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THIRD DIVISION

[G.R. No. 119243. April 17, 1997]

BREW MASTER INTERNATIONAL INC., petitioner, vs. NATIONAL


FEDERATION OF LABOR UNIONS (NAFLU), ANTONIO D.
ESTRADA and HONORABLE NATIONAL LABOR RELATIONS
COMMISSION (Third Division), respondents.
DECISION
DAVIDE, JR., J.:

This is a special civil action for certiorari seeking the reversal of the 7
October 1994 decision of the National Labor Relations Commission (NLRC)
in NLRC Case No. 00-06-04136-93 (CA No. L-007370-94), which modified the
11 July 1994 decision of the Labor Arbiter by directing the reinstatement of
private respondent Antonio D. Estrada, the complainant, without loss of
seniority rights and benefits.
[1]

[2]

Private respondent National Federation of Labor Unions (NAFLU), a cocomplainant in the labor case, is a labor union of which complainant is a
member.
The factual and procedural antecedents are summarized in the decision of
the Labor Arbiter which we quote verbatim:
Complainant was first employed by respondent on 16 September 1991 as route helper
with the latest daily wage of P119.00. From 19 April 1993 up to 19 May 1993, for a
period of one (1) month, complainant went on absent without permission

(AWOP). On 20 May 1993, respondent thru Mr. Rodolfo Valentin, sent a Memo to
complainant, to wit:
Please explain in writing within 24 hours of your receipt of this memo why no
disciplinary action should be taken against you for the following offense:
You were absent since April 19, 1993 up to May 19, 1993.
For your strict compliance.
In answer to the aforesaid memo, complainant explained:
Sa dahilan po na ako ay hindi nakapagpaalam sainyo [sic] dahil inuwi ko ang mga
anak ko sa Samar dahil ang asawa ko ay lumayas at walang mag-aalaga sa mga anak
ko. Kaya naman hindi ako naka long distance or telegrama dahil wala akong pera at
ibinili ko ng gamot ay puro utang pa.
Finding said explanation unsatisfactory, on 16 June 1993, respondent thru its Sales
Manager, Mr. Henry A. Chongco issued a Notice of Termination which reads:
We received your letter of explanation dated May 21, 1993 but we regret to inform
you that we do not consider it valid. You are aware of the company Rules and
Regulations that absence without permission for six (6) consecutive working days is
considered abandonment of work.
In view of the foregoing, the company has decided to terminate your employment
effective June 17, 1993 for abandonment of work.
Hence, this complaint.
Complainants contend that individual complainants dismissal was done without just
cause; that it was not sufficiently established that individual complainants absence
from April 19, 1993 to June 16, 1993 are unjustified; that the penalty of dismissal for
such violation is too severe; that in imposing such penalty, respondent should have
taken into consideration complainants length of service and as a first offender, a
penalty less punitive will suffice such as suspension for a definite period, (Position
Paper, complainants).

Upon the other hand, respondent contends that individual complainant was dismissed
for cause allowed by the company Rules and Regulations and the Labor Code; that the
act of complainant in absenting from work for one (1) month without official leave is
deleterious to the business of respondent; that it will result to stoppage of production
which will not only destructive to respondents interests but also to the interest of its
employees in general; that the dismissal of complainant from the service is legal,
(Position Paper, respondent).
[3]

The Labor Arbiter dismissed the complaint for lack of merit, citing the
principle of managerial control, which recognizes the employers prerogative
to prescribe reasonable rules and regulations to govern the conduct of his
employees. The principle allows the imposition of disciplinary measures
which are necessary for the efficiency of both the employer and the
employees. In complainant's case, he persisted in not reporting for work until
16 June 1993 notwithstanding his receipt of the memorandum requiring him to
explain his absence without approval. The Labor Arbiter, relying
on Shoemart, Inc. vs. NLRC, thus concluded:
[4]

Verily, it is crystal clear that individual complainant has indeed abandoned his
work. The filing of the complaint on 25 June 1993 or almost two (2) months from the
date complainant failed to report for work affirms the findings of this Office and
therefore, under the law and jurisprudence which upholds the right of an employer to
discharge an employee who incurs frequent, prolonged and unexplained absences as
being grossly remiss in his duties to the employer and is therefore, dismissed for
cause, (Shoemart, Inc. vs. NLRC, 176 SCRA 385). An employee is deemed to have
abandoned his position or to have resigned from the same, whenever he has been
absent therefrom without previous permission of the employer for three consecutive
days or more. This justification is the obvious harm to employers interest, resulting
from [sic] the non-availability of the workers services, (Supra). (underscoring
supplied)
[5]

and ruled that complainants termination from his employment was legal, the
same with just or authorized cause and due process.
[6]

Complainant appealed to the NLRC, alleging that the immediate filing of a


complaint for illegal dismissal verily indicated that he never intended to
abandon his work, then cited Policarpio v. Vicente Dy Sun, Jr., where the
[7]

NLRC ruled that prolonged absence does not, by itself, necessarily mean
abandonment. Accordingly, there must be a concurrence of intention and
overt acts from which it can be inferred that the employee is no longer
interested in working. Complainant likewise invoked compassion in the
application of sanctions, as dismissal from employment brings untold hardship
and sorrows on the dependents of the wage earners. In his case, a penalty
less punitive than dismissal could have sufficed.
In the assailed decision of 7 October 1994, the NLRC modified the Labor
Arbiter's decision and held that complainants dismissal was invalid for the
following reasons:
[8]

Complainant-appellants prolonged absences, although unauthorized, may not amount


to gross neglect or abandonment of work to warrant outright termination of
employment. Dismissal is too severe a penalty. For one, the mere fact that
complainant-appellant is a first offender must be considered in his favor. Besides, it is
generally impossible for an employee to anticipate when he would be ill or compelled
to attend to some family problems or emergency like in the case at bar.
Reliance on the ruling enunciated in the cited case of Shoemart Inc. vs. National
Labor Relations, 176 SCRA 385, is quite misplaced because of the obvious
dissimilarities of the attendant circumstances in the said case vis-a-vis those obtaining
in the case at bar. Unlike in the aforecited Shoemart Case, herein complainantappellant was not dismissed for unauthorized absences and eventually reinstated
anterior to his second dismissal for the same offense nor was he given a second
chance which he could have ignored.
Otherwise stated, the difference between the two cases greatly lies [in] the fact that
complainant in the Shoemart Case in the language of the Supreme Court was an
inveterate absentee who does not deserve reinstatement compared to herein
complainant-appellant who is a first offender
[9]

The NLRC then decreed as follows:


PREMISES CONSIDERED, and [sic] the Decision of the Labor Arbiter, dated 11 July
1994 is hereby MODIFIED, by directing the reinstatement of complainant-appellant

to his former position without loss of seniority rights and other benefits, but without
backwages. The other findings in the appealed decision stand AFFIRMED.
[10]

Petitioners motion for the reconsideration was denied by the NLRC in its
7 December 1994 resolution. Petitioner thus filed this special civil action
contending that the NLRC committed grave abuse of discretion in ordering
complainant's reinstatement, which in effect countenances the reinstatement
of an employee who is found guilty of excessive absences without prior
approval. It further argued that the NLRC failed to consider the rationale
behind petitioners Rules and Regulations; that it was deprived of its
prerogative to enforce them; and that complainant's reinstatement would
adversely affect its business and send the wrong signals to its employees.
[11]

[12]

In its comment for public respondent NLRC, the Office of the Solicitor
General maintained that dismissal from employment was too severe a penalty
for a first time offender like complainant. Although he violated petitioners
rules and regulations, his absences were justified: he had to bring his children
to Samar, his home province, as his wife deserted him. While that by itself
might not excuse the failure to seek permission, the Office of the Solicitor
General submitted, however, that it would be at [sic] the height of callousness
if one, considering his plight under the circumstance[s], would not give due
consideration to [complainants] explanation. There has to be an exception.
[13]

[14]

Applying Itogon-Suyoc Mines, Inc. v. NLRC, the Office of the Solicitor


General recommended complainants reinstatement, which would be more
harmonious to the dictates of social justice and equity. It further emphasized
that the reinstatement should not be considered a condonation of
complainants irresponsible behavior, rather, it must be viewed as a mitigation
of the severity of the penalty of dismissal. Accordingly, it prays that this
petition be dismissed.
[15]

In its reply, petitioner disputed the application of Itogon-Suyoc because:


(1) the employee involved therein had been in the service for twenty-three
years while complainant herein had served petitioner for only two years; and
(2) the offense in Itogon-Suyoc was limited to a single act of high grading
while complainant herein committed a series of unexcused absences.
[16]

We gave due course to the petition and dispensed with complainants


comment.
The sole issue to be resolved is whether the NLRC committed grave
abuse of discretion in modifying the decision of the Labor Arbiter.
The answer must be in the negative.
A scrutiny of the facts discloses that complainants absence was
precipitated by a grave family problem as his wife unexpectedly deserted him
and abandoned the family. Considering that he had a full-time job, there was
no one to whom he could entrust the children and he was thus compelled to
bring them to the province. It would have been extremely difficult for him to
have been husband and wife/father and mother at the same time to the
children in the metropolis. He was then under emotional, psychological,
spiritual and physical stress and strain. The reason for his absence is, under
these circumstances, justified. While his failure to inform and seek petitioner's
approval was an omission which must be corrected and chastised, he did not
merit the severest penalty of dismissal from the service.
Petitioners finding that complainant was guilty of abandonment is
misplaced. Abandonment as a just and valid ground for dismissal requires the
deliberate, unjustified refusal of the employee to resume his
employment. Two elements must then be satisfied: (1) the failure to report for
work or absence without valid or justifiable reason; and (2) a clear intention to
sever the employer-employee relationship. The second element is the more
determinative factor and must be evinced by overt acts. Likewise, the burden
of proof is on the employer to show the employees clear and deliberate intent
to discontinue his employment without any intention of returning, mere
absence is not sufficient. These elements are not present here. First, as
held above, complainant's absence was justified under the circumstances. As
to the second requisite, we are not convinced that complainant ever intended
to sever the employer-employee relationship. Complainant immediately
complied with the memo requiring him to explain his absence, and upon
knowledge of his termination, immediately sued for illegal dismissal. These
plainly refuted any claim that he was no longer interested in returning to work.
Without doubt, the intention is lacking.
[17]

[18]

[19]

[20]

Moreover, petitioner failed to discharge the burden of proof that


complainant was guilty of abandonment. No evidence other than
complainants letter explaining his absence was presented. Needless to state,
the letter did not indicate, in the least, that complainant was no longer
interested in returning to work. On the contrary, complainant sought
petitioners understanding. In declaring him guilty of abandonment, petitioner
merely relied on its Rules and Regulations which limited its application to a
six-day continuous absence, contrary to the purpose of the law. While the
employer is not precluded from prescribing rules and regulations to govern the
conduct of his employees, these rules and their implementation must be fair,
just and reasonable. It must be underscored that no less than our
Constitution looks with compassion on the workingman and protects his rights
not only under a general statement of a state policy, but under the Article on
Social Justice and Human Rights, thus placing labor contracts on a higher
plane and with greater safeguards. Verily, relations between capital and labor
are not merely contractual. They are impressed with public interest and labor
contracts must, perforce, yield to the common good.
[21]

[22]

[23]

We then conclude that complainants "prolonged" absence without


approval does not fall within the definition of abandonment and that his
dismissal was unjustified. While we do not decide here the validity of
petitioner's Rules and Regulations on continuous, unauthorized absences,
what is plain is that it was wielded with undue haste resulting in a deprivation
of due process, thus not allowing for a determination of just cause or
abandonment. In this light, petitioner's dismissal was illegal. This is not to
say that his absence should go unpunished, as impliedly noted by the NLRC
in declining to award back wages. In the absence of the appropriate offense
which defines complainants infraction in the companys Rules and
Regulations, equity dictates that a penalty commensurate to the infraction be
imposed.
WHEREFORE, the petition is hereby DISMISSED and the decision of the
National Labor Relations Commission in NLRC Case No. 06-04136-93 is
hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED.

271 SCRA 670 Labor Law Labor Standards Abandonment of Work Loss of Confidence
Norma Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an inspection was
made by the Department of Labor and Employment (DOLE) at Hotel Supreme and the DOLE
inspectors discovered several violations by the hotel management. Immediately, the owner of the
hotel, Peter Ng, directed his employees to execute an affidavit which would purport that they have
no complaints whatsoever against Hotel Supreme. Mabeza signed the affidavit but she refused to
certify it with the prosecutors office. Later, when she reported to work, she was not allowed to take
her shift. She then asked for a leave but was not granted yet shes not being allowed to work. In May
1991, she then sued Peter Ng for illegal dismissal. Peter Ng, in his defense, said that Mabeza
abandoned her work. In July 1991, Peter Ng also filed a criminal complaint against Mabeza as he
alleged that she had stolen a blanket and some other stuff from the hotel. Peter Ng went on to
amend his reply in the labor case to make it appear that the reason why he dismissed Mabeza was
because of his loss of confidence by reason of the theft allegedly committed by Mabeza. The labor
arbiter who handled the case, a certain Felipe Pati, ruled in favor of Peter Ng.
ISSUE: Whether or not there is abandonment in the case at bar. Whether or not loss of confidence
as ground for dismissal applies in the case at bar.
HELD: No. The side of Peter Ng is bereft of merit so is the decision of the Labor Arbiter which was
unfortunately affirmed by the NLRC.
Abandonment
Abandonment is not present. Mabeza returned several times to inquire about the status of her work
or her employment status. She even asked for a leave but was not granted. Her asking for leave is a
clear indication that she has no intention to abandon her work with the hotel. Even the employer
knows that his purported reason of dismissing her due to abandonment will not fly so he amended
his reply to indicate that it is actually loss of confidence that led to Mabezas dismissal.
Loss of Confidence
It is true that loss of confidence is a valid ground to dismiss an employee. But this is ideally only
applied to workers whose positions require a certain level or degree of trust particularly those who

are members of the managerial staff. Evidently, an ordinary chambermaid who has to sign out for
linen and other hotel property from the property custodian each day and who has to account for each
and every towel or bedsheet utilized by the hotels guests at the end of her shift would not fall under
any of these two classes of employees for which loss of confidence, if ably supported by evidence,
would normally apply. Further, the suspicious filing by Peter Ng of a criminal case against Mabeza
long after she initiated her labor complaint against him hardly warrants serious consideration of loss
of confidence as a ground of Mabezas dismissal.

FIRST DIVISION
[G.R. No. 118506. April 18, 1997]

NORMA MABEZA, petitioner, vs. NATIONAL LABOR RELATIONS


COMMISSION, PETER NG/HOTEL SUPREME, respondents.
DECISION
KAPUNAN, J.:

This petition seeking the nullification of a resolution of public respondent


National Labor Relations Commission dated April 28, 1994 vividly illustrates
why courts should be ever vigilant in the preservation of the constitutionally
enshrined rights of the working class. Without the protection accorded by our
laws and the tempering of courts, the natural and historical inclination of
capital to ride roughshod over the rights of labor would run unabated.
The facts of the case at bar, culled from the conflicting versions of
petitioner and private respondent, are illustrative.
Petitioner Norma Mabeza contends that around the first week of May,
1991, she and her co-employees at the Hotel Supreme in Baguio City were
asked by the hotel's management to sign an instrument attesting to the latter's

compliance with minimum wage and other labor standard provisions of law.
[1]

The instrument provides:[2]

JOINT AFFIDAVIT
We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY,
MACARIA JUGUETA, ADELAIDA NONOG, NORMA MABEZA,
JONATHAN PICART and JOSE DIZON, all of legal ages (sic), Filipinos and
residents of Baguio City, under oath, depose and say:
1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416
Magsaysay Ave., Baguio City;
2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant;
3. That we are all (8) employees in the hotel and assigned in each respective shifts;
4. That we have no complaints against the management of the Hotel Supreme as we
are paid accordingly and that we are treated well.
5. That we are executing this affidavit voluntarily without any force or intimidation
and for the purpose of informing the authorities concerned and to dispute the alleged
report of the Labor Inspector of the Department of Labor and Employment conducted
on the said establishment on February 2, 1991.
IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of
May, 1991 at Baguio City, Philippines.
(Sgd.)
(Sgd.)

(Sgd.)

SYLVIA IGAMA
HERMINIGILDO
AQUINO
EVELYN OGOY
(Sgd)
(Sgd.)

(Sgd.)

MACARIA JUGUETA
ADELAIDA
NONOG
NORMA MABEZA

(Sgd)
JONATHAN PICART

(Sgd.)
JOSE DIZON

SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at


Baguio City, Philippines.
Asst. City Prosecutor
Petitioner signed the affidavit but refused to go to the City Prosecutor's
Office to swear to the veracity and contents of the affidavit as instructed by
management. The affidavit was nevertheless submitted on the same day to
the Regional Office of the Department of Labor and Employment in Baguio
City.
As gleaned from the affidavit, the same was drawn by management for the
sole purpose of refuting findings of the Labor Inspector of DOLE (in an
inspection of respondent's establishment on February 2, 1991) apparently
adverse to the private respondent.
[3]

After she refused to proceed to the City Prosecutor's Office - on the same
day the affidavit was submitted to the Cordillera Regional Office of DOLE petitioner avers that she was ordered by the hotel management to turn over
the keys to her living quarters and to remove her belongings from the hotel
premises. According to her, respondent strongly chided her for refusing to
proceed to the City Prosecutor's Office to attest to the affidavit. She thereafter
reluctantly filed a leave of absence from her job which was denied by
management. When she attempted to return to work on May 10, 1991, the
hotel's cashier, Margarita Choy, informed her that she should not report to
work
and,
instead,
continue
with
her
unofficial
leave
of
absence. Consequently, on May 13, 1991, three days after her attempt to
return to work, petitioner filed a complaint for illegal dismissal before the
Arbitration Branch of the National Labor Relations Commission - CAR Baguio
City. In addition to her complaint for illegal dismissal, she alleged
underpayment of wages, non-payment of holiday pay, service incentive leave
pay, 13th month pay, night differential and other benefits. The complaint was
[4]

[5]

docketed as NLRC Case No. RAB-CAR-05-0198-91 and assigned to Labor


Arbiter Felipe P. Pati.
Responding to the allegations made in support of petitioner's complaint for
illegal dismissal, private respondent Peter Ng alleged before Labor Arbiter Pati
that petitioner "surreptitiously left (her job) without notice to the
management" and that she actually abandoned her work. He maintained that
there was no basis for the money claims for underpayment and other benefits
as these were paid in the form of facilities to petitioner and the hotel's other
employees. Pointing to the Affidavit of May 7, 1991, the private respondent
asserted that his employees actually have no problems with management. In
a supplemental answer submitted eleven (11) months after the original
complaint for illegal dismissal was filed, private respondent raised a new
ground, loss of confidence, which was supported by a criminal complaint for
Qualified Theft he filed before the prosecutor's office of the City of Baguio
against petitioner on July 4, 1991.
[6]

[7]

[8]

On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing


petitioner's complaint on the ground of loss of confidence. His disquisitions in
support of his conclusion read as follows:
It appears from the evidence of respondent that complainant carted away or
stole one (1) blanket, 1 piece bedsheet, 1 piece thermos, 2 pieces towel
(Exhibits '9', '9-A,' '9-B,' '9-C' and '10' pages 12-14 TSN, December 1, 1992).
In fact, this was the reason why respondent Peter Ng lodged a criminal
complaint against complainant for qualified theft and perjury. The fiscal's
office finding a prima facie evidence that complainant committed the crime of
qualified theft issued a resolution for its filing in court but dismissing the
charge of perjury (Exhibit '4' for respondent and Exhibit 'B-7' for
complainant). As a consequence, complainant was charged in court for the
said crime (Exhibit '5' for respondent and Exhibit 'B-6' for the complainant).
With these pieces of evidence, complainant committed serious misconduct
against her employer which is one of the just and valid grounds for an
employer to terminate an employee (Article 282 of the Labor Code as
amended).
[9]

On April 28, 1994, respondent NLRC promulgated its assailed


Resolution affirming the Labor Arbiter's decision. The resolution substantially
incorporated the findings of the Labor Arbiter. Unsatisfied, petitioner
instituted the instant special civil action for certiorari under Rule 65 of the
Rules of Court on the following grounds:
[10]

[11]

[12]

1.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL


LABOR RELATIONS COMMISSION COMMITTED A PATENT
AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN ITS FAILURE TO CONSIDER THAT THE
ALLEGED LOSS OF CONFIDENCE IS A FALSE CAUSE AND
AN AFTERTHOUGHT ON THE PART OF THE RESPONDENTEMPLOYER TO JUSTIFY, ALBEIT ILLEGALLY, THE
DISMISSAL OF THE COMPLAINANT FROM HER
EMPLOYMENT;

2.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL


LABOR RELATIONS COMMISSION COMMITTED A PATENT
AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN ADOPTING THE RULING OF THE LABOR
ARBITER THAT THERE WAS NO UNDERPAYMENT OF
WAGES AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN
UNDATED SUMMARY OF COMPUTATION PREPARED BY
ALLEGEDLY BY RESPONDENT'S EXTERNAL ACCOUNTANT)
WHICH IS TOTALLY INADMISSIBLE AS AN EVIDENCE TO
PROVE PAYMENT OF WAGES AND BENEFITS;

3.

WITH ALL DUE RESPECT, THE HONORABLE NATIONAL


LABOR RELATIONS COMMISSION COMMITTED A PATENT
AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF
DISCRETION IN FAILING TO CONSIDER THE EVIDENCE
ADDUCED BEFORE THE LABOR ARBITER AS
CONSTITUTING UNFAIR LABOR PRACTICE COMMITTED BY
THE RESPONDENT.

The Solicitor General, in a Manifestation in lieu of Comment dated August


8, 1995 rejects private respondent's principal claims and defenses and urges
this Court to set aside the public respondent's assailed resolution.
[13]

We agree.
It is settled that in termination cases the employer bears the burden of
proof to show that the dismissal is for just cause, the failure of which would
mean that the dismissal is not justified and the employee is entitled to
reinstatement.
[14]

In the case at bar, the private respondent initially claimed that petitioner
abandoned her job when she failed to return to work on May 8,
1991. Additionally, in order to strengthen his contention that there existed
sufficient cause for the termination of petitioner, he belatedly included a
complaint for loss of confidence, supporting this with charges that petitioner
had stolen a blanket, a bedsheet and two towels from the hotel. Appended to
his last complaint was a suit for qualified theft filed with the Baguio City
prosecutor's office.
[15]

From the evidence on record, it is crystal clear that the circumstances


upon which private respondent anchored his claim that petitioner "abandoned"
her job were not enough to constitute just cause to sanction the termination of
her services under Article 283 of the Labor Code. For abandonment to arise,
there must be concurrence of two things: 1) lack of intention to work; and 2)
the presence of overt acts signifying the employee's intention not to work.
[16]

[17]

In the instant case, respondent does not dispute the fact that petitioner
tried to file a leave of absence when she learned that the hotel management
was displeased with her refusal to attest to the affidavit. The fact that she
made this attempt clearly indicates not an intention to abandon but an
intention to return to work after the period of her leave of absence, had it been
granted, shall have expired.
Furthermore, while absence from work for a prolonged period may
suggest abandonment in certain instances, mere absence of one or two days
would not be enough to sustain such a claim. The overt act (absence) ought

to unerringly point to the fact that the employee has no intention to return to
work, which is patently not the case here. In fact, several days after she had
been advised to take an informal leave, petitioner tried to resume working with
the hotel, to no avail. It was only after she had been repeatedly rebuffed that
she filed a case for illegal dismissal. These acts militate against the private
respondent's claim that petitioner abandoned her job. As the Solicitor General
in his manifestation observed:
[18]

Petitioner's absence on that day should not be construed as abandonment of


her job. She did not report because the cashier told her not to report anymore,
and that private respondent Ng did not want to see her in the hotel
premises. But two days later or on the 10th of May, after realizing that she
had to clarify her employment status, she again reported for work. However,
she was prevented from working by private respondents.
[19]

We now come to the second cause raised by private respondent to


support his contention that petitioner was validly dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to
provide employers with a blank check for terminating their employees. Such a
vague, all-encompassing pretext as loss of confidence, if unqualifiedly given
the seal of approval by this Court, could readily reduce to barren form the
words of the constitutional guarantee of security of tenure. Having this in
mind, loss of confidence should ideally apply only to cases involving
employees occupying positions of trust and confidence or to those situations
where the employee is routinely charged with the care and custody of the
employer's money or property. To the first class belong managerial
employees, i.e., those vested with the powers or prerogatives to lay down
management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such
managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise of
their functions, regularly handle significant amounts of money or
property. Evidently, an ordinary chambermaid who has to sign out for linen
and other hotel property from the property custodian each day and who has to
account for each and every towel or bedsheet utilized by the hotel's guests at
the end of her shift would not fall under any of these two classes of employees

for which loss of confidence, if ably supported by evidence, would normally


apply. Illustrating this distinction, this Court, in Marina Port Services, Inc. vs.
NLRC, has stated that:
[20]

To be sure, every employee must enjoy some degree of trust and confidence
from the employer as that is one reason why he was employed in the first
place. One certainly does not employ a person he distrusts. Indeed, even the
lowly janitor must enjoy that trust and confidence in some measure if only
because he is the one who opens the office in the morning and closes it at
night and in this sense is entrusted with the care or protection of the
employer's property. The keys he holds are the symbol of that trust and
confidence.
By the same token, the security guard must also be considered as enjoying the
trust and confidence of his employer, whose property he is safeguarding. Like
the janitor, he has access to this property. He too, is charged with its care and
protection.
Notably, however, and like the janitor again, he is entrusted only with
the physical task of protecting that property. The employer's trust and
confidence in him is limited to that ministerial function. He is not entrusted,
in the Labor Arbiter's words, 'with the duties of safekeeping and safeguarding
company policies, management instructions, and company secrets such as
operation devices.' He is not privy to these confidential matters, which are
shared only in the higher echelons of management. It is the persons on such
levels who, because they discharge these sensitive duties, may be considered
holding positions of trust and confidence. The security guard does not belong
in such category.
[21]

More importantly, we have repeatedly held that loss of confidence should


not be simulated in order to justify what would otherwise be, under the
provisions of law, an illegal dismissal. "It should not be used as a subterfuge
for causes which are illegal, improper and unjustified. It must be genuine, not
a mere afterthought to justify an earlier action taken in bad faith."
[22]

In the case at bar, the suspicious delay in private respondent's filing of


qualified theft charges against petitioner long after the latter exposed the

hotel's scheme (to avoid its obligations as employer under the Labor Code) by
her act of filing illegal dismissal charges against the private respondent would
hardly warrant serious consideration of loss of confidence as a valid ground
for dismissal. Notably, the Solicitor General has himself taken a position
opposite the public respondent and has observed that:
If petitioner had really committed the acts charged against her by private
respondents (stealing supplies of respondent hotel), private respondents should
have confronted her before dismissing her on that ground. Private respondents
did not do so. In fact, private respondent Ng did not raise the matter when
petitioner went to see him on May 9, 1991, and handed him her application for
leave. It took private respondents 52 days or up to July 4, 1991 before finally
deciding to file a criminal complaint against petitioner, in an obvious attempt
to build a case against her.
The manipulations of private respondents should not be countenanced.

[23]

Clearly, the efforts to justify petitioner's dismissal - on top of the private


respondent's scheme of inducing his employees to sign an affidavit absolving
him from possible violations of the Labor Code - taints with evident bad faith
and deliberate malice petitioner's summary termination from employment.
Having said this, we turn to the important question of whether or not the
dismissal by the private respondent of petitioner constitutes an unfair labor
practice.
The answer in this case must inevitably be in the affirmative.
The pivotal question in any case where unfair labor practice on the part of
the employer is alleged is whether or not the employer has exerted pressure,
in the form of restraint, interference or coercion, against his employee's right
to institute concerted action for better terms and conditions of
employment. Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor standards provisions of
law when he might have not, together with the act of terminating or coercing
those who refuse to cooperate with the employer's scheme constitutes unfair

labor practice. The first act clearly preempts the right of the hotel's workers to
seek better terms and conditions of employment through concerted action.
We agree with the Solicitor General's observation in his manifestation that
"[t]his actuation... is analogous to the situation envisaged in paragraph (f) of
Article 248 of the Labor Code" which distinctly makes it an unfair labor
practice "to dismiss, discharge or otherwise prejudice or discriminate against
an employee for having given or being about to give testimony" under the
Labor Code. For in not giving positive testimony in favor of her employer,
petitioner had reserved not only her right to dispute the claim and proffer
evidence in support thereof but also to work for better terms and conditions of
employment.
[24]

[25]

For refusing to cooperate with the private respondent's scheme, petitioner


was obviously held up as an example to all of the hotel's employees, that they
could only cause trouble to management at great personal
inconvenience. Implicit in the act of petitioner's termination and the
subsequent filing of charges against her was the warning that they would not
only be deprived of their means of livelihood, but also possibly, their personal
liberty.
This Court does not normally overturn findings and conclusions of quasijudicial agencies when the same are ably supported by the evidence on
record. However, where such conclusions are based on a misperception of
facts or where they patently fly in the face of reason and logic, we will not
hesitate to set aside those conclusions. Going into the issue of petitioner's
money claims, we find one more salient reason in this case to set things right:
the labor arbiter's evaluation of the money claims in this case incredibly
ignores existing law and jurisprudence on the matter. Its blatant onesidedness simply raises the suspicion that something more than the facts, the
law and jurisprudence may have influenced the decision at the level of the
Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's
bare claim that the reason the monetary benefits received by petitioner
between 1981 to 1987 were less than minimum wage was because petitioner
did not factor in the meals, lodging, electric consumption and water she

received during the period in her computations. Granting that meals and
lodging were provided and indeed constituted facilities, such facilities could
not be deducted without the employer complying first with certain legal
requirements. Without satisfying these requirements, the employer simply
cannot deduct the value from the employee's wages. First, proof must be
shown that such facilities are customarily furnished by the trade. Second, the
provision of deductible facilities must be voluntarily accepted in writing by the
employee. Finally, facilities must be charged at fair and reasonable value.
[26]

[27]

These requirements were not met in the instant case. Private respondent
"failed to present any company policy or guideline to show that the meal and
lodging . . . (are) part of the salary;" he failed to provide proof of the
employee's written authorization; and, he failed to show how he arrived at the
valuations.
[28]

[29]

Curiously, in the case at bench, the only valuations relied upon by the
labor arbiter in his decision were figures furnished by the private respondent's
own accountant, without corroborative evidence. On the pretext that records
prior to the July 16, 1990 earthquake were lost or destroyed, respondent failed
to produce payroll records, receipts and other relevant documents, where he
could have, as has been pointed out in the Solicitor General's manifestation,
"secured certified copies thereof from the nearest regional office of the
Department of Labor, the SSS or the BIR."
[30]

More significantly, the food and lodging, or the electricity and water
consumed by the petitioner were not facilities but supplements. A benefit or
privilege granted to an employee for the convenience of the employer is not a
facility. The criterion in making a distinction between the two not so much lies
in the kind (food, lodging) but the purpose. Considering, therefore, that hotel
workers are required to work different shifts and are expected to be available
at various odd hours, their ready availability is a necessary matter in the
operations of a small hotel, such as the private respondent's hotel.
[31]

It is therefore evident that petitioner is entitled to the payment of the


deficiency in her wages equivalent to the full wage applicable from May 13,
1988 up to the date of her illegal dismissal.

Additionally, petitioner is entitled to payment of service incentive leave pay,


emergency cost of living allowance, night differential pay, and 13th month pay
for the periods alleged by the petitioner as the private respondent has never
been able to adduce proof that petitioner was paid the aforestated benefits.
However, the claims covering the period of October 1987 up to the time of
filing the case on May 13, 1988 are barred by prescription as P.D. 442 (as
amended) and its implementing rules limit all money claims arising out of
employer-employee relationship to three (3) years from the time the cause of
action accrues.
[32]

We depart from the settled rule that an employee who is unjustly


dismissed from work normally should be reinstated without loss of seniority
rights and other privileges. Owing to the strained relations between petitioner
and private respondent, allowing the former to return to her job would only
subject her to possible harassment and future embarrassment. In the instant
case, separation pay equivalent to one month's salary for every year of
continuous service with the private respondent would be proper, starting with
her job at the Belfront Hotel.
In addition to separation pay, backwages are in order. Pursuant to R.A.
6715 and our decision in Osmalik Bustamante, et al. vs. National Labor
Relations Commission, petitioner is entitled to full backwages from the time
of her illegal dismissal up to the date of promulgation of this decision without
qualification or deduction.
[33]

Finally, in dismissal cases, the law requires that the employer must furnish
the employee sought to be terminated from employment with two written
notices before the same may be legally effected. The first is a written notice
containing a statement of the cause(s) for dismissal; the second is a notice
informing the employee of the employer's decision to terminate him stating the
basis of the dismissal. During the process leading to the second notice, the
employer must give the employee ample opportunity to be heard and defend
himself, with the assistance of counsel if he so desires.
Given the seriousness of the second cause (qualified theft) of the
petitioner's dismissal, it is noteworthy that the private respondent never even

bothered to inform petitioner of the charges against her. Neither was


petitioner given the opportunity to explain the loss of the articles. It was only
almost two months after petitioner had filed a complaint for illegal dismissal,
as an afterthought, that the loss was reported to the police and added as a
supplemental answer to petitioner's complaint. Clearly, the dismissal of
petitioner without the benefit of notice and hearing prior to her termination
violated her constitutional right to due process. Under the circumstances, an
award of One Thousand Pesos (P1,000.00) on top of payment of the
deficiency in wages and benefits for the period aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National
Labor Relations Commission dated April 24, 1994 is REVERSED and SET
ASIDE, with costs. For clarity, the economic benefits due the petitioner are
hereby summarized as follows:
1)
Deficiency wages and the applicable ECOLA from May 13, 1988 up to
the date of petitioner's illegal dismissal;
2)
Service incentive leave pay; night differential pay and 13th month pay
for the same period;
3)
Separation pay equal to one month's salary for every year of petitioner's
continuous service with the private respondent starting with her job at the
Belfront Hotel;
4)
Full backwages, without qualification or deduction, from the date of
petitioner's illegal dismissal up to the date of promulgation of this decision
pursuant to our ruling in Bustamante vs. NLRC.
[34]

5)

P1.000.00.

SO ORDERED.

FIRST DIVISION

[G.R. No. 128845. June 1, 2000]


INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS
(ISAE), petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity
as the Secretary of Labor and Employment; HON. CRESENCIANO B.
TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and INTERNATIONAL
SCHOOL, INC., respondents.
DECISION
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of
private respondent School, mostly Filipinos, cry discrimination. We agree.
That the local-hires are paid more than their colleagues in other schools is, of
course, beside the point. The point is that employees should be given equal
pay for work of equal value. That is a principle long honored in this jurisdiction.
That is a principle that rests on fundamental notions of justice. That is the
principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant
to Presidential Decree 732, is a domestic educational institution established
primarily for dependents of foreign diplomatic personnel and other temporary
residents. To enable the School to continue carrying out its educational
program and improve its standard of instruction, Section 2(c) of the same
decree authorizes the School to
[1]

employ its own teaching and management personnel selected by


it either locally or abroad, from Philippine or other nationalities,
such personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have
been or will be enacted for the protection of employees.
Accordingly, the School hires both foreign and local teachers as members of
its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.

The School employs four tests to determine whether a faculty member should
be classified as a foreign-hire or a local hire:
a.....What is one's domicile?
b.....Where is one's home economy?
c.....To which country does one owe economic allegiance?
d.....Was the individual hired abroad specifically to work in the
School and was the School responsible for bringing that individual
to the Philippines?
[2]

Should the answer to any of these queries point to the Philippines, the faculty
member is classified as a local hire; otherwise, he or she is deemed a foreignhire.
The School grants foreign-hires certain benefits not accorded local-hires.
These include housing, transportation, shipping costs, taxes, and home leave
travel allowance. Foreign-hires are also paid a salary rate twenty-five percent
(25%) more than local-hires. The School justifies the difference on two
"significant economic disadvantages" foreign-hires have to endure, namely:
(a) the "dislocation factor" and (b) limited tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his
home country, leave his family and friends, and take the risk of
deviating from a promising career path-all for the purpose of
pursuing his profession as an educator, but this time in a foreign
land. The new foreign hire is faced with economic realities: decent
abode for oneself and/or for one's family, effective means of
transportation, allowance for the education of one's children,
adequate insurance against illness and death, and of course the
primary benefit of a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again
with the same economic reality after his term: that he will
eventually and inevitably return to his home country where he will

have to confront the uncertainty of obtaining suitable employment


after a long period in a foreign land.
The compensation scheme is simply the School's adaptive
measure to remain competitive on an international level in terms
of attracting competent professionals in the field of international
education.
[3]

When negotiations for a new collective bargaining agreement were held on


June 1995, petitioner International School Alliance of Educators, "a legitimate
labor union and the collective bargaining representative of all faculty
members" of the School, contested the difference in salary rates between
foreign and local-hires. This issue, as well as the question of whether foreignhires should be included in the appropriate bargaining unit, eventually caused
a deadlock between the parties.
[4]

On September 7, 1995, petitioner filed a notice of strike. The failure of the


National Conciliation and Mediation Board to bring the parties to a
compromise prompted the Department of Labor and Employment (DOLE) to
assume jurisdiction over the dispute. On June 10, 1996, the DOLE Acting
Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and
representation issues in favor of the School. Then DOLE Secretary Leonardo
A. Quisumbing subsequently denied petitioner's motion for reconsideration in
an Order dated March 19, 1997. Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty
members, numbering 38 in all, with nationalities other than Filipino, who have
been hired locally and classified as local hires. The Acting Secretary of Labor
found that these non-Filipino local-hires received the same benefits as the
Filipino local-hires:
[5]

The compensation package given to local-hires has been shown to apply to


all, regardless of race. Truth to tell, there are foreigners who have been hired
locally and who are paid equally as Filipino local hires.
[6]

The Acting Secretary upheld the point-of-hire classification for the distinction
in salary rates:
The principle "equal pay for equal work" does not find application
in the present case. The international character of the School
requires the hiring of foreign personnel to deal with different
nationalities and different cultures, among the student population.
We also take cognizance of the existence of a system of salaries
and benefits accorded to foreign hired personnel which system is
universally recognized. We agree that certain amenities have to
be provided to these people in order to entice them to render their
services in the Philippines and in the process remain competitive
in the international market.
Furthermore, we took note of the fact that foreign hires have
limited contract of employment unlike the local hires who enjoy
security of tenure. To apply parity therefore, in wages and other
benefits would also require parity in other terms and conditions of
employment which include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the
conditions and provisions for salary and professional
compensation wherein the parties agree as follows:
All members of the bargaining unit shall be
compensated only in accordance with Appendix C
hereof provided that the Superintendent of the School
has the discretion to recruit and hire expatriate
teachers from abroad, under terms and conditions
that are consistent with accepted international
practice.

Appendix C of said CBA further provides:


The new salary schedule is deemed at equity with the
Overseas Recruited Staff (OSRS) salary schedule.
The 25% differential is reflective of the agreed value
of system displacement and contracted status of the
OSRS as differentiated from the tenured status of
Locally Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition
of the difference in the status of two types of employees, hence,
the difference in their salaries.
The Union cannot also invoke the equal protection clause to
justify its claim of parity. It is an established principle of
constitutional law that the guarantee of equal protection of the
laws is not violated by legislation or private covenants based on
reasonable classification. A classification is reasonable if it is
based on substantial distinctions and apply to all members of the
same class. Verily, there is a substantial distinction between
foreign hires and local hires, the former enjoying only a limited
tenure, having no amenities of their own in the Philippines and
have to be given a good compensation package in order to attract
them to join the teaching faculty of the School.
[7]

We cannot agree.
That public policy abhors inequality and discrimination is beyond contention.
Our Constitution and laws reflect the policy against these evils. The
Constitution in the Article on Social Justice and Human Rights exhorts
Congress to "give highest priority to the enactment of measures that protect
and enhance the right of all people to human dignity, reduce social, economic,
and political inequalities." The very broad Article 19 of the Civil Code requires
every person, "in the exercise of his rights and in the performance of his
duties, [to] act with justice, give everyone his due, and observe honesty and
good faith."
[8]

International law, which springs from general principles of law, likewise


proscribes discrimination. General principles of law include principles of
equity, i.e., the general principles of fairness and justice, based on the test of
what is reasonable. The Universal Declaration of Human Rights, the
International Covenant on Economic, Social, and Cultural Rights, the
International Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in Education, the
Convention (No. 111) Concerning Discrimination in Respect of Employment
and Occupation - all embody the general principle against discrimination, the
very antithesis of fairness and justice. The Philippines, through its
Constitution, has incorporated this principle as part of its national laws.
[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

In the workplace, where the relations between capital and labor are often
skewed in favor of capital, inequality and discrimination by the employer are
all the more reprehensible.
The Constitution specifically provides that labor is entitled to "humane
conditions of work." These conditions are not restricted to the physical
workplace - the factory, the office or the field - but include as well the manner
by which employers treat their employees.
[17]

The Constitution also directs the State to promote "equality of employment


opportunities for all." Similarly, the Labor Code provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed." It would be
an affront to both the spirit and letter of these provisions if the State, in spite of
its primordial obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and discriminatory terms and
conditions of employment.
[18]

[19]

[20]

Discrimination, particularly in terms of wages, is frowned upon by the Labor


Code. Article 135, for example, prohibits and penalizes the payment of lesser
compensation to a female employee as against a male employee for work of
equal value. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage
membership in any labor organization.
[21]

Notably, the International Covenant on Economic, Social, and Cultural Rights,


supra, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favourable conditions of
work, which ensure, in particular:
a.....Remuneration which provides all workers, as a minimum,
with:
i.....Fair wages and equal remuneration for work of
equal value without distinction of any kind, in
particular women being guaranteed conditions of work
not inferior to those enjoyed by men, with equal pay
for equal work;
x x x.
The foregoing provisions impregnably institutionalize in this jurisdiction the
long honored legal truism of "equal pay for equal work." Persons who work
with substantially equal qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries. This rule applies to the
School, its "international character" notwithstanding.
[22]

The School contends that petitioner has not adduced evidence that local-hires
perform work equal to that of foreign-hires. The Court finds this argument a
little cavalier. If an employer accords employees the same position and rank,
the presumption is that these employees perform equal work. This
presumption is borne by logic and human experience. If the employer pays
one employee less than the rest, it is not for that employee to explain why he
receives less or why the others receive more. That would be adding insult to
injury. The employer has discriminated against that employee; it is for the
employer to explain why the employee is treated unfairly.
[23]

The employer in this case has failed to discharge this burden. There is no
evidence here that foreign-hires perform 25% more efficiently or effectively

than the local-hires. Both groups have similar functions and responsibilities,
which they perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their
domicile to rationalize the distinction in salary rates without violating the
principle of equal work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or
recompense for services performed." Similarly, the Philippine Legal
Encyclopedia states that "salary" is the "[c]onsideration paid at regular
intervals for the rendering of services." In Songco v. National Labor
Relations Commission, we said that:
[24]

"salary" means a recompense or consideration made to a person


for his pains or industry in another man's business. Whether it be
derived from "salarium," or more fancifully from "sal," the pay of
the Roman soldier, it carries with it the fundamental idea of
compensation for services rendered. (Emphasis supplied.)
While we recognize the need of the School to attract foreign-hires, salaries
should not be used as an enticement to the prejudice of local-hires. The localhires perform the same services as foreign-hires and they ought to be paid the
same salaries as the latter. For the same reason, the "dislocation factor" and
the foreign-hires' limited tenure also cannot serve as valid bases for the
distinction in salary rates. The dislocation factor and limited tenure affecting
foreign-hires are adequately compensated by certain benefits accorded them
which are not enjoyed by local-hires, such as housing, transportation, shipping
costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and
promote their welfare," "to afford labor full protection." The State, therefore,
has the right and duty to regulate the relations between labor and capital.
These relations are not merely contractual but are so impressed with public
interest that labor contracts, collective bargaining agreements included, must
yield to the common good. Should such contracts contain stipulations that
are contrary to public policy, courts will not hesitate to strike down these
stipulations.
[25]

[26]

[27]

[28]

In this case, we find the point-of-hire classification employed by respondent


School to justify the distinction in the salary rates of foreign-hires and local
hires to be an invalid classification. There is no reasonable distinction
between the services rendered by foreign-hires and local-hires. The practice
of the School of according higher salaries to foreign-hires contravenes public
policy and, certainly, does not deserve the sympathy of this Court.
We agree, however, that foreign-hires do not belong to the same bargaining
unit as the local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, consistent with equity to
the employer indicate to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the
law." The factors in determining the appropriate collective bargaining unit are
(1) the will of the employees (Globe Doctrine); (2) affinity and unity of the
employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. The basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will
best assure to all employees the exercise of their collective bargaining rights.
[29]

[30]

[31]

It does not appear that foreign-hires have indicated their intention to be


grouped together with local-hires for purposes of collective bargaining. The
collective bargaining history in the School also shows that these groups were
always treated separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar functions under the
same working conditions as the local-hires, foreign-hires are accorded certain
benefits not granted to local-hires. These benefits, such as housing,
transportation, shipping costs, taxes, and home leave travel allowance, are
reasonably related to their status as foreign-hires, and justify the exclusion of
the former from the latter. To include foreign-hires in a bargaining unit with
local-hires would not assure either group the exercise of their respective
collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby


GRANTED IN PART. The Orders of the Secretary of Labor and Employment
dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET
ASIDE insofar as they uphold the practice of respondent School of according
foreign-hires higher salaries than local-hires.
SO ORDERED.

FIRST DIVISION
G & M PHILIPPINES, INC.,
Petitioner,

G.R. No. 162308


Present:

- versus -

ROMIL V. CUAMBOT,
Respondent.

PANGANIBAN, C.J., Chairperson,


YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
Promulgated:

November 22, 2006


x------------------------------------ --------------x
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of
Court assailing the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No.
64744, as well as the Resolution[2] dated February 20, 2004 denying the motion for
reconsideration thereof.

The antecedent facts are as follows:


On November 7, 1994, respondent Romil V. Cuambot applied for
deployment to Saudi Arabia as a car body builder with petitioner G &
M Philippines, Inc., a duly licensed placement and recruitment agency.
Respondents application was duly processed and he later signed a two-year
employment
contract
to
work
at
the
Al Waha Workshop
inUnaizah City, Gassim, Kingdom of Saudi Arabia. He left the country on January
5, 1995. However, respondent did not finish his contract and returned to
the Philippines barely six months later, on July 24, 1995. On July 26, 1995, he filed
before the National Labor Relations Commission (NLRC) a complaint for unpaid
wages, withheld salaries, refund of plane ticket and repatriation bond, later
amended to include illegal dismissal, claim for the unexpired portion of his
employment contract, actual, exemplary and moral damages, and attorneys fees.
The complaint was docketed as NLRC-NCR Case No. 00-07-05252-95.
Respondent narrated that he began working for Mohd Al Motairi,[3] the
President and General Manager of the Al Waha Workshop, on January 8, 1995.
Along with his Filipino co-workers, he was subjected to inhuman and unbearable
working conditions, to wit:
1. [He] was required to work from 7:00 oclock in the morning to 10:00 oclock
in the evening everyday, except Friday, or six (6) hours overtime work daily
from the usual eight (8) working hours per day.
2. [He] was never paid x x x his monthly basic salary of 1,200 [Riyals] including
his overtime pay for the six (6) hours overtime work he rendered every
working day during his work in Saudi Arabia except for the amount of 100
[Riyals] given every month for his meal allowance;
3. [He] was subjected to serious insult by respondent Muthiri everytime he
asked or demanded for his salary; and,
4. [S]ome of complainants letters that were sent by his family were not given by
respondent Muthiri and/or his staff x x x.[4]

When respondent asked Motairi for his salary, he was told that since a huge
sum had been paid to the agency for his recruitment and deployment, he would
only be paid after the said amount had already been recovered. He was also told
that his salary was only 800 Saudi Riyals (SAR) per month, in contrast to the
SAR1200 that was promised him under the contract. Motairi warned that he would

be sent home the next time he demanded for his salary. Due to his familys
incessant letters asking for financial support, however, respondent mustered the
courage to again demand for his salaries during the second week of July 1996. True
to his word, Motairi ordered him to pack up and leave. He was able to purchase his
plane ticket only through the contributions of his fellow Filipinos. Motairi even
accompanied him to the airport when he bought his plane ticket. In the meantime,
his wife had been making inquiries about him.
To corroborate his claims, respondent submitted the following documents:
an undated letter[5] he had written addressed to the Philippine Labor Attach in
Riyadh, with Arabic translation;[6] his wifes letter[7] dated June 28, 1995 addressed
to the Gulangco Monteverde Agency, Manila Head Office, asking for a favor to
help [her] husband to come home as early as possible; a fax message [8] dated July
17, 1995 from a representative of the Land Bank of the Philippines (LBP) to a
counterpart in Riyadh, asking for assistance to locate respondent;[9] and the

reply[10] from the Riyadh LBP representative requesting for contact numbers to
facilitate communication with respondent.
Respondent further claimed that his employers actuations violated Articles
83 and 103 of the Labor Code. While he was entitled to terminate his employment
in accordance with Article 285 (b) due to the treatment he received, he did not
exercise this right. He was nevertheless illegally dismissed by his employer when
he tried to collect the salaries due him. Respondent further claimed that the
reduction of his monthly salary from SAR1,200 to SAR800 and petitioners failure
to furnish him a copy of the employment contract before his departure amounted to
prohibited practices under Article 34 (i) and (k) of the Labor Code.
Respondent prayed for the following relief:
WHEREFORE, premises considered, complainant most respectfully prays
unto this Honorable Office that the instant complaint be given due course and that
a
decision
be
rendered
in
his
favor
and
against
respondents
G
&
M
(Phils.),
Inc., Alwaha (sic) Workshop
and/or Muhamd (sic) Muthiri, as follows:
(1)

Ordering the respondents to pay, jointly and severally,


complainant the unpaid salaries and overtime pay in the
amounts of P61,560.00 and P66,484.80, respectively,
including interests, until the same will be fully paid;

(2)

Ordering the respondents to pay, jointly and severally,


complainant[s] salary for the unexpired portion of the
contract in the amount of P184,680.00, including interests,
until the same will be fully paid;

(3)

Ordering the respondents to pay, jointly and severally,


complainant[s] actual expenses which he incurred in
applying for the job, including expenses in leaving for the job,
including expenses in leaving for Saudi Arabia and plane
ticket, as well as repatriation bond and incidental expenses in
going home to the Philippines in the amounts of P49,000.00
andP20,000.00, respectively, including interests, until the
same will be fully paid;

(4)

Ordering the respondents to pay, jointly and severally,


complainant moral damages in the amount of P150,000.00
and exemplary damages in the amount of P150,000.00,
including interests, until the same will be fully paid;

(5)

Ordering the respondents to pay, jointly and severally,


complainant for and as attorneys fees in the amount
of P68,172.48 or the amount equivalent to 10% of the total
amount of the foregoing claims and damages that may be
awarded by the Honorable Office to the complainant.[11]

In its position paper, petitioner alleged that respondent was deployed for
overseas work as car body builder for its Principal Golden Wings Est. for General
Services and Recruitment in Saudi Arabia for an employment period of 24 months,
with a monthly salary of US$400.00.[12] It insisted that respondent was religiously
paid his salaries as they fell due. After working for a little over seven months,
respondent pleaded with his employer to be allowed to return home since there
were family problems he had to settle personally. Respondent even submitted a
resignation letter[13] dated July 23, 1995.
To support its claim that respondent had been paid his salaries as they fell
due, petitioner submitted in evidence copies of seven payslip[14] authenticated by
the Philippine Labor Attach in Riyadh, Saudi Arabia. Petitioner asserted that since
respondent only worked for a little over seven months and did not finish his
contract, he should pay the cost of the plane ticket. It pointed out that according to
the standard employment contract, the employer would provide the employee with
a free plane ticket for the flight home only if the worker finishes his contract.
Respondent countered that his signatures in the purported payslips were
forged. He denied having received his salaries for the said period, except only for
the SAR100 as monthly allowance. He pointed out that the authentication of the
alleged pay slips and resignation letter before the labor attach in Riyadh is
immaterial, since the documents themselves were falsified.
Respondent further claimed that petitioner required him to pay a P10,000.00
placement fee and that he had to borrow P2,000.00 from a relative. He was then
told that the amount would be considered as an advance payment and that the
balance would be deducted from his salary. He was not, however, given any
receipt. He insisted that the employment contract which he signed indicated that he
was supposed to receive a monthly salary of SAR1,200 for working eight hours a
day, excluding overtime pay. He was repeatedly promised to be furnished a copy of
the contract and was later told that it would be given to his wife, Minda. However,
she was also given the run-around and was told that the contract had already been
given to her husband.

To counter the allegation of forgery, petitioner claimed that there was a great
possibility that respondent had changed his signature while abroad so that he could
file a complaint for illegal dismissal upon his return. The argument that the stroke
and handwriting on the payslip was written by one and the same person is mere
conjecture, as respondent could have requested someone, i.e., the cashier, to
prepare the resignation letter for him. While it is the employer who fills up the pay
slip, respondent could have asked another employee to prepare the resignation
letter, particularly if he (respondent) did not know how to phrase it himself.
Moreover, it could not be presumed that the payslip and resignation letter were
prepared by one and the same person, as respondent is not a handwriting expert.
Petitioner further pointed out that respondent has different signatures, not only in
the pleadings submitted before the Labor Arbiter, but also in respondents personal
documents.
On January 30, 1997, Labor Arbiter Jose De Vera ruled in favor of
respondent on the following ratiocination:
What convinced this Arbitration Branch about the unreliability of the
complainants signature in the payslip is the close semblance of the handwritings
in the payslips and the handwritings in the purported handwritten resignation of
the complainant. It unmistakably appears to this Arbitration Branch that
the payslips as well as the handwritten letter-resignation were prepared by one
and the same person. If it were true that the handwritten letter-resignation was
prepared by the complainant, it follows that he also prepared the payslips because
the handwritings in both documents are exactly the same and identical. But [this]
is quite unbelievable that complainant himself as the payee prepared
the payslips with the corresponding entries therein in his own handwriting. Under
the circumstances, the only logical conclusion is that both the payslips and the
handwritten letter-resignation were prepared and signed by one and the same
person definitely not the complainant.
With the foregoing findings and conclusions, this Arbitration Branch is of
the well-considered view that complainant was not paid his salaries from January
5, 1995 up to July 23, 1995 and that he was unjustifiably dismissed from his
employment when he repeatedly demanded for his unpaid salaries. Respondents
are, therefore, liable to pay the complainant his salaries from January 5, 1995 up
to July 23, 1995 which amount to US$2,640.00 (US$400 x 6.6 mos). Further,
respondents are also liable to the complainant for the latters salaries for the
unexpired portion of his contract up to the maximum of three (3) months pursuant
to Section 10 of RA 8042, which amount to US$1,200.00. Respondents must also
refund complainants plane fare for his return flight. And finally, being compelled
to litigate his claims, it is but just and x x x that complainant must be awarded
attorneys fees at the rate of ten percent (10%) of the judgment award.

WHEREFORE, all the foregoing premises considered, judgment is hereby


rendered ordering the respondents to pay complainant the aggregate sum of
US$3,840.00 or its equivalent in Philippine Currency at the exchange rate
prevailing at the time of payment, and to refund complainants plane fare for his
return flight. Further, respondents are ordered to pay complainant attorneys fees
at the rate of Ten percent (10%) of the foregoing judgment award.[15]

Petitioner appealed the Decision of the Labor Arbiter to the NLRC, alleging
that the Labor Arbiter, not being a handwriting expert, committed grave abuse of
discretion amounting to lack of jurisdiction in finding for respondent. In its
Decision[16] dated December 9, 1997, the NLRC upheld this contention
and remanded the case to the Arbitration Branch of origin for referral to the
government agency concerned for calligraphy examination of the questioned
documents.[17]
The case was then re-raffled to Labor Arbiter Enrico Angelo Portillo.
On September 11, 1998, the parties agreed to a resetting to enable petitioner to
secure the original copies of documents from its foreign principal. However,
on December 9, 1998, the parties agreed to submit the case for resolution based on
the pleadings and on the evidence on record.
This time, the complaint was dismissed for lack of merit. According to Labor
Arbiter Portillo, aside from respondents bare allegations, he failed to substantiate
his claim of poor working conditions and long hours of employment. The fact that
he executed a handwritten resignation letter is enough evidence of the fact that he
voluntarily resigned from work. Moreover, respondent failed to submit any
evidence to refute the pay slips duly signed and authenticated by the labor attach
in Saudi Arabia, inasmuch as their probative value cannot be impugned by mere
self-serving allegations. The Labor Arbiter concluded that as between the oral
allegations of workers that they were not paid monetary benefits and the
documentary evidence presented by employer, the latter should prevail. [18]
Respondent appealed the decision before the NLRC, alleging that the Labor
Arbiter failed to consider the genuineness of the signature which appears in the
purported resignation letter dated July 23, 1995, as well as those that appear in the
seven pay slips. He insisted that these documents should have been endorsed to the
National Bureau of Investigation Questioned Documents Division or the Philippine
National Police Crime Laboratory for calligraphy examination.
The NLRC dismissed the appeal for lack of merit in a
Resolution[19] dated December 27, 2000. It held that the questioned documents

could not be endorsed to the agency concerned since mere photocopies had been
submitted in evidence. The records also revealed that petitioner had communicated
to the foreign employer abroad, who sent the original copies, but there was no
response from respondent. It also stressed that during the December 9, 1998
hearing, the parties agreed to submit the case for resolution on the basis of the
pleadings and the evidence on record; if respondent had wanted to have the
documents endorsed to the NBI or the PNP, he should have insisted that the
documents be examined by a handwriting expert of the government. Thus,
respondent was estopped from assailing the Labor Arbiters ruling.
Unsatisfied, respondent elevated the matter to the CA via petition
for certiorari. He pointed out that he merely acceded to the submission of the case
for resolution due to the inordinate delays in the case. Moreover, the questioned
documents were within petitioners control, and it was petitioner that repeatedly
failed to produce the original copies.
The CA reversed the ruling of the NLRC. According to the appellate court, a
visual examination of the questioned signatures would instantly reveal significant
differences in the handwriting movement, stroke, and structure, as well as the
quality of lines of the signatures; Labor Arbiter Portillo committed patent error in
examining the signatures, and it is the decision of Labor Arbiter De Vera which
must be upheld. The CA also pointed out the initial ruling of the NLRC (Second
Division) dated December 9, 1997 which set aside the earlier decision of Labor
Arbiter De Vera included a special directive to the Arbitration Branch of origin to
endorse the questioned documents for calligraphy examination. However,
respondent Cuambot failed to produce original copies of the documents; hence,
Labor Arbiter Portillo proceeded with the case and ruled in favor of
petitionerG.M.Phils. The dispositive portion of the CA ruling reads:
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby
GRANTED. Accordingly, the assailed Resolutions dated 27 December
2000 and 12 February 2001, respectively, of the NLRC Second Division are
hereby SET ASIDE and the Decision dated 20 February 1997 rendered by Labor
Arbiter Jose De Vera is hereby REINSTATED.[20]

Petitioner filed a motion for reconsideration, which the CA denied for lack
of merit in its Resolution[21] dated February 20, 2004.
Hence, the present petition, where petitioner claims that

THE COURT OF APPEALS GRAVELY ERRED ON A MATTER OF LAW IN


HOLDING THAT LABOR ARBITER ENRICO PORTILLO GRAVELY
ABUSED HIS DISCRETION WHEN HE HELD THAT THE SIGNATURES
APPEARING ON THE QUESTIONED DOCUMENTS ARE THOSE OF THE
PETITIONER.[22]

Petitioner points out that most of the signatures which Labor Arbiter De Vera
used as standards for comparison with the signatures appearing on the questioned
documents were those in the pleadings filed by the respondent long after the
questioned documents had been supposedly signed by him. It claims that
respondent affixed his signatures on the pleadings in question and intentionally
made them different from his true signature so that he could later on conveniently
impugn their authenticity. Petitioner claims that had Labor Arbiter De Vera taken
pains in considering these circumstances, he could have determined that
respondent may have actually intentionally given a different name and slightly
changed his signature in his application, which name and signature he used when
he signed the questioned letter of resignation and payslips, only to conveniently
disown the same when he came back to the country to file the present
case.[23] Thus, according to petitioner, the CA clearly committed a palpable error
of law when it reversed the ruling of the NLRC, which in turn affirmed Labor
Arbiter Portillos decision.
For his part, respondent contends that petitioners arguments were already
raised in the pleadings filed before Labor Arbiter De Vera which had already been
passed upon squarely in the Labor Arbiters Decision of January 30, 1997.
The determinative issues in this case are essentially factual in nature - (a)
whether the signatures of respondent in the payslips are mere forgeries, and (b)
whether respondent executed the resignation letter. Generally, it is not our function
to review findings of fact. However, in case of a divergence in the findings and
conclusions of the NLRC on the one hand, and those of the Labor Arbiter and the
CA on the other, the Court may examine the evidence presented by the parties to
determine whether or not the employee was illegally dismissed or voluntarily
resigned from employment.[24] The instant case thus falls within the exception.
We have carefully examined the evidence on record and find that the petition
must fail.
In its Decision[25] dated December 9, 1997, the NLRC had ordered the case
remanded to the Labor Arbiter precisely so that the questioned documents

purportedly signed/executed by respondent could be subjected to calligraphy


examination by experts. It is precisely where a judgment or ruling fails to make
findings of fact that the case may be remanded to the lower tribunal to enable it to
determine them.[26] However, instead of referring the questioned documents to the
NBI or the PNP as mandated by the Commissions ruling, Labor Arbiter Portillo
proceeded to rule in favor of petitioner, concluding that respondents signatures
were not forged, and as such, respondents separation from employment was purely
voluntary. In fine, then, the Labor Arbiter gravely abused his discretion when he
ruled in favor of petitioner without abiding by the Commissions directive.
We note, however, that a remand of the case at this juncture would only
result in unnecessary delay, especially considering that this case has been pending
since 1995. Indeed, it is this Courts duty to settle, whenever possible, the entire
controversy in a single proceeding, leaving no root or branch to bear the seeds of
future litigation.[27]Hence, the case shall be fully resolved on its merits.
We find that petitioners failure to submit the original copies of the pay slips
and the resignation letter raises doubts as to the veracity of its claim that they were
actually signed/penned by respondent. The failure of a party to produce the original
copy of the document which is in issue has been taken against such party, and has
even been considered as a mere bargaining chip, a dilatory tactic so that such
party would be granted the opportunity to adduce controverting evidence.[28] In
fact, petitioner did not even present in evidence the original copy of the
employment contract, much less a machine copy, giving credence to respondents
claim that he was not at all given a copy of the employment contract after he
signed it. What petitioner presented was a mere photocopy of the OCW Info
Sheet[29] issued by the Philippine Overseas Employment Administration as well as
the Personal Data Sheet[30] which respondent filled up. It bears stressing that the
original copies of all these documents, including the employment contract, were in
the possession of petitioner, or, at the very least, petitioners principal.
Moreover, as correctly noted by the CA, the opinions of handwriting experts,
although helpful in the examination of forged documents because of the technical
procedure involved in the analysis, are not binding upon the courts. [31] As such,
resort to these experts is not mandatory or indispensable to the examination or the
comparison of handwriting. A finding of forgery does not depend entirely on the
testimonies of handwriting experts, because the judge must conduct an independent
examination of the questioned signature in order to arrive at a reasonable
conclusion as to its authenticity.[32] No less than Section 22, Rule 132 of the Rules
of Court explicitly authorizes the court, by itself, to make a comparison of the

disputed handwriting with writings admitted or treated as genuine by the party


against whom the evidence is offered or proved to be genuine to the satisfaction of
the judge. Indeed, the authenticity of signatures is not a highly technical issue in
the same sense that questions concerning, e.g., quantum physics or topology, or
molecular biology, would constitute matters of a highly technical nature. The
opinion of a handwriting expert on the genuineness of a questioned signature is
certainly much less compelling upon a judge than an opinion rendered by a
specialist on a highly technical issue.[33]
Even a cursory perusal of the resignation letter [34] and the handwritten pay
slips will readily show that they were written by only one person. A mere layman
will immediately notice that the strokes and letters in the documents are very
similar, if not identical, to one another. It is also quite apparent from a comparison
of the signatures in the pay slips that they are inconsistent, irregular, with uneven
and faltering strokes.
We also find it unbelievable that after having waited for so long to be
deployed to Saudi Arabia and with the hopes of opportunity to earn a better living
within his reach, respondent would just suddenly decide to abandon his work and
go home due to family problems. At the very least, respondent could have at
least specified the reason or elaborated on the details of such an urgent matter so as
not to jeopardize future employment opportunities.
That respondent also filed the complaint immediately gives more credence to
his claim that he was illegally dismissed. He arrived in the Philippines on July 24,
1995, and immediately filed his complaint for illegal dismissal two days later,
on July 26, 1995.
We are not impervious of petitioners claim that respondent could have
asked another person to execute the resignation letter for him. However, petitioner
failed to present even an affidavit from a representative of its foreign principal in
order to support this allegation.
Indeed, the rule is that all doubts in the implementation and the
interpretation of the Labor Code shall be resolved in favor of labor, [35] in order to
give effect to the policy of the State to afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers, and to assure the rights of
workers to self-organization, collective bargaining, security of tenure, and just and

humane conditions of work.[36] We reiterate the following pronouncement


in Nicario v. National Labor Relations Commission:[37]
It is a well-settled doctrine, that if doubts exist between the evidence
presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter. It is a time-honored rule that in controversies
between a laborer and his master, doubts reasonably arising from the
evidence, or in the interpretation of agreements and writing should be
resolved in the formers favor. The policy is to extend the doctrine to a
greater number of employees who can avail of the benefits under the law,
which is in consonance with the avowed policy of the State to give maximum
aid and protection of labor.

Moreover, one who pleads payment has the burden of proving it. The reason
for the rule is that the pertinent personnel files, payrolls, records, remittances and
other similar documents which will show that overtime, differentials, service
incentive leave, and other claims of workers have been paid are not in the
possession of the worker but in the custody and absolute control of the employer.
Thus, the burden of showing with legal certainty that the obligation has been
discharged with payment falls on the debtor, in accordance with the rule that one
who pleads payment has the burden of proving it. [38] Only when the debtor
introduces evidence that the obligation has been extinguished does the burden shift
to the creditor, who is then under a duty of producing evidence to show why
payment does not extinguish the obligation. [39] In this case, petitioner was unable to
present ample evidence to prove its claim that respondent had received all his
salaries and benefits in full.
IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED for lack
of merit. The Decision of the Court of Appeals in CA-G.R. SP No. 64744
is AFFIRMED. Costs against the petitioners.
SO ORDERED.

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