Republic of the Philippines execution of the employment contract that was being invoked by McBurnie was
SUPREME COURT solely for the purpose of allowing McBurnie to obtain an alien work permit in the
Manila
EN BANC
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013
ANDREW JAMES MCBURNIE, Petitioner,
vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.
RESOLUTION
REYES, J.:
For resolution are the
(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-
Managers, Inc. (EGI) and E. Ganzon, Inc. (respondents) on March 27, 2012,
seeking a reconsideration of the Courts Decision2 dated September 18,
2009 that ordered the dismissal of their appeal to the National Labor
Relations Commission (NLRC) for failure to post additional appeal bond in
the amount of P54,083,910.00; and
(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie
(McBurnie) on September 26, 2012, assailing the Court en bancs
Resolution4 dated September 4, 2012 that (1) accepted the case from the
Courts Third Division and (2) enjoined the implementation of the Labor
Arbiters (LA) decision finding him to be illegally dismissed by the
respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent facts and
proceedings
On October 4, 2002, McBurnie, an Australian national, instituted a complaint for
illegal dismissal and other monetary claims against the respondents. McBurnie
claimed that on May 11, 1999, he signed a five-year employment agreement 5 with
the company EGI as an Executive Vice-President who shall oversee the management
of the companys hotels and resorts within the Philippines. He performed work for
the company until sometime in November 1999, when he figured in an accident that
compelled him to go back to Australia while recuperating from his injuries. While in
Australia, he was informed by respondent Ganzon that his services were no longer
needed because their intended project would no longer push through.
The respondents opposed the complaint, contending that their agreement with
McBurnie was to jointly invest in and establish a company for the management of
hotels. They did not intend to create an employer-employee relationship, and the
Philippines. At the time McBurnie left for Australia for his medical treatment, he had
not yet obtained a work permit.
In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been
illegally dismissed from employment, and thus entitled to receive from the
respondents the following amounts: (a) US$985,162.00 as salary and benefits for
the unexpired term of their employment contract, (b) P2,000,000.00 as moral and
exemplary damages, and (c) attorneys fees equivalent to 10% of the total monetary
award.
Feeling aggrieved, the respondents appealed the LAs Decision to the NLRC. 7 On
November 5, 2004, they filed their Memorandum of Appeal 8 and Motion to Reduce
Bond9, and posted an appeal bond in the amount ofP100,000.00. The respondents
contended in their Motion to Reduce Bond, inter alia, that the monetary awards of
the LA were null and excessive, allegedly with the intention of rendering them
incapable of posting the necessary appeal bond. They claimed that an award of
"more than P60 Million Pesos to a single foreigner who had no work permit and who
left the country for good one month after the purported commencement of his
employment" was a patent nullity.10 Furthermore, they claimed that because of their
business losses that may be attributed to an economic crisis, they lacked the
capacity to pay the bond of almost P60 Million, or even the millions of pesos in
premium required for such bond.
On March 31, 2005, the NLRC denied 11 the motion to reduce bond, explaining that
"in cases involving monetary award, an employer seeking to appeal the [LAs]
decision to the Commission is unconditionally required by Art. 223, Labor Code to
post bond in the amount equivalent to the monetary award x x x." 12 Thus, the NLRC
required from the respondents the posting of an additional bond in the amount
of P54,083,910.00.
When their motion for reconsideration was denied,13 the respondents decided to
elevate the matter to the Court of Appeals (CA) via the Petition for Certiorari and
Prohibition (With Extremely Urgent Prayer for the Issuance of a Preliminary Injunction
and/or Temporary Restraining Order)14 docketed as CA-G.R. SP No. 90845.
In the meantime, in view of the respondents failure to post the required additional
bond, the NLRC dismissed their appeal in a Resolution 15 dated March 8, 2006. The
respondents motion for reconsideration was denied on June 30, 2006. 16 This
prompted the respondents to file with the CA the Petition for Certiorari (With Urgent
Prayers for the Immediate Issuance of a Temporary Restraining Order and a Writ of
Preliminary Injunction)17docketed as CA-G.R. SP No. 95916, which was later
consolidated with CA-G.R. SP No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the respondents
application for a writ of preliminary injunction. It directed the NLRC, McBurnie, and
all persons acting for and under their authority to refrain from causing the execution
and enforcement of the LAs decision in favor of McBurnie, conditioned upon the
respondents posting of a bond in the amount of P10,000,000.00. McBurnie sought
reconsideration of the issuance of the writ of preliminary injunction, but this was
denied by the CA in its Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on Certiorari 20 docketed as
G.R. Nos. 178034 and 178117, assailing the CA Resolutions that granted the
respondents application for the injunctive writ. On July 4, 2007, the Court denied
the petition on the ground of McBurnies failure to comply with the 2004 Rules on
Notarial Practice and to sufficiently show that the CA committed any reversible
error.21 A motion for reconsideration was denied with finality in a Resolution 22 dated
October 8, 2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for
Reconsideration and (2) To Admit the Attached Supplemental Motion for
Reconsideration,23 which was treated by the Court as a second motion for
reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of Court.
Thus, the motion for leave was denied by the Court in a Resolution 24 dated
November 26, 2007. The Courts Resolution dated July 4, 2007 then became final
and executory on November 13, 2007; accordingly, entry of judgment was made in
G.R. Nos. 178034 and 178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP
No. 95916 and rendered its Decision26 dated October 27, 2008, allowing the
respondents motion to reduce appeal bond and directing the NLRC to give due
course to their appeal. The dispositive portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition
docketed as CA GR SP No. 90845 and the petition for certiorari docketed as CA GR
SP No. 95916 are GRANTED. Petitioners Motion to Reduce Appeal Bond is GRANTED.
Petitioners are hereby DIRECTED to post appeal bond in the amount
ofP10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners
appeal in CA GR SP No. 95916 which is ordered remanded to the NLRC for further
proceedings.
SO ORDERED.27
On the issue28 of the NLRCs denial of the respondents motion to reduce appeal
bond, the CA ruled that the NLRC committed grave abuse of discretion in
immediately denying the motion without fixing an appeal bond in an amount that
was reasonable, as it denied the respondents of their right to appeal from the
decision of the LA.29The CA explained that "(w)hile Art. 223 of the Labor Code
requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of the
NLRC Rules of Procedure, as amended, recognized as exception a motion to reduce
bond upon meritorious grounds and upon posting of a bond in a reasonable amount
in relation to the monetary award." 30
On the issue31 of the NLRCs dismissal of the appeal on the ground of the
respondents failure to post the additional appeal bond, the CA also found grave
abuse of discretion on the part of the NLRC, explaining that an appeal bond in the
amount of P54,083,910.00 was prohibitive and excessive. Moreover, the appellate
court cited the pendency of the petition for certiorari over the denial of the motion
to reduce bond, which should have prevented the NLRC from immediately dismissing
the respondents appeal.32
Undeterred, McBurnie filed a motion for reconsideration. At the same time, the
respondents moved that the appeal be resolved on the merits by the CA. On March
3, 2009, the CA issued a Resolution33 denying both motions. McBurnie then filed with
the Court the Petition for Review on Certiorari34 docketed as G.R. Nos. 186984-85.
In the meantime, the NLRC, acting on the CAs order of remand, accepted the appeal
from the LAs decision, and in its Decision35 dated November 17, 2009, reversed and
set aside the Decision of the LA, and entered a new one dismissing McBurnies
complaint. It explained that based on records, McBurnie was never an employee of
any of the respondents, but a potential investor in a project that included said
respondents, barring a claim of dismissal, much less, an illegal dismissal. Granting
that there was a contract of employment executed by the parties, McBurnie failed to
obtain a work permit which would have allowed him to work for any of the
respondents.36 In the absence of such permit, the employment agreement was void
and thus, could not be the source of any right or obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its
Decision37 which reversed the CA Decision dated October 27, 2008 and Resolution
dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-
G.R. SP Nos. 90845 and 95916 dated October 27, 2008 granting respondents Motion
to Reduce Appeal Bond and ordering the National Labor Relations Commission to
give due course to respondents appeal, and its March 3, 2009 Resolution denying
petitioners motion for reconsideration, are REVERSED and SET ASIDE. The March 8,
2006 and June 30, 2006 Resolutions of the National Labor Relations Commission in
NLRC NCR CA NO. 042913-05 dismissing respondents appeal for failure to perfect
an appeal and denying their motion for reconsideration, respectively, are
REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents failure to post a bond equivalent in
amount to the LAs monetary award was fatal to the appeal.39 Although an appeal
bond may be reduced upon motion by an employer, the following conditions must
first be satisfied: (1) the motion to reduce bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant. Unless the NLRC grants the motion to reduce the cash bond within
the 10-day reglementary period to perfect an appeal from a judgment of the LA, the
employer is mandated to post the cash or surety bond securing the full amount
within the said 10-day period.40 The respondents initial appeal bond of P100,000.00
was grossly inadequate compared to the LAs monetary award.
The respondents first motion for reconsideration41 was denied by the Court for lack
of merit via a Resolution42dated December 14, 2009.
Meanwhile, on the basis of the Courts Decision, McBurnie filed with the NLRC a
motion for reconsideration with motion to recall and expunge from the records the
NLRC Decision dated November 17, 2009.43 The motion was granted by the NLRC in
its Decision44 dated January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the Decision
dated September 18, 2009, the respondents filed with the Court a Motion for Leave
to Submit Attached Second Motion for Reconsideration 46 and Second Motion for
Reconsideration,47 which motion for leave was granted in a Resolution48 dated March
15, 2010. McBurnie was allowed to submit his comment on the second motion, and
the respondents, their reply to the comment. On January 25, 2012, however, the
Court issued a Resolution49 denying the second motion "for lack of merit,"
"considering that a second motion for reconsideration is a prohibited pleading x x
x."50
The Courts Decision dated September 18, 2009 became final and executory on
March 14, 2012. Thus, entry of judgment51 was made in due course, as follows:
ENTRY OF JUDGMENT
SPECIAL MERITORIOUS CIRCUMSTANCE TO MERIT RECONSIDERATION OF THIS
APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH
RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW
SHOULD BE GIVEN A LIBERAL INTERPRETATION, ESPECIALLY IF THERE ARE SPECIAL
MERITORIOUS CIRCUMSTANCES AND ISSUES.
IV. THE LAS JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN P60
MILLION PESOS TO A SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO
WORKING VISA.

V.
This is to certify that on September 18, 2009 a decision rendered in the above-
entitled cases was filed in this Office, the dispositive part of which reads as follows:
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS
COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE
xxxx
AGAINST THE NLRC.

and that the same has, on March 14, 2012 become final and executory and is hereby
VI.
recorded in the Book of Entries of Judgments. 52

NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER

The Entry of Judgment indicated that the same was made for the Courts Decision
17, 2009 DECISION.
rendered in G.R. Nos. 186984-85.

VII.
On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third
Motion for Reconsideration, with an attached Motion for Reconsideration (on the
Honorable Courts 25 January 2012 Resolution) with Motion to Refer These Cases to THE HONORABLE COURTS 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY
the Honorable Court En Banc.53 The third motion for reconsideration is founded on SERIOUS IRREGULARITIES.
the following grounds:
VIII.
I.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLY
GRANTED RESPONDENTS "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR
IX.
RECONSIDERATION."

THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25
ARGUMENTS OF THE RESPONDENTS WHICH ARE AS FOLLOWS:
JANUARY 2012 RESOLUTION CANNOT DENY THE " SECOND MOTION FOR
RECONSIDERATION " ON THE GROUND THAT IT IS A PROHIBITED PLEADING.
MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY PECULIAR (A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS
CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT BEFORE THE [LA] (WHEN 2 MISSED HEARINGS MEAN DISMISSAL).
CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS "SECOND MOTION FOR
RECONSIDERATION," WHICH ARE:
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE
EXPERTS, INC., BUT NOT OF ANY OF THE RESPONDENTS.
II.
(C) PETITIONERS POSITIVE LETTER TO RESPONDENT MR. EULALIO
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE GANZON CLEARLY SHOWS THAT HE WAS NOT ILLEGALLY
OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND DISMISSED NOR EVEN DISMISSED BY ANY OF THE RESPONDENTS
 AND PETITIONER EVEN PROMISED TO PAY HIS DEBTS FOR
ADVANCES MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE
RESPONDENTS. PETITIONER PRESENTED WORK FOR CORONADO
BEACH RESORT WHICH IS [NEITHER] OWNED NOR CONNECTED
WITH ANY OF THE RESPONDENTS.
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN
IF THERE WAS ABSOLUTELY NO EVIDENCE AT ALL PRESENTED
THAT PETITIONER WAS DISMISSED BY THE RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2
MONTHS AFTER THE START OF THE ALLEGED EMPLOYMENT
AGREEMENT, AND HAS STILL NOT RETURNED TO THE PHILIPPINES
AS CONFIRMED BY THE BUREAU OF IMMIGRATION.
(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY
APPEARED BEFORE THE NLRC ADMINISTERING OFFICER AS
INDICATED IN THE COMPLAINT SHEET SINCE HE LEFT THE
COUNTRY 3 YEARS BEFORE THE COMPLAINT WAS FILED AND HE
NEVER CAME BACK.54
On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case
from the Third Division. It also issued a temporary restraining order (TRO) enjoining
the implementation of the LAs Decision dated September 30, 2004. This prompted
McBurnies filing of a Motion for Reconsideration,57 where he invoked the fact that
the Courts Decision dated September 18, 2009 had become final and executory,
with an entry of judgment already made by the Court.
Our Ruling
In light of pertinent law and jurisprudence, and upon taking a second hard look of
the parties arguments and the records of the case, the Court has ascertained that a
reconsideration of this Courts Decision dated September 18, 2009 and Resolutions
dated December 14, 2009 and January 25, 2012, along with the lifting of the entry of
judgment in G.R. No. 186984-85, is in order.
The Courts acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions for
reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of the Rules of
Court provides that "no second motion for reconsideration of a judgment or final
resolution by the same party shall be entertained." The rule rests on the basic tenet
of immutability of judgments. "At some point, a decision becomes final and
executory and, consequently, all litigations must come to an end." 58
The general rule, however, against second and subsequent motions for
reconsideration admits of settled exceptions. For one, the present Internal Rules of
the Supreme Court, particularly Section 3, Rule 15 thereof, provides:
Sec. 3. Second motion for reconsideration. The Court shall not entertain a second
motion for reconsideration, and any exception to this rule can only be granted in the
higher interest of justice by the Court en banc upon a vote of at least two-thirds of
its actual membership. There is reconsideration "in the higher interest of justice"
when the assailed decision is not only legally erroneous, but is likewise patently
unjust and potentially capable of causing unwarranted and irremediable injury or
damage to the parties. A second motion for reconsideration can only be entertained
before the ruling sought to be reconsidered becomes final by operation of law or by
the Courts declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second motions for
reconsideration "in the higher interest of substantial justice," as allowed under the
Internal Rules when the assailed decision is "legally erroneous," "patently unjust"
and "potentially capable of causing unwarranted and irremediable injury or damage
to the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET, Inc.), 59 we
also explained that a second motion for reconsideration may be allowed in instances
of "extraordinarily persuasive reasons and only after an express leave shall have
been obtained."60 In Apo Fruits Corporation v. Land Bank of the Philippines, 61 we
allowed a second motion for reconsideration as the issue involved therein was a
matter of public interest, as it pertained to the proper application of a basic
constitutionally-guaranteed right in the governments implementation of its agrarian
reform program. In San Miguel Corporation v. NLRC, 62 the Court set aside the
decisions of the LA and the NLRC that favored claimants-security guards upon the
Courts review of San Miguel Corporations second motion for reconsideration. In Vir-
Jen Shipping and Marine Services, Inc. v. NLRC, et al., 63 the Court en banc reversed
on a third motion for reconsideration the ruling of the Courts Division on therein
private respondents claim for wages and monetary benefits.
It is also recognized that in some instances, the prudent action towards a just
resolution of a case is for the Court to suspend rules of procedure, for "the power of
this Court to suspend its own rules or to except a particular case from its operations
whenever the purposes of justice require it, cannot be questioned." 64 In De Guzman
v. Sandiganbayan,65 the Court, thus, explained:
The rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must
always be avoided. Even the Rules of Court envision this liberality. This power to
suspend or even disregard the rules can be so pervasive and encompassing so as to
alter even that which this Court itself has already declared to be final, as we are now
compelled to do in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth guidelines in the
dispensation of justice but not to bind and chain the hand that dispenses it, for
otherwise, courts will be mere slaves to or robots of technical rules, shorn of judicial
discretion. That is precisely why courts in rendering real justice have always been,
as they in fact ought to be, conscientiously guided by the norm that when on the
balance, technicalities take a backseat against substantive rights, and not the other
way around. Truly then, technicalities, in the appropriate language of Justice
Makalintal, "should give way to the realities of the situation." x x x. 66 (Citations respondents motion for leave to submit their second motion for reconsideration
omitted) already warranted a resolution and discussion of the motion for reconsideration on
its merits. Instead of doing this, however, the Court issued on January 25, 2012 a
Resolution74 denying the motion to reconsider for lack of merit, merely citing that it
Consistent with the foregoing precepts, the Court has then reconsidered even
was a "prohibited pleading under Section 2, Rule 52 in relation to Section 4, Rule 56
decisions that have attained finality, finding it more appropriate to lift entries of
of the 1997 Rules of Civil Procedure, as amended." 75 In League of Cities of the
judgments already made in these cases. In Navarro v. Executive Secretary, 67 we
Philippines (LCP) v. Commission on Elections,76 we reiterated a ruling that when a
reiterated the pronouncement in De Guzman that the power to suspend or even
motion for leave to file and admit a second motion for reconsideration is granted by
disregard rules of procedure can be so pervasive and compelling as to alter even
the Court, the Court therefore allows the filing of the second motion for
that which this Court itself has already declared final. The Court then recalled in
reconsideration. In such a case, the second motion for reconsideration is no longer a
Navarro an entry of judgment after it had determined the validity and
prohibited pleading. Similarly in this case, there was then no reason for the Court to
constitutionality of Republic Act No. 9355, explaining that:
still consider the respondents second motion for reconsideration as a prohibited
pleading, and deny it plainly on such ground. The Court intends to remedy such error
Verily, the Court had, on several occasions, sanctioned the recall of entries of through this resolution.
judgment in light of attendant extraordinary circumstances. The power to suspend
or even disregard rules of procedure can be so pervasive and compelling as to alter
More importantly, the Court finds it appropriate to accept the pending motion for
even that which this Court itself had already declared final. In this case, the
reconsideration and resolve it on the merits in order to rectify its prior disposition of
compelling concern is not only to afford the movants-intervenors the right to be
the main issues in the petition. Upon review, the Court is constrained to rule
heard since they would be adversely affected by the judgment in this case despite
differently on the petitions. We have determined the grave error in affirming the
not being original parties thereto, but also to arrive at the correct interpretation of
NLRCs rulings, promoting results that are patently unjust for the respondents, as we
the provisions of the [Local Government Code (LGC)] with respect to the creation of
consider the facts of the case, pertinent law, jurisprudence, and the degree of the
local government units. x x x.68 (Citations omitted)
injury and damage to the respondents that will inevitably result from the
implementation of the Courts Decision dated September 18, 2009.
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a
miscarriage of justice. This justification was likewise applied in Tan Tiac Chiong v.
The rule on appeal bonds
Hon. Cosico,70 wherein the Court held that:

We emphasize that the crucial issue in this case concerns the sufficiency of the
The recall of entries of judgments, albeit rare, is not a novelty. In Muoz v. CA ,
appeal bond that was posted by the respondents. The present rule on the matter is
where the case was elevated to this Court and a first and second motion for
Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was substantially the
reconsideration had been denied with finality , the Court, in the interest of
same provision in effect at the time of the respondents appeal to the NLRC, and
substantial justice, recalled the Entry of Judgment as well as the letter of transmittal
which reads:
of the records to the Court of Appeals.71 (Citation omitted)

RULE VI
In Barnes v. Judge Padilla,72 we ruled:
APPEALS

A final and executory judgment can no longer be attacked by any of the parties or
be modified, directly or indirectly, even by the highest court of the land.
However, this Court has relaxed this rule in order to serve substantial justice
considering (a) matters of life, liberty, honor or property, (b) the existence of special
or compelling circumstances, (c) the merits of the case, (d) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the
rules, (e) a lack of any showing that the review sought is merely frivolous and
dilatory, and (f) the other party will not be unjustly prejudiced thereby. 73 (Citations
omitted)
As we shall explain, the instant case also qualifies as an exception to, first, the
proscription against second and subsequent motions for reconsideration, and
second, the rule on immutability of judgments; a reconsideration of the Decision
dated September 18, 2009, along with the Resolutions dated December 14, 2009
and January 25, 2012, is justified by the higher interest of substantial justice.
Sec. 6. BOND. In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond. The appeal bond shall either be in cash or
surety in an amount equivalent to the monetary award, exclusive of damages and
attorneys fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious grounds and
upon the posting of a bond in a reasonable amount in relation to the monetary
award.
The filing of the motion to reduce bond without compliance with the requisites in the
preceding paragraph shall not stop the running of the period to perfect an appeal.
(Emphasis supplied)

To begin with, the Court agrees with the respondents that the Courts prior resolve to
grant , and not just merely note, in a Resolution dated March 15, 2010 the
While the CA, in this case, allowed an appeal bond in the reduced amount
of P10,000,000.00 and then ordered the cases remand to the NLRC, this Courts
Decision dated September 18, 2009 provides otherwise, as it reads in part:
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the decision of the Labor Arbiter. The lawmakers
clearly intended to make the bond a mandatory requisite for the perfection of an
appeal by the employer as inferred from the provision that an appeal by the
employer may be perfected "only upon the posting of a cash or surety bond." The
word "only" makes it clear that the posting of a cash or surety bond by the employer
is the essential and exclusive means by which an employers appeal may be
perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction upon
the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final
and executory. This requirement is intended to assure the workers that if they
prevail in the case, they will receive the money judgment in their favor upon the
dismissal of the employers appeal. It is intended to discourage employers from
using an appeal to delay or evade their obligation to satisfy their employees just
and lawful claims.
xxxx
Thus, it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or surety bond
securing the full amount of the monetary award within the 10[-]day reglementary
period. Nothing in the Labor Code or the NLRC Rules of Procedure authorizes the
posting of a bond that is less than the monetary award in the judgment, or would
deem such insufficient posting as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject to the
conditions that (1) the motion to reduce the bond shall be based on meritorious
grounds; and (2) a reasonable amount in relation to the monetary award is posted
by the appellant, otherwise the filing of the motion to reduce bond shall not stop the
running of the period to perfect an appeal. The qualification effectively requires that
unless the NLRC grants the reduction of the cash bond within the 10-day
reglementary period, the employer is still expected to post the cash or surety bond
securing the full amount within the said 10-day period. If the NLRC does eventually
grant the motion for reduction after the reglementary period has elapsed, the
correct relief would be to reduce the cash or surety bond already posted by the
employer within the 10-day period.77 (Emphasis supplied; underscoring ours)
To begin with, the Court rectifies its prior pronouncement the unqualified
statement that even an appellant who seeks a reduction of an appeal bond before
the NLRC is expected to post a cash or surety bond securing the full amount of the
judgment award within the 10-day reglementary period to perfect the appeal.
The suspension of the period to
perfect the appeal upon the filing of
a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing of a
motion to reduce bond, coupled with compliance with the two conditions
emphasized in Garcia v. KJ Commercial78 for the grant of such motion, namely, (1) a
meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice
to suspend the running of the period to perfect an appeal from the labor arbiters
decision to the NLRC.79 To require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions which allow an
appellant to seek a reduction of the bond. Thus, we explained in Garcia:
The filing of a motion to reduce bond and compliance with the two conditions stop
the running of the period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce bond, and it may
rule on the motion beyond the 10-day period within which to perfect an appeal.
Obviously, at the time of the filing of the motion to reduce bond and posting of a
bond in a reasonable amount, there is no assurance whether the appellants motion
is indeed based on "meritorious ground" and whether the bond he or she posted is
of a "reasonable amount." Thus, the appellant always runs the risk of failing to
perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond, the
appellant must be allowed to wait for the ruling of the NLRC on the motion even
beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and
rules that there is indeed meritorious ground and that the amount of the bond
posted is reasonable, then the appeal is perfected. If the NLRC denies the motion,
the appellant may still file a motion for reconsideration as provided under Section
15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules
that there is indeed meritorious ground and that the amount of the bond posted is
reasonable, then the appeal is perfected. If the NLRC denies the motion, then the
decision of the labor arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall not stop the
running of the period to perfect an appeal is not absolute. The Court may relax the
rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held:
"Jurisprudence tells us that in labor cases, an appeal from a decision involving a
monetary award may be perfected only upon the posting of cash or surety bond. The
Court, however, has relaxed this requirement under certain exceptional
circumstances in order to resolve controversies on their merits. These circumstances
include: (1) fundamental consideration of substantial justice; (2) prevention of
miscarriage of justice or of unjust enrichment; and (3) special circumstances of the
case combined with its legal merits, and the amount and the issue
involved."80 (Citations omitted and emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce the bond,
without even considering the respondents arguments and totally unmindful of the
rules and jurisprudence that allow the bonds reduction. Instead of resolving the
motion to reduce the bond on its merits, the NLRC insisted on an amount that was
equivalent to the monetary award, merely explaining:
We are constrained to deny respondents motion for reduction. As held by the
Supreme Court in a recent case, in cases involving monetary award, an employer
seeking to appeal the Labor Arbiters decision to the Commission is unconditionally
required by Art. 223, Labor Code to post bond in the amount equivalent to the
monetary award (Calabash Garments vs. NLRC, G.R. No. 110827, August 8, 1996). x
x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to fully decide on
the motion. It refused to at least make a preliminary determination of the merits of
the appeal, as it held:
We are constrained to dismiss respondents Motion for Reconsideration.
Respondents contention that the appeal bond is excessive and based on a decision
which is a patent nullity involves the merits of the case. x x x 82
Prevailing rules and jurisprudence
allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents motion without
considering the respondents arguments, it effectively denied the respondents of
their opportunity to seek a reduction of the bond even when the same is allowed
under the rules and settled jurisprudence. It was equivalent to the NLRCs refusal to
exercise its discretion, as it refused to determine and rule on a showing of
meritorious grounds and the reasonableness of the bond tendered under the
circumstances.83 Time and again, the Court has cautioned the NLRC to give Article
223 of the Labor Code, particularly the provisions requiring bonds in appeals
involving monetary awards, a liberal interpretation in line with the desired objective
of resolving controversies on the merits.84 The NLRCs failure to take action on the
motion to reduce the bond in the manner prescribed by law and jurisprudence then
cannot be countenanced. Although an appeal by parties from decisions that are
adverse to their interests is neither a natural right nor a part of due process, it is an
essential part of our judicial system. Courts should proceed with caution so as not to
deprive a party of the right to appeal, but rather, ensure that every party has the
amplest opportunity for the proper and just disposition of their cause, free from the
constraints of technicalities.85 Considering the mandate of labor tribunals, the
principle equally applies to them.
Given the circumstances of the case, the Courts affirmance in the Decision dated
September 18, 2009 of the NLRCs strict application of the rule on appeal bonds then
demands a re-examination. Again, the emerging trend in our jurisprudence is to
afford every party-litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. 86 Section 2,
Rule I of the NLRC Rules of Procedure also provides the policy that "the Rules shall
be liberally construed to carry out the objectives of the Constitution, the Labor Code
of the Philippines and other relevant legislations, and to assist the parties in
obtaining just, expeditious and inexpensive resolution and settlement of labor
disputes."87
In accordance with the foregoing, although the general rule provides that an appeal
in labor cases from a decision involving a monetary award may be perfected only
upon the posting of a cash or surety bond, the Court has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on their
merits. These circumstances include: (1) the fundamental consideration of
substantial justice; (2) the prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal
merits, and the amount and the issue involved.88 Guidelines that are applicable in
the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
Corporation.89 The bond requirement in appeals involving monetary awards has been
and may be relaxed in meritorious cases, including instances in which (1) there was
substantial compliance with the Rules, (2) surrounding facts and circumstances
constitute meritorious grounds to reduce the bond, (3) a liberal interpretation of the
requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the reglementary
period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article 22392 of the
Labor Code, as amended by Republic Act No. 6715, which requires a cash or surety
bond in an amount equivalent to the monetary award in the judgment appealed
from may be considered a jurisdictional requirement for the perfection of an appeal,
nevertheless, adhering to the principle that substantial justice is better served by
allowing the appeal on the merits to be threshed out by the NLRC, the foregoing
requirement of the law should be given a liberal interpretation.
As the Court, nonetheless, remains firm on the importance of appeal bonds in
appeals from monetary awards of LAs, we stress that the NLRC, pursuant to Section
6, Rule VI of the NLRC Rules of Procedure, shall only accept motions to reduce bond
that are coupled with the posting of a bond in a reasonable amount. Time and again,
we have explained that the bond requirement imposed upon appellants in labor
cases is intended to ensure the satisfaction of awards that are made in favor of
appellees, in the event that their claims are eventually sustained by the courts. 93 On
the part of the appellants, its posting may also signify their good faith and
willingness to recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bonds filing, the question of what
constitutes "a reasonable amount of bond" that must accompany the motion may be
subject to differing interpretations of litigants. The judgment of the NLRC which has
the discretion under the law to determine such amount cannot as yet be invoked by
litigants until after their motions to reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his
opportunity to seek a reduction of the required bond and thus, to appeal, when the
NLRC eventually disagrees with the partys assessment. These have also resulted in
the filing of numerous petitions against the NLRC, citing an alleged grave abuse of
discretion on the part of the labor tribunal for its finding on the sufficiency or
insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the litigants
and the NLRCs guidance on the amount of bond that shall hereafter be filed with a
motion for a bonds reduction. To ensure that the provisions of Section 6, Rule VI of
the NLRC Rules of Procedure that give parties the chance to seek a reduction of the
appeal bond are effectively carried out, without however defeating the benefits of
the bond requirement in favor of a winning litigant, all motions to reduce bond that
are to be filed with the NLRC shall be accompanied by the posting of a cash or surety
bond equivalent to 10% of the monetary award that is subject of the appeal, which
shall provisionally be deemed the reasonable amount of the bond in the meantime
that an appellants motion is pending resolution by the Commission. In conformity
with the NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorneys fees. 94 Only after the
posting of a bond in the required percentage shall an appellants period to perfect petitioner was qualified by the conditions set forth in a letter dated May 11, 1999,
an appeal under the NLRC Rules be deemed suspended. which reads:

The foregoing shall not be misconstrued to unduly hinder the NLRCs exercise of its May 11, 1999
discretion, given that the percentage of bond that is set by this guideline shall be
merely provisional. The NLRC retains its authority and duty to resolve the motion
MR. ANDREW MCBURNIE
and determine the final amount of bond that shall be posted by the appellant, still in
accordance with the standards of "meritorious grounds" and "reasonable amount".
Should the NLRC, after considering the motions merit, determine that a greater Re: Employment Contract
amount or the full amount of the bond needs to be posted by the appellant, then the
party shall comply accordingly. The appellant shall be given a period of 10 days from
Dear Andrew,
notice of the NLRC order within which to perfect the appeal by posting the required
appeal bond.
It is understood that this Contract is made subject to the understanding that it is
effective only when the project financing for our Baguio Hotel project pushed
Meritorious ground as a condition
through.
for the reduction of the appeal bond

The agreement with EGI Managers, Inc. is made now to support your need to
In all cases, the reduction of the appeal bond shall be justified by meritorious
facilitate your work permit with the Department of Labor in view of the expiration of
grounds and accompanied by the posting of the required appeal bond in a
your contract with Pan Pacific.
reasonable amount.

Regards,
The requirement on the existence of a "meritorious ground" delves on the worth of
the parties arguments, taking into account their respective rights and the
circumstances that attend the case. The condition was emphasized in University Sgd. Eulalio Ganzon (p. 203, Records)103
Plans Incorporated v. Solano,95 wherein the Court held that while the NLRCs Revised
Rules of Procedure "allows the [NLRC] to reduce the amount of the bond, the
For the NLRC, the employment agreement could not have given rise to an employer-
exercise of the authority is not a matter of right on the part of the movant, but lies
employee relationship by reason of legal impossibility. The two conditions that form
within the sound discretion of the NLRC upon a showing of meritorious
part of their agreement, namely, the successful completion of the project financing
grounds."96 By jurisprudence, the merit referred to may pertain to an appellants lack
for the hotel project in Baguio City and McBurnies acquisition of an Alien
of financial capability to pay the full amount of the bond,97 the merits of the main
Employment Permit, remained unsatisfied.104 The NLRC concluded that McBurnie was
appeal such as when there is a valid claim that there was no illegal dismissal to
instead a potential investor in a project that included Ganzon, but the said project
justify the award,98 the absence of an employer-employee relationship,99 prescription
failed to pursue due to lack of funds. Any work performed by McBurnie in relation to
of claims,100 and other similarly valid issues that are raised in the appeal.101 For the
the project was merely preliminary to the business venture and part of his "due
purpose of determining a "meritorious ground", the NLRC is not precluded from
diligence" study before pursuing the project, "done at his own instance, not in
receiving evidence, or from making a preliminary determination of the merits of the
furtherance of the employment contract but for his own investment
appellants contentions.102
purposes."105 Lastly, the alleged employment of the petitioner would have been void
for being contrary to law, since it is undisputed that McBurnie did not have any work
In this case, the NLRC then should have considered the respondents arguments in permit. The NLRC declared:
the memorandum on appeal that was filed with the motion to reduce the requisite
appeal bond. Although a consideration of said arguments at that point would have
Absent an employment permit, any employment relationship that McBurnie
been merely preliminary and should not in any way bind the eventual outcome of
contemplated with the respondents was void for being contrary to law. A void or
the appeal, it was apparent that the respondents defenses came with an indication
inexistent contract, in turn, has no force and effect from the beginning as if it had
of merit that deserved a full review of the decision of the LA. The CA, by its
never been entered into. Thus, without an Alien Employment Permit, the
Resolution dated February 16, 2007, even found justified the issuance of a
"Employment Agreement" is void and could not be the source of a right or
preliminary injunction to enjoin the immediate execution of the LAs decision, and
obligation. In support thereof, the DOLE issued a certification that McBurnie has
this Court, a temporary restraining order on September 4, 2012.
neither applied nor been issued an Alien Employment Permit (p. 204, Records). 106

Significantly, following the CAs remand of the case to the NLRC, the latter even
McBurnie moved to reconsider, citing the Courts Decision of September 18, 2009
rendered a Decision that contained findings that are inconsistent with McBurnies
that reversed and set aside the CAs Decision authorizing the remand. Although the
claims. The NLRC reversed and set aside the decision of the LA, and entered a new
NLRC granted the motion on the said ground via a Decision 107 that set aside the
one dismissing McBurnies complaint. It explained that McBurnie was not an
NLRCs Decision dated November 17, 2009, the findings of the NLRC in the
employee of the respondents; thus, they could not have dismissed him from
November 17, 2009 decision merit consideration, especially since the findings made
employment. The purported employment contract of the respondents with the
therein are supported by the case records.
In addition to the apparent merit of the respondents appeal, the Court finds the
reduction of the appeal bond justified by the substantial amount of the LAs
monetary award. Given its considerable amount, we find reason in the respondents
claim that to require an appeal bond in such amount could only deprive them of the
right to appeal, even force them out of business and affect the livelihood of their
employees.108 In Rosewood Processing, Inc. v. NLRC,109 we emphasized: "Where a
decision may be made to rest on informed judgment rather than rigid rules, the
equities of the case must be accorded their due weight because labor
determinations should not be secundum rationem but also secundum caritatem." 110
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees
Association, President Rodolfo Jimenez, and members, Reynaldo Fajardo, et al. vs.
NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO I) and Patricio de la Pea (GR
No. 116066, January 24, 2000), the Supreme Court recognized that: "the NLRC, in its
Resolution No. 11-01-91 dated November 7, 1991 deleted the phrase "exclusive of
moral and exemplary damages as well as attorneys fees in the determination of the
amount of bond, and provided a safeguard against the imposition of excessive
bonds by providing that "(T)he Commission may in meritorious cases and upon
motion of the appellant, reduce the amount of the bond."

What constitutes a reasonable In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
amount in the determination of the
final amount of appeal bond
"The unreasonable and excessive amount of bond would be oppressive and unjust
and would have the effect of depriving a party of his right to appeal."
As regards the requirement on the posting of a bond in a "reasonable amount," the
Court holds that the final determination thereof by the NLRC shall be based primarily
xxxx
on the merits of the motion and the main appeal.

In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof,
its discretion. It should have fixed an appeal bond in a reasonable amount. Said
provides that the bond to be posted shall be "in a reasonable amount in relation to
dismissal deprived petitioners of their right to appeal the Labor Arbiters decision.
the monetary award ," the merit of the motion shall always take precedence in the
determination. Settled is the rule that procedural rules were conceived, and should
thus be applied in a manner that would only aid the attainment of justice. If a xxxx
stringent application of the rules would hinder rather than serve the demands of
substantial justice, the former must yield to the latter. 111
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI,
NLRC Rules of Procedure). This Court finds the appeal bond in the amount
Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon an appeal of P54,083,910.00 prohibitive and excessive, which constitutes a meritorious ground
from the LAs award ofP51,956,314.00, the Court, instead of ruling right away on the to allow a motion for reduction thereof.115
reasonableness of the bonds amount solely on the basis of the judgment award,
found it appropriate to remand the case to the NLRC, which should first determine
The foregoing declaration of the Court requiring a bond in a reasonable amount,
the merits of the motion. In University Plans, 112 the Court also reversed the outright
taking into account the merits of the motion and the appeal, is consistent with the
dismissal of an appeal where the bond posted in a judgment award of more
oft-repeated principle that letter-perfect rules must yield to the broader interest of
than P30,000,000.00 was P30,000.00. The Court then directed the NLRC to first
substantial justice.116
determine the merit, or lack of merit, of the motion to reduce the bond, after the
appellant therein claimed that it was under receivership and thus, could not dispose
of its assets within a short notice. Clearly, the rule on the posting of an appeal bond The effect of a denial of the appeal
should not be allowed to defeat the substantive rights of the parties. 113
to the NLRC
Notably, in the present case, following the CAs rendition of its Decision which
allowed a reduced appeal bond, the respondents have posted a bond in the amount
In finding merit in the respondents motion for reconsideration, we also take into
of P10,000,000.00. In Rosewood, the Court deemed the posting of a surety bond
account the unwarranted results that will arise from an implementation of the
of P50,000.00, coupled with a motion to reduce the appeal bond, as substantial
Courts Decision dated September 18, 2009. We emphasize, moreover, that
compliance with the legal requirements for an appeal from a P789,154.39 monetary
although a remand and an order upon the NLRC to give due course to the appeal
award "considering the clear merits which appear, res ipsa loquitor, in the appeal
would have been the usual course after a finding that the conditions for the
from the LAs Decision, and the petitioners substantial compliance with rules
reduction of an appeal bond were duly satisfied by the respondents, given such
governing appeals."114 The foregoing jurisprudence strongly indicate that in
results, the Court finds it necessary to modify the CAs order of remand, and instead
determining the reasonable amount of appeal bonds, the Court primarily considers
rule on the dismissal of the complaint against the respondents.
the merits of the motions and appeals.

Without the reversal of the Courts Decision and the dismissal of the complaint
Given the circumstances in this case and the merits of the respondents arguments
against the respondents, McBurnie would be allowed to claim benefits under our
before the NLRC, the Court holds that the respondents had posted a bond in a
labor laws despite his failure to comply with a settled requirement for foreign
"reasonable amount", and had thus complied with the requirements for the
nationals.
perfection of an appeal from the LAs decision. The CA was correct in ruling that:
Considering that McBurnie, an Australian, alleged illegal dismissal and sought to
claim under our labor laws, it was necessary for him to establish, first and foremost,
that he was qualified and duly authorized to obtain employment within our
jurisdiction. A requirement for foreigners who intend to work within the country is an
employment permit, as provided under Article 40, Title II of the Labor Code which
reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to
the Philippines for employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor.
In WPP Marketing Communications, Inc. v. Galera, 117 we held that a foreign nationals
failure to seek an employment permit prior to employment poses a serious problem
in seeking relief from the Court.118 Thus, although the respondent therein appeared
to have been illegally dismissed from employment, we explained:
This is Galeras dilemma: Galera worked in the Philippines without proper work
permit but now wants to claim employees benefits under Philippine labor laws.
xxxx
The law and the rules are consistent in stating that the employment permit must be
acquired prior to employment. The Labor Code states: "Any alien seeking admission
to the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor." Section 4, Rule XIV, Book I of
the Implementing Rules and Regulations provides:
"Employment permit required for entry. No alien seeking employment, whether as
a resident or non-resident, may enter the Philippines without first securing an
employment permit from the Ministry. If an alien enters the country under a non-
working visa and wishes to be employed thereafter, he may be allowed to be
employed upon presentation of a duly approved employment permit."
Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to
sanction the violation of the Philippine labor laws requiring aliens to secure work
permits before their employment. We hold that the status quo must prevail in the
present case and we leave the parties where they are. This ruling, however, does
not bar Galera from seeking relief from other jurisdictions.119 (Citations omitted and
underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an employment
permit, by itself, necessitates the dismissal of his labor complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its Decision
dated November 17, 2009 on the issue of illegal dismissal. It declared that McBurnie
was never an employee of any of the respondents. 120 It explained:
All these facts and circumstances prove that McBurnie was never an employee of
Eulalio Ganzon or the respondent companies, but a potential investor in a project
with a group including Eulalio Ganzon and Martinez but said project did not take off
because of lack of funds.
McBurnie further claims that in conformity with the provision of the employment
contract pertaining to the obligation of the respondents to provide housing,
respondents assigned him Condo Unit # 812 of the Makati Cinema Square
Condominium owned by the respondents. He was also allowed to use a Hyundai car.
If it were true that the contract of employment was for working visa purposes only,
why did the respondents perform their obligations to him?
There is no question that respondents assigned him Condo Unit # 812 of the MCS,
but this was not free of charge. If it were true that it is part of the compensation
package as employee, then McBurnie would not be obligated to pay anything, but
clearly, he admitted in his letter that he had to pay all the expenses incurred in the
apartment.
Assuming for the sake of argument that the employment contract is valid between
them, record shows that McBurnie worked from September 1, 1999 until he met an
accident on the last week of October. During the period of employment, the
respondents must have paid his salaries in the sum of US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the respondents] paid
his salaries like payslip, check or cash vouchers duly signed by him or any document
showing proof of receipt of his compensation from the respondents or activity in
furtherance of the employment contract. Granting again that there was a valid
contract of employment, it is undisputed that on November 1, 1999, McBurnie left
for Australia and never came back. x x x.121 (Emphasis supplied)
Although the NLRCs Decision dated November 17, 2009 was set aside in a Decision
dated January 14, 2010, the Courts resolve to now reconsider its Decision dated
September 18, 2009 and to affirm the CAs Decision and Resolution in the
respondents favor effectively restores the NLRCs basis for rendering the Decision
dated November 17, 2009.
More importantly, the NLRCs findings on the contractual relations between McBurnie
and the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established.122 Although an employment agreement forms
part of the case records, respondent Ganzon signed it with the notation "per my
note."123 The respondents have sufficiently explained that the note refers to the
letter124 dated May 11, 1999 which embodied certain conditions for the
employments effectivity. As we have previously explained, however, the said
conditions, particularly on the successful completion of the project financing for the
hotel project in Baguio City and McBurnies acquisition of an Alien Employment
Permit, failed to materialize. Such defense of the respondents, which was duly
considered by the NLRC in its Decision dated November 17, 2009, was not
sufficiently rebutted by McBurnie.
Second, McBurnie failed to present any employment permit which would have
authorized him to obtain employment in the Philippines. This circumstance negates
McBurnies claim that he had been performing work for the respondents by virtue of
an employer-employee relationship. The absence of the employment permit instead
bolsters the claim that the supposed employment of McBurnie was merely All these considered, the Court also affirms its Resolution dated September 4, 2012;
simulated, or did not ensue due to the non-fulfillment of the conditions that were set accordingly, McBurnies motion for reconsideration thereof is denied.
forth in the letter of May 11, 1999.
WHEREFORE, in light of the foregoing, the Court rules as follows:
Third, besides the employment agreement, McBurnie failed to present other
competent evidence to prove his claim of an employer-employee relationship. Given
(a) The motion for reconsideration filed on September 26, 2012 by
the parties conflicting claims on their true intention in executing the agreement, it
petitioner Andrew James McBurnie is DENIED;
was necessary to resort to the established criteria for the determination of an
employer-employee relationship, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power (b) The motion for reconsideration filed on March 27, 2012 by respondents
to control the employees conduct.125 The rule of thumb remains: the onus probandi Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is GRANTED.
falls on the claimant to establish or substantiate the claim by the requisite quantum
of evidence. Whoever claims entitlement to the benefits provided by law should
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This
establish his or her right thereto.126McBurnie failed in this regard.1wphi1 As
Courts Decision dated September 18, 2009 and Resolutions dated
previously observed by the NLRC, McBurnie even failed to show through any
December 14, 2009 and January 25, 2012 are SET ASIDE. The Court of
document such as payslips or vouchers that his salaries during the time that he
Appeals Decision dated October 27, 2008 and Resolution dated March 3,
allegedly worked for the respondents were paid by the company. In the absence of
2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED
an employer-employee relationship between McBurnie and the respondents,
WITH MODIFICATION. In lieu of a remand of the case to the National Labor
McBurnie could not successfully claim that he was dismissed, much less illegally
Relations Commission, the complaint for illegal dismissal filed by petitioner
dismissed, by the latter. Even granting that there was such an employer-employee
Andrew James McBurnie against respondents Eulalio Ganzon, EGI-
relationship, the records are barren of any document showing that its termination
Managers, Inc. and E. Ganzon, Inc. is DISMISSED.
was by the respondents dismissal of McBurnie.

Furthermore, on the matter of the filing and acceptance of motions to reduce appeal
Given these circumstances, it would be a circuitous exercise for the Court to remand
bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the
the case to the NLRC, more so in the absence of any showing that the NLRC should
Court hereby RESOLVES that henceforth, the following guidelines shall be observed:
now rule differently on the cases merits. In Medline Management, Inc. v.
Roslinda,127 the Court ruled that when there is enough basis on which the Court may
render a proper evaluation of the merits of the case, the Court may dispense with (a) The filing o a motion to reduce appeal bond shall be entertained by the
the time-consuming procedure of remanding a case to a labor tribunal in order "to NLRC subject to the following conditions: (1) there is meritorious ground;
prevent delays in the disposition of the case," "to serve the ends of justice" and and (2) a bond in a reasonable amount is posted;
when a remand "would serve no purpose save to further delay its disposition
contrary to the spirit of fair play."128 In Real v. Sangu Philippines, Inc.,129 we again
(b) For purposes o compliance with condition no. (2), a motion shall be
ruled:
accompanied by the posting o a provisional cash or surety bond equivalent
to ten percent (10,) of the monetary award subject o the appeal, exclusive
With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC o damages and attorney's fees;
which dismissed petitioners complaint for lack of jurisdiction. In cases such as this,
the Court normally remands the case to the NLRC and directs it to properly dispose
(c) Compliance with the foregoing conditions shall suffice to suspend the
of the case on the merits. "However, when there is enough basis on which a proper
running o the 1 0-day reglementary period to perfect an appeal from the
evaluation of the merits of petitioners case may be had, the Court may dispense
labor arbiter's decision to the NLRC;
with the time-consuming procedure of remand in order to prevent further delays in
the disposition of the case." "It is already an accepted rule of procedure for us to
strive to settle the entire controversy in a single proceeding, leaving no root or (d) The NLRC retains its authority and duty to resolve the motion to reduce
branch to bear the seeds of litigation. If, based on the records, the pleadings, and bond and determine the final amount o bond that shall be posted by the
other evidence, the dispute can be resolved by us, we will do so to serve the ends of appellant, still in accordance with the standards o meritorious grounds and
justice instead of remanding the case to the lower court for further proceedings." x x reasonable amount; and
x.130 (Citations omitted)
(e) In the event that the NLRC denies the motion to reduce bond, or
It bears mentioning that although the Court resolves to grant the respondents requires a bond that exceeds the amount o the provisional bond, the
motion for reconsideration, the other grounds raised in the motion, especially as appellant shall be given a fresh period o ten 1 0) days from notice o the
they pertain to insinuations on irregularities in the Court, deserve no merit for being NLRC order within which to perfect the appeal by posting the required
founded on baseless conclusions. Furthermore, the Court finds it unnecessary to appeal bond.
discuss the other grounds that are raised in the motion, considering the grounds
that already justify the dismissal of McBurnies complaint.
SO ORDERED.
 1 August 2005 of the Court of Appeals (appellate court) in CA-G.R. SP No.

78721. The appellate court granted and gave due course to the petition filed by

Jocelyn M. Galera (Galera). The appellate courts decision reversed and set aside that

of the National Labor Relations Commission (NLRC), and directed WPP Marketing

Communications, Inc. (WPP) to payGalera backwages, separation pay, unpaid

housing benefit, unpaid personal and accident insurance benefits, cash value under
WPP MARKETING COMMUNICATIONS, INC., G.R. No. 169207
JOHN STEEDMAN,
the companys pension plan, 30 days paid holiday benefit, moral damages,
MARK WEBSTER, and
NOMINADA LANSANG, exemplary damages, 10% of the total judgment award as attorneys fees, and costs
Petitioners,
of the suit.
- versus -

JOCELYN M. GALERA, The Facts

Respondent.
x-------------------x
JOCELYN M. GALERA,
Petitioner, The appellate court narrated the facts as follows:
G.R. No. 169239 Petitioner is Jocelyn Galera (GALERA), a [sic] American citizen who
- versus - was recruited from the United States of America by private
Present: respondent John Steedman, Chairman-WPP Worldwide and Chief
Executive Officer of Mindshare, Co., a corporation based in Hong
CARPIO, Acting C.J., Kong, China, to work in the Philippines for private respondent WPP
WPP MARKETING COMMUNICATIONS, INC., Chairperson, Marketing Communications, Inc. (WPP), a corporation registered
JOHN STEEDMAN, BRION, and operating under the laws of Philippines. GALERA accepted the
MARK WEBSTER, and NOMINADA DEL CASTILLO, offer and she signed an Employment Contract entitled
LANSANG, ABAD, and Confirmation of Appointment and Statement of Terms and
Respondents. PEREZ, JJ. Conditions (Annex B to Petition for Certiorari). The relevant
portions of the contract entered into between the parties are as
Promulgated: follows:

March 25, 2010 Particulars:

x--------------------------------------------------x Name: Jocelyn M. Galera
Address: 163 Mediterranean Avenue
Hayward, CA 94544

Position: Managing Director

Mindshare Philippines
DECISION Annual Salary: Peso 3,924,000
Start Date: 1 September 1999
Commencement Date: 1 September 1999
(for continuous service)
CARPIO, Acting C.J.:
Office: Mindshare Manila

6. Housing Allowance
The Case The Company will provide suitable housing in
Manila at a maximum cost (including
G.R. Nos. 169207 and 169239 are petitions for review [1] assailing the management fee and other associated costs) of
Peso 576,000 per annum.
[2] [3]
Decision promulgated on 14 April 2005 as well as the Resolution promulgated on
7. Other benefits.
The Company will provide you with a fully
maintained company car and a driver.
The Company will continue to provide medical,
health, life and personal accident insurance
plans, to an amount not exceeding Peso 300,000
per annum, in accordance with the terms of the
respective plans, as provided by JWT Manila.
The Company will reimburse you and your
spouse one way business class air tickets from
USA to Manila and the related shipping and
relocation cost not exceeding US$5,000
supported by proper documentation. If you leave
the Company within one year, you will reimburse
the Company in full for all costs of the initial
relocation as described therein.
You will participate in the JWT Pension Plan under
the terms of this plan, the Company reserves the
right to transfer this benefit to a Mindshare
Pension Plan in the future, if so required.
8. Holidays
You are entitled to 20 days paid holiday in
addition to public holidays per calendar year to
be taken at times agreed with the
Company. Carry-over of unused accrued holiday
entitlement into a new holiday year will not
normally be allowed. No payment will be made
for holidays not taken. On termination of your
employment, unless you have been summarily
dismissed, you will be entitled to receive
payment for unused accrued holiday pay. Any
holiday taken in excess of your entitlement shall
be deducted from your final salary payment.
9. Leave Due to Sickness or Injury
The maximum provision for sick leave is 15
working days per calendar year.
12. Invention/Know-How
Any discovery, invention, improvement in
procedure, trademark, trade name, designs,
copyrights or get-ups made, discovered or
created by you during the continuance of your
employment hereunder relating to the business
of the Company shall belong to and shall be the
absolute property of the Company. If required to
do so by the Company (whether during or after
the termination of your employment) you shall
at the expense of the company execute all
instruments and do all things necessary to vest
in ownership for all other rights, title and
interests (including any registered rights therein)
in such discovery, invention, improvement in
procedure, trademark, trade name, design,
copyright or get-up in the Company (or its
Nominee) absolutely and as sole beneficial
owner.
14. Notice.
The first three months of your employment will
be a trial period during which either you or the
Company may terminate your employment on
one weeks notice. If at the end of that period,
the Company is satisfied with your performance,
you will become a permanent employee.
Thereafter you will give Company and the
Company will give you three months notice of
termination of employment. The above is always
subject to the following: (1) the Companys right
to terminate the contract of employment on no
or short notice where you are in breach of
contract; (2) your employment will at any event
cease without notice on your retirement date
when you are 60 years of age.
SIGNED JOCELYN M. GALERA 8-16-99
Date of Borth [sic] 12-25-55
Employment of GALERA with private respondent WPP became
effective on September 1, 1999 solely on the instruction of the
CEO and upon signing of the contract, without any further action
from the Board of Directors of private respondent WPP.
Four months had passed when private respondent WPP filed before
the Bureau of Immigration an application for petitioner GALERA to
receive a working visa, wherein she was designated as Vice
President of WPP. Petitioner alleged that she was constrained to
sign the application in order that she could remain in the
Philippines and retain her employment.
Then, on December 14, 2000, petitioner GALERA alleged she
was verbally notified by private respondent STEEDMAN that her
services had been terminated from private respondent WPP. A
termination letter followed the next day.[4]
On 3 January 2001, Galera filed a complaint for illegal dismissal, holiday
pay, service incentive leave pay, 13 th month pay, incentive plan, actual and moral
damages, and attorneys fees against WPP and/or John Steedman (Steedman), Mark
Webster (Webster) and Nominada Lansang (Lansang). The case was docketed as
NLRC NCR Case No. 30-01-00044-01.
The Labor Arbiters Ruling
 who clearly have conspired in bad faith to deprive [Galera] of her
In his Decision dated 31 January 2002, Labor right to substantive and procedural due process.[5]

Arbiter Edgardo M. Madriaga (Arbiter Madriaga) held WPP, Steedman, Webster,

and Lansang liable for illegal dismissal and damages. Arbiter Madriaga stated The dispositive portion of Arbiter Madriagas decision reads as follows:

that Galera was not only illegally dismissed but was also not accorded due
WHEREFORE, premises considered, we hereby hold herein
process. Arbiter Madriaga explained, thus: respondents liable for illegal dismissal and damages, and award
to [Galera], by virtue of her expatriate status, the following:
[WPP] failed to observe the two-notice rule. [WPP] through
respondent Steedman for a five (5) minute meeting on December a. Reinstatement without loss of seniority
14, 2000 where she was verbally told that as of that day, her rights.
employment was being terminated. [WPP] did not give [Galera] an
opportunity to defend herself and explain her side. [Galera] was b. Backwages amounting to $120,000 per
even prohibited from reporting for work that day and was told not year at P50.00 to US $1 exchange rate, 13 th month pay,
to report for work the next day as it would be awkward for her and transportation and housing benefits.
respondent Steedman to be in the same premises after her
termination. [WPP] only served [Galera] her written notice of c. Remuneration for business acquisitions
termination only on 15 December 2001, one day after she was amounting to Two Million Eight Hundred Fifty Thousand
verbally apprised thereof. Pesos (P2,850,000.00) and Media Plowback Incentive
equivalent to Three Million Pesos (P3,000,000.00) or a
The law mandates that the dismissal must be properly total of not less than One Hundred Thousand US Dollars
done otherwise, the termination is gravely defective and may be ($100,000.00).
declared unlawful as we hereby hold [Galeras] dismissal to be
illegal and unlawful. Where there is no showing of a clear, valid d. US Tax Protection of up to 35% coverage
and legal cause for the termination of employment, the law equivalent to Thirty Eight Thousand US Dollars ($38,000).
considers the matter a case of illegal dismissal and the burden is
on the employer to prove that the termination was for a valid or e. Moral damages including implied
authorized cause. The law mandates that both the substantive and defamation and punitive damages equivalent to Two
procedural aspects of due process should be observed. The facts Million Dollars (US$2,000,000.00).
clearly show that respondents were remiss on both
aspects. Perforce, the dismissal is void and unlawful. f. Exemplary damages equivalent to One
Million Dollars ($1,000,000.00).
xxxx
Considering the work performance and achievements of [Galera]
for the year 2000, we do not find any basis for the alleged claim of g. Attorneys fees of 10% of the total award
incompetence by herein respondents. Had [Galera] been really herein.
incompetent, she would not have been able to generate enormous
amounts [sic] of revenues and business for [WPP]. She also SO ORDERED.[6]
appears to be well liked as a leader by her subordinates, who have
come forth in support of [Galera]. These facts remain undisputed
by respondents.
The Ruling of the NLRC
A mans job being a property right duly protected by our laws, an
employer who deprives an employee [of] the right to defend
himself is liable for damages consistent with Article 32 of the Civil
Code. To allow an employer to terminate the employment of his The First Division of the NLRC reversed the ruling of Arbiter Madriaga. In its
worker based merely on allegations without proof places the
[employee] in an uncertain situation. The unflinching rule in illegal Decision[7] promulgated on 19 February 2003, the NLRC stressed
dismissal cases is that the employer bears the burden of proof.
that Galera was WPPsVice-President, and therefore, a corporate officer at the time
In the instant case, respondents have not been able to muster
evidence to counter [Galeras] allegations. [Galeras] allegations she was removed by the Board of Directors on 14 December 2000. The NLRC stated
remain and stand absent proof from respondents rebutting
them.Hence, our finding of illegal dismissal against respondents thus:
It matters not that her having been elected by the Board to an
added position of being a member of the Board of Directors did not
take effect as her May 31, 2000 election to such added position
was conditioned to be effective upon approval by SEC of the
Amended By-Laws, an approval which took place only in February
21, 2001, i.e., after her removal on December 14, 2000. What
counts is, at the time of her removal, she continued to
be WPPs Vice-President, a corporate officer, on hold over capacity.
Ms. Galeras claim that she was not a corporate officer at the time
of her removal because her May 31, 2000 election as Vice
President for Media, under WPPs Amended By-Laws, was subject to
the approval by the Securities and Exchange Commission and that
the SEC approved the Amended By-Laws only in February
2001. Such claim is unavailing. Even if Ms. Galerassubsequent
election as Vice President for Media on May 31, 2000 was subject
to approval by the SEC, she continued to hold her previous
position as Vice President under the December 31, 1999 election
until such time that her successor is duly elected and qualified. It
is a basic principle in corporation law, which principle is also
embodied in WPPs by-laws, that a corporate officer continues to
hold his position as such until his successor has been duly elected
and qualified. When Ms. Galera was elected as Vice President on
December 31, 1999, she was supposed to have held that position
until her successor has been duly elected and qualified. The record
shows that Ms. Galera was not replaced by anyone. She continued
to be Vice President of WPP with the same operational title of
Managing Director for Mindshare and continued to perform the
same functions she was performing prior to her May 31, 2000
election.
In the recent case of Dily Dany Nacpil v. International Broadcasting
Corp., the definition of corporate officer for purposes of intra-
corporate controversy was even broadened to include a
Comptroller/Assistant Manager who was appointed by the General
Manager, and whose appointment was later approved by the
Board of Directors. In this case, the position of comptroller was not
even expressly mentioned in the By-Laws of the corporation, and
yet, the Supreme Court found him to be a corporate officer. The
Court ruled that
(since) petitioners appointment as comptroller
required the approval and formal action of IBCs
Board of Directors to become valid, it is clear
therefore that petitioner is a corporate officer
whose dismissal may be the subject of a
controversy cognizable by the SEC... Had the
petitioner been an ordinary employee, such
board action would not have been required.
Such being the case, the imperatives of law require that we hold
that the Arbiter below had no jurisdiction over Galeras case as,
again, she was a corporate officer at the time of her removal.
WHEREFORE, the appeals of petitioner from the Decision of Labor
Arbiter Edgardo Madriaga dated January 31, 2002 and his Order
dated March 21, 2002, respectively, are granted. The January 31,
2002 decision of the Labor Arbiter is set aside for being null and
void and the temporary restraining order we issued on April 24,
2002 is hereby made permanent. The complaint of
Jocelyn Galera is dismissed for lack of jurisdiction.
SO ORDERED.[8]
In its Resolution[9] promulgated on 4 June 2003, the NLRC further stated:
We are fully convinced that this is indeed an intra-corporate
dispute which is beyond the labor arbiters jurisdiction. These
consolidated cases clearly [involve] the relationship between a
corporation and its officer and is properly within the definition of
an intra-corporate relationship which, under P.D. No. 902-A, is
within the jurisdiction of the SEC (now the commercial courts).
Such being the case, We are constrained to rule that the Labor
Arbiter below had no jurisdiction over Ms. Galeras complaint for
illegal dismissal.
WHEREFORE, the motion for reconsideration filed by Ms. Galera is
hereby denied for lack of merit. We reiterate our February 19,
2003 Decision setting aside the Labor Arbiters Decision dated
January 31, 2002 for being null and void.
SO ORDERED.[10]
Galera assailed the NLRCs decision and resolution before the appellate court and
raised a lone assignment of error.
The National Labor Relations Commission acted with grave abuse
of discretion amounting to lack or excess of jurisdiction when
it reversed the decision of the Labor Arbiter not on the merits
but for alleged lack of jurisdiction.[11]
The Decision of the Appellate Court
The appellate court reversed and set aside the decision of the NLRC. The appellate
court ruled that the NLRCs dismissal of Galeras appeal is not in accord with
jurisprudence. A person could be considered a corporate officer only if appointed as
such by a corporations Board of Directors, or if pursuant to the power given them by
either the Articles of Incorporation or the By-Laws.[12]
 coverage which she had been enjoying as an
The appellate court explained: expatriate;

A corporation, through its board of directors, could only act in the 2. Pay x x x GALERA the peso equivalent of
manner and within the formalities, if any, prescribed by its charter US$185,000.00 separation pay (1 years);
or by the general law. If the action of the Board is ultravires such
is motu proprio void ab initio and without legal effect 3. Pay x x x GALERA any unpaid housing benefit for the
whatsoever. The by-laws of a corporation are its own private laws 18 months of her employment in the service to the
which substantially have the same effect as the laws of the Company as an expatriate in Manila, Philippines at
corporation. They are, in effect, written into the charter. In this the rate of P576,000 per year; unpaid personal and
sense, they beome part of the fundamental law of the corporation accident insurance benefits for premiums at the rate
with which the corporation and its directors and officers must of P300,000.00 per year; whatever cash value in the
comply. JWT Pension Plan; and thirty days paid holiday benefit
under the contract for the 1 calendar years with the
Even if petitioner GALERA had been appointed by the Board of Company;
Directors on December 31, 1999, private respondent WPPs By-
Laws provided for only one Vice-President, a position already 4. Pay x x x GALERA the reduced amount of
occupied by private respondent Webster. The same defect also PhP2,000,000.00 as moral damages;
stains the Board of Directors appointment of petitioner GALERA as
a Director of the corporation, because at that time the By-Laws 5. Pay [Galera] the reduced amount of
provided for only five directors. In addition, the By-laws only PhP1,000,000.00 as exemplary damages;
empowered the Board of Directors to appoint a general manager
and/or assistant general manager as corporate officers in addition 6. Pay [Galera] an amount equivalent to 10% of the
to a chairman, president, vice-president and treasurer. There is no judgment award as attorneys fees;
mention of a corporate officer entitled Managing Director.
7. Pay the cost of the suit.
Hence, when the Board of Directors enacted the Resolutions of
December 31, 1999 and May 31, 2000, it exceeded its authority SO ORDERED.[14]
under the By-Laws and are, therefore, ultra vires. Although private
respondent WPP sought to amend these defects by filing Amended
By-Laws with the Securities and Exchange Commission, they did
not validate the ultra vires resolutions because the Amended By- Respondents filed a motion for reconsideration on 5 May 2005. Galera filed a motion
Laws did not take effect until February 16, 2001, when it was
approved by the SEC. Since by-laws operate only prospectively, for partial reconsideration and/or clarification on the same date. The appellate court
they could not validate the ultra vires resolutions.[13]
found no reason to revise or reverse its previous decision and subsequently denied

the motions in a Resolution promulgated on 1 August 2005. [15]

The dispositive portion of the appellate courts decision reads: The Issues

WHEREFORE, the petition is hereby GRANTED and GIVEN DUE

COURSE. The assailed Decision of the National Labor Relations
Commission is hereby REVERSED and SET ASIDE and a new one is WPP, Steedman, Webster, and Lansang raised the following grounds in G.R.
entered DIRECTING private respondent WPP MARKETING
COMMUNICATIONS, INC. to: No. 169207:

1. Pay [Galera] backwages at the peso equivalent of

US$120,000.00 per annum plus three months from
her summary December 14, 2000 dismissal up to
March 14, 2001 because three months notice is
required under the contract, plus 13th month pay,
bonuses and general increases to which she would
have been normally entitled, had she not been
dismissed and had she not been forced to stop
working, including US tax protection of up to 35%
I. The Court of Appeals seriously erred in ruling that the NLRC
has jurisdiction over [Galeras] complaint because she was not
an employee. [Galera] was a corporate officer of WPP from the
beginning of her term until her removal from office.
II. Assuming arguendo that the Court of Appeals correctly ruled
that the NLRC has jurisdiction over [Galeras] complaint, it
should have remanded the case to the Labor Arbiter for
reception of evidence on the merits of the case.
 III. [Galera] is an alien, hence, can never attain a regular or
permanent working status in the Philippines.
IV. [Galera] is not entitled to recover backwages, other benefits
and damages from WPP.[16]
employment permit prior to her employment poses a serious problem in seeking
relief before this Court. Hence, we settle the various issues raised by the parties for
the guidance of the bench and bar.
Whether Galera is an Employee or a Corporate Officer

Galera, on the belief that she is an employee, filed her complaint before the Labor
On the other hand, in G.R. No. 169239, Galera raised the following grounds
Arbiter. On the other hand, WPP, Steedman, Webster and Lansang contend
in support of her petition:
that Galera is a corporate officer; hence, any controversy regarding her dismissal is
The CA decision should be consistent with Article 279 of the Labor
Code and applicable jurisprudence, that full backwages and under the jurisdiction of the Regional Trial Court. We agree with Galera.
separation pay (when in lieu of reinstatement), should be reckoned
from time of dismissal up to time of reinstatement (or payment of
separation pay, in case separation instead of reinstatement is
Corporate officers are given such character either by the Corporation Code or by the
awarded).
corporations by-laws. Under Section 25 of the Corporation Code, the corporate
Accordingly, petitioner Galera should be awarded
full backwages and separation pay for the period from 14 officers are the president, secretary, treasurer and such other officers as may be
December 2000 until the finality of judgment by the respondents,
or, at the very least, up to the promulgation date of the CA provided in the by-laws.[19] Other officers are sometimes created by the charter or
decision.
by-laws of a corporation,or the board of directors may be empowered under the by-
The individual respondents Steedman, Webster and Lansang must
be held solidarily liable with respondent WPP for the wanton and laws of a corporation to create additional offices as may be necessary.
summary dismissal of petitioner Galera, to be consistent with law
and jurisprudence as well as the specific finding of the CA of bad
faith on the part of respondents.[17]
An examination of WPPs by-laws resulted in a finding that Galeras appointment as a

corporate officer (Vice-President with the operational title of Managing Director of

This Court ordered the consolidation of G.R. Nos. 169207 and 169239 in a resolution Mindshare) during a special meeting of WPPs Board of Directors is an appointment to

dated 16 January 2006.[18] a non-existent corporate office. WPPs by-laws provided for only one Vice-

President. At the time of Galeras appointment on 31 December 1999, WPP already

The Ruling of the Court had one Vice-President in the person of Webster. Galera cannot be said to be a

director of WPP also because all five directorship positions provided in the by-laws
In its consolidated comment, the Office of the Solicitor General (OSG) recommended
are already occupied. Finally, WPP cannot rely on its Amended By-Laws to support its
that (A) the Decision dated 14 April 2005 of the appellate court finding (1) Galera to
argument that Galera is a corporate officer. The Amended By-Laws provided for
be a regular employee of WPP; (2) the NLRC to have jurisdiction over the present
more than one Vice-President and for two additional directors. Even
case; and (3) WPP to have illegally dismissed Galera, be affirmed; and (B) the case
though WPPs stockholders voted for the amendment on 31 May 2000, the SEC
remanded to the Labor Arbiter for the computation of the correct monetary
approved the amendments only on 16 February 2001. Galera was dismissed on 14
award. Despite the OSGs recommendations, we see that Galeras failure to seek an
December 2000. WPP, Steedman, Webster, and Lansang did not present any
 these should not be considered against
evidence that Galeras dismissal took effect with the action of WPPs Board of her. Assurming arguendo that her appointment as Vice-President
was a valid act, it must be noted that these appointments
Directors. occurred afater she was hired as a regular employee. After her
appointments, there was no appreciable change in her duties.[20]

The appellate court further justified that Galera was an employee and not a Whether the Labor Arbiter and the NLRC
have jurisdiction over the present case
corporate officer by subjecting WPP and Galeras relationship to the four-fold test: (a)

the selection and engagement of the employee; (b) the payment of wages; (c) the
Galera being an employee, then the Labor Arbiter and the NLRC have jurisdiction
power of dismissal; and (d) the employers power to control the employee with
over the present case. Article 217 of the Labor Code provides:
respect to the means and methods by which the work is to be accomplished. The
Jurisdiction of Labor Arbiters and the Commission. (a) Except as
appellate court found:
otherwise provided under this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and decide x x xthe
x x x Sections 1 and 4 of the employment contract mandate where
following cases involving all workers, whether agricultural or non-
and how often she is to perform her work; sections 3, 5, 6 and 7
agricultural:
show that wages she receives are completely controlled by
xx x WPP; and sections 10 and 11 clearly state that she is subject
1. Unfair labor practice cases;
to the regular disciplinary procedures of x x x WPP.
2. Termination disputes;
Another indicator that she was a regular employee and not a
corporate officer is Section 14 of the contract, which clearly states
3. If accompanied with a claim for
that she is a permanent employee not a Vice-President or a
reinstatement, those cases that workers may file
member of the Board of Directors.
involving wages, rates of pay, hours of work and other
terms and conditions of employment;
xxxx
4. Claims for actual, moral, exemplary and
Another indication that the Employment Contract was one of
other forms of damages arising from the employer-
regular employment is Section 12, which states that the rights to
employee relations;
any invention, discovery, improvement in procedure, trademark,
or copyright created or discovered by petitioner GALERA during
5. Cases arising from any violation of Article
her employment shall automatically belong to private respondent
264 of this Code, including questions involving the
WPP. Under Republic Act 8293, also known as the Intellectual
legality of strikes and lockouts;
Property Code, this condition prevails if the creator of the work
subject to the laws of patent or copyright is an employee of the
6. Except claims for Employees Compensation,
one entitled to the patent or copyright.
Social Security, Medicare and other maternity benefits, all
other claims, arising from employer-employee relations,
Another convincing indication that she was only a regular
including those of persons in domestic or household
employee and not a corporate officer is the disciplinary procedure
service, involving an amount exceeding five thousand
under Sections 10 and 11 of the Employment Contract, which
pesos (P5,000.00) regardless of whether accompanied
states that her right of redress is through Mindshares Chief
with a claim for reinstatement.
Executive Officer for the Asia-Pacific. This implies that she was not
under the disciplinary control of private respondent WPPs Board of
(b) The Commission shall have exclusive appellate
Directors (BOD), which should have been the case if in fact she
jurisdiction over all cases decided by Labor Arbiters.
was a corporate officer because only the Board of Directors could
appoint and terminate such a corporate officer.
(c) Cases arising from the interpretation of collective
bargaining agreements and those arising from the
interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by
Although petitioner GALERA did sign the Alien Employment Permit
referring the same to the grievance machinery and
from the Department of Labor and Employment and the
voluntary arbitration as may be provided in said
application for a 9(g) visa with the Bureau of Immigration both of
agreements.
which stated that she was private respondents WPP Vice President

In contrast, Section 5.2 of Republic Act No. 8799, or the Securities Regulation Code,
states:
The Commissions jurisdiction over all cases enumerated under
Section 5 of Presidential Decree No. 902-A is hereby transferred to
the courts of general jurisdiction or the appropriate Regional Trial
Court: Provided, That the Supreme Court in the exercise of its
authority may designate the Regional Trial Court branches that
shall exercise jurisdiction over these cases. The Commission shall
retain jurisdiction over pending cases involving intra-corporate
disputes submitted for final resolution which should be resolved
within one year from the enactment of this Code. The Commission
shall retain jurisdiction over pending suspension of
payments/rehabilitation cases filed as of 30 June 2000 until finally
disposed.
The pertinent portions of Section 5 of Presidential Decree No. 902-A, mentioned
above, states:
b) Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, members or
associates; between any or all of them and the corporation,
partnership or association of which they are stockholders,
members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity;
c) Controversies in the election or appointments of directors,
trustees, officers or managers of such corporations, partnerships
or associations.
Whether WPP illegally dismissed Galera
WPPs dismissal of Galera lacked both substantive and procedural due process.
Apart from Steedmans letter dated 15 December 2000 to Galera, WPP failed to
prove any just or authorized cause for Galeras dismissal. Steedmans letter
to Galera reads:
The operations are currently in a shamble. There is lack of
leadership and confidence in your abilities from within, our agency
partners and some clients.
Most of the staff I spoke with felt they got more guidance and
direction from Minda than yourself. In your role as Managing
Director, that is just not acceptable.
I believe your priorities are mismanaged. The recent situation
where you felt an internal strategy meeting was more important
than a new business pitch is a good example.
You failed to lead and advise on the two new business pitches. In
both cases, those involved sort (sic) Mindas input. As I discussed
with you back in July, my directive was for you to lead and review
all business pitches. It is obvious [that] confusion existed internally
right up until the day of the pitch.
The quality output is still not to an acceptable standard, which was
also part of my directive that you needed to focus on back in July.
I do not believe you understand the basic skills and industry
knowledge required to run a media special operation.[21]
WPP, Steedman, Webster, and Lansang, however, failed to substantiate the
allegations in Steedmans letter. Galera, on the other hand, presented documentary
evidence[22] in the form of congratulatory letters, including one from Steedman,
which contents are diametrically opposed to the 15 December 2000 letter.
The law further requires that the employer must furnish the worker sought to be
dismissed with two written notices before termination of employment can be legally
effected: (1) notice which apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employers decision to dismiss him. Failure to comply with the
requirements taints the dismissal with illegality. [23] WPPs acts clearly show
that Galeras dismissal did not comply with the two-notice rule.
Whether Galera is entitled to the monetary award
 be employed upon presentation of a duly approved employment
permit.

WPP, Steedman, Webster, and Lansang argue that Galera is not entitled

to backwages because she is an alien. They further state that there is no guarantee Galera cannot come to this Court with unclean hands. To grant Galeras prayer is to

that the Bureau of Immigration and the Department of Labor and Employment will sanction the violation of the Philippine labor laws requiring aliens to secure work

continue to grant favorable rulings on the applications for a 9(g) visa and an Alien permitsbefore their employment. We hold that the status quo must prevail in the

Employment Permit after the expiry of the validity of Galeras documents on 31 present case and we leave the parties where they are. This ruling, however, does

December 2000. WPPs argument is a circular argument, and assumes what it not bar Galera from seeking relief from other jurisdictions.

attempts to prove. Had WPP not dismissedGalera, there is no doubt in our minds

that WPP would have taken action for the approval of documents required WHEREFORE, we PARTIALLY GRANT the petitions in G.R. Nos. 169207 and

for Galeras continued employment. 169239. We SET ASIDE the Decision of the Court of Appeals promulgated on 14

April 2005 as well as the Resolution promulgated on 1 August 2005 in CA-G.R. SP No.

This is Galeras dilemma: Galera worked in the Philippines without a proper work 78721.

permit but now wants to claim employees benefits under Philippine labor laws.

Employment of GALERA with private respondent WPP SO ORDERED.

became effective on September 1, 1999 solely on the
instruction of the CEO and upon signing of the contract, without
any further action from the Board of Directors of
private respondent WPP.

Four months had passed when private respondent WPP

filed before the Bureau of Immigration an application for
petitioner GALERA to receive a working visa, wherein she
was designated as Vice President of WPP. Petitioner alleged that
she was constrained to sign the application in order that she could
remain in the Philippines and retain her employment.[24]

The law and the rules are consistent in stating that the employment permit must be

acquired prior to employment. The Labor Code states: Any alien seeking admission

to the Philippines for employment purposes and any domestic or foreign employer

who desires to engage an alien for employment in the Philippines shall obtain an

employment permit from the Department of Labor. [25] Section 4, Rule XIV, Book 1 of

the Implementing Rules and Regulations provides:

Employment permit required for entry. No alien seeking

employment, whether as a resident or non-resident, may enter the
Philippines without first securing an employment permit from the
Ministry. If an alien enters the country under a non-working visa
and wishes to be employed thereafter, he may only be allowed to
CENTURY CANNING CORPORATION, G.R. No. 152894
Petitioner, According to petitioner, a performance evaluation was conducted on 15 November
Present:
1997, where petitioner gave Palad a rating of N.I. or needs improvement since she
QUISUMBING, J.,
Chairperson, scored only27.75% based on a 100% performance indicator. Furthermore, according
CARPIO,
CARPIO MORALES, to the performance evaluation, Palad incurred numerous tardiness and absences. As
- versus - TINGA, and
VELASCO, JR., JJ. a consequence, petitioner issued a termination notice [5] dated 22 November 1997 to

Palad, informing her of her termination effective at the close of business hours of 28

November 1997.
COURT OF APPEALS and
GLORIA C. PALAD, Promulgated:
Respondents.
August 17, 2007 Palad then filed a complaint for illegal dismissal, underpayment of wages, and non-
x--------------------------------------------------x payment of pro-rated 13th month pay for the year 1997.

DECISION On 25 February 1999, the Labor Arbiter dismissed the complaint for lack of merit but

ordered petitioner to pay Palad her last salary and her pro-rated 13 th month pay. The
CARPIO, J.: dispositive portion of the Labor Arbiters decision reads:

WHEREFORE, premises considered, judgment is hereby rendered

The Case
This is a petition for review[1] of the Decision[2] dated 12 November 2001 and the
Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
declaring that the complaint for illegal dismissal filed by the
complainant against the respondents in the above-entitled case
should be, as it is hereby DISMISSED for lack of merit. However,
the respondents are hereby ordered to pay the complainant the
amount of ONE THOUSAND SIX HUNDRED THIRTY-TWO PESOS
(P1,632.00), representing her last salary and the amount of SEVEN
THOUSAND TWO HUNDRED TWENTY EIGHT (P7,228.00) PESOS
representing her prorated 13th month pay.

The Facts All other issues are likewise dismissed.

On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad SO ORDERED.[6]

(Palad) as fish cleaner at petitioners tuna and sardines factory. Palad signed on 17

July 1997 an apprenticeship agreement[3] with petitioner. Palad received an

On appeal, the National Labor Relations Commission (NLRC) affirmed with
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted its
modification the Labor Arbiters decision, thus:
apprenticeship program for approval to the Technical Education and Skills

Development Authority (TESDA) of the Department of Labor and Employment
(DOLE). On 26 September 1997, the TESDA approved petitioners apprenticeship
program.[4]
WHEREFORE, premises considered, the decision of the Arbiter
dated 25 February 1999 is hereby MODIFIED in that, in addition,
respondents are ordered to pay complainants backwages for two
(2) months in the amount of P7,176.00 (P138.75 x 26 x 2 mos.). All
other dispositions of the Arbiter as appearing in the dispositive
portion of his decision are AFFIRMED.
 SO ORDERED.[7]
The Court of Appeals also held that petitioner illegally dismissed Palad. The Court of

Appeals ruled that petitioner failed to show that Palad was properly apprised of the

Upon denial of Palads motion for reconsideration, Palad filed a special civil action required standard of performance. The Court of Appeals likewise held that Palad was

for certiorari with the Court of Appeals. On 12 November 2001, the Court of Appeals not afforded due process because petitioner did not comply with the twin

rendered a decision, the dispositive portion of which reads: requirements of notice and hearing.

WHEREFORE, in view of the foregoing, the questioned decision of

the NLRC is hereby SET ASIDE and a new one entered, to wit:
The Issues
(a) finding the dismissal of petitioner to be illegal;
(b) ordering private respondent to pay petitioner her Petitioner raises the following issues:
underpayment in wages;
(c) ordering private respondent to reinstate petitioner to
her former position without loss of seniority rights and to
pay her full backwages computed from the time
1. WHETHER THE COURT OF APPEALS COMMITTED
compensation was withheld from her up to the time of her
REVERSIBLE ERROR IN HOLDING THAT PRIVATE
reinstatement;
RESPONDENT WAS NOT AN APPRENTICE; and
(d) ordering private respondent to pay petitioner
attorneys fees equivalent to ten (10%) per cent of the
2. WHETHER THE COURT OF APPEALS COMMITTED
monetary award herein; and
REVERSIBLE ERROR IN HOLDING THAT PETITIONER HAD
(e) ordering private respondent to pay the costs of the
NOT ADEQUATELY PROVEN THE EXISTENCE OF A VALID
suit.
CAUSE IN TERMINATING THE SERVICE OF PRIVATE
RESPONDENT.[10]
SO ORDERED.[8]

The Ruling of the Court

The Ruling of the Court of Appeals

The petition is without merit.

The Court of Appeals held that the apprenticeship agreement which Palad signed

was not valid and binding because it was executed more than two months before the
Registration and Approval by the TESDA of Apprenticeship Program
TESDA approved petitioners apprenticeship program. The Court of Appeals Required Before Hiring of Apprentices

cited Nitto Enterprises v. National Labor Relations Commission,[9] where it was held

that prior approval by the DOLE of the proposed apprenticeship program is a The Labor Code defines an apprentice as a worker who is covered by a written

condition sine qua non before an apprenticeship agreement can be validly entered apprenticeship agreement with an employer. [11] One of the objectives of Title II

into. (Training and Employment of Special Workers) of the Labor Code is to establish

apprenticeship standards for the protection of apprentices. [12] In line with this

objective, Articles 60 and 61 of the Labor Code provide:


ART. 60. Employment of apprentices. Only employers in the
highly technical industries may employ apprentices and
only in apprenticeable occupations approved by the
Minister of Labor and Employment. (Emphasis supplied)
ART. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including the wage rates of apprentices, shall
conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not exceed six
months. Apprenticeship agreements providing for wage
rates below the legal minimum wage, which in no case
shall start below 75 percent of the applicable minimum
wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Minister of
Labor and Employment. The Ministry shall develop standard
model programs of apprenticeship. (Emphasis supplied)
In Nitto Enterprises v. National Labor Relations Commission,[13] the Court cited Article
61 of the Labor Code and held that an apprenticeship program should first be
approved by the DOLE before an apprentice may be hired, otherwise the person
hired will be considered a regular employee. The Court held:
In the case at bench, the apprenticeship agreement between
petitioner and private respondent was executed on May 28, 1990
allegedly employing the latter as an apprentice in the trade of care
maker/molder. On the same date, an apprenticeship program was
prepared by petitioner and submitted to the Department of Labor
and Employment. However, the apprenticeship agreement was
filed only on June 7, 1990. Notwithstanding the absence of
approval by the Department of Labor and Employment, the
apprenticeship agreement was enforced the day it was signed.
Based on the evidence before us, petitioner did not comply with
the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer
and apprentice shall be entered only in accordance with
the apprenticeship program duly approved by the Minister
of Labor and Employment.
Prior approval by the Department of Labor and
Employment of the proposed apprenticeship program is,
therefore, a condition sine qua non before an
apprenticeship agreement can be validly entered into.
The act of filing the proposed apprenticeship program with the
Department of Labor and Employment is a preliminary step
towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship.
Article 57 of the Labor Code provides that the State aims to
establish a national apprenticeship program through the
participation of employers, workers and government and non-
government agencies and to establish apprenticeship standards
for the protection of apprentices. To translate such objectives into
existence, prior approval of the DOLE to any apprenticeship
program has to be secured as a condition sine qua non before any
such apprenticeship agreement can be fully enforced. The role of
the DOLE in apprenticeship programs and agreements cannot be
debased.
Hence, since the apprenticeship agreement between petitioner and
private respondent has no force and effect in the absence of a
valid apprenticeship program duly approved by the DOLE, private
respondents assertion that he was hired not as an apprentice but
as a delivery boy (kargador or pahinante) deserves credence. He
should rightly be considered as a regular employee of petitioner as
defined by Article 280 of the Labor Code x x x. (Emphasis supplied)
[14]
Republic Act No. 7796[15] (RA 7796), which created the TESDA, has transferred the
authority over apprenticeship programs from the Bureau of Local Employment of the
DOLE to the TESDA.[16] RA 7796 emphasizes TESDAs approval of the apprenticeship
program as a pre-requisite for the hiring of apprentices. Such intent is clear under
Section 4 of RA 7796:
SEC. 4. Definition of Terms. As used in this Act:
xxx
j) Apprenticeship training within employment with compulsory
related theoretical instructions involving a contract between an
apprentice and an employer on an approved
apprenticeable occupation;
k) Apprentice is a person undergoing training for an approved
apprenticeable occupation during an established period
assured by an apprenticeship agreement;
l) Apprentice Agreement is a contract wherein a prospective
employer binds himself to train the apprentice who in turn accepts
the terms of training for a recognized apprenticeable
occupation emphasizing the rights, duties and
responsibilities of each party;
m) Apprenticeable Occupation is an occupation officially
endorsed by a tripartite body and approved for apprenticeship
by the Authority [TESDA]; (Emphasis supplied)
In this case, the apprenticeship agreement was entered into between the parties Since Palad is not considered an apprentice because the apprenticeship agreement

before petitioner filed its apprenticeship program with the TESDA for approval. was enforced before the TESDAs approval of petitioners apprenticeship program,

Petitioner and Palad executed the apprenticeship agreement on 17 July 1997 Palad is deemed a regular employee performing the job of a fish cleaner. Clearly, the

wherein it was stated that the training would start on 17 July 1997 and would end job of a fish cleaner is necessary in petitioners business as a tuna and sardines

approximately in December 1997.[17] On 25 July 1997, petitioner submitted for factory. Under Article 280[21] of the Labor Code, an employment is deemed regular

approval its apprenticeship program, which the TESDA subsequently approved on 26 where the employee has been engaged to perform activities which are usually

September 1997.[18] Clearly, the apprenticeship agreement was enforced even necessary or desirable in the usual business or trade of the employer.

before the TESDA approved petitioners apprenticeship program. Thus, the

apprenticeship agreement is void because it lacked prior approval from the TESDA. Illegal Termination of Palad

The TESDAs approval of the employers apprenticeship program is required before We shall now resolve whether petitioner illegally dismissed Palad.

the employer is allowed to hire apprentices. Prior approval from the TESDA is Under Article 279[22] of the Labor Code, an employer may terminate the services of

necessary to ensure that only employers in the highly technical industries may an employee for just causes [23] or for authorized causes. [24] Furthermore, under

employ apprentices and only in apprenticeable occupations. [19] Thus, under RA 7796, Article 277(b)[25] of the Labor Code, the employer must send the employee who is

employers can only hire apprentices for apprenticeable occupations which must be about to be terminated, a written notice stating the causes for termination and must

officially endorsed by a tripartite body and approved for apprenticeship by the give the employee the opportunity to be heard and to defend himself. Thus, to

TESDA. This is to ensure the protection of apprentices and to obviate possible constitute valid dismissal from employment, two requisites must concur: (1) the

abuses by prospective employers who may want to take advantage of the lower dismissal must be for a just or authorized cause; and (2) the employee must be

wage rates for apprentices and circumvent the right of the employees to be secure afforded an opportunity to be heard and to defend himself. [26]

in their employment.

In this case, the Labor Arbiter held that petitioner terminated Palad for habitual

The requisite TESDA approval of the apprenticeship program prior to the hiring of absenteeism and poor efficiency of performance. Under Section 25, Rule VI, Book II

apprentices was further emphasized by the DOLE with the issuance of Department of the Implementing Rules of the Labor Code, habitual absenteeism and poor

Order No. 68-04 on 18 August 2004. Department Order No. 68-04, which provides efficiency of performance are among the valid causes for which the employer may

the guidelines in the implementation of the Apprenticeship and Employment terminate the apprenticeship agreement after the probationary period.

Program of the government, specifically states that no enterprise shall be

However, the NLRC reversed the finding of the Labor Arbiter on the issue of the
allowed to hire apprentices unless its apprenticeship program is
legality of Palads termination:
registered and approved by TESDA.[20]

As to the validity of complainants dismissal in her status as an

apprentice, suffice to state that the findings of the Arbiter that
 complainant was dismissed due to failure to meet the standards is
nebulous. What clearly appears is that complainant already passed Under Article 227 of the Labor Code, the employer has the burden of proving that
the probationary status of the apprenticeship agreement of 200
hours at the time she was terminated on 28 November 1997 which the termination was for a valid or authorized cause.[28] Petitioner failed to
was already the fourth month of the apprenticeship period of 1000
hours. As such, under the Code, she can only be dismissed for substantiate its claim that Palad was terminated for valid reasons. In fact, the NLRC
cause, in this case, for poor efficiency of performance on the job or
in the classroom for a prolonged period despite warnings duly found that petitioner failed to prove the authenticity of the performance evaluation
given to the apprentice.
which petitioner claims to have conducted on Palad, where Palad received a
We noted that no clear and sufficient evidence exist to
performance rating of only 27.75%. Petitioner merely relies on the performance
warrant her dismissal as an apprentice during the agreed
period. Besides the absence of any written warnings given
evaluation to prove Palads inefficiency. It was likewise not shown that petitioner ever
to complainant reminding her of poor performance,
respondents evidence in this respect consisted of an apprised Palad of the performance standards set by the company. When the alleged
indecipherable or unauthenticated xerox of the
performance evaluation allegedly conducted valid cause for the termination of employment is not clearly proven, as in this case,
on complainant. This is of doubtful authenticity and/or
credibility, being not only incomplete in the sense that the law considers the matter a case of illegal dismissal. [29]
appearing thereon is a signature (not that of complainant)
side by side with a date indicated as 1/16/98. From the
looks of it, this signature is close to and appertains to the
typewritten position of Division/Department Head, which is Furthermore, Palad was not accorded due process. Even if petitioner did conduct a
below the signature of complainants immediate superior
who made the evaluation indicated as 11-15-97. performance evaluation on Palad, petitioner failed to warn Palad of her alleged poor

The only conclusion We can infer is that this evaluation performance. In fact, Palad denies any knowledge of the performance evaluation
was made belatedly, specifically, after the filing of the case
and during the progress thereof in the Arbitral level, as conducted and of the result thereof. Petitioner likewise admits that Palad did not
shown that nothing thereon indicate that complainant was
notified of the results. Its authenticity therefor, is a big receive the notice of termination [30] because Palad allegedly stopped reporting for
question mark, and hence lacks any credibility. Evidence,
to be admissible in administrative proceedings, must at work. The records are bereft of evidence to show that petitioner ever gave Palad the
least have a modicum of authenticity. This, respondents failed
to comply with. As such, complainant is entitled to the payment of opportunity to explain and defend herself. Clearly, the two requisites for a valid
her wages for the remaining two (2) months of her apprenticeship
dismissal are lacking in this case.
agreement.[27] (Emphasis supplied)

WHEREFORE, we AFFIRM the Decision dated 12 November 2001 and the

Indeed, it appears that the Labor Arbiters conclusion that petitioner validly
Resolution dated 5 April 2002 of the Court of Appeals in CA-G.R. SP No. 60379.
terminated Palad was based mainly on the performance evaluation allegedly

conducted by petitioner. However, Palad alleges that she had no knowledge of the
SO ORDERED.
performance evaluation conducted and that she was not even informed of the result

of the alleged performance evaluation. Palad also claims she did not receive a notice

of dismissal, nor was she given the chance to explain. According to petitioner, Palad

did not receive the termination notice because Palad allegedly stopped reporting for

work after being informed of the result of the evaluation.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-61684 October 11, 1983

ROLANDO ROXAS SURVEYING COMPANY, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and MATHEW
LEONARDO, respondents.

RELOVA, J.:

Labor Arbiter Fernando A. Sambajon, in the complaint filed by private respondent

Mathew Leonardo against herein petitioner Rolando Roxas Surveying Co. with the
Regional Office No. IV, Ministry of Labor, for illegal dismissal, unpaid wages and
unpaid per diems, rendered a decision on June 27, 1979, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered ordering respondent to

reinstate complainant to his former position with back salaries of
P450.00 monthly, from October 1, 1976 up to the date of
reinstatement without loss of seniority rights, and to pay to
complainant emergency allowance of ?15.00 monthly for the
period of his service from March 1, 1976 to September 15, 1976.

The claims of unpaid wages and per diems are denied for lack of
merit.

SO ORDERED. (p. 42, Rollo)

Petitioner appealed to respondent National Labor Relations Commission (NLRC)

which, on February 11, 1982, rendered judgment as follows:

WHEREFORE, let the decision appealed from be MODIFIED the

sense that the respondent is hereby ordered to pay the
complainant two years backwages and one month separation pay
subject to computation by the Socio-Economic Analyst of this
Commission. The decision is affirmed in all other respects.

SO ORDERED. (p. 53, Rollo)

Upon denial of its motion for reconsideration, petitioner filed with a petition for
certiorari with prayer, among others, that "the award of two (2) years backwages, be
deleted from the decision, if only to make it conform with the rulings laid down by
this Honorable Court as above-quoted."
The facts of the case are stated in the decision of respondent NLRC, as follows:
A review of the record shows that the complainant applied for and
was accepted as surveyman by the respondent on the strength of
his 14 years of experience in survey work with the Bureau of
Lands; that on March 1, 1976, he started working as such
surveyman with seven men under him in Surigao del Sur; that in
September 1976, he requested and was granted 15 days vacation
leave; that after the expiration of his leave of absence, he reported
for work but was not allowed by the engineer of the cadastral
survey party unless the consent of the respondent had been
obtained; that for his reason, he sent a telegram to the respondent
but received no reply so he proceeded to Manila and called up the
respondent who told him he could no longer return to his job
because of the irregularities he had committed during his
employment; that this created a misunderstanding between the
complainant and the respondent which resulted in the filing of
charges and counter-charges against each other. (p. 50, Rollo)
Petitioner contends that the reason for private respondent's dismissal was his
anomalous conduct while working for the companyunauthorized collection of
money from people whose lands were being surveyed; that his continuance in the
service, is patently inimical to its interest, aside from the fact that his dishonesty is
shown when he did not disclose his conviction for malversation of public funds, with
the penalty of perpetual disqualification to hold government office; that the finding
and observation of respondent NLRC that reinstatement of private respondent to his
former position would be imprudent and impracticable" lead to the inevitable
conclusion that he should not be paid back wage. To do otherwise, it is argued,
"would be doing violence to the rule that conclusions made in the decision must be
consistent with the findings of facts." (Memorandum for the petitioner, p. 111, Rollo).
Further, petitioner points out that private respondent was employed merely for the
cadastral survey being conducted in Surigao del Sur and that there was no fixed
period for employment. Thus, the company has the right to terminate private
respondent at any time and even without cause.
We find no merit in this petition. In the first place, the claim that private respondent
asked money from people whose lands were being surveyed is not supported by
evidence, except the testimony of Engineer Eugenio Morales who, however, did not
confront the private respondent, much less, present the persons from whom he
allegedly demanded or received money.
With respect to the issue that private respondent was only an apprentice and not a
regular employee. petitioner relied on the letter, dated January 30, 1976, addressed
to Engineer Morales, as follow
1-30-76
Engr. Jamison or Morales Cadastral Survey Party Cad-5-37-D, San
Miguel Cadastre San Miguel, Surigao del Sur
The bearer is Mr. Mathew Leonardo also likes to join our office and
field force there in our project operation. As alleged he knows
transit work so with little office work so please assess him and I'll
be the one who will determine his salary upon arrival. of be
arriving soon, as my Lanao project has a little problem.
Regards: Good luck to all
Sgd. (Illegible) (p. 136, Rollo)
The above communication to Engineer Morales for him to assess the capabilities of
private respondent is not sufficient to show that he was taken in as an apprentice.
There was no written agreement that his services had been engaged as an
apprentice. On the contrary, every circumstance would indicate that he was
accepted on the basis of his credentials that he had been an employee for several
years as a surveyor in the Bureau of Lands. He was given a salary of P450.00 a
month and, on June 1, 1976, was sent to Surigao del Sur to perform the work of a
surveyor, with seven men under him to supervise. For all intents and purposes, he
comes within the meaning of a regular employee "to perform activities which are
usually necessary or desirable in the usual business or trade of the employees."
(Article 281 of the Labor Code). In short, if it was really the intention of petitioner to
employ private respondent as an apprentice only, it should have so stated the same
clearly and in writing.
Thus, as a regular e employee, private respondent cannot be terminated except for
a just cause or when authorized under Article 283 of the Labor, which provides:
Art. 283. Termination by employer. An employer may terminate
an employee. without a definite period for any of the following just
causes:
(a) The closing or cessation of operation of the establishment or
enterprise, or where the employer has to reduce his workforce by
more than one-half (1/2) due to serious business reverses, unless
the closing is for purpose of circumventing the provision of this
Chapter;
 (b) Serious misconduct or willful disobedience by the employee of
the orders of his employer or representative in connection with his
work;
(c) Gross and habitual neglect by the employee of his duties;
(d) Fraud or willful breach by the employee of the trust reposed in
him by his employer or representative;
(e) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or
representative; and
(f) Other causes analogous to the foregoing.
Finally, We find merit in the submission of the Solicitor General that "considering the
circumstances of the case and the seeming bad faith of petitioner in dismissing
private respondent, it is in consonance with justice, reason and equity that
respondent NLRC awarded back wages to private respondent. Private respondent,
during his lay-off, and his family have to undergo difficulties and hardships of life
(National Shipyards and Steel Corporation vs. CIR, et al., 57 SCRA 642). It has not
been shown that in the interim from his illegal dismissal, private respondent has
found some means of livelihood to support himself and his family."
WHEREFORE, for lack of merit, the petition is dismissed and the temporary
restraining order issued on September 22, 1982 is hereby LIFTED.
SO ORDERED.
Melencio-Herrera (Actg. Chairperson), Abad Santos, Plana and Escolin JJ., concur.
G.R. No. 118978. May 23, 1997]
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY, * petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION and GRACE DE
GUZMAN,respondents.
DECISION
REGALADO, J.:
Seeking relief through the extraordinary writ of certiorari, petitioner Philippine
Telegraph and Telephone Company (hereafter, PT&T) invokes the alleged
concealment of civil status and defalcation of company funds as grounds to
terminate the services of an employee. That employee, herein private respondent
Grace de Guzman, contrarily argues that what really motivated PT&T to terminate
her services was her having contracted marriage during her employment, which is
prohibited by petitioner in its company policies. She thus claims that she was
discriminated against in gross violation of law, such a proscription by an employer
being outlawed by Article 136 of the Labor Code.
Grace de Guzman was initially hired by petitioner as a reliever, specifically as a
Supernumerary Project Worker, for a fixed period from November 21, 1990 until April
20, 1991 vice one C.F. Tenorio who went on maternity leave. [1] Under the Reliever
Agreement which she signed with petitioner company, her employment was to be
immediately terminated upon expiration of the agreed period. Thereafter, from June
10, 1991 to July 1, 1991, and from July 19, 1991 to August 8, 1991, private
respondents services as reliever were again engaged by petitioner, this time in
replacement of one Erlinda F. Dizon who went on leave during both periods. [2] After
August 8, 1991, and pursuant to their Reliever Agreement, her services were
terminated.
On September 2, 1991, private respondent was once more asked to join
petitioner company as a probationary employee, the probationary period to cover
150 days. In the job application form that was furnished her to be filled up for the
purpose, she indicated in the portion for civil status therein that she was single
although she had contracted marriage a few months earlier, that is, on May 26,
1991.[3]
 It now appears that private respondent had made the same representation in
the two successive reliever agreements which she signed on June 10, 1991 and July
8, 1991. When petitioner supposedly learned about the same later, its branch
supervisor in Baguio City, Delia M. Oficial, sent to private respondent a
memorandum dated January 15, 1992 requiring her to explain the discrepancy. In
that memorandum, she was reminded about the companys policy of not accepting
married women for employment.[4]
In her reply letter dated January 17, 1992, private respondent stated that she
was not aware of PT&Ts policy regarding married women at the time, and that all
along she had not deliberately hidden her true civil status.[5] Petitioner nonetheless
remained unconvinced by her explanations. Private respondent was dismissed from
the company effective January 29, 1992, [6] which she readily contested by initiating
a complaint for illegal dismissal, coupled with a claim for non-payment of cost of
living allowances (COLA), before the Regional Arbitration Branch of the National
Labor Relations Commission in Baguio City.
At the preliminary conference conducted in connection therewith, private
respondent volunteered the information, and this was incorporated in the stipulation
of facts between the parties, that she had failed to remit the amount of P2,380.75 of
her collections. She then executed a promissory note for that amount in favor of
petitioner.[7] All of these took place in a formal proceeding and with the agreement of
the parties and/or their counsel.
On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a
decision declaring that private respondent, who had already gained the status of a
regular employee, was illegally dismissed by petitioner. Her reinstatement, plus
payment of the corresponding back wages and COLA, was correspondingly ordered,
the labor arbiter being of the firmly expressed view that the ground relied upon by
petitioner in dismissing private respondent was clearly insufficient, and that it was
apparent that she had been discriminated against on account of her having
contracted marriage in violation of company rules.
On appeal to the National Labor Relations Commission (NLRC), said public
respondent upheld the labor arbiter and, in its decision dated April 29, 1994, it ruled
that private respondent had indeed been the subject of an unjust and unlawful
discrimination by her employer, PT&T. However, the decision of the labor arbiter was
modified with the qualification that Grace de Guzman deserved to be suspended for
three months in view of the dishonest nature of her acts which should not be
condoned. In all other respects, the NLRC affirmed the decision of the labor arbiter,
including the order for the reinstatement of private respondent in her employment
with PT&T.
The subsequent motion for reconsideration filed by petitioner was rebuffed by
respondent NLRC in its resolution of November 9, 1994, hence this special civil
action assailing the aforestated decisions of the labor arbiter and respondent NLRC,
as well as the denial resolution of the latter.
1. Decreed in the Bible itself is the universal norm that women should be
regarded with love and respect but, through the ages, men have responded to that
injunction with indifference, on the hubristic conceit that women constitute the
inferior sex. Nowhere has that prejudice against womankind been so pervasive as in
the field of labor, especially on the matter of equal employment opportunities and
standards. In the Philippine setting, women have traditionally been considered as
falling within the vulnerable groups or types of workers who must be safeguarded
with preventive and remedial social legislation against discriminatory and
exploitative practices in hiring, training, benefits, promotion and retention.
The Constitution, cognizant of the disparity in rights between men and women
in almost all phases of social and political life, provides a gamut of protective
provisions. To cite a few of the primordial ones, Section 14, Article II [8] on the
Declaration of Principles and State Policies, expressly recognizes the role of women
in nation-building and commands the State to ensure, at all times, the fundamental
equality before the law of women and men. Corollary thereto, Section 3 of Article
XIII[9] (the progenitor whereof dates back to both the 1935 and 1973 Constitution)
pointedly requires the State to afford full protection to labor and to promote full
employment and equality of employment opportunities for all, including an
assurance of entitlement to tenurial security of all workers. Similarly, Section 14 of
Article XIII[10] mandates that the State shall protect working women through
provisions for opportunities that would enable them to reach their full potential.
2. Corrective labor and social laws on gender inequality have emerged with
more frequency in the years since the Labor Code was enacted on May 1, 1974 as
Presidential Decree No. 442, largely due to our countrys commitment as a signatory
to the United Nations Convention on the Elimination of All Forms of Discrimination
Against Women (CEDAW).[11]
Principal among these laws are Republic Act No. 6727 [12] which explicitly
prohibits discrimination against women with respect to terms and conditions of
employment, promotion, and training opportunities; Republic Act No. 6955 [13] which
bans the mail-order-bride practice for a fee and the export of female labor to
countries that cannot guarantee protection to the rights of women workers; Republic
Act No. 7192,[14] also known as the Women in Development and Nation Building Act,
which affords women equal opportunities with men to act and to enter into
contracts, and for appointment, admission, training, graduation, and commissioning
in all military or similar schools of the Armed Forces of the Philippines and the
Philippine National Police; Republic Act No. 7322 [15] increasing the maternity benefits
granted to women in the private sector; Republic Act No. 7877 [16] which outlaws and
punishes sexual harassment in the workplace and in the education and training
environment; and Republic Act No. 8042,[17] or the Migrant Workers and Overseas
Filipinos Act of 1995, which prescribes as a matter of policy,inter alia, the
deployment of migrant workers, with emphasis on women, only in countries where
their rights are secure. Likewise, it would not be amiss to point out that in the Family
Code,[18] womens rights in the field of civil law have been greatly enhanced and
expanded.
 In the Labor Code, provisions governing the rights of women workers are found
in Articles 130 to 138 thereof. Article 130 involves the right against particular kinds
of night work while Article 132 ensures the right of women to be provided with
facilities and standards which the Secretary of Labor may establish to ensure their
health and safety. For purposes of labor and social legislation, a woman working in a
nightclub, cocktail lounge, massage clinic, bar or other similar establishments shall
be considered as an employee under Article 138. Article 135, on the other hand,
recognizes a womans right against discrimination with respect to terms and
conditions of employment on account simply of sex. Finally, and this brings us to the
issue at hand, Article 136 explicitly prohibits discrimination merely by reason of the
marriage of a female employee.
3. Acknowledged as paramount in the due process scheme is the constitutional
guarantee of protection to labor and security of tenure. Thus, an employer is
required, as a conditionsine qua non prior to severance of the employment ties of an
individual under his employ, to convincingly establish, through substantial evidence,
the existence of a valid and just cause in dispensing with the services of such
employee, ones labor being regarded as constitutionally protected property.
On the other hand, it is recognized that regulation of manpower by the
company falls within the so-called management prerogatives, which prescriptions
encompass the matter of hiring, supervision of workers, work assignments, working
methods and assignments, as well as regulations on the transfer of employees, lay-
off of workers, and the discipline, dismissal, and recall of employees. [19] As put in a
case, an employer is free to regulate, according to his discretion and best business
judgment, all aspects of employment, from hiring to firing, except in cases of
unlawful discrimination or those which may be provided by law. [20]
In the case at bar, petitioners policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs afoul of the
test of, and the right against, discrimination, afforded all women workers by our
labor laws and by no less than the Constitution. Contrary to petitioners assertion
that it dismissed private respondent from employment on account of her dishonesty,
the record discloses clearly that her ties with the company were dissolved principally
because of the companys policy that married women are not qualified for
employment in PT&T, and not merely because of her supposed acts of dishonesty.
That it was so can easily be seen from the memorandum sent to private
respondent by Delia M. Oficial, the branch supervisor of the company, with the
reminder, in the words of the latter, that youre fully aware that the company is not
accepting married women employee (sic), as it was verbally instructed to you.
[21]
Again, in the termination notice sent to her by the same branch supervisor,
private respondent was made to understand that her severance from the service
was not only by reason of her concealment of her married status but, over and on
top of that, was her violation of the companys policy against marriage (and even
told you that married women employees are not applicable [sic] or accepted in our
company.)[22] Parenthetically, this seems to be the curious reason why it was made to
appear in the initiatory pleadings that petitioner was represented in this case only
by its said supervisor and not by its highest ranking officers who would otherwise be
solidarily liable with the corporation.[23]
Verily, private respondents act of concealing the true nature of her status from
PT&T could not be properly characterized as willful or in bad faith as she was moved
to act the way she did mainly because she wanted to retain a permanent job in a
stable company. In other words, she was practically forced by that very same illegal
company policy into misrepresenting her civil status for fear of being disqualified
from work. While loss of confidence is a just cause for termination of employment, it
should not be simulated. [24] It must rest on an actual breach of duty committed by
the employee and not on the employers caprices. [25] Furthermore, it should never be
used as a subterfuge for causes which are improper, illegal, or unjustified. [26]
In the present controversy, petitioners expostulations that it dismissed private
respondent, not because the latter got married but because she concealed that fact,
does have a hollow ring. Her concealment, so it is claimed, bespeaks dishonesty
hence the consequent loss of confidence in her which justified her
dismissal. Petitioner would asseverate, therefore, that while it has nothing against
marriage, it nonetheless takes umbrage over the concealment of that fact. This
improbable reasoning, with interstitial distinctions, perturbs the Court since private
respondent may well be minded to claim that the imputation of dishonesty should
be the other way around.
Petitioner would have the Court believe that although private respondent
defied its policy against its female employees contracting marriage, what could be
an act of insubordination was inconsequential. What it submits as unforgivable is her
concealment of that marriage yet, at the same time, declaring that marriage as a
trivial matter to which it supposedly has no objection. In other words, PT&T says it
gives its blessings to its female employees contracting marriage, despite the
maternity leaves and other benefits it would consequently respond for and which
obviously it would have wanted to avoid. If that employee confesses such fact of
marriage, there will be no sanction; but if such employee conceals the same instead
of proceeding to the confessional, she will be dismissed. This line of reasoning does
not impress us as reflecting its true management policy or that we are being regaled
with responsible advocacy.
This Court should be spared the ennui of strained reasoning and the tedium of
propositions which confuse through less than candid arguments. Indeed, petitioner
glosses over the fact that it was its unlawful policy against married women, both on
the aspects of qualification and retention, which compelled private respondent to
conceal her supervenient marriage. It was, however, that very policy alone which
was the cause of private respondents secretive conduct now complained of. It is
then apropos to recall the familiar saying that he who is the cause of the cause is
the cause of the evil caused.
Finally, petitioners collateral insistence on the admission of private respondent
that she supposedly misappropriated company funds, as an additional ground to
dismiss her from employment, is somewhat insincere and self-serving. Concededly,
private respondent admitted in the course of the proceedings that she failed to remit
some of her collections, but that is an altogether different story. The fact is that she
was dismissed solely because of her concealment of her marital status, and not on
the basis of that supposed defalcation of company funds.That the labor arbiter
would thus consider petitioners submissions on this supposed dishonesty as a mere
afterthought, just to bolster its case for dismissal, is a perceptive conclusion born of
experience in labor cases. For, there was no showing that private respondent
deliberately misappropriated the amount or whether her failure to remit the same
was through negligence and, if so, whether the negligence was in nature simple or
grave. In fact, it was merely agreed that private respondent execute a promissory
note to refund the same, which she did, and the matter was deemed settled as a
peripheral issue in the labor case.
Private respondent, it must be observed, had gained regular status at the time
of her dismissal. When she was served her walking papers on January 29, 1992, she
was about to complete the probationary period of 150 days as she was contracted
as a probationary employee on September 2, 1991. That her dismissal would be
effected just when her probationary period was winding down clearly raises the
plausible conclusion that it was done in order to prevent her from earning security of
tenure.[27] On the other hand, her earlier stints with the company as reliever were
undoubtedly those of a regular employee, even if the same were for fixed periods,
as she performed activities which were essential or necessary in the usual trade and
business of PT&T.[28] The primary standard of determining regular employment is the
reasonable connection between the activity performed by the employee in relation
to the business or trade of the employer.[29]
As an employee who had therefore gained regular status, and as she had been
dismissed without just cause, she is entitled to reinstatement without loss of
seniority rights and other privileges and to full back wages, inclusive of allowances
and other benefits or their monetary equivalent. [30] However, as she had undeniably
committed an act of dishonesty in concealing her status, albeit under the
compulsion of an unlawful imposition of petitioner, the three-month suspension
imposed by respondent NLRC must be upheld to obviate the impression or inference
that such act should be condoned. It would be unfair to the employer if she were to
return to its fold without any sanction whatsoever for her act which was not totally
justified.Thus, her entitlement to back wages, which shall be computed from the
time her compensation was withheld up to the time of her actual reinstatement,
shall be reduced by deducting therefrom the amount corresponding to her three
months suspension.
4. The government, to repeat, abhors any stipulation or policy in the nature of
that adopted by petitioner PT&T. The Labor Code states, in no uncertain terms, as
follows:
ART. 136. Stipulation against marriage. - It shall be unlawful for an employer to
require as a condition of employment or continuation of employment that a woman
shall not get married, or to stipulate expressly or tacitly that upon getting married, a
woman employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason
of marriage.
This provision had a studied history for its origin can be traced to Section 8 of
Presidential Decree No. 148,[31] better known as the Women and Child Labor Law,
which amended paragraph (c), Section 12 of Republic Act No. 679, [32] entitled An Act
to Regulate the Employment of Women and Children, to Provide Penalties for
Violations Thereof, and for Other Purposes. The forerunner to Republic Act No. 679,
on the other hand, was Act No. 3071 which became law on March 16, 1923 and
which regulated the employment of women and children in shops, factories,
industrial, agricultural, and mercantile establishments and other places of labor in
the then Philippine Islands.
It would be worthwhile to reflect upon and adopt here the rationalization
in Zialcita, et al. vs. Philippine Air Lines,[33] a decision that emanated from the Office
of the President. There, a policy of Philippine Air Lines requiring that prospective
flight attendants must be single and that they will be automatically separated from
the service once they marry was declared void, it being violative of the clear
mandate in Article 136 of the Labor Code with regard to discrimination against
married women. Thus:
Of first impression is the incompatibility of the respondents policy or regulation with
the codal provision of law. Respondent is resolute in its contention that Article 136 of
the Labor Code applies only to women employed in ordinary occupations and that
the prohibition against marriage of women engaged in extraordinary occupations,
like flight attendants, is fair and reasonable, considering the pecularities of their
chosen profession.
We cannot subscribe to the line of reasoning pursued by respondent. All along, it
knew that the controverted policy has already met its doom as early as March 13,
1973 when Presidential Decree No. 148, otherwise known as the Women and Child
Labor Law, was promulgated. But for the timidity of those affected or their labor
unions in challenging the validity of the policy, the same was able to obtain a
momentary reprieve. A close look at Section 8 of said decree, which amended
paragraph (c) of Section 12 of Republic Act No. 679, reveals that it is exactly the
same provision reproduced verbatim in Article 136 of the Labor Code, which was
promulgated on May 1, 1974 to take effect six (6) months later, or on November 1,
1974.
It cannot be gainsaid that, with the reiteration of the same provision in the new
Labor Code, all policies and acts against it are deemed illegal and therefore
abrogated. True, Article 132 enjoins the Secretary of Labor to establish standards
that will ensure the safety and health of women employees and in appropriate cases
shall by regulation require employers to determine appropriate minimum standards
for termination in special occupations, such as those of flight attendants, but that is
precisely the factor that militates against the policy of respondent. The standards
have not yet been established as set forth in the first paragraph, nor has the
Secretary of Labor issued any regulation affecting flight attendants.
It is logical to presume that, in the absence of said standards or regulations which
are as yet to be established, the policy of respondent against marriage is patently
illegal. This finds support in Section 9 of the New Constitution, which provides:
Sec. 9. The State shall afford protection to labor, promote full employment and
equality in employment, ensure equal work opportunities regardless of sex, race, or
creed, and regulate the relations between workers and employees. The State shall
assure the rights of workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work x x x.
Moreover, we cannot agree to the respondents proposition that termination from
employment of flight attendants on account of marriage is a fair and reasonable
standard designed for their own health, safety, protection and welfare, as no basis
has been laid therefor. Actually, respondent claims that its concern is not so
much against the continued employment of the flight attendant merely by reason of
marriage as observed by the Secretary of Labor, but rather on the consequence of
marriage-pregnancy. Respondent discussed at length in the instant appeal the
supposed ill effects of pregnancy on flight attendants in the course of their
employment. We feel that this needs no further discussion as it had been adequately
explained by the Secretary of Labor in his decision of May 2, 1976.
In a vain attempt to give meaning to its position, respondent went as far as invoking
the provisions of Articles 52 and 216 of the New Civil Code on the preservation of
marriage as an inviolable social institution and the family as a basic social
institution, respectively, as bases for its policy of non-marriage. In both instances,
respondent predicates absence of a flight attendant from her home for long periods
of time as contributory to an unhappy married life. This is pure conjecture not based
on actual conditions, considering that, in this modern world, sophisticated
technology has narrowed the distance from one place to another. Moreover,
respondent overlooked the fact that married flight attendants can program their
lives to adapt to prevailing circumstances and events.
Article 136 is not intended to apply only to women employed in ordinary
occupations, or it should have categorically expressed so. The sweeping intendment
of the law, be it on special or ordinary occupations, is reflected in the whole text and
supported by Article 135 that speaks of non-discrimination on the employment of
women.
The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque
Mining & Industrial Corporation [34] considered as void a policy of the same nature. In
said case, respondent, in dismissing from the service the complainant, invoked a
policy of the firm to consider female employees in the project it was undertaking as
separated the moment they get married due to lack of facilities for married
women. Respondent further claimed that complainant was employed in the project
with an oral understanding that her services would be terminated when she gets
married. Branding the policy of the employer as an example of discriminatory
chauvinism tantamount to denying equal employment opportunities to women
simply on account of their sex, the appellate court struck down said employer policy
as unlawful in view of its repugnance to the Civil Code, Presidential Decree No. 148
and the Constitution.
Under American jurisprudence, job requirements which establish employer
preference or conditions relating to the marital status of an employee are
categorized as a sex-plus discrimination where it is imposed on one sex and not on
the other. Further, the same should be evenly applied and must not inflict adverse
effects on a racial or sexual group which is protected by federal job discrimination
laws. Employment rules that forbid or restrict the employment of married women,
but do not apply to married men, have been held to violate Title VII of the United
States Civil Rights Act of 1964, the main federal statute prohibiting job
discrimination against employees and applicants on the basis of, among other
things, sex.[35]
Further, it is not relevant that the rule is not directed against all women but
just against married women. And, where the employer discriminates against married
women, but not against married men, the variable is sex and the discrimination is
unlawful.[36] Upon the other hand, a requirement that a woman employee must
remain unmarried could be justified as a bona fide occupational qualification, or
BFOQ, where the particular requirements of the job would justify the same, but not
on the ground of a general principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it reflects an
inherent quality reasonably necessary for satisfactory job performance. Thus, in one
case, a no-marriage rule applicable to both male and female flight attendants, was
regarded as unlawful since the restriction was not related to the job performance of
the flight attendants.[37]
5. Petitioners policy is not only in derogation of the provisions of Article 136 of
the Labor Code on the right of a woman to be free from any kind of stipulation
against marriage in connection with her employment, but it likewise assaults good
morals and public policy, tending as it does to deprive a woman of the freedom to
choose her status, a privilege that by all accounts inheres in the individual as an
intangible and inalienable right.[38] Hence, while it is true that the parties to a
contract may establish any agreements, terms, and conditions that they may deem
convenient, the same should not be contrary to law, morals, good customs, public
order, or public policy.[39] Carried to its logical consequences, it may even be said
that petitioners policy against legitimate marital bonds would encourage illicit or
common-law relations and subvert the sacrament of marriage.
Parenthetically, the Civil Code provisions on the contract of labor state that the
relations between the parties, that is, of capital and labor, are not merely
contractual, impressed as they are with so much public interest that the same
should yield to the common good. [40] It goes on to intone that neither capital nor
labor should visit acts of oppression against the other, nor impair the interest or
convenience of the public.[41] In the final reckoning, the danger of just such a policy
against marriage followed by petitioner PT&T is that it strikes at the very essence,
ideals and purpose of marriage as an inviolable social institution and, ultimately, of
the family as the foundation of the nation.[42] That it must be effectively interdicted
here in all its indirect, disguised or dissembled forms as discriminatory conduct
derogatory of the laws of the land is not only in order but imperatively required.

ON THE FOREGOING PREMISES, the petition of Philippine Telegraph and

Telephone Company is hereby DISMISSED for lack of merit, with double costs against
petitioner.

SO ORDERED.

Romero, Puno, Mendoza, and Torres, Jr., JJ., concur.

LAKPUE DRUG, INC., LA G.R. No. 166379
CROESUS PHARMA, INC.,
Marylinda O. Vegafria, Technical Manager of Tropical, to hand over the documents

TROPICAL BIOLOGICAL PHILS., she worked on over the weekend and to give notice of her emergency leave.

INC. (all known as LAKPUE GROUP

While at the PGH, Belga who was pregnant experienced labor pains and gave birth
OF COMPANIES) and/or ENRIQUE
on the same day. On March 22, 2001, or two days after giving birth, Tropical

CASTILLO, JR., summoned Belga to report for work but the latter replied that she could not comply

because of her situation. On March 30, 2001, Tropical sent Belga another
Petitioners, Present:
memorandum ordering her to report for work and also informing her of the

Davide, Jr., C.J. (Chairman), clarificatory conference scheduled on April 2, 2001. Belga requested that the
- versus - Quisumbing,
Ynares-Santiago, conference be moved to April 4, 2001 as her newborn was scheduled for check-up
Carpio, and
on April 2, 2001. When Belga attended the clarificatory conference on April 4, 2001,
Azcuna, JJ.
MA. LOURDES BELGA, she was informed of her dismissal effective that day.
Respondent. Promulgated:

October 20, 2005

Belga thus filed a complaint with the Public Assistance and Complaint Unit
x ---------------------------------------------------------------------------------------- x
(PACU) of the Department of Labor and Employment (DOLE). Attempts to settle the

case failed, hence the parties brought the case before the NLRC-NCR.
DECISION

Tropical, for its part, averred that it hired Belga on March 1, 1995 as a bookkeeper
YNARES-SANTIAGO, J.: and later promoted to various positions the last of which was as Treasury Assistant.

Tropical claimed that this position was not merely clerical because it included duties
[1]
Before us is a petition for review of the July 28, 2004 Decision of the Court of such as assisting the cashier in preparing deposit slips, bills purchased, withdrawal

Appeals in CA-G.R. SP No. 80616 which reversed and set aside the April 14, 2003
[2]
Decision of the National Labor Relations Commission (NLRC) in NLRC NCR 00-09-
[3]
04981-01; and its December 17, 2004 Resolution
slips, provisional receipts, incoming and outgoing bank transactions, postdated
checks, suppliers checklist and issuance of checks, authorities to debit and doing
denying the motion for liaison work with banks.

reconsideration.

Petitioner Tropical Biological Phils., Inc. (Tropical), a subsidiary of Lakpue Group of Tropical also alleged that Belga concealed her pregnancy from the company. She did

Companies, hired on March 1, 1995 respondent Ma. Lourdes Belga (Belga) as not apply for leave and her absence disrupted Tropicals financial transactions. On

bookkeeper and subsequently promoted as assistant cashier. On March 19, 2001, March 21, 2001, it required Belga to explain her unauthorized absence and on March

Belga brought her daughter to the Philippine General Hospital (PGH) for treatment of 30, 2001, it informed her of a conference scheduled on April 2, 2001. Tropical

broncho-pneumonia. On her way to the hospital, Belga dropped by the house of claimed that Belga refused to receive the second memorandum and did not attend
the conference. She reported for work only on April 4, 2001 where she was given a (1) declaring complainant-appellees dismissal
valid; and
chance to explain.
(2) nullifying complainant-appellees monetary
claims.

On April 17, 2001, Tropical terminated Belga on the following grounds: (1) Absence SO ORDERED.[6]

without official leave for 16 days; (2) Dishonesty, for deliberately concealing her

pregnancy; (3) Insubordination, for her deliberate refusal to heed and comply with
Upon denial of the motion for reconsideration on September 24, 2003, [7] Belga filed a
the memoranda sent by the Personnel Department on March 21 and 30, 2001
petition for certiorari with the Court of Appeals which found in favor of Belga, thus:
respectively.[4]

The Labor Arbiter ruled in favor of Belga and found that she was illegally
WHEREFORE, premises considered, the Decision
dismissed, thus: promulgated on April 14, 2003 and the Resolution promulgated on
September 24, 2003 of the public respondent National Labor
Relations Commission are hereby REVERSED and SET ASIDE. The
decision of the Labor Arbiter dated June 15, 2002 is hereby
WHEREFORE, the termination of complainant is hereby
REINSTATED.
declared illegal. ACCORDINGLY, she should be reinstated with full
backwages, which as of May 31, 2002, now amounts to P122,
248.71.

SO ORDERED.[8]

Ten (10%) percent of the total monetary award as

attorneys fees is likewise ordered.
Hence, Tropical filed the instant petition claiming that:

I.
[5]
SO ORDERED.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR

IN HOLDING THAT RESPONDENT WAS ILLEGALLY DISMISSED.

Tropical appealed to the NLRC, which reversed the findings of the labor arbiter in its

Decision dated April 14, 2003, thus:

II.

WHEREFORE, in the light of the foregoing, the assailed

Decision is REVERSED and SET ASIDE. We thereby render
judgment: THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR
IN DISREGARDING THE FINDINGS OF THE NATIONAL LABOR
RELATIONS COMMISSION.[9]

The petition lacks merit.
Tropicals ground for terminating Belga is her alleged concealment of pregnancy. It
argues that such non-disclosure is tantamount to dishonesty and impresses upon
this Court the importance of Belgas position and the gravity of the disruption her
unexpected absence brought to the company. Tropical also charges Belga with
insubordination for refusing to comply with its directives to report for work and to
explain her absence.
Tropical cites the following paragraphs of Article 282 of the Labor Code as legal basis
for terminating Belga:
Article 282. Termination by employer. An employer may
terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in
connection with his work;
....
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative; ....
We have defined misconduct as a transgression of some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment. The misconduct to be serious must
be of such grave and aggravated character and not merely trivial and unimportant.
Such misconduct, however serious, must, nevertheless, be in connection with the
employees work to constitute just cause for his separation. [10]
In the instant case, the alleged misconduct of Belga barely falls within the situation
contemplated by the law. Her absence for 16 days was justified considering that she
had just delivered a child, which can hardly be considered a forbidden act, a
dereliction of duty; much less does it imply wrongful intent on the part of Belga.
Tropical harps on the alleged concealment by Belga of her pregnancy. This
argument, however, begs the question as to how one can conceal a full-term
pregnancy. We agree with respondents position that it can hardly escape notice how
she grows bigger each day. While there may be instances where the pregnancy may
be inconspicuous, it has not been sufficiently proven by Tropical that Belgas case is
such.
Belgas failure to formally inform Tropical of her pregnancy can not be
considered as grave misconduct directly connected to her work as to constitute just
cause for her separation.
The charge of disobedience for Belgas failure to comply with the
memoranda must likewise fail. Disobedience, as a just cause for termination, must
be willful or intentional. Willfulness is characterized by a wrongful and perverse
mental attitude rendering the employees act inconsistent with proper subordination.
[11]
In the instant case, the memoranda were given to Belga two days after she had
given birth. It was thus physically impossible for Belga to report for work and explain
her absence, as ordered.
Tropical avers that Belgas job as Treasury Assistant is a position of responsibility
since she handles vital transactions for the company. It adds that the nature of
Belgas work and the character of her duties involved utmost trust and confidence.
Time and again, we have recognized the right of employers to dismiss employees by managed to transmit to the company the documents she worked on over the

reason of loss of trust and confidence. However, we emphasize that such ground is weekend so that it would not cause any problem for the company.

premised on the fact that the employee concerned holds a position of responsibility

or trust and confidence.[12] In order to constitute a just cause for dismissal, the act All told, we find that the penalty of dismissal was too harsh in light of the

complained of must be work-related such as would show the employee concerned to circumstances obtaining in this case. While it may be true that Belga ought to have
[13]
be unfit to continue working for the employer. More importantly, the loss of trust formally informed the company of her impending maternity leave so as to give the

and confidence must be based on the willful breach of the trust reposed in the latter sufficient time to find a temporary replacement, her termination from

employee by his employer. A breach of trust is willful if it is done intentionally, employment is not commensurate to her lapse in judgment.

knowingly and purposely, without justifiable excuse, as distinguished from an act

done carelessly, thoughtlessly, heedlessly or inadvertently. [14] Even assuming that there was just cause for terminating Belga, her dismissal is

nonetheless invalid for failure of Tropical to observe the twin-notice requirement. The

Belga was an assistant cashier whose primary function was to assist the cashier in March 21, 2001 memorandum merely informed her to report for work and explain

such duties as preparation of deposit slips, provisional receipts, post-dated checks, her absences. The March 30, 2001 memorandum demanded that she report for work

etc. As correctly observed by the Court of Appeals, these functions are essentially and attend a clarificatory conference. Belga received the first memorandum but

clerical. For while ostensibly, the documents that Belga prepares as Assistant allegedly refused to receive the second.

Cashier pertain to her employers property, her work does not call for independent

judgment or discretion. Belga simply prepares the documents as instructed by her In Electro System Industries Corporation v. National Labor Relations Commission,
[16]
superiors subject to the latters verification or approval. Hence, her position cannot we held that, in dismissing an employee, the employer has the burden of proving

be considered as one of responsibility or imbued with trust and confidence. that the worker has been served two notices: (1) one to apprise him of the particular

acts or omissions for which his dismissal is sought, and (2) the other to inform him of

Furthermore, Tropical has not satisfactorily shown how and to what extent it had his employers decision to dismiss him. The first notice must state that the dismissal

suffered damages because of Belgas absences. For while it may be true that the is sought for the act or omission charged against the employee, otherwise the notice

company was caught unprepared and unable to hire a temporary replacement, we cannot be considered sufficient compliance with the rules. It must also inform

are not convinced that Belgas absence for 16 days has wreaked havoc on Tropicals outright that an investigation will be conducted on the charges particularized therein

business as to justify her termination from the company. On the other hand, it is which, if proven, will result to his dismissal. Further, we held that a notation in the

undisputed that Belga has worked for Tropical for 7 years without any blemish on her notice that the employee refused to sign is not sufficient proof that the employer

service record. In fact, the company admitted in its petition that she has rendered attempted to serve the notice to the employee.
[15]
seven (7) years of service in compliance with [the companys] rules. And her

fidelity to her work is evident because even in the midst of an emergency, she An employee who was illegally dismissed from work is entitled to reinstatement

without loss of seniority rights, and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent

computed from the time his compensation was withheld from him up to the time of

his actual reinstatement.[17]Thus, Belga is entitled to be reinstated to her former or

equivalent position and to the payment of full backwages from the time she was

illegally dismissed until her actual reinstatement.

WHEREFORE, the instant petition is DENIED. The July 28, 2004 Decision of the

Court of Appeals in CA-G.R. SP No. 80616 and its December 17, 2004 Resolution

areAFFIRMED in toto.

SO ORDERED.

D E L M O N T E P H I L I P P I N E S , G . R. N O. 1 5 3 4 7 7
INC.,
Pe t i t i o n e r ,
Present:

YNARES-S ANTIAGO, J.,

Chairperson,
- v e r s u s - A U S T R I A - M A RT I N E Z ,
C A L L E J O , S R. , *
CHICO -NAZARIO, and Re s p o n d e n t having failed to appear
N A C H U RA , J J . on September 23, 1994 hearing, another notice of
hearing was sent to her resett ing the investigation
on September 30, 1994. It was again reset to October
LO L I TA V E L A S C O , Pr o m u l g a t e d : 5, 1994.
Re s p o n d e n t . M a r c h 6 , 2 0 0 7
x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x On January 10, 1995, a ft e r hearing, the
peti tioner terminat ed the services of respondent
e ff e c t i v e J a n u a r y 1 6 , 1 9 9 4 d u e t o ex c e s s i v e a b s e n c e s
D E C I S I O N wi thout permission.

AU S T R I A - M A RT I N E Z , J . : Fe e l i n g a g g r i e v e d , r e s p o n d e n t fi l e d a c a s e f o r
illegal dismissal against petitioner asserting that her
dismissal was illegal because she was on the family
way s u ff e r i n g from urinary tract infection, a
B e f o r e t h i s C o u r t i s a Pe t i t i o n f o r C e r t i o r a r i u n d e r Ru l e 4 5 p r e g n a n c y- b o r n e , a t t h e t i m e s h e c o m m i t t e d t h e
alleged absences. She explained that for her absence
seek ing to reverse and set aside the Decision [1] dated July 23, 2001 from work on August 15, 16, 17 & 18, 1994 she had
sent an application for leave to her supervisor,
o f t h e C o u r t o f A p p e a l s ( C A ) i n C A - G . R. S P N o . 5 6 5 7 1 w h i c h a ffi r m e d P r i m a Y b a e z . T h e r e a ft e r , s h e w e n t t o t h e c o m p a n y
hospita l for check-up and was adv ised accordingl y to
t h e D e c i s i o n d a t e d M a y 2 7 , 1 9 9 9 o f t h e N a t i o n a l L a b o r Re l a t i o n s rest in quarters for four (4) days or on August 27 to
30, 1994. Still not feeling well, she failed to work
Commission ( N L RC ) ; and the CA Re s o l u t i o n [ 2 ] d a t e d M a y 7, on September 1, 1994and was again advised two days
of rest in quarters on September 2-3, 1994. Unable to
2 0 0 2 w h i c h d e n i e d t h e p e t i t i o n e r ' s M o t i o n f o r Re c o n s i d e r a t i o n .
r e c o v e r , s h e w e n t t o s e e a n o u t s i d e d o c t o r , D r.
Maril yn Casino, and the latter ordered her to rest for
The facts of the case, as stated by the CA, are as follo ws:
a n o t h e r fi v e ( 5 ) c o n s e c u t i v e d a y s , o r f r o m S e p t e m b e r
5 t o 9 , 1 9 9 4 . S h e d e c l a r e d s h e d i d n o t fi l e t h e
adequate leave of absence because a medical
L o l i t a M . Ve l a s c o ( r e s p o n d e n t ) s t a r t e d w o r k i n g
c e r t i fi c a t e was already s u ffi c i e n t per company
with Del Monte Philippines (petitioner) on October 21,
p o l i c y. O n S e p t e m b e r 1 0 , 1 9 9 4 s h e f a i l e d t o r e p o r t t o
1976 as a seasonal employe e and was regularized
work but sent an application for leave of absence to
o n M a y 1 , 1 9 7 7 . H e r l a t e s t a s s i g n m e n t w a s a s Fi e l d
h e r s u p e r v i s o r , Pr i m a Y b a e z , w h i c h w a s n o t a n y m o r e
L a b o r e r.
accepted.[3]
On June 16, 1987, respondent was wa rned in
writing due to her absences. On May 4, 1991,
respondent , thru a let ter, was again warned in writ ing
On April 13, 1998, the Labor Arbiter dismissed the Complaint
by petitioner about her absences wi thout permission
and a forfeiture of her vacation leave entit lement for for lack of merit. The Labor Arbi ter held that the respondent was an
t h e y e a r 1 9 9 0 - 1 9 9 1 w a s i m p o s e d a g a i n s t h e r.
i n c o r r i g i b l e a b s e n t e e ; t h a t s h e f a i l e d t o fi l e l e a v e s o f a b s e n c e ; t h a t
On September 14, 1992, another wa rning
le tter was sent to respondent regarding her absences her absences in 1986 and 1987 were without permission; that the
wi thout permission during the year 1991-1992. Her
vacation entitlement for the said employment year peti tioner gave the respondent several chances to refo rm herself;
a ff e c t e d w a s c o n s e q u e n t l y f o r f e i t e d .
a n d t h a t t h e r e s p o n d e n t d i d n o t j u s t i fy h e r f a i l u r e t o a p p e a r d u r i n g
In view of the said alleged absences without
permission, on September 17, 1994, a notice of t h e s c h e d u l e d h e a r i n g s a n d f a i l e d t o ex p l a i n h e r a b s e n c e s .
h e a r i n g w a s s e n t t o r e s p o n d e n t n o t i fy i n g h e r o f t h e
c h a r g e s fi l e d a g a i n s t h e r f o r v i o l a t i n g t h e A b s e n c e
Wi t h o u t O ffi c i a l L e a v e r u l e : t h a t i s f o r e xc e s s i v e
absence wi thout permission on August 15-18, 29-31 Re s p o n d e n t appealed to the N L RC . O n M a y 29, 1999, the
and September 1-10, 1994. The hearing was set
on September 23, 1994. N L RC i s s u e d i t s Re s o l u t i o n , t h e d i s p o s i t i v e p o r t i o n o f w h i c h r e a d s :
 WHEREFORE, foregoing considered, the instant narration that she had to bear pains during her absences on
d e c i s i o n i s h e r e b y VA C AT E D a n d a n e w o n e e n t e r e d
declaring the dismissal of complainant as ILLEGAL. In September 21 to 27, 1994 is credible; that she dared not venture
consonance with Art. 279 of the Labor [Code], her
reinstat ement wi th full backwages from the date of through the roads for fear of forest creatures or predators; that the
her te rmination from employment to her actual
reinstat ement is necessaril y decreed. [4] peti tioner is guil ty of unlawfull y discharging respondent on account

of her pregnancy under Artic le 137(2) of the Labor Code; and, that

peti tioners reference to the previous absente eism of respondent is

T h e N L RC h e l d t h a t , u n d e r t h e c o m p a n y r u l e s , t h e e m p l o y e e m a y
m i s p l a c e d b e c a u s e t h e l a t t e r h a d a l r e a d y b e e n p e n a l i z e d t h e r e f o r.
m a ke a s u b s e q u e n t j u s t i fi c a t i o n o f h e r a b s e n t e e i s m , w h i c h s h e w a s

able to do in the instant case; that while it is not disputed that the
Pe t i t i o n e r s M o t i o n f o r Re c o n s i d e r a t i o n w a s d e n i e d o n S e p t e m b e r 3 0 ,
r e s p o n d e n t i n c u r r e d a b s e n c e s e xc e e d i n g s i x ( 6 ) d a y s w i t h i n o n e
1999.
employment year a ground for dismissal under the company rules

the petit ioner actuall y admit ted the fact that the respondent had
The petitioner then appealed to the CA. On July 23, 2001, the CA
been pregnant, hence, negating petitioners assertion that the
promulgated its Decision the dispositiv e portion of which states:
r e s p o n d e n t f a i l e d t o g i v e a n y ex p l a n a t i o n o f h e r a b s e n c e s ; t h a t t h e VIEWED IN THE LIGHT OF ALL THE FOREGOING, the
i n s t a n t p e t i t i o n i s D I S M I S S E D , t h e Re s o l u t i o n s , d a t e d
r e c o r d s b e a r t h e a d m i s s i o n o f p e t i t i o n e r s o ffi c e r o f t h e r e c e i p t o f May 27, 1999 and September 30, 1999 of the National
L a b o r Re l a t i o n s C o m m i s s i o n i n N L RC C A N o . M -
the hospital record show ing the cause of her absences (RIQ advice 003926-98, are hereby AFFIRMED in toto.

or rest-in-quarters) for August 19-20, 1994 which, in turn, could SO ORDERED.[5]

already serve as reference in resol ving the absences on August 15

to 18; that the petitioner further admitt ed that the respondent was I n a ffi r m i n g t h e N L RC , t h e C A h e l d t h a t a b s e n c e s d u e t o a j u s t i fi e d

under RIQ advice on September 2-3, 1994 and yet insisted in cause cannot be a ground for dismissal; that it is undisputed that

i n c l u d i n g t h e s e d a t e s a m o n g r e s p o n d e n t s 1 6 p u r p o r t e d u n ex p l a i n e d the respondent was pregnant at the time she incurred the absences

a b s e n c e s ; t h a t i t i s s u ffi c i e n t n o t i c e f o r t h e p e t i t i o n e r , a p l a i n i n q u e s t i o n ; t h a t t h e c e r t i fi c a t i o n i s s u e d b y a p r i v a t e d o c t o r d u l y

laborer with unsophisticated judgment, to send wo rd to her established this fact; that it was no less than petitioners company

e m p l o y e r t h r o u g h a c o - w o r ke r o n A u g u s t 1 5 t o 1 6 , 1 9 9 4 t h a t s h e doctor who advised the respondent to have rest-in-quarters for four

was frequentl y vomiting; that the sheer distance between d a y s o n a c c o u n t o f a p r e g n a n c y- r e l a t e d s i c k n e s s ; t h a t i t h a d b e e n

respondents home and her workplace made it d i ffi c u l t to send d u l y e s t a b l i s h e d t h a t r e s p o n d e n t fi l e d l e a v e s o f a b s e n c e t h o u g h t h e

forma l notice; that respondent even sent her child of tender age to last had been refused by the company supervisor; that the dismissal

inform her superv isor about her absence on September 5, 1994 due of an employee due to prolonged absence with leave by reason of

to stomach ache, but her child failed to approach the o ffi c e r i l l n e s s d u l y e s t a b l i s h e d b y t h e p r e s e n t a t i o n o f a m e d i c a l c e r t i fi c a t e

b e c a u s e h e r c h i l d f e l t a s h a m e d , i f n o t m o r t i fi e d ; t h a t r e s p o n d e n t s i s n o t j u s t i fi e d ; t h a t i t i s u n d i s p u t e d t h a t r e s p o n d e n t s s i c k n e s s w a s
p r e g n a n c y- r e l a t e d ; t h a t u n d e r A r t i c l e 1 3 7 ( 2 ) o f t h e L a b o r C o d e , t h e peti tioner discharged the respondent on account of pregnancy, a

peti tioner commit ted a prohibited act in discharging a woman on prohibited act.

a c c o u n t o f h e r p r e g n a n c y.

The pet itioner posits the fol lowing arguments: (a) The evidence

On May 7, 2002, the CA denied petitioners Motion for p r o ff e r e d by the respondent, to wit: (1) the Discharge

Re c o n s i d e r a t i o n . Summary indicating that she had been admitted to the Phillips

Memorial Hospital on August 23, 1994 and discharged on August 26,

H e n c e , t h e i n s t a n t Pe t i t i o n r a i s i n g t h e f o l l o w i n g i s s u e s : 1994, and that she had been advised to rest in quarters for four

days from August 27, 1994 to August 30, 1994, and (2) the Medical
I.
C e r t i fi c a t e i s s u e d b y D r. M a r i l y n M . C a s i n o s t a t i n g t h a t r e s p o n d e n t
THE C O U RT OF APPEALS S E R I O U S LY ERRED IN
C O N S I D E R I N G R E S P O N D E N T S E XC E S S I V E AW O P s A S had sought consultation on September 4, 2002 because of spasm in
J U S T I F I E D S I M P LY O N A C C O U N T O F H E R P R E G N A N C Y.
II. t h e l e f t i l i a c r e g i o n , a n d w a s a d v i s e d t o r e s t f o r fi v e d a y s ( f r o m

T H E C O U RT O F A P P E A L S S E R I O U S LY E R R E D I N N O T September 4, 1994 up to September 8, 1994), due to urinary tract

C O N S I D E R I N G T H AT R E S P O N D E N T S L AT E S T S T R I N G O F
ABSENCES INCURRED WITHOUT ANY PRIOR infect ion, all in all establish respondents sickness only from August
PE RMISSION, AND AS ABOVE SHOWN, WI THOUT ANY
23, 1994 up to August 30, 1994 and from September 4, 1994 up to
VA L I D J U S T I F I C AT I O N , TA K E N T O G E T H E R W I T H H E R
D A M A G I N G AW O P H I S T O RY , E S TA B L I S H E D H E R G R O S S
September 8, 1994. In other words, respondent was absent wi thout
A N D H A B I T U A L N E G L E C T O F D U T I E S , A J U S T A N D VA L I D
GROUND FOR DISMISSAL. permission on sev eral other days which were not supported by any
III. o t h e r p r o o f o f i l l n e s s , s p e c i fi c a l l y , o n A u g u s t 1 5 , 1 6 , 1 7 , 1 8 , 3 1 ,
THE C O U RT OR APPEALS S E R I O U S LY ERRED IN 1994 and September 1, 2, 3, 9, and 10, 1994, and, hence, she is
H O L D I N G T H AT R E S P O N D E N T S D I S M I S S A L WA S I N
V I O L AT I O N OF A RT I C L E 137 (PROHIBITING AN guilty of ten u n j u s t i fi e d absences; (b) Pe r F i l fl e x I n d u s t r i a l and
E M P LOY E R T O D I S C H A R G E A N E M P LOY E E O N A C C O U N T
OF HER PREGNANCY) . M a n u f a c t u r i n g C o . v. N a t i o n a l L a b o r R e l a t i o n s C o m m i s s i o n ( F i l fl e x ) ,

I V. [7]
i f t h e m e d i c a l c e r t i fi c a t e f a i l s t o r e f e r t o t h e s p e c i fi c p e r i o d o f t h e

THE C O U RT OF APPEALS S E R I O U S LY ERRED IN employe es absence, then such absences, attributable to chronic
AWA R D I N G FULL B A C KWA G E S IN FAV O R OF
RESPONDENT N O T W I T H S TA N D I N G PETITIONERS asthmatic bronchi tis, are not supported by competent proof and,
E V I D E N T G O O D FA I T H . [ 6 ]
h e n c e , t h e y a r e u n j u s t i fi e d . B y p a r i t y o f r e a s o n i n g , i n t h e a b s e n c e

The essential question is whe ther the employment of respondent of evidence indicating any p r e g n a n c y- b o r n e illness outside the

h a d b e e n v a l i d l y t e r m i n a t e d o n t h e g r o u n d o f e xc e s s i v e a b s e n c e s p e r i o d s t a t e d i n r e s p o n d e n t s m e d i c a l c e r t i fi c a t e , s u c h i l l n e s s o u g h t

wi thout permission. Corollary to this is the question of whether the not to be considered as an acceptable e xc u s e for respondents

e x c e s s i v e a b s e n c e s w i t h o u t l e a v e ; ( c ) Re s p o n d e n t s l a t e s t s t r i n g o f

absences, t a ke n together with her long history of absenteeism

wi thout permission, established her gross and habitual neglec t of was pregnant and s u ff e r e d from rela ted ailments. It would be

duties, as established by jurisprudence; (d) The respondent was unreasonable to isolat e such condit ion strictl y to the dates stat ed

dismissed not by reason of her pregnancy but on account of her i n t h e M e d i c a l C e r t i fi c a t e o r t h e D i s c h a r g e S u m m a r y. I t c a n b e

gross and habitual neglect of duties. In other wo rds, her pregnancy safely assumed that the absences that are not covered by, but

had no bearing on the decision to te rminate her employment; and, which none theless approximate , the dates stated in the Discharge

( e ) H e r s t a t e o f p r e g n a n c y p e r s e c o u l d n o t ex c u s e h e r f r o m fi l i n g Summary and Medical C e r t i fi c a t e , are due to the continuing

prior notice for her absence. condition of pregnancy and related illnesses, and, hence, are

j u s t i fi e d a b s e n c e s .

Pe t i t i o n e r s a r g u m e n t s a r e w i t h o u t m e r i t .

A s t h e C A a n d t h e N L RC c o r r e c t l y n o t e d , i t i s n o t d i s p u t e d

F i r s t . T h e F i l fl e x I n d u s t r i a l and Manufacturing Co. case is not that respondent was pregnant and that she was s u ff e r i n g from

applicable, principall y because the nature and gravit y of the illness urinary trac t infec tion, and that her absences we re due to such

i n v o l v e d i n t h a t c a s e c h r o n i c a s t h m a t i c b r o n c h i t i s a r e d i ff e r e n t f r o m f a c t s . T h e p e t i t i o n e r a d m i t s t h e s e f a c t s i n i t s Pe t i t i o n f o r Re v i e w.
[8]
the conditions that are present in the instant case, which And, as the CA aptly held, it was no less than the company doctor

is pregnancy and its related illnesses. who advised the respondent to have rest-in-quarters for four days

o n a c c o u n t o f a p r e g n a n c y- r e l a t e d s i c k n e s s . [ 9 ]

T h e C o u r t t a ke s j u d i c i a l n o t i c e o f t h e f a c t t h a t t h e c o n d i t i o n

of asthmatic bronchi tis may be intermittent, in contrast to O n t h i s n o t e , t h i s C o u r t u p h o l d s a n d a d o p t s t h e fi n d i n g o f

pregnancy which is a continuing condition accompanied by various t h e N L RC , t h u s :

symptoms and relat ed il lnesses. Hence, as to the form er, if the I n t h i s j u r i s d i c t i o n t a r d i n e s s a n d a b s e n t e e i s m , l i ke

abandonment, are recognized forms of neglec t of
m e d i c a l c e r t i fi c a t e o r o t h e r p r o o f p r o ff e r e d b y t h e w o r ke r f a i l s t o d u t i e s , t h e ex i s t e n c e o f w h i c h j u s t i fy t h e d i s m i s s a l o f
t h e e r r i n g e m p l o y e e . Re s p o n d e n t s r u l e p e n a l i z i n g
correspond with the dates of absence, then it can be reasonabl y wi th discharge any employee who has incurred six (6)
or more absences without permission or subsequent
concluded that, absent any other proof, such absences are j u s t i fi c a t i o n i s a d m i t t e d l y w i t h i n t h e p u r v i e w o f t h e
foregoing standard.
u n j u s t i fi e d . T h i s i s t h e r u l i n g i n F i l fl e x w h i c h c a n n o t b e a p p l i e d i n a
However, while it is not disputed that complainant
straight-hand fashion in cases of pregnancy which is a long-term i n c u r r e d a b s e n c e s ex c e e d i n g s i x ( 6 ) d a y s a s s h e
actuall y failed to report for work from August 15-18,
conditionaccompanied by an assortment of related illnesses.
23-26, 29-31, September 1-3, 5-10, 12-17, 21-24, 26-
30, and October 1-3, 1994, her being pregnant at
the time these absences were incurred is not
In this case, by the measure of substantial evidence , what is questioned and is even admitted by
respond ent. It thus puzzles us why respondent
c o n t r o l l i n g i s t h e fi n d i n g o f t h e N L RC a n d t h e C A t h a t r e s p o n d e n t asserts complainant failed to explain satisfactorily
her absences on August 15-18, 29-31, September 1-3
and 5-10, 1994, yet reconsidered the rest of her
 absences for being cove red w ith rest-in-quarters
(RIQ) advice from its hospital personnel when this an employer to discharge an employee on account of the latt ers
advice was unquestionably issued in consideration of
the physiological and emotional changes complainant, p r e g n a n c y. [ 1 1 ]
a conceiving mother, naturally developed. Medical
and health reports abundantly disclose that
during the fi r s t trimester of p r e g n a n c y, Articl e 137 of the Labor Code provides:
expectant mothers are plagued with morning
sickness, frequent urination, vomiting and
fatigue all of which complainant was similarly Art. 137. Prohibited acts. It shall be unlawful
plagued with. Union o ffi c i a l IBB Lesnas for any employe r:
observation on complainant being [sic]
apparently not feeling well during the ( 1 ) To d e n y a n y w o m a n e m p l o y e e t h e b e n e fi t s
investigation conducted by respondent on provided for in this Chapter or to discharge any
October 5, 1994 even remains in the records of woman employed by him for the purpose of
s a i d p r o c e e d i n g s . Fo r r e s p o n d e n t t o i s o l a t e t h e p r e v e n t i n g h e r f r o m e n j o y i n g a n y o f t h e b e n e fi t s
absences of complainant in August and mid- provided under this Code;
S e p t e m b e r, 1 9 9 4 f r o m t h e a b s e n c e s s h e i n c u r r e d
later in said month without submitting any ( 2 ) To d i s c h a r g e s u c h w o m a n o n a c c o u n t o f
evidence that these were due to causes not in h e r p r e g n a n c y, w h i l e o n l e a v e o r i n c o n fi n e m e n t
manner associated with her [ ] condition renders due to her pregnancy; or
its j u s t i fi c a t i o n of complainants dismissal
clearly not convincing under the circumstances. ( 3 ) To d i s c h a r g e o r r e f u s e t h e a d m i s s i o n o f
such woman upon returning to her work for fear that
Despite contrary declaration, the records bear she may again be pregnant. (Emphasis supplied)
the admission of respondents P/A North
S u p e r v i s o r, P B Y b a n e z , o f h e r r e c e i p t o f t h e
hospital record showing complainants RIQ advice
for August 19-20, 1994 which could already Second. The petitioner stresses that many women go through
serve as respondents reference in resolving the
latters absences on August 15 to 18, pregnancy and yet manage to submit prior notices to their
1994. Respondent further admitted complainant
was under RIQ advice on September 2-3, 1994, employer , especiall y if there is no ev idence on reco rd indicating a
yet, insisted in including these dates among her
condition of such gravity as to preclude e ff o r t s at n o t i fy i n g
16 purported unexplained absences justifying
termination of her employment.[10] (emphasis
peti tioner of her absence from work in series. [12] But it must be
supplied)
emphasized that under petitioners company rules, absences may be

subsequently j u s t i fi e d . [ 1 3 ] T h e Court fi n d s no cogent reason to

Pe t i t i o n e r s c o n t e n t i o n t h a t t h e c a u s e f o r t h e d i s m i s s a l w a s g r o s s d i s t u r b t h e fi n d i n g s o f t h e N L RC a n d t h e C A t h a t t h e r e s p o n d e n t w a s
and habitual neglect unrela ted to her state of pregnancy is able to subsequently justify her absences in accordance with
unpersuasive. company rules and polic y; that the respondent was pregnant at the

tim e she incurred the absences; that this fact of pregnancy and its
The Court agrees with the CA in concluding that respondents rela ted illnesses had been duly proven through substantial
sickness was p r e g n a n c y- r e l a t e d and, therefore, the petitioner e v i d e n c e ; t h a t t h e r e s p o n d e n t a t t e m p t e d t o fi l e l e a v e s o f a b s e n c e
cannot te rminate respondents services because in doing so, but the peti tioners supervisor refused to receiv e them; that she
p e t i t i o n e r w i l l , i n e ff e c t , b e v i o l a t i n g t h e L a b o r C o d e w h i c h p r o h i b i t s c o u l d n o t h a v e fi l e d p r i o r l e a v e s d u e t o h e r c o n t i n u i n g c o n d i t i o n ;
and that the petitioner, in the last analysis, dismissed the

respondent on account of her pregnancy, a prohibited act. No pronouncement as to costs.

Third. Pe t i t i o n e r s rel iance on the jurisprudential rule that the SO ORDERED.

t o t a l i t y o f t h e i n f r a c t i o n s o f a n e m p l o y e e m a y b e t a ke n i n t o a c c o u n t

to j u s t i fy the dismissal, is tenuous considering the particular

c i r c u m s t a n c e s o b t a i n i n g i n t h e p r e s e n t c a s e . Pe t i t i o n e r p u t s m u c h

emphasis on respondents long history of unauthorized absences

committ ed severa l y ears beforehand. How ever , pet itioner cannot

use these previous infractions to lay down a pat tern of absenteeism

or habi tual disregard of company rules to justify the dismissal of

respondent . The undeniable fact is that during her complained

a b s e n c e s i n 1 9 9 4 , r e s p o n d e n t w a s p r e g n a n t a n d s u ff e r e d r e l a t e d

il lnesses. Again, it must be stressed that respondents discharge by

reason of absences caused by her pregnancy is covered by the

prohibition under the Labor Code. Since her last string of absences

i s j u s t i fi a b l e a n d h a d b e e n s u b s e q u e n t l y ex p l a i n e d , t h e p e t i t i o n e r

had no legal basis in considering these absences together with her

prior infract ions as gross and habitual neglect .

The Court is convinced that the petitioner te rminated the services

of respondent on account of her pregnancy which j u s t i fi e d her

absences and, thus, committed a prohibited act rendering the

dismissal illegal.

I n fi n e , t h e C o u r t fi n d s n o c o g e n t r e a s o n t o d i s t u r b t h e fi n d i n g s o f

t h e C A a n d t h e N L RC .

WHEREFORE, the petition is DENIED for lack of merit. The

Decision dated July 23, 2001 and the Re s o l u t i o n dated May 7,

2002 of the Court of Appeals are AFFIRMED.

 G.R. No. 187417, February 24, 2016

CHRISTINE JOY CAPIN-CADIZ, Petitioner, v. BRENT HOSPITAL AND COLLEGES,

INC.,Respondent.

DECISION

REYES, J.:

This is a petition for review on certiorari1 under Rule 45 of the Rules of Court
assailing the Resolutions dated July 22, 20082 and February 24, 20093 of the Court of
Appeals (CA) in CA-G.R. SP No. 02373-MIN, which dismissed the petition filed by
petitioner Christine Joy Capin-Cadiz (Cadiz) on the following grounds: (1) incomplete
statement of material dates; (2) failure to attach registry receipts; and (3) failure to
indicate the place of issue of counsel's Professional Tax Receipt (PTR) and Integrated
Bar of the Philippines (IBP) official receipts.
Antecedent Facts

Cadiz was the Human Resource Officer of respondent Brent Hospital and Colleges,
Inc. (Brent) at the time of her indefinite suspension from employment in 2006. The
cause of suspension was Cadiz's Unprofessionalism and Unethical Behavior Resulting
to Unwed Pregnancy. It appears that Cadiz became pregnant out of wedlock, and
Brent imposed the suspension until such time that she marries her boyfriend in
accordance with law.

Cadiz then filed with the Labor Arbiter (LA) a complaint for Unfair Labor Practice,
Constructive Dismissal, Non-Payment of Wages and Damages with prayer for
Reinstatement.4
Ruling of the Labor Tribunals

In its Decision5 dated April 12, 2007, the LA found that Cadiz's indefinite suspension
amounted to a constructive dismissal; nevertheless, the LA ruled that Cadiz was not
illegally dismissed as there was just cause for her dismissal, that is, she engaged in
premarital sexual relations with her boyfriend resulting in a pregnancy out of
wedlock.6 The LA further stated that her "immoral conduct x x x [was] magnified as
serious misconduct not only by heir getting pregnant as a result thereof before and
without marriage, but more than that, also by the fact that Brent is an institution of
the Episcopal Church in the Philippines operating both a hospital and college where
[Cadiz] was employed."7 The LA also ruled that she was not entitled to reinstatement
"at least until she marries her boyfriend," to backwages and vacation/sick leave pay.
Brent, however, manifested that it was willing to pay her 1311 month pay. The
dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered, ordering [Brent] to pay [Cadiz] 13th
month pay in the sum of Seven Thousand Nine Hundred Seventy & 11/100 Pesos
(P7,970.11).

All other charges and claims are hereby dismissed for lack of merit.

SO ORDERED.8ChanRoblesVirtualawlibrary

Cadiz appealed to the National Labor Relations Commission (NLRC), which affirmed
the LA decision in its Resolution 9 dated December 10, 2007. Her motion for
reconsideration having been denied by the NLRC in its Resolution 10 dated February
29, 2008, Cadiz elevated her case to the CA on petition forcertiorari under Rule 65.
Ruling of the CA
The CA, however, dismissed her petition outright due to technical defects in the
petition: (1) incomplete statement of material dates; (2) failure to attach registry
receipts; and (3) failure to indicate the place of issue of counsel's PTR and IBP official
receipts.11 Cadiz sought reconsideration of the assailed CA Resolution dated July 22,
2008 but it was denied in the assailed Resolution dated February 24, 2009. 12 The CA
further ruled that "a perusal of the petition will reveal that public respondent NLRC
committed no grave abuse of discretion amounting to lack or excess of jurisdiction x
x x holding [Cadiz's] dismissal from employment valid." 13
Hence, the present petition. Cadiz argues that -
I the CA under Rule 65, viz, "the petition shall x x x indicate the material dates
THE HONORABLE [NLRC] GRAVELY ABUSED ITS DISCRETION WHEN IT HELD TFIAT
[CADIZ'S] IMPREGNATION OUTSIDE OF WEDLOCK IS A GROUND FOR THE
TERMINATION OF [CADIZ'S] EMPLOYMENT14
II
THE [NLRC] COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT UPHELD THE
DISMISSAL OF [CADIZ] ON THE GROUND THAT THE INDEFINITE SUSPENSION WAS
VALID AND REQUIRED [CADIZ] TO FIRST ENTER INTO MARRIAGE BEFORE SHE CAN
BE ADMITTED BACK TO HER EMPLOYMENT15
III
RESPONDENT [NLRC] GRAVELY ABUSED ITS DISCRETION WHEN IT DENIED [CADIZ'S]
CLAIM FOR BACKWAGES, ALLOWANCES, SICK LEAVE PAY, MATERNITY PAY AND
MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES16
IV
THE [CA] MISPLACED APPLICATION OF THE MATERIAL DATA RULE RESULTING TO
GRAVE ABUSE OF DISCRETION WHEN IT DISMISSED THE APPEAL 17
Cadiz contends, among others, that getting pregnant outside of wedlock is not
grossly immoral, especially when both partners do not have any legal impediment to
marry. Cadiz surmises that the reason for her suspension was not because of her
relationship with her then boyfriend but because of the resulting pregnancy. Cadiz
also lambasts Brent's condition for her reinstatement - that she gets married to her
boyfriend - saying that this violates the stipulation against marriage under Article
136 of the Labor Code. Finally, Cadiz contends that there was substantial compliance
with the rules of procedure, and the CA should not have dismissed the petition. 18
Brent, meanwhile, adopts and reiterates its position before the LA and the NLRC that
Cadiz's arguments are irrational and out of context. Brent argues, among others,
that for Cadiz to limit acts of immorality only to extra-marital affairs is to "change
the norms, beliefs, teachings and practices of BRENT as a Church institution of the x
x x Episcopal Church in the Philippines."19
Ruling of the Court
Ordinarily, the Court will simply gloss over the arguments raised by Cadiz, given that
the main matter dealt with by the CA were the infirmities found in the petition and
which caused the dismissal of her case before it. In view, however, of the
significance of the issues involved in Cadiz's dismissal from employment, the Court
will resolve the petition including the substantial grounds raised herein.
The issue to be resolved is whether the CA committed a reversible error in ruling
that: (1) Cadiz's petition is dismissible on ground of technical deficiencies; and (2)
the NLRC did not commit grave abuse of discretion in upholding her dismissal from
employment.
Rules of procedure are mere
tools designed to facilitate the
attainment of justice
In dismissing outright Cadiz's petition, the CA found the following defects: (1)
incomplete statement of material dates; (2) failure to attach registry receipts; and
(3) failure to indicate the place of issue of counsel's PTR and IBP official receipts.
Rule 46, Section 3 of the Rules of Court states the contents of a petition filed with
showing when notice of the judgment or final order or resolution subject thereof was
received, when a motion for new trial or reconsideration, if any, was filed and when
notice of the denial thereof was received." The rationale for this is to enable the CA
to determine whether the petition was filed within the period fixed in the
rules.20Cadiz's failure to state the date of receipt of the copy of the NLRC decision,
however, is not fatal to her case since the more important material date which must
be duly alleged in a petition is the date of receipt of the resolution of denial of the
motion for reconsideration,21 which she has duly complied with.22
The CA also dismissed the petition for failure to attach the registry receipt in the
affidavit of service.23 Cadiz points out, on the other hand, that the registry receipt
number was indicated in the petition and this constitutes substantial compliance
with the requirement. What the rule requires, however, is that the registry receipt
must be appended to the paper being served.24 Clearly, mere indication of the
registry receipt numbers will not suffice. In fact, the absence of the registry receipts
amounts to lack of proof of service.25 Nevertheless, despite this defect, the Court
finds that the ends of substantial justice would be better served by relaxing the
application of technical rules of procedure.26 With regard to counsel's failure to
indicate the place where the IBP and PTR receipts were issued, there was substantial
compliance with the requirement since it was indicated in the verification and
certification of non-forum shopping, as correctly argued by Cadiz's
lawyer.27cralawred
Time and again, the Court has emphasized that rules of procedure are designed to
secure substantial justice. These are mere tools to expedite the decision or
resolution of cases and if their strict and rigid application would frustrate rather than
promote substantial justice, then it must be avoided. 28
Immorality as a just cause for
termination of employment
Both the LA and the NLRC upheld Cadiz's dismissal as. one attended with just cause.
The LA, while ruling that Cadiz's indefinite suspension was tantamount to a
constructive dismissal, nevertheless found that there was just cause for her
dismissal. According to the LA, "there was just cause therefor, consisting in her
engaging in premarital sexual relations with Carl Cadiz, allegedly her boyfriend,
resulting in her becoming pregnant out of wedlock."29 The LA deemed said act to be
immoral, which was punishable by dismissal under Brent's rules and which likewise
constituted serious misconduct under Article 282(a) of the Labor Code. The LA also
opined that since Cadiz was Brent's ITuman Resource Officer in charge of
implementing its rules against immoral conduct, she should have been the "epitome
of proper conduct."30 The LA ruled:
[Cadiz's] immoral conduct by having premarital sexual relations with her alleged boy
friend, a former Brent worker and her co-employee, is magnified as serious
misconduct not only by her getting pregnant as a result thereof before and without
marriage, but more than that, also by the fact that Brent is an institution of the
Episcopal Church in the Philippines xxx committed to "developing competent and
dedicated professionals xxx and in providing excellent medical and other health
services to the community for the Glory of God and Service to Humanity." x x x As if
these were not enough, [Cadiz] was Brent's Human Resource Officer charged with,
among others, implementing the rules of Brent against immoral conduct, including
premarital sexual relations, or fornication xxx. She should have been the epitome of
proper conduct, but miserably failed. She herself engaged in premarital sexual
relations, which surely scandalized the Brent community, x x x. 31
The NLRC, for its part, sustained the LA's conclusion.
The Court, however, cannot subscribe to the labor tribunals' conclusions.
Admittedly, one of the grounds for disciplinary action under Brent's policies is
immorality, which is punishable by dismissal at first offense32 Brent's Policy Manual
provides:
CATEGORY IV
In accordance with Republic Act No. 1052,33 the following are just cause for
terminating an employment of an employee without a definite period:
xxxx
2. Serious misconduct or willful disobedience by the employee of the orders of his
employer or representative in connection with his work, such as, but not limited to
the following:
chanRoblesvirtualLawlibrary
xxxx
b. Commission of immoral conduct or indecency within the company premises, such
as an act of lasciviousness or any act which is sinful and vulgar in nature.
c. Immorality, concubinage, bigamy.34ChanRoblesVirtualawlibrary
Its Employee's Manual of Policies, meanwhile, enumerates "[a]cts of immorality such
as scandalous behaviour, acts of lasciviousness against any person (patient, visitors,
co-workers) within hospital premises"35 as a ground for discipline and discharge.
Brent also relied on Section 94 of the Manual of Regulations for Private Schools
(MRPS), which lists "disgraceful or immoral conduct" as a cause for terminating
employment.36
Thus, the question that must be resolved is whether Cadiz's premarital relations with
her boyfriend and the resulting pregnancy out of wedlock constitute immorality. To
resolve this, the Court makes reference to the recently promulgated case of Cheryll
Santos Lens v. St. Scholastica 's College Westgrove and/or Sr. Edna Quiambao, OSB 37
Leus involved the same personal circumstances as the case at bench, albeit the
employer was a Catholic and sectarian educational institution and the petitioner,
Cheryl 1 Santos Leus (Leus), worked as an assistant to the school's Director of the
Lay Apostolate and Community Outreach Directorate. Leus was dismissed from
employment by the school for having borne a child out of wedlock. The Court ruled
in Leus that the determination of whether a conduct is disgraceful or immoral
involves a two-step process: first, a consideration of the totality of the
circumstances surrounding the conduct; and second, an assessment of the said
circumstances vis-a-vis the prevailing norms of conduct, i.e., what the society
generally considers moral and respectable.
In this case, the surrounding facts leading to Cadiz's dismissal are straightforward -
she was employed as a human resources officer in an educational and medical
institution of the Episcopal Church of the Philippines; she and her boyfriend at that
time were both single; they engaged in premarital sexual relations, which resulted
into pregnancy. The labor tribunals characterized these as constituting disgraceful or
immoral conduct. They also sweepingly concluded that as Human Resource Officer,
Cadiz should have been the epitome of proper conduct and her indiscretion "surely
scandalized the Brent community."38
The foregoing circumstances, however, do not readily equate to disgraceful and
immoral conduct. Brent's Policy Manual and Employee's Manual of Policies do not
define what constitutes immorality; it simply stated immorality as a ground for
disciplinary action. Instead, Brent erroneously relied on the standard dictionary
definition of fornication as a form of illicit relation and proceeded to conclude that
Cadiz's acts fell under such classification, thus constituting immorality. 39
Jurisprudence has already set the standard of morality with which an act should be
gauged - it is public and secular, not religious. 40 Whether a conduct is considered
disgraceful or immoral should be made in accordance with the prevailing norms of
conduct, which, as stated in Leus, refer to those conducts which are proscribed
because they are detrimental to conditions upon which depend the existence
and progress of human society. The fact that a particular act does not conform
to the traditional moral views of a certain sectarian institution is not sufficient
reason to qualify such act as immoral unless it, likewise, does not conform to public
and secular standards. More importantly, there must be substantial evidence to
establish that premarital sexual relations and pregnancy out of wedlock is
considered disgraceful or immoral.41
The totality of the circumstances of this case does not justify the conclusion that
Cadiz committed acts of immorality. Similar to Leus, Cadiz and her boyfriend were
both single and had no legal impediment to marry at the time she committed the
alleged immoral conduct. In fact, they eventually married on April 15, 2008. 42 Aside
from these, the labor tribunals' respective conclusion that Cadiz's "indiscretion"
"scandalized the Brent community" is speculative, at most, and there is no proof
adduced by Brent to support such sweeping conclusion. Even Brent admitted that it
came to know of Cadiz's "situation" only when her pregnancy became
manifest.43 Brent also conceded that "[a]t the time [Cadiz] and Carl R. Cadiz were
just carrying on their boyfriend-girlfriend relationship, there was no knowledge or
evidence by [Brent] that they were engaged also in premarital sex." 44 This only goes
to show that Cadiz did not flaunt her premarital relations with her boyfriend and it
was not carried on under scandalous or disgraceful circumstances. As declared in
Leus, "there is no law which penalizes an unmarried mother by reason of her sexual
conduct or proscribes the consensual sexual activity between two unmarried
persons; that neither does such situation contravene[s] any fundamental state
policy enshrined in the Constitution." 45 The fact that Brent is a sectarian institution
does not automatically subject Cadiz to its religious standard of morality absent an
express statement in its manual of personnel policy and regulations, prescribing
such religious standard as gauge as these regulations create the obligation on both
the employee and the employer to abide by the same.46
Brent, likewise, cannot resort to the MRPS because the Court already stressed in
Leus that "premarital sexual relations between two consenting adults who have no
impediment to marry each other, and, consequently, conceiving a child out of
wedlock, gauged from a purely public and secular view of morality, does not amount
to a disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS." 47
Marriage as a condition for reinstatement
The doctrine of management prerogative gives an employer the right to "regulate,
according to his own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, the time, place and manner of work,
work supervision, transfer of employees, lay-off of workers, and discipline, dismissal,
and recall of employees."48 In this case, Brent imposed on Cadiz the condition that
she subsequently contract marriage with her then boyfriend for her to be reinstated.
According to Brent, this is "in consonance with the policy against encouraging illicit
or common-law relations that would subvert the sacrament of marriage." 49
Statutory law is replete with legislation protecting labor and promoting equal
opportunity in employment. No less than the 1987 Constitution mandates that the
"State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all."50 The Labor Code of the Philippines, meanwhile, provides:
Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require
as a condition of employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely
by reason of her marriage.
With particular regard to women, Republic Act No. 9710 or the Magna Carta of
Women51 protects women against discrimination in all matters relating to marriage
and family relations, including theright to choose freely a spouse and to enter
into marriage only with their free and full consent.52
Weighed against these safeguards, it becomes apparent that Brent's condition is
coercive, oppressive and discriminatory. There is no rhyme or reason for it. It forces
Cadiz to marry for economic reasons and deprives her of the freedom to choose her
status, which is a privilege that inheres in her as an intangible and inalienable
right.53 While a marriage or no-marriage qualification may be justified as a "bona
fide occupational qualification," Brent must prove two factors necessitating its
imposition, viz: (1) that the employment qualification is reasonably related to the
essential operation of the job involved; and (2) that there is a factual basis for
believing that all or substantially all persons meeting the qualification would be
unable to properly perform the duties of the job.54 Brent has not shown the presence
of neither of these factors. Perforce, the Court cannot uphold the validity of said
condition.
Given the foregoing, Cadiz, therefore, is entitled to reinstatement without loss of
seniority rights, and payment of backwages computed from the time compensation
was withheld up to the date of actual reinstatement. Where reinstatement is no
longer viable as an option, separation pay should be awarded as an alternative and
as a form of financial assistance.55 In the computation of separation pay, the Court
stresses that it should not go beyond the date an employee was deemed to
have been actually separated from employment, or beyond the date when
reinstatement was rendered impossible.56 In this case, the records do not show
whether Cadiz already severed her employment with Brent or whether she is
gainfully employed elsewhere; thus, the computation of separation pay shall be
pegged based on the findings that she was employed on August 16, 2002, on her
own admission in her complaint that she was dismissed on November 17, 2006, and
that she was earning a salary of P9,108.70 per month, 57 which shall then be
computed at a rate of one (1) month salary for every year of service, 58 as follows:
Monthly salary P9,108.70
multiplied by number of years x
in service (Aug 02 to Nov 06) 4
P36,434.80
The Court also finds that Cadiz is only entitled to limited backwages. Generally, the
computation of backwages is reckoned from the date of illegal dismissal until actual
reinstatement.59 In case separation pay is ordered in lieu of reinstatement or
reinstatement is waived by the employee, backwages is computed from the time of
dismissal until the finality of the decision ordering separation pay.60 Jurisprudence
further clarified that the period for computing the backwages during the period of
appeal should end on the date that a higher court reversed the labor arbitration
ruling of illegal dismissal.61 If applied in Cadiz's case, then the computation of
backwages should be from November 17, 2006, which was the time of her illegal
dismissal, until the date of promulgation of this decision. Nevertheless, the Court
has also recognized that the constitutional policy of providing full protection to labor
is not intended to oppress or destroy management. 62 The Court notes that at the
time of Cadiz's indefinite suspension from employment, Leus was yet to be decided
by the Court. Moreover, Brent was acting in good faith and on its honest belief that
Cadiz's pregnancy out of wedlock constituted immorality. Thus, fairness and equity
dictate that the award of backwages shall only be equivalent to one (1) year or
P109,304.40, computed as follows:
Monthly salary P9,108.70
multiplied by one year x x
or 12 months 12
P109,304.40
Finally, with regard to Cadiz's prayer for moral and exemplary damages, the Court
finds the same without merit. A finding of illegal dismissal, by itself, does not
establish bad faith to entitle an employee to moral damages.63 Absent clear and
convincing evidence showing that Cadiz's dismissal from Brent's employ had been
carried out in an arbitrary, capricious and malicious manner, moral and exemplary
damages cannot be awarded. The Court nevertheless grants the award of attorney's
fees in the amount often percent (10%) of the total monetary award, Cadiz having
been forced to litigate in order to seek redress of her grievances. 64
WHEREFORE, the petition is GRANTED. The Resolutions dated July 22, 2008 and
February 24, 2009 of the Court of Appeals in CA-G.R. SP No. 02373-M1N
are REVERSED and SET ASIDE, and a NEW ONE ENTERED finding petitioner
Christine Joy Capin-Cadiz to have been dismissed without just cause.
Respondent Brent Hospital and Colleges, Inc. is hereby ORDERED TO PAY petitioner
Christine Joy Capin-Cadiz:
(1) One Hundred Nine Thousand Three Hundred Four Pesos and 40/100
(P109,304.40) as backwages;
(2) Thirty-Six Thousand Four Hundred Thirty-Four Pesos and 80/100 (P36,434.80) as
separation pay; and
(3) Attorney's fees equivalent to ten percent (10%) of the total award.

The monetary awards granted shall earn legal interest at the rate of six percent
(6%) per annumfrom the date of the finality of this Decision until fully paid.

SO ORDERED

Velasco, Jr., (Chairperson), Peralta, Perez, Reyes, and Jardeleza, JJ., concu

G.R. No. 187226, January 28, 2015

CHERYLL SANTOS LEUS, Petitioner, v. ST. SCHOLASTICAS COLLEGE

WESTGROVE AND/OR SR. EDNA QUIAMBAO, OSB, Respondents.

DECISION

REYES, J.:
Cheryll Santos Leus (petitioner) was hired by St. Scholasticas College Westgrove
(SSCW), a Catholic educational institution, as a non-teaching personnel, engaged in
pre-marital sexual relations, got pregnant out of wedlock, married the father of her
child, and was dismissed by SSCW, in that order. The question that has to be
resolved is whether the petitioners conduct constitutes a ground for her dismissal.

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of
Court seeking to annul and set aside the Decision 1 dated September 24, 2008 and
Resolution2 dated March 2, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP
No. 100188, which affirmed the Resolutions dated February 28, 2007 3 and May 21,
20074 of the National Labor Relations Commission (NLRC) in NLRC CA No. 049222-
06.
The Facts
SSCW is a catholic and sectarian educational institution in Silang, Cavite. In May
2001, SSCW hired the petitioner as an Assistant to SSCWs Director of the Lay
Apostolate and Community Outreach Directorate.
Sometime in 2003, the petitioner and her boyfriend conceived a child out of
wedlock. When SSCW learned of the petitioners pregnancy, Sr. Edna Quiambao (Sr.
Quiambao), SSCWs Directress, advised her to file a resignation letter effective June
1, 2003. In response, the petitioner informed Sr. Quiambao that she would not resign
from her employment just because she got pregnant without the benefit of
marriage.5chanRoblesvirtualLawlibrary
On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain in writing
why she should not be dismissed for engaging in pre-marital sexual relations and
getting pregnant as a result thereof, which amounts to serious misconduct and
conduct unbecoming of an employee of a Catholic
school.6chanRoblesvirtualLawlibrary
In a letter7 dated May 31, 2003, the petitioner explained that her pregnancy out of
wedlock does not amount to serious misconduct or conduct unbecoming of an
employee. She averred that she is unaware of any school policy stating that being
pregnant out of wedlock is considered as a serious misconduct and, thus, a ground
for dismissal. Further, the petitioner requested a copy of SSCWs policy and
guidelines so that she may better respond to the charge against her.
On June 2, 2003, Sr. Quiambao informed the petitioner that, pending the
promulgation of a Support Staff Handbook, SSCW follows the 1992 Manual of
Regulations for Private Schools (1992 MRPS) on the causes for termination of
employments; that Section 94(e) of the 1992 MRPS cites disgraceful or immoral
conduct as a ground for dismissal in addition to the just causes for termination of
employment provided under Article 282 of the Labor
Code.8chanRoblesvirtualLawlibrary
On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a letter, 9 which,
in part, reads:chanroblesvirtuallawlibrary
To us, pre-marital sex between two consenting adults without legal impediment to
marry each other who later on married each other does not fall within the
contemplation of disgraceful or immoral conduct and serious misconduct of the
Manual of Regulations for Private Schools and the Labor Code of the Philippines.
Your argument that what happened to our client would set a bad example to the
students and other employees of your school is speculative and is more imaginary
than real. To dismiss her on that sole ground constitutes grave abuse of
management prerogatives.
Considering her untarnished service for two years, dismissing her with her present
condition would also mean depriving her to be more secure in terms of financial
capacity to sustain maternal needs.10
In a letter11 dated June 6, 2003, SSCW, through counsel, maintained that pre-marital
sexual relations, even if between two consenting adults without legal impediment to
marry, is considered a disgraceful and immoral conduct or a serious misconduct,
which are grounds for the termination of employment under the 1992 MRPS and the
Labor Code. That SSCW, as a Catholic institution of learning, has the right to uphold
the teaching of the Catholic Church and expect its employees to abide by the same.
They further asserted that the petitioners indiscretion is further aggravated by the
fact that she is the Assistant to the Director of the Lay Apostolate and Community
Outreach Directorate, a position of responsibility that the students look up to as role
model. The petitioner was again directed to submit a written explanation on why she
should not be dismissed.
On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts her counsels
letter dated June 4, 2003 as her written explanation.12chanRoblesvirtualLawlibrary
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao informed the
petitioner that her employment with SSCW is terminated on the ground of serious
misconduct. She stressed that pre-marital sexual relations between two consenting
adults with no impediment to marry, even if they subsequently married, amounts to
immoral conduct. She further pointed out that SSCW finds unacceptable the scandal
brought about by the petitioners pregnancy out of wedlock as it ran counter to the
moral principles that SSCW stands for and teaches its students.
Thereupon, the petitioner filed a complaint for illegal dismissal with the Regional
Arbitration Branch of the NLRC in Quezon City against SSCW and Sr. Quiambao
(respondents). In her position paper,14 the petitioner claimed that SSCW gravely
abused its management prerogative as there was no just cause for her dismissal.
She maintained that her pregnancy out of wedlock cannot be considered as serious
misconduct since the same is a purely private affair and not connected in any way
with her duties as an employee of SSCW. Further, the petitioner averred that she and
her boyfriend eventually got married even prior to her dismissal.
For their part, SSCW claimed that there was just cause to terminate the petitioners
employment with SSCW and that the same is a valid exercise of SSCWs
management prerogative. They maintained that engaging in pre-marital sex, and
getting pregnant as a result thereof, amounts to a disgraceful or immoral conduct,
which is a ground for the dismissal of an employee under the 1992 MRPS.
They pointed out that SSCW is a Catholic educational institution, which caters
exclusively to young girls; that SSCW would lose its credibility if it would maintain
employees who do not live up to the values and teachings it inculcates to its
students. SSCW further asserted that the petitioner, being an employee of a Catholic
educational institution, should have strived to maintain the honor, dignity and
reputation of SSCW as a Catholic school.15chanRoblesvirtualLawlibrary
The Ruling of the Labor Arbiter
On February 28, 2006, the Labor Arbiter (LA) rendered a Decision,16 in NLRC Case
No. 6-17657-03-C which dismissed the complaint filed by the petitioner. The LA
found that there was a valid ground for the petitioners dismissal; that her
pregnancy out of wedlock is considered as a disgraceful and immoral conduct. The
LA pointed out that, as an employee of a Catholic educational institution, the
petitioner is expected to live up to the Catholic values taught by SSCW to its
students. Likewise, the LA opined that:chanroblesvirtuallawlibrary
Further, a deep analysis of the facts would lead us to disagree with the complainant
that she was dismissed simply because she violate[d] a Catholic [teaching]. It should
not be taken in isolation but rather it should be analyzed in the light of the
surrounding circumstances as a whole. We must also take into [consideration] the
nature of her work and the nature of her employer-school. For us, it is not just an
ordinary violation. It was committed by the complainant in an environment where
her strict adherence to the same is called for and where the reputation of the school
is at stake. x x x.17
The LA further held that teachers and school employees, both in their official and
personal conduct, must display exemplary behavior and act in a manner that is
beyond reproach.
The petitioner appealed to the NLRC, insisting that there was no valid ground for the
termination of her employment. She maintained that her pregnancy out of wedlock
cannot be considered as serious misconduct under Article 282 of the Labor Code
since the same was not of such a grave and aggravated character. She asserted that
SSCW did not present any evidence to establish that her pregnancy out of wedlock
indeed eroded the moral principles that it teaches its
students.18chanRoblesvirtualLawlibrary
The Ruling of the NLRC
On February 28, 2007, the NLRC issued a Resolution, 19 which affirmed the LA
Decision dated February 28, 2006. The NLRC pointed out that the termination of the
employment of the personnel of private schools is governed by the 1992 MRPS; that
Section 94(e) thereof cites disgraceful or immoral conduct as a just cause for
dismissal, in addition to the grounds for termination of employment provided for
under Article 282 of the Labor Code. The NLRC held that the petitioners pregnancy
out of wedlock is a disgraceful or immoral conduct within the contemplation of
Section 94(e) of the 1992 MRPS and, thus, SSCW had a valid reason to terminate her
employment.
The petitioner sought reconsideration20 of the Resolution dated February 28, 2007
but it was denied by the NLRC in its Resolution 21 dated May 21, 2007.
Unperturbed, the petitioner filed a petition22 for certiorari with the CA, alleging that
the NLRC gravely abused its discretion in ruling that there was a valid ground for her
dismissal. She maintained that pregnancy out of wedlock cannot be considered as a
disgraceful or immoral conduct; that SSCW failed to prove that its students were
indeed gravely scandalized by her pregnancy out of wedlock. She likewise asserted
that the NLRC erred in applying Section 94(e) of the 1992 MRPS.cralawred
The Ruling of the CA
On September 24, 2008, the CA rendered the herein assailed Decision, 23 which
denied the petition forcertiorari filed by the petitioner. The CA held that it is the
provisions of the 1992 MRPS and not the Labor Code which governs the termination
of employment of teaching and non-teaching personnel of private schools,
explaining that:chanroblesvirtuallawlibrary
It is a principle of statutory construction that where there are two statutes that apply
to a particular case, that which was specially intended for the said case must
prevail. Petitioner was employed by respondent private Catholic institution which
undeniably follows the precepts or norms of conduct set forth by the Catholic
Church. Accordingly, the Manual of Regulations for Private Schools followed by it
must prevail over the Labor Code, a general statute. The Manual constitutes the
private schools Implementing Rules and Regulations of Batas Pambansa Blg. 232 or
the Education Act of 1982. x x x.24
The CA further held that the petitioners dismissal was a valid exercise of SSCWs
management prerogative to discipline and impose penalties on erring employees
pursuant to its policies, rules and regulations. The CA upheld the NLRCs conclusion
that the petitioners pregnancy out of wedlock is considered as a disgraceful and
immoral conduct and, thus, a ground for dismissal under Section 94(e) of the 1992
MRPS. The CA likewise opined that the petitioners pregnancy out of wedlock is
scandalous per se given the work environment and social milieu that she was
in, viz:chanroblesvirtuallawlibrary
Under Section 94 (e) of the [MRPS], and even under Article 282 (serious misconduct)
of the Labor Code, disgraceful and immoral conduct is a basis for termination of
employment.
xxxx
Petitioner contends that her pre-marital sexual relations with her boyfriend and her
pregnancy prior to marriage was not disgraceful or immoral conduct sufficient for
her dismissal because she was not a member of the schools faculty and there is no
evidence that her pregnancy scandalized the school community.
We are not persuaded. Petitioners pregnancy prior to marriage is scandalous in
itself given the work environment and social milieu she was in. Respondent school
for young ladies precisely seeks to prevent its students from situations like this,
inculcating in them strict moral values and standards. Being part of the institution,
petitioners private and public life could not be separated. Her admitted pre-marital
sexual relations was a violation of private respondents prescribed standards of
conduct that views pre-marital sex as immoral because sex between a man and a
woman must only take place within the bounds of marriage.
Finally, petitioners dismissal is a valid exercise of the employer-schools
management prerogative to discipline and impose penalties on erring employees
pursuant to its policies, rules and regulations. x x x. 25 (Citations omitted)
The petitioner moved for reconsideration26 but it was denied by the CA in its
Resolution27 dated March 2, 2009.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioner for this Courts decision are the
following: first,whether the CA committed reversible error in ruling that it is the 1992
MRPS and not the Labor Code that governs the termination of employment of
teaching and non-teaching personnel of private schools; and second, whether the
petitioners pregnancy out of wedlock constitutes a valid ground to terminate her
employment.cralawred
The Ruling of the Court
The Court grants the petition.
First Issue: Applicability of the 1992 MRPS
The petitioner contends that the CA, in ruling that there was a valid ground to
dismiss her, erred in applying Section 94 of the 1992 MRPS. Essentially, she claims
that the 1992 MRPS was issued by the Secretary of Education as the revised
implementing rules and regulations of Batas Pambansa Bilang 232 (BP 232) or the
Education Act of 1982. That there is no provision in BP 232, which provides for the
grounds for the termination of employment of teaching and non-teaching personnel
of private schools. Thus, Section 94 of the 1992 MRPS, which provides for the causes
of terminating an employment, is invalid as it widened the scope and coverage of
BP 232.
The Court does not agree.
The Court notes that the argument against the validity of the 1992 MRPS,
specifically Section 94 thereof, is raised by the petitioner for the first time in the
instant petition for review. Nowhere in the proceedings before the LA, the NLRC or
the CA did the petitioner assail the validity of the provisions of the 1992 MRPS.
It is well established that issues raised for the first time on appeal and not raised in
the proceedings in the lower court are barred by estoppel. Points of law, theories,
issues, and arguments not brought to the attention of the trial court ought not to be
considered by a reviewing court, as these cannot be raised for the first time on
appeal. To consider the alleged facts and arguments belatedly raised would amount
to trampling on the basic principles of fair play, justice, and due
process.28chanRoblesvirtualLawlibrary
In any case, even if the Court were to disregard the petitioners belated claim of the
invalidity of the 1992 MRPS, the Court still finds the same untenable.
The 1992 MRPS, the regulation in force at the time of the instant controversy, was
issued by the Secretary of Education pursuant to BP 232. Section 70 29 of BP 232
vests the Secretary of Education with the authority to issue rules and regulations to
implement the provisions of BP 232. Concomitantly, Section 57 30 specifically
empowers the Department of Education to promulgate rules and regulations
necessary for the administration, supervision and regulation of the educational
system in accordance with the declared policy of BP 232.
The qualifications of teaching and non-teaching personnel of private schools, as well
as the causes for the termination of their employment, are an integral aspect of the
educational system of private schools. Indubitably, ensuring that the teaching and
non-teaching personnel of private schools are not only qualified, but competent and
efficient as well goes hand in hand with the declared objective of BP 232
establishing and maintaining relevant quality education.31 It is thus within the
authority of the Secretary of Education to issue a rule, which provides for the
dismissal of teaching and non-teaching personnel of private schools based on their
incompetence, inefficiency, or some other disqualification.
Moreover, Section 69 of BP 232 specifically authorizes the Secretary of Education to
prescribe and impose such administrative sanction as he may deem reasonable
and appropriate in the implementing rules and regulations for the [g]ross
inefficiency of the teaching or non-teaching personnel of private
schools.32 Accordingly, contrary to the petitioners claim, the Court sees no reason to
invalidate the provisions of the 1992 MRPS, specifically Section 94 thereof.cralawred
Second Issue: Validity of the Petitioners Dismissal
The validity of the petitioners dismissal hinges on the determination of whether
pregnancy out of wedlock by an employee of a catholic educational institution is a
cause for the termination of her employment.
In resolving the foregoing question, the Court will assess the matter from a strictly
neutral and secular point of view the relationship between SSCW as employer and
the petitioner as an employee, the causes provided for by law in the termination of
such relationship, and the evidence on record. The ground cited for the petitioners
dismissal, i.e., pre-marital sexual relations and, consequently, pregnancy out of
wedlock, will be assessed as to whether the same constitutes a valid ground for
dismissal pursuant to Section 94(e) of the 1992 MRPS.
The standard of review in a Rule 45
petition from the CA decision in labor
cases.
In a petition for review under Rule 45 of the Rules of Court, such as the instant
petition, where the CAs disposition in a labor case is sought to be calibrated, the
Courts review is quite limited. In ruling for legal correctness, the Court has to view
the CA decision in the same context that the petition forcertiorari it ruled upon was
presented to it; the Court has to examine the CA decision from the prism of whether
it correctly determined the presence or absence of grave abuse of discretion in the
NLRC decision before it, not on the basis of whether the NLRC decision on the merits
of the case was correct.33chanRoblesvirtualLawlibrary
The phrase grave abuse of discretion is well-defined in the Courts jurisprudence. It
exists where an act of a court or tribunal is performed with a capricious or whimsical
exercise of judgment equivalent to lack of jurisdiction.34 The determination of the
presence or absence of grave abuse of discretion does not include an inquiry into
the correctness of the evaluation of evidence, which was the basis of the labor
agency in reaching its conclusion.35chanRoblesvirtualLawlibrary
Nevertheless, while a certiorari proceeding does not strictly include an inquiry as to
the correctness of the evaluation of evidence (that was the basis of the labor
tribunals in determining their conclusion), the incorrectness of its evidentiary
evaluation should not result in negating the requirement of substantial
evidence. Indeed, when there is a showing that the findings or conclusions,
drawn from the same pieces of evidence, were arrived at arbitrarily or in
disregard of the evidence on record, they may be reviewed by the courts.
In particular, the CA can grant the petition for certiorari if it finds that the NLRC, in
its assailed decision or resolution, made a factual finding not supported by
substantial evidence. A decision that is not supported by substantial evidence is
definitely a decision tainted with grave abuse of
discretion.36chanRoblesvirtualLawlibrary
The labor tribunals respective
conclusions that the petitioners pregnancy
is a disgraceful or immoral conduct
were arrived at arbitrarily.
The CA and the labor tribunals affirmed the validity of the petitioners dismissal
pursuant to Section 94(e) of the 1992 MRPS, which provides
that:chanroblesvirtuallawlibrary
Sec. 94. Causes of Terminating Employment In addition to the just causes
enumerated in the Labor Code, the employment of school personnel, including
faculty, may be terminated for any of the following
causes:ChanRoblesVirtualawlibrary
xxxx
e. Disgraceful or immoral conduct;
xxxx
The labor tribunals concluded that the petitioners pregnancy out of wedlock, per
se, is disgraceful and immoral considering that she is employed in a Catholic
educational institution. In arriving at such conclusion, the labor tribunals merely
assessed the fact of the petitioners pregnancy vis--vis the totality of the
circumstances surrounding the same.
However, the Court finds no substantial evidence to support the aforementioned
conclusion arrived at by the labor tribunals. The fact of the petitioners pregnancy
out of wedlock, without more, is not enough to characterize the petitioners conduct
as disgraceful or immoral. There must be substantial evidence to establish that pre-
marital sexual relations and, consequently, pregnancy out of wedlock, are indeed
considered disgraceful or immoral.
The totality of the circumstances
surrounding the conduct alleged to be
disgraceful or immoral must be assessed
against the prevailing norms of conduct.
In Chua-Qua v. Clave,37 the Court stressed that to constitute immorality, the
circumstances of each particular case must be holistically considered
and evaluated in light of the prevailing norms of conduct and applicable
laws.38 Otherwise stated, it is not the totality of the circumstances surrounding the
conduct per se that determines whether the same is disgraceful or immoral, but the
conduct that is generally accepted by society as respectable or moral. If the conduct
does not conform to what society generally views as respectable or moral, then the
conduct is considered as disgraceful or immoral. Tersely put, substantial evidence
must be presented, which would establish that a particular conduct, viewed in light
of the prevailing norms of conduct, is considered disgraceful or immoral.
Thus, the determination of whether a conduct is disgraceful or immoral involves a
two-step process:first, a consideration of the totality of the circumstances
surrounding the conduct; and second, an assessment of the said circumstances vis-
-vis the prevailing norms of conduct, i.e., what the society generally considers
moral and respectable.
That the petitioner was employed by a Catholic educational institution per se does
not absolutely determine whether her pregnancy out of wedlock is disgraceful or
immoral. There is still a necessity to determine whether the petitioners pregnancy
out of wedlock is considered disgraceful or immoral in accordance with the
prevailing norms of conduct.
Public and secular morality should
determine the prevailing norms of conduct,
not religious morality.
However, determining what the prevailing norms of conduct are considered
disgraceful or immoral is not an easy task. An individuals perception of what is
moral or respectable is a confluence of a myriad of influences, such as religion,
family, social status, and a cacophony of others. In this regard, the Courts
ratiocination in Estrada v. Escritor39 is instructive.
In Estrada, an administrative case against a court interpreter charged with
disgraceful and immoral conduct, the Court stressed that in determining whether a
particular conduct can be considered as disgraceful and immoral, the distinction
between public and secular morality on the one hand, and religious morality, on the
other, should be kept in mind.40 That the distinction between public and secular
morality and religious morality is important because the jurisdiction of the Court
extends only to public and secular morality.41 The Court further explained
that:chanroblesvirtuallawlibrary
The morality referred to in the law is public and necessarily secular, not
religious x x x. Religious teachings as expressed in public debate may influence the
civil public order but public moral disputes may be resolved only on grounds
articulable in secular terms. Otherwise, if government relies upon religious
beliefs in formulating public policies and morals, the resulting policies and
morals would require conformity to what some might regard as religious
programs or agenda. The non-believers would therefore be compelled to conform
to a standard of conduct buttressed by a religious belief, i.e., to a compelled
religion, anathema to religious freedom. Likewise, if government based its actions
upon religious beliefs, it would tacitly approve or endorse that belief and thereby
also tacitly disapprove contrary religious or non-religious views that would not
support the policy. As a result, government will not provide full religious freedom for
all its citizens, or even make it appear that those whose beliefs are disapproved are
second-class citizens. Expansive religious freedom therefore requires that
government be neutral in matters of religion; governmental reliance upon religious
justification is inconsistent with this policy of neutrality.
In other words, government action, including its proscription of immorality
as expressed in criminal law like concubinage, must have a secular
purpose. That is, the government proscribes this conduct because it is
detrimental (or dangerous) to those conditions upon which depend the
existence and progress of human society and not because the conduct is
proscribed by the beliefs of one religion or the other. Although admittedly,
moral judgments based on religion might have a compelling influence on those
engaged in public deliberations over what actions would be considered a moral
disapprobation punishable by law. After all, they might also be adherents of a
religion and thus have religious opinions and moral codes with a compelling
influence on them; the human mind endeavors to regulate the temporal and
spiritual institutions of society in a uniform manner, harmonizing earth with
heaven. Succinctly put, a law could be religious or Kantian or Aquinian or
utilitarian in its deepest roots, but it must have an articulable and
discernible secular purpose and justification to pass scrutiny of the
religion clauses. x x x.42(Citations omitted and emphases ours)
Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it
pertains to public and secular morality; it refers to those conducts which are
proscribed because they are detrimental to conditions upon which depend the
existence and progress of human society. Thus, inAnonymous v. Radam,43 an
administrative case involving a court utility worker likewise charged with disgraceful
and immoral conduct, applying the doctrines laid down in Estrada, the Court held
that:chanroblesvirtuallawlibrary
For a particular conduct to constitute disgraceful and immoral behavior
under civil service laws, it must be regulated on account of the concerns of
public and secular morality. It cannot be judged based on personal bias,
specifically those colored by particular mores. Nor should it be grounded
on cultural values not convincingly demonstrated to have been
recognized in the realm of public policy expressed in the Constitution and
the laws. At the same time, the constitutionally guaranteed rights (such as the right
to privacy) should be observed to the extent that they protect behavior that may be
frowned upon by the majority.
Under these tests, two things may be concluded from the fact that an unmarried
woman gives birth out of wedlock:
(1 if the father of the child is himself unmarried, the woman is not
) ordinarily administratively liable for disgraceful and immoral conduct. It
may be a not-so-ideal situation and may cause complications for both mother
and child but it does not give cause for administrative sanction. There is no law
which penalizes an unmarried mother under those circumstances by
reason of her sexual conduct or proscribes the consensual sexual
activity between two unmarried persons. Neither does the situation
contravene any fundamental state policy as expressed in the
Constitution, a document that accommodates various belief systems
irrespective of dogmatic origins.
(2 if the father of the child born out of wedlock is himself married to a
) woman other than the mother, then there is a cause for administrative
sanction against either the father or the mother. In such a case, the
 disgraceful and immoral conduct consists of having extramarital
relations with a married person. The sanctity of marriage is constitutionally
recognized and likewise affirmed by our statutes as a special contract of
permanent union. Accordingly, judicial employees have been sanctioned for their
dalliances with married persons or for their own betrayals of the marital vow of
fidelity.
In this case, it was not disputed that, like respondent, the father of her child was
unmarried. Therefore, respondent cannot be held liable for disgraceful and immoral
conduct simply because she gave birth to the child Christian Jeon out of
wedlock.44(Citations omitted and emphases ours)
Both Estrada and Radam are administrative cases against employees in the civil
service. The Court, however, sees no reason not to apply the doctrines enunciated
in Estrada and Radam in the instant case. Estrada and Radam also required the
Court to delineate what conducts are considered disgraceful and/or immoral as
would constitute a ground for dismissal. More importantly, as in the said
administrative cases, the instant case involves an employees security of tenure;
this case likewise concerns employment, which is not merely a specie of property
right, but also the means by which the employee and those who depend on him
live.45chanRoblesvirtualLawlibrary
It bears stressing that the right of an employee to security of tenure is protected by
the Constitution. Perfunctorily, a regular employee may not be dismissed unless for
cause provided under the Labor Code and other relevant laws, in this case, the 1992
MRPS. As stated above, when the law refers to morality, it necessarily pertains to
public and secular morality and not religious morality. Thus, the proscription against
disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS, which is
made as a cause for dismissal, must necessarily refer to public and secular morality.
Accordingly, in order for a conduct to be considered as disgraceful or immoral, it
must be detrimental (or dangerous) to those conditions upon which depend the
existence and progress of human society and not because the conduct is proscribed
by the beliefs of one religion or the other.
Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a teacher who had an
extra-marital affair with his co-teacher, who is likewise married, on the ground of
disgraceful and immoral conduct under Section 94(e) of the 1992 MRPS. The Court
pointed out that extra-marital affair is considered as a disgraceful and immoral
conduct is an afront to the sanctity of marriage, which is a basic institution of
society, viz:chanroblesvirtuallawlibrary
We cannot overemphasize that having an extra-marital affair is an afront to the
sanctity of marriage, which is a basic institution of society. Even our Family Code
provides that husband and wife must live together, observe mutual love, respect
and fidelity. This is rooted in the fact that both our Constitution and our laws cherish
the validity of marriage and unity of the family. Our laws, in implementing this
constitutional edict on marriage and the family underscore their permanence,
inviolability and solidarity.47
The petitioners pregnancy out of
wedlock is not a disgraceful or immoral
conduct since she and the father of her
child have no impediment to marry each
other.
In stark contrast to Santos, the Court does not find any circumstance in this case
which would lead the Court to conclude that the petitioner committed a disgraceful
or immoral conduct. It bears stressing that the petitioner and her boyfriend, at the
time they conceived a child, had no legal impediment to marry. Indeed, even prior to
her dismissal, the petitioner married her boyfriend, the father of her child. As the
Court held in Radam, there is no law which penalizes an unmarried mother by
reason of her sexual conduct or proscribes the consensual sexual activity between
two unmarried persons; that neither does such situation contravene any
fundamental state policy enshrined in the Constitution.
Admittedly, the petitioner is employed in an educational institution where the
teachings and doctrines of the Catholic Church, including that on pre-marital sexual
relations, is strictly upheld and taught to the students. That her indiscretion, which
resulted in her pregnancy out of wedlock, is anathema to the doctrines of the
Catholic Church. However, viewed against the prevailing norms of conduct, the
petitioners conduct cannot be considered as disgraceful or immoral; such conduct is
not denounced by public and secular morality. It may be an unusual arrangement,
but it certainly is not disgraceful or immoral within the contemplation of the law.
To stress, pre-marital sexual relations between two consenting adults who have no
impediment to marry each other, and, consequently, conceiving a child out of
wedlock, gauged from a purely public and secular view of morality, does not amount
to a disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the petitioners
dismissal. The labor tribunals arbitrarily relied solely on the circumstances
surrounding the petitioners pregnancy and its supposed effect on SSCW and its
students without evaluating whether the petitioners conduct is indeed considered
disgraceful or immoral in view of the prevailing norms of conduct. In this regard, the
labor tribunals respective haphazard evaluation of the evidence amounts to grave
abuse of discretion, which the Court will rectify.
The labor tribunals finding that the petitioners pregnancy out of wedlock despite
the absence of substantial evidence is not only arbitrary, but a grave abuse of
discretion, which should have been set right by the CA.
There is no substantial evidence to
prove that the petitioners pregnancy out of
wedlock caused grave scandal to SSCW
and its students.
SSCW claimed that the petitioner was primarily dismissed because her pregnancy
out of wedlock caused grave scandal to SSCW and its students. That the scandal
brought about by the petitioners indiscretion prompted them to dismiss her. The LA
upheld the respondents claim, stating that:chanroblesvirtuallawlibrary
In this particular case, an objective and rational evaluation of the facts and
circumstances obtaining in this case would lead us to focus our attention x x x on
the impact of the act committed by the complainant. The act of the
complainant x x xeroded the moral principles being taught and project[ed]
by the respondent [C]atholic school to their young lady
students.48 (Emphasis in the original)
On the other hand, the NLRC opined that:chanroblesvirtuallawlibrary
In the instant case, when the complainant-appellant was already conceiving a child
even before she got married, such is considered a shameful and scandalous
behavior, inimical to public welfare and policy. It eroded the moral doctrines
which the respondent Catholic school, an exclusive school for girls, is
teaching the young girls. Thus, when the respondent-appellee school
terminated complainant-appellants services, it was a valid exercise of its
management prerogative. Whether or not she was a teacher is of no moment.
There is no separate set of rules for non-teaching personnel. Respondents-appellees
uphold the teachings of the Catholic Church on pre-marital sex and that the
complainant-appellant as an employee of the school was expected to abide by this
basic principle and to live up with the standards of their purely Catholic values. Her
subsequent marriage did not take away the fact that she had engaged in pre-marital
sex which the respondent-appellee school denounces as the same is opposed to the
teachings and doctrines it espouses.49 (Emphasis ours)
Contrary to the labor tribunals declarations, the Court finds that SSCW failed to
adduce substantial evidence to prove that the petitioners indiscretion indeed
caused grave scandal to SSCW and its students. Other than the SSCWs bare
allegation, the records are bereft of any evidence that would convincingly prove that
the petitioners conduct indeed adversely affected SSCWs integrity in teaching the
moral doctrines, which it stands for. The petitioner is only a non-teaching personnel;
her interaction with SSCWs students is very limited. It is thus quite impossible that
her pregnancy out of wedlock caused such a grave scandal, as claimed by SSCW, as
to warrant her dismissal.
Settled is the rule that in termination cases, the burden of proving that the dismissal
of the employees was for a valid and authorized cause rests on the employer. It is
incumbent upon the employer to show by substantial evidence that the termination
of the employment of the employees was validly made and failure to discharge that
duty would mean that the dismissal is not justified and therefore
illegal.50 Substantial evidence is more than a mere scintilla of evidence. It means
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, even if other minds equally reasonable might conceivably opine
otherwise.51chanRoblesvirtualLawlibrary
Indubitably, bare allegations do not amount to substantial evidence. Considering
that the respondents failed to adduce substantial evidence to prove their asserted
cause for the petitioners dismissal, the labor tribunals should not have upheld their
allegations hook, line and sinker. The labor tribunals respective findings, which were
arrived at sans any substantial evidence, amounts to a grave abuse of discretion,
which the CA should have rectified. Security of tenure is a right which may not be
denied on mere speculation of any unclear and nebulous
basis.52chanRoblesvirtualLawlibrary
The petitioners dismissal is not a
valid exercise of SSCWs management
prerogative.
The CA belabored the management prerogative of SSCW to discipline its employees.
The CA opined that the petitioners dismissal is a valid exercise of management
prerogative to impose penalties on erring employees pursuant to its policies, rules
and regulations.
The Court does not agree.
The Court has held that management is free to regulate, according to its own
discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work, processes to be
followed, supervision of workers, working regulations, transfer of employees, work
supervision, lay off of workers and discipline, dismissal and recall of workers. The
exercise of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor. Management
cannot exercise its prerogative in a cruel, repressive, or despotic
manner.53chanRoblesvirtualLawlibrary
SSCW, as employer, undeniably has the right to discipline its employees and, if need
be, dismiss them if there is a valid cause to do so. However, as already explained,
there is no cause to dismiss the petitioner. Her conduct is not considered by law as
disgraceful or immoral. Further, the respondents themselves have admitted that
SSCW, at the time of the controversy, does not have any policy or rule against an
employee who engages in pre-marital sexual relations and conceives a child as a
result thereof. There being no valid basis in law or even in SSCWs policy and rules,
SSCWs dismissal of the petitioner is despotic and arbitrary and, thus, not a valid
exercise of management prerogative.
In sum, the Court finds that the petitioner was illegally dismissed as there was no
just cause for the termination of her employment. SSCW failed to adduce substantial
evidence to establish that the petitioners conduct, i.e., engaging in pre-marital
sexual relations and conceiving a child out of wedlock, assessed in light of the
prevailing norms of conduct, is considered disgraceful or immoral. The labor
tribunals gravely abused their discretion in upholding the validity of the petitioners
dismissal as the charge against the petitioner lay not on substantial evidence, but
on the bare allegations of SSCW. In turn, the CA committed reversible error in
upholding the validity of the petitioners dismissal, failing to recognize that the labor
tribunals gravely abused their discretion in ruling for the respondents.
The petitioner is entitled to
separation pay, in lieu of actual
reinstatement, full backwages and
attorneys fees, but not to moral
and exemplary damages.
Having established that the petitioner was illegally dismissed, the Court now
determines the reliefs that she is entitled to and their extent. Under the law and
prevailing jurisprudence, an illegally dismissed employee is entitled to
reinstatement as a matter of right.54 Aside from the instances provided under
Articles 28355 and 28456 of the Labor Code, separation pay is, however, granted
when reinstatement is no longer feasible because of strained relations between the
employer and the employee. In cases of illegal dismissal, the accepted doctrine is
that separation pay is available in lieu of reinstatement when the latter recourse is
no longer practical or in the best interest of the
parties.57chanRoblesvirtualLawlibrary
In Divine Word High School v. NLRC,58 the Court ordered the employer Catholic
school to pay the illegally dismissed high school teacher separation pay in lieu of
actual reinstatement since her continued presence as a teacher in the school may
well be met with antipathy and antagonism by some sectors in the school
community.59chanRoblesvirtualLawlibrary
In view of the particular circumstances of this case, it would be more prudent to
direct SSCW to pay the petitioner separation pay in lieu of actual reinstatement. The
continued employment of the petitioner with SSCW would only serve to intensify the
atmosphere of antipathy and antagonism between the parties. Consequently, the
Court awards separation pay to the petitioner equivalent to one (1) month pay for
every year of service, with a fraction of at least six (6) months considered as one (1)
whole year, from the time of her illegal dismissal up to the finality of this judgment,
as an alternative to reinstatement.
Also, employees who are illegally dismissed are entitled to full backwages, inclusive
of allowances and other benefits or their monetary equivalent, computed from the
time their actual compensation was withheld from them up to the time of their
actual reinstatement but if reinstatement is no longer possible, the backwages shall SO ORDERED.cralawlawlibrary
be computed from the time of their illegal termination up to the finality of the
decision.60 Accordingly, the petitioner is entitled to an award of full backwages from Velasco, Jr., (Chairperson), Peralta, Villarama, Jr., and Jardeleza, JJ., concur.
the time she was illegally dismissed up to the finality of this decision.

Nevertheless, the petitioner is not entitled to moral and exemplary damages. A

dismissed employee is entitled to moral damages when the dismissal is attended by
bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy. Exemplary damages may be
awarded if the dismissal is effected in a wanton, oppressive or malevolent
manner.61chanRoblesvirtualLawlibrary

Bad faith, under the law, does not simply connote bad judgment or negligence. It
imports a dishonest purpose or some moral obliquity and conscious doing of a G.R. No. 94951 April 22, 1991
wrong, or a breach of a known duty through some motive or interest or ill will that
partakes of the nature of fraud.62chanRoblesvirtualLawlibrary
APEX MINING COMPANY, INC., petitioner,
It must be noted that the burden of proving bad faith rests on the one alleging vs.
it63 since basic is the principle that good faith is presumed and he who alleges bad NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA
faith has the duty to prove the same.64Allegations of bad faith and fraud must be CANDIDO, respondents.
proved by clear and convincing evidence.65chanRoblesvirtualLawlibrary
Bernabe B. Alabastro for petitioner.
The records of this case are bereft of any clear and convincing evidence showing Angel Fernandez for private respondent.
that the respondents acted in bad faith or in a wanton or fraudulent manner in
dismissing the petitioner. That the petitioner was illegally dismissed is insufficient to
prove bad faith. A dismissal may be contrary to law but by itself alone, it does not
establish bad faith to entitle the dismissed employee to moral damages. The award
of moral and exemplary damages cannot be justified solely upon the premise that GANCAYCO, J.:
the employer dismissed his employee without cause. 66chanRoblesvirtualLawlibrary
Is the househelper in the staff houses of an industrial company a domestic helper or
However, the petitioner is entitled to attorneys fees in the amount of 10% of the
a regular employee of the said firm? This is the novel issue raised in this petition.
total monetary award pursuant to Article 11167 of the Labor Code. It is settled that
where an employee was forced to litigate and, thus, incur expenses to protect his
rights and interest, the award of attorneys fees is legally and morally Private respondent Sinclita Candida was employed by petitioner Apex Mining
justifiable.68chanRoblesvirtualLawlibrary 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
Finally, legal interest shall be imposed on the monetary awards herein granted at rate basis. However, on January 17, 1982, she was paid on a monthly basis at
the rate of six percent (6%) per annum from the finality of this judgment until fully P250.00 a month which was ultimately increased to P575.00 a month.
paid.69chanRoblesvirtualLawlibrarychanrobleslaw
On December 18, 1987, while she was attending to her assigned task and she was
WHEREFORE, in consideration of the foregoing disquisitions, the petition
hanging her laundry, she accidentally slipped and hit her back on a stone. She
is GRANTED. The Decision dated September 24, 2008 and Resolution dated March
reported the accident to her immediate supervisor Mila de la Rosa and to the
2, 2009 of the Court of Appeals in CA-G.R. SP No. 100188 are
personnel officer, Florendo D. Asirit. As a result of the accident she was not able to
hereby REVERSED and SET ASIDE.
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
The respondent, St. Scholasticas College Westgrove, is hereby declared guilty of
to persuade her to quit her job, but she refused the offer and preferred to return to
illegal dismissal and is hereby ORDERED to pay the petitioner, Cheryll Santos Leus,
work. Petitioner did not allow her to return to work and dismissed her on February 4,
the following: (a) separation pay in lieu of actual reinstatement equivalent to one (1)
1988.
month pay for every year of service, with a fraction of at least six (6) months
considered as one (1) whole year from the time of her dismissal up to the finality of
this Decision; (b) full backwages from the time of her illegal dismissal up to the On March 11, 1988, private respondent filed a request for assistance with the
finality of this Decision; and (c) attorneys fees equivalent to ten percent (10%) of Department of Labor and Employment. After the parties submitted their position
the total monetary award. The monetary awards herein granted shall earn legal papers as required by the labor arbiter assigned to the case on August 24, 1988 the
interest at the rate of six percent (6%) per annum from the date of the finality of this latter rendered a decision, the dispositive part of which reads as follows:
Decision until fully paid. The case is REMANDED to the Labor Arbiter for the
computation of petitioners monetary awards.
 WHEREFORE, Conformably With The Foregoing, judgment is hereby are usually necessary or desirable for the maintenance and enjoyment
rendered ordering the respondent, Apex Mining Company, Inc., Masara, thereof, and ministers exclusively to the personal comfort and enjoyment of
Davao del Norte, to pay the complainant, to wit: the employer's family.3

1 Salary 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
Differential P16,289.20
drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other
similar househelps.
2. Emergency Living
The definition cannot be interpreted to include househelp or laundrywomen working
Allowance 12,430.00 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
3. 13th Month Pay
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
Differential 1,322.32 above-defined by law.

4. Separation Pay 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
(One-month for
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,
every year of 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,
service [1973-19881) 25,119.30
they are employees of the company or employer in the business concerned entitled
to the privileges of a regular employee.
or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS
AND 42/100 (P55,161.42).
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
SO ORDERED.1 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
Not satisfied therewith, petitioner appealed to the public respondent National Labor
in relation to or in connection with its business, as in its staffhouses for its guest or
Relations Commission (NLRC), wherein in due course a decision was rendered by the
even for its officers and employees, warrants the conclusion that such househelper
Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit and
or domestic servant is and should be considered as a regular employee of the
affirming the appealed decision. A motion for reconsideration thereof was denied in
employer and not as a mere family househelper or domestic servant as
a resolution of the NLRC dated June 29, 1990.
contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.

Hence, the herein petition for review by certiorari, which appopriately should be a
Petitioner denies having illegally dismissed private respondent and maintains that
special civil action for certiorari, and which in the interest of justice, is hereby
respondent abandoned her work.1wphi1 This argument notwithstanding, there is
treated as such.2 The main thrust of the petition is that private respondent should be
enough evidence to show that because of an accident which took place while private
treated as a mere househelper or domestic servant and not as a regular employee
respondent was performing her laundry services, she was not able to work and was
of petitioner.
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
The petition is devoid of merit. be interested in returning to her work for valid reasons, the payment of separation
pay to her is in order.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms
"househelper" or "domestic servant" are defined as follows: WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of
public respondent NLRC are hereby AFFIRMED. No pronouncement as to costs.
The term "househelper" as used herein is synonymous to the term
"domestic servant" and shall refer to any person, whether male or female, SO ORDERED.
who renders services in and about the employer's home and which services
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

G.R. No. 87210 July 16, 1990

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.

L.B. Camins for petitioner.

Lino M. Patajo and Jose J. Torrefranca for private respondents.

MEDIALDEA, J.:
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.
1
SO ORDERED.
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 re-hired 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.
Narvasa (Chairman), Cruz, Gancayco and Grio-Aquino, JJ., concur.