[1] G.R. No.

220605, September 21, 2016

COCA-COLA FEMSA PHILIPPINES, INC., * Petitioner, v. BACOLOD

SALES FORCE UNION-CONGRESS OF INDEPENDENT ORGANIZATION-
ALU, Respondent.

Labor Law; Arbitration; In the context of labor law, arbitration is the

reference of a labor dispute to an impartial third person for determination on the
basis of evidence and arguments presented by such parties who have bound
themselves to accept the decision of the arbitrator as final and binding.—In the
context of labor law, arbitration is the reference of a labor dispute to an impartial
third person for determination on the basis of evidence and arguments presented by
such parties who have bound themselves to accept the decision of the arbitrator as
final and binding. However, in view of the nature of their functions, voluntary
arbitrators act in a quasi-judicial capacity; hence, their judgments or final orders
which are declared final by law are not so exempt from judicial review when so
warranted. “Any agreement stipulating that ‘the decision of the arbitrator shall
be final and unappealable’ and ‘that no further judicial recourse if either party
disagrees with the whole or any part of the arbitrator’s award may be availed
of’ cannot be held to preclude in proper cases the power of judicial review
which is inherent in courts.”

Remedial Law; Civil Procedure; Appeals; Petition for Review; Voluntary

Arbitrators; Case law holds that the proper remedy to reverse or modify a Voluntary
Arbitrators’ (VA’s) or a Panel of Voluntary Arbitrators’ decision or award is to
appeal the award or decision before the Court of Appeals (CA) under Rule 43 of the
Rules on questions of fact, of law, mixed questions of fact and law, or a mistake of
judgment.—Case law holds that the proper remedy to reverse or modify a Voluntary
Arbitrators’ or a Panel of Voluntary Arbitrators’ decision or award is to appeal the
award or decision before the CA under Rule 43 of the Rules on questions of fact, of
law, mixed questions of fact and law, or a mistake of judgment. However, in several
cases, the Court allowed the filing of a petition for certiorari from the VA’s
judgment to the CA under Rule 65 of the same Rules, where the VA was averred to
have acted without or in excess of his jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction.

‫ﻫ‬Labor Laws- Assignment No. 2

Page 1 of 35
 DECISION
PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari1 assailing the
Decision2 dated December 22, 2014 and the Resolution3 dated September 8,
2015 of the Court of Appeals (CA) in CA-G.R. CEB-SP. No. 06892, which
denied petitioner Coca-Cola Femsa Philippines, Inc.'s (petitioner) petition for
review and upheld the Decision 4 dated February 3, 2012 of the Panel of
Voluntary Arbitrators (VA) of the National Conciliation and Mediation Board
(NCMB)-Department of Labor and Employment in Case Nos. AC-777-RB6-
06-01-10-2011, AC-782-RB6-06-01-10-2011, and AC-960-RB6-06-01-10-
2011 on the ground that the same had already attained finality.
The Facts
Petitioner is a corporation engaged in the manufacture of nonalcoholic
beverages. Sometime in 2001, Cosmos Bottling Corporation (Cosmos) ceded
its sales functions to petitioner which resulted in the integration of a number
of Cosmos's salesmen, including Fernando T. Oquiana, Norman F. Vinarta,
and Santiago B. Espino, Jr. (Cosmos integrees) into petitioner's workforce as
route salesmen. The Cosmos integrees were given salary adjustments that
would align with that of petitioner's own route salesmen. At the time of
integration, petitioner's system of product distribution was by direct selling,
but it subsequently adopted the route-to-market (RTM) system of distribution
which led to the abolition of the route salesman position and its replacement
by the account developer (AD) position. Thus, through an internal selection
process, the Cosmos integrees' positions were eventually designated as
ADs.
Meanwhile, petitioner hired new ADs who were, however, subject to a
different set of qualifications from the Cosmos integrees. The newly-hired
ADs received a higher basic monthly pay although, allegedly, occupying the
same position, job description, and functions as that of the Cosmos
integrees. Furthermore, the newly-hired ADs were given, upon union
membership, a monthly 45-kilogram (kg.) rice provision with a corresponding
monthly deduction of the amount of P550.00 from their salaries. 6
Aggrieved by the difference in treatment, respondent Bacolod Sales Force
Union-Congress of Independent Organization-ALU, the recognized collective
bargaining agent of the rank-and-file sales personnel of petitioner's Bacolod
Plant7 (respondent), submitted its concerns to the grievance machinery in
accordance with the Collective Bargaining Agreement (CBA), demanding,
among others, that: (a) the salary rates of the Cosmos integrees be
readjusted to equal to that of the newly-hired ADs' salary rates; 8 (b) the
‫ﻫ‬Labor Laws- Assignment No. 2
conversion of the P550.00 monthly deduction from the salaries of the
Bacolod Plant sales personnel into a 45-kg. rice provision be declared as a
violation of the non-diminution rule under Article 100 9 of the Labor Code, as
amended; and (c) the employees concerned be reimbursed for the amounts
illegally deducted.
After the grievance process failed, the parties agreed to submit the
unresolved matters to voluntary arbitration pursuant to Article 5 of the CBA,
and filed a preventive mediation case before the NCMB raising the aforesaid
issues.1
Respondent claimed that the Cosmos integrees were being discriminated
against the newly-hired ADs, in light of the disparity between their
salaries12 and reiterated that the monthly P550.00 deduction from the basic
salaries of the new union members constitutes a violation of the non
diminution rule.13
For its part, petitioner maintained that the fixing of hiring rates is a
management prerogative, adding that the Cosmos integrees and the newly
hired ADs were not similarly situated due to the apparent variance in the
manner by which they were appointed and hired, as well as their
qualifications, skills, and responsibilities for the position. 14 Further, it claimed
that the Cosmos integrees failed to meet all the basic qualifications for the
AD position, such as age and educational attainrnent. 15 For another, it
contended that the rice subsidy of P550.00 per month to non-union members
was automatically converted into an actual 45-kg. sack of rice upon union
membership, which is, in reality, valued more than the amount of said
subsidy and, thus, was not tantamount to any diminution of benefits.
The VA's Ruling
In a Decision17 dated February 3, 2012 (VA Decision), the VA: (a) declared
that the disparity in the wages of the Cosmos integrees and the newly-hired
ADs was discriminatory for lack of substantial basis or valid criteria; (b)
directed petitioner to realign or readjust the Cosmos integrees' basic salaries
at par with that of the newly-hired ADs; (c) declared that the P550.00
deduction from the union members' basic salary in lieu of one (1) 45-kg. sack
of rice every month was a violation of Article X 18 of the CBA and Article 100
of the Labor Code, as amended; and (d) directed petitioner to comply with
Article X of the CBA by giving rice ration free of charge, and to cease and
desist from deducting P550.00 from the monthly salaries of the concerned
employees, effective February 2012.
The VA held that the lower salary rate given to the Cosmos integrees smacks
of discrimination given that they hold the same position, perform the same
Page 2 of 35
work, share the same functions, and have the same job description as that of
the newly-hired ADs. Thus, under the principle of "equal pay for equal work,"
the Cosmos integrees' failure to meet the new set of qualifications for ADs in
view of their "over-age and lack of educational attainment" did not justify their
lower salary rates.20 Moreover, the P550.00 deduction from a union
member's monthly salary and its conversion into a 45-kg. sack of rice ration
constituted: (a) non-compliance with Article X of the CBA, which clearly
provides that the grant of rice ration to employees shall be free of charge;
and (b) a violation of the non-diminution rule under Article 100 of the Labor
Code, as amended, because the said benefit has become part of the
employment contract.21
Petitioner moved for reconsideration, 22 which was denied in a final by law are not so exempt from judicial review when so
Resolution23 dated April 25, 2012 (VA Resolution).
The CA Proceedings
Petitioner received notice of the VA Resolution on May 21, 2012, 24 and filed
its petition for review25cralawred under Rule 43 of the Rules of Court (Rules)
before the CA on June 5, 2012. 26
Respondent countered,27 among others, that the VA Decision had become
final and executory after ten (10) calendar days from receipt thereof pursuant
to Article 262-A28 of the Labor Code, as amended; hence, the CA petition
must, perforce, fail.29
Subsequently, a writ of execution 30 dated July 26, 2013 was issued by the VA
and served upon petitioner. Thereafter, petitioner: (a) aligned the salaries of
the Cosmos integrees with the newly-hired ADs; (b) paid the corresponding
wage differentials; (c) refunded the amounts deducted from the union
members' salaries; and (d) stopped the P550.00 monthly deductions from
their salaries.31
In a Decision32 dated December 22, 2014, the CA denied the petition on the
ground that the VA Decision had attained finality pursuant to Section
5,33 Article 5 of the CBA, which explicitly provides that "[t]he decision of the
Arbitration Committee shall be final and binding upon the COMPANY and the
UNION, and the employees and may be enforced in any court of competent
jurisdiction."
Petitioner filed its motion for reconsideration, 35 which was, however, denied in
a Resolution36 dated September 8, 2015; hence, this petition.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not the CA
‫ﻫ‬Labor Laws- Assignment No. 2
correctly held that the VA Decision can no longer be the subject of its review
for having attained finality pursuant to the express provision under Section 5,
Article 5 of the CBA.
The Court's Ruling
In the context of labor law, arbitration is the reference of a labor dispute to an
impartial third person for determination on the basis of evidence and
arguments presented by such parties who have bound themselves to accept
the decision of the arbitrator as final and binding. 37 However, in view of the
nature of their functions, voluntary arbitrators act in a quasi-judicial
capacity;38hence, their judgments or final orders which are declared
warranted.39 "Any agreement stipulating that 'the decision of the
arbitrator shall be final and unappealable' and 'that no further judicial
recourse if either party disagrees with the whole or any part of the
arbitrator's award may be availed of' cannot be held to preclude in
proper cases the power of judicial review which is inherent in courts."
Case law holds that the proper remedy to reverse or modify a Voluntary
Arbitrator's or a Panel of Voluntary Arbitrators' decision or award is to appeal
the award or decision before the CA under Rule 43 of the Rules 41 on
questions of fact, of law, mixed questions of fact and law, 42 or a mistake of
judgment.43 However, in several cases, the Court allowed the filing of a
petition for certiorari from the VA's judgment to the CA under Rule 65 of the
same Rules,44 where the VA was averred to have acted without or in excess
of his jurisdiction or with grave abuse of discretion amounting to lack or
excess of jurisdiction.
In this case, petitioner availed of the correct mode of review of the VA
Decision by filing a petition for review with the CA under Rule 43 of the
Rules, and in conformity with prevailing jurisprudence. In said petition,
petitioner assailed the arbitral award, first, on the ground that "[t]he Panel
seriously erred in declaring [that] the disparity between the wages of [the]
Cosmos [i]ntegrees and [the] newly-hired [ADs] as discriminatory, and [in]
directing [petitioner] to [realign] or [readjust] the basic salary rate of the
Cosmos [i]ntegrees equivalent to that of the newly-hired [ADs]." 46 In this light,
petitioner pointed out that the Cosmos [i]ntegrees "were not hired by
[petitioner] for the AD Position because they met the qualifications therefor.
Rather they were appointed as such because they passed the internal
selection process which [petitioner] specifically applied to them" and, "[i]n
fact, x x x all three (3) Cosmos [i]ntegrees failed to meet all the basic
qualifications for the AD position, such as age and educational
attainment."47 On the other hand, the newly-hired ADs "were engaged on the
basis of the qualifications they presented to [petitioner] at the time they
Page 3 of 35
applied for the job," and ''were no longer required to undergo the same
selection process applied to the Cosmos [i]ntegrees inasmuch as they
already possessed, at the time of their application, the minimum
requirements for the job."48 Based on the differences in the selection
processes and qualifications, petitioner claimed that the "doctrine [of] 'equal
pay for equal work' x x x has no application in the present case." 49 Further, it
added that the measure of providing for higher salary rates was not done
arbitrarily and illegally to discriminate against the Cosmos [i]ntegrees.
Moreover, it claimed that "[b]eing an exercise of management prerogative,
[petitioner] may very well offer newly-hired ADs a more competitive
compensation scheme in order to attract more qualified candidates for the
position."50
In its petition before the Court, petitioner, citing certain cases on the
matter,51 restated the same position, postulating that "the unilateral adoption
[of] an upgraded salary scale that increased hiring rates of newly-hired
employees without increasing the salary rates of the old employees [should
be treated as] a valid exercise of business judgment prerogative, based on
the high productivity of that particular group and the need to increase the
company's hiring rate[;] otherwise[,] the employer's hands would be
completely tie[d], and [it would be] discourage[d] from adjusting the salary
rates for fear that it would result to x x x [the] demand [by] all employees, for
a similar increase, especially if the financial condition of the business cannot
address an across the board increase."
Code, as amended, and non-compliance with Article X of the CBA; 55 and (b)
as raised by respondent, whether or not the petition for review was filed out
of time.56 The materiality of these issues all the more reinforces the
conclusion that the CA should not have refused to exercise judicial review of
the assailed VA rulings, notwithstanding the CBA stipulation that the decision
of the Arbitration Committee, i.e., the VA, shall be final and binding upon the
parties. In fine, a remand to the CA for the prompt resolution of all these
issues, including any other ancillary issues which the parties may have raised
before it, is, therefore, in order. Verily, courts "should not shirk from
exercising their power to review, where under applicable laws and
jurisprudence, such power may be rightfully exercised," 57 as in this case.
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated
December 22, 2014 and the Resolution dated September 8, 2015 of the
Court of Appeals (CA) in CA-G.R. CEB-SP. No. 06892 are hereby SET
ASIDE. The case is REMANDED to the CA for the prompt resolution of the
aforementioned issues, including any other ancillary issues which the parties
may have raised before it.
SO ORDERED.

The Court sees the prima facie reasonableness of petitioner's asseverations

and finds that the merits of its case, based on such argumentation, properly
warrant judicial review. As such, the CA should look into the soundness of
the VA rulings in relation to the nuances averred, particularly, the impact of
the differences in the selection processes applied and relevant qualifications
between the Cosmos integrees and the newly-hired ADs. Moreover, the CA
ought to determine the proper application of the "equal pay for equal work"
principle vis-a-vis the business decision of an employer to adopt a more
competitive compensation scheme in light of the demands in human
resource. Thus, borrowing the language in Chung Fu Industries (Phils.) Inc.
v. CA53 - which similarly involved a restrictive stipulation on appeal from an
arbitral award the Court fmds that the CA erred in refusing "to look into the
merits of [this] case, despite [a] prima facie showing of the existence of
grounds warranting judicial review," which, thus, "effectively deprived
petitione[r] of [the] opportunity to prove or substantiate [its] allegations."

In fact, aside from the above stated-issue, the following separate issues were
left untouched by the CA: (a) as raised by petitioner, whether or not the
conversion of the monthly P550.00 rice subsidy into one (1) 45-kg. sack of
rice upon union membership constitutes a violation of Article 100 of the Labor

‫ﻫ‬Labor Laws- Assignment No. 2

Page 4 of 35
[2] G.R. No. 207156
TURKS SHAWARMA COMPANY/GEM ZEÑAROSA, Petitioners, vs.
FELICIANO Z. PAJARON and LARRY A. CARBONILLA, Respondents.
Remedial Law; Civil Procedure; Appeals; The Supreme Court (SC) has time
and again held that “[t]he right to appeal is neither a natural right nor is it a
component of due process. It is a mere statutory privilege, and may be exercised
only in the manner and in accordance with the provisions of the law.”—The Court
has time and again held that “[t]he right to appeal is neither a natural right nor is it a
component of due process. It is a mere statutory privilege, and may be exercised only
in the manner and in accordance with the provisions of the law.” “The party who
seeks to avail of the same must comply with the requirements of the rules. Failing to
do so the right to appeal is lost.”
Same; Same; Same; Appeal Bonds; The posting of cash or surety bond is
mandatory and jurisdictional; failure to comply with this requirement renders the
decision of the Labor Arbiter (LA) final and executory.—“It is clear from both the
Labor Code and the NLRC Rules of Procedure that there is legislative and
administrative intent to strictly apply the appeal bond requirement, and the Court
should give utmost regard to this intention.” The posting of cash or surety bond is
therefore mandatory and jurisdictional; failure to comply with this requirement
renders the decision of the Labor Arbiter final and executory. This indispensable
requisite for the perfection of an appeal “is to assure the workers that if they finally
prevail in the case[,] the monetary award will be given to them upon the dismissal of
the employer’s appeal [and] is further meant to discourage employers from using the
appeal to delay or evade payment of their obligations to the employees.” However,
the Court, in special and justified circumstances, has relaxed the requirement of
posting a supersedeas bond for the perfection of an appeal on technical
considerations to give way to equity and justice. Thus, under Section 6 of Rule VI of
the 2005 NLRC Revised Rules of Procedure, the reduction of the appeal bond is
allowed, subject to the following conditions: (1) the motion to reduce the bond shall
be based on meritorious grounds; and (2) a reasonable amount in relation to the
monetary award is posted by the appellant. Compliance with these two conditions
will stop the running of the period to perfect an appeal.
there is indeed meritorious ground and that the amount of the bond posted is
reasonable, then the appeal is perfected. If the NLRC denies the motion, the
appellant may still file a motion for reconsideration as provided under Section 15,
Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules
that there is indeed meritorious ground and that the amount of the bond posted is
reasonable, then the appeal is perfected. If the NLRC denies the motion, then the
decision of the Labor Arbiter becomes final and executory.
Labor Law; Termination of Employment; Burden of Proof; In termination
cases, the burden of proof rests on the employer to show that the dismissal is for a
just cause.—Petitioners’ case will still fail on its merits even if we are to allow their
appeal to be given due course. After scrupulously examining the contrasting
positions and arguments of the parties, we find that the Labor Arbiter’s Decision
declaring Pajaron and Carbonilla illegally dismissed was supported by substantial
evidence. While petitioners vehemently argue that Pajaron and Carbonilla abandoned
their work, the records are devoid of evidence to show that there was intent on their
part to forego their employment. In fact, petitioners adamantly admitted that they
refused to rehire Pajaron and Carbonilla despite persistent requests to admit them to
work. Hence, petitioners essentially admitted the fact of dismissal. However, except
for their empty and general allegations that the dismissal was for just causes,
petitioners did not proffer any evidence to support their claim of misconduct or
misbehavior on the part of Pajaron and Carbonilla. “In termination cases, the burden
of proof rests on the employer to show that the dismissal is for a just cause.” For lack
of any clear, valid, and just cause in terminating Pajaron and Carbonilla’s
employment, petitioners are indubitably guilty of illegal dismissal.
DECISION
DEL CASTILLO, J.:

Same; Same; Same; Same; The reduction of the bond is not a matter of right
on the part of the movant [but] lies within the sound discretion of the National Labor
Relations Commission (NLRC).—The NLRC exercises full discretion in resolving a
motion for the reduction of bond in accordance with the standards of meritorious
grounds and reasonable amount. The “reduction of the bond is not a matter of right
on the part of the movant [but] lies within the sound discretion of the NLRC x x x.”
In order to give full effect to the provisions on motion to reduce bond, the appellant
must be allowed to wait for the ruling of the NLRC on the motion even beyond the
10-day period to perfect an appeal. If the NLRC grants the motion and rules that
‫ﻫ‬Labor Laws- Assignment No. 2
Page 5 of 35
The liberal interpretation of the rules applies only to justifiable causes and
meritorious circumstances.
By this Petition for Review on Certiorari,  1 petitioner Turks Shawarma
Company and its owner, petitioner Gem Zeñarosa (Zeñarosa), assail the May
8, 2013 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 121956,
which affirmed the Orders dated March 18, 2011 3 and September 29,
20114 of the National Labor Relations Commission (NLRC) dismissing their
appeal on the ground of non-perfection for failure to post the required bond.
Factual Antecedents
Petitioners hired Feliciano Z. Pajaron (Pajaron) in May 2007 as service crew
and Larry A. Carbonilla (Carbonilla) in April 2007 as head crew. On April 15,
2010, Pajaron and Carbonilla filed their respective Complaints 5 for
constructive and actual illegal dismissal, non-payment of overtime pay,
holiday pay, holiday premium, rest day premium, service incentive leave pay
and 13th month pay against petitioners. Both Complaints were consolidated.
Pajaron alleged that on April 9, 2010, Zeñarosa asked him to sign a piece of
paper6 stating that he was receiving the correct amount of wages and that he
had no claims whatsoever from petitioners. Disagreeing to the truthfulness of
the statements, Pajaron refused to sign the paper prompting Zeñarosa to fire
him from work. Carbonilla, on the other hand, alleged that sometime in June
2008, he had an altercation with his supervisor Conchita Marcillana
(Marcillana) while at work. When the incident was brought to the attention of
Zeñarosa, he was immediately dismissed from service. He was also asked
by Zeñarosa to sign a piece of paper acknowledging his debt amounting to
₱7,000.00.
Both Pajaron and Carbonilla claimed that there was no just or authorized
cause for their dismissal and that petitioners also failed to comply with the
requirements of due process. As such, they prayed for separation pay in lieu
of reinstatement due to strained relations with petitioners and backwages as
well as nominal, moral and exemplary damages. Petitioners also claimed for
nonpayment of just wages, overtime pay, holiday pay, holiday premium,
service incentive leave pay and 13th month pay.
Petitioners denied having dismissed Pajaron and Carbonilla; they averred
that they actually abandoned their work. They alleged that Pajaron would
habitually absent himself from work for an unreasonable length of time
without notice; and while they rehired him several times whenever he
returned, they refused to rehire him this time after he abandoned work in
April 2009. As for Carbonilla, he was reprimanded and admonished several
‫ﻫ‬Labor Laws- Assignment No. 2
times for misbehavior and disobedience of lawful orders and was advised
that he could freely leave his work if he could not follow instructions.
Unfortunately, he left his work without any reason and without settling his
unpaid obligation in the amount of ₱78,900.00, which compelled them to file
a criminal case7 for estafa against him. In addition, criminal complaints 8 for
slander were filed against both Pajaron and Carbonilla for uttering
defamatory words that allegedly compromised Zeñarosa's reputation as a
businessman. Petitioners, thus, insisted that their refusal to rehire Pajaron
and Carbonilla was for valid causes and did not amount to dismissal from
employment. Finally, petitioners claimed that Pajaron and Carbonilla failed to
substantiate their claims that they were not paid labor standards benefits.
Proceedings before the Labor Arbiter
In a Decision9 dated December 10, 2010, the Labor Arbiter found credible
Pajaron and Carbonilla's version and held them constructively and illegally
dismissed by petitioners. The Labor Arbiter found it suspicious for petitioners
to file criminal cases against Pajaron and Carbonilla only after the complaints
for illegal dismissal had been filed. Pajaron and Carbonilla were thus
awarded the sum of ₱148,753.61 and ₱49,182.66, respectively, representing
backwages, separation pay in lieu of reinstatement, holiday pay, service
incentive leave pay and 13 th month pay. The dispositive portion of the Labor
Arbiter's Decision reads:
WHEREFORE, in light of the foregoing, judgment is hereby rendered
declaring respondent TURKS SHAWARMA COMPANY, [liable] to pay
complainants as follows:
I. FELICIANO Z. P AJARON, JR.
1. Limited backwages computed from April 9, 2010 up to the date of this
Decision, in the amount of SIXTY EIGHT THOUSAND NINE HUNDRED
NINETY EIGHT PESOS & 74/100 (Php68,998. 74)
2. Separation pay, in lieu of reinstatement equivalent to one month's salary
for every year of service computed from May 1, 2007 up to the date of this
decision, in the amount of THIRTY ONE THOUS[A]ND FIVE HUNDRED
TWELVE PESOS (Php3 l,5l2.00);
3. Holiday pay, in the amount of TWELVE THOUSAND SIX HUNDRED
EIGHTY ONE PESOS (Php12,681.00);
4. Service incentive leave pay, in the amount of FIVE THOUSAND FOUR
HUNDRED THREE PESOS & 46/100 (Php5,403.46);
Page 6 of 35
5. Thirteenth month pay, in the amount of THIRTY THOUSAND ONE
HUNDRED FIFTY EIGHT PESOS & 41/100 (Php30,158.41).
II. LARRY A CARBONILLA
1. Separation pay, in lieu of reinstatement equivalent to one month's salary'
for every year of service computed from April 1, 2007 up to the date of this
decision, in the amount of FORTY TWO THOUSAND AND SIXTEEN PESOS
(Php42,016.00);
2. Holiday pay in the amount of TWO THOUSAND PESOS (Php2,000.00);
3. Service incentive leave pay, in the amount of EIGHT HUNDRED THIR1Y
THREE PESOS & 33/100 (Php833.33); and
4. Thirteenth month pay, in the amount of FOUR THOUSAND THREE
HUNDRED THIRTY THREE PESOS & 33/100 (Php4,333.33).
Other claims herein sought and prayed for are hereby denied for lack of legal
and factual bases.
SO ORDERED.10
Proceedings before the National Labor Relations Commission
Due to alleged non-availability of counsel, Zeñarosa himself filed a Notice of
Appeal with Memorandum and Motion to Reduce Bond 11 with the NLRC.
Along with this, Zeñarosa posted a partial cash bond in the amount of
₱15,000.00,12 maintaining that he cannot afford to post the full amount of the
award since he is a mere backyard micro-entrepreneur. He begged the
NLRC to reduce the bond.
The NLRC, in an Order13 dated March 18, 2011, denied the motion to reduce
bond. It ruled that financial difficulties may not be invoked as a valid ground
to reduce bond; at any rate, it was not even substantiated by proof.
Moreover, the partial bond in the amount of ₱15,000.00 is not reasonable in
relation to the award which totalled to ₱197,936.27. Petitioners' appeal was
thus dismissed by the NLRC for non-perfection.
On April 7, 2011, petitioners, through a new counsel, filed a Motion for
Reconsideration (with plea to give due course to the appeal) 14 averring that
the outright dismissal of their appeal was harsh and oppressive considering
that they had substantially complied with the Rules through the posting of a
partial bond and their willingness to post additional bond if necessary.
‫ﻫ‬Labor Laws- Assignment No. 2
Moreover, their motion to reduce bond was meritorious since payment of the
full amount of the award will greatly affect the company's operations; besides
the appeal was filed by Zeñarosa without the assistance of a counsel.
Petitioners thus implored for a more liberal application of the Rules and
prayed that their appeal be given due course. Along with this motion for
reconsideration, petitioners tendered the sum of ₱207,435.53 representing
the deficiency of the appeal bond.15
In an Order16 dated September 29, 2011, the NLRC denied the Motion for
Reconsideration, reiterating that the grounds for the reduction of the appeal
bond are not meritorious and that the partial bond posted is not reasonable.
The NLRC further held that the posting of the remaining balance on April 7,
2011 or three months and eight days from receipt of the Labor Arbiter's
Decision on December 30, 2010 cannot be allowed, otherwise, it will be
tantamount to extending the period to appeal which is limited only to 10 days
from receipt of the assailed Decision.
Proceedings before the Court of Appeals
Petitioners filed a Petition for Certiorari with application for Writ of Preliminary
Injunction and Temporary Restraining Order 17 with the CA. They insisted that
the NLRC gravely abused its discretion in dismissing the appeal for failure to
post the required appeal bond.
On May 8, 2013, the CA rendered a Decision 18 dismissing the Petition
for Certiorari. It held that the NLRC did not commit any grave abuse of
discretion in dismissing petitioners' appeal for non-perfection because
petitioners failed to comply with the requisites in filing a motion to reduce
bond, namely, the presence of a meritorious ground and the posting of a
reasonable amount of bond. The CA stated that financial difficulties is not
enough justification to dispense with the mandatory posting of a bond
inasmuch as there is an option of posting a surety bond from a reputable
bonding company duly accredited by the NLRC, which, unfortunately,
petitioners failed to do. The CA noted that the lack of assistance of a counsel
is not an excuse because petitioners ought to know the Rules in filing an
appeal; moreover, ignorance of the law does not excuse them from
compliance therewith.
Hence, this present Petition.
Issue
Petitioners insist that the CA erred in affirming the NLRC's dismissal of their
appeal for the following reasons: first, there was substantial compliance with
the Rules on perfection of appeal; second, the surrounding facts and
Page 7 of 35
circumstances constitute meritorious grounds to reduce the appeal bond;
third, they exhibited willingness and good faith by posting a partial bond
during the reglementary period; and lastly, a liberal interpretation of the
requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits. Petitioners claim that there is a necessity to
resolve the merits of their appeal since the Labor Arbiter's Decision declaring
Pajaron and Carbonilla illegally terminated from employment was not based
on substantial evidence.
Our Ruling
The Petition has no merit.
The Court has time and again held that "[t]he right to appeal is neither a
natural right nor is it a component of due process. It is a mere statutory
privilege, and may be exercised only in the manner and in accordance with
the provisions of the law."19 "The party who seeks to avail of the same must
comply with the requirements of the rules. Failing to do so, the right to appeal
is lost."20
Article 223 of the Labor Code, which sets forth the rules on appeal from the
Labor Arbiter's monetary award, provides:
ART. 223. Appeal. --- Decisions, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards,
or orders. Such appeal may be entertained only on any off the following
grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the finding of facts are raised which would cause grave
or irreparable damage or injury to the appellant.1âwphi1
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
‫ﻫ‬Labor Laws- Assignment No. 2
Commission in the amount equivalent to the monetary award in the
judgment appealed from.
x x x x. (Emphasis supplied)
Meanwhile, Sections 4 and 6 of Rule VI of the 2005 Revised Rules of
Procedure of the NLRC, which were in effect when petitioners filed their
appeal, provide:
Section 4. Requisites for perfection of appeal. - (a) The Appeal shall be: 1)
filed within the reglementary period as provided in Section 1 of this Rule; 2)
verified by the appellant himself in accordance with Section 4, Rule 7 of the
Rules of Court, as amended; 3) in the form of a memorandum of appeal
which shall state the grounds relied upon and the arguments in support
thereof: the relief prayed for, and with a statement of the date the appellant
received the appealed decision, resolution or order; 4) in three (3) legibly
typewritten or printed copies; and 5) accompanied by i) proof of payment of
the required appeal fee; ii) posting of a cash or surety bond as provided in
Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv) proof of
service upon the other parties.
b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an appeal.
xxxx
Section 6. Bond. - - - In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award,
exclusive of damages and attorney's fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious
grounds, and upon the posting of a bond in a reasonable amount. The mere
filing of a motion to reduce bond without complying with the requisites in the
preceding paragraphs shall not stop the running of the period to perfect an
appeal.
"It is clear from both the Labor Code and the NLRC Rules of Procedure that
there is legislative and administrative intent to strictly apply the appeal bond
requirement, and the Court should give utmost regard to this intention." 21 The
posting of cash or surety bond is therefore mandatory and jurisdictional;
failure to comply with this requirement renders the decision of the Labor
Page 8 of 35
Arbiter final and executory.22 This indispensable requisite for the perfection of
an appeal ''is to assure the workers that if they finally prevail in the case[,] the
monetary award will be given to them upon the dismissal of the employer's
appeal [and] is further meant to discourage employers from using the appeal
to delay or evade payment of their obligations to the employees." 23
However, the Court, in special and justified circumstances, has relaxed the
requirement of posting a supersedeas bond for the perfection of an appeal on
technical considerations to give way to equity and justice. 24 Thus, under
Section 6 of Rule VI of the 2005 NLRC Revised Rules of Procedure, the
reduction of the appeal bond is allowed, subject to the following conditions:
(1) the motion to reduce the bond shall be based on meritorious grounds; and
(2) a reasonable amount in relation to the monetary award is posted by the
appellant. Compliance with these two conditions will stop the running of the
period to perfect an appeal.
In the case at bar, petitioners filed a Motion to Reduce Bond together with
their Notice of Appeal and posted a cash bond of ₱15,000.00 within the 10-
day reglementary period to appeal. The CA correctly found that the NLRC did
not commit grave abuse of discretion in denying petitioners’ motion to reduce
bond as such motion was not predicated on meritorious and reasonable
grounds and the amount tendered is not reasonable in relation to the award.
The NLRC correctly held that the supposed ground cited in the motion is not
well-taken for there was no evidence to prove Zeñarosa's claim that the
payment of the full amount of the award would greatly affect his business due
to financial setbacks. Besides, "the law does not require outright payment of
the total monetary award; [the appellant has the option to post either a cash
or surety bond. In the latter case, appellant must pay only a] moderate and
reasonable sum for the premium to ensure that the award will be eventually
paid should the appeal fail." 25 Moreover, the absence of counsel is not a valid
excuse for non-compliance with the rules. As aptly observed by the CA,
Zeñarosa cannot feign ignorance of the law considering that he was able to
post a partial bond and ask for a reduction of the appeal bond. At any rate,
petitioners did not advance any reason for the alleged absence of counsel
except that they were simply abandoned. Neither did petitioners explain why
they failed to procure a new counsel to properly assist them in filing the
appeal. Moreover, the partial bond posted was not reasonable. In the case
of McBurnie v. Ganzon,  26 the Court has set a provisional percentage of 10%
of the monetary award (exclusive of damages and attorney's fees) as
reasonable amount of bond that an appellant should post pending resolution
by the NLRC of a motion for a bond's reduction. Only after the posting of this
required percentage shall an appellant's period to perfect an appeal be
suspended. Applying this parameter, the ₱15,000.00 partial bond posted by
petitioners is not considered reasonable in relation to the total monetary
award of ₱197,936.27.
‫ﻫ‬Labor Laws- Assignment No. 2
Petitioners, nevertheless, rely on a number of cases wherein the Court
allowed the relaxation of the stringent requirement of the rule. In Nicol v.
Footjoy Industrial Corporation,  27 the Court reversed the NLRC's denial of the
appellant's motion to reduce bond upon finding adequate evidence to justify
the reduction. In Rada v. National Labor Relations
Commission28and Blancaflor v. National Labor Relations Commission,  29 the
NLRC allowed the late payment of the bond because the appealed Decision
of the Labor Arbiter did not state the exact amount to be awarded, hence
there could be no basis for determining the amount of the bond to be filed. It
was only after the amount of superseades bond was specified by the NLRC
that the appellants filed the bond. In YBL (Your Bus Line) v. National Labor
Relations Commission,  30 the Court was propelled to relax the requirements
relating to appeal bonds as there were valid issues raised in the appeal.
In Dr. Postigo v. Philippine Tuberculosis Society, Inc.,  31the respondent
therein deferred the posting of the bond and instead filed a motion to reduce
bond on the ground that the Labor Arbiter's computation of the award is
erroneous which circumstance justified the relaxation of the appeal bond
requirement. In all of these cases, though, there were meritorious grounds
that warranted the reduction of the appeal bond, which, as discussed, is
lacking in the case at bench.
Petitioners, furthermore, claim that the NLRC's outright dismissal of their
appeal was harsh and oppressive since they should still be given opportunity
to complete the required bond upon the filing of their motion for
reconsideration. Thus, they insist that their immediate posting of the
deficiency when they filed a motion for reconsideration constituted substantial
compliance with the Rules.
The contention is untenable.
The NLRC exercises full discretion in resolving a motion for the reduction of
bond32 in accordance with the standards of meritorious grounds and
reasonable amount. The "reduction of the bond is not a matter of right on the
part of the movant [but] lies within the sound discretion of the NLRC x x x." 33
In order to give full effect to the provisions on motion to reduce bond, the
appellant must be allowed to wait for the ruling of the NLRC on the motion
even beyond the 10-day period to perfect an appeal. If the NLRC grants the
motion and rules that there is indeed meritorious ground and that the amount
of the bond posted is reasonable, then the appeal is perfected. If the NLRC
denies the motion, the appellant may still file a motion for reconsideration as
provided under Section 15, Rule VII of the Rules. If the NLRC grants the
motion for reconsideration and rules that there is indeed meritorious ground
and that the amount of the bond posted is reasonable, then the appeal is
perfected. If the NLRC denies the motion, then the decision of the Labor
Arbiter becomes final and executory.34
Page 9 of 35
The rulings in Garcia v. KJ Commercial35and Mendoza v. HMS Credit substantial justice, it must be emphasized that procedural rules should not
Corporation36cannot dissuade this Court from relaxing the rules. likewise he belittled or dismissed simply because their non-observance might
In Garcia,  the NLRC initially denied the appeal of respondent therein due to result in prejudice to a party's substantial rights. Like all rules, they are
the absence of meritorious grounds in its motion to reduce bond and required to be followed, except only for the most persuasive of reasons. 38
unreasonable amount of partial bond posted. However, upon the posting of
the full amount of bond when respondent filed its motion for reconsideration, WHEREFORE, the Petition is DENIED. The May 8, 2013 Decision of the
the NLRC granted the motion for reconsideration on the ground of substantial Court of Appeals in CA-G.R. SP No. 121956 is AFFIRMED.
compliance with the rules after considering the merits of the appeal.
Likewise, in Mendoza, the NLRC initially denied respondents' Motion to SO ORDERED.
Reduce Appeal Bond with a partial bond. Respondents thereafter promptly
complied with the NLRC's directive to post the differential amount between
the judgment award and the sum previously tendered by them. The Court
held that the appeal was filed timely on account of respondents' substantial
compliance with the requirements on appeal bond. In
both Garcia  and Mendoza, however, the NLRC took into consideration the
substantial merits of the appealed cases in giving due course to the appeals.
It, in fact, reversed the Labor Arbiters' rulings in both cases. In contrast,
petitioners in the case at bench have no meritorious appeal as would
convince this Court to liberally apply the rule.

Stated otherwise, petitioners' case will still fail on its merits even if we are to
allow their appeal to be given due course. After scrupulously examining the
contrasting positions and arguments of the parties, we find that the Labor
Arbiter's Decision declaring Pajaron and Carbonilla illegally dismissed was
supported by substantial evidence. While petitioners vehemently argue that
Pajaron and Carbonilla abandoned their work, the records are devoid of
evidence to show that there was intent on their part to forego their
employment. In fact, petitioners adamantly admitted that they refused to
rehire Pajaron and Carbonilla despite persistent requests to admit them to
work. Hence, petitioners essentially admitted the fact of dismissal. However,
except for their empty and general allegations that the dismissal was for just
causes, petitioners did not proffer any evidence to support their claim of
misconduct or misbehavior on the part of Pajaron and Carbonilla. "In
termination cases, the burden of proof rests on the employer to show that the
dismissal is for a just cause."37 For lack of any clear, valid, and just cause in
terminating Pajaron and Carbonilla's employment, petitioners are indubitably
guilty of illegal dismissal.

All told, we find no error on the part of the CA in ruling that the NLRC did not
gravely abused its discretion in dismissing petitioners' appeal for non-
perfection due to non-compliance with the requisites of filing a motion to
reduce bond.

[T]he merit of [petitioners'] case does not warrant the liberal application of the
x x x rules x x x. While it is true that litigation is not a game of technicalities
and that rules of procedure shall not be strictly enforced at the cost of
‫ﻫ‬Labor Laws- Assignment No. 2
Page 10 of 35
[3] G.R. No. 192369, November 09, 2016
MARIA VICTORIA TOLENTINO-PRIETO, Petitioner, v. ROBERT S.
ELVAS, Respondent.
Procedure; Appeals; The right to appeal is neither a natural right nor is it a
component of due process. It is a mere statutory privilege, and may be exercised
only in the manner and in accordance with the provisions of law.—The right to
appeal is neither a natural right nor is it a component of due process. It is a mere
statutory privilege, and may be exercised only in the manner and in accordance with
the provisions of law. Elvas calls for our compassion to overlook the one day delay
in the filing of his petition; however, we have ruled time and again that our kind
consideration is not for the undeserving. While it is within our power to relax the rule
on timeliness of appeals, the circumstances obtaining in this case do not warrant our
liberality.
Labor Law; Appeals; Article 229 of the Labor Code mandates that appeals
from the judgment of the Labor Arbiter (LA) which involve a monetary award may
be perfected only upon posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the National Labor Relations Commission
(NLRC) in the amount equivalent to the monetary award in the judgment appealed
from.—Article 229 of the Labor Code mandates that appeals from the judgment of
the LA which involve a monetary award may be perfected only upon posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the
NLRC in the amount equivalent to the monetary award in the judgment appealed
from.
Same; Same; Appeal Bonds; In a judgment involving a monetary award, the
appeal shall be perfected only upon (1) proof of payment of the required appeal fee;
(2) posting of a cash or surety bond issued by a reputable bonding company; and (3)
filing of a memorandum of appeal.—These statutory and regulatory provisions
explicitly provide that an appeal from the LA to the NLRC must be perfected within
10 calendar days from receipt of such decisions, awards or orders of the LA. In a
judgment involving a monetary award, the appeal shall be perfected only upon (1)
proof of payment of the required appeal fee; (2) posting of a cash or surety bond
issued by a reputable bonding company; and (3) filing of a memorandum of appeal.
Same; Same; Same; While posting of an appeal bond is mandatory and
jurisdictional, the relaxation of the rule in certain meritorious cases is sanctioned.—
While posting of an appeal bond is mandatory and jurisdictional, we sanction the
relaxation of the rule in certain meritorious cases. These cases include instances in
which (1) there was substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired objective
of resolving controversies on the merits, or (4) the appellants, at the very least,
‫ﻫ‬Labor Laws- Assignment No. 2
exhibited their willingness and/or good faith by posting a partial bond during the
reglementary period.
Same; Article 227 of the same Code authorizes the National Labor Relations
Commission (NLRC) to use every and all reasonable means to ascertain the facts in
each case speedily and objectively, without regard to technicalities of law or
procedure.—Article 227 of the same Code authorizes the NLRC to “use every and
all reasonable means to ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure.” In the case before us, the
NLRC opined that it is in the best interest of justice that the appeal be allowed so that
the case could be resolved on its merits.
Same; Appeals; Appeal Bonds; In Manaban v. Sarphil Corporation/Apokon
Fruits, Inc., 455 SCRA 240 (2005), we affirmed the National Labor Relations
Commission’s (NLRC’s) decision to give due course to the appeal of the landowner-
employer, notwithstanding that the appeal was perfected beyond the ten (10)-day
reglementary period and the posting of the appeal bond was four (4) months delayed
on the basis of fundamental consideration of substantial justice.—In Manaban v.
Sarphil Corporation/Apokon Fruits, Inc., 455 SCRA 240 (2005), we affirmed the
NLRC’s decision to give due course to the appeal of the landowner-employer,
notwithstanding that the appeal was perfected beyond the 10-day reglementary
period and the posting of the appeal bond was four months delayed on the basis of
fundamental consideration of substantial justice.
Civil Procedure; Appeals; Our rules recognize the broad discretionary power
of an appellate court to waive the lack of proper assignment of errors and to
consider errors not assigned.—Our rules recognize the broad discretionary power of
an appellate court to waive the lack of proper assignment of errors and to consider
errors not assigned. The CA has ample authority to review errors not raised in the
following instances: (a) When the question affects jurisdiction over the subject
matter; (b) Matters that are evidently plain or clerical errors within contemplation of
law; (c) Matters whose consideration is necessary in arriving at a just decision and
complete resolution of the case or in serving the interests of justice or avoiding
dispensing piecemeal justice; (d) Matters raised in the trial court and are of record
having some bearing on the issue submitted that the parties failed to raise or that the
lower court ignored; (e) Matters closely related to an error assigned; and (f) Matters
upon which the determination of a question properly assigned is dependent.
DECISION
JARDELEZA, J.:
Page 11 of 35
These are consolidated petitions for review 1 assailing the July 21, 2009
Decision2 and May 17, 2010 Resolution3 of the Court of Appeals (CA) in CA-
G.R. SP No. 107070, which reversed the June 30, 2008 Decision 4 of the
National Labor Relations Commission (NLRC) in NLRC LAC No. 01-000089-
08. The CA found that Robert S. Elvas (Elvas) was illegally dismissed from
service, reinstating the November 13, 2007 Decision 5 of the Labor Arbiter
(LA) in NLRC NCR Case No. 00-09-07571-06.chanroblesvirtuallawlibrary
Facts
Innsbruck International Trading (Innsbruck), owned by Maria Victoria
Toletino-Prieto (Tolentino) [collectively, respondents], is engaged in the
sanitation and fumigation of garbage dump trucks. 6 The Municipal
Government of Rodriguez, Rizal, awarded it with the operation of the Wash
Bay Station, a government project that involves the fumigation or
decongestion of garbage dump trucks coming from all over Metro Manila, for
the purpose of reducing or eliminating the odor caused by the dumping of
garbage at the Rodriguez, Rizal landfill.7 Elvas was employed as a checker at
the Wash Bay Station. He records the number of dump trucks sanitized by
Innsbruck and collects P30.00 from each of the truck fumigated. 8 For a 12-
hour day's work, he receives a salary of P250.00. 9 Sometimes, he also
discharges the function of a cashier with a duty to collect payments from
other checkers and surrender them to the money collector. 10
Sometime in February 2006, Tolentino allegedly discovered, based on the
station logbook report and the report made by the Wash Bay Station
Municipal Supervisor, that there were discrepancies between the number of
dump trucks recorded and the amount of payment remitted by Elvas and the
other employees.11 Tolentino then sent a Letter-Memorandum dated May 25,
2006 to Elvas giving him 24 hours from receipt to explain why his
employment should not be terminated because of his involvement in the non-
remittance of collections.12 Elvas responded in a Letter dated May 29, 2006,
asserting that he cannot answer the allegation against him given the limited
period of time, and the fact that he was not furnished with the station logbook
and other related documents.13 He warned Tolentino that her accusation is a
form of coercion and an act constituting constructive dismissal. He asked her
to desist from pursuing acts which cause him anxiety and sleepless
nights.14 Thereafter, on September 11, 2006, he filed a Complaint for illegal
dismissal, underpayment of salaries, 13th month pay, Emergency Cost of
Living Allowance (ECOLA) and separation pay in lieu of reinstatement
against respondents before the NLRC.15
In his position paper, Elvas argued that the Letter-Memorandum was
Tolentino's way of forcing him to resign from work. 16 Tolentino's accusation
‫ﻫ‬Labor Laws- Assignment No. 2
was baseless since she never came up with specifics. She simply dismissed
him from work on May 30, 2006; then, instituted an unfounded criminal case
against him, which Tolentino later abandoned by not appearing in the
preliminary investigation.17 Elvas also alleged that Tolentino did not follow the
two-notice requirement when she terminated his employment. He denied that
he took flight and no longer reported for work after he was handed the Letter-
Memorandum. On the contrary, he was told not to report for work and he saw
for himself the employees who replaced him.18
Respondents countered that Elvas kept on evading the investigation
conducted by the former by absenting himself during the scheduled
investigation. During the confrontation with the other checkers, namely,
Edilberto Rabe (Rabe) and Leonardo Constantino (Constantino), they
admitted that they misappropriated the collection with Elvas. 19 The admission
prompted Tolentino to file criminal complaints of estafa against them. Despite
the pendency of the criminal action, Tolentino averred that she still gave
Elvas an opportunity to explain his side of the case through the Letter-
Memorandum. Hence, there was no violation of due process. More
importantly, Tolentino contended that Elvas was not illegally dismissed from
service as he himself abandoned his work.20
Labor Arbiter's Ruling
The LA ruled in favor of Elvas and declared that he was illegally terminated
from his employment. The LA noted that the admissions of Rabe and
Constantino cannot be used against Elvas because nowhere in their affidavit
did they state that the latter was an accomplice in their misappropriation.
Other than the daily remittance and summary of purchases, Tolentino failed
to adduce any evidence to support Elvas' participation in the
misappropriation. There was likewise no abandonment of work on the part of
Elvas because he had duly established that he continued working for
Tolentino despite the low pay and the dire state and condition of the Rizal
landfill.21 Rather, the LA found that the charge of abandonment does not
square with the recorded fact that Elvas was being accused of
misappropriation and was actually charged in court with estafa thereby
indicating his undesirability within the work premises and the pressure for him
to leave. It is more indicative of constructive dismissal rather than
abandonment of work.22 The LA then awarded Elvas with separation pay,
backwages, salary differential and 13th month pay totaling to P162,242.099.23
NLRC's Ruling
Respondents appealed to the NLRC. Elvas filed a Motion to Dismiss Appeal
and Issuance of Writ of Execution24 on the ground that the appeal bond
posted by respondents was take. He attached to the motion, a certification
Page 12 of 35
from Far Eastern Surety and Insurance Co., Inc. stating that the bond issued
in favor of the NLRC relative to Case No. 00-09-07571-06 is non-existent in
the bonds registry of the corporation.25 Elvas contended that since no valid
appeal bond was posted, the appeal was not perfected rendering the LA's
Decision final and executory. He, therefore, asked for the issuance of a writ
of execution. Upon discovering that the appeal bond was spurious,
respondents terminated the services of their counsel and posted a new bond
from Philippine Phoenix and Insurance, Inc.26
The NLRC decided to relax the rule on bond requirement, ruling that with the
posting of a second bond, the issue about the first bond should be put to rest
in the best interest of justice. 27 It found that respondents were without
knowledge of the falsity of the bond, as in fact, they immediately dismissed
their counsel upon learning of the fraud. 28
Meanwhile, disposing of the merits of the case, the NLRC reversed the ruling
of the LA and opined that it was Elvas who failed to establish his case for
illegal dismissal. No written notice of dismissal was presented to prove the
fact of termination of his employment. 29 Elvas also neither alleged nor proved
how his employment was terminated or who dismissed him from the
service.30
Elvas sought reconsideration but it was denied. 31 He elevated the case to the
CA with the sole issue of whether the NLRC committed grave abuse of
discretion amounting to excess of/lack of jurisdiction in giving due course to
respondents' appeal despite the overwhelming evidence that no appeal was
perfected in the absence of an appeal bond.32
CA's Ruling
In its Decision, the CA sustained the NLRC in allowing respondents' appeal
but as to the merits of the case, it reversed the latter and reinstated the LA's
Decision that Elvas was illegally dismissed.
On the procedural aspect, the CA explained that respondents substantially
complied with the bond requirement for perfecting an appeal when they
immediately submitted a genuine bond after learning that the first bond was
spurious. There was no showing that respondents purposely posted a false
surety bond.33 Therefore, to dismiss respondents' appeal would negate the
interest of justice and deviate from the Labor Code of the
Philippines'34 (Labor Code) mandate to liberally construe rules of procedure.
On the substantive aspect, although Elvas did not question the NLRC's ruling
on the issue of illegal dismissal, the CA deemed it appropriate to resolve the
merits of the case to afford complete relief to the parties and to arrive at a
just resolution of the case.35 The CA held that Elvas was unceremoniously
‫ﻫ‬Labor Laws- Assignment No. 2
dismissed from work when he was directed by respondents not to report for
work anymore. It gave credence to Elvas' claim that he kept coming back to
the work premises to continue his employment but there were already
workers who replaced him. This was neither denied nor refuted by
respondents who merely insisted that Elvas was guilty of
misappropriation.36 The CA agreed with the LA that respondents failed to
present witnesses or credible evidence to prove the charge against Elvas.
Both parties moved for reconsideration which were denied. 37 Thereafter,
Elvas and Tolentino filed separate petitions for review before us which we
consolidated in our Resolution38 dated July 21, 2010.
G.R. No. 192369
In her petition, Tolentino primarily faults the CA for reviewing the merits of the
case considering that the issue of illegal dismissal was not assigned as an
error in Elvas' petition before it. She alleges that she was denied due process
of law because she was not given the opportunity to rebut the claim of
termination of employment.39 Furthermore, she submits that the issue of
illegal dismissal is not closely related to or dependent on the error assigned
by Elvas and it was also not argued in Elvas' petition. 40 Subsequently, even
assuming that the CA can properly rule on the merits of the case, Tolentino
asserts that she did not commit any act that can be construed as dismissal,
actual or constructive, because Elvas has yet to show positive proof that he
was dismissed.41 The truth being that Elvas abandoned his work.42
In his Comment, Elvas advances that Tolentino's petition was filed out of time
because the last day of filing was June 11, 2010 yet she filed it only on July
12, 2010.43 Nonetheless, he agreed with Tolentino that he only raised one
issue with the CA, that is, whether the NLRC committed grave abuse of
discretion in giving due course to Tolentino's appeal in the absence of a valid
appeal bond. Other than that, he avers that he would simply adopt the
arguments raised in his own petition for review as Comment to Tolentino's
petition.44
In her Reply, Tolentino refutes that her petition was filed out of time. She
cites our Resolution dated July 2, 2010, where we granted her an extension
of until July 12, 2010 within which to tile her petition. 45
G.R. No. 193685
Elvas took issue on the CA's ruling allowing Tolentino's appeal before the
NLRC. He reiterates that no appeal was perfected in the absence of an
appeal bond, rendering the LA's Decision final and executory. Considering
respondents' appeal to the NLRC which should not have been given due
course, Elvas was allegedly deprived of the amounts awarded to him by the
Page 13 of 35
LA; hence, he prays that we order Tolentino to pay him damages for loss of
opportunity to make use of the money judgment in an amount computed
using the ordinary commercial bank's high yield interest rate. 46
Tolentino filed a Comment, praying that Elvas' petition be dismissed outright
for being filed one day late. She maintains that Elvas failed to cite a justifiable
reason for the delay as he merely stated in a Manifestation that the belated
filing was due to circumstances beyond his control. 47 She alleges that she did
not file a spurious surety bond on purpose and that she relied in good faith on
the representation of her former counsel that the bond was genuine and
valid.48 Lastly, she argues that she should not be held liable for damages
because Elvas' alleged loss of opportunities to invest the LA's judgment
award in a bank is highly speculative. 49
Elvas filed a Reply, explaining the circumstances that led to the late filing of
his petition.50
Issues
1. Whether the petitions separately filed by the parties are seasonably
filed;
2. Whether the CA etTed m allowing respondents' appeal in the NLRC;
and
3. Whether the CA erred in ruling on the question of Elvas' illegal
dismissal considering that it was not raised as an issue in Elvas'
petition before it.
Our Ruling
We deny the consolidated petitions. Elvas' appeal was filed out of time.
At the outset, we address the question of timeliness for both appeals. As
borne by the records, Tolentino received a copy of the Decision and
Resolution of the CA on July 31, 2009 and May 28, 2010,
respectively.51 Under Rule 45 of the Revised Rules of Court (the Rules),
Tolentino had 15 days from receipt of the resolution denying her motion for
reconsideration or until June 12, 2010 within which to file a petition for
review. Tolentino, however, asked tor additional period of 30 days or until
July 12, 2010 to file her petition. We granted her request in our Resolution
dated July 2, 2010.52 On July 12, 2010, Tolentino tiled her appeal. Clearly,
her petition was tiled on time.
Elvas received a copy of the Resolution of the CA denying his partial motion
for reconsideration on May 21, 2010. He had until June 5, 2010 to tile a
‫ﻫ‬Labor Laws- Assignment No. 2
petition for review. He sought an additional period of 30 days to file the same,
which we granted in our Resolution 53 dated July 21, 2010. However, on the
30th day, or on July 5, 2010, Elvas failed to file his petition. Instead, he filed it
on July 6, 2010. Evidently, Elvas' petition was filed out of time.
The right to appeal is neither a natural right nor is it a component of due
process. It is a mere statutory privilege, and may be exercised only in the
manner and in accordance with the provisions of law. 54 Elvas calls for our
compassion to overlook the one day delay in the filing of his petition;
however, we have ruled time and again that our kind consideration is not for
the undeserving. While it is within our power to relax the rule on timeliness of
appeals, the circumstances obtaining in this case do not warrant our
liberality.
Elvas attempted to justify the delay but we are not persuaded. In his Reply in
G.R. No. 193685, he claimed that he was able to obtain funds for printing and
photocopying of the petition and its attachments only on the last day of filing
the petition, or on July 5, 2010. By then, he mused that it was too late to
complete the photocopying and the collation of documents for submission on
the same dayas in fact, he was able to personally deliver the completed
petition before us only on the following day. 55 Interestingly, however, Elvas in
his Manifestation dated July 6, 2010 noted that he furnished Tolentino and
the CA, copies of his petition for review on July 5, 2010. 56 We find this detail
inconsistent with the alibi that Elvas narrated in his Reply. Elvas claims that
copies of the petition became available only on July 6, 2010, yet he was able
to furnish Tolentino and the CA with copies of the same on July 5, 2010. The
actuation of Elvas is suspect. It seems to us that he intended to give his
petition a semblance of being filed on time when in fact it was not. It is
calculated to prevent Tolentino from questioning the timeliness of Elvas'
petition, an utter sign of bad faith which we cannot countenance and does not
deserve our compassion.
In addition, the fact that the delay in the filing of the petition was only one day
is not a legal justification for non-compliance with the rule requiring that it be
filed within the reglementary period. 57 Thus, in the recent case of Visayan
Electric Company Employees Union-ALU-TUCP v. Visayan Electric
Cornpany, Inc.,58 we affirmed the CA's denial of a petition for certiorari filed
61 days instead of 60 days from notice of the judgment or resolution, viz:
[W]hen the law fixes thirty days x x x, we cannot take it to mean also thirty-
one days. If that deadline could be stretched to thirty-one days in one case,
what would prevent its being further stretched to thirty-two days in another
case, and so on, step by step, until the original line is forgotten or buried in
the growing confusion resulting from the alterations? That is intolerable. We
cannot fix a period with the solemnity of a statute and disregard it like a joke.
Page 14 of 35
If law is founded on reason, whim and fancy should play no part in its
application.59
Consequently, we deny Elvas' petition for being filed beyond the
reglementary period. In any case, his petition is also unmeritorious as we
shall discuss shortly.
The NLRC and CA did not err in allowing respondents' appeal.
Article 229 of the Labor Code mandates that appeals from the judgment of
the LA which involve a monetary award may be perfected only upon posting
of a cash or surety bond issued by a reputable bonding company duly
accredited by the NLRC in the amount equivalent to the monetary award in
the judgment appealed from. Consequently, Sections 1, 4, 5 and 6, Rule VI
of the 2011 NLRC Rules of Procedure state:
Sec. 1. Periods of Appeal. - Decisions, awards, or orders of the Labor Arbiter
shall be final and executory unless appealed to the Commission by any or
both parties within ten (10) calendar days from receipt thereof; and in case of
decisions or resolutions of the Regional Director of the Department of Labor
and Employment pursuant to Article 129 of the Labor Code, within five (5)
calendar days from receipt thereof. If the 10th or 5th day, as the case may
be, falls on a Saturday, Sunday or holiday, the last day to perfect the appeal
shall be the first working day following such Saturday, Sunday or holiday.
xxx
Sec. 4. Requisites for Perfection of Appeal. - (a) The appeal shall be:
(1) filed within the reglementary period provided in Section 1 of this
Rule;
(2) verified by the appellant himself/herself in accordance with
Section 4, Rule 7 of the Rules of Court, as amended;
(3) in the form of a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof, the
relief prayed for, and with a statement of the date the appellant
received the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and
(5) accompanied by:
i) proof of payment of the required appeal fee and legal research
fee;
ii) posting of a cash or surety bond as provided in Section 6 of this
Rule; and
‫ﻫ‬Labor Laws- Assignment No. 2
iii) proof of service upon the other parties.
(b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an appeal.
xxx
Sec. 5. Appeal Fee. - The appellant shall pay the prevailing appeal fee and
legal research fee to the Regional Arbitration Branch or Regional Office of
origin, and the official receipt of such payment shall form part of the records
of the case.
Sec. 6. Bond. - In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award,
exclusive of damages and attorney's fees.
The appellant shall furnish the appellee with a certified true copy of the said
surety bond with all the abovementioned supporting documents. The
appellee shall verify the regularity and genuineness thereof and immediately
report any irregularity to the Commission.
Upon verification by the Commission that the bond is irregular or not genuine,
the Commission shall cause the immediate dismissal of the appeal, and
censure the responsible parties and their counsels, or subject them to
reasonable fine or penalty, and the bonding company may be blacklisted.
xxx
These statutory and regulatory provisions explicitly provide that an appeal
from the LA to the NLRC must be perfected within 10 calendar days from
receipt of such decisions, awards or orders of the LA. In a judgment involving
a monetary award, the appeal shall be perfected only upon (1) proof of
payment of the required appeal fee; (2) posting of a cash or surety bond
issued by a reputable bonding company; and (3) filing of a memorandum of
appeal.60
The second requisite is the crux of the present controversy. Respondents
seasonably filed a memorandum of appeal and posted a surety bond in an
amount equivalent to the monetary award of the LA, but the bond turned out
to be spurious upon verification of Elvas. Respondents immediately put up a
new and genuine bond to replace the old one. The NLRC and the CA
allowed the appeal.
Page 15 of 35
We find no cogent reason to disturb the ruling of the courts a quo. While
posting of an appeal bond is mandatory and jurisdictional, 61 we sanction the
relaxation of the rule in certain meritorious cases. These cases include
instances in which (1) there was substantial compliance with the Rules, (2)
surrounding facts and circumstances constitute meritorious grounds to
reduce the bond, (3) a liberal interpretation of the requirement of an appeal
bond would serve the desired objective of resolving controversies on the
merits, or (4) the appellants, at the very least, exhibited their willingness
and/or good faith by posting a partial bond during the reglementary
period.62 The first and second instances are present in this case.
As correctly found by the CA, respondents substantially complied with the
rules as shown by their lack of intention to evade the requirement of appeal
bond.63 Upon being informed of the spuriousness of the bond, they dismissed
their counsel of record who was allegedly responsible for its submission and
hired another lawyer who submitted a genuine bond. 64 Both the NLRC and
the CA found good faith on the part of respondents, stating that the filing of
the alleged fake bond was without their knowledge and that they did not
purposely post a spurious bond. We adhere to a strict application of Article
229 of the Labor Code when appellants do not post an appeal bond at
all;65 but here an appeal bond was actually filed. Strict application of the rules
is therefore uncalled for.
Further, Article 227 of the same Code authorizes the NLRC to "use every
and all reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure." In the case
before us, the NLRC opined that it is in the best interest of justice that the
appeal be allowed so that the case could be resolved on its merits. In this
regard, we cite Rada v. NLRC,66 where we ruled that the NLRC did not
commit grave abuse of discretion when it entertained the employer's appeal
despite the posting of the surety bond beyond the reglementary period. We
explained that "[w]hile it is true that the payment of the supersedeas bond is
an essential requirement in the perfection of an appeal, however, where the
fee had been paid although payment was delayed, the broader interests of
justice and the desired objective of resolving controversies on the merits
demands that the appeal be given due course." 67
In Manaban v. Sarphil Corporation/Apokon Fruits, Inc.,68 we affirmed the
NLRC's decision to give due course to the appeal of the landowner-
employer, notwithstanding that the appeal was perfected beyond the 10-day
reglementary period and the posting of the appeal bond was four months
delayed on the basis of fundamental consideration of substantial
justice. Manaban involves the implementation of the Comprehensive
Agrarian Reform Program (CARP) which the NLRC acknowledged to be
more favorable to the landless farmers or in this case to the laborers/workers
of the land subject of the CARP. In light of the government's policy to equally
‫ﻫ‬Labor Laws- Assignment No. 2
protect and respect not only the laborers' interest but also that of the
employer, the NLRC allowed the landowner-employer's appeal.
All told, the NLRC and the CA did not err when they admitted respondents'
appeal.
The CA may rule upon an unassigned error to arrive at a complete and just
resolution of the case.
Tolentino laments that she was denied due process when the CA reviewed
an unassigned error - the issue of Elvas' illegal dismissal. She maintains that
it is not closely related to, or dependent on, the issue of perfection of appeal.
To support her argument, she harps on the applicability of Section 8, Rule 51
of the Rules, which reads:
Sec. 8. Questions that may be decided. - No error which does not affect the
jurisdiction over the subject matter or the validity of the judgment appealed
from or the proceedings therein will be considered unless stated in the
assignment of errors. or closely related to or dependent on an assigned error
and properly argued in the brief, save as the court may pass upon plain
errors and clerical errors.
Rightfully so, as borne by the record and as admitted by Elvas, the only error
raised in the CA is whether the NLRC committed grave abuse of discretion in
giving due course to respondents' appeal. Elvas did not ask the CA to review
the finding of the NLRC that he was not illegally dismissed. Yet, the CA
reversed that finding and declared that Elvas was illegally terminated from
service. Conscious of the fact that it was not raised as an issue, the CA
explained that ruling on the merits is necessary for a complete and just
resolution of the case.
We concur with the CA. Our rules recognize the broad discretionary power of
an appellate court to waive the lack of proper assignment of errors and to
consider errors not assigned.69 The CA has ample authority to review errors
not raised in the following instances:
(a) When the question affects jurisdiction over the subject matter;
(b) Matters that are evidently plain or clerical errors within contemplation
of law;
(c) Matters whose consideration is necessary in arriving at a just decision
and complete resolution of the case or in serving the interests of
justice or avoiding dispensing piecemeal justice;
(d) Matters raised in the trial court and are of record having some bearing
on the issue submitted that the parties failed to raise or that the lower
court ignored;
Page 16 of 35
 (e) Matters closely related to an error assigned; and
(f) Matters upon which the determination of a question properly assigned
is dependent.70
Evidently, the exceptions obtain in this case. The CA effectively avoided
dispensing piecemeal justice when it did not confine itself to the resolution
only of the procedural aspect of the case but ruled on the merits that is, the
issue of illegal dismissal. Since the LA and the NLRC had varying views of
the merits, it would best serve the interest of justice that the CA lays the
issue to a definitive rest. Additionally, it cannot be gainsaid that an appeal
throws the entire case open for review.71

Finally, we reject Tolentino's contention that she was deprived of due

process by the CA because she was not able to address the issue of illegal
dismissal in her submissions. Suffice it to state that no new issue of fact
arose, and no new evidence was presented before the CA in connection with
the question of illegal dismissal. Thus, it cannot be argued that Tolentino was
not given a chance to address them. The CA decided the merits of the case
based on the pleadings and evidence on record. Tolentino cannot deny her
active participation in the proceedings before the courts a quo. Thus, her cry
of violation of due process is misplaced.

In fine, the CA did not err in allowing respondents' appeal and m ruling on the
merits of the case.

WHEREFORE, the consolidated petitions are DENIED for lack of merit. The

July 21, 2009 Decision and May 17, 2010 Resolution of the Court of Appeals
in CA-G.R. SP No. 107070 are hereby AFFIRMED.

SO ORDERED.

‫ﻫ‬Labor Laws- Assignment No. 2

Page 17 of 35
[4] G.R. No. 205575               July 22, 2015
VISAYAN ELECTRIC COMPANY EMPLOYEES UNION-ALU-TUCP and
CASMERO MAHILUM, Petitioners, vs. VISAYAN ELECTRIC COMPANY,
INC. (VECO), Respondent.
Remedial Law; Special Civil Actions; Certiorari; Under Section 4, Rule 65 of
the 1997 Rules of Civil Procedure, certiorari should be filed “not later than sixty
(60) days from notice of the judgment, order or resolution” sought to be assailed.—
Under Section 4, Rule 65 of the 1997 Rules of Civil Procedure, certiorari should be
filed “not later than sixty (60) days from notice of the judgment, order or
resolution” sought to be assailed. The provisions on reglementary periods are strictly
applied, indispensable as they are to the prevention of needless delays, and are
necessary to the orderly and speedy discharge of judicial business. The timeliness of
filing a pleading is a jurisdictional caveat that even this Court cannot trifle with.
Same; Same; Same; The fact that the delay in the filing of the petition
for certiorari was only one (1) day is not a legal justification for noncompliance
with the rule requiring that it be filed not later than sixty (60) days from notice of the
assailed judgment, order or resolution.—The fact that the delay in the filing of the
petition for certiorari was only one day is not a legal justification for noncompliance
with the rule requiring that it be filed not later than sixty (60) days from notice of the
assailed judgment, order or resolution. The Court cannot subscribe to the theory that
the ends of justice would be better subserved by allowing a petition
for certiorari filed only one-day late. When the law fixes sixty (60) days, it cannot be
taken to mean also sixty-one (61) days, as the Court had previously declared in this
wise: [W]hen the law fixes thirty days [or sixty days as in the present case], we
cannot take it to mean also thirty-one days. If that deadline could be stretched to
thirty-one days in one case, what would prevent its being further stretched to thirty-
two days in another case, and so on, step by step, until the original line is forgotten or
buried in the growing confusion resulting from the alterations? That is intolerable.
We cannot fix a period with the solemnity of a statute and disregard it like a joke. If
law is founded on reason, whim and fancy should play no part in its application.
Labor Law; Collective Bargaining Agreements; It is a fundamental doctrine in
labor law that the Collective Bargaining Agreement (CBA) is the law between the
parties and they are obliged to comply with its provisions.—True, it is a fundamental
doctrine in labor law that the CBA is the law between the parties and they are
obliged to comply with its provisions. If the provisions of the CBA seem clear and
unambiguous, the literal meaning of their stipulations shall control. However, as in
this case, when general and specific provisions of the CBA are inconsistent,
the specific provision shall be paramount to and govern the general provision.
Section 4, Article XVII of the CBA states that “(a)ny difference of opinion,
controversy, dispute problem or complaint arising from Company-Union or
Company-Worker relations concerning the interpretation or application of this
‫ﻫ‬Labor Laws- Assignment No. 2
Agreement or regarding any matter affecting Company-Union or Company-Worker
relations shall be considered a grievance.” On the other hand, under Section 13,
Article XIV, “(t)he Company agrees that henceforth there shall be a fair and uniform
application of its rules and regulations. It is understood that disciplinary actions
imposed on employee or laborer shall be governed by the rules and regulations
promulgated by the Company as well as those provided for by existing laws on the
matter.”
Same; Termination of Employment; Loss of Trust and Confidence; The
Supreme Court (SC) has consistently held that loss of trust and confidence must be
based on willful breach of the trust reposed in the employee by his employer. —The
Court has consistently held that “x x x loss of trust and confidence must be based on
willful breach of the trust reposed in the employee by his employer. Such breach is
willful if it is done intentionally, knowingly, and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Moreover, it must be based on substantial evidence and not on the
employer’s whims or caprices or suspicions[,] otherwise, the employee would
eternally remain at the mercy of the employer. x x x. And, in order to constitute a just
cause for dismissal, the act complained of must be work-related and show that the
employee concerned is unfit to continue working for the employer. In addition, loss
of confidence x x x is premised on the fact that the employee concerned holds a
position of responsibility, trust, and confidence or that the employee concerned is
entrusted with confidence with respect to delicate matters, such as handling or care
and protection of the property and assets of the employer. The betrayal of this trust is
the essence of the offense for which an employee is penalized.”
Same; Same; Settled is the rule that an employer cannot be compelled to retain
an employee who is guilty of acts inimical to the interests of the employer. A
company has the right to dismiss its employee if only as a measure of self-protection.
—With the derogatory statements issued by Mahilum that were intended to incite,
not just public condemnation of VECO, but antagonism and obstruction against rate
increases in electricity that it may be allowed, by law, to fix, there can be no dispute
that VECO, indeed, had lost its trust and confidence in Mahilum and his ability to
perform his tasks with utmost efficiency and loyalty expected of an employee
entrusted to handle customers and funds. Settled is the rule that an employer cannot
be compelled to retain an employee who is guilty of acts inimical to the interests of
the employer. A company has the right to dismiss its employee if only as a measure
of self-protection.
Same; Social justice does not mandate that every dispute should be
automatically decided in favor of labor.—As a final word, while it is the state’s
responsibility to afford protection to labor, this policy should not be used as an
instrument to oppress management and capital. In resolving disputes between labor
and capital, fairness and justice should always prevail. Social justice does not
mandate that every dispute should be automatically decided in favor of labor. Justice
Page 18 of 35
is to be granted to the deserving and dispensed in the light of the established facts On May 8, 2009, Mahilum was issued a Notice to Explain 15 why he should
and the applicable law and doctrine. not be terminated from service due to loss of trust and confidence, as well as
in violating the Company Code of Discipline, for causing the publication of
what VECO deemed as a libelous article. The other union officers likewise
DECISION received similar notices 16 for them to explain their actions, which they
justified 17 as merely an expression of their collective sentiments against the
treatment of VECO's management towards them.18
PERLAS -BERNABE, J.:

On May 20, 2009, the union officers we.re notified 19 of the administrative
Assailed in this petition for review on certiorari 1are the Resolutions dated
investigation to be conducted relative to the charges against them. During the
September 25, 2012 2 and December 19, 2012 3 of the Court of Appeals (CA)
scheduled investigation, the Union's counsel initially raised its objection to
in CA-G.R. SP No. 06329, which dismissed the certiorari petition filed by
the proceedings and insisted that the investigation should be conducted
petitioners Visayan Electric Company Employees Union-ALU TUCP (the
through the grievance machinery procedure, as provided in the
Union) and Casmero Mahilum (Mahilum; collectively petitioners) against the
CBA. 20 However, upon the agreement to proceed with the investigation of
Decision 4 dated June 30, 2011 of the National Labor Relations Commission
the Union Vice President, Renato Gregorio M. Gimenez (Gimenez), through
(NLRC) in NLRC CC(V)-12 000003-10 (NCMB-RBVII-NS-10-12-10) for
his own counsel, Mahilum and the other union officers likewise agreed to
failure of their new counsel to show cause why their certiorari petition should
proceed with the aforesaid investigation, with Gimenez's counsel
not be dismissed for having been filed beyond the reglementary period.
representing the Union.21
Respondent Visayan Electric Company, Inc. (VECO) is a corporation
Prior to the said investigation, the Union filed on May 18, 2009, a Notice of
engaged in the supply and distribution of electricity in Cebu City and its
Strike 22 with the National Conciliation and Mediation Board (NCMB) against
neighboring cities, municipalities, and barangays.5 The Union is the exclusive
VECO, which facilitated a series of conferences that yielded a Memorandum
bargaining agent of VECO's rank and-file employees, and Macyi.Jttm was
of Agreement 23 (MOA) signed by the parties on August 7, 2009. 24 The
the Union's president from October 2007 until his termination from
parties likewise put to rest the critical issue of electricity privilege and agreed
employment on October 28, 2010. 6
before the NCMB on a conversion rate of said privilege to basic pay.
Moreover, the administrative investigation on the alleged libelous publication
It was claimed that, before Mahilum was elected as union officer, he was was deferred until after the CBA renegotiation. 25
transferred from VECO's Public Relations Section to its Administrative
Services Section without any specific work. When he was elected as union
However, even before the conclusion of the CBA renegotiation 26 on June 28,
secretary, he was transferred to the Line Services Department as its
2010, several complaints for libel were filed against Mahilum and the other
Customer Service Representative. 7 At the time of his election as union
union officers by VECO's Executive Vice President and Chief Operating
president, VECO management allegedly: (a) terminated active union
Officer Jaime Jose Y. Aboitiz. 27 The administrative hearing on the charges
members without going through the grievance machinery procedure
against Mahilum resumed with due notice to the latter, but he protested the
prescribed under the Collective Bargaining Agreement 8 (CBA); (b) refused to
same, referring to it as "moro-mord' or "kangaroo" and insisting that the
implement the profit-sharing scheme provided under the same CBA 9 (c) took
investigation should follow the grievance machinery procedure under the
back the motorbikes issued to active union members; and (d) revised the
CBA. 28 Nonetheless, VECO's management carried on with its investigation
electricity privilege 10 granted to VECO's employees. 11
and, on the basis of the findings thereof, issued a notice 29 terminating
Mahilum from employment on October 28, 2010. 30
Thus, on May 1, 2009, union members marched on the streets of Cebu City
to protest VECO's refusal to comply with the political and economic
On even date, the Union filed another Notice of Strike 31 with the NCMB
provisions of the CBA. Mahilum and other union officers were interviewed by
against VECO on the grounds of unfair labor practice, specifically union
the media, and they handed out a document 12 containing their grievances
busting - for the dismissal and/or suspension of its union president and
against VECO, the gist of which came out in local newspapers. 13 Following
officers, refusal to bargain collectively, as well as non-observance of the
said incident, Mahilum was allegedly demoted as warehouse staff to isolate
grievance procedure in their CBA. 32 To avert any work stoppage that will
him and restrict his movements. Other union officers were transferred to
prejudice VECO's power distribution activity, the Secretary of Labor
positions that will keep them away from the general union membership. 14
intervened and issued an Order 33 dated November 10, 2010 certifying the
‫ﻫ‬Labor Laws- Assignment No. 2
Page 19 of 35
labor dispute to the NLRC for compulsory arbitration. 34 Consequently, the
strike was enjoined; Mahilum was ordered reinstated in the payroll; and the
parties were directed to refrain from committing any act that would
exacerbate the situation.35
The NLRC Ruling
After submission of the respective position papers 36 of both parties, the
NLRC Seventh Division rendered Decision 37 on June 30, 2011 dismissing
the charge of unfair labor practice against VECO for lack of merit, and
declaring Mahilum's dismissal from employment as legal.
The NLRC found VECO to have acted within the bounds of law when it
administratively investigated the suspended or terminated employees and
union officers/members, instead of subjecting their respective cases to the
grievance machinery procedure provided in the CBA. 38 In resolving
apparently conflicting provisions in the CBA, the NLRC applied the specific
provision found in Section 13 of Article XIV that disciplinary actions shall be
governed by the rules and regulations promulgated by the company. Since
the administrative investigations conducted by VECO were found to have
complied with procedural due process requirements, there was no unfair
labor practice to speak of. 39
On the matter of Mahilum's dismissal and the filing of criminal cases against
the union officers, the NLRC found no substantial evidence to prove the
imputation of union busting. Similarly unsubstantiated were the allegations of
fraud and deceit in hiring and contracting out services for functions performed
by union members, and declaring certain positions confidential and
transferring union members to other positions without prior discussions,
thereby allegedly interfering with their right to self-organization and reducing
union membership.40
The issue on VECO's alleged modification of the electricity privilege, which
the Union claimed as violative of the CBA, was declared mooted by the MOA
entered into between the parties, with the assistance of the NCMB, providing
for, inter alia, electricity privilege conversion to basic pay. This was
subsequently incorporated in the Renegotiated CBA dated June 28, 2010. 41
Finally, the NLRC ruled that Mahilum was terminated for a just and valid
cause under Article 282 (c) of the Labor Code, i.e., fraud or willful breach of
trust by the employee of the trust reposed in him by his employer or duly
authorized representative, when he, together with some other union officers,
caused the publication of a document which was deemed to have dishonored
and blackened the memory of former corporate officer Luis Alfonso Y.
‫ﻫ‬Labor Laws- Assignment No. 2
Aboitiz, besmirched VECO's name and reputation, and exposed he latter to
public hatred, contempt, and ridicule. 42
Aggrieved, petitioners filed a motion for reconsideration 43 from the foregoing
NLRC Decision, which was denied in a Resolution 44 dated July 29,
2011.They received said Resolution on August 18, 2011. 45
On October 18, 2011, petitioners elevated their case to the CA on certiorari
petition, 46 docketed as CA-G.R. SP No. 06329, imputing grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the NLRC.
On February 29, 2012, the CA issued a Resolution 47 directing petitioners to
show cause why the certiorari petition should not be dismissed for having
been filed "one day behind the reglementary period." 48
On March 13, 2012, Atty. Jonas V. Asis (Atty. Asis) from the Seno Mendoza
& Associates Law Offices filed in behalf of petitioners a
Manifestation/Explanation 49 claiming that "there was unintended
error/mistake in the computation of the period," 50 and that there was no
prejudice caused to V~CO by the "unintended one-pay late filing of the
petition." 51
The CA Ruling
On September 25, 2012, the CA issued the assailed September 25, 2012
Resolution 52 pointing out that on March 7, 2012, petitioners had filed a
Manifestation 53 that they had terminated the services of Atty. Asis and the
Seno Mendoza & Associates as their counsel in this case, and have
contracted the services of Atty. Remigio D. Saladero, Jr. (Atty. Saladero) as
their new counsel. Consequently, the CA deemed as not filed the
Manifestation/Explanation filed by Atty. Asis, and dismissed the certiorari
petition for failure of Atty. Saladero to comply with the Resolution dated
February 29, 2012.
The motion for reconsideration 54 filed by Atty. Saladero imploring the CA to
consider the Manifestation/Explanation filed by Atty. Asis despite the fact that
he was no longer petitioners' counsel of record was denied in a
Resolution 55 dated December 19, 2012 for lack of merit.
The Issue
Undeterred, petitioners are now before the Court maintaining that the CA
erred in dismissing the certiorari petition on account of the one-day delay in
its filing despite the serious errors committed by the NLRC in absolving
Page 20 of 35
VECO from the charge of unfair labor practice and illegal dismissal of
Mahilum.
The Court's Ruling
The petition is not impressed with merit.
Under Section 4, Rule 65 of the 1997 Rules of Civil Procedure, certiorari
should be filed "not later than sixty (60) days from notice of the judgment,
order or resolution" sought to be assailed. The provisions on reglementary
periods are strictly applied, indispensable as they are to the prevention of
needless delays, and are necessary to the orderly and speedy discharge of
judicial business. The timeliness of filing a pleading is a jurisdictional caveat
that even this Court cannot trifle with. 56
The Union admittedly/ 57 received on August 18, 2011 the NLRC's July 29,
2011 Resolution, which denied their motion for reconsideration of the NLRC's
June 30, 2011 Decision. Therefore, the 60-day period within which to file a
petition for certiorari ended on October 1 7, 2011. But the certiorari petition
was filed one day after, or on October 18, 2011. Thus, petitioners' failure to
file said petition within the required 60-day period rendered the NLRC's
Decision and Resolution impervious to any attack through a Rule 65 petition
for certiorari, and no court can exercise jurisdiction to review the same. 58
Petitioners adamantly insist, however, that the "one-day delay occasioned by
an honest mistake in the computation of dates should have been overlooked
by the CA in favor of substantial justice." 59 Their former counsel, Atty. Asis,
allegedly thought in good faith that the month of August has thirty (30) days,
and that sixty (60) days from August 18, 2011 is October 18, 2011. 60
The Court is not convinced.
First, The fact that the delay in the filing of the petition for certiorari was only
one day is not a legal justification for non-compliance with the rule requiring
that it be filed not later than sixty (60) days from notice of the assailed
judgment, order or resolution. The Court cannot subscribe to the theory that
the ends of justice would be better subserved by allowing a petition for
certiorari filed only one day late. When the law fixes sixty (60) days, it cannot
be taken to mean also sixty-one ( 61) days, as the Court had previously
declared in this wise:
[W]hen the law fixes thirty days [or sixty days as in the present case], we
cannot take it to mean also thirty-one days. If that deadline could be
stretched to thirty-one days in one case, what would prevent its being further
stretched to thirty-two days in another case, and so on, step by step, until the
‫ﻫ‬Labor Laws- Assignment No. 2
original line is forgotten or buried in the growing confusion resulting from the
alterations? That is intolerable. We cannot fix a period with the solemnity of a
statute and disregard it like a joke. If law is founded on reason, whim and
fancy should play no part in its application. 61
Second. While it is always in the power of the Court to suspend its own rules,
or to except a particular case from its operation, 62 the liberality with which
equity jurisdiction is exercised must always be anchored on the basic
consideration that the same must be warranted by the circumstances
obtaining in the case. 63 However, there is no showing herein of any
exceptional circumstance that may rationalize a digression from the rule on
timeliness of petitions.
Moreover, petitioners failed to satisfactorily show that the refusal of VECO to
follow the grievance machinery procedure under Section 4, Article XVII of the
CBA in the suspension and termination from employment of the other union
officers and members constituted unfair labor practice.
True, it is a fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. If the
provisions of the CBA seem clear and unambiguous, the literal meaning of
their stipulations shall control. However, as in this case, when general and
specific provisions of the CBA are inconsistent, the specific provision shall be
paramount to and govern the general provision. 64
Section 4, Article XVII of the CBA states that "(a)ny difference of opinion,
controversy, dispute problem or complaint arising from Company-Union or
Company-Worker relations concerning the interpretation or application of this
Agreement or regarding any matter affecting Company-Union or Company-
Worker relations shall be considered a grievance." 65 On the other hand,
under Section 13, Article XIV, "(t)he Company agrees that henceforth there
shall be a fair and uniform application of its rules and regulations. It is
understood that disciplinary actions imposed on employee or laborer shall be
governed by the rules and regulations promulgated by the Company as well
as those provided for by existing laws on the matter. "66
The Court is in accord with the ratiocination of the NLRC that the sweeping
statement "any matter affecting Company-Union or Company-Worker
relations shall be considered a grievance" under Section 4, Article XVII is
general, as opposed to Section 13, Article XIV of the CBA, which is specific,
as it precisely refers to "what governs employee disciplinary actions." 67 Thus,
the NLRC correctly ruled that VECO acted within the bounds of law when it
proceeded with its administrative investigation of the charges against other
union officers and members.
Page 21 of 35
This is consistent with jurisprudential rulings supporting an employer's free
reign and "wide latitude of discretion to regulate all aspects of employment,
including the prerogative to instill discipline in its employees and to impose
penalties, including dismissal, upon erring employees. This is management
prerogative, where the free will of management to conduct its own affairs to
achieve its purpose takes form. The only criterion to guide the exercise of its
management prerogative is that the policies, rules[,] and regulations on work-
related activities of the employees must always be fair and reasonable[,] and
the corresponding penalties, when prescribed, are commensurate to the
offense involved and to the degree of the infraction." 68 The Labor Code does
not excuse employees from complying with valid company policies and
reasonable regulations for their governance and guidance. 69
Delving now into the merits of Mahilum's dismissal, the Court holds that the
two requisites for a valid dismissal from employment have been met, namely:
( 1) it must be for a just or authorized cause; and (2) the employee must be
afforded due process. 70
VECO anchored its termination of Mahilum on Article 282 ( c) of the Labor
Code and Articles 5.1 and 4.4 71 of VECO's Company Code of Discipline,
which read as follows:
Article 282 (c) of the Labor Code:
Art. 282. Termination by Employer. - An employer may terminate an
employment for any of the following causes:
(c) Fraud or willful breach of trust by the employee of the trust reposed 'in
him by his employer or duly authorized representative;
Company Code of Discipline:
Art. 5.1 Every employee shall uphold company trust and confidence as well·
as the trust relationship between the company and its customers/ suppliers.
Art. 4.4 Every employee shall willfully respect the honor or person of his
immediate superior and/or department head or company officers.
VECO found the following "Press Release", 72 which Mahilum, together with
other union officers, caused to be published, as libelous for dishonoring and
blackening the memory of then corporate officer Luis Alfonso Y. Aboitiz, as
well as for maliciously impeaching and besmirching the company's name and
reputation:
‫ﻫ‬Labor Laws- Assignment No. 2
VECEU-ALU President, Casmero A. Mahilum, said that since 2004 up to
present the new VECO Management under the administration of the
Aboitizes unceasingly attack the local Union by continuously limit (sic) its
membership and diminish (sic) and/or abolish (sic) worker's benefits and
privileges stipulated in the CBA. x x x. Through clever use of psychological
warfare, intimidation, deception, divide and rule tactic and taking great
advantage of the weakness of the Union especially of the leadership during
that time, the [new] Management under the late Alfonso Y. Aboitiz was able
to secure a Memorandum of Agreement (MOA) signed by the Union and
Management representatives and ratified by the General Membership that
gave Management more flexibility in dealing with labor. x x x.
The [l]ocal Union wrote a letter to Mr. Aboitiz expressing full support of his
campaign for energy conservation x x x. But Mr. Aboitiz was too hard and too
arrogant to deal with. x x x.
x x x. We, therefore, ask the general public to understand our plight and
support our actions. We also urge everyone to oppose any electricity rate
increase filed by VECO and NAPOCOR at the Energy Regulatory
Commission (ERC). Any rate increase in the electricity will only worsen the
already burdened public and further increase profits for the Aboitizes. The
entire Union membership are one with you in condemning such increase and
brazen connivance of VECO and NAPOCOR to justify increases in electricity
rate.
The Court has consistently held that "x x x loss of trust and confidence must
be based on willful breach of the trust reposed in the employee by his
employer. Such breach is willful if it is done intentionally, knowingly, and
purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. Moreover, it must be
based on substantial evidence and not on the employer's whims or caprices
or suspicions[,] otherwise, the employee would eternally remain at the mercy
of the employer. x x x. And, in order to constitute a just cause for dismissal,
the act complained of must be work-related and show that the employee
concerned is unfit to continue working for the employer.1âwphi1 In addition,
loss of confidence x x x is premised on the fact that the employee concerned
holds a position of responsibility, trust, and confidence or that the employee
concerned is entrusted with confidence with respect to delicate matters, such
as handling or care and protection of the property and assets of the
employer. The betrayal of this trust is the essence of the offense for which an
employee is penalized."74
Mahilum's attempt to rationalize his act as part of his "moral, legal or social
duty xx x to make known his legitimate perception" 75 against VECO does
not, in any way, detract from the indubitable fact that he intentionally,
knowingly, and purposely caused the aforequoted "disparaging publication."
Page 22 of 35
Neither can he hide behind the claim that the press release was simply "an
expression of a valid grievance." 76 As the NLRC aptly pointed out, "(i)nstead
of him and the rest of the union officers bringing their sentiments and/or
grievances against the management to the proper forum, they intentionally,
knowingly and purposefully breached their employer's trust, by issuing x x x
derogatory statements and causing their publication, apparently, to incite
public condemnation against the latter." 77It bears noting that, while
petitioners harp on the refusal of VECO to follow the grievance machinery
procedure under the CBA, they conveniently forgot that they themselves
shunned the very procedure to which they now hang by a thread.
Moreover, the Court is unmoved by Mahilum's insistence that there was
nothing in his position which called for management's trust and confidence in
him. 78 The NLRC, whose findings of facts and conclusions are generally
accorded not only great weight and respect but even with finality, correctly
held that, as Customer Service Representative, Mahilum occupied a position
of responsibility especially in dealing with VECO's clients. 79 His duties and
responsibilities included: (1) accepting pertinent documents and processing
electrical service applications; (2) verifying authenticity of documents
submitted; (3) interviewing customer-applicant on applications, complaints,
and requests; (4) preparing job assignment of service inspectors; (5) filing all
service .orders of inspectors; ( 6) assessing and accepting bill deposits; (7)
preparing and facilitating signing of Metered Service Contract; (8) issuing
service order for meter-related activities; (9) verifying existing account of
customer-applicant and approving account clearances; (10) accepting
payment of bills from customer applicant for account clearances; and (11)
processing payment arrangements of customers. 80
His performance was measured according to how he: (1) handled customers'
transactions; (2) made decisions in processing customers' applications and
payment arrangements; and (3) maintained posture at all times in handling
customers transactions even with angry customers 81.
It is clear from the foregoing that Mahilum was not an ordinary rank-and-file
employee. His job entailed the observance of proper company procedures
relating to processing and determination of electrical service applications
culminating in the . signing of service contracts, which constitutes the very
lifeblood of VECO's existence. He was further entrusted with handling the
accounts of customers and accepting payments from them.
Not only that, it was his duty to address customer complaints and requests.
Being a front liner of VECO, with the most consistent and direct interaction
with customers, Mahilum's job involved a high degree of responsibility
requiring a substantial amount of trust and confidence on the part of his
employer, i.e., VECO.
‫ﻫ‬Labor Laws- Assignment No. 2
However, with the derogatory statements issued by Mahilum that were
intended to incite, not just public condemnation of VECO, but antagonism
and obstruction against rate increases in electricity that it may be allowed, by
law, to fix, there can be no dispute that VECO, indeed, had lost its trust and
confidence in Mahilum and his ability to perform his tasks with utmost
efficiency and loyalty expected of an employee entrusted to handle
customers and funds. Settled is the rule that an employer cannot be
compelled to retain an employee who is guilty of acts inimical to the interests
of the employer. A company has the right to dismiss its employee if only as a
measure of self protection. 82
Thus, Mahilum was terminated for a just and valid cause. Moreover, as
declared by the NLRC, VECO complied with the procedural due process
requirements of furnishing Mahilum with two written notices before the
termination of employment can be effected. On May 8, 2009, 83 Mahilum was
apprised of the particular acts for which his termination was sought; and,
after due investigation, he was given a Notice of Decision 84on October 28,
2010 informing him of his dismissal from service.
The fact that Mahilum served the company for a considerable period of time
will not help his cause. It is well to emphasize that the longer an employee
stays in the service of the company, the greater is his responsibility for
knowledge and compliance with the norms of conduct and the code of
discipline in the company. 85
As a final word, while it is the state's responsibility to afford protection to
labor, this policy should not be used as an instrument to oppress
management and capital. In resolving disputes between labor and capital,
fairness and justice should always prevail. Social justice does not mandate
that every dispute should be automatically decided in favor of labor. Justice is
to be granted to the deserving and dispensed in the light of the established
facts and the applicable law and doctrine. 86
WHEREFORE, the instant petition is hereby DENIED.
SO ORDERED.
Page 23 of 35
[5] G.R. No. 213696, December 09, 2015
QUANTUM FOODS, INC., Petitioner, v. MARCELINO ESLOYO AND GLEN
MAGSILA, Respondent.
Labor Law; Procedural Rules and Technicalities; Due Process; Labor
officials are enjoined to use every and reasonable means to ascertain the facts in
each case speedily and objectively, without regard to technicalities of law or
procedure, in the interest of due process.—In the present case, it is apparent that the
plausible merit of the case was the “special circumstance” or “compelling reason”
that prompted the NLRC to relax the certification requirement and give due course to
QFI’s appeal as it, in fact, arrived at a contrary ruling from that of the LA. It is well
to emphasize that technical rules are not binding in cases submitted before the
NLRC. In fact, labor officials are enjoined to use every and reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, in the interest of due process. Consequently, the
NLRC cannot be faulted for relaxing its own rules in the interest of substantial
justice.
reglementary period to appeal and the subsequent posting of a surety bond constitute
substantial compliance of the bond requirement; and (b) there is merit in QFI’s
appeal.
Grave Abuse of Discretion; An act of a court or tribunal can only be
considered to be tainted with grave abuse of discretion when such act is done in a
capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction.
—It should be emphasized that the NLRC has full discretion to grant or deny the
motion to reduce bond, and its ruling will not be disturbed unless tainted with grave
abuse of discretion. Verily, an act of a court or tribunal can only be considered to be
tainted with grave abuse of discretion when such act is done in a capricious or
whimsical exercise of judgment as is equivalent to lack of jurisdiction, which clearly
is not extant with respect to the NLRC’s cognizance of QFI’s appeal. Far from
having gravely abused its discretion, the NLRC correctly preferred substantial justice
over the rigid and stringent application of procedural rules. This, by all means, is not
a case of grave abuse of discretion calling for the issuance of a writ of certiorari,
warranting the reversal of the CA’s ruling granting the certiorari petition and the
remand of the case to the CA for appropriate action.

Same; Appeal Bonds; While it has been settled that the posting of a cash or DECISION
surety bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the Labor Arbiter (LA), in several cases, the PERLAS-BERNABE, J.:
Supreme Court (SC) has relaxed this stringent requirement whenever justified.—
Coming now to the bond requirement, while it has been settled that the posting of a
cash or surety bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the LA, in several cases, the Court has relaxed
this stringent requirement whenever justified. Thus, the Rules — specifically Section
6, Rule VI — thereof, allow the reduction of the appeal bond upon a showing of: (a)
the existence of a meritorious ground for reduction, and (b) the posting of a
bond in a reasonable amount in relation to the monetary award.

Same; Same; Case law has held that for purposes of justifying the reduction of
the appeal bond, the merit referred to may pertain to (a) an appellant’s lack of
financial capability to pay the full amount of the bond, or (b) the merits of the main
appeal such as when there is a valid claim that there was no illegal dismissal to
justify the award, the absence of an employer-employee relationship, prescription of
claims, and other similarly valid issues that are raised in the appeal.—Case law has
held that for purposes of justifying the reduction of the appeal bond, the merit
referred to may pertain to (a) an appellant’s lack of financial capability to pay
the full amount of the bond, or (b) the merits of the main appeal such as when
there is a valid claim that there was no illegal dismissal to justify the award, the
absence of an employer-employee relationship, prescription of claims, and other
similarly valid issues that are raised in the appeal. In this case, the NLRC held that a
liberal application of the requirement on the timely filing of the appeal bond is
justified, finding that (a) the posting of a P400,000.00 cash bond within the
‫ﻫ‬Labor Laws- Assignment No. 2
Page 24 of 35
Assailed in this petition for review on certiorari1 are the Decision2 dated
January 18, 2011 and the Resolution 3 dated July 4, 2014 of the Court of
Appeals, Cebu City (CA) in CA-G.R. CEB-SP No. 04622, which reversed and
set aside the Decision4 dated February 20, 2009 and the Resolution5 dated
July 10, 2009 of the National Labor Relations Commission (NLRC) in NLRC
VAC No. 08-000526-2008, thereby reinstating the Decision 6 dated December
27, 2007 of the Labor Arbiter (LA), finding respondents Marcelino Esloyo
(Esloyo) and Glen Magsila (Magsila) to have been illegally dismissed.
The Facts
Petitioner Quantum Foods, Inc. (QFI) is a domestic corporation engaged in
the distribution and selling of food products nationwide, with principal office
located in Brgy. Merville, Parañaque City. It hired Esloyo as Major Accounts
Representative on December 14, 1998, whose consistent good performance
led to successive promotions, until his promotion to the position of Regional
Sales Manager for Visayas and Mindanao in 2004. 7 On the other hand, it
hired Magsila as Key Accounts Representative for the Panay Area on March
1, 2005 on a probationary status and gave him a "permanent" status on
August 31, 2005.8 In the course of their employment, Esloyo and Magsila
were each required to post a cash bond in the amount of P10,000.00 and
P7,000.00, respectively.9
In 2006, QFI decided to reorganize its sales force nationwide following a
drastic drop in net income in 2005, and Magsila was among those
retrenched.10 In a letter11 dated February 13, 2006, Magsila was informed of
his termination effective March 31, 2006, given the option not to report for
work beginning February 27, 2006, and advised to turn over his
responsibilities and clear his accountabilities to facilitate the release of his
final pay. The corresponding Establishment Termination Report 12 of the
retrenched employees was likewise submitted to the Department of Labor
and Employment. However, Magsila's final pay and other benefits were not
released due to alleged discovery of unauthorized/undocumented
deductions, which he purportedly failed to explain.13
Meanwhile, in response to several anonymous complaints against Esloyo for
alleged misbehavior and violations of various company rules and regulations,
such as sexual harassment, misappropriation of company funds/ property,
falsification/padding of reports and serious misconduct, QFI's auditor, Vilma
A. Almendrala, conducted an audit/investigation in Iloilo City on March 13 to
18, 2006,14 and submitted an Audit Report 15 dated March 23, 2006 detailing
her findings. A Show Cause Memorandum 16 dated March 24, 2006 (March
24, 2006 Show Cause Memorandum) was thereafter issued by QFI Human
‫ﻫ‬Labor Laws- Assignment No. 2
Resources (HR) Manager Rogelio Ma. J. dela Cruz (dela Cruz), directing
Esloyo to explain.
Esloyo submitted his written explanation denying the charges, 17 which QFI
found to be unsatisfactory.18 Consequently, in a letter19 dated March 31,
2006, Esloyo was informed of his termination from work effective April 3,
2006 on the ground of loss of trust and confidence due to his numerous
violations of the company rules and regulations.
Aggrieved, Esloyo and Magsila (respondents) filed separate complaints for
illegal dismissal with money claims against QFI, its President/General
Manager, Robert N. Suarez, and its HR Manager, De la Cruz, before the
NLRC, docketed as SRAB VI, Case Nos. 04-50116-2006 and 07-50239-
2006, respectively, which were subsequently consolidated. 20 They also
impleaded Dole Philippines, Inc. (Dole) as party to the case, claiming that
said company required them to perform additional tasks that were necessary
and desirable for its operations, and that Dole, as well as its Executive
personnel had created and organized QFI, and thus, should be held jointly
and solidarily liable with QFI for respondents' claims.21
Esloyo asserted that his dismissal was illegal, claiming that: (a) the charges
were all fabricated; (b) no formal investigation was conducted; and (c) he was
not given the opportunity to confront his accusers; adding too that prior to the
March 24, 2006 Show Cause Memorandum, he received an e-mail
memorandum directing him to report to the head office for re-assignment but
was, instead, placed on floating status.22 Magsila, on the other hand, averred
that there was no valid retrenchment as the losses claimed by QFI were
unsubstantiated and that he was merely replaced. 23
For its part, QFI maintained that respondents' dismissals were valid, hence, it
is not liable for their money claims. 24 On the other hand, Dole denied any
employer-employee relationship with respondents. 25cralawred
The LA Ruling
In a Decision26 dated December 27, 2007, the LA found respondents to have
been illegally dismissed, and ordered QFI to pay them their respective
backwages, 13th month pay, unpaid salaries, separation pay in lieu of
reinstatement equivalent to one (1) month pay for every year of service, and
refund of their cash bonds, or a total monetary judgment of
P1,817,856.71,27 plus 10% attorney's fees.
The LA held that Esloyo's dismissal was tainted with malice and bad faith,
finding that: (a) he was not given the opportunity to refute the charges leveled
against him, as instead of conducting an administrative investigation, QFI
Page 25 of 35
ordered his re-assignment and thereafter placed him on "floating status"; and
(b) the audit report submitted was based on unverified statements. The LA
likewise found no substantial evidence to support the charges against
Esloyo, and thus, ruled that the claim of loss of trust and confidence was
without basis.28
In the same vein, the LA declared Magsila's dismissal to be illegal, holding
that there could be no valid retrenchment since a replacement was hired
even before the effectivity of the latter's dismissal, noting too, that the
dismissal was effected only after he had acted as witness for Esloyo in the
sexual harassment charge.29
On the other hand, Dole was deleted as party to the case, upon a finding that
it has no employer-employee relationship with respondents; while the
impleaded QFI officials were absolved from personal liability. 30
Dissatisfied, QFI filed its Notice of Appeal and Memorandum of
Appeal31 before the NLRC on February 8, 2008, accompanied by:
(a) a Motion to Reduce Bond32 averring that it was encountering difficulty
raising the amount of the bond and finding an insurance company
that can cover said amount during the short period of time allotted for
an appeal; and (b) a cash bond in the amount of P400,000.00 (partial
bond).33
Respondents filed a motion to dismiss the appeal for QFI's failure:
(a) to attach a Verification and Certification of Non-Forum Shopping
as required by the New Rules and Procedure of the NLRC; and (b) to
post a bond in an amount equivalent to the monetary judgment as
mandated by law.34
(b) QFI thereafter moved to admit its Verification/Certification for Non-
Forum Shopping and related documents, explaining that the failure to
attach said documents was due to the inadvertence of its counsel
who was just recovering from the open cholecystectomy performed
on him, and that the appeal was based on meritorious grounds.
Subsequently, but before the NLRC could act on the Motion to
Reduce Bond, it posted a surety bond from an accredited insurance
company fully covering the monetary judgment, which respondents
vehemently opposed.35
The NLRC Ruling
In a Decision36 dated February 20, 2009, the NLRC denied respondents'
motion to dismiss and gave due course to QFI's appeal, holding that: (a) the
lack of verification was a formal defect that could be cured by requiring an
oath;37 (b) the belated filing of the certificate of non-forum shopping may be
‫ﻫ‬Labor Laws- Assignment No. 2
allowed under exceptional circumstances as technical rules of procedure
should be used to promote, not frustrate justice; 38 and (c) there was
substantial compliance with the bond requirement, and merit in QFI's appeal
that would justify a liberal application of the requirement on the timely filing of
the appeal bond.39
Contrary to the LA's ruling, the NLRC held that respondents were not illegally
dismissed.40 It gave credence to the audit report which showed the various
infractions committed by Esloyo in violation of the company rules and
regulations, and in breach of the confidence reposed on him, warranting his
dismissal.41 It also found substantial evidence to support the losses suffered
by QFI, and thus, declared Magsila's dismissal to prevent losses as a valid
exercise of the management's prerogative.42
Consequently, the NLRC deleted the awards of backwages, 13 th month pay,
and attorney's fees in favor of respondents for lack of basis, but sustained:
(a) the award of separation pay in favor of Magsila who was dismissed for an
authorized cause; and (b) the refund of respondents' cash bonds in the
absence of proof that the same had been returned by QFI. 43
Respondents filed a motion for reconsideration, 44 which was denied in a
Resolution45 dated July 10, 2009, prompting them to elevate the matter
on certiorari before the CA.46
The CA Ruling
In a Decision47 dated January 18, 2011, the CA reversed and set aside the
NLRC's ruling and reinstated the LA's Decision. It ruled that QFI's failure to
post the required bond in an amount equivalent to the monetary judgment
impeded the perfection of its appeal, and rendered the LA's Decision final
and executory.48 Thus, the NLRC was bereft of jurisdiction and abused its
discretion in entertaining the appeal. 49 It also held that the posting of the
partial bond together with the Motion to Reduce Bond did not stop the
running of the period to perfect the appeal, considering that: (a) the grounds
relied upon by QFI are not meritorious; and (b) the partial bond posted was
not reasonable in relation to the monetary judgment. 50
The CA further observed that the appeal filed on February 8, 2008 was
plagued with several infirmities that effectively prevented its perfection, noting
that: (a) there was no showing that de la Cruz, who filed/signed the petition,
was authorized to represent QFI and sign the verification; and (b) it was
unaccompanied by a certificate of non-forum shopping. Accordingly, it found
no compelling reason to justify the relaxation of the rules. 51
Undeterred, QFI filed a motion for reconsideration 52 which was denied in a
Resolution53 dated July 4, 2014; hence, this petition.
Page 26 of 35
The Issue Before the Court
The central issue for the Court's resolution is whether or not the CA erred in
ascribing grave abuse of discretion on the part of the NLRC in giving due
course to QFI's appeal.
The Court's Ruling
There is merit in the petition.
In labor cases, the law governing appeals from the LA's ruling to the NLRC is
Article 22954 of the Labor Code which provides:
ART. 229. Appeal. - Decisions, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards,
or orders. Such appeal may be entertained only on any of the following
grounds:
(a) If there is a prima facie evidence of abuse of discretion on the part of the
Labor Arbiter;
(b)  If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which would cause
grave or irreparable damage or injury to the appellant.
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the
judgment appealed from.
In this relation, Section 4, Rule VI of the 2005 Revised Rules of Procedure of
the NLRC55 (the Rules) enumerates the requisites for the perfection of
appeal, viz.:
Section 4. Requisites For Perfection Of Appeal. - a) The appeal shall be:
1) filed within the reglementary period provided in Section 1 of this Rule;
2) verified by the appellant himself in accordance with Section 4, Rule 7 of
the Rules of Court, as amended; 3) in the form of a memorandum of appeal
which shall state the grounds relied upon and the arguments in support
thereof, the relief prayed for, and with a statement of the date the appellant
received the appealed decision, resolution or order; 4) in three (3) legibly
typewritten or printed copies; and 5) accompanied by i) proof of payment of
‫ﻫ‬Labor Laws- Assignment No. 2
the required appeal fee; ii) posting of a cash or surety bond as provided in
Section 6 of this Rule; iii) a certificate of non-forum shopping; and iv)
proof of service upon the other parties.
b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an
appeal.
Notably, while QFI timely filed its Notice of Appeal and Memorandum of
Appeal, it was only accompanied by a partial bond with a Motion to Reduce
Bond, and not a bond in an amount equivalent to the monetary judgment, the
effects of which will be discussed later. The appeal likewise suffered from the
following deficiencies, inter alia: (a) the verification was signed by QFI HR
Manager dela Cruz, without the requisite board resolution authorizing him to
sign for and in behalf of QFI; and (b) it was unaccompanied by a Certificate
of Non-Forum Shopping. Nonetheless, QFI subsequently submitted its
Verification/Certification of Non-Forum Shopping and related documents,
explaining that the failure to attach said documents was due to the
inadvertence of its counsel who was then recuperating from the open
cholecystectomy performed on him, and that the appeal was based on
meritorious grounds.56
In China Banking Corp. v. Mondragon Int'l. Phils., Inc.,57 the Court had the
occasion to rule that the subsequent submission of proof of authority to act
on behalf of a petitioner corporation justifies the relaxation of the Rules for
the purpose of allowing its petition to be given due course. 58 Besides, the
verification of a pleading is a formal, not a jurisdictional, requirement intended
to secure the assurance that the matters alleged in a pleading are true and
correct. Thus, the court or tribunal may simply order the correction of
unverified pleadings or act on them and waive strict compliance with the
rules,59 as the NLRC did.
On the other hand, the certification requirement is rooted in the principle that
a party-litigant shall not be allowed to pursue simultaneous remedies in
different fora, as this practice is detrimental to an orderly judicial procedure.
However, under justifiable circumstances, the Court has relaxed the rule
requiring the submission of such certification considering that although it is
obligatory, it is not jurisdictional.60
In the present case, it is apparent that the plausible merit of the case was the
"special circumstance" or "compelling reason" 61 that prompted the NLRC to
relax the certification requirement and give due course to QFI's appeal as it,
in fact, arrived at a contrary ruling from that of the LA. It is well to emphasize
that technical rules are not binding in cases submitted before the NLRC. In
fact, labor officials are enjoined to use every and reasonable means to
ascertain the facts in each case speedily and objectively, without regard to
Page 27 of 35
technicalities of law or procedure, in the interest of due
process.62 Consequently, the NLRC cannot be faulted for relaxing its own
rules in the interest of substantial justice.
Coming now to the bond requirement, while it has been settled that the
posting of a cash or surety bond is indispensable to the perfection of an
appeal in cases involving monetary awards from the decision of the LA, 63 in
several cases,64 the Court has relaxed this stringent requirement whenever
justified. Thus, the Rules - specifically Section 6, Rule VI - thereof, allow the
reduction of the appeal bond upon a showing of: (a) the existence of a
meritorious ground for reduction, and (b) the posting of a bond in a
reasonable amount in relation to the monetary award, to wit:
SEC. 6. Bond. - In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be in the form of
cash deposit or surety bond equivalent in amount to the monetary award,
exclusive of damages and attorney's fees.
No motion to reduce bond shall be entertained except on meritorious
grounds, and only upon the posting of a bond in a reasonable amount
in relation to the monetary award.
The mere filing of a motion to reduce bond without complying with the
requisites in the preceding paragraphs shall not stop the running of the
period to perfect an appeal.65 (Emphasis and underscoring supplied)
In this regard, it bears stressing that the reduction of the bond provided
thereunder is not a matter of right on the part of the movant and its grant still
lies within the sound discretion of the NLRC upon a showing of meritorious
grounds and the reasonableness of the bond tendered under the
circumstances.66 The requirement on the existence of a "meritorious ground"
delves on the worth of the parties' arguments, taking into account their
respective rights and the circumstances that attend the case. 67
In Nicol v. Footjoy Industrial Corp.,68 the Court summarized the guidelines
under which the NLRC must exercise its discretion in considering an
appellant's motion for reduction of bond in this wise:
"[T]he bond requirement on appeals involving monetary awards has been
and may be relaxed in meritorious cases. These cases include instances in
which (1) there was substantial compliance with the Rules, (2) surrounding
facts and circumstances constitute meritorious grounds to reduce the bond,
(3) a liberal interpretation of the requirement of an appeal bond would serve
the desired objective of resolving controversies on the merits, or (4) the
appellants, at the very least, exhibited their willingness and/or good faith by
posting a partial bond during the reglementary
period."69ChanRoblesVirtualawlibrary
‫ﻫ‬Labor Laws- Assignment No. 2
Here, QFI posted a partial bond in the amount of P400,000.00, or more than
twenty percent (20%) of the monetary judgment, within the reglementary
period to appeal, together with the Motion to Reduce Bond anchored on its
averred difficulty in raising the amount of the bond and searching for an
insurance company that can cover said amount within the short period of
time to perfect its appeal. Before the NLRC could even act on the Motion to
Reduce Bond, QFI posted a surety bond from an accredited insurance
company covering fully the judgment award.
However, the CA held that the grounds relied upon by QFI are not
meritorious, and that the partial bond posted was not reasonable in relation to
the monetary judgment.
Case law has held that for purposes of justifying the reduction of the appeal
bond, the merit referred to may pertain to (a) an appellant's lack of
financial capability to pay the full amount of the bond, or (b) the merits
of the main appeal such as when there is a valid claim that there was no
illegal dismissal to justify the award, the absence of an employer-employee
relationship, prescription of claims, and other similarly valid issues that are
raised in the appeal.70
In this case, the NLRC held that a liberal application of the requirement on
the timely filing of the appeal bond is justified, finding that (a) the posting of a
P400,000.00 cash bond within the reglementary period to appeal and the
subsequent posting of a surety bond constitute substantial compliance of the
bond requirement; and (b) there is merit in QFI's appeal.
As to what constitutes "a reasonable amount of bond" that must accompany
the motion to reduce bond in order to suspend the period to perfect an
appeal, the Court, in McBurnie v. Ganzon,71 pronounced:
To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of
Procedure that give parties the chance to seek a reduction of the appeal
bond are effectively carried out, without however defeating the benefits of the
bond requirement in favor of a winning litigant, all motions to reduce bond
that are to be filed with the NLRC shall be accompanied by the posting
of a cash or surety bond equivalent to 10% of the monetary award that
is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant's
motion is pending resolution by the Commission. In conformity with the
NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorney's fees. Only
after the posting of a bond in the required percentage shall an appellant's
period to perfect an appeal under the NLRC Rules be deemed
suspended.72 (Emphasis and underscoring supplied)
Hence, the posting of a P400,000.00 cash bond equivalent to more than 20%
of the monetary judgment, together with the Motion to Reduce Bond within
Page 28 of 35
the reglementary period was sufficient to suspend the period to perfect the
appeal. The posting of the said partial bond coupled with the subsequent
posting of a surety bond in an amount equivalent to the monetary judgment
also signified QFI's good faith and willingness to recognize the final outcome
of its appeal.73

In determining the reasonable amount of appeal bonds, however, the Court

primarily considers the merits of the motions and the appeals. 74 Thus,
in Rosewood Processing, Inc. v. NLRC,75 the Court considered the posting of
a P50,000.00 bond together with the motion to reduce bond as substantial
compliance with the legal requirements of an appeal from a P789,154.39
monetary award "[considering the clear merits which appear, res ipsa
loquitor, in the appeal from the labor arbiter's Decision and the petitioner's
substantial compliance with rules governing appeals." 76

It should be emphasized that the NLRC has full discretion to grant or deny
the motion to reduce bond,77 and its ruling will not be disturbed unless tainted
with grave abuse of discretion. Verily, an act of a court or tribunal can only be
considered to be tainted with grave abuse of discretion when such act is
done in a capricious or whimsical exercise of judgment as is equivalent to
lack of jurisdiction,78 which clearly is not extant with respect to the NLRC's
cognizance of QFI's appeal. Far from having gravely abused its discretion,
the NLRC correctly preferred substantial justice over the rigid and stringent
application of procedural rules. This, by all means, is not a case of grave
abuse of discretion calling for the issuance of a writ of certiorari,79 warranting
the reversal of the CA's ruling granting the certiorari petition and the remand
of the case to the C A for appropriate action.

WHEREFORE, the petition is GRANTED. The Decision dated January 18,

2011 and the Resolution dated July 4, 2014 of the Court of Appeals, Cebu
City in CA-G.R. CEB-SP No. 04622 are hereby REVERSED and SET
ASIDE. The case is REMANDED to the CA for appropriate action.

SO ORDERED.

‫ﻫ‬Labor Laws- Assignment No. 2

Page 29 of 35
[6] G.R. No. 184262
UNIVERSITY OF SANTO TOMAS (UST), Petitioners vs. SAMAHANG
MANGGAGAWA NG UST, FERNANDO PONTESOR, * RODRIGO CLACER,
SANTIAGO BUISA, JR., and JIMMY NAZARETH, Respondents
Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari;
In a Rule 45 review, the Supreme Court (SC) examines the correctness of the Court
of Appeals’ (CA’s) Decision in contrast with the review of jurisdictional errors
under Rule 65.—Preliminarily, the Court stresses the distinct approach in reviewing
a CA’s ruling in a labor case. In a Rule 45 review, the Court examines the
correctness of the CA’s Decision in contrast with the review of jurisdictional errors
under Rule 65. Furthermore, Rule 45 limits the review to questions of law. In ruling
for legal correctness, the Court views the CA Decision in the same context that the
petition for certiorari was presented to the CA. Hence, the Court has to examine the
CA’s Decision from the prism of whether the CA correctly determined the presence
or absence of grave abuse of discretion in the NLRC decision.
Grave Abuse of Discretion; Words and Phrases; Case law states that grave
abuse of discretion connotes a capricious and whimsical exercise of judgment, done
in a despotic manner by reason of passion or personal hostility, the character of
which being so patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined by or to act at all in contemplation of
law.—Case law states that grave abuse of discretion connotes a capricious and
whimsical exercise of judgment, done in a despotic manner by reason of passion or
personal hostility, the character of which being so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or
to act at all in contemplation of law.
Same; Labor Law; In labor cases, grave abuse of discretion may be ascribed
to the National Labor Relations Commission (NLRC) when its findings and
conclusions are not supported by substantial evidence, which refers to that amount
of relevant evidence that a reasonable mind might accept as adequate to justify a
conclusion.—In labor cases, grave abuse of discretion may be ascribed to the NLRC
when its findings and conclusions are not supported by substantial evidence, which
refers to that amount of relevant evidence that a reasonable mind might accept as
adequate to justify a conclusion. Thus, if the NLRC’s ruling has basis in the evidence
and the applicable law and jurisprudence, then no grave abuse of discretion exists
and the CA should so declare and, accordingly, dismiss the petition.
Labor Law; Regular Employees; The law provides for two (2) types of regular
employees, namely: (a) those who are engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer (first
category); and (b) those who have rendered at least one (1) year of service, whether
continuous or broken, with respect to the activity in which they are employed
‫ﻫ‬Labor Laws- Assignment No. 2
(second category).—The law provides for two (2) types of regular employees,
namely: (a) those who are engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer (first category); and (b)
those who have rendered at least one year of service, whether continuous or broken,
with respect to the activity in which they are employed (second category).
In Universal Robina Corporation v. Catapang, 473 SCRA 189 (2005),
citing Abasolo v. NLRC, 346 SCRA 293 (2000), the Court laid down the test in
determining whether one is a regular employee, to wit: The primary standard,
therefore, of determining regular employment is the reasonable connection between
the particular activity performed by the employee in relation to the usual trade or
business of the employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has
been performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and continuing
need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity and while such activity
exists.
Same; Project Employees; According to jurisprudence, the principal test for
determining whether particular employees are properly characterized as “project-
based employees” as distinguished from “regular employees,” is whether or not the
employees were assigned to carry out a “specific project or undertaking,” the
duration (and scope) of which were specified at the time they were engaged for that
project.—In this relation, the Court clarifies that Pontesor, et al. were not project
employees of petitioner, who were validly terminated upon the completion of their
respective projects/undertakings. In Gadia v. Sykes Asia, Inc., 748 SCRA 633
(2015), the Court discussed the requisites for a valid project employment, to wit: A
project employee is assigned to a project which begins and ends at determined or
determinable times. Unlike regular employees who may only be dismissed for just
and/or authorized causes under the Labor Code, the services of employees who are
hired as “project[-based] employees” may be lawfully terminated at the completion
of the project. According to jurisprudence, the principal test for determining whether
particular employees are properly characterized as “project[-based] employees” as
distinguished from “regular employees,” is whether or not the employees were
assigned to carry out a “specific project or undertaking,” the duration (and
scope) of which were specified at the time they were engaged for that project. The
project could either be (1) a particular job or undertaking that is within the
regular or usual business of the employer company, but which is distinct and
separate, and identifiable as such, from the other undertakings of the company;
or (2) a particular job or undertaking that is not within the regular business of
the corporation. In order to safeguard the rights of workers against the arbitrary use
of the word “project” to prevent employees from attaining a regular
Page 30 of 35
status, employers claiming that their workers are project[-based] employees
should not only prove that the duration and scope of the employment was
specified at the time they were engaged, but also, that there was indeed a
project.
Same; Same; If it is apparent from the circumstances of the case “that periods
have been imposed to preclude acquisition of tenurial security by the employee,”
such project or fixed term contracts are disregarded for being contrary to public
policy, as in this case.—Lest it be misunderstood, there are instances when the
validity of project or fixed term employments were upheld on the ground that it was
“agreed upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where it satisfactorily appears that the
employer and employee dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former over the latter.” However,
if it is apparent from the circumstances of the case “that periods have been imposed
to preclude acquisition of tenurial security by the employee,” such project or fixed
term contracts are disregarded for being contrary to public policy, as in this case.

Same; Regularized Casual Employees; Pontesor, et al. should, as discussed

earlier, be considered regularized casual employees who enjoy, inter alia, security
of tenure.—Pontesor, et al. should, as discussed earlier, be considered regularized
casual employees who enjoy, inter alia, security of tenure. Accordingly, they cannot
be terminated from employment without any just and/or authorized cause, which
unfortunately, petitioner was guilty of doing in this case. Hence, Pontesor, et al. must
be reinstated to their former or equivalent positions, with full backwages and without
loss of seniority rights. As pointed out by the LA, the NLRC Computation &
Examination Unit should be directed to compute the monetary awards that petitioner
should be ordered to pay Pontesor, et al. as a consequence of this ruling.

DECISION

PERLAS-BERNABE, J.:

‫ﻫ‬Labor Laws- Assignment No. 2

Page 31 of 35
Assailed in this petition for review on certiorari1 are the Decision2 dated June
12, 2008 and the Resolution3 dated August 22, 2008 of the Court of Appeals
(CA) in CA-G.R. SP No. 85464, which reversed and set aside the
Resolutions dated March 26, 20044 and May 25, 20045 of the National Labor
Relations Commission (NLRC) in NLRC NCR CASE NO. 00-08-08586-99
(NLRC CA No. 035509-03) and, accordingly, reinstated the Decision 6 dated
October 23, 2002 of the Labor Arbiter (LA) in NLRC-NCR-0-08-08586-99
declaring respondents Fernando Pontesor (Pontesor ), Rodrigo Clacer
(Clacer), Santiago Buisa, Jr. (Buisa), and Jimmy Nazareth (Nazareth;
Pontesor, et al., collectively) as regular employees of petitioner University of
Santo Tomas (petitioner) and, thus, were illegally dismissed by the latter.
The Facts
The instant case stemmed from a complaint 7 for regularization and illegal
dismissal filed by respondents Samahang Manggagawa ng UST and
Pontesor, et al.  (respondents) against petitioner before the NLRC.
Respondents alleged that on various periods spanning the years 1990-1999,
petitioner repeatedly hired Pontesor, et al. to perform various maintenance
duties within its campus, i.e.,  as laborer, mason, tinsmith, painter, electrician,
welder, carpenter. Essentially, respondents insisted that in view of
Pontesor, et al.'  s performance of such maintenance tasks throughout the
years, they should be deemed regular employees of petitioner. Respondents
further argued that for as long as petitioner continues to operate and exist as
an educational institution, with rooms, buildings, and facilities to maintain, the
latter could not dispense with Pontesor, et al. 's services which are
necessary and desirable to the business of petitioner.8
On the other hand, while petitioner admitted that it repeatedly hired
Pontesor, et al.  in different capacities throughout the aforesaid years, it
nevertheless maintained that they were merely hired on a per-project basis,
as evidenced by numerous Contractual Employee Appointments
(CEAs)9 signed by them. In this regard, petitioner pointed out that each of the
CEAs that Pontesor, et al. signed defined the nature and term of the project
to which they are assigned, and that each contract was renewable in the
event the project remained unfinished upon the expiration of the specified
term. In accordance with the express provisions of said CEAs, Pontesor, et
al. 's project employment were automatically terminated: (a) upon the
expiration of the specific term specified in the CEA; (b) when the project is
completed ahead of such expiration; or (c) in cases when their employment
was extended due to the non-completion of the specific project for which they
were hired, upon the completion of the said project. As such, the termination
of Pontesor, et al. 's employment with petitioner was validly made due to the
completion of the specific projects for which they were hired. 10
‫ﻫ‬Labor Laws- Assignment No. 2
The LA Ruling
In a Decision 11 dated October 23, 2002, the LA ruled in Pontesor, et al. 's
favor and, accordingly, ordered petitioner to reinstate them to their former
jobs with full backwages and without loss of seniority rights. 12 The LA found
that Pontesor, et al.  should be deemed as petitioner's regular employees,
considering that: (a)  they have rendered at least one (1) year of service to
petitioner as its employees; (b) the activities for which they were hired for are
vital or inherently indispensable to the maintenance of the buildings or
classrooms where petitioner's classes were held; and (c) their CEAs were
contrived to preclude them from obtaining security of tenure. In this light and
in the absence of any valid cause for termination, the LA concluded that
Pontesor, et al. were illegally dismissed by petitioner. 13
Aggrieved, petitioner appealed14 to the NLRC.
The NLRC Ruling
In a Resolution 15 dated March 26, 2004, the NLRC vacated the LA ruling
and, consequently, entered a new one dismissing respondents' complaint for
lack of merit. 16 Contrary to the LA's findings, the NLRC found that
Pontesor, et al. cannot be considered regular employees as they knowingly
and voluntarily entered into fixed term contracts of employment with
petitioner. As such, they could not have been illegally dismissed upon the
expiration of their respective last valid and binding fixed term employment
contracts with petitioner. This notwithstanding, the NLRC rejected petitioner's
contention that Pontesor, et al. should be deemed project employees,
ratiocinating that their work were not usually necessary and desirable to
petitioner's main business or trade, which is to provide elementary,
secondary, tertiary, and post-graduate education. As such, the NLRC
classified Pontesor, et al. as mere fixed term casual employees.17
Respondents moved for reconsideration, 18 which was, however, denied in a
Resolution 19 dated May 25, 2004. Dissatisfied, they filed a
petition20 for certiorari before the CA.
The CA Ruling
In a Decision 21 dated June 12, 2008, the CA reversed and set aside the
NLRC ruling and, accordingly, reinstated that of the LA. 22 It held that
Pontesor, et al.  cannot be considered as merely fixed term or project
employees, considering that: (a) they performed work that is necessary and
desirable to petitioner's business, as evidenced by their repeated rehiring
and petitioner's continuous need for their services; and (b) the specific
Page 32 of 35
undertaking or project for which they were employed were not clear as the
project description set forth in their respective CEAs were either too general
or too broad. Thus, the CA classified Pontesor, et al.  as regular employees,
who are entitled to security of tenure and cannot be terminated without any
just or authorized caused. 23
Undaunted, petitioner moved for reconsideration, 24 but the same was denied
in a Resolution25 dated August 22, 2008; hence, this petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA correctly ruled
that Pontesor, et al.  are regular employees and, consequently, were illegally
dismissed by petitioner.
The Court's Ruling
The petition is without merit.
"Preliminarily, the Court stresses the distinct approach in reviewing a CA's
ruling in a labor case.1âwphi1 In a Rule 45 review, the Court examines the
correctness of the CA' s Decision in contrast with the review of jurisdictional
errors under Rule 65. Furthermore, Rule 45 limits the review to questions of
law. In ruling for legal correctness, the Court views the CA Decision in the
same context that the petition for certiorari  was presented to the CA. Hence,
the Court has to examine the CA's Decision from the prism of whether the
CA correctly determined the presence or absence of grave abuse of
discretion in the NLRC decision."26
Case law states that grave abuse of discretion connotes a capricious and
whimsical exercise of judgment, done in a despotic manner by reason of
passion or personal hostility, the character of which being so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to
perform the duty enjoined by or to act at all in contemplation of law. 27
"In labor cases, grave abuse of discretion may be ascribed to the NLRC
when its findings and conclusions are not supported by substantial evidence,
which refers to that amount of relevant evidence that a reasonable mind
might accept as adequate to justify a conclusion. Thus, if the NLRC's ruling
has basis in the evidence and the applicable law and jurisprudence, then no
grave abuse of discretion exists and the CA should so declare and,
accordingly, dismiss the petition."28
Guided by the foregoing considerations, the Court finds that the CA correctly
ascribed grave abuse of discretion on the part of the NLRC, as its finding that
‫ﻫ‬Labor Laws- Assignment No. 2
Pontesor, et al. are not regular employees of petitioner patently deviates
from the evidence on record as well as settled legal principles of labor law.
Article 29529 of the Labor Code, 30 as amended, distinguishes project
employment from regular employment as follows:
Art. 295 [280]. Regular and casual employment.  - The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for the duration of
the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
Under the foregoing provision, the law provides for two (2) types of regular
employees, namely: (a)  those who are engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the
employer (first category); and (b) those who have rendered at least one year
of service, whether continuous or broken, with respect to the activity in which
they are employed (second category). 31 In Universal Robina Corporation v.
Catapang,32 citing Abasolo v. NLRC,33 the Court laid down the test in
determining whether one is a regular employee, to wit:
The primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual trade or business of the employer. The test
is whether the former is usually necessary or desirable in the usual business
or trade of the employer. The connection can be determined by considering
the nature of work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been
performing the job for at least a year, even if the performance is not
continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence,
the employment is considered regular, but only with respect to such
Page 33 of 35
activity and while such activity exists. 34 (Emphasis and underscoring
supplied.
In Kimberly Independent Labor Union for Solidarity, Activism, and
Nationalism - Organized Labor Ass 'n. in Line Industries and Agriculture
(KILUSAN-OLALIA) v. Drilon (Kimberly),  35 the company was engaged in the
manufacture of paper products, while the questioned employees occupied
the positions of mechanics, electricians, machinists, machine shop helpers,
warehouse helpers, painters, carpenters, pipefitters and masons. In that
case, the Court held that since they have worked for the company for more
than one (1) year, they should belong to the second category of regular
employees by operation of law. In the case at bar, a review of Pontesor, et
al. 's respective CEAs36 reveal that petitioner repeatedly rehired them for
various positions in the nature of maintenance workers, such as laborer,
mason, painter, tinsmith, electrician, carpenter, and welder, for various
periods spanning the years 1990-1999. Akin to the situation of the employees
in Kimberly,  Pontesor, et al. 's nature of work are not necessary and
desirable to petitioner's usual business as an educational institution; hence,
removing them from the ambit of the first category of regular employees
under Article 295 of the Labor Code. Nonetheless, it is clear that their
respective cumulative periods of employment as per their respective CEAs
each exceed one (1) year. Thus, Pontesor, et al. fall under the second
category of regular employees under Article 295 of the Labor Code.
Accordingly, they should be deemed as regular employees but only with
respect to the activities for which they were hired and for as long as such
activities exist.
In this relation, the Court clarifies that Pontesor, et al.  were not project
employees of petitioner, who were validly terminated upon the completion of
their respective projects/undertakings. In Gadia v. Sykes Asia, Inc.,37 the
Court discussed the requisites for a valid project employment, to wit:
A project employee is assigned to a project which begins and ends at
determined or determinable times. Unlike regular employees who may only
be dismissed for just and/or authorized causes under the Labor Code, the
services of employees who are hired as "project[-based] employees" may be
lawfully terminated at the completion of the project.
According to jurisprudence, the principal test for determining whether
particular employees are properly characterized as "project[based]
employees" as distinguished from "regular employees," is whether or not
the employees were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the time
they were engaged for that project. The project could either be (1) a
particular job or undertaking that is within the regular or usual business
of the employer company, but which is distinct and separate, and
‫ﻫ‬Labor Laws- Assignment No. 2
identifiable as such, from the other undertakings of the company; or (2)
a particular job or undertaking that is not within the regular business of
the corporation. In order to safeguard the rights of workers against the
arbitrary use of the word "project" to prevent employees from attaining a
regular status, employers claiming that their workers are project[-based]
employees should not only prove that the duration and scope of the
employment was specified at the time they were engaged, but also, that
there was indeed a project.38 (Emphases and underscoring supplied)
As aptly held by the CA, Pontesor, et al.  could not be considered as project
employees because the specific undertakings or projects for which they were
employed were not clearly delineated. This is evidenced by the vagueness of
the project descriptions set forth in their respective CEAs, 39 which states that
they were tasked "to assist" in various carpentry, electrical, and masonry
work. In fact, when the aforesaid CEAs are pieced together, it appears that
during the years 1990 to 1999, Pontesor, et al. were each engaged to
perform all-around maintenance services throughout the various
facilities/installations in petitioner's campus. Thus, it seems that petitioner,
through the CEAs, merely attempted to compartmentalize Pontesor, et al.' s
various tasks into purported "projects" so as to make it appear that they were
hired on a per-project basis. Verily, the Court cannot countenance this
practice as to do so would effectively permit petitioners to avoid hiring
permanent or regular employees by simply hiring them on a temporary or
casual basis, thereby violating the employees' security of tenure relative to
their jobs. 40
Lest it be misunderstood, there are instances when the validity of project 41 or
fixed term42 employments were upheld on the ground that it was "agreed
upon knowingly and voluntarily by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent, or where it satisfactorily appears
that the employer and employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised by the former over
the latter."43 However, if it is apparent from the circumstances of the case
"that periods have been imposed to preclude acquisition of tenurial security
by the employee," such project or fixed term contracts are disregarded for
being contrary to public policy, 44 as in this case.
In view of the foregoing, Pontesor, et al. should, as discussed earlier, be
considered regularized casual employees  who enjoy, inter alia,  security of
tenure. Accordingly, they cannot be terminated from employment without any
just and/or authorized cause, which unfortunately, petitioner was guilty of
doing in this case. Hence, Pontesor, et al.  must be reinstated to their former
or equivalent positions, with full backwages and without loss of seniority
rights. As pointed out by the LA, the NLRC Computation & Examination Unit
Page 34 of 35
should be directed to compute the monetary awards that petitioner should be
ordered to pay Pontesor, et al. as a consequence of this ruling.

WHEREFORE, the petition is DENIED. The Decision dated June 12, 2008

and the Resolution dated August 22, 2008 of the Court of Appeals in CA-
G.R. SP No. 85464 are hereby AFFIRMED. SO ORDERED.

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