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THIRDDIVISION

[G.R.No.105892.January28,1998]

LEIDEN FERNANDEZ, BRENDA GADIANO, GLORIA ADRIANO, EMELIA

NEGAPATAN, JESUS TOMONGHA, ELEONOR QUIANOLA, ASTERIA
CAMPO, FLORIDA VILLACERAN, FLORIDA TALLEDO, MARILYN LIM and
JOSEPH CANONIGO, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, FOURTH DIVISION, MARGUERITE[1] LHUILLIER AND/OR
AGENCIACEBUANAH.LHUILLIER,respondents.
DECISION
PANGANIBAN,J.:

Isfailuretoattendhearingsbeforethelaborarbiterawaiveroftherighttopresentevidence?Are
moral damages included in the computation of monetary award for purposes of determining the
amount of the appeal bond? Is there a limit to the amount of service incentive leave pay and
backwagesthatmaybeawardedtoanillegallydismissedemployee?
TheCase
These are the main questions raised in this petition for certiorari under Rule 65 of the Rules of
Court assailing the March 11, 1992 Decision[2] of Respondent National Labor Relations Commission
(NLRC),[3]thedispositiveportionofwhichreads:[4]
WHEREFORE,premisesconsidered,theappealeddecisionisherebydeclaredVACATEDandthe
entirerecordsofthesecasesareherebyorderedremandedtotheRegionalArbitrationBranchVIIfor
furtherproceedings.
This petition also challenges the NLRCs May 29, 1992 Resolution denying the motion for
reconsideration.
The decision[5] vacated by the NLRC and penned by Labor Arbiter Gabino A. Velasquez, Jr.
disposedasfollows:[6]
WHEREFORE,judgmentisherebyrenderedinfavorofthecomplainantsandagainsttherespondent.
Therespondentisherebyordered:
1.Toreinstatethecomplainantstotheirrespectiveposition[sic]attheAgenciaCebuanawithfull
backwageswithoutqualificationifreinstatementisnotfeasible,foronereasonoranother,topayto
thecomplainantstheirrespectiveseparationpay,serviceincentiveleavepaywithfullbackwages
withoutqualificationcomputedhereunderasfollows:
1.LEIDENFERNANDEZ:
a)SeparationPayfor6years=P8,640.00
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b)ServiceIncentiveLeave(6yrs.)=3,322.50
c)Backwagesforoneyearonly=34,560.00
TOTAL=P46,522.50
2.GLORIAADRIANO:
a)Separationpayfor17years=P28,560.00
b)Serviceincentiveleave(17yrs.)=10,986.25
c)Backwagesforoneyear=40,320.00
TOTAL=P79,866.25
3.EMELIANEGAPATAN:
a)Separationpayfor24yrs.=P35,760.00
b)Serviceincentiveleave(24yrs.)=13,752.00
c)Backwagesforoneyear=35,760.00
TOTAL=P85,272.00
4.JESUSP.TOMONGHA:
a)Separationpayfor33years=P50,655.00
b)ServiceIncentiveleave=19,478.25
c)Backwagesforoneyear=36,840.00
TOTAL=P106,973.25
5.ELEONORQUIANOLA:
a)Separationpayfor14years=P20,860.00
b)ServiceIncentiveLeave=8,022.00
c)Backwagesforoneyear=35,760.00
TOTAL=P64,642.00
6.ASTERIACAMPO:
a)Separationpayfor13years=P19,240.00
b)ServiceIncentiveLeave(13yrs.)=7,400.00
c)Backwagesforoneyear=35,520.00
TOTAL=P62,160.25
7.FLORIDAVILLACERAN:
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a)Separationpayfor17yrs.=P25,160.00
b)ServiceIncentiveleave(17yrs.)=9,677.25
c)Backwagesforoneyear=35,520.00
TOTAL=P70,357.25
8.FLORIDATALLEDO:
a)Separationpayfor18yrs.=P27,450.00
b)ServiceIncentiveleave(18yrs.)=10,557.00
c)Backwagesforoneyear=36,600.00
TOTAL=P74,607.00
9.BRENDAGADIANO:
a)Separationpayfor13yrs.=P19,597.50
b)ServiceIncentiveleave(13yrs.)7,536.75
c)Backwagesforoneyear36,180.00
TOTAL=P63,313.25
10.MARILYNLIM:
a)Separationpayfor7yrs.=P12,950.00
b)ServiceIncentivefor7yrs.=4,980.50
c)Backwagesforoneyear=44,400.00
TOTALP62,330.00
11.JOSEPHCANONIGO:
a)SeparationPayfor2years=P2,700.00
b)ServiceIncentiveLeave(2yrs.)=1,038.50
c)Backwagesfor1year=32,400.00
TOTAL=P36,138.50
2)TopaytoallcomplainantstheamountofP100,000.00formoraldamagesandtheamountof
anotherP100,000.00forexemplarydamages,plustheamountofP98,018.25asattorneysfees
representing10%ofthetotalawardandtheamountofP30,000.00forlitigationexpenses.
ThetotalityoftheawardamountingtoP1,078,200.55mustbedepositedwiththisOfficeten(10)days
fromreceiptofthisdecisionforfurtherdisposition.However,thepaymentofbackwageswillbe
computedasoftheactualdateofpaymentprovideditwillnotexceedaperiodofthreeyears.

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TheFacts
ThefactualmilieuofthiscaseisrecitedbythesolicitorgeneralinhisCommentdatedDecember
21,1992asfollows:[7]
1.TheinstantcasestemmedfromaconsolidatedcomplaintagainstprivaterespondentsAgencia
CebuanaH.Lhuillierand/orMargueritteLhuillier(Lhuillier)forillegaldismissal(Rec.,pp.5658).The
AgenciaCebuanaisasoleproprietorshipoperatedbyMargueritteLhuillier.
2.Two(2)PositionPaperswerefiledbypetitioners,onebyLeidenE.Fernandez,GloriaB.Adriano,
EmiliaA.Negapatan,JesusP.Tomongha,EleonorA.Quianola,AsteriaC.Ocampo[sic],Florida
Villaceran,FloridaB.Tallado[sic]andBrendaA.Gadiano(Rec.,pp.7988)andtheotherbyMarilyn
E.LimandJosephCanonigo(ExhibitC4).
3.IntheirPositionPapers,petitionersallegedthattheywereemployedbyLhuillier,asfollows:
Name

Position

DateofEmployment

1.LeidenE.
Fernandez

Cashier

Dec.3,1984

2.GloriaB.
Adriano

Appraiser

July10,1973

3.EmiliaA.
Negapatan

SalesGirl

March9,1966

OfficeClerk
4.JesusP.
Tomongha
5.EleonorA.
Quianola
6.AsteriaC.
Campo

July1957

Office
Clerk
Clerk

Dec.8,1976

May27,1977

7.Florida
Villaceran

Sales
Clerk

8.FloridaB.
Talledo

Pawnshop June19,1972
Writer

9.BrendaA.
Gadiano

Pawnshop March7,1977
Teller

10.Marilyn
E.Lim
11.Joseph
M.Canonigo

Branch
Manager
Record
Keeper

March8,1973

June1984

June1988

Latest
Salary/Month
P2,880.00

3,360.00

2,980.00

3,070.00

2,980.00

2,960.00

2,960.00

3,050.00

3,015.00

3,700.00

2,700.00

DateofDismissal

July19,1990

July19,1990

July19,1990

July19,1990

July21,1990

July19,1990

July19,1990

July19,1990

July19,1990

Feb.16,1990

July14,1990

PetitionersFernandez,Adriano,Negapatan,Tomongha,Quianola,Campo,Villaceran,Talledo,and
GadianofurtherallegedthatpriortoandduringearlyJuly1990,theydemandedfromMargueritte
Lhuillieranincreaseintheirsalariessinceherbusinesswasmakinggoodandthatshewasevading
paymentoftaxesbymakingfalseentriesinherrecordsofaccountthatLhuillierbecameangryand
threatenedthemthatsomethingwouldhappentotheiremploymentiftheywouldreporthertotheBIR
thatshortlythereafter,LhuilliersuspectedthemofstealingjewelryfromthepawnshopthatonJuly19,
1990,Lhuillierverballyinformedthemnottoreportforworkastheiremploymenthadbeenterminated
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thatfromJuly20,1990theydidnotreportforworkandonJuly23,1990,theyfiledtheinstant
complaint(Rec.,pp.7988).
Ontheirpart,petitionersLimandCanonigoallegedthatinearlyJanuary1990andinJune1990,
respectively,theydemandedincreasesintheirsalariessincetheynotedthatLhuillierhadavery
lucrativebusinessbesidesevadingtaxpaymentsbymakingfalseentriesinherrecordsofaccount
thattheyalsoinformedherthattheyintendedtojointheAssociatedLaborUnion(ALU),whichmade
Lhuillierangry,causinghertothreatenthemthatshouldtheyreporthertotheBIRandjointheALU
somethingwouldhappentotheiremploymentthatLhuillieradvisedthemtotendertheirresignations
astheywerereportedlyresponsibleforsomeanomaliesattheAgenciaCebuanaHLhuillierthat
LhuillierassuredthemthattheywillbegivenseparationpaythattheyaskedLhuillierthattheybe
allowedtoconfrontthepersonswhoreportedtoherabouttheirsupposedinvolvementinthealleged
anomaliesbutsheignoreditandtoldthemtotendertheirrespectiveresignationseffectiveFebruary
16,1990(forLim)andJuly14,1990(forCanonigo)andthattheywerenotgivenseparationpay
(Decision,pp.68Rec.,pp.256258).
5.InherPositionPaper,Lhuillier,representedinitiallybyAtty.MalcolmV.Seno,allegedthat:
a)InthecaseofMarilynLim,onJanuary13,1990,shewasinformedthataninvestigationwillbe
conductedbyLhuillierbecauseofthereportreceivedbyFloraGo,alsoanemployeeofLhuillier,that
Limsoldtoacompanyconsumerherownjewelry,inviolationofthecompanyhouserulesonJanuary
22,1990,aNoticeofIntendedTerminationwasserveduponherrequiringhertosubmitawritten
explanationwithin48hoursfromreceiptLimdidnotsubmitawrittenexplanationbutactively
participatedintheinvestigationwheresheadmittedhavingcommittedtheviolationcomplainedofin
viewofheradmissionofguilt,thecompanylawyerrecommendedtothemanagementherdemotion
andtransferwithoutreductionofsalaryafterLimsreceiptofacopyoftheinvestigationreport,she
sentthroughherlawyeralettersignifyingherintentiontoresignandherwillingnesstoexecutea
promissorynoteforherindebtednessthecompanygaveLimadraftofthepromissorynotewhichwas
neverreturnedbyheronFebruary24,1990shetenderedanirrevocableletterofresignation,hence,
shewasnotterminatedandbecauseofthemaliciousandfalsecomplaintfiledbyLim,thecompany
wascompelledtofileacountercomplaintforPerjuryagainstherbeforetheOfficeoftheCity
ProsecutorofCebuCity(Rec.,pp.929397).
b)InthecaseofJesusTomongha,hewasfoundtohavestolenrematadojewelriesworthP70,670.00
sometimeinMarch1990insteadofattendingtheinvestigationscheduledforthisoffense,he
abandonedhisjobalthoughhisapplicationforleaveofabsencewasnotapprovedLhuillieraskedthe
companylawyertotalkwithTomonghaforhimtoreturntoworksothathecouldpayhispecuniary
liabilityoutofhissalaryLhuilliermadeitapreconditionforhisreturntoworkthatheexecutesa
promissorynoteforhisindebtednessonApril10,1990,heexecutedapromissorynoteandwas
allowedtoreturntoworkonJuly20,1990,heandtheotherpetitioners,abandonedtheiremployment
hewasnotdismissedbuthewasallowedtoreturntoworkandwasonlymadetoexecutea
promissorynotewhenthecompanyfoundoutsometimeinMarch1990thathehadstolenrematado
jewelriesworthP70,670.00(Rec.,pp.97101).
c)Inthecaseoftheotherpetitioners,onJuly19,1990,GloriaAdrianowasfoundbyFloraGotohave
overdeclaredtheweightsandvaluesofcertainitemsofjewelrypawnedtothecompany,asaresultof
which,uponinvestigation,thepawnshopwasfoundtohavelosttheamountofP174,850.00aletter
datedJuly19,1990wasserveduponAdrianotoexplainwithin72hourswhysheshouldnotbe
terminatedonJuly20,1990,GloriaAdriano,FloridaVillaceran,EmiliaNegapatan,BrendaGadiano,
LeidenFernandez,JesusTomongha,AsteriaCampoandFloridaTalledodidnotreportforwork
althoughnorequestsforleaveofabsencewerefiledbythem,whichabsenceviolatedcompanyrules
onJuly21,1990,thesaidemployeesdidnotreportforworkanotheremployee,EleonorQuianola,
alsodidnotreportforworkalthoughshedidnotfilearequestforleaveofabsenceonJuly23,1990
thesaidnine(9)employeesdidnotreportforworkbecauseofthisunusualincident,themanagement
decidedtomakeaninventoryofthetransactionsinAgenciaCebuanaandtherematadodiamond
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studdedjewelrytheinventoryshowedthatthepawnshopincurredaconsiderablelossasaresultof
theanomalousoverpricingofpawneditemsandtheemployeesimmediatelyresponsiblewereGloria
Adriano,FloridaTalledoandLeidenFernandez,beingtheappraiser,writerandpayer,respectivelythe
inventoryalsoshowedthatoftherematadodiamondstuddedjewelries,itemsworthP1,592,200.00
werelostforwhichFloridaVillaceranandEmiliaNegapatanweredirectlyresponsible,beingthe
employeesentrustedwiththeirsafekeepingacaseofEstafawasfiledonJuly24,1990beforethe
OfficeoftheCityProsecutorofCebuCityagainstGloriaAdriano,FloridaTalledo,LeidenFernandez,
AsteriaCampo,BrendaGadiano,FloridaVillaceran,EmiliaNegapatan,andJesusTomonghaand
three(3)otherunknownpersonsacaseofTheftwasfiledonAugust16,1990withtheOfficeofthe
CityProsecutorofCebuCityagainstFloridaVillaceranandEmiliaNegapatanwhenLhuillierleftfor
HongkongonJuly19,1990,shedidnotterminatetheemploymentofGloriaAdrianonorwasshe
advisednottoreportforwork,althoughaletterwasserveduponherrequiringhertoexplainwithin72
hourswhysheshouldnotbeterminatedfromheremploymentwhenLhuillierarrivedfromHongkong,
shecausedtobeservedupontheeight(8)petitionerswhojoinedAdriano,lettersdatedJuly25,1990
requiringthemtoexplainthesuddenabandonmentoftheirpostspetitioners,exceptLim,insteadof
givinganexplanation,claimedthattheiremployment[s]wereterminatedonJuly19,1990Lhuillier
waspreventedfrompursuinganyactioninrespectoftheillegalabandonmentoftheirworkbythenine
(9)petitionersbecauseshewasservedwithsummonsintheinstantcasepetitionersdidnotreportfor
workandvoluntarilyabandonedtheirworkonJuly19,1990inordertodramatizetheirsympathyfor
GloriaAdriano,andtheywerenotdismissedfromtheiremploymenttheirdemandforanawardof
damagesandattorneysfeeswasunwarrantedpetitionershadnocauseofactionagainstLhuillier
becausetheywerenotterminatedfromemploymentandQuianolacouldnothavebeenterminated
fromemploymentonJuly21,1990becauseLhuillierwasinHongkongatthattime(Rec.,pp.96108).
6.TrialonthemeritsensuedandhearingswerescheduledonJuly5,8,and12,1991.
7.ThehearingscheduledonJuly5,1991was,however,postponedbyagreementofthepartiesas
shownintheminutesoftheproceedingsonJuly8,1991:
xxxxxxxxx
REMARKS
Thiscasewasscheduledforthecrossexaminationofthelastwitnesses(sic),MarilynLim,whoisone
ofthecomplainantsofthis(sic)consolidatedcases.
Thescheduleddateswas(sic)July5,8,and12,1991whichdateswereforthecrossexamination(sic)
ofMarilynLimandfortherespondentstopresenttheirevidence.
TheJuly5,1991(sic)waspostponeduponaggreement[sic]ofthepartiesandcounselsandthatit
wasaggreed(sic)therepondents(sic)counselwillcrossexamineMarilynLimonJuly8,1991andfor
therespondentstopresenttheirevidenceonJuly12,1991.Inasmuch(sic)astherespondentsand
theircounselfailedtoappeartodaytocrossexamineMarilynLim,wemovedthattherespondentbe
declaredhavingwaivedtheirrights(sic)tocrossexamineMarilynLim.(Rec.,p.176).
8.OnJuly8,1991,counselforpetitionersfiledComplainantsFormalOfferofEvidence(Rec.,pp.182
187).
9.AtthehearingscheduledonJuly12,1991,Atty.SenoandLhuillierfailedtoappear.Thus,counsel
forpetitionerssubmittedtheinstantcaseforresolution(Rec.,p.181).
10.OnJuly18,1991,aRulingwasissuedbyLaborArbiterVelasquez,admittingcomplainants
exhibits(Rec.,pp.189190).
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11.OnJuly30,1991,counselforpetitionersfiledanUrgentMotionForEarlyDecision(Rec.,pp.191
193).
12.OnAugust6,1991,Atty.SenofiledaCommenttotheOfferofExhibitsWithCounterManifestation
statingthat:
[T]hefailureofundersignedtoappearonthedateofhearingwasforthereasonthathiscarbogged
down,asinfacthecalleduptheOfficeoftheHearingOfficer.Whilehisabsencemaybeconsidereda
waivertocrossexaminethewitness,itcannotbetakentomeanforfeitureoftherighttopresent
admissibleevidenceagainstthecomplainantwitness.(Rec.,pp.195197)
13.OnAugust9,1991,Atty.SenofiledhisCommentonComplainantsUrgentMotionForEarly
DecisionprayingthatLhuillierbegivenaperiodoften(10)daysfromAugust9,1991withinwhichto
submitadditionalaffidavitsandthereaftertoconsiderthecasessubmittedforresolution(Rec.,pp.
199200).
14.OnAugust15,1991,petitionersfiledaCounterCommentOnRespondentsCommentof[sic]
MotionForEarlyDecisionallegingthatunderRuleVII,Section10(c)oftheRevisedRulesofCourtof
theNLRCwhichreads:
xxxxxxxxx
c)Incaseofunjustifiednonappearancebytherespondentduringher/histurntopresentevidence,
despiteduenotice,thecaseshallbeconsideredsubmittedfordecisiononthebasisoftheevidence
sofarpresented.
thenonappearanceofLhuillieroritscounselonthescheduleddatesofhearingonJuly8and12,
1991,wasclearlyunjustified(Rec.,pp.202205).
15.OnOctober14,1991,Atty.SenofiledaMotionReiteratingTheRequestForSubmissionOf
AdditionalAffidavitsthereinallegingthatLhuillierspreviousmotiontopresentadditionalaffidavitshad
notbeenacteduponandthathehadnotreceivedanorderconsideringtheinstantcasesubmittedfor
resolution.Withthemotion,Lhuilliersubmittedtheaffidavitsofadditionalwitnesses,prayingthatsaid
supplementalaffidavitsbeadmittedandpresentationofadditionalevidencebeallowed(Rec.,pp.207
209).
16.OnOctober16,1991,petitionersfiledanOppositionOn[sic]RespondentsRequestFor
SubmissionOfAdditionalAffidavitsAndUrgentMotionToReleaseDecision,allegingthatcounselfor
Lhuillierwasgivenampleopportunitytopresenthisevidencethatbyhisfailuretoappearatthe
scheduledhearingswithoutanyreasonorpriormotionforpostponement,hewasdeemedtohave
waivedhisrighttopresentevidenceandthataboutthelaterpartofAugust1991,uponlearningthat
LaborArbiterVelasquezwouldbetransferredtoNLRC,Tacloban,they(petitioners)inquiredaboutthe
statusoftheinstantcaseandtheywereinformedbyLaborArbiterVelasquezthataDecisionwas
alreadyrendered(Rec.,pp.203205).
On August 30, 1991, the labor arbiter rendered a decision in favor of petitioners. On appeal,
RespondentNLRCvacatedthelaborarbitersorderandremandedthecaseforfurtherproceedings.It
subsequentlydeniedthemotionforreconsideration.
RespondentNLRCsRuling
RuledtheNLRC:[8]
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Inresolvingthisissue[ofdueprocess],itisnecessarytogooverthepertinentprovisionsofthe1990
NLRCRulesofProcedure,moreparticularlySec.11,RuleV.
RuleVProceedingsBeforetheLaborArbiters:
Section11.NonappearanceofPartiesatConference/Hearings.(a)Two(2)successiveabsencesat
aconference/hearingbythecomplainantorpetitioner,whowasdulynotifiedthereofmaybesufficient
causetodismissthecasewithoutprejudice.Whereproperjustification,however,isshownbyproper
motiontowarrantthereopeningofthecase,theLaborArbitershallcallasecondhearingand
continuetheproceedingsuntilthecaseisfinallydecided.Dismissalofthecaseforthesecondtime
duetotheunjustifiednonappearanceofthecomplainantorpetitionerwhowasdulynotifiedthereof
shallbewithprejudice.
b)Incaseoftwo(2)successivenonappearancesbytherespondent,despiteduenotice,duringthe
complainantspresentationofevidence,thecomplainantshallbeallowedtopresentevidenceexparte,
subjecttocrossexaminationbytherespondent,whereproper,atthenexthearing.Uponcompletionof
suchpresentationofevidenceforthecomplainant,anothernoticeofhearingforthereceptionofthe
respondentsevidenceshallbeissued,withawarningthatfailureoftherespondenttoappearshallbe
construedassubmissionbyhimofthecaseforresolutionwithoutpresentinghisevidence.
c)Incaseoftwo(2)successiveunjustifiednonappearancesbytherespondentduringhisturnto
presentevidence,despiteduenotice,thecaseshallbeconsideredsubmittedfordecisiononthebasis
oftheevidencesofarpresented.
TheestablishedfactisthatJuly8and12,1991werethescheduleddatesforthecrossexaminationof
MarilynLim,lastwitnessforthecomplainantsandthestartofrespondentspresentationofevidence.It
isalsonotdisputedthatrespondentandcounselfailedtoappearattheJuly8hearing.Ascrutinyof
theminutesoftheJuly8,1991hearingwouldhoweverrevealthatthatdatewasalloted[sic]purposely
forthecrossexaminationofMarilynLimandthatrespondentspresentationofevidencewouldstarton
July12,1991.(page176,records)Technically,theLaborArbiterwascorrectinrulingthatrespondent
hadwaivedherrighttocrossexaminecomplainantMarilynLimwhenshefailedtoappearonJuly8,
1991.Butdefinitely,itwaserrorforhimtoconsiderthecasesubmittedfordecisionwhenrespondent
failedtoappearonJuly12,1991.Theabovecitedrulesareclearandexplicit.Ittakestwosuccessive
andunjustifiednonappearanceonthepartofrespondentbeforeheorshecanbeconsideredtohave
waivedhis/herrighttopresentevidenceandthereaftertoconsiderthecasesubmittedfordecisionon
thebasisoftheevidencethusfarpresented.RespondentsabsenceonJuly12,1991wasbutherfirst
since,aspointedout,itwasonthatdaythatshewassupposedtostartpresentingherevidence.What
theLaborArbitershouldhavedonewastosetanotherdateforthereceptionofrespondentsevidence.
Ifshestillfailedtoappear,hisrelianceonSec.11(c),RuleVoftheNewRulesofProcedureofthe
NLRCwouldhavebeenjustifiedandthisCommissionwouldnothesitatetoupholdhimonthat
respect.Asitis,thequestionedrulingwas,indeed,prematuretosaytheleast.Whileconcernforthe
lessprivilegedworkersandspeediin[sic]thedispositionoflaborcasesarehighlycommendable,
thoseconsiderationsshouldnotrunroughshodoverwellestablishedprinciplesofdueprocess.
Itmaybearguedthattheevidencesoughttobeintroducedbyrespondentarecontainedinthe
additionalaffidavitswhichnowformpartoftherecords,hencethisCommissioncannowdecidethis
appealonthemerits.Itiswithmorereasonthatthiscaseshouldberemandednotonlytoallow
respondenttoformallypresentherevidence,butalsotoallowcomplainantstocrossexamineand
confronttheiraccusers.(Underscoringsupplied.)
Notsatisfied,petitionersfiledthepresentpetitionbeforeusunderRule65oftheRulesofCourt.[9]
TheIssues
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PetitionerssubmittothisCourtthefollowingissues:[10]
A

TheHonorableCommissionhascommittedseriousreversibleerroramountingtoagraveabuseof
discretionandinexcessofjurisdictioninfindingthattheprivaterespondentwasnotaffordeddue
processbythehearinglaborarbiter,particularlythereceptionofprivaterespondentsevidence.
B

TheHonorableCommissionhascommittedseriousreversibleerroramountingtoagraveabuseof
discretionandinexcessofjurisdictioninfindingthatthedeclarationbythehearinglaborarbiter
submittingthesecasesfordecisiononJuly12,1991wasnotinaccordancewithRuleVSectionIIof
the1990NewRulesofProcedureoftheNLRC(attachedheretoasannexC).
C

TheHonorableCommissionhascommittedseriousreversibleerroramountingtoagraveabuseof
discretionandinexcessofjurisdictioningivingimportancetoprivaterespondentsadditionalalleged
affidavitswhichwerefiledonlyonOctober14,1991(attachedheretoasannexG1),bywayof
attachingthesameinprivaterespondentsmotionreiteratingrequestforsubmissionofadditional
affidavits(attachedheretoasannexG),longafterthehearinglaborarbiterrenderedadecisionon
August30,1992(attachedheretoasannexE),contrarytotheprivaterespondentsprayerand
commitment(attachedheretoasannexF1).
D

TheHonorableCommissionhascommittedseriousreversibleerroramountingtoagraveabuseof
discretion,insubstanceandinlaw,innotmodifyingtheappealeddecisionofthehearinglaborarbiter
(attachedheretoasannexE)withrespecttotheaccuracyofthemonetaryawardspursuanttothe
pertinentprovisionsoftheLaborCode,itsimplementingrulesandregulationsandpursuant
particularlytothecelebratedcaseofRoche(Philippines),etals.[sic]vs.NLRC,etals.,[sic]G.R.No.
83335,October12,1989.
E

TheHonorableCommissionhasnojurisdictiontoentertainprivaterespondentstwoappeals.
Putdifferentlybutmoreplainly,theissuesinthiscaseareasfollows:
1. Did the NLRC acquire jurisdiction over the appeal notwithstanding the alleged insufficiency of the
appealbond?
2.Wereprivaterespondentsdeprivedofdueprocessoflawbythelaborarbiter?
3.Werepetitionersillegallydismissed?
4. Assuming petitioners were illegally dismissed, was the computation of the backwages, service
incentiveleavepayanddamagesvalidandcorrect?

TheCourtsRuling
Thepetitionismeritorious.Weholdthattheprivaterespondentswerenotdenieddueprocessof
law by the labor arbiter and that nine of the petitioners were illegally dismissed, but that Petitioners
LimandCanonigowerenot.

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FirstIssue:InsufficiencyofAppealBond
PetitionerscontendthatRespondentNLRCdidnotacquirejurisdictionovertheappealofprivate
respondents because the appeal bond was insufficient. Although the total monetary award in their
favorwasP1,078,200.55,privaterespondentspostedacashbondintheamountofP752,183.00only.
In computing the monetary award for the purpose of posting an appeal bond, private respondents
relied on Rule VI, Section 6, of the 1990 New Rules of Procedure of the NLRC and excluded the
award for damages, litigation expenses and attorneys fees. Petitioners argue however that the said
rulecannotprevailoverArticle223oftheLaborCode,whichdoesnotprovideforsuchexclusion.
Weagreewithprivaterespondents.Article223oftheLaborCodeprovides:
xxxxxxxxx
Incaseofajudgmentinvolvingamonetaryaward,anappealbytheemployermaybeperfectedonly
uponthepostingofacashorsuretybondissuedbyareputablebondingcompanydulyaccreditedby
theCommissionintheamountequivalenttothemonetaryawardinthejudgmentappealedfrom.
Inanyevent,thedecisionoftheLaborArbiterreinstatingadismissedorseparatedemployee,insofar
asthereinstatementaspectisconcerned,shallimmediatelybeexecutory,evenpendingappeal.The
employeeshalleitherbeadmittedbacktoworkunderthesametermsandconditionsprevailingprior
tohisdismissalorseparationor,attheoptionoftheemployer,merelyreinstatedinthepayroll.The
postingofabondbytheemployershallnotstaytheexecutionforreinstatementprovidedtherein.xx
x.(Underscoringsupplied.)
Ontheotherhand,RuleVI,Section6ofthe1990NLRCNewRulesofProcedure,[11]invokedby
privaterespondent,provides:
Section6.Bond.IncaseofthedecisionofaLaborArbiterinvolvesamonetaryaward,anappealby
theemployershallbeperfectedonlyuponthepostingofacashorsuretybondissuedbyareputable
bondingcompanydulyaccreditedbytheCommissionortheSupremeCourtinanamountequivalent
tothemonetaryaward.
TheCommissionmay,inmeritoriouscasesanduponMotionoftheAppellant,reducetheamountof
thebond.However,anappealisdeemedperfecteduponthepostingofthebondequivalenttothe
monetaryawardexclusiveofmoralandexemplarydamagesaswellasattorneysfees.
Nothinghereinhowever,shallbeconstruedasextendingtheperiodofappeal.(Underscoring
supplied.)
There is no conflict between the two provisions. Article 223 lays down the requirement that an
appealbondshouldbefiled.Theimplementingrule,ontheotherhand,explainshowtheappealbond
shall be computed. The rule explicitly excludes moral and exemplary damages and attorneys fees
from the computation of the appeal bond. This exclusion has been recognized by the Court in a
number of cases. Hence, in Erectors vs. NLRC,[12] the Court nullified an NLRC order requiring the
posting of an appeal bond which, among others, even included in the computation the award of
P400,000.00 for moral and exemplary damages. Indeed, the said implementing rule is a
contemporaneous construction of Article 223 by the NLRC pursuant to the mandate of the Labor
Codehence,itisaccordedgreatrespectbythisCourt.[13]
In line with the desired objective of our labor laws to resolve controversies on their merits, the
Courthasheldthatthefilingofabondinappealsinvolvingmonetaryawardsshouldbegivenliberal
construction.[14] The rule requiring the employer to post a cash or surety bond to perfect his appeal
assurestheworkersthattheywillreceivethemoneyjudgmentawardedtothemuponthedismissalof
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the employers appeal. It also discourages employers from using an appeal to delay or even evade
theirobligationtosatisfythejustandlawfulclaimsoftheiremployees.[15]
Hence,deductingfromthetotalmonetaryawardofP1,078,200.55theamountofP200,000.00for
moralandexemplarydamages,P98,018.25forattorneysfeesandP30,000.00forlitigationexpenses,
theamountofthebondshouldbeP750,182.55.Thus,theappealbondactuallypostedintheamount
of P752,183 is even more than the amount of appeal bond that may be required from private
respondentsunderRespondentNLRCsrules.
SecondIssue:NoDenialofDueProcess
The NLRC ruled that private respondents were denied due process because the labor arbiter
deemedthecasesubmittedforresolutionwhentheyfailedtoattendthehearingsonJuly8and12,
1991. Under the NLRC Rules of Procedure, a case may be deemed submitted for decision on the
basis of the evidence thus far adduced in the event respondent incurs two successive absences
during his turn to present evidence.While the hearing on July 12, 1991 was for the presentation of
hereinprivaterespondentsevidence,theNLRCfoundthatthehearingonJuly8,1991wasscheduled
for the crossexamination of petitioners witness. Since the absences were not made during
respondents turn to present evidence, public respondent remanded the case to the labor arbiter for
furtherproceedings.
PetitionersdisputetheNLRCruling,contendingthatthepartiesinthiscasewereabletosubmit
theirrespectivepositionpaperstogetherwithsupportingaffidavitsandotherdocuments.Theystress
thatprivaterespondentsfailuretoattendthehearingsonJuly8and12,1991,withoutanyjustification
oramotionforpostponement,warrantedthesubmissionofthecasefordecisionpursuanttoSection
11,RuleVofthe1990NewRulesofProcedureoftheNLRC.TheyinsistthatthehearingonJuly8,
1991wasscheduledtoaffordprivaterespondentsnotonlyanopportunitytocrossexaminepetitioners
lastwitness,MarilynLim,[butalso]tostartthepresentationof[their]evidencexxx.[16]
On the other hand, private respondents argue that the labor arbiter erred in considering the
absenceoftheircounselduringthehearingsscheduledonJuly8andJuly12,1991aswaivernotonly
oftherighttocrossexaminebutoftherighttopresentevidence.Theyfurthercontendthatthelabor
arbiter released his decision notwithstanding the pendency of three unresolved motions.[17] These
circumstancesclearlyshowthattheywerenotaffordeddueprocessoflaw.[18]
To make a clear ruling, we again cite Rule V, Section 11 of the 1990 Rules of Procedure of
RespondentNLRC,whichprovides:
Section11.NonappearanceofPartiesatConference/Hearings.(a)Two(2)successiveabsencesat
aconference/hearingbythecomplainantorpetitioner,whowasdulynotifiedthereof,maybesufficient
causetodismissthecasewithoutprejudice.Whereproperjustification,however,isshownbyproper
motiontowarrantthereopeningofthecase,theLaborArbitershallcallasecondhearingand
continuetheproceedingsuntilthecaseisfinallydecided.Dismissalofthecaseofthesecondtimedue
totheunjustifiednonappearanceofthecomplainantorpetitionerwhowasdulynotifiedthereofshall
bewithprejudice.
(b)Incaseoftwo(2)successivenonappearancesbytherespondent,despiteduenotice,duringthe
complainantspresentationofevidence,thecomplainantshallbeallowedtopresentevidenceexparte,
subjecttocrossexaminationbytherespondent,whereproper,atthenexthearing.Uponcompletionof
suchpresentationofevidenceforthecomplainant,anothernoticeofhearingforthereceptionofthe
respondentsevidenceshallbeissued,withawarningthatfailureoftherespondenttoappearshallbe
construedassubmissionbyhimofthecaseforresolutionwithoutpresentinghisevidence.

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(c)Incaseoftwo(2)successiveunjustifiednonappearancesbytherespondentduringhisturnto
presentevidence,despiteduenotice,thecaseshallbeconsideredsubmittedfordecisiononthebasis
oftheevidencesofarpresented.(Underscoringsupplied).
It is undisputed that private respondents counsel failed to attend the hearings on the two
aforementioneddates.Moreover, the labor arbiter[19] and the NLRC held that the hearing on July 8,
1991wasonlyforthecrossexaminationofhereinpetitionerswitness,whilethatonJuly12,1991was
for the reception of private respondents evidence. This notwithstanding, we hold that the NLRC
committedgraveabuseofdiscretioninremandingthecasetothelaborarbiter.
Private respondents were able to file their respective position papers and the documents in
supportthereof,andalltheseweredulyconsideredbythelaborarbiter.[20]Indeed,therequirementsof
dueprocessaresatisfiedwherethepartiesaregiventheopportunitytosubmitpositionpapers.[21] In
anyevent,RespondentNLRCandthelaborarbiterareauthorizedundertheLaborCodetodecidea
caseonthebasisofthepositionpapersanddocumentssubmitted.[22]The holdingof anadversarial
trial depends on the discretion of the labor arbiter, and the parties cannot demand it as a matter of
right.Inotherwords,thefilingofpositionpapersandsupportingdocumentsfulfilledtherequirements
ofdueprocess.[23]Therefore,therewasnodenialofthisrightbecauseprivaterespondentsweregiven
theopportunitytopresenttheirside.[24]
Moreover,itshouldbenotedthatprivaterespondentsdidnotdisputetheorderofthelaborarbiter
submitting the case for decision immediately after its issuance. Likewise, they failed to present
additionalevidenceonthedatetheythemselvesspecified.ItwasonlyonAugust6,1991thatprivate
respondentscounsel,inhisCommentstotheOfferofExhibits[25]withcountermanifestation,explained
hisfailuretoappearatthehearingonJuly8,1991.Hisexplanation,quotedbelow,isnotcompelling.
[26]

Thefailureoftheundersignedtoappearonthedateofhearingwasforthereasonthathiscarbogged
down,asinfacthecalleduptheOfficeoftheHearingOfficer.Whilehisabsencemaybeconsidereda
waivertocrossexaminethewitness,itcannotbetakentomeanforfeitureoftherighttopresent
admissibleevidenceagainstthecomplainantwitness.
ThreedayslateronAugust9,1991,privaterespondentsmovedthattheybegivenaperiodoften
days from August 9, 1991 or until August 19, 1991 within which to submit additional affidavits,
afterwhich,thecaseswillbedeemedsubmittedforresolutiononthebasisofcomplainantsevidence
andrespondentspositionpaperandtheadditionalaffidavits.[27]Counsel,however,failedtosubmitthe
supposedevidenceonsaiddate.OnOctober14,1991,privaterespondentsfiledaMotionReiterating
theRequestforSubmissionofAdditionalAffidavits.[28]Again,privaterespondentsdidnotsubmitthe
saiddocuments.
Asearliernoted,theessenceofdueprocessissimplyanopportunitytobeheard,toexplainones
side, or to seek a reconsideration of the action or ruling complained of. In the case at bar, private
respondentsweregivenampleopportunitytodojustthatbuttheyfailed,forunknownreasons,toavail
themselves of such opportunity. They themselves moved that they be allowed to present additional
affidavitsonAugust19,1991,buttheyneverdidnovalidreasonwasgivenfortheirfailuretodoso.
Theircontentionthatthelaborarbiterfailedtoruleontheirmotiondeservesscantconsideration.Itis
axiomaticinfact,itisplainlycommonsensicalthatwhenacounselasksforanextensionoftimewithin
whichtofileapleading,hemustbereadywiththatpleadingonthedatespecifiedinhismotion,even
absentaresolutionororderdisposingofhismotion.
We cannot remand the instant case to the labor arbiter for further proceedings. Respondent
NLRC,onthebasisoftheevidenceonrecord,couldhaveresolvedthedispute.Toremandittothe
laborarbiteristodelayneedlesslythedispositionofthiscase,whichhasbeenpendingsinceJuly23,
1990.Itbecomesourdutyunderthecircumstancestodeterminethevalidityoftheallegationsofthe
parties. Remanding the case to the labor arbiter will just frustrate speedy justice and, in any event,
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wouldbeafutileexercise,asinallprobabilitythecasewouldendupwiththisCourt.We shall thus

ruleonthesubstantialclaimsoftheparties.
ThirdIssue:PetitionersWereIllegallyDismissed
Private respondents controvert the claim of illegal dismissal by maintaining that petitioners
abandonedtheiremployment.They aver thaton July 19, 1990, Petitioner GloriaAdriano,pawnshop
appraiser,overdeclaredtheweightsandvaluesofpawnedpiecesofjewelry,whichallegedlycaused
alossofatleastP174,850.InaletterdatedJuly19,1990,theyrequiredPetitionerAdrianotoexplain
within72hourswhyheremploymentshouldnotbeterminated.OnJuly20,1990,however,Petitioner
Adriano together with Petitioners Asteria Campo, Leiden Fernandez, Brenda Gadiano, Emilia
Negapatan, Eleonor Quianola, Jesus Tomongha, Florida Talledo and Florida Villaceran allegedly did
not report for work without any excuse. Thus, private respondents concluded that petitioners
abandoned their employment. They also state that they intended to pursue legal action against the
said petitioners for illegal abandonment. But before they could do so, they received summons
requiringthemtorespondtothecomplaintsofillegaldismissalfiledbythesaidninepetitioners.[29]
On the other hand, petitioners maintain that on July 19, 1990, Private Respondent Marguerite
Lhuillier, the pawnshop owner, told them not to report for work because their employment had been
terminated.Thus,theydidnotreportforworkthefollowingday,July20,1990.OnJuly23,1990,they
filedtheirrespectivecomplaintsbeforetheRegionalArbitrationBoardofRespondentNLRC.
Inviewoftheconflictingclaimsoftheparties,weexaminedtherecordsofthiscaseandfoundthat
privaterespondentsdidnotabandontheiremploymentrather,theywereillegallydismissed.
Tosucceedinpleadingabandonmentasavalidgroundfordismissal,theemployermustprove(1)
theintentionofanemployeetoabandonhisorheremploymentand(2)anovertactfromwhichsuch
intentionmaybeinferredi.e.,theemployeeshowednodesiretoresumehiswork.[30]Mereabsenceis
notsufficient.Theemployermustproveadeliberateandunjustifiedrefusaloftheemployeetoresume
his employment without any intention of returning.[31] Private respondents failed to discharge this
burden.Theclaimofabandonmentwasinconsistentwiththeimmediatefilingofpetitionerscomplaint
forillegaldismissalandprayerforreinstatement.Forhowcananinferencebemadethatanemployee
had no intention of returning to work, when he filed a complaint for illegal dismissal praying for
reinstatement three days after the alleged abandonment?[32] Moreover, considering that petitioners
had been with Pawnshop Lhuillier for several years ranging from six (6) years to thirty three (33)
yearsitisunlikelythattheywouldsimplyleavetheiremployment.Clearly,thereisnocogentbasis
forprivaterespondentstheorythatsaidpetitionersabandonedtheirwork.Inthislight,wesustainthe
findingofthelaborarbiterthatsaidpetitionerswereillegallydismissed,withneitherjustcausenordue
process.
PetitionersLimandCanonigoResigned
TheforegoingholdingcannotapplytoPetitionersMarilynLimandJosephCanonigo,however.
LimclaimsthatPrivateRespondentLhuillierforcedhertoresign,butatthesametimeassuredher
ofseparationpay.[33]OnFebruary5,1990,priortoLimsletterofresignationdatedFebruary24,1990,
[34]herlawyerproposedthefollowingtoPrivateRespondentLhuillier:[35]
1.ThatourclientMs.MarilynLimbegivenimmediatelyaclearanceuponresignationfromyourgood
companyandpaymentofseparationpayattherateofonemonthperyearofserviceand

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2.Thatourclientiswillingtoexecuteapromissorynoteonherindebtedness,andwillpayuponthe
sametermsprevailingbeforeherresignation.Ourclientsabilitytosettleherindebtednessshouldbe
givenkindconsiderationbyyourcompanyconsideringthathereventualresignationwillrenderher
joblessforawhile.Besides,perInvestigationReportNo.2,Seriesof1990,conductedbyyour
ResidentCounsel,Atty.MalcolmV.Seno,ourclienthasimpressedyourResidentCounselasa
personofmuchvalorandgreatdeterminationwhensheimmediatelyadmittedherguilt.
3.Thatthevariouscheckssheendorsedtoyourcompanybereturnedtoourclient,sothatshecould
fileacaseagainsttheissuersordrawersofthesame,beitcriminalorcivilinnature.(Emphasis
supplied).
Petitioner Lims testimony[36] that she has never been informed of any wrongdoing until her
terminationisbeliedbyherassertionsintheaforequotedletter.Heradmissionoftheoffensecharged
showsthatshewasnotcoercedtoresign.Besides,thefactthathercomplaintforillegaldismissalwas
filedlongafterherresignationonFebruary24,1990suggeststhatitwasamereafterthought.
On the other hand, Petitioner Canonigo contends that he was forced to sign his letter of
resignation dated July 14, 1990, because Private Respondent Lhuillier received reports from other
employees that he was responsible for some anomalies in the pawnshop. He also stated that he
resignedbecausehewasassuredofseparationpay.[37]LikePetitionerLim,hedidnotimmediatelyfile
acomplaintforillegaldismissal,doingsoonlyonJuly23,1990.Fromtheforegoingfacts,weseeno
cogent basis for holding that he was forced to resign. On the contrary, we find that he voluntarily
tendered his resignation on the assurance of separation pay. Clearly, Petitioner Canonigo, like Lim,
wasnotdismissedrather,heresignedvoluntarily.
FourthIssue:ServiceIncentiveLeavePayandDamages
In his decision, the labor arbiter granted varying amounts of service incentive leave pay to the
petitioners based on the length of their tenure i.e, the shortest was six years and the longest was
thirtythreeyears.Whilerecommendingthatthelaborarbitersdecisionbereinstatedsubstantially,the
solicitorgeneralrecommendedthattheawardofserviceincentiveleavebelimitedtothreeyears.This
isbasedonArticle291oftheLaborCodewhichprovides:
ART.291.MoneyClaims.Allmoneyclaimsarisingfromemployeremployeerelationsaccruing
duringtheeffectivityofthisCodeshallbefiledwithinthree(3)yearsfromthetimethecauseofaction
accruedotherwisetheyshallbeforeverbarred.
xxxxxxxxx.
Petitioners counter that Article 291 speaks clearly on the prescription of filing [an] action upon
monetary claims within three (3) years from the time the cause of action accrued, but it is not a
prescriptionofaperiodoftimeforthecomputationofmonetaryclaims.[38]
The clear policy of the Labor Code is to grant service incentive leave pay to workers in all
establishments,subjecttoafewexceptions.Section2,RuleV,BookIIIoftheImplementingRulesand
Regulations[39]providesthat[e]veryemployeewhohasrenderedatleastoneyearofserviceshallbe
entitledtoayearlyserviceincentiveleaveoffivedayswithpay.Serviceincentiveleaveisarightwhich
accruestoeveryemployeewhohasservedwithin12months,whethercontinuousorbrokenreckoned
fromthedatetheemployeestartedworking,includingauthorizedabsencesandpaidregularholidays
unlesstheworkingdaysintheestablishmentasamatterofpracticeorpolicy,orthatprovidedinthe
employmentcontracts,islessthan12months,inwhichcasesaidperiodshallbeconsideredasone
year.[40]Itisalsocommutabletoitsmoneyequivalentifnotusedorexhaustedattheendoftheyear.
[41]Inotherwords,anemployeewhohasservedforoneyearisentitledtoit.Hemayuseitasleave
daysorhemaycollectitsmonetaryvalue.To limit theaward to threeyears, as thesolicitorgeneral
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recommends, is to unduly restrict such right. The law indeed does not prohibit its commutation.
Moreover,thesolicitorgeneralsrecommendationiscontrarytotherulingoftheCourtinBustamanteet
al. vs. NLRC et al.[42] lifting the threeyear restriction on the amount of backwages and other
allowancesthatmaybeawardedanillegallydismissedemployee,thus:
Therefore,inaccordancewithR.A.No.6715,petitionersareentitledtotheirfullbackwages,inclusive
ofallowancesandotherbenefitsortheirmonetaryequivalent,fromthetimetheiractualcompensation
waswithheldfromthemuptothetimeoftheiractualreinstatement.(Underscoringsupplied.)
Since a service incentive leave is clearly demandable after one year of service whether
continuousorbrokenoritsequivalentperiod,anditisoneofthebenefitswhichwouldhaveaccrued
ifanemployeewasnototherwiseillegallydismissed,itisfairandlegalthatitscomputationshouldbe
uptothedateofreinstatementasprovidedunderSection279oftheLaborCode,asamended,which
reads:
ART.279.SecurityofTenure.Anemployeewhoisunjustlydismissedfromworkshallbeentitledto
reinstatementwithoutlossofseniorityrightsandotherprivilegesandtohisfullbackwages,inclusiveof
allowances,andtohisotherbenefitsortheirmonetaryequivalentcomputedfromthetimehis
compensationiswithheldfromhimuptothetimeofhisactualreinstatement.(underscoringsupplied).
However,theImplementingRulesclearlystatethatentitlementtobenefitprovidedunderthisRule
shallstartDecember16,1975,thedatetheamendatoryprovisionofthe[Labor]Codetookeffect.[43]
Hence,petitioners,exceptLimandCanonigo,shouldbeentitledtoserviceincentiveleavepayfrom
December16,1975uptotheiractualreinstatement.
Petitioners, citing Roche Philippines et al. vs. NLRC et al.,[44] further contend that the award of
damages in the case at bar should be increased, for there are eleven (11) complainants/petitioners
whose long years of employment was illegally, oppressively and wantonly terminated by the private
respondent.[45]
Wedisagree.Determinationoftheamountofmoraldamagesandattorneysfeesisbestlefttothe
discretionofthelaborarbiter.[46]Moraldamagesarerecoverablewherethedismissaloftheemployee
was attended by bad faith or fraud, or it constituted an act oppressive to labor, or it was done in a
mannercontrarytomorals,goodcustomsorpublicpolicy.[47]Inthecasebeforeus,recordsshowthat
petitionersdismissalsweredoneoppressivelyandinbadfaith,fortheywerejustsummarilydismissed
without even the benefit of notice and hearing. The wellsettled rule is that the employer shall be
sanctioned for noncompliance with the requirements of, or for failure to observe, due process in
dismissing its employees.[48] Petitioners were likewise subjected to unnecessary embarrassment or
humiliationbecauseofthefilingofthecriminalchargeofqualifiedtheft,whichwaslaterdismissed[49]
bytheinvestigatingprosecutor.[50]Itfollowsthenthattheawardofattorneysfeesislikewiseproper,for
the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur
expensestoprotecthisinterest.[51]
FullBackwagesforDismissalsEffectedAfterMarch21,1989
Having determined that petitioners, except Lim and Canonigo, were illegally dismissed, we next
resolve the question of whether Respondent NLRC gravely abused its discretion in ordering the
reinstatementofdismissedemployeesandthepaymenttothemoffullbackwagesor,ifreinstatement
wasnolongerfeasible,whetherthegranttothemofseparationpayplusbackwageswascorrect.In
severalcases,[52]thisCourthasheldthatillegallydismissedemployeesareentitledtoreinstatement
andfullbackwages.Ifreinstatementisnotpossible,theemployeesareentitledtoseparationpayand
fullbackwages.Accordingly,theawardtopetitionersofbackwagesforthreeyearsshouldbemodified
in accordance with Article 279[53] of the Labor Code, as amended by R.A. 6715, by giving them full
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backwageswithoutconditionsandlimitations,thedismissalshavingoccurredaftertheeffectivityofthe
amendatorylawonMarch21,1989.[54]Thus,theCourtheldinBustamante:[55]
TheclearlegislativeintentoftheamendmentinRep.ActNo.6715istogivemorebenefitstoworkers
thanwaspreviouslygiventhemundertheMercuryDrugruleorthedeductionofearningselsewhere
rule.Thus,acloseradherencetothelegislativepolicybehindRep.ActNo.6715pointstofull
backwagesasmeaningexactlythat,i.e.,withoutdeductingfrombackwagestheearningsderived
elsewherebytheconcernedemployeeduringtheperiodofhisillegaldismissal.
WHEREFORE, the petition is hereby GRANTED and the assailed Decision and Resolution are
REVERSED and SET ASIDE. The labor arbiters decision is REINSTATED with MODIFICATIONS,
suchthattheawardofseparationpayisdeletedandtheserviceincentiveleavepayiscomputedfrom
December 16, 1975 up to petitioners actual reinstatement. Full backwages, including the accrued
thirteenthmonthpay,arealsoawardedtotheninepetitionersLeidenFernandez,BrendaGadiano,
Gloria Adriano, Emelia Negapatan, Jesus Tomongha, Eleonor Quianola, Asteria Campo, Florida
Villaceran and Florida Talledo from the date of their illegal dismissal to the time of their actual
reinstatement. Petitioners Lim and Canonigo, whom we find to have voluntarily resigned, are not
entitledtoanybenefit.
SOORDERED.
Narvasa,C.J.,(Chairman),Romero,Melo,andFrancisco,JJ.,concur.
[1]

Spelled"Marguerite"inthepetition,itwas"Margueritte"intheOSG'sCommentdatedDeccemner21,1992.

[2]

Rollo,pp.154158.

[3]

FourthDivision,composedofCommissionerBernabeS.Batuhan,ponenteandPresidingCommissionerErnestoG.
LadridoIIIandCommissionerIreneaE.Ceniza,concurring.
[4]
Decision,p.5rollo,p.158.
[5]

Rollo,pp.79109.

[6]

LaborArbiter'sdecision,pp.2931rollo,pp.107109.

[7]

Rollo,pp.203214.Therewasnoparagraphno.4inthisComment.

[8]

Rollo,pp.155158.

[9]

ThecasewasdeemedsubmittedforresolutionuponthepostingofprivaterespondentsmemorandumonOctober18,
1996.(Rollo,p.380.)
[10]

Rollo,pp.1820originaltextinuppercase.

[11]

EffectiveOctober9,1990.(Diolavs.NationalLaborRelationsCommission,222SCRA860,May31,1993.).Although
this section was amended on November 5, 1993, its provision for the computation of the bond remains essentially the
same.
[12]

202SCRA597,October10,1991,perNarvasa,J.(nowChiefJustice).SeealsoStarAngelHandicraftvs.NLRC,236
SCRA580September20,1994.
[13]

Bagatsing vs. Committee on Privatization, 246 SCRA 334, July 14, 1995 citing Nestl Philippines, Inc. vs. Court of
Appeals,203SCRA504,November13,1991Enriquevs.CourtofAppeals,229SCRA180,186,January10,1994citing
Sorianovs.OffshoreShippingandManningCorporation,177SCRA513,September14,1989.
[14]

Manila Mandarin Employees Union vs. NLRC, 264 SCRA 320, 331, November 19, 1996 Star Angel Handicraft vs.
National Labor Relations Commission, 236 SCRA 580, September 20, 1994 Blancaflor vs. National Labor Relations
Commission,218SCRA366,February2,1993Radavs.NationalLaborRelationsCommission,205SCRA69,January9,
1992 Erectors, Inc. vs. NLRC, 202 SCRA 597, October 10, 1991 YBL (Your Bus Line) vs. National Labor Relations
Commission,190SCRA160,September28,1990.
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[15]

VironGarmentsManufacturing,Co.,Inc.,etal.vs.NLRCetal.,207SCRA339,March18,1992.

[16]

Petition,p.19Rollo,p.22.

[17]Rollo,p.171.Theseare:

a.UrgentMotionReiteratingtheRequestforSubmissionofAdditionalAffidavitsdatedOctober14,1991submittedbyAtty.
MalcolmSeno,
b.UrgentMotiontoResolveRespondentsPendingMotionandCommentsonPetitionersUrgentMotionToRelease
DecisiondatedNovember25,1991submittedbyAtty.LuisV.Diores,
c.UrgentMotiontoAllowRespondentstoCrossExamineComplainantsandToPresentEvidenceUnderRuleV,Sec.11
(b)and(c)oftheNewRulesofProcedureoftheNLRC.
[18]

Rollo,pp.170172.

[19]

Labor arbiters decision, p. 25 Rollo, p. 103. The labor arbiter held that [o]n July 8, 1991 and July 12, 1991, the
scheduled dates for the respondent to crossexamine complainant, Marilyn Lim and for the respondent to present her
evidence,respectively, respondent and her counsel without giving reason nor filed [sic] any motion to postpone failed to
appearonthesaidscheduleddates.(Underscoringsupplied).Ineffect,thelaborarbiterbeliedpetitionerscontentionthat
the hearing on July 8, 1991 was for the crossexamination of the petitioners witness and for the reception of private
respondentsevidence.
[20]

Ibid.,pp.2728Rollo,pp.105106.

[21]

OdinSecurityAgencyvs.DelaSerna,etal.,182SCRA472,479,February21,1990PacificTimberExportCorp. vs.
NLRC,224SCRA860,July30,1993.
[22]

Cagampan et al. v. NLRC et al., 195 SCRA 533, 539, March 22, 1991 Salonga vs. National Labor Relations
Commission, 254 SCRA 111, 115, February 23, 1996 citing Lawrence vs. National Labor Relations Commission, 205
SCRA737,750,February4,1992.SeealsoPacificTimberExportCorp.vs.NLRC,224SCRA860,862,July30,1993
Commando Security Agency vs. NLRC, 211 SCRA 645, 649, July 20, 1992 Robusta Agro Marine Products, Inc. vs.
Gorombalem,175SCRA93,98,July5,1989.
[23]

Yapvs.Inciong,186SCRA664,June21,1990B.Sta.Rita&Company,Inc.vs.ArroyoandNLRC,168SCRA581,
December20,1988.
[24]

DivineWordHighSchoolvs.NLRC,143SCRA346,August6,1986MunicipalityofDaetvs.HidalgoEnterprises,Inc.,
138SCRA265,August28,1985.
[25]

Rollo,pp.7577.

[26]

CommentstotheOfferofExhibits,p.2Rollo,p.76.

[27]

Ibid.

[28]

Rollo,pp.112114.

[29]

NLRCRecords,p.116Rollo,pp.8992.

[30]

JacksonBuildingCondominiumCorporationvs.NationalLaborRelationsCommission,246SCRA329,332,July14,
1995WyethSuacoLaboratories,Inc.vs.NationalLaborRelationsCommission,219SCRA356,March2,1993Dagupan
BusCo.,Inc.vs.NLRC,191SCRA328,November9,1990.
[31]

Labor vs. National Labor Relations Commission, 248 SCRA 183, 198, September 14, 1995 citing Kingsize
ManufacturingCorp.vs.NLRC,238SCRA349,November24,1994F.R.F.Enterprises,Inc.vs.NLRC,243SCRA593,
April21,1995.
[32]

JacksonBuildingCondominiumCorporationvs.NationalLaborRelationsCommission,supra,atpp.332333Remerco
GarmentsManufacturingvs.MinisterofLaborandEmployment,135SCRA167,February28,1985JudricCanningCorp.
vs.Inciong,115SCRA887,August19,1982.
[33]

NLRCRecords,pp.312313TSN,February27,1991,pp.1920.

[34]

NLRCRecords,p.113.

[35]

NLRCRecords,pp.111112.

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[36]

TSN,February27,1991,p.13.

[37]

NLRCRecords,pp.326327TSN,February27,1991,pp.3334.

[38]

Rollo,p.242underscoringomitted.

[39]

EntitledRighttoserviceincentiveleave.

[40]

Section3,RuleV,BookIII,ImplementingRulesandRegulationsoftheLaborCode.

[41]

Section5,RuleV,BookIII,ImplementingRulesandRegulationsoftheLaborCode.

[42]

G.R.No.111651,pp.89,November28,1996,perPadilla,J.

[43]

Section4,RuleV,BookIII,ImplementingRulesandRegulationsoftheLaborCode.

[44]

178SCRA386,October5,1989,perGancayco,J.

[45]

Rollo,p.243underscoringomitted.

[46]

Cf. Suario vs. Bank of the Philippine Islands, 176 SCRA 688, 696,August 25, 1989 citing Primero vs. Intermediate
AppellateCourt,156SCRA435,December14,1987.
[47]

Article2220oftheNewCivilCode.

[48]

MagnoliaDairyProductsCorp.vs.NLRC,252SCRA483,491,January29,1996.

[49]

AsofthefilingofpetitiononJune10,1992,apetitionforreviewofthedismissalwasstillpendingattheDepartmentof
Justice.
[50]

Roche(Philippines)vs.NationalLaborRelationsCommission,178SCRA386,397,October5,1989Lopezvs.Javier,
252SCRA68,79,January22,1996citingSpartanSecurityandDetectiveAgency,Inc.vs.NLRCetal.,213SCRA528,
1992Octotvs.Ybaez,111SCRA79.
[51]

Article2208,paragraph(2)oftheCivilCode.

[52]

Citytrust Banking Corporationvs. NLRC, 258 SCRA 621, 630, July 11, 1996 citing Article 279 of the Labor Code as
amendedbyRA6715GoldCityIntegratedPortService,Inc.vs.NationalLaborRelationsCommission,245SCRA627,
July6,1995Torillovs.Leogardo,197SCRA471,May27,1991IndophilAcrylicMfg.Corp.vs.NLRC,226SCRA723,
September27,1993Quionesvs.NationalLaborRelationsCommission,246SCRA294,298,July14,1995MolaveTours
Corporation vs. National Labor Relations Commission, 250 SCRA 325, 329, November 24, 1995 Polymedic General
Hospitalvs.NLRC,134SCRA420,January31,1985Egyptairvs.NationalLaborRelationsCommission,148SCRA125,
February27,1987.
[53]

Article 279. Security of Tenure. [as amended by Section 34 of RA 6715]. In cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An
employeewhoisunjustlydismissedfromworkshallbeentitledtoreinstatementwithoutlossofseniorityrightsandother
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent
computedfromthetimehiscompensationwaswithheldfromhimuptothetimeofhisactualreinstatement.
[54]

Bustamantevs.NLRC,supra.

[55]

Ibid.,p.8

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