office's affiliates in Singapore, and in the process has named its local agent and has employed Philippine nationals like private respondent Romana Lanchinebre. From this uninterrupted performance by petitioner of acts pursuant to its primary purposes and functions as a regional/area headquarters for its home office, it is clear that petitioner is doing business in the country. Moreover, private respondents are estopped from assailing the personality of petitioner. So we held inMerrill Lynch Futures, Inc. vs. Court of Appeals, 211 SCRA 824, 837 (1992):
The rule is that a party is estopped to challenge the personality of a corporation after having acknowledged the same by entering into a contract with it. And the "doctrine of estoppel to deny corporate existence applies to foreign as well as to domestic corporations;" "one who has dealth with a corporation of foreign origin as a corporate entity is estopped to deny its corporate existence and capacity." The principle "will be applied to prevent a person contracting with a foreign corporation from later taking advantage of its noncompliance with the statutes chiefly in cases where such person has received the benefits of the contract, . . . (Citations omitted.)
Finally, the trial court erred when it dismissed Civil Case No. 92-2486 on what it found to be the misjoinder of private respondent Teofilo Lanchinebre as party defendant. It is a basic rule that "(m)isjoinder or parties is not ground for dismissal of an action." 8 Moreover, the Order of the trial court is based on Section 4(h), Rule 3 of the Revised Rules of Court, which provides:
A married woman may not . . . be sued alone without joining her husband, except . . . if the litigation is incidental to the profession, occupation or business in which she is engaged,
Whether or not the subject loan was incurred by private respondent as an incident to her profession, occupation or business is a question of fact. In the absence of relevant evidence, the issue cannot be resolved in a motion to dismiss.
IN VIEW WHEREOF, the instant Petition is GRANTED. The Orders, dated December 21, 1992 and March 8, 1993, in Civil Case No. 92-2486 are REVERSED AND SET ASIDE. The RTC of Makati, Br. 59, is hereby ordered to hear the reinstated case on its merits. No costs.
SO ORDERED
FIRST DIVISION
G.R. No. 89621 September 24, 1991
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA, petitioners, vs.HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO, respondents.
Aurelio D. Menzon for petitioners.
Mario P. Nicolasora co-counsel for petitioners.
Papiano L. Santo for private respondents.
CRUZ, J.:p
The question now before us has been categorically resolved in earlier decisions of the Court that a little more diligent research would have disclosed to the petitioners. On the basis of those cases and the facts now before us, the petition must be denied.
The private respondents were employees of the petitioner who were suspected of complicity in the irregular disposition of empty Pepsi Cola bottles. On July 16, 1987, the petitioners filed a criminal complaint for theft against them but this was later withdrawn and substituted with a criminal complaint for falsification of private documents. On November 26, 1987, after a preliminary investigation conducted by the Municipal Trial Court of Tanauan, Leyte, the complaint was dismissed. The dismissal was affirmed on April 8, 1988, by the Office of the Provincial Prosecutor.
Meantime, allegedly after an administrative investigation, the private respondents were dismissed by the petitioner company on November 23, 1987. As a result, they lodged a complaint for illegal dismissal with the Regional Arbitration Branch of the NLRC in Tacloban City on December 1, 1987, and decisions manded reinstatement with damages. In addition, they instituted in the Regional Trial Court of Leyte, on April 4, 1988, a separate civil complaint against the petitioners for damages arising from what they claimed to be their malicious prosecution.
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the case because it involved employee-employer relations that were exclusively cognizable by the labor arbiter. The motion was granted on February 6, 1989. On July 6, 1989, however, the respondent judge, acting on the motion for reconsideration, reinstated the complaint, saying it was "distinct from the labor case for damages now pending before the labor courts." The petitioners then came to this Court for relief.
The petitioners invoke Article 217 of the Labor Code and a number of decisions of this Court to support their position that the private respondents civil complaint for damages falls under the jurisdiction of the labor arbiter. They particularly cite the case of Getz Corporation v. Court of Appeals, 1 where it was held that a court of first instance had no jurisdiction over the complaint filed by a dismissed employee "for unpaid salary and other employment benefits, termination pay and moral and exemplary damages."
We hold at the outset that the case is not in point because what was involved there was a claim arising from the alleged illegal dismissal of an employee, who chose to complain to the regular court
and not to the labor arbiter. Obviously, the claim arose from employee-employer relations and so came under Article 217 of the Labor Code which then provided as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits;
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by labor Arbiters. 2
It must be stressed that not every controversy involving workers and their employers can be resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection" between the claim asserted and employee-employer relations to put the case under the provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction.
In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of Rizal a civil complaint for damages against their employer for slanderous remarks made against them by the company president. On the order dismissing the case because it came under the jurisdiction of the labor arbiters, Justice Vicente Abad Santos said for the Court:
It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise.
In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for alleged violation by the defendant of an "Agreement for a Course of Conversion Training at the Expense of Singapore Airlines Limited," the jurisdiction of the Court of First Instance of Rizal over the case was questioned. The Court, citing the earlier case of Quisaba v. Sta. Ines Melale Veneer and Plywood, Inc., 5 declared through Justice Herrera:
Stated differently, petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. The other items demanded are not labor benefits demanded by workers generally taken cognizance of in labor disputes, such as payment of wages, overtime compensation or separation pay. The items claimed are the natural consequences flowing from breach of an obligation, intrinsically a civil dispute.
In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of the plaintiff against its sales manager for payment of certain accounts pertaining to his purchase of vehicles and automotive parts, repairs of such vehicles, and cash advances from the corporation was properly cognizable by the Regional Trial Court of Dagupan City and not the labor arbiter, because "although a controversy is between an employer and an employee, the Labor Arbiters have nojurisdiction if the Labor Code is not involved."
The latest ruling on this issue is found in San Miguel Corporation v. NLRC, 7 where the above cases are cited and the changes in Article 217 are recounted. That case involved a claim of an employee for a P60,000.00 prize for a proposal made by him which he alleged had been accepted and implemented by the defendant corporation in the processing of one of its beer products. The claim was filed with the labor arbiter, who dismissed it for lack of jurisdiction but was reversed by the NLRC on appeal. In setting aside the appealed decision and dismissing the complaint, the Court observed through Justice Feliciano:
It is the character of the principal relief sought that appears essential, in this connection. Where such principal relief is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages might be asserted as an incident to such claim.
xxx xxx xxx
Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.
xxx xxx xxx
While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose that the entire universe of money claims that might be asserted by workers against their employers has been absorbed into the original and exclusive jurisdiction of Labor Arbiters.
xxx xxx xxx
For it cannot be presumed that money claims of workers which do not arise out of or in connection with their employer-employee relationship, and which would therefore fall within the general jurisdiction of the regular courts of justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor Arbiters on an exclusive basis. The Court, therefore, believes and so holds that the 'money claims of workers" referred to in paragraph 3 of Article 217 embraces money claims which arise out of or in connection with the employer- employee relationship, or some aspect or incident of such relationship. Put a little differently, that money claims of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims which have some reasonable causal connection with the employer-employee relationship (Ibid.).
The case now before the Court involves a complaint for damages for malicious prosecution which was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It does not appear that there is a "reasonable causal connection" between the complaint and the relations of the parties as employer and employees. The complaint did not arise from such relations and in fact could have arisen independently of an employment relationship between the parties. No such relationship or any unfair labor practice is asserted. What the employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents herein have committed the crime imputed against them." This is a matter which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.
"Talents differ, all is well and wisely put," so observed the philosopher-poet. 8 So it must be in the case we here decide.
WHEREFORE, the order dated July 6, 1989, is AFFIRMED and the petition DENIED, with costs against the petitioner.
SO ORDERED.
[G.R. No. 132400. January 31, 2005]
EDUARDO J. MARIÑO, JR., MA. MELVYN P. ALAMIS and UST FACULTY UNION, petitioners, vs. GIL GAMILLA, DUPONT ASERON and JUSTINO CARDENAS, respondents.
D E C I S I O N
TINGA, J.:
This is a petition for review under Rule 45 assailing the Decision[1] of the Court of Appeals in CA-G.R. SP No. 43701,[2] setting aside the order and the writ of preliminary mandatory injunction issued by the lower court.
The facts of the case are as follows:
Sometime in May 1986, the UST Faculty Union (USTFU) entered into an initial collective bargaining agreement with the University of Santo Tomas (UST) wherein UST undertook to provide USTFU with a free office space at Room 302 of its Health Center Building.[3]
On 21 September 1996, the officers and directors of USTFU scheduled a general membership meeting on 5 October 1996 for the election of the union officers. However, respondent Gamilla and some faculty members filed a Petition[4] with the Med-Arbitration Unit of the Department of Labor and Employment (DOLE) seeking to stop the holding of the USTFU election.[5]
Meanwhile, on 2 October 1996, Rev. Fr. Rodel Aligan, O.P., Secretary General of the UST, issued a Memorandum to the Deans, Regents, Principals and Heads of Departments regarding the holding of a faculty convocation on 4 October 1996.[6]
On 4 October 1996, Med-Arbiter Tomas Falconitin issued a temporary restraining order (TRO) in Case No. NCR-OD-M-9610-001, enjoining the holding of the election of the USTFU officers and directors. However, denying the TRO they themselves sought, Gamilla and some of the faculty members present in the 4 October 1996 faculty convocation proceeded with the election of the USTFU officers. On the other hand, the scheduled election for 5 October 1996 did not push through by virtue of the TRO.[7]
In the succeeding week, on 11 October 1996, petitioners filed with the DOLE a petition for prohibition, injunction, with prayer for preliminary injunction and temporary restraining order,[8] seeking to invalidate the election held on 4 October 1996.
Two months later, on 4 December 1996, UST and USTFU, represented by Gamilla and his co-officers, entered into a collective bargaining agreement (CBA) for a period of five (5) years from 1 June 1996 up to 31 May 2001. The CBA was ratified on 12 December 1996.[9]
In another front, the Med-Arbiter issued a TRO dated 11 December 1996, enjoining Gamilla and his fellow officers to “cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors” of USTFU.[10]
On 27 January 1997, at around eleven in the morning (11:00 a.m.), respondents Gamilla, Cardenas and Aseron, with some other persons, served a letter of even date
on petitioners Mariño and Alamis, demanding that the latter vacate the premises located at Room 302, Health Center Building, UST—the Office of USTFU. However, only the office messenger was in the office at the time. After coercing the office messenger to step out of the office, Gamilla and company padlocked the door leading to the union’s office.[11]
On 5 February 1997, petitioners filed with the Regional Trial Court (RTC) of Manila a Complaint[12] for injunction and damages with a prayer for preliminary injunction and temporary restraining order over the use of the USTFU office.
At the 11 February 1997 hearing on the application for TRO before the trial court, respondents through a consolidated motion to dismiss sought the dismissal of the complaint on the ground of forum-shopping and prayed that the trial court suspend the application for injunctive relief until it shall have resolved the motion to dismiss.[13]
On the same date, Med-Arbiter Falconitin rendered a decision,[14] declaring the 4 October 1996 election and its results null and void ab initio. The decision was appealed to the Bureau of Labor Relations which affirmed the same. [15] Respondents brought the matter to this Court via a special civil action for certiorari.[16] The Court promulgated its decision,[17] dismissing the petition on 16 November 1999.
On 3 March 1997, the RTC issued the assailed order,[18] to wit:
WHEREFORE, upon plaintiff’s filing a bond in the amount of P50,000.00, let a writ of preliminary mandatory injunction issue requiring defendants their representatives and agents or other persons acting in their behalf to remove the padlocks on the door of the UST Faculty Union office located at Room 302, Health Center Bldg., UST, España, Manila and to refrain from preventing/disturbing in any manner whatsoever the plaintiffs in entering the said premises.
In the meantime, defendants are hereby ordered to submit their answer to the complaint within fifteen (15) days from receipt hereof.
On 5 March 1997, after petitioners as plaintiffs therein had posted the requisite bond, the RTC issued a writ of preliminary mandatory injunction.[19]
On 19 March 1997, respondents filed a Petition for Certiorari[20] before the Court of Appeals, claiming that the orders dated 3 and 5 March 1997 were void ab initio for lack of jurisdiction and on the ground that they were issued in violation of due process of law.[21] The Court of Appeals stated that the basic issue of the case was whether the RTC of Manila had jurisdiction over the subject matter of Civil Case No. 97-81928.[22] It agreed with respondents’ disquisition that petitioners’ cause of action in the complaint before the trial court is inextricably linked and intertwined with the issue of who are the legitimate officers of the USTFU, which issue was then being litigated before the DOLE. The appellate court held that Civil Case No. 97-81928 and Case No. NCR-OD-M-9610-016 appear to be the same, with the observation that the civil case merely “grew out” from the labor case. It also cited the prohibition against the issuance of injunction in any case involving or growing out of a labor dispute, unless otherwise provided by law. [23] It
added that it would have been more appropriate for the RTC to determine whether it had jurisdiction over the subject case before issuing the assailed orders. [24] The dispositive portion of the decision reads:
WHEREFORE, premises considered, the petition is hereby GRANTED—and the assailed order (dated March 3, 1997) and the writ of preliminary mandatory injunction (dated March 5, 1997) SET ASIDE—and the respondent judge ordered to DISMISS Civil Case No. 97-81928.
SO ORDERED.[25] (Emphasis in the original.)
Petitioners’ Motion for Reconsideration[26] was denied. Hence, this petition.
Petitioners assert that the RTC has jurisdiction to decide Civil Case No. 97-81928, as the determination of the legality and propriety of padlocking the doors of the USTFU office and preventing the free and unhampered ingress to and egress from the said premises, as alleged in the complaint, are matters incapable of pecuniary estimation.[27] Moreover, they claim that the civil case was premised on causes of action belonging to the USTFU which are to be resolved not by reference to the Labor Code or other labor relations statutes. They stress that the causes of action involve a tortious act and the corresponding claim for damages that are both governed by the civil law and fall under the jurisdiction of regular courts.[28]
Petitioners add that not all controversies involving members of the same union are to be decided by the labor tribunal. They add that in the instant case, the pendency of the labor case should not militate against the civil case they filed since the criminal and civil aspects of a violation of Article 241 of the Labor Code [29]can be litigated separately and independently from the administrative aspect of a breach of the rights and conditions of membership.[30]
Anent the ruling of the Court of Appeals on the writ of injunction issued by the trial court, petitioners state that Art. 254 of the Labor Code[31]on prohibition against injunctions is not applicable to the instant case since the controversy cannot be categorized as a labor dispute. They argue that the injunction was called for considering that they “have rights to be protected and preserved,” which however, “were violated, invaded and trampled upon” by respondents through the acts complained of.[32]
Petitioners claim that respondents were not denied their day in court when the trial court did not resolve the issue of jurisdiction before proceeding with the hearing on the application for injunctive order. According to them, respondents were given the chance to present their evidence in support of their opposition to the injunction and TRO, but respondents chose not to avail of this opportunity.[33]
Lastly, they add that respondents Gamilla, Cardenas and Aseron had no right to act for and in behalf of the USTFU for the following reasons, to wit: Gamilla’s claim to the USTFU presidency was declared non-existent by the labor tribunals; Cardenas was the chief of the security force in the university and not a faculty member; and, Aseron was a Barangay Chairman and not a member of the UST faculty.[34] Thus, petitioners claim that
USTFU was improperly included as petitioner in the petition[35] before the Court of Appeals.
Accordingly, petitioners assert that the Court of Appeals erred and gravely abused its discretion when:
I. It ruled that the regional trial court had no jurisdiction over Civil Case No. 97-81928;
II. It ruled that Civil Case No. 97-81928 is a labor dispute cognizable by the DOLE;
III. It granted the petition for certiorari in CA-G.R. SP No. 43701, set aside the orders issued by the trial court, and ordered the dismissal of the civil case;
IV. It ruled that Art. 254 of the Labor Code is applicable to the matters involved in Civil Case No. 97-81928;
V. It ruled that respondents were denied their day in court; and
VI. It ruled that the Motion for Reconsideration filed in CA-G.R. SP No. 43701 was pro-forma.[36]
On the other hand, respondents maintain that the regional trial court had no jurisdiction over the issue as to who has the right to use the union office because the same is inextricably linked and intertwined with the issue as to who are the legitimate and duly elected officers of the USTFU, which was then the subject of another case before the DOLE.[37] Furthermore, respondents insist that the trial court violated their right to due process when it refused to determine the issue of jurisdiction before issuing its assailed orders.[38] Respondents submit that the only issue in the instant petition is whether the RTC has jurisdiction over Civil Case No. 97-81928.[39]
There is merit in the petition but only in part.
Jurisdiction over a subject matter is conferred by law and determined by the allegations in the complaint[40] and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.[41]
Central to the assailed decision of the Court of Appeals is its adoption of respondents’ argument that the issue in Civil Case No. 97-81928 is “inextricably linked and intertwined with the issue as to who are the lawful officers of the USTFU,” which is within the exclusive jurisdiction of the Secretary of Labor; and that “the use of the union office is a mere incident of the labor dispute.” [42] Specifically, the Court of Appeals held:
. . . .The two cases (Civil Case No. 97-81928 and Case No. NCR-OD-M-9610-016) appear the same. While ostensibly, the complaint filed with the trial court was branded ‘injunction and damages’, the action challenged the legitimacy of petitioners’ election as officers of the UST Faculty Union, with the plaintiff therein (respondent herein) seeking to enjoin them (petitioners herein) from claiming and acting as such (elected officers of the union) and to have the election proceedings of October 4, 1996 invalidated and declared null and void. Taking note of plaintiffs’ (private respondents’) previous moves before the Department of Labor, Civil Case No. 97-81928 appear (sic) to have grown out therefrom—hence, said case clearly falls outside of the competence of the trial court.[43]
Another reason that militates against the trial court’s assumption of jurisdiction over the case is Article 254 of the Labor Code that states:
Art. 254. Injunction prohibited.—No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code.[44]
As pointed out by petitioners, the Court of Appeals erroneously categorized the instant matter as a labor dispute. Such labor dispute includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.[45] Jurisdiction over labor disputes, including claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations is vested in Labor Arbiters and the National Labor Relations Commission (NLRC).[46]
On the other hand, an intra-union dispute refers to any conflict between and among union members. It encompasses all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, not excepting cases arising from chartering or affiliation of labor organizations or from any violation of the rights and conditions of union membership provided for in the Labor Code.[47] In contrast, an inter-union dispute refers to any conflict between and among legitimate labor organizations involving questions of representation for purposes of collective bargaining; it includes all other conflicts which legitimate labor organizations may have against each other based on any violations of their rights as labor organizations.[48] Like labor disputes, jurisdiction over intra-union and inter-union disputes does not pertain to the regular courts. It is vested in the Bureau of Labor Relations Divisions in the regional offices of the Department of Labor.
Case No. NCR-OD-M-9610-016 entitled “Eduardo J. Mariño, Jr., et al. v. Gil Gamilla, et al.” before the BLR is neither a labor nor an inter-union dispute. It is clearly an intra-union dispute.
The case before the trial court, Civil Case No. 97-81928 entitled Eduardo J. Mariño, Jr. et al. v. Gil Gamilla, et al.,[49] on the other hand, is a simple case for damages, with an accompanying application for injunction. The complaint essentially bears the following allegations: that despite an outstanding temporary restraining order prohibiting the holding of an election of officers, respondent Gamilla and others proceeded to hold a purported election; that there was a case pending before the DOLE questioning the validity of the supposed election; and, that respondent Gamilla with two other persons (later learned to be respondents Aseron and Cardenas) compelled the office messenger to vacate the premises of the USTFU office, and thereafter padlocked the room. Petitioners alleged respondents’ act of padlocking the office was without lawful basis, and had prevented them from entering the office premises, thereby denying them access to personal effects, documents and records needed in the on-going cases both in the DOLE and in the complaint a quo, and ultimately precluding the union from serving its members.
Fundamentally, the civil case a quo seeks two reliefsone is for the removal of the padlocks on the office door and restraining respondents from blocking petitioners’ access to the premises, while the other is for the recovery of moral and exemplary damages.
Prior to the institution of the civil case, petitioners filed before the Med-Arbitration Unit of the DOLE-NCR a petition for prohibition, injunction with a prayer for preliminary injunction and temporary restraining order against herein respondents for the latter’s assumption of office as elected USTFU officers. Specifically, they prayed that respondents be enjoined from claiming to be the duly elected officers of the union and from performing acts for and in behalf of the union.
The propriety of padlocking the union’s office, the relief sought by the petitioner in the civil case, is interwoven with the issue of legitimacy of the assumption of office by the respondents in light of the violation of the union’s constitution and by-laws, which was then pending before the Med-Arbiter. Necessarily, therefore, the trial court has no jurisdiction over the case insofar as the prayer for the removal of the padlocks and the issuance of an injunctive writ is concerned.
It is a settled rule that jurisdiction, once acquired, continues until the case is finally terminated.[50] The petition with the Med-Arbiter was filed ahead of the complaint in the civil case before the RTC. As such, when the petitioners filed their complaint a quo, jurisdiction over the injunction and restraining order prayed for had already been lodged with the Med-Arbiter. The removal of padlocks and the access to the office premises is necessarily included in petitioners’ prayer to enjoin respondents from performing acts pertaining to union officers and on behalf of the union. In observance of the principle of adherence of jurisdiction, it is clear that the RTC should not have exercised jurisdiction over the provisional reliefs prayed for in the complaint. A review of the complaint shows that petitioners disclosed the existence of the petition pending before the Med-Arbiter and even attached a copy thereof.[51] The trial court was also aware of the decision of the Med-Arbiter dated 11 February 1997, declaring the supposed union officers’ election void ab initio and ordering respondents to cease and desist from discharging the duties and functions of the legitimate officers of the USTFU. The trial court even obtained a
copy of the said decision two (2) days after its promulgation.[52]Still, it continued the hearing on the application for injunction and eventually issued the assailed orders.
At this juncture, the Court notes that a key question in this case has already been settled by the Court in its decision in UST Faculty Union,et al. v. Bitonio, Jr., et al.[53] In that case, it was ruled that the 04 October 1996 election was void for having been conducted in violation of the union’s constitution and by-laws. Nevertheless, the complaint a quo could not have validly proceeded at the time of its filing of the said case due to petitioners’ lack of cause of action.
As to the alleged inclusion of the USTFU as petitioner in the petition before the Court of Appeals, suffice it to say that the right to use the union’s name as well as to represent it has been settled by our decision in UST Faculty Union, et al. v. Bitonio, Jr., et al. Petitioners, as the rightful officers of the USTFU, and not respondents, have the right to represent USTFU in the proceedings.
Let us go back to the claim for damages before the lower court. Art. 226 of the Labor Code provides, thus:
The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.
Thus, unlike the NLRC which is explicitly vested with the jurisdiction over claims for actual, moral, exemplary and other forms of damages,[54]the BLR is not specifically empowered to adjudicate claims of such nature arising from intra-union or inter-union disputes. In fact, Art. 241 of the Labor Code ordains the separate institution before the regular courts of criminal and civil liabilities arising from violations of the rights and conditions of union membership. The Court has consistently held that where no employer-employee exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes, or any collective bargaining agreement, it is the regional trial court that has jurisdiction.[55]
Administrative agencies are tribunals of limited jurisdiction and as such, can exercise only those powers which are specifically granted to them by their enabling statutes. Consequently, matters over which they are not granted authority are beyond their competence.[56] While the trend is towards vesting administrative bodies with the power to adjudicate matters coming under their particular specialization, to ensure a more knowledgeable solution of the problems submitted to them, this should not deprive the courts of justice their power to decide ordinary cases in accordance with the general laws that do not require any particular expertise or training to interpret and apply. [57] In their complaint in the civil case, petitioners do not seek any relief under the Labor Code
but the payment of a sum of money as damages on account of respondents’ alleged tortuous conduct. The action is within the realm of civil law and, hence, jurisdiction over the case belongs to the regular courts.[58]
WHEREFORE, the Petition is hereby GRANTED IN PART. The Decision of the Court of Appeals setting aside the Order dated 3 March 1997 and the writ of preliminary mandatory injunction dated 5 March 1997 is hereby AFFIRMED. The case is REMANDED to the trial court for further proceedings in accordance with this Decision. No costs.
SO ORDERED.
LABOR STANDARDS
ON RECRUITMENT AND PLACEMENT
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.
[G.R. No. 127195. August 25, 1999]
MARSAMAN MANNING AGENCY, INC. and DIAMANTIDES MARITIME, INC., petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and WILFREDO T. CAJERAS, respondents.
D E C I S I O N
BELLOSILLO, J.:
MARSAMAN MANNING AGENCY, INC. (MARSAMAN) and its foreign principal DIAMANTIDES MARITIME, INC. (DIAMANTIDES) assail the Decision of public respondent National Labor Relations Commission dated 16 September 1996 as well as its Resolution dated 12 November 1996 affirming the Labor Arbiter's decision finding them guilty of illegal dismissal and ordering them to pay respondent Wilfredo T. Cajeras salaries corresponding to the unexpired portion of his employment contract, plus attorney's fees.
Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local manning agent of petitioner DIAMANTIDES, as Chief Cook Steward on the MV Prigipos, owned and operated by DIAMANTIDES, for a contract period of ten (10) months with a monthly salary of US$600.00, evidenced by a contract between the parties dated 15 June 1995. Cajeras started work on 8 August 1995 but less than two (2) months later, or on 28 September 1995, he was repatriated to the Philippines allegedly by “mutual consent.”
On 17 November 1995 private respondent Cajeras filed a complaint for illegal dismissal against petitioners with the NLRC National Capital Region Arbitration Branch alleging that he was dismissed illegally, denying that his repatriation was by mutual consent, and asking for his unpaid wages, overtime pay, damages, and attorney’s fees.i[1] Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant cook and messman in addition to performing various inventory and requisition jobs. Because of his additional assignments he began to feel sick just a little over a month on the job constraining him to request for medical attention. He was refused at first by Capt. Kouvakas Alekos, master of the MV Prigipos, who just ordered him to continue working. However a day after the ship’s arrival at the port of Rotterdam, Holland, on 26 September 1995 Capt. Alekos relented and had him examined at the Medical Center for Seamen. However, the examining physician, Dr. Wden Hoed, neither apprised private respondent about the diagnosis nor issued the requested medical certificate allegedly because he himself would forward the results to private respondent’s superiors. Upon returning to the vessel, private respondent was unceremoniously ordered to prepare for immediate repatriation the following day as he was said to be suffering from a disease of unknown origin.
On 28 September 1995 he was handed his Seaman's Service Record Book with the following entry: "Cause of discharge - Mutual Consent."ii[2] Private respondent promptly objected to the entry but was not able to do anything more as he was immediately ushered to a waiting taxi which transported him to the Amsterdam Airport for the return flight to Manila. After his arrival in Manila on 29 September 1995 Cajeras complained to MARSAMAN but to no avail.iii[3]
MARSAMAN and DIAMANTIDES, on the other hand, denied the imputation of illegal dismissal. They alleged that Cajeras approached Capt. Alekos on 26 September 1995 and informed the latter that he could not sleep at night because he felt something crawling over his body. Furthermore, Cajeras reportedly declared that he could no longer perform his duties and requested for repatriation. The following paragraph in the vessel's Deck Log was allegedly
entered by Capt. Alekos, to wit:
Cajeras approached me and he told me that he cannot sleep at night and that he feels something crawling on his body and he declared that he can no longer perform his duties and he must be repatriated.iv[4]
Private respondent was then sent to the Medical Center for Seamen at Rotterdam where he was examined by Dr. Wden Hoed whose diagnosis appeared in a Medical Report as “paranoia” and “other mental problems.”v[5] Consequently, upon Dr. Hoed’s recommendation, Cajeras was repatriated to the Philippines on 28 September 1995.
On 29 January 1996 Labor Arbiter Ernesto S. Dinopol resolved the dispute in favor of private respondent Cajeras ruling that the latter's discharge from the MV Prigipos allegedly by “mutual consent” was not proved by convincing evidence. The entry made by Capt. Alekos in the Deck Log was dismissed as of little probative value because it was a mere unilateral act unsupported by any document showing mutual consent of Capt. Alekos, as master of the MV Prigipos, and Cajeras to the premature termination of the overseas employment contract as required by Sec. H of the Standard Employment Contract Governing the Employment of all Filipino Seamen on Board Ocean-Going Vessels. Dr. Hoed’s diagnosis that private respondent was suffering from “paranoia” and “other mental problems” was likewise dismissed as being of little evidentiary value because it was not supported by evidence on how the paranoia was contracted, in what stage it was, and how it affected respondent's functions as Chief Cook Steward which, on the contrary, was even rated “Very Good” in respondent's Service Record Book. Thus, the Labor Arbiter disposed of the case as follows:
WHEREFORE, judgment is hereby rendered declaring the repatriation and dismissal of complaint Wilfredo T. Cajeras as illegal and ordering respondents Marsaman Manning Agency, Inc. and Diamantides Maritime, Inc. to jointly and severally pay complainant the sum of USD 5,100.00 or its peso equivalent at the time of payment plus USD 510.00 as 10% attorney’s fees it appearing that complainant had to engage the service of counsel to protect his interest in the prosecution of this case.
The claims for nonpayment of wages and overtime pay are dismissed for having been withdrawn (Minutes, December 18, 1995). The claims for damages are likewise dismissed for lack of merit, since no evidence was presented to show that bad faith characterized the dismissal.vi[6]
Petitioners appealed to the NLRC.vii[7] On 16 September 1996 the NLRC affirmed the appealed findings and conclusions of the Labor Arbiter.viii[8] The NLRC subscribed to the view that Cajeras’ repatriation by alleged mutual consent was not proved by petitioners, especially after noting that private respondent did not actually sign his Seaman’s Service Record Book to signify his assent to the repatriation as alleged by petitioners. The entry made by Capt. Alekos in the Deck Log was not considered reliable proof that private respondent agreed to his repatriation because no opportunity was given the latter to contest the entry which was against his interest. Similarly, the Medical Report issued by Dr. Hoed of Holland was dismissed as being of dubious value since it contained only a sweeping statement of the supposed ailment of Cajeras without any elaboration on the factual basis thereof.
Petitioners' motion for reconsideration was denied by the NLRC in its Resolution dated 12 November 1996.ix[9] Hence, this petition contending that the NLRC committed grave abuse of discretion: (a) in not according full faith and credit to the official entry by Capt. Alekos in the vessel’s Deck Log conformably with the rulings in Haverton Shipping Ltd. v. NLRCx[10] and Wallem Maritime Services, Inc. v. NLRC;xi[11] (b) in not appreciating the Medical Report issued by
Dr. Wden Hoed as conclusive evidence that respondent Cajeras was suffering from paranoia and other mental problems; (c) in affirming the award of attorney’s fees despite the fact that Cajeras' claim for exemplary damages was denied for lack of merit; and, (d) in ordering a monetary award beyond the maximum of three (3) months’ salary for every year of service set by RA 8042.
We deny the petition. In the Contract of Employmentxii[12] entered into with private respondent, petitioners convenanted strict and faithful compliance with the terms and conditions of the Standard Employment Contract approved by the POEA/DOLExiii[13] which provides:
1. The employment of the seaman shall cease upon expiration of the contract period indicated in the Crew Contract unless the Master and the Seaman, by mutual consent, in writing, agree to an early termination x x x x (underscoring ours).
Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to the expiration of the stipulated period provided that the master and the seaman (a) mutually consent thereto and (b) reduce their consent in writing.
In the instant case, petitioners do not deny the fact that they have fallen short of the requirement. No document exists whereby Capt. Alekos and private respondent reduced to writing their alleged “mutual consent” to the termination of their employment contract. Instead, petitioners presented the vessel's Deck Log wherein an entry unilaterally made by Capt. Alekos purported to show that private respondent himself asked for his repatriation. However, the NLRC correctly dismissed its evidentiary value. For one thing, it is a unilateral act which is vehemently denied by private respondent. Secondly, the entry in no way satisfies the requirement of a bilateral documentation to prove early termination of an overseas employment contract by mutual consent required by the Standard Employment Contract. Hence, since the latter sets the minimum terms and conditions of employment for the protection of Filipino seamen subject only to the adoption of better terms and conditions over and above the minimum standards,xiv[14] the NLRC could not be accused of grave abuse of discretion in not accepting anything less.
However petitioners contend that the entry should be considered prima facie evidence that respondent himself requested his repatriation conformably with the rulings in Haverton Shipping Ltd. v. NLRCxv[15] and Abacast Shipping and Management Agency, Inc. v. NLRC.xvi[16] Indeed, Haverton says that a vessel’s log book is prima facie evidence of the facts stated therein as they are official entries made by a person in the performance of a duty required by law. However, this jurisprudential principle does not apply to win the case for petitioners. In Wallem Maritime Services, Inc. v. NLRCxvii[17] the Haverton ruling was not given unqualified application because the log book presented therein was a mere typewritten collation of excerpts from what could be the log book.xviii[18] The Court reasoned that since the log book was the only piece of evidence presented to prove just cause for the termination of respondent therein, the log book had to be duly identified and authenticated lest an injustice would result from a blind adoption of its contents which were but prima facie evidence of the incidents stated therein.
In the instant case, the disputed entry in the Deck Log was neither authenticated nor supported by credible evidence. Although petitioners claim that Cajeras signed his Seaman’s Service Record Book to signify his conformity to the repatriation, the NLRC found the allegation to be actually untrue since no signature of private respondent appeared in the Record Book.
Neither could the “Medical Report” prepared by Dr. Hoed be considered corroborative and conclusive evidence that private respondent was suffering from “paranoia” and “other mental problems,” supposedly just causes for his repatriation. Firstly, absolutely no evidence, not even an allegation, was offered to enlighten the NLRC or this Court as to Dr. Hoed's qualifications to diagnose mental illnesses. It is a matter of judicial notice that there are various specializations in medical science and that a general practitioner is not competent to diagnose any and all kinds of illnesses and diseases. Hence, the findings of doctors who are not proven experts are not binding on this Court.xix[19] Secondly, the Medical Report prepared by Dr. Hoed contained only a general statement that private respondent was suffering from “paranoia” and “other mental problems” without providing the details on how the diagnosis was arrived at or in what stage the illness was. If Dr. Hoed indeed competently examined private respondent then he would have been able to discuss at length the circumstances and precedents of his diagnosis. Petitioners cannot rely on the presumption of regularity in the performance of official duties to make the Medical Report acceptable because the presumption applies only to public officers from the highest to the lowest in the service of the Government, departments, bureaus, offices, and/or its political subdivisions,xx[20] which Dr. Wden Hoed was not shown to be. Furthermore, neither did petitioners prove that private respondent was incompetent or continuously incapacitated for the duties for which he was employed by reason of his alleged mental state. On the contrary his ability as Chief Cook Steward, up to the very moment of his repatriation, was rated “Very Good” in his Seaman’s Service Record Book as correctly observed by public respondent.
Considering all the foregoing we cannot ascribe grave abuse of discretion on the part of the NLRC in ruling that petitioners failed to prove just cause for the termination of private respondent's overseas employment. Grave abuse of discretion is committed only when the judgment is rendered in a capricious, whimsical, arbitrary or despotic manner, which is not true in the present case.xxi[21]
With respect to attorney’s fees, suffice it to say that in actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interests, a maximum award of ten percent (10%) of the monetary award by way of attorney’s fees is legally and morally justifiable under Art. 111 of the Labor Code,xxii[22] Sec. 8, Rule VIII, Book III of its Implementing Rules,xxiii[23] and par. 7, Art. 2208xxiv[24] of the Civil Code.xxv[25] The case of Albenson Enterprises Corporation v. Court of Appealsxxvi[26] cited by petitioners in arguing against the award of attorney’s fees is clearly not applicable, being a civil action for damages which deals with only one of the eleven (11) instances when attorney’s fees could be recovered under Art. 2208 of the Civil Code.
Lastly, on the amount of salaries due private respondent, the rule has always been that an illegally dismissed worker whose employment is for a fixed period is entitled to payment of his salaries corresponding to the unexpired portion of his employment.xxvii[27] However on 15 July 1995, RA 8042 otherwise known as the “Migrant Workers and Overseas Filipinos Act of 1995” took effect, Sec. 10 of which provides:
Sec. 10. In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of the employment contract or for three (3) months for every year of the unexpired term whichever is less (underscoring ours).
The Labor Arbiter, rationalizing that the aforesaid law did not apply since it became effective only one (1) month after respondent's overseas employment contract was entered into on 15 June 1995, simply awarded private respondent his salaries corresponding to the unexpired portion of his employment contract, i.e., for 8.6 months. The NLRC affirmed the award and the Office of the Solicitor General (OSG) fully agreed. But petitioners now insist that Sec. 10, RA 8042 is applicable because although private respondent’s contract of employment was entered into before the law became effective his alleged cause of action, i.e., his repatriation on 28 September 1995 without just, valid or authorized cause, occurred when the law was already in effect. Petitioners' purpose in so arguing is to invoke the law in justifying a lesser monetary award to private respondent, i.e., salaries for three (3) months only pursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months awarded by the Labor Arbiter and affirmed by the NLRC.
We agree with petitioners that Sec. 10, RA 8042, applies in the case of private respondent and to all overseas contract workers dismissed on or after its effectivity on 15 July 1995 in the same way that Sec. 34,xxviii[28] RA 6715,xxix[29] is made applicable to locally employed workers dismissed on or after 21 March 1989.xxx[30] However, we cannot subscribe to the view that private respondent is entitled to three (3) months’ salary only. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months’ salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words “for every year of the unexpired term” which follows the words “salaries x x x for three months.” To follow petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effectxxxi[31] since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly. xxxii[32] Ut res magis valeat quam pereat.xxxiii[33]
WHEREFORE, the questioned Decision and Resolution dated 16 September 1996 and 12 November 1996, respectively, of public respondent National Labor Relations Commission are AFFIRMED. Petitioners MARSAMAN MANNING AGENCY, INC., and DIAMANTIDES MARITIME, INC., are ordered, jointly and severally, to pay private respondent WILFREDO T. CAJERAS his salaries for the unexpired portion of his employment contract or USD$5,100.00, reimburse the latter's placement fee with twelve percent (12%) interest per annum conformably with Sec. 10 of RA 8042, as well as attorney's fees of ten percent (10%) of the total monetary award. Costs against petitioners.
SO ORDERED.
[G.R. No. 144314*. November 21, 2002]
SKIPPERS PACIFIC, INC., and SKIPPERS MARITIME SERVICES, LTD., petitioners, vs. MANUEL V. MIRA (DECEASED), substituted by DELFA F. MIRA and ANNE MARIE F. MIRA,** and THE COURT OF APPEALS, respondents.
D E C I S I O N
QUISUMBING, J.:
This is a petition for review of the decision [1] of the Court of Appeals, dated June 29, 2000, in CA-G.R. SP No. 53079, which affirmed the resolution [2] of the National Labor Relations Commission (NLRC), promulgated on March 15, 1999, in NLRC CA No. 016616-98 (NLRC OCW Case No. M-97-084057). The NLRC affirmed the decision of the Labor Arbiter holding that private respondent’s dismissal from employment was illegal. Also assailed is the appellate court’s resolution [3] of August 3, 2000, which denied petitioners’ motion for reconsideration for lack of merit.
Petitioner Skippers Maritime Services Ltd., (SMS) is a foreign corporation based in Athens, Greece and is the owner of the ship M/V Rita V, a Panama-registered vessel of 5,262 gross registered tons. Petitioner Skippers United Pacific, Inc. (SUPI) is the local crewing/manning agent of SMS for said vessel.
Private respondent Manuel V. Mira was the captain of M/V Rita V. During the pendency of this case, private respondent died of cardiovascular disease. [4] In our resolution[5] of June 18, 2001, we granted the motion to substitute the deceased private respondent with his surviving spouse, Delfa F. Mira, and sole child, Anne Marie F. Mira.
The facts of this case are not in dispute:
On March 20, 1997, private respondent was hired by SUPI for and on behalf of its principal, SMS, to serve as Master of the latter’s vessel, the M/V Rita V. Private respondent’s contract was for a period of six (6) months. During said period of employment, he was to receive a basic salary of US$1,900.00, an owner’s bonus of US$200.00, overseas allowance of US$442.00 and vacation leave with pay of US$158.00, all on a monthly basis.
On March 22, 1997, private respondent took command of the M/V Rita V in Singapore. Barely in his second month of service, he received two telex messages dated May 14, 1997[6] and May 16, 1997[7], ordering him to turn over command of the ship to its former Master, Capt. Achilles Puaben, and advising him that he would be transferred to another vessel on June 10, 1997.
On May 22, 1997, private respondent was repatriated back to the Philippines. Shortly thereafter, he inquired from SUPI about the details of his transfer to another
vessel. SUPI and the SMS representative in the Philippines, Filippo Karabatsis, assured him that he would be redeployed on June 10, 1997.
June 10, 1997 came and went, but private respondent remained without assignment. Every time he would follow up his transfer, he was just told to sit tight and wait. Private respondent then formally wrote Karabatsis and Gloria Almodiel, SUPI General Manager, on July 25, 1997 and again on July 28, 1997, about his transfer to another ship, but nothing resulted.
On August 15, 1998, private respondent filed a complaint for illegal dismissal and non-payment of the salaries and allowances owing on the unexpired portion of his contract. In his sworn complaint, docketed as NLRC NCR Case No. M-97-08-4057, private respondent averred that he was dismissed without just cause nor due process.
Petitioners countered that private respondent was dismissed for cause in accordance with Philippine Overseas Employment Administration Memorandum Circular No. 55, series of 1996. Petitioners averred that on April 27, 1997, they received a letter-petition from several crewmembers of M/V Rita V stating that: (1) private respondent had been causing discontent among the crew; (2) he altered official receipts by increasing the amounts indicated therein so he could collect from SMS the excess of the real cost of the goods brought for the vessel’s provisions; (3) he declared as lost the ship’s funds amounting to US$4,000.00 but then shortly afterwards sent money to his wife in the Philippines; and (4) he planned to repatriate several members of the engine crew to the Philippines. Petitioners alleged that private respondent was dismissed due to these charges.
Private respondent denied any knowledge of said letter-petition, saying it was the first time he had heard of it. Petitioners failed to present the original of the letter-petition in question before the Labor Arbiter.
On July 30, 1998, the Labor Arbiter decided NLRC NCR Case No. M-97-08-4057 in this wise:
WHEREFORE, as we sustain the illegality of complainant’s dismissal, we order respondent Skippers United Pacific, Inc., both in its personal capacity and as agent of the foreign principal to pay complainant his salary for the unexpired portion of his contract but limited to three months pursuant to Section 10 of R.A. 8042, in the amount of US$5,700.00 (US$1,900 x 3) plus the sum of US$570.00 by way of 10% attorney’s fees since compelled to litigate, complainant had to engage the services of counsel, payments to be made in their peso equivalent at the rate of payment.
All other claims are dismissed for lack of merit.
SO ORDERED.[8]
Petitioners appealed the Labor Arbiter’s decision on the ground that it was devoid of factual and legal bases. The appeal was docketed as NLRC CA No. 016616-98.
On March 15, 1999, the Third Division of the NLRC dismissed petitioners’ appeal, thus:
WHEREFORE, consistent with the foregoing, the instant appeal is dismissed for lack of merit and the assailed decision affirmed en toto.
SO ORDERED.[9]
Petitioners moved for reconsideration on the ground that the NLRC failed to appreciate loss of trust and confidence as a basis for terminating the services of the private respondent. On May 12, 1999, the NLRC denied petitioners’ motion for reconsideration for want of merit.[10]
Petitioners then filed a special civil action for certiorari with the Court of Appeals, docketed as CA-GR SP No. 53079, contending that the NLRC acted with grave abuse of discretion amounting to want or excess of jurisdiction in affirming the judgment of the Labor Arbiter.
On June 29, 2000, the appellate court decided CA-G.R. SP No. 53079 as follows:
WHEREFORE, premises considered, the instant petition for certiorari is hereby DENIED DUE COURSE and accordingly DISMISSED for lack of merit. The assailed Resolution of public respondent National Labor Relations Commission dated May 12, 1999 is AFFIRMED and REITERATED.
Needless to state, the prayer of petitioners for the issuance of a writ of preliminary injunction and/or temporary restraining order is DENIED for lack of factual and legal bases.
SO ORDERED.[11]
Hence, the instant petition for review anchored on the following issues:
a. WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THERE WAS NO JUST CAUSE IN TERMINATING THE SERVICES OF THE PRIVATE RESPONDENT;
b. WHETHER OF NOT THE COURT OF APPEALS ERRED IN RULING THAT SECTION 17[12] OR THE STANDARD FORMAT IS INAPPLICABLE IN THIS CASE.[13]
Petitioners’ formulation may be reduced to one issue: Did the Court of Appeals err in affirming the NLRC’s decision that private respondent was illegally dismissed?
Petitioners contend that the Court of Appeals erred in ruling that there was no just cause for private respondent’s dismissal. Citing the letter-petition allegedly signed by certain officers and crewmembers of M/V Rita V, petitioners insist that the acts of dishonesty and embezzlement of company funds complained of warrant the penalty of dismissal. Moreover, said the petitioners, assuming that these acts of dishonesty were
not substantiated, nonetheless private respondent’s actions created divisiveness among the crew, and this more than justified the termination of private respondent’s employment.
For his part, private respondent points out that at all three levels below – Labor Arbiter, NLRC, and Court of Appeals – petitioners could not produce an original copy of the alleged letter-petition. Hence, said letter must be deemed spurious or fabricated, especially as it only came out after private respondent had filed a complaint for illegal dismissal. Private respondent further points out that petitioners fail to raise any question of law whatsoever in their petition for review.
The court a quo made the following observations when it sustained the NLRC’s findings, that private respondent was illegally dismissed:
As for the legality of the act of dismissal, We find that there is no just cause for private respondent’s termination. Clearly, the allegations contained in the letter-petition do not at all amount to substantial evidence. The acts mentioned therein are based purely on speculations, conjectures, and hearsay. The letter petition is itself clear on this matter. The signatories thereto merely attributed their statements to information they learned through the grapevine or from conclusions reached without adequate basis. For example, the allegation regarding the missing US$4,000.00. It was thereon alleged that private respondent lost the said amount and even tried to put the blame on the crewmembers. Not long after though, private respondent sent an undisclosed amount to his wife in Manila. The signatories thereto are insinuating that private respondent misappropriated the money allegedly lost by sending the same to his wife. Thus, they put one (1) and one (1) together to arrive at a clearly speculative conclusion. Furthermore, the statement concerning the alleged padding of official receipts was not supported by any other evidence except their allegation that somebody leaked said information to those on board M/V Rita V. This is pure hearsay. Not even the chief cook could attest to the truthfulness of such act since he did not see private respondent do such alteration of official receipts to reflect a much higher cost of goods bought nor was he ever told personally of such misdeed…[14]
On the second assigned error, petitioners assail the finding of the Court of Appeals that the manner of effecting petitioners’ dismissal was illegal. Petitioners insist that even without furnishing the seafarer with notice of dismissal, it may be effected under Section 17 (D) of what is called the Standard Format in cases where giving a notice will prejudice the safety of the crew and vessel. Petitioners aver that giving notice to private respondent would have been disastrous to both crew and vessel, as private respondent, being at the time the vessel’s Master, could sabotage its operations and sow divisiveness among the crewmembers.
Private respondent submits that Section 17 (D) is inapplicable since the new Master who replaced him failed to comply with its requirements. In short, petitioners’ arguments are baseless and unfounded.
As to this matter, the Court of Appeals opined:
The safety of the crew or the vessel would not be imperiled by the sole act of informing him of the charges against him. Private respondent is not a dangerous or menacing individual. There are no positive indications that he would compromise the safety of his crew or the seaworthiness of the vessel just so he could get his way. Besides, petitioners could have required him to dock the vessel at the nearest port where petitioner principal has a representative or at least where the proper authorities could be notified of any contingency without first informing him of the reason therefore. Then the proper notices and investigation to thresh out the truth regarding the allegations against private respondent could have been effected.[15]
The appellate court concluded that private respondent had been illegally dismissed based on evidence adduced before the Labor Arbiter and later the NLRC. We see no reason to disturb the appellate court’s findings, which are amply supported by the evidence. It clearly shows that petitioners relied on sheer surmises and hearsay in dismissing private respondent. An employer can terminate the services of an employee only for valid and just causes, which must be supported by clear and convincing evidence.[16] The employer has the burden of proving that the dismissal was for a valid and just cause.[17] In the present case, petitioners utterly failed to establish by convincing evidence private respondent’s culpability. No original of the letter-petition allegedly submitted to them by crewmembers of the vessel was ever produced by petitioners. The acts allegedly complained of therein were not substantiated at all. Failure to discharge this burden of proof substantially means that the dismissal was not justified and therefore, illegal.[18] For dismissal to be valid, the evidence must be substantial and not arbitrary and must be founded on clearly established facts. [19] A condemnation of dishonesty and disloyalty cannot arise from suspicions spawned by speculative inferences.
Petitioners’ submission, that private respondent was dismissed because of loss of trust and confidence, is quite belated. This issue could not be raised for the first time on appeal. Moreover, loss of trust or breach of confidence must have some basis, and without said basis cannot be successfully invoked as a ground for dismissal.[20] Otherwise put, there must be some breach of duty on the part of the employee and the same must be supported by substantial evidence.[21]
Not only must the reasons for dismissing an employee be substantiated, the manner of his dismissal must be in accordance with governing rules and regulations. Otherwise the termination itself would be grossly defective, and illegal.[22] This means that the requirements of due process must be observed. The employer is required to furnish the concerned employee with two written notices before his dismissal: (1) the notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice of the employer’s decision to dismiss him.[23] This procedure is mandatory; otherwise the order of dismissal is void.[24]
Note that under Section 17 of what is termed the Standard Format, the “two - notice rule” is indicated. An erring seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices are dispensed with; but just the same, a complete report should be sent to the manning agency, supported by substantial evidence of the findings.
Nothing on record supports petitioners’ allegations that the giving of a notice to private respondent posed a clear and present danger to crew and vessel. He who invokes an exemption from a rule must by convincing and credible evidence show why the exemption should apply to him. On this score, petitioners failed to adduce pertinent evidence. Further, nothing on record shows that the Master, who replaced private respondent, or any other officer of M/V Rita V or of petitioners, submitted “a complete report to the manning agency substantiated by witnesses, testimonies, and any other documents” supporting a finding of clear and existing danger to the ship and the company. Hence, we are constrained to agree that the manner of dismissal by petitioners of private respondent was devoid of due process, hence illegal.
Third, as pointed out by private respondent, the present petition raises no question of law. The errors assigned by petitioners concern findings of the appellate court that sustain the conclusion of the labor tribunal. In brief, what petitioners raise are questions of fact. There is a question of fact when the doubt or difference arises as to the truth or the falsehood of the alleged facts.[25] The Supreme Court is not a trier of facts, more so in labor cases,[26] in view of the dictum that findings of fact of the NLRC are accorded great respect and even finality by this Court. Rule 45 of the Rules of Court, Section 1,[27] provides that only questions of law shall be raised, which must be distinctly set forth in the petition. A question of law exists when there is doubt or controversy as to what the law is on a certain state of facts. [28] A question of law does not involve any examination of the probative value of the evidence submitted by the parties. [29] As a general rule, in a petition for review, it is not the function of the Supreme Court to weigh all over again the evidence already considered in proceedings below.
Private respondent, for his part, avers that the Court of Appeals erred in citing Section 10 of Republic Act No. 8042[30] as applicable to him.
Private respondent argues that his contract of employment was for six (6) months. However, he was able to work for only two (2) months because he was recalled by petitioners for transfer to another vessel. The transfer did not materialize for reasons known only to the petitioners. Hence, according to private respondent, the Court of Appeals erred when it sustained the ruling of the NLRC affirming the judgment of the Labor Arbiter that Section 10[31] of Republic Act No. 8042 applies to him. Private respondent submits that said ruling of the appellate court is contrary to prevailing jurisprudence, i.e., that the award of claims for unpaid salaries should cover the entire unexpired portion of the employment contract, which is four months, and not just three months.
In Marsaman Manning Agency, Inc. vs. NLRC,[32] involving Section 10 of Republic Act No. 8042, we held:
[W]e cannot subscribe to the view that private respondent is entitled to three (3) months salary only. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words “for every year of the unexpired term” which follows the words “salaries x x x for three months.” To follow petitioners’ thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the lawmaking body is presumed to know the meaning of the words employed in the statute and to have used them advisedly. Ut res magis valeat quam pereat.[33]
It is not disputed that private respondent’s employment contract in the instant case was for six (6) months. Hence, we see no reason to disregard the ruling in Marsaman that private respondent should be paid his salaries for the unexpired portion of his employment contract.[34]
WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals dated June 29, 2000 in CA-G.R. SP No. 53079, and the resolution of the appellate court dated August 3, 2000, denying petitioners motion for reconsideration, are AFFIRMED with MODIFICATION. Petitioners Skippers United Pacific, Inc., and Skippers Maritime Services, Ltd., are hereby ORDERED (1) to pay jointly and severally the heirs of deceased private respondent Manuel V. Mira – namely his surviving spouse, Delfa F. Mira, and their child, Anne Marie F. Mira – his salaries for four (4) months, representing the unexpired portion of his employment contract, at the rate US$1,900.00 monthly at its peso equivalent at the time of actual payment, and (2) reimburse to said heirs the private respondent’s placement fee with twelve percent (12%) interest per annum conformably with Section 10 of Republic Act No. 8042, as well as (3) attorney’s fees of ten percent (10%) of the total monetary award. Costs against petitioners.
SO ORDERED.
G.R. No. 109808 March 1, 1995
ESALYN CHAVEZ, petitioner, vs.HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA, HON. DOMINGO H. ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM PROMOTIONS PLACEMENT CORPORATION, JOSE A. AZUCENA, JR., and TIMES SURETY & INSURANCE COMPANY, INC. respondents.
PUNO, J.:
One of the anguished cries in our society today is that while our laws appear to protect the poor, their interpretation is sometimes anti-poor. In the case at bench, petitioner, a poor, uncounselled entertainment dancer signed a contract with her Japanese employer calling for a monthly salary of One Thousand Five Hundred U.S. Dollars (US$1,500) but later had to sign an immoral side agreement reducing her salary below the minimum standard set by the POEA. Petitioner invoked the law to collect her salary differentials, but incredibly found public respondent straining the seams of our law to disfavor her. There is no greater disappointment to the poor like petitioner than to discover the ugly reality behind the beautiful rhetoric of laws. We will not allow this travesty.
This is a petition for certiorari to review the Decision of the National Labor Relations Commission (NLRC), 1 dated December 29, 1992, which affirmed the Decision of public respondent Philippine Overseas Employment Agency (POEA) Administrator Jose N. Sarmiento, dated February 17, 1992, dismissing petitioner's complaint for unpaid salaries amounting to Six Thousand Dollars (US$6,000.00).
The facts are undisputed.
On December 1, 1988, petitioner, an entertainment dancer, entered into a standard employment contract for overseas Filipino artists and entertainers with Planning Japan Co., Ltd., 2 through its Philippine representative, private respondent Centrum Placement & Promotions Corporation. The contract had a duration of two (2) to six (6) months, and petitioner was to be paid a monthly compensation of One Thousand Five Hundred Dollars (US$1,5000.00). On December 5, 1888, the POEA approved the contract. Subsequently, petitioner executed the following side agreement with her Japanese employer through her local manager, Jaz Talents Promotion:
Date: Dec. 10, 1988
SUBJECT: Salary DeductionMANAGERIAL COMMISSION
DATE OF DEPARTURE: _________________
ATTENTION: MR. IWATA
I, ESALYN CHAVEZ, DANCER, do hereby with my own free will and voluntarily have the honor to authorize your good office to please deduct the amount of TWO HUNDRED FIFTY DOLLARS ($250) from my contracted monthly salary of SEVEN HUNDRED FIFTY DOLLARS ($750) as monthly commission for my Manager, Mr. Jose A. Azucena, Jr.
That, my monthly salary (net) is FIVE HUNDRED DOLLARS ($500).
(sgd. by petitioner) 3
On December 16, 1988, petitioner left for Osaka, Japan, where she worked for six (6) months, until June 10, 1989. She came back to the Philippines on June 14, 1989.
Petitioner instituted the case at bench for underpayment of wages with the POEA on February 21, 1991. She prayed for the payment of Six Thousand U.S. Dollars (US$6,000.00), representing the unpaid portion of her basic salary for six months. Charged in the case were private respondent Centrum Promotions and Placement Corporation, the Philippine representative of Planning Japan, Co., Inc., its insurer, Times Surety and Insurance Co., Inc., and Jaz Talents Promotion.
The complaint was dismissed by public respondent POEA Administrator on February 17, 1992. He ratiocinated, inter alia:
. . . Apparently and from all indications, complainant (referring to petitioner herein) was satisfied and did not have any complaint (about) anything regarding her employment in Japan until after almost two (2) years (when) she filed the instant complaint on February 21, 1991. The records show that after signing the Standard Employment Contract on December 1, 1988, she entered into a side agreement with the Japanese employer thru her local manager, Jaz Talents Promotion consenting to a monthly salary of US$750.00 which she affirmed during the conference of May 21, 1991. Respondent agency had no knowledge nor participation in the said agreement such that it could not be faulted for violation of the Standard Employment Contract regarding the stipulated salary. We cannot take cognizance of such violation when one of the principal party (sic) thereto opted to receive a salary different from what has been stipulated in their contract, especially so if the contracting party did not consent/participate in such arrangement. Complainant (petitioner) cannot now demand from respondent agency to pay her the salary based (on) the processed Employment Contract for she is now considered in bad faith and hence, estopped from claiming thereto thru her own act of consenting and agreeing to receive a salary not in accordance with her contract of employment. Moreover, her self-imposed silence for a long period of time worked to her own disadvantage as she allowed laches to prevail which barred respondent from doing something at the outset. Normally, if a person's right (is) violated, she/he would immediately react to protect her/his rights which is not true in the case at bar.
The term laches has been defined as one's negligence or failure to assert his right in due time or within reasonable time from the accrual of his cause of action, thus, leading another party to believe that there is nothing wrong with his own claim. This resulted in placing the negligent party in estoppel to
assert or enforce his right. . . . Likewise, the Supreme Court in one case held that not only is inaction within reasonable time to enforce a right the basic premise that underlies a valid defense of laches but such inaction evinces implied consent or acquiescence to the violation of the right . . .
Under the prevailing circumstances of this case, it is outside the regulatory powers of the Administration to rule on the liability of respondent Jaz Talents Promotions, if any, (it) not being a licensed private agency but a promotion which trains entertainers for abroad.
xxx xxx xxx
(Citations omitted.)
On appeal, the NLRC upheld the Decision, thus:
We fail to see any conspiracy that the complainant (petitioner herein) imputes to the respondents. She has, to put it bluntly, not established and/or laid the basis for Us to arrive at a conclusion that the respondents have been and should be held liable for her claims.
The way We see it, the records do not at all indicate any connection between respondents Centrum Promotion & Placement Corporation and Jaz Talents Promotion.
There is, therefore, no merit in the appeal. Hence, We affirmed. 4
Dissatisfied with the NLRC's Decision, petitioner instituted the present petition, alleging that public respondents committed grave abuse of discretion in finding: that she is guilty of laches; that she entered into a side contract on December 10, 1988 for the reduction of her basic salary to Seven Hundred Fifty U.S. Dollars (US$750.00) which superseded, nullified and invalidated the standard employment contract she entered into on December 1, 1988; and that Planning Japan Co., Ltd. and private respondents are not solidarily liable to her for Six Thousand US Dollars (US$6,000.00) in unpaid wages. 5
The petition is meritorious.
Firstly, we hold that the managerial commission agreement executed by petitioner to authorize her Japanese Employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00) from her monthly basic salary is void because it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract of December 1, 1988 approved by the POEA with the following stipulation appended thereto:
It is understood that the terms and conditions stated in this Employment Contract are in conformance with the Standard Employment Contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or changes made in any part of this contract without prior approval by the POEA shall be null and void; 6 (Emphasis supplied.)
The stipulation is in line with the provisions of Rule II, Book V and Section 2(f), Rule I, Book VI of the 1991 Rules and Regulations Governing Overseas Employment, thus:
Book V, Rule II
Sec. 1. Employment Standards. The Administration shall determine, formulate and review employment standards in accordance with the market development and welfare objectives of the overseas employment program and the prevailing market conditions.
Sec. 2. Minimum Provisions for Contract. The following shall be considered the minimum requirements for contracts of employment:
a. Guaranteed wages for regular working hours and overtime pay for services rendered beyond regular working hours in accordance with the standards established by the Administration;
xxx xxx xxx
Sec. 3. Standard Employment Contract. The administration shall undertake development and/or periodic review of region, country and skills specific employment contracts for landbased workers and conduct regular review of standard employment contracts (SEC) for seafarers. These contracts shall provide for minimum employment standards herein enumerated under Section 2, of this Rule and shall recognize the prevailing labor and social legislations at the site of employment and international conventions. The SEC shall set the minimum terms and conditions of employment. All employers and principals shall adopt the SEC in connection with the hiring of workers without prejudice to their adoption of other terms and conditions of employment over and above the minimum standards of the Administration. (Emphasis supplied.)
and
BOOK VI, RULE I
Sec. 2. Grounds for suspension/cancellation of license.
xxx xxx xxx
f. Substituting or altering employment contracts and other documents approved and verified by the Administration from the time of actual signing thereof by the parties up to and including the period of expiration of the same without the Administration's approval.
xxx xxx xxx
(Emphasis supplied.)
Clearly, the basic salary of One Thousand Five Hundred U.S. Dollars (US$1,500.00) guaranteed to petitioner under the parties' standard employment contract is in accordance with the minimum employment standards with respect to wages set by the POEA, Thus, the side agreement which reduced petitioner's basic wage to Seven Hundred Fifty U.S. Dollars (US$750.00) is null and void for violating the POEA's minimum employment standards, and for not having been approved by the POEA. Indeed, this side agreement is a scheme all too frequently resorted to by unscrupulous employers against our helpless overseas workers who are compelled to agree to satisfy their basic economic needs.
Secondly. The doctrine of laches or "stale demands"' cannot be applied to petitioner. Laches has been defined as the failure or neglect for an unreasonable and unexplained length time to do that which, by exercising due diligence, could or should have been done earlier, 7 thus giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it. 8 It is not concerned with mere lapse of time; the fact of delay, standing alone, is insufficient to constitute laches. 9
The doctrine of laches is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims, and is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted. 10 There is no absolute rule as to what constitutes laches; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court, and since it is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. 11
In the case at bench, petitioner filed her claim well within the three-year prescriptive period for the filing of money claims set forth in Article 291 of the Labor Code. 12 For this reason, we hold the doctrine of laches inapplicable to petitioner. As we ruled in Imperial Victory Shipping Agency v. NLRC, 200 SCRA 178 (1991):
. . . Laches is a doctrine in equity while prescription is based on law. Our courts are basically courts of law not courts of equity. Thus, laches cannot be invoked to resist the enforcement of an existing legal right. We have ruled in Arsenal v. Intermediate Appellate Court . . . that it is a long standing principle that equity follows the law. Courts exercising equity jurisdiction are bound by rules of law and have no arbitrary discretion to disregard them. In Zabat, Jr. v. Court of Appeals . . ., this Court was more emphatic upholding the rules of procedure. We said therein:
As for equity, which has been aptly described as a "justice outside legality," this applied only in the absence of, and never against, statutory law or, as in this case, judicial rules of procedure. Aequetas nunguam contravenit legis. The pertinent positive rules being present here, they should pre-empt and prevail over all abstract arguments based only on equity.
Thus, where the claim was filed within the three-year statutory period, recovery therefore cannot be barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of time limited for the commencement of actions at law.
xxx xxx xxx
(Emphasis supplied. Citations omitted.)
Thirdly, private respondents Centrum and Times as well as Planning Japan Co., Ltd. — the agency's foreign principal — are solidarily liable to petitioner for her unpaid wages. This is in accordance with stipulation 13.7 of the parties' standard employment contract which provides:
13.7. The Employer (in this case, Planning Japan Co., Ltd. ) and its locally (sic) agent/promoter/representative (private respondent Centrum Promotions & Placement Corporation) shall be jointly and severally responsible for the proper implementation of the terms and conditions in this Contract. 13 (Emphasis supplied.)
This solidary liability also arises from the provisions of Section 10(a)(2), Rule V, Book I of the Omnibus Rules Implementing the Labor Code, as amended, thus:
Sec. 10. Requirement before recruitment. — Before recruiting any worker, the private employment agency shall submit to the Bureau the following documents:
a) A formal appointment or agency contract executed by a foreign-based employer in favor of the license holder to recruit and hire personnel for the former . . . . Such formal appointment or recruitment agreement shall contain the following provisions, among others:
xxx xxx xxx
2. Power of the agency to sue and be sued jointly and solidarily with the principal or foreign based employer for any of the violations of the recruitment agreement and the contracts of employment.
xxx xxx xxx
(Emphasis supplied.)
Our overseas workers constitute an exploited class. Most of them come from the poorest sector of our society. They are thoroughly disadvantaged. Their profile shows they live in suffocating slums, trapped in an environment of crime. Hardly literate and in ill health, their only hope lies in jobs they can hardly find in our country. Their unfortunate circumstance makes them easy prey to avaricious employers. They will climb mountains, cross the seas, endure slave treatment in foreign lands just to survive. Out of despondence, they will work under sub-human conditions and accept salaries below the minimum. The least we can do is to protect them with our laws in our land. Regretfully, respondent public officials who should sympathize with the working class appear to have a different orientation.
IN VIEW WHEREOF, the petition is GRANTED. The Decisions of respondent POEA Administrator and NLRC Commissioners in POEA Case No. Adj. 91-02-199 (ER), respectively dated February 17 and December 29, 1992, and the Resolution of the NLRC, dated March 23, 1993, are REVERSED and SET ASIDE. Private respondents are held jointly and severally liable to petitioner for the payment of SIX THOUSAND US DOLLARS (US$6,000.00) in unpaid wages. Costs against private respondents.
SO ORDERED.
ON WAGES
Republic of the PhilippinesSUPREME COURT
Manila
SECOND DIVISION
G.R. No. 155034 May 22, 2008
PEOPLE OF THE PHILIPPINES, appellee, vs.FRANCISCO BLANCAFLOR, appellant.
D E C I S I O N
TINGA, J.:
Assailed in this Petition for Review1 is the Decision2 of the Court of Appeals3 in CA-G.R. SP No. 66449 deleting the award of salary differential and attorney’s fees to petitioner Virgilio Sapio, as well as the Resolution4 denying his motion for reconsideration.
The controversy started with a complaint filed by petitioner against Undaloc Construction and/or Engineer Cirilo Undaloc for illegal dismissal, underpayment of wages and nonpayment of statutory benefits. Respondent Undaloc Construction, a single proprietorship owned by Cirilo Undaloc, is engaged in road construction business in Cebu City.
Petitioner had been employed as watchman from 1 May 1995 to 30 May 1998 when he
was terminated on the ground that the project he was assigned to was already finished, he being allegedly a project employee. Petitioner asserted he was a regular employee having been engaged to perform works which are "usually necessary or desirable" in respondents’ business. He claimed that from 1 May to 31 August 1995 and from 1 September to 31 December 1995, his daily wage rate was only P80.00 and P90.00, respectively, instead of P121.87 as mandated by Wage Order No. ROVII-03. From 1 March 1996 to 30 May 1998, his daily rate was P105.00. He further alleged that he was made to sign two payroll sheets, the first bearing the actual amount he received wherein his signature was affixed to the last column opposite his name, and the second containing only his name and signature. To buttress this allegation, petitioner presented the payroll sheet covering the period from 4 to 10 December 1995 in which the entries were written in pencil. He also averred that his salary from 18 to 30 May 1998 was withheld by respondents.5
For its part, respondent Cirilo Undaloc maintained that petitioner was hired as a project employee on 1 May 1995 and was assigned as watchman from one project to another until the termination of the project on 30 May 1998.6 Refuting the claim of underpayment, respondent presented the payroll sheets from 2 September to 8 December 1996, 26 May to 15 June 1997, and 12 January to 31 May 1998.7
On 12 July 1999, the Labor Arbiter8 rendered a decision the dispositive portion of which reads:
WHEREFORE, in the [sic] light of the foregoing, judgment is rendered finding complainant to be a project employee and his termination was for an authorized cause. However, respondent is found liable to pay complainant’s salary of P2,648.45 and 13th month pay of P2,489.00. Respondent is also found liable to pay complainant’s salary differential in the amount of P24,902.88. Attorney’s fee of P3,000.00 is also awarded.
All other claims are dismissed for lack of merit.9
Respondents appealed the award of salary differential to the National Labor Relations Commission (NLRC). In a Decision10 dated 28 August 2000, the NLRC sustained the findings of the Labor Arbiter.
Respondents elevated the case to the Court of Appeals which deleted the award of salary differential and attorney’s fees.
Thus, this petition for review.
Petitioner raises two grounds, one procedural and the other substantive. On the procedural aspect, petitioner contends that the appellate court erred in failing to dismiss respondent’s petition for certiorari brought before it on the ground that respondents failed to attach certified true copies of the NLRC’s decision and resolution denying the motion for reconsideration.11
In his Comment on the Petition for Certiorari with Prayer for Temporary Restraining and/or Preliminary Injunction12 filed with the Court of Appeals on 22 November 2001, petitioner did not raise this procedural issue. Neither did he do so when he moved for
reconsideration of the 8 May 2002 Decision of the Court of Appeals. It is only now before this Court that petitioner proffered the same. This belated submission spells doom for petitioner. More fundamentally, an examination of the Court of Appeals rollo belies petitioner as it confirms that the alleged missing documents were in fact attached to the petition. 13
That petitioner was a project employee became a non-issue beginning with the decision of the Labor Arbiter. Contested still is his entitlement to salary differential, apart from attorney’s fees.
Petitioner avers that he was paid a daily salary way below the minimum wage provided for by law.14 His claim of salary differential represents the difference between the daily wage he actually received and the statutory minimum wage, which he presented as follows:
Actual Daily Wage Received (for 8 hours worked)
Minimum Daily Wage Provided by Law (for 8 hours
worked)5-1-95 to 8-31-95Place of Assignment:
P80.00 plus 3 hrs. OTM.J. Cuenco-Imus Road Link
P121.87
9-1-95 to 12-31-95Place of Assignment:
P90.00 plus 3 hrs. OT P121.87
1-1-96 to 2-28-96Place of Assignment:
P90.00 plus 3 hrs. OT P131.00
3-1-96 to 6-30-96Place of Assignment:
P105.00 plus 3 hrs. OT P131.00
7-1-96 to 9-30-96Place of Assignment:
P105.00 plus 3 hrs. OT P136.00
10-1-96 to 3-14-97Place of Assignment:
P105.00 plus 3 hrs. OT P141.00
3-15-97 to 6-30-97Place of Assignment:
P105.00 plus 3 hrs. OT P141.00
7-1-97 to 9-30-97Place of Assignment:
P105.00 plus 3 hrs. OT P150.00
10-1-97 to 3-31-98Place of Assignment:
P105.00 plus 3 hrs. OT P150.00
4-1-98 to 5-17-98Place of Assignment:
P105.00 plus 3 hrs. OT P155.00
5-18-98 to 5-30-98Place of Assignment:
P105.00 plus 3 hrs. OT P160.00
To counter petitioner’s assertions, respondents submitted typewritten and signed payroll sheets from 2 September to 8 December 1996, from 26 May to 15 June 1997, and from 12 January to 31 May 1998.15 These payroll sheets clearly indicate that petitioner did receive a daily salary of P141.00.
In turn, petitioner presented the December 1995 payroll sheet written in pencil16 in tandem with the assertion that he, together with his co-employees, was required to sign two sets of payroll sheets in different colors: white, which bears the actual amount he received with his signature affixed in the last column opposite his name, and yellow, where only his name appears thereon with his signature also affixed in the last column opposite his
name.17 In the December 1995 payroll sheet, petitioner appears to have received P90.00 only as his daily salary but he did not sign the same.
Banking on the fact that the December 1995 payroll sheet was written in pencil, the Labor Arbiter concluded that the entries were susceptible to change or erasure and that that susceptibility in turn rendered the other payroll sheets though typewritten less credible. Thus:
x x x Complainant’s allegation that he was made to sign two (2) payrolls, the first page bears the actual amount he received when he affixed his signature in the last column and the original with entries written in pencil is admitted by the respondent that it did so. When respondent had his payrolls prepared in pencil, the tendency is that the entries therein will be erased and changed them so that it would appear that the salaries of the workers are in conformity with the law.
The explanation given by the respondent through the affidavit of Jessica Labang that the payrolls were first written in pencil because of the numerous employees to be paid each Saturday, is not acceptable. The efforts done in preparing the payroll in pencil is practically the same if it was done in ballpen or through typewriters. Obviously, the purpose is to circumvent the law. When payrolls are prepared in pencil, it is so easy for the employer to alter the amounts actually paid to the workers and make it appear that the amounts paid to the workers are in accord with law. The probative value of the payrolls submitted by the respondent becomes questionable, thus, cannot be given weight. It is most likely that the entries in the payrolls are no longer the same entries when complainant signed them. Complainant is therefore entitled to salary differential as complainant’s salary was only P105.00. x x x18
Thereupon, the Labor Arbiter proceeded to grant petitioner’s salary differential to the tune of P24,902.88.
The Court of Appeals did not subscribe to the common findings of the Labor Arbiter and the NLRC. The appellate court pointed out that allegations of fraud in the preparation of payroll sheets must be substantiated by evidence and not by mere suspicions or conjectures, viz:
As a general rule, factual findings and conclusions drawn by the National Labor Relations Commission are accorded great weight and respect upon appeal, even finality, as long as they are supported by substantial evidence. Substantial evidence is more than a mere scintilla. It means such relevant evidence that a reasonable mind would accept as sufficient to support a conclusion. A suspicion or belief no matter how sincerely felt cannot be a substitute for factual findings carefully established through an orderly procedure.
The Labor Arbiter merely surmised and presumed that petitioners had the tendency to alter the entries in the payroll. Albeit the petitioner admitted that the payrolls were initially made in pencil, the same does not, and must not be presumed as groundwork for alteration. We find nothing in the proceedings, as well as in the pleadings submitted, to sustain the Labor Arbiter’s findings of the alleged "tendency" to alter the entries.
It is elementary in this jurisdiction that whoever alleges fraud or mistake affecting a transaction must substantiate his allegation, since it is presumed that a person takes ordinary care of his concerns and private transactions have been fair and regular. Persons are presumed to have taken care of their business.
Absent any indication sufficient enough to support a conclusion, we cannot uphold the findings of the Labor Arbiter and the NLRC.19
The conclusion of the Labor Arbiter that entries in the December 1995 payroll sheet could have been altered is utterly baseless. The claim that the December 1995 payroll sheet was written in pencil and was thus rendered it prone to alterations or erasures is clearly non sequitur. The same is true with respect to the typewritten payroll sheets. In fact, neither the Labor Arbiter nor the NLRC found any alteration or erasure or traces thereat, whether on the pencil-written or typewritten payroll sheets. Indeed, the most minute examination will not reveal any tampering. Furthermore, if there is any adverse conclusion as regards the December 1995 payroll sheet, it must be confined only to it and cannot be applied to the typewritten payroll sheets.
Moreover, absent any evidence to the contrary, good faith must be presumed in this case. Entries in the payroll, being entries in the course of business, enjoy the presumption of regularity under Rule 130, Section 43 of the Rules of Court. Hence, while as a general rule, the burden of proving payment of monetary claims rests on the employer,20 when fraud is alleged in the preparation of the payroll, the burden of evidence shifts to the employee and it is incumbent upon him to adduce clear and convincing evidence in support of his claim.21Unfortunately, petitioner’s bare assertions of fraud do not suffice to overcome the disputable presumption of regularity.
While we adhere to the position of the appellate court that the "tendency" to alter the entries in the payrolls was not substantiated, we cannot however subscribe to the total deletion of the award of salary differential and attorney’s fees, as it so ruled.
The Labor Arbiter granted a salary differential of P24,902.88.22
The Labor Arbiter erred in his computation. He fixed the daily wage rate actually received by petitioner at P105.0023 without taking into consideration the P141.00 rate indicated in the typewritten payroll sheets submitted by respondents. Moreover, the Labor Arbiter misapplied the wage orders24 when he wrongly categorized respondent as falling within the first category. Based on the stipulated number of employees and audited financial statements,25 respondents should have been covered by the second category.
To avoid further delay in the disposition of this case which is not in consonance with the objective of speedy justice, we have to adjudge the rightful computation of the salary differential based on the applicable wage orders. After all, the supporting records are complete.
This Court finds that from 1 January to 30 August 1996 and 1 July 1997 to 31 May 1998, petitioner had received a wage less than the minimum mandated by law. Therefore, he is entitled to a salary differential. For the periods from 30 May to 31 December 1995 and 2 September 1996 to 30 June 1997, petitioner had received the correct wages. To illustrate:
Wage actually received
Statutory Minimum
wage
Differential
30 May – 31 December. 1995 P105.00 P99.0026 01 January – 30 June 1996 (156 days) P105.00 P125.0027 P20.00/day or1 July – 30 August 1996 (52 days) P105.00 P130.0028 P25.00/day or2 – 30 September 1996 P141.0029 P130.0030 01 October 1996- 15 March 1997 P141.00 P135.0031 016 March – 30 June 1997 P141.00 P139.0032 01 July – 30 September 1997 (78 days) P141.00 P144.0033 P3.00/day or1 October 1997- 31 March 1998 (156 days) P141.00 P149.0034 P8.00/day or1 April – 31 May 1998 (52 days) P141.00 P154.0035 P13.00/day or
The total salary differential that petitioner is lawfully entitled to amounts to P6,578.00 However, pursuant to Section 12 of Republic Act (R.A.) No. 6727, as amended by R.A. No. 8188. Respondents are required to pay double the amount owed to petitioner, bringing their total liability to P13,156.00.
Section 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine not less than Twenty-five thousand pesos (P25,000.00) nor more than One hundred thousand pesos (P100,000.00) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court: Provided, That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law.
The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable under this Act.
If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including, but not limited to, the president, vice president, chief executive officer, general manager, managing director or partner. (Emphasis supplied)
The award of attorney’s fees is warranted under the circumstances of this case. Under Article 2208 of the New Civil Code, attorney's fees can be recovered in actions for the recovery of wages of laborers and actions for indemnity under employer's liability laws 36 but shall not exceed 10% of the amount awarded.37 The fees may be deducted from the total amount due the winning party.
WHEREFORE, the petition is PARTIALLY GRANTED. Petitioner is awarded the salary differential in the reduced amount of P13,156.00 and respondents are directed to pay the same, as well as ten percent (10%) of the award as attorney's fees.
SO ORDERED
ON VISITORIAL POWER OF REGL DIRECTOR
G.R. No. 82805 June 29, 1989
BRIAD AGRO DEVELOPMENT CORPORATION, petitioner, vs.HONORABLE DIONISIO DELA SERNA, IN HIS CAPACITY AS UNDERSECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU LOCAL CHAPTER NO. R01-005, ALFRED DELA CRUZ, ET AL., * respondents.
G.R. No. 83225 June 29, 1989
L.M. CAMUS ENGINEERING CORPORATION, petitioner, vs.THE HON. SECRETARY OF LABOR, THE HON. UNDERSECRETARY DIONISIO C. DELA SERNA, VICTORIANO ATIENZA, JR., JOSNERI DIOCARES, REYNALDO PAREÑO, WINNIE ORTOSIT, NELEN SEVERINO, MARLON RESONABLE, ROLANDO ALDANESE, ALICIO SEBIAO, CARLINTO PAQUERO, JULIAN GOSONA, ROLANDO CASIMERO, ALFREDO DE LEON, VICTORIANO MACHANG, ARMANDO SALAZAR, ANITO DE JESUS, FRANCISCO DELGADO, PAQUITO PITULAN, DANILO CENTINO, ROMEO DELOS SANTOS, RUBEN LARA, ROGELIO MAGHUYOR, BEN ABDANI, RUDY PALASUGLO, WILLIAM BALDADO, ROMEO LABIGAN, TANNY JANOLO and EDGAR A. OREZ, respondents.
Corazon R. Paulino for petitioner in G.R. No. 82805.
Raoul B. Agrava & Associates for petitioner in G.R. No. 83225.
Lar, Comia, Manala & Associates for respondents in G.R. No. 82805.
Jesus Balicanta for respondents in G.R. No. 83225.
SARMIENTO, J.:
Submitted for decision are these two consolidated cases, both in the nature of challenges to the jurisdiction of the various Regional Directors of the Department of Labor and Employment to act on money claims. 1
ANTECEDENT FACTS AND PROCEEDINGS.
I. G.R. No. 82805.
This case originated from a complaint filed on February 21, 1987 to recover unpaid wages and wage supplements filed with Regional Director Filomeno Balbin of the Labor Department's Regional Office No. I sitting in San Fernando, La Union. The facts appear in his order:
This case arose out of a complaint filed by TRADE UNION OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU Local Chapter No. ROI-005, against respondent agricultural firm, for alleged underpayment/non-payment of minimum wage, ECOLA, overtime pay, legal holiday pay, night shift differential pay, 13th month pay and service incentive leave pay.
Acting on this complaint and pursuant to a corresponding authority issued, a routine inspection was conducted on subject establishment by Labor Standards and Welfare Officer Dalo T. Basa on May 20, 1987, but the same did not materialize since no records were presented for examination, as the same are allegedly all being kept at the firm's Manila Office. Nevertheless, LSWO Basa advised the firm's Officer-in-Charge, Mr. Virgilio Villa-Real to present the said records for verification at our Dagupan Labor Office. However, to date and despite the fact that respondent has been duly notified to present the same, no records were presented for verification.
xxx xxx xxx
Respondent's repeated failure to appear during the scheduled conferences despite due notices, is construed as a waiver of its right to adduce evidence to controvert the above-noted claims. Likewise, its failure to present the required employment records is presumed to mean that the presentation of the same will be against the interest of the respondent and said records will prove the claims of herein complainants.
Based on the records on hand, the workers/members of the complaining Union have been found to be underpaid of their wages and unpaid of their ECOLA, holiday pay, service incentive leave pay and 13th month pay from January 1984 to April 1987. The claims for non-payment of overtime pay and night shift differential pay have not been clearly shown and proven, hence, are not included in the computed deficiencies. 2
Director Balbin then held against Briad Agro Development Corporation, and disposed as follows:
WHEREFORE, PREMISES CONSIDERED, and considering further that said deficiencies form part of the legal remuneration of herein employees, respondent is hereby ordered to satisfy the a and pay the total amount of FIVE MILLION THREE HUNDRED SIXTY NINE THOUSAND NINE HUNDRED NINE PESOS and 30/100 (P5,369,909.30) in the manner above-
stated, within fifteen (15) days from receipt hereof, and to submit proof of payment within the same period. Otherwise, a Writ of Execution win be issued to the proper sheriffs to enforce this Order. The claims for non-payment of overtime pay and night shift differential pay, are hereby DISMISSED for lack of merit.
Let the parties be notified accordingly.
SO ORDERED. 3
In its appeal to the National Labor Relations Commission, Briad Agro Development contended that the Regional Director has no authority to entertain pecuniary claims of workers, following this Court's ruling in Zambales Base Metals, Inc. v. Minister of Labor, 4 in which we held that money claims are the exclusive domain of the labor arbiters. The National Labor Relations Commission dismissed the appeal on the strength of Executive Order No. 111, 5 amending Article 128(b) of the Labor Code, in which jurisdiction to so act on monetary claims was supposedly granted to regional directors. In its petition to this Court, Briad Agro Development reiterates its jurisdictional challenge.
II. G.R. No. 83225.
The money award in this case, as and for unpaid emergency cost of living allowances, and thirteenth-month and holiday pays, was granted originally in favor of seventy-four employees of L.M. Camus Engineering following an inspection by Regional Director David Kong of the Department of Labor's Regional Office No. IX, Zamboanga City. In his order, issued on May 16, 1983, Director Kong condemned the corporation to pay a total of P146,181.20. Forty-seven employees were, however, later dropped from the case following an amicable settlement with the petitioner. The facts are as follows:
Records disclosed that on the basis of the complaint filed by the herein complainants, an inspection was conducted in respondent's premises but both the project manager and the project engineer were out of town, except the internal auditor who informed the Labor Regulations Officer (now known as Labor Standards and Welfare Officer) that he had no authority to produce the employment records needed; that the internal auditor promised to inform the project manager and the project engineer about the required employment records but no information was received since then. Consequently, a subpoena duces tecum was issued by the Regional Director on August 20, 1982, addressed to the Manager of respondent company ordering the latter to submit the pertinent employment records before the Field Service Division, Regional Office No. IX, Zamboanga City on August 25, 1982 at 9:30 a.m. Notwithstanding receipt of such subpoena duces tecum and the follow-up letter to the said Manager of respondent, plus another subpoena addressed to respondent's project manager, respondent failed to submit the required pertinent records. Consequently, on October 25, 1982 the Regional Director issued the Order in dispute, copy of which was received by respondent on November 1982.
On November 18, 1982, counsel for respondent, Atty. Nicolito L. Bustos, filed a motion for extension of time to file his motion to set aside and/or reconsider Order dated 25 October 1982.
On November 24, 1982, respondent filed a Motion to Set Aside and/or Reconsider the Order dated 25 October 1982 on the following grounds namely:
1. That the Order dated 25 October 1982 was issued without notice and hearing.
2. That the questioned Order is not supported by the facts and the law of the case.
Respondent argues that the awards are void because the composition of each award was not indicated; that complainants were either its employees or that of its subcontractor Carlos Balinagay; that of the 74 complainants only three, namely: Julian Gajana, Jose Casimora and Jose Roxas failed to execute quitclaims; and that for these reasons the disputed Order may be validly set aside and/or reconsidered.
Complainants, thru counsel, filed their opposition to the aforesaid Motion to Set. Aside Order dated 25 October 1982. They maintain that the Order in question was issued in the valid exercise of the visitorial and enforcement power of the Minister (now Secretary) of Labor and Employment, thru the Regional Director as his duly authorized representative; that before the said Order was issued, respondent or its representative was directed time and again by the Regional Director to submit the pertinent employment records of complainants but respondent chose to ignore the said directives; that during the hearing of respondent's motion on November 25, 1982 each complainant testified that no quitclaim was ever executed by them, although they remembered having signed a certain document which respondent thru its representative made them believe to be simply an evidence of payment of salary and not a quitclaim.
On May 16, 1983, the Regional Director issued an Order denying respondent's motion.
On May 27, 1983, a Motion to Dismiss was filed alleging that "the parties have agreed to settle amicably the individual claims of the various complainants who are listed in the order of 25 October 1982."
Respondent likewise moved for the reconsideration of the May 16, 1983-Order on the ground that the Regional Office never had any jurisdiction over the nature of the dispute. 6
The petitioner then appealed to the Office of the Secretary of Labor, an appeal that did not prosper. On behalf of the Secretary, Undersecretary Dionisio de la Serna affirmed Director Kong's award, as modified.
The petitioner moved for reconsideration, impugning the authority of the Regional Director. Undersecretary Dionisio dela Serna denied reconsideration and sustained the Regional Director's jurisdiction.
The petitioner, in this petition, primarily questions Regional Directors' jurisdiction to pass upon money claims.
III. The cases before the Court; the question of jurisdiction.
The petitioners in these two consolidated cases submit that the jurisdiction over money claims is exclusive on the Labor Arbiters of the National Labor Relations Commission, by force of Article 217 of the Labor Code:
ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours of work and other terms and conditions of employment;
3. All money claims of workers, including those based on non- payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits.
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. 7
The Solicitor General, on the other hand, relies on the provisions of Executive Order No. 111, amending, among other things, Article 128, paragraph (b), of the Labor Code:
(b) 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 representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation 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 orders except in case where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. 8
He further submits that, as a consequence, Zambales Base Metals, Inc. v. Minister of Labor is no longer controlling (although in his comment in G.R. No. 83225, he maintains that it is still in force and effect. 9 )
IV. The Court's decision.
The Court rules that, in view of the promulgation of Executive Order No. 111, Zambales Base Metals v. Minister of Labor is no longer good law. 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 subject of the amendment. This is clear from the proviso: "The provisions of Article 217 of this Code to the contrary notwithstanding . . ." Plainly, the amendment was meant to make both the Secretary of Labor (or the various Regional Directors) and the Labor Arbiters share jurisdiction.
Curative statutes have long been considered valid in this jurisdiction. Their purpose is to give validity to acts done that would have been invalid under existing laws, as if existing laws have been complied with. They are, however, subject to exceptions. For one, they must not be against the Constitution and for another, they cannot impair vested rights or the obligation of contracts. 10 It has not been shown in this case that these exceptions apply.
That Executive Order No. 111 intended to. make the jurisdiction to pass upon money claims, among the other cases mentioned by Article 217 of the Labor Code, concurrent between the Secretary of Labor (or Regional Directors) and the Labor Arbiters is clear from its perambulatory clauses, to wit:
WHEREAS, the welfare of the workers is a primary concern of the government.
WHEREAS, it is necessary to amend or repeal provisions of laws that repress the rights of workers and of their trade unions. 11
Executive Order No. 111, it is obvious, was enacted to widen workers' access to the Government for redress of grievances.
The language of the provision is indeed broad enough to encompass cases over which Labor Arbiters had hitherto exercised exclusive jurisdiction. We quote, in part:
... the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation ... 12
We can no longer accept the contention that the Regional Directors' singular concern, under the said provision, is to ensure compliance with labor standards, such as industrial safety and similar concerns. In Zambales Base Metals, it was our reading of Section 128(b) of the Code that the aforesaid labor officials' authority stopped there, 13 but we have, in view of the amendment under Executive Order No. 111, since taken a second look. As we said, the Executive Order vests in Regional Directors jurisdiction, "[t]he provisions of Article 217 of this Code to the contrary notwithstanding", it would have rendered such a proviso-and the amendment itself-useless to say that they (Regional Directors) retained the self-same restricted powers, despite such an amendment. It is fundamental that a statute is to be read in a manner that would breathe life into it, rather than
defeat it. At any rate, and as we have observed, the language of Executive Order No. 111 is comprehensive enough to extend to the resolution of employer-employee controversies covered by Article 217.
It is interesting to note that the Government itself (through the Solicitor General) considers Zambales Base Metals v. Minister of Labor as Executive Order No. 11l's very raison d'etre. 14 If this is so, the intent of the legislator to grant Regional Directors the jurisdiction now impugned cannot any more be clearer.
Being a curative statute, the Executive Order in question has retrospective effect. In Garcia v. Martinez, 15 we held that legislation "which is in the nature of a curative statute" 16 has "retrospective application to a pending proceeding." 17 Hence, these cases should be decided in the light of the presidential issuance in question, although they might have come pending further proceedings. Be that as it may, the records show that G.R. No. 82805 had come about during the effectivity of Executive Order No. 111. (In G.R. No. 82805, the complaint was filed on February 21, 1987; in G.R. No. 83225, the material dates do not appear in the records but the order decreeing the money award was issued on October 25, 1982 and a subpoena duces tecum appears to have been issued, in connection with the inspections that prefaced the complaint, on August 20, 1982. 18 ) With respect to G.R. No. 82805, therefore, the Executive Order squarely applies, while insofar as G.R. No. 83225 is concerned, we give it a retroactive operation.
With respect moreover, to Camus Engineering's petition (G.R. No. 83225), it is the Court's considered opinion that the petitioner is estopped from assailing Director Kong's jurisdiction. The rule is that a party may not attack a tribunal's jurisdiction and at the same time ask for affirmative relief 19 The records disclose that the petitioner had entered into an amicable settlement with a total of forty-seven employees and had it approved by Director Kong. The petitioner must, therefore, be said to have accepted Director Kong's jurisdiction. It cannot now assail it.
Accordingly, we sustain the jurisdiction of the respondents Regional Directors.
WHEREFORE, these petitions are DISMISSED. No costs.
SO ORDERED.
Melencio-Herrera, Paras, Feliciano, Gancayco Padilla, Bidin, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J. and Cruz, Gutierrez, Jr. JJ., concur.
Separate Opinions
NARVASA, J., Concurring Opinion:
While, for the reasons hereinafter stated, I concur in the result reached in the main opinion, I cannot quite bring myself to agree with its express or clearly implied postulate that Executive Order No. 111 worked any substantive change in the law previous thereto as far as concerns the extent and character of the authority vested in the Secretary of Labor and Employment or his representatives in labor standards disputes. A survey of the state of the law prior to and after the issuance of said Executive Order will, I hope, make the point clearer.
1. The Law Prior to EO 111. 1
a. Exclusive 0riginal Jurisdiction of Labor Arbiters. — Prior to the effectivity of EO 111, the Labor Arbiters had "original and exclusive jurisdiction (inter alia) to hear and decide" (1) "cases ... that workers may file involving wages, hours of work and other terms and conditions of employment ...," and (2) "all money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits and as otherwise provided in Article 127 of (the Labor) Code ..." 2
b. Power Granted to Secretary of Labor or Representative. — Notwithstanding that the jurisdiction of the Labor Arbiters above mentioned was pronounced to be original and exclusive, some power over the same subject matter (over wages [e.g., non-payment or under-payment], hours of work [e.g., overtime or premium compensation], and other terms and conditions of employment [e.g., separation pay, maternity and other leave benefits]) was in measure also vested in the Secretary of Labor or his duly authorized representative, i.e., the Regional Director.
(1) Article 128 of the Labor Code. — Article 128 of the Labor Code, 3 as amended by P.D. No. 850, 4 conferred on the "Secretary of Labor or his duly authorized representatives ... the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of ... (the) 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."
(2) Labor Standards Provisions. — The "abor standards provisions" referred to are, of course, those concerning wages, hours of work, separation pay, maternity and other leaves, industrial or occupational safety, medical and dental treatment, etc. 5
(3) Rules and Regulations Implementing the Labor Code.—The Rules and Regulations implementing the Labor Code promulgated on February 16, 1976 provided, among other things, 6 that the Regional Director had power to cause investigation of complaints filed by aggrieved parties if employer-employee relationship still existed between the parties, and take such other action as may be necessary in accordance with Article 128 of the Code; but if the employment relation no longer existed, the case would be assigned to a Conciliator for determination of the issues and effecting of an amicable settlement, and if no settlement was reached, the case would be certified to the Appropriate Labor Arbiter. However, the Regional Director could deny certification of the case to the Labor Arbiter if: (a) the complaint patently lacked cause of action; (b) the causes of action had already prescribed; (c) the complaint patently partook (of) the nature of harassment; and (d) the complaint was barred by prior judgment. The denial of the certification could however be subject of appeal by the Bureau of Labor Standards.
(4) Policy Instructions No. 14. — Policy Instructions No. 14, on the subject, "Termination Cases," effective April 23, 1976, recognized the jurisdiction of the Regional Director to conduct a summary
investigation of applications for clearance to dismiss employees and decide whether or not to deny the application; but "if he does not deny the application, he shall immediately certify the case to the Executive Arbiter for hearing and decision on the merits." 7
c. Allocation of Jurisdiction.—Considering that apart from the Regional Director (in representation of the Secretary of Labor) and the Labor Arbiter, there were other officers, i.e., the Conciliators in the Bureau of Labor Relations, who also had some power relative to "labor standards cases," it was thought necessary to define more precisely the competence of the different officials on the matter. This was done in Policy Instructions No. 6 issued by the Ministry of Labor and Employment on April 23, 1976, dealing explicitly with the subject, "Distribution of Jurisdiction over Labor Cases."
(1) The Regional Director. — Placed within the exclusive original jurisdiction of the REGIONAL DIRECTOR were labor standards cases "arising from violations of labor standard laws discovered in the course of inspection or complaints where employer-employee relations still exist." 8
(2) The Conciliation Section. — Placed within the exclusive original jurisdiction of the CONCILIATION SECTION were labor standards cases "where employer-employee relations no longer exist." 9
(3) The Labor Arbiters. — Declared as "CERTIFIABLE" to the Labor Arbiters were cases which were "not settled by the Conciliation Section of the Regional Office" "where employer-employee relations no longer exist" or those concerning (a) "questions of law," or (b) "claims involving an amount exceeding P100,000 or 40% of the paid-up capital of the employer, whichever is lower, or (c) evidentiary matters not disclosed or verified in the normal course of inspection." 10
d. Additional Prescriptions. — Further refinement of the power of the Regional Directors over Labor Standards Cases was effected by Policy Instructions No. 7. Policy Instructions No. 7 declared that a Regional Director could exercise jurisdiction over labor standards controversies except in those cases —
(1) where questions of law are involved as determined by the Regional Director; 11
(2) where the amount involved exceeds P100,000 or over 40% of the equity of the employer, whichever is lower;
(3) where evidentiary matters not disclosed or verified in the normal course of inspection are required; or
(4) where there is no more employer-employee relationship p. 12
e. Later Rules. —
(1) PD 1367. — Presidential Decree No. 1367 confirmed the jurisdiction of Labor Arbiters over "cases arising from employer-employee relations duly indorsed (or "certified") by the Regional Directors." 13
(2) Policy Instructions No. 37. — Policy Instructions No. 37, issued on October 7, 1978 in connection with PD 1391, provided that "cases, involving violation of labor standards laws where employer-employee relationship still exists shall be assigned to the Labor Arbiters where: (a) intricate questions of law are involved; or (b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations officers are required for their proper disposition." 14 It
declared, too, that the so-called "conciliable cases" theretofore under the jurisdiction of the defunct Conciliation Section for purposes of conciliation or amicable settlement, became immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. 15
(3) PD 1691. — PD 1691 Further amended Article 127 (renumbered 128) by the addition of a proviso relative to the situation referred to in Policy Instructions Numbered 7 and 37, supra, i.e., where the employer contests the findings of labor regulations officers, viz.: 16
xxx xxx xxx
(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 standard 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 regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
f. Restatement of Power of Secretary of Laboror Representative Prior to EO 111. — In light of the laws and rules just cited, and the pronouncement in Policy Instructions No. 7 that labor standards cases had been taken from the arbitration system and placed under the enforcement system to the end that "the worker need not litigate to get what legally belongs to him," the fact of the matter is that the power of Regional Directors over labor standards cases prior to EO 111 consisted merely of the enforcement of UNCONTESTED MONEY CLAIMS OF PERSONS STILL EMPLOYED, i.e., money claims of persons arising from violations of labor standards provisions of the Labor Code (or other statute) discovered by labor regulations officers in the course of normal inspection, where the employment relationship still existed, or the employer did not contest or otherwise raise any issue respecting the findings of said labor regulations officers.
(1) No adjudicatory power. — Indeed, no adjudicative power as that possessed by Labor Arbiters was ever reposed in the Regional Director, in the sense of trying and deciding (or hearing and determining) legal controversies or justiciable causes involving labor standards laws. The Regional Director actually did not have the power or faculty known as "jurisdiction," vested in a judge, for instance, or a labor arbiter, i.e., to receive evidence adduced by parties involved in a labor standards controversy, determine on the basis thereof the factual issues, and apply the law to the facts thus deemed established, in order that the controversy or litigation might be authoritatively resolved. He did not have the power to resolve controversies (understood in the popular sense, as clashes of opposing views). He merely had functions that can only be described as ministerial. He had visitorial power, as representative of the Minister or Secretary of Labor, to cause inspection of establishments to ascertain observance of labor standards provisions, and in the event of discovered violations thereof, to require compliance therewith if the employer admitted the infractions; but if it should appear, at the hearing required to be held after discovery of the infractions, that a controversy existed, i.e., the employer was not accepting but was on the contrary contesting said officers' findings, or that no employment relationship existed any longer, the Regional Director himself could not try and decide the case but had to refer or certify it to the appropriate Labor Arbiter for hearing and judgment. There was, in fine, no sharing by the Regional Director of the original and exclusive jurisdiction reposed by law in Labor Arbiters even with respect to money claims arising from alleged breach of labor standards provisions of the Labor Code.
3. Relevant Jurisprudence. — It was in this sense — of the regional Director's lack of adjudicatory authority, or the power of compulsory arbitration — that the law was applied in Zambales Base Metals v. Minister of Labor, 146 SCRA 50 (Nov. 26,1986), concerning money claims 17 arising from
alleged violations of labor standards provisions not discovered in the course of normal inspection, Oreshoot Mining Co. v. Arellano, 156 SCRA 500 (Dec. 14, 1987), involving, among others, employees whose employment had been terminated, 18 and Ong v. Parel, 156 SCRA 768 (Dec. 21, 1987), in which the employer inter alia disputed the adequacy of the evidentiary foundation (employees' affidavits) of the findings of the labor standards inspectors. Noteworthy is that, as observed in Ong v. Parel, the Solicitor General had taken the position (as late as January, 1987) that the respondent Regional Director was "not empowered to adjudicate money claims because such authority is reposed in the Labor Arbiter and the National Labor Relations Commission as provided under Art. 127 of the same Code, as amended ... (and) that the visitorial and enforcement powers of the public respondent under Art. 128 of the Labor Code are limited to awards not exceeding P100,000.00 pursuant to MOLE Policy Instruction No. 7." 19
4. Amendments Under EO 111. — Another amendment of paragraph (b) of Article 128 of the Labor Code was made by Executive Order No. 111 which took effect, as aforestated, on March 3, 1987. The amendment consisted merely in the intercalation of two (2) clauses, to wit: (a) "The provisions of article 217 of this code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists," and (b) "and other labor legislation." As thus amended, 20 paragraph (b) Article 128 now reads:
(b) 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 representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor Legislation based on the findings of labor regulations officers or industry safety engineers made in the course of inspection, and to 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 regulations officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
5. Actual Effect of EO 111.— According to the Solicitor General, Executive Order No. 111 was promulgated precisely to revise the law as pronounced and applied in the Zambales Base Metals decision. 21 If this be so the formulation of the executive order falls short of the purpose, and is, in light of the prior state of the law, inefficacious to bring about the intended revision.
The insertion of the clause, "where the relationship of employer-employee still exists," to qualify the power of the Minister (now Secretary) of Labor and Employment or his duly authorized representatives-the necessary implication being that where the employment relation no longer existed, said Minister (Secretary) or his representatives had no such power was quite unnecessary for in Policy Instructions Numbered 6, 7 and 37, supra, it was explicity acknowledged that these officials really had no jurisdiction over cases where the relationship of employer and employee no longer existed.
The inclusion of the phrase, "and other labor legislation," was also unnecessary for it is obvious that labor standards provisions may be found in the Labor Code as well as in other statutes. In any event, the phrase did not affect the subject of jurisdiction of Regional Directors.
Neither does the intercalation of the phrase, "the provisions of Article 217 of this Code to the contrary notwithstanding," work a change in the existing law. For even before the effectivity of EO 111 — and notwithstanding that under said Article 217 Labor Arbiters had exclusive original
jurisdiction over cases ... (and all) money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits-the Minister (Secretary) of Labor or his duly authorized representatives already had the power (albeit not truly adjudicative)-where the employer-employee relationship still existed —
... 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 regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
In other words, even without the qualifying phrase, "the provisions of Article 217 of this Code to the contrary notwithstanding," the Secretary of Labor or his duly authorized representatives already "shared" in some measure the jurisdiction of Labor Arbiters to order observance of labor laws — denominated exclusive and original in said Article 217 — in that in UNCONTESTED MONEY CLAIMS OF PERSONS STILL EMPLOYED, Regional Directors had power to "order and administer ... compliance with the labor standards provisions ... and to issue writs of execution to the appropriate authority for the enforcement of their order." The principle has not been changed. Even under EO 111 no other aspect of the Labor Arbiter's jurisdiction may be deemed to be shared by the Secretary or his representatives, in view of the retention of the provisos requiring (1) the existence of the employment relationship and (2) the absence of a contest or issue raised by the employer anent the findings of the labor regulations officers. Whether under EO 111 or the prior law, therefore, the Secretary of Labor or his representatives could, notwithstanding the exclusive original jurisdiction conferred on Labor Arbiters, order compliance with the legal provisions governing wages, hours of employment and other terms of employment, found to have been violated in the normal course of inspection, provided that (1) the employment relationship still existed and (2) the case was uncontested, i.e., the employer did not contest or raise any issue relative to the findings of the labor standards officers.
To recapitulate, under EO 111, the Regional Directors, in representation of the Secretary of Labor — and notwithstanding the grant of exclusive original jurisdiction to Labor Arbiters by Article 217 of the Labor Code, as amended — have power to hear cases involving violations of labor standards provisions of the Labor Code or other legislation discovered in the course of normal inspection, and order compliance therewith, provided that:
1) the alleged violations of the employer involve persons who are still his employees, i.e., not dismissed: and
2) the employer does not contest the findings of the labor regulations officer or raise issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
These propositions relative to uncontested cases are reflected in Rule III of the Rules Implementing Executive Order 111 governing the "Endorsement of Cases to the National Labor Relations Commission," viz.:
Section 1. Contested Cases. —
a) In cases where the employer contests the findings of the Labor Standards and Welfare Officers and the issues cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection, the Regional Director shall endorse such case to the appropriate Arbitration Branch of the National Labor Relations Commission.
b) The employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. The issue of whether or not the case shall be endorsed to the NLRC shall be resolved by the Regional Director in the final disposition of the case.
Section 2. Labor Standards and Welfare Officers (LSWOSs) as witnesses—In cases that have been endorsed to the NLRC, the (LSWOSs) who participated in the investigation shall make themselves available as witnesses in the proceedings before the Labor Arbiter concerned.
It may finally be observed that the hearing to be conducted by the Regional Director is limited to a determination of whether or not (1) the employment relationship still exists, and/or (2) the employer accepts the findings of the (LSWOSs) and raises no issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. In the affirmative case, the Regional Director may properly order compliance with the legal provisions violated and issue writs of execution to the appropriate authority for the enforcement of this order; otherwise, the Regional Director ceases to have competence to take cognizance of and decide the case but must refer or certify it to the Labor Arbiter for hearing and judgment.
6. Application of the Law to Cases at Bar. — In G.R. No. 82805 (Briad Agro Development Corporation v. de la Serna), the employer refused to present its records for inspection by the Regional Office. This may be deemed a waiver of the right to contest the conclusions of the Labor Inspectors drawn from the evidence and records at hand. Under Executive Order 111, which is applicable since the violations of labor standards took place after its effectivity, it was within the authority of the Regional Director to order compliance with the labor standards statutes, and to issue a writ of execution to the appropriate authority to enforce his order.
In G.R. No. 83255 (L.M. Camus Engineering Corporation v. Secretary of Labor), the employer similarly refused to produce its relevant records, despite several requests therefor by the Regional Office. Its refusal may be regarded as a waiver of the right to contest the Director's findings made on the basis of the records and evidence available, including the fact that the employer had impliedly acknowledged the imputed infractions of labor standards when it made payments on account thereof to several of its employees by way of amicable settlement. Under the law prior to Executive Order 111, the Regional Director had the power, in cases where the employment relationship still existed, to order compliance with labor standards and issue a writ of execution to the appropriate authorities for the enforcement of his awards. In any event, said Executive Order, as a "curative statute ... has retrospective application to a pending proceeding." 22
I suggest that in both cases, even without the sanction of Executive Order 111, which neither enlarged nor otherwise altered the authority of the Secretary of Labor and the Regional Directors as regards labor standards cases, the assailed actions of said officials may be sustained as properly within the powers vested in them by the law in force before the effectivity of said enactment. Upon this proposition, the dismissal of both petitions is entirely in order.
7. Republic Act No. 6715.—What in fact conferred upon Regional Directors adjudicative power in the true sense of the term, i.e., the power take cognizance of, receive evidence on and determine legal
controversies brought before them, is Republic Act No. 6715, signed into law on March 2, 1988 and effective "fifteen (15) days after its publication in the Official Gazette or in at least two (2) national newspapers of general circulation, whichever comes earlier."
a. Amendment of Article 129.—RA 6715 amended Article 129 of the Labor Code to read as follows:
ART. 129. Recovery of wages, simple money claims and other benefits.—Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this code, arising from employer-employee relations; Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. ...
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.
xxx xxx xxx
b. Amendment of Article 217. — Amended by RA 6715, too, was Article 217 of the same Code, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.-Except as otherwise provided under this code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim of reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relation;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.
xxx xxx xxx
c. Requisites for Exercise of Jurisdiction by Regional Director, etc.—Quite clearly, under the provisions of said Act, Regional Directors and other hearing officers of the Department of Labor (aside from the Labor Arbiters) have real jurisdiction-i.e., they may try and decide, or hear and determine-any claim brought before them for recovery of wages and other monetary claims and benefits, including legal interest, if the following requisites concur, to wit:
1) the claim is presented by an employee or person employed in domestic or household service, or househelper under the Code;
2) the claimant, no longer being employed, does not seek reinstatement; and
3) the aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5,000.00).
d. When Labor Arbiter has exclusive jurisdiction. — Where these three (3) requisites do not co-exist, the Labor Arbiters have exclusive original jurisdiction over all claims arising from employer-employee relations, other than those for employees' compensation, social security, medicare and maternity benefits.
Separate Opinions
NARVASA, J., Concurring Opinion:
While, for the reasons hereinafter stated, I concur in the result reached in the main opinion, I cannot quite bring myself to agree with its express or clearly implied postulate that Executive Order No. 111 worked any substantive change in the law previous thereto as far as concerns the extent and character of the authority vested in the Secretary of Labor and Employment or his representatives in labor standards disputes. A survey of the state of the law prior to and after the issuance of said Executive Order will, I hope, make the point clearer.
1. The Law Prior to EO 111. 1
a. Exclusive 0riginal Jurisdiction of Labor Arbiters. — Prior to the effectivity of EO 111, the Labor Arbiters had "original and exclusive jurisdiction (inter alia) to hear and decide" (1) "cases ... that workers may file involving wages, hours of work and other terms and conditions of employment ...," and (2) "all money claims of workers involving non-payment or underpayment of wages, overtime or
premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits and as otherwise provided in Article 127 of (the Labor) Code ..." 2
b. Power Granted to Secretary of Labor or Representative. — Notwithstanding that the jurisdiction of the Labor Arbiters above mentioned was pronounced to be original and exclusive, some power over the same subject matter (over wages [e.g., non-payment or under-payment], hours of work [e.g., overtime or premium compensation], and other terms and conditions of employment [e.g., separation pay, maternity and other leave benefits]) was in measure also vested in the Secretary of Labor or his duly authorized representative, i.e., the Regional Director.
(1) Article 128 of the Labor Code. — Article 128 of the Labor Code, 3 as amended by P.D. No. 850, 4 conferred on the "Secretary of Labor or his duly authorized representatives ... the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of ... (the) 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."
(2) Labor Standards Provisions. — The "abor standards provisions" referred to are, of course, those concerning wages, hours of work, separation pay, maternity and other leaves, industrial or occupational safety, medical and dental treatment, etc. 5
(3) Rules and Regulations Implementing the Labor Code.—The Rules and Regulations implementing the Labor Code promulgated on February 16, 1976 provided, among other things, 6 that the Regional Director had power to cause investigation of complaints filed by aggrieved parties if employer-employee relationship still existed between the parties, and take such other action as may be necessary in accordance with Article 128 of the Code; but if the employment relation no longer existed, the case would be assigned to a Conciliator for determination of the issues and effecting of an amicable settlement, and if no settlement was reached, the case would be certified to the Appropriate Labor Arbiter. However, the Regional Director could deny certification of the case to the Labor Arbiter if: (a) the complaint patently lacked cause of action; (b) the causes of action had already prescribed; (c) the complaint patently partook (of) the nature of harassment; and (d) the complaint was barred by prior judgment. The denial of the certification could however be subject of appeal by the Bureau of Labor Standards.
(4) Policy Instructions No. 14. — Policy Instructions No. 14, on the subject, "Termination Cases," effective April 23, 1976, recognized the jurisdiction of the Regional Director to conduct a summary investigation of applications for clearance to dismiss employees and decide whether or not to deny the application; but "if he does not deny the application, he shall immediately certify the case to the Executive Arbiter for hearing and decision on the merits." 7
c. Allocation of Jurisdiction.—Considering that apart from the Regional Director (in representation of the Secretary of Labor) and the Labor Arbiter, there were other officers, i.e., the Conciliators in the Bureau of Labor Relations, who also had some power relative to "labor standards cases," it was thought necessary to define more precisely the competence of the different officials on the matter. This was done in Policy Instructions No. 6 issued by the Ministry of Labor and Employment on April 23, 1976, dealing explicitly with the subject, "Distribution of Jurisdiction over Labor Cases."
(1) The Regional Director. — Placed within the exclusive original jurisdiction of the REGIONAL DIRECTOR were labor standards cases "arising from violations of labor standard laws discovered in the course of inspection or complaints where employer-employee relations still exist." 8
(2) The Conciliation Section. — Placed within the exclusive original jurisdiction of the CONCILIATION SECTION were labor standards cases "where employer-employee relations no longer exist." 9
(3) The Labor Arbiters. — Declared as "CERTIFIABLE" to the Labor Arbiters were cases which were "not settled by the Conciliation Section of the Regional Office" "where employer-employee relations no longer exist" or those concerning (a) "questions of law," or (b) "claims involving an amount exceeding P100,000 or 40% of the paid-up capital of the employer, whichever is lower, or (c) evidentiary matters not disclosed or verified in the normal course of inspection." 10
d. Additional Prescriptions. — Further refinement of the power of the Regional Directors over Labor Standards Cases was effected by Policy Instructions No. 7. Policy Instructions No. 7 declared that a Regional Director could exercise jurisdiction over labor standards controversies except in those cases —
(1) where questions of law are involved as determined by the Regional Director; 11
(2) where the amount involved exceeds P100,000 or over 40% of the equity of the employer, whichever is lower;
(3) where evidentiary matters not disclosed or verified in the normal course of inspection are required; or
(4) where there is no more employer-employee relationship p. 12
e. Later Rules. —
(1) PD 1367. — Presidential Decree No. 1367 confirmed the jurisdiction of Labor Arbiters over "cases arising from employer-employee relations duly indorsed (or "certified") by the Regional Directors." 13
(2) Policy Instructions No. 37. — Policy Instructions No. 37, issued on October 7, 1978 in connection with PD 1391, provided that "cases, involving violation of labor standards laws where employer-employee relationship still exists shall be assigned to the Labor Arbiters where: (a) intricate questions of law are involved; or (b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations officers are required for their proper disposition." 14 It declared, too, that the so-called "conciliable cases" theretofore under the jurisdiction of the defunct Conciliation Section for purposes of conciliation or amicable settlement, became immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. 15
(3) PD 1691. — PD 1691 Further amended Article 127 (renumbered 128) by the addition of a proviso relative to the situation referred to in Policy Instructions Numbered 7 and 37, supra, i.e., where the employer contests the findings of labor regulations officers, viz.: 16
xxx xxx xxx
(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 standard 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 regulation officer and
raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
f. Restatement of Power of Secretary of Laboror Representative Prior to EO 111. — In light of the laws and rules just cited, and the pronouncement in Policy Instructions No. 7 that labor standards cases had been taken from the arbitration system and placed under the enforcement system to the end that "the worker need not litigate to get what legally belongs to him," the fact of the matter is that the power of Regional Directors over labor standards cases prior to EO 111 consisted merely of the enforcement of UNCONTESTED MONEY CLAIMS OF PERSONS STILL EMPLOYED, i.e., money claims of persons arising from violations of labor standards provisions of the Labor Code (or other statute) discovered by labor regulations officers in the course of normal inspection, where the employment relationship still existed, or the employer did not contest or otherwise raise any issue respecting the findings of said labor regulations officers.
(1) No adjudicatory power. — Indeed, no adjudicative power as that possessed by Labor Arbiters was ever reposed in the Regional Director, in the sense of trying and deciding (or hearing and determining) legal controversies or justiciable causes involving labor standards laws. The Regional Director actually did not have the power or faculty known as "jurisdiction," vested in a judge, for instance, or a labor arbiter, i.e., to receive evidence adduced by parties involved in a labor standards controversy, determine on the basis thereof the factual issues, and apply the law to the facts thus deemed established, in order that the controversy or litigation might be authoritatively resolved. He did not have the power to resolve controversies (understood in the popular sense, as clashes of opposing views). He merely had functions that can only be described as ministerial. He had visitorial power, as representative of the Minister or Secretary of Labor, to cause inspection of establishments to ascertain observance of labor standards provisions, and in the event of discovered violations thereof, to require compliance therewith if the employer admitted the infractions; but if it should appear, at the hearing required to be held after discovery of the infractions, that a controversy existed, i.e., the employer was not accepting but was on the contrary contesting said officers' findings, or that no employment relationship existed any longer, the Regional Director himself could not try and decide the case but had to refer or certify it to the appropriate Labor Arbiter for hearing and judgment. There was, in fine, no sharing by the Regional Director of the original and exclusive jurisdiction reposed by law in Labor Arbiters even with respect to money claims arising from alleged breach of labor standards provisions of the Labor Code.
3. Relevant Jurisprudence. — It was in this sense — of the regional Director's lack of adjudicatory authority, or the power of compulsory arbitration — that the law was applied in Zambales Base Metals v. Minister of Labor, 146 SCRA 50 (Nov. 26,1986), concerning money claims 17 arising from alleged violations of labor standards provisions not discovered in the course of normal inspection, Oreshoot Mining Co. v. Arellano, 156 SCRA 500 (Dec. 14, 1987), involving, among others, employees whose employment had been terminated, 18 and Ong v. Parel, 156 SCRA 768 (Dec. 21, 1987), in which the employer inter alia disputed the adequacy of the evidentiary foundation (employees' affidavits) of the findings of the labor standards inspectors. Noteworthy is that, as observed in Ong v. Parel, the Solicitor General had taken the position (as late as January, 1987) that the respondent Regional Director was "not empowered to adjudicate money claims because such authority is reposed in the Labor Arbiter and the National Labor Relations Commission as provided under Art. 127 of the same Code, as amended ... (and) that the visitorial and enforcement powers of the public respondent under Art. 128 of the Labor Code are limited to awards not exceeding P100,000.00 pursuant to MOLE Policy Instruction No. 7." 19
4. Amendments Under EO 111. — Another amendment of paragraph (b) of Article 128 of the Labor Code was made by Executive Order No. 111 which took effect, as aforestated, on March 3, 1987. The amendment consisted merely in the intercalation of two (2) clauses, to wit: (a) "The provisions of
article 217 of this code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists," and (b) "and other labor legislation." As thus amended, 20 paragraph (b) Article 128 now reads:
(b) 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 representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor Legislation based on the findings of labor regulations officers or industry safety engineers made in the course of inspection, and to 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 regulations officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
5. Actual Effect of EO 111.— According to the Solicitor General, Executive Order No. 111 was promulgated precisely to revise the law as pronounced and applied in the Zambales Base Metals decision. 21 If this be so the formulation of the executive order falls short of the purpose, and is, in light of the prior state of the law, inefficacious to bring about the intended revision.
The insertion of the clause, "where the relationship of employer-employee still exists," to qualify the power of the Minister (now Secretary) of Labor and Employment or his duly authorized representatives-the necessary implication being that where the employment relation no longer existed, said Minister (Secretary) or his representatives had no such power was quite unnecessary for in Policy Instructions Numbered 6, 7 and 37, supra, it was explicity acknowledged that these officials really had no jurisdiction over cases where the relationship of employer and employee no longer existed.
The inclusion of the phrase, "and other labor legislation," was also unnecessary for it is obvious that labor standards provisions may be found in the Labor Code as well as in other statutes. In any event, the phrase did not affect the subject of jurisdiction of Regional Directors.
Neither does the intercalation of the phrase, "the provisions of Article 217 of this Code to the contrary notwithstanding," work a change in the existing law. For even before the effectivity of EO 111 — and notwithstanding that under said Article 217 Labor Arbiters had exclusive original jurisdiction over cases ... (and all) money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits-the Minister (Secretary) of Labor or his duly authorized representatives already had the power (albeit not truly adjudicative)-where the employer-employee relationship still existed —
... 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 regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
In other words, even without the qualifying phrase, "the provisions of Article 217 of this Code to the contrary notwithstanding," the Secretary of Labor or his duly authorized representatives already "shared" in some measure the jurisdiction of Labor Arbiters to order observance of labor laws — denominated exclusive and original in said Article 217 — in that in UNCONTESTED MONEY CLAIMS OF PERSONS STILL EMPLOYED, Regional Directors had power to "order and administer ... compliance with the labor standards provisions ... and to issue writs of execution to the appropriate authority for the enforcement of their order." The principle has not been changed. Even under EO 111 no other aspect of the Labor Arbiter's jurisdiction may be deemed to be shared by the Secretary or his representatives, in view of the retention of the provisos requiring (1) the existence of the employment relationship and (2) the absence of a contest or issue raised by the employer anent the findings of the labor regulations officers. Whether under EO 111 or the prior law, therefore, the Secretary of Labor or his representatives could, notwithstanding the exclusive original jurisdiction conferred on Labor Arbiters, order compliance with the legal provisions governing wages, hours of employment and other terms of employment, found to have been violated in the normal course of inspection, provided that (1) the employment relationship still existed and (2) the case was uncontested, i.e., the employer did not contest or raise any issue relative to the findings of the labor standards officers.
To recapitulate, under EO 111, the Regional Directors, in representation of the Secretary of Labor — and notwithstanding the grant of exclusive original jurisdiction to Labor Arbiters by Article 217 of the Labor Code, as amended — have power to hear cases involving violations of labor standards provisions of the Labor Code or other legislation discovered in the course of normal inspection, and order compliance therewith, provided that:
1) the alleged violations of the employer involve persons who are still his employees, i.e., not dismissed: and
2) the employer does not contest the findings of the labor regulations officer or raise issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.
These propositions relative to uncontested cases are reflected in Rule III of the Rules Implementing Executive Order 111 governing the "Endorsement of Cases to the National Labor Relations Commission," viz.:
Section 1. Contested Cases. —
a) In cases where the employer contests the findings of the Labor Standards and Welfare Officers and the issues cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection, the Regional Director shall endorse such case to the appropriate Arbitration Branch of the National Labor Relations Commission.
b) The employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. The issue of whether or not the case shall be endorsed to the NLRC shall be resolved by the Regional Director in the final disposition of the case.
Section 2. Labor Standards and Welfare Officers (LSWOSs) as witnesses—In cases that have been endorsed to the NLRC, the (LSWOSs) who participated in the investigation shall make themselves available as witnesses in the proceedings before the Labor Arbiter concerned.
It may finally be observed that the hearing to be conducted by the Regional Director is limited to a determination of whether or not (1) the employment relationship still exists, and/or (2) the employer accepts the findings of the (LSWOSs) and raises no issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. In the affirmative case, the Regional Director may properly order compliance with the legal provisions violated and issue writs of execution to the appropriate authority for the enforcement of this order; otherwise, the Regional Director ceases to have competence to take cognizance of and decide the case but must refer or certify it to the Labor Arbiter for hearing and judgment.
6. Application of the Law to Cases at Bar. — In G.R. No. 82805 (Briad Agro Development Corporation v. de la Serna), the employer refused to present its records for inspection by the Regional Office. This may be deemed a waiver of the right to contest the conclusions of the Labor Inspectors drawn from the evidence and records at hand. Under Executive Order 111, which is applicable since the violations of labor standards took place after its effectivity, it was within the authority of the Regional Director to order compliance with the labor standards statutes, and to issue a writ of execution to the appropriate authority to enforce his order.
In G.R. No. 83255 (L.M. Camus Engineering Corporation v. Secretary of Labor), the employer similarly refused to produce its relevant records, despite several requests therefor by the Regional Office. Its refusal may be regarded as a waiver of the right to contest the Director's findings made on the basis of the records and evidence available, including the fact that the employer had impliedly acknowledged the imputed infractions of labor standards when it made payments on account thereof to several of its employees by way of amicable settlement. Under the law prior to Executive Order 111, the Regional Director had the power, in cases where the employment relationship still existed, to order compliance with labor standards and issue a writ of execution to the appropriate authorities for the enforcement of his awards. In any event, said Executive Order, as a "curative statute ... has retrospective application to a pending proceeding." 22
I suggest that in both cases, even without the sanction of Executive Order 111, which neither enlarged nor otherwise altered the authority of the Secretary of Labor and the Regional Directors as regards labor standards cases, the assailed actions of said officials may be sustained as properly within the powers vested in them by the law in force before the effectivity of said enactment. Upon this proposition, the dismissal of both petitions is entirely in order.
7. Republic Act No. 6715.—What in fact conferred upon Regional Directors adjudicative power in the true sense of the term, i.e., the power take cognizance of, receive evidence on and determine legal controversies brought before them, is Republic Act No. 6715, signed into law on March 2, 1988 and effective "fifteen (15) days after its publication in the Official Gazette or in at least two (2) national newspapers of general circulation, whichever comes earlier."
a. Amendment of Article 129.—RA 6715 amended Article 129 of the Labor Code to read as follows:
ART. 129. Recovery of wages, simple money claims and other benefits.—Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this code, arising from employer-employee relations; Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or
househelper do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. ...
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.
xxx xxx xxx
b. Amendment of Article 217. — Amended by RA 6715, too, was Article 217 of the same Code, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the Commission.-Except as otherwise provided under this code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim of reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relation;
(5) Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
(6) Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.
xxx xxx xxx
c. Requisites for Exercise of Jurisdiction by Regional Director, etc.—Quite clearly, under the provisions of said Act, Regional Directors and other hearing officers of the Department of Labor (aside from the Labor Arbiters) have real jurisdiction-i.e., they may try and decide, or hear and determine-any claim brought before them for recovery of wages and other monetary claims and benefits, including legal interest, if the following requisites concur, to wit:
1) the claim is presented by an employee or person employed in domestic or household service, or househelper under the Code;
2) the claimant, no longer being employed, does not seek reinstatement; and
3) the aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5,000.00).
d. When Labor Arbiter has exclusive jurisdiction. — Where these three (3) requisites do not co-exist, the Labor Arbiters have exclusive original jurisdiction over all claims arising from employer-employee relations, other than those for employees' compensation, social security, medicare and maternity benefits.
ON CONTRACTOR AND JOB CONTRACTING
[G.R. No. 114316. January 26, 2001]
SECURITY AND CREDIT INVESTIGATION, INC. and VICENTE REYES, JR., petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION (First Division), FELICIANO MERCADO, EDGAR SOMOSOT and DANTE OLIVER and the COMMISSION ON HUMAN RIGHTS, respondents.
D E C I S I O N
KAPUNAN, J.:
This is a petition for certiorari assailing the Decision of respondent National Labor Relations Commission (NLRC), First Division, dated January 24, 1994, in NLRC Case Nos. 00-03-01791-90 and 00-03-01886-90 which affirmed with modification the Decision, dated November 18,
1993, of Labor Arbiter Jose G. De Vera ordering petitioner Security and Credit Investigation, Inc. (petitioner) to reinstate private respondents Feliciano Mercado (Mercado), Edgar Somosot (Somosot), and Dante Oliver (Oliver) without backwages and ordering third-party respondent Commission on Human Rights (CHR) to reimburse petitioner in the amount of Twenty Eight Thousand Five Hundred Pesos (P28,500.00).
The facts of the case are as follows:
Private respondents Mercado, Somosot and Oliver were employed as security guards by petitioner and assigned to the CHR which was petitioner’s client.
Sometime in February 1990, about eighteen (18) of petitioner’s security guards detailed at the CHR, including Mercado, Somosot and Oliver, filed a complaint for money claims against petitioner. However, upon petitioner’s request that the security guards withdraw the complaint, each of the complainants, except for Mercado, Somosot and Oliver, signed a Release and Quitclaim in favor of petitioner.
Mercado averred that he was being pressured by petitioner to sign a Release and Quitclaim, so he went on leave from work on March 22, 1990. When he called petitioner’s office on the afternoon of the same day to inquire about his work assignment, petitioner’s officer-in-charge, Rogelio Vecido, informed him that he was not assigned anywhere because he was suspended from work.
Somosot likewise claimed that on March 22, 1990, Mr. Igmedio Tomenio, petitioner’s shift-in-charge at the CHR, tried to pressure him to sign a Release and Quitclaim but he refused. That afternoon, Somosot learned that he had been suspended from work. When he attempted to report for work the next day, he was informed verbally that his employment was already terminated.
The next day, March 23, 1990, Mercado and Somosot filed a complaint for illegal dismissal and underpayment of wages, overtime pay, legal holiday pay, premium pay for holiday and rest day, 13th month pay, service incentive leave benefits and night differential against petitioner. The case was docketed as NLRC-NCR Case No. 00-03-01791-90.
Like Mercado and Somosot, respondent Oliver asseverated that on March 27, 1990 he went to petitioner’s office to reiterate his money claims and was forced by Mr. Reynaldo Dino, petitioner’s operations manager, to sign a Release and Quitclaim. Because of his refusal to sign the same, he was not given any new assignment by petitioner. He was thus surprised to receive on March 29, 1990 a telegram from petitioner requiring him to explain his absence from work without leave from March 27, 1990. Subsequently, Oliver filed a complaint for illegal dismissal and underpayment of backwages against petitioner, which case was docketed as NLRC-NCR Case No. 00-03-01886-90.
Upon motion of petitioner, the two cases were consolidated.
Petitioner, on the other hand, denied that it dismissed Mercado, Somosot and Oliver and alleged that the latter abandoned their employment.
Meanwhile, on February 18, 1991, petitioner filed a third-party complaint against the CHR, claiming that its failure to effect the increase in the minimum wage of respondent security guards from July 1, 1989 to March 31, 1990, was due to the failure of the CHR to promptly pay the increases in the wage rates of said guards pursuant to Section 6 of Republic Act No. 6727 [1] (R.A.
6727). The CHR approved payment of increased wage rates only from April 16, 1990. Petitioner claimed that under R.A. 6727, the CHR was mandated to pay increased wages to the security guards commencing from July 1, 1989.
The CHR denied that it was obliged to pay the increase in the wage rates of the respondent guards. It averred that R.A. 6727 is not applicable to it, because it had already been paying the respondent security guards more than P100.00 a day even before the effectivity of said law. Its decision to increase the salaries of respondent guards effective August 16, 1990 was due only to humanitarian reasons.
In his Decision dated November 18, 1991,[2] the Labor Arbiter found that there was neither dismissal by petitioner of the respondent security guards nor abandonment of employment by the latter, and that the controversy resulted from miscommunication and misapprehension of facts by the parties. The Labor Arbiter, however, ruled that there was underpayment of respondent guards’ salaries, holiday pay, premium pay for holidays and rest days, overtime pay, 13th month pay and service incentive leave benefits in the total amount of Forty Two Thousand Six Hundred Thirty Five Pesos and Eighteen Centavos (P42,635.18). Of this amount, the CHR was ordered to reimburse petitioner an amount of Twenty Eight Thousand Five Hundred Pesos (P28,500.00). The dispositive portion thereof stated:
WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the respondent company to reinstate the complainants without backwages and to pay said complainants as follows:
1. P33,054.18 as wage differential inclusive of holiday pay and premium pay;
2. P4,423.18 as total overtime pay differential;
3. P4,505.82 as aggregate 13th month pay differential; and
4. P652.00 as differential for service incentive leave pay;
All other claims of the complainants are denied for lack of merit.
And on the third-party complaint, the third-party respondent is hereby ordered to reimburse the third-party complainant the sum of P28,500.00 based on the above disposition.
SO ORDERED.[3]
All parties filed their respective appeals with the National Labor Relations Commission.
In their partial appeal, respondents Mercado and Somosot argued that the Labor Arbiter erred in not finding that they were illegally dismissed and in not awarding backwages in their favor.
Petitioner, on the other hand, claimed that the Labor Arbiter erred in not finding that respondent security guards abandoned their employment, and that it is the CHR which should be held liable for the monetary award given to respondent security guards.
The CHR for its part contended that the Labor Arbiter erred in not finding that R.A. 6727 does not apply to it, and in failing to appreciate the CHR’s Letter dated April 16, 1990 which stated that it was increasing the wage rates of the security guards beginning April 16, 1990.
On January 24, 1994, the NLRC rendered its Decision, [4] the dispositive portion of which states:
WHEREFORE, in view thereof, the decision appealed from is hereby affirmed with modification. The order of Labor Arbiter Jose G. De Vera on the third-party complaint that the third-party respondent reimburses (sic) the third-party complainants the amount of Twenty-Eight Thousand Five Hundred (P28,500.00) Pesos representing their salaries from July 1, 1989 up to April 15, 1990 is SET ASIDE.
SO ORDERED.[5]
Hence, this petition. Petitioner raises the following arguments:
A. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT RULED THAT PRIVATE RESPONDENTS DID NOT ABANDON THEIR POSTS.
B. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT COMPUTED THE OVERTIME DIFFERENTIAL, 13TH MONTH DIFFERENTIAL AND THE DIFFERENTIAL FOR THE SERVICE INCENTIVE LEAVE PAY WITHOUT EXCLUDING THE PERIOD FOR SEPTEMBER 1, 1988 UP TO JUNE 30, 1989 DURING WHICH, ACCORDING TO ITS OWN DECLARATION, THERE WAS NO UNDERPAYMENT.
C. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT SET ASIDE THE ORDER OF LABOR ARBITER JOSE G. DE VERA REQUIRING THE CHR TO REIMBURSE PETITIONER.[6]
The Court finds that the NLRC committed no grave abuse of discretion in affirming the finding that petitioner did not dismiss respondent security guards, and that the latter did not abandon their employment.
Both the NLRC and the Labor Arbiter found no clear proof that petitioner had in fact dismissed respondent security guards. Mercado based his claim of illegal dismissal only on the statement of officer-in-charge Mr. Vecido that he had not been assigned to any post. Similarly, Somosot relied merely on the verbal information relayed to him that he had been terminated. Oliver’s belief that he had been illegally dismissed was founded on the telegram from petitioner requiring him to explain his absence without leave which he received on March 29, 1990. None of them exerted efforts to confirm from petitioner’s office whether they had in fact been dismissed.
In the case of Indophil Acrylic Manufacturing Corporation vs. NLRC,[7] where private respondent filed a complaint for illegal dismissal against his employer after he was prevented by the company guard from entering the company premises on the ground that he had resigned, the Court, which held that private respondent was not illegally dismissed, stated:
x x x
The present case, which has lasted for almost four (4) years, could have been avoided had private respondent made previous inquiry regarding the veracity of Mr. Gaviola’s instruction, and not simply relied on the bare statement of the company guard. Private respondent should have been more vigilant of his rights as an employee because at stake was not only his position but also his means of livelihood. x x x
Furthermore, petitioner denied the allegation that it terminated respondent security guards’ employment without just cause and even alleged that respondent guards abandoned their employment. Thus, absent any showing of an overt or positive act proving that petitioner had dismissed Mercado, Somosot and Oliver, their claim of illegal dismissal cannot be sustained.[8]
There being no finding that respondent security guards were illegally dismissed, there is no basis for an award of backwages in their favor. It is axiomatic that before backwages may be granted, there must be unjust or illegal dismissal from work.[9]
Neither did the NLRC find evidence to support petitioner’s allegation that Mercado, Somosot and Oliver abandoned their employment. The records reveal that their failure to report for duty was not caused by a willful and deliberate intent to abandon their employment. Rather, such failure resulted from their belief, though mistaken, that they had been suspended or terminated from work. The rule is that for abandonment to exist, two elements must concur: first, the employee must have failed to report for work or must have been absent without justifiable reason; and second, there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts.[10] The filing by Mercado, Somosot and Oliver of their complaints for illegal dismissal negates the existence of any intention on their part to abandon their employment.[11]
On the other hand, there is merit in petitioner’s argument that there was an error in the computation of the amounts constituting underpayment of overtime pay, 13th month pay and service incentive leave benefits to respondent security guards by the Labor Arbiter, which in turn was affirmed by the NLRC. The Labor Arbiter found that Mercado, Somosot and Oliver were not paid the minimum wage from January 1, 1988 to March 22, 1990. On the basis of this finding, he determined that respondent security guards incurred underpayments in their wages
for the periods January 1, 1988 to August 31, 1988 and July 1, 1989 to March 22, 1990.[12] However, he noted that there were no underpayments in their wages for the period September 1, 1988 to June 30, 1989.[13] The discrepancy between the minimum wage prevailing for the periods concerned and the wages and other benefits received by the security guards also served as the basis for the Labor Arbiter’s computation of underpayments for overtime, 13th month and service incentive leave benefits.
However, in computing the underpayment for overtime, 13th month and service incentive leave benefits, the Labor Arbiter erroneously included the period from September 1, 1988 to June 30, 1989 in spite of his finding that there was no underpayment in wages during said period.
The period from September 1, 1988 to June 30, 1989 should thus be excluded in the computation of the underpayments for overtime, 13th month and service incentive leave benefits of respondent security guards. Accordingly, there is a need to recompute the underpaid amounts due to the respondent security guards with respect to their overtime, 13th month and service incentive leave benefits in conformity with the evidence presented.
The Court also finds merit in petitioner’s argument that the NLRC should not have reversed the Labor Arbiter’s finding that the CHR is liable for the payment of P28,500.00 representing the differentials of respondent security guards’ wage, overtime, 13th month and service incentive leave benefits for the period July 1, 1989 to April 15, 1990.
The record shows that petitioner informed the CHR regarding the increase in the wages of the security guards effective July 1, 1989, pursuant to R.A. 6727 which mandated a Twenty Five Peso (P25.00) increase in the daily wage rate in a Letter dated August 7, 1989. [14] In its reply letter dated April 16, 1990, the CHR stated that it had approved the increase in the wages effective April 16, 1990.[15]
The CHR, however, maintains that it is not liable to pay increased wages to the security guards and claims that there is a proviso in Section 4 of R.A. 6727[16]which exempts employees already receiving more than P100.00 daily from receiving the P25.00 increase required under said law. The CHR argues that since the security guards were receiving P103.56 daily for the year 1989, it was not required to pay them the P25.00 per day increase under R.A. 6727. The CHR further asserts that its approved increase in the security guards’ wages from April 16, 1990 was due only to humanitarian reasons and was not an admission of any obligation to increase the same under R.A. 6727.[17]
It must be noted that both the Labor Arbiter and the NLRC found that there were discrepancies in the minimum wage prescribed under R.A. 6727 and what were actually received by respondent security guards from July 1, 1989. The rule is that the factual findings of the Labor Arbiter, when affirmed by the NLRC are accorded to great weight and respect when supported by substantial evidence, and devoid of any unfairness and arbitrariness.[18]
Section 6 of R.A. 6727 imposes the liability for payment of the increase in wages on the principal which in this case is the CHR, thus:
In case of contracts for construction projects and for security, janitorial and similar services, the prescribed increases in the wage rates of the workers shall be borne by the principals or clients of the construction/service contractors and the
contract shall be deemed amended accordingly. In the event however, that the principal or client fails to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client. (Emphasis supplied.)
It is thus clear that the CHR is the party liable for payment of the wage increase due to respondent security guards. While petitioner, as the contractor, is held solidarily liable for the payment of wages, including wage increases, as prescribed under the Labor Code, [19] the obligation ultimately belongs to the CHR as principal. The Court in Eagle Security Agency, Inc. vs. NLRC,[20] also cited in Rabago vs. NLRC,[21] and Spartan Security and Detective Agency vs. NLRC,[22] ruled on this issue as follows:
The Wage Orders are explicit that payment of the increase are “to be borne” by the principal or client. “To be borne”, however, does not mean that the principal, PTSI in this case, would directly pay the security guards the wage and allowance increases because there is no privity of contract between them. The security guards’ contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE is tasked, among others, with the payment of their wages [See Article VII, Sec. 3 of the Contract for Security Services, Supra, and Bautista vs. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 665].
On the other hand, there existed a contractual agreement between PTSI and EAGLE wherein the former availed of the security services provided by the latter. In return, the security agency collects from its client payment for its security services. This payment covers the wages for the security guards and also expenses for their supervision and training, the guards’ bonds, firearms with ammunitions, uniforms and other equipments [sic], accessories, tools, materials and supplies necessary for the maintenance of a security force.
Premises considered, the security guards’ immediate recourse for the payment of the increases is with their direct employer, EAGLE. However, in order for the security agency to comply with the new wage and allowance rates it has to pay the security guards, the Wage Orders made specific provision to amend existing contracts for security services by allowing the adjustment of the consideration paid by the principal to the security agency concerned. What the Wage Orders require, therefore, is the amendment of the contract as to the consideration to cover the service contractor’s payment of the increase mandated. In the end therefore, the ultimate liability for the payment of the increases rests with the principal (Emphasis supplied.).[23]
The Labor Arbiter was therefore correct in requiring the CHR to reimburse petitioner the amount of P28,500.00 representing the unpaid wage increases of respondent security guards for the period July 1, 1989 to April 15, 1990.
Petitioner’s Letter dated August 7, 1989 addressed to the CHR regarding the increase in wage rates of its security guards pursuant to R.A. 6727 cannot be interpreted as a mere proposal for wage increases for its employees, because the wage increase referred to therein is one mandated by law, and as R.A. 6727 expressly provides in Section 6 thereof existing contracts for security services between the service contractor and the principal are deemed amended by said law. There is, therefore, no merit in the NLRC’s assertion that since the CHR agreed to increase the wages of respondent security guards only from April 16, 1990, it can only be held liable for wage increases from that date instead of from July 1, 1989.
WHEREFORE, the assailed decision of the NLRC in NLRC Case Nos. 00-03-01791-90 and 00-03-01886-90 is hereby affirmed with the MODIFICATION that the amounts corresponding to the underpayment of overtime, 13th month and service incentive leave benefits for the period September 1, 1988 to June 30, 1989 as determined by the Labor Arbiter be recomputed; and the ruling of the Labor Arbiter that the CHR is liable to reimburse petitioner in the amount of Twenty Eight Thousand Five Hundred Pesos (P28,500.00) representing the unpaid wage increases from July 1, 1989 to April 15, 1990 due to respondents Mercado, Somosot and Oliver is hereby REINSTATED.
SO ORDERED
i
ii
iii
iv
v
vi
vii
viii
ix
x
xi
xii
xiii
xiv
xv
xvi
xvii
xviii
xix
xx
xxi
xxii
xxiii
xxiv
xxv
xxvi
xxvii
xxviii
xxix
xxx
xxxi
xxxii
xxxiii
