G.R. No. 192571               April 22, 2014ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. FEIST, MARIA OLIVIA T. YABUT-MISA, TERESITA C. BERNARDO, AND ALLAN G. ALMAZAR, Petitioners, vs.PEARLIE ANN F. ALCARAZ, Respondent.R E S O L U T I O NPERLAS-BERNABE, J.:For resolution is respondent Pearlie Ann Alcaraz's (Alcaraz) Motion for Reconsideration dated August 23, 2013 of the Court's Decision dated July 23, 2013 (Decision).1

At the outset, there appears to be no substantial argument in the said motion sufficient for the Court to depart from the pronouncements made in the initial ruling. But if only to address Akaraz's novel assertions, and to so placate any doubt or misconception in the resolution of this case, the Court proceeds to shed light on the matters indicated below.A. Manner of review.Alcaraz contends that the Court should not have conducted a re-weighing of evidence since a petition for review on certiorari under Rule 45 of the Rules of Court (Rules) is limited to the review of questions of law. She submits that since what was under review was a ruling of the Court of Appeals (CA) rendered via a petition for certiorari under Rule 65 of the Rules, the Court should only determine whether or not the CA properly determined that the National Labor Relations Commission (NLRC) committed a grave abuse of discretion.The assertion does not justify the reconsideration of the assailed Decision.A careful perusal of the questioned Decision will reveal that the Court actually resolved the controversy under the above-stated framework of analysis. Essentially, the Court found the CA to have committed an error in holding that no grave abuse of discretion can be ascribed to the NLRC since the latter arbitrarily disregarded the legal implication of the attendant circumstances in this case which should have simply resulted in the finding that Alcaraz was apprised of the performance standards for her regularization and hence, was properly a probationary employee. As the Court observed, an employee’s failure to perform the duties and responsibilities which have been clearly made known to him constitutes a justifiable basis for a probationary employee’s non-regularization. As detailed in the Decision, Alcaraz was well-apprised of her duties and responsibilities as well as the probationary status of her employment:

(a) On June 27, 2004, [Abbott Laboratories, Philippines (Abbott)] caused the publication in a major broadsheet newspaper of its need for a Regulatory Affairs Manager, indicating therein the job description for as well as the duties and responsibilities attendant to the aforesaid position; this prompted Alcaraz to submit her application to Abbott on October 4, 2004;(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be employed on a probationary status;(c) On February 12, 2005, Alcaraz signed an employment contract which specifically stated, inter alia, that she was to be placed on probation for a period of six (6) months beginning February 15, 2005 to August 14, 2005;(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her copies of Abbott’s organizational structure and her job description through e-mail;(e) Alcaraz was made to undergo a pre-employment orientation where [Allan G. Almazar] informed her that she had to implement Abbott’s Code of Conduct and office policies on human resources and finance and that she would be reporting directly to [Kelly Walsh];(f) Alcaraz was also required to undergo a training program as part of her orientation;(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules from [Maria Olivia T. Yabut-Misa] who explained to her the procedure

for evaluating the performance of probationary employees; she was further notified that Abbott had only one evaluation system for all of its employees; and(h) Moreover, Alcaraz had previously worked for another pharmaceutical company and had admitted to have an "extensive training and background" to acquire the necessary skills for her job.2

Considering the foregoing incidents which were readily observable from the records, the Court reached the conclusion that the NLRC committed grave abuse of discretion, viz.:[I]n holding that Alcaraz was illegally dismissed due to her status as a regular and not a probationary employee, the Court finds that the NLRC committed a grave abuse of discretion.To elucidate, records show that the NLRC based its decision on the premise that Alcaraz’s receipt of her job description and Abbott’s Code of Conduct and Performance Modules was not equivalent to being actually informed of the performance standards upon which she should have been evaluated on. It, however, overlooked the legal implication of the other attendant circumstances as detailed herein which should have warranted a contrary finding that Alcaraz was indeed a probationary and not a regular employee – more particularly the fact that she was well-aware of her duties and responsibilities and that her failure to adequately perform the same would lead to her non-regularization and eventually, her termination.3

Consequently, since the CA found that the NLRC did not commit grave abuse of discretion and denied the certiorari petition before it, the reversal of its ruling was thus in order.At this juncture, it bears exposition that while NLRC decisions are, by their nature, final and executory4 and, hence, not subject to appellate review,5 the Court is not precluded from considering other questions of law aside from the CA’s finding on the NLRC’s grave abuse of discretion. While the focal point of analysis revolves on this issue, the Court may deal with ancillary issues – such as, in this case, the question of how a probationary employee is deemed to have been informed of the standards of his regularization – if only to determine if the concepts and principles of labor law were correctly applied or misapplied by the NLRC in its decision. In other words, the Court’s analysis of the NLRC’s interpretation of the environmental principles and concepts of labor law is not completely prohibited in – as it is complementary to – a Rule 45 review of labor cases.Finally, if only to put to rest Alcaraz’s misgivings on the manner in which this case was reviewed, it bears pointing out that no "factual appellate review" was conducted by the Court in the Decision. Rather, the Court proceeded to interpret the relevant rules on probationary employment as applied to settled factual findings. Besides, even on the assumption that a scrutiny of facts was undertaken, the Court is not altogether barred from conducting the same. This was explained in the case of Career Philippines Shipmanagement, Inc. v. Serna6 wherein the Court held as follows:Accordingly, we do not re-examine conflicting evidence, re-evaluate the credibility of witnesses, or substitute the findings of fact of the NLRC, an administrative body that has expertise in its specialized field. Nor do we substitute our "own judgment for that of the tribunal in determining where the weight of evidence lies or what evidence is credible." The factual findings of the NLRC, when affirmed by the CA, are generally conclusive on this Court.Nevertheless, there are exceptional cases where we, in the exercise of our discretionary appellate jurisdiction may be urged to look into factual issues raised in a Rule 45 petition. For instance, when the petitioner persuasively alleges that there is insufficient or insubstantial evidence on record to support the factual findings of the tribunal or court a quo, as Section 5, Rule 133 of the Rules of Court states in express terms that in cases filed before administrative or quasi-judicial bodies, a fact may be deemed established only if supported by substantial evidence.7 (Emphasis supplied)B. Standards for regularization;conceptual underpinnings.Alcaraz posits that, contrary to the Court’s Decision, one’s job description cannot by and of itself be treated as a standard for regularization as a standard denotes a measure of

quantity or quality. By way of example, Alcaraz cites the case of a probationary salesperson and asks how does such employee achieve regular status if he does not know how much he needs to sell to reach the same.The argument is untenable.First off, the Court must correct Alcaraz’s mistaken notion: it is not the probationary employee’s job description but the adequate performance of his duties and responsibilities which constitutes the inherent and implied standard for regularization. To echo the fundamental point of the Decision, if the probationary employee had been fully apprised by his employer of these duties and responsibilities, then basic knowledge and common sense dictate that he must adequately perform the same, else he fails to pass the probationary trial and may therefore be subject to termination.8

The determination of "adequate performance" is not, in all cases, measurable by quantitative specification, such as that of a sales quota in Alcaraz’s example. It is also hinged on the qualitative assessment of the employee’s work; by its nature, this largely rests on the reasonable exercise of the employer’s management prerogative. While in some instances the standards used in measuring the quality of work may be conveyed – such as workers who construct tangible products which follow particular metrics, not all standards of quality measurement may be reducible to hard figures or are readily articulable in specific pre-engagement descriptions. A good example would be the case of probationary employees whose tasks involve the application of discretion and intellect, such as – to name a few – lawyers, artists, and journalists. In these kinds of occupation, the best that the employer can do at the time of engagement is to inform the probationary employee of his duties and responsibilities and to orient him on how to properly proceed with the same. The employer cannot bear out in exacting detail at the beginning of the engagement what he deems as "quality work" especially since the probationary employee has yet to submit the required output. In the ultimate analysis, the communication of performance standards should be perceived within the context of the nature of the probationary employee’s duties and responsibilities.The same logic applies to a probationary managerial employee who is tasked to supervise a particular department, as Alcaraz in this case.1âwphi1 It is hardly possible for the employer, at the time of the employee’s engagement, to map into technical indicators, or convey in precise detail the quality standards by which the latter should effectively manage the department. Factors which gauge the ability of the managerial employee to either deal with his subordinates (e.g., how to spur their performance, or command respect and obedience from them), or to organize office policies, are hardly conveyable at the outset of the engagement since the employee has yet to be immersed into the work itself. Given that a managerial role essentially connotes an exercise of discretion, the quality of effective management can only be determined through subsequent assessment. While at the time of engagement, reason dictates that the employer can only inform the probationary managerial employee of his duties and responsibilities as such and provide the allowable parameters for the same. Verily, as stated in the Decision, the adequate performance of such duties and responsibilities is, by and of itself, an implied standard of regularization.In this relation, it bears mentioning that the performance standard contemplated by law should not, in all cases, be contained in a specialized system of feedbacks or evaluation. The Court takes judicial notice of the fact that not all employers, such as simple businesses or small-scale enterprises, have a sophisticated form of human resource management, so much so that the adoption of technical indicators as utilized through "comment cards" or "appraisal" tools should not be treated as a prerequisite for every case of probationary engagement. In fact, even if a system of such kind is employed and the procedures for its implementation are not followed, once an employer determines that the probationary employee fails to meet the standards required for his regularization, the former is not precluded from dismissing the latter. The rule is that when a valid cause for termination exists, the procedural infirmity attending the termination only warrants the payment of nominal damages. This was the principle laid down in the landmark cases of Agabon v. NLRC9 (Agabon) and Jaka Food Processing Corporation v. Pacot10 (Jaka). In

the assailed Decision, the Court actually extended the application of the Agabon and Jaka rulings to breaches of company procedure, notwithstanding the employer’s compliance with the statutory requirements under the Labor Code.11 Hence, although Abbott did not comply with its own termination procedure, its non-compliance thereof would not detract from the finding that there subsists a valid cause to terminate Alcaraz’s employment. Abbott, however, was penalized for its contractual breach and thereby ordered to pay nominal damages.As a final point, Alcaraz cannot take refuge in Aliling v. Feliciano12 (Aliling) since the same is not squarely applicable to the case at bar. The employee in Aliling, a sales executive, was belatedly informed of his quota requirement. Thus, considering the nature of his position, the fact that he was not informed of his sales quota at the time of his engagement changed the complexion of his employment. Contrarily, the nature of Alcaraz's duties and responsibilities as Regulatory Affairs Manager negates the application of the foregoing. Records show that Alcaraz was terminated because she (a) did not manage her time effectively; (b) failed to gain the trust of her staff and to build an effective rapport with them; (c) failed to train her staff effectively; and (d) was not able to obtain the knowledge and ability to make sound judgments on case processing and article review which were necessary for the proper performance of her duties.13 Due to the nature and variety of these managerial functions, the best that Abbott could have done, at the time of Alcaraz's engagement, was to inform her of her duties and responsibilities, the adequate performance of which, to repeat, is an inherent and implied standard for regularization; this is unlike the circumstance in Aliling where a quantitative regularization standard, in the term of a sales quota, was readily articulable to the employee at the outset. Hence, since the reasonableness of Alcaraz's assessment clearly appears from the records, her termination was justified. Bear in mind that the quantum of proof which the employer must discharge is only substantial evidence which, as defined in case law, means that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.14 To the Court's mind, this threshold of evidence Abbott amply overcame in this case.All told, the Court hereby denies the instant motion for reconsideration and thereby upholds the Decision in the main case.WHEREFORE, the motion for reconsideration dated August 23, 2013 of the Court's Decision dated July 23, 2013 in this case is hereby DENIED.SO ORDERED.

G.R. Nos. 196280 & 196286               April 2, 2014

UNIVERSIDAD DE STA. ISABEL, Petitioner, vs.MARVIN-JULIAN L. SAMBAJON, JR., Respondent.D E C I S I O NVILLARAMA, JR., J.:Before us is a petition for review on certiorari under Rule 45 urging this Court to set aside the Decision1 dated March 25, 2011 of the Court of Appeals (CA) in CA-GR. SP Nos. 108103 and 108168 which affirmed with modification the Decision2 dated August 1, 2008 of the National Labor Relations Commission (NLRC). The NLRC affirmed the Decision3 dated August 22, 2006 of the Labor Arbiter in NLRC Sub-RAB V-05-04-00053-05) declaring petitioner liable for illegal dismissal of respondent.The FactsUniversidad de Sta. Isabel (petitioner) is a non-stock, non-profit religious educational institution in Naga City. Petitioner hired Marvin-Julian L. Sambajon, Jr. (respondent) as a full-time college faculty member with the rank of Assistant Professor on probationary status, as evidenced by an Appointment Contract4 dated November 1, 2002, effective November 1, 2002 up to March 30, 2003.After the aforesaid contract expired, petitioner continued to give teaching loads to respondent who remained a full-time faculty member of the Department of Religious Education for the two semesters of school-year (SY) 2003-2004 (June 1, 2003 to March 31, 2004); and two semesters of SY 2004-2005 (June 2004 to March 31, 2005).5

Sometime in June 2003, after respondent completed his course in Master of Arts in Education, major in Guidance and Counseling, he submitted the corresponding Special Order from the Commission on Higher Education (CHED), together with his credentials for the said master’s degree, to the Human Resources Department of petitioner for the purpose of salary adjustment/increase. Subsequently, respondent’s salary was increased, as reflected in his pay slips starting October 1-15, 2004.6 He was likewise re-ranked from Assistant Professor to Associate Professor.In a letter dated October 15, 2004 addressed to the President of petitioner, Sr. Ma. Asuncion G. Evidente, D.C., respondent vigorously argued that his salary increase should be made effective as of June 2003 and demanded the payment of his salary differential. The school administration thru Sr. Purita Gatongay, D.C., replied by explaining its policy on re-ranking of faculty members7, viz:x x x xPlease be informed that teachers in the Universidad are not re-ranked during their probationary period. The Faculty Manual as revised for school year 2002-2003 provides (page 38) "Re-ranking is done every two years, hence the personnel hold their present rank for two years. Those undergoing probationary period and those on part-time basis of employment are not covered by this provision." This provision is found also in the 2000-2001 Operations Manual.Your personnel file shows that you were hired as a probationary teacher in the second semester of school year 2002-2003. By October 2004, you will be completing four (4) semesters (two school years) of service. Even permanent teachers are re-ranked only every two years, and you are not even a permanent teacher. I am informed that you have been told several times and made to read the Provision in the Faculty Manual by the personnel office that you cannot be re-ranked because you are still a probationary teacher.x x x x8

Respondent insisted on his demand for retroactive pay. In a letter dated January 10, 2005, Sr. Evidente reiterated the school policy on re-ranking of teachers, viz:x x xUnder the Faculty Manual a permanent teacher is not entitled to re-ranking oftener than once every two years. From this it should be obvious that, with all the more reason, a probationary teacher would not be entitled to "evaluation," which could result in re-ranking or "adjustment in salary" oftener than once every two years.

Since you are a probationary teacher, the University is under no obligation to re-rank you or adjust your salary after what you refer to as "evaluation." Nevertheless, considering that in October 2004 you were completing two years of service, the University adjusted your salary in the light of the CHED Special Order you submitted showing that you had obtained the degree of Master of Arts in Education. Instead of being grateful for the adjustment, you insist that the adjustment be made retroactive to June 2003. Simply stated, you want your salary adjusted after one semester of probationary service. We do not think a probationary teacher has better rights than a permanent teacher in the matter of re-ranking or "evaluation."9

However, respondent found the above explanation insufficient and not clear enough. In his letter dated January 12, 2005, he pointed out the case of another faculty member -- whom he did not name -- also on probationary status whose salary was supposedly adjusted by petitioner at the start of school year (June) after he/she had completed his/her master’s degree in March. Respondent thus pleaded for the release of his salary differential, or at the very least, that petitioner give him categorical answers to his questions.10

Apparently, to resolve the issue, a dialogue was held between respondent and Sr. Evidente. As to the outcome of this conversation, the parties gave conflicting accounts. Respondent claimed that Sr. Evidente told him that the school administration had decided to shorten his probationary period to two years on the basis of his satisfactory performance.11 This was categorically denied by Sr. Evidente though the latter admitted having informed respondent "that he was made Associate Professor on account of his incessant requests for a salary increase which the Universidad de Santa Isabel eventually accommodated…considering that [respondent] had obtained a Master’s Degree in June 2003." She further informed respondent that "his appointment as Associate Professor did not affect his status as a probationary employee" and that petitioner "was not and did not exercise its prerogative to shorten his probationary period to only two years." Sr. Stella O. Real, D.C., who issued a Certificate of Employment to respondent, likewise denied that she confirmed to respondent that petitioner has shortened his probationary employment.12

On February 26, 2005, respondent received his letter of termination which stated:Greetings of Peace in the Lord!We regret to inform your good self that your full time probationary appointment will not be renewed when it expires at the end of this coming March 31, 2005.Thank you so much for the services that you have rendered to USI and to her clientele the past several semesters. We strongly and sincerely encourage you to pursue your desire to complete your Post Graduate studies in the University of your choice as soon as you are able.God bless you in all your future endeavors.Godspeed!13

On April 14, 2005, respondent filed a complaint for illegal dismissal against the petitioner.In his Decision dated August 22, 2006, Labor Arbiter Jesus Orlando M. Quinones ruled that there was no just or authorized cause in the termination of respondent’s probationary employment. Consequently, petitioner was found liable for illegal dismissal, thus:WHEREFORE, in view of the foregoing, judgment is hereby rendered finding respondent school UNIVERSIDAD DE SANTA ISABEL liable for the illegal dismissal of complainant MARVIN-JULIAN L. SAMBAJON, JR.Accordingly, and consistent with Article 279 of the Labor Code, respondent school is hereby directed to pay complainant full backwages covering the period/duration of the 1st semester of academic year 2005-2006. Reinstatement being rendered moot by the expiration of the probationary period, respondent school is directed to pay complainant separation pay in lieu of reinstatement computed at one (1) month’s pay for every year of service. An award of 10% attorney’s fees in favor of complainant is also held in order.(please see attached computation of monetary award as integral part of this decision).All other claims and charges are DISMISSED for lack of legal and factual basis.SO ORDERED.14

Petitioner appealed to the NLRC raising the issue of the correct interpretation of Section 92 of the Manual of Regulations for Private Schools and DOLE-DECS-CHED-TESDA Order No. 01, series of 1996, and alleging grave abuse of discretion committed by the Labor Arbiter in ruling on a cause of action/issue not raised by the complainant (respondent) in his position paper.On August 1, 2008, the NLRC rendered its Decision affirming the Labor Arbiter and holding that respondent had acquired a permanent status pursuant to Sections 91, 92 and 93 of the 1992 Manual of Regulations for Private Schools, in relation to Article 281 of the Labor Code, as amended. Thus:In the instant case, the first contract (records, pp. 36; 92) executed by the parties provides that he was hired on a probationary status effective November 1, 2002 to March 30, 2003. While his employment continued beyond the above-mentioned period and lasted for a total of five (5) consecutive semesters, it appears that the only other contract he signed is the one (records, p. 103) for the second semester of SY 2003-2004. A portion of this contract reads:"I am pleased to inform you that you are designated and commissioned to be an Apostle of Love and Service, Unity and Peace as you dedicate and commit yourself in the exercise of your duties and responsibilities as a:FULL-TIME FACULTY MEMBERof the Religious Education Department from November 1, 2003 to March 31, 2004.Unless otherwise renewed in writing this designation automatically terminates as of the date expiration above stated without further notice."There is no showing that the complainant signed a contract for the first and second semesters of SY 2004-2005.Under the circumstances, it must be concluded that the complainant has acquired permanent status. The last paragraph of Article 281 of the Labor Code provides that "an employee who is allowed to work after a probationary period shall be considered a regular employee." Based thereon, the complainant required [sic] permanent status on the first day of the first semester of SY 2003-2004.As presently worded, Section 92 of the revised Manual of Regulations for Private Schools merely provides for the maximum lengths of the probationary periods of academic personnel of private schools in the three (3) levels of education (elementary, secondary, tertiary). The periods provided therein are not requirements for the acquisition, by them, of permanent status.WHEREFORE, the decision appealed from is hereby AFFIRMED.SO ORDERED.15

Petitioner and respondent sought reconsideration of the above decision, with the former contending that the NLRC resolved an issue not raised in the appeal memorandum, while the latter asserted that the NLRC erred in not awarding him full back wages so as to conform to the finding that he had acquired a permanent status. Both motions were denied by the NLRC which ruled that regardless of whether or not the parties were aware of the rules for the acquisition of permanent status by private school teachers, these rules applied to them and overrode their mistaken beliefs. As to respondent’s plea for back wages, the NLRC said the award of back wages was not done in this case because respondent did not appeal the Labor Arbiter’s decision.Both parties filed separate appeals before the CA. On motion by respondent, the two cases were consolidated (CA-G.R. SP Nos. 108103 and 108168).16

By Decision dated March 25, 2011, the CA sustained the conclusion of the NLRC that respondent had already acquired permanent status when he was allowed to continue teaching after the expiration of his first appointment-contract on March 30, 2003. However, the CA found it necessary to modify the decision of the NLRC to include the award of back wages to respondent. The dispositive portion of the said decision reads:WHEREFORE, premises considered, the petition docketed as CA-G.R. SP No. 108103 is GRANTED. The challenged Decision of the NLRC dated August 1, 2008 in NLRC NCR CA No. 050481-06 (NLRC Sub-RAB V-05-04-00053-05) is AFFIRMED with MODIFICATION in

that Universidad de Sta. Isabel is directed to reinstate Marvin-Julian L. Sambajon, Jr. to his former position without loss of seniority rights and to pay him full backwages computed from the time his compensation was withheld from him up to the time of his actual reinstatement. All other aspects are AFFIRMED.As regards CA-G.R. SP No. 108168, the petition is DENIED for lack of merit.SO ORDERED.17

The Petition/IssuesBefore this Court, petitioner ascribes grave error on the part of the CA in sustaining the NLRC which ruled that respondent was dismissed without just or authorized cause at the time he had already acquired permanent or regular status since petitioner allowed him to continue teaching despite the expiration of the first contract of probationary employment for the second semester of SY 2002-2003. Petitioner at the outset underscores the fact that the NLRC decided an issue which was not raised on appeal, i.e., whether respondent had attained regular status. It points out that the Labor Arbiter’s finding that respondent was dismissed while still a probationary employee was not appealed by him, and hence such finding had already become final.In fine, petitioner asks this Court to rule on the following issues: (1) whether the NLRC correctly resolved an issue not raised in petitioner’s appeal memorandum; and (2) whether respondent’s probationary employment was validly terminated by petitioner.Our RulingThe petition is partly meritorious.Issues on Appeal before the NLRCSection 4(d), Rule VI of the 2005 Revised Rules of Procedure of the NLRC, which was in force at the time petitioner appealed the Labor Arbiter’s decision, expressly provided that, on appeal, the NLRC shall limit itself only to the specific issues that were elevated for review, to wit:Section 4. Requisites for perfection of appeal. x x x.x x x x(d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the specific issues that were elevated on appeal.We have clarified that the clear import of the aforementioned procedural rule is that the NLRC shall, in cases of perfected appeals, limit itself to reviewing those issues which are raised on appeal. As a consequence thereof, any other issues which were not included in the appeal shall become final and executory.18

In this case, petitioner sets forth the following issues in its appeal memorandum:5.01WHETHER THE MARVIN JULIAN L. SAMBAJON, JR. WAS ILLEGALLY DISMISSED FROM THE UNIVERSIDAD DE STA. ISABEL.5.02WHETHER THE UNIVERSIDAD DE STA. ISABEL SHORTENED THE PROBATIONARY PERIOD OF MARVIN JULIAN L. SAMBAJON.5.03WHETHER RESPONDENTS-APPELLANTS ARE ENTITLED TO DAMAGES.19

Specifically, petitioner sought the correct interpretation of the Manual of Regulations for Private School Teachers and DOLE-DECS-CHED-TESDA Order No. 01, series of 1996, insofar as the probationary period for teachers.In reviewing the Labor Arbiter’s finding of illegal dismissal, the NLRC concluded that respondent had already attained regular status after the expiration of his first appointment contract as probationary employee. Such conclusion was but a logical result of the NLRC’s own interpretation of the law. Since petitioner elevated the questions of the validity of respondent’s dismissal and the applicable probationary period under the aforesaid regulations, the NLRC did not gravely abuse its discretion in fully resolving the said issues.As the Court held in Roche (Phils.) v. NLRC20:

Petitioners then suggest that the respondent Commission abused its discretion in awarding reliefs in excess of those stated in the decision of the labor arbiter despite the absence of an appeal by Villareal. To stress this point, they cited Section 5(c) of the Rules of Procedure of the National Labor Relations Commission which provides that the Commission shall, in cases of perfected appeals, limits itself to reviewing those issues which were raised on appeal. Consequently, those which were not raised on appeal shall be final and executory.There is no merit to this contention. The records show that the petitioners elevated the issues regarding the correctness of the award of damages, reinstatement with backpay, retirement benefits and the cost-saving bonus to the respondent Commission in their appeal. This opened the said issues for review and any action taken thereon by the Commission was well within the parameters of its jurisdiction. (Emphasis supplied.)Probationary Employment PeriodA probationary employee is one who is on trial by the employer during which the employer determines whether or not said employee is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become a proper and efficient employee. The word probationary as used to describe the period of employment implies the purpose of the term or period, but not its length.21

It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that 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.22 The law, however, 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.23

Article 281 of the Labor Code provides: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 to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.The probationary employment of teachers in private schools is not governed purely by the Labor Code. The Labor Code is supplemented with respect to the period of probation by special rules found in the Manual of Regulations for Private Schools.24 On the matter of probationary period, Section 92 of the 1992 Manual of Regulations for Private Schools regulations states: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. (Emphasis supplied.)Thus, it is the Manual of Regulations for Private Schools, and not the Labor Code, that determines whether or not a faculty member in an educational institution has attained regular or permanent status.25 Section 9326 of the 1992 Manual of Regulations for Private Schools provides that full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.In this case, the CA sustained the NLRC’s ruling that respondent was illegally dismissed considering that he had become a regular employee when petitioner allowed him to work

beyond the date specified in his first probationary appointment contract which expired on March 30, 2003. According to the CA:… As can be gleaned from Section 92 of the 1992 Manual of Regulations for Private Schools, the probationary period applicable in this case is not more than six (6) consecutive regular semesters of satisfactory service. In other words, the probationary period for academic personnel in the tertiary level runs from one (1) semester to six (6) consecutive regular semesters of satisfactory service. In the instant case, records reveal that Sambajon, Jr. only signed two appointment contracts. The first appointment-contract which he signed was dated November 2002 for the period November 1, 2002 to March 30, 2003, as Assistant Professor 10 on probationary status. x x x The second appointment-contract which Sambajon, Jr. executed was dated February 26, 2004, for the period November 1, 2003 to March 31, 2004. x x x Compared with the first appointment-contract, it was not indicated in the February 26, 2004 appointment-contract that Sambajon, Jr. was hired on probationary status, which explains the NLRC’s conclusion that Sambajon, Jr. already attained permanent status. At this juncture, it is worthy to emphasize that other than the period provided under Article 281 of the Labor Code, the following quoted portion of Article 281 of the Labor Code still applies:"ART. 281. PROBATIONARY EMPLOYMENT. –x x x x An employee who is allowed to work after a probationary period shall be considered a regular employee."Thus, We sustain the NLRC’s conclusion that Sambajon, Jr. acquired permanent status on the first day of the first semester of SY 2003-2004 when he was allowed to continue with his teaching stint after the expiration of his first appointment-contract on March 30, 2003.27

On record are five appointment contracts28 of respondent:

Date Contract Period

November 1, 2002 November 1, 2002-March 30, 2003

September 28, 2003 June 1, 2003-October 31, 2003

February 26, 2004 November 1, 2003-March 31, 2004

September 30, 2004 June 1, 2004-October 31, 2004

October 28, 2004 November 3, 2004-March 31, 2005

Only the first and third contracts were signed by the respondent. However, such lack of signature in the second contract appears not to be the crucial element considered by the CA but the fact that the third contract dated February 26, 2004, unlike the previous contracts, does not indicate the nature of the appointment as probationary employment. According to the CA, this implies, as concluded by the NLRC, that respondent was already a regular employee.We disagree.The third appointment contract dated February 26, 2004 reads:February 26, 2004MR. MARVIN JULIAN SAMBAJONReligious Education DepartmentDear Mr. Sambajon,I am pleased to inform you that you are designated and commissioned to be an Apostle of Love and Service, Unity and Peace as you dedicate and commit yourself in the exercise of your duties and responsibilities as a:FULL TIME FACULTY MEMBERof the Religious Education Department from November 1, 2003 to March 31, 2004.Unless otherwise renewed in writing, this designation automatically terminates as of the date expiration above states without further notice.

As a member of the academic/clinical community, you are expected to live by and give your full support to the promotion and attainment of the Vision-Mission, goals and objectives, the rules and regulations, the Core Values which the University professes to believe and live by.Congratulations and keep your work full in the spirit of the Lord for the Charity of Christ urges us to live life to the fullest.God blessIn Christ,Sr. Ma. Asuncion G. Evidente, D.C.USI PresidentWitness:Sr. Stella O. Real, D.C.HR OfficerI, ______________________ understand that unless renewed in writing, my services as ________________ expires automatically on the specific date above stated.Furthermore, I fully accept this appointment to help build the Kingdom of God here and now and to facilitate the living of the Core Values and the attainment of the Vision-Mission and the goals and objectives of the University.Received and Conforme:(SGD.) MARVIN-JULIAN L. SAMBAJON, JR.29

Since it was explicitly provided in the above contract that unless renewed in writing respondent’s appointment automatically expires at the end of the stipulated period of employment, the CA erred in concluding that simply because the word "probationary" no longer appears below the designation (Full-Time Faculty Member), respondent had already become a permanent employee. Noteworthy is respondent’s admission of being still under probationary period in his January 12, 2005 letter to Sr. Evidente reiterating his demand for salary differential, which letter was sent almost one year after he signed the February 26, 2004 appointment contract, to wit:The problem is that your good office has never categorically resolved whether or not probationary teachers can also be evaluated for salary adjustment. Nevertheless, inferring from your statement that evaluation precedes re-ranking and in fact is the basis for re-ranking, may I categorically ask: does it really mean that since, it precedes re-ranking, evaluation should not take place among probationary teachers for they can not yet be re-ranked? If so, then how pitiful are we, probationary teachers for our credentials are never evaluated since we cannot yet be re-ranked. Oh my goodness! Can your good office not give me a clearer and more convincing argument shedding light on this matter?30

Respondent nonetheless claims that subsequently, the probationary period of three years under the regulations was shortened by petitioner as relayed to him by Sr. Evidente herself. However, the latter, together with Sr. Real, categorically denied having informed respondent that his probationary period was abbreviated, allegedly the reason his salary adjustment was not made retroactive. Apart from his bare assertion, respondent has not adduced proof of any decision of the school administration to shorten his probationary period.In Rev. Fr. Labajo v. Alejandro,31 we held that: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. (Emphasis supplied.)There can be no dispute that 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; or, a shorter probationary period may be incorporated in a collective bargaining agreement. But absent any circumstances which unmistakably show that an abbreviated probationary period has been agreed upon, the three-year probationary term governs.32

As to the Certificate of Employment33 issued by Sr. Real on January 31, 2005, it simply stated that respondent "was a full time faculty member in the Religious Education Department of this same institution" and that he holds the rank of Associate Professor. There was no description or qualification of respondent’s employment as regular or permanent. Neither did the similar Certification34 also issued by Sr. Real on March 18, 2005 prove respondent’s status as a permanent faculty member of petitioner.It bears stressing that full-time teaching primarily refers to the extent of services rendered by the teacher to the employer school and not to the nature of his appointment. Its significance lies in the rule that only full-time teaching personnel can acquire regular or permanent status. The provisions of DOLE-DECS-CHED-TESDA Order No. 01, series of 1996, "Guidelines on Status of Employment of Teachers and of Academic Personnel in Private Educational Institutions" are herein reproduced:

2. Subject in all instances to compliance with the concerned agency and school requirements, the probationary period for teaching or academic personnel shall not be more than three (3) consecutive school 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 and graduate levels, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis.Unless otherwise provided by contract, school academic personnel who are under probationary employment cannot be dismissed during the applicable probationary period, unless dismissal is compelled by a just cause or causes.3. Teachers or academic personnel who have served the probationary period as provided for in the immediately preceding paragraph shall be made regular or permanent if allowed to work after such probationary period. The educational institution, however, may shorten the probationary period after taking into account the qualifications and performance of the probationary teachers and academic personnel.Full-time teaching or academic personnel are those meeting all the following requirements:

3.1. Who possess at least the minimum academic qualifications prescribed by the Department of Education, Culture and Sports for Basic Education, the Commission on Higher Education for Tertiary Education, and the Technical Education and Skills Development Authority for Technical and Vocational Education under their respective Manual of Regulations governing said personnel;3.2 Who are paid monthly or hourly, based on the normal or regular teaching loads as provided for in the policies, rules and standards of the agency concerned;3.3 Whose regular working day of not more than eight (8) hours a day is devoted to the school;3.4 Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working hours in the school; and3.5 Who are not teaching full-time in any other educational institution.

All teaching or academic personnel who do not meet the foregoing qualifications are considered part time.4. Part-time teaching or academic personnel cannot acquire regular or permanent employment status.

5. Teaching or academic personnel who do not meet the minimum academic qualifications shall not acquire tenure or regular status. The school may terminate their services when a qualified teacher becomes available.35

In this case, petitioner applied the maximum three-year probationary period – equivalent to six consecutive semesters – provided in the Manual of Regulations. This can be gleaned from the letter dated March 24, 2004 of Sr. Grace Namocancat, D.C. addressed to respondent, informing the latter of the result of evaluation of his performance for SY 2003-2004 and stating that November 2004 marks his second year of full-time teaching, which means he had one more year to become a permanent employee.36

The circumstance that respondent’s services were hired on semester basis did not negate the applicable probationary period, which is three school years or six consecutive semesters. In Magis Young Achievers’ Learning Center37 the Court explained the three years probationary period rule in this wise: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. 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.38 (Emphasis supplied.)Petitioner argues that respondent’s probationary period expires after each semester he was contracted to teach and hence it was not obligated to renew his services at the end of the fifth semester (March 2005) of his probationary employment. It asserts that the practice of issuing appointment contracts for every semester was legal and therefore respondent was not terminated when petitioner did not renew his contract for another semester as his probationary contract merely expired. Plainly, petitioner considered the subject appointment contracts as fixed-term contracts such that it can validly dismiss respondent at the end of each semester for the reason that his contract had expired.The Court finds no merit in petitioner’s interpretation of the Manual of Regulations, supplemented by DOLE-DECS-CHED-TESDA Order No. 01, series of 1996. As we made clear in the afore-cited case of Magis Young Achievers’ Learning Center, the teacher remains under probation for the entire duration of the three-year period. Subsequently, in the case of Mercado v. AMA Computer College-Parañaque City, Inc.39 the Court, speaking through Justice Arturo D. Brion, recognized the right of respondent school to determine for itself that it shall use fixed-term employment contracts as its medium for hiring its teachers. Nevertheless, the Court held that the teachers’ probationary status should not be disregarded simply because their contracts were fixed-term. Thus:The Conflict: Probationary Statusand Fixed-term EmploymentThe existence of the term-to-term contracts covering the petitioners’ employment is not disputed, nor is it disputed that they were on probationary status – not permanent or regular status – from the time they were employed on May 25, 1998 and until the expiration of their Teaching Contracts on September 7, 2000. As the CA correctly found, their teaching stints only covered a period of at least seven (7) consecutive trimesters or two (2) years and three (3) months of service. This case, however, brings to the fore the essential question of which, between the two factors affecting employment, should prevail

given AMACC’s position that the teachers contracts expired and it had the right not to renew them. In other words, should the teachers’ probationary status be disregarded simply because the contracts were fixed-term?The provision on employment on probationary status under the Labor Code is a primary example of the fine balancing of interests between labor and management that the Code has institutionalized pursuant to the underlying intent of the Constitution.On the one hand, employment on probationary status affords management the chance to fully scrutinize the true worth of hired personnel before the full force of the security of tenure guarantee of the Constitution comes into play. Based on the standards set at the start of the probationary period, management is given the widest opportunity during the probationary period to reject hirees who fail to meet its own adopted but reasonable standards. These standards, together with the just and authorized causes for termination of employment the Labor Code expressly provides, are the grounds available to terminate the employment of a teacher on probationary status. For example, the school may impose reasonably stricter attendance or report compliance records on teachers on probation, and reject a probationary teacher for failing in this regard, although the same attendance or compliance record may not be required for a teacher already on permanent status. At the same time, the same just and authorize[d] causes for dismissal under the Labor Code apply to probationary teachers, so that they may be the first to be laid-off if the school does not have enough students for a given semester or trimester. Termination of employment on this basis is an authorized cause under the Labor Code.Labor, for its part, is given the protection during the probationary period of knowing the company standards the new hires have to meet during the probationary period, and to be judged on the basis of these standards, aside from the usual standards applicable to employees after they achieve permanent status. Under the terms of the Labor Code, these standards should be made known to the teachers on probationary status at the start of their probationary period, or at the very least under the circumstances of the present case, at the start of the semester or the trimester during which the probationary standards are to be applied. Of critical importance in invoking a failure to meet the probationary standards, is that the school should show – as a matter of due process – how these standards have been applied. This is effectively the second notice in a dismissal situation that the law requires as a due process guarantee supporting the security of tenure provision, and is in furtherance, too, of the basic rule in employee dismissal that the employer carries the burden of justifying a dismissal. These rules ensure compliance with the limited security of tenure guarantee the law extends to probationary employees.When fixed-term employment is brought into play under the above probationary period rules, the situation – as in the present case – may at first blush look muddled as fixed-term employment is in itself a valid employment mode under Philippine law and jurisprudence. The conflict, however, is more apparent than real when the respective nature of fixed-term employment and of employment on probationary status are closely examined.The fixed-term character of employment essentially refers to the period agreed upon between the employer and the employee; employment exists only for the duration of the term and ends on its own when the term expires. In a sense, employment on probationary status also refers to a period because of the technical meaning "probation" carries in Philippine labor law – a maximum period of six months, or in the academe, a period of three years for those engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that being "on probation" connotes, i.e., a process of testing and observing the character or abilities of a person who is new to a role or job.Understood in the above sense, the essentially protective character of probationary status for management can readily be appreciated. But this same protective character gives rise to the countervailing but equally protective rule that the probationary period can only last for a specific maximum period and under reasonable, well-laid and properly communicated standards. Otherwise stated, within the period of the probation, any employer move based on the probationary standards and affecting the continuity of the employment must strictly conform to the probationary rules.

Under the given facts where the school year is divided into trimesters, the school apparently utilizes its fixed-term contracts as a convenient arrangement dictated by the trimestral system and not because the workplace parties really intended to limit the period of their relationship to any fixed term and to finish this relationship at the end of that term. If we pierce the veil, so to speak, of the parties’ so-called fixed-term employment contracts, what undeniably comes out at the core is a fixed-term contract conveniently used by the school to define and regulate its relations with its teachers during their probationary period.To be sure, nothing is illegitimate in defining the school-teacher relationship in this manner. The school, however, cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on probationary status would be fully negated as the school may freely choose not to renew contracts simply because their terms have expired. The inevitable effect of course is to wreck the scheme that the Constitution and the Labor Code established to balance relationships between labor and management.Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. This conclusion is immeasurably strengthened by the petitioners’ and the AMACC’s hardly concealed expectation that the employment on probation could lead to permanent status, and that the contracts are renewable unless the petitioners fail to pass the school’s standards.40 (Additional emphasis supplied.)Illegal DismissalNotwithstanding the limited engagement of probationary employees, they are entitled to constitutional protection of security of tenure during and before the end of the probationary period.41 The services of an employee who has been engaged on probationary basis may be terminated for any of the following: (a) a just or (b) an authorized cause; and (c) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.42

Thus, while no vested right to a permanent appointment had as yet accrued in favor of respondent since he had not completed the prerequisite three-year period (six consecutive semesters) necessary for the acquisition of permanent status as required by the Manual of Regulations for Private Schools43 -- which has the force of law44 -- he enjoys a limited tenure. During the said probationary period, he cannot be terminated except for just or authorized causes, or if he fails to qualify in accordance with reasonable standards prescribed by petitioner for the acquisition of permanent status of its teaching personnel.In a letter dated February 26, 2005, petitioner terminated the services of respondent stating that his probationary employment as teacher will no longer be renewed upon its expiry on March 31, 2005, respondent’s fifth semester of teaching. No just or authorized cause was given by petitioner. Prior to this, respondent had consistently achieved above average rating based on evaluation by petitioner’s officials and students. He had also been promoted to the rank of Associate Professor after finishing his master’s degree course on his third semester of teaching. Clearly, respondent’s termination after five semesters of satisfactory service was illegal.Respondent therefore is entitled to continue his three-year probationary period, such that from March 31, 2005, his probationary employment is deemed renewed for the following semester (1st semester of SY 2005-2006). However, given the discordant relations that had arisen from the parties’ dispute, it can be inferred with certainty that petitioner had opted not to retain respondent in its employ beyond the three-year period.On the appropriate relief and damages, we adhere to our disposition in Magis Young Achievers’ Learning Center45:Finally, we rule on the propriety of the monetary awards.1âwphi1 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 F15,000.00 for the next two school years (F15,000.00 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 F300,000.00. 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 F150,000.00 I 12 months x 2 = F25,000.00. Thus, the NLRC was correct in awarding respondent the amount of F325,000.00 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 for review on certiorari is PARTLY GRANTED. The Decision dated March 25, 2011 of the Court of Appeals in CA-G.R. SP Nos. 108103 & 108168 is hereby MODIFIED. Petitioner Universidad de Sta. Isabel is hereby DIRECTED to PAY respondent Marvin-Julian L. Sambajon, Jr. back wages corresponding to his full monthly salaries for one semester (1st semester of SY 2005-2006) and pro-rated 13th month pay.The case is REMANDED to the Labor Arbiter for a recomputation of the amounts due to respondent in conformity with this Decision.No pronouncement as to costs.SO ORDERED.

G.R. No. 195227               April 21, 2014FROILAN M. BERGONIO, JR., DEAN G. PELAEZ, CRISANTO O. GEONGO, WARLITO O. JANAYA, SALVADOR VILLAR, JR., RONALDO CAFIRMA, RANDY LUCAR, ALBERTO ALBUERA, DENNIS NOPUENTE and ALLAN SALVACION, Petitioners, vs.SOUTH EAST ASIAN AIRLINES and IRENE DORNIER, Respondents.D E C I S I O NBRION, J.:We resolve in this petition for review on certiorari1 the challenge to the September 30, 2010 decision2 and the January 13, 2011 resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 112011.This CA decision reversed the July 16, 2008 decision4 of the National Labor Relations Commission (NLRC), which, in turn, affirmed the March 13, 2008 order5 of the Labor Arbiter (LA) in NLRC Case No. 00-04-05469- 2004. The LA granted the Motion filed by petitioners Froilan M. Bergonio, Jr., Dean G. Pelaez, et.al., (collectively, the petitioners) for the release of the garnished amount to satisfy the petitioners’ accrued wages.The Factual AntecedentsOn April 30, 2004, the petitioners filed before the LA a complaint for illegal dismissal and illegal suspension with prayer for reinstatement against respondents South East Asian Airlines (SEAIR) and Irene Dornier as SEAIR’s President (collectively, the respondents).In a decision dated May 31, 2005, the LA found the petitioners illegally dismissed and ordered the respondents, among others, to immediately reinstate the petitioners with full backwages. The respondents received their copy of this decision on July 8, 2005.6

On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for their immediate reinstatement.During the scheduled pre-execution conference held on September 14, 2005, the respondents manifested their option to reinstate the petitioners in the payroll. The payroll reinstatement, however, did not materialize. Thus, on September 22, 2005, the petitioners filed before the LA a manifestation for their immediate reinstatement.On October 3, 2005, the respondents filed an opposition to the petitioners’ motion for execution.7 They claimed that the relationship between them and the petitioners had already been strained because of the petitioners’ threatening text messages, thus precluding the latter’s reinstatement.On October 7, 2005, the LA granted the petitioners’ motion and issued a writ of execution.8

The respondents moved to quash the writ of execution with a prayer to hold in abeyance the implementation of the reinstatement order.9 They maintained that the relationship between them and the petitioners had been so strained that reinstatement was no longer possible.The October 7, 2005 writ of execution was returned unsatisfied. In response, the petitioners filed a motion for re-computation of accrued wages, and, on January 25, 2006, a motion for execution of the re-computed amount. On February 16, 2006, the LA granted this motion and issued an alias writ of execution.10

On February 21, 2006, the respondents issued a Memorandum11 directing the petitioners to report for work on February 24, 2006. The petitioners failed to report for work on the appointed date. On February 28, 2006, the respondents moved before the LA to suspend the order for the petitioners’ reinstatement.12

Meanwhile, the respondents appealed with the NLRC the May 31, 2005 illegal dismissal ruling of the LA.In an order dated August 15, 2006,13 the NLRC dismissed the respondents’ appeal for non-perfection. The NLRC likewise denied the respondents’ motion for reconsideration in its November 29, 2006 resolution, prompting the respondents to file before the CA a petition for certiorari.The NLRC issued an Entry of Judgment on February 6, 2007 declaring its November 29, 2006 resolution final and executory. The petitioners forthwith filed with the LA another motion for the issuance of a writ of execution, which the LA granted on April 24, 2007. The LA also issued another writ of execution.14 A Notice of Garnishment was thereafter issued to the respondents’ depositary bank – Metrobank-San Lorenzo Village Branch, Makati City – in the amount of P1,900,000.00 on June 6, 2007.

On December 18, 2007, the CA rendered its decision (on the illegal dismissal ruling of the LA) partly granting the respondents’ petition. The CA declared the petitioners’ dismissal valid and awarded them P30,000.00 as nominal damages for the respondents’ failure to observe due process.The records show that the petitioners appealed the December 18, 2007 CA decision with this Court. In a resolution dated August 4, 2008, the Court denied the petition. The Court likewise denied the petitioners’ subsequent motion for reconsideration, and thereafter issued an Entry of Judgment certifying that its August 4, 2008 resolution had become final and executory on March 9, 2009.On January 31, 2008, the petitioners filed with the LA an Urgent Ex-Parte Motion for the Immediate Release of the Garnished Amount.In its March 13, 2008 order,15 the LA granted the petitioners’ motion; it directed Metrobank-San Lorenzo to release the P1,900,000.00 garnished amount. The LA found valid and meritorious the respondents’ claim for accrued wages in view of the respondents’ refusal to reinstate the petitioners despite the final and executory nature of the reinstatement aspect of its (LA’s) May 31, 2005 decision. The LA noted that as of the December 18, 2007 CA decision (that reversed the illegal dismissal findings of the LA), the petitioners’ accrued wages amounted toP3,078,366.33.In its July 16, 2008 resolution,16 the NLRC affirmed in toto the LA’s March 13, 2008 order. The NLRC afterwards denied the respondents’ motion for reconsideration for lack of merit.17

The respondents assailed the July 16, 2008 decision and September 29, 2009 resolution of the NLRC via a petition for certiorari filed with the CA.The CA’s rulingThe CA granted the respondents’ petition.18 It reversed and set aside the July 16, 2008 decision and the September 29, 2009 resolution of the NLRC and remanded the case to the Computation and Examination Unit of the NLRC for the proper computation of the petitioners’ accrued wages, computed up to February 24, 2006.The CA agreed that the reinstatement aspect of the LA’s decision is immediately executory even pending appeal, such that the employer is obliged to reinstate and pay the wages of the dismissed employee during the period of appeal until the decision (finding the employee illegally dismissed including the reinstatement order) is reversed by a higher court. Applying this principle, the CA noted that the petitioners’ accrued wages could have been properly computed until December 18, 2007, the date of the CA’s decision finding the petitioners validly dismissed.The CA, however, pointed out that when the LA’s decision is "reversed by a higher tribunal, an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was without fault" on the employer’s part. In this case, the CA declared that the delay in the execution of the reinstatement order was not due to the respondents’ unjustified act or omission. Rather, the petitioners’ refusal to comply with the February 21, 2006 return-to-work Memorandum that the respondents issued and personally delivered to them (the petitioners) prevented the enforcement of the reinstatement order.Thus, the CA declared that, given this peculiar circumstance (of the petitioners’ failure to report for work), the petitioners’ accrued wages should only be computed until February 24, 2006 when they were supposed to report for work per the return-to-work Memorandum. Accordingly, the CA reversed, for grave abuse of discretion, the NLRC’s July 16, 2008 decision that affirmed the LA’s order to release the garnished amount.The PetitionThe petitioners argue that the CA gravely erred when it ruled, contrary to Article 223, paragraph 3 of the Labor Code, that the computation of their accrued wages stopped when they failed to report for work on February 24, 2006. They maintain that the February 21, 2006 Memorandum was merely an afterthought on the respondents’ part to make it appear that they complied with the LA’s October 7, 2005 writ of execution. They likewise argue that had the respondents really intended to have them report for work to comply with the writ of execution, the respondents could and should have issued the Memorandum immediately after the LA issued the first writ of execution. As matters stand, the respondents issued the Memorandum more than four months after the issuance of this writ and only after the LA issued the alias writ of execution on February 16, 2006.Additionally, the petitioners direct the Court’s attention to the several pleadings that the respondents filed to prevent the execution of the reinstatement aspect of the LA’s May 31, 2005

decision, i.e., the Opposition to the Issuance of the Writ of Execution, the Motion to Quash the Writ of Execution and the Motion to Suspend the Order of Reinstatement. They also point out that in all these pleadings, the respondents claimed that strained relationship barred their (the petitioners’) reinstatement, evidently confirming the respondents’ lack of intention to reinstate them.Finally, the petitioners point out that the February 21, 2006 Memorandum directed them to report for work at Clark Field, Angeles, Pampanga instead of at the NAIA-Domestic Airport in Pasay City where they had been assigned. They argue that this directive to report for work at Clark Field violates Article 223, paragraph 3 of the Labor Code that requires the employee’s reinstatement to be under the same terms and conditions prevailing prior to the dismissal. Moreover, they point out that the respondents handed the Memorandum only to Pelaez, who did not act in representation of the other petitioners, and only in the afternoon of February 23, 2006.Thus, the petitioners claim that the delay in their reinstatement was in fact due to the respondents’ unjustified acts and that the respondents never really complied with the LA’s reinstatement order.The Case for the RespondentsThe respondents counter, in their comment,19 that the issues that the petitioners raise in this petition are all factual in nature and had already considered and explained in the CA decision. In any case, the respondents maintain that the petitioners were validly dismissed and that they complied with the LA’s reinstatement order when it directed the petitioners to report back to work, which directive the petitioners did not heed.The respondents add that while the reinstatement of an employee found illegally dismissed is immediately executory, the employer is nevertheless not prohibited from questioning this rule especially when the latter has valid and legal reasons to oppose the employee’s reinstatement. In the petitioners’ case, the respondents point out that their relationship had been so strained that reinstatement was no longer possible. Despite this strained relationship, the respondents point out that they still required the petitioners to report back to work if only to comply with the LA’s reinstatement order. Instead of reporting for work as directed, the petitioners, however, insisted for a payroll reinstatement, which option the law grants to them (the respondents) as employer. Also, contrary to the petitioners’ claim, the Memorandum directed them to report at Clark Field, Pampanga only for a re-orientation of their respective duties and responsibilities.Thus, relying on the CA’s ruling, the respondents claim that the delay in the petitioners’ reinstatement was in fact due to the latter’s refusal to report for work after the issuance of the February 21, 2006 Memorandum in addition to their strained relationship.The Court’s RulingWe GRANT the petition.Preliminary considerations: jurisdictionallimitations of the Court’s Rule 45 review ofthe CA’s Rule 65 decision in labor casesIn a Rule 45 petition for review on certiorari, what we review are the legal errors that the CA may have committed in the assailed decision, in contrast with the review for jurisdictional errors that we undertake in an original certiorari action. In reviewing the legal correctness of the CA decision in a labor case taken under Rule 65 of the Rules of Court, we examine the CA decision in the context that it determined the presence or the absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the NLRC decision, on the merits of the case, was correct. Otherwise stated, we proceed from the premise that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC decision challenged before it. Within this narrow scope of our Rule 45 review, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave abuse of discretion in ruling on the case?20

In addition, the Court’s jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only questions of law.The present petition essentially raises the question – whether the petitioners may recover the accrued wages prior to the CA’s reversal of the LA’s May 31, 2005 decision. This is a question of law that falls well within the Court’s power in a Rule 45 petition.Resolution of this question of law, however, is inextricably linked with the largely factual issue of whether the accrued wages should be computed until December 17, 2008 when the CA reversed the illegal dismissal findings of the LA or only until February 24, 2006 when the petitioners were supposed to report for work per the February 21, 2006 Memorandum. In either

case, the determination of this factual issue presupposes another factual issue, i.e., whether the delay in the execution of the reinstatement order was due to the respondents’ fault. As questions of fact, they are proscribed by our Rule 45 jurisdiction; we generally cannot address these factual issues except to the extent necessary to determine whether the CA correctly found the NLRC in grave abuse of discretion in affirming the release of the garnished amount despite the respondents’ issuance of and the petitioners’ failure to comply with the February 21, 2006 return-to-work Memorandum.The jurisdictional limitations of our Rule 45 review of the CA’s Rule 65 decision in labor cases, notwithstanding, we resolve this petition’s factual issues for we find legal errors in the CA’s decision. Our consideration of the facts taken within this narrow scope of our factual review power convinced us, as our subsequent discussion will show, that no grave abuse of discretion attended the NLRC decision.Nature of the reinstatement aspect of theLA’s decision on a finding of illegaldismissalArticle 223 (now Article 229)21 of the Labor Code governs appeals from, and the execution of, the LA’s decision. Pertinently, paragraph 3, Article 223 of the Labor Code provides:Article 223. APPEALx x x xIn any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. [Emphasis and underscoring supplied]Under paragraph 3, Article 223 of the Labor Code, the LA’s order for the reinstatement of an employee found illegally dismissed is immediately executory even during pendency of the employer’s appeal from the decision. Under this provision, the employer must reinstate the employee – either by physically admitting him under the conditions prevailing prior to his dismissal, and paying his wages; or, at the employer’s option, merely reinstating the employee in the payroll until the decision is reversed by the higher court.22 Failure of the employer to comply with the reinstatement order, by exercising the options in the alternative, renders him liable to pay the employee’s salaries.23

Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which reinstatement is immediately executory.24 Unless the appellate tribunal issues a restraining order, the LA is duty bound to implement the order of reinstatement and the employer has no option but to comply with it.25

Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-executory, i.e., the dismissed employee need not even apply for and the LA need not even issue a writ of execution to trigger the employer’s duty to reinstate the dismissed employee.In Pioneer Texturizing Corp. v. NLRC, et. al.,26 decided in 1997, the Court clarified once and for all this self-executory nature of a reinstatement order. After tracing back the various Court rulings interpreting the amendments introduced by Republic Act No. 671527 on the reinstatement aspect of a labor decision under Article 223 of the Labor Code, the Court concluded that to otherwise "require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of a reinstatement order."28

In short, therefore, with respect to decisions reinstating employees, the law itself has determined a sufficiently overwhelming reason for its immediate and automatic execution even pending appeal.29 The employer is duty-bound to reinstate the employee, failing which, the employer is liable instead to pay the dismissed employee’s salary. The Court’s consistent and prevailing treatment and interpretation of the reinstatement order as immediately enforceable, in fact, merely underscores the right to security of tenure of employees that the Constitution30 protects.The employer is obliged to pay thedismissed employee’s salary if herefuses to reinstate until actualreinstatement or reversal by a higher

tribunal; circumstances that may bar anemployee from receiving the accrued wagesAs we amply discussed above, an employer is obliged to immediately reinstate the employee upon the LA’s finding of illegal dismissal; if the employer fails, it is liable to pay the salary of the dismissed employee. Of course, it is not always the case that the LA’s finding of illegal dismissal is, on appeal by the employer, upheld by the appellate court. After the LA’s decision is reversed by a higher tribunal, the employer’s duty to reinstate the dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the employee in the actual service or in the payroll. The employee, in turn, is not required to return the wages that he had received prior to the reversal of the LA’s decision.31

The reversal by a higher tribunal of the LA’s finding (of illegal dismissal), notwithstanding, an employer, who, despite the LA’s order of reinstatement, did not reinstate the employee during the pendency of the appeal up to the reversal by a higher tribunal may still be held liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time the higher tribunal reverses the decision.32 The rule, therefore, is that an employee may still recover the accrued wages up to and despite the reversal by the higher tribunal. This entitlement of the employee to the accrued wages proceeds from the immediate and self-executory nature of the reinstatement aspect of the LA’s decision.By way of exception to the above rule, an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. To determine whether an employee is thus barred, two tests must be satisfied: (1) actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. Note that under the second test, the delay must be without the employer’s fault. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the LA’s decision.33

Application of the two-fold test; thepetitioners are entitled to receive theiraccrued salaries until December 18, 2007As we earlier pointed out, the core issue to be resolved is whether the petitioners may recover the accrued wages until the CA’s reversal of the LA’s decision. An affirmative answer to this question will lead us to reverse the assailed CA decision for legal errors and reinstate the NLRC’s decision affirming the release of the garnished amount. Otherwise, we uphold the CA’s decision to be legally correct. To resolve this question, we apply the two-fold test.First, the existence of delay - whether there was actual delay or whether the order of reinstatement pending appeal was not executed prior to its reversal? We answer this test in the affirmative.To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and ordering their immediate reinstatement. Per the records, the respondents received copy of this decision on July 8, 2005. On August 20, 2005, the petitioners filed before the LA a Motion for Issuance of Writ of Execution for their immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005. From the time the respondents received copy of the LA’s decision, and the issuance of the writ of execution, until the CA reversed this decision on December 17, 2008, the respondents had not reinstated the petitioners, either by actual reinstatement or in the payroll. This continued non-execution of the reinstatement order in fact moved the LA to issue an alias writ of execution on February 16, 2006 and another writ of execution on April 24, 2007.From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of the LA’s May 31, 2005 decision before it was reversed in the CA’s decision.Second, the cause of the delay – whether the delay was not due to the employer’s unjustified act or omission. We answer this test in the negative; we find that the delay in the execution of the reinstatement pending appeal was due to the respondents’ unjustified acts.In reversing, for grave abuse of discretion, the NLRC’s order affirming the release of the garnished amount, the CA relied on the fact of the issuance of the February 21, 2006 Memorandum and of the petitioners’ failure to comply with its return-to-work directive. In other words, with the issuance of this Memorandum, the CA considered the respondents as having sufficiently complied with their obligation to reinstate the petitioners. And, the subsequent delay

in or the non-execution of the reinstatement order was no longer the respondents’ fault, but rather of the petitioners who refused to report back to work despite the directive.Our careful consideration of the facts and the circumstances that surrounded the case convinced us that the delay in the reinstatement pending appeal was due to the respondents’ fault. For one, the respondents filed several pleadings to suspend the execution of the LA’s reinstatement order, i.e., the opposition to the petitioners’ motion for execution filed on October 3, 2005; the motion to quash the October 7, 2005 writ of execution with prayer to hold in abeyance the implementation of the reinstatement order; and the motion to suspend the order for the petitioners’ reinstatement filed on February 28, 2006 after the LA issued the February 16, 2006 alias writ of execution. These pleadings, to our mind, show a determined effort on the respondents’ part to prevent or suspend the execution of the reinstatement pending appeal.Another reason is that the respondents, contrary to the CA’s conclusion, did not sufficiently notify the petitioners of their intent to actually reinstate them; neither did the respondents give them ample opportunity to comply with the return-to-work directive. We note that the respondents delivered the February 21, 2006 Memorandum (requiring the petitioners to report for work on February 24, 2006) only in the afternoon of February 23, 2006. Worse, the respondents handed the notice to only one of the petitioners – Pelaez – who did not act in representation of the others. Evidently, the petitioners could not reasonably be expected to comply with a directive that they had no or insufficient notice of.Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the LA’s decision, i.e., by filing several motions for execution of the reinstatement order, and motion to cite the respondents in contempt and re-computation of the accrued wages for the respondents’ continued failure to reinstate them.These facts altogether show that the respondents were not at all sincere in reinstating the petitioners. These facts – when taken together with the fact of delay – reveal the respondents’ obstinate resolve and willful disregard of the immediate and self-executory nature of the reinstatement aspect of the LA’s decision.A further and final point that we considered in concluding that the delay was due to the respondents’ fault is the fact that per the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules),34 employers are required to submit a report of compliance within ten (10) calendar days from receipt of the LA’s decision, noncompliance with which signifies a clear refusal to reinstate. Arguably, the 2005 NLRC Rules took effect only on January 7, 2006; hence, the respondents could not have been reasonably expected to comply with this duty that was not yet in effect when the LA rendered its decision (finding illegal dismissal) and issued the writ of execution in 2005. Nevertheless, when the LA issued the February 16, 2006 alias writ of execution and the April 24, 2007 writ of execution, the 2005 NLRC Rules was already in place such that the respondents had become duty-bound to submit the required compliance report; their noncompliance with this rule all the more showed a clear and determined refusal to reinstate.All told, under the facts and the surrounding circumstances, the delay was due to the acts of the respondents that we find were unjustified. We reiterate and emphasize, Article 223, paragraph 3, of the Labor Code mandates the employer to immediately reinstate the dismissed employee, either by actually reinstating him/her under the conditions prevailing prior to the dismissal or, at the option of the employer, in the payroll. The respondents' failure in this case to exercise either option rendered them liable for the petitioners' accrued salary until the LA decision was reversed by the CA on December 17, 2008. We, therefore, find that the NLRC, in affirming the release of the garnished amount, merely implemented the mandate of Article 223; it simply recognized as immediate and self-executory the reinstatement aspect of the LA's decision.Accordingly, we reverse for legal errors the CA decision.1âwphi1 We find no grave abuse of discretion attended the NLRC's July 16, 2008 resolution that affirmed the March 13, 2008 decision of the LA granting the release of the garnished amount.WHEREFORE, in light of these considerations, we hereby GRANT the petition. We REVERSE and SET ASIDE the September 30, 2010 decision and the January 13, 2011 resolution of the Court of Appeals (CA) in CA-G.R. Sp No. 112011. Accordingly, we REINSTATE the July 16, 2008 decision of the National Labor Relations Commission (NLRC) affirming the March 13, 2008 order of the Labor Arbiter in NLRC Case No. 00-04-05469-2004.Costs against the respondents South East Asian Airlines and Irene Dornier.SO ORDERED.

G.R. No. 192998               April 2, 2014BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners, vs.R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS, Respondents.D E C I S I O NREYES, J.:This is a petition for review on certiorari1 filed under Rule 45 of the Rules of Court, assailing the Decision2 dated March 11, 2010 and Resolution3 dated June 28, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 111150, which affirmed with modification the Decision4 dated June 23, 2009 of the National Labor Relations Commission (NLRC) in NLRC LAC Case No. 07-002648-08.The Antecedent FactsOn July 4, 2007, Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco) filed a complaint for illegal dismissal against R. Villegas Taxi Transport and/or Romualdo Villegas (Romualdo) and Andy Villegas (Andy) (respondents). At that time, a similar case had already been filed by Isidro G. Endraca (Endraca) against the same respondents. The two (2) cases were subsequently consolidated.5

In their position paper,6 Tenazas, Francisco and Endraca (petitioners) alleged that they were hired and dismissed by the respondents on the following dates:

Name Date of Hiring Date of Dismissal Salary

Bernard A. Tenazas 10/1997 07/03/07 Boundary System

Jaime M. Francisco 04/10/04 06/04/07 Boundary System

Isidro G. Endraca 04/2000 03/06/06 Boundary System7

Relaying the circumstances of his dismissal, Tenazas alleged that on July 1, 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a dent on the left fender near the driver seat. The cost of repair for the damage was estimated at P500.00. Upon reporting the incident to the company, he was scolded by respondents Romualdo and Andy and was told to leave the garage for he is already fired. He was even threatened with physical harm should he ever be seen in the company’s premises again. Despite the warning, Tenazas reported for work on the following day but was told that he can no longer drive any of the company’s units as he is already fired.8

Francisco, on the other hand, averred that his dismissal was brought about by the company’s unfounded suspicion that he was organizing a labor union. He was instantaneously terminated, without the benefit of procedural due process, on June 4, 2007.9

Endraca, for his part, alleged that his dismissal was instigated by an occasion when he fell short of the required boundary for his taxi unit. He related that before he was dismissed, he brought his taxi unit to an auto shop for an urgent repair. He was charged the amount of P700.00 for the repair services and the replacement parts. As a result, he was not able to meet his boundary for the day. Upon returning to the company garage and informing the management of the incident, his driver’s license was confiscated and was told to settle the deficiency in his boundary first before his license will be returned to him. He was no longer allowed to drive a taxi unit despite his persistent pleas.10

For their part, the respondents admitted that Tenazas and Endraca were employees of the company, the former being a regular driver and the latter a spare driver. The respondents, however, denied that Francisco was an employee of the company or that he was able to drive one of the company’s units at any point in time.11

The respondents further alleged that Tenazas was never terminated by the company. They claimed that on July 3, 2007, Tenazas went to the company garage to get his taxi unit but was informed that it is due for overhaul because of some mechanical defects reported by the other driver who takes turns with him in using the same. He was thus advised to wait for further notice from the company if his unit has already been fixed. On July 8, 2007, however, upon being informed that his unit is ready for release, Tenazas failed to report back to work for no apparent reason.12

As regards Endraca, the respondents alleged that they hired him as a spare driver in February 2001. They allow him to drive a taxi unit whenever their regular driver will not be able to report

for work. In July 2003, however, Endraca stopped reporting for work without informing the company of his reason. Subsequently, the respondents learned that a complaint for illegal dismissal was filed by Endraca against them. They strongly maintained, however, that they could never have terminated Endraca in March 2006 since he already stopped reporting for work as early as July 2003. Even then, they expressed willingness to accommodate Endraca should he wish to work as a spare driver for the company again since he was never really dismissed from employment anyway.13

On May 29, 2008, the petitioners, by registered mail, filed a Motion to Admit Additional Evidence.14 They alleged that after diligent efforts, they were able to discover new pieces of evidence that will substantiate the allegations in their position paper. Attached with the motion are the following: (a) Joint Affidavit of the petitioners;15 (2) Affidavit of Good Faith of Aloney Rivera, a co-driver;16 (3) pictures of the petitioners wearing company shirts;17 and (4) Tenazas’ Certification/Record of Social Security System (SSS) contributions.18

The Ruling of the Labor ArbiterOn May 30, 2008, the Labor Arbiter (LA) rendered a Decision,19 which pertinently states, thus:In the case of complainant Jaime Francisco, respondents categorically denied the existence of an employer-employee relationship. In this situation, the burden of proof shifts to the complainant to prove the existence of a regular employment. Complainant Francisco failed to present evidence of regular employment available to all regular employees, such as an employment contract, company ID, SSS, withholding tax certificates, SSS membership and the like.In the case of complainant Isidro Endraca, respondents claim that he was only an extra driver who stopped reporting to queue for available taxi units which he could drive. In fact, respondents offered him in their Position Paper on record, immediate reinstatement as extra taxi driver which offer he refused.In case of Bernard Tenazas, he was told to wait while his taxi was under repair but he did not report for work after the taxi was repaired. Respondents[,] in their Position Paper, on record likewise, offered him immediate reinstatement, which offer he refused.We must bear in mind that the complaint herein is one of actual dismissal. But there was no formal investigations, no show cause memos, suspension memos or termination memos were never issued. Otherwise stated, there is no proof of overt act of dismissal committed by herein respondents.We are therefore constrained to rule that there was no illegal dismissal in the case at bar.The situations contemplated by law for entitlement to separation pay does [sic] not apply.WHEREFORE, premises considered, instant consolidated complaints are hereby dismissed for lack of merit.SO ORDERED.20

The Ruling of the NLRCUnyielding, the petitioners appealed the decision of the LA to the NLRC. Subsequently, on June 23, 2009, the NLRC rendered a Decision,21 reversing the appealed decision of the LA, holding that the additional pieces of evidence belatedly submitted by the petitioners sufficed to establish the existence of employer-employee relationship and their illegal dismissal. It held, thus:In the challenged decision, the Labor Arbiter found that it cannot be said that the complainants were illegally dismissed, there being no showing, in the first place, that the respondent [sic] terminated their services. A portion thereof reads:"We must bear in mind that the complaint herein is one of actual dismissal. But there were no formal investigations, no show cause memos, suspension memos or termination memos were never issued. Otherwise stated, there is no proof of overt act of dismissal committed by herein respondents.We are therefore constrained to rule that there was no illegal dismissal in the case at bar."Issue: [W]hether or not the complainants were illegally dismissed from employment.It is possible that the complainants’ Motion to Admit Additional Evidence did not reach the Labor Arbiter’s attention because he had drafted the challenged decision even before they submitted it, and thereafter, his staff attended only to clerical matters, and failed to bring the motion in question to his attention. It is now up to this Commission to consider the complainants’ additional evidence. Anyway, if this Commission must consider evidence submitted for the first time on appeal (Andaya vs. NLRC, G.R. No. 157371, July 15, 2005), much more so must it consider evidence that was simply overlooked by the Labor Arbiter.

Among the additional pieces of evidence submitted by the complainants are the following: (1) joint affidavit (records, p. 51-52) of the three (3) complainants; (2) affidavit (records, p. 53) of Aloney Rivera y Aldo; and (3) three (3) pictures (records, p. 54) referred to by the complainant in their joint affidavit showing them wearing t-shirts bearing the name and logo of the respondent’s company.x x x xWHEREFORE, the decision appealed from is hereby REVERSED. Respondent Rom[u]aldo Villegas doing business under the name and style Villegas Taxi Transport is hereby ordered to pay the complainants the following (1) full backwages from the date of their dismissal (July 3, 2007 for Tena[z]as, June 4, 2004 for Francisco, and March 6, 2006 for Endraca[)] up to the date of the finality of this decision[;] (2) separation pay equivalent to one month for every year of service; and (3) attorney’s fees equivalent to ten percent (10%) of the total judgment awards.SO ORDERED.22

On July 24, 2009, the respondents filed a motion for reconsideration but the NLRC denied the same in its Resolution23 dated September 23, 2009.The Ruling of the CAUnperturbed, the respondents filed a petition for certiorari with the CA. On March 11, 2010, the CA rendered a Decision,24 affirming with modification the Decision dated June 23, 2009 of the NLRC. The CA agreed with the NLRC’s finding that Tenazas and Endraca were employees of the company, but ruled otherwise in the case of Francisco for failing to establish his relationship with the company. It also deleted the award of separation pay and ordered for reinstatement of Tenazas and Endraca. The pertinent portions of the decision read as follows:At the outset, We declare that respondent Francisco failed to prove that an employer-employee relationship exists between him and R. Transport. If there is no employer-employee relationship in the first place, the duty of R. Transport to adhere to the labor standards provisions of the Labor Code with respect to Francisco is questionable.x x x xAlthough substantial evidence is not a function of quantity but rather of quality, the peculiar environmental circumstances of the instant case demand that something more should have been proffered. Had there been other proofs of employment, such as Francisco’s inclusion in R.R.Transport’s payroll, this Court would have affirmed the finding of employer-employee relationship.1âwphi1 The NLRC, therefore, committed grievous error in ordering R. Transport to answer for Francisco’s claims.We now tackle R. Transport’s petition with respect to Tenazas and Endraca, who are both admitted to be R. Transport’s employees. In its petition, R. Transport puts forth the theory that it did not terminate the services of respondents but that the latter deliberately abandoned their work. We cannot subscribe to this theory.x x x xConsidering that the complaints for illegal dismissal were filed soon after the alleged dates of dismissal, it cannot be inferred that respondents Tenazas and Endraca intended to abandon their employment. The complainants for dismissal are, in themselves, pleas for the continuance of employment. They are incompatible with the allegation of abandonment. x x x.For R. Transport’s failure to discharge the burden of proving that the dismissal of respondents Tenazas and Endraca was for a just cause, We are constrained to uphold the NLRC’s conclusion that their dismissal was not justified and that they are entitled to back wages. Because they were illegally dismissed, private respondents Tenazas and Endraca are entitled to reinstatement and back wages x x x.x x x xHowever, R. Transport is correct in its contention that separation pay should not be awarded because reinstatement is still possible and has been offered. It is well[-]settled that separation pay is granted only in instances where reinstatement is no longer feasible or appropriate, which is not the case here.x x x xWHEREFORE, the Decision of the National Labor Relations Commission dated 23 June 2009, in NLRC LAC Case No. 07-002648-08, and its Resolution dated 23 September 2009 denying reconsideration thereof are AFFIRMED with MODIFICATION in that the award of Jaime

Francisco’s claims is DELETED. The separation pay granted in favor of Bernard Tenazas and Isidro Endraca is, likewise, DELETED and their reinstatement is ordered instead.SO ORDERED.25 (Citations omitted)On March 19, 2010, the petitioners filed a motion for reconsideration but the same was denied by the CA in its Resolution26 dated June 28, 2010.Undeterred, the petitioners filed the instant petition for review on certiorari before this Court on July 15, 2010.The Ruling of this CourtThe petition lacks merit.Pivotal to the resolution of the instant case is the determination of the existence of employer-employee relationship and whether there was an illegal dismissal. Remarkably, the LA, NLRC and the CA had varying assessment on the matters at hand. The LA believed that, with the admission of the respondents, there is no longer any question regarding the status of both Tenazas and Endraca being employees of the company. However, he ruled that the same conclusion does not hold with respect to Francisco whom the respondents denied to have ever employed or known. With the respondents’ denial, the burden of proof shifts to Francisco to establish his regular employment. Unfortunately, the LA found that Francisco failed to present sufficient evidence to prove regular employment such as company ID, SSS membership, withholding tax certificates or similar articles. Thus, he was not considered an employee of the company. Even then, the LA held that Tenazas and Endraca could not have been illegally dismissed since there was no overt act of dismissal committed by the respondents.27

On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners were all employees of the company. The NLRC premised its conclusion on the additional pieces of evidence belatedly submitted by the petitioners, which it supposed, have been overlooked by the LA owing to the time when it was received by the said office. It opined that the said pieces of evidence are sufficient to establish the circumstances of their illegal termination. In particular, it noted that in the affidavit of the petitioners, there were allegations about the company’s practice of not issuing employment records and this was not rebutted by the respondents. It underscored that in a situation where doubt exists between evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the employee. It awarded the petitioners with: (1) full backwages from the date of their dismissal up to the finality of the decision; (2) separation pay equivalent to one month of salary for every year of service; and (3) attorney’s fees.On petition for certiorari, the CA affirmed with modification the decision of the NLRC, holding that there was indeed an illegal dismissal on the part of Tenazas and Endraca but not with respect to Francisco who failed to present substantial evidence, proving that he was an employee of the respondents. The CA likewise dismissed the respondents’ claim that Tenazas and Endraca abandoned their work, asseverating that immediate filing of a complaint for illegal dismissal and persistent pleas for continuance of employment are incompatible with abandonment. It also deleted the NLRC’s award of separation pay and instead ordered that Tenazas and Endraca be reinstated.28

"Well-settled is the rule that the jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court is limited to reviewing only errors of law, not of fact, unless the factual findings complained of are completely devoid of support from the evidence on record, or the assailed judgment is based on a gross misapprehension of facts."29 The Court finds that none of the mentioned circumstances is present in this case.In reviewing the decision of the NLRC, the CA found that no substantial evidence was presented to support the conclusion that Francisco was an employee of the respondents and accordingly modified the NLRC decision. It stressed that with the respondents’ denial of employer-employee relationship, it behooved Francisco to present substantial evidence to prove that he is an employee before any question on the legality of his supposed dismissal becomes appropriate for discussion. Francisco, however, did not offer evidence to substantiate his claim of employment with the respondents. Short of the required quantum of proof, the CA correctly ruled that the NLRC’s finding of illegal dismissal and the monetary awards which necessarily follow such ruling lacked factual and legal basis and must therefore be deleted.The action of the CA finds support in Anonas Construction and Industrial Supply Corp., et al. v. NLRC, et al.,30where the Court reiterated:

[J]udicial review of decisions of the NLRC via petition for certiorari under Rule 65, as a general rule, is confined only to issues of lack or excess of jurisdiction and grave abuse of discretion on the part of the NLRC. The CA does not assess and weigh the sufficiency of evidence upon which the LA and the NLRC based their conclusions. The issue is limited to the determination of whether or not the NLRC acted without or in excess of its jurisdiction, or with grave abuse of discretion in rendering the resolution, except if the findings of the NLRC are not supported by substantial evidence.31 (Citation omitted and emphasis ours)It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, "the quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion."32 "[T]he burden of proof rests upon the party who asserts the affirmative of an issue."33 Corollarily, as Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer evidence to prove the existence of said relationship."[I]n determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (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 on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element."34

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status.35

In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel file that could somehow depict his status as an employee. Anent his claim that he was not issued with employment records, he could have, at least, produced his social security records which state his contributions, name and address of his employer, as his co-petitioner Tenazas did. He could have also presented testimonial evidence showing the respondents’ exercise of control over the means and methods by which he undertakes his work. This is imperative in light of the respondents’ denial of his employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that he was his employer. Specifically, in his Affidavit,36 Emmanuel alleged that Francisco was employed as a spare driver in his taxi garage from January 2006 to December 2006, a fact that the latter failed to deny or question in any of the pleadings attached to the records of this case. The utter lack of evidence is fatal to Francisco’s case especially in cases like his present predicament when the law has been very lenient in not requiring any particular form of evidence or manner of proving the presence of employer-employee relationship.In Opulencia Ice Plant and Storage v. NLRC,37 this Court emphasized, thus:No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a written instrument.38

Here, Francisco simply relied on his allegation that he was an employee of the company without any other evidence supporting his claim. Unfortunately for him, a mere allegation in the position paper is not tantamount to evidence.39 Bereft of any evidence, the CA correctly ruled that Francisco could not be considered an employee of the respondents.The CA’s order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay, is also well in accordance with prevailing jurisprudence. In Macasero v. Southern Industrial Gases Philippines,40 the Court reiterated, thus:[A]n illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.1âwphi1 The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.41 (Emphasis supplied)Clearly, it is only when reinstatement is no longer feasible that the payment of separation pay is ordered in lieu thereof. For instance, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, it would be more prudent to order payment of separation pay instead of reinstatement.42

This doctrine of strained relations, however, should not be used recklessly or applied loosely43 nor be based on impression alone. "It bears to stress that reinstatement is the rule and, for the exception of strained relations to apply, it should be proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned."44

Moreover, the existence of strained relations, it must be emphasized, is a question of fact. In Golden Ace Builders v. Talde,45 the Court underscored:Strained relations must be demonstrated as a fact, however, to be adequately supported by evidence—substantial evidence to show that the relationship between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy.46 (Citations omitted and emphasis ours)After a perusal of the NLRC decision, this Court failed to find the factual basis of the award of separation pay to the petitioners. The NLRC decision did not state the facts which demonstrate that reinstatement is no longer a feasible option that could have justified the alternative relief of granting separation pay instead.The petitioners themselves likewise overlooked to allege circumstances which may have rendered their reinstatement unlikely or unwise and even prayed for reinstatement alongside the payment of separation pay in their position paper.47 A bare claim of strained relations by reason of termination is insufficient to warrant the granting of separation pay. Likewise, the filing of the complaint by the petitioners does not necessarily translate to strained relations between the parties. As a rule, no strained relations should arise from a valid and legal act asserting one’s right.48 Although litigation may also engender a certain degree of hostility, the understandable strain in the parties’ relation would not necessarily rule out reinstatement which would, otherwise, become the rule rather the exception in illegal dismissal cases.49 Thus, it was a prudent call for the CA to delete the award of separation pay and order for reinstatement instead, in accordance with the general rule stated in Article 27950 of the Labor Code.Finally, the Court finds the computation of the petitioners' backwages at the rate of P800.00 daily reasonable and just under the circumstances. The said rate is consistent with the ruling of this Court in Hyatt Taxi Services, Inc. v. Catinoy,51 which dealt with the same matter.WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorari is DENIED. The Decision dated March 11, 2010 and Resolution dated June 28, 2010 of the Court of Appeals in CA-G.R. SP No. 111150 are AFFIRMED.SO ORDERED.

G.R. No. 163700               April 18, 2012CHARLIE JAO, Petitioner, vs.BCC PRODUCTS SALES INC., and TERRANCE TY, Respondents.D E C I S I O NBERSAMIN, J.:The issue is whether petitioner was respondents’ employee or not. Respondents denied an employer-employee relationship with petitioner, who insisted the contrary.Through his petition for review on certiorari, petitioner appeals the decision promulgated by the Court of Appeals (CA) on February 27, 2004,1 finding no employee-employer relationship between him and respondents, thereby reversing the ruling by the National Labor Relations Commission (NLRC) to the effect that he was the employee of respondents.AntecedentsPetitioner maintained that respondent BCC Product Sales Inc. (BCC) and its President, respondent Terrance Ty (Ty), employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle the financial aspect of BCC’s business;2 that on October 19,1995, the security guards of BCC, acting upon the instruction of Ty, barred him from entering the premises of BCC where he then worked; that his attempts to report to work in November and December 12, 1995 were frustrated because he continued to be barred from entering the premises of BCC;3 and that he filed a complaint dated December 28, 1995 for illegal dismissal, reinstatement with full backwages, non-payment of wages, damages and attorney’s fees.4

Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC), the major creditor and supplier of BCC; and that SFC had posted him as its comptroller in BCC to oversee BCC’s finances and business operations and to look after SFC’s interests or investments in BCC.5

Although Labor Arbiter Felipe Pati ruled in favor of petitioner on June 24, 1996, 6 the NLRC vacated the ruling and remanded the case for further proceedings.7 Thereafter, Labor Arbiter Jovencio Ll. Mayor rendered a new decision on September 20, 2001, dismissing petitioner’s complaint for want of an employer-employee relationship between the parties.8 Petitioner appealed the September 20, 2001 decision of Labor Arbiter Mayor.On July 31, 2002, the NLRC rendered a decision reversing Labor Arbiter Mayor’s decision, and declaring that petitioner had been illegally dismissed. It ordered the payment of unpaid salaries, backwages and 13th month pay, separation pay and attorney’s fees.9 Respondents moved for the reconsideration of the NLRC decision, but their motion for reconsideration was denied on September 30, 2002.10 Thence, respondents assailed the NLRC decision on certiorari in the CA.Ruling of the CAOn February 27, 2004, the CA promulgated its assailed decision,11 holding:After a judicious review of the records vis-à-vis the respective posturing of the contending parties, we agree with the finding that no employer-employee relationship existed between petitioner BCC and the private respondent. On this note, the conclusion of the public respondent must be reversed for being issued with grave abuse of discretion."Etched in an unending stream of cases are the four (4) standards in determining the existence of an employer-employee relationship, namely, (a) the manner of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or absence of power of dismissal; and, (d) the presence or absence of control of the putative employee’s conduct." Of these powers the power of control

over the employee’s conduct is generally regarded as determinative of the existence of the relationship.Apparently, in the case before us, all these four elements are absent. First, there is no proof that the services of the private respondent were engaged to perform the duties of a comptroller in the petitioner company. There is no proof that the private respondent has undergone a selection procedure as a standard requisite for employment, especially with such a delicate position in the company. Neither is there any proof of his appointment nor is there any showing that the parties entered into an employment contract, stipulating thereof that he will receive P20,000.00/month salary as comptroller, before the private respondent commenced with his work as such. Second, as clearly established on record, the private respondent was not included in the petitioner company’s payroll during the time of his alleged employment with the former. True, the name of the private respondent Charlie Jao appears in the payroll however it does not prove that he has received his remuneration for his services. Notably, his name was not among the employees who will receive their salaries as represented by the payrolls. Instead, it appears therein as a comptroller who is authorized to approve the same. Suffice it to state that it is rather obscure for a certified public accountant doing the functions of a comptroller from September 1995 up to December 1995 not to receive his salary during the said period. Verily, such scenario does not conform with the usual and ordinary experience of man. Coming now to the most controlling factor, the records indubitably reveal the undisputed fact that the petitioner company did not have nor did not exercise the power of control over the private respondent. It did not prescribe the manner by which the work is to be carried out, or the time by which the private respondent has to report for and leave from work. As already stated, the power of control is such an important factor that other requisites may even be disregarded. In Sevilla v. Court of Appeals, the Supreme Court emphatically held, thus:"The "control test," under which the person for whom the services are rendered reserves the right to direct not only the end to be achieved but also the means for reaching such end, is generally relied on by the courts."We have carefully examined the evidence submitted by the private respondent in the formal offer of evidence and unfortunately, other than the bare assertions of the private respondent which he miserably failed to substantiate, we find nothing therein that would decisively indicate that the petitioner BCC exercised the fundamental power of control over the private respondent in relation to his employment—not even the ID issued to the private respondent and the affidavits executed by Bertito Jemilla and Rogelio Santias. At best, these pieces of documents merely suggest the existence of employer-employee relationship as intimated by the NLRC. On the contrary, it would appear that the said sworn statement provided a substantial basis to support the contention that the private respondent worked at the petitioner BCC as SFC’s representative, being its major creditor and supplier of goods and merchandise. Moreover, as clearly pointed out by the petitioner in his Reply to the private respondent’s Comment, it is unnatural for SFC to still employ the private respondent "to oversee and supervise collections of account receivables due SFC from its customers or clients" like the herein petitioner BCC on a date later than December, 1995 considering that a criminal complaint has already been instituted against him.Sadly, the private respondent failed to sufficiently discharge the burden of showing with legal certainty that employee-employer relationship existed between the parties. On the other hand, it was clearly shown by the petitioner that it neither exercised control nor supervision over the conduct of the private respondent’s employment.

Hence, the allegation that there is employer-employee relationship must necessarily fail.Consequently, a discussion on the issue of illegal dismissal therefore becomes unnecessary.WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision of the public respondent NLRC dated July 31, 2002 and the Resolution dated September 30, 2002 are REVERSED and SET ASIDE. Accordingly, the decision of the Labor Arbiter dated September 20, 2001 is hereby REINSTATED.SO ORDERED.After the CA denied petitioner’s motion for reconsideration on May 14, 2004,12 he filed a motion for extension to file petition for review, which the Court denied through the resolution dated July 7, 2004 for failure to render an explanation on why the service of copies of the motion for extension on respondents was not personally made.13The denial notwithstanding, he filed his petition for review on certiorari. The Court denied the petition on August 18, 2004 in view of the denial of the motion for extension of time and the continuing failure of petitioner to render the explanation as to the non-personal service of the petition on respondents.14 However, upon a motion for reconsideration, the Court reinstated the petition for review on certiorari and required respondents to comment.15

IssueThe sole issue is whether or not an employer-employee relationship existed between petitioner and BCC. A finding on the existence of an employer-employee relationship will automatically warrant a finding of illegal dismissal, considering that respondents did not state any valid grounds to dismiss petitioner.RulingThe petition lacks merit.The existence of an employer-employee relationship is a question of fact. Generally, a re-examination of factual findings cannot be done by the Court acting on a petition for review on certiorari because the Court is not a trier of facts but reviews only questions of law. Nor may the Court be bound to analyze and weigh again the evidence adduced and considered in the proceedings below.16 This rule is not absolute, however, and admits of exceptions. For one, the Court may look into factual issues in labor cases when the factual findings of the Labor Arbiter, the NLRC, and the CA are conflicting.17

Here, the findings of the NLRC differed from those of the Labor Arbiter and the CA. This conflict among such adjudicating offices compels the Court’s exercise of its authority to review and pass upon the evidence presented and to draw its own conclusions therefrom.To prove his employment with BCC, petitioner offered the following: (a) BCC Identification Card (ID) issued to him stating his name and his position as "comptroller," and bearing his picture, his signature, and the signature of Ty; (b) a payroll of BCC for the period of October 1-15, 1996 that petitioner approved as comptroller; (c) various bills and receipts related to expenditures of BCC bearing the signature of petitioner; (d) various checks carrying the signatures of petitioner and Ty, and, in some checks, the signature of petitioner alone; (e) a court order showing that the issuing court considered petitioner’s ID as proof of his employment with BCC; (f) a letter of petitioner dated March 1, 1997 to the Department of Justice on his filing of a criminal case for estafa against Ty for non-payment of wages; (g) affidavits of some employees of BCC attesting that petitioner was their co-employee in BCC; and (h) a notice of raffle dated December 5, 1995 showing that petitioner, being an employee of BCC, received the notice of raffle in behalf of BCC.18

Respondents denied that petitioner was BCC’s employee. They affirmed that SFC had installed petitioner as its comptroller in BCC to oversee and supervise SFC’s collections and the account of BCC to protect SFC’s interest; that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to his work of overseeing the financial operations of BCC for SFC; that the ID should not be considered as evidence of petitioner’s employment in BCC;19 that petitioner executed an affidavit in March 1996,20 stating, among others, as follows:

1. I am a CPA (Certified Public Accountant) by profession but presently associated with, or employed by, Sobien Food Corporation with the same business address as abovestated;2. In the course of my association with, or employment by, Sobien Food Corporation (SFC, for short), I have been entrusted by my employer to oversee and supervise collections on account of receivables due SFC from its customers or clients; for instance, certain checks due and turned over by one of SFC’s customers is BCC Product Sales, Inc., operated or run by one Terrance L. Ty, (President and General manager), pursuant to, or in accordance with, arrangements or agreement thereon; such arrangement or agreement is duly confirmed by said Terrance Ty, as shown or admitted by him in a public instrument executed therefor, particularly par. 2 of that certain Counter-Affidavit executed and subscribed on December 11, 1995, xerox copy of which is hereto attached, duly marked as Annex "A" and made integral part hereof.3. Despite such admission of an arrangement, or agreement insofar as BCC-checks were delivered to, or turned over in favor of SFC, Mr. Terrance Ty, in a desire to blemish my reputation or to cause me dishonor as well as to impute unto myself the commission of a crime, state in another public instrument executed therefor in that:

"3. That all the said 158 checks were unlawfully appropriated by a certain Charlie Jao absolutely without any authority from BCC and the same were reportedly turned over by said Mr. Jao to a person who is not an agent or is not authorized representative of BCC."xerox copy of which document (Affidavit) is hereto attached, duly marked as Annex "B" and made integral part hereof. (emphasis supplied)and that the affidavit constituted petitioner’s admission of the arrangement or agreement between BCC and SFC for the latter to appoint a comptroller to oversee the former’s operations.Petitioner counters, however, that the affidavit did not establish the absence of an employer-employee relationship between him and respondents because it had been executed in March 1996, or after his employment with respondents had been terminated on December 12, 1995; and that the affidavit referred to his subsequent employment by SFC following the termination of his employment by BCC.21

We cannot side with petitioner.Our perusal of the affidavit of petitioner compels a conclusion similar to that reached by the CA and the Labor Arbiter to the effect that the affidavit actually supported the contention that petitioner had really worked in BCC as SFC’s representative. It does seem more natural and more believable that petitioner’s affidavit was referring to his employment by SFC even while he was reporting to BCC as a comptroller in behalf of SFC. As respondents pointed out, it was implausible for SFC to still post him to oversee and supervise the collections of accounts receivables due from BCC beyond December 1995 if, as he insisted, BCC had already illegally dismissed him and had even prevented him from entering the premises of BCC. Given the patent animosity

and strained relations between him and respondents in such circumstances, indeed, how could he still efficiently perform in behalf of SFC the essential responsibility to "oversee and supervise collections" at BCC? Surely, respondents would have vigorously objected to any arrangement with SFC involving him.We note that petitioner executed the affidavit in March 1996 to refute a statement Ty himself made in his own affidavit dated December 11, 1995 to the effect that petitioner had illegally appropriated some checks without authority from BCC.22 Petitioner thereby sought to show that he had the authority to receive the checks pursuant to the arrangements between SFC and BCC. This showing would aid in fending off the criminal charge respondents filed against him arising from his mishandling of the checks. Naturally, the circumstances petitioner adverted to in his March 1996 affidavit concerned those occurring before December 11, 1995, the same period when he actually worked as comptroller in BCC.Further, an affidavit dated September 5, 2000 by Alfredo So, the President of SFC, whom petitioner offered as a rebuttal witness, lent credence to respondents’ denial of petitioner’s employment. So declared in that affidavit, among others, that he had known petitioner for being "earlier his retained accountant having his own office but did not hold office" in SFC’s premises; that Ty had approached him (So) "looking for an accountant or comptroller to be employed by him (Ty) in [BCC’s] distribution business" of SFC’s general merchandise, and had later asked him on his opinion about petitioner; and that he (So) had subsequently learned that "Ty had already employed [petitioner] as his comptroller as of September 1995."23

The statements of So really supported respondents’ position in that petitioner’s association with SFC prior to his supposed employment by BCC went beyond mere acquaintance with So. That So, who had earlier merely "retained" petitioner as his accountant, thereafter employed petitioner as a "retained" accountant after his supposed illegal dismissal by BCC raised a doubt as to his employment by BCC, and rather confirmed respondents’ assertion of petitioner being an employee of SFC while he worked at BCC.Moreover, in determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the following incidents, to wit: (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 on the means and methods by which the work is accomplished. The last element, the so-called control test, is the most important element.24

Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed by BCC that debunked his claim against respondents.It can be deduced from the March 1996 affidavit of petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that he contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest of SFC more than of BCC.In addition, petitioner presented no document setting forth the terms of his employment by BCC.1âwphi1 The failure to present such agreement on terms of employment may be understandable and expected if he was a common or ordinary laborer who would not jeopardize his employment by demanding such document from the employer, but may not square well with his actual status as a highly educated professional.Petitioner’s admission that he did not receive his salary for the three months of his employment by BCC, as his complaint for illegal dismissal and non-payment of wages25 and the criminal case for estafa he later filed against the respondents for

non-payment of wages26 indicated, further raised grave doubts about his assertion of employment by BCC. If the assertion was true, we are puzzled how he could have remained in BCC’s employ in that period of time despite not being paid the first salary of P20,000.00/month. Moreover, his name did not appear in the payroll of BCC despite him having approved the payroll as comptroller.Lastly, the confusion about the date of his alleged illegal dismissal provides another indicium of the insincerity of petitioner’s assertion of employment by BCC. In the petition for review on certiorari, he averred that he had been barred from entering the premises of BCC on October 19, 1995,27 and thus was illegally dismissed. Yet, his complaint for illegal dismissal stated that he had been illegally dismissed on December 12, 1995 when respondents’ security guards barred him from entering the premises of BCC,28 causing him to bring his complaint only on December 29, 1995, and after BCC had already filed the criminal complaint against him. The wide gap between October 19, 1995 and December 12, 1995 cannot be dismissed as a trivial inconsistency considering that the several incidents affecting the veracity of his assertion of employment by BCC earlier noted herein transpired in that interval.With all the grave doubts thus raised against petitioner’s claim, we need not dwell at length on the other proofs he presented, like the affidavits of some of the employees of BCC, the ID, and the signed checks, bills and receipts. Suffice it to be stated that such other proofs were easily explainable by respondents and by the aforestated circumstances showing him to be the employee of SFC, not of BCC.WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals; and ORDERS petitioner to pay the costs of suit.SO ORDERED.

G.R. No. 159371               July 29, 2013D.M. CONSUNJI CORPORATION, Petitioner, vs.ROGELIO P. BELLO, Respondent.D E C I S I O NBERSAMIN, J.:For the resignation of an employee to be a viable defense in an action for illegal dismissal, an employer must prove that the resignation was voluntary, and its evidence thereon must be clear, positive and convincing. The employer cannot rely on the weakness of the employee's evidence.The CaseWe now review the decision promulgated on February 18, 2003,1 whereby the Court of Appeals (CA) granted the petition for certiorari of respondent Rogelio P. Bello, reversed and set aside the resolutions dated January 3, 20022 and February 26, 20023 of the National Labor Relations Commission (NLRC), and reinstated the decision rendered on January 9, 2001 by the Executive Labor Arbiter (ELA) declaring Bello to have been illegally dismissed and ordering petitioner D.M. Consunji Corporation (DMCI) to reinstate him, and to pay him full backwages reckoned from the time of his dismissal until his actual reinstatement.4

AntecedentsBello brought a complaint for illegal dismissal and damages against DMCI and/or Rachel Consunji. In his position paper, he claimed that DMCI had employed him as a mason without any interruption from February 1, 1990 until October 10, 1997 at an hourly rate of P25.081; that he had been a very diligent and devoted worker and had served DMCI as best as he could and without any complaints; that he had never violated any company rules; that his job as a mason had been necessary and desirable in the usual business or trade of DMCI; that he had been diagnosed to be suffering from pulmonary tuberculosis, thereby necessitating his leave of absence; that upon his recovery, he had reported back to work, but DMCI had refused to accept him and had instead handed to him a termination paper; that he had been terminated due to "RSD" effective November 5, 1997; that he did not know the meaning of "RSD" as the cause of his termination; that the cause had not been explained to him; that he had not been given prior notice of his termination; that he had not been paid separation pay as mandated by law; that at that time of his dismissal, DMCI’s projects had not yet been completed; and that even if he had been terminated due to an authorized cause, he should have been given at least one month pay or at least one-half month pay for every year of service he had rendered, whichever was higher.In its position paper submitted on March 6, 2000,5 DMCI contended that Bello had only been a project employee, as borne out by his contract of employment and appointment papers; that after his termination from employment, it had complied with the reportorial requirements of the Department of Labor and Employment (DOLE) pursuant to the mandates of Policy Instruction No. 20, as revised by Department Order No. 19, series of 1993; and that although his last project employment contract had been set to expire on October 7, 1997, he had tendered his voluntary resignation on October 4, 1997 for health reasons that had rendered him incapable of performing his job, per his resignation letter.On January 9, 2001, ELA Isabel G. Panganiban-Ortiguerra rendered a decision,6 disposing thusly:WHEREFORE, premises considered, judgment is hereby rendered declaring respondent company DM Consunji, Inc., guilty of illegal dismissal and it is hereby ordered to reinstate complainant to his former position without loss of seniority rights and to pay him full backwages reckoned from the time of his dismissal up to his actual reinstatement which as of this date is in the amount of P232,648,81.SO ORDERED.DMCI appealed to the NLRC, citing the following grounds, namely:

I. THE LABOR ARBITER A QUO GRAVELY ABUSED HER DISCRETION IN HOLDING THAT COMPLAINANT IS A REGULAR EMPLOYEE NOT EVEN AS THIS IS CONTRARY TO LAW, EVIDENCE AND JURISPRUDENCE.II. THE LABOR ARBITER A QUO GRAVELY ABUSED HER DISCRETION IN DECLARING COMPLAINANT’S TERMINATION AS ILLEGAL EVEN AS HE HAD VOLUNTARILY RESIGNED

FROM HIS LAST PROJECT EMPLOYMENT.7

On January 3, 2002, the NLRC issued its resolution setting aside the decision of ELA Panganiban-Ortiguerra, and dismissing Bello’s claims,8 viz:Addressing the first issue on appeal, a cursory reading of the records indeed show that contrary to the declaration of the Labor Arbiter that complainant’s years of service was without any gaps and was continuous to warrant regularity of employment, the same was not so. In fine what was clearly illustrated by respondents in their appeal memorandum by way of matrix, there were considerable and substantial gaps between complainant’s employment. In addition, it is of judicial notice that respondent company, being one of the biggest and well known construction company, as even admitted by the Executive Labor Arbiter, cater to so many clients/projects. So much that it is not improbable that complainant may be hired continuously one after the other in different projects considering that he is a mason whose functions are more than highly needed in construction. Even as it is, the matrix presented by respondents still showed considerable gaps. The fact that sometimes complainant’s contract is extended beyond approximated date of finish contract, do not in anyway (sic) readily make his employment regular. For it is common among construction projects for a certain phase of work to be extended, depending on varied factors such as weather, availability of materials, whims and caprice of clients and many more. So much so, it was error on the part of the Executive Labor Arbiter to take this against respondents and pin it as another determining factor of regularity of employment. Neither can it be said that as mason complainant’s function is necessary and desirable to respondents business hence, he is a regular employee. x x x we simply cannot close our eyes to the reality that complainant is a project employee and that the case she is citing does not fit herein as it is akin to a square peg being in a round hole. To top it all, records show that respondents have faithfully complied with the provision of Policy Instruction No. 20 on project employees.Lastly, records do show that complainant executed a voluntary resignation. And while there may indeed be a slight difference in the signature and handwriting, this do not readily mean that complainant did not execute the same as was the inclination of the Executive Labor Arbiter. For one, she has no expertise to determine so. Secondly, and as was validly pointed out, complainant if indeed he was coerced, cheated or shortchanged, would ordinarily almost immediately seek redress. In the case at bar, he sat it out and waited two (2) years. Is this case, an afterthought? We believe so.1âwphi1ACCORDINGLY, finding merit in respondent’s appeal, the decision of the Executive Labor Arbiter is hereby SET ASIDE and this case DISMISSED for want of merits (sic).SO ORDERED.Bello moved for a reconsideration,9 but the NLRC denied his motion on February 26, 2002.10

Ruling of the CABello then assailed the dismissal of his complaint via petition for certiorari,11 averring that the NLRC committed grave abuse of discretion amounting to lack of jurisdiction in upholding DMCI’s appeal, in setting aside the decision of the ELA, and in dismissing his complaint and denying his motion for reconsideration.On February 18, 2003, the CA promulgated its assailed decision,12 finding Bello to have acquired the status of a regular employee although he had started as a project employee of DMCI by his having been employed as a mason who had performed tasks that had been usually necessary and desirable in the business or trade of DMCI continuously from February 1, 1990 to October 5, 1997; that his repeated re-hiring and the continuing need for his services over a long span of time had undeniably made him a regular employee; that DMCI’s compliance with the reportorial requirements under Policy Instruction No. 20 (by which the project employer was required to make a report to the Department of Labor and Employment of every termination of its projects) could not preclude the acquisition of tenurial security by the employee; that the cause of his dismissal after he had acquired the status of a regular employee – the completion of the phase of work – could not be considered as a valid cause under Article 282 of the Labor Code; and that his supposedly voluntary resignation could not be accorded faith after the ELA had concluded that the handwriting in the supposed resignation letter was "undeniably different from that of complainant," a fact "not rebutted by herein respondents."DMCI sought the reconsideration of the decision, but the CA denied its motion on July 24, 2003.13

IssuesHence, DMCI appeals, presenting the following issues for our consideration and resolution, to wit:

I. WHETHER OR NOT PRIVATE RESPONDENT WAS A REGULAR EMPLOYEE; ANDII. WHETHER OR NOT PRIVATE RESPONDENT WAS DISMISSED OR VOLUNTARILY RESIGNED.

Ruling of the CourtThe petition for review lacks merit.The provision that governs the first issue is Article 280 of the Labor Code, which is quoted hereunder as to its relevant part, viz:Article 280. Regular and Casual Employment – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary and desirable to the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. (Emphasis supplied)x x x xA project employee is, therefore, one who is hired for a specific project or undertaking, and the completion or termination of such project or undertaking has been determined at the time of engagement of the employee.14 In the context of the law, Bello was a project employee of DMCI at the beginning of their employer-employee relationship. The project employment contract they then entered into clearly gave notice to him at the time of his engagement about his employment being for a specific project or phase of work. He was also thereby notified of the duration of the project, and the determinable completion date of the project.However, the history of Bello’s appointment and employment showed that he performed his tasks as a mason in DMCI’s various constructions projects, as the following tabulation indicates, to wit:15

Project Duration of Employment Actual Termination Cause Annexes

SM Megamall 2-01-90 to 05-01-90 10-28-91 CPW 1 & 1-A

JMT 10-28-91 to 01-28-91 05-29-92 CPW 2 & 2-A

Renaissance 05-29-92 to 08-29-92 09-10-92 CPW 3 & 3-A

Bayview 09-11-92 to 12-11-92 06-15-93 CPW 4 &4-A

Golden Bay I 06-17-93 to 09-17-93 04-18-94 CPW 5 & 5-A

Golden Bay II 04-18-94 to 07-18-94 09-06-94 CPW 6& 6-A

ADC 09-07-94 to 10-07-94 02-09-96 CPW 7 & 7-A

ADC 02-10-96 to 03-10-96 10-01-96 CPW 8 & 8-A

ICEC 09-07-97 to 10-07-97 10-07-97 CPW 9 & 9-A

Based on the foregoing, we affirm the CA’s conclusion that Bello acquired in time the status of a regular employee by virtue of his continuous work as a mason of DMCI. The work of a mason like him – a skilled workman working with stone or similar material16 – was really related to building or constructing, and was undoubtedly a function necessary and desirable to the business or trade of one engaged in the construction industry like DMCI. His being hired as a mason by DMCI in not one, but several of its projects revealed his necessity and desirability to its construction business.It is settled that the extension of the employment of a project employee long after the supposed project has been completed removes the employee from the scope of a project employee and makes him a regular employee.17 In this regard, the length of time of the employee’s service, while not a controlling determinant of project employment, is a strong factor in determining whether he was hired for a specific undertaking or in fact tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer.18 On the other

hand, how DMCI chose to categorize the employment status of Bello was not decisive of his employment status. What were of consequence in that respect were his actual functions and the length of his stay with DMCI. Verily, the principal test for determining whether an employee is a project employee, as distinguished from a regular employee, is whether or not he is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time he is engaged for the project.19

Still, DMCI contends that Bello’s services as a mason were deemed necessary and desirable in its usual business only for the period of time it had taken it to complete the project.The contention may be correct if each engagement of Bello as a mason over the span of eight years was to be treated separately. The contention cannot be upheld, however, simply because his successive reengagement in order to perform the same kind of work as a mason firmly manifested the necessity and desirability of his work in DMCI’s usual business of construction.20

Lastly, DMCI claims that Bello voluntarily resigned from work. It presented his supposed handwritten resignation letter to support the claim. However, Bello denied having resigned, explaining that he had signed the letter because DMCI had made him believe that the letter was for the purpose of extending his sick leave.In resolving the matter against DMCI, the CA relied on the conclusion by ELA Panganiban-Ortiguerra that she could not give credence to the voluntary resignation for health reasons in the face of Bello’s declaration that he had been led to sign the letter to obtain the extension of his leave of absence due to illness, and on her observation that "the handwriting in the supposed resignation letter is undeniably different from that of complainant," something that she said DMCI had not rebutted.21

The CA’s reliance on the conclusion and finding by ELA Panganiban-Ortiguerra was warranted. Her observation that the handwriting in the resignation letter was "undeniably different" from that of Bello could not be ignored or shunted aside simply because she had no expertise to make such a determination, as the NLRC tersely stated in its decision. To begin with, her supposed lack of expertise did not appear in the records, rendering the NLRC's statement speculative and whimsical. If we were now to outrightly discount her competence to make that observation, we would disturb the time-honored practice of according respect to the findings of the first-line trier of facts in order to prefer the speculative and whimsical statement of an appellate forum like the NLRC. Yet, even had the letter been actually signed by him, the voluntariness of the resignation could not be assumed from such fact alone. His claim that he had been led to believe that the letter would serve only as the means of extending his sick leave from work should have alerted DMCI to the task of proving the voluntariness of the resignation. It was obvious that, if his claim was true, then he did not fully comprehend the import of the letter, rendering the resignation farcical. The doubt would then be justifiably raised against the letter being at all intended to end his employment. Under the circumstances, DMCI became burdened with the obligation to prove the due execution and genuineness of the document as a letter of resignation.22

We reiterate that it is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of the employee in an illegal dismissal case must prove by clear, positive and convincing evidence that the resignation was voluntary; and that the employer cannot rely on the weakness of the defense of the employee.23The requirement rests on the need to resolve any doubt in favor of the working man.WHEREFORE, the Court AFFIRMS the decision promulgated on February 18, 2003; and ORDERS petitioner to pay the costs of suit.SO ORDERED.

G.R. No. 188711               July 8, 2013

TAN BROTHERS CORPORATION OF BASILAN CITY THROUGH ITS OWNER/MANAGER, MAURO F. TAN,PETITIONERS, vs.EDNA R. ESCUDERO, RESPONDENT.D E C I S I O NPEREZ, J.:The elements of abandonment of employment as a defense against a charge of illegal dismissal are primarily at issue in this Rule 45 Petition for Review on Certiorari which seeks the reversal of the 16 February 2009 Decision1rendered by the Twenty First Division of the Court of Appeals (CA), Mindanao Station, in CA-G.R. SP No. 01028-MIN,2 the decretal portion of which states:WHEREFORE, premises considered, the instant petition is DENIED. The assailed Resolutions of public respondent National Labor Relations Commission (NLRC), 5th Division, Cagayan De Oro City, in NLRC CA No. M-008350-2005 (RAB IX 09-00255-2004), promulgated on November 30, 2005 and January 31, 2006, respectively, are hereby AFFIRMED. Costs against petitioner,SO ORDERED.3

The FactsIn July 1991, respondent Edna R. Escudero (Escudero) was hired as bookkeeper by petitioner Tan Brothers Corporation of Basilan City (Tan Brothers), a corporation primarily engaged in the real estate business. On 1 September 2004, Escudero filed against Tan Brothers a complaint for illegal dismissal, underpayment of wages, cost of living allowance and 13th month pay which was docketed before the arbitral level of the Regional Arbitration Branch No. IX of the National Labor Relations Commission (NLRC) as NLRC Case No. RAB-09-09-00255-2004. In support of the complaint, Escudero alleged in her position paper that, starting July 2003, her monthly salary of P2,500.00 was not paid on time by Tan Brothers. After having the corporation’s office remodeled in the early part of 2004, Tan Brothers allegedly rented out the office space Escudero used to occupy and ceased giving her further assignments. Eventually constrained to stop reporting for work because of her dire financial condition, Escudero claimed that Tan Brothers "shrewdly maneuvered" her illegal dismissal from employment.4

In its position paper, on the other hand, Tan Brothers averred that Escudero was paid a daily wage of P155.00, and she abandoned her employment when she stopped reporting for work in July 2003. Aside from taking with her most of the corporation’s payrolls, vouchers and other material documents evidencing due payment of wages and labor standard benefits, Tan Brothers maintained that, without its knowledge and consent, Escudero appropriated for herself an Olivetti typewriter worth P15,000.00. With Escudero’s refusal to heed its demands for the return of the typewriter, Tan Brothers asseverated that it was left with no choice but to lodge a complaint with the barangay authorities of Seaside, Isabela City on 6 September 2004. In support of its claim of due payment of its employees’ wages and benefits, Tan Brothers submitted copies of its remaining vouchers and payrolls from 24 December 1997 to 31 July 2000 which were prepared by Escudero and the result of the inspection conducted by the Department of Labor and Employment (DOLE) Regional Office No. 9 that cleared it of violations of labor standard laws.5

On 24 November 2004, Labor Arbiter Joselito B. De Leon rendered a decision, finding Tan Brothers guilty of constructively dismissing Escudero from employment. Rejecting Tan Brothers’ claim that Escudero resigned from and/or abandoned her employment, the Labor Arbiter ruled that the former circumvented the substantive and procedural requirements of due process when it withheld the latter’s salaries and stopped utilizing her services despite her presence at work. Also brushed aside was

Tan Brother’s claim regarding the typewriter allegedly taken by Escudero on the ground that the cause of action relative thereto, if any, pertained to the regular courts. While giving credence to the pieces of documentary evidence adduced by Tan Brothers to prove due payment of wages and labor standard benefits to its employees, the Labor Arbiter ruled that, as a consequence of her constructive dismissal, Escudero was entitled to separation pay in the sum of P48,508.80 and backwages in the sum ofP68,720.80 or a total of P117,229.60 in monetary awards.6

On appeal, the Labor Arbiter’s decision was affirmed in toto in the 30 November 2005 Resolution issued by the Fifth Division of the NLRC in NLRC CA No. M-008350-2005. Echoing the Labor Arbiter’s conclusion that Escudero was constructively dismissed, the NLRC further ruled that Tan Brother’s claim of loss of the typewriter, having been made after said employee’s institution of the case a quo, was retaliatory and a mere afterthought.7 Its motion for reconsideration of the foregoing resolution8 denied for lack of merit in the NLRC’s Resolution dated 31 January 2006,9 Tan Brothers filed the Rule 65 petition for certiorari docketed before the CA as CA-G.R. SP No. 01028-MIN. In support of its petition, Tan Brothers faulted the NLRC with grave abuse of discretion for not finding that Escudero abandoned her employment despite her admission that she unilaterally stopped reporting for work. On the theory that abandonment is a serious misconduct which constituted a just cause for termination of employment under Article 282 of the Labor Code of the Philippines, it was, likewise, argued that the award of backwages and separation pay in favor of Escudero were bereft of legal basis.10

On 16 February 2009, the CA rendered the herein assailed decision, denying Tan Brothers’ petition and affirming the NLRC’s resolution of its appeal. Finding that Escudero was constructively dismissed when Tan Brothers stopped paying her salaries and giving her work assignments, the CA ruled out abandonment absent any showing that the former intended to sever the employer-employee relationship with the latter. Considered not established by an employee’s mere absence or failure to report to work, abandonment was likewise held to be contradicted by the filing of an action for illegal dismissal. The CA also gave a short shrift to Tan Brothers’ claim that Escudero took its typewriter and corporate records for lack of showing that the latter was confronted with and was given an opportunity to refute the charges against her.11 Tan Brothers’ motion for reconsideration of the decision12 was denied for lack of merit in the CA’s 26 June 2009 Resolution.13 Hence, this petition.14

The IssuesTan Brothers essentially argues that Escudero abandoned her employment and that the same was not negated by the filing of her complaint for illegal dismissal more than one year after she stopped reporting for work.15

The Court’s RulingThe petition is bereft of merit.At the outset, it bears stressing that, in petitions for review on certiorari like the one at bench, the scope of this Court’s judicial review of decisions of the CA is generally confined only to errors of law16 and does not extend to a reevaluation of the sufficiency of the evidence upon which the proper labor tribunal has based its determination.17Whether Escudero has abandoned her job or was illegally dismissed are questions of fact better left for determination by quasi-judicial agencies18 which have acquired expertise because their jurisdiction is confined to specific matters.19 Corollarily, the rule is settled that the factual findings of the Labor Arbiter and the NLRC, especially when affirmed by the CA, are accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by substantial evidence.20 Time and again, we have reiterated the dictum

that the Supreme Court is not a trier of facts and this applies with greater force in labor cases.21

As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an employee to resume his employment.22 It constitutes neglect of duty and is a just cause for termination of employment under paragraph (b) of Article 282 of the Labor Code.23 To constitute abandonment, however, there must be a clear and deliberate intent to discontinue one's employment without any intention of returning. In this regard, two elements must concur: (1) failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overt acts.24 Otherwise stated, absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore.25 It has been ruled that the employer has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning.261âwphi1Repeating its defense of abandonment, Tan Brothers argues that Escudero unilaterally stopped reporting for work in July 2003. In addition to the latter’s prolonged absence from work, Tan Brothers calls our attention to Escudero’s supposed appropriation of the corporation’s typewriter and records which supposedly evinced her intention to sever the parties’ employer-employee relations. It is argued that, having committed the foregoing infraction to get even with her employer, it would have been unthinkable for Escudero to plan on further reporting for work. Considering that the complaint did not pray for reinstatement and was filed only on 1 September 2004 or more than one year after Escudero’s supposed last attendance at work, Tan Brothers also fault the CA for applying the rule that abandonment is negated by the employee’s filing of a complaint for illegal dismissal. Ultimately, Tan Brothers maintains that the award of backwages and separation pay should have been disallowed in view of Escudero’s abandonment of her employment.27

On the theory that the same is proof enough of the desire to return to work, 28 the immediate filing of a complaint for illegal dismissal – more so when it includes a prayer for reinstatement – has been held to be totally inconsistent with a charge of abandonment.29 While it is true that Escudero’s complaint prayed for separation pay in lieu of reinstatement, Tan Brothers loses sight of the fact, however, that it had the burden of proving its own allegation that Escudero had abandoned her employment in July 2003. As allegation is not evidence, the rule has always been to the effect that a party alleging a critical fact must support his allegation with substantial evidence30 which has been construed to mean such relevant evidence as a reasonable mind will accept as adequate to support a conclusion.31 Confronted with Escudero’s assertion that she reported for work despite irregular payment of her salaries and was forced to stop doing so after her wages were not paid in May 2004, the record shows that Tan Brothers proffered nothing beyond bare allegations to prove that Escudero had abandoned her employment in July 2003.It is, on the other hand, doctrinal that abandonment is a matter of intention 32 and cannot, for said reason, be lightly inferred, much less legally presumed from certain equivocal acts.33 Viewed in the light of Escudero’s persistence in reporting for work despite the irregular payment of her salaries starting July 2003, we find that her subsequent failure to do so as a consequence of Tan Brothers’ non-payment of her salaries in May 2004 is hardly evincive of an intention to abandon her employment. Indeed, mere absence or failure to report for work, even after a notice to return work has been served, is not enough to amount to an abandonment of employment.34Considering that a notice directing Escudero to return to work was not

even issued in the premises, we find that the CA committed no reversible error in ruling out Tan Brother’s defense of abandonment.The same may be said of the CA’s rejection of the employer’s contention that the employee signified her intention to sever the parties’ employer-employee relationship when she illegally appropriated for herself the corporation’s typewriter and took its payrolls, vouchers and other material documents. Since unsubstantiated accusation, without more, is not synonymous with guilt,35 the CA correctly brushed aside Escudero’s supposed infraction which Tan Brothers reported to the barangay authorities of Seaside, Isabela City only on 6 September 2004 or after the filing of the complaint a quo. In order to terminate an employee’s services for a just cause, moreover, it is essential that the two-notice requirement must be complied with by the employer, to wit: a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and b) if the employer decides to terminate the services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reason therefor.36 The requirement of these notices is not a mere technicality, but a requirement of due process to which every employee is entitled.37

Neither are we inclined to disturb the CA’s finding that Escudero was constructively dismissed by Tan Brothers which, as employer, had the burden of proving that said employee was dismissed for a just and valid cause.38Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit.39 The test is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances.40 Much though Tan Brothers may now be inclined to disparage the same as mere alibis, the fact that Escudero was deprived of office space, was not given further work assignment and was not paid her salaries until she was left with no choice but stop reporting for work all combine to make out a clear case of constructive dismissal.Having been constructively dismissed, Escudero was correctly found entitled to backwages and attorney’s fees by the Labor Arbiter, the NLRC and the CA. Under Article 279 of the Labor Code, as amended, employees who have been illegally terminated from employment are entitled to the twin reliefs of reinstatement without loss of seniority rights and to the payment of full back wages41 corresponding to the period from their illegal dismissal up to actual reinstatement.42 Reinstatement is a restoration to the state from which one has been removed or separated, 43while the payment of backwages is a form of relief that restores the income that was lost by reason of the unlawful dismissal.44 Proper where reinstatement is not advisable or feasible as when antagonism already caused a severe strain in the relationship between the employer and the employee,45 separation pay may also be awarded where, as here, reinstatement is no longer practical or in the best interest of the parties or when the employee decides not to be reinstated anymore.46

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No. 01028-MIN is AFFIRMED in toto.SO ORDERED.

G.R. No. 193493               June 13, 2013JAIME N. GAPAYAO, Petitioner, vs.ROSARIO FULO, SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, Respondents.D E C I S I O NSERENO, CJ.:This is a Rule 45 Petition1 assailing the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP. No. 101688, affirming the Resolution4 of the Social Security Commission (SSC). The SSC held petitioner Jaime N. Gapayao liable to pay the unpaid social security contributions due to the deceased Jaime Fulo, and the Social Security System (SSS) to pay private respondent Rosario L. Fulo, the widow of the deceased, the appropriate death benefits pursuant to the Social Security Law.The antecedent facts are as follows:On 4 November 1997, Jaime Fulo (deceased) died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution"5 while doing repairs at the residence and business establishment of petitioner located at San Julian, Irosin, Sorsogon.Allegedly moved by his Christian faith, petitioner extended some financial assistance to private respondent. On 16 November 1997, the latter executed an Affidavit of Desistance6 stating that she was not holding them liable for the death of her late husband, Jaime Fulo, and was thereby waiving her right and desisting from filing any criminal or civil action against petitioner.On 14 January 1998, both parties executed a Compromise Agreement,7 the relevant portion of which is quoted below:We, the undersigned unto this Honorable Regional Office/District Office/Provincial Agency Office respectfully state:

1. The undersigned employer, hereby agrees to pay the sum of FORTY THOUSAND PESOS (P40,000.00) to the surviving spouse of JAIME POLO, an employee who died of an accident, as a complete and full payment for all claims due the victim.2. On the other hand, the undersigned surviving spouse of the victim having received the said amount do [sic] hereby release and discharge the employer from any and all claims that maybe due the victim in connection with the victim’s employment thereat.

Thereafter, private respondent filed a claim for social security benefits with the Social Security System (SSS)–Sorosogon Branch.8 However, upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS.9

Upon the insistence of private respondent that her late husband had been employed by petitioner from January 1983 up to his untimely death on 4 November 1997, the SSS conducted a field investigation to clarify his status of employment. In its field investigation report,10 it enumerated its findings as follows:In connection with the complaint filed by Mrs. Rosario Fulo, hereunder are the findings per interview with Mr. Leonor Delgra, Santiago Bolanos and Amado Gacelo:

1. That Mr. Jaime Fulo was an employee of Jaime Gapayao as farm laborer from 1983 to 1997.2. Mr. Leonor Delgra and Santiago Bolanos are co-employees of Jaime Fulo.3. Mr. Jaime Fulo receives compensation on a daily basis ranging from P5.00 to P60.00 from 1983 to 1997.

Per interview from Mrs. Estela Gapayao, please be informed that:1. Jaime Fulo is an employee of Mr. & Mrs. Jaime Gapayao on an extra basis.2. Sometimes Jaime Fulo is allowed to work in the farm as abaca harvester and earn 1/3 share of its harvest as his income.3. Mr. & Mrs. Gapayao hired the services of Jaime Fulo not only in the farm as well as in doing house repairs whenever it is available. Mr. Fulo receives his remuneration usually in the afternoon after doing his job.

4. Mr. & Mrs. Gapayao hires 50-100 persons when necessary to work in their farm as laborer and Jaime Fulo is one of them. Jaime Fulo receives more or less P50.00 a day. (Emphases in the original)

Consequently, the SSS demanded that petitioner remit the social security contributions of the deceased. When petitioner denied that the deceased was his employee, the SSS required private respondent to present documentary and testimonial evidence to refute petitioner’s allegations.11

Instead of presenting evidence, private respondent filed a Petition12 before the SSC on 17 February 2003. In her Petition, she sought social security coverage and payment of contributions in order to avail herself of the benefits accruing from the death of her husband.On 6 May 2003, petitioner filed an Answer13 disclaiming any liability on the premise that the deceased was not the former’s employee, but was rather an independent contractor whose tasks were not subject to petitioner’s control and supervision.14 Assuming arguendo that the deceased was petitioner’s employee, he was still not entitled to be paid his SSS premiums for the intervening period when he was not at work, as he was an "intermittent worker who was only summoned every now and then as the need arose."15 Hence, petitioner insisted that he was under no obligation to report the former’s demise to the SSS for social security coverage.Subsequently, on 30 June 2003, the SSS filed a Petition-in-Intervention16 before the SSC, outlining the factual circumstances of the case and praying that judgment be rendered based on the evidence adduced by the parties.On 14 March 2007, the SSC rendered a Resolution,17 the dispositive portion of which provides:WHEREFORE, PREMISES CONSIDERED, this Commission finds, and so holds, that Jaime Fulo, the late husband of petitioner, was employed by respondent Jaime N. Gapayao from January 1983 to November 4, 1997, working for nine (9) months a year receiving the minimum wage then prevailing.Accordingly, the respondent is hereby ordered to pay P45,315.95 representing the unpaid SS contributions due on behalf of deceased Jaime Fulo, the amount of P217,710.33 as 3% per month penalty for late remittance thereof, computed as of March 30, 2006, without prejudice to the collection of additional penalty accruing thereafter, and the sum of P230,542.20 (SSS) and P166,000.00 (EC) as damages for the failure of the respondent to report the deceased Jaime Fulo for SS coverage prior to his death pursuant to Section 24(a) of the SS Law, as amended.The SSS is hereby directed to pay petitioner Rosario Fulo the appropriate death benefit, pursuant to Section 13 of the SS Law, as amended, as well as its prevailing rules and regulations, and to inform this Commission of its compliance herewith.SO ORDERED.On 18 May 2007, petitioner filed a Motion for Reconsideration,18 which was denied in an Order19 dated 16 August 2007.Aggrieved, petitioner appealed to the CA on 19 December 2007.20 On 17 March 2010, the CA rendered a Decision21 in favor of private respondent, as follows:In fine, public respondent SSC had sufficient basis in concluding that private respondent’s husband was an employee of petitioner and should, therefore, be entitled to compulsory coverage under the Social Security Law.Having ruled in favor of the existence of employer-employee relationship between petitioner and the late Jaime Fulo, it is no longer necessary to dwell on the other issues raised.Resultantly, for his failure to report Jaime Fulo for compulsory social security coverage, petitioner should bear the consequences thereof. Under the law, an employer who fails to report his employee for social security coverage is liable to [1] pay the benefits of those who die, become disabled, get sick or reach retirement age; [2] pay all unpaid contributions plus a penalty of three percent per month; and [3] be held liable for a criminal offense

punishable by fine and/or imprisonment. But an employee is still entitled to social security benefits even is (sic) his employer fails or refuses to remit his contribution to the SSS.WHEREFORE, premises considered, the Resolution appealed from is AFFIRMED in toto.SO ORDERED.In holding thus, the CA gave credence to the findings of the SSC. The appellate court held that it "does not follow that a person who does not observe normal hours of work cannot be deemed an employee."22 For one, it is not essential for the employer to actually supervise the performance of duties of the employee; it is sufficient that the former has a right to wield the power. In this case, petitioner exercised his control through an overseer in the person of Amado Gacelo, the tenant on petitioner’s land.23 Most important, petitioner entered into a Compromise Agreement with private respondent and expressly admitted therein that he was the employer of the deceased.24The CA interpreted this admission as a declaration against interest, pursuant to Section 26, Rule 130 of the Rules of Court.25

Hence, this petition.Public respondents SSS26 and SSC27 filed their Comments on 31 January 2011 and 28 February 2011, respectively, while private respondent filed her Comment on 14 March 2011.28 On 6 March 2012, petitioner filed a "Consolidated Reply to the Comments of the Public Respondents SSS and SSC and Private Respondent Rosario Fulo."29

ISSUEThe sole issue presented before us is whether or not there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship that would merit an award of benefits in favor of private respondent under social security laws.THE COURT’S RULINGIn asserting the existence of an employer-employee relationship, private respondent alleges that her late husband had been in the employ of petitioner for 14 years, from 1983 to 1997.30 During that period, he was made to work as a laborer in the agricultural landholdings, a harvester in the abaca plantation, and a repairman/utility worker in several business establishments owned by petitioner.31 To private respondent, the "considerable length of time during which [the deceased] was given diverse tasks by petitioner was a clear indication of the necessity and indispensability of her late husband’s services to petitioner’s business."32 This view is bolstered by the admission of petitioner himself in the Compromise Agreement that he was the deceased’s employer.33

Private respondent’s position is similarly espoused by the SSC, which contends that its findings are duly supported by evidence on record.34 It insists that pakyaw workers are considered employees, as long as the employer exercises control over them. In this case, the exercise of control by the employer was delegated to the caretaker of his farm, Amado Gacelo. The SSC further asserts that the deceased rendered services essential for the petitioner’s harvest. While these services were not rendered continuously (in the sense that they were not rendered every day throughout the year), still, the deceased had never stopped working for petitioner from year to year until the day the former died.35 In fact, the deceased was required to work in the other business ventures of petitioner, such as the latter’s bakery and grocery store.36 The Compromise Agreement entered into by petitioner with private respondent should not be a bar to an employee demanding what is legally due the latter.37

The SSS, while clarifying that it is "neither adversarial nor favoring any of the private parties x x x as it is only tasked to carry out the purposes of the Social Security Law,"38 agrees with both private respondent and SSC. It stresses that factual findings of the lower courts, when affirmed by the appellate court, are generally conclusive and binding upon the Court.39

Petitioner, on the other hand, insists that the deceased was not his employee. Supposedly, the latter, during the performance of his function, was not under petitioner’s control. Control is not necessarily present even if the worker works inside the premises of the person who has engaged his services.40 Granting without admitting that petitioner gave rules or guidelines to the deceased in the process of the latter’s performing his work, the situation

cannot be interpreted as control, because it was only intended to promote mutually desired results.41

Alternatively, petitioner insists that the deceased was hired by Adolfo Gamba, the contractor whom he had hired to construct their building;42 and by Amado Gacelo, the tenant whom petitioner instructed to manage the latter’s farm.43 For this reason, petitioner believes that a tenant is not beholden to the landlord and is not under the latter’s control and supervision. So if a worker is hired to work on the land of a tenant – such as petitioner – the former cannot be the worker of the landlord, but of the tenant’s.44

Anent the Compromise Agreement, petitioner clarifies that it was executed to buy peace, because "respondent kept on pestering them by asking for money."45 Petitioner allegedly received threats that if the matter was not settled, private respondent would refer the matter to the New Peoples’ Army.46 Allegedly, the Compromise Agreement was "extortion camouflaged as an agreement."47 Likewise, petitioner maintains that he shouldered the hospitalization and burial expenses of the deceased to express his "compassion and sympathy to a distressed person and his family," and not to admit liability.48

Lastly, petitioner alleges that the deceased is a freelance worker. Since he was engaged on a pakyaw basis and worked for a short period of time, in the nature of a farm worker every season, he was not precluded from working with other persons and in fact worked for them. Under Article 280 of the Labor Code,49 seasonal employees are not covered by the definitions of regular and casual employees.50 Petitioner cites Mercado, Sr. v. NLRC,51 in which the Court held that seasonal workers do not become regular employees by the mere fact that they have rendered at least one year of service, whether continuous or broken.52

We see no cogent reason to reverse the CA.IFindings of fact of the SSC are given weight and credence.At the outset, it is settled that the Court is not a trier of facts and will not weigh evidence all over again. Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but finality when affirmed by the CA.53 For as long as these findings are supported by substantial evidence, they must be upheld.54

IIFarm workers may be considered regular seasonal employees.Article 280 of the Labor Code states:Article 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists.Jurisprudence has identified the three types of employees mentioned in the provision: (1) regular employees or those who have been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of their engagement, or those whose work or service is seasonal in nature and is performed for the duration of the season; and (3) casual employees or those who are neither regular nor project employees.55

Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as regular employees.56 Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during the off season, they are temporarily laid off; but reemployed during the summer season or when their services may be needed.57 They are in regular employment because of the nature of their job,and not because of the length of time they have worked.58

The rule, however, is not absolute. In Hacienda Fatima v. National Federation of Sugarcane Workers-Food & General Trade,59 the Court held that seasonal workers who have worked for one season only may not be considered regular employees. Similarly, in Mercado, Sr. v. NLRC,60 it was held that when seasonal employees are free to contract their services with other farm owners, then the former are not regular employees.For regular employees to be considered as such, the primary standard used is the reasonable connection between the particular activity they perform and the usual trade or business of the employer.61 This test has been explained thoroughly in De Leon v. NLRC,62 viz:The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists.A reading of the records reveals that the deceased was indeed a farm worker who was in the regular employ of petitioner. From year to year, starting January 1983 up until his death, the deceased had been working on petitioner’s land by harvesting abaca and coconut, processing copra, and clearing weeds. His employment was continuous in the sense that it was done for more than one harvesting season. Moreover, no amount of reasoning could detract from the fact that these tasks were necessary or desirable in the usual business of petitioner.The other tasks allegedly done by the deceased outside his usual farm work only bolster the existence of an employer-employee relationship. As found by the SSC, the deceased was a construction worker in the building and a helper in the bakery, grocery, hardware, and piggery – all owned by petitioner.63 This fact only proves that even during the off season, the deceased was still in the employ of petitioner.The most telling indicia of this relationship is the Compromise Agreement executed by petitioner and private respondent. It is a valid agreement as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he or she was entering into.64 All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent.65 Once executed by the workers or employees and their employers to settle their differences, and done in good faith, a Compromise Agreement is deemed valid and binding among the parties.66

Petitioner entered into the agreement with full knowledge that he was described as the employer of the deceased.67 This knowledge cannot simply be denied by a statement that petitioner was merely forced or threatened into such an agreement.1âwphi1 His belated attempt to circumvent the agreement should not be given any consideration or weight by this Court.IIIPakyaw workers are regular employees,provided they are subject to the control of petitioner.

Pakyaw workers are considered employees for as long as their employers exercise control over them. In Legend Hotel Manila v. Realuyo,68 the Court held that "the power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. This is the so-called control test and is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end." It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof.69 It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power.70

In this case, we agree with the CA that petitioner wielded control over the deceased in the discharge of his functions. Being the owner of the farm on which the latter worked, petitioner – on his own or through his overseer – necessarily had the right to review the quality of work produced by his laborers. It matters not whether the deceased conducted his work inside petitioner’s farm or not because petitioner retained the right to control him in his work, and in fact exercised it through his farm manager Amado Gacelo. The latter himself testified that petitioner had hired the deceased as one of the pakyaw workers whose salaries were derived from the gross proceeds of the harvest.71

We do not give credence to the allegation that the deceased was an independent contractor hired by a certain Adolfo Gamba, the contractor whom petitioner himself had hired to build a building. The allegation was based on the self-serving testimony of Joyce Gapay Demate,72 the daughter of petitioner. The latter has not offered any other proof apart from her testimony to prove the contention.The right of an employee to be covered by the Social Security Act is premised on the existence of an employer-employee relationship.73 That having been established, the Court hereby rules in h1vor of private respondent.WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed Decision and resolution of the Court of Appeals in CA-G.R. SP. No. 101688 dated 17 March 2010 and 13 August 2010, respectively, are hereby AFFIRMED.SO ORDERED.

G.R. No. 194352               January 30, 2013MAXICARE PCIB CIGNA HEALTHCARE (now MAXICARE HEALTHCARE CORPORATION), ERIC S. NUBLA, JR. M.D. and RUTH A. ASIS, M.D., Petitioners, vs.MARIAN BRIGITTE A. CONTRERAS, M.D., Respondent.D E C I S I O NMENDOZA, J.:Challenged in this petition are the January 28, 2010 Decision1 of the Court of Appeals (CA) and its October 27, 2010 Resolution,2 in CA-G.R. SP No. 101066, which affirmed the March 16, 2007 Decision3 and June 29, 2007 Resolution4 of the National Labor Relations Com;nission (NLRC), reversing the decision5 of the Labor Arbiter (LA) in this illegal dismissal case, entitled "Marian Brigitte Contreras v. A1axiCare PCJB CJGNA Health Care, et. al."The FactsSometime in March 2003, Maxicare Healthcare Corporation (Maxicare) hired Dr. Marian Brigitte A. Contreras (Dr. Contreras) as a retainer doctor at the Philippine National Bank (PNB) Head Office, Macapagal Avenue, Roxas Boulevard, Manila. Under their verbal agreement, Dr. Contreras would render medical services for one year atP250.00 per hour. Her retainer fee would be paid every 15th and 30th of each month based on her work schedule which was every Tuesday, Thursday and Friday from 6:00 o’clock in the morning to 5:00 o’clock in the afternoon.6

The controversy started when, on July 3, 2003, Dr. Ruth A. Asis, Maxicare’s medical specialist on Corporate Accounts, informed Dr. Contreras that she was going to be transferred to another account after a month. On August 4, 2003, the Service Agreement between Dr. Contreras and Dr. Eric S. Nubla, Maxicare’s Vice-President for Medical Services, was executed, effecting the transfer of the former to Maybank Philippines (Maybank) for a period of four (4) months, from August 5, 2003 to November 29, 2003, with a retainer fee of P168.00 per hour.Dr. Contreras reported to Maybank for one (1) day only. On August 8, 2003, she filed a complaint before the LA claiming that she was constructively dismissed. Maxicare, on the other hand, insisted that there was no constructive dismissal.Ruling of the Labor ArbiterOn November 29, 2005, the LA rendered a decision dismissing the complaint of Dr. Contreras for lack of merit. The pertinent portions of the LA’s ruling read:If indeed complainant was forced to sign the contract of August 4, 2003, she could not have reported to that assignment under it in the first place. In reporting so, she not only ratified the contract of service she signed but also waived all her rights under their previous agreement she is supposed to be entitled to enforce. It may be that there present under the circumstance of a breach of contractual obligation under the previous undertaking which partakes the nature of constructive dismissal based on evidence at hand. At that then, complainant should have at such point ventilated the matter before this forum. She did not. Instead, she proceeded to sign or execute the questioned Service Agreement with the respondent under the terms and conditions therein stated. To a professional like her, a Doctor, complainant should have refused as she is at liberty, in refusing to sign even if what she claimed there appears a threat of dismissal. In this case, she even confirmed what she signed by reporting to duty thereafter. And only after examining what she signed that she realized she thought of initiating the present complaint. In this regard, absent any showing that she was forced to execute the disputed service agreement of August 4, 2003, complainant’s complaint for constructive dismissal can hardly be sustained by a later change of heart.

Finding substantial basis to support the validity of the Service Agreement of August 4, 2003 entered into by the parties, the present complaint for constructive dismissal must necessarily fail. Consequent claim as relief therefor has no basis.7

Ruling of the NLRCOn March 16, 2007, upon appeal, the NLRC rendered a decision8 reversing and setting aside the LA’s decision. It declared that Dr. Contreras was illegally dismissed and ordered her reinstatement to her former or substantially equivalent position and the payment of her backwages.The NLRC explained that the "execution of a Service Agreement for another retainership with lower salary does not negate constructive dismissal arising from the termination of complainant’s PNB retainership without either just or authorized cause but simply is anchored on alleged complaints which even Dr. Eric Nubla recognize to be fictitious."9 Dr. Contreras signed the Service Agreement on August 4, 2003, and later repudiated it with a notice to Maxicare that she could not go on serving under such a disadvantageous situation. The disadvantage she was referring to was the disparity in remuneration between the PNB retainership with ₱250.00 per hour and that of Maybank with ₱168.00 per hour. The clear economic prejudice validated her claim of having reservation on the Service Agreement prior to her signature. She signed the new agreement because it, being a contract of adhesion, gave her no realistic chance to haggle for her job. Thus, the NLRC disposed:WHEREFORE, premises considered, the Decision appealed from is hereby REVERSED and SET ASIDE and a new one entered declaring complainant was illegally dismissed. Accordingly, respondents are hereby ordered to reinstate complainant to her former or substantially equivalent position and to pay her backwages from the time her PNB retainership was terminated until the finality of this Decision.SO ORDERED.10

Ruling of the Court of AppealsOn January 28, 2010, the CA affirmed the conclusions reached by the NLRC.On the issue regarding the existence or non-existence of an employer-employee relationship, the CA ruled that Maxicare could not raise the said issue for the first time on appeal. Nonetheless, the CA ruled that the records showed that there existed an employer-employee relationship between Maxicare and Dr. Contreras for the following reasons: 1] Maxicare exercised significant control in her hiring and the conduct of her work; 2] Maxicare was the one who engaged her services; 3] Maxicare determined and prepared her work assignments, like attending to PNB members needing medical consultation and performing such other duties as may be assigned byMaxicare to her from time to time; 4] Maxicare determined her specific work schedules, which was for her to render services from 1:00 to 5:00 o’clock in the afternoon "every Tuesday and Thursday;"11 and 5] Maxicare prescribed the conditions of work for her, which were a) that she had to abide by the company rules and regulations, b) that she would keep inviolate all company records, documents, and properties and from disclosing or reproducing these records and documents to anyone without proper authority, c) that she had to surrender upon request for, or upon termination of her services, such records, documents, and properties to Maxicare; d) that Maxicare, through its Customer Care coordinator, Ms. Cecile Samonte, would monitor her work; and e) that she was compensated not according to the result of her efforts, but according to the amount of time she spent at the PNB clinic.12

The CA added that Maxicare impliedly admitted that an employer-employee relationship existed between both parties by arguing that she was not constructively

dismissed. Hence, Maxicare was estopped from questioning her status as its employee.13

On the issue of whether or not Dr. Contreras was constructively dismissed, the CA ruled that her transfer to Maybank, which resulted in a diminution of her salary, was prejudicial to her interest and amounted to a constructive dismissal. It stated that Maxicare, as employer, had the burden of proving that not only was her transfer made for valid or legitimate grounds, such as genuine business necessity, but also that such transfer was not unreasonable, inconvenient, or prejudicial to her.14

Maxicare filed a motion for reconsideration but it was denied by the CA in its Resolution,15 dated October 27, 2010.Not in conformity with the adverse decision, Maxicare filed this petition anchored on the following

GROUNDSITHE COURT OF APPEALS, IN RENDERING THE ASSAILED DECISION, ERRONEOUSLY SET ASIDE, EVEN CONTRADICTED, A PLETHORA OF JURISPRUDENCE THAT LACK OR ABSENCE OF JURISDICTION MAY BE RAISED FOR THE FIRST TIME EVEN ON APPEAL.IITHE COURT OF APPEALS MISAPPLIED THE 4-TIERED TEST TO DETERMINE THE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP WITHOUT CONCRETE BASIS.16

Maxicare’s positionMaxicare argues that questions on jurisdiction "may be raised at any stage of the proceedings, even on appeal, and the right to do so is not lost by waiver or by estoppel." Maxicare likewise asserts that "if the issue on jurisdiction may be resolved by an appellate tribunal motu propio when the same has not been raised in the courts below, with more reason that the same should be allowed to be considered and decided upon by the appellate court when, as in the present petition, the said issue has been raised in the pleadings before the appellate court."17

Considering that Dr. Contreras submitted evidence to support not only her claim of constructive dismissal but also the existence of an employer-employee relationship, its act of raising said issue should be sufficient ground for the CA to consider and rule on the issue of jurisdiction.18

Maxicare claims that there could have been no employer-employee relationship arising from the oral medical retainership agreement between the parties. It contends that it could not have effectively exercised control over the means and method adopted by Dr. Contreras in accomplishing her work as a medical retainer; that it did not determine the manner in which she conducted physical examination, immunized, diagnosed, or treated her patients; that Dr. Contreras confirmed that it paid her retainer fees and deducted only 10% "withholding tax payable-expanded;" that she was not in the list of Maxicare’s payroll; and that Maxicare did not deduct SSS contributions from the retainer fees that Dr. Contreras received. Hence, the above circumstances disprove the presence of employer-employee relationship. On the contrary, they strongly indicate a case of an independent contractor.19

Maxicare went on further by stating that Dr. Contreras was an independent contractor because she rendered services for a few hours a week, giving her free time to pursue her private practice as a physician and that upon the terms of their agreement, either party could terminate the arrangement upon one month’s advance notice.20

Finally, Maxicare contends that Dr. Contreras is a highly educated person who freely, willingly and voluntarily signed the new Medical Retainership Agreement.21 Therefore, there is no truth to her claim that she was forced to sign said agreement.22

Dr. Contreras’s positionOn the other hand, Dr. Contreras basically counters that Maxicare did not raise the issue of the existence of an employer-employee relationship before the LA. It also did not question such point in the NLRC. Maxicare brought up the matter for the first time only in the CA.The Court’s RulingThe petition has no merit at all.As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court, will not be permitted to change theory on appeal. Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory, which it could have done had it been aware of it at the time of the hearing before the trial court. To permit Maxicare in this case to change its theory on appeal would thus be unfair to Dr. Contreras, and would offend the basic rules of fair play, justice and due process.Indeed, Maxicare is already estopped from belatedly raising the issue of lack of jurisdiction considering that it has actively participated in the proceedings before the LA and the NLRC. The Court has consistently held that "while jurisdiction may be assailed at any stage, a party’s active participation in the proceedings before a court without jurisdiction will estop such party from assailing the lack of it." It is an undesirable practice of a party to participate in the proceedings, submit his case for decision and then accept the judgment, if favorable, but attack it for lack of jurisdiction, when adverse.23

In the case at bench, it may be recalled that Dr. Contreras filed a complaint for illegal dismissal against Maxicare before the LA. Maxicare was given the chance to defend its case before the LA. In fact, the LA decision favored Maxicare when it ruled that there was no illegal dismissal. On appeal, however, the NLRC reversed and set aside the LA’s decision and ordered Dr. Contreras’s reinstatement with payment of backwages. Upon the denial of its motion for reconsideration, Maxicare elevated its case to the CA raising the issue of jurisdiction for the first time.Undeniably, Maxicare never questioned the LA’s jurisdiction from the very beginning and never raised the issue of employer-employee relationship throughout the LA proceedings. Surely, Maxicare is not unaware of Article 217 of the Labor Code which enumerates the cases where the LA has exclusive and original jurisdiction. Maxicare definitely knows the basic rule that the LA can exercise jurisdiction over cases only when there is an employer-employee relationship between the parties in dispute.If Maxicare was of the position that there was no employer-employee relationship existing between Maxicare and Dr. Contreras, it should have questioned the jurisdiction of the LA right away. Surprisingly, it never did. Instead, it actively participated in the LA proceedings without bringing to the LA’s attention the issue of employer-employee relationship.On appeal before the NLRC, the subject issue was never raised either. Maxicare only raised the subject issue for the first time when it filed a petition in the CA challenging the adverse decision of the NLRC. It is, therefore, estopped from assailing the jurisdiction of the LA and the NLRC.It is true that questions of jurisdiction may be raised at any stage. It is also true, however, that in the interest of fairness, questions challenging the jurisdiction of courts will not be tolerated if the party questioning such jurisdiction actively participates in the court proceedings and allows the court to pass judgment on the case, and then questions the propriety of said judgment after getting an unfavorable

decision. It must be noted that Maxicare had two (2) chances of raising the issue of jurisdiction: first, in the LA level and second, in the NLRC level. Unfortunately, it remained silent on the issue of jurisdiction while actively participating in both tribunals. It was definitely too late for Maxicare to open up the issue of jurisdiction in the CA.The Court cannot tolerate this kind of procedural strategy on Maxicare’s part because it would be unfair to Dr. Contreras who would no longer be able to present further evidence material to the new issue raised on appeal. Maxicare’s lapse in procedure has proved fatal to its cause and therefore, it should suffer the consequences. The Court has been consistent in its ruling in a long line of cases, the latest of which is Duty Free Philippines Services, Inc., v. Manolito Q. Tria,24 where it was written:It was only in petitioner’s Petition for Certiorari before the CA did it impute liability on DFP as respondent’s direct employer and as the entity who conducted the investigation and initiated respondent’s termination proceedings. Obviously, petitioner changed its theory when it elevated the NLRC decision to the CA. The appellate court, therefore, aptly refused to consider the new theory offered by petitioner in its petition. As the object of the pleadings is to draw the lines of battle, so to speak, between the litigants, and to indicate fairly the nature of the claims or defenses of both parties, a party cannot subsequently take a position contrary to, or inconsistent, with its pleadings. It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view.The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions. We cannot permit petitioner to change its theory on appeal. It would be unfair to the adverse party who would have no more opportunity to present further evidence, material to the new theory, which it could have done had it been aware earlier of the new theory before the LA and the NLRC. More so in this case as the supposed employer of respondent which is DFP was not and is not a party to the present case.In Pamplona Plantation Company v. Acosta, petitioner therein raised for the first time in its appeal to the NLRC that respondents therein were not its employees but of another company. In brushing aside this defense, the Court held:x x x Petitioner is estopped from denying that respondents worked for it.1âwphi1 In the first place, it never raised this defense in the proceedings before the Labor Arbiter. Notably, the defense it raised pertained to the nature of respondents' employment, i.e., whether they are seasonal employees, contractors, or worked under the pakyaw system. Thus, in its Position Paper, petitioner alleged that some of the respondents are coconut filers and copra hookers or sakadors; some are seasonal employees who worked as scoopers or lugiteros; some are contractors; and some worked under the pakyaw system. In support of these allegations, petitioner even presented the company's payroll which will allegedly prove its allegations.By setting forth these defenses, petitioner, in effect, admitted that respondents worked for it, albeit in different capacities. Such allegations are negative pregnant - denials pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied, and amounts to an acknowledgment that respondents were indeed employed by petitioner.Also in Telephone Engineering & Service Co., Inc. v. WCC, et al., the Court held that the lack of employer-employee relationship is a matter of defense that the employer

should properly raise in the proceedings below. The determination of this relationship involves a finding of fact, which is conclusive and binding and not subject to review by this Court.In this case, petitioner insisted that respondent was dismissed from employment for cause and after the observance of the proper procedure for termination. Consequently, petitioner cannot now deny that respondent is its employee. While indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioner's belated denial that it is the employer of respondent is obviously an afterthought, a devise to defeat the law and evade its obligations.It is a fundamental rule of procedure that higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal. Petitioner is bound by its submissions that respondent is its employee and it should not be permitted to change its theory. Such change of theory cannot be tolerated on appeal, not due to the strict application of procedural rules, but as a matter of fairness. [Emphases supplied]WHEREFORE, the petition is DENIED.SO ORDERED.

G.R. No. 198261               October 16, 2013HECHANOVA BUGAY VILCHEZ LAWYERS, HECHANOVA & CO., INC., ATTY. EDITHA R. HECHANOVA,Petitioners, vs.ATTY. LENY O. MATORRE, Respondent.D E C I S I O NVILLARAMA, JR., J.:On appeal under Rule 45 is the March 14 2011 Decision1 of the Court of Appeals CA) which upheld the Decision2of the National Labor Relations Commission NLRC) that set aside the Decision3 of the Labor Arbiter in NLRC-NCR Case No. 09-12260-08. Likewise challenged is the Resolution4 denying reconsideration of the said CA decision.The assailed CA decision upheld the finding of the NLRC that respondent Atty. Leny 0 Matorre Atty. Matorre) was constructively dismissed by petitioners Hechanova Bugay Vilchez Lawyers HBV Law Firm), Hechanova Co., Inc. and Atty. Editha R. Hechanova Atty. Hechanova). The Labor Arbiter, whose decision was overturned by the NLRC had earlier dismissed the complaint filed by Atty. Matorre alleging that she was constructively dismissed.5

The facts follow:Atty. Matorre claimed that on August 1, 2008, she was employed by HBV Law Firm as a Senior Associate Attorney. Due to her work experience, her probationary period was waived and she was immediately employed as a regular employee of the said law firm with a monthly salary of P40,000, consultancy fee of P5,000, and an incentive pay equivalent to 8% of P1,500 per billable hour.6

As the managing partner of HBV Law Firm, Atty. Hechanova was the one who supervised Atty. Matorre and gave her work assignments.On August 11, 2008, Atty. Matorre, orally or through e-mails, started to express her feelings of being harassed by Atty. Hechanova.In an e-mail7 sent to Atty. Hechanova on August 11, 2008, Atty. Matorre wrote:Ma’am Edith,I cannot register yet the corporate name of Big Flick Animation with SEC online because the steps to be done require a lot of time and its system or our system is very slow before I proceed to the next step [sic].I regret to realize [sic] that you seem to be not pleased with my work output so far, even if I am trying and doing my best to adjust with your work style here, x x x.Honestly, I get seriously offended every time you speak to me because you always get irritated about the things I say, that I hesitate now to approach you personally to find out what I need to know about a certain assignment.I feel so humiliated whenever you scold me or whenever you raise your voice within the hearing [sic] of x x x other associate lawyers at a distance [sic]. I feel so embarrassed because it seems that you make it appear I am so stupid x x x.x x x xHoping for your understanding and I pray that you would have a not-so-stressful work schedule, so that you can keep your cool at all times.Thanks a lot.LenyAtty. Matorre also explained8 that she intended to improve her work and that she was not making excuses when she could not accomplish assigned tasks on time.During a meeting between Atty. Matorre and Atty. Hechanova on August 19, 2008,9 Atty. Matorre told Atty. Hechanova that since she (Atty. Hechanova) was not satisfied with her work and because they were frequently arguing with each other, it would be best if she (Atty. Matorre) resigns from the firm.10 Atty. Matorre requested that her resignation be made effective on September 30, 2008, but thinking that the said date was too far off, Atty. Hechanova accepted the resignation, with the condition that it be made effective on September 15, 2008.11

Atty. Matorre, in her own Position Paper12 which she submitted to the NLRC, admitted to the fact of her resignation. She recalled the conversation between her and Atty. Hechanova thus:Complainant [Atty. Matorre]: Ma’am kung sa tingin po ninyo, wala akong ginagawa o magagawang trabaho, kahit na kung tutuusin araw-araw akong may natatapos na trabaho, mas mabuti pa po sigurong mag-resign na lang ho ako, kasi lagi na lang po ninyo akong

hinahanapan ng mali at kinagagalitan kahit hindi naman kailangang pagalitan.1âwphi1 Hindi po tayo nagkakasundo sa trabaho.Respondent [Atty. Hechanova]: Okay, if that is what you like!Complainant [Atty. Matorre]: Pero Ma’am kung pwede po sana sa katapusan na lang ang effectivity, sa katapusan po ng September, kasi alanganin po kung katapusan ng August, para may enough time pa po ako maghanap ng new job.Respondent [Atty. Hechanova]: No, you make it earlier! Pumunta ka na ng SEC habang maaga pa kasi almost 2:00 p.m. na!Complainant [Atty. Matorre]: Sige po.13

On September 1, 2008, Atty. Matorre received a letter14 from Atty. Hechanova conveying the latter’s acceptance of her oral resignation. Atty. Hechanova’s secretary, Gladies Nepomuceno, attested15 that when Atty. Matorre received the aforementioned letter, Atty. Matorre merely said "okay" without displaying any sign of protest.On September 1, 2008, Atty. Matorre filed a complaint for constructive illegal dismissal, nonpayment of separation pay, and for payment of moral and exemplary damages and attorneys’ fees against HBV Law Firm.During the mandatory conference on September 18, 2008, Atty. Matorre stated that her demands consist of damages in the amount of P850,000 and a public apology.16

During the conciliation conference on October 23, 2008, HBV Law Firm stated that it has no offer for settlement.17

On November 13, 2008, during the conciliation conference, upon previous order of the Labor Arbiter, HBV Law Firm gave Atty. Matorre’s last pay, consultancy fee, and incentive pay in the total amount of P48,492.35.18

In a Decision19 dated April 22, 2009, the Labor Arbiter rendered judgment in favor of HBV Law Firm by dismissing Atty. Matorre’s complaint for lack of merit. It held that Atty. Matorre voluntarily resigned from her employment on August 19, 2008, and that Atty. Hechanova readily accepted Atty. Matorre’s oral resignation "when as Atty. Matorre was in the process of orally tendering her resignation, Atty. Hechanova intimated her intention of shortening the period of effectivity of Atty. Matorre’s resignation from 30 September 2008 to 15 September 2008."20

The Labor Arbiter cited jurisprudence stating that "once resignation is accepted, the employee no longer has any right to the job. It, therefore, goes without saying that resignation terminates the employer-employee relationship."21

The Labor Arbiter also denied Atty. Matorre’s monetary claims since she was not illegally dismissed, holding that these claims could not be awarded because of her "failure to prove that she was terminated from her employment with the requisite malice and/or bad faith."22

On May 13, 2010, the NLRC reversed23 the Decision of the Labor Arbiter and declared that Atty. Matorre was illegally dismissed.The NLRC held inter alia that a written resignation is the proper proof of her alleged voluntary resignation.24 The NLRC also reasoned that Atty. Hechanova’s act of moving Atty. Matorre’s last day of employment with HBV Law Firm from September 30, 2008 to September 15, 2008 is an act of harassment.25 This act, according to the NLRC, pushed Atty. Matorre, leaving her with no other option or time to save her job or look for another one.26 The NLRC stated that this, along with Atty. Hechanova’s refusal to give Atty. Matorre any assignment, her assignment of a subordinate to perform Atty. Matorre’s function while the latter was still in the office, Atty. Hechanova’s continuing harassment are "all clear acts constituting constructive dismissal."27

The NLRC thus awarded to Atty. Matorre full back wages and benefits from the time of illegal dismissal amounting to P936,000, separation pay amounting to P90,000, moral damages amounting to P200,000, exemplary damages amounting to P100,000, and attorney’s fees equivalent to 10% of the monetary award.28

Aggrieved, HBV Law Firm filed a petition for certiorari with the CA alleging that the NLRC committed grave abuse of discretion in holding that Atty. Matorre was constructively dismissed. The CA posed this query to resolve the matter: Whether Atty. Matorre’s utterance during her conversation with Atty. Hechanova on August 19, 2008 constitutes voluntary resignation on her part.29 If said resignation was a forced one, the CA continued, it is a clear case of constructive dismissal equivalent to illegal dismissal.30

On March 14, 2011, the CA upheld the ruling of the NLRC and held that no voluntary resignation took place.31 It ruled in favor of Atty. Matorre, saying that she was illegally dismissed in light of the circumstances surrounding the supposed resignation.32

The CA cited jurisprudence saying that constructive dismissal is a cessation of work because continued employment has been rendered impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.33

The CA justified the existence of constructive dismissal by arguing that first, Atty. Hechanova belittled Atty. Matorre regarding her work performance thus causing her emotional strain; second, when Atty. Matorre allegedly tendered her resignation, HBV Law Firm moved the period of effectivity thereof to an earlier date, thus making it more difficult for Atty. Matorre to find employment elsewhere; and third, the refusal of HBV Law Firm to give assignments to Atty. Matorre while she was still at the office is indicative of harassment on their part.34 The CA held that all these circumstances, taken together, constitute constructive dismissal.35

Petitioners are now before this Court asserting that the CA erred in not finding that Atty. Matorre’s resignation was voluntary and that she was not constructively dismissed.It should be noted that the fact of resignation is now undisputed. What remains to be determined is whether Atty. Matorre voluntarily resigned or was constructively dismissed by petitioners.We find the petition meritorious. The resignation of Atty. Matorre was voluntary and she was not constructively dismissed.Atty. Matorre failed to prove that her resignation was not voluntary, and that Atty. Hechanova and other members of HBV Law Firm committed acts against her that would constitute constructive dismissal.Atty. Matorre was not able to prove her allegations of harassment, insults, and verbal abuse on the part of Atty. Hechanova.The case of Vicente v. Court of Appeals (Former 17th Div.)36 is instructive on this matter. In the case at bar and in Vicente, the fact of resignation is not disputed, but only the voluntariness thereof. In Vicente, the employee alleged that her employer forced her to resign. The Court held that she voluntarily resigned and was not constructively dismissed. The Court said, Hence, petitioner cannot take refuge in the argument that it is the employer who bears the burden of proof that the resignation is voluntary and not the product of coercion or intimidation.Having submitted a resignation letter, it is then incumbent upon her to prove that the resignation was not voluntary but was actually a case of constructive dismissal with clear, positive, and convincing evidence. Petitioner failed to substantiate her claim of constructive dismissal.x x x xWe agree with the Court of Appeals that it was grave error on the part of the NLRC to rely on the allegation that Mr. Tecson threatened and forced petitioner to resign. Other than being unsubstantiated and self-serving, the allegation does not suffice to support the finding of force, intimidation, and ultimately constructive dismissal.Bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.37 (Emphases supplied.)Digitel Telecommunications Philippines, Inc. v. Soriano38 is similarly enlightening. In that case, the employee, a Director for Market and Communications, claimed that her employers harassed her to compel her to resign. This Court found that the employee failed to present a single witness to substantiate her claims of harassment and that her narration of events was unbelievable and contrary to human experience. It was then held that she failed to prove that she was constructively dismissed.In relation to the two abovementioned decided cases, in the case of Atty. Matorre, she also presented no evidence of constructive dismissal, apart from her self-serving and uncorroborated allegations.First, Atty. Matorre was not able to present a single witness to corroborate her claims of verbal abuse and insults from Atty. Hechanova. She was only able to adduce transcriptions 39 of what she claims were conversations between her and Atty. Hechanova, and nothing more. These are indeed self-serving and uncorroborated and should not be given evidentiary weight.On the other hand, the body of evidence presented by HBV Law Firm would show affidavits demonstrating that the other personnel in the said law firm neither heard nor saw any inappropriate behavior on the part of Atty. Hechanova towards Atty. Matorre.The Affidavit of Gladies Nepomuceno,40 the secretary of HBV Law Firm, states that the said affiant did "not believe that Atty. Matorre was treated like a slave" by the firm, as Atty. Matorre argued.

The Affidavit of Gladys C. Vilchez,41 a partner at HBV Law Firm, states that Atty. Vilchez, whose room was near Atty. Matorre’s, never heard Atty. Hechanova shout at Atty. Matorre nor speak to her in an offensive manner.Second, the act of HBV Law Firm of moving the effectivity date of Atty. Matorre’s resignation from September 30, 2008 to September 15, 2008 is not an act of harassment, as Atty. Matorre would have us believe. The 30-day notice requirement for an employee’s resignation is actually for the benefit of the employer who has the discretion to waive such period. Its purpose is to afford the employer enough time to hire another employee if needed and to see to it that there is proper turn-over of the tasks which the resigning employee may be handling. As one author42 puts it,x x x The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. (Emphasis supplied.)Moreover, the act of HBV Law Firm of moving the effectivity date of Atty. Matorre’s resignation to an earlier date cannot be seen as a malicious decision on the part of the firm in order to deprive Atty. Matorre of an opportunity to seek new employment. This decision cannot be viewed as an act of harassment but rather merely the exercise of the firm’s management prerogative. Surely, we cannot expect employers to maintain in their employ employees who intend to resign, just so the latter can have continuous work as they look for a new source of income.Third, the fact that HBV Law Firm was no longer assigning new work to Atty. Matorre after her resignation is not an act of harassment, but is also an exercise of management prerogative. Expecting that Atty. Matorre would no longer be working for HBV Law Firm after three to four weeks, she was no longer given additional assignments to ensure a smooth turn-over of duties and work. Indeed, having an employee focus on her remaining tasks and not assigning new ones to her would be beneficial on the part of HBV Law Firm as there would in fact be less tasks to be turned over to Atty. Matorre’s replacement. Said actuation is well within the ambit of the firm’s management prerogative, and is certainly not an act of harassment.To reiterate, in line with settled jurisprudence,43 since Atty. Matorre admittedly resigned, it was incumbent upon her to prove that her resignation was not voluntary, but was actually a case of constructive dismissal, with clear, positive, and convincing evidence.As shown above, Atty. Matorre failed to present any evidence of constructive dismissal, such as proof of the alleged harassment, insults, and verbal abuse she allegedly received during her stay at HBV Law Firm that led her to terminate her employment. Thus, it can be concluded that she resigned voluntarily.Since Atty. Matorre failed to prove that she was illegally or constructively dismissed, there is no need to discuss the issue of her monetary claims due to her lack of entitlement thereto.WHEREFORE, the petition is GRANTED. The Decision dated March 14, 2011 and Resolution dated August 12, 2011 of the Court of Appeals in CA-G.R. SP No. 115266 are REVERSED and SET ASIDE. The Decision of the Labor Arbiter dated April 22, 2009 is hereby REINSTATED. The complaint of respondent Atty. Leny O. Matorre for illegal dismissal is DISMISSED in its entirety for lack of merit.No pronouncement as to costs.SO ORDERED.

G.R. No. 191154               April 7, 2014SPI TECHNOLOGIES, INC. and LEA VILLANUEVA, Petitioners, vs.VICTORIA K. MAPUA, Respondent.D E C I S I O NREYES, J.:The Court remains steadfast on its stand that the determination of the continuing necessity of a particular officer or position in a business corporation is a management prerogative, and the courts will not interfere unless arbitrary or malicious action on the part of management is shown. Indeed, an employer has no legal obligation to keep more employees than are necessary for the operation of its business.1 In the instant case however, we find our intrusion indispensable, to look into matters which we would otherwise consider as an exercise of management prerogative. "Management prerogative" are not magic words uttered by an employer to bring him to a realm where our labor laws cannot reach.This is a petition for review on certiorari2 under Rule 45 of the Rules of Court of the Decision3 dated October 28, 2009 and Resolution4 dated January 18, 2010 of the Court of Appeals (CA) in CA-G.R. SP. No. 107879.The FactsVictoria K. Mapua (Mapua) alleged that she was hired in 2003 by SPI Technologies, Inc. (SPI) and was the Corporate Development’s Research/Business Intelligence Unit Head and Manager of the company. Subsequently in August 2006, the then Vice President and Corporate Development Head, Peter Maquera (Maquera) hired Elizabeth Nolan (Nolan) as Mapua’s supervisor.5

Sometime in October 2006, the hard disk on Mapua’s laptop crashed, causing her to lose files and data. Mapua informed Nolan and her colleagues that she was working on recovering the lost data and asked for their patience for any possible delay on her part in meeting deadlines.6

On November 13, 2006, Mapua retrieved the lost data with the assistance of National Bureau of Investigation Anti-Fraud and Computer Crimes Division. Yet, Nolan informed Mapua that she was realigning Mapua’s position to become a subordinate of co-manager Sameer Raina (Raina) due to her missing a work deadline. Nolan also disclosed that Mapua’s colleagues were "demotivated" [sic] because she was "taking things easy while they were working very hard," and that she was "frequently absent, under timing, and coming in late every time [Maquera] goes on leave or on vacation."7

On November 16, 2006, Mapua obtained a summary of her attendance for the last six months to prove that she did not have frequent absences or under time when Maquera would be on leave or vacation. When shown to Nolan, she was merely told not to give the matter any more importance and to just move on.8

In December 2006, Mapua noticed that her colleagues began to ostracize and avoid her. Nolan and Raina started giving out majority of her research work and other duties under Healthcare and Legal Division to the rank-and-file staff. Mapua lost about 95% of her work projects and job responsibilities.9

Mapua consulted these work problems with SPI’s Human Resource Director, Lea Villanueva (Villanueva), and asked if she can be transferred to another department within SPI. Subsequently, Villanueva informed Mapua that there is an intra-office opening and that she would schedule an exploratory interview for her. However, due to postponements not made by Mapua, the interview did not materialize.On February 28, 2007, Mapua allegedly saw the new table of organization of the Corporate Development Division which would be renamed as the Marketing Division. The new structure showed that Mapua’s level will be again downgraded because a new manager will be hired and positioned between her rank and Raina’s.10

On March 21, 2007, Raina informed Mapua over the phone that her position was considered redundant and that she is terminated from employment effective immediately. Villanueva notified Mapua that she should cease reporting for work the next day. Her laptop computer and company mobile phone were taken right away and her office phone ceased to function.11

Mapua was shocked and told Raina and Villanueva that she would sue them. Mapua subsequently called her lawyer to narrate the contents of the termination letter,12 which reads:March 21, 2007x x x x

Dear Ms. MAPUA,x x x xThis notice of separation, effective March 21, 2007 should be regarded as redundancy. Your separation pay will be computed as one month’s salary for every year of service, a fraction of at least six months will be considered as one year.Your separation pay will be released on April 20, 2007 subject to your clearance of accountabilities and as per Company policy.x x x x13

Mapua’s lawyer, in a phone call, advised Villanueva that SPI violated Mapua’s right to a 30-day notice.On March 27, 2007, Mapua filed with the Labor Arbiter (LA) a complaint for illegal dismissal, claiming reinstatement or if deemed impossible, for separation pay. Afterwards, she went to a meeting with SPI, where she was given a second termination letter,14 the contents of which were similar to the first one.15

On April 25, 2007, Mapua received through mail, a third Notice of Termination 16 dated March 21, 2007 but the date of effectivity of the termination was changed from March 21 to April 21, 2007. It further stated that her separation pay will be released on May 20, 2007 and a notation was inscribed, "refused to sign and acknowledge" with unintelligible signatures of witnesses.On May 13, 2007, a recruitment advertisement17 of SPI was published in the Philippine Daily Inquirer (Inquirer advertisement, for brevity). It listed all vacancies in SPI, including a position for Marketing Communications Manager under Corporate Support – the same group where Mapua previously belonged.SPI also sent a demand letter18 dated May 15, 2007 to Mapua, asking her to pay for the remaining net book value of the company car assigned to her under SPI’s car plan policy. Under the said plan, Mapua should pay the remaining net book value of her car if she resigns within five years from start of her employment date.In her Reply19 and Rejoinder,20 Mapua submitted an affidavit21 and alleged that on July 16, 2007, Prime Manpower Resources Development (Prime Manpower) posted an advertisement on the website of Jobstreet Philippines for the employment of a Corporate Development Manager in an unnamed Business Process Outsourcing (BPO) company located in Parañaque City. Mapua suspected that this advertisement was for SPI because the writing style used was similar to Raina’s. She also claimed that SPI is the only BPO office in Parañaque City at that time. Thereafter, she applied for the position under the pseudonym of "Jeanne Tesoro". On the day of her interview with Prime Manpower’s consultant, Ms. Portia Dimatulac (Dimatulac), the latter allegedly revealed to Mapua that SPI contracted Prime Manpower’s services to search for applicants for the Corporate Development Manager position.Because of these developments, Mapua was convinced that her former position is not redundant. According to her, she underwent psychiatric counseling and incurred medical expenses as a result of emotional anguish, sleepless nights, humiliation and shame from being jobless. She also averred that the manner of her dismissal was unprofessional and incongruous with her rank and stature as a manager as other employees have witnessed how she was forced to vacate the premises on the same day of her termination.On the other hand, SPI stated that the company regularly makes an evaluation and assessment of its corporate/organizational structure due to the unexpected growth of its business along with its partnership with ePLDT and the acquisition of CyMed.22 As a result, SPI underwent a reorganization of its structure with the objective of streamlining its operations. This was embodied in an Inter-Office Memorandum23 dated August 28, 2006 issued by the company’s Chief Executive Officer.24 It was then discovered after assessment and evaluation that the duties of a Corporate Development Manager could be performed/were actually being performed by other officers/managers/departments of the company. As proof that the duties of Mapua are being/could be performed by other SPI officers and employees, Villanueva executed an affidavit25 attesting that Mapua’s functions are being performed by other SPI managers and employees.On March 21, 2007, the company, through Villanueva, served a written notice to Mapua, informing her of her termination effective April 21, 2007. Mapua refused to receive the notice, thus, Villanueva made a notation "refused to sign and acknowledge" on the letter. On that same day, SPI filed an Establishment Termination Report with the Office of the Regional Director of the Department of Labor and Employment-National Capital Region (DOLE-NCR) informing the

latter of Mapua’s termination. Mapua was offered her separation and final pay, which she refused to receive. Before the effective date of her termination, she no longer reported for work. SPI has not hired a Corporate Development Manager since then.SPI denied contracting the services of Prime Manpower for the hiring of a Corporate Development Manager and emphasized that Prime Manpower did not even state the name of its client in the Jobstreet website. SPI also countered that Dimatulac’s alleged revelation to Mapua that its client is SPI must be struck down as mere hearsay because only Mapua executed an affidavit to prove that such disclosure was made. While SPI admitted the Inquirer advertisement, the company stated that Mapua was a Corporate Development Manager and not a Marketing Communications Manager, and that from the designations of these positions, it is obvious that the functions of one are entirely different from that of the other.26

LA DecisionOn June 30, 2008, the LA rendered a Decision,27 with the following dispositive portion:WHEREFORE, prescinding from the foregoing, the redundancy of [Mapua’s] position being in want of factual basis, her termination is therefore hereby declared illegal. Accordingly, she should be paid her backwages, separation pay in lieu of reinstatement, moral and exemplary damages and attorney’s fees as follows:

a) Backwages:

03/21/07-06/30/08

P67,996 x 15.30 mos. = P1,040,338.80

13th Month Pay:

P1,040,338.80/12= P520,169.40 P1,560,508.20

b) Separation Pay: (1 mo. per year of service)

12/01/03-06/30/08 = 5.7 or 6 yrs.

P67,996.00 x 6 = 407,976.00

c) Moral Damages: P500,000.00

d) Exemplary Damages: 250,000.00

e) Attorney’s Fees: 196,848.42

Total Award P2,915,332.62

or a grand total of TWO MILLION NINE HUNDRED FIFTEEN THOUSAND THREE HUNDRED THIRTY-TWO and 62/100 (P2,915,332.62)Pesos only.Respondents are further ordered to award herein complainant the car assigned to her.SO ORDERED.28

Unrelenting, SPI appealed the LA decision to the National Labor Relations Commission (NLRC).NLRC RulingOn October 24, 2008, the NLRC rendered its Decision,29 with the fallo, as follows:WHEREFORE, the foregoing premises considered, the instant appeal is hereby GRANTED. The Decision appealed from is REVERSED and SET ASIDE, and a new one is issued finding the appellants not guilty of illegal dismissal.However, appellants are ordered to pay the sum of Three Hundred Thirty[-]Four Thousand Five Hundred Thirty[-]Eight Pesos and Thirty[-]Four Centavos ([P]334,538.34) representing her separation benefits and final pay in the amount of [P]203,988.00 and [P]130,550.34, respectively.SO ORDERED.30

In ruling so, the NLRC held that "[t]he determination of whether [Mapua’s] position as Corporate Development Manager is redundant is not for her to decide. It essentially and necessarily lies within the sound business management."31 As early as August 28, 2006,

Ernest Cu, SPI’s Chief Executive Officer, announced the corporate changes in the company.A month earlier, the officers held their Senior Management Strategic Planning Session with the theme, "Transformation" or re-invention of SPI purposely to create an organizational structure that is streamlined, clear and efficient.32 In fact, Nolan and Raina, Mapua’s superiors were actually doing her functions with the assistance of the pool of analysts, as attested to by Villanueva.At odds with the NLRC decision, Mapua elevated the case to the CA by way of petition for certiorari, arguing that based on evidence, the LA decision should be reinstated.CA RulingMapua’s petition was initially dismissed by the CA in its Resolution 33 dated March 25, 2009 for lack of counsel’s MCLE Compliance number, outdated IBP and PTR numbers of counsel, and lack of affidavit of service attached to the petition.Mapua filed a motion for reconsideration which was granted by the CA, reinstating the petition in its Resolution34 dated May 26, 2009.On October 28, 2009, the CA promulgated its Decision,35 reinstating the LA’s decree, viz:WHEREFORE, in view of the foregoing, the assailed decision dated October 24, 2008, as well as the resolution dated December 23, 2008 of the National Labor Relations Commission in NLRC LAC No. 09-003262-08 (8) NLRC NCR CN. 00-03-02761-07 are hereby REVERSED and SET ASIDE. The decision of the Labor Arbiter dated June 30, 2008 in NLRC-NCR Case No. 00-03-02761-07 is hereby REINSTATED with MODIFICATION in that the amount of 13th month pay of [P]520,169.40 is hereby reduced to [P]86,694.90.SO ORDERED.36

SPI’s motion for reconsideration was denied on January 18, 2010. Thus, through a petition for review on certiorari, SPI submitted the following grounds for the consideration of this Court:

ITHE CA DECLARED AS ILLEGAL [MAPUA’S] SEPARATION FROM SERVICE SOLELY ON THE BASIS OF HER SELF-SERVING AND UNFOUNDED ALLEGATION OF A SUPPOSED JOB ADVERTISEMENTIITHE CA COMPLETELY DISREGARDED THE FACT THAT [MAPUA] WAS VALIDLY SEPARATED FROM SERVICE ON THE GROUND OF REDUNDANCY WHICH IS AN AUTHORIZED CAUSE FOR TERMINATION OF EMPLOYMENT UNDER ARTICLE 283 OF THE LABOR CODE AND PREVAILING JURISPRUDENCEIIITHE CA FOUND THAT [MAPUA] WAS NOT ACCORDED HER RIGHT TO DUE PROCESS IN UTTER DEROGATION OF THE APPLICABLE PROVISIONS OF THE LABOR CODE AND THE PERTINENT JURISPRUDENCEIVTHE CA COMPLETELY AFFIRMED THE AWARDS OF SEPARATION PAY, BACKWAGES, DAMAGES AND ATTORNEY’S FEES IN THE [LA’S] DECISION IN TOTAL DISREGARD OF THE APPLICABLE LAW AND JURISPRUDENCEVTHE CA UPHELD THE [LA’S] DECISION HOLDING INDIVIDUAL PETITIONER SOLIDARILY AND PERSONALLY LIABLE TO [MAPUA] WITHOUT SHOWING ANY BASIS THEREFOR37

Our RulingThe Court sustains the CA’s ruling.Mapua was dismissed from employment supposedly due to redundancy. However, she contended that her position as Corporate Development Manager is not redundant. She cited that SPI was in fact actively looking for her replacement after she was terminated. Furthermore, SPI violated her right to procedural due process when her termination was made effective on the same day she was notified of it.Article 283 of the Labor Code provides for the following:ART. 283. Closure of establishment and reduction of personnel. – The employer may also terminate the employment of any employee due to installation of labor-saving devices,

redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses and financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1) whole year. (Emphasis ours)Expounding on the above requirements of written notice and separation pay, this Court in Asian Alcohol Corporation v. NLRC38 pronounced that for a valid implementation of a redundancy program, the employer must comply with the following requisites: (1) written notice served on both the employee and the DOLE at least one month prior to the intended date of termination; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant position; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant.39

Anent the first requirement which is written notice served on both the employee and the DOLE at least one month prior to the intended date of termination, SPI had discharged the burden of proving that it submitted a notice to the DOLE on March 21, 2007, stating therein that the effective date of termination is on April 21, 2007. It is, however, quite peculiar that two kinds of notices were served to Mapua. One termination letter stated that its date of effectivity is on the same day, March 21, 2007. The other termination letter sent through mail to Mapua’s residence stated that the effective date of her termination is on April 21, 2007.Explaining the discrepancy, SPI alleged that the company served a notice to Mapua on March 21, 2007, which stated that the effective date of termination is on April 21, 2007. However she refused to acknowledge or accept the letter. Later on, Mapua requested for a copy of the said letter but due to inadvertence and oversight, a draft of the termination letter bearing a wrong effectivity date was given to her. To correct the oversight, a copy of the original letter was sent to her through mail.40

Our question is, after Mapua initially refused to accept the letter, why did SPI make a new letter instead of just giving her the first one – which the Court notes was already signed and witnessed by other employees? Curiously, there was neither allegation nor proof that the original letter was misplaced or lost which would necessitate the drafting of a new one. SPI did not even explain in the second letter that the same was being sent in lieu of the one given to her. Hence, SPI must shoulder the consequence of causing the confusion brought by the variations of termination letters given to Mapua.Also, crucial to the determination of the effective date of termination was that Mapua was very specific as regards what happened immediately after: "Ms. Villanueva had Ms. Mapua’s assigned laptop computer and cellphone immediately taken by Human Resources supervisor, Ms. Dhang Rondael. Within about an hour, Ms. Mapua’s landline phone ceased to function after Ms. Villanueva’s and Mr. Raina’s announcement." Her company I.D. was taken away from her that very same day.41 To counter these statements, SPI merely stated that before the effective date of Mapua’s termination on April 21, 2007, she no longer reported for work. To this Court, this is insufficient rebuttal to the precise narrative of Mapua.On the matter of separation pay, there is no question that SPI indeed offered separation pay to Mapua, but the offer must be accompanied with good faith in the abolishment of the redundant position and fair and reasonable criteria in ascertaining the redundant position. It is insignificant that the amount offered to Mapua is higher than what the law requires because the Court has previously noted that "a job is more than the salary that it carries. There is a psychological effect or a stigma in immediately finding one’s self laid off from work."42

Moving on to the issue of the validity of redundancy program, SPI asserted that an employer has the unbridled right to conduct its own business in order to achieve the results it desires. To prove that Villanueva’s functions are redundant, SPI submitted an Inter-Office Memorandum43 and affidavit executed by its Human Resources Director, Villanueva. The pertinent portions of the memorandum read:ORGANIZATION STRUCTUREOne of the most important elements of successfully effecting change is to create an organization structure that is streamlined, clear and efficient. We think we have done that and the new format is illustrated in Attachment A. The upper part shows my direct reports who are heads of the various shared services departments and the lower part shows the set up of the business units. The important features of the structure are discussed in the following sections. For brevity, I have purposely not summarized the roles that will remain the same.x x x xCorporate DevelopmentPeter Maquera will continue to head Corporate Development but the group’s scope will be expanded to include Marketing across the whole company. Essentially, Marketing will be taken out of the business units and centralized under Corporate Development. Elizabeth Nolan will move from her role as Publishing’s VP of Sales and Marketing to become the head of Global Marketing. The unit will continue to focus on strengthening the SPI brand, while at the same time maximizing the effectiveness of our spending. Josie Gonzales, head of Corporate Relations, will also be transitioned to Corporate Development.44

The memorandum made no mention that the position of the Corporate Development Manager or any other position would be abolished or deemed redundant. In this regard, may the affidavit of Villanueva which enumerated the various functions of a Corporate Development Manager being performed by other SPI employees be considered as sufficient proof to uphold SPI’s redundancy program?In AMA Computer College, Inc. v. Garcia, et al.,45 the Court held that the presentation of the new table of the organization and the certification of the Human Resources Supervisor that the positions occupied by the retrenched employees are redundant are inadequate as evidence to support the college’s redundancy program. The Court quotes the related portion of its ruling:In the case at bar, ACC attempted to establish its streamlining program by presenting its new table of organization. ACC also submitted a certification by its Human Resources Supervisor, Ma. Jazmin Reginaldo, that the functions and duties of many rank and file employees, including the positions of Garcia and Balla as Library Aide and Guidance Assistant, respectively, are now being performed by the supervisory employees. These, however, do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. As they are, they are grossly inadequate and mainly self-serving. More compelling evidence would have been a comparison of the old and new staffing patterns, a description of the abolished and newly created positions, and proof of the set business targets and failure to attain the same which necessitated the reorganization or streamlining.46 (Citations omitted and emphasis ours)Also connected with the evidence negating redundancy was SPI’s publication of job vacancies after Mapua was terminated from employment. SPI maintained that the CA erred when it considered Mapua’s self-serving affidavit as regards the Prime Manpower advertisement because the allegations therein were based on Mapua’s unfounded suspicions. Also, the failure of Mapua to present a sworn statement of Dimatulac renders the former’s statements hearsay.Even if we disregard Mapua’s affidavit as regards the Prime Manpower advertisement, SPI admitted that it caused the Inquirer advertisement for a Marketing Communications Manager position.47 Mapua alleged that this advertisement belied the claim of SPI that her position is redundant because the Corporate Development division was only renamed to Marketing division.Instead of explaining how the functions of a Marketing Communications Manager differ from a Corporate Development Manager, SPI hardly disputed Mapua when it stated that, "[j]udging from the titles or designation of the positions, it is obvious that the functions

of one are entirely different from that of the other."48 SPI, being the employer, has possession of valuable information concerning the functions of the offices within its organization. Nevertheless, it did not even bother to differentiate the two positions.Furthermore, on the assumption that the functions of a Marketing Communications Manager are different from that of a Corporate Development Manager, it was not even discussed why Mapua was not considered for the position. While SPI had no legal duty to hire Mapua as a Marketing Communications Manager, it could have clarified why she is not qualified for that position. In fact, Mapua brought up the subject of transfer to Villanueva and Raina several times prior to her termination but to no avail. There was even no showing that Mapua could not perform the duties of a Marketing Communications Manager.Therefore, even though the CA based its ruling only on the Prime Manpower advertisement coupled with the purported disclosure to Mapua, the Court holds that the confluence of other factors supports the said ruling.The Court does not agree with the rationalization of the NLRC that "[i]f it were true that her position was not redundant and indispensable, then the company must have already hired a new one to replace her in order not to jeopardize its business operations. The fact that there is none only proves that her position was not necessary and therefore superfluous."49

What the above reasoning of the NLRC failed to perceive is that "[o]f primordial consideration is not the nomenclature or title given to the employee, but the nature of his functions."50 "It is not the job title but the actual work that the employee performs."51 Also, change in the job title is not synonymous to a change in the functions. A position cannot be abolished by a mere change of job title. In cases of redundancy, the management should adduce evidence and prove that a position which was created in place of a previous one should pertain to functions which are dissimilar and incongruous to the abolished office.Thus, in Caltex (Phils.), Inc. (now Chevron Phils., Inc.) v. NLRC,52 the Court dismissed the employer’s claim of redundancy because it was shown that after declaring the employee’s position of Senior Accounting Analyst as redundant, the company opened other accounting positions (Terminal Accountant and Internal Auditor) for hiring. There was no showing that the private respondent therein could not perform the functions demanded of the vacant positions, to which he could be transferred to instead of being dismissed.On the issue of the solidary obligation of the corporate officers impleaded vis-à-vis the corporation for Mapua’s illegal dismissal, "[i]t is hornbook principle that personal liability of corporate directors, trustees or officers attaches only when: (a) they assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; (b) they consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; (c) they agree to hold themselves personally and solidarily liable with the corporation; or (d) they are made by specific provision of law personally answerable for their corporate action."53

While the Court finds Mapua’s averments against Villanueva, Nolan, Maquera and Raina as detailed and exhaustive, the Court takes notice that these are mostly suppositions on her part. Thus, the Court cannot apply the above-enumerated exceptions when a corporate officer becomes personally liable for the obligation of a corporation to this case.With respect to the vehicle under the company car plan which the LA awarded to Mapua, the Court rules that the subject matter is not within the jurisdiction of the LA but with the regular courts, the remedy being civil in nature arising from a contractual obligation, following this Court’s ruling in several cases.54

The Court sustains the CA’s award of moral and exemplary damages. Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassed and arbitrarily terminated by the employer. Moral damages may be awarded to compensate one for diverse injuries such as mental anguish, besmirched reputation, wounded feelings, and social humiliation occasioned by the employer’s

unreasonable dismissal of the employee. The Court has consistently accorded the working class a right to recover damages for unjust dismissals tainted with bad faith; where the motive of the employer in dismissing the employee is far from noble.1âwphi1 The award of such damages is based not on the Labor Code but on Article 220 of the Civil Code.55 However, the Court observes that the CA decision affirming the LA’s award of P500,000.00 and P250,000.00 as moral and exemplary damages, respectively, is evidently excessive because the purpose for awarding damages is not to enrich the illegally dismissed employee. Consequently, the Court hereby reduces the amount of P50,000.00 each as moral and exemplary damages.56

Mapua is also entitled to attorney’s fees but the Court is modifying the amount of P196,848.42 awarded by the LA and fix such attorney’s fees in the amount of ten percent (10%) of the total monetary award, pursuant to Article 11157 of the Labor Code.WHEREFORE, the Decision dated October 28, 2009 and Resolution dated January 18, 2010 of the Court of Appeals in CA-G.R. SP. No. 107879 are hereby AFFIRMED with the following MODIFICATIONS:

1. Moral and exemplary damages is hereby reduced to P50,000.00 each; and2. Attorney's fees shall be computed at ten percent (10%) of the aggregate monetary award.

The monetary awards shall earn interest at the rate of six percent (6%) per annum from the time of respondent Victoria K. Mapua's illegal dismissal until finality of this Decision, and twelve percent (12%) legal interest thereafter until fully paid.Petitioner SPI Technologies, Inc. shall be liable for the foregoing awards.SO ORDERED.

G.R. No. 196573               October 16, 2013

VICTORINO OPINALDO, Petitioner, vs.NARCISA RAVINA, Respondent.D E C I S I O NVILLARAMA, JR., J.:On appeal under Rule 45 is the Decision1 dated October 19, 2010 and Resolution2 dated March 17, 2011 of the Court of Appeals (CA), Cebu City, in CA-G.R. SP No. 04479 which reversed and set aside the Decision3 and Resolution4 of the National Labor Relations Commission (NLRC), Cebu City, and dismissed petitioner s complaint for illegal dismissal against respondent.The facts follow.Respondent Narcisa Ravina (Ravina) is the general manager and sole proprietor of St. Louisse Security Agency (the Agency). Petitioner Victorino Opinaldo (Opinaldo) is a security guard who had worked for the Agency until his alleged illegal dismissal by respondent on December 22, 2006.Agency hired the services of petitioner on October 5, 2005, with a daily salary of P176.66 and detailed him to PAIJR Furniture Accessories (PAIJR) in Mandaue City.5

In a letter dated August 15, 2006, however, the owner of PAIJR submitted a written complaint to respondent stating as follows:I have two guards assigned here in my company, namely, SG. Opinaldo and SGT. Sosmenia. Hence, ... I hereby formalize our request to relieve one of our company guards and I choose SG. VICTORINO B. OPINALDO, detailed/assigned at PAIJR FURNITURE ACCESSORIES located at TAWASON, MANDAUE CITY. For the reason: He is no longer physically fit to perform his duties and responsibilities as a company guard because of his health condition.Looking forward to your immediate action. Thank you.6

Acceding to PAIJR’s request, respondent relieved petitioner from his work. Respondent also required petitioner to submit a medical certificate to prove that he is physically and mentally fit for work as security guard.On September 6, 2006, respondent reassigned petitioner to Gomez Construction at Mandaue City. After working for a period of two weeks for Gomez Construction and upon receipt of his salary for services rendered within the said two-week period, petitioner ceased to report for work.7 The records show that petitioner’s post at Gomez Construction was the last assignment given to him by respondent.On November 7, 2006, petitioner filed a complaint8 against respondent with the Department of Labor and Employment (DOLE) Regional Office in Cebu City for underpayment of salary and nonpayment of other labor standard benefits. The parties agreed to settle and reached a compromise agreement. On November 27, 2006, petitioner signed a Quitclaim and Release9 before the DOLE Regional Office in Cebu City for the amount ofP5,000.10

After almost four weeks from the settlement of the case, petitioner returned to respondent’s office on December 22, 2006. Petitioner claims that when he asked respondent to sign an SSS11 Sickness Notification which he was going to use in order to avail of the discounted fees for a medical check-up, respondent allegedly refused and informed him that he was no longer an employee of the Agency. Respondent allegedly told him that when he signed the quitclaim and release form at the DOLE Regional Office, she already considered him to have quit his employment.12 Respondent, on the other hand, counterclaims that she did not

illegally dismiss petitioner and that it was a valid exercise of management prerogative that he was not given any assignment pending the submission of the required medical certificate of his fitness to work.13

On January 26, 2007, petitioner filed a Complaint14 for Illegal Dismissal with a prayer for the payment of separation pay in lieu of reinstatement against respondent and the Agency before the NLRC Regional Arbitration Branch No. VII, Cebu City. After trial and hearing, Labor Arbiter Maria Christina S. Sagmit rendered a Decision15on June 18, 2008 holding respondent and the Agency liable for illegal dismissal and ordering them to pay petitioner separation pay and back wages. The Labor Arbiter ruled,In the instant case, respondents failed to establish that complainant was dismissed for valid causes. For one, there is no evidence that complainant was suffering from physical illness which will explain his lack of assignment. Further, there is no admissible proof that Ravina even required complainant to submit a medical certificate. Thus, complainant could not be deemed to have refused or neglected to comply with this order.x x x xConsidering that there is no evidence that complainant was physically unfit to perform his duties, respondents must be held liable for illegal dismissal. Ordinarily, complainant will be entitled to reinstatement and full backwages. However, complainant has expressed his preference not to be reinstated. Hence, respondents must be ordered to give complainant separation pay in lieu of reinstatement equivalent to one month’s salary for every year of service. Complainant is also entitled to full backwages from the time he was terminated until the date of this Decision. WHEREFORE, respondents Narcisa Ravina and/or St. Louisse Security Agency are ordered to pay complainant the total amount EIGHTY-TWO THOUSAND THREE HUNDRED FORTY PESOS (P82,340.00), consisting ofP22,500.00 in separation pay and P59,840.00 in full backwages.SO ORDERED.16

Respondent appealed to the NLRC which, however, affirmed the decision of the Labor Arbiter and dismissed the appeal for lack of merit.17 The NLRC ruled that there was no just and authorized cause for dismissal and held that "without a certification from a competent public authority that petitioner suffers from a disease of such nature or stage that cannot be cured within a period of six (6) months even with proper medical attendance, respondents are not justified in refusing petitioner’s presence in the workplace."18 The NLRC also ruled that neither did petitioner abandon his job as his failure to work was due to "respondents turning him down."19 Respondent moved for reconsideration but the motion was denied in a Resolution20 dated June 30, 2009 where the NLRC reiterated its finding of illegal dismissal given the absence of any just or authorized cause for the termination of petitioner and the failure to prove abandonment on his part.Respondent elevated the case to the CA on a Petition for Certiorari.21 On October 19, 2010, the appellate court ruled for respondent and reversed and set aside the decision and resolution of the NLRC. Ruling on the issue raised by petitioner that respondent’s petition should have been dismissed outright as her motion for reconsideration before the NLRC was filed out of time, the appellate court held that the issue was rendered moot and academic when the NLRC gave

due course to the motion and decided the case on the merits. The appellate court further held that petitioner should have filed his comment or opposition upon the filing of the subject motion for reconsideration and not after the termination of the proceedings before the NLRC. As to the issue of illegal dismissal, the appellate court ruled that it was petitioner himself who failed to report for work and therefore severed his employment with the Agency. The CA further held that petitioner’s claims relative to his alleged illegal dismissal were not substantiated. The pertinent portions of the assailed Decision reads,Based from the evidence on record, the chain of events started when PAIJR sent to Ravina its 15 August 2006 letter-complaint to relieve Opinaldo. This led to Opinaldo’s reassignment to work for Engr. Gomez on 06 September 2006. Upon his failure to continue working for Engr. Gomez due to his refusal to obtain a medical certificate, Opinaldo filed the complaint for money claims on 07 November 2006. This was however settled when Opinaldo and Ravina signed a quitclaim on 27 November 2006. Still, Opinaldo did not obtain the medical certificate required by Ravina. Then, Opinaldo’s hasty filing of a complaint for illegal dismissal against Ravina on 26 January 2007.x x x xThe requirement to undergo a medical examination is a lawful exercise of management prerogative on Ravina’s part considering the charges that Opinaldo was not only suffering from hypertension but was also sleeping while on duty. The management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of workers.Besides, as a security guard, the need to be physically fit cannot be downplayed. If at all, Opinaldo’s obstinate refusal to submit his medical certificate is equivalent to willful disobedience to a lawful order. x x x.x x x xVerily, the totality of Opinaldo’s acts justifies the dismissal of his complaint for illegal dismissal against Ravina. While it is true that the state affirms labor as a primary social economic force, we are also mindful that the management has rights which must also be respected and enforced.22

Petitioner moved for reconsideration of the Decision but his motion was denied in the questioned Resolution of March 17, 2011 on the ground that there are neither cogent reasons nor new and substantial grounds which would warrant a reversal of the appellate court’s findings. Hence, petitioner filed this petition alleging that:I THE HONORABLE COURT OF APPEALS ERRED AND DECIDED THE CASE NOT IN ACCORDANCE WITH LAW AND ESTABLISHED JURISPRUDENCE WHEN IT GAVE DUE COURSE TO THE RESPONDENT’S PETITION FOR CERTIORARI UNDER RULE 65 DESPITE BEING FILED OUT OF TIME AND NOT PROPERLY VERIFIEDII THE HONORABLE COURT OF APPEALS ERRED AND DECIDED THE CASE NOT IN ACCORDANCE WITH LAW AND ESTABLISHED JURISPRUDENCE WHEN IT REVERSED AND SET ASIDE THE DECISION AND RESOLUTION OF THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, BY DECLARING THAT THE DISMISSAL OF PETITIONER WAS LEGAL AND PROPER23

We first rule on the procedural issue.Petitioner questions the appellate court for ruling that the issue of the timeliness of the filing of respondent’s motion for reconsideration of the NLRC decision has become moot and academic when the NLRC dismissed the said motion based on the merits and affirmed its decision. It is the opinion of petitioner that "this should not and cannot be understood to mean that the motion for reconsideration was filed within the period allowed," and that "the Commission may have accommodated the motion for reconsideration although belatedly filed and had chosen to decide it based on its merits x x x but it does not change the fact that the motion for reconsideration before the Commission was filed beyond the reglementary period."24 Petitioner believes that respondent’s filing of the motion for reconsideration on time is a precondition to the application of the rule that a petition for certiorari must be filed within 60 days from the notice of the denial of the motion for reconsideration. As petitioner puts it, "the counting of the sixty (60)-day period from the notice of the denial of the motion for reconsideration is proper only when the motion was filed on time."25

The CA, ruling that the procedural issue is already moot and academic, ratiocinated as follows:Anent the first issue, Ravina argues that the issue of timeliness of filing a Motion for Reconsideration with the NLRC has been dispensed with when it resolved to dismiss said Motion based on the merits and not on the mere technical issue of timeliness. Ravina further insists that had the NLRC denied said Motion based on the issue of timeliness, it would have just outrightly dismissed it based on said ground and not on the merits she raised in her Motion for Reconsideration.The period within which to file a certiorari petition is 60 days as provided under Section 4, Rule 65 of the 1997 Rules of Civil Procedure as amended by Circular No. 39-98 and further amended by A.M. No. 00-2-03-SC, thusly:SECTION 4. When and where petition filed. – The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said motion.x x x xx x x xTo reiterate, the NLRC promulgated its challenged Decision on 24 April 2009. Ravina alleged that her former counsel received a copy of said decision on 08 June 2009. However, she changed her counsel who, in turn, obtained a copy of the decision on 17 June 2009. The NLRC then promulgated its assailed Resolution on 30 June 2009 which Ravina received on 29 July 2009. Ravina’s Petition for Certiorari, dated 28 August 2009, was filed on 09 September 2009.The reckoning period for the filing of a certiorari petition is sixty (60) days counted from notice of the denial of said motion. Prescinding from the foregoing, the Petition for Certiorari was filed within the 60-day period.At this stage of the proceeding, it is futile to belabor on the timeliness of the Motion for Reconsideration. This is due to the fact that the issue of timeliness has become moot and academic considering that Ravina’s Motion for Reconsideration was given due course by the NLRC. In fact, the NLRC even decided the motion on the merits and not merely on technicality. Moreover, Opinaldo should have filed a Comment or Opposition as soon as the Motion for

Reconsideration was filed. Opinaldo should not have waited for the termination of the proceedings before the NLRC. In point of fact, the belated questioning of the issue of timeliness even operated to estop Opinaldo.26(Emphasis ours.)Time and again, we have ruled and it has become doctrine that the perfection of an appeal within the statutory or reglementary period and in the manner prescribed by law is mandatory and jurisdictional. Failure to do so renders the questioned decision final and executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal.27 In labor cases, the underlying purpose of this principle is to prevent needless delay, a circumstance which would allow the employer to wear out the efforts and meager resources of the worker to the point that the latter is constrained to settle for less than what is due him.28

In the case at bar, the applicable rule on the perfection of an appeal from the decision of the NLRC is Section 15, Rule VII of the 2005 Revised Rules of Procedure of the National Labor Relations Commission:Section 15. Motions for Reconsideration. – Motion for reconsideration of any decision, resolution or order of the Commission shall not be entertained except when based on palpable or patent errors; provided that the motion is under oath and filed within ten (10) calendar days from receipt of decision, resolution or order, with proof of service that a copy of the same has been furnished, within the reglementary period, the adverse party; and provided further, that only one such motion from the same party shall be entertained.Should a motion for reconsideration be entertained pursuant to this SECTION, the resolution shall be executory after ten (10) calendar days from receipt thereof.We are not, however, unmindful that the NLRC is not bound by the technical rules of procedure and is allowed to be liberal in the application of its rules in deciding labor cases. Thus, under Section 2, Rule I of the 2005 Revised Rules of Procedure of the National Labor Relations Commission it is stated:Section 2. Construction. – These Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes.It is significant that the 2011 NLRC Rules of Procedure, under Section 2, Rule I thereof, also carries exactly the same provision. Further, the 2005 Revised Rules and the 2011 Rules carry identical provisions appearing under Section 10, Rule VII of both laws:Section 10. Technical rules not binding. – The rules of procedure and evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process.In any proceeding before the Commission, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any Presiding Commissioner or Commissioner to exercise complete control of the proceedings at all stages.All said, despite this jurisdiction’s stance towards the exercise of liberality, the rules should not be relaxed when it would render futile the very purpose for which the principle of liberality is adopted.29 The liberal interpretation stems from the

mandate that the workingman’s welfare should be the primordial and paramount consideration.30We are convinced that the circumstances in the case at bar warranted the NLRC’s exercise of liberality when it decided respondent’s motion for reconsideration on the merits.The subject motion for reconsideration of the NLRC decision was filed on June 25, 2009. The evidence on record shows that the decision of the NLRC dated April 24, 2009 was received by respondent herself on June 17, 2009. The same decision was, however, earlier received on June 8, 2009 by respondent’s former counsel who allegedly did not inform respondent of the receipt of such decision until respondent went to his office on June 23, 2009 to get the files of the case. If we follow a strict construction of the ten-day rule under the 2005 Revised Rules of Procedure of the National Labor Relations Commission and consider notice to respondent’s former counsel as notice to respondent herself, the expiration of the period to file a motion for reconsideration should have been on June 18, 2009. The NLRC, however, chose a liberal application of its rules: it decided the motion on the merits. Nevertheless, it denied reconsideration.We defer to the exercise of discretion by the NLRC and uphold its judgment in applying a liberal construction of its procedural and technical rules to this case in order to ventilate and resolve the issues raised by respondent in the motion for reconsideration and fully resolve the case on the merits. It would be purely conjectural to challenge the NLRC’s exercise of such liberality for being tainted with grave abuse of discretion especially that it did not reverse, but even affirmed, its questioned decision – which sustained the ruling of the Labor Arbiter – that respondent illegally dismissed petitioner. In view of such disposition, that the NLRC gave due course to the motion in the interest of due process and to render a full resolution of the case on the merits is the more palpable explanation for the liberal application of its rules. It is significant to note that neither did petitioner ever raise the issue of the NLRC’s ruling on the merits of the subject motion for reconsideration. And the reason is clear: the motion for reconsideration was resolved in favor of petitioner. Furthermore, if the NLRC accorded credibility to the explanation proffered by respondent for its belated filing of the motion, we cannot now second-guess the NLRC’s judgment in view of the circumstances of the case and in the absence of any showing that it gravely abused its discretion.In light of the foregoing, we cannot uphold the stand of petitioner that the petition for certiorari before the CA was filed out of time, and at the same time rule that the NLRC acted in the proper exercise of its jurisdiction when it liberally applied its rules and resolved the motion for reconsideration on the merits. To so hold would nullify the latitude of discretion towards liberal construction granted to the NLRC under the 2005 Revised Rules of Procedure of the National Labor Relations Commission – including the decisions and resolutions rendered in the exercise of such discretion.Petitioner also claims that the verification in respondent’s petition for certiorari before the CA suffers from infirmity because it was based only on "personal belief and information." As it is, petitioner argues that it does not comply with Section 4,31 Rule 7 of the 1997 Rules on Civil Procedure, as amended, which requires a pleading to be verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records.32 The petition must therefore be considered as an

unsigned pleading producing no legal effect under Section 3,33 Rule 7 of the Rules and should have resulted in the outright dismissal of the petition.It is a matter of procedural consequence in the case at bar that whether we strictly or liberally apply the technical rules on the requirement of verification in pleadings, the disposition of the case will be the same. If we sustain petitioner’s stance that the petition before the CA should have been outrightly dismissed, the NLRC decision finding the dismissal of petitioner as illegal would have reached finality. On the other hand, if we adopt respondent’s view that the defect in the verification of the petition is merely a formal defect and is neither jurisdictional nor fatal, we will be sustaining the appellate court’s giving due course to the petition. However, on substantive grounds, we reverse the appellate court’s decision and reinstate the finding of illegal dismissal by the NLRC and the Labor Arbiter.The appellate court reversed both the NLRC and the Labor Arbiter in consideration of the following factors: that petitioner did not counter respondent’s receipt of the letter-complaint of PAIJR relative to his work performance; that petitioner did not refute the fact that respondent required him to submit a medical certificate; and, that petitioner failed to comply with the requirement to submit the medical certificate. Hence, when petitioner failed to submit the required medical certificate, the appellate court found it to be a valid exercise of management prerogative on the part of respondent not to give petitioner any work assignment pending its submission.We do not agree.Jurisprudence is replete with cases recognizing the right of the employer to have free reign and enjoy sufficient discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. This is a management prerogative where the free will of management to conduct its own affairs to achieve its purpose takes form.34 Even labor laws discourage interference with the exercise of such prerogative and the Court often declines to interfere in legitimate business decisions of employers.35 However, the exercise of management prerogative is not unlimited. Managerial prerogatives are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.36 Hence, in the exercise of its management prerogative, an employer must ensure that the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction.37

In the case at bar, we recognize, as did the appellate court, that respondent’s act of requiring petitioner to undergo a medical examination and submit a medical certificate is a valid exercise of management prerogative. This is further justified in view of the letter-complaint from one of respondent’s clients, PAIJR, opining that petitioner was "no longer physically fit to perform his duties and responsibilities as a company guard because of his health condition."38 To be sure, petitioner’s job as security guard naturally requires physical and mental fitness under Section 5 of Republic Act No. 5487,39 as amended by Presidential Decree No. 100.40

While the necessity to prove one’s physical and mental fitness to be a security guard could not be more emphasized, the question to be settled is whether it is a

valid exercise of respondent’s management prerogative to prevent petitioner’s continued employment with the Agency unless he presents the required medical certificate. Respondent argues, viz.:Thus, respondents in the exercise of their MANAGEMENT PREROGATIVE required Complainant to submit a Medical Certificate to prove that he is "PHYSICALLY AND MENTALLY FIT" for work as Security Guard. Unfortunately, however, up to the present time, complainant failed to submit said Medical Examination and Findings giving him clean bill of health, to respondents. Herein respondents are ready and willing to accept him as such Security Guard once he could submit said Medical Examination and Findings.The requirement anent the presentation of such MEDICAL CERTIFICATE by Complainant to Respondents is but a Management Measure of ensuring Respondents including Complainant that Complainant is physically and mentally fit for continued Employment and will not in any manner pose a danger or, threat to the respondents’ properties and lives of their customers and other employees as well as to the person and life of Complainant himself.41

It is utterly significant in the case at bar that a considerably long period has lapsed from petitioner’s last day of recorded work on September 21, 2006 until he was informed by respondent on December 22, 2006 that he was no longer an employee of the Agency. In the words of petitioner, he had been on a "floating status"42 for three months. Within this period, petitioner did not have any work assignment from respondent who proffers the excuse that he has not submitted the required medical certificate. While it is a management prerogative to require petitioner to submit a medical certificate, we hold that respondent cannot withhold petitioner’s employment without observing the principles of due process and fair play. The Labor Arbiter and the CA have conflicting findings with respect to the submission of the medical certificate.The Labor Arbiter observed that "there is no admissible proof that respondent even required petitioner to submit a medical certificate. Thus, petitioner could not be deemed to have refused or neglected to comply with this order."43 The CA countered that while there is no documentary evidence to prove it, the admission of both parties establishes that there is a pending requirement for a medical certificate and it was not complied with by petitioner. We agree with the appellate court that despite the lack of documentary evidence, both parties have admitted to respondent’s medical certificate requirement. We so hold despite petitioner’s protestations that what respondent required of him was to submit himself to a medical check-up, and not to submit a medical certificate. Even if petitioner’s allegation is to be believed, the fact remains that he did not undergo the medical check-up which he himself claims to have been required by respondent.All said, what behooves the Court is the lack of evidence on record which establishes that respondent informed petitioner that his failure to submit the required medical certificate will result in his lack of work assignment. It is a basic principle of labor protection in this jurisdiction that a worker cannot be deprived of his job without satisfying the requirements of due process.44 Labor is property and the right to make it available is next in importance to the rights of life and liberty.45 As enshrined under the Bill of Rights, no person shall be deprived of life, liberty or property without due process of law.46 The due process requirement in the deprivation of one’s employment is transcendental that it limits the exercise of the management prerogative of the employer to control and regulate the affairs of

the business. In the case at bar, all that respondent employer needed to prove was that petitioner employee was notified that his failure to submit the required medical certificate will result in his lack of work assignment – and eventually the termination of his employment – as a security guard. There is no iota of evidence in the records, save for the bare allegations of respondent, that petitioner was notified of such consequence for non-submission. In truth, the facts of the case clearly show that respondent even reassigned petitioner to Gomez Construction from his PAIJR post despite the non-submission of a medical certificate. If it was indeed the policy of respondent not to give petitioner any work assignment without the medical certificate, why was petitioner reassigned despite his noncompliance?That is not all. In addition to invoking management prerogative as a defense, respondent also alleges abandonment.1âwphi1 Respondent claims that after petitioner received his last salary from his assignment with Gomez Construction, he no longer reported for work. The assailed Decision found that petitioner indeed abandoned his work, viz.:It was only when Opinaldo refused to report for work on his assignment for Engr. Gomez after having received his salary for work rendered starting on 06 September 2006 that Ravina became firm that the medical certificate should be submitted. But, Opinaldo did not heed Ravina’s order. It was Opinaldo who altogether failed to report for work.47

We disagree.Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.48 To constitute abandonment of work, two elements must concur: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason; and, (2) there must have been a clear intention on the part of the employee to sever the employer-employee relationship manifested by some overt act.49 None of these elements is present in the case at bar. As succinctly stated by the NLRC:From respondents’ own admission in their position paper, it is clear that they prevented petitioner’s continued employment with them unless the latter presents a medical certificate that he is physically and mentally fit for work x x x.x x x xMoreover, if it was really true that complainant abandoned his work, then why have not respondents sent him a notice to report back for work? It is evident then that respondents found an excuse to decline complainant’s continued stay with them on the pretext that he has to submit first a medical certificate before he could be allowed to resume employment.50

Finally, respondent harps that she could not be held liable for illegal dismissal because, in the first place, she did not dismiss petitioner. Respondent maintains that she merely refused to give petitioner any work assignment until the submission of a medical certificate. On this issue, the CA concurred with respondent and ruled that petitioner failed to "establish the facts which would paint the picture that respondent terminated him."51

We need not reiterate that respondent did not properly exercise her management prerogative when she withheld petitioner’s employment without due process. Respondent failed to prove that she has notified petitioner that her continuous refusal to provide him any work assignment was due to his non-submission of the medical certificate. Had respondent exercised the rules of fair play, petitioner

would have had the option of complying or not complying with the medical certificate requirement – having full knowledge of the consequences of his actions. Respondent failed to do so and she cannot now hide behind the defense that there was no illegal termination because petitioner cannot show proof that he had been illegally dismissed. It is a time-honored legal principle that the employer has the onus probandi to show that the dismissal or termination was for a just and authorized cause under the Labor Code. Respondent failed to show that the termination was justified and authorized, nor was it done as a valid exercise of management prerogative. Given the circumstances in the case at bar, it is not fair to shift the burden to petitioner, and rule that he failed to prove his claim, when respondent had successfully terminated the employer-employee relationship without leaving a paper trail in a clear case o illegal dismissal.WHEREFORE, the petition for review on certiorari is GRANTED. The assailed Decision dated October 19 2010 and Resolution dated March 17 2011 o the Court o Appeals in CA-G.R. SP No. 04479 dismissing petitioner s Complaint for Illegal Dismissal are hereby REVERSED and SET ASIDE. The Decision and Resolution dated April24, 2009 and June 30, 2009, respectively, o the NLRC in NLRC Case No. VAC 01-000081-2009 (RAB Case No. Vll-01-0208-2007) requiring respondent Narcisa Ravina and/or St. Louisse Security Agency to pay petitioner Victorino Opinaldo the total amount o P82,340 consisting o P22,500 in separation pay and P59,840 in full back wages, are hereby REINSTATED and UPHELD.No costs.SO ORDERED.

G.R. No. 170054               January 21, 2013GOYA, INC., Petitioner, vs.GOYA, INC. EMPLOYEES UNION-FFW, Respondent.D E C I S I O NPERALTA, J.:

This petition for review on certiorari under Rule 45 of the Rules of Civil Procedure seeks to reverse and set aside the June 16, 2005 Decision1 and October 12, 2005 Resolution2 of the Court of Appeals in CA-G.R. SP No. 87335, which sustained the October 26, 2004 Decision3 of Voluntary Arbitrator Bienvenido E. Laguesma, the dispositive portion of which reads:WHEREFORE, judgment is hereby rendered declaring that the Company is NOT guilty of unfair labor practice in engaging the services of PESO.The company is, however, directed to observe and comply with its commitment as it pertains to the hiring of casual employees when necessitated by business circumstances.4The facts are simple and appear to be undisputed.Sometime in January 2004, petitioner Goya, Inc. (Company), a domestic corporation engaged in the manufacture, importation, and wholesale of top quality food products, hired contractual employees from PESO Resources Development Corporation (PESO) to perform temporary and occasional services in its factory in Parang, Marikina City. This prompted respondent Goya, Inc. Employees Union–FFW (Union) to request for a grievance conference on the ground that the contractual workers do not belong to the categories of employees stipulated in the existing Collective Bargaining Agreement (CBA).5 When the matter remained unresolved, the grievance was referred to the National Conciliation and Mediation Board (NCMB) for voluntary arbitration.During the hearing on July 1, 2004, the Company and the Union manifested before Voluntary Arbitrator (VA) Bienvenido E. Laguesma that amicable settlement was no longer possible; hence, they agreed to submit for resolution the solitary issue of "[w]hether or not the Company is guilty of unfair labor acts in engaging the services of PESO, a third party service provider, under the existing CBA, laws, and jurisprudence."6 Both parties thereafter filed their respective pleadings.The Union asserted that the hiring of contractual employees from PESO is not a management prerogative and in gross violation of the CBA tantamount to unfair labor practice (ULP). It noted that the contractual workers engaged have been assigned to work in positions previously handled by regular workers and Union members, in effect violating Section 4, Article I of the CBA, which provides for three categories of employees in the Company, to wit:Section 4. Categories of Employees.– The parties agree on the following categories of employees:(a) Probationary Employee. – One hired to occupy a regular rank-and-file position in the Company and is serving a probationary period. If the probationary employee is hired or comes from outside the Company (non-Goya, Inc. employee), he shall be required to undergo a probationary period of six (6) months, which period, in the sole judgment of management, may be shortened if the employee has already acquired the knowledge or skills required of the job. If the employee is hired from the casual pool and has worked in the same position at any time during the past two (2) years, the probationary period shall be three (3) months.(b) Regular Employee. – An employee who has satisfactorily completed his probationary period and automatically granted regular employment status in the Company.(c) Casual Employee, – One hired by the Company to perform occasional or seasonal work directly connected with the regular operations of the Company, or one hired for specific projects of limited duration not connected directly with the regular operations of the Company.It was averred that the categories of employees had been a part of the CBA since the 1970s and that due to this provision, a pool of casual employees had been maintained by the Company from which it hired workers who then became regular workers when urgently necessary to employ them for more than a year. Likewise, the Company sometimes hired probationary employees who also later became regular workers after passing the probationary period. With the hiring of contractual employees, the Union contended that it would no longer have probationary and casual employees from which it could obtain

additional Union members; thus, rendering inutile Section 1, Article III (Union Security) of the CBA, which states:Section 1. Condition of Employment. – As a condition of continued employment in the Company, all regular rank-and-file employees shall remain members of the Union in good standing and that new employees covered by the appropriate bargaining unit shall automatically become regular employees of the Company and shall remain members of the Union in good standing as a condition of continued employment.The Union moreover advanced that sustaining the Company’s position would easily weaken and ultimately destroy the former with the latter’s resort to retrenchment and/or retirement of employees and not filling up the vacant regular positions through the hiring of contractual workers from PESO, and that a possible scenario could also be created by the Company wherein it could "import" workers from PESO during an actual strike.In countering the Union’s allegations, the Company argued that: (a) the law expressly allows contracting and subcontracting arrangements through Department of Labor and Employment (DOLE) Order No. 18-02; (b) the engagement of contractual employees did not, in any way, prejudice the Union, since not a single employee was terminated and neither did it result in a reduction of working hours nor a reduction or splitting of the bargaining unit; and (c) Section 4, Article I of the CBA merely provides for the definition of the categories of employees and does not put a limitation on the Company’s right to engage the services of job contractors or its management prerogative to address temporary/occasional needs in its operation.On October 26, 2004, VA Laguesma dismissed the Union’s charge of ULP for being purely speculative and for lacking in factual basis, but the Company was directed to observe and comply with its commitment under the CBA. The VA opined:We examined the CBA provision Section 4, Article I of the CBAallegedly violated by the Company and indeed the agreement prescribes three (3) categories of employees in the Company and provides for the definition, functions and duties of each. Material to the case at hand is the definition as regards the functions of a casual employee described as follows:Casual Employee – One hired by the COMPANY to perform occasional or seasonal work directly connected with the regular operations of the COMPANY, or one hired for specific projects of limited duration not connected directly with the regular operations of the COMPANY.While the foregoing agreement between the parties did eliminate management’s prerogative of outsourcing parts of its operations, it serves as a limitation on such prerogative particularly if it involves functions or duties specified under the aforequoted agreement. It is clear that the parties agreed that in the event that the Company needs to engage the services of additional workers who will perform "occasional or seasonal work directly connected with the regular operations of the COMPANY," or "specific projects of limited duration not connected directly with the regular operations of the COMPANY", the Company can hire casual employees which is akin to contractual employees. If we note the Company’s own declaration that PESO was engaged to perform "temporary or occasional services" (See the Company’s Position Paper, at p. 1), then it should have directly hired the services of casual employees rather than do it through PESO.It is evident, therefore, that the engagement of PESO is not in keeping with the intent and spirit of the CBA provision in question. It must, however, be stressed that the right of management to outsource parts of its operations is not totally eliminated but is merely limited by the CBA. Given the foregoing, the Company’s engagement of PESO for the given purpose is indubitably a violation of the CBA.7While the Union moved for partial reconsideration of the VA Decision,8 the Company immediately filed a petition for review9 before the Court of Appeals (CA) under Rule 43 of the Revised Rules of Civil Procedure to set aside the directive to observe and comply with the CBA commitment pertaining to the hiring of casual employees when necessitated by business circumstances. Professing that such order was not covered by the sole issue submitted for voluntary arbitration, the Company assigned the following errors:

THE HONORABLE VOLUNTARY ARBITRATOR EXCEEDED HIS POWER WHICH WAS EXPRESSLY GRANTED AND LIMITED BY BOTH PARTIES IN RULING THAT THE ENGAGEMENT OF PESO IS NOT IN KEEPING WITH THE INTENT AND SPIRIT OF THE CBA.10THE HONORABLE VOLUNTARY ARBITRATOR COMMITTED A PATENT AND PALPABLE ERROR IN DECLARING THAT THE ENGAGEMENT OF PESO IS NOT IN KEEPING WITH THE INTENT AND SPIRIT OF THE CBA.11On June 16, 2005, the CA dismissed the petition. In dispensing with the merits of the controversy, it held:This Court does not find it arbitrary on the part of the Hon. Voluntary Arbitrator in ruling that "the engagement of PESO is not in keeping with the intent and spirit of the CBA." The said ruling is interrelated and intertwined with the sole issue to be resolved that is, "Whether or not the Company is guilty of unfair labor practice in engaging the services of PESO, a third party service provider, under existing CBA, laws, and jurisprudence." Both issues concern the engagement of PESO by the Company which is perceived as a violation of the CBA and which constitutes as unfair labor practice on the part of the Company. This is easily discernible in the decision of the Hon. Voluntary Arbitrator when it held:x x x x While the engagement of PESO is in violation of Section 4, Article I of the CBA, it does not constitute unfair labor practice as it (sic) not characterized under the law as a gross violation of the CBA. Violations of a CBA, except those which are gross in character, shall no longer be treated as unfair labor practice. Gross violations of a CBA means flagrant and/or malicious refusal to comply with the economic provisions of such agreement. x x xAnent the second assigned error, the Company contends that the Hon. Voluntary Arbitrator erred in declaring that the engagement of PESO is not in keeping with the intent and spirit of the CBA. The Company justified its engagement of contractual employees through PESO as a management prerogative, which is not prohibited by law. Also, it further alleged that no provision under the CBA limits or prohibits its right to contract out certain services in the exercise of management prerogatives.Germane to the resolution of the above issue is the provision in their CBA with respect to the categories of the employees:x x x xA careful reading of the above-enumerated categories of employees reveals that the PESO contractual employees do not fall within the enumerated categories of employees stated in the CBA of the parties. Following the said categories, the Company should have observed and complied with the provision of their CBA. Since the Company had admitted that it engaged the services of PESO to perform temporary or occasional services which is akin to those performed by casual employees, the Company should have tapped the services of casual employees instead of engaging PESO.In justifying its act, the Company posits that its engagement of PESO was a management prerogative. It bears stressing that a management prerogative refers to the right of the employer to regulate all aspects of employment, such as the freedom to prescribe work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work, lay-off and discipline, and dismissal and recall of work, presupposing the existence of employer-employee relationship. On the basis of the foregoing definition, the Company’s engagement of PESO was indeed a management prerogative. This is in consonance with the pronouncement of the Supreme Court in the case of Manila Electric Company vs. Quisumbing where it ruled that contracting out of services is an exercise of business judgment or management prerogative.This management prerogative of contracting out services, however, is not without limitation. In contracting out services, the management must be motivated by good faith and the contracting out should not be resorted to circumvent the law or must not have been the result of malicious arbitrary actions. In the case at bench, the CBA of the parties has already provided for the categories of the employees in the Company’sestablishment. These categories of employees particularly with respect to casual employees serve as

limitation to the Company’s prerogative to outsource parts of its operations especially when hiring contractual employees. As stated earlier, the work to be performed by PESO was similar to that of the casual employees. With the provision on casual employees, the hiring of PESO contractual employees, therefore, is not in keeping with the spirit and intent of their CBA. (Citations omitted)12The Company moved to reconsider the CA Decision,13 but it was denied;14 hence, this petition.Incidentally, on July 16, 2009, the Company filed a Manifestation15 informing this Court that its stockholders and directors unanimously voted to shorten the Company’s corporate existence only until June 30, 2006, and that the three-year period allowed by law for liquidation of the Company’s affairs already expired on June 30, 2009. Referring to Gelano v. Court of Appeals,16 Public Interest Center, Inc. v. Elma,17 and Atienza v. Villarosa,18 it urged Us, however, to still resolve the case for future guidance of the bench and the bar as the issue raised herein allegedly calls for a clarification of a legal principle, specifically, whether the VA is empowered to rule on a matter not covered by the issue submitted for arbitration.Even if this Court would brush aside technicality by ignoring the supervening event that renders this case moot and academic19 due to the permanent cessation of the Company’s business operation on June 30, 2009, the arguments raised in this petition still fail to convince Us.We confirm that the VA ruled on a matter that is covered by the sole issue submitted for voluntary arbitration. Resultantly, the CA did not commit serious error when it sustained the ruling that the hiring of contractual employees from PESO was not in keeping with the intent and spirit of the CBA. Indeed, the opinion of the VA is germane to, or, in the words of the CA, "interrelated and intertwined with," the sole issue submitted for resolution by the parties. This being said, the Company’s invocation of Sections 4 and 5, Rule IV20 and Section 5, Rule VI21of the Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings dated October 15, 2004 issued by the NCMB is plainly out of order.Likewise, the Company cannot find solace in its cited case of Ludo & Luym Corporation v. Saornido.22 In Ludo, the company was engaged in the manufacture of coconut oil, corn starch, glucose and related products. In the course of its business operations, it engaged the arrastre services of CLAS for the loading and unloading of its finished products at the wharf. The arrastre workers deployed by CLAS to perform the services needed were subsequently hired, on different dates, as Ludo’s regular rank-and-file employees. Thereafter, said employees joined LEU, which acted as the exclusive bargaining agent of the rank-and-file employees. When LEU entered into a CBA with Ludo, providing for certain benefits to the employees (the amount of which vary according to the length of service rendered), it requested to include in its members’ period of service the time during which they rendered arrastre services so that they could get higher benefits. The matter was submitted for voluntary arbitration when Ludo failed to act. Per submission agreement executed by both parties, the sole issue for resolution was the date of regularization of the workers. The VA Decision ruled that: (1) the subject employees were engaged in activities necessary and desirable to the business of Ludo, and (2) CLAS is a labor-only contractor of Ludo. It then disposed as follows: (a) the complainants were considered regular employees six months from the first day of service at CLAS; (b) the complainants, being entitled to the CBA benefits during the regular employment, were awarded sick leave, vacation leave, and annual wage and salary increases during such period; (c) respondents shall pay attorney’s fees of 10% of the total award; and (d) an interest of 12% per annum or 1% per month shall be imposed on the award from the date of promulgation until fully paid. The VA added that all separation and/or retirement benefits shall be construed from the date of regularization subject only to the appropriate government laws and other social legislation. Ludo filed a motion for reconsideration, but the VA denied it. On appeal, the CA affirmed in toto the assailed decision; hence, a petition was brought before this Court

raising the issue, among others, of whether a voluntary arbitrator can award benefits not claimed in the submission agreement. In denying the petition, We ruled:Generally, the arbitrator is expected to decide only those questions expressly delineated by the submission agreement. Nevertheless, the arbitrator can assume that he has the necessary power to make a final settlement since arbitration is the final resort for the adjudication of disputes. The succinct reasoning enunciated by the CA in support of its holding, that the Voluntary Arbitrator in a labor controversy has jurisdiction to render the questioned arbitral awards, deserves our concurrence, thus:In general, the arbitrator is expected to decide those questions expressly stated and limited in the submission agreement. However, since arbitration is the final resort for the adjudication of disputes, the arbitrator can assume that he has the power to make a final settlement. Thus, assuming that the submission empowers the arbitrator to decide whether an employee was discharged for just cause, the arbitrator in this instance can reasonably assume that his powers extended beyond giving a yes-or-no answer and included the power to reinstate him with or without back pay.In one case, the Supreme Court stressed that "xxx the Voluntary Arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. The Arbitrator, as already indicated, viewed his authority as embracing not merely the determination of the abstract question of whether or not a performance bonus was to be granted but also, in the affirmative case, the amount thereof.By the same token, the issue of regularization should be viewed as two-tiered issue. While the submission agreement mentioned only the determination of the date or regularization, law and jurisprudence give the voluntary arbitrator enough leeway of authority as well as adequate prerogative to accomplish the reason for which the law on voluntary arbitration was created – speedy labor justice. It bears stressing that the underlying reason why this case arose is to settle, once and for all, the ultimate question of whether respondent employees are entitled to higher benefits. To require them to file another action for payment of such benefits would certainly undermine labor proceedings and contravene the constitutional mandate providing full protection to labor.23Indubitably, Ludo fortifies, not diminishes, the soundness of the questioned VA Decision. Said case reaffirms the plenary jurisdiction and authority of the voluntary arbitrator to interpret the CBA and to determine the scope of his/her own authority. Subject to judicial review, the leeway of authority as well as adequate prerogative is aimed at accomplishing the rationale of the law on voluntary arbitration – speedy labor justice. In this case, a complete and final adjudication of the dispute between the parties necessarily called for the resolution of the related and incidental issue of whether the Company still violated the CBA but without being guilty of ULP as, needless to state, ULP is committed only if there is gross violation of the agreement.Lastly, the Company kept on harping that both the VA and the CA conceded that its engagement of contractual workers from PESO was a valid exercise of management prerogative. It is confused. To emphasize, declaring that a particular act falls within the concept of management prerogative is significantly different from acknowledging that such act is a valid exercise thereof. What the VA and the CA correctly ruled was that the Company’s act of contracting out/outsourcing is within the purview of management prerogative. Both did not say, however, that such act is a valid exercise thereof. Obviously, this is due to the recognition that the CBA provisions agreed upon by the Company and the Union delimit the free exercise of management prerogative pertaining to the hiring of contractual employees. Indeed, the VA opined that "the right of the management to outsource parts of its operations is not totally eliminated but is merely limited by the CBA," while the CA held that "this management prerogative of contracting out services, however, is not without limitation. x x x These categories of employees particularly with respect to casual employees serve as limitation to the Company’s prerogative to outsource parts of its operations especially when hiring contractual employees."A collective bargaining agreement is the law between the parties:

It is familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged to comply with its provisions. We said so in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda:A collective bargaining agreement or CBA refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit.1âwphi1 As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law.Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of their stipulations shall control. x x x.24In this case, Section 4, Article I (on categories of employees) of the CBA between the Company and the Union must be read in conjunction with its Section 1, Article III (on union security). Both are interconnected and must be given full force and effect. Also, these provisions are clear and unambiguous. The terms are explicit and the language of the CBA is not susceptible to any other interpretation. Hence, the literal meaning should prevail. As repeatedly held, the exercise of management prerogative is not unlimited; it is subject to the limitations found in law, collective bargaining agreement or the general principles of fair play and justice25 Evidently, this case has one of the restrictions- the presence of specific CBA provisions-unlike in San Miguel Corporation Employees Union-PTGWO v. Bersamira,26 De Ocampo v. NLRC,27 Asian Alcohol Corporation v. NLRC,28 and Serrano v. NLRC29cited by the Company. To reiterate, the CBA is the norm of conduct between the parties and compliance therewith is mandated by the express policy of the law.30WHEREFORE, the petition is DENIED. The assailed June 16, 2005 Decision, as well as the October 12, 2005 Resolution of the Court of Appeals, which sustained the October 26, 2004 Decision of the Voluntary Arbitrator, are hereby AFFIRMED.SO ORDERED.

G.R. No. 171664               March 6, 2013BANKARD, INC., Petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION- FIRST DIVISION, PAULO BUENCONSEJO,BANKARD EMPLOYEES UNION-AWATU, Respondents.

D E C I S I O NMENDOZA, J.:This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to review, reverse and set aside the October 20, 2005 Decision1 and the February 21, 2006 Resolution2 of the Court of Appeals {CA), in CA-G.R. SP No. 68303, which affirmed the May 31, 2001 Resolution3 and the September 24, 2001 Order4 of the National Labor Relations Commission (NLRC) in Certified Cases No. 000-185-00 and 000-191-00.The FactsOn June 26, 2000, respondent Bankard Employees Union-AWATU (Union) filed before the National Conciliation and Mediation Board (NCMB) its first Notice of Strike (NOS), docketed as NS-06-225-00,5 alleging commission of unfair labor practices by petitioner Bankard, Inc. (Bankard), to wit: 1) job contractualization; 2) outsourcing/contracting-out jobs; 3) manpower rationalizing program; and 4) discrimination.On July 3, 2000, the initial conference was held where the Union clarified the issues cited in the NOS. On July 5, 2000, the Union held its strike vote balloting where the members voted in favor of a strike. On July 10, 2000, Bankard asked the Office of the Secretary of Labor to assume jurisdiction over the labor dispute or to certify the same to the NLRC for compulsory arbitration. On July 12, 2000, Secretary Bienvenido Laguesma (Labor Secretary) of the Department of Labor and Employment (DOLE) issued the order certifying the labor dispute to the NLRC.6

On July 25, 2000, the Union declared a CBA bargaining deadlock. The following day, the Union filed its second NOS, docketed as NS-07-265-00,7 alleging bargaining in bad faith on the part of Bankard. Bankard then again asked the Office of the Secretary of Labor to assume jurisdiction, which was granted. Thus, the Order, dated August 9, 2000, certifying the labor dispute to the NLRC, was issued.8

The Union, despite the two certification orders issued by the Labor Secretary enjoining them from conducting a strike or lockout and from committing any act that would exacerbate the situation, went on strike on August 11, 2000.9

During the conciliatory conferences, the parties failed to amicably settle their dispute. Consequently, they were asked to submit their respective position papers. Both agreed to the following issues:

1. Whether job contractualization or outsourcing or contracting-out is an unfair labor practice on the part of the management.2. Whether there was bad faith on the part of the management when it bargained with the Union.10

As regards the first issue, it was Bankard’s position that job contractualization or outsourcing or contracting-out of jobs was a legitimate exercise of management prerogative and did not constitute unfair labor practice. It had to implement new policies and programs, one of which was the Manpower Rationalization Program (MRP) in December 1999, to further enhance its efficiency and be more competitive in the credit card industry. The MRP was an invitation to the employees to tender their voluntary resignation, with entitlement to separation pay equivalent to at least two (2) months salary for every year of service. Those eligible under the company’s retirement plan would still receive additional pay. Thereafter, majority of the Phone Center and the Service Fulfilment Division availed of the MRP. Thus, Bankard contracted an independent agency to handle its call center needs.11

As to the second issue, Bankard denied that there was bad faith on its part in bargaining with the Union. It came up with counter-offers to the Union’s proposals, but the latter’s demands were far beyond what management could give. Nonetheless, Bankard continued to negotiate in good faith until the Memorandum of Agreement (MOA) re-negotiating the provisions of the 1997-2002, Collective Bargaining Agreement (CBA) was entered into between Bankard and the Union. The CBA was overwhelmingly ratified by the Union members. For said reason, Bankard contended that the issue of bad faith in bargaining had become moot and academic.12

On the other hand, the Union alleged that contractualization started in Bankard in 1995 in the Records Communications Management Division, particularly in the mailing unit, which was composed of two (2) employees and fourteen (14) messengers. They were hired as contractual workers to perform the functions of the regular employees who had earlier resigned and availed of the MRP.13 According to the Union, there were other departments in Bankard utilizing messengers to perform work load considered for regular employees, like the Marketing Department, Voice Authorizational Department, Computer Services Department, and Records

Retention Department. The Union contended that the number of regular employees had been reduced substantially through the management scheme of freeze-hiring policy on positions vacated by regular employees on the basis of cost-cutting measures and the introduction of a more drastic formula of streamlining its regular employees through the MRP.14

With regard to the second issue, the Union averred that Bankard’s proposals were way below their demands, showing that the management had no intention of reaching an agreement. It was a scheme calculated to force the Union to declare a bargaining deadlock.15

On May 31, 2001, the NLRC issued its Resolution16 declaring that the management committed acts considered as unfair labor practice (ULP) under Article 248(c) of the Labor Code. It ruled that:The act of management of reducing its number of employees thru application of the Manpower Rationalization Program and subsequently contracting the same to other contractual employees defeats the purpose or reason for streamlining the employees. The ultimate effect is to reduce the number of union members and increasing the number of contractual employees who could never be members of the union for lack of qualification. Consequently, the union was effectively restrained in their movements as a union on their rights to self-organization. Management had successfully limited and prevented the growth of the Union and the acts are clear violation of the provisions of the Labor Code and could be considered as Unfair Labor Practice in the light of the provisions of Article 248 paragraph (c) of the Labor Code.17

The NLRC, however, agreed with Bankard that the issue of bargaining in bad faith was rendered moot and academic by virtue of the finalization and signing of the CBA between the management and the Union.18

Unsatisfied, both parties filed their respective motions for partial reconsideration.1âwphi1 Bankard assailed the NLRC's finding of acts of ULP on its part. The Union, on the other hand, assailed the NLRC ruling on the issue of bad faith bargaining.On September 24, 2001, the NLRC issued the Order19 denying both parties' motions for lack of merit.On December 28, 2001, Bankard filed a petition for certiorari under Rule 65 with the CA arguing that the NLRC gravely abused its discretion amounting to lack or excess of jurisdiction when:

1. It issued the Resolution, dated May 31, 2001, particularly in finding that Bankard committed acts of unfair labor practice; and,2. It issued the Order dated September 24, 2001 denying Bankard's partial motion for reconsideration.20

The Union filed two (2) comments, dated January 22, 2002, through its NCR Director, Cornelio Santiago, and another, dated February 6, 2002, through its President, Paulo Buenconsejo, both praying for the dismissal of the petition and insisting that Bankard's resort to contractualization or outsourcing of contracts constituted ULP. It further alleged that Bankard committed ULP when it conducted CBA negotiations in bad faith with the Union.Ruling of the Court of AppealsThe CA dismissed the petition, finding that the NLRC ruling was supported by substantial evidence.The CA agreed with Bankard that job contracting, outsourcing and/or contracting out of jobs did not per se constitute ULP, especially when made in good faith and for valid purposes. Despite Bankard's claim of good faith in resorting to job contractualization for purposes of cost-efficient operations and its non-interference with the employees' right to self-organization, the CA agreed with the NLRC that Bankard's acts impaired the employees right to self-organization and should be struck down as illegal and invalid pursuant to Article 248(c)21 of the Labor Code. The CA thus, ruled in this wise:We cannot agree more with public respondent. Incontrovertible is the fact that petitioner's acts, particularly its promotion of the program enticing employees to tender their voluntary resignation in exchange for financial packages, resulted to a union dramatically reduced in numbers. Coupled with the management's policy of "freeze-hiring" of regular employees and contracting out jobs to contractual workers, petitioner was able to limit and prevent the growth of the Union, an act that clearly constituted unfair labor practice.22

In its assailed decision, the CA affirmed the May 31, 2001 Resolution and the September 24, 2001 Order of the NLRC.

Aggrieved, Bankard filed a motion for reconsideration. The CA subsequently denied it for being a mere repetition of the grounds previously raised. Hence, the present petition bringing up this lone issue:THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER BANKARD, INC. COMMITTED ACTS OF UNFAIR LABOR PRACTICE WHEN IT DISMISSED THE PETITION FOR CERTIORARI AND DENIED THE MOTION FOR RECONSIDERATION FILED BY PETITIONER.23

Ruling of the CourtThe Court finds merit in the petition.Well-settled is the rule that "factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence."24 Furthermore, the factual findings of the NLRC, when affirmed by the CA, are generally conclusive on this Court.25 When the petitioner, however, persuasively alleges that there is insufficient or insubstantial evidence on record to support the factual findings of the tribunal or court a quo, then the Court, exceptionally, may review factual issues raised in a petition under Rule 45 in the exercise of its discretionary appellate jurisdiction.26

This case involves determination of whether or not Bankard committed acts considered as ULP. The underlying concept of ULP is found in Article 247 of the Labor Code, to wit:Article 247. Concept of unfair labor practice and procedure for prosecution thereof. -- Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. x x xThe Court has ruled that the prohibited acts considered as ULP relate to the workers’ right to self-organization and to the observance of a CBA. It refers to "acts that violate the workers’ right to organize."27 Without that element, the acts, even if unfair, are not ULP.28 Thus, an employer may only be held liable for unfair labor practice if it can be shown that his acts affect in whatever manner the right of his employees to self-organize.29

In this case, the Union claims that Bankard, in implementing its MRP which eventually reduced the number of employees, clearly violated Article 248(c) of the Labor Code which states that:Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the following unfair labor practice:x x x x(c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;x x x xBecause of said reduction, Bankard subsequently contracted out the jobs held by former employees to other contractual employees. The Union specifically alleges that there were other departments in Bankard, Inc. which utilized messengers to perform work load considered for regular employees like the Marketing Department, Voice Authorizational Department, Computer Services Department, and Records Retention Department.30 As a result, the number of union members was reduced, and the number of contractual employees, who were never eligible for union membership for lack of qualification, increased.The general principle is that the one who makes an allegation has the burden of proving it.1avvphi1 While there are exceptions to this general rule, in ULP cases, the alleging party has the burden of proving the ULP;31 and in order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim.32 Such principle finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions.33

Aside from the bare allegations of the Union, nothing in the records strongly proves that Bankard intended its program, the MRP, as a tool to drastically and deliberately reduce union membership. Contrary to the findings and conclusions of both the NLRC and the CA, there was no proof that the program was meant to encourage the employees to disassociate themselves from the Union or to restrain them from joining any union or organization. There was no showing that it was intentionally implemented to stunt the growth of the Union or that Bankard discriminated, or in any way singled out the union members who had availed of the retirement package under the MRP. True, the program might have affected the number of union

membership because of the employees’ voluntary resignation and availment of the package, but it does not necessarily follow that Bankard indeed purposely sought such result. It must be recalled that the MRP was implemented as a valid cost-cutting measure, well within the ambit of the so-called management prerogatives. Bankard contracted an independent agency to meet business exigencies. In the absence of any showing that Bankard was motivated by ill will, bad faith or malice, or that it was aimed at interfering with its employees’ right to self-organize, it cannot be said to have committed an act of unfair labor practice.34

"Substantial evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise."35 Unfortunately, the Union, which had the burden of adducing substantial evidence to support its allegations of ULP, failed to discharge such burden.36

The employer’s right to conduct the affairs of its business, according to its own discretion and judgment, is well-recognized.37 Management has a wide latitude to conduct its own affairs in accordance with the necessities of its business.38 As the Court once said:The Court has always respected a company's exercise of its prerogative to devise means to improve its operations. Thus, we have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of employees, working methods, time, place and manner of work.This is so because the law on unfair labor practices is not intended to deprive employers of their fundamental right to prescribe and enforce such rules as they honestly believe to be necessary to the proper, productive and profitable operation of their business.39

Contracting out of services is an exercise of business judgment or management prerogative. Absent any proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.40Furthermore, bear in mind that ULP is punishable with both civil and/or criminal sanctions.41 As such, the party so alleging must necessarily prove it by substantial evidence. The Union, as earlier noted, failed to do this. Bankard merely validly exercised its management prerogative. Not shown to have acted maliciously or arbitrarily, no act of ULP can be imputed against it.WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 68303, dated October 20, 2005, and its Resolution, dated February 21, 2006, are REVERSED and SET ASIDE. Petitioner Bankard, Inc. is hereby declared as not having committed any act constituting Unfair Labor Practice under Article 248 of the Labor Code.SO ORDERED.

G.R. No. 198534               July 3, 2013JENNY F. PECKSON, Petitioner, vs.

ROBINSONS SUPERMARKET CORPORATION, JODY GADIA, ROENA SARTE, and RUBY ALEX, Respondents.D E C I S I O NREYES, J.:For resolution is the Petition for Review on Certiorari1 of the Decision2 dated June 8, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 109604 affirming the Decision3 dated February 25, 2009 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. 00-11-09316-06/NLRC LAC No. 002020-07, which upheld the Dismissal4 by the Labor Arbiter (LA) on May 30, 2007 of Jenny F. Peckson's (petitioner) complaint for constructive dismissal.Antecedent Facts and ProceedingsThe petitioner first joined the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on November 3, 1987. On October 26, 2006, she was holding the position of Category Buyer when respondent Roena Sarte (Sarte), RSC’s Assistant Vice-President for Merchandising, reassigned her to the position of Provincial Coordinator, effective November 1, 2006. Claiming that her new assignment was a demotion because it was non-supervisory and clerical in nature, the petitioner refused to turn over her responsibilities to the new Category Buyer, or to accept her new responsibilities as Provincial Coordinator. Jody Gadia (Gadia) and Ruby Alex (Alex) were impleaded because they were corporate officers of the RSC.In a memorandum to the petitioner dated November 13, 2006,6 the RSC, through Sarte, demanded an explanation from her within 48 hours for her refusal to accept her new assignment despite written and verbal demands. Sarte cited a company rule, Offenses Subject to Disciplinary Action No. 4.07, which provided that "[d]isobedience, refusal or failure to do assigned task or to obey superior’s/official’s orders/instructions, or to follow established procedures or practices without valid reason" would be meted the penalty of suspension.The petitioner ignored the 48-hour deadline to explain imposed by Sarte. On November 23, 2006, Sarte issued her another memorandum,7 reiterating her demand to explain in writing within 48 hours why she persistently refused to assume her new position, and warning her that this could be her final chance to present her side or be deemed to have waived her right to be heard.In her one-paragraph reply submitted on November 27, 2006,8 the petitioner stated that she could not accept the position of Provincial Coordinator since she saw it as a demotion. As it turned out, however, on November 9, 2006, the petitioner had already filed a complaint for constructive dismissal9 against RSC, Sarte, Gadia and Alex (respondents).On November 30, 2006, Sarte issued an instruction to the petitioner to report to RSC’s Metroeast Depot to help prepare all shipping manifests for Cagayan de Oro and Bacolod, but as witnessed by RSC employees Raquel Torrechua and Alex, she did not obey as instructed.10 Again on December 8, 2006, Sarte issued a similar instruction, citing the need for certain tasks from the petitioner in preparation for the coming Christmas holidays, but the petitioner again refused to heed.11

As culled from the assailed appellate court decision,12 the petitioner argued before the LA that the true organizational chart of the RSC showed that the position of Category Buyer was one level above that of the Provincial Coordinator, and that moreover, the job description of a Provincial Coordinator was largely clerical and did not require her to analyze stock levels and order points, or source new local and international suppliers, or monitor stock level per store and recommend items for replenishment, or negotiate better items and discounts from suppliers, duties which only a Category Buyer could perform. She also claimed that she was instructed to file a courtesy resignation in exchange for a separation pay of one-half salary per year of service.The respondents in their position paper denied the correctness of the organizational chart presented by the petitioner. They maintained that her transfer was not a demotion since the Provincial Coordinator occupied a "Level 5" position like the Category Buyer, with the same work conditions, salary and benefits. But while both positions had no significant

disparity in the required skill, experience and aptitude, the position of Category Buyer demanded the traits of punctuality, diligence and attentiveness because it is a frontline position in the day-to-day business operations of RSC which the petitioner, unfortunately, did not possess.The respondents also raised the petitioner’s record of habitual tardiness as far back as 1999, as well as poor performance rating in 2005. In addition to her performance rating of "2.8" out of "4.0" in 2005 equivalent to "below expectation," the petitioner was found to be tardy in June and July 2005, 13 times, and for the entire 2005, 57 times; that she was suspended twice in 2006 for 20 instances of tardiness and absences from July to September 2006 alone.13 We also note that the petitioner was suspended for seven (7) days in September and October 2005 for deliberately violating a company policy after she was seen having lunch with a company supplier.14

In her affidavit,15 respondent Sarte denied that the reassignment of the petitioner as Provincial Coordinator was motivated by a desire to besmirch the name of the latter. She asserted that it was made in the exercise of management prerogative and sound discretion, in view of the nsitive position occupied by the Category Buyer in RSC’s daily operations, vis-à-vis the petitioner’s "below expectation" performance rating and habitual tardiness.In dismissing the petitioner’s complaint, the LA in its Decision16 dated May 30, 2007 ruled that job reassignment or classification is a strict prerogative of the employer, and that the petitioner cannot refuse her transfer from Category Buyer to Provincial Coordinator since both positions commanded the same salary structure, high degree of responsibility and impeccable honesty and integrity. Upholding the employer’s right not to retain an employee in a particular position to prevent losses or to promote profitability, the LA found no showing of any illegal motive on the part of the respondents in reassigning the petitioner. The transfer was dictated by the need for punctuality, diligence and attentiveness in the position of Category Buyer, which the petitioner clearly lacked. Moreover, the LA ruled that her persistent refusal to accept her new position amounted to insubordination, entitling the RSC to dismiss her from employment.A month after the above ruling, or on June 22, 2007, the petitioner tendered her written "forced" resignation,17wherein she complained that she was being subjected to ridicule by clients and co-employees alike on account of her floating status since the time she refused to accept her transfer. She likewise claimed that she was being compelled to accept the position of Provincial Coordinator without due process.On appeal, the NLRC in its Decision18 dated February 25, 2009 sustained the findings of the LA. It agreed that the lateral transfer of the petitioner from Category Buyer to Provincial Coordinator was not a demotion amounting to constructive dismissal, since both positions belonged to Job Level 5 and between them there is no significant disparity in terms of the requirements of skill, experience and aptitude. Contrary to the petitioner’s assertion, the NLRC found that the position of Provincial Coordinator is not a rank-and-file position but in fact requires the exercise of discretion and independent judgment, as well as appropriate recommendations to management to ensure the faithful implementation of its policies and programs; that it even exercises influence over the Category Buyer in that it includes performing a recommendatory function to guide the Category Buyer in making decisions on the right assortment, price and quantity of the items, articles or merchandise to be sold by the store.The NLRC then reiterated the settled rule that management may transfer an employee from one office to another within the business establishment, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination or bad faith or effected as a form of punishment without sufficient cause. It ruled that the respondents were able to show that the petitioner’s transfer was not unreasonable, inconvenient or prejudicial, but was prompted by her failure to meet the demands of punctuality, diligence, and personal attention of the position of Category Buyer; that management wanted to give the petitioner a chance to improve her work ethic, but her obstinate refusal to assume her new position has prejudiced

respondent RSC, even while she continued to receive her salaries and benefits as Provincial Coordinator.On petition for certiorari to the CA, the petitioner insisted that her transfer from Category Buyer to Provincial Coordinator was a form of demotion without due process, and that the respondents unjustifiably depicted her as remiss in her duties, flawed in her character, and unduly obstinate in her refusal to accept her new post.In its Decision19 dated June 8, 2011, the CA found no basis to deviate from the oft-repeated tenet that the findings of fact and conclusions of the NLRC when supported by substantial evidence are generally accorded not only great weight and respect but even finality, and are thus deemed binding.20

Petition for Review in the Supreme CourtNow on petition for review to this Court, the petitioner maintains that her lateral transfer from Category Buyer to Provincial Coordinator was a demotion amounting to constructive dismissal because her reassignment was not a valid exercise of management prerogative, but was done in bad faith and without due process. She claims that the respondents manipulated the facts to show that she was tardy; that they even surreptitiously drew up a new organizational chart of the Merchandising Department of RSC, soon after she filed her complaint for illegal dismissal, to show that the position of Provincial Coordinator belonged to Job Level 5 as the Category Buyer, and not one level below; that the company deliberately embarrassed her when it cut off her email access; that they sent memoranda to her clients that she was no longer a Category Buyer, and to the various Robinsons branches that she was now a Provincial Coordinator, while Milo Padilla (Padilla) was taking over her former position as Category Buyer; that for seven (7) months, they placed her on floating status and subjected her to mockery and ridicule by the suppliers and her co-employees; that not only was there no justification for her transfer, but the respondents clearly acted in bad faith and with discrimination, insensibility and disdain to make her stay with the company intolerable for her.Our RulingWe find no merit in the petition.This Court has consistently refused to interfere with the exercise by management of its prerogative to regulate the employees’ work assignments, the working methods and the place and manner of work.As we all know, there are various laws imposing all kinds of burdens and obligations upon the employer in relation to his employees, and yet as a rule this Court has always upheld the employer’s prerogative to regulate all aspects of employment relating to the employees’ work assignment, the working methods and the place and manner of work. Indeed, labor laws discourage interference with an employer’s judgment in the conduct of his business.21

In Rural Bank of Cantilan, Inc. v. Julve,22 the Court had occasion to summarize the general jurisprudential guidelines affecting the right of the employer to regulate employment, including the transfer of its employees:Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.While the law imposes many obligations upon the employer, nonetheless, it also protects the employer’s right to expect from its employees not only good performance, adequate work, and diligence, but also good conduct and loyalty. In fact, the Labor Code does not excuse employees from complying with valid company policies and reasonable regulations for their governance and guidance.Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of

equivalent rank or salary; (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes; (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause; (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.23 (Citations omitted)In Philippine Japan Active Carbon Corporation v. NLRC,24 it was held that the exercise of management’s prerogative concerning the employees’ work assignments is based on its assessment of the qualifications, aptitudes and competence of its employees, and by moving them around in the various areas of its business operations it can ascertain where they will function with maximum benefit to the company.1âwphi1It is the employer’s prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employee’s right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.25

As a privilege inherent in the employer’s right to control and manage its enterprise effectively, its freedom to conduct its business operations to achieve its purpose cannot be denied.26 We agree with the appellate court that the respondents are justified in moving the petitioner to another equivalent position, which presumably would be less affected by her habitual tardiness or inconsistent attendance than if she continued as a Category Buyer, a "frontline position" in the day-to-day business operations of a supermarket such as Robinsons.If the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may not complain that it amounts to a constructive dismissal.As we have already noted, the respondents had the burden of proof that the transfer of the petitioner was not tantamount to constructive dismissal, which as defined in Blue Dairy Corporation v. NLRC,27 is a quitting because continued employment is rendered impossible, unreasonable or unlikely, or an offer involving a demotion in rank and diminution of pay:The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal, which has been defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.Thus, as further held in Philippine Japan Active Carbon Corporation,28 when the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee may not complain that it amounts to a constructive dismissal.29

But like all other rights, there are limits to the exercise of managerial prerogative to transfer personnel, and on the employer is laid the burden to show that the same is without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. 30 Indeed,

management prerogative may not be used as a subterfuge by the employer to rid himself of an undesirable worker.31

Interestingly, although the petitioner claims that she was constructively dismissed, yet until the unfavorable decision of the LA on May 30, 2007, for seven (7) months she continued to collect her salary while also adamantly refusing to heed the order of Sarte to report to the Metroeast Depot. It was only on June 22, 2007, after the LA’s decision, that she filed her "forced" resignation. Her deliberate and unjustified refusal to assume her new assignment is a form of neglect of duty, and according to the LA, an act of insubordination. We saw how the company sought every chance to hear her out on her grievances and how she ignored the memoranda of Sarte asking her to explain her refusal to accept her transfer. All that the petitioner could say was that it was a demotion and that her floating status embarrassed her before the suppliers and her co-employees.The respondents have discharged the burden of proof that the transfer of the petitioner was not tantamount to constructive dismissal.In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,32 a machinist who had been employed with the petitioner company for 16 years was reduced to the service job of transporting filling materials after he failed to report for work for one (1) day on account of an urgent family matter. This is one instance where the employee’s demotion was rightly held to be an unlawful constructive dismissal because the employer failed to show substantial proof that the employee’s demotion was for a valid and just cause:In case of a constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for valid and legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome this burden of proof, the employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal. x x x.33 (Citation omitted)In the case at bar, we agree with the appellate court that there is substantial showing that the transfer of the petitioner from Category Buyer to Provincial Coordinator was not unreasonable, inconvenient, or prejudicial to her. The petitioner failed to dispute that the job classifications of Category Buyer and Provincial Coordinator are similar, or that they command a similar salary structure and responsibilities. We agree with the NLRC that the Provincial Coordinator’s position does not involve mere clerical functions but requires the exercise of discretion from time to time, as well as independent judgment, since the Provincial Coordinator gives appropriate recommendations to management and ensures the faithful implementation of policies and programs of the company. It even has influence over a Category Buyer because of its recommendatory function that enables the Category Buyer to make right decisions on assortment, price and quantity of the items to be sold by the store.34

We also cannot sustain the petitioner’s claim that she was not accorded due process and that the respondents acted toward her with discrimination, insensibility, or disdain as to force her to forego her continued employment. In addition to verbal reminders from Sarte, the petitioner was asked in writing twice to explain within 48 hours her refusal to accept her transfer. In the first, she completely remained silent, and in the second, she took four (4) days to file a mere one-paragraph reply, wherein she simply said that she saw the Provincial Coordinator position as a demotion, hence she could not accept it. Worse, she may even be said to have committed insubordination when she refused to turn over her responsibilities to the new Category Buyer, Padilla, and to assume her new responsibilities as Provincial Coordinator and report to the Metroeast Depot as directed. This was precisely the reason why the petitioner was kept on floating status. To her discredit, her defiance constituted a neglect of duty, or an act of insubordination, per the LA.Neither can we consider tenable the petitioner’s contention that the respondents deliberately held her up to mockery and ridicule when they cut off her email access, sent memoranda to her clients that she was no longer a Category Buyer, and to the various

Robinsons branches that she was now a Provincial Coordinator on floating status and that Padilla was taking over her position as the new Category Buyer. It suffices to state that these measures are the logical steps to take for the petitioner’s unjustified resistance to her transfer, and were not intended to subject her to public embarrassment.Judicial review of labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which labor officials’ findings rest.Finally, as reiterated in Acebedo Optical,35 this Court is not a trier of facts, and only errors of law are generally reviewed in petitions for review on certiorari criticizing decisions of the CA. Questions of fact are not entertained, and in labor cases, this doctrine applies with greater force.Factual questions are for labor tribunals to resolve.36 Thus:Judicial Review or labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which its labor officials' findings rest. As such, the findings of facts and conclusion of the NLRC are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this Court as long as they are supported by substantial evidence. This Court finds no basis for deviating from said doctrine without any clear showing that the findings of the Labor Arbiter, as affirmed by the NLRC, are bereft of substantiation. Particularly when passed upon and upheld by the Court of Appeals, they are binding and conclusive upon the Supreme Court and will not normally be disturbed.x x x xAs earlier stated, we find no basis for deviating from the oft espoused legal tenet that findings of facts and conclusion of the labor arbiter are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this Court as long as they are supported by substantial evidence, without any clear showing that such findings of fact, as affirmed by the NLRC, are bereft of substantiation. More so, when passed upon and upheld by the Com1 of Appeals, they are binding and conclusive upon us and will not normally be disturbed; x x x.37 (Citations omitted)It is our ruling, that the findings of fact and conclusion of the LA, as affirmed by the NLRC, are supported by substantial evidence, as found by the CA.WHEREFORE, the premises considered, the Decision of the Court of Appeals dated June 8, 2011 in CA-G.R. SP No. 109604 is AFFIRMED.SO ORDERED.