G.R. No.
129329 July 31, 2001 Petitioner was required to explain within two (2) days why she should not be
ESTER M. ASUNCION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division, MABINI
MEDICAL CLINIC and DR. WILFRIDO JUCO, respondents.
KAPUNAN, J.:
In her petition filed before this Court, Ester Asuncion prays that the Decision, dated
November 29, 1996, and the Resolution, dated February 20,1997, of the public
respondent National Labor Relations Commission, Second Division, in NLRC CA.
011188 which reversed the Decision of the Labor Arbiter, dated May 15, 1996 be set
aside.
The antecedents of this case are as follows:
On August 16, 1993, petitioner Ester M. Asuncion was employed as an
accountant/bookkeeper by the respondent Mabini Medical Clinic. Sometime in May
1994, certain officials of the NCR-Industrial Relations Division of the Department of
Labor and Employment conducted a routine inspection of the premises of the
respondent company and discovered upon the disclosure of the petitioner of
(documents) violations of the labor standards law such as the non-coverage from the
SSS of the employees. Consequently, respondent Company was made to correct
these violations.
On August 9, 1994, the private respondent, Medical Director Wilfrido Juco, issued a
memorandum to petitioner charging her with the following offenses:
1. Chronic Absentism (sic) – You have incurred since Aug. 1993 up to the
present 35 absences and 23 half-days.
2. Habitual tardiness – You have late (sic) for 108 times. As shown on the
record book.
3. Loitering and wasting of company time – on several occasions and
witnessed by several employees.
4. Getting salary of an absent employee without acknowledging or signing
for it.
5. Disobedience and insubordination - continued refusal to sign memos
given to you.1
terminated based on the above charges.
Three days later, in the morning of August 12, 1994, petitioner submitted her
response to the memorandum. On the same day, respondent Dr. Juco, through a letter
dated August 12, 1994, dismissed the petitioner on the ground of disobedience of
lawful orders and for her failure to submit her reply within the two-day period.
This prompted petitioner to file a case for illegal termination before the NLRC.
In a Decision, dated May 15, 1996, Labor Arbiter Manuel Caday rendered judgment
declaring that the petitioner was illegally dismissed. The Labor Arbiter found that the
private respondents were unable to prove the allegation of chronic absenteeism as it
failed to present in evidence the time cards, logbooks or record book which
complainant signed recording her time in reporting for work. These documents,
according to the Labor Arbiter, were in the possession of the private respondents. In
fact, the record book was mentioned in the notice of termination. Hence, the non-
presentation of these documents gives rise to the presumption that these documents
were intentionally suppressed since they would be adverse to private respondent’s
claim. Moreover, the Labor Arbiter ruled that the petitioner’s absences were with the
conformity of the private respondents as both parties had agreed beforehand that
petitioner would not report to work on Saturdays. The handwritten listing of the days
when complainant was absent from work or late in reporting for work and even the
computerized print-out, do not suffice to prove that petitioner’s absences were
unauthorized as they could easily be manufactured. 2 Accordingly, the dispositive
portion of the decision states, to wit:
WHEREFORE, Premises Considered, judgment is hereby rendered
declaring the dismissal of the complainant as illegal and ordering the
respondent company to immediately reinstate her to her former position
without loss of seniority rights and to pay the complainant’s backwages and
other benefits, as follows:
1) P73,500.00 representing backwages as of the date of this
decision until she is actually reinstated in the service;
2) P20,000.00 by way of moral damages and another P20,000.00
representing exemplary damages; and
3) 10% of the recoverable award in this case representing
attorney’s fees.
SO ORDERED.3
Page 1 of 15
On appeal, public respondent NLRC rendered the assailed decision which set aside
the Labor Arbiter’s ruling. Insofar as finding the private respondents as having failed
to present evidence relative to petitioner’s absences and tardiness, the NLRC agrees
with the Labor Arbiter. However, the NLRC ruled that petitioner had admitted the
tardiness and absences though offering justifications for the infractions. The decretal
portion of the assailed decision reads:
WHEREFORE, premises considered, the appealed decision is hereby
VACATED and SET ASIDE and a NEW ONE entered dismissing the
complaint for illegal dismissal for lack of merit.
However, respondents Mabini Medical Clinic and Dr. Wilfrido Juco are
jointly and solidarily ordered to pay complainant Ester Asuncion the
equivalent of her three (3) months salary for and as a penalty for
respondents’ non-observance of complainant’s right to due process.
SO ORDERED.4
Petitioner filed a motion for reconsideration which the public respondent denied in
its Resolution, dated February 19, 1997. Hence, petitioner through a petition
for certiorari under Rule 65 of the Rules of Court seeks recourse to this Court and
raises the following issue:
THE PUBLIC RESPONDENT ERRED IN FINDING THAT THE
PETITIONER WAS DISMISSED BY THE PRIVATE RESPONDENT
FOR A JUST OR AUTHORIZED CAUSE.
The petition is impressed with merit.
Although, it is a legal tenet that factual findings of administrative bodies are entitled
to great weight and respect, we are constrained to take a second look at the facts
before us because of the diversity in the opinions of the Labor Arbiter and the
NLRC.5 A disharmony between the factual findings of the Labor Arbiter and those
of the NLRC opens the door to a review thereof by this Court. 6
It bears stressing that a worker’s employment is property in the constitutional sense.
He cannot be deprived of his work without due process. In order for the dismissal to
be valid, not only must it be based on just cause supported by clear and convincing
evidence,7 the employee must also be given an opportunity to be heard and defend
himself. 8 It is the employer who has the burden of proving that the dismissal was
with just or authorized cause.9 The failure of the employer to discharge this burden
means that the dismissal is not justified and that the employee is entitled to
reinstatement and backwages.10
In the case at bar, there is a paucity of evidence to establish the charges of
absenteeism and tardiness. We note that the employer company submitted mere
handwritten listing and computer print-outs. The handwritten listing was not signed
by the one who made the same. As regards the print-outs, while the listing was
computer generated, the entries of time and other annotations were again handwritten
and unsigned.11
We find that the handwritten listing and unsigned computer print-outs were
unauthenticated and, hence, unreliable. Mere self-serving evidence of which the
listing and print-outs are of that nature should be rejected as evidence without any
rational probative value even in administrative proceedings. For this reason, we find
the findings of the Labor Arbiter to be correct. On this point, the Labor Arbiter ruled,
to wit:
x x x In the instant case, while the Notice of Termination served on the
complainant clearly mentions the record book upon which her tardiness
(and absences) was based, the respondent (company) failed to establish
(through) any of these documents and the handwritten listing,
notwithstanding, of (sic) the days when complainant was absent from work
or late in reporting for work and even the computerized print-outs, do not
suffice to prove the complainant’s absences were unauthorized as they
could easily be manufactured. x x x12
In IBM Philippines, Inc. v. NLRC,13 this Court clarified that the liberality of
procedure in administrative actions is not absolute and does not justify the total
disregard of certain fundamental rules of evidence. Such that evidence without any
rational probative value may not be made the basis of order or decision of
administrative bodies. The Court’s ratiocination in that case is relevant to the
propriety of rejecting the unsigned handwritten listings and computer print-outs
submitted by private respondents which we quote, to wit:
However, the liberality of procedure in administrative actions is subject to
limitations imposed by basic requirements of due process. As this Court
said in Ang Tibay v. CIR, the provision for flexibility in administrative
procedure "does not go so far as to justify orders without a basis in evidence
having rational probative value." More specifically, as held in Uichico v.
NLRC:
"It is true that administrative and quasi-judicial bodies like the
NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, this procedural rule should not be
construed as a license to disregard certain fundamental evidentiary
rules. While the rules of evidence prevailing in the courts of law or
equity are not controlling in proceedings before the NLRC, the
evidence presented before it must at least have a modicum of
admissibility for it to be given some probative value. The
Page 2 of 15
 Statement of Profit and Losses submitted by Crispa, Inc. to prove
its alleged losses, without the accompanying signature of a
certified public accountant or audited by an independent auditor,
are nothing but self-serving documents which ought to be treated
as a mere scrap of paper devoid of any probative value."
The computer print-outs, which constitute the only evidence of petitioners,
afford no assurance of their authenticity because they are unsigned. The
decisions of this Court, while adhering to a liberal view in the conduct of
proceedings before administrative agencies, have nonetheless consistently
required some proof of authenticity or reliability as condition for the
admission of documents.
In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,14 this Court held as
incompetent unsigned daily time records presented to prove that the employee was
neglectful of his duties:
Indeed, the DTRs annexed to the present petition would tend to establish
private respondent’s neglectful attitude towards his work duties as shown
by repeated and habitual absences and tardiness and propensity for working
undertime for the year 1992. But the problem with these DTRs is that they
are neither originals nor certified true copies. They are plain photocopies of
the originals, if the latter do exist. More importantly, they are not even
signed by private respondent nor by any of the employer’s representatives.
x x x.
In the case at bar, both the handwritten listing and computer print-outs being
unsigned, the authenticity thereof is highly suspect and devoid of any rational
probative value especially in the light of the existence of the official record book of
the petitioner’s alleged absences and tardiness in the possession of the employer
company.
Ironically, in the memorandum charging petitioner and notice of termination, private
respondents referred to the record book as its basis for petitioner’s alleged
absenteeism and tardiness. Interestingly, however, the record book was never
presented in evidence. Private respondents had possession thereof and the
opportunity to present the same. Being the basis of the charges against the petitioner,
it is without doubt the best evidence available to substantiate the allegations. The
purpose of the rule requiring the production of the best evidence is the prevention of
fraud, because if a party is in possession of such evidence and withholds it, and seeks
to substitute inferior evidence in its place, the presumption naturally arises that the
better evidence is withheld for fraudulent purposes which its production would
expose and defeat.15 Thus, private respondents’ unexplained and unjustified non-
presentation of the record book, which is the best evidence in its possession and
control of the charges against the petitioner, casts serious doubts on the factual basis
of the charges of absenteeism and tardiness.
We find that private respondents failed to present a single piece of credible evidence
to serve as the basis for their charges against petitioner and consequently, failed to
fulfill their burden of proving the facts which constitute the just cause for the
dismissal of the petitioner. However, the NLRC ruled that despite such absence of
evidence, there was an admission on the part of petitioner in her Letter dated August
11, 1994 wherein she wrote:
I am quite surprised why I have incurred 35 absences since August 1993 up
to the present. I can only surmise that Saturdays were not included in my
work week at your clinic. If you will please recall, per agreement with you,
my work days at your clinic is from Monday to Friday without Saturday
work. As to my other supposed absences, I believe that said absences were
authorized and therefore cannot be considered as absences which need not
be explained (sic). It is also extremely difficult to understand why it is only
now that I am charged to explain alleged absences incurred way back
August 1993.16
In reversing the decision of the Labor Arbiter, public respondent NLRC relied upon
the supposed admission of the petitioner of her habitual absenteeism and chronic
tardiness.
We do not subscribe to the findings of the NLRC that the above quoted letter of
petitioner amounted to an admission of her alleged absences. As explained by
petitioner, her alleged absences were incurred on Saturdays. According to petitioner,
these should not be considered as absences as there was an arrangement between her
and the private respondents that she would not be required to work on Saturdays.
Private respondents have failed to deny the existence of this arrangement. Hence, the
decision of the NLRC that private respondent had sufficient grounds to terminate
petitioner as she admitted the charges of habitual absences has no leg to stand on.
Neither have the private respondents shown by competent evidence that the
petitioner was given any warning or reprimanded for her alleged absences and
tardiness. Private respondents claimed that they sent several notices to the petitioner
warning her of her absences, however, petitioner refused to receive the same. On this
point, the Labor Arbiter succinctly observed:
The record is bereft of any showing that complainant was ever warned of
her absences prior to her dismissal on August 9, 1994. The alleged notices
of her absences from August 17, until September 30, 1993, from October
until November 27, 1993, from December 1, 1993 up to February 26, 1994
and the notice dated 31 May 1994 reminding complainant of her five (5)
days absences, four (4) half-days and tardiness for 582 minutes (Annex "1"
to "1-D" attached to respondent' Rejoinder), fail to show that the notices
were received by the complainant. The allegation of the respondents that the
complainant refused to received (sic) the same is self-serving and merits
scant consideration. xxx17
Page 3 of 15
The Court, likewise, takes note of the fact that the two-day period given to petitioner
to explain and answer the charges against her was most unreasonable, considering
that she was charged with several offenses and infractions (35 absences, 23 half-days
and 108 tardiness), some of which were allegedly committed almost a year before,
not to mention the fact that the charges leveled against her lacked particularity.
Apart from chronic absenteeism and habitual tardiness, petitioner was also made to
answer for loitering and wasting of company time, getting salary of an absent
employee without acknowledging or signing for it and disobedience and
insubordination.18 Thus, the Labor Arbiter found that actually petitioner tried to
submit her explanation on August 11, 1994 or within the two-day period given her,
but private respondents prevented her from doing so by instructing their staff not to
accept complainant’s explanation, which was the reason why her explanation was
submitted a day later.19
The law mandates that every opportunity and assistance must be accorded to the
employee by the management to enable him to prepare adequately for his
defense.20 In Ruffy v. NLRC,21 the Court held that what would qualify as sufficient or
"ample opportunity," as required by law, would be "every kind of assistance that
management must accord to the employee to enable him to prepare adequately for
his defense." In the case at bar, private respondents cannot be gainsaid to have given
petitioner the ample opportunity to answer the charges leveled against her.
From the foregoing, there are serious doubts in the evidence on record as to the
factual basis of the charges against petitioner. These doubts shall be resolved in her
favor in line with the policy under the Labor Code to afford protection to labor and
construe doubts in favor of labor.22 The consistent rule is that if doubts exist between
the evidence presented by the employer and the employee, the scales of justice must
be tilted in favor of the latter. The employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable cause.23 Not having
satisfied its burden of proof, we conclude that the employer dismissed the petitioner
without any just cause. Hence, the termination is illegal.
Having found that the petitioner has been illegally terminated, she is necessarily
entitled to reinstatement to her former previous position without loss of seniority and
the payment of backwages.24
WHEREFORE, the Decision of the National Labor Relations Commission, dated
November 29, 1996 and the Resolution, dated February 20, 1997 are hereby
REVERSED and SET ASIDE, and the Decision of the Labor Arbiter, dated May 15,
1996 REINSTATED.
SO ORDERED.
[G.R. No. 126703. December 29, 1998]
GANDARA MILL SUPPLY and MILAGROS SY, petitioners, vs. THE
NATIONAL LABOR RELATIONS COMMISSION AND SILVESTRE
GERMANO, respondents.
DECISION
PURISIMA, J.:
At bar is a special civil action for Certiorari under Rule 65 of the Revised Rules
of Court, assailing the Resolution[1] of the National Labor Relations
Commission[2] (NLRC) promulgated on May 22, 1996, and NLRC Resolution[3]dated
July 23, 1996, denying petitioners motion for reconsideration in NLRC NCR 00-02-
1653-94.
From the records on hand, it appears that:
Milagros Sy, owner of Gandara Mill Supply, at No. 708 Gandara St., Binondo,
Manila, was the respondent in NLRC Case No. 02-01653-94 instituted by Silvestre
Germano (now the private respondent).
On February 6, 1995, the private respondent, without notifying his employer,
Milagros Sy, did not report for work until February 11, 1995. Like any expectant
father, he chose to be near his wife who was then about to deliver. The wife gave birth
on February 12, 1995. Upon private respondents request, Milagros Sy extended some
financial assistance to the Germano couple.
The petition avers inter alia that Gandara Mill Supply is a small business
enterprise with only two (2) employees, including the herein private respondent, to do
manual work. With inadequate manpower, the absence of just one worker can spell
untold difficulties in its operations. Matters became even worse when private
respondent, without informing his employer, was absent for a long time, so much so
that the former incurred the ire of the latter. Two (2)weeks after, private respondent
returned to duty, and to his surprise, he was met by his employer to personally tell him
that someone had been hired to take his place. He was advised, however, that he was
to be re-admitted in June 1996.
On February 27, 1995, a case of illegal dismissal was commenced by the private
respondent with the Department of Labor and Employment.
To buy peace, petitioner offered P5,000.00 but to no avail. The offer was flatly
rejected by private respondent. When conciliation efforts proved futile, the Labor
Arbiter directed the parties to submit their position papers on or before April 28,
1995, which deadline was extended to May 5, 1995. In his Order of May 9, 1995,
Labor Arbiter Facundo L. Leda gave petitioner a last opportunity to file/submit their
(sic) Position Paper within seven (7) days from receipt hereof otherwise their (sic)
right to be heard are (sic) deemed waived and this case will be decided on the basis
of the documents on file. [4]
Page 4 of 15
 Despite receipt of the aforesaid Order, however, petitioner still failed to comply
therewith, prompting the Labor Arbiter to hand down a decision on January 29,
1996, disposing, thus:
WHEREFORE, decision is hereby rendered ordering respondent/s Gandara Mill
Supply and/or Milagros Sy to pay complainant Silvestre Germano the sum of SIXTY
FIVE THOUSAND SIX HUNDRED EIGHTY FIVE PESOS AND 90/100
(P65,685.90) representing separation pay, backwages, SLIP and attorneys fee as
iscussed and computed above.
On March 4, 1996, petitioner appealed said decision to the NLRC. To the appeal,
an Opposition was interposed on March 15, 1996.
On May 22, 1996, the NLRC dismissed petitioners appeal for failure to post a
cash or surety bond.
The appeal was predicated on the submission that petitioners business is
small, on which invoked ground petitioner sought exemption from posting a
bond. Should its prayer for exemption of a bond be denied, petitioner asked for at least
twenty (20) days to put up such bond.
The petition attacks the July 23, 1996 Resolution of public respondent, affirming
the decision of the Labor Arbiter dated January 29, 1996. On August 14, 1996, a
Motion for Execution was presented by private respondent. NLRC entered its
judgment on August 26, 1996.
On September 6, 1996, private respondent sent in an Ex-parte Motion for
Execution, which was granted. The corresponding Writ of Execution issued
on September 13, 1996.
The issues posited for resolution :
FIRST, did the public respondent act with grave abuse of discretion in
dismissing petitioners appeal and in not giving petitioner a chance to prove that the
private respondent was not illegally dismissed but was merely suspended for
abandoning his job?; and
SECOND, did the public respondent act with grave abuse of discretion in
awarding to the private respondent the amount of SIXTY-FIVE THOUSAND SIX
HUNDRED EIGHTY-FIVE AND 90/00 (P65,685.90), which amount petitioner
assails as excessive?
To be sure, the petitioner was afforded a chance to show that the private
respondent was not illegally dismissed. Unfortunately, petitioner failed to discharge
its burden of proof.
In a long line of cases, the Court has consistently ruled that, findings of fact by
quasi-judicial agencies like the NLRC are conclusive upon the court in the absence of
proof of grave error in the appreciation of facts. Petitioners bare allegation that it was
denied the right to be heard is negated by the Labor Arbiters extension of much
leniency to petitioner by allowing the latter to submit a position paper on April 28,
1995, then on May 5, 1995, and finally, seven (7)days from receipt of the Order dated
May 9, 1995. Generally, reglementary periods are strictly observed to the
end that orderly administration of justice be safeguarded. In the case under
consideration, the public respondent had been quite liberal in observing and enforcing
the rules. Consequently, petitioners protestation of denial of opportunity to be heard is
barren of any factual basis. The principle of laches finds a wide room for application
here. Laches, in a general sense, is failure or neglect for an unreasonable length of time
to do that which by exercising due diligence could or should have been done earlier;
it is negligence or omission to assert a right within a reasonable time warranting a
presumption that the party entitled to assert it has either abandoned or declined to raise
it. The doctrine of laches or stale demands is based upon grounds of public policy
which require for the peace of society, discouragement of stale claims. And unlike the
statute of limitations, it is not a mere question of time but is principally a question of
inequity or unfairness or permitting a right or claim to be enforced or asserted. (Tijam
v. Sibonghanoy, 23 SCRA 29). So also, in the Order, dated May 9, 1995, respondent
Commission declared in clear and unequivocal terms that failure to file a position
paper is deemed a waiver of the right to be heard and that decisions will be based on
the position paper submitted. Evidently, for making good his said Order, the Labor
Arbiter cannot be faulted for acting arbitrarily .
Neither can grave error be ascribed to respondent NLRC for handing down its
decision without petitioners Position Paper. By its inaction, petitioner was properly
considered to have waived or forfeited the right to refute private respondents
stance. Indeed, petitioner cannot now be permitted to belatedly complain of a denial
of due process.
That petitioner was not represented by a lawyer in all the aforesaid proceedings
was solely attributable to its own negligence or inattention to the case. While the court
has held that representation by a lawyer is a fundamental right of litigants, petitioner
has nobody to blame but itself for its failure to secure the services of counsel resulting
to the dismissal of its case. In the case under scrutiny, petitioner was represented by a
non-lawyer, Ramon Flores, who was present from the beginning of the case but failed
to efficiently follow-up the case until the promulgation of judgment. While the right
to due process is available to all the parties, it does not countenance self-serving
excuses devised to undermine orderly administration of justice.
After a careful study, and a thorough examination of the pleadings and
supporting documents, it appears decisively clear that private respondent Silvestre
Germano was illegally dismissed. While a prolonged absence without leave may
constitute as a just cause of dismissal, its illegality stems from the non-observance of
due process. Applying the WenPhil Doctrine by analogy, where dismissal was not
preceded by the twin requirement of notice and hearing, the legality of the dismissal
in question, is under heavy clouds and therefore illegal. While it cannot be deduced
unerringly from the records on hand that private respondent was really dismissed, there
is no clear indication that the latter was to be reinstated. In fact, since the inception of
the case, what petitioner merely endeavored was to compromise for a measly sum
of P5,000.00, and no mention of taking respondent back to his job was ever offered as
Page 5 of 15
part of the deal to end the controversy. What can be surmised from petitionerss offer
to re-admit the private respondent, was nothing but a polite gesture couched in words
intended to make the impact of his so-called suspension less severe.Invoking the plight
of a working man, where no work, no pay is the rule of thumb, the court cannot
sanction an over extended suspension. The Labor Code explicitly provides, that :
No preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker to his former or substantially equivalent position or
the employer may extend the period of suspension provided that during the period of
extension, he pays the wages and other benefits due to the worker. In such case, the
worker shall not be bound to reimburse the amount paid to him during the extension
if the employer decides after completion of the hearing to dismiss the worker.[5]
In this case, the supposed suspension was expected to last for more than the
period allowed by law, thus making the suspension constitutive of an illegal
dismissal. Therefore, the Labor Arbiters contention is upheld by the Court.
Granting arguendo that private respondents absence engendered undue difficulty
to the smooth operations of petitioners business, considering the predicament of
respondent Silvestre Germano, his dismissal is unwarranted. In holding the
constitutional mandate of protection to labor, the rigid rules of procedure may
sometimes be dispensed with to give room for compassion. The doctrine of
compassionate justice is applicable under the premises, private respondent being the
breadwinner of his family. The Social Justice policy mandates a compassionate
attitude toward the working class in its relation to management. In calling for the
protection to labor, the Constitution does not condone wrongdoing by the employee,
it nevertheless urges a moderation of the sanctions that may be applied to him in the
light of the many disadvantages that weigh heavily on him like an albatross on his
neck.[6]
The timeliness of petitioners appeal is an issue which this court endeavors to pass
upon. While the rule governing the instant Petition does not fix a period within which
to file an appeal, the yardstick to measure the seasonableness of a Petition
for Certiorari is the reasonableness of the duration of time that expired from the
commission of the act complained of, to the institution of the proceedings to annul the
same.[7] The court had the occasion to hold that where no law can be applied, resort to
the fundamental law can be had. The Constitution provides that :
All persons shall have the right to a speedy disposition of their cases before all
judicial, quasi-judicial and administrative bodies.[8]
Taking into account the interval of time that elapsed from the receipt of the
assailed Resolution by petitioner, to the time the court received the present
petition, an interregnum of almost three (3) months, the irresistible conclusion is that
the Petition was not filed on time.
All things studiedly considered, we are of the view that public respondent NLRC
did not act with grave abuse of discretion in awarding to private respondent the amount
of P65,685.90 which is not at all excessive under the facts and circumstances of the
case. Time and again, the court held that factual findings by the Labor Arbiter are to
treated as final absent any showing that he erred in his evaluation. The familiarity with
the parties, circumstances and opportunity to observe their demeanor is something the
court did not have the privilege to witness.
Untenable is petitioners contention that the said amount awarded, representing
backwages, separation pay and attorneys fee is excessive and tantamount to a
deprivation of petitioners property without due process of law. Once a finding of
illegal dismissal is established, an award of separation pay and backwages is in order
and binding upon the court, unless the contrary is proved. The court shares the Labor
Arbiters observation and ratiocination that the amount of the questioned award is not
excessive in light of prevailing economic conditions.
WHEREFORE, the Petition for Certiorari under consideration is
hereby DISMISSED on the grounds, that : (1) It was filed out of time; (2) It is devoid
of merit; and (3) it was interposed for purposes of delay.
Accordingly, the NLRC Resolution of July 23, 1996 is AFFIRMED in toto; the
writ of execution issued on September 13, 1996 upheld; and petitioners prayer for a
restraining order DENIED.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 117378 March 26, 1997
GIL CAPILI and RICARDO CAPILI, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, National Capital Region
(First Division), BENIGNO SANTOS, DELFIN YUSON, LUISITO SANTOS,
URSINO BASISTER, RICARDO REYES, JOSELITO SANTOS, JORGE
BINUYA and NICOLAS MULINGBAYAN, respondents.
BELLOSILLO, J.:
Respondents Benigno Santos, Delfin Yuson, Luisito Santos, Ursino Basister, Ricardo
Reyes, Joselito Santos, Jorge Binuya and Nicolas Mulingbayan are licensed drivers
of public utility jeepneys plying the Libertad-Sta. Cruz route in Manila. The jeepneys
were formerly owned by petitioner Gil Capili. For the use of the jeepney for twelve
hours a driver would pay rent or so-called "boundary" of P280.00 and earn a net
profit of P200.00 per day.
Page 6 of 15
On 7 May 1991, at a time when petitioner Ricardo Capili jointly with his wife had
assumed ownership and operation of the jeepneys driven by private respondents, the
latter and the other drivers similarly situated were required by the jeepney operators
to sign individually contracts of lease of the jeepneys to formalize their lessor-lessee
relationship. However, having gathered the impression that the signing of the
contracts of lease was a condition precedent before they could continue driving for
petitioners, all the drivers stopped plying their assigned routes beginning 7 May
1991.
A week later or on 14 May 1991 the drivers, numbering twenty-two (22), filed a
complaint for illegal dismissal before the Labor Arbiter praying not for
reinstatement but for separation pay.1
In the interim, fourteen (14) of the complainants desisted and resumed plying their
routes. The remaining eight (8) complainants with their reckoning dates of
employment follow: (a) Benigno Santos, 1972; (b) Jorge Binuya, 1965; (c) Luisito
Santos, 1982; (d) Delfin Yuson, 1983; (e) Ursino Basister, 1980; (f) Ricardo Reyes,
1985; (g) Joselito Santos, 1989; and, (h) Nicolas Mulingbayan, 1978.
Petitioners opposed the claim of private respondents before the Labor Arbiter
alleging that the latter voluntarily abandoned their respective jobs without any valid
cause and thereafter refused and still continue to refuse to return to work despite
repeated demands and/or notices given to them to return to work.
In resolving the dispute, the Labor Arbiter ruled —
On the issue of dismissal versus abandonment, we are inclined to
believe that the latter scenario happened. It is not sound business
practice to dismiss many employees at the same time since it
would cripple the operations.
What was more likely was that the drivers, all 22 of them . . .
boycotted respondents on May 7, 1991 by not reporting for work
on that day.
xxx xxx xxx
From the viewpoint of complainants, their signing of the lease
contract was a condition sine qua non to the continuous driving of
their respective drivers (jeepneys?). But from the point of view of
respondent Capili and as shown in the aforequoted paragraph 5 of
his affidavit, and as further shown in the notices (Exhibits "3-B"
and "3-B-1") which merely asked complainants to return to work
without mentioning any condition like the signing of the contract,
the signing of the lease contract by the drivers was merely intended
as a confirmation of the original concept of a no employer-
employee relationship, and to streamline the operation by
indicating the amount of the boundary per driver, depending on the
number of hours they drive and their obligation to check on the
motor/engine, oil, tires, brakes and other routinary requirements in
order to insure the vehicles' roadworthiness. It was never meant to
be that if a driver refuses to sign the contract, he would not be
allowed to continue driving.
To our mind, both parties misappreciated the situation.
Respondents' erroneous insistence of a no employer-employee
relationship even in the face of a well-established contrary doctrine
as postulated in the Dinglasan case2 (98 Phil. 649) and
complainants' erroneous apprehension of the loss of such
employer-employee relationship if they sign the lease contract
propelled the complainants to file the instant complaint.
In short, this is merely a simple case of misunderstanding.
To remedy the situation, we feel that the most prudent approach
would be to let the parties return to the relationship that existed
between them prior to May 7, 1991.3
The Labor Arbiter thus concluded —
WHEREFORE, decision is hereby rendered declaring the breakage
(sic), of relationship between respondent Ricardo Capili and
complainants Benigno T. Santos, Delfin Yuson, Luisito Santos,
Ursino Basister, Ricardo Reyes, Joselito Santos, Jorge Binuya and
Nicholas Mulingbayan, as a product of misunderstanding and
misappreciation of the situation by both parties and, therefore,
respondents are hereby directed to reinstate them to their former
position without loss of seniority rights and other benefits, but
without back wages (p. 7, Annex "F", emphasis supplied).4
Private respondents appealed to the National Labor Relations Commission. They
reiterated their prayer for separation pay equivalent to one (1) month salary for every
year of service and, in addition, three (3) years back wages.
Respondent NLRC upheld the finding of the Labor Arbiter that the case arose due to
simple misunderstanding between the complaining drivers on one hand and their
employers on the other. However, it took exception to the relief granted to private
respondents and modified the appealed decision accordingly by holding that —
Page 7 of 15
 Since there was misunderstanding between the parties and this
misunderstanding resulted in animosity and strained relationship
between them, we deem it proper and most prudent approach to
maintain industrial peace for respondents to pay the complainants
their separation pay of one half (1/2) month for every year of
service, based on their daily earnings of P200.00. 5
The petitioners moved to have the above disquisition of respondent NLRC
reconsidered but the latter denied the motion. They now come to us arguing that
since there was a clear finding of abandonment by the Labor Arbiter consisting in the
failure of private respondents to report for work without justifiable reason, the award
of separation pay could not be warranted.
The NLRC brushed aside the arguments of petitioners. It emphasized that if it were
the finding of the Labor Arbiter that private respondents were guilty of abandonment
he would not have ordered reinstatement but dismissal of the case. Thus on 9 August
1994 NLRC denied reconsideration.
Petitioners impute grave abuse of discretion on the part of respondent NLRC in
awarding separation pay to private respondents.
We agree with petitioners. The legal basis for the award of separation pay is clearly
provided by Art. 279 of the Labor Code which states that the remedy for illegal
dismissal is reinstatement without loss of seniority rights plus back wages computed
from the time compensation was withheld up to reinstatement. However there may
be instances where reinstatement is not a viable remedy as where the relations
between employer and employee have been so severely strained that it is no longer
advisable to order reinstatement or where the employee decides not to be reinstated.
In such events, the employer will instead be ordered to pay separation pay. 6
A reading of Art. 279 in relation to Art. 282 of the Labor Code reveals that an
employee who is dismissed for cause after appropriate proceedings in compliance
with the due process requirements is not entitled to an award of separation pay.
Under Arts. 283 and 284 of the same Code, separation pay is authorized only in
cases of dismissals due to any of these reasons: (a) installation of labor saving
devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business,
and, (e) when the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health and to the health of
his co-employees.7 However, separation pay shall be allowed as a measure of social
justice in those cases where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character, but only when he was
illegally dismissed.
The common denominator of those instances where payment of separation pay is
warranted is that the employee was dismissed by the employer. In the instant case
there was no dismissal at all. Respondent NLRC affirmed the factual findings of the
Labor Arbiter that there was only a misunderstanding between petitioners and
private respondents which caused the latter to stop reporting for work. If the Labor
Arbiter ordered reinstatement it should not be construed as relief proceeding from
illegal dismissal; instead, it should be considered as a declaration or affirmation that
private respondents may return to work because they were not dismissed in the first
place, and they should be happy that their employers are accepting them back. This
could be the reason why complainants asked only for separation pay — not for
reinstatement — in their complaint before the Labor Arbiter.
The award of separation pay cannot be justified solely because of the existence of
"strained relations" between the employer and the employee. It must be given to the
employee only as an alternative to reinstatement emanating from illegal dismissal.
When there is no illegal dismissal, even if the relations are strained, separation pay
has no legal basis. Besides, the doctrine on "strained relations" cannot be applied
indiscriminately since every labor dispute almost invariably results in "strained
relations;" otherwise, reinstatement can never be possible simply because some
hostility is engendered between the parties as a result of their disagreement. That is
human nature.8
The constitutional policy of providing full protection to labor is not intended to
oppress or destroy management. The commitment of this Court to the cause of labor
does not prevent us from sustaining the employer when it is in the right, as in this
case.9
When respondents filed their complaint, and taking account of the allegations
therein, they foreclosed reinstatement as a relief, since they prayed only for an award
of separation pay. This is confirmed in their appeal to the NLRC where they prayed
for a modification of the decision of the Labor Arbiter, from reinstatement without
back wages to payment of three (3) years back wages and separation pay equivalent
to one (1) month salary for every year of service. 10 It is therefore clear that
respondents never desired to be reinstated. This being so, the Court cannot order
them to return to work. 11 If private respondents voluntarily chose not to return to
work anymore they must be considered as having resigned from their employment.
This is without prejudice however to the willingness of both parties to continue with
their former contract of employment or enter into a new one whenever they so desire.
WHEREFORE, the petition is GRANTED and the employer-employee relationship
between petitioners on one hand and each private respondent on the other is deemed
voluntarily terminated. Consequently, the decision of respondent National Labor
Relations Commission dated 28 February 1994 is REVERSED and SET ASIDE.
SO ORDERED.
Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.
Page 8 of 15
G.R. No. 163419 February 13, 2008
TSPIC CORPORATION, petitioner,
vs.
TSPIC EMPLOYEES UNION (FFW), representing MARIA FE FLORES, FE
CAPISTRANO, AMY DURIAS,1CLAIRE EVELYN VELEZ, JANICE
OLAGUIR, JERICO ALIPIT, GLEN BATULA, SER JOHN HERNANDEZ,
RACHEL NOVILLAS, NIMFA ANILAO, ROSE SUBARDIAGA, VALERIE
CARBON, OLIVIA EDROSO, MARICRIS DONAIRE, ANALYN AZARCON,
ROSALIE RAMIREZ, JULIETA ROSETE, JANICE NEBRE, NIA
ANDRADE, CATHERINE YABA, DIOMEDISA ERNI, 2 MARIO SALMORIN,
LOIDA COMULLO,3 MARIE ANN DELOS SANTOS,4 JUANITA YANA, and
SUZETTE DULAY, respondents.
DECISION
VELASCO, JR., J.:
The path towards industrial peace is a two-way street. Fundamental fairness and
protection to labor should always govern dealings between labor and management.
Seemingly conflicting provisions should be harmonized to arrive at an interpretation
that is within the parameters of the law, compassionate to labor, yet, fair to
management.
In this Petition for Review on Certiorari under Rule 45, petitioner TSPIC
Corporation (TSPIC) seeks to annul and set aside the October 22, 2003
Decision5 and April 23, 2004 Resolution6 of the Court of Appeals (CA) in CA-G.R.
SP No. 68616, which affirmed the September 13, 2001 Decision 7 of Accredited
Voluntary Arbitrator Josephus B. Jimenez in National Conciliation and Mediation
Board Case No. JBJ-AVA-2001-07-57.
TSPIC is engaged in the business of designing, manufacturing, and marketing
integrated circuits to serve the communication, automotive, data processing, and
aerospace industries. Respondent TSPIC Employees Union (FFW) (Union), on the
other hand, is the registered bargaining agent of the rank-and-file employees of
TSPIC. The respondents, Maria Fe Flores, Fe Capistrano, Amy Durias, Claire
Evelyn Velez, Janice Olaguir, Jerico Alipit, Glen Batula, Ser John Hernandez,
Rachel Novillas, Nimfa Anilao, Rose Subardiaga, Valerie Carbon, Olivia Edroso,
Maricris Donaire, Analyn Azarcon, Rosalie Ramirez, Julieta Rosete, Janice Nebre,
Nia Andrade, Catherine Yaba, Diomedisa Erni, Mario Salmorin, Loida Comullo,
Marie Ann Delos Santos, Juanita Yana, and Suzette Dulay, are all members of the
Union.
In 1999, TSPIC and the Union entered into a Collective Bargaining Agreement
(CBA)8 for the years 2000 to 2004. The CBA included a provision on yearly salary
increases starting January 2000 until January 2002. Section 1, Article X of the CBA
provides, as follows:
Section 1. Salary/ Wage Increases.––Employees covered by this Agreement
shall be granted salary/wage increases as follows:
a) Effective January 1, 2000, all employees on regular status and
within the bargaining unit on or before said date shall be granted a
salary increase equivalent to ten percent (10%) of their basic
monthly salary as of December 31, 1999.
b) Effective January 1, 2001, all employees on regular status and
within the bargaining unit on or before said date shall be granted a
salary increase equivalent to twelve (12%) of their basic monthly
salary as of December 31, 2000.
c) Effective January 1, 2002, all employees on regular status and
within the bargaining unit on or before said date shall be granted a
salary increase equivalent to eleven percent (11%) of their basic
monthly salary as of December 31, 2001.
The wage salary increase of the first year of this Agreement shall be over
and above the wage/salary increase, including the wage distortion
adjustment, granted by the COMPANY on November 1, 1999 as per Wage
Order No. NCR-07.
The wage/salary increases for the years 2001 and 2002 shall be deemed
inclusive of the mandated minimum wage increases under future Wage
Orders, that may be issued after Wage Order No. NCR-07, and shall be
considered as correction of any wage distortion that may have been brought
about by the said future Wage Orders. Thus the wage/salary increases in
2001 and 2002 shall be deemed as compliance to future wage orders after
Wage Order No. NCR-07.
Consequently, on January 1, 2000, all the regular rank-and-file employees of TSPIC
received a 10% increase in their salary. Accordingly, the following nine (9)
respondents (first group) who were already regular employees received the said
increase in their salary: Maria Fe Flores, Fe Capistrano, Amy Durias, Claire Evelyn
Velez, Janice Olaguir, Jerico Alipit, Glen Batula, Ser John Hernandez, and Rachel
Novillas.9
The CBA also provided that employees who acquire regular employment status
within the year but after the effectivity of a particular salary increase shall receive a
proportionate part of the increase upon attainment of their regular status. Sec. 2 of
the CBA provides:
Page 9 of 15
 SECTION 2. Regularization Increase.––A covered daily paid employee
who acquires regular status within the year subsequent to the effectivity of a
particular salary/wage increase mentioned in Section 1 above shall be
granted a salary/wage increase in proportionate basis as follows:
Regularization Period Equivalent Increase
st
- 1 Quarter 100%
nd
- 2 Quarter 75%
- 3rd Quarter 50%
- th
4 Quarter 25%
Thus, a daily paid employee who becomes a regular employee covered by
this Agreement only on May 1, 2000, i.e., during the second quarter and
subsequent to the January 1, 2000 wage increase under this Agreement, will
be entitled to a wage increase equivalent to seventy-five percent (75%) of
ten percent (10%) of his basic pay. In the same manner, an employee who
acquires regular status on December 1, 2000 will be entitled to a salary
increase equivalent to twenty-five percent (25%) of ten percent (10%) of his
last basic pay.
On the other hand, any monthly-paid employee who acquires regular status
within the term of the Agreement shall be granted regularization increase
equivalent to 10% of his regular basic salary.
Then on October 6, 2000, the Regional Tripartite Wage and Productivity Board,
National Capital Region, issued Wage Order No. NCR-0810 (WO No. 8) which
raised the daily minimum wage from PhP 223.50 to PhP 250 effective November 1,
2000. Conformably, the wages of 17 probationary employees, namely: Nimfa
Anilao, Rose Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn
Azarcon, Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade, Catherine
Yaba, Diomedisa Erni, Mario Salmorin, Loida Comullo, Marie Ann Delos Santos,
Juanita Yana, and Suzette Dulay (second group), were increased to PhP 250.00
effective November 1, 2000.
On various dates during the last quarter of 2000, the above named 17 employees
attained regular employment11and received 25% of 10% of their salaries as granted
under the provision on regularization increase under Article X, Sec. 2 of the CBA.
In January 2001, TSPIC implemented the new wage rates as mandated by the CBA.
As a result, the nine employees (first group), who were senior to the above-listed
recently regularized employees, received less wages.
On January 19, 2001, a few weeks after the salary increase for the year 2001 became
effective, TSPIC’s Human Resources Department notified 24 employees, 12 namely:
Maria Fe Flores, Janice Olaguir, Rachel Novillas, Fe Capistrano, Jerico Alipit, Amy
Durias, Glen Batula, Claire Evelyn Velez, Ser John Hernandez, Nimfa Anilao, Rose
Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon,
Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade, Catherine Yaba,
Diomedisa Erni, Mario Salmorin, Loida Comullo, and Marie Ann Delos Santos, that
due to an error in the automated payroll system, they were overpaid and the
overpayment would be deducted from their salaries in a staggered basis, starting
February 2001. TSPIC explained that the correction of the erroneous computation
was based on the crediting provision of Sec. 1, Art. X of the CBA.
The Union, on the other hand, asserted that there was no error and the deduction of
the alleged overpayment from employees constituted diminution of pay. The issue
was brought to the grievance machinery, but TSPIC and the Union failed to reach an
agreement.
Consequently, TSPIC and the Union agreed to undergo voluntary arbitration on the
solitary issue of whether or not the acts of the management in making deductions
from the salaries of the affected employees constituted diminution of pay.
On September 13, 2001, Arbitrator Jimenez rendered a Decision, holding that the
unilateral deduction made by TSPIC violated Art. 100 13 of the Labor Code.
The fallo reads:
WHEREFORE, in the light of the law on the matter and on the facts
adduced in evidence, judgment is hereby rendered in favor of the Union and
the named individual employees and against the company, thereby ordering
the [TSPIC] to pay as follows:
1) to the sixteen (16) newly regularized employees named above,
the amount of P12,642.24 a month or a total of P113,780.16 for
nine (9) months or P7,111.26 for each of them as well as an
additional P12,642.24 (for all), or P790.14 (for each), for every
month after 30 September 2001, until full payment, with legal
interests for every month of delay;
2) to the nine (9) who were hired earlier than the sixteen (16); also
named above, their respective amount of entitlements, according to
the Union’s correct computation, ranging from P110.22 per month
(or P991.98 for nine months) to P450.58 a month (or P4,055.22 for
nine months), as well as corresponding monthly entitlements after
30 September 2001, plus legal interests until full payment,
3) to Suzette Dulay, the amount of P608.14 a month (or
P5,473.26), as well as corresponding monthly entitlements after 30
September 2001, plus legal interest until full payment,
Page 10 of 15
 4) Attorney’s fees equal to 10% of all the above monetary awards.
The claim for exemplary damages is denied for want of factual basis.
The parties are hereby directed to comply with their joint voluntary
commitment to abide by this Award and thus, submit to this Office jointly, a
written proof of voluntary compliance with this DECISION within ten (10)
days after the finality hereof.
SO ORDERED.14
TSPIC filed a Motion for Reconsideration which was denied in a Resolution dated
November 21, 2001.
Aggrieved, TSPIC filed before the CA a petition for review under Rule 43 docketed
as CA-G.R. SP No. 68616. The appellate court, through its October 22, 2003
Decision, dismissed the petition and affirmed in toto the decision of the voluntary
arbitrator. The CA declared TSPIC’s computation allowing PhP 287 as daily wages
to the newly regularized employees to be correct, noting that the computation
conformed to WO No. 8 and the provisions of the CBA. According to the CA,
TSPIC failed to convince the appellate court that the deduction was a result of a
system error in the automated payroll system. The CA explained that when WO No.
8 took effect on November 1, 2000, the concerned employees were still probationary
employees who were receiving the minimum wage of PhP 223.50. The CA said that
effective November 1, 2000, said employees should have received the minimum
wage of PhP 250. The CA held that when respondents became regular employees on
November 29, 2000, they should be allowed the salary increase granted them under
the CBA at the rate of 25% of 10% of their basic salary for the year 2000; thereafter,
the 12% increase for the year 2001 and the 10% increase for the year 2002 should
also be made applicable to them.15
TSPIC filed a Motion for Reconsideration which was denied by the CA in its April
23, 2004 Resolution.
TSPIC filed the instant petition which raises this sole issue for our resolution: Does
the TSPIC’s decision to deduct the alleged overpayment from the salaries of the
affected members of the Union constitute diminution of benefits in violation of the
Labor Code?
TSPIC maintains that the formula proposed by the Union, adopted by the arbitrator
and affirmed by the CA, was flawed, inasmuch as it completely disregarded the
"crediting provision" contained in the last paragraph of Sec. 1, Art. X of the CBA.
We find TSPIC’s contention meritorious.
A Collective Bargaining Agreement is the law between the parties
It is familiar and fundamental doctrine in labor law that the CBA is the law between
the parties and they are obliged to comply with its provisions. 16 We said so in Honda
Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda:
A collective bargaining agreement or CBA refers to the negotiated contract
between a legitimate labor organization and the employer concerning
wages, hours of work and all other terms and conditions of employment in a
bargaining unit. As in all contracts, the parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may deem convenient
provided these are not contrary to law, morals, good customs, public order
or public policy. Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated
by the express policy of the law. 17
Moreover, if the terms of a contract, as in a CBA, are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of their stipulations shall
control.18 However, sometimes, as in this case, though the provisions of the CBA
seem clear and unambiguous, the parties sometimes arrive at conflicting
interpretations. Here, TSPIC wants to credit the increase granted by WO No. 8 to the
increase granted under the CBA. According to TSPIC, it is specifically provided in
the CBA that "the salary/wage increase for the year 2001 shall be deemed inclusive
of the mandated minimum wage increases under future wage orders that may be
issued after Wage Order No. 7." The Union, on the other hand, insists that the
"crediting" provision of the CBA finds no application in the present case, since at the
time WO No. 8 was issued, the probationary employees (second group) were not yet
covered by the CBA, particularly by its crediting provision.
As a general rule, in the interpretation of a contract, the intention of the parties is to
be pursued.19 Littera necat spiritus vivificat. An instrument must be interpreted
according to the intention of the parties. It is the duty of the courts to place a
practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and the purpose which it is intended to serve. 20 Absurd and
illogical interpretations should also be avoided. Considering that the parties have
unequivocally agreed to substitute the benefits granted under the CBA with those
granted under wage orders, the agreement must prevail and be given full effect.
Paragraph (b) of Sec. 1 of Art. X of the CBA provides for the general agreement that,
effective January 1, 2001, all employees on regular status and within the bargaining
unit on or before said date shall be granted a salary increase equivalent to twelve
(12%) of their basic monthly salary as of December 31, 2000. The 12% salary
increase is granted to all employees who (1) are regular employees and (2) are within
the bargaining unit.
Page 11 of 15
Second paragraph of (c) provides that the salary increase for the year 2000 shall not For respondents Jerico Alipit and Glen Batula:23
include the increase in salary granted under WO No. 7 and the correction of the wage
distortion for November 1999. Wage rate before WO No.
8………………………… PhP 234.67
The last paragraph, on the other hand, states the specific condition that the
Increase due to WO No. 8
wage/salary increases for the years 2001 and 2002 shall be deemed inclusive of the
setting the minimum wage at PhP
mandated minimum wage increases under future wage orders, that may be issued
250.……………... 15.33
after WO No. 7, and shall be considered as correction of the wage distortions that
may be brought about by the said future wage orders. Thus, the wage/salary Total Salary upon effectivity of WO No.
increases in 2001 and 2002 shall be deemed as compliance to future wage orders 8…………. PhP 250.00
after WO No. 7. Increase for 2001 (12% of 2000
salary)…….....……. PhP 30.00
Paragraph (b) is a general provision which allows a salary increase to all those who Less the wage increase under WO No.
are qualified. It, however, clashes with the last paragraph which specifically states 8……………. 15.33
that the salary increases for the years 2001 and 2002 shall be deemed inclusive of
Total difference between the wage increase
wage increases subsequent to those granted under WO No. 7. It is a familiar rule in
for 2001 and the increase granted under WO No.
interpretation of contracts that conflicting provisions should be harmonized to give
8.. PhP 14.67
effect to all.21 Likewise, when general and specific provisions are inconsistent, the
specific provision shall be paramount to and govern the general provision.22 Thus, it Wage rate by December
may be reasonably concluded that TSPIC granted the salary increases under the 2000………………………. PhP 250.00
condition that any wage order that may be subsequently issued shall be credited Plus total difference between the wage increase for
against the previously granted increase. The intention of the parties is clear: As long 2001 and the increase granted under WO No.
as an employee is qualified to receive the 12% increase in salary, the employee shall 8…….. 14.67
be granted the increase; and as long as an employee is granted the 12% increase, the
Total (Wage rate range beginning January 1, 2001) PhP 264.67
amount shall be credited against any wage order issued after WO No. 7.

Respondents should not be allowed to receive benefits from the CBA while avoiding For respondents Ser John Hernandez and Rachel Novillas:24
the counterpart crediting provision. They have received their regularization increases
under Art. X, Sec. 2 of the CBA and the yearly increase for the year 2001. They Wage rate range before WO No.
should not then be allowed to avoid the crediting provision which is an 8………………….. PhP 234.68
accompanying condition. Increase due to WO No. 8
setting the minimum wage at PhP
Respondents attained regular employment status before January 1, 2001. WO No. 8, 250……………… 15.32
increasing the minimum wage, was issued after WO No. 7. Thus, respondents Total Salary upon effectivity of WO No.
rightfully received the 12% salary increase for the year 2001 granted in the CBA; 8.………… PhP 250.00
and consequently, TSPIC rightfully credited that 12% increase against the increase
granted by WO No. 8. Increase for 2001 (12% of 2000
salary)…………….. PhP 30.00
Proper formula for computing the salaries for the year 2001 Less the wage increase under WO No.
8…………… 15.32
Thus, the proper computation of the salaries of individual respondents is as follows: Total difference between the wage increase
for 2001 and the increase granted under WO No.
(1) With regard to the first group of respondents who attained regular employment 8… PhP 14.68
status before the effectivity of WO No. 8, the computation is as follows: Wage rate by December
2000………………………. PhP 250.00
Page 12 of 15
 Plus total difference between the wage increase for Plus total difference between the wage increase for
2001 and the increase granted under WO No. 2001 and the increase granted under WO No.
8…… 14.68 8…… 25.85
Total (Wage rate range beginning January 1, 2001) PhP 264.68 Total (Wage rate range beginning January 1, 2001) PhP 275.85

For respondents Amy Durias, Claire Evelyn Velez, and Janice Olaguir:25 (2) With regard to the second group of employees, who attained regular employment
status after the implementation of WO No. 8, namely: Nimfa Anilao, Rose
Wage rate range before WO No. 8………….. PhP 240.26 Subardiaga, Valerie Carbon, Olivia Edroso, Maricris Donaire, Analyn Azarcon,
Rosalie Ramirez, Julieta Rosete, Janice Nebre, Nia Andrade, Catherine Yaba,
Increase due to WO No. 8 Diomedisa Erni, Mario Salmorin, Loida Comullo, Marie Ann Delos Santos, Juanita
setting the minimum wage at PhP 250……… 9.74 Yana, and Suzette Dulay, the proper computation of the salaries for the year 2001, in
Total Salary upon effectivity of WO No. 8…. PhP 250.00 accordance with the CBA, is as follows:
Increase for 2001 (12% of 2000
salary)…………… PhP 30.00 Compute the increase in salary after the implementation of WO No. 8 by subtracting
Less the wage increase under WO No. the minimum wage before WO No. 8 from the minimum wage per the wage order to
8…………… 9.74 arrive at the wage increase, thus:
Total difference between the wage increase for
2001 Minimum Wage per Wage PhP
and the increase granted under WO No. 8………… PhP 20.26 Order………….. 250.00
Wage rate by December Wage rate before Wage Order…………….. 223.50
2000……………………… PhP 250.00 Wage
Plus total difference between the wage increase for Increase………………………………. PhP 26.50
2001 and the increase granted under WO No.
8…… 20.26 Upon attainment of regular employment status, the employees’ salaries were
Total (Wage rate range beginning January 1, 2001) PhP 270.26 increased by 25% of 10% of their basic salaries, as provided for in Sec. 2, Art. X of
the CBA, thus resulting in a further increase of PhP 6.25, for a total of PhP 256.25,
computed as follows:
For respondents Ma. Fe Flores and Fe Capistrano:26
Wage rate after WO No.
Wage rate range before WO No. 8…………… PhP 245.85 8………………………………. PhP 250.00
Increase due to WO No. 8 Regularization increase (25 % of 10% of basic
setting the minimum wage at PhP 250……….. 4.15 salary) 6.25
Total Salary upon effectivity of WO No. 8…... PhP 250.00 Total (Salary for the end of year
Increase for 2001 (12% of 2000 2000)…………………. PhP 256.25
salary)…………… PhP 30.00
Less the wage increase under WO No. To compute for the increase in wage rates for the year 2001, get the increase of 12%
8………......... 4.15 of the employees’ salaries as of December 31, 2000; then subtract from that amount,
Total difference between the wage increase for the amount increased in salaries as granted under WO No. 8 in accordance with the
2001 crediting provision of the CBA, to arrive at the increase in salaries for the year 2001
and the increase granted under WO No. 8………… PhP 25.85 of the recently regularized employees. Add the result to their salaries as of December
31, 2000 to get the proper salary beginning January 1, 2001, thus:
Wage rate by December
2000……………………… PhP 250.00

Page 13 of 15
 Increase for 2001 (12% of 2000 Absent clear administrative guidelines, Petitioner Corporation cannot be
salary)………………... PhP 30.75 faulted for erroneous application of the law. Payment may be said to have
been made by reason of a mistake in the construction or application of a
Less the wage increase under WO No.
"doubtful or difficult question of law". (Article 2155, in relation to Article
8………………. 26.50
2154 of the Civil Code). Since it is a past error that is being corrected, no
Difference between the wage increase vested right may be said to have arisen nor any diminution of benefit under
for 2001 and the increase granted under WO No. Article 100 of the Labor Code may be said to have resulted by virtue of the
8…… PhP 4.25 correction.28
Wage rate after regularization
increase………………... PhP 256.25 Here, no vested right accrued to individual respondents when TSPIC corrected its
Plus total difference between the wage increase and error by crediting the salary increase for the year 2001 against the salary increase
the increase granted under WO No. granted under WO No. 8, all in accordance with the CBA.
8…………………. 4.25
Total (Wage rate beginning January 1, Hence, any amount given to the employees in excess of what they were entitled to, as
2001)…………. PhP 260.50 computed above, may be legally deducted by TSPIC from the employees’ salaries. It
was also compassionate and fair that TSPIC deducted the overpayment in
installments over a period of 12 months starting from the date of the initial deduction
With these computations, the crediting provision of the CBA is put in effect, and the to lessen the burden on the overpaid employees. TSPIC, in turn, must refund to
wage distortion between the first and second group of employees is cured. The first individual respondents any amount deducted from their salaries which was in excess
group of employees who attained regular employment status before the of what TSPIC is legally allowed to deduct from the salaries based on the
implementation of WO No. 8 is entitled to receive, starting January 1, 2001, a daily computations discussed in this Decision.
wage rate within the range of PhP 264.67 to PhP 275.85, depending on their wage
rate before the implementation of WO No. 8. The second group that attained regular
As a last word, it should be reiterated that though it is the state’s responsibility to
employment status after the implementation of WO No. 8 is entitled to receive a
afford protection to labor, this policy should not be used as an instrument to oppress
daily wage rate of PhP 260.50 starting January 1, 2001.
management and capital.29 In resolving disputes between labor and capital, fairness
and justice should always prevail. We ruled in Norkis Union v. Norkis Trading that
Diminution of benefits in the resolution of labor cases, we have always been guided by the State policy
enshrined in the Constitution: social justice and protection of the working class.
TSPIC also maintains that charging the overpayments made to the 16 respondents Social justice does not, however, mandate that every dispute should be automatically
through staggered deductions from their salaries does not constitute diminution of decided in favor of labor. In any case, justice is to be granted to the deserving and
benefits. dispensed in the light of the established facts and the applicable law and doctrine. 30

We agree with TSPIC.

Diminution of benefits is the unilateral withdrawal by the employer of benefits

already enjoyed by the employees. There is diminution of benefits when it is shown
that: (1) the grant or benefit is founded on a policy or has ripened into a practice over
a long period; (2) the practice is consistent and deliberate; (3) the practice is not due
to error in the construction or application of a doubtful or difficult question of law;
and (4) the diminution or discontinuance is done unilaterally by the employer. 27

As correctly pointed out by TSPIC, the overpayment of its employees was a result of
an error. This error was immediately rectified by TSPIC upon its discovery. We have
ruled before that an erroneously granted benefit may be withdrawn without violating
the prohibition against non-diminution of benefits. We ruled in Globe-Mackay Cable
and Radio Corp. v. NLRC:
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 Name of Employee Daily Wage No. of No. of Total Salary
Rate Working Days Months in a for 2001
in a Month Year
Nimfa Anilao 260.5 26 12 81,276.00
Rose Subardiaga 260.5 26 12 81,276.00
Valerie Carbon 260.5 26 12 81,276.00
Olivia Edroso 260.5 26 12 81,276.00
Maricris Donaire 260.5 26 12 81,276.00
Analyn Azarcon 260.5 26 12 81,276.00
Rosalie Ramirez 260.5 26 12 81,276.00
Julieta Rosete 260.5 26 12 81,276.00
Janice Nebre 260.5 26 12 81,276.00
Nia Andrade 260.5 26 12 81,276.00
Catherine Yaba 260.5 26 12 81,276.00
Diomedisa Erni 260.5 26 12 81,276.00
Mario Salmorin 260.5 26 12 81,276.00
Loida Camullo 260.5 26 12 81,276.00
Marie Ann Delos Santos 260.5 26 12 81,276.00
Juanita Yana 260.5 26 12 81,276.00
Suzette Dulay 260.5 26 12 81,276.00
Jerico Alipit 264.67 26 12 82,577.04
Glen Batula 264.67 26 12 82,577.04
Ser John Hernandez 264.68 26 12 82,580.16
Rachel Novillas 264.68 26 12 82,580.16
Amy Durias 270.26 26 12 84,321.12
Claire Evelyn Velez 270.26 26 12 84,321.12
Janice Olaguir 270.26 26 12 84,321.12
Maria Fe Flores 275.85 26 12 86,065.20
Fe Capistrano 275.85 26 12 86,065.20

WHEREFORE, premises considered, the September 13, 2001 Decision of the

Labor Arbitrator in National Conciliation and Mediation Board Case No. JBJ-AVA-
2001-07-57 and the October 22, 2003 CA Decision in CA-G.R. SP No. 68616 are
hereby AFFIRMED with MODIFICATION. TSPIC is hereby ORDERED to pay
respondents their salary increases in accordance with this Decision, as follows:

The award for attorney’s fees of ten percent (10%) of the total award
is MAINTAINED.

SO ORDERED.
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