Labor Standard Cases 1

8/11/2019 Labor Standard Cases 1

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GR. NO. 185665

EASTERN TELECOMMUNICATION PHILSVS.EASTERN TELECOMMUNICATION EMPLOYEES UNION

D E C I S I O NMENDOZA, J.:

Before the Court is a petition for review on certiorariseeking modication of the June 2! 2""# Decision$%&of the Court of'ppea(s (CA)and its Decem)er %2! 2""# *eso(ution! $2&in C'+,-*- S. No-/%/01! annu((ing the 'pri( 2#! 2"" *eso(ution $&of the Nationa( 3a)or*e(ations Commission (NLRC) in N3*C+NC*+CC+"""20+"1 entit(ed 4Inthe Matter of the Labor Dispute in Eastern e!e"o##uni"ations,$hi!ippines, In".%5he 6acts

's s7nthesi8ed )7 the N3*C! the facts of the case are as

fo((ows! &i'9

Eastern 5e(ecommunications .hi(s-! Inc- :E5.I; isa corporation engaged in the )usiness of providingte(ecommunications faci(ities! particu(ar(7 (easinginternationa( date (ines or circuits! regu(ar (and(ines!internet and data services! emp(o7ing appros main ground in postponing the pa7mentof )onuses is due to a((ege continuing deterioration ofcompan7>s nancia( position which started in the 7ear2"""- Aowever! E5.I whi(e postponing pa7ment of)onuses sometime in 'pri( 2""1! such pa7ment wou(da(so )e su)ect to avai(a)i(it7 of funds-

Invoking the Side 'greement of the e


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)onuses had )een superseded and voided due to theunion>s (ing of the issue to the NCB on Ju(7 %#! 2""-FAe dec(ared that 4unti( the matter is reso(ved in acompu(sor7 ar)itration! the compan7 cannot and wi(( notpa7 an7 G)onuses> to an7 and a(( union mem)ers-F

5hus! on 'pri( 2@! 2""1! E5E= (ed a Notice of

Strike on the ground of unfair (a)or practice for fai(ure ofE5.I to pa7 the )onuses in gross vio(ation of theeconomic provision of the e


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term of the CB'- 6ina((7! E5.I emphasi8ed that even if it had anunconditiona( o)(igation to grant )onuses to its emp(o7ees! the drasticdec(ine in its nancia( condition had a(read7 (ega((7 re(eased it therefrompursuant to 'rtic(e %2@0 of the Civi( Code-

On 'pri( 2#! 2""! the N3*C issued its *eso(ution dismissing

E5E=>s comp(aint and he(d that E5.I cou(d not )e forced to pa7 the

union mem)ers the %1th! %thand %@thmonth )onuses for the 7ear 2""and the %1thmonth )onus for the 7ear 2""1 inasmuch as the pa7ment ofthese additiona( )enets was )asica((7 a management prerogative!)eing an act of generosit7 and municence on the part of the compan7and contingent upon the rea(i8ation of prots- 5he N3*C pronounced thatE5.I ma7 not )e o)(iged to pa7 these e )enets- It he(d that E5.Icou(d not seek refuge under 'rtic(e %2@0 of the Civi( Code )ecause this

provision wou(d app(7 on(7 when the dicu(t7 in fu(((ing the contractua(o)(igation was manifest(7 )e7ond the contemp(ation of the parties!which was not the case therein- 5he C'! however! sustained the N3*Cnding that the a((egation of =3. was devoid of merit- 5he dispositiveportion of the uestioned decision reads9

AE*E6O*E! premises considered! the instant

petition is ,*'N5ED and the reso(ution of the Nationa(3a)or *e(ations Commission dated 'pri( 2#! 2"" ishere)7 'NN=33ED and SE5 'SIDE- *espondent Eastern5e(ecommunications .hi(ippines! Inc- is ordered to pa7the mem)ers of petitioner their %1th! %thand %@thmonth)onuses for the 7ear 2"" and %1 thmonthfor the 7ear2""1- 5he comp(aint for unfair (a)or practice againstsaid respondent is DISISSED-

SO O*DE*ED-$/&

ISS=ES

Dissatised! E5.I now comes to this Court via *u(e 1! raising

the fo((owing errors a((eged(7 committed )7 the C'! to wit9I-5AE CO=*5 O6 '..E'3S COI55ED ,*'E E**O* O63' AEN I5 'NN=33ED 'ND SE5 'SIDE 5AE*ESO3=5IONS O6 5AE N3*C DIS*E,'*DIN, 5AE E33SE553ED *=3E 5A'5 ' *I5 O6 CE*5IO*'*I :=NDE**=3E @; ISS=ES ON3K 6O* CO**EC5ION O6 E**O*S O6J=*ISDIC5ION O* ,*'E 'B=SE O6 DISC*E5ION'O=N5IN, 5O 3'CL O* EMCESS O6 J=*ISDIC5ION-II-

5AE CO=*5 O6 '..E'3S COI55ED ,*'E E**O* O63' AEN I5 DIS*E,'*DED 5AE *=3E 5A'5 6INDIN,SO6 6'C5S O6 ='SI+J=DICI'3 BODIES '*E 'CCO*DED6IN'3I5K I6 5AEK '*E S=..O*5ED BK S=BS5'N5I'3EIDENCE CONSIDE*IN, 5A'5 5AE CONC3=SIONS O6
http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2012/february2012/185665.htm#_ftn10


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5AE N3*C E*E B'SED ON S=BS5'N5I'3 'NDOE*AE3IN, EIDENCE 'ND =NDIS.=5ED 6'C5S-

III-I5 'S ' ,*'E E**O* O6 3' 6O* 5AE CO=*5 O6'..E'3S 5O CONSIDE* 5A'5 5AE BON=S ,IEN BK

E'S5E*N CO=NIC'5IONS 5O I5S E.3OKEES IS NO5DE.ENDEN5 ON 5AE *E'3I'5ION O6 .*O6I5S-

I-5AE CO=*5 O6 '..E'3S COI55ED ' ,*'E E**O* O63' AEN I5 DIS*E,'*DED 5AE =NDIS.=5ED 6'C55A'5 E'S5E*N CO=NIC'5IONS IS S=66E*IN, 6*O5*EENDO=S 6IN'NCI'3 3OSSES! 'ND O*DE*EDE'S5E*N CO=NIC'5IONS 5O ,*'N5 5AE BON=SES*E,'*D3ESS O6 5AE 6IN'NCI'3 DIS5*ESS O6 E'S5E*NCO=NIC'5IONS--

5AE CO=*5 O6 '..E'3S COI55ED ' ,*'E E**O* O63' AEN I5 '**IED '5 5AE CONC3=SION 5A'5 5AE,*'N5 O6 BON=S ,IEN BK E'S5E*N CO=NIC'5IONS5O I5S E.3OKEES A'S *I.ENED IN5O ' CO.'NK.*'C5ICE-$%"&

' carefu( perusa( of the vo(uminous p(eadings (ed )7 the parties(eads the Court to conc(ude that this case revo(ves around the fo((owingcore issues9

%- hether or not petitioner E5.I is (ia)(e to pa7 %1 th!%thand %@thmonth )onuses for the 7ear 2"" and

%1thmonth )onus for the 7ear 2""1 to the mem)ers ofrespondent unionP and2- hether or not the C' erred in not dismissing outrightE5E=>s petition for certiorari-

E5.I insists that it is under no (ega( compu(sion to pa7 %1th!%thand %@thmonth )onuses for the 7ear 2"" and %1 thmonth )onus forthe 7ear 2""1 contending that the7 are not part of the demanda)(ewage or sa(ar7 and that their grant is conditiona( )ased on successfu()usiness performance and the avai(a)i(it7 of compan7 prots from whichto source the same- 5o thwart E5E=>s monetar7 c(aims! it insists that thedistri)ution of the su)ect )onuses fa((s we(( within the compan7>s

prerogative! )eing an act of pure gratuit7 and generosit7 on its part-5hus! it can withho(d the grant thereof especia((7 since it is current(7p(agued with economic dicu(ties and nancia( (osses- It a((eges that thecompan7>s sca( situation great(7 dec(ined due to tremendous ande


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5he Court>s *u(ing

's a genera( ru(e! in petitions for review under *u(e 1! the

Court! not )eing a trier of facts! does not norma((7 em)ark on a re+e


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earnings! such intention shou(d have )een es contention that the )onus

provision conrms the grant of the su)ect )onuses on(7 on a sing(einstance )ecause if this is so! the parties shou(d have inc(uded such

(imitation in the agreement- Nowhere in the Side 'greement does it sa7that the su)ect )onuses sha(( )e conferred once during the 7ear theSide 'greement was signed- 5he Court uotes with approva( theo)servation of the C' in this regard9

E5.I argues that assuming the )onus provision in

the Side 'greement of the 2""%+2""1 CB' entit(es the

union mem)ers to the su)ect )onuses! it is mere(7 inthe nature of a 4one+timeF grant and not intended tocover the entire term of the CB'- 5he contention isuntena)(e- 5he )onus provision in uestion is e


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contracting parties- O)(igations arising therefrom have the force of (awand shou(d )e comp(ied with in good faith- E5.I cannot renege from theo)(igation it has free(7 assumed when it signed the 2""%+2""1 CB' Side'greement-

,ranting ar2uen+othat the CB' Side 'greement does not

contractua((7 )ind petitioner E5.I to give the su)ect )onuses!

neverthe(ess! the Court nds that its act of granting the same has)ecome an esta)(ished compan7 practice such that it has virtua((7)ecome part of the emp(o7ees> sa(ar7 or wage- ' )onus ma7 )e grantedon euita)(e consideration when the giving of such )onus has )een thecompan7>s (ong and regu(ar practice- In $hi!ippine App!ian"e Corporation&. Court of Appea!s,$2%&it was pronounced9

5o )e considered a 4regu(ar practice!F however!

the giving of the )onus shou(d have )een done over a(ong period of time! and must )e shown to have )eenconsistent and de(i)erate- 5he test or rationa(e of thisru(e on (ong practice reuires an indu)ita)(e showingthat the emp(o7er agreed to continue giving the )enetsknowing fu((7 we(( that said emp(o7ees are not covered

)7 the (aw reuiring pa7ment thereof-

5he records show that E5.I! aside from comp(7ing with theregu(ar %th month )onus! has )een further giving itsemp(o7ees %1thmonth )onus ever7 'pri( as we(( as % thand %@thmonth)onuses ever7 Decem)er of the 7ear! without fai(! from %/0 to 2""2 orfor 20 7ears whether it earned prots or not- 5he considera)(e (ength oftime E5.I has )een giving the specia( grants to its emp(o7ees indicates auni(atera( and vo(untar7 act on its part to continue giving said)enets knowing that such act was not reuired )7 (aw- 'ccording(7! acompan7 practice in favor of the emp(o7ees has )een esta)(ished andthe pa7ments made )7 E5.I pursuant thereto ripened into )enetseno7ed )7 the emp(o7ees-

5he giving of the su)ect )onuses cannot )e peremptori(7withdrawn )7 E5.I without vio(ating 'rtic(e %"" of the 3a)or Code9

'rt- %""- .rohi)ition against e(imination ordiminution of )enets- Nothing in this Book sha(( )econstrued to e(iminate or in an7 wa7 diminish

supp(ements! or other emp(o7ee )enets )eing eno7edat the time of promu(gation of this Code-5he ru(e is sett(ed that an7 )enet and supp(ement )eing

eno7ed )7 the emp(o7ees cannot )e reduced! diminished! discontinuedor e(iminated )7 the emp(o7er- 5he princip(e of non+diminution of)enets is founded on the constitutiona( mandate to protect the rights of

workers and to promote their we(fare and to a?ord (a)or fu(( protection-$22&

Interesting(7! E5.I never presented countervai(ing evidence to

refute E5E=>s c(aim that the compan7 has )een continuous(7 pa7ing)onuses since %/0 up to 2""2 regard(ess of its nancia( state- Its fai(ureto controvert the a((egation! when it had the opportunit7 and resourcesto do so! works in favor of E5E=- 5ime and again! it has )een he(d thatshou(d dou)ts e


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respondent9s e:isting Retire0ent Plan Rules and Regulations at the ti0e, theAnnual Perfor0ance 7ncentive Pa! of R.(s, &..s, and ...s shall 3e consideredin the co0putation of retire0ent 3enefits, as follows; Basic (onthl! .alar! s co(umn fai(ed to improve! continued to )esupercia((7 and poor(7 written! and fai(ed to meet the high standards ofthe newspaper- Aence! the7 decided to terminate petitioner>s co(umn-#

'ggrieved )7 the newspaper>s action! petitioner (ed a comp(aint fori((ega( dismissa(! )ackwages! mora( and e admitted prerogative to reect an7 artic(esu)mitted )7 comp(ainant for pu)(ication-B7 virtue of this power! comp(ainant was he(p(ess(7 constrainedto adopt her su)ects and st7(e of writing to suit the editoria(

taste of her editor- Otherwise! o? to the trash can went herartic(es-oreover! this contro( is a(read7 manifested in co(umn tit(e!T6eminist *eHectionT a((otted comp(ainant- =nder this tit(e!comp(ainant>s writing was contro((ed and (imited to a woman>sperspective on matters of feminine interests- 5hat respondenthad no contro( over the su)ect matter written )7 comp(ainant is

strong(7 )e(ied )7 this o)servation- Even the (ength ofcomp(ainant>s artic(es were set )7 respondents-Inevita)(7! respondents wou(d have no contro( over when orwhere comp(ainant wrote her artic(es as she was a co(umnistwho cou(d produce an artic(e in thirt7 :; :sic; months or three:; da7s! depending on her mood or the amount of researchreuired for an artic(e )ut her actions were contro((ed )7 her

o)(igation to produce an artic(e a week- If comp(ainant did nothave to report for work eight :#; hours a da7! si< :@; da7s aweek! it is )ecause her task was main(7 menta(- 3ast(7! the factthat her artic(es were :sic; pu)(ished week(7 for three :; 7earsshow that she was respondents> regu(ar emp(o7ee! not a once+in+a+)(ue+moon contri)utor who was not under an7 pressure oro)(igation to produce regu(ar artic(es and who wrote at his ownwhim and (eisure-%"

.DI appea(ed the Decision to the N3*C- In a Decision dated 'ugust 2!%//1! the N3*C Second Division dismissed the appea( there)7 armingthe 3a)or 'r)iter>s Decision- 5he N3*C initia((7 noted that .DI fai(ed toperfect its appea(! under 'rtic(e 22 of the 3a)or Code! due to non+(ingof a cash or suret7 )ond- 5he N3*C said that the reason pro?ered )7 .DIfor not (ing the )ond that it was dicu(t or impossi)(e to determine

the amount of the )ond since the 3a)or 'r)iter did not specif7 theamount of the udgment award was not persuasive- It said that a(( .DIhad to do was compute )ased on the amount it was pa7ing petitioner!counting the num)er of weeks from Novem)er 0! %//2 up topromu(gation of the 3a)or 'r)iter>s decision-%%

5he N3*C a(so reso(ved the appea( on its merits- It found no error in the3a)or 'r)iter>s ndings of fact and (aw- It sustained the 3a)or 'r)iter>sreasoning that respondent .DI es work-.DI then (ed a .etition for *eview%2)efore this Court seeking thereversa( of the N3*C Decision- Aowever! in a *eso(ution%datedDecem)er 2! %//#! this Court referred the case to the Court of 'ppea(s!pursuant to our ru(ing in 8t. Martin 9unera! o#es &. Nationa! LaborRe!ations Co##ission-%1

5he C' rendered its assai(ed Decision on June %%! 2""2- It set aside the

N3*C Decision and dismissed petitioner>s Comp(aint- It he(d that theN3*C misappreciated the facts and rendered a ru(ing wanting insu)stantia( evidence- 5he C' said9

5he Court does not agree with pu)(ic respondent N3*C>sconc(usion- 6irst! private respondent admitted that she was and$had& never )een considered )7 petitioner .DI as its emp(o7ee-Second! it is not disputed that private respondent had no
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emp(o7ment contract with petitioner .DI- In fact! herengagement to contri)ute artic(es for pu)(ication was )ased ona ver)a( agreement )etween her and the petitioner>s 3ifest7(eSection Editor- oreover! it was evident that private respondentwas not reuired to report to the oce eight :#; hours a da7-6urther! it is not disputed that she sta7ed in New Kork for si< :@;months without petitioner>s permission as to her (eave of

a)sence nor was she given an7 discip(inar7 action for the same-5hese undisputed facts negate private respondent>s c(aim thatshe is an emp(o7ee of petitioner-oreover! with regards :sic; to the contro( test! the pu)(icrespondent N3*C>s ru(ing that the guide(ines given )7 petitioner.DI for private respondent to fo((ow! e-g- in terms of spacea((ocation and (ength of artic(e! is not the form of contro(envisioned )7 the guide(ines set )7 the Supreme Court- 5he(ength of the artic(e is o)vious(7 (imited so that a(( the artic(es to)e featured in the paper can )e accommodated- 's to the topicof the artic(e to )e pu)(ished! it is )ut (ogica( that privaterespondent shou(d not write mor)id topics such as death)ecause she is contri)uting to the (ifest7(e section- Other thansaid given (imitations! if the same cou(d )e considered

(imitations! the topics of the artic(es su)mitted )7 privaterespondent were a(( her choices- 5hus! the petitioner .DI indeciding to pu)(ish private respondent>s artic(es on(7 contro(sthe resu(t of the work and not the means )7 which said artic(eswere written-'s such! the a)ove facts fai(ed to measure up to the contro( testnecessar7 for an emp(o7er+emp(o7ee re(ationship to es otion for *econsideration was denied in a *eso(ution datedSeptem)er %%! 2""2- She then (ed the present .etition for *eview-In a *eso(ution dated 'pri( 2/! 2""! the Court! without giving duecourse to the petition! ordered the 3a)or 'r)iter to c(arif7 the amount ofthe award due petitioner and! thereafter! ordered .DI to post thereuisite )ond- =pon comp(iance therewith! the petition wou(d )e givendue course- 3a)or 'r)iter 'mansec c(aried that the award under the

Decision amounted to .%!"-""- 5hus! .DI posted the reuisite )ondon Januar7 2! 2""0-%@

e sha(( initia((7 dispose of the procedura( issue raised in the .etition-.etitioner argues that the C' erred in not dismissing outright .DI>s.etition for Certiorarifor .DI>s fai(ure to post a cash or suret7 )ond invio(ation of 'rtic(e 22 of the 3a)or Code-

5his issue was sett(ed )7 this Court in its *eso(ution dated 'pri( 2/!2""-%05here! the Court he(d9

But whi(e the posting of a cash or suret7 )ond is urisdictiona(and is a condition sine ua non to the perfection of an appea(!there is a p(ethora of urisprudence recogni8ing e


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a((owed to stand in the wa7 of euita)(7 and comp(ete(7reso(ving the rights and o)(igations of the parties- But whi(e thisCourt ma7 re(a< the o)servance of reg(ementar7 periods andtechnica( ru(es to achieve su)stantia( ustice! it is not preparedto give due course to this petition and make a pronouncementon the weight7 issue o)taining in this case unti( the (aw has)een du(7 comp(ied with and the reuisite appea( )ond du(7 paid

)7 private respondents-%#

*ecords show that .DI has comp(ied with the Court>s directive for theposting of the )ondP%/thus! that issue has )een (aid to rest-e now proceed to ru(e on the merits of this case-5he main issue we must reso(ve is whether petitioner is an emp(o7ee of.DI! and if the answer )e in the armative! whether she was i((ega((7dismissed-e ru(e for the respondents-5he e


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3ifest7(e Section Editor- 5he .E5I5IONE* had to discuss thetopics rst and su)mit the artic(es two da7s )efore pu)(icationdate to keep her co(umn in the newspaper space regu(ar(7 ase


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was on(7 as to the nished product of her e?orts! i-e-! the co(umn itse(f!)7 wa7 of either shortening or outright reection of the co(umn-5he newspaper>s power to approve or reect pu)(ication of an7 specicartic(e she wrote for her co(umn cannot )e the contro( contemp(ated inthe Tcontro( test!T as it is )ut (ogica( that one who commissions anotherto do a piece of work shou(d have the right to accept or reect theproduct- 5he important factor to consider in the Tcontro( testT is sti(( the

e(ement of contro( over how the work itse(f is done! not ust the endresu(t thereof-In contrast! a regu(ar reporter is not as independent in doing his or herwork for the newspaper- e note the common practice in the newspaper)usiness of assigning its regu(ar reporters to cover specic su)ects!geographica( (ocations! government agencies! or areas of concern! morecommon(7 referred to as T)eats-T ' reporter must produce stories withinhis or her particu(ar )eat and cannot switch to another )eat withoutpermission from the editor- In most newspapers a(so! a reporter mustinform the editor a)out the stor7 that he or she is working on for the da7-5he stor7 or artic(e must a(so )e su)mitted to the editor at a speciedtime- oreover! the editor can easi(7 pu(( out a reporter from one )eatand ask him or her to cover another )eat! if the need arises-5his is not the case for petitioner- '(though petitioner had a week(7

dead(ine to meet! she was not prec(uded from su)mitting her co(umnahead of time or from su)mitting co(umns to )e pu)(ished at a (atertime- ore important(7! respondents did not dictate upon petitioner thesu)ect matter of her co(umns! )ut on(7 imposed the genera( guide(inethat the artic(e shou(d conform to the standards of the newspaper andthe genera( tone of the particu(ar section-here a person who works for another performs his o) more or (ess athis own p(easure! in the manner he sees t! not su)ect to denite hoursor conditions of work! and is compensated according to the resu(t of hise?orts and not the amount thereof! no emp(o7er+emp(o7ee re(ationshipe


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appeared on te(evision! and sounded on radio were outside 'BS+CBN>scontro(-"5hus9

e nd that 'BS+CBN was not invo(ved in the actua(performance that produced the nished product of SON'>swork- 'BS+CBN did not instruct SON' how to perform his o)-'BS+CBN mere(7 reserved the right to modif7 the programformat and airtime schedu(e Tfor more e?ective programming-T

'BS+CBN>s so(e concern was the ua(it7 of the shows and theirstanding in the ratings- C(ear(7! 'BS+CBN did not es power over the means and methods of theperformance of his work- '(though 'BS+CBN did have the optionnot to )roadcast SON'>s show! 'BS+CBN was sti(( o)(igated topa7 SON'>s ta(ent fees--- 5hus! even if 'BS+CBN wascomp(ete(7 dissatised with the means and methods of SON'>sperformance of his work! or even with the ua(it7 or product ofhis work! 'BS+CBN cou(d not dismiss or even discip(ine SON'-'(( that 'BS+CBN cou(d do is not to )roadcast SON'>s show )ut'BS+CBN must sti(( pa7 his ta(ent fees in fu((-C(ear(7! 'BS+CBN>s right not to )roadcast SON'>s show!

)urdened as it was )7 the o)(igation to continue pa7ing in fu((SON'>s ta(ent fees! did not amount to contro( over the meansand methods of the performance of SON'>s work- 'BS+CBNcou(d not terminate or discip(ine SON' even if the means andmethods of performance of his work + how he de(ivered his (inesand appeared on te(evision + did not meet 'BS+CBN>s approva(-5his proves that 'BS+CBN>s contro( was (imited on(7 to the resu(tof SON'>s work! whether to )roadcast the na( product or not-In either case! 'BS+CBN must sti(( pa7 SON'>s ta(ent fees in fu((unti( the es so(e concern was for SON' to disp(a7 his ta(ent

during the airing of the programs-' radio )roadcast specia(ist who works under minima(supervision is an independent contractor- SON'>s work aste(evision and radio program host reuired specia( ski((s andta(ent! which SON' admitted(7 possesses- 5he records do notshow that 'BS+CBN es capacit7 to accommodate the same- 5his fact! we

note! was not uniue to petitioner>s co(umn- It is a rea(it7 in thenewspaper )usiness that space constraints often dictate the (ength ofartic(es and co(umns! even those that regu(ar(7 appear therein-6urthermore! respondent .DI did not supp(7 petitioner with the too(s andinstrumenta(ities she needed to perform her work- .etitioner on(7needed her ta(ent and ski(( to come up with a co(umn ever7 week- 'ssuch! she had a(( the too(s she needed to perform her work-Considering that respondent .DI was not petitioner>s emp(o7er! it cannot)e he(d gui(t7 of i((ega( dismissa(-"HERE$ORE! the foregoing premises considered! the .etitionis %ISMISSE%- 5he Decision and *eso(ution of the Court of 'ppea(s inC'+,-*- S. No- "/0" are here)7 A$$IRME%-SO OR%ERE%-

G.R. No. 179652 r:; 6, 2012
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PEOP$E


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the &LE to deter0ine the e:istence of an e0plo!er6e0plo!ee relationship, theCourt held that the deter0ination of the e:istence of an e0plo!er6e0plo!eerelationship is still pri0aril! within the power of the /LRC, that an! finding 3! the&LE is 0erel! preli0inar!This conclusion 0ust 3e revisited/o li0itation in the law was placed upon the power of the &LE to deter0ine thee:istence of an e0plo!er6e0plo!ee relationship /o procedure was laid down

where the &LE would onl! 0aFe a preli0inar! finding, that the power waspri0aril! held 3! the /LRC The law did not sa! that the &LE would first seeF the/LRC9s deter0ination of the e:istence of an e0plo!er6e0plo!ee relationship, orthat should the e:istence of the e0plo!er6e0plo!ee relationship 3e disputed, the&LE would refer the 0atter to the /LRC The &LE 0ust have the power todeter0ine whether or not an e0plo!er6e0plo!ee relationship e:ists, and fro0there to decide whether or not to issue co0pliance orders in accordance with Art'#2*3+ of the La3or Code, as a0ended 3! RA %%1$The &LE, in deter0ining the e:istence of an e0plo!er6e0plo!ee relationship,has a read! set of guidelines to follow, the sa0e guide the courts the0selves useThe ele0ents to deter0ine the e:istence of an e0plo!0ent relationship are; *'+the selection and engage0ent of the e0plo!eeJ *#+ the pa!0ent of wagesJ *1+ thepower of dis0issalJ *4+ the e0plo!er9s power to control the e0plo!ee9sconduct"The use of this test is not solel! li0ited to the /LRC The &LE.ecretar!, or his or her representatives, can utiliIe the sa0e test, even in thecourse of inspection, 0aFing use of the sa0e evidence that would have 3eenpresented 3efore the /LRCThe deter0ination of the e:istence of an e0plo!er6e0plo!ee relationship 3! the&LE 0ust 3e respected The e:panded visitorial and enforce0ent power of the&LE granted 3! RA %%1$ would 3e rendered nugator! if the alleged e0plo!ercould, 3! the si0ple e:pedient of disputing the e0plo!er6e0plo!ee relationship,force the referral of the 0atter to the /LRC The Court issued the declaration thatat least a pri0a facie showing of the a3sence of an e0plo!er6e0plo!eerelationship 3e 0ade to oust the &LE of @urisdiction But it is precisel! the &LEthat will 3e faced with that evidence, and it is the &LE that will weigh it, to see ifthe sa0e does successfull! refute the e:istence of an e0plo!er6e0plo!eerelationship7f the &LE 0aFes a finding that there is an e:isting e0plo!er6e0plo!eerelationship, it taFes cogniIance of the 0atter, to the e:clusion of the /LRC The

&LE would have no @urisdiction onl! if the e0plo!er6e0plo!ee relationship hasalread! 3een ter0inated, or it appears, upon review, that no e0plo!er6e0plo!eerelationship e:isted in the first placeThe Court, in li0iting the power of the &LE, gave the rationale that such li0itationwould eli0inate the prospect of co0peting conclusions 3etween the &LE and the/LRC The prospect of co0peting conclusions could @ust as well have 3een

eli0inated 3! according respect to the &LE findings, to the e:clusion of the/LRC, and this He 3elieve is the 0ore prudent course of action to taFeThis is not to sa! that the deter0ination 3! the &LE is 3e!ond Duestion orreview1avvphi1.uffice it to sa!, there are @udicial re0edies such as a petition forcertiorari under Rule )5 that 0a! 3e availed of, should a part! wish to dispute thefindings of the &LE7t 0ust also 3e re0e03ered that the power of the &LE to deter0ine the

e:istence of an e0plo!er6e0plo!ee relationship need not necessaril! result in anaffir0ative finding The &LE 0a! well 0aFe the deter0ination that no e0plo!er6e0plo!ee relationship e:ists, thus divesting itself of @urisdiction over the case 7t0ust not 3e precluded fro0 3eing a3le to reach its own conclusions, not 3! theparties, and certainl! not 3! this CourtUnder Art '#2*3+ of the La3or Code, as a0ended 3! RA %%1$, the &LE is full!e0powered to 0aFe a deter0ination as to the e:istence of an e0plo!er6e0plo!eerelationship in the e:ercise of its visitorial and enforce0ent power, su3@ect to@udicial review, not review 3! the /LRCThere is a view that despite Art '#2*3+ of the La3or Code, as a0ended 3! RA%%1$, there is still a threshold a0ount set 3! Arts '#" and #'% of the La3or Codewhen 0one! clai0s are involved, ie, that if it is for PhP 5,$$$ and 3elow, the@urisdiction is with the regional director of the &LE, under Art '#", and if thea0ount involved e:ceeds PhP 5,$$$, the @urisdiction is with the la3or ar3iter, underArt #'% The view states that despite the wording of Art '#2*3+, this would onl!appl! in the course of regular inspections undertaFen 3! the &LE, asdifferentiated fro0 cases under Arts '#" and #'%, which originate fro0 co0plaintsThere are several cases, however, where the Court has ruled that Art '#2*3+ has3een a0ended to e:pand the powers of the &LE .ecretar! and his dul!authoriIed representatives 3! RA %%1$ 7n these cases, the Court resolved that the&LE had the @urisdiction, despite the a0ount of the 0one! clai0s involvedurther0ore, in these cases, the inspection held 3! the &LE regional directorwas pro0pted specificall! 3! a co0plaint Therefore, the initiation of a casethrough a co0plaint does not divest the &LE .ecretar! or his dul! authoriIedrepresentative of @urisdiction under Art '#2*3+To recapitulate, if a co0plaint is 3rought 3efore the &LE to give effect to the la3orstandards provisions of the La3or Code or other la3or legislation, and there is afinding 3! the &LE that there is an e:isting e0plo!er6e0plo!ee relationship, the&LE e:ercises @urisdiction to the e:clusion of the /LRC 7f the &LE finds that

there is no e0plo!er6e0plo!ee relationship, the @urisdiction is properl! with the/LRC 7f a co0plaint is filed with the &LE, and it is acco0panied 3! a clai0 forreinstate0ent, the @urisdiction is properl! with the La3or Ar3iter, under Art #'%*1+ ofthe La3or Code, which provides that the La3or Ar3iter has original and e:clusive@urisdiction over those cases involving wages, rates of pa!, hours of worF, andother ter0s and conditions of e0plo!0ent, if acco0panied 3! a clai0 forreinstate0ent 7f a co0plaint is filed with the /LRC, and there is still an e:isting
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8n ece2ber "*, "**, respondent sub2itted her explanation !"and clai2ed that

what she ordered for lunch was a buddy pac5 and an extra 2o>os. Respondent explained

that the delivery staff brought a wrong receipt as it did not correspond to the food that she

actually ordered. Respondent added that she as5ed the delivery staff to alter the receipt

thin5ing that he could >ust write the correct ite2s ordered and sign the said receipt to

authenticate the alterations 2ade thereon. he further stated that there was no intention on

her part to co22it fraud since she was >ust avoiding the hassle of waiting for a replace2ent

receipt.

Petitioner then referred respondent=s explanation to the )ssistant $anager of the

ha5ey=s Pi77a Parlor which issued the sub>ect receipt. ect

receipts. Respondent asserted that she did not notice the alteration in the $conald=s

receipt since she did not give close attention to it. he further stated that her sister=s

driver2essenger 2ay have caused the alteration, but she could not be certain about

it. Fith regard to the ha5ey=s receipt, respondent 2aintained that what she ordered was a

buddy pac5 with extra 2o>os.

8n 0anuary "', "**9, petitioner sent respondent a 2e2orandu2 !"9#inviting her to

a hearing and for2al investigation on 0anuary "@, "**9, to give her an opportunity to

explain the issues against her. Respondent was also advised that she was free to bring

along a counsel of her choice.

8n 0anuary "@, "**9, respondent appeared at the hearing. he was re2inded of

her right to have her own lawyer present at the proceedings of the investigation and was

extensively (uestioned regarding the alterations on the $conald=s and ha5ey=s Pi77aParlor receipts which she sub2itted in support of her clai2 for rei2burse2ent of 2eal

expenses.!":#

8n 0anuary "*, "**9, petitioner notified !"@#respondent that the continuation of the

investigation was set on 0anuary '%, "**9 for the presentation of the delivery personnel of

ha5ey=s Pi77a Parlor. Petitioner also infor2ed respondent of a third receipt with an

alteration which she sub2itted in support of her clai2 for rei2burse2ent for 2eal

allowance + ha5ey=s Pi77a Parlor Receipt -o. "'@ dated 0uly "*, "**,!"/#which

contained an annotation w C) 9&H only I P"%&.9&. uch annotation 2eant that

respondent was clai2ing only half of the total a2ount indicated in the receipt as the said

2eal was supposedly shared with another e2ployee, Cora7on ). arona. aid e2ployee,

however, denied that she ordered and shared the food covered by the receipt in (uestion. !"*#

ect receipt, it was discovered that said

receipt was issued for food purchased on 0uly "@, "** and not for 0uly "*, "**, !'as

clai2ed by respondent.

Respondent did not attend the 0anuary '%, "**9 hearing, citing her doctor=s

advice!'"#to rest since she was suffering fro2 severe 2ixed 2igraine and 2uscle

contraction headache. Respondent also co2plained of the alleged partiality of the

investigating co22ittee against her.

)t the said hearing, the delivery personnel of ha5ey=s Pi77a Parlor was

presented. De 2aintained that what he delivered to respondent was her order for three

Bunch of 1unch pac5s and not one order of Buddy Pac5 with extra 2o>os .!''#

8n 0anuary ', "**9, respondent filed an application for leave !'%#fro2 0anuary

"%, "**9 up to ;ebruary %, "**9. )gain on 0anuary %", "**9, respondent filed another

application for leave!'#for the period ;ebruary :, "**9 to ;ebruary ', "**9.

8n ;ebruary '%, "**9, petitioner sent another notice !'9# to respondent infor2ing

her of the re+setting of the continuation of the for2al investigation on $arch "9,

"**9. Respondent was also advised that the said scheduled hearing was her last opportunity

to fully explain her side, and that she had the option of bringing a lawyer at the hearing.

Respondent did not attend the $arch "9, "**9 hearing. Petitioner then concluded

the for2al investigation.

Thereafter, in a letter!':#dated )pril , "**9, petitioner dis2issed respondent for

fraudulently sub2itting ta2pered andor altered receipts in support of her petty cash

rei2burse2ents in gross violation of the co2pany=s rules and regulations.

8n 0une :, "**9, respondent filed a co2plaint!'@# for illegal dis2issal, non+

pay2ent of service incentive leave, sic5 leave and vacation leave with prayer for

reinstate2ent, pay2ent of bac5wages as well as for da2ages and attorney=s fees, against

petitioner with the -1RC, doc5eted as -1RC+-CR Case -o. &&+&:+&&&&+*9. )fter the

2andatory conciliation proceedings failed, the parties were re(uired to sub2it their

respective position papers.
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?n her position paper, respondent averred that, assu2ing arguendothat she altered

the receipts in (uestion, dis2issal was too harsh a penalty for her considering that6 3a4 it

was her first offense in her * K years of serviceA 3b4 the offense i2puted was 2inor, as only

the dates and ite2s, not the a2ounts, were altered or the a2ounts involved were very

2ini2alA 3c4 the co2pany did not suffer 2aterial da2age, as she was really entitled to

the P"9&.&& allowance even without acco2panying receiptA and 3d4 respondent acted

without 2alice, as she really rendered 3unpaid4 overti2e wor5 on those three dates.

!'/#

8n the other hand, petitioner 2aintained in its position paper that respondent was

dis2issed for cause, that of ta2pering official receipts to substantiate her clai2 for 32eal4

rei2burse2ent which reflects her (uestionable integrity and honesty. !'*# Petitioner added

that in ter2inating the services of an e2ployee for breach of trust, it is enough that the

2isconduct of the e2ployee tends to pre>udice the e2ployer=s interest since it would be

unreasonable to re(uire the e2ployer to wait until he is 2aterially in>ured before re2oving

the cause of the i2pending evil. !%

?n a ecision!%"#dated 0une "@, "**:, 1abor )rbiter Ra2on alentin C. Reyes

ruled in favor of petitioner and dis2issed respondent=s co2plaint for lac5 of 2erit. The

relevant portions of the ecision read6

!T#he ter2ination of co2plainant is clearly valid.

Respondent !herein petitioner# co2plied with the notice

re(uire2ent strictly to the letter. Co2plainant !herein respondent# was

given the first notice which the upre2e Court a2ply ter2ed in the

foregoing >urisprudence as the proper charge. This 8ffice further

notes that 2ore than one notice was given to the co2plainant

!respondent#. ?n fact, co2plainant !respondent# was repeatedly

directed to answer the charges against her. )s she in fact did.

x x x x

?t was only after the evidence against co2plainant

!respondent# was received and her fraudulent participation 2orally

ascertained that respondent !petitioner# finally decided to ter2inate

his 3sic4services. )nd after arriving at a conclusion, co2plainant!respondent# was conse(uently infor2ed of her ter2ination which was

the sanction i2posed on her.

)gain, following the yardstic5 laid down by the Tiu doctrine

cited above, the procedure in ter2inating co2plainant !respondent# was

definitely followed. Der ter2ination is therefore valied 3sic4 and 2ust

be upheld for all intents and purposes.

x x x x

Going now to the substantive aspect of co2plainant=s

!respondent=s# ter2ination, this 8ffice li5ewise finds that there existed

>ust cause to ter2inate her services.

Co2plainant !Respondent# was ter2inated for repeatedly

sub2itting fraudulent ite2s of expense, clearly in violation of

respondent=s !petitioner=s# co2pany rules and regulations which

conse(uently resulted in loss of trust and confidence.!%'#


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This line of reasoning is absurd, if not utterly

dangerous. )d2itting the co22ission of the act but at the sa2e breath

denying any fraudulent intent is inconsistent. udice or loss to the co2pany since the a2ounts were actually

due her as part of her co2pensation for overti2e. 8n the other hand,

petitioner !respondent# sufficiently explained that in sub2itting the

falsified receipts, she was acting on the belief that the said re(uire2ent

was 2erely for record+5eeping purposes for she was already entitled to

the 2oney e(uivalent thereof as consideration for services already

rendered. Dence, the presence of good faith on the part of petitioner

!respondent#, her long years of exe2plary service and the absence of

loss on the part of the e2ployer, ta5en together, >ustify the application

of Lap vs. -1RC, supra. ?n the aforecited case, the upre2e Court

considered the e2ployee=s long years of unble2ished service, the

return of the funds borrowed fro2 the e2ployer and the e2ployee=s

lac5 of intent to deviate fro2 the rules, as circu2stances >ustifying theaward of separation pay, in lieu of reinstate2ent. Considering

however, that there was no evidence of strained relations between the

parties in the case at bench precluding a har2onious wor5ing

relationship should reinstate2ent be decreed, then the reinstate2ent of

petitioner !respondent# is proper. Fith respect to the allegation of

dishonesty on the part of private respondent, the Court considers the

igno2iny and 2ental torture suffered by petitioner throughout the

proceedings, in view of her high position with respondent co2pany, to

be practically punish2ent for said 2isdeed. 3Philippine )irlines vs.

Philippine )ir 1ines E2ployees )ssociation, supra.4

;inally, the private respondent !petitioner# raised in issue the

ti2eliness of the filing of the herein petition. Based on their

co2putation, the petition was only filed four days after !the# sixty+day

period prescribed in the ection , Rule :9 of the Rules of

Court. Considering however, that >urisprudence is replete with

instances where the upre2e Court has relaxed the technical rules in

the exercise of e(uity >urisdiction when there are strong considerations

of substantial >ustice that are 2anifest in the petition, 3oriano vs.

Court of )ppeals, ''' CR) 99, 99% !"**%#A 8rata vs. ?nter2ediate

)ppellate Court, "/9 CR) "/, "9' !"**A 1aginlin vs. For52en=s

Co2pensation Co22ission, "9* CR) *", *: !"*//#A and, errano vs.

Court of )ppeals, "%* CR) "@*, "/: !"*/9#4. 8ur finding that there

was grave abuse of discretion in the issuance of the assailed resolutions

of public respondent 2erit the allowance of the herein petition.

FDERE;8RE, the petition is GRANTEDand the

Resolutions, dated )pril ", "**/ and 0une "*, "**/, both issued by

public respondent -1RC, are hereby SET ASIDE. Private respondent!Petitioner# Coca Cola Export Corporation is hereby directed to

i22ediately reinstate petitioner !respondent# to her for2er position, if

possible, otherwise, to a substantially e(uivalent position without loss

of seniority rights and with full bac5wages, based on her last 2onthly

salary, to be co2puted fro2 the date of her dis2issal fro2 the service
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up to the date of finality of this decision, without any (ualifications or

deductions. -o costs.!%:#

?ts 2otion for reconsideration having been denied by the Court of )ppeals in its

second i2pugned Resolution dated )ugust *, '&&", petitioner is now before us viathe

present recourse with the following assign2ent o f errors6

?

BL BE?-G T88 1?BER)1 ?- ;)8R 8; TDE REP8-E-T,

TDE C8


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EC. . When and where petition filed. I The petition shall

be filed not later than sixty 3:&4 days fro2 notice of the >udg2ent,

order or resolution. I$ +& & )#t"#$ f#% %+#$"'%&t"#$ #% $*

t%"&( " t")( f"(', *hth% +h )#t"#$ " %7"%' #% $#t, th

"t 80 '& !%"#' h&(( +#$t' f%#) $#t"+ #f th '$"&( #f

th &"' )#t"#$.

The petition shall be filed in the upre2e Court or, if itrelates to the acts or o2issions of a lower court or of a corporation,

board, officer or person, in the Regional Trial Court exercising

>urisdiction over the territorial area as defined by the upre2e Court. ?t

2ay also be filed in the Court of )ppeals whether or not the sa2e is in

the aid of its appellate >urisdiction, or in the andiganbayan if it is in

aid of its appellate >urisdiction. ?f it involves the acts or o2issions of a

(uasi+>udicial agency, unless otherwise provided by law or these rules,

the petition shall be filed in and cogni7able only by the Court of

)ppeals.

-o extension of ti2e to file the petition shall be granted

except for co2pelling reason and in no case exceeding fifteen 3"94

days. 3E2phasis supplied.4

;ro2 the foregoing, it is clear that the :&+day period to file a petition

for certiorarishould be rec5oned fro2 the date of receipt of the notice of the denial of the

2otion for reconsideration or new trial, if one was filed.

?n a nu2ber of cases,!%/#this Court applied retroactively Circular -o. 9:+'&&&. Fe

ruled that a petition for certiorari which had been filed past the :&+day period under

ection of Rule :9, as a2ended by Circular -o. %*+*/, was dee2ed seasonably filed

provided it was filed within the :&+day period counted fro2 the date of receipt of the not ice

of the denial of the 2otion for reconsideration or new trial.

?nstructive on this point is the discussion of the Court inNarzoles v. National Labor

Relations Commission,!%*#viz6

The Court has observed that Circular -o. %*+*/ hasgenerated tre2endous confusion resulting in the dis2issal of nu2erous

cases for late filing. This 2ay have been because, historically, i.e.,

even before the "**@ revision to the Rules of Civil Procedure, a party

had a fresh period fro2 receipt of the order denying the 2otion for

reconsideration to file a petition for certiorari. Fere it not for the

a2end2ents brought about by Circular -o. %*+*/, the cases so

dis2issed would have been resolved on the 2erits. Dence, the Court

dee2ed it wise to revert to the old rule allowing a party a fresh :&+day

period fro2 notice of the denial of the 2otion for reconsideration to

file a petition for certiorari. Earlier this year, the Court resolved, in

).$. -o. &&+'+&%+C, to further a2end ection , Rule :9 x x x.

x x x x

The latest a2end2ents too5 effect on epte2ber ", '&&&,

following its publication in the $anila Bulletin on )ugust , '&&& and

in the Philippine aily ?n(uirer on )ugust @, '&&&, two newspapers of

general circulation.

?n view of its purpose, the Resolution further a2ending

ection , Rule :9 can only be described as curative in nature, and the

principles governing curative sta tutes are applicable.

Curative statutes are enacted to cure defects in a prior law or

to validate legal proceedings which would otherwise be void for want

of confor2ity with certain legal re(uire2ents. They are intended to

supply defects, abridge superfluities and curb certain evils. They are

intended to enable persons to carry into effect that which they have

designed or intended, but has failed of expected legal conse(uence by

reason of so2e statutory disability or irregularity in their own

action. They 2a5e valid that which, before the enact2ent of the statute

was invalid. Their purpose is to give validity to acts done that would

have been invalid under existing laws, as if existing laws have been

co2plied with. Curative statutes, therefore, by their very essence, are

retroactive.

)ccordingly, while the Resolution states that the sa2e shall

ta5e effect on epte2ber ", '&&&, following its publication in two 3'4

newspapers of general circulation, its retroactive application cannot be

denied. ?n short, the filing of the petition for certiorari in this Court on

"@ ece2ber "**/ is dee2ed to be ti2ely, the sa2e having been 2ade

within the :&+day period provided under the curative Resolution. Fe

reach this conclusion bearing in 2ind that the substantive aspects ofthis case involves the rights and benefits, even the livelihood, of

petitioner+e2ployees.

Given the above, respondent had a fresh :&+day period fro2 )ugust "&, "**/, the

date she received a copy of the -1RC Resolution dated 0une "*, "**/, denying her 2otion
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for reconsideration. )ccordingly, respondent had :& days fro2 )ugust "&, "**/ within

which to file the petition for certiorari. Thus, when respondent filed the petition with the

Court of )ppeals on 8ctober ', "**/, said petition was seasonably filed within the

regle2entary period provided by the latest a2end2ent to ection , Rule :9 of the "**@

Rules of Civil Procedure.

Fe now proceed to the 2ain issue for resolution in this case, which is whether the

Court of )ppeals co22itted a reversible error in reversing and setting aside theResolutions dated )pril ", "**/ and 0une "*, "**/ of the -1RC.

)ccording to the petitioner, respondent=s repeated sub2ission of altered or

ta2pered receipts to support her clai2 for rei2burse2ent constitutes a betrayal of the

e2ployer=s trust and confidence and a serious 2isconduct, thus, giving cause for the

ter2ination of her e2ploy2ent with petitioner.

Petitioner also (uestions the Court of )ppeals= finding that the ter2ination of

respondent was too harsh. Petitioner 2aintains that respondent had clearly been

established to have authored and caused the sub2ission of not only one but three different

receipts which she intentionally altered to >ustify her clai2ed rei2burse2ent, thus

warranting her dis2issal fro2 the co2pany.

Fe are not convinced.

The 1abor Code 2andates that before an e2ployer 2ay validly dis2iss an e2ployee

fro2 the service, the re(uire2ent of substantial and procedural due process 2ust be

co2plied with. ust or authori7ed causes. )rticle '/' of the

1abor Code enu2erates the >ust causes for the ter2ination of e2ploy2ent, thus6

)RT. '/'. Termination by employer. + )n e2ployer 2ay

ter2inate an e2ploy2ent for any of the following causes6

3a4 erious 2isconduct or willful disobedience by the

e2ployee of the lawful orders of his e2ployer or

representative in connection with his wor5A

3b4 Gross and habitual neglect by the e2ployee of his dutiesA

3c4 ;raud or willful breach by the e2ployee of the trust

reposed in hi2 by his e2ployer or duly authori7ed

representativeA

3d4 Co22ission of a cri2e or offense by the e2ployee against

the person of his e2ployer or any i22ediate 2e2ber of his

fa2ily or his duly authori7ed representativeA and

3e4 8ther causes analogous to the foregoing.

?n ter2ination cases, the burden of proof rests on the e2ployer to show that thedis2issal was for >ust cause. 8therwise, an e2ployee who is illegally dis2issed shall be

entitled to reinstate2ent without loss of seniority rights and other privileges and to his full

bac5wages, inclusive of allowances, and to his other benefits or their 2onetary e(uivalent

co2puted fro2 the ti2e his co2pensation was withheld fro2 hi2 up to the ti2e of his

actual reinstate2ent.!

)fter exa2ining the records of the case, this Court finds that respondent=s

dis2issal fro2 e2ploy2ent was not grounded on any of the >ust causes enu2erated under

)rticle '/' of the 1abor Code.

)t the outset, it is i2portant to note that the ter2 trust and confidence is

restricted to 2anagerial e2ployees. !"# ?n Samson v. National Labor Relations Commission ,!'#the Court, citing ection '3b4, Rule ?, Boo5 ??? of the 82nibus Rules ?2ple2enting the

1abor Code, enu2erated the conditions for one to be properly considered a 2anagerial

e2ployee6

3"4 Their pri2ary duty consists of the 2anage2ent of the

establish2ent in which they are e2ployed or of a depart2ent or sub+

division thereofA

3'4 They custo2arily and regularly direct the wor5 of two or

2ore e2ployees thereinA !and#

3%4 They have the authority to hire or fire other e2ployees of

lower ran5A or their suggestions and reco22endations as to the hiring

and firing and as to the pro2otion or any other change of status of other

e2ployees are given particular weight.

?n the instant case, respondent was the enior ;inancial )ccountant with the 0ob

escription of a ;inancial Pro>ect )nalyst. Respondent, a2ong others, provides support

in the for2 of financial analyses and evaluation of alternative strategies or action plans to

assist 2anage2ent in strategic and operational decision+2a5ing, x x x liaises with the

Bottler to co2ply with Corporate Bottler financial reporting re(uire2ents and to ensure
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Bottler=s plans are aligned with TCCEC=s, x x x and assists 2anage2ent on various

initiatives on ad hoc basis.!%#

?nNoom v. National Labor Relations Commission,!#this Court set the

guidelines for the application of the doctrine of loss of confidence I

3a4 1oss of confidence should not be si2ulatedA

3b4 ?t should not be used as a subterfuge for causes which are

i2proper, illegal or un>ustifiedA

3c4 ?t 2ay not be arbitrarily asserted in the face of overwhel2ing

evidence to the contraryA and

3d4 ?t 2ust be genuine, not a 2ere afterthought to >ustify earlier

action ta5en in bad faith.

?n the instant case, the basis for ter2inating the e2ploy2ent of respondent was

for gross violation of the co2pany=s rules and regulations, as specified in the ter2ination

letter dated )pril , "**/, to wit6

Based on the facts gathered during the investigation vis!avis3sic4 the

contradictory explanations you have given when you testified, the

testi2ony of the person who delivered the ha5ey=s products you

ordered as well as $conald=s and ha5ey=s certifications to the effect

that the ite2s and the dates appearing on the receiptinvoices issued to

you were the actual ite2s and dates of said invoices and that the

alteration on the face of said invoice were not done at their respective

establish2ents or by any of their e2ployees, 2orally convinced us that

you were the one who caused such alterations for personal gain. Lou

have thereby 5nowingly, willingly, deliberately and fraudulently

sub2itted ta2pered andor altered receipts to support your petty cash

rei2burse2ents in gross violation of the co2pany=s rules and

regulations which punishes with i22ediate dis2issal the fraudulent

sub2ission of any ite2 of expense 3Rule ??, -o "93d4. !9#

Evidently, no 2ention was 2ade regarding petitioner=s alleged loss of trust and

confidence in respondent. -either was there any explanation nor discussion of the alleged

sensitive and delicate position of respondent re(uiring the ut2ost trust of petitioner.

?t bears e2phasi7ing that the right of an e2ployer to dis2iss its e2ployees on the

ground of loss of trust and confidence 2ust not be exercised arbitrarily. ;or loss of trust

and confidence to be a valid ground for dis2issal, it 2ust be substantial and founded on

clearly established facts. 1oss of confidence 2ust not be used as a subterfuge for causes

which are i2proper, illegal or un>ustifiedA it 2ust be genuine, not a 2ere afterthought, to

>ustify earlier action ta5en in bad faith. Because of its sub>ective nature, this Court has

been very scrutini7ing in cases of dis2issal based on loss of trust and confidence because

the sa2e can easily be concocted by an abusive e2ployer.

!:#

Thus, when the breach oftrust or loss of confidence theori7ed upon is not borne by clearly established facts, as in the

instant case, such dis2issal on the ground of loss and confidence cannot be countenanced.

?n the instant case, it was only in the Reply to Respondent=s Co22ent !@#dated

8ctober "", '&&', that petitioner 2ade 2ention of another ground for the dis2issal of

respondent, that of serious 2isconduct, when she sub2itted altered or ta2pered receipts to

support her clai2 for rei2burse2ent. uch allegation appears to be a 2ere afterthought,

being tardily raised only in the Reply.

?n"arival Trading# $nc. v. National Labor Relations Commission,!/#we held,

thus6

$isconduct has been defined as i2proper or wrong

conduct. ?t is the transgression of so2e established and definite rule of

action, a forbidden act, a dereliction of duty, willful character, and

i2plies wrongful intent and not 2ere error of >udg2ent. The

2isconduct to be serious 2ust be of such grave and aggravated

character and not 2erely trivial and uni2portant. uch 2isconduct,

however serious, 2ust nevertheless be in connection with the

e2ployee=s wor5 to constitute >ust cause for his separation. Thus, for

2isconduct or i2proper behavior to be a >ust cause for dis2issal, 3a4 it

2ust be seriousA 3b4 2ust relate to the perfor2ance of the e2ployee=s

dutiesA and 3c4 2ust show that the e2ployee has beco2e unfit to

continue wor5ing for the e2ployer. ?ndeed, an e2ployer 2ay not be

co2pelled to continue to e2ploy such person whose continuance in the

service would be patently ini2ical to his e2ployer=s business .!*#

?n this light, the alleged infractions of respondent could hardly be considered serious2isconduct. ?t is well to stress that in order to constitute serious 2isconduct which will

warrant the dis2issal of an e2ployee, it is not sufficient that the act or conduct co2plained

of has violated so2e established rules or policies. ?t is e(ually i2portant and re(uired that

the act or conduct 2ust have been done with wrongful intent. uch is, however, lac5ing in

the instant case.
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Fhile this Court does not condone respondent=s act of sub2itting altered andor

ta2pered receipts to support her clai2 for rei2burse2ent, we nevertheless agree with the

finding of the Court of )ppeals that, under the attendant facts, the dis2issal 2eted out on

respondent appears to be too harsh a penalty.

The e2ployer=s right to conduct the affairs of its business, according to its own

discretion and >udg2ent, is well+recogni7ed. )n e2ployer has a free reign and en>oys wide

latitude of discretion to regulate all aspects of e2ploy2ent, including the prerogative to

instill discipline in its e2ployees and to i2pose penalties, including dis2issal, upon erring

e2ployees. This is a 2anage2ent prerogative, where the free will of 2anage2ent to

conduct its own affairs to achieve its purpose ta5es for2. The only criterion to guide the

exercise of its 2anage2ent prerogative is that the policies, rules and regulations on wor5+

related activities of the e2ployees 2ust always be fair and reasonable and the

corresponding penalties, when prescribed, co22ensurate to the offense involved and to the

degree of the infraction.!9

)s respondent=s e2ployer, petitioner has the right to regulate, according to its

discretion and best >udg2ent, wor5 assign2ents, wor5 2ethods, wor5 supervision, and

wor5 regulations, including the hiring, firing and discipline of its e2ployees. ?ndeed,

petitioner has the 2anage2ent prerogative to discipline its e2ployees, li5e herein

respondent, and to i2pose appropriate penalties on erring wor5ers pursuant to co2pany

rules and regulations.!9"# This Court upholds these 2anage2ent prerogatives so long as

they are exercised in good faith for the advance2ent of the e2ployer=s interest and not for

the purpose of defeating or circu2venting the rights of the e2ployees under special laws

and valid agree2ents.!9'#

?n the instant case, petitioner alleged that under its rules and regulations,

respondent=s sub2ission of fraudulent ite2s of expense is punishable by

dis2issal. Dowever, petitioner=s rules cannot preclude the tate fro2 in(uiring whether the

strict and rigid application or interpretation thereof would be harsh to the e2ployee. Even

when an e2ployee is found to have transgressed the e2ployer=s rules, in the actual

i2position of penalties upon the erring e2ployee, due consideration 2ust still be given to

his length of service and the nu2ber of violations co22itted during his e2ploy.!9%# Respondent had no previous record in her *K years of serviceA this would have been her

first offense. Respondent had also been a recipient of various co22endations attesting to

her co2petence and diligence in the perfor2ance of her duties, not only fro2 petitioner,

but also fro2 petitioner=s counterparts in Poland !9#and Thailand.!99# Respondent alsocountered that she acted in good faith and with no wrongful intent when she sub2itted the

receipts in support of her clai2 for rei2burse2ent of 2eal allowance. )ccording to

respondent, only the dates or ite2s were altered on the receipts. he did not clai2 2ore

than what was allowed as 2eal expense for the days that she rendered overti2e wor5. he

believed that the sub2ission of receipts was si2ply for records+5eeping, since she actually

rendered overti2e wor5 on the dates that she clai2ed for 2eal allowance. )ll told, this

Court holds that the penalty of dis2issal i2posed on respondent is unduly oppressive and

disproportionate to the infraction which she co22itted. ) lighter penalty would have been

2ore >ust.

)s correctly held by the Court of )ppeals, by 2andate of the law itself, the

provisions of the 1abor Code are to be construed liberally in favor of labor. Thus,

in%u&itsu Computer 'roducts Corporation of the 'hils. v. Court of (ppeals,!9:#we held6

The Court is wont to reiterate that while an e2ployer has its

own interest to protect, and pursuant thereto, it 2ay ter2inate a

2anagerial e2ployee for a >ust cause, such prerogative to dis2iss or

lay+off an e2ployee 2ust be exercised without abuse of discretion. ?ts

i2ple2entation should be te2pered with co2passion and

understanding. The e2ployer should bear in 2ind that, in the

execution of the said prerogative, what is at sta5e is not only the

e2ployee=s position, but his very livelihood. The Constitution does not

condone wrongdoing by the e2ployeeA nevertheless, it urges

2oderation of the sanction that 2ay be applied to hi2. Fhere a

penalty less punitive would suffice, whatever 2issteps 2ay have been

co22itted by the wor5er ought not be visited with a conse(uence so

severe as dis2issal fro2 e2ploy2ent. ?ndeed, the consistent rule is

that if doubts exist between the evidence presented by the e2ployer

and the e2ployee, the scales of >ustice 2ust be tilted in favor of the

latter. The e2ployer 2ust affir2atively show rationally ade(uate

evidence that the dis2issal was for >ustifiable cause.


43/105

public respondent -1RC, are hereby SET ASIDE. !Petitioner# Coca

Cola Export Corporation is hereby directed to i22ediately reinstate

!respondent# to her for2er position, if possible, otherwise, to a

substantially e(uivalent position without loss of seniority rights and

with full bac5wages, based on her last 2onthly salary, to be co2puted

fro2 the date of her dis2issal fro2 the service up to the date of finality

of this decision, without any (ualifications or deductions. -o costs.!9@#

?n line with )rticle '@* of the 1abor Code and prevailing >urisprudence, !9/#the award

of bac5wages should be 2odified in the sense that bac5wages should be co2puted fro2 the

ti2e the co2pensation was not paid up to the ti2e of reinstate2ent.

ERE;ORE, the petition is hereby DENIED. The ecision dated $ay %&,

'&&" and subse(uent Resolution dated )ugust *, '&&" of the Court of )ppeals are

herebyA;;IR


44/105

n the sa0e da!, Endico filed an application for leave of a3sence''effective '%une to # ul! '"""

7n his answer'#dated ') une '""", Endico denied that there was serious0isconduct and 0is0anage0ent in his area as far as the deplo!0ent of0erchandisers was concerned Endico said that he properl! coordinated all hisactions with Acuros Endico presented a letter'1dated 1 (a! '""", where he

infor0ed Acuros and the head office that the .( account wanted a 0erchandiserassigned to it for a whole da! coverage and re@ected the 0erchandiser assigned toit with a half6da! schedule 7n another letter'4dated % (a! '""", Endico gave thehead office an update on the status of the .( account Endico added thatuantu0 oods did not accord hi0 due process 3ecause he was i00ediatel!relieved without 3eing given the opportunit! to e:plain his side n the sa0e da!,Endico also withdrew his application for leave of a3sence'5

n '% une '""", uantu0 oods recalled Endico9s application for leave ofa3sence and reDuired hi0 to report to the head office')uantu0 oods alsoissued a Personnel Action ReDuest'%dated '' une '""", which provided forEndico9s transfer as Area .ales (anager of Ce3u to Area .ales (anager of thehead office effective '4 une '""" Gowever, Endico failed to report for worF 7ntelegra0s dated 1$ une'2and ) ul! '""",'"uantu0 oods reiterated its

directive for Endico to report to the head office

Also on '% une '""", Endico, 3elieving that uantu0 oods intended to ease hi0out of the co0pan!, filed a co0plaint#$for constructive illegal dis0issal Endicoalso pra!ed for the pa!0ent of separation pa!, 3acFwages, other 0onetar!3enefits, da0ages, attorne!9s fees and recover! of the service vehicle

R*li+ o= t;e $or Ariter

n '% anuar! #$$$, the La3or Ar3iter rendered a decision in Endico9s favor Thedispositive portion of the '% anuar! #$$$ &ecision provides;

HGERERE, pre0ises considered, @udg0ent is here3! rendered declaring as

illegal the constructive dis0issal of co0plainant and ordering the respondentuantu0 oods, 7nc to pa! hi0 as follows;

'+ .eparation Pa! Php '#',2$$$$

#+ BacFwages '%),'1)$$

1+ Proportionate '1th 0onth pa! '1,$12$$

4+ Unused sicF leave 4#,'#$$$

5+ Unused vacation leave 4#,'#$$$

)+ Perfor0ance 3onus '$,'5$$$

%+ Productivit! 3onus ##,21%5$2+ (oral and e:e0plar! da0ages 5$,$$$$$

"+ Attorne!9s fees *'$+ 5$,2#$'56666666666666666

Total Php 55",$#')5#'

The respondent uantu0 oods, 7nc or its authoriIed representative is here3!ordered to transfer to co0plainant the possession and ownership of one *'+ 0otorvehicle, a (itsu3ishi L6#$$ with plate no TTC "14 in a running and servicea3lecondition together with its accessories

The other clai0s and the case against respondents Cesar Lota, Edred Al0ero andRogelio de la CruI are dis0issed for lacF of 0erit

. R&ERE#

The La3or Ar3iter ruled that uantu0 oods constructivel! dis0issed Endico3ecause its actions 0ade Endico9s continued e0plo!0ent i0possi3le,unreasona3le and unliFel! The La3or Ar3iter said that Endico was the su3@ect of ahighhanded transfer of assign0ent 3ecause Endico was given neither a cop! ofthe order for his relief nor the reason for his i00ediate relief The La3or Ar3iteradded that Endico was relieved not 3ecause the head office needed his services3ut as a for0 of disciplinar! action for so0e 3aseless charges According to theLa3or Ar3iter, the loss of the .( account was due to the decision of uantu0oods to reduce the nu03er of 0erchandisers and its inaction when Endico raised

this concern

uantu0 oods appealed to the /LRC

R*li+ o= t;e Ntiol $or Reltio" Co@@i""io
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45/105

7n its 1' August #$$' &ecision, the /LRC affir0ed the La3or Ar3iter9s decision with0odification that Endico pa! '$ of the purchase price of the service vehicle Thedipositive portion of the 1' August #$$' &ecision provides;

HGERERE, in view of the foregoing, the decision of the La3or Ar3iter datedanuar! '%, #$$$ is here3! A7R(E& with a 0odification on the order to transferthe possession and ownership of the service vehicle, (itsu3ishi L6#$$ with plate

no TCC "14 to co0plainant, as such co0plainant is liFewise directed to pa!respondent ten percent *'$+ of the purchase price thereof

. R&ERE

The /LRC agreed with the La3or Ar3iter that uantu0 oods constructivel!dis0issed Endico The /LRC said that Endico was not @ust recalled 3ut wasi00ediatel! transferred to the head office, which was tanta0ount to dis0issal The/LRC ruled that uantu0 oods failed to o3serve the twin reDuire0ents of noticeand hearing The /LRC declared that Endico was i00ediatel! relieved fro0 hisfunctions and was given the opportunit! to e:plain his side onl! three da!s afterthe order for his relief was issued The /LRC also ruled that the La3or Ar3iter didnot err in awarding separation pa! to Endico since reinstate0ent was no longerpossi3le due to strained relations Hith respect to the award of unused vacation

and sicF leave credits, perfor0ance 3onus, and productivit! 3onus, the /LRC saidthat these should 3e granted 3ecause the! had 3eco0e co0pan! polic! orpractice which could not @ust 3e withdrawn

uantu0 oods filed a 0otion for reconsideration 7n its #2 /ove03er #$$'Resolution,#4the /LRC denied the 0otion

uantu0 oods filed a petition for certiorari 3efore the Court of Appeals

R*li+ o= t;e Co*rt o= Appel"

7n its #1 &ece03er #$$1 &ecision, the Court of Appeals ruled in favor of uantu0oods The dispositive portion of the #1 &ece03er #$$1 &ecision provides;

HGERERE, the petition is -RA/TE& The &ecision of the /LRC dated August1', #$$# as well as its Resolution dated /ove03er #2, #$$' are here3!REER.E& A/& .ET A.7&E The co0plaint for illegal dis0issal filed 3! privaterespondent is &7.(7..E&

. R&ERE

The Court of Appeals declared that the /LRC gravel! a3used its discretion when itruled that Endico was constructivel! dis0issed The Court of Appeals foundnothing in the '' une '""" fa: 0essage and the show6cause 0e0orandu0 thatsupported the /LRC9s conclusion that Endico was outrightl! dis0issed The Courtof Appeals noted that uantu0 oods even approved Endico9s application for

leave of a3sence and, after Endico recalled his leave application, ordered Endicoto report to the head office for his new @o3 assign0ent

The Court of Appeals said that it is settled that the e0plo!er has the prerogative totransfer and reassign e0plo!ees for valid reasons and according to thereDuire0ents of its 3usiness, provided that there is no de0otion in ranF ordi0inution of his salar!, 3enefits and other privileges The Court of Appealsdeclared that uantu0 oods acted in good faith and was in the legiti0ate pursuitof its 3est interests when it transferred Endico fro0 Ce3u to the head office TheCourt of Appeals 0aintained that Endico9s clai0 that the transfer would result in adi0inution of his pa! or 3enefits was unsu3stantiated The Court of Appeals addedthat uantu0 oods had !et to decide on the ad0inistrative case when Endicoi00ediatel! filed the co0plaint for constructive dis0issal The Court of Appealsconcluded that Endico filed the co0plaint in anticipation of what he perceived to 3e

the final outco0e of the ad0inistrative investigation

Gence, this petition

&;e I""*e"

Endico raises the following issues;

' Hhether he was constructivel! dis0issedJ

# Hhether he is entitled to separation pa!, 3acFwages, other 0onetar!3enefits, da0ages and attorne!9s feesJ and

1 Hhether he is entitled to acDuire the service vehicle

&;e R*li+ o= t;e Co*rt

The petition has no 0erit
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46/105

As a general rule, a petition for review on certiorari under Rule 45 of the Rules ofCourt is li0ited to Duestions of law Gowever, this rule ad0its of e:ceptions, suchas in this case where the findings of the La3or Ar3iter and the /LRC var! fro0 thefindings of the Court of Appeals#)

Endico 0aintains that he was constructivel! dis0issed 3ecause he did not co00itan! offense that would @ustif! his relief Endico adds that his transfer was intended

to unreasona3l! inconvenience hi0 and his fa0il! 3ecause of its su3stantial effecton their finances and Dualit! of fa0il! life, which would ulti0atel! force hi0 to Duit

n the other hand, uantu0 oods insists that Endico was not transferred 3ut wasonl! te0poraril! recalled to the head office pending investigation uantu0 oodsargues that if it did transfer Endico, it was 0erel! e:ercising a 0anage0entprerogative

urisprudence recogniIes the e:ercise of 0anage0ent prerogatives La3or lawsalso discourage interference with an e0plo!er9s @udg0ent in the conduct of its3usiness#%or this reason, the Court often declines to interfere in legiti0ate3usiness decisions of e0plo!ers#2The law 0ust protect not onl! the welfare ofe0plo!ees, 3ut also the right of e0plo!ers#"

7n the pursuit of its legiti0ate 3usiness interests, especiall! during adverse3usiness conditions, 0anage0ent has the prerogative to transfer or assigne0plo!ees fro0 one office or area of operation to another provided there is node0otion in ranF or di0inution of salar!, 3enefits and other privileges and theaction is not 0otivated 3! discri0ination, 3ad faith, or effected as a for0 ofpunish0ent or de0otion without sufficient cause1$This privilege is inherent in theright of e0plo!ers to control and 0anage their enterprises effectivel! 1'The right ofe0plo!ees to securit! of tenure does not give the0 vested rights to their positionsto the e:tent of depriving 0anage0ent of its prerogative to change theirassign0ents or to transfer the01#

(anagerial prerogatives, however, are su3@ect to li0itations provided 3! law,collective 3argaining agree0ents, and general principles of fair pla! and

@ustice

11

The test for deter0ining the validit! of the transfer of e0plo!ees wase:plained in +lue ,air% orporation v. NLR14as follows;

LiFe other rights, there are li0its thereto The 0anagerial prerogative to transferpersonnel 0ust 3e e:ercised without grave a3use of discretion, 3earing in 0ind the3asic ele0ents of @ustice and fair pla! Gaving the right should not 3e confusedwith the 0anner in which that right is e:ercised Thus, it cannot 3e used as a

su3terfuge 3! the e0plo!er to rid hi0self of an undesira3le worFer 7n particular,the e0plo!er 0ust 3e a3le to show that the transfer is not unreasona3le,inconvenient or pre@udicial to the e0plo!eeJ nor does it involve a de0otion in ranFor a di0inution of his salaries, privileges and other 3enefits .hould the e0plo!erfail to overco0e this 3urden of proof, the e0plo!ee9s transfer shall 3e tanta0ountto constructive dis0issal, which has 3een defined as a Duitting 3ecause continuede0plo!0ent is rendered i0possi3le, unreasona3le or unliFel!J as an offer involvinga de0otion in ranF and di0inution in pa! LiFewise, constructive dis0issal e:istswhen an act of clear discri0ination, insensi3ilit! or disdain 3! an e0plo!er has3eco0e so un3eara3le to the e0plo!ee leaving hi0 with no option 3ut to foregowith his continued e0plo!0ent15

7n this case, we find no reason to distur3 the conclusion of the Court of Appealsthat there was no constructive dis0issal Reassign0ents 0ade 3! 0anage0entpending investigation of violations of co0pan! policies and procedures allegedl!co00itted 3! an e0plo!ee fall within the a03it of 0anage0ent prerogative 1)Thedecision of uantu0 oods to transfer Endico pending investigation was a valide:ercise of 0anage0ent prerogative to discipline its e0plo!ees The transfer,while incidental to the charges against Endico, was not 0eant as a penalt!, 3utrather as a preventive 0easure to avoid further loss of sales and the destruction ofuantu0 oods9 i0age and goodwill 7t was not designed to 3e the cul0ination ofthe then on6going ad0inistrative investigation against Endico

/either was there an! de0otion in ranF or an! di0inution of Endico9s salar!,privileges and other 3enefits Endico was 3eing transferred to the head office asarea sales 0anager, the sa0e position Endico held in Ce3u 1%There was also noproof that the transfer involved a di0inution of Endico9s salar!, privileges and other3enefits

n the alleged inconvenience on Endico and his fa0il! 3ecause of the transferfro0 Ce3u to the head office in Para8aDue, we rule that the transfer is valid, there3eing no showing that there was 3ad faith on the part of uantu0oods12(oreover, we find that uantu0 oods, considering the declining salesand the loss of a 0a@or account in Ce3u, was acting in the legiti0ate pursuit ofwhat it considered its 3est interest in deciding to transfer Endico to the head office

.ince we have ruled that uantu0 oods did not constructivel! dis0iss Endico,there is no need to discuss the other issues raised 3! Endico

(EREORE, we DEN-the petition He AIRthe #1 &ece03er #$$1&ecision of the Court of Appeals in CA6-R .P /o )""#"
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