JAKA FOOD PROCESSING CORPORATION, vs.

DARWIN PACOT, ROBERT PAROHINOG, DAVID BISNAR, MARLON

DOMINGO,
RHOEL
LESCANO
and
JONATHAN
CAGABCAB.
G.R.
No.
151378.
March
28,
2005
Facts: Respondents were earlier hired by petitioner JAKA Foods Processing Corporation until the latter terminated their
employment because the corporation was in dire financial straits. It is not disputed, however, that the termination was
effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a
written notice upon the employees and the Department of Labor and Employment at least one (1) month before the
intended date of termination. Respondents filed complaints for illegal dismissal, underpayment of wages and nonpayment
of service incentive leave and 13th month pay against JAKA. The Labor Arbiter rendered a decision declaring the
termination illegal and ordering JAKA to reinstate respondents with full backwages, and separation pay if reinstatement is
not possible. The Court of Appeals reversed said decision and ordered respondent JAKA to pay petitioners separation pay
equivalent to one (1) month salary, the proportionate 13th month pay and, in addition, full backwages from the time their
employment
was
terminated.
Issue: What are the legal implications of a situation where an employee is dismissed for cause but such dismissal was
effected without the employers compliance with the notice requirement under the Labor Code?
Held: It was established that there was ground for respondents dismissal, i.e., retrenchment, which is one of the
authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply
with the notice requirement under the same Article. Considering the factual circumstances in the instant case, the Court
deem it proper to fix the indemnity at P50, 000.00. The Court of Appeals have been in error when it ordered JAKA to pay
respondents separation pay equivalent to one (1) month salary for every year of service. In all cases of business closure
or cessation of operation or undertaking of the employer, the affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary social economic force, affording full protection to its rights as
well as its welfare. The exception is when the closure of business or cessation of operations is due to serious business
losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for
obvious reasons.
Probationary Employment: It Is Primordial That At The Start Of The Probationary Period, The Standards For
Regularization Be Made Known To The Employee
February 9, 2015 by The Lawyer's Post
FACTS: William filed a case for illegal dismissal against Univac Development Inc. and several of its employees. According
to him, he was hired on probationary basis as legal assistant of the company on August 23, 2004. However, on February
15, 2005, eight days before the completion of his six months probationary period, he was informed that he was being
terminated due to cost-cutting measures. He asked for a 30-day extension, but was ordered to leave immediately. On the
other hand, the company claimed that prior to his employment, it informed him of the standards for regularization, such as
maintaining and safekeeping of case folders, and prior coordination with the companys lawyers. On January 5, 2005, a
company meeting was held where William expressed his intention to leave work because he wanted to review for the bar
examinations. Thus, it assumed that William pushed through with his plan when he did not report for work anymore on
February 16, 2005. Thius, William was not terminated but abandoned his job.
The Labor Arbiter ruled in favour of the company. It held that as a law graduate, William was presumed to know that his
probationary employment would soon end. Considering that he was dismissed eight days prior to the end of his
probationary employment, however, it awarded him eight days back wages. The NLRC affirmed the LA ruling in toto,
hence William filed a petition for certiorari with the Court of Appeals, which reversed the NLRC ruling. It held that the
company failed to apprise William of the standards of regularization, and failed to make an evaluation of his performance,
making the dismissal illegal. The fact that the company immediately hired another person to replace William after he left is
proof that William did not abandon his job but was instead dismissed. The company thus elevated by way of petition for
review on certiorari the CA decision
ISSUES: Whether or not
1.) The CA ruling was not in accord with law and jurisprudence;
2.) In ruling that there was actual dismissal when the case filed was constructive dismissal
3.) The CA failed to consider that the company is now under a state of rehabilitation, thus all claims against it should be
suspended pursuant to the ruling in PAL vs. Zamora
HELD: The Supreme Court:
The petition is without merit.
Under Article 223 of the Labor Code, the decision of the NLRC becomes final and executory after the lapse of ten
calendar days from receipt thereof by the parties. However, the adverse party is not precluded from assailing the decision
via petition for certiorari under Rule 65 of the Rules of Court before the CA and then to this Court via a petition for review

under Rule 45.[1] Thus, contrary to the contention of petitioner, there is no violation of the doctrine of immutability of
judgment when respondent elevated the matter to the CA which the latter consequently granted.
The power of the CA to review NLRC decisions has already been thoroughly explained and clarified by the Court in
several cases[2], to wit:
The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as
early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. This Court held that the
proper vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this
action should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is
already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act
Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg.
129 as amended, known as the Judiciary Reorganization Act of 1980), the Court of Appeals pursuant to the exercise of
its original jurisdiction over Petitions for Certiorari is specifically given the power to pass upon the evidence, if and
when necessary, to resolve factual issues.[3]
We agree with petitioner that in a special civil action for certiorari, the issues are confined to errors of jurisdiction or grave
abuse of discretion. In exercising the expanded judicial review over labor cases, the Court of Appeals can grant the
petition if it finds that the NLRC committed grave abuse of discretion by capriciously, whimsically, or arbitrarily
disregarding evidence which is material or decisive of the controversy which necessarily includes looking into the
evidence presented by the parties.[4] In other words, the CA is empowered to evaluate the materiality and significance of
the evidence which is alleged to have been capriciously, whimsically, or arbitrarily disregarded by the NLRC in relation to
all other evidence on record.[5] The CA can grant a petition when the factual findings complained of are not supported by
the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings
of the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the case.[6] Thus, contrary to
the contention of petitioner, the CA can review the finding of facts of the NLRC and the evidence of the parties to
determine whether the NLRC gravely abused its discretion in finding that there was no illegal dismissal against
respondent.[7]
Now on the main issue of whether respondent was illegally dismissed from employment by petitioner.
Article 281 of the Labor Code and its Implementing Rules describe probationary employment and set the guidelines to be
followed by the employer and employee, to wit[8]:
Art. 281. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services
of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at
the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular
employee.
LABOR CODE, Implementing Rules of Book VI, Rule I, Section 6
Sec. 6. Probationary employment. There is probationary employment where the employee, upon his engagement, is
made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based
on reasonable standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
xxxx
(c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or
authorized cause, when he fails to qualify as a regular employee in accordance with the reasonable standards prescribed
by the employer.
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which
he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the
employee at that time, he shall be deemed a regular employee.
It is undisputed that respondent was hired as a probationary employee. As such, he did not enjoy a permanent status.
Nevertheless, he is accorded the constitutional protection of security of tenure which means that he can only be dismissed
from employment for a just cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known to him by the employer at the time of his engagement.[9]
It is primordial that at the start of the probationary period, the standards for regularization be made known to the
probationary employee.1[10] In this case, as held by the CA, petitioner failed to present adequate evidence to
substantiate its claim that respondent was apprised of said standards. It is evident from the LA and NLRC decisions that
they merely relied on surmises and presumptions in concluding that respondent should have known the standards
considering his educational background as a law graduate. Equally important is the requirement that in order to invoke
failure to meet the probationary standards as a justification for dismissal, the employer must show how these standards
have been applied to the subject employee. In this case, aside from its bare allegation, it was not shown that a
performance evaluation was conducted to prove that his performance was indeed unsatisfactory.
Indeed, the power of the employer to terminate a probationary employee is subject to three limitations, namely: (1) it must
be exercised in accordance with the specific requirements of the contract; (2) the dissatisfaction on the part of the
employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and (3) there must be no

unlawful discrimination in the dismissal.[11] In this case, not only did petitioner fail to show that respondent was apprised
of the standards for regularization but it was likewise not shown how these standards had been applied in his case.
Pursuant to well-settled doctrine, petitioners failure to specify the reasonable standards by which respondents alleged
poor performance was evaluated as well as to prove that such standards were made known to him at the start of his
employment, makes respondent a regular employee. In other words, because of this omission on the part of petitioner,
respondent is deemed to have been hired from day one as a regular employee.[12]
To justify the dismissal of an employee, the employer must, as a rule, prove that the dismissal was for a just cause and
that the employee was afforded due process prior to dismissal.1[13] We find no reason to depart from the CA conclusion
that respondents termination from employment is without just and valid ground. Neither was due process observed,
making his termination illegal. He is, therefore, entitled to the twin relief of reinstatement and backwages granted under
the Labor Code.[14] However, as aptly held by the CA, considering the strained relations between petitioner and
respondent, separation pay should be awarded in lieu of reinstatement. This Court has consistently ruled that if
reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal until the date the
decision becomes final.[15] Separation pay, on the other hand, is equivalent to at least one month pay, or one month pay
for every year of service, whichever is higher (with a fraction of at least six months being considered as one whole
year[16]), computed from the time of employment or engagement up to the finality of the decision.[17]
Having been forced to litigate in order to seek redress of his grievances, respondent is entitled to the payment of
attorneys fees equivalent to 10% of his monetary award.[18] Pursuant to prevailing jurisprudence, legal interest shall be
imposed on the monetary awards herein granted at the rate of 6% per annum from date of termination until full payment.
[19] One final point. Petitioner claims that the instant case is covered by the stay order issued by the rehabilitation court
in a rehabilitation case it earlier filed. The Court, however, takes judicial notice that in Asiatrust Development Bank v. First
Aikka Development, Inc.[20]docketed as G.R. No. 179558, this Court rendered a decision on June 1, 2011 dismissing the
petition for rehabilitation filed by petitioner before the RTC of Baguio City, Branch 59, for lack of jurisdiction. Petitioner
cannot, therefore, rely on the orders issued by said court relative to its alleged rehabilitation.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated October 24, 2007 and
Resolution dated March 14, 2008 in CA-G.R. SP No. 96495, are AFFIRMED with MODIFICATION. Petitioner Univac
Development, Inc. is liable to pay respondent William M. Soriano the following: (1) backwages, inclusive of allowances
and other benefits, or their monetary equivalent, computed from the date of his dismissal up to the finality of this decision;
(2) separation pay in lieu of reinstatement equivalent to at least one month pay, or one month pay for every year of
service, whichever is higher (with a fraction of at least six months being considered as one whole year), computed from
the time of his employment or engagement up to the finality of the decision; (3) attorneys fees equivalent to 10% of the
monetary awards; and (4) interest at 6% per annum from date of termination until full payment.
SO ORDERED.
THIRD DIVISION, G.R. No. 182072, June 28, 2013, UNIVAC DEVELOPMENT, INC., PETITIONER, VS. WILLIAM M.
SORIANO, RESPONDENT.
G.R. No. 158693 November 17, 2004] VIRGILIO AGABON, et al. v. NLRC
FACTS: Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as gypsum and cornice installers from January
1992 until Feb 1999. Their employment was terminated when they were dismissed for allegedly abandoning their work. Petitioners Agabon then
filed a case of illegal dismissal.
The LA ruled in favor of the spouses and ordered Rivierato pay them their money claims. The NLRC reversed the LA, finding that the Agabons
were indeed guilty of abandonment. The CA modified the LA by ruling that there was abandonment but ordering Riviera to pay the Agabons
money claims. The arguments of both parties are as follows:
The Agabons claim, among others that Riviera violated the requirements of notice and hearing when the latter did not send written letters
of termination to their addresses.
Riviera admitted to not sending the Agabons letters of termination to their last known addresses because the same would be futile, as the
Agabons do not reside there anymore. However, it also claims that the Agabons abandoned their work. More than once, they subcontracted
installation works for other companies. They already were warned of termination if thesame act was repeated, still, they disregarded the warning.
ISSUES
1.Whether the Agabons were illegally dismissed
2. Whether Riviera violated the requirements of notice and hearing
3. Is the violation of the procedural requirements of notice and hearing for termination of employees a violation of the Constitutional due process?
4. What are the consequences of violating the procedural requirements of termination?
RULING: Valid dismissal but violation of statutory due process = payment of nominal damages (P30,000) &
balance of 13
The month pay, etc.
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282specifies the grounds for just dismissal, to wit:
a. Serious misconduct or willful disobedience of the lawful orders of the employer or his duly authorized representative in connection with the
employees work
b. Gross and habitual neglect of the by the employee of his duties( includes abandonment)

c.

Fraud or willful breach of the trust reposed by the employer or his duly authorized representative to the employed.

Commission of a crime or offense by the employee against the person of the employer or any member of his immediate family or his duly
authorized representative.
Any other causes analogous to the foregoing. To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b. A clear intention to sever e-e relationship, manifested by overt acts
Here, the Agabons were frequently absent from work for having performed installation work for another company, despite prior warning
given by Riviera. This clearly establishes an intention to sever the e-e relationship between them, and which constitutes abandonment.
2. Yes. While the employer has the right to expect good performance, diligence, good conduct and loyalty from its employees, it also has the
duty to provide just compensation to his employees and to observe the procedural requirements of notice and hearing in
the termination of his employees.
Procedure of termination
(Omnibus Rules Implementing the Labor Code):
a.A written notice to the employee specifying the grounds for termination and giving the employee reasonable opportunity to be heard
b. A hearing where the employee is given the opportunity to respond to the charges against him and present evidence or rebut the evidence
presented against him (if he so requests)c.
A written notice of termination indicating that grounds have been established to justify his termination upon due consideration of all circumstances
In this case, Riviera failed to notify the Agabons of their termination to their last known addresses. Hence, they violated the procedural requirement
laid down by the law in the termination of employees.
3. No. Constitutional due process is that provided under the Constitution, which involves the protection of the individual against
governmental oppression and the assurance of his rights In civil, criminal and administrative proceedings; statutory due process is that
found in the Labor Code and its Implementing Rules and protects the individual from being unjustly terminated without just or authorized cause
after notice and hearing.
The two are similar in that they both have two aspects: substantive due process and procedural due process. However, they
differ in that under the Labor Code, the first one refers to the valid and authorized causes of employment termination, while the second one refers
to the manner of dismissal. A denial of statutory due process is not the same as a denial of Constitutional due process for reasons enunciated in
Serrano v. NLRC.
4. The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication of the latter for violating their right to notice and
hearing. The penalty is in the nature of a penalty or indemnification, the amount dependent on the facts of each case, including the nature
of gravity of offense of the employer. In this case, the
Serrano doctrine was re-examined. First, in the Serrano case, the dismissal was upheld, but it was held to be ineffectual (without legal
effect). Hence, Serrano was still entitled to the payment of his back wages from the time of dismissal until the promulgation of the court of the
existence of an authorized cause. Further, he was entitled to his separation pay as mandated under Art.283. The ruling is unfair to employers and
has the danger of the following consequences:
a. The encouragement of filing frivolous suits even by notorious employees who were justly dismissed but were deprived of statutory due
process; they are rewarded by invoking due process
b. It would create absurd situations where there is just or authorized cause but a procedural infirmity invalidates the termination, ie an
employee who became a criminal and threatened his co-workers lives, who fled and could not be found
c. It could discourage investments that would generate employment in the economy
Second , the payment of back wages is unjustified as only illegal termination gives the employee the right to be paid full backwages. When the
dismissal is valid or upheld, the employee has no right to back wages.
ADDITIONAL NOTES:1.
Dismissals based on just causes:
acts or omissions attributable tothe employee; no right to claim back wages or to pay separation pay (separation pay is subject to exception, ie if
termination is not based on serious misconduct or a conduct reflecting the moral depravity of a person, separation pay may be granted by reason
of social justice)
Dismissals based on authorized causes:
involve grounds provided under the Labor Code; employee (and DOLE) is entitled the payment of separation pay (redundancy and installation of
labor-saving devices: 1 month pay or 1 month/yr of service, whichever s higher; retrenchment and closure or cessation of business: 1month pay or
month per year of service, whichever is higher)
Illegal termination:
employee is entitled to the payment of full back wages as well as reinstatement without loss of seniorityrights and other privileges, inclusive of
allowances and other monetary claims from the time compensation was withheld until reinstatement; if reinstatement is not possible, separation
pays shall be given.

A Quitclaim Executed Without Consideration Do Not Bar A Case For Illegal Dismissal
March 3, 2015 by The Lawyer's Post
FACTS: Juvenstein was hired by Philippine Spring Water Resources Inc., as Vice-President for Sales and Marketing for
the Bulacan-South Luzon Area. In November, 2004, he was designated as over-all chairman for the activities leading to
the inauguration of the Bulacan branch and Christmas party of the company. A few days after his designation, he called all
committee chairpersons for a meeting to discuss the activity, which was reset to the next day because several guests of
Juvenstein arrived to discuss the legal problems of the company with respect to the inauguration. The next day he
requested Vicky, the vice-president for administration, to preside over the meeting since he had a prior appointment in
Makati with major clients. He learned that the meeting did not push through because Vicky accompanied the daughter of
Danilo, the CEO and president of the company. The meetings proceeded without his presence, and Vicky took charge of
the preparation. At the actual event, he entertained some guests, but his attention was called when Danilo got furious
because he was not included in the program to give an inaugural speech, nor his name called in the opening remarks.
According to Juvenstein, it is his understanding that Danilo does not want to participate in the program, thus that portion
was marked optional. The next day, he was placed on preventive suspension for 30 days and made to explain why
Danilo was not recognised in the speech. Upon his return, he was prevented from reporting for work. In March, 2005, he
was informed via a Memorandum dated January 31, 2005 that his services were terminated effective February 1, 2005. A
clearance certificate was issued to him and payment made in the amount of P43,998.56 after he executed a Release,
Waiver and Quitclaim. He thus filed a complaint for illegal dismissal. However, the Labor Arbiter dismissed his case under
the principle of estoppel. He ratiocinated by saying a person of sufficient intelligence like Juvenstein could not have been
forced to sign the Release, Waiver and Quitclaim, thus there was reasonable consideration in the waiver sufficient for
Juvenstein. The latter appealed his case to the NLRC, which found in his favour, saying the execution of the waiver did
not bar him from filing a case for illegal dismissal, especially considering that there was no reasonable consideration. On
appeal to the CA by the company, the Court of Appeal agreed at first that Juvenstein was illegally dismissed, but upheld
the validity of the quitclaim. Only a declaration of illegality of dismissal will an employee be entitled to separation pay or
back wages. In this case, the execution of the quitclaim prevented Juevenstein from claiming backwages, according to the
CA. Juvenstein, however, argued in his motion for reconsideration of the CA decision that the ruling ran counter to the
reliefs provided under Art. 279 of the Labor Code. Ruling on the motion for reconsideration, the CA reversed itself and
ruled Juvenstein was illegally dismissed and entitled to full back wages and separation pay in lieu of reinstatement, in
view of the strained relations with the company. The company elevated the case to the Supreme Court arguing that the
CA erred in applying Art. 279 in determining the legality of his dismissal.

HELD: The Supreme Courtt.

The Court resolves the issues in seriatim. The petitioners resorted to a wrong mode of appeal; Rule and Exceptions.
There is a patent error in the mode of appeal selected by the petitioners. It is well-settled that in assailing a decision of the
CA, the available remedy is to file a petition for review under Rule 45 and not the extraordinary writ of certiorari under
Rule 65. The proper remedy is to file a petition for review on certiorari under the Rules of Court which should be instituted
within fifteen (15) days from receipt of the assailed decision or resolution. In a long line of cases, the Court has
consistently emphasized that after the lapse of the 15-day period to file a petition for review on certiorari, the special civil
action of certiorari under Rule 65 is not, and cannot be, a substitute for a lost remedy of appeal.[1]
In the case at bench, the petitioners received the assailed Resolution of the CA on December 17, 2012. The subject
petition for certiorari was filed on February 5, 2013, evidently beyond the 15-day period to file an appeal under Rule 45. In
fact, even if a 30-day extension would be considered, the petition for certiorari was still filed out of time.

Although the petitioners cause is purportedly grounded on grave abuse of discretion, they still cannot avail of the Rule 65
remedy because an appeal is available under Rule 45. One of the requisites of certiorari is that there be no available
appeal or any plain, speedy and adequate remedy. Where an appeal is available, certiorari will not prosper, even if the
ground therefor is grave abuse of discretion.
At any rate, in accordance with the liberal spirit pervading the Rules of Court and in the interest of substantial justice, this
Court has before treated a petition for certiorari as a petition for review on certiorari, particularly (1) if the petition for
certiorari was filed within the reglementary period within which to file a petition for review on certiorari; (2) when errors of
judgment are averred; and (3) when there is sufficient reason to justify the relaxation of the rules.[2] In this case,
considering the monetary awards to Mahilum, the Court opts to resolve said issue.
Mahilum was a regular employee
In insisting that Mahilum was a contractual employee and that the period of probation depended on the agreement of the
parties, the petitioners proffer the Memorandum of Agreement[3] entered into by the parties which provides:
6. THAT SECOND PARTY upon appointment shall be in a Probationary status for the next six (6) months and may
be extended a permanent appointment only if he can satisfactorily perform his duties and functions as defined in
the Personnels Manual/Company House Rules on Discipline.
It is the petitioners theory that Mahilum, who was hired in June 2004, was not a regular employee at the time of his
dismissal because his probationary status would end only if he could satisfactorily perform his duties and functions as
defined in the Personnels Manual/Company House Rules of Discipline. This suspensive condition failed to arise.
For his part, Mahilum insists that he was a regular employee entitled to security of tenure. Having been hired in June
2004, he must be considered to have already served the company for eight (8) months at the time of his dismissal on
February 1, 2005. This fact calls for the application of Article 281 of the Labor Code:
Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been
engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a probationary period shall be considered a regular
employee. [Emphasis supplied]
Contrary to the claims of the petitioners, Mahilum was correctly considered by the NLRC and CA as a regular employee.
No grave abuse of discretion may be attributed for the application of Article 279 of the Labor Code[4] in determining the
legality of Mahilums dismissal.
A probationary employee, like a regular employee, enjoys security of tenure. In cases of probationary employment,
however, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the
Labor Code, that is, the probationary employee may also be terminated for failure to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the time of the engagement.
Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the
following: (1) a just or (2) an authorized cause and (3) when he fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer.[5]
As applied to the petitioners arguments, it would seem that PSWRI and Lua now invoke the first and third ground for
Mahilums termination. The Court, however, cannot subscribe to the premise that Mahilum failed to qualify as a regular
employee when he failed to perform at par with the standards made known by the company to him. In this case, it is clear
that the primary cause of Mahilums dismissal from his employment was borne out of his alleged lapses as chairman for
the inauguration of the Bulacan plant companys Christmas party. In fact, the termination letter to him cited loss of trust
and confidence as a ground for his dismissal. Under the circumstances, the petitioners may not be permitted to belatedly
harp on its choice not to extend his alleged probationary status to regular employment as a ground for his dismissal.
Besides, having been allowed to work after the lapse of the probationary period, Mahilum became a regular employee. He
was hired in June 2004 and was dismissed on February 5, 2005. Thus, he served the company for eight (8) months. This
is in consonance with CALS Poultry Supply Corporation v. Roco[6], where the Court ruled that the computation of the 6month probationary period was reckoned from the date of appointment up to the same calendar date of the 6th month
following.
Mahilum was illegally dismissed
According to the petitioners, Mahilums behavior during the inauguration/party was allegedly tantamount to: 1] serious
misconduct, as displayed by a drinking binge with his own visitors causing the shame and humiliation of Lua; and 2] willful
disobedience, as shown by his refusal to carry out legitimate orders.

As previously explained, Mahilum was a regular employee who was entitled to security of tenure. Thus, he could only be
dismissed from service for causes provided in Article 282 of the Labor Code.[7] At this point, it bears stressing that the
NLRC and the CA, in their decisions, both found Mahilum to have been illegally dismissed.
The well-entrenched rule, especially in labor cases, is that findings of fact of quasi-judicial bodies, like the NLRC, are
accorded with respect, even finality, if supported by substantial evidence. Particularly when passed upon and upheld by
the CA, they are binding and conclusive upon the Court and will not normally be disturbed. Although this doctrine is not
without exceptions, the Court finds that none is applicable to the present case. Here, the CA affirmed the ruling of the
NLRC and adopted as its own the latters factual findings as to Mahilums illegal dismissal. Consequently, the Court finds
no reason to depart from the finding that Mahilums failure to effectively discharge his assignment as the over-all chairman
of the festivities was due to mere inadvertence and the mistaken belief that he had properly delegated the details of the
program to another officer.
Further, his designation as the chairman of the whole affair did not form part of his duty as a supervisor. Mahilum was
engaged to supervise the sales and marketing aspects of PSWRIs Bulacan Plant. Verily, the charge of loss of trust and
confidence had no leg to stand on, as the act complained of was not work-related. Simply put, the petitioners were not
able to prove that Mahilum was unfit to continue working for the company. In the words of the CA:
Even as jurisprudence has distinguished the treatment of managerial employees or employees occupying positions of
trust and confidence from that of rank-and-file personnel, insofar as the application of the doctrine of trust and confidence
is concerned, such is inapplicable to the instant case since as above-stated, private respondents lapse was justified,
unintentional, without deliberate intent and unrelated to the duty for which he was engaged.
Likewise, warranting the agreement of the Court is the finding of the CA in its Amended Decision that the quitclaim
executed by Mahilum did not operate to bar a cause of action for illegal dismissal. That the amounts received by Mahilum
were only those owing to him under the law indeed bolstered the fact that the quitclaim was executed without
consideration. Suffice it to say, the subject quitclaim may not be considered as a valid and binding undertaking.
Entitlement to monetary claims
Article 279 of the Labor Code provides that an employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges, to full back wages, inclusive of allowances, and to other
benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of
his actual reinstatement. Due to the strained relations of the parties, however, the payment of separation pay has been
considered an acceptable alternative, when reinstatement is no longer desirable or viable. On the one hand, such
payment liberates the employee from what could be a highly oppressive work environment. On the other, the payment
releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer
trust.[8] Thus, as an illegally or constructively dismissed employee, the respondent is entitled to: (1) either reinstatement,
if viable, or separation pay, if reinstatement is no longer viable; and (2) back wages. These two reliefs are separate and
distinct from each other and are awarded conjunctively.[9]
Mahilum, as a regular employee at the time of his illegal dismissal, is entitled to separation pay and back wages,
computed from the time of his dismissal up to the finality of the decision. As correctly ruled by the NLRC[10],
reinstatement is no longer viable considering the circumstances of animosity between Mahilum and Lua.
Propriety of awarding commissions and damages
Be that as it may, the Court resolves to delete the inclusion of 0.25% commission on cash and delivery sales as part of
Mahilums back wages.
Back wages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. They
are a reparation for the illegal dismissal of an employee based on earnings which the employee would have obtained,
either by virtue of a lawful decree or order, as in the case of a wage increase under a wage order, or by rightful
expectation, as in the case of ones salary or wage. The outstanding feature of back wages is thus the degree of
assuredness to an employee that he would have had them as earnings had he not been illegally terminated from his
employment. [Emphasis supplied]
Back wages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. They
represent reparation for the illegal dismissal of an employee based on earnings which the employee would have obtained,
either by virtue of a lawful decree or order, as in the case of a wage increase under a wage order, or by rightful
expectation, as in the case of ones salary or wage. The outstanding feature of back wages is the degree of assuredness
to an employee that he would have had them as earnings had he not been illegally terminated from his employment.[11]

It is well-established in jurisprudence that the determination of whether or not a commission forms part of the basic salary
depends upon the circumstances or conditions for its payment. In Phil Duplicators, Inc. v. NLRC[12] the Court held that
commissions earned by salesmen form part of their basic salary. The salesmens commissions, comprising a predetermined percentage of the selling price of the goods sold by each salesman, were properly included in the term basic
salary for purposes of computing the 13th month pay. The salesmens commissions are not overtime payments, nor profitsharing payments nor any other fringe benefit, but a portion of the salary structure which represents an automatic
increment to the monetary value initially assigned to each unit of work rendered by a salesman. On the other hand, in
Boie-Takeda Chemicals, Inc. v. De la Serna[13], the so-called commissions paid to or received by medical representatives
were excluded from the term basic salary because these were paid to the medical representatives and rank-and-file
employees as productivity bonuses, which were generally tied to the productivity, or capacity for revenue production, of a
corporation and such bonuses closely resemble profit-sharing payments and had no clear direct or necessary relation to
the amount of work actually done by each individual employee.
In Mahilums case, Phil. Duplicator cannot be automatically applied without considering his position as Vice-President for
sales and marketing of the PSWRIs Bulacan-South Luzon Area. This factor constrains the Court to hold that Mahilums
0.25% commission based on the monthly sales and 0.25% commission for cash payments must be taken to come in the
nature of overriding commission, not sales commission. The latter is not properly includable in the basic salary as it must
be earned by actual market transactions attributable to the claimant. Curiously, Mahilum did not comment on the
petitioners objection to the award. Not being a salesman who directly effected any sale of a product, the commission
embodied in the agreement partook of the nature of profit-sharing business based on quota. In fine, the alleged
commissions were profit-sharing payments and had no clear, direct or necessary relation to the amount of work he
actually performed.
For said reason, Mahilums backwages must be pegged at his basic salary, excluding the commissions mentioned by the
NLRC, to be computed from the time of his dismissal up to the finality of this decision. Nonetheless, the award of
backwages shall earn legal interest at the rate of six percent (6%) per annum in accordance with prevailing jurisprudence.
[14]
Finally, the Court resolves to delete the award for moral and exemplary damages in favor of Mahilum. Worth reiterating is
the rule that moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or
constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy.
Likewise, exemplary damages may be awarded if the dismissal was effected in a wanton, oppressive or malevolent
manner.[15] No evidence thereof was presented in this case.
Mahilum, however, is entitled to attorneys fees in the amount of ten percent (10%) of his total monetary award, having
been forced to litigate in order to seek redress of his grievances, as provided in Article 111 of the Labor Code [16], as
amended, and existing jurisprudence.[17]
WHEREFORE, the petition is PARTIALLY GRANTED. The July 23, 2010 Amended Decision and the October 31, 2012
Resolution of the Twentieth Division of the Court of Appeals in CA G.R. SP No. 02636 are AFFIRMED with
MODIFICATION.
Accordingly, Philippine Spring Water Resources Inc. is hereby ordered to pay Juvenstein B. Mahilum, his separation pay,
full backwages inclusive of his basic salary, proportionate 13th month pay, and unused leave credits, to be computed
based on his salary at the time of his illegal termination and attorneys fees.
These payments shall earn legal interest at the rate of six (6%) percent per annum reckoned from their due date.
SO ORDERED.
THIRD DIVISION, G.R. No. 205278, June 11, 2014, PHILIPPINE SPRING WATER RESOURCES INC. /DANILO Y.
LUA , PETITIONERS, VS. COURT OF APPEALS AND JUVENSTEIN B. MAHILUM, RESPONDENTS.

Mere Failure To Serve The Notice Of Appeal And The Appeal Memorandum Upon The Opposing Party Does Not Bar The
NLRC From Giving Due Course To An Appeal
July 23, 2015 by The Lawyer's Post
The Facts: Lei Sheryll Fernandez (petitioner) filed a case for illegal dismissal with prayer for payment of her statutory
benefits against Botica Claudio, represented by Guadalupe Jose (respondent). After hearings, the Labor Arbiter held that
while just cause attended Fernandezs dismissal based on the finding that she went on AWOL, the same was done
without procedural due process, thus, he ordered the respondent to pay Fernandez P11,700.00 as separation pay as well
as P14,040.00 representing three (3) years of her unpaid 13th month pay, but denied her claims for overtime pay and

moral/exemplary damages for lack of factual and legal bases. Dissatisfied, Fernandez appealed the LA ruling to the
NLRC, furnishing a copy of her Notice of Appeal and Memorandum of Appeal by registered mail to one Atty. Ramon E.
Solis, Jr., Counsel for respondents, No. 5 Sto. Nino St., SFDM, 1100 Quezon City.The NLRC granted Fernandezs appeal
on March 15, 2010. It issued an Entry of Judgment on June 1, 2010, declaring its Resolution final and executory on May
18, 2010, thus the Labor Arbiter granted Fernandezs motion for execution. On January 20, 2011, respondent Jose filed a
Motion for Reconsideration of the NLRC Resolution, without disclosing the date when she received the NLRC Resolution.
Without the NLRC acting on the first Motion for Reconsideration, Jose filed a second Motion for Reconsideration. She
then filed a petition for certiorari with the Court of Appeals, averring that she secured a copy of the NLRC Resolution and
LA Order on February 8, 2010 and filed a motion for reconsideration therefrom on April 12, 2011 (referring to her second
motion for reconsideration dated February 2, 2011); all the while her motions for reconsiderations with the NLRC remained
pending as of the filing of the petition for certiorari.
The Court of Appeals granted Joses petition for certiorari, holding that the NLRC committed grave abuse of discretion
when it took cognisance of Fernandezs appeal despite her failure to furnish Jose with copies of her notice of appeal and
memorandum appeal in violation of Article 223 of the Labor Code; copies of Fernandezs notice of appeal and appeal
memorandum were sent to one Atty. Ramon E. Solis, Jr., who was her (Fernandezs) own former counsel, and not Joses.
Thus, the CA held that Joses right to due process was violated; Fernandezs appeal of the LA decision was never
perfected, hence the NLRC resolution acted without authority when it entertained her appeal. The NLRC Resolution and
entry of judgment as well as the LA order were null and void. Fernandez elevated the case to the Supreme Court.
The Issue
Whether or not the Court of Appeals erred in granting the petition for certiorari filed by Jose.
The Ruling:
The petition is meritorious.
At the outset, the Court notes that the CA gravely abused its discretion in giving due course to respondents Rule
65 certiorari petition despite its finding that the latter still had a pending motion for reconsideration from the Decision dated
March 15, 2010 before the NLRC1. It is settled that the filing of a motion for reconsideration from the order, resolution or
decision of the NLRC is an indispensable condition before an aggrieved party can avail of a petition for certiorari.2 This is
to afford the NLRC an opportunity to rectify its perceived errors or mistakes, if any.3 Hence, the more prudent recourse for
respondent should have been to move for the immediate resolution of its motion for reconsideration before the NLRC
instead of filing a petition for certiorari before the CA. 4 Having failed to do so, her petition for certiorari was prematurely
filed,5 and the CA should have dismissed the same.

On the merits, the Court finds that the CA erred in declaring that the failure of Fernandez to furnish Jose with copies of her
notice of appeal and memorandum of appeal before the NLRC deprived the latter of her right to due process. 6
While Article 2237 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the NLRC 8 require
the party intending to appeal from the LAs ruling to furnish the other party a copy of his memorandum of appeal, the Court
has held that the mere failure to serve the same upon the opposing party does not bar the NLRC from giving due course
to an appeal.9 Such failure is only treated as a formal lapse, an excusable neglect, and, hence, not a jurisdictional defect
warranting the dismissal of an appeal.10 Instead, the NLRC should require the appellant to provide the opposing party
copies of the notice of appeal and memorandum of appeal. 11
In this case, however, the NLRC could not be expected to require compliance from Fernandez, the appellant, since it was
not aware that the opposing party, Jose, was not notified of her appeal. Hence, it cannot be faulted in relying on
Fernandezs representation that she had sent Jose, through her counsel, a copy of her memorandum of appeal by
registered mail,12 as evidenced by Registry Receipt No. 006511.13
More significantly, it is undisputed that Jose eventually participated in the appeal proceedings by filing not only one but
two motions for reconsideration from the NLRC Resolution, thereby negating any supposed denial of due process on her
part. As held in the case of Angeles v. Fernandez,14 the availment of the opportunity to seek reconsideration of the action
or ruling complained of in labor cases amounts to due process. 15 After all, the essence of due process is simply the
opportunity to be heard or as applied in administrative proceedings, an opportunity to explain ones side or an opportunity
to seek a reconsideration of the action or ruling complained of. What the law prohibits is absolute absence of the
opportunity to be heard, thus, an aggrieved party cannot feign denial of due process where he had been afforded the
opportunity to ventilate his side, as Jose was in this case. 16
Accordingly, the Court finds that the CA erred in ascribing grave abuse of discretion on the part of the NLRC in taking
cognizance of Fernandezs appeal.
WHEREFORE, the petition is GRANTED. The Decision dated September 13, 2012 and the Resolution dated February 11,
2013 of the Court of Appeals in CA-G.R. SP No. 123633 are hereby REVERSED and SET ASIDE. The Decision dated
March 15, 2010 of the National Labor Relations Commission and the Order dated August 17, 2010 of the Labor Arbiter
are REINSTATED.
SO ORDERED.
PERLAS-BERNABE, J.:
Carpio, (Chairperson), Brion, Del Castillo, Perez, and Perlas-Bernabe, JJ., concur.
SECOND DIVISION, G.R. No. 205870, August 13, 2014, LEI SHERYLL FERNANDEZ, PETITIONER, VS. BOTICA
CLAUDIO REPRESENTED BY GUADALUPE JOSE, RESPONDENT.
The Principle That The Prescriptive Period Continues Even After The Withdrawal Of The Case As Though No Action Has
Been Filed At All Is Applicable In Labor Cases
June 12, 2015 by The Lawyer's Post
The Facts:
As a result of their termination from employment sometime in 1997 due to various causes such as participation in illegal
strikes as well as closure of the company due to severe business losses, the petitioners herein initially filed a complaint for
illegal dismissal against Times Transit Co. Inc., and several of its its officers and employees, on May 14, 1998. However,
upon motion of their unions counsel, the case was withdrawn on March 4, 1999 and given due course on March 22,
1999. After four years, complaints for unfair labor practice, illegal dismissal with money claims against the company and
several respondents, from June to July, 2002. Answering, the company averred that the cause of action was already
barred by prescription as the complaints were filed only in 2002, almost five years from the time they received their
notices of termination. MEINCORP denied any employer-employee relationship as it was merely the buyer of the buses
and the certificates of public convenience. After hearings, the Labor Arbiter rendered a decision dismissing the case for
unfair labor practice an money claims. The LA found petitioners Montero, Ravina, Cabello, Genaro, Madera, Gaano,
Arsenio Donato and EStilong illegally dismissed and awarded them separation pay and back wages. According to the LA,

the cases of these 10 petitioners were not barred by prescription as the eight month period during which their case was
pending (the case they filed in May, 1998 but withdrawn in March, 1999) should be excluded from the four-year
prescriptive period. Both parties appealed to the NLRC, but their appeals were not perfected. The NLRC, however, set
aside the ruling of the LA and noted that the LA took a selective view when he ruled that the eight-month period during
which the first case of the petitioners was pending should not be included in the running of the prescriptive period. The
Court of Appeals brushed aside the petition for certiorari filed by the petitioners, noting that the prescriptive period
continues even after the withdrawal of the case as though no action has been filed at all, invoking the ruling by the
Supreme Court in Intercontinental Broadcasting Corporation vs. Panganiban, where the Supreme Court held that although
the commencement of an action stops the running of the statute of prescription or limitations, its dismissal or voluntary
abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all.
x x x.
The petitioners thus elevated their case to the Supreme Court.
The Issue:
Whether or not the period of pendency of the first case for illegal dismissal which was subsequently withdrawn, should be
included in computing the prescriptive period for illegal dismissal cases.
The Ruling:
The petition is bereft of merit.
It should be emphasized at the outset that as a rule, this Court is not a trier of facts and this applies with greater force in
labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC, particularly when they coincide with those of
the [LA] and if supported by substantial evidence, are accorded respect and even finality by this Court. But where the
findings of the NLRC and the [LA] are contradictory, as in the present case, this Court may delve into the records and
examine for itself the questioned findings. 1
Nevertheless, the Court has thoroughly reviewed the records in this case and finds that the NLRC did not commit any
grave abuse of its discretion amounting to lack or in excess of jurisdiction in rendering its decision in favor of the
respondents. The CA acted in accord with the evidence on record and case law when it dismissed the petition and
affirmed the assailed decision and resolution of the NLRC.
In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates when the petitioners
employment were terminated by TTCI. The antecedent facts that gave rise to the petitioners dismissal from employment
are not disputed in this case. There is no question about the fact that the petitioners complaints for unfair labor practice
and money claims have already prescribed. The petitioners however argue that their complaints for illegal dismissal were
duly filed within the four-year prescriptive period since the period during which their cases were pending should be
deducted from the period of prescription. On the other hand, the respondents insist that said complaints have already
prescribed. Hence, the pivotal question in resolving the issues hinges on the resolution of whether the period during which
the petitioners cases were pending should be excluded from the period of prescription.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of ones dismissal from employment constitutes, in essence, an action predicated upon an injury to the
rights of the plaintiff, as contemplated under Article 1146 2 of the New Civil Code, which must be brought within four
years.3
The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March 22, 1999
should be excluded from the computation of the four-year prescriptive period for illegal dismissal cases. However, the
Court had already ruled that the prescriptive period continues even after the withdrawal of the case as though no action
has been filed at all. The applicability of Article 1155 4 of the Civil Code in labor cases was upheld in the case
of Intercontinental Broadcasting Corporation v. Panganiban 5 where the Court held that although the commencement of a
civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff
leaves the parties in exactly the same position as though no action had been commenced at all. 6
In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the running of the prescriptive
period, its voluntary withdrawal left the petitioners in exactly the same position as though no complaint had been filed at
all. The withdrawal of their complaint effectively erased the tolling of the reglementary period.
A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the petitioners withdrawal of
their labor case docketed as NLRC RAB-I-01-1007. 7 Hence, while the filing of the said case could have interrupted the

running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively cancelled the tolling of
the prescriptive period within which to file their illegal dismissal case, leaving them in exactly the same position as though
no labor case had been filed at all. The running of the four-year prescriptive period not having been interrupted by the
filing of NLRC RAB-I-01-1007, the petitioners cause of action had already prescribed in four years after their cessation of
employment on October 26, 1997 and November 24, 1997. Consequently, when the petitioners filed their complaint for
illegal dismissal, separation pay, retirement benefits, and damages in 2002, their claim, clearly, had already been barred
by prescription.8
Sadly, the petitioners have no one but themselves to blame for their own predicament. By their own allegations in their
respective complaints, they have barred their remedy and extinguished their right of action. Although the Constitution is
committed to the policy of social justice and the protection of the working class, it does not necessary follow that every
labor dispute will be automatically decided in favor of labor. The management also has its own rights. Out of concern for
the less privileged in life, this Court, has more often than not inclined, to uphold the cause of the worker in his conflict with
the employer. Such leaning, however, does not blind the Court to the rule that justice is in every case for the deserving, to
be dispensed in the light of the established facts and applicable law and doctrine. 9
WHEREFORE, the Decision dated August 28, 2009 and Resolution dated December 11, 2009 of the Court of Appeals in
CA-G.R. SP No. 106260 are AFFIRMED.
SO ORDERED.
REYES, J.:
THIRD DIVISION, G.R. No. 190828, March 16, 2015, ONOFRE V. MONTERO, EDGARDO N. ESTRAERO, RENING P.
PADRE, GABRIEL A. MADERA, HERMINIO T. TACLA, NELSON C. VILORIA, DEMETRIO Q. PAJARILLO, ALFREDO
R. AGANON, REYNALDO AVILA, ALBERT T. RUIZ, NESTOR Y. YAGO, HARTY M. TUPASI, AGUSTIN R. AVILA, JR.
OR MARCOS R. AVILA, BONIFACIO B. GAANO, JOSELITO D. CUENTA, JONAS P. ESTILONG, DOMINADOR C.
CANARIA, GENARO C. RONDARIS, HERARDO M. DULAY, FRANKLIN A. RAVINA, JR., AND RUBEN C. CABELLO,
PETITIONERS, VS. TIMES TRANSPORTATION CO., INC., AND SANTIAGO RONDARIS, MENCORP TRANSPORT
SYSTEMS, INC., VIRGINIA R. MENDOZA AND REYNALDO MENDOZA, RESPONDENTS.

The Facts:
As a result of their termination from employment sometime in 1997 due to various causes such as participation in illegal
strikes as well as closure of the company due to severe business losses, the petitioners herein initially filed a complaint for
illegal dismissal against Times Transit Co. Inc., and several of its its officers and employees, on May 14, 1998. However,
upon motion of their unions counsel, the case was withdrawn on March 4, 1999 and given due course on March 22,
1999. After four years, complaints for unfair labor practice, illegal dismissal with money claims against the company and
several respondents, from June to July, 2002. Answering, the company averred that the cause of action was already
barred by prescription as the complaints were filed only in 2002, almost five years from the time they received their
notices of termination. MEINCORP denied any employer-employee relationship as it was merely the buyer of the buses
and the certificates of public convenience. After hearings, the Labor Arbiter rendered a decision dismissing the case for
unfair labor practice an money claims. The LA found petitioners Montero, Ravina, Cabello, Genaro, Madera, Gaano,
Arsenio Donato and EStilong illegally dismissed and awarded them separation pay and back wages. According to the LA,
the cases of these 10 petitioners were not barred by prescription as the eight month period during which their case was
pending (the case they filed in May, 1998 but withdrawn in March, 1999) should be excluded from the four-year
prescriptive period. Both parties appealed to the NLRC, but their appeals were not perfected. The NLRC, however, set
aside the ruling of the LA and noted that the LA took a selective view when he ruled that the eight-month period during
which the first case of the petitioners was pending should not be included in the running of the prescriptive period. The
Court of Appeals brushed aside the petition for certiorari filed by the petitioners, noting that the prescriptive period
continues even after the withdrawal of the case as though no action has been filed at all, invoking the ruling by the
Supreme Court in Intercontinental Broadcasting Corporation vs. Panganiban, where the Supreme Court held that although
the commencement of an action stops the running of the statute of prescription or limitations, its dismissal or voluntary
abandonment by plaintiff leaves the parties in exactly the same position as though no action had been commenced at all.
x x x.
The petitioners thus elevated their case to the Supreme Court.
The Issue:
Whether or not the period of pendency of the first case for illegal dismissal which was subsequently withdrawn, should be
included in computing the prescriptive period for illegal dismissal cases.
The Ruling:
The petition is bereft of merit.
It should be emphasized at the outset that as a rule, this Court is not a trier of facts and this applies with greater force in
labor cases. Hence, factual findings of quasi-judicial bodies like the NLRC, particularly when they coincide with those of
the [LA] and if supported by substantial evidence, are accorded respect and even finality by this Court. But where the
findings of the NLRC and the [LA] are contradictory, as in the present case, this Court may delve into the records and
examine for itself the questioned findings. 1
Nevertheless, the Court has thoroughly reviewed the records in this case and finds that the NLRC did not commit any
grave abuse of its discretion amounting to lack or in excess of jurisdiction in rendering its decision in favor of the
respondents. The CA acted in accord with the evidence on record and case law when it dismissed the petition and
affirmed the assailed decision and resolution of the NLRC.
In the case at bar, October 26, 1997 and November 24, 1997 appear on record to be the dates when the petitioners
employment were terminated by TTCI. The antecedent facts that gave rise to the petitioners dismissal from employment
are not disputed in this case. There is no question about the fact that the petitioners complaints for unfair labor practice
and money claims have already prescribed. The petitioners however argue that their complaints for illegal dismissal were
duly filed within the four-year prescriptive period since the period during which their cases were pending should be
deducted from the period of prescription. On the other hand, the respondents insist that said complaints have already
prescribed. Hence, the pivotal question in resolving the issues hinges on the resolution of whether the period during which
the petitioners cases were pending should be excluded from the period of prescription.
Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of ones dismissal from employment constitutes, in essence, an action predicated upon an injury to the
rights of the plaintiff, as contemplated under Article 1146 2 of the New Civil Code, which must be brought within four
years.3

The petitioners contend that the period when they filed a labor case on May 14, 1998 but withdrawn on March 22, 1999
should be excluded from the computation of the four-year prescriptive period for illegal dismissal cases. However, the
Court had already ruled that the prescriptive period continues even after the withdrawal of the case as though no action
has been filed at all. The applicability of Article 11554 of the Civil Code in labor cases was upheld in the case
of Intercontinental Broadcasting Corporation v. Panganiban 5 where the Court held that although the commencement of a
civil action stops the running of the statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff
leaves the parties in exactly the same position as though no action had been commenced at all. 6
In like manner, while the filing of the complaint for illegal dismissal before the LA interrupted the running of the prescriptive
period, its voluntary withdrawal left the petitioners in exactly the same position as though no complaint had been filed at
all. The withdrawal of their complaint effectively erased the tolling of the reglementary period.
A prudent review of the antecedents of the claim reveals that it has in fact prescribed due to the petitioners withdrawal of
their labor case docketed as NLRC RAB-I-01-1007.7 Hence, while the filing of the said case could have interrupted the
running of the four-year prescriptive period, the voluntary withdrawal of the petitioners effectively cancelled the tolling of
the prescriptive period within which to file their illegal dismissal case, leaving them in exactly the same position as though
no labor case had been filed at all. The running of the four-year prescriptive period not having been interrupted by the
filing of NLRC RAB-I-01-1007, the petitioners cause of action had already prescribed in four years after their cessation of
employment on October 26, 1997 and November 24, 1997. Consequently, when the petitioners filed their complaint for
illegal dismissal, separation pay, retirement benefits, and damages in 2002, their claim, clearly, had already been barred
by prescription.8
Sadly, the petitioners have no one but themselves to blame for their own predicament. By their own allegations in their
respective complaints, they have barred their remedy and extinguished their right of action. Although the Constitution is
committed to the policy of social justice and the protection of the working class, it does not necessary follow that every
labor dispute will be automatically decided in favor of labor. The management also has its own rights. Out of concern for
the less privileged in life, this Court, has more often than not inclined, to uphold the cause of the worker in his conflict with
the employer. Such leaning, however, does not blind the Court to the rule that justice is in every case for the deserving, to
be dispensed in the light of the established facts and applicable law and doctrine. 9
WHEREFORE, the Decision dated August 28, 2009 and Resolution dated December 11, 2009 of the Court of Appeals in
CA-G.R. SP No. 106260 are AFFIRMED.
SO ORDERED.
REYES, J.:
THIRD DIVISION, G.R. No. 190828, March 16, 2015, ONOFRE V. MONTERO, EDGARDO N. ESTRAERO, RENING P.
PADRE, GABRIEL A. MADERA, HERMINIO T. TACLA, NELSON C. VILORIA, DEMETRIO Q. PAJARILLO, ALFREDO
R. AGANON, REYNALDO AVILA, ALBERT T. RUIZ, NESTOR Y. YAGO, HARTY M. TUPASI, AGUSTIN R. AVILA, JR.
OR MARCOS R. AVILA, BONIFACIO B. GAANO, JOSELITO D. CUENTA, JONAS P. ESTILONG, DOMINADOR C.
CANARIA, GENARO C. RONDARIS, HERARDO M. DULAY, FRANKLIN A. RAVINA, JR., AND RUBEN C. CABELLO,
PETITIONERS, VS. TIMES TRANSPORTATION CO., INC., AND SANTIAGO RONDARIS, MENCORP TRANSPORT
SYSTEMS, INC., VIRGINIA R. MENDOZA AND REYNALDO MENDOZA, RESPONDENTS.
Feng Shui Mismatch Between Employer And Employee Not A Valid Ground For Termination
January 1, 2015 by The Lawyer's Post
Loreta, who was then employed by Manmen Services, apparently impressed Xu, a client of the company, who then
recruited her to work at Wensha Spa Center, a sauna bath and massage business. Enticed with the offer of a higher
salary, she accepted Xus offer and was thus hired as Xus personal assistant and interpreter. Having introduced positive
changes to Wensha which resulted in increased business, she was promoted to the position of Administrative Manager.
On August 10, 2004, she was asked to leave her office because Xu and a Feng Shui master were exploring the premises.
When she came back she was asked to go on leave for one month. When she returned to work on September 10, 2004,
Xu and his wife asked her to resign from Wensha because according to the Feng Shui master, her aura did not match that
of Xu. Loreta refused, hence the couple told her she could not work anymore at Wensha. That same day, she filed a case
for illegal dismissal at the NLRC. The company denied illegally terminating Loreta. They alleged that two months after her
employment, they received several complaint from employees against her so they advised her to take a leave of absence
for one month while they conducted an investigation. They terminated her service on August 31, 2004. The Labor Arbiter
found her allegation incredible, and opined that she was terminated for loss of trust and confidence. The ruling was

affirmed by the NLRC, hence Loreta went to the Court of Appeals by certiorari. The appellate court reversed the NLRC
ruling, citing inconsistencies in the documents submitted by Wensha, hence, Wensha elevated their case to the Supreme
Court.
The Supreme Court:
Loretas security of tenure is guaranteed by the Constitution and the Labor Code. The 1987 Philippine Constitution
provides in Section 18, Article II that the State shall protect the rights of workers and promote their welfare. Section 3,
Article XIII also provides that all workers shall be entitled to security of tenure. Along that line, Article 3 of the Labor Code
mandates that the State shall assure the rights of workers to security of tenure.
Under the security of tenure guarantee, a worker can only be terminated from his employment for cause and after due
process. For a valid termination by the employer: (1) the dismissal must be for a valid cause as provided in Article 282, or
for any of the authorized causes under Articles 283 and 284 of the Labor Code; and (2) the employee must be afforded an
opportunity to be heard and to defend himself. A just and valid cause for an employees dismissal must be supported by
substantial evidence, and before the employee can be dismissed, he must be given notice and an adequate opportunity to
be heard. In the process, the employer bears the burden of proving that the dismissal of an employee was for a valid
cause. Its failure to discharge this burden renders the dismissal unjustified and, therefore, illegal.
As a rule, the factual findings of the court below are conclusive on Us in a petition for review on certiorari where We
review only errors of law. This case, however, is an exception because the CAs factual findings are not congruent with
those of the NLRC and the LA.
According to Wensha in its position paper, it dismissed Loreta on August 31, 2004 after investigating the complaints
against her. Wensha asserted that her dismissal was a valid exercise of an employers right to terminate a managerial
employee for loss of trust and confidence. It claimed that she caused the resignation of an employee because of gossips
initiated by her. It was the reason she was asked to take a leave of absence with pay for one month starting August 10,
2004.
Wensha also alleged that Loreta was sowing intrigues in the company which was inimical to Wensha. She was also
accused of dishonesty, serious breach of trust reposed in her, tardiness, and abuse of authority.
In its Rejoinder, Wensha changed its position claiming that it did not terminate Loretas employment on August 31, 2004.
It even sent her a notice requesting her to report back to work. She, however, declined because she had already filed her
complaint.
As correctly found by the CA, the cause of Loretas dismissal is questionable. Loss of trust and confidence to be a valid
ground for dismissal must have basis and must be founded on clearly established facts.
The Court finds the LA ruling that states, [a]bsent any proof submitted by the complainant, this office finds it more
probable that the complainant was dismissed due to loss of trust and confidence, to be utterly erroneous as it is contrary
to the applicable rules and pertinent jurisprudence. The onus of proving a valid dismissal rests on the employer, not on
the employee. It is the employer who bears the burden of proving that its dismissal of the employee is for a valid or
authorized cause supported by substantial evidence.
According to the NLRC, [p]erusal of the entire records show that complainant left the respondents premises when she
was confronted with the infractions imputed against her. This information was taken from the affidavit of Princess Delos
Reyes (Delos Reyes) which was dated March 21, 2005, not in Wenshas earlier position paper or pleadings submitted to
the LA. The affidavits of employees attached to Delos Reyes affidavit were all dated November 19, 2004 indicating that
they were not yet executed when the complaints against Loreta were supposedly being investigated in August 2004.
It is also noteworthy that Wenshas position paper related that because of the gossips perpetrated by Loreta, a certain
Oliva Gonzalo (Gonzalo) resigned from Wensha. Because of the incident, Gonzalo, whose father was a policeman,
reportedly got angry with complainant and of the management telling her friends at respondent company that she would
retaliate thus creating fear among those concerned. As a result, Loreta was advised to take a paid leave of absence for
one month while Wensha conducted an investigation.
According to Loreta, however, the reason for her termination was her aura did not match that of Xu and the work
environment at Wensha. Loreta narrated:

On August 10, 2004 however, complainant was called by respondent Xu and told her to wait at the lounge area while the
latter and a Feng Shui Master were doing some analysis of the office. After several hours of waiting, respondent Xu then
told complainant that according to the Feng Shui master her Chinese Zodiac sign is a mismatch with that of the
respondents; that complainant should not enter the administrative office for a month while an altar was to be placed on the
left side where complainant has her table to allegedly correct the mismatch and that it is necessary that offerings and
prayers have to be made and said for about a month to correct the alleged jinx. Respondent Xu instructed complainant
not to report to the office for a month with assurance of continued and regular salary. She was ordered not to seek
employment elsewhere and was told to come back on the 10th of September 2004.
Although she was a little confused, Loreta did as she was instructed and did not report for work for a month. She returned
to work on September 10, 2004. This is how Loreta recounted the events of that day:
On September 10, 2004, in the morning, complainant reported to the office of respondents. As usual, she punched-in her
time card and signed in the logbook of the security guard. When she entered the administrative office, some of its
employees immediately contacted respondent Xu. Respondent Xu then contacted complainant thru her mobile phone and
told her to leave the administrative office immediately and instead to wait for him in the dining area.
xxx
Complainant waited for respondent Xu in the dining area. After waiting for about two (2) hours, respondent Xu was
nowhere. Instead, it was Jiang Xue Qin a.k.a Annie Co, the Chinese wife of respondent Xu, who arrived and after a short
conversation between them, the former frankly told complainant that she has to resign allegedly she is a mismatch to
respondent Xu according to the Feng Shui master and therefore she does not fit to work (sic) with the respondents.
Surprised and shocked, complainant demanded of Jiang Xue Qin to issue a letter of termination if it were the reason
therefor.
Instead of a termination letter issued, Jiang Xue Qin insisted for the complainants resignation. But when complainant
stood her ground, Jian Xue Qin shouted invectives at her and told to leave the office immediately.
Respondent Xu did not show up but talked to the complainant over the mobile phone and convinced her likewise to resign
from the company since there is no way to retain her because her aura unbalanced the area of employment according to
the Feng Shui, the Chinese spiritual art of placement. Hearing this from no lees than respondent Xu, complainant left the
office and went straight to this Office and filed the present case on September 10, 2004. xxx
Loreta also alleged that in the afternoon of that day, September 10, 2004, a notice was posted on the Wensha bulletin
board that reads:
TO ALL EMPLOYEES OF WENSHA SPA CENTER
WE WOULD LIKE TO INFORM YOU THAT MS. LORIE TSE YUNG, FORMER ADMINISTRATIVE OFFICER OF
WENSHA SPA CENTER IS NO LONGER CONNECTED TO THIS COMPANY STARTING TODAY SEPTEMBER 10,
2004.
ANY TRANSACTION MADE BY HER IS NO LONGER A LIABILITY OF THE COMPANY.
(SGD.) THE MANAGEMENT [Italics were in red letters.]
The Court finds Loretas complaint credible. There is consistency in her pleadings and evidence. In contrast, Wenshas
pleadings and evidence, taken as a whole, suffer from inconsistency. Moreover, the affidavits of the employees only
pertain to petty matters that, to the Courts mind, are not sufficient to support Wenshas alleged loss of trust and
confidence. To be a valid cause for termination of employment, the act or acts constituting breach of trust must have been
done intentionally, knowingly, and purposely; and they must be founded on clearly established facts.
The CA decision is supported by evidence and logically flows from a review of the records. Loretas narration of the events
surrounding her termination from employment was simple and straightforward. Her claims are more credible than the
affidavits which were clearly prepared as an afterthought.
More importantly, the records are bereft of evidence that Loreta was duly informed of the charges against her and that she
was given the opportunity to respond to those charges prior to her dismissal. If there were indeed charges against Loreta
that Wensha had to investigate, then it should have informed her of those charges and required her to explain her side.
Wensha should also have kept records of the investigation conducted while Loreta was on leave. The law requires that
two notices be given to an employee prior to a valid termination: the first notice is to inform the employee of the charges
against her with a warning that she may be terminated from her employment and giving her reasonable opportunity within
which to explain her side, and the second notice is the notice to the employee that upon due consideration of all the
circumstances, she is being terminated from her employment. This is a requirement of due process and clearly, Loreta did
not receive any of those required notices.

We are in accord with the pronouncement of the CA that the reinstatement of Loreta to her former position is no longer
feasible in the light of the strained relations between the parties. Reinstatement, under the circumstances, would no
longer be practical as it would not be in the interest of both parties. Under the law and jurisprudence, an illegally
dismissed employee is entitled to two reliefs backwages and reinstatement, which are separate and distinct. If
reinstatement would only exacerbate the tension and further ruin the relations of the employer and the employee, or if
their relationship has been unduly strained due to irreconcilable differences, particularly where the illegally dismissed
employee held a managerial or key position in the company, it would be prudent to order payment of separation pay
instead of reinstatement. In the case of Golden Ace Builders v. Talde, We wrote:
Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or viable. On the one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the other, the payment releases the employer
from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.
In the case at bench, the CA, upon its own assessment, pronounced that the relations between petitioners and the
respondent have become strained because of her dismissal anchored on dubious charges. The respondent has not
contested the finding. As she is not insisting on being reinstated, she should be paid separation pay equivalent to one (1)
month salary for every year of service. The CA, however, failed to decree such award in the dispositive portion. This
should be rectified.
Nevertheless, the Court finds merit in the argument of petitioner Xu that the CA erred in ruling that he is solidarily liable
with Wensha.
Elementary is the rule that a corporation is invested by law with a personality separate and distinct from those of the
persons composing it and from that of any other legal entity to which it may be related. Mere ownership by a single
stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground
for disregarding the separate corporate personality.
In labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of
employment only if done with malice or in bad faith. Bad faith does not connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty through some
motive or interest or ill will; it partakes of the nature of fraud.
In the subject decision, the CA concluded that petitioner Xu and Wensha are jointly and severally liable to Loreta. We
have read the decision in its entirety but simply failed to come across any finding of bad faith or malice on the part of Xu.
There is, therefore, no justification for such a ruling. To sustain such a finding, there should be an evidence on record that
an officer or director acted maliciously or in bad faith in terminating the services of an employee. Moreover, the finding or
indication that the dismissal was effected with malice or bad faith should be stated in the decision itself.
SECOND DIVISION, G.R. No. 185122, August 16, 2010, WENSHA SPA CENTER, INC. AND/OR XU ZHI JIE,
PETITIONERS, VS. LORETA T. YUNG, RESPONDENT.

It Is Only when Reinstatement Is No Longer Feasible That the Payment Of Separation Pay Is Ordered in Lieu Thereof
June 15, 2015 by The Lawyer's Post
The Facts:
FACTS: Bernard (Tenazas, Jaime Francisco) and Isidro (Endraca) were complainants in a consolidated case for illegal
dismissal against R. Villegas Taxi Transport and Romualdo Villegas. In their positions papers, they alleged they were
hired as taxi drivers on a boundary system by the respondents. On July 1, 2007, the taxi Bernard was driving was
sideswiped by another vehicle. When he reported the matter to the company, he was scolded by the respondents and
told to leave the garage as he was already fired. On the other hand, Jaime alleged that he was terminated on suspicion
that he was organising a labor union, hence he was terminated without due process on July 4, 2007. Isidro alleged that
he was terminated when he fell short of the required boundary after he brought his unit to an auto repair shop for an
urgent repair. When he returned to the garage his drivers license was confiscated and he was no longer allowed to drive
a taxi despite his pleas. In their defense, the company admitted Bernard and Isidro were regular and spare drivers

respectively, but denied employing Jaime as a driver. Tenzas was neve terminated by the company. He was informed
that his unit was due for overhaul and advised to wait for further notice from the company if his unit was already fixed.
Despite being informed on July 8, 2007 that his unit was ready for release, Tenazas did not return. On Isisdro, the
company alleged he was a spare driver of the company from 2001, substituting whenever a driver is not around. They
could not have terminated him in 2006 since he stopped reporting for work in 2003.
The complainants filed a Motion to Admit Evidence alleging that they were able to discover new evidence thru diligent
efforts, such as the Affidavit of Good Faith by Aloney Rivera, a co-driver; their Joint Affidavit; their pictures wearing
company shirts and Tenazas certification of contribution of SSS premiums.
The Labor Arbiter however dismissed their complaint, finding no employer-employee relationship between them and the
company. The company having denied the existence thereof, it was incumbent upon complainants to prove the existence
elf the employer-employee relationship. On appeal to the NLRC, however, the commission, relying on the newly
discovered evidence submitted by the complainants, ruled them illegally dismissed. It ordered payment of their back
wages from the time of dismissal, as well as payment of separation pay and attorneys fees.
On petition for certiorari with the CA, the latter affirmed the NLRC mudgment but deleted the award of separation pay and
ordered their reinstatement. It also deleted the award in favour of Jaime Francisco, who, the CA averred, failed to prove
that he was an employee of the respondent. Thus, the petitioners elevated their case to the Supreme Court to review the
CA decision dismissing Franciscos complaint and deleting the award of separation pay to the other petitioners.

The Issue:
Whether or not employer-employee relations exist between the petitioners and the company.
Whether or not the award of separation pay should be deleted.
The Ruling:
The petition lacks merit.
Pivotal to the resolution of the instant case is the determination of the existence of employer-employee relationship and
whether there was an illegal dismissal. Remarkably, the LA, NLRC and the CA had varying assessment on the matters at
hand. The LA believed that, with the admission of the respondents, there is no longer any question regarding the status of
both Tenazas and Endraca being employees of the company. However, he ruled that the same conclusion does not hold
with respect to Francisco whom the respondents denied to have ever employed or known. With the respondents denial,
the burden of proof shifts to Francisco to establish his regular employment. Unfortunately, the LA found that Francisco
failed to present sufficient evidence to prove regular employment such as company ID, SSS membership, withholding tax
certificates or similar articles. Thus, he was not considered an employee of the company. Even then, the LA held that
Tenazas and Endraca could not have been illegally dismissed since there was no overt act of dismissal committed by the
respondents.1
On appeal, the NLRC reversed the ruling of the LA and ruled that the petitioners were all employees of the company. The
NLRC premised its conclusion on the additional pieces of evidence belatedly submitted by the petitioners, which it
supposed, have been overlooked by the LA owing to the time when it was received by the said office. It opined that the
said pieces of evidence are sufficient to establish the circumstances of their illegal termination. In particular, it noted that
in the affidavit of the petitioners, there were allegations about the companys practice of not issuing employment records
and this was not rebutted by the respondents. It underscored that in a situation where doubt exists between evidence
presented by the employer and the employee, the scales of justice must be tilted in favor of the employee. It awarded the
petitioners with: (1) full backwages from the date of their dismissal up to the finality of the decision; (2) separation pay
equivalent to one month of salary for every year of service; and (3) attorneys fees.
On petition for certiorari, the CA affirmed with modification the decision of the NLRC, holding that there was indeed an
illegal dismissal on the part of Tenazas and Endraca but not with respect to Francisco who failed to present substantial
evidence, proving that he was an employee of the respondents. The CA likewise dismissed the respondents claim that
Tenazas and Endraca abandoned their work, asseverating that immediate filing of a complaint for illegal dismissal and
persistent pleas for continuance of employment are incompatible with abandonment. It also deleted the NLRCs award of
separation pay and instead ordered that Tenazas and Endraca be reinstated. 2
Well-settled is the rule that the jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Revised
Rules of Court is limited to reviewing only errors of law, not of fact, unless the factual findings complained of are
completely devoid of support from the evidence on record, or the assailed judgment is based on a gross misapprehension
of facts.3 The Court finds that none of the mentioned circumstances is present in this case.
In reviewing the decision of the NLRC, the CA found that no substantial evidence was presented to support the conclusion
that Francisco was an employee of the respondents and accordingly modified the NLRC decision. It stressed that with the
respondents denial of employer-employee relationship, it behooved Francisco to present substantial evidence to prove
that he is an employee before any question on the legality of his supposed dismissal becomes appropriate for discussion.
Francisco, however, did not offer evidence to substantiate his claim of employment with the respondents. Short of the
required quantum of proof, the CA correctly ruled that the NLRCs finding of illegal dismissal and the monetary awards
which necessarily follow such ruling lacked factual and legal basis and must therefore be deleted.
The action of the CA finds support in Anonas Construction and Industrial Supply Corp., et al. v. NLRC, et al.,4 where the
Court reiterated:
[J]udicial review of decisions of the NLRC via petition for certiorari under Rule 65, as a general rule, is confined only to
issues of lack or excess of jurisdiction and grave abuse of discretion on the part of the NLRC. The CA does not assess
and weigh the sufficiency of evidence upon which the LA and the NLRC based their conclusions. The issue is limited to
the determination of whether or not the NLRC acted without or in excess of its jurisdiction, or with grave abuse of
discretion in rendering the resolution, except if the findings of the NLRC are not supported by substantial evidence. 5
(Citation omitted and emphasis ours)
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, the quantum of
proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion. 6 [T]he burden of proof rests upon the party who asserts the affirmative of an issue. 7
Corollarily, as Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer evidence
to prove the existence of said relationship.

[I]n determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the
following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employers power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called control test, is the most important element. 8
There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to
prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment
letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status. 9
In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the
respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel
file that could somehow depict his status as an employee. Anent his claim that he was not issued with employment
records, he could have, at least, produced his social security records which state his contributions, name and address of
his employer, as his co-petitioner Tenazas did. He could have also presented testimonial evidence showing the
respondents exercise of control over the means and methods by which he undertakes his work. This is imperative in light
of the respondents denial of his employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that
he was his employer. Specifically, in his Affidavit,10 Emmanuel alleged that Francisco was employed as a spare driver in
his taxi garage from January 2006 to December 2006, a fact that the latter failed to deny or question in any of the
pleadings attached to the records of this case. The utter lack of evidence is fatal to Franciscos case especially in cases
like his present predicament when the law has been very lenient in not requiring any particular form of evidence or
manner of proving the presence of employer-employee relationship.
In Opulencia Ice Plant and Storage v. NLRC11, this Court emphasized, thus:
No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent
and relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to
show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish
to come out with any trace of the illegality he has authored considering that it should take much weightier proof to
invalidate a written instrument.12
Here, Francisco simply relied on his allegation that he was an employee of the company without any other evidence
supporting his claim. Unfortunately for him, a mere allegation in the position paper is not tantamount to evidence. 13 Bereft
of any evidence, the CA correctly ruled that Francisco could not be considered an employee of the respondents.
The CAs order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay, is also well in
accordance with prevailing jurisprudence. In Macasero v. Southern Industrial Gases Philippines,14 the Court reiterated,
thus:
[A]n illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the
employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of
service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages. 15
(Emphasis supplied)
Clearly, it is only when reinstatement is no longer feasible that the payment of separation pay is ordered in lieu thereof.
For instance, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the
relationship between the employer and the employee has been unduly strained by reason of their irreconcilable
differences, it would be more prudent to order payment of separation
pay instead of reinstatement.16
This doctrine of strained relations, however, should not be used recklessly or applied loosely 17 nor be based on
impression alone. It bears to stress that reinstatement is the rule and, for the exception of strained relations to apply, it
should be proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism would be generated
as to adversely affect the efficiency and productivity of the employee concerned.18
Moreover, the existence of strained relations, it must be emphasized, is a question of fact. In Golden Ace Builders v.
Talde,19 the Court underscored:
Strained relations must be demonstrated as a fact, however, to be adequately supported by evidencesubstantial
evidence to show that the relationship between the employer and the employee is indeed strained as a necessary
consequence of the judicial controversy20 (Citations omitted and emphasis ours)

After a perusal of the NLRC decision, this Court failed to find the factual basis of the award of separation pay to the
petitioners. The NLRC decision did not state the facts which demonstrate that reinstatement is no longer a feasible option
that could have justified the alternative relief of granting separation pay instead.
The petitioners themselves likewise overlooked to allege circumstances which may have rendered their reinstatement
unlikely or unwise and even prayed for reinstatement alongside the payment of separation pay in their position paper. 21 A
bare claim of strained relations by reason of termination is insufficient to warrant the granting of separation pay. Likewise,
the filing of the complaint by the petitioners does not necessarily translate to strained relations between the parties. As a
rule, no strained relations should arise from a valid and legal act asserting ones right. 22 Although litigation may also
engender a certain degree of hostility, the understandable strain in the parties relation would not necessarily rule out
reinstatement which would, otherwise, become the rule rather the exception in illegal dismissal cases. 23 Thus, it was a
prudent call for the CA to delete the award of separation pay and order for reinstatement instead, in accordance with the
general rule stated in Article 27924 of the Labor Code.
Finally, the Court finds the computation of the petitioners backwages at the rate of P800.00 daily reasonable and just
under the circumstances. The said rate is consistent with the ruling of this Court in Hyatt Taxi Services, Inc. v.
Catinoy,25 which dealt with the same matter.
WHEREFORE, in view of the foregoing disquisition, the petition for review on certiorariis DENIED. The Decision dated
March 11, 2010 and Resolution dated June 28, 2010 of the Court of Appeals in CA-G.R. SP No. 111150 are AFFIRMED.
SO ORDERED.
v
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Villarama, Jr., JJ.,concur.
FIRST DIVISION, G.R. No. 192998, April 02, 2014, BERNARD A. TENAZAS, JAIME M. FRANCISCO AND ISIDRO G.
ENDRACA, PETITIONERS, VS. R. VILLEGAS TAXI TRANSPORT AND ROMUALDO VILLEGAS, RESPONDENTS.