APEX MINING COMPANY, INC.

, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents.
Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? This is the
novel issue raised in this petition.
Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to perform laundry
services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate basis. However, on
January 17, 1982, she was paid on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and
hit her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer, Florendo
D. Asirit. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. De la
Rosa offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she
refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988.
On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment. After the parties
submitted their position papers as required by the labor arbiter assigned to the case on August 24, 1988 the latter rendered a decision,
the dispositive part of which reads as follows:
WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent, Apex Mining
Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:
1 Salary
Differential P16,289.20
2. Emergency Living
Allowance 12,430.00
3. 13th Month Pay
Differential 1,322.32
4. Separation Pay
(One-month for
every year of
service [1973-19881) 25,119.30
or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42).
SO ORDERED.1
Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC), wherein in due
course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit and affirming the
appealed decision. A motion for reconsideration thereof was denied in a resolution of the NLRC dated June 29, 1990.
Hence, the herein petition for review by certiorari, which appopriately should be a special civil action for certiorari, and which in the
interest of justice, is hereby treated as such.2 The main thrust of the petition is that private respondent should be treated as a mere
househelper or domestic servant and not as a regular employee of petitioner.
The petition is devoid of merit.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as
follows:
The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether
male or female, who renders services in and about the employer's home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the
employer's family.3

The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to
minister exclusively to the personal comfort and enjoyment of the employer's family. Such definition covers family drivers, domestic
servants, laundry women, yayas, gardeners, houseboys and other similar househelps.
The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who
attends to the needs of the company's guest and other persons availing of said facilities. By the same token, it cannot be considered to
extend to then driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They may not be
considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law.
The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that
the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in
nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service
is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the
company or employer in the business concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the
employer that such househelper or domestic servant may be considered as such as employee. The Court finds no merit in making any
such distinction. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer
and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants
the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not
as a mere family househelper or domestic servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.
Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work.1wphi1 This
argument notwithstanding, there is enough evidence to show that because of an accident which took place while private respondent
was performing her laundry services, she was not able to work and was ultimately separated from the service. She is, therefore, entitled
to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to be interested in returning to her
work for valid reasons, the payment of separation pay to her is in order.
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.
FILOMENA BARCENAS, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), Rev. SIM DEE the present Head Monk of the Manila Buddha
Temple, MANUEL CHUA, in his capacity as the President and Chairman of the Board of Directors of the Poh Toh Buddhist
Association of the Philippines, Inc., and in his private capacity,respondents.
This petition for review on certiorari (which We treat as a special civil action for certiorari) seeks to annul the decision of the National
Labor Relations Commission dated November 29, 1988, which reversed the decision of the Labor Arbiter dated February 10, 1988 in
NLRC NCR Case No. 12-4861-86 (Filomena Barcenas v. Rev. Sim See, etc., et al.) on the ground that no employer-employee
relationship exists between the parties.
Petitioner alleged in her position paper the following facts:
In 1978, Chua Se Su (Su for short) in his capacity as the Head Monk of the Buddhist Temple of Manila and Baguio City and as
President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Phils. Inc. hired the petitioner who speaks
the Chinese language as secretary and interpreter. Petitioner's position required her to receive and assist Chinese visitors to the
temple, act as tourist guide for foreign Chinese visitors, attend to the callers of the Head Monk as well as to the food for the temple
visitors, run errands for the Head Monk such as paying the Meralco, PLDT, MWSS bills and act as liaison in some government offices.
Aside from her pay and allowances under the law, she received an amount of P500.00 per month plus free board and lodging in the
temple. In December, 1979, Su assumed the responsibility of paying for the education of petitioner's nephew. In 1981, Su and petitioner
had amorous relations. In May, 1982, of five months before giving birth to the alleged son of Su on October 12, 1982, petitioner was
sent home to Bicol. Upon the death of Su in July, 1983, complainant remained and continued in her job. In 1985, respondent Manuel
Chua (Chua, for short) was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines, Inc.
and Rev. Sim Dee for short) was elected Head Buddhist Priest. Thereafter, Chua and Dee discontinued payment of her monthly
allowance and the additional P500.00 effective 1983. In addition, petitioner and her son were evicted forcibly from their quarters in the
temple by six police officers. She was brought first to the Police precinct in Tondo and then brought to Aloha Hotel where she was
compelled to sign a written undertaking not to return to the Buddhist temple in consideration of the sum of P10,000.00. Petitioner
refused and Chua shouted threats against her and her son. Her personal belongings including assorted jewelries were never returned
by respondent Chua.
Chua and DEE on the other hand, claimed that petitioner was never an employee of the Poh Toh Temple but a servant who confined
herself to the temple and to the personal needs of the late Chua Se Su and thus, her position is coterminous with that of her master.
On February 10, 1988, the Labor Arbiter rendered a decision, the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the complainant Filomena Barcenas,
and the respondent corporation is hereby ordered to pay her the following:
1. P26,575.00 backwages from August 9, 1986 up to date hereof.,
2. P14,650.00 as separation pay;
3. P18,000.00 as unpaid wages from August, 1983 up to August 8, 1986; and
4. P10,000.00 moral damages.
Complainant's charge of unfair labor practice is hereby dismissed for lack of merit.
SO ORDERED. 1
Respondents appealed to the National Labor Relations Commission which, as earlier stated, reversed the above decision of the Labor
Arbiter. Hence, this instant petition.
A painstaking review of the records compels Us to dismiss the petition.
At the outset, however, We agree with the petitioner's claim that she was a regular employee of the Manila Buddhist Temple as
secretary and interpreter of its Head Monk, Su As Head Monk, President and Chairman of the Board of Directors of the Poh Toh
Buddhist Association of the Philippines, Su was empowered to hire the petitioner under Article V of the By-laws of the Association which
states:
. . . (T)he President or in his absence, the Vice President shall represent the Association in all its dealings with the
public, subject to the Board, shall have the power to enter into any contract or agreement in the name of the
Association, shall manage the active business operation of the Association, shall deal with the bank or banks . . . 2
Respondent NLRC represented by its Legal Offices 3 argues that since petitioner was hired without the approval of the Board of
Directors of the Poh Toh Buddhist Association of the Philippines, Inc., she was not an employee of respondents. This argument is
specious. The required Board approval would appear to relate to the acts of the President in representing the association "in all its
dealings with the public." And, even granting that prior Board approval is required to confirm the hiring of the petitioner, the same was
already granted, albeit, tacitly. It must be noted that petitioner was hired in 1978 and no whimper of protest was raised until this present
controversy.
Moreover, the work that petitioner performed in the temple could not be categorized as mere domestic work. Thus, We find that
petitioner, being proficient in the Chinese language, attended to the visitors, mostly Chinese, who came to pray or seek advice before
Buddha for personal or business problems; arranged meetings between these visitors and Su and supervised the preparation of the
food for the temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some goverment offices; and made the
payment for the temple's Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of a household helper.
They were essential and important to the operation and religious functions of the temple.
In spite of this finding, her status as a regular employee ended upon her return to Bicol in May, 1982 to await the birth of her love-child
allegedly by Su The records do not show that petitioner filed any leave from work or that a leave was granted her. Neither did she return
to work after the birth of her child on October 12, 1982, whom she named Robert Chua alias Chua Sim Tiong. The NLRC found that it
was only in July, 1983 after Su died that she went back to the Manila Buddhist Temple. Petitioner's pleadings failed to rebut this finding.
Clearly, her return could not be deemed as a resumption of her old position which she had already abandoned. Petitioner herself
supplied the reason for her return. She stated:
. . . (I)t was the death-bed instruction to her by Chua Se Su to stay at the temple and to take care of the two boys and
to see to it that they finish their studies to become monks and when they are monks to eventually take over the two
temples as their inheritance from their father Chua Se Su. 4
Thus, her return to the temple was no longer as an employee but rather as Su's mistress who is bent on protecting the proprietary and
hereditary rights of her son and nephew. In her pleadings, the petitioner claims that they were forcefully evicted from the temple,
harassed and threatened by respondents and that the Poh Toh Buddhist Association is a trustee corporation with the children as cestui
que trust. These claims are not proper in this labor case. They should be appropriately threshed out in the complaints already filed by
the petitioner before the civil courts. Due to these claims, We view the respondents' offer of P10,000.00 as indicative more of their
desire to evict the petitioner and her son from the temple rather than an admission of an employer-employee relations.
Anent the petitioner's claim for unpaid wages since May, 1982 which she filed only in 1986, We hold that the same has already
prescribed. Under Article 292 of the Labor Code, all money claims arising from employer-employee relations must be filed within three
years from the time the cause of action accrued, otherwise they shall forever be barred.
Finally, while petitioner contends that she continued to work in the temple after Su died, there is, however, no proof that she was rehired by the new Head Monk. In fact, she herself manifested that respondents made it clear to her in no uncertain terms that her

services as well as her presence and that of her son were no longer needed.5 However, she persisted and continued to work in the
temple without receiving her salary because she expected Chua and Dee to relent and permit the studies of the two
boys. 6 Consequently, under these circumstances, no employer-employee relationship could have arisen.
ACCORDINGLY, the decision of the National Labor Relations Commission dated November 29, 1988 is hereby AFFIRMED for the
reasons aforestated. No costs.
SO ORDERED.

G.R. No. 122917 MARITES BERNARDO et al. vs. NLRCTHIRD DIVISION / PANGANIBAN,
The 43 petitioners are deaf-mutes who were hired on various periods from 1988 to 1993 by respondent Far EastBank
and Trust Co. as Money Sorters and Counters through a uniformly worded agreement called "Employment Contractfor
Handicapped Workers". The said agreement provides for the manner of how they are hired and be rehired, the
amountof their wages (P118.00 per day), period of employment (5 days a week, 8 hours a day, training for 1 month, 6
monthsperiod) and the manner and methods of how their works are to be done (Sort out bills according to color; Count
eachdenomination per hundred, either manually or with the aid of a counting machine; Wrap and label bills per
hundred; Putthe wrapped bills into bundles; and Submit bundled bills to the bank teller for verification.) Many of their
employmentswere renewed every six months. Claiming that they should be considered as regular employees they filed
a complaint for illegal dismissal and recovery of various benefits.
Labor arbiters decision: complaint is dismissed for lack of merit (the terms of the contract shall be the law between
the
parties.). Affirmed by the NLRC (Art. 280 is not controlling herein but Art. 80) (the Magna Carta for Disabled Persons
wasnot applicable, "considering the prevailing circumstances of the case.") and denied motion for reconsideration.
ISSUES:
Does petitioners considered as regular employees?
LAW:
Art.78 & 80 of the Labor Code and the Magna Carta for Disabled Persons.
RULING: Yes.
The petition is meritorious. However, only the employees, who worked for more than six months and whosecontracts
were renewed are deemed regular. Hence, their dismissal from employment was illegal.The stipulations in the
employment contracts indubitably conform with Article 80, however, the application of Article 280 of the Labor Code is
justified because of the advent of RA No. 7277 (the Magna Carta for Disabled Persons) whichmandates that a qualified
disabled employee should be given the same terms and conditions of employment as a qualifiedable-bodied person
(compensation, privileges, benefits, fringe benefits, incentives or allowances) 27 of the petitioners areconsidered
regular employees by provision of law regardless of any agreement between the parties as embodied in article280 in
relation to article 281 of the Labor Code.The test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. Hence, theemployment is considered regular, but only with respect to such activity,
and while such activity exist. Without a doubt, thetask of counting and sorting bills is necessary and desirable to the
business of respondent bank.When the bank renewed the contract after the lapse of the six-month probationary
period, the employees thereby becameregular employees. No employer is allowed to determine indefinitely the fitness
of its employees. Those who have workedfor only 6 months and employments were not renewed are not considered
regular employees.
JULIUS AMANQUITON, Petitioner, v. PEOPLE OF THE PHILIPPINES, Respondent.
Petitioner Julius Amanquiton was a purok leader of Barangay Western Bicutan, Taguig, Metro Manila. As a purok leader
and barangay tanod, he was responsible for the maintenance of cleanliness, peace and order of the community.
At 10:45 p.m. on October 30, 2001, petitioner heard an explosion. He, together with two auxiliarytanod, Dominador
Amante1 and a certain Cabisudo, proceeded to Sambong Street where the explosion took place. Thereafter, they saw
complainant Leoselie John Baaga being chased by a certain Gil Gepulane. Upon learning that Baaga was the one
who threw the pillbox2 that caused the explosion, petitioner and his companions also went after him.
On reaching Baaga's house, petitioner, Cabisudo and Amante knocked on the door. When no one answered, they
decided to hide some distance away. After five minutes, Baaga came out of the house. At this juncture, petitioner
and his companions immediately apprehended him. Baaga's aunt, Marilyn Alimpuyo, followed them to the barangay
hall.

Baaga was later brought to the police station. On the way to the police station, Gepulane suddenly appeared from
nowhere and boxed Baaga in the face. This caused petitioner to order Gepulane's apprehension along with
Baaga. An incident report was made.3
During the investigation, petitioner learned Baaga had been previously mauled by a group made up of a certain
Raul, Boyet and Cris but failed to identify two others. The mauling was the result of gang trouble in a certain
residental compound in Taguig City. Baaga's mauling was recorded in a barangay blotter which read:
10-30-201
Time: 10-15 p.m.
RECORD purposes
Dumating dito sa Barangay Head Quarters si Dossen4 Baaga is Alimpuyo 16 years old student nakatira sa 10 B
Kalachuchi St. M.B.T. M.M.
Upang ireklamo yong sumapak sa akin sina Raul[,] Boyet [at] Cris at yong dalawang sumapak ay hindi ko kilala. Nang
yari ito kaninang 10:p.m. araw ng [M]artes taong kasalukuyan at yong labi ko pumutok at yong kabilang mata ko ay
namaga sa bandang kanan. Ang iyong kaliwang mukha at pati yong likod ko ay may tama sa sapak.
Patunay dito ang aking lagda.
Dossen Banaga (sgd.)
Thereafter, an Information for violation of Section 10 (a), Article VI, RA 5 71606 in relation to Section 5 (j) of R.A. 8369
was filed against petitioner, Amante and Gepulane. The Information read:
The undersigned 2nd Assistant Provincial Prosecutor accuses Julius Amanquiton, Dominador Amante and Gil Gepulane
of the crime of Violations of Section 10 (a) Article VI, Republic Act No. 7610 in relation to Section 5 (j) of R.A. No.
8369 committed as follows:
That on the 30th day of October, 2001, in the Municipality of Taguig, Metro Manila, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused in conspiracy with one another, armed with nightstick,
did then and there willfully, unlawfully and feloniously attack, assault and use personal violence, a form of physical
abuse, upon the person of Leoselie John A. [Baaga], seventeen (17) years old, a minor, by then and there
manhandling him and hitting him with their nightsticks, thus, constituting other acts of child abuse, which is inimical
or prejudicial to child's development, in violation of the above-mentioned law.
CONTRARY TO LAW.
On arraignment, petitioner and Amante both pleaded not guilty. Gepulane remains at-large.
During the trial, the prosecution presented the following witnesses: Dr. Paulito Cruz, medico-legal officer of the
Taguig-Pateros District Hospital who attended to Baaga on October 30, 2001, Baaga himself, Alimpuyo and
Rachelle Baaga (complainant's mother).
The defense presented the testimonies of petitioner, Amante and Briccio Cuyos, then deputy chief barangay tanod of
the same barangay. Cuyos testified that the blotter notation entered by Gepulane and Baaga was signed in his
presence and that they read the contents thereof before affixing their signatures.
On May 10, 2005, the RTC found petitioner and Amante guilty beyond reasonable doubt of the crime charged. 7 The
dispositive portion of the RTC decision read:
WHEREFORE, in view of the foregoing, this Court finds the accused JULIUS AMANQUITON and DOMINADOR AMANTE
"GUILTY" beyond reasonable doubt for violation of Article VI Sec. 10 (a) of Republic Act 7610 in relation to Section 3
(j) of Republic Act 8369, hereby sentences accused JULIUS AMANQUITON and DOMINADOR AMANTE a straight
penalty of thirty (30) days of Arresto Menor.rbl r l l lbrr
Both accused Julius Amanquiton and Dominador Amante are hereby directed to pay Leoselie John A. Banaga the
following:
1. Actual damages in the amount of P5,000.00;
2. Moral Damages in the amount of P 30,000.00; and

3. Exemplary damages in the amount of P 20,000.00.

The case against the accused Gil Gepulane is hereby sent to the ARCHIVES to be revived upon the arrest of the
accused. Let [a] warrant of arrest be issued against him.
SO ORDERED.
Amanquiton's motion for reconsideration was denied. 8
Petitioner filed a notice of appeal which was given due course. On August 28, 2008, the CA rendered a decision 9 which
affirmed the conviction but increased the penalty. The dispositive portion of the assailed CA decision read:
WHEREFORE, in view of the foregoing the Decision appealed from is AFFIRMED with MODIFICATION. The accusedappellant is sentenced to suffer the penalty of four (4) years, two (2) months and one (1) day of prision
correccional maximum up to eight (8) years of prision mayor minimum as maximum. In addition to the damages
already awarded, a fine of thirty thousand pesos (P30,000.00) is hereby solidarily imposed the proceeds of which shall
be administered as a cash fund by the DSWD.
IT IS SO ORDERED.
Petitioner's motion for reconsideration was denied. 10
Hence, this petition. Petitioner principally argues that the facts of the case as established did not constitute a violation
of Section 10 (a), Article VI of RA 7160 and definitely did not prove the guilt of petitioner beyond reasonable doubt.
The Constitution itself provides that in all criminal prosecutions, the accused shall be presumed innocent until the
contrary is proved.11 An accused is entitled to an acquittal unless his guilt is shown beyond reasonable doubt. 12 It is
the primordial duty of the prosecution to present its side with clarity and persuasion, so that conviction becomes the
only logical and inevitable conclusion, with moral certainty.13
The necessity for proof beyond reasonable doubt was discussed in People v. Berroya:14
[Proof beyond reasonable doubt] lies in the fact that in a criminal prosecution, the State is arrayed against the
subject; it enters the contest with a prior inculpatory finding in its hands; with unlimited means of command; with
counsel usually of authority and capacity, who are regarded as public officers, as therefore as speaking semi-judicially,
and with an attitude of tranquil majesty often in striking contrast to that of defendant engaged in a perturbed and
distracting struggle for liberty if not for life. These inequalities of position, the law strives to meet by the rule that
there is to be no conviction where there is reasonable doubt of guilt. However, proof beyond reasonable doubt requires
only moral certainty or that degree of proof which produces conviction in an unprejudiced mind.
The RTC and CA hinged their finding of petitioner's guilt beyond reasonable doubt (of the crime of child abuse) solely
on the supposed positive identification by the complainant and his witness (Alimpuyo) of petitioner and his co-accused
as the perpetrators of the crime.
We note Baaga's statement that, when he was apprehended by petitioner and Amante, there were many people
around.15 Yet, the prosecution presented only Baaga and his aunt, Alimpuyo, as witnesses to the mauling incident
itself. Where were the other people who could have testified, in an unbiased manner, on the alleged mauling of
Baaga by petitioner and Amante, as supposedly witnessed by Alimpuyo? 16 The testimonies of the two other
prosecution witnesses, Dr. Paulito Cruz and Rachelle Baaga, did not fortify Baaga's claim that petitioner mauled
him, for the following reasons: Dr. Cruz merely attended to Baaga's injuries, while Rachelle testified that she saw
Baaga only after the injuries have been inflicted on him.
We note furthermore that, Baaga failed to controvert the validity of the barangay blotter he signed regarding the
mauling incident which happened prior to his apprehension by petitioner. Neither did he ever deny the allegation that
he figured in a prior battery by gang members.
All this raises serious doubt on whether Baaga's injuries were really inflicted by petitioner, et al., to the exclusion of
other people. In fact, petitioner testified clearly that Gepulane, who had been harboring a grudge against Baaga,
came out of nowhere and punched Baaga while the latter was being brought to the police station. Gepulane, not
petitioner, could very well have caused Baaga's injuries.
Alimpuyo admitted that she did not see who actually caused the bloodied condition of Baaga's face because she
had to first put down the baby she was then carrying when the melee started. 17 More importantly, Alimpuyo stated
that she was told by Baaga that, while he was allegedly being held by the neck by petitioner, others were hitting
him. Alimpuyo was obviously testifying not on what she personally saw but on what Baaga told her.

While we ordinarily do not interfere with the findings of the lower courts on the trustworthiness of witnesses, when
there appear in the records facts and circumstances of real weight which might have been overlooked or
misapprehended, this Court cannot shirk from its duty to sift fact from fiction.
We apply the pro reo principle and the equipoise rule in this case. Where the evidence on an issue of fact is in
question or there is doubt on which side the evidence weighs, the doubt should be resolved in favor of the
accused.18 If inculpatory facts and circumstances are capable of two or more explanations, one consistent with the
innocence of the accused and the other consistent with his guilt, then the evidence does not fulfill the test of moral
certainty and will not justify a conviction.19
Time and again, we have held that:
Republic Act No. 7610 is a measure geared towards the implementation of a national comprehensive program for the
survival of the most vulnerable members of the population, the Filipino children, in keeping with the Constitutional
mandate under Article XV, Section 3, paragraph 2, that "The State shall defend the right of the children to
assistance, including proper care and nutrition, and special protection from all forms of neglect, abuse,
cruelty, exploitation, and other conditions prejudicial to their development." This piece of legislation supplies
the inadequacies of existing laws treating crimes committed against children, namely, the Revised Penal Code and
Presidential Decree No. 603 or the Child and Youth Welfare Code. As a statute that provides for a mechanism for
strong deterrence against the commission of child abuse and exploitation, the law has stiffer penalties for their
commission, and a means by which child traffickers could easily be prosecuted and penalized. Also, the definition of
child abuse is expanded to encompass not only those specific acts of child abuse under existing laws but includes also
"other acts of neglect, abuse, cruelty or exploitation and other conditions prejudicial to the child's development." 20
However, this noble statute should not be used as a sharp sword, ready to be brandished against an accused even if
there is a patent lack of proof to convict him of the crime. The right of an accused to liberty is as important as a
minor's right not to be subjected to any form of abuse. Both are enshrined in the Constitution. One need not be
sacrificed for the other.
There is no dearth of law, rules and regulations protecting a child from any and all forms of abuse. While
unfortunately, incidents of maltreatment of children abound amidst social ills, care has to be likewise taken that
wayward youths should not be cuddled by a misapplication of the law. Society, through its laws, should correct the
deviant conduct of the youth rather than take the cudgels for them. Lest we regress to a culture of juvenile
delinquency and errant behavior, laws for the protection of children against abuse should be applied only and strictly
to actual abusers.
The objective of this seemingly catch-all provision on abuses against children will be best achieved if parameters are
set in the law itself, if only to prevent baseless accusations against innocent individuals. Perhaps the time has come
for Congress to review this matter and institute the safeguards necessary for the attainment of its laudable ends.
We reiterate our ruling in People v. Mamalias:21
We emphasize that the great goal of our criminal law and procedure is not to send people to the gaol but to do justice.
The prosecution's job is to prove that the accused is guilty beyond reasonable doubt. Conviction must be based on the
strength of the prosecution and not on the weakness of the defense. Thus, when the evidence of the prosecution is
not enough to sustain a conviction, it must be rejected and the accused absolved and released at once.
WHEREFORE, the petition is hereby GRANTED. The August 28, 2008 decision and January 15, 2009 resolution of
Court of Appeals are reversed and SET ASIDE. Petitioner Julius Amanquiton is herebyACQUITTED of violation of
Section 10 (a), Article VI of RA 7160.
SO ORDERED.
YOLANDA FLORALDE, NIDA VELASCO and NORMELITA ALAMBRA, petitioners, vs. COURT OF APPEALS,
CIVIL SERVICE COMMISSION and PAULINO W. RESMA, respondents.
The case is a petition for review on certiorari of the decision of the Court of Appeals[1] which reversed and set aside the
decision of the Civil Service Commission [2] dismissing respondent Paulino W. Resma from the service as Division Chief
of Specialist Services Division (SSD) and Officer-In-Charge of Agricultural Training Institute (ATI), Department of
Agriculture.
On April 23, 1994, petitioners employees of the ATI charged respondent Paulino W. Resma with grave misconduct in
office (sexual harassment) in three separate complaints filed directly with the Civil Service Commission.
On August 30, 1994, the Commission gave due course to the complaints and formally charged respondent with grave
misconduct requiring him to submit his answer with the affidavits of his witnesses, and placed him under preventive
suspension for ninety (90) days effective upon notice.

On September 9, 1994, respondent filed his answer to the complaints. He specifically denied all the accusations
against him and asked for the dismissal of the complaints.
On September 20, 1994, the Commission resolved to conduct a formal investigation of the case.
At the hearing, petitioners affirmed the contents of their affidavits and gave the specific dates during which the sexual
harassment took place. Petitioners categorically narrated the various incidents of sexual harassment, and they were
subjected to extensive cross-examination. On the other hand, five witnesses testified for the respondent including
himself. In essence, they testified that the sexual harassment could not have occurred.
On February 17, 1995, the Commission convinced that the complainants had proven the guilt of the respondent with
substantial evidence, issued a resolution finding respondent guilty of grave misconduct and meted out the penalty of
dismissal from the service with all its accessory penalties. [3]
On March 6, 1995, respondent filed a motion for reconsideration, alleging that the Commission erred because the
decision was not supported by evidence. [4]
On April 18, 1995, the Commission denied the motion for reconsideration. [5]
On June 16, 1995, respondent elevated the case to the Court of Appeals via petition for review. [6]
After due hearing, on September 22, 1995, the Court of Appeals promulgated its decision which REVERSED and SET
ASIDE the resolutions of the Civil Service Commission.
Hence, this appeal.[7]
The issue raised is whether the Court of Appeals erred in reversing the resolutions of the Civil Service Commission on
the ground that the same were not supported by substantial evidence.
The sexual harassment charges against Resma were filed by three (3) rank and file employees of the Agricultural
Training Institute, where respondent Paulino Resma is OIC. Being rank and file employees, they were all reporting to
their superior, Paulino Resma. Their time records were signed by the latter. Sexual harassment in the workplace is not
about a man taking advantage of a woman by reason of sexual desire; it is about power being exercised by a superior
officer over his women subordinates. The power emanates from the fact that the superior can remove the subordinate
from his workplace if the latter would refuse his amorous advances.
This is the situation at bar. Yolanda Floralde, Nida Velasco and Normelita Alambra were all rank and file employees
reporting to respondent Paulino Resma, and their Daily Time Records (DTRs) were signed by him.
Respondent Resma alleged that the Civil Service Commission erred in its resolutions since the petitioners were unable
to prove his guilt by the quantum of substantial evidence required in administrative proceedings.
We do not agree. The evidence adduced before the Commission consists of the positive testimonies of petitioners. On
the other hand, respondent claimed that it was impossible for him to be at the office on the days that the sexual
harassment occurred. In other words, respondent presented an alibi.
Yolanda Floralde testified that it was around four in the afternoon at the anteroom of the directors office that Paulino
Resma approached her and ask her " Ano yan, pagkatapos ako'y pinalapit sa kanyang kinaroroonan x x x nanatili
akong nakatayo ngunit maya-maya ay bigla na lang siyang tumayo at dinakma ang puwit ko ng papisilpisil." [8]
Floralde testified that this was not the only incident that respondent sexually harassed her. Respondent would
oftentimes tell her that "nakakagigil ang batok mo, " and "masuwerte ka type kita, yung iba may gusto sa akin di ko
type."[9] Respondent would also pinch her at her side close to her bust and when they met at the corridors respondent
would make a motion as though he would embrace her.
Nida Velasco on the other hand testified that in 1990 Paulino Resma first made his sexual advances toward her.
According to Velsaco "habang binubuksan ko po ang pinto ng refrigerator sa Orosa Hall, bigla po niya akong niyakap at
hinawakan niya ang maselang parte ng aking dibdib at bigla po akong hinalikan sa bibig. Binantaan po niya ako na
kapag nagsumbong ako ay hindi niya irerenew ang aking appointment dahil casual lang po ako." Nida further testified
that respondent would often comment that "mamula-mula na ang iyong pag-aari at fresh na fresh ka pa" and that she
would answer back "lolo ka na eh, gago ka pa. "[10] At one time she was watching a volleyball game when she felt
someone touch her buttocks, when she looked back it was respondent Resma, and the latter said "nakakagigil ka "[11]
Normelita Alhambra on her part testified that in 1990 at around 7:00 in the morning that after putting down her bag,
respondent Resma suddenly approached her and embraced her. She was able to escape from his embrace. In other
instances, Normelita testified that " tuwing maglalagay ako ng tubig sa baso sa loob ng CR biglang sumusulpot si Mr.
Resma at dinadakma ang puwit ko at sinasabing gustong-gusto niya ang malalaking puwit. "[12] Also at one time
Normelita testified that " nakasuot ako ng long sleeve na red at white maong pants galing ako sa CR ng bigla akong
binangga ni Mr. Resma at dinakma ang aking dibdib. [13]
Respondent's defense is that the complaints were instigated by a certain Atty. Ola, who was his rival for promotion.
The defense alleged that the three complaining petitioners were all convinced by Atty. Ola to file charges against
respondent Resma so that he would be out of contention for promotion.

We are not convinced that all three women would prevaricate at the mere urging of Atty. Ola. Filing a charge for sexual
harassment is not a trivial matter. It entails having to go public with an incident that one is trying to forget. It means
opening oneself to public ridicule and scrutiny. We, therefore, can not believe the version of the defense that the
charges were all fabricated.
As to the issue of whether the resolution of the Civil Service Commission is supported by substantial evidence, we find
that, in fact, preponderant evidence supported its findings.
"In determining where the preponderance or the superior weight of evidence on the issues involved lies, the court may
consider all the facts and circumstances of the case, the witnesses' manner of testifying, their intelligence, their
means and opportunity of knowing the facts on which they are testifying, the nature of such facts, the probability or
improbability of their testimony, their interest or want of interest, and also their personal credibility as far as the same
may legitimately appear at the trial. The Court may also consider the number of witnesses, although the
preponderance is not necessarily with the greatest number." [14] "By preponderance of evidence, is meant that the
evidence as a whole adduced by one side is superior to that of the other. [15]
"The concept of preponderance of evidence refers to evidence which is of greater weight, or more convincing, that
which is offered in opposition to it; at bottom, it means probability of truth." [16]
Consequently, the Court of Appeals erred in reversing the resolutions of the Civil Service Commission. "Well-settled is
the rule in our jurisdiction that the findings of fact of an administrative agency must be respected, as long as such
findings are supported by substantial evidence, even if such evidence might not be overwhelming or preponderant. It
is not the task of an appellate court to weigh once more the evidence submitted before the administrative body and to
substitute its own judgment for that of the administrative agency in respect of sufficiency of evidence." [17]
WHEREFORE, the Court REVERSES and SETS ASIDE the decision of the Court of Appeals. In lieu thereof, the Court
REVIVES and AFFIRMS the resolutions of the Civil Service Commission dismissing respondent Paulino W. Resma from
office for grave misconduct. No costs.
SO ORDERED.
PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION and/or FRANCIS CHUA, petitioners,
vs. NATIONAL LABOR RELATIONS COMMISSION and ROSALINDA C. CORTEZ, respondents.
This petition seeks to set aside the Decision of 15 February 1996 and the Resolution of 28 March 1996 of public
respondent National Labor Relations Commission in NLRC NCR CA No. 009753-95 (NLRC NCR Case No. 00-12-0875994) which modified the decision of the Labor Arbiter finding petitioners not guilty of illegal dismissal.
Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a corporation duly organized and existing under
Philippine laws, petitioner Francis Chua is its President while private respondent Rosalinda C. Cortez was a company
nurse[1] of petitioner corporation until her termination on 7 November 1994. Jlexj
On 5 October 1994 a memorandum was issued by Ms. Myrna Palomares, Personnel Manager of petitioner corporation,
addressed to private respondent Rosalinda C. Cortez requiring her to explain within forty-eight (48) hours why no
disciplinary action should be taken against her (a) for throwing a stapler at Plant Manager William Chua, her superior,
and uttering invectives against him on 2 August 1994; (b) for losing the amount of P1,488.00 entrusted to her by Plant
Manager Chua to be given to Mr. Fang of the CLMC Department on 23 August 1994; and, (c) for asking a co-employee
to punch-in her time card thus making it appear that she was in the office in the morning of 6 September 1994 when in
fact she was not. The memorandum however was refused by private respondent although it was read to her and
discussed with her by a co-employee. She did not also submit the required explanation, so that while her case was
pending investigation the company placed her under preventive suspension for thirty (30) days effective 9 October
1994 to 7 November 1994. Lexjuris
On 20 October 1994, while Cortez was still under preventive suspension, another memorandum was issued by
petitioner corporation giving her seventy-two (72) hours to explain why no disciplinary action should be taken against
her for allegedly failing to process the ATM applications of her nine (9) co-employees with the Allied Banking
Corporation. On 21 October 1994 private respondent also refused to receive the second memorandum although it was
read to her by a co-employee. A copy of the memorandum was also sent by the Personnel Manager to private
respondent at her last known address by registered mail. Jurismis
Meanwhile, private respondent submitted a written explanation with respect to the loss of the P1,488.00 and the
punching-in of her time card by a co-employee.
On 3 November 1994 a third memorandum was issued to private respondent, this time informing her of her
termination from the service effective 7 November 1994 on grounds of gross and habitual neglect of duties, serious
misconduct and fraud or willful breach of trust.[2]
On 6 December 1994 private respondent filed with the Labor Arbiter a complaint for illegal dismissal, non-payment of
annual service incentive leave pay, 13th month pay and damages against PAAUC and its president Francis Chua. [3]
On 10 July 1995 the Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, at the same
time dismissing her claim for damages for lack of merit. [4]

On appeal to the NLRC, public respondent reversed on 15 February 1996 the decision of the Labor Arbiter and found
petitioner corporation guilty of illegal dismissal of private respondent Cortez. The NLRC ordered petitioner PAAUC to
reinstate respondent Cortez to her former position with back wages computed from the time of dismissal up to her
actual reinstatement.[5]
On 11 March 1996 petitioners moved for reconsideration. On 28 March 1996 the motion was denied; [6] hence, this
petition for certiorari challenging the NLRC Decision and Resolution.
The crux of the controversy may be narrowed down to two (2) main issues: whether the NLRC gravely abused its
discretion in holding as illegal the dismissal of private respondent, and whether she is entitled to damages in the event
that the illegality of her dismissal is sustained. Jjjuris
The Labor Code as amended provides specific grounds by which an employer may validly terminate the services of an
employee,[7] which grounds should be strictly construed since a persons employment constitutes "property" under the
context of the constitutional protection that "no person shall be deprived of life, liberty or property without due process
of law" and, as such, the burden of proving that there exists a valid ground for termination of employment rests upon
the employer.[8] Likewise, in light of the employee's right to security of tenure, where a penalty less punitive than
dismissal will suffice, whatever missteps may have been committed by labor ought not to be visited with a
consequence so severe.[9]
A perusal of the termination letter indicates that private respondent was discharged from employment for "serious
misconduct, gross and habitual neglect of duties and fraud or willful breach of trust." Specifically -justice
1. On August 2, 1994, you committed acts constituting gross disrespect to your superior Mr. William Chua, the Plant
Manager.
2. On August 23, 1994, the Plant Manager entrusted you the amount of P1,488.00 to be sent to CLMC for Mr. Fang but
the money was allegedly lost in your possession and was not recovered.
3. On September 6, 1994, you caused someone else to punch-in your time card to show that you were at work when in
fact you were doing a personal errand for Richard Tan. As per time card you were in at 8:02 A.M. but you only arrived
at 12:35 P.M.
4. On July 28, 1994, you received an amount of P900.00 from Miss Lucy Lao to open an ATM card of nine (9)
employees. On September 24, 1994, one of the employees complained by the name of Tirso Aquino about the status
of his ATM Card and upon query from the bank it was found out that no application and no deposit for said person has
been made. Likewise, it was found out that you did not open the ATM Card and deposit the P800.00 for the 8 other
employees. It turned out that said deposit was made after a month later. [10]
As to the first charge, respondent Cortez claims that as early as her first year of employment her Plant Manager,
William Chua, already manifested a special liking for her, so much so that she was receiving special treatment from
him who would oftentimes invite her "for a date," which she would as often refuse. On many occasions, he would make
sexual advances - touching her hands, putting his arms around her shoulders, running his fingers on her arms and
telling her she looked beautiful. The special treatment and sexual advances continued during her employment for four
(4) years but she never reciprocated his flirtations, until finally, she noticed that his attitude towards her changed. He
made her understand that if she would not give in to his sexual advances he would cause her termination from the
service; and he made good his threat when he started harassing her. She just found out one day that her table which
was equipped with telephone and intercom units and containing her personal belongings was transferred without her
knowledge to a place with neither telephone nor intercom, for which reason, an argument ensued when she confronted
William Chua resulting in her being charged with gross disrespect. [11]
Respondent Cortez explains, as regards the second charge, that the money entrusted to her for transmittal was not
lost; instead, she gave it to the company personnel in-charge for proper transmittal as evidenced by a receipt duly
signed by the latter.[12]
With respect to the third imputation, private respondent admits that she asked someone to punch-in her time card
because at that time she was doing an errand for one of the company's officers, Richard Tan, and that was with the
permission of William Chua. She maintains that she did it in good faith believing that she was anyway only
accommodating the request of a company executive and done for the benefit of the company with the acquiescence of
her boss, William Chua. Besides, the practice was apparently tolerated as the employees were not getting any
reprimand for doing so.[13]
As to the fourth charge regarding her alleged failure to process the ATM cards of her co-employees, private respondent
claims that she has no knowledge thereof and therefore denies it. After all, she was employed as a company nurse and
not to process ATM cards for her co-employees. Jksm
The Supreme Court, in a litany of decisions on serious misconduct warranting dismissal of an employee, has ruled that
for misconduct or improper behavior to be a just cause for dismissal (a) it must be serious; (b) must relate to the
performance of the employees duties; and, (c) must show that the employee has become unfit to continue working for
the employer.[14] The act of private respondent in throwing a stapler and uttering abusive language upon the person of
the plant manager may be considered, from a lay man's perspective, as a serious misconduct. However, in order to
consider it a serious misconduct that would justify dismissal under the law, it must have been done in relation to the

performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of,
under the circumstances they were done, did not in any way pertain to her duties as a nurse. Her employment
identification card discloses the nature of her employment as a nurse and no other. [15] Also, the memorandum
informing her that she was being preventively suspended pending investigation of her case was addressed to her as a
nurse.[16]
As regards the third alleged infraction, i.e., the act of private respondent in asking a co-employee to punch-in her time
card, although a violation of company rules, likewise does notconstitute serious misconduct. Firstly, it was done by her
in good faith considering that she was asked by an officer to perform a task outside the office, which was for the
benefit of the company, with the consent of the plant manager. Secondly, it was her first time to commit such
infraction during her five (5)-year service in the company. Finally, the company did not lose anything by reason thereof
as the offense was immediately known and corrected. Es m
On alleged infraction No. 4, as may be gleaned from and admitted in the memorandum of petitioners to private
respondent dated 20 October 1994[17] and the notice of termination dated 3 November 1994, the money entrusted to
her was in fact deposited in the respective accounts of the employees concerned, although belatedly. We agree with
the submission of the Solicitor General that -Es msc
The mere delay/failure to open an ATM account for nine employees is not sufficient, by itself, to support a conclusion
that Rosalinda is guilty of gross and habitual neglect of duties. First, petitioner did not show that opening an ATM is
one of her primary duties as company nurse. Second, petitioner failed to show that Rosalinda intentionally, knowingly,
and purposely delayed the opening of ATM accounts for petitioners employees. It is of common knowledge that a bank
imposes upon an applicant certain requirements before an ATM account can be opened, i.e. properly filled up
application forms, identification cards, minimum deposit etc. In the instant case, petitioner did not prove that the delay
was caused by Rosalindas neglect or willful act (emphasis supplied). [18]
Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of
care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. [19] The negligence,
to warrant removal from service, should not merely be gross but also habitual. Likewise, the ground "willful breach by
the employee of the trust reposed in him by his employer" must be founded on facts established by the employer who
must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in
the employee may fairly be made to rest.[20] All these requirements prescribed by law and jurisprudence are wanting in
the case at bar.
On the issue of moral and exemplary damages, the NLRC ruled that private respondent was not entitled to recover
such damages for her failure to prove that petitioner corporation had been motivated by malice or bad faith or that it
acted in a wanton, oppressive or malevolent manner in terminating her services. In disbelieving the explanation
proffered by private respondent that the transfer of her table was the response of a spurned lothario, public
respondent quoted the Labor Arbiter Complainants assertion that the cause of the altercation between her and the Plant Manager where she threw a stapler
to him and uttered invectives against him was her refusal to submit to his advances to her which started from her
early days of employment and lasted for almost four years, is hardly believable. For indeed, if there was such
harassment, why was there no complaints (sic) from her during that period? Why did she stay there for so long?
Besides, it could not have taken that period for the Plant Manager to react. This assertion of the complainant deserves
no credence at all.[21]
Public respondent in thus concluding appears baffled why it took private respondent more than four (4) years to
expose William Chua's alleged sexual harassment. It reasons out that it would have been more prepared to support her
position if her act of throwing the stapler and uttering invectives on William Chua were her immediate reaction to his
amorous overtures. In that case, according to public respondent, she would have been justified for such outburst
because she would have been merely protecting her womanhood, her person and her rights.Esmm is
We are not persuaded. The gravamen of the offense in sexual harassment is not the violation of the employee's
sexuality but the abuse of power by the employer. Any employee, male or female, may rightfully cry "foul" provided
the claim is well substantiated. Strictly speaking, there is no time period within which he or she is expected to
complain through the proper channels. The time to do so may vary depending upon the needs, circumstances, and
more importantly, the emotional threshold of the employee. Esmso
Private respondent admittedly allowed four (4) years to pass before finally coming out with her employer's sexual
impositions. Not many women, especially in this country, are made of the stuff that can endure the agony and trauma
of a public, even corporate, scandal. If petitioner corporation had not issued the third memorandum that terminated
the services of private respondent, we could only speculate how much longer she would keep her silence. Moreover,
few persons are privileged indeed to transfer from one employer to another. The dearth of quality employment has
become a daily "monster" roaming the streets that one may not be expected to give up one's employment easily but
to hang on to it, so to speak, by all tolerable means. Perhaps, to private respondent's mind, for as long as she could
outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. This
uneasiness in her place of work thrived in an atmosphere of tolerance for four (4) years, and one could only imagine
the prevailing anxiety and resentment, if not bitterness, that beset her all that time. But William Chua faced reality
soon enough. Since he had no place in private respondent's heart, so must she have no place in his office. So, he

provoked her, harassed her, and finally dislodged her; and for finally venting her pent-up anger for years, he "found"
the perfect reason to terminate her. Mse sm
In determining entitlement to moral and exemplary damages, we restate the bases therefor. In moral damages, it
suffices to prove that the claimant has suffered anxiety, sleepless nights, besmirched reputation and social humiliation
by reason of the act complained of.[22] Exemplary damages, on the other hand, are granted in addition to, inter alia,
moral damages "by way of example or correction for the public good" [23] if the employer "acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner." [24]
Anxiety was gradual in private respondent's five (5)-year employment. It began when her plant manager showed an
obvious partiality for her which went out of hand when he started to make it clear that he would terminate her services
if she would not give in to his sexual advances. Sexual harassment is an imposition of misplaced "superiority" which is
enough to dampen an employee's spirit in her capacity for advancement. It affects her sense of judgment; it changes
her life. If for this alone private respondent should be adequately compensated. Thus, for the anxiety, the seen and
unseen hurt that she suffered, petitioners should also be made to pay her moral damages, plus exemplary damages,
for the oppressive manner with which petitioners effected her dismissal from the service, and to serve as a
forewarning to lecherous officers and employers who take undue advantage of their ascendancy over their
employees.Ex sm
All told, the penalty of dismissal is too excessive and not proportionate to the alleged infractions committed
considering that it does not appear that private respondent was an incorrigible offender or that she inflicted serious
damage to the company, nor would her continuance in the service be patently inimical to her employers interest.
[25]
Even the suspension imposed upon her while her case was pending investigation appears to be unjustified and
uncalled for.
WHEREFORE, the Decision of public respondent National Labor Relations Commssion finding the dismissal of private
respondent Rosalinda C. Cortez to be without just cause and ordering petitioners Philippine Aeolus Automotive United
Corporation and/or Francis Chua to pay her back wages computed from the time of her dismissal, which should
be full back wages, is AFFIRMED. However, in view of the strained relations between the adverse parties, instead of
reinstatement ordered by public respondent, petitioners should pay private respondent separation pay equivalent to
one (1) month salary for every year of service until finality of this judgment. In addition, petitioners are ordered to pay
private respondent P25,000.00 for moral damages and P10,000.00 for exemplary damages. Costs against
petitioners. Kyle
SO ORDERED.
DOMINGO V. RAYALA (ADMINISTRATIVE, REMEDIAL, JUDICIAL ETHICS)

Rayala accuses the Solicitor General of forum shopping because it files a motion for reconsideration of the decision on
CA-GR SP No. 61026 and then filed a comment in GR 155840 before this Court.
We do not agree.
FORUM SHOPPING is an act of a party, against an adverse judgment or order has been rendered in one forum, of
seeking and possibly securing a favorable opinion in another forum, other than by appeal or special civil action for
certiorari. It consists of filing multiple suits involving the same parties for the same cause of action, either
simultaneously or successively, for the purpose of obtaining a favorable judgment.
There is forum shopping when the following concur:
1.

identity of the parties or at least of the parties who represent the same interest on both actions;

2.

identity of the rights asserted and relief prayed for, as the latter is founded on the same set of facts; and

3.

identity of the two preceding particulars such that any judgment rendered in the other action will amount
tores judicata in the action under consideration or will constitute litis pendentia.

When the Republic opted to file a motion for reconsideration, it was merely exercising a right. That Rayala and
Domingo had by then already filed cases before the SC did not take away this right. Thus, when this Court directed the
Republic to file its Comment on Rayala's petition, it had to comply even if it had an unresolved motion for
reconsideration with the CA, lest it be cited for contempt.
As to the substantial issue, RA 7877 defines SEXUAL HARASSMENT as follows:
Section 1. Forms of Sexual Harassment - Sexual harassment may be committed in any of the following forms;
1.

overt sexual advances;

2.

unwelcome or improper gesture of affection;

3.

request or demand for sexual favors including but not limited to going out on dates, outing, or the like for the
same purpose;

4.

any other act or conduct of a sexual nature or for purposes of sexual gratification which is generally annoying,
disgusting, or offensive to the victim.

Rayala insisted that his acts do not constitute sexual harassment because Domingo did not allege in her complaint
that there was a demand, request, or requirement of a sexual favor as a condition for her continued employment or for
her promotion to a higher position.
Respondent's insistence is unconvincing.
Basic in the law of public officers is the THREE-FOLD LIABILITY RULE, which states that the wrongful acts or omissions
of a public officer may give rise to civil, criminal, and administrative liability. An action for each can proceed
independently of the others. This rule applies with full force to sexual harassment.
The law penalizing sexual harassment in our jurisdiction is RA 7877. The CA correctly ruled that Rayala's culpability is
not to be determined solely on the basis of RA 7877 because he is charged with the administrative offense, not the
criminal infraction of sexual harassment. It should be enough that the CA, along with the Investigating Committee and
the Office of the President, found substantial evidence to support the administrative charge.
Yet, even if we were to test Rayala's acts strictly by the standards set in RA 7877, he would still be administratively
liable. It is true that this calls for a demand, request, or requirement of a sexual favor. but it is not necessary that such
demand, request, or requirement of a sexual favor be articulated in a categorical oral or written statement. It may be
discerned, with equal certitude from the acts of the offender.
Likewise, it is not essential that the demand, request, or requirement be made as a condition for continued
employment or for promotion to a higher position. It is enough that respondent's acts result in creating an
intimidating, hostile, or offensive environment for the employee, which was clearly manifested by the fact that
Domingo filed for leave of absence and requested transfer to another unit.
CSC VS NIERRAS
This is a petition for review on certiorari seeking to annul and set aside the partially amended Decision [1] dated July 27,
2004 rendered by the Court of Appeals in CA-G.R. SP No. 64122, which reduced to six months without pay the penalty
of dismissal imposed on Nierras by the Civil Service Commission (CSC).
The dramatis personae in this case are complainant Olga C. Oa, a secretary of the Local Water Utilities Administration
(LWUA), and respondent Peter E. Nierras, the Acting General Manager of the Metro Carigara Water District, Leyte.
The antecedent facts of the case are as follows:
On July 17, 1994, Oa left for Leyte upon orders from her Department Manager, Hector Dayrit, to assist in the formation
of the San Isidro Water District. Upon arrival in TaclobanCity, Oa was endorsed by the LWUA management adviser to
Nierras.
On July 18, 1994, Oa and Nierras proceeded to San Isidro, Leyte, where she held a briefing for the local officials. After
the official briefing, Oa asked Nierras where the municipal mayor would accommodate her. Nierras replied that he
would accommodate her in his farm in Calubian. They then took a motorcycle to Calubian where, according to Oa,
Nierras already made passes at her.
In Calubian, they first deposited their personal belongings in the house of Nierras cousin where he said they would stay
for the night. Thereafter, they proceeded to Nierras farm.Upon their arrival, Nierras asked a tenant to purchase liquor
and invited the other tenants to a drinking spree. Around 10:30 p.m., Oa, already tired and sleepy, reminded Nierras
that they should go back to his cousins house to retire for the night. However, instead of going back, Nierras gave her
a sleeping mat, a blanket and a pillow and was told to rest.She then left and chose a corner in the balcony of the house
in the farm to sleep.
Around midnight, Oa was awakened when Nierras lay down beside her and crept underneath her blanket. To her
surprise, she saw that Nierras was half-naked with his pants already unzipped. She tried to run away but Nierras pulled
her and ordered her to go back to sleep. It was only when she screamed Ayoko, Ayoko, Ayoko! that Nierras stopped
grabbing and pulling her.
For his part, Nierras denied the charge and averred that when they were about to go back to the house of Nierras
cousin, Oa insisted that it would just be better if they slept at the farm. Nierras then managed to borrow one blanket,
one pillow and one mat. Thereafter, they lay down on the same mat and started conversing. During their conversation,
Oa said that she badly needed P5,000 at the moment. Oa asked Nierras if he could lend her the money. Shocked by
what Oa said, Nierras just laughed and expressed his amazement through a sarcastic smile. Thereafter, Oa never
talked anymore to Nierras.
After about an hour, Nierras said he saw that a part of the blanket was not being used by Oa. Because of the weather
and the swarm of mosquitoes, Nierras asked if he could use a part of the blanket. Oa kept mum so he managed to use

the unused part of the blanket to cover part of himself to lessen mosquito bites. When Oa felt that Nierras was using a
part of the blanket, she immediately stood up, bringing with her the pillow. She never came back to the place where
she slept.
On August 11, 1994, Oa filed an incident report[2] addressed to the Administrator of the LWUA, charging Nierras with
sexual harassment. She also implicated her immediate supervisors, Hector Dayrit and Francisco Bula, Jr., in the charge
for possible collusion and conspiracy for failure to act on her complaint despite being informed of what Nierras did to
her.
On October 28, 1994, Oa filed with the CSC an affidavit [3] for sexual harassment, grave misconduct and conduct
unbecoming a public officer. After a prior investigation, the CSC formally charged Nierras with grave misconduct after
finding a prima facie case against him. But finding no evidence of collusion with him, the CSC dismissed the complaint
against Dayrit and Bula.
On September 29, 2000, the CSC found Nierras guilty of Grave Misconduct. [4] The dispositive portion of the decision
states:
WHEREFORE, Peter E. Nierras is hereby found GUILTY of Grave Misconduct and is meted the penalty of dismissal from
the service with all the accessory penalties.
Let a copy of this Resolution as well as other relevant documents be furnished the Office of the Ombudsman for
whatever criminal action it may take under the premises. [5]
Nierras moved for reconsideration; however, the same was denied. Hence, he appealed to the Court of Appeals.
On March 5, 2004, the Court of Appeals promulgated a decision[6] affirming the resolutions issued by the CSC finding
Nierras guilty of grave misconduct through sexual harassment and upheld the penalty of dismissal imposed upon him.
Nierras filed a Motion for Reconsideration[7] dated March 30, 2004, asking the Court of Appeals to reverse its decision
and reduce the penalty of dismissal. On July 27, 2004, the Court of Appeals rendered the partially amended decision
reducing the penalty of dismissal to suspension of six months without pay on the basis of the Resolution dated July 8,
2004 of this Court in Veloso v. Caminade.[8] The dispositive portion of the said decision states:
WHEREFORE, our Decision promulgated on March 5, 2004 is hereby PARTIALLY AMENDED by reducing the penalty of
dismissal imposed on the petitioner by the Civil Service Commission to SIX (6) MONTHS of SUSPENSION WITHOUT PAY.
SO ORDERED.[9]
Hence, the instant petition, wherein petitioner poses a single issue for our resolution:
WHICH IS THE APPLICABLE RULING IN THE FACTS OF THIS CASE: VELOSO V. CAMINADE, 434 SCRA 1 (2004)
OR SIMBAJON V. ESTEBAN, 312 SCRA 192 (1999), DAWA V. ASA, 292 SCRA 701 (1998) AND ANALOGOUS DECISIONS. [10]
Simply put, the question raised could be restated as follows: Did the acts of respondent constitute grave misconduct
that warrant his dismissal from the service?
Petitioner prays that we sustain the original decision of the Court of Appeals penalizing Nierras with dismissal, and not
merely a six-month suspension without salary for immoral conduct.
For his part, respondent Nierras contends that the penalty to be meted to him should be equivalent to or even less
than what has been meted by this Court on Judge Caminade in the case of Veloso v. Caminade, because in the said
case more complaints of sexual harassments were filed against the judge and the standard of morality expected of a
judge is more exacting than that expected of an ordinary officer of the government.
Misconduct refers to intentional wrongdoing or deliberate violation of a rule of law or standard of behavior, especially
by a government official. To constitute an administrative offense, misconduct should relate to, or be connected with,
the performance of the official functions and duties of a public officer. Grave misconduct is distinguished from simple
misconduct in that the elements of corruption, clear intent to violate the law or flagrant disregard of established rule
must be manifest in grave misconduct. [11]
Otherwise stated, the misconduct is grave if it involves the additional element of corruption. [12] Corruption as an
element of grave misconduct consists of the act of an official or fiduciary person who unlawfully and wrongfully uses
his station or character to procure some benefit for himself or for another person, contrary to duty and the rights of
others.[13]
In this case, we find that the element of corruption is absent. Nierras did not use his position as Acting General
Manager of the Metro Carigara Water District in the act of sexually harassing Oa. In fact, it is established that Nierras
and Oa are not employed or connected with the same agency or instrumentality of the government. While this fact
would not negate the possibility that sexual harassment could be committed by one against the other, the same would
not warrant the dismissal of the offender because he did not use his position to procure sexual favors from Oa.
Under CSC Memorandum Circular No. 19, Series of 1994, [14] sexual harassment does not necessarily or automatically
constitute grave misconduct. Besides, under paragraph 2 of Section 1 thereof, sexual harassment constitutes a ground

for disciplinary action under the offense of Grave Misconduct, Conduct Prejudicial to the Best Interest of the Service, or
Simple Misconduct.
Petitioner alleged that the Court of Appeals erred in applying the case of Veloso v. Caminade in imposing the proper
penalty on Nierras since the facts of the case are different.Indeed, it should be noted that in the instant case, Oa and
Nierras are not co-employees while in the Caminade case, the complainants were the subordinates of the
offender. Also, in the Caminade case, there were several incidents of sexual harassment by a judge from whom the
expected standard of morality was more exacting. But here, there was only one incident of sexual harassment. If a sixmonth suspension can be meted to a judge from whom the expected standard of morality is more exacting, a fortiori,
the same or lesser penalty should be meted to Nierras. Moreover, in the Caminade case, the offender actually
forcefully kissed and grabbed the complainants. However, in this case, Oa was able to flee from the arms of Nierras
even before he could cause more harm to her. Under the circumstances of the present case, we agree with the Court
of Appeals that suspension of the offender for a period of six (6) months without pay is sufficient penalty.
Clearly, there is no doubt that the act of Nierras constituted misconduct. However, it would be inappropriate to impose
on him the penalty of dismissal from the service. Section 16, Rule XIV of the Rules Implementing Book V of Executive
Order No. 292 provides that in the determination of penalties to be imposed, mitigating and aggravating
circumstances may be considered.[15] Considering the fact that this is the first time that Nierras is being
administratively charged, it would be too harsh to impose on him the penalty of dismissal outright. Worth noting, in the
case of Civil Service Commission v. Belagan,[16] although the Court found that the act of the offending public official
constituted grave misconduct, still it did not impose the penalty of dismissal on him, considering the fact that it was
his first offense.[17]
The law does not tolerate misconduct by a civil servant. It should be sanctioned. Public service is a public trust and
whoever breaks that trust is subject to penalty. The issue, however, concerns the appropriate penalty. Dismissal with
forfeiture of benefits, in our view, should not be imposed for all infractions involving misconduct, particularly when it is
a first offense as in the instant case.[18] To conclude, given the circumstances of this case and of the precedents cited,
we are in agreement that suspension of respondent for six (6) months without pay is sufficient penalty.
WHEREFORE, the petition is hereby DISMISSED. The assailed Decision dated July 27, 2004 of the Court of Appeals
is AFFIRMED.
SO ORDERED.
(Villarama vs. NLRC, 236 SCRA 208 [1994].)
Villarama was employed by Golden Donuts as Material Manager. He was charged with sexual harassment by Divina, a
clerk-typist assigned in his department. The humiliating experience compelled her to resign from work.
Her resignation letter prompted the President of Golden Donuts, Inc., to call Villarama to a meeting and was then
required to explain the letter against him. It appears that Villarama agreed to tender his resignation. Thus, private
respondent approved petitioner's application for leave of absence with pay. Two (2) days later, Mr. Prieto sent a letter
to Villarama confirming their agreement that he would be officially separated from Golden Donuts.
In the interim, Villarama had a change of mind. In a letter addressed to Mr. Prieto, he sought reconsideration of the
management's decision to terminate him. For his failure to tender his resignation, Villarama was dismissed by Golden
Donuts. Feeling aggrieved, Villarama filed an illegal dismissal case against Golden Donuts.
The issue in this case was

whether or not there was valid cause to terminate Villarama.

The Supreme Court said that sexual harassment abounds in all sick societies. It is reprehensible enough but more so
when inflicted by those with moral ascendancy over their victims. The High Court ruled that sexual harassment was a
valid cause for separation from the service.
The procedure laid down under Article 277 of the Labor Code protects not only rank-and-file employees but also
managerial employees. Both have the right to security of tenure as provided for in Section 3, Article XIII of the 1987
Constitution. In the case at bench, Villarama decided to seek reconsideration of the termination of his service thru his
letter. While admitting his error, he felt that its gravity did not justify his dismissal. Considering this stance, and in
conformity with the aforequoted Article 277 (b) of the Labor Code, Villarama should have been formally charged and
given an opportunity to refute the charges. Under the facts, the Supreme Court held that Villarama was denied
procedural due process. Thus, Golden Donuts was penalized with nominal damages for non-observance of due
process.
However, loss of trust and confidence is a good ground for dismissing a managerial employee. As a managerial
employee, Villarama is bound by a more exacting work ethics. He failed to live up to this higher standard of
responsibility when he succumbed to his moral perversity. And when such moral perversity is perpetrated against his
subordinate, he provides justifiable ground for his dismissal for lack of trust and confidence. It is the right, nay, the
duty of every employer to protect its employees from over sexed superiors. (Villarama vs. NLRC, 236 SCRA 208
[1994].)
ROMULO, MABANTA, BUENAVENTURA, SAYOC & DE LOS ANGELES, petitioner, vs. HOME DEVELOPMENT
MUTUAL FUND, respondent.

Once again, this Court is confronted with the issue of the validity of the Amendments to the Rules and Regulations
Implementing Republic Act No. 7742, which require the existence of a plan providing for both provident/retirement and
housing benefits for exemption from the Pag~IBIG Fund coverage under Presidential Decree No. 1752, as amended.
Pursuant to Section 19[1] of P.D. No. 1752, as amended by R.A. No. 7742, petitioner Romulo, Mabanta, Buenaventura,
Sayoc and De Los Angeles (hereafter PETITIONER), a law firm, was exempted for the period 1 January to 31 December
1995 from the Pag~IBIG Fund coverage by respondent Home Development Mutual Fund (hereafter HDMF) because of a
superior retirement plan.[2]
On 1 September 1995, the HDMF Board of Trustees, pursuant to Section 5 of Republic Act No. 7742, issued Board
Resolution No. 1011, Series of 1995, amending and modifying the Rules and Regulations Implementing R.A. No. 7742.
As amended, Section 1 of Rule VII provides that for a company to be entitled to a waiver or suspension of Fund
coverage,[3] it must have a plan providing for both provident/ retirement and housing benefits superior to those
provided under the Pag~IBIG Fund.
On 16 November 1995, PETITIONER filed with the respondent an application for Waiver or Suspension of Fund
Coverage because of its superior retirement plan.[4] In support of said application, PETITIONER submitted to the HDMF
a letter explaining that the 1995 Amendments to the Rules are invalid. [5] Jksm
In a letter dated 18 March 1996, the President and Chief Executive Officer of HDMF disapproved PETITIONER's
application on the ground that the requirement that there should be both a provident retirement fund and a housing
plan is clear in the use of the phrase "and/or," and that the Rules Implementing R.A. No. 7742 did not amend nor
repeal Section 19 of P.D. No. 1752 but merely implement the law. [6]
PETITIONER's appeal[7] with the HDMF Board of Trustees was denied for having been rendered moot and academic by
Board Resolution No. 1208, Series of 1996, removing the availment of waiver of the mandatory coverage of the
Pag~IBIG Fund, except for distressed employers.[8]
On 31 March 1997, PETITIONER filed a petition for review [9] before the Court of Appeals. On motion by HDMF, the Court
of Appeals dismissed[10] the petition on the ground that the coverage of employers and employees under the Home
Development Mutual Fund is mandatory in character as clearly worded in Section 4 of P.D. No. 1752, as amended by
R.A. No. 7742. There is no allegation that petitioner is a distressed employer to warrant its exemption from the Fund
coverage. As to the amendments to the Rules and Regulations Implementing R.A. No. 7742, the same are valid. Under
P.D. No. 1752 and R.A. No. 7742 the Board of Trustees of the HDMF is authorized to promulgate rules and regulations,
as well as amendments thereto, concerning the extension, waiver or suspension of coverage under the Pag~IBIG Fund.
And the publication requirement was amply met, since the questioned amendments were published in the 21 October
1995 issue of the Philippine Star, which is a newspaper of general circulation.
PETITIONER's motion for reconsideration[11] was denied.[12] Hence, on 6 November 1997, PETITIONER filed a petition
before this Court assailing the 1995 and the 1996 Amendments to the Rules and Regulations Implementing Republic
Act No. 7742 for being contrary to law. In support thereof, PETITIONER contends that the subject 1995 Amendments
issued by HDMF are inconsistent with the enabling law, P.D. No. 1752, as amended by R.A. No. 7742, which merely
requires as a pre~condition for exemption from coverage the existence of either a superior provident/ retirement plan
or a superior housing plan, and not the concurrence of both plans. Hence, considering that PETITIONER has a provident
plan superior to that offered by the HDMF, it is entitled to exemption from the coverage in accordance with Section 19
of P.D. No. 1752. The 1996 Amendment are also void insofar as they abolished the exemption granted by Section 19 of
P.D. 1752, as amended. The repeal of such exemption involves the exercise of legislative power, which cannot be
delegated to HMDF. Kycalr
PETITIONER also cites Section 9 (1), Chapter 2, Book VII of the Administrative Code of 1987, which provides:
SEC. 9. Public Participation ~~ (1) If not otherwise required by law, an agency shall, as far as practicable, publish or
circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the
adoption of any rule.
Since the Amendments to the Rules and Regulations Implementing Republic Act No. 7742 involve an imposition of an
additional burden, a public hearing should have first been conducted to give chance to the employers, like
PETITIONER, to be heard before the HDMF adopted the said Amendments. Absent such public hearing, the
amendments should be voided.
Finally, PETITIONER contends that HDMF did not comply with Section 3, Chapter 2, Book VII of the Administrative Code
of 1987, which provides that "[e]very agency shall file with the University of the Philippines Law Center three (3)
certified copies of every rule adopted by it."
On the other hand, the HDMF contends that in promulgating the amendments to the rules and regulations which
require the existence of a plan providing for both provident and housing benefits for exemption from the Fund
Coverage, the respondent Board was merely exercising its rule-making power under Section 13 of P.D. No. 1752. It had
the option to use "and" only instead of "or" in the rules on waiver in order to effectively implement the Pag-IBIG Fund
Law. By choosing "and," the Board has clarified the confusion brought about by the use of "and/or" in Section 19 of P.D.
No. 1752, as amended.

As to the public hearing, HDMF maintains that as can be clearly deduced from Section 9(1), Chapter 2, book VII of the
Revised Administrative Code of 1987, public hearing is required only when the law so provides, and if not, only if the
same is practicable. It follows that public hearing is only optional or discretionary on the part of the agency concerned,
except when the same is required by law. P.D. No. 1752 does not require that pubic hearing be first conducted before
the rules and regulations implementing it would become valid and effective. What it requires is the publication of said
rules and regulations at least once in a newspaper of general circulation. Having published said 1995 and 1996
Amendments through the Philippine Star on 21 October 1995 [13] and 15 November 1996,[14] respectively, HDMF has
complied with the publication requirement.
Finally, HDMF claims that as early as 18 October 1996, it had already filed certified true copies of the Amendments to
the Rules and Regulations with the University of the Philippines Law Center. This fact is evidenced by certified true
copies of the Certification from the Office of the National Administrative Register of the U.P. Law Center. [15]
We find for the PETITIONER. Calrky
The issue of the validity of the 1995 Amendments to the Rules and Regulations Implementing R.A. No. 7742,
specifically Section I, Rule VII on Waiver and Suspension, has been squarely resolved in the relatively recent case of
China Banking Corp. v. The Members of the Board of Trustees of the HDMF.[16] We held in that case that Section 1 of
Rule VII of the Amendments to the Rules and Regulations Implementing R.A. No. 7742, and HDMF Circular No.
124~B prescribing the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of Fund
Coverage under P.D. No. 1752, as amended by R.A. No. 7742, are null and void insofar as they require that an
employer should have both a provident/ retirement plan and a housing plan superior to the benefits offered by the
Fund in order to qualify for waiver or suspension of the Fund coverage. In arriving at said conclusion, we ruled:
The controversy lies in the legal signification of the words "and/or."
In the instant case, the legal meaning of the words "and/or" should be taken in its ordinary signification, i.e., "either
and or; e.g. butter and/or eggs means butter and eggs or butter or eggs.
"The term and/or means that the effect shall be given to both the conjunctive "and" and the disjunctive "or"; or that
one word or the other may be taken accordingly as one or the other will best effectuate the purpose intended by the
legislature as gathered from the whole statute. The term is used to avoid a construction which by the use of the
disjunctive "or" alone will exclude the combination of several of the alternatives or by the use of the conjunctive "and"
will exclude the efficacy of any one of the alternatives standing alone."
It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the word "and"
and the word "or" are to be used interchangeably.
It ... seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752 intended that an
employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from
coverage. If the law had intended that the employee [sic] should have both a superior provident plan and a housing
plan in order to qualify for exemption, it would have used the words "and" instead of "and/or." Notably, paragraph (a)
of Section 19 requires for annual certification of waiver or suspension, that the features of the plan or plans are
superior to the fund or continue to be so. The law obviously contemplates that the existence of either plan is
considered as sufficient basis for the grant of an exemption; needless to state, the concurrence of both plans is more
than sufficient. To require the existence of both plans would radically impose a more stringent condition for waiver
which was not clearly envisioned by the basic law. By removing the disjunctive word "or" in the implementing rules the
respondent Board has exceeded its authority. Slx
It is without doubt that the HDMF Board has rule~making power as provided in Section 5 [17] of R.A. No. 7742 and
Section 13[18] of P.D. No. 1752. However, it is well~settled that rules and regulations, which are the product of a
delegated power to create new and additional legal provisions that have the effect of law, should be within the scope
of the statutory authority granted by the legislature to the administrative agency. [19] It is required that the regulation
be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the
standards prescribed by law.[20]
In the present case, when the Board of Trustees of the HDMF required in Section 1, Rule VII of the 1995 Amendments
to the Rules and Regulations Implementing R.A. No. 7742 that employers should have both
provident/retirement and housing benefits for all its employees in order to qualify for exemption from the Fund, it
effectively amended Section 19 of P.D. No. 1752. And when the Board subsequently abolished that exemption through
the 1996 Amendments, it repealed Section 19 of P.D. No. 1752. Such amendment and subsequent repeal of Section 19
are both invalid, as they are not within the delegated power of the Board. The HDMF cannot, in the exercise of its
rule~making power, issue a regulation not consistent with the law it seeks to apply. Indeed, administrative issuances
must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out.
[21]
Only Congress can repeal or amend the law. Scslx
While it may be conceded that the requirement of having both plans to qualify for an exemption, as well as the
abolition of the exemption, would enhance the interest of the working group and further strengthen the Home
Development Mutual Fund in its pursuit of promoting public welfare through ample social services as mandated by the
Constitution, we are of the opinion that the basic law should prevail. A department zeal may not be permitted to
outrun the authority conferred by the statute.[22]

Considering the foregoing conclusions, it is unnecessary to dwell on the other issues raised.
WHEREFORE, the petition is GRANTED. The assailed decision of 31 July 1997 of the Court of Appeals in CA~G.R. No.
SP~43668 and its Resolution of 15 October 1997 are hereby REVERSED and SET ASIDE. The disapproval by the Home
Development Mutual Fund of the application of the petitioner for waiver or suspension of Fund coverage is SET ASIDE,
and the Home Development Mutual Fund is hereby directed to refund to petitioner all sums of money it collected from
the latter.
SO ORDERED. Slxsc
IN RE: PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL SECURITY SYSTEM. ROMAN CATHOLIC
ARCHBISHOP OF MANILA, petitioner-appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.
On September 1, 1958, the Roman Catholic Archbishop of Manila, thru counsel, filed with the Social Security
Commission a request that "Catholic Charities, and all religious and charitable institutions and/or organizations, which
are directly or indirectly, wholly or partially, operated by the Roman Catholic Archbishop of Manila," be exempted from
compulsory coverage of Republic Act No. 1161, as amended, otherwise known as the Social Security Law of 1954. The
request was based on the claim that the said Act is a labor law and does not cover religious and charitable institutions
but is limited to businesses and activities organized for profit. Acting upon the recommendation of its Legal Staff, the
Social Security Commission in its Resolution No. 572, series of 1958, denied the request. The Roman Catholic
Archbishop of Manila, reiterating its arguments and raising constitutional objections, requested for reconsideration of
the resolution. The request, however, was denied by the Commission in its Resolution No. 767, series of 1958; hence,
this appeal taken in pursuance of section 5(c) of Republic Act No. 1161, as amended.
Section 9 of the Social Security Law, as amended, provides that coverage "in the System shall be compulsory upon all
members between the age of sixteen and sixty rears inclusive, if they have been for at least six months a the service
of an employer who is a member of the System, Provided, that the Commission may not compel any employer to
become member of the System unless he shall have been in operation for at least two years and has at the time of
admission, if admitted for membership during the first year of the System's operation at least fifty employees, and if
admitted for membership the following year of operation and thereafter, at least six employees x x x." The term
employer" as used in the law is defined as any person, natural or juridical, domestic or foreign, who carries in the
Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person
who is under his orders as regards the employment, except the Government and any of its political subdivisions,
branches or instrumentalities, including corporations owned or controlled by the Government" (par. [c], see. 8), while
an "employee" refers to "any person who performs services for an 'employer' in which either or both mental and
physical efforts are used and who receives compensation for such services" (par. [d], see. 8). "Employment", according
to paragraph [i] of said section 8, covers any service performed by an employer except those expressly enumerated
thereunder, like employment under the Government, or any of its political subdivisions, branches or instrumentalities
including corporations owned and controlled by the Government, domestic service in a private home, employment
purely casual, etc.
From the above legal provisions, it is apparent that the coverage of the Social Security Law is predicated on the
existence of an employer-employee relationship of more or less permanent nature and extends to employment of all
kinds except those expressly excluded.
Appellant contends that the term "employer" as defined in the law should following the principle of ejusdem
generis be limited to those who carry on "undertakings or activities which have the element of profit or gain, or
which are pursued for profit or gain," because the phrase ,activity of any kind" in the definition is preceded by the
words "any trade, business, industry, undertaking." The contention cannot be sustained. The rule ejusdem
generis applies only where there is uncertainty. It is not controlling where the plain purpose and intent of the
Legislature would thereby be hindered and defeated. (Grosjean vs. American Paints Works [La], 160 So. 449). In the
case at bar, the definition of the term "employer" is, we think, sufficiently comprehensive as to include religious and
charitable institutions or entities not organized for profit, like herein appellant, within its meaning. This is made more
evident by the fact that it contains an exception in which said institutions or entities are not included. And, certainly,
had the Legislature really intended to limit the operation of the law to entities organized for profit or gain, it would not
have defined an "employer" in such a way as to include the Government and yet make an express exception of it.
It is significant to note that when Republic Act No. 1161 was enacted, services performed in the employ of institutions
organized for religious or charitable purposes were by express provisions of said Act excluded from coverage thereof
(sec. 8, par. [j] subpars. 7 and 8). That portion of the law, however, has been deleted by express provision of Republic
Act No. 1792, which took effect in 1957. This is clear indication that the Legislature intended to include charitable and
religious institutions within the scope of the law.
In support of its contention that the Social Security Law was intended to cover only employment for profit or gain,
appellant also cites the discussions of the Senate, portions of which were quoted in its brief. There is, however, nothing
whatsoever in those discussions touching upon the question of whether the law should be limited to organizations for
profit or gain. Of course, the said discussions dwelt at length upon the need of a law to meet the problems of
industrializing society and upon the plight of an employer who fails to make a profit. But this is readily explained by

the fact that the majority of those to be affected by the operation of the law are corporations and industries which are
established primarily for profit or gain.
Appellant further argues that the Social Security Law is a labor law and, consequently, following the rule laid down in
the case of Boy Scouts of the Philippines vs. Araos (G.R. No. L-10091, January 29, 1958) and other cases1, applies only
to industry and occupation for purposes of profit and gain. The cases cited, however, are not in point, for the reason
that the law therein involved expressly limits its application either to commercial, industrial, or agricultural
establishments, or enterprises. .
Upon the other hand, the Social Security Law was enacted pursuant to the "policy of the Republic of the Philippines to
develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people
throughout the Philippines and shall provide protection to employees against the hazards of disability, sickness, old
age and death." (See. 2, Republic Act No. 1161, as amended.) Such enactment is a legitimate exercise of the police
power. It affords protection to labor, especially to working women and minors, and is in full accord with the
constitutional provisions on the "promotion of social justice to insure the well-being and economic security of all the
people." Being in fact a social legislation, compatible with the policy of the Church to ameliorate living conditions of
the working class, appellant cannot arbitrarily delimit the extent of its provisions to relations between capital and labor
in industry and agriculture.
There is no merit in the claim that the inclusion of religious organizations under the coverage of the Social Security
Law violates the constitutional prohibition against the application of public funds for the use, benefit or support of any
priest who might be employed by appellant. The funds contributed to the System created by the law are not public
funds, but funds belonging to the members which are merely held in trust by the Government. At any rate, assuming
that said funds are impressed with the character of public funds, their payment as retirement death or disability
benefits would not constitute a violation of the cited provisions of the Constitution, since such payment shall be made
to the priest not because he is a priest but because he is an employee.
Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right to
disseminate religious information. All that is required of appellant is to make monthly contributions to the System for
covered employees in its employ. These contributions, contrary to appellant's contention, are not in the nature of taxes
on employment." Together with the contributions imposed upon the employees and the Government, they are
intended for the protection of said employees against the hazards of disability, sickness, old age and death in line with
the constitutional mandate to promote social justice to insure the well-being and economic security of all the people.
IN VIEW OF THE FOREGOING, Resolutions Nos. 572 kind 767, series of 1958, of the Social Security Commission are
hereby affirmed. So ordered with costs against appellant.
FRANKLIN BAKER COMPANY OF THE PHILIPPINES, petitioner-appellant,
vs.
SOCIAL SECURITY SYSTEM, respondent-appellee.
Appeal from the ruling of the Social Security Commission dismissing petition for reconsideration of an order of
respondent Social Security System.
Petitioner-appellant Franklin Baker Company of the Philippines is engaged in the manufacture of dessicated coconut in
San Pablo City. The deceased Tomas Zamora was one of its employees. Both were compulsory members of the Social
Security System.
Due to the annual overhauling of its machinery and also to lack of production orders from its mother company in the
United States petitioner temporarily ceased its operations from December 22, 1957 to February 18, 1958. Zamora
rendered no actual services during that period. He then went on sick leave without pay from March 9, 1958, up to the
day of his death, June 13, 1958.
On July 10, 1958 the System received a death claim application from petitioner for and in behalf of the designated
beneficiaries of the deceased employee. After processing the claim the System found that no premium remittances
had been made for him for the months of February, March, and June, 1958. Of the unpaid premiums, P5.85 was
chargeable to the employee while P8.18 was due from the employer-petitioner. The employee's share of the unpaid
premiums was subsequently deducted from the death benefits awarded to his beneficiaries and the System billed
petitioner for its share.
Under Resolution No. 139, Series of 1958, the Social Security Commission adopted the rule that "employers are liable
to the 3-1/2% company's share during the months when there are no premiums remitted, if there is existing employeremployee relationship between them during those months." Petitioner excepted to the System's demand for payment
by filing a petition for reconsideration with the Commission. On April 28, 1960 the Commission resolved to dismiss said
petition, and the case is now before us on appeal from the resolution of dismissal.
Petitioner raises two issues: (1) that the employer is not liable for its share of the premiums during the period when the
employee is on leave without pay since he receives no compensation; and (2) that the adoption of a "theoretical
salary" basis upon which the employer's liability of 3-1/2% is computed during the time that the employee receives no
compensation is erroneous.

The first issue has already been resolved by us in several cases. Insular Lumber Co. vs. SSS, G.R. No. L-17623, Jan. 31,
1963; Roman Archbishop of Manila vs. SSS, G.R. No. L-15045, Jan. 20, 1961; Insular Life Assurance Co., Ltd., et al. vs.
SSS, G.R. No. L-16359, Dec. 28, 1961. In those cases we held:
... payment of contributions by an employer is compulsory during its coverage, and in accordance with the provisions
of Section 9 of the Social Security Act, coverage is determined solely by the existence of an employer-employee
relationship. While an employee is on leave, even without pay, he is still an employee of his employer, their contract of
employment has not yet terminated. So much so that the employee may still return to work and the employer is still
bound to accept him. His responsibility as an employee still exists. He is still entitled to the benefits of the System
when he returns. Consequently, his employer is still liable to pay his contributions to the Commission on account of its
employee who is on leave without pay.
The ruling of the Commission adopting the "theoretical salary" basis assailed by petitioner under the second issue
raised by it in this appeal reads as follows:
Neither does the absence of compensation for the employee for a particular month militate against the adoption of a
theoretical salary upon which the premium contributions are to be based. In such cases, this Commission has adopted
the policy that where an employee does not earn any compensation for a particular month, the basis for his premium
contributions shall be the salary for the month immediately preceding the wageless month or, in case of a variable
wage earner, then, it shall be his daily rate of compensation multiplied by the number of days in which he would have
worked for that wageless month (Circulars Nos. 21 and 24). The adoption of such a theoretical salary is justified on the
ground that during the period when the employer-employee relationship subsists, there is a legal obligation to remit
premium contributions to the System for the benefit of the employee.
Petitioner contends that the adoption of the so-called "theoretical salary" basis is beyond the authority and
competence of the Social Security Commission, as it is not justified by the Social Security Act (R. A. 1161, as amended
by Act 1792), particularly section 19 thereof which defines the employer's obligation to contribute to the System. This
section provides:
SEC. 19. Employer's contribution. Beginning as of the last day of the month immediately preceding the month when
an employee's compulsory coverage takes effect and every month thereafter during his employment, his employer
shall pay, with respect to such covered employee in his employ, a monthly contribution equal to three and a half per
centum of the monthly compensation of said covered employee. Notwithstanding any contract to the contrary, an
employer shall not deduct, directly or indirectly, from the compensation of his employees covered by the System or
otherwise recover from them the employer's contribution with respect to such employees. (As amended by Section 11,
R.A. 1792)
Since the deceased employee, Tomas Zamora, received no compensation for the period in question, petitioner
maintains that the imposition of a 3-1/2% monthly contribution upon the employer on the basis of the monthly
"theoretical" compensation is in effect a deviation from or an amendment of the statute, which only Congress can
make, We do not think this view is correct. The obligation of the employer to contribute its share to the System is
effective during the existence of the employer-employee relationship. This is already settled in several cases (supra),
and implicit in the provision aforequoted which says that the employer shall pay the 3-1/2% contribution "beginning as
of the last day of the month immediately preceding the month when an employee's compulsory coverage takes effect
and every month thereafter during his employment ...." The time when an employee may not be actual receiving
compensation, as when he is on sick leave without pay, is not excepted. Obviously, inasmuch as the obligation to
contribute does not cease during that period, a reasonable basis for computing the amount of the contribution must be
adopted; and the one prescribed by the Commission in its circulars Nos. 21 and 24 and applied in the case at bar is
reasonable, both on legal and actuarial considerations. It does not amount to legislation, but merely implementation of
the existing statute. The provisions of the Social Security Act should be liberally construed in favor of those seeking its
benefits. "Any interpretation which would defeat rather than promote the ends for which the Social Security Act was
enacted should be eschewed. 1
The resolution appealed from, passed by the Social Security Commission on April 28, 1960, is affirmed, with costs
against petitioner-appellant.
JOSE P. TECSON, Petitioner-Appellant, vs. SOCIAL SECURITY SYSTEM, Respondent-Appellee.
This is an appeal from a decision or ruling of the Social Security Commission denying payment of death benefits to Jose
P. Tecson, the beneficiary of an employee of Yuyitung Publishing Company, by the name of Lim
Hoc.chanroblesvirtualawlibrarychanrobles virtual law library
The facts as found by the Social Security Commission are as follows:
The facts attendant are as follows: The late Lim Hoc, a former employee of the Yuyitung Publishing Company, was, at
the time of his death on November 3, 1957, a member of the System, having qualified as such on September 1, 1957.
In the SSS-Form E-1 accomplished and filed by him with the System, he gave his civil status as married, but made no
mention of the members of his family or other relatives. Instead, he designated therein the petitioner Jose P. Tecson,
reportedly a friend and co-worker of his, as his beneficiary. After the death of Lim Hoc, petitioner, in his capacity as the
designated beneficiary, filed with the System a claim for death benefits. (ROA, p. 31).

In denying the petition of Tecson the Social Security Commission states that the legislative policy underlying the
system is to grant and afford protection to the covered employee as well as his family; that while Section 13 of the law
(Rep. Act No. 1161 as amended) makes mention of the beneficiary as recorded by his employer, it is not just anyone
that the employee designates who may be appointed his beneficiary because Section 24 (a) of the law clearly provides
that the employer shall report to the system the names, ages, civil status, salaries and dependents of employees, and
paragraph (a) of the same section provides that if an employee subject to compulsory coverage should die or become
sick or disabled without the System having previously received a report about him from his employer, the said
employer shall pay to the employee or his legal heirs, damages, etc.chanroblesvirtualawlibrarychanrobles virtual law
library
It may be true that the purpose of the coverage under the Social Security System is protection of the employee as well
as of his family, but this purpose or intention of the law cannot be enforced to the extent of contradicting the very
provisions of said law as contained in Section 13, thereof, as follows:
Section 13. - Upon the covered employee's death or total and permanent disability under such conditions as the
Commission may define, before becoming eligible for retirement and if either such death or disability is not
compensable under the Workmen's Compensation Act, he or, in case of his death, his beneficiaries as recorded by his
employer shall be entitled to the following benefit: ... (R.A. 1161 as amended.)
When the provisions of a law are clear and explicit, the courts can do nothing but apply its clear and explicit provisions.
(Velasco v. Lopez, 1 Phil. 720; Caminetti vs. U.S., 242 U.S. 470, 61 L. ed. 442).chanroblesvirtualawlibrarychanrobles
virtual law library
It should be remembered that the benefits or compensation allowed an employee or his beneficiary under the
provisions of the Social Security Act are paid out of funds which are contributed in part by the employees and in part
by the employers' (commercial or industrial companies members of the System). Sections 18 and 19 of the Social
Security Act (Republic Act No. 1161 as amended) provide that 2-% of the salary of an employee subject to
compulsory coverage, shall be deducted and withheld from his monthly compensation and paid over to the System,
while the employer for his part contributes another amount of 3-% of the salary of said employee. The contributions
are collected by the System, which acts as the trustee of such funds. It is provided also in the Act that of the total
yearly collection not more than 12% during the first two year of the operation of the System and not more than 10%
during any year thereafter shall be disbursed for salaries and wages of the employees of the System (Sec. 24). A
certain percentage of the funds of the System may be invested in interest-bearing bonds and deposits and in loans or
advances to the National Government (Sec. 25). As these funds are obtained from the employees and the employers,
without the Government having contributed any portion thereof, it would be unjust for the System to refuse to pay the
benefits to those whom the employee has designated as his beneficiaries. The contribution of the employee is his
money; the contribution of the employer is for the benefit of the employee. Hence the beneficiary should primarily be
the one to profit by such contributions. This is what is expressly provided in above-quoted Section 13 of the
law.chanroblesvirtualawlibrarychanrobles virtual law library
It should also be noted that the Social Security System is not a law of succession. Its purpose is to provide social
security, which means funds for the beneficiary, if the employee dies, or for the employee himself and his dependents
if he is unable to perform his task because of illness or disability, or is laid off by reason of the termination of the
employment, or because of temporary lay-off due to strike, etc. It should also be remembered that the beneficiaries of
the System are those who dependent upon the employee for support. Section 23 of the law (before its amendment by
Republic Act No. 2658, which took effect on June 18, 1960) requires the employer to report and transmit to the System
such record of the names, ages, civil status, occupations, salaries anddependents of all his employees. It is not the
heirs of the employee who are to receive the benefits or compensation. It is only in case the benificiary is the estate,
or if there is none designated, or if the designation is void, that the System is required to pay the employee's heirs.
Such is the express provision of Section 15 of the same Act, as amended.chanroblesvirtualawlibrarychanrobles virtual
law library
The Commission held that under its regulations, which are quoted below, the employee must choose the beneficiaries
from anyone of the persons enumerated therein:
(a) The following persons may be designated as beneficiaries entitled to receive death benefits provided they have
been registered as such in the records of the System prior to said employee's death, to wit:chanrobles virtual law
library
(1) The legitimate widow or widower if not legally separated from the deceased; chanrobles virtual law library
(2) Legitimate and/or legitimated children; chanrobles virtual law library
(3) Grandchildren;chanrobles virtual law library
(4) Parents; chanrobles virtual law library
(5) Grandparents;chanrobles virtual law library
(6) Natural children duly acknowledged;chanrobles virtual law library
(7) Brothers and/or sisters;chanrobles virtual law library

(8) In the absence of any of the foregoing relatives, any other person designated by the employee. (Rule 7, [3], of the
Rules and Regulations of the Social Security System).
The above rule indicates the persons that may be designated as beneficiaries. The deceased Lim Hoc must have
designated Jose P. Tecson as his beneficiary under the provisions of Section 23 of the Act. The employer must have
received no information from the deceased employee Lim Hoc about the existence of Lim Hoc's wife and children, their
names, ages, civil status, occupations, salaries, etc. It was subsequently known that Lim Hoc had a wife and children in
Communist China; the omission by him of their existence and names in the records of the employer must have been
due to the fact that they were not at the time, at least, dependent upon him. If they were actually dependents, their
names would have appeared in the record of the employer. The absence in the record of his employee of their
existence and names must have been due to the lack of communication, of which We can take judicial notice, between
Communist China and the Philippines, or to the express desire of Lim Hoc to extend the benefits of his contributions to
the system to his "friend and co-worker", to the exclusion of his wife. It is to be noted also that the funeral expenses of
Lim Hoc are to be paid from the benefits, so that what is to be paid to Tecson would be greatly
reduced.chanroblesvirtualawlibrarychanrobles virtual law library
FOR ALL THE FOREGOING CONSIDERATIONS, the resolution should be, as it is hereby, set aside and annulled, and the
respondent System is hereby ordered to pay the monetary claim of Jose P. Tecson. Without costs.chanroblesvirtu
SOCIAL SECURITY SYSTEM, petitioner-appellee,
vs.
CANDELARIA D. DAVAC, ET AL., respondents;
LOURDES Tuplano, respondent-appellant.
This is an appeal from the resolution of the Social Security Commission declaring respondent Candelaria Davac as the
person entitled to receive the death benefits payable for the death of Petronilo Davac.
The facts of the case as found by the Social Security Commission, briefly are: The late Petronilo Davac, a former
employee of Lianga Bay Logging Co., Inc. became a member of the Social Security System (SSS for short) on
September 1, 1957. As such member, he was assigned SS I.D. No. 08-007137. In SSS form E-1 (Member's Record)
which he accomplished and filed with the SSS on November 21, 1957, he designated respondent Candelaria Davac as
his beneficiary and indicated his relationship to her as that of "wife". He died on April 5, 1959 and, thereupon, each of
the respondents (Candelaria Davac and Lourdes Tuplano) filed their claims for death benefit with the SSS. It appears
from their respective claims and the documents submitted in support thereof, that the deceased contracted two
marriages, the first, with claimant Lourdes Tuplano on August 29, 1946, who bore him a child, Romeo Davac, and the
second, with Candelaria Davac on January 18, 1949, with whom he had a minor daughter Elizabeth Davac. Due to their
conflicting claims, the processing thereof was held in abeyance, whereupon the SSS filed this petition praying that
respondents be required to interpose and litigate between themselves their conflicting claims over the death benefits
in question.1wph1.t
On February 25, 1963, the Social Security Commission issued the resolution referred to above, Not satisfied with the
said resolution, respondent Lourdes Tuplano brought to us the present appeal.
The only question to be determined herein is whether or not the Social Security Commission acted correctly in
declaring respondent Candelaria Davac as the person entitled to receive the death benefits in question.
Section 13, Republic Act No. 1161, as amended by Republic Act No. 1792, in force at the time Petronilo Davac's death
on April 5, 1959, provides:
1. SEC. 13. Upon the covered employee's death or total and permanent disability under such conditions as the
Commission may define, before becoming eligible for retirement and if either such death or disability is not
compensable under the Workmen's Compensation Act, he or, in case of his death, his beneficiaries, as recorded by his
employer shall be entitled to the following benefit: ... . (emphasis supplied.)
Under this provision, the beneficiary "as recorded" by the employee's employer is the one entitled to the death
benefits. In the case of Tecson vs. Social Security System, (L-15798, December 28, 1961), this Court, construing said
Section 13, said:
It may be true that the purpose of the coverage under the Social Security System is protection of the employee as well
as of his family, but this purpose or intention of the law cannot be enforced to the extent of contradicting the very
provisions of said law as contained in Section 13, thereof, ... . When the provision of a law are clear and explicit, the
courts can do nothing but apply its clear and explicit provisions (Velasco vs. Lopez, 1 Phil, 270; Caminetti vs. U.S., 242
U.S. 470, 61 L. ed. 442).
But appellant contends that the designation herein made in the person of the second and, therefore, bigamous wife is
null and void, because (1) it contravenes the provisions of the Civil Code, and (2) it deprives the lawful wife of her
share in the conjugal property as well as of her own and her child's legitime in the inheritance.
As to the first point, appellant argues that a beneficiary under the Social Security System partakes of the nature of a
beneficiary in life insurance policy and, therefore, the same qualifications and disqualifications should be applied.
Article 2012 of the New Civil Code provides:

ART. 2012. Any person who is forbidden from receiving any donation under Article 739 cannot be named beneficiary of
a life insurance policy by the person who cannot make any donation to him according to said article.
And Article 739 of the same Code prescribes:
ART. 739. The following donations shall be void:
(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;
xxx

xxx

xxx

Without deciding whether the naming of a beneficiary of the benefits accruing from membership in the Social Security
System is a donation, or that it creates a situation analogous to the relation of an insured and the beneficiary under a
life insurance policy, it is enough, for the purpose of the instant case, to state that the disqualification mentioned in
Article 739 is not applicable to herein appellee Candelaria Davac because she was not guilty of concubinage, there
being no proof that she had knowledge of the previous marriage of her husband Petronilo. 1
Regarding the second point raised by appellant, the benefits accruing from membership in the Social Security System
do not form part of the properties of the conjugal partnership of the covered member. They are disbursed from a public
special fund created by Congress in pursuance to the declared policy of the Republic "to develop, establish gradually
and perfect a social security system which ... shall provide protection against the hazards of disability, sickness, old
age and death."2
The sources of this special fund are the covered employee's contribution (equal to 2- per cent of the employee's
monthly compensation);3 the employer's contribution (equivalent to 3- per cent of the monthly compensation of the
covered employee);4 and the Government contribution which consists in yearly appropriation of public funds to assure
the maintenance of an adequate working balance of the funds of the System. 5 Additionally, Section 21 of the Social
Security Act, as amended by Republic Act 1792, provides:
SEC. 21. Government Guarantee. The benefits prescribed in this Act shall not be diminished and to guarantee said
benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the
System.
From the foregoing provisions, it appears that the benefit receivable under the Act is in the nature of a special privilege
or an arrangement secured by the law, pursuant to the policy of the State to provide social security to the
workingmen. The amounts that may thus be received cannot be considered as property earned by the member during
his lifetime. His contribution to the fund, it may be noted, constitutes only an insignificant portion thereof. Then, the
benefits are specifically declared not transferable,6 and exempted from tax legal processes, and lien.7Furthermore, in
the settlement of claims thereunder the procedure to be observed is governed not by the general provisions of law,
but by rules and regulations promulgated by the Commission. Thus, if the money is payable to the estate of a
deceased member, it is the Commission, not the probate or regular court that determines the person or persons to
whom it is payable.8 that the benefits under the Social Security Act are not intended by the lawmaking body to form
part of the estate of the covered members may be gathered from the subsequent amendment made to Section 15
thereof, as follows:
SEC. 15. Non-transferability of benefit. The system shall pay the benefits provided for in this Act to such persons as
may be entitled thereto in accordance with the provisions of this Act. Such benefits are not transferable, and no power
of attorney or other document executed by those entitled thereto in favor of any agent, attorney, or any other
individual for the collection thereof in their behalf shall be recognized except when they are physically and legally
unable to collect personally such benefits: Provided, however, That in the case of death benefits, if no beneficiary has
been designated or the designation there of is void, said benefits shall be paid to the legal heirs in accordance with the
laws of succession. (Rep. Act 2658, amending Rep. Act 1161.)
In short, if there is a named beneficiary and the designation is not invalid (as it is not so in this case), it is not the heirs
of the employee who are entitled to receive the benefits (unless they are the designated beneficiaries themselves). It
is only when there is no designated beneficiaries or when the designation is void, that the laws of succession are
applicable. And we have already held that the Social Security Act is not a law of succession. 9
Wherefore, in view of the foregoing considerations, the resolution of the Social Security Commission appealed from is
hereby affirmed, with costs against the appellant.
So ordered.
CMS ESTATE, INC., petitioner,
vs.
SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, respondents.
This appeal by the CMS Estate, Inc. from the decision rendered by the Social Security Commission in its Case No. 12,
entitled "CMS Estate, Inc. vs. Social Security System, declaring CMS subject to compulsory coverage as of September
1, 1957 and "directing the Social Security System to effect such coverage of the petitioner's employees in its logging
and real estate business conformably to the provision of Republic Act No. 1161, as amended was certified to Us by the
defunct Court of Appeals 1 for further disposition considering that purely questions of law are involved.

Petitioner is a domestic corporation organized primarily for the purpose of engaging in the real estate business. On
December 1, 1952, it started doing business with only six (6) employees. It's Articles of Incorporation was amended on
June 4, 1956 in order to engage in the logging business. The Securities and Exchange Commission issued the
certificate of filing of said amended articles on June 18, 1956. Petitioner likewise obtained an ordinary license from the
Bureau of Forestry to operate a forest concession of 13,000 hectares situated in the municipality of Baganga, Province
of Davao.
On January 28, 1957, petitioner entered into a contract of management with one Eufracio D. Rojas for the operation
and exploitation of the forest concession The logging operation actually started on April 1, 1957 with four monthly
salaried employees. As of September 1, 1957, petitioner had 89 employees and laborers in the logging operation. On
December 26, 1957, petitioner revoked its contract of management with Mr. Rojas.
On August 1, 1958, petitioner became a member of the Social Security System with respect to its real estate business.
On September 6, 1958, petitioner remitted to the System the sum of P203.13 representing the initial premium on the
monthly salaries of the employees in its logging business. However, on October 9, 1958, petitioner demanded the
refund of the said amount, claiming that it is not yet subject to compulsory coverage with respect to its logging
business. The request was denied by respondent System on the ground that the logging business was a mere
expansion of petitioner's activities and for purposes of the Social Security Act, petitioner should be considered a
member of the System since December 1, 1952 when it commenced its real estate business.
On November 10, 1958, petitioner filed a petition with the Social Security Commission praying for the determination of
the effectivity date of the compulsory coverage of petitioner's logging business.
After both parties have submitted their respective memoranda, the Commission issued on January 14, 1960,
Resolution No. 91, 2 the dispositive portion of which reads as follows:
Premises considered, the instant petition is hereby denied and petitioner is hereby adjudged to be subject to
compulsory coverage as of Sept. 1, 1957 and the Social Security System is hereby directed to effect such coverage of
petitioner's employees in its logging and real estate business conformably to the provisions of Rep. Act No. 1161, as
amended.
SO ORDERED.
Petitioner's motion for reconsideration was denied in Resolution No. 609 of the Commission.
These two (2) resolutions are now the subject of petitioner's appeal. Petitioner submits that respondent Commission
erred in holding
(1) that the contributions required of employers and employees under our Social Security Act of 1954 are not in the
nature of excise taxes because the said Act was allegedly enacted by Congress in the exercise of the police power of
the State, not of its taxing power;
(2) that no contractee independent contractor relationship existed between petitioner and Eufracio D. Rojas during
the time that he was operating its forest concession at Baganga, Davao;
(3) that a corporation which has been in operation for more than two years in one business is immediately covered
with respect to any new and independent business it may subsequently engage in;
(4) that a corporation should be treated as a single employing unit for purposes of coverage under the Social Security
Act, irrespective of its separate, unrelated and independent business established and operated at different places and
on different dates; and
(5) that Section 9 of the Social Security Act on the question of compulsory membership and employers should be given
a liberal interpretation.
Respondent, on the other hand, advances the following propositions, inter alia:
(1) that the Social Security Act speaks of compulsory coverage of employers and not of business;
(2) that once an employer is initially covered under the Social Security Act, any other business undertaken or
established by the same employer is likewise subject in spite of the fact that the latter has not been in operation for at
least two years;
(3) that petitioner's logging business while actually of a different, distinct, separate and independent nature from its
real estate business should be considered as an operation under the same management;
(4) that the amendment of petitioner's articles of incorporation, so as to enable it to engage in the logging business
did not alter the juridical personality of petitioner; and
(5) the petitioner's logging operation is a mere expansion of its business activities.
The Social Security Law was enacted pursuant to the policy of the government "to develop, establish gradually and
perfect a social security system which shall be suitable to the needs of the people throughout the Philippines, and shall

provide protection against the hazards of disability, sickness, old age and death" (Sec. 2, RA 1161, as amended). It is
thus clear that said enactment implements the general welfare mandate of the Constitution and constitutes a
legitimate exercise of the police power of the State. As held in the case of Philippine Blooming Mills Co., Inc., et al. vs.
SSS 3
Membership in the SSS is not a result of bilateral, concensual agreement where the rights and obligations of the
parties are defined by and subject to their will, RA 1161 requires compulsory coverage of employees and employers
under the System. It is actually a legal imposition on said employers and employees, designed to provide social
security to the workingmen. Membership in the SSS is therefore, in compliance with the lawful exercise of the police
power of the State, to which the principle of non-impairment of the obligation of contract is not a proper defense.
xxx xxx xxx
The taxing power of the State is exercised for the purpose of raising revenues. However, under our Social Security Law,
the emphasis is more on the promotion of the general welfare. The Act is not part of out Internal Revenue Code nor are
the contributions and premiums therein dealt with and provided for, collectible by the Bureau of Internal Revenue. The
funds contributed to the System belong to the members who will receive benefits, as a matter of right, whenever the
hazards provided by the law occur.
All that is required of appellant is to make monthly contributions to the System for covered employees in its employ.
These contributions, contrary to appellant's contention, are not 'in the nature of taxes on employment.' Together with
the contributions imposed upon employees and the Government, they are intended for the protection of said
employees against the hazards of disability, sickness, old age and death in line with the constitutional mandate to
promote social justice to insure the well-being and economic security of all the people. 4
Because of the broad social purpose of the Social Security Act, all doubts in construing the Act should favor coverage
rather than exemption.
Prior to its amendment, Sec. 9 of the Act provides that before an employer could be compelled to become a member of
the System, he must have been in operation for at least two years and has at the time of admission at least six
employees. It should be pointed out that it is the employer, either natural, or judicial person, who is subject to
compulsory coverage and not the business. If the intention of the legislature was to consider every venture of the
employer as the basis of a separate coverage, an express provision to that effect could have been made.
Unfortunately, however, none of that sort appeared provided for in the said law.
Should each business venture of the employer be considered as the basis of the coverage, an employer with more
than one line of business but with less than six employees in each, would never be covered although he has in his
employ a total of more than six employees which is sufficient to bring him within the ambit of compulsory coverage.
This would frustrate rather than foster the policy of the Act. The legislative intent must be respected. In the absence of
an express provision for a separate coverage for each kind of business, the reasonable interpretation is that once an
employer is covered in a particular kind of business, he should be automatically covered with respect to any new
name. Any interpretation which would defeat rather than promote the ends for which the Social Security Act was
enacted should be eschewed. 5
Petitioner contends that the Commission cannot indiscriminately combine for purposes of coverage two distinct and
separate businesses when one has not yet been in operation for more than two years thus rendering nugatory the
period for more than two years thus rendering nugatory the period of stabilization fixed by the Act. This contention
lacks merit since the amendatory law, RA 2658, which was approved on June 18, 1960, eliminated the two-year
stabilization period as employers now become automatically covered immediately upon the start of the business.
Section 10 (formerly Sec. 9) of RA 1161, as amended by RA 2658 now provides:
Sec. 10. Effective date of coverage. Compulsory coverage of the employer shall take effect on the first day of his
operation, and that of the employee on the date of his employment. (Emphasis supplied)
As We have previously mentioned, it is the intention of the law to cover as many persons as possible so as to promote
the constitutional objective of social justice. It is axiomatic that a later law prevails over a prior statute and moreover
the legislative in tent must be given effect. 6
Petitioner further submits that Eufrancio Rojas is an independent contractor who engages in an independent business
of his own consisting of the operation of the timber concession of the former. Rojas was appointed as operations
manager of the logging consession; 7 he has no power to appoint or hire employees; as the term implies, he only
manages the employees and it is petitioner who furnishes him the necessary equipment for use in the logging
business; and he is not free from the control and direction of his employer in matter connected with the performance
of his work. These factors clearly indicate that Rojas is not an independent contractor but merely an employee of
petitioner; and should be entitled to the compulsory coverage of the Act.
The records indubitably show that petitioner started its real estate business on December 1, 1952 while its logging
operation was actually commenced on April 1, 1957. Applying the provision of Sec. 10 of the Act, petitioner is subject
to compulsory coverage as of December 1, 1952 with respect to the real estate business and as of April 1, 1957 with
respect to its logging operation.

WHEREFORE, premises considered, the appeal is hereby DISMISSED. With costs against petitioner.
SO ORDERED.
LUZON STEVEDORING CORPORATION, petitioner-appellant,
vs.
SOCIAL SECURITY SYSTEM, respondent-appellee.
Luzon Stevedoring Corporation (Lusteveco for short), a domestic corporation with principal office in Manila, is engaged
in the business of stevedoring, lightering and towering in the cities of Iloilo and Bacolod under the trade name of
Visayan Stevedore Transportation Company. It owns, maintains and operates towboats, barges and a drydock. In 1959
it carried in its payrolls temporary employees assigned as follows:
(1) 1,752 and 2,552 stevedores in the cities of Iloilo and Bacolod, respectively, who were hired on rotation and on
vessel-by-vessel basis. They were paid daily with the understanding of being laid off at the end of each day. On the
average, each stevedore worked for 14 days during the year.
(2) Drydock workers temporarily drafted in the repair and maintenance of towboats and barges during the peak
season, i.e., September to December. They were paid on daily basis and the duration of their employment depended
upon the number of vessels or barges drydocked. Average number of working days for each laborer in 1959 amounted
to only 20 days.1wph1.t
(3) Sailors, patrons, officers and crew members of towboats and barges who were hired in place of regular sailors,
patrons, officers and crew members who were absent or on leave. They were laid off upon return of the regular
employees. Each relief worker averaged 36 working days in 1959.
The labor unions to which said temporary workers belong control the rotation of employment.
On September 28, 1960 the Consolidated Union of the Philippines, Trade Union of Central Philippines, Union de Marinos
de Iloilo and Vistranco Employees Association requested the Social Security Commission for the exemption of the
aforementioned temporary employees from compulsory coverage of the Social Security Act (R.A. 1161) on the ground
that they "work only intermittently and are not in a position to maintain membership in the Social Security System long
enough to be fully entitled to the law's sickness, disability, death and retirement benefits". Later, on October 19, 1960
Lusteveco lodged a similar request with the Social Security Commission. On April 16, 1962, however, the Social
Security Commission denied the request for exemption and ordered Lusteveco to "pay all back premiums due and
unpaid from the respective dates of coverage of the employees concerned, to be determined from the records of the
System." Its motion for reconsideration having been denied, Lusteveco instituted the instant appeal.
The question is, do said temporary and casual employees come within the compulsory coverage of the Social Security
Act?
Lusteveco's plea for exemption rests on the contention that compulsory coverage under the Social Security Act, as
amended extends primarily to permanent employees and secondarily to temporary employees whose tenure of
employment is merely indefinite but not with respect to the duration of the work to be performed. Such a contention
would accordingly place beyond the ambit of the law the employees in question who were allegedly hired by the day
with uncertain chance of working the following day even if the same work were still available.
Formerly, the pertinent provision on compulsory coverage of the Social Security Act, as amended by Republic Act
1792, stated:
SEC. 9. Compulsory coverage.Coverage in the system shall be compulsory upon all employees between the ages of
sixteen and sixty years, inclusive, if they have been for at least six months in the service of the employer who is a
member of the System: x x x (Emphasis supplied).
Coverage required at least six months' service with the employer. Hence, the effectivity of the coverage on the first
day of the calendar month following the month when the employer qualified as a member of the System, provided the
employee has rendered at least six months' service.1 In this light, this Court was prompted to state that the coverage
of the Social Security Law is predicated on the existence of an employer-employee relationshipof more or less
permanent nature and extends to employment of all kinds except those expressly excluded. 2
The Social Security Act was however amended by Republic Act 2658 which took effect on June 18, 1960. 3 The
amendment broadened the coverage of the Social Security System, increased its benefits and liberalized the terms
and conditions for their enjoyment.4 Thus, Sections 9 and 10 were made to read as follows:
SEC. 9. Compulsory coverage.Coverage in the System shall be compulsory upon all employees between the ages of
sixteen and sixty, inclusive, and their employers: ...
SEC. 10. Effective date of coverage.Compulsory coverage of the employer shall take effect on the first day of his
operation, and that of the employee on the date of his employment. (Emphasis supplied)

Eliminated was the six months' service requirement. Sans such requirement, all employees regardless of tenure, such
as the employees in question, would qualify for compulsory membership in the Social Security System; except of
course those classes of employees contemplated in Section 8(j) of the Social Security Act.
Section 8(j) defines employment covered by the Social Security Act and provides exception therefrom. Among the
exceptions mentioned paragraph (10) are services performed by temporary employees which may be excluded
by regulation of the Social Security Commission. It is pursuant to this exception that Lusteveco seeks to persuade the
Social Security Commission and this Court to exempt the employees in question from social security coverage. Suffice
it to state in this instance that Congress has delegated to the Social Security Commission the issuance of regulations
bearing on the exemption of services performed by temporary employees from social security coverage. No such
regulation has been cited to buttress the claim for exemption. Perforce, no exemption could be granted as there is no
way of telling whether or not the employees in question belong to a group or class designated by regulation of the
Social Security Commission as exempt.
Lusteveco further argues that since the employees in question are hired intermittently in short durations, it would be
impossible for them to accumulate the requisite number of monthly contributions to the Social Security System before
they can be entitled to benefits afforded by the Social Security Act. Consequently, as to them, exemption from
membership in the Social Security System ought to be granted because the law could not have intended them to be
covered without enjoying the benefits provided for therein.
It is not entirely correct to say that the employees in question cannot possibly be entitled to social security benefits by
reason of their temporary employment. From the moment an employee is reported for membership, he is entitled to
death and disability benefits pursuant to Section 13 of Republic Act 1161, as amended. The number of monthly
contributions mentioned in said section is not a prerequisite to the enjoyment of death or disability benefits but is
merely a basis in determining the amount of benefit to be paid.
In the case of sickness and retirement benefits, an employee member may enjoy said benefits provided he
accumulates to his credit twelve and one-hundred twenty months contributions, respectively. It is not an impossibility
for the employees in question to reach the minimum number of monthly contributions simply because their
employment is temporary and intermittent. For nowhere in the law is it required that the monthly contributions be in
the same amount, consecutive or derived from the same employer. Moreover, Sections 12 and 13 of the law
specifically provide that a covered employee shall receive a lump sum which should not be less than the total
contributions paid by him and his employer in his behalf. The employee therefore loses not a single centavo of his
investment. On the contrary, he gains by the amount paid by his employer in his behalf.
The coverage in the Social Security System of the employees in question, temporary though their employment may
be, is in line with the declared policy of Congress to develop, establish gradually and perfect a social security system
which shall be suitable to the needs of the laborers throughout the Philippines, and shall provide protection against the
hazards of disability, sickness, old age and death. Adherence to such policy would strongly militate in favor of the
coverage of such temporary employees for, more than their brothers who are regularly and permanently employed,
they are exposed to the hazards of disability, sickness, old age and death. More often than not, they are hapless and
defenseless victims of these hazards. Social justice demands that "they who have less in life should be given more in
law". The elimination of the six months service requirement aforementioned is a clear indication of such congressional
policy.
Wherefore, the resolutions of the Social Security Commission appealed from are hereby affirmed. No costs. So ordered.
OSIAS I. CORPORAL, SR., PEDRO TOLENTINO, MANUEL CAPARAS, ELPIDIO LACAP, SIMPLICIO PEDELOS,
PATRICIA NAS, and TERESITA FLORES,petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LAO
ENTENG COMPANY, INC. and/or TRINIDAD LAO ONG, respondents.
This special civil action for certiorari seeks the review of the Resolution dated October 17, 1996 of public respondent
National Labor Relations Commission (First Division), [1] in NLRC NCR Case No. 00-04-03163-95, and the Resolution
dated March 5, 1997 denying the motion for reconsideration. The aforecited October 17th Resolution affirmed the
Decision dated September 28, 1996 of Labor Arbiter Potenciano S. Caizares dismissing the petitioners' complaint for
illegal dismissal and declaring that petitioners are not regular employees of private respondent Lao Enteng Company,
Inc..
The records of the case show that the five male petitioners, namely, Osias I. Corporal, Sr., Pedro Tolentino, Manuel
Caparas, Elpidio Lacap, and Simplicio Pedelos worked as barbers, while the two female petitioners, Teresita Flores and
Patricia Nas worked as manicurists in New Look Barber Shop located at 651 P. Paterno Street, Quiapo, Manila owned by
private respondent Lao Enteng Co. Inc.. Petitioner Nas alleged that she also worked as watcher and marketer of private
respondent.
Petitioners claim that at the start of their employment with the New Look Barber Shop, it was a single proprietorship
owned and managed by Mr. Vicente Lao. In or about January 1982, the children of Vicente Lao organized a corporation
which was registered with the Securities and Exchange Commission as Lao Enteng Co. Inc. with Trinidad Ong as
President of the said corporation. Upon its incorporation, the respondent company took over the assets, equipment,
and properties of the New Look Barber Shop and continued the business. All the petitioners were allowed to continue
working with the new company until April 15, 1995 when respondent Trinidad Ong informed them that the building
wherein the New Look Barber Shop was located had been sold and that their services were no longer needed. [2]

On April 28, 1995, petitioners filed with the Arbitration Branch of the NLRC, a complaint for illegal dismissal, illegal
deduction, separation pay, non-payment of 13th month pay, and salary differentials. Only petitioner Nas asked for
payment of salary differentials as she alleged that she was paid a daily wage of P25.00 throughout her period of
employment. The petitioners also sought the refund of the P1.00 that the respondent company collected from each of
them daily as salary of the sweeper of the barber shop.
Private respondent in its position paper averred that the petitioners were joint venture partners and were receiving
fifty percent commission of the amount charged to customers. Thus, there was no employer-employee relationship
between them and petitioners. And assuming arguendo, that there was an employer-employee relationship, still
petitioners are not entitled to separation pay because the cessation of operations of the barber shop was due to
serious business losses.
Respondent Trinidad Lao Ong, President of respondent Lao Enteng Co. Inc., specifically stated in her affidavit dated
September 06, 1995 that Lao Enteng Company, Inc. did not take over the management of the New Look Barber Shop,
that after the death Lao Enteng petitioner were verbally informed time and again that the partnership may fold up
anytime because nobody in the family had the time to be at the barber shop to look after their interest; that New Look
Barber Shop had always been a joint venture partnership and the operation and management of the barber shop
was left entirely to petitioners; that her father's contribution to the joint venture included the place of business,
payment for utilities including electricity, water, etc. while petitioners as industrial partners, supplied the labor; and
that the barber shop was allowed to remain open up to April 1995 by the children because they wanted to give the
partners a chance at making it work. Eventually, they were forced to close the barber shop because they continued to
lose money while petitioners earned from it. Trinidad also added that private respondents had no control over
petitioners who were free to come and go as they wished. Admittedly too by petitioners they received fifty percent to
sixty percent of the gross paid by customers. Trinidad explained that some of the petitioners were allowed to register
with the Social Security System as employees of Lao Enteng Company, Inc. only as an act of accommodation. All the
SSS contributions were made by petitioners. Moreover, Osias Corporal, Elpidio Lacap and Teresita Flores were not
among those registered with the Social Security System. Lastly, Trinidad avers that without any employee-employer
relationship petitioners claim for 13th month pay and separation pay have no basis in fact and in law. [3]
In a Decision dated September 28, 1995, Labor Arbiter Potenciano S. Caizares, Jr. ordered the dismissal of the
complaint on the basis of his findings that the complainants and the respondents were engaged in a joint venture and
that there existed no employer-employee relation between them. The Labor Arbiter also found that the barber shop
was closed due to serious business losses or financial reverses and consequently declared that the law does not
compel the establishment to pay separation pay to whoever were its employees. [4]
On appeal, NLRC affirmed the said findings of the Labor Arbiter and dismissed the complaint for want of merit,
ratiocinating thus:
Indeed, complainants failed to show the existence of employer-employee relationship under the fourway test
established by the Supreme Court. It is a common practice in the Barber Shop industry that barbers supply their own
scissors and razors and they split their earnings with the owner of the barber shop. The only capital of the owner is the
place of work whereas the barbers provide the skill and expertise in servicing customers. The only control exercised by
the owner of the barber shop is to ascertain the number of customers serviced by the barber in order to determine the
sharing of profits. The barbers maybe characterized as independent contractors because they are under the control of
the barber shop owner only with respect to the result of the work, but not with respect to the details or manner of
performance.The barbers are engaged in an independent calling requiring special skills available to the public at large.
[5]

Its motion for reconsideration denied in the Resolution[6] dated March 5, 1997, petitioners filed the instant petition
assigning that the NLRC committed grave abuse of discretion in:
I. ARBITRARILY DISREGARDING SUBSTANTIAL EVIDENCE PROVING THAT PETITIONERS WERE EMPLOYEES OF
RESPONDENT COMPANY IN RULING THAT PETITIONERS WERE INDEPENDENT CONTRACTORS.
II. NOT HOLDING THAT PETITIONERS WERE ILLEGALLY DISMISSED AND IN NOT AWARDING THEIR MONEY CLAIMS.[7]
Petitioners principally argue that public respondent NLRC gravely erred in declaring that the petitioners were
independent contractors. They contend that they were employees of the respondent company and cannot be
considered as independent contractors because they did not carry on an independent business. They did not cut hair,
manicure, and do their work in their own manner and method. They insist they were not free from the control and
direction of private respondents in all matters, and their services were engaged by the respondent company to attend
to its customers in its barber shop. Petitioners also stated that, individually or collectively, they do not have substantial
capital nor investments in tools, equipments, work premises and other materials necessary in the conduct of the
barber shop. What the barbers owned were merely combs, scissors, and razors, while the manicurists owned only nail
cutters, nail polishes, nippers and cuticle removers. By no standard can these be considered "substantial capital"
necessary to operate a barbers shop.
Finally, petitioners fault the NLRC for arbitrarily disregarding substantial evidence on record showing that petitioners
Pedro Tolentino, Manuel Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social Security System
as regular employees of the respondent company. The SSS employment records in common show that the employer's
ID No. of Vicente Lao/Barber and Pawn Shop was 03-0606200-1 and that of the respondent company was 03-8740074-

7. All the foregoing entries in the SSS employment records were painstakingly detailed by the petitioners in their
position paper and in their memorandum appeal but were arbitrarily ignored first by the Labor Arbiter and then by the
respondent NLRC which did not even mention said employment records in its questioned decision.
We found petition is impressed with merit.
In our view, this case is an exception to the general rule that findings of facts of the NLRC are to be accorded respect
and finality on appeal. We have long settled that this Court will not uphold erroneous conclusions unsupported by
substantial evidence.[8] We must also stress that where the findings of the NLRC contradict those of the labor arbiter,
the Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the questioned
findings.[9]
The issues raised by petitioners boil down to whether or not an employer-employee relationship existed between
petitioners and private respondent Lao Enteng Company, Inc. The Labor Arbiter has concluded that the petitioners and
respondent company were engaged in a joint venture. The NLRC concluded that the petitioners were independent
contractors.
The Labor Arbiter's findings that the parties were engaged in a joint venture is unsupported by any documentary
evidence. It should be noted that aside from the self-serving affidavit of Trinidad Lao Ong, there were no other
evidentiary documents, nor written partnership agreements presented. We have ruled that even the sharing of
proceeds for every job of petitioners in the barber shop does not mean they were not employees of the respondent
company.[10]
Petitioner aver that NLRC was wrong when it concluded that petitioners were independent contractors simply because
they supplied their own working implements, shared in the earnings of the barber shop with the owner and chose the
manner of performing their work. They stressed that as far as the result of their work was concerned the barber shop
owner controlled them.
An independent contractor is one who undertakes "job contracting", i.e., a person who (a) carries on an independent
business and undertakes the contract work on his own account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or principal in all matters connected with the
performance of the work except as to the results thereof, and (b) has substantial capital or investment in the form of
tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business.
[11]

Juxtaposing this provision vis--vis the facts of this case, we are convinced that petitioners are not "independent
contractors". They did not carry on an independent business. Neither did they undertake cutting hair and manicuring
nails, on their own as their responsibility, and in their own manner and method. The services of the petitioners were
engaged by the respondent company to attend to the needs of its customers in its barber shop. More importantly, the
petitioners, individually or collectively, did not have a substantial capital or investment in the form of tools, equipment,
work premises and other materials which are necessary in the conduct of the business of the respondent
company. What the petitioners owned were only combs, scissors, razors, nail cutters, nail polishes, the nippers nothing else. By no standard can these be considered substantial capital necessary to operate a barber shop. From the
records, it can be gleaned that petitioners were not given work assignments in any place other than at the work
premises of the New Look Barber Shop owned by the respondent company. Also, petitioners were required to observe
rules and regulations of the respondent company pertaining, among other things, observance of daily attendance, job
performance, and regularity of job output. The nature of work performed by were clearly directly related to private
respondent's business of operating barber shops. Respondent company did not dispute that it owned and operated
three (3) barber shops. Hence, petitioners were not independent contractors.
Did an employee-employer relationship exist between petitioners and private respondent? The following elements
must be present for an employer-employee relationship to exist: (1) the selection and engagement of the workers; (2)
power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct,
with the latter assuming primacy in the overall consideration. Records of the case show that the late Vicente Lao
engaged the services of the petitioners to work as barbers and manicurists in the New Look Barber Shop, then a single
proprietorship owned by him; that in January 1982, his children organized a corporation which they registered with the
Securities and Exchange Commission as Lao Enteng Company, Inc.; that upon its incorporation, it took over the assets,
equipment, and properties of the New Look Barber Shop and continued the business; that the respondent company
retained the services of all the petitioners and continuously paid their wages. Clearly, all three elements exist in
petitioners' and private respondent's working arrangements.
Private respondent claims it had no control over petitioners. The power to control refers to the existence of the power
and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the
performance of duties of the employee. It is enough that the employer has the right to wield that power. [12] As to the
"control test", the following facts indubitably reveal that respondent company wielded control over the work
performance of petitioners, in that: (1) they worked in the barber shop owned and operated by the respondents; (2)
they were required to report daily and observe definite hours of work; (3) they were not free to accept other
employment elsewhere but devoted their full time working in the New Look Barber Shop for all the fifteen (15) years
they have worked until April 15, 1995; (4) that some have worked with respondents as early as in the 1960's; (5) that
petitioner Patricia Nas was instructed by the respondents to watch the other six (6) petitioners in their daily
task. Certainly, respondent company was clothed with the power to dismiss any or all of them for just and valid

cause. Petitioners were unarguably performing work necessary and desirable in the business of the respondent
company.
While it is no longer true that membership to SSS is predicated on the existence of an employee-employer relationship
since the policy is now to encourage even the self-employed dressmakers, manicurists and jeepney drivers to become
SSS members, we could not agree with private respondents that petitioners were registered with the Social Security
System as their employees only as an accommodation. As we have earlier mentioned private respondent showed no
proof to their claim that petitioners were the ones who solely paid all SSS contributions. It is unlikely that respondents
would report certain persons as their workers, pay their SSS premium as well as their wages if it were not true that
they were indeed their employees.[13]
Finally, we agree with the labor arbiter that there was sufficient evidence that the barber shop was closed due to
serious business losses and respondent company closed its barber shop because the building where the barber shop
was located was sold. An employer may adopt policies or changes or adjustments in its operations to insure profit to
itself or protect investment of its stockholders. In the exercise of such management prerogative, the employer may
merge or consolidate its business with another, or sell or dispose all or substantially all of its assets and properties
which may bring about the dismissal or termination of its employees in the process. [14]
Prescinding from the above, we hold that the seven petitioners are employees of the private respondent company; as
such, they are to be accorded the benefits provided under the Labor Code, specifically Article 283 which mandates the
grant of separation pay in case of closure or cessation of employer's business which is equivalent to one (1) month pay
for every year of service.[15] Likewise, they are entitled to the protection of minimum wage statutes. Hence, the
separation pay due them may be computed on the basis of the minimum wage prevailing at the time their services
were terminated by the respondent company. The same is true with respect to the 13th month pay. The Revised
Guidelines on the Implementation of the 13th Month Pay Law states that "all rank and file employees are now entitled
to a 13th month pay regardless of the amount of basic salary that they receive in a month. Such employees are
entitled to the benefit regardless of their designation or employment status, and irrespective of the method by which
their wages are paid, provided that they have worked for at least one (1) month during a calendar year" and so all the
seven (7) petitioners who were not paid their 13th month pay must be paid accordingly.[16]
Anent the other claims of the petitioners, such as the P10,000.00 as penalty for non-compliance with procedural
process; P10,000.00 as moral damages; refund of P1.00 per day paid to the sweeper; salary differentials for petitioner
Nas; attorney's fees), we find them without basis.
IN VIEW WHEREOF, the petition is GRANTED. The public respondent's Decision dated October 17, 1996 and
Resolution dated March 05, 1997 are SET ASIDE. Private respondents are hereby ordered to pay, severally and jointly,
the seven (7) petitioners their (1) 13th month pay and (2) separation pay equivalent to one month pay for every year of
service, to be computed at the then prevailing minimum wage at the time of their actual termination which was April
15, 1995.
Costs against private respondents.
SO ORDERED.

POBLETE CONSTRUCTION CO., Petitioner, v. JUDITH ASIAIN, SOCIAL SECURITY COMMISSION, and BENITO
MACRHON, in his capacity as Sheriff of Rizal, Respondents.
Fernando B. Duque and Yolando F . Bustamante for Petitioner.
Solicitor General A. A. Alafriz, Solicitor C .D. Quiason and Atty. L.A.L. Javellana and E. T . Duran for
respondent SSC.
Orlando V . Calsado for-respondent Asiain.
SYLLABUS
1. SOCIAL SECURITY SYSTEM; COMPULSORY COVERAGE; EMPLOYEES UNWILLINGNESS TO GIVE HIS SHARE OF THE
CONTRIBUTION; EFFECT THEREOF. There is no question that the deceased Miguel Asiain was subject to compulsory
coverage in the Social Security System, although the deceaseds SSS Form E-1 (Employees Date Record) was never
filed with the Social Security System for the reason, according to the company, that he refused to have his share of the
corresponding monthly contributions deducted from his salary. It was the duty of the employer to "report immediately
to the System" his name, age, civil status, occupation, salary and dependents Compliance with this duty did not
depend upon the employees willingness to give his share of the contribution. Section 24 is mandatory, to such an
extent that if the employee should die or become sick or disabled without the report having been made by the
employer, the latter is liable for an amount equivalent to the benefits to which the employee would have been entitled
had such report been made.
2. ID.; ID.; ID.; ID.; CLAIMS IN SECTION 5(a) OF THE SOCIAL SECURITY ACT DEEMED TO INCLUDE CLAIM FOR DAMAGES
UNDER SECTION 24; JURISDICTION OF SOCIAL SECURITY COMMISSION TO AWARD DAMAGES AFFIRMED. It is true
that Section 24 uses the word "damages" in referring to the amount that may be claimed. But this fact alone does not

mean that the Social Security Commission lacks jurisdiction to award the same. Section 5(a) of the Social Security Act
provides that "the filing, determination and settlement of claims shall be governed by the rules and regulations
promulgated by the Commission;" and the rules and regulations thus promulgated state that "the effectivity of
membership in the System, as well as the final determination and settlement of claims, shall be vested in the
Commission." The term claims" is broad enough to include a claim for damages under Section 24. Otherwise am
employer could nullify the jurisdiction of the Commission by the simple expedient of not making a report as required
by said Section.
Miguel Asiain was an employee of the Poblete Construction Company from 1956 until his death on November 22, 1959,
with a monthly salary of P300. Upon his death his widow, Judith Asiain, for herself and her minor children, filed a
petition before the Social Security Commission against the company and its manager, Domingo Poblete (Case No. 78),
to recover the following sums: (1) P3,600.00 equivalent to one years salary of the deceased; (2) P600.00 representing
his unpaid salary for two months; (3) P288,00 "representing the cash received by respondents from their laborers as
contribution to the family of the deceased;" and (4) P2,000.00 by way of attorneys fees.
The respondents below moved to dismiss the petition on the grounds that the Social Security Commission had no
jurisdiction over the subject-matter and that the petitioner Judith Asiain had no capacity to sue. The Commission
denied the motion to dismiss in its order of February 25, 1960 and ordered the respondents to file their answer. When
no answer was forthcoming, the respondents were declared in default in an order dated March 9, 1960, and the
petitioners were allowed to present their evidence.
In its resolution of September 15, 1960 the Commission declared itself without jurisdiction to entertain the claims in
the petition except the one for the sum of P3,600, which it awarded on the basis of the evidence adduced at the
hearing and pursuant to Section 24 of Republic Act No. 1161, as amended. A subsequent motion for reconsideration
filed by the respondents was denied, and they elevated the case for review by the Court of Appeals, which upon proper
application issued a writ of preliminary injunction to stop all further proceedings below, including execution of the
award.
The case was afterwards certified to this Court for the reason that when the respondents below were declared in
default they lost their standing before the Commission, and not having regained the same by a motion to set aside or
petition for relief, they had no right to appeal from the default judgment; and that in any event no questions of fact are
involved and hence, if at all appealable, the appeal should be directly to this Court.
The procedural issues, we believe, need not concern us. The main point raised here by the Poblete Construction
Company, which it raised also in its motion to dismiss before the Commission, is that the said body had no jurisdiction
to entertain the claim of P3,600, which should have been presented before the ordinary courts. This claim was filed
under Section 24 of the Social Security Act (R.A. 1161, as amended), which provides:chanrob1es virtual 1aw library
SEC. 24. Employment records and reports. (a) each employer shall report immediately to the System the names,
ages, civil status, occupations, salaries and dependents of all his employees who are in his employ and who are or may
later be subject to compulsory coverage: Provided, That if an employee subject to compulsory coverage should die or
become sick or disabled without the System having previously received a report about him from his employer, the said
employer shall pay to the employee or his legal heirs damages equivalent to the benefits to which said employee
would have been entitled had his name been reported on time by the employer to the System."cralaw virtua1aw
library
It appears that although the deceased Miguel Asiain had been employed in the Poblete Construction Company since
1956 and had accomplished SSS Form E-1 (Employees Date Record) and transmitted the same to the said companys
Manila Office, it was never filed with the Social Security System for the reason, according to the company, that he
refused to have his share of the corresponding monthly contributions deducted from his salary. Upon these facts the
company maintains that the deceased was not a member of the System when he died and hence the adjudication of
the claim for damages under Section 24, supra, does not pertain to the Commission but to the courts of justice.
We find the argument untenable. There is no question that the deceased Miguel Asiain was subject to compulsory
coverage in the Social Security System. 1 It was the duty of the employer to "report immediately to the System" his
name, age, civil status, occupation, salary and dependents. Compliance with this duty did not depend upon the
employees willingness to give his share of the contribution. Section 24 is mandatory, to such an extent that if the
employee should die or become sick or disabled without the report having been made by the employer, the latter is
liable for an amount equivalent to the benefits to which the employee would have been entitled had such report been
made. It is true that the provision uses the word "damages" in referring to the amount that may be claimed. But this
fact alone does not mean that the Social Security Commission lacks jurisdiction to award the same. Section 5(a) of the
Social Security Act provides that "the filing, determination and settlement of claims shall be governed by the rules and
regulations promulgated by the Commission;" and the rules and regulations thus promulgated state that "the
effectivity of membership in the System, as well as the final determination and settlement of claims, shall be vested in
the Commission." The term "claims" is broad enough to include a claim for "damages" under Section 24. Otherwise an
employer could nullify the jurisdiction of the Commission by the simple expedient of not making a report as required
by said Section. The collection of the employees share is a duty imposed by law, and his unwillingness to have it
deducted from his salary does not excuse the employers failure to make the report aforesaid. It is precisely in this
situation that the employer is liable, and there is no question as to the amount of such liability in this case.

The decision of the Social Security Commission is affirmed, and the writ of preliminary injunction is dissolved, with
costs against herein petitioner.