THIRD DIVISION that they were false.
The offense is in the nature of malum
[ G.R. No. 168309, September 25, 2008 ]
OFFICE OF THE OMBUDSMAN, PETITIONER, VS.
MARIAN D. TORRES, MARICAR D. TORRES AND
COURT OF APPEALS (SPECIAL THIRD DIVISION),
RESPONDENTS.
RESOLUTION
NACHURA, J.:
For resolution is the Motion for Reconsideration of private
[1]
respondents Marian and Maricar Torres of our Decision
dated January 29, 2008 reversing and setting aside the
Decision dated January 6, 2004 and the Resolution dated
May 27, 2005 of the Court of Appeals (CA) and reinstating
the Decision dated November 9, 2001 of the Office of the
Ombudsman. The Decision of the Office of the
Ombudsman found private respondents administratively
guilty of dishonesty, grave misconduct and falsification of
official documents.
Private respondents raise the following grounds -
I. With all due respect, the Honorable Court erred in
its finding that the respondents in this case are
administratively liable for dishonesty, grave
misconduct and falsification of official document.
II. With all due respect, the Honorable Court erred in
ruling that damage has been caused to the
government by the actuations of the respondents
as shown in the manner of handling their daily
time records and that the existence of malice or
criminal intent is not a prerequisite to declare the
respondents administratively culpable.
III. With all due respect, the Honorable Court erred in
ruling that the Office of the Ombudsman was
correct in not dismissing the case outright.
IV. With all due respect, the Honorable Court erred in
ruling that the doctrine laid down in Aguinaldo vs.
Santos is not applicable to respondent Maricar.[2]
With respect to the first ground, private respondents insist
that the nature of their positions required them to be on
call 24 hours in a day, such that they would at times
render more than eight hours of work for their father. They
argue that they are not supposed to actually stay in the
office as required of ordinary employees. Maricar even
cites the fact that she has been regularly attending
evening classes from Monday to Friday at the University of
the East (UE) College of Law since 1999 when she first
enrolled, since the said school does not offer any day
classes for law students. She further claims that the Office
of the Ombudsman could not have concluded that she
falsified her Daily Time Records (DTRs) for the period
1995-1997 because it was not able to examine them
during the investigation. Similarly, Marian posits that her
DTRs for the period May 1996 to December 1997 were not
examined by petitioner through Graft Investigation Officer
I Moreno F. Generoso (GIO Generoso). Private respondents
now ask: How could petitioner have validly concluded that
their DTRs for those periods were falsified if they were not
even seen and scrutinized by GIO Generoso?
As to the other grounds raised in the motion, private
respondents merely reiterate the arguments they raised in
their Comment[3] and their Memorandum[4] before this
Court.
On the alleged absence of criminal intent or malice on the
part of private respondents to falsify their respective DTRs
during the subject periods of government employment,
the argument that there was no damage caused the
government by their acts, the error of the Office of the
Ombudsman in not dismissing the complaint outright, and
the supposed applicability ofAguinaldo v. Santos[5] to
Maricar's case, this Court observes that these were the
very same arguments that we already passed upon in our
Decision[6] promulgated on January 29, 2008.
At this point, we reiterate, albeit briefly, our discussion on
these matters.
The existence of malice or criminal intent is not a
mandatory requirement for a finding of falsification of
official documents as an administrative offense. What is
required is simply a showing that private respondents
made entries in their respective DTRs knowing fully well
prohibitum, such that respondents' commission of the act
with full knowledge of the falsity of the entries on the DTR
is sufficient to hold them liable. The element of damage is
also not absolutely necessary, since this case does not
pertain to the felony of Falsification under the Revised
Penal Code. Further, it remains arguable that there could
have been damage caused the government, as public
money was paid for hours of work not actually rendered.
On the issue of prescription, we reiterate that the Office of
the Ombudsman, under R.A. No. 6770, has a wide range of
discretion whether or not to proceed with an investigation
of administrative offenses beyond the expiration of one (1)
year from the commission of the offense. [7]
Likewise, it is a well-entrenched jurisprudential principle
that the dismissal of the criminal case involving the same
set of facts does not automatically result in the dismissal
of the administrative charges against private respondents.
[8]
Our ruling in Aguinaldo also cannot benefit Maricar
because she was not a re-elected public official when she
won as Councilor of Malabon City. Prior to her election, she
held an appointive position - Legislative Staff Assistant -
having been appointed thereto by her own father, former
Councilor Edilberto Torres. It is very clear that
in Aguinaldo, condonation of an administrative offense
applied only to an elective public official who was re-
elected during the pendency of an administrative case
against him.
However, we find the motion partly meritorious.
The Office of the Ombudsman made the factual finding
that Maricar and Marian falsified their DTRs for the periods
1995 to 1997 and May 1996 to December 1997,
respectively, even without the DTRs being presented,
simply for the reason cited by GIO Generoso that the
payrolls, which he examined during the investigation,
pertaining to these periods, could not have been legally
prepared without actually being supported by the
corresponding DTRs pursuant to the auditing rules and
regulations of the Commission on Audit (COA). [9]
While it is true that factual findings of administrative
agencies that are affirmed by the CA are conclusive upon
and generally not reviewable by this Court, the rule admits
of the following exceptions, to wit: (1) when the findings
are grounded entirely on speculation, surmises, or
conjectures; (2) when the inference made is manifestly
mistaken, absurd, or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when the findings went beyond the issues
of the case or are contrary to the admissions of the parties
to the case; (7) when the findings are contrary to those of
the trial court or the administrative agency; (8) when the
findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set
forth in the pleadings are not disputed; (10) when the
findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; and
(11) when certain relevant facts not disputed by the
parties were manifestly overlooked, which, if
properly considered, would justify a different
conclusion.[10]
Given the particular circumstances surrounding this case,
it cannot be justly and validly inferred that private
respondents indeed falsified their DTRs without the
presentation of the corresponding DTRs themselves, since
these DTRs were supposed to be the subject of the
falsification. A party to an administrative case must prove
his affirmative allegation with substantial evidence, and
the complainant before the Office of the Ombudsman
could not have established proof of the falsification absent
the alleged falsified documents. [11]
Thus, Maricar, who was found administratively guilty of
falsification of her DTRs for the period 1995-1997 even
without the DTRs having been presented during the
investigation, should be exonerated. With respect to
Marian, she was found liable for falsifying her DTRs for the
period 1996-2000, but offered in evidence at the
investigation were only her DTRs for May 1998 to
December 2000 (all indicating that she worked from 8:00
a.m. to 5:00 p.m.), which were available; and the
Certificates of Matriculation subpoenaed from Centro
Escolar University which evidently showed stark conflict
with her class schedules. She should thus be held
administratively culpable, but only with respect to the
DTRs for the period May 1998 to December 2000.
Accordingly, the administrative penalty should be
correspondingly reduced from one (1) year suspension
without pay to six (6) months suspension without pay.
However, since Marian is no longer employed with the
local government of Malabon City and the penalty of
suspension cannot be imposed upon her, she should,
instead, be penalized with a fine, following judicial
precedents.[12] Under the premises, a fine in the amount of
P5,000.00 would be sufficient.
WHEREFORE, the Motion for Reconsideration
is PARTIALLY GRANTED and the Decision dated January
29, 2008 is MODIFIED, such that Maricar Torres is
exonerated from administrative liability while Marian
Torres is instead imposed an administrative penalty of fine
in the amount of P5,000.00.
[ A.M. NO. P-05-2050 (FORMERLY A.M. NO. 05-7-418-
RTC), March 10, 2006 ]
OFFICE OF THE COURT ADMINISTRATOR,
COMPLAINANT, VS. ATTY. MARTA T. CUNANAN,
RESPONDENT
DECISION
CARPIO MORALES, J.:
For habitual tardiness, Atty. Marta T. Cunanan
(respondent), Clerk of Court V, Regional Trial Court, Branch
167, Pasig City, is administratively charged by the Office
of the Court Administrator (OCA).
In her report dated April 29, 2005,[1] Hermogena F. Bayani,
Supreme Court Chief Judicial Staff Officer, Leave Division
of the OCA, stated, inter alia, that respondent had incurred
tardiness for 12 times in September 2004 and 12 times in
October 2004.
In compliance with the OCA 1st Indorsement of May 13,
2005[2] requiring respondent to give her comment on her
reported tardiness, she, by 2nd Indorsement of June 3,
2005,[3] gave the following explanation: In September and
October 2004, she was suffering from respiratory ailment,
aggravated by severe attacks of chronic migraine and
hyperacidity which were accompanied with dizziness,
nausea, vomiting, loss of appetite, sleepless nights and
body weakness and discomfort. Aside from taking the
prescribed medication, her doctor had advised her to rest.
Despite her physical condition, however, she still reported
for work so as not to hamper the smooth flow of cases
pending before the court. And she worked overtime
beyond the prescribed hours of work to complete the
required daily hours of work.
Additionally, respondent informed that it takes two to
three hours from her residence for her to reach the court;
and while she has to rise very early in the morning and
report for work to avoid the rush hour, her physical
condition in September and October 2004 slowed down
her mobility, hence, the tardiness.
Respondent later submitted an "ADDITIONAL
EXPLANATION"[4] stating that she has "not been blessed
with a healthy body," and "beseeching . . . that [she] be
accorded with kindness and understanding."
After evaluating the case, the OCA recommended that
[5]
respondent be reprimanded and warned that a repetition
of the same or similar offense would warrant the
imposition of a more severe penalty.
Civil Service Memorandum Circular No. 23, Series of 1998
defines habitual tardiness as follows:
Any employee shall be considered habitually tardy if he
incurs tardiness, regardless of the number of minutes, ten
(10) times a month for at least two (2) months in a
semester or at least two (2) consecutive months during
the year. (Underscoring supplied)
Respondent admittedly committed tardiness. That her
ailments had rendered her physically weak does not,
however, exculpate her from compliance with the rules on
punctuality and observance of official time. Moral
obligations, performance of household chores, traffic
problems and health, domestic and financial concerns,
while mitigating, do not suffice to excuse habitual
tardiness.[6]
That court officials and employees must strictly observe
official time can never be overemphasized. By reason of
the nature and functions of their office, they must be role
models in the faithful observance of the constitutional
canon that public office is a public trust. Inherent in this
mandate is the observance of prescribed office hours and
the efficient use thereof for public service, if only to
recompense the Government and ultimately the people
who shoulder the cost of maintaining the Judiciary. [7]
It appearing that this is respondent's first offense of
habitual tardiness, the recommended penalty of
reprimand with warning is well-taken.
WHEREFORE, for habitual tardiness, Atty. Marta T.
Cunanan, Clerk of Court V of the Pasig City Regional Trial
Court, Branch 167, is meted the penalty of REPRIMAND ,
[8]
with warning that a repetition of the same or similar act
shall be dealt with more severely.
SO ORDERED.
Quisumbing, (Chairperson), Carpio, and Tinga, JJ., concur.
[1]
Rollo, p. 4.
[2]
Id. at 7.
[3]
Id. at 9.
[4]
Id. at 15-16.
[5]
Id. at 1-2.
Re: Imposition of Corresponding Penalties for Habitual
[6]
Tardiness Committed During the Second Semester of
2002, A.M. No. 00-06-09-SC, August 14, 2003, 409 SCRA 9,
15.
Administrative Circular No. 2-99 - Strict Observance of
[7]
Working Hours and Disciplinary Action for Absenteeism
and Tardiness; See also Habitual Tardiness, Rosemarie B.
Pe, Statistician II, Regional Trial Court-Office of the Clerk of
Court, Cebu City, A.M. No. 04-6-298-RTC, October 6, 2004,
440 SCRA 116, 119; Re: Habitual Tardiness of Guendolyn
C. Sison, Clerk III, Regional Trial Court, Br. 23, Cebu City,
A.M. No. P-04-1860, August 31, 2004, 437 SCRA 225,
227; Habitual Tardiness, Glenn A. Javear, MeTC-OCC,
Quezon City, A.M. No. 04-5-128-MeTC, September 30,
2004, 439 SCRA 503, 506.
Section 52 (C)(4), Rule VI of Civil Service Memorandum
[8]
Circular No. 19, Series of 1999 on the Revised Uniform
Rules on Administrative Cases in the Civil Service,
provides
C. The following are Light Offenses with
corresponding penalties:
xxxx
4. Frequent unauthorized tardiness (Habitual
Tardiness)
1st Offense - Reprimand
2nd Offense - Suspension 1-30 days
3rd Offense - Dismissal

THIRD DIVISION
[ G.R. No. 156225, January 29, 2008 ]
LETRAN CALAMBA FACULTY and EMPLOYEES
ASSOCIATION, Petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and COLEGIO DE SAN JUAN
DE LETRAN CALAMBA, INC., Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Assailed in the present Petition for Review
on Certiorari under Rule 45 of the Rules of Court is the
Decision[1] of the Court of Appeals (CA) promulgated on
May 14, 2002 in CA-G.R. SP No. 61552 dismissing the
special civil action for certiorari filed before it; and the
Resolution[2]dated November 28, 2002, denying
petitioner's Motion for Reconsideration.
The facts of the case are as follows:
On October 8, 1992, the Letran Calamba Faculty and
Employees Association (petitioner) filed with Regional
Arbitration Branch No. IV of the National Labor Relations
Commission (NLRC) a Complaint[3] against Colegio de San
Juan de Letran, Calamba, Inc. (respondent) for collection of
various monetary claims due its members. Petitioner
alleged in its Position Paper that:
xxxx
2) [It] has filed this complaint in behalf of its members
whose names and positions appear in the list hereto
attached as Annex A.
3) In the computation of the thirteenth month pay of its
academic personnel, respondent does not include as basis
therefor their compensation for overloads. It only takes
into account the pay the faculty members receive for their
teaching loads not exceeding eighteen (18) units. The
teaching overloads are rendered within eight (8) hours a
day.
4) Respondent has not paid the wage increases required
by Wage Order No. 5 to its employees who qualify
thereunder.
5) Respondent has not followed the formula prescribed by
DECS Memorandum Circular No. 2 dated March 10, 1989
in the computation of the compensation per unit of excess
load or overload of faculty members. This has resulted in
the diminution of the compensation of faculty members.
6) The salary increases due the non-academic personnel
as a result of job grading has not been given. Job grading
has been an annual practice of the school since 1980; the
same is done for the purpose of increasing the salaries of
non-academic personnel and as the counterpart of the
ranking systems of faculty members.
7) Respondent has not paid to its employees the balances
of seventy (70%) percent of the tuition fee increases for
the years 1990, 1991 and 1992.
8) Respondent has not also paid its employees the holiday
pay for the ten (10) regular holidays as provided for in
Article 94 of the Labor Code.
9) Respondent has refused without justifiable reasons and
despite repeated demands to pay its obligations
mentioned in paragraphs 3 to 7 hereof.
x x x x[4]
The complaint was docketed as NLRC Case No. RAB-IV-10-
4560-92-L.
On January 29, 1993, respondent filed its Position Paper
denying all the allegations of petitioner.
On March 10, 1993, petitioner filed its Reply.
Prior to the filing of the above-mentioned complaint,
petitioner filed a separate complaint against the
respondent for money claims with Regional Office No. IV of
the Department of Labor and Employment (DOLE).
On the other hand, pending resolution of NLRC Case No.
RAB-IV-10-4560-92-L, respondent filed with Regional
Arbitration Branch No. IV of the NLRC a petition to declare
as illegal a strike staged by petitioner in January 1994.
Subsequently, these three cases were consolidated. The
case for money claims originally filed by petitioner with
the DOLE was later docketed as NLRC Case No. RAB-IV-11-
4624-92-L, while the petition to declare the subject strike
illegal filed by respondent was docketed as NLRC Case No.
RAB-IV-3-6555-94-L.
On September 28, 1998, the Labor Arbiter (LA) handling
the consolidated cases rendered a Decision with the
following dispositive portion:
WHEREFORE, premises considered, judgment is hereby
rendered, as follows:
1. The money claims cases (RAB-IV-10-4560-92-L
and RAB-IV-11-4624-92-L) are hereby dismissed
for lack of merit;
2. The petition to declare strike illegal (NLRC Case
No. RAB-IV-3-6555-94-L) is hereby dismissed, but
the officers of the Union, particularly its President,
Mr. Edmundo F. Marifosque, Sr., are hereby
reprimanded and sternly warned that future
conduct similar to what was displayed in this case
will warrant a more severe sanction from this
Office.
SO ORDERED.[5]
Both parties appealed to the NLRC.
On July 28, 1999, the NLRC promulgated its
Decision[6] dismissing both appeals. Petitioner filed a
Motion for Reconsideration[7] but the same was denied by
the NLRC in its Resolution[8]dated June 21, 2000.
Petitioner then filed a special civil action for certiorari with
the CA assailing the above-mentioned NLRC Decision and
Resolution.
On May 14, 2002, the CA rendered the presently assailed
judgment dismissing the petition.
Petitioner filed a Motion for Reconsideration but the CA
denied it in its Resolution promulgated on November 28,
2002.
Hence, herein petition for review based on the following
assignment of errors:
 I without or in excess of jurisdiction or with grave abuse of
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE FACTUAL FINDINGS OF THE NATIONAL LABOR
RELATIONS COMMISSION CANNOT BE REVIEWED IN
CERTIORARI PROCEEDINGS.
II
THE COURT OF APPEALS GRAVELY ERRED IN REFUSING TO
RULE SQUARELY ON THE ISSUE OF WHETHER OR NOT THE
PAY OF FACULTY MEMBERS FOR TEACHING OVERLOADS
SHOULD BE INCLUDED AS BASIS IN THE COMPUTATION OF
THEIR THIRTEENTH MONTH PAY.
III
THE COURT OF APPEALS GRAVELY ERRED IN HOLDING
THAT THE DECISION OF THE NATIONAL LABOR RELATIONS
COMMISSION IS SUPPORTED BY SUBSTANTIAL EVIDENCE
AND IN NOT GRANTING PETITIONER'S MONETARY CLAIMS.
[9]
Citing Agustilo v. Court of Appeals,[10] petitioner contends
that in a special civil action forcertiorari brought before
the CA, the appellate court can review the factual findings
and the legal conclusions of the NLRC.
As to the inclusion of the overloads of respondent's faculty
members in the computation of their 13th-month pay,
petitioner argues that under the Revised Guidelines on the
Implementation of the 13th-Month Pay Law, promulgated
by the Secretary of Labor on November 16, 1987, the
basic pay of an employee includes remunerations or
earnings paid by his employer for services rendered, and
that excluded therefrom are the cash equivalents of
unused vacation and sick leave credits, overtime,
premium, night differential, holiday pay and cost-of-living
allowances. Petitioner claims that since the pay for excess
loads or overloads does not fall under any of the
enumerated exclusions and considering that the said
overloads are being performed within the normal working
period of eight hours a day, it only follows that the
overloads should be included in the computation of the
faculty members' 13th-month pay.
To support its argument, petitioner cites the opinion of the
Bureau of Working Conditions of the DOLE that payment of
teaching overload performed within eight hours of work a
day shall be considered in the computation of the 13 th-
month pay.[11]
Petitioner further contends that DOLE-DECS-CHED-TESDA
Order No. 02, Series of 1996 (DOLE Order) which was
relied upon by the LA and the NLRC in their respective
Decisions cannot be applied to the instant case because
the DOLE Order was issued long after the commencement
of petitioner's complaints for monetary claims; that the
prevailing rule at the time of the commencement of
petitioner's complaints was to include compensations for
overloads in determining a faculty member's 13th-month
pay; that to give retroactive application to the DOLE Order
issued in 1996 is to deprive workers of benefits which
have become vested and is a clear violation of the
constitutional mandate on protection of labor; and that, in
any case, all doubts in the implementation and
interpretation of labor laws, including implementing rules
and regulations, should be resolved in favor of labor.
Lastly, petitioner avers that the CA, in concluding that the
NLRC Decision was supported by substantial evidence,
failed to specify what constituted said evidence. Thus,
petitioner asserts that the CA acted arbitrarily in affirming
the Decision of the NLRC.
In its Comment, respondent contends that the ruling
in Agustilo is an exception rather than the general rule;
that the general rule is that in a petition for certiorari,
judicial review by this Court or by the CA in labor cases
does not go so far as to evaluate the sufficiency of the
evidence upon which the proper labor officer or office
based his or its determination but is limited only to issues
of jurisdiction or grave abuse of discretion amounting to
lack of jurisdiction; that before a party may ask that the
CA or this Court review the factual findings of the NLRC,
there must first be a convincing argument that the NLRC
acted in a capricious, whimsical, arbitrary or despotic
manner; and that in its petition for certiorari filed with the
CA, herein petitioner failed to prove that the NLRC acted
discretion.
Respondent argues that Agustilo is not applicable to the
present case because in the former case, the findings of
fact of the LA and the NLRC are at variance with each
other; while in the present case, the findings of fact and
conclusions of law of the LA and the NLRC are the same.
Respondent also avers that in a special civil action
for certiorari, the discretionary power to review factual
findings of the NLRC rests upon the CA; and that absent
any findings by the CA of the need to resolve any unclear
or ambiguous factual findings of the NLRC, the grant of the
writ of certiorari is not warranted.
Further, respondent contends that even granting that the
factual findings of the CA, NLRC and the LA may be
reviewed in the present case, petitioner failed to present
valid arguments to warrant the reversal of the assailed
decision.
Respondent avers that the DOLE Order is an
administrative regulation which interprets the 13th-Month
Pay Law (P.D. No. 851) and, as such, it is mandatory for
the LA to apply the same to the present case.
Moreover, respondent contends that the Legal Services
Office of the DOLE issued an opinion dated March 4, 1992,
[12]
that remunerations for teaching in excess of the regular
load, which includes overload pay for work performed
within an eight-hour work day, may not be included as
part of the basic salary in the computation of the 13 th-
month pay unless this has been included by company
practice or policy; that petitioner intentionally omitted any
reference to the above-mentioned opinion of the Legal
Services Office of the DOLE because it is fatal to its cause;
and that the DOLE Order is an affirmation of the opinion
rendered by the said Office of the DOLE.
Furthermore, respondent claims that, contrary to the
asseveration of petitioner, prior to the issuance of the
DOLE Order, the prevailing rule is to exclude excess
teaching load, which is akin to overtime, in the
computation of a teacher's basic salary and, ultimately, in
the computation of his 13th-month pay.
As to respondent's alleged non-payment of petitioner's
consolidated money claims, respondent contends that the
findings of the LA regarding these matters, which were
affirmed by the NLRC and the CA, have clear and
convincing factual and legal bases to stand on.
The Courts Ruling
The Court finds the petition bereft of merit.
As to the first and third assigned errors, petitioner would
have this Court review the factual findings of the LA as
affirmed by the NLRC and the CA, to wit.
With respect to the alleged non-payment of benefits under
Wage Order No. 5, this Office is convinced that after the
lapse of the one-year period of exemption from
compliance with Wage Order No. 5 (Exhibit 1-B), which
exemption was granted by then Labor Minister Blas Ople,
the School settled its obligations to its employees,
conformably with the agreement reached during the
management-employees meeting of June 26, 1985
(Exhibits 4-B up to 4-D, also Exhibit 6-x-1). The
Union has presented no evidence that the settlement
reached during the June 26, 1985 meeting was the result
of coercion. Indeed, what is significant is that the
agreement of June 26, 1985 was signed by Mr. Porferio
Ferrer, then Faculty President and an officer of the
complaining Union. Moreover, the samples from the
payroll journal of the School, identified and offered in
evidence in these cases (Exhibits 1-C and 1-D), shows
that the School paid its employees the benefits under
Wage Order No. 5 (and even Wage Order No. 6) beginning
June 16, 1985.
Under the circumstances, therefore, the claim of the Union
on this point must likewise fail.
The claim of the Union for salary differentials due to the
improper computation of compensation per unit of excess
load cannot hold water for the simple reason that during
the Schoolyears in point there were no classes from June
1-14 and October 17-31. This fact was not refuted by the
Union. Since extra load should be paid only when actually
performed by the employees, no salary differentials are
due the Union members.
The non-academic members of the Union cannot legally
insist on wage increases due to Job Grading. From the
records it appears that Job Grading is a system adopted
by the School by which positions are classified and
evaluated according to the prescribed qualifications
therefor. It is akin to a merit system whereby salary
increases are made dependent upon the classification,
evaluation and grading of the position held by an
employee.
The system of Job Grading was initiated by the School in
Schoolyear 1989-1990. In 1992, just before the first of the
two money claims was filed, a new Job Grading process
was initiated by the School.
Under the circumstances obtaining, it cannot be argued
that there were repeated grants of salary increases due to
Job Grading to warrant the conclusion that some benefit
was granted in favor of the non-academic personnel that
could no longer be eliminated or banished under Article
100 of the Labor Code. Since the Job Grading exercises of
the School were neither consistent nor for a considerable
period of time, the monetary claims attendant to an
increase in job grade are non-existent.
The claim of the Union that its members were not given
their full share in the tuition fee increases for the
Schoolyears 1989-1990, 1990-1991 and 1991-1992 is
belied by the evidence presented by the School which
consists of the unrefuted testimony of its Accounting
Coordinator, Ms. Rosario Manlapaz, and the reports
extrapolated from the journals and general ledgers of the
School (Exhibits 2, 2-A up to 2-G). The evidence under then Acting DOLE Secretary Cresenciano B. Trajano.
indubitably shows that in Schoolyear 1989-1990, the
School incurred a deficit of P445,942.25, while in
Schoolyears 1990-1991 and 1991-1992, the School paid
out, 91% and 77%, respectively, of the increments in the
tuition fees collected.
As regards the issue of non-payment of holiday pay, the
individual pay records of the School's employees, a
sample of which was identified and explained by Ms.
Rosario Manlapaz (Exhibit 3), shows that said School
employees are paid for all days worked in the year. Stated
differently, the factor used in computing the salaries of the
employees is 365, which indicates that their regular
monthly salary includes payment of wages during all legal
holidays.[13]
This Court held in Odango v. National Labor Relations
Commission[14] that:
The appellate courts jurisdiction to review a decision of
the NLRC in a petition for certiorari is confined to issues of
jurisdiction or grave abuse of discretion. An extraordinary
remedy, a petition for certiorari is available only and
restrictively in truly exceptional cases. The sole office of
the writ of certiorari is the correction of errors of
jurisdiction including the commission of grave abuse of
discretion amounting to lack or excess of jurisdiction. It
does not include correction of the NLRCs evaluation of the
evidence or of its factual findings. Such findings are
generally accorded not only respect but also finality. A
party assailing such findings bears the burden of showing
that the tribunal acted capriciously and whimsically or in
total disregard of evidence material to the controversy, in
order that the extraordinary writ of certiorari will lie. [15]
In the instant case, the Court finds no error in the ruling of
the CA that since nowhere in the petition is there any
acceptable demonstration that the LA or the NLRC acted
either with grave abuse of discretion or without or in
excess of its jurisdiction, the appellate court has no reason
to look into the correctness of the evaluation of evidence
which supports the labor tribunals' findings of fact.
Settled is the rule that the findings of the LA, when
affirmed by the NLRC and the CA, are binding on the
Supreme Court, unless patently erroneous. [16] It is not the
function of the Supreme Court to analyze or weigh all over
again the evidence already considered in the proceedings
below.[17] In a petition for review on certiorari, this Courts
jurisdiction is limited to reviewing errors of law in the
absence of any showing that the factual findings
complained of are devoid of support in the records or are
glaringly erroneous.[18] Firm is the doctrine that this Court
is not a trier of facts, and this applies with greater force in
labor cases.[19] Findings of fact of administrative agencies
and quasi-judicial bodies, which have acquired expertise
because their jurisdiction is confined to specific matters,
are generally accorded not only great respect but even
finality.[20] They are binding upon this Court unless there is
a showing of grave abuse of discretion or where it is
clearly shown that they were arrived at arbitrarily or in
utter disregard of the evidence on record. [21] We find none
of these exceptions in the present case.
In petitions for review on certiorari like the instant case,
the Court invariably sustains the unanimous factual
findings of the LA, the NLRC and the CA, specially when
such findings are supported by substantial evidence and
there is no cogent basis to reverse the same, as in this
case.[22]
The second assigned error properly raises a question of
law as it involves the determination of whether or not a
teacher's overload pay should be considered in the
computation of his or her 13th-month pay. In resolving this
issue, the Court is confronted with conflicting
interpretations by different government agencies.
On one hand is the opinion of the Bureau of Working
Conditions of the DOLE dated December 9, 1991, February
28, 1992 and November 19, 1992 to the effect that if
overload is performed within a teacher's normal eight-
hour work per day, the remuneration that the teacher will
get from the additional teaching load will form part of the
basic wage.[23]
This opinion is affirmed by the Explanatory Bulletin on the
Inclusion of Teachers' Overload Pay in the 13th-Month Pay
Determination issued by the DOLE on December 3, 1993
Pertinent portions of the said Bulletin read as follows:
1. Basis of the 13th-month pay computation
The Revised Implementing Guidelines of the 13th-
Month Pay Law (P.D. 851, as amended) provides
that an employee shall be entitled to not less than
1/12 of the total basic salary earned within a
calendar year for the purpose of computing such
entitlement. The basic wage of an employee shall
include:
x x x all remunerations or earnings paid by his
employer for services rendered but do not include
allowances or monetary benefits which are not
considered or integrated as part of the regular
or basic salary, such as the cash equivalent of
unused vacation and sick leave credits, overtime,
premium, night differential and holiday pay, and
cost-of-living allowances. However, these salary-
related benefits should be included as part of
the basic salary in the computation of the
13th month pay if by individual or collective
agreement, company practice or policy, the same
are treated as part of the basic salary of the
employees.
Basic wage is defined by the Implementing Rules
of RA 6727 as follows:
Basic Wage means all remuneration or earnings
paid by an employer to a worker for services
rendered on normal working days and hours but
does not include cost of living allowances, 13th-
month pay or other monetary benefits which are
not considered as part of or integrated into the
regular salary of the workers xxx.
The foregoing definition was based on Article 83
of the Labor Code which provides that
the normal hours of work of any employee
shall not exceed eight (8) hours a day. This
means that the basic salary of an employee for
the purpose of computing the 13 th-month pay
shall include all remunerations or earnings paid by
an employer for services rendered during normal
workinghours.
2. Overload work/pay
Overload on the other hand means the load in
excess of the normal load of private school
 teachers as prescribed by the Department of
Education, Culture and Sports (DECS) or the
policies, rules and standards of particular private
schools. In recognition of the peculiarities of the
teaching profession, existing DECS and School
Policies and Regulations for different levels of
instructions prescribe a regular teaching load, the
total actual teaching or classroom hours of which
a teacher can generally perform in less than eight
(8) hours per working day. This is because
teaching may also require the teacher to do
additional work such as handling an advisory
class, preparation of lesson plans and teaching
aids, evaluation of students and other related
activities. Where, however a teacher is engaged
to undertake actual additional teaching work after
completing his/her regular teaching load, such
additionalwork is generally referred to
as overload. In short, additional work in excess of
the regular teaching load is
overload work. Regular teaching load and
overload work, if any, may constitute a
teacher's working day.
Where a teacher is required to perform such
overload within the eight (8) hours normal
working day, such overload compensation
shall be considered part of the basic pay for
the purpose of computing the teacher's 13 th-
month pay. Overload work is sometimes
misunderstood as synonymous to overtime work
as this term is used and understood in the Labor
Code. These two terms are not the same because
overtime work iswork rendered in excess of
normal working hours of eight in a day (Art. 87,
Labor Code). Considering that overload work may
be performed either within or outside
eight hours in a day, overload work may or may
not be overtimework.
3. Concluding Statement
In the light of the foregoing discussions, it is the
position of this Department that all basic
salary/wage representing payments earned for
actual work performed during or within the
eight hours in a day, including payments for
overload workwithin eight hours, form part of
basic wage and therefore are to be included in the
computation of 13th-month pay mandated by PD
851, as amended.[24](Underscoring supplied)
On the other hand, the Legal Services Department of the
DOLE holds in its opinion of March 4, 1992 that
remunerations for teaching in excess of the regular load
shall be excluded in the computation of the 13 th-month
pay unless, by school policy, the same are considered as
part of the basic salary of the qualified teachers. [25]
This opinion is later affirmed by the DOLE Order, pertinent
portions of which are quoted below:
xxxx
2. In accordance with Article 83 of the Labor Code of
the Philippines, as amended, the
normal hours of work of school academic
personnel shall not exceed eight (8) hours a
day. Any work done in addition to the eight
(8)hours daily work shall constitute
overtime work.
3. The normal hours of work of teaching or academic
personnel shall be based on their normal or
regular teaching loads. Such normal or regular
teaching loads shall be in accordance with the
policies, rules and standards prescribed by the
Department of Education, Culture and Sports, the
Commission on Higher Education and the
Technical Education and Skills Development
Authority. Any teaching load in excess of the
normal or regular teaching load shall be
considered as overload. Overload partakes of
the nature of temporary extra assignment and
compensation therefore shall be considered as an
overload honorarium if performed within the 8-
hour workperiod and does not form part of the
regular or basic pay. Overload performed
beyond the eight-hour daily work is
overtime work.[26] (Emphasis supplied)
It was the above-quoted DOLE Order which was used by
the LA as basis for ruling against herein petitioner.
The petitioners claim that the DOLE Order should not be
made to apply to the present case because said Order was
issued only in 1996, approximately four years after the
present case was initiated before the Regional Arbitration
Branch of the NLRC, is not without basis. The general rule
is that administrative rulings and circulars shall not be
given retroactive effect.[27]
Nevertheless, it is a settled rule that when an
administrative or executive agency renders an
opinion or issues a statement of policy, it merely
interprets a pre-existing law and the administrative
interpretation is at best advisory for it is the courts
that finally determine what the law means.[28]
In the present case, while the DOLE Order may not be
applicable, the Court finds that overload pay should be
excluded from the computation of the 13 th-month pay of
petitioner's members.
In resolving the issue of the inclusion or exclusion of
overload pay in the computation of a teacher's 13 th-month
pay, it is decisive to determine what basic salary
includes and excludes.
In this respect, the Court's disquisition in San Miguel
Corporation v. Inciong[29] is instructive, to wit:
Under Presidential Decree 851 and its implementing rules,
the basic salary of an employee is used as the basis in the
determination of his 13th month pay. Any compensations or
remunerations which are deemed not part of the basic pay
is excluded as basis in the computation of the mandatory
bonus.
Under the Rules and Regulations Implementing
Presidential Decree 851, the following compensations are
deemed not part of the basic salary:
a) Cost-of-living allowances granted pursuant to
Presidential Decree 525 and Letter of Instruction No. 174;
b) Profit sharing payments;
c) All allowances and monetary benefits which are not
considered or integrated as part of the regular basic salary
of the employee at the time of the promulgation of the
Decree on December 16, 1975.
Under a later set of Supplementary Rules and Regulations
Implementing Presidential Decree 851 issued by the then
Labor Secretary Blas Ople, overtime pay, earnings and
other remunerations are excluded as part of the basic
salary and in the computation of the 13th-month pay.
The exclusion of cost-of-living allowances under
Presidential Decree 525 and Letter of Instruction No. 174
and profit sharing payments indicate the intention to strip
basic salary of other payments which are properly
considered as fringe benefits. Likewise, the catch-all
exclusionary phrase all allowances and monetary benefits
which are not considered or integrated as part of the basic
salary shows also the intention to strip basic salary of any
and all additions which may be in the form of allowances
or fringe benefits.
Moreover, the Supplementary Rules and Regulations
Implementing Presidential Decree 851 is even more
emphatic in declaring that earnings and other
remunerations which are not part of the basic salary shall
not be included in the computation of the 13 th-month pay.
While doubt may have been created by the prior Rules and
Regulations Implementing Presidential Decree 851 which
defines basic salary to include all remunerations or
earnings paid by an employer to an employee, this cloud
is dissipated in the later and more controlling
Supplementary Rules and Regulations which categorically,
exclude from the definition of basic salary earnings and
other remunerations paid by employer to an employee. A
cursory perusal of the two sets of Rules indicates that
what has hitherto been the subject of a broad inclusion is
now a subject of broad exclusion. The Supplementary
Rules and Regulations cure the seeming tendency of the
former rules to include all remunerations and earnings
within the definition of basic salary.
The all-embracing phrase earnings and other
remunerations which are deemed not part of the basic
salary includes within its meaning payments for sick,
vacation, or maternity leaves, premium for works
performed on rest days and special holidays, pay for
regular holidays and night differentials. As such they are
deemed not part of the basic salary and shall not be
considered in the computation of the 13th-month pay. If
they were not so excluded, it is hard to find any earnings
and other remunerations expressly excluded in the
computation of the 13th-month pay. Then the exclusionary
provision would prove to be idle and with no purpose.

This conclusion finds strong support under the Labor Code

of the Philippines. To cite a few provisions:

Art. 87 Overtime work. Work may be performed beyond

eight (8) hours a day provided that the employee is paid
for the overtime work, additional compensation equivalent
to his regular wage plus at least twenty-five (25%) percent
thereof.

It is clear that overtime pay is an additional

compensation other than and added to the regular wage
or basic salary, for reason of which such is categorically
excluded from the definition of basic salary under the
Supplementary Rules and Regulations Implementing
Presidential Decree 851.

In Article 93 of the same Code, paragraph

c.) work performed on any special holiday shall be paid

an additional compensation of at least thirty percent
(30%) of the regular wage of the employee.

It is likewise clear that premium for special holiday which

is at least 30% of the regular wage is an additional
compensation other than and added to the regular wage
or basic salary. For similar reason it shall not be
considered in the computation of the 13th -month pay.[30]
In the same manner that payment for
overtime work and work performed during special holidays
is considered as additional compensation apart and [ A. M. No. 08-1-07-MeTC, July 14, 2008 ]
distinct from an employee's regular wage or basic salary, OFFICE OF THE COURT ADMINISTRATOR,
an overload pay, owing to its very nature and definition, PETITIONER, VS. EMMA ANNIE D. ARAFILES COURT
may not be considered as part of a teacher's regular or LEGAL RESEARCHER, METROPOLITAN TRIAL COURT
basic salary, because it is being paid for (METC), BRANCH 48, PASAY CITY, RESPONDENT.
additional work performed in excess of the regular
teaching load. DECISION

The peculiarity of an overload lies in the fact that it may
be performed within the normal eight-hour working day.
This is the only reason why the DOLE, in its explanatory
bulletin, finds it proper to include a teacher's overload pay
in the determination of his or her 13th-month pay.
However, the DOLE loses sight of the fact that even if it is
performed within the normal eight-hour working day, an
overload is still an additional or extra teaching work which
is performed after the regular teaching load has been
completed. Hence, any pay given as compensation for
such additional work should be considered as extra and
not deemed as part of the regular or basic salary.
BRION, J.:
The Leave Division of the Office of the Court Administrator
submitted a Report of Tardiness on December 6, 2007
stating that Ms. Emma Annie D. Arafiles, Court Legal
Researcher, Metropolitan Trial Court (MeTC), Branch 48,
Pasay City, incurred tardiness in September and October
2007. She was tardy 11 times in September and 16 times
in October. The Report was docketed as A.M. No. 08-107-
MeTC (Habitual Tardiness of Emma Annie D. Arafiles,
MeTC, Branch 48, Pasay City.)

Moreover, petitioner failed to refute private respondent's
contention that excess teaching load is paid by the hour,
while the regular teaching load is being paid on a monthly
basis; and that the assignment of overload is subject to
the availability of teaching loads. This only goes to show
that overload pay is not integrated with a teacher's basic
salary for his or her regular teaching load. In addition,
overload varies from one semester to another, as it is
dependent upon the availability of extra teaching loads. As
such, it is not legally feasible to consider payments for
such overload as part of a teacher's regular or basic
salary. Verily, overload pay may not be included as basis
for determining a teacher's 13th-month pay.
Court Administrator Zenaida N. Elepao (through a
1st Indorsement dated January 14, 2008) required Ms.
Arafiles to comment on the report within ten (10) days
from receipt.
Ms. Arafiles complied with a letter-comment dated January
30, 2008. She admitted the tardiness and gave various
explanations, specifically: that she had no maid; that she
had to attend to the needs of her school children ages
eight (8) and two (2) years; and that she was
hypertensive. She asked for "human consideration" and
apologized for her tardiness, promising that she would no
longer be tardy in the future.

WHEREFORE, the instant petition is DENIED. The
assailed Decision and Resolution of the Court of Appeals
are AFFIRMED.
SO ORDERED.
Ynares-Santiago, (Chairperson), Corona,
Nachura, and Reyes, JJ., concur.
Court Administrator Elepao evaluated Ms. Arafiles'
explanation and found no justification for her habitual
tardiness. The Court Administrator recommended (1) that
the Report be redocketed as a regular administrative
matter, and (2) that Ms. Arafiles be given a reprimand with
a warning that a repetition of the same offense would
warrant the imposition of a more severe penalty.
The law requires all government officials and employees to
render not less than eight (8) hoursof work per day for five
(5) days a week, or a total of forty (40) hours of work per
week, exclusive of time for lunch. As a rule,
these hours are from eight (8) o'clock in the morning to
five (5) o'clock in the afternoon.[1]

Under CSC Memorandum Circular No. 14, S. 1991, [2] an

officer or employee of the civil service is considered
habitually tardy if he incurs tardiness, regardless of the
number of minutes, ten (10) times a month for at least
two (2) months in a semester or for at least two (2)
consecutive months during the year.

We have previously ruled that non-office obligations,

household chores, traffic problems, and health, domestic
and financial concerns are not

sufficient reasons to excuse or justify habitual tardiness.

[3]
These are the types of reasons Ms. Arafiles gave; hence,
we cannot free her from liability for her infractions.

Time and again, we have reminded officials and

employees of the Judiciary that by reason of the nature
and functions of their office, they must be role models in
the faithful observance of the constitutional principle that
public office is a public trust. A way of doing this is
through the strict observance of prescribed
office hours and the efficient use of every working
moment, if only to give back the true worth of what the
Government, and ultimately, the people, pay in
maintaining the Judiciary.[4] In short, in the public service,
punctuality is a virtue, absenteeism and tardiness are
impermissible.[5]

We agree with Court Administrator Elepao that "(B)y

being habitually tardy, she [respondent] has fallen short of
the stringent standard conduct demanded from everyone
connected with the administration of justice" and thus
merits the prescribed penalty. Under Section 52(c)(4), Rule
VI of CSC Memorandum Circular No. 19, Series of 1999,
habitual tardiness is penalized as follows: first offense,
reprimand; second offense, suspension for 1-30 days; and
third offense, dismissal from the service.

WHEREFORE, we find respondent Ms. Emma Annie D.

Arafiles, Court Legal Researcher, MeTC, Branch 48, Pasay
City, GUILTY of habitual tardiness. Pursuant to Section
52(c)(4), Rule VI of CSC Memorandum Circular No. 19,
Series of 1999, this first offense merits the
penalty of REPRIMAND with the WARNING that a more
severe penalty shall be imposed for the repetition of the
same or a similar offense in the future.

SO ORDERED.

Quisumbing, (Chairperson), Carpio Morales,

Tinga, and Velasco, Jr., JJ., concur.
Re: Anonymous Complaint Against Ms. Rowena
[1]
Marinduque, assigned at PHILJA Dev't
Center, Tagaytay City, A.M. No. 2004-25-SC, January 23,
2006, 479 SCRA 343, citing Section 5, Rule XVII, CSC
Resolution No. 91-1631, Rules Implementing Book V of
Executive Order No. 292 and Other Pertinent Civil Service
Rules dated December 27, 1991.
THIRD DIVISION
[ G.R. No. 196883, August 15, 2012 ]
GLOBAL RESOURCE FOR OUTSOURCED WORKERS
(GROW), INC. AND MS RETAIL KSC/MS RETAIL
CENTRAL MARKETING CO. AND MR. EUSEBIO H.
TANCO, PETITIONERS, VS. ABRAHAM C. VELASCO
AND NANETTE T. VELASCO, RESPONDENTS.
DECISION
PERLAS-BERNABE, J.:

[2]
See also CSC Memorandum Circular No. 23, S. 1998.
Ibid, citing Re: Imposition of Corresponding Penalties on
[3]
Employees of this Court for Habitual Tardiness Committed
During the Second Semester of 2000, A.M. No. 00-6-09-SC,
November 27, 2002, 393 SCRA 1.
Administrative Circular No. 2-99, "Strict Observance of
[4]
Working Hours and Disciplinary Action for Absenteeism
and Tardiness, dated January 15, 1999.
Re: Imposition of Corresponding Penalties for Habitual
[5]
Tardiness Committed During the Second Semester of
2002, supra, footnote 2, citing Re: Imposition of
Corresponding Penalties for Habitual Tardiness Committed
During the Second Semester of 2002, A.M. No. 00-6-69-SC,
November 27, 2002, 393 SCRA 1.
The power to dismiss an employee is a recognized
prerogative inherent in the employer's right to freely
manage and regulate his business.[1] However, this power
is never unbridled and the exercise thereof should
unfailingly comply with both substantive and procedural
requirements of the law.
This is an appeal under Rule 45 of the Revised Rules of
Court which seeks to reverse the January 31, 2011
Decision[2] and May 13, 2011 Resolution[3] of the Court of
Appeals holding the petitioners liable for overtime pay,
nominal damages and attorney's fees.
The Facts
Petitioner Global Resource for Outsourced Workers
(GROW), Inc. is a domestic corporation engaged in the
placement of workers for overseas deployment, with
petitioner Eusebio Tanco as its President.[4]
Sometime in January 2008, respondents Abraham Velasco
and Nanette Velasco (collectively respondents) -were hired
by petitioners MS Retail KSC/MS Retail Central Marketing
Co. (MS Retail),[5] through GROW, as Circus Performer and
Circus Performer-Assistant, respectively, at MS Retail's
Store located in Kuwait.
Based on their employment contracts, respondents
Abraham and Nanette were entitled to monthly salaries of
KD 650 or USD 2,303.92 and KD 150 or USD 531.87,
respectively,[6]under the following work schedule:[7]
No. of shows per day: 4 shows/day
No. of work days per week: 6 days/wk.
No. of work hours per month-: 48 hrs/mo.
It was also stipulated that MS Retail may determine
the hours of work assigned to respondents "from time to.
time in accordance with the general and particular
requirements of the operation" of MS Retail.[8] Moreover,
when respondents are not actually performing shows, they
may be asked to carry out duties as the business may
require.[9]
Respondents arrived in Kuwait on February 22, 2008 and
were made to perform shows after a brief orientation. In a
meeting with the store manager of MS Retail, they brought
up their workhours and show schedules as provided for in
their employment contract. They were, however, informed
that the work hours of "48 hrs/mo" as appearing in the
contract, was a typographical error as the correct number
of their working hours was 48 hours per week, to which
they complied.
On August 26, 2008, respondents went to Thailand on
approved vacation leave. On September 2, 2008,
respondent Abraham sent an electronic mail (email) to Mr.
Joseph San Juan, the Human Resources Coordinator of MS
Retail, advising him of their inability to return for work on
September 3, 2008 because of the political protests in
Thailand and that they had rebooked their return flight to
Kuwait on September 10, 2008.[10] However, contrary to
their representation, the respondents proceeded to the
Philippines on September 9, 2008.[11]
On September 17, 2008, Mr. San Juan emailed
respondents asking for their definite date of return to
Kuwait and warning them that if they do not immediately
return to work before the end of the month, they will be
dismissed from employment for cause.[12]
The respondents ignored the said email. Thus, on
September 23, 2008, MS Retail terminated their
employment through email, which reads: [13]
Please be informed that we are terminating your
employment contract with MS Retail effective today, 23rd
September 2008. Due to Kuwait Private Labour Law Article
55. "The employer has the right to terminate the labourer
without notice and indemnity in the following cases:
c) If he has been absent from duty for more that [sic]
seven consecutive days without any legal reason."
Therefore, company decided to terminate your
employment contract and blacklist both of you in entering
Kuwait.
Consider this email as your official termination letter.
Unknown to MS Retail, the respondents had already filed a
labor case for constructive dismissal, breach of contract,
and payment of the remaining portion of their contracts,
damages and attorney's fees on September 15, 2008.
[14]
They claimed that, contrary to the terms of their
employment contracts, they were made to work for at
least eight (8) hours a day or 48 hours per week, without
overtime pay. Moreover, they were assigned work not
related to their task as circus performers. Hence, they
were deemed to have been constructively dismissed,
warranting the payment of the unexpired portion of their
contract, damages and attorney's fees. [15]
Labor Arbiter's Ruling
The Labor Arbiter (LA) granted respondents' claim in her
April 8. 2009 Decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, judgment is hereby
rendered ordering GLOBAL RESOURCES FOR OUTSOURCED
WORKERS AND MS RETAIL KSC jointly and severally liable
to pay complainants Abraham C. Velasco and Nannette T.
Velasco their salaries for the unexpired portion of their
employment contract for six (6) months:
1.) Abraham Velasco
(US$ 2,303.92 x 6 mos.) = US$ 13,823.52
2.) Nannette Velasco
(US$.531.87 x 6 mos.) = US$43,191.22*
TOTAL US$57,014.74**
3.) Ten (10%) percent Atty.'s fees- US$
5,701.47***
All other claims are dismissed for want of basis.
SO ORDERED.[16]
The LA found respondents to have been constructively
dismissed from service without just cause, debunking
petitioners' defense that respondents abandoned
their work as-shown by the immediate filing of the
complaint for illegal dismissal.[17]
Respondents' claim for overtime pay was, however,
denied for the reason that indeed a typographical error
was committed in providing the number of
working hours as 48 hours per month instead of
48 hours per week. The LA made the observation that "it
is a known practice that employees work for a regular
eight (8) hours a day and 48 hours for 6 days work."[18]
Only petitioners filed an appeal before the National Labor
Relations Commission (NLRC). The respondents did not
appeal the denial of their claim for overtime pay.
Ruling of NLRC
On October 30, 2009, the NLRC Second Division rendered
its Decision[19] dismissing the complaint for
constructive/illegal dismissal on the ground of
abandonment.[20]
The NLRC found no basis to sustain, the charge of
constructive dismissal premised on petitioners' act of
imposing a greater number of working hours different from
that stipulated in the employment contract. It affirmed the
standard practice of other employees working as party
entertainers in the store of MS Retail of rendering an
average of eight (8) hours a day or forty-eight
(48) hours work for one (1) week, as well as the LA's
finding of typographical error in the
working hours provided for under respondents' contract.
[21]
In contrast to the findings of the LA, the NLRC gave
credence to petitioners' claim of abandonment, holding
that the respondents' "continuing absence
from work without any justifiable reason, notwithstanding
notice with warning for them to return to work, coupled
with their actual flight back to Philippines, indicated
an animus to no longer go back to theirwork in
Kuwait."[22] Respondents' Motion for Reconsideration[23] was
denied in the NLRC Resolution dated January 25, 2010,
prompting the filing of a petition for certiorari before the
Court of Appeals.
Ruling of the Court of Appeals
On January 31, 2011, the CA rendered the assailed
Decision[24] holding that while respondents were validly
terminated, the petitioners failed to comply with the twin-
notice rule, to wit: first informing the respondents of the
charge and affording them an opportunity to be heard,
then subsequently advising them of their.termination.
Petitioners were then held liable for nominal damages and
attorney's fees. Finally, the CA found respondents entitled
to overtime pay for work rendered in excess of
48 hours per month.
The dispositive portion of the assailed Decision reads:
WHEREFORE, premises considered, the Petition for
Certiorari is hereby PARTLY GRANTED. Accordingly, the
assailed Decision dated October 30, 2009 and Resolution
January 25, 2010 of the NLRC are AFFIRMED with
MODIFICATION. MS Retail is hereby ordered to pay
petitioners the following:
1. PhP 30,000.00 each for non-compliance with statutory
due process; and
2. Overtime pay for work rendered in excess of the forty
eight (48) hours work per month.
The case is hereby REMANDED to the Labor Arbiter for
proper computation of the money claims.
SO ORDERED.
Issues Presented Before the Court
In the present petition for review, the validity of the
dismissal of the respondents was not assailed. The only
issues raised are:
(1) Whether or not the CA erred in granting the
respondents overtime pay considering that its denial by
the LA was not appealed by the respondents.
(2) Whether or not the CA erred in awarding nominal
damages and attorney's fees to the respondents.
The Court's Ruling
The petition is partly meritorious.
The petitioners contend that the failure of the respondents
to appeal the ruling of the LA denying the latter's claim for
overtime pay rendered the same final and binding upon
them. The contention lacks merit.
In the case of Bahia Shipping Services, Inc. v. Chua,[25] the
Court cited an exception to the rule that a party who has
not appealed cannot obtain any affirmative relief other
than the one granted in the appealed decision. It stated:
Indeed, a party who has failed to appeal from a judgment
is deemed to have acquiesced to it and can no longer
obtain from the appellate court any affirmative relief other
than what was already granted under said judgment.
However, when strict adherence to such technical rule will
impair a substantive right, such as that of an illegally
dismissed employee to monetary compensation as
provided by law, then equity dictates that the Court set
aside the rule to pave the way for a full and just
adjudication of the case.
In the present case, although respondents were found to
have been dismissed for cause, depriving them of
overtime pay, if rightly due to them, would still amount to
an impairment of substantive rights. Thus, following the
dictates of equity and as an exception to the general rule,
the Court finds it proper for the CA to have passed upon
the matter of overtime pay, despite the fact that
respondents did not appeal from the LA Decision denying
the same claim.
Be that as it may, a perusal of the records disclosed a
dearth of evidence to support an award of overtime pay.
As a general rule, the factual findings of the CA when
supported by substantial evidence on record are final and
conclusive and may not be reviewed on appeal.[26] This is,
however, subject to several exceptions, one of which is
when there is a conflict between the factual findings of the
CA and the NLRC, as in this case, warranting review by the
Court.[27]
Petitioners argue that the "48 hours per
month" work schedule stipulated in the employment
contract is a mere typographical error, the true intention
of the parties being for the respondents to render work of
at least 48 hours per week.
The Court agrees with the petitioners.
Obligations arising from contracts, like an employment
contract, have the force of law between the contracting
parties and should be complied with in good faith. [28] When
the terms of a contract are clear and leave no doubt as to
the intention of the contracting parties, the literal meaning
of its stipulations governs.[29] However, when the contract
is vague and ambiguous, as in the case at bar, it is the
Court's duty to determine the real intention of the
contracting parties considering the contemporaneous and
subsequent acts of the latter.[30]
The employment contracts of the respondents provide
that their work schedule shall be as follows:[31]
No. of shows per day: 4 shows/day
No. of work days per week: 6 days/wk.
No. of work hours per month: 48 hrs/mo.
The respondents agreed to render four (4) showfs per day
with an estimated performance time of thirty (30)
minutes. However, it should also be noted that
respondents were given time to prepare before each show
and time to rest after every performance; thus,
respondents would normally consume two (2) hours for
each show.[32] If respondents were required to render at
least four (4) shows a day, they necessarily had
to work for at least eight (8) hoursa day. Since the
petitioners employed a six-day workweek, it is an
inevitable conclusion that respondents were required
to work for at least 48 hours per week.
The Court also notes that the respondents were properly
apprised of the error in their employment contracts.
Despite ample opportunity -- more than half a year -- to air
out their misgivings on the matter and ask their employer
for overtime pay, if they really believed that the
48 hours work per month was not erroneous, respondents
did nothing. Respondents did not complain or assail the
implementation of their true number of work hours.
Instead, they proceeded to carry out their work under the
correct 48-hour week schedule for more than half of the
entire duration of their employment contract, without any
protest. It was only before the LA that respondents raised
their complaint on the matter for the first time. These
circumstances indicate that respondents' protest was a
mere afterthought. As such, it cannot sway the Court to
accept that work for 48 hours per month was the true
intention of the parties.
An evaluation of the terms of the employment contracts
and the acts of the parties indeed reveal that their true
intention was for the respondents to perform work of at
least forty eight (48) hours per week, and not 48 hours per
month.
It should be emphasized that in case of conflict between
the text of a contract and the intent of the parties, it is the
latter that prevails,[33] for intention is the soul of a
contract, not its wording which is prone to mistakes,
inadequacies or ambiguities.[34] To hold otherwise would
give life, validity, and precedence to mere typographical
errors and defeat the very purpose of agreements. [35]
Accordingly, the CA's award for overtime pay must
necessarily be recalled.
On the second issue, it is unassailed that the respondents
abandoned their work when they failed without valid
reason to resume their duties after their leave of absence
expired on September 3, 2008. Thus, the CA correctly
ruled that the termination of the respondents'
employment on September 23, 2008 was with just cause.
Nonetheless, the Court cannot absolve petitioners from
liability.
Book V, Rule XIV, of the Omnibus Rules Implementing the
Labor Code outlines the procedure for termination of
employment, to wit:
Section 1. Security of tenure and due process. No
worker shall be dismissed except for a just or authorized
cause provided by law and after due process.
Section 2. Notice of Dismissal. Any employer who seeks
to dismiss a worker shall furnish him a written notice
stating the particular acts or omissions constituting the
grounds for his dismissal. In cases of abandonment
of work, the notice shall be served at the worker's last
known address.
xxx
Section 5. Answer and hearing. The worker may answer
the allegations stated against him in the notice of
dismissal within a reasonable period from receipt of such
notice. The employer shall afford the worker ample
opportunity to be heard and to defend himself with the
assistance of his representatives, if he so desires.
Section 6. Decision to dismiss. The employer shall
immediately notify a worker in writing of a decision to
dismiss him stating clearly the reasons therefor.
Appeals are hereby MODIFIED by DELETING the award
for overtime pay andORDERING petitioners to jointly and
severally pay each of the respondents PhP30,000.00 as
nominal damages and PhP30,000.00 as attorney's fees.
SO ORDERED.

To be totally free from liability, the employer must not only Velasco, Jr., (Chairperson), Peralta, Abad, and Mendoza, JJ.,
show sufficient ground for the termination of employment concur.
but it must also comply with procedural due process by
giving the employees sought to be dismissed two notices:
1) notice of the intention to dismiss, indicating therein the
acts or omissions complained of, coupled with an
opportunity for the employees to answer and rebut the
charges against them; and 2) notice of the decision to
dismiss.[36] MS Retail failed in this respect. While it notified
respondents of their dismissal in its letter dated
September 23, 2008, it failed to furnish them with a
written notice of the charges thus, denying them a
reasonable opportunity to explain their side.

The petitioners' failure to observe due process when it

terminated respondents' employment for just cause did
not invalidate the dismissal but rendered petitioners liable
for nominal damages.[37] Under the Civil Code, nominal
damages is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss
suffered by him.[38] The amount thereof is addressed to the
sound discretion of the court. Considering the prevailing
circumstances in the case at bar, the Court deems it
proper to award to each of the respondents PhP30,000.00
as nominal damages.[39]

With respect to the attorney's fees, while the CA, in the

body of its Decision found respondents entitled to such
award, it omitted to include the same in the dispositive
portion of its Decision. Such award must, however, be
upheld, not only because labor cases take much time to
litigate, but also because these require special dedication
and expertise on the part of the pro-worker's counsel.
[40]
Therefore, it is just to award attorney's fees of
PhP30,000.00 to each of the respondents.

Finally, a more complete and just resolution of the present

case calls for the determination of the nature of the
liability of all the petitioners. The Court notes that the CA
ordered only MS Retail to pay respondents. However,
Section 10 of Republic Act 8042,[41] as amended by
Republic Act 10022,[42] provides for the solidary liability of
the principal and the recruitment agency, to wit:
SEC. 10. Money Claims. - Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety
(90) calendar, days after the filing of the complaint, the
claims arising out of an employer-employee relationship or
by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual,
moral, exemplary and other forms of damage.
Consistent with this mandate, the NLRC shall endeavor to
update and keep abreast with the developments in the
global services industry.

The liability of the principal/employer and the

recruitment/placement agency for any and all
claims under this section shall be joint and several.
This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent
for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may
be awarded to the workers. If the
recruitment/placement agency is a juridical being,
the corporate officers and directors and partners as
the case may be, shall themselves be jointly and
solidarity liable with the corporation or partnership
for the aforesaid claims and damages. (Emphasis
supplied)

In view of the foregoing, the liability for the monetary

awards granted to respondents shall be jointly and
severally borne by all the petitioners.

WHEREFORE, the petition is PARTIALLY GRANTED.

The assailed Decision and Resolution of the Court of

THIRD DIVISION
[ A.M. NO. P-05-1960 (FORMERLY OCA IPI NO. 05-
2080-P), January 26, 2007 ]
CONCERNED LITIGANTS, COMPLAINANTS, VS.
MANUEL Z. ARAYA, JR., UTILITY WORKER,
MUNICIPAL TRIAL COURT IN CITIES, BRANCH 2,
OZAMIZ CITY, RESPONDENT.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before us is a letter[1] dated June 16, 2003 of Concerned
Litigants (complainants) charging Manuel Z. Araya, Jr.
(respondent), Utility Worker, Municipal Trial Court in Cities
(MTCC), Branch 2, Ozamiz City, with Falsification of Daily
Time Record (DTR), Frequent Unauthorized Absences or
Tardiness and Loafing.
Complainants allege that respondent arrives in his post at
10:00 in the morning and goes home at 11:30 a.m. In the
afternoon, he reports for work at 3:00 and goes home at
4:30. Sometimes he does not report at all yet does not file
any leave of absence nor enters his time in the logbook.
He could not be seen in his post the whole day. The act of
respondent has been going on for a long time that he feels
untouchable. Because of his habitual absence, he can no
longer perform his regular job. The chamber, staff office,
and courtroom are very dirty and the records are not
properly arranged and there are records that need
stitching. It is unfair to those employees who report
to work regularly and on time when respondent is seldom
seen in office but receives his salary regularly like any of
his co-employees. He stayed most of the time at his
house watching television even during office hours.
Complainants are very much concerned and sympathized
with the officemates of respondent who sometimes do his
job in order not to hamper the flow of work in the office.
On August 8, 2003, the Office of the Court Administrator
(OCA) sent a First Indorsement[2] to respondent, Clerk of
Court Renato L. Zapatos (Zapatos), and Hon. Rio
Concepcion Achas (Judge Achas), Presiding Judge, MTCC,
Branch 2, Ozamiz City, referring the letter of complainants
for their respective comments.
In his letter-comment[3] dated August 20, 2003,
respondent avers that since his first day in office as utility
man, he adhered to the prescribed office hours and never
did he neglect to dutifully perform his basic tasks of
maintaining the cleanliness, orderliness and tidiness of the
staff's office, the courtroom, the judge's chamber and the
comfort room; that with the nature of his job, it is
impractical, improper, if not unethical, to do such tasks
during office hours with the presence of office personnel
or court users; and that to do his duties effectively and
efficiently, he has to do those tasks at a very early
morning hours or sometimes after the close of
office hours for all its practicality. He points out that the
allegation that he reports forwork as late as 10:30 and
3:30 and leaves his post as early as 11:30 and 4:30 is
purely exaggeration. After cleaning the office in the
morning, respondent admits that he goes home and
prepares for office but not until any one of the office staff
arrives and only then that he leaves the office. After he
changes to his office uniform, he immediately goes back in
the office although as late as 9:00 or 9:30 already but with
all the confidence that he has already done his tasks for
that particular day. Respondent denied that he neglected
to do his works and it is his officemates who do the same
for him is an exaggeration because when he is on leave,
naturally his officemates would have to do it themselves,
the things his officemates would have him do otherwise, if
present. That as a matter of command responsibility, his
superiors are the persons having control and direct
supervision over his work. As to the allegation that his act
is tantamount to falsification of DTRs, he contends that it
could not be possible since it is the clerk of court and the
presiding judge who approve the DTR and the application
for leave; and that he works hard to support his family and
dismisses the imputation that he is untouchable the same
being incredulous, senseless and idiotic.
In his letter-comment[4] dated September 9, 2003, Zapatos
states that one of his duties is to monitor the attendance
and whereabouts of personnel under his supervision; and
that it is true that government employees are supposed to
be in the office eight hours a day. He avers that there are
unavoidable occasions when an employee, for urgent
reason, is allowed to leave during office hours; that the
concerned litigants may have failed to consider the nature
of the job of a utility worker whose duties, among others,
require him often to be out of the office to mail office
communications, court orders and the like, in the post
office; that aside from stitching records of cases,
respondent's job includes the maintenance of the
cleanliness of the office premises which he has to do
before office hours so as not to disturb the other
employees; and that this could be the reason probably
why sometimes respondent cannot be back in the office
on time at exactly 8:00 o'clock in the morning.
As to the report regarding respondent's practice of staying
at his house most of the time even during
office hours watching television, Zapatos asserts that he
has difficulty confirming the same since he has not
personally seen respondent doing it. He claims that
respondent files his leave application as office record will
show, quite contrary to the allegations in said letter.
Zapatos admitted though that respondent is not exactly a
model employee and in fact, has a performance rating of
only Satisfactory. Zapatos declares that if respondent
may have committed certain minor infractions of office
policies or sometimes remiss in his duties in the past,
respondent have shown some improvements in his
performance; and that recent evaluation of his other job
functions are generally satisfactory.
In his letter-comment dated September 11, 2003, [5] Judge
Achas avers that he conducted an investigation on the
alleged complaint against respondent. Upon verification
of the court's daily time logbook he found that the same
shows that respondent reflects his absence or undertime
in it. Respondent's application for leave of absence is
intact. The cleanliness of the office is satisfactory. Judge
Achas states that he granted respondent a flexi-time
pursuant to the memorandum circular issued by the
Supreme Court because respondent has to clean and
arrange the tables, chairs and other court
equipments during non-office or working hours in order
to forestall disruption of work; that respondent does the
cleaning starting at 5:30 until 7:30 in the morning and has
to stay until 7:00 in the evening to put off the lights and
throw garbage for the day. Thus, he gave respondent a
special time to report to office, i.e., 9:15 a.m. to 11:15
a.m. and 2:15 p.m. to 7:00 p.m. Judge Achas further
states that respondent is out of office when he is tasked to
do some mailings and at the same time the retrieval of
mails from the postal office.
On the allegation that respondent is seen at home viewing
television during working hours, Judge Achas avers that he
failed to ascertain that respondent is doing the same and
that the complaint against respondent has no legal basis
to ripen for any remedial and/or administrative sanction.
In the Agenda Report[6] dated December 15, 2004, the
OCA submitted its evaluation and recommendation, to wit:
EVALUATION: As basis for our evaluation, we requested
the Leave Division-OCA for a certified photocopies of
respondent's daily time records starting January 2003 to
July 2003, the anonymous complaint being dated 16 June
2003 and the dates of the alleged absences/tardiness and
loafing of respondent being unspecified.
We find that the categorical admission of Judge Achas that
he allowed respondent a flex-time schedule which is at
9:15 A.M. (arrival)/11:15 A.M. (departure) and 2:15 P.M.
(arrival)/7:00 P.M. (departure), the said arrangement was
not faithfully reflected in respondent's daily time record,
which is an official document. Secondly, nowhere can we
find any provision in the Civil Service Law wherein utility
worker positions are given special time arrangements or
accommodations for purposes of their working
convenience. Unequivocally stated under Rule XVII of the
Omnibus Rules Implementing Book V of EO 292 are the
following applicable and relevant rules:
Rule XVII
Government Office Hours
SECTION 1: It shall be the duty of each head of the
department or agency to require all officers and
employees under him to strictly observe the
prescribed office hours. When the head of the office,
in the exercise of his discretion allows government officials
and employees to leave the office during office hours and
not for official business, but to attend social
events/functions and/or wakes, interments, the same
shall be reflected in their time cards and charged to
their leave credits. (As amended by CSC MC No. 1, s.
1994 dated January 6, 1994, effective immediately)
xxxx
Section 5. Officers and employees of all departments and
agencies except those covered by special laws shall
render not less than eight (8) hours of work a day
for five (5) days a week or a total of forty
(40) hours a week, exclusive of time for lunch. As a
general rule, such hours shall be from eight o'clock in the
morning to twelve o'clock noon and from one o'clock to
five o'clock in the afternoon on all days except Saturdays,
Sundays and Holidays.
Section 6. Flexible working hours maybe allowed subject
to the discretion of the head of department or agency. In
no case shall the weekly working hours be reduced
in the event the department or agency x x x adopts
the flexi-time schedule in reporting forwork.
xxxx
Section 9. Off-setting of tardiness or absences by
working for an equivalent number of minutes or hours by
which an officer or employee has been tardy or absent,
beyond the regular or approved workinghours of the
employees concerned, shall not be allowed.
From the foregoing rules, it is crystal clear that Judge
Achas (although he was not the respondent in the instant
case) has deviated from the prescribed guidelines. The
law explicitly requires an employee to render a total of
forty (40) hours a week which, if based on the practice of
respondent which bore the approval of Judge Achas (9:15-
11:15 and 2:15-7:00 p.m.), the said schedule glaringly fell
short from the required number of working hours imposed.
However, the instant case is unique on its own that it was
respondent's superior who authorized and approved the
former's working schedule. The alleged
absences/tardiness and loafing of respondent while on
duty during regular officehours were with the knowledge
and consent of the presiding judge and branch clerk
concerned.
Stated differently, it is more prudent to admonish not only
the respondent but also Judge Achas and Clerk of Court
Zapatos for circumventing the Civil Service rules without
proper authority and for tolerating respondent to commit
such violation.
RECOMMENDATION: Respectfully submitted for the
consideration of the Honorable Court is our
recommendation that respondent Manuel Z. Araya, Jr.
beREPRIMANDED for not faithfully reflecting the exact
time of his arrival and departure in his daily time
record with WARNING that a repetition of the same or
similar act in the future will be dealt with more severely;
and that Judge Rio Concepcion Achas and Clerk of Court III
Renato L. Zapatos be ADMONISHED for violating the Civil
Service Rules without authority from the Court with
WARNINGthat a repetition of the same or similar act in
the future will be dealt with more severely. [7]
In its Resolution of February 7, 2005,[8] the Court required
Judge Achas and Zapatos to show cause why they should
not be held administratively liable for abetting
respondent's violation of the Civil Service Rules.
In his letter dated March 11, 2005,[9] Judge Achas explains
that he did not and will never abet anyone's violation of
the Civil Service Rules, Memorandum Circulars and
existing laws. He stressed that his Comment dated
September 9, 2003 was based on the logbook and other
pertinent documents on hand plus his constant monitoring
not only on respondent but also on the other rank and file
employees in his sala. He challenges the complainants to
come out with specific facts and data including the dates
so that the same could be compared with the record files
to ascertain whether he and his clerk of court side and/or
abet the respondent. He avers that they will not hesitate
to make the necessary complaint and/or report against
any erring rank and file employees and similarly, he is
open for reports and/or complaints against him.
In his letter dated March 22, 2005,[10] Zapatos explains
that it was never his intention to abet, nor will he abet,
respondent's alleged violations, nor of any of the
personnel under his supervision for that matter. He never
lacked exerting efforts of constantly reminding respondent
of his duties and responsibilities as an employee and as
utility worker in particular and of whatever misdemeanors
respondent may have committed although he admitted
that the reminders were mostly done orally and in private
and in a friendly or brotherly approach, not through verbal
scoldings or written memoranda. He further explains that
record will show that for several rating periods in the past
respondent was given a rating of Satisfactory and in the
latest performance evaluation period covering the months
of July to December 2004, respondent was given an
Unsatisfactory rating. That he feels and believes that it
would be unfair to hold him administratively liable for
abetting respondent's alleged violations.
In its Resolution of October 10, 2005,[11] the Court referred
the comments to the OCA for evaluation, report and
recommendation.
In its Compliance[12] dated July 27, 2006, the OCA
reiterates its findings and recommendation as contained in
the Agenda Report of December 15, 2004, there being no
sufficient and weighty justification nor supplemental
explanation proffered by respondent to warrant dismissal
of the complaint against him.
We adopt the findings of the OCA except as to the
recommended action against Judge Achas and Zapatos.
On falsification of daily time record.
It is noted that per Judge Achass admission, respondent
reports for work at 9:15-11:15 a.m. and 2:15-7:00 p.m.
based on the flexi-time arrangement. However, the said
arrangement was not faithfully reflected in respondent's
DTR, which is an official document. Based on the above
flexi-time arrangement, respondent reports for work for
only six hours and forty-five minutes which is short of the
required eight hours of work mandated by law. Thus,
respondent incurred tardiness of one hour and fifteen
minutes a day or six hours and fifteen minutes a week,
which is very detrimental to the government service.
It must be stressed that all judicial employees must
devote their official time to government service.[13] They
must exercise at all times a high degree of professionalism
and responsibility, as service in the judiciary is not only a
duty; it is a mission. Moreover, the image of a court of
justice is necessarily mirrored in the conduct, official or
otherwise, of the men and women who work thereat, from
the judge to the last and lowest of its employees.[14]
Public service requires integrity and discipline. For this
reason, public servants must exhibit at all times the
highest sense of honesty and dedication to duty. [15] By the
very nature of their duties and responsibilities,
government employees must faithfully adhere to, hold
sacred and render inviolate the constitutional principle
that a public office is a public trust; that all public officers
and employees must at all times be accountable to the
people, serve them with utmost responsibility, integrity,
loyalty and efficiency.[16]
Respondent explained that to do his duties effectively and
efficiently, he has to do those tasks at a very early
morning hours or sometimes after the close of
office hours.[17] This explanation cannot exculpate him
from liability. At most, it can serve as a mitigating
circumstance. Under the Civil Service Rules, off-setting of
tardiness or absences by working for an equivalent
number of minutes or hours by which an officer or
employer has been tardy or absent, beyond the regular or
approved working hours of the employees concerned, is
not allowed.[18]
On frequent unauthorized absences or tardiness or
loafing.
Records reveal that respondent's alleged
absences/tardiness and loafing while on duty during
regular office hours were with the knowledge and consent
not only of the presiding judge but also of the branch clerk
of court. Thus, the OCA finds both the presiding judge and
the branch clerk of court responsible for tolerating the
acts of respondent. We agree.
unrepresentative of the truth, should be punished with
dismissal, although it is his first offense.
While this Court is duty-bound to sternly wield a corrective
hand to discipline its errant employees and to weed out
those who are undesirable, this Court also has the
discretion to temper the harshness of its judgment with
mercy.[25] For when an officer or employee is disciplined,
the object sought is not the punishment of such officer or
employee but the improvement of the public service and
the preservation of the public's faith and confidence in the
government.[26]
Considering that respondent utility worker is a first time
offender and considering further that his reliance in good
faith that the flexi-time arrangement is legal, and his
being out of the office during office hours is brought about
by the flexi-time erroneously allowed by Judge Achas who
presumably knows the law coupled with the fact that he
did his tasks before and after officehours so as not to
disturb his co-employees, serve to mitigate his liability.

Too much leniency on the part of judges is frowned upon. ACCORDINGLY, the Court finds Manuel Z. Araya, Jr. guilty
We held in Lacurom v. Magbanua,[19] citing the case of dishonesty in not faithfully reflecting the exact time of
of Buenaventura v. Benedicto,[20] to wit: his arrival and departure in his daily time record and
We find the inclination of the respondent judge to leniency isREPRIMANDED with WARNING that a repetition of the
in the administrative supervision of his employees an same or similar act in the future will be dealt with more
undesirable trait. Oftentimes, such leniency provides the severely.
court employees the opportunity to commit minor
transgressions of the laws and slight breaches of official Judge Rio Concepcion Achas and Clerk of Court III Renato
duty ultimately leading to vicious delinquencies. The L. Zapatos are REPRIMANDED for violating the Civil
respondent judge should constantly keep a watchful eye Service Rules without authority from the Court
on the conduct of his employees. He should realize that with WARNING that a repetition of the same or similar act
big start small. His constant scrutiny of the behavior of his in the future will be dealt with more severely.
employees would deter any abuse on the part of the latter
in the exercise of their duties. Then, his subordinates SO ORDERED.
would know that any misdemeanor will not remain
unchecked. The slightest semblance of impropriety on the Ynares-Santiago, (Chairperson), Callejo, Sr., and Chico-
part of the employees of the court in the performance of Nazario, JJ., concur.
their official duties stirs ripples of public suspicion and
public distrust of the judicial administrators. The slightest
breach of duty by and the slightest irregularity in the
conduct of court officers and employees detract from the
dignity of the courts and erode the faith of the people in
the judiciary.
In this case, Judge Achas and Zapatos were remiss in their
duty of maintaining proper order in their court. Their
failure to live up to the standards of responsibility required
warrants disciplinary action for this Court cannot
countenance any conduct, act, or omission on the part of
those involved in the administration of justice which will
violate the norms of public accountability and diminish, or
tend to diminish, the faith of the people in the judicial
system.[21]

As observed by the OCA, Judge Achas and Zapatos are

liable for circumventing the Civil Service Rules without
proper authority and for tolerating respondent to commit
such violation.

The constant reminders of Zapatos to respondent done

orally, in private and friendly or brotherly approach, prove
futile as shown by the fact that respondent subsequently
obtained an Unsatisfactory rating for the period covering
July to December 2004. It bears stressing that a court
employee need not be constantly reminded of his duties
and responsibilities. It behooves upon the employee to do
his job with utmost diligence without waiting for
reminders. Zapatos should have issued a memorandum
calling respondent's attention and if the same is not
heeded, for him to report respondent's infractions to Judge
Achas and the OCA for appropriate action. This Zapatos
failed to do.

Supreme Court Administrative Circular No. 2-99 provides

that absenteeism and tardiness even if such are not
habitual or frequent shall be dealt with severely, and any
falsification of DTRs to cover up for such absenteeism or
tardiness shall constitute gross dishonesty or serious
misconduct.[22] Dishonesty, being in the nature of grave
offense, carries the extreme penalty of dismissal from the
service with forfeiture of retirement benefits except
accrued leave credits, and perpetual disqualification
for

reemployment in government service.[23] Under the Civil

Service law,[24] respondent, whose DTR is evidently

EN BANC
[ A.M. NO. 02-2-10-SC, December 14, 2005 ]
RE: REQUEST OF MUSLIM EMPLOYEES IN THE
DIFFERENT COURTS IN ILIGAN CITY (RE:
OFFICE HOURS)
RESOLUTION
CALLEJO, SR., J.:
In their Letter dated November 19, 2001 addressed to
Executive Judge Valerio M. Salazar, Regional Trial Court of
Iligan City, several Muslim employees in the different
courts in the said city request that they be allowed to
enjoy the following privileges:
1. to hold office hours from 7:30 a.m. to 3:30 p.m.
without lunch break or coffee breaks during the
month of Ramadan;
2. to be excused from work from 10:00 a.m. to 2:00
p.m. every Friday (Muslim Prayer Day) during the
entire calendar year.
Judge Salazar forwarded the said letter-request to the
Office of the Court Administrator (OCA). Judge Salazar
expressed his conformity with the first
request, i.e., allowing them to hold office from 7:30 a.m. to
3:30 p.m. without any break during the month
of Ramadan. However, he expressed some misgivings
about the second request, i.e., excusing them
fromwork from 10:00 a.m. to 2:00 p.m. every Friday during
the entire calendar year.
In support of their requests, the Muslim employees invoke
Presidential Decree (P.D.) No. 291[1] as amended by P.D.
No. 322[2] enacted by then President Ferdinand E. Marcos.
The avowed purpose of P.D. No. 291 was to reinforce
national unity by recognizing Muslim holidays and making
them part of our national holidays. Section 2 thereof, as
amended by P.D. No. 322, provides that the following are
recognized Muslim holidays:
a. Eid-ul-Fitr (Hariraya Puasa) - which falls on the
1st day of the lunar month of Shawwal
commemorating the end of the fasting season;
b. Eid-ul-Adha (Hariraya Haj) - which falls on the
10th day of the 12th Lunar month of Zul Hajj;
c. Mauledan Nabi - Birthday of Prophet Mohammad
(P.B.U.H), which falls on the 12 th day of the
3rd Lunar month of Rabbiol-Awwal;
d. Lailatul Isra Wal Miraj - (Ascension) which falls on
the 27th day of the 8thLunar month of Rajjab;
e. Muharram (Ashura) - which falls on the 10th Lunar
month of Muharram; and
f. Amon Jaded (New Year) - which falls on the 1st day
of the 1st Lunar month of Muharram.
Muslims employees in the government are excused from
reporting to office during these holidays in order that they
may be able to properly observe them.
Section 3 of the same law, as amended by P.D. No. 322,
further provides that:
Sec. 3. (a) During the fasting season on the month of
Ramadan, all Muslim employees in the national
government, government-owned or controlled
corporations, provinces, cities, municipalities and other
instrumentalities shall observe office hours from seven-
thirty in the morning (7:30 a.m.) to three-thirty in the
afternoon (3:30 p.m.) without lunch break or coffee
breaks, and that there shall be no diminution of salary or
wages, provided, that the employee who is not fasting is
not entitled to the benefit of this provision.
(b) Regulations for the implementation of this section shall
be issued together with the implementing directives on
Muslim holidays.
Pursuant thereto, the Civil Service Commission (CSC)
promulgated Resolution No. 81-1277 dated November 13,
1981 which states in part:
2. During "Ramadan" the Fasting month (30 days) of
the Muslims, the Civil Service official time of 8
o'clock to 12 o'clock and 1 o'clock to 5 o'clock is
hereby modified to 7:30 A.M. to 3:30 P.M. without
noon break and the difference of 2 hours is not
counted as undertime;
3. During Friday, the Muslim pray day, Muslims are
excused from work from 10 o'clock in the morning
to 2 o'clock in the afternoon.
Moreover, in its Resolution No. 00-0227 dated January 26,
2000, the CSC clarified that the term "Friday" in the above
resolution is not limited to the Fridays during the month
ofRamadan, but refers to "all Fridays of the calendar year."
However, in order not to run afoul of Section 5,[3] Rule XVII
of the Omnibus Rules Implementing Book V of Executive
Order (E.O.) No. 292[4] which enjoins civil servants to
render public service not less than eight hours a day or
forty (40) hours a week, the CSC prescribes the adoption
of a flexible working schedule to accommodate the
Muslims' Friday Prayer Day subject to certain
conditions, e.g., the flexible working hours shall not start
earlier than 7:00 a.m. and end not later than 7:00 p.m. [5]
In the Resolution dated October 1, 2002, the Court
required the Court Administrator to study the matter. In
compliance therewith, Court Administrator Presbitero J.
Velasco, Jr. recommends that the Muslim employees in the
Judiciary be allowed to hold flexible office hoursfrom 7:30
a.m. to 3:30 p.m. without break during the month
of Ramadan. Further, that they be excused from work from
10:00 a.m. to 2:00 p.m. every Friday to allow them to
attend the Muslim Prayer Day. However, to compensate
for the lost hours, they should be required to observe
flexible working schedule which should start from 7:00
a.m. to 10:00 a.m. and from 2:00 p.m. to 7:00 p.m. every
Friday. In that way, the working hours mandated by the
civil service rules is complied with.
The recommendation of the Court Administrator with
respect to the matter of allowing the Muslim employees in
the Judiciary to hold flexible office hours from 7:30 a.m. to
3:30 p.m. without break during the month of Ramadan is
well taken. The same has statutory basis in Section 3 (a)
of P.D. No. 291, as amended by P.D. No. 322, which
categorically states that "[d]uring the fasting season in the
month of Ramadan, all Muslim employees in the national
government, government-owned or controlled
corporations, provinces, cities, municipalities and other
instrumentalities shall observe office hours from seven-
thirty in the morning (7:30 a.m.) to three-thirty in the
afternoon (3:30 p.m.) without lunch break or coffee
breaks, and that there shall be no diminution of salary or
wages ..."
The Court, however, is constrained to deny for lack of
statutory basis the request of the Muslim employees to be
excused from work from 10:00 a.m. to 2:00 p.m. every
Friday to allow them to attend the Muslim Prayer Day. As
correctly observed by Atty. Edna Dio, Chief, Office of the
Court Attorney, in her Report dated May 13, 2005, the CSC
exceeded its authority insofar as it declared in Resolution
No. 81-1277 and Resolution No. 00-0227 that Muslim
employees are excused from work from 10:00 a.m. to 2:00
p.m. every Friday subject to certain conditions. CSC
Resolution No. 81-1277 was purportedly issued pursuant
to Sections 2 and 5 of P.D. No. 291, as amended by P.D. No
322, but neither of the two decrees mention "Friday, the
Muslim Prayer Day" as one of the recognized holidays.
The Court is not unmindful that the subject requests are
grounded on Section 5, Article III of the Constitution:
No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof. The
exercise and enjoyment of religious profession and
worship, without discrimination or preference, shall forever
be allowed. No religious test shall be required for the
exercise of civil and political rights.
This provision contains two aspects: (1) the non-
establishment clause; and (2) the free exercise clause. The
subject requests are based on the latter and in
interpreting this clause (the free exercise clause)
embodied in the Constitution, the Court has consistently
adhered to the doctrine that:
The right to religious profession and worship has a two-
fold aspect, viz., freedom to believe and freedom to act on
one's beliefs. The first is absolute as long as the belief is
confined within the realm of thought. The second is
subject to regulation where the belief is translated into
external acts that affect the public welfare.[6]
Justice Isagani A. Cruz explained these two concepts in
this wise:
(1) Freedom to Believe
The individual is free to believe (or disbelieve) as he
pleases concerning the hereafter. He may indulge his own
theories about life and death; worship any god he
chooses, or none at all; embrace or reject any religion;
acknowledge the divinity of God or of any being that
appeals to his reverence; recognize or deny the
immortality of his soul in fact, cherish any religious
conviction as he and he alone sees fit. However absurd his
beliefs may be to others, even if they be hostile and
heretical to the majority, he has full freedom to believe as
he pleases. He may not be required to prove his beliefs.
He may not be punished for his inability to do so. Religion,
after all, is a matter of faith. "Men may believe what they
cannot prove." Every one has a right to his beliefs and he
may not be called to account because he cannot prove
what he believes.
(2) Freedom to Act on One's Beliefs
But where the individual externalizes his beliefs in acts or
omissions that affect the public, his freedom to do so
becomes subject to the authority of the State. As great as
this liberty may be, religious freedom, like all other rights
guaranteed in the Constitution, can be enjoyed only with a
proper regard for the rights of others. It is error to think
that the mere invocation of religious freedom will
stalemate the State and render it impotent in protecting
the general welfare. The inherent police power can be
exercised to prevent religious practices inimical to society.
And this is true even if such practices are pursued out of
sincere religious conviction and not merely for the purpose
of evading the reasonable requirements or prohibitions of
the law.
Justice Frankfurter put it succinctly: The constitutional
provision on religious freedom terminated disabilities, it
did not create new privileges. It gave religious liberty, not
civil immunity. Its essence is freedom from conformity to
religious dogma, not freedom from conformity to law
because of religious dogma.[7]
The Court recognizes that the observance of Ramadan and
the Friday Muslim Prayer Day is integral to the Islamic
faith. However, while the observance of Ramadan and
allowing the Muslim employees in the Judiciary to hold
flexible office hours from 7:30 a.m. to 3:30 p.m. without
any break during the month of Ramadan finds support in
Section 3 (a) of P.D. No. 291, as amended by P.D. No. 322,
there is no such basis to excuse them from work from
10:00 a.m. to 2:00 p.m. every Friday, the Muslim Prayer
Day, during the entire calendar year.
On the other hand, the need of the State to prescribe
government office hours as well as to enforce them
uniformly to all civil servants, Christians and Muslims alike,
cannot be disregarded. Underlying Section 5, [8] Rule XVII of
the Omnibus Rules Implementing Book V of E.O. No. 292 is
the interest of the general public to be assured of
continuous government service during office hours every
Monday through Friday. The said rule enjoins all civil
servants, of whatever religious denomination, to render
public service of no less than eight hours a day or forty
(40) hours a week.
To allow the Muslim employees in the Judiciary to be
excused from work from 10:00 a.m. to 2:00 p.m. every
Friday (Muslim Prayer Day) during the entire calendar year
would mean a diminution of the prescribed government
working hours. For then, they would be rendering service
twelve (12) hours less than that required by the civil
service rules for each month. Further, this would
encourage other religious denominations to request for
similar treatment.
The performance of religious practices, whether by the
Muslim employees or those belonging to other religious
denominations, should not prejudice the courts and the
public. Indeed, the exercise of religious freedom does not
exempt anyone from compliance with reasonable
requirements of the law, including civil service laws.
In fine, the remedy of the Muslim employees, with respect
to their request to be excused fromwork from 10:00 a.m.
to 2:00 p.m. every Friday during the entire calendar year,
is legislative, which is to ask Congress to enact a
legislation expressly exempting them from compliance
with the prescribed government working hours.
ACCORDINGLY, the Court resolved to:
1. GRANT the request to allow the Muslim
employees in the Judiciary to hold
office hours from 7:30 a.m. to 3:30 p.m. without
break during the month ofRamadan pursuant to
Section 3 (a) of Presidential Decree No. 291, as
amended by Presidential Decree No. 322; and
2. DENY for lack of legal basis the request that the
Muslim employees in the Judiciary be excused
from work from 10:00 a.m. to 2:00 p.m. every
Friday, the Muslim Prayer Day, during the entire
calendar year.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-
Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,
Corona, Carpio-Morales, Azcuna, Tinga, Chico-
Nazario, and Garcia, JJ., concur.
 Recognizing Muslim Holidays and Providing for the
[1]

Implementation, September 12, 1973.

Amending Section 2 of Presidential Decree No. 291 and

[2]

Inserting a New Section on the Regulation of

Office Hours in the Month of Ramadan thereby Changing
the Numbers of All Subsequent Sections, October 28,
1973.
[3]
The provision reads:

Sec. 5. Officers and employees of all departments and

agencies except those covered by special laws shall
render not less than eight hours of work a day for five
days a week or a total of forty hours a week, exclusive of
time for lunch. As a general rule, such hours shall be from
eight o'clock in the morning to twelve o'clock noon and
from one o'clock to five o'clock in the afternoon on all days
except Saturdays, Sundays and Holidays.
[4]
Administrative Code of 1987.
[5]
Civil Service Commission Resolution No. 00-0227, supra.
These conditions are:
1) Heads of departments, offices and agencies shall have
the authority to approve office working hours, provided
that in such working hours, officials and employees
shall render not less than eight hours a day for five
days a week for a total of forty hours;
2) The flexible working hours shall not start earlier than
7:00 o'clock in the morning and end later that 7:00
o'clock in the evening; hence, the public is still assured
of the core working hours of eight o'clock in the
morning to five o'clock in the afternoon;
3) The public must be assured of a continuous service
during the period of 12:00 noon to 1:00 o'clock in the
afternoon;
The Flexible Working Hours adopted by the official or
employee shall thereafter be his regular
4)
working hours which cannot be occasionally or
periodically changed at his convenience;
5) In the exigency of the service, working days may also
be altered to include Saturdays and Sundays, provided
that employees who work on such days may choose
compensatory days-off during the weekdays, provided
that the Saturday and Sunday are regular workdays
and not cases of overtime;
Such working day may be applicable to offices with
frontline services such as Consular offices abroad,
Bureau of Internal Revenue, Bureau of Customs, Social
Security System, Government Service Insurance
System, and other offices that issue licenses, permits,
clearances, or which process documents needed to
have access to other services.
A report of flexible working hours adopted by the
6) department, office or agency shall be submitted to the
Civil Service Commission within thirty (30) days of its
implementation;
7) Habitual absenteeism and tardiness shall hereafter be
considered as grave offenses.
[6]
ISAGANI A. CRUZ, CONSTITUTIONAL LAW 174 (1995),
citing Cantwell v. Connecticut, 310 U.S. 296 (1940). Also
cited in Iglesia Ni Cristo v. Court of Appeals, 259 SCRA 529
(1996);Ebralinag v. Division Superintendent of Schools of
Cebu, supra.
[7]
Id. at 174-175.
[8]
Supra.
FIRST DIVISION
[ G.R. NO. 167760, March 07, 2007 ]
MANILA JOCKEY CLUB EMPLOYEES LABOR UNION-
PTGWO, PETITIONER, VS. MANILA JOCKEY CLUB,
INC., RESPONDENT.
DECISION
GARCIA, J.:
Challenged in this petition for review under Rule 45 of the
Rules of Court is the decision[1]dated December 17, 2004
of the Court of Appeals (CA), as reiterated in its
resolution[2] of April 4, 2005, dismissing the petition for
review of herein petitioner in CA-G.R. SP No. 69240,
entitled Manila Jockey Club Employees Labor Union-
PTGWO v. Manila Jockey Club, Inc.
The facts:
Petitioner Manila Jockey Club Employees Labor Union-
PTGWO and respondent Manila Jockey Club, Inc., a
corporation with a legislative franchise to conduct, operate
and maintain horse races, entered into a Collective
Bargaining Agreement (CBA) effective January 1, 1996 to
December 31, 2000. The CBA governed the economic
rights and obligations of respondent's regular monthly
paid rank-and-file employees.[3] In the CBA, the parties
agreed to a 7-hourwork schedule from 9:00 a.m. to 12:00
noon and from 1:00 p.m. to 5:00 p.m. on a workweek of
Monday to Saturday, as contained under Section 1, Article
IV,[4] of the same CBA, to wit:
Section 1. Both parties to this Agreement agree to observe
the seven-hour workschedule herewith scheduled to be
from 9:00 a.m. to 12:00 noon and 1:00 p.m. to 5 p.m.
on work week of Monday to Saturday. All work performed
in excess of seven (7) hours work schedule and on days
not included within the work week shall be considered
overtime and paid as such. Except those monthly
compensation which includes work performed during
Saturday, Sunday, and Holiday when races are held at the
Club.
xxx xxx xxx
Accordingly, overtime on an ordinary working day shall be
remunerated in an amount equivalent to the worker's
regular basic wage plus twenty five percent (25%) thereof.
Where the employee is permitted or suffered to work on
legally mandated holidays or on his designated rest day
which is not a legally mandated holiday, thirty percent
(30%) shall be added to his basic wage for a seven
hourwork; while work rendered in excess of
seven hours on legally mandated holidays and rest days
not falling within the aforestated categories day shall be
additionally compensated for the
overtime work equivalent to his rate for the first
seven hourson a legally mandated holiday or rest day plus
thirty percent (30%) thereof.
The CBA likewise reserved in respondent certain
management prerogatives, including the determination of
the work schedule, as provided under Section 2, Article XI:
Section 2. The COMPANY shall have exclusive control in
the management of the offices and direction of the
employees. This shall include, but shall not be limited to,
the right to plan, direct and control office operations, to
hire, assign and transfer employees from one job to
another or from one department to another; to promote,
demote, discipline, suspend, discharge or terminate
employees for proper cause and/or in accordance with
law, to relieve employees from duty because of lack
of work or for other legitimate reasons; or to introduce
new or improved methods or facilities; or to change
existing methods or facilities to change the schedules
ofwork; and to make and enforce rules and regulations to
carry out the functions of management, provided,
however, that the COMPANY will not use these rights for
the purpose of discrimination against any employee
because of his membership in the UNION. Provided,
further, that the prerogatives provided for under this
Section shall be subject to, and in accordance with
pertinent directives, proclamations and their implementing
rules and regulations.
On April 3, 1999, respondent issued an inter-office
memorandum declaring that, effective April 20, 1999,
the hours of work of regular monthly-paid employees shall
be from 1:00 p.m. to 8:00 p.m. when horse races are held,
that is, every Tuesday and Thursday. The memorandum,
however, maintained the 9:00 a.m. to 5:00 p.m. schedule
for non-race days.
On October 12, 1999, petitioner and respondent entered
into an Amended and Supplemental CBA retaining Section
1 of Article IV and Section 2 of Article XI, supra, and
clarified that any conflict arising therefrom shall be
referred to a voluntary arbitrator for resolution.
Subsequently, before a panel of voluntary arbitrators of
the National Conciliation and Mediation Board (NCMB),
petitioner questioned the above office memorandum as
violative of the prohibition against non-diminution of
wages and benefits guaranteed under Section 1, Article IV,
of the CBA which specified the work schedule of
respondent's employees to be from 9:00 a.m. to 5:00 p.m.
Petitioner claimed that as a result of the memorandum,
the employees are precluded from rendering their usual
overtime work from 5:00 p.m. to 9:00 p.m.
The NCMB's panel of voluntary arbitrators, in a decision
dated October 18, 2001, upheld respondent's prerogative
to change the work schedule of regular monthly-paid
employees under Section 2, Article XI, of the CBA.
Petitioner moved for reconsideration but the panel denied
the motion.
Dissatisfied, petitioner then appealed the panel's decision
to the CA in CA-G.R. SP No. 69240.In the herein assailed
decision of December 17, 2004, the CA upheld that of the
panel and denied petitioner's subsequent motion for
reconsideration via its equally challenged resolution of
April 4, 2005.
Hence, petitioner's present recourse, raising the following
issues:
I While the Constitution is committed to the policy of social
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT RESPONDENT MJCI DID NOT
RELINQUISH PART OF ITS MANAGEMENT PREROGATIVE
WHEN IT STIPULATED A WORK SCHEDULE IN THE CBA.
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT RESPONDENT MJCI DID NOT
VIOLATE THE NON-DIMINUTION PROVISION CONTAINED IN
ARTICLE 100 OF THE LABOR CODE.
We DENY.
Respondent, as employer, cites the change in the program
of horse races as reason for the adjustment of the
employees' work schedule. It rationalizes that when the
CBA was signed, the horse races started at 10:00 a.m.
When the races were moved to 2:00 p.m., there was no
other choice for management but to change the
employees' work schedule as there was nowork to be done
in the morning. Evidently, the adjustment in
the work schedule of the employees is justified.
We are not unmindful that every business enterprise
endeavors to increase profits. As it is, the Court will not
interfere with the business judgment of an employer in the
exercise of its prerogative to devise means to improve its
operation, provided that it does not violate the law, CBAs,
and the general principles of justice and fair play. We have
thus 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, layoff of workers
and discipline, dismissal, and recall of workers. [5]
While it is true that Section 1, Article IV of the CBA
provides for a 7-hour work schedule from 9:00 a.m. to
12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays
to Saturdays, Section 2, Article XI, however, expressly
reserves on respondent the prerogative to change existing
methods or facilities to change the schedules of work. As
aptly ruled by the CA:
x x x. Such exact language lends no other meaning but
that while respondent may have allowed the initial
determination of the work schedule to be done through
collective bargaining, it expressly retained the prerogative
to change it.
Moreover, it cannot be said that in agreeing to Section 1 of
Article IV, respondent already waived that customary
prerogative of management to set the workschedule. Had
that been the intention, Section 2 of Article XI would not
have made any reference at all to the retention by
respondent of that prerogative. The CBA would have
instead expressly prohibited respondent from exercising it.
x x x As it were, however, the CBA expressly recognized in
respondent the prerogative to change the work schedule.
This effectively rules out any notion of waiver on the part
of respondent of its prerogative to change
the work schedule.
The same provision of the CBA also grants respondent the
prerogative to relieve employees from duty because of
lack of work. Petitioner's argument, therefore, that the
change in workschedule violates Article 100 of the Labor
Code because it resulted in the diminution of the benefit
enjoyed by regular monthly-paid employees of rendering
overtime work with pay, is untenable. Section 1, Article IV,
of the CBA does not guarantee overtime work for all the
employees but merely provides that "all work performed in
excess of seven (7) hours workschedule and on days not
included within the work week shall be considered
overtime and paid as such."
Respondent was not obliged to allow all its employees to
render overtime work everyday for the whole year, but
only those employees whose services were needed after
their regular working hours and only upon the instructions
of management. The overtime pay was not given to each
employee consistently, deliberately and unconditionally,
but as a compensation for additional services rendered.
Thus, overtime pay does not fall within the definition of
benefits under Article 100 of the Labor Code on prohibition
against elimination or diminution of benefits.
justice and the protection of the working class, it should
not be presumed that every labor dispute will be
automatically decided in favor of labor. The partiality for
labor has not in any way diminished our belief that justice
in every case is for the deserving, to be dispensed in the
light of the established facts and the applicable law and
doctrine.[6]
WHEREFORE, the instant petition is DENIED and the
assailed decision and resolution of the CA are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Puno, C.J., (Chairperson), Sandoval-Gutierrez,
Corona, and Azcuna, JJ., concur.
 Penned by Associate Justice Godardo A. Jacinto and
[1]

concurred in by Associate Justices Edgardo P. Cruz and

Jose Catral Mendoza; Rollo, pp. 23-30.
[2]
Id. at 32-33.
[3]
Sec. 1. Appropriate Bargaining Unit. The appropriate
bargaining unit covered by this Agreement consists of all
regular monthly paid rank-and file employees employed
by the Company to work Monday to Friday, and, in certain
instances, also on Saturdays when races are not held at
the Club. Consequently, supervisory personnel, security
guards, temporary and/or probationary personnel, and
especially the hundred of workers and employees working
in the Club on weekend when races are held therein, are
understood to be outside the Scope of this Agreement. x x
x; id. at 35.
[4]
Id. at 37.
[5]
United Kimberly-Clark Employees Union-Philippine
Transport General Workers' Organization (UKCEU-PTGWO)
v. Kimberly-Clark Philippines, Inc., G.R. No. 162957, March
6, 2006, 484 SCRA 187.

Abella v. Philippine Long Distance Telephone

[6]

Company, G.R. No. 159469, June 8, 2005, 459 SCRA 724.

THIRD DIVISION
[ A.M. NO. P-05-1960 (FORMERLY OCA IPI NO. 05-
2080-P), January 26, 2007 ]
CONCERNED LITIGANTS, COMPLAINANTS, VS.
MANUEL Z. ARAYA, JR., UTILITY WORKER,
MUNICIPAL TRIAL COURT IN CITIES, BRANCH 2,
OZAMIZ CITY, RESPONDENT.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

Before us is a letter[1] dated June 16, 2003 of Concerned

Litigants (complainants) charging Manuel Z. Araya, Jr.
(respondent), Utility Worker, Municipal Trial Court in Cities
(MTCC), Branch 2, Ozamiz City, with Falsification of Daily
Time Record (DTR), Frequent Unauthorized Absences or
Tardiness and Loafing.

Complainants allege that respondent arrives in his post at

10:00 in the morning and goes home at 11:30 a.m. In the
afternoon, he reports for work at 3:00 and goes home at
4:30. Sometimes he does not report at all yet does not file
any leave of absence nor enters his time in the logbook.
He could not be seen in his post the whole day. The act of
respondent has been going on for a long time that he feels
untouchable. Because of his habitual absence, he can no
longer perform his regular job. The chamber, staff office,
and courtroom are very dirty and the records are not
properly arranged and there are records that need
stitching. It is unfair to those employees who report
to work regularly and on time when respondent is seldom
seen in office but receives his salary regularly like any of
his co-employees. He stayed most of the time at his
house watching television even during office hours.
Complainants are very much concerned and sympathized
with the officemates of respondent who sometimes do his
job in order not to hamper the flow of work in the office.
On August 8, 2003, the Office of the Court Administrator
(OCA) sent a First Indorsement[2] to respondent, Clerk of
Court Renato L. Zapatos (Zapatos), and Hon. Rio
Concepcion Achas (Judge Achas), Presiding Judge, MTCC,
Branch 2, Ozamiz City, referring the letter of complainants
for their respective comments.
In his letter-comment[3] dated August 20, 2003,
respondent avers that since his first day in office as utility
man, he adhered to the prescribed office hours and never
did he neglect to dutifully perform his basic tasks of
maintaining the cleanliness, orderliness and tidiness of the
staff's office, the courtroom, the judge's chamber and the
comfort room; that with the nature of his job, it is
impractical, improper, if not unethical, to do such tasks
during office hours with the presence of office personnel
or court users; and that to do his duties effectively and
efficiently, he has to do those tasks at a very early
morning hours or sometimes after the close of
office hours for all its practicality. He points out that the
allegation that he reports forwork as late as 10:30 and
3:30 and leaves his post as early as 11:30 and 4:30 is
purely exaggeration. After cleaning the office in the
morning, respondent admits that he goes home and
prepares for office but not until any one of the office staff
arrives and only then that he leaves the office. After he
changes to his office uniform, he immediately goes back in
the office although as late as 9:00 or 9:30 already but with
all the confidence that he has already done his tasks for
that particular day. Respondent denied that he neglected
to do his works and it is his officemates who do the same
for him is an exaggeration because when he is on leave,
naturally his officemates would have to do it themselves,
the things his officemates would have him do otherwise, if
present. That as a matter of command responsibility, his
superiors are the persons having control and direct
supervision over his work. As to the allegation that his act
is tantamount to falsification of DTRs, he contends that it
could not be possible since it is the clerk of court and the
presiding judge who approve the DTR and the application
for leave; and that he works hard to support his family and
dismisses the imputation that he is untouchable the same
being incredulous, senseless and idiotic.
In his letter-comment[4] dated September 9, 2003, Zapatos
states that one of his duties is to monitor the attendance
and whereabouts of personnel under his supervision; and
that it is true that government employees are supposed to
be in the office eight hours a day. He avers that there are
unavoidable occasions when an employee, for urgent
reason, is allowed to leave during office hours; that the
concerned litigants may have failed to consider the nature
of the job of a utility worker whose duties, among others,
require him often to be out of the office to mail office
communications, court orders and the like, in the post
office; that aside from stitching records of cases,
respondent's job includes the maintenance of the
cleanliness of the office premises which he has to do
before office hours so as not to disturb the other
employees; and that this could be the reason probably
why sometimes respondent cannot be back in the office
on time at exactly 8:00 o'clock in the morning.
As to the report regarding respondent's practice of staying
at his house most of the time even during
office hours watching television, Zapatos asserts that he
has difficulty confirming the same since he has not
personally seen respondent doing it. He claims that
respondent files his leave application as office record will
show, quite contrary to the allegations in said letter.
Zapatos admitted though that respondent is not exactly a
model employee and in fact, has a performance rating of
only Satisfactory. Zapatos declares that if respondent
may have committed certain minor infractions of office
policies or sometimes remiss in his duties in the past,
respondent have shown some improvements in his
performance; and that recent evaluation of his other job
functions are generally satisfactory.
In his letter-comment dated September 11, 2003, [5] Judge
Achas avers that he conducted an investigation on the
alleged complaint against respondent. Upon verification
of the court's daily time logbook he found that the same
shows that respondent reflects his absence or undertime
in it. Respondent's application for leave of absence is
intact. The cleanliness of the office is satisfactory. Judge
Achas states that he granted respondent a flexi-time
pursuant to the memorandum circular issued by the
Supreme Court because respondent has to clean and
arrange the tables, chairs and other court
equipments during non-office or working hours in order
to forestall disruption of work; that respondent does the
cleaning starting at 5:30 until 7:30 in the morning and has
to stay until 7:00 in the evening to put off the lights and
throw garbage for the day. Thus, he gave respondent a
special time to report to office, i.e., 9:15 a.m. to 11:15
a.m. and 2:15 p.m. to 7:00 p.m. Judge Achas further
states that respondent is out of office when he is tasked to
do some mailings and at the same time the retrieval of
mails from the postal office.
On the allegation that respondent is seen at home viewing
television during working hours, Judge Achas avers that he
failed to ascertain that respondent is doing the same and
that the complaint against respondent has no legal basis
to ripen for any remedial and/or administrative sanction.
In the Agenda Report[6] dated December 15, 2004, the
OCA submitted its evaluation and recommendation, to wit:
EVALUATION: As basis for our evaluation, we requested
the Leave Division-OCA for a certified photocopies of
respondent's daily time records starting January 2003 to
July 2003, the anonymous complaint being dated 16 June
2003 and the dates of the alleged absences/tardiness and
loafing of respondent being unspecified.
We find that the categorical admission of Judge Achas that
he allowed respondent a flex-time schedule which is at
9:15 A.M. (arrival)/11:15 A.M. (departure) and 2:15 P.M.
(arrival)/7:00 P.M. (departure), the said arrangement was
not faithfully reflected in respondent's daily time record,
which is an official document. Secondly, nowhere can we
find any provision in the Civil Service Law wherein utility
worker positions are given special time arrangements or
accommodations for purposes of their working
convenience. Unequivocally stated under Rule XVII of the
Omnibus Rules Implementing Book V of EO 292 are the
following applicable and relevant rules:
Rule XVII
Government Office Hours
SECTION 1: It shall be the duty of each head of the
department or agency to require all officers and
employees under him to strictly observe the
prescribed office hours. When the head of the office,
in the exercise of his discretion allows government officials
and employees to leave the office during office hours and
not for official business, but to attend social
events/functions and/or wakes, interments, the same
shall be reflected in their time cards and charged to
their leave credits. (As amended by CSC MC No. 1, s.
1994 dated January 6, 1994, effective immediately)
xxxx
Section 5. Officers and employees of all departments and
agencies except those covered by special laws shall
render not less than eight (8) hours of work a day
for five (5) days a week or a total of forty
(40) hours a week, exclusive of time for lunch. As a
general rule, such hours shall be from eight o'clock in the
morning to twelve o'clock noon and from one o'clock to
five o'clock in the afternoon on all days except Saturdays,
Sundays and Holidays.
Section 6. Flexible working hours maybe allowed subject
to the discretion of the head of department or agency. In
no case shall the weekly working hours be reduced
in the event the department or agency x x x adopts
the flexi-time schedule in reporting forwork.
xxxx
Section 9. Off-setting of tardiness or absences by
working for an equivalent number of minutes or hours by
which an officer or employee has been tardy or absent,
beyond the regular or approved workinghours of the
employees concerned, shall not be allowed.
From the foregoing rules, it is crystal clear that Judge
Achas (although he was not the respondent in the instant
case) has deviated from the prescribed guidelines. The
law explicitly requires an employee to render a total of
forty (40) hours a week which, if based on the practice of
respondent which bore the approval of Judge Achas (9:15-
11:15 and 2:15-7:00 p.m.), the said schedule glaringly fell
short from the required number of working hours imposed.
However, the instant case is unique on its own that it was
respondent's superior who authorized and approved the
former's working schedule. The alleged
absences/tardiness and loafing of respondent while on
duty during regular officehours were with the knowledge
and consent of the presiding judge and branch clerk
concerned.
Stated differently, it is more prudent to admonish not only
the respondent but also Judge Achas and Clerk of Court
Zapatos for circumventing the Civil Service rules without
proper authority and for tolerating respondent to commit
such violation.
RECOMMENDATION: Respectfully submitted for the
consideration of the Honorable Court is our
recommendation that respondent Manuel Z. Araya, Jr.
beREPRIMANDED for not faithfully reflecting the exact
time of his arrival and departure in his daily time
record with WARNING that a repetition of the same or
similar act in the future will be dealt with more severely;
and that Judge Rio Concepcion Achas and Clerk of Court III
Renato L. Zapatos be ADMONISHED for violating the Civil
Service Rules without authority from the Court with
WARNINGthat a repetition of the same or similar act in
the future will be dealt with more severely. [7]
In its Resolution of February 7, 2005,[8] the Court required
Judge Achas and Zapatos to show cause why they should
not be held administratively liable for abetting
respondent's violation of the Civil Service Rules.
In his letter dated March 11, 2005,[9] Judge Achas explains
that he did not and will never abet anyone's violation of
the Civil Service Rules, Memorandum Circulars and
existing laws. He stressed that his Comment dated
September 9, 2003 was based on the logbook and other
pertinent documents on hand plus his constant monitoring
not only on respondent but also on the other rank and file
employees in his sala. He challenges the complainants to
come out with specific facts and data including the dates
so that the same could be compared with the record files
to ascertain whether he and his clerk of court side and/or
abet the respondent. He avers that they will not hesitate
to make the necessary complaint and/or report against
any erring rank and file employees and similarly, he is
open for reports and/or complaints against him.
In his letter dated March 22, 2005,[10] Zapatos explains
that it was never his intention to abet, nor will he abet,
respondent's alleged violations, nor of any of the
personnel under his supervision for that matter. He never
lacked exerting efforts of constantly reminding respondent
of his duties and responsibilities as an employee and as
utility worker in particular and of whatever misdemeanors
respondent may have committed although he admitted
that the reminders were mostly done orally and in private
and in a friendly or brotherly approach, not through verbal
scoldings or written memoranda. He further explains that
record will show that for several rating periods in the past
respondent was given a rating of Satisfactory and in the
latest performance evaluation period covering the months
of July to December 2004, respondent was given an
Unsatisfactory rating. That he feels and believes that it
would be unfair to hold him administratively liable for
abetting respondent's alleged violations.
In its Resolution of October 10, 2005,[11] the Court referred
the comments to the OCA for evaluation, report and
recommendation.
In its Compliance[12] dated July 27, 2006, the OCA
reiterates its findings and recommendation as contained in
the Agenda Report of December 15, 2004, there being no
sufficient and weighty justification nor supplemental
explanation proffered by respondent to warrant dismissal
of the complaint against him.
We adopt the findings of the OCA except as to the
recommended action against Judge Achas and Zapatos.
On falsification of daily time record.
It is noted that per Judge Achass admission, respondent
reports for work at 9:15-11:15 a.m. and 2:15-7:00 p.m.
based on the flexi-time arrangement. However, the said
arrangement was not faithfully reflected in respondent's
DTR, which is an official document. Based on the above
flexi-time arrangement, respondent reports for work for
only six hours and forty-five minutes which is short of the
required eight hours of work mandated by law. Thus,
respondent incurred tardiness of one hour and fifteen
minutes a day or six hours and fifteen minutes a week,
which is very detrimental to the government service.
It must be stressed that all judicial employees must
devote their official time to government service.[13] They
must exercise at all times a high degree of professionalism
and responsibility, as service in the judiciary is not only a
duty; it is a mission. Moreover, the image of a court of
justice is necessarily mirrored in the conduct, official or
otherwise, of the men and women who work thereat, from
the judge to the last and lowest of its employees.[14]
Public service requires integrity and discipline. For this
reason, public servants must exhibit at all times the
highest sense of honesty and dedication to duty. [15] By the
very nature of their duties and responsibilities,
government employees must faithfully adhere to, hold
sacred and render inviolate the constitutional principle
that a public office is a public trust; that all public officers
and employees must at all times be accountable to the
people, serve them with utmost responsibility, integrity,
loyalty and efficiency.[16]
Respondent explained that to do his duties effectively and
efficiently, he has to do those tasks at a very early
morning hours or sometimes after the close of
office hours.[17] This explanation cannot exculpate him
from liability. At most, it can serve as a mitigating
circumstance. Under the Civil Service Rules, off-setting of
tardiness or absences by working for an equivalent
number of minutes or hours by which an officer or
employer has been tardy or absent, beyond the regular or
approved working hours of the employees concerned, is
not allowed.[18]
On frequent unauthorized absences or tardiness or
loafing.
Records reveal that respondent's alleged
absences/tardiness and loafing while on duty during
regular office hours were with the knowledge and consent
not only of the presiding judge but also of the branch clerk
of court. Thus, the OCA finds both the presiding judge and
the branch clerk of court responsible for tolerating the
acts of respondent. We agree.
Too much leniency on the part of judges is frowned upon.
We held in Lacurom v. Magbanua,[19] citing the case
of Buenaventura v. Benedicto,[20] to wit:
We find the inclination of the respondent judge to leniency
in the administrative supervision of his employees an
undesirable trait. Oftentimes, such leniency provides the
court employees the opportunity to commit minor
transgressions of the laws and slight breaches of official
duty ultimately leading to vicious delinquencies. The
respondent judge should constantly keep a watchful eye
on the conduct of his employees. He should realize that
big start small. His constant scrutiny of the behavior of his
employees would deter any abuse on the part of the latter
in the exercise of their duties. Then, his subordinates
would know that any misdemeanor will not remain
unchecked. The slightest semblance of impropriety on the
part of the employees of the court in the performance of
their official duties stirs ripples of public suspicion and
public distrust of the judicial administrators. The slightest
breach of duty by and the slightest irregularity in the
conduct of court officers and employees detract from the
dignity of the courts and erode the faith of the people in
the judiciary.
In this case, Judge Achas and Zapatos were remiss in their
duty of maintaining proper order in their court. Their
failure to live up to the standards of responsibility required [3]
Id. at 25-26.
warrants disciplinary action for this Court cannot
countenance any conduct, act, or omission on the part of [4]
Id. at 8.
those involved in the administration of justice which will
violate the norms of public accountability and diminish, or [5]
Id. at 9-10.
tend to diminish, the faith of the people in the judicial
system.[21] [6]
Id. at 1-6.

As observed by the OCA, Judge Achas and Zapatos are [7]

Id.
liable for circumventing the Civil Service Rules without
proper authority and for tolerating respondent to commit [8]
Id. at 15.
such violation.
[9]
Id. at 16.
The constant reminders of Zapatos to respondent done
orally, in private and friendly or brotherly approach, prove [10]
Id. at 19.
futile as shown by the fact that respondent subsequently
obtained an Unsatisfactory rating for the period covering [11]
Id. at 32.
July to December 2004. It bears stressing that a court
employee need not be constantly reminded of his duties [12]
Id. at 33-41.
and responsibilities. It behooves upon the employee to do
his job with utmost diligence without waiting for Re: Findings of Irregularity on the Bundy Cards of
[13]

reminders. Zapatos should have issued a memorandum
calling respondent's attention and if the same is not
heeded, for him to report respondent's infractions to Judge
Achas and the OCA for appropriate action. This Zapatos
failed to do.
Personnel of the Regional Trial Court Branch 26 and
Municipal Trial Court, Medina, Misamis Oriental, A.M. No.
04-11-671-RTC, October 14, 2005, 473 SCRA 1, 12.
[14]
Id.

Supreme Court Administrative Circular No. 2-99 provides [15]

Court Personnel of the Office of the Clerk of Court of
that absenteeism and tardiness even if such are not the Regional Trial Court-San Carlos City v. Llamas, A.M No.
habitual or frequent shall be dealt with severely, and any P-04-1925, December 16, 2004, 447 SCRA 60, 62
falsification of DTRs to cover up for such absenteeism or citing Mirano v. Saavedra, 225 SCRA 77, 85.
tardiness shall constitute gross dishonesty or serious
misconduct.[22] Dishonesty, being in the nature of grave [16]
Id.
offense, carries the extreme penalty of dismissal from the
service with forfeiture of retirement benefits except [17]
Rollo, page 25.
accrued leave credits, and perpetual disqualification
for Section 9, Rule XVII, CSC Resolution No. 91-1631, Rules
[18]

Implementing Book V of Executive Order No. 292 and

reemployment in government service.[23] Under the Civil Other Pertinent Civil Service Rules, dated December 27,
Service law,[24] respondent, whose DTR is evidently 1991.
unrepresentative of the truth, should be punished with
dismissal, although it is his first offense. [19]
443 Phil. 711, 720-721 (2003).

While this Court is duty-bound to sternly wield a corrective [20]

148 Phil. 63, 71 (1971).
hand to discipline its errant employees and to weed out
those who are undesirable, this Court also has the [21]
Pimentel v. De Leoz, 448 Phil. 223, 243 (2003).
discretion to temper the harshness of its judgment with
mercy.[25] For when an officer or employee is disciplined, Office of the Court Administrator v. Breta, A.M. No. P-
[22]

the object sought is not the punishment of such officer or 05-2023, March 6, 2006, 484 SCRA 114, 116-117.
employee but the improvement of the public service and
the preservation of the public's faith and confidence in the [23]
Id.
government.[26]
[24]
Section 23, Rule XIV.
Considering that respondent utility worker is a first time Sec. 23. Administrative offenses with its corresponding
offender and considering further that his reliance in good penalties are classified into grave, less grave, and light,
faith that the flexi-time arrangement is legal, and his depending on the gravity of its nature and effects of said
being out of the office during office hours is brought about acts on the government service.
by the flexi-time erroneously allowed by Judge Achas who The following are grave offenses with its corresponding
presumably knows the law coupled with the fact that he penalties:
did his tasks before and after officehours so as not to (a) Dishonesty (1st Offense, Dismissal)
disturb his co-employees, serve to mitigate his liability. (b) Falsification of official document (1st Offense
Dismissal)
ACCORDINGLY, the Court finds Manuel Z. Araya, Jr. guilty [25]
Aquino v. Fernandez, A.M. No. P-01-1475, October 17,
of dishonesty in not faithfully reflecting the exact time of 2003, 413 SCRA 597, 607.
his arrival and departure in his daily time record and
isREPRIMANDED with WARNING that a repetition of the Civil Service Commission v. Cortez, G.R. No. 155732,
[26]

same or similar act in the future will be dealt with more June 3, 2004, 430 SCRA 593, 608.
severely.

Judge Rio Concepcion Achas and Clerk of Court III Renato

L. Zapatos are REPRIMANDED for violating the Civil
Service Rules without authority from the Court
with WARNING that a repetition of the same or similar act
in the future will be dealt with more severely.

SO ORDERED.

Ynares-Santiago, (Chairperson), Callejo, Sr., and Chico-

Nazario, JJ., concur.

[1]
Rollo, p. 7.
[2]
Id. at 11-13.

SECOND DIVISION
[ G.R. No. 163147, October 10, 2007 ]
LINTON COMMERCIAL CO., INC. AND DESIREE ONG,
PETITIONERS, VS. ALEX A. HELLERA, FRANCISCO
RACASA, DANTE ESCARLAN, DONATO SASA,
RODOLFO OLINAR, DANIEL CUSTODIO, ARTURO
POLLO, ROBERT OPELIA, B. PILAPIL, WINIFREG
BLANDO, JUANITO GUILLERMO, DONATO BONETE,
ISAGANI YAP, CESAR RAGONON, BENEDICTO ILAGAN,
REXTE SOLANOY, RODOLFO LIM, ERNESTO
ALCANTARA, DANTE DUMAPE, FELIPE CAGOCO, JR.,
JOSE NARCE, NELIO CANTIGA, QUIRINO C. ADA,
MANUEL BANZON, JOEL F. ADA, SATPARAM ELMER,
ROMEO BALAIS, CLAUDIO S. MORALES, DANILO
NORLE, LEONCIO RACASA, NOEL LEONCIO RACASA,
NOEL ACEDILLA, ELPIDIO E. VERGABINIA, JR.,
CONRADO CAGOCO, ROY BORAGOY, EDUARDO
GULTIA, REYNALDO SANTOS, LINO VALENCIA, ROY
DURANO, LEO VALENCIA, ROBERTO BLANDO,
JAYOMA A., NOMER ALTAREJOS, RAMON OLINAR III,
SATURNINO C. EBAYA, FERNANDO R. REBUCAS,
NICANOR L. DE CASTRO, EDUARDO GONZALES,
ISAGANI GONZALES, THOMAS ANDRAB, JR., MINIETO
DURANO, ERNESTO VALLENTE, NONITO I. DULA,
NESTOR M. BONETE, JOSE SALONOY, ALBERTO
LAGMAN, ROLANDO TORRES, ROLANDO TOLDO,
ROLINDO CUALQUIERA, ARMANDO LIMA, FELIX D.
DUMARE, ALFREDO SELAPIO, MARTIN V.
VILLACAMPA, JR., CARLITO PABLE, DANTE
ESCARLAN, M. DURANO, RAMON ROSO, LORETA
RAFAEL, AND ELEZAR MELLEJOR, RESPONDENTS.
DECISION
TINGA, J,:
This is a petition for review under Rule 45 of the Rules of
Civil Procedure seeking the reversal of the Decision [1] of
the Court of Appeals promulgated on 12 December 2003
as well as its Resolution[2] promulgated on 2 April 2004
denying petitioners' motion for reconsideration.
This case originated from a labor complaint filed before
the National Labor Relations Commission (NLRC) in which
herein respondents contended that petitioner Linton
Commercial Company, Inc. (Linton) had committed illegal
reduction of work when it imposed a reduction
ofwork hours thereby affecting its employees.
Linton is a domestic corporation engaged in the business
of importation, wholesale, retail and fabrication of steel
and its by-products.[3] Petitioner Desiree Ong is Linton's
vice president.[4] On 17 December 1997, Linton issued a
memorandum[5] addressed to its employees informing
them of the company's decision to suspend its operations
from 18 December 1997 to 5 January 1998 due to the
currency crisis that affected its business operations. Linton
submitted an establishment termination report [6] to the
Department of Labor and Employment (DOLE) regarding
the temporary closure of the establishment covering the
said period. The company's operation was to resume on 6
January 1998.
On 7 January 1997,[7] Linton issued another
memorandum[8] informing them that effective 12 January
1998, it would implement a new compressed workweek of
three (3) days on a rotation basis. In other words, each
worker would be working on a rotation basis for three
working days only instead for six days a week. On the
same day, Linton submitted an establishment termination
report[9] concerning the rotation of its workers. Linton
proceeded with the implementation of the new policy
without waiting for its approval by DOLE.
Aggrieved, sixty-eight (68) workers (workers) filed a
Complaint for illegal reduction of workdays with the
Arbitration Branch of the NLRC on 17 July 1998.
On the other hand, the workers pointed out that Linton
implemented the reduction of workhours without
observing Article 283 of the Labor Code, which required
submission of notice thereof to DOLE one month prior to
the implementation of reduction of personnel, since Linton
filed only the establishment termination report enacting
the compressed workweek on the very date of its
implementation.[10]
Petitioners, on the other hand, contended that the
devaluation of the peso created a negative impact in
international trade and affected their business because a
majority of their raw materials were imported. They
claimed that their business suffered a net loss of
P3,569,706.57 primarily due to currency devaluation and
the slump in the market. Consequently, Linton decided to
reduce the working days of its employees to three (3) days
on a rotation basis as a cost-cutting measure. Further,
petitioners alleged that the compressed workweek was
actually implemented on 12 January 1998 and not on 7
January 1998, and that Article 283 was not applicable to
the instant case.[11]
Pending decision of the Labor Arbiter, twenty-one (21) of
the workers signed individual release and quitclaim
documents stating that they had voluntarily tendered their
resignation as employees of Linton and that they had been
fully paid of all monetary compensation due them. [12]
On 28 January 2000, the Labor Arbiter rendered a
Decision[13] finding petitioners guilty of illegal reduction
of work hours and directing them to pay each of the
workers their three (3) days/week's worth
of work compensation from 12 January 1998 to 13 July
1998.
Petitioners appealed to the National Labor Relations
Commission (NLRC). In a Resolution[14]promulgated on 29
June 2001, the NLRC reversed the decision of the Labor
Arbiter. The NLRC held that an employer has the
prerogative to control all aspects of employment in its
business organization, including the supervision of
workers, work regulation, lay-off of workers, dismissal and
recall of workers. The NLRC took judicial notice of the
Asian currency crisis in 1997 and 1998 thus finding
Linton's decision to implement a compressed workweek as
a valid exercise of management prerogative. Moreover,
the NLRC ruled that Article 283 of the Labor Code, which
requires an employer to submit a written notice to DOLE
one (1) month prior to the closure or reduction of
personnel, is not applicable to the instant case because no
closure was undertaken and no reduction of employees
was implemented by Linton. Lastly, the NLRC took note
that there were twenty-one (21) complainants-
workers[15] who had already resigned and executed
individual waivers and quitclaims. Consequently, the NRLC
considered them as dropped from the list of complainants.
The workers' motion for reconsideration was denied in a
Resolution[16] dated 24 September 2001.
The workers then filed before the Court of Appeals[17] a
petition for certiorari under Rule 65 of the Rules of Civil
Procedure assailing the decision[18] of the NLRC and its
resolution[19] that denied their Motion for Reconsideration.
In the petition, the workers claimed that the NLRC erred in
finding that the one (1) month notice requirement under
Article 283 of the Labor Code did not apply to the instant
case; that Linton did not exceed the limits of its business
prerogatives; and that Linton was able to establish a
factual basis on record to justify the reduction
of work days.
In its Comment,[20] Linton highlighted the fact that the
caption, the body as well as the verification of the petition
submitted by complainants-workers indicated solely "Alex
Hellera, et al." as petitioners. Linton argued that the
petition was defective and did not necessarily include the
other workers in the proceedings before the NLRC. Linton
also mentioned that 21 out of the 68 complainants-
workers executed individual resignation letters and
individual waivers and quitclaims.[21] With these waivers
and quitclaims, Linton raised in issue whether the petition
still included the signatories of said documents. Moreover,
Linton pointed out that the caption of the petition did not
include the NLRC as party respondent, which made for
another jurisdictional defect. The rest of its arguments
were merely a reiteration of its arguments before the
NLRC.
In reversing the NLRC, the Court of Appeals, in its
Decision[22] dated 12 December 2003 ruled that the failure
to indicate all the names of petitioners in the caption of
the petition was not violative of the Rules of Court
because the records of the case showed that there were
sixty-eight (68) original complainants who filed the
complaint before the Arbitration Branch of the NLRC. The
appellate court likewise considered the quitclaims and
release documents as "ready documents" which did not
change the fact that the 21 workers were impelled to sign
the same. The appellate court gave no credence to the
said quitclaims, considering the economic disadvantage
that would be suffered by the employees. The appellate
court also noted that the records did not show that the 21
workers desisted from pursuing the petition and that the
waivers and quitclaims would not bar the 21 complainants
from continuing the action.[23]
On the failure to include the NLRC as party respondent,
the appellate court treated the NLRC as a nominal party
which ought to be joined as party to the petition simply
because the technical rules require its presence on record.
The inclusion of the NLRC in the body of the petition was
deemed by the appellate court as substantial compliance
with the rules.
On the main issues, the Court of Appeals ruled that the
employees were constructively dismissed because the
short period of time between the submission of the
establishment termination report informing DOLE of its
intention to observe a compressed workweek and the
actual implementation thereat was a manifestation of
Linton's intention to eventually retrench the employees. It
found that Linton had failed to observe the substantive
and procedural requirements of a valid dismissal or
retrenchment to avoid or minimize business losses since it
had failed to present adequate, credible and persuasive
evidence that it was indeed suffering, or would imminently
suffer, from drastic business losses. Linton's financial
statements for 1997-1998 showed no indication of
financial losses, and the alleged loss of P3,645,422.00 in
1997 was considered insubstantial considering its total
asset of P1,065,948,601.00.Hence, the appellate court
considered Linton's losses as de minimis.[24]
Lastly, the appellate court found Linton to have failed to
adopt a more sensible means of cutting the costs of its
operations in less drastic measures not grossly
unfavorable to labor. Hence, Linton failed to establish
enough factual basis to justify the necessity of a reduced
workweek.[25]
Petitioners filed a motion for reconsideration[26] which the
appellate court denied through a Resolution [27] dated 2
April 2004.
In filing the instant petition for review, petitioners allege
that the Court of Appeals erred when it considered the
petition as having been filed by all sixty (68) workers, in
disregard of the fact that only "Alex Hellera, et al." was
indicated as petitioner in the caption, body and
verification of the petition and twenty-one (21) of the
workers executed waivers and quitclaims. Petitioners
further argue that the Court of Appeals erred in annulling
the release and quitclaim documents signed by 21
employees because no such relief was prayed for in the
petition. The validity of the release and quitclaim was also
not raised as an issue before the labor arbiter nor the
NLRC. Neither was it raised in the very petition filed before
the Court of Appeals. Petitioners conclude that the Court
of Appeals, therefore, had invalidated the waivers and
quitclaims motu proprio.
Petitioners also allege that the Court of Appeals erred
when it held that the reduction of workdays is equivalent
to constructive dismissal. They posit that there was no
reduction of salary but instead only a reduction of working
days from six to three days per week. Petitioners add that
the reduction of workdays, while not expressly covered by
any of the provisions of the Labor Code, is analogous to
the situation contemplated in Article 286[28] of the Labor
Code because the company implemented the reduction of
workdays to address its financial losses. Lastly, they note
that since there was no retrenchment, the one-month
notice requirement under Article 283 of the Labor Code is
not applicable.
First, we resolve the procedural issues of the case. Rule 7,
Section 1 of the Rules of Court states that the names of
the parties shall be indicated in the title of the original
complaint or petition. However, the rules itself endorses
its liberal construction if it promotes the objective of
securing a just, speedy and inexpensive disposition of the
action or proceeding.[29] Pleadings shall be construed
liberally so as to render substantial justice to the parties
and to determine speedily and inexpensively the actual
merits of the controversy with the least regard to
technicalities.[30]
In Vlason Enterprises Corporation v. Court of
Appeals[31] the Court pronounced that, while the general
rule requires the inclusion of the names of all the parties
in the title of a complaint, the non-inclusion of one or
some of them is not fatal to the cause of action of a
plaintiff, provided there is a statement in the body of the
petition indicating that a defendant was made a party to
such action. If in Vlason the Court found that the absence
of defendant's name in the caption would not cause the
dismissal of the action, more so in this case where only
the names of some of petitioners were not reflected. This
is consistent with the general rule that mere failure to
include the name of a party in the title of a complaint is
not fatal by itself.[32]
Petitioners likewise challenge the absence of the names of
the other workers in the body and verification of the
petition. The workers' petition shows that the petition
stipulated as parties-petitioners "Alex A. Hellera, et al." as
employees of Linton, meaning that there were more than
one petitioner who were all workers of Linton. The petition
also attached the resolution[33] of the NLRC where the
names of the workers clearly appear. As documents
attached to a complaint form part thereof,[34] the petition,
therefore has sufficiently indicated that the rest of the
workers were parties to the petition.
With respect to the absence of the workers' signatures in
the verification, the verification requirement is deemed
substantially complied with when some of the parties who
undoubtedly have sufficient knowledge and belief to swear
to the truth of the allegations in the petition had signed
the same. Such verification is deemed a sufficient
assurance that the matters alleged in the petition have
been made in good faith or are true and correct, and not
merely speculative.[35] The verification in the instant
petition states that Hellera, the affiant, is the president of
the union of "which complainants are all members and
officers."[36] As the matter at hand is a labor dispute
between Linton and its employees, the union president
undoubtedly has sufficient knowledge to swear to the
truth of the allegations in the petition. Hellera's
verification sufficiently meets the purpose of the
requirements set by the rules.
Moreover, the Court has ruled that the absence of a
verification is not jurisdictional, but only a formal defect.
[37]
Indeed, the Court has ruled in the past that a pleading
required by the Rules of Court to be verified may be given
due course even without a verification if the
circumstances warrant the suspension of the rules in the
interest of justice.[38]
We turn to the propriety of the Court of Appeals' ruling on
the invalidity of the waivers and quitclaims executed by
the 21 workers. It must be remembered that the petition
filed before the Court of Appeals was a petition for
certiorari under Rule 65 in which, as a rule, only
jurisdictional questions may be raised, including matters
of grave abuse of discretion which are equivalent to lack
of jurisdiction.[39] The issue on the validity or invalidity of
the waivers and quitclaims was not raised as an issue in
the petition. Neither was it raised in the NLRC. There is no
point of reference from which one can determine whether
or not the NLRC committed grave abuse of discretion in its
finding on the validity and binding effect of the waivers
and quitclaims since this matter was never raised in issue
in the first place.
In addition, petitioners never had the opportunity to
support or reinforce the validity of the waivers and
quitclaims because the authenticity and binding effect
thereof were never challenged. In the interest of fair play,
justice and due process, the documents should not have
been unilaterally evaluated by the Court of Appeals. Thus,
the corresponding modification of its Decision should be
ordained.
After resolving the technical aspects of this case, we now
proceed to the merits thereof. The main issue in this labor
dispute is whether or not there was an illegal reduction
of work when Linton implemented a compressed
workweek by reducing from six to three the number of
working days with the employees working on a rotation
basis.
In Philippine Graphic Arts, Inc. v. NLRC,[40] the Court upheld
for the validity of the reduction of working hours, taking
into consideration the following: the arrangement was
temporary, it was a more humane solution instead of a
retrenchment of personnel, there was notice and
consultations with the workers and supervisors, a
consensus were reached on how to deal with deteriorating
economic conditions and it was sufficiently proven that the
company was suffering from losses.
The Bureau of Working Conditions of the DOLE, moreover,
released a bulletin[41] providing for in determining when an
employer can validly reduce the regular number of
working days. The said bulletin states that a reduction of
the number of regular working days is valid where the
arrangement is resorted to by the employer to prevent
serious losses due to causes beyond his control, such as
when there is a substantial slump in the demand for his
goods or services or when there is lack of raw materials.
Although the bulletin stands more as a set of directory
guidelines than a binding set of implementing rules, it has
one main consideration, consistent with the ruling
in Philippine Graphic Arts Inc., in determining the validity
of reduction of working hours--that the company was
suffering from losses.
Petitioners attempt to justify their action by alleging that
the company was suffering from financial losses owing to
the Asian currency crisis. Was petitioners' claim of
financial losses supported by evidence?
The lower courts did not give credence to the income
statement submitted by Linton because the same was not
audited by an independent auditor.[42] The NLRC, on the
other hand, took judicial notice of the Asian currency crisis
which resulted in the devaluation of the peso and a slump
in market demand.[43] The Court of Appeals for its part held
that Linton failed to present adequate, credible and
persuasive evidence to show that it was in dire straits and
indeed suffering, or would imminently suffer, from drastic
business losses. It did not find the reduction
of work hours justifiable, considering that the alleged loss
of P3,645,422.00 in 1997 is insubstantial compared to
Linton's total asset of P1,065,948,601.76. [44]
A close examination of petitioners' financial reports for
1997-1998 shows that, while the company suffered a loss
of P3,645,422.00 in 1997, it retained a considerable
amount of earnings[45] and operating income.[46] Clearly
then, while Linton suffered from losses for that year, there
remained enough earnings to sufficiently sustain its
operations. In business, sustained operations in the black
is the ideal but being in the red is a cruel reality. However,
a year of financial losses would not warrant the
immolation of the welfare of the employees, which in this
case was done through a reduced workweek that resulted
in an unsettling diminution of the periodic pay for a
protracted period. Permitting reduction of work and pay at
the slightest indication of losses would be contrary to the
State's policy to afford protection to labor and provide full
employment.[47]
Certainly, management has the prerogative to come up
with measures to ensure profitability or loss minimization.
However, such privilege is not absolute. Management
prerogative must be exercised in good faith and with due
regard to the rights of labor.[48]
As previously stated, financial losses must be shown
before a company can validly opt to reduce
the work hours of its employees. However, to date, no
definite guidelines have yet been set to determine
whether the alleged losses are sufficient to justify the
reduction of workhours. If the standards set in
determining the justifiability of financial losses under
Article 283 (i.e., retrenchment) or Article 286 (i.e.,
suspension of work) of the Labor Code were to be
considered, petitioners would end up failing to meet the
standards. On the one hand, Article 286 applies only
when there is a bona fide suspension of the employer's
operation of a business or undertaking for a period not
exceeding six (6) months.[49] Records show that Linton
continued its business operations during the effectivity of
the compressed workweek, which spanned more than the
maximum period. On the other hand, for retrenchment to
be justified, any claim of actual or potential business
losses must satisfy the following standards: (1) the losses
incurred are substantial and not de minimis; (2) the losses
are actual or reasonably imminent; (3) the retrenchment is
reasonably necessary and is likely to be effective in
preventing the expected losses; and (4) the alleged losses,
if already incurred, or the expected imminent losses
sought to be forestalled, are proven by sufficient and
convincing evidence.[50] Linton failed to comply with these
standards.
All taken into account, the compressed workweek
arrangement was unjustified and illegal. Thus, petitioners
committed illegal reduction of work hours.
In assessing the monetary award in favor of respondents,
the Court has taken the following factors into account:
(1) The compressed workweek arrangement was lifted
after six (6) months, or on 13 July 1998.[51] Thus, Linton
resumed its regular operations and discontinued the
emergency measure;
(2) The claims of the workers, as reflected in their
pleadings, were narrowed to petitioners' illegal reduction
of their work hours and the non-payment of their
compensation for three (3) days a week from 12 January
1998 to 13 July 1998. They did not assert any other
claims;
(3) As found by the NLRC, 21 of the workers are no longer
entitled to any monetary award since they had already
executed their respective waivers and quitclaims. We give
weight to the finding and exclude the 21 workers as
recipients of the award to be granted in this case.
Consequently, only the following workers are entitled to
the award, with the amounts respectively due them stated
opposite their names:
1. Alex A. - P16,368.30
Hellera
2. Francisco - 16,458.00
Racasa
3. Dante - 15,912.00
Escarlan
4. Donato - 15,580.50
Sasa
5. Rodolfo - 15,912.00
Olinar
6. Daniel - 15,912.00
Custodio
7. Arturo Pollo - 16,660.80
8. B. Pilapil - 16,075.80
9. Donato - 15,600.00
Bonete
10. Isagani - 15,678.00
Yap Lagman
11. Cesar - 16,068.00 39. Rolando - 15,678.00
Ragonon Torres
12. Benedicto - 15,775.50 40. Rolindo - 16,068.00
Bagan Cualquiera
13. Rexte - 15,678.00 41. Armando - 16,426.80
Solanoy Lima
14. Felipe - 15,990.00 42. Alfredo - 16,060.20
Cagoco, Jr. Selapio
15. Jose Narce - 16,348.80 43. Martin V. - 15,939.30
16. Quirino C. - 15,990.00 Villacampa
Ada 44. Carlito - 16,263.00
17. Salfaram - 16,302.00 Pable
Elmer 45. Dante - 15,912.00
18. Romeo - 16,302.00 Escarlan
Balais 46. M. Durano - 16,614.00
19. Claudio S. - 15,947.10 47. Ramon - 16,302.00[52]
Morales Roso
20. Elpidio E. - 15,561.00 (4) The Labor Arbiter's decision in favor of respondents
Vergabinia was reversed by the NLRC. Considering that there is no
21. Conrado - 15,990.00 provision for appeal from the decision of the NLRC,
Cagoco [53]
petitioners should not be deemed at fault in not paying
22. Roy - 15,892.50 the award as ordered by the Labor Arbiter. Petitioners'
Boragoy liability only gained a measure of certainty only when the
23. Reynaldo - 16,200.60 Court of Appeals reversed the NLRC decision. In the
Santos interest of justice, the 6% legal interest on the award
24. Lino - 15,678.00 should commence only from the date of promulgation of
Valencia the Court of Appeals' Decision on 12 December 2003.
25. Roy - 15,678.00
Durano WHEREFORE, the Petition is GRANTED IN PART. The
26. Leo - 15,678.00 decision of the Court of Appeals reinstating the decision of
Valencia the Labor Arbiter is AFFIRMED with MODIFICATION to the
27. Jayoma A. - 15,561.00 effect that the 21 workers who executed waivers and
28. Ramon - 15,678.00 quitclaims are no longer entitled to back payments.
Olinar III Petitioners are ORDERED TO PAY respondents, except the
29. Saturnino - 15,919.80 aforementioned 21 workers, the monetary award as
C. Ebaya computed,[54] pursuant to the decision of the Labor
30. Nicanor L. - 16,614.00 Arbiter[55] with interest at the rate of 6% per annum from
de Castro 12 December 2003, the date of promulgation of the Court
31. Eduardo - 15,678.00 of Appeals' decision, until the finality of this decision, and
Gonzales thereafter at the rate of 12% per annum until full
32. Isagani - 16,469.70 payment.
Gonzales
33. Thomas - 15,912.00 SO ORDERED.
Andrab, Jr.
34. Minieto - 16,660.80 Quisumbing, (Chairperson), Carpio, Carpio-
Durano Morales, and Velasco, Jr., JJ., concur.
35. Ernesto - 15,997.80
Vallente
36. Nestor M. - 15,705.30
Bonete
37. Jose - 16,458.00
Salonoy
38. Alberto - 16,660.80