567 Phil.

580

SANDOVAL-GUTIERREZ, J.:

The Court has always promoted the policy of encouraging employers to grant wage and allowance
increases to their employees higher than the minimum rates of increases prescribed by statute or
administrative regulation. Consistent with this, the Court also adopts the policy that requires recognition
and validation of wage increases given by employers either unilaterally or as a result of collective
bargaining negotiations in an effort to correct wage distortions.[1]

Before us is a motion for reconsideration of our Resolution dated April 18, 2005 denying the present
petition for review on certiorari for failure of the petitioner to show that a reversible error has been
committed by the Court of Appeals in its (a) Decision dated July 21, 2004 and (b) Resolution dated
February 18, 2005.

The facts are:

Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged in the manufacture and
sale of household appliances. On the other hand, respondent P.I. Manufacturing Supervisors and
Foremen Association (PIMASUFA) is an organization of petitioner's supervisors and foremen, joined in
this case by its federation, the National Labor Union (NLU).

On December 10, 1987, the President signed into law Republic Act (R.A.) No. 6640[2] providing, among
others, an increase in the statutory minimum wage and salary rates of employees and workers in the
private sector. Section 2 provides:

SEC. 2. The statutory minimum wage rates of workers and employees in the private sector, whether
agricultural or non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural
workers and employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per
day: Provided, That those already receiving above the minimum wage up to one hundred pesos
(P100.00) shall receive an increase of ten pesos (P10.00) per day. Excepted from the provisions of this
Act are domestic helpers and persons employed in the personal service of another.

Thereafter, on December 18, 1987, petitioner and respondent PIMASUFA entered into a new Collective
Bargaining Agreement (1987 CBA) whereby the supervisors were granted an increase of P625.00 per
month and the foremen, P475.00 per month. The increases were made retroactive to May 12, 1987, or
prior to the passage of R.A. No. 6640, and every year thereafter until July 26, 1989. The pertinent
portions of the 1987 CBA read:

ARTICLE IV

SALARIES AND OVERTIME

Section 1. The COMPANY shall grant to all regular supervisors and foremen within the coverage of the
unit represented by the ASSOCIATION, wage or salary increases in the amount set forth as follows:

A. For FOREMEN

Effective May 12, 1987, an increase of P475,00 per month to all qualified regular foremen who are in the
service of the COMPANY as of said date and who are still in its employ on the signing of this Agreement,
subject to the conditions set forth in sub-paragraph (d) hereunder;

a) Effective July 26, 1988, an increase of P475.00 per month/employee to all covered foremen;

b) Effective July 26, 1989, an increase of P475.00 per month/per employee to all covered foremen;

c) The salary increases from May 12, 1987 to November 30, 1987 shall be excluding and without
increment on fringe benefits and/or premium and shall solely be on basic salary.

B. For SUPERVISORS

a) Effective May 12, 1987, an increase of P625.00 per month/employee to all qualified regular
supervisors who are in the service of the COMPANY as of said date and who are still in its employ on the
signing of the Agreement, subject to the conditions set forth in subparagraph (d) hereunder;

b) Effective July 26, 1988, an increase of P625.00 per month/employee to all covered supervisors;
c) Effective July 26, 1989, an increase of P625.00 per month/employee to all covered supervisors;

d) The salary increase from May 12, 1987 to November 30, 1987 shall be excluding and without
increment on fringe benefits and/or premiums and shall solely be on basic salary.

On January 26, 1989, respondents PIMASUFA and NLU filed a complaint with the Arbitration Branch of
the National Labor Relations Commission (NLRC), docketed as NLRC-NCR Case No. 00-01-00584, charging
petitioner with violation of R.A. No. 6640.[3] Respondents attached to their complaint a numerical
illustration of wage distortion resulting from the implementation of R.A. No. 6640.

On March 19, 1990, the Labor Arbiter rendered his Decision in favor of respondents. Petitioner was
ordered to give the members of respondent PIMASUFA wage increases equivalent to 13.5% of their basic
pay they were receiving prior to December 14, 1987. The Labor Arbiter held:

As regards the issue of wage distortion brought about by the implementation of R.A. 6640

It is correctly pointed out by the union that employees cannot waive future benefits, much less those
mandated by law. That is against public policy as it would render meaningless the law. Thus, the waiver
in the CBA does not bar the union from claiming adjustments in pay as a result of distortion of wages
brought about by the implementation of R.A. 6640.

Just how much are the supervisors and foremen entitled to correct such distortion is now the question.
Pursuant to the said law, those who on December 14, 1987 were receiving less than P100.00 are all
entitled to an automatic across- the-board increase of P10.00 a day. The percentage in increase given
those who received benefits under R.A. 6640 should be the same percentage given to the supervisors
and foremen.

The statutory minimum pay then was P54.00 a day. With the addition of P10.00 a day, the said minimum
pay raised to P64.00 a day. The increase of P10.00 a day is P13.5% of the minimum wage prior to
December 14, 1987. The same percentage of the pay of members of petitioner prior to December 14,
1987 should be given them.
Finally, the claim of respondent that the filing of the present case, insofar as the provision of R.A. 6640 is
concerned, is premature does not deserve much consideration considering that as of December 1988,
complainant submitted in grievance the aforementioned issue but the same was not settled.[4]

On appeal by petitioner, the NLRC, in its Resolution dated January 8, 1991, affirmed the Labor Arbiter's
judgment.

Undaunted, petitioner filed a petition for certiorari with this Court. However, we referred the petition to
the Court of Appeals pursuant to our ruling in St. Martin Funeral Homes v. NLRC.[5] It was docketed
therein as CA-G.R. SP No. 54379.

On July 21, 2004, the appellate court rendered its Decision affirming the Decision of the NLRC with
modification by raising the 13.5% wage increase to 18.5%. We quote the pertinent portions of the Court
of Appeals Decision, thus:

Anent the fourth issue, petitioner asseverates that the wage distortion issue is already barred by Sec. 2
Article IV of the Contract denominated as "The Company and Supervisors and Foremen Contract" dated
December 18, 1987 declaring that it "absolves, quit claims and releases the COMPANY for any monetary
claim they have, if any there might be or there might have been previous to the signing of this
agreement." Petitioner interprets this as absolving it from any wage distortion brought about by the
implementation of the new minimum wage law. Since the contract was signed on December 17, 1987, or
after the effectivity of Republic Act No. 6640, petitioner claims that private respondent is deemed to
have waived any benefit it may have under the new law.

We are not persuaded.

Contrary to petitioner's stance, the increase resulting from any wage distortion caused by the
implementation of Republic Act 6640 is not waivable. As held in the case of Pure Foods Corporation vs.
National Labor Relations Commission, et al.:

"Generally, quitclaims by laborers are frowned upon as contrary to public policy and are held to be
ineffective to bar recovery for the full measure of the worker's rights. The reason for the rule is that the
employer and the employee do not stand on the same footing."

Moreover, Section 8 of the Rules Implementing RA 6640 states:

No wage increase shall be credited as compliance with the increase prescribed herein unless expressly
provided under valid individual written/collective agreements; and provided further that such wage
increase was granted in anticipation of the legislated wage increase under the act. But such increases
shall not include anniversary wage increases provided in collective bargaining agreements.

Likewise, Article 1419 of the Civil Code mandates that:

When the law sets, or authorizes the setting of a minimum wage for laborers, and a contract is agreed
upon by which a laborer accepts a lower wage, he shall be entitled to recover the deficiency.

Thus, notwithstanding the stipulation provided under Section 2 of the Company and Supervisors and
Foremen Contract, we find the members of private respondent union entitled to the increase of their
basic pay due to wage distortion by reason of the implementation of RA 6640.

On the last issue, the increase of 13.5% in the supervisors and foremen's basic salary must further be
increased to 18.5% in order to correct the wage distortion brought about by the implementation of RA
6640. It must be recalled that the statutory minimum pay before RA 6640 was P54.00 a day. The increase
of P10.00 a day under RA 6640 on the prior minimum pay of P54.00 is 18.5% and not 13.5%. Thus,
petitioner should be made to pay the amount equivalent to 18.5% of the basic pay of the members or
private respondent union in compliance with the provisions of Section 3 of RA 6640."

Petitioner filed a motion for reconsideration but it was denied by the appellate court in its Resolution
dated February 18, 2005.

Hence, the present recourse, petitioner alleging that the Court of Appeals erred:

1) In awarding wage increase to respondent supervisors and foremen to cure an alleged wage distortion
that resulted from the implementation of R.A. No. 6640.

2) In disregarding the wage increases granted under the 1987 CBA correcting whatever wage distortion
that may have been created by R.A. No. 6640.

3) In awarding wage increase equivalent to 18.5% of the basic pay of the members of respondent
PIMASUFA in violation of the clear provision of R.A. No. 6640 excluding from its coverage employees
receiving wages higher than P100.00.
4) In increasing the NLRC's award of wage increase from 13.5% to 18.5%, which increase is very much
higher than the P10.00 daily increase mandated by R.A. No. 6640.

Petitioner contends that the findings of the NLRC and the Court of Appeals as to the existence of a wage
distortion are not supported by evidence; that Section 2 of R.A. No. 6640 does not provide for an
increase in the wages of employees receiving more than P100.00; and that the 1987 CBA has obliterated
any possible wage distortion because the increase granted to the members of respondent PIMASUFA in
the amount of P625.00 and P475.00 per month substantially widened the gap between the foremen and
supervisors and as against the rank and file employees.

Respondents PIMASUFA and NLU, despite notice, failed to file their respective comments.

In a Minute Resolution dated April 18, 2005, we denied the petition for petitioner's failure to show that
the Court of Appeals committed a reversible error.

Hence, this motion for reconsideration.

We grant the motion.

In the ultimate, the issue here is whether the implementation of R.A. No. 6640 resulted in a wage
distortion and whether such distortion was cured or remedied by the 1987 CBA.

R.A. No. 6727, otherwise known as the Wage Rationalization Act, explicitly defines "wage distortion" as:

x x x a situation where an increase in prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of differentiation.

Otherwise stated, wage distortion means the disappearance or virtual disappearance of pay differentials
between lower and higher positions in an enterprise because of compliance with a wage order.[6]
In this case, the Court of Appeals correctly ruled that a wage distortion occurred due to the
implementation of R.A. No. 6640. The numerical illustration submitted by respondents[7] shows such
distortion, thus:

II WAGE DISTORTION REGARDING RA-6640 (P10.00 per day increase effective December 31, 1987)

Illustration of Wage Distortion and corresponding wage adjustments as provided in RA-6640

NAME OF SUPERVISOR (S)

AND

FOREMAN (F)

RATE

BEFORE

INCREASE

OF

RA-6640

P10.00

RATE

AFTER

INCREASE

OF

RA-6640

P10.00

P109.01
OVER-

PASSED

P108.80

RATE AFTER

ADJUSTMENT

P10.00

P118.80

OVER-

PASSED

P188.08

RATE AFTER

ADJUSTMENT

P10.00

P128.08

OVER-

PASSED

P123.76

RATE AFTER

ADJUSTMENT

P10.00
1. ALCANTARA, V (S)

P 99.0

P 109.01

2. MORALES, A (F)

94.93

104.93

3. SALVO, R (F)

96.45

106.45

Note: No. 1 to 3 with increase of RA-6640

4. BUENCHUCHILLO, C (S)

102.38

102.38

P 112.38
5. MENDOZA, D (F)

107.14

107.14

117.14

6. DEL PRADO, M (S)

108.80

108.80

118.80

7. PALENSO, A (F)

109.71

109.71

P 119.71

8. OJERIO, E (S)

111.71

111.71

121.71
9. REYES, J (S)

114.98

114.98

124.98

10. PALOMIQUE, S (F)

116.79

116.79

126.79

11. PAGLINAWAN, A (S)

116.98

116.98

126.98

12. CAMITO, M (S)

117.04

117.04

127.04

13. TUMBOCON, P (S)

117.04

117.44

127.44

14. SISON JR., B (S)

118.08

118.08

128.08

15. BORJA, R (S)

119.80

119.80

P129.80

16. GINON, D (S)

123.76

123.76

133.76

17. GINON, T (S)

151.49
151.49

18.ANDRES, M (S)

255.72

255.72

Note: No. 4 to 18 no increase in R.A. No. 6640

Notably, the implementation of R.A. No. 6640 resulted in the increase of P10.00 in the wage rates of
Alcantara, supervisor, and Morales and Salvo, both foremen. They are petitioner's lowest paid supervisor
and foremen. As a consequence, the increased wage rates of foremen Morales and Salvo exceeded that
of supervisor Buencuchillo. Also, the increased wage rate of supervisor Alcantara exceeded those of
supervisors Buencuchillo and Del Prado. Consequently, the P9.79 gap or difference between the wage
rate of supervisor Del Prado and that of supervisor Alcantara was eliminated. Instead, the latter gained a
P.21 lead over Del Prado. Like a domino effect, these gaps or differences between and among the wage
rates of all the above employees have been substantially altered and reduced. It is therefore undeniable
that the increase in the wage rates by virtue of R.A. No. 6640 resulted in wage distortion or the
elimination of the intentional quantitative differences in the wage rates of the above employees.

However, while we find the presence of wage distortions, we are convinced that the same were cured or
remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner after the effectivity of
R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the
foremen, by P475.00, effective May 12, 1987. These increases re-established and broadened the gap, not
only between the supervisors and the foremen, but also between them and the rank-and-file employees.
Significantly, the 1987 CBA wage increases almost doubled that of the P10.00 increase under R.A. No.
6640. The P625.00/month means P24.03 increase per day for the supervisors, while the P475.00/month
means P18.26 increase per day for the foremen. These increases were to be observed every year,
starting May 12, 1987 until July 26, 1989. Clearly, the gap between the wage rates of the supervisors and
those of the foremen was inevitably re-established. It continued to broaden through the years.
Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with
R.A. No. 6640. We hold that the Court of Appeals erred in not taking into account the provisions of the
CBA viz-a-viz the wage increase under the said law. In National Federation of Labor v. NLRC,[8] we held:

We believe and so hold that the re-establishment of a significant gap or differential between regular
employees and casual employees by operation of the CBA was more than substantial compliance with
the requirements of the several Wage Orders (and of Article 124 of the Labor Code). That this re-
establishment of a significant differential was the result of collective bargaining negotiations, rather than
of a special grievance procedure, is not a legal basis for ignoring it. The NLRC En Banc was in serious
error when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the
ground that such differential "represent[ed] negotiated wage increase[s] which should not be considered
covered and in compliance with the Wage Orders. x x x"

In Capitol Wireless, Inc. v. Bate,[9] we also held:

x x x The wage orders did not grant across-the-board increases to all employees in the National Capital
Region but limited such increases only to those already receiving wage rates not more than P125.00 per
day under Wage Order Nos. NCR-01 and NCR-01-A and P142.00 per day under Wage Order No. NCR-02.
Since the wage orders specified who among the employees are entitled to the statutory wage increases,
then the increases applied only to those mentioned therein. The provisions of the CBA should be read in
harmony with the wage orders, whose benefits should be given only to those employees covered
thereby.

It has not escaped our attention that requiring petitioner to pay all the members of respondent
PIMASUFA a wage increase of 18.5%, over and above the negotiated wage increases provided under the
1987 CBA, is highly unfair and oppressive to the former. Obviously, it was not the intention of R.A. No.
6640 to grant an across-the-board increase in pay to all the employees of petitioner. Section 2 of R.A. No.
6640 mandates only the following increases in the private sector: (1) P10.00 per day for the employees
in the private sector, whether agricultural or non-agricultural, who are receiving the statutory minimum
wage rates; (2) P11.00 per day for non-agricultural workers and employees outside Metro Manila; and
(3) P10.00 per day for those already receiving the minimum wage up to P100.00. To be sure, only those
receiving wages P100.00 and below are entitled to the P10.00 wage increase. The apparent intention of
the law is only to upgrade the salaries or wages of the employees specified therein.[10] As the numerical
illustration shows, almost all of the members of respondent PIMASUFA have been receiving wage rates
above P100.00 and, therefore, not entitled to the P10.00 increase. Only three (3) of them are receiving
wage rates below P100.00, thus, entitled to such increase. Now, to direct petitioner to grant an across-
the-board increase to all of them, regardless of the amount of wages they are already receiving, would
be harsh and unfair to the former. As we ruled in Metropolitan Bank and Trust Company Employees
Union ALU-TUCP v. NLRC:[11]

x x x To compel employers simply to add on legislative increases in salaries or allowances without regard
to what is already being paid, would be to penalize employers who grant their workers more than the
statutory prescribed minimum rates of increases. Clearly, this would be counter-productive so far as
securing the interests of labor is concerned.

Corollarily, the Court of Appeals erred in citing Pure Foods Corporation v. National Labor Relations
Commission[12] as basis in disregarding the provisions of the 1987 CBA. The case involves, not wage
distortion, but illegal dismissal of employees from the service. The Release and Quitclaim executed
therein by the Pure Food's employees were intended to preclude them from questioning the termination
of their services, not their entitlement to wage increase on account of a wage distortion.

At this juncture, it must be stressed that a CBA constitutes the law between the parties when freely and
voluntarily entered into.[13] Here, it has not been shown that respondent PIMASUFA was coerced or
forced by petitioner to sign the 1987 CBA. All of its thirteen (13) officers signed the CBA with the
assistance of respondent NLU. They signed it fully aware of the passage of R.A. No. 6640. The duty to
bargain requires that the parties deal with each other with open and fair minds. A sincere endeavor to
overcome obstacles and difficulties that may arise, so that employer-employee relations may be
stabilized and industrial strife eliminated, must be apparent.[14] Respondents cannot invoke the
beneficial provisions of the 1987 CBA but disregard the concessions it voluntary extended to petitioner.
The goal of collective bargaining is the making of agreements that will stabilize business conditions and
fix fair standards of working conditions.[15] Definitely, respondents' posture contravenes this goal.

In fine, it must be emphasized that in the resolution of labor cases, this Court has always been guided by
the State policy enshrined in the Constitution that the rights of workers and the promotion of their
welfare shall be protected. However, consistent with such policy, the Court cannot favor one party, be it
labor or management, in arriving at a just solution to a controversy if the party concerned has no valid
support to its claim, like respondents here.

WHEREFORE, we GRANT petitioner's motion for reconsideration and REINSTATE the petition we likewise
GRANT. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 54379 is REVERSED.

SO ORDERED.

Puno, C.J., Corona, Azcuna and Leonardo-De Castro, JJ., concur.

[1] National Federation of Labor v. National Labor Relations Commission, G.R. No. 103586, July 21, 1994,
234 SCRA 311.

[2] An Act Providing for an Increase in the Wage of Public or Government Sector Employees on a Daily
Wage Basis and in the Statutory Minimum Wage and Salary Rates of Employees and Workers in the
Private Sector and for other Purposes. Official Gazette, Vol. 84, No. 7, February 15, 1988, pp. 759-761.

[3] Rollo, NCR-AC-N0.-00112, p. 2.

[4] Record, National Labor Relations Commission, pp. 172-173.

[5] G.R. No. 130866, September 16, 1998, 295 SCRA 494, ruling that all references in the amended
Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict observance of the doctrine
on the hierarchy of courts as the appropriate forum for the relief desired.

[6] Azucena, The Labor Code with Comments and Cases, Vol. 1, p. 301.

[7] Rollo, NCR-AC-No. 00112, p. 120.

[8] Supra, footnote 1.

[9] 316 Phil. 355 (1995).

[10] Manila Mandarin Employees Union v. National Labor Relations Commission, G.R. No. 108556,
November 19, 1996, 264 SCRA 320.

[11] G.R. No. 102636, September 10, 1993, 226 SCRA 269.
[12] G.R. No. 122653, December 12, 1987, 283 SCRA 133.

[13] Mactan Workers Union v. Aboitiz, G.R. No. L-30241, June 30, 1972, 45 SCRA 577, citing Shell Oil
Workers Union v. Shell Company of the Philippines, 39 SCRA 276 (1971).

[14] Werne, Law and Practice of the Labor Contract, Volume 1 Origin and Operation Disputes, 1957, p.
20.

[15] Werne, Law and Practice of the Labor Contract, Volume 1 Origin and Operation Disputes, 1957, p.
180.

DIVISION

[ GR NO. 157098, Jun 30, 2005 ]

NORKIS FREE v. NORKIS TRADING COMPANY +

DECISION

501 Phil. 170

PANGANIBAN, J.:

Wage Order No. ROVII-06, issued by the Regional Tripartite Wages and Productivity Board (RTWPB),
merely fixed a new minimum wage rate for private sector employees in Region VII; hence, respondent
cannot be compelled to grant an across-the-board increase to its employees who, at the time of the
promulgation of the Wage Order, were already being paid more than the existing minimum wage.

The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the July 30,
2002 Decision[2] and the January 16, 2003 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No.
54611. The disposition of the assailed Decision reads as follows:

"ACCORDINGLY, We GRANT the instant petition for certiorari. The Decision of public respondent
Voluntary Arbitrator in VA Case No. 374-VII-09-014-98E dated July 8, 1999, and Order dated August 13,
1999, denying petitioner's 'Motion for Reconsideration', are hereby SET ASIDE. Petitioner is hereby
declared to have lawfully complied with Wage Order No. ROVII-06. No pronouncement as to costs."[4]

The Decision[5] of Voluntary Arbitrator Perfecto R. de los Reyes III,[6] reversed by the CA, disposed as
follows:

"WHEREFORE, premises considered, this Office hereby decides in favor of Complainant. Respondent is
hereby ordered to grant its employees the amount of increases granted under RTWPB Wage Order
ROVII-06 in an across-the-board manner retroactive to the dates provided for under the said Wage
Order."[7]

The January 16, 2003 Resolution denied petitioner's Motion for Reconsideration.

The Facts

The CA summarized the undisputed factual antecedents as follows:

"The instant case arose as a result of the issuance of Wage Order No. ROVII-06 by the Regional Tripartite
Wages and Productivity Board (RTWPB) increasing the minimum daily wage by P10.00, effective October
1, 1998.

"Prior to said issuance, herein parties entered into a Collective Bargaining Agreement (CBA) effective
from August 1, 1994 to July 31, 1999.

'Sec. 1. Salary Increase. The Company shall grant a FIFTEEN (P15.00) PESOS per day increase to all its
regular or permanent employees effective August 1, 1994.'

'Sec. 2. Minimum Wage Law Amendment. In the event that a law is enacted increasing minimum wage,
an across-the-board increase shall be granted by the company according to the provisions of the law.'
"On January 27, 1998, a re-negotiation of the CBA was terminated and pursuant to which a
Memorandum of Agreement was forged between the parties. It was therein stated that petitioner shall
grant a salary increase to all regular and permanent employees as follows:

'Ten (10) pesos per day increase effective August 1, 1997; Ten (10) pesos per day increase effective
August 1, 1998.'

"Pursuant to said Memorandum of Agreement, the employees received wage increases of P10.00 per
day effective August 1, 1997 and P10.00 per day effective August 1, 1998. As a result, the agreed P10.00
re-negotiated salary increase effectively raised the daily wage of the employees to P165.00 retroactive
August 1, 1997; and another increase of P10.00, effective August 1, 1998, raising the employees['] daily
wage to P175.00.

"On March 10, 1998, the Regional Tripartite Wage Productivity Board (RTWPB) of Region VII issued Wage
Order ROVII-06 which established the minimum wage of P165.00, by mandating a wage increase of five
(P5.00) pesos per day beginning April 1, 1998, thereby raising the daily minimum wage to P160.00 and
another increase of five (P5.00) pesos per day beginning October 1, 1998, thereby raising the daily
minimum wage to P165.00 per day.

"In accordance with the Wage Order and Section 2, Article XII of the CBA, [petitioner] demanded an
across-the-board increase. [Respondent], however, refused to implement the Wage Order, insisting that
since it has been paying its workers the new minimum wage of P165.00 even before the issuance of the
Wage Order, it cannot be made to comply with said Wage Order.

"Thus, [respondent] argued that long before the passage of Wage Order ROVII-06 on March 10, 1998,
and by virtue of the Memorandum of Agreement it entered with herein [petitioner], [respondent] was
already paying its employees a daily wage of P165.00 per day retroactive on August 1, 1997, while the
minimum wage at that time was still P155.00 per day. On August 1, 1998, [respondent] again granted an
increase from P165.00 per day to P175.00, so that at the time of the effectivity of Wage Order No. 06 on
October 1, 1998 prescribing the new minimum wage of P165.00 per day, [respondent's] employees were
already receiving P175.00 per day.
"For failure of the parties to settle this controversy, a preventive mediation complaint was filed by herein
[petitioner] before the National Conciliation and Mediation Board, pursuant to which the parties
selected public respondent Voluntary Arbitrator to decide said controversy.

"Submitted for arbitral resolution is the sole issue of whether or not [respondent] has complied with
Wage Order No. ROVII-06, in relation to the CBA provision mandating an across-the-board increase in
case of the issuance of a Wage Order.

"In his decision, public respondent arbitrator found herein [respondent] not to have complied with the
wage order, through the following dispositions:

'The CBA provision in question (providing for an across-the-board increase in case of a wage order) is
worded and couched in a vague and unclear manner.

'x x x In order to judge the intention of the contracting parties, their contemporaneous and subsequent
acts shall be principally considered (Art. 1371, New Civil Code). Thus, this Office x x x required the
parties to submit additional evidence in order to be able to know and interpret the parties working
intent and application of Wage Order No. 06 issued by the Regional Tripartite Wages and Productivity
Board, Regional Office VII in relation to Section 2, Article XII provided for in the parties['] existing CBA.

'x x x Viewed from the foregoing facts and evidence, the working intent and application of RTWPB Wage
Order ROVII-06 in relation to Section 2, Article XII of the parties['] existing CBA is clearly established. The
evidence submitted by the parties, all point to the fact that their true intention on how to implement
existing wage orders is to grant such wage orders in an across-the-board manner in relation to the
provisions of Section 2, Article XII of their existing CBA. Respondent in this case [has] failed to comply
with its contractual obligation of implementing the increase under RTWPB Wage Order ROVII-06 in an
across-the-board manner as provided in Section 2, Article XII of its CBA with [petitioner].

'x x x x x x x x x'"[8]

Respondent elevated the case to the CA via a Petition for Certiorari and Prohibition under Rule 65 of the
Rules of Court.
Ruling of the Court of Appeals

The CA noted that the grant of an across-the-board increase, provided under Section 2 of Article XII of
the CBA, was qualified by the phrase "according to the provisions of the law." It thus stressed the
necessity of determining the import of Wage Order No. ROVII-06, the law involved in the present
controversy. Taking into consideration the opinion of the RTWPB, Region VII, the appellate court held
that respondent had sufficiently complied with Wage Order No. ROVII-06. The Board had opined that
"since adjustments granted are only to raise the minimum wage or the floor wage as a matter of policy, x
x x wages granted over the above amount set by this Board is deemed a compliance."

The CA added that the policy and intent of the Wage Order was to cushion the impact of the regional
economic crisis upon both the workers and the employers, not to enrich the employees at the expense
of the employers. Further, it held that to compel respondent to grant an across-the-board wage
increase, notwithstanding that it was already paying salaries to its employees above the minimum wage,
would be to penalize generous employers and effectively make them "wait for the passage of a new
wage order before granting any increase. This would be counter-productive [insofar] as securing the
interests of labor is concerned."[9]

The appellate court said that the Wage Order exempted from compliance those enterprises already
paying salaries equal to or more than the prescribed minimum wage; thus, the Order effectively made
the previous voluntary increases given by respondent to its employees creditable against the law-
mandated increase. Consequently, there was no need for the Collective Bargaining Agreement (CBA) to
provide expressly for such creditability.

Finally, the CA sustained respondent's explanation that the across-the-board increases provided in the
CBA was required only when a minimum wage law caused a distortion in the wage structure.

Hence, this Petition.[10]

Issues

In its Memorandum, petitioner submits the following issues for our consideration:
"I. Whether or not the Honorable Court of Appeals gravely abused its discretion in setting aside the
decision and resolution of the honorable voluntary arbitrator[.]

II. Whether or not the Honorable Court of Appeals gravely abused its discretion in considering the
Supplemental Memorandum of respondent and giving merit to evidence presented for the first time on
appeal and filed after the lapse of the non[-]extendible period of time to file memorandum and despite
an extension granted to respondent[.]

III. Whether or not the Honorable Court of Appeals gravely abused its discretion in disregarding
established jurisprudence on statutory construction."[11]

The main issue is whether respondent violated the CBA in its refusal to grant its employees an across-
the-board increase as a result of the passage of Wage Order No. ROVII-06. Also raised is the procedural
issue relating to the propriety of the admission by the CA of RTWPB's letter-opinion, which was attached
to respondent's Supplemental Memorandum submitted to that court on August 30, 2000, beyond the
July 17, 2000 extended deadline.

The Court's Ruling

The Petition lacks merit.

Main Issue:

Effect of Wage Order No. ROVII-06

on the Parties' CBA

Petitioner insists that respondent should have granted to the employees the increase stated in Wage
Order No. ROVII-06. In addition to the increases both parties had mutually agreed upon, the CBA
supposedly imposed upon respondent the obligation to implement the increases mandated by law
without any condition or qualification. To support its claim, petitioner repeatedly invokes Section 2 of
Article XII of the CBA, which reads:
"SECTION 2. Minimum Wage Law Amendment. In the event that a law is enacted increasing minimum
wage, an across-the-board increase shall be granted by the Company according to the provisions of the
law."

Interestingly, petitioner disregards altogether in its argument the qualifying phrase "according to the
provisions of the law" and merely focuses its attention on the "across-the-board increase" clause. Given
the entire sentence, it is clear that the above-quoted CBA provision does not support the unyielding view
of petitioner that the issuance of Wage Order No. ROVII-06 entitles its members to an across-the-board
increase, absolutely and without any condition.

Stipulations in a contract must be read together,[12] not in isolation from one another. When the terms
of its clauses are clear and leave no room for doubt as to the intention of the contracting parties, it
would not be necessary to interpret those terms, whose literal meanings should prevail.[13]

The CA correctly observed that the import of Wage Order No. ROVII-06 should be considered in the
implementation of the government-decreed increase. The present Petition makes no denial or
refutation of this finding, but merely an averment of the silence of the CBA on the creditability of
increases provided under the Agreement against those in the minimum wage under a wage order. It
insists that the parties intended no such creditability; otherwise, they would have expressly stated such
intent in the CBA.

We hold that the issue here is not about creditability, but the applicability of Wage Order No. ROVII-06 to
respondent's employees. The Wage Order was intended to fix a new minimum wage only, not to grant
across-the-board wage increases to all employees in Region VII. The intent of the Order is indicated in its
title, "Establishing New Minimum Wage Rates," as well as in its preamble: the purpose, reason or
justification for its enactment was "to adjust the minimum wage of workers to cushion the impact
brought about by the latest economic crisis not only in the Philippines but also in the Asian region."

In Cagayan Sugar Milling Company v. Secretary of Labor and Employment [14] and Manila Mandarin
Employees Union v. NLRC,[15] the Wage Orders that were the subjects of those cases were substantially
and similarly worded as Wage Order No. ROVII-06. In those cases, this Court construed the Orders along
the same line that it follows now: as providing for an increase in the prevailing statutory minimum wage
rates of workers. No across-the-board increases were granted.
Parenthetically, there are two methods of adjusting the minimum wage. In Employers Confederation of
the Phils. v. National Wages and Productivity Commission,[16] these were identified as the "floor wage"
and the "salary-ceiling" methods. The "floor wage" method involves the fixing of a determinate amount
to be added to the prevailing statutory minimum wage rates. On the other hand, in the "salary-ceiling"
method, the wage adjustment was to be applied to employees receiving a certain denominated salary
ceiling. In other words, workers already being paid more than the existing minimum wage (up to a
certain amount stated in the Wage Order) are also to be given a wage increase.

A cursory reading of the subject Wage Order convinces us that the intention of the Regional Board of
Region VII was to prescribe a minimum or "floor wage"; not to determine a "salary ceiling." Had the
latter been its intention, the Board would have expressly provided accordingly. The text of Sections 2
and 3 of the Order states:

"Section 2. AMOUNT AND MANNER OF INCREASE. Upon the effectivity of this Order, the daily minimum
wage rates for all the workers and employees in the private sector shall be increased by Ten Pesos
(P10.00) per day to be given in the following manner:

i. Five Pesos (P5.00) per day effective April 1, 1998, and

ii. Additional Five Pesos (P5.00) per day effective October 1, 1998.

"Section 3. UNIFORM WAGE RATE PER AREA CLASSIFICATION. To effect a uniform wage rate pursuant to
Section 1 hereof, the prescribed minimum wage after full implementation of this Order for each area
classification shall be as follows:

Area Classification Non-Agriculture Sector Agriculture Sector

Class A 165.00 150.00

Class B 155.00 140.00

Class C 145.00 130.00

Class D 135.00 120.00"

These provisions show that the prescribed minimum wage after full implementation of the P10 increase
in the Wage Order is P165 for Class A private non-agriculture sectors. It would be reasonable and logical,
therefore, to infer that those employers already paying their employees more than P165 at the time of
the issuance of the Order are sufficiently complying with the Order.
Further supporting this construction of Wage Order No. ROVII-06 is the opinion of its drafter, the RTWPB
Region VII. In its letter-opinion[17] answering respondent's queries, the Board gave a similar
interpretation of the essence of the Wage Order: to fix a new floor wage or to upgrade the wages of the
employees receiving lower than the minimum wage set by the Order.

Notably, the RTWPB was interpreting only its own issuance, not a statutory provision. The best authority
to construe a rule or an issuance is its very source,[18] in this case the RTWPB. Without a doubt, the
Board, like any other executive agency, has the authority to interpret its own rules and issuances; any
phrase contained in its interpretation becomes a part of those rules or issuances themselves.[19]
Therefore, it was proper for the CA to consider the letter dated June 13, 2000, written by the RTWPB to
explain the scope and import of the latter's own Order, as such interpretation is deemed a part of the
Order itself. That the letter was belatedly submitted to that Court is not fatal in the determination of this
particular case.

We cannot sustain petitioner, even if we assume that its contention is right and that the implementation
of any government-decreed increase under the CBA is absolute. The CBA is no ordinary contract, but
one impressed with public interest.[20] Therefore, it is subject to special orders on wages,[21] such as
those issued by the RTWPB. Capitol Wireless v. Bate[22] is squarely in point. The union in that case
claimed that all government-mandated increases in salaries should be granted to all employees across-
the-board without any qualification whatsoever, pursuant to the CBA provision that any government-
mandated wage increases should be over and above the benefits granted in the CBA. The Court denied
such claim and held that the provisions of the Agreement should be read in harmony with the Wage
Orders. Applying that ruling to the present case, we hold that the implementation of a wage increase for
respondent's employees should be controlled by the stipulations of Wage Order No. ROVII-06.

At the risk of being repetitive, we stress that the employees are not entitled to the claimed salary
increase, simply because they are not within the coverage of the Wage Order, as they were already
receiving salaries greater than the minimum wage fixed by the Order. Concededly, there is an increase
necessarily resulting from raising the minimum wage level, but not across-the-board. Indeed, a "double
burden" cannot be imposed upon an employer except by clear provision of law.[23] It would be unjust,
therefore, to interpret Wage Order No. ROVII-06 to mean that respondent should grant an across-the-
board increase. Such interpretation of the Order is not sustained by its text.[24]

In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the
Constitution: social justice[25] and the protection of the working class.[26] Social justice does not,
however, mandate that every dispute should be automatically decided in favor of labor. In every case,
justice is to be granted to the deserving and dispensed in the light of the established facts and the
applicable law and doctrine.[27]

WHEREFORE, the Petition is DENIED, and the assailed Decision and Resolution AFFIRMED. Costs against
petitioner.

SO ORDERED.

Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.

[1] Rollo, pp. 3-24.

[2] Annex "A" of Petition; id., pp. 26-39. Penned by Justice Eriberto U. Rosario Jr. and concurred in by
Justices Oswaldo D. Agcaoili (chairman, Special Fifteenth Division) and Danilo B. Pine (member).

[3] Annex "B" of Petition; id., p. 42. Penned by Justice Danilo B. Pine and concurred in by Justices Romeo
A. Brawner (acting chairman, Special Former Special Fifteenth Division) and Oswaldo D. Agcaoili.

[4] CA Decision, p. 13; rollo, p. 38.

[5] Annex "G" of Petition; id., pp. 117-129.

[6] Office of the Voluntary Arbitrator, Cebu City.

[7] Annex "T" of Petition, p. 6; rollo, p. 114.

[8] CA Decision, pp. 1-5; id., pp. 26-30.

[9] Id., pp. 11 & 36.

[10] This case was deemed submitted for decision on December 22, 2003, upon this Court's receipt of
petitioner's Memorandum, signed by Atty. Armando M. Alforque. Respondent's Memorandum -- signed
by Attys. Anastacio T. Muntuerto Jr., Arturo C. Fernan, Deolito L. Alvarez and Arlan Richard S. Alvarez --
was received by this Court on December 1, 2003.

[11] Petitioner's Memorandum, p. 7; rollo, p. 421. Original in uppercase.

[12] Article 1374, New Civil Code.

[13] Article 1370, New Civil Code.

[14] 284 SCRA 150, January 15, 1998.

[15] 264 SCRA 320, November 19, 1996.

[16] 201 SCRA 759, September 24, 1991.

[17] Rollo, p. 249.

[18] Bocobo v. Commission on Elections, 191 SCRA 576, November 21, 1990.

[19] City Government of Makati v. Civil Service Commission, 426 Phil. 631, February 6, 2002.
[20] Samahang Manggagawa sa Top Form Manufacturing v. NLRC, 356 Phil. 480, September 7, 1998.

[21] Article 1700 of the Civil Code provides: "The relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

[22] 246 SCRA 289, July 14, 1995.

[23] Vassar Industries, Inc. v. Vassar Industries Employees Union, 177 SCRA 323, September 7, 1989.

[24] Cagayan Sugar Milling Company v. Secretary of Labor and Employment, 284 SCRA 150, January 15,
1998.

[25] Section 10, Article II, 1987 Constitution.

[26] Section 18, Article II, 1987 Constitution.

[27] Lawin Security Services, Inc. v. NLRC, 339 Phil. 330, June 9, 1997.

G.R. No. 168654

DECISION
REYES, J.:

The Case

Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assailing the
January 9, 2009 Decision[2] and the May 26, 2009 Resolution[3] of the Court of Appeals (CA) in CA-G.R.
SP No. 01755. The dispositive portion of the assailed Decision reads:

WHEREFORE, the Decision dated August 31, 2005 and Resolution dated October 28, 2005 of the National
Labor Relations Commission (NLRC), Fourth Division, Cebu City, in NLRC Case No. V-000363-2005 are
REVERSED and SET ASIDE, and a new one rendered ordering Nia Jewelry Manufacturing:

(1) to reinstate petitioners to their respective positions as goldsmiths without loss of seniority
rights and other privileges; and
(2) to pay petitioners their full backwages inclusive of allowances and other benefits or their
monetary equivalent computed from the time their compensation was withheld up to their actual
reinstatement.

The case is REMANDED to the Labor Arbiter for the RECOMPUTATION of the total monetary award due
to petitioners in accord with this decision. The Labor Arbiter is ORDERED to submit his compliance within
thirty (30) days from notice of this decision, with copies furnished to the parties.[4] (citations omitted)

The assailed Resolution denied the petitioners' Motion for Reconsideration.[5]

The Factual Antecedents

Madeline Montecillo (Madeline) and Liza Trinidad (Liza), hereinafter referred to collectively as the
respondents, were first employed as goldsmiths by the petitioner Nia Jewelry Manufacturing of Metal
Arts, Inc. (Nia Jewelry) in 1996 and 1994, respectively. Madeline's weekly rate was P1,500.00 while Liza's
was P2,500.00. Petitioner Elisea Abella (Elisea) is Nia Jewelry's president and general manager.
There were incidents of theft involving goldsmiths in Nia Jewelry's employ.

On August 13, 2004, Nia Jewelry imposed a policy for goldsmiths requiring them to post cash bonds or
deposits in varying amounts but in no case exceeding 15% of the latter's salaries per week. The deposits
were intended to answer for any loss or damage which Nia Jewelry may sustain by reason of the
goldsmiths' fault or negligence in handling the gold entrusted to them. The deposits shall be returned
upon completion of the goldsmiths' work and after an accounting of the gold received.

Nia Jewelry alleged that the goldsmiths were given the option not to post deposits, but to sign
authorizations allowing the former to deduct from the latter's salaries amounts not exceeding 15% of
their take home pay should it be found that they lost the gold entrusted to them. The respondents
claimed otherwise insisting that Nia Jewelry left the goldsmiths with no option but to post the deposits.
The respondents alleged that they were constructively dismissed by Nia Jewelry as their continued
employments were made dependent on their readiness to post the required deposits.

Nia Jewelry averred that on August 14, 2004, the respondents no longer reported for work and signified
their defiance against the new policy which at that point had not even been implemented yet.

On September 7, 2004, the respondents filed against Nia Jewelry complaints[6] for illegal dismissal and
for the award of separation pay.
On September 20, 2004, the respondents filed their amended complaints[7] which excluded their earlier
prayer for separation pay but sought reinstatement and payment of backwages, attorney's fees and 13th
month pay.

Labor Arbiter Jose Gutierrez (LA Gutierrez) dismissed the respondents' complaints for lack of merit but
ordered Nia Jewelry to pay Madeline the sum of P3,750.00, and Liza, P6,250.00, representing their
proportionate entitlements to 13th month pay for the year 2004. LA Gutierrez ratiocinated that:

Their [respondents] claim is self-serving. As evidence to (sic) their claims that they were made to sign
blank trust receipts, complainants presented Annexes 'A'[,] 'B' and 'C'. Our examination, however, shows
that they are not blank trust receipts but rather they are filled up trust receipts.

The undisputed facts show that complainants were piece workers of the respondent who are engaged in
the processing of gold into various jewelry pieces. Because of the nature of its business, respondent was
plagued with too many incidents of theft from its piece workers. x x x This deposit [not exceeding 15% of
the salary for the week of the piece worker] is released back upon completion of work and after
accounting of the gold received by him or her. There is an alternative, however, the piece worker may
opt not to give a deposit, instead sign an authorization to allow the respondent to deduct from the
salary an amount not to exceed 15% of his take home pay, should it be found out that he lost the gold
[entrusted] to him or her due to his or her fault or negligence. The complainants did not like to post a
deposit, or sign an authorization. They instead told their fellow goldsmiths that they will bring the matter
to the Labor Commission. Complainants did not anymore report for work and did not anymore perform
their tasks. The fact of complainants not being dismissed from employment was duly attested to by his
co-workers who executed their Joint Affidavit under oath, Annex '4'.
As further evidence to prove that they were dismissed, complainants presented the minutes of [the]
Sept. 7, 2004 conference.

We examined the statements therein, we find that there is no admission on the part of the respondents
that they terminate[d] the complainants from employment. Respondents only inform[ed] the
complainants to put up the appropriate cash bond before they could be allowed to return back to work
which they previously refused to perform, as a sign of their protest to the requirement to post cash bond
or to sign an authorization.

xxxx

x x x It is clearly shown that complainants were paid with their 13th month pay for the year 2001, 2002
and 2003. However, for the year 2004, considering that complainants have worked until the month of
August, we rule to grant them the proportionate 13th month pay as there is no showing that they were
already paid. The other money claims are denied for lack of merit. x x x.[8]
The respondents filed an appeal before the NLRC which affirmed LA Gutierrez's dismissal of the
amended complaints but deleted the award of 13th month pay based on findings that the former had
contracted unpaid individual loans from Nia Jewelry. The NLRC found that:

x x x [I]t was complainants who refused to work with the respondents when they were required to post
cash bond or sign an authorization for deduction for the gold material they received and to be
manufactured into various jewelries. x x x We find it logically sound for the latter [Nia Jewelry] to
innovate certain policy or rule to protect its own business. To deprive them of such prerogative
[management prerogative] will be likened to 'killing the goose that lays the golden eggs.'

x x x [C]omplainants failed to prove their affirmative allegations in the respective complaints that they
were indeed dismissed. On the contrary, respondents have convincingly shown that if (sic) were
complainants who voluntarily abandoned from (sic) their work by refusing to abide with the newly
adopted company policy of putting up a cash bond or signing an authorization for deduction for the gold
materials entrusted to them in case of loss or pilferage.

x x x [B]oth complainants are still indebted with (sic) the respondents in the amounts of P5,118.63 in the
case of Madeline Montecillo and P7,963.11 in the case of Liza Montecillo. Such being the case[,]
Madeline Montecillo has still on account payable of P1,368.63 while Liza Montecillo is still indebted of
P1,713.71. This principle of offsetting of credit should be allowed to preclude unjust enrichment at the
expense of the respondents.[9]
The respondents filed a Petition for Certiorari[10] before the CA ascribing patent errors in the
appreciation of facts and application of jurisprudence on the part of the NLRC when it ruled that what
occurred was not a case of illegal dismissal but of abandonment of work.

On January 9, 2009, the CA rendered the now assailed Decision[11] reversing the findings of the LA and
the NLRC. The CA ruled:

According to [the] private respondents, they required a deposit or cash bond from [the] petitioners in
order to secure their interest against gold thefts committed by some of their employees. If the employee
fails to make the required deposit, he will not be given gold to work on. Further, [the] private
respondents admitted during the conciliation proceedings before Executive Labor Arbiter Violeta Ortiz-
Bantug that [the] petitioners would only be allowed back to work after they had posted the
proportionate cash bond.

The Labor Code of the Philippines provides:

ART. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;

(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized
by the employer or authorized in writing by the individual worker concerned; and

(c) In cases where the employer is authorized by law or regulations issued by the Secretary of
Labor.

Article 114. Deposits for loss or damage. No employer shall require his worker to make deposits from
which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or
equipment supplied by the employer, except when the employer is engaged in such trades, occupations
or business where the practice of making deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor in appropriate rules and regulations.

Applying these provisions to the case at bar, before [the] petitioners may be required to deposit cash or
agree to a salary deduction proportionate to the value of gold delivered to them, the employer must
comply with the relevant conditions imposed by law. Hence, the latter must prove that there is an
existing law or regulation authorizing it to impose such burden on its employees. And, in case of deposit,
that it is engaged in a trade, occupation or business where such requirement is a recognized practice. Nia
Jewelry obviously failed in this respect. Surely,
mere invocation of management prerogative cannot exempt it from compliance with the strict
requirements of law. Accordingly, [w]e hold that Nia Jewelry's unilateral imposition of cash deposit or
salary deduction on [the] petitioners is illegal. For that matter, when Ni[]a Jewelry refused to give
assignment to [the] petitioners or to admit them back to work because they failed to give cash deposit or
agree to a salary deduction, it was deemed to have constructively dismissed [the] petitioners. Obviously,
such deposit or salary deduction was imposed as a condition for [the] petitioners' continuing
employment. Non-compliance indubitably meant termination of [the] petitioners' employment. Suldao
vs. Cimech System Construction, Inc.[12] enunciated:

Constructive dismissal or a constructive discharge has been defined as quitting because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank
and a diminution in pay. There is constructive dismissal when the continued employment is rendered
impossible so as to foreclose any choice on the employee's part except to resign from such employment.

The fact that [the] petitioners lost no time in filing the complaint for illegal dismissal lucidly negates [the]
private respondents' claim that the former had abandoned their work. A contrary notion would not only
be illogical but also absurd.[13] Indeed, prompt filing of a case for illegal dismissal, on one hand, is
anathema to the concept of abandonment, on the other.

Finally, under Article 279 of the Labor Code, an illegally dismissed employee is entitled to reinstatement
without loss of seniority rights and other privileges; full backwages, inclusive of allowances; and other
benefits or their monetary equivalent computed from the time his compensation was withheld from him
up to the time of his actual reinstatement.[14] x x x.
As for damages, it is a rule that moral damages may be recovered where the dismissal of the employee
was attended by bad faith or fraud or constituted an act oppressive to labor, or was done in a manner
contrary to morals, good customs or public policy. x x x [w]e find that private respondents did not act
with oppression, bad faith or fraud. They imposed a cash bond or deposit on herein petitioners in the
honest belief that it was the best way to protect their interest against gold theft in the company. x x x.
[15] (some citations omitted)

The Issues

The following are to be resolved in the instant Petition for Review:[16]

I.

WHETHER OR NOT THE COURT OF APPEALS GROSSLY ERRED IN GIVING DUE COURSE TO THE PETITION
[under Rule 65 of the Rules of Court], IN EFFECT, FINDING GRAVE ABUSE OF DISCRETION, AMOUNTING
TO LACK OR EXCESS OF JURISDICTION ON THE PART OF THE NLRC, DESPITE THE FACT THAT THE SUBJECT
DECISION AND RESOLUTION THEREIN ARE IN PERFECT ACCORD WITH THE EVIDENCE ON RECORD AND
APPLICABLE LAWS.
II.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THERE WAS
CONSTRUCTIVE DISMISSAL IN THE PRESENT CASE AND ORDERING RESPONDENTS' REINSTATEMENT AS
WELL AS THE PAYMENT OF THEIR BACKWAGES AND OTHER MONETARY BENEFITS WITHOUT FACTUAL OR
LEGAL BASES.[17]

The petitioners now argue that the CA should have outrightly dismissed the petition filed before it as the
respondents had resorted to an erroneous mode of appeal. The arguments raised in the petition were
the same ones already passed upon by the LA and the NLRC. What the respondents sought was the CA's
re-evaluation of the facts and evidence. The petition was thus based on purported errors of judgment
which are beyond the province of a petition for certiorari.

The petitioners likewise insist that the respondents abandoned their work without due notice and to the
prejudice of the former. The respondents' co-workers attested to the foregoing circumstance.[18] The
respondents are goldsmiths whose skills are indispensable to a jewelry manufacturing business, thus, it
is not in accord with both logic and experience for the petitioners to just fire them only to train new
workers. Moreover, in the complaints and amended complaints, the respondents did not claim for
reinstatement, hence, implying their admission that they were not terminated.
Further, under Articles 114 and 115[19] of the Labor Code, an employer may require a worker to post a
deposit even before a loss or damage has occurred, provided that deductions from the deposit can be
made only upon proof that the worker is liable for the loss or damage. In case no loss or damage is
incurred, the deposit shall be returned to the worker after the conduct of an accounting which was what
happened in the case at bar. This is a valid exercise of management prerogative the scope of which
includes the setting of policies relative to working methods, procedures to be followed and working
regulations.[20]

The petitioners stress that they did not transgress the respondents' rights. The respondents, who
expressed to their co-workers their lack of fear to have their employment severed, are motivated by
their greed to extract money from the petitioners.

The petitioners conclude that the CA should have accorded respect to the findings of the LA and the
NLRC especially since they were not arrived at arbitrarily or in disregard of the evidence on record.

In the respondents' Comment,[21] they reiterate the arguments they had presented in the proceedings
below. The respondents emphasize that when they pleaded for reinstatement during the conference
with the petitioners on September 7, 2004, the latter openly admitted without reservation that the
former will only be allowed to return to work if they will post the required cash bond.
Further, the respondents claim that there was no plausible reason for them to abandon their
employment considering the length of their service and the fact that they were being paid rates above
the minimum wage. Citing Hantex Trading Co. Inc. v. Court of Appeals,[22] the respondents argue that no
employee in his right mind would recklessly abandon his job to join the ranks of the unemployed and
choose to unduly expose his family to hunger and untold hardship.

Besides, in Anflo Management & Investment Corp. v. Rodolfo Bolanio,[23] this Court had the occasion to
state that the filing of a complaint for illegal dismissal is inconsistent with a charge of abandonment, for
an employee who takes steps to protest his lay off cannot by any logic be said to have abandoned his
work.

The respondents also claim that the petitioners misrepresented to this Court that the former did not
pray for reinstatement as the dorsal portions of the amended complaints indicate otherwise.

Moreover, the petitioners failed to prove their authority granted by either the law, or regulations issued
by the Secretary of Labor, allowing them to require their workers to post deposits. The petitioners also
failed to establish that Nia Jewelry is engaged in a trade, occupation or business

where the practice of making deposits is a recognized one or is considered as necessary or desirable by
the Secretary of Labor.

Citing Sections 12,[24] 13[25] and 14,[26] Book III, Rule VIII of the Omnibus Rules Implementing the
Labor Code (Omnibus Rules), the respondents posit that salary deductions made prior to the occurrence
of loss or damage are illegal and constitute as undue interferences in the workers' disposal of their
wages. Further, the workers must first be given the opportunity to show cause why deductions should
not be made. If to be made, deductions should be fair, reasonable and should not exceed the actual loss
or damage. In the case at bar, the respondents were required to post cash bonds even when there is no
proof yet of their fault or negligence.

In the petitioners' Reply,[27] they averred that the day after Nia Jewelry required from its employees the
posting of deposits and even before the policy was actually implemented, the respondents promptly
stopped reporting for work despite Elisea's attempt to get in touch with them. The petitioners convened
the employees to discuss the propriety of imposing the

new policy and to afford them ample opportunity to air their concerns. The respondents' acts
contravene Article 19 of the New Civil Code (NCC) which requires every person to act with justice, give
everyone his due and observe honesty and good faith.

Further, it is clear in the Minutes of the Conciliation Proceedings[28] before the LA that the respondents
were not willing to be reinstated and preferred instead the payment of separation pay. Hence, no prayer
for reinstatement was indicated in the original complaints filed by them. As an afterthought, however,
they amended their complaints to reflect that they were likewise seeking for reinstatement.

The petitioners also point out that the doctrines in Hantex[29] and Anflo Management[30] cited by the
respondents find no application in the case at bar. In Hantex, the employer presented mere cash
vouchers to prove abandonment by the employee. In the case before us, sufficient evidence show that
the respondents abandoned their work. In Anflo Management, the employer expressly uttered words
terminating the employee who in turn filed a complaint the day right after the incident. In the case now
under our consideration, the respondents merely made a bare claim of illegal dismissal. Rightly so in
Abad v. Roselle Cinema,[31] it was ruled that an employer's claim of not having terminated an employee,
when supported by substantial evidence, should not be outrightly overcome by the argument that an
employee would not have filed a complaint for illegal dismissal if he were not really dismissed. The
circumstances surrounding the separation from employment should be taken into account.

Under Article 114 of the Labor Code, the Secretary of Labor is conferred the authority to promulgate
rules determining the circumstances when the making of deposits is deemed recognized, necessary or
desirable. However, Section 14,[32] Book III, Rule VIII of the Omnibus Rules does not define those
circumstances. What is defined is the circumstances when deductions can be made. It can thus be
inferred that the intention is for the courts to determine on a case to case basis what should be
considered as recognized, necessary or desirable especially in the light of the existence of myriads of
businesses which are practically impossible to enumerate in modern society. The petitioners hence argue
that the validity of requiring cash deposits should be scrutinized with due consideration of its
reasonableness and necessity. Further, Article 1306 of the NCC allows contracting parties to establish
stipulations, clauses, terms and conditions which they may deem convenient provided they do not
contravene the law, morals, good customs, public order or public policy. In the case at bar, the policy
adopted by the petitioners was neither unreasonable nor oppressive. It was intended to benefit all the
contracting parties.

Lastly, while the respondents raise the issue of the illegality of deductions, the petitioners stress that it is
academic because no deduction was actually made yet.

The Court's Ruling

The instant petition is partially meritorious.

The petitioners raise the procedural issue of whether or not the CA validly gave due course to the
petition for certiorari filed before it under Rule 65 of the Rules of Court. As the substantive issue of
whether or not the

petitioners constructively dismissed the respondents is closely-intertwined with the procedural question
raised, they will be resolved jointly.

Yolanda Mercado, et al. v. AMA Computer College-Paraaque City, Inc.[33] is instructive as to the nature of
a petition for review on certiorari under Rule 45, and a petition for certiorari under Rule 65, viz:

x x x [R]ule 45 limits us to the review of questions of law raised against the assailed CA decision. In ruling
for legal correctness, we have to view the CA decision in the same context that the petition for certiorari
it ruled upon was presented to it; we have to examine the CA decision from the prism of whether it
correctly determined the presence or absence of grave abuse of discretion in the NLRC decision before
it, not on the basis of whether the NLRC decision on the merits of the case was correct. In other words,
we have to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the NLRC
decision challenged before it. This is the approach that should be basic in a Rule 45 review of a CA ruling
in a labor case. In question form, the question to ask is: Did the CA correctly determine whether the
NLRC committed grave abuse of discretion in ruling on the case?[34]
It is thus settled that this Court is bound by the CA's factual findings. The rule, however, admits of
exceptions, among which is when the CA's findings are contrary to those of the trial court or
administrative body exercising quasi-judicial functions from which the action originated.[35] The case
before us falls under the aforementioned exception.

The petitioners argue that the respondents resorted to an erroneous mode of appeal as the issues raised
in the petition lodged before the CA essentially sought a re-evaluation of facts and evidence, hence,
based on purported errors of judgment which are outside the ambit of actions which can be aptly filed
under Rule 65.

We agree.

Again in Mercado,[36] we ruled that:

x x x [I]n certiorari proceedings under Rule 65 of the Rules of Court, the appellate court does not assess
and weigh the sufficiency of evidence upon which the Labor Arbiter and the NLRC based their
conclusion. The query in this proceeding is limited to the determination of whether or not the NLRC
acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering its decision.
However, as an exception, the appellate court may examine and measure the factual findings of the
NLRC if the same are not supported by substantial evidence. x x x.[37]

In the case at bench, in the petition for certiorari under Rule 65 filed by the respondents before the CA,
the following issues were presented for resolution:

I.

WHETHER OR NOT PUBLIC RESPONDENT [NLRC] committed patent errors in the appreciation of facts and
application of pertinent jurisprudence amounting to grave abuse of discretion or lack or in excess of
jurisdiction WHEN IT HELD THAT PRIVATE RESPONDENTS [herein petitioners] ARE NOT GUILTY OF
ILLEGAL DISMISSAL BECAUSE IT WAS THE PETITIONERS [herein private respondents] WHO ABANDONED
THEIR JOB AND REFUSED TO WORK WITH RESPONDENTS WHEN THEY WERE REQUIRED TO PUT UP CASH
BOND OR SIGN AN AUTHORIZATION FOR DEDUCTION.

II.
WHETHER OR NOT PUBLIC RESPONDENT committed patent errors in the appreciation of facts and
application of pertinent jurisprudence

amounting to grave abuse of discretion or lack or in excess of jurisdiction WHEN IT DID NOT ORDER THE
REINSTATEMENT OF HEREIN PETITIONERS AND DELETED THE AWARD OF 13th MONTH PAY AND DENIED
THE CLAIMS OF ATTORNEY'S FEES, DAMAGES AND FULL BACKWAGES.[38]

Essentially, the issues raised by the respondents for resolution by the CA were anchored on an alleged
misappreciation of facts and evidence by the NLRC and the LA when they both ruled that abandonment
of work and not constructive dismissal occurred.

We agree with the petitioners that what the respondents sought was a re-evaluation of evidence, which
as a general rule cannot be properly done in a petition for certiorari under Rule 65, save in cases where
substantial evidence to support the NLRC's findings are wanting.

In Honorable Ombudsman Simeon Marcelo v. Leopoldo Bungubung,[39] the Court defined substantial
evidence and laid down guidelines relative to the conduct of judicial review of decisions rendered by
administrative agencies in the exercise of their quasi-judicial power, viz:
x x x Substantial evidence is more than a mere scintilla of evidence. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if other minds equally
reasonable might conceivably opine otherwise. Second, in reviewing administrative decisions of the
executive branch of the government, the findings of facts made therein are to be respected so long as
they are supported by substantial evidence. Hence, it is not for the reviewing court to weigh the
conflicting evidence, determine the credibility of witnesses, or otherwise substitute its judgment for that
of the administrative agency with respect to the sufficiency of evidence. Third, administrative decisions
in matters within the executive jurisdiction can only be set aside on proof of gross abuse of discretion,
fraud, or error of law. These principles negate the

power of the reviewing court to re-examine the sufficiency of the evidence in an administrative case as if
originally instituted therein, and do not authorize the court to receive additional evidence that was not
submitted to the administrative agency concerned.[40] (citations omitted)

We find the factual findings of the LA and the NLRC that the respondents were not dismissed are
supported by substantial evidence.

In the Joint Affidavit[41] executed by Generoso Fortunaba, Erdie Pilares and Crisanto Ignacio, all
goldsmiths under Nia Jewelry's employ, they expressly stated that they have personal knowledge of the
fact that the respondents were not terminated from employment. Crisanto Ignacio likewise expressed
that after Elisea returned from the United States in the first week of September of 2004, the latter even
called to inquire from him why the respondents were not reporting for work. We observe that the
respondents had neither ascribed any ill-motive on the part of their fellow goldsmiths nor offered any
explanation as to why the latter made declarations adverse to their cause. Hence, the statements of the
respondents' fellow goldsmiths deserve credence. This is especially true in the light of the respondents'
failure to present any notice of termination issued by the petitioners. It is settled that there can be
dismissal even in the absence of a termination notice.[42] However, in the case at bench, we find that
the acts of the petitioners towards the respondents do not at all amount to constructive dismissal.
Constructive dismissal occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility, or disdain by an employer becomes

unbearable to the employee.[43]

In the case now under our consideration, the petitioners did not whimsically or arbitrarily impose the
policy to post cash bonds or make deductions from the workers' salaries. As attested to by the
respondents' fellow goldsmiths in their Joint Affidavit, the workers were convened and informed of the
reason behind the implementation of the new policy. Instead of airing their concerns, the respondents
just promptly stopped reporting for work.

Although the propriety of requiring cash bonds seems doubtful for reasons to be discussed hereunder,
we find no grounds to hold that the respondents were dismissed expressly or even constructively by the
petitioners. It was the respondents who merely stopped reporting for work. While it is conceded that the
new policy will impose an additional burden on the part of the respondents, it was not intended to result
in their demotion. Neither is a diminution in pay intended because as long as the workers observe due
diligence in the performance of their tasks, no loss or damage shall result from their handling of the gold
entrusted to them, hence, all the amounts due to the goldsmiths shall still be paid in full. Further, the
imposition of the new policy cannot be viewed as an act tantamount to discrimination, insensibility or
disdain against the respondents. For one, the policy was intended to be implemented upon all the
goldsmiths in Nia Jewelry's employ and not solely upon the respondents. Besides, as stressed by the
petitioners, the new policy was intended to merely curb the incidences of gold theft in the work place.
The new policy can hardly be said to be disdainful or insensible to the workers as to render their
continued employment unreasonable, unlikely or impossible.
On September 7, 2004, or more or less three weeks after the imposition of the new policy, the
respondents filed their complaints for illegal dismissal which include their prayer for the payment of
separation pay. On September 20, 2004, they filed amended complaints seeking for reinstatement
instead.

The CA favored the respondents' argument that the latter could not have abandoned their work as it can
be presumed that they would not have filed complaints for illegal dismissal had they not been really
terminated and had they not intended themselves to be reinstated. We find that the presumption relied
upon by the CA pales in comparison to the substantial evidence offered by the petitioners that it was the
respondents who stopped reporting for work and were not dismissed at all.

In sum, we agree with the petitioners that substantial evidence support the LA's and the NLRC's findings
that no dismissal occurred. Hence, the CA should not have given due course to and granted the petition
for certiorari under Rule 65 filed by the respondents before it.

In view of our disquisition above that the findings of the LA and the NLRC that no constructive dismissal
occurred are supported by substantial evidence, the CA thus erred in giving due course to and granting
the petition filed before it. Hence, it is not even necessary anymore to resolve the issue of whether or
not the policy of posting cash bonds or making deductions from the goldsmiths' salaries is proper.
However, considering that there are other goldsmiths in Nia Jewelry's employ upon whom the policy
challenged by the respondents remain to be enforced, in the interest of justice and to put things to rest,
we shall resolve the issue.
Article 113 of the Labor Code is clear that there are only three exceptions to the general rule that no
deductions from the employees'

salaries can be made. The exception which finds application in the instant petition is in cases where the
employer is authorized by law or regulations issued by the Secretary of Labor to effect the deductions.
On the other hand, Article 114 states that generally, deposits for loss or damages are not allowed except
in cases where the employer is engaged in such trades, occupations or business where the practice of
making deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor
in appropriate rules or regulations.

While employers should generally be given leeways in their exercise of management prerogatives, we
agree with the respondents and the CA that in the case at bar, the petitioners had failed to prove that
their imposition of the new policy upon the goldsmiths under Nia Jewelry's employ falls under the
exceptions specified in Articles 113 and 114 of the Labor Code.

The petitioners point out that Section 14, Book III, Rule VIII of the Omnibus Rules does not define the
circumstances when the making of deposits is deemed recognized, necessary or desirable. The
petitioners then argue that the intention of the law is for the courts to determine on a case to case basis
what should be regarded as recognized, necessary or desirable and to test an employer's policy of
requiring deposits on the bases of its reasonableness and necessity.

We are not persuaded.

Articles 113 and 114 of the Labor Code are clear as to what are the exceptions to the general prohibition
against requiring deposits and effecting deductions from the employees' salaries. Hence, a statutory
construction of the aforecited provisions is not called for. Even if we were however called upon to
interpret the provisions, our inclination would still be to strictly construe the same against the employer
because evidently, the posting of

cash bonds and the making of deductions from the wages would inarguably impose an additional burden
upon the employees.

While the petitioners are not absolutely precluded from imposing the new policy, they can only do so
upon compliance with the requirements of the law.[44] In other words, the petitioners should first
establish that the making of deductions from the salaries is authorized by law, or regulations issued by
the Secretary of Labor. Further, the posting of cash bonds should be proven as a recognized practice in
the jewelry manufacturing business, or alternatively, the petitioners should seek for the determination
by the Secretary of Labor through the issuance of appropriate rules and regulations that the policy the
former seeks to implement is necessary or desirable in the conduct of business. The petitioners failed in
this respect. It bears stressing that without proofs that requiring deposits and effecting deductions are
recognized practices, or without securing the Secretary of Labor's determination of the necessity or
desirability of the same, the imposition of new policies relative to deductions and deposits can be made
subject to abuse by the employers. This is not what the law intends.

In view of the foregoing, we hold that no dismissal, constructive or otherwise, occurred. The findings of
the NLRC and the LA that it was the respondents who stopped reporting for work are supported by
substantial evidence. Hence, the CA erred when it re-evaluated the parties' respective evidence and
granted the petition filed before it. However, we agree with the CA that it is baseless for Nia Jewelry to
impose its new policy upon the goldsmiths under its employ without first complying with the strict
requirements of the law.
WHEREFORE, the instant petition is PARTIALLY GRANTED. The assailed Decision and Resolution of the CA
dated January 9, 2009 and May 26, 2009, respectively, are REVERSED only in so far as they declared that
the respondents were constructively dismissed and entitled to reinstatement and payment of
backwages, allowances and benefits. However, the CA's ruling that the petitioners' imposition of its new
policy upon the respondents lacks legal basis, stands.

SO ORDERED.

BIENVENIDO L. REYES

Associate Justice
WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

ARTURO D. BRION
Associate Justice

JOSE P. PEREZ

Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson, Second Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify
that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA

Chief Justice

[1] Rollo, pp. 26-52.

[2] Penned by Associate Justice Amy C. Lazaro-Javier, with Associate Justices Francisco P. Acosta and Rodil
V. Zalameda, concurring; id. at 12-20.

[3] Id. at 22-24.

[4] Id. at 19-20.

[5] Id. at 164-167.

[6] Id. at 54 and 56.

[7] Id. at 195-196.

[8] Id. at 77-78.

[9] Id. at 113-114.

[10] Id. at 128-146.

[11] Supra note 2.

[12] G.R. No. 171392, October 30, 2006, 506 SCRA 256, 260-261.

[13] Far East Agricultural Supply, Inc. v. Lebatique, G.R. No. 162813, February 12, 2007, 515 SCRA 491.

[14] De Guzman v. NLRC, G.R. No. 167701, December 12, 2007, 540 SCRA 21, 34.

[15] Rollo, pp. 16-18.

[16] Supra note 1.

[17] Id. at 34.

[18] Please see the Joint Affidavit of Generoso Fortunoba, Erdie Pilares and Crisanto Ignacio, id. at 161-
162.

[19] Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of the
loss or damage shall be made unless the employee has been heard thereon, and his responsibility has
been clearly shown.

[20] Citing San Miguel Corporation v. Ubaldo, G.R. No. 92859, February 1, 1993, 218 SCRA 293.

[21] Rollo, pp. 182-188.

[22] 438 Phil 737 (2002).

[23] 439 Phil 309 (2002).

[24] Sec. 12. Non-interference in disposal of wages. No employer shall limit or otherwise interfere with
the freedom of any employee to dispose of his wages and no employer shall in any manner oblige any of
his employees to patronize any store or avail of the services offered by any person.

[25] Sec. 13. Wage deduction. Deductions from the wages of the employees may be made by the
employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums
advanced by the employer in behalf of the employee as well as union dues where the right to check-off
has been recognized by the employer or authorized in writing by the individual employee himself;
(b) When the deductions are with the written authorization of the employees for payment to a third
person and the employer agrees to do so, provided that the latter does not receive any pecuniary
benefit, directly or indirectly, from the transaction.

[26] Sec. 14. Deductions for loss or damages. Where the employer is engaged in a trade, occupation or
business where the practice of making deductions or requiring deposits is recognized, to answer for the
reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the
employee, the employer may make wage deductions or require the employees to make deposits from
which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or damage;

(b) That the employee is given reasonable opportunity to show cause why deduction should not be
made;

(c) That the amount of such deductions is fair and reasonable and shall not exceed the actual loss or
damage; and

(d) That the deduction from the wages of the employee does not exceed 20% of the employee's wages in
a week.

[27] Rollo, pp. 210-220.

[28] Id. at 194.

[29] Supra note 22.

[30] Supra note 23.

[31] 520 Phil 135, 146 (2006).

[32] Supra note 26.

[33] G.R. No. 183572, April 13, 2010, 618 SCRA 218, citing Montoya v. Transmed Manila Corporation,
G.R. No. 183329, August 27, 2009, 596 SCRA 334, 343.

[34] Id. at 233.

[35] AMA Computer College-East Rizal, et al. v. Allan Raymond Ignacio, G.R. No. 178520, June 23, 2009,
590 SCRA 633, 651.

[36] Supra note 33, citing Protacio v. Laya Mananghaya & Co., G.R. No. 168654, March 25, 2009, 582
SCRA 417, 427.

[37] Id. at 232.

[38] Rollo, p. 134.

[39] G.R. No. 175201, April 23, 2008, 552 SCRA 589, citing Montemayor v. Bundalian, 453 Phil 158, 167
(2003).

[40] Id. at 598.

[41] Supra note 18.

[42] Odilon Martinez v. B&B Fish Broker, G.R. No. 179985, September 18, 2009, 600 SCRA 691.
[43] Fe La Rosa, et al. v. Ambassador Hotel, G.R. No. 177059, March 13, 2009, 581 SCRA 340, 346-347.

[44] Dentech Manufacturing