Labor Rel Cases Compilation

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G.R. No. 112965 January 30, 1997PHILIPPINES TODAY, INC., VS NLRC.PANGANIBAN, J.:May a "Memorandum for File" which did not mention the words "resign" and/or "resignation" nonetheless

juridically constitute voluntary resignation? In answering this question, the Court took into account notmerely the literal meaning of the words and phrases used but, more importantly, the peculiar circumstancesattendant to its writing as well as antecedent, contemporaneous and subsequent actions, which wereinconsistent with the desire for continued employment of the writer, an intelligent executive occupying a

position of trust in the Philippine Star and gifted with an unusual writing ability.These circumstances and actions are explained by this Court in re-solving this petition forcertiorariassailingthe Decision 1of the National Labor Relations Commission (Second Division) 2in NLRC NCR CA 001863-91entitled "Felix R. Alegre, Jr. vs. Philippines Today, Inc." promulgated on September 30, 1993, whichreversed the decision of Labor Arbiter Pablo C. Espiritu, Jr., dated May 15, 1991. In a Resolution datedNovember 16, 1993, petitioners' motion for reconsideration was denied. 3

The FactsThe undisputed facts are as follows: Petitioner Philippines Today, Inc. (PTI) is the owner of the PhilippineStar, a daily newspaper of national and international circulation, while the individual petitioners are officersand members of the board of directors of PTI, namely, Betty Go-Belmonte, chairman of the board; Arturo A.Borjal, president; Maximo V. Soliven, publisher and chairman, editorial board; and Isaac G. Belmonte,treasurer. Private Respondent Felix R. Alegre, Jr. was employed by PTI in July 1986 as a seniorinvestigative reporter of the Philippine Star with a monthly salary of eight thousand pesos (P8,000.00). Helater became chief investigative writer and then assistant to the publisher. His monthly compensation wascorrespondingly increased to ten thousand pesos (P10,000.00).On October 20, 1988, Respondent Alegre filed a request for a thirty-day leave of absence effective on thesame date, citing the advice of his personal physician for him to undergo further medical consultationsabroad. 4Four days later, on October 24, 1988, he wrote a "Memorandum for File" 5addressed to PetitionerBetty Go-Belmonte with copies furnished to members of the board of directors of PTI, the text of which isreproduced below:

MEMORANDUM FOR FILE.FOR: BETTY GO-BELMONTEChairman & CEO, The STAR Group of Publications.FROM: FELIX R. ALEGRE, JR.DATE: 24 October 1988

SUBJECT: HAVING IT ALLTruth like medicine hurts. But it cures.The nice little chat we had last Thursday was most revealing. And certainly disconcerting.What you had to tell me pained me, of course. But it has helped me just as much. It enabledme to see things clearly in their right perspectives. More importantly, it provided me with theanswers to the questions that had long nagged me in my wakeful state.For quite a time, I got this sinking feeling of being treated like a pariah of sorts by most of thesenior executives around here. The frustration at my inability to put a finger at such a feelingsomehow enhanced the angst within me. Until our chat. Now all the demons of my anxietyhave been exorcised. And I am left alone to lick the wounds of my betrayal. It isn't easy, Iknow. But I shall pull through. Your candor and demonstrated faith in my person have beenmost assuaging. And for that alone, I am most grateful.It has never occurred to me that, in my acceptance of the invitation from no less than thepublisher himself, to join him at the Philippines Today, Inc., and the STAR Group ofPublications, I was unwittingly signing my own death warrant as well. The insults he had lateron hurled at my person, the malicious innuendoes he had spread around, casting doubts onmy personal and professional integrity, had mercilessly torn at my soul, causing metaphysicaldeath.My credentials as a working journalist, I'd like to believe, got me this job at the STAR in the firstplace. And my bylines in the series of articles in the STAR From Day One of my officialaffiliation with the Company, should establish that fact.I was an investigative reporter at the Manila Times when the publisher offered me to work withhim at the STAR in 1986.I was given the assignment as senior investigative reporter, then chief investigative writer, untilI was given a fancy title of assistant to the publisher.

As a corporate guy assisting the publisher in his day-to-day official function and this iswhere I feel very strongly about citing some specifics of the things I did in this area, to wit:. . . (omitted are said "specifics" of Respondent Alegre's accomplishments as assistant to thepublisher deemed by this Court as not relevant to the appreciation of this memorandum inrelation to the consideration of the petition.)

As can be gleaned from this recital of some of the "things done" (despite my distaste fortrumpeting one's deeds, but has to be said, to set the record straight, in this instance), one cansee that I obviously don different hats at any one time, doing administration and operationsfunctions, apart from my journalistic duties. That I work as a teamplayer, and trying hard to begood (sic) it, cannot be denied.FOR DOING ALL THESE in the best spirit of corporate team-upmanship, what did I get in


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RETURN?1. A pittance, salary/compensation-wise.2. Being conveniently bypassed in promotions, pay hikes, and other perks.3. Hindered from active participation in corporate affairs, by shooting at my ideas thatotherwise would have been workable and profitable for the Company and its people (CF. Item2 of my memo dtd 06 September 88 which had you interested in and supportive of).4. Personally and professionally maligned, and accused of being an NPA (non-performingasshole, pardon my French).By and large, all that I got are the twin demons of a civilized, unconscionable society:ECONOMIC INJUSTICE and PROFESSIONAL SABOTAGE.When push comes to a shove . . . . . anything or everything comes crashing down. I'M HAVINGIT ALL!Since I am on leave, I guess I won't be able to see you for a while. I wish to take thisopportunity to express my profound appreciation and sincere thanks for your genuine concren(sic) and honest initiatives to do a good turn on my behalf. You have been most candid andforthright with me. I can't be any less.Thank you for everything. God bless.

Very sincerely,(Sgd.) FELIX R. ALEGRE,JR.

copy furnished:Members of the Board, Phils. Today, Inc.Dr. Ronaldo G. AsuncionMr. Antonio Roces

On December 6, 1988, Respondent Alegre received from Petitioner Belmonte a letter, 6as follows:

988MR. FELIX ALEGREDear Jun,During our board meeting yesterday, we discussed your letter dated October 24, 1988, and theBoard decided to accept your resignation and that it would take effect on November 22, 1988upon expiration of your one-month leave.I would like to take this opportunity to say that we were happy to have had you with the STARGroup of Publications and that we would like to wish you the best of luck.God bless. Thank you.

The following day, Respondent Alegre wrote Petitioner Belmonte expressing surprise over the acceptance ofhis "resignation" as stated in the above-quoted letter. His letter7partly stated:

It certainly beats me to be told that my "'resignation" has been accepted, when in truth and infact, no such move, however implicit it may be, and no such letter has ever been made frommy end.

xxx xxx xxxI am writing this letter not, certainly, to make any appeal, but simply to go on record that I didnot resign. I filed a leave of absence. Yes. And that was dully (sic) approved. Then I sent you amemorandum for file expressing my sentiments on certain things, candid statements that cameto be (sic) expressed inspired by your candor and sincerity in our last little chat. Now, if youread that memo to mean resignation, that is your responsibility. And I am not just about tocontest it. . . .

This was followed by another letter on January 2, 1989, wherein Alegre, through counsel, 8reiterated that henever resigned. He accused petitioners of illegal dismissal as can be perceived allegedly from thediscrimination against him in promotions, benefits and the ploy to oust him by considering his memorandumas a resignation. He claimed that as a result, he suffered mental anguish, social humiliation, besmirchedreputation and moral shock. He thus demanded indemnification for "the material and moral losses he hasincurred". He further wrote that he was not insisting to be taken back after being shown that he was nolonger wanted in the company.Counsel 9for petitioners, in a reply on January 19, 1989, explained that the acceptance of Alegre'sresignation was a collective decision of the board of directors since "nobody in his right mind would write amemorandum of the sort he wrote and still not resign. To them, the memorandum was tantamount to aresignation even if Mr. Alegre did not say so in so much words." With respect to his claim for damages,petitioners' counsel said, "he has not shown any specific fact or circumstance that would justify his claim,even remotely." Hence, "the Star cannot accede to the same."On May 17, 1989, Respondent Alegre filed a complaint for illegal dismissal and damages against hereinpetitioners. 10The labor arbiter dismissed said complaint in his decision of May 15, 1991. We quotesignificant portions of said decision:

This office has minutely disected (sic) the letter and while it be said that nothing thereinmentions about resigning from his position as Assistant to the Publisher, a perusal of the letteras a whole shows that the intention of the complainant was to resign from his post. The subjectas "Having it all" together with his frustrations and disappointment in the office coupled withhis statement that "when push comes to a shove, everything comes crushing (sic) down" andthat: he is "having it all" and with his concluding sentence of "Thank you for everything" are


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(sic) clear indications that he was in fact resigning.As a journalist and a writer, complainant need not write his letter of resignation in black andwhite. He can do so in many other ways, words and actions to show his real intention ofleaving his job.

xxx xxx xxxComplainant's subsequent overt acts particularly his failure to report to his job after theexpiration of his leave of absence, his being gainfully employed with the Office of SenatorLaurel (as Chief of Staff) and his act of clearing and removing his personal files, things andbelongings from his desk prior to his (complainant) knowledge or receipt of the letter acceptinghis resignation(,) clearly indicates that complainant was not terminated from his job but ratherhe resigned from his job. . .

xxx xxx xxxWHEREFORE, premises considered, judgment is hereby rendered dismissing the complaintfor illegal dismissal and damages for lack of merit, and ordering respondent, PhilippinesToday, Inc., to pay complainant the amount of THIRTY THOUSAND (P30,000.00) PESOS byway of separation pay in the interest of compassionate labor justice and; dismissingRespondents (sic) counterclaim for damages for lack ofmerit. 11

On appeal by Alegre, the above decision was set aside by the NLRC. Adopting the definition in Black's LawDictionary (5th Edition) of resignation as a "formal renouncement or relinquishment of an office," it held thatherein Respondent Alegre did not resign as there was no actual act of relinquishment to constitute completeand operative resignation. According to the NLRC, the request for a leave of absence by Respondent Alegremeant that he intended to return after the period of his absence. Such intent was bolstered by his filing of arequest for an extension of his leave. Further, when he received the letter of Petitioner Belmonte datedNovember 9, 1988 informing him of the acceptance by the Board of his resignation, he immediately wrote aletter to Petitioner Belmonte, expressing in no uncertain terms that he did not resign. These circumstancesled the NLRC to hold that Respondent Alegre was constructively dismissed without just cause and to orderpetitioners to pay him full backwages for three years from the time of dismissal, separation pay in lieu ofreinstatement, moral and exemplary damages and attorney's fees. 12

Issues

Petitioners argue that the NLRC committed grave abuse of discretion:1. in finding them guilty of illegally dismissing Respondent Alegre;2. in awarding Respondent Alegre moral and exemplary damages and attorney's fees without any actual andlegal basis; and,3. even assuming that Respondent Alegre was illegally dismissed, in contravening and disregarding thisCourt's ruling inAlex Ferrer, et al. vs. NLRC(Second Division) 13by erroneously computing backwages, as itdid not deduct the amounts earned by Respondent Alegre while he was admittedly employed in the office ofSenator Sotero H. Laurel.The pivotal question is whether the Memorandum for File of Respondent Alegre addressed to PetitionerBelmonte constitutes a letter of resignation.In construing it so, petitioners advance these arguments: (1) Respondent Alegre had spoken openly toPetitioner Belmonte of his desire to leave the Philippine Star; (2) the contents of his memorandum indicatean intention on his part not to return to his job even if he did not categorically mention resignation; (3) henever returned to work after his authorized leave expired and even cleared his desk of his personalbelongings; and, (4) he obtained employment as chief of staff of the office of Senator Sotero Laurel for whichhe was paid a higher salary. Having been led to believe that Alegre wanted to resign and in honestlyperceiving his memorandum as a resignation letter, petitioners cannot be held liable for moral andexemplary damages because they believe their action was in accordance with law. Lastly, petitionerscontend that, even assuming they were liable for illegal dismissal, the NLRC, in granting backwages, shouldhave deducted the amount earned by Alegre from his subsequent employment.Private respondent, on the other hand, maintains that he had no intention of resigning from PTI. He insiststhat: (1) in writing the memorandum, he was merely lamenting the work environment at PTI and apprisingPetitioner Belmonte of the situation; (2) a resignation should be unequivocal in nature; (3) his non-return towork after his original leave expired is explained by his subsequent request for an extension thereof due to

medical reasons; (4) and the letter of Petitioner Belmonte obviated any desire for him to return to his worksince petitioners practically terminated his employment. He further contends that petitioners' tenaciousresistance in admitting their mistake bespeaks of bad faith and shows their real intention to end his services,which entitles him to moral and exemplary damages. In representation of public respondent, the SolicitorGeneral supported private respondent's position.

The Court's Ruling

The petition is meritorious.Pivotal Issue: Did the Memorandum for File Constitute Voluntary Resignation?

After a thorough scrutiny of the Memorandum for File of Respondent Alegre and a careful deliberation on thepeculiar circumstances attendant to its writing and the antecedent, contemporaneous and subsequentactions of private respondent, we hold that said memorandum juridically constituted a letter of resignation.

We see merit in the findings and conclusions drawn by the labor arbiter. They are more in accord withprudence, common sense and sound judgment. The labor arbiter correctly deduced from Alegre'smemorandum and attendant actuations that he resigned. In contrast, the NLRC was too strict in itsinterpretation of what constitutes "resignation." It adhered literally to the dictionary meaning of the wordwithout relating it to the peculiarity of the factual circumstances surrounding the case. Courts and quasi-


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judicial bodies, in the exercise of their functions and in making decisions, must not be too dogmatic as torestrict themselves to literal interpretations of words, phrases and sentences. A complete and wholistic viewmust be taken in order to render a just and equitable judgment.

Incendiary words and sarcastic remarks negate alleged desire to improve relationsAlegre's choice of words and way of expression betray his allegation that the memorandum was simply an"opportunity to open the eyes of (Petitioner) Belmonte to the work environment in petitioners' newspaperwith the end in view of persuading (her) to take a hand at improving said environment." Apprising hisemployer (or top-level management) of his frustrations in his job and differences with his immediate superioris certainly not done in an abrasive, offensive and disrespectful manner. A cordial or, at the very least, civilattitude, according due deference to one's superiors, is still observed, especially among high-rankingmanagement officers. The Court takes judicial notice of the Filipino values ofpakikisama and paggalangwhich are not only prevalent among members of a family and community but within organizations as well,including work sites. An employee is expected to extend due respect to management, the employer beingthe "proverbial hen that lays the golden egg," 14so to speak. An aggrieved employee who wants to unburdenhimself of his disappointments and frustrations in his job or relations with his immediate superior wouldnormally approach said superior directly or otherwise ask some other officer possibly to mediate and discussthe problem with the end in view of settling their differences without causing ferocious conflicts. No matterhow the employee dislikes his employer professionally, and even if he is in a confrontational disposition, hecannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a bileful pen. Here,respondent Alegre was anything but respectful and polite. His memorandum is too affrontive, combative andconfrontational. It certainly causes resentment, even when read by an objective reader. His incendiary wordsand sarcastic remarks, to quote some:

For quite a time, I got this sinking feeling of being treated like a pariah of sorts by most of thesenior executives around here. The frustration at my inability to put a finger at such a feelingsomehow enhanced the angst within me. . . . Now all the demons of my anxiety have beenexorcised. And I am left alone to lick the wounds of my betrayal. . . .It has never occurred to me that, in my acceptance of the invitation from no less than thepublisher himself, to join him . . . , I was unwittingly signing my own death warrant as well. Theinsults he had later on hurled at my person, the malicious innuendoes he had spread around,casting doubts on my personal and professional integrity, had mercilessly torn at my soul,causing metaphysical death.

negate any desire to improve work relations with Petitioner Soliven and other PTI executives. Suchstrongly worded letter constituted an act of "burning his bridges" with the officers of the company.Seeking relief incompatible with writing offensive letter

Any management officer, much so an immediate superior, would be offended, if not enraged, with the insultsand innuendoes stated in said memorandum; more so because the memorandum was not directlyaddressed to him but to the chairman and CEO and copy furnished all other officers and members of theboard of directors. Any discerning mind can perceive that the letter is not simply a recitation of respondent

Alegre's gripes, disappointments, frustrations and heartaches against the company and its officersparticularly Petitioner Soliven, as postulated by the Solicitor General in his comment. 15If it were so, whywas it not addressed directly to the person concerned? His memorandum clearly indicated that his problemsinvolved, or were supposedly caused by only one person, Mr. Soliven, his immediate superior. But it was noteven addressed to him! How can he expect amends in their relations if that was all he wanted? The Solicitor

General was simply turning a blind eye to the obvious fact that said memorandum, for all intents andpurposes, was intended, wittingly or unwittingly, to end employment relations.

Respondent Alegre a well-educated journalist

It should not escape our attention that respondent Alegre is a professional journalist and persuasive writer.On top of that, he was a law graduate. He must have known the drilling effect of his bitter and sarcasticremarks upon the petitioners and must have intended the same. Ordinary words are to be construed in theirordinary meaning. Common sense dictates that Alegre meant to resign when he wrote the memorandum.Otherwise, he should have used a more tempered language and a less confrontational tone. Moreover, heheld a position of evident responsibility requiring the utmost confidence of his immediate superior. Asassistant to the publisher doing, in his very own words, "administration and operations functions, apart from(my) journalistic duties," it is apparent that Alegre was not employed simply for his writing skills. Top

management certainly reposed full trust and confidence in him and placed him in a position of considerablemanagement influence.

PTI officers of uncommon intelligence and perception

Furthermore, his memorandum was addressed to the chairman and chief executive officer of PTI andfurnished all members of the board of directors. These officers which include the likes of the late Betty Go-Belmonte, Maximo V. Soliven and Arturo A. Borjal, long-time and well-respected journalists acclaimedlocally and internationally, are themselves people of uncommon perception and intellect. They will notmiscomprehend the meaning and intent of Alegre's memorandum, which was not by any means a simpleway of seeking relief but well a way to get out of the company. What else could he have meant with theseconcluding remarks:

By and large, all that I got are the twin demons of a civilized, unconscionable society:

ECONOMIC INJUSTICE and PROFESSIONAL SABOTAGE.When push comes to a shove . . . . . anything or everything comes crashing down. I'M HAVINGIT ALL!

Respondent Alegre, being a journalist himself and having worked with them for sometime, knew how hisletter would be perceived and received. Besides, as discussed earlier, Alegre is likewise a well-educated


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man of more than average intelligence. The conclusion is inevitable that he had more than enough sense toanticipate the consequences and effects of his words and actions. Indeed, what a man sows, he reaps.

Trust and confidence breached

In addition, respondent Alegre is a highly confidential employee who holds his job at the pleasure of hisemployer or, stated otherwise, for as long as he enjoys the trust and confidence of his employer. Corollarily,he likewise must repose trust and confidence in his employer or, at the very least, his immediate superior.But any superior hurled with invectives from a confidential employee, much more one occupying amanagerial position at the same time, will definitely lose trust and confidence in the latter. And there can beno way to interpret such letter other than as a withering of trust and confidence by the employee in his boss.The use of offensive language can only mean expression of disloyalty and disrespect. It renders the writerunworthy of the trust and confidence demanded by his position. It is beyond human nature to expect twopersons with underlying mistrust in each other to continue to work together effectively, not to say,harmoniously.

Antecedent, Contemporaneous and Subsequent Actions Affirming Resignation

In addition to his memorandum and the circumstances attendant thereto which were just discussed, theCourt notes some peculiar actions confirming Alegre's intention to terminate his employment with the Star.

(1) Medical reasons for leave of absence not provedFirst, he claims that his leave of absence was due to medical reasons, for which he was supposed to seekrelief abroad. However, the Court scoured the records but found nothing to show that he actually underwentany medical check-up. Much less, medical examination abroad. Nothing really backs up such claim excepthis bare statements which, evidentially, are at best self-serving.

(2) Cleared desk of personal belongingsSecond, respondent Alegre cleared his desk of his personal belongings even before he knew of theacceptance of his resignation. 16Such act certainly bares his intent to leave his job. Respondent Alegre hasnot refuted nor offered any sufficient explanation for this action. We cannot but give due credit to thepetitioners' contention that such act was expressive of his intent to resign.

(3) Did not report back to workThird, respondent Alegre did not return to his job after his authorized leave of absence expired in November1988. Although he sent another letter17 requesting for an extension of his leave, there is no showing onrecord that the same was approved by petitioners. It is standard office procedure that applications for leaveof absence are subject to the approval of the employer. These are not automatically granted upon filing.Except to cite in his request "travel log (sic) coupled with advice of my physician," respondent Alegre has norproven the emergency nature of the cause/s of his extended leave. Again, we cannot but give due credenceto petitioners' contention that this was another operative evidence of Alegre's intent to resign.His non-return to work, though, is not equivalent to abandonment of work. For in the latter, it is necessary toprove "clear and deliberate intent" coupled with unjustified absence and overt acts unerringly pointing to thefact that the employee simply does not want to work anymore. 18In the case at bench, Alegre voluntarilyresigned through his memorandum albeit written in the guise of a grievance letter. The law and

jurisprudence on abandonment have thus no application in the present case.(4) Not deprived of chance to return to work

Fourth, if Respondent Alegre had really no intention to resign, he could have reported back to work. Hiscontention that he was effectively deprived of any chance to return to his work because of the acceptance ofhis purported resignation cannot be sustained. He claims that he received the notice dated November 9,1988 only on December 6, 1988. But this means that for about two weeks after his leave expired, he had allchances to return to his work. Yet he chose not to. The obvious reason is that he had actually no intention ofdoing so.

(5) Alegre expressly manifested intention to resign

Prior to sending his memorandum, Respondent Alegre informed Petitioner Belmonte of his intention toresign from the Philippine Star. This is shown by the testimony (cross examination) of the late Mrs. Belmontebefore the labor arbiter on January 13, 1990, as follows:.

ATTY. BORRETA:And you took that action, meaning the Board acted on this Memo for File whichyou considered as his letter of resignation without consulting or talking with thecomplainant first?

WITNESS:The complainant had also applied for leave of absence and he talked with methat he was leaving for the United States. Actually I remember he requested aconversation but he did not specify what the conversation was about, YourHonor. He was telling me that he wanted to leave, has signed another job. And Itold him that that is not my prerogative and I am only Chairman of the Board; andhe came upon the recommendation of our Publisher and he was at that time

Assistant to the Publisher; that he should talk to the Publisher first and I evenadvised him to patch up whatever differences he might have. In thatconversation, he said something about leaving and he even said tome that whenhe leaves, he would ask his two (2) sons who were working with us to leave too.

And I think I made a comment, and that must be what he was referring to. I said;oh, but your sons are very hardworking. In fact I said the Publisher, Max Soliven,told me that "sana you were as good as your sons" maybe that was his feeling.That is my way of trying to tell him that your sons are very hardworking becausehe said when I leave I am going to ask them to leave too. Maybe because of that


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he gave me the impression that he wanted to leave.ATTY. BORRETA:And this happened before he wrote this memo for file on October 24, 1988?WITNESS:Yes, sir

ATTY. BORRETA:And because of that you got the impression that he had the intention to resign?WITNESS:Yes, sir. 19

(6) Assumed job in another officeFinally, the most telling of the actions undertaken by Respondent Alegre which evidently demonstrate hisintent to resign was his immediate employment as chief of staff of the office of then Senator Sotero H.Laurel, with a much higher compensation at P14,600.00 per month plus P2,000.00 per month driver'sallowance. He admitted in his testimony before the labor arbiter on November 6, 1989 that he was employedtherein about a year before (the date of his testimony) or sometime in November 1988. 20The date coincidedwith the period of his leave of absence or immediately thereafter. If he had no intention of resigning and wason leave for medical reasons as he alleged, why then did he commence a new job in another office at aboutthe same period? His assumption of a new job prior to receiving Mrs. Belmonte's letter on December 6, 1988is clearly inconsistent with any desire to remain in employment with PTI. This is particularly evident becauseboth jobs required full-time work. Moreover, working in a newspaper which prides in its independence frompartisan activities is incompatible with a concurrent political office held by respondent.

Side Issue: May a Resignation Be Unilaterally Withdrawn?Having established that Respondent Alegre resigned, we now tackle the corollary issue of whether he canunilaterally withdraw his resignation. We hold that he cannot do so.The case ofIntertrod Maritime, Inc. vs. NLRC21 is in point. The employee therein who was a ship engineer,while at Port Pylus, Greece, requested for relief due to "personal reasons." The master of the ship, who hadauthority to "sign off" an employee requesting relief, approved his request but informed the employee thatrepatriation expenses were for his account and that he had to give thirty days notice in view of clause 5 ofthe employment contract. When the vessel was at Port Said, Egypt four days later, the master "signed himoff" and paid him in cash all amounts due him less repatriation expenses. On his return to the Philippines,the employee filed a complaint charging his employer with breach of employment contract and violation ofthe National Seamen Board rules and regulations. He claimed that his request for relief was only for the solepurpose of enabling him to take care of a fellow member of the crew who was hospitalized in Greece.Hence, after he was disallowed from disembarking thereat, the reason no longer existed and, consequently,he was illegally dismissed when he was forced to "sign off" in Egypt even as he signified his intention ofcontinuing his work.The Court ruled against the employee. It held that resignations, once accepted, may not be withdrawnwithout the consent of the employer. If the employer accepts the withdrawal, the employee retains his job. Ifthe employer does not, the employee cannot claim illegal dismissal. To say that an employee who hasresigned is illegally dismissed, is to encroach upon the right of employers to hire persons who will be ofservice to them.Obviously, this is a recognition of the contractual nature of employment which requires mutuality of consentbetween the parties. An employment contract is consensual and voluntary. Hence, if the employee "findshimself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigencyof the service, then he has no other choice but to disassociate himself from his employment". 22If acceptedby the employer, the consequent effect of resignation is severance of the contract of employment.

A resigned employee who desires to take his job back has to re-apply therefor, and he shall have the statusof a stranger who cannot unilaterally demand an appointment. He cannot arrogate unto himself the sameposition which he earlier decided to leave. To allow him to do so would be to deprive the employer of hisbasic right to choose whom to employ. Such is tantamount to undue oppression of the employer. It has beenheld that an employer is free to regulate, according to his own discretion and judgment, all aspects ofemployment including hiring. 23The law, in protecting the rights of the laborer, impels neither the oppressionnor self-destruction of the employer. 24

Consistent with our ruling in Intertrod, the resignation of respondent Alegre after its acceptance by

petitioners can no longer be withdrawn without the consent of the latter. In fairness to the employer, anemployee cannot backtrack on his resignation at his whim and without the conformity of the former.The instant case is unlike Molave Tours Corporation vs. NLRC25 and People's Security, Inc. vs. NLRC26InMolave, acting on reports that the employee was on several occasions found drunk within work premises,the employer required him to explain in writing said charges. Notwithstanding his explanation and request fora confrontation with his accusers, the employee was made to sign a resignation letter. Two months after, hefiled a complaint for illegal dismissal. The labor arbiter, affirmed by the NLRC, found that the employee wasmerely forced and intimidated into resigning. The Court reiterated that resignation must be voluntary on thepart of the employee. It thus ordered the employer to reinstate the employee and award backwages andother benefits due him since there was no effective resignation.Likewise in People's Security, there was a finding of involuntary resignation. The employees therein who

were security guards were not given assignments by their employer after the latter's security servicescontract with Meralco expired. The employees requested for loans to be deducted from their security bonddeposits, which requests were denied by the employer who insisted that they must turn in their resignationsfirst before their security bond deposits could be released. Not having been given new work assignmentsand being in dire financial need, the employees submitted their resignation letters. Three months later, they


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filed money claims which were later amended to include illegal dismissal. The employer contended that theemployees voluntarily severed their employment because they turned in their resignation letters andassumed jobs with another security agency. Again, the Court held that resignation is a voluntary act of theemployee. When the employees were told that they would not be granted loans unless they resigned, theyhad no choice since they desperately needed money to meet their respective families' needs. They werealso forced to accept jobs at another agency as a practical solution to their employment problems whichwere caused by the employer's refusal and failure to provide them with new assignments.In the case ofIndophil vs. NLRC, 27on the other hand, the employee voluntarily submitted a resignationletter but later tried to retrieve the same. He contended though, that he was thereafter prevented by thecompany guard from entering the work premises because of his resignation. He sued for illegal dismissal.His employer claimed abandonment of work since he was required to report and to explain his unauthorizedabsences but did not. In holding that there was no dismissal, the Court regarded the employer's act ofrequiring the employee to report and explain his unauthorized absences as non-acceptance of the previousresignation of the employee. Thus, the employer still considered him as its employee in spite of the filedresignation letter. With respect to the latter's allegation that he was prevented by the company guard fromentering the premises, the Court chided him for not having inquired into its veracity and for simply relying onthe bare statement of the guard. It said that the employee should be more vigilant of his rights.The above three cases are dissimilar to the case at bar. In the first two cases, there were involuntaryresignations while in the third there was an unaccepted resignation. In the instant case, however, theresignation was voluntary and it was accepted by the employer. Thus, our grant of the petition.Since we find no case of illegal dismissal, we will no longer pass upon the two other issues raised bypetitioners which are mere consequences of the contrary finding made by the NLRC. Necessarily, there canbe no award of any moral or exemplary damages, backwages and separation pay.

EpilogueBoth the Constitution and the Labor Code mandate a bias in favor of labor. Hence, this Court , as a matter of

judicial policy, leans backwards to protect labor and the working class against the machinations andincursions of their more financially entrenched employers. In the present case, however, it is obvious to usthat private respondent's memorandum could not have been intended merely to persuade management toimprove the work environment at the Philippine Star. Rather, it was evidently a recitation of the facts andreasons why respondent Alegre could no longer continue working under what he believed were unbearableconditions in the work place. The offensive language used by a well-educated man endowed with unusualwriting skill could not have been intended merely for the "suggestion box." That it was addressed and givento persons of uncommon perception themselves takes the letter out of ordinary employer-employeecommunications. It is true that there was no direct mention of the word "resignation." However, theincendiary words employed denote a clear intent to end the writer's association of trust and confidence withhis superiors and employer. This intent becomes even more manifest when viewed in light of attendant actsof Alegre, particularly his prolonged leave of absence, his clearing of his own desk of personal belongings,his failure to report back to work after the expiration of his approved leave, his verbal expression of his intentto resign, and most notably, his assumption of a higher paying job in a political office which wasincompatible with his work at the Star.In deciding cases, this Court does not matter-of-factly apply and interpret laws in a vacuum. Generalprinciples do not decide specific cases. Rather, laws are interpreted always in the context of the peculiarfactual situation of each case. Each case has its own flesh and blood and cannot be decided simply on the

basis of isolated clinical classroom principles. The circumstances of time, place, event, person, andparticularly attendant circumstances and actions before, during and after the operative fact should all betaken in their totality so that justice can be rationally and fairly dispensed.WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision and Resolution of theNLRC are SET ASIDE. The temporary restraining order issued by this Court is made PERMANENT. Nocosts.

G.R. No. 128682 March 18, 1999SERVIDAD vs NLRCPURISIMA, J.:


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Commodum ex injuria sua nemo habere debet. No one should obtain an advantage from his wrong.Schemes which preclude acquisition of tenurial security should be condemned as contrary to public policy.No member of the work force of this country should be allowed to be taken advantages of by the employer. 1

In this special civil action the Certioraripetitioner seeks to annul the decision 2 of the National LaborRelations Commission (NLRC) reversing the Labor Arbiter's disposition 3 that he was illegally dismissed.The facts of the case are as follows:Petitioner Joaquin T. Servidad was employed on May 9, 1994 by respondent INNODATA as a "Data ControlClerk", under a contract of employment Section 2 of which, reads:

Sec. 2. This Contract shall be effective for a period of 1 years commencing on May 10, 1994,until May 10, 1995unless sooner terminated pursuant to the provisions hereof.From May 10, 1994 to November 10, 1994, or for a period of six (6) months, the EMPLOYEEshall be contractual during which the EMPLOYER can terminate the EMPLOYEE's services byserving written notice to that effect. Such termination shall be immediate, or at whatever datewithin the six-month period, as the EMPLOYER may determine. Should the EMPLOYEEcontinue his employment beyond November 10, 1994, he shall become a regular employeeupon demonstration of sufficient skill in the terms of his ability to meet the standards set by theEMPLOYER. If the EMPLOYEE fails to demonstrate the ability to master his task during thefirst six months he can be placed on probation for another six (6) months after which he will beevaluated for promotion as a regular employee. 4

On November 9, 1995, or after working for six (6) months, he was made to sign a three-month probationaryemployment and later, an extended three-month probationary employment good until May 9, 1995. 5

On July 7, 1994, the petitioner was given an overall rating of 100% and 98% in the work evaluationsconducted by the company. In another evaluation, petitioner received a rating of 98.5% given by the privaterespondent. 6

On May 9, 1995, petitioner was dismissed from the service on the ground of alleged termination of contractof employment.Such happening prompted petitioner to institute a case for illegal dismissal against the private respondent. Inruling for petitioner, the Labor Arbiter disposed as follows:

WHEREFORE, premises considered judgment is hereby rendered finding Respondent guilty ofillegal dismissal and concomitantly, Respondent is ordered to pay complainant full backwagesfrom the time of his dismissal till actual or payroll reinstatement, in the amount of P53,826.50(computed till promulgation only).Respondent is hereby further ordered to reinstate complainant to his former position orequivalent position without loss of seniority rights, privileges and benefits as a regularemployee immediately upon receipt of this decision.SO ORDERED. 7

On appeal thereto by INNODATA, the NLRC reversed the aforesaid judgment of the Labor Arbiter. Itdeclared that the contract between petitioner and private respondent was for a fixed term and therefore, thedismissal of petitioner Joaquin T. Servidad, at the end of his one year term agreed upon, was valid. Thedecretal portion of the decision of NLRC is to the following effect:

All said the judgment dated August 20, 1996 is hereby, REVERSED.WHEREFORE, premises considered, the instant case is hereby DISMISSED for lack of merit.SO ORDERED. 8

Undaunted, petitioner found his way to this Court via the present petition faulting NLRC for acting with graveabuse of discretion in adjudging subject contract of employment of petitioner to be for a definite or fixedperiod.The petition is impressed with merit.

At bar is just another scheme to defeat the constitutionally guaranteed right of employees to security oftenure. The issue posited centers on the validity and enforceability of the contract of employment enteredinto by the parties.The NLRC found that the contract in question is for a fixed term. It is worthy to note, however, that the saidcontract provides for two periods. The first period was for six months terminable at the option of privaterespondent, while the second period was also for six months but probationary in character. In both cases,the private respondent did not specify the criteria for the termination or retention of the services of petitioner.Such a wide leeway for the determination of the tenure of an employee during a one year period ofemployment is violate of the right of the employee against unwarranted dismissal.Decisively in point is Article 1377 of the Civil Code, which provides:

Art. 1377. The interpretation of obscure words or stipulations in a contract shall not favor theparty who caused the obscurity.

Certainly, favorable interpretation of the contract in the case under scrutiny should be for petitioner and notfor the private respondent which caused the preparation of said contract.If the contract was really for a fixed term, the private respondent should not have been given the discretionto dismiss the petitioner during the one year period of employment for reasons other than the just andauthorized causes under the Labor Code. Settled is the rule that an employer can terminate the services ofan employee only for valid and just causes which must be shown by clear and convincing evidence. 9

According to the private respondent, the one-year period stipulated in subject contract was to enablepetitioner to acquire the skill necessary for the job. In effect, what respondent employer theorized upon isthat the one-year term of employment is probationary. If the nature of the job did actually necessitate at leastone year for the employee to acquire the requisite training and experience, still, the same could not be avalid probationary employment as it falls short of the requirement of Article 281 10of the Labor Code. It was


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not brought to light that the petitioner was duly informed at the start of his employment, of the reasonablestandards under which he could qualify as a regular employee. The rudiments of due process demand thatan employee should be apprised before hand of the conditions of his employment and the basis for hisadvancement. 11

The language of the contract in dispute is truly a double-bladed scheme to block the acquisition of theemployee of tenurial security. Thereunder, private respondent has two options. It can terminate theemployee by reason of expiration of contract, or it may use "failure to meet work standards" as the groundfor the employee's dismissal. In either case, the tenor of the contract jeopardizes the right of the worker tosecurity of tenure guaranteed by the Constitution. 12

In the case ofBrent School, Inc. vs. Zamora, et al. 13, the Court upheld the principle that where from thecircumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security bythe employee, they should be disregarded for being contrary to public policy.Such circumstance has been indubitably shown here to justify the application of the following conclusion:

Accordingly, and since the entire purpose behind the development of the legislationculminating in the present Article 280 of the Labor Code clearly appears to have been, asalready observed, to prevent circumvention of the employee's right to be secure in his tenure,the clause in said article indiscriminately and completely ruling out all written or oralagreements conflicting with the concept of regular employment as defined therein should beconstrued to refer to the substantive evil that the Code itself has singled out: agreementsentered into precisely to circumvent security of tenure. . . . 14

The agreement in the case under consideration has such an objective and consequently, is acomplete nullity. 15

It is abundantly clear that the petitioner was hired as a regular employee, at the outset. He worked as a"Data Control Clerk". His job was directly related to the data processing and data encoding business ofInnodata. His work was therefore necessary and important to the business of his employer. Such being thescenario involved, under Article 280 16 of the Labor Code petitioner is considered a regular employee ofprivate respondent. At any rate, even assuming that his original employment was probationary, petitionerwas anyway permitted to work beyond the first six-month period and under Article 281 17 an employeeallowed to work beyond the probationary period is deemed a regular employee.Reliance by NLRC on the ruling in Mariwasa Manufacturing, Inc., et al. vs. Hen. Leogardo Jr., et al,18 ismisplaced. Pertinent portion of the disquisition therein was as follows:

By voluntary agreeing to an extension of the probationary period, Dequila in effect waived anybenefit attaching to the completion of said period if he still failed to make the grade during theperiod of extension. The Court finds nothing in the law which by any fair interpretation prohibitssuch waiver. And no public policy protecting the employee and the security of tenure is servedby proscribing voluntary agreements which, by reasonably extending the period of probation,actually improve and further a probationary employee's prospects of demonstrating his fitnessfor regular employment. 19

The above-described situation, however, is not the same as what obtained in this case. In the Mariwasacase, the employment was expressly agreed upon as probationary. Here, no such specific designation isstipulated in the contract. The private respondent sought to alternatively avail of probationary employmentand employment for a fixed term so as to preclude the regularization of the status of petitioner. The utterdisregard of public policy by the contract in question negates the ruling of NLRC that said contract is the lawbetween the parties. The private agreement of the parties cannot prevail over Article 1700 of the Civil Code,which provides:

Art. 1700. The relation between capital and labor are not merely contractual. They are soimpressed with public interest that labor contracts must yield to the common good. Therefore,such contracts are subject to special laws on labor unions, collective bargaining, strikes andlockouts, closed shops, wages, working conditions, hours of labor and similar subjects.

Similarly telling is the case ofPakistan Airlines Corporation vs. Pole, et al.20 There, it was said:. . . provisions of applicable law, especially provisions relating to matters affected with publicpolicy, are deemed written into the contract. Put a little differently, the governing principle isthat the parties may not contract away applicable provisions of law especially peremptoryprovisions dealing with matters heavily impressed with public interest. The law relating to labor

and employment is clearly such an area and parties are not at liberty to insulate themselvesand their relationships from the impact of labor laws and regulations by simply contracting witheach other. . . . 21

On the averment that NLRC gravely abused its discretion in finding that petitioner failed to meet thestandards of the company, we find for petitioner. The decision at NLRC on the matter simply stated that thepetitioner fell short of the expectations of the company without specifying factual basis therefor. 22 The publicrespondent overlooked the undisputed satisfactory ratings of the performance of petitioner in the two jobevaluations conducted by the respondent company. Even granting, therefore, that the contract litigated uponis valid; still, the petitioner, who was permitted to work beyond six months could not be dismissed on theground of failure to meet the standards of Innodata. By the provisions of the very contract itself, petitionerhas become a regular employee of private respondent. Therein, it is stipulated that: ". . . Should the

EMPLOYEE continue employment beyond November 10, 1994, he shall become a regular employee upondemonstration of sufficient skill in the terms of his ability to meet the standards set by the EMPLOYER. . . ."23

Then too, the case at bar is on all fours with the recent case ofVillanueva vs. NLRC, et al.24 where thesame standard form of employment contract prepared by INNODATA was at issue. In deciding that the said


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contract violated the employee's right to security of tenure, the court ratiocinated:The termination of petitioner's employment contract on 21 February 1995, as well as thesubsequent issuance on 13 March 1995 of a "new" contract for five months as "data encoder,"was a devious, but crude, attempt to circumvent petitioner's right to security of tenure as aregular employee guaranteed by Article 279 of the Labor Code. 25 Hence, the so called "end ofcontract" on 21 February 1995 amounted to a dismissal without any valid cause.

Indeed, the NLRC gravely abused its discretion in construing the contract sued upon as one with a fixedterm. To uphold such a finding would be to concede to the private respondent an advantage arising from itsown mistake.On the matter of moral damages, however, we rule for the private respondent. Mere allegations ofbesmirched reputation, embarrassment and sleepless nights are insufficient to warrant an award for moraldamages. It must be shown that the proximate cause thereof was the unlawful act or omission of the privaterespondent. 26 However, the petitioner herein predicated his claim for such damages on mere allegations ofsleepless nights, embarrassment, etc., without detailing out what was responsible therefor or the causethereof.

As regards the backwages to be granted to petitioner, the amount thereof should be computed from the timehe was illegally dismissed to the time of his actual or payroll reinstatement, without any deduction. 27

WHEREFORE, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE, and the decisionof the Labor Arbiter, dated August 20, 1996, in NLRC-NCR-00-055-03471-95 REINSTATED, with themodification that the award of backwages be computed from the time of the dismissal of petitioner to hisactual or payroll reinstatement. Costs against the private respondent.SO ORDERED.

G.R. No. 61594 September 28, 1990PAKISTAN INTERNATIONAL AIRLINES CORPORATION VS OPLEFELICIANO, J.:


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On 2 December 1978, petitioner Pakistan International Airlines Corporation ("PIA"), a foreign corporationlicensed to do business in the Philippines, executed in Manila two (2) separate contracts of employment,one with private respondent Ethelynne B. Farrales and the other with private respondent Ma. M.C. Mamasig.1 The contracts, which became effective on 9 January 1979, provided in pertinent portion as follows:

5. DURATION OF EMPLOYMENT AND PENALTYThis agreement is for a period of three (3) years, but can be extended by the mutual consent ofthe parties.

xxx xxx xxx6. TERMINATION

xxx xxx xxxNotwithstanding anything to contrary as herein provided, PIA reserves the right to terminatethis agreement at any time by giving the EMPLOYEE notice in writing in advance one monthbefore the intended termination or in lieu thereof, by paying the EMPLOYEE wages equivalentto one month's salary.

xxx xxx xxx10. APPLICABLE LAW:This agreement shall be construed and governed under and by the laws of Pakistan, and onlythe Courts of Karachi, Pakistan shall have the jurisdiction to consider any matter arising out ofor under this agreement.

Respondents then commenced training in Pakistan. After their training period, they began discharging theirjob functions as flight attendants, with base station in Manila and flying assignments to different parts of theMiddle East and Europe.On 2 August 1980, roughly one (1) year and four (4) months prior to the expiration of the contracts ofemployment, PIA through Mr. Oscar Benares, counsel for and official of the local branch of PIA, sentseparate letters both dated 1 August 1980 to private respondents Farrales and Mamasig advising both thattheir services as flight stewardesses would be terminated "effective 1 September 1980, conformably toclause 6 (b) of the employment agreement [they had) executed with [PIA]." 2

On 9 September 1980, private respondents Farrales and Mamasig jointly instituted a complaint, docketed asNCR-STF-95151-80, for illegal dismissal and non-payment of company benefits and bonuses, against PIAwith the then Ministry of Labor and Employment ("MOLE"). After several unfruitful attempts at conciliation,the MOLE hearing officer Atty. Jose M. Pascual ordered the parties to submit their position papers andevidence supporting their respective positions. The PIA submitted its position paper, 3but no evidence, andthere claimed that both private respondents were habitual absentees; that both were in the habit of bringingin from abroad sizeable quantities of "personal effects"; and that PIA personnel at the Manila International

Airport had been discreetly warned by customs officials to advise private respondents to discontinue thatpractice. PIA further claimed that the services of both private respondents were terminated pursuant to theprovisions of the employment contract.In his Order dated 22 January 1981, Regional Director Francisco L. Estrella ordered the reinstatement ofprivate respondents with full backwages or, in the alternative, the payment to them of the amountsequivalent to their salaries for the remainder of the fixed three-year period of their employment contracts; thepayment to private respondent Mamasig of an amount equivalent to the value of a round trip ticket Manila-USA Manila; and payment of a bonus to each of the private respondents equivalent to their one-monthsalary. 4 The Order stated that private respondents had attained the status of regular employees after theyhad rendered more than a year of continued service; that the stipulation limiting the period of theemployment contract to three (3) years was null and void as violative of the provisions of the Labor Codeand its implementing rules and regulations on regular and casual employment; and that the dismissal,having been carried out without the requisite clearance from the MOLE, was illegal and entitled privaterespondents to reinstatement with full backwages.On appeal, in an Order dated 12 August 1982, Hon. Vicente Leogardo, Jr., Deputy Minister, MOLE, adoptedthe findings of fact and conclusions of the Regional Director and affirmed the latter's award save for theportion thereof giving PIA the option, in lieu of reinstatement, "to pay each of the complainants [privaterespondents] their salaries corresponding to the unexpired portion of the contract[s] [of employment] . . .". 5

In the instant Petition forCertiorari, petitioner PIA assails the award of the Regional Director and the Orderof the Deputy Minister as having been rendered without jurisdiction; for having been rendered without

support in the evidence of record since, allegedly, no hearing was conducted by the hearing officer, Atty.Jose M. Pascual; and for having been issued in disregard and in violation of petitioner's rights under theemployment contracts with private respondents.1. Petitioner's first contention is that the Regional Director, MOLE, had no jurisdiction over the subject matterof the complaint initiated by private respondents for illegal dismissal, jurisdiction over the same being lodgedin the Arbitration Branch of the National Labor Relations Commission ("NLRC") It appears to us beyonddispute, however, that both at the time the complaint was initiated in September 1980 and at the time theOrders assailed were rendered on January 1981 (by Regional Director Francisco L. Estrella) and August1982 (by Deputy Minister Vicente Leogardo, Jr.), the Regional Director had jurisdiction over terminationcases.

Art. 278 of the Labor Code, as it then existed, forbade the termination of the services of employees with at

least one (1) year of service without prior clearance from the Department of Labor and Employment:Art. 278. Miscellaneous Provisions . . .(b) With or without a collective agreement, no employer may shut down his establishment ordismiss or terminate the employment of employees with at least one year of service during thelast two (2) years, whether such service is continuous or broken, without prior written authority


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issued in accordance with such rules and regulations as the Secretary may promulgate . . .(emphasis supplied)

Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code, made clear that incase of a termination without the necessary clearance, the Regional Director was authorized to orderthe reinstatement of the employee concerned and the payment of backwages; necessarily, therefore,the Regional Director must have been given jurisdiction over such termination cases:

Sec. 2. Shutdown or dismissal without clearance. Any shutdown or dismissal without priorclearance shall be conclusively presumed to be termination of employment without a justcause. The Regional Director shall, in such case order the immediate reinstatement of theemployee and the payment of his wages from the time of the shutdown or dismissal until thetime of reinstatement. (emphasis supplied)

Policy Instruction No. 14 issued by the Secretary of Labor, dated 23 April 1976, was similarly veryexplicit about the jurisdiction of the Regional Director over termination of employment cases:

Under PD 850, termination cases with or without CBA are now placed under the originaljurisdiction of the Regional Director. Preventive suspension cases, now made cognizable forthe first time, are also placed under the Regional Director. Before PD 850, termination caseswhere there was a CBA were under the jurisdiction of the grievance machinery and voluntaryarbitration, while termination cases where there was no CBA were under the jurisdiction of theConciliation Section.In more details, the major innovations introduced by PD 850 and its implementing rules andregulations with respect to termination and preventive suspension cases are:1. The Regional Director is now required to rule on every application for clearance, whetherthere is opposition or not, within ten days from receipt thereof.

xxx xxx xxx(Emphasis supplied)

2. The second contention of petitioner PIA is that, even if the Regional Director had jurisdiction, still his orderwas null and void because it had been issued in violation of petitioner's right to procedural due process . 6

This claim, however, cannot be given serious consideration. Petitioner was ordered by the Regional Directorto submit not only its position paper but also such evidence in its favor as it might have. Petitioner opted torely solely upon its position paper; we must assume it had no evidence to sustain its assertions. Thus, evenif no formal or oral hearing was conducted, petitioner had ample opportunity to explain its side. Moreover,petitioner PIA was able to appeal his case to the Ministry of Labor and Employment. 7

There is another reason why petitioner's claim of denial of due process must be rejected. At the time thecomplaint was filed by private respondents on 21 September 1980 and at the time the Regional Directorissued his questioned order on 22 January 1981, applicable regulation, as noted above, specified that a"dismissal without prior clearance shall be conclusively presumed to be termination of employment without acause", and the Regional Director was required in such case to" order the immediate reinstatement of theemployee and the payment of his wages from the time of the shutdown or dismiss until . . . reinstatement." Inother words, under the then applicable rule, the Regional Director did not even have to require submission ofposition papers by the parties in view of the conclusive (juris et de jure) character of the presumption createdby such applicable law and regulation. In Cebu Institute of Technology v. Minister of Labor and Employment,8 the Court pointed out that "under Rule 14, Section 2, of the Implementing Rules and Regulations, thetermination of [an employee] which was without previous clearance from the Ministry of Labor is conclusivelypresumed to be without [just] cause . . . [a presumption which] cannot be overturned by any contrary proofhowever strong."3. In its third contention, petitioner PIA invokes paragraphs 5 and 6 of its contract of employment with privaterespondents Farrales and Mamasig, arguing that its relationship with them was governed by the provisionsof its contract rather than by the general provisions of the Labor Code. 9

Paragraph 5 of that contract set a term of three (3) years for that relationship, extendible by agreementbetween the parties; while paragraph 6 provided that, notwithstanding any other provision in the Contract,PIA had the right to terminate the employment agreement at any time by giving one-month's notice to theemployee or, in lieu of such notice, one-months salary.

A contract freely entered into should, of course, be respected, as PIA argues, since a contract is the lawbetween the parties. 10 The principle of party autonomy in contracts is not, however, an absolute principle.

The rule in Article 1306, of our Civil Code is that the contracting parties may establish such stipulations asthey may deem convenient, "providedthey are not contrary to law, morals, good customs, public order orpublic policy." Thus, counter-balancing the principle of autonomy of contracting parties is the equally generalrule that provisions of applicable law, especially provisions relating to matters affected with public policy, aredeemed written into the contract. 11Put a little differently, the governing principle is that parties may notcontract away applicable provisions of law especially peremptory provisions dealing with matters heavilyimpressed with public interest. The law relating to labor and employment is clearly such an area and partiesare not at liberty to insulate themselves and their relationships from the impact of labor laws and regulationsby simply contracting with each other. It is thus necessary to appraise the contractual provisions invoked bypetitioner PIA in terms of their consistency with applicable Philippine law and regulations.

As noted earlier, both the Labor Arbiter and the Deputy Minister, MOLE, in effect held that paragraph 5 of

that employment contract was inconsistent with Articles 280 and 281 of the Labor Code as they existed atthe time the contract of employment was entered into, and hence refused to give effect to said paragraph 5.These Articles read as follows:

Art. 280. Security of Tenure. In cases of regular employment, the employer shall notterminate the services of an employee except for a just cause or when authorized by this Title


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An employee who is unjustly dismissed from work shall be entitled to reinstatement withoutloss of seniority rights and to his backwages computed from the time his compensation waswithheld from him up to the time his reinstatement.

Art. 281. Regular and Casual Employment. The provisions of written agreement to the contrarynotwithstanding and regardless of the oral agreements of the parties, an employment shall bedeemed to be regular where the employee has been engaged to perform activities which areusually necessary or desirable in the usual business or trade of the employer, except wherethe employment has been fixed for a specific project or undertaking the completion ortermination of which has been determined at the time of the engagement of the employee orwhere the work or services to be performed is seasonal in nature and the employment is forthe 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 suchservice is continuous or broken, shall be considered as regular employee with respect to theactivity in which he is employed and his employment shall continue while such actually exists.(Emphasis supplied)

In Brent School, Inc., et al. v. Ronaldo Zamora, etc., et al., 12 the Court had occasion to examine in detail thequestion of whether employment for a fixed term has been outlawed under the above quoted provisions ofthe Labor Code. After an extensive examination of the history and development of Articles 280 and 281, theCourt reached the conclusion that a contract providing for employment with a fixed period was notnecessarily unlawful:

There can of course be no quarrel with the proposition that where from the circumstances it isapparent that periods have been imposed to preclude acquisition of tenurial security by theemployee, they should be struck down or disregarded as contrary to public policy, morals, etc.But where no such intent to circumvent the law is shown, or stated otherwise, where thereason for the law does not exist e.g. where it is indeed the employee himself who insists upona period or where the nature of the engagement is such that, without being seasonal or for aspecific project, a definite date of termination is a sine qua non would an agreement fixing aperiod be essentially evil or illicit, therefore anathema Would such an agreement come withinthe scope of Article 280 which admittedly was enacted "to prevent the circumvention of theright of the employee to be secured in . . . (his) employment?"

As it is evident from even only the three examples already given thatArticle 280 of the LaborCode, under a narrow and literal interpretation, not only fails to exhaust the gamut ofemployment contracts to which the lack of a fixed period would be an anomaly, but would alsoappear to restrict, without reasonable distinctions, the right of an employee to freely stipulatewith his employer the duration of his engagement, it logically follows that such a literalinterpretation should be eschewed or avoided. The law must be given reasonableinterpretation, to preclude absurdity in its application. Outlawing the whole concept of termemployment and subverting to boot the principle of freedom of contract to remedy the evil ofemployers" using it as a means to prevent their employees from obtaining security of tenure islike cutting off the nose to spite the face or, more relevantly, curing a headache by lopping offthe head.

xxx xxx xxx

Accordingly, and since the entire purpose behind the development of legislation culminating inthe present Article 280 of the Labor Code clearly appears to have been, as already observed,to prevent circumvention of the employee's right to be secure in his tenure, the clause in saidarticle indiscriminately and completely ruling out all written or oral agreements conflicting withthe concept of regular employment as defined therein should be construed to refer to thesubstantive evil that the Code itself has singled out: agreements entered into precisely tocircumvent security of tenure. It should have no application to instances where a fixed periodof employment was agreed upon knowingly and voluntarily by the parties, without any force,duress or improper pressure being brought to bear upon the employee and absent any othercircumstances vitiating his consent, or where it satisfactorily appears that the employer andemployee dealt with each other on more or less equal terms with no moral dominance

whatever being exercised by the former over the latter. Unless thus limited in its purview, thelaw would be made to apply to purposes other than those explicitly stated by its framers; itthus becomes pointless and arbitrary, unjust in its effects and apt to lead to absurd andunintended consequences. (emphasis supplied)

It is apparent from Brent Schoolthat the critical consideration is the presence or absence of asubstantial indication that the period specified in an employment agreement was designed tocircumvent the security of tenure of regular employees which is provided for in Articles 280 and 281of the Labor Code. This indication must ordinarily rest upon some aspect of the agreement other thanthe mere specification of a fixed term of the ernployment agreement, or upon evidence aliunde of theintent to evade.

Examining the provisions of paragraphs 5 and 6 of the employment agreement between petitioner PIA and

private respondents, we consider that those provisions must be read together and when so read, the fixedperiod of three (3) years specified in paragraph 5 will be seen to have been effectively neutralized by theprovisions of paragraph 6 of that agreement. Paragraph 6 in effect took back from the employee the fixedthree (3)-year period ostensibly granted by paragraph 5 by rendering such period in effect a facultative oneat the option of the employer PIA. For petitioner PIA claims to be authorized to shorten that term, at any time


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and for any cause satisfactory to itself, to a one-month period, or even less by simply paying the employee amonth's salary. Because the net effect of paragraphs 5 and 6 of the agreement here involved is to renderthe employment of private respondents Farrales and Mamasig basically employment at the pleasure ofpetitioner PIA, the Court considers that paragraphs 5 and 6 were intended to prevent any security of tenurefrom accruing in favor of private respondents even during the limited period of three (3) years, 13and thus toescape completely the thrust of Articles 280 and 281 of the Labor Code.Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly, thelaw of Pakistan as the applicable law of the agreement and, secondly, lays the venue for settlement of anydispute arising out of or in connection with the agreement "only[in] courts of Karachi Pakistan". The firstclause of paragraph 10 cannot be invoked to prevent the application of Philippine labor laws and regulationsto the subject matter of this case, i.e., the employer-employee relationship between petitioner PIA andprivate respondents. We have already pointed out that the relationship is much affected with public interestand that the otherwise applicable Philippine laws and regulations cannot be rendered illusory by the partiesagreeing upon some other law to govern their relationship. Neither may petitioner invoke the second clauseof paragraph 10, specifying the Karachi courts as the sole venue for the settlement of dispute; between thecontracting parties. Even a cursory scrutiny of the relevant circumstances of this case will show the multipleand substantive contacts between Philippine law and Philippine courts, on the one hand, and therelationship between the parties, upon the other: the contract was not only executed in the Philippines, itwas also performed here, at least partially; private respondents are Philippine citizens and respondents,while petitioner, although a foreign corporation, is licensed to do business (and actually doing business) andhence resident in the Philippines; lastly, private respondents were based in the Philippines in between theirassigned flights to the Middle East and Europe. All the above contacts point to the Philippine courts andadministrative agencies as a proper forum for the resolution of contractual disputes between the parties.Under these circumstances, paragraph 10 of the employment agreement cannot be given effect so as tooust Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. Finally, and inany event, the petitioner PIA did not undertake to plead and prove the contents of Pakistan law on thematter; it must therefore be presumed that the applicable provisions of the law of Pakistan are the same asthe applicable provisions of Philippine law. 14

We conclude that private respondents Farrales and Mamasig were illegally dismissed and that publicrespondent Deputy Minister, MOLE, had not committed any grave abuse of discretion nor any act without orin excess of jurisdiction in ordering their reinstatement with backwages. Private respondents are entitled tothree (3) years backwages without qualification or deduction. Should their reinstatement to their former orother substantially equivalent positions not be feasible in view of the length of time which has gone by sincetheir services were unlawfully terminated, petitioner should be required to pay separation pay to privaterespondents amounting to one (1) month's salary for every year of service rendered by them, including thethree (3) years service putatively rendered.

ACCORDINGLY, the Petition forcertiorariis hereby DISMISSED for lack of merit, and the Order dated 12August 1982 of public respondent is hereby AFFIRMED, except that (1) private respondents are entitled tothree (3) years backwages, without deduction or qualification; and (2) should reinstatement of privaterespondents to their former positions or to substantially equivalent positions not be feasible, then petitionershall, in lieu thereof, pay to private respondents separation pay amounting to one (1)-month's salary forevery year of service actually rendered by them and for the three (3) years putative service by privaterespondents. The Temporary Restraining Order issued on 13 September 1982 is hereby LIFTED. Costs

against petitioner.SO ORDERED.

G.R. No. 118978 May 23, 1997PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY VS NLRCREGALADO, J.:Seeking relief through the extraordinary writ ofcertiorari, petitioner Philippine Telegraph and Telephone


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Company (hereafter, PT & T) invokes the alleged concealment of civil status and defalcation of companyfunds as grounds to terminate the services of an employee. That employee, herein private respondentGrace de Guzman, contrarily argues that what really motivated PT & T to terminate her services was herhaving contracted marriage during her employment, which is prohibited by petitioner in its company policies.She thus claims that she was discriminated against in gross violation of law, such a proscription by anemployer being outlawed by Article 136 of the Labor Code.Grace de Guzman was initially hired by petitioner as a reliever, specifically as a "Supernumerary ProjectWorker," for a fixed period from November 21, 1990 until April 20, 1991 vice one C.F. Tenorio who went onmaternity leave. 1 Under the Reliever Agreement which she signed with petitioner company, her employmentwas to be immediately terminated upon expiration of the agreed period. Thereafter, from June 10, 1991 toJuly 1, 1991, and from July 19, 1991 to August 8, 1991, private respondent's services as reliever were againengaged by petitioner, this time in replacement of one Erlinda F. Dizon who went on leave during bothperiods. 2 After August 8, 1991, and pursuant to their Reliever Agreement, her services were terminated.On September 2, 1991, private respondent was once more asked to join petitioner company as aprobationary employee, the probationary period to cover 150 days. In the job application form that wasfurnished her to be filled up for the purpose, she indicated in the portion for civil status therein that she wassingle although she had contracted marriage a few months earlier, that is, on May 26, 1991. 3

It now appears that private respondent had made the same representation in the two successive relieveragreements which she signed on June 10, 1991 and July 8, 1991. When petitioner supposedly learnedabout the same later, its branch supervisor in Baguio City, Delia M. Oficial, sent to private respondent amemorandum dated January 15, 1992 requiring her to explain the discrepancy. In that memorandum, shewas reminded about the company's policy of not accepting married women for employment. 4

In her reply letter dated January 17, 1992, private respondent stated that she was not aware of PT&T'spolicy regarding married women at the time, and that all along she had not deliberately hidden her true civilstatus. 5Petitioner nonetheless remained unconvinced by her explanations. Private respondent wasdismissed from the company effective January 29, 1992, 6 which she readily contested by initiating acomplaint for illegal dismissal, coupled with a claim for non-payment of cost of living allowances (COLA),before the Regional Arbitration Branch of the National Labor Relations Commission in Baguio City.

At the preliminary conference conducted in connection therewith, private respondent volunteered theinformation, and this was incorporated in the stipulation of facts between the parties, that she had failed toremit the amount of P2,380.75 of her collections. She then executed a promissory note for that amount infavor of petitioner7. All of these took place in a formal proceeding and with the agreement of the partiesand/or their counsel.On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a decision declaring that privaterespondent, who had already gained the status of a regular employee, was illegally dismissed by petitioner.Her reinstatement, plus payment of the corresponding back wages and COLA, was correspondinglyordered, the labor arbiter being of the firmly expressed view that the ground relied upon by petitioner indismissing private respondent was clearly insufficient, and that it was apparent that she had beendiscriminated against on account of her having contracted marriage in violation of company rules.On appeal to the National Labor Relations Commission (NLRC), said public respondent upheld the laborarbiter and, in its decision dated April 29, 1994, it ruled that private respondent had indeed been the subjectof an unjust and unlawful discrimination by her employer, PT & T. However, the decision of the labor arbiterwas modified with the qualification that Grace de Guzman deserved to be suspended for three months in

view of the dishonest nature of her acts which should not be condoned. In all other respects, the NLRCaffirmed the decision of the labor arbiter, including the order for the reinstatement of private respondent inher employment with PT & T.The subsequent motion for reconsideration filed by petitioner was rebuffed by respondent NLRC in itsresolution of November 9, 1994, hence this special civil action assailing the aforestated decisions of thelabor arbiter and respondent NLRC, as well as the denial resolution of the latter.1. Decreed in the Bible itself is the universal norm that women should be regarded with love and respect but,through the ages, men have responded to that injunction with indifference, on the hubristic conceit thatwomen constitute the inferior sex. Nowhere has that prejudice against womankind been so pervasive as inthe field of labor, especially on the matter of equal employment opportunities and standards. In thePhilippine setting, women have traditionally been considered as falling within the vulnerable groups or types

of workers who must be safeguarded with preventive and remedial social legislation against discriminatoryand exploitative practices in hiring, training, benefits, promotion and retention.The Constitution, cognizant of the disparity in rights between men and women in almost all phases of socialand political life, provides a gamut of protective provisions. To cite a few of the primordial ones, Section 14,

Article II8 on the Declaration of Principles and State Policies, expressly recognizes the role of women innation-building and commands the State to ensure, at all times, the fundamental equality before the law ofwomen and men. Corollary thereto, Section 3 of Article XIII 9 (the progenitor whereof dates back to both the1935 and 1973 Constitution) pointedly requires the State to afford full protection to labor and to promote fullemployment and equality of employment opportunities for all, including an assurance of entitlement totenurial security of all workers. Similarly, Section 14 of Article XIII 10 mandates that the State shall protectworking women through provisions for opportunities that would enable them to reach their full potential.

2. Corrective labor and social laws on gender inequality have emerged with more frequency in the yearssince the Labor Code was enacted on May 1, 1974 as Presidential Decree No. 442, largely due to ourcountry's commitment as a signatory to the United Nations Convention on the Elimination of All Forms ofDiscrimination Against Women (CEDAW). 11

Principal among these laws are Republic Act No. 6727 12 which explicitly prohibits discrimination against


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women with respect to terms and conditions of employment, promotion, and training opportunities; RepublicAct No. 6955 13 which bans the "mail-order-bride" practice for a fee and the export of female labor tocountries that cannot guarantee protection to the rights of women workers; Republic Act No. 7192 14 alsoknown as the "Women in Development and Nation Building Act," which affords women equal opportunitieswith men to act and to enter into contracts, and for appointment, admission, training, graduation, andcommissioning in all military or similar schools of the Armed Forces of the Philippines and the PhilippineNational Police; Republic Act No. 7322 15 increasing the maternity benefits granted to women in the privatesector; Republic Act No. 7877 16 which outlaws and punishes sexual harassment in the workplace and in theeducation and training environment; and Republic Act No. 8042, 17 or the "Migrant Workers and OverseasFilipinos Act of 1995," which prescribes as a matter of policy, inter alia, the deployment of migrant workers,with emphasis on women, only in countries where their rights are secure. Likewise, it would not be amiss topoint out that in the Family Code, 18 women's rights in the field of civil law have been greatly enhanced andexpanded.In the Labor Code, provisions governing the rights of women workers are found in Articles 130 to 138thereof. Article 130 involves the right against particular kinds of night work while Article 132 ensures the rightof women to be provided with facilities and standards which the Secretary of Labor may establish to ensuretheir health and safety. For purposes of labor and social legislation, a woman working in a nightclub, cocktaillounge, massage clinic, bar or other similar establishments shall be considered as an employee under

Article 138. Article 135, on the other hand, recognizes a woman's right against discrimination with respect toterms and conditions of employment on account simply of sex. Finally, and this brings us to the issue athand, Article 136 explicitly prohibits discrimination merely by reason of the marriage of a female employee.3. Acknowledged as paramount in the due process scheme is the constitutional guarantee of protection tolabor and security of tenure. Thus, an employer is required, as a condition sine qua non prior to severanceof the employment ties of an individual under his employ, to convincingly establish, through substantialevidence, the existence of a valid and just cause in dispensing with the services of such employee, one'slabor being regarded as constitutionally protected property.On the other hand, it is recognized that regulation of manpower by the company falls within the so-calledmanagement prerogatives, which prescriptions encompass the matter of hiring, supervision of workers, workassignments, working methods and assignments, as well as regulations on the transfer of employees, lay-offof workers, and the discipline, dismissal, and recall of employees. 19 As put in a case, an employer is free toregulate, according to his discretion and best business judgment, all aspects of employment, "from hiring tofiring," except in cases of unlawful discrimination or those which may be provided by law. 20

In the case at bar, petitioner's policy of not accepting or considering as disqualified from work any womanworker who contracts marriage runs afoul of the test of, and the right against, discrimination, afforded allwomen workers by our labor laws and by no less than the Constitution. Contrary to petitioner's assertion thatit dismissed private respondent from employment on account of her dishonesty, the record discloses clearlythat her ties with the company were dissolved principally because of the company's policy that marriedwomen are not qualified for employment in PT & T, and not merely because of her supposed acts ofdishonesty.That it was so can easily be seen from the memorandum sent to private respondent by Delia M. Oficial, thebranch supervisor of the company, with the reminder, in the words of the latter, that "you're fully aware thatthe company is not accepting married women employee (sic), as it was verbally instructed to you." 21 Again,in the termination notice sent to her by the same branch supervisor, private respondent was made to

understand that her severance from the service was not only by reason of her concealment of her marriedstatus but, over and on top of that, was her violation of the company's policy against marriage ("and eventold you that married women employees are not applicable [sic] or accepted in o

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Labor Rel Cases Compilation