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Page 1 of 59 Week 3 Cases (Labor Law Review) | amgisidro

G.R. No. 195466 July 2, and ends at 2:00 a.m. of the following had been performing a non-time work,
2014 day or earlier, depending on the volume pointing out that Macasio was paid a
of the delivered hogs; (2) received the fixed amount for the completion of the
ARIEL L. DAVID, doing business fixed amount of P700.00 per assigned task, irrespective of the time
under the name and style "YIELS engagement, regardless of the actual consumed in its performance. Since
HOG DEALER," Petitioner, number of hours that he spent chopping Macasio was paid by result and not in
vs. the delivered hogs; and (3) was not terms of the time that he spent in the
JOHN G. MACASIO, Respondent. engaged to report for work and, workplace, Macasio is not covered by
DECISION accordingly, did not receive any fee the Labor Standards laws on overtime,
when no hogs were delivered. SIL and holiday pay, and 13th month
BRION, J.: pay under the Rules and Regulations
Macasio disputed Davids
We resolve in this petition for review on Implementing the 13th month pay law.18
allegations.11 He argued that, first,
certiorari1 the challenge to the David did not start his business only in Macasio moved for
November 22, 2010 decision2 and the 2005. He pointed to the Certificate of reconsideration19 but the NLRC denied
January 31, 2011 resolution3 of the Employment12 that David issued in his his motion in its August 11, 2010
Court of Appeals (CA) in CA-G.R. SP favor which placed the date of his resolution,20prompting Macasio to
No. 116003. The CA decision annulled employment, albeit erroneously, in elevate his case to the CA via a petition
and set aside the May 26, 2010 January 2000. Second, he reported for for certiorari.21
decision4 of the National Labor work every day which the payroll or time
Relations Commission (NLRC)5 which, The CAs Ruling
record could have easily proved had
in turn, affirmed the April 30, 2009 David submitted them in evidence. In its November 22, 2010
Decision6 of the Labor Arbiter (LA). The decision,22 the CA partly granted
LA's decision dismissed respondent Refuting Macasios
Macasios certiorari petition and
John G. Macasio's monetary claims. submissions,13 David claims that
reversed the NLRCs ruling for having
Macasio was not his employee as he
The Factual Antecedents been rendered with grave abuse of
hired the latter on "pakyaw" or task
discretion.
In January 2009, Macasio filed before basis. He also claimed that he issued
the LA a complaint7 against petitioner the Certificate of Employment, upon While the CA agreed with the LAand the
Ariel L. David, doing business under the Macasios request, only for overseas NLRC that Macasio was a task basis
name and style "Yiels Hog Dealer," for employment purposes. He pointed to employee, it nevertheless found
non-payment of overtime pay, holiday the "Pinagsamang Sinumpaang Macasio entitled to his monetary claims
pay and 13th month pay. He also Salaysay,"14 executed by Presbitero following the doctrine laid down in
claimed payment for moral and Solano and Christopher (Antonio Serrano v. Severino Santos
exemplary damages and attorneys Macasios co-butchers), to corroborate Transit.23The CA explained that as a
fees. Macasio also claimed payment for his claims. task basis employee, Macasio is
service incentive leave (SIL).8 excluded from the coverage of holiday,
In the April 30, 2009 decision,15 the LA
SIL and 13th month pay only if he is
Macasio alleged9 before the LA that he dismissed Macasios complaint for lack
likewise a "field personnel." As defined
had been working as a butcher for of merit. The LA gave credence to
by the Labor Code, a "field personnel"
David since January 6, 1995. Macasio Davids claim that he engaged Macasio
is one who performs the work away
claimed that David exercised effective on "pakyaw" or task basis. The LA
from the office or place of work and
control and supervision over his work, noted the following facts to support this
whose regular work hours cannot be
pointing out that David: (1) set the work finding: (1) Macasio received the fixed
determined with reasonable certainty.
day, reporting time and hogs to be amount of P700.00 for every work
In Macasios case, the elements that
chopped, as well as the manner by done, regardless of the number of
characterize a "field personnel" are
which he was to perform his work; (2) hours that he spent in completing the
evidently lacking as he had been
daily paid his salary of P700.00, which task and of the volume or number of
working as a butcher at Davids "Yiels
was increased from P600.00 in hogs that he had to chop per
Hog Dealer" business in Sta. Mesa,
2007, P500.00 in 2006 and P400.00 in engagement; (2) Macasio usually
Manila under Davids supervision and
2005; and (3) approved and worked for only four hours, beginning
control, and for a fixed working
disapproved his leaves. Macasio added from 10:00 p.m. up to 2:00 a.m. of the
schedule that starts at 10:00 p.m.
that David owned the hogs delivered for following day; and (3) the P700.00 fixed
chopping, as well as the work tools and wage far exceeds the then prevailing Accordingly, the CA awarded
implements; the latter also rented the daily minimum wage of P382.00. The Macasios claim for holiday, SIL and
workplace. Macasio further claimed LA added that the nature of Davids 13th month pay for three years, with
that David employs about twenty-five business as hog dealer supports this 10% attorneys fees on the total
(25) butchers and delivery drivers. "pakyaw" or task basis arrangement. monetary award. The CA, however,
denied Macasios claim for moral and
In his defense,10 David claimed that he The LA concluded that as Macasio was
exemplary damages for lack of basis.
started his hog dealer business in 2005 engaged on "pakyaw" or task basis, he
and that he only has ten employees. He is not entitled to overtime, holiday, SIL David filed the present petition after the
alleged that he hired Macasio as a and 13th month pay. CA denied his motion for
butcher or chopper on "pakyaw" or task reconsideration24 in the CAs January
The NLRCs Ruling
basis who is, therefore, not entitled to 31, 2011 resolution.25
overtime pay, holiday pay and 13th In its May 26, 2010 decision,16 the
The Petition
month pay pursuant to the provisions of NLRC affirmed the LA ruling.17 The
the Implementing Rules and NLRC observed that David did not In this petition,26 David maintains that
Regulations (IRR) of the Labor Code. require Macasio to observe an eight Macasios engagement was on a
David pointed out that Macasio: (1) hour work schedule to earn the "pakyaw" or task basis. Hence, the
usually starts his work at 10:00 p.m. fixed P700.00 wage; and that Macasio latter is excluded from the coverage of
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holiday, SIL and 13th month pay. David issues that are not proper for a petition questions of law raised against the
reiterates his submissions before the for review on certiorari. These issues assailed CA decision.34
lower tribunals27 and adds that he whether he (Macasio) was paid by
In this petition, David essentially asks
never had any control over the manner result or on "pakyaw" basis; whether he
the question whether Macasio is
by which Macasio performed his work was a "field personnel"; whether an
entitled to holiday, SIL and 13th month
and he simply looked on to the "end- employer-employee relationship
pay. This one is a question of law. The
result." He also contends that he never existed between him and David; and
determination of this question of law
compelled Macasio to report for work whether David exercised control and
however is intertwined with the largely
and that under their arrangement, supervision over his work are all
factual issue of whether Macasio falls
Macasio was at liberty to choose factual in nature and are, therefore,
within the rule on entitlement to these
whether to report for work or not as proscribed in a Rule 45 petition. He
claims or within the exception. In either
other butchers could carry out his tasks. argues that the CAs factual findings
case, the resolution of this factual issue
He points out that Solano and Antonio bind this Court, absent a showing that
presupposes another factual matter,
had, in fact, attested to their (David and such findings are not supported by the
that is, the presence of an employer-
Macasios) established "pakyawan" evidence or the CAs judgment was
employee relationship between David
arrangement that rendered a written based on a misapprehension of facts.
and Macasio.
contract unnecessary. In as much as He adds that the issue of whether an
Macasio is a task basis employee employer-employee relationship In insisting before this Court that
who is paid the fixed amount existed between him and David had Macasio was not his employee, David
of P700.00 per engagement regardless already been settled by the LA29 and argues that he engaged the latter on
of the time consumed in the the NLRC30 (as well as by the CA per "pakyaw" or task basis. Very noticeably,
performance David argues that Macasios manifestation before this David confuses engagement on
Macasio is not entitled to the benefits Court dated November 15, 2012),31 in "pakyaw" or task basis with the lack of
he claims. Also, he posits that because his favor, in the separate illegal case employment relationship. Impliedly,
he engaged Macasio on "pakyaw" or that he filed against David. David asserts that their "pakyawan" or
task basis then no employer-employee task basis arrangement negates the
The Issue
relationship exists between them. existence of employment relationship.
The issue revolves around the proper
Finally, David argues that factual At the outset, we reject this assertion of
application and interpretation of the
findings of the LA, when affirmed by the the petitioner. Engagement on
labor law provisions on holiday, SIL and
NLRC, attain finality especially when, "pakyaw" or task basis does not
13th month pay to a worker engaged on
as in this case, they are supported by characterize the relationship that may
"pakyaw" or task basis. In the context of
substantial evidence. Hence, David exist between the parties, i.e., whether
the Rule 65 petition before the CA, the
posits that the CA erred in reversing the one of employment or independent
issue is whether the CA correctly found
labor tribunals findings and granting contractorship. Article 97(6) of the
the NLRC in grave abuse of discretion
the prayed monetary claims. Labor Code defines wages as "xxx the
in ruling that Macasio is entitled to these
remuneration or earnings, however
The Case for the Respondent labor standards benefits.
designated, capable of being
Macasio counters that he was not a The Courts Ruling expressed in terms of money, whether
task basis employee or a "field fixed or ascertained on a time, task,
We partially grant the petition.
personnel" as David would have this piece, or commission basis, or other
Court believe.28 He reiterates his Preliminary considerations: the method of calculating the same, which
arguments before the lower tribunals Montoya ruling and the factual-issue- is payable by an employer to an
and adds that, contrary to Davids bar rule employee under a written or unwritten
position, the P700.00 fee that he was contract of employment for work done
In this Rule 45 petition for review on
paid for each day that he reported for or to be done, or for services rendered
certiorari of the CAs decision rendered
work does not indicate a "pakyaw" or or to be rendered[.]"35 In relation to
under a Rule 65 proceeding, this
task basis employment as this amount Article 97(6), Article 10136 of the Labor
Courts power of review is limited to
was paid daily, regardless of the Code speaks of workers paid by results
resolving matters pertaining to any
number or pieces of hogs that he had to or those whose pay is calculated in
perceived legal errors that the CA may
chop. Rather, it indicates a daily-wage terms of the quantity or quality of their
have committed in issuing the assailed
method of payment and affirms his work output which includes "pakyaw"
decision. This is in contrast with the
regular employment status. He points work and other non-time work.
review for jurisdictional errors, which we
out that David did not allege or present
undertake in an original certiorari More importantly, by implicitly arguing
any evidence as regards the quota or
action. In reviewing the legal that his engagement of Macasio on
number of hogs that he had to chop as
correctness of the CA decision, we "pakyaw" or task basis negates
basis for the "pakyaw" or task basis
examine the CA decision based on how employer-employee relationship, David
payment; neither did David present the
it determined the presence or absence would want the Court to engage on a
time record or payroll to prove that he
of grave abuse of discretion in the factual appellate review of the entire
worked for less than eight hours each
NLRC decision before it and not on the case to determine the presence or
day. Moreover, David did not present
basis of whether the NLRC decision on existence of that relationship. This
any contract to prove that his
the merits of the case was correct.32 In approach however is not authorized
employment was on task basis. As
other words, we have to be keenly under a Rule 45 petition for review of
David failed to prove the alleged task
aware that the CA undertook a Rule 65 the CA decision rendered under a Rule
basis or "pakyawan" agreement,
review, not a review on appeal, of the 65 proceeding.
Macasio concludes that he was Davids
NLRC decision challenged before it.33
employee. Procedurally, Macasio First, the LA and the NLRC denied
points out that Davids submissions in Moreover, the Courts power in a Rule Macasios claim not because of the
the present petition raise purely factual 45 petition limits us to a review of absence of an employer-employee but
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because of its finding that since had finished the days task. Solano and laws, especially when affirmed by the
Macasio is paid on pakyaw or task Antonio also confirmed this fact of wage CA, is binding on this Court.
basis, then he is not entitled to SIL, payment in their "Pinagsamang
A distinguishing characteristic of
holiday and 13th month pay. Second, Sinumpaang Salaysay."41 This satisfies
"pakyaw" or task basis engagement, as
we consider it crucial, that in the the element of "payment of wages."
opposed to straight-hour wage
separate illegal dismissal case Macasio
Third, David had been setting the day payment, is the non-consideration of
filed with the LA, the LA, the NLRC and
and time when Macasio should report the time spent in working. In a task-
the CA uniformly found the existence of
for work. This power to determine the basis work, the emphasis is on the task
an employer-employee relationship.37
work schedule obviously implies power itself, in the sense that payment is
In other words, aside from being factual of control. By having the power to reckoned in terms of completion of the
in nature, the existence of an employer- control Macasios work schedule, David work, not in terms of the number of time
employee relationship is in fact a non- could regulate Macasios work and spent in the completion of work.45 Once
issue in this case. To reiterate, in could even refuse to give him any the work or task is completed, the
deciding a Rule 45 petition for review of assignment, thereby effectively worker receives a fixed amount as
a labor decision rendered by the CA dismissing him. wage, without regard to the standard
under 65, the narrow scope of inquiry is measurements of time generally used
And fourth, David had the right and
whether the CA correctly determined in pay computation.
power to control and supervise
the presence or absence of grave
Macasios work as to the means and In Macasios case, the established facts
abuse of discretion on the part of the
methods of performing it. In addition to show that he would usually start his
NLRC. In concrete question form, "did
setting the day and time when Macasio work at 10:00 p.m. Thereafter,
the NLRC gravely abuse its discretion
should report for work, the established regardless of the total hours that he
in denying Macasios claims simply
facts show that David rents the place spent at the workplace or of the total
because he is paid on a non-time
where Macasio had been performing number of the hogs assigned to him for
basis?"
his tasks. Moreover, Macasio would chopping, Macasio would receive the
At any rate, even if we indulge the leave the workplace only after he had fixed amount of P700.00 once he had
petitioner, we find his claim that no finished chopping all of the hog meats completed his task. Clearly, these
employer-employee relationship exists given to him for the days task. Also, circumstances show a "pakyaw" or task
baseless. Employing the control David would still engage Macasios basis engagement that all three
test,38 we find that such a relationship services and have him report for work tribunals uniformly found.
exist in the present case. even during the days when only few
In sum, the existence of employment
hogs were delivered for butchering.
Even a factual review shows that relationship between the parties is
Macasio is Davids employee Under this overall setup, all those determined by applying the "four-fold"
working for David, including Macasio, test; engagement on "pakyaw" or task
To determine the existence of an
could naturally be expected to observe basis does not determine the parties
employer-employee relationship, four
certain rules and requirements and relationship as it is simply a method of
elements generally need to be
David would necessarily exercise some pay computation. Accordingly, Macasio
considered, namely: (1) the selection
degree of control as the chopping of the is Davids employee, albeit engaged on
and engagement of the employee; (2)
hog meats would be subject to his "pakyaw" or task basis.
the payment of wages; (3) the power of
specifications. Also, since Macasio
dismissal; and (4) the power to control As an employee of David paid on
performed his tasks at Davids
the employees conduct. These pakyaw or task basis, we now go to the
workplace, David could easily exercise
elements or indicators comprise the so- core issue of whether Macasio is
control and supervision over the former.
called "four-fold" test of employment entitled to holiday, 13th month, and SIL
Accordingly, whether or not David
relationship. Macasios relationship pay.
actually exercised this right or power to
with David satisfies this test.
control is beside the point as the law On the issue of Macasios entitlement to
First, David engaged the services of simply requires the existence of this holiday, SIL and 13th month pay
Macasio, thus satisfying the element of power to control 4243 or, as in this case,
The LA dismissed Macasios claims
"selection and engagement of the the existence of the right and
pursuant to Article 94 of the Labor Code
employee." David categorically opportunity to control and supervise
in relation to Section 1, Rule IV of the
confirmed this fact when, in his Macasio.44
IRR of the Labor Code, and Article 95
"Sinumpaang Salaysay," he stated that
In sum, the totality of the surrounding of the Labor Code, as well as
"nag apply po siya sa akin at kinuha ko
circumstances of the present case Presidential Decree (PD) No. 851. The
siya na chopper[.]"39 Also, Solano and
sufficiently points to an employer- NLRC, on the other hand, relied on
Antonio stated in their "Pinagsamang
employee relationship existing between Article 82 of the Labor Code and the
Sinumpaang Salaysay"40 that "[k]ami
David and Macasio. Rules and Regulations Implementing
po ay nagtratrabaho sa Yiels xxx na
PD No. 851. Uniformly, these
pag-aari ni Ariel David bilang butcher" Macasio is engaged on "pakyaw" or
provisions exempt workers paid on
and "kilalanamin si xxx Macasio na isa task basis
"pakyaw" or task basis from the
ring butcher xxx ni xxx David at kasama
At this point, we note that all three coverage of holiday, SIL and 13th
namin siya sa aming trabaho."
tribunals the LA, the NLRC and the month pay.
Second, David paid Macasios CA found that Macasio was engaged
In reversing the labor tribunals rulings,
wages.Both David and Macasio or paid on "pakyaw" or task basis. This
the CA similarly relied on these
categorically stated in their respective factual finding binds the Court under the
provisions, as well as on Section 1,
pleadings before the lower tribunals rule that factual findings of labor
Rule V of the IRR of the Labor Code
and even before this Court that the tribunals when supported by the
and the Courts ruling in Serrano v.
former had been paying the established facts and in accord with the
Severino Santos Transit.46 These labor
latter P700.00 each day after the latter
law provisions, when read together with
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the Serrano ruling, exempt those results" on the other hand, are not irrespective of the time consumed in the
engaged on "pakyaw" or task basis only covered by the Title I provisions. The performance thereof. [emphasis ours]
if they qualify as "field personnel." wordings of Article82 of the Labor Code
Under these provisions, the general
additionally categorize workers "paid by
In other words, what we have before us rule is that holiday and SIL pay
results" and "field personnel" as
is largely a question of law regarding provisions cover all employees. To be
separate and distinct types of
the correct interpretation of these labor excluded from their coverage, an
employees who are exempted from the
code provisions and the implementing employee must be one of those that
Title I provisions of the Labor Code.
rules; although, to conclude that the these provisions expressly exempt,
worker is exempted or covered The pertinent portion of Article 94 of the strictly in accordance with the
depends on the facts and in this sense, Labor Code and its corresponding exemption. Under the IRR, exemption
is a question of fact: first, whether provision in the IRR47 reads: from the coverage of holiday and SIL
Macasio is a "field personnel"; and pay refer to "field personnel and other
Art. 94. Right to holiday pay. (a) Every
second, whether those engaged on employees whose time and
worker shall be paid his regular daily
"pakyaw" or task basis, but who are not performance is unsupervised by the
wage during regular holidays, except in
"field personnel," are exempted from employer including those who are
retail and service establishments
the coverage of holiday, SIL and 13th engaged on task or contract basis[.]"
regularly employing less than (10)
month pay. Note that unlike Article 82 of the Labor
workers[.] [emphasis ours]
Code, the IRR on holiday and SIL pay
To put our discussion within the
xxxx do not exclude employees "engaged on
perspective of a Rule 45 petition for
task basis" as a separate and distinct
review of a CA decision rendered under SECTION 1. Coverage. This Rule
category from employees classified as
Rule 65 and framed in question form, shall apply to all employees except:
"field personnel." Rather, these
the legal question is whether the CA
xxxx employees are altogether merged into
correctly ruled that it was grave abuse
(e)Field personnel and other one classification of exempted
of discretion on the part of the NLRC to
employees.
deny Macasios monetary claims simply employees whose time and
because he is paid on a non-time basis performance is unsupervised by the Because of this difference, it may be
without determining whether he is a employer including those who are argued that the Labor Code may be
field personnel or not. engaged on task or contract basis, interpreted to mean that those who are
purely commission basis, or those who engaged on task basis, per se, are
To resolve these issues, we need tore-
are paid a fixed amount for performing excluded from the SIL and holiday
visit the provisions involved.
work irrespective of the time consumed payment since this is what the Labor
Provisions governing SIL and holiday in the performance thereof. [emphases Code provisions, in contrast with the
pay ours] IRR, strongly suggest. The arguable
On the other hand, Article 95 of the interpretation of this rule may be
Article 82 of the Labor Code provides
Labor Code and its corresponding conceded to be within the discretion
the exclusions from the coverage of
provision in the IRR48 pertinently granted to the LA and NLRC as the
Title I, Book III of the Labor Code -
provides: quasi-judicial bodies with expertise on
provisions governing working
labor matters.
conditions and rest periods.
Art. 95. Right to service incentive. (a)
Every employee who has rendered at However, as early as 1987 in the case
Art. 82. Coverage. The provisions of
least one year of service shall be of Cebu Institute of Technology v.
[Title I] shall apply to employees in all
entitled to a yearly service incentive Ople49 the phrase "those who are
establishments and undertakings
leave of five days with pay. engaged on task or contract basis" in
whether for profit or not, but not to
the rule has already been interpreted to
government employees, managerial
(b) This provision shall not apply to mean as follows:
employees, field personnel, members
those who are already enjoying the
of the family of the employer who are [the phrase] should however, be related
benefit herein provided, those enjoying
dependent on him for support, domestic with "field personnel" applying the rule
vacation leave with pay of at least five
helpers, persons in the personal service on ejusdem generis that general and
days and those employed in
of another, and workers who are paid unlimited terms are restrained and
establishments regularly employing
by results as determined by the limited by the particular terms that they
less than ten employees or in
Secretary of Labor in appropriate follow xxx Clearly, petitioner's teaching
establishments exempted from granting
regulations. personnel cannot be deemed field
this benefit by the Secretary of Labor
and Employment after considering the personnel which refers "to non-
xxxx
viability or financial condition of such agricultural employees who regularly
"Field personnel" shall refer to non- perform their duties away from the
establishment. [emphases ours]
agricultural employees who regularly principal place of business or branch
perform their duties away from the xxxx office of the employer and whose actual
principal place of business or branch hours of work in the field cannot be
Section 1. Coverage. This rule shall
office of the employer and whose actual apply to all employees except: determined with reasonable certainty.
hours of work in the field cannot be [Par. 3, Article 82, Labor Code of the
determined with reasonable certainty. xxxx Philippines]. Petitioner's claim that
[emphases and underscores ours] (e) Field personnel and other private respondents are not entitled to
Among the Title I provisions are the employees whose performance is the service incentive leave benefit
provisions on holiday pay (under Article unsupervised by the employer including cannot therefore be sustained.
94 of the Labor Code) and SIL pay those who are engaged on task or In short, the payment of an employee
(under Article 95 of the Labor Code). contract basis, purely commission on task or pakyaw basis alone is
Under Article 82,"field personnel" on basis, or those who are paid a fixed insufficient to exclude one from the
one hand and "workers who are paid by amount for performing work
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coverage of SIL and holiday pay. They which SIL shall not be granted. Rather, Based on the definition of field
are exempted from the coverage of Title as with its preceding phrase - "other personnel under Article 82, we agree
I (including the holiday and SIL pay) employees whose performance is with the CA that Macasio does not fall
only if they qualify as "field personnel." unsupervised by the employer" - the under the definition of "field personnel."
The IRR therefore validly qualifies and phrase "including those who are The CAs finding in this regard is
limits the general exclusion of "workers engaged on task or contract basis" supported by the established facts of
paid by results" found in Article 82 from serves to amplify the interpretation of this case: first, Macasio regularly
the coverage of holiday and SIL pay. the Labor Code definition of "field performed his duties at Davids
This is the only reasonable personnel" as those "whose actual principal place of business; second, his
interpretation since the determination of hours of work in the field cannot be actual hours of work could be
excluded workers who are paid by determined with reasonable certainty." determined with reasonable certainty;
results from the coverage of Title I is and, third, David supervised his time
In contrast and in clear departure from
"determined by the Secretary of Labor and performance of duties. Since
settled case law, the LA and the NLRC
in appropriate regulations." Macasio cannot be considered a "field
still interpreted the Labor Code
personnel," then he is not exempted
The Cebu Institute Technology ruling provisions and the IRR as exempting an
from the grant of holiday, SIL pay even
was reiterated in 2005 in Auto Bus employee from the coverage of Title I of
as he was engaged on "pakyaw" or task
Transport Systems, Inc., v. Bautista: the Labor Code based simply and
basis.
solely on the mode of payment of an
A careful perusal of said provisions of
employee. The NLRCs utter disregard Not being a "field personnel," we find
law will result in the conclusion that the
of this consistent jurisprudential ruling is the CA to be legally correct when it
grant of service incentive leave has
a clear act of grave abuse of reversed the NLRCs ruling dismissing
been delimited by the Implementing
discretion.52 In other words, by Macasios complaint for holiday and SIL
Rules and Regulations of the Labor
dismissing Macasios complaint without pay for having been rendered with
Code to apply only to those employees
considering whether Macasio was a grave abuse of discretion.
not explicitly excluded by Section 1 of
"field personnel" or not, the NLRC
Rule V. According to the Implementing Entitlement to 13th month pay
proceeded based on a significantly
Rules, Service Incentive Leave shall
incomplete consideration of the case. With respect to the payment of 13th
not apply to employees classified as
This action clearly smacks of grave month pay however, we find that the CA
"field personnel." The phrase "other
abuse of discretion. legally erred in finding that the NLRC
employees whose performance is
gravely abused its discretion in denying
unsupervised by the employer" must Entitlement to holiday pay
this benefit to Macasio.1wphi1
not be understood as a separate
Evidently, the Serrano ruling speaks
classification of employees to which The governing law on 13th month pay
only of SIL pay. However, if the LA and
service incentive leave shall not be is PD No. 851.53
the NLRC had only taken counsel from
granted. Rather, it serves as an
Serrano and earlier cases, they would As with holiday and SIL pay, 13th
amplification of the interpretation of the
have correctly reached a similar month pay benefits generally cover all
definition of field personnel under the
conclusion regarding the payment of employees; an employee must be one
Labor Code as those "whose actual
holiday pay since the rule exempting of those expressly enumerated to be
hours of work in the field cannot be
"field personnel" from the grant of exempted. Section 3 of the Rules and
determined with reasonable certainty."
holiday pay is identically worded with Regulations Implementing P.D. No.
The same is true with respect to the the rule exempting "field personnel" 85154 enumerates the exemptions from
phrase "those who are engaged on task from the grant of SIL pay. To be clear, the coverage of 13th month pay
or contract basis, purely commission the phrase "employees engaged on benefits. Under Section 3(e),
basis." Said phrase should be related task or contract basis "found in the IRR "employers of those who are paid on
with "field personnel," applying the rule on both SIL pay and holiday pay should xxx task basis, and those who are paid
on ejusdem generis that general and be read together with the exemption of a fixed amount for performing a specific
unlimited terms are restrained and "field personnel." work, irrespective of the time consumed
limited by the particular terms that they in the performance thereof"55 are
In short, in determining whether
follow. exempted.
workers engaged on "pakyaw" or task
The Autobus ruling was in turn the basis basis" is entitled to holiday and SIL pay, Note that unlike the IRR of the Labor
of Serrano v. Santos Transit which the the presence (or absence) of employer Code on holiday and SIL pay, Section
CA cited in support of granting supervision as regards the workers 3(e) of the Rules and Regulations
Macasios petition. time and performance is the key: if the Implementing PD No. 851 exempts
worker is simply engaged on pakyaw or employees "paid on task basis" without
In Serrano, the Court, applying the rule
task basis, then the general rule is that any reference to "field personnel." This
on ejusdem generis50 declared that
he is entitled to a holiday pay and SIL could only mean that insofar as
"employees engaged on task or
pay unless exempted from the payment of the 13th month pay is
contract basis xxx are not automatically
exceptions specifically provided under concerned, the law did not intend to
exempted from the grant of service
Article 94 (holiday pay) and Article95 qualify the exemption from its coverage
incentive leave, unless, they fall under
(SIL pay) of the Labor Code. However, with the requirement that the task
the classification of field
if the worker engaged on pakyaw or worker be a "field personnel" at the
personnel."51 The Court explained that
task basis also falls within the meaning same time.
the phrase "including those who are
of "field personnel" under the law, then
engaged on task or contract basis, WHEREFORE, in light of these
he is not entitled to these monetary
purely commission basis" found in considerations, we hereby PARTIALLY
benefits.
Section 1(d), Rule V of Book III of the GRANT the petition insofar as the
IRR should not be understood as a Macasio does not fall under the payment of 13th month pay to
separate classification of employees to classification of "field personnel" respondent is concerned. In all other
aspects, we AFFIRM the decision dated
Page 6 of 59 Week 3 Cases (Labor Law Review) | amgisidro

November 22, 2010 and the resolution "[Pearanda] through counsel in his accepted separation benefits, sick and
dated January 31, 2011 of the Court of position paper alleges that he was vacation leave conversions and
Appeals in CA-G.R. SP No. 116003. employed by respondent [Baganga] on thirteenth month pay.12
March 15, 1999 with a monthly salary
SO ORDERED. Nevertheless, the labor arbiter found
of P5,000.00 as Foreman/Boiler
petitioner entitled to overtime pay,
G.R. No. 159577 May 3, 2006 Head/Shift Engineer until he was
premium pay for working on rest days,
illegally terminated on December 19,
CHARLITO PEARANDA, Petitioner, and attorneys fees in the total amount
2000. Further, [he] alleges that his
vs. of P21,257.98.13
services [were] terminated without the
BAGANGA PLYWOOD benefit of due process and valid Ruling of the NLRC
CORPORATION and HUDSON grounds in accordance with law.
CHUA, Respondents. Respondents filed an appeal to the
Furthermore, he was not paid his
NLRC, which deleted the award of
DECISION overtime pay, premium pay for working
overtime pay and premium pay for
during holidays/rest days, night shift
PANGANIBAN, CJ: working on rest days. According to the
differentials and finally claims for
Commission, petitioner was not entitled
Managerial employees and members of payment of damages and attorneys
to these awards because he was a
the managerial staff are exempted from fees having been forced to litigate the
managerial employee.14
the provisions of the Labor Code on present complaint.
labor standards. Since petitioner Ruling of the Court of Appeals
"Upon the other hand, respondent
belongs to this class of employees, he [BPC] is a domestic corporation duly In its Resolution dated January 27,
is not entitled to overtime pay and organized and existing under Philippine 2003, the CA dismissed Pearandas
premium pay for working on rest days. laws and is represented herein by its Petition for Certiorari. The appellate
The Case General Manager HUDSON CHUA, court held that he failed to: 1) attach
[the] individual respondent. copies of the pleadings submitted
Before us is a Petition for Respondents thru counsel allege that before the labor arbiter and NLRC; and
Review1 under Rule 45 of the Rules of complainants separation from service 2) explain why the filing and service of
Court, assailing the January 27, was done pursuant to Art. 283 of the the Petition was not done by personal
20032 and July 4, 20033 Resolutions of Labor Code. The respondent [BPC] service.15
the Court of Appeals (CA) in CA-GR SP was on temporary closure due to repair
No. 74358. The earlier Resolution In its later Resolution dated July 4,
and general maintenance and it applied 2003, the CA denied reconsideration on
disposed as follows: for clearance with the Department of the ground that petitioner still failed to
"WHEREFORE, premises considered, Labor and Employment, Regional submit the pleadings filed before the
the instant petition is Office No. XI to shut down and to NLRC.16
hereby DISMISSED."4 dismiss employees (par. 2 position
paper). And due to the insistence of Hence this Petition.17
The latter Resolution denied herein complainant he was paid his
reconsideration. The Issues
separation benefits (Annexes C and D,
On the other hand, the Decision of the ibid). Consequently, when respondent Petitioner states the issues in this wise:
National Labor Relations Commission [BPC] partially reopened in January "The [NLRC] committed grave abuse of
(NLRC) challenged in the CA disposed 2001, [Pearanda] failed to reapply. discretion amounting to excess or lack
as follows: Hence, he was not terminated from of jurisdiction when it entertained the
employment much less illegally. He APPEAL of the respondent[s] despite
"WHEREFORE, premises considered, opted to severe employment when he
the decision of the Labor Arbiter below the lapse of the mandatory period of
insisted payment of his separation TEN DAYS.1avvphil.net
awarding overtime pay and premium benefits. Furthermore, being a
pay for rest day to complainant is managerial employee he is not entitled "The [NLRC] committed grave abuse of
hereby REVERSED and SET ASIDE, to overtime pay and if ever he rendered discretion amounting to an excess or
and the complaint in the above-entitled services beyond the normal hours of lack of jurisdiction when it rendered the
case dismissed for lack of merit.5 work, [there] was no office order/or assailed RESOLUTIONS dated May 8,
The Facts authorization for him to do so. Finally, 2002 and AUGUST 16, 2002
respondents allege that the claim for REVERSING AND SETTING ASIDE
Sometime in June 1999, Petitioner damages has no legal and factual basis the FACTUAL AND LEGAL FINDINGS
Charlito Pearanda was hired as an and that the instant complaint must of the [labor arbiter] with respect to the
employee of Baganga Plywood necessarily fail for lack of merit."10 following:
Corporation (BPC) to take charge of the
operations and maintenance of its The labor arbiter ruled that there was no "I. The finding of the [labor arbiter] that
steam plant boiler.6 In May 2001, illegal dismissal and that petitioners [Pearanda] is a regular, common
Pearanda filed a Complaint for illegal Complaint was premature because he employee entitled to monetary benefits
dismissal with money claims against was still employed by BPC.11 The under Art. 82 [of the Labor Code].
BPC and its general manager, Hudson temporary closure of BPCs plant did "II. The finding that [Pearanda] is
Chua, before the NLRC.7 not terminate his employment, hence, entitled to the payment of OVERTIME
he need not reapply when the plant PAY and OTHER MONETARY
After the parties failed to settle reopened.
amicably, the labor arbiter8 directed the BENEFITS."18
parties to file their position papers and According to the labor arbiter, The Courts Ruling
submit supporting documents.9 Their petitioners money claims for illegal
respective allegations are summarized dismissal was also weakened by his The Petition is not meritorious.
by the labor arbiter as follows: quitclaim and admission during the Preliminary Issue:
clarificatory conference that he
Resolution on the Merits
Page 7 of 59 Week 3 Cases (Labor Law Review) | amgisidro

The CA dismissed Pearandas Second Issue: training, experience, or knowledge; or


Petition on purely technical grounds, (iii) execute under general supervision
Nature of Employment
particularly with regard to the failure to special assignments and tasks; and
submit supporting documents. Petitioner claims that he was not a
"(4) who do not devote more than 20
managerial employee, and therefore,
In Atillo v. Bombay,19 the Court held percent of their hours worked in a
entitled to the award granted by the
that the crucial issue is whether the workweek to activities which are not
labor arbiter.
documents accompanying the petition directly and closely related to the
before the CA sufficiently supported the Article 82 of the Labor Code exempts performance of the work described in
allegations therein. Citing this case, managerial employees from the paragraphs (1), (2), and (3) above."33
Piglas-Kamao v. NLRC20 stayed the coverage of labor standards. Labor
As shift engineer, petitioners duties
dismissal of an appeal in the exercise of standards provide the working
and responsibilities were as follows:
its equity jurisdiction to order the conditions of employees, including
adjudication on the merits. entitlement to overtime pay and "1. To supply the required and
premium pay for working on rest continuous steam to all consuming
The Petition filed with the CA shows a
days.29 Under this provision, units at minimum cost.
prima facie case. Petitioner attached
managerial employees are "those
his evidence to challenge the finding "2. To supervise, check and monitor
whose primary duty consists of the
that he was a managerial manpower workmanship as well as
management of the establishment in
employee.21 In his Motion for operation of boiler and accessories.
which they are employed or of a
Reconsideration, petitioner also
department or subdivision."30 "3. To evaluate performance of
submitted the pleadings before the
machinery and manpower.
labor arbiter in an attempt to comply The Implementing Rules of the Labor
with the CA rules.22 Evidently, the CA Code state that managerial employees "4. To follow-up supply of waste and
could have ruled on the Petition on the are those who meet the following other materials for fuel.
basis of these attachments. Petitioner conditions:
"5. To train new employees for effective
should be deemed in substantial and safety while working.
"(1) Their primary duty consists of the
compliance with the procedural
management of the establishment in
requirements. "6. Recommend parts and supplies
which they are employed or of a
purchases.
Under these extenuating department or subdivision thereof;
circumstances, the Court does not "7. To recommend personnel actions
"(2) They customarily and regularly
hesitate to grant liberality in favor of such as: promotion, or disciplinary
direct the work of two or more
petitioner and to tackle his substantive action.
employees therein;
arguments in the present case. Rules of "8. To check water from the boiler,
procedure must be adopted to help "(3) They have the authority to hire or
feedwater and softener, regenerate
promote, not frustrate, substantial fire other employees of lower rank; or
softener if beyond hardness limit.
justice.23 The Court frowns upon the their suggestions and
practice of dismissing cases purely on recommendations as to the hiring and "9. Implement Chemical Dosing.
procedural grounds.24 Considering that firing and as to the promotion or any "10. Perform other task as required by
there was substantial compliance,25 a other change of status of other the superior from time to time."34
liberal interpretation of procedural rules employees are given particular
in this labor case is more in keeping weight."31 The foregoing enumeration, particularly
with the constitutional mandate to items 1, 2, 3, 5 and 7 illustrates that
The Court disagrees with the NLRCs petitioner was a member of the
secure social justice.26 finding that petitioner was a managerial managerial staff. His duties and
First Issue: employee. However, petitioner was a responsibilities conform to the definition
member of the managerial staff, which of a member of a managerial staff under
Timeliness of Appeal
also takes him out of the coverage of the Implementing Rules.
Under the Rules of Procedure of the labor standards. Like managerial
NLRC, an appeal from the decision of employees, officers and members of Petitioner supervised the engineering
the labor arbiter should be filed within the managerial staff are not entitled to section of the steam plant boiler. His
10 days from receipt thereof.27 the provisions of law on labor work involved overseeing the operation
standards.32 The Implementing Rules of the machines and the performance of
Petitioners claim that respondents filed the workers in the engineering section.
of the Labor Code define members of a
their appeal beyond the required period This work necessarily required the use
managerial staff as those with the
is not substantiated. In the pleadings of discretion and independent judgment
following duties and responsibilities:
before us, petitioner fails to indicate to ensure the proper functioning of the
when respondents received the "(1) The primary duty consists of the steam plant boiler. As supervisor,
Decision of the labor arbiter. Neither did performance of work directly related to petitioner is deemed a member of the
the petitioner attach a copy of the management policies of the employer; managerial staff.35
challenged appeal. Thus, this Court has
"(2) Customarily and regularly exercise Noteworthy, even petitioner admitted
no means to determine from the
discretion and independent judgment; that he was a supervisor. In his Position
records when the 10-day period
commenced and terminated. Since "(3) (i) Regularly and directly assist a Paper, he stated that he was the
petitioner utterly failed to support his proprietor or a managerial employee foreman responsible for the operation
claim that respondents appeal was whose primary duty consists of the of the boiler.36 The term foreman
filed out of time, we need not belabor management of the establishment in implies that he was the representative
that point. The parties alleging have the which he is employed or subdivision of management over the workers and
burden of substantiating their thereof; or (ii) execute under general the operation of the
allegations.28 supervision work along specialized or department.37 Petitioners evidence
technical lines requiring special also showed that he was the supervisor
Page 8 of 59 Week 3 Cases (Labor Law Review) | amgisidro

of the steam plant.38 His classification Coffee break time will be ten minutes petitioner was ordered to pay "the
as supervisor is further evident from the only anytime between: money value of these covered
manner his salary was paid. He employees deprived of lunch and/or
9:30 A.M. 10:30 A.M. and
belonged to the 10% of respondents working time breaks." The public
354 employees who were paid on a 2:30 P.M. 3:30 P.M. respondent declared that the new work
monthly basis; the others were paid schedule deprived the employees of the
Lunch break will be between:
only on a daily basis.39 benefits of a time-honored company
12:00 NN 1:00 P.M. (Monday to practice of providing its employees a
On the basis of the foregoing, the Court
Friday). 30-minute paid lunch break resulting in
finds no justification to award overtime
Excluded from the above schedule are an unjust diminution of company
pay and premium pay for rest days to
the Warehouse and QA employees who privileges prohibited by Art. 100 of the
petitioner.
are on shifting. Their work and break Labor Code, as amended. Hence, this
WHEREFORE, the Petition is DENIED. petition alleging that public respondent
time schedules will be maintained as it
Costs against petitioner. is now. 1 committed grave abuse of discretion
amounting to lack or excess of
SO ORDERED.
Since private respondent felt affected jurisdiction: (a) in ruling that petitioner
adversely by the change in the work committed unfair labor practice in the
schedule and discontinuance of the 30- implementation of the change in the
G.R. No. 119205 April 15, 1998 minute paid "on call" lunch break, it filed work schedule of its employees from
SIME DARBY PILIPINAS, on behalf of its members a complaint 7:45 a.m. 3:45 p.m. to 7:45 a.m.
INC. petitioner, with the Labor Arbiter for unfair labor 4:45 p.m. with one-hour lunch break
vs. practice, discrimination and evasion of from 12:00 nn to 1:00 p.m.; (b) in
NATIONAL LABOR RELATIONS liability pursuant to the resolution of this holding that there was diminution of
COMMISSION (2ND DIVISION) and Court in Sime Darby International Tire benefits when the 30-minute paid lunch
SIME DARBY SALARIED Co., Inc. v. NLRC. 2 However, the break was eliminated; (c) in failing to
EMPLOYEES ASSOCIATION (ALU- Labor Arbiter dismissed the complaint consider that in the earlier Sime Darby
TUCP), respondents. on the ground that the change in the case affirming the decision of the
work schedule and the elimination of NLRC, petitioner was authorized to
the 30-minute paid lunch break of the discontinue the practice of having a 30-
BELLOSILLO, J.: factory workers constituted a valid minute paid lunch break should it
exercise of management prerogative decide to do so; and, (d) in ignoring
Is the act of management in revising the and that the new work schedule, break petitioner's inherent management
work schedule of its employees and time and one-hour lunch break did not prerogative of determining and fixing
discarding their paid lunch break have the effect of diminishing the the work schedule of its employees
constitutive of unfair labor practice? benefits granted to factory workers as which is expressly recognized in the
Sime Darby Pilipinas, Inc., petitioner, is the working time did not exceed eight collective bargaining agreement
engaged in the manufacture of (8) hours. between petitioner and private
automotive tires, tubes and other The Labor Arbiter further held that the respondent.
rubber products. Sime Darby Salaried factory workers would be unjustly The Office of the Solicitor General filed
Employees Association (ALU-TUCP), enriched if they continued to be paid in a lieu of comment a manifestation
private respondent, is an association of during their lunch break even if they and motion recommending that the
monthly salaried employees of were no longer "on call" or required to petitioner be granted, alleging that the
petitioner at its Marikina factory. Prior to work during the break. He also ruled 14 August 1992 memorandum which
the present controversy, all company that the decision in the earlier Sime contained the new work schedule was
factory workers in Marikina including Darby case 3 was not applicable to the not discriminatory of the union
members of private respondent union instant case because the former members nor did it constitute unfair
worked from 7:45 a.m. to 3:45 p.m. with involved discrimination of certain labor practice on the part of petitioner.
a 30-minute paid "on call" lunch break. employees who were not paid for their
30-minute lunch break while the rest of We agree, hence, we sustain petitioner.
On 14 August 1992 petitioner issued a The right to fix the work schedules of
memorandum to all factory-based the factory workers were paid; hence,
this Court ordered that the the employees rests principally on their
employees advising all its monthly employer. In the instant case petitioner,
salaried employees in its Marikina Tire discriminated employees be similarly
paid the additional compensation for as the employer, cites as reason for the
Plant, except those in the Warehouse adjustment the efficient conduct of its
and Quality Assurance Department their lunch break.
business operations and its improved
working on shifts, a change in work Private respondent appealed to production. 6 It rationalizes that while
schedule effective 14 September 1992 respondent National Labor Relations the old work schedule included a 30-
thus Commission (NLRC) which sustained minute paid lunch break, the employees
TO: ALL FACTORY-BASED the Labor Arbiter and dismissed the could be called upon to do jobs during
EMPLOYEES appeal. 4 However, upon motion for that period as they were "on call." Even
reconsideration by private respondent, if denominated as lunch break, this
RE: NEW WORK SCHEDULE the NLRC, this time with two (2) new period could very well be considered as
Effective Monday, September 14, 1992, commissioners replacing those who working time because the factory
the new work schedule of the factory earlier retired, reversed its earlier employees were required to work if
office will be as follows: decision of 20 April 1994 as well as the necessary and were paid accordingly
decision of the Labor Arbiter. 5 The for working. With the new work
7:45 A.M. 4:45 P.M. (Monday to NLRC considered the decision of this schedule, the employees are now given
Friday) Court in the Sime Darby case of 1990 a one-hour lunch break without any
7:45 A.M. 11:45 A.M. (Saturday). as the law of the case wherein interruption from their employer. For a
Page 9 of 59 Week 3 Cases (Labor Law Review) | amgisidro

full one-hour undisturbed lunch break, whenever exigencies of the service so the time sheet of said employees from
the employees can freely and require, to change the working hours of February 23 1952 up to and including
effectively use this hour not only for its employees. So long as such July 15, 1958 and to submit his report
eating but also for their rest and comfort prerogative is exercised in good faith for within 30 days for further disposition by
which are conducive to more efficiency the advancement of the employer's the Court; and the company shall show
and better performance in their work. interest and not for the purpose of to the Court Examiner such time sheets
Since the employees are no longer defeating or circumventing the rights of an other documents that may be
required to work during this one-hour the employees under special laws or necessary in the aforesaid
lunch break, there is no more need for under valid agreements, this Court will computation; and two (2)
them to be compensated for this period. uphold such exercise. 12 representatives for the company and
We agree with the Labor Arbiter that the two (2) representatives for the union
While the Constitution is committed to
new work schedule fully complies with shall be chosen to help the Court
the policy of social justice and the
the daily work period of eight (8) hours Examiner in said computation.
protection of the working class, it should
without violating the Labor
not be supposed that every dispute will The company is also ordered to
Code. 7 Besides, the new schedule
be automatically decided in favor of permanently adopt the straight 8-hour
applies to all employees in the factory
labor. Management also has rights shift inclusive of meal period which is
similarly situated whether they are
which, as such, are entitled to respect mutually beneficial to the parties.
union members or not. 8
and enforcement in the interest of
SO ORDERED.
Consequently, it was grave abuse of simple fair play. Although this Court has
discretion for public respondent to inclined more often than not toward the In this appeal, petitioner advances five
equate the earlier Sime Darby worker and has upheld his cause in his proposition which, briefly, are as
case 9 with the facts obtaining in this conflicts with the employer, such follows: (1) the Industrial Court has no
case. That ruling in the former case is favoritism has not blinded the Court to jurisdiction to order the payment of
not applicable here. The issue in that the rule that justice is in every case for overtime compensation, it being a mere
case involved the matter of granting the deserving, to be dispensed in the monetary claim cognizable by regular
lunch breaks to certain employees light of the established facts and the courts; (2) the finding that the one-hour
while depriving the other employees of applicable law and doctrine. 13 meal period should be considered
such breaks. This Court affirmed in that overtime work (deducting 15 minutes as
WHEREFORE, the Petition is
case the NLRC's finding that such act time allotted for eating) is not supported
GRANTED. The Resolution of the
of management was discriminatory and by substantial evidence; (3) the court
National Labor Relations Commission
constituted unfair labor practice. below had no authority to delegate its
dated 29 November 1994 is SET
judicial functions by ordering the Chief
The case before us does not pertain to ASIDE and the decision of the Labor
of the Examining Division or his
any controversy involving Arbiter dated 26 November 1993
representative to compute the overtime
discrimination of employees but only dismissing the complaint against
pay; (4) the finding that there was no
the issue of whether the change of work petitioner for unfair labor practice is
agreement to withdraw Case No. 1055-
schedule, which management deems AFFIRMED.
V in consideration of the wage
necessary to increase production,
SO ORDERED. increases in the Collective Bargaining
constitutes unfair labor practice. As
Contract (Exh. "A") is not supported by
shown by the records, the change G.R. No. L-16275 February substantial evidence; and (5) the court
effected by management with regard to 23, 1961 below had no authority to order the
working time is made to apply to all
PAN AMERICAN WORLD AIRWAYS company to adopt a straight 8-hour
factory employees engaged in the
SYSTEM (PHILIPPINES), petitioner, shift inclusive of meal period.
same line of work whether or not they
are members of private respondent vs. On the issue of jurisdiction over claims
union. Hence, it cannot be said that the PAN AMERICAN EMPLOYEES for overtime pay, we have since
new scheme adopted by management ASSOCIATION, respondent. definitely ruled in a recent decisions
prejudices the right of private Ross, Selph and Carrascoso for that the Industrial Court may properly
respondent to self-organization. petitioner. take cognizance of such cases if, at the
Jose Espinas for respondent. time of the petition, the complainants
Every business enterprise endeavors to
were still in the service of the employer,
increase its profits. In the process, it REYES, J.B.L., J.: or, having been separated from such
may devise means to attain that goal.
Appeal by certiorari from the decision service, should ask for reinstatement;
Even as the law is solicitous of the
of the Court of Industrial Relations in otherwise, such claims should be
welfare of the employees, it must also
Case No. 1055-V dated October 10, brought before the regular courts
protect the right of an employer to
1959, and its resolution en (NASSCO v. CIR, et al., L-13888, April
exercise what are clearly management
banc denying the motion for 29, 1960; FRISCO v. CIR, et al., L-
prerogatives. 10 Thus, management is
reconsideration filed by the petitioner 13806, May 23, 1960; Board of
free to regulate, according to its own
herein. Liquidators, et al. vs. CIR, et al., L-
discretion and judgment, all aspects of
15485, May 23, 1960; Sta. Cecilia,
employment, including hiring, work The dispositive portion of the appealed Sawmills Co. vs. CIR, L-14254 & L-
assignments, working methods, time, decision reads: . 14255, May 27, 1960; Ajax International
place and manner of work, processes to
WHEREFORE, the Court orders the Corp. v. Seguritan, L-16038, October
be followed, supervision of workers,
Chief of the Examining Division or his 25, 1960; Sampaguita Pictures, Inc., et
working regulations, transfer of
representative to compute the overtime al. vs. CIR, L-16404, October 25, 1960).
employees, work supervision, lay off of
compensation due the aforesaid Since, in the instant case there is no
workers and discipline, dismissal and
fourteen (14) aircraft mechanic and the question that the employees claiming
recall of workers. 11 Further,
two employees from the overtime compensation were still in the
management retains the prerogative,
Communication Department based on service of the company when the case
Page 10 of 59 Week 3 Cases (Labor Law Review) | amgisidro

was filed, the jurisdiction of the Court of submitted to the Industrial Court for its December 12, 1986 in NLRC Case No.
Industrial Relations cannot be assailed. approval, by the very terms of the order 2327 MC-XI-84 entitled Teofilo Arica et
In fact, since it is not pretended that, itself. That there was no specification of al. vs. Standard (Phil.) Fruits
thereafter, the complainants were the amount of overtime pay in the Corporation (STANFILCO) which
discharged or otherwise terminated decision did not make it incomplete, affirmed the decision of Labor Arbiter
their relationship with the company for since this matter would necessarily be Pedro C. Ramos, NLRC, Special Task
any reason, all of said complainants made clear enough in the Force, Regional Arbitration Branch No.
could still be with the company up to the implementation of the decision (see XI, Davao City dismissing the claim of
present. Malate Taxicab & Garage, Inc. vs. CIR, petitioners.
et al., L-8718, May 11, 1956).
Petitioner herein claims that the one- This case stemmed from a complaint
hour meal period should not be The Industrial Court's order for filed on April 9, 1984 against private
considered as overtime work (after permanent adoption of a straight 8-hour respondent Stanfilco for assembly time,
deducting 15 minutes), because the shift including the meal period was but moral damages and attorney's fees,
evidence showed that complainants a consequence of its finding that the with the aforementioned Regional
could rest completely, and were not in meal hour was not one of complete rest, Arbitration Branch No. XI, Davao City.
any manner under the control of the but was actually a work hour, since for
After the submission by the parties of
company during that period. The court its duration, the laborers had to be on
their respective position papers (Annex
below found, on the contrary, that ready call. Of course, if the Company
"C", pp. 30-40; Annex "D", Rollo, pp. 41-
during the so called meal period, the practices in this regard should be
50), Labor Arbiter Pedro C. Ramos
mechanics were required to stand by modified to afford the mechanics a real
rendered a decision dated October 9,
for emergency work; that if they rest during that hour (f. ex., by installing
1985 (Annex 'E', Rollo, pp. 51-58) in
happened not to be available when an entirely different emergency crew, or
favor of private respondent
called, they were reprimanded by the any similar arrangement), then the
STANFILCO, holding that:
leadman; that as in fact it happened on modification of this part of the decision
many occasions, the mechanics had may be sought from the Court below. Given these facts and circumstances,
been called from their meals or told to As things now stand, we see no warrant we cannot but agree with respondent
hurry Employees Association up eating for altering the decision. that the pronouncement in that earlier
to perform work during this period. Far case, i.e. the thirty-minute assembly
The judgment appealed from is
from being unsupported by substantial time long practiced cannot be
affirmed. Costs against appellant.
evidence, the record clearly confirms considered waiting time or work time
the above factual findings of the G.R. No. 78210 February 28, 1989 and, therefore, not compensable, has
Industrial Court. become the law of the case which can
TEOFILO ARICA, DANILO no longer be disturbed without doing
Similarly, this Court is satisfied with the BERNABE, MELQUIADES DOHINO, violence to the time- honored principle
finding that there was no agreement to ABONDIO OMERTA, GIL of res-judicata.
withdraw Case No. 1055-V in TANGIHAN, SAMUEL LABAJO,
consideration of the wage increases NESTOR NORBE, RODOLFO WHEREFORE, in view of the foregoing
obtained by the, union and set forth in CONCEPCION, RICARDO RICHA, considerations, the instant complaint
the Collective Bargaining Agreement RODOLFO NENO, ALBERTO should therefore be, as it is hereby,
Exhibit "A". As reasoned out by the BALATRO, BENJAMIN JUMAMOY, DISMISSED.
court below, such alleged agreement FERMIN DAAROL, JOVENAL SO ORDERED. (Rollo, p. 58)
would have been incorporated in the ENRIQUEZ, OSCAR BASAL,
contract if it existed. The fact that the RAMON ACENA, JAIME BUGTAY, On December 12, 1986, after
union filed a motion to dismiss without and 561 OTHERS, HEREIN considering the appeal memorandum
prejudice, after the Collective REPRESENTED BY KORONADO B. of complainant and the opposition of
Bargaining Contract had been signed, APUZEN, petitioners respondents, the First Division of public
did not necessarily mean that it had vs. respondent NLRC composed of Acting
agreed to withdraw the case in NATIONAL LABOR RELATIONS Presiding Commissioner Franklin
consideration of the wage increases. COMMISSION, HONORABLE Drilon, Commissioner Conrado
The motion itself (Annex "B", Petition FRANKLIN DRILON, HONORABLE Maglaya, Commissioner Rosario D.
for Certiorari) was expressly based on CONRADO B. MAGLAYA, Encarnacion as Members, promulgated
an understanding that the company HONORABLE ROSARIO B. its Resolution, upholding the Labor
would "formulate a schedule of work ENCARNACION, and STANDARD Arbiters' decision. The Resolution's
which shall be in consonance with C. A. (PHILIPPINES) FRUIT dispositive portion reads:
444". All in all, there is substantial CORPORATION, respondents. 'Surely, the customary functions
evidence in the record to support the referred to in the above- quoted
finding of the court below that no such Koronado B. Apuzen and Jose C.
Espinas for petitioners. provision of the agreement includes the
agreement was made. long-standing practice and
It is next contended that in ordering the The Solicitor General for public institutionalized non-compensable
Chief of the Examining Division or his respondent. assembly time. This, in effect, estopped
representative to compute the Dominguez & Paderna Law Offices Co. complainants from pursuing this case.
compensation due, the Industrial Court for private respondent. The Commission cannot ignore these
unduly delegated its judicial functions hard facts, and we are constrained to
and thereby rendered an incomplete uphold the dismissal and closure of the
decision. We do not believe so. PARAS, J.: case.
Computation of the overtime pay
involves a mechanical function, at most. This is a petition for review on certiorari WHEREFORE, let the appeal be, as it
And the report would still have to be of the decision of the National Labor is hereby dismissed, for lack of merit.
Relations Commission dated
Page 11 of 59 Week 3 Cases (Labor Law Review) | amgisidro

SO ORDERED. (Annex "H", Rollo, pp. Contrary to this contention, respondent intended for the interests of the
86-89). avers that the instant complaint is not employer, but ultimately for the
new, the very same claim having been employees to indicate their availability
On January 15, 1987, petitioners filed a
brought against herein respondent by or non-availability for work during every
Motion for Reconsideration which was
the same group of rank and file working day. (Annex "E", Rollo, p. 57).
opposed by private respondent (Annex
employees in the case of Associated
"I", Rollo, pp. 90-91; Annex J Rollo, pp. Accordingly, the issues are reduced to
Labor Union and Standard Fruit
92-96). the sole question as to whether public
Corporation, NLRC Case No. 26-LS-XI-
respondent National Labor Relations
Public respondent NLRC, on January 76 which was filed way back April 27,
Commission committed a grave abuse
30, 1987, issued a resolution denying 1976 when ALU was the bargaining
of discretion in its resolution of
for lack of merit petitioners' motion for agent of respondent's rank and file
December 17, 1986.
reconsideration (Annex "K", Rollo, p. workers. The said case involved a claim
97). for "waiting time", as the complainants The facts on which this decision was
purportedly were required to assemble predicated continue to be the facts of
Hence this petition for review on
at a designated area at least 30 minutes the case in this questioned resolution of
certiorari filed on May 7, 1987.
prior to the start of their scheduled the National Labor Relations
The Court in the resolution of May 4, working hours "to ascertain the work Commission.
1988 gave due course to this petition. force available for the day by means of
It is clear that herein petitioners are
Petitioners assign the following issues: a roll call, for the purpose of assignment
merely reiterating the very same claim
or reassignment of employees to such
which they filed through the ALU and
1) Whether or not the 30-minute activity areas in the plantation where they are
which records show had already long
of the petitioners before the scheduled most needed." (Rollo, pp. 64- 65)
been considered terminated and closed
working time is compensable under the
Noteworthy is the decision of the by this Court in G.R. No. L-48510.
Labor Code.
Minister of Labor, on May 12, 1978 in Therefore, the NLRC can not be faulted
2) Whether or not res judicata applies the aforecited case (Associated Labor for ruling that petitioners' claim is
when the facts obtaining in the prior Union vs. Standard (Phil.) Fruit already barred by res-judicata.
case and in the case at bar are Corporation, NLRC Case No. 26-LS-XI-
Be that as it may, petitioners' claim that
significantly different from each other in 76 where significant findings of facts
there was a change in the factual
that there is merit in the case at bar. and conclusions had already been
scenario which are "substantial
3) Whether or not there is finality in the made on the matter.
changes in the facts" makes
decision of Secretary Ople in view of The Minister of Labor held: respondent firm now liable for the same
the compromise agreement novating it claim they earlier filed against
and the withdrawal of the appeal. The thirty (30)-minute assembly time
respondent which was dismissed. It is
long practiced and institutionalized by
4) Whether or not estoppel and laches thus axiomatic that the non-
mutual consent of the parties under
lie in decisions for the enforcement of compensability of the claim having
Article IV, Section 3, of the Collective
labor standards (Rollo, p. 10). been earlier established, constitute the
Bargaining Agreement cannot be
controlling legal rule or decision
Petitioners contend that the preliminary considered as waiting time within the
between the parties and remains to be
activities as workers of respondents purview of Section 5, Rule I, Book III of
the law of the case making this petition
STANFILCO in the assembly area is the Rules and Regulations
without merit.
compensable as working time (from Implementing the Labor Code. ...
5:30 to 6:00 o'clock in the morning) As aptly observed by the Solicitor
Furthermore, the thirty (30)-minute
since these preliminary activities are General that this petition is "clearly
assembly is a deeply- rooted, routinary
necessarily and primarily for private violative of the familiar principle of res
practice of the employees, and the
respondent's benefit. judicata. There will be no end to this
proceedings attendant thereto are not
controversy if the light of the Minister of
These preliminary activities of the infected with complexities as to deprive
Labor's decision dated May 12, 1979
workers are as follows: the workers the time to attend to other
that had long acquired the character of
personal pursuits. They are not new
(a) First there is the roll call. This is finality and which already resolved that
employees as to require the company
followed by getting their individual work petitioners' thirty (30)-minute assembly
to deliver long briefings regarding their
assignments from the foreman. time is not compensable, the same
respective work assignments. Their
issue can be re-litigated again." (Rollo,
(b) Thereafter, they are individually houses are situated right on the area
p. 183)
required to accomplish the Laborer's where the farm are located, such that
Daily Accomplishment Report during after the roll call, which does not This Court has held:
which they are often made to explain necessarily require the personal
In this connection account should be
about their reported accomplishment presence, they can go back to their taken of the cognate principle that res
the following day. houses to attend to some chores. In
judicata operates to bar not only the
short, they are not subject to the
(c) Then they go to the stockroom to get relitigation in a subsequent action of the
absolute control of the company during
the working materials, tools and issues squarely raised, passed upon
this period, otherwise, their failure to
equipment. and adjudicated in the first suit, but also
report in the assembly time would justify
the ventilation in said subsequent suit of
(d) Lastly, they travel to the field the company to impose disciplinary
any other issue which could have been
bringing with them their tools, measures. The CBA does not contain
raised in the first but was not. The law
equipment and materials. any provision to this effect; the record is
provides that 'the judgment or order is,
also bare of any proof on this point.
All these activities take 30 minutes to with respect to the matter directly
This, therefore, demonstrates the
accomplish (Rollo, Petition, p. 11). adjudged or as to any other matter that
indubitable fact that the thirty (30)-
could have been raised in relation
minute assembly time was not primarily
thereto, conclusive between the parties
Page 12 of 59 Week 3 Cases (Labor Law Review) | amgisidro

and their successors in interest by title National Labor Relations Commission the timely issuance of the invoices that
subsequent to the commencement of (NLRC) declaring it liable for the illegal had resulted in delay in the payment of
the action .. litigating for the same thing dismissal of respondent employee. buyers considering that the payment
and in the same capacity.' So, even if had depended upon the receipt of the
Antecedents
new causes of action are asserted in invoices; that she had been suspended
the second action (e.g. fraud, deceit, Respondent Elizabeth Villa brought from her employment as a
undue machinations in connection with against the petitioner her complaint for consequence; that after serving the
their execution of the convenio de illegal suspension, illegal dismissal, suspension, she had returned to work
transaccion), this would not preclude nonpayment of overtime pay, and and had followed up her application for
the operation of the doctrine of res nonpayment of service incentive leave retirement with Lucina de Guzman, who
judicata. Those issues are also barred, pay in the Regional Arbitration Branch had then informed her that the
even if not passed upon in the first. No. VII of the NLRC in Cebu City. management did not approve the
They could have been, but were not, benefits equivalent to 86% of her salary
In her verified position paper, 2 Villa
there raised. (Vda. de Buncio v. Estate rate applied for, but only Yz month for
averred that she had been employed by
of the late Anita de Leon, 156 SCRA every year of service; and that
petitioner Robina Farms as sales clerk
352 [1987]). disappointed with the outcome, she had
since August 1981; that in the later part
then brought her complaint against the
Moreover, as a rule, the findings of facts of 2001, the petitioner had enticed her
petitioners.3
of quasi-judicial agencies which have to avail herself of the company's special
acquired expertise because their retirement program; that on March 2, Ruling of the Labor Arbiter
jurisdiction is confined to specific 2002, she had received a memorandum
On April 21, 2003, Labor Arbiter Violeta
matters are accorded not only respect from Lily Ngochua requiring her to
Ortiz-Bantug rendered her
but at times even finality if such findings explain her failure to issue invoices for
Decision4 finding that Villa had not been
are supported by substantial evidence unhatched eggs in the months of
dismissed from employment, holding
(Special Events & Central Shipping January to February 2002; that she had
thusly:
Office Workers Union v. San Miguel explained that the invoices were not
Corporation, 122 SCRA 557 [1983]; delivered on time because the delivery Complainant's application, insofar the
Dangan v. NLRC, 127 SCRA 706 receipts were delayed and overlooked; benefits are concerned, was not
[1984]; Phil. Labor Alliance Council v. that despite her explanation, she had approved which means that while her
Bureau of Labor Relations, 75 SCRA been suspended for 10 days from application for retirement was
162 [1977]; Mamerto v. Inciong, 118 March 8, 2012 until March 19, 2002; considered, management was willing to
SCRA 265 (1982]; National Federation that upon reporting back to work, she give her retirement benefits equivalent
of Labor Union (NAFLU) v. Ople, 143 had been advised to cease working only to half-month pay for every year of
SCRA 124 [1986]; Edi-Staff Builders because her application for retirement service and not 86% of her salary for
International, Inc. v. Leogardo, Jr., 152 had already been approved; that she every year of service as mentioned in
SCRA 453 [1987]; Asiaworld Publishing had been subsequently informed that her application. Mrs. De Guzman
House, Inc. v. Ople, 152 SCRA 219 her application had been disapproved, suggested that if she wanted to pursue
[1987]). and had then been advised to tender her supposed retirement despite
her resignation with a request for thereof, she should submit a
The records show that the Labor
financial assistance; that she had resignation letter and include therein a
Arbiters' decision dated October 9,
manifested her intention to return to request for financial assistance. We do
1985 (Annex "E", Petition) pointed out
work but the petitioner had confiscated not find anything illegal or violative in
in detail the basis of his findings and
her gate pass; and that she had since the suggestion made by Mrs. De
conclusions, and no cogent reason can
then been prevented from entering the Guzman. There was no compulsion
be found to disturb these findings nor of
company premises and had been since the choice was left entirely to the
those of the National Labor Relations
replaced by another employee. complainant whether to pursue it or
Commission which affirmed the same.
not. 5
The petitioner admitted that Villa had
PREMISES CONSIDERED, the
been its sales clerk at Robina Farms. It Although ordering Villa's reinstatement,
petition is DISMISSED for lack of merit
stated that on December 12, 2001, she the Labor Arbiter denied her claim for
and the decision of the National Labor
had applied for retirement under the backwages and overtime pay because
Relations Commission is AFFIRMED.
special privilege program offered to its she had not adduced evidence of the
SO ORDERED. employees in Bulacan and Anti polo overtime work actually performed. The
who had served for at least 10 years; Labor Arbiter declared that Villa was
April 18, 2016 that in February 2002, her attention had entitled to service incentive leave pay
G.R. No. 175869 been called by Anita Gabatan of the for the period of the last three years
accounting department to explain her counted from the filing of her complaint
ROBINA FARMS CEBU/UNIVERSAL failure to issue invoices for the because the petitioner did not refute her
ROBINA CORPORATION, Petitioner, unhatched eggs for the month of claim thereon. Thus, the Labor Arbiter
vs. February; that she had explained that disposed as follows:
ELIZABETH VILLA, Respondent. she had been busy; that Gabatan had
WHEREFORE, premises considered,
DECISION referred the matter to Florabeth Zanoria
judgment is hereby rendered ordering
who had in turn relayed the matter to
BERSAMIN, J.: respondents ROBINA FARMS CEBU
Ngochua; and that the latter had then
(a Division of UNIVERSAL ROBINA
The employer appeals the decision given Villa the chance to explain, which
CORPORATION) and LILY NGOCHUA
promulgated on September 27, she did.
to REINSTATE complainant to her
2006, 1 whereby the Court of Appeals The petitioner added that after the former position without loss of seniority
(CA) dismissed its petition administrative hearing Villa was found rights and privileges within ten (10)
for certiorari and affirmed with to have violated the company rule on days from receipt of this decision but
modification the adverse decision of the
Page 13 of 59 Week 3 Cases (Labor Law Review) | amgisidro

without payment of backwages. signified her intention to return to work, dismissing the petition
Respondents are also ordered to pay the petitioner had prevented her from for certiorari, 12decreeing as follows:
complainant SEVEN THOUSAND ONE doing so by confiscating her gate pass
WHEREFORE, premises considered,
HUNDRED NINETY FOUR PESOS and informing her that she had already
the instant petition is hereby
(P7, 194.00) as service incentive leave been replaced by another employee;
ordered DISMISSED for lack of merit.
pay benefits. and that the petitioner neither disputed
The assailed decision
her allegations thereon, nor adduced
The other claims are dismissed for lack is AFFIRMED with MODIFICATION, in
evidence to controvert the same.9
of merit. that petitioner Lily Ngochua should not
After the denial of its motion for be held liable with petitioner
SO ORDERED.6
reconsideration, 10 the petitioner filed a corporation. The other aspects of the
The parties respectively appealed to petition for certiorari in the CA. assailed decision remains.
the NLRC. Consequently, the prayer for a
Decision of the CA
Judgment of the NLRC temporary restraining order and/or
The petitioner alleged in its petition preliminary injunction is NOTED.
On February 23, 2005, the NLRC for certiorari the following jurisdictional
SO ORDERED. 13
rendered its judgment dismissing the errors of the NLRC, to wit:
appeal by the petitioner but granting The CA treated the petitioner's appeal
I
that of Villa,7 to wit: as an unsigned pleading because the
PUBLIC RESPONDENT NLRC petitioner did not present proof showing
WHEREFORE, premises considered,
COMMITTED GRAVE ABUSE OF that Florabeth P. Zanoria, its
the appeal of respondents is
DISCRETION AMOUNTING TO LACK Administrative Officer and Chief
hereby DISMISSED for non-perfection
OF OR IN EXCESS OF Accountant who had signed the
while the appeal of complainant is
JURISDICTION WHEN IT DISMISSED verification, had been authorized to sign
hereby GRANTED. The decision of the
PETITIONERS APPEAL and file the appeal. It opined that the
Labor Arbiter is REVERSED and SET
MEMORANDUM ON A MERE belated submission of the secretary's
ASIDE and a new
TECHNICALITY AND NOT RESOLVE certificate showing the authority of
one ENTERED declaring complainant
IT ON THE MERITS. Bienvenido S. Bautista to represent the
to have been illegally dismissed.
petitioner, and the special power of
Consequently, respondents arc hereby II.
attorney executed by Bautista to
directed to immediately reinstate
PUBLIC RESPONDENT NLRC authorize Zanoria to represent the
complainant to her former position
COMMITTED GRAVE ABUSE OF petitioner did not cure the defect. It
without loss of seniority rights and other
DISCRETION AMOUNTING TO LACK upheld the finding of the NLRC that the
privileges within ten (10) days from
OF OR IN EXCESS OF petitioner had illegally dismissed Villa. It
receipt of this decision and to pay
JURISDICTION WHEN IT DID NOT deemed the advice by Ngochua and de
complainant the following sums, to wit:
DISMISS PRIVATE RESPONDENT'S Guzman for Villa to resign and to
1. Backwages P119,900.00 MEMORANDUM ON APPEAL EVEN request instead for financial assistance
THOUGH IT LACKED THE PROPER was a strong and unequivocal
2. SILP P 7,194.00 VERIFICATION AND PROCEEDED indication of the petitioner's desire to
TO RESOLVE HER APPEAL ON THE sever the employer-employee
3. Overtime P 3,445.00 MERITS. relationship with Villa.
Pay
III. The CA later denied the motion for
PUBLIC RESPONDENT NLRC reconsideration. 14
Total P130,539.00
COMMITTED GRAVE ABUSE OF Issues
4. Attorney's 13,053.90 DISCRETION AMOUNTING TO LACK
fees (10%) Hence, this appeal in which the
OF OR IN EXCESS OF
petitioner submits that:
JURISDICTION WHEN IT RULED
Grand Total P143,592.91 THAT THERE WAS ILLEGAL I
SO ORDERED.8 DISMISSAL AND THAT PRIVATE
THE HONORABLE COURT OF
RESPONDENT BE IMMEDIATELY
According to the NLRC, the petitioner's APPEALS GRIEVOUSLY ERRED
REINSTATED WITHOUT LOSS OF
appeal was fatally defective and was WHEN IT DID NOT RULE THAT
SENIORITY RIGHTS.
being dismissed outright because it THERE WAS NO VERIFICATION
lacked the proper verification and IV. ATTACHED TO RESPONDENT
certificate of non-forum shopping. The VILLA'S NOTICE OF APPEAL AND
PUBLIC RESPONDENT NLRC
NLRC held the petitioner liable for the MEMORANDUM ON APPEAL DATED
COMMITTED GRAVE ABUSE OF
illegal dismissal of Villa, observing that MAY 29, 2003 AND THAT IT WAS AN
DISCRETION AMOUNTING TO LACK
because Villa's retirement application UNSIGNED PLEADING AND
OF OR IN EXCESS OF
had been subject to the approval of the WITHOUT LEGAL EFFECT,
JURISDICTION WHEN IT DIRECTED
management, her act of applying MOREOVER, IT COMMITTED
PETITIONERS INCLUDING
therefor did not indicate her voluntary UNFAIR TREATMENT
PETITIONER LILY NGOCHUA TO
intention to sever her employment PAY PRIVATE RESPONDENT II
relationship but only her opting to retire BACKWAGES, SERVICE INCENTIVE
by virtue of her having qualified under THE HONORABLE COURT OF
LEAVE PAY, OVERTIME PAY AND
the plan; that upon informing her about APPEALS GRIEVOUSLY ERRED
ATTORNEY'S FEES. 11
the denial of her application, the WHEN IT DID NOT RULE THAT THE
petitioner had advised her to tender her On September 27, 2006, the CA NATIONAL LABOR RELATIONS
resignation and to request for financial promulgated its assailed decision COMMISSION FOURTH DIVISION
assistance; that although she had HAD NO JURISDICTION TO
Page 14 of 59 Week 3 Cases (Labor Law Review) | amgisidro

REVERESE AND SET ASIDE THE was mandatory, and the failure to do so resignation letter. The letter of petitioner
DECISION OF THE LABOR ARBITER could not be cured by a later Lily Ngochua dated April 11, 2002 to
DA TED APRIL 21, 2003 WHICH HAD submission. 19 The non-submission of private respondent which reads:
ALREA[D]Y BECOME FINAL AND the certification, being a ground for
"As explained by Lucy de Guzman xxx
IMMUTABLE AS r AR AS dismissal, was fatal to the petition.
your request for special retirement with
RESPONDENT IS CONCERNED There is no question that the non-
financial assistance of 86%/year of
compliance with the requirement for the
III service has not been approved.
certification, or a defect in the
Because this offer was for employees
THE HONORABLE COURT OF certification, would not be cured by the
working in operations department and
APPEALS GRIEVOUSLY ERRED subsequent submission or the
not in Adm. & Sales.
WHEN IT COMMITTED correction of the certification, except in
MISAPPREHENSION OF THE FACTS cases of substantial compliance or "However, as per Manila Office, you
AND ISSUED ITS DECISION AND upon compelling can be given financial assistance of V2
RESOLUTION CONTRARY TO THE reasons.20 Accordingly, the dismissal of per year of service if you tender letter of
EVIDENCE ON RECORD AND the petitioner's appeal cannot be resignation with request for financial
FINDINGS OF THE LABOR reversed or undone. assistance."
ARBITER. 15
The petitioner next submits that the CA shows that petitioner Lily Ngochua has
Ruling of the Court erred in holding that Villa had been also advised private respondent to the
illegally dismissed; that it had no same. These acts are strong indication
The appeal lacks merit.
intention to terminate her; that de that petitioners wanted to severe [sic]
The petitioner prays that Villa's appeal Guzman had merely suggested to her the employer-employee relationship
should be treated as an unsigned that she should be filing the letter of between them and that of private
pleading because she had resignation with the request for financial respondent. This is buttressed by the
accompanied her appeal with the same assistance because the management fact that when private respondent
verification attached to her position had disapproved her application for the signified her intention to return back to
paper. 86% salary rate as basis for her work after learning of the disapproval of
retirement benefits; that it was Villa who her application, she was prevented to
The petitioner cannot be sustained. The
had the intention to sever the employer- enter the petitioner's premises by
NLRC justifiably gave due course to
Villa's appeal. employee relationship because she confiscating her ID and informing her
had kept on following up her application that a new employee has already
Section 4(a), Rule VI of the Amended for retirement; that she had prematurely replaced her.
NLRC Rules of Procedure requires an filed the complaint for illegal dismissal;
It should be noted that when private
appeal to be verified by the appellant that she had voluntarily opted not to
respondent averred this statement in
herself. The verification is a mere report to her work; and that she had not
her position paper submitted before the
formal requirement intended to secure presented proof showing that it had
Labor Arbiter petitioners did not refute
and to give assurance that the matters prevented her from working and
the same. Neither did they contest this
alleged in the pleading are true and entering its premises.21
allegation in their supposed Appeal
correct. The requirement is complied
The petitioner's submissions are bereft Memorandum nor in their Motion for
with when one who has the ample
of merit. Reconsideration of the assailed
knowledge to swear to the truth of the
decision of public respondent. Basic is
allegations in the complaint or petition We note that the CA and the NLRC
the rule that matters not controverted
signs the verification, or when the agreed on their finding that the
are deemed admitted. To contest this
matters contained in the petition have petitioner did not admit Villa back to
allegation at this point of proceeding is
been alleged in good faith or are true work after the completion of her 10-day
not allowed for it is a settled rule that
and correct. 16 Being a mere formal suspension. In that regard, the CA
matters, theories or arguments not
requirement, the courts may even observed:
brought out in the original proceedings
simply order the correction of
It is undeniable that private respondent cannot be considered on review or
improperly verified pleadings, or act on
was suspended for ten (10) days appeal where they arc raised for the
the same upon waiving the strict
beginning March 8, 2002 to March 19, first time. To consider the alleged facts
compliance with the rules of
2002. Ordinarily, after an employee and arguments raised belatedly would
procedure. 17 It is the essence of
the NLRC Rules of Procedure to [has] served her suspension, she amount to trampling on the basic
should be admitted back to work and to principles of fair play, justice and due
extend to every party-litigant the
continue to receive compensation for process.22
amplest opportunity for the proper and
her services. In the case at bar, it is
just determination of his cause, free Neither did Villa's application for early
clear that private respondent was
from the constraints of retirement manifest her intention to
not admitted immediately after her
technicalities. 18 Accordingly, the sever the employer-employee
suspension. Records show that when
substantial compliance with the relationship. Although she applied for
private respondent reported back after
procedural rules is appreciated in favor early retirement, she did so upon the
her suspension, she was advised by
of Villa. belief that she would receive a higher
Lucy de Guzman not to report back
benefit based on the petitioner's offer.
We cannot rule in the same way for the anymore as her application was
As such, her consent to be retired could
petitioner. For one, it belatedly approved, which was latter [sic] on
not be fairly deemed to have been
submitted proof of Zanoria' s authority disapproved. It is at this point that, said
knowingly and freely given.
to verify the pleading for the petitioner. Lucy de Guzman had advised private
Also, it did not submit the certification of respondent to tender a resignation Retirement is the result of a bilateral act
non-forum shopping at the time of the letter with request for financial of both the employer and the employee
filing of the appeal. The filing of the assistance. Not only Lucy De Guzman based on their voluntary agreement
certification with the initiatory pleading has advised her to tender her that upon reaching a certain age, the
Page 15 of 59 Week 3 Cases (Labor Law Review) | amgisidro

employee agrees to sever his rests on the employee because the decision by the Labor Arbiter or during
employment.23 The difficulty in the case benefit is not incurred in the normal appeal. Such a practice of belated
of Villa arises from determining whether course of business.32 Failure to prove presentation cannot be tolerated
the retirement was voluntary or such actual performance transgresses because it defeats the speedy
involuntary. The line between the two is the principles of fair play and equity. administration of justice in matters
thin but it is one that the Court has concerning the poor workers. 37
And, secondly, the NLRC's reliance on
drawn. On one hand, voluntary
the daily time records (DTRs) showing WHEREFORE, the Court DENIES the
retirement cuts the employment ties
that Villa had stayed in the company's petition for review on certiorari for lack
leaving no residual employer liability; on
premises beyond eight hours was of merit; AFFIRMS the decision
the other, involuntary retirement
misplaced. The DTRs did not promulgated on September 27, 2006 by
amounts to a discharge, rendering the
substantially prove the actual the Court of Appeals, with
employer liable for termination without
performance of overtime work. The the MODIFICATION that the award of
cause. The employee's intent is
petitioner correctly points out that any overtime pay in favor of respondent
decisive. In determining such intent, the
employee could render overtime work Elizabeth Villa
relevant parameters to consider are the
only when there was a prior is DELETED; and ORDERS the
fairness of the process governing the
authorization therefor by the petitioner to pay the costs of suit.
retirement decision, the payment of
management.33 Without the prior
stipulated benefits, and the absence of SO ORDERED.
authorization, therefore, Villa could not
badges of intimidation or coercion.24
validly claim having performed work G.R. No. 173648 January 16,
In case of early retirement programs, beyond the normal hours of work. 2012
the offer of benefits must be certain Moreover, Section 4(c), Rule I, Book III
while the acceptance to be retired of the Omnibus Rules Implementing the ABDULJUAHID R.
should be absolute.25 The acceptance Labor Code relevantly states as PIGCAULAN,* Petitioner,
by the employees contemplated herein follows: vs.
must be explicit, voluntary, free and SECURITY and CREDIT
Section 4. Principles in determining NVESTIGATION, INC. and/or RENE
uncompelled.26 In Jaculbe v. Silliman
hours worked. The following general AMBY REYES, Respondents.
University, 27 we elucidated that:
principles shall govern in determining
[A]n employer is free to impose a whether the time spent by an employee DECISION
retirement age less than 65 for as long is considered hours worked for DEL CASTILLO, J.:
as it has the employees' purposes of this Rule:
consent.1wphi1 Stated It is not for an employee to prove non-
(a) x x x. payment of benefits to which he is
conversely, employees are free to
accept the employer's offer to lower (b) x x x. entitled by law. Rather, it is on the
the retirement age if they feel they employer that the burden of proving
(c) If the work performed was payment of these claims rests.
can get a better deal with the
necessary, or it benefited the employer,
retirement plan presented by the This Petition for Review
or the employee could not abandon his
employer. Thus, having terminated on Certiorari1 assails the February 24,
work at the end of his normal working
petitioner solely on the basis of a 2006 Decision2 of the Court of Appeals
hours because he had no
provision of a retirement plan which (CA) in CA-G.R. SP No. 85515, which
replacement, all time spent for such
was not freely assented to by her, granted the petition for certiorari filed
work shall be considered as hours
respondent was guilty of illegal therewith, set aside the March 23,
worked, if the work was with the
dismissal.28 (bold emphasis supplied) 20043 and June 14, 20044 Resolutions
knowledge of his employer or
Under the circumstances, the CA did immediate supervisor. (bold of the National Labor Relations
not err in declaring the petitioner guilty emphasis supplied) Commission (NLRC), and dismissed
of illegal dismissal for violating Article the complaint filed by Oliver R. Canoy
(d) x x x. (Canoy) and petitioner Abduljuahid R.
28229 of the Labor Code and the twin
notice rule.30 We uphold the grant of service Pigcaulan (Pigcaulan) against
incentive leave pay. respondent Security and Credit
The petitioner posits that the CA Investigation, Inc. (SCII) and its
erroneously affirmed the giving of Although the grant of vacation or sick General Manager, respondent Rene
overtime pay and service incentive leave with pay of at least five days could Amby Reyes. Likewise assailed is the
leave pay to Villa; that she did not be credited as compliance with the duty June 28, 2006 Resolution5 denying
adduce proof of her having rendered to pay service incentive leave,34 the Canoys and Pigcaulans Motion for
actual ove1iime work; that she had not employer is still obliged to prove that it Reconsideration.6
been authorized to render overtime fully paid the accrued service incentive
work; and that her availment of vacation leave pay to the employee. Factual Antecedents
and sick leaves that had been paid The Labor Arbiter originally awarded Canoy and Pigcaulan were both
precluded her claiming the service the service incentive leave pay because employed by SCII as security guards
incentive leave pay. the petitioner did not present proof and were assigned to SCIIs different
We partly agree with the petitioner's showing that Villa had been justly clients. Subsequently, however, Canoy
position. paid.35 The petitioner submitted the and Pigcaulan filed with the Labor
affidavits of Zanoria explaining the Arbiter separate complaints7 for
Firstly, entitlement to overtime pay must underpayment of salaries and non-
payment of service incentive leave after
first be established by proof that the payment of overtime, holiday, rest day,
the Labor Arbiter had rendered her
overtime work was actually performed service incentive leave and 13th month
decision.36 But that was not enough, for
before the employee may properly pays. These complaints were later on
evidence should be presented in the
claim the benefit.31 The burden of consolidated as they involved the same
proceedings before the Labor Arbiter,
proving entitlement to overtime pay causes of action.
not after the rendition of the adverse
Page 16 of 59 Week 3 Cases (Labor Law Review) | amgisidro

Canoy and Pigcaulan, in support of Canoy and P2,449.71 for Pigcaulan for Canoy and Pigcaulan on the following
their claim, submitted their respective service incentive leave pay and; [3]) the rationale:
daily time records reflecting the number sum of P1,481.85 for Canoy
First. The Labor Arbiter disregarded the
of hours served and their wages for the and P1,065.35 for Pigcaulan as
NLRC rule that, in cases involving
same. They likewise presented proportionate 13th month pay for the
money awards and at all events, as far
itemized lists of their claims for the year 2000. The rest of the claims are
as practicable, the decision shall
corresponding periods served. dismissed for lack of sufficient basis to
embody the detailed and full amount
make an award.
Respondents, however, maintained awarded.
that Canoy and Pigcaulan were paid SO ORDERED.11
Second. The Labor Arbiter found that
their just salaries and other benefits
Ruling of the National Labor the payrolls submitted by SCII have no
under the law; that the salaries they
Relations Commission probative value for being unsigned by
received were above the statutory
Canoy, when, in fact, said payrolls,
minimum wage and the rates provided Respondents appealed to the NLRC.
particularly the payrolls from 1998 to
by the Philippine Association of They alleged that there was no basis
1999 indicate the individual signatures
Detective and Protective Agency
for the awards made because aside of Canoy.
Operators (PADPAO) for security
from the self-serving itemized
guards; that their holiday pay were Third. The Labor Arbiter did not state in
computations, no representative daily
already included in the computation of his decision the substance of the
time record was presented by Canoy
their monthly salaries; that they were evidence adduced by Pigcaulan and
and Pigcaulan. On the contrary,
paid additional premium of 30% in Canoy as well as the laws or
respondents asserted that the payroll
addition to their basic salary whenever jurisprudence that would show that the
listings they submitted should have
they were required to work on Sundays two are indeed entitled to the salary
been given more probative value. To
and 200% of their salary for work done differential and incentive leave pays.
strengthen their cause, they attached to
on holidays; and, that Canoy and
their Memorandum on Appeal Fourth. The Labor Arbiter held Reyes
Pigcaulan were paid the corresponding
payrolls12 bearing the individual liable together with SCII for the
13th month pay for the years 1998 and
signatures of Canoy and Pigcaulan to payment of the claimed salaries and
1999. In support thereof, copies of
show that the latter have received their benefits despite the absence of proof
payroll listings8 and lists of employees
salaries, as well as copies of transmittal that Reyes deliberately or maliciously
who received their 13th month pay for
letters13 to the bank to show that the designed to evade SCIIs alleged
the periods December 1997 to
salaries reflected in the payrolls were financial obligation; hence the Labor
November 1998 and December 1998 to
directly deposited to the ATM accounts Arbiter ignored that SCII has a
November 19999 were presented. In
of SCIIs employees. corporate personality separate and
addition, respondents contended that
distinct from Reyes. To justify solidary
Canoys and Pigcaulans monetary The NLRC, however, in a
liability, there must be an allegation and
claims should only be limited to the past Resolution14 dated March 23, 2004,
showing that the officers of the
three years of employment pursuant to dismissed the appeal and held that the
corporation deliberately or maliciously
the rule on prescription of claims. evidence show underpayment of
designed to evade the financial
salaries as well as non-payment of
Ruling of the Labor Arbiter obligation of the corporation.18
service incentive leave benefit.
Giving credence to the itemized Accordingly, the Labor Arbiters Canoy and Pigcaulan filed a Motion for
computations and representative daily Decision was sustained. The motion for Reconsideration, but same was denied
time records submitted by Canoy and reconsideration thereto was likewise by the CA in a Resolution19 dated June
Pigcaulan, Labor Arbiter Manuel P. dismissed by the NLRC in a 28, 2006.
Asuncion awarded them their monetary Resolution15 dated June 14, 2004.
Hence, the present Petition for Review
claims in his Decision10 dated June 6, Ruling of the Court of Appeals on Certiorari.
2002. The Labor Arbiter held that the
payroll listings presented by the In respondents petition Issues
respondents did not prove that Canoy for certiorari with prayer for the
The petition ascribes upon the CA the
and Pigcaulan were duly paid as same issuance of a temporary restraining
following errors:
were not signed by the latter or by any order and preliminary
SCII officer. The 13th month payroll injunction16 before the CA, they I. The Honorable Court of Appeals
was, however, acknowledged as attributed grave abuse of discretion on erred when it dismissed the complaint
sufficient proof of payment, for it bears the part of the NLRC in finding that on mere alleged failure of the Labor
Canoys and Pigcaulans signatures. Canoy and Pigcaulan are entitled to Arbiter and the NLRC to observe the
Thus, without indicating any detailed salary differentials, service incentive prescribed form of decision, instead of
computation of the judgment award, the leave pay and proportionate 13th month remanding the case for reformation of
Labor Arbiter ordered the payment of pay and in arriving at amounts without the decision to include the desired
overtime pay, holiday pay, service providing sufficient bases therefor. detailed computation.
incentive leave pay and proportionate The CA, in its Decision17 dated II. The Honorable Court of Appeals
13th month pay for the year 2000 in February 24, 2006, set aside the rulings erred when it [made] complainants
favor of Canoy and Pigcaulan, viz: of suffer the consequences of the alleged
WHEREFORE, the respondents are non-observance by the Labor Arbiter
both the Labor Arbiter and the NLRC
hereby ordered to pay the and NLRC of the prescribed forms of
after noting that there were no factual
complainants: 1) their salary decisions considering that they have
and legal bases mentioned in the
differentials in the amount complied with all needful acts required
questioned rulings to support the
of P166,849.60 for Oliver Canoy to support their claims.
conclusions made. Consequently, it
and P121,765.44 for Abduljuahid dismissed all the monetary claims of III. The Honorable Court of Appeals
Pigcaulan; 2) the sum of P3,075.20 for erred when it dismissed the complaint
Page 17 of 59 Week 3 Cases (Labor Law Review) | amgisidro

allegedly due to absence of legal and He likewise explains in said affidavit or at least incorporate in his affidavit a
factual [bases] despite attendance of that his absence during the preparation certificate of non-forum shopping.
substantial evidence in the records.20 and filing of the petition was caused by
The filing of a certificate of non-forum
severe financial distress and his failure
It is well to note that while the caption of shopping is mandatory so much so that
to inform anyone of his whereabouts.
the petition reflects both the names of non-compliance could only be tolerated
Canoy and Pigcaulan as petitioners, it Our Ruling by special circumstances and
appears from its body that it is being compelling reasons.26 This Court has
The assailed CA Decision is considered
filed solely by Pigcaulan. In fact, the held that when there are several
final as to Canoy.
Verification and Certification of Non- petitioners, all of them must execute
Forum Shopping was executed by We have examined the petition and find and sign the certification against forum
Pigcaulan alone. that same was filed by Pigcaulan solely shopping; otherwise, those who did not
on his own behalf. This is very clear sign will be dropped as parties to the
In his Petition, Pigcaulan submits that
from the petitions prefatory which is case.27 True, we held that in some
the Labor Arbiter and the NLRC are not
phrased as follows: cases, execution by only one of the
strictly bound by the rules. And even so,
COMES NOW Petitioner Abduljuahid petitioners on behalf of the other
the rules do not mandate that a detailed
R. Pigcaulan, by counsel, unto this petitioners constitutes substantial
computation of how the amount
compliance with the rule on the filing of
awarded was arrived at should be Honorable Court x x x. (Emphasis
a certificate of non-forum shopping on
embodied in the decision. Instead, a supplied.)
the ground of common interest or
statement of the nature or a description
Also, under the heading "Parties", only common cause of action or
of the amount awarded and the specific
Pigcaulan is mentioned as petitioner defense.28We, however, find that
figure of the same will suffice. Besides,
and consistent with this, the body of the common interest is not present in the
his and Canoys claims were supported
petition refers only to a "petitioner" and instant petition. To recall, Canoys and
by substantial evidence in the form of
never in its plural form "petitioners". Pigcaulans complaints were
the handwritten detailed computations
Aside from the fact that the Verification consolidated because they both sought
which the Labor Arbiter termed as
and Certification of Non-Forum the same reliefs against the same
"representative daily time records,"
Shopping attached to the petition was respondents. This does not, however,
showing that they were not properly
executed by Pigcaulan alone, it was mean that they share a common
compensated for work rendered. Thus,
plainly and particularly indicated under interest or defense. The evidence
the CA should have remanded the case
the name of the lawyer who prepared required to substantiate their claims
instead of outrightly dismissing it.
the same, Atty. Josefel P. Grageda, that may not be the same. A particular
In their Comment,21 respondents point he is the "Counsel for Petitioner evidence which could sustain Canoys
out that since it was only Pigcaulan who Adbuljuahid Pigcaulan" only. In view of action may not effectively serve as
filed the petition, the CA Decision has these, there is therefore, no doubt, that sufficient to support Pigcaulans claim.
already become final and binding upon the petition was brought only on behalf
Besides, assuming that the petition is
Canoy. As to Pigcaulans arguments, of Pigcaulan. Since no appeal from the
also filed on his behalf, Canoy failed to
respondents submit that they were able CA Decision was brought by Canoy,
show any reasonable cause for his
to present sufficient evidence to prove same has already become final and
failure to join Pigcaulan to personally
payment of just salaries and benefits, executory as to him.
sign the Certification of Non-Forum
which bits of evidence were
Canoy cannot now simply incorporate Shopping. It is his duty, as a litigant, to
unfortunately ignored by the Labor
in his affidavit a verification of the be prudent in pursuing his claims
Arbiter and the NLRC. Fittingly, the CA
contents and allegations of the petition against SCII, especially so, if he was
reconsidered these pieces of evidence
as he is not one of the petitioners indeed suffering from financial distress.
and properly appreciated them. Hence,
therein. Suffice it to state that it would However, Canoy failed to advance any
it was correct in dismissing the claims
have been different had the said justifiable reason why he did not inform
for failure of Canoy and Pigcaulan to
petition been filed in behalf of both anyone of his whereabouts when he
discharge their burden to disprove
Canoy and Pigcaulan. In such a case, knows that he has a pending case
payment.
subsequent submission of a verification against his former employer. Sadly, his
Pigcaulan, this time joined by Canoy, may be allowed as non-compliance lack of prudence and diligence cannot
asserts in his Reply22 that his filing of therewith or a defect therein does not merit the courts consideration or
the present petition redounds likewise necessarily render the pleading, or the sympathy. It must be emphasized at
to Canoys benefit since their petition as in this case, fatally this point that procedural rules should
complaints were consolidated below. defective.24 "The court may order its not be ignored simply because their
As such, they maintain that any kind of submission or correction, or act on the non-observance may result in prejudice
disposition made in favor or against pleading if the attending circumstances to a partys substantial rights. The
either of them would inevitably apply to are such that strict compliance with the Rules of Court should be followed
the other. Hence, the institution of the Rule may be dispensed with in order except only for the most persuasive of
petition solely by Pigcaulan does not that the ends of justice may be served reasons.29
render the assailed Decision final as to thereby. Further, a verification is
Having declared the present petition as
Canoy. Nonetheless, in said reply they deemed substantially complied with
solely filed by Pigcaulan, this Court
appended Canoys affidavit23 where he when one who has ample knowledge to
shall consider the subsequent
verified under oath the contents and swear to the truth of the allegations in
pleadings, although apparently filed
allegations of the petition filed by the complaint or petition signs the
under his and Canoys name, as solely
Pigcaulan and also attested to the verification, and when matters alleged
filed by the former.
authenticity of its annexes. Canoy, in the petition have been made in good
however, failed to certify that he had not faith or are true and There was no substantial evidence to
filed any action or claim in another court correct."25 However, even if it were so, support the grant of overtime pay.
or tribunal involving the same issues. we note that Canoy still failed to submit
Page 18 of 59 Week 3 Cases (Labor Law Review) | amgisidro

The Labor Arbiter ordered one year of service shall be entitled to a employee relationship shall be filed
reimbursement of overtime pay, holiday yearly service incentive of five days with within three years from the time the
pay, service incentive leave pay and pay. cause of action accrued,34 Pigcaulan
13th month pay for the year 2000 in can only demand the amounts due him
xxxx
favor of Canoy and Pigcaulan. The for the period within three years
Labor Arbiter relied heavily on the Under the Labor Code, Pigcaulan is preceding the filing of the complaint in
itemized computations they submitted entitled to his regular rate on holidays 2000. Furthermore, since the records
which he considered as representative even if he does not work.30 Likewise, are insufficient to use as bases to
daily time records to substantiate the express provision of the law entitles him properly compute Pigcaulans claims,
award of salary differentials. The NLRC to service incentive leave benefit for he the case should be remanded to the
then sustained the award on the ground rendered service for more than a year Labor Arbiter for a detailed computation
that there was substantial evidence of already. Furthermore, under of the monetary benefits due to him.
underpayment of salaries and benefits. Presidential Decree No. 851,31 he
WHEREFORE, the petition
should be paid his 13th month pay. As
We find that both the Labor Arbiter and is GRANTED. The Decision dated
employer, SCII has the burden of
the NLRC erred in this regard. The February 24, 2006 and Resolution
proving that it has paid these benefits to
handwritten itemized computations are dated June 28, 2006 of the Court of
its employees.32
self-serving, unreliable and Appeals in CA-G.R. SP No. 85515
unsubstantial evidence to sustain the SCII presented payroll listings and are REVERSED and SET ASIDE.
grant of salary differentials, particularly transmittal letters to the bank to show Petitioner Abduljuahid R. Pigcaulan is
overtime pay. Unsigned and that Canoy and Pigcaulan received hereby declared entitled to holiday pay
unauthenticated as they are, there is no their salaries as well as benefits which and service incentive leave pay for the
way of verifying the truth of the it claimed are already integrated in the years 1997-2000 and proportionate
handwritten entries stated therein. employees monthly salaries. However, 13th month pay for the year 2000.
Written only in pieces of paper and the documents presented do not prove
The case is REMANDED to the Labor
solely prepared by Canoy and SCIIs allegation. SCII failed to show
Arbiter for further proceedings to
Pigcaulan, these representative daily any other concrete proof by means of
determine the exact amount and to
time records, as termed by the Labor records, pertinent files or similar
make a detailed computation of the
Arbiter, can hardly be considered as documents reflecting that the specific
monetary benefits due Abduljuahid R.
competent evidence to be used as claims have been paid. With respect to
Pigcaulan which Security and Credit
basis to prove that the two were 13th month pay, SCII presented proof
Investigation Inc. should pay without
underpaid of their salaries. We find that this benefit was paid but only for
delay.
nothing in the records which could the years 1998 and 1999. To repeat,
substantially support Pigcaulans the burden of proving payment of these SO ORDERED.
contention that he had rendered service monetary claims rests on SCII, being
the employer. It is a rule that one who G.R. No. 176419 November
beyond eight hours to entitle him to
pleads payment has the burden of 27, 2013
overtime pay and during Sundays to
entitle him to restday pay. Hence, in the proving it. "Even when the plaintiff GMA NETWORK, INC., Petitioner,
absence of any concrete proof that alleges non-payment, still the general vs.
additional service beyond the normal rule is that the burden rests on the CARLOS P. PABRIGA, GEOFFREY
working hours and days had indeed defendant to prove payment, rather F. ARIAS, KIRBY N. CAMPO,
been rendered, we cannot affirm the than on the plaintiff to prove non- ARNOLD L. LAGAHIT, and
grant of overtime pay to Pigcaulan. payment."33 Since SCII failed to provide ARMANDO A.
convincing proof that it has already CATUBIG, Respondents.
Pigcaulan is entitled to holiday pay,
settled the claims, Pigcaulan should be
service incentive leave pay and DECISION
paid his holiday pay, service incentive
proportionate 13th month pay for year
leave benefits and proportionate 13th LEONARDO-DE CASTRO, J.:
2000.
month pay for the year 2000.
However, with respect to the award for This is a Petition for Review on
The CA erred in dismissing the claims Certiorari filed by petitioner GMA
holiday pay, service incentive leave
instead of remanding the case to the Network Inc. assailing the Decision1 of
pay and 13th month pay, we affirm and Labor Arbiter for a detailed computation the Court of Appeals dated September
rule that Pigcaulan is entitled to these of the judgment award. 8, 2006 and the subsequent
benefits. Resolution2 dated January 22 2007
Indeed, the Labor Arbiter failed to
Article 94 of the Labor Code provides provide sufficient basis for the monetary denying reconsideration in CA-G.R. SP
that: awards granted.lawphi1 Such failure, No. 73652.
however, should not result in prejudice The Court of Appeals summarized the
ART. 94. RIGHT TO HOLIDAY PAY.
to the substantial rights of the facts of the case as follows:
(a) Every worker shall be paid his
party.1avvphi1 While we disallow the
regular daily wage during regular On July 19 1999 due to the miserable
grant of overtime pay and restday pay
holidays, except in retail and service working conditions private respondents
in favor of Pigcaulan, he is nevertheless
establishments regularly employing were forced to file a complaint against
entitled, as a matter of right, to his
less than ten (10) workers; petitioner before the National Labor
holiday pay, service incentive leave pay
xxxx and 13th month pay for year 2000. Relations Commission Regional
Hence, the CA is not correct in Arbitration Branch No. VII Cebu City
While Article 95 of the Labor Code assailing their respective employment
dismissing Pigcaulans claims in its
provides: circumstances as follows:
entirety.
ART. 95. RIGHT TO SERVICE
Consistent with the rule that all money
INCENTIVE LEAVE. (a) Every
claims arising from an employer-
employee who has rendered at least
Page 19 of 59 Week 3 Cases (Labor Law Review) | amgisidro

NAME DATE POSITION requesting that they be recalled back to 10%


work.
HIRED Attorneys 2,882.61
On 23 August 1999, a reply letter from fees
Carlos 2 May Television Mr. Bienvenido Bustria, petitioners
Pabriga 1997 Technicians head of Personnel and Labor Relations GRAND
Division, admitted the non-payment of P31,708.75
TOTAL
Geoffrey 2 May Television benefits but did not mention the request
Arias 1997 Technicians of private respondents to be allowed to All other claims are, hereby, dismissed
return to work. for failure to substantiate the same.4
Kirby 1 Dec. Television On 15 September 1999, private Respondents appealed to the National
Campo 1993 Technicians respondents sent another letter to Mr. Labor Relations Commission (NLRC).
Bustria reiterating their request to work The NLRC reversed the Decision of the
Arnold 11 Feb. Television but the same was totally ignored. On 8 Labor Arbiter, and held thus:
Laganit 1996 Technicians October 1999, private respondents filed
an amended complaint raising the WHEREFORE, we make the following
following additional issues: 1) Unfair findings:
Armand 2 March Television
Catubig 1997 Technicians Labor Practice; 2) Illegal dismissal; and a) All complainants are regular
3) Damages and Attorneys fees. employees with respect to the particular
Private respondents were engaged by On 23 September 1999, a mandatory activity to which they were assigned,
petitioner to perform the following conference was set to amicably settle until it ceased to exist. As such, they are
activities, to wit: the dispute between the parties, entitled to payment of separation pay
however, the same proved to be futile. computed at one (1) month salary for
1) Manning of Technical Operations
As a result, both of them were directed every year of service;
Center:
to file their respective position papers. b) They are not entitled to overtime pay
(a) Responsible for the airing of local
On 10 November 1999, private and holiday pay; and
commercials; and
respondents filed their position paper c) They are entitled to 13th month pay,
(b) Logging/monitoring of national and on 2 March 2000, they received a night shift differential and service
commercials (satellite) copy of petitioners position paper. The incentive leave pay.
2) Acting as Transmitter/VTR men: following day, the Labor Arbiter issued
an order considering the case For purposes of accurate computation,
(a) Prepare tapes for local airing; submitted for decision.3 the entire records are REMANDED to
the Regional Arbitration Branch of
(b) Actual airing of commercials; In his Decision dated August 24, 2000, origin which is hereby directed to
(c) Plugging of station promo; the Labor Arbiter dismissed the require from respondent the production
complaint of respondents for illegal of additional documents where
(d) Logging of transmitter reading; and dismissal and unfair labor practice, but necessary.
(e) In case of power failure, start up held petitioner liable for 13th month
generator set to resume program; pay. The dispositive portion of the Respondent is also assessed the
Labor Arbiters Decision reads: attorneys fees of ten percent (10%) of
3) Acting as Maintenance staff; all the above awards.5
WHEREFORE, the foregoing premises
(a) Checking of equipment; considered, judgment is hereby Petitioner elevated the case to the
(b) Warming up of generator; rendered dismissing the complaints for Court of Appeals via a Petition for
illegal dismissal and unfair labor Certiorari. On September 8, 2006, the
(c) Filling of oil, fuel, and water in practice. appellate court rendered its Decision
radiator; and denying the petition for lack of merit.
Respondents are, however, directed to
4) Acting as Cameramen pay the following complainants their Petitioner filed the present Petition for
On 4 August 1999, petitioner received a proportionate 13th month pay, to wit: Review on Certiorari, based on the
notice of hearing of the complaint. The following grounds:
following day, petitioners Engineering 1. Kirby
P 7,716.04 I.
Manager, Roy Villacastin, confronted Campo
the private respondents about the said THE COURT OF APPEALS GRAVELY
complaint. ERRED FINDING RESPONDENTS
2. Arnold ARE REGULAR EMPLOYEES OF THE
7,925.98
On 9 August 1999, private respondents Lagahit PETITIONER AND ARE NOT
were summoned to the office of PROJECT EMPLOYEES.
petitioners Area Manager, Mrs. Susan 3. Armand
Alio, and they were made to explain 4,233.68 II.
Catubig
why they filed the complaint. The next THE COURT OF APPEALS GRAVELY
day, private respondents were barred ERRED IN AWARDING SEPARATION
4. Carlos
from entering and reporting for work 4,388.19 PAY TO RESPONDENTS ABSENT A
Pabriga
without any notice stating the reasons FINDING THAT RESPONDENTS
therefor. WERE ILLEGALLY DISMISSED.
5. Geoffrey
On 13 August 1999, private 4,562.01 III.
Arias
respondents, through their counsel,
THE COURT OF APPEALS GRAVELY
wrote a letter to Mrs. Susan Alio
P28,826.14 ERRED IN AWARDING NIGHT SHIFT
DIFFERENTIAL PAY CONSIDERING
Page 20 of 59 Week 3 Cases (Labor Law Review) | amgisidro

THE ABSENCE OF EVIDENCE employed and his employment shall It is evidently important to become clear
WHICH WOULD ENTITLE THEM TO continue while such activity actually about the meaning and scope of the
SUCH AN AWARD. exist. term "project" in the present context.
The "project" for the carrying out of
IV. A fifth classification, that of a fixed term
which "project employees" are hired
employment, is not expressly
THE COURT OF APPEALS GRAVELY would ordinarily have some relationship
mentioned in the Labor Code.
ERRED IN AWARDING ATTORNEYS to the usual business of the employer.
Nevertheless, this Court ruled in Brent
FEES TO RESPONDENTS.6 Exceptionally, the "project" undertaking
School, Inc. v. Zamora,8 that such a
might not have an ordinary or normal
The parties having extensively contract, which specifies that
relationship to the usual business of the
elaborated on their positions in their employment will last only for a definite
employer. In this latter case, the
respective memoranda, we proceed to period, is not per se illegal or against
dispose of the issues raised. determination of the scope and
public policy.
parameters of the "project" becomes
Five Classifications of Employment Whether respondents are regular or fairly easy. It is unusual (but still
project employees conceivable) for a company to
At the outset, we should note that the
nature of the employment is determined undertake a project which has
Pursuant to the above-quoted Article
by law, regardless of any contract absolutely no relationship to the usual
280 of the Labor Code, employees
expressing otherwise. The supremacy business of the company; thus, for
performing activities which are usually
of the law over the nomenclature of the instance, it would be an unusual steel-
necessary or desirable in the
making company which would
contract and the stipulations contained employers usual business or trade can
therein is to bring to life the policy undertake the breeding and production
either be regular, project or seasonal
enshrined in the Constitution to afford of fish or the cultivation of vegetables.
employees, while, as a general rule,
full protection to labor. Labor contracts, From the viewpoint, however, of the
those performing activities not usually
being imbued with public interest, are legal characterization problem here
necessary or desirable in the
presented to the Court, there should be
placed on a higher plane than ordinary employers usual business or trade are
contracts and are subject to the police no difficulty in designating the
casual employees. The reason for this
power of the State.7 employees who are retained or hired for
distinction may not be readily
the purpose of undertaking fish culture
comprehensible to those who have not
Respondents claim that they are or the production of vegetables as
carefully studied these provisions: only
regular employees of petitioner GMA "project employees," as distinguished
employers who constantly need the
Network, Inc. The latter, on the other from ordinary or "regular employees,"
specified tasks to be performed can be
hand, interchangeably characterize so long as the duration and scope of the
justifiably charged to uphold the
respondents employment as project project were determined or specified at
constitutionally protected security of
and fixed period/fixed term the time of engagement of the "project
tenure of the corresponding workers.
employment. There is thus the need to employees." For, as is evident from the
The consequence of the distinction is
clarify the foregoing terms. provisions of Article 280 of the Labor
found in Article 279 of the Labor Code,
The terms regular employment and which provides: Code, quoted earlier, the principal test
project employment are taken from for determining whether particular
ARTICLE 279. Security of tenure. In employees are properly characterized
Article 280 of the Labor Code, which
cases of regular employment, the as "project employees" as distinguished
also speaks of casual and seasonal
employer shall not terminate the from "regular employees," is whether or
employment:
services of an employee except for a not the "project employees" were
ARTICLE 280. Regular and casual just cause or when authorized by this assigned to carry out a "specific project
employment. The provisions of written Title. An employee who is unjustly or undertaking," the duration (and
agreement to the contrary dismissed from work shall be entitled to scope) of which were specified at the
notwithstanding and regardless of the reinstatement without loss of seniority time the employees were engaged for
oral agreement of the parties, an rights and other privileges and to his full that project.
employment shall be deemed to be backwages, inclusive of allowances,
regular where the employee has been In the realm of business and industry,
and to his other benefits or their
engaged to perform activities which are we note that "project" could refer to one
monetary equivalent computed from
usually necessary or desirable in the or the other of at least two (2)
the time his compensation was withheld
usual business or trade of the distinguishable types of activities.
from him up to the time of his actual
employer, except where the Firstly, a project could refer to a
reinstatement.
employment has been fixed for a particular job or undertaking that is
On the other hand, the activities of within the regular or usual business of
specific project or undertaking the
project employees may or may not be the employer company, but which is
completion or termination of which has
usually necessary or desirable in the distinct and separate, and identifiable
been determined at the time of the
usual business or trade of the as such, from the other undertakings of
engagement of the employee or where
employer, as we have discussed in the company. Such job or undertaking
the work or services to be performed is
ALU-TUCP v. National Labor Relations begins and ends at determined or
seasonal in nature and employment is
Commission,9 and recently reiterated in determinable times. The typical
for the duration of the season.
Leyte Geothermal Power Progressive example of this first type of project is a
An employment shall be deemed to be Employees Union-ALU-TUCP v. particular construction job or project of
casual if it is not covered by the Philippine National Oil Company- a construction company. A construction
preceding paragraph: Provided, That, Energy Development Corporation.10 In company ordinarily carries out two or
any employee who has rendered at said cases, we clarified the term more [distinct] identifiable construction
least one year of service, whether such "project" in the test for determining projects: e.g., a twenty-five-storey hotel
service is continuous or broken, shall whether an employee is a regular or in Makati; a residential condominium
be considered a regular employee with project employee: building in Baguio City; and a domestic
respect to the activity in which he is
Page 21 of 59 Week 3 Cases (Labor Law Review) | amgisidro

air terminal in Iloilo City. Employees department to which respondent was they were employed to take the place of
who are hired for the carrying out of one assigned. This was one of the reasons regular employees of petitioner who
of these separate projects, the scope why the Court held that respondent in were absent or on leave) does not
and duration of which has been said case was not a project employee. change the fact that their jobs cannot be
determined and made known to the On the other hand, in San Miguel considered projects within the purview
employees at the time of employment, Corporation v. National Labor Relations of the law. Every industry, even public
are properly treated as "project Commission,13 respondent was hired to offices, has to deal with securing
employees," and their services may be repair furnaces, which are needed by substitutes for employees who are
lawfully terminated at completion of the San Miguel Corporation to manufacture absent or on leave. Such tasks,
project. glass, an integral component of its whether performed by the usual
packaging and manufacturing employee or by a substitute, cannot be
The term "project" could also refer to,
business. The Court, finding that considered separate and distinct from
secondly, a particular job or
respondent is a project employee, the other undertakings of the company.
undertaking that is not within the regular
explained that San Miguel Corporation While it is managements prerogative to
business of the corporation. Such a job
is not engaged in the business of device a method to deal with this issue,
or undertaking must also be identifiably
repairing furnaces. Although the activity such prerogative is not absolute and is
separate and distinct from the ordinary
was necessary to enable petitioner to limited to systems wherein employees
or regular business operations of the
continue manufacturing glass, the are not ingeniously and methodically
employer. The job or undertaking also
necessity for such repairs arose only deprived of their constitutionally
begins and ends at determined or
when a particular furnace reached the protected right to security of tenure. We
determinable times. x x x.11 (Emphases
end of its life or operating cycle. are not convinced that a big corporation
supplied, citation omitted.)
Respondent therein was therefore such as petitioner cannot device a
Thus, in order to safeguard the rights of considered a project employee. system wherein a sufficient number of
workers against the arbitrary use of the technicians can be hired with a regular
In the case at bar, as discussed in the
word "project" to prevent employees status who can take over when their
statement of facts, respondents were
from attaining the status of regular colleagues are absent or on leave,
assigned to the following tasks:
employees, employers claiming that especially when it appears from the
their workers are project employees 1) Manning of Technical Operations records that petitioner hires so-called
should not only prove that the duration Center: pinch-hitters regularly every month.
and scope of the employment was
(a) Responsible for the airing of local In affirming the Decision of the NLRC,
specified at the time they were
commercials; and the Court of Appeals furthermore noted
engaged, but also that there was
that if respondents were indeed project
indeed a project. As discussed above, (b) Logging/monitoring of national
employees, petitioner should have
the project could either be (1) a commercials (satellite)
reported the completion of its projects
particular job or undertaking that is
2) Acting as Transmitter/VTR men: and the dismissal of respondents in its
within the regular or usual business of
(a) Prepare tapes for local airing; finished projects:
the employer company, but which is
distinct and separate, and identifiable (b) Actual airing of commercials; There is another reason why we should
as such, from the other undertakings of rule in favor of private respondents.
the company; or (2) a particular job or (c) Plugging of station promo; Nowhere in the records is there any
undertaking that is not within the regular (d) Logging of transmitter reading; and showing that petitioner reported the
business of the corporation. As it was completion of its projects and the
with regard to the distinction between a (e) In case of power failure, start up dismissal of private respondents in its
regular and casual employee, the generator set to resume program; finished projects to the nearest Public
purpose of this requirement is to 3) Acting as Maintenance staff; Employment Office as per Policy
delineate whether or not the employer Instruction No. 2015 of the Department
is in constant need of the services of the (a) Checking of equipment; of Labor and Employment [DOLE].
specified employee. If the particular job (b) Warming up of generator; Jurisprudence abounds with the
or undertaking is within the regular or consistent rule that the failure of an
usual business of the employer (c) Filling of oil, fuel, and water in employer to report to the nearest Public
company and it is not identifiably radiator; and Employment Office the termination of
distinct or separate from the other 4) Acting as Cameramen14 its workers services everytime a project
undertakings of the company, there is or a phase thereof is completed
clearly a constant necessity for the These jobs and undertakings are indicates that said workers are not
performance of the task in question, clearly within the regular or usual project employees.
and therefore said job or undertaking business of the employer company and
are not identifiably distinct or separate In the extant case, petitioner should
should not be considered a project.
from the other undertakings of the have filed as many reports of
Brief examples of what may or may not company. There is no denying that the termination as there were projects
be considered identifiably distinct from manning of the operations center to air actually finished if private respondents
the business of the employer are in commercials, acting as transmitter/VTR were indeed project employees,
order. In Philippine Long Distance men, maintaining the equipment, and considering that the latter were hired
Telephone Company v. Ylagan,12 this acting as cameramen are not and again rehired from 1996 up to
Court held that accounting duties were undertakings separate or distinct from 1999. Its failure to submit reports of
not shown as distinct, separate and the business of a broadcasting termination cannot but sufficiently
identifiable from the usual undertakings company. convince us further that private
of therein petitioner PLDT. Although respondents are truly regular
essentially a telephone company, Petitioners allegation that respondents employees. Important to note is the fact
PLDT maintains its own accounting were merely substitutes or what they that private respondents had rendered
call pinch-hitters (which means that
Page 22 of 59 Week 3 Cases (Labor Law Review) | amgisidro

more than one (1) year of service at the respondents are to be considered as 2) It satisfactorily appears that the
time of their dismissal which overturns project employees, they attained employer and the employee dealt with
petitioners allegations that private regular employment status, just the each other on more or less equal terms
respondents were hired for a specific or same.21 (Citation omitted.) with no moral dominance exercised by
fixed undertaking for a limited period of the former or the latter.28 (Citation
Anent this issue of attainment of regular
time.16 (Citations omitted.) omitted.)
status due to continuous rehiring,
We are not unaware of the decisions of petitioner advert to the fixed period These indications, which must be read
the Court in Philippine Long Distance allegedly designated in employment together, make the Brent doctrine
Telephone Company v. Ylagan17and contracts and reflected in vouchers. applicable only in a few special cases
ABS-CBN Broadcasting Corporation v. Petitioner cites our pronouncements in wherein the employer and employee
Nazareno18 which held that the Brent, St. Theresas School of are on more or less in equal footing in
employers failure to report the Novaliches Foundation v. National entering into the contract. The reason
termination of employees upon project Labor Relations Commission,22 and for this is evident: when a prospective
completion to the DOLE Regional Fabela v. San Miguel employee, on account of special skills
Office having jurisdiction over the Corporation,23 and argues that or market forces, is in a position to
workplace within the period prescribed respondents were fully aware and freely make demands upon the prospective
militates against the employers claim of entered into agreements to undertake a employer, such prospective employee
project employment, even outside the particular activity for a specific length of needs less protection than the ordinary
construction industry. We have also time.24 Petitioner apparently confuses worker. Lesser limitations on the
previously stated in another case that project employment from fixed term parties freedom of contract are thus
the Court should not allow employment. The discussions cited by required for the protection of the
circumvention of labor laws in industries petitioner in Brent, St. Theresas and employee. These indications were
not falling within the ambit of Policy Fabela all refer to fixed term applied in Pure Foods Corporation v.
Instruction No. 20/Department Order employment, which is subject to a National Labor Relations
No. 19, thereby allowing the prevention different set of requirements. Commission,29where we discussed the
of acquisition of tenurial security by patent inequality between the employer
Whether the requisites of a valid fixed
project employees who have already and employees therein:
term employment are met
gained the status of regular employees
[I]t could not be supposed that private
by the employers conduct.19 As stated above, petitioner
respondents and all other so-called
interchangeably characterizes
While it may not be proper to revisit "casual" workers of [the petitioner]
respondents service as project and
such past pronouncements in this case, KNOWINGLY and VOLUNTARILY
fixed term employment. These types of
we nonetheless find that petitioners agreed to the 5-month employment
employment, however, are not the
theory of project employment fails the contract. Cannery workers are never on
same. While the former requires a
principal test of demonstrating that the equal terms with their employers.
project as restrictively defined above,
alleged project employee was assigned Almost always, they agree to any terms
the duration of a fixed-term employment
to carry out a specific project or of an employment contract just to get
agreed upon by the parties may be any
undertaking, the duration and scope of employed considering that it is difficult
day certain, which is understood to be
which were specified at the time the to find work given their ordinary
"that which must necessarily come
employee is engaged for the project.20 qualifications. Their freedom to contract
although it may not be known
is empty and hollow because theirs is
The Court of Appeals also ruled that when."25 The decisive determinant in
the freedom to starve if they refuse to
even if it is assumed that respondents fixed-term employment is not the
work as casual or contractual workers.
are project employees, they would activity that the employee is called upon
Indeed, to the unemployed, security of
nevertheless have attained regular to perform but the day certain agreed
tenure has no value. It could not then
employment status because of their upon by the parties for the
be said that petitioner and private
continuous rehiring: commencement and termination of the
respondents "dealt with each other on
employment relationship.26
Be that as it may, a project employee more or less equal terms with no moral
may also attain the status of a regular Cognizant of the possibility of abuse in dominance whatever being exercised
employee if there is a continuous the utilization of fixed-term employment by the former over the latter.
rehiring of project employees after the contracts, we emphasized in Brent that
To recall, it is doctrinally entrenched
stoppage of a project; and the activities where from the circumstances it is
that in illegal dismissal cases, the
performed are usual [and] customary to apparent that the periods have been
employer has the burden of proving
the business or trade of the employer. imposed to preclude acquisition of
with clear, accurate, consistent, and
The Supreme Court ruled that a project tenurial security by the employee, they
convincing evidence that the dismissal
employee or a member of a work pool should be struck down as contrary to
was valid.30 It is therefore the employer
may acquire the status of a regular public policy or morals.27 We thus laid
which must satisfactorily show that it
employee when the following concur: down indications or criteria under which
was not in a dominant position of
"term employment" cannot be said to be
1) There is a continuous rehiring of advantage in dealing with its
in circumvention of the law on security
project employees even after cessation prospective employee. Thus, in Philips
of tenure, namely:
of a project; and Semiconductors (Phils.), Inc. v.
1) The fixed period of employment was Fadriquela,31 this Court rejected the
2) The tasks performed by the alleged
knowingly and voluntarily agreed upon employers insistence on the
project employee are vital, necessary
by the parties without any force, duress, application of the Brent doctrine when
and indispensable to the usual
or improper pressure being brought to the sole justification of the fixed terms is
business or trade of the employer.
bear upon the employee and absent to respond to temporary albeit frequent
The circumstances set forth by law and any other circumstances vitiating his need of such workers:
the jurisprudence is present in this consent; or
case. In fine, even if private
Page 23 of 59 Week 3 Cases (Labor Law Review) | amgisidro

We reject the petitioners submission In light, however, of our ruling that differential. This is in accordance with
that it resorted to hiring employees for respondents were illegally dismissed, our ruling in Dansart Security Force &
fixed terms to augment or supplement we affirm the findings of the NLRC and Allied Services Company v.
its regular employment "for the duration the Court of Appeals that respondents Bagoy,35where we held that it is entirely
of peak loads" during short-term surges are entitled to separation pay in lieu of within the employer's power to present
to respond to cyclical demands; hence, reinstatement. We quote with approval such employment records that should
it may hire and retire workers on fixed the discussion of the Court of Appeals: necessarily be in their possession, and
terms, ad infinitum, depending upon the that failure to present such evidence
However, since petitioner refused to
needs of its customers, domestic and must be taken against them.
accept private respondents back to
international. Under the petitioner's
work, reinstatement is no longer Petitioner, however, is correct that the
submission, any worker hired by it for
practicable. Allowing private award of attorney's fees is contrary to
fixed terms of months or years can
respondents to return to their work jurisprudence. In De las Santos v.
never attain regular employment status.
might only subject them to further Jebsen Maritime Inc.,36 we held:
x x x.
embarrassment, humiliation, or even
Likewise legally correct is the deletion
Similarly, in the case at bar, we find it harassment.
of the award of attorney's fees, the
unjustifiable to allow petitioner to hire
Thus, in lieu of reinstatement, the grant NLRC having failed to explain
and rehire workers on fixed terms, ad
of separation pay equivalent to one (1) petitioner's entitlement thereto. As a
infinitum, depending upon its needs,
month pay for every year of service is matter of sound policy, an award of
never attaining regular employment
proper which public respondent actually attorney's fees remains the exception
status. To recall, respondents were
did. Where the relationship between rather than the rule. It must be stressed,
repeatedly rehired in several fixed term
private respondents and petitioner has as aptly observed by the appellate
contracts from 1996 to 1999. To prove
been severely strained by reason of court, that it is necessary for the trial
the alleged contracts, petitioner
their respective imputations of court, the NLRC in this case, to make
presented cash disbursement vouchers
accusations against each other, to express findings of facts and law that
signed by respondents, stating that they
order reinstatement would no longer would bring the case within the
were merely hired as pinch-hitters. It is
serve any purpose. In such situation, exception. In fine, the factual, legal or
apparent that respondents were in no
payment of separation pay instead of equitable justification for the award
position to refuse to sign these
reinstatement is in order.33 (Citations must be set forth in the text of the
vouchers, as such refusal would entail
omitted.) decision. The matter of attorney's fees
not getting paid for their services.
cannot be touched once and only in the
Plainly, respondents as "pinch-hitters" As regards night shift differential, the
fallo of the decision, else, the award
cannot be considered to be in equal Labor Code provides that every
should be thrown out for being
footing as petitioner corporation in the employee shall be paid not less than
speculative and conjectural. In the
negotiation of their employment ten percent (10%) of his regular wage
absence of a stipulation, attorney's fees
contract. for each hour of work performed
are ordinarily not recoverable;
between ten oclock in the evening and
In sum, we affirm the findings of the otherwise a premium shall be placed on
six oclock in the morning.34 As
NLRC and the Court of Appeals that the right to litigate. They are not
employees of petitioner, respondents
respondents are regular employees of awarded every time a party wins a suit.
are entitled to the payment of this
petitioner.1wphi1 As regular (Citations omitted.)
benefit in accordance with the number
employees, they are entitled to security
of hours they worked from 10:00 p.m. to In the case at bar, the factual basis for
of tenure and therefore their services
6:00 a.m., if any. In the Decision of the the award of attorney's fees was not
may be terminated only for just or
NLRC affirmed by the Court of Appeals, discussed in the text of NLRC Decision.
authorized causes. Since petitioner
the records were remanded to the We are therefore constrained to delete
failed to prove any just or authorized
Regional Arbitration Branch of origin for the same.
cause for their termination, we are
the computation of the night shift
constrained to affirm the findings of the WHEREFORE the Decision of the
differential and the separation pay. The
NLRC and the Court of Appeals that Court of Appeals dated September 8,
Regional Arbitration Branch of origin
they were illegally dismissed. 2006 and the subsequent Resolution
was likewise directed to require herein
denying reconsideration dated January
Separation Pay, Night Shift Differential petitioner to produce additional
22, 2007 in CA-G.R. SP No. 73652, are
and Attorneys Fees documents where necessary.
hereby AFFIRMED with the
Therefore, while we are affirming that
Petitioner admits that respondents MODIFICATION that the award of
respondents are entitled to night shift
were not given separation pay and night attorney's fees in the affirmed Decision
differential in accordance with the
shift differential. Petitioner, however, of the National Labor Relations
number of hours they worked from
claims that respondents were not Commission is hereby DELETED.
10:00 p.m. to 6:00 a.m., it is the
illegally dismissed and were therefore
Regional Arbitration Branch of origin SO ORDERED.
not entitled to separation pay. As
which should determine the
regards night shift differential, petitioner G.R. No. 143258 August 15,
computation thereof for each of the
claims that its admission in its August 2003
respondents, and award no night shift
23, 1999 letter as to the nonpayment
differential to those of them who never PHILIPPINE AIRLINES,
thereof is qualified by its allegation that
worked from 10:00 p.m. to 6:00 a.m. INC., petitioner,
respondents are not entitled thereto.
Petitioner points out that respondents It is also worthwhile to note that in the vs.
failed to specify the period when such NLRC Decision, it was herein petitioner JOSELITO PASCUA, ROBERT
benefits are due, and did not present GMA Network, Inc. (respondent ABION, IRENEO ACOSTA, GARY
additional evidence before the NLRC therein) which was tasked to produce NEPOMUCENO, JASON PALAD,
and the Court of Appeals.32 additional documents necessary for the CEFERINO de la CRUZ, JOEL
computation of the night shift SALGADO, WILFREDO RIVERA,
Page 24 of 59 Week 3 Cases (Labor Law Review) | amgisidro

ALEXANDER ANORE, FERNANDO Cathay Pacific, Northwest Airlines and Respondent admits that
BACCAY, EDILBERTO FAUNE, Thai Airlines with which PAL had complainants have been performing
REYMAR KALAW, GARY G. service contract[s]. functions that are considered
MARASIGAN, RODOLFO ODO, necessary or desirable in the usual
On certain occasions, PAL compelled
JONATHAN RENGO, ARTHUR business of PAL. There is no clear
private respondents to work overtime
APOSTOL, EDUARDO BALICASAN, showing, however, that complainants
because of urgent necessity. The
MATHIAS GLEAN, ALINORMAN employment had been fixed for a
contracts with private respondents
HARANGOTE, CRISANTO particular project or undertaking the
were extended twice, the last of which
CASTILLO, REX MARION CUERPO, completion or termination of which has
appears to have been for an indefinite
EDGARDO del PRADO, RICARDO been determined at the time of their
period.
HERNANDEZ, PEDRO MERCADO engagement. Neither is there a clear
JR., CESAR PAYOYO, RONALDO On February 3, 1994, private showing that the work or services which
QUEROL, MAURELIO SIERRA, respondent Joselito Pascua, in his and they performed, was seasonal in nature
MANUEL VILLELA, LOUISEN on behalf of other 79 part-time station and their employment for the duration of
FELIPE, LOBENEDICTO TIMBREZA, attendants, filed with the Department of the season. Complainants were simply
ANTONIO CABUG, ELISEO Labor and Employment a complaint for: hired as part-time employees at the
ESPIRITU, ARNEL BAUTISTA, ASD and at the ASD/CARGO to do
(1) Regularization
ANTHONY ROBLES, DENNIS ramp services.1wphi1
ARANDIA, CHARLIE BALUBAL, (2) Underpayment of wages
Complainants can therefore be
RHODERIC BITAS, ORLANDO (3) Overtime pay considered as casual employees for a
CANDA, CHARLIE de la CRUZ,
(4) Thirteenth month pay definite period during the first year of
RIQUESENDO de la FUENTE, RENO
their employment and, thereafter,
DUQUE, JONATHAN FEBRE, ALVIN (5) Service incentive leave pay as regular employees of respondents
RIBERTA, NATHANIEL MALABAS,
(6) Full time of eight hours employment by operation of law. As such, they
JUANITO SERUMA, FREDERICH de
should be entitled to the compensation
ASIS, ROMMEL ESTRADA, (7) Recovery of benefits due to regular and other benefits provided in the
SYDFREY EVARISTO, ERICSON employees Collective Bargaining Agreement for
INTAL, FERDINAND GALANG,
(8) Night differential pay regular employees from or day after
RUBEN PEROLINA, ROBERT
one year [of] service. Having been paid
McBURNEY, ENRIQUE SORIANO, (9) Moral damages and less than what they should receive,
ALVIN MANALAYSAY, NEMESIO
(10) Attorneys fees, complainants are therefore, entitled to
MAALA, RAUL NEPOMUCENO,
the differentials.4
SAMUEL REYES, ERWIN MINA, which was docketed as NLRC NCR
MANUEL REYES, REYNALDO Case No. 00-02-00953-94. Petitioner promptly filed a motion for
ORAPA, TEODORICO PADELIO, reconsideration of the NLRC decision,
RANDY PIMENTEL, WILLIAM During the pendency of the case, PAL which was denied in an order dated
PATRIMONIO, JOEL RAMOS, President Jose Antonio Garcia and PAL October 12, 1998. Consequently,
OLEGARIO REYES, RAUL OCULTO, Chairman & Corporate Executive petitioner filed with the Court of Appeals
ROGELIO OLQUINDO, and LARRY Officer Carlos G. Dominguez converted a special civil action for certiorari to
VILLAFLOR. respondents. the employment status of private annul the NLRC decision. On January
respondents from temporary part-time 26, 2000, the Court of Appeals
QUISUMBING, J.: to regular part-time. dismissed the said petition and by
For review is the decision dated On February 24, 1995, private resolution issued on May 23, 2000,
January 26, 20001 of the Court of respondents dropped their money claim denied petitioners motion for
Appeals and its May 23, then pending before the Office of reconsideration.
20002 resolution in CA-G.R. SP No. Executive Labor Arbiter Guanio, thus Hence, this appeal by certiorari where
50351. The appellate court dismissed leaving for consideration their petitioner assigns the following errors:
the petition for certiorari filed by complaint for "regularization" -
petitioner to challenge the NLRC conversion of their employment status -I-
decision dated January 23, 1998,3 in from part-time to regular (working on an THE HONORABLE COURT OF
NLRC NCR CA No. 010598-96, and 8-hour shift). APPEALS ERRED IN UPHOLDING
likewise denied their motion for THE NLRC DECISION WHICH RULED
reconsideration. Finding private respondents remaining
cause of action was rendered "moot ON THE MERITS OF THE
The antecedent facts, as summarized and academic" by their supervening COMPLAINT, DESPITE THE FACT
by the Court of Appeals and borne by regularization and denying their prayer THAT THE CAUSE OF ACTION HAS
the records, are as follows: that their status as regular employees ALREADY BECOME MOOT AND
be given retroactive effect to "six ACADEMIC WHEN THE PETITIONER
In April, August, and September of ACCORDED REGULAR STATUS TO
1992, PAL hired private respondents as months after their stint as temporary
contractual employees," the Executive THE RESPONDENTS DURING THE
station attendants on a four or six-hour ARBITRATION PROCEEDINGS.
work-shift a day at five to six days a Labor Arbiter dismissed private
week. respondents complaint. - II -
The primary duty of private respondents On appeal, the NLRC, finding for EVEN IF WE ASSUME FOR THE
who were assigned to PALs Air private respondents, declared them as SAKE OF ARGUMENT THAT THE
services Department and ASD/CARGO regular employees of PAL with an COMPLAINT HAS NOT BEEN
was to load cargo to departing, and eight-hour work-shift. The pertinent RENDERED MOOT AND ACADEMIC,
unload cargo from arriving PAL portions of the NLRC decision reads: STILL THE HONORABLE COURT OF
international flights as well as flights of APPEALS ERRED IN UPHOLDING
THE DECISION OF THE NLRC
Page 25 of 59 Week 3 Cases (Labor Law Review) | amgisidro

WHICH COMPELLED THE consistently asked for full- want to be entitled to the many
PETITIONER TO CHANGE THE time regularization. According to collective bargaining agreement (CBA)
RESPONDENTS EMPLOYMENT respondents, in their pleadings they benefits which would be possible only if
STATUS FROM PART-TIME TO FULL- repeatedly sought not only they were regular full-time employees
TIME.5 regularization but in fact they also since regular part-time employees are
asked entitlement to benefits of regular covered by the Personnel Policies and
Two principal issues need resolution:
full-time employees. Further, Procedures Manual, the relevant
(1) Did petitioners act of converting
respondents claim that since petitioner portion of which was introduced only for
respondents status from temporary to
needs the services of private the first time in this Court. While regular
regular employees render the original
respondents for eight (8) hours or more part-time employees have their own
complaint for "regularization" moot and
a day, it is with evident bad faith that package of benefits, it is safe to infer
academic? (2) Did the appellate court
petitioner continues to categorize them that the benefits under the CBA are
err when it upheld the decision of the
as mere "part-timers" rather than full- better, being a result of negotiation,
NLRC to accord respondents regular
timers so the company could avoid than those provided under the
full-time employment although
payment of corresponding benefits due Personnel Policies and Procedures
petitioner, in the exercise of its
to respondents.9 Manual which are unilaterally handed
management prerogative, requires only
down by petitioner.10
part-time services? On the first issue that the original
complaint was rendered moot and An issue becomes moot and academic
Petitioner contends that the NLRC
academic by the subsequent when it ceases to present a justiciable
could not change respondents status
regularization of respondents while the controversy, so that a declaration on
from part-time to full-time employment
action was pending before the labor the issue would be of no practical use
because respondents merely prayed in
arbiter, we find that the petitioners or value. In that situation, there is no
their original complaint for regular
assertion is not entirely true nor actual substantial relief to which
status as opposed to temporary or
accurate. Petitioner insists that all respondents would be entitled and
casual employment. Respondents
respondents sought was the which would be negated by the
temporary part-time status was already
conversion of their temporary dismissal of their original
converted by petitioner to regular part-
employment status to regular complaint.11 Here, it is readily apparent
time status at the arbitration level, to put
employment, without asking for a that the dismissal of the original
an end to the controversy. That being
change from part-time to full time complaint by the labor arbiter would
the case, the labor arbiter ordered the
status. This claim, however, is belied by negate the substantial relief to which
dismissal of the complaint for having
the very complaint initially filed with the respondents would have been entitled.
become moot and academic, because
labor arbiter. As stated by the OSG in They seek regular full-time employment
the relief sought was already granted
its comment to the petition filed with the and this claim is fully set forth in the
even prior to the termination of the
Court of Appeals, which we now quote original complaint. They specifically
dispute. Clearly, says petitioner,
aptly: prayed for entitlement to benefits due to
respondents cause of action for
a regular full-time employee with
regularization had been extinguished However, a thorough scrutiny of the
seniority rights.12 The mere
when petitioner accorded the appeal reveals that despite its lack of
regularization of respondents would still
respondents regular status.6 It was preciseness, private respondents were,
not entitle them to all benefits under the
grave abuse as well as error for the in fact, ultimately assailing their part-
CBA, which regular full-time employees
NLRC to touch the merits of an issue in time status, not just the retroactive date
enjoy. In fact, regular part-time
effect already mooted at the arbiters of their regularization as part-time
employees are covered by the benefits
level, according to petitioner. employees. They contradicted the
under Personnel Policies and
Labor Arbiters perception that hiring of
On the second issue, petitioner argues Procedures Manual, not the CBA. The
part-time employees was justified by
that the NLRC could not lawfully impose dismissal then of the complaint by the
the peculiar nature of airport
the change of employment status of labor arbiter is reversible error, and the
operations. Besides, even petitioner
respondents from part-time to full-time NLRC still acted within its power and
understood the heart of the appeal
employees.7 It has no authority or authority as a quasi-judicial agency in
when it observed in their Answer to
power to do so. According to petitioner, finding that respondents deserve more
Appeal that "[a]ll that they wanted is to
management of its business is a matter than just being regular employees but
be converted to full time status."
that falls within the exclusive domain of must be regular full-time employees.
the employer. As such, only the The pleadings filed by private
We now come to the second issue,
employer, and no one else, should respondents consistently show that
which touches on the valid exercise of
determine the number of employees to they wanted to become regular full-time
management prerogative. According to
be hired, the type of employees to be employees, not only regular part-time
petitioner, NLRC encroached upon this
engaged, and the qualifications of each employees. Although they repeatedly
exclusive sphere of managerial
and every employee. The employer said "regular employees," not
decision, when it ruled that respondents
could engage part-time employees if its specifying whether it should be regular
should be made regular full-time
operational needs require such part- part-time or regular full-time, their
employees instead of regular part-time
time employees. The NLRC should not intention should be read from the
employees, and the appellate court
substitute its judgment for that of the entirety of all their pleadings. Private
thereby erred in sustaining the NLRC.
employer in this regard, says respondents have consistently alleged
This contention does not quite ring true,
petitioner.8 that despite their part-time status, they
much less persuade us. It must be
actually work more than 8 hours daily.
Respondents, in their comment, aver borne in mind that the exercise of
Private respondent Joselito Pascua
that the conversion of their employment management prerogative is not
confirmed this when he testified on
status from part-time temporary to part- absolute. While it may be conceded that
November 24, 1995 (TSN, November
time regular did not render inutile their management is in the best position to
24, 1995, pp. 35-36). Ultimately, they
original complaint, as in fact they have know its operational needs, the
Page 26 of 59 Week 3 Cases (Labor Law Review) | amgisidro

exercise of management prerogative its decision was regularly PERPETUAL HELP CREDIT
cannot be utilized to circumvent the law performed.16 Petitioner has not shown COOPERATIVE, INC., petitioner,
and public policy on labor and social any compelling justification to warrant vs.
justice. That prerogative accorded reversal of the NLRC findings. Absent BENEDICTO FABURADA, SISINITA
management could not defeat the very any showing of patent error, or that the VILLAR, IMELDA TAMAYO,
purpose for which our labor laws exist: NLRC failed to consider a fact of HAROLD CATIPAY, and the
to balance the conflicting interests of substance that if considered would NATIONAL LABOR RELATIONS
labor and management, not to tilt the warrant a different result, we yield to the COMMISSION, Fourth Division,
scale in favor of one over the other, but factual conclusions of that quasi-judicial Cebu City, respondents.
to guaranty that labor and management agency. More so, when as here, these
stand on equal footing when bargaining NLRC conclusions are affirmed by the SANDOVAL-GUTIERREZ, J.:
in good faith with each other. By its very appellate court. On January 3, 1990, Benedicto
nature, encompassing as it could be, Faburada, Sisinita Vilar, Imelda
It is basic to the point of being
management prerogative must be Tamayo and Harold Catipay, private
elementary that nomenclatures
exercised always with the principles of respondents, filed a complaint against
assigned to a contract shall be
fair play at heart and justice in mind. the Perpetual Help Credit Cooperative,
disregarded if it is apparent that the
Records show that respondents were attendant circumstances do not support Inc. (PHCCI), petitioner, with the
first hired to work for a period of one their use or designation. The same is Arbitration Branch, Department of
year. Notwithstanding the fact that true with greater force concerning Labor and Employment (DOLE),
respondents perform duties that are contracts of employment, imbued as Dumaguete City, for illegal dismissal,
usually necessary or desirable in the they are with public interest. Although premium pay on holidays and rest days,
usual trade or business of petitioner, respondents were initially hired as part- separation pay, wage differential, moral
respondents were considered time employees for one year, thereafter damages, and attorney's fees.
temporary employees as their the over-all circumstances with respect Forthwith, petitioner PHCCI filed a
engagement was fixed for a specific to duties assigned to them, number of motion to dismiss the complaint on the
period. However, equally borne by the hours they were permitted to work ground that there is no employer-
records, is the fact that respondents including over-time, and the extension employee relationship between them
employment was extended for more of employment beyond two years can as private respondents are all members
than two years. Evidently, there was a only lead to one conclusion: that they and co-owners of the cooperative.
continued and repeated necessity for should be declared full-time Furthermore, private respondents have
their services, which puts to naught the employees. Thus, not without sufficient not exhausted the remedies provided in
contention that respondents, beyond and substantial reasons, the claim of the cooperative by-laws.
the one-year period, still continued to management prerogative by petitioner
be temporary part-time employees. ought to be struck down for being On September 3, 1990, petitioner filed
Article 280 of the Labor contrary to law and policy, fair play and a supplemental motion to dismiss
Code13 provides that any employee good faith. alleging that Article 121 of R.A. No.
who has rendered at least one year of 6939, otherwise known as the
In sum, we are in agreement with the Cooperative Development Authority
service, whether such service is
Court of Appeals that the NLRC did not Law which took effect on March 26,
continuous or broken, shall be
commit grave abuse of discretion 1990, requires conciliation or mediation
considered a regular employee with
simply because it overturned the labor within the cooperative before a resort to
respect to the activity in which he is
arbiters decision. Grave abuse of judicial proceeding.
employed, and his employment shall
discretion is committed when the
continue while such activity actually On the same date, the Labor Arbiter
judgment is rendered in a capricious,
exists. denied petitioner's motion to dismiss,
whimsical, arbitrary or despotic
The NLRC decision now assailed is one manner. An abuse of discretion does holding that the case is impressed with
based on substantial evidence, which is not necessarily follow just because employer-employee relationship and
that amount of relevant evidence that a there is a reversal by the NLRC of the that the law on cooperatives is
reasonable mind might accept as decision of the labor arbiter. Neither subservient to the Labor Code.
adequate to justify a conclusion.14 It does variance in the evidentiary On November 23, 1993, the Labor
bears stressing that findings of fact of assessment by the NLRC and by the Arbiter rendered a decision, the
quasi-judicial agencies like the NLRC labor arbiter warrant as a matter of dispositive portion of which reads:
which have acquired expertise in the course another full review of the facts.
WHEREFORE, premises considered,
specific matters entrusted to their The NLRCs decision, so long as it is
judgment is hereby rendered declaring
jurisdiction are accorded by this Court not bereft of evidentiary support from
complainants illegally dismissed, thus
not only respect but even finality if they the records, deserves respect from the
Court.17 respondent is directed to pay
are supported by substantial
Complainants backwages computed
evidence.15 Here we find no compelling
WHEREFORE, the petition is DENIED from the time they were illegally
reason to go against the factual findings
for lack of merit. The decision dated dismissed up to the actual
of the NLRC. The parties had ample
January 26, 2000 of the Court of reinstatement but subject to the three
opportunity to present below the
Appeals and its resolution dated May year backwages rule, separation pay
necessary evidence and arguments in
23, 2000, in CA-G.R. SP No. 50351 are for one month for every year of service
furtherance of their causes, and it is
AFFIRMED. Costs against petitioner. since reinstatement is evidently not
presumed that the quasi-judicial body
SO ORDERED. feasible anymore, to pay complainants
rendered its decision taking into
13th month pay, wage differentials and
consideration the evidence and
G.R. No. 121948 October 8, Ten Percent (10%) attorney's fees from
arguments thus presented. Such being
2001 the aggregate monetary award.
the case, it is likewise presumed that
However, complainant Benedicto
the official duty of the NLRC to render
Page 27 of 59 Week 3 Cases (Labor Law Review) | amgisidro

Faburada shall only be awarded what a.m. and 1:00 to 4:00 p.m. and for at deposit slips; receive deposits from
are due him in proportion to the nine least three (3) hours during members; and perform such other
and a half months that he had served Sundays. Monthly salary: P1,000.00 bookkeeping and accounting duties as
the respondent, he being a part-time from June to December 1988; may be assigned her from time to time.
employee. All other claims are hereby P1,350.00 - from January to June 1989;
Harold D. Catipay Clerk. Worked
dismissed for lack of merit. and P1,500.00 from July to December
with the Cooperative since March 3 to
1989. Duties: Among others, Enter
The computation of the foregoing December 29, 1989. Work schedule:
data into the computer; compute
awards is hereto attached and forms an Monday to Friday 8:00 to 11:30 a.m.
interests on savings deposits, effect
integral part of this decision." and 2:00 to 5:30 p.m.; Saturday 8:00
mortuary deductions and dividends on
to 11:30 a.m. and 1:00 to 4:00 p.m.; and
On appeal,1 the NLRC affirmed the fixed deposits; maintain the masterlist
one Sunday each month for at least
Labor Arbiter's decision. of the cooperative members; perform
three (3) hours. Monthly salary:
various forms for mimeographing; and
Hence, this petition by the PHCCI. P900.00 from March to June 1989;
perform such other duties as may be
P1,050.00 - from July to December
The issue for our resolution is whether assigned from time to time.
1989. Duties: Among others,
or not respondent judge committed
Sisinita Vilar Clerk. Worked with the Bookkeeping, accounting and
grave abuse of discretion in ruling that
Cooperative since December 1, 1987 collecting duties, such as, post daily
there is an employer-employee
up to December 29, 1989. Work collections from the two (2) collectors in
relationship between the parties and
schedule: Regular working the market; reconcile passbooks and
that private respondents were illegally
hours. Monthly salary: P500.00 from ledgers of members in the market; and
dismissed.
December 1, 1987 to December 31, assist the other clerks in their duties.
Petitioner PHCCI contends that private 1988; P1,000.00 from January 1,
All of them were given a memorandum
respondents are its members and are 1989 to June 30, 1989; and P1,150.00
of termination on January 2, 1990,
working for it as volunteers. Not being from July 1, 1989 to December 31,
effective December 29, 1989.
regular employees, they cannot sue 1989. Duties: Among others, Prepare
petitioner. summary of salary advances, journal We are not prepared to disregard the
vouchers, daily summary of findings of both the Labor Arbiter and
In determining the existence of an
disbursements to respective respondent NLRC, the same being
employer-employee relationship, the
classifications; schedule loans; prepare supported by substantial evidence, that
following elements are considered: (1 )
checks and cash vouchers for regular quantum of evidence required in quasi
the selection and engagement of the
and emergency loans; reconcile bank judicial proceedings, like this one.
worker or the power to hire; (2) the
power to dismiss; (3) the payment of statements to the daily summary of
Necessarily, this leads us to the issue
wages by whatever means; and (4) the disbursements; post the monthly
of whether or not private respondents
power to control the worker's conduct, balance of fixed and savings deposits in
are regular employees. Article 280 of
with the latter assuming primacy in the preparation for the computation of
the Labor Code provides for three kinds
overall consideration. No particular interests, dividends, mortuary and
of employees: (1) regular employees or
form of proof is required to prove the patronage funds; disburse checks
those who have been engaged to
existence of an employer-employee during regular and emergency loans;
perform activities which are usually
relationship. Any competent and and perform such other bookkeeping
necessary or desirable in the usual
relevant evidence may show the and accounting duties as may be
business or trade of the employer; (2)
relationship.2 assigned to her from time to time.
project employees or those whose
The above elements are present here. Imelda C. Tamayo Clerk. Worked employment has been fixed for a
with the Cooperative since October 19, specific project or undertaking, the
Petitioner PHCCI, through Mr. Edilberto
1987 up to December 29, 1989. Work completion or termination of which has
Lantaca, Jr., its Manager, hired private
schedule: Monday to Friday - 8:00 to been determined at the time of the
respondents to work for it. They worked
11:30 a.m and 2:00 to 5:30 p.m.; every engagement of the employee or where
regularly on regular working hours,
were assigned specific duties, were Saturday 8:00 to 11:30 a.m and 1:00 the work or service to be performed is
to 4:00 p.m; and for one Sunday each seasonal in nature and the employment
paid regular wages and made to
month - for at least three (3) is for the duration of the season; and (3)
accomplish daily time records just like
any other regular employee. They hours. Monthly salary: P60.00 from casual employees or those who are
October to November 1987; P250.00 neither regular nor project
worked under the supervision of the
cooperative manager. But for December 1987; P500.00 from employees.3 The employees who are
unfortunately, they were dismissed. January to December 1988; P950 deemed regular are: (a) those who
from January to June 1989; and have been engaged to perform
That an employer-employee exists P1,000.00 from July to December activities which are usually necessary
between the parties is shown by the 1989. Duties: Among others, pick up or desirable in the usual trade or
averments of private respondents in balances for the computation of business of the employer; and (b) those
their respective affidavits, carefully interests on savings deposit, mortuary, casual employees who have rendered
considered by respondent NLRC in dividends and patronage funds; at least one (1 ) year of service, whether
affirming the Labor Arbiter's decision, prepare cash vouchers; check petty such service is continuous or broken,
thus: cash vouchers; take charge of the with respect to the activity in which they
Benedicto Faburada Regular part- preparation of new passbooks and are employed.4 Undeniably, private
time Computer programmer/ operator. ledgers for new applicants; fill up respondents were rendering services
Worked with the Cooperative since members logbook of regular necessary to the day-to-day operations
June 1, 1988 up to December 29, 1989. depositors, junior depositors and of petitioner PHCCI. This fact alone
Work schedule: Tuesdays and special accounts; take charge of loan qualified them as regular employees.
Thursdays, from 1:00 p.m. to 5:30 p.m. releases every Monday morning; assist
and every Saturday from 8:00 to 11:30 in the posting and preparation of
Page 28 of 59 Week 3 Cases (Labor Law Review) | amgisidro

All of them, except Harold D. Catipay, such work at its pleasure. Petitioner settled in a court of competent
worked with petitioner for more than thus vehemently insists that their jurisdiction."
one (1) year: Benedicto Faburada, for dismissal is not against the law.
Complementing this Article is
one and a half (1 1/2) years; Sisinita
Procedural due process requires that Section8 of R.A. No. 6939 (Cooperative
Vilar, for two (2) years; and Imelda C.
the employer serve the employees to Development Authority Law) which
Tamayo, for two (2) years and two (2)
be dismissed two (2) written notices reads:
months. That Benedicto Faburada
before the termination of their
worked only on a part-time basis, does SEC. 8 Mediation and Conciliation.
employment is effected: (a) the first, to
not mean that he is not a regular Upon request of either or both parties,
apprise them of the particular acts or
employee. One's regularity of the Authority shall mediate and
omissions for which their dismissal is
employment is not determined by the conciliate disputes within a cooperative
sought and (b) the second, to inform
number of hours one works but by the or between cooperatives: Provided,
them of the decision of the employer
nature and by the length of time one That if no mediation or conciliation
that they are being dismissed.7 In this
has been in that particular succeeds within three (3) months from
case, only one notice was served upon
job.5 Petitioner's contention that private request thereof, a certificate of non-
private respondents by petitioner. It was
respondents are mere volunteer resolution shall be issued by the
in the form of a Memorandum signed by
workers, not regular employees, must Commission prior to the filing of
the Manager of the Cooperative dated
necessarily fail. Its invocation of San appropriate action before the proper
January 2, 1990 terminating their
Jose City Electric Cooperative vs. courts.
services effective December 29, 1989.
Ministry of Labor and Employment (173
Clearly, petitioner failed to comply with The above provisions apply to
SCRA 697, 703 (1989) is misplaced.
the twin requisites of a valid notice. members, officers and directors of the
The issue in this case is whether or not
cooperative involved in disputes within
the employees-members of a We hold that private respondents have
a cooperative or between cooperatives.
cooperative can organize themselves been illegally dismissed.
for purposes of collective bargaining, There is no evidence that private
Petitioner contends that the labor
not whether or not the members can be respondents are members of petitioner
arbiter has no jurisdiction to take
employees. Petitioner missed the point PHCCI and even if they are, the dispute
cognizance of the complaint of private
is about payment of wages, overtime
As regular employees or workers, respondents considering that they
pay, rest day and termination of
private respondents are entitled to failed to submit their dispute to the
employment. Under Art. 217 of the
security of tenure. Thus, their services grievance machinery as required by
Labor Code, these disputes are within
may be terminated only for a valid P.D. 175 (strengthening the
the original and exclusive jurisdiction of
cause, with observance of due process. Cooperative Movement) 8 and its
the Labor Arbiter.
implementing rules and regulations
The valid causes are categorized into
under LOI 23. Likewise, the As illegally dismissed employees,
two groups: the just causes under
Cooperative Development Authority did private respondents are therefore
Articles 282 of the Labor Code and the
not issue a Certificate of Non- entitled to reinstatement without loss of
authorized causes under Articles 283
Resolution pursuant to Section 8 of seniority rights and other privileges and
and 284 of the same Code. The just
R.A. 6939 or the Cooperative to full backwages, inclusive of
causes are: (1) serious misconduct or
Development Authority Law. allowances, plus other benefits or their
willful disobedience of lawful orders in
monetary equivalent computed from
connection with the employee's work; As aptly stated by the Solicitor General
the time their compensation was
(2) gross or habitual neglect of duties; in his comment, P.D. 175 does not
withheld from them up to the time of
(3) fraud or willful breach of trust; (4) provide for a grievance machinery
their actual reinstatement.9 Since they
commission of a crime or an offense where a dispute or claim may first be
were dismissed after March 21, 1989,
against the person of the employer or submitted. LOI 23 refers to instructions
the effectivity date of R.A. 671510 they
his immediate family member or to the Secretary of Public Works and
are granted full backwages, meaning,
representative; and, analogous cases. Communications to implement
without deducting from their backwages
The authorized causes are: (1) the immediately the recommendation of the
the earnings derived by them
installation of labor-saving devices; (2) Postmaster General for the dismissal of
elsewhere during the period of their
redundancy; (3) retrenchment to some employees of the Bureau of Post.
illegal dismissal.11 If reinstatement is no
prevent losses; and (4) closing or Obviously, this LOI has no relevance to
longer feasible, as when the
cessation of operations of the the instant case.
relationship between petitioner and
establishment or undertaking, unless
Article 121 of Republic Act No. 6938 private respondents has become
the closing is for the purpose of
(Cooperative Code of the Philippines) strained, payment of their separation
circumventing the provisions of law.
provides the procedure how pay in lieu of reinstatement is in order.12
Article 284 provides that an employer
cooperative disputes are to be
would be authorized to terminate the WHEREFORE, the petition is hereby
resolved, thus:
services of an employee found to be DENIED. The decision of respondent
suffering from any disease if the ART. 121. Settlement of Disputes. NLRC is AFFIRMED, with modification
employee's continued employment is Disputes among members, officers, in the sense that the backwages due
prohibited by law or is prejudicial to his directors, and committee members, private respondents shall be paid in full,
health or to the health of his fellow and intra-cooperative disputes shall, as computed from the time they were
employees6 far as practicable, be settled amicably illegally dismissed up to the time of the
in accordance with the conciliation or finality of this Decision.13
Private respondents were dismissed
mediation mechanisms embodied in
not for any of the above causes. They SO ORDERED.
the by-laws of the cooperative, and in
were dismissed because petitioner
applicable laws. G.R. No. L-58870 December 18, 1987
considered them to be mere voluntary
workers, being its members, and as Should such a conciliation/mediation
proceeding fail, the matter shall be
Page 29 of 59 Week 3 Cases (Labor Law Review) | amgisidro

CEBU INSTITUTE OF TECHNOLOGY ELDEFONSO BURIAS, CORAZON and EMPLOYEES ASSOCIATION,


(CIT), petitioner, CASENAS, REGINO CASTANEDA, DENNIS MONTE, BECKY TORRES,
vs. GEORGE CATADA, CARMENCITA LOIDA VELASCO, ROMLY NERY,
HON. BLAS OPLE, in his capacity G. CHAVEZ, LORETIA CUNANAN, DAISY N. AMPIG, PATRICIO
as Minister, Ministry of Labor and FLORES DELFIN, TERESITA DOLORES, ROGELIO RAMIREZ, and
Employment, JULIUS ABELLA, ESPINO, ELVIE GALANZA, NILDA L. SEVILLA, petitioners,
ARSENIO ABELLANA, RODRIGO AMADEA GALELA, TERESITA. vs.
ALIWALAS, ZOSIMO ALMOCERA, JUNTILLA, LEONARDA The HON. JAIME C. LAYA, in his
GERONIDES ANCOG, GREGORIO KAPUNGAN, ADORACION capacity as Minister of Education,
ASIA, ROGER BAJARIAS, LANAWAN, LINDA LAYAO, Culture and Sports, respondents.
BERNARDO BALATAYO, JR., GERARDO LAYSON, VIRGILIO
No. L-76524 December 18, 1987
BASILIO CABALLES, DEMOCRITO LIBETARIO, RAYMOND PAUL
TEVES, VOLTAIRE DELA CERNA, LOGARTA, NORMA LUCERO, JASMIN BISCOCHO, ROWENA
ROBERTO COBARRUBIAS, VILMA ANATOLIA MENDEZ, ELIODORO MARIANO, AGNES GALLEGO, MA.
GOMEZ CHUA, RUBEN GALLITO, MENDEZ, JUDALINE MONTE, ELMA ANA ORDENES, ISABEL DE LEON,
EDGARDO CONCEPCION, VICTOR OCAMPO, ESTEFA OLIVARES, LUZVIMINDA FIDEL, MARIQUIT
COQUILLA, JOSE DAKOYKOY, GEORGE ORAIS, CRISPINA REYES, SOTERA ORTIZ, ANGELINA
PATERNO WONG, EVELYN PALANG, GRETA PEGARIDO, ROXAS, BITUIN DE PANO,
LACAYA, RODRIGO GONZALES, MELBA QUIACHON, REMEDIOS ELIZABETH ORDEN, APOLLO
JEOGINA GOZO, MIGUEL QUIROS, VIRGINIA RANCES, EDNA ORDEN, GUILLERMA CERCANO,
CABALLES, CONSUELO DELOS REYES, VICENTE TAN, IMELDA CARINGAL, EFREN
JAVELOSA, QUILIANO LASCO, EMERGENCIA ROSELL, JULIETA BATIFORA, ROSIE VALDEZ, DELIA
FRANKLIN LAUTA, JUSTINIANA TATING, MERCIA TECARRO, QUILATEZ, FELIX RODRIGUEZ,
LARGO, RONALD LICUPA, ALAN FELISA VERGARA, WEMINA OSCAR RODRIGUEZ, JOVITA
MILANO, MARIA MONSANTO, VILLACIN, MACRINA YBARSABAL, CEREZO, JOSEFINA BONDOC,
REYNALDO NOYNAY, RAMON MILAGROS CATALAN, JULIETA BELEN POSADAS, DOLORES
PARADELA, NATALIO PLAZA, AQUINDE, SONIA ARTIAGA, MA. PALMA, ANTONINA CRUS,
LUZPURA QUIROGA, NOE RODIS, TERESITA OBANDO, ASUNCION CONRADO BANAYAT, TERESITA
COSMENIA SAAVEDRA, ABAYAN, ESTHER CARREON, LORBES, and CORAZON
LEONARDO SAGARIO, LETICIA ECHEVARRE, BUENAFE SAMSON, MIRANDA, petitioners,
SERRA, SIEGFREDO TABANAG, CONCEPCION GONZALES, vs.
LUCINO TAMAOSO, DANILO VITALIANA VENERACION, THE HONORABLE AUGUSTO
TERANTE, HELEN CALVO TORRES, LEONCIA ABELLAR, REYNITA SANCHEZ, in his capacity as
ERNESTO VILLANUEVA, DOLORES VILLACARLOS. respondents. Minister of Labor and Employment,
VILLONDO, EDWARD YAP, ESPIRITU SANTO PAROCHIAL
No. L-68345 December 18, 1987
ROWENA VIVARES, DOLORES SCHOOL AND ESPIRITU SANTO
SANANAM, RODRIGO BACALSO, DIVINE WORD COLLEGE OF PAROCHIAL SCHOOL FACULTY
YOLANDA TABLANTE, ROMERO LEGAZPI, petitioner, ASSOCIATION, respondents.
BALATUCAN, CARMELITA LADOT, vs.
No. 76596 December 18, 1987
PANFILO CANETE, EMMANUEL The Honorable Deputy Minister of
CHAVEZ, JR., SERGIO GALIDO, Labor and Employment, VICENTE RICARDO C. VALMONTE and
ANGEL COLLERA, ZOSIMO LEOGARDO, JR., the HONORABLE CORAZON BADIOLA, petitioners,
CUNANAN, RENE BURT LLANTO, REGIONAL DIRECTOR (Regional vs.
GIL BATAYOLA, VICENTE Office No. 5) of the Ministry of Labor THE HONORABLE AUGUSTO
DELANTE, CANDELARIO DE DIOS, & Employment GERARDO S. SANCHEZ, in his capacity as
JOSE MA. ESTELLA, NECITA CASTILLO, CECILIA MANUEL and Minister of Labor and Employment,
TRINIDAD, ROTELLO ILUMBA, other alleged ESPIRITU SANTO PAROCHIAL
TEODORICO JAYME, RAYMUNDO complainants, respondents. SCHOOL FACULTY ASSOCIATION,
ABSIN, RUDY MANEJA, REYNA and ESPIRITU SANTO PAROCHIAL
Nos. L-69224-5 December 18, 1987
RAMOS, ANASTACIA BLANCO, FE SCHOOL, respondents.
DELMUNDO, ELNORA MONTERA, FAR EASTERN UNIVERSITY
MORRISON MONTESCLAROS, EMPLOYEES LABOR
ELEAZAR PANIAMOGAN, UNION, petitioner, CORTES, J.:
BERNARDO PILAPIL, RODOLFO vs.
FAR EASTERN UNIVERSITY and the Six cases involving various private
POL, DEMOSTHENES REDOBLE, schools, their teachers and non-
PACHECO ROMERO, DELLO NATIONAL LABOR RELATIONS
COMMISSION, respondents. teaching school personnel, and even
SABANAL, SARAH SALINAS, parents with children studying in said
RENATO SOLATORIO, EDUARDO No. 70832 December 18, 1987 schools, as well as the then Minister of
TABLANTE, EMMANUEL TAN, Labor and Employment, his Deputy, the
FELICISIMO TESALUNA, JOSE GREGORIO T. FABROS, ROGELIO
B. DE GUZMAN, CRESENCIANO National Labor Relations Commission,
VERALLO, JR., MAGDALENO and the then Minister of Education,
VERGARA, ESMERALDA ESPINO, JOSE RAMOS SUNGA,
BAYLON BANEZ FERNANDO Culture and Sports, have
ABARQUEZ, MAC ARTHUR been consolidated in this single
DACUYCUY ACOMPANADA, ELESTERIO, ISMAEL TABO,
AMABLE TUIBEO CELSO TUBAY, Decision in order to dispose of
TRINIDAD ADLAWAN, FE uniformly the common legal issue
ELIZORDO ALCANTARA, RAFAEL HERNANDEZ, GERONIMO
JASARENO, MEL BALTAZAR, MA. raised therein, namely, the allocation of
REOSEBELLA AMPER, ZENAIDA the incremental proceeds of authorized
BACALSO, ELIZA BADANA, LOURDES PASCUAL, T. DEL
ROSARIO ACADEMY TEACHERS tuition fee increases of private schools
GEORGIA BAS, ERLINDA BURIAS,
Page 30 of 59 Week 3 Cases (Labor Law Review) | amgisidro

provided for in section 3 (a) of Dec. No. 451: second, whether or not dated September 29, 1981 and held
Presidential Decree No. 451, and the same items may be charged against that the basic hourly rate designated in
thereafter, under the Education Act of said portion under the provisions of B.P. the Teachers' Program is regarded as
1982 (Batas Pambansa Blg. 232). Blg. 232: and, third, whether or not the basic hourly rate of
schools and their employees may enter teachers exclusive of the COLA, and
Specifically, the common problem
into a collective bargaining agreement that COLA should not be taken from the
presented by these cases requires an
allocating more than 60% of said 60% incremental proceeds of the
interpretation of section 3(a) of Pres.
incremental proceeds for salary approved increase in tuition fee. The
Decree No. 451 which states:
increases and other benefits of said dispositive portion of the Order reads:
SEC. 3. Limitations. The increase in employees. After these sub-issues
PREMISES CONSIDERED, CIT is
tuition or other school fees or other have been resolved, the Court will
hereby ordered to pay its teaching staff
charges as well as the new fees or tackle the other incidents attending the
the following:
charges authorized under the next individual cases, seriatim.
preceding section shall be subject to 1) COLA under P.D.'s 525 and 1123
The factual antecedents that brought
the following conditions; from February 1978 up to 1981;
these cases before this Tribunal are as
(a) That no increase in tuition or other follows: 2) COLA under P.D.'s l6l4,1634,1678
school fees or charges shall be and l7l3;and
I.. FACTUAL BACKGROUND OF
approved unless sixty (60%) per
EACH CASE 3) Service incentive leave from l978
centum of the proceeds is allocated for
upto l981.
increase in salaries or wages of the A.
members of the faculty and all other CIT is further directed to integrate into
CEBU INSTITUTE OF TECHNOLOGY
employees of the school concerned, the basic salaries of its teachers and
CASE
and the balance for institutional (sic) COLA under P.D.'s 525 and 1123
development, student assistance and This case originated from a Complaint starting on January 1981, pursuant to
extension services, and return to filed with the Regional Office No. VII of P.D. 1751. For purposes of integration,
investments: Provided That in no case the Ministry of Labor on February 11, the hourly rate shown in its Teachers'
shall the return to investments exceed 1981 against petitioner Cebu Institute of Program for school year 198182 shall
twelve (12%) per centum of the Technology (CIT) by private be considered as the basic hourly rate.
incremental proceeds; respondents, Panfilo Canete, et al.,
SO ORDERED.
teachers of CIT, for non-payment of: a)
xxx xxx xxx
cost of living allowances (COLA) under Petitioner assails the aforesaid Order in
In addition, there is also a need for a Pres. Dec. Nos. 525, 1123, 1614, 1678 this Special Civil Action of certiorari with
pronouncement on the effect of the and 1713, b) thirteenth (13th) month Preliminary Injunction and/or
subsequent enactment of B.P. Blg. 232 pay differentials and c) service Restraining Order. The Court issued a
which provides for the allocation of incentive leave. By virtue of an Order Temporary Restraining Order on
tuition fee increases in section 42 issued by the then Deputy Minister of December 7, 1981 against the
thereof. Labor Carmelo C. Noriel, a labor- enforcement of the questioned Order of
management committee composed of the Minister of Labor and Employment.
In a nutshell, the present controversy
one representative each from the
was precipitated by the claims of some B.
Ministry of Labor and Employment
school personnel for allowances and
(MOLE), the Minister of Education, DIVINE WORD COLLEGE OF
other benefits and the refusal of the
Culture and Sports (MECS), and two LEGAZPI CASE
private schools concerned to pay said
representatives each from CIT and from Upon a complaint filed by ten faculty
allowances and benefits on the ground
the teachers was created. Said members for alleged non-compliance
that said items should be deemed
committee was to ascertain compliance by herein petitioner Divine Word
included in the salary increases they
with the legal requirements for the College of Legazpi with, among others,
had paid out of the 60% portion of the
payment of COLA, thirteenth (13th) Pres. Dec. No. 451, i.e., allowances
proceeds from tuition fee increases
month pay and service incentive leave were charged to the 60% incremental
provided for in section 3 (a) of Pres.
[Rollo, p. 84]. proceeds of tuition fee increase, the
Decree No. 451. The interpretation and
construction of laws being a matter of The position taken by CIT during the Labor Regulation Section of Regional
judicial power and duty [Marbury v. conference held by the labor Office No. V (Legazpi City) of the
Madison, 1 Cranch 137 (1803); management committee was that it had Ministry of Labor and Employment
Endencia v. David, 93 Phil. 696 (1953)], paid the allowances mandated by conducted an inspection of the
this Court has been called upon to various decrees but the same had been employment records of said school. On
resolve the controversy. integrated in the teacher's hourly rate. It the basis of the report on the special
alleged that the payment of COLA by inspection that the school did not
In the process of reading and at times,
way of salary increases is in line with comply with Pres. Dec. No. 451, herein
having to decipher, the numerous
Pres. Dec. No. 451. It also claimed in its respondent Regional Director issued an
pleadings filed in the six cases, the
position paper that it had paid thirteenth Order dated May 30, 1983, requiring
Court found that the main issue has
month pay to its employees and that it compliance by the Divine Word
been approached by the parties from
was exempt from the payment of College. The latter filed a Memorandum
almost diametrical points, thereby
service incentive leave to its teachers of Appeal from said Order which the
bringing into focus three sub-
who were employed on contract basis Regional Director treated as a Motion
issues: first, whether or not allowances
[Rollo, pp. 85-86]. for Reconsideration. Upon failure of the
and other fringe benefits of faculty
school to comply with the aforesaid
members and other school employees After the report and recommendation of
Order, another Order (August 2, 1983)
may be charged against the 60% the committee, herein public
was issued by herein respondent
portion of the tuition fee increases respondent, then Minister of Labor and
Regional Director requiring herein
provided for in section 3(a) of Pres. Employment issued the assailed Order
Page 31 of 59 Week 3 Cases (Labor Law Review) | amgisidro

petitioner to pay the faculty members- respondent and dispensing with the (Annex " E " to Petition; Rollo, p. 55, 65-
complainants (herein private private respondents' Comment, the 66).
respondents) the amounts indicated Court resolved to dismiss the Petition
Both parties appealed the decision of
therein or the total sum of Six Hundred for lack of merit (Rollo, p. 198). On April
the Labor Arbiter. On September 18,
Seventeen Thousand Nine Hundred 26, 1985, petitioner filed a Motion for
1984, the respondent Commission
Sixty Seven Pesos and Seventy Seven Reconsideration with Motion to
disposed of the appeal in the following
Centavos (P 617,967.77). Petitioner's Consider the Case En Banc. On June
manner:
Motion for Reconsideration of the Order 26, 1985 the First Division of the Court
was denied. referred the case to the Court En RESPONSIVE TO THE FOREGOING,
Banc for consolidation with G.R. No. the Decision of Labor Arbiter Ruben A.
On appeal, the respondent Deputy
70832, entitled "Gregorio T. Fabros, et Aquino in the instant case dated March
Minister of Labor and Employment
al vs. Hon. Jaime C. Laya, etc. " since it 10, 1980 is hereby Modified in the
affirmed the Order of the Regional
involves the same issue on the sense that complainant's claims for
Director, viz:
application of 60% incremental legal holiday pay and 13th month pay
xxx xxx xxx proceeds of authorized tuition fee are likewise dismissed for lack of merit
increases [Rollo, p. 235]. The Court EN and the dismissal of the claim under
Coming now to the substantial merit of
BANC resolved to accept the case. P.D. 451 is hereby
the case, we share the view that the
(Resolution of July 16, 1985). These Affirmed en (sic) toto.
emergency allowances due the
cases were further consolidated with
complainants under the several (Annex "A" to Petition: Rollo, p. 24, 35).
other cases involving the same issues.
presidential decrees (PD's 525, 1123,
Petitioner's Motion for Reconsideration
etc.) cannot be charged by the C.
dated September 29, 1984 was denied
respondent against the 60% of the
FAR EASTERN UNIVERSITY CASE for lack of merit on November 8, 1984.
incremental proceeds from increase in
Before this Court is the petition on
tuition fees authorized under PD 451, On December 17, 1978, petitioner
certiorari filed by the Union assailing the
not only because as per decision of the Union filed with the Ministry of Labor
abovementioned decision of the
Supreme Court (UE vs. UE Faculty and Employment a complaint against
Commissioner.
Association, et. al., G.R. No. 57387, respondent University for non-payment
September 30, 1982) said allowances of legal holiday pay and under-payment D.
whether mandated by law or secured by of the thirteenth (13th) month pay. On FABROS CASE
collective bargaining should be taken July 7, 1979, while the case was
only from the return to investment pending, the Union President, in his This petition is in the nature of a class
referred to in the decree if the school personal capacity, filed another suit brought by petitioners in behalf of
has no other resources to grant the complaint for violation of Pres. Dec. No. the faculty members and other
allowances but not from the 60% 451 against the same respondent. employees of more than 4000 private
incremental proceeds, but also schools nationwide. Petitioners seek to
The two cases were forthwith
because to hold otherwise would, to our enjoin the implementation of
consolidated and jointly heard and tried.
mind, inevitably result in the loss of one paragraphs 7 to 7.5 of MECS Order No.
On March 10, 1980, Labor Arbiter
benefit due the complainants-that is the 5, series of 1985 on the ground that the
Ruben A. Aquino promulgated a
salary or wage increase granted them said order is null and void for being
decision the dispositive portion of which
by PD 451. contrary to Pres. Dec. No. 451 and the
is quoted hereunder:
rulings of the Supreme Court in the
In other words, we believe that by
RESPONSIVE TO THE FOREGOING, cases of University of the East v. UE
paying the complainants' allowances
respondent is hereby directed, within Faculty Association [G.R. No. L-57387,
out of the 60% incremental proceeds
ten (10) days from receipt hereof, to: September 20, 1982, 117 SCRA
intended for their salary increase they
5541, University of Pangasinan Faculty
are practically being deprived of one 1. To (sic) pay the paid legal holidays
Union v. University of Pangasinan and
benefit-their share in the 60% that it withdrew since January 14, 1976
NLRC [G.R. No. 63122, February 20,
incremental proceeds in terms of salary up to the present; and
1984, 127 SCRA 691 ], St. Louis
or wage increase.
2. Pay the 13th month pay differential of University Faculty Club v. NLRC and St.
WHEREFORE, for the reasons complainant's for the covered period Louis University [G.R. No. 65585,
abovestated, the Order appealed from December 16, 1975 to December 17, September 28, 1984, 132 SCRA 380].
is hereby AFFIRMED, and the appeal 1978, date of filing of complaint for non-
On September 11, 1982, Batas
DISMISSED, for lack of merit. payment of legal holiday pay and under
Pambansa Blg. 232 (Education Act of
payment of the 13th month pay, and
SO ORDERED. 1982) was signed into law. On the
thereafter. Barred forever are money
matter of tuition and other school fees
(Annex "K " to Petition; Rollo, p. 108, claims beyond three (3) years from the
of private schools, section 42 of said
110). time the course (sic) of action occurred.
law provides as follows:
Respondent's formula on transportation
This special civil action of certiorari and
allowance which was deducted from the Sec. 42. Tuition and other School Fees.
Prohibition with Preliminary Injunction
13th month pay is thus subject to this Each private School shall determine
questions the interpretation of, and
prescriptive period, for purposes of its rate of tuition and other school fees
application by the respondent Deputy
computation of differentials for the 13th or charges. The rates and charges
Minister, of the provisions of Pres. Dec.
month pay. adopted by schools pursuant to this
No. 45 1, as set forth in the assailed
provision shall be collectible, and their
Order. The claim under PD 451 is hereby
application or use authorized subject to
dismissed for lack of merit.
On March 25, 1985, after considering rules and regulations promulgated by
the allegations, issues and arguments SO ORDERED. the Ministry of Education, Culture and
adduced in the Petition as well as the Sports. (Emphasis supplied).
Comment thereon of the public
Page 32 of 59 Week 3 Cases (Labor Law Review) | amgisidro

Invoking section 42 of B.P. Blg. 232, bargaining agreements and voluntary order as to them. In separate
among others, as its legal basis, the employer practices, Provided That resolutions, this Court granted their
then Minister of Education Jaime C. increases in fees specifically authorized prayers.
Laya promulgated on April 1, 1985 the for the purposes listed in paragraph
Ateneo de Manila University, De La
disputed MECS Order No. 25, s. 1985 4.3.3 hereof shall be used entirely for
Sale University (Taft Avenue) and De
entitled Rules and Regulations To those purposes. (Italics supplied).
La Salle University-South, through their
Implement the Provisions of B.P. Blg.
7.5. Other student fees and charges as respective counsels, manifested that
232. The Education Act of 1982,
may be approved, including for the school year 1985-1986, tuition
Relative to Student Fees for School
registration, library, laboratory, athletic, fee increase was approved by the
Year 1985-1986. The relevant portions
application, testing fees and charges MECS and that on the basis of Pres.
of said Order are quoted hereunder:
shall be used exclusively for the Dec. No. 451, 60% of the tuition fee
7. Application or Use of Tuition and indicated purposes, including (a) the increases shall answer for salary
acquisition and maintenance of increase. However, a budgeted salary
Other School Fees or Charges.
equipment, furniture and fixtures, and increase, exclusive of living allowances
7.1. The proceeds from tuition fees and buildings, (b) the payment of debt and other benefits, was approved for
other school charges as well as other amortization and interest charges on the same school year which when
income of each school shall be treated debt incurred for school laboratory, computed amounts to more than the
as an institutional fund which shall be athletic, or other purposes, and (c) 60%.
administered and managed for the personal services and maintenance
This Court granted the motions in
support of school purposes and operating expenses incurred to
separate resolutions lifting the
strictly: Provided, That for the purpose operate the facilities or services for
temporary restraining order with
of generating additional financial which fees and charges are collected.
respect to these schools in order that
resources or income for the operational
The Petition prayed for the issuance of they may proceed with the
support and maintenance of each
a temporary restraining order which implementation of the general salary
school two or more schools may pool
was granted by this Court after hearing. increase for their employees.
their institutional funds, in whole or in
The dispositive portion of the resolution
part, subject to the prior approval of In the case of St. Louis University, its
dated May 28, 1985 reads as follows:
their respective governing boards. Faculty Club, Administrative Personnel
After due consideration of the Association and the University itself
7.2. Tuition fees shag be used to cover
allegations of the petition dated May 22, joined in a petition seeking for leave
the general expenses of operating the
1985 and the arguments of the parties, that 49% of the increase in tuition and
school in order to allow it to meet the
the Court Resolved to ISSUE, effective other fees for school year 1985-1986 be
minimum standards required by the
immediately and continuing until further released. Petitioners manifested that
Ministry or any other higher standard, to
orders from this Court, a TEMPORARY the remaining balance shall continue to
which the school aspires. They may be
RESTRAINING ORDER enjoining the be held in escrow by the University.
used to meet the costs of operation for
respondent from enforcing or
maintaining or improving the quality of In a resolution dated January 28, 1986,
implementing paragraphs 7.4 to 7.5 of
instruction/training/research through the Court resolved as follows:
MECS Order No. 25, s. 1985, which
improved facilities and through the
provide for the use and application of Accordingly, the Temporary
payment of adequate and competitive
sixty per centum (60%) of the increases Restraining Order issued by this Court
compensation for its faculty and support
in tuition and other school fees or on May 28, 1985 is hereby ordered
personnel, including compliance with
charges authorized by public LIFTED with respect to Saint Louis
mandated increases in personnel
respondent for the school year 1985- University of Baguio City in order that it
compensation and/or allowance.
1986 in a manner inconsistent with may proceed immediately with the
7.3. Tuition fees shag be used to cover section 3(a), P.D. No. 451, (which implementation of salary increases for
minimum and necessary costs allocates such 60% of the increases its employees.
including the following: (a) exclusively "for increases in salaries or
D.
compensation of school personnel such wages of the members of the faculty
as teaching or academic staff, school and other employees of the school BISCOCHO CASE
administrators, academic non-teaching concerned.") and directing accordingly The Espiritu Santo Parochial School
personnel, and non-academic that such 60% of the authorized and the Espiritu Santo Parochial School
personnel, (b) maintenance and increases shall be held in escrow by the Faculty Association were parties to a
operating expenses, including power respective colleges and universities, labor dispute which arose from a
and utilities, rentals, depreciation, office i.e., shall be kept intact and not deadlock in collective bargaining. The
supplies; and (c) interest expenses and disbursed for any purpose pending the parties entered into conciliation
installment payments on school debts. Court's resolution of the issue of the proceedings. The union went on strike
validity of the aforementioned MECS after efforts at the conciliation failed.
7.4. Not less than sixty (60) percent of
Order in question. Subsequently, a return to work
the incremental tuition proceeds shall
be used for salaries or wages, (Rollo, p. 21). agreement was forged between the
allowances and fringe benefits of parties and both agreed to submit their
In the same resolution, the Philippine
faculty and support staff, including cost labor dispute to the jurisdiction of the
Association of Colleges and Minister of Labor.
of living allowance, imputed costs of
Universities (PACU) was impleaded as
contributed services, thirteenth (13th)
respondent. In the exercise of his power to assume
month pay, retirement fund
jurisdiction, the Ministry of Labor and
contributions, social security, medicare, Subsequent to the issuance of this
Employment issued an Order dated
unpaid school personnel claims and resolution, four (4) schools,
April 14, 1986 which provides for the
payments as may be prescribed by represented in this petition, moved for
following:
mandated wage orders. collective the lifting of the temporary restraining
Page 33 of 59 Week 3 Cases (Labor Law Review) | amgisidro

IN CONSIDERATION OF ALL THE which the corresponding percentage of over a labor dispute involving the
FOREGOING, the Ministry hereby 90% will be taken. The resulting amount private respondents school and faculty
declares the strike staged by the Union will be divided among 141.5 employees association. The latter had earlier filed
to be legal and orders the following: for 1985-86 and 132.5 employees for a notice of strike because of a
1986-87. bargaining deadlock on the demands of
a) the School to submit the pertinent
its members for additional economic
record of employment of Romualdo 1/2 of the resulting increase will be
benefits. After numerous conciliation
Noriego to the Research and added to basic and divided by 13.3 to
conferences held while the union was
Information Division of the NLRC for arrive at monthly increase in basic. The
on strike, the parties voluntarily agreed
computation of his underpayment of other 1/2 will be divided by 12.3 to
that the public respondent shall assume
wages and for the parties to abide by arrive at monthly increase in living
jurisdiction over all the disputes
the said computation; allowance.
between them. As to the subject matter
b) the School to submit all pertinent xxx xxx xxx of the instant case, the public
record of collections of tuition fee respondent found that the latest
4) xxx
increases for school year (sic) 1982- proposals of the respondent school was
1983, 1983-1984 and 1984-1985 to the Upon request/demand of the Union, to give 85% of the proceeds from tuition
Research and Information Division of School win deduct from backwages of fee increases for the school years to be
the NLRC for proper computation and managerial employees and others divided among the teachers and
for equal distribution of the amount to all outside the bargaining unit what Union employees as salary adjustments.
employees and teachers during the win charge its own members in the form What the respondent faculty
abovementioned school year (sic) as of attorney's fees, special assessment association offered to accept was a
their salary adjustment under P.D. 461; and union dues/agency fee. package of 95% for school year 1985-
5) The signing of the CBA and payment 1986, 90% for school year 1986- 1987.
c) the parties to wait for the final
of backwages and others shall be on The respondent school offered to strike
resolution of the illegal dismissal (case)
November 26, 1986 at the Espiritu the middle of the two positions, hence
docketed as NLRC NCR Case No. 5-
Santo Parochial School Library. the Order complained of by the
1450-85 and to abide by the said
petitioners [See Annex "A", Petition;
resolution;
(Rollo, pp. 3-4). Rollo, pp. 9, 14-15; Comment of the
d) to furnish the MECS a copy of this Respondent Faculty Association: Rollo,
The herein petitioners, Jasmin
order for them to issue the guidelines in p. 26].
Biscocho and 26 others, all employees
the implementation of PRODED
and faculty members of the respondent II. RESOLUTION OF THE COMMON
Program;
School, filed the present petition for LEGAL ISSUE
e) the parties to execute a collective prohibition to restrain the
implementation of the April 14, 1986 This long-drawn controversy has sadly
bargaining agreement with an
Order of respondent Labor Minister as placed on the balance diverse interests,
economic package equivalent to 90% of
the proceeds from tuition fee increases well as the agreements arrived at opposed yet intertwined, and all
pursuant thereto. They contend that deserving, and demanding, the
for school year 1985-1986 and another
said Order and agreements affect their protection of the State. On one arm of
90% for school year 1986-1987 and
rights to the 60% incremental proceeds the balance hang the economic survival
85% for school year 1987-1988. The
amount aforementioned shall be under Pres. Dec. No. 451 which provide of private schools and the private
for the exclusive application of the 60% school system, undeniably performing
divided equally to all members of the
incremental proceeds to basic salary. a complementary role in the State's
bargaining unit as their respective
efforts to maintain an adequate
salary adjustments. Such other benefits
Acting on the petitioners' prayer, this educational system in the country.
being enjoyed by the members of the
Court immediately issued a temporary Perched precariously on the other arm
bargaining unit prior to the negotiation
restraining order on November 25, of the same balance is the much-
of the CBA shall remain the same and
1986 ". . . enjoining the respondents needed financial uplift of
shall not be reduced.
from enforcing, implementing and schoolteachers, extolled for all times as
f) the School to deduct the amount proceeding with the questioned order of the molders of the minds of youth,
equivalent to ten (10%) per cent of the April 14, 1986 and collective bargaining hence of every nation's future. Ranged
backwages payable to all members of agreement executed between with them with needs and claims as
the bargaining unit as negotiation fee respondents Union and the School insistent are other school personnel.
and to deliver the same to the Union Administration in pursuance thereof." And then, anxiously waiting at the
Treasurer for proper [Rollo, p. 20]. sidelines, is the interest of the public at
disposition (Emphasis supplied). large, and of the State, in the continued
F.
SO ORDERED. availability to all who desire it, high-
VALMONTE CASE standard education consistent with
(Rollo, pp. 16-17) national goals, at a reasonable and
This Petition was filed by parents with
Pursuant to the said order, private children studying at respondent school, affordable price.
respondent Union agreed to Espiritu Santo Parochial School to Amidst these opposing forces the task
incorporate in their proposed collective nullify the Order dated April 14, 1986 at hand becomes saddled with the
bargaining agreement (CBA) with the issued by public respondent, then resultant implications that the
School the following: Minister of Labor and Employment, interpretation of the law would bear
specifically paragraphs (e) and (f) upon such varied interests. But this
2) The Union and School Administration
thereof, quoted in the Biscocho case. Court can not go beyond what the
will incorporate the following in their
CBA - The award contained in the said Order legislature has laid down. Its duty is to
is the result of the assumption of say what the law is as enacted by the
1) The computation of the tuition fee lawmaking body. That is not the same
jurisdiction by the public respondent
increase shall be gross to gross from
Page 34 of 59 Week 3 Cases (Labor Law Review) | amgisidro

as saying what the law should be or With leave of Court, the Philippine Solicitor General Manifested the
what is the correct rule in a given set of Association of Colleges and position that:
circumstances. It is not the province of Universities, filed its Memorandum as
a. If the tuition fee increase was
the judiciary to look into the wisdom of Intervenor in support of the proposition
collected during the effectivity oil
the law nor to question the policies that schools may pay the COLA to
Presidential Decree No. 451, 60%
adopted by the legislative branch. Nor faculty members and other employees
thereof shall answer exclusively for
is it the business of this Tribunal to out of the 60% of the increase in tuition
salary increase of school personnel.
remedy every unjust situation that may fees. In addition to the arguments
Other employment benefits shall be
arise from the application of a particular already set forth in the memorandum of
covered by the 12% allocated for return
law. It is for the legislature to enact the petitioner CIT, intervenor PACU
of investment, this is in accordance with
remedial legislation if that be necessary attacks the Decision of this Court
the ruling of this Honorable Court
in the premises. But as always, with apt in University of the East v. University of
in University of the East vs. U.E.
judicial caution and cold neutrality, the the East Faculty Association et. all G.R.
Faculty Association, et. al (117 SCRA
Court must carry out the delicate No. 57387 as "not doctrinal" and
554), ... and reiterated in University of
function of interpreting the law, guided inapplicable to the CIT case. The Court
Pangasinan Faculty Union v. University
by the Constitution and existing held in the UE case, which was
of Pangasinan, et. al. (127 SCRA 691)
legislation and mindful of settled promulgated on September 30, 1982,
and St. Louis Faculty Club u. NLRC
jurisprudence. The Court's function is during the pendency of these cases,
(132 SCRA 380).
therefore limited, and accordingly, must that:
confine itself to the judicial task of b. If the salary increase was collected
... allowances and benefits should be
saying what the law is, as enacted by during the effectivity of Batas
chargeable to the return to investment
the lawmaking body. Pambansa Blg. (sic) 232, 60% thereof
referred to in Sec. 3(a), if the schools
shall answer not only for salary
FIRST SUB-ISSUE should happen to have no other
increase of school personnel but also
resources than incremental proceeds of
A. Whether or not allowances and other for other employment benefits.
authorized tuition fee increases ... (See
fringe benefits of employees may be
Dispositive Portion of the Decision) (Rollo, at pp. 513-514)
charged against the 60% portion of the
incremental proceeds provided for in Intervenor PACU alleges that the 2. Arguments raised in the Divine Word
sec. 3(a) of Pres. Dec. No. 451. aforecited U.E. decision does not College Case
categorically rule that COLA and other
1. Arguments raised in the Cebu Petitioner Divine Word College of
fringe benefits should not be charged
Institute of Technology case Legazpi (DWC) advances the theory
against the 60% incremental proceeds
that the COLA, 13th month pay and
In maintaining its position that the of the authorized tuition fee increase.
other personnel benefits decreed by
salary increases it had paid to its
The Solicitor General, on the other law, must be deemed chargeable
employees should be considered to
hand, argues in support of the Order of against the 60% portion allocated for
have included the COLA, Cebu Institute
the public respondent that Pres. Dec. increase of salaries or wages of faculty
of Technology (CIT) makes reference to
No. 451 allocates the 60% proceeds of and all other school employees. In
Pres. Dec. No. 451 and its
tuition fee increases exclusively for support of this stance, petitioner points
Implementing Rules. The line of
salary increases of teachers and non- out that said personnel benefits are not
reasoning of the petitioner appears to
teaching supportive personnel of the included in the enumeration of the items
be based on the major premise that
school concerned, and that the Decree for which the balance (less 60%) or
under said decree and rules, 60% of the
does not provide that said salary 40% portion of the incremental
incremental proceeds from tuition fee
increases would take the place of the proceeds may be alloted under section
increases may be applied to salaries,
COLA [Rollo, p. 244-245]. He cites as 3(a) of Pres. Dec. No. 451 [Rollo, pp.
allowances and other benefits of
authority for this stance, two (2) 29-30. Petitioner likewise cites the
teachers and other school personnel. In
memoranda of the then President dated interpretation of the respondent
support of this major premise, petitioner
June 6, 1978 and March 30, 1979 both Minister of Education, Culture and
cites various implementing rules and
of which provide that the 60% Sports embodied in the Implementing
regulations of the then Minister of
incremental proceeds of tuition fee Rules and Regulations of P.D. 451,
Education, Culture and Sports, to the
increases "shall be allocated for the DEC Issuance, May 13, 1987; Rollo, p.
effect that 60% of the incremental
increase in the salaries of teachers and 30], that the 60% incremental proceeds
proceeds may be applied to salaries,
supportive personnel. " Anent the U.E. of authorized tuition fee increases may
allowances and other benefits for
case, the Solicitor General states that be applied to increases in emoluments
members of the faculty and other
the Supreme Court in deciding said and/or benefits for members of faculty,
school personnel [Petition citing
case took note of the stand of the Office including staff and administrative
Implementing Rules and Regulations of
of the President that the 60% employees of the school as the valid
Pres. Dec. No. 451 of various dates;
incremental proceeds shall be solely interpretation of the law, as against that
Rollo, pp. 318-320]. Petitioner
applied to salaries of faculty members made by the respondent Deputy
concludes that the salary increases it
and employees. Minister of Labor in the assailed Order.
had granted the CIT teachers out of the
If the latter interpretation is upheld,
60% portion of the incremental On August 7, 1986, considering the
petitioner would go as far as
proceeds of its tuition fee increases supervening events, including the
questioning the constitutionality of
from 1974-1980 pursuant to Pres. Dec. change of administration, that have
Pres. Dec. No. 451 upon the ground
No. 451 and the MECS implementing transpired during the pendency of these
that the same discriminates against the
rules and regulations must be deemed cases, the Court required the Solicitor
petitioner and other private schools as
to have included the COLA payable to General to state whether or not he
a class of employers. According to the
said employees for those years [Rollo, maintains the action and position taken
petitioner, the discrimination takes the
pp. 911]. by his predecessor-in-office. In his
form of requiring said class of
Compliance with said Resolution, the
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employers to give 60% of their profits to the rulings of this Court in the cases of from tuition fee increases, allowances
their employees in addition to the COLA University of the East v. U.E. Faculty, and benefits should be charged against
mandated by law, while other Association et al. and of University of the proceeds of tuition fee increases
employers have to contend only with Pangasinan Faculty Union v. University which the law allows for return on
salary increases and COLA [Petition; of Pangasinan and NLRC (supra). The investments under section 3(a) of Pres.
Rollo, p. 46]. Union submits that monetary benefits, Dec. No. 451, therefore, not against the
other than increases in basic salary, are 60% portion allocated for increases in
With regard to the Decision of this Court
not chargeable to the 60% incremental salaries and wages (See 117 SCRA at
in the U.E. case, petitioner claims
proceeds. 571). This ruling was reiterated in
exemption therefrom upon the ground
the University of Pangasinan case and
that the Court's interpretation of a law The respondent University in its
in the Saint Louis University case.
cannot be applied retroactively to Comment dated June 13, 1982 refers to
parties who have relied upon the Article 97(f) of the Labor Code which There is no cogent reason to reverse
previous administrative interpretation provides a definition of the term the Court's ruling in the aforecited
which has not been declared invalid or "wages" to support its position that cases. Section 3(a) of Pres. Dec. No.
unconstitutional [Petition; Rollo, pp. 50- "salaries or wages" as used in Pres. 451 imposes among the conditions for
51 1. Petitioner further argues on this Dec. No. 451 should be interpreted to the approval of tuition fee
point that if the court had intended to include other benefits in terms of increases, the allocation of 60% per
invalidate the MECS interpretation of money. cent of the incremental proceeds
the Decree, it should have positively thereof for increases in salaries or
As mentioned in the Cebu Institute of
stated so in the Decision [Petition; wages of school personnel and not for
Technology case, the Solicitor General
Rollo, p. 50]. any other item such as allowances or
filed its Compliance with this Court's
other fringe benefits. As aptly put by the
The Comment of the public resolution dated August 7, 1986
Court in University of Pangasinan
respondents cite as settled requiring him to manifest whether public
Faculty Union v. University of
jurisprudence applicable to the case at respondents maintain the position they
Pangasinan, supra:
bar, the ruling of this Court in the U.E. have taken in these consolidated
case, supra, which was reiterated in the cases. The resolution of September 25, ... The sixty (60%) percent incremental
subsequent cases of University of 1986 required petitioners to Comment proceeds from the tuition increase
Pangasinan Faculty Union v. University on said Compliance. are to be devoted entirely to wage or
of Pangasinan et all and St. Louis salary increases which means
The Comment dated December 6, 1986
Faculty Club v. NLRC, et al. increases in basic salary. The law
was received by this Court after
cannot be construed to include
Public respondents Deputy Minister of petitioner Union was required to show
allowances which are benefits over and
Labor and Employment and Regional cause why no disciplinary action should
above the basic salaries of the
Director of the MOLE (Region V) be taken against them for failure to
employees. To charge such benefits to
likewise attack the validity of the comply earlier. The Union agreed with
the 60% incremental proceeds would
Revised Implementing Rules and the position taken by the Solicitor
be to reduce the increase in basic
Regulations of Pres. Dec. No. 451 cited General that under Pres. Dec. No.
salary provided by law, an increase
by the petitioner insofar as said rules 451, 60% of the tuition fee increases,
intended also to help the teachers and
direct the allotment of the 60% of shall answer exclusively for salary
other workers tide themselves and their
incremental proceeds from tuition fee increase. However, it expressed
families over these difficult economic
hikes for retirement plan, faculty disagreement with the opinion that
times. [Italics supplied] (127 SCRA 691,
development and allowances. They during the effectivity of B.P. Blg. 232,
702).
argue that said rules and regulations the 60% ncremental proceeds shall
were invalid for having been answer not only for salary increases but This interpretation of the law is
promulgated in excess of the rule- also for other employment benefits. The consistent with the legislative intent
making authority of the then Minister of Union argues that whereas "Pres. Dec. expressed in the Decree itself, i.e., to
Education under Pres. Dec. No. 451 No. 451 is a law on a particular subject, alleviate the sad plight of private
which mandates that the 60% of viz., increase of tuition fee by schools and that of their personnel
incremental proceeds from tuition fee educational institutions and how such wrought by slump in enrollment and
hikes should be allotted solely for salary increase shall be allocated B.P. Blg. increasing operational costs on the part
increases [Comment; Rollo, pp. 184- 232 is not a law on a particular subject of the schools, and the increasing costs
185]. Finally, with respect to the issue of increase of tuition fee . . . ; at most it of living on the part of the personnel
on the allege unconstitutionality of Pres. is a general legislation on tuition fee as (Preamble, Pres. Dec. No. 451). While
Dec. No. 451, the public respondents it touches on such subject in general, " coming to the aid of the private school
posit that a legislation (such as Pres. [Comment on Compliance; Rollo, p. system by simplifying the procedure for
Dec. No. 451) which affects a particular 376], Suppletory to its argument that increasing tuition fees, the Decree
class does not infringe the B.P. Blg. 232 did not impliedly repeal imposes as a condition for the approval
constitutional guarantee of equal Pres. Dec. No. 451, the Union also of any such increase in fees, the
protection of the law as long as it invokes the principle that a special or allocation of 60% of the incremental
applies uniformly and without particular law cannot be repealed by a proceeds thereof, to increases in
discrimination to everyone of that class general law. salaries or wages of school personnel.
[Comment; Rollo, p. 14]. This condition makes for a quid pro
RESOLUTION OF THE FIRST SUB-
quo of the approval of any tuition fee
3. Arguments raised in the Far Eastern ISSUE
hike by a school, thereby assuring the
University case
This Court has consistently held, school personnel concerned, of a share
It is the petitioner's contention that in beginning with the University of the in its proceeds. The condition having
respect of Pres. Dec. No. 451, the East case, that if the schools have no been imposed to attain one of the main
decision of the NLRC is a defiance of resources other than those derived objectives of the Decree, which is to
Page 36 of 59 Week 3 Cases (Labor Law Review) | amgisidro

help the school personnel cope with the treated as administrative points out that the decisive issue in this
increasing costs of living, the same interpretations of the law and as such, case is whether B.P. Big. 232 has
cannot be interpreted in a sense that they may be set aside by this Court in repealed Pres. Dec. No. 451 because
would diminish the benefit granted said the final determination of what the law on the answer to this question depends
personnel. means. the validity of MECS Order No. 25, s.
1985. Public respondent holds the view
In the light of existing laws which SECOND SUB-ISSUE
consistent with that of PACU on the
exclude allowances from the basic
B. Whether or not allowances and other matter of B.P. Blg. 232 having repealed
salary or wage in the computation of the
fringe benefits may be charged against Pres. Dec. No. 451. To support this
amount of retirement and other benefits
the 60% portion of the incremental contention, the Solicitor General
payable to an employee, this Court will
proceeds of tuition fee increases upon compared the respective provisions of
not adopt a different meaning of the
the effectivity of the Education Act of the two laws to show the inconsistency
terms "salaries or wages" to mean the
1982 (B.P. Blg. 232). and incompatibility which would result
opposite, i.e. to include allowances in
in a repeal by implication.
the concept of salaries or wages. 1. Arguments raised in the Fabros case
RESOLUTION OF THE SECOND
As to the alleged implementing rules In assailing MECS Order No. 25, s.
SUB-ISSUE
and regulations promulgated by the 1985, petitioners argue that the matter
then MECS to the effect that of allocating the proceeds from tuition On the matter of tuition fee increases
allowances and other benefits may be fee increases is still governed by Pres. section 42 of B.P. Blg. 232 provides:
charged against the 60% portion of the Dec. No. 451. It is their opinion that
SEC. 42. Tuition and Other School
proceeds of tuition fee increases section 42 of B.P. Blg. 232 did not
Fees. Each private school shall
provided for in Section 3(a) of Pres. repeal Pres. Dec. No. 451 for the
determine its rate of tuition and other
Dec. No. 45 1, suffice it to say that these following reasons: first, there is no
school fees or charges. The rates and
were issued ultra vires, and therefore conflict between section 42 of B.P. Blg.
charges adopted by schools pursuant
not binding upon this Court. 232 and section 3(a) of Pres. Dec. No.
to this provision shall be collectible and
451 or any semblance of inconsistency
The rule-making authority granted by their application or use authorized,
to deduce a case of a repeal by
Pres. Dec. No. 451 is confined to the subject to rules and regulations
implication: second, Pres. Dec. No. 451
implementation of the Decree and to promulgated by the Ministry of
is a specific law upon a particular
the imposition of limitations upon the Education, Culture and Sports.
subject-the purposes and distribution of
approval of tuition fee increases, to wit: (Emphasis supplied).
the incremental proceeds of tuition fee
SEC. 4. Rules and Regulations. The increases, while B.P. Blg. 232 is a The enactment of B.P. Blg. 232 and the
Secretary of Education and Culture is general law on the educational system; subsequent issuance of MECS Order
hereby authorized, empowered and as such, a specific law is not repealed No. 25, s. 1985 revived the old
directed to issue the requisite rules and by a subsequent general law in the controversy on the application and use
regulations for the effective absence of a clear intention; and third, of the incremental proceeds from tuition
implementation of this Decree. He may, Pres. Dec. No. 451 is still the only law fee increases. As can be gleaned from
in addition to the requirements and on the subject of tuition fee increases the pleadings and arguments of the
limitations provided for under Sections there being no prescription or provision parties in these cases, one side,
2 and 3 hereof, impose other in section 42 of B.P. Blg. 232 or composed of the teachers and other
requirements and limitations as he may elsewhere in the law. They furthermore employees of the private schools, insist
deem proper and reasonable. aver that the disputed MECS Order on the applicability of section 3(a) of
which imposed additional burdens Pres. Dec. No. 451 as interpreted arid
The power does not allow the inclusion
against the 60% incremental proceeds applied in the University of the East,
of other items in addition to those for
of tuition fee increases are not provided University of Pangasinan and St Louis
which 60% of the proceeds of tuition fee
in either Pres. Dec. No. 451 or B.P. Blg. University cases, while the private
increases are allocated under Section
232. The logical result as intimated by schools uphold the view that the matter
3(a) of the Decree.
petitioners is that the inclusion of of allocating the incremental proceeds
Rules and regulations promulgated in paragraph 7.4 and related paragraphs from tuition fee increases is governed
accordance with the power conferred 7 to 7.3 and 7.5 in the questioned by section 42 of B.P. Blg. 232 as
by law would have the force and effect MECS order contravenes the statutory implemented by the MECS Rules and
of law [Victorias Milling Company, Inc. authority granted to the public Regulations. As stated, the latter's
v. Social Security Commission, 114 respondent, and the same are argument is premised on the allegation
Phil. 555 (1962)] if the same are therefore, void. that B.P. Blg. 232 impliedly repealed
germane to the subjects of the Pres. Dec. No. 451.
Respondent PACU takes the contrary
legislation and if they conform with the
view contending that MECS Order No. On the second sub-issue, therefore,
standards prescribed by the same law
25, s. 1985, complies with the mandate this Court upholds the view taken by the
[People v. Maceren, G.R. No. L-32166,
of section 42 of B.P. Blg. 232 which law Solicitor General in the Fabros case,
October 18, 1977, 79 SCRA 450]. Since
had already repealed Pres. Dec. No. that the decisive issue is whether B.P.
the implementing rules and regulations
451. PACU notes that the University of Blg. 232 has repealed Pres. Dec. No.
cited by the private schools adds
the East case invoked by petitioners is 451.
allowances and other benefits to the
not applicable because the issue in that
items included in the allocation of 60% In recognition of the vital role of private
case does not involve the effect of B.P.
of the proceeds of tuition fee increases schools in the country's educational
Blg. 232 on Pres. Dec. No. 451.
expressly provided for by law, the same system, the government has provided
were issued in excess of the rule- The Solicitor General, representing the measures to regulate their activities. As
making authority of said agency, and public respondent, after giving a early as March 10, 1917, the power to
therefore without binding effect upon summary of the matters raised by inspect private schools, to regulate their
the courts. At best the same may be petitioner and respondent PACU, activities, to give them official permits to
Page 37 of 59 Week 3 Cases (Labor Law Review) | amgisidro

operate under certain conditions and to whereas B.P. Blg. 232 gives the MECS increases in fees and charges, whereas
revoke such permits for cause was discretion to determine the application under B.P. Blg. 232, the collection and
granted to the then Secretary of Public or use of the increments. Third, the application or use of rates and charges
Instruction by Act No. 2706 as extent of the application or use of the adopted by the school are subject to
amended by Act No. 3075 and increment under Pres. Dec. No. 451 is rules and regulations promulgated by
Commonwealth Act No. 180. Republic fixed at the pre-determined percentage the Ministry of Education, Culture and
Act No. 6139, enacted on August 31, allocations; 60% for wage and salary Sports without any mention of the
1970, provided for the regulation of increases, 12% for return in investment statutory limitations on the application
tuition and other fees charged by and the balance of 28% to institutional or use of the fees or charges. The
private schools in order to discourage development, student assistance and authority granted to private schools to
the collection of exorbitant and extension services, while under B.P. determine its rates of tuition and
unreasonable fees. In an effort to Blg. 232, the extent of the allocation or unconditional authority vested in the
simplify the "cumbersome and time use of the increment is likewise left to Ministry of Education, Culture and
consuming" procedure prescribed the discretion of the MECS. Sports to determine by rules and
under Rep. Act No. 6139 and "to regulations the collection and
The legislative intent to depart from the
alleviate the sad plight of private application or use of tuition or fees rates
statutory limitations under Pres. Dec.
schools," Pres. Dec. No. 451 was and charges under B.P. Big. 232
No. 451 is apparent in the second
enacted on May 11, 1974. While this constitute substantial and irreconcilable
sentence of section 42 of B.P. Blg. 232.
later statute was being implemented, incompatibility with the provisions of
Pres. Dec. No. 451 and section 42 of
the legislative body envisioned a P.D. No. 451, which should be for that
B.P. Blg. 232 which cover the same
comprehensive legislation which would reason deemed to have been
subject matter, are so clearly
introduce changes and chart directions abrogated by the subsequent
inconsistent and incompatible with
in the educational system, hence, the legislation.
each other that there is no other
enactment of B.P. Blg. 232. What then
conclusion but that the latter repeals the Moreover, B.P. Blg. 232 is a
was the effect of B.P. Blg. 232 on Pres.
former in accordance with section 72 of comprehensive legislation dealing with
Dec. No. 451?
B.P. Blg. 232 to wit: the establishment and maintenance of
The Court after comparing section 42 of an integrated system of education and
Sec. 72. Repealing clause. All laws
B.P. Blg. 232 and Pres. Dec. No. 451, as such, covers the entire subject
or parts thereof inconsistent with any
particularly section 3(a) thereof, finds matter of the earlier law, P.D. No. 451.
provision of this Act shall be deemed
evident irreconcilable differences. The omission of the limitations or
repealed or modified, as the case may
conditions imposed in P.D. No. 451 for
Under Pres. Dec. No. 451, the authority be.
increases in tuition fees and school
to regulate the imposition of tuition and
Opinion No. 16 of the Ministry of Justice charges is an indication of a legislative
other school fees or charges by private
dated January 29, 1985, quoted below, intent to do away with the said
schools is lodged with the Secretary of
supports the above conclusion: limitations or conditions.
Education and Culture (Sec. 1), where
(Crawford, supra, p. 674). It has also
section 42 of B.P. Blg. 232 liberalized Both P.D. No. 451 and B.P. Blg. 232
been said that
the procedure by empowering each deal with the imposition of tuition and
private school to determine its rate of other school fees or charges and their an act which purports to set out in full all
tuition and other school fees or use and application, although the latter that it intends to contain, operates as a
charges. is broader in scope as it covers other repeal of anything omitted which was
aspects of the education system. We contained in the old act and not
Pres. Dec. No. 451 provides that 60%
note substantial differences or included in the amendatory act."
of the incremental proceeds of tuition
inconsistencies between the provisions (People vs. Almuete 69 SCRA 410;
fee increases shall be applied or used
of the two laws. P.D. No. 451 prescribes People vs. Adillo 68 SCRA 90) (Ministry
to augment the salaries and wages of
certain limitations in the increase of of Justice, Op. No. 16, s. 1985).
members of the faculty and other
tuition and other school fees and their
employees of the school, while B.P. Having concluded that under B.P. Big.
application, whereas the latter law, B.P.
Blg. 232 provides that the increment 232 the collection and application or
Blg. 232 s silent on the matter. Under
shall be applied or used in accordance use of tuition and other school fees are
P.D. 451, rates of tuition/school fees
with the regulations promulgated by the subject only to the limitations under the
need prior approval of the Secretary of
MECS. rules and regulations issued by the
Education, Culture (now Minister of
Ministry, the crucial point now shifts to
A closer look at these differences leads Education, Culture and Sports), who
the said implementing rules.
the Court to resolve the question in also determines the reasonable rates
favor of repeal. As pointed out by the for new school fees, whereas under The guidelines and regulations on
Solicitor General, three aspects of the B.P. Blg. 232, each private school tuition and other school fees issued
disputed provisions of law support the determines its rate of tuition and other after the enactment of B.P. Blg. 232
above conclusion. First, the legislative school fees or charges. P.D. No. 451 consistently permit the charging of
authority under Pres. Dec. No. 451 authorizes the Secretary of Education allowances and other benefits against
retained the power to apportion the and Culture to issue requisite rules and the 60% incremental proceeds. Such
incremental proceeds of the tuition fee regulations to implement the said was the tenor in the MECS Order No.
increases; such power is delegated to Decree and for that purpose, he is 23, s. 1983; MECS Order No. 15, s.
the Ministry of Education and Culture empowered to impose other 1984; MECS Order No. 25, s. 1985;
under B.P. Blg. 232. Second, Pres. requirements and limitations as he may MECS Order No. 22, s. 1986; and
Dec. No. 451 limits the application or deem proper and reasonable in addition DECS Order No. 37, s. 1987. The
use of the increment to salary or wage to the limitations prescribed by the pertinent portion of the latest order
increase, institutional development, Decree for increases in tuition fees and reads thus:
student assistance and extension school charges, particularly, the
services and return on investment, limitations imposed in the allocation of
Page 38 of 59 Week 3 Cases (Labor Law Review) | amgisidro

In any case of increase at least sixty v. Auditor General, G. R. No. L-23825, The standard may be either expressed
percent (60%) of the incremental December 24, 1965]. or implied. If the former, the non-
proceeds should be allocated for delegation objection is easily met. The
The Education Act of 1982 is "an act
increases in or provisions for salaries or standard though does not have to be
providing for the establishment and
wages, allowances and fringe benefits spelled out specifically. It could
maintenance of an integrated system
of faculty and other staff, including be implied from the policy and purpose
for education " with the following basic
accruals to cost of living allowance, of the act considered as a whole. In the
policy:
13th month pay, social security, Reflector Law, clearly the legislative
medicare and retirement contribution It is the policy of the State to establish objective is public safety. What is
and increases as may be provided in and maintain a complete, adequate and sought to be attained as in Calalang v.
mandated wage orders, collective integrated system of education relevant Williams is "safe transit upon the
bargaining agreements or voluntary to the goals of national development. roads." (Italics supplied).
employer practices. Toward this end, the government shall
Thus, in the recent case of Tablarin et
ensure, within the context of a free and
The validity of these orders, particularly al. v. Hon. Gutierrez, et al. (G.R. No.
democratic system, maximum
MECS Order No. 25, s. 1985, is 78164, July 31, 1987], the Court held
contribution of the educational system
attacked on the ground that the that the necessary standards are set
to the attainment of the following
additional burdens charged against ". . forth in Section 1 of the 1959 Medical
national development goals:
. the 60% of the proceeds of the Act, i.e., "the standardization and
increases in tuition fees constitute both 1. To achieve and maintain an regulation of medical education" as well
as [sic] an excess of statutory authority accelerating rate of economic as in other provisions of the Act.
and as (sic) a substantial impairment of development and social progress; Similarly, the standards to be complied
the accrued, existing and protected with by Minister of Education in this
2. To assure the maximum participation
rights and benefits of the members of case may be found in the various
of all the people in the attainment and
faculty and non-academic personnel of policies set forth in the Education Act of
enjoyment of the benefits of such
private schools." Memorandum for 1982.
growth; and
Petitioners, Rollo, p. 1911. Petitioners
MECS Order No. 25, s. 1985 touches
alleged that these additional burdens 3. To achieve and strengthen national
upon the economic relationship
under the MECS Order are not provided unity and consciousness and preserve,
between some members and elements
in the law itself, either in section 42 of develop and promote desirable cultural,
of the educational community, i.e., the
B.P. Blg. 232 or section 3(a) of Pres. moral and spiritual values in a changing
private schools and their faculty and
Dec. No. 451, except increases in world.
support staff. In prescribing the
salaries in the latter provision. The State shall promote the right of minimum percentage of tuition fee
Section 42 of B.P. Blg. 232 grants to the every individual to relevant quality increments to be applied to the salaries,
Minister of Education (now Secretary of education, regardless of sex, age, allowances and fringe benefits of the
Education) rule-making authority to fill creed, socioeconomic status, physical faculty and support staff, the Act affects
in the details on the application or use and mental conditions, racial or ethnic the economic status and the living and
of tuition fees and other school charges. origin, political or other affiliation. The working conditions of school personnel,
In the same vein is section 70 of the State shall therefore promote and as well as the funding of the private
same law which states: maintain equality of access to schools.
education as well as the enjoyment of
SEC. 70. Rule-making Authority. The policies and objectives on the
the benefits of education by all its
The Minister of Education, Culture welfare and interests of the various
citizens.
and Sports charged with the members of the educational community
administration and enforcement of this The State shall promote the right of the are found in section 5 of B.P. Blg. 232.
Act, shall promulgate the necessary nation's cultural communities in the which states:
implementing rules and regulations. exercise of their right to develop
SEC. 5. Declaration of Policy and
themselves within the context of their
Contrary to the petitioners' insistence Objectives. It is likewise declared
cultures, customs, traditions, interests
that the questioned rules and government policy to foster, at all times,
and belief, and recognizes education as
regulations contravene the statutory a spirit of shared purposes and
an instrument for their maximum
authority granted to the Minister of cooperation among the members and
participation in national development
Education, this Court finds that there elements of the educational
and in ensuring their involvement in
was a valid exercise of rule-making community, and between the
achieving national unity. (Section 3,
authority. community and other sectors of society,
Declaration of Basic Policy).
in the realization that only in such an
The statutory grant of rule-making
With the foregoing basic policy as well atmosphere can the true goals and
power to administrative agencies like
as, specific policies clearly set forth in objectives of education be fulfilled.
the Secretary of Education is a valid
its various provisions, the Act is
exception to the rule on non-delegation Moreover, the State shall:
complete in itself and does not leave
of legislative power provided two
any part of the policy-making, a strictly 1. Aid and support the natural right and
conditions concur, namely: 1) the
legislative function, to any duty of parents in the rearing of the
statute is complete in itself, setting forth
administrative agency. youth through the educational system.
the policy to be executed by the
agency, and 2) said statute fixes a Coming now to the presence or 2. Promote and safeguard the welfare
standard to which the latter must absence of standards to guide the and interests of the students by defining
conform [Vigan Electric Light Co., Inc. Minister of Education in the exercise of their rights and obligations, according
v. Public Service Commission, G.R. No. rule-making power, the pronouncement them privileges, and encouraging the
L-19850, January 30, 1964, and Pelaez in Edu v. Ericta [G.R. No. L-32096, establishment of sound relationships
October 24, 1970, 35 SCRA 481, 497] between them and the other members
is relevant: of the school community.
Page 39 of 59 Week 3 Cases (Labor Law Review) | amgisidro

3. Promote the social and economic which allocates one-half (1/2) of the participate in the proceedings below
status of an school personnel, uphold 90% portion of the proceeds or 45% to which led to the issuance of the
their rights, define their obligations, and increases in the monthly basic salaries assailed Order.
improve their living and working and the other one-half (1/2) or 45% to
This Court finds merit in the
conditions and career prospects. increases in monthly living allowance.
respondents' objection. Under Rule 65
4. Extend support to promote the The petitioners in the two cases seek of the Rules of Court (Secs. 1 and 2),
viability of those institutions through the nullification of the MOLE Order for only a person aggrieved by the act or
which parents, students and school exactly opposite reasons. In proceeding in question may file a
personnel seek to attain their the Biscocho case, the controversy petition for certiorari and/or prohibition.
educational goals. springs from what petitioners perceive The Valmonte petition fails to indicate
to be a diminution of the benefits to be how the petitioners would be aggrieved
On the other hand, the policy on the
received by the school employees by the assailed Order. It appears that
funding of schools in general, are laid
insofar as the CBA allocates only 45% the petitioners are not parties and never
down in section 33:
for salary increases instead of 60%, at any time intervened in the
SEC. 33. Declaration of Policy. It is which petitioners claim to be the portion conciliation conferences and arbitration
hereby declared to be a policy of the set aside by Pres. Dec. No. 451 for that proceedings before the respondent
State that the national government shall purpose. Parenthetically, the case Minister. The parties therein, who stand
contribute to the financial support of questions the allocation of the to be directly affected by the Order of
educational programs pursuant to the remaining 45% of the 90% economic the respondent Minister, do not contest
goals of education as declared in the package under the CBA, to allowances. the validity of said Order. The petition
Constitution. Towards this end, the Stripped down to its essentials, the does not even state that petitioners act
government shall: question is whether or not the 90% as representative of the parents'
portion of the proceeds of tuition fee association in the School or in behalf of
1. Adopt measures to broaden access
increases alloted for the economic other parents similarly situated.
to education through financial
package may be allocated for both
assistance and other forms of If indeed, petitioners Valmonte and
salary increases and allowances.
incentives to schools, teachers, pupils Badiola are aggrieved by the said
and students; and On the other hand, petitioners in Order, they should have intervened and
the Valmonte case believe that the moved for a reconsideration of
2. Encourage and stimulate private
MOLE cannot order the execution of a respondent Minister's Order before
support to education through, inter alia,
CBA which would allocate more than filing the instant petition. Petitioners
fiscal and other assistance measures.
60% of the proceeds of tuition fee failed to show that the case falls under
Given the abovementioned policies and increases for salary increases of school any one of the recognized exceptions to
objectives, there are sufficient employees. Furthermore, petitioners the rule that a motion for
standards to guide the Minister of question the authority of the then reconsideration should first be availed
Education in promulgating rules and Minister of Labor and Employment to of before filing a petition for certiorari
regulations to implement the provisions issue the aforequoted Order insofar as and prohibition.
of the Education Act of 1982, As in this allocates the tuition fee increases of
the Ericta and Tablarin cases, there is In view of the foregoing, the resolution
the respondent private school.
of the third sub-issue will be based
sufficient compliance with the According to them, only the Minister of
mainly on the arguments raised in
requirements of the non-delegation Education, Culture and Sports has the
the Biscocho case.
principle. authority to promulgate rules and
regulations on the use of tuition fees RESOLUTION OF THE THIRD SUB-
THIRD SUB-ISSUE
and increases thereto, pursuant to the ISSUE
C. Whether or not schools and their provisions of B.P. Blg. 232. They further The Biscocho case involves the issue
employees may enter into a collective argue that the assailed Order collides
on the allocation of the incremental
bargaining agreement allocating more with the provisions of Pres. Dec. No.
proceeds of the tuition fee increases
than 60% of said incremental proceeds 451 insofar as it allocates 90% of the
applied for by the respondent Espiritu
for salary increases and other benefits tuition fee increases for salary
Santo Parochial School for school
of said employees. adjustments of the members of the
years 1985-1986, 1986-1987, and
1. Arguments raised in the Biscocho bargaining unit which exceeds the 60%
1987-1988. With the repeal of Pres.
and Valmonte cases of the said increases allocated by the
Dec. No. 451 by B.P. Blg. 232, the
Decree for the same purpose.
Assailed by the petitioners in allocation of the proceeds of any
the Biscocho and the Valmonte cases Before delving further into the questions authorized tuition fee increase must be
is the Order of the respondent Minister raised, this Court notes that in governed by specific rules and
of Labor directing the execution of a the Valmonte case, respondent regulations issued by the Minister (now
CBA between the school and the Minister and respondent Faculty Secretary) of Education pursuant to his
respondent Espiritu Santo Parochial Association raise a procedural broadened rule making authority under
School Faculty Association which objection to the filing of the Petition: the section 42 of the new law. Thus, insofar
provides for an economic package standing of the petitioners to bring this as the proceeds of the authorized
equivalent to 90% of the proceeds of suit. Both respondents decry the tuition fee increases for school year
tuition fee increases for school year petitioners' lack of the interest required 1985-1986 are concerned, the
1985-1986, another 90% for school in Rule 65 of the Rules of Court for the allocation must conform with the
year 1986-1987 and 85% for school filing of the Petition for certiorari and pertinent section of MECS Order No.
year 1987-1988. Pursuant to said Prohibition, since the latter do not 25, s. 1985, to wit:
Order, petitioners in the Biscocho case appear to be in any way aggrieved by
7. Application or Use of Tuition and
alleged that the parties had agreed to the enforcement of the Order. Other School Fees or Charges.
incorporate in their CBA a provision Petitioners-parents did not even
xxx xxx xxx
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7.4. Not less than sixty (60) percent of as 90% for salaries and allowances and petitioner were present. Furthermore,
the incremental tuition proceeds shall other benefits. This is not in anyway to the petitioner's position paper
be used for salaries or wages, allow diminution or loss of the portion submitted to the committee reflects that
allowances and fringe benefits of allotted for institutional development of in all the deliberations, it was never
faculty and support staff, including cost the school concerned. Thus, paragraph denied the right to present evidence
of living allowance, imputed costs of 7.5 of MECS Order No. 25, series of and be heard on all the issues raised,
contributed services, thirteenth (13th) 1985 specifically provides that other particularly to demonstrate that it had
month pay, retirement fund student fees and charges like complied with the various COLA, 13th
contributions, social security, medicare, registration, library, laboratory or month pay and service incentive leave
unpaid school personnel claims, and athletic fees shall be used exclusively decrees. The evidence presented
payments as may be prescribed by for the purposes indicated. during the conferences and the position
mandated wage orders, collective paper of the parties were made the
III RESOLUTION OF THE SPECIFIC
bargaining agreements and voluntary basis of the committee's report and
ISSUES
employer practices: Provided, That recommendation which in turn became
increases in fees specifically authorized CEBU INSTITUTE OF TECHNOLOGY the basis of the order of the Minister of
for the purposes fisted in paragraph CASE Labor directing the petitioner to pay the
4.3.3 hereof shall be used entirely for complainants their COLA and service
Petitioner assigns three other errors in
those purposes. incentive leave benefits.
the petition for certiorari:
xxx xxx xxx It could not therefore be contended that
1
the petitioner was deprived of his right
With regard to the proceeds of the
RESPONDENT MINISTER OF THE to be heard when it appears on the
tuition fee increases for school year
MINISTRY OF LABOR AND record that it was permitted to ventilate
1986-1987, the applicable rules are
EMPLOYMENT COMMITTED GRAVE its side of the issues. There was
those embodied in MECS Order No. 22,
ABUSE OF DISCRETION sufficient compliance with the
s. 1986 which made reference to MECS
AMOUNTING TO A DENIAL OF DUE requirements of due process. In the
Order No. 25, s. 1985, the pertinent
PROCESS OF LAW IN DIRECTLY face of the well- settled principle that
portion of which is quoted above.
ISSUING THE ORDER DATED administrative agencies are not strictly
Finally, as to the proceeds of the tuition SEPTEMBER 29,1981 WITHOUT bound by the technical rules of
fee increases for school year 1987- CONDUCTING A FORMAL procedure, this Court dismisses the
1988, DECS Order No. 37, s. 1987 INVESTIGATION AND ARBITRATION petitioner's claim that formal
must apply: PROCEEDINGS. investigative and arbitration
c. Allocation of lncremental Proceeds 2 proceedings should be conducted.
"While a day in court is a matter of right
(1) In any case of increase at least sixty PUBLIC RESPONDENT ERRED IN in judicial proceedings, in
percent (60%) of the incremental NOT DECLARING THAT PETITIONER administrative proceedings it is
proceeds should be allocated for IS EXEMPTED AND/OR NOT otherwise since they rest upon different
increases in or provisions for salaries or OBLIGED TO PAY SERVICE principles." [Cornejo v. Gabriel and
wages, allowances and fringe benefits INCENTIVE LEAVE. Provincial Board of Rizal, 41 Phil. 188
of faculty and other staff, including (1920); Tajonera v. Lamaroza, G.R.
3
accruals to cost of living allowance, Nos. L-48907 and L-49035, December
13th month pay, social security, PUBLIC RESPONDENT ERRED IN 19,1981, 110 SCRA 438].
medicare and retirement contributions NOT DECLARING THAT PRIVATE
RESPONDENTS' CLAIMS FOR COLA 2. Going now to the matter of service
and increases as may be provided in
AND SERVICE INCENTIVE LEAVE incentive leave benefits, petitioner
mandated wage orders, collective
ARE FULLY BARRED BY LACHES claims that private respondents are
bargaining agreements or voluntary
AND/OR EXTINGUISHED BY engaged by the school on a contract
employer practices.
PRESCRIPTION. basis as shown by the individual
(2) Provided, that in all cases of teachers contract which defines the
increase the allocation of the 1. Petitioner assails the Order of the nature, scope and period of their
incremental proceeds shall be without Minister of Labor on the ground that the employment; hence, they are not
prejudice to the Supreme Court cases same was issued without the benefit of entitled to the said benefit according to
on the interpretation and applicability of a hearing and was merely based on the Rule V of the Implementing Rules and
existing legislations on tuition and other report of the labor management Regulations of the Labor Code to wit:
fees especially on the allocation and committee which is allegedly without
power to pass upon the issues raised. Sec. 1. Coverage. This rule [on
use of any incremental proceeds of
On this premise, petitioner claims that it Service Incentive Leave] shall apply to
tuition and other fees increases.
was denied its right to due process. all employees, except:
(Emphasis supplied).
Petitioner's contention is without merit. xxx xxx xxx
xxx xxx xxx
The Labor Management Committee (d) Field personnel and other
Based on the aforequoted MECS and
was empowered to investigate the employees whose performance is
DECS rules and regulations which
complaint against the petitioner for non- unsupervised by the employer including
implement BP Blg. 232, the 60% portion
payment of the cost of living allowance, those who are engaged on task or
of the proceeds of tuition fee increases
13th month pay and service incentive contract basis, purely commission
may now be allotted for both salaries
leave from 1974-1981 [Annex "F"; basis, or those who are paid in a fixed
and allowances and other benefits. The
Rollo, p. 37]. In the committee, amount for performing work
60% figure is, however,
petitioner was represented by its irrespective of the time consumed in the
a minimum which means that schools
counsel, registrar and assistant performance thereof; (MOLE Rules and
and their employees may agree on a
accountant and in the conferences that Regulations, Rule V, Book III)
larger portion, or in this case, as much
were held, the representatives of the
Page 41 of 59 Week 3 Cases (Labor Law Review) | amgisidro

The phrase "those who are engaged on after November 1, 1974 should be such as payment of wages and other
task or contract basis" should however, initiated within three (3) years from the forms of compensation, working hours,
be related with "field personnel " date of accrual thereof, otherwise the industrial safety, etc. This is provided
applying the rule on ejusdem same shall be deemed extinguished. for in article 128 of the Labor Code, as
generis that general and unlimited Although this particular claim was filed amended:
terms are restrained and limited by the on February 11, 1981, petitioners
Art. 128. Visitorial and enforcement
particular terms that they follow, [Vera herein are entitled to COLA under P.D.
power.
v. Cuevas, G.R. No. L-33693, May 31, 525 from February 1978 up to the
1979, 90 SCRA 379]. Clearly, present since the COLA that accrued in (a) The Secretary of Labor or his duly
petitioner's teaching personnel cannot February 1978 has not yet prescribed at authorized representatives including
be deemed field personnel which refers the time that the claim was filed in labor regulation officers, shall have
"to non-agricultural employees who February 1981. In the same vein, access to employers' records and
regularly perform their duties away from petitioners herein should be granted premises at any time of the day or night,
the principal place of business or COLA under P.D. 1123 from February whenever work is being undertaken
branch office of the employer and 1978 up to 1981 inasmuch as said therein, and the right to copy therefrom,
whose actual hours of work in the field decree became effective only on May to question any employee and
cannot be determined with reasonable 11, 1977. Further, petitioners are investigate any fact, condition or matter
certainty. [Par. 3, Article 82, Labor entitled to the full amount of COLA which may be necessary to determine
Code of the Philippines]. Petitioner's provided under P.D.'s 1614, 1634, 1678 violations or which may aid in the
claim that private respondents are not and 1713. It must be pointed out that enforcement of this Code and of any
entitled to the service incentive leave the earliest of the just cited four (4) labor law, wage order or rules and
benefit cannot therefore be sustained. decrees, i.e., P.D. 1614, just took effect regulations issued pursuant thereto.
on April 1, 1979. Thus, the prescriptive
3. As a last ditch effort to bar private (b) The Secretary of Labor or his duly
period under Art. 292 of the Labor
respondents'claims, petitioner asserts authorized representatives shall have
Code, as amended, does not as yet
that the same are barred by laches the power to order and administer, after
apply to money claims under the just
and/or extinguished by prescription due notice and hearing, compliance
mentioned decrees.
according to Article 291 of the Labor with the labor standards provisions of
Code which provides: DIVINE WORD COLLEGE CASE this Code based on the findings of labor
regulation officers or industrial safety
Art. 291. Money claims. All money In assailing the disputed Order,
engineers made in the course of
claims arising from employer-employee petitioner contends that the public
inspection, and to issue writs of
, relations accruing during the effectivity respondents acted with grave and
execution to the appropriate authority
of this Code shall be filed within three patent abuse of discretion amounting to
for the enforcement of their order,
(3) years from the time the cause of lack of jurisdiction in that:
except in cases where the employer
action accrued; otherwise, they shall be
1. The Regional Director has no contests the findings of the labor
forever barred.
jurisdiction over money claims arising regulations officer and raises issues
All money claims accruing prior to the from employer-employee relationship; which cannot be resolved without
effectivity of this Code shall be filed with and considering evidentiary matters that are
the appropriate entities established not verifiable in the normal course of
2. The Regional Director and Deputy
under this Code within one (1) year inspection. (Emphasis supplied).
Minister of Labor adopted the report of
from the date of effectivity, and shall be
the Labor Standards Division without Furthermore, Policy Instruction No. 6
processed or determined in accordance
affording the petitioner the opportunity which deals with the distribution of
with implementing rules and regulations
to be heard. jurisdiction over labor cases restates
of the Code; otherwise, they shall be
inter alia that "(L)abor standards cases
forever barred. 1. Petitioner school claims that the case
arising from violation of labor standards
at bar is a money claim and should
xxx xxx xxx laws discovered in the course of
therefore be within the original and
inspection or complaints where
Considering that the complaint alleging exclusive jurisdiction of the Labor
employer-employee relations still exist"
non-payment of benefits was filed only Arbiter pursuant to article 217 of the
are under the exclusive original
on February 11, 1981, petitioner argues Labor Code, as amended.
jurisdiction of the Regional Director.
that prescription has already set in.
It appears from the record, however,
Even assuming that respondent
From the aforequoted provision, it is not that the original complaint filed by ten
Regional Director was without
fully accurate to conclude that the entire (10) faculty members of the Divine
jurisdiction to entertain the case at bar,
claims for COLA and service incentive Word College was for non-compliance
petitioner is now barred at this stage to
leave are no longer recoverable. This with Pres. Dec. No. 451 and with Labor
claim lack of jurisdiction having actively
Court finds no reason to disturb the Code provisions on service incentive
participated in the proceedings below.
following pronouncement of the leave, holiday and rest day pay and
Petitioner never questioned the
Minister of Labor: which complaint specifically prayed that
jurisdiction of the respondent Regional
an inspection of the College be
xxx xxx xxx Director.
conducted.
Simply stated, claims for COLA under 2. The petitioner claims that it was
Contrary to the petitioner's protestation
P.D. 525, which took effect on August never afforded the opportunity to be
of lack of jurisdiction, the Secretary of
1, 1974, for the months of August, heard and was therefore denied due
Labor or his duly authorized
September and October 1974 must be process.
representatives (which includes
filed within one (1) year from November
Regional Directors) are accorded the There is no dispute that an inspection of
1, 1974, otherwise they shall be
power to investigate complaints for non- the College was conducted after a
considered prescribed; claims under
compliance with labor laws, particularly complaint by some faculty members
the same decree that accrued on or
those which deal with labor standards was filed with the Regional Office of the
Page 42 of 59 Week 3 Cases (Labor Law Review) | amgisidro

Ministry of Labor and Employment. A their employees receiving a basic The University's answer to the Union's
report was submitted on the basis of the salary of not more than Pl,000 a month, claim of underpayment of the 13th
findings contained therein. Petitioner regardless of the nature of the month pay is that the "transportation
was furnished a copy of said report to employment, a 13th- month pay" (Sec. allowance" paid to its employees
which it filed a comment. Finding this to 1). However, "employer[s] already partakes the nature of a mid-year bonus
be without merit, the Regional Director paying their employees a 13th-month which under section 2 of Pres. Dec. No.
issued an order giving petitioner ten pay or its equivalent are not covered" 851 and section 3(c) of the
(10) days to manifest its compliance (Sec. 2). (Emphasis supplied) Implementing Rules and Regulations is
with the findings, otherwise, another equivalent to the 13th month pay,
The Rules and Regulations
would be issued to enforce payment.
Implementing Pres. Dec. No. 851 The Labor Arbiter ordered FEU to pay
Petitioner appealed but instead of
provide the following: the 13th month pay differentials of the
resolving the memorandum of appeal,
complainants reasoning that:
which the Regional Director treated as SEC. 3. Employees. The Decree
a motion for reconsideration, said shall apply to all employers except to: ... CLEARLY, transportation allowance
Director issued another Order dated cannot be considered as equivalent" of
c) Employers already paying their
August 2, 1983 directing the payment of 13th month pay as it is neither a
employees 13th-month or more in a
the employees' share in the sixty (60%) Christmas bonus, mid-year bonus,
calendar year or its equivalent at the
percent incremental proceeds. profit sharing payment, or other cash
time of this issuance; ...
Petitioner moved for a reconsideration bonuses, pursuant to paragraphs (c)
of the latest order which the Regional xxx xxx xxx and (e), Section 3 of PD 851. The
Director, however, denied, thereby regularity of its payment further
The term "its equivalent" as used in
elevating the case to the Office of the cements this proposition.
paragraph (c) hereof shall include
Minister of Labor and Employment. Christmas bonus, mid-year bonus, PERFORCE, complainants are
The foregoing facts demonstrate that profit-sharing payments and other cash underpaid of their 13th month pay in an
petitioner had the opportunity to refute bonuses amounting to not less than amount equivalent to 50% of their basic
the report on the inspection conducted. 1/12th of the basic salary but shall not salary for the lst year of service, plus
It submitted a comment thereto, which include cash and stock dividends, cost additional 5% every year thereafter but
was in effect its position paper. The of living allowances and all other not to exceed 100% of their basic salary
arguments therein and evidence allowances regularly enjoyed by the which, per respondent's formula,
attached thereto were considered by employer, as well as non-monetary corresponds to their transportation
respondent Regional Director in the benefits. Where an employer pays less allowance. (Rollo, p. 61).
order issued subsequently. They, than 1/1 2th of the employees basic
On appeal, the Third Division of the
therefore, had ample opportunity to salary, the employer shall pay the
National Labor Relations Commission
present their side of the controversy. difference.
reversed the Labor Arbiter's ruling by
What due process contemplates is not In the case at bar, the 13th month pay dismissing the complainant's claim for
merely the existence of an actual is paid in the following manner: underpayment of the 13th month pay
hearing. The "right to be heard" focuses for lack of merit. The NLRC ruled that:
FOR REGULAR EMPLOYEES:
more on the substance rather than the
Transportation Allowance (TA) From the above findings and
form. In the case at bar, petitioner was
conclusion, it is clear that insofar as
actually heard through the pleadings 50% of basic for the first year of service employees with ten (10) years of
that it filed with the Regional Office V. plus additional 5% every year thereafter service or more are concerned, they
As it itself admitted in its petition that it but not to exceed 100% of basic salary receive the equivalent of one (1) month
was afforded the right to be heard on
Christmas Bonus (CB) pay for Christmas bonus and another
appeal [See Rollo, p. 581, petitioner
one (1) month pay as transportation
cannot therefore insist that it was 50% of basic salary for the first year of allowance or a total of fourteen (14)
denied due process. service plus additional 5% every year months salary in a year. Obviously, this
FAR EASTERN UNIVERSITY CASE thereafter but not to exceed 100% of group of employees are fully paid of
basic salary. their 13th month pay and are not
Two other issues are raised in this
For employees who have served the therefore subject to the instant claim.
petition, to wit:
University for more than 10 years, the As it is only those with less than ten (10)
1 University pays them emoluments years of service are included or
equivalent to the 14 months salaries. encompassed by the Labor Arbiter's
WHETHER OR NOT
resolution on this particular issue. With
'TRANSPORTATION ALLOWANCE' 13th Month Pay Formula: this clarification, we shall now proceed
SHOULD BE CONSIDERED AS
Monthly Rate x No. of to discuss the crux of the controversy,
'EQUIVALENT TO 13TH-MONTH PAY
that is, the determination of whether or
UNDER PRES. DEC. NO. 851. months served for the year not the so designated "transportation
2 Less TA/CB = 13th Mo. pay allowance" being paid to the employees
should be considered among those
WHETHER OR NOT LEGAL HOLIDAY 12 months deemed equivalent to 13th month pay.
PAY BENEFIT COULD BE VALIDLY
FOR CASUAL EMPLOYEES: As adverted earlier, the Labor Arbiter
WITHDRAWN AFTER BEING
opined that it cannot be so considered
PRACTICED CONTINUOUSLY FOR 13th Month Pay Formula: as the equivalent of 13th month pay.
EIGHT (8) MONTHS.
Add salaries from 16 December of xxx xxx xxx
1. The issue on the thirteenth (13th) previous year to 15th December of
month pay involves an interpretation of present year [and] divide by 12 months In passing upon the issue, we deemed
the provisions of Pres. Dec. No. 851 = 13th Mo. Pay (Rollo, pp. 60, 72). it best to delve deeper into the nature
which requires all employers "to pay all and intendment of the transportation
Page 43 of 59 Week 3 Cases (Labor Law Review) | amgisidro

allowances as designated by both the to answer for the daily recurring reaction of one so circumstanced would
complainants and the respondent. transportation expenses of the be to withdraw the bonuses or resist
Complainants claim that the employees, the same should have been further voluntary grants for fear that if
transportation allowance they enjoy has paid to employees on regular periodic and when a law is passed giving the
always been called and termed intervals. All indications, as we see it, same benefits, his prior concessions
allowance and never as bonus since point out to conclusion that the disputed might not be given due credit; and this
the time the same was given to them. transportation allowance, while negative attitude would have an
They assert that it simply was intended dominated as such apparently for lack adverse impact on the employees
as an allowance and not a bonus. It of better term, is in fact a form of bonus (pp.369,370).
would appear however that doled out by the respondent during the
The case of Dole Philippines, Inc. v.
complainants do not dispute month of March every year.
Leogardo [G.R. No. 60018, October 23,
respondent's stand that transportation
Hence, we hold that it is one of those 1982, 117 SCRA 938 (1982)], citing the
allowance is being paid only every
that can very well be considered as ruling in the above case also pointed
March of each year as distinguished
equivalent to the 13th month pay (Rollo, out that:
from other allowances that are being
pp. 73, 74, 75, 76).
paid on a monthly basis or on a To hold otherwise would be to impose
bimonthly basis; that the amount of This Court sustains the aforequoted an unreasonable and undue burden
transportation allowance to be paid is view of public respondent. The benefit upon those employers who had
dependent on the length of service of herein designated as "transportation demonstrated their sensitivity and
the employee concerned (i.e. 50% allowance" is a form of bonus concern for the welfare of their
basic in the first year and additional 5% equivalent to the 13th month pay. employees. A contrary stance would
for each succeeding years, etc.); that Nevertheless, where this does not indeed create an absurd situation
the said method of computing the amount to 1/12 of the employees basic whereby an employer who started
amount of the transportation allowance salary, the employer shall pay the giving his employees the 13th month
to be paid the complainants is Identical difference. pay only because of the unmistakable
to that used in determining Christmas force of the law would be in a far better
The evident intention of the law was to
bonus (respondent's exhibit 8) that the position than another who, by his own
grant an additional income in the form
reason behind said transportation magnanimity or by mutual agreement,
of a 13th month pay to employees not
allowance is to financially assist had long been extending his employees
already receiving the same. This Court
employees in meeting their tax the benefits contemplated under PD
ruled in National Federation of Sugar
obligations as the same become due on No. 851, by whatever nomenclature
Workers (NFSW) v. Ovejera [G.R. No.
or about the month of March of each these benefits have come to be known.
59743, May 31, 1982, 114 SCRA 354].
year. Indeed, PD No. 851, a legislation
Otherwise put, the intention was to benevolent in its purpose, never
xxx xxx xxx
grant some relief not to all workers intended to bring about such
We are inclined to believe and so hold but only to the unfortunate ones not oppressive situation. (p. 944)
that by the manner by which said actually paid a 13th month salary or
2. Presidential Decree No. 570-A was
transportation allowance is being paid what amounts to it, by whatever name
issued on November 1, 1974 amending
(only once a year) as well as the called: but it was not envisioned that a
certain articles of Presidential Decree
method in determining the amount to be double burden would be imposed on
No. 442 (Labor Code of the Philippines
paid (similar to Christmas bonus) and the employer already paying his
promulgated on May 1, 1974 which took
considering further the reason behind employees a 13th month pay or its
effect six months thereafter). Section 28
said payment (easing the burden of equivalent whether out of pure
thereof provides that:
taxpayer-employee), the said generosity or on the basis of a binding
transportation allowance given out by agreement and, in the latter case, Section 28. A new provision is hereby
respondent while designating as such, regardless of the conditional character substituted in lieu of the original
partakes the nature of a mid-year of the grant (such as making the provision of Article 258 of the same
bonus. It bears to note in passing that payment dependent on profit), so long Code to read as follows:
in providing for transportation as there is actual payment. Otherwise,
Art. 258. Right to holiday pay-
allowance, respondent was not what was conceived to be a 13th month
compelled by law nor by the CBA salary would in effect become a 14th or (a) Every worker shall be paid his
(Annex "A" of respondent's Appeal) as possibly 15th month pay. regular holidays, except in retail and
nowhere in the CBA nor in the Labor service establishments regularly
xxx xxx xxx
Code can be found any provision on employing less than ten (10) workers;
transportation allowance. It was Pragmatic considerations also weigh
(b) The term "holiday" as used in this
therefore a benefit that stemmed out heavily in favor of crediting both
Chapter, shall include: New Year's day,
purely from the voluntary act and voluntary and contractual bonuses for
Maundy Thursday, Good Friday, the
generosity of the respondent FEU. the purpose of determining liability for
ninth of April, the first of May, the twelfth
Moreover, said transportation the 13th month pay. To require
of June, the fourth of July, the thirtieth
allowance is only being paid once a employers (already giving their
of November, the twenty fifth and
year. On the other hand, regular employees a 13th month salary or its
thirtieth of December and the day
allowances not considered as 13th equivalent) to give a second 13th month
designated by law for holding a general
month pay equivalent under P.D. 851, pay would be unfair and productive of
election.
to our mind, refer to those paid on undesirable results. To the employer
regular intervals and catering for who had acceded and is already bound (c) When employer may require work
specific employees' needs and to give bonuses to his employees, the on holidays. The employer may require
requirements that recur on a regular additional burden of a 13th month pay an employee to work on any holiday but
basis. Verily, if the intendment behind would amount to a penalty for his such employee shall be paid a
the disputed transportation allowance is munificence or liberality. The probable
Page 44 of 59 Week 3 Cases (Labor Law Review) | amgisidro

compensation equivalent twice his eliminate controversies on the 850 and which rules took effect on
regular rate. entitlement of monthly paid employees. February 16, 1976. Hence, his
The new determining rule is this: If the conclusion that the payment of the legal
Presidential Decree No. 850 issued on
monthly paid employee is receiving not holiday pay stemmed out from
December 16, 1975 also amending
less than P 240, the maximum monthly company practice and not from law.
certain articles of Pres. Dec. No. 442
minimum wage, and his monthly pay is Tracing back, however, the payments
adopted the aforequoted provision.
uniform from January to December, he made by respondent of said holiday pay
Two months later, on February 16,
is presumed to be already paid the ten will show that, if ever, the same was
1976, the Rules and Regulations
(10) paid legal holidays. However, if made pursuant to P.D. 570-A which
Implementing the Labor Code, as
deductions are made from his monthly took effect on November 1, 1974.
amended, was released the pertinent
salary on account of holidays in months Noteworthy is the undisputed fact that
portion of which states that:
where they occur, then he is entitled to respondent first paid its employees
Section 2. Status of employees paid by the ten (10) legal holidays. legal holiday pay in June 1975
the month. Employees who are corresponding to nine (9) legal
These new interpretations must be
uniformly paid by the month, holidays. It bears to note that from the
uniformly and consistently upheld.
irrespective of the number of working time of the effectivity of P.D. 570-A
days therein, with a salary of not less This issuance shall take effect which was in November of 1974 up to
than the statutory or established immediately. June of 1975, the time respondent first
minimum wage shall be presumed to be paid legal holiday pay for nine (9) legal
In the meantime, respondent University
paid for all days in the month whether holidays, there, were indeed more or
paid its employees holiday pay for the
worked or not. less nine legal holidays that transpired
following days:
to wit: November 30, 1974, December
For this purpose, the monthly minimum
DATE HOLIDAYS PAID 25, 1974, December 30, 1974, January
wage shall not be less than the
June 9, 1975 for the previous nine legal 1, 1975, February 27, 1975
statutory minimum wage multiplied by
holidays (Referendum Day), Maundy Thursday
365 days divided by twelve.
of 1975, Good Friday of 1975, April 9,
(e) Section 3. Holiday Pay. Every August, 1975 for the previous June 12 1975 and finally, May 1st of 1975. We
employer shall pay his employees their and July 4 are therefore inclined to lend credence
regular daily wage for any unworked to respondent's claim that the payment
Jan. 14, 1976 or the previous Nov. 30,
regular holiday. of legal holiday pay was in fact made
Dec. 25
As used in the Rule, the term 'holiday' pursuant to law, P.D. 570-A in
and 30 and Jan. 1 particular, it is not one that arose out of
shall exclusively refer to: New Year's
Day, Maundy Thursday, Good Friday, After January 14, 1976, however, the company practice or policy.
the ninth of April, the first of May, the University ceased paying the holiday Finding that said payment was made
twelfth of June, the fourth of July, the pay allegedly by reason of Policy based on an honest although erroneous
thirtieth of November, the twenty-fifth Instruction No. 9. Specifically, the interpretation of law, which
and thirtieth of December and the day University claimed that the monthly interpretation was later on corrected by
designated by law for a general election salary of its employees was, as of 1976, the issuance (sic) of Policy Instruction
or national referendum or plebiscite more than P 240.00 without deductions No. 9 and which issuance prompted
(MOLE Rules and Reg. Book III, Rule from their monthly salary on account of respondent to withdraw the holiday pay
IV, sec. 2 (1976). holidays in months where they occurred benefits extended to the employees
and that therefore, by virtue of Policy who were paid on a regular monthly
After one week, on February 23, 1976,
Instruction No. 9, they were no longer basis, and finding further that under
the Minister of Labor issued Policy entitled to the ten paid legal holidays.
Instruction No. 9, to clarify further the Policy Instructions No. 9, said subject
right to holiday pay, thus: Petitioners, upon the other hand, employees are deemed paid their
contend that Policy Instruction No. 9 holiday pay as they were paid on a
The Rules Implementing PD 850 have monthly basis at a wage rate
could not have possibly been the
clarified the policy in the presumably above the statutory
reason that prompted the University to
implementation of the ten (10) paid minimum, we believe and so hold that
withdraw such benefits from its faculty
legal holidays. Before PD 850. the the withdrawal of said holiday pay
and employees because said
number of working days a year in a firm benefit was valid and justifiable under
implementing rule was issued only on
was considered important in the circumstances (Rollo, pp. 33-4).
April 23, 1976 or four months later.
determining entitlement to the benefit.
Thus, where an employee was working The Labor Arbiter ruled in favor of the This Court cannot sustain the foregoing
for at least 313 days, he was definitely complainant Union for the reason that ". decision of public respondent. Said
already paid. If he was working for less . . the payment of the 10-paid legal decision relied on Section 2, Rule IV,
than 313, there was no certainty holiday benefits from June 8, 1975 up Book Ill of the implementing rules and
whether the ten (10) paid legal holidays to January 14, 1976 is considered an on Policy Instruction No. 9 which were
were already paid to him or not. employer practice that can no longer be declared by this Court to be null and
withdrawn." [Decision; Rollo, p. 59]. void in Insular Bank of Asia and
The ten (10) paid legal holidays law, to America Employee's Union (IBAAEU)
start with, is intended to benefit As in the case of the 13th month pay, v. Inciong (G.R. No. 52415, October 23,
principally daily employees. In the case the NLRC reversed the Labor Arbiter's 1984, 132 SCRA 6631. In disposing of
of monthly, only those whose monthly ruling. The NLRC held that: the issue at hand, this Court reiterates
salary did not yet include payment for Apparently, Arbiter Ruben Aquino the ruling in that case, to wit:
the ten (10) paid legal holidays are concluded that payment by the
entitled to the benefit. WE agree with the petitioner's
respondent of the legal holiday pay contention that Section 2, Rule IV, Book
Under the rules implementing PD 850, preceded the effectivity of the Rules Ill of the implementing rules and Policy
this policy has been fully clarified to and Regulations Implementing P.D.
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Instruction No. 9 issued by the then Being outside the coverage of (2) Cost of living allowance under Pres.
Secretary of Labor are nun and void respondent Minister's order, and thus, Dec. Nos. 1614, 1634, 1678 and 1713;
since in the guise of clarifying the Labor not entitled to the economic package and
Code's provision on holiday pay, they in involved therein, employees who are
(3) Service incentive leave due them
fact amended them by enlarging the non- members of the bargaining unit
from 1978.
scope of their exclusion. should not be assessed negotiation
fees, attorney's fees, agency fees and The Temporary Restraining Order
xxx xxx xxx
the like, for the simple reason that the issued by this Court on December 7,
It is elementary in the rules of statutory resulting collective bargaining 1981 is hereby LIFTED and SET
construction that when the language of agreement does not apply to them. It ASIDE. No costs.
the law is clear and unequivocal the law should be clear, however, that while
DIVINE WORD COLLEGE CASE
must be taken to mean exactly what it non-members of the bargaining unit are
says. In the case at bar, the provisions not entitled to the economic package The petition in G.R. No. 68345
of the Labor Code on the entitlement to provided by said order, they are, in lieu is DENIED for lack of merit. The
the benefits of holiday pay are clear and thereof, still entitled to their share in the questioned Orders of respondent
explicit it provides for both the 60% incremental proceeds of increases Deputy Minister of Labor and
coverage of and exclusion from the in tuition or other school fees or Employment, dated December 19,
benefits. In Policy Instruction No. 9, the charges. 1983 and July 4, 1984
then Secretary of Labor went as far as are SUSTAINED insofar as said Orders
As far as assessment of fees against
to categorically state that the benefit is denied the payment of the emergency
employees of the collective bargaining
principally intended for daily paid cost of living allowances of private
unit who are not members of the
employees, when the law clearly states respondents faculty teachers of the
collective bargaining agent is
that every worker shall be paid their Divine Word College of Legazpi out of
concerned, Article 249 of the Labor
regular holiday pay. This is a flagrant the sixty (60%) incremental proceeds of
Code, as amended by B.P. Blg. 70,
violation of the mandatory directive of tuition and other school fee increases
provides the rule:
Article 4 of the Labor Code, which collected during the effectivity of Pres.
states that "All doubts in the Art. 249. Unfair labor practices of Dec. No. 451. The Rules and
implementation and interpretation of employers.- Regulations implementing Pres. Dec.
the provisions of this Code, including its No. 451 are hereby declared invalid for
xxx xxx xxx
implementing rules and regulations, being ultra vires No costs.
shall be resolved in favor of labor. " (e) ... Employees of an appropriate
FAR EASTERN UNIVERSITY CASE
Moreover, it shall always be presumed collective bargaining unit who are not
that the legislature intended to enact a members of the recognized collective The Decision of public respondent
valid and permanent statute which bargaining agent may be assessed a National Labor Relations Commission
would have the most beneficial effect reasonable fee equivalent to the dues dated September 18, 1984
that its language permits (Orlosky vs. and other fees paid by members of the is REVERSED insofar as it affirmed in
Haskell, 155 A. 112). (pp. 673-4). recognized collective bargaining agent, toto the dismissal of petitioner Far
if such non- union members accept the Eastern University Employee Labor
BISCOCHO CASE
benefits under the collective agreement Union's claim under Pres. Dec. No. 451
At issue also in this petition is whether ... and its claim for payment of holiday
the 60% incremental proceeds may be pay. Private respondent Far Eastern
Employees of the collective bargaining
subjected to attorney's fees, negotiation University is therefore ordered to pay its
unit who are not members of the
fees, agency fees and the like. employees the following:
collective bargaining agent have to pay
The Court notes the fact that there are the foregoing fees if they accept the (1) Their sixty (60) percent share in the
two classes of employees among the benefits under the collective bargaining increases in tuition and other school
petitioners: (1) those who are members agreement and if such fees are not fees or charges which shall be allocated
of the bargaining unit and (2) those who unreasonable. Petitioners who are exclusively for increase in salaries or
are not members of the bargaining unit. members of the bargaining unit failed to wages if the tuition or other school fee
The first class may be further show that the equivalent of ten (10%) increase was collected during the
subdivided into two: those who are percent of their backwages sought to be effectivity of Pres. Dec. No. 451;
members of the collective bargaining deducted is unreasonable.
(2) Their claim for holiday pay which
agent and those who are not.
WHEREFORE, the Court rules: was withdrawn since January 14, 1976
It is clear that the questioned Order of up to the present.
CEBU INSTITUTE OF TECHNOLOGY
the respondent Minister applies only to
CASE The Decision of respondent National
members of the bargaining unit. The
Labor Relations Commission, however,
CBA prepared pursuant to said Order, In G.R. No. 58870, the Order of
is SUSTAINED insofar as it denied
however, covered employees who are respondent Minister of Labor and
petitioner's claim for thirteenth (1 3th
not members of the bargaining unit, Employment dated September 29,
month pay. No costs.
although said CBA had not yet been 1981 is SUSTAINED insofar as it
signed at the time this petition was filed ordered petitioner Cebu Institute of FABROS CASE
on November 24, 1986. Assuming it Technology to pay its teaching staff the
In G.R. No. 70832, the Petition for
was signed thereafter, the inclusion of following:
certiorari and Prohibition is
employees outside the bargaining unit DISMISSED. MECS Order No. 25. s.
(1) Cost of living allowance under Pres.
should be nullified as this does not 1985, particularly paragraphs 7.0 to 7.5
Dec.Nos.525 and 1123 from February
conform to said order which directed thereof, which provide for the use and
1978 up to 1981;
private respondents to execute a CBA application of sixty (60%) percent of the
covering only members of the increases in tuition and other school
bargaining unit. fees or charges, having been issued
Page 46 of 59 Week 3 Cases (Labor Law Review) | amgisidro

pursuant to B.P. Blg. 232 which two (2) hours a week in the second. On ordering respondents to pay
repealed Pres. Dec. No. 451, is hereby June 10, 1978 he was appointed as complainant P100,000.00 as and for
declared VALID. The Temporary Instructor III for the school year 1978- actual or compensatory damages,
Restraining Order issued by this Court 79. His load for the first semester was ordering respondents to pay
dated May 29, 1985 eight (8) hours a week, and for the complainant P300,000.00 as and for
is LIFTED and SET ASIDE. No costs. second semester, seven (7) hours a moral damages, and further ordering
week. them to pay complainant P100,000.00
BISCOCHO CASE
as and for exemplary damages.
On March 19, 1979 Dean Gilberto
The assailed portions of the Order of
Gamez observed that Dr. Borja should Finally, respondents are ordered to pay
the Minister of Labor and Employment
not be reappointed based on the to complainant the sum of ten (10%)
dated April 14, 1986 are AFFIRMED.
evaluation sheet that shows his sub- percent of the total sum due as and for
The collective bargaining agreement
standard and inefficient attorney's fees. 3
prepared pursuant thereto should,
performance. 1 Nevertheless in view of
however, be MODIFIED to cover only Hence the instant petition for certiorari
the critical shortage of staff members in
members of the bargaining unit. Only and prohibition with a prayer for the
the Department of Neurology and
petitioners who are members of the issuance of a writ of preliminary
Psychiatry Dr. Gamez recommended
collective bargaining unit, if they accept injunction and restraining order that
the reappointment of Dr. Borja, after
the benefits under the resulting was filed by the UST and its officers
informing the latter of the negative
collective bargaining agreement, shall wherein it is alleged that the public
feedbacks regarding his teaching and
be charged ten (10%) percent of the respondent NLRC committed the
his promise to improve his
payable backwages as negotiation following errors:
performance. Thus on July 27, 1979 he
fees. The Temporary Restraining Order
was extended a reappointment as I
dated November 25, 1986
Instructor III in the school year 1979-80.
is LIFTED and SET ASIDE. No costs. THE HONORABLE NATIONAL LABOR
He was given a load of six (6) hours a
RELATIONS COMMISSION
VALMONTE CASE week. In all these appointments he was
COMMITTED SERIOUS REVERSIBLE
a part time instructor.
The petition in G.R. No. 76596 is ERRORS OF SUBSTANCE
DISMISSED for lack of merit. At the end of the academic year, it AMOUNTING TO GRAVE ABUSE OF
appearing that Dr. Borja had not DISCRETION AND/OR LACK OR
Effective September 1, 1982, the
improved his performance in spite of his EXCESS OF JURISDICTION IN
application and use of the proceeds
assurances of improvement, his FINDING THAT BASILIO E. BORJA
from increases in tuition fees and other
reappointment was not recommended. ACQUIRED TENURE, THE SAID
schools fees or charges shall be
FINDING BEING CLEARLY
governed by section 42 of B.P. Blg. 232 In July, 1982 he filed a complaint in the
CONTRARY TO THE EVIDENCE AT
as implemented by the Rules and National Labor Relations Commission
HAND AND DEVOID OF BASIS IN
Regulations issued by the then Ministry, (NLRC for short) for illegal dismissal
LAW.
now Department of Education, Culture against the UST. After the submission
and Sports. SO ORDERED. of the pleadings and due proceedings II
the labor arbiter rendered a decision on
G.R. No. 85519 February 15, 1990 THE HONORABLE NLRC
July 19, 1984, the dispositive part of
COMMITTED A SERIOUS AND
UNIVERSITY OF STO. TOMAS, FR. which reads as follows:
REVERSIBLE ERROR AND
MAXIMO MARINA O.P. AND WHEREFORE this Office finds in favor GRAVELY ABUSED ITS DISCRETION
GILBERTO L. GAMEZ, petitioners, of the complainant. The respondents IN HOLDING THAT THE SERVICES
vs. (sic) university are hereby ordered to OF BASILIO E. BORJA HAD BEEN
NATIONAL LABOR RELATIONS effect the immediate reinstatement of CONSTRUCTIVELY TERMINATED,
COMMISSION, HONORABLE complainant to his former position with HIS APPOINTMENT HAVING
LABOR ARBITER BIENVENIDO S. full backwages, rights and benefits MERELY LAPSED IN ACCORDANCE
HERNANDEZ AND BASILIO E. appertaining thereto. Respondent WITH ITS TERMS AS ACCEPTED BY
BORJA, respondents. university is likewise ordered to pay the THE COMPLAINANT-APPELLEE
Abad, Leao & Associates for complainant the sum of FIVE BORJA.
petitioners. HUNDRED THOUSAND PESOS
III
(P500,000.00) as and by way of moral
Antonio B. Fidelino for private damages and another 1 0% of the gross THE HONORABLE NLRC
respondent. amount due him, and as and by way of COMMITTED A SERIOUS AND
attorney's fees. GRAVE ERROR IN AFFIRMING,
ALBEIT REDUCING THE AWARD OF
GANCAYCO, J.: Respondents are hereby ordered to
THE HONORABLE LABOR
effect this decision immediately. 2
The herein private respondent Dr. ARBITER A QUO OF CLEARLY
Basilio E. Borja was first appointed as The UST appealed therefrom to the EXCESSIVE, UNJUST,
"affiliate faculty" in the Faculty of NLRC which in due course rendered a UNCONSCIONABLE AND SHOCKING
Medicine and Surgery at the University decision on September 30, 1988, MORAL DAMAGES OF P300,000.00
of Sto. Tomas (UST for short) on modifying the appealed decision as AND IN AWARDING MOTU PROPIO
September 29, 1976. In the second follows: EXEMPLARY DAMAGES IN THE
semester of the school year 1976-77 he AMOUNT OF P100,000.00 IN GRAVE
WHEREFORE, premises considered,
was appointed instructor with a load of ABUSE OF ITS DISCRETION
the appealed decision is hereby
twelve (12) hours a week. He was AMOUNTING TO EXCESS OF
AFFIRMED with a modification limiting
reappointed instructor for the school JURISDICTION. 4
the backwages to three (3) years
year 1977-78 with a load of nine (9) without qualification or deduction, The petition is impressed with merit.
hours a week in the first semester and computed at P660.00 per month,
Page 47 of 59 Week 3 Cases (Labor Law Review) | amgisidro

In the questioned decision of the public during the three (3) years that he hours a week in the second semester;
respondent NLRC it found that private served in the petitioner-university's that in the school year 1978-1979 he
respondent had earned to his credit College of Medicine. Stated otherwise, had a load of eight (8) hours a week in
eight (8) semesters or four (4) the question is (1) whether or not the the first semester and seven (7) hours
academic years of professional duties said respondent's "total working day ..... a week in the second semester; that in
with the UST and that he has met the (was) devoted to the school" and he the school year 1979-1980 he had a
requirements to become a regular had "no other regular remunerative load of six (6) hours a week in each
employee under the three (3) years employment" and was "paid on a semester. This evidence does not
requirement in the Manual of regular monthly basis regardless of the appear to have been refuted at all by
Regulations for Private Schools. number of teaching hours;" and/or (2) the private respondent, and has
whether or not his normal teaching load inexplicably been ignored by public
The appealed decision is correct insofar
was eighteen (18) hours a week. respondent. No discussion of this
as it declares that it is the Manual of
particular point is found in the decisions
Regulations for Private Schools, not the It cannot be said that respondent's total
of the Labor Arbiter or the NLRC.
Labor Code, that determines the working day was devoted to the school
acquisition of regular or permanent alone. It is clear from the record that he The private respondent, therefore,
status of faculty members in an was practising his profession as a could not be regarded as a full- time
educational institution, but the Court doctor and maintaining a clinic in the teacher in any aspect. He could not be
disagrees with the observation that it is hospital for this purpose during the time regarded as such because his total
only the completion of three (3) years of that he was given a teaching load. In working day was not devoted to the
service that is required to acquire such other words, he had another regular school and he had other regular
status. remunerative work aside from teaching. remunerative employment. Moreover,
His total working day was not, his average teaching load was only
According to Policy Instructions No. 11
therefore, devoted to the school. 6.33 hours a week.
issued by the Department of Labor and
Indeed, his salaries from teaching were
Employment, "the probationary In view of the explicit provisions of the
computed by the respondent
employment of professors, instructors Manual of Regulations above-quoted,
Commission itself at only an average
and teachers shall be subject to and the fact that private respondent
of P660.00 per month; he, therefore,
standards established by the was not a full- time teacher, he could
had to have other sources of income,
Department of Education and Culture." not have and did not become a
and this of course was his self-
Said standards are embodied in permanent employee even after the
employment as a practising
paragraph 75 of the Manual of completion of three (3) years of service.
psychiatrist. That the compensation for
Regulations for Private Schools, to wit:
teaching had to be averaged also Having found that private respondent
75. Full time teachers who have shows that he was not paid on a regular did not become a permanent employee
rendered three consecutive years of monthly basis. Moreover, there is of petitioner UST, it correspondingly
satisfactory service shall be considered absolutely no evidence that he follows that there was no duty on the
permanent." (Emphasis supplied) performed other functions for the school part of petitioner UST to reappoint
when not teaching. All things private respondent as Instructor, the
The legal requisites, therefore, for
considered, it would appear that temporary appointment having lapsed.
acquisition by a teacher of permanent
teaching was only a secondary Such appointment is a matter
employment, or security of tenure, are
occupation or "sideline," his addressed to the discretion of said
as follows:
professional practice as a psychiatrist petitioner.
1) the teacher is a full time teacher; being his main vocation.
The findings, therefore, of the public
2) the teacher must have rendered The record also discloses that he never respondent NLRC that private
three (3) consecutive years of service; had a normal teaching load of eighteen respondent was constructively
and (18) hours a week during the time that terminated is without lawful basis. By
he was connected with the university. the same token, the order for
3) such service must have been
satisfactory. The only evidence on this equally vital reinstatement of private respondent
issue was presented by the petitioner with backwages plus an award of actual
Now, the Manual of Regulations also through the affidavit of Dr. Gilberts or compensatory, moral and exemplary
states that "a full-time teacher" is "one Gamez who was the dean of the damages must be struck down.
whose total working day is devoted to medical school during the time material
WHEREFORE, the petition is hereby
the school, has no other regular to the proceedings at bar. His sworn
GRANTED. The questioned orders of
remunerative employment and is paid declaration is to the effect that as
public respondent NLRC dated
on a regular monthly basis regardless "affiliate faculty" member of the
September 13, 1988 and public
of the number of teaching hours" (Par. Department of Neurology and
respondent labor arbiter Bienvenido S.
77); and that in college, "the nominal Psychiatry from September 29,1976,
Hernandez dated July 19,1988 are
teaching load of a full-time instructor private respondent had no teaching
shall be eighteen hours a week" (par. hereby SET ASIDE and another
functions: that in fact, when he was
judgment is hereby rendered
78). appointed in September, 1976, classes
DISMISSING the complaint of private
It follows that a part-time member of the for the first semester were already
respondent, without pronouncement as
faculty cannot acquire permanence in nearing their end; that as "affiliate
to costs.
employment under the Manual of faculty" he was merely an observer
acquainting himself with the functions of SO ORDERED.
Regulations in relation to the Labor
Code. an instructor while awaiting issuance of
G.R. No. 188914 December
a formal appointment as such; that in
Hence, the crucial question is whether 11, 2013
the school year 1977-78 he had a
or not the private respondent was a full- teaching load of nine (9) hours a JOCELYN HERRERA-
time or part-time member of the faculty week in the first semester and two (2) MANAOIS, Petitioner,
Page 48 of 59 Week 3 Cases (Labor Law Review) | amgisidro

vs. Throughout her service as a the following notation at the bottom of


ST. SCHOLASTICA'S probationary full-time faculty member her letter of application "APPROVED:
COLLEGE, Respondent. with no derogatory record, she was on the basis that she finishes her
given above-satisfactory ratings by MA."8 The college clarified that the
DECISION both the Department Chairperson and application for full-time faculty status of
SERENO, CJ.: the Dean of Arts and Sciences. Manaois was accepted with the specific
qualification that she would submit the
The present case concerns the Because of the forthcoming completion
necessary papers pertaining to her
academic qualifications required in of her third year of probationary
masters degree. It stressed that
attaining the status of a permanent full- employment, Manaois wrote the Dean
permanency may only be extended to
time faculty member in the tertiary level of Arts and Sciences requesting an
full-time faculty members if they had
of a private educational institution. extension of her teaching load for the
fulfilled the criteria provided in the SSC
Petitioner Jocelyn Herrera-Manaois school year 2003-2004. She again
Faculty Manual. According to SSC, the
(Manaois) assails the judgments1 of the mentioned in her letter that she was a
Chair of the English Department did not
Court of Appeals (CA), which reversed candidate for a masters degree in
endorse the application for permanency
the Resolution2 of the National Labor English Studies; that the schedule of
of Manaois, since the latter had not
Relations Commission (NLRC) and her oral defense may actually
finished her masters degree within the
ruled that respondent St. Scholastica's materialize anytime within the first
three-year probationary period. SSC
College (SSC) was not guilty of illegal academic semester of 2003; and that
then refuted the supposed performance
dismissal. SSC did not extend to she intended to fully earn her degree
ratings of Manaois and instead pointed
Manaois the position of permanent full- that year. She also furnished the school
out that she had merely received an
time faculty member with the rank of with a Certification from UP, stating that
average rating from her students.
instructor because she failed to acquire she had already finished her
Finally, it asserted that her
a master's degree and because her coursework in her masters studies.
specialization was the subject of writing
specialization could no longer be Furthermore, she indicated that it was
and not English Literature, which was
maximized by the institution due to the her long-term goal to apply for a return
the subject area that they needed a
changes in its curriculum and to full-time faculty status by then and for
faculty member for.
streamlining. SSC to consider the aforesaid matters.6
THE LABOR ARBITER RULING
THE FACTS Manaois eventually received a letter
from the Dean of College and On 16 July 2004, the labor arbiter
SSC, situated in the City of Manila, is a Chairperson of the Promotions and rendered a Decision9 finding the
private educational institution offering Permanency Board officially informing dismissal of petitioner to be illegal. In
elementary, secondary, and tertiary her of the boards decision not to renew addressing the issues, he first noted the
education. Manaois graduated from her contract. The letter provides as two reasons given by SSC for not
SSC in October 1992 with a degree in follows:7 renewing the contract of Manaois: (1)
Bachelor of Arts in English. In 1994, she the failure of petitioner to finish her
returned to her alma mater as a part- The Permanency Board reviewed your
masters degree within the three-year
time English teacher. After taking a case and after a thorough deliberation,
probationary period; and (2) SSCs
leave of absence for one year, she was the members decided not to renew your
inability to maximize petitioners
again rehired by SSC for the same contract for school year 2003-2004.
specialization due to curriculum
position. Four years into the service, With due consideration to your changes and streamlining.
she was later on recommended by her services, the institution had granted
Department Chairperson to become a With respect to the first reason, the
your request for a three-year extension
full-time faculty member of the English labor arbiter reiterated that the alleged
to finish your masters degree.
Department. handwritten notation on Manaoiss
However, you failed to comply with the
employment application showing that
Manaois thus applied for a position as terms which you yourself had
the approval thereof was premised on
full-time instructor for school year 2000- requested. In addition, your
her completion of a masters degree
2001. She mentioned in her application specialization cannot be maximized at
had not been disclosed or made known
letter3 that she had been taking the SSC due to the colleges curriculum
to her at the start of her engagement. In
course Master of Arts in English changes and streamlining.
fact, she was not given a copy of the
Studies, Major in Creative Writing, at It is with your best interest in mind and approval until it was attached to the
the University of the Philippines, deep regret on our part that we have to position paper of SSC. The labor arbiter
Diliman (UP); that she was completing let you go. A new environment may be agreed with Manaois that the only
her masters thesis; and that her oral able to provide you more avenues and credible evidence that a precondition
defense was scheduled for June 2000. opportunities where you can utilize your had been set for the acceptance of her
In a reply letter4 dated 17 April 2000, graduate studies in Creative Writing to employment application was SSCs
the Dean of Arts and Sciences informed the fullest. letter expressly stating that she must (a)
her of the SSC Administrative Councils maintain a good performance and (b)
approval of her application. She was Manaois sought clarification and
submit the necessary papers pertaining
then advised to maintain the good reconsideration of the decision of SSC
to her masters degree. Regarding
performance that she had shown for the to terminate her services. SSC denied
these preconditions, the labor arbiter
past years and to submit the necessary her request in a letter dated 11 July
noted that the allegation concerning the
papers pertaining to her masters 2003. Consequently, she filed a
mere average performance rating of
degree. Accordingly, SSC hired her as complaint for illegal dismissal, payment
Manaois given by the students was
a probationary fulltime faculty member of 13th month pay, damages, and
neither made known to her nor duly
with the assigned rank of instructor for attorneys fees against SSC.
substantiated with documentary proof.
the school year 2000-2001.5 Her SSC explained that upon consideration Even so, the labor arbiter articulated
probationary employment continued for of the written application of Manaois, that at the very least, the performance
a total of three consecutive years. the Dean of Arts and Sciences wrote
Page 49 of 59 Week 3 Cases (Labor Law Review) | amgisidro

of Manaois during her three-year THE NLRC RULING Consequently, the appellate court
probationary employment was reasoned that the disclosure of the
On 27 July 2007, the National Labor
satisfactory, as admitted by SSC itself, notation on petitioners application
Relations Commission (NLRC) issued
thereby satisfying the first condition latter was already inconsequential,
a Resolution10 upholding the labor
mentioned in the letter. The labor since one of the topics of the exchange
arbiters Decision. The NLRC reiterated
arbiter then considered the Certification of correspondences between the
the labor arbiters finding that the failure
issued by UP as sufficient evidence of parties in April 2000 was the
of petitioner to finish her masters
Manaoiss compliance with the second submission of petitioners papers for
degree within the three-year
condition set by SSC. her masters degree. This directive
probationary period was not a valid
proffered no other interpretation than
Next, the labor arbiter noted that under ground for the termination of
that the completion of a masters
the SSC Faculty Manual, the minimum employment, as the condition was not
degree had been a precondition for the
requirements for the rank of instructor, made known to her at the time of
conferment of Manaoiss permanent
for which petitioner had been hired engagement. Furthermore, it reasoned
employment status.
under the employment contract, was a that an average rating was not one of
bachelors degree with at least 25% the just causes for dismissal under the The CA also noted that the employment
units of masters studies completed. He Labor Code. Consequently, it affirmed contract of petitioner incorporated the
then found that the requirement for a the Decision of the labor arbiter in toto. conditions set in the SSC Faculty
masters degree actually pertained to Manual. The manual explicitly stated
THE CA RULING
the rank of assistant professor, a that the criteria for permanency
position that had not been applied for by On 27 February 2009, the CA issued included the completion of a masters
Manaois. Thus, he ruled that failure to the presently assailed Decision degree. According to the CA, the labor
finish a masters degree could not be reversing the NLRC judgment on the arbiter gravely erred when he solely
used either as a ground for dismissing ground of grave abuse of discretion and relied on the minimum requirements
petitioner or as basis for refusing to thus dismissing the complaint of provided for the rank of instructor. It
extend to her a permanent teaching Manaois. According to the appellate stressed that the criteria cited for the
status. court, it was compelled to conduct its rank of instructor referred to the basis
independent evaluation of the facts of on which full-time and part-time faculty
Anent respondents argument citing the
the case, since the factual findings of members were ranked, and not to the
Manual of Regulations for Private
the labor arbiter and the NLRC were requirements to be fulfilled in order to
Schools, the labor arbiter ruled that the
contrary to the evidence on record. become a permanent faculty member.
provisions therein were inapplicable
Instead, the appellate court agreed with
insofar as the employment status of First, the CA ruled that various pieces
SSC that what happened in this case
petitioner was concerned. He explained of evidence showed that Manaois had
was merely the expiration of an
that the manual merely referred to the been, at the time of engagement, aware
employment contract and the
requirements for tertiary schools to be and knowledgeable that possession of
nonrenewal thereof. It pointed out that,
accredited and not to the employment a masters degree was a criterion for
in spite of the requests of Manaois for
conditions of the academic personnel. permanency as a full-time faculty
the extension of her employment in
Thus, he pronounced that Sections member at SSC. As early as April 2000,
order for her to finish her masters
44(c) and 45 of the manual, which which was the period during which
degree, she failed to do so. In fact, she
required tertiary schools to hire Manaois applied to become a full-time
informed SSC that there was still no
teachers who were holders of masters faculty member, she had already sent a
fixed schedule for her oral defense.
degrees, could not be used as basis for letter indicating that she was
dismissing Manaois. completing her masters degree, and Thus, in the light of the foregoing pieces
that the oral defense of her thesis was of evidence, the CA ruled that the labor
The labor arbiter then focused on the
scheduled for June 2000. According to arbiter and the NLRC committed grave
second reason of SSC as a reflection of
the appellate court, this fact reasonably abuse of discretion in ruling that
the true motive behind the dismissal of
implied that she was fully aware of the petitioner had not been made aware of
Manaois. According to the labor arbiter,
necessity of a masters degree in order the reasonable standards of
the clear import of the statement "your
for her to attain permanent status at employment at the time of her
specialization cannot be maximized at
SSC. Furthermore, it noted that engagement. Based on her own acts,
SSC due to the colleges curriculum
Manaois submitted, together with her Manaois knew of the necessity of
changes and streamlining" was that
application letter, a Certification from obtaining a masters degree in order to
SSC had already decided to terminate
UP stating that she had already finished attain permanent employment status.
her services, regardless of the
her course work for her masters SSC was thus well within its rights not
completion of her masters degree. The
degree. It then deduced that this to renew her employment contract for
labor arbiter consequently ruled that
submission was proof that she had her failure to qualify as a permanent
this reason was not a valid cause for
endeavored to substantially comply full-time faculty member.
dismissing a probationary employee,
with one of the requirements for Consequently, her complaint was
reiterating that probationers may only
permanency. dismissed.
be terminated either (a) for a just cause,
or (b) for failure to qualify as a regular The CA then juxtaposed her letter with THE ISSUE
employee in accordance with the reply of SSCs Dean of Arts and
Whether the completion of a masters
reasonable standards made known at Sciences, who said that petitioner must
degree is required in order for a tertiary
the time of engagement. Ultimately, the submit the necessary papers pertaining
level educator to earn the status of
labor arbiter pronounced that Manaois to the latters masters degree, as
permanency in a private educational
had attained permanent status and that represented in her application letter. It
institution.
SSCs nonrenewal of her contract must treated this reply as indubitable proof of
be deemed as a dismissal without just SSCs appraisal of the requirement to OUR RULING
cause. obtain a masters degree.
Page 50 of 59 Week 3 Cases (Labor Law Review) | amgisidro

Probationary employment refers to the IV. EFFECTIVITY subsequent correspondences between


trial stage or period during which the her and SSC, and in the letter seeking
A. The SCHOOL has the right to
employer examines the competency the extension of a teaching load for the
terminate the FACULTY MEMBERS
and qualifications of job applicants, and school year 2003-2004; and her
services for just cause such as,
determines whether they are qualified submission of certifications from UP
among others, failure to comply with
to be extended permanent employment and from her thesis adviser we find
any of the provisions of the
status.11 Such an arrangement affords that there is indeed substantial
FACULTY MANUAL pertinent to her
an employer the opportunity before evidence proving that she knew about
status as FULL-TIME
the full force of the guarantee of the necessary academic qualifications
PROBATIONARY FACULTY
security of tenure comes into play to to obtain the status of permanency.
MEMBER. (Emphases supplied)
fully scrutinize and observe the fitness
We also agree with the CA that the
and worth of probationers while on the The SSC Faculty Manual in turn
labor arbiter and the NLRC gravely
job and to determine whether they provides for the following conditions in
misinterpreted the section in the SSC
would become proper and efficient order for a faculty member to acquire
Faculty Manual, which purportedly
employees.12 It also gives the permanent employment status:15
provided for a lower academic
probationers the chance to prove to the B. PERMANENCY requirement for full-time faculty
employer that they possess the
members with the rank of instructor,
necessary qualities and qualifications 1. Prior to the end of the probationary
regardless of whether they have
to meet reasonable standards for period, the faculty member formally
attained permanency or are still on
permanent employment.13 Article 281 applies for permanency to her/his
probation. The labor arbiter refers to the
of the Labor Code, as amended, Department Chair/Coordinator. The
following section in the SSC Manual:16
provides as follows: Department Chair/Coordinator, in
consultation with the faculty member, B. ACCORDING TO RANK
Art. 281. Probationary employment.
reviews the applicants over-all
Probationary employment shall not Only full-time and half-time faculty
performance. If the records show that
exceed six (6) months from the date the members are ranked. Subsidiary
the criteria for permanency are met, the
employee started working, unless it is faculty members follow a separate
applicant is recommended for
covered by an apprenticeship ranking system. Based on academic
permanency to the Promotions and
agreement stipulating a longer preparation, fulfillment of duties and
Permanency Board by the Department
period. The services of an employee responsibilities, performance, research,
Chair/Coordinator. In certain instances
who has been engaged on a output and/or community service, a full-
(i.e., when the Department
probationary basis may be time or half-time faculty member may
Chair/Coordinator does not give a
terminated for a just cause or when he be appointed to any of the following
recommendation for permanency), the
fails to qualify as a regular employee ranks:
Academic Dean can exercise her
in accordance with reasonable
prerogative to recommend the 1. INSTRUCTOR
standards made known by the
applicant.
employer to the employee at the time There are 4 probationary ranks and 8
of his engagement. An employee who xxxx permanent ranks
is allowed to work after a probationary CRITERIA FOR PERMANENCY a. Minimum Requirements
period shall be considered a regular
employee. (Emphases supplied) 1. The faculty member must have 1. A bachelors degree with at least
completed at least a masters 25% masteral units completed
We agree with the CA in setting aside degree.
the NLRC Decision and in ruling that 2. At least 2 years of teaching
the requirement to obtain a masters 2. The faculty member must manifest experience or its equivalent
degree was made known to Manaois. behavior reflective of the schools
(i.e., 1 year supervisory or professional
The contract she signed clearly mission-vision and goals.
experience)
incorporates the rules, regulations, and 3. The faculty member must have
employment conditions contained in the b. Promotion within the Rank
consistently received above average
SSC Faculty Manual, viz:14 rating for teaching performance as 1. A minimum of 1 year in the present
I. EMPLOYMENT evaluated by the Academic Dean, level for promotion to Instructor 2, 3, 4,
Department Chair/Coordinator and the and 5; a minimum of 2 years for
A. x x x x students. promotion to Instructor 6, 7 and 8.
B. After having read and understood in 4. The faculty member must have 2. An Instructor at any level may be
full the contents of the COLLEGE manifested more than satisfactory promoted to the rank of Assistant
UNITs current FACULTY fulfillment of duties and responsibilities Professor upon fulfillment of all the
MANUAL, the FACULTY MEMBER qualifications and requirements of the
as evidenced by official records
agrees to faithfully perform all the especially in the areas of: x x x said rank. (Emphases supplied)
duties and responsibilities attendant to
her position as PROBATIONARY 5. The faculty member must manifest As correctly pointed out by the CA, the
FULL-TIME FACULTY MEMBER awareness of and adherence to the aforecited minimum requirements
and comply with all the rules, schools code of ethics for faculty. provided for the rank of instructor
regulations and employment merely refer to how instructors are
6. The faculty member must be in good
conditions of the SCHOOL, as ranked, and not to the academic
physical health and manifest positive
provided in said FACULTY MANUAL qualifications required to attain
well being. (Emphasis supplied)
including any amendment/s permanency. It must be noted that the
pertinent to her position as may be Viewed next to the statements and section in the SSC Faculty Manual on
hereinafter incorporated therein. actions of Manaois i.e., the the ranking of instructors cover those
references to obtaining a masters who are still on probationary
xxxx degree in her application letter, in the employment and those who have
Page 51 of 59 Week 3 Cases (Labor Law Review) | amgisidro

already attained permanency. It would probationary full-time instructor for the xxxx
therefore be erroneous to simply read school year 2000 to 2003 is the 1992
c. Tertiary
the section on the ranking of instructors Manual of Regulations for Private
without taking into consideration the Schools (1992 Manual).21 It provides (1) For undergraduate courses, other
previously quoted section on the following conditions of a than vocational:
permanency in order to determine the probationary employment:
(a) Holder of a masters degree, to
academic qualifications for the position teach largely in his major field; or, for
Section 89. Conditions of Employment.
of permanent full-time faculty member
Every private school shall promote the professional courses, holder of the
with the rank of instructor. Thus, to
improvement of the economic, social appropriate professional license
properly arrive at the criteria, the
and professional status of all its required for at least a bachelor's
sections on both the permanency and
personnel. degree. Any deviation from this
the ranking of an instructor, as provided
requirement will be subject to regulation
in the SSC Manual, must be read in In recognition of their special
by the Department.
conjunction with each another. employment status and their special
role in the advancement of Section 45. Full-time and Part-time
At this juncture, we reiterate the rule
knowledge, the employment of Faculty. As a general rule, all private
that mere completion of the three-year schools shall employ full-time
teaching and non-teaching
probation, even with an above-average academic personnel consistent with
academic personnel shall be
performance, does not guarantee that the levels of instruction.
governed by such rules as may from
the employee will automatically acquire
time to time be promulgated, in
a permanent employment status.17 It is Full-time academic personnel are
coordination with one another, by
settled jurisprudence18 that the those meeting all the following
the Department of Education,
probationer can only qualify upon requirements:
Culture and Sports and the
fulfillment of the reasonable standards a. Who possess at least the
Department of Labor and
set for permanent employment as a minimum academic
Employment.
member of the teaching personnel. In qualifications prescribed by the
line with academic freedom and Conditions of employment of non- Department under this Manual for all
constitutional autonomy, an institution academic non-teaching school academic personnel;
of higher learning has the discretion personnel, including compensation,
and prerogative to impose standards on hours of work, security of tenure and b. Who are paid monthly or hourly,
its teachers and determine whether labor relations, shall be governed by the based on the regular teaching loads as
these have been met. Upon conclusion appropriate labor laws and regulations. provided for in the policies, rules and
of the probation period, the college or standards of the Department and the
Section 92. Probationary
university, being the employer, has the school;
Period. Subject in all instances to
sole prerogative to make a decision on compliance with Department and c. Whose total working day of not more
whether or not to re-hire the school requirements, the than eight hours a day is devoted to the
probationer. The probationer cannot school;
probationary period for academic
automatically assert the acquisition of
personnel shall not be more than three d. Who have no other remunerative
security of tenure and force the (3) consecutive years of satisfactory
employer to renew the employment occupation elsewhere requiring regular
service for those in the elementary and hours of work that will conflict with the
contract. In the case at bar, Manaois secondary levels, six (6) consecutive
failed to comply with the stated working hours in the school; and
regular semesters of satisfactory
academic qualifications required for the service for those in the tertiary level, e. Who are not teaching full-time in any
position of a permanent full-time faculty other educational institution.
and nine (9) consecutive trimesters of
member.
satisfactory service for those in the All teaching personnel who do not
Notwithstanding the existence of the tertiary level where collegiate courses meet the foregoing qualifications are
SSC Faculty Manual, Manaois still are offered on the trimester basis. considered part-time.
cannot legally acquire a permanent
Section 93. Regular or Permanent xxxx
status of employment. Private Status. Those who have served the
educational institutions must still probationary period shall be made Section 47. Faculty Classification and
supplementarily refer19 to the prevailing regular or permanent. Fulltime Ranking. At the tertiary level,
standards, qualifications, and teachers who have satisfactorily the academic teaching positions
conditions set by the appropriate completed their probationary period shall be classified in accordance
government agencies (presently the shall be considered regular or with academic qualifications, training
Department of Education, the permanent. (Emphases supplied) and scholarship preferably into
Commission on Higher Education, and academic ranks of Professor, Associate
the Technical Education and Skills Considering that petitioner ultimately Professor, Assistant Professor, and
Development Authority). This limitation sought for the position of a permanent Instructor, without prejudice to a more
on the right of private schools, colleges, full-time instructor, we must further look simplified or expanded system of
and universities to select and determine into the following provisions under the faculty ranking, at the option of the
the employment status of their 1992 Manual, which set out the school.
academic personnel has been imposed minimum requirements for such status:
by the state in view of the public interest Any academic teaching personnel who
Section 44. Minimum Faculty does not fall under any of the classes or
nature of educational institutions, so as Qualifications. The minimum
to ensure the quality and competency of ranks indicated in the preceding
qualifications for faculty for the different paragraph shall be classified preferably
our schools and educators. grades and levels of instruction duly as professorial lecturer, guest lecturer,
The applicable guidebook20 at the time supported by appropriate or any other similar academic
petitioner was engaged as a credentials on file in the school shall
be as follows:
Page 52 of 59 Week 3 Cases (Labor Law Review) | amgisidro

designation on the basis of his her contract expired. Thus, the three The facts are undisputed.
qualifications. (Emphases supplied) semesters she served as part-time
Respondent Ateneo de Manila
lecturer could not be credited to her in
Thus, pursuant to the 1992 Manual, University (Ateneo) hired, on a
computing the number of years she has
private educational institutions in the contractual basis, petitioner Lolita R.
served to qualify her for permanent
tertiary level may extend "full-time Lacuesta as a part-time lecturer in its
status.
faculty" status only to those who English Department for the second
possess, inter alia, a masters degree in Petitioner posits that after completing semester of school year 1988-1989.
the field of study that will be taught. This the three-year [full-time instructor on] She was re-hired, still on a contractual
minimum requirement is neither subject probation with an above-average basis, for the first and second
to the prerogative of the school nor to performance, she already acquired semesters of school year 1989-1990.
the agreement between the parties. For permanent status. On this point, we are
On July 13, 1990, the petitioner was
all intents and purposes, this unable to agree with petitioner.
first appointed as full-time instructor on
qualification must be deemed impliedly
Completing the probation period does probation, in the same department
written in the employment contracts
not automatically qualify her to become effective June 1, 1990 until March 31,
between private educational institutions
a permanent employee of the 1991. Thereafter, her contract as
and prospective faculty members. The
university. Petitioner could only qualify faculty on probation was renewed
issue of whether probationers were
to become a permanent employee upon effective April 1, 1991 until March 31,
informed of this academic requirement
fulfilling the reasonable standards for 1992. She was again hired for a third
before they were engaged as
permanent employment as faculty year effective April 1, 1992 until March
probationary employees is thus no
member. Consistent with academic 31, 1993. During these three years she
longer material, as those who are
freedom and constitutional autonomy, was on probation status.
seeking to be educators are presumed
an institution of higher learning has the
to know these mandated qualifications. In a letter dated January 27, 1993,
prerogative to provide standards for its
Thus, all those who fail to meet the respondent Dr. Leovino Ma. Garcia,
teachers and determine whether these
criteria under the 1992 Manual cannot Dean of Ateneos Graduate School and
standards have been met. At the end of
legally attain the status of permanent College of Arts and Sciences, notified
the probation period, the decision to re-
full-time faculty members, even if they petitioner that her contract would no
hire an employee on probation, belongs
have completed three years of longer be renewed because she did not
to the university as the employer alone.
satisfactory service. integrate well with the English
(Emphases supplied)
Department. Petitioner then appealed
In the light of the failure of Manaois to
For the foregoing reasons, we rule that to the President of the Ateneo at the
satisfy the academic requirements for
there is no legal obligation on the part time, Fr. Joaquin Bernas, S.J.
the position, she may only be
of SSC to reappoint Manaois after the
considered as a part-time instructor In a letter dated February 11, 1993, Fr.
lapse of her temporary appointn:ient.
pursuant to Section 45 of the 1992 Bernas explained to petitioner that she
We thus affirm in toto the findings of
Manual. In turn, as we have enunciated was not being terminated, but her
fact of the CA and rule that SSC is not
in a line of cases,22 a part-time member contract would simply expire. He also
guilty of illegal dismissal.
of the academic personnel cannot stated that the university president
acquire permanence of employment WHEREFORE, the petition is DENIED makes a permanent appointment only
and security of tenure under the Manual for lack of merit. Accordingly, the Court upon recommendation of the Dean and
of Regulations in relation to the Labor of Appeals Decision dated 27 February confirmation of the Committee on
Code. We thus quote the ruling of this 2009 and the Resolution dated 22 July Faculty Rank and Permanent
Court in Lacuesta, viz:23 2009 in CA-G.R. SP. No. 101382 are Appointment. He added that any
hereby AFFIRMED. appointment he might extend would be
Section 93 of the 1992 Manual of
tantamount to a midnight appointment.
Regulations for Private Schools SO ORDERED.
provides that full-time teachers who In another letter dated March 11, 1993,
G.R. No. 152777 December 9, 2005 Fr. Bernas offered petitioner the job as
have satisfactorily completed their
probationary period shall be considered LOLITA R. LACUESTA, Petitioner, book editor in the University Press
regular or permanent. Moreover, for vs. under terms comparable to that of a
those teaching in the tertiary level, the ATENEO DE MANILA UNIVERSITY, faculty member.
probationary period shall not be more DR. LEOVINO MA. GARCIA and DR. On March 26, 1993, petitioner applied
than six consecutive regular semesters MARIJO RUIZ, Respondents. for clearance to collect her final salary
of satisfactory service. The requisites to
DECISION as instructor. Petitioner also signed a
acquire permanent employment, or
Quitclaim, Discharge and Release on
security of tenure, are (1) the teacher is QUISUMBING, J.: April 16, 1993.4
a full-time teacher; (2) the teacher must
have rendered three consecutive years This petition for review on certiorari Petitioner worked as editor in the
of service; and (3) such service must assails the Decision1 dated October University Press from April 1, 1993 to
have been satisfactory. 12, 2001 of the Court of Appeals in CA- March 31, 1994 including an extension
G.R. SP No. 61173 and of two months after her contract
As previously held, a part-time teacher its Resolution2 dated February 21, expired. Upon expiry of her contract,
cannot acquire permanent status. Only 2002, denying the motion for petitioner applied for clearance to
when one has served as a full-time reconsideration. The appellate court collect her final salary as editor. Later,
teacher can he acquire permanent or affirmed the Decision3 dated February she agreed to extend her contract from
regular status. The petitioner was a 24, 2000 of the National Labor June 16, 1994 to October 31, 1994.
part-time lecturer before she was Relations Commission (NLRC), which Petitioner decided not to have her
appointed as a full-time instructor on had reversed the Decision dated March contract renewed due to a severe back
probation. As a parttime lecturer, her 20, 1998 of the Labor Arbiter. problem. She did not report back to
employment as such had ended when
Page 53 of 59 Week 3 Cases (Labor Law Review) | amgisidro

work, but she submitted her clearance employment unless a longer period had Section 9313 of the 1992 Manual of
on February 20, 1995. been stipulated by an apprenticeship Regulations for Private Schools
agreement; (2) under Article 280, if the provides that full-time teachers who
On December 23, 1996, petitioner filed
apprenticeship agreement stipulates a have satisfactorily completed their
a complaint for illegal dismissal with
period longer than one year and the probationary period shall be considered
prayer for reinstatement, back wages,
employee rendered at least one year of regular or permanent.14 Moreover, for
and moral and exemplary damages. Dr.
service, whether continuous or broken, those teaching in the tertiary level, the
Leovino Ma. Garcia and Dr. Marijo Ruiz
the employee shall be considered as probationary period shall not be more
were sued in their official capacities as
regular employee with respect to the than six consecutive regular semesters
the previous and present deans of the
activity in which he is employed while of satisfactory service.15 The requisites
College of Arts and Sciences,
such activity exists; and (3) it is with to acquire permanent employment, or
respectively.
more reason that petitioner be made security of tenure, are (1) the teacher is
Labor Arbiter Manuel P. Asuncion held regular since she had rendered a full-time teacher; (2) the teacher must
that petitioner may not be terminated by services as part-time and full-time have rendered three consecutive years
mere lapse of the probationary period English teacher for four and a half of service; and (3) such service must
but only for just cause or failure to meet years, services which are necessary have been satisfactory.16
the employers standards. Moreover, and desirable to the usual business of
As previously held, a part-time teacher
said the Labor Arbiter, the quitclaim, Ateneo.9
cannot acquire permanent
discharge and release executed by
Furthermore, the petitioner contends status.17 Only when one has served as
petitioner was not a bar to filing a
that her clearance was granted and a full-time teacher can he acquire
complaint for illegal dismissal.5Thus, he
completed only after she signed the permanent or regular status. The
ordered reinstatement with payment of
quitclaim on April 16, 1993. She petitioner was a part-time lecturer
full back wages.
contends also that the respondents before she was appointed as a full-time
The NLRC upon appeal of respondents failed to show that her quitclaim was instructor on probation. As a part-time
reversed the Labor Arbiters decision voluntary. lecturer, her employment as such had
and ruled that petitioner was not ended when her contract expired. Thus,
Respondents, for their part, contend
illegally dismissed, and that her the three semesters she served as part-
that the Manual of Regulations for
quitclaim was valid. Petitioner sought time lecturer could not be credited to
Private Schools is controlling. In the
reconsideration but it was denied. She her in computing the number of years
Manual, full-time teachers who have
then filed a petition for certiorari before she has served to qualify her for
rendered three consecutive years of
the Court of Appeals assailing the permanent status.
satisfactory service shall be considered
NLRC decision. The appellate court
permanent. Respondents also claim Petitioner posits that after completing
dismissed the petition saying there was
that the petitioner was not terminated the three-year probation with an above-
no grave abuse of discretion and
but her employment contract expired at average performance, she already
affirmed the NLRC decision. It ruled:
the end of the probationary period. acquired permanent status. On this
WHEREFORE, the petition is Further, institutions of higher learning, point, we are unable to agree with
hereby denied and such as respondent Ateneo, enjoy the petitioner.
accordingly DISMISSED.6 freedom to choose who may teach
Completing the probation period does
according to its standards.
Hence, this instant petition where not automatically qualify her to become
Respondents also argue that the
petitioner assigns the following as a permanent employee of the
quitclaim, discharge and release by
errors: university. Petitioner could only qualify
petitioner is binding and should bar her
to become a permanent employee upon
1. The Court of Appeals erred in ruling complaint for illegal dismissal.
fulfilling the reasonable standards for
that it is the Manual of Regulations For
After considering the contentions of the permanent employment as faculty
Private Schools, not the Labor Code,
parties in the light of the circumstances member.18 Consistent with academic
that determines the acquisition of
in this case, we find for respondents. freedom and constitutional autonomy,
regular or permanent status of faculty
an institution of higher learning has the
members in an educational institution; The Manual of Regulations for Private
prerogative to provide standards for its
Schools, and not the Labor Code,
2. The Court of Appeals erred in teachers and determine whether these
determines whether or not a faculty
upholding the Quitclaim that was signed standards have been met.19 At the end
member in an educational institution
by the Petitioner and in taking that of the probation period, the decision to
has attained regular or permanent
against her claims for illegal dismissal re-hire an employee on probation,
status.10 In University of Santo Tomas
and for moral and exemplary damages belongs to the university as the
v. National Labor Relations
against the respondents.7 employer alone.
Commission the Court en banc said
Simply put, the issue in this case is that under Policy Instructions No. 11 We reiterate, however, that
whether the petitioner was illegally issued by the Department of Labor and probationary employees enjoy security
dismissed. Employment, "the probationary of tenure, but only within the period of
Petitioner contends that Articles 280 employment of professors, instructors probation. Likewise, an employee on
and 281 of the Labor Code,8 not the and teachers shall be subject to the probation can only be dismissed for just
Manual of Regulations for Private standards established by the cause or when he fails to qualify as a
Schools, is the applicable law to Department of Education and Culture." regular employee in accordance with
determine whether or not an employee Said standards are embodied in the reasonable standards made known
in an educational institution has paragraph 7511 (now Section 93) of the by the employer at the time of his hiring.
acquired regular or permanent status. Manual of Regulations for Private Upon expiration of their contract of
She argues that (1) under Article 281, Schools.12 employment, academic personnel on
probationary employment shall not probation cannot automatically claim
exceed six (6) months from date of security of tenure and compel their
Page 54 of 59 Week 3 Cases (Labor Law Review) | amgisidro

employers to renew their employment discontinued giving him teaching EVIDENCE AT HAND AND DEVOID
contracts.20 In the instant case, assignments. For this, respondent filed OF BASIS IN LAW.
petitioner, did not attain permanent a complaint for illegal dismissal against
HOLDING THAT THE TWIN-
status and was not illegally dismissed. the university.
NOTICE REQUIREMENT IMPOSED
As found by the NLRC, her contract
In its defense, petitioner St. Marys BY LAW BEFORE TERMINATION OF
merely expired.
University showed that respondent was EMPLOYMENT CAN BE LEGALLY
Lastly, we find that petitioner had merely a part-time instructor and, EFFECTED MUST BE COMPLIED
already signed a valid quitclaim, except for three semesters, carried a WITH BY THE PETITIONER.
discharge and release which bars the load of less than eighteen units.
AFFIRMING THE DECISION OF
present action. This Court has held that Petitioner argued that respondent
THE NATIONAL LABOR RELATIONS
not all quitclaims are per se invalid or never attained permanent or regular
COMMISSION IN ORDERING THE
against public policy, except (1) where status for he was not a full-time teacher.
PETITIONER TO REINSTATE
there is clear proof that the waiver was Further, petitioner showed that
RESPONDENT DONELO TO HIS
wangled from an unsuspecting or respondent was under investigation by
FORMER POSITION WITHOUT LOSS
gullible person, or (2) where the terms the university for giving grades to
OF SENIORITY RIGHTS AND
of settlement are unconscionable on students who did not attend classes.
PRIVILEGES WITH FULL
their face.21 In this case, there is no Petitioner alleged that respondent did
BACKWAGES FROM THE TIME OF
showing that petitioner was coerced not respond to inquiries relative to the
HIS DISMISSAL UNTIL ACTUALLY
into signing the quitclaim. In her sworn investigation. Instead, respondent filed
REINSTATED.5
quitclaim, she freely declared that she the instant case against the university.
received to her full satisfaction all that is Plainly, the ultimate questions before us
The Labor Arbiter ruled that respondent
due her by reason of her employment are:
was lawfully dismissed because he had
and that she was voluntarily releasing
not attained permanent or regular 1. Was respondent a full-time teacher?
respondent Ateneo from all claims in
status pursuant to the Manual of
relation to her employment.22 Nothing 2. Had he attained permanent status?
Regulations for Private Schools. The
on the face of her quitclaim has been 3. Was he illegally dismissed?
Labor Arbiter held that only full-time
shown as unconscionable.
teachers with regular loads of at least Petitioner contends that respondent did
WHEREFORE, the petition 18 units, who have satisfactorily not attain permanent status since he did
is DENIED for lack of merit. The completed three consecutive years of not carry a load of at least 18 units for
Decision dated October 12, 2001 of the service qualify as permanent or regular three consecutive years; and that only
Court of Appeals in CA-G.R. SP No. employees. 3 full-time teachers can attain permanent
61173 and its Resolution dated
On appeal by respondent, the National status. Further, since respondent was
February 21, 2002 are AFFIRMED.
Labor Relations Commission (NLRC) not a permanent employee, the twin-
SO ORDERED. reversed the Decision of the Labor notice requirement in the termination of
Arbiter and ordered the reinstatement the latters employment did not apply.
G.R. No. 157788. March 08, 2005 of respondent without loss of seniority Respondent argues that, as early as
SAINT MARYS UNIVERSITY, rights and privileges with full 1995, he had a permanent appointment
represented by its President REV. backwages from the time his salaries as Assistant Professor, and he was a
JESSIE M. HECHANOVA, were withheld until actual permanent employee regardless of the
CICM, Petitioners, reinstatement.4 It held that respondent provisions of the Manual of Regulations
vs. was a full-time teacher as he did not for Private Schools. He asserts that he
COURT OF APPEALS (Former appear to have other regular should not be faulted for not carrying a
Special Twelfth Division), remunerative employment and was load of at least 18 units since the
NATIONAL LABOR RELATIONS paid on a regular monthly basis university unilaterally controls his load
COMMISSION (Second Division) regardless of the number of teaching assignment in the same manner that
and MARCELO A. hours. As a full-time teacher and having the university has the prerogative to
DONELO, Respondents. taught for more than 3 years, shorten his probationary period. He
respondent qualified as a permanent or points out also that the present Manual
DECISION regular employee of the university. allows full-time teachers to hold other
QUISUMBING, J.: Petitioner sought for reconsideration remunerative positions as long as these
For review on certiorari are and pointed out that respondent was do not conflict with the regular school
the Decision1 dated May 21, 2002 and also working for the Provincial day. Since he is a permanent
the Resolution2 dated February 12, Government of Nueva Vizcaya from employee, respondent insists that
2003 of the Court of Appeals in CA- 1993 to 1996. Nevertheless, the NLRC petitioners failure to give him the
G.R. SP No. 63240 which dismissed denied petitioners Motion for required notices constitutes illegal
the petition for certiorari of St. Marys Reconsideration. Aggrieved, petitioner dismissal.
University and its motion for elevated the matter to the Court of Section 93 of the 1992 Manual of
reconsideration, respectively. Appeals, which affirmed the Decision of Regulations for Private Schools,
the NLRC. provides that full-time teachers who
Respondent Marcelo Donelo started
teaching on a contractual basis at St. Hence, this petition with a motion for have satisfactorily completed their
Marys University in 1992. In 1995, he temporary restraining order, alleging probationary period shall be considered
was issued an appointment as an that the Court of Appeals erred in: regular or permanent.6 Furthermore,
Assistant Professor I. Later on, he was the probationary period shall not be
FINDING THAT THE RESPONDENT
promoted to Assistant Professor III. He more than six consecutive regular
DONELO ATTAINED A PERMANENT
taught until the first semester of school semesters of satisfactory service for
STATUS, THE SAID FINDING BEING
year 1999-2000 when the school those in the tertiary level.7 Thus, the
CLEARLY CONTRARY TO THE
following requisites must concur before
Page 55 of 59 Week 3 Cases (Labor Law Review) | amgisidro

a private school teacher acquires record. With a teaching load of twelve Decision of the Executive Labor Arbiter
permanent status: (1) the teacher is a units or less, he could not claim he of the Regional Arbitration Branch II,
full-time teacher; (2) the teacher must worked for the number of hours daily as Tuguegarao City, Cagayan, is hereby
have rendered three consecutive years prescribed by Section 45 of the Manual. REINSTATED.
of service; and (3) such service must Furthermore, the records also
SO ORDERED.
have been satisfactory.8 indubitably show he was employed
elsewhere from 1993 to 1996. G.R. No. 183872 November
In the present case, petitioner claims
that private respondent lacked the Since there is no showing that 17, 2014
requisite years of service with the respondent worked on a full-time basis OWEN PROSPER A.
university and also the appropriate for at least three years, he could not MACKAY, Petitioner,
quality of his service, i.e., it is less than have acquired a permanent status.11 A vs.
satisfactory. The basic question, part-time employee does not attain SPOUSES DANA CASWELL and
however, is whether respondent is a permanent status no matter how long CERELINA CASWELL, Respondents.
full-time teacher. he has served the school.12 And as a
part-timer, his services could be DECISION
Section 45 of the 1992 Manual of
terminated by the school without being DEL CASTILLO, J.:
Regulations for Private Schools
held liable for illegal dismissal.
provides that full-time academic This Petition for Review on
Moreover, the requirement of twin-
personnel are those meeting all the Certiorari1 assails the April 30, 2008
notice applicable only to regular or
following requirements: Decision2 of the Court of Appeals (CA)
permanent employees could not be
a. Who possess at least the minimum invoked by respondent. in CA-GR. SP No. 97146 which granted
academic qualifications prescribed by the Petition for Review3 filed therewith,
Yet, this is not to say that part-time reversed and set aside the October 31,
the Department under this Manual for
teachers may not have security of 2006 Decision4 of the Regional Trial
all academic personnel;
tenure. The school could not lawfully Court (RTC), Branch 70, Iba, Zambales
b. Who are paid monthly or hourly, terminate a part-timer before the end of in Civil Case No. RTC-2426-I, and
based on the regular teaching loads as the agreed period without just cause. reinstated the June 29, 2006
provided for in the policies, rules and But once the period, semester, or term Decision5 of the Municipal Trial Court
standards of the Department and the ends, there is no obligation on the part (MTC), San Narciso, Zambales in Civil
school; of the school to renew the contract of Case No. 538. The MTC Decision
employment for the next period, dismissed petitioner Owen Prosper A.
c. Whose total working day of not more
semester, or term. Mackay's (Owen) claims against
than eight hours a day is devoted to the
school; In this case, the contract of employment respondents spouses Dana Caswell
of the respondent was not presented. and Cerelina Caswell (the Caswells)
d. Who have no other remunerative and ordered him to pay the
However, judicial notice may be taken
occupation elsewhere requiring regular latter P46,205.00 representing the
that contracts of employment of part-
hours of work that will conflict with the expenses they incurred for the
time teachers are generally on a per
working hours in the school; and rectification of the defective work he did
semester or term basis. In the absence
e. Who are not teaching full-time in any of a specific agreement on the period of for them. The Petition also assails the
other educational institution. the contract of employment, it is July 24, 2008 Resolution6 of the CA
presumed to be for a term or semester. denying Owen's Motion for
All teaching personnel who do not meet Reconsideration7 thereto.
the foregoing qualifications are After the end of each term or semester,
considered part-time. the school does not have any obligation Factual Antecedents
to give teaching load to each and every
A perusal of the various orders of the part-time teacher. That petitioner did In their search for someone who could
then Department of Education, Culture not give any teaching assignment to the provide electrical installation service in
and Sports prescribing teaching loads respondent during a given term or their newly built home in San Narciso,
shows that the regular full-time load of semester, even if factually true, did not Zambales, the Caswells asked the sole
a faculty member is in the range of 15 amount to an actionable violation of distributor of electricity in the area,
units to 24 units a semester or term, respondents rights. It did not amount to ZambalesII Electric Cooperative
depending on the courses taught. Part- illegal dismissal of the part-time (Zameco II), thru its sub-office
time instructors carry a load of not more teacher. manager, Engr. Victor Pulangco (Engr.
than 12 units.9 Pulangco), how much its service for the
The law, while protecting the rights of installation would be. Engr. Pulangco
The evidence on record reveals that, the employees, authorizes neither the quoted an estimate of P456,000.00.
except for four non-consecutive terms, oppression nor destruction of the
respondent generally carried a load of employer.13 And when the law tilts the However, the Caswells hired Owen who
twelve units or less from 1992 to 1999. scale of justice in favor of labor, the offered to do the job for
There is also no evidence that he scale should never be so tilted if the only P250,000.00. With the help of
performed other functions for the school result would be an injustice to the Cesar Badua (Badua) and Albert
when not teaching. These give the employer.14 Galeng, Owen claimed that the
impression that he was merely a part- installation was completed and ready
time teacher.10 Although this is not WHEREFORE, the petition is for power service connection as of
conclusive since there are full-time GRANTED. The Decision dated May August 1998. By then, the Caswells had
teachers who are allowed by the 21, 2002 and the Resolution dated paid him P227,000.00.
university to take fewer load, in this February 12, 2003 of the Court of
Appeals in CA-G.R. SP No. 63240, At Cerelina Caswells (Cerelina)
case, respondent did not show that he request, Zameco II inspected the
belonged to the latter group, even after which sustained those of the NLRC, are
NULLIFIED and SET ASIDE. The installation work and tested the
the university presented his teaching distribution transformers.8 The
Page 56 of 59 Week 3 Cases (Labor Law Review) | amgisidro

inspection showed the following defects properly flow to their house. This led to The contractor shall execute the work in
as specified in Engr. Pulangcos letter the filing of an Estafa case under Article such a manner that it has the qualities
dated August 11, 1998:9 315 paragraph 2(a) of the Revised agreed upon and has no defects which
Penal Code13against Owen, docketed destroy or lessen its value or fitness for
I. For A-5 Construction
as Criminal Case No. RTC-2533- its ordinary or stipulated use. Should
a. No guying I.14 However, on ground of reasonable the work be not of such quality, the
doubt, Owen was acquitted onMay 15, employer may require that the
b. Improper use of deadend materials
2003.15 contractor remove the defect or execute
for neutral line
another work. If the contractor fails or
c. Lack of armor tape Still unpaid for the
refuses to comply with this obligation,
remaining P23,000.00 for his
d. Lack of clamp loop deadend the employer may have the defect
installation work, Owen in turn filed a
materials removed or another work executed, at
Complaint16 for Collection of Sum of
the contractors cost. The MTC held
e. No locknuts on all bolts. Money with Damages against the
that since it was proven that the work of
Caswells before the MTC, docketed as
II. For A-2 construction Owen suffers from deficiencies, the
Civil Case No. 538.
Caswells, pursuant to the above-
a. Improper use of materials for pole top Owen alleged that out of quoted provision, have the right to
pin the P250,000.00 contract price for the require him to remove the defect or
b. Lack of pole top pin installation of an electrical line, the execute another work. It did not give
Caswells have only paid credence to Owens claim that he
c. No guying him P227,000.00. He thus wanted to corrected the deficiencies for lack of
d. Improper use of materials for neutral recover from the Caswells the evidence to substantiate the same. The
line remaining balance of P23,000.00, as MTC likewise held that the Caswells
well as damages on account of had no chance to demand from Owen
e. Wrong phasing of pole top pin sleepless nights, serious anxiety and the removal of the defector the
f. Lack of armor rod (single & double social humiliation he suffered due to the execution of another work as he was
support) Caswells malicious filing of estafa case then nowhere to be found. On the other
against him. hand, the Caswells evidence clearly
III. For Grounding: showed that they caused the Zameco II
The Caswells, on the other hand,
a. [Substandard] grounding wire people to rectify the defects for which
maintained that Owen is not entitled to
they spent P69,205.00.
b. Wrong installation of pole grounding any money. They pointed out that Owen
wire failed to finish the job and walked out of By virtue of Article 116721 of the Civil
the contract. Hence, they are the ones Code, the MTC ruled that the
c. Lack of grounding rods entitled to reimbursement of expenses said P69,205.00 should be borne by
V. Tapping Point: incurred to correct Owens defective Owen. From the P69,205.00, the said
work. As proof of their expenses, the court then deducted the P23,000.00
Lack of fuse cut-out with lightning Caswells submitted as evidence a) Owen was seeking to collect from the
arrester combination at the tapping Engr. Pulangcos handwritten receipt Caswells. The dispositive portion of the
point. of P15,400.00 as partial payment for MTCs June 29, 2006 Decision22 reads:
VI. For Transformer Installation: the materials needed to correct the
WHEREFORE, viewed from all the
deficiencies in Owens installation
Wrong distance of the transformer from foregoing, judgment is hereby rendered
work;17 b) an undated Sales Invoice No.
the neutral line.10 in favor of the [Caswells] and against
2029 issued by Peter A. Eduria
[Owen] as follows:
Because of the deficiencies and other Enterprises itemizing nine electrical
incomplete requirements, Zameco II materials Dana Caswell (Dana) bought, 1. Dismissing [Owens] claims for lack
refused to provide energization to the their quantities, and the total price of merit, and
Caswell home. The Caswells thus of P53,805.00.0018 and; c) a list of all
2. Ordering [Owen] to pay the
looked for Owen but he could not be the materials obtained for Zamecos
[Caswells] the amount of P46,205.00
found. Hence, they were constrained to corrective work with the corresponding
representing the rectification cost.
ask Zameco II to correct all the unit prices, labor cost and the total price
problems it found. After the single charged.19 Owen and Badua testified SO ORDERED.23
phase distribution system was that they rectified all the discrepancies
Owen appealed to the RTC.
completed in accordance with the that Zameco II found. After the
standard specifications of Zameco II in corrections, Owen informed Engr. Ruling of the Regional Trial Court
January 1999,11 only then did the Pulangco that the Caswell home was In a Decision24 dated October 31, 2006,
Caswells finally have electricity. ready for electrical connection. Hedid the RTC reversed and set aside the
not know what Engr. Pulangco did next. MTC Decision. The RTC opined that
On September 4, 1998, the Caswells Owen likewise asserted that he even
executed a Joint Affidavit12 to charge the Caswells should have first filed a
reminded Cerelina to submit to Zameco judicial action for specific performance
Owen and his group of swindling them II all the documentary requirements for
of P227,000.00. The Caswells alleged where there could have been an
power connection.20 exhaustive determination of the quality
that Owen and his group
misrepresented themselves to be Ruling of the Municipal Trial Court and acceptability of Owens installation
people from the National Power work. By immediately resorting to the
Finding the contract entered into by the
Corporation (NAPOCOR). By reason of service of Zameco II, the Caswells
parties to be a contract for a piece of
the misrepresentation, the Caswells never afforded Owen the opportunity to
work, the MTC relied upon Article 1715
suffered damage as the electrical correct the deficiencies in accordance
of the Civil Code, viz:
installation made were replete with with Article 1715 of the Civil Code. It
deficiencies such that no electricity can noted Cerelinas testimony during the
Page 57 of 59 Week 3 Cases (Labor Law Review) | amgisidro

trial before the MTC where she was Our mind, however, the effort to destroy or lessen its value or fitness for
asked if she confronted Owen about the communicate with [Owen] effectively its ordinary or stipulated use.
unfinished work. She answered that served as [the Caswells] request for
Owen insists that as far as he is
Owen did not come to her so she went the former to rectify the flaws in the
concerned, he had done what was
to Zameco II when she could no longer contracted work. In fact, [the Caswells]
required of him. i.e., the installation of
wait for electricity.25 act of demanding that [Owen] secure
electrical materials in the Caswell
the permit and to subject the
Furthermore, the RTC was convinced home. Anent the permits, he avers that
transformer to testing can already be
that Owen kept up his end of the securing the same is not part of his
construed as a substantial compliance
bargain as shown by Engr. Pulangcos work but is the responsibility of the
with Article 1715. It must be
testimony on cross-examination that Caswells.
emphasized that it was [Owens]refusal
even without replacing the fuse cut-out
to secure the necessary permits and to Considering all the undisputed facts,
connection, electricity will still flow
comply with the requirements of the Court, however, finds that the
smoothly and will function in the
Zameco [II] as well as his refusal to Caswells were not only after securing
Caswell home.26
communicate with [the Caswells] that permits. They suffered other major
Opining that Owen must be given what impelled the latter to file a case for problems as shown by their narration in
is actually due him, the RTC disposed estafa against him. Had he been willing their Joint Affidavit, viz:
of the case as follows: to make good his obligation, then it
5. That we think they were done in three
would not have been necessary for [the
WHEREFORE, the decision of the days, that same week. The contact
Caswells] to file the said criminal case.
Municipal Trial Court of San Narciso is man, Owen Mackay, had told us that he
Instead of complying with his end of the
reversed and set aside and judgment is would take care of all permits. He asked
bargain, [Owen] opted to file a case for
hereby rendered as follows: us to get a paper done for the
collection of sum of money with
permission on one piece of land. No
1. Ordering the defendants to pay unto damages. Thus, any effort to require
permits were shown to us. No ZAMECO
the plaintiff the amount of Twenty Three [Owen] either to rectify his flawed work
authorization [was] ever shown to us.
Thousand Pesos (P23,000.00) or to remove the same would have
He went to ZAMECO, to tell them it was
representing the balance of the price or been futile since [Owens] act of
ready [for connection]. ZAMECO did
consideration for his services in the demanding payment through the said
not connect because: (1) no permits
installation of electrical lines in the complaint showed his belief that his
[were] requested or [were] given by
defendants home, with legal interest at work in the house was done.
ZAMECO; (2) transformer allegedly
the rate of six (6%) [per annum] from
Clearly, the RTC erred in stating that brand new [and] had to run through
the time of the filing of the complaint
[the Caswells] failure to file an action testing laboratory. Owen[s] group
until it is fully paid;
for specific performance led to the [neither] did the testing nor caused a
2. Ordering the defendants to pay to the presumption that [Owen] performed his testing; (3) complete inspection of
plaintiff moral damages in the amount obligations in accordance with their installation was [yet] to be done x x x;
of TWENTY FIVE THOUSAND PESOS agreement. Said presumption could not (4) no installation layout was provided
(P25,000.00) for their willful non- have prevailed in view of the nature of or presented to ZAMECO; (5) nobody
compliance with their contractual the contracted work, the ultimate goal of [from Owens group was] around for 4-
obligation to the plaintiff, and exemplary which was to have electricity flowing 5 days to x x x talk about our problems.
damages in the amount of into [the Caswell] house. Thus, the Owen called, sent word to [us] and we
TWENTYTHOUSAND PESOS thing speaks for itself. Res ipsa loquitur. have gone down (3) occasions at night
(P20,000.00) by way of example or This, the RTC failed to consider. to try to find him. The three did [a]
correction for the public good; Therefore, this Court finds the decision vanishing act. Finally, [they came] to
of the MTC more in accord with law and take the transformer for testing. [The]
3. Ordering the defendants[,] spouses
DANA and CERELINA CASWELL[,] to jurisprudence.30 one day testing told us by Pulangco
turned into 1 weeks x x x. I had to go
pay attorneys fees to the plaintiff in the His Motion for
pick it up myself at test complex.
amount of THIRTY THOUSAND Reconsideration31 having been denied
Brought the transformer home from
PESOS (P30,000.00), the latter having by the CA,32 Owen argues in this
Castillejos, August [10,] 1998 with the
been haled to court to enforce his Petition for Review on Certiorari that: 1)
contractual rights; test results. No response from the
he has done the installation job and that
people who called themselves
[4.] Ordering the defendants to pay the it was not his duty but that of the
NAPOCOR. After [chasing after] Owen
costs of this suit. Caswells to secure the necessary
Mackay x x x and [after] empty
permits from Zameco II; 2) his acquittal
SO ORDERED.27 promises we were referred to Atty.
in the criminal case should have been
Pacis, [and] the rest is still unsettled;33
Refusing to accept the RTC judgment considered; 3) there is no basis for the
and heavily relying on the MTC award of the rectification costs as the These circumstances, together with the
Decision, the Caswells elevated the sales receipt for the alleged materials deficiencies enumerated in Engr.
case to the CA by way of a Petition for used is inadmissible and; 4) the Pulangcos August 10, 1998letter,
Review.28 Caswells never demanded that he sufficiently explain the delay in the
remove the defects or execute another energization of the Caswell home.
Ruling of the Court of Appeals work in accordance with Article 1715 of Engr. Pulangcos testimony that
In its Decision29 of April 30, 2008, the the Civil Code. electricity will still work without
CA reinstated the MTC Decision. It replacing the fuse cut-out connection is
Our Ruling
reasoned: not enough to negate the fact that
We deny the Petition. Owens overall work is not satisfactory.
The RTC opined that [the Caswells]
should have given the contractor the Owen failed to execute his work in such Moreover, Owen, in contending that his
chance to rectify the flaw in his work. To a manner that it has no defects which acquittal in the estafa case should have
Page 58 of 59 Week 3 Cases (Labor Law Review) | amgisidro

been a factor for a favorable decision in they were deceived and would not have loss suffered by him as he has duly
this civil case, relied on a remark by the been constrained to undergo the rigors proved.37 "To justify an award of actual
RTC that referred to an opinion of filing a criminal complaint and damages, there must be competent
mentioned in the judgment in the estafa testifying therein. Without doubt, the proof of the actual amount of loss,
case, i.e., that the delay in supplying Caswells exercised due diligence when credence can be given only to claims
power to the Caswell home could they demanded from Owen the proper which are duly supported by
possibly be due to the resentment rectification of his work. As correctly receipts."38 The claimant must prove
harbored by certain employees of held by the CA, the Caswells the actual amount of loss with a
Zameco II as they were not chosen to substantially complied with the reasonable degree of certainty
do the work.34 A perusal, however, of requirement of Article 1715 of the Civil premised upon competent proof and on
the judgment in Criminal Case No. Code, viz: the best evidence obtainable.39 In the
RTC-2533-I35 would show that this case at bar, we give credence to the
To Our mind, however, the effort to
statement is only a mere obiter. The documents relied upon by the CA and
communicate with [Owen] effectively
RTC cannot hinge on this opinion as the MTC in arriving at the rectification
served as [the Caswells] request for
this is mere conjecture. Notably, the cost, i.e., a) Engr. Pulangcos
the former to rectify the flaws in the
Zameco II people were not even parties handwritten receipt of P15,400.00, to
contracted work. In fact, [the Caswells]
or witnesses in the estafa case. which he had testified before the court
act of demanding that [Owen] secure
that he had indeed received such
Suffice it to say that Owens job was not the permit and to subject the
amount and b) the Sales Invoice No.
only to finish the electrical installation transformer to testing can already be
2029 issued by Peter A. Eduria
work. It was likewise his obligation to do construed as a substantial compliance
Enterprises reflecting the total cost
quality work and to provide quality with Article 1715. It must be
of P53,805.00.00.
materials to ensure that electricity emphasized that it was [Owens] refusal
would flow in the Caswell home. For the to secure the necessary permits and to Notably, Owen assails the admissibility
Caswells to avail of this utility, it is comply with the requirements of of the Sales Invoice, contending that
definitely expected that the electrical Zameco [II] as well as his refusal to said document is insufficient to be a
materials used should meet the communicate with [the Caswells] that basis for computation of damages as
technical requirements for a service impelled the latter to file a case for the respective unit price for each item
entrance as imposed by the only estafa against him. Had he been willing enumerated therein are lacking.
distributor of the electricity in the area, to make good his obligation, then it Furthermore, he attempts to highlight
Zameco II, so that the latter can supply would not have been necessary for [the that Peter A. Eduria Enterprises is a
residential electric service efficiently Caswells] to file the said criminal case. non-existing business establishment by
and safely to the Caswells. However, as Instead of complying with his end of the submitting the negative certification of a
shown above, Owen failed to execute bargain, [Owen] opted to file a case for business name issued by the
his work in such a manner that it has no collection of sum of money with Department of Trade and
defects which destroy or lessen its damages. Thus, any effort to require Industry,40 the certification of no record
value or fitness for its ordinary or [Owen] either to rectify his flawed work issued by Business Permit and License
stipulated use. or to remove the same would have Office of Valenzuela City,41 and the
been futile since [Owens] act of certification of non-registration of
The CA correctly ruled that Caswells
demanding payment through the said corporation/partnership by the
effort to communicate with Owen
complaint showed his belief that his Securities and Exchange
effectively served as a demand to
work in the house was done.36 Commission.42
rectify
the latters work. Furthermore, to require the Caswells to The failure to indicate the unit price of
file an action for specific performance, each item in the sales invoice does not
Under Article 1715 of the Civil Code, if
as opined by the RTC, not only deprives defeat the claim of the Caswells for
the work of a contractor has defects
them of hiring someone else to rectify reimbursement.1wphi1 In most cases
which destroy or lessen its value or
the work, but also defeats the very in the ordinary course of business,
fitness for its ordinary or stipulated use,
purpose of the contracted work, i.e., to sellers issue handwritten receipts that
he may be required to remove the
immediately have electricity in their are perfunctorily filled out without
defect or execute another work. If he
home. In this situation, time is of the completely stating all the details of the
fails to do so, he shall be liable for the
essence. purchase. This 'flaw' should not be
expenses by the employer for the
taken against the Caswells. Besides, if
correction of the work. The demand For Owens failure to provide quality
the unit price per
required of the employer under the work, he is to reimburse the rectification
subject provision need not be in a costs the Caswells had shouldered as item is an issue, a perusal of Dana's
particular form. In the case at bar, we the separate list43 will show the unit prices
agree with the CA that Owen was given latters actual damages; the unpaid of the items in the sales
the opportunity to rectify his work. compensation Owen is claiming shall invoice.1wphi1
Subsequent to Zameco IIs disapproval be
With regard to the documentary
to supply the Caswells electricity for set-off from the Caswells monetary
evidence Owen adduced in his attempt
several reasons, the Court gives claims supported by receipts.
to show the alleged non-existence of
credence to the latters claim that they
he Court recognizes that in view of the Peter A. Eduria Enterprises, the
looked for Owen to demand a
substandard work done, the Caswells negative certifications presented
rectification of the work, but Owen and
necessarily incurred expenses by however only highlight the probable
his group were nowhere to be found.
purchasing materials to finally get a liability of the store with the government
Had Owen really been readily available
supply of electricity in their home. for non-compliance with business
to the Caswells to correct any
registration. Regardless of whether the
deficiency in the work, the latter would One is entitled to an adequate
latter had registered itself as a business
not have entertained the thought that compensation only for such pecuniary
entity with the proper authorities, the
Page 59 of 59 Week 3 Cases (Labor Law Review) | amgisidro

documents Owen relies upon fail to


overcome the point of the receipt: that a
sale of electrical items for installation
had transpired between the Caswells
and the seller. With the relevant facts
established that Zameco II rejected the
quality of Owen's work and that
rectifications were made by installing
the necessary materials to meet the
electric distributor's specifications, the
said invoice cannot be considered as
bereft of evidentiary value.
It must be noted en passant that
Cerelina herself admitted that the
contract price agreed upon was the
lump sum of P250,000.00, and that she
only paid Owen P227,000.00,44 while
the dispositive portion of the MTC
Decision stated that Owen's claims are
dismissed, the lower court implies that
the P23,000.00 unpaid compensation
he sought to recover from the Caswells
shall not be given directly to him,
offsetting the said amount from the
rectification cost that the Caswells had
prayed for. In effect, under the
circumstances, we deem this fair and
just to measure the actual damages
due the Caswells by reducing the cost
they shouldered to repair the defects
with the unpaid amount of the contract
price due Owen.
WHEREFORE, the instant petition is
DENIED. The April 30, 2008 Decision
and July 24, 2008 Resolution of the
Court of Appeals in CA-G.R. SP No.
97146, which reinstated the June 29,
2006 Decision of the Municipal Trial
Court, San Narciso, Zambales, in Civil
Case No. 538, are AFFIRMED in toto.
No costs.
SO ORDERED.

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