Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-69870 November 29, 1988 NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ, petitioners, vs. THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO, respondents. G.R. No. 70295 November 29,1988 EUGENIA C. CREDO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, NATIONAL SERVICES CORPORATION AND ARTURO L. PEREZ, respondents. The Chief Legal Counsel for respondents NASECO and Arturo L. Perez. Melchor R. Flores for petitioner Eugenia C. Credo. PADILLA, J.: Consolidated special civil actions for certiorari seeking to review the decision * of the Third Division, National Labor Relations Commission in Case No. 11-4944-83 dated 28 November 1984 and its resolution dated 16 January 1985 denying motions for reconsideration of said decision. Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a domestic corporation which provides security guards as well as messengerial, janitorial and other similar manpower services to the Philippine National Bank (PNB) and its agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through the years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and Records, on 10 March 1980. 1 Sometime before 7 November 1983, Credo was administratively charged by Sisinio S. Lloren, Manager of Finance and Special Project and Evaluation Department of NASECO, stemming from her non-compliance with Lloren's memorandum, dated 11 October 1983, regarding certain entry procedures in the company's Statement of Billings Adjustment. Said charges alleged that Credo "did not comply with Lloren's instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and when [Credo] was called by Lloren to his office to explain further the said instructions, [Credo] showed resentment and behaved in a scandalous manner by shouting and uttering remarks of disrespect in the presence of her co-employees." 2 On 7 November 1983, Credo was called to meet Arturo L. Perez, then Acting General Manager of NASECO, to explain her side before Perez and NASECO's Committee on Personnel Affairs in connection with the administrative charges filed against her. After said meeting, on the same date, Credo was placed on "Forced Leave" status for 1 5 days, effective 8 November 1983. 3 Before the expiration of said 15-day leave, or on 18 November 1983, Credo filed a complaint, docketed as Case No. 114944-83, with the Arbitration Branch, National Capital Region, Ministry of Labor and Employment, Manila, against NASECO for placing her on forced leave, without due process. 4 Likewise, while Credo was on forced leave, or on 22 November 1983, NASECO's Committee on Personnel Affairs deliberated and evaluated a number of past acts of misconduct or infractions attributed to her. 5 As a result of this deliberation, said committee resolved: 1. That, respondent [Credo] committed the following offenses in the Code of Discipline, viz: OFFENSE vs. Company Interest & Policies No. 3 Any discourteous act to customer, officer and employee of client company or officer of the Corporation. OFFENSE vs. Public Moral No. 7 Exhibit marked discourtesy in the course of official duties or use of profane or insulting language to any superior officer. OFFENSE vs. Authority No. 3 Failure to comply with any lawful order or any instructions of a superior officer. 2. That, Management has already given due consideration to respondent's [Credo] scandalous actuations for several times in the past. Records also show that she was reprimanded for some offense and did not question it. Management at this juncture, has already met its maximum tolerance point so it has decided to put an end to respondent's [Credo] being an undesirable employee. 6 The committee recommended Credo's termination, with forfeiture of benefits. 7 On 1 December 1983, Credo was called age to the office of Perez to be informed that she was being charged with certain offenses. Notably, these offenses were those which NASECO's Committee on Personnel Affairs already resolved, on 22 November 1983 to have been committed by Credo. In Perez's office, and in the presence of NASECO's Committee on Personnel Affairs, Credo was made to explain her side in connection with the charges filed against her; however, due to her failure to do so, 8 she was handed a Notice of Termination, dated 24 November 1983, and made effective 1 December 1983. 9 Hence, on 6 December 1983, Credo filed a supplemental complaint for illegal dismissal in Case No. 11-4944-83, alleging absence of just or authorized cause for her dismissal and lack of opportunity to be heard. 10 After both parties had submitted their respective position papers, affidavits and other documentary evidence in support of their claims and defenses, on 9 May 1984, the labor arbiter rendered a decision: 1) dismissing Credo's complaint, and 2) directing NASECO to pay Credo separation pay equivalent to one half month's pay for every year of service. 11
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Both parties appealed to respondent National Labor Relations Commission (NLRC) which, on 28 November 1984, rendered a decision: 1) directing NASECO to reinstate Credo to her former position, or substantially equivalent position, with six (6) months' backwages and without loss of seniority rights and other privileges appertaining thereto, and 2) dismissing Credo's claim for attorney's fees, moral and exemplary damages. As a consequence, both parties filed their respective motions for reconsideration, 12 which the NLRC denied in a resolution of 16 January 1985. 13 Hence, the present recourse by both parties. In G.R. No. 68970, petitioners challenge as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which ordered Credo's reinstatement with backwages. 14 Petitioners contend that in arriving at said questioned order, the NLRC acted with grave abuse of discretion in finding that: 1) petitioners violated the requirements mandated by law on termination, 2) petitioners failed in the burden of proving that the termination of Credo was for a valid or authorized cause, 3) the alleged infractions committed by Credo were not proven or, even if proved, could be considered to have been condoned by petitioners, and 4) the termination of Credo was not for a valid or authorized cause. 15 On the other hand, in G.R. No. 70295, petitioner Credo challenges as grave abuse of discretion the dispositive portion of the 28 November 1984 decision which dismissed her claim for attorney's fees, moral and exemplary damages and limited her right to backwages to only six (6) months. 16 As guidelines for employers in the exercise of their power to dismiss employees for just causes, the law provides that: Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. xxx xxx xxx Section 5. Answer and Hearing. The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. Section 6. Decision to dismiss. The employer shall immediately notify a worker in writing of a decision to dismiss him stating clearly the reasons therefor. 17 These guidelines mandate that the employer furnish an employee sought to be dismissed two (2) written notices of dismissal before a termination of employment can be legally effected. These are the notice which apprises the employee of the particular acts or omissions for which his dismissal is sought and the subsequent notice which informs the employee of the employer's decision to dismiss him. Likewise, a reading of the guidelines in consonance with the express provisions of law on protection to labor 18(which encompasses the right to security of tenure) and the broader dictates of procedural due process necessarily mandate that notice of the employer's decision to dismiss an employee, with reasons therefor, can only be issued after the employer has afforded the employee concerned ample opportunity to be heard and to defend himself. In the case at bar, NASECO did not comply with these guidelines in effecting Credo's dismissal. Although she was apprised and "given the chance to explain her side" of the charges filed against her, this chance was given so perfunctorily, thus rendering illusory Credo's right to security of tenure. That Credo was not given ample opportunity to be heard and to defend herself is evident from the fact that the compliance with the injunction to apprise her of the charges filed against her and to afford her a chance to prepare for her defense was dispensed in only a day. This is not effective compliance with the legal requirements aforementioned. The fact also that the Notice of Termination of Credo's employment (or the decision to dismiss her) was dated 24 November 1983 and made effective 1 December 1983 shows that NASECO was already bent on terminating her services when she was informed on 1 December 1983 of the charges against her, and that any hearing which NASECO thought of affording her after 24 November 1983 would merely be pro forma or an exercise in futility. Besides, Credo's mere non-compliance with Llorens memorandum regarding the entry procedures in the company's Statement of Billings Adjustment did not warrant the severe penalty of dismissal of the NLRC correctly held that: ... on the charge of gross discourtesy, the CPA found in its Report, dated 22 November 1983 that, "In the process of her testimony/explanations she again exhibited a conduct unbecoming in front of NASECO Officers and argued to Mr. S. S. Lloren in a sarcastic and discourteous manner, notwithstanding, the fact that she was inside the office of the Acctg. General Manager." Let it be noted, however, that the Report did not even describe how the so called "conduct unbecoming" or "discourteous manner" was done by complainant. Anent the "sarcastic" argument of complainant, the purported transcript 19 of the meeting held on 7 November 1983 does not indicate any sarcasm on the part of complainant. At the most, complainant may have sounded insistent or emphatic about her work being more complete than the work of Ms. de Castro, yet, the complaining officer signed the work of Ms. de Castro and did not sign hers. As to the charge of insubordination, it may be conceded, albeit unclear, that complainant failed to place same corrections/additional remarks in the Statement of Billings Adjustments as instructed. However, under the circumstances obtaining, where complainant strongly felt that she was being discriminated against by her superior in relation to other employees, we are of the considered view and so hold, that a reprimand would have sufficed for the infraction, but certainly not termination from services. 20 As this Court has ruled: ... where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's concern for the working man. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner. 21 Of course, in justifying Credo's termination of employment, NASECO claims as additional lawful causes for dismissal Credo's previous and repeated acts of insubordination, discourtesy and sarcasm towards her superior officers, alleged to have been committed from 1980 to July 1983. 22 If such acts of misconduct were indeed committed by Credo, they are deemed to have been condoned by NASECO. For instance, sometime in 1980, when Credo allegedly "reacted in a scandalous manner and raised her voice" in a discussion with NASECO's Acting
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head of the Personnel Administration 23 no disciplinary measure was taken or meted against her. Nor was she even reprimanded when she allegedly talked 'in a shouting or yelling manner" with the Acting Manager of NASECO's Building Maintenance and Services Department in 1980 24 or when she allegedly "shouted" at NASECO's Corporate Auditor "in front of his subordinates displaying arrogance and unruly behavior" in 1980, or when she allegedly shouted at NASECO's Internal Control Consultant in 1981. 25But then, in sharp contrast to NASECO's penchant for ignoring the aforesaid acts of misconduct, when Credo committed frequent tardiness in August and September 1983, she was reprimanded. 26 Even if the allegations of improper conduct (discourtesy to superiors) were satisfactorily proven, NASECO's condonation thereof is gleaned from the fact that on 4 October 1983, Credo was given a salary adjustment for having performed in the job "at least [satisfactorily]" 27 and she was then rated "Very Satisfactory" 28as regards job performance, particularly in terms of quality of work, quantity of work, dependability, cooperation, resourcefulness and attendance. Considering that the acts or omissions for which Credo's employment was sought to be legally terminated were insufficiently proved, as to justify dismissal, reinstatement is proper. For "absent the reason which gave rise to [the employee's] separation from employment, there is no intention on the part of the employer to dismiss the employee concerned." 29 And, as a result of having been wrongfully dismissed, Credo is entitled to three (3) years of backwages without deduction and qualification. 30 However, while Credo's dismissal was effected without procedural fairness, an award of exemplary damages in her favor can only be justified if her dismissal was effected in a wanton, fraudulent, oppressive or malevolent manner. 31 A judicious examination of the record manifests no such conduct on the part of management. However, in view of the attendant circumstances in the case, i.e., lack of due process in effecting her dismissal, it is reasonable to award her moral damages. And, for having been compelled to litigate because of the unlawful actuations of NASECO, a reasonable award for attorney's fees in her favor is in order. In NASECO's comment 32 in G.R. No. 70295, it is belatedly argued that the NLRC has no jurisdiction to order Credo's reinstatement. NASECO claims that, as a government corporation (by virtue of its being a subsidiary of the National Investment and Development Corporation (NIDC), a subsidiary wholly owned by the Philippine National Bank (PNB), which in turn is a government owned corporation), the terms and conditions of employment of its employees are governed by the Civil Service Law, rules and regulations. In support of this argument, NASECO cites National Housing Corporation vs. JUCO, 33 where this Court held that "There should no longer be any question at this time that employees of government-owned or controlled corporations are governed by the civil service law and civil service rifles and regulations." It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the same 1973 Constitution ,but prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government owned or controlled corporations, among them, the National Service Corporation (NASECO). 34 Furthermore, in the matter of coverage by the civil service of government-owned or controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon which National Housing Corporation vs. Juco is based. Under the 1973 Constitution, it was provided that: The civil service embraces every branch, agency, subdivision, and instrumentality of the Government, including every governmentowned or controlled corporation. ... 35 On the other hand, the 1987 Constitution provides that: The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. 36 (Emphasis supplied) Thus, the situations sought to be avoided by the 1973 Constitution and expressed by the Court in the National Housing . Corporation case in the following manner The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the constitution. It would be possible for a regular ministry of government to create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restrains of the open market nor to the terms and conditions of civil service employment. Conceivably, all government-owned or controlled corporations could be created, no longer by special charters, but through incorporations under the general law. The Constitutional amendment including such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist. 37 appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces government-owned or controlled corporations with original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law. The proceedings in the 1986 Constitutional Commission also shed light on the Constitutional intent and meaning in the use of the phrase "with original charter." Thus THE PRESIDING OFFICER (Mr. Trenas) Commissioner Romulo is recognized. MR. ROMULO. I beg the indulgence of the Committee. I was reading the wrong provision. I refer to Section 1, subparagraph I which reads:
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The Civil Service embraces all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or controlled corporations. My query: Is Philippine Airlines covered by this provision? MR. FOZ. Will the Commissioner please state his previous question? MR. ROMULO. The phrase on line 4 of Section 1, subparagraph 1, under the Civil Service Commission, says: "including governmentowned or controlled corporations.' Does that include a corporation, like the Philippine Airlines which is government-owned or controlled? MR. FOZ. I would like to throw a question to the Commissioner. Is the Philippine Airlines controlled by the government in the sense that the majority of stocks are owned by the government? MR. ROMULO. It is owned by the GSIS. So, this is what we might call a tertiary corporation. The GSIS is owned by the government. Would this be covered because the provision says "including government-owned or controlled corporations." MR. FOZ. The Philippine Airlines was established as a private corporation. Later on, the government, through the GSIS, acquired the controlling stocks. Is that not the correct situation? MR. ROMULO. That is true as Commissioner Ople is about to explain. There was apparently a Supreme Court decision that destroyed that distinction between a government-owned corporation created under the Corporation Law and a government-owned corporation created by its own charter. MR. FOZ. Yes, we recall the Supreme Court decision in the case of NHA vs. Juco to the effect that all government corporations irrespective of the manner of creation, whether by special charter or by the private Corporation Law, are deemed to be covered by the civil service because of the wide-embracing definition made in this section of the existing 1973 Constitution. But we recall the response to the question of Commissioner Ople that our intendment in this provision is just to give a general description of the civil service. We are not here to make any declaration as to whether employees of government-owned or controlled corporations are barred from the operation of laws, such as the Labor Code of the Philippines. MR. ROMULO. Yes. MR. OPLE. May I be recognized, Mr. Presiding Officer, since my name has been mentioned by both sides. MR. ROMULO. I yield part of my time. THE PRESIDING OFFICER (Mr.Trenas). Commissioner Ople is recognized. MR. OPLE. In connection with the coverage of the Civil Service Law in Section 1 (1), may I volunteer some information that may be helpful both to the interpellator and to the Committee. Following the proclamation of martial law on September 21, 1972, this issue of the coverage of the Labor Code of the Philippines and of the Civil Service Law almost immediately arose. I am, in particular, referring to the period following the coming into force and effect of the Constitution of 1973, where the Article on the Civil Service was supposed to take immediate force and effect. In the case of LUZTEVECO, there was a strike at the time. This was a government-controlled and government-owned corporation. I think it was owned by the PNOC with just the minuscule private shares left. So, the Secretary of Justice at that time, Secretary Abad Santos, and myself sat down, and the result of that meeting was an opinion of the Secretary of Justice which 9 became binding immediately on the government that government corporations with original charters, such as the GSIS, were covered by the Civil Service Law and corporations spun off from the GSIS, which we called second generation corporations functioning as private subsidiaries, were covered by the Labor Code. Samples of such second generation corporations were the Philippine Airlines, the Manila Hotel and the Hyatt. And that demarcation worked very well. In fact, all of these companies I have mentioned as examples, except for the Manila Hotel, had collective bargaining agreements. In the Philippine Airlines, there were, in fact, three collective bargaining agreements; one, for the ground people or the PALIA one, for the flight attendants or the PASAC and one for the pilots of the ALPAC How then could a corporation like that be covered by the Civil Service law? But, as the Chairman of the Committee pointed out, the Supreme Court decision in the case of NHA vs. Juco unrobed the whole thing. Accordingly, the Philippine Airlines, the Manila Hotel and the Hyatt are now considered under that decision covered by the Civil Service Law. I also recall that in the emergency meeting of the Cabinet convened for this purpose at the initiative of the Chairman of the Reorganization Commission, Armand Fabella, they agreed to allow the CBA's to lapse before applying the full force and effect of the Supreme Court decision. So, we were in the awkward situation when the new government took over. I can agree with Commissioner Romulo when he said that this is a problem which I am not exactly sure we should address in the deliberations on the Civil Service Law or whether we should be content with what the Chairman said that Section 1 (1) of the Article on the Civil Service is just a general description of the coverage of the Civil Service and no more. Thank you, Mr. Presiding Officer. MR. ROMULO. Mr. Presiding Officer, for the moment, I would be satisfied if the Committee puts on records that it is not their intent by this provision and the phrase "including government-owned or controlled corporations" to cover such companies as the Philippine Airlines. MR. FOZ. Personally, that is my view. As a matter of fact, when this draft was made, my proposal was really to eliminate, to drop from the provision, the phrase "including government- owned or controlled corporations." MR. ROMULO. Would the Committee indicate that is the intent of this provision? MR. MONSOD. Mr. Presiding Officer, I do not think the Committee can make such a statement in the face of an absolute exclusion of government-owned or controlled corporations. However, this does not preclude the Civil Service Law to prescribe different rules and procedures, including emoluments for employees of proprietary corporations, taking into consideration the nature of their operations. So, it is a general coverage but it does not preclude a distinction of the rules between the two types of enterprises. MR. FOZ. In other words, it is something that should be left to the legislature to decide. As I said before, this is just a general description and we are not making any declaration whatsoever. MR. MONSOD. Perhaps if Commissioner Romulo would like a definitive understanding of the coverage and the Gentleman wants to exclude government-owned or controlled corporations like Philippine Airlines, then the recourse is to offer an amendment as to the coverage, if the Commissioner does not accept the explanation that there could be a distinction of the rules, including salaries and emoluments. MR. ROMULO. So as not to delay the proceedings, I will reserve my right to submit such an amendment. xxx xxx xxx THE PRESIDING OFFICE (Mr. Trenas) Commissioner Romulo is recognized. MR. ROMULO. On page 2, line 5, I suggest the following amendment after "corporations": Add a comma (,) and the phrase EXCEPT THOSE EXERCISING PROPRIETARY FUNCTIONS. THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say? SUSPENSION OF SESSION MR. MONSOD. May we have a suspension of the session?
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THE PRESIDING OFFICER (Mr. Trenas). The session is suspended. It was 7:16 p.m. RESUMPTION OF SESSION At 7:21 p.m., the session was resumed. THE PRESIDING OFFICER (Mr. Trenas). The session is resumed. Commissioner Romulo is recognized. MR. ROMULO. Mr. Presiding Officer, I am amending my original proposed amendment to now read as follows: "including governmentowned or controlled corporations WITH ORIGINAL CHARTERS." The purpose of this amendment is to indicate that government corporations such as the GSIS and SSS, which have original charters, fall within the ambit of the civil service. However, corporations which are subsidiaries of these chartered agencies such as the Philippine Airlines, Manila Hotel and Hyatt are excluded from the coverage of the civil service. THE PRESIDING OFFICER (Mr. Trenas). What does the Committee say? MR. FOZ. Just one question, Mr. Presiding Officer. By the term "original charters," what exactly do we mean? MR. ROMULO. We mean that they were created by law, by an act of Congress, or by special law. MR. FOZ. And not under the general corporation law. MR. ROMULO. That is correct. Mr. Presiding Officer. MR. FOZ. With that understanding and clarification, the Committee accepts the amendment. MR. NATIVIDAD. Mr. Presiding officer, so those created by the general corporation law are out. MR. ROMULO. That is correct: 38 On the premise that it is the 1987 Constitution that governs the instant case because it is the Constitution in place at the time of decision thereof, the NLRC has jurisdiction to accord relief to the parties. As an admitted subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a government-owned or controlled corporation without original charter. Dr. Jorge Bocobo, in his Cult of Legalism, cited by Mr. Justice Perfecto in his concurring opinion in Gomez vs. Government Insurance Board (L-602, March 31, 1947, 44 O.G. No. 8, pp. 2687, 2694; also published in 78 Phil. 221) on the effectivity of the principle of social justice embodied in the 1935 Constitution, said: Certainly, this principle of social justice in our Constitution as generously conceived and so tersely phrased, was not included in the fundamental law as a mere popular gesture. It was meant to (be) a vital, articulate, compelling principle of public policy. It should be observed in the interpretation not only of future legislation, but also of all laws already existing on November 15, 1935. It was intended to change the spirit of our laws, present and future. Thus, all the laws which on the great historic event when the Commonwealth of the Philippines was born, were susceptible of two interpretations strict or liberal, against or in favor of social justice, now have to be construed broadly in order to promote and achieve social justice. This may seem novel to our friends, the advocates of legalism but it is the only way to give life and significance to the above-quoted principle of the Constitution. If it was not designed to apply to these existing laws, then it would be necessary to wait for generations until all our codes and all our statutes shall have been completely charred by removing every provision inimical to social justice, before the policy of social justice can become really effective. That would be an absurd conclusion. It is more reasonable to hold that this constitutional principle applies to all legislation in force on November 15, 1935, and all laws thereafter passed. WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is AFFIRMED with modifications. Petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295, are ordered to: 1) reinstate Eugenia C. Credo to her former position at the time of her termination, or if such reinstatement is not possible, to place her in a substantially equivalent position, with three (3) years backwages, from 1 December 1983, without qualification or deduction, and without loss of seniority rights and other privileges appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for moral damages and P5,000.00 for attorney's fees. If reinstatement in any event is no longer possible because of supervening events, petitioners in G.R. No. 69870, who are the private respondents in G.R. No. 70295 are ordered to pay Eugenia C. Credo, in addition to her backwages and damages as above described, separation pay equivalent to one-half month's salary for every year of service, to be computed on her monthly salary at the time of her termination on 1 December 1983. SO ORDERED. Fernan, C.J., Melencio-Herrera, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur. Narvasa, J., is on leave. Gutierrez, Jr., J., in the result. Separate Opinions CRUZ, J., concurring: While concurring with Mr. Justice Padilla's well-researched ponencia, I have to express once again my disappointment over still another avoidable ambiguity in the 1987 Constitution. It is clear now from the debates of the Constitutional Commission that the government-owned or controlled corporations included in the Civil Service are those with legislative charters. Excluded are its subsidiaries organized under the Corporation Code. If that was the intention, the logical thing, I should imagine, would have been to simply say so. This would have avoided the suggestion that there are corporations with duplicate charters as distinguished from those with original charters. All charters are original regardless of source unless they are amended. That is the acceptable distinction. Under the provision, however, the charter is still and always original even if amended as long it was granted by the legislature. It would have been clearer, I think, to say "including government owned or controlled corporations with legislative charters." Why this thought did not occur to the Constitutional Commission places one again in needless puzzlement.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 78909 June 30, 1989 MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs. THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DIRECTOR OF LABOR, REGION X, respondents. MEDIALDEA, J.: This is a petition for certiorari seeking the annulment of the Decision of the respondent Secretary of Labor dated September 24, 1986, affirming with modification the Order of respondent Regional Director of Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency cost of living allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's motion for reconsideration dated May 13, 1987, on the ground of grave abuse of discretion. Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86. On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p. 98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May, 1986, were duly submitted for inspection. On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that there was underpayment of wages and ECOLAs of all the employees by the petitioner, the dispositive portion of which reads: IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmed per review of the respondent payrolls and interviews with the complainant workers and all other information gathered by the team, it is respectfully recommended to the Honorable Regional Director, this office, that Antera Dorado, President be ORDERED to pay the amount of SIX HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX & 01/100 (P654,756.01), representing underpayment of wages and ecola to the THIRTY SIX (36) employees of the said hospital as appearing in the attached Annex "F" worksheets and/or whatever action equitable under the premises. (p. 99, Rollo) Based on this inspection report and recommendation, the Regional Director issued an Order dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages and ECOLAs to all the petitioner's employees, the dispositive portion of which reads: WHEREFORE, premises considered, respondent Maternity and Children Hospital is hereby ordered to pay the above-listed complainants the total amount indicated opposite each name, thru this Office within ten (10) days from receipt thereof. Thenceforth, the respondent hospital is also ordered to pay its employees/workers the prevailing statutory minimum wage and allowance. SO ORDERED. (p. 34, Rollo) Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the dispositive portion of which reads: WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiency wages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986. The case is remanded to the Regional Director, Region X, for recomputation specifying the amounts due each the complainants under each of the applicable Presidential Decrees. (p. 40, Rollo) On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by the Secretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo). The instant petition questions the all-embracing applicability of the award involving salary differentials and ECOLAS, in that it covers not only the hospital employees who signed the complaints, but also those (a) who are not signatories to the complaint, and (b) those who were no longer in the service of the hospital at the time the complaints were filed. Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as affirmed with modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts and the law on which the award was based. In its "Rejoinder to Comment", petitioner further questions the authority of the Regional Director to award salary differentials and ECOLAs to private respondents, (relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961, 1 SCRA 860, as authority for raising the additional issue of lack of jurisdiction at any stage of the proceedings, p. 52, Rollo), alleging that the original and exclusive jurisdiction over money claims is properly lodged in the Labor Arbiter, based on Article 217, paragraph 3 of the Labor Code.

The primary issue here is whether or not the Regional Director had jurisdiction over the case and if so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and enforcement powers under Article 128 of the Labor Code. The matter of whether or not the decision states clearly and distinctly statement of facts as well as the law upon which it is based, becomes relevant after the issue on jurisdiction has been resolved. This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). 1 Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned. Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority over money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus: . . . the Regional Director, in the exercise of his visitorial and enforcement powers under Article 128 of the Labor Code, has no authority to award money claims, properly falling within the jurisdiction of the labor arbiter. . . . . . . If the inspection results in a finding that the employer has violated certain labor standard laws, then the regional director must order the necessary rectifications. However, this does not include adjudication of money claims, clearly within the ambit of the labor arbiter's authority under Article 217 of the Code. The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of Labor, et al., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director was not empowered to share in the original and exclusive jurisdiction conferred on Labor Arbiters by Article 217." We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration system to the enforcement system. To clarify matters, it is necessary to enumerate a series of rules and provisions of law on the disposition of labor standards cases. Prior to the promulgation of PD 850, labor standards cases were an exclusive function of labor arbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which read in part: Art. 216. Jurisdiction of the Commission. The Commission shall have exclusive appellate jurisdiction over all cases decided by the Labor Arbiters and compulsory arbitrators. The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers whether agricultural or non-agricultural. xxx xxx xxx (c) All money claims of workers, involving non-payment or underpayment of wages, overtime compensation, separation pay, maternity leave and other money claims arising from employee-employer relations, except claims for workmen's compensation, social security and medicare benefits; (d) Violations of labor standard laws; xxx xxx xxx (Emphasis supplied) The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows: ART. 127. Visitorial Powers. The Secretary of Labor or his duly authorized representatives, including, but not restricted, to the labor inspectorate, shall have access to employers' records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or in aid in the enforcement of this Title and of any Wage Order or regulation issued pursuant to this Code. With the promulgation of PD 850, Regional Directors were given enforcement powers, in addition to visitorial powers. Article 127, as amended, provided in part: SEC. 10. Article 127 of the Code is hereby amended to read as follows: Art. 127. Visitorial and enforcement powers. xxx xxx xxx (b) The Secretary of Labor or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order. xxx xxx xxx Labor Arbiters, on the other hand, lost jurisdiction over labor standards cases. Article 216, as then amended by PD 850, provided in part: SEC. 22. Article 216 of the Code is hereby amended to read as follows: Art. 216. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-agricultural: xxx xxx xxx (3) All money claims of workers involving non-payment or underpayment of wages, overtime or premium compensation, maternity or service incentive leave, separation pay and other money claims arising from employer-employee relations, except claims for employee's compensation, social security and medicare benefits and as otherwise provided in Article 127 of this Code. xxx xxx xxx (Emphasis supplied) Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by PD 850), there were three adjudicatory units: The Regional Director, the Bureau of Labor Relations and the Labor Arbiter. It became necessary to clarify and consolidate all
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governing provisions on jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions No. 6 was issued, and provides in part (on labor standards cases) as follows: POLICY INSTRUCTIONS NO. 6 TO: All Concerned SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES xxx xxx xxx 1. The following cases are under the exclusive original jurisdiction of the Regional Director. a) Labor standards cases arising from violations of labor standard laws discovered in the course of inspection or complaints where employer-employee relations still exist; xxx xxx xxx 2. The following cases are under the exclusive original jurisdiction of the Conciliation Section of the Regional Office: a) Labor standards cases where employer-employee relations no longer exist; xxx xxx xxx 6. The following cases are certifiable to the Labor Arbiters: a) Cases not settled by the Conciliation Section of the Regional Office, namely: 1) labor standard cases where employer-employee relations no longer exist; xxx xxx xxx (Emphasis supplied) MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the rationale for, and the scope of, the enforcement power of the Regional Director, the first and second paragraphs of which provide as follows: POLICY INSTRUCTIONS NO. 7 TO: All Regional Directors SUBJECT: LABOR STANDARDS CASES Under PD 850, labor standards cases have been taken from the arbitration system and placed under the enforcement system, except where a) questions of law are involved as determined by the Regional Director, b) the amount involved exceeds P100,000.00 or over 40% of the equity of the employer, whichever is lower, c) the case requires evidentiary matters not disclosed or verified in the normal course of inspection, or d) there is no more employer-employee relationship. The purpose is clear: to assure the worker the rights and benefits due to him under labor standards laws without having to go through arbitration. The worker need not litigate to get what legally belongs to him . The whole enforcement machinery of the Department of Labor exists to insure its expeditious delivery to him free of charge. (Emphasis supplied) Under the foregoing, a complaining employee who was denied his rights and benefits due him under labor standards law need not litigate. The Regional Director, by virtue of his enforcement power, assured "expeditious delivery to him of his rights and benefits free of charge", provided of course, he was still in the employ of the firm. After PD 850, Article 216 underwent a series of amendments (aside from being re-numbered as Article 217) and with it a corresponding change in the jurisdiction of, and supervision over, the Labor Arbiters: 1. PD 1367 (5-1-78) gave Labor Arbiters exclusive jurisdiction over unresolved issues in collective bargaining, etc., and those cases arising from employer-employee relations duly indorsed by the Regional Directors. (It also removed his jurisdiction over moral or other damages) In other words, the Labor Arbiter entertained cases certified to him. (Article 228, 1978 Labor Code.) 2. PD 1391 (5-29-78) all regional units of the National Labor Relations Commission (NLRC) were integrated into the Regional Offices Proper of the Ministry of Labor; effectively transferring direct administrative control and supervision over the Arbitration Branch to the Director of the Regional Office of the Ministry of Labor. "Conciliable cases" which were thus previously under the jurisdiction of the defunct Conciliation Section of the Regional Office for purposes of conciliation or amicable settlement, became immediately assignable to the Arbitration Branch for joint conciliation and compulsory arbitration. In addition, the Labor Arbiter had jurisdiction even over termination and labor-standards cases that may be assigned to them for compulsory arbitration by the Director of the Regional Office. PD 1391 merged conciliation and compulsory arbitration functions in the person of the Labor Arbiter. The procedure governing the disposition of cases at the Arbitration Branch paralleled those in the Special Task Force and Field Services Division, with one major exception: the Labor Arbiter exercised full and untrammelled authority in the disposition of the case, particularly in the substantive aspect, his decisions and orders subject to review only on appeal to the NLRC. 3 3. MOLE Policy Instructions No. 37 Because of the seemingly overlapping functions as a result of PD 1391, MOLE Policy Instructions No. 37 was issued on October 7, 1978, and provided in part: POLICY INSTRUCTIONS NO. 37 TO: All Concerned SUBJECT: ASSIGNMENT OF CASES TO LABOR ARBITERS Pursuant to the provisions of Presidential Decree No. 1391 and to insure speedy disposition of labor cases, the following guidelines are hereby established for the information and guidance of all concerned. 1. Conciliable Cases. Cases which are conciliable per se i.e., (a) labor standards cases where employer-employee relationship no longer exists; (b) cases involving deadlock in collective bargaining, except those falling under P.D. 823, as amended; (c) unfair labor practice cases; and (d) overseas employment cases, except those involving overseas seamen, shall be assigned by the Regional Director to the Labor Arbiter for conciliation and arbitration without coursing them through the conciliation section of the Regional Office. 2. Labor Standards Cases. Cases involving violation of labor standards laws where employer- employee relationship still exists shall be assigned to the Labor Arbiters where: a) intricate questions of law are involved; or b) evidentiary matters not disclosed or verified in the normal course of inspection by labor regulations officers are required for their proper disposition. 3. Disposition of Cases.
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When a case is assigned to a Labor Arbiter, all issues raised therein shall be resolved by him including those which are originally cognizable by the Regional Director to avoid multiplicity of proceedings. In other words, the whole case, and not merely issues involved therein, shall be assigned to and resolved by him. xxx xxx xxx (Emphasis supplied) 4. PD 1691(5-1-80) original and exclusive jurisdiction over unresolved issues in collective bargaining and money claims, which includes moral or other damages. Despite the original and exclusive jurisdiction of labor arbiters over money claims, however, the Regional Director nonetheless retained his enforcement power, and remained empowered to adjudicate uncontested money claims. 5. BP 130 (8-21-8l) strengthened voluntary arbitration. The decree also returned the Labor Arbiters as part of the NLRC, operating as Arbitration Branch thereof. 6. BP 227(6-1- 82) original and exclusive jurisdiction over questions involving legality of strikes and lock-outs. The present petition questions the authority of the Regional Director to issue the Order, dated August 4, 1986, on the basis of his visitorial and enforcement powers under Article 128 (formerly Article 127) of the present Labor Code. It is contended that based on the rulings in the Ong vs. Parel (supra) and the Zambales Base Metals, Inc. vs. The Minister of Labor (supra) cases, a Regional Director is precluded from adjudicating money claims on the ground that this is an exclusive function of the Labor Arbiter under Article 217 of the present Code. On August 4, 1986, when the order was issued, Article 128(b) 4 read as follows: (b) The Minister of Labor or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their order, except in cases where the employer contests the findings of the labor regulations officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. (Emphasis supplied) On the other hand, Article 217 of the Labor Code as amended by P.D. 1691, effective May 1, 1980; Batas Pambansa Blg. 130, effective August 21, 1981; and Batas Pambansa Blg. 227, effective June 1, 1982, inter alia, provides: ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case by the parties for decision, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Those that workers may file involving wages, hours of work and other terms and conditions of employment; 3. All money claims of workers, including those based on non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate agreement, except claims for employees' compensation, social security, medicare and maternity benefits; 4. Cases involving household services; and 5. Cases arising from any violation of Article 265 of this Code, including questions involving the legality of strikes and lock-outs. (Emphasis supplied) The Ong and Zambales cases involved workers who were still connected with the company. However, in the Ong case, the employer disputed the adequacy of the evidentiary foundation (employees' affidavits) of the findings of the labor standards inspectors while in the Zambales case, the money claims which arose from alleged violations of labor standards provisions were not discovered in the course of normal inspection. Thus, the provisions of MOLE Policy Instructions Nos. 6, (Distribution of Jurisdiction Over Labor Cases) and 37 (Assignment of Cases to Labor Arbiters) giving Regional Directors adjudicatory powers over uncontested money claims discovered in the course of normal inspection, provided an employer-employee relationship still exists, are inapplicable. In the present case, petitioner admitted the charge of underpayment of wages to workers still in its employ; in fact, it pleaded for time to raise funds to satisfy its obligation. There was thus no contest against the findings of the labor inspectors. Barely less than a month after the promulgation on November 26, 1986 of the Zambales Base Metals case, Executive Order No. 111 was issued on December 24, 1986, 5 amending Article 128(b) of the Labor Code, to read as follows: (b) THE PROVISIONS OF ARTICLE 217 OF THIS CODE TO THE CONTRARY NOTWITHSTANDING AND IN CASES WHERE THE RELATIONSHIP OF EMPLOYER-EMPLOYEE STILL EXISTS, the Minister of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code AND OTHER LABOR LEGISLATION based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection, and to issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. (Emphasis supplied) As seen from the foregoing, EO 111 authorizes a Regional Director to order compliance by an employer with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion however, that the inclusion of the phrase, " The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists" ... in Article 128(b), as amended, above-cited, merely confirms/reiterates the enforcement adjudication authority of the Regional Director over uncontested money claims in cases where an employer-employee relationship still exists. 6 Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor authorities to provide our workers immediate access (when still feasible, as where an employer-employee relationship still exists) to their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve-wracking, but financially burdensome in the long run.
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Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of labor standards cases from the arbitration system to the enforcement system is . . to assure the workers the rights and benefits due to him under labor standard laws, without having to go through arbitration. . . so that . . the workers would not litigate to get what legally belongs to him. .. ensuring delivery . . free of charge. Social justice legislation, to be truly meaningful and rewarding to our workers, must not be hampered in its application by long-winded arbitration and litigation. Rights must be asserted and benefits received with the least inconvenience. Labor laws are meant to promote, not defeat, social justice. This view is in consonance with the present "Rules on the Disposition of Labor Standard Cases in the Regional Offices " 7 issued by the Secretary of Labor, Franklin M. Drilon on September 16, 1987. Thus, Sections 2 and 3 of Rule II on "Money Claims Arising from Complaint Routine Inspection", provide as follows: Section 2. Complaint inspection. All such complaints shall immediately be forwarded to the Regional Director who shall refer the case to the appropriate unit in the Regional Office for assignment to a Labor Standards and Welfare Officer (LSWO) for field inspection. When the field inspection does not produce the desired results, the Regional Director shall summon the parties for summary investigation to expedite the disposition of the case. . . . Section 3. Complaints where no employer-employee relationship actually exists. Where employer-employee relationship no longer exists by reason of the fact that it has already been severed, claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. . . . (Emphasis supplied) Likewise, it is also clear that the limitation embodied in MOLE Policy Instructions No. 7 to amounts not exceeding P100,000.00 has been dispensed with, in view of the following provisions of pars. (b) and (c), Section 7 on "Restitution", the same Rules, thus: xxx xxx xxx (b) Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand (P50,000.00). . . . (c) Restitutions in excess of the aforementioned amount shall be effected at the Regional Office or at the worksite subject to the prior approval of the Regional Director. which indicate the intention to empower the Regional Director to award money claims in excess of P100,000.00;provided of course the employer does not contest the findings made, based on the provisions of Section 8 thereof: Section 8. Compromise agreement. Should the parties arrive at an agreement as to the whole or part of the dispute, said agreement shall be reduced in writing and signed by the parties in the presence of the Regional Director or his duly authorized representative. E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases where an employer-employee relationship still exists. This intention must be given weight and entitled to great respect. As held in Progressive Workers' Union, et. al. vs. F.P. Aguas, et. al. G.R. No. 59711-12, May 29, 1985, 150 SCRA 429: . . The interpretation by officers of laws which are entrusted to their administration is entitled to great respect. We see no reason to detract from this rudimentary rule in administrative law, particularly when later events have proved said interpretation to be in accord with the legislative intent. .. The proceedings before the Regional Director must, perforce, be upheld on the basis of Article 128(b) as amended by E.O. No. 111, dated December 24, 1986, this executive order "to be considered in the nature of a curative statute with retrospective application." (Progressive Workers' Union, et al. vs. Hon. F.P. Aguas, et al. ( Supra); M. Garcia vs. Judge A. Martinez, et al., G.R. No. L- 47629, May 28, 1979, 90 SCRA 331). We now come to the question of whether or not the Regional Director erred in extending the award to all hospital employees. We answer in the affirmative. The Regional Director correctly applied the award with respect to those employees who signed the complaint, as well as those who did not sign the complaint, but were still connected with the hospital at the time the complaint was filed (See Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de Susi, p. 33, Rollo). The justification for the award to this group of employees who were not signatories to the complaint is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable over establishments, not over the individual members/employees, because what is sought to be achieved by its exercise is the observance of, and/or compliance by, such firm/establishment with the labor standards regulations. Necessarily, in case of an award resulting from a violation of labor legislation by such establishment, the entire members/employees should benefit therefrom. As aptly stated by then Minister of Labor Augusto S. Sanchez: . . It would be highly derogatory to the rights of the workers, if after categorically finding the respondent hospital guilty of underpayment of wages and ECOLAs, we limit the award to only those who signed the complaint to the exclusion of the majority of the workers who are similarly situated. Indeed, this would be not only render the enforcement power of the Minister of Labor and Employment nugatory, but would be the pinnacle of injustice considering that it would not only discriminate but also deprive them of legislated benefits. . . . (pp. 38-39, Rollo). This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of Labor Standards cases in the Regional Offices" (supra) presently enforced, viz: SECTION 6. Coverage of complaint inspection. A complaint inspection shall not be limited to the specific allegations or violations raised by the complainants/workers but shall be a thorough inquiry into and verification of the compliance by employer with existing labor standards and shall cover all workers similarly situated. (Emphasis supplied)
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However, there is no legal justification for the award in favor of those employees who were no longer connected with the hospital at the time the complaint was filed, having resigned therefrom in 1984, viz: Jean (Joan) Venzon (See Order, p. 33, Rollo) Rosario Paclijan Adela Peralta Mauricio Nagales Consesa Bautista Teresita Agcopra Felix Monleon Teresita Salvador Edgar Cataluna; and Raymond Manija ( p.7, Rollo) The enforcement power of the Regional Director cannot legally be upheld in cases of separated employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said article is in aid of the enforcement power of the Regional Director; hence, not applicable where the employee seeking to be paid underpayment of wages is already separated from the service. His claim is purely a money claim that has to be the subject of arbitration proceedings and therefore within the original and exclusive jurisdiction of the Labor Arbiter. Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it does not clearly and distinctly state the facts and the law on which the award is based. We invite attention to the Minister of Labor's ruling thereon, as follows: Finally, the respondent hospital assails the order under appeal as null and void because it does not clearly and distinctly state the facts and the law on which the awards were based. Contrary to the pretensions of the respondent hospital, we have carefully reviewed the order on appeal and we found that the same contains a brief statement of the (a) facts of the case; (b) issues involved; (c) applicable laws; (d) conclusions and the reasons therefor; (e) specific remedy granted (amount awarded). (p. 40, Rollo) ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as regards those employees no longer employed at that time. SO ORDERED. Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino and Regalado, JJ., concur. Separate Opinions SARMIENTO, J., concurring: Subject to my opinion in G.R. Nos. 82805 and 83205. MELENCIO-HERRERA, J., concurring: I concur, with the observation that even as reconciled, it would seem inevitable to state that the conclusion in the Zambales and Ong cases that, prior to Executive Order No. 111, Regional Directors were not empowered to share the original and exclusive jurisdiction conferred on Labor Arbiters over money claims, is now deemed modified, if not superseded. It may not be amiss to state either that under Section 2, Republic Act No. 6715, which amends further the Labor Code of the Philippines (PD No. 442), Regional Directors have also been granted adjudicative powers, albeit limited, over monetary claims and benefits of workers, thereby settling any ambiguity on the matter. Thus: SEC. 2. Article 129 of the Labor Code of the Philippines, as amended, is hereby further amended to read as follows: Art. 129. Recovery of wages, simple money claims and other benefits. Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or house helper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or house helper do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. ...

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-68147 June 30, 1988 AMADA RANCE, MERCEDES LACUESTA, MELBA GUTIERREZ, ESTER FELONGCO, CATALINO ARAGONES, CONSOLACION DE LA ROSA, AMANCIA GAY, EDUARDO MENDOZA, ET AL., petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION, POLYBAG MANUFACTURING CORPORATION, VIRGINIA MALLARI, JOHNNY LEE, ROMAS VILLAMIN, POLYBAG WORKERS UNION, PONCIANO FERNANDEZ, AND ANTONIO ANTIQUERA, respondents. PARAS, J.: A review of the records shows that a Collective Bargaining Agreement was entered into on April 30, 1981 by and between respondents Polybag Manufacturing Corporation and Polybag Workers Union which provides among others: ARTICLE V UNION SECURITY Any employee within the bargaining agreement who is a member of the union at the time of the effectivity of this agreement or becomes a member of the UNION thereafter, shall during the term thereof or any extention, continue to be a member in good standing of the UNION as a condition of continued employment in the COMPANY. Any employee hired during the effectivity of this agreement shall, within 30 days after becoming regular join the UNION and continue to be a member in good standing thereof as a condition of continued employment in the COMPANY. On the basis of a board resolution of the UNION, the COMPANY shall dismiss from the service any member of the UNION who loses his membership in good standing either by resignation therefrom or expulsion therefrom for any of the following causes: 1. Disloyalty to the UNION; 2. Commission of acts inimical to the interest of the UNION; 3. Failure and refusal to pay UNION dues and other assessments; 4. Conviction for any offense or crime; or 5. Organizing and/or joining another labor organization claiming jurisdiction similar to that of the UNION. Provided, however, that in case expulsion proceedings are instituted against any member of the UNION, pending such proceedings, the COMPANY, on the basis of a board resolution of the UNION, shall suspend the member concerned; and provided further, that the UNION, jointly and severally with the officers and members of the board voting for the dismissal or suspension, shall hold and render the COMPANY, its executive, owners, and officers free from any and all claims and liabilities. (Rollo, p. 64). Petitioners herein were among the members of the respondent union who were expelled by the latter for disloyalty in that they allegedly joined the NAFLU a large federation. Because of the expulsion, petitioners were dismissed by respondent Corporation. Petitioners sued for reinstatement and backwages stating their dismissal was without due process. Losing both in the decisions of the Labor Arbiter and the National Labor Relations Commission (NLRC), they elevated their cause to the Supreme Court. Respondent Polybag Workers Union as already stated expelled 125 members on the ground of disloyalty and acts inimical to the interests of the Union (Resolution No. 84, series of 1982, Rollo, p. 16) based on the findings and recommendations of the panel of investigators. Both the Labor Arbiter and the NLRC found the Collective Bargaining Agreement and the "Union Security Clause" valid and considered the termination of the petitioners justified thereunder, for having committed an act of disloyalty to the Polybag Workers Union by having affiliated with and having joined the NAFLU, another labor union claiming jurisdiction similar to the former, while still members of respondent union (Rollo, pp. 45-46). Among the disputed portions of the NLRC decision is its finding that it has been substantially proven that the petitioners committed acts of disloyalty to their union as a consequence of the filing by NAFLU for and in their behalf of the complaint in question (Rollo, p. 46). Petitioners insist that their expulsion from the Union and consequent dismissal from employment have no basis whether factual or legal, because they did not in fact affiliate themselves with another Union, the NAFLU. On the contrary, they claim that there is a connivance between respondents Company and Union in their illegal dismissal in order to avoid the payment of separation pay by respondent company. Petitioners' contention that they did not authorize NAFLU to file NLRC-AB Case No. 6-4275-82 for them is borne out by the records which show that they did not sign the complaint, neither did they sign any document of membership application with NAFLU (Rollo, p. 323). Significantly, none of private respondents was able to present any evidence to the contrary except for one employee who admitted having authorized NAFLU to file the complaint but only for the purpose of questioning the funds of the Union (Rollo, p. 216). Placed in proper perspective, the mere act of seeking help from the NAFLU cannot constitute disloyalty as contemplated in the Collective Bargaining Agreement. At most it was an act of self-preservation of workers who, driven to desperation found shelter in the NAFLU who took the cudgels for them. It will be recalled that 460 employees were temporarily laid off; some were laid-off as early as March 22, 1982 although the actual official announcement and notice of the intended shutdown was made only on May 27, 1982 (Rollo, p. 151). The laid-off employees did not receive any separation pay because as alleged by respondent company their dismissal was due to serious business reverses suffered by it. The only aid offered by the company which was offered when the disgruntled employees began to discuss among themselves their plight, was a 1/2 sack of rice monthly and P 50.00 weekly. Most of the employees did not avail themselves of the aid as those who did were allegedly made to sign blank papers. To aggravate matters, petitioners complained that their pleas for their union officers to fight for their right to reinstatement, fell on deaf ears. Their union leaders continued working and were not among those laid-off, which explains the lack of positive action on the part of the latter to help or even sympathize with the plight of the members. All they could
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offer was a statement "marunong pa kayo sa may-ari ng kumpanya" ("you know more than the company owners") (Rollo, p. 80). Under the circumstances, petitioners cannot be blamed for seeking help wherever it could be found. In fact even assuming that petitioners did authorize NAFLU to file the action for them, it would have been pointless because NAFLU cannot file an action for members of another union. The proper remedy would be to drop the union as party to the action and place the names of the employees instead (Lakas v. Marcelo Enterprises, 118 SCRA 422 [1982]) as what appears to have been done in this case before the Court. Petitioners claim that the NLRC erred in ruling that the expulsion proceeding conducted by the Union was in accordance with its bylaws. Respondent Union had notified and summoned herein petitioners to appear and explain why they should not be expelled from the union for having joined and affiliated with NAFLU. Petitioners contend that the requisites of due process were not complied with in that, there was no impartial tribunal or union body vested with authority to conduct the disciplinary proceeding under the union constitution and by-laws, and, that complainants were not furnished notice of the charge against them, nor timely notices of the hearings on the same (Rollo, p. 48). According to the minutes of the special meeting of the Board of Directors of respondent Union held on September 14, 1982, the Chairman of the Board of Directors showed the members of the board, copies of the minutes of the investigation proceedings of each individual member, together with a consolidated list of Union members found guilty as charged and recommended for expulsion as members of the respondent Union. The Board members examined the minutes and the list (Rollo, p. 219). It is to be noted, however, that only two (2) of the expelled petitioners appeared before the investigation panel (Rollo, pp. 203, 235). Most of the petitioners boycotted the investigation proceedings. They alleged that most of them did not receive the notice of summons from respondent Union because they were in the provinces. This fact was not disproved by private respondents who were able to present only a sample copy of proof of service, Annex "14" (Rollo, p. 215). Petitioners further claim that they had no Idea that they were charged with disloyalty; those who came were not only threatened with persecution but also made to write the answers to questions as dictated to them by the Union and company representatives. These untoward incidents prompted petitioners to request for a general investigation with all the petitioners present but their request was ignored by the panel of investigators (Rollo, pp. 280, 307). Again, these allegations were not denied by private respondents. In any event, even if petitioners who were complainants in NLRC-AB Case No. 6-4275-82 appeared in the supposed investigation proceedings to answer the charge of disloyalty against them, it could not have altered the fact that the proceedings were violative of the elementary rule of justice and fair play. The Board of Directors of respondent union would have acted as prosecutor, investigator and judge at the same time. The proceeding would have been a farce under the circumstances (Lit Employees Association v. Court of Industrial Relations, 116 SCRA 459 [1982] citing Kapisanan ng Mga Manggagawa sa MRR v. Rafael Hernandez, 20 SCRA 109). The filing of the charge of disloyalty against petitioners was instigated by the Chairman of the Board of Directors and Acting Union President, Ponciano Fernandez, in the special meeting of the members of the Board of Directors as convened by the Union President on August 16, 1982 (Rollo, p. 213). The Panel of Investigators created under the Board's Resolution No. 83, s. 1982 was composed of the Chairman of the Board, Ponciano Fernandez, and two (2) members of the Board, Samson Yap and Carmen Garcia (Rollo, p. 214). It is the same Board that expelled its 125 members in its Resolution No. 84, s. of 1982 (Rollo, p. 219). All told, it is obvious, that in the absence of any full blown investigation of the expelled members of the Union by an impartial body, there is no basis for respondent Union's accusations. It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social justice. When a person has no property, his job may possibly be his only possession or means of livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 of the Labor Code has construed security of tenure as meaning that "the employer shall not terminate the services of an employee except for a just cause or when authorized by" the code (Bundoc v. People's Bank and Trust Company, 103 SCRA 599 [1981]). Dismissal is not justified for being arbitrary where the workers were denied due process (Reyes v. Philippine Duplicators, Inc., 109 SCRA 489 [1981] and a clear denial of due process, or constitutional right must be safeguarded against at all times, (De Leon v. National Labor Relations Commission, 100 SCRA 691 [1980]). This is especially true in the case at bar where there were 125 workers mostly heads or sole breadwinners of their respective families. Time and again, this Court has reminded employers that while the power to dismiss is a normal prerogative of the employer, the same is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement, as in the instant case. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to labor (Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 90 SCRA 393 [1979], Resolution). In the case at bar, the scandalous haste with which respondent corporation dismissed 125 employees lends credence to the claim that there was connivance between respondent corporation and respondent Union. It is evident that private respondents were in bad faith in dismissing petitioners. They, the private respondents, are guilty of unfair labor practice. PREMISES CONSIDERED, (1) the decision of respondent National Labor Relations Commission in NLRC-NCR-11-6881-82 dated April 26, 1984 is REVERSED and SET ASIDE; and (2) respondent corporation is ordered: (1) to reinstate petitioners to their former positions without reduction in rank, seniority and salary; (b) to pay petitioners three-year backwages, without any reduction or qualification, jointly and solidarily with respondent Union; and (c) to pay petitioners exemplary damages of P500.00 each. Where reinstatement is no longer feasible, respondent corporation and respondent union are solidarily ordered to pay, considering their length of service their corresponding separation pay and other benefits to which they are entitled under the law. SO ORDERED.
13

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 144664 March 15, 2004 ASIAN TRANSMISSION CORPORATION, petitioner, vs. The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN as Voluntary Arbitrator, KISHIN A. LALWANI, Union, Union representative to the Panel Arbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T. LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR CHITA G. CILINDRO in her capacity as Director of Bureau of Working Conditions, respondents. DECISION CARPIO-MORALES, J.: Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure the nullification of the March 28, 2000 Decision1 of the Court of Appeals denying its petition to annul 1) the March 11, 1993 "Explanatory Bulletin"2 of the Department of Labor and Employment (DOLE) entitled "Workers Entitlement to Holiday Pay on April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31, 1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998, and 3) the September 18, 19984 Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration. The following facts, as found by the Court of Appeals, are undisputed: The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. The bulletin reads: "On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date as Araw ng Kagitingan. Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan x x x x Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested. In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x x x On July 31, 1998,the Office of the Voluntary Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday." (Emphasis and underscoring supplied) Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads: ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election, which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now: 1. New Years Day January 1 2. Maundy Thursday Movable Date 3. Good Friday Movable Date 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day) 5. Labor Day May 1 6. Independence Day June 12 7. National Heroes Day Last Sunday of August 8. Bonifacio Day November 30 9. Christmas Day December 25 10. Rizal Day December 30 In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday." In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during
14

the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated."5 The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code provisions on holiday pay must be resolved in favor of labor." By the present petition, petitioners raise the following issues: I WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES THEMSELVES II WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN III WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE IV WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW V WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY VI WHETHER OR NOT RESPONDENTS ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS The petition is devoid of merit. At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65. [S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. xxx For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy. 6 The records of the case show that following petitioners receipt on August 18, 2000 of a copy of the A ugust 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000, at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having expired. Technicality aside, this Court finds no ground to disturb the assailed decision. Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." 8 It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance. Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
15

As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. 9 The provision is mandatory,10 regardless of whether an employee is paid on a monthly or daily basis. 11Unlike a bonus, which is a management prerogative,12 holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says.13 In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day. Petitioners assertion that Wellington v. Trajano14 has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees are entitled to an additional days pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day.15 In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For th e working mans welfare should be the primordial and paramount consideration.16 Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy."17 From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the following provision: ARTICLE XIV PAID LEGAL HOLIDAYS The following legal holidays shall be paid by the COMPANY as required by law: 1. New Years Day (January 1st) 2. Holy Thursday (moveable) 3. Good Friday (moveable) 4. Araw ng Kagitingan (April 9th) 5. Labor Day (May 1st) 6. Independence Day (June 12th) 7. Bonifacio Day [November 30] 8. Christmas Day (December 25th) 9. Rizal Day (December 30th) 10. General Election designated by law, if declared public non-working holiday 11. National Heroes Day (Last Sunday of August) Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay. A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation pay but will not entitle the employee to another vacation leave. Under similar circumstances, the COMPANY will give a days wage f or November 1st and December 31st whenever declared a holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof. 18 WHEREFORE, the petition is hereby DISMISSED. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-52415 October 23, 1984 INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU), petitioner, vs. HON. AMADO G. INCIONG, Deputy Minister, Ministry of Labor and INSULAR BANK OF ASIA AND AMERICA, respondents. Sisenando R. Villaluz, Jr. for petitioner. Abdulmaid Kiram Muin colloborating counsel for petitioner. The Solicitor General Caparas, Tabios, Ilagan Alcantara & Gatmaytan Law Office and Sycip, Salazar, Feliciano & Hernandez Law Office for respondents. MAKASIAR, J.:+.wph!1 This is a petition for certiorari to set aside the order dated November 10, 1979, of respondent Deputy Minister of Labor, Amado G. Inciong, in NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia and America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America" (respondent-appellant), the dispositive portion of which reads as follows: xxx xxx xxx ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment. promulgated dismissing the instant case for lack of merit (p. 109 rec.). The antecedent facts culled from the records are as follows: On June 20, 1975, petitioner filed a complaint against the respondent bank for the payment of holiday pay before the then Department of Labor, National Labor Relations Commission, Regional Office No. IV in Manila. Conciliation having failed, and upon the request of both parties, the case was certified for arbitration on July 7, 1975 (p. 18, NLRC rec. On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the above-entitled case, granting petitioner's complaint for payment of holiday pay. Pertinent portions of the decision read: xxx xxx xxx The records disclosed that employees of respondent bank were not paid their wages on unworked regular holidays as mandated by the Code, particularly Article 208, to wit: Art. 208. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than 10 workers. (b) The term "holiday" as used in this chapter, shall include: New Year's Day, Maundy Thursday, Good Friday, the ninth of April the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December and the day designated by law for holding a general election. xxx xxx xxx This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed in the past with the unworked regular holidays as excluded for purposes of determining the deductible amount for absences incurred Thus, if the employer uses the factor 303 days as a divisor in determining the daily rate of monthly paid employee, this gives rise to a presumption that the monthly rate does not include payments for unworked regular holidays. The use of the factor 303 indicates the number of ordinary working days in a year (which normally has 365 calendar days), excluding the 52 Sundays and the 10 regular holidays. The use of 251 as a factor (365 calendar days less 52 Saturdays, 52 Sundays, and 10 regular holidays) gives rise likewise to the same presumption that the unworked Saturdays, Sundays and regular holidays are unpaid. This being the case, it is not amiss to state with certainty that the instant claim for wages on regular unworked holidays is found to be tenable and meritorious. WHEREFORE, judgment is hereby rendered: (a) xxx xxxx xxx (b) Ordering respondent to pay wages to all its employees for all regular holidays since November 1, 1974 (pp. 97-99, rec., underscoring supplied). Respondent bank did not appeal from the said decision. Instead, it complied with the order of Arbiter Ricarte T. Soriano by paying their holiday pay up to and including January, 1976. On December 16, 1975, Presidential Decree No. 850 was promulgated amending, among others, the provisions of the Labor Code on the right to holiday pay to read as follows: Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wages during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate and (c) As used in this Article, "holiday" includes New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December, and the day designated by law for holding a general election. Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the Department of Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay. The controversial section thereof reads: Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve" (italics supplied).
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On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister) interpreting the above-quoted rule, pertinent portions of which read: xxx xxx xxx The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit. Under the rules implementing P.D. 850, this policy has been fully clarified to eliminate controversies on the entitlement of monthly paid employees, The new determining rule is this: If the monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays. ..." (emphasis supplied). Respondent bank, by reason of the ruling laid down by the aforecited rule implementing Article 94 of the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to an its employees. On August 30, 1976, petitioner filed a motion for a writ of execution to enforce the arbiter's decision of August 25, 1975, whereby the respondent bank was ordered to pay its employees their daily wage for the unworked regular holidays. On September 10, 1975, respondent bank filed an opposition to the motion for a writ of execution alleging, among others, that: (a) its refusal to pay the corresponding unworked holiday pay in accordance with the award of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, is based on and justified by Policy Instruction No. 9 which interpreted the rules implementing P. D. 850; and (b) that the said award is already repealed by P.D. 850 which took effect on December 16, 1975, and by said Policy Instruction No. 9 of the Department of Labor, considering that its monthly paid employees are not receiving less than P240.00 and their monthly pay is uniform from January to December, and that no deductions are made from the monthly salaries of its employees on account of holidays in months where they occur (pp. 64-65, NLRC rec.). On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ of execution, issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay on the following grounds: (a) that the judgment is already final and the findings which is found in the body of the decision as well as the dispositive portion thereof is res judicata or is the law of the case between the parties; and (b) that since the decision had been partially implemented by the respondent bank, appeal from the said decision is no longer available (pp. 100-103, rec.). On November 17, 1976, respondent bank appealed from the above-cited order of Labor Arbiter Soriano to the National Labor Relations Commission, reiterating therein its contentions averred in its opposition to the motion for writ of execution. Respondent bank further alleged for the first time that the questioned order is not supported by evidence insofar as it finds that respondent bank discontinued payment of holiday pay beginning January, 1976 (p. 84, NLRC rec.). On June 20, 1978, the National Labor Relations Commission promulgated its resolution en banc dismissing respondent bank's appeal, the dispositive portion of which reads as follows: In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss, respondent's appeal; to set aside Labor Arbiter Ricarte T. Soriano's order of 18 October 1976 and, as prayed for by complainant, to order the issuance of the proper writ of execution (p. 244, NLRC rec.). Copies of the above resolution were served on the petitioner only on February 9, 1979 or almost eight. (8) months after it was promulgated, while copies were served on the respondent bank on February 13, 1979. On February 21, 1979, respondent bank filed with the Office of the Minister of Labor a motion for reconsideration/appeal with urgent prayer to stay execution, alleging therein the following: (a) that there is prima facie evidence of grave abuse of discretion, amounting to lack of jurisdiction on the part of the National Labor Relations Commission, in dismissing the respondent's appeal on pure technicalities without passing upon the merits of the appeal and (b) that the resolution appealed from is contrary to the law and jurisprudence (pp. 260-274, NLRC rec.). On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal and alleged the following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant appeal pursuant to the provisions of P. D. 1391; (b) that the labor arbiter's decision being final, executory and unappealable, execution is a matter of right for the petitioner; and (c) that the decision of the labor arbiter dated August 25, 1975 is supported by the law and the evidence in the case (p. 364, NLRC rec.). On July 30, 1979, petitioner filed a second motion for execution pending appeal, praying that a writ of execution be issued by the National Labor Relations Commission pending appeal of the case with the Office of the Minister of Labor. Respondent bank filed its opposition thereto on August 8, 1979. On August 13, 1979, the National Labor Relations Commission issued an order which states: The Chief, Research and Information Division of this Commission is hereby directed to designate a Socio-Economic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America from April 1976 to the present, in accordance with the Decision of the Labor Arbiter dated August 25, 1975" (p. 80, rec.). On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G. Inciong, issued an order, the dispositive portion of which states: ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment promulgated dismissing the instant case for lack of merit (p. 436, NLRC rec.). Hence, this petition for certiorari charging public respondent Amado G. Inciong with abuse of discretion amounting to lack or excess of jurisdiction.
18

The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already become final and had been partially executed, the finality of which was affirmed by the National Labor Relations Commission sitting en banc, on the basis of an Implementing Rule and Policy Instruction promulgated by the Ministry of Labor long after the said decision had become final and executory. WE find for the petitioner. I WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion (p. 1 1, rec.). Article 94 of the Labor Code, as amended by P.D. 850, provides: Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers. ... The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article 82 thereof which reads: Art. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel members of the family of the employer who are dependent on him for support domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. ... (emphasis supplied). From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by inserting, under Rule IV, Book Ill of the implementing rules, Section 2, which provides that: "employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. " Public respondent maintains that "(T)he rules implementing P. D. 850 and Policy Instruction No. 9 were issued to clarify the policy in the implementation of the ten (10) paid legal holidays. As interpreted, 'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they are receiving not less than the statutory minimum wage, (b) their monthly pay is uniform from January to December, and (c) no deduction is made from their monthly salary on account of holidays in months where they occur. As explained in Policy Instruction No, 9, 'The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily paid employees. In case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit' " (pp. 340-341, rec.). This contention is untenable. It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit - it provides for both the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay. This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits (Orlosky vs. Haskell, 155 A. 112.) Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations. Public respondent vehemently argues that the intent and spirit of the holiday pay law, as expressed by the Secretary of Labor in the case of Chartered Bank Employees Association v. The Chartered Bank (NLRC Case No. RB-1789-75, March 24, 1976), is to correct the disadvantages inherent in the daily compensation system of employment holiday pay is primarily intended to benefit the daily paid workers whose employment and income are circumscribed by the principle of "no work, no pay." This argument may sound meritorious; but, until the provisions of the Labor Code on holiday pay is amended by another law, monthly paid employees are definitely included in the benefits of regular holiday pay. As earlier stated, the presumption is always in favor of law, negatively put, the Labor Code is always strictly construed against management. While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts, still if such construction is so erroneous, as in the instant case, the same must be declared as null and void. It is the role of the Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government, almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme Court in Modern Role, C. B. Swisher 1958, p. 36). Thus, in the case of Philippine Apparel Workers Union vs. National Labor Relations Commission (106 SCRA 444, July 31, 1981) where the Secretary of Labor enlarged the scope of exemption from the coverage of a Presidential Decree granting increase in emergency allowance, this Court ruled that: ... the Secretary of Labor has exceeded his authority when he included paragraph (k) in Section 1 of the Rules implementing P. D. 1 1 23. xxx xxx xxx Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor, and the same is therefore void, as ruled by this Court in a long line of cases . . . The recognition of the power of administrative officials to promulgate rules in the administration of the statute, necessarily limited to what is provided for in the legislative enactment, may be found in the early case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs. Tupasi Molina (29 Phil. 119) delineation of the scope of such competence. Thus: "Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for
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the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid." In 1936, in People vs. Santos, this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an administrative official We reaffirmed such a doctrine in a 1951 decision, where we again made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, 'the mandate of the Act must prevail and must be followed. Justice Barrera, speaking for the Court in Victorias Milling inc. vs. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus: "A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom. ... On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means." "It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative executive office or agency then can, contrary to the express language of the Constitution assert for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance with the legislative enactment. Its terms must be followed the statute requires adherence to, not departure from its provisions. No deviation is allowable. In the terse language of the present Chief Justice, an administrative agency "cannot amend an act of Congress." Respondents can be sustained, therefore, only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides" (Phil. Apparel Workers Union vs. National Labor Relations Commission, supra, 463, 464, citing Teozon vs. Members of the Board of Administrators, PVA 33 SCRA 585; see also Santos vs. Hon. Estenzo, et al, 109 Phil. 419; Hilado vs. Collector of Internal Revenue, 100 Phil. 295; Sy Man vs. Jacinto & Fabros, 93 Phil. 1093; Olsen & Co., Inc. vs. Aldanese and Trinidad, 43 Phil. 259). This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union (TUPAS) vs. The National Labor Relations Commission and American Wire & Cable Co., Inc., G.R. No. 53337, promulgated on June 29, 1984. In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordingly, public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to deny the members of petitioner union their regular holiday pay as directed by the Labor Code. II It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, had already become final, and was, in fact, partially executed by the respondent bank. However, public respondent maintains that on the authority of De Luna vs. Kayanan, 61 SCRA 49, November 13, 1974, he can annul the final decision of Labor Arbiter Soriano since the ensuing promulgation of the integrated implementing rules of the Labor Code pursuant to P.D. 850 on February 16, 1976, and the issuance of Policy Instruction No. 9 on April 23, 1976 by the then Secretary of Labor are facts and circumstances that transpired subsequent to the promulgation of the decision of the labor arbiter, which renders the execution of the said decision impossible and unjust on the part of herein respondent bank (pp. 342-343, rec.). This contention is untenable. To start with, unlike the instant case, the case of De Luna relied upon by the public respondent is not a labor case wherein the express mandate of the Constitution on the protection to labor is applied. Thus Article 4 of the Labor Code provides that, "All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor and Article 1702 of the Civil Code provides that, " In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. Consequently, contrary to public respondent's allegations, it is patently unjust to deprive the members of petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor statute promulgated following the acquisition of the "right". On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its promulgation, this Court, through Associate Justice Claro M. Recto, said: xxx xxx xxx We are decidedly of the opinion that they did not. Said order, being unappealable, became final on the date of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a constitutional provision enacted or promulgated subsequent thereto. Neither the Constitution nor the statutes, except penal laws favorable to the accused, have retroactive effect in the sense of annulling or modifying vested rights, or altering contractual obligations" (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324, emphasis supplied). In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "... when a court renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain law or rule then in force, the subsequent amendment or even repeal of said law or rule may not affect the final decision, order, or resolution already promulgated, in the sense of revoking or rendering it void and of no effect." Thus, the amendatory rule (Rule IV, Book III of the Rules to Implement the Labor Code) cannot be given retroactive effect as to modify final judgments. Not even a law can validly annul final decisions (In re: Cunanan, et al., Ibid). Furthermore, the facts of the case relied upon by the public respondent are not analogous to that of the case at bar. The case of De Luna speaks of final and executory judgment, while iii the instant case, the final judgment is partially executed. just as the court is ousted of its jurisdiction to annul or modify a judgment the moment it becomes final, the court also loses its jurisdiction to annul or modify a writ of execution upon its service or execution; for, otherwise, we will have a situation wherein a final and executed judgment can still be annulled or modified by the court upon mere motion of a party This would certainly result in endless litigations thereby rendering inutile the rule of law. Respondent bank counters with the argument that its partial compliance was involuntary because it did so under pain of levy and execution of its assets (p. 138, rec.). WE find no merit in this argument. Respondent bank clearly manifested its voluntariness in
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complying with the decision of the labor arbiter by not appealing to the National Labor Relations Commission as provided for under the Labor Code under Article 223. A party who waives his right to appeal is deemed to have accepted the judgment, adverse or not, as correct, especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a writ of execution was issued, as in this case. Under these circumstances, to permit a party to appeal from the said partially executed final judgment would make a mockery of the doctrine of finality of judgments long enshrined in this jurisdiction. Section I of Rule 39 of the Revised Rules of Court provides that "... execution shall issue as a matter of right upon the expiration of the period to appeal ... or if no appeal has been duly perfected." This rule applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since "... the rule of execution of judgments under the rules should govern all kinds of execution of judgment, unless it is otherwise provided in other laws" Sagucio vs. Bulos 5 SCRA 803) and Article 223 of the Labor Code provides that "... decisions, awards, or orders of the Labor Arbiter or compulsory arbitrators are final and executory unless appealed to the Commission by any or both of the parties within ten (10) days from receipt of such awards, orders, or decisions. ..." Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter the final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143, citing Cruz vs. WCC, 2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC and Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs. Republic, 69 SCRA 576). In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where the lower court modified a final order, this Court ruled thus: xxx xxx xxx The lower court was thus aware of the fact that it was thereby altering or modifying its order of January 8, 1959. Regardless of the excellence of the motive for acting as it did, we are constrained to hold however, that the lower court had no authorities to make said alteration or modification. ... xxx xxx xxx The equitable considerations that led the lower court to take the action complained of cannot offset the demands of public policy and public interest which are also responsive to the tenets of equity requiring that an issues passed upon in decisions or final orders that have become executory, be deemed conclusively disposed of and definitely closed for, otherwise, there would be no end to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of law and the maintenance of peace and order, by settling justiciable controversies with finality. xxx xxx xxx In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said: xxx xxx xxx In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is absolute that after a judgment becomes final by the expiration of the period provided by the rules within which it so becomes, no further amendment or correction can be made by the court except for clerical errors or mistakes. And such final judgment is conclusive not only as to every matter which was offered and received to sustain or defeat the claim or demand but as to any other admissible matter which must have been offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contreras and Ginco vs. Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated that the rule must be adhered to regardless of any possible injustice in a particular case for (W)e have to subordinate the equity of a particular situation to the over-mastering need of certainty and immutability of judicial pronouncements xxx xxx xxx III The despotic manner by which public respondent Amado G. Inciong divested the members of the petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of property without due process of law Public respondent completely ignored the rights of the petitioner union's members in dismissing their complaint since he knew for a fact that the judgment of the labor arbiter had long become final and was even partially executed by the respondent bank. A final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324). A final judgment is "a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could no. be deprived arbitrarily without injustice" (Rookledge v. Garwood, 65 N.W. 2d 785, 791). It is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of then Justice, later Chief Justice, Concepcion "... acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding (Vda. de Cuaycong vs. Vda. de Sengbengco 110 Phil. 118, emphasis supplied), And "(I)t has been likewise established that a violation of a constitutional right divested the court of jurisdiction; and as a consequence its judgment is null and void and confers no rights" (Phil. Blooming Mills Employees Organization vs. Phil. Blooming Mills Co., Inc., 51 SCRA 211, June 5, 1973). Tested by and pitted against this broad concept of the constitutional guarantee of due process, the action of public respondent Amado G. Inciong is a clear example of deprivation of property without due process of law and constituted grave abuse of discretion, amounting to lack or excess of jurisdiction in issuing the order dated November 10, 1979. WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T. SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED. COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA SO ORDERED.1wph1.t

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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 101535 January 22, 1993 PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION, PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, RAUL ABRICO, RODRIGO VASALLO, EDUARDO A. SIBBALUCA, and BENIGNO M. MANASIS, respondents. Office of the Government Corporate Counsel for petitioner. Apolinar L. Sevilla for private respondents. CAMPOS, JR., J.: Subject of this petition is the Resolution ** of the National Labor Relations Commission (NLRC) affirming the decision of the Philippine Overseas Employment Administration (POEA) which held herein petitioner Philippine National Construction Corporation (PNCC) liable to private respondents Raul Abrico, Rodrigo Vasallo, Eduardo A. Sibbaluca, and Benigno M. Manasis for salary, overtime pay, vacation and sick leave, and completion bonus differentials. The facts are as follows: Herein private respondents Raul C. Abrico, Rodrigo Vasallo, Eduardo A. Sibbaluca, and Benigno M. Manasis were deployed by herein petitioner for overseas employment to Iraq as security guards pursuant to individual appointment contracts dated April 15, 1985. These were submitted to the POEA and were validated by the latter on April 22, 1985. The contracts provided for a US$350.00/month salary. However, on May 12, 1985, a second overseas contract was executed by the PNCC which was accepted by private respondents. It modified the April 15, 1985 contract by providing for a monthly salary of US$260.00 for the same position. The contract was for a twoyear period. When the period lapsed, private respondents were repatriated and were extended local employment. However, all of them filed their voluntary resignation effective August 31, 1987 so that they could avail of more benefits under the Retirement Program offered by the PNCC. On August 17, 1987, private respondents filed a complaint before the POEA for, among others, (a) non-payment of promotional pay increase for Raul C. Abrico and Rodrigo J. Vasallo; (b) underpayment of salaries, overtime pay, bonuses, night differential pay, sick leave, and vacation leave benefits; (c) assigning Friday overtime guarding duties to non-guards. In disposing of the complaint, the POEA ruled as follows: The issues to be resolved in these are: 1. Whether or not herein complainants are entitled to salary and overtime pay differentials. 2. Whether or not herein complainants are entitled to vacation leave and sick leave differentials, bonus differential and night shift differential. 3. Whether or not complainants Raul Abrico and Rodrigo J. Vasallo are entitled to promotional pay differential. This Office, after a thorough examination of the allegations as well as the evidence of the parties finds the answer of the first issue to be affirmative, affirmative also to the second issue as far as vacation and sick leaves (sic) differentials as well as bonus differential are concerned and negative as to the rest of the issues. . . . The only dispute which remains unsolved is whether or not the monthly salary of herein complainants is US$350.00 a month or US$260.00. As correctly invoked by complainants paragraph (1) of Article 34 of the Labor Code prohibits the substitution or alteration of employment contracts approved and verified by the Department of Labor from the time (of) the actual signing thereof by the parties up to and including the period of expiration of the same without the approval of the Department of Labor. With regard to the first issue in this case the approved contract of employment of the herein complainants with the respondent is US$350.00 a month. This can be inferred from the POEA approved contract of employment and by the certification issued by respondent's chief recruiting officer. This being so, herein complainants have the right to be paid as monthly salaries the aforementioned amount. Complainants having been granted voluntarily by the respondent a two-hour daily overtime (Exh. "G", "G-1") during the durations of their contract, are also entitled to be paid thereto based on the monthly salaries of US$350.00 and not US$260.00. In connection with the second issues of vacation and sick leaves (sic) differentials as well as bonus differential, there being no refutation from the respondent of the allegation of the complainants that they were paid the said benefits in accordance with the monthly rate they were receiving while working in Iraq, that is US$260.00, instead of US$350.00, their salary rate in their approved employment contract, this Office finds it proper to award the complainants the difference of the two (2) aforementioned amounts as far as their vacation and sick leaves (sic) benefits as well as completion bonus are concerned. Subparagraph a of paragraph seven of the master employment contract of the respondent in its Iraq project during the year 1985 provides a vacation leave of 20 days and sick leave of 10 days or a total of thirty (30) days leave for each of their employees for twelve (12) months service. The said leaves (sic) benefits are commutable to cash at the rate of 100% of the employee's salary at the end of employees foreign assignment (subpar. c par. 7, respondent's Master Employment Contract). Respondent's master employment contract also provides for completion bonus of fifteen (15) days for every year of service (par. 15). Respondents having paid the complainants the said benefits in accordance with the monthly rate they actually
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received while working in Iraq, this Office finds it proper for the respondent to pay to complainants the difference of the two aforementioned amounts. 1 From the decision of the POEA, the PNCC appealed to the NLRC. It alleged that the POEA erred in applying Article 34(i) of the Labor Code; and in holding that the notice of employment, dated April 15, 1985, providing for a monthly salary of US$350.00 was the actual overseas employment contract instead of the one dated May 12, 1985 which provided for a salary of US$260.00/month. In affirming the POEA decision, the NLRC stated: . . . suffice it to state that in its aforestated Rejoinder respondent-appellant corporation admitted as ". . . beyond question . . . that the contracts dated April 15, 1985 were amended or modified on May 12, 1985" (Rollo 60) the latter sans ". . . the approval of the Department of Labor . . ." and/or the POEA, thus within the context of prohibited practices under Art. 34 (i) of the Labor Code, as amended. As validated by the POEA, the approved employment contracts of complainants-appellees were for US$350.00 a month salary. Ms. Solis certified to the aforesaid salary as PNCC Recruitment Head ( Rollo 25-28); also, as per POEA Accreditation Department certification dated 25 June 1987. (Rollo24). xxx xxx xxx Relative to the last assignment of error, respondent-appellant corporation insists that the POEA('s) basis for the computation of the awarded differentials are erroneous for being without evidentiary basis or contrary to the evidence. It must be noted that complainants-appellees presented its (sic) claims (Annex "M", "N", "O", "P"; Rollo122-136, 73-98) for differentials in overtime pay, sick leave and vacation leave benefits and completion bonus, as well as its (sic) Exhibits "G" and "G-1", all of which served as POEA bases for entitlement (Rollo 181, 182) to the several money claims; and the formula bases for the aforestated computation were detailed besides, in the assailed decision (pages 6, 7; Rollo 179, 180). The record is bereft however, of evidence of compliance with the aforesaid employment contracts relative to the aforesaid claims. Absolutely no evidence appears to have been submitted for respondent-appellants relative to satisfaction of the aforementioned claims: whether of payments for any overtime as authorized and rendered, or availment of leave benefits or its computation (sic) to cash, etc., where the pertinent employment records, particularly disbursements for services rendered, as well as for fringe benefits usually are for the account of the deploying employer. 2 A Motion for Reconsideration of this Resolution having been denied on August 23, 1991, petitioner filed this petition for certiorari alleging that the public respondents committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that the notice of employment dated April 15, 1985 was the actual employment contract and that Article 34 (i) of the Labor Code was applicable. We find no sufficient ground to annul the decision of the NLRC due to a capricious and whimsical exercise of judgment. The petitioner's claim that the public respondent NLRC gravely abused its discretion in holding that the private respondents were entitled to a monthly salary of US$350.00 pursuant to the April 15, 1985 employment contract has not been adequately substantiated. One of the axioms governing judicial review through certiorari is that the administrative decision may properly be annulled or set aside only upon clear showing that the administrative official or tribunal has acted with grave abuse of discretion. 3 The assailed NLRC decision which affirmed the POEA ruling was based on the exhibits presented by the parties, among which were the confirmation letters 4 issued to each of the private respondents and the certification 5issued by the POEA on June 25, 1987 stating that the approved rate for the position of a company guard for the PNCC was US$350.00. More importantly, the NLRC relied upon the admission made by the PNCC. Thus, it held: . . . suffice it to state that in its aforestated Rejoinder respondent-appellant corporation admitted [Emphasis supplied] as ". . . beyond question . . . that the contracts dated April 12, 1985 were amended or modified on May 12, 1985" (Rollo 60), the latter sans ". . . the approval of the Department of Labor . . ." and/or the POEA, thus within the context of prohibited practices under Art. 34 (i) of the Labor Code, as amended. 6 The PNCC now finds fault in that decision by saying that the April 15, 1985 document was but a mere notice/offer of employment. Petitioner alleges further that it was never signed and accepted by private respondents. Consequently, it never became a binding contract between the parties concerned. Petitioner further stated that the real contract of employment was the one executed on May 12, 1985 which provided for a monthly salary of US$260.00 and which was accepted by private respondents. While the allegations of the PNCC may cast doubt on the real nature of the April 12, 1985 document, our Civil Code 7 states: In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborers. The mandate of the law for a liberal interpretation of labor contracts in favor of the working man was applied in the case of Ditan vs. POEA Administrator 8 where We made the following pronouncement: A strict interpretation of the cold facts before us might support the position taken by the respondents. However, we are dealing here not with an ordinary transaction but with a labor contract which deserves special treatment and a liberal interpretation in favor of the worker . . . the Constitution mandates the protection of labor and the sympathetic concern of the State for the working class conformably to the social justice policy. . . . xxx xxx xxx Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law. . . . . WHEREFORE, in view of the foregoing, the questioned Resolution of the NLRC is hereby AFFIRMED. Consequently, this petition is DISMISSED. With costs. SO ORDERED.
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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-62207 December 15, 1986
JUAN BONIFACIO, petitioner-appellant, vs. GOVERNMENT SERVICE INSURANCE SYSTEM [Ministry of Education & Culture] and EMPLOYEES' COMPENSATION COMMISSION, respondents-appellees. Cenon, Roncesvalles, Reyes & Leus for petitioner-appellant.

FERNAN, J.: Petition for review on certiorari of the decision of the Employees Compensation Commission dated August 19, 1982, affirming the denial by the Government Service Insurance System of petitioner's claim for benefits under PD No. 626, as amended, for the death of his spouse, Lourdes Bonifacio. The facts are undisputed. The late Lourdes Bonifacio was a classroom teacher assigned to the district of Bagamanoc, Division of Catanduanes, Ministry of Education and Culture from August, 1965 until she contracted carcinoma of the breast with metastases to the gastrointestinal tract and lungs which caused her death on October 5, 1978. Dra. Corazon Yabes-Almirante of the Ospital ng Bagong Lipunan certified that the late Lourdes Bonifacio underwent radical mastectomy for cancer of the breast in 1973. In 1976, when her ailment was noted to have metastasized to her abdomen, she submitted herself to an operation known as "exploratory laparotomy" in March of the same year. On September 1, 1978, she complained of "abdominal pain, abdominal enlargement, vomiting, and failure to pass stools inspite of laxatives." Upon operation it was found that her entire gastrointestinal tract was enveloped by carcinoma. Despite chemotherapy, she died on October 5, 1978 from carcinoma of the breast metastatic to gastrointestinal tract and lungs. Thereafter a claim for death benefits under P.D. No. 626, as amended, was filed by petitioner with the GSIS. The same was however denied on the ground that the decedent's principal ailment, carcinoma of the breast with metastases to gastrointestinal tract and lungs, is not an occupational disease for her particular work as a teacher, nor is the risk of contracting said disease increased by her working conditions. The Employees Compensation Commission, on appeal affirmed the decision of the respondent System. Petitioner now assails the decision of the respondent Commission on the following grounds: a] The respondent Commission's affirmance of the denial by respondent System totally ignored the Supreme Court's pronouncements on compensation cases; and b] Under the law, in case of doubt in the implementation and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the same shall be resolved in favor of the laborer. We hold that the GSIS and the Employees Compensation Commission did not err in denying petitioner's claim. A compensable sickness means "any illness definitely accepted as an occupational disease listed by the Employees Compensation Commission, Or any illness caused by employment subject to proof by the employee that the risk of contracting the same is increased by working conditions. For this purpose, the Commission is empowered to determine and approve occupational diseases and work-related illnesses that may be considered compensable based on peculiar hazards of employment." [Art. 167(1) Labor Code as amended by P.D. No. 1368, effective May 1, 1978]. Thus, for the sickness or the resulting disability or death to be compensable, the sickness must be the result of an accepted occupational disease fisted by the Employees Compensation Commission [Annex "A" of the Amended Rules on Employees Compensation], or any other sickness caused by employment subject to proof by claimant that the risk of contracting the same is increased by working conditions. [Sec. 1, Rule 11, Amended Rules on Employees Compensation]. Carcinoma of the breast with metastases to the gastrointestinal tract and lungs is not listed by the Commission as an occupational disease. As to the "metastases to the gastrointestinal tract and lungs" the Commission lists such disease as occupational only in the following employment: Occupational Diseases 16. Cancer of stomach and other lymphatic and blood forming vessels; nasal cavity and sinuses 17. Cancer of the lungs, liver and brain. Nature of Employment Woodworkers, wood products industry carpenters, loggers and employees in pulp and paper mills and plywood mills Vinyl chloryde workers, plastic workers.

[Annex A, Amended Rules on Employees Compensation, see p. 38, Rollo.] The cancer which affected the deceased not being occupational in her particular employment, it became incumbent upon petitioner to prove that the decedent's working conditions increased the risk of her contracting the fatal illness. This onus petitioner failed to satisfactorily discharge. We note the following medical report on breast cancer which the Employees Compensation Commission cited in its decision and which the petitioner failed to controvert: ... Recent observations on the epidemeology of breast cancer suggest that it is intimately linked to "estrogenic hormones" [W.A.P Anderson, Mosby, Pathology 5th edition, pp. 1217-1218]. Mammary carcinoma is likely to metastasize relatively early to the regional lymph nodes-axillary and supra clavicular, if the primary site is in the outer half of the breast. From thence it spreads primarily to the
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bones, lungs, skin and subcutaneous tissues generally; less frequently to the brain. [Wintrobe et. al., Harrison's Principles of Internal Medicine, 7th edition, pp. 584-585]. (pp. 3-4, ECC decision dated August 19, 1982). Petitioner's contention that the decision of the Employees Compensation Commission totally ignored the Supreme Court's pronouncements on compensation cases is unmeritorious. The petitioner evidently overlooked that his claim is now within the ambit of the Labor Code and the rulings under the old law, Act No. 3428, as amended, no longer control. The old law as embodied particularly in Section 43 of RA No. 772 amending Act No. 3812, provided for "the presumption of compensability and the rule on aggravation of illness, which favor the employee," and "paved the way for the latitudinarian or expansive application of the Workmen's Compensation Law in favor of the employee or worker." [ Sulit v. ECC, 98 SCRA 483, 489] The presumption in essence states that in any proceeding for the enforcement of the claim for compensation under the Workmen's Compensation Act "it shall be presumed in the absence of substantial evidence to the contrary that the claim comes within the provisions of the said Act, that sufficient notice thereof was given, that the injury was not occasioned by the willful intention of the injured employee to bring about the injury or death of himself or of another, that the injury did not result solely from the intoxication of the injured employee while on duty, and that the contents of verified medical and surgical reports introduced in evidence by claimants for compensation are correct." Thus, under the Workmen's Compensation Law, it is not necessary for the claimant to carry the burden of proof to establish his case to the point of demonstration [Abana vs. Quisumbing, 22 SCRA 1278]. It is "not necessary to prove that employment was the sole cause of the death or injury suffered by the employee. It is sufficient to show that the employment had contributed to the aggravation or acceleration of such death or ailment." [Fontesa vs. ECC, 22 SCRA 282] "Once the disease had been shown to have arisen in the course of employment, it is presumed by law, in the absence of substantial evidence to the contrary, that it arose out of it." [Hernandez vs. ECC, et. al. L-20202, May 31, 1965]. With this legal presumption in the old law, the burden of proof shifts to the employer and the employee no longer suffers the burden of showing causation. Under the present Labor Code, the "latitudinarian or expansive application of the Workmen's Compensation Law in favor of the employee or worker" no longer prevails as the burden of showing proof of causation has shifted back to the employee particularly in cases of sickness or injuries which are not accepted or listed as occupational by the Employees Compensation Commission. As stated in Sulit vs. Employees Compensation Commission [supra] "the Labor Code abolished the presumption of compensability and the rule on aggravation of illness caused by the nature of the employment. " While we do not dispute petitioner's contention that under the law, in case of doubt in the implementation and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the doubt shall be resolved in favor of the laborer, we find that the same has no application in this case since the pertinent provisions of the Labor Code leave no room for doubt either in their interpretation or application. WHEREFORE, the petition is dismissed and the decisions of the GSIS and the Employees Compensation Commission denying the claim are affirmed. No costs. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 75704 July 19, 1989 RUBBERWORLD (PHILS.), INC. and ELPIDIO HIDALGO, petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION) and NESTOR MALABANAN,respondents. MEDIALDEA, J.: This is a petition for certiorari under Rule 65 of the Rules of Court seeking the annulment of the decision of the respondent National Labor Relations Commission dated June 17, 1986 (p. 23, Rollo) in NLRC NCR Case No. 6-2158-84 entitled "Nestor Malabanan and Jonathan Transmil, Complainants, versus Rubberworld (Phils.), Inc. and Elpidio Hidalgo, Respondents," reversing the decision of the Labor Arbiter which dismissed the complaint for illegal dismissal for lack of merit. The antecedent facts are as follows: Respondent Malabanan was employed by petitioner Rubberworld (Phils.), Inc. on September 25, 1978 as an ordinary clerk. In May, 1980, he was promoted to the position of production scheduler with a corresponding salary increase. He was again transferred to the Inventory Control Section as stock clerk on September 1, 1983. On April 6,1984, Elpidio Hidalgo, the Plant I General Manager of petitioner company, received a copy of the Financial Audit Report from the Internal Audit Department of the company showing a significant material variance between the year-end actual inventory and that of the Cards (SC)/EDP Control Records. As a result thereof, Noel Santiago, Section Head of the Inventory Control Section, where respondent Malabanan was assigned, conducted an investigation of the reported discrepancies in the stock cards upon the request of the Plant General Manager. Santiago then submitted his report to the general manager recommending the dismissal of respondent Malabanan. Consequently, Malabanan's case was endorsed to the Human Resources Division of petitioner company, which conducted a reinvestigation on the matter and which affirmed the recommendation of the Inventory Control Section Head for the termination of employment of respondent Malabanan. On June 6, 1984, respondent Malabanan was dismissed by petitioner company. On June 16, 1984, respondent Malabanan, along with another complainant named Jonathan Transmit, filed a complaint for unfair labor practice and illegal dismissal against petitioner company alleging that they (respondent Malabanan and complainant Transmil) were members of the monthly salaried employees' union affiliated with TUPAS; that petitioner company forced them to disaffiliate from the union; and that due to their refusal to resign from the union, they were ultimately dismissed from employment by petitioner company. Petitioner company on the other hand, denied complainants' allegations and averred that respondent Malabanan's dismissal was due to gross and habitual neglect of his duty and not due to his union affiliation. During the hearing of the case, the other complainant, Jonathan Transmil withdrew from the case since he already found another employment abroad. On January 30, 1985, the Labor Arbiter rendered a decision (pp. 17- 22, Rollo), the dispositive portion of which reads: WHEREFORE, premises considered, this case should be, as it is hereby, DISMISSED, for lack of merit. SO ORDERED. Respondent Malabanan appealed from the adverse decision to the respondent Commission. On June 17, 1986, respondent Commission reversed the appealed decision of the Labor Arbiter and stated, inter alia: Confronted with this factual backgrounds, we find ourselves inclined to the view that the appealed decision merits a reversal. xxx WHEREFORE, premises considered, the appealed decision should be, as it is hereby REVERSED. Consequently, the respondents are directed to reinstate complainant Nestor Malabanan to his former position as production scheduler, with full backwages from the time he was illegally terminated up to actual reinstatement, without loss of seniority rights and benefits appurtenant thereto. SO ORDERED. (pp. 23-27, Rollo) The petitioner company moved for a reconsideration on the ground that the respondent Commission's decision is not in accordance with facts and evidence on record. On July 23, 1986, the said motion for reconsideration was denied. On September 3, 1986, petitioner filed the instant petition contending that the respondent Commission committed grave abuse of discretion amounting to lack of jurisdiction in reversing the Labor Arbiter's decision. The two issues to be resolved in the instant case are: (1) whether or not the dismissal of respondent Malabanan is tainted with unfair labor practice; and (2) whether or not a just and valid cause exists for the dismissal of private respondent Malabanan. Petitioner alleges that the National Labor Relations Commission gravely erred in concluding that the demotion of Malabanan from production scheduler to a stock clerk at the Stock and Inventory Section was intended to discourage Malabanan from union membership. It argued that the Labor Arbiter was correct in finding that the private respondent had not shown ample proof to the effect that he was a member of a labor organization prior to his transfer to another position. We believe that the foregoing contentions are impressed with merit. Art. 248 of the Labor Code, PD No. 442, as amended, provides: Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
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xxx The question of whether an employee was dismissed because of his union activities is essentially a question of fact as to which the findings of the administrative agency concerned are conclusive and binding if supported by substantial evidence. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. It means such evidence which affords a substantial basis from which the fact in issue can be reasonably inferred (Philippine Metal Foundries, Inc. v. Court of Industrial Relations, et. al., No. L- 34948-49, May 15, 1979, 90 SCRA 135). The findings of the Labor Arbiter on the nonexistence of unfair labor practice on the part of the company are more in accord and supported by the evidence submitted by the parties in the instant case, to wit: Complainant had stated that he was a member of the monthly salaried employees union affiliated with TUPAS. He, however, offered no proof to support his allegation. In fact, no evidence was presented to prove the existence of such union. We (note] from the records that, as the usual practice, in cases like this one, complainant is usually supported by the union of which he is a member. And ordinarily, the union itself is impleaded as a co- complainant. Such circumstances, surprisingly, [are] not present in this case. In fact, complainant categorically alleged that he had solicited the services of the PAFLU Labor Union in filing this case. It is, indeed, surprising that complainant had to solicit the help of a labor union (PAFLU) of which he was not a member instead of soliciting the aid of the labor union (TUPAS) of which he was allegedly a member. These circumstances alone [destroy] the credibility of complainant's allegations. (p. 21, Rollo). Nowhere in the records can We find that the company actually performed positive acts to restrain the union participation of private respondent. For one, it is doubtful whether Malabanan was really engaged in the organization of a labor union affiliated with the federation TUPAS. The only evidence presented by him to prove this contention is his affidavit and that of his father. It is therefore, not in accordance with ordinary experience and common practice that the private respondent pursued his battle alone, without the aid and support of his co-members in the union and his federation especially in a case of serious nature as this one involving company intervention with union activity. As a rule, it is the prerogative of the company to promote, transfer or even demote its employees to other positions when the interests of the company reasonably demand it. Unless there are instances which directly point to interference by the company with the employees' right to self-organization, the transfer of private respondent should be considered as within the bounds allowed by law. Furthermore, although private respondent was transferred to a lower position, his original rank and salary remained undiminished, which fact was not refuted or questioned by private respondent. In view of the foregoing conclusions of the Labor Arbiter, We are compelled to agree with the latter that the petitioner company did not commit any unfair labor practice in transferring and thereafter dismissing private respondent. The remaining issue to be resolved on this point is whether the dismissal of respondent Malabanan was for a just and lawful cause. Article 282 of the Labor Code, as amended, provides: Article 282. Termination by employer. An employer may terminate an employment for any of the following just causes: xxx b) Gross and habitual neglect by the employee of his duties; x x x. Petitioner contends that private respondent Malabanan was guilty of gross negligence when he caused the posting of incorrect entries in the stock card without counter checking the actual movement status of the items at the warehouse, thereby resulting into unmanageable inaccuracies in the data posted in the stock cards. The respondent Commission correctly ruled: Penultimately, even assuming for the sake of argument that herein complainant 'posted entries in the stock card without counter checking the actual movement status of the items at the warehouse, thereby resulting in an inaccurate posting of data on the stock cards," to our impression does not constitute as a just cause for dismissal. Records show that he was only transferred to the Inventory Control Section on September 1, 1983 and was not so familiar and experienced as a stock clerk, and prior to his transfer, the record shows no derogatory records in terms of his performance. His failure to carry out efficiently his duties as a stock clerk is not so gross and habitual. In other words he was not notoriously negligent to warrant his severance from the service. Considering that there is nothing on record that shows that he willfully defied instructions of his superior with regards to his duties and that he gained personal benefit of the discrepancy, his dismissal is unwarranted. (p. 26, Rollo). It does not appear that private respondent Malabanan is an incorrigible offender or that what he did inflicted serious damage to the company so much so that his continuance in the service would be patently inimical to the employer's interest. Assuming, in gratia argumenti that the private respondent had indeed committed the said mistakes in the posting of accurate data, this was only his first infraction with regard to his duties. It would thus be cruel and unjust to mete out the drastic penalty of dismissal, for it is not proportionate to the gravity of the misdeed. In fact, the promotion of the private respondent from the position of ordinary clerk to production scheduler establishes the presumption that his performance of his work is acceptable to the company. The petitioner even admitted that it was due to heavy financial and business reverses that the company assigned the private respondent to the position of Stock Clerk and not because of his unsatisfactory performance as production scheduler (p. 6, Rollo). It has been held that there must be fair and reasonable criteria to be used in selecting employees to be dismissed (Asiaworld Publishing House, Inc. v. Ople, No. L-56398, July 23, 1987, 152 SCRA 219). It is worthy to note that the prerogative of management to dismiss or lay-off an employee must be done without abuse of discretion, for what is at stake is not only petitioner's position, but also his means of livelihood. This is so because the preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits (Euro-Linea, Phils., Inc. v. NLRC, L-75782, December 1, 1987,156 SCRA 79).

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The law regards the worker with compassion. Our society is a compassionate one. Where a penalty less punitive would suffice, whatever missteps may be committed by the worker should not be visited by the supreme penalty of dismissal. This is not only because of the law's concern for the working man. There is in addition, his family to consider. After all, labor determinations should not only be secundum rationem but also secundum caritatem (Almira, et al., v. BF Goodrich Philippines, Inc., et al., G.R. No. L-34974, July 25, 1974, 58 SCRA 120). ACCORDINGLY, the petition is DISMISSED for lack of merit. However, the decision of the public respondent is hereby MODIFIED to the effect that petitioner company is ordered to reinstate private respondent Nestor Malabanan to the position of stock clerk or substantially equivalent position, with the same rank and salary he is enjoying at the time of his termination, with three years backwages and without loss of seniority rights and benefits appurtenant thereto. Should the reinstatement of the private respondent as herein ordered be rendered impossible by the supervention of circumstances which prevent the same, the petitioner is further ordered to pay private respondent separation pay equivalent to one (1) month's salary for every year of service rendered, computed at his last rate of salary. SO ORDERED.

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THIRD DIVISION LAND AND HOUSING G.R. No. 152012 DEVELOPMENT CORPORATION and ABV ROCK GROUP, Present: Petitioners, Panganiban, J., Chairman, Sandoval-Gutierrez, - versus Corona, Carpio Morales, and Garcia, JJ Promulgated: MARIANITO C. ESQUILLO, Respondent. September 30, 2005 x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x DECISION PANGANIBAN, J.: Q uitclaims, releases and other waivers of benefits granted by laws or contracts in favor of workers should be strictly scrutinized to protect the weak and the disadvantaged. The waivers should be carefully examined, in regard not only to the words and terms used, but also the factual circumstances under which they have been executed. The Case Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the July 27, 2001 Decision [2] and the January 29, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR SP No. 50679. The dispositive portion of the Decision reads as follows: WHEREFORE, premises considered, the decision dated May 30, 1997 of public respondent is hereby ANNULLED and SET ASIDE and the decision, dated February 27, 1997 of Labor Arbiter Andres Zavalla is REINSTATED and AFFIRMED in toto. Costs against [herein petitioners].[4] The assailed Resolution denied petitioners Motion for Reconsideration. The Facts The antecedents are narrated by the CA as follows: [Respondent] Marianito C. Esquillo was hired as a structural engineer by [Petitioner] ABV Rock Group (ABV) based in Jeddah, Kingdom of Saudi Arabia. He commenced employment on July 27, 1989, with an initial monthly salary of US$1,000.00 that was gradually increased, on account of his good performance and the annual renewal of his employment contract, until it reached US$1,300.00. Private respondent Land & Housing Development Corporation (LHDC), a local placement agency, facilitated [respondents] employment papers. Although [respondents] employment contract was supposed to be valid until July 26, 1995, it was pre -terminated, through an InterOffice Memo on Notice of Termination, dated November 17, 1994, allegedly, for the reason, reduction of force. Petitioner however, claims that the reason adduced was negated by the fact that a lot of transferees from other sites were taken in and promotions as wel l as re-classifications in the lower ranks were done as shown by the list of fifteen (15) transferees from Riyadh effective November 5, 1994, as well as letters of promotion and re-classification. He further claimed that [Petitioner] ABV maliciously confiscated his iqama or resident visa despite the fact that it was [respondents] previous employer, FEAL IBC., which secured his iqama. Consequently, [respondent] was prevented from getting another job in Jeddah. [Respondent] subsequently received the amount of twenty-three thousand, one hundred fifty-three Saudi Riyals (SR23,153.00) from [Petitioner] ABV, as final settlement of his claims and was issued an exit visa that required him to immediately go back to the Philippines. As a result of the foregoing, [respondent] filed a complaint for breach of contract and/or illegal dismissal, before the Phi lippine Overseas Employment Administration which was referred to the National Labor Relations Commission, Sub-Regional Arbitration Branch No. IV, San Pablo City, and docketed as SRAB-IV-4-0053-96-L. The parties were required to file their position papers and responsive pleadings. In their position paper, [petitioners] maintained that [respondents] dismissal was for valid cause, that is, reduction of f orce. Due to the Gulf War, the projects of [Petitioner] ABV were reduced and it was forced to terminate the contracts of workers whose job were not so immediate and urgent and retain only those workers whose skills were needed just to maintain the projects. [Respondent] was
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informed, one month in advance, of the pre-termination of his contract, and he was paid his salary, overtime pay, bonus and other benefits in the total amount of US$6,716.00 or Saudi Riyals SR25,192.00. With respect to the alleged confiscation of [respondents] iqama, [petitioners] alleged that the law requires its surrender to the Saudi authorities upon the termination of the employees contract of employment. Upon the submission of the case for resolution, the Hon. Labor Arbiter Andres Zavalla issued his Decision, dated February 27 , 1997, decreeing, as follows: WHEREFORE, premises considered, judgment is hereby rendered ordering [petitioners] jointly and severally to pay [respondent] his salaries corresponding to the unexpired portion of his contract from December 19, 1994 up to July 26, 1995 in the total amount of NINE THOUSAND FOUR HUNDRED FORTY SEVEN U.S. Dollars (US$9,447.00) and ten percent (10%) of his monetary award as attorneys fees both in Philippine currency to be computed at the prevailing rate at the time of payment. All other claims of [respondent] are hereby dismissed for lack of merit. SO ORDERED. When [petitioners] filed their joint appeal, docketed as NLRC NCR CA No. 012650 -97, [the NLRC] in a Decision, dated May 30, 1997, reversed the aforecited decision and dismissed the [respondents] complaint for lack of merit. [Respondents] motion for reconsideration was denied in a Resolution, dated July 10, 1997.[5] Ruling of the Court of Appeals The Court of Appeals ruled that despite the absence of a written categorical objection to the sufficiency of the payment received as consideration for the execution of the quitclaim, jurisprudence supported the right of respondent to demand what was rightfully his under our labor laws. Hence, he should have been allowed to recover the difference between the amount he had actually received and the amount he should have received. The CA also found that the NLRC had erroneously applied RA 8042 to the case. The appellate court held that respondent was entitled to the salaries corresponding to the unexpired portion of his Contract, in addition to what he had already received. Hence, this Petition.[6] The Issues Petitioners raise the following issues for this Courts consideration: A. Whether or not the Honorable Court of Appeals committed reversible error when it took cognizance of an issue of fact which was raised for the first time on appeal. B. Whether or not the Honorable Court of Appeals committed reversible error in its 27 July 2001 Decision and 29 January 2002 Resolution by affirming the 27 February 1997 Decision of the Labor Arbiter which rendered as null and void and without binding effect the release and quitclaim executed by the respondent in favor of the petitioners, and, thereafter, granted the respondent monetary award.[7] In the main, the issue is whether respondent, despite having executed a quitclaim, is entitled to a grant of his additional monetary claims. The Courts Ruling The Petition has no merit. At the outset, the Court notes the Manifestation of the Office of the Solicitor General (OSG), recommending that the decisio n dated May 30, 1997 of the NLRC be annulled and set aside and that [Respondent] Esquillo be awarded the total amount of his salaries corresponding to the unexpired portion of his contract of employment.[8] Main Issue: Entitlements of a Dismissed Employee Who Has Executed a Quitclaim The factual findings of labor officials, who are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but finality.[9] In the present case, the labor arbiter found respondents dismissal to be illegal and devoid of any just or authorized cause. The factual findings of the NLRC and the CA on this matter were not contradictory. Hence, the Court finds no reason to deviate from their factual finding that respondent was dismissed without any legal cause. Indeed, an employee cannot be dismissed except for cause, as provided by law, and only after due notice and hearing.[10] Employees who are dismissed without cause have the right to be reinstated without loss of seniority rights and other privileges; and to be paid full back wages, inclusive of allowances and other benefits, plus proven damages. With regard to contract workers, in cases arising before the effectivity of RA 8042 (the Migrant Workers and Overseas Filipinos Act[11]), it is settled that if the contract is for a fixed term and the employee is dismissed without just cause, he is entitled t o the payment of his salaries corresponding to the unexpired portion of his contract.[12] In the present case, the Contract of respondent was until July
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26, 1995. Since his dismissal from service effective December 18, 1994, was not for a just cause, he is entitled to be paid his salary corresponding to the unexpired portion of his Contract, in the total amount of US$9,447. We now go to the Release and Quitclaim signed by respondent. The document, which was prepared by Petitioner ABV Rock Group,[13] states: KNOW ALL MEN BY THESE PRESENTS: That for and in consideration of the sum of Saudi Riyals SR: TWENTY THREE THOUSAND ONE HUNDRED FIFTY THREE (SR23,153) receipt of which is hereby acknowledged to my full and complete satisfaction, I, MARIANITO C. ESQUILLO do discharge my employer, ABV ROCK GROUP KB, JEDDAH, & its recruitment agent, the LAND & HOUSING DEVP. CORP., from any and all claims, demands, debts, dues, actions, or causes of action, arising from my employment with aforesaid company/firm/entity. I hereby certify that I am of legal age, that I fully understand this instrument and agree that this is a full and final release and discharge of the parties referred to herein, and I further agree that this release may be pleaded as absolute and final bar to any suit or suits or legal proceedings that may hereafter be prosecuted by me against aforementioned companies/entities. IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HANDS THIS 29 day of NOV, 1994 at JEDDAH. SIGNED MARIANITO C. ESQUILLO.[14] Petitioners claim that the foregoing Release and Quitclaim has forever released them from any and all claims, dem ands, dues, actions, or causes of action arising from respondents employment with them. They also contend that the validity of the document can no longer be questioned. Unfortunately for petitioners, jurisprudence does not support their stance. The fact that employees have signed a release and/or quitclaim does not necessarily result in the waiver of their claims. The law strictly scrutinizes agreements in which workers agree to receive less compensation than what they are legally entitled to. That document does not always bar them from demanding benefits to which they are legally entitled.[15] The reason for this policy was explained, inter alia, in Marcos v. National Labor Relations Commission, which we quote: We have heretofore explained that the reason why quitclaims are commonly frowned upon as contrary to public policy, and why they are held to be ineffective to bar claims for the full measure of the workers legal rights, is the fact that the employer and the employee obviously do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of a job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent on their claim. They pressed it. They are deemed not [to] have waived any of their rights. Renuntiatio non praesumitur. Along this line, we have more trenchantly declared that quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising from unfair labor practices of the employer. The basic reason for this is that such quitclaims and/or complete releases are against public policy and, therefore, null and void. The acceptance of termination does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. While there may be possible exceptions to this holding, we do not perceive any in the case at bar. xxx xxx xxx

We have pointed out in Veloso, et al. vs. Department of Labor and Employment, et al., that: While rights may be waived, the same must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. Article 6 of the Civil Code renders a quitclaim agreement void ab initio where the quitclaim obligates the workers concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose to reject. This runs counter to Art. 22 of the Civil Code which provides that no one shall be unjustly enriched a t the expense of another.[16] In Periquet v. NLRC, this Court set the guidelines and the current doctrinal policy regarding quitclaims and waivers, as follows: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking.[17] Hence, quitclaims in which employees voluntarily accept a reasonable amount or consideration as settlement are deemed valid. These agreements cannot be set aside merely because the parties have subsequently changed their minds.[18] Consistent with this doctrine, a tribunal has the duty of scrutinizing quitclaims brought to its attention by either party, in order to determine their validity. In the present case, petitioners themselves offered the Release and Quitclaim as a defense. Even though respondent -- in his pleadings before the labor arbiter -- was silent on the matter, he nonetheless filed this case and questioned his dismissal immediately, a few days
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after setting foot in the Philippines. In asking for payment for the unexpired portion of his employment Contract, he was eloquently taking issue with the validity of the quitclaim. His actions spoke loudly enough; words were not necessary. To determine whether the Release and Quitclaim is valid, one important factor that must be taken into account is the consideration accepted by respondent; the amount must constitute a reasonable settlement. The NLRC considered the amount of US$6,716 or SR23,153 reasonable, when compared with (1) $3,900, the three-month salary that he would have been entitled to recover if RA 8042 were applied; and (2) US$9,447, his salaries for the unexpired portion of his Contract. It is relevant to point out, however, that respondent was dismissed prior to the effectivity of RA 8042. As discussed at the outset, he is entitled to his salaries corresponding to the unexpired portion of his Contract. This amount is exclusive of the SR23,153 that he received based on the November 29, 1994 Final Settlement. The latter amount was comprised of overtime pay, vacation pay, indemnity, contract reward and notice pay -- items that were due him under his employment Contract. For these reasons, the consideration stated in the Release and Quitclaim cannot be deemed a reasonable settlement; hence, that agreement must be set aside. That respondent is a professional structural engineer did not make him less susceptible to disadvantageous financial offers, faced as he was with the prospect of unemployment in a country not his own. This Court has allowed supervisory employees to seek payment of benefits and a manager to sue for illegal dismissal even though, for a consideration, they executed deeds of quitclaims releasing their employers from liability.[19] To stress, in case of doubt, laws should be interpreted to favor the working class -- whether in the government or in the private sector -- in order to give flesh and vigor to the pro-poor and pro-labor provisions of our Constitution.[20] WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners. SO ORDERED.

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