Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No.

167045 August 29, 2008 COCOMANGAS HOTEL BEACH RESORT and/or SUSAN MUNRO, petitioners, vs. FEDERICO F. VISCA, JOHNNY G. BAREDO, RONALD Q. TIBUS, RICHARD G. VISCA and RAFFIE G. VISCA, respondents. DECISION AUSTRIA-MARTINEZ, J.: Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1 dated July 30, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 78620 which reversed and set aside the Resolution dated February 27, 2003 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-000714-2000; and the CA Resolution2 dated February 2, 2005 which denied petitioners' Motion for Reconsideration. The present controversy stemmed from five individual complaints3 for illegal dismissal filed on June 15, 1999 by Federico F. Visca (Visca), Johnny G. Barredo, Ronald Q. Tibus, Richard G. Visca and Raffie G. Visca (respondents) against Cocomangas Hotel Beach Resort and/or its ownermanager, Susan Munro (petitioners) before SubRegional Arbitration Branch No. VI of the National Labor Relations Commission (NLRC) in Kalibo, Aklan. In their consolidated Position Paper, 4 respondents alleged that they were regular employees of petitioners, with designations and dates of employment as follows: Name Federico F. Visca Johnny G. Barredo Ronald Q. Tibus Richard G. Visca Raffie G. Visca Designation Foreman Carpenter Mason Carpenter Mason/Carpenter

respondents being allowed to resume work, they filed their individual complaints for illegal dismissal. In addition to reinstatement with payment of full backwages, respondents prayed for payment of premium pay for rest day, service incentive leave pay, 13th month pay, and cost-of-living allowance, plus moral and exemplary damages and attorney's fees. In their Position Paper,5 petitioners denied any employer-employee relationship with respondents and countered that respondent Visca was an independent contractor who was called upon from time to time when some repairs in the resort facilities were needed and the other respondents were selected and hired by him. On June 30, 2000, the Labor Arbiter (LA) rendered a Decision6 dismissing the complaint, holding that respondent Visca was an independent contractor and the other respondents were hired by him to help him with his contracted works at the resort; that there was no illegal dismissal but completion of projects; that respondents were project workers, not regular employees. On August 9, 2000, respondents filed a Memorandum of Appeal7 with the NLRC. No comment thereon was filed by the petitioners. On August 29, 2002, the NLRC rendered a Decision,8 setting aside the Decision of the LA and ordering the payment to respondents of backwages computed from May 8, 1999 to July 31, 2002, 13 th month pay and service incentive leave pay for three years, in addition to 10% attorney's fees. The dispositive portion of the NLRC Decision reads: WHEREFORE, the decision dated June 30, 2000 of the Labor Arbiter is VACATED and SET ASIDE and a new decision rendered declaring the Illegal Dismissal of the complainant (sic) and ordering respondent Susan Munro to pay the complainants the following: 1. Federico F. Visca 2. Johnny G. Barredo 3. Ronald Q. Tibus 4. Richard C. Visca 5. Raffie C. Visca

P 288,816

P 211,058

P 175,774

P 200,977

tasked with the maintenance and repair of the resort facilities; on May 8, 1999, Maria Nida Iigo-Taala, the Front Desk Officer/Sales Manager, informed them not to report for work since the ongoing constructions and repairs would be temporarily suspended because they caused irritation and annoyance to the resort's guests; as instructed, they did not report for work the succeeding days; John Munro, husband of petitioner Susan Munro, subsequently visited respondent foreman Visca and informed him that the work suspension was due to budgetary constraints; when respondent Visca later discovered that four new workers were hired to do respondents' tasks, he confronted petitioner Munro who explained that respondents' resumption of work was not possible due to budgetary constraints; when not less than ten workers were subsequently hired by petitioners to do repairs in two cottages of the resort and two workers were retained after the completion without

P 211,058

P1,087,68 6. Attorney's fees (10%) Total Award

P 108,768

P1,196,45

Petitioners failed to convince the NLRC that respondent Visca was not an independent contractor and the other respondents were selected and hired by him. The NLRC held that respondents were regular employees of petitioners since all the factors determinative of employer-employee relationship were present and the work done by respondents was clearly related to petitioners' resort business. It took into account the following: (a) respondent Visca was reported by petitioners as an employee in the Quarterly Social Security System (SSS) report; (b) all of the respondents were certified to by petitioner Munro as workers and

even commended for their satisfactory performance; (c) respondents were paid their holiday and overtime pay; and (d) respondents had been continuously in petitioners' employ from three to twelve years and were all paid by daily wage given weekly. On November 18, 2002, petitioners filed a Motion for Reconsideration, arguing that respondents were project employees.10 Petitioners also filed a Supplemental to their Motion for Reconsideration.11 No opposition or answer to petitioners' motion for reconsideration and supplement was filed by respondents despite due notice.12 On February 27, 2003, the NLRC made a complete turnabout from its original decision and issued a Resolution13 dismissing the complaint, holding that respondents were not regular employees but project employees, hired for a short period of time to do some repair jobs in petitioners' resort business. Nonetheless, it ordered payment of P10,000.00 to each complainant as financial assistance. Respondents then filed a Petition for Certiorari14 with the CA raising three issues for resolution: (a) whether or not the respondents were project employees of petitioners; (b) whether or not the respondents' dismissal from work was based on valid grounds; (c) whether or not the NLRC had sufficient basis to overturn its own decision despite its overwhelming findings that respondents were illegally dismissed. On July 30, 2004, the CA rendered its assailed Decision,15 the dispositve portion of which reads: WHEREFORE, in view of the foregoing, judgment is hereby rendered by us REVERSING and SETTING ASIDE the NLRC Resolution dated February 28, 2003, REINSTATING the NLRC Decision dated August 29, 2000 [sic], and ORDERING the private respondents to pay damages in the amount of P50,000.00. The instant case is hereby REMANDED to the 4th Division NLRC, Cebu City for the purpose of UPDATING the award promulgated in its Decision dated August 29, 2000 [sic]. SO ORDERED.16 The CA held respondents were regular employees, not project workers, since in the years that petitioners repeatedly hired respondents' services, the former failed to set, even once, specific periods when the employment relationship would be terminated; that the repeated hiring of respondents established that the services rendered by them were necessary and desirable to petitioners' resort business; at the least, respondents were regular seasonal employees, hired depending on the tourist season and when the need arose in maintaining petitioners' resort for the benefit of guests. In addition to the amounts granted by the NLRC in its August 29, 2002 Decision, the CA awarded respondents P50,000.00 as damages, since their termination was attended by bad faith, in that petitioners not only gave respondents the run-around but also blatantly hired others to take respondents' place despite their claim that the so-called temporary stoppage of work was due to budgetary constraints.

On August 18, 2004, petitioners filed a Motion for Reconsideration,17 but it was denied by the CA in a Resolution18 dated February 2, 2005. Petitioners then filed the present petition 19 on the following grounds: I THE HONORABLE COURT OF APPEALS ERRED IN GIVING DUE COURSE TO THE SPECIAL CIVIL ACTION UNDER RULE 65 NOTWITHSTANDING THE FACT THAT RESPONDENTS HAVE FAILED TO PROVE THE GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION THAT WOULD ALLOW THE NULLIFICATION OF THE ASSAILED RESOLUTION OF THE NATIONAL LABOR RELATIONS COMMISSION. II THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE RESOLUTION DATED FEBRUARY 27, 2003 AND REINSTATING THE DECISION DATED AUGUST 29, 2002 RENDERED BY THE NATIONAL LABOR RELATIONS COMMISSION.20 Petitioners argue that the CA erred in giving due course to respondents' petition, since respondents failed to recite specifically how the NLRC abused its discretion, an allegation essentially required in a petition for certiorari under Rule 45 of the Rules of Court; the three issues raised by respondents in their petition before the CA required appreciation of the evidence presented below and are therefore errors of judgment, not of jurisdiction; that the factual findings of the LA and the NLRC on the lack of employer-employee relationship between petitioners and respondents should be accorded not only respect but finality. On the other hand, respondents contend that the issues raised by the petitioners call for reevaluation of the evidence presented by the parties, which is not proper in petitions for review under Rule 45 of the Rules of Court; in any case, they argue that they have amply established that they are regular employees of petitioners, since their jobs as carpenters, which include the repairs of furniture, motor boats, cottages and windbreakers, are not at all foreign to the business of maintaining a beach resort. The petition is bereft of merit. The extent of judicial review by certiorari of decisions or resolutions of the NLRC, as exercised previously by this Court and now by the CA, is described in Zarate, Jr. v. Olegario,21 thus: The rule is settled that the original and exclusive jurisdiction of this Court to review a decision of respondent NLRC (or Executive Labor Arbiter as in this case) in a petition for certiorari under Rule 65 does not normally include an inquiry into the correctness of its evaluation of the evidence. Errors of judgment, as distinguished from errors of jurisdiction, are not within the province of a special civil action for certiorari, which is merely confined to issues of jurisdiction or grave abuse of discretion.It is thus incumbent upon

petitioner to satisfactorily establish that respondent Commission or executive labor arbiter acted capriciously and whimsically in total disregard of evidence material to or even decisive of the controversy, in order that the extraordinary writ of certiorari will lie. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, and it must be shown that the discretion was exercised arbitrarily or despotically. For certiorari to lie, there must be capricious, arbitrary and whimsical exercise of power, the very antithesis of the judicial prerogative in accordance with centuries of both civil law and common law traditions.22 (Emphasis supplied) The CA, therefore, can take cognizance of a petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, committed grave abuse of discretion by capriciously, whimsically, or arbitrarily disregarding evidence which is material to or decisive of the controversy. The CA cannot make this determination without looking into the evidence presented by the parties. The appellate court needs to evaluate the materiality or significance of the evidence, which is alleged to have been capriciously, whimsically, or arbitrarily disregarded by the NLRC, in relation to all other evidence on record.23 In Garcia v. National Labor Relations Commission, 24 the Court elucidated on when certiorari can be properly resorted to, thus: [I]n Ong v. People, we ruled that certiorari can be properly resorted to where the factual findings complained of are not supported by the evidence on record. Earlier, in Gutib v. Court of Appeals, we emphasized thus: [I]t has been said that a wide breadth of discretion is granted a court of justice in certiorariproceedings. The cases in which certiorari will issue cannot be defined, because to do so would be to destroy its comprehensiveness and usefulness. So wide is the discretion of the court that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus. In the exercise of our superintending control over inferior courts, we are to be guided by all the circumstances of each particular case "as the ends of justice may require." So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial justice. And in another case of recent vintage, we further held: In the review of an NLRC decision through a special civil action for certiorari, resolution is confined only to issues of jurisdiction and grave abuse of discretion on the part of the labor tribunal. Hence, the Court refrains from

reviewing factual assessments of lower courts and agencies exercising adjudicative functions, such as the NLRC. Occasionally, however, the Court is constrained to delve into factual matters where, as in the instant case, the findings of the NLRC contradict those of the Labor Arbiter. In this instance, the Court in the exercise of its equity jurisdiction may look into the records of the case and reexamine the questioned findings. As a corollary, this Court is clothed with ample authority to review matters, even if they are not assigned as errors in their appeal, if it finds that their consideration is necessary to arrive at a just decision of the case. The same principles are now necessarily adhered to and are applied by the Court of Appeals in its expanded jurisdiction over labor cases elevated through a petition for certiorari; thus, we see no error on its part when it made anew a factual determination of the matters and on that basis reversed the ruling of the NLRC.25 (Emphasis supplied) Thus, pursuant to Garcia, the appellate court can grant a petition for certiorari when the factual findings complained of are not supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial justice; when the findings of the NLRC contradict those of the LA; and when necessary to arrive at a just decision of the case.26 In the present case, respondents alleged in its petition with the CA that the NLRCs conclusions had no basis in fact and in law, in that "it totally disregarded the evidence of the [respondents] and gave credence to the [petitioners'] asseverations which were in themselves insufficient to overturn duly established facts and conclusions."27 Consequently, the CA was correct in giving due course to the Petition for Certiorari, since respondents drew attention to the absence of substantial evidence to support the NLRC's complete turnabout from its original Decision dated August 29, 2002 finding that respondents were regular employees, to its subsequent Resolution dated February 27, 2003 classifying respondents as project employees. The next issue before the Court is whether the CA committed an error in reversing the NLRC Resolution dated February 27, 2003. The resolution of this issue principally hinges on the determination of the question whether respondents are regular or project employees. Generally, the existence of an employer-employee relationship is a factual matter that will not be delved into by this Court, since only questions of law may be raised in petitions for review.28 However, the Court is constrained to resolve the issue of whether respondents are regular or permanent employees due to the conflicting findings of fact of the LA, the NLRC and the

CA, thus, necessitating a review of the evidence on record.29 The petitioners were ambivalent in categorizing respondents. In their Position Paper30 filed before the LA, petitioners classified respondent Visca as an independent contractor and the other respondents as his employees; while in their Motion for Reconsideration31 before the NLRC, petitioners treated respondents as project employees. Further, petitioners' position in their Motion for Reconsideration before the NLRC runs contrary to their earlier submission in their Position Paper before the LA. While initially advancing the absence of an employeremployee relationship, petitioners on appeal, sang a different tune, so to speak, essentially invoking the termination of the period of their employer-employee relationship. The NLRC should not have considered the new theory offered by the petitioners in their Motion for Reconsideration. As the object of the pleadings is to draw the lines of battle, so to speak, between the litigants and to indicate fairly the nature of the claims or defenses of both parties, a party cannot subsequently take a position contrary to, or inconsistent, with his pleadings.32 It is a matter of law that when a party adopts a particular theory and the case is tried and decided upon that theory in the court below, he will not be permitted to change his theory on appeal. The case will be reviewed and decided on that theory and not approached and resolved from a different point of view. To permit a party to change his theory on appeal will be unfair to the adverse party.33 At any rate, after a careful examination of the records, the Court finds that the CA did not err in finding that respondents were regular employees, not project employees. A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season."34 Before an employee hired on a per-project basis can be dismissed, a report must be made to the nearest employment office, of the termination of the services of the workers every time completes a project, pursuant to Policy Instruction No. 20.35 In the present case, respondents cannot be classified as project employees, since they worked continuously for petitioners from three to twelve years without any mention of a "project" to which they were specifically assigned. While they had designations as "foreman," "carpenter" and "mason," they performed work other than carpentry or masonry. They were tasked with the maintenance and repair of the furniture, motor boats, cottages, and windbreakers and other resort facilities. There is likewise no evidence of the project employment contracts covering respondents' alleged periods of employment. More importantly, there is no evidence that petitioners reported the termination of respondents' supposed project employment to the DOLE as project employees. Department Order No. 19, as well as the old

Policy Instructions No. 20, requires employers to submit a report of an employees termination to the nearest public employment office every time his employment is terminated due to a completion of a project. Petitioners' failure to file termination reports is an indication that the respondents were not project employees but regular employees.36 This Court has held that an employment ceases to be coterminous with specific projects when the employee is continuously rehired due to the demands of employers business and re-engaged for many more projects without interruption.37 The Court is not persuaded by petitioners' submission that respondents' services are not necessary or desirable to the usual trade or business of the resort. The repeated and continuing need for their services is sufficient evidence of the necessity, if not indispensability, of their services to petitioners' resort business.38 In Maraguinot, Jr. v. National Labor Relations Commission,39 the Court ruled that "once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence."40 That respondents were regular employees is further bolstered by the following evidence: (a) the SSS Quarterly Summary of Contribution Payments 41 listing respondents as employees of petitioners; (b) the Service Record Certificates stating that respondents were employees of petitioners for periods ranging from three to twelve years and all have given "very satisfactory performance";42 (c) petty cash vouchers43showing payment of respondents' salaries and holiday and overtime pays. Thus, substantial evidence supported the CA finding that respondents were regular employees. Being regular employees, they were entitled to security of tenure, and their services may not be terminated except for causes provided by law. Article 27944 of the Labor Code, as amended, provides that an illegally dismissed employee shall be entitled to reinstatement, full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. The Court notes that the NLRC, in its earlier Decision dated August 29, 2002 which was affirmed by the CA, computed the award for backwages from May 8, 1999 to July 31, 2002 only. It is evident that respondents backwages should not be limited to said period. The backwages due respondents must be computed from the time they were unjustly dismissed until actual reinstatement to their former positions. Thus, until petitioners implement the reinstatement aspect, its obligation to respondents, insofar as accrued backwages and other benefits are concerned, continues to accumulate.

The fact that the CA failed to consider this when it affirmed the August 29, 2002 decision of the NLRC or that respondents themselves did not appeal the CA Decision on this matter, does not bar this Court from ordering its modification. While as a general rule, a party who has not appealed is not entitled to affirmative relief other than the ones granted in the decision of the court below, this Court is imbued with sufficient authority and discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice.45 Besides, substantive rights like the award of backwages resulting from illegal dismissal must not be prejudiced by a rigid and technical application of the rules. 46 The computation of the award for backwages from the time compensation was withheld up to the time of actual reinstatement is a mere legal consequence of the finding that respondents were illegally dismissed by petitioners. WHEREFORE, the petition is DENIED. The assailed Decision dated July 30, 2004 and Resolution dated February 2, 2005 of the Court of Appeals in CA-G.R. SP No. 78620 are AFFIRMED withMODIFICATION that the award for backwages should be computed from the time compensation was withheld up to the time of actual reinstatement. Double costs against petitioners. SO ORDERED. THIRD DIVISION PNOC-ENERGY DEVELOPMENT CORPORATION, Southern Negros Geothermal Project, Petitioner, J., G.R. No. 169353 Present:

DECISION CALLEJO, SR., J.: Before the Court is a Petition for Review on Certiorari of the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 77584 as well as its Resolution[2]dated August 11, 2005. The antecedents are as follows: Petitioner PNOC-Energy Development Corporation is a government-owned and controlled corporation engaged in the exploration, development, and utilization of energy. It undertakes several projects in areas where geothermal energy has been discovered. Each geothermal project undergoes the stages of exploration, development, and utilization or production. For each stage, several activities are undertaken such as drilling, construction, civil works, structural works, mechanical works, and electrical works until the project is finally completed. Aside from its projects in Negros Oriental, petitioner also had geothermal projects in Negros Occidental, Leyte, Albay, Sorsogon, and North Cotabato. Petitioners Southern Negros Geothermal Production Field in Negros Oriental is divided into two phases: Palinpinon I (PAL I) and Palinpinon II (PAL II). To augment its manpower requirement occasioned by the increased activities in the development of PAL II, petitioner hired the following employees in the Administration and Maintenance Section: Name 1) Leonora Torres 2) Rosela Calimpong 3) Arnel Amor 4) Wilson Nuay 5) Roberto Renzal 6) Alejandro Tabaera Date Hired Position Date Separated June 30, 1998 June 30, 1998

versus YNARES-SANTIAGO,

Chairpe rson, NATIONAL LABOR RELATIONS AUSTRIAMARTINEZ, COMMISSION, Fourth Division, CALLEJO, SR., Cebu City, and PNOC-EDC, CHICONAZARIO, and SNGPEU-ASSOCIATED LABOR NACHURA, JJ. UNIONS-TUCP, LEONORA A. TORRES, ALEJANDRO B. TABAERA, JR., ARNEL T. AMOR, ROSELA S. CALIMPONG, WILSON Promulgated: D. NUAY, and ROBERTO S. RENZAL, Respondents. April 13, 2007 x-------------------------------------------------x

July 3, 1995 Clerk/Typist July 1, 1997 Clerk/Typist May 1995 May 1995 January 1995 February 1996

24,Helper June 30, 1998 Mechanic 16,Service Driver June 30, 1998 25,Pipe Fitter 27,Mechanic June 30, 1998 June 30, 1998

The termination/expiration of their respective employment were specified in their initial employment contracts, which, however, were renewed and extended on their respective expiry dates.

On May 29, 1998, petitioner submitted reports[3] to the Department of Labor and Employment (DOLE) Regional Sub-Branch No. VII in Dumaguete City, stating that six of its employees were being terminated. Petitioner thereafter furnished the employees uniformly worded notices of termination, stating that they were being terminated from employment effective June 30, 1998 due to the substantial completion of the civil works phase of PAL II. On October 29, 1998, the six employees, herein respondents, filed before the National Labor Relations Commission (NLRC) a complaint for illegal dismissal against petitioner. Aside from reinstatement, respondents sought the payment of backwages, salary differential, collective bargaining agreement benefits, damages and attorneys fees. In their Position Paper, respondents averred that they had rendered continuous and satisfactory services from the dates of their respective employment until illegally dismissed on June 30, 1998: NAMES MONTHS and YEARS OF SERVICE 1) Arnel Amor 3 years and 1 month 2) Rosela 2 years and 11 Calimpong months 3) Wilson Nuay 3 years and 1 month 4) Roberto Renzal 3 years and 5 months 5) Alejandro 2 years and 4 months Tabaera 6) Leonora Torres 2 years and 11 months Respondents further contended that their dismissal from employment was a clear case of union busting for they had previously sought union membership and actually filed a notice of strike. For its part, petitioner asseverated that respondents were contractual employees; as such, they cannot claim to have been illegally dismissed because upon the expiration of the term of the contract or the completion of the project, their employer-employee relationship also ended. After evaluating the evidence presented, the Labor Arbiter rendered judgment dismissing the complaint for lack of legal and factual basis. [4] The Labor Arbiter ruled that respondents were not dismissed from work; the employer-employee relationship between the parties was severed upon the expiration of the respective contracts of respondents and the completion of the projects concerned.

Not satisfied, respondents interposed an appeal to the NLRC which rendered judgment reversing the decision of the Labor Arbiter. The dispositive portion reads: WHEREFORE, the decision of the Labor Arbiter dated May 31, 1999 is SET ASIDE and a new one is rendered ORDERING the respondent the following: (1) to immediately reinstate the following complainants to their respective positions without loss of seniority rights and other privileges: a) b) c) d) LEONORA TORRES ARNEL AMOR WILSON NUAY ROBERTO RENZAL, and e) ALEJANDRO TABAERA; (2) to pay each of the complainants his/her backwages from July 1, 1998 until actual reinstatement at the rate of P116.00 per day plus his/her 13th month pay and service incentive leave pay for the same period. (3) to pay attorneys fees equivalent to ten percent (10%) of the total award. The claim of Rosela Calimpong is dismissed for lack of merit. SO ORDERED.[5] The NLRC ratiocinated that respondents were regular non-project employees for having worked for more than one year in positions that required them to perform activities necessary and desirable in the normal business or trade of petitioner. The NLRC further ruled that the employment contracts of respondents were not for a specific project or for a fixed period. According to the NLRC, the dismissals made on June 30, 1998 under the pretext of project completion were illegal, being founded on an invalid, unjust, and unauthorized cause. Respondents filed a motion for reconsideration, which the NLRC denied with modification in a Resolution[6] dated March 19, 2003. Only respondent Rosela Calimpong was granted relief.

Aggrieved, petitioner filed a petition for certiorari before the CA seeking to have the NLRC decision reversed. It claimed that respondents were engaged for one definite phase of petitioners geothermal project, the execution and implementation of the civil works portion of the Fluid Collection and Disposal System (FCDS) and Associated Work Projects. Petitioner averred that at the time of respondents termination, the projects had already been substantially if not fully completed. On August 31, 2004, the CA dismissed the petition. The fallo of the decision reads: WHEREFORE, premises considered, the petition is hereby DENIED. The assailed May 23, 2001 Decision and March 19, 2003 Resolution of the National Labor Relations Commission, Fourth Division of Cebu City are AFFIRMED. SO ORDERED.[7] The CA ruled that respondents were performing activities necessary and desirable in the normal operations of the business of petitioner. The appellate court explained that the repeated re-hiring and the continuing need for the services of the project employees over a span of time had made them regular employees. The motion for reconsideration filed by petitioner was denied by the CA in its Resolution[8] dated August 11, 2005. Petitioner sought relief from this Court via petition for review on certiorari. The pivotal questions involved in this case for our resolution are: (a) whether respondents were project employees or regular employees; and (b) whether or not they were illegally dismissed from employment. Petitioner argues that respondents are project employees because as gleaned from their standard contracts of employment, they were hired for a specific project or undertaking, the completion or termination of which had been determined at the time of their engagement. Their contracts clearly indicated the completion or termination of the specific project or of the specific phase thereof at the time they were engaged. For their part, respondents posit that they were undeniably performing activities which are necessary or desirable in the usual trade or business of petitioner. They aver that the completion of their individual employment was not determined at the time of their engagement due to the fact that their contracts were renewed and extended over and over again. They claim that had the periods of their employment been determined, then their work with petitioner would not

have lasted beyond the three-month period provided in their respective initial employment contracts. They likewise theorized that the contracts they signed were short-term contracts covering a long period of the same activity, not for a specific project or undertaking. The contentions of petitioner have no merit. Customarily, the findings made by the NLRC are afforded great respect and are even clothed with finality and considered binding on this Court, except that when such findings are contrary to those of the Labor Arbiter, this Court may elect to re-examine the same, as we shall do in this case now. Article 280 of the Philippines states the Labor Code of

Article 280. REGULAR AND CASUAL EMPLOYEES. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Thus, the applicable formula to ascertain whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. [9] As we held in Grandspan Development Corporation v. Bernardo:[10] The principal test for determining whether particular employees are properly characterized as project employees, as distinguished from regular employees, is whether or not the project employees were

assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project.[11] As defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee.[12] However, petitioner failed to substantiate its claim that respondents were hired merely as project employees. A perusal of the records of the case reveals that the supposed specific project or undertaking of petitioner was not satisfactorily identified in the contracts of respondents. To illustrate, the following is a list of the names of respondents and the projects written in their employment contracts: NAMES Leonora Torres PROJECT NAME A. Additional Manpower cover additional workloads of PAL II transferred to PAL I Operations,[13] PAL II Transfer to PAL I Operations[14] Arnel T. EDC-Drilling,[15] Maintenance of Drilling Amor Materials,[16] Assist in Repair Maintenance of Vehicles/Equipments at Equipment Maintenance Section[17] Wilson D. EDC Drilling Activities,[18] Rig #3 Operation Nuay on OK-3RWOBL-2DWO,[19] Maintenance of Drilling Materials,[20]LG4D Drilling [21] Operation, SNGP FCDS Project, [22] Fabrication Personal Driver for CD Turned-Over Projects[23] Roberto S. PAL II FCDS Nasuji-NJA RI Line and Renzal Associated Works,[24]PAL II FCDS PN33/PN25 Branchline/ Nasuji-NJASogongon,[25] SNGP FCDS Project, [26] Cawayan Restoration Works,[27] SNGP FCDS Project PAL I/PAL II Refurbishments,[28] Support Workload increase in Fabrication/Equipment Maintenance Section[29] Alejandro B. Temporary Increase in Workload of Tabaera, Maintenance and Repair Activities of Light Jr. and Heavy Equipment, [30] Troubleshooting/Repair of All Equipments[31] Rosela S. PAL II Transfer to PAL I Operations Calimpong Clerical Workloads,[32]Additional Manpower to cover additional workloads of PAL II transferred to PAL I Operations[33] Unmistakably, the alleged projects stated in the employment contracts were either too vague or imprecise to be considered as the specific undertaking contemplated by law. Petitioners act of repeatedly and continuously hiring respondents to do the same kind of work belies its contention that respondents were hired

for a specific project or undertaking. The absence of a definite duration for the project/s has led the Court to conclude that respondents are, in fact, regular employees. Another cogent factor which militates against petitioners insistence that the services of respondents were terminated because the projects for which they were hired had been completed is the fact that respondents contracts of employment were extended a number of times for different or new projects. It must be stressed that a contract that misuses a purported fixed-term employment to block the acquisition of tenure by employees deserves to be struck down for being contrary to law, morals, good customs, public order and public policy.[34] In Filipinas Pre-Fabricated Building Systems (Filsystems), Inc. v. Puente,[35] the Court ruled that the length of service of a project employee is not the controlling test of employment tenure but whether or not the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.[36] Indeed, while length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, respondents had been project employees several times over. Their employment ceased to be coterminous with specific projects when they were repeatedly re-hired by petitioner.[37] Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees.[38] As regular workers, respondents are entitled to security of tenure under Article 279 of the Labor Code and can only be dismissed for a just or authorized cause. Article 279 of the Labor Code provides: Article. 279. SECURITY OF TENURE. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

In termination cases, it is incumbent upon the employer to prove by the quantum of evidence required by law that the dismissal of an employee is not illegal; otherwise the dismissal would be unjustified. [39] In the case at bar, petitioner failed to discharge the burden. The notices of termination indicated that respondents services were terminated due to the completion of the project. However, this allegation is contrary to the statement of petitioner in some of its pleadings that the project was merely substantially completed. There is likewise no proof that the project, or the phase of work to which respondents had been assigned, was already completed at the time of their dismissal. Since respondents were illegally dismissed from work, they are entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the time their compensation was withheld from them up to the time of their actual reinstatement, pursuant to Article 279 of the Labor Code.[40] WHEREFORE, in the light of the foregoing, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 77584 and the Resolution areAFFIRMED. No costs. SO ORDERED.

Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients.[3] Private respondent Solon worked for petitioner. His employment records is as follows: December 14, 1994 up to January 14, 1995 St. Charbel Warehouse February 1, 1995 up to April 30, 1995 St. Charbel Warehouse May 23, 1995 up to June 23, 1995 St. Charbel Warehouse August 15, 1995 up to October 31, 1995 St. Charbel Warehouse November 2, 1995 up to January 31, 1996 St. Charbel Warehouse May 13, 1996 up to June 15, 1996 Ayala Triangle August 27, 1996 up to November 30, 1996 St. Charbel Warehouse[4] July 14, 1997 up to November 1997 ICPWI Warehouse November 1997 up to January 5, 1998 Cathedral Heights January 6, 1998 Rockwell Center[5] On February 23, 1998, while private respondent was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. When private respondent went to the petitioners office on February 24, 1998 to verify his status, he found out that indeed, he had been terminated. He went back to petitioners office on February 27, 1998 to sign a clearance so he could claim his 13th month pay and tax refunds. However, he had second thoughts and refused to sign the clearance when he read the clearance indicating he had resigned. On March 6, 1998, he filed a complaint alleging that he was illegally dismissed without just cause and without due process.[6] In a Decision dated February 26, 1999, the Labor Arbiter ruled that private respondent was a regular employee and could only be removed for cause. Petitioner was ordered to reinstate private respondent to his former position with full backwages from the time his salary was withheld until his actual reinstatement, and pay him service incentive leave pay, and 13 th month pay for three years in the amount of P2,880 and P14,976, respectively. Petitioner appealed to the National Labor Relations Commission (NLRC), which ruled: WHEREFORE, prescinding from the foregoing and in the interest of justice, the decision of the Labor Arbiter is hereby AFFIRMED with a MODIFICATION that the 13th month pay should be given only for the year 1997 and portion of 1998. Backwages shall be computed from the time he was illegally dismissed up to the time of

FIRST DIVISION

[G.R. No. 152427. August 9, 2005]

INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and GLEN SOLON, respondents. DECISION QUISUMBING, J.: This petition for review assails the Decision[1] dated October 30, 2001 of the Court of Appeals and its Resolution[2] dated February 28, 2002 in CA-G.R. SP No. 60136, denying the petitioners motion for reconsideration for lack of merit. The decision affirmed the National Labor Relations Commission (NLRC) which declared private respondent Glen Solon a regular employee of the petitioner and awarded him 13 th month pay, service incentive leave pay, reinstatement to his former position with full backwages from the time his salary was withheld until his reinstatement.

his actual reinstatement. Likewise, service incentive leave pay for three (3) years is also awarded to appellee in the amount of P2,880.00. SO ORDERED.[7] Petitioners Motion for Reconsideration was denied.
[8]

In our review of the employment contracts of private respondent, we are convinced he was initially a project employee. The services he rendered, the duration and scope of each project are clear indications that he was hired as a project employee. We concur with the NLRC that while there were several employment contracts between private respondent and petitioner, in all of them, private respondent performed tasks which were usually necessary or desirable in the usual business or trade of petitioner. A review of private respondents work assignments patently showed he belonged to a work pool tapped from where workers are and assigned whenever their services were needed. In a work pool, the workers do not receive salaries and are free to seek other employment during temporary breaks in the business. They are like regular seasonal workers insofar as the effect of temporary cessation of work is concerned. This arrangement is beneficial to both the employer and employee for it prevents the unjust situation of coddling labor at the expense of capital and at the same time enables the workers to attain the status of regular employees.[15] Nonetheless, the pattern of rehiring and the recurring need for his services are sufficient evidence of the necessity and indispensability of such services to petitioners business or trade.[16] In Maraguinot, Jr. v. NLRC[17] we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. In this case, did the private respondent become a regular employee then? The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business.[18] Thus, we held that where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees.[19] While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business. [20] Where

Petitioner appealed to the Court of Appeals, alleging that the NLRC committed grave abuse of discretion in finding that the private respondent was a regular employee and in awarding 13 th month pay, service incentive leave pay, and holiday pay to the private respondent despite evidence of payment. The said petition was dismissed for lack of merit. [9] Before us now, petitioner raises the following issues: (1) Whether the respondent is a project employee of the petitioner or a regular employee; and (2) Whether the Court of Appeals erred seriously in awarding 13th month pay for the entire year of 1997 and service incentive leave pay to the respondent and without taking cognizance of the evidence presented by petitioner.[10] The petitioner asserts that the private respondent was a project employee. Thus, when the project was completed and private respondent was not re-assigned to another project, petitioner did not violate any law since it was petitioners discretion to re-assign the private respondent to other projects.[11] Article 280 of the Labor Code states: The provisions of written agreement of the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season (Italics supplied.) We held in Tomas Lao Construction v. NLRC[12] that the principal test in determining whether an employee is a project employee or regular employee, is, whether he is assigned to carry out a specific project or undertaking, the duration (and scope) of which are specified at the time the employee is engaged in the project.[13] Project refers to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times.[14]

from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order.[21] Further, Policy Instructions No. 20 requires employers to submit a report of an employees termination to the nearest public employment office every time his employment was terminated due to a completion of a project. The failure of the employer to file termination reports is an indication that the employee is not a project employee. [22] Department Order No. 19 superseding Policy Instructions No. 20 also expressly provides that the report of termination is one of the indications of project employment.[23] In the case at bar, there was only one list of terminated workers submitted to the Department of Labor and Employment. [24] If private respondent was a project employee, petitioner should have submitted a termination report for every completion of a project to which the former was assigned. Juxtaposing private respondents employment history, vis the requirements in the test to determine if he is a regular worker, we are constrained to say he is. As a regular worker, private respondent is entitled to security of tenure under Article 279 of the Labor Code[25] and can only be removed for cause. We found no valid cause attending to private respondents dismissal and found also that his dismissal was without due process. Additionally, Article 277(b) of the Labor Code provides that ... Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment The failure of the petitioner to comply with these procedural guidelines renders its dismissal of private respondent, illegal. An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and to his other benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement, pursuant to Article 279 of the Labor Code. However, we note that the private respondent had been paid his 13th month pay for the year 1997. The Court of Appeals erred in granting the same to him.

Article 95(a) of the Labor Code governs the award of service incentive leave. It provides that every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay, and Section 3, Rule V, Book III of the Implementing Rules and Regulations, defines the term at least one year of service to mean service within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. Accordingly, private respondents service incentive leave credits of five days for every year of service, based on the actual service rendered to the petitioner, in accordance with each contract of employment should be computed up to the date of reinstatement pursuant to Article 279 of the Labor Code.[26] WHEREFORE, the assailed Decision dated October 30, 2001 and the Resolution dated February 28, 2002 of the Court of Appeals in CA-G.R. SP No. 60136, are AFFIRMED with MODIFICATION. The petitioner is hereby ORDERED to (1) reinstate the respondent with no loss of seniority rights and other privileges; and (2) pay respondent his backwages, 13thmonth pay for the year 1998 and Service Incentive Leave Pay computed from the date of his illegal dismissal up to the date of his actual reinstatement. Costs against petitioner. SO ORDERED.

THIRD DIVISION

[G.R. No. 149440. January 28, 2003]

HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS and CRISTINE SEGURA, petitioners, vs. NATIONAL FEDERATION OF SUGARCANE WORKERSFOOD AND GENERAL TRADE, respondents. DECISION PANGANIBAN, J.: Although the employers have shown that respondents performed work that was seasonal in nature, they failed to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these workers have served them for several years already. Hence, they are regular -- not seasonal -- employees.

The Case Before the Court is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the February 20, 2001 Decision of the Court of Appeals[1] (CA) in CA-GR SP No. 51033. The dispositive part of the Decision reads: WHEREFORE, premises considered, the instant special civil action for certiorari is hereby DENIED. [2] On the other hand, the National Labor Relations Commission (NLRC) Decision,[3] upheld by the CA, disposed in this wise: WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby SET ASIDE and VACATED and a new one entered declaring complainants to have been illegally dismissed. Respondents are hereby ORDERED to reinstate complainants except Luisa Rombo, Ramona Rombo, Bobong Abriga and Boboy Silva to their previous position and to pay full backwages from September 1991 until reinstated. Respondents being guilty of unfair labor practice are further ordered to pay complainant union the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages.[4]

b) The management will give priority to the women workers who are members of the union in case work relative x x x or amount[ing] to gahit and [dipol] arises. c) Ariston Eruela Jr. will be given back his normal work load which is six (6) days in a week. d) The management will provide fifteen (15) wagons for the workers and that existing workforce prior to the actual strike will be given priority. However, in case the said workforce would not be enough, the management can hire additional workers to supplement them. e) The management will not anymore allow the scabs, numbering about eighteen (18) workers[,] to work in the hacienda; and f) The union will immediately lift the picket upon signing of this agreement. However, alleging that complainants failed to load the fifteen wagons, respondents reneged on its commitment to sit down and bargain collectively. Instead, respondent employed all means including the use of private armed guards to prevent the organizers from entering the premises. Moreover, starting September 1991, respondents did not any more give work assignments to the complainants forcing the union to stage a strike on January 2, 1992. But due to the conciliation efforts by the DOLE, another Memorandum of Agreement was signed by the complainants and respondents which provides: Whereas the union staged a strike against management on January 2, 1992 grounded on the dismissal of the union officials and members; Whereas parties to the present dispute agree to settle the case amicably once and for all; Now therefore, in the interest of both labor and management, parties herein agree as follows: 1. That the list of the names of affected union members hereto attached and made part of this agreement shall be referred to the Hacienda payroll of 1990 and determine whether or not this concerned Union members are hacienda workers; 2. That in addition to the payroll of 1990 as reference, herein parties will use as guide the subjects of a Memorandum of Agreement entered into by and between the parties last January 4, 1990; 3. That herein parties can use other employment references in support of their respective claims whether or not any or all of the listed 36 union members are

The Facts The facts are summarized in the NLRC Decision as follows: Contrary to the findings of the Labor Arbiter that complainants [herein respondents] refused to work and/or were choosy in the kind of jobs they wanted to perform, the records is replete with complainants persistence and dogged determination in going back to work. Indeed, it would appear that respondents did not look with favor workers having organized themselves into a union. Thus, when complainant union was certified as the collective bargaining representative in the certification elections, respondents under the pretext that the result was on appeal, refused to sit down with the union for the purpose of entering into a collective bargaining agreement. Moreover, the workers including complainants herein were not given work for more than one month. In protest, complainants staged a strike which was however settled upon the signing of a Memorandum of Agreement which stipulated among others that: a) The parties will initially meet for CBA negotiations on the 11th day of January 1991 and will endeavor to conclude the same within thirty (30) days.

employees or hacienda workers or not as the case may be; 4. That in case conflict or disagreement arises in the determination of the status of the particular hacienda workers subject of this agreement herein parties further agree to submit the same to voluntary arbitration; 5. To effect the above, a Committee to be chaired by Rose Mengaling is hereby created to be composed of three representatives each and is given five working days starting Jan. 23, 1992 to resolve the status of the subject 36 hacienda workers. (Union representatives: Bernardo Torres, Martin Alas-as, Ariston Arulea Jr.) Pursuant thereto, the parties subsequently met and the Minutes of the Conciliation Meeting showed as follows: The meeting started at 10:00 A.M. A list of employees was submitted by Atty. Tayko based on who received their 13th month pay. The following are deemed not considered employees: 1. 2. 3. 4. Luisa Rombo Ramona Rombo Bobong Abrega Boboy Silva

But for all their persistence, the risk they had to undergo in conducting a strike in the face of overwhelming odds, complainants in an ironic twist of fate now find themselves being accused of refusing to work and being choosy in the kind of work they have to perform.[5] (Citations omitted)

Ruling of the Court of Appeals The CA affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on leave during the off-season and were therefore still employed by petitioners. Moreover, the workers enjoyed security of tenure. Any infringement upon this right was deemed by the CA to be tantamount to illegal dismissal. The appellate court found neither rhyme nor reason in petitioners argument that it was the workers themselves who refused to or were choosy in their work. As found by the NLRC, the record of this case is replete with complainants persistence and dogged determination in going back to work.[6] The CA likewise concurred with the NLRCs finding that petitioners were guilty of unfair labor practice. Hence this Petition.[7]

Issues Petitioners raise the following issues for the Courts consideration: A. Whether or not the Court of Appeals erred in holding that respondents, admittedly seasonal workers, were regular employees, contrary to the clear provisions of Article 280 of the Labor Code, which categorically state that seasonal employees are not covered by the definition of regular employees under paragraph 1, nor covered under paragraph 2 which refers exclusively to casual employees who have served for at least one year. B. Whether or not the Court of Appeals erred in rejecting the ruling in Mercado, xxx, and relying instead on rulings which are not directly applicable to the case at bench, viz, Philippine Tobacco, Bacolod-Murcia, and Gaco, xxx. C. Whether or not the Court of Appeals committed grave abuse of discretion in upholding the NLRCs conclusion that private respondents were illegally dismissed, that petitioner[s were] guilty of unfair labor practice, and that the union be awarded moral and exemplary damages.[8]

The name Orencio Rombo shall be verified in the 1990 payroll. The following employees shall immediately upon availability of work: 1. Jose Tejares 2. Rico Rombo 3. Jr. Dagle be reinstated

7.

Alejandro

Dagle

8.

Gaudioso

Ricardo Dagle

9.

Martin Alas-as

4. Jesus Abrega 5. Sr. 6. Jr.

Silva

10.

Cresensio

Fernando Silva

11.

Ariston Eruela

Ernesto

Tejares

12.

Ariston

Eruela

When respondents again reneged on its commitment, complainants filed the present complaint.

Consistent with the discussion in petitioners Memorandum, we shall take up Items A and B as the first issue and Item C as the second.

Abriga and Boboy Silva -- repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter. Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular employment is applicable. In Abasolo v. National Labor Relations Commission,[13] the Court issued this clarification: [T]he test of whether or not an employee is a regular employee has been laid down in De Leon v. NLRC, in which this Court held: The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. xxx x xx xxx

The Courts Ruling The Petition has no merit.

First Issue: Regular Employment At the outset, we must stress that only errors of law are generally reviewed by this Court in petitions for review on certiorari of CA decisions. [9] Questions of fact are not entertained.[10] The Court is not a trier of facts and, in labor cases, this doctrine applies with greater force.[11] Factual questions are for labor tribunals to resolve.[12] In the present case, these have already been threshed out by the NLRC. Its findings were affirmed by the appellate court. Contrary to petitioners contention, the CA did not err when it held that respondents were regular employees. Article 280 of the Labor Code, as amended, states: Art. 280. Regular and Casual Employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature andthe employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exist. (Italics supplied) For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. The evidence proves the existence of the first, but not of the second, condition. The fact that respondents -- with the exception of Luisa Rombo, Ramona Rombo, Bobong

x x x [T]he fact that [respondents] do not work continuously for one whole year but only for the duration of the x x x season does not detract from considering them in regular employment since in a litany of cases this Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until reemployed.[14] The CA did not err when it ruled that Mercado v. NLRC[15] was not applicable to the case at bar. In the earlier case, the workers were required to perform phases of agricultural work for a definite period of time, after which their services would be available to any other farm owner. They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on and off for any single phase thereof. On the other hand, herein respondents, having performed the same tasks for petitioners every season for several years, are considered the latters regular employees for their respective tasks. Petitioners eventual refusal to use their services -- even if they were ready, able and willing to perform their usual duties whenever these were available -- and hiring of other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CAs dismissal of what petitioners claim was their valid exercise of a management prerogative. The sudden changes in work assignments reeked of bad faith. These changes were implemented immediately after respondents had organized themselves into a union and started demanding collective bargaining. Those who were union members were effectively deprived of their jobs. Petitioners move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code. Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause.[16] In the case at bar, petitioners failed to prove any such cause for the dismissal of respondents who, as discussed above, are regular employees.

[G. R. No. 148492. May 9, 2003]

Second Issue: Unfair Labor Practice The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as follows: Indeed, from respondents refusal to bargain, to their acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but conclude that respondents did not want a union in their haciendaa clear interference in the right of the workers to self-organization.[17] We uphold the CAs affirmation of the above findings. Indeed, 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 even finality. Their findings are binding on the Supreme Court.[18] Verily, their conclusions are accorded great weight upon appeal, especially when supported by substantial evidence.[19] Consequently, the Court is not duty-bound to delve into the accuracy of their factual findings, in the absence of a clear showing that these were arbitrary and bereft of any rational basis.
[20]

BUENAVENTURA C. MAGSALIN & COCA-COLA BOTTLERS PHILS., INC., petitioners, vs. NATIONAL ORGANIZATION OF WORKING MEN (N.O.W.M.), RODOLFO MELGAR, ARNEL DELOS SANTOS, SILVERIO MINDAJAO, RUBEN NAVALES, BOBBY AUSTERO, RAYMUNDO GAUDICOS, CHRISTOPHER PERALTA, GIOVANI DELA CRUZ, JOSELITO OCCIDENTAL, AMADO BODASAN, FREDERIK MAGALINO, CHITO OCCIDENTAL, ALEXANDER DELOS SANTOS, DEONIL MESA, OLIVER VILLAFLOR, ROBERTO TUMONBA, RODRIGO ANGELES, ROMMEL ABAD, FELIX AVENIDO, ARMANDO AMOR, FREDERICK DE GUZMAN, CEA CARMELO, MARIANO CAETE, ALBERTO ANTONES, ROMEO BASQUINAS, ROGELIO MALINIS, EDMUNDO BAYOS, RAMIL REVADO, JOEL PIATA, OSCAR MALINAY, ROBERT REYES, JIMMY REYES, RETCHEL HAUTEA, VICTORINO TORRALBA, NOEL RUBAI, RENATO DE OCAMPO, JESUS NOZON, JOEL MALINIS, REYNALDO GREGORY, MICHAEL RUBIA, JOSELITO VILLANUEVA, LEONARDO MONDINA, EDUARDO BELLA, WILFREDO BELLA, ALBERTO MAGTIBAY, MIGUEL CUESTA, JOSE MARCOS RODRIGUEZ III, HERMINIO ROFLO, ERNIE CHAVEZ, NELSON LOGRONIO, LEONILO GALAPIN, REY PANGILINAN, LARRY JAVIER, MATIAS ARBUES, RONILO AUSTERO, ADEMAR ESTUITA, EDWIN DE LEON, RANDY DE CHAVEZ, respondents. DECISION VITUG, J.: Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as sales route helpers for a limited period of five months. After five months, respondent workers were employed by petitioner company on a day-to-day basis. According to petitioner company, respondent workers were hired to substitute for regular sales route helpers whenever the latter would be unavailable or when there would be an unexpected shortage of manpower in any of its work places or an unusually high volume of work. The practice was for the workers to wait every morning outside the gates of the sales office of petitioner company. If thus hired, the workers would then be paid their wages at the end of the day. Ultimately, respondent workers asked petitioner company to extend to them regular appointments. Petitioner company refused. On 07 November 1997, twenty-three (23) of the temporary

The finding of unfair labor practice done in bad faith carries with it the sanction of moral and exemplary damages.[21] WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED.

FIRST DIVISION

workers (herein respondents) filed with the National Labor Relations Commission (NLRC) a complaint for the regularization of their employment with petitioner company. The complaint was amended a number of times to include other complainants that ultimately totaled fifty-eight (58) workers. Claiming that petitioner company meanwhile terminated their services, respondent workers filed a notice of strike and a complaint for illegal dismissal and unfair labor practice with the NLRC. On 01 April 1998, the parties agreed to submit the controversy, including the issue raised in the complaint for regularization of employment, for voluntary arbitration. On 18 May 1998, the voluntary arbitrator rendered a decision dismissing the complaint on the thesis that respondents (then complainants) were not regular employees of petitioner company. Respondent workers filed with the Court of Appeals a petition for review under Rule 43 of the Rules of Civil Procedure assailing the decision of the voluntary arbitrator, therein contending that 1. The Voluntary Arbitrator committed errors in finding that petitioners voluntarily and knowingly agreed to be employed on a day-to-day basis; and 2. The Voluntary Arbitrator committed errors in finding that petitioners dismissal was valid.[1] In its decision of 11 August 2000, the Court of Appeals reversed and set aside the ruling of the voluntary arbitrator, it concluded WHEREFORE, the assailed decision of the Voluntary Arbitrator is hereby REVERSED and SET ASIDE and anew one is entered: 1. Declaring petitioners as regular employees of Coca-Cola Bottlers Phils., Inc. and their dismissal from employment as illegal; 2. Ordering respondent Coca-Cola Bottlers Phils., Inc. to reinstate petitioners to their former positions with full backwages, inclusive of allowances that petitioners had been receiving during their employment and 13th month pay, computed from the date of their termination up to the time of their actual reinstatement (Paramount Vinyl Product Corp. vs. NLRC, 190 SCRA 526).[2] Petitioner companys motion for reconsideration was denied in a resolution, dated 21 May 2001, of the appellate court. The focal issues revolve around the matter of whether or not the nature of work of respondents in the company is of such nature as to be deemed necessary and desirable in the usual business or trade of petitioner that could qualify them to be regular employees.

The basic law on the case is Article 280 of the Labor Code. Its pertinent provisions read: Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Coca-Cola Bottlers Phils., Inc., is one of the leading and largest manufacturers of softdrinks in the country. Respondent workers have long been in the service of petitioner company. Respondent workers, when hired, would go with route salesmen on board delivery trucks and undertake the laborious task of loading and unloading softdrink products of petitioner company to its various delivery points. Even while the language of law might have been more definitive, the clarity of its spirit and intent, i.e., to ensure a regular workers security of tenure, however, can hardly be doubted. In determining whether an employment should be considered regular or nonregular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade. But, although the work to be performed is only for a specific project or seasonal, where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. The employment of such person is also then deemed to be regular with respect to such activity and while such activity exists.[3]

The argument of petitioner that its usual business or trade is softdrink manufacturing and that the work assigned to respondent workers as sales route helpers so involves merely postproduction activities, one which is not indispensable in the manufacture of its products, scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are directly involved in the production of softdrinks may be held performing functions necessary and desirable in its usual business or trade, there would have then been no need for it to even maintain regular truck sales route helpers. The nature of the work performed must be viewed from a perspective of the business or trade in its entirety[4] and not on a confined scope. The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of petitioner company. The Court of Appeals has found each of respondents to have worked for at least one year with petitioner company. While this Court, in Brent School, Inc. vs. Zamora,[5] has upheld the legality of a fixed-term employment, it has done so, however, with a stern admonition that where from the circumstances it is apparent that the period has been imposed to preclude the acquisition of tenurial security by the employee, then it should be struck down as being contrary to law, morals, good customs, public order and public policy. The pernicious practice of having employees, workers and laborers, engaged for a fixed period of few months, short of the normal six-month probationary period of employment, and, thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of the law cannot be countenanced. The fact that respondent workers have agreed to be employed on such basis and to forego the protection given to them on their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many of our people and the resulting unevenness between labor and capital. A contract of employment is impressed with public interest. The provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other.[6] With respect to the Release, Waiver and Quitclaim executed by thirty-six (36) of the original complainants, namely, Rommel Abad, Armando Amor, Bobby Austero, Felix Avenido, Amado Badasan, Edmundo Bayos, Eduardo Bella, Jr., Mariano Caete, Carmelo Cea, Ernie Chavez, Randy Dechaves, Frederick De Guzman, Renato De Ocampo, Ademar Estuita, Leonilo Galapin, Raymund Gaudicos, Retchel Hautea, Larry Javier, Nelson Logrinio, Alberto Magtibay, Frederick Magallano, Rogelio Malinis, Rodolfo Melgar, Silverio Mindajao, Leonardo Mondina, Ruben Navales, Rey Pangilinan, Christopher Peralta, Jimmy Reyes, Herminio Roflo, Michael Rubia, Noel Rubia, Roberto Tumomba, Oliver Villaflor, and Joselito Villanueva, this Court finds the execution of the same to be in order. During the

pendency of the appeal with the Court of Appeals, these thirty-six (36) complainants individually executed voluntarily a release, waiver and quitclaim and received from petitioner company the amount of fifteen thousand (P15,000.00) pesos each. The amount accords with the disposition of the case by the voluntary arbitrator thusly: WHEREFORE, above premises considered, the herein complaint is hereby DISMISSED for lack of merit. However, we cannot completely negate the fact that complainants did and do actually render services to the Company. It is with this in mind and considering the difficulty the complainants may face in looking for another job in case they are no longer re-engaged that we direct the company to pay complainants Fifteen Thousand Pesos each (P15,000.00) as financial assistance. It is however understood that the financial assistance previously extended by the Company to some of the complainants shall be deducted from the financial assistance herein awarded.[7] The receipt of the amount awarded by the voluntary arbitrator, as well as the execution of a release, waiver and quitclaim, is, in effect, an acceptance of said decision. There is nothing on record which could indicate that the execution thereof by thirty-six (36) of the respondent workers has been attended by fraud or deceit. While quitclaims executed by employees are commonly frowned upon as being contrary to public policy and are ineffective to bar claims for the full measure of their legal rights, there are, however, legitimate waivers that represent a voluntary and reasonable settlement of laborers claims which should be so respected by the Court as the law between the parties.[8] Where the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. Dire necessity is not an acceptable ground for annulling the release, when it is not shown that the employee has been forced to execute it.[9] WHEREFORE, the questioned decision of the Court of Appeals, in CA-G.R. SP No. 47872 is hereby AFFIRMED with MODIFICATION in that the Release, Waiver and Quitclaim executed by the thirty-six (36) individual respondents are hereby declared VALID and LEGAL. SO ORDERED.

Republic SUPREME Manila FIRST DIVISION G.R. No. 169750

of

the

Philippines COURT

February 27, 2007

RURAL BANK OF CANTILAN, INC., and WILLIAM HOTCHKISS III, Petitioners, vs. ARJAY RONNEL H. JULVE, Respondent. DECISION SANDOVAL-GUTIERREZ, J.: For our resolution is the instant Petition for Review on Certiorari assailing the Decision1 of the Court of Appeals (Twenty Second Division, Cagayan de Oro City) dated September 23, 2004 in CA-G.R. SP No. 77206 and its Resolution of September 6, 2005. The facts of this case as found by the Court of Appeals are: On August 1, 1997, the Rural Bank of Cantilan, Inc., petitioner, hired respondent as a management trainee. Later, he was appointed as planning and marketing officer. On June 18, 2001, William Hotchkiss III (also a petitioner), president of petitioner bank, issued a memorandum addressed to all its branch managers informing them of the abolition of the positions of planning and marketing officer and remedial officer; that this was undertaken in accordance with the banks Personnel Streamlining Program; and that the operations officer shall absorb the functions of the abolished offices. On July 18, 2001, Hotchkiss sent respondent a memorandum stating that he has been appointed bookkeeper I at the banks branch in Madrid, Surigao del Sur effective immediately with the same salary corresponding to his old position. Initially, respondent agreed to accept the appointment, but eventually, he changed his mind and made the following notation on Hotchkiss memorandum, thus: I am withdrawing my signature on this appointment because I feel that this is a demotion (on the position itself and allowances) and not a lateral transfer as what the President told me yesterday. I believe I do not deserve a demotion. Thank you. On August 9, 2001, Hotchkiss appointed respondent as bookkeeper I and assistant branch head of the Madrid branch. However, he did not report for work. On September 11, 2001, Hotchkiss directed respondent to explain why he should not be sanctioned for his failure to assume his new post at the Madrid branch.1awphi1.net

The following day, respondent submitted his written explanation, which partly reads: I regret to say that I am not accepting the position of Asst. Branch Head of RBCI-Madrid Branch for the very reason that the papers were not left with me by the Admin. Officer after she let me read them. Considering that Asst. Branch Head is a newly-created position, I requested her for a copy of the said papers first so I can thoroughly study them before making my decision. But she immediately took them back from me after I told her about this. On September 14, 2001, respondent filed with the Regional Arbitration Branch No. XIII, National Labor Relations Commission (NLRC), Butuan City, a complaint for constructive dismissal against petitioners, docketed as NLRC Case No. RAB-13-09-00276-2001. On January 14, 2002, the Labor Arbiter rendered a Decision, the dispositive portion of which is partly reproduced below: WHEREFORE, premises hereby entered: considered, judgment is

1. Declaring complainant illegally dismissed;

as

constructively

2. Ordering respondents to reinstate complainant to his former or equivalent position without loss of seniority rights with full backwages from the time his salary was withheld from him up to the time he is actually reinstated; 3. To pay complainant his partial backwages in the amount of P57,165.33 computed up to the date of this decision as follows: A. BACKWAGES FROM 16 Oct 2001 to 15 Jan 2002 (4 months) (Partial) P12,192.50 + 1,000 x 4 = P52,768.00 Plus P52,768/13 (13th mo. Pay) = P4,397.33 TOTAL BACKWAGES P57,165.33 and 4. Ordering respondents to pay complainant moral and exemplary damages in the total amount of P100,000.00 plus P15,718.53, as attorneys fees which is equivalent to 10% of the total monetary award. Complainants other claims are dismissed for lack of merit.

SO ORDERED. On appeal by petitioners, the NLRC, in its Resolution dated November 19, 2002, set aside the Labor Arbiters judgment, thus: WHEREFORE, foregoing premises considered, the appealed decision is Vacated and Set Aside. In lieu thereof, a new judgment is rendered dismissing the above-entitled case for lack of merit. SO ORDERED. The NLRC held that respondents reassignment is not a demotion. There was neither diminution in functions and pay. Thus, he was not constructively dismissed from employment. Moreover, respondent himself admitted that he decided not to report for work at his new station. Yet, he continued receiving his salaries and allowances. Respondent filed a motion for reconsideration but it was denied by the NLRC. Respondent then filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 77206. On September 23, 2004, the Court of Appeals rendered its Decision granting the petition, thus: WHEREFORE, the instant Petition is hereby GRANTED. The NLRC Resolutions dated 19 November 2002 and 26 February 2003 are hereby ANNULLED and SET ASIDE. The Labor Arbiters Decision dated 14 January 2002 is hereby REINSTATED. SO ORDERED. Petitioners filed a motion for reconsideration. However, it was denied by the appellate court in its Resolution dated September 6, 2005. The only issue before us is whether the Court of Appeals erred in holding that respondent was constructively dismissed from employment. In resolving this issue, we rely on the following guide posts: Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. 2 The only

limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice. While the law imposes many obligations upon the employer, nonetheless, it also protects the employers right to expect from its employees not only good performance, adequate work, and diligence, but also good conduct and loyalty. 3 In fact, the Labor Code does not excuse employees from complying with valid company policies and reasonable regulations for their governance and guidance. Concerning the transfer of employees, these are the following jurisprudential guidelines: (a) a transfer is a movement from one position to another of equivalent rank, level or salary without break in the service or a lateral movement from one position to another of equivalent rank or salary;4 (b) the employer has the inherent right to transfer or reassign an employee for legitimate business purposes;5 (c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form of punishment or is a demotion without sufficient cause;6 (d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee.7 Constructive dismissal is defined as "quitting when continued employment is rendered impossible, unreasonable, or unlikely as the offer of employment involves a demotion in rank and diminution of pay."8 In light of the above guidelines, we agree with the NLRC in ruling that respondent was not constructively dismissed from employment. Respondent contends that the abolition of his position as planning and marketing officer and his appointment as bookkeeper I and assistant branch head of the Madrid Branch is a demotion. However, a look at the functions of his new position shows the contrary. The bookkeeper and assistant branch head is not only charged with preparing financial reports and monthly bank reconciliations, he is also the head of the Accounting Department of a branch. Under any standard, these are supervisory and administrative tasks which entail great responsibility. Moreover, respondents transfer did not decrease his pay. Nor was respondents transfer motivated by ill-will or prejudice on the part of petitioners. His position was not the only one abolished pursuant to the banks Personnel Streamlining Program. We recall that the position of remedial officer was likewise abolished. Petitioners reason was to acquire savings from the salaries it would pay to full-time personnel in these positions.

Finally, we note that despite respondents refusal to accept the new appointment, petitioners did not dismiss him. Rather, it was he who opted to terminate his employment when he purposely failed to report for work. In fine, we hold that the Court of Appeals erred when it concluded that respondent was constructively dismissed from employment. WHEREFORE, we GRANT the petition and REVERSE the Decision of the Court of Appeals in CA-G.R. SP No. 77206. The Resolutions of the NLRC dated November 19, 2002 and February 26, 2003, dismissing respondents complaint are AFFIRMED. SO ORDERED. Republic SUPREME Manila of the Philippines COURT

discuss ways and means to improve them. Sheila Vinuya (Sheila), an assistant regional sales manager, is in charge of conducting the monthly meetings.3 Prior to the meeting scheduled on May 2, 2002, petitioner approached Sheila and asked her if he could join the meeting so he could give a short discussion of his vision of corporate "oneness" which he believed would help the Dispophil Group generate sales. And he also asked Sheila if he could invite other division heads. Finding the request reasonable, Sheila agreed to let petitioner speak after the meeting.4 Petitioner thereupon requested Lemford Suarez (Suarez), a product assistant, to invite all product assistants to attend the May 2, 2002 meeting, informing him that plans and programs to improve collection and product segmentation5 would be discussed.1avvphi1.net During the meeting, Sheila, noting the presence of other product assistants and the absence of division heads, went to petitioners office to inform him thereof. Petitioner readily admitted that he no longer invited the division heads. Out of courtesy to petitioner who gave the impression that his discussion of his vision on corporate "oneness"6was sanctioned by the president and chairman of the Dispophil Group, Sheila allowed him to speak at the beginning of the meeting. Petitioner was well-prepared for his discussion, bringing with him slides and other paraphernalia.7 In the course of his discussion, it became apparent that his "vision and mission" differed from that of respondent. Moreover, he made disparaging remarks about one of the senior officers of respondent, Assistant Vice President Marlene Orozco (Marlene), criticizing her character, competency and performance,8 prompting one of the marketing managers to question his authority to "preside" over the meeting.9 Respondent thus issued a memorandum dated May 3, 2002 requiring petitioner to explain in writing why no disciplinary action should be taken against him, he having uttered during the said meeting, his participation of which was unofficial and unauthorized, "unpleasant things" about one of its key officers, causing confusion among the employees-attendees.10 In accordance with the May 3, 2002 memorandum of respondent, petitioner explained in writing the objectives of the meeting as well as the topics discussed, and he denied having mentioned "unpleasant things" thereat. 11 Respondent later issued another memorandum, dated May 7, 2002, requiring petitioner to show cause why he should not be dismissed from employment for violation of Article 282 of the Labor Code, 12 specifically: for serious misconduct, commission of a crime or offense

SECOND DIVISION G.R. No. 169231 February 15, 2007

TEOFILO CESAR N. ECHEVERRIA, Petitioner, vs. VENUTEK MEDIKA, INC., Respondent. DECISION CARPIO MORALES, J.: Assailed via petition for review are issuances of the Court of Appeals in CA-G.R. SP No. 80966, to wit: a) Decision1 dated April 27, 2005, which granted respondents petition for certiorari, thereby setting aside the decision of the National Labor Relations Commission (NLRC) in NLRC NCR CA No. 034523-03 and reinstating Labor Arbiter Elias H. Salinas decision in NLRC Case No. 00-05-02975-02; and b) Resolution2 dated August 5, 2005, which denied petitioners motion for reconsideration. Teofilo Cesar N. Echeverria (petitioner) was an employee of Venutek Medika, Inc. (respondent), a corporation engaged in the business of trade and distribution of hospital supplies and equipment and an affiliate of the Dispophil Group of Companies (Dispophil Group). At the time of his termination from employment which is the subject of the present petition, he held the position of assistant marketing manager with a salary of P23,150 a month. As a matter of policy, the marketing personnel of the various companies in the Dispophil Group hold a joint marketing cut-off monthly meeting to review the sales and marketing performance of the companies and

against the respondent, and willful breach of trust, 13 in that he used the meeting to unjustifiably insult Marlene, his superior, and to insinuate that the Chairman and President of the Dispophil Group, Jose L. Tambunting, along with his wife, bribed petitioner to execute and attest to an affidavit filed before the Pasig Prosecutors Office in a criminal complaint, docketed as I.S. No. 0203-03111, which acts caused respondent to lose the trust and confidence reposed upon him.14 In connection with the May 2, 2002 meeting, it appears that Sheila and Suarez were also directed to submit explanations, hence, they submitted letters dated May 7, 2002 and May 8, 2002, respectively.15 Petitioner, in compliance with respondents May 7, 2002 memorandum, reiterated in writing his good intention behind the meeting and his denial of the charges against him. Finding petitioners explanation unsatisfactory, respondent served upon him a letter dated May 9, 2002 dismissing him from employment effective immediately.16 Petitioner thus filed on May 10, 2002 a complaint for illegal dismissal, non-payment of salaries and benefits, damages and attorneys fees.17 Labor Arbiter Elias H. Salinas, by Decision of January 10, 2003, dismissed petitioners complaint for lack of basis and merit. He, however, ordered respondent to pay him his pro rata 13th month pay for the year 2002 in the amount of P8,295.41. The dispositive portion of the Labor Arbiters Decision reads: WHEREFORE, premises considered, judgment is hereby rendered DISMISSING the complaint for illegal dismissal for lack of basis and merit. However, respondent Venutek Medika, Inc. is hereby ordered to pay complainant his pro rata 13th month pay for the year 2002 in the amount of P8,295.41.18 On appeal by petitioner, the NLRC, finding him to have been illegally dismissed, reversed and set aside the Labor Arbiters Decision. Thus it disposed: WHEREFORE, premises considered, the Decision of Labor Arbiter Elias H. Salinas dated January 10, 2003, is hereby declared VACATED and SET ASIDE. Let another one (be) entered, declaring ComplainantAppellant ILLEGALLY DISMISSED. The Respondents are hereby directed to immediately REINSTATE Complainant-Appellant to his former position without loss of seniority rights, with full backwages, from the time of his illegal dismissal up to the finality of this Decision, and to pay his proportionate 13th month pay for the year 2002, the unpaid commission in the amount of P30,000.00, plus 10% attorneys fees. It is however understood, that the Respondents shall be jointly and

severally liable to Complainant-Appellant in case of monetary awards. SO ORDERED.19 Its motion for reconsideration having been denied, respondent filed a petition for certiorari with the Court of Appeals, arguing that the NLRC committed grave abuse of discretion in not finding that petitioner committed serious misconduct and willful breach of trust and confidence, as well as in awarding petitioners monetary claims. The Court of Appeals set aside the decision of the NLRC and reinstated that of the Labor Arbiters. The dispositive portion of the appellate courts decision reads: WHEREFORE, premises considered, the petition is hereby GRANTED, and the assailed Decision and Resolution of the NLRC are hereby SET ASIDE. In lieu thereof, the Decision of Labor Arbiter Elias Salinas, finding that petitioner Venutek Medika, Inc. had legally dismissed the private respondent Teofilo Cesar N. Echeverria III although awarding him his pro rata 13th month pay for the year 2002, is hereby REINSTATED. SO ORDERED.20 Hence, the instant petition for review which raises the following issues: a) Whether the Court of Appeals may review and set aside the findings of fact made by the NLRC; and b) Whether the Court of Appeals erred in finding that there is substantial evidence to support petitioners dismissal. The petition fails. On the first issue, it is settled that the Court of Appeals, in view of its expanded jurisdiction over labor cases which are elevated to it through a petition for certiorari, may look into the records of the case and re-examine the questioned findings if it considers the same to be necessary to arrive at a just decision; 21 and when factual findings of the NLRC are contrary to those of the Labor Arbiter, as in the present case.22 On the second issue, petitioner claims he is not guilty of serious misconduct, maintaining that the May 2, 2002 meeting was conducted with good intention and was approved by respondent through Sheila. Further, petitioner contends that there was no substantial evidence that he made any derogatory remarks against Marlene as even respondents witnesses did not state any such remarks attributed to him; that any remarks he made about Marlene were

mere "constructive criticisms" which were not meant to insult or offend her; and the meeting was not workrelated, hence, it may not be used by respondent to justify his dismissal on the ground of loss of trust and confidence. Petitioners position fails. Misconduct has been defined as an improper or wrong conduct; a transgression of some established and definite rule of action; a forbidden act; a dereliction of duty. It implies wrongful intent and not mere error of judgment. To be categorized as serious, it must be of such grave and aggravated character and not merely trivial and unimportant. And to constitute just cause for an employees separation, it must be in connection with his work.23 To justify the termination of an employees services, loss of trust and confidence as basis thereof must be based on a willful breach of the trust reposed in him by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.24 As correctly found by the Court of Appeals, there is substantial evidence of petitioners misconduct, hence, it was grave abuse of discretion on the part of the NLRC to ignore the same. Thus the appellate court observed: The records of the case are rife with proof that the private respondent committed acts which are inimical to the interests and stability, not only of management, but of the corporation itself. Private respondent did so, through devious and deceitful means and methods, aimed at sowing discord and instability among the officers of the petitioner Venutek, and discrediting top officers of the corporation, particularly the Assistant Vice President of Marketing, who is private respondents superior in rank. In the explanation (p. 45, Rollo) submitted by Sheila D. Vinuya, Assistant Regional Sales Manager, who was supposed to conduct the monthly cut-off meeting for the review of marketing and sales performance of the Dispophil group of companies, she recounted in detail that it was the private respondent who asked her if he could have a few minutes to discuss his vision and mission for the company and his "we are one" idea. He told her that he would invite only other division heads. However, it turned out that he had invited other employees, not members of the marketing division, and not the division heads he referred to. . . [H]e took control of the meeting. . . [H]e also claimed that the meeting was with the blessings of the president of the company, but it later turned out that it was not. The result was confusion and demoralization among the employees, even to Vinuya herself, who felt used and betrayed. . .

The joint affidavit (p. 48, Rollo) executed by Vinuya, Lemford Suarez (Product Assistant), Mylene R. Brillantes (OIC Private Hospital Team), and Michelle C. Dizon (Assistant District Sales Manager), all midmanagement officers like the private respondent, attested to the fact that private respondent made derogatory statements about Assistant Vice President Marlene Orozco. . . These accounts of the persons present during the subject May 2, 2002 meeting are substantial proof of the grave infraction committed by the private respondent. . . .25 (Underscoring supplied) The rule is well entrenched that substantial proof is sufficient as basis for the imposition of any disciplinary action upon an employee. The standard of substantial evidence is satisfied where the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him unworthy of the trust and confidence demanded by his position.26 The joint affidavit executed by Sheila Suarez, Mylene R. Brillantes and Michelle C. Dizon, managerial employees of respondent who attended the May 2, 2002 meeting, substantially proves the questioned statements of petitioner against one of his superiors: xxxx 5. Mr. Echeverria made derogatory statements about one of the top ranking officials of the company, Asst. Vice President Marlene Orozco, which insulted her character, competency and performance. Mr. Echeverria insinuated that Mrs. Orozco doesnt have plans for the company for the year 2003. He even questioned her loyalty to the company by showing a purported document which allegedly shows that she sided with the former management of the corporation over the new management. 6. He further declared that Mrs. Orozco gave out promotions not on the basis of merits but rather on the basis of personality. As an example, he even referred to Mr. Winterson Razon and stated that Mrs. Orozco deferred his promotion because of the latters lack of bearing, referring to his height.27 (Underscoring supplied) That the utterance of obscene, insulting or offensive words against a superior constitutes gross misconduct, which is one of the grounds to terminate the services of an employee, is settled.28 The gravity of petitioners misconduct is gathered from, inter alia, the following considerations: first, his misrepresentations to Sheila, the facilitator of the meeting, that he would only give a short discussion of his vision on corporate "oneness" and he would invite the other division heads; second, his conscious and deliberate plan to give the questioned "discussion" as

gathered from his preparation of slides and use of paraphernalia, even inviting other middle managers, not managers of the marketing division; and third, his false claim that he had the blessings of the president of the company to discuss his vision. Petitioners actions no doubt demonstrate a clear disregard for the interests of the company which he, as a managerial employee, is supposed to safeguard. That petitioners actions constituted willful breach of trust cannot be gainsaid given his deliberate choice of an official and company-sanctioned meeting as the venue for uttering the questioned remarks against Marlene and the use of his position as assistant marketing manager to gain access to it. It bears stressing that petitioner was not an ordinary rank-and-file employee. He was a managerial employee, which required the full trust and confidence of his employer in the exercise of discretion in overseeing respondents business. As such, he was bound by more exacting work ethics.29 WHEREFORE, the assailed Decision dated April 27, 2005, and Resolution dated August 5, 2005 issued by the Court of Appeals in CA-G.R. SP No. 80966 are AFFIRMED. Costs against petitioner. SO ORDERED.