G.R. No.

190724 March 12, 2014

DIAMOND TAXI and/or BRYAN ONG, Petitioners,

vs.
FELIPE LLAMAS, JR., Respondent.

Llamas did not abandon his work; he was

constructively dismissed

"Abandonment is the deliberate and unjustified refusal of an employee to resume his

employment."34 It is a form of neglect of duty that constitutes just cause for the employer to dismiss
the employee.35

To constitute abandonment of work, two elements must concur: "(1) x xx the employee must have
failed to report for work or must have been absent without valid or justifiable reason; and (2) x xx
there must have been a clear intention [on the part of the employee] to sever the employer-
employee relationship manifested by some overt act."36 The employees absence must be
accompanied by overt acts that unerringly point to the employees clear intention to sever the
employment relationship.37 And, to successfully invoke abandonment, whether as a ground for
dismissing an employee or as a defense, the employer bears the burden of proving the employees
unjustified refusal to resume his employment.38 Mere absence of the employee is not enough.39

Guided by these parameters, we agree that the petitioners unerringly failed to prove the alleged
abandonment. They did not present proof of some overt act of Llamas that clearly and unequivocally
shows his intention to abandon his job. We note that, aside from their bare allegation, the only
evidence that the petitioners submitted to prove abandonment were the photocopy of their
attendance logbook and the July 15, 2005 memorandum40 that they served on Llamas regarding the
July 13, 2005 incident. These pieces of evidence, even when considered collectively, indeed failed
to prove the clear and unequivocal intention, on Llamas part, that the law requires to deem as
abandonment Llamas absence from work. Quite the contrary, the petitioners July 15, 2005
memorandum, in fact, supports, if not strengthens, Llamas' version of the events that led to his filing
of the complaint, i.e., that as a result of the July 13, 2005 incident, the petitioners refused to give him
the key to his assigned taxi cab unless he would sign the resignation letter.

Moreover, and as the CA pointed out, Llamas lost no time in filing the illegal dismissal case against
them. To recall, he filed the complaint on July 18, 2005 or only two days from the third time he was
refused access to his assigned taxi cab on July 16, 2005. Clearly, Llamas could not be deemed to
have abandoned his work for, as we have previously held, the immediate filing by the employee of
an illegal dismissal complaint is proof enough of his intention to return to work and negates the
employer's charge of abandonment.41

To reiterate and emphasize, abandonment is a matter of intention that cannot lightly be presumed
from certain equivocal acts of the employee.42

The CA, therefore, correctly regarded Llamas as constructively dismissed for the petitioners' failure
to prove the alleged just cause -abandonment - for his dismissal. Constructive dismissal exists when
there is cessation of work because continued employment is rendered impossible, unreasonable or
unlikely. Constructive dismissal is a dismissal in disguise or an act amounting to dismissal but made
to appear as if it were not. In constructive dismissal cases, the employer is, concededly, charged
with the burden of proving that its conduct and action were for valid and legitimate grounds.43 The
petitioners' persistent refusal to give Llamas the key to his assigned taxi cab, on the condition that he
should first sign the resignation letter, rendered, without doubt, his continued employment
impossible, unreasonable and unlikely; it, thus, constituted constructive dismissal.

G.R. No. 192998 April 2, 2014

BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners,

vs.
R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS

"[T]he burden of proof rests upon the party who asserts the affirmative of an issue."33 Corollarily, as
Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer
evidence to prove the existence of said relationship.

"[I]n determining the presence or absence of an employer-employee relationship, the Court has
consistently looked for the following incidents, to wit: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to
control the employee on the means and methods by which the work is accomplished. The last
element, the so-called control test, is the most important element."34

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and
relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers,
social security registration, appointment letters or employment contracts, payrolls, organization
charts, and personnel lists, serve as evidence of employee status.

In Opulencia Ice Plant and Storage v. NLRC,37 this Court emphasized, thus:

No particular form of evidence is required to prove the existence of an employer-employee

relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if
only documentary evidence would be required to show that relationship, no scheming employer
would ever be brought before the bar of justice, as no employer would wish to come out with any
trace of the illegality he has authored considering that it should take much weightier proof to
invalidate a written instrument.
G.R. No. 204651 August 6, 2014

OUR HAUS REALTY DEVELOPMENT CORPORATION, Petitioner,

vs.
ALEXANDER PARIAN, JAY C. ERINCO, ALEXANDER CANLAS, BERNARD TENEDERO and
JERRY SABULAO, Respondents.

A claim not raised in the pro forma complaint may still beraised in the position paper.

Our Haus questions the respondents entitlement to SIL pay by pointing out that this claim was not
included in the pro forma complaint filed with the NLRC. However, we agree with the CA that such
omission does not bar the labor tribunals from touching upon this cause of action since this was
raised and discussed inthe respondents position paper. In Samar-Med Distribution v. National Labor
Relations Commission,53 we held:

Firstly, petitioners contention that the validity of Gutangs dismissal should not be determined
because it had not been included in his complaint before the NLRC is bereft of merit. The complaint
of Gutang was a mere checklist of possible causes of action that he might have against Roleda.
Such manner of preparing the complaint was obviously designed to facilitate the filing of complaints
by employees and laborers who are thereby enabled to expediently set forth their grievances in a
general manner. But the non-inclusion in the complaint of the issue on the dismissal did not
necessarily mean that the validity of the dismissal could not be an issue.The rules of the NLRC
require the submission of verified position papers by the parties should they fail to agree upon an
amicable settlement, and bar the inclusion of any cause of action not mentioned in the complaint or
position paper from the time of their submission by the parties. In view of this, Gutangs cause of
action should be ascertained not from a reading of his complaint alone but also from a consideration
and evaluation of both his complaint and position paper.54
G.R. No. 189404 December 11, 2013

WILGEN LOON, JERRY ARCILLA, ALBERTPEREYE, ARNOLD PEREYE, EDGARDO OBOSE,

ARNEL MALARAS, PATROCINO TOETIN, EVELYN LEONARDO, ELMER GLOCENDA, RUFO
CUNAMAY, ROLANDOSAJOL, ROLANDO ABUCAYON, JENNIFER NATIVIDAD, MARITESS
TORION, ARMANDO LONZAGA, RIZAL GELLIDO, EVIRDE HAQUE,1 MYRNA VINAS,
RODELITO AYALA, WINELITO OJEL, RENATO RODREGO, NENA ABINA, EMALYN
OLIVEROS, LOUIE ILAGAN, JOEL ENTIG, ARNEL ARANETA, BENJAMIN COSE, WELITO
LOON and WILLIAM ALIPAO, Petitioners,
vs.
POWER MASTER, INC., TRI-C GENERAL SERVICES, and SPOUSES HOMER and CARINA
ALUMISIN,Respondents.

A party may only adduce evidence

for the first time on appeal if he
adequately explains his delay in the
submission of evidence and he
sufficiently proves the allegations
sought to be proven

In labor cases, strict adherence to the technical rules of procedure is not required. Time and again,
we have allowed evidence to be submitted for the first time on appeal with the NLRC in the interest
of substantial justice.28Thus, we have consistently supported the rule that labor officials should use all
reasonable means to ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, in the interest of due process.29

However, this liberal policy should still be subject to rules of reason and fairplay. The liberality of
procedural rules is qualified by two requirements: (1) a party should adequately explain any
delay in the submission of evidence; and (2) a party should sufficiently prove the allegations
sought to be proven.30 The reason for these requirements is that the liberal application of the rules
before quasi-judicial agencies cannot be used to perpetuate injustice and hamper the just resolution
of the case. Neither is the rule on liberal construction a license to disregard the rules of procedure.31

Guided by these principles, the CA grossly erred in ruling that the NLRC did not commit grave abuse
of discretion in arbitrarily admitting and giving weight to the respondents pieces of evidence for the
first time on appeal.

A. The respondents failed to

adequately explain their delay
in the submission of evidence

We cannot accept the respondents cavalier attitude in blatantly disregarding the NLRC Rules of
Procedure. The CA gravely erred when it overlooked that the NLRC blindly admitted and arbitrarily
gave probative value to the respondents evidence despite their failure to adequately explain their
delay in the submission of evidence. Notably, the respondents delay was anchored on their
assertion that they were oblivious of the proceedings before the LA. However, the respondents did
not dispute the LAs finding that Mr. Romulo Pacia, Jr. appeared on their behalf on April 19, 2001
and May 21, 2001.32 The respondents also failed to contest the petitioners assertion that the
respondents counsel appeared in a preliminary mandatory conference on July 5, 2001.33
Indeed, the NLRC capriciously and whimsically admitted and gave weight to the respondents
evidence despite its finding that they voluntarily appeared in the compulsory arbitration proceedings.
The NLRC blatantly disregarded the fact that the respondents voluntarily opted not to participate, to
adduce evidence in their defense and to file a position paper despite their knowledge of the
pendency of the proceedings before the LA. The respondents were also grossly negligent in not
informing the LA of the specific building unit where the respondents were conducting their business
and their counsels address despite their knowledge of their non-receipt of the processes.34

B. The respondents failed to

sufficiently prove the
allegations sought to be
proven

Furthermore, the respondents failed to sufficiently prove the allegations sought to be proven. Why
the respondents photocopied and computerized copies of documentary evidence were not
presented at the earliest opportunity is a serious question that lends credence to the petitioners
claim that the respondents fabricated the evidence for purposes of appeal. While we generally
admit in evidence and give probative value to photocopied documents in administrative
proceedings, allegations of forgery and fabrication should prompt the adverse party to
present the original documents for inspection.35 It was incumbent upon the respondents to
present the originals, especially in this case where the petitioners had submitted their specimen
signatures. Instead, the respondents effectively deprived the petitioners of the opportunity to
examine and controvert the alleged spurious evidence by not adducing the originals. This Court is
thus left with no option but to rule that the respondents failure to present the originals raises the
presumption that evidence willfully suppressed would be adverse if produced.

G & M (Phils.), Inc., petitioner, vs. EPIFANIO CRUZ, respondent.

[G.R. No. 140495. April 15, 2005]

The rule is that the burden of proving payment of monetary claims rests on the employer,[12] In Jimenez vs.
NLRC,[14] which involves a claim for unpaid wages/commissions, separation pay and damages against an
employer, the Court ruled that where a person is sued for a debt admits that the debt was originally owed, and
pleads payment in whole or in part, it is incumbent upon him to prove such payment. This is based on the
principle of evidence that each party must prove his affirmative allegations. Since petitioner asserts that
respondent has already been fully paid of his stipulated salary, the burden is upon petitioner to prove such fact
of full payment.

Thus, it was stated in the Jimenez case that:

As a general rule, one who pleads payment has the burden of proving it. Even
where the plaintiff must allege non-payment, the general rule is that the
burden rests on the defendant to prove payment, rather than on the plaintiff to
prove non-payment. The debtor has the burden of showing with legal certainty
that the obligation has been discharged by payment.

When the existence of a debt is fully established by the evidence contained in

the record, the burden of proving that it has been extinguished by payment
devolves upon the debtor who offers such a defense to the claim of the
creditor. Where the debtor introduces some evidence of payment, the burden
of going forward with the evidence - as distinct from the general burden of
proof - shifts to the creditor, who is then under a duty of producing some
evidence to show non-payment.

Petitioner merely denied respondents claim of underpayment. It did not

present any controverting evidence to prove full payment. Hence, the findings
of the Labor Arbiter, the NLRC and the Court of Appeals that respondent was
not fully paid of his wages stand.

The positive testimony of a creditor may be sufficient of itself to show non-

payment, even when met by indefinite testimony of the debtor. Similarly, the
testimony of the debtor may also be sufficient to show payment, but, where
his testimony is contradicted by the other party or by a disinterested witness,
the issue may be determined against the debtor since he has the burden of
proof. The testimony of the debtor creating merely an inference of payment
will not be regarded as conclusive on that issue.

Hence, for failure to present evidence to prove payment, petitioners defaulted

in their defense and in effect admitted the allegations of private respondents
PROTECTIVE MAXIMUM SECURITY AGENCY, INC., Petitioner, v. CELSO E. FUENTES, Respondent.

G.R. No. 169303, February 11, 2015

In Arriola v. Pilipino Star Ngayon, Inc., this court made the distinction between money claims under
Article 291 and the claims for backwages under Article 1146 of the Civil Code:

. . . Article 291 of the Labor Code . . . requires that money claims arising from employer-employee
relations [should] be filed within three years from the time the cause of action accrued:

Art. 291. MONEY CLAIMS. All money claims arising from employer-employee relations accruing during
the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued;
otherwise they shall be forever barred.

Article 291 covers claims for overtime pay, holiday pay, service incentive leave pay, bonuses, salary
differentials, and illegal deductions by an employer. It also covers money claims arising from seafarer
contracts.

The provision, however, does not cover "money claims" consequent to an illegal dismissal such as
backwages. It also does not cover claims for damages due to illegal dismissal. These claims are governed
by Article 1146 of the Civil Code of the Philippines, which provides:

Art. 1146. The following actions must be instituted within four years:

(1) Upon injury to the rights of the plaintiff[.]

This four-year prescriptive period applies to claims for backwages, not the three-year prescriptive period
under Article 291 of the Labor Code. A claim for backwages, according to this court, may be a money
claim "by reason of its practical effect." Legally, however, an award of backwages "is merely one of the
reliefs which an illegally dismissed employee prays the labor arbiter and the NLRC to render in his favor
as a consequence of the unlawful act committed by the employer." Though it results "in the enrichment
of the individual [illegally dismissed], the award of backwages is not in redress of a private right, but,
rather, is in the nature of a command upon the employer to make public reparation for his violation of
the Labor Code."

Actions for damages due to illegal dismissal are likewise actions "upon an injury to the rights of the
plaintiff." Article 1146 of the Civil Code of the Philippines, therefore, governs these actions. (Citations
omitted)

Petitioner admits that respondent filed the Complaint for illegal dismissal six (6) months after the first
time petitioner had refused to allow respondent to work. This is well within the four-year prescriptive
period provided by Article 1146 of the Labor Code, as mentioned in Arriola.

In Azcor Manufacturing, Inc. v. National Labor Relations Commission, the employee filed a Complaint for
illegal dismissal with a prayer for reinstatement four (4) months after the incident of illegal dismissal.
This court held that Article 1146 still applied:

In addition, an action for reinstatement by reason of illegal dismissal is one based on an injury which
may be brought within four (4) years from the time of dismissal pursuant to Art. 1146 of the Civil Code.
Hence, Capulso's case which was filed after a measly delay of four (4) months should not be treated with
skepticism or cynicism. By law and settled jurisprudence, he has four (4) years to file his complaint for
illegal dismissal. A delay of merely four (4) months in instituting an illegal dismissal case is more than
sufficient compliance with the prescriptive period. It may betray an unlettered man's lack of awareness
of his rights as a lowly worker but, certainly, he must not be penalized for his tarrying.

G.R. No. 198656, September 08, 2014

NANCY S. MONTINOLA, Petitioner, v. PHILIPPINE AIRLINES

Under the Labor Code, Labor Arbiters are authorized by law to award moral
and exemplary damages:ChanRoblesVirtualawlibrary
Art. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide within thirty (30) calendar days
after the submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-
agricultural:ChanRoblesVirtualawlibrary

. . . .

4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations[.]

The nature of moral damages is defined under our Civil Code. Article 2220
states that [w]illful injury to property may be a legal ground for awarding
moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract where
the defendant acted fraudulently or in bad faith. In Primero v. Intermediate
Appellate Court,71 this court stated that damages, as defined in the Civil
Code, is recoverable in labor cases. Thus, moral
damages:ChanRoblesVirtualawlibrary

. . . cannot be justified solely upon the premise (otherwise sufficient for

redress under the Labor Code) that the employer fired his employee without
just cause or due process. Additional facts must be pleaded and proven to
warrant the grant of moral damages under the Civil Code, these being, to
repeat, that the act of dismissal was attended by bad faith or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good customs,
or public policy; and, of course, that social humiliation, wounded feelings,
grave anxiety, etc., resulted therefrom.

Bad faith implies a conscious and intentional design to do a wrongful act for
a dishonest purpose or moral obliquity.73Cathay Pacific Airways v. Spouses
Vazquez74 established that bad faith must be proven through clear and
convincing evidence.75 This is because [b]ad faith and fraud . . . are serious
accusations that can be so conveniently and casually invoked, and that is
why they are never presumed. They amount to mere slogans or mudslinging
unless convincingly substantiated by whoever is alleging them.76 Here,
there was clear and convincing evidence of bad faith adduced in the lower
tribunals.
Moral damages are, thus, appropriate. In Almira v. B.F. Goodrich Philippines,
this court noted that unemployment brings untold hardships and sorrows on
those dependent on the wage-earner.81 This is also true for the case of
suspension. Suspension is temporary unemployment. During the year of her
suspension, Montinola and her family had to survive without her usual
salary. The deprivation of economic compensation caused mental anguish,
fright, serious anxiety, besmirched reputation, and wounded feelings. All
these are grounds for an award of moral damages under the Civil Code.

Under Article 2229 of the Civil Code, [e]xemplary or corrective damages are
imposed, by way of example or correction for the public good, in addition to
the moral, temperate, liquidated or compensatory damages. As this court
has stated in the past: Exemplary damages are designed by our civil law to
permit the courts to reshape behaviour that is socially deleterious in its
consequence by creating negative incentives or deterrents against such
behaviour.83cralawred

If the case involves a contract, Article 2332 of the Civil Code provides that
the court may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner. Thus,
in Garcia v. NLRC,84 this court ruled that in labor cases, the court may award
exemplary damages if the dismissal was effected in a wanton, oppressive or
malevolent manner.85cralawred

It is socially deleterious for PAL to suspend Montinola without just cause in

the manner suffered by her. Hence, exemplary damages are necessary to
deter future employers from committing the same acts.

Article 2208 of the Civil Code enumerates the instances when attorneys fees
can be awarded:ChanRoblesVirtualawlibrary
ART. 2208. In the absence of stipulation, attorneys fees and expenses of
litigation, other than judicial costs, cannot be recovered,
except:ChanRoblesVirtualawlibrary

(1) When exemplary damages are awarded;

(2) When the defendants act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the

plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to
satisfy the plaintiffs plainly valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and
skilled workers;

(8) In actions for indemnity under workmens compensation and employers

liability laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that
attorneys fees and expenses of litigation should be recovered.

In all cases, the attorneys fees and expenses of litigation must be

reasonable. (Emphasis supplied)

This case qualifies for the first, second, and seventh reasons why attorneys
fees are awarded under the Civil Code.

First, considering that we have awarded exemplary damages in this case,

attorneys fees can likewise be awarded.

Second, PALs acts and omissions compelled Montinola to incur expenses to

protect her rights with the National Labor Relations Commission and the
judicial system. She went through four tribunals, and she was assisted by
counsel. These expenses would have been unnecessary if PAL had sufficient
basis for its decision to discipline Montinola.

Finally, the action included recovery for wages. To bring justice to the illegal
suspension of Montinola, she asked for backwages for her year of
suspension.

CHERYLL SANTOS LEUS, Petitioner,

vs.
ST. SCHOLASTICA'S COLLEGE WESTGROVE and/or SR. EDNA QUIAMBAO,
OSB, Respondents.

G.R. No. 187226, January 28, 2015

Facts: Cheryll Santos Leus (petitioner) was hired by St. Scholastica's College Westgrove
(SSCW), a Catholic educational institution, as a non-teaching personnel. She engaged in pre-
marital sexual relations, got pregnant out of wedlock, married the father of her child, and was
dismissed by SSCW, in that order.

Petitioner filed a complaint for illegal dismissal with the Regional Arbitration Board of
the NLRC against respondents. Petitioner claimed that SSCW gravely abused its management
prerogative as there was no just cause for her dismissal. She maintained that her pregnancy out
of wedlock cannot be considered as serious misconduct since the same is a purely private affair
and not connected in any way with her duties as an employee of SSCW.

For their part, SSCW claimed that there was just cause to terminate the petitioners
employment with SSCW and that the same is a valid exercise of SSCWs management
prerogative. They maintained that engaging in pre-marital sex, and getting pregnant as a result
thereof, amounts to a disgraceful or immoral conduct, which is a ground for the dismissal of an
employee under the 1992 MRPS and the Labor Code.

The Labor Arbiter ruled in favor of respondents, pointing out that, as an employee of a
Catholic educational institution, the petitioner is expected to live up to the Catholic values taught
by SSCW to its students.
The NLRC affirmed the LA Decision ruling that the termination of the employment of
the personnel of private schools is governed by the 1992 MRPS; that Section 94(e) thereof cites
"disgraceful or immoral conduct" as a just cause for dismissal, in addition to the grounds for
termination of employment provided for under Article 282 of the Labor Code.
The petitioner once again elevated the case to the Court of Appeals. The CA upheld the
decision of the NLRC and further ruled that petitioners pregnancy out of wedlock is
scandalous per as per the work environment and social milieu that she was in. Moreover the CA
stated petitioners dismissal is a valid exercise of the employer-schools management prerogative
to discipline and impose penalties on erring employees pursuant to its policies, rules and
regulations.
The petitioner filed a motion for reconsideration but the same was denied. Thus, this
instant petition.

Issue: Whether or not the petitioner's conduct constitutes a ground for her dismissal.

Held:

The labor tribunals respective

conclusions that the petitioners
pregnancy is a "disgraceful or
immoral conduct" were arrived at
arbitrarily.

The CA and the labor tribunals affirmed the validity of the petitioners dismissal pursuant to Section
94(e) of the 1992 MRPS, which provides that:

Sec. 94. Causes of Terminating Employment In addition to the just causes enumerated in the Labor
Code, the employment of school personnel, including faculty, may be terminated for any of the
following causes:

xxxx

e. Disgraceful or immoral conduct;

xxxx

The labor tribunals concluded that the petitioners pregnancy out of wedlock, per se, is "disgraceful
and immoral"considering that she is employed in a Catholic educational institution. In arriving at such
conclusion, the labor tribunals merely assessed the fact of the petitioners pregnancy vis--visthe
totality of the circumstances surrounding the same.
However, the Court finds no substantial evidence to support the aforementioned conclusion arrived at
by the labor tribunals. The fact of the petitioners pregnancy out of wedlock, without more, is not
enough to characterize the petitioners conduct as disgraceful or immoral. There must be substantial
evidence to establish that pre-marital sexual relations and, consequently, pregnancy outof wedlock,
are indeed considered disgraceful or immoral.

The totality of the circumstances

surrounding the conduct alleged to
be disgraceful or immoral must be
assessed against the prevailing
norms of conduct.

In Chua-Qua v. Clave,37 the Court stressed that to constitute immorality, the circumstances of each
particular case must be holistically considered and evaluated in light of the prevailing norms of
conductand applicable laws.38Otherwise stated, it is not the totality of the circumstances surrounding
the conduct per se that determines whether the same is disgraceful or immoral, but the conduct that
is generally accepted by society as respectable or moral. If the conduct does not conform to what
society generally views as respectable or moral, then the conduct is considered as disgraceful or
immoral. Tersely put, substantial evidence must be presented, which would establish that a particular
conduct, viewed in light of the prevailing norms of conduct, is considered disgraceful or immoral.

Thus, the determination of whether a conduct is disgraceful or immoral involves a two-step process:
first, a consideration of the totality of the circumstances surrounding the conduct; and second, an
assessment of the said circumstances vis--visthe prevailing norms of conduct, i.e., what the society
generally considers moral and respectable.

That the petitioner was employed by a Catholic educational institution per se does not absolutely
determine whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to
determine whether the petitioners pregnancy out of wedlock is considered disgraceful or immoral in
accordance with the prevailing norms of conduct.

Public and secular morality should

determine the prevailing norms of
conduct, not religious morality.

However, determining what the prevailing norms of conduct are considered disgraceful or immoral is
not an easy task. An individuals perception of what is moral or respectable is a confluence of a myriad
of influences, such as religion, family, social status, and a cacophony of others. In this regard, the
Courts ratiocination in Estrada v. Escritor39 is instructive.

In Estrada, an administrative case against a court interpreter charged with disgraceful and immoral
conduct, the Court stressed that in determining whether a particular conduct can be considered as
disgraceful and immoral, the distinction between public and secular morality on the one hand, and
religious morality, on the other, should be kept in mind.40 That the distinction between public and
secular morality and religious morality is important because the jurisdiction of the Court extends only
to public and secular morality.41 The Court further explained that:

The morality referred to in the law is public and necessarily secular, not religiousx x x. "Religious
teachings as expressed in public debate may influence the civil public order but public moral disputes
may be resolved only on grounds articulable in secular terms." Otherwise, if government relies upon
religious beliefs in formulating public policies and morals, the resulting policies and morals would
require conformity to what some might regard as religious programs or agenda.The non-believers
would therefore be compelled to conform to a standard of conduct buttressed by a religious belief, i.e.,
to a "compelled religion," anathema to religious freedom. Likewise, if government based its actions
upon religious beliefs, it would tacitly approve or endorse that belief and thereby also tacitly
disapprove contrary religious or non-religious views that would not support the policy. As a result,
government will not provide full religious freedom for all its citizens, or even make it appear that those
whose beliefs are disapproved are second-class citizens. Expansive religious freedom therefore
requires that government be neutral in matters of religion; governmental reliance upon religious
justification is inconsistent with this policy of neutrality.

In other words, government action, including its proscription of immorality as expressed in criminal
law like concubinage, must have a secular purpose. That is, the government proscribes this conduct
because it is "detrimental (or dangerous) to those conditions upon which depend the existence and
progress of human society" and not because the conduct is proscribed by the beliefs of one religion or
the other. Although admittedly, moral judgments based on religion might have a compelling influence
on those engaged in public deliberations over what actions would be considered a moral
disapprobation punishable by law. After all, they might also be adherents of a religion and thus have
religious opinions and moral codes with a compelling influence on them; the human mind endeavors to
regulate the temporal and spiritual institutions of society in a uniform manner, harmonizing earth with
heaven. Succinctly put, a law could be religious or Kantian or Aquinian or utilitarian in its deepest
roots, but it must have an articulable and discernible secular purpose and justification to pass scrutiny
of the religion clauses.x x x.42(Citations omitted and emphases ours)

Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it pertains to public
and secular morality; it refers to those conducts which are proscribed because they are detrimental to
conditions upon which depend the existence and progress of human society. Thus, in Anonymous v.
Radam,43 an administrative case involving a court utility worker likewise charged with disgraceful and
immoral conduct, applying the doctrines laid down in Estrada, the Court held that:

For a particular conduct to constitute "disgraceful and immoral" behavior under civil service laws, it
must be regulated on account of the concerns of public and secular morality. It cannot be judged
based on personal bias, specifically those colored by particular mores. Nor should it be grounded on
"cultural" values not convincingly demonstrated to have been recognized in the realm of public policy
expressed in the Constitution and the laws. At the same time, the constitutionally guaranteed rights
(such as the right to privacy) should be observed to the extent that they protect behavior that may be
frowned upon by the majority.

Under these tests, two things may be concluded from the fact that an unmarried woman gives birth
out of wedlock:

(1) if the father of the child is himself unmarried, the woman is not ordinarily administratively
liable for disgraceful and immoral conduct.It may be a not-so-ideal situation and may cause
complications for both mother and child but it does not give cause for administrative sanction.
There is no law which penalizes an unmarried mother under those circumstances by reason of
her sexual conduct or proscribes the consensual sexual activity between two unmarried
persons. Neither does the situation contravene any fundamental state policy as expressed in
the Constitution, a document that accommodates various belief systems irrespective of
dogmatic origins.

(2) if the father of the child born out of wedlock is himself married to a woman other thanthe
mother, then there is a cause for administrative sanction against either the father or the
mother. In sucha case, the "disgraceful and immoral conduct" consists of having extramarital
relations with a married person. The sanctity of marriage is constitutionally recognized and
likewise affirmed by our statutes as a special contract of permanent union. Accordingly,
judicial employees have been sanctioned for their dalliances with married persons or for their
own betrayals of the marital vow of fidelity.

In this case, it was not disputed that, like respondent, the father of her child was unmarried.
Therefore, respondent cannot be held liable for disgraceful and immoral conduct simply because she
gave birth to the child Christian Jeon out of wedlock.44 (Citations omitted and emphases ours)

Both Estrada and Radamare administrative cases against employees in the civil service. The Court,
however, sees no reason not to apply the doctrines enunciated in Estrada and Radamin the instant
case. Estrada and Radamalso required the Court to delineate what conducts are considered disgraceful
and/or immoral as would constitute a ground for dismissal. More importantly, as in the said
administrative cases, the instant case involves an employees security of tenure; this case likewise
concerns employment, which is not merely a specie of property right, but also the means by which the
employee and those who depend on him live.45

It bears stressing that the right of an employee to security of tenure is protected by the Constitution.
Perfunctorily, a regular employee may not be dismissed unless for cause provided under the Labor
Code and other relevant laws, in this case, the 1992 MRPS. As stated above, when the law refers to
morality, it necessarily pertains to public and secular morality and not religious morality. Thus, the
proscription against "disgraceful or immoral conduct" under Section 94(e) of the 1992 MRPS, which is
made as a cause for dismissal, must necessarily refer to public and secular morality. Accordingly, in
order for a conduct tobe considered as disgraceful or immoral, it must be "detrimental (or dangerous)
to those conditions upon which depend the existence and progress of human society and not because
the conduct is proscribed by the beliefs of one religion or the other."

Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a teacher who had an extra-marital affair
with his co-teacher, who is likewise married, on the ground of disgraceful and immoral conduct under
Section 94(e) of the 1992 MRPS. The Court pointed out that extra-marital affair is considered as a
disgraceful and immoral conduct is an afront to the sanctity of marriage, which is a basic institution of
society, viz:

We cannot overemphasize that having an extra-marital affair is an afront to the sanctity of marriage,
which is a basic institution of society. Even our Family Code provides that husband and wife must live
together, observe mutual love, respect and fidelity. This is rooted in the fact that both our Constitution
and our laws cherish the validity of marriage and unity of the family. Our laws, in implementing this
constitutional edict on marriage and the family underscore their permanence, inviolability and
solidarity.47

The petitioners pregnancy out of

wedlock is not a disgraceful or
immoral conduct since she and the
father of her child have no
impediment to marry each other.

In stark contrast to Santos, the Court does not find any circumstance in this case which would lead
the Court to conclude that the petitioner committed a disgraceful or immoral conduct. It bears
stressing that the petitioner and her boyfriend, at the time they conceived a child, had no legal
impediment to marry. Indeed, even prior to her dismissal, the petitioner married her boyfriend, the
father of her child. As the Court held in Radam, there is no law which penalizes an unmarried mother
by reason of her sexual conduct or proscribes the consensual sexual activity between two unmarried
persons; that neither does such situation contravene any fundamental state policy enshrined in the
Constitution.

Admittedly, the petitioner is employed in an educational institution where the teachings and doctrines
of the Catholic Church, including that on pre-marital sexual relations, is strictly upheld and taught to
the students. That her indiscretion, which resulted in her pregnancy out of wedlock, is anathema to
the doctrines of the Catholic Church. However, viewed against the prevailing norms of conduct, the
petitioners conduct cannot be considered as disgraceful or immoral; such conduct is not denounced
by public and secular morality. It may be an unusual arrangement, but it certainly is not disgraceful or
immoral within the contemplation of the law.

To stress, pre-marital sexual relations between two consenting adults who have no impediment to
marry each other, and, consequently, conceiving a child out of wedlock, gauged from a purely public
and secular view of morality, does not amount to a disgraceful or immoral conduct under Section
94(e) of the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the petitioners dismissal. The labor
tribunals arbitrarily relied solely on the circumstances surrounding the petitioners pregnancy and its
supposed effect on SSCW and its students without evaluating whether the petitioners conduct is
indeed considered disgraceful or immoral in view of the prevailing norms of conduct. In this regard,
the labor tribunals respective haphazard evaluation of the evidence amounts to grave abuse of
discretion, which the Court will rectify.

The labor tribunals finding that the petitioners pregnancy out of wedlock despite the absence of
substantial evidence is not only arbitrary, but a grave abuse of discretion, which should have been set
right by the CA.

The petitioners dismissal is not a

valid exercise of SSCWs
management prerogative.

The CA be labored the management prerogative of SSCW to discipline its employees. The CA opined
that the petitioners dismissal is a valid exercise of management prerogative to impose penalties on
erring employees pursuant to its policies, rules and regulations.

The Court does not agree.

The Court has held that "management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments, working methods, time,
place and manner of work, processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay off of workers and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not absolute as it must beexercised in
good faith and with due regard to the rights of labor." Management cannot exercise its prerogative in
a cruel, repressive, or despotic manner.53

SSCW, as employer, undeniably has the right to discipline its employees and, if need be, dismiss
themif there is a valid cause to do so. However, as already explained, there is no cause to dismiss the
petitioner. Her conduct is not considered by law as disgraceful or immoral. Further, the respondents
themselves have admitted that SSCW, at the time of the controversy, does not have any policy or rule
against an employee who engages in pre-marital sexual relations and conceives a child as a result
thereof. There being no valid basis in law or even in SSCWs policy and rules, SSCWs dismissal of the
petitioner is despotic and arbitrary and, thus, not a valid exercise of management prerogative.

In sum, the Court finds that the petitioner was illegally dismissed as there was no just cause for the
termination of her employment. SSCW failed to adduce substantial evidence to establish that the
petitioners conduct, i.e., engaging in pre-marital sexual relations and conceiving a child out of
wedlock, assessed in light of the prevailing norms of conduct, is considered disgraceful or immoral.
The labor tribunals gravely abused their discretion in upholding the validity of the petitioners
dismissal as the charge against the petitioner lay not on substantial evidence, but on the bare
allegations of SSCW. In turn, the CA committed reversible error in upholding the validity of the
petitioners dismissal, failing torecognize that the labor tribunals gravely abused their discretion in
ruling for the respondents.
PROTECTIVE MAXIMUM SECURITY AGENCY, INC., Petitioner,
vs.
CELSO E. FUENTES, Respondent.

G.R. No. 169303, February 11, 2015

Facts: Respondent Fuentes was hired as a security guard by petitioner Protective in November
1999. Petitioner assigned him to a security checkpoint designated as Post33 in Agusandel Sur.
Meanwhile on 20 July 2000, a group of armed forces ransacked Post 33, inflicted violence
against respondent and his fellow security guards and took their guns. Thereafter, respondent,
together with his fellow security guards reported the incident to the PNP. However on 24 July
2000, respondent was arrested and detained by the PNP on the ground that respondent allegedly
conspired with the New Peoples Army. A complaint of robbery was filedagainst him but the
same was eventually dismissed on 15 August 2001.
On14 March 2002, respondent filed a case for illegal dismissal against petitioner before
the Labor Arbiter claiming that right after the criminal complaint against him was dismissed, he
returned to work but he was refused on the ground he was a member of the NPA and that his
position had already been filled up by another security guard. On the other hand, petitioner
claims that since the incident of 20 July 2000, private respondent has not yet reported to any of
his superiors.
The LA ruled against respondent stating that he failed to state with sufficient definiteness
and/or clarity the time and date when he allegedly reported for work after the dismissal of his
case. However, the NLRC reversed the LAs decision.

Aggrieved, petitioner elevated the case to the CAcontending that the Complaint of illegal
dismissal filed by respondent had no basis since petitioner filed it six (6) months from the date he
was allegedly dismissed. According to petitioner, this delay in the filing of the Complaint
strengthens its claim that this was a mere afterthought on the part of respondent.

The CA dismissed the petition. Petitioner filed a motion for reconsideration but the same
was denied.Thus, this instant petition.

Issue: Whether or notthe six-month period from the alleged date of dismissal by petitioner to the
date of filing of the complaint is justified.

Held: Yes.

In Arriola v. Pilipino Star Ngayon, Inc.,121 this court made the distinction between money
claims under Article 291 and the claims for backwages under Article 1146 of the Civil Code:
. . . Article 291 of the Labor Code

. . . requires that money claims arising from employer-employee relations [should] be filed
within three years from the time the cause of action accrued:
Art. 291. MONEY CLAIMS. All money claims arising from employer-employee relations
accruing during the effectivity of this Code shall be filed within three (3) years from the time
the cause of action accrued; otherwise they shall be forever barred.

Article 291 covers claims for overtime pay, holiday pay, service incentive leave pay,
bonuses, salary differentials, and illegal deductions by an employer. It also covers money
claims arising from seafarer contracts.

The provision, however, does not cover "money claims" consequent to an illegal dismissal
such as backwages. It also does not cover claims for damages due to illegal dismissal.
These claims are governed by Article 1146 of the Civil Code of the Philippines, which
provides:

Art. 1146. The following actions must be instituted within four years:

(1) Upon injury to the rights of the plaintiff[.]

. . . . This four-year prescriptive period applies to claims for backwages, not the three-year
prescriptive period under Article 291 of the Labor Code. A claim for backwages, according to
this court, may be a money claim "by reason of its practical effect." Legally, however, an
award of backwages "is merely one of the reliefs which an illegally dismissed employee
prays the labor arbiter and the NLRC to render in his favor as a consequence of the unlawful
act committed by the employer." Though it results "in the enrichment of the individual
[illegally dismissed], the award of backwages is not in redress of a private right, but, rather,
is in the nature of a command upon the employer to make public reparation for his violation
of the Labor Code." Actions for damages due to illegal dismissal are likewise actions "upon
an injury to the rights of the plaintiff." Article 1146 of the Civil Code of the Philippines,
therefore, governs these actions.122 (Citations omitted)

Petitioner admits that respondent filed the Complaint for illegal dismissal six (6) months
after the first time petitioner had refused to allow respondent to work. This is well within the
four-year prescriptive period provided by Article 1146 of the Labor Code, as mentioned in
Arriola.

In Azcor Manufacturing, Inc. v. National Labor Relations Commission,123 the employee filed
a Complaint for illegal dismissal with a prayer for reinstatement four (4) months after the
incident of illegal dismissal.124 This court held that Article 1146 still applied:

In addition, an action for reinstatement by reason of illegal dismissal is one based on an

injury which may be brought within four (4) years from the time of dismissal pursuant to
Art. 1146 of the Civil Code. Hence, Capulsos case which was filed after a measly delay of
four (4) months should not be treated with skepticism or cynicism. By law and settled
jurisprudence, he has four (4) years to file his complaint for illegal dismissal. A delay of
merely four (4) months in instituting an illegal dismissal case is more than sufficient
compliance with the prescriptive period. It may betray an unlettered mans lack of
awareness of his rights as a lowly worker but, certainly, he must not be penalized for his
tarrying.125

In this case, the six-month period from the date of dismissal to the filing of the Complaint
was well within reason and cannot be considered "inexcusable delay." The cases filed before
the courts and administrative tribunals originate from human experience. Thus, this court
will give due consideration to the established facts which would justify the gap of six (6)
months prior to the filing of the complaint.

First, respondent received a beating from petitioners employees at the time of his
detention. Even after the dismissal of the Complaint against him, it would have been
reasonable for him to take time to recover from the physical and emotional trauma he
received.

Second, after the charges against him were dropped, respondent averred that he
"repeatedly"126 asked petitioner if he could resume employment. The Court of Appeals
affirmed this finding. Prior to the filing of the Complaint on March 14, 2002, respondent did
not sleep on his right to resume work.

Lastly, this court takes notice of the considerable distance between respondents last known
address at Sta.Josefa, Trento, Agusan del Sur and Post 33 at Picop Resources, Inc., Upper
New Visayas, Agusan del Sur. The distance he had to travel to ask petitioner to resume
work would have placed an understandable constraint on respondents time and resources.

Respondent cannot be prejudiced by the six-month period. Petitioners argument on this

matter must fail.

NANCY S. MONTINOLA, Petitioner,

vs.
PHILIPPINE AIRLINES, Respondent.

G.R. No. 198656, September 8, 2014

Facts: PetitionerMontinola was employed as a flightattendant of respondent Philippine Airlines

(PAL). On 29 January 2008, petitioner and other flight crew members were subjected to custom
searches whereinitems from the airline were recovered from the flight crew by customs
officials.Asfter an investigation was conducted, petitioner was among those implicated since her
name was mentioned by a custom official who sent an email to PAL regarding the search.
Petitioner gave a handwritten explanation stating that she did not take anything from the aircraft.
However, upon further investigation PAL found petitioner guilty of 11 violations. She was meted
out with 1 year suspension without pay.

Thereafter, petitioner brought the matter before the Labor Arbiter. The LA found her
suspension illegalfinding that PAL never presented evidence that showed petitioner as the one
responsible for any of the illegally taken airline items. Thus, the LA further ruled that petitioner
is entitled to backwages and to moral and exemplary damages totality ofrespondents acts clearly
shows that complainant had been treated unfairly and capriciously, for which complainant should
be awarded moral damages.

PAL appealed LAs decision to the NLRC which affirmed the formers decision. PAL
appealed the Commissions decision to the Court of Appeals through a petition for certiorari.
The CA affirmed the decisions of the LA and NLRC in finding the suspension illegal.However,
the CA deleted the moral and exemplary damages stating that settled is the rule that moral
damages are recoverable only where the dismissal or suspension of the employee was attended
by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary
to morals, good customs or public policy. It ruled that there is no showing that PAL was moved
by any ill will or motive in suspending private respondent because petitioner was given every
opportunity to refute the charges against her. Thus, this negates the existence of bad faith on the
part of petitioner.

Montinola filed a partial motion for reconsideration,praying that the award of moral and
exemplary damages be reintegrated into the decision. The CA denied the petition. Thus, this
instant petition.

Issue:Whether Montinolas illegal suspension entitled her to an award of moral and exemplary
damages and attorneys fees.
Held:Yes.The employee is entitled to moral damages when the employer acted a) in bad faith or
fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or
public policy.
PALs actions in implicating Montinola and penalizing her for no clear reason show bad
faith. PALs denial of her request to clarify the charges against her shows its intent to do a
wrongful act for moral obliquity. If it were acting in good faith, it would have gathered more
evidence from its contact in Honolulu or from other employees before it started pointing fingers.
PAL should not have haphazardly implicated Montinola and denied her livelihood even for a
moment.

Montinola was found by PAL to be guilty of allthe charges against her. According to
PAL, "[t]hese offenses call for the imposition of the penalty of Termination, however, we are
imposing upon you the reduced penalty of One (01) year Suspension." It is not clear how she
could violate all the prestations in the long list of rules she allegedly violated. There is also no
clear explanation why termination would be the proper penalty to impose. That the penalty was
downgraded, without legal explanation, to suspension appears as a further badgeof intimidation
and bad faith on the part of the employer.Nothing in PALs action supports the finding that
Montinola committed specific acts constituting violations of PALs Code of Discipline.

This act of PAL is contrary tomorals, good customs, and public policy. PAL was willing
to deprive Montinola of the wages she would have earned during her year of suspension even if
there was no substantial evidence that she was involved in the pilferage.Moral damages are, thus,
appropriate. In Almira v. B.F. Goodrich Philippines, this court noted that unemployment "brings
untold hardships and sorrows on those dependent on the wage-earner." This is also true for the
case of suspension. Suspension istemporary unemployment. During the year of her suspension,
Montinola and her family had to survive without her usual salary. The deprivation of economic
compensation caused mental anguish, fright, serious anxiety, besmirched reputation, and
wounded feelings. All these are grounds for an award of moral damages under the Civil Code.
 Montinola is also entitled to exemplary damages.Under Article 2229 of the Civil Code,
"[e]xemplary or corrective damages are imposed, by way of example or correction for the public
good, in addition to the moral, temperate, liquidated or compensatory damages." If the case
involves a contract, Article 2332 of the Civil Code provides that "the court may award
exemplary damages if the defendant acted in a wanton, fraudulent, reckless,oppressive or
malevolent manner." Thus, in Garcia v. NLRC,this court ruled that in labor cases, the court may
award exemplary damages "if the dismissal was effected in a wanton, oppressive or malevolent
manner."

It is socially deleterious for PAL to suspend Montinola without just cause in the manner
suffered by her.Hence, exemplary damages are necessary to deter future employers from
committing the same acts.

GEORGE A. ARRIOLA, Petitioner,

vs.
PILIPINO STAR .NGAYON, INC. and/or MIGUEL G. BELMONTE, Respondents.

The prescriptive period for filing an illegal dismissal complaint is four years from the time the cause of action accrued. This
four-year prescriptive period, not the three-year period for filing money claims under Article 291 of the Labor Code, applies
to claims for backwages and damages due to illegal dismissal.

Arriolas claims for backwages and

damages have not yet prescribed when he filed his complaint
with the National Labor Relations Commission

The Labor Arbiter, the National Labor Relations Commission, and the Court of Appeals all ruled that Arriolas claims for
unpaid salaries, backwages, damages, and attorneys fees have prescribed. They cited Article 291 of the Labor Code, which
requires that money claims arising from employer-employee relations be filed within three years from the time the cause of
action accrued:

Art. 291. MONEY CLAIMS. All money claims arising from employer-employee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

Article 291 covers claims for overtime pay, 43 holiday pay,44 service incentive leave pay,45 bonuses,46 salary differentials,47 and
illegal deductions by an employer.48 It also covers money claims arising from seafarer contracts. 49

The provision, however, does not cover "money claims" consequent to an illegal dismissal such as backwages.It also does
not cover claims for damages due to illegal dismissal. These claims are governed by Article 1146 of the Civil Code of the
Philippines, which provides:

Art. 1146. The following actions must be instituted within four years:

(1) Upon injury to the rights of the plaintiff[.]

In Callanta v. Carnation Philippines, Inc., 50 Virgilio Callanta worked as a salesperson for Carnation Philippines, Inc. beginning
in January 1974. On June 1, 1979, Carnation filed with the Regional Office No. X of the then Ministry of Labor and
Employment an application for issuance of clearance to terminate Callanta. The application was granted, and Callantas
employment was declared terminated effective June 1, 1979. 51

On July 5, 1982, Callanta filed a complaint for illegal dismissal with claims for backwages and damages. Inits defense,
Carnation argued that Callantas complaint was barred by prescription. 52

Carnation stressed that Callanta filed his complaint three years, one month, and five days after his termination. Since illegal
dismissal is a violation of the Labor Code, Carnation argued that Callantas complaint was barred by Article 290 of the Labor
Code.53 Under Article 290, offenses penalized under the Code shall prescribe in three years. 54

As to Callantas claims for backwages and damages, Carnation contended that these claims arose from employer-employee
relations. Since Callanta filed his complaint beyond the three-year period under Article 291 of the Labor Code, his claims for
backwages and damages were forever barred.55

This court ruled that Callantas complaint for illegal dismissal had not yet prescribed. Although illegal dismissal is a violation
of the Labor Code, it is not the "offense" contemplated in Article 290. 56 Article 290 refers to illegal acts penalized under the
Labor Code, including committing any of the prohibited activities during strikes or lockouts, unfair labor practices, and illegal
recruitment activities.57 The three-year prescriptive period under Article 290, therefore, does not apply to complaints for illegal
dismissal.

Instead, "by way of supplement,"58 Article 1146 of the Civil Code of the Philippines governs complaints for illegal dismissal.
Under Article 1146, an action based upon an injury to the rights of a plaintiff must be filed within four years. This court
explained:

. . . when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality
of one's dismissal from employment constitutes, in essence, an action predicated "upon an injury to the rights of the
plaintiff," as contemplated under Art. 1146 of the New Civil Code, which must be brought within four [4] years. 59

This four-year prescriptive period applies to claims for backwages, not the three-year prescriptive period under Article 291 of
the Labor Code. A claim for backwages, according to this court, may be a money claim "by reason of its practical
effect."60 Legally, however, an award of backwages "is merely one of the reliefs which anillegally dismissed employee prays
the labor arbiter and the NLRC to render inhis favor as a consequence of the unlawful act committed by the
employer."61 Though it results "in the enrichment of the individual [illegally dismissed], the award of backwages is not in
redress of a private right, but, rather, is in the nature of a command upon the employer to make public reparation for his
violation of the Labor Code."62

Actions for damages due to illegal dismissal are likewise actions "upon an injury to the rights of the plaintiff." Article 1146 of
the Civil Code of the Philippines, therefore, governs these actions. 63

Callanta filed his complaint for illegal dismissal with claims for backwages and damages three years, one month, and five
days from his termination. Thus, this court ruled that Callanta filed his claims for backwages and damages well within the
four-year prescriptive period.64

This court applied the Callanta ruling in Texon Manufacturing v. Millena. 65 In Texon, Marilyn and Grace Millena commenced
work for Texon Manufacturing in 1990 until Texon terminated their employment. Texon first dismissed Grace on May 31,
1994 then dismissed Marilyn on September 8, 1995. 66

On August 21, 1995, Grace filed a complaint for money claims representing underpayment and non-payment of wages,
overtime pay, and holiday pay with the National Labor Relations Commission. Marilyn filed her own complaint for illegal
dismissal with prayer for payment of full backwages and benefits on September 11, 1995.

This court ruled that both complaints had not yet prescribed. With respect to Graces complaint for overtime pay and holiday
pay, this court ruled that the three-year prescriptiveperiod under Article 291 of the Labor Code applied. Since Grace filed her
claim one year, one month, and 21 days from her dismissal, her claims were filed within the three-year prescriptive
period.70 With respect to Marilyns complaint for illegal dismissal with claims for backwages, this court while citing Callanta as
legal basis ruled that the four-year prescriptive period under Article 1146 of the Civil Code of the Philippines applied. Since
Marilyn filed her complaint three days from her dismissal, she filed her complaint well within the four-year prescriptive
period.71 Applying these principles in this case, we agree that Arriolas claims for unpaid salaries have prescribed. Arriola
1w phi 1

filed his complaint three years and one day from the time he was allegedly dismissed and deprived of his salaries. Since a
claim for unpaid salaries arises from employer-employee relations, Article 291 of the Labor Code applies. 72 Arriolas claim for
unpaid salaries was filed beyond the three-year prescriptive period.

However, we find that Arriolas claims for backwages, damages, and attorneys fees arising from his claim of illegal dismissal
have not yet prescribed when he filed his complaint with the Regional Arbitration Branch for the National Capital Region
ofthe National Labor Relations Commission. As discussed, the prescriptive period for filing an illegal dismissal complaint is
four years from the time the cause of action accrued. Since an award of backwages is merely consequent to a declaration of
illegal dismissal, a claim for backwages likewise prescribes in four years.

The four-year prescriptive period under Article 1146 also applies to actions for damages due to illegal dismissal since such
actions are based on an injury to the rights of the person dismissed. In this case, Arriola filed his complaint three years and
one day from his alleged illegal dismissal.He, therefore, filed his claims for backwages, actual, moral and exemplary
damages, and attorneys fees well within the four-year prescriptive period.

All told, the Court of Appeals erred infinding that Arriolas claims for damages have already prescribed when he filed his
illegal dismissal complaint.

G.R. No. 180636 March 13, 2013

LORENZO T. TANGGA-AN,
vs.
PHILIPPINE TRANSMARINE CARRIERS, INC., UNIVERSE TANKSHIP DELAWARE LLC, and CARLOS C. SALINAS.

pursuant to Section 1024 of RA 8042. The Court did not agree and hence modified the judgment in said case. It held that,
following the wording of Section 10 and its ruling in Marsaman Manning Agency, Inc. v. National Labor Relations
Commission,25 when the illegally dismissed employees employment contract has a term of less than one year, he/she shall
be entitled to recovery of salaries representing the unexpired portion of his/her employment contract. Indeed, there was
nothing even vaguely confusing in the Courts citation therein of Marsaman:

In Marsaman Manning Agency, Inc. vs. NLRC, involving Section 10 of Republic Act No. 8042, we held:

We cannot subscribe to the view that private respondent is entitled to three (3) months salary only. A plain reading of Sec.
1w phi1

10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his
salaries for the unexpired portion of his employment contract or three (3) months salary for every year of the unexpired term,
whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or
more. This is evident from the wording "for every year of the unexpired term" which follows the wording "salaries x x x for
three months." To follow petitioners thinking that private respondent is entitled to three (3) months salary only simply
because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to
some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken
that every part or word thereof be given effect since the lawmaking body is presumed to know the meaning of the words
employed in the statute and to have used them advisedly. Ut res magis valeat quam pereat.
Xxx

At this juncture, the courts, especially the CA, should be reminded to read and apply this Courts labor pronouncements with
utmost care and caution, taking to mind that in the very heart of the judicial system, labor cases occupy a special place.
More than the State guarantees of protection of labor and security of tenure, labor disputes involve the fundamental survival
of the employees and their families, who depend upon the former for all the basic necessities in life.

Thus, petitioner must be awarded his salaries corresponding to the unexpired portion of his six-months employment
contract, or equivalent to four months. This includes all his corresponding monthly vacation leave pay and tonnage bonuses
which are expressly provided and guaranteed in his employment contract as part of his monthly salary and benefit package.
These benefits were guaranteed to be paid on a monthly basis, and were not made contingent. In fact, their monetary
equivalent was fixed under the contract: US$2,500.00 for vacation leave pay and US$700.00 for tonnage bonus each
month. Thus, petitioner is entitled to back salaries of US$32,800 (or US$5,000 + US$2,500 + US$700 = US$8,200 x 4
months). "Article 279 of the Labor Code mandates that an employees full backwages shall be inclusive of allowances and
other benefits or their monetary equivalent."27 As we have time and again held, "it is the obligation of the employer to pay an
illegally dismissed employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses and
general increases, to which he would have been normally entitled had he not been dismissed and had not stopped
working."28 This well-defined principle has likewise been lost on the CA in the consideration of the case.

The Courts discussion on the award of attorneys fees in Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-
East Zone Union v. Manila Water Company, Inc.,29speaking through Justice Brion, is instructive, viz:

Article 111 of the Labor Code, as amended, governs the grant of attorneys fees in labor cases:

Art. 111. Attorneys fees. (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys
fees equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of
wages, attorneys fees which exceed ten percent of the amount of wages recovered.

Section 8, Rule VIII, Book III of its Implementing Rules also provides, viz.:

Section 8. Attorneys fees. Attorneys fees in any judicial or administrative proceedings for the recovery of wages shall not
exceed 10% of the amount awarded. The fees may be deducted from the total amount due the winning party.

We explained in PCL Shipping Philippines, Inc. v. National Labor Relations Commission that there are two commonly
accepted concepts of attorneys fees the ordinary and extraordinary. In its ordinary concept, an attorneys fee is the
reasonable compensation paid to a lawyer by his client for the legal services the former renders; compensation is paid for
the cost and/or results of legal services per agreement or as may be assessed. In its extraordinary concept, attorneys fees
are deemed indemnity for damages ordered by the court to be paid by the losing party to the winning party. The instances
when these may be awarded are enumerated in Article 2208 of the Civil Code, specifically in its paragraph 7 on actions for
recovery of wages, and is payable not to the lawyer but to the client, unless the client and his lawyer have agreed that the
award shall accrue to the lawyer as additional or part of compensation.

We also held in PCL Shipping that Article 111 of the Labor Code, as amended, contemplates the extraordinary concept of
attorneys fees and that Article 111 is an exception to the declared policy of strict construction in the award of attorneys
fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any
showing that the employer acted maliciously or in bad faith when it withheld the wages. x x x
We similarly so ruled in RTG Construction, Inc. v. Facto and in Ortiz v. San Miguel Corporation. In RTG Construction, we
specifically stated:

'Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and, thus, incur
expenses to protect his rights and interests, a monetary award by way of attorney's fees is justifiable under Article Ill of the
Labor Code; Section 8, Rule VIII, Book III of its Implementing Rules; and paragraph 7, Article 208 of the Civil Code. The
award of attorney's fees is proper, and there need not be any showing that the employer acted maliciously or in bad faith
when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.'

In PCL Shipping, we found the award of attorney's fees due and appropriate since the respondent therein incurred legal
expenses after he was forced to file an action for recovery of his lawful wages and other benefits to protect his rights. From
this perspective and the above precedents, we conclude that the CA erred in ruling that a finding of the employer's malice or
bad faith in withholding wages must precede an award of attorney's fees under Article Ill of the Labor Code. To reiterate, a
plain showing that the lawful wages were not paid without justification is sufficient.

G.R. No. 192998 April 2, 2014

BERNARD A. TENAZAS, JAIME M. FRANCISCO and ISIDRO G. ENDRACA, Petitioners,

vs.
R. VILLEGAS TAXI TRANSPORT and ROMUALDO VILLEGAS, Respondents.

In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the
respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel file
that could somehow depict his status as an employee. Anent his claim that he was not issued with employment records, he
could have, at least, produced his social security records which state his contributions, name and address of his employer,
as his co-petitioner Tenazas did. He could have also presented testimonial evidence showing the respondents exercise of
control over the means and methods by which he undertakes his work. This is imperative in light of the respondents denial
of his employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that he was his employer.
Specifically, in his Affidavit,36 Emmanuel alleged that Francisco was employed as a spare driver in his taxi garage from
January 2006 to December 2006, a fact that the latter failed to deny or question in any of the pleadings attached to the
records of this case. The utter lack of evidence is fatal to Franciscos case especially in cases like his present predicament
when the law has been very lenient in not requiring any particular form of evidence or manner of proving the presence of
employer-employee relationship.

G.R. No. 178184 January 29, 2014

GRAND ASIAN SHIPPING LINES, INC., EDUARDO P. FRANCISCO and WILLIAM HOW, Petitioners,
vs.
WILFREDO GALVEZ, JOEL SALES, CRISTITO GRUTA, DANILO ARGUELLES, RENATO BATAYOLA, PATRICIO
FRESMILLO,* JOVY NOBLE, EMILIO DOMINICO, BENNY NILMAO, and JOSE AUSTRAL,

On the other hand, for failure to effectively refute the awards for 13th month pay for the period that respondents were
illegally dismissed, unpaid salaries and salary differentials, 68 we affirm the grant thereof as computed by the Labor Arbiter.
Petitioners evidence which consist of a mere tabulation 69 of the amount of actual benefits paid and given to respondents is
self-serving as it does not bear the signatures of the employees to prove that they had actually received the amounts stated
therein.