PHILIPPINE LONG DISTANCE and TELEPHONE COMPANY, INC.

, Petitioner,
vs.
AMPARO BALBASTRO and NATIONAL LABOR RELATIONS
COMMISSION, Respondents.
D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari filed by Philippine on! Distan"e and #elephone Co$pany, In".
%petitioner& see'in! to annul the De"ision1 dated (uly )*, +,,+ and the Resolution2 dated -ebruary ., +,,) of the
Court of /ppeals %C/& in C/01.R. SP No. 2*,3,.
/$paro Balbastro %private respondent& was e$ployed by petitioner in *4.5 as its telephone operator until her
6uestioned dis$issal fro$ e$ploy$ent on O"tober 2, *454. She was dis$issed by petitioner for her absen"es without
authori7ed leave due to un"onfir$ed si"' leave on (une +5 to (uly *8, *454, whi"h "onstituted her third
offense3 punishable by dis$issal under petitioner9s rules and re!ulations.4
On O"tober +5, *44*, private respondent filed a Co$plaint5 with the abor /rbiter a!ainst petitioner and its
President, /ntonio Co:uan!"o, for ille!al dis$issal, non0pay$ent of salary wa!e, pre$iu$ pay for rest day, *)th
$onth pay, and da$a!es. In her position paper, she alle!ed that she was dis$issed on the !round of un"onfir$ed si"'
leave despite her presentation of $edi"al "ertifi"ates fro$ her attendin! physi"ians whi"h were not "onsidered by
petitioner9s $edi"al do"tors; and that she has four $inor "hildren and it was not her intention to habitually absent
herself without reason "onsiderin! that her loss of :ob whi"h was based only on opinions of petitioner9s do"tors had
"aused her !reat deprivation and $oral sufferin!. She prayed for reinstate$ent, ba"'wa!es, and da$a!es.
Petitioner filed its position paper with <otion to Dis$iss6 alle!in! that private respondent9s habitual and un:ustified
absen"es was a :ust and valid "ause for her ter$ination under its rules and re!ulations; and that her re"ord of
unauthori7ed absen"es for *454 showed the followin!=
-irst unauthori7ed absen"es, fro$ <ar"h *4 to +4, *454. Private respondent absented herself fro$ wor' for nine days
e>"ludin! rest days on <ar"h +) to +8, *454 without noti"e to petitioner. She !ave $arital proble$ as the reason for
her absen"e. She was penali7ed with *5 days suspension for violatin! petitioner9s rules and re!ulations re!ardin!
absen"es.
Se"ond unauthori7ed absen"es, fro$ (une ** to *), *454. Private respondent "alled in si"' fro$ #anauan, Batan!as on
(une 2 that she was sufferin! fro$ !astroenteritis. She absented herself fro$ (une 2 to *), *454. On (une *8, *454,
she presented herself to petitioner9s do"tor, Dr. <elissa <usn!i and sub$itted a $edi"al "ertifi"ate where it was
stated that she was under treat$ent fro$ (une 2 to 5, *454 of !astroenteritis. Dr. <usn!i "onfir$ed private
respondent9s si"' leave fro$ (une 2 to *,, *454 but did not "onfir$ her absen"es fro$ (une ** to *), *454 be"ause
her $edi"al "ertifi"ate "overed only the period fro$ (une 2 to 5, *454. -urther$ore, petitioner reasons out that if she
really had su"h illness, "ertain nor$al lo!i"al $edi"al pro"edures should have been ta'en, su"h as stool e>a$inations
and hospitali7ation; and she bore no post0illness $anifestations of !astroenteritis. Private respondent9s un"onfir$ed
leave of absen"e was "onsidered by petitioner unauthori7ed due to her patent abuse of si"' leave privile!es and treated
it as her se"ond offense and was penali7ed with *2 days suspension.
#hird unauthori7ed absen"es, fro$ (une +5 to (uly *8, *454. On (une +2, *454, private respondent $ade a si"' "all
that she had sore eyes and absented herself fro$ (une +2 to (uly *8, *454. On (uly ), *454, she was outvisited at her
!iven address in <a'ati but was not found ho$e. On (uly *2, *454, she reported for wor' and presented herself to the
"lini" for "onfir$ation. She had her $edi"al "ertifi"ate issued by her attendin! physi"ian showin! that she had been
under his professional treat$ent fro$ (une +2 to (uly *+, *454 for syste$i" viral infe"tion. Petitioner9s do"tor, Dr.
Benito Dun!o, "onfir$ed her si"' leave fro$ (une +2 to +., *454 but did not "onfir$ as to the rest of the dates when
she was absent fro$ wor'. ?hen as'ed to e>plain, private respondent said that she had a viral infe"tion durin! the
said period; and that she was in #anauan, Batan!as durin! the said dates so she was not found in <a'ati when
outvisited. Petitioner9s do"tor did not "onfir$ her leave of absen"e fro$ (une +5 to (uly *8, *454 on the !round that
su"h illness did not warrant a very lon! ti$e of rest; "ertain laboratory e>a$inations should have been "ondu"ted by
her attendin! physi"ian; and there was patent abuse of her si"' leave privile!es.
?hile private respondent9s third leave of absen"e was bein! deliberated upon, she absented herself fro$ /u!ust 3 to
*+, *454. She "alled in si"' on /u!ust 3, *454 infor$in! her supervisor that she had a fever. #he $edi"al "ertifi"ate
issued by her attendin! physi"ian showed that she was under treat$ent fro$ /u!ust . to *,, *454 for influen7a.
Petitioner9s do"tor, Dr. Eduardo Co, "onfir$ed private respondent9s leave of absen"e fro$ /u!ust 3 to 5, *454 but did
not "onfir$ the rest be"ause her absen"es fro$ /u!ust 4 to *+, *454 were not "overed by a $edi"al "ertifi"ate; her
illness did not warrant prolon!ed absen"e; and it was $edi"ally i$possible for her to "ontra"t the sa$e illness whi"h
she "ontra"ted the previous $onth sin"e it is a $edi"al fa"t that there is no su"h thin! as an i$$ediately re"urrent
viral infe"tion.
In view of her repeated absen"es without authori7ed leave for the third ti$e, petitioner ter$inated private respondent9s
servi"e effe"tive O"tober 2, *454.
#he abor /rbiter "ondu"ted a hearin! where private respondent testified on her behalf, while petitioner presented the
three $edi"al do"tors who did not "onfir$ portions of private respondent9s leave of absen"e, and its E$ployee
Relations and Servi"e Depart$ent <ana!er.
On <ay ),, *448, the abor /rbiter issued its De"ision,7 the dispositive portion of whi"h reads=
?@ERE-ORE, all the fore!oin! pre$ises bein! "onsidered, :ud!$ent is hereby rendered orderin! the respondent
Philippine on! Distan"e AandB #elephone Co. to reinstate the "o$plainant to her for$er position as telephone
operator with all the ri!hts, privile!es and benefits appertainin! thereto, in"ludin! seniority, plus ba"'wa!es
e6uivalent to one %*& year salary in the su$ of P.5,,,,.,, %P3,2,,.,,C$o. > *+ $os.&.
SO ORDRED.8
#he abor /rbiter held that private respondent9s first in"ident of absen"e fro$ <ar"h *4 to +4, *454 were
unauthori7ed but not as to the other su""eedin! absen"es. It found that private respondent, on her first day of absen"e,
"alled in si"' and when she reported for wor', she went to petitioner9s "lini" for "he"'0up and sub$itted her $edi"al
"ertifi"ates, thus she "o$plied with the standard re6uire$ents on $atters of si"' leave; that petitioner9s do"tors did
not "onfir$ so$e portions of private respondent9s leave of absen"e based $erely on their $edi"al opinions; that su"h
:ustifi"ation was not warranted under Depart$ent Order No. /D<0.40,+ wherein absen"es due to illness were
"onsidered unauthori7ed and without pay when the attendin! do"tor9s si!nature is for!ed, there is alteration as to the
date and "ontents of the $edi"al "ertifi"ate, the "ertifi"ate is false as to the fa"ts alle!ed therein, the do"tor issuin! the
$edi"al "ertifi"ate is not 6ualified to attend to the illness, there are falsities and $isrepresentations, and when there is
patent abuse of si"' leave privile!es; and that these "ir"u$stan"es were not proven in this "ase.
#he abor /rbiter !ave $ore "reden"e to the do"tor who a"tually attended to private respondent rather than to the
$edi"al opinion of petitioner9s do"tors. It "on"luded that petitioner9s do"tors should have "oordinated with private
respondent9s attendin! physi"ians to settle any doubts as to the $edi"al "ertifi"ates.
Petitioner filed its appeal with the National abor Relations Co$$ission %NRC&. 9 On (anuary *4, *443, the NRC
issued a
Resolution10 affir$in! the de"ision of the abor /rbiter.
#he NRC found that "o$pany pra"ti"e allows leave of absen"e due to si"'ness if supported by a $edi"al "ertifi"ate
issued by the attendin! physi"ian; that a differen"e in opinion by the <edi"al Dire"tor fro$ that of the attendin!
physi"ian should not pre:udi"e private respondent sin"e the <edi"al Dire"tor "an "onsider absen"es unauthori7ed only
in "ases of for!ery and patent abuse of si"' leave privile!es whi"h were not proven in this "ase; that if the <edi"al
Dire"tor entertained doubts as to the $edi"al "ertifi"ate, he should have as'ed the attendin! physi"ian to sub$it
hi$self for "ross0e>a$ination and then present an independent physi"ian for an e>pert opinion on the $atter.
Petitioner9s <otion for Re"onsideration was denied in a Resolution11 dated <ar"h *8, *443.
Dndaunted, petitioner filed with us a Petition for Certiorari with prayer for the issuan"e of a #e$porary Restrainin!
Order %#RO&. / #RO was issued to en:oin the enfor"e$ent of the NRC Resolution until further orders.12
In a Resolution dated De"e$ber ., *445,13 we referred the petition to
the C/ in a""ordan"e with the St. Martin Funeral Home v. National Labor Relations Commission14 rulin!.
On (uly )*, +,,+, the C/ issued its assailed De"ision whi"h dis$issed the petition and affir$ed the NRC De"ision.
#he C/ held that as lon! as the $edi"al "ertifi"ate presented did not fall under any of the infir$ities set forth in
petitioner9s rules and re!ulations, the un"onfir$ed leave should be treated $erely as absen"e without leave and was
not sub:e"t to dis"iplinary a"tion; that petitioner $ay not rely on the previous absen"es of respondents in *4.5 and
*45+ to show abuse of si"' leave privile!es be"ause petitioner had a"'nowled!ed that respondent had already been
penali7ed with suspension, and those absen"es were "o$$itted beyond the three0year period $entioned in their rules
and re!ulations; that in its desire to "lothe private respondent9s dis$issal with a se$blan"e of le!ality, petitioner
points to private respondent9s fourth unauthori7ed leave of absen"e "o$$itted in /u!ust *454 while the third
unauthori7ed leave of absen"e was bein! deliberated upon; and that the noti"e of dis$issal referred only to her third
unauthori7ed leave, thus she "ould not be faulted for an infra"tion for whi"h she was not "har!ed.
Petitioner9s <otion for Re"onsideration was denied in a Resolution dated -ebruary ., +,,).
@en"e, petitioner filed the instant Petition for Review on Certiorari alle!in! the followin! !rounds=
I
?I#@ / DDE RESPEC#, #@E @ONOR/BE CODR# -/IED #O CONSIDER #@/# #@E
PE#I#ION @EREIN DOES NO# <EREE INFDIRE DPON #@E RE/#IGE ?EI1@# O- #@E
EGIDENCE PRESEN#ED BE #@E P/R#IES, BD# IS /NC@ORED ON </NI-ES#E
ERRONEODS CONCDSIONS ON #@E P/R# O- #@E NRC /RISIN1 -RO< 1ROSS
<IS/PPRE@ENSION O- #@E -/C#S OB#/ININ1 IN #@E C/SE. /<ON1 O#@ERS, I# ?/S
1R/GE ERROR #O CONCDDE #@/# #@ERE ?/S NO P/#EN# /BDSE O- #@E SICH E/GE
PRIGIE1E ON #@E P/R# O- #@E PRIG/#E RESPONDEN# BEC/DSE #@E <EDIC/
CER#I-IC/#ES S@E PRESEN#ED ?ERE NO# -/SE, -OR1ED, OR /#ERED #O#/E
DISRE1/RDIN1 #@E -/C# #@/# I/BDSE O- SICH E/GE PRIGIE1EI IS / C/DSE
SEP/R/#EE END<ER/#ED DNDER #@E RDES /S / 1RODND -OR DISCIPIN/RE
/C#ION.
II
?I#@ / DDE RESPEC#, #@E @ONOR/BE CODR# -/IED #O CONSIDER #@/# #@E
CONCDSIONS O- #@E NRC /RE BERE-# O- /NE E1/ OR -/C#D/ B/SES /S #@ERE
?ERE E1/E NO <EDIC/ CER#I-IC/#ES #O SPE/H O-, /ND #@E EJIS#ENCE
#@EREO- /RE PDRE /ND SI<PE @E/RS/E, @ENCE CODD NO# BE G/IDE REIED
DPON OR INGOHED BE #@E PRIG/#E RESPONDEN# #O SDPPOR# @ER DE-ENSE EGEN
SDPPOSIN1 #EC@NIC/ RDES ON EGIDENCE CODD BE RE/JED IN /BOR
PROCEEDIN1S. 15
Petitioner ar!ues that the NRC9s "on"lusions that private respondent had not "o$$itted a patent abuse of si"' leave
privile!es and that her dis$issal was ille!al are utterly without any fa"tual or le!al basis; that the NRC9s "on"lusion
that the dis$issal was ille!al was $erely based= %*& on the eviden"e of private respondent; %+& on $edi"al "ertifi"ates
whi"h are "learly hearsay and of no probative value whatsoever; and %)& on $edi"al "ertifi"ates whi"h, even
supposin! "ould be "onsidered, si$ply failed to "over the period of the leave re6uested and set forth i$plausible
dia!noses.
Petitioner "lai$s that the C/ as well as the NRC failed to resolve the issue of whether or not the $edi"al "ertifi"ate
should be !iven any "reden"e at all; that it had presented four witnesses whi"h in"luded their three $edi"al do"tors
who were sub:e"ted to "ross0e>a$inations, and yet "reden"e was !iven to private respondent9s hearsay eviden"e
"onsistin! $erely of a $edi"al "ertifi"ate by the latter9s attendin! physi"ian who was not even presented to testify;
that sin"e the "ontent of the $edi"al "ertifi"ate had been rebutted and refuted by petitioner9s witnesses, the burden of
eviden"e is shifted to private respondent to show that the $edi"al "ertifi"ate she sub$itted was "o$petent, proper, and
sound whi"h she failed to do.
Petitioner further "lai$s that the C/ erred in not findin! that private respondent "o$$itted a patent abuse of si"'
leave privile!es whi"h does not arise solely fro$ for!ery or alteration of the $edi"al "ertifi"ate, but on the fa"t that an
e$ployee had fre6uently and in"orri!ibly absented herself and then applied for si"' leave with absolute i$punity
ar$ed with $edi"al "ertifi"ates whi"h not only failed to "over the entire len!th of the leave but also with i$plausible
dia!noses; that e>"ludin! private respondent9s unauthori7ed absen"es in *454, she had a""u$ulated 4) days of si"'
leave fro$ (anuary to (uly *454 and **2 days of si"' leave in *455, thus, how "an the "on"lusion be drawn that there
was no patent abuse of si"' leave privile!es; and that her unauthori7ed absen"e for whi"h she was ter$inated all
o""urred in *454, thus, the C/ erred in sayin! that petitioner $ay not rely on the previous absen"es of respondent in
*4.5 and *45+ to :ustify private respondent9s dis$issal.
?e find the petition $eritorious. Private respondent was validly dis$issed by petitioner. It $ust be borne in $ind that
the basi" prin"iple in ter$ination "ases is that the burden of proof rests upon the e$ployer to show that the dis$issal
is for :ust and valid "ause and failure to do so would ne"essarily $ean that the dis$issal was not :ustified and,
therefore, was ille!al.16 -or dis$issal to be valid, the eviden"e $ust be substantial and not arbitrary and $ust be
founded on "learly established fa"ts.17 ?e find that petitioner had dis"har!ed this burden.
Dnder petitioner9s Depart$ent Order No. /D<0.40,+, for the absen"e due to an alle!ed illness to be "onsidered
unauthori7ed, without pay, and sub:e"t to dis"iplinary a"tion, it $ust be shown that the $edi"al "ertifi"ate is for!ed,
altered as to the date and "ontents, false as to the fa"ts stated therein, issued by a do"tor not 6ualified to attend to the
patient9s illness, and there is patent abuse of si"' leave privile!es. #he penalty for three offenses of unauthori7ed
absen"es "o$$itted within the three0year period is dis$issal.
Private respondent9s un"onfir$ed absen"es fro$ (une +5 to (uly *8, *454 is the "ru"ial period in this parti"ular "ase.
#he abor /rbiter and the NRC found that private respondent was ille!ally dis$issed by petitioner. Su"h findin!
was affir$ed by the C/. #hey all "on"luded that the $edi"al "ertifi"ate whi"h private respondent presented did not
fall under the "ir"u$stan"es enu$erated in Depart$ent Order No. /D<0.40,+, and there was no patent abuse of si"'
leave privile!es, thus, there was no basis for petitioner9s do"tors not to "onfir$ her si"' leave and "onsider the sa$e
unauthori7ed.
#he :urisdi"tion of this Court in a petition for review on certiorari is li$ited to reviewin! only errors of law, not of
fa"t, unless the fa"tual findin!s bein! assailed are not supported by eviden"e on re"ord or the i$pu!ned :ud!$ent is
based on a $isapprehension of fa"ts.18 ?e find that those e>"eptions are present in the instant "ase.
?e find that petitioner had suffi"iently established that private respondent "o$$itted a patent abuse of her si"' leave
privile!es whi"h is one of the !rounds listed in Depart$ent Order No. /D<0.40,+ for dis"iplinary a"tion.
Private respondent was absent on (une +2, *454 and the reason !iven was sore eyes. She was then absent fro$ (une
+2 to (uly *8, *454. ?hen she reported for wor' on (uly *2, *454, she went to petitioner9s do"tor, Dr. Benito Dun!o,
for "onfir$ation of her leave of absen"e and presented a $edi"al "ertifi"ate19 fro$ her attendin! physi"ian, Dr.
<anuel C. Da$ian of #anauan Batan!as, who "ertified that she had been under his professional "are fro$ (une +2 to
(uly *+, *454 for syste$i" viral disease.
Dr. Dun!o "onfir$ed private respondent9s leave of absen"e fro$ (une +2 to +., *454 only and did not "onfir$ her
leave fro$ (une +5 to (uly *8, *454 for the followin! reasons= %a& syste$i" viral disease indi"ated in the $edi"al
"ertifi"ate does not warrant su"h a very lon! ti$e of rest and re"uperation; %b& if she really had an infe"tion, the
lo!i"al re"ourse is for the attendin! physi"ian to "ondu"t a "hest >0ray and blood e>a$ination to deter$ine the "ause
of the prolon!ed fever, but su"h was not $ade; %"& if she was really ill for su"h a lon! ti$e, she would have already
been "onfined in a hospital for treat$ent as petitioner has standin! a!ree$ents with various hospitals to provide
i$$ediate $edi"al assistan"e free of "har!e; %d& she displayed no residue of sy$pto$s of flu, thus "astin! doubt on
the vera"ity of her "lai$; %e& she "alled in si"' on (une +2, *454 that she was sufferin! fro$ sore eyes but her $edi"al
"ertifi"ate $ade no $ention of su"h "ondition; and %f& her $edi"al re"ords reveal a pattern of abuse of si"' leave
privile!es.20
Private respondent9s reason for her absen"e on (une +2, *454 was sore eyes, however the $edi"al "ertifi"ate that she
presented for her prolon!ed absen"e fro$ (une +2 to (uly *8, *454 was syste$i" viral disease and as "orre"tly
observed by Dr. Dun!o, sore eyes was never $entioned therein.
<oreover, in the $edi"al pro!ress note21 of Dr. Da$ian dated O"tober *,, *454 atta"hed to private respondent9s
position paper sub$itted before the abor /rbiter, it was shown that private respondent was seen by Dr. Da$ian on
(une +2, *454 at 4=,, a.$. and her te$perature was 8, de!rees and she was "o$plainin! of severe heada"he and body
pain. It would appear that there was a dis"repan"y between the reason !iven when she "alled in si"' on (une +2, *454
and her "o$plaints when she "onsulted Dr. Da$ian on the sa$e day. In fa"t, when private respondent was as'ed on
"ross0e>a$ination why sore eyes was never $entioned in her $edi"al "ertifi"ate, all that she "ould say was Ithe
dia!nosis was syste$i" viral disease, sama-sama na lahatI.22
#he $edi"al "ertifi"ate issued by Dr. Da$ian showed that private respondent was under his professional "are fro$
(une +2 to (uly *+, *454. @owever, the $edi"al pro!ress note dated O"tober *,, *454 of the sa$e do"tor showed that
private respondent "onsulted hi$ only on (une +2, +., and +4, *454. It was never $entioned that Dr. Da$ian had seen
private respondent after (une +4, *454. #hus, there was even a dis"repan"y between the $edi"al "ertifi"ate dated (uly
*), *454 and the $edi"al pro!ress note as to the ti$e fra$e that private respondent was seen by Dr. Da$ian. #he
$edi"al "ertifi"ate did not "over private respondent9s absen"es fro$ (uly *) to *8, *454 and she only reported for
wor' on (uly *2, *454.
It bears stressin! that fro$ the ti$e private respondent "alled in si"' on (une +2, *454 due to sore eyes, she never
"alled up petitioner a!ain until she reported for wor' on (uly *2, *454. She never went to petitioner9s do"tors for the$
to verify her si"'ness.
Private respondent had "o$$itted the first two offenses of unauthori7ed absen"es in the sa$e year. -irst, she did not
report for wor' fro$ <ar"h *4 to +4, *454 without noti"e to petitioner, thus her absen"e was treated as unauthori7ed
and "onsidered her first offense for whi"h she was penali7ed with suspension. Se"ond, she a!ain did not report for
wor' fro$ (une 2 to *), *454 and when she reported for wor' and presented her $edi"al "ertifi"ate, it "overed the
period fro$ (une 2 to 5, *454 only but she did not report for wor' until (une *8, *454. Petitioner9s do"tor did not
"onfir$ her absen"es fro$ (une ** to *), *454, thus, the sa$e was "onsidered unauthori7ed and her se"ond offense
for whi"h she was penali7ed a!ain with suspension. #hese two unauthori7ed absen"es to!ether with her third
unauthori7ed absen"es "o$$itted fro$ (une +5 to (uly *8, *454 are suffi"ient bases for petitioner9s findin! that
private respondent patently abused her si"' leave privile!es.
Previous infra"tions $ay be used as :ustifi"ation for an e$ployee9s dis$issal fro$ wor' in "onne"tion with a
subse6uent si$ilar offense.23 <oreover, it is in petitioner9s rules and re!ulations that the sa$e offense "o$$itted
within the three0year period $erits the penalty of dis$issal. #he C/9s findin! that petitioner $ay not rely on the
previous absen"es of private respondent in *4.5 and *45+ to show abuse of si"' leave privile!es has no basis sin"e
private respondent was dis$issed for "o$$ittin! her three unauthori7ed absen"es all in *454.
It had also been established by Dr. Dun!o9s testi$ony that private respondent9s $edi"al re"ord showed that she did
not !o to the "lini" for "onsultation as she would only present a $edi"al "ertifi"ate and !et a "learan"e for her si"'
leave;24 that the sa$e $edi"al re"ord showed her absen"es in *454 as follows= %*& -ro$ /pril +. to <ay 8 due to
urinary tra"t infe"tion and she sub$itted a $edi"al "ertifi"ate;25 %+& -ro$ <ay 2 to *8 due to ba"' pain;26%)& -ro$
<ay +, to +* due to $i!raine;27 %8& (une 2 to *) due to !astroenteritis %penali7ed as her se"ond offense&; %2& (une *2
to +8 due to "on:un"tivitis and sub$itted a $edi"al "ertifi"ate;28 and %3& (une +2 to (uly *8, *454 due to syste$i"
viral disease with $edi"al "ertifi"ate %her third offense penali7ed with dis$issal&. Private respondent had in"urred a
total absen"e of 52 days fro$ (anuary to O"tober *454;29 and **2 days in *455.30 It had also been established that
petitioner9s do"tors "onfir$ed $ost of her si"' leave out of "o$passion31 and that her $edi"al re"ords showed that
there were several warnin!s !iven her re!ardin! her un"onfir$ed si"' leave.32
/s petitioner stated in its pleadin!s, it is a tele"o$$uni"ation servi"e "o$pany whi"h provides the "ountry with
various tele"o$$uni"ation servi"es and fa"ilities. Its operations are a vital part to $any transa"tions all over the
"ountry and abroad, and private respondent was one of its telephone operators who used to "onne"t all these "alls.
#hus, her patent abuse of her si"' leave privile!es is detri$ental to petitioner9s business.
?hile it is true that "o$passion and hu$an "onsideration should !uide the disposition of "ases involvin! ter$ination
of e$ploy$ent sin"e it affe"ts oneKs sour"e or $eans of livelihood, it should not be overloo'ed that the benefits
a""orded to labor do not in"lude "o$pellin! an e$ployer to retain the servi"es of an e$ployee who has been shown to
be a !ross liability to the e$ployer. #he law in prote"tin! the ri!hts of the e$ployees authori7es neither oppression
nor self0destru"tion of the e$ployer.33 It should be $ade "lear that when the law tilts the s"ale of :usti"e in favor of
labor, it is but a re"o!nition of the inherent e"ono$i" ine6uality between labor and $ana!e$ent. #he intent is to
balan"e the s"ale of :usti"e; to put the two parties on relatively e6ual positions. #here $ay be "ases where the
"ir"u$stan"es warrant favorin! labor over the interests of $ana!e$ent but never should the s"ale be so tilted if the
result is an in:usti"e to the e$ployer. Justitia nemini neganda est %(usti"e is to be denied to none&.34
WHEREFORE, the instant petition is GRANTED. #he De"ision dated (uly )*, +,,+ and the Resolution dated
-ebruary ., +,,) of the Court of /ppeals in C/01.R. SP No. 2*,3, are hereby REVERSED and SET ASIDE. #he
"o$plaint of /$paro Balbastro is DISMISSED.
PHILIPPINE NATIONAL BANK vs. RAMON BRIGIDO L. VELASCO
#@IS is a tale of a ban' offi"er0depositor "lin!in! to his position after violatin! ban' re!ulations and falsifyin! his
passboo' to "over up a false
transa"tion.
Before the Court is a petition for review on "ertiorari under Rule 82 of the *44. Rules of Civil Pro"edure see'in! the
reversal of the De"isionA*B and ResolutionA+B of the Court of /ppeals %C/&. #he appealed de"ision reversed those of
the National abor Relations Co$$ission %NRC&A)B and the abor /rbiterA8B whi"h dis$issed the "o$plaint for
ille!al dis$issal and da$a!es of Ra$on Bri!ido . Gelas"o a!ainst Philippine National Ban' %PNB&.
#he -a"ts
Ra$on Bri!ido . Gelas"o, a PNB audit offi"er, and his wife, Belen /$paro E. Gelas"o, $aintained Dollar Savin!s
/""ount No. ,*,0.*834504A2B at PNB Es"olta Bran"h. On (une ),, *442, while on offi"ial business at the e!a7pi
Bran"h, he went to the PNB i!ao, /lbay Bran"h and withdrew
DSL*2,,,,.,, fro$ the dollar savin!s a""ount. /t that ti$e, the a""ount
had a balan"e of DSL*2,853.,.. #he i!ao Bran"h is an off0line bran"h, i.e., one with no networ' "onne"tion or
"o$puter lin'a!e with other PNB bran"hes and the head offi"e. #he transa"tion was eviden"ed by an Interoffi"e
Savin!s /""ount ?ithdrawal Slip, also 'nown as the #i"'et E>"han!e Center %#EC&.A3B
On (uly *,, *442, PNB Es"olta Bran"h re"eived the #EC "overin! the withdrawal. It was in"luded a$on! the
proofsheet entries of Cashier IG Ruben -ran"is"o, (r. #he withdrawal was not, however, posted in the "o$puter of
the Es"olta Bran"h when it re"eived said advi"e. #his $eans that the withdrawal was not re"orded. #hus, the a""ount
of Gelas"o had an overstate$ent of DSL*2,,,,.,,.
So$eti$e in Septe$ber *442, while Gelas"o was on a provin"ial audit, he "lai$ed "allin! throu!h phone a 'in in
<anila who :ust arrived
fro$ abroad. #his 'in alle!edly told hi$ that his New Eor'0based brother, 1re!orio Gelas"o, sent hi$ various "he"'s
throu!h his 'in totalin! DSL*2,,,,.,, and that the "he"'s would :ust be deposited in ti$e in Gelas"o9s a""ount.
On O"tober 3, *442, Gelas"o updated his dollar savin!s a""ount by depositin! DSL*+..5, refle"tin! a balan"e of
DSL*2,853.,*. @e was alle!edly satisfied with the updated balan"e, as he thou!ht that the DSL*2,,,,.,, in his
a""ount was the a$ount !iven by his brother.
On different dates, Gelas"o $ade several inter0bran"h withdrawals fro$ the dollar savin!s a""ount, to wit=
PNB Bran"h
Date
/$ount
PNB e!aspi
Nove$ber ., *442
DSL+,,,,.,,
PNB e!aspi
Nove$ber *), *442
),)+4.4.
Cash Dept.
Nove$ber +), *442
8,,,,.,,
#otal
DSL4,)+4.4.
<rs. Belen Gelas"o also withdrew several a$ounts on the dollar a""ount, vi7.=
PNB Bran"h
Date
/$ount
PNB CEPM
De"e$ber 3, *442
DSL**,848.,,
PNB -ris"o
(anuary +, *443
*,+4+.)+
#otal
DSL*+,.53.)+
Subse6uently, the dollar savin!s a""ount of the spouses was "losed.
On -ebruary 3, *443, in the "ourse of "ondu"tin! an audit at PNB
Es"olta Bran"h, <olina D. Salvador, a $e$ber of the Internal /udit Depart$ent %I/D& of PNB, dis"overed that the
inter0bran"h withdrawal $ade on (une ),, *442 by Gelas"o at PNB i!ao, /lbay Bran"h in the a$ount of
DSL*2,,,,.,, was not posted; and that no deposit of said a$ount had been "redited to the dollar savin!s a""ount.
On -ebruary ., *443, Gelas"o was notified of the !lit"h when he reported at the I/D. @e said it was only in the
evenin! that he was able to verify fro$ his 'in that the latter was not able to deposit in his a""ount the
DSL*2,,,,.,,.A.B
#he followin! day, or on -ebruary 5, *443, Gelas"o went to Dolorita Donado, assistant vi"e president of the Internal
/udit Depart$ent and tea$ leader of the Es"olta #as' -or"e, and delivered three %)& "he"'s in the a$ount of
DSL2,,,,.,, ea"h or a total of DSL*2,,,,.,,. @owever, Donato returned the "he"'s to Gelas"o and instru"ted hi$
that he should personally deposit the "he"'s.
On -ebruary *8, *443, he deposited the "he"'s and the a$ount was "onse6uently applied to his unposted withdrawal
of DSL*2,,,,.,,.
<eanwhile, on -ebruary 4, *443, PNB vi"e president, B.C. @er$oso, re6uiredA5B Gelas"o to sub$it a written
e>planation "on"ernin! the in"ident.
On -ebruary *+, *443, he sub$itted his sworn letter0e>planation.A4B @e des"ribed the inter0bran"h withdrawal at
PNB i!ao, /lbay Bran"h on (une ),, *442 as Ino0boo',I i.e., without the "orrespondin! presentation to the ban'
teller of the savin!s passboo'. @e stated, a$on! others, that his withdrawal was a""o$$odated as the state$ent of
a""ount showed a balan"e of DSL*2,853.,*, and that he is personally 'nown to the offi"ers and staff, bein! a for$er
"ollea!ue at the PNB i!ao, /lbay Bran"h.
On -ebruary +., *443, PNB i!ao, /lbay Bran"h division "hief III, Re>or Fuia$bao, finan"ial spe"ialist II, E$$a
1a"er, and division "hief II, Renato <. etada, "onfir$ed the Ino0boo'I withdrawal.A*,B
On <ar"h 2, *443, PNB for$ally "har!ed Gelas"o with IDishonesty, 1rave <is"ondu"t, andCor Condu"t 1rossly
Pre:udi"ial to the Best Interest of the Servi"e for the irre!ular handlin! of Dollar Savin!s /""ount No. ,*,0.*83450
4.IA**B #he ad$inistrative "har!e alle!ed that= %*& he transa"ted a no0boo' withdrawal a!ainst his Dollar Savin!s
/""ount No. ,*,0.*834504 at PNB i!ao, /lbay Bran"h in violation of Se"tion *+*3 of the <anual of
Re!ulations for Ban's; %+& in transa"tin! the no0boo' withdrawal, he failed to present any letter of introdu"tion as
re6uired under 1eneral Cir"ular )0.+C4+; %)& the irre!ular inter0bran"h withdrawal was a!!ravated by the failure of
Es"olta Bran"h to postCenter the withdrawal into the "o$puter upon re"eipt of the #EC advi"e, resultin! in the
overstate$ent of the a""ount balan"e by DSL*2,,,,.,,; and %8& sin"e he was presu$ed to be fully aware that neither
the deposit nor withdrawal of the DSL*2,,,,.,, was refle"ted on the passboo', he was able to appropriate the
a$ount for his personal benefit, free of interest, to the da$a!e and pre:udi"e of PNB.A*+B
On /pril 5, *443, PNB withheld his ri"e and su!ar subsidy, dentalCopti"alCoutpatient $edi"al benefits, "onsolidated
$edi"al benefits, "o$$utation of hospitali7ation benefits, "lothin! allowan"e, lon!evity pay, anniversary bonus,
Christ$as bonus and "ash !ift, perfor$an"e in"entive award, and $id0year finan"ial assistan"e.A*)B On /pril *,,
*443, he was pla"ed under preventive suspension for a period of ninety %4,& days.A*8B
On <ay +, *443, Gelas"o sub$itted his sworn /nswerA*2B to the ad$inistrative "har!e a!ainst hi$. Dnli'e his
previous answer, he here "lai$ed that his withdrawal on (une ),, *442 was Iwith passboo'.I /s proof, he atta"hed a
"opy of his passboo'A*3B bearin! the withdrawal entry of
DSL*2,,,,.,, on (une ),, *442. E>plainin! the in"onsisten"y with his sworn letter0e>planation on -ebruary *+,
*443, he said his initial answer was $ade under pressin! "ir"u$stan"es. @e was unable to find his passboo'
whi"h was then 'ept by his wife who "ould not be "onta"ted at that $o$ent.
On O"tober +, *443, the /d$inistrative /d:udi"ation Offi"e %//O& of PNB "o$posed of -ernando R. <an!ubat, (r.,
?ilfredo S. Ger7osa, Celso D. Benolo!a, and (esse . -i!ueroa e>onerated Gelas"o of the "har!es of dishonesty and
"ondu"t pre:udi"ial to the best interest of servi"e. @owever, he was found !uilty of !rave $is"ondu"t, $iti!ated by
len!th of servi"e and absen"e of a"tual loss to PNB. #hus, he was $eted the penalty of for"ed resi!nation with
benefits.A*.B
On O"tober )*, *443, Gelas"o was for$ally notified of the findin!s of the //O after its approval by the
$ana!e$ent. /s of that ti$e, he had been e$ployed with PNB for ei!hteen %*5& years, holdin! the position of
<ana!er * of the I/D. @e was earnin! P*8,4)+.,, per $onth plus a $onthly allowan"e of P),48,.,, or a total
salary of P*5,5.+.,, per $onth.
On De"e$ber ++, *44., he filed a Co$plaintA*5B a!ainst PNB for ille!al suspension, ille!al dis$issal, and da$a!es
before the NRC.
abor /rbiter, NRC, and C/ Dispositions
On (uly 4, *444, abor /rbiter Pablo C. Espiritu !ave :ud!$ent, the dispositive portion of whi"h reads=
?@ERE-ORE, :ud!$ent is hereby rendered as follows=
*. Dis$issin! the "o$plaint for ille!al dis$issal a!ainst respondents for want of $erit.
+. Orderin! PNB to pay "o$plainant unpaid wa!es for the period <ay *+, *443 to O"tober )*, *443 in the a$ount
of P*,),.43.,,.
). Dis$issin! "o$plainant9s "lai$s for da$a!es and other $onetary "lai$s for la"' of $erit.
SO ORDERED.A*4B
In his rulin!, the abor /rbiter opined that as an e$ployee and offi"er of PNB for ei!hteen %*5& years, Gelas"o is
e>pe"ted to 'now ban' pro"edures, in"ludin! the e>pe"ted entries in a savin!s passboo'. Even if it should be
assu$ed that he presented his passboo' when he withdrew DSL*2,,,,.,, at the PNB i!ao Bran"h on (une ),,
*442, he should have 'nown that there was so$ethin! wron! with the a$ounts "redited to his a""ount when he $ade
an update on O"tober 3, *442. Bein! an audit offi"er, and fully aware of his withdrawal of DSL*2,,,,.,,, he should
have $ade in6uiries on the in"onsisten"y of the entries in his passboo'.A+,B
#he abor /rbiter also found as fli$sy the ar!u$ent that the additional DSL*2,,,,.,, was the a$ount !iven to
Gelas"o by his brother
fro$ the Dnited States. /s early as O"tober 3, *442, when he updated his passboo', Gelas"o should have 'nown that
%*& his brother9s "he"'s in the a$ount of DSL*2,,,,.,, have not been deposited in his dollar savin!s a""ount and %+&
he appears to have been i$properly "redited with DSL*2,,,,.,,.A+*B
<oreover, the abor /rbiter held that the entry in the passboo' purportedly refle"tin! the withdrawal of
DSL*2,,,,.,, is a for!ery. It was done to "onfor$ to the defense of Gelas"o that he presented his passboo' on (une
),, *442.A++B
On the "har!e of ille!al suspension, the abor /rbiter held that the preventive suspension of Gelas"o was reasonable
in view of the sensitive
nature of his position. It was also ne"essary to prote"t the re"ords of PNB.A+)B It follows that the withholdin! of his
"o$pany benefits is reasonable.A+8B Nonetheless, he should be paid his salary fro$ <ay *+, *443 up to O"tober )*,
*443.A+2B
@is "lai$ for da$a!es and attorney9s fees $ust be denied be"ause PNB did not violate his ri!hts.A+3B
Dissatisfied with the de"ision of the abor /rbiter, both Gelas"oA+.B and PNBA+5B appealed to the NRC.
On (uly )*, +,,,, the NRC affir$ed with $odifi"ation the abor
/rbiter de"ision, disposin!, thus=
?@ERE-ORE, the de"ision appealed fro$ is hereby <ODI-IED to the e>tent that the award of unpaid salaries is
hereby REDDCED to the "o$plainant9s salaries fro$ <ay +., *443 to (uly )*, *443. Other dispositions in the
appealed de"ision stands %si"& affir$ed.A+4B
In sustainin! the abor /rbiter, the NRC held that Gelas"o9s la"' of 'nowled!e of the non0postin! of his
withdrawal is not "redible. Even a "ursory loo' at his passboo' shows that no deposit of DSL*2,,,,.,, was
ever $ade. #hat there was still a balan"e of $ore than DSL*2,,,,.,, in his a""ount after the withdrawal he $ade on
(une ),, *442 "ould only $ean that the withdrawal was never posted. ?orse, based also on the entries in his
passboo', it is "lear that the withdrawal on (une ),, *442 was a Ino0boo'I
transa"tion. #he withdrawal of DSL*2,,,,.,, was not ta'en into "onsideration in the deter$ination of the balan"e of
(une ),, *442 and the su""eedin! dates. #hus, it is "lear that the entry in 6uestion was falsified. It was $ade $erely
to bolster his subse6uent "lai$ that he presented his passboo' when he withdrew on (une ),, *442.A),B
#he NRC "on"luded that the falsifi"ation of the passboo' shows de"eit on the part of Gelas"o. @e too' advanta!e of
his position. #he postin! of the falsified entry "ould not have been $ade without, or was at least fa"ilitated by, his
bein! an e$ployee of the ban'. #hus, his subse6uent withdrawals a$ounted to losses on the part of the ban'. @e
$ade those
withdrawals fro$ his a""ount with full 'nowled!e that the balan"e of his
passboo' of $ore than DSL*2,,,,.,, was attributed to the non0postin! of the (une ),, *442 withdrawal.A)*B
#he NRC also held that he had been preventively suspended for
$ore than thirty %),& days as of <ay +., *443. Sin"e he was paid his salaries fro$ /u!ust *, *443 to O"tober )*,
*443, he $ay re"over only his salary fro$ <ay +., *443 to (uly )*, *443.A)+B
i'e the abor /rbiter, the NRC held that Gelas"o $ay not re"over da$a!es. @is dis$issal was not done
oppressively or in bad faith. Neither was he sub:e"ted to unne"essary e$barrass$ent or hu$iliation.A))B
@is $otion for re"onsideration havin! been denied, Gelas"o elevated the $atter to the C/ by way of petition for
review on "ertiorari under Rule 8) of the Rules of Court.A)8B On /pril ++, +,,8, the C/ rendered the assailed
de"ision, the fallo statin!, thus=
?@ERE-ORE, for the fore!oin! dis"ussions, ?e REGERSE and SE# /SIDE the findin!s of publi" respondent
NRC and abor /rbiter and hereby enter a de"ision orderin! PNB to pay petitioner a separation pay e6uivalent to
half0$onth salary for every year of servi"e, plus ba"'wa!es fro$ the ti$e of his ille!al ter$ination up to the finality
of this de"ision.
SO ORDERED.A)2B
/""ordin! to the C/, the failure of Gelas"o to present his passboo' and a letter of introdu"tion does not "onstitute
$is"ondu"t. /ssu$in! for the sa'e of ar!u$ent that he "o$$itted a serious $is"ondu"t in not properly $onitorin!
his a""ount with ordinary dili!en"e and pruden"e, the sa$e $ay be said of PNB when it failed to $a'e the ne"essary
postin! of his withdrawal.A)3B astly, the alle!ed offense of Gelas"o is not wor'0related to "onstitute :ust "ause for
his dis$issal.A).B
Issues
PNB has filed the instant petition for review on "ertiorari, puttin! forth the followin! issues for Our resolution, vi7.=
I. ?@E#@ER OR NO# #@E CODR# O- /PPE/S ERRED /ND 1R/GEE /BDSED I#S DISCRE#ION IN
-INDIN1 #@/# RESPONDEN# @/S BEEN IE1/E DIS<ISSED BE #@E PE#I#IONERS.
II. ?@E#@ER OR NO# #@E CODR# O- /PPE/S ERRED /ND 1R/GEE /BDSED I#S DISCRE#ION IN
DIREC#IN1 PNB #O P/E RESPONDEN# SEP/R/#ION P/E /ND B/CH?/1ES.A)5B %Dnders"orin! supplied&
?e add a third issue whi"h was raised by PNB before the C/ but was, however, left unresolved= whether Gelas"o
too' the "orre"t re"ourse when he elevated the de"ision of the NRC to the C/ by way of petition for review on
"ertiorari under Rule 8).
Our Rulin!
I. /ppeal does not lie fro$ the de"ision of the NRC.
?e first address the pro"edural 6uestion on the propriety of the Rule 8) petition. Rule 8) provides for appeal fro$
6uasi0:udi"ial a!en"ies to the C/ by way of petition for review. Petition for review on "ertiorari or appeal by
"ertiorari is a re"ourse to the Supre$e Court under Rule 82.
#he $ode of appeal resorted to by Gelas"o is wron! be"ause appeal is not the proper re$edy in elevatin! to the C/
the de"ision of the NRC. Se"tion +, Rule 8) of the *44. Rules of Civil Pro"edure is e>pli"it that Rule 8) Ishall not
apply to :ud!$ents or final orders issued under the abor Code of the Philippines.I
#he "orre"t re$edy that should have been availed of is the spe"ial "ivil a"tion of "ertiorari under Rule 32. /s this
Court held in the "ase of Pure -oods Corporation v. NRC,A)4B Ithe party $ay also seasonably avail of the spe"ial
"ivil a"tion for "ertiorari, where the tribunal, board or offi"er
e>er"isin! :udi"ial fun"tions has a"ted without or in e>"ess of its :urisdi"tion, or with !rave abuse of dis"retion, and
prayin! that :ud!$ent be rendered annullin! or $odifyin! the pro"eedin!s, as the law re6uires, of su"h tribunal,
board or offi"er.IA8,B In any "ase, St. <artin -uneral @o$es v. National abor Relations Co$$issionA8*B settled any
doubt as to the $anner of elevatin! de"isions of the NRC to the C/ by holdin! that Ithe le!islative intend$ent was
that the spe"ial "ivil a"tion of "ertiorari was and still is the proper vehi"le for :udi"ial review of de"isions of the
NRC.IA8+B
#hat the de"ision of the NRC is not sub:e"t to appeal "ould have
been a !round for the C/ to dis$iss the appeal of Gelas"o.A8)B But even assu$in!, ar!uendo, that his petition "ould
be liberally treated as one for "ertiorari under Rule 32, the re"ourse should not have prospered.
II. Gelas"o "o$$itted serious $is"ondu"t, hen"e, his dis$issal is :ustified.
/rti"le +5+ of the abor Code enu$erates the :ust "auses where an e$ployer $ay ter$inate the servi"es of an
e$ployee,A88B to wit=
a& Serious $is"ondu"t or willful disobedien"e by the e$ployee of the lawful orders of his e$ployer or representative
in "onne"tion with his wor';
b& 1ross and habitual ne!le"t by the e$ployee of his duties;
"& -raud or willful brea"h by the e$ployee of the trust reposed in hi$ by his e$ployer or duly authori7ed
representative;
d& Co$$ission of a "ri$e or offense by the e$ployee a!ainst the person of his e$ployer or any i$$ediate $e$ber
of his fa$ily or his duly authori7ed representative; and
e& Other "auses analo!ous to the fore!oin!.
In /ustria v. National abor Relations Co$$ission,A82B the Court defined $is"ondu"t as Ii$proper and wron!ful
"ondu"t. It is the trans!ression of so$e established and definite rule of a"tion, a forbidden a"t, a dereli"tion of duty,
willful in "hara"ter, and i$plies wron!ful intent and not $ere error in :ud!$ent.IA83B In Ca$us v. Civil Servi"e
Board of /ppeals,A8.B $is"ondu"t was des"ribed as Iwron! or i$proper "ondu"t.IA85B It i$plies a wron!ful
intention and not a $ere error of :ud!$ent.A84B
Of "ourse, ordinary $is"ondu"t would not :ustify the ter$ination of the servi"es of an e$ployee. #he law is e>pli"it
that the $is"ondu"t should be serious. It is settled that in order for $is"ondu"t to be serious, Iit $ust be of su"h
!rave and a!!ravated "hara"ter and not $erely trivial or uni$portant.IA2,B /s a$plified by :urispruden"e, the
$is"ondu"t $ust %*& be serious; %+& relate to the perfor$an"e of the e$ployee9s duties; and %)& show that the
e$ployee has be"o$e unfit to "ontinue wor'in! for the e$ployer.A2*B
<easured by the fore!oin! yardsti"', ?e rule that Gelas"o "o$$itted serious $is"ondu"t that warrants ter$ination
fro$ e$ploy$ent.
/. #he $is"ondu"t is serious. Gelas"o violated ban' rules when he transa"ted a Ino0boo'I withdrawal by his failure
to present his passboo' to the PNB i!ao, /lbay Bran"h on (une ),, *442. Se"tion *+*3 of the <anual of
Re!ulations for Ban's and Other -inan"ial Inter$ediaries state that IAbBan's are prohibited fro$ issuin!Ca""eptin!
Nwithdrawal authority slips9 or any other si$ilar instru$ents desi!ned to effe"t withdrawals of savin!s deposits
without followin! the usual pra"ti"e of re6uirin! the depositors "on"erned to present their passboo's and
a""o$plishin! the ne"essary withdrawal slips.I
-urther, he failed to present any letter of introdu"tion as $andated under 1eneral Cir"ular )0.+04+ whi"h re6uires
that IAbBefore !oin! out0of0town, the Depositor se"ures a etter of Introdu"tion fro$ the bran"hCoffi"e where his
Peso Savin!s /""ount is $aintained.I
#he presentation of passboo' and letter of introdu"tion is not without a valid reason. /s aptly stated by the I/D of
PNB=
Considerin! that the PNB i!ao, /lbay Bran"h is an offline bran"h, it is a $ust that an OI and the passboo' be
presented by the depositor before any withdrawal is allowed. #his pro"edure is re6uired in order for the ne!otiatin!
bran"h to deter$ine or as"ertain the available balan"e and the spe"i$en si!nature of the withdrawin! party.
<oreover, the $aintainin! bran"h upon issuan"e of the OI shall pla"e a IholdI on the a""ount in the "o$puter as an
internal "ontrol pro"edure.A2+B
#rue, a stri"t readin! of 1eneral Cir"ular )0.+04+ would lead one to "on"lude that only persons with peso savin!s
a""ount are re6uired to se"ure a letter of introdu"tion. @owever, si$ple lo!i" di"tates that those $aintainin! dollar
savin!s a""ount are also in"luded. No "o!ent reason would be served by the rule if only persons with peso savin!s
a""ount are re6uired to !et a letter of introdu"tion. Otherwise, there "an be a "ir"u$vention of the rule. Ne$o potest
fa"ere per aliu$ 6ud non potest fa"ere per dire"tu$. No one is allowed to do indire"tly what he is prohibited to do
dire"tly. Sinu$an ay hindi pinapaya!an! !awin nan! hindi tuwiran an! ipina!babawal !awin nan! tuwiran.
/s an audit offi"er, Gelas"o should be the first to ensure that ban'in! laws, poli"ies, rules and re!ulations, are stri"tly
observed and applied by its offi"ers in the day0to0day transa"tions. #he ban'in! syste$ is an indispensable institution
in the $odern world. It plays a vital role in the e"ono$i" life of every "ivili7ed nation. ?hether ban's a"t as $ere
passive entities for the safe'eepin! and savin! of $oney, or as a"tive instru$ents of business and "o$$er"e, they
have be"o$e an ubi6uitous presen"e a$on! the "iti7enry, who have "o$e to re!ard the$ with respe"t and even
!ratitude and, $ost of all, "onfiden"e.A2)B
#he C/, however, opined that the failure of Gelas"o to abide by the rules is not serious $is"ondu"t be"ause %*& fro$
the ad$ission of PNB itself, allowin! ban' personnel who are out0of0town to $a'e a Ino0boo'I transa"tion without a
letter of introdu"tion is "onsidered a "o$$on pra"ti"e, and %+& the approvin! offi"ers of PNB i!ao Bran"h should
have also been ad$inistratively "har!ed "onsiderin! that the Ino0boo'I transa"tion "ould not have pushed throu!h
without their approval.A28B
In Santos v. San <i!uel Corporation,A22B petitioner, in his defense, "ited the prolon!ed pra"ti"e of payroll personnel,
in"ludin! persons in $ana!erial levels, of en"ashin! personal "he"'s. -indin! this ar!u$ent un$eritorious, the Court
held that IApBrolon!ed pra"ti"e of en"ashin! personal "he"'s a$on! respondent9s payroll personnel does not e>"use
or :ustify petitioner9s $isdeeds. @er willful and deliberate a"ts were in !ross violation of respondent9s poli"y a!ainst
en"ash$ent of personal "he"'s of its personnel, e$bodied in its Cash Depart$ent <e$orandu$ dated Septe$ber 3,
*454.IA23B #he Court even added that petitioner I"annot fei!n i!noran"e of su"h $e$orandu$ as she is duty0bound
to 'eep abreast of "o$pany poli"ies related to finan"ial $atters within the "orporation.IA2.B ?e apply the sa$e
prin"iple here.
Suffi"e it to state that the option of who to "har!e or punish belon!s to PNB. /s an e$ployer, PNB is !iven the
latitude to deter$ine who a$on! its errin! e$ployees should be punished, to what e>tent and what penalty to
i$pose.A25B #oo, by "har!in! Gelas"o, PNB is not estopped fro$ "har!in! its other e$ployees who $i!ht as well
have been re$iss with their :ob.
Of "ourse, ?e are not unaware that Gelas"o had a "han!e of heart. In his sworn etter0E>planation -ebruary *+,
*443, he ad$itted that his (une ),, *442 withdrawal of DSL*2,,,,.,, was a Ino0boo'I transa"tion. @owever, in his
sworn /nswer dated /pril ),, *443, he "lai$ed that he a"tually presented his passboo' when he withdrew on (une
),, *442.
#o re"all, he was "har!ed with dishonesty, !rave $is"ondu"t, andCor "ondu"t !rossly pre:udi"ial to the best interest of
the servi"e for irre!ularly handlin! his dollar savin!s a""ount. #hus, it is safe to assu$e that when he prepared his
-ebruary *+, *443 sworn etter0E>planation, the "ir"u$stan"es surroundin! his (une ),, *442 withdrawal at PNB
i!ao, /lbay Bran"h were still fresh on his $ind. #he alle!ations a!ainst hi$ were serious, whi"h should have put
hi$ on !uard fro$ preparin! a hapha7ard e>planation. @e should have been $indful that dire "onse6uen"es would
surely befall hi$ should the "har!es a!ainst hi$ be proven. est it be for!otten, the no0boo' withdrawal was
"onfir$ed by the "on"erned offi"ers of PNB i!ao, /lbay Bran"h, na$ely, Fuia$bao, 1a"er, and etada. #hese
"ir"u$stan"es, ta'en to!ether, lead to no other "on"lusion than that Gelas"o "han!ed his e>planation fro$ Ino0boo'I
to Iwith boo'I transa"tion after reali7in! that he violated ban' rules and re!ulations.
Pere7 v. People,A24B is illustrative on this s"ore. Pere7, an a"tin! $uni"ipal treasurer, sub$itted two "ontradi"tin!
answers e>plainin! the lo"ation of the $issin! funds under his "ustody and "ontrol= the first, reiteratin! his previous
verbal ad$ission before the audit tea$ that part of the $oney was used to pay for the loan of his late brother, another
portion was spent for the food of his fa$ily, and the rest for his $edi"ine; and the se"ond, "lai$in! that the alle!ed
$issin! a$ount was in the possession and "ustody of his a""ountable personnel at the ti$e of the audit e>a$ination.
#his Court held that the sudden turnaround of Pere7 was $erely an afterthou!ht. @e Ionly "han!ed his story to
e>onerate hi$self, after reali7in! that his first /nswer put hi$ in a hole, so to spea'.IA3,B Neither did the Court
believe that his alle!ed si"'ness affe"ted the preparation of his first /nswer. Pere7 Ipresented no "onvin"in!
eviden"e that his disease at the ti$e he for$ulated that /nswer di$inished his "apa"ity to for$ulate a true, "lear and
"oherent response to any 6uery. In fa"t, its "ontents $erely reiterated his verbal e>planation to the auditin! tea$ on
(anuary 2, *454 on how he disposed of the $issin! funds.IA3*B
?e find no "o!ent reason to depart fro$ Our rulin! in Pere7. #he "lai$ of Gelas"o that his initial answer was $ade
under pressin! "ir"u$stan"es is too fli$sy an e>"use. It parta'es of the nature of an alibi. /s su"h, it "onstitutes a
self0servin! ne!ative eviden"e whi"h "annot he a""orded !reater evidentiary wei!ht than the de"laration of "redible
witnesses who testified on affir$ative $atters.A3+B #he Court has "onsistently frowned upon the defense of alibi, and
re"eived it with "aution, not only
be"ause it is inherently wea' and unreliable but also be"ause it "an be easily fabri"ated.A3)B
/lso worth notin! is that Gelas"o never i$puted any ill $otive on the part of Re>or, 1a"er, and etada who
"olle"tively narrated that the (une ),, *442 withdrawal was a no0boo' transa"tion. #hey "onfir$ed his earlier version
that he did not present his passboo' when he withdrew the DSL*2,,,,.,, on (une ),, *442. In any "ase, the fa"t that
he "han!ed his stan"e puts his "redibility in doubt. ?as he lyin! when he sub$itted his sworn letter0e>planation of
-ebruary *+, *443, or when he sub$itted his sworn /nswer dated /pril ),, *443O /lle!ans "ontraria non est
audiendus. @e is not to be heard who alle!es thin!s "ontradi"tory to ea"h other. @indi dapat pa'in!!an an! na!sasabi
n! $!a ba!ay na salun!at sa isa9t0isa.
Gelas"o did not only violate ban' rules and re!ulations. ?hat "o$pounds his offense was his unusual silen"e. @e
never infor$ed PNB about the hu!e overstate$ent of DSL*2,,,,.,, in his a""ount. @e updated his passboo' on
O"tober 3, *442 by depositin! DSL*+..5. #hus, as early as that date, he should have 'nown that so$ethin! was
wron! with the "redited balan"e in his passboo' and reported it i$$ediately to the "on"erned offi"ers of PNB. ?hat
he did, instead, was to 'eep $u$ until PNB dis"overed the in"ident and notified hi$ on -ebruary ., *443, or al$ost
ei!ht %5& $onths after his no0boo' withdrawal on (une ),, *442.
?ith his silen"e, he "learly intended to !ain at the e>pense of PNB. #he o$ission to report is not trivial or
in"onse6uential be"ause it !ave hi$ the opportunity to withdraw fro$ his dollar savin!s a""ount $ore than its real
balan"e, as what he a"tually did. @e too' advanta!e of the overstate$ent of his a""ount, instead of prote"tin! the
interest of the ban'. It would be i$possible for hi$ not to dete"t the error at the ti$e he deposited DSL*+..5 on
O"tober 3, *442, be"ause his a""ount had a bi! balan"e despite the fa"t that no lar!e a$ount of $oney was
deposited.
@is "lai$ that he was satisfied with the updated balan"e of DSL*2,853.,* on O"tober 3, *442, as he thou!ht that the
DSL*2,,,,.,, in his a""ount was the a$ount !iven by his brother, is si$ply unbelievable. It is a desperate atte$pt at
e>"ulpation. #he deposit of the $oney fro$ his brother should have been refle"ted in the on0line "o$puter of PNB.
#he
deposit would have also been posted for update upon the presentation of the passboo' on O"tober 3, *442. No
deposit of DSL*2,,,,.,, was, however, refle"ted in the passboo'.
In /boiti7 Shippin! Corporation v. Dela Serna,A38B #iu v. National abor Relations Co$$ission,A32B -ive ( #a>i v.
National abor Relations Co$$ission,A33B and -al!uera v. insan!an,A3.B a$on! other "ases, this Court
"onsistently held that fa"tual findin!s of 6uasi0:udi"ial a!en"ies, whi"h have a"6uired e>pertise in $atters entrusted
to their :urisdi"tion, are a""orded not only respe"t but also finality if they are supported by substantial eviden"e.A35B
#hus, in the absen"e of proof that the abor /rbiter or the NRC had !ravely abused their dis"retion, this Court shall
dee$ "on"lusive and will not overturn their parti"ular fa"tual findin!s.A34B
#he abor /rbiter and the NRC are in unison that Gelas"o transa"ted a no0boo' withdrawal and failed to present a
letter of introdu"tion at PNB i!ao, /lbay Bran"h on (une ),, *442. @e also for!ed his passboo' to "over up his
offense. Bein! duly supported by substantial eviden"e, ?e sustain said findin!. -itness for "ontinued e$ploy$ent
"annot be "o$part$entali7ed into ti!ht little "ubi"les of aspe"ts of "hara"ter, "ondu"t, and ability separate and
independent of ea"h other. / servi"e of irre!ularities, when "o$bined, $ay "onstitute serious $is"ondu"t whi"h is a
:ust "ause for dis$issal.A.,B
B. #he serious $is"ondu"t relates to the perfor$an"e of duties. #he C/ ruled that the offense of Gelas"o was not
wor'0related and does not warrant dis$issal. It li'ewise held that there is no proof that his failure to be a !ood
depositor affe"ted his duties or perfor$an"e as an e$ployee of PNB.A.*B
/t first !lan"e, the a"ts "o$$itted by Gelas"o pertain only to his bein! a depositor of PNB. But he has a dual
personality. @e was a depositor and, at the sa$e ti$e, an offi"er of the ban'.
On one hand, he failed to present his passboo' and a letter of introdu"tion when he withdrew DSL*2,,,,.,, at PNB
i!ao, /lbay Bran"h on (une ),, *442. #his serious $is"ondu"t was a!!ravated when he presented a falsified
passboo' to $a'e it appear that he did not "o$$it any $isdeed. On the other hand, he wor'ed for PNB for ei!hteen
%*5& lon! years, his last position havin! been as <ana!er * of the I/D. /s su"h, he was involved in the e>a$ination
of the boo's of a""ount of PNB. #hus,
when he violated ban' rules and re!ulations and tried to "over up his infra"tions by falsifyin! his passboo', he was
not only "o$$ittin! the$ as a depositor but also, or rather $ore so, as an offi"er of the ban'. It is a'in to
falsifi"ation of ti$e "ards,A.+B and "ir"ulation of fa'e $eal ti"'ets,A.)B whi"h this Court held as a :ust "ause for
ter$inatin! the servi"es of an e$ployee.
C. Gelas"o has be"o$e unfit to "ontinue wor'in! at PNB. #a'en to!ether, his a"ts render hi$ unfit to re$ain in the
e$ploy of the ban'. #hat it is his first offense is of no $o$ent be"ause he holds a $ana!erial position. E$ployers
are allowed wide latitude of dis"retion in ter$inatin! $ana!erial e$ployees who, by virtue of their position, re6uire
full trust and "onfiden"e in the perfor$an"e of their duties.A.8B <ana!erial e$ployees li'e Gelas"o are tas'ed to
perfor$ 'ey and sensitive fun"tions and are bound by $ore e>a"tin! wor' ethi"s.A.2B Indeed, not even his ei!hteen
%*5& years of servi"e "ould e>onerate hi$. /s this Court held in E6uitable PCIBan' v. Ca!uioa=A.3B
#he lenien"y sou!ht by respondent on the basis of her )2 years of servi"e to the ban' $ust be wei!hed in
"on:un"tion with the other "onsiderations raised by petitioners. /s that servi"e has been a$ply "o$pensated, her plea
for lenien"y "annot offset her dishonesty. Even !overn$ent e$ployees who are validly dis$issed fro$ the servi"e by
reason of ti$ely dis"overed offenses are deprived of retire$ent benefits. #reatin! respondent in the sa$e $anner as
the loyal and "ode0abidin! e$ployees, despite the ti$ely dis"overy of her Code violations, $ay indeed have a
de$orali7in! effe"t on the entire ban'. Be it re$e$bered that ban's thrive on and endeavor to retain publi" trust and
"onfiden"e, every violation of whi"h $ust thus be a""o$panied by appropriate san"tions.A..B
III. #he C/ erred in dire"tin! PNB to pay Gelas"o separation pay and ba"'wa!es. PNB has no other liability to
Gelas"o, e>"ept his unpaid wa!es fro$ <ay +., *443 to (uly )*, *443.
PNB was re!istered under the Corporation Code under SEC Re!. No. /SO 430,,2222 dated <ay +., *443.A.5B
#hus, on that day, e$ployees of
PNB "a$e under the :urisdi"tion of the abor Code, whose Se"tions 5 and 4 of Rule JJIII, Boo' G of the
I$ple$entin! Rules state=
Se"tion 5. Preventive Suspension. P #he e$ployer $ay pla"e the wor'er "on"erned under preventive suspension if
his "ontinued e$ploy$ent poses a serious and i$$inent threat to the life or property of the e$ployer or his "o0
wor'ers.
Se"tion 4. No preventive suspension shall last lon!er than thirty %),& days. #he e$ployer shall thereafter reinstate the
wor'er in his for$er or in a substantially e6uivalent position or the e$ployer $ay e>tend the period of suspension
provided that durin! the period of e>tension, he pays the wa!es and other benefits due to the wor'er. In su"h "ase,
the wor'er shall not be bound to rei$burse the a$ount paid to hi$ durin! the e>tension if the e$ployer de"ides,
after "o$pletion of the hearin!, to dis$iss the wor'er.
PNB has the ri!ht to preventively suspend Gelas"o durin! the penden"y of the ad$inistrative "ase a!ainst hi$. It was
obviously done as a $easure of self0prote"tion. It was ne"essary to se"ure the vital re"ords of PNB whi"h, in view of
the position of Gelas"o as internal auditor, are easily a""essible to hi$.
Gelas"o was preventively suspended for $ore than thirty %),& days as of <ay +., *443, while the re"ords bear that
Gelas"o was paid his salaries fro$ /u!ust *, *443 to O"tober )*, *443.A.4B #hus, the NRC is "orre"t in its holdin!
that he $ay re"over his salaries fro$ <ay +., *443 to (uly )*, *443.
@e is not entitled to separation and ba"'wa!es be"ause he was not
ille!ally dis$issed.A5,B ?e note thou!h that PNB was not at all insensitive to his pli!ht, "onsiderin! %*& his
restitution of the a$ount a'in to no a"tual loss to the ban', and %+& his len!th of servi"e of ei!hteen %*5& years.A5*B
/s stated earlier, PNB i$posed on Gelas"o the penalty of for"ed resi!nation with benefits, instead of dis$issal. #he
re"ords bear out that he was !ranted P28+,**,..2 as separation benefitsA5+B whi"h was used to offset his loan in the
ban', leavin! an outstandin! balan"e of P*3.,3+2.5+ as of <ay +., *44..A5)B ?e find that PNB a"ted hu$anely
under the "ir"u$stan"es.
One last word.
#he law i$poses !reat burdens on the e$ployer. One needs only to loo' at the varied provisions of the abor Code.
Indeed, the law is tilted towards the pli!ht of the wor'in! $an. #he abor Code is titled that way and not as
IE$ployer Code.I /s one /$eri"an rulin! puts it, the prote"tion of labor is the hi!hest offi"e of our laws.A58B
Corollary to this, however, is the ri!ht of the e$ployer to e>pe"t fro$ the e$ployee no less than ade6uate wor',
dili!en"e and !ood "ondu"t.A52B /s <r. (usti"e (oseph <"Henna of the Dnited States Supre$e Court said in /ri7ona
Copper Co. v. @a$$er,A53B IAtBhe differen"e between the position of the e$ployer and the e$ployee, si$ply
"onsiderin! the latter as e"ono$i"ally wea'er, is not a :ustifi"ation for the violation of the ri!hts of the for$er.IA5.B
?@ERE-ORE, the petition is 1R/N#ED and the appealed De"ision REGERSED and SE# /SIDE. #he De"ision
of the National abor Relations Co$$ission is REINS#/#ED
ALBERTO NAVARRO, petitioner,
vs.
COCA-COLA BOTTLERS PHILS. INC., MANUEL GARCIA and RUSTUM
ALEJANDRINO, respondents.
D E C I S I O N
QUISUMBING, J.:
#his is an appeal to reverse and set aside both the De"ision1 dated /u!ust +., +,,) and the Resolution2 dated <ar"h
5, +,,8 of the Court of /ppeals in C/01.R. SP No. 3)).4. #he appellate "ourt had reversed the Resolution3 of the
National abor Relations Co$$ission %NRC& and held that petitioner /lberto Navarro was validly dis$issed by the
respondents.
#he fa"ts are undisputed.
Petitioner was an e$ployee of the respondent Co"a0Cola Bottlers Phils., In". %Co"a0Cola& for $ore than a de"ade.
Spe"ifi"ally, he wor'ed as a for'lift operator for Co"a0Cola fro$ Nove$ber *, *45. to -ebruary +., *445.
#he respondent "o$pany has an E$ployees Code of Dis"iplinary Rules and Re!ulations, whi"h in"ludes Rule ,,+052.
Se"tion 8%i& of the rule provided for the penalty of DISC@/R1E for a tenth /?OP4 C/?O,5 whether "onse"utive
or not, followin! other /?OPC/?Os within one "alendar year.
On /u!ust **, *44., petitioner did not report to wor' be"ause of heavy rains whi"h flooded the entire baran!ay where
he resided. In a <e$orandu$ dated O"tober *, *44., he was re6uired to e>plain in writin! within +8 hours why no
dis"iplinary a"tion should be i$posed on hi$ for his tenth absen"e without per$ission. In response, petitioner
sub$itted a written e>planation a""o$panied by a Certifi"ation6 fro$ his Baranga Captain, statin! that his absen"e
was due to heavy rains and subse6uent floodin! that hit his baran!ay. ater, petitioner filed a Supple$ental ?ritten
E>planation,7 in lieu of answers to a 6uestionnaire provided by the "o$pany. Petitioner stated that on /u!ust **,
*44., his house was heavily flooded and that on the ne>t day, he i$$ediately filed an appli"ation for leave of
absen"e. Despite his "o$plian"e and e>planation, petitioner was dis$issed on -ebruary +., *445 and !iven a noti"e of
ter$ination8 whi"h enu$erated the dates of his absen"es without per$ission.
#hereafter, petitioner filed a "o$plaint for ille!al dis$issal with the abor /rbiter, whi"h was dis$issed for la"' of
$erit.
On appeal, the NRC reversed the De"ision of the abor /rbiter. #he dispositive portion of the NRC Resolution
reads=
?@ERE-ORE, pre$ises "onsidered, Co$plainants9 appeal is 1R/N#ED. #he abor /rbiter9s de"ision in the above0
entitled "ase is hereby /NNDED and SE# /SIDE. / new one is entered de"larin! that Co$plainant Navarro9s
dis$issal fro$ his e$ploy$ent is ille!al.
Respondent Co"a0Cola Bottlers Phils., In". is hereby ordered to i$$ediately reinstate Co$plainant Navarro to his
for$er position without loss of seniority ri!hts and other privile!es and to pay his full ba"'wa!es, in"lusive of
allowan"es, and his other benefits or their $onetary e6uivalent "o$puted fro$ the ti$e he was ille!ally dis$issed up
to the ti$e of his a"tual reinstate$ent.
Respondent Co"a0Cola Bottlers Phils., In". is li'ewise ordered to pay Co$plainant Navarro attorney9s fees e6uivalent
to ten per"ent %*,Q& of his total $onetary award.
SO ORDERED.9
Respondent elevated the "ase to the Court of /ppeals. #he Court of /ppeals annulled the resolution of the NRC. It
ruled as follows=
?@ERE-ORE, pre$ises "onsidered, the De"ision %si"& as well as the Resolution of the National abor Relations
Co$$ission is hereby SE# /SIDE and the De"ision of the abor /rbiter is reinstated with the <ODI-IC/#ION that
petitioner Co"a0Cola Bottlers Phils., In". is ordered to pay private respondent /lberto Navarro separation pay
e6uivalent to one0half %*C+& $onth salary for every year of servi"e startin! fro$ Nove$ber *, *45. until his dis$issal
on -ebruary +., *445.
SO ORDERED.10
#he appellate "ourt also denied petitioner9s $otion for re"onsideration.
@en"e the instant petition before us, raisin! the followin! issues=
0 / 0
?@E#@ER OR NO# #@E @ONOR/BE CODR# O- /PPE/S CO<<I##ED REGERSIBE ERROR /ND
1R/GEE /BDSED I#S DISCRE#ION IN REGERSIN1 /ND SE##IN1 /SIDE #@E DECISION O- #@E NRC
/ND REINS#/#IN1, ?I#@ <ODI-IC/#ION, #@/# O- #@E /BOR /RBI#ER ?@EN, OBGIODSE, #@E
RDIN1 O- #@E CO<<ISSION IS <ORE IN /CCORD ?I#@ #@E EGIDENCE /ND SE##ED
(DRISPRDDENCE.
0 B 0
#@E @ONOR/BE CODR# O- /PPE/S DID NO# @EED #@E IN(DNC#ION O- #@IS @ONOR/BE
CODR# #@/#= I/S IS ?E0SE##ED, I- DODB#S EJIS# BE#?EEN #@E EGIDENCE PRESEN#ED BE
#@E E<POEER /ND #@E E<POEEE, #@E SC/ES O- (DS#ICE <DS# BE #I#ED IN -/GOR O- #@E
E<POEEE. SINCE I# IS / #I<E0@ONORED RDE #@/# IN CON#ROGERSIES BE#?EEN / /BORER
/ND @IS </S#ER, DODB#S RE/SON/BE /RISIN1 -RO< #@E EGIDENCE, OR IN #@E
IN#ERPRE#/#ION O- /1REE<EN#S /ND ?RI#IN1S S@ODD BE RESOGED IN #@E -OR<ER9S
-/GORI IN RENDERIN1 #@E DISPD#ED DECISION /ND RESOD#ION.11
Raised also as the threshold issue in this petition is= ?@E#@ER PE#I#IONER9S /PPIC/#ION -OR E/GE O-
/BSENCE S@ODD @/GE BEEN /O?ED BE #@E CO<P/NE.
Respondents "ontend that the appli"ation for leave was "orre"tly denied, and that petitioner violated the E$ployees
Code of Dis"iplinary Rules and Re!ulations when he in"urred his tenth absen"e. Petitioner, on the other hand, ar!ues
that his absen"e was e>"usable under the "ir"u$stan"es.
On this point, we are in a!ree$ent that petitioner9s appli"ation for leave should have been approved by the "o$pany.
@is absen"e was due to a fortuitous event outside of petitioner9s "ontrol.
In our view, petitioner had no wron!ful, perverse or even ne!li!ent attitude, intended to defy the order of his e$ployer
when he absented hi$self. @e did so be"ause heavy rains flooded their residential area whi"h was alon! the
railroad.12 In his favor, the Baranga Captain "ertified that indeed there was floodin! in their pla"e of residen"e.
/ wor'er "annot be reasonably e>pe"ted to anti"ipate ti$es of si"'ness nor e$er!en"y. @en"e, to re6uire prior noti"e
of su"h ti$es would be absurd. @e "an only !ive proper noti"e after the o""urren"e of the event P whi"h is what
petitioner did in this "ase.
In earlier "ases, we have e>pressed disapproval of dis$issal of e$ployees who have absented the$selves due to
e$er!en"y "ir"u$stan"es. In Bre! Master "nternational# "nc. v. National Federation o$ Labor %nions &N'FL%(,13the
e$ployee9s absen"e was pre"ipitated by a !rave fa$ily proble$ when his wife une>pe"tedly deserted hi$ and
abandoned the fa$ily. Dnder said "ir"u$stan"es, his absen"e was dee$ed :ustified. Si$ilarly, in this "ase, the reason
for petitioner9s absen"e was not of his own doin! $u"h less to his li'in!, thus we are of the view that he did not $erit
the e>tre$e penalty of dis$issal fro$ the servi"e.
?e reiterate that the State poli"y is to afford full prote"tion to labor. ?hen "onfli"tin! interests of labor and "apital are
wei!hed on the s"ales of so"ial :usti"e, the heavier influen"e of "apital should be "ounterbalan"ed by the "o$passion
that the law a""ords the less privile!ed wor'in!$an.14 Dnder /rti"le +.415 of the abor Code, an e$ployee who is
un:ustly dis$issed is entitled to reinstate$ent, without loss of seniority ri!hts and other privile!es, and to the pay$ent
of full ba"'wa!es, in"lusive of allowan"es, and other benefits or their $onetary e6uivalent, "o$puted fro$ the ti$e
his "o$pensation was withheld fro$ hi$.16
WHEREFORE, both the assailed De"ision dated /u!ust +., +,,) of the Court of /ppeals and its Resolution dated
<ar"h 5, +,,8 denyin! the $otion for re"onsideration are REGERSED and SE# /SIDE.
Respondent Co"a0Cola Bottlers Phils., In". is hereby ORDERED
%*& to i$$ediately reinstate petitioner Navarro to his for$er position without loss of seniority ri!hts and other
privile!es;
%+& to pay his full ba"'wa!es, in"lusive of allowan"es, and his other benefits or their $onetary e6uivalent "o$puted
fro$ the ti$e he was ille!ally dis$issed up to the ti$e of his a"tual reinstate$ent; and
%)& to pay petitioner Navarro attorney9s fees e6uivalent to *,Q of his total $onetary award.
Costs a!ainst respondents.
SO ORDERED.
Star Paper Corporation vs. Ronaldo Si$bol, et al.
[G.R. No.164774. April 12, 2006]
Facts:
Petitioner Star Paper Corporation i a !orporation en"a"e# in tra#in", prin!ipall$ o% paper pro#&!t. 'oep(ine
)n"it!o i it *ana"er o% t(e Peronnel an# A#+initration ,epart+ent -(ile Se.atian C(&a i it *ana"in"
,ire!tor.
Repon#ent Ronal#o ,. Si+.ol /Si+.ol0, 1il%re#a N. Co+ia /Co+ia0 an# 2orna 3. 3trella /3trella0 -ere all
re"&lar e+plo$ee o% t(e !o+pan$. Si+.ol -a e+plo$e# .$ t(e !o+pan$ on )!to.er 1993 an# +et Al+a
,a$rit, alo an e+plo$ee o% t(e !o+pan$, -(o+ (e +arrie# on '&ne 1998. Prior to t(e +arria"e, )n"it!o
a#4ie# t(e !o&ple t(at (o&l# t(e$ #e!i#e to "et +arrie#, one o% t(e+ (o&l# rei"n p&r&ant to a !o+pan$
poli!$. Si+.ol rei"ne# on '&ne 20, 1998 p&r&ant to t(e !o+pan$ poli!$.
Co+ia -a (ire# .$ t(e !o+pan$ on 5e.r&ar$ 1997. S(e +et 6o-ar# Co+ia, a !o7e+plo$ee, -(o+ (e
+arrie# on '&ne 1, 2000. )n"it!o li8e-ie re+in#e# t(e+ t(at p&r&ant to !o+pan$ poli!$, one +&t rei"n
(o&l# t(e$ #e!i#e to "et +arrie#. Co+ia rei"ne# on '&ne 30, 2000.
3trella -a (ire# on '&l$ 29, 1994. S(e +et 2&iito 9&:i"a /9&:i"a0, alo a !o7-or8er. Petitioner tate# t(at
9&:i"a, a +arrie# +an, "ot 3trella pre"nant. ;(e !o+pan$ alle"e#l$ !o&l# (a4e ter+inate# (er er4i!e #&e to
i++oralit$ .&t (e opte# to rei"n on ,e!e+.er 21, 1999.
;(e repon#ent i"ne# a Releae an# Con%ir+ation A"ree+ent an# tate# t(erein t(at t(e$ (a4e no +one$
an# propert$ a!!o&nta.ilitie in t(e !o+pan$. Repon#ent o%%er a #i%%erent 4erion o% t(eir #i+ial.
Repon#ent later %ile# a !o+plaint %or &n%air la.or pra!ti!e, !ontr&!ti4e #i+ial, eparation pa$ an#
attorne$< %ee. ;(e$ a4erre# t(at t(e a%ore+entione# !o+pan$ poli!$ i ille"al an# !ontra4ene Arti!le 136 o%
t(e 2a.or Co#e.
2a.or Ar.iter #i+ie# t(e !o+plaint an# tate t(at t(e !o+pan$ poli!$ -a #e!ree# p&r&ant to -(at t(e
repon#ent !orporation per!ei4e# a +ana"e+ent prero"ati4e. )n appeal to t(e N2RC, t(e Co++iion
a%%ir+e# t(e #e!iion o% t(e 2a.or Ar.iter. =n it aaile# ,e!iion #ate# A&"&t 3, 2004, t(e Co&rt o% Appeal
re4ere# t(e N2RC #e!iion.
Issue:
1(et(er or not t(e >&etione# poli!$ i a 4ali# e?er!ie o% +ana"e+ent prero"ati4e.
SC Ruli!:
;(e !ae at .ar in4ol4e Arti!le 136 o% t(e 2a.or Co#e -(i!( pro4i#e@ =t (all .e &nla-%&l %or an e+plo$er to
re>&ire a a !on#ition o% e+plo$+ent or !ontin&ation o% e+plo$+ent t(at a -o+an e+plo$ee (all not "et
+arrie#, or to tip&late e?prel$ or ta!itl$ t(at &pon "ettin" +arrie# a -o+an e+plo$ee (all .e #ee+e#
rei"ne# or eparate#, or to a!t&all$ #i+i, #i!(ar"e, #i!ri+inate or ot(er-ie preA&#i!e a -o+an e+plo$ee
+erel$ .$ reaon o% (er +arria"e.
1it( +ore -o+en enterin" t(e -or8%or!e, e+plo$er are alo ena!tin" e+plo$+ent poli!ie pe!i%i!all$
pro(i.itin" po&e %ro+ -or8in" %or t(e a+e !o+pan$. 1e note t(at t-o t$pe o% e+plo$+ent poli!ie in4ol4e
po&e@ poli!ie .annin" onl$ po&e %ro+ -or8in" in t(e a+e !o+pan$ /no7po&e e+plo$+ent poli!ie0,
an# t(oe .annin" all i++e#iate %a+il$ +e+.er, in!l&#in" po&e, %ro+ -or8in" in t(e a+e !o+pan$ /anti7
nepoti+ e+plo$+ent poli!ie0.
=t &tiliBe t-o t(eorie o% e+plo$+ent #i!ri+ination@ t(e #iparate treat+ent an# t(e #iparate i+pa!t. Cn#er
t(e #iparate treat+ent anal$i, t(e plainti%% +&t pro4e t(at an e+plo$+ent poli!$ i #i!ri+inator$ on it %a!e.
No7po&e e+plo$+ent poli!ie re>&irin" an e+plo$ee o% a parti!&lar e? to eit(er >&it, tran%er, or .e %ire# are
%a!iall$ #i!ri+inator$. )n t(e ot(er (an#, to eta.li( #iparate i+pa!t, t(e !o+plainant +&t pro4e t(at a
%a!iall$ ne&tral poli!$ (a a #iproportionate e%%e!t on a parti!&lar !la.
;(e !o&rt t(at (a4e .roa#l$ !ontr&e# t(e ter+ D+arital tat&E r&le t(at it en!o+pae# t(e i#entit$, o!!&pation
an# e+plo$+ent o% oneF po&e. ;(e$ (ol# t(at t(e a.en!e o% &!( a .ona %i#e o!!&pational
>&ali%i!ation in4ali#ate a r&le #en$in" e+plo$+ent to one po&e #&e to t(e !&rrent e+plo$+ent o% t(e ot(er
po&e in t(e a+e o%%i!e. ;(&, t(e$ r&le t(at &nle t(e e+plo$er !an pro4e t(at t(e reaona.le #e+an# o%
t(e .&ine re>&ire a #itin!tion .ae# on +arital tat& an# t(ere i no .etter a4aila.le or a!!epta.le poli!$
-(i!( -o&l# .etter a!!o+pli( t(e .&ine p&rpoe, an e+plo$er +a$ not #i!ri+inate a"aint an e+plo$ee
.ae# on t(e i#entit$ o% t(e e+plo$ee< po&e. ;(i i 8no-n a t(e .ona %i#e o!!&pational >&ali%i!ation
e?!eption.
1e note t(at in!e t(e %in#in" o% a .ona %i#e o!!&pational >&ali%i!ation A&ti%ie an e+plo$er< no7po&e r&le,
t(e e?!eption i interprete# tri!tl$ an# narro-l$ .$ t(ee tate !o&rt. ;(ere +&t .e a !o+pellin" .&ine
ne!eit$ %or -(i!( no alternati4e e?it ot(er t(an t(e #i!ri+inator$ pra!ti!e. ;o A&ti%$ a .ona %i#e o!!&pational
>&ali%i!ation, t(e e+plo$er +&t pro4e t-o %a!tor@ /10 t(at t(e e+plo$+ent >&ali%i!ation i reaona.l$ relate# to
t(e eential operation o% t(e Ao. in4ol4e#G an#, /20 t(at t(ere i a %a!t&al .ai %or .elie4in" t(at all or
&.tantiall$ all peron +eetin" t(e >&ali%i!ation -o&l# .e &na.le to properl$ per%or+ t(e #&tie o% t(e Ao..
;(e !o&rt #oe not %in# a reaona.le .&ine ne!eit$ in t(e !ae at .ar. ;(e prote!tion "i4en to la.or in o&r
A&ri#i!tion i 4at an# e?teni4e t(at -e !annot pr&#entl$ #ra- in%eren!e %ro+ t(e le"ilat&re< ilen!e t(at
+arrie# peron are not prote!te# &n#er o&r Contit&tion an# #e!lare 4ali# a poli!$ .ae# on a preA&#i!e or
tereot$pe. ;(&, %or %ail&re o% petitioner to preent &n#ip&te# proo% o% a reaona.le .&ine ne!eit$, -e
r&le t(at t(e >&etione# poli!$ i an in4ali# e?er!ie o% +ana"e+ent prero"ati4e.
NORHIS #R/DIN1 GS 1NIO
1nilo was the Credit and Colle"tion <ana!er of Nor'is #radin! and is in "har!e of the
/lbay and Catanduanes bran"hes of the "o$pany. In +,,,, 1nilo was found to be
sub$ittin! overstated reports about his area of $ana!e$ent whi"h $isled the
$ana!e$ent into believin! that 1nilo was doin! a !ood :ob. @e was subse6uently
transferred fro$ his position to bein! the $ar'etin! assistant of the "o$pany9s senior
GP /lbos. 1nilo too' the position under protest. @e sued Nor'is until the "ase rea"hed
the NRC. #he NRC ruled that the transfer is a"tually a "onstru"tive dis$issal. Nor'is
assailed the de"ision of the NRC alle!in! that 1nilo9s previous and "urrent position in
the "o$pany is of e6ual ran'.
ISSUE: Whether or not the transfer of Gnilo from being a Collections Manager to a Marketing Assistant
constitutes constructive dismissal.
HELD: Yes. While the transfer of respondent from Credit and Collection Manager to Marketing Assistant
did not result in the reduction of his salary, there was a reduction in his duties and responsibilities which
amounted to a demotion tantamount to a constructive dismissal as correctly held by the !"C. As Credit
and Collection Manager, Gnilo was clothed with all the duties and responsibilities of a managerial
employee. #n the other hand, the work of a Marketing Assistant is clerical in nature, which does not
involve the e$ercise of any discretion. %uch &ob entails mere data gathering on vital marketing
informations relevant to Gnilo's motorcycles and making reports to his direct supervisor. (e became a
mere staff member in the office of the %enior )ice*+resident for Marketing.
CARLOS DE CASTRO, Petitioner,
vs.
LIBERTY BROADCASTING NETWOR!, INC. and EDGARDO QUIOGUE, Respondents.
R E S O D # I O N
BRION, J.:
#he respondent, iberty Broad"astin! Networ', In". %BNI&, filed the present <otion for Re"onsideration with
<otion to Suspend Pro"eedin!s, as'in! us, first, to set aside our De"ision1 and, se"ond, to suspend the "ourt
pro"eedin!s in view of the Stay Order issued on /u!ust *4, +,,2 by the Re!ional #rial Court %R#C& of <a'ati,
Bran"h *)5, in relation to the "orporate rehabilitation pro"eedin!s that BNI initiated.
#he dispositive part of our De"ision reads=
?@ERE-ORE, pre$ises "onsidered, we hereby 1R/N# the petition. /""ordin!ly, we REGERSE and SE# /SIDE
the De"ision and Resolution of the C/ pro$ul!ated on <ay +2, +,,8 and /u!ust ),, +,,8, respe"tively, and
REINS#/#E in all respe"ts the Resolution of the National abor Relations Co$$ission dated Septe$ber +,, +,,+.
Costs a!ainst the respondents.
SO ORDERED.2
#he fa"ts, as re"ited in our De"ision, are su$$ari7ed below=
#he petitioner, Carlos C. de Castro, wor'ed as a "hief buildin! ad$inistrator at BNI. On <ay )*, *443, BNI
dis$issed de Castro on the !rounds of serious $is"ondu"t, fraud, and willful brea"h of the trust reposed in hi$ as a
$ana!erial e$ployee. /lle!edly, de Castro "o$$itted the followin! a"ts=
*. Soli"itin! andCor re"eivin! $oney for his own benefit fro$ suppliersCdealersCtraders ACristino Sa$arita and
(ose /yin!B, representin! I"o$$issionsI for :ob "ontra"ts involvin! the repair, re"onditionin! and
repla"e$ent of parts of the air"onditionin! units at the "o$pany9s /ntipolo Station, as well as the installation
of fire e>its at the ABNI9sB #e"hnolo!y Centre;
+. Diversion of "o$pany funds by soli"itin! and re"eivin! on different o""asions a total of P*8,,,,.,, in
I"o$$issionsI fro$ /yin! for a :ob "ontra"t in the "o$pany9s /ntipolo Station;
). #heft of "o$pany property involvin! the unauthori7ed re$oval of one !allon of Delo oil fro$ the "o$pany
stora!e roo$;
8. Disrespe"tCdis"ourtesy towards a "o0e$ployee, for usin! offensive lan!ua!e a!ainst AGi"ente Ni!uidula,
the "o$pany9s supply $ana!erB;
2. Disorderly behavior, for "hallen!in! Ni!uidula to a fi!ht durin! wor'in! hours within the "o$pany
pre$ises, thereby "reatin! a disturban"e that interrupted the nor$al flow of a"tivities in the "o$pany;
3. #hreat and "oer"ion, for threatenin! to infli"t bodily har$ on the person of Ni!uidula and for "oer"in! A1il
BalaisB, a subordinate, into soli"itin! $oney in Ade Castro9sB behalf fro$ suppliersC"ontra"tors;
.. /buse of authority, for instru"tin! Balais to "olle"t "o$$issions fro$ /yin! and Sa$arita, and for
re6uirin! Raul Pa"aldo %Pa"aldo& to e>a"t +Q 0 2Q of the pri"e of the "ontra"ts awarded to suppliers; and
5. Slander, for utterin! libelous state$ents a!ainst Ni!uidula.3
/!!rieved, de Castro filed a "o$plaint for ille!al dis$issal a!ainst BNI with the National abor Relations
Co$$ission %NRC& /rbitration Bran"h, National Capital Re!ion, prayin! for reinstate$ent, pay$ent of ba"'wa!es,
da$a!es, and attorney9s fees.4 @e $aintained that he "ould not have soli"ited "o$$issions fro$ suppliers "onsiderin!
that he was new in the "o$pany.5 <oreover, the a""usations were belatedly filed as the i$puted a"ts happened in
*442. @e e>plained that the one !allon of Delo oil he alle!edly too' was a"tually found in 1il Balais9 roo$. 6 @e
denied threatenin! Gi"ente Ni!uidula, who$ he "lai$ed verbally assaulted hi$ and "hallen!ed hi$ to a fi!ht, an
in"ident whi"h he reported to respondent Ed!ardo Fuio!ue, BNI9s e>e"utive vi"e president, and to the <a'ati
poli"e.7 De Castro alle!ed that prior to e>e"utin! affidavits a!ainst hi$, Ni!uidula and Balais had serious "lashes with
hi$.8
On /pril ),, *444, the abor /rbiter rendered a de"ision9 in de Castro9s favor, holdin! BNI liable for ille!al
dis$issal.10 #he abor /rbiter found the affidavits of BNI9s witnesses to be devoid of $erit, notin! that %*&
witnesses Ni!uidula and Balais had alter"ations with de Castro prior to the e>e"ution of their respe"tive affidavits; %+&
the affidavit of Cristino Sa$arita, one of the suppliers fro$ who$ de Castro alle!edly as'ed for "o$$issions, stated
that it was not de Castro, but Balais, who personally as'ed for $oney; and %)& (ose /yin!, another supplier, re"anted
his earlier affidavit.11
BNI appealed the abor /rbiter9s rulin! to the NRC. Initially, the NRC reversed the abor /rbiter9s de"ision but
on de Castro9s $otion for re"onsideration, the NRC reinstated the abor /rbiter9s de"ision.12 It ruled that the
"har!es a!ainst de Castro Iwere never really substantiated other than by Nbare alle!ations9 in the witnesses9 affidavits
who were the "o$pany9s e$ployees and who had alter"ations with De Castro prior to the e>e"ution of their
affidavits.I13
BNI a!ain appealed the NRC9s adverse de"ision to the Court of /ppeals %C/&. On <ay +2, +,,8, the C/ reversed
the NRC9s de"ision and held that de Castro9s dis$issal was based on valid !rounds. It ruled too that the NRC
!ravely abused its dis"retion when it disre!arded the affidavits of all of BNI9s witnesses.14
In our Septe$ber +), +,,5 De"ision, we found that de Castro9s dis$issal was based on unsubstantiated "har!es.
/yin!, a "ontra"tor, earlier e>e"uted an affidavit statin! that de Castro as'ed hi$ for "o$$ission, but in his se"ond
affidavit, he re"anted his state$ent and e>onerated de Castro.15 #he other witnesses, Ni!uidula and Balais, were
BNI e$ployees who resented de Castro.16 ?e noted that de Castro had not stayed lon! in the "o$pany and had not
even passed his probationary period when the a"ts "har!ed alle!edly too' pla"e. ?e found this situation "ontrary to
"o$$on e>perien"e, sin"e new e$ployees have a natural $otivation to $a'e a positive first i$pression on the
e$ployer, if only to ensure that they are re!ulari7ed.17
#hus, we ruled that the !rounds that BNI invo'ed for de Castro9s dis$issal were, at best, doubtful, based on the
eviden"e presented. #hese doubts should be interpreted in de Castro9s favor, pursuant to /rti"le 8 of the abor
Code.18 Between a laborer and his e$ployer, doubts reasonably arisin! fro$ the eviden"e or interpretation of
a!ree$ents and writin! should be resolved in the for$er9s favor.19
#he <otion for Re"onsideration
BNI now $oves for a re"onsideration of our Septe$ber +), +,,5 De"ision based on the followin! ar!u$ents= %*&
BNI had valid le!al !rounds to ter$inate de Castro9s e$ploy$ent for loss of trust and "onfiden"e;20 %+& the
affidavits of BNI9s witnesses should not have been totally disre!arded;21 and %)& BNI is "urrently under
rehabilitation, hen"e, the pro"eedin!s in this "ase $ust be suspended. 22 BNI points out that it filed, with the R#C of
<a'ati, a petition for Corporate Rehabilitation with Prayer for Suspension of Pay$ents %do"'eted as S.P. Pro". Case
No. <03*+3&, and on /u!ust *4, +,,2, the R#C issued a Stay Order dire"tin!, a$on! others, that the P
enfor"e$ent of all "lai$s a!ainst iberty #ele"o$s, iberty Broad"astin! and S'yphone, whether for $oney or
otherwise and whether su"h enfor"e$ent is by Court a"tion or otherwise > > > be forthwith stayed.23
Co$$ent on the <otion for Re"onsideration
In his "o$$ent, de Castro "ontends that BNI9s $otion for re"onsideration "ontains a rehash of BNI9s earlier
ar!u$ents. @e avers that despite the R#C9s Stay Order, it is pre$ature for this Court to suspend the pro"eedin!s. If a
suspension of the pro"eedin!s is ne"essary, the proper venue to file the $otion is with the Offi"e of the abor
/rbiter. 24 De Castro further posits that BNI should have infor$ed this Court of the status of its Petition for
Corporate Rehabilitation.25
#@E CODR#9S RDIN1
E>"ept for the prayer to suspend the e>e"ution of our Septe$ber +), +,,5 De"ision, we do not find BNI9s <otion
for Re"onsideration $eritorious. /lthou!h we re:e"t, for la"' of $erit, BNI9s ar!u$ents re!ardin! the le!ality of de
Castro9s dis$issal, we suspend the e>e"ution of our De"ision in deferen"e to the Stay Order issued by the
rehabilitation "ourt.
T"# $%%&# '( $))#*a) d$%+$%%a) "a% a),#ad- .##n ,#%')/#d $n 0"# C'&,01% S#20#+.#, 34, 3556 D#7$%$'n
BNI9s $otion for re"onsideration $erely reiterates its earlier ar!u$ents, whi"h we have already addressed in our
Septe$ber +), +,,5 De"ision. BNI has failed to offer any substantive ar!u$ent that would "onvin"e us to reverse
our earlier rulin!.
BNI ar!ues that there is no lo!i" for it to ille!ally dis$iss de Castro be"ause bein! on probationary e$ploy$ent P a
fa"t whi"h this Court had stated in its de"ision P all that the "o$pany had to do was not to re0hire hi$. 26 By this
"lai$, BNI has $isread the i$port of our rulin!. #he Septe$ber +), +,,5 De"ision de"lared that de Castro Ihad not
stayed lon! in the "o$pany and had not even passed his probationary period when the a"ts "har!ed alle!edly too'
pla"e.I27 Properly read, we found that the a"ts "har!ed a!ainst de Castro too' pla"e when he was still under
probationary e$ploy$ent P a findin! "o$pletely different fro$ BNI9s "lai$ that de Castro was dis$issed durin! his
probationary e$ploy$ent. On the "ontrary, de Castro was dis$issed on the ninth $onth of his e$ploy$ent with
BNI, and by then, he was already a re!ular e$ployee by operation of law. /rti"le +5* of the abor Code provides
that IApBrobationary e$ploy$ent shall not e>"eed si> %3& $onths fro$ the date the e$ployee started wor'in!, > > >
AaBn e$ployee who is allowed to wor' after a probationary period shall be "onsidered a re!ular e$ployee.I /s a
re!ular e$ployee, de Castro was entitled to se"urity of tenure and his ille!al dis$issal fro$ BNI :ustified the awards
of separation pay, ba"'wa!es, and da$a!es.
#he penden"y of the rehabilitation pro"eedin!s does not affe"t the Court9s :urisdi"tion to resolve the "ase, but $erely
suspends the e>e"ution of the Septe$ber +), +,,5 De"ision
On O"tober *5, +,,2, while de Castro9s petition was still pendin! before the Court, BNI filed a $otion to suspend
the pro"eedin!s, "itin! the Stay Order, dated /u!ust *4, +,,2, issued by the R#C of <a'ati, Bran"h *)5 in S.P. Case
No. <03*+3.28 #he Stay Order read=
-OR #@E RE/SONS 1IGEN and applyin! Se"tion 3 of the Interi$ Rules of Pro"edure on Corporate Rehabilitation,
> > > it is ordered that enfor"e$ent of all "lai$s a!ainst ABNIB whether for $oney or otherwise and whether su"h
enfor"e$ent is by Court a"tion or otherwise, its !uarantors and sureties not solidarily liable with the petitioner, be
forthwith stayed.
> > > >
SO ORDERED.29
BNI9s $otion was denied in our Resolution of De"e$ber *+, +,,2 for bein! pre$ature, as de Castro then had yet to
file his reply to BNI9s "o$$ent on the petition.30 #hereafter, nothin! was heard fro$ BNI re!ardin! the Stay
Order or the rehabilitation pro"eedin!s it instituted before the R#C of <a'ati, Bran"h *)5. Even the $e$orandu$,
dated <ay 8, +,,3, that BNI filed with the Court "ontained no referen"e to the rehabilitation pro"eedin!s.31
#he filin! of a $e$orandu$ before the Court is not an e$pty re6uire$ent, devoid of le!al si!nifi"an"e. In /.<. No.
440+0,80SC, the Court de"lared that issues raised in previous pleadin!s but not in"luded in the $e$orandu$ shall be
dee$ed waived or abandoned. Bein! a su$$ation of the parties9 previous pleadin!s, the $e$oranda alone $ay be
"onsidered by the Court in de"idin! or resolvin! the petition. #hus, on a""ount of BNI9s o$ission, only the issues
raised in the parties9 $e$oranda P prin"ipally, the validity of de Castro9s dis$issal fro$ BNI P were "onsidered by
the Court in resolvin! the "ase.
I#he Court does not ta'e :udi"ial noti"e of pro"eedin!s in the various "ourts of :usti"e in the Philippines.I 32 /t the
ti$e we de"ided the present "ase, we were thus not bound to ta'e note of and "onsider the penden"y of the
rehabilitation pro"eedin!s, as the $atter had not been properly brou!ht to our attention. In So"ial (usti"e So"iety v.
/tien7a,33 we said that=
In resolvin! "ontroversies, "ourts "an only "onsider fa"ts and issues pleaded by the parties.*Rwphi* Courts, as well as
$a!istrates presidin! over the$ are not o$nis"ient. #hey "an only a"t on the fa"ts and issues presented before the$ in
appropriate pleadin!s. #hey $ay not even substitute their own personal 'nowled!e for eviden"e. Nor $ay they ta'e
noti"e of $atters e>"ept those e>pressly provided as sub:e"ts of $andatory :udi"ial noti"e.
> > > >
#he party as'in! the "ourt to ta'e :udi"ial noti"e is obli!ated to supply the "ourt with the full te>t of the rules the party
desires it to have noti"e of.
Notably, BNI9s $e$orandu$ was filed on <ay 8, +,,3, $ore than *5, days fro$ the date of the initial hearin! on
O"tober 2, +,,2 %as set in the Stay Order of /u!ust *4, +,,2&. Dnder Se"tion **, Rule 8 of the Interi$ Rules of
Pro"edure on Corporate Rehabilitation %Interi$ Rules&, a petition for rehabilitation shall be dis$issed if no
rehabilitation plan is approved by the "ourt upon the lapse of *5, days fro$ the date of initial hearin!. ?hile the
Interi$ Rules !rant e>tension beyond the *5,0day period, no su"h e>tension was alle!ed in this "ase; in fa"t, as we
earlier pointed out, no $ention at all was $ade in BNI9s $e$orandu$ of the rehabilitation pro"eedin!s. ?ith the
failure of BNI to raise rehabilitation pro"eedin!s in its $e$orandu$, the Court had suffi"ient !rounds to suppose
that the rehabilitation petition had been dis$issed by the ti$e the "ase was sub$itted for de"ision.
1iven these "ir"u$stan"es, the e>isten"e of the Stay Order P whi"h would !enerally authori7e the suspension of
:udi"ial pro"eedin!s, even those pendin! before the Court P "ould not have affe"ted the Court9s a"tion on the present
"ase. /t any rate, a stay order si$ply suspends all a"tions for "lai$s a!ainst a "orporation under!oin! rehabilitation; it
does not wor' to oust a "ourt of its :urisdi"tion over a "ase properly filed before it. 34 Our rulin! on the prin"ipal issue
of the "ase P that de Castro had been ille!ally dis$issed fro$ his e$ploy$ent with BNI P thus stands.
Nevertheless, with BNI9s $anifestation that it is still under!oin! rehabilitation, the Court resolves to suspend the
e>e"ution of our Septe$ber +), +,,5 De"ision. #he suspension shall last up to the ter$ination of the rehabilitation
pro"eedin!s, as provided in Se"tion **, in relation to Se"tion +., Rule 8 of the Interi$ Rules P
Se". **. )eriod o$ the Sta *rder. 0 #he stay order shall be effe"tive fro$ the date of its issuan"e until the dis$issal of
the petition or the ter$ination of the rehabilitation pro"eedin!s.
#he petition shall be dis$issed if no rehabilitation plan is approved by the "ourt upon the lapse of one hundred ei!hty
%*5,& days fro$ the date of the initial hearin!. #he "ourt $ay !rant an e>tension beyond this period only if it appears
by "onvin"in! and "o$pellin! eviden"e that the debtor $ay su""essfully be rehabilitated. In no instan"e, however,
shall the period for approvin! or disapprovin! a rehabilitation plan e>"eed ei!hteen %*5& $onths fro$ the date of
filin! of the petition.
> > > >
Se". +.. #er$ination of Pro"eedin!s. P In "ase of the failure of the debtor to sub$it the rehabilitation plan, or the
disapproval thereof by the "ourt, or the failure of the rehabilitation of the debtor be"ause of failure to a"hieve the
desired tar!ets or !oals as set forth therein, or the failure of the said debtor to perfor$ its obli!ations under the said
plan, or a deter$ination that the rehabilitation plan $ay no lon!er be i$ple$ented in a""ordan"e with its ter$s,
"onditions, restri"tions, or assu$ptions, the "ourt shall upon $otion, $otu proprio, or upon the re"o$$endation of the
Rehabilitation Re"eiver, ter$inate the pro"eedin!s. #he pro"eedin!s shall also ter$inate upon the su""essful
i$ple$entation of the rehabilitation plan.
WHEREFORE, we DENY the <otion for Re"onsideration; a""ordin!ly, our De"ision dated Septe$ber +), +,,5 is
hereby AFFIRMED. #he National abor Relations Co$$ission is, however, dire"ted to %&%2#nd the e>e"ution of
our Septe$ber +), +,,5 De"ision until the Stay Order is lifted or the "orporate rehabilitation pro"eedin!s are
ter$inated. Respondent iberty Broad"astin! Networ', In". is hereby dire"ted to sub$it 6uarterly reports to the
National abor Relations Co$$ission on the status of its rehabilitation, sub:e"t to the penalty of "onte$pt in "ase of
non"o$plian"e.
/r"o <etal vs. Sa$ahan n! <an!!a!awa sa /r"o
1.R. No. *.,.)8
-a"ts=
Petitioner is a "o$pany en!a!ed in the $anufa"ture of $etal produ"ts, whereas
respondent is the labor union of petitioner9s ran' and file e$ployees. So$eti$e in
De"e$ber +,,), petitioner paid the *)th $onth pay, bonus, and leave en"ash$ent of
three union $e$bers in a$ounts proportional to the servi"e they a"tually rendered in a
year, whi"h is less than a full *+ $onths. Respondent protested the prorated s"he$e,
"lai$in! that on several o""asions petitioner did not prorate the pay$ent of the sa$e
benefits to . e$ployees who had not served for the full *+ $onths. #he pay$ents were
$ade in *44+, *44), *448, *443, *444, +,,), and +,,8. /""ordin! to respondent, the
prorated pay$ent violates the rule a!ainst di$inution of benefits under /rti"le *,, of
the abor Code. #hus, they filed a "o$plaint before the NC<B. #he parties sub$itted
the "ase for voluntary arbitration.
#he voluntary arbitrator, <an!abat, ruled in favor of petitioner and found that the !ivin!
of the "ontested benefits in full, irrespe"tive of the a"tual servi"e rendered within one
year has not ripened into a pra"ti"e. @e noted the affidavit of Bain!an, $anufa"turin!
!roup head of petitioner, whi"h states that the !ivin! in full of the benefit was a $ere
error. @e also interpreted the phrase Sfor ea"h year of servi"eT found in the pertinent
CB/ provisions to $ean that an e$ployee $ust have rendered one year of servi"e in
order to be entitled to the full benefits provided in the CB/.
#he C/ ruled that the CB/ did not intend to fore"lose the appli"ation of prorated
pay$ents of leave benefits to "overed e$ployees. #he appellate "ourt found that
petitioner, however, had an e>istin! voluntary pra"ti"e of payin! the aforesaid benefits
in full to its e$ployees, thereby re:e"tin! the "lai$ that petitioner erred in payin!
full benefits to its seven e$ployees. #he appellate "ourt noted that aside fro$ the
affidavit of petitioner9s offi"er, it has not presented any eviden"e in support of its
position that it has no voluntary pra"ti"e of !rantin! the "ontested benefits in full and
without re!ard to the servi"e a"tually rendered within the year. It also 6uestioned why it
too' petitioner ** years before it was able to dis"over the alle!ed error.
Issue= ?ON the !rant of *)th $onth pay, bonus, and leave en"ash$ent in full
re!ardless of a"tual servi"e rendered "onstitutes voluntary e$ployer pra"ti"e and,
"onse6uently, the prorated pay$ent of the said benefits does not "onstitute di$inution of
benefits under /rti"le *,, of the abor Code.
@eld=
Petitioner "lai$s that its full pay$ent of benefits re!ardless of the len!th of servi"e to
the "o$pany does not "onstitute voluntary e$ployer pra"ti"e. It points out that the
pay$ents had been erroneously $ade and they o""urred in isolated "ases in the years
*44+, *44), *448, *444, +,,+ and +,,). /""ordin! to petitioner, it was only in +,,)
that the a""ountin! depart$ent dis"overed the error Swhen there were already )
e$ployees involved with prolon!ed absen"es and the error was "orre"ted by
i$ple$entin! the pro0rata pay$ent of benefits pursuant to law and their e>istin! CB/.T
It adds that the seven earlier "ases of full pay$ent of benefits went unnoti"ed
"onsiderin! the proportion of one e$ployee "on"erned %per year& vis U vis the *.,
e$ployees of the "o$pany. Petitioner des"ribes the situation as a S"lear oversi!htT
whi"h should not be ta'en a!ainst it. #o further bolster its "ase, petitioner ar!ues that for
a !rant of a benefit to be "onsidered a pra"ti"e, it should have been pra"ti"ed over a lon!
period of ti$e and $ust be shown to be "onsistent, deliberate and intentional, whi"h is
not what happened in this "ase. Petitioner tries to $a'e a "ase out of the fa"t that the
CB/ has not been $odified to in"orporate the !ivin! of full benefits re!ardless of the
len!th of servi"e, proof that the !rant has not ripened into "o$pany pra"ti"e.
/ny benefit and supple$ent bein! en:oyed by e$ployees "annot be redu"ed,
di$inished, dis"ontinued or eli$inated by the e$ployer. #he prin"iple of non0
di$inution of benefits is founded on the Constitutional $andate to Sprote"t the ri!hts of
wor'ers and pro$ote their welfare,T and Sto afford labor full prote"tion.T Said $andate
in turn is the basis of /rti"le 8 of the abor Code whi"h states that Sall doubts in the
i$ple$entation and interpretation of this Code, in"ludin! its i$ple$entin! rules and
re!ulations shall be rendered in favor of labor.T (urispruden"e is replete with "ases
whi"h re"o!ni7e the ri!ht of e$ployees to benefits whi"h were voluntarily !iven by the
e$ployer and whi"h ripened into "o$pany pra"ti"e. #hus in Davao -ruits Corporation
v. /sso"iated abor Dnions, et al. where an e$ployer had freely and "ontinuously
in"luded in the "o$putation of the *)th $onth pay those ite$s that were e>pressly
e>"luded by the law, we held that the a"t whi"h was favorable to the e$ployees thou!h
not "onfor$in! to law had thus ripened into a pra"ti"e and "ould not be withdrawn,
redu"ed, di$inished, dis"ontinued or eli$inated.
In the years *44+, *44), *448, *444, +,,+ and +,,), petitioner had adopted a poli"y of
freely, voluntarily and "onsistently !rantin! full benefits to its e$ployees re!ardless of
the len!th of servi"e rendered. #rue, there were only a total of seven e$ployees who
benefited fro$ su"h a pra"ti"e, but it was an established pra"ti"e nonetheless.
(urispruden"e has not laid down any rule spe"ifyin! a $ini$u$ nu$ber of years within
whi"h a "o$pany pra"ti"e $ust be e>er"ised in order to "onstitute voluntary "o$pany
pra"ti"e. #hus, it "an be 3 years, ) years, or even as short as + years. Petitioner "annot
shir' away fro$ its responsibility by $erely "lai$in! that it was a $ista'e or an error,
supported only by an affidavit of its $anufa"turin! !roup head.
In "ases involvin! $oney "lai$s of e$ployees, the e$ployer has the burden of provin!
that the e$ployees did re"eive the wa!es and benefits and that the sa$e were
paid in a""ordan"e with law.
Petition denied
LIGHT RAIL TRANSIT AUTHORITY, Petitioner,
vs.
PERFECTO H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY, NANCY C. RAMOS,
SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G. ALINAS, RAMON D.
LOFRANCO, AMADOR H.POLICARPIO, REYNALDO B. GENER, and BIENVENIDO G.
ARPILLEDA, Respondents.
>00000000000000000000000000000>
G.R. N'. 894668 Ma,7" 3:, 3559
METRO TRANSIT ORGANIZATION, INC., Petitioner,
vs.
COURT OF APPEALS, PERFECTO H. VENUS, JR., BIENVENIDO P. SANTOS, JR., RAFAEL C. ROY,
NANCY C. RAMOS, SALVADOR A. ALFON, NOEL R. SANTOS, MANUEL A. FERRER, SALVADOR G.
ALINAS, RAMON D. LOFRANCO, AMADOR H. POLICARPIO, and REYNALDO B. GENER, Respondents.
D E C I S I O N
PUNO, J.:
Before us are the "onsolidated petitions of i!ht Rail #ransit /uthority %R#/& and <etro #ransit Or!ani7ation, In".
%<E#RO&, see'in! the reversal of the De"ision of the Court of /ppeals dire"tin! the$ to reinstate private respondent
wor'ers to their for$er positions without loss of seniority and other ri!hts and privile!es, and orderin! the$ to :ointly
and severally pay the latter their full ba"' wa!es, benefits, and $oral da$a!es. #he R#/ and <E#RO were also
ordered to :ointly and severally pay attorney9s fees e6uivalent to ten per"ent %*,Q& of the total $oney :ud!$ent.
Petitioner R#/ is a !overn$ent0owned and "ontrolled "orporation "reated by E>e"utive Order No. 3,), Series of
*45,, as a$ended, to "onstru"t and $aintain a li!ht rail transit syste$ and provide the "o$$utin! publi" with an
effi"ient, e"ono$i"al, dependable and safe transportation. Petitioner <E#RO, for$erly <eral"o #ransit Or!ani7ation,
In"., was a 6ualified transportation "orporation duly or!ani7ed in a""ordan"e with the provisions of the Corporation
Code, re!istered with the Se"urities and E>"han!e Co$$ission, and e>istin! under Philippine laws.
It appears that petitioner R#/ "onstru"ted a li!ht rail transit syste$ fro$ <onu$ento in Haloo'an City to Ba"laran
in ParaVa6ue, <etro <anila. #o provide the "o$$utin! publi" with an effi"ient and dependable li!ht rail transit
syste$, petitioner R#/, after a biddin! pro"ess, entered into a ten %*,&0year /!ree$ent for the <ana!e$ent and
Operation of the <etro <anila i!ht Rail #ransit Syste$ fro$ (une 5, *458 until (une 5, *448 with petitioner
<E#RO.1#he /!ree$ent provided, a$on! others, that P
*. Effe"tive on the CO<<ENCE<EN# D/#E, <E#RO shall a""ept and ta'e over fro$ the /D#@ORI#E
AR#/B the $ana!e$ent, $aintenan"e and operation of the "o$$issioned and tested portion of the Ai!ht
Rail #ransitB Syste$ > > > Apar. +.,+B;
+. #he /D#@ORI#E AR#/B shall pay <E#RO the </N/1E<EN# -EE as follows > > > Apar. 2.,*B;
). In renderin! these servi"es, <E#RO shall apply its best s'ills and :ud!$ent, in attainin! the ob:e"tives of
the Ai!ht Rail #ransitB Syste$ in a""ordan"e with a""epted professional standards. It shall e>er"ise the
re6uired "are, dili!en"e and effi"ien"y in the dis"har!e of its duties and responsibilities and shall wor' for the
best interest of the Ai!ht Rail #ransitB Syste$ and the /D#@ORI#E AR#/B Apar. +.,)B;
8. <E#RO shall be free to e$ploy su"h e$ployees and offi"ers as it shall dee$ ne"essary in order to "arry
out the re6uire$ents of AtheB /!ree$ent. Su"h e$ployees and offi"ers shall be the e$ployees of <E#RO and
not of the /D#@ORI#E AR#/B. <E#RO shall prepare a "o$pensation s"hedule and the "orrespondin!
salaries and frin!e benefits of AitsB personnel in "onsultation with the /D#@ORI#E AR#/B Apar. ).,2B;
2. <E#RO shall li'ewise hold the /D#@ORI#E AR#/B free and har$less fro$ any and all fines, penalties,
losses and liabilities and liti!ation e>penses in"urred or suffered on a""ount of and by reason of death, in:ury,
loss or da$a!e to passen!ers and third persons, in"ludin! the e$ployees and representatives of the
/D#@ORI#E AR#/B, e>"ept where su"h death, in:ury, loss or da$a!e is attributable to a defe"t or
defi"ien"y in the desi!n of the syste$ or its e6uip$ent Apar. ).,3B.
Pursuant to the above /!ree$ent, petitioner <E#RO hired its own e$ployees, in"ludin! herein private respondents.
Petitioner <E#RO thereafter entered into a "olle"tive bar!ainin! a!ree$ent with )inag-isang La+as ng Manggaga!a
sa <E#RO, In". P National -ederation of abor, otherwise 'nown as PI1/S0<E#RO, INC. P N- P H<D
%Dnion&, the "ertified e>"lusive "olle"tive bar!ainin! representative of the ran'0and0file e$ployees of petitioner
<E#RO.
<eanwhile, on (une 4, *454, petitioners R#/ and <E#RO e>e"uted a Deed of Sale where petitioner R#/
pur"hased the shares of sto"'s in petitioner <E#RO.2@owever, petitioners R#/ and <E#RO "ontinued with their
distin"t and separate :uridi"al personalities. @en"e, when the above ten %*,&0year /!ree$ent e>pired on (une 5, *448,
they renewed the sa$e, initially on a yearly basis, and subse6uently on a $onthly basis.
On (uly +2, +,,,, the Dnion filed a Noti"e of Stri'e with the National Con"iliation and <ediation Board P National
Capital Re!ion a!ainst petitioner <E#RO on a""ount of a deadlo"' in the "olle"tive bar!ainin! ne!otiation. On the
sa$e day, the Dnion stru"'. #he power supply swit"hes in the different li!ht rail transit substations were turned off.
#he $e$bers of the Dnion pi"'eted the various substations. #hey "o$pletely paraly7ed the operations of the entire
li!ht rail transit syste$. /s the stri'e adversely affe"ted the $obility of the "o$$utin! publi", then Se"retary of abor
Bienvenido E. a!ues$a issued on that sa$e day an assu$ption of :urisdi"tion order3dire"tin! all the stri'in!
e$ployees Ito return to wor' i$$ediately upon re"eipt of this Order and for the Co$pany to a""ept the$ ba"' under
the sa$e ter$s and "onditions of e$ploy$ent prevailin! prior to the stri'e.I4
In their $e$orandu$,5Depart$ent of abor and E$ploy$ent Sheriffs -eli"iano R. Orihuela, (r., and Ro$eo P. e$i
reported to Se". a!ues$a that they tried to personally serve the Order of assu$ption of :urisdi"tion to the Dnion
throu!h its offi"ials and $e$bers on (uly +3, +,,,, but the latter refused to re"eive the sa$e. #he sheriffs thus posted
the Order in the different stationsCter$inals of the li!ht rail transit syste$. -urther, the Order of assu$ption of
:urisdi"tion was published on the (uly +., +,,, issues of the P"$)$22$n# Da$)- In;&$,#,6and theP"$)$22$n# S0a,.7
Despite the issuan"e, postin!, and publi"ation of the assu$ption of :urisdi"tion and return to wor' order, the Dnion
offi"ers and $e$bers, in"ludin! herein private respondent wor'ers, failed to return to wor'. #hus, effe"tive (uly +.,
+,,,, private respondents, Perfe"to Genus, (r., Bienvenido P. Santos, (r., Rafael C. Roy, Nan"y C. Ra$os, Salvador /.
/lfon, Noel R. Santos, <anuel /. -errer, Salvador 1. /linas, Ra$on D. ofran"o, /$ador @. Poli"arpio, Reynaldo
B. 1ener, and Bienvenido 1. /rpilleda, were "onsidered dis$issed fro$ e$ploy$ent.
In the $eanti$e, on (uly )*, +,,,, the /!ree$ent for the <ana!e$ent and Operation of the <etro <anila i!ht Rail
#ransit Syste$ between petitioners R#/ and <E#RO e>pired. #he Board of Dire"tors of petitioner R#/ de"ided
not to renew the "ontra"t with petitioner <E#RO and dire"ted the R#/ $ana!e$ent instead to i$$ediately ta'e
over the $ana!e$ent and operation of the li!ht rail transit syste$ to avert the $ass transportation "risis.
On O"tober *,, +,,,, private respondents Genus, (r., Santos, (r., and Roy filed a "o$plaint for ille!al dis$issal before
the National abor Relations Co$$ission %NRC& and i$pleaded both petitioners R#/ and <E#RO. Private
respondents Ra$os, /lfon, Santos, -errer, /linas, ofran"o, Poli"arpio, 1ener, and /rpilleda follwed suit on
De"e$ber *, +,,,.
On O"tober *, +,,*, abor /rbiter uis D. -lores rendered a "onsolidated :ud!$ent in favor of the private respondent
wor'ers8P
?@ERE-ORE, :ud!$ent is hereby rendered in favor of the "o$plainants and a!ainst the respondents, as follows=
*. De"larin! that the "o$plainants were ille!ally dis$issed fro$ e$ploy$ent and orderin! their
reinstate$ent to their for$er positions without loss of seniority and other ri!hts and privile!es.
+. Orderin! respondents <etro #ransit Or!ani7ation, In". and i!ht Rail #ransit /uthority to :ointly and
severally pay the "o$plainants their other benefits and full ba"'wa!es, whi"h as of (une ),, +,,* are as
follows=
*. Perfe"to @. Genus, (r. P+8.,.+8.)3
+. Bienvenido P. Santos, (r. +8.,.+8.)3
). Rafael C. Roy +8.,.+8.)3
8. Nan"y AC.B Ra$os +28,+5+.3+
2. Salvador /. /lfon +2.,.38.3+
3. Noel R. Santos ++*,54..25
.. <anuel /. -errer +2,,2)8..5
5. Salvador 1. A/linasB +2),828.55
4. Ra$on D. ofran"o +2),38+.*5
*,. /$ador @. Poli"arpio +23,3,4.++
**. Reynaldo B. 1ener +22,,48.23
#O#/ P+,.83,82).2+
). Orderin! respondents <etro #ransit Or!ani7ation, In". and i!ht Rail #ransit /uthority to :ointly and
severally pay ea"h of the "o$plainants the a$ount of P2,,,,,.,, as $oral da$a!es.
8. Orderin! respondents <etro #ransit Or!ani7ation, In". and i!ht Rail #ransit /uthority to :ointly and
severally pay the "o$plainants attorney9s fees e6uivalent to ten per"ent %*,Q& of the total $oney :ud!$ent.
SO ORDERED.
#he "o$plaint filed by Bienvenido 1. /rpilleda, althou!h initially "onsolidated with the $ain "ase, was eventually
dropped for his failure to appear and sub$it any do"u$ent and position paper.9
On <ay +4, +,,+, on appeal, the NRC found that the stri'in! wor'ers failed to heed the return to wor' order and
reversed and set aside the de"ision of the labor arbiter. #he suit a!ainst R#/ was dis$issed sin"e IR#/ is a
!overn$ent0owned and "ontrolled "orporation "reated by virtue of E>e"utive Order No. 3,) with an ori!inal
"harterI10and Iit haAdB no parti"ipation whatsoever with the ter$ination of "o$plainants9 e$ploy$ent.I11In fine, the
"ases a!ainst the R#/ and <E#RO were dis$issed, respe"tively, for la"' of :urisdi"tion and for la"' of $erit.
On De"e$ber ), +,,+, the NRC denied the wor'ers9 <otion for Re"onsideration IAtBhere bein! no showin! that the
Co$$ission "o$$itted, %and that& the <otion for Re"onsideration was based on, palpable or patent errors, and the
fa"t that %the& said $otion is not under oath.I
On a petition for certiorari however, the Court of /ppeals reversed the NRC and reinstated the De"ision rendered by
the abor /rbiter. Publi" respondent appellate "ourt de"lared the wor'ers9 dis$issal as ille!al, pier"ed the veil of
separate "orporate personality and held the R#/ and <E#RO as :ointly liable for ba"' wa!es.
@en"e, these twin petitions for review on certiorari of the de"ision of publi" respondent appellate "ourt filed by R#/
and <E#RO whi"h this Court eventually "onsolidated.
In the $ain, petitioner R#/ ar!ues that it has no e$ployer0e$ployee relationship with private respondent wor'ers as
they were hired by petitioner <E#RO alone pursuant to its ten %*,&0year /!ree$ent for the <ana!e$ent and
Operation of the <etro <anila i!ht Rail #ransit Syste$ with petitioner <E#RO. Private respondent wor'ers
re"o!ni7ed that their e$ployer was not petitioner R#/ when their "ertified e>"lusive "olle"tive bar!ainin!
representative, the )inag-isang La+as ng Manggaga!a sa <E#RO, In". P National -ederation of abor, otherwise
'nown as PI1/S0<E#RO, INC. P N- P H<D, entered into a "olle"tive bar!ainin! a!ree$ent with petitioner
<E#RO. Pier"in! the "orporate veil of <E#RO was unwarranted, as there was no "o$petent and "onvin"in!
eviden"e of any wron!ful, fraudulent or unlawful a"t on the part of <E#RO, and, $ore so, on the part of R#/.
Petitioner R#/ further "ontends that it is a !overn$ent0owned and "ontrolled "orporation with an ori!inal "harter,
E>e"utive Order No. 3,), Series of *45,, as a$ended, and thus under the e>"lusive :urisdi"tion only of the Civil
Servi"e Co$$ission, not the NRC.
Private respondent wor'ers, however, sub$it that petitioner <E#RO was not only fully0owned by petitioner R#/,
but all aspe"ts of its operations and ad$inistration were also stri"tly "ontrolled, "ondu"ted and dire"ted by petitioner
R#/. /nd sin"e petitioner <E#RO is a $ere ad:un"t, business "onduit, and alter e!o of petitioner R#/, their
respe"tive "orporate veils $ust be pier"ed to satisfy the $oney "lai$s of the ille!ally dis$issed private respondent
e$ployees.
?e a!ree with petitioner R#/. Se"tion + %*&, /rti"le IJ P B, *45. Constitution, e>pressly provides that IAtBhe "ivil
servi"e e$bra"es all bran"hes, subdivisions, instru$entalities, and a!en"ies of the 1overn$ent, in"ludin!
!overn$ent0owned or "ontrolled "orporations with ori!inal "harters.I Corporations with ori!inal "harters are those
whi"h have been "reated by spe"ial law and not throu!h the !eneral "orporation law. #hus, in P"$)$22$n# Na0$'na) O$)
C'+2an- < En#,*- D#/#)'2+#n0 C',2',a0$'n /. H'n. L#'*,ad', we held that Iunder the present state of the law,
the test in deter$inin! whether a !overn$ent0owned or "ontrolled "orporation is sub:e"t to the Civil Servi"e aw is
the $anner of its "reation su"h that !overn$ent "orporations "reated by spe"ial "harter are sub:e"t to its provisions
while those in"orporated under the !eneral Corporation aw are not within its "overa!e.I12#here should be no dispute
then that e$ploy$ent in petitioner R#/ should be !overned only by "ivil servi"e rules, and not the abor Code and
beyond the rea"h of the Depart$ent of abor and E$ploy$ent, sin"e petitioner R#/ is a !overn$ent0owned and
"ontrolled "orporation with an ori!inal "harter, E>e"utive Order No. 3,), Series of *45,, as a$ended.
In "ontrast, petitioner <E#RO is "overed by the abor Code despite its later a"6uisition by petitioner R#/.
InL&+an0a /. Na0$'na) La.', R#)a0$'n% C'++$%%$'n,13this Court ruled that labor law "lai$s a!ainst !overn$ent0
owned and "ontrolled "orporations without ori!inal "harter fall within the :urisdi"tion of the Depart$ent of abor and
E$ploy$ent and not the Civil Servi"e Co$$ission. Petitioner <E#RO was ori!inally or!ani7ed under the
Corporation Code, and only be"a$e a !overn$ent0owned and "ontrolled "orporation after it was a"6uired by
petitioner R#/. Even then, petitioner <E#RO has no ori!inal "harter, hen"e, it is the Depart$ent of abor and
E$ploy$ent, and not the Civil Servi"e Co$$ission, whi"h has :urisdi"tion over disputes arisin! fro$ the
e$ploy$ent of its wor'ers. Conse6uently, the ter$s and "onditions of su"h e$ploy$ent are !overned by the abor
Code and not by the Civil Servi"e Rules and Re!ulations.
?e therefore hold that the e$ployees of petitioner <E#RO "annot be "onsidered as e$ployees of petitioner R#/.
#he e$ployees hired by <E#RO are "overed by the abor Code and are under the :urisdi"tion of the Depart$ent of
abor and E$ploy$ent, whereas the e$ployees of petitioner R#/, a !overn$ent0owned and "ontrolled "orporation
with ori!inal "harter, are "overed by "ivil servi"e rules. @erein private respondent wor'ers "annot have the best of two
worlds, e.g., be "onsidered !overn$ent e$ployees of petitioner R#/, yet allowed to stri'e as private e$ployees
under our labor laws. Depart$ent of (usti"e Opinion No. *,5, Series of *444, issued by then Se"retary of (usti"e
Serafin R. Cuevas on whether or not e$ployees of petitioner <E#RO "ould !o on stri'e is persuasive P
?e believe that <E#RO e$ployees are not "overed by the prohibition a!ainst stri'es appli"able to e$ployees
e$bra"ed in the Civil Servi"e. It is not disputed, but in fa"t "on"eded, that <E#RO e$ployees are not "overed by the
Civil Servi"e. #his bein! so, <E#RO e$ployees are not "overed by the Civil Servi"e law, rules and re!ulations but
are "overed by the abor Code and, therefore, the ri!hts and prero!atives !ranted to private e$ployees thereunder,
in"ludin! the ri!ht to stri'e, are available to the$.
<oreover, as noted by Se"retary Ben:a$in E. Dio'no, of the Depart$ent of Bud!et and <ana!e$ent, in his letter
dated -ebruary ++, *444, the e$ployees of <E#RO are not entitled to the !overn$ent a$elioration assistan"e
authori7ed by the President pursuant to /d$inistrative Order No. ). for !overn$ent e$ployees, be"ause the
e$ployees of <E#RO are not !overn$ent e$ployees sin"e <etro, In". I"ould not be "onsidered as 1OCC as defined
under Se"tion ) %b& of E.O. 2*5 > > > >I14
Indeed, there was never an intention to "onsider the e$ployees of petitioner <E#RO as !overn$ent e$ployees of
petitioner R#/ as well P neither fro$ the be!innin!, nor until the end. Otherwise, they "ould have been easily
"onverted fro$ bein! e$ployees in the private se"tor and absorbed as !overn$ent e$ployees "overed by the "ivil
servi"e when petitioner R#/ a"6uired petitioner <E#RO in *454. #he stubborn fa"t is that they re$ained private
e$ployees with ri!hts and prero!atives !ranted to the$ under the abor Code, in"ludin! the ri!ht to stri'e, whi"h
they e>er"ised and fro$ whi"h the instant dispute arose.
?e li'ewise hold that it is inappropriate to pier"e the "orporate veil of petitioner <E#RO. In D#) R'%a,$' /. Na0$'na)
La.', R#)a0$'n% C'++$%%$'n, we ruled that IAuBnder the law a "orporation is bestowed :uridi"al personality, separate
and distin"t fro$ its sto"'holders. But when the :uridi"al personality of the "orporation is used to defeat publi"
"onvenien"e, :ustify wron!, prote"t fraud or defend "ri$e, the "orporation shall be "onsidered as a $ere asso"iation of
persons, and its responsible offi"ers andCor sto"'holders shall be held individually liable. -or the sa$e reasons, a
"orporation shall be liable for the obli!ations of a sto"'holder, or a "orporation and its su""essor0in0interest shall be
"onsidered as one and the liability of the for$er shall atta"h to the latter. But for the separate :uridi"al personality of a
"orporation to be disre!arded, the wron!doin! $ust be "learly and "onvin"in!ly established. It "annot be
presu$ed.I15In D#) R'%a,$', we also held that the Isubstantial identity of the in"orporators of the two "orporations
does not ne"essarily i$ply fraud.I16
In the instant "ase, petitioner <E#RO, for$erly <eral"o #ransit Or!ani7ation, In"., was ori!inally owned by the
<anila Ele"tri" Co$pany and re!istered with the Se"urities and E>"han!e Co$$ission $ore than a de"ade before the
labor dispute. It then entered into a ten0year a!ree$ent with petitioner R#/ in *458. /nd, even if petitioner R#/
eventually pur"hased <E#RO in *454, both parties $aintained their separate and distin"t :uridi"al personality and
allowed the a!ree$ent to pro"eed. In *44,, this Court, in L$*"0 Ra$) T,an%$0 A&0"',$0- /. C'++$%%$'n 'n A&d$0,
even upheld the validity of the said a!ree$ent.17Conse6uently, the a!ree$ent was e>tended beyond its ten0year
period. In *442, <E#RO9s separate :uridi"al identity was a!ain re"o!ni7ed when it entered into a "olle"tive
bar!ainin! a!ree$ent with the wor'ers9 union. /ll these years, <E#RO9s distin"t "orporate personality "ontinued
6uies"ently, separate and apart fro$ the :uridi"al personality of petitioner R#/.
#he labor dispute only arose in +,,,, after a deadlo"' o""urred durin! the "olle"tive bar!ainin! between petitioner
<E#RO and the wor'ers9 union. #his alone is not a :ustifi"ation to pier"e the "orporate veil of petitioner <E#RO and
$a'e petitioner R#/ liable to private respondent wor'ers. #here are no bad!es of fraud or any wron!doin! to pier"e
the "orporate veil of petitioner <E#RO.
On this point, the Depart$ent of (usti"e Opinion No. *,5, Series of *444, issued by then Se"retary of (usti"e Serafin
R. Cuevas is on"e a!ain apropos=
/nent the issue of pier"in! the "orporate veil, it was held in Conce,t Builders# "nc. v. NLRC %1.R. No. *,5.)8, <ay
+4, *443, +2. SCR/ *84, *24& that the test in deter$inin! the appli"ability of the do"trine of pier"in! the veil of
"orporate fi"tion is as follows=
I*. Control, not $ere $a:ority or "o$plete sto"' "ontrol, but "o$plete do$ination, not only of finan"es but
of poli"y and business pra"ti"e in respe"t to the transa"tion atta"'ed so that the "orporate entity as to this
transa"tion had at the ti$e no separate $ind, will or e>isten"e of its own;
+. Su"h "ontrol $ust have been used by the defendant to "o$$it fraud or wron!, to perpetuate the violation
of a statutory or other positive le!al duty, or dishonest and un:ust a"t in "ontravention of plaintiff9s le!al
ri!hts; and
). #he aforesaid "ontrol and brea"h of duty $ust pro>i$ately "ause the in:ury or un:ust loss "o$plained of.
#he absen"e of any one of these ele$ents prevents Npier"in! the "orporate veil.9 In applyin! the Ninstru$entality9 or
Nalter e!o9 do"trine, the "ourts are "on"erned with reality and not for$, with how the "orporation operated and the
individual defendant9s relationship to that operation.I
@ere, the re"ords do not show that "ontrol was used to "o$$it a fraud or wron!. In fa"t, it appears that pier"in! the
"orporate veil for the purpose of delivery of publi" servi"e, would lead to a "onfusin! situation sin"e the out"o$e
would be that <etro will be treated as a $ere alter e!o of R#/, not havin! a separate "orporate personality fro$
R#/, when dealin! with the issue of stri'e, and a separate :uridi"al entity not "overed by the Civil Servi"e when it
"o$es to other $atters. Dnder the Constitution, a !overn$ent "orporation is either one with ori!inal "harter or one
without ori!inal "harter, but never both.18
In su$, petitioner R#/ "annot be held liable to the e$ployees of petitioner <E#RO.
?ith re!ard the issue of ille!al dis$issal, petitioner <E#RO $aintains that private respondent wor'ers were not
ille!ally dis$issed but should be dee$ed to have abandoned their :obs after defyin! the assu$ption of :urisdi"tion and
return0to0wor' order issued by the abor Se"retary. Private respondent wor'ers, on the other hand, sub$it that they
"ould not i$$ediately return to wor' as the li!ht rail transit syste$ had "eased its operations.
?e find for the private respondent wor'ers. In Batan!as a!una #ayabas Bus Co. v. National abor Relations
Co$$ission,19 we said that the five0day period for the stri'ers to obey the Order of the Se"retary of (usti"e and return
to wor' was not suffi"ient as Iso$e of the$ $ay have left <etro <anila and did not have enou!h ti$e to return
durin! the period !iven by petitioner, whi"h was only five days.I20 In Batan!as a!una #ayabas Bus Co.,21we further
held P
#he "ontention of the petitioner that the private respondents abandoned their position is also not a""eptable. /n
e$ployee who forthwith ta'es steps to protest his lay0off "annot by any lo!i" be said to have abandoned his wor'.
-or abandon$ent to "onstitute a valid "ause for ter$ination of e$ploy$ent, there $ust be a deliberate, un:ustified
refusal of the e$ployee to resu$e his e$ploy$ent. #his refusal $ust be "learly established. /s we stressed in a re"ent
"ase, $ere absen"e is not suffi"ient; it $ust be a""o$panied by overt a"ts unerrin!ly pointin! to the fa"t that the
e$ployee si$ply does not want to wor' any$ore.
In the instant "ase, private respondent wor'ers "ould not have defied the return0to0wor' order of the Se"retary of
abor si$ply be"ause they were dis$issed i$$ediately, even before they "ould obey the said order. #he re"ords show
that the assu$ption of :urisdi"tion and return0to0wor' order was issued by Se"retary of abor Bienvenido E.
a!ues$a on (uly +2, +,,,. #he said order was served and posted by the sheriffs of the Depart$ent of abor and
E$ploy$ent the followin! day, on (uly +3, +,,,. -urther, the said order of assu$ption of :urisdi"tion was duly
published on (uly +., +,,,, in the P"$)$22$n# Da$)- In;&$,#, and the P"$)$22$n# S0a,. On the sa$e day also, on (uly
+., +,,,, private respondent wor'ers were dis$issed. Neither "ould they be "onsidered as havin! abandoned their
wor'. If petitioner <E#RO did not dis$iss the stri'ers ri!ht away, and instead a""epted the$ ba"' to wor', the
$ana!e$ent a!ree$ent between petitioners R#/ and <E#RO "ould still have been e>tended and the wor'ers would
still have had wor' to return to.
IN VIEW WHEREOF, the De"ision of publi" respondent Court of /ppeals is /--IR<ED insofar as it holds <etro
#ransit Or!ani7ation, In". liable for the ille!al dis$issal of private respondents and orders it to pay the$ their benefits
and full ba"' wa!es and $oral da$a!es. -urther, <etro #ransit Or!ani7ation, In". is ordered to pay attorney9s fees
e6uivalent to ten per"ent %*,Q& of the total $oney :ud!$ent. #he petition of the i!ht Rail #ransit /uthority is
1R/N#ED, and the "o$plaint filed a!ainst it for ille!al dis$issal is DIS<ISSED for la"' of $erit.
PEOPLE OF THE PHILIPPINES" plainti%%7appellee,
4.
ANTONIO NOGRA" a!!&e#7appellant.
D E C I S I O N
A#STRIA$MARTINE%" J.:
He%ore t(e Co&rt i an appeal %ro+ t(e ,e!iion
1
#ate# A&"&t 31, 2005 o% t(e Co&rt o% Appeal /CA0 in
CA7G.R. C.R. No. 00244 a%%ir+in" t(e '&#"+ent o% t(e Re"ional ;rial Co&rt /R;C0, Hran!( 19, Na"a Cit$ in
Cri+inal Cae No. 9877182, !on4i!tin" Antonio No"ra /appellant0 o% lar"e !ale ille"al re!r&it+ent &n#er
Se!tion 6/+0 in relation to Se!tion 7/.0 o% Rep&.li! A!t No. 8042 /R.A. No. 80420,
2
ot(er-ie 8no-n a t(e
I*i"rant 1or8er an# )4erea 5ilipino A!t o% 1995.I
3
;(e in!&lpator$ portion o% t(e =n%or+ation !(ar"in" one 2orna G. )r!i"a an# appellant -it( lar"e !ale
ille"al re!r&it+ent rea# a %ollo-@
;(at o+eti+e #&rin" t(e perio# o% *ar!( 1997 to No4e+.er, 1997 in t(e Cit$ o% Na"a, P(ilippine,
an# -it(in t(e A&ri#i!tion o% t(i 6onora.le Co&rt, t(e a.o4e7na+e# a!!&e#, .ein" t(e General
*ana"er an# )peration *ana"er o% 2)RAN =N;3RNA;=)NA2 )J3RS3AS R3CRC=;*3N; C).,
2;,., -it( o%%i!e at Con!ep!ion Gran#e, Na"a Cit$, !onpirin", !on%e#eratin" to"et(er an# +&t&all$
(elpin" ea!( ot(er, repreentin" t(e+el4e to (a4e t(e !apa!it$ to !ontra!t, enlit, (ire an#
tranport 5ilipino -or8er %or e+plo$+ent a.roa#, #i# t(en an# t(ere -ill%&ll$, &nla-%&ll$ an#
!ri+inall$, %or a %ee, re!r&it an# pro+ie e+plo$+entKAo. pla!e+ent to t(e (erein !o+plainin"
-itnee R3NA;) A2,3N, )2=J3R SAR*=3N;), 53 9AHA22A, ;3)5=2A 2CA26A;=, P=2=P=NA
*3N,)9A an# L3R1=N ,)NACA), .&t %aile# to a!t&all$ #eplo$ t(e+ -it(o&t 4ali# reaon, a
-ell a to rei+.&re t(eir #o!&+entation, pla!e+ent an# pro!ein" e?pene %or p&rpoe o%
#eplo$+ent #epite t(eir repeate# #e+an# %or t(e ret&rn o% t(e a+e, to t(eir #a+a"e an#
preA&#i!e in t(e a+o&nt a +a$ .e pro4en in !o&rt.
C)N;RARM ;) 2A1.
4
)nl$ appellant -a .ro&"(t to t(e A&ri#i!tion o% t(e trial !o&rt in!e 2orna G. )r!i"a -a t(en an# till i at
lar"e. Arrai"ne# -it( t(e aitan!e o% !o&nel, appellant entere# a plea o% IN); GC=2;MI to t(e !ri+e
!(ar"e#. ;(erea%ter, trial o% t(e !ae en&e#.
)% t(e i? !o+plainant, t(e proe!&tion -a a.le to preent %i4e o% t(e+, na+el$@ Renato Al#en, 5e
9a.alla, ;eo%ila 2&al(ati, 5ilipina *en#oBa an# Ler-in ,ona!ao. Anaiel$n Sar+iento, -i%e o% !o+plainant
)li4er Sar+iento, alo teti%ie# %or t(e proe!&tion.
;(e %a!t, a eta.li(e# .$ t(e proe!&tion, are aptl$ &++ariBe# .$ t(e )%%i!e o% t(e Soli!itor General
/)SG0, a %ollo-@
Appellant (el# o%%i!e at 2oran =nternational )4erea Re!r&it+ent Co., /2oran0 in Con!ep!ion
Gran#e, Na"a Cit$ /p. 4, ;SN, )!to.er 19, 19980. A na+eplate on (i ta.le pro+inentl$ #ipla$e#
(i na+e an# poition a operation +ana"er /p. 11, ;SN, No4e+.er 17, 1998G p. 4, ;SN, 'an&ar$
12, 1999G p. 21, ;SN, No4e+.er 19, 19980. ;(e li!ene o% 2oran alo in#i!ate# appellant a t(e
operation +ana"er /p. 5, ;SN, 5e.r&ar$ 10, 19990. ;(e P)3A %ile alo re%le!t (i poition a
operation +ana"er o% 2oran /3?(i.it 2 to 274, pp. 579, ;SN, No4e+.er 19, 19980.
So+eti+e in ,e!e+.er 1996, Renato Al#en -ent to 2oran to appl$ %or a Ao. a (otel -or8er %or
Saipan. 6e -a inter4ie-e# .$ appellant, -(o re>&ire# Al#en to &.+it an NH= !learan!e an#
+e#i!al !erti%i!ate an# to pa$ t(e pla!e+ent %ee. Al#en pai# t(e a+o&nt o% P31,000.00. ;(e
a##itional a+o&nt o% P4,000.00 -a to .e pai# prior to (i #epart&re to Saipan /pp. 576, ;SN,
No4e+.er 17, 19980. Appellant pro+ie# Al#en t(at (e -o&l# lea4e -it(in a perio# o% t(ree to %o&r
+ont(. A%ter one $ear o% -aitin" Al#en -a not a.le to lea4e. Al#en %ile# a !o+plaint -it( t(e NH=
-(en (e -a not a.le to re!o4er t(e a+o&nt an# !o&l# no lon"er tal8 -it( appellant /p. 6, ;SN,
No4e+.er 17, 19980.
)n April 18, 1997, ;eo%ila 2&al(ati applie# %or e+plo$+ent a (otel -or8er %or Saipan -it( 2oran
/pp. 173, 10, ;SN, No4e+.er 19, 19980. Appellant re>&ire# (er to &.+it an NH= !learan!e an#
+e#i!al !erti%i!ate an# to pa$ t(e pro!ein" %ee in t(e a+o&nt o% P35,000.00 o (e !o&l# lea4e
i++e#iatel$. S(e pai# t(e a+o&nt o% P35,000.00 to 2oranF e!retar$ in t(e preen!e o% appellant.
S(e -a pro+ie# t(at -it(in 120 #a$ or 4 +ont( (e -o&l# .e a.le to lea4e /pp. 11713, ;SN,
No4e+.er 19, 19980. ,epite repeate# %ollo-7&p, 2&al(ati -a &na.le to -or8 in Saipan. S(e
#e+an#e# t(e re%&n# o% t(e pro!ein" %ee. 1(en t(e a+o&nt -a not ret&rne# to (er, (e %ile# a
!o+plaint -it( t(e NH= /pp. 14715, ;SN, No4e+.er 19, 19980.
So+eti+e in April 1998, 5ilipina *en#oBa -ent to 2oran to appl$ %or e+plo$+ent a (otel -or8er
/p. 4, ;SN, '&l$ 12, 19990. S(e pai# t(e a+o&nt o% P35,000.00 a pla!e+ent %ee. 1(en (e -a
not a.le to -or8 a.roa#, (e -ent to 2oran an# o&"(t t(e ret&rn o% P35,000.00 %ro+ appellant /p.
7, ;SN, 'an&ar$ 21, 19990.
So+eti+e in )!to.er 1997, Ler-in ,ona!ao -ent to 2oran to appl$ %or e+plo$+ent a p&r!(aer
in Saipan /p. 4, ;SN, 5e.r&ar$ 10, 19990. 6e -a re>&ire# to &.+it NH= !learan!e, poli!e
!learan!e, pre4io& e+plo$+ent !erti%i!ate an# (i paport. 6e pai# t(e pla!e+ent %ee
o%P35,000.00 /pp.475, ;SN, 5e.r&ar$ 10, 19990. A%ter pa$in" t(e a+o&nt, (e -a tol# to -ait %or
t-o to t(ree +ont(. 1(en (e -a not a.le to lea4e %or Saipan, (e #e+an#e# t(e ret&rn o% t(e
pla!e+ent %ee, -(i!( -a not re%&n#e# /pp. 677, ;SN, 5e.r&ar$ 10, 19990.
,&rin" t(e %irt -ee8 o% No4e+.er 1997, Annel$n Sar+iento an# (er (&.an#, )li4er Sar+iento,
applie# %or o4erea e+plo$+ent. 5or t(e appli!ation o% )li4er Sar+iento, t(e$ &.+itte# (i
+e#i!al !erti%i!ate an# !erti%i!ation o% pre4io& e+plo$+ent. ;(e$ -ere alo +a#e to pa$ t(e
a+o&nt o% P27,000.00 a pro!ein" %ee. )li4er Sar+iento -a pro+ie# t(at -it(in 1 +ont(, (e
-o&l# .e a.le to lea4e. =nitiall$, )li4er Sar+iento -a tol# t(at alle"e#l$ (i 4ia -a $et to .e
o.taine#. 1(en (e -a not a.le to lea4e an# -(at (e pai# -a not re%&n#e#, (e %ile# a !o+plaint
-it( t(e NH= /pp. 476, ;SN, April 23, 19990.
So+eti+e in *a$ 1997, 5e 9a.alla applie# %or o4erea e+plo$+ent in Saipan -it( 2oran /p. 4,
;SN, *a$ 21, 19990. S(e -a re>&ire# to &.+it (er +e#i!al !erti%i!ate, ori"inal !op$ o% (er .irt(
!erti%i!ate, NH= !learan!e an# poli!e !learan!e. S(e -a alo re>&ire# to pa$ t(e a+o&nt
o%P35,000.00 a pla!e+ent %ee. 1(en (e !o&l# not .e #eplo$e#, (e o&"(t to re!o4er t(e
a+o&nt (e pai#, -(i!( -a not ret&rne# /pp. 778, ;SN, *a$ 2, 19990.
5
)n t(e ot(er (an#, appellant preente# t(e %ollo-in" e4i#en!e@
;(e #e%ene preente# [appellant] Antonio No"ra an# t(e a"en!$F e!retar$ an# !a(ier, *arite
*eina.
5ro+ t(eir teti+onie it -a eta.li(e# t(at 2)RAN =N;3RNA;=)NA2 )J3RS3AS
R3CRC=;*3N; C)., 2;,., /2)RAN, %or .re4it$0 -a o-ne# .$ a!!&e# 2orna )r!i"a an#
'apanee national Latar& ;ana8a /;SN, Septe+.er 30, 2000, p. 70. So+eti+e in '&l$ 1994,
[appellant] Antonio No"ra rea# %ro+ o&ti#e t(e a"en!$F +ain o%%i!e at 2i.erta#, *an#al&$on" Cit$
t(at it -a in nee# o% a liaion o%%i!er. 6e applie# %or t(e poition. ;(e part7o-ner an# !o7a!!&e#,
2orna )r!i"a, (ire# (i+ intea# a )peration *ana"er a t(e a"en!$ -a t(en till in t(e pro!e
o% !o+pletin" t(e lit o% peronnel to .e &.+itte# to t(e P)3A. /;SN, 'an&ar$ 31, 2001, p. 50.
[Appellant] No"ra tarte# -or8in" -it( 2)RAN in )!to.er 1994. =n 1995, (e -a tran%erre# to
Na"a Cit$ -(en t(e a"en!$ opene# a .ran!( o%%i!e t(ereat. Alt(o&"( (e -a #ei"nate# a t(e
)peration *ana"er, [appellant] No"ra -a a +ere e+plo$ee o% t(e a"en!$. 6e -a re!ei4in" a
+ont(l$ alar$ o% P5,000.00 an# a##itional P2,000.00 +ont(l$ +eal allo-an!e. 6e -a in7!(ar"e
o% t(e a#4ertie+ent o% t(e !o+pan$. 6e alo #ro4e %or t(e !o+pan$. 6e %et!(e# %ro+ t(e airport
t(e a"en!$F 4iitor an# "&et an# #ro4e t(e+ to (otel an# ot(er pla!e. /;SN, *a$ 3, 2000, pp.
2790.
Alt(o&"( part7o-ner 2orna )r!i"a -a tatione# in *anila, (e, (o-e4er, a!t&all$ re+aine# in
!ontrol o% t(e .ran!( o%%i!e in Na"a Cit$. S(e !on#&!te# t(e %inal inter4ie- o% t(e appli!ant an#
trana!te# -it( t(e %orei"n e+plo$er. S(e alo !ontrolle# t(e %inan!ial +atter an# ae+ent
%ee o% t(e a"en!$ in Na"a Cit$ /;SN, Septe+.er 20, 2000, pp. 8790. ;(e pla!e+ent an#
pro!ein" %ee !olle!te# .$ t(e a"en!$ in Na"a Cit$ -ere all #epoite# in t(e .an8 a!!o&nt o%
2orna )r!i"a an# not a in"le !enta4o -ent to t(e .ene%it o% [appellant] No"ra /;SN, 'an&ar$ 10,
2000, pp. 147220.
6
)n *ar!( 26, 2003, t(e R;C ren#ere# '&#"+ent
7
%in#in" appellant "&ilt$ .e$on# reaona.le #o&.t o% t(e
!ri+e !(ar"e#. ;(e fallo o% t(e #e!iion rea#@
163R35)R3, t(e Co&rt %in# t(e a!!&e# AN;)N=) N)GRA "&ilt$ .e$on# reaona.le #o&.t o%
t(e !ri+e o% =lle"al Re!r&it+ent Co++itte# in 2ar"e S!ale #e%ine# &n#er Se!tion 6/+0 an# 7/.0 o%
RA 8042, ot(er-ie 8no-n a ;(e *i"rant 1or8er an# )4erea 5ilipino A!t o% 1995 an#,
a!!or#in"l$, (ere.$ i+poe &pon (i+ t(e penalt$ o% li%e i+prion+ent an# a %ine o% 5i4e (&n#re#
t(o&an# peo /P500,000.000.
S) )R,3R3,.
8
)n April 10, 2003, appellant %ile# a Noti!e o% Appeal.
9
;(e R;C or#ere# t(e tran+ittal o% t(e entire re!or#
o% t(e !ae to t(i Co&rt.
Con%or+a.l$ to t(e r&lin" in People v. Mateo,
10
t(e !ae -a re%erre# to t(e CA %or inter+e#iate re4ie-.
11
)n A&"&t 31, 2005, t(e CA ren#ere# a ,e!iion
12
a%%ir+in" t(e #e!iion o% t(e R;C. ;(e CA (el# t(at
.ein" an e+plo$ee i not a 4ali# #e%ene in!e e+plo$ee -(o (a4e 8no-le#"e an# a!ti4e parti!ipation in
t(e re!r&it+ent a!ti4itie +a$ .e !ri+inall$ lia.le %or ille"al re!r&it+ent a!ti4itie, .ae# &pon t(i Co&rtF
r&lin" in People v. Chowdury
13
an# People v. Corpuz;
14
t(at appellant (a# 8no-le#"e o% an# a!ti4e
parti!ipation in t(e re!r&it+ent a!ti4itie in!e all t(e proe!&tion -itnee pinpointe# appellant a t(e one
-(o+ t(e$ initiall$ approa!(e# re"ar#in" t(eir plan o% -or8in" o4erea an# (e -a t(e one -(o tol#
t(e+ a.o&t t(e %ee t(e$ (a# to pa$, a -ell a t(e paper t(at t(e$ (a# to &.+itG t(at t(e +ere %a!t t(at
appellant -a not i&e# pe!ial a&t(orit$ to re!r&it #oe not e?!&lpate (i+ %ro+ an$ lia.ilit$ .&t rat(er
tron"l$ &""et (i "&iltG t(at appellantF in4o!ation o% non7%li"(t !annot .e -ei"(e# in (i %a4or in!e
t(ere i no eta.li(e# r&le t(at non7%li"(t i, in e4er$ intan!e, an in#i!ation o% inno!en!e.
A Noti!e o% Appeal
15
(a4in" .een ti+el$ %ile# .$ appellant, t(e CA %or-ar#e# t(e re!or# o% t(e !ae to t(i
Co&rt %or %&rt(er re4ie-.
=n (i Hrie%, appellant ai"n a error t(e %ollo-in"@
=
;63 ;R=A2 C)CR; 3RR3, =N N); 5=N,=NG ;6A; ;63 ACCCS3,7APP322AN; 1AS A *3R3
3*P2)M33 )5 ;63 R3CRC=;*3N; AG3NCM ,3SP=;3 6=S ,3S=GNA;=)N AS =;S
)P3RA;=)NS *ANAG3R.
==
;63 ;R=A2 C)CR; 3RR3, =N C)NJ=C;=NG ;63 ACCCS3,7APP322AN; )5 ;63 )553NS37
C6ARG3, ,3SP=;3 ;63 5AC; ;6A; CN,3R ;63 2A1, 63 1AS N); CR=*=NA2M 2=AH23
5)R 6=S AG3NCMFS ;RANSAC;=)NS.
16
Appellant ar"&e t(at t(e a"en!$ -a &n#er t(e +ana"e+ent an# !ontrol o% )r!i"a, an# t(at (e -a a
+ere e+plo$eeG t(at (e !o&l# not .e (el# peronall$ lia.le %or ille"al re!r&it+ent in t(e a.en!e o% an$
(o-in" t(at (e -a 4ali#l$ i&e# pe!ial a&t(orit$ to re!r&it -or8er, -(i!( -a appro4e# .$ t(e
P(ilippine )4erea 3+plo$+ent A#+initration /P)3A0G t(at (i non7%li"(t i in#i!ati4e o% (i inno!en!e.
Appellee, t(ro&"( t(e )SG, !o&nter t(at appellant i not a +ere !ler8 or e!retar$ o% 2oran, .&t it
)peration *ana"er -(o #ire!tl$ parti!ipate# in t(e re!r&it+ent !(e+e .$ pro+iin" pri4ate !o+plainant
-or8 a.roa#, .&t %aile# to #eplo$ t(e+ an# re%&e# to rei+.&re t(e appli!antF pla!e+ent %ee -(en
#e+an#e#.
;(e appeal %ail. ;(e CA #i# not !o++it an$ error in a%%ir+in" t(e #e!iion o% t(e R;C.
R.A. No. 8042 .roa#ene# t(e !on!ept o% ille"al re!r&it+ent &n#er t(e
2a.or Co#e
17
an# pro4i#e# ti%%er penaltie, epe!iall$ t(oe t(at !ontit&te e!ono+i! a.ota"e, i.e.,=lle"al
Re!r&it+ent in 2ar"e S!ale an# =lle"al Re!r&it+ent Co++itte# .$ a S$n#i!ate.
Se!tion 6 o% R.A. No. 8042 #e%ine# -(en re!r&it+ent i ille"al@
S3C. 6. Definition. N 5or p&rpoe o% t(i A!t, ille"al re!r&it+ent (all +ean an$ a!t o% !an4ain",
enlitin", !ontra!tin", tranportin", &tiliBin", (irin", or pro!&rin" -or8er an# in!l&#e re%errin",
!ontra!t er4i!e, pro+iin" or a#4ertiin" %or e+plo$+ent a.roa#, -(et(er %or pro%it or not, -(en
&n#erta8en .$ a non7li!enee or non7(ol#er o% a&t(orit$ !onte+plate# &n#er Arti!le 13/%0 o%
Prei#ential ,e!ree No. 442, a a+en#e#, ot(er-ie 8no-n a t(e 2a.or Co#e o% t(e P(ilippine@
Pro4i#e#, ;(at an$ &!( non7li!enee or non7(ol#er -(o, in an$ +anner, o%%er or pro+ie %or a
%ee e+plo$+ent a.roa# to t-o or +ore peron (all .e #ee+e# o en"a"e#. It s&all li'e(ise
iclu)e t&e *+ll+(i! acts" (&et&e, c+--itte) ./ a/ 0e,s+" (&et&e, a +$licesee" +$
&+l)e," licesee +, &+l)e, +* aut&+,it/ @
? ? ? ?
1l2 Failu,e t+ actuall/ )e0l+/ (it&+ut vali) ,eas+ as )ete,-ie) ./ t&e De0a,t-et +* La.+,
a) E-0l+/-etG an#
1-2 Failu,e t+ ,ei-.u,se e30eses icu,,e) ./ t&e (+,'e,s i c+ecti+ (it& &is
)+cu-etati+ a) 0,+cessi! *+, 0u,0+ses +* )e0l+/-et" i cases (&e,e t&e )e0l+/-et
)+es +t actuall/ ta'e 0lace (it&+ut t&e (+,'e,4s *ault. =lle"al re!r&it+ent -(en !o++itte# .$ a
$n#i!ate or in lar"e !ale (all .e !oni#ere# a o%%ene in4ol4in" e!ono+i! a.ota"e.
=lle"al re!r&it+ent i #ee+e# !o++itte# .$ a $n#i!ate !arrie# o&t .$ a "ro&p o% t(ree /30 or +ore
peron !onpirin" or !on%e#eratin" -it( one anot(er. =t i #ee+e# !o++itte# in lar"e !ale i%
!o++itte# a"aint t(ree /30 or +ore peron in#i4i#&all$ or a a "ro&p.
T&e 0e,s+s c,i-iall/ lia.le *+, t&e a.+ve +**eses a,e t&e 0,ici0als" acc+-0lices" a)
access+,ies. I case +* 5u,i)ical 0e,s+s" t&e +**ice,s &avi! c+t,+l" -aa!e-et +,
)i,ecti+ +* t&ei, .usiess s&all .e lia.le. /3+p(ai an# &n#er!orin" &pplie#0
=n t(e preent !ae, e4i#en!e %or t(e proe!&tion (o-e# t(at 2oran
=nternational )4erea Re!r&it+ent Co., 2t#. i a #&l$ li!ene# re!r&it+ent a"en!$ -it( a&t(orit$ to
eta.li( a .ran!( o%%i!e. 6o-e4er, &n#er R.A. No. 8042, e4en a li!enee or (ol#er o% a&t(orit$ !an .e (el#
lia.le %or ille"al re!r&it+ent, (o&l# (e !o++it or o+it to #o an$ o% t(e a!t en&+erate# in Se!tion 6.
Appellant -a !(ar"e# -it( ille"al re!r&it+ent in lar"e !ale &n#er Se!tion 6 /l0 an# /+0 o% R.A. No. 8042.
Se!tion 6 /l0 re%er to t(e %ail&re to a!t&all$ #eplo$ -it(o&t 4ali# reaon, a #eter+ine# .$ t(e ,epart+ent
o% 2a.or an# 3+plo$+ent /,)230. Se!tion 6 /+0 in4ol4e t(e %ail&re to rei+.&re e?pene in!&rre# .$ t(e
-or8er in !onne!tion -it( (i #o!&+entation an# pro!ein" %or p&rpoe o% #eplo$+ent, in !ae in -(i!(
t(e #eplo$+ent #oe not a!t&all$ ta8e pla!e -it(o&t t(e -or8er< %a&lt.
A t(oro&"( !r&tin$ o% t(e proe!&tionF e4i#en!e re4eal t(at it %aile# to pro4e appellantF lia.ilit$ &n#er
Se!tion 6 /l0 o% R.A. No. 8042. ;(e la- re>&ire not onl$ t(at t(e %ail&re to #eplo$ .e (it&+ut vali)
,eas+ Ias determined by the Department of Labor and Employment.I ;(e la- en4iion t(at t(ere .e
in#epen#ent e4i#en!e %ro+ t(e ,)23 to eta.li( t(e reaon %or non7#eplo$+ent, &!( a t(e a.en!e o%
a proper Ao. or#er. No #o!&+ent %ro+ t(e ,)23 -a preente# in t(e preent !ae to eta.li( t(e reaon
%or t(e a!!&e#F %ail&re to a!t&all$ #eplo$ pri4ate !o+plainant. ;(&, appellant !annot .e (el# lia.le
&n#er Se!tion 6 /l0 o% R.A. No. 8042.
A to Se!tion 6 /+0 o% R.A. No. 8042, t(e proe!&tion (a pro4en .e$on# reaona.le #o&.t t(at pri4ate
!o+plainant +a#e pa$+ent to 2oran, an# appellant %aile# to rei+.&re t(e a+o&nt pai# .$ pri4ate
!o+plainant -(en t(e$ -ere not #eplo$e#. ;(e proe!&tion preente# t(e re!eipt i&e# .$ 2oran to
pri4ate !o+plainant e4i#en!in" pa$+ent o% pla!e+ent %ee ran"in" %ro+ P27,000.00 to P35,000.00.
Appellant #oe not #ip&te t(at pri4ate !o+plainant -ere not #eplo$e# %or o4erea -or8, an# t(at t(e
pla!e+ent %ee t(e$ pai# -ere not ret&rne# to t(e+ #epite #e+an#. 6o-e4er, (e ee8 to e?!&lpate
(i+el% on t(e "ro&n# t(at (e i a +ere e+plo$ee o% 2oran.
;(e Co&rt i &n-a$e# .$ appellantF !ontention.
;(e pen&lti+ate para"rap( o% Se!tion 6 o% R.A. No. 8042 e?pli!itl$ tate t(at t(oe !ri+inall$ lia.le are t(e
Iprincipals, accomplices, and accessories. n case of !uridical persons, the officers havin" control,
mana"ement or direction of their business shall be liable.6 Contrar$ to appellantF !lai+, t(e teti+onie o%
t(e !o+plainin" -itnee an# t(e #o!&+entar$ e4i#en!e %or t(e proe!&tion !learl$ eta.li(e# t(at (e
-a not a +ere e+plo$ee o% 2oran, .&t it )peration *ana"er. ;(e li!ene o% 2oran, t(e %ile o% t(e P)3A
an# t(e na+eplate pro+inentl$ #ipla$e# on (i o%%i!e #e8 re%le!te# (i poition a )peration *ana"er.
A &!(, (e re!ei4e# pri4ate !o+plainantF Ao. appli!ationG an# inter4ie-e# an# in%or+e# t(e+ o% t(e
a"en!$< re>&ire+ent prior to t(eir #eplo$+ent, &!( a NH= !learan!e, poli!e !learan!e, +e#i!al
!erti%i!ate, pre4io& e+plo$+ent !erti%i!ate an# t(e pa$+ent o% pla!e+ent %ee. 6e -a alo reponi.le %or
t(e ra#io a#4ertie+ent an# lea%let, -(i!( enti!e# !o+plainin" -itnee to appl$ %or e+plo$+ent -it(
t(e a"en!$. Clearl$, a )peration *ana"er, (e -a in t(e %ore%ront o% t(e re!r&it+ent a!ti4itie.
;(e #e%ene o% .ein" a +ere e+plo$ee i not a (iel# a"aint (i !on4i!tion %or lar"e !ale ille"al
re!r&it+ent. =n People v. #asacao
18
an# People v. $a"aya"a,
19
t(e Co&rt reiterate# t(e r&lin" in People v.
Cabais,
20
People v. Chowdury
21
an# People v. Corpuz
22
t(at an e+plo$ee o% a !o+pan$ or !orporation
en"a"e# in ille"al re!r&it+ent +a$ .e (el# lia.le a prin!ipal .$ #ire!t parti!ipation, to"et(er -it( it
e+plo$er, i% it i (o-n t(at (e a!ti4el$ an# !on!io&l$ parti!ipate# in t(e re!r&it+ent pro!e.
=n t(e preent !ae, it -a !learl$ eta.li(e# t(at appellant #ealt #ire!tl$ -it( t(e pri4ate !o+plainant. 6e
inter4ie-e# an# in%or+e# t(e+ o% t(e #o!&+entar$ re>&ire+ent an# pla!e+ent %ee. 6e pro+ie#
#eplo$+ent -it(in a t(ree or %o&r +ont(7perio# &pon pa$+ent o% t(e %ee, .&t %aile# to #eplo$ t(e+ an# to
rei+.&re, &pon #e+an#, t(e pla!e+ent %ee pai#.
;(e Co&rt i not per&a#e# .$ appellantF ar"&+ent t(at (i non7%li"(t i in#i!ati4e o% (i inno!en!e. Cnli8e
t(e %li"(t o% an a!!&e#, -(i!( i !o+petent e4i#en!e a"aint (i+ ten#in" to eta.li( (i "&ilt, non7%li"(t i
i+pl$ ina!tion, -(i!( +a$ .e #&e to e4eral %a!tor. =t +a$ not .e !ontr&e# a an in#i!ation o%
inno!en!e.
23
)% +ar8e# rele4an!e i t(e a.en!e o% an$ (o-in" t(at t(e pri4ate !o+plainant (a# an$ ill +oti4e
a"aint appellant ot(er t(an to .rin" (i+ to t(e .ar o% A&ti!e to an-er %or t(e !ri+e o% ille"al re!r&it+ent.
Hei#e, %or tran"er to !onpire an# a!!&e anot(er tran"er o% a +ot erio& !ri+e A&t to +olli%$ t(eir
(&rt %eelin" -o&l# !ertainl$ .e a"aint (&+an nat&re an# e?perien!e.
24
1(ere t(ere i not(in" to (o-
t(at t(e -itnee %or t(e proe!&tion -ere a!t&ate# .$ i+proper +oti4e, t(eir poiti4e an# !ate"ori!al
#e!laration on t(e -itne tan# &n#er t(e ole+nit$ o% an oat( #eer4e %&ll %ait( an# !re#en!e.
25
=t i a ettle# r&le t(at %a!t&al %in#in" o% t(e trial !o&rt, in!l&#in" t(eir ae+ent o% t(e -itnee<
!re#i.ilit$, are entitle# to "reat -ei"(t an# repe!t .$ t(e S&pre+e Co&rt, parti!&larl$ -(en t(e CA a%%ir+e#
&!( %in#in".
26
A%ter all, t(e trial !o&rt i in t(e .et poition to #eter+ine t(e 4al&e an# -ei"(t o% t(e
teti+onie o% -itnee.
27
;(e a.en!e o% an$ (o-in" t(at t(e trial !o&rt plainl$ o4erloo8e# !ertain %a!t
o% &.tan!e an# 4al&e t(at, i% !oni#ere#, +i"(t a%%e!t t(e re&lt o% t(e !ae, or t(at it ae+ent -a
ar.itrar$, i+pel t(e Co&rt to #e%er to t(e trial !o&rt< #eter+ination a!!or#in" !re#i.ilit$ to t(e proe!&tion
e4i#en!e.
Cn#er t(e lat para"rap( o% Se!tion 6 o% R.A. No. 8042, ille"al re!r&it+ent (all .e !oni#ere# an o%%ene
in4ol4in" e!ono+i! a.ota"e i% !o++itte# in lar"e !ale, viz, !o++itte# a"aint t(ree or +ore peron
in#i4i#&all$ or a a "ro&p. =n t(e preent !ae, %i4e !o+plainant teti%ie# a"aint appellant< a!t o% ille"al
re!r&it+ent, t(ere.$ ren#erin" (i a!t tanta+o&nt to e!ono+i! a.ota"e. Cn#er Se!tion 7 /.0 o% R.A. No.
8042, t(e penalt$ o% li%e i+prion+ent an# a %ine o% not le t(an P500,000.00 nor +ore
t(an P1,000.000.00 (all .e i+poe# i% ille"al re!r&it+ent !ontit&te e!ono+i! a.ota"e.
;(&, t(e R;C an# t(e CA !orre!tl$ %o&n# appellant "&ilt$ .e$on# reaona.le #o&.t o% lar"e !ale ille"al
re!r&it+ent.
7HEREFORE, t(e appeal i DISMISSED. ;(e ,e!iion #ate# A&"&t 31, 2995 o% t(e Co&rt o% Appeal
a%%ir+in" t(e !on4i!tion o% appellant Antonio No"ra %or lar"e !ale ille"al re!r&it+ent &n#er Se!tion 6 /+0
an# 7 /.0 o% Rep&.li! A!t No. 8042 i AFFIRMED
LEONIDES MERCADO, ,#2,#%#n0#d .- "$% "#$,% Ra7;&#) D. M#,7ad', J$++- D. M#,7ad', H#n,- D.
M#,7ad', L'&,$7a, D. M#,7ad' and V$,*$)$' D. M#,7ad', petitioners,
vs.
COURT OF APPEALS and SAN MIGUEL CORPORATION, respondents.
R E S O D # I O N
CORONA, J.
eonides <er"ado had been distributin! respondent San <i!uel Corporation9s %S<C9s& beer produ"ts in Fuiapo,
<anila sin"e *43.. In *44*, S<C e>tended to hi$ a P..2 $illion "redit line allowin! hi$ to withdraw !oods on
"redit. #o se"ure his pur"hases, <er"ado assi!ned three China Ban'in! Corporation %CBC& "ertifi"ates of deposit
a$ountin! to P2 $illion1 to S<C and e>e"uted a "ontinuin! hold0out a!ree$ent statin!=
/ny de$and $ade by AS<CB on ACBCB, "lai$in! default on $yCour part shall be "on"lusive on ACBCB and shall serve
as absolute authority for ACBCB to en"ash the ACBC "ertifi"ates of depositB in a""ordan"e with the third para!raph of
this @old0Out /!ree$ent, whether or not ICwe have in fa"t defaulted on any of $yCour obli!ations with AS<CB, it
bein! understood that the issue of whether or not there was fa"tual default $ust be threshed out solely between $eCus
and AS<CB
@e also sub$itted three surety bonds fro$ Eastern /ssuran"e and Surety Corporation %E/SCO& totalin! P+.3
$illion.2
On -ebruary *,, *44+, S<C notified CBC that <er"ado failed to pay for the ite$s he withdrew on "redit.
Conse6uently, "itin! the "ontinuin! hold0out a!ree$ent, it as'ed CBC to release the pro"eeds of the assi!ned
"ertifi"ates of deposit. CBC approved S<B9s re6uest and infor$ed <er"ado.
On <ar"h +, *44+, <er"ado filed an a"tion to annul the "ontinuin! hold0out a!ree$ent and deed of assi!n$ent in the
Re!ional #rial Court %R#C& of <anila, Bran"h 22.3 @e "lai$ed that the "ontinuin! hold0out a!ree$ent allowed
forfeiture without the benefit of fore"losure. It was therefore void pursuant to /rti"le +,55 of the Civil
Code.4<oreover, <er"ado ar!ued that he had already settled his re"ent pur"hases on "redit but S<C erroneously
applied the said pay$ents to his old a""ounts not "overed by the "ontinuin! hold0out a!ree$ent % i.e.# pur"hases $ade
prior to the e>tension of the "redit line&.
On <ar"h *5, *44+, S<C filed its answer with "ounter"lai$ a!ainst <er"ado. It "ontended that <er"ado delivered
only two CBC "ertifi"ates of deposit a$ountin! to P8.2 $illion5 and asserted that the e>e"ution of the "ontinuin!
hold0out a!ree$ent and deed of assi!n$ent was a re"o!ni7ed business pra"ti"e. -urther$ore, be"ause <er"ado
ad$itted his outstandin! liabilities, S<C sou!ht pay$ent of the lees produ"ts he withdrew %or pur"hased on "redit&
worth P.,835,*2)..2.6
On /pril +), *44+, S<C filed a third0party "o$plaint a!ainst E/SCO.7 It sou!ht to "olle"t the pro"eeds of the surety
bonds sub$itted by <er"ado.
On Septe$ber *8, *448, <er"ado filed an ur!ent $anifestation and $otion see'in! the dis$issal of the "o$plaint. @e
"lai$ed that he was no lon!er interested in annullin! the "ontinuin! hold0out a!ree$ent and deed of assi!n$ent. #he
R#C, however, denied the $otion.8 Instead, it set the "ase for pre0trial. #hereafter, trial ensued.
Durin! trial, <er"ado a"'nowled!ed the a""ura"y of S<C9s "o$putation of his outstandin! liability as of /u!ust *2,
*44*. #hus, the R#C dis$issed the "o$plaint and ordered <er"ado and E/SCO %to the e>tent of P+.3 $illion or the
value of its bonds& to :ointly and severally pay S<C the a$ount of P.,835,*2)..2.9
/!!rieved, <er"ado and E/SCO appealed to the Court of /ppeals %C/&10 insistin! that <er"ado did not default in
the pay$ent of his obli!ations to S<C.
On De"e$ber *8, +,,8, the C/ affir$ed the R#C de"ision in toto.11 <er"ado and E/SCO both $oved for
re"onsideration but their respe"tive $otions were denied.12
On O"tober +5, +,,2, E/SCO filed a petition for review on "ertiorari in this Court 13 but eventually a!reed to settle
its liability with S<C.14 #he petition was ter$inated on Septe$ber *4, +,,..15
<eanwhile, <er"ado passed away and was substituted by his heirs, petitioners Ra"6uel D. <er"ado, (i$$y D.
<er"ado, @enry D. <er"ado, ouri"ar D. <er"ado and Gir!ilio D. <er"ado.
Petitioners subse6uently filed this petition assertin! that the C/ erred in affir$in! the R#C de"ision in toto. #he said
de"ision %insofar as it ordered <er"ado to pay S<C P.,835,*2)..2& was void. S<C9s "ounter"lai$ was per$issive in
nature. Inas$u"h as S<C did not pay do"'et fees, the R#C never a"6uired :urisdi"tion over the "ounter"lai$.
?e deny the petition.
/ "ounter"lai$ %or a "lai$ whi"h a defendin! party $ay have a!ainst any party&16 $ay be "o$pulsory17 or
per$issive. / "ounter"lai$ that %*& arises out of %or is ne"essarily "onne"ted with& the transa"tion or o""urren"e that is
the sub:e"t $atter of the opposin! party9s "lai$; %+& falls within the :urisdi"tion of the "ourt and %)& does not re6uire
for its ad:udi"ation the presen"e of third parties over who$ the "ourt "annot a"6uire :urisdi"tion, is
"o$pulsory.18 Otherwise, a "ounter"lai$ is $erely per$issive.
?hen <er"ado sou!ht to annul the "ontinuin! hold0out a!ree$ent and deed of assi!n$ent %whi"h he e>e"uted as
se"urity for his "redit pur"hases&, he in effe"t sou!ht to be freed fro$ the$. ?hile he ad$itted havin! outstandin!
obli!ations, he nevertheless asserted that those were not "overed by the assailed a""essory "ontra"ts. -or its part, aside
fro$ invo'in! the validity of the said a!ree$ents, S<C therefore sou!ht to "olle"t the pay$ent for the value of !oods
<er"ado pur"hased on "redit. #hus, <er"ado9s "o$plaint and S<C9s "ounter"lai$ both tou"hed the issues of whether
the "ontinuin! hold0out a!ree$ent and deed of assi!n$ent were valid and whether <er"ado had outstandin! liabilities
to S<C. #he sa$e eviden"e would essentially support or refute <er"ado9s "lai$ and S<C9s "ounter"lai$.
Based on the fore!oin!, had these issues been tried separately, the efforts of the R#C and the parties would have had
to be dupli"ated. Clearly, S<C9s "ounter"lai$, bein! lo!i"ally related to <er"ado9s "lai$, was "o$pulsory in
nature.19 Conse6uently, the pay$ent of do"'et fees was not ne"essary for the R#C to a"6uire :urisdi"tion over the
sub:e"t $atter.
WHEREFORE, the petition is hereby DENIED.
ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW NAVIGATION CO., INC.
GR No. 167614 March 24, 2009
E !ac
"ACTS#
$%&'&'o%r A&o'o S%rrao (a) h'r%* !+ r%),o*%&) Ga--a& Mar'&'.% S%r/'c%), Ic. a* Mar-o( Na/'0a&'o Co.,
Ic., 1*%r a $OEA2a,,ro/%* co&rac& o3 %.,-o+.%& 3or 12 .o&h), a) Ch'%3 O33'c%r, ('&h &h% !a)'c .o&h-+ )a-ar+
o3 4S51,400, ,-1) 57006.o&h o/%r&'.% ,a+, a* 7 *a+) ,a'* /aca&'o -%a/% ,%r .o&h.
O March 19, 1997, &h% *a&% o3 h') *%,ar&1r%, S%rrao (a) co)&ra'%* &o acc%,& a *o(0ra*%* %.,-o+.%&
co&rac& 3or &h% ,o)'&'o o3 S%co* O33'c%r ('&h a .o&h-+ )a-ar+ o3 4S51,000 1,o &h% a))1rac% a*
r%,r%)%&a&'o o3 r%),o*%&) &ha& h% (o1-* !% Ch'%3 O33'c%r !+ &h% %* o3 A,r'- 1997.
R%),o*%&) *'* o& *%-'/%r o &h%'r ,ro.')% &o .a8% S%rrao Ch'%3 O33'c%r. 9%c%, S%rrao r%31)%* &o )&a+ o a)
)%co* O33'c%r a* (a) r%,a&r'a&%* &o &h% $h'-',,'%) o Ma+ 26, 1997, )%r/'0 o-+ &(o :2; .o&h) a* )%/% :7;
*a+) o3 h') co&rac&, -%a/'0 a 1%<,'r%* ,or&'o o3 '% :9; .o&h) a* &(%&+2&hr%% :2=; *a+).
S%rrao 3'-%* ('&h &h% La!or Ar!'&%r :LA; a Co.,-a'& a0a')& r%),o*%&) 3or co)&r1c&'/% *').'))a- a* 3or
,a+.%& o3 h') .o%+ c-a'.) ' &h% &o&a- a.o1& o3 4S526,442.7= :!a)%* o &h% co.,1&a&'o o3 52>906.o&h
3ro. ?1% 1997 &o "%!r1ar+ 199, 541=.90 3or March 1997, a* 51640 3or March 1999; a) (%-- a) .ora- a*
%<%.,-ar+ *a.a0%).
Th% LA *%c-ar%* &h% ,%&'&'o%r@) *').'))a- '--%0a- a* a(ar*%* h'. 4S57,770, r%,r%)%&'0 h') )a-ara+ 3or &hr%% :=;
.o&h) o3 &h% 1%<,'r%* ,or&'o o3 &h% a3or%)a'* co&rac& o3 %.,-o+.%&, ,-1) 54> 3or )a-ar+ *'33%r%&'a- a* 3or
a&&or%+@) 3%%) %A1'/a-%& &o 10B o3 &h% &o&a- a.o1&C ho(%/%r, o co.,%)a&'o 3or *a.a0%) a) ,ra+%* (a)
a(ar*%*.
O a,,%a-, &h% NLRC .o*'3'%* &h% LA *%c')'o a* a(ar*%* S%rrao 54669.>0, r%,r%)%&'0 &hr%% :=; .o&h)
)a-ar+ a& 514006.o&h, ,-1) 44> )a-ar+ *'33%r%&'a- a* 10B 3or a&&or%+@) 3%%). Th') *%c')'o (a) !a)%* o &h%
,ro/')'o o3 RA 7042, (h'ch (a) .a*% '&o -a( o ?1-+ 1>, 199>.
S%rrao 3'-%* a Mo&'o 3or $ar&'a- R%co)'*%ra&'o, !1& &h') &'.% h% A1%)&'o%* &h% co)&'&1&'oa-'&+ o3 &h% -a)& c-a1)%
' &h% >&h ,ara0ra,h o3 S%c&'o 10 o3 RA 7042, (h'ch r%a*)#
S%c. 10. Mo%+ C-a'.). < < < I ca)% o3 &%r.'a&'o o3 o/%r)%a) %.,-o+.%& ('&ho1& D1)&, /a-'* or a1&hor'E%*
ca1)% a) *%3'%* !+ -a( or co&rac&, &h% (or8%r) )ha-- !% %&'&-%* &o &h% 31-- r%'.!1r)%.%& o3 h') ,-ac%.%& 3%%
('&h '&%r%)& o3 &(%-/% ,%rc%& :12B; ,%r a1., ,-1) h') )a-ar'%) 3or &h% 1%<,'r%* ,or&'o o3 h') %.,-o+.%&
co&rac& or 3or &hr%% :=; .o&h) 3or %/%r+ +%ar o3 &h% 1%<,'r%* &%r., (h'ch%/%r ') -%)).
Th% NLRC *%'%* &h% Mo&'oC h%c%, S%rrao 3'-%* a $%&'&'o 3or C%r&'orar' ('&h &h% Co1r& o3 A,,%a-) :CA;,
r%'&%ra&'0 &h% co)&'&1&'oa- cha--%0% a0a')& &h% )1!D%c& c-a1)%. Th% CA a33'r.%* &h% NLRC r1-'0 o &h% r%*1c&'o
o3 &h% a,,-'ca!-% )a-ar+ ra&%, !1& )8'r&%* &h% co)&'&1&'oa- '))1% ra')%* !+ h%r%' ,%&'&'o%r S%rrao.
ISS4ES#
1. Wh%&h%r or o& &h% )1!D%c& c-a1)% /'o-a&%) S%c&'o 10, Ar&'c-% III o3 &h% Co)&'&1&'o o o2'.,a'r.%& o3
co&rac&)C
2. Wh%&h%r or o& &h% )1!D%c& c-a1)% /'o-a&% S%c&'o 1, Ar&'c-% III o3 &h% Co)&'&1&'o, a* S%c&'o 17, Ar&'c-% II a*
S%c&'o =, Ar&'c-% FIII o -a!or a) a ,ro&%c&%* )%c&or.
9ELD#
O &h% 3'r)& '))1%.
Th% a)(%r ') ' &h% %0a&'/%. $%&'&'o%r@) c-a'. &ha& &h% )1!D%c& c-a1)% 1*1-+ '&%r3%r%) ('&h &h% )&',1-a&'o) ' h')
co&rac& o &h% &%r. o3 h') %.,-o+.%& a* &h% 3'<%* )a-ar+ ,ac8a0% h% ('-- r%c%'/% ') o& &%a!-%.
S%c&'o 10, Ar&'c-% III o3 &h% Co)&'&1&'o ,ro/'*%)# No -a( '.,a'r'0 &h% o!-'0a&'o o3 co&rac&) )ha-- !% ,a))%*.
Th% ,roh'!'&'o ') a-'0%* ('&h &h% 0%%ra- ,r'c',-% &ha& -a() %(-+ %ac&%* ha/% o-+ a ,ro),%c&'/% o,%ra&'o, a*
cao& a33%c& ac&) or co&rac&) a-r%a*+ ,%r3%c&%*C ho(%/%r, a) &o -a() a-r%a*+ ' %<')&%c%, &h%'r ,ro/')'o) ar% r%a*
'&o co&rac&) a* *%%.%* a ,ar& &h%r%o3. Th1), &h% o2'.,a'r.%& c-a1)% 1*%r S%c&'o 10, Ar&'c-% II ') -'.'&%* '
a,,-'ca&'o &o -a() a!o1& &o !% %ac&%* &ha& (o1-* ' a+ (a+ *%ro0a&% 3ro. %<')&'0 ac&) or co&rac&) !+
%-ar0'0, a!r'*0'0 or ' a+ .a%r cha0'0 &h% '&%&'o o3 &h% ,ar&'%) &h%r%&o.
A) a,&-+ o!)%r/%* !+ &h% OSG, &h% %ac&.%& o3 R.A. No. 7042 ' 199> ,r%c%*%* &h% %<%c1&'o o3 &h% %.,-o+.%&
co&rac& !%&(%% ,%&'&'o%r a* r%),o*%&) ' 1997. 9%c%, '& cao& !% ar01%* &ha& R.A. No. 7042, ,ar&'c1-ar-+
&h% )1!D%c& c-a1)%, '.,a'r%* &h% %.,-o+.%& co&rac& o3 &h% ,ar&'%). Ra&h%r, (h% &h% ,ar&'%) %<%c1&%* &h%'r 1997
%.,-o+.%& co&rac&, &h%+ (%r% *%%.%* &o ha/% 'cor,ora&%* '&o '& a-- &h% ,ro/')'o) o3 R.A. No. 7042.
G1& %/% '3 &h% Co1r& (%r% &o *')r%0ar* &h% &'.%-'%, &h% )1!D%c& c-a1)% .a+ o& !% *%c-ar%* 1co)&'&1&'oa- o &h%
0ro1* &ha& '& '.,'0%) o &h% '.,a'r.%& c-a1)%, 3or &h% -a( (a) %ac&%* ' &h% %<%rc')% o3 &h% ,o-'c% ,o(%r o3 &h%
S&a&% &o r%01-a&% a !1)'%)), ,ro3%))'o or ca--'0, ,ar&'c1-ar-+ &h% r%cr1'&.%& a* *%,-o+.%& o3 O"W), ('&h &h%
o!-% %* ' /'%( o3 %)1r'0 r%),%c& 3or &h% *'0'&+ a* (%--2!%'0 o3 O"W) (h%r%/%r &h%+ .a+ !% %.,-o+%*.
$o-'c% ,o(%r -%0')-a&'o) a*o,&%* !+ &h% S&a&% &o ,ro.o&% &h% h%a-&h, .ora-), ,%ac%, %*1ca&'o, 0oo* or*%r, )a3%&+,
a* 0%%ra- (%-3ar% o3 &h% ,%o,-% ar% 0%%ra--+ a,,-'ca!-% o& o-+ &o 31&1r% co&rac&) !1& %/% &o &ho)% a-r%a*+ '
%<')&%c%, 3or a-- ,r'/a&% co&rac&) .1)& +'%-* &o &h% )1,%r'or a* -%0'&'.a&% .%a)1r%) &a8% !+ &h% S&a&% &o
,ro.o&% ,1!-'c (%-3ar%.
O &h% )%co* '))1%.
Th% a)(%r ') ' &h% a33'r.a&'/%.
S%c&'o 1, Ar&'c-% III o3 &h% Co)&'&1&'o 01ara&%%)# No ,%r)o )ha-- !% *%,r'/%* o3 -'3%, -'!%r&+, or ,ro,%r&+ ('&ho1&
*1% ,roc%)) o3 -a( or )ha-- a+ ,%r)o !% *%'%* &h% %A1a- ,ro&%c&'o o3 &h% -a(.
S%c&'o 17, Ar&'c-% II a* S%c&'o =, Ar&'c-% FIII accor* a-- .%.!%r) o3 &h% -a!or )%c&or, ('&ho1& *')&'c&'o a) &o
,-ac% o3 *%,-o+.%&, 31-- ,ro&%c&'o o3 &h%'r r'0h&) a* (%-3ar%.
To "'-','o (or8%r), &h% r'0h&) 01ara&%%* 1*%r &h% 3or%0o'0 co)&'&1&'oa- ,ro/')'o) &ra)-a&% &o %coo.'c
)%c1r'&+ a* ,ar'&+# a-- .o%&ar+ !%%3'&) )ho1-* !% %A1a--+ %Do+%* !+ (or8%r) o3 )'.'-ar ca&%0or+, (h'-% a--
.o%&ar+ o!-'0a&'o) )ho1-* !% !or% !+ &h%. ' %A1a- *%0r%%C o% )ho1-* !% *%'%* &h% ,ro&%c&'o o3 &h% -a()
(h'ch ') %Do+%* !+, or ),ar%* &h% !1r*% '.,o)%* o, o&h%r) ' -'8% c'rc1.)&ac%).
S1ch r'0h&) ar% o& a!)o-1&% !1& )1!D%c& &o &h% 'h%r%& ,o(%r o3 Co0r%)) &o 'cor,ora&%, (h% '& )%%) 3'&, a
)+)&%. o3 c-a))'3'ca&'o '&o '&) -%0')-a&'oC ho(%/%r, &o !% /a-'*, &h% c-a))'3'ca&'o .1)& co.,-+ ('&h &h%)%
r%A1'r%.%&)# 1; '& ') !a)%* o )1!)&a&'a- *')&'c&'o)C 2; '& ') 0%r.a% &o &h% ,1r,o)%) o3 &h% -a(C =; '& ') o&
-'.'&%* &o %<')&'0 co*'&'o) o-+C a* 4; '& a,,-'%) %A1a--+ &o a-- .%.!%r) o3 &h% c-a)).
Th%r% ar% &hr%% -%/%-) o3 )cr1&'+ a& (h'ch &h% Co1r& r%/'%() &h% co)&'&1&'oa-'&+ o3 a c-a))'3'ca&'o %.!o*'%* ' a
-a(# a; &h% *%3%r%&'a- or ra&'oa- !a)') )cr1&'+ ' (h'ch &h% cha--%0%* c-a))'3'ca&'o %%*) o-+ !% )ho( &o !%
ra&'oa--+ r%-a&%* &o )%r/'0 a -%0'&'.a&% )&a&% '&%r%)&C !; &h% .'**-%2&'%r or '&%r.%*'a&% )cr1&'+ ' (h'ch &h%
0o/%r.%& .1)& )ho( &ha& &h% cha--%0%* c-a))'3'ca&'o )%r/%) a '.,or&a& )&a&% '&%r%)& a* &ha& &h%
c-a))'3'ca&'o ') a& -%a)& )1!)&a&'a--+ r%-a&%* &o )%r/'0 &ha& '&%r%)&C a* c; )&r'c& D1*'c'a- )cr1&'+ ' (h'ch a
-%0')-a&'/% c-a))'3'ca&'o (h'ch '.,%r.'))'!-+ '&%r3%r%) ('&h &h% %<%rc')% o3 a 31*a.%&a- r'0h& or o,%ra&%) &o &h%
,%c1-'ar *')a*/a&a0% o3 a )1),%c& c-a)) ') ,r%)1.%* 1co)&'&1&'oa-, a* &h% !1r*% ') 1,o &h% 0o/%r.%& &o
,ro/% &ha& &h% c-a))'3'ca&'o ') %c%))ar+ &o ach'%/% a co.,%--'0 )&a&% '&%r%)& a* &ha& '& ') &h% -%a)& r%)&r'c&'/%
.%a) &o ,ro&%c& )1ch '&%r%)&.
4,o c1r)or+ r%a*'0, &h% )1!D%c& c-a1)% a,,%ar) 3ac'a--+ %1&ra-, 3or '& a,,-'%) &o a-- O"W). 9o(%/%r, a c-o)%r
%<a.'a&'o r%/%a-) &ha& &h% )1!D%c& c-a1)% ha) a *')cr'.'a&or+ '&%& a0a')&, a* a '/'*'o1) '.,ac& o, O"W)
a& &(o -%/%-)#
"'r)&, O"W) ('&h %.,-o+.%& co&rac&) o3 -%)) &ha o% +%ar /')2H2/') O"W) ('&h %.,-o+.%& co&rac&) o3 o% +%ar
or .or%C
S%co*, a.o0 O"W) ('&h %.,-o+.%& co&rac&) o3 .or% &ha o% +%arC a*
Th'r*, O"W) /')2H2/') -oca- (or8%r) ('&h 3'<%*2,%r'o* %.,-o+.%&C
I )1., ,r'or &o R.A. No. 7042, O"W) a* -oca- (or8%r) ('&h 3'<%*2&%r. %.,-o+.%& (ho (%r% '--%0a--+ *')char0%*
(%r% &r%a&%* a-'8% ' &%r.) o3 &h% co.,1&a&'o o3 &h%'r .o%+ c-a'.)# &h%+ (%r% 1'3or.-+ %&'&-%* &o &h%'r )a-ar'%)
3or &h% %&'r% 1%<,'r%* ,or&'o) o3 &h%'r co&rac&). G1& ('&h &h% %ac&.%& o3 R.A. No. 7042, ),%c'3'ca--+ &h%
a*o,&'o o3 &h% )1!D%c& c-a1)%, '--%0a--+ *').'))%* O"W) ('&h a 1%<,'r%* ,or&'o o3 o% +%ar or .or% ' &h%'r
%.,-o+.%& co&rac& ha/% )'c% !%% *'33%r%&-+ &r%a&%* ' &ha& &h%'r .o%+ c-a'.) ar% )1!D%c& &o a =2.o&h ca,,
(h%r%a) o )1ch -'.'&a&'o ') '.,o)%* o -oca- (or8%r) ('&h 3'<%*2&%r. %.,-o+.%&.
Th% Co1r& coc-1*%) &ha& &h% )1!D%c& c-a1)% co&a') a )1),%c& c-a))'3'ca&'o ' &ha&, ' &h% co.,1&a&'o o3 &h%
.o%&ar+ !%%3'&) o3 3'<%*2&%r. %.,-o+%%) (ho ar% '--%0a--+ *')char0%*, '& '.,o)%) a =2.o&h ca, o &h% c-a'. o3
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co.,%--'0 )&a&% '&%r%)& ') o*'o1).
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('&ho1& '3r'0'0 o &h% co)&'&1&'oa- r'0h&) o3 O"W).
Th% $OEA R1-%) a* R%01-a&'o) Go/%r'0 &h% R%cr1'&.%& a* E.,-o+.%& o3 La*2Ga)%* O/%r)%a) Wor8%r),
*a&%* "%!r1ar+ 4, 2002, '.,o)%) a*.'')&ra&'/% *')c',-'ar+ .%a)1r%) o %rr'0 3or%'0 %.,-o+%r) (ho *%3a1-& o
&h%'r co&rac&1a- o!-'0a&'o) &o .'0ra& (or8%r) a*6or &h%'r $h'-',,'% a0%&). Th%)% *')c',-'ar+ .%a)1r%) ra0%
3ro. &%.,orar+ *')A1a-'3'ca&'o &o ,r%/%&'/% )1),%)'o. Th% $OEA R1-%) a* R%01-a&'o) Go/%r'0 &h%
R%cr1'&.%& a* E.,-o+.%& o3 S%a3ar%r), *a&%* Ma+ 2=, 200=, co&a') )'.'-ar a*.'')&ra&'/% *')c',-'ar+
.%a)1r%) a0a')& %rr'0 3or%'0 %.,-o+%r).
R%)or& &o &h%)% a*.'')&ra&'/% .%a)1r%) ') 1*o1!&%*-+ &h% -%)) r%)&r'c&'/% .%a) o3 a'*'0 -oca- ,-ac%.%&
a0%c'%) ' %3orc'0 &h% )o-'*ar+ -'a!'-'&+ o3 &h%'r 3or%'0 ,r'c',a-).
Th1), &h% )1!D%c& c-a1)% ' &h% >&h ,ara0ra,h o3 S%c&'o 10 o3 R.A. No. 7042 ') /'o-a&'/% o3 &h% r'0h& o3 ,%&'&'o%r
a* o&h%r O"W) &o %A1a- ,ro&%c&'o.
Th% )1!D%c& c-a1)% Ior 3or &hr%% .o&h) 3or %/%r+ +%ar o3 &h% 1%<,'r%* &%r., (h'ch%/%r ') -%))J ' &h% >&h
,ara0ra,h o3 S%c&'o 10 o3 R%,1!-'c Ac& No. 7042 ') DECLARED 4NCONSTIT4TIONAL.
BECMEN SERVICE E=PORTER AND PROMOTION, INC., Petitioner,
vs.
SPOUSES SIMPLICIO and MILA CUARESMA >(', and $n .#"a)( '( 0"#$, da&*"0#,, Ja%+$n G. C&a,#%+a?,
WHITE FALCON SERVICES, INC. and JAIME ORTIZ >P,#%$d#n0,W"$0# Fa)7'n S#,/$7#%, In7.?, Respondents.
> 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0>
G.R. N'%. 86:3@6-@@ A2,$) A, 355@
SPOUSES SIMPLICIO and MILA CUARESMA >(', and $n .#"a)( '( 0"#$, da&*"0#,, Ja%+$n G.
C&a,#%+a?,Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICE E=PORTER AND PROMOTION,
INC., Respondents.
D E C I S I O N
YNARES-SANTIAGO, J.:
#hese "onsolidated petitions assail the /$ended De"ision1 of the Court of /ppeals dated <ay *8, +,,5 in C/01.R.
SP No. 5,3*4 and C/01.R. SP No. 5*,), findin! ?hite -al"on Servi"es, In". and Be"$en Servi"e E>porter and
Pro$otion, In". solidarily liable to inde$nify spouses Si$pli"io and <ila Cuares$a the a$ount of DSL8,353..) in
a"tual da$a!es with interest.
On (anuary 3, *44., (as$in Cuares$a %(as$in& was deployed by Be"$en Servi"e E>porter and Pro$otion,
In".2%Be"$en& to serve as assistant nurse in /l0Bir' @ospital in the Hin!do$ of Saudi /rabia %HS/&, for a "ontra"t
duration of three years, with a "orrespondin! salary of DSL+8..,, per $onth.
Over a year later, she died alle!edly of poisonin!.
(essie -a:ardo, a "o0wor'er of (as$in, narrated that on (une +*, *445, (as$in was found dead by a fe$ale "leaner
lyin! on the floor inside her dor$itory roo$ with her $outh foa$in! and s$ellin! of poison.3
Based on the poli"e report and the $edi"al report of the e>a$inin! physi"ian of the /l0Bir' @ospital, who "ondu"ted
an autopsy of (as$in9s body, the li'ely "ause of her death was poisonin!. #hus=
/""ordin! to letter No. *44, dated +..+.*8*4@, issued by /l0Bir' Poli"e Station, for e>a$inin! the "orpse of (as$in
Cuares$a, *+.+, P.<. +..+.*8*4@, Sunday, at /l0Bir' @ospital.
*. #he Poli"e Report on the Death
+. #he <edi"al Dia!nosis
Se>= -e$ale /!e= +2 years Rel!= Christian
#he said person was brou!ht to the E$er!en"y Roo$ of the hospital; ti$e *+.+, P.<. and she was
un"ons"ious, blue, no pulse, no respiration and the first aid esd underta'en but without su""ess.
). Dia!nosis and Opinion= @alt in blood "ir"ulation respiratory syste$ and brain da$a!e due to
ana22a,#n0 2'$%'n$n* B"$7" $% &nd#, $n/#%0$*a0$'n.4
Na$e = (as$in Cuares$a
Se> = -e$ale
<arital Status = Sin!le Nationality= Philipino %si"&
Reli!ion = Christian
Profession = Nurse
/ddress = /l0Bir' 1enrl. @ospital Birth Pla"e= #he Philippines
On +..+.*8*4@, Dr. #ari6 /bdul$inne$ and Dr. /sho'i Ho$ar, both have e>a$ined the dead body of (as$in
Cuares$a, at *+.+, P.<., Sunday, ++.+.*8*54@, and the result was=
*. Report of the Poli"e on the death
+. <edi"al E>a$ination= Blue s'in and paleness on the E>tri$es %si"&, total halt to blood "ir"ulation and
respiratory syste$ and brain da$a!e. #here were no e>ternal in:uries. L$C#)- 2'$%'n$n* by ta'in! poisonous
substan"e, -#0 n'0 d#0#,+$n#d. #here was a bad s$ell in the $outh and un'nown to us.5%E$phasis supplied&
(as$in9s body was repatriated to <anila on Septe$ber ), *445. #he followin! day, the City @ealth Offi"er of
Cabanatuan City "ondu"ted an autopsy and the resultin! $edi"al report indi"ated that (as$in died under violent
"ir"u$stan"es, and not poisonin! as ori!inally found by the HS/ e>a$inin! physi"ian. #he City @ealth Offi"er found
that (as$in had abrasions at her inner lip and !u$s; la"erated wounds and abrasions on her left and ri!ht ears;
la"erated wounds and he$ato$a %"ontusions& on her elbows; abrasions and he$ato$a on her thi!h and le!s; intra0
$us"ular he$orrha!e at the anterior "hest; rib fra"ture; pun"ture wounds; and abrasions on the labia $inora of the
va!inal area.6
On <ar"h **, *444, (as$in9s re$ains were e>hu$ed and e>a$ined by the National Bureau of Investi!ation %NBI&.
#he to>i"olo!y report of the NBI, however, tested ne!ative for non0volatile, $etalli" poison and inse"ti"ides.7
Si$pli"io and <ila Cuares$a %the Cuares$as&, (as$in9s parents and her survivin! heirs, re"eived fro$ the Overseas
?or'ers ?elfare /d$inistration %O??/& the followin! a$ounts= P2,,,,,.,, for death benefits; P2,,,,,.,, for loss
of life; P+,,,,,.,, for funeral e>penses; and P*,,,,,.,, for $edi"al rei$burse$ent.
On Nove$ber ++, *444, the Cuares$as filed a "o$plaint a!ainst Be"$en and its prin"ipal in the HS/, Ra:ab W
Silsilah Co$pany %Ra:ab&, "lai$in! death and insuran"e benefits, as well as $oral and e>e$plary da$a!es for
(as$in9s death.8
In their "o$plaint, the Cuares$as "lai$ that (as$in9s death was wor'0related, havin! o""urred at the e$ployer9s
pre$ises;9 that under (as$in9s "ontra"t with Be"$en, she is entitled to Ii6a$a insuran"eI "overa!e; that (as$in is
entitled to "o$pensatory da$a!es in the a$ount of DSL*,),.8,.,,, whi"h is the su$ total of her $onthly salary of
DSL+8..,, per $onth under her e$ploy$ent "ontra"t, $ultiplied by )2 years %or the re$ainin! years of her
produ"tive life had death not supervened at a!e +2, assu$in! that she lived and would have retired at a!e 3,&.
#he Cuares$as assert that as a result of (as$in9s death under $ysterious "ir"u$stan"es, they suffered sleepless ni!hts
and $ental an!uish. #he situation, they "lai$, was a!!ravated by findin!s in the autopsy and e>hu$ation reports
whi"h evidently show that a !rave in:usti"e has been "o$$itted a!ainst the$ and their dau!hter, for whi"h those
responsible should li'ewise be $ade to pay $oral and e>e$plary da$a!es and attorney9s fees.
In their position paper, Be"$en and Ra:ab insist that (as$in "o$$itted sui"ide, "itin! a prior unsu""essful sui"ide
atte$pt so$eti$e in <ar"h or /pril *445 and relyin! on the $edi"al report of the e>a$inin! physi"ian of the /l0Bir'
@ospital. #hey li'ewise deny liability be"ause the Cuares$as already re"overed death and other benefits totalin!
P*),,,,,.,, fro$ the O??/. #hey insist that the Cuares$as are not entitled to Ii6a$a insuran"eI be"ause this refers
to the Iissuan"eI P not insuran"e P of i6a$a, or residen"yCwor' per$it re6uired in the HS/. On the issue of $oral and
e>e$plary da$a!es, they "lai$ that the Cuares$as are not entitled to the sa$e be"ause they have not a"ted with
fraud, nor have they been in bad faith in handlin! (as$in9s "ase.
?hile the "ase was pendin!, Be"$en filed a $anifestation and $otion for substitution alle!in! that Ra:ab ter$inated
their a!en"y relationship and had appointed ?hite -al"on Servi"es, In". %?hite -al"on& as its new re"ruit$ent a!ent
in the Philippines. #hus, ?hite -al"on was i$pleaded as respondent as well, and it adopted and reiterated Be"$en9s
ar!u$ents in the position paper it subse6uently filed.
On -ebruary +5, +,,*, the abor /rbiter rendered a De"ision10 dis$issin! the "o$plaint for la"' of $erit. 1ivin!
wei!ht to the $edi"al report of the /l0Bir' @ospital findin! that (as$in died of poisonin!, the abor /rbiter
"on"luded that (as$in "o$$itted sui"ide. In any "ase, (as$in9s death was not servi"e0"onne"ted, nor was it shown
that it o""urred while she was on duty; besides, her parents have re"eived all "orrespondin! benefits they were entitled
to under the law. In re!ard to da$a!es, the abor /rbiter found no le!al basis to warrant a !rant thereof.
On appeal, the National abor Relations Co$$ission %Co$$ission& reversed the de"ision of the abor /rbiter.
Relyin! on the findin!s of the City @ealth Offi"er of Cabanatuan City and the NBI as "ontained in their autopsy and
to>i"olo!y report, respe"tively, the Co$$ission, via its Nove$ber ++, +,,+ Resolution11 de"lared that, based on
substantial eviden"e addu"ed, (as$in was the vi"ti$ of "o$pensable wor'0"onne"ted "ri$inal a!!ression. It
disre!arded the /l0Bir' @ospital attendin! physi"ian9s report as well as the HS/ poli"e report, findin! the sa$e to be
in"on"lusive. It de"lared that (as$in9s death was the result of an Ia""identI o""urrin! within the e$ployer9s pre$ises
that is attributable to her e$ploy$ent, or to the "onditions under whi"h she lived, and thus arose out of and in the
"ourse of her e$ploy$ent as nurse. #hus, the Cuares$as are entitled to a"tual da$a!es in the for$ of (as$in9s lost
earnin!s, in"ludin! future earnin!s, in the total a$ount of DSL**),,,,.,,. #he Co$$ission, however, dis$issed all
other "lai$s in the "o$plaint.
Be"$en, Ra:ab and ?hite -al"on $oved for re"onsideration, whereupon the Co$$ission issued its O"tober 4, +,,)
Resolution12 redu"in! the award of DSL**),,,,.,, as a"tual da$a!es to DSL5,,,,,.,,.13 #he NRC li'ewise
de"lared Be"$en and ?hite -al"on as solidarily liable for pay$ent of the award.
Be"$en and ?hite -al"on brou!ht separate petitions for "ertiorari to the Court of /ppeals.14 On (une +5, +,,3, the
appellate "ourt rendered its De"ision,15 the dispositive portion of whi"h reads, as follows=
?@ERE-ORE, the sub:e"t petitions are DENIED but in the e>e"ution of the de"ision, it should first be enfor"ed
a!ainst ?hite -al"on Servi"es and then a!ainst Be"$en Servi"es when it is already i$possible, i$pra"ti"al and futile
to !o a!ainst it %?hite -al"on&.
SO ORDERED.16
#he appellate "ourt affir$ed the NRC9s findin!s that (as$in9s death was "o$pensable, the sa$e havin! o""urred at
the dor$itory, whi"h was "ontra"tually provided by the e$ployer. #hus her death should be "onsidered to have
o""urred within the e$ployer9s pre$ises, arisin! out of and in the "ourse of her e$ploy$ent.
Be"$en and ?hite -al"on $oved for re"onsideration. On <ay *8, +,,5, the appellate "ourt rendered the assailed
/$ended De"ision, the dispositive portion of whi"h reads, as follows=
?@ERE-ORE, the $otions for re"onsideration are 1R/N#ED. /""ordin!ly, the award of DSL5,,,,,.,, in a"tual
da$a!es is hereby redu"ed to DSL8,353..) plus interest at the le!al rate "o$puted fro$ the ti$e it be"a$e due until
fully paid. Petitioners are hereby ad:ud!ed :ointly and solidarily liable with the e$ployer for the $onetary awards
with Be"$en Servi"e E>porter and Pro$otions, In". havin! a ri!ht of rei$burse$ent fro$ ?hite -al"on Servi"es,
In".
SO ORDERED.17
In the /$ended De"ision, the Court of /ppeals found that althou!h (as$in9s death was "o$pensable, however, there
is no evidentiary basis to support an award of a"tual da$a!es in the a$ount of DSL5,,,,,.,,. Nor $ay lost earnin!s
be "olle"ted, be"ause the sa$e $ay be "har!ed only a!ainst the perpetrator of the "ri$e or 6uasi0deli"t. Instead, the
appellate "ourt held that (as$in9s benefi"iaries should be entitled only to the su$ e6uivalent of the re$ainder of her
)30$onth e$ploy$ent "ontra"t, or her $onthly salary of DSL+8..,, $ultiplied by nineteen %*4& $onths, with le!al
interest.
Be"$en filed the instant petition for review on "ertiorari %1.R. Nos. *5+4.50.4&. #he Cuares$as, on the other hand,
$oved for a re"onsideration of the a$ended de"ision, but it was denied. #hey are now before us via 1.R. Nos.
*58+45044.
On O"tober 3, +,,5, the Court resolved to "onsolidate 1.R. Nos. *58+45044 with 1.R. Nos. *5+4.50.4.
In 1.R. Nos. *5+4.50.4, Be"$en raises the followin! issues for our resolution=
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# 1/GE <ORE CREDENCE /ND ?EI1@# #O #@E
/D#OPSE REPOR# CONDDC#ED BE #@E C/B/N/#D/N CI#E @E/#@ O--ICE #@/N #@E <EDIC/
/ND POICE REPOR#S ISSDED BE #@E <INIS#RE O- @E/#@ O- HIN1DO< O- S/DDI /R/BI/ /ND
/0BIRH @OSPI#/.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN ON #@E B/SIS O- #@E POSI#ION
P/PERS /ND /NNEJES #@ERE#O INCDDIN1 #@E /D#OPSE REPOR#, I# CONCDDED
#@/# #@E DE/#@ O- (/S<IN CD/RES</ ?/S C/DSED BE CRI<IN/ /11RESSION.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# @ED #@/# #@E DE/#@ O- (/S<IN
CD/RES</ ?/S CO<PENS/BE PDRSD/N# #O #@E RDIN1 O- #@E SDPRE<E CODR#
IN #/ER GS. ENC@/DS#I, 1.R. NO. )2.8*, DECE<BER +,, *4)+, ?@IC@ I# -ODND #O BE
S#I 1OOD /?.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# @ED BEC<EN I/BE -OR #@E
DE/#@ O- (/S<IN CD/RES</ NO#?I#@S#/NDIN1 I#S /D<ISSIONS #@/# IIF/</
INSDR/NCEI ?/S / #EPO1R/P@IC/ ERROR SINCE IIF/</I IS NO# /N INSDR/NCE.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# CONCDDED #@/# #@E DE/#@ O-
(/S<IN ?/S ?ORH RE/#ED.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# @ED BEC<EN I/BE #O
(/S<IN9S BENE-ICI/RIES -OR #@E RE</INDER O- @ER )30<ON#@ CON#R/C#
CO<PD#ED IN #@IS </NNER= <ON#@E S//RE O- DSL+83.3. <D#IPIED BE *4
<ON#@S, #@E RE</INDER O- #@E #ER< O- (/S<IN9S E<POE<EN# CON#R/C#, IS
EFD/ #O DSL8,353..).
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# @ED BEC<EN I/BE #O P/E
IN#ERES# /# #@E E1/ R/#E -RO< #@E #I<E I# ?/S DDE DN#I -DE P/ID.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED ?@EN I# @ED BEC<EN /ND ?@I#E
-/CON (OIN#E /ND SEGER/E I/BE ?I#@ #@E E<POEER NO#?I#@S#/NDIN1
#@E /SSD<P#ION O- I/BII#E EJECD#ED BE ?@I#E -/CON IN -/GOR O- BEC<EN.
On the other hand, in 1.R. Nos. *58+45044, the Cuares$as raise the followin! issues=
%#@E CODR# O- /PPE/S& 1R/GEE ERRED IN /PPEIN1 #@E PROGISIONS O- #@E CIGI CODE
CONSIDERED 1ENER/ /? DESPI#E #@E C/SE BEIN1 COGERED BE E.O. +8., R./. 5,8+ /ND /BOR
CODE CONSIDERED /S SPECI/ /?S.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED IN NO# /PPEIN1 #@E DECE/SED9S -D#DRE
E/RNIN1S ?@IC@ IS %/N& IN@EREN# -/C#OR IN #@E CO<PD#/#ION O- DE/#@
BENE-I#S O- OGERSE/S -IIPINO CON#R/C# ?ORHERS.
%#@E CODR# O- /PPE/S& 1R/GEE ERRED IN REDDCIN1 #@E DE/#@ BENE-I#S
/?/RDED BE NRC CONSIDERED -INDIN1S O- -/C# #@/# C/NNO# BE DIS#DRBED
#@ROD1@ CER#IOR/RI DNDER RDE 32 O- #@E RDES O- CODR#.
#he issue for resolution is whether the Cuares$as are entitled to $onetary "lai$s, by way of benefits and da$a!es,
for the death of their dau!hter (as$in.
#he ter$s and "onditions of (as$in9s *443 E$ploy$ent /!ree$ent whi"h she and her e$ployer Ra:ab freely entered
into "onstitute the law between the$. /s a rule, stipulations in an e$ploy$ent "ontra"t not "ontrary to statutes, publi"
poli"y, publi" order or $orals have the for"e of law between the "ontra"tin! parties. 18 /n e>a$ination of said
e$ploy$ent a!ree$ent shows that it provides for no other $onetary or other benefitsCprivile!es than the followin!=
*. *,),, rials %or DSL+8..,,& $onthly salary;
+. -ree air ti"'ets to HS/ at the start of her "ontra"t and to the Philippines at the end thereof, as well as for
her va"ation at the end of ea"h twenty four0$onth servi"e;
). #ransportation to and fro$ wor';
8. -ree livin! a""o$$odations;
2. -ree $edi"al treat$ent, e>"ept for opti"al and dental operations, plasti" sur!ery "har!es and lenses, and
$edi"al treat$ent obtained outside of HS/;
3. Entry visa fees will be shared e6ually between her and her e$ployer, but the e>itCre0entry visa fees, fees for
I6a$a issuan"e, renewal, repla"e$ent, passport renewal, sponsorship transfer and other liabilities shall be
borne by her;
.. #hirty days paid va"ation leave with round trip ti"'ets to <anila after twenty four0$onths of "ontinuous
servi"e;
5. Ei!ht days publi" holidays per year;
4. #he inde$nity benefit due her at the end of her servi"e will be "al"ulated as per labor laws of HS/.
#hus, the a!ree$ent does not in"lude provisions for insuran"e, or for a""ident, death or other benefits that the
Cuares$as see' to re"over, and whi"h the labor tribunals and appellate "ourt !ranted variably in the !uise of
"o$pensatory da$a!es.
@owever, the absen"e of provisions for so"ial se"urity and other benefits does not $a'e (as$in9s e$ploy$ent
"ontra"t infir$. Dnder HS/ law, her forei!n e$ployer is not obli!ed to provide her these benefits; and neither is
(as$in entitled to $ini$u$ wa!e P unless of "ourse the HS/ labor laws have been a$ended to the opposite effe"t, or
that a bilateral wa!e a!ree$ent has been entered into.
Our ne>t in6uiry is, should (as$in9s death be "onsidered as wor'0"onne"ted and thus "o$pensableO #he eviden"e
indi"ates that it is not. /t the ti$e of her death, she was not on duty, or else eviden"e to the "ontrary would have been
addu"ed. Neither was she within hospital pre$ises at the ti$e. Instead, she was at her dor$itory roo$ on personal
ti$e when she died. Neither has it been shown, nor does the eviden"e su!!est, that at the ti$e she died, (as$in was
perfor$in! an a"t reasonably ne"essary or in"idental to her e$ploy$ent as nurse, be"ause she was at her dor$itory
roo$. It is reasonable to suppose that all her wor' is perfor$ed at the /l0bir' @ospital, and not at her dor$itory roo$.
?e "annot e>pe"t that the forei!n e$ployer should ensure her safety even while she is not on duty. It is not fair to
re6uire e$ployers to answer even for their e$ployees9 personal ti$e away fro$ wor', whi"h the latter are free to
spend of their own "hoosin!. ?hether they "hoose to spend their free ti$e in the pursuit of safe or perilous
underta'in!s, in the "o$pany of friends or stran!ers, lovers or ene$ies, this is not one area whi"h their e$ployers
should be $ade a""ountable for. ?hile we have e$phasi7ed the need to observe offi"ial wor' ti$e stri"tly, 19 what an
e$ployee does on free ti$e is beyond the e$ployer9s sphere of in6uiry.
?hile the Ie$ployer9s pre$isesI $ay be defined very broadly not only to in"lude pre$ises owned by it, but also
pre$ises it leases, hires, supplies or uses,20 we are not prepared to rule that the dor$itory wherein (as$in stayed
should "onstitute e$ployer9s pre$ises as would allow a findin! that death or in:ury therein is "onsidered to have been
in"urred or sustained in the "ourse of or arose out of her e$ploy$ent. #here are "ertainly e>"eptions, 21 but they do
not appear to apply here. <oreover, a "o$plete deter$ination would have to depend on the uni6ue "ir"u$stan"es
obtainin! and the overall fa"tual environ$ent of the "ase, whi"h are here la"'in!.
But, did (as$in "o$$it sui"ideO Ra:ab, Be"$en and ?hite -al"on vehe$ently insist that she did; thus, her heirs $ay
not "lai$ benefits or da$a!es based on "ri$inal a!!ression. On the other hand, the Cuares$as do not believe so.
#he Court "annot subs"ribe to the idea that (as$in "o$$itted sui"ide while halfway into her e$ploy$ent "ontra"t. It
is beyond hu$an "o$prehension that a +20year old -ilipina, in the pri$e of her life and wor'in! abroad with a "han"e
at $a'in! a de"ent livin! with a hi!h0payin! :ob whi"h she "ould not find in her own "ountry, would si$ply "o$$it
sui"ide for no "o$pellin! reason.
#he Saudi poli"e and autopsy reports P whi"h state that (as$in is a li+el-or a,,arent vi"ti$ of poisonin! P
are2a0#n0)- $n7'n7)&%$/#. #hey are thus unreliable as eviden"e.
On the "ontrary, the autopsy report of the Cabanatuan City @ealth Offi"er and the e>hu$ation report of the NBI
"ate!ori"ally and un6ualifiedly show that (as$in sustained e>ternal and internal in:uries, spe"ifi"ally a.,a%$'n% a0
"#, $nn#, )$2 and *&+%; )a7#,a0#d B'&nd% and a.,a%$'n% 'n "#, )#(0 and ,$*"0 #a,%; )a7#,a0#d B'&nd% and
"#+a0'+a >7'n0&%$'n%? 'n "#, #).'B%; a.,a%$'n% and "#+a0'+a 'n "#, 0"$*" and )#*%; $n0,a-+&%7&)a,
"#+',,"a*# a0 0"# an0#,$', 7"#%0; a (,a70&,#d ,$.; 2&n70&,# B'&nd%; and a.,a%$'n% 'n 0"# )a.$a +$n',a '( 0"#
/a*$na) a,#a. #he NBI to>i"olo!y report "a$e up n#*a0$/# 'n 0"# 2,#%#n7# '( 2'$%'n.
/ll these show that (as$in was $anhandled P and possibly raped P prior to her death.
Even if we were to a!ree with the Saudi poli"e and autopsy reports that indi"ate (as$in was poisoned to death, we do
not believe that it was self0indu"ed. If ever (as$in was poisoned, the assailants who beat her up P and possibly raped
her P are "ertainly responsible therefor.
?e are not e>a"tly i!norant of what !oes on with our O-?s. Nor is the rest of the world blind to the realities of life
bein! suffered by $i!rant wor'ers in the hands of so$e forei!n e$ployers. It is in"on"eivable that our -ilipina
wo$en would see' e$ploy$ent abroad and fa"e un"ertainty in a forei!n land, only to "o$$it sui"ide for une>plained
reasons. De"idin! to leave their fa$ily, loved ones, and the "o$fort and safety of ho$e, to wor' in a stran!e land
re6uires unrivaled stren!th and "oura!e. Indeed, $any of our wo$en O-?s who are unfortunate to end up with
undesirable e$ployers have been there $ore ti$es than they "are to, beaten up and bro'en in body P yet they have
re$ained stron! in $ind, refusin! to !ive up the will to live. Raped, burned with "i!arettes, 'i"'ed in the "hest with
sharp hi!h0heeled shoes, starved for days or even wee's, stabbed, slaved with in"essant wor', lo"'ed in their roo$s,
for"ed to serve their $asters na'ed, !rossly debased, dehu$ani7ed and insulted, their spirits fou!ht on and they lived
for the day that they would on"e a!ain be reunited with their fa$ilies and loved ones. #heir bodies surrendered, but
their will to survive re$ained stron!.
It is surprisin!, therefore, that Ra:ab, Be"$en and ?hite -al"on should insist on sui"ide, without even liftin! a fin!er
to help solve the $ystery of (as$in9s death. Bein! in the business of sendin! O-?s to wor' abroad, Be"$en and
?hite -al"on should 'now what happens to so$e of our O-?s. It is i$possible for the$ to be "o$pletely unaware
that "ruelties and inhu$anities are infli"ted on O-?s who are unfortunate to be e$ployed by vi"ious e$ployers, or
upon those who wor' in "o$$unities or environ$ents where they are liable to be"o$e vi"ti$s of "ri$e. By now they
should 'now that our wo$en O-?s do not readily su""u$b to the te$ptation of 'illin! the$selves even when
assaulted, abused, starved, debased and, worst, raped.
Indeed, what we have seen is Ra:ab and Be"$en9s revoltin! s"he$e of "onveniently avoidin! responsibility by
"lin!in! to the absurd theory that (as$in too' her own life. /bandonin! their le!al, $oral and so"ial obli!ation %as
e$ployer and re"ruiter& to assist (as$in9s fa$ily in obtainin! :usti"e for her death, they i$$ediately !ave up on
(as$in9s "ase, whi"h has re$ained under investi!ation as the autopsy and poli"e reports the$selves indi"ate. Instead
of ta'in! the "ud!els for (as$in, who had no relative or representative in the HS/ who would naturally de$and and
see' an investi!ation of her "ase, Ra:ab and Be"$en "hose to ta'e the $ost "onvenient route to avoidin! and denyin!
liability, by "astin! (as$in9s fate to oblivion. It appears fro$ the re"ord that to this date, no follow up of (as$in9s "ase
was ever $ade at all by the$, and they see$ to have e>pediently treated (as$in9s death as a "losed "ase. Despite
bein! !iven the lead via the autopsy and to>i"olo!y reports of the Philippine authorities, they failed and refused to a"t
and pursue :usti"e for (as$in9s sa'e and to restore honor to her na$e.
Indeed, their non"halant and un"arin! attitude $ay be seen fro$ how (as$in9s re$ains were repatriated. No offi"ial
representative fro$ Ra:ab or Be"$en was 'ind enou!h to $a'e personal representations with (as$in9s parents, if only
to e>tend their "ondolen"es or sy$pathies; instead, a $ere "ollea!ue, nurse (essie -a:ardo, was desi!nated to
a""o$pany (as$in9s body ho$e.
Of all life9s tra!edies, the death of one9s own "hild $ust be the $ost painful for a parent. Not 'nowin! why or how
(as$in9s life was snuffed out $a'es the pain doubly unbearable for (as$in9s parents, and further a!!ravated by Ra:ab,
Be"$en, and ?hite -al"on9s baseless insisten"e and a""usation that it was a self0infli"ted death, a $ortal sin by any
reli!ious standard.
#hus we "ate!ori"ally hold, based on the eviden"e; the a"tual e>perien"es of our O-?s; and the resilient and
"oura!eous spirit of the -ilipina that trans"ends the vilest dese"ration of her physi"al self, that (as$in did not "o$$it
sui"ide but a vi"ti$ of $urderous a!!ression.
Ra:ab, Be"$en, and ?hite -al"on9s indifferen"e to (as$in9s "ase has "aused unfatho$able pain and sufferin! upon
her parents. #hey have turned away fro$ their $oral obli!ation, as e$ployer and re"ruiter and as entities laden with
so"ial and "ivi" obli!ations in so"iety, to pursue :usti"e for and in behalf of (as$in, her parents and those she left
behind. Possessed with the resour"es to deter$ine the truth and to pursue :usti"e, they "hose to stand idly for the sa'e
of "onvenien"e and in order that they $ay avoid pe"uniary liability, turnin! a blind eye to the Philippine authorities9
autopsy and to>i"olo!y reports instead of ta'in! a"tion upon the$ as leads in pursuin! :usti"e for (as$in9s death.
#hey have pla"ed their own finan"ial and "orporate interests above their $oral and so"ial obli!ations, and "hose to
se"ure and insulate the$selves fro$ the per"eived responsibility of havin! to answer for and inde$nify (as$in9s heirs
for her death.
Dnder Republi" /"t No. 5,8+ %R./. 5,8+&, or the <i!rant ?or'ers and Overseas -ilipinos /"t of *442, 22 the State
shall, at all ti$es, uphold the di!nity of its "iti7ens whether in "ountry or overseas, in !eneral, and -ilipino $i!rant
wor'ers, in parti"ular.23 #he State shall provide ade6uate and ti$ely so"ial, e"ono$i" and le!al servi"es to -ilipino
$i!rant wor'ers.24 #he ri!hts and interest of distressed25 overseas -ilipinos, in !eneral, and -ilipino $i!rant
wor'ers, in parti"ular, do"u$ented or undo"u$ented, are ade6uately prote"ted and safe!uarded.26
Be"$en and ?hite -al"on, as li"ensed lo"al re"ruit$ent a!en"ies, $iserably failed to abide by the provisions of R./.
5,8+. Re"ruit$ent a!en"ies are e>pe"ted to e>tend assistan"e to their deployed O-?s, espe"ially those in distress.
Instead, they abandoned (as$in9s "ase and allowed it to re$ain unsolved to further their interests and avoid
anti"ipated liability whi"h parents or relatives of (as$in would "ertainly e>a"t fro$ the$. #hey willfully refused to
prote"t and tend to the welfare of the de"eased (as$in, treatin! her "ase as :ust one of those unsolved "ri$es that is
not worth wastin! their ti$e and resour"es on. #he eviden"e does not even show that Be"$en and Ra:ab lifted a
fin!er to provide le!al representation and see' an investi!ation of (as$in9s "ase. ?orst of all, they unne"essarily
tra$pled upon the person and di!nity of (as$in by standin! pat on the ar!u$ent that (as$in "o$$itted sui"ide,
whi"h is a !rave a""usation !iven its un0Christian nature.
?e "annot reasonably e>pe"t that (as$in9s parents should be the ones to a"tively pursue a :ust resolution of her "ase
in the HS/, unless they are provided with the finan"es to underta'e this her"ulean tas'. Sadly, Be"$en and Ra:ab did
not lend any assistan"e at all in this respe"t. #he $ost (as$in9s parents "an do is to "oordinate with Philippine
authorities as $andated under R./. 5,8+, obtain free le!al assistan"e and se"ure the aid of the Depart$ent of -orei!n
/ffairs, the Depart$ent of abor and E$ploy$ent, the POE/ and the O??/ in tryin! to solve the "ase or obtain
relief, in a""ordan"e with Se"tion +)27 of R./. 5,8+. #o our $ind, the Cuares$as did all that was within their power,
short of a"tually flyin! to the HS/. Indeed, the Cuares$as went even further. #o the best of their abilities and
"apa"ities, they ventured to investi!ate (as$in9s "ase on their own= they "aused another autopsy on (as$in9s re$ains
as soon as it arrived to in6uire into the true "ause of her death. Beyond that, they sub:e"ted the$selves to the painful
and distressful e>perien"e of e>hu$in! (as$in9s re$ains in order to obtain another autopsy for the sole purpose of
deter$inin! whether or not their dau!hter was poisoned. #heir 6uest for the truth and :usti"e is e6ually to be e>pe"ted
of all lovin! parents. /ll this ti$e, Ra:ab and Be"$en P instead of e>tendin! their full "ooperation to the Cuares$a
fa$ily P $erely sat on their laurels in see$in! un"on"ern.
In "nterorient Maritime .nter,rises# "nc. v. NLRC,28 a sea$an who was bein! repatriated after his e$ploy$ent
"ontra"t e>pired, failed to $a'e his Ban!'o' to <anila "onne"tin! fli!ht as he be!an to wander the streets of Ban!'o'
ai$lessly. @e was shot to death by #hai poli"e four days after, on a""ount of runnin! a$u"' with a 'nife in hand and
threatenin! to har$ anybody within si!ht. #he e$ployer, sued for death and other benefits as well as da$a!es,
interposed as defense the provision in the seafarer a!ree$ent whi"h provides that Ino "o$pensation shall be payable
in respe"t of any in:ury, in"apa"ity, disability or death resultin! fro$ a willful a"t on his own life by the sea$an.I #he
Court re:e"ted the defense on the view, a$on! others, that the re"ruit$ent a!en"y should have observed so$e
pre"autionary $easures and should not have allowed the sea$an, who was later on found to be $entally ill, to travel
ho$e alone, and its failure to do so rendered it liable for the sea$an9s death. ?e ruled therein that P
#he forei!n e$ployer $ay not have been obli!ated by its "ontra"t to provide a "o$panion for a returnin! e$ployee,
but it "annot deny that it was e>pressly tas'ed by its a!ree$ent to assure the safe return of said wor'er. T"# &n7a,$n*
a00$0&d# d$%2)a-#d .- 2#0$0$'n#,% B"', Cn'B$n* (&))- B#)) 0"a0 $0% #+2)'-## "ad .##n %&((#,$n* (,'+ %'+#
+#n0a) d$%',d#,, n#/#,0"#)#%% %0$)) a))'B#d "$+ 0' 0,a/#) "'+# a)'n#, $% a22a))$n* 0' %a- 0"# )#a%0. S&7" a00$0&d#
"a,C% .a7C 0' an'0"#, 0$+# B"#n 0"# )and#d *#n0,- 2,a70$7a))- 'Bn#d 0"# %#,(%, and d$%2'%#d '( 0"#+ B"#n 0"#
)a00#, "ad *,'Bn ')d, %$7C ', '0"#,B$%# )'%0 0"#$, &%#(&)n#%%.29 %E$phasis supplied&
#hus, $ore than :ust re"ruitin! and deployin! O-?s to their forei!n prin"ipals, re"ruit$ent a!en"ies have e6ually
si!nifi"ant responsibilities. In a forei!n land where O-?s are li'ely to en"ounter uneven if not dis"ri$inatory
treat$ent fro$ the forei!n !overn$ent, and "ertainly a delayed a""ess to lan!ua!e interpretation, le!al aid, and the
Philippine "onsulate, the re"ruit$ent a!en"ies should be the ($,%0 to "o$e to the res"ue of our distressed O-?s sin"e
they 'now the e$ployers and the addresses where they are deployed or stationed. Dpon the$ lies the pri$ary
obli!ation to prote"t the ri!hts and ensure the welfare of our O-?s, whether distressed or not. ?ho else is in a better
position, if not these re"ruit$ent a!en"ies, to render i$$ediate aid to their deployed O-?s abroadO
/rti"le *4 of the Civil Code provides that every person $ust, in the e>er"ise of his ri!hts and in the perfor$an"e of
his duties, a"t with :usti"e, !ive everyone his due, and observe honesty and !ood faith. /rti"le +* of the Code states
that any person who wilfully "auses loss or in:ury to another in a $anner that is "ontrary to $orals, !ood "usto$s or
publi" poli"y shall "o$pensate the latter for the da$a!e. /nd, lastly, /rti"le +8 re6uires that in all "ontra"tual,
property or other relations, when one of the parties is at a disadvanta!e on a""ount of his $oral dependen"e,
i!noran"e, indi!en"e, $ental wea'ness, tender a!e or other handi"ap, the "ourts $ust be vi!ilant for his prote"tion.
Clearly, Ra:ab, Be"$en and ?hite -al"on9s a"ts and o$issions are a!ainst publi" poli"y be"ause they under$ine and
subvert the interest and !eneral welfare of our O-?s abroad, who are entitled to full prote"tion under the law. #hey
set an awful e>a$ple of how forei!n e$ployers and re"ruit$ent a!en"ies should treat and a"t with respe"t to their
distressed e$ployees and wor'ers abroad. #heir shabby and "allous treat$ent of (as$in9s "ase; their un"arin!
attitude; their un:ustified failure and refusal to assist in the deter$ination of the true "ir"u$stan"es surroundin! her
$ysterious death, and instead findin! satisfa"tion in the unreasonable insisten"e that she "o$$itted sui"ide :ust so
they "an "onveniently avoid pe"uniary liability; pla"in! their own "orporate interests above of the welfare of their
e$ployee9s P all these are "ontrary to $orals, !ood "usto$s and publi" poli"y, and "onstitute ta'in! advanta!e of the
poor e$ployee and her fa$ily9s i!noran"e, helplessness, indi!en"e and la"' of power and resour"es to see' the truth
and obtain :usti"e for the death of a loved one.
1ivin! in handily to the idea that (as$in "o$$itted sui"ide, and ada$antly insistin! on it :ust to prote"t Ra:ab and
Be"$en9s $aterial interest P despite eviden"e to the "ontrary P is a!ainst the $oral law and runs "ontrary to the !ood
"usto$ of not denoun"in! one9s fellow$en for alle!ed !rave wron!doin!s that under$ine their !ood na$e and
honor.30
?hether e$ployed lo"ally or overseas, all -ilipino wor'ers en:oy the prote"tive $antle of Philippine labor and so"ial
le!islation, "ontra"t stipulations to the "ontrary notwithstandin!. #his pronoun"e$ent is in 'eepin! with the basi"
publi" poli"y of the State to afford prote"tion to labor, pro$ote full e$ploy$ent, ensure e6ual wor' opportunities
re!ardless of se>, ra"e or "reed, and re!ulate the relations between wor'ers and e$ployers. #his rulin! is li'ewise
rendered i$perative by /rti"le *. of the Civil Code whi"h states that laws whi"h have for their ob:e"t publi" order,
publi" poli"y and !ood "usto$s shall not be rendered ineffe"tive by laws or :ud!$ents pro$ul!ated, or by
deter$inations or "onventions a!reed upon in a forei!n "ountry.31
#he relations between "apital and labor are so i$pressed with publi" interest,32 and neither shall a"t oppressively
a!ainst the other, or i$pair the interest or "onvenien"e of the publi".33 In "ase of doubt, all labor le!islation and all
labor "ontra"ts shall be "onstrued in favor of the safety and de"ent livin! for the laborer.34
#he !rant of $oral da$a!es to the e$ployee by reason of $is"ondu"t on the part of the e$ployer is san"tioned by
/rti"le ++*4 %*,&35 of the Civil Code, whi"h allows re"overy of su"h da$a!es in a"tions referred to in /rti"le +*.36
#hus, in view of the fore!oin!, the Court holds that the Cuares$as are entitled to $oral da$a!es, whi"h Be"$en and
?hite -al"on are :ointly and solidarily liable to pay, to!ether with e>e$plary da$a!es for wanton and oppressive
behavior, and by way of e>a$ple for the publi" !ood.
Private e$ploy$ent a!en"ies are held :ointly and severally liable with the forei!n0based e$ployer for any violation of
the re"ruit$ent a!ree$ent or "ontra"t of e$ploy$ent. #his :oint and solidary liability i$posed by law a!ainst
re"ruit$ent a!en"ies and forei!n e$ployers is $eant to assure the a!!rieved wor'er of i$$ediate and suffi"ient
pay$ent of what is due hi$.37 If the re"ruit$entCpla"e$ent a!en"y is a :uridi"al bein!, the "orporate offi"ers and
dire"tors and partners as the "ase $ay be, shall the$selves be :ointly and solidarily liable with the "orporation or
partnership for the aforesaid "lai$s and da$a!es.38
?hite -al"on9s assu$ption of Be"$en9s liability does not auto$ati"ally result in Be"$en9s freedo$ or release fro$
liability. #his has been ruled in 'B/ *verseas Man,o!er Cor,oration v. NLRC.39 Instead, both Be"$en and ?hite
-al"on should be held liable solidarily, without pre:udi"e to ea"h havin! the ri!ht to be rei$bursed under the provision
of the Civil Code that whoever pays for another $ay de$and fro$ the debtor what he has paid.40
?@ERE-ORE, the /$ended De"ision of the Court of /ppeals dated <ay *8, +,,5 in C/01.R. SP No. 5,3*4 and
C/01.R. SP No. 5*,), is SET ASIDE. RaDa. E S$)%$)a" C'+2an-, W"$0# Fa)7'n S#,/$7#%, In7., B#7+#n S#,/$7#
EF2',0#, and P,'+'0$'n, In7., and 0"#$, 7',2',a0# d$,#70',% and '(($7#,% are found :ointly and solidarily liable
and ORDERED to inde$nify the heirs of (as$in Cuares$a, spouses Si$pli"io and <ila Cuares$a, the followin!
a$ounts=
*& #?O <IION -IGE @DNDRED #@ODS/ND PESOS %P+,2,,,,,,.,,& as $oral da$a!es;
+& #?O <IION -IGE @DNDRED #@ODS/ND PESOS %P+,2,,,,,,.,,& as e>e$plary da$a!es;
)& /ttorney9s fees e6uivalent to ten per"ent %*,Q& of the total $onetary award; and,
8& Costs of suit.
SO ORDERED
SUNACE INTERNATIONAL MANAGEMENT SERVICES, INC.Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, S#7'nd D$/$%$'nG HON. ERNESTO S. DINOPOL, $n "$%
7a2a7$0- a% La.', A,.$0#,, NLRCG NCR, A,.$0,a0$'n B,an7", Q&#H'n C$0- and DIVINA A.
MONTEHERMOZO,Respondents.
D E C I S I O N
CARPIO MORALES, J.
Petitioner, Suna"e International <ana!e$ent Servi"es %Suna"e&, a "orporation duly or!ani7ed and e>istin! under the
laws of the Philippines, deployed to #aiwan Divina /. <onteher$o7o %Divina& as a do$esti" helper under a *+0$onth
"ontra"t effe"tive -ebruary *, *44..1 #he deploy$ent was with the assistan"e of a #aiwanese bro'er, Ed$und ?an!,
President of (et Crown International Co., td.
/fter her *+0$onth "ontra"t e>pired on -ebruary *, *445, Divina "ontinued wor'in! for her #aiwanese e$ployer,
@an! Rui Jion!, for two $ore years, after whi"h she returned to the Philippines on -ebruary 8, +,,,.
Shortly after her return or on -ebruary *8, +,,,, Divina filed a "o$plaint2 before the National abor Relations
Co$$ission %NRC& a!ainst Suna"e, one /delaide Pere7, the #aiwanese bro'er, and the e$ployer0forei!n prin"ipal
alle!in! that she was :ailed for three $onths and that she was underpaid.
#he followin! day or on -ebruary *2, +,,,, abor /rbitration /sso"iate Re!ina #. 1avin issued Su$$ons3 to the
<ana!er of Suna"e, furnishin! it with a "opy of Divina9s "o$plaint and dire"tin! it to appear for $andatory
"onferen"e on -ebruary +5, +,,,.
#he s"heduled $andatory "onferen"e was reset. It appears to have been "on"luded, however.
On /pril 3, +,,,, Divina filed her Position Paper4 "lai$in! that under her ori!inal one0year "ontra"t and the +0year
e>tended "ontra"t whi"h was with the 'nowled!e and "onsent of Suna"e, the followin! a$ounts representin! in"o$e
ta> and savin!s were dedu"ted=
Eear Dedu"tion for In"o$e #a> Dedu"tion for Savin!s
*44. N#*,,82,.,, N#+),*,,.,,
*445 N#4,2,,.,, N#)3,,,,.,,
*444 N#*),),,.,, N#)3,,,,.,,;5
and while the a$ounts dedu"ted in *44. were refunded to her, those dedu"ted in *445 and *444 were not. On even
date, Suna"e, by its ProprietorC1eneral <ana!er <aria uisa Olarte, filed its Gerified /nswer and Position
Paper,6 "lai$in! as follows, 6uoted verbatim=
COMPLAINANT IS NOT ENTITLED FOR THE REFUND OF HER 3: MONTHS SAVINGS
). Co$plainant "ould not any$ore "lai$ nor entitled for the refund of her +8 $onths savin!s as she already too' ba"'
her savin! already last year and the e$ployer did not dedu"t any $oney fro$ her salary, in a""ordan"e with
a Fa%7$+$)# M#%%a*# fro$ the respondent SDN/CE9s e$ployer, (et Crown International Co. td., a >ero!raphi" "opy
of whi"h is herewith atta"hed as ANNE= I3I hereof;
COMPLAINANT IS NOT ENTITLED TO REFUND OF HER 8: MONTHS TA= AND PAYMENT OF
ATTORNEY1S FEES
8. #here is no basis for the !rant of ta> refund to the "o$plainant as the she finished her 'n# -#a, 7'n0,a70 and hen"e,
was not ille!ally dis$issed by her e$ployer. She "ould only lay "lai$ over the ta> refund or $u"h $ore be awarded
of da$a!es su"h as attorney9s fees as said reliefs are available only when the dis$issal of a $i!rant wor'er is without
:ust valid or lawful "ause as defined by law or "ontra"t.
#he rationales behind the award of ta> refund and pay$ent of attorney9s fees is not to enri"h the "o$plainant but to
"o$pensate hi$ for a"tual in:ury suffered. Co$plainant did not suffer in:ury, hen"e, does not deserve to be
"o$pensated for whatever 'ind of da$a!es.
@en"e, the "o$plainant has NO "ause of a"tion a!ainst respondent SDN/CE for $onetary "lai$s, "onsiderin! that
she has been totally paid of all the $onetary benefits due her under her E$ploy$ent Contra"t to her full satisfa"tion.
3. -urther$ore, the ta> dedu"ted fro$ her salary is in "o$plian"e with the #aiwanese law, whi"h respondent
SDN/CE has no "ontrol and "o$plainant has to obey and this @onorable Offi"e has no authorityC:urisdi"tion to
intervene be"ause the power to ta> is a soverei!n power whi"h the #aiwanese 1overn$ent is supre$e in its own
territory. #he soverei!n power of ta>ation of a state is re"o!ni7ed under international law and a$on! soverei!n states.
.. #hat respondent SDN/CE respe"tfully reserves the ri!ht to file supple$ental Gerified /nswer andCor Position
Paper to substantiate its prayer for the dis$issal of the above "ase a!ainst the herein respondent. /ND BE ?/E O- 0
> > > > %E$phasis and unders"orin! supplied&
Rea"tin! to Divina9s Position Paper, Suna"e filed on /pril +2, +,,, an I. . . answer to "o$plainant9s position
paperI7 alle!in! that Divina9s +0year e>tension of her "ontra"t was without its 'nowled!e and "onsent, hen"e, it had
no liability atta"hin! to any "lai$ arisin! therefro$, and Divina in fa"t e>e"uted a ?aiverCFuit"lai$ and Release of
Responsibility and an /ffidavit of Desistan"e, "opy of ea"h do"u$ent was anne>ed to said I. . . answer to
"o$plainant9s position paper.I
#o Suna"e9s I. . . answer to "o$plainant9s position paper,I Divina filed a +0pa!e reply,8 without, however, refutin!
Suna"e9s dis"lai$er of 'nowled!e of the e>tension of her "ontra"t and without sayin! anythin! about the Release,
?aiver and Fuit"lai$ and /ffidavit of Desistan"e.
#he abor /rbiter, re:e"ted Suna"e9s "lai$ that the e>tension of Divina9s "ontra"t for two $ore years was without its
'nowled!e and "onsent in this wise=
?e re:e"t Suna"e9s sub$ission that it should not be held responsible for the a$ount withheld be"ause her "ontra"t was
e>tended for + $ore years without its 'nowled!e and "onsent be"ause as /nne> IBI9 shows, Suna"e and Ed$und
?an! have not stopped "o$$uni"atin! with ea"h other and yet the $atter of the "ontra"t9s e>tension and Suna"e9s
alle!ed non0"onsent thereto has not been "ate!ori"ally established.
?hat Suna"e should have done was to write to POE/ about the e>tension and its ob:e"tion thereto, "opy furnished the
"o$plainant herself, her forei!n e$ployer, @an! Rui Jion! and the #aiwanese bro'er, Ed$und ?an!.
/nd be"ause it did not, it is presu$ed to have "onsented to the e>tension and should be liable for anythin! that
resulted therefor$ %sic&.10 %Dnders"orin! supplied&
#he abor /rbiter re:e"ted too Suna"e9s ar!u$ent that it is not liable on a""ount of Divina9s e>e"ution of a ?aiver
and Fuit"lai$ and an /ffidavit of Desistan"e. Observed the abor /rbiter=
Should the parties arrive at any a!ree$ent as to the whole or any part of the dispute, the sa$e shall be redu"ed to
writin! and si!ned by the parties and their respe"tive "ounsel %sic&, if any, before the abor /rbiter.
#he settle$ent shall be approved by the abor /rbiter after bein! satisfied that it was voluntarily entered into by the
parties and after havin! e>plained to the$ the ter$s and "onse6uen"es thereof.
/ "o$pro$ise a!ree$ent entered into by the parties not in the presen"e of the abor /rbiter before who$ the "ase is
pendin! shall be approved by hi$, if after "onfrontin! the parties, parti"ularly the "o$plainants, he is satisfied that
they understand the ter$s and "onditions of the settle$ent and that it was entered into freely voluntarily %sic( by the$
and the a!ree$ent is not "ontrary to law, $orals, and publi" poli"y.
/nd be"ause no "onsideration is indi"ated in the do"u$ents, we stri'e the$ down as "ontrary to law, $orals, and
publi" poli"y.11
@e a""ordin!ly de"ided in favor of Divina, by de"ision of O"tober 4, +,,,,12 the dispositive portion of whi"h reads=
?herefore, :ud!$ent is hereby rendered orderin! respondents SDN/CE IN#ERN/#ION/ SERGICES and its
owner /DE/ID/ PER1E, both in their personal "apa"ities and as a!ent of @an! Rui Jion!CEd$und ?an! to
:ointly and severally pay "o$plainant DIGIN/ /. <ON#E@ER<OMO the su$ of N#4*,42,.,, in its peso
e6uivalent at the date of pay$ent, as refund for the a$ounts whi"h she is hereby ad:ud!ed entitled to as earlier
dis"ussed plus *,Q thereof as attorney9s fees sin"e "o$pelled to liti!ate, "o$plainant had to en!a!e the servi"es of
"ounsel.
SO ORDERED.13 %Dnderes"orin! supplied&
On appeal of Suna"e, the NRC, by Resolution of /pril ),, +,,+,14 affir$ed the abor /rbiter9s de"ision.
Gia petition for "ertiorari,15 Suna"e elevated the "ase to the Court of /ppeals whi"h dis$issed it outri!ht by
Resolution of Nove$ber *+, +,,+,16 the full te>t of whi"h reads=
#he petition for "ertiorari fa"es outri!ht dis$issal.
#he petition failed to alle!e fa"ts "onstitutive of !rave abuse of dis"retion on the part of the publi" respondent
a$ountin! to la"' of :urisdi"tion when the NRC affir$ed the abor /rbiter9s findin! that petitioner Suna"e
International <ana!e$ent Servi"es i$pliedly "onsented to the e>tension of the "ontra"t of private respondent Divina
/. <onteher$o7o. It is undisputed that petitioner was "ontinually "o$$uni"atin! with private respondent9s forei!n
e$ployer %sic&. /s a!ent of the forei!n prin"ipal, Ipetitioner "annot profess i!noran"e of su"h e>tension as
obviously, 0"# a70 '( 0"# 2,$n7$2a) #F0#nd$n* 7'+2)a$nan0 %sic& #+2)'-+#n0 7'n0,a70 n#7#%%a,$)- .'&nd $0.I
1rave abuse of dis"retion is not present in the "ase at bar.
ACCORDINGLY, the petition is hereby DENIED DUE COURSE and DISMISSED.17
SO ORDERED.
%E$phasis on words in "apital letters in the ori!inal; e$phasis on words in s$all letters and unders"orin! supplied&
Its <otion for Re"onsideration havin! been denied by the appellate "ourt by Resolution of (anuary *8, +,,8, 18Suna"e
filed the present petition for review on "ertiorari.
#he Court of /ppeals affir$ed the abor /rbiter and NRC9s findin! that Suna"e 'new of and i$pliedly "onsented to
the e>tension of Divina9s +0year "ontra"t. It went on to state that IIt is undisputed that ASuna"eB was "ontinually
"o$$uni"atin! with ADivina9sB forei!n e$ployer.I It thus "on"luded that IAaBs a!ent of the forei!n prin"ipal,
Npetitioner "annot profess i!noran"e of su"h e>tension as obviously, the a"t of the prin"ipal e>tendin! "o$plainant
%sic& e$ploy$ent "ontra"t ne"essarily bound it.9I
Contrary to the Court of /ppeals findin!, the alle!ed "ontinuous "o$$uni"ation was with the #aiwanese bro'er?an!,
not with the forei!n e$ployer Jion!.
#he -ebruary +*, +,,, telefa> $essa!e fro$ the #aiwanese bro'er to Suna"e, the 'n)- basis of a findin! of
"ontinuous "o$$uni"ation, reads verbatim=
> > > >
Re!ardin! to Divina, she did not say anythin! about her savin! in poli"e station. /s we "onta"t with her
e$ployer, she too' ba"' her savin! already last years. /nd they did not dedu"t any $oney fro$ her
salary. Or she will "all ba"' her e$ployer to "he"' it a!ain. If her e$ployer said yesX we will !et it ba"'
for her.
#han' you and best re!ards.
%S!d.&
Ed$und ?an!
President19
#he findin! of the Court of /ppeals %')#)- on the basis of the above06uoted telefa> $essa!e, that Suna"e "ontinually
"o$$uni"ated with the forei!n Iprin"ipalI %sic& and therefore was aware of and had "onsented to the e>e"ution of the
e>tension of the "ontra"t is $ispla"ed. #he $essa!e does not provide eviden"e that Suna"e was privy to the new
"ontra"t e>e"uted after the e>piration on -ebruary *, *445 of the ori!inal "ontra"t. #hat Suna"e and the
#aiwanese bro'er "o$$uni"ated re!ardin! Divina9s alle!edly withheld savin!s does not ne"essarily $ean that Suna"e
ratified the e>tension of the "ontra"t. /s Suna"e points out in its Reply20 filed before the Court of /ppeals,
/s "an be seen fro$ that letter "o$$uni"ation, it was :ust an infor$ation !iven to the petitioner that the private
respondent had tAa'enB already her savin!s fro$ her forei!n e$ployer and that no dedu"tion was $ade on her salary.
It "ontains nothin! about the e>tension or the petitioner9s "onsent thereto.21
Parentheti"ally, sin"e the telefa> $essa!e is dated -ebruary +*, +,,,, it is safe to assu$e that it was sent to enli!hten
Suna"e who had been dire"ted, by Su$$ons issued on -ebruary *2, +,,,, to appear on -ebruary +5, +,,, for a
$andatory "onferen"e followin! Divina9s filin! of the "o$plaint on -ebruary *8, +,,,.
Respe"tin! the Court of /ppeals followin! dictum=
/s a!ent of its forei!n prin"ipal, ASuna"eB "annot profess i!noran"e of su"h an e>tension as obviously, the a"t of its
prin"ipal e>tendin! ADivina9sB e$ploy$ent "ontra"t ne"essarily bound it,22
it too is a $isappli"ation, a $isappli"ation of the theory of i$puted 'nowled!e.
#he theory of i$puted 'nowled!e as"ribes the 'nowled!e of the a!ent, Suna"e, to the prin"ipal, e$ployer Jion!, n'0
0"# '0"#, Ba- a,'&nd.23 #he 'nowled!e of the prin"ipal0forei!n e$ployer "annot, therefore, be i$puted to its a!ent
Suna"e.
#here bein! no substantial proof that Suna"e 'new of and "onsented to be bound under the +0year e$ploy$ent
"ontra"t e>tension, it "annot be said to be privy thereto. /s su"h, it and its IownerI "annot be held solidarily liable for
any of Divina9s "lai$s arisin! fro$ the +0year e$ploy$ent e>tension. /s the New Civil Code provides,
Contra"ts ta'e effe"t only between the parties, their assi!ns, and heirs, e>"ept in "ase where the ri!hts and obli!ations
arisin! fro$ the "ontra"t are not trans$issible by their nature, or by stipulation or by provision of law.24
-urther$ore, as Suna"e "orre"tly points out, there was an i$plied revo"ation of its a!en"y relationship with its forei!n
prin"ipal when, after the ter$ination of the ori!inal e$ploy$ent "ontra"t, the forei!n prin"ipal dire"tly ne!otiated
with Divina and entered into a new and separate e$ploy$ent "ontra"t in #aiwan. /rti"le *4+8 of the New Civil Code
readin!
#he a!en"y is revo'ed if the prin"ipal dire"tly $ana!es the business entrusted to the a!ent, dealin! dire"tly with third
persons.
thus applies.
In li!ht of the fore!oin! dis"ussions, "onsideration of the validity of the ?aiver and /ffidavit of Desistan"e whi"h
Divina e>e"uted in favor of Suna"e is rendered unne"essary.
WHEREFORE, the petition is GRANTED. #he "hallen!ed resolutions of the Court of /ppeals are
herebyREVERSED and SET ASIDE. #he "o$plaint of respondent Divina /. <onteher$o7o a!ainst petitioner
isDISMISSED.
SO ORDERED.
NATIONAL MAR!ETING CORPORATION and PRICE STABILIZATION CORPORATION >BOARD OF
LIQUIDATORS?, petitioners,
vs.
COURT OF INDUSTRIAL RELATIONS and PRISCO WOR!ERS UNION, ET AL., respondents.
0overnment Cor,orate Counsel Simeon M. 0o,engco and Loren1o R. Mos2ueda $or ,etitioners.
3icente 4. *cam,o $or res,ondents.
REYES, J.B.L., J.:
Petition for the review of the order of the Court of Industrial Relations dated *, (une *43, %affir$ed by the CIR en
banc on 5 O"tober *43,& orderin! petitioners to pay +,+ wor'ers of PRISCO, in Case No. 58,0G%3&, their unpaid
overti$e and Sundays and le!al holidays wor' fro$ 5 (une *42* to ), (une *42), in a""ordan"e with the partial
de"ision of said Court of +2 /u!ust *42).
#he ante"edent fa"ts of this "ase are stated in our de"ision of +4 De"e$ber *425 entitled IPri"e Stabili7ation
Corporation vs. PRISCO ?or'ersK Dnion, et al., 04+55, and Pri"e Stabili7ation Corporation vs. Court of Industrial
Relations, 045)8, +4 Nove$ber *42..
-ro$ the$ it "an be !leaned that on *5 <ar"h *42), fifty0ei!ht %25& wor'ers, represented by the respondent Dnion,
filed a petition with the Court of Industrial Relations to enfor"e "ertain de$ands on the e$ployer Pri"e Stabili7ation
Corporation, 'nown as PRISCO %Case 58,0G&. On +2 /u!ust *42), the Court rendered a partial de"ision orderin! the
e$ployer to pay +2Q additional "o$pensation for unpaid overti$e and for Sundays and le!al holidays servi"es
rendered sin"e 5 (une *42*. ?hile this de"ision was ori!inally li$ited to the ori!inal 25 petitioners, the Court, on 4
<ay *422, subse6uently !ranted the DnionKs petition %Case No. 58,0G%8&, e>tendin! the benefits of the de"ision to
other wor'ers of PRISCO si$ilarly situated; and this de"ision was affir$ed by the Supre$e Court in its Case No. 0
4+55 %su,ra& for the reason that Iwor'ers involved in a dispute in"lude other wor'ers, unionists or not, who are
presu$ed interested in the out"o$e of the de$ands or stri'e one way or anotherI. On the $erits of the other Dnion
de$ands in Court of Industrial Relations Case No. 58,0G, the Supre$e Court li'ewise supported the Industrial CourtKs
rulin! that PRISCO is a !overn$ent0owned "orporation run and operated li'e ordinary business "orporations, and
Iwhen the 1overn$ent en!a!es in business it be"o$es sub:e"t to the laws and re!ulations !overnin! the relations of
labor and $ana!e$entI, and is not e>e$pt fro$ the provisions of the Ei!ht0@our abor aw %Co$$onwealth /"t
No. 888&. %1.R. No. 045)8, ante&.
In the $eanti$e, on *. (une *422, PRISCO was abolished by Republi" /"t *)82 "reatin! the National <ar'etin!
Corporation and transferrin! its e$ployees and fi>ed assets to the N/</RCO, and its other "hoses in a"tion,
obli!ations, and liabilities to the Board of i6uidators; so that thereafter, both N/</RCO and PRISCO %Board of
i6uidators& were i$pleaded as respondents in the "ourt below when on +, <ar"h *425, +,+ other e$ployees and
wor'ers of the for$er PRISCO, a$on! the$ 82 e$ployees of the 1eneral /uditin! Offi"e %1/O& assi!ned thereto,
filed a petition for pay$ent of overti$e, Sundays and le!al holidays wor' rendered fro$ 5 (une *42* to ), (une *42),
based on the partial de"ision of the Court of Industrial Relations of +2 /u!ust *42). On + /pril *425, this "lai$ was
resisted by PRISCO on the !round that the partial de"ision e$bra"ed only the 25 ori!inal petitioners; that the "lai$
has already pres"ribed under Se"tion .0/ of Co$$onwealth /"t 888 as a$ended by Republi" /"t *44); and that
so$e 82 e$ployees a$on! the "lai$ants were, and so$e still are, e$ployees of the 1/O, and not of PRISCO. #his
opposition notwithstandin!, the Court of Industrial Relations, on *, (une *43,, !ranted the petition, and ordered
pay$ent of their "lai$s after "o$putation thereof by the Court E>a$iner or his duly authori7ed representative.
<otion for re"onsideration of this order havin! been denied en banc, PRISCO appealed to this Court by petition for
review.
PetitionersK ar!u$ents are "entered upon two 6uestions= First, has the "lai$ for pay$ent of overti$e and SundaysK and
le!al holidaysK wor' pres"ribedO Second, should e$ployees of the 1/O assi!ned to, and wor'in! in, the !overn$ent0
"ontrolled PRISCO and N/</RCO be dee$ed e$ployees of said "orporation in $atters of "o$pensation for
overti$e and other benefitsO
It is "ontended for the petitioners that sin"e the "lai$ants now are different fro$ the ori!inal "lai$ants in the $ain
"ase, the present petition "annot be "onsidered as a "ontinuation of the ori!inal "ase, or an i$ple$entation of the
partial de"ision, but a new "ase; that sin"e the benefits !ranted in the partial de"ision of +2 /u!ust *42) were intended
only for the individual petitioners whose na$es appear in the re"ords as ori!inal parties in the $ain "ase, and
Republi" /"t *44) a$endin! Se"tion .0/ of the Ei!ht0@our abor aw %C./. 888& pres"ribes the ti$e li$it for filin!
an a"tion thereunder to ) years fro$ the ti$e the "ause of a"tion a""rues, the present petition has already pres"ribed,
havin! been filed only on +, <ar"h *425, or $ore than ) years fro$ +2 /u!ust *42), when their "ause of a"tion
a""rued. In other words, the Court of Industrial Relations "an no lon!er invo'e its power to e>tend the benefits of the
partial de"ision to other e$ployees of the "o$pany.
?herefore, the parties respe"tfully pray that the fore!oin! stipulation of fa"ts be ad$itted and approved by this
@onorable Court, without pre:udi"e to the parties addu"in! other eviden"e to prove their "ase not "overed by this
stipulation of fa"ts. *YwphZ*.V[t
It is very "lear, however %as the re"ords of the "ase show&, that the present petition of +, <ar"h *425, far fro$ bein! a
Inew petitionI, is really one for the e>e"ution of the partial Court of Industrial Relations de"ision of +2 /u!ust *42),
with re!ards to the other wor'ers and e$ployees affe"ted thereby and who have not yet been paid their wor' overti$e
and on Sundays and le!al holidays. Not bein! a new "lai$, said petition was filed well within the five0year period
within whi"h enfor"e$ent of a de"ision of the Court of Industrial Relations by $otion for e>e"ution $ay be $ade
%Se"tion 3, Rule )4, of the Rules of Court, in "onne"tion with Se"tion +), C./. *,), as a$ended by Se"tion 3, C./.
224&. #hus, Se"tion +), C./. *,), as a$ended, provides=
In "ase of non0"o$plian"e with any award, order, or de"ision of the Court of Industrial Relations after it has
be"o$e final, "on"lusive, and e>e"utory, the :ud!$ent $ay be enfor"ed by a writ of e>e"ution or any other
re$edy provided by law in respe"t to enfor"e$ent and e>e"ution of orders, de"isions or :ud!$ents of the
Court of -irst Instan"e.
/s pres"ribed in the Rules of Court, final and "on"lusive :ud!$ents $ay be e>e"uted by $otion within five years
fro$ the date of entry thereof, or by ordinary a"tion filed after the lapse of five years but before the a"tion has
pres"ribed %within *, years fro$ the date the :ud!$ent be"o$es final&. #he present petition havin! been filed on +,
<ar"h *425, or only about four years and seven $onths fro$ the partial de"ision of the Court of Industrial Relations
of +2 /u!ust *42), the sa$e has not pres"ribed..
... If the award $ade in *485 has never been e>e"uted as re!ards all the petitioners, then the present petition
should and $ust be denied. / new a"tion or pro"eedin! would be ne"essary to enfor"e the award. @owever, if
the *485 award has heretofore been e>e"uted or enfor"ed as to so$e or all of the petitioners and fro$ the date
of the last enfor"e$ent up to the date of the present petition, no $ore than five years have elapsed, then the
present petition $ay be !ranted as to those petitioners not "overed by the prohibition of se"tion 3, Rule )4,
Rules of Court. %National Develop$ent Co$pany vs. /ralar, et als., and Court of Industrial Relations, 0
*8+25, +3 (uly, *43,&
Re!ardin! petitionersK ar!u$ent that the Court of Industrial Relations "an no lon!er invo'e its power to e>tend the
benefits of the partial de"ision to the other e$ployees of the "o$pany, it has been repeatedly held that the benefits of
an award "an be e>tended to all wor'ers involved in a dispute, unionists or not, even thou!h not parties to the "ase,
be"ause it is to be presu$ed that other wor'ers are also interested in any in"rease in salary and other benefits.
for otherwise, failure or refusal to do so would "onstitute un:ust and unwarranted dis"ri$ination whi"h is not
per$itted by the law.I %Pri"e Stabili7ation Corporation vs. PRISCO ?or'ersK Dnion, 1.R. No. 04+55, +4
De"e$ber *425.&
In other words, the ori!inal petition filed on *5 <ar"h *42) should be dee$ed a "lass suit, and Ithe benefits of an
award $ay be e>tended to laborers and e$ployees who are si$ilarly situated and $ore or less of the sa$e "ate!oryI
%N.D.C. vs. /ralar, et als., and CIR, su,ra, /SEDECO vs. Caledonia Pile ?or'ersK Dnion, 085.., -ebruary +3,
*42+&.
?e now "o$e to the 6uestion of whether or not the 82 "lai$ants, e$ployees of the 1eneral /uditin! Offi"e wor'in!
in the PRISCO, are entitled to the benefits of overti$e pay and pay$ent for wor' perfor$ed on Sundays and le!al
holidays.
It is "lai$ed for petitioners that there is no e$ployer0e$ployee relationship between the$ and the 82 "lai$ants
belon!in! to the 1/O, and, therefore, they are not entitled to overti$e "o$pensation, $irst, sin"e the e$ployees of the
1/O wor'in! in the PRISCO were appointed by the /uditor 1eneral, and were sub:e"t to his "ontrol and supervision
%Se"tion ., E>e"utive Order No. )2,, ) O"tober *42,&; and second, be"ause bein! offi"ers and e$ployees of the
National 1overn$ent, the Ei!ht0@our abor aw is not appli"able to the$, and their overti$e servi"es, if at all,
should be paid at rates fi>ed by the Bud!et /"t %1eneral /ppropriation /"t, C./., ++83, Par. )+&. In support thereof,
petitioners invo'e the Opinion of the Se"retary of (usti"e of +. (uly *484 referred to in Batun!ba"al vs. NDC %84 Off.
1a7., No. 3, p. ++4,&, whi"h holds that the auditors of !overn$ent0"ontrolled "orporations %referrin! to the National
Develop$ent Co$pany& as well as their subordinates are not "orporate e$ployees but a!ents of the !overn$ent, and,
therefore, are e$bra"ed in the "ivil servi"e %84 Off. 1a7., No. 3, p. ++4,&.
#he appellee Dnion $aintains that the 82 e$ployees of the auditin! offi"e should en:oy the status of e$ployees of
PRISCO by pointin! out that their salaries are in"luded in the bud!et of PRISCO and not in that of the National
1overn$ent, in a""ordan"e with se"tion . of E>e"utive Order No. )2, of ) O"tober *43,. #he Dnion also relies on
the Opinion No. ++5 of the Se"retary of (usti"e rulin! that persons appointed by the /uditor 1eneral to wor' in the
/uditin! Depart$ent of the N/RIC %a !overn$ent0"ontrolled "orporation li'e the PRISCO& are entitled to the sa$e
retire$ent !ratuities !ranted to other N/RIC e$ployees.
?e a!ree with appellants that $e$bers of the auditin! for"e "an not be re!arded as e$ployees of PRISCO in $atters
relatin! to their "o$pensation. #hey are appointed and supervised by the /uditor 1eneral, have an independent
tenure, and wor' sub:e"t to his orders and instru"tions, and not to those of the $ana!e$ent of appellants. /bove all,
the nature of their fun"tions and duties for the purpose of fis"al "ontrol of appellantsK operation, i$peratively
de$ands, as a $atter of poli"y, that their positions be "o$pletely independent fro$ interferen"e or indu"e$ent on the
part of the supervised $ana!e$ent, in order to assure a $a>i$u$ of i$partiality in the auditin! fun"tions. Both
independen"e and i$partiality re6uire that the e$ployees in 6uestion be utterly free fro$ apprehension as to their
tenure and fro$ e>pe"tan"y of benefits resultin! fro$ any a"tion of the $ana!e$ent, sin"e in either "ase there would
be an influen"e of wor' that "ould possibly lead, if not to positive $alfeasan"e, to la>ity and indifferen"e that would
!radually erode and endan!er the "riti"al supervision entrusted to these auditin! e$ployees.
#he in"lusion of their ite$s in the PRISCO bud!et should be viewed as no $ore than a desi!nation by the national
!overn$ent of the fund or sour"e fro$ whi"h their e$olu$ents are to be drawn, and does not si!nify that they are
thereby $ade PRISCO e$ployees.
?e thin' that this "ase is !overned by the do"trine laid down by this Court in the Batungbacal vs. N/C "ase, and not
by Opinion No. ++5 of the Se"retary of (usti"e %ante&, whi"h "onte$plated a "ase of retire$ent !ratuities for "o$pany
auditors whi"h were left without wor' by the "essation of the operations they were supervisin!. #hus, the Court of
Industrial Relations erred in re!ardin! these e$ployees of the 1eneral /uditin! Offi"e as standin! on an e6ual footin!
with other e$ployees and "overed by the previous award of +2 /u!ust *42), when it should have de"lared the$
!overned by the !eneral "ivil servi"e laws and re!ulation appli"able to re!ular !overn$ent e$ployees.
?@ERE-ORE, pre$ises "onsidered, the :ud!$ent under review is $odified by reversin! the sa$e in so far as it
de"lares that the 82 e$ployees of the 1eneral /uditin! Offi"e are in"luded in the for$er award on overti$e and
holiday "o$pensation. In all other respe"ts, the :ud!$ent is affir$ed. No "osts in this instan"e.