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    1) The document discusses a case involving an employee, Lettie Corpuz, who was terminated by her employer, Philippine Long Distance Telephone Company (PLDT), for allegedly facilitating calls from a disconnected phone number. 2) While the employer claimed this was fraudulent, the court found no concrete evidence proving the employee's complicity, as other operators had similar experiences and lapses in the employer's system could have allowed calls from disconnected numbers. 3) The court ultimately ruled in favor of the employee, finding the employer failed to prove just cause for termination and did not provide the employee adequate opportunity to defend herself.

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    1) The document discusses a case involving an employee, Lettie Corpuz, who was terminated by her employer, Philippine Long Distance Telephone Company (PLDT), for allegedly facilitating calls from a disconnected phone number. 2) While the employer claimed this was fraudulent, the court found no concrete evidence proving the employee's complicity, as other operators had similar experiences and lapses in the employer's system could have allowed calls from disconnected numbers. 3) The court ultimately ruled in favor of the employee, finding the employer failed to prove just cause for termination and did not provide the employee adequate opportunity to defend herself.

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    151 views63 pages

    II. General Labor Concepts

    Uploaded by

    KitingPadayhag
    1) The document discusses a case involving an employee, Lettie Corpuz, who was terminated by her employer, Philippine Long Distance Telephone Company (PLDT), for allegedly facilitating calls from a disconnected phone number. 2) While the employer claimed this was fraudulent, the court found no concrete evidence proving the employee's complicity, as other operators had similar experiences and lapses in the employer's system could have allowed calls from disconnected numbers. 3) The court ultimately ruled in favor of the employee, finding the employer failed to prove just cause for termination and did not provide the employee adequate opportunity to defend herself.

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    of 63

    II.

    GENERAL LABOR CONCEPTS

    SECOND DIVISION
    [G.R. No. 111933. July 23, 1997]
    PHILIPPINE LONG DISTANCE TELEPHONE COMPANY , petitioner, vs. NATIONAL LABOR RELATIONS
    COMMISSION and LETTIE P. CORPUZ, respondents.
    DECISION
    ROMERO, J.:
    This petition for certiorari pleads for the revocation of the November 16, 1992, decision of the National Labor
    Relations Commission (NLRC), affirming in toto the resolution of Labor Arbiter Jose G. De Vera dated February 28, 1991,
    as well as its resolution dated August 20, 1993, denying petitioners motion for reconsideration for lack of merit.
    Private respondent Lettie Corpuz was employed as traffic operator at the Manila International Traffic Division (MITD)
    by the Philippine Long Distance Telephone Company (PLDT) for ten years and nine months, from September 19, 1978,
    until her dismissal on June 17, 1989.Her primary task was to facilitate requests for incoming and outgoing international
    calls through the use of a digital switchboard.
    Sometime in December 1987, PLDTs rank-and-file employees and telephone operators went on strike, prompting the
    supervisors of the MITD to discharge the formers duties to prevent a total shutdown of its business operations. While in
    the course of their emergency assignments, two supervisors almost simultaneously received two different requests for
    overseas calls bound for different Middle East countries and both callers reported the same calling number (98-68-
    16).[1] The tone verifications having yielded negative results, the callers were advised to hang up their telephones to
    enable the supervisors to effect an alternative verification system by calling the same number again. As in the first
    instance, the number remained unverified. Investigating the seemingly anomalous incident, the matter was reported to
    the Quality Control Inspection Department (QCID) which revealed that the subject number was temporarily disconnected
    on June 10, 1987, and permanently on September 24, 1987. It also showed that 439 overseas calls were made through
    the same number between May and November 1987.
    On account of such disclosure, the microfiches containing the completed calls through telephone number 98-68-16
    were ordered to be re-run. It yielded the following results: (1) 235 telephone operators handled the 439 calls placed
    through the supposedly disconnected number; (2) respondent handled 56 or 12.8% of the total calls, while the other
    operators had an average of only 1.8% calls each; (3) respondent completed one call on May 23, 1987 and effected 34
    calls after the disconnection, 24 of which were completed through tone verification while the other 10 calls were done
    without the requisite tone verification or call-back procedure, and 21 other calls were cancelled; (4) of the 21 cancelled
    calls handled by respondent, one bared a BU report (party unavailable) but fetched a long OCD (operator call duration) of
    13 minutes and 21 seconds while another call registered a BB report (called party, busy) but with an OCD of 22 minutes
    and 34 seconds, both considered unusually protracted by respondent for holding a connection; and (5) respondent made
    several personal calls to telephone numbers 96-50-72, 99-92-82 and 97-25-68, the latter being her home phone number.
    Premised on the above findings, on July 26, 1988, MITD Manager Erlinda Kabigting directed respondent to explain
    her alleged infraction, that is, facilitating 34 calls using the disconnected number.
    Instead of tendering the required explanation, respondent requested a formal investigation to allow her to confront
    the witnesses and rebut the proofs that may be brought against her. On grounds of serious misconduct and breach of
    trust, the Legal Department recommended her dismissal. In a letter dated June 16, 1989, respondent was terminated
    from employment effective the following day.
    In a complaint for illegal dismissal filed by respondent against petitioner, Labor Arbiter Jose G. De Vera rendered a
    decision, the dispositive portion of which reads thus:
    WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered ordering the
    respondent company to reinstate the complainant to her former position with all the rights, benefits and
    privileges thereto appertaining including seniority plus backwages which as ofFebruary 28, 1991 already
    amounted to P103,381.50 (P5,043.00 mo. x. 20.5 mos.). Further, the respondent company is ordered to pay
    complainant attorneys fees equivalent to ten percent (10%) of such backwages that the latter may recover in
    this suit.
    SO ORDERED.[2]
    On appeal, said decision was affirmed by the NLRC on November 16, 1992. Its motion for reconsideration having
    been denied on August 20, 1993, petitioner filed the instant petition for certiorari.
    The instant petition must be dismissed. Petitioner failed to adduce any substantial argument that would warrant a
    reversal of the questioned decision.
    Time and again, this Court has reminded employers that while the power to dismiss is a normal prerogative of the
    employer, the same is not without limitations. [3] The right of an employer to freely discharge his employees is subject to
    regulation by the State, basically through the exercise of its police power. This is so because the preservation of the lives
    of citizens is a basic duty of the State, an obligation more vital than the preservation of corporate profits.[4]
    Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of the 439 calls coming from
    telephone number 98-68-16 and received numerous requests for overseas calls virtually from the same calling number,
    which could not have been a mere coincidence but most likely was a pre-arranged undertaking in connivance with certain
    subscribers.
    The records show, however, that the subject phone calls were neither unusual nor coincidental as other operators
    shared similar experiences. A certain Eric Maramba declared that it is not impossible for an operator to receive continuous
    calls from the same telephone number. He testified that at one time, he was a witness to several calls consistently
    effected from 9:30 p.m. to 5:30 a.m. The calls having passed the verification tone system, the incident was undoubtedly
    alarming enough but there was no way that he or his co-operators could explain the same.
    This Court agrees with the labor arbiter when he stated that the more frequent handling by the respondent of
    overseas calls from the same calling number than other operators does not give rise to the conclusion that, indeed,
    respondent was a party to such anomalous transaction.
    As regards petitioners claim that no call can be filed through a disconnected line, a certain Ms. Bautista averred
    getting the same subject number after going through the standard verification procedures. She added that this
    complexity extends even to other disconnected telephone lines. Equally important is the fact that on February 7, 1989, or
    about two years after it was permanently disconnected, telephonenumber 98-68-16 was used in calling an international
    number, 561-6800, that lasted for 46 minutes.[5] Telephone operator number 448 seems to have been spared from any
    administrative sanction considering that this lapse has aggravated the persistent problem concerning telephone number
    98-68-16.
    Thus, Labor Arbiter de Vera correctly ruled:
    It need not be emphasized here that there were lapses in certain operational aspects of the respondent
    company which made the irregularity possible, for indeed there exists a mystery about the serviceability of the
    subject telephone line. That there were personnel of the respondent company involved who could have restored
    what was earlier disconnected permanently appears certain. Nonetheless, exacting the ultimate blame upon the
    respondent (complainant) in the absence of concrete inculpatory proofs of her complexity (sic) to an anomaly if
    there be one, cannot be justified.[6]
    This Court will not sanction a dismissal premised on mere conjectures and suspicions. To be a valid ground for
    respondents dismissal, the evidence must be substantial and not arbitrary and must be founded on clearly established
    facts sufficient to warrant his separation from work.[7]
    It should be borne in mind that in termination cases, the employer bears the burden of proving that the dismissal is
    for just cause failing which would mean that the dismissal is not justified and the employee is entitled to
    reinstatement.[8] The essence of due process in administrative proceedings is the opportunity to explain ones side or a
    chance to seek reconsideration of the action or ruling complained of. [9] The twin requirements of notice and hearing
    constitute the essential elements of due process. This simply means that the employer shall afford the worker ample
    opportunity to be heard and to defend himself with the assistance of his representative, if he so desires. Ample
    opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare
    adequately for his defense including legal representation.[10] In the instant case, the petitioner failed to convincingly
    establish valid bases on the alleged serious misconduct and loss of trust and confidence.
    In carrying out and interpreting the Labor Codes provisions and its implementing regulations, the workingmans
    welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance
    to the liberal and compassionate spirit of the law as provided for in Article 4 of the Labor Code, as amended, which states
    that all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing
    rules and regulations shall be resolved in favor of labor, [11] as well as the Constitutional mandate that the State shall
    afford full protection to labor and promote full employment opportunities for all. Likewise, it shall guarantee the rights of
    all workers to security of tenure. Such constitutional right should not be denied on mere speculation of any unclear and
    nebulous basis.[12]
    WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision dated November 16,
    1992 is AFFIRMED.Costs against petitioner Philippine Long Distance Telephone Co.
    SO ORDERED.
    Republic of the Philippines
    SUPREME COURT
    Manila
    THIRD DIVISION
    CHERRY J. PRICE, STEPHANIE G. DOMINGO AND G.R. No. 178505
    LOLITA ARBILERA, Petitioners, Present:
    - versus - YNARES-SANTIAGO, J.,
    INNODATA PHILS. INC.,/ INNODATA CORPORATION, Chairperson,
    LEO RABANG AND JANE NAVARETTE, Respondents. AUSTRIA-MARTINEZ,
    CHICO-NAZARIO,
    NACHURA, and
    REYES, JJ.
    Promulgated:
    September 30, 2008
    x------------------------------------------------x
    DECISION
    CHICO-NAZARIO, J.:
    This Petition for Review on Certiorari under Rule 45 of the Rules of Court assails the Decision1 dated 25 September 2006
    and Resolution2 dated 15 June 2007 of the Court of Appeals in CA-G.R. SP No. 72795, which affirmed the Decision dated
    14 December 2001 of the National Labor Relations Commission (NLRC) in NLRC NCR Case No. 30-03-01274-2000 finding
    that petitioners were not illegally dismissed by respondents.
    The factual antecedents of the case are as follows:
    Respondent Innodata Philippines, Inc./Innodata Corporation (INNODATA) was a domestic corporation engaged in the
    data encoding and data conversion business. It employed encoders, indexers, formatters, programmers, quality/quantity
    staff, and others, to maintain its business and accomplish the job orders of its clients. Respondent Leo Rabang was its
    Human Resources and Development (HRAD) Manager, while respondent Jane Navarette was its Project Manager.
    INNODATA had since ceased operations due to business losses in June 2002.
    Petitioners Cherry J. Price, Stephanie G. Domingo, and Lolita Arbilera were employed as formatters by INNODATA. The
    parties executed an employment contract denominated as a "Contract of Employment for a Fixed Period," stipulating that
    the contract shall be for a period of one year, 3 to wit:
    CONTRACT OF EMPLOYMENT FOR A FIXED PERIOD
    xxxx
    WITNESSETH: That
    WHEREAS, the EMPLOYEE has applied for the position of FORMATTER and in the course thereof and represented
    himself/herself to be fully qualified and skilled for the said position;
    WHEREAS, the EMPLOYER, by reason of the aforesaid representations, is desirous of engaging that the (sic) services of
    the EMPLOYEE for a fixed period;
    NOW, THEREFORE, for and in consideration of the foregoing premises, the parties have mutually agreed as follows:
    TERM/DURATION
    The EMPLOYER hereby employs, engages and hires the EMPLOYEE and the EMPLOYEE hereby accepts such appointment
    as FORMATTER effective FEB. 16, 1999 to FEB. 16, 2000 a period of ONE YEAR.
    xxxx
    TERMINATION
    6.1 In the event that EMPLOYER shall discontinue operating its business, this CONTRACT shall also ipso facto terminate
    on the last day of the month on which the EMPLOYER ceases operations with the same force and effect as is such last
    day of the month were originally set as the termination date of this Contract. Further should the Company have no more
    need for the EMPLOYEEs services on account of completion of the project, lack of work (sic) business losses, introduction
    of new production processes and techniques, which will negate the need for personnel, and/or overstaffing, this contract
    maybe pre-terminated by the EMPLOYER upon giving of three (3) days notice to the employee.
    6.2 In the event period stipulated in item 1.2 occurs first vis--vis the completion of the project, this contract shall
    automatically terminate.
    6.3 COMPANYs Policy on monthly productivity shall also apply to the EMPLOYEE.
    6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this CONTRACT, with or without cause, by giving at least Fifteen
    (15) notice to that effect. Provided, that such pre-termination shall be effective only upon issuance of the appropriate
    clearance in favor of the said EMPLOYEE.
    6.5 Either of the parties may terminate this Contract by reason of the breach or violation of the terms and conditions
    hereof by giving at least Fifteen (15) days written notice. Termination with cause under this paragraph shall be effective
    without need of judicial action or approval.4
    During their employment as formatters, petitioners were assigned to handle jobs for various clients of INNODATA, among
    which were CAS, Retro, Meridian, Adobe, Netlib, PSM, and Earthweb. Once they finished the job for one client, they were
    immediately assigned to do a new job for another client.
    On 16 February 2000, the HRAD Manager of INNODATA wrote petitioners informing them of their last day of work. The
    letter reads:
    RE: End of Contract
    Date: February 16, 2000
    Please be informed that your employment ceases effective at the end of the close of business hours on February 16,
    2000.5
    According to INNODATA, petitioners employment already ceased due to the end of their contract.
    On 22 May 2000, petitioners filed a Complaint 6 for illegal dismissal and damages against respondents. Petitioners claimed
    that they should be considered regular employees since their positions as formatters were necessary and desirable to the
    usual business of INNODATA as an encoding, conversion and data processing company. Petitioners also averred that the
    decisions in Villanueva v. National Labor Relations Commission7 and Servidad v. National Labor Relations Commission,8 in
    which the Court already purportedly ruled "that the nature of employment at Innodata Phils., Inc. is regular," 9 constituted
    stare decisis to the present case. Petitioners finally argued that they could not be considered project employees
    considering that their employment was not coterminous with any project or undertaking, the termination of which was
    predetermined.
    On the other hand, respondents explained that INNODATA was engaged in the business of data processing, typesetting,
    indexing, and abstracting for its foreign clients. The bulk of the work was data processing, which involved data encoding.
    Data encoding, or the typing of data into the computer, included pre-encoding, encoding 1 and 2, editing, proofreading,
    and scanning. Almost half of the employees of INNODATA did data encoding work, while the other half monitored quality
    control. Due to the wide range of services rendered to its clients, INNODATA was constrained to hire new employees for a
    fixed period of not more than one year. Respondents asserted that petitioners were not illegally dismissed, for their
    employment was terminated due to the expiration of their terms of employment. Petitioners contracts of employment
    with INNODATA were for a limited period only, commencing on 6 September 1999 and ending on 16 February
    2000.10 Respondents further argued that petitioners were estopped from asserting a position contrary to the contracts
    which they had knowingly, voluntarily, and willfully agreed to or entered into. There being no illegal dismissal,
    respondents likewise maintained that petitioners were not entitled to reinstatement and backwages.
    On 17 October 2000, the Labor Arbiter11 issued its Decision12 finding petitioners complaint for illegal dismissal and
    damages meritorious. The Labor Arbiter held that as formatters, petitioners occupied jobs that were necessary, desirable,
    and indispensable to the data processing and encoding business of INNODATA. By the very nature of their work as
    formatters, petitioners should be considered regular employees of INNODATA, who were entitled to security of tenure.
    Thus, their termination for no just or authorized cause was illegal. In the end, the Labor Arbiter decreed:
    FOREGOING PREMISES CONSIDERED, judgment is hereby rendered declaring complainants dismissal illegal and ordering
    respondent INNODATA PHILS. INC./INNODATA CORPORATION to reinstate them to their former or equivalent position
    without loss of seniority rights and benefits. Respondent company is further ordered to pay complainants their full
    backwages plus ten percent (10%) of the totality thereof as attorneys fees. The monetary awards due the complainants
    as of the date of this decision are as follows:
    A. Backwages
    1. Cherry J. Price
    2/17/2000 10/17/2000 at 223.50/day
    P5,811.00/mo/ x 8 mos. P46,488.00
    2. Stephanie Domingo 46,488.00
    (same computation)
    3. Lolita Arbilera 46,488.00
    (same computation)
    Total Backwages P139,464.00
    B. Attorneys fees (10% of total award) 13,946.40
    Total Award P153,410.40
    Respondent INNODATA appealed the Labor Arbiters Decision to the NLRC. The NLRC, in its Decision dated 14 December
    2001, reversed the Labor Arbiters Decision dated 17 October 2000, and absolved INNODATA of the charge of illegal
    dismissal.
    The NLRC found that petitioners were not regular employees, but were fixed-term employees as stipulated in their
    respective contracts of employment. The NLRC applied Brent School, Inc. v. Zamora13 and St. Theresas School of
    Novaliches Foundation v. National Labor Relations Commission, 14 in which this Court upheld the validity of fixed-term
    contracts. The determining factor of such contracts is not the duty of the employee but the day certain agreed upon by
    the parties for the commencement and termination of the employment relationship. The NLRC observed that the
    petitioners freely and voluntarily entered into the fixed-term employment contracts with INNODATA. Hence, INNODATA
    was not guilty of illegal dismissal when it terminated petitioners employment upon the expiration of their contracts on 16
    February 2000.
    The dispositive portion of the NLRC Decision thus reads:
    WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and SET ASIDE and a new one
    entered DISMISSING the instant complaint for lack of merit.15
    The NLRC denied petitioners Motion for Reconsideration in a Resolution dated 28 June 2002. 16
    In a Petition for Certiorari under Rule 65 of the Rules of Court filed before the Court of Appeals, petitioners prayed for the
    annulment, reversal, modification, or setting aside of the Decision dated 14 December 2001 and Resolution dated 28 June
    2002 of the NLRC.lawphil.net
    On 25 September 2006, the Court of Appeals promulgated its Decision sustaining the ruling of the NLRC that petitioners
    were not illegally dismissed.
    The Court of Appeals ratiocinated that although this Court declared in Villanueva and Servidad that the employees of
    INNODATA working as data encoders and abstractors were regular, and not contractual, petitioners admitted entering
    into contracts of employment with INNODATA for a term of only one year and for a project called Earthweb. According to
    the Court of Appeals, there was no showing that petitioners entered into the fixed-term contracts unknowingly and
    involuntarily, or because INNODATA applied force, duress or improper pressure on them. The appellate court also
    observed that INNODATA and petitioners dealt with each other on more or less equal terms, with no moral dominance
    exercised by the former on latter. Petitioners were therefore bound by the stipulations in their contracts terminating their
    employment after the lapse of the fixed term.
    The Court of Appeals further expounded that in fixed-term contracts, the stipulated period of employment is governing
    and not the nature thereof. Consequently, even though petitioners were performing functions that are necessary or
    desirable in the usual business or trade of the employer, petitioners did not become regular employees because their
    employment was for a fixed term, which began on 16 February 1999 and was predetermined to end on 16 February
    2000.
    The appellate court concluded that the periods in petitioners contracts of employment were not imposed to preclude
    petitioners from acquiring security of tenure; and, applying the ruling of this Court in Brent, declared that petitioners
    fixed-term employment contracts were valid. INNODATA did not commit illegal dismissal for terminating petitioners
    employment upon the expiration of their contracts.
    The Court of Appeals adjudged:
    WHEREFORE, the instant petition is hereby DENIED and the Resolution dated December 14, 2001 of the National Labor
    Relations Commission declaring petitioners were not illegally dismissed is AFFIRMED. 17
    The petitioners filed a Motion for Reconsideration of the afore-mentioned Decision of the Court of Appeals, which was
    denied by the same court in a Resolution dated 15 June 2007.
    Petitioners are now before this Court via the present Petition for Review on Certiorari, based on the following assignment
    of errors:
    I.
    THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW AND GRAVE ABUSE OF
    DISCRETION WHEN IT DID NOT APPLY THE SUPREME COURT RULING IN THE CASE OF NATIVIDAD & QUEJADA
    THAT THE NATURE OF EMPLOYMENT OF RESPONDENTS IS REGULAR NOT FIXED, AND AS SO RULED IN AT
    LEAST TWO OTHER CASES AGAINST INNODATA PHILS. INC.
    II.
    THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN RULING THAT THE
    STIPULATION OF CONTRACT IS GOVERNING AND NOT THE NATURE OF EMPLOYMENT AS DEFINED BY LAW.
    III.
    THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
    JURISDICTION WHEN IT DID NOT CONSIDER THE EVIDENCE ON RECORD SHOWING THAT THERE IS CLEAR
    CIRCUMVENTION OF THE LAW ON SECURITY OF TENURE THROUGH CONTRACT MANIPULATION.18
    The issue of whether petitioners were illegally dismissed by respondents is ultimately dependent on the question of
    whether petitioners were hired by INNODATA under valid fixed-term employment contracts.
    After a painstaking review of the arguments and evidences of the parties, the Court finds merit in the present Petition.
    There were no valid fixed-term contracts and petitioners were regular employees of the INNODATA who could not be
    dismissed except for just or authorized cause.
    The employment status of a person is defined and prescribed by law and not by what the parties say it should
    be.19 Equally important to consider is that a contract of employment is impressed with public interest such that labor
    contracts must yield to the common good. 20 Thus, provisions of applicable statutes are deemed written into the contract,
    and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and
    regulations by simply contracting with each other. 21
    Regular employment has been defined by Article 280 of the Labor Code, as amended, which reads:
    Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and
    regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
    been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
    employer, except where the employment has been fixed for a specific project or undertaking the completion or
    termination of which has been determined at the time of engagement of the employee or where the work or services to
    be performed is seasonal in nature and employment is for the duration of the season.
    An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, That, any
    employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
    considered a regular employee with respect to the activity in which he is employed and his employment shall continue
    while such activity exists. (Underscoring ours).
    Based on the afore-quoted provision, the following employees are accorded regular status: (1) those who are engaged to
    perform activities which are necessary or desirable in the usual business or trade of the employer, regardless of the
    length of their employment; and (2) those who were initially hired as casual employees, but have rendered at least one
    year of service, whether continuous or broken, with respect to the activity in which they are employed.
    Undoubtedly, petitioners belong to the first type of regular employees.
    Under Article 280 of the Labor Code, the applicable test to determine whether an employment should be considered
    regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation
    to the usual business or trade of the employer.22
    In the case at bar, petitioners were employed by INNODATA on 17 February 1999 as formatters. The primary business of
    INNODATA is data encoding, and the formatting of the data entered into the computers is an essential part of the process
    of data encoding. Formatting organizes the data encoded, making it easier to understand for the clients and/or the
    intended end users thereof. Undeniably, the work performed by petitioners was necessary or desirable in the business or
    trade of INNODATA.
    However, it is also true that while certain forms of employment require the performance of usual or desirable functions
    and exceed one year, these do not necessarily result in regular employment under Article 280 of the Labor Code. 23 Under
    the Civil Code, fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by
    nature seasonal or for specific projects with predetermined dates of completion; they also include those to which the
    parties by free choice have assigned a specific date of termination.24
    The decisive determinant in term employment is the day certain agreed upon by the parties for the commencement and
    termination of their employment relationship, a day certain being understood to be that which must necessarily come,
    although it may not be known when. Seasonal employment and employment for a particular project are instances of
    employment in which a period, where not expressly set down, is necessarily implied.25
    Respondents maintain that the contracts of employment entered into by petitioners with INNDOATA were valid fixed-term
    employment contracts which were automatically terminated at the expiry of the period stipulated therein, i.e., 16
    February 2000.
    The Court disagrees.
    While this Court has recognized the validity of fixed-term employment contracts, it has consistently held that this is the
    exception rather than the general rule. More importantly, a fixed-term employment is valid only under certain
    circumstances. In Brent, the very same case invoked by respondents, the Court identified several circumstances wherein
    a fixed-term is an essential and natural appurtenance, to wit:
    Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific
    projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to
    which, whatever the nature of the engagement, the concept of regular employment with all that it implies does not
    appear ever to have been applied, Article 280 of the Labor Code notwithstanding; also appointments to the positions of
    dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by
    practice or tradition rotated among the faculty members, and where fixed terms are a necessity without which no
    reasonable rotation would be possible. Similarly, despite the provisions of Article 280, Policy Instructions No. 8 of the
    Minister of Labor implicitly recognize that certain company officials may be elected for what would amount to fixed
    periods, at the expiration of which they would have to stand down, in providing that these officials, "x x may lose their
    jobs as president, executive vice-president or vice president, etc. because the stockholders or the board of directors for
    one reason or another did not reelect them."26
    As a matter of fact, the Court, in its oft-quoted decision in Brent, also issued a stern admonition that where, from the
    circumstances, it is apparent that the period was imposed to preclude the acquisition of tenurial security by the employee,
    then it should be struck down as being contrary to law, morals, good customs, public order and public policy. 27
    After considering petitioners contracts in their entirety, as well as the circumstances surrounding petitioners employment
    at INNODATA, the Court is convinced that the terms fixed therein were meant only to circumvent petitioners right to
    security of tenure and are, therefore, invalid.
    The contracts of employment submitted by respondents are highly suspect for not only being ambiguous, but also for
    appearing to be tampered with.
    Petitioners alleged that their employment contracts with INNODATA became effective 16 February 1999, and the first day
    they reported for work was on 17 February 1999. The Certificate of Employment issued by the HRAD Manager of
    INNODATA also indicated that petitioners Price and Domingo were employed by INNODATA on 17 February 1999.
    However, respondents asserted before the Labor Arbiter that petitioners employment contracts were effective only on 6
    September 1999. They later on admitted in their Memorandum filed with this Court that petitioners were originally hired
    on 16 February 1999 but the project for which they were employed was completed before the expiration of one year.
    Petitioners were merely rehired on 6 September 1999 for a new project. While respondents submitted employment
    contracts with 6 September 1999 as beginning date of effectivity, it is obvious that in one of them, the original beginning
    date of effectivity, 16 February 1999, was merely crossed out and replaced with 6 September 1999. The copies of the
    employment contracts submitted by petitioners bore similar alterations.
    The Court notes that the attempt to change the beginning date of effectivity of petitioners contracts was very crudely
    done. The alterations are very obvious, and they have not been initialed by the petitioners to indicate their assent to the
    same. If the contracts were truly fixed-term contracts, then a change in the term or period agreed upon is material and
    would already constitute a novation of the original contract.
    Such modification and denial by respondents as to the real beginning date of petitioners employment contracts render
    the said contracts ambiguous. The contracts themselves state that they would be effective until 16 February 2000 for a
    period of one year. If the contracts took effect only on 6 September 1999, then its period of effectivity would obviously be
    less than one year, or for a period of only about five months.
    Obviously, respondents wanted to make it appear that petitioners worked for INNODATA for a period of less than one
    year. The only reason the Court can discern from such a move on respondents part is so that they can preclude
    petitioners from acquiring regular status based on their employment for one year. Nonetheless, the Court emphasizes
    that it has already found that petitioners should be considered regular employees of INNODATA by the nature of the work
    they performed as formatters, which was necessary in the business or trade of INNODATA. Hence, the total period of
    their employment becomes irrelevant.
    Even assuming that petitioners length of employment is material, given respondents muddled assertions, this Court
    adheres to its pronouncement in Villanueva v. National Labor Relations Commission, 28 to the effect that where a contract
    of employment, being a contract of adhesion, is ambiguous, any ambiguity therein should be construed strictly against
    the party who prepared it. The Court is, thus, compelled to conclude that petitioners contracts of employment became
    effective on 16 February 1999, and that they were already working continuously for INNODATA for a year.
    Further attempting to exonerate itself from any liability for illegal dismissal, INNODATA contends that petitioners were
    project employees whose employment ceased at the end of a specific project or undertaking. This contention is specious
    and devoid of merit.
    In Philex Mining Corp. v. National Labor Relations Commission, 29 the Court defined "project employees" as those workers
    hired (1) for a specific project or undertaking, and wherein (2) the completion or termination of such project has been
    determined at the time of the engagement of the employee.
    Scrutinizing petitioners employment contracts with INNODATA, however, failed to reveal any mention therein of what
    specific project or undertaking petitioners were hired for. Although the contracts made general references to a "project,"
    such project was neither named nor described at all therein. The conclusion by the Court of Appeals that petitioners were
    hired for the Earthweb project is not supported by any evidence on record. The one-year period for which petitioners
    were hired was simply fixed in the employment contracts without reference or connection to the period required for the
    completion of a project. More importantly, there is also a dearth of evidence that such project or undertaking had already
    been completed or terminated to justify the dismissal of petitioners. In fact, petitioners alleged - and respondents failed
    to dispute that petitioners did not work on just one project, but continuously worked for a series of projects for various
    clients of INNODATA.
    In Magcalas v. National Labor Relations Commission,30 the Court struck down a similar claim by the employer therein that
    the dismissed employees were fixed-term and project employees. The Court here reiterates the rule that all doubts,
    uncertainties, ambiguities and insufficiencies should be resolved in favor of labor. It is a well-entrenched doctrine that in
    illegal dismissal cases, the employer has the burden of proof. This burden was not discharged in the present case.
    As a final observation, the Court also takes note of several other provisions in petitioners employment contracts that
    display utter disregard for their security of tenure. Despite fixing a period or term of employment, i.e., one year,
    INNODATA reserved the right to pre-terminate petitioners employment under the following circumstances:
    6.1 x x x Further should the Company have no more need for the EMPLOYEEs services on account of completion of the
    project, lack of work (sic) business losses, introduction of new production processes and techniques, which will negate
    the need for personnel, and/or overstaffing, this contract maybe pre-terminated by the EMPLOYER upon giving of three
    (3) days notice to the employee.
    xxxx
    6.4 The EMPLOYEE or the EMPLOYER may pre-terminate this CONTRACT, with or without cause, by giving at least Fifteen
    (15) [day] notice to that effect. Provided, that such pre-termination shall be effective only upon issuance of the
    appropriate clearance in favor of the said EMPLOYEE. (Emphasis ours.)
    Pursuant to the afore-quoted provisions, petitioners have no right at all to expect security of tenure, even for the
    supposedly one-year period of employment provided in their contracts, because they can still be pre-terminated (1) upon
    the completion of an unspecified project; or (2) with or without cause, for as long as they are given a three-day notice.
    Such contract provisions are repugnant to the basic tenet in labor law that no employee may be terminated except for
    just or authorized cause.
    Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of security of tenure
    and free them from the bondage of uncertainty of tenure woven by some employers into their contracts of employment.
    This was exactly the purpose of the legislators in drafting Article 280 of the Labor Code to prevent the circumvention by
    unscrupulous employers of the employees right to be secure in his tenure by indiscriminately and completely ruling out
    all written and oral agreements inconsistent with the concept of regular employment.
    In all, respondents insistence that it can legally dismiss petitioners on the ground that their term of employment has
    expired is untenable. To reiterate, petitioners, being regular employees of INNODATA, are entitled to security of tenure.
    In the words of Article 279 of the Labor Code:
    ART. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an
    employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall
    be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
    allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was
    withheld from him up to the time of his actual reinstatement.
    By virtue of the foregoing, an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and
    other privileges, with full back wages computed from the time of dismissal up to the time of actual reinstatement.
    Considering that reinstatement is no longer possible on the ground that INNODATA had ceased its operations in June
    2002 due to business losses, the proper award is separation pay equivalent to one month pay 31 for every year of service,
    to be computed from the commencement of their employment up to the closure of INNODATA.
    The amount of back wages awarded to petitioners must be computed from the time petitioners were illegally dismissed
    until the time INNODATA ceased its operations in June 2002. 32
    Petitioners are further entitled to attorneys fees equivalent to 10% of the total monetary award herein, for having been
    forced to litigate and incur expenses to protect their rights and interests herein.
    Finally, unless they have exceeded their authority, corporate officers are, as a general rule, not personally liable for their
    official acts, because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders
    and members. Although as an exception, corporate directors and officers are solidarily held liable with the corporation,
    where terminations of employment are done with malice or in bad faith, 33 in the absence of evidence that they acted with
    malice or bad faith herein, the Court exempts the individual respondents, Leo Rabang and Jane Navarette, from any
    personal liability for the illegal dismissal of petitioners.
    WHEREFORE, the Petition for Review on Certiorari is GRANTED. The Decision dated 25 September 2006 and Resolution
    dated 15 June 2007 of the Court of Appeals in CA-G.R. SP No. 72795are hereby REVERSED and SET ASIDE.
    RespondentInnodata Philippines, Inc./Innodata Corporation is ORDERED to pay petitioners Cherry J. Price, Stephanie G.
    Domingo, and Lolita Arbilera: (a) separation pay, in lieu of reinstatement, equivalent to one month pay for every year of
    service, to be computed from the commencement of their employment up to the date respondent Innodata Philippines,
    Inc./Innodata Corporation ceased operations; (b) full backwages, computed from the time petitioners compensation was
    withheld from them up to the time respondent Innodata Philippines, Inc./Innodata Corporation ceased operations; and
    (3) 10% of the total monetary award as attorneys fees. Costs against respondent Innodata Philippines, Inc./Innodata
    Corporation.
    SO ORDERED.
    FIRST DIVISION
    [G.R. No. 103525. March 29, 1996]
    MARCOPPER MINING CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
    NATIONAL MINES AND ALLIED WORKERS UNION (NAMAWU-MIF), respondents.
    DECISION
    KAPUNAN, J.:
    Social justice and full protection to labor guaranteed by the fundamental law of this land is not some romantic
    notion, high in rhetoric but low in substance. The case at bench provides yet another example of harmonizing and
    balancing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns
    on investments, and to expansion and growth.[1]
    In this petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court, Marcopper Mining
    Corporation impugns the decision rendered by the National Labor Relations Commission (NLRC) on 18 November 1991 in
    RAB-IV-12-2588-88 dismissing petitioners appeal, and the resolution issued by the said tribunal dated 20 December
    1991 denying petitioners motion for reconsideration.
    There is no disagreement as to the following facts:
    On 23 August 1984, Marcopper Mining Corporation, a corporation duly organized and existing under the laws of the
    Philippines, engaged in the business of mineral prospecting, exploration and extraction, and private respondent
    NAMAWU-MIF, a labor federation duly organized and registered with the Department of Labor and Employment (DOLE),
    to which the Marcopper Employees Union (the exclusive bargaining agent of all rank-and-file workers of petitioner) is
    affiliated, entered into a Collective Bargaining Agreement (CBA) effective from 1 May 1984 until 30 April 1987.
    Sec. 1, Art. V of the said Collective Bargaining Agreement provides:
    Section 1. The COMPANY agrees to grant general wage increase to all employees within the bargaining unit as follows:
    Effectivity Increase per day on
    the Basic Wage
    May 1,1985 5%
    May 1,1986 5%
    It is expressly understood that this wage increase shall be exclusive of any increase in the minimum wage and/or
    mandatory living allowance that may be promulgated during the life of this Agreement. [2]
    Prior to the expiration of the aforestated Agreement, on 25 July 1986, petitioner and private respondent executed a
    Memorandum of Agreement (MOA) wherein the terms of the CBA, specifically on matters of wage increase and facilities
    allowance, were modified as follows:
    1. The COMPANY hereby grants a wage increase of 10% of the basic rate to all employees and workers within the
    bargaining units (sic) as follows:
    (a) 5% effective May 1,1986.
    This will mean that the members of the bargaining unit will get an effective increase of 10% from May 1, 1986.
    (b) 5% effective May 1,1987.
    2. The COMPANY hereby grants an increase of the facilities allowance from P50.00 to P100.00 per month effective May 1,
    1986.[3]
    In compliance with the amended CBA, petitioner implemented the initial 5% wage increase due on 1 May 1986.[4]
    On 1 June 1987, Executive Order (E.O.) No. 178 was promulgated mandating the integration of the cost of living
    allowance under Wage Orders Nos. 1, 2, 3, 5 and 6 into the basic wage of workers, its effectivity retroactive to 1 May
    1987.[5] Consequently, effective on 1 May 1987, the basic wage rate of petitioners laborers categorized as non-agricultural
    workers was increased by P9.00 per day.[6]
    Petitioner implemented the second five percent (5%) wage increase due on 1 May 1987 and thereafter added the
    integrated COLA.[7]
    Private respondent, however, assailed the manner in which the second wage increase was effected. It argued that
    the COLA should first be integrated into the basic wage before the 5% wage increase is computed.[8]
    Consequently, on 15 December 1988, the union filed a complaint for underpayment of wages before the Regional
    Arbitration Branch IV, Quezon City.
    On 24 July 1989, the Labor Arbiter promulgated a decision in favor of the union. The dispositive part reads, thus:
    WHEREFORE, consistent with the tenor hereof, judgment is rendered directing respondent company to pay the wage
    differentials due its rank-and-file workers retroactive to 1 May 1987.
    SO ORDERED.[9]
    The Labor Arbiter ruled in this wise:
    First and foremost, the written instrument and the intention of the parties must be brought to the fore. And talking of
    intention, we conjure to sharp focus the provision embossed in Section 1, Article V of the collective agreement, viz:
    xxx xxx xxx.
    It is expressly understood that this wage increase shall be exclusive of increase in the minimum wage and/or mandatory
    living allowance that may be promulgated during the life of this Agreement . (Italics ours.)
    The foregoing phrase albeit innocuously framed offers the cue. This ushers us to the inner sanctum of what really was
    the intention of the parties to the contract. Treading along its lines, it becomes readily discernible that this portion of the
    contract is the stop-lock gate or known in its technical term as the non-chargeability clause. There can be no quibbling
    that on the strength of this provision, the wage/allowance granted under this accord cannot be credited to similar form of
    benefit that may be thereafter ordained by the government through legislation. That the parties therefore were
    consciously aware at the time of the conclusion of the agreement of the never-ending rise in the cost of living is a logical
    corollary. And while this upward trend may not be a welcome phenomenon, there was the intention to yield and comply
    in the event of an imposition. Of course, there cannot likewise be any rivalry that if the Executive Order were to retroact
    to 2 May 1987 or a day after the last contractual increase, this question will not arise. It is in this sense of fairness that
    we cannot allow this one (1) day to be an insulating medium to deny the workers the benediction endowed by Executive
    Order No. 178.[10]
    Petitioner appealed the Labor Arbiters decision and on 18 November 1991 the NLRC rendered its decision sustaining the
    Labor Arbiters ruling. The dispositive portion states:
    WHEREFORE, in view of the foregoing, the Decision of the Labor Arbiter is hereby AFFIRMED and the appeal filed is
    hereby DISMISSED for lack of merit.
    SO ORDERED.[11]
    The NLRC declared:
    x x x Increments to the laborers financial gratification, be they in the form of salary increases or changes in the salary
    scale are aimed at one thing -improvement of the economic predicament of the laborers. As such, they should be viewed
    in the light of the States avowed policy to protect labor. Thus, having entered into an agreement with its employees, an
    employer may not be allowed to renege on its obligation under a collective bargaining agreement should, at the same
    time, the law grants the employees the same or better terms and conditions of employment. Employee benefits derived
    from law are exclusive of benefits arrived at through negotiation and agreement unless otherwise provided by the
    agreement itself or by law. (Meycauayan College v. Hon. Franklin N. Drilon, 185 SCRA 50).[12]
    Petitioners motion for reconsideration was denied by the NLRC in its resolution dated 20 December 1991.
    In the present petition, Marcopper challenges the NLRC decision on the following grounds:
    I
    PUBLIC RESPONDENT NLRC ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE DECISION OF LABOR
    ARBITER JOAQUIN TANODRA DIRECTING MARCOPPER TO PAY WAGE DIFFERENTIALS DUE ITS RANK-AND-FILE
    EMPLOYEES RETROACTIVE TO 1 MAY 1987 CONSIDERING THAT SANS EO 178, THE FUNDAMENTAL MEANING OF THE
    BASIC WAGE IS CLEARLY DIFFERENT FROM, AND DOES NOT INCLUDE THE COLA AT THE TIME THE CBA WAS ENTERED
    INTO. THUS, PUBLIC RESPONDENTS READING OF THE CBA, AS AMENDED BY THE MEMORANDUM OF AGREEMENT
    DATED 25 JULY 1986, ULTIMATELY DISREGARDED THE ORDINARY MEANING OF THE PHRASE BASIC WAGE,
    OTHERWISE INTENDED BY THE PARTIES DURING THE TIME THE CBA WAS EXECUTED.
    II
    THE LABOR ARBITER AND PUBLIC RESPONDENT NLRCS RELIANCE ON THE LAST PARAGRAPH OF SECTION 1, ARTICLE
    V OF THE CBA WHICH STATES: IT IS EXPRESSLY UNDERSTOOD THAT THIS WAGE INCREASE SHALL BE EXCLUSIVE OF
    ANY INCREASE IN THE MINIMUM WAGE AND/OR MANDATORY LIVING ALLOWANCE THAT MAY BE PROMULGATED
    DURING THE LIFE OF THIS AGREEMENT IS MISPLACED AND WITHOUT BASIS BECAUSE SAID PROVISION HARDLY
    OFFERS A HINT AS TO WHAT BASIC WAGE THE PARTIES HAD IN MIND AT THE TIME THEY EXECUTED THE CBA AS
    AMENDED BY THE MEMORANDUM OF AGREEMENT.
    III
    PETITIONER COMPUTED THE 5% WAGE INCREASE BASED ON THE UNINTEGRATED BASIC WAGE IN ACCORDANCE
    WITH THE INTENT AND TERMS OF THE CBA, AS AMENDED BY THE MEMORANDUM OF AGREEMENT. THIS WAS IN FULL
    ACCORD AND IN FAITHFUL COMPLIANCE WITH EO 178. HENCE, PETITIONER DID NOT COMMIT ANY UNDERPAYMENT.
    IV
    THE DOCTRINE OF LIBERAL INTERPRETATION IN FAVOR OF LABOR IN CASE OF DOUBT IS NOT APPLICABLE TO THE
    INSTANT CASE.[13]
    Stripped of the non-essentials, the question for our resolution is what should be the basis for the computation of the
    CBA increase, the basic wage without the COLA or the so-called integrated basic wage which, by mandate of E.O. No.
    178, includes the COLA.
    It is petitioners contention that the basic wage referred to in the CBA pertains to the unintegrated basic
    wage. Petitioner maintains that the rules on interpretation of contracts, particularly Art. 1371 of the New Civil Code which
    states that:
    Art. 1371. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be
    principally considered.
    should govern. Accordingly, applying the aforequoted provision in the case at bench, petitioner concludes that it was
    clearly not the intention of the parties (petitioner and private respondent) to include the COLA in computing the CBA/MOA
    mandated increase since the MOA was entered into a year before E.O. No. 178 was enacted even though their effectivity
    dates coincide. In other words, the situation contemporaneous to the execution of the amendatory MOA was that there
    was yet no law requiring the integration of the COLA into the basic wage. [14] Petitioner, therefore, cannot be compelled to
    undertake an obligation it never assumed or contemplated under the CBA or MOA.
    Siding with the petitioner, the Solicitor General opines that for the purpose of complying with the obligations
    imposed by the CBA, the integrated COLA should not be considered due to the exclusivity of the benefits under the said
    CBA and E.O. No. 178. He explains thus:
    A collective bargaining agreement is a contractual obligation. It is distinct from an obligation imposed by law. The terms
    and conditions of a CBA constitute the law between the parties. Thus, employee benefits derived from either the law or a
    contract should be treated as distinct and separate from each other. (Meycauayan College vs. Drilon, supra.)
    xxx xxx xxx.
    Very clearly, the CBA and E.O. 178 provided for the exclusiveness of the benefits to be given or awarded to the
    employees of petitioner. Thus, when petitioner computed the 5% wage increase based on the unintegrated basic wage, it
    complied with its contractual obligations under the CBA. When it thereafter integrated the COLA into the basic wage, it
    complied also with the mandate of E.O. 178. Petitioner, therefore, complied with its contractual obligations in the CBA as
    well as with the legal mandate of the law. Consequently, petitioner is not guilty of underpayment.
    To follow the theory of private respondent, that is - to integrate first the COLA into the basic wage and thereafter
    compute the 5% wage increase therefrom, would violate the exclusiveness of the benefits granted under the CBA and
    under E.O. 178.[15]
    Private respondent counters by asserting that the purpose, nature and essence of CBA negotiation is to obtain wage
    increases and benefits over and above what the law provides and that the principle of non-diminution of benefits should
    prevail.
    The NLRC, which filed its own comment, likewise, made the following assertions:
    x x x However, to state outright that the parties intended the basic wage to remain invariable even after the advent of EO
    178 is unfounded and presumptuous a claim as such inevitably works to the utmost disadvantage of the workers and runs
    counter to the constitutional guarantee of affording protection to labor. Evidently, the rationale for the integration of the
    COLA with the basic wage was primarily to increase the base wage for purposes of computation of such items as overtime
    and premium pay, fringe benefits, etc. To adopt the statement and claim of the petitioner would then redound to
    depriving the workers of the full benefits the law intended for them, which in the final analysis was solely for the purpose
    of alleviating their plight due to the continuous undue hardship they suffer caused by the ever escalating prices of prime
    commodities.[16]
    We rule for the respondents.
    The principle that the CBA is the law between the contracting parties stands strong and true. [17] However, the
    present controversy involves not merely an interpretation of CBA provisions. More importantly, it requires a determination
    of the effect of an executive order on the terms and the conditions of the CBA. This is, and should be, the focus of the
    instant case.
    It is unnecessary to delve too much on the intention of the parties as to what they allegedly meant by the term basic
    wage at the time the CBA and MOA were executed because there is no question that as of 1 May 1987, as mandated by
    E.O. No. 178, the basic wage of workers, or the statutory minimum wage, was increased with the integration of the
    COLA. As of said date, then, the term basic wage includes the COLA. This is what the law ordains and to which the
    collective bargaining agreement of the parties must conform.
    Petitioners arguments eventually lose steam in the light of the fact that compliance with the law is mandatory and
    beyond contractual stipulation by and between the parties; consequently, whether or not petitioner intended the basic
    wage to include the COLA becomes immaterial. There is evidently nothing to construe and interpret because the law is
    clear and unambiguous. Unfortunately for petitioner, said law, by some uncanny coincidence, retroactively took effect on
    the same date the CBA increase became effective. Therefore, there cannot be any doubt that the computation of the CBA
    increase on the basis of the integrated wage does not constitute a violation of the CBA.
    Petitioners contention that under the Rules Implementing E.O. No. 178, the definition of the term -basic wage has
    remained unchanged is off the mark since said definition expressly allows integration of monetary benefits into the
    regular pay of employees:
    Chapter 1. Definition of Terms and Coverage.
    Section 1. Definition of Terms.
    xxx xxx xxx.
    (j) Basic Wage means all regular remuneration or earnings paid by an employer for services rendered on normal working
    days and hours but does not include cost-of- living allowances, profit-sharing payments, premium payments, 13th month
    pay, and other monetary benefits which are not considered as part of or integrated into the regular salary of the
    employee on the date the Order became effective. (Italics ours.)
    What E.O. No. 178 did was exactly to integrate the COLA under Wage Orders Nos. 1, 2, 3, 5 and 6 into the basic pay
    so as to increase the statutory daily minimum wage. Section 2 of the Rules is quite explicit:
    Section 2. Amount to be Integrated. - Effective on the dates specified, as a result of the integration, the basic wage rate
    of covered workers shall be increased by the following amounts: (Italics ours.)
    xxx xxx xxx.
    Integration of monetary benefits into the basic pay of workers is not a new method of increasing the minimum
    wage.[18] But even so, we are still guided by our ruling in Davao Integrated Port Stevedoring Services v.
    Abarquez,[19] which we herein reiterate:
    While the terms and conditions of the CBA constitute the law between the parties, it is not, however, an ordinary
    contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the
    contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is
    not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it
    must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic
    construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to
    serve.
    Finally, petitioner misinterprets the declaration of the Labor Arbiter in the assailed decision that when the pendulum
    of judgment swings to and fro and the forces are equal on both sides, the same must be stilled in favor of labor. While
    petitioner acknowledges that all doubts in the interpretation of the Labor Code shall be resolved in favor of labor,[20] it
    insists that what is involved-here is the amended CBA which is essentially a contract between private persons. What
    petitioner has lost sight of is the avowed policy of the State, enshrined in our Constitution, to accord utmost protection
    and justice to labor, a policy, we are, likewise, sworn to uphold.
    In Philippine Telegraph & Telephone Corporation v. NLRC,[21] we categorically stated that:
    When conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence of
    the latter should be counter-balanced by sympathy and compassion the law must accord the underprivileged worker.
    Likewise, in Terminal Facilities and Services Corporation v. NLRC,[22] we declared:
    Any doubt concerning the rights of labor should be resolved in its favor pursuant to the social justice policy.
    The purpose of E.O. No. 178 is to improve the lot of the workers covered by the said statute. We are bound to
    ensure its fruition.
    WHEREFORE, premises considered, the petition is hereby DISMISSED.
    SO ORDERED.

    SECOND DIVISION
    [G.R. No. 158232. March 31, 2005]
    FUJITSU COMPUTER PRODUCTS CORPORATION OF THE PHILIPPINES and ERNESTO
    ESPINOSA, petitioners, vs. THE HONORABLE COURT OF APPEALS, VICTOR DE GUZMAN and
    ANTHONY P. ALVAREZ, respondents.
    DECISION
    CALLEJO, SR., J.:
    This is a petition for review under Rule 45 of the Rules of court assailing the Decision [1] of the Court of Appeals in
    CA-G.R. SP No. 71324 reversing the decision of the National Labor Relations Commission (NLRC) in NLRC NCR CA NO.
    024541-00 dismissing respondents Victor De Guzman and Anthony P. Alvarez from employment, and the Resolution dated
    May 14, 2003 denying the motion for reconsideration thereof.
    The Facts of the Case
    Petitioner Fujitsu Computer Products Corporation of the Philippines (FCPP) is a corporation organized and existing
    under Philippine laws with business address at the Special Export Processing Zone, Carmelray, Canlubang, Calamba,
    Laguna. It is engaged in the manufacture of hard disc drives, MR heads and other computer storage devices for export. [2]
    Respondent Victor de Guzman began working for FCPP on September 21, 1997 as Facilities Section Manager. As of
    1999, he was also holding in a concurrent capacity the position of Coordinator ISO 14000 Secretariat and was receiving a
    monthly salary of P43,100.00[3]
    Respondent Allan Alvarez, on the other hand, was employed as a Senior Engineer on April 21, 1998. He was
    assigned at the Facilities Department under the supervision of respondent De Guzman, and was then earning
    P16,800.00.[4]
    The garbage and scrap materials of FCPP were collected and bought by the Saros Trucking Services and Enterprises
    (Saros). On January 15, 1999, respondent De Guzman as Facilities Section Manager, for and in behalf of FCPP, signed a
    Garbage Collection Agreement[5] with Saros, and the latters signatory therein was its owner and general manager, Larry
    Manaig.
    Sometime in the third week of July 1999, petitioner Ernesto Espinosa, HRD and General Affairs Director of FCPP,
    received a disturbing report from Manaig. Manaig reported that respondent De Guzman had caused the anomalous
    disposal of steel [purlins][6] owned by FCPP.[7] Two of Manaigs employees, Roberto Pumarez[8] and Ma. Theresa S.
    Felipe,[9] executed written statements detailing how respondent De Guzman had ordered the steel purlins to be brought
    out.
    Thereafter, petitioner Espinosa sent a two-page Inter-Office Memorandum dated July 24, 1999 to respondent De
    Guzman, effectively placing him under preventive suspension. He was likewise directed to submit his written explanation
    on the charges against him. The Memorandum is worded as follows:
    This refers to the report we have received from Mr. Larry Manaig, owner of Saros Trucking Services, FCPPs garbage/scrap
    contractor.
    It was disclosed to us that sometime in the first week of July 1999, you personally approached Mr. Roberto Pumarez,
    Supervisor of Saros, and intimated to him your interest in the scrap metals which were taken from Building B which at
    present is undergoing renovation. You allegedly told him that since Saros is paying FCPP P2.50 per kilo of metal, you will
    buy it from Saros for P3.00 per kilo. Thereafter, on July 10, 1999, Mr. Adrian Camcaman, one of your staff in the Facilities
    Section, ordered Mr. [Pumarez] to send a truck to pick up the scrap metals which you had earlier pointed to Mr.
    [Pumarez]. These assorted metals were covered by Scrap/Garbage Gate Pass Receipt No. 3413.
    From these assorted metals, it was revealed to us that approximately 2,800 kgs. were delivered by Saros, per your
    instruction, to Sta. Rosa Baptist Church. After this, on July 12, 1999, the remaining scrap metals were again picked up by
    Saros. This time, the assorted metals were covered by Scrap/Garbage Pass NO. 3419. From these assorted [metals]
    1,230 kgs. were purposely excluded from the gross weight to be reported and paid to FCPP. Again, these excluded metals
    were delivered to the same Baptist Church, per your instruction. According to Mr. Manaig, despite several demands from
    you, you have not yet remitted to him the payment for those assorted scrap metals which you caused to be delivered to
    Sta. Rosa Baptist Church.
    In addition to the foregoing, it was likewise reported by Mr. Manaig that there were previous occasions in the past where
    you solicited from him empty drums, pails, and corrugated cartons, which were all part of those picked up from FCPP.
    Attached hereto are the statements given by the concerned employees of Saros.
    Clearly, your above actions constitute qualified theft, grave abuse of authority, and willful breach of trust and confidence.
    In view of the foregoing, you are hereby directed to submit your written explanation within forty-eight (48) hours from
    your receipt hereof why no disciplinary sanction should be imposed against you, including dismissal from the service.
    Should you fail to do so, as hereby directed, we shall be compelled to assess and evaluate your case based on available
    records. In the meantime, you are hereby placed under preventive suspension effective immediately, pending further
    investigation of your case.[10]
    Thereafter, Cesar Picardal, the Security Manager of FCPP, interviewed employees of SNK Philippines, Inc. (SNK), a
    building contractor then working in the premises of FCPP. Rolando P. Astillero, [11] Maurice Victoriano[12] and Nat
    Balayan[13] voluntarily executed handwritten statements on the matter.
    According to their respective accounts of what transpired on July 10, 1999, a 10-wheeler truck arrived at the
    company warehouse at around 1:00 p.m. Assorted scrap materials were then hauled into the truck, including steel
    purlins. Knowing that they could still be used as braces for hepa-filter box hangers, SNK Mechanical Supervisor Balayan
    asked his superior, Nobuaki Machidori, if the hauling could be stopped, to which the latter consented. Balayan
    approached the driver of the truck and told him not to include the steel purlins; the warehouse helpers then began
    separating the steel purlins from the other scrap materials to be hauled.
    Astillero had also requested the men to stop the hauling. SNK Engineer Victoriano had apparently told him that the
    steel purlins would still be used for construction. At around 2:00 p.m., respondent De Guzman called Victoriano and asked
    whether the scrap materials at the Fuji Electric Warehouse could already be collected by the scrap dealer. Victoriano
    assented, but requested that the existing c-purlins be dismantled and that 20 lengths would be used as additional bracket
    support for heap box/FCU installation.[14]
    Adrian Camcaman, an employee of the Facilities Department under respondent De Guzman, then arrived and
    informed Astillero that Victoriano had already given permission for the hauling to commence.[15] Camcaman also executed
    a written statement[16] regarding the matter.
    In his Explanation[17] dated July 26, 1999, respondent De Guzman alleged the following in his defense:
    Sometime in the first week of July 1999, I came to know from Rev. Mario de Torres, Pastor of St. Rosa Bible Baptist
    Church that they are in need of some steel [purlins] to be used by the church for its roof deck construction. I told him
    that I know a scrap dealer where he could possibly buy the said materials. I told him that Saros Trucking Services is the
    regular buyer of FCPPs scrap materials and they can buy from them. I referred the matter therefore to Mr. Roberto
    [Pumarez], Supervisor of Saros and told him of the intension of the Sta. Rosa Bible Baptist Church (SRBBC) to buy scrap
    metal. I further told him that since Saros is paying FCPP P2.60 of scrap metal, Sta. Rosa Bible Baptist Church can buy it
    from Saros at P3.00 per kilo a price higher than FCPP. The statement of Mr. [Pumarez] which says that I will buy it from
    Saros was not correct which I strongly object. Acknowledging that Mr. [Pumarez] is amenable to sell the scrap to Sta.
    Rosa Bible Baptist Church after consultation from his boss I advised the Pastor of Sta. Rosa Bible Baptist Church that
    Saros agreed. My part of the transaction ended there. Thereafter, as reported by my staff the scrap metals were
    delivered to the church by the Saros Trucking Services on July 10, 1999 covering the net weight of 2,860 kilos based on
    the submitted weighing scale ticket numbers 37830 and 37844 from ANGLO-WATSONS PHILS., INC., the weighing bridge
    company. These were covered by gate pass number 3413. On July 12, 1999, it was reported that the remaining scrap
    metals were again delivered to the Sta. Rosa Bible Baptist Church covered by gate pass number 3419 but the exact
    weight could not be determined yet pending the scale ticket submission. As of July 24, 1999 the weight scale ticket of the
    last delivery was not yet confirmed [or] submitted to FCPP.
    It is not true that Mr. Larry Manaig demanded to me several times the payment of the scrap because his secretary
    followed up to me only once and I told her that the church is still awaiting for the actual quantity and value of the metal
    scrap. When my staff Mr. Camcaman returned from his two weeks nightshift duty and reported for dayshift duty he
    submitted to me the scale ticket of the first delivery (see Exhibit I). Please note that the scale ticket of the second
    delivery was not yet submitted by Saros and only verbally communicated that the weight delivered to the Sta. Rosa Bible
    Baptist Church is approximately 1,230 kgs.[18]
    Respondent De Guzman also pointed out that he could not be charged for qualified theft since he merely issued gate
    passes to Saros after the scrap metals were declared ready for disposal by SNK, the company in charge thereof. The
    scrap metals in question were all accounted fro and collected by Saros, and upon collection would be considered sold to
    the latter. Respondent De Guzman theorized that the latter initiated the complaint against him since he was now in
    charge and had recently implemented measures to monitor and confirm the actual weighing of all the scrap materials
    which had not been done before. Saros had apparently been previously free to haul all the scrap materials without field
    supervision from petitioner FCPP.
    On July 28, 1999, respondent Alvarez sent an e-mail message to his co-employees, expressing sympathy for the
    plight of respondent De Guzman. Respondent Alvarez used a different computer, but the event viewer system installed in
    the premises of petitioner FCPP was able to trace the e-mail message to him. Thus, on even date, petitioner Espinosa
    issued an Inter-Office Memorandum addressed to respondent Alvarez, worded as follows:
    TO : MR. ALLAN ALVAREZ
    FROM : HRD and General Affairs Department
    SUBJECT : SENDING OF E-MAIL MESSAGE SYMPATHETIC
    TO MR. DE GUZMAN
    DATE : July 28, 1999
    ___________________________________________________________
    This is in reference to the July 28, 1999 E-mail message sent to all E-mail users from R. Sato this morning.
    Upon investigation, records reveal that you used the computer assigned to Shirley Bagnes and sent a message
    hi to yourself. Moreover, the event viewer-system showed that you logged at 7:19:58 (also using the computer
    of Shirley Bagnes).
    Please explain in writing within 48 hours why no disciplinary action should be filed against you, including
    dismissal, for grossly presenting information which [is] highly confidential while an investigation on Mr. De
    Guzman is going on. Moreover, your action of obtaining the sympathy of employees through the use of the E-
    mail goes against your role as a key person holding a highly responsible position in the Facilities Section.
    (Sgd.)
    ERNESTO G. ESPINOSA
    HRD and General Affairs Director[19]
    Respondent Alvarez submitted a written Explanation dated September 29, 1999 where he apologized, readily
    admitted that he was the sender of the e-mail message in question, and claimed that he acted alone with his own
    conviction. He alleged, however, that he was only expressing his sentiments, and that he was led by his desire to help a
    friend in distress. He further explained:
    Im not [meddling] with the case of our boss but as Facilities member, we are sympathetic to the case against him. If the
    hearsay (sic) is true, that he is [charged] on the ground of manipulating the scrap management, then we totally disagree.
    It was said that he was charged with qualified theft due to pull-out of metal scrap for his church.
    Our basis is pure hearsay but in all indication, we feel that the case is going against our boss. It was frustrating for us to
    be kept on dark side, helplessly waiting to defend him. We are afraid that one day, the case is already closed and we
    even have not said what we have to say. Sorry to have [caused] the e-mail just to be heard (I regret but the damage has
    been done and could not do anything about it).
    We [believe] that the action of the hauler is premeditated and hastily done to pin down our boss. The transaction
    between the Hauler and the Church has been transparent to us. Though the action has been immediate due to request of
    hauler to get the metal scrap, verbal agreement has been made. We had arranged hastily the hauling with the consent of
    Construction Contractor and know about the request of the Church. As agreed by the Church and [Hauler], the payment
    will be P3.00/kg plus hauling fee. Hence, the Hauler will profit P0.40/kg (already deducted their normal payment to our
    company of P2.60/kg). However, for an obvious reason, the hauler had not accepted the payment to make it look that he
    asked for the favor. And as hearsay, the case filed against him is very strong with [pre-arranged] evidence. We believe
    that the evidence has no merit at all. In fact, the Hauler had to pay the company on its entirety as we had recorded the
    full scale of scrap. It is the business and full responsibility of Hauler to sell its [goods] or donate [them] for free. The
    church has no liability to our company but only the Hauler who have to settle all its account. The timing of these charges
    as we believe could be attributed to the improved waste management of our company. Beginning June, the hauler had to
    pay a bigger amount for scrap (P0.25 million/month) against its previous billing of P15,000/month. As ISO 14001
    Promotion Secretariat, we are mandated [to continuously improve] our Environmental Management System. Aside from
    the direction of our President to cut cost, it is our small way of helping on this objective. [20]
    Respondent Alvarez was informed that his services were terminated on the ground of serious misconduct effective
    August 13, 1999 through a Memorandum of even date, worded as follows:
    After a careful evaluation of your case, it is our well discerned view, as supported by competent and strong evidences,
    that you are guilty of serious misconduct.
    Ordinarily, while an innocent and responsible expression of concern or opinion over the probable innocence or guilt of a
    co-employee, who is under administrative investigation, may not be considered as an infraction of company rules and
    regulations, the same consideration does not obtain in your case.
    The following environmental circumstances which surrounded your E-mail message of concern over the preventive
    suspension upon Mr. Victor de Guzman, your superior, and whose case is still undergoing further impartial investigation,
    do not speak well of your true motive behind the action you have taken.
    Firstly, to hide your identity as the source of the E-mail message, you intentionally used the computer of another
    employee, Shirley Bagnes. But before you actually sent the E-mail message, you tried to test the communication line
    between Shirley Bagnes computer and your assigned computer by using Ms. Bagnes computer in sending your computer
    the message hi. Fortunately, however, our viewer-system was able to record you as the author of the E-mail message.
    To further compound the situation, you timed-in at 7:46 a.m. (which you would later admit), in anticipation of a possible
    inquiry from the management as to the source of the message, to show that it was not possible for you to have sent the
    message just about the same time because you just arrived. It was later confirmed, however, that you were already using
    your computer as early as 7:21 a.m.
    Moreover, we do not share your justification as contained in your July 29, 1999 written explanation, where you also
    readily admitted your culpability, that the reason why you were compelled to send an E-mail message was simply to show
    your support to Mr. De Guzman, who according to your premature and unsupported conclusion is innocent of the charges
    lodged against him. Nobody can say so at this point because the matter is still under investigation. Your explanation is
    contrary to the fact that, with malice and afterthought, you deliberately sent the E-mail message to almost 150 Filipino
    and Japanese officers and employees, who are almost entirely and officially not privy to the ongoing investigation.
    Obviously, your foregoing actions at that time, as well as the tenor of your E-mail message, were evidently and
    maliciously premeditated to undermine the result of the ongoing administrative investigation involving Mr. De Guzman,
    and therefore, constitute serious misconduct. Moreover, your actions do not speak well of a ranking Senior Engineer in
    the Facilities Section especially in consideration of the fact that you have several employees reporting to you and should
    in fact, serve as their role model.
    In view of the foregoing ineluctable facts, you are hereby terminated from the service, effective immediately. Please
    proceed to the Finance and Accounting Department to clear yourself from any accountability and to claim whatever
    unpaid salaries and benefits which are still due you as of this date.
    For your information and guidance.[21]
    Respondent De Guzmans employment was thereafter terminated effective August 23, 1999 through an Inter-Office
    Memorandum[22] of even date.
    The respondents then filed a complaint for illegal dismissal against the petitioners with prayer for reinstatement, full
    backwages, damages and attorneys fees before the NLRC, Regional Arbitration Branch, Region IV. The case was
    docketed as NLRC Case No. RAB-IV-9-11426-99-L. After the mandatory conciliation proceedings failed, the parties were
    required to submit their respective position papers.
    The Ruling of the Labor Arbiter
    On April 17, 2000, Labor Arbiter Antonio R. Macam ruled in favor of FCPP, stating that it was justified in terminating
    the employment of the respondents. The dispositive portion of the decision reads:
    WHEREFORE, premises considered, the instant complaint is hereby dismissed for lack of merit. Ernesto Espinosas
    counterclaim is likewise dismissed under the same reason.
    SO ORDERED.[23]
    According to the Labor Arbiter, respondent De Guzman, a managerial employee, was validly dismissed for loss of
    trust and confidence. Citing a number of cases, [24] the Labor Arbiter stressed that where an employee holds a position of
    trust and confidence, the employer is given wider latitude of discretion in terminating his services for just cause.
    According to the Labor Arbiter, the systematic and calculated manner by which respondent Alvarez sent e-mail
    messages to his co-employees could not be disregarded. Thus, respondent Alvarezs reliance on his freedom to express
    his opinion was misplaced, and to condone such infraction would erode the discipline which FCPP, as the employer,
    requires its employees to observe for orderly conduct in the company premises.
    The Labor Arbiter likewise ruled that as borne out by the records, the respondents were not denied due process
    since they were sufficiently accorded an opportunity to be heard.
    Unsatisfied, the respondents appealed the Labor Arbiters decision to the NLRC.
    The Ruling of the NLRC
    The NLRC sustained the ruling of the Labor Arbiter and dismissed the respondents appeal for lack of merit. According
    to the Commission, the Labor Arbiters assessment an evaluation of the facts of the case, as well as the evidence adduced
    by both parties, had been quite thorough. Considering that the decision appealed from was supported by substantial
    evidence, there was no reason to deviate from the findings of the Labor Arbiter.
    The NLRC also affirmed the Labor Arbiters finding that respondent De Guzman, a managerial employee who was
    routinely charged with custody and care of the petitioners property, was validly dismissed on the ground of willful breach
    of trust and confidence. Citing Caete v. NLRC,[25] the Commission pointed out that the right of the employer to dismiss an
    employee on the ground of loss of confidence or breach of trust has been recognized by no less than the Supreme Court.
    Moreover, respondent De Guzman abused his position as Facilities Manager of petitioner FCPP when he prematurely
    declared the steel purlins as scrap materials. The Commission also considered against respondent De Guzman his belated
    [and] unsuccessful attempt to cover up his misdeeds.
    In so far as the dismissal of respondent Alvarez was concerned, the Commission held that the circumstances
    surrounding the sending of the clearly malicious and premeditated e-mail message constituted no less than serious
    misconduct. Hence, respondent Alvarezs dismissal was also justified under the circumstances.
    The NLRC also concluded that the respondents were not denied due process, since they were adequately informed
    of the charges against them and were required to explain thereon.
    The respondents filed a motion for reconsideration of the said decision, which the NLRC denied in a Resolution dated
    April 9, 2002. The respondents then elevated their case to the Court of Appeals (CA).
    The Ruling of the CA
    The CA reversed the ruling of the NLRC and held that the respondents were illegally dismissed. According to the
    appellate court, the non-payment of the scrap steel purlins by the Sta. Rosa Bible Baptist Church (Sta. Rosa) to Saros was
    not a valid cause for the dismissal of respondent De Guzman. Contrary to the findings of the Labor Arbiter, respondent De
    Guzman did not betray the trust reposed on him by his employer, as the transaction involving the sale of scrap steel
    purlins was between Sta. Rosa and Saros. The CA further ruled that the burden of proving just cause for termination of
    employment rests on the employer, which in this case, petitioner FCPP was unable to prove by substantial evidence.
    Considering that respondent De Guzmans dismissal was not founded on clearly established facts sufficient to warrant his
    separation from work, the petitioners act of dismissing him primarily for the sale of scrap metal purlins was unjustified.
    Anent the dismissal of respondent Alvarez, the CA ruled that his act of sympathizing and believing in the innocence
    of respondent De Guzman and expressing his views was not of such grave character as to be considered serious
    misconduct which warranted the penalty of dismissal. The appellate court also stressed that in determining the penalty to
    be imposed on an erring employee, due consideration must be given to the length of service and the number of violations
    committed during employment. According to the CA, the petitioners failed to take these factors into consideration in
    dismissing respondent Alvarez; hence, the latter was illegally dismissed. Thus, they were entitled to reinstatement to their
    respective positions without loss of seniority rights, full backwages, and other benefits corresponding to the period from
    their illegal dismissal up to actual reinstatement. The dispositive portion reads:
    WHEREFORE, the petition is given due course; the assailed decision of respondent NLRC affirming the Labor Arbiters
    judgment is hereby REVERSED and SET ASIDE, and another one entered ordering the reinstatement of petitioners to
    their respective positions, without loss of seniority rights, and with full backwages.
    SO ORDERED.[26]
    The petitioners filed a motion for reconsideration of the said decision, which the appellate court denied in a
    Resolution dated May 14, 2003.
    Aggrieved, the petitioners now come to this Court, ascribing the following errors committed by the CA:
    I.
    THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
    JURISDICTION WHEN IT TOTALLY IGNORED THE WELL ENTRENCHED RULE BEING FOLLOWED IN THIS JURISDICTION
    THAT FACTUAL FINDINGS OF THE NLRC AFFIRMING THOSE OF THE LABOR ARBITER, WHEN SUFFICIENTLY
    SUPPORTED BY EVIDENCE ON RECORD, ARE ACCORDED RESPECT AND FINALITY BY THE APPELLATE COURT.
    II.
    THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT RULED THAT THE DISMISSAL OF
    PRIVATE RESPONDENTS VICTOR DE GUZMAN AND ALLAN ANTHONY ALVAREZ WERE ILLEGAL, CONTRARY TO THE
    FINDINGS OF BOTH THE LABOR ARBITER AND NATIONAL LABOR RELATIONS COMMISSION.
    III.
    THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT COMPLETELY DISREGARDED THE
    FINDINGS OF BOTH THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION THAT PRIVATE
    RESPONDENT VICTOR DE GUZMAN HAD WILLFULLY BREACHED THE TRUST AND CONFIDENCE REPOSED ON HIM BY
    PETITIONERS WHEN HE PREMATURELY DECLARED THE METAL [PURLINS] AS SCRAP MATERIALS.
    IV.
    THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT ACCEPTED HOOK [LINE] AND
    SINKER THE CONTENTION OF RESPONDENT VICTOR DE GUZMAN THAT THE TRANSACTION TO BUY THE STEEL
    [PURLINS] WAS BETWEEN STA. ROSA BIBLE BAPTIST CHURCH AND SAROS TRUCKING SERVICES.
    V.
    THE COURT OF APPEALS COMMITTED PALPABLE ERROR OF SUBSTANCE WHEN IT DID NOT GIVE PROBATIVE VALUE
    TO THE UNCONTROVERTED TESTIMONIES OF THE WITNESSES FOR THE PETITIONERS WHO ALL GAVE THE DETAILS
    AND CIRCUMSTANCES ON HOW PRIVATE RESPONDENT VICTOR DE GUZMAN ABUSED HIS POSITION AS FACILITIES
    MANAGER AND ISO COORDINATOR.
    VI.
    THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT IGNORED THE HOST OF
    JURISPRUDENTIAL TENETS CITED BY BOTH THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS
    [COMMISSION] SUPPORTING THE TERMINATION OF VICTOR DE GUZMAN, A MANAGERIAL EMPLOYEE, FOR WILLFULL
    BREACH OF TRUST AND CONFIDENCE.
    VII.
    THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF ITS DISCRETION WHEN IT DISREGARDED THE FINDINGS OF
    BOTH THE LABOR ARBITER AND THE NATIONAL LABOR RELATIONS COMMISSION THAT PETITIONER ALLAN ANTHONY
    ALVAREZ COMMITTED SERIOUS MISCONDUCT.[27]
    According to the petitioners, the conclusions of the Labor Arbiter should be respected, considering that he is in a
    better position to assess and evaluate the evidence presented by the contending parties. Thus, the CA, in ruling for the
    respondents, ignored a basic jurisprudential precept. The petitioners add that since the respondents themselves admitted
    their culpability, such principle should all the more be applied strictly in this case.
    The petitioners also point out that the appellate court ignored the positive and incontrovertible testimonies of their
    witnesses, which firmly established the culpability of respondent De Guzman in prematurely declaring the steel purlins as
    scrap materials. Furthermore, the SNK employees confirmed that the steel purlins were still needed for the construction of
    a building; in fact, Astillero and Balayan stated that they even prevented the employees of Saros from loading them onto
    the truck. More damaging is the statement of Victoriano, who narrated that it was only at around 2:00 p.m. of July 10,
    1999 that he received a phone call from respondent De Guzman.
    Contrary to the ruling of the appellate court, the witnesses for respondent De Guzman, specifically the representative
    of Sta. Rosa, failed to prove that they were the ones who personally transacted with Saros. The petitioners stress that as
    the evidence would show, it was through respondent De Guzman that the delivery of steel purlins to Sta. Rosa was made
    possible. They reiterate that the respondent wanted to buy the steel purlins, since it was his precise intention to sell them
    to Sta. Rosa. The petitioners point out that as shown by his application for employment, respondent De Guzman is an
    active member of the said Church.
    The petitioners also point out that respondent De Guzman is not an ordinary rank-and-file employee; he was the
    Facilities Manager, and concurrently, the Coordinator of the ISO 14000 Secretariat. As such, respondent De Guzman had
    the sensitive and confidential duty of managing the scrap disposal of petitioner FCPP, and his actuations justified his
    dismissal based on willful breach of trust.
    Anent the case of respondent Alvarez, the petitioners assert that when he sent the e-mail message to more than 150
    Filipino and Japanese officers and employees, there was a willful and malicious intent on his part to undermine the on-
    going investigation of his superior, respondent De Guzman.
    The petitioners conclude that the penalty imposed upon the respondents is justified under the circumstances in the
    instant case.
    In their comment, the respondents countered that as correctly held by the appellate court, their dismissal from
    employment has no valid and just cause. They stress that all the scrap metals were placed in the premises of petitioner
    FCPP, and it was not respondent De Guzman who had determined whether they could already be considered ready for
    disposal, but Machidori of SNK. Moreover, it was Saros which sold the scrap materials to Sta. Rosa, and respondent De
    Guzman had no participation therein. The respondents point out that the issue raised before the Court is factual in
    nature, and as such, contrary to the Rules of Court.
    The primary issue for resolution in the present case is whether respondents De Guzman and Alvarez were illegally
    dismissed from employment.
    The Courts Ruling
    The rule is that factual findings of quasi-judicial agencies such as the NLRC are generally accorded not only respect,
    but at times, even finality.[28] However, when it can be shown that administrative bodies grossly misappreciated evidence
    of such nature as to compel a contrary conclusion, the Court will not hesitate to reverse its factual findings. Factual
    findings of administrative agencies are not infallible and will be set aside if they fail the test of arbitrariness. [29] Thus, in
    this case where the findings of the CA differ from those of the Labor Arbiter and the NLRC, the Court, in the exercise of
    its equity jurisdiction, may look into the records of the case and re-examine the questioned findings. As a corollary, this
    Court is clothed with ample authority to review matters, even if they are not assigned as errors in their appeal, if it finds
    that their consideration is necessary to arrive at a just decision of the case. [30]
    It is settled that to constitute a valid dismissal from employment, two requisites must concur: (a) the dismissal must
    be for any of the causes provided for in Article 282[31] of the Labor Code; and (b) the employee must be afforded an
    opportunity to be heard and defend himself. This means that an employer can terminate the services of an employee for
    just and valid causes, which must be supported by clear and convincing evidence. It also means that, procedurally, the
    employee must be given notice, with adequate opportunity to be heard, before he is notified of his actual dismissal for
    cause.[32]
    After a careful and painstaking study of the records of the case, the Court rules that the respondents dismissal from
    employment was not grounded on any of the just causes enumerated under Article 282 of the Labor Code.
    The term trust and confidence is restricted to managerial employees. [33] In this case, it is undisputed that respondent
    De Guzman, as the Facilities Section Manager, occupied a position of responsibility, a position imbued with trust and
    confidence. Among others, it was his responsibility to see to it that the garbage and scrap materials of petitioner FCPP
    were adequately managed and disposed of. Thus, respondent De Guzman was entrusted with the duty of handling or
    taking care of the property of his employer, i.e., the steel purlins which the petitioners allege the respondent prematurely
    declared as scrap materials.
    However, to be valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and
    founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without
    justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. It must rest
    on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee
    would eternally remain at the mercy of the employer. [34] Loss of confidence must not be indiscriminately used as a shield
    by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause
    for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue
    working for the employer.[35]
    The Court had the occasion to reiterate in Nokom v. National Labor Relations Commission[36] the guidelines for the
    application of the doctrine of loss of confidence-
    a. loss of confidence should not be simulated;
    b. it should not be used as a subterfuge for causes which are improper, illegal or unjustified;
    c. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
    d. it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.[37]
    In the case at bar, the grounds relied upon by petitioner FCPP in terminating the employment of respondent De
    Guzman are contained in the Inter-Office Memorandum dated August 23, 1999 which effectively terminated the latters
    employment:
    We have carefully evaluated your case and we are convinced that you have committed grave abuse of authority
    amounting to serious misconduct and willful breach of trust and confidence.
    Based on our findings, as supported by strong and competent evidences, and contrary to your explanation per your
    Letter dated July 26, 1999, the following facts were satisfactorily established:
    1. That sometime in the first week of July 1999, you intimated to Mr. Roberto Pumarez, Supervisor of Saros Trucking
    Services, your intention to buy from Saros the metals which were then piled up and kept inside the Fuji Electric
    Philippines compound;
    2. Thereafter, you ordered the metals to be sold to Saros Trucking Services so that you can buy them (metals) later from
    Saros at the price of P3.00 per kg., which price you yourself imposed on them;
    3. However, it turned out later some pieces of metals which you have earlier declared as scraps and ordered to be sold to
    Saros were still to be used in the construction of FCPPs Building B. Thus, on July 10, 1999, while Saros employees were
    initially loading the metals, an Engineer of SNK Philippines, Inc., FCPPs building contractor, stopped them. It was only
    later after they were prevented from further loading the metals that you checked with the SNK personnel if the metals
    can already be disposed of as scraps which prove that you have prematurely declared the metals as scrap;
    4. That through Mr. [Adrian] Camcaman, your subordinate Technician, you instructed the personnel of Saros to deliver
    the metals to Sta. Rosa Baptist Church, where you are an active Church member;
    5. That, as of this date, you have not yet settled/paid your obligation to Saros. That immediately after you were placed
    under preventive suspension and to support your explanation that the transaction was between Saros and Sta. Rosa
    Baptist Church, you caused, through some people representing to be members of the Baptist Church and who are
    unknown to Saros, to issue a check in favor of Saros. When this failed, another person, representing to be a member of
    the Baptist church and who appeared for the first time, went to the office of Saros and tried to serve a letter addressed to
    Mr. Larry Manaig, Saros Proprietor, allegedly inquiring about the total obligation of the Baptist Church to Saros but, which
    was again not accepted as, in truth and in fact, there was really no transaction between Saros and the Sta. Rosa Baptist
    Church. All along, it was you and Mr. Camcaman who dealt directly with Saros.
    6. That in previous occasions, it was reported by Mr. Manaig that you solicited from him empty drums, pails and
    corrugated cartons which were all part of those scraps picked up from FCPP and you never paid any of them, a fact which
    you never denied in your explanation which is tantamount to admission.
    Based on the foregoing, it is our well-discerned view that the transaction was exclusively limited between you and Saros.
    Except for your self-serving explanation, you failed miserably to present direct evidence that it was the Sta. Rosa Baptist
    church which bought the subject metals from Saros, as what you want us to believe. At best, your explanation is a mere
    afterthought desperately concocted to exculpate yourself.
    As Facilities Manager, a very sensitive and confidential position, the nature of your work demands of you that your
    actions should not be tainted with any suspicion or impropriety. However, you failed in this regard and abused your
    position to advance your self-interest.
    In view of the foregoing, you are hereby terminated from the service, retroactive July 24, 1999, the date you were placed
    under preventive suspension. Please proceed to the Finance and Accounting Department to clear yourself from any
    accountability and to claim whatever unpaid salaries and benefits which are still due you as of this date.
    For your information and guidance.[38]
    Based on the foregoing, the Court finds and so holds that indeed, the petitioners reliance on the foregoing facts to
    justify the dismissal of respondent De Guzman from employment is misplaced.
    First. The scrap metals, including the steel purlins, were already classified as scrap materials and ready for disposal.
    No less than the written statements of the witnesses for the petitioners confirm this. SNK Mechanical Supervisor Nat
    Balayan stated that the 10-wheeler truck was about to load scrap irons, which includes c-[purlins]. Knowing that c-
    [purlins] could be used for braces of heap-filter box hangers, I immediately informed Mr. Machidori if I would stop the
    hauling, to which he consented. On the other hand, SNK Engineer Maurice Victoriano stated that when respondent De
    Guzman called him and inquired whether the scrap materials at the Fuji Electric Warehouse Area could already be
    disposed of, he (Victoriano) replied that everything was [okay] for disposal considering that this is [FCPPs] scope. The
    report of Machidori is particularly revealing:
    I went to Fuji Electric Warehouse last July 10 (rainy day) to check [out] Warehouse situation. I noticed that scrap
    materials are being carried out by a truck. I met Mr. Adrian Fujitsu Facilities Staff and asked me that they will take out
    those scrap materials. SNK Staff suggested using those scrap materials for BIF Hepa Box steel supports. So I requested
    Mr. Adrian [Camcaman] to separate some materials that we want to use and take out [the] others.
    During our Construction meeting, Facilities explained that they controlled scrap and unpacked materials for disposal.
    Earlier I thought that taking out those materials are good for maintaining Fuji Electric Warehouse Area. So I requested
    them to take out those unrecycled materials.[39]
    Thus, the Court agrees with the following ratiocination of the appellate court when it denied the petitioners motion
    for reconsideration of its decision:
    [T]his Court would like to stress, as borne out by the pleadings submitted by both parties, that the subject scrap metal
    [purlins] were already in the scrap yard ready for hauling. It was the building contractor and not petitioner Victor de
    Guzman who determined whether the metals are scrap metals. Hence, the assertion of the private respondents that
    petitioner Victor de Guzman prematurely declared the metal [purlins] as scrap materials is without basis. [40]
    In fine then, the materials at the said warehouse were already considered scrap and ready for disposal. The hauling
    was stopped by the SNK employees because their superiors felt that pieces of steel purlins could still be used in the
    construction of a building in the company premises. Thus, Victoriano and Balayan, with the conformity of their superior
    Machidori, requested that some pieces be left behind for the purpose.
    Second. No fraud or bad faith could be attributed to respondent De Guzman, as evinced by his readiness to disclose
    his participation in the transaction between Saros and Sta. Rosa.
    Third. Respondent De Guzman was never charged with qualified theft as earlier alluded to by the petitioner FCPP in
    its Inter-Office Memorandum dated August 28, 1999.
    Fourth. The focal point of the cause of respondent De Guzmans dismissal from employment is his alleged
    involvement in the purchase of the steel purlins from petitioner FCPPs warehouse. Whether respondent De Guzman was
    the buyer of the steel purlins or merely facilitated the sale thereof to Sta. Rosa is of no moment. The fact is that as per
    the Garbage Collection Agreement dated January 15, 1999, the scrap metals in the premises of petitioner FCPP were
    regularly bought by Saros. Hence, after such scrap materials are weighed, loaded onto a truck and carried out of the
    company premises, the petitioner FCPP can no longer be considered the owner thereof, and ceases to exercise control
    over such property.[41] Loss of trust and confidence as a just cause for termination of employment is premised on the fact
    that the employee concerned is invested with delicate matters, such as the handling or care and protection of the
    property and assets of the employer.[42] In this case however, Saros, as the new owner of the scrap materials in question,
    including the steel purlins, was free to contract with anyone as it wished. At most, respondent De Guzman was merely
    recommending a buyer for such scrap materials, an act which could hardly be considered as deserving of such a harsh
    penalty as dismissal from employment.
    What strikes the Court as odd in this case is that petitioner FCPP willingly believed the testimony of third persons,
    non-employees, rather than the account of its own employee. There has been no allegation that respondent De Guzman
    had been previously found guilty of any misconduct or had violated established company rules. Moreover, it is difficult to
    believe that respondent De Guzman would jeopardize his job for something as measly as steel purlins. [43]
    The Court thus concludes that respondent De Guzmans actuations do not amount to willful breach of trust and
    confidence. It bears stressing that in termination cases, the employer bears the onus of proving that the dismissal was for
    just cause.[44] Indeed, a condemnation of dishonesty and disloyalty cannot arise from suspicions spawned by speculative
    inferences.[45] Because of its subjective nature, this Court has been very scrutinizing in cases of dismissal based on loss of
    trust and confidence because the same can easily be concocted by an abusive employer. Thus, when the breach of trust
    or loss of confidence theorized upon is not borne by clearly established facts, as in this case, such dismissal on the
    ground of loss of confidence cannot be allowed.[46] Moreover, the fact that one is a managerial employee does not by
    itself exclude him from the protection of the constitutional guarantee of security of tenure. [47]
    The Court likewise rules that the dismissal of respondent Alvarez from employment for gross misconduct was illegal.
    The Court has had varied rulings in cases involving gross misconduct as a ground for dismissal, depending on the
    circumstances of each case. In Zenco Sales, Inc. v. National Labor Relations Commission,[48] the Court affirmed the NLRC
    and the Labor Arbiter in finding the dismissed employee guilty of misfeasance for his failure to closely monitor and control
    the sales transactions of salesman Chua and malfeasance because he used the respondent corporations properties,
    equipment and personnel in connection with his personal business of buy and sale of used sacks. The Court ruled that
    when brought within the ambit of Article 282 of the Labor Code, it constitutes gross neglect in the performance of duty
    and serious misconduct resulting to loss of trust and confidence. [49] In Philippine National Construction Corporation v.
    NLRC,[50] the dismissed employees were caught in the act of accepting a bribe in the form of cash and a dog from a
    motorist who was suspected of illegally transporting dogs. The Court held that by yielding to bribery, the said employees
    violated their very duty to maintain peace and order in the North Luzon Expressway, and to ensure that all tollway rules
    and regulations were followed. Such act was classified as serious misconduct which warranted the penalty of dismissal
    from employment.[51] In another case,[52] the Court considered a dismissed faculty members act of exerting influence and
    pressure to change a failing grade to a passing one and the misrepresentation that a student was his nephew as serious
    misconduct, and a valid ground for dismissal.
    However, in the old case of Radio Communications of the Philippines, Inc. v. NLRC,[53] the Court considered the
    dismissed employees act of hurling invectives at a co-employee as a minor offense. The Court therein ruled that the
    termination of an employee on account of a minor misconduct is illegal because Article 282 of the Labor Code mentions
    serious Misconduct as a cause for cessation of employment.[54]
    Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite
    rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of
    judgment.[55] The misconduct to be serious must be of such grave and aggravated character and not merely trivial and
    unimportant. Such misconduct, however serious, must nevertheless be in connection with the employees work to
    constitute just cause for his separation[56]. Thus, for misconduct or improper behavior to be a just cause for dismissal, (a)
    it must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has
    become unfit to continue working for the employer. [57] Indeed, an employer may not be compelled to continue to employ
    such person whose continuance in the service would be patently inimical to his employers interest. [58]
    In this case, the Court finds that respondent Alvarezs act of sending an e-mail message as an expression of
    sympathy for the plight of a superior can hardly be characterized as serious misconduct as to merit the penalty of
    dismissal. This can be gleaned from a perusal of the e-mail message itself, to wit:
    Question: Where is Mr. De Guzman, Facilities Manager?
    Answer: He was framed-up by Saros Trucking (FCPP garbage hauler) and [accused] of manipulating scrap
    metal which is not true since the church buyer and Saros agreed for a fee of P3.00/kg. [where] Saro will profit
    P0.40/kg plus hauling fee.
    Question: WHY?
    Answer: Mr. De Guzman was able to improve the waste management wherein Saro have to pay close to P0.25
    million pesos for June scrap alone against Saros previous collection of around P15,000/month only.
    THE PLOT IS OBVIOUS BUT IS IT JUST TO SUSPEND A GOOD MAN LIKE MR. DE GUZMAN THAN A GARBAGE
    HAULER WHO DEVILISHLY [PROFITED] FROM FCPP WITHOUT SWEAT? PLS. HELP US[59]
    There is no showing that the sending of such e-mail message had any bearing or relation on respondent Alvarezs
    competence and proficiency in his job. To reiterate, in order to consider it a serious misconduct that would justify
    dismissal under the law, the act must have been done in relation to the performance of his duties as would show him to
    be unfit to continue working for his employer.[60] Moreover, while allegations of a frame-up were made against Saros, the
    e-mail message does not contain a single malicious imputation or charge against petitioner FCPP, or petitioner Espinosa.
    Instructive on this point is the discussion of the Court in Samson v. National Labor Relations Commission,[61] viz.:
    The instant case should be distinguished from the previous cases where we held that the use of insulting and offensive
    language constituted gross misconduct justifying an employees dismissal. In De la Cruz v. NLRC (177 SCRA 626 [1989]),
    the dismissed employee shouted sayang and pagka-professional mo! and putang ina mo at the company physician when
    the latter refused to give him a referral slip. In Autobus Workers Union (AWU) v. NLRC (291 SCRA 219 [1998]), the
    dismissed employee called his supervisor gago ka and taunted the latter by saying bakit, anong gusto mo, tang ina mo.In
    these cases, the dismissed employees personally subjected their respective superiors to the foregoing verbal abuses. The
    utter lack of respect for their superiors was patent. In contrast, when petitioner was heard to have uttered the alleged
    offensive words against respondent companys president and general manager, the latter was not around.
    In Asian Design and Manufacturing Corporation v. Deputy Minister of Labor (142 SCRA 79 [1986]), the dismissed
    employee made false and malicious statements against the foreman (his superior) by telling his co-employees: If you
    dont give a goat to the foreman you will be terminated. If you want to remain in this company, you have to give a goat.
    The dismissed employee therein likewise posted a notice in the comfort room of the company premises which read:
    Notice to all Sander Those who want to remain in this company, you must give anything to your foreman. Failure to do so
    will be terminated Alice 80. In Reynolds Philippine Corporation v. Eslava (137 SCRA 259 [1985]), the dismissed employee
    circulated several letters to the members of the companys board of directors calling the executive vice-president and
    general manager a big fool, anti-Filipino and accusing him of mismanagement, inefficiency, lack of planning and foresight,
    petty favoritism, dictatorial policies, one-man rule, contemptuous attitude to labor, anti-Filipino utterances and activities.
    In this case, the records do not show that petitioner made any such false and malicious statements against any of his
    superiors.[62]
    In fine, the petitioners failed to show that the respondents acts were sufficient to warrant their dismissal from
    employment, for loss of trust and confidence on one hand for respondent De Guzman, and for gross misconduct as
    against respondent Alvarez on the other. To reiterate, it has not been shown that the respondents had been previously
    found guilty of any infraction of company rules and regulations during the period of their employment.
    Under Article 279 of the Labor Code, and employee who is unjustly dismissed from work shall be entitled to
    reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of
    allowances, and to his other benefits or their monetary equivalent, computed from the time his compensation was
    withheld from him (which, as a rule, is from the time of his illegal dismissal) up to the time of his actual
    reinstatement.[63] These remedies give life to the workers constitutional right to security of tenure. [64]
    The Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it may
    terminate a managerial employee for a just cause, such prerogative to dismiss or lay-off an employee must be exercised
    without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer
    should bear in mind that, in the execution of the said prerogative, what is at stake is not only the employees position, but
    his very livelihood.[65] The Constitution does not condone wrongdoing by the employee; nevertheless, it urges a
    moderation of the sanction that may be applied to him.[66] Where a penalty less punitive would suffice, whatever missteps
    may have been committed by the worker ought not be visited with a consequence so severe as dismissal from
    employment.[67] Indeed, the consistent rule is that if doubts exist between the evidence presented by the employer and
    the employee, the scales of justice must be tilted in favor of the latter. The employer must affirmatively show rationally
    adequate evidence that the dismissal was for justifiable cause.[68]
    WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals in CA-G.R. SP No.
    71324 and the Resolution dated May 14, 2003 are AFFIRMED. Costs against the petitioners.
    SO ORDERED.
    SECOND DIVISION

    ALEX GURANGO, G.R. No. 174593


    Petitioner,
    Present:
    CORONA, C.J.,*
    - versus - CARPIO, J., Chairperson,
    PERALTA,
    ABAD, and
    MENDOZA, JJ.

    BEST CHEMICALS AND PLASTICS Promulgated:


    INC. and MOON PYO HONG,
    Respondents. August 25, 2010
    x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

    DECISION

    CARPIO, J.:

    The Case

    This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 20 July 2006
    Decision2 and 11 September 2006 Resolution3 of the Court of Appeals in CA-G.R. SP No. 94004. The Court of Appeals set
    aside the 17 October 20054 and 24 January 20065 Resolutions of the National Labor Relations Commission (NLRC) in CA
    No. 044428-05, affirming the 6 July 2004 Decision6 of the Labor Arbiter in NLRC NCR Case No. 05-06181-03.

    The Facts

    Respondent Best Chemicals and Plastics, Inc. (BCPI) is a corporation engaged in the manufacture of biaxially oriented
    polypropylene and related products. Respondent Moon Pyo Hong (Hong) is the president and chief executive officer of
    BCPI.

    Petitioner Alex R. Gurango (Gurango) and Romeo S. Albao (Albao) worked as boiler operator and security guard,
    respectively, in BCPI. In a memorandum7 dated 2 May 2003, BCPI prohibited its empoyees from bringing personal items
    to their work area. Erring employees would be suspended for six days. BCPI stated that:

    Please be reminded of the following existing rules and regulations that all employees are expected to
    strictly observe and adhere to:

    xxxx

    Bringing in to work station/area of personal belongings other than those required in the performance of
    ones duty which disrupt/obstruct Companys services and operations, except those authorized by higher
    authorities. This offense shall include the following items [sic]: radios, walkman, discman, make-up kits,
    ladies bags, workers knapsacks and the like which must be left behind and safe kept [sic] in the
    employees respective lockers. This being a Serious Offense, the penalty of which is six (6) days suspension
    from work without pay.8

    Gurango and Albao presented two conflicting sets of facts as to what happened on 5 May 2003.

    According to Gurango, at 4 a.m., he performed his routine check-up inside the production area. He had in his pocket a
    camera without film. On his way out of the production area, he saw Albao standing near the bundy clock. Albao pulled
    him, grabbed his pocket, and tried to confiscate the camera. Gurango refused to give the camera because there was no
    reason to surrender it.

    Albao held Gurangos arm and punched him on the face. Gurango shouted for help. Another security guard, Rodenio I.
    Pablis (Pablis), arrived. Instead of pacifying Albao, Pablis joined in punching and kicking Gurango. Albao and Pablis
    banged Gurangos head against the floor and provoked him to fight back.

    Gurangos co-worker, Elvin Juanitas (Juanitas), saw what happened and asked Albao and Pablis to stop hitting Gurango.
    Albao and Pablis brought Gurango to the guardhouse. Officer-in-charge Rommel M. Cordero (Cordero) locked the
    guardhouse, then ordered Albao and Pablis to continue hitting Gurango. Freddie Infuerto arrived at the guardhouse and
    asked the security guards to stop hitting Gurango. Gurango agreed to surrender the camera on the condition that the
    security guards would prepare a document acknowledging receipt of the camera.

    Albao, on the other hand, alleged that he was on duty at the main entrance of the production area from 7 p.m. of 4 May
    2003 to 7 a.m. of 5 May 2003. At 4:20 a.m., Gurango tried to enter the production area bringing a camera. Albao told
    Gurango that he could not bring the camera inside the production area. Gurango got mad and tried to grab Albaos gun.
    Albao and Gurango engaged in a fistfight. Cordero, Pablis, and another security guard, Fredrick Laada, arrived and
    stopped the fight.
    On 5 May 2003, at 8:35 a.m., Gurango went to Dr. Homer L. Aguinaldo (Dr. Aguinaldo) for examination and treatment.
    Dr. Aguinaldo issued a medical report9 and advised Gurango to rest for three days.

    In a letter10 dated 5 May 2003, BCPI asked Gurango to explain in writing why no disciplinary action should be taken
    against him and then placed him under preventive suspension effective 6 May 2003. On 6 May 2003, Gurango wrote a
    letter11 to BCPI narrating what happened. On 8 May 2003, Gurango wrote another letter 12 to BCPI stating that:

    I already explained my side of the story regarding the alleged fistfight between Romeo Albao and me. I
    would like to reiterate that I was never involved in any fistfight nor commit any violation of our Companys
    Code of Discipline.

    Another issue is the preventive suspension Im undergoing with [sic]. I would like to question the propriety
    of such action. Be reminded that you are putting me under indefinite preventive suspension.

    Under the law, an employee may be placed under preventive suspension only if his continued employment
    poses a serious and imminent threat to the life and property of the employer or of his co-employees.
    Consequently, without this kind of threat, preventive suspension is improper.13

    On 9 May 2003, Juanitas wrote a letter14 to BCPI narrating what he saw. Juanitas stated that:

    Noong May 5 bandang alas 4:20 ng madaling araw ako po ay lumabas ng electral [sic] shop upang
    pumunta sa production upang mag monitor. Ng sa bandang locker room pa lang ako may nakita ako
    tatlong tao na nakasuot ng kulay puti na nagpaikot-ikot (sa harapan banda ng bandi [sic] clock). Medyo
    madilim pa kaya hindi ko nakita si Alex Gurango kasi nakasoot sya ng kulay dark blue na T-shirt. Ng medyo
    malapit na ako nakarinig ako ng boses na (tama na nasasaktan na ako) at may sumagot na ibigay mo na
    masasaktan ka lang. Ng makalapit na ako sa kanila nakita ko na iniipit na ng kanang braso ni Albao
    (Guard) ang leeg ni Alex. Akala ko nagbibiroan lang sila. Tinanong ko kung ano yan pero bago ako
    tumanong sa kanila nakita ko na nasasaktan na si Alex dahil sa pagkaipit sa kanyang leeg. Sagot ni Alex sa
    akin pre (ako) kinukuha nila ang kamera sa akin to eh. Sabi pa ni Alex hindi ko to ibibigay sa inyo kahit
    akoy saktan nyo, hindi ako lalaban sa inyo. May pagbibigyan ako, ibibigay ko to sa management. Sabi ko
    ano ba yan nasasaktan na ang tao. Nagtataka naman ako sa kanila ni Pables at Laada bakit hindi nila
    inaawat, nakatingin lang sila at kasamahan pa nila. Ako naman natatakot akong paghiwalayin sila kasi may
    baril si Albao na naka sabit sa beywang nya baka pag inawat ko baka sasabihin ni Albao na kumampi ako
    kay Alex dahil parehas kaming maintenance. Sinabihan ko si Albao na bitiwan mo si Alex ayusin natin
    to. Hindi pa rin binitiwan ni Albao ang pagkaipit sa leeg niAlex hanggang sa naitulak ko sila papunta
    sa guardhouse. Ng sa loob na ng guardhouse hindi pa rin binitiwan ni Albao si Alex kaya hinahanap ko ang
    kanilang O.I.C. Para ayusin na. Maya maya lumabas si Cordero (O.I.C.). Sabi ko awatin niya si Albao pero
    hindi manlang nya inawat pati na ang kanyang mga kasama dahil nandoon pa rin sa loob
    ng guardhouse sina Pables, Laada at Cordero.Lumabas ako at tinawag ko si Pong sa
    kanilang shop. Bumalik ako sa guardhouse kasama si Pong, ganon pa rin nakakapit pa rin ang braso
    ni Albao sa leeg ni Alex. Ngayon naglakas loob na lang ako na paghiwalayin sila. Nahirapan ako dahil
    malakas si Albao. Napaghiwalay ko sila pero muntik pa nga ako tamaan ng kamay ni Albao at ng
    maghiwalay na pinaupo ko si Alex sa upuan sa tabi at hinarang ko si Albaodahil gusto pa nyang lumapit
    kay Alex at nagsabi ako kay Pong na bantayan mo si Alex dahil tatawag ako ng Korean o supervisor para
    ayusin.15

    On 10 May 2003, BCPI wrote a letter to Gurango finding him guilty of engaging in a fistfight and violating company policy
    by bringing a camera. On 14 May 2003, Gurango wrote a letter16 to BCPI stating that:

    I again would like to reiterate that I was never involved nor commit [sic] any violation of Companys Code
    of Discipline.

    For me to further explain, could you please be more specific what company policies are you referring to
    when you said that bringing of camera inside the production area and refusal to surrender the same
    camera constitute infractions of company policy.17

    On 15 May 2003, Gurango filed with the 5th Municipal Circuit Trial Court (MCTC), Carmona, Cavite, a criminal
    complaint18 against Albao, Cordero and Pablis for slight physical injury.

    In a letter19 dated 19 May 2003, BCPI dismissed Gurango effective 20 May 2003. BCPI stated that:

    After a thorough evaluation and intensive deliberation on the facts attendant to your case, Management has
    found you to have committed the following Offenses under the Companys Code of Discipline:

    1. Concealing and bringing in to work station/area of personal belongings (e.g., a camera), other than
    those required in the performance of ones duty which disrupt/obstruct Company services and
    operations, except those authorized by higher authorities. (Table II, Serious, No. 10 of Code of
    Discipline);
    2. Utter disregard for or refusal to submit to reasonable inspection connected within [sic] the Company
    premises by authorized Company security personnel in the conduct of their business. (Table IV, Minor,
    No. 1 of Code of Discipline);
    3. Starting or provoking a fight, i.e., involvement in a fist fight with a security guard last May 5, 2003.
    (Table I, Grave, No. 6 of Code of Discipline);
    4. Attempting to inflict or inflicting bodily injury upon any Company official (e.g., security guard who is a
    peacekeeping officer of the company) or employee. (Table I, Grave, No. 05 of Code of Discipline); and
    5. Intentionally causing personal injury to another person (i.e., the security guard) within the Company
    premises. (Table I, Grave, No. 12 of Code of Discipline).

    xxxx

    Based on the foregoing, and in view of the gravity of the offenses that you have committed which
    constitute gross misconduct, the Company is constrained to terminate your employment for cause effective
    May 20, 2003, at the close of business hours. 20

    On 26 May 2003, Gurango filed with the NLRC a complaint against BCPI and Hong for illegal dismissal.

    The Labor Arbiters Ruling

    In his 6 July 2004 Decision, the Labor Arbiter found BCPI liable for illegal dismissal. The Labor Arbiter ordered BCPI to
    pay Gurango backwages and separation pay. The Labor Arbiter held that:

    I find that the complainant was illegally dismissed from employment.

    He was dismissed from [sic] trying to bring an alleged prohibited item, a camera, inside the Production
    Area but company rules did not prohibit the bringing of camera.

    How can an unloaded camera be said to disrupt/obstruct company services and operations? It cannot.

    As to the alleged fistfight between the complainant and security guard Albao, I am more inclined to believe
    and find credible complainants version that he was mauled by Albao and, later, by some of the guards.

    His letter/statement was made on May 6, 2003, or only a day after the incident. The statement of guard
    Albao was made on May 28, 2003, several days after the incident.

    I find that complainants statement is freshly unblemished, and, therefore, very credible while Albaos
    contradictory statement is the fruit of afterthought.

    Moreover, I dont find the complainant was foolish enough to try to snatch the gun of Albao during the
    incident. I am convinced Albao lied in his statement.

    xxxx

    In the present case, no solid cause exists to dismiss complainant from employment as to warrant a
    dismissal.21

    BCPI and Hong appealed to the NLRC.

    The NLRCs Ruling

    In its 17 October 2005 Resolution, the NLRC affirmed in toto the Labor Arbiters 6 July 2004 Decision. The NLRC held
    that:

    Although fighting within company premises constitute serious misconduct, this however, does not apply in
    this case. Complainant did not start nor provoke the fight. It was precipitated, instead, by guard Albao
    when he tried to get the complainants camera for no valid reason. The statement of Albao that
    complainant tried to snatch his service firearm is not only unbelievable but is also exaggerated. The Labor
    Arbiter is correct and we concur in his finding that the complainant was not foolish enough to try to snatch
    the gun of Albao. The camera is undisputably owned by complainant. Bringing it inside his workplace is not
    a crime. So why would he try to snatch a gun for a very trivial misunderstanding. What is clear is that the
    security guards over acted in the performance of their duty.

    xxxx
    x x x The prohibition against the bringing of personal belongings in to the work station/area is qualified by
    a condition that such belongings will disrupt/obstruct companys services and operations. That is why in the
    enumerations the following are included, radios, walkman, discman, make-up kits, ladies bag workers
    knapsacks and the like. An unloaded camera is not listed and we cannot imagine how such camera could
    disrupt or obstruct company services and operations.

    Moreover, even if we assume that the complainant indeed violated this Inter-Office Memorandum, still, this
    will not justify complainants dismissal because the penalty provided therein is only six (6) days suspension
    from work without pay, not dismissal.22

    BCPI and Hong filed a motion for reconsideration, which the NLRC denied. BCPI and Hong filed with the Court of Appeals
    a petition for certiorari under Rule 65 of the Rules of Court.

    The Court of Appeals Ruling

    In its 20 July 2006 Decision, the Court of Appeals set aside the 17 October 2005 and 24 January 2006 Resolutions of the
    NLRC. The Court of Appeals held that private respondent engaged himself in a fistfight with the security guard23 and
    that engaging in a fistfight constituted serious misconduct.

    Gurango filed a motion24 for reconsideration, which the Court of Appeals denied in its 11 September 2006 Resolution.
    Hence, the present petition.

    The Issue

    Gurango raises as issue that the Court of Appeals erred in ruling that he was legally dismissed. BCPI failed to prove that
    he engaged in a fistfight and that there was just cause for his dismissal.

    The Courts Ruling

    The petition is meritorious.

    As a general rule, only questions of law may be raised in petitions for certiorari under Rule 45 of the Rules of Court.
    Section 1 of Rule 45 states that, The petition shall raise only questions of law. In Triumph International (Phils.), Inc. v.
    Apostol,25 the Court enumerated exceptions to the rule. Among the exceptions are when the findings of fact are
    conflicting and when the findings are conclusions without citation of specific evidence on which they are based.26

    In the present case, the findings of fact of the Court of Appeals conflict with the findings of fact of the NLRC and the
    Labor Arbiter. Also, the finding of the Court of Appeals that Gurango engaged in a fistfight is a conclusion without citation
    of specific evidence on which it is based.

    In termination cases, the employer has the burden of proving, by substantial evidence, that the dismissal is for just
    cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In AMA Computer College
    East Rizal v. Ignacio,27 the Court held that:

    In termination cases, the burden of proof rests on the employer to show that the dismissal is for just cause.
    When there is no showing of a clear, valid and legal cause for the termination of employment, the law
    considers the matter a case of illegal dismissal and the burden is on the employer to prove that the
    termination was for a valid or authorized cause. And the quantum of proof which the employer must
    discharge is substantial evidence. An employees dismissal due to serious misconduct must be supported by
    substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might
    accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably
    opine otherwise.28

    In the present case, aside from Albaos statement, BCPI did not present any evidence to show that Gurango engaged in a
    fistfight. Moreover, there is no showing that Gurangos actions were performed with wrongful intent. In AMA Computer
    College East Rizal, the Court held that:

    The Labor Code provides that an employer may terminate the services of an employee for a just cause.
    Among the just causes in the Labor Code is serious misconduct. Misconduct is improper or wrong conduct.
    It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty,
    willful in character, and implies wrongful intent and not mere error in judgment. The misconduct to be
    serious within the meaning of the Labor Code must be of such a grave and aggravated character and not
    merely trivial or unimportant. x x x

    In National Labor Relations Commission v. Salgarino, the Court stressed that [i]n order to constitute
    serious misconduct which will warrant the dismissal of an employee under paragraph (a) of
    Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has
    violated some established rules or policies. It is equally important and required that the act or
    conduct must have been performed with wrongful intent.
    After a thorough examination of the records of the case, however, the Court finds that petitioner AMACCI
    miserably failed to prove by substantial evidence its charges against respondent. There is no showing at all
    that respondents actions were motivated by a perverse and wrongful intent, as required by Article 282(a)
    of the Labor Code.29 (Emphasis supplied)

    The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in his 9 May 2003 letter to BCPI,
    Juanitas corroborated Gurangos version of the facts; (2) nobody corroborated Albaos version of the facts; (3) in his
    medical report, Dr. Aguinaldo found that Gurango suffered physical injuries; (4) Gurango filed with the MCTC a complaint
    against Albao, Cordero and Pablis for slight physical injury; (5) the Labor Arbiter found Gurangos statement credible and
    unblemished; (6) the Labor Arbiter found Albaos statement contradictory; (7) the Labor Arbiter stated, I am convinced
    Albao lied in his statement; (8) the NLRC found that Gurango did not start a fight; (9) the NLRC found Albaos statement
    unbelievable and exaggerated; and (10) the Court of Appeals reversal of the findings of fact of the Labor Arbiter and the
    NLRC is baseless.

    In Triumph International (Phils.), Inc., the Court held that factual findings of labor officials, who are deemed to have
    acquired expertise in matters within their jurisdiction, are accorded not only respect but finality when supported by
    susbstantial evidence.30

    WHEREFORE, we GRANT the petition. We SET ASIDE the 20 July 2006 Decision and 11 September 2006 Resolution of
    the Court of Appeals in CA-G.R. SP No. 94004 and REINSTATE the 17 October 2005 and 24 January 2006 Resolutions of
    the NLRC in CA No. 044428-05.

    SO ORDERED.
    SECOND DIVISION

    LILIA P. LABADAN G.R. No. 172295


    Petitioner,
    Present:

    QUISUMBING, J., Chairperson,


    CARPIO MORALES,
    - versus - TINGA,
    VELASCO, JR., and
    BRION, JJ.

    FOREST HILLS ACADEMY/NAOMI Promulgated:


    CABALUNA and PRESIDING December 23, 2008
    COMISSIONER SALIC B. DUMARPA,
    COMMISSIONER PROCULO T.
    SARMEN, COMMISSIONER NOVITO C.
    CAGAYAN,
    Respondents.
    x-------------------------------------------x

    DECISION

    CARPIO MORALES, J.:

    Lilian L. Labadan (petitioner) was hired by private respondent Forest Hills Mission Academy (Forest Hills) in July
    1989 as an elementary school teacher. From 1990 up to 2002, petitioner was registrar and secondary school teacher.
    On August 18, 2003, petitioner filed a complaint[1] against respondent Forest Hills and its administrator respondent
    Naomi Cabaluna for illegal dismissal, non-payment of overtime pay, holiday pay, allowances, 13 th month pay, service
    incentive leave, illegal deductions, and damages.

    In her Position Paper,[2] petitioner alleged that she was allowed to go on leave from Forest Hills, and albeit she
    had exceeded her approved leave period, its extension was impliedly approved by the school principal because she
    received no warning or reprimand and was in fact retained in the payroll up to 2002. [3]

    Petitioner further alleged that since 1990, tithes to the Seventh Day Adventist church have been illegally deducted
    from her salary; and she was not paid overtime pay for overtime service, 13th month pay, five days service incentive leave
    pay, and holiday pay; and that her SSS contributions have not been remitted.

    Claiming that strained relations between her and Forest Hill have rendered reinstatement not feasible, petitioner
    prayed for separation pay in lieu of reinstatement.

    In its Position Paper,[4] Forest Hills claimed as follows: In July 2001, petitioner was permitted to go on leave for
    two weeks but did not return for work after the expiration of the period. Despite petitioners undertaking to report soon,
    she never did even until the end of School Year 2001-2002. It thus hired a temporary employee to accomplish the needed
    reports. When she finally returned for work, classes for the School Year 2002-2003 were already on-going.

    To belie petitioners claim that she was dismissed, Forest Hills submitted a list of faculty members and staff from
    School Year 1998-1999 up to School Year 2001 to 2002 which included her name. [5]

    With regard to the charge for illegal deduction, Forest Hills claimed that
    the Seventh Day Adventist Church requires its members to pay tithes equivalent to 10% of their salaries, and petitioner
    was hired on account of her being a member thereof, and petitioner never questioned the deduction of the tithe from her
    salary.

    With regard to the charge for non-payment of overtime pay, holiday pay, and allowances, Forest Hills noted that
    petitioner proffered no evidence to support the same.

    The Labor Arbiter decided in favor of petitioner, disposing as follows:

    WHEREFORE, judgment is hereby rendered:

    1. Finding respondents Forest Hills Academy and/or Naomi Cabaluna guilty of illegally
    dismissing the complainant;

    2. Directing respondent to pay complainant Lilia P. Labadan the total amount of P152,501.02
    representing her monetary award x x x.
    Complainants other claim[s] are hereby dismissed for lack of merit and/or failure to substantiate.

    SO ORDERED.[6]

    The National Labor Relations Commission (NLRC), finding the Labor Arbiter to have misappreciated the facts of
    the case, reversed and set aside his decision and dismissed petitioners complaint by Resolution of June 30, 2005.[7]

    On petitioners Petition for Certiorari,[8] the Court of Appeals, by Resolution[9] of December 15, 2005, dismissed the
    petition for deficient amount of appellate docket fee, non-attachment of Affidavit of Service, absence of written
    explanation why the petition was filed through registered mail instead of through personal service, and non-attachment of
    copies of the Complaint and the Answer filed before the Labor Arbiter. Petitioners Motion for Reconsideration having been
    denied,[10] she filed the present Petition for Review on Certiorari,[11] faulting the Court of Appeals

    x x x IN DISMISSING THE PETITION ON THE GROUND OF TECHNICALITIES[;]

    x x x IN NOT DECIDING ON THE MERITS WHETHER OR NOT HONORABLE


    COMMISSIONERS OF THE 5THDIVISION HAVE COMMITTED AN ACT OF GRAVE ABUSE OF
    DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION:

    A. IN REVERSING THE FINDINGS OF THE EXECUTIVE LABOR ARBITER


    THAT HEREIN PETITIONER-COMPLAINANT WAS NOT DISMISSED FROM
    HER WORK AS A TEACHER and AT THE SAME TIME THE REGISTRAR;

    B. IN FINDING THAT BY A PROLONGED ABSENCE OF ONE YEAR MORE


    OR LESS, PETITIONER WAIVED HER 13TH MONTH PAY AND SERVICE
    INCENTIVE LEAVES AS SHE FAILED TO STATE SUCH CLAIMS IN HER
    AFFIDAVIT THAT WAS ATTACHED [TO] HER POSITION PAPER, and;

    C. THAT THE DECISION/RESOLUTION RENDERED BY THE HONORABLE


    COMMISSIONERS OF THE 5TH DIVISION WAS TAINTED WITH GRAVE ABUSE
    OF DISCRETION AS IT WAS INCOMPLETE AND UNLAWFUL[.][12] (Italics and
    emphasis in the original)

    Non-payment of docket fee at the time of the filing of a petition does not automatically call for its dismissal as
    long as the fee is paid within the applicable prescriptive or reglementary period. [13] While petitioner paid the P30 deficient
    amount of the docket fee on February 7, 2006,[14] it was beyond the 60-day period for filing the petition for
    certiorari. Nevertheless, the Court, in the interest of substantial justice, brushes aside this and the other technicalities
    cited by the Court of Appeals in its Resolution of December 15, 2005[15] and, instead of remanding the case to the
    appellate court, now hereby decides the case on the merits.

    While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or
    authorized cause, the employee must first establish by substantial evidence the fact of dismissal.[16]

    The records do not show that petitioner was dismissed from the service. They in fact show that despite
    petitioners absence from July 2001 to March 2002 which, by her own admission, exceeded her approved leave, [17] she
    was still considered a member of the Forest Hills faculty[18] which retained her in its payroll.[19]

    Petitioner argues, however, that she was constructively dismissed when Forest Hills merged her class with
    another so much that when she reported back to work, she has no more claims to hold and no more work to do. [20]

    Petitioner, however, failed to refute Forest Hills claim that when she expressed her intention to resume teaching,
    classes were already ongoing for School Year 2002-2003. It bears noting that petitioner simultaneously held the positions
    of secondary school teacher and registrar and, as the NLRC noted, she could have resumed her work as registrar had she
    really wanted to continue working with Forest Hills.[21]

    Petitioners affidavit and those of her former colleagues, [22] which she attached to her Position Paper, merely
    attested that she was dismissed from her job without valid cause, but gave no particulars on when and how she was
    dismissed.
    There being no substantial proof that petitioner was dismissed, she is not entitled to separation pay or
    backwages.
    Respecting petitioners claim for holiday pay, Forest Hills contends that petitioner failed to prove that she actually
    worked during specific holidays. Article 94 of the Labor Code provides, however, that

    (a) Every worker shall be paid his regular daily wage during regular holidays,
    except in retail and service establishments regularly employing less than ten (10)
    workers;
    (b) The employer may require an employee to work on any holiday but such
    employee shall be paid a compensation equivalent to twice his regular rate[.]

    The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the
    provision entitling a worker to his regular rate on holidays applies even if he does not work.

    The petitioner is likewise entitled to service incentive leave under Article 95 of the Labor Code which provides that

    (a) Every employee who has rendered at least one year of service shall be
    entitled to a yearly service incentive leave of five days with pay.

    (b) This provision shall not apply to those who are already enjoying the
    benefit herein provided, those enjoying vacation leave with pay of at least five
    days and those employed in establishments regularly employing less than ten
    employees or in establishment exempted from granting this benefit by the
    Secretary of Labor after considering the viability or financial condition of such
    establishment.
    x x x x,
    and to 13th month pay under Presidential Decree No. 851.[23]

    As for petitioners claims for overtime pay, it must be denied, for other than the uncorroborated affidavits of her
    colleagues, there is no concrete proof that she is entitled thereto. [24] And so must her claim for allowances, no proof to her
    entitlement thereto having been presented.

    On the deduction of 10% tithe, Article 113 of the Labor Code instructs:

    ART. 113. No employer, in his own behalf or in behalf of any person, shall make any
    deduction from the wages of his employees, except:

    (a) In cases where the worker is insured with his consent by the employer, and the
    deduction is to recompense the employer for the amount paid by him as premium on
    the insurance;

    (b) For union dues, in cases where the right of the worker or his union to check-off
    has been recognized by the employer or authorized in writing by the individual worker
    concerned; and

    (c) In cases where the employer is authorized by law or regulations issued by the
    Secretary of Labor,

    as does Rule VIII, Section 10 of the Rules Implementing Book III of the Labor Code reading:

    SEC. 10. Deductions from the wages of the employees may be made by the employer in any
    of the following cases:

    (a) When the deductions are authorized by law, including deductions for the insurance
    premiums advanced by the employer in behalf of the employee as well as union dues
    where the right to check-off has been recognized by the employer or authorized in
    writing by the individual employee himself;

    (b) When the deductions are with the written authorization of the employees for
    payment to a third person and the employer agrees to do so, provided that the latter
    does not receive any pecuniary benefit, directly or indirectly, from the
    transaction.(Emphasis and underscoring supplied)

    In the absence then of petitioners written conformity to the deduction of the 10% tithe from her salary, the deduction
    made by Forest Hills was illegal.

    Finally, on petitioners claim that Forest Hills did not remit her SSS contributions, Villar v. National Labor Relations
    Commission[25] enlightens:

    x x x [T]he burden of proving payment of monetary claims rests on the employer. x x x

    xxxx

    The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar
    documents which will show that overtime, differentials, service incentive leave and other claims of workers have been
    paid are not in the possession of the worker but in the custody and absolute control of the employer. [26] (Underscoring
    supplied)
    Forest Hills having glossed over this claim, the same must be granted.

    Finally, insofar as petitioner was compelled to litigate her money claims, an award of attorneys fees equivalent to
    10% of the final judgment award is in order.[27]

    WHEREFORE, the Court of Appeals Resolution of December 15, 2005 is SET ASIDE. The petition
    is GRANTED insofar as petitioners claims for illegal deductions, holiday pay, service incentive leave pay, 13th month pay,
    and non-remittance of SSS contributions are concerned. Respondents are accordingly ORDERED to refund to petitioner
    the amount of the illegal deductions from her salary; to pay her holiday pay, service incentive leave pay, and 13th month
    pay; to remit her contributions to the SSS; and to pay her attorneys fees equivalent to 10% of the final judgment
    award. The case is accordingly REMANDED to the Labor Arbiter for computation of the amount of such money claims.

    SO ORDERED.
    SECOND DIVISION

    REYNALDO MADRIGALEJOS, G.R. No. 179174


    Petitioner,
    Present:

    - versus - QUISUMBING, J., Chairperson,


    CARPIO MORALES,
    TINGA,
    VELASCO, JR., and
    GEMINILOU TRUCKING BRION, JJ.
    SERVICE, LIBERTYGALOTERA,
    EDMUNDO GALOTERA, and MATTHEW
    GALOTERA, Promulgated:
    Respondents. December 24, 2008

    x-----------------------------------------------x

    DECISION

    CARPIO MORALES, J.:


    Assailed via Petition for Review on Certiorari is the Court of Appeals Resolution of April 25, 2007 [1] denying the
    appeal of Reynaldo Madrigalejos (petitioner) from the decision of the National Labor Relations Commission (NLRC) ruling,
    among other things, that petitioner had not been constructively dismissed by respondent Geminilou Trucking Service of
    which its co-respondents Liberty S. Galotera, Edmundo S. Galotera, and Matthew S. Galotera are owners.

    Petitioner was hired by respondents as a truck driver to haul and deliver products of San Miguel Pure Foods Company,
    Inc.[2] He was paid P400.00 per trip and made four trips a day.[3]

    Petitioner claimed that on November 18, 2004, he was requested by respondents to sign a contract entitled Kasunduan
    Sa Pag-Upa ng Serbisyo (Kasunduan)[4] which he refused as he found it to alter his status as a regular employee to
    merely contractual,[5] and it contained a waiver of benefits that had accrued since he started working for respondents. [6]

    Petitioner, averring that on account of his refusal to sign the Kasunduan, his services were terminated effective November
    28, 2004,[7] filed with the NRLC a complaint for constructive dismissal against respondents, and for overtime pay, holiday
    pay, premium for holiday pay and rest day, service incentive leave, 13th month pay, moral and exemplary damages, and
    attorneys fees.[8]
    Respondents denied dismissing petitioner from his employment, explaining that he unilaterally decided to stop reporting
    for work,[9] following the filing by a fellow driver, Crisostomo G. Casulla (Casulla), of a complaint against him with
    the Sangguniang Barangay of San Roque, Marikina City[10] for allegedly attacking Casulla with a knife.

    By Decision of November 29, 2005,[11] the Labor Arbiter declared that petitioner had been illegally dismissed and
    accordingly ordered respondents to reinstate him and pay him full backwages in the amount of P139,256.00.

    On appeal by respondents, the NLRC reversed the Decision of the Labor Arbiter by Resolution dated May 25,
    2006,[12] ruling that there was no termination of employment. It accordingly directed petitioner to report back to work.

    In finding for respondents, the NLRC held that, among other things, there is substantial evidence that petitioner
    was not dismissed. It gave probative weight to respondents claim that petitioner suddenly stopped reporting for work
    after the incident with his fellow driver, respondents having presented in evidence the
    pertinent Sangguniang Barangay records.

    Petitioners Motion for Reconsideration[13] having been denied by Resolution of July 31, 2006 by the NLRC,[14] he appealed
    to the appellate court via Certiorari.[15]

    By Decision dated April 25, 2007,[16] the appellate court denied petitioners appeal. It found, among other things, that
    even assuming that petitioner was required but refused to sign the Kasunduan, his refusal does not per se adequately
    support the charge of dismissal. The appellate court added that while technical rules on evidence are not strictly followed
    in the NLRC, a charge of dismissal must still be supported by substantial evidence at the very least, or such relevant
    evidence as a reasonable mind might accept as adequate to support a conclusion.

    Petitioners Motion for Reconsideration having been denied by Resolution of August 2, 2007,[17] he seeks relief
    from this Court.
    Petitioner contends, among other things, that the appellate court misappreciated the evidence adduced when it
    ruled that petitioner was not constructively dismissed; and that the employer bears the burden of proof to show that
    there was unjustified refusal to report for work.[18]
    Respondents, in their Comment, maintain that findings of fact of the appellate court are conclusive, they being
    supported by substantial evidence.[19]
    The petition fails.

    Considering that the NLRC reversed the findings of the Labor Arbiter, it behooves the Court to re-examine the records
    and resolve the conflicting rulings between the Labor Arbiter, on the one hand, and those of the NLRC and the appellate
    court, on the other.[20]

    The Court's examination of the records reveals that the factual findings of the NLRC, as affirmed by the appellate court,
    are supported by substantial evidence, hence, there is no cogent reason for the Court to modify or reverse the same.[21]

    Constructive dismissal is a cessation of work because continued employment is rendered impossible, unreasonable or
    unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or
    disdain by an employer becomes unbearable to the employee. [22] The test of constructive dismissal is whether a
    reasonable person in the employee's position would have felt compelled to give up his job under the circumstances. [23]

    In the present case, the records on hand show that the lone piece of evidence submitted by petitioner to substantiate his
    claim of constructive dismissal is an unsigned copy of the Kasunduan. This falls way short of the required quantum of
    proof which, as the appellate court pointed out, is substantial evidence, [24] or such relevant evidence as a reasonable
    mind might accept as adequate to support a conclusion.[25]

    Under the circumstances, the Court finds that the appellate court did not err in sustaining respondents claim that
    petitioner was not dismissed, but that he simply failed to report for work after an altercation with a fellow driver, which
    incident was the subject of conciliation proceedings before the Sangguniang Barangay.

    All told, petitioners bare allegations of constructive dismissal must fail. [26]

    WHEREFORE, the petition is DENIED.


    SO ORDERED.
    THIRD DIVISION
    [G.R. No. 121439. January 25, 2000]
    AKLAN ELECTRIC COOPERATIVE INCORPORATED (AKELCO), petitioner, vs. NATIONAL LABOR RELATIONS
    COMMISSION (Fourth Division), RODOLFO M. RETISO and 165 OTHERS, [1] respondents.
    DECISION
    GONZAGA-REYES, J.:
    In his petition for certiorari and prohibition with prayer for writ of preliminary injunction and/or temporary restraining
    order, petitioner assails (a) the decision dated April 20, 1995, of public respondent National Labor Relations Commission
    (NLRC), Fourth (4th) Division, Cebu City, in NLRC Case No. V-0143-94 reversing the February 25, 1994 decision of Labor
    Arbiter Dennis D. Juanon and ordering petitioner to pay wages in the aggregate amount of P6,485,767.90 to private
    respondents, and (b) the resolution dated July 28, 1995 denying petitioners motion for reconsideration, for having been
    issued with grave abuse of discretion.
    A temporary restraining order was issued by this Court on October 9, 1995 enjoining public respondent from executing
    the questioned decision upon a surety bond posted by petitioner in the amount of P6,400,000.00. [2]
    The facts as found by the Labor Arbiter are as follows:[3]

    "These are consolidated cases/claims for non-payment of salaries and wages, 13th month pay, ECOLA and other fringe
    benefits as rice, medical and clothing allowances, submitted by complainant Rodolfo M. Retiso and 163 others, Lyn E.
    Banilla and Wilson B. Sallador against respondents Aklan Electric Cooperative, Inc. (AKELCO), Atty. Leovigildo Mationg in
    his capacity as General Manager; Manuel Calizo, in his capacity as Acting Board President, Board of Directors, AKELCO.
    Complainants alleged that prior to the temporary transfer of the office of AKELCO from Lezo Aklan to Amon Theater,
    Kalibo, Aklan, complainants were continuously performing their task and were duly paid of their salaries at their main
    office located at Lezo, Aklan.
    That on January 22, 1992, by way of resolution of the Board of Directors of AKELCO allowed the temporary transfer
    holding of office at Amon Theater, Kalibo, Aklan per information by their Project Supervisor, Atty. Leovigildo Mationg, that
    their head office is closed and that it is dangerous to hold office thereat;
    Nevertheless, majority of the employees including herein complainants continued to report for work at Lezo Aklan and
    were paid of their salaries.
    That on February 6, 1992, the administrator of NEA, Rodrigo Cabrera, wrote a letter addressed to the Board of AKELCO,
    that he is not interposing any objections to the action taken by respondent Mationg
    That on February 11, 1992, unnumbered resolution was passed by the Board of AKELCO withdrawing the temporary
    designation of office at Kalibo, Aklan, and that the daily operations must be held again at the main office of Lezo, Aklan; [4]
    That complainants who were then reporting at the Lezo office from January 1992 up to May 1992 were duly paid of their
    salaries, while in the meantime some of the employees through the instigation of respondent Mationg continued to
    remain and work at Kalibo, Aklan;
    That from June 1992 up to March 18, 1993, complainants who continuously reported for work at Lezo, Aklan in
    compliance with the aforementioned resolution were not paid their salaries;
    That on March 19, 1993 up to the present, complainants were again allowed to draw their salaries; with the exception of
    a few complainants who were not paid their salaries for the months of April and May 1993;
    Per allegations of the respondents, the following are the facts:
    1. That these complainants voluntarily abandoned their respective work/job assignments, without any justifiable reason
    and without notifying the management of the Aklan Electric Cooperative, Inc. (AKELCO), hence the cooperative suffered
    damages and systems loss;
    2. That the complainants herein defied the lawful orders and other issuances by the General Manager and the Board of
    Directors of the AKELCO. These complainants were requested to report to work at the Kalibo office x x x but despite
    these lawful orders of the General Manager, the complainants did not follow and wilfully and maliciously defied said
    orders and issuance of the General Manager; that the Board of Directors passed a Resolution resisting and denying the
    claims of these complainants, x x x under the principle of "no work no pay" which is legally justified; That these
    complainants have "mass leave" from their customary work on June 1992 up to March 18, 1993 and had a "sit-down"
    stance for these periods of time in their alleged protest of the appointment of respondent Atty. Leovigildo Mationg as the
    new General Manager of the Aklan Electric Cooperative, Inc. (AKELCO) by the Board of Directors and confirmed by the
    Administrator of the National Electrification Administration (NEA), Quezon City; That they engaged in " . . . slowdown
    mass leaves, sit downs, attempts to damage, destroy or sabotage plant equipment and facilities of the Aklan Electric
    Cooperative, Inc. (AKELCO)."

    On February 25, 1994, a decision was rendered by Labor Arbiter Dennis D. Juanon dismissing the complaints.[5]
    Dissatisfied with the decision, private respondents appealed to the respondent Commission.

    On appeal, the NLRCs Fourth Division, Cebu City,[6] reversed and set aside the Labor Arbiters decision and held that
    private respondents are entitled to unpaid wages from June 16, 1992 to March 18, 1993, thus:[7]
    "The evidence on records, more specifically the evidence submitted by the complainants, which are: the
    letter dated April 7, 1993 of Pedrito L. Leyson, Office Manager of AKELCO (Annex "C"; complainants
    position paper; Rollo, p.102) addressed to respondent Atty. Leovigildo T. Mationg; respondent AKELCO
    General Manager; the memorandum of said Atty. Mationg dated 14 April 1993, in answer to the letter of
    Pedrito Leyson (Annex "D" complainants position paper); as well as the computation of the unpaid wages
    due to complainants (Annexes "E" to "E-3"; complainants position paper, Rollo, pages 1024 to 1027)
    clearly show that complainants had rendered services during the period - June 16, 1992 to March 18,
    1993. The record is bereft of any showing that the respondents had submitted any evidence,
    documentary or otherwise, to controvert this asseveration of the complainants that services were
    rendered during this period. Subjecting these evidences submitted by the complainants to the crucible of
    scrutiny, We find that respondent Atty. Mationg responded to the request of the Office Manager, Mr.
    Leyson, which We quote, to wit:
    "Rest assured that We shall recommend your aforesaid request to our Board of Directors
    for their consideration and appropriate action. This payment, however, shall be subject,
    among others, to the availability of funds."
    This assurance is an admission that complainants are entitled to payment for services rendered from June
    16, 1992 to March 18, 1993, specially so that the recommendation and request comes from the office
    manager himself who has direct knowledge regarding the services and performance of employees under
    him. For how could one office manager recommend payment of wages, if no services were rendered by
    employees under him. An office manager is the most qualified person to know the performance of
    personnel under him. And therefore, any request coming from him for payment of wages addressed to
    his superior as in the instant case shall be given weight.
    Furthermore, the record is clear that complainants were paid of their wages and other fringe benefits
    from January, 1992 to May, 1992 and from March 19, 1993 up to the time complainants filed the instant
    cases. In the interegnum, from June 16, 1992 to March 18, 1993, complainants were not paid of their
    salaries, hence these claims. We could see no rhyme nor reason in respondents refusal to pay
    complainants salaries during this period when complainants had worked and actually rendered service to
    AKELCO.
    While the respondents maintain that complainants were not paid during this interim period under the
    principle of "no work, no pay", however, no proof was submitted by the respondents to substantiate this
    allegation. The labor arbiter, therefore, erred in dismissing the claims of the complainants, when he
    adopted the "no work, no pay" principle advanced by the respondents.
    WHEREFORE, in view of the foregoing, the appealed decision dated February 25, 1994 is hereby
    Reversed and Set Aside and a new one entered ordering respondent AKELCO to pay complainants their
    claims amounting to P6,485,767.90 as shown in the computation (Annexes "E" to "E-3")."
    A motion for reconsideration was filed by petitioner but the same was denied by public respondent in a resolution dated
    July 28, 1995.[8]
    Petitioner brought the case to this Court alleging that respondent NLRC committed grave abuse of discretion citing the
    following grounds:[9]
    1. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE FACTUAL
    FINDINGS AND CONCLUSIONS OF THE LABOR ARBITER, AND DISREGARDING THE EXPRESS
    ADMISSION OF PRIVATE RESPONDENTS THAT THEY DEFIED PETITIONERS ORDER TRANSFERRING THE
    PETITIONERS OFFICIAL BUSINESS OFFICE FROM LEZO TO KALIBO AND FOR THEM TO REPORT
    THEREAT.
    2. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN CONCLUDING THAT PRIVATE
    RESPONDENTS WERE REALLY WORKING OR RENDERING SERVICE ON THE BASIS OF THE
    COMPUTATION OF WAGES AND THE BIASED RECOMMENDATION SUBMITTED BY LEYSON WHO IS ONE
    OF THE PRIVATE RESPONDENTS WHO DEFIED THE LAWFUL ORDERS OF PETITIONER.
    3. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN CONSIDERING THE
    ASSURANCE BY PETITIONERS GENERAL MANAGER MATIONG TO RECOMMEND THE PAYMENT OF THE
    CLAIMS OF PRIVATE RESPONDENTS AS AN ADMISSION OF LIABILITY OR A RECOGNITION THAT
    COMPENSABLE SERVICES WERE ACTUALLY RENDERED.
    4. GRANTING THAT PRIVATE RESPONDENTS CONTINUED TO REPORT AT THE LEZO OFFICE, IT IS
    STILL GRAVE ABUSE OF DISCRETION FOR PUBLIC RESPONDENT TO CONSIDER THAT PETITIONER IS
    LEGALLY OBLIGATED TO RECOGNIZE SAID CIRCUMSTANCE AS COMPENSABLE SERVICE AND PAY
    WAGES TO PRIVATE RESPONDENTS FOR DEFYING THE ORDER FOR THEM TO REPORT FOR WORK AT
    THE KALIBO OFFICE WHERE THE OFFICIAL BUSINESS AND OPERATIONS WERE CONDUCTED.
    5. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION AND SERIOUS, PATENT AND
    PALPABLE ERROR IN RULING THAT THE "NO WORK, NO PAY" PRINCIPLE DOES NOT APPLY FOR LACK
    OF EVIDENTIARY SUPPORT WHEN PRIVATE REPONDENTS ALREADY ADMITTED THAT THEY DID NOT
    REPORT FOR WORK AT THE KALIBO OFFICE.
    6. PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN ACCORDING WEIGHT AND
    CREDIBILITY TO THE SELF-SERVING AND BIASED ALLEGATIONS OF PRIVATE RESPONDENTS, AND
    ACCEPTING THEM AS PROOF, DESPITE THE ESTABLISHED FACT AND ADMISSION THAT PRIVATE
    RESPONDENTS DID NOT REPORT FOR WORK AT THE KALIBO OFFICE, OR THAT THEY WERE NEVER
    PAID FOR ANY WAGES FROM THE TIME THEY DEFIED PETITIONERS ORDERS.
    Petitioner contends that public respondent committed grave abuse of discretion in finding that private respondents are
    entitled to their wages from June 16, 1992 to March 18, 1993, thus disregarding the principle of "no work, no pay". It
    alleges that private respondents stated in their pleadings that they not only objected to the transfer of petitioners
    business office to Kalibo but they also defied the directive to report thereat because they considered the transfer illegal. It
    further claims that private respondents refused to recognize the authority of petitioners lawful officers and agents
    resulting in the disruption of petitioners business operations in its official business office in Lezo, AKlan, forcing petitioner
    to transfer its office from Lezo to Kalibo transferring all its equipments, records and facilities; that private respondents
    cannot choose where to work, thus, when they defied the lawful orders of petitioner to report at Kalibo, private
    respondents were considered dismissed as far as petitioner was concerned. Petitioner also disputes private respondents
    allegation that they were paid their salaries from January to May 1992 and again from March 19, 1993 up to the present
    but not for the period from June 1992 to March 18, 1993 saying that private respondents illegally collected fees and
    charges due petitioner and appropriated the collections among themselves for which reason they are claiming salaries
    only for the period from June 1992 to March 1993 and that private respondents were paid their salaries starting only in
    April 1993 when petitioners Board agreed to accept private respondents back to work at Kalibo office out of compassion
    and not for the reason that they rendered service at the Lezo office. Petitioner also adds that compensable service is best
    shown by timecards, payslips and other similar documents and it was an error for public respondent to consider the
    computation of the claims for wages and benefits submitted merely by private respondents as substantial evidence.
    The Solicitor General filed its Manifestation in lieu of Comment praying that the decision of respondent NLRC be set aside
    and payment of wages claimed by private respondents be denied for lack of merit alleging that private respondents could
    not have worked for petitioner's office in Lezo during the stated period since petitioner transferred its business operation
    in Kalibo where all its records and equipments were brought; that computations of the claims for wages and benefits
    submitted by private respondents to petitioner is not proof of rendition of work. Filing its own Comment, public
    respondent NLRC claims that the original and exclusive jurisdiction of this Court to review decisions or resolutions of
    respondent NLRC does not include a correction of its evaluation of evidence as factual issues are not fit subject
    for certiorari.
    Private respondents, in their Comment, allege that review of a decision of NLRC in a petition for certiorari under Rule 65
    does not include the correctness of its evaluation of the evidence but is confined to issues of jurisdiction or grave abuse
    of discretion and that factual findings of administrative bodies are entitled to great weight, and accorded not only respect
    but even finality when supported by substantial evidence. They claim that petitioner's Board of Directors passed an
    unnumbered resolution on February 11, 1992 returning back the office to Lezo from Kalibo Aklan with a directive for all
    employees to immediately report at Lezo; that the letter-reply of Atty. Mationg to the letter of office manager Leyson that
    he will recommend the payment of the private respondents' salary from June 16, 1992 to March 18, 1993 to the Board of
    Directors was an admission that private respondents are entitled to such payment for services rendered. Private
    respondents state that in appreciating the evidence in their favor, public respondent NLRC at most may be liable for
    errors of judgment which, as differentiated from errors of jurisdiction, are not within the province of the special civil
    action of certiorari.
    Petitioner filed its Reply alleging that review of the decision of public respondent is proper if there is a conflict in the
    factual findings of the labor arbiter and the NLRC and when the evidence is insufficient and insubstantial to support
    NLRCs factual findings; that public respondents findings that private respondents rendered compensable services were
    merely based on private respondents computation of claims which is self-serving; that the alleged unnumbered board
    resolution dated February 11, 1992, directing all employees to report to Lezo Office was never implemented because it
    was not a valid action of AKELCOs legitimate board.
    The sole issue for determination is whether or not public respondent NLRC committed grave abuse of discretion
    amounting to excess or want of jurisdiction when it reversed the findings of the Labor Arbiter that private respondents
    refused to work under the lawful orders of the petitioner AKELCO management; hence they are covered by the "no work,
    no pay" principle and are thus not entitled to the claim for unpaid wages from June 16, 1992 to March 18, 1993.
    We find merit in the petition.
    At the outset, we reiterate the rule that in certiorari proceedings under Rule 65, this Court does not assess and weigh the
    sufficiency of evidence upon which the labor arbiter and public respondent NLRC based their resolutions. Our query is
    limited to the determination of whether or not public respondent NLRC acted without or in excess of its jurisdiction or
    with grave abuse of discretion in rendering the assailed resolutions.[10] While administrative findings of fact are accorded
    great respect, and even finality when supported by substantial evidence, nevertheless, when it can be shown that
    administrative bodies grossly misappreciated evidence of such nature as to compel a contrary conclusion, this court had
    not hesitated to reverse their factual findings.[11] Factual findings of administrative agencies are not infallible and will be
    set aside when they fail the test of arbitrariness.[12] Moreover, where the findings of NLRC contradict those of the labor
    arbiter, this Court, in the exercise of its equity jurisdiction, may look into the records of the case and reexamine the
    questioned findings.[13]
    We find cogent reason, as shown by the petitioner and the Solicitor General, not to affirm the factual findings of public
    respondent NLRC.
    We do not agree with the finding that private respondents had rendered services from June 16, 1992 to March 18, 1993
    so as to entitle them to payment of wages. Public respondent based its conclusion on the following: (a) the letter dated
    April 7, 1993 of Pedrito L. Leyson, Office Manager of AKELCO addressed to AKELCOs General Manager, Atty. Leovigildo T.
    Mationg, requesting for the payment of private respondents unpaid wages from June 16, 1992 to March 18, 1993; (b) the
    memorandum of said Atty. Mationg dated 14 April 1993, in answer to the letter request of Pedrito Leyson where Atty.
    Mationg made an assurance that he will recommend such request; (c) the private respondents own computation of their
    unpaid wages. We find that the foregoing does not constitute substantial evidence to support the conclusion that private
    respondents are entitled to the payment of wages from June 16, 1992 to March 18, 1993. Substantial evidence is that
    amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. [14] These
    evidences relied upon by public respondent did not establish the fact that private respondents actually rendered services
    in the Kalibo office during the stated period.
    The letter of Pedrito Leyson to Atty. Mationg was considered by public respondent as evidence that services were
    rendered by private respondents during the stated period, as the recommendation and request came from the office
    manager who has direct knowledge regarding the services and performance of employees under him. We are not
    convinced. Pedrito Leyson is one of the herein private respondents who are claiming for unpaid wages and we find his
    actuation of requesting in behalf of the other private respondents for the payment of their backwages to be biased and
    self-serving, thus not credible.
    On the other hand, petitioner was able to show that private respondents did not render services during the stated period.
    Petitioners evidences show that on January 22, 1992, petitioners Board of Directors passed a resolution temporarily
    transferring the Office from Lezo, Aklan to Amon Theater, Kalibo, Aklan upon the recommendation of Atty. Leovigildo
    Mationg, then project supervisor, on the ground that the office at Lezo was dangerous and unsafe. Such transfer was
    approved by then NEA Administrator, Rodrigo E. Cabrera, in a letter dated February 6, 1992 addressed to petitioners
    Board of Directors.[15]Thus, the NEA Administrator, in the exercise of supervision and control over all electric cooperatives,
    including petitioner, wrote a letter dated February 6, 1992 addressed to the Provincial Director PC/INP Kalibo Aklan
    requesting for military assistance for the petitioners team in retrieving the electric cooperatives equipments and other
    removable facilities and/or fixtures consequential to the transfer of its principal business address from Lezo to Kalibo and
    in maintaining peace and order in the cooperatives coverage area.[16] The foregoing establishes the fact that the
    continuous operation of the petitioners business office in Lezo Aklan would pose a serious and imminent threat to
    petitioners officials and other employees, hence the necessity of temporarily transferring the operation of its business
    office from Lezo to Kalibo. Such transfer was done in the exercise of a management prerogative and in the absence of
    contrary evidence is not unjustified. With the transfer of petitioners business office from its former office, Lezo, to Kalibo,
    Aklan, its equipments, records and facilities were also removed from Lezo and brought to the Kalibo office where
    petitioners official business was being conducted; thus private respondents allegations that they continued to report for
    work at Lezo to support their claim for wages has no basis.
    Moreover, private respondents in their position paper admitted that they did not report at the Kalibo office, as Lezo
    remained to be their office where they continuously reported, to wit: [17]
    "On January 22, 1991 by way of a resolution of the Board of Directors of AKELCO it allowed the
    temporary holding of office at Amon Theater, Kalibo, Aklan, per information by their project supervisor,
    Atty. Leovigildo Mationg that their head office is closed and that it is dangerous to hold office thereat.
    Nevertheless, majority of the employees including the herein complainants, continued to report for work
    at Lezo, Aklan and were paid of their salaries.
    xxx
    The transfer of office from Lezo, Aklan to Kalibo, Aklan being illegal for failure to comply with the legal
    requirements under P.D. 269, the complainants remained and continued to work at the Lezo Office until
    they were illegally locked out therefrom by the respondents. Despite the illegal lock out however,
    complainants continued to report daily to the location of the Lezo Office, prepared to continue in the
    performance of their regular duties.
    Complainants thus could not be considered to have abandoned their work as Lezo remained to be their
    office and not Kalibo despite the temporary transfer thereto. Further the fact that they were allowed to
    draw their salaries up to May, 1992 is an acknowledgment by the management that they are working
    during the period.
    xxx
    It must be pointed out that complainants worked and continuously reported at Lezo office despite the
    management holding office at Kalibo. In fact, they were paid their wages before it was withheld and then
    were allowed to draw their salaries again on March 1993 while reporting at Lezo up to the present.
    Respondents acts and payment of complainants salaries and again from March 1993 is an unequivocal
    recognition on the part of respondents that the work of complainants is continuing and uninterrupted and
    they are therefore entitled to their unpaid wages for the period from June 1992 to March 1993."
    The admission is detrimental to private respondents cause. Their excuse is that the transfer to Kalibo was illegal but we
    agree with the Labor Arbiter that it was not for private respondents to declare the managements act of temporarily
    transferring the AKELCO office to Kalibo as an illegal act. There is no allegation nor proof that the transfer was made in
    bad faith or with malice. The Labor Arbiter correctly rationalized in its decision as follows: [18]
    "We do not subscribe to complainants theory and assertions. They, by their own allegations, have
    unilaterally committed acts in violation of managements/respondents directives purely classified as
    management prerogative. They have taken amongst themselves declaring managements acts
    of temporarily transferring the holding of the AKELCO office from Lezo to Kalibo, Aklan as illegal. It is
    never incumbent upon themselves to declare the same as such. It is lodged in another forum or body
    legally mantled to do the same. What they should have done was first to follow managements
    orders temporarily transferring office for it has the first presumption of legality. Further, the transfer was
    only temporary. For:
    "The employer as owner of the business, also has inherent rights, among which are the
    right to select the persons to be hired and discharge them for just and valid cause; to
    promulgate and enforce reasonable employment rules and regulations and to modify,
    amend or revoke the same; to designate the work as well as the employee or employees
    to perform it; to transfer or promote employees; to schedule, direct, curtail or control
    company operations; to introduce or install new or improved labor or money savings
    methods, facilities or devices; to create, merge, divide, reclassify and abolish
    departments or positions in the company and to sell or close the business.
    xxx
    Even as the law is solicitous of the welfare of the employees it must also protect the right
    of an employer to exercise what are clearly management prerogatives. The free will of
    management to conduct its own business affairs to achieve its purpose can not be
    denied. The transfer of assignment of a medical representative from Manila to the
    province has therefore been held lawful where this was demanded by the requirements
    of the drug companys marketing operations and the former had at the time of his
    employment undertaken to accept assignment anywhere in the Philippines. (Abbot
    Laboratories (Phils.), Inc., et al. vs. NLRC, et al., G.R. No. L-76959, Oct. 12, 1987).
    It is the employers prerogative to abolish a position which it deems no longer necessary, and the courts,
    absent any findings of malice on the part of the management, cannot erase that initiative simply to
    protect the person holding office (Great Pacific Life Assurance Corporation vs. NLRC, et al., G.R. No.
    88011, July 30, 1990)."
    Private respondents claim that petitioners Board of Directors passed an unnumbered resolution dated February 11, 1992
    returning back the office from its temporary office in Kalibo to Lezo. Thus, they did not defy any lawful order of petitioner
    and were justified in continuing to remain at Lezo office. This allegation was controverted by petitioner in its Reply saying
    that such unnumbered resolution was never implemented as it was not a valid act of petitioners Board. We are convinced
    by petitioners argument that such unnumbered resolution was not a valid act of petitioners legitimate Board considering
    the subsequent actions taken by the petitioners Board of Directors decrying private respondents inimical act and defiance,
    to wit (1) Resolution No. 411, s. of 1992 on September 9, 1992, dismissing all AKELCO employees who were on illegal
    strike and who refused to return to work effective January 31, 1992 despite the directive of the NEA project supervisor
    and petitioners acting general manager;[19] (2) Resolution No. 477, s. of 1993 dated March 10, 1993 accepting back
    private respondents who staged illegal strike, defied legal orders and issuances, out of compassion, reconciliation,
    Christian values and humanitarian reason subject to the condition of "no work, no pay"[20] (3) Resolution No. 496, s. of
    1993 dated June 4, 1993, rejecting the demands of private respondents for backwages from June 16, 1992 to March
    1993 adopting the policy of "no work, no pay" as such demand has no basis, and directing the COOP Legal Counsel to file
    criminal cases against employees who misappropriated collections and officers who authorized disbursements of funds
    without legal authority from the NEA and the AKELCO Board.[21] If indeed there was a valid board resolution transferring
    back petitioners office to Lezo from its temporary office in Kalibo, there was no need for the Board to pass the above-
    cited resolutions.
    We are also unable to agree with public respondent NLRC when it held that the assurance made by Atty. Mationg to the
    letter-request of office manager Leyson for the payment of private respondents wages from June 1992 to March 1993
    was an admission on the part of general manager Mationg that private respondents are indeed entitled to the same. The
    letter reply of Atty. Mationg to Leyson merely stated that he will recommend the request for payment of backwages to
    the Board of Directors for their consideration and appropriate action and nothing else, thus, the ultimate approval will
    come from the Board of Directors. We find well-taken the argument advanced by the Solicitor General as follows:[22]
    The allegation of private respondents that petitioner had already approved payment of their wages is
    without basis. Mationgs offer to recommend the payment of private respondents' wages is hardly
    approval of their claim for wages. It is just an undertaking to recommend payment. Moreover, the offer is
    conditional. It is subject to the condition that petitioners Board of Directors will give its approval and that
    funds were available. Mationgs reply to Leysons letter for payment of wages did not constitute approval
    or assurance of payment. The fact is that, the Board of Directors of petitioner rejected private
    respondents demand for payment (Board Resolution No. 496, s. 1993).
    We are accordingly constrained to overturn public respondents findings that petitioner is not justified in its refusal to pay
    private respondents wages and other fringe benefits from June 16, 1992 to March 18, 1993; public respondents stated
    that private respondents were paid their salaries from January to May 1992 and again from March 19, 1993 up to the
    present. As cited earlier, petitioners Board in a Resolution No. 411 dated September 9, 1992 dismissed private
    respondents who were on illegal strike and who refused to report for work at Kalibo office effective January 31, 1992;
    since no services were rendered by private respondents they were not paid their salaries. Private respondents never
    questioned nor controverted the Resolution dismissing them and nowhere in their Comment is it stated that they
    questioned such dismissal. Private respondents also have not rebutted petitioners claim that private respondents illegally
    collected fees and charges due petitioner and appropriated the collections among themselves to satisfy their salaries from
    January to May 1992, for which reason, private respondents are merely claiming salaries only for the period from June
    16, 1992 to March 1993.
    Private respondents were dismissed by petitioner effective January 31, 1992 and were accepted back by petitioner, as an
    act of compassion, subject to the condition of "no work, no pay" effective March 1993 which explains why private
    respondents were allowed to draw their salaries again. Notably, the letter-request of Mr. Leyson for the payment of
    backwages and other fringe benefits in behalf of private respondents was made only in April 1993, after a Board
    Resolution accepting them back to work out of compassion and humanitarian reason. It took private respondents about
    ten months before they requested for the payment of their backwages, and the long inaction of private respondents to
    file their claim for unpaid wages cast doubts as to the veracity of their claim.
    The age-old rule governing the relation between labor and capital, or management and employee of a "fair days wage for
    a fair days labor" remains as the basic factor in determining employees wages. If there is no work performed by the
    employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally
    locked out, suspended or dismissed,[23] or otherwise illegally prevented from working,[24] a situation which we find is not
    present in the instant case. It would neither be fair nor just to allow private respondents to recover something they have
    not earned and could not have earned because they did not render services at the Kalibo office during the stated period.
    Finally, we hold that public respondent erred in merely relying on the computations of compensable services submitted by
    private respondents. There must be competent proof such as time cards or office records to show that they actually
    rendered compensable service during the stated period to entitle them to wages. It has been established that the
    petitioners business office was transferred to Kalibo and all its equipments, records and facilities were transferred thereat
    and that it conducted its official business in Kalibo during the period in question. It was incumbent upon private
    respondents to prove that they indeed rendered services for petitioner, which they failed to do. It is a basic rule in
    evidence that each party must prove his affirmative allegation. Since the burden of evidence lies with the party who
    asserts the affirmative allegation, the plaintiff or complainant has to prove his affirmative allegations in the complaint and
    the defendant or the respondent has to prove the affirmative allegation in his affirmative defenses and counterclaim.[25]
    WHEREFORE, in view of the foregoing, the petition for CERTIORARI is GRANTED. Consequently the decision of public
    respondent NLRC dated April 20, 1995 and the Resolution dated July 28, 1995 in NLRC Case No. V-0143-94 are hereby
    REVERSED and SET ASIDE for having been rendered with grave abuse of discretion amounting to lack or excess of
    jurisdiction. Private respondents complaint for payment of unpaid wages before the Labor Arbiter is DISMISSED.
    SO ORDERED.
    SECOND DIVISION
    [G.R. No. 114734. March 31, 2000]
    VIVIAN Y. IMBUIDO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL
    INFORMATION SERVICES, INC. and GABRIEL LIBRANDO, respondents.
    DECISION
    BUENA, J.:
    This special civil action for certiorari seeks to set aside the Decision[1] of the National Labor Relations Commission (NLRC)
    promulgated on September 27, 1993 and its Order dated January 11, 1994, which denied petitioners motion for
    reconsideration. Scslx
    Petitioner was employed as a data encoder by private respondent International Information Services, Inc., a domestic
    corporation engaged in the business of data encoding and keypunching, from August 26, 1988 until October 18, 1991
    when her services were terminated. From August 26, 1988 until October 18, 1991, petitioner entered into thirteen (13)
    separate employment contracts with private respondent, each contract lasting only for a period of three (3) months. Aside
    from the basic hourly rate, specific job contract number and period of employment, each contract contains the following
    terms and conditions: Slxsc
    "a. This Contract is for a specific project/job contract only and shall be effective for the period covered as
    above-mentioned unless sooner terminated when the job contract is completed earlier or withdrawn by
    client, or when employee is dismissed for just and lawful causes provided by law. The happening of any
    of these events will automatically terminate this contract of employment. Slxmis
    "b. Subject shall abide with the Companys rules and regulations for its employees attached herein to form
    an integral part hereof.
    "c. The nature of your job may require you to render overtime work with pay so as not to disrupt the
    Companys commitment of scheduled delivery dates made on said job contract." [2]
    In September 1991, petitioner and twelve (12) other employees of private respondent allegedly agreed to the filing of a
    petition for certification election involving the rank-and-file employees of private respondent.[3] Thus, on October 8, 1991,
    Lakas Manggagawa sa Pilipinas (LAKAS) filed a petition for certification election with the Bureau of Labor Relations (BLR),
    docketed as NCR-OD-M-9110-128.[4]
    Subsequently, on October 18, 1991, petitioner received a termination letter from Edna Kasilag, Administrative Officer of
    private respondent, allegedly "due to low volume of work."[5]
    Thus, on May 25, 1992, petitioner filed a complaint for illegal dismissal with prayer for service incentive leave pay and
    13th month differential pay, with the National Labor Relations Commission, National Capital Region, Arbitration Branch,
    docketed as NLRC-NCR Case No. 05-02912-92.[6]
    In her position paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner alleged that her
    employment was terminated not due to the alleged low volume of work but because she "signed a petition for
    certification election among the rank and file employees of respondents," thus charging private respondent with
    committing unfair labor practices. Petitioner further complained of non-payment of service incentive leave benefits and
    underpayment of 13th month pay.[7]
    On the other hand, private respondent, in its position paper filed on July 16, 1992, maintained that it had valid reasons to
    terminate petitioners employment and disclaimed any knowledge of the existence or formation of a union among its rank-
    and-file employees at the time petitioners services were terminated. [8] Private respondent stressed that its business "relies
    heavily on companies availing of its services. Its retention by client companies with particular emphasis on data encoding
    is on a project to project basis,"[9] usually lasting for a period of "two (2) to five (5) months." Private respondent further
    argued that petitioners employment was for a "specific project with a specified period of engagement." According to
    private respondent, "the certainty of the expiration of complainants engagement has been determined at the time of their
    (sic) engagement (until 27 November 1991) or when the project is earlier completed or when the client withdraws," as
    provided in the contract.[10] "The happening of the second event [completion of the project] has materialized, thus, her
    contract of employment is deemed terminated per the Brent School ruling." [11] Finally, private respondent averred that
    petitioners "claims for non-payment of overtime time (sic) and service incentive leave [pay] are without factual and legal
    basis."[12]
    In a decision dated August 25, 1992, labor arbiter Raul T. Aquino, ruled in favor of petitioner, and accordingly ordered
    her reinstatement without loss of seniority rights and privileges, and the payment of backwages and service incentive
    leave pay. The dispositive part of the said decision reads: Missdaa
    "WHEREFORE, responsive to the foregoing, judgment is hereby rendered ordering respondents to
    immediately reinstate complainant [petitioner herein] as a regular employee to her former position
    without loss of seniority rights and privileges and to pay backwages from the time of dismissal up to the
    date of this decision, the same to continue until complainant [s] [petitioner herein] actual reinstatement
    from (sic) the service. Respondents are likewise ordered to pay complainant [petitioner herein] service
    incentive leave pay computed as follows: Sdaadsc
    Backwages:
    10/18/91 8/25/92 = 10.23 mos.
    P118.00 x 26 x 10.23 mos. = P31, 385.64
    Service Incentive Leave Pay
    1989 = P89.00 x 5 days = P445.00
    1990 = 106 x 5 days = P530.00
    1991 = 118 x 5 days = P590.00
    P 1, 565.00
    Total P32, 950.64
    SO ORDERED."[13]
    In his decision, the labor arbiter found petitioner to be a regular employee, ruling that "[e]ven if herein complainant
    [petitioner herein] had been obstensively (sic) hired for a fixed period or for a specific undertaking, she should be
    considered as [a] regular employee of the respondents in conformity with the provisions (sic) laid down under Article 280
    of the Labor Code,"[14] after finding that "[i]t is crystal clear that herein complainant [petitioner herein] performed a job
    which are (sic) usually necessary or desirable in the usual business of respondent [s]." [15] The labor arbiter further
    denounced "the purpose behind the series of contracts which respondents required complainant to execute as a condition
    of employment was to evade the true intent and spirit of the labor laws for the workingmen." [16] Furthermore, the labor
    arbiter concluded that petitioner was illegally dismissed because the alleged reason for her termination, that is, low
    volume of work, is "not among the just causes for termination recognized by law," [17] hence, he ordered her immediate
    reinstatement without loss of seniority rights and with full backwages. With regard to the service incentive leave pay, the
    labor arbiter decided "to grant the same for failure of the respondents to fully controvert said claims." [18] Lastly, the labor
    arbiter rejected petitioners claim for 13th month pay "since complainant [petitioner herein] failed to fully substantiate and
    argued (sic) the same."[19]
    On appeal, the NLRC reversed the decision of the labor arbiter in a decision[20] promulgated on September 27, 1993, the
    dispositive part of which reads:
    "WHEREFORE, the appealed decision is hereby set aside. The complaint for illegal dismissal is hereby
    dismissed for being without merit. Complainants [petitioner herein] claim for service incentive leave pay
    is hereby remanded for further arbitration.
    SO ORDERED."[21]
    The NLRC ruled that "[t]here is no question that the complainant [petitioner herein], viewed in relation to said Article 280
    of the [Labor] Code, is a regular employee judging from the function and/or work for which she was hired. xxx xxx. But
    this does not necessarily mean that the complainant [petitioner herein] has to be guaranteed a tenurial security beyond
    the period for which she was hired."[22] The NLRC held that the complainant [petitioner herein], while hired as a regular
    worker, is statutorily guaranteed, in her tenurial security, only up to the time the specific project for which she was hired
    is completed."[23] Hence, the NLRC concluded that "[w]ith the specific project "at RCBC 014" admittedly completed, the
    complainant [petitioner herein] has therefore no valid basis in charging illegal dismissal for her concomittant (sic)
    dislocation."[24]
    In an Order dated January 11, 1994, the NLRC denied petitioners motion for reconsideration. [25]
    In this petition for certiorari, petitioner, for and in her behalf, argues that (1) the public respondent "committed grave
    abuse of discretion when it ignored the findings of Labor Arbiter Raul Aquino based on the evidence presented directly
    before him, and when it made findings of fact that are contrary to or not supported by evidence," [26] (2) "[p]etitioner was
    a "regular employee," NOT a "project employee" as found by public respondent NLRC," [27] (3) "[t]he termination of
    petition (sic) was tainted with unfair labor practice,"[28] and (4) the public respondent "committed grave abuse of
    discretion in remanding the awarded service incentive leave pay for further arbitration."[29]
    The petition is impressed with merit. Sdaadsc
    We agree with the findings of the NLRC that petitioner is a project employee. The principal test for determining whether
    an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a
    specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for
    that project.[30] A project employee is one whose employment has been fixed for a specific project or undertaking, the
    completion or termination of which has been determined at the time of the engagement of the employee or where the
    work or service to be performed is seasonal in nature and the employment is for the duration of the season. [31] In the
    instant case, petitioner was engaged to perform activities which were usually necessary or desirable in the usual business
    or trade of the employer, as admittedly, petitioner worked as a data encoder for private respondent, a corporation
    engaged in the business of data encoding and keypunching, and her employment was fixed for a specific project or
    undertaking the completion or termination of which had been determined at the time of her engagement, as may be
    observed from the series of employment contracts[32]between petitioner and private respondent, all of which contained a
    designation of the specific job contract and a specific period of employment.
    However, even as we concur with the NLRCs findings that petitioner is a project employee, we have reached a different
    conclusion. In the recent case of Maraguinot, Jr. vs. NLRC,[33] we held that "[a] project employee or a member of a work
    pool may acquire the status of a regular employee when the following concur: Rtcspped
    1) There is a continuous rehiring of project employees even after [the] cessation of a project; [34] and
    2) The tasks performed by the alleged "project employee" are vital, necessary and indispensable to the
    usual business or trade of the employer.[35]"
    The evidence on record reveals that petitioner was employed by private respondent as a data encoder, performing
    activities which are usually necessary or desirable in the usual business or trade of her employer, continuously for a
    period of more than three (3) years, from August 26, 1988 to October 18, 1991[36] and contracted for a total of thirteen
    (13) successive projects. We have previously ruled that "[h]owever, the length of time during which the employee was
    continuously re-hired is not controlling, but merely serves as a badge of regular employment." [37] Based on the foregoing,
    we conclude that petitioner has attained the status of a regular employee of private respondent.
    At this point, we reiterate with emphasis that: Korte
    "xxx xxx
    "At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a
    duty to re-hire a project employee even after completion of the project for which he was hired. The
    import of this decision is not to impose a positive and sweeping obligation upon the employer to re-hire
    project employees. What this decision merely accomplishes is a judicial recognition of the
    employment status of a project or work pool employee in accordance with what is fait
    accompli, i.e., the continuous re-hiring by the employer of project or work pool employees
    who perform tasks necessary or desirable to the employer's usual business or trade. Let it not
    be said that this decision "coddles" labor, for as Lao[38] has ruled, project or work pool employees
    who have gained the status of regular employees are subject to the "no work-no pay"
    principle, to repeat:
    "A work pool may exist although the workers in the pool do not receive salaries and are free to seek
    other employment during temporary breaks in the business, provided that the worker shall be available
    when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up
    can likewise be applied to project workers insofar as the effect of temporary cessation of work is
    concerned. This is beneficial to both the employer and employee for it prevents the unjust situation of
    "coddling labor at the expense of capital" and at the same time enables the workers to attain the status
    of regular employees. Sclaw
    "The Court's ruling here is meant precisely to give life to the constitutional policy of strengthening the
    labor sector, but, we stress, not at the expense of management. Lest it be misunderstood, this ruling
    does not mean that simply because an employee is a project or work pool employee even outside the
    construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is that
    once a project or work pool employee has been: (1) continuously, as opposed to
    intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2)
    these tasks are vital, necessary and indispensable to the usual business or trade of the
    employer, then the employee must be deemed a regular employee, pursuant to Article 280 of
    the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor
    laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order
    No. 19, hence allowing the prevention of acquisition of tenurial security by project or work
    pool employees who have already gained the status of regular employees by the employer's
    conduct."[39] (emphasis supplied)
    Being a regular employee, petitioner is entitled to security of tenure and could only be dismissed for a just or authorized
    cause, as provided in Article 279 of the Labor Code, as amended: Sclex
    "Art. 279. Security of Tenure In cases of regular employment, the employer shall not terminate the
    services of an employee except for a just cause or when authorized by this Title. An employee who is
    unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
    privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
    equivalent computed from the time his compensation was withheld from him up to the time of his actual
    reinstatement."
    The alleged causes of petitioners dismissal (low volume of work and belatedly, completion of project) are not valid causes
    for dismissal under Articles 282 and 283 of the Labor Code. Thus, petitioner is entitled to reinstatement without loss of
    seniority rights and other privileges, and to her full backwages, inclusive of allowances, and to her other benefits or their
    monetary equivalent computed from the time her compensation was withheld from her up to the time of her actual
    reinstatement. However, complying with the principles of "suspension of work" and "no work, no pay" between the end of
    one project and the start of a new one, in computing petitioners backwages, the amounts corresponding to what could
    have been earned during the periods from the date petitioner was dismissed until her reinstatement when private
    respondent was not undertaking any project, should be deducted. Xlaw
    With regard to petitioners claim for service incentive leave pay, we agree with the labor arbiter that petitioner is entitled
    to service incentive leave pay, as provided in Article 95 of the Labor Code, which reads:
    "Article 95 Right to service incentive leave
    (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service
    incentive leave of five days with pay.
    xxx xxx xxx."
    Having already worked for more than three (3) years at the time of her unwarranted dismissal, petitioner is undoubtedly
    entitled to service incentive leave benefits, computed from 1989 until the date of her actual reinstatement. As we ruled in
    the recent case of Fernandez vs. NLRC,[40] "[s]ince a service incentive leave is clearly demandable after one year of
    service whether continuous or broken or its equivalent period, and it is one of the "benefits" which would have accrued if
    an employee was not otherwise illegally dismissed, it is fair and legal that its computation should be up to the date of
    reinstatement as provided under Section [Article] 279 of the Labor Code, as amended, which reads: Xsc
    "ART. 279. Security of Tenure. An employee who is unjustly dismissed from work shall be entitled to
    reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
    allowances, and to his other benefits or their monetary equivalent computed from the time his
    compensation is withheld from him up to the time of his actual reinstatement." (emphasis supplied).
    WHEREFORE, the instant petition is GRANTED. The assailed decision of the National Labor Relations Commission in
    NLRC NCR CA No. 003845-92 dated September 27, 1993, as well as its Order dated January 11, 1994, are hereby
    ANNULLED and SET ASIDE for having been rendered with grave abuse of discretion, and the decision of the Labor Arbiter
    in NLRC NCR Case No. 05-02912-92 is REINSTATED with MODIFICATION as above-stated, with regard to the
    computation of back wages and service incentive leave pay. Sc
    SO ORDERED.
    EN BANC
    [A.M. No. P-99-1316. August 31, 2001]
    KENNETH S. NEELAND, complainant, vs. ILDEFONSO M. VILLANUEVA, JR., Clerk of Court and Ex-
    Officio Provincial Sheriff, Bacolod City, and NELSON N. ABORDAJE, Sheriff III, Municipal Trial Court
    in Cities, Br. 4, Bacolod City, respondent.
    RESOLUTION
    BELLOSILLO, J.:
    This resolves the prayer of respondent Ildefonso M. Villanueva, Jr., to be paid his "back wages and other economic
    benefits from the time of my 'dismissal' in November 1989 to my reinstatement x x x" contained in his letter addressed to
    the Honorable Chief Justice Hilario G. Davide, Jr. dated 22 August 2000.
    Our first task is to ensure that justice is done to our selfless workers in our own turf - for an efficient and wholesome
    administration of justice. For, without the massive support and dedicated service of our more than twenty-five thousand
    men and women in the judiciary who toil day in and day out, even at night when necessary, the swift delivery of justice
    to our countrymen who thirst for immediate and dynamic response [1] cannot be realized.
    We are presented in this case the golden opportunity to transform our lavish praises and promises into an inspiring
    and meaningful action. It would be beyond just doing charity at home or promulgating a hometown decision; rather, at
    the core lies the option, to paraphrase then U.S. Chief Justice John Edwin Marshall, to do complete justice or justice by
    halves.
    Modifying our Resolution of 29 October 1999 dismissing respondent Clerk of Court and Ex-officio Provincial Sheriff
    Villanueva, Jr., from the service, our subsequent Resolution of 8 August 2000 only found him liable to pay a fine. While
    appreciative in the name of fairness that the penalty of dismissal from service has been discarded, complete justice, and
    not justice by halves, dictates that he be penalized only with the appropriate sanction.For, to deny him the back salaries
    and other economic benefits for the period he was forced out of work by our 29 October 1999 Resolution dismissing him
    from the service would be to re-validate this egregious penalty that we have since reversed, and effectively impose upon
    him another penalty - now estimated to be P300,000.00 more or less - in addition to the singular sentence of fine that he
    has to suffer.
    We bear in mind that respondent Villanueva, Jr., was forced by us out of his job - without leaving him any choice -
    even before he could file a motion for reconsideration. It is unfair that other civil service employees are given the benefit
    of stay of execution of penalties involving dismissal from work, or even mere suspension, and how we have several times
    affirmed such stay of execution to be a matter of due process. Yet, for our own employees whom we pay tribute during
    anniversaries to show our profound gratefulness we have been truly unkind in immediately effecting their dismissal from
    work, and worse, of unwittingly punishing them with more by depriving them of their back salaries and other economic
    benefits, even after they have been found liable only for acts that warrant the imposition of a mere fine.
    This case in sum boils down to an appeal to our sense of fairness and will to render justice - "complete justice and
    not justice in halves." This is an attribute of our "genuflection to a century of judicial devotion." Let us go beyond lip
    service and, for the record, place the taxpayers' money where justice ought to be served. It is here where we can find the
    firm resolve to keep the judicial torch alive.
    We rewind to better grasp the facts: On 16 December 1996 Kenneth S. Neeland filed with the Office of the Chief
    Justice a complaint against Atty. Ildefonso M. Villanueva, Jr., Clerk of Court and Ex-Officio Provincial Sheriff of the
    Regional Trial Court of Bacolod City, and Nelson N. Abordaje, Sheriff III of the Municipal Trial Court in Cities, Branch
    4, Bacolod City, for gross misconduct.
    The complaint arose from the foreclosure of a chattel mortgage on a Toyota sedan owned by the mortgagor,
    Kenneth S. Neeland, to satisfy an obligation of P20,000.00 to the mortgagee, Sugarland Motor Sales.
    A year before, or on 8 December 1995, Sugarland Motor Sales filed with the City Sheriff, Bacolod City, a request for
    foreclosure of the chattel mortgage constituted on the mortgaged vehicle of Kenneth S. Neeland, and its sale at public
    auction to satisfy his obligation to Sugarland Motor Sales.Acting upon the request, City Sheriff Nelson Abordaje seized the
    motor vehicle and issued a notice of auction sale for 6 February 1996 at the Daewoo Cars compound, Lacson Street,
    Bacolod City. Accordingly, on the scheduled date, respondent Abordaje proceeded to conduct the auction sale. The seized
    vehicle was sold to the highest bidder, Sugarland Motor Sales, for P40,000.00. Sheriff Abordaje did not, however, turn
    over to Kenneth Neeland the remaining balance between the sum at which the vehicle was sold and the obligation sought
    to be satisfied plus expenses of sale amounting to P20,000.00.On the date of the sale, Clerk of Court Ildefonso M.
    Villanueva, Jr., as ex-officio Provincial Sheriff, issued a certificate of sale conveying the motor vehicle to Sugarland Motor
    Sales. Mortgagor Neeland was not present during the auction sale.
    The investigating judge, Executive Judge Anastacio I. Lobaton, in his Report dated 21 April 1998, found that the
    auction sale was conducted in accordance with the prescribed rules and regulations, and "respondent Abordaje was duty
    bound to demand and collect from the highest bidder, the mortgagee, the aforesaid difference amounting to P20,000.00
    and deposit the same to (sic) the Office of the Clerk of Court for safekeeping since the mortgagor was not around to
    claim it. When the highest bidder failed to turn over the said difference, it would have been wise and proper for
    respondent Abordaje to have rendered a report on the matter to his superior, respondent Villanueva, Jr." Nonetheless,
    the Executive Judge held that respondent Villanueva, Jr. was liable for the negligence of his subordinate in failing to turn
    over the balance of the proceeds of the auction sale to the mortgagor.Consequently, he recommended that respondents
    be reprimanded with warning.
    The matter was thereafter referred to the Court Administrator for evaluation, report and recommendation. In his
    Memorandum dated 11 May 1999, Court Administrator Alfredo L. Benipayo sustained the investigating judge and declared
    that the chattel mortgage was validly foreclosed, absent any convincing proof of forgery. The Court Administrator agreed
    with the findings of the investigating judge that both respondents were liable for not demanding from the highest bidder,
    Sugarland Motor Sales, the difference between the bid price and the obligation of complainant in the amount
    of P20,000.00, further holding that such omission did not amount to gross misconduct.
    Unfortunately, we disagreed with the recommendation of the Executive Judge and the Court Administrator. Instead,
    we found Sheriff Abordaje's failure to turn over to Kenneth Neeland the excess of the bid price as amounting to gross
    misconduct prejudicial to the best interest of the service. Thus we ruled that "the officer who conducted the foreclosure
    must demand and actually receive the cash proceeds of the auction sale from the highest bidder and turn over the
    balance to the mortgagor. It was, therefore, irregular for the sheriff not to demand and receive the entire bid price in
    cash from the winning bidder, or at the very least, to demand the excess amount and turn it over to the mortgagor." As
    regards Clerk of Court Villanueva, Jr., we stated, "[n]either can respondent Villanueva, Jr., escape responsibility for his
    failure to supervise Sheriff Abordaje in the performance of the latter's duties. Clerk of Court Villanueva Jr. issued a
    certificate of sale without ascertaining that the balance of P20,000.00 due from winning bidder Sugarland Motor Sales
    was duly turned over and accounted to the mortgagor. Respondent Villanueva, Jr., a lawyer occupying a position of
    responsibility, must be alert at all times to anhonest conduct of foreclosures of chattel mortgages." Both were thus found
    to be guilty of gross misconduct in the performance of their duties and meted the penalty of "DISMISSAL from the
    service, with forfeiture of all leave credits and retirement benefits, if any, and with prejudice to re-instatement or re-
    employment in any agency, branch or instrumentality of the government, including government-owned and controlled
    corporations." This Resolution dismissing respondents was immediately enforced, and so they were barred from working
    even before they could move for a reconsideration.
    We relented to the motion for reconsideration of respondent Villanueva, Jr., upon our finding that "[a]fter a review
    of the records, we note that this is the first administrative complaint against respondent in his long years of service with
    the judiciary. He has also introduced various innovations in court to increase the efficiency of the employees." The
    offense was accordingly downgraded to simple neglect of duty, and he was sentenced to pay a FINE of P5,000.00 with a
    warning that a repetition of the same or similar offense would be dealt with more severely. Notwithstanding this
    disposition of the motion for reconsideration, we nevertheless sustained our finding that Clerk of Court Villanueva, Jr.,
    was remiss in his duties as ex-officio provincial sheriff for failing to oversee the rightful turnover to the mortgagor of the
    balance of the proceeds of the auction sale to the mortgagee.
    Respondent Clerk of Court now asks for back salaries and other economic benefits withheld from him from the time
    of his dismissal up to hisreinstatement. The Financial Management Service (FMS) objected to the demand, opining that
    the demand for payment of back salaries had no legal basis on the principle of "no work, no pay." Atty. Eden T.
    Candelaria, Deputy Clerk of Court and Chief Administrative Officer of this Court, agreed with the recommendation of the
    FMS that Clerk of Court Villanueva, Jr. should not be paid back salaries and other economic benefits since he was not
    completely exonerated of the accusation against him; on the contrary, was found guilty of neglect of duty.
    There are two (2) items that must be stressed to grant respondent Clerk of Court his prayer for the payment of his
    back salaries and other economic benefits:
    First, even under the extant rule on the matter, he is clearly entitled to such demand. For one, the immediate
    execution of the order of dismissal was premature. There being no rule to the contrary, he was entitled to file a motion
    for reconsideration, and corollarily, the suspension of the enforcement of the order of dismissal pending resolution of his
    motion. For another, the physical impossibility of effecting reinstatement for the period of employment that was long
    gone by reasons not attributable to him entitles him to restitution in the form of back salaries and other economic
    benefits. For, otherwise, he would find himself unfortunately punished twice for an offense that is properly and singularly
    penalized only by a fine.
    Second, the grant of back salaries and other economic benefits hews well to an employee's aspirations for moral
    justice; precisely, recourse may be had to our corrective powers to avoid a right granted in law from being rendered
    illusory in fact. For, how could we account for the additional penaltywhen we ourselves declared that the proper penalty
    under the circumstances was only a fine? For sure, we can hark back to the presumptive validity of our earlier Resolution
    dismissing respondent Clerk of Court, but this presumption does not hold true when we are not being taken to task for
    the Resolution that we made but simply being asked to restore what in the first place was due him. The demand is plainly
    honestly and firmly one of justice.
    Our Resolution dismissing respondent Villanueva, Jr. from the service for gross misconduct was not justified. He did
    not commit any act that would constitute misconduct. He was nonetheless found guilty of simple neglect of duty (of
    which he was not even charged!) for which he was fined P5,000.00.
    With emphasis on the law, the present case clearly falls under a situation of unjustified dismissal from work, which
    lays the basis for the claim for back salaries and other economic benefits. Our Resolution dated 29 October 1999
    dismissing respondent Villanueva, Jr., from the service was immediately enforced despite his right to file a motion for
    reconsideration. We erroneously treated him like a judge who was immediately thrown out of his seat as soon as he was
    declared guilty of gross misconduct to prevent him from committing more injustices in the bench and "bastardizing the
    judiciary." But respondent Villanueva, Jr., is not a judge but a mere Clerk of Court and Ex-officio Provincial Sheriff. We
    emphasize that the existence of such right defeats any authority to pursue immediate execution of the Resolution. Under
    case law, to which we arduously adhere, his dismissal from the service pending his motion for reconsideration requires
    the payment of back salaries and other economic benefits to compensate for such unjust action. In Abellera v. City of
    Baguio,[2] this Court held -
    The rule on payment of back salaries during the period of suspension of a member of the civil service who is
    subsequently ordered reinstated, is already settled in this jurisdiction. Such payment of salaries corresponding to
    the period when an employee is not allowed to work may be decreed not only if he is found innocent of the
    charges which caused his suspension (Sec. 35, RA 2260), but also when the suspension is unjustified.
    In the present case, upon receipt of the decision of the Civil Service Commissioner finding petitioner-appellant guilty, but
    even before the period to appeal had expired, respondents dismissed the latter from the service and another one was
    appointed to replace him. The separation of petitioner before the decision of the Civil Service Commissioner
    had become final was evidently premature. Respondents should have realized that the employee still had
    the right to appeal the Commissioner's decision to the Civil Service Board of Appeals within a specified
    period and the possibility of that decision being reversed or modified. As it did happen on such appeal by the
    petitioner, the penalty imposed by the Commissioner was reduced by the reviewing Board to only 2 months
    suspension. And yet, by respondents' action, petitioner was deprived of work for more than 2 years. Clearly, Abellera's
    second suspension from office, from July 10, 1961 to November 10, 1963, was unjustified, and the
    payment of the salaries corresponding to said period is, consequently, proper. Otherwise, Abellera would, in
    effect, suffer a suspension longer than that meted him by the Civil Service Board of Appeals ( emphasis supplied).
    The same ruling was rendered in Tan v. Gimenez[3] -
    The appeal taken by the petitioner to the Civil Service Board of Appeals from the decision of the Commissioner of Civil
    Service finding him guilty of grave misconduct and requiring him to resign from the service with prejudice to
    reinstatement precluded the execution of the decision of the Commissioner of Civil Service. In other words, the
    decision did not become final and executory. The decision of the Civil Service Board of Appeals reversing
    that of the Commissioner of Civil Service and absolving the petitioner from the charge was not reversed or
    modified by the President.It, therefore, became the final decision on the petitioner's case. Consequently,
    the petitioner's removal from office was not in accordance with law; his reinstatement became a ministerial duty
    of the proper authority; and the payment of back salary was merely incidental to reinstatement ( emphasis supplied).
    Execution of decisions takes place only when they become final and executory, and a judgment becomes "final and
    executory" by operation of law.[4]Execution of decisions before such stage is not allowed unless specifically permitted by
    statute.[5] Thus, in quasi-judicial agencies, "[w]here the legislature has seen fit to declare that the decision of the quasi-
    judicial agency is immediately final and executory pending appeal, the law expressly so provides." In the present case,
    neither our Resolution dismissing from the service Clerk of Court Villanueva, Jr., nor any rule promulgated by this Court in
    connection with administrative disciplinary proceedings deprives any party the opportunity to move for reconsideration, or
    similarly, decrees the immediate execution of decisions or resolutions. Thus, we stress that the immediate dismissal of
    respondent Villanueva, Jr., was unwarranted on the ground of prematurity of execution, hence, he must be entitled to
    back salaries and other economic benefits as mandated in the cases of Abellera and Gimenez.
    We come to moral justice - to our sense of fairness. Verily, every government employee found to be dishonest in the
    performance of his duties, after proper hearing, should get the full measure of punishment. But this should not be
    confused with imposing sanctions in a manner far beyond that fixed in our Resolution dated 8 August 2000. The penalty
    imposed upon Clerk of Court Villanueva, Jr., was a fine of P5,000.00, so its execution could not go beyond what was so
    determined. While he may have done acts amounting only to an offense penalized with a fine, he ended up suffering
    suspension or dismissal for the duration of his motion for reconsideration, an additional penalty that was not
    commensurate with simple neglect of duty - the act he was not charged with but found liable for.
    In requiring Clerk of Court Villanueva, Jr., to pay a fine, we did not at all indicate that he should have also suffered
    the penalty of losing his job - and hence of the emoluments attached thereto - for the time that he was dismissed from
    the service. The fine was the only penalty imposed on him for his alleged failure to properly supervise Sheriff
    Abordaje. Therefore, respondent Villanueva, Jr., should not be punished with more than what has been imposed, i.e.,
    fine; otherwise, the supplanting of the charge of gross misconduct with simple neglect of duty and the consequent
    imposition of a much lighter penalty from dismissal from the service to a mere fine would be worthless. In effect,
    respondent Villanueva, Jr., is being punished twice since the physical impossibility of reinstating him to his past and lost
    period of employment would have already deprived him of salaries and other economic benefits, a loss that is
    perpetuated by failing to pay him salaries for the same period of time. This is an improper rollover of penalties as we held
    in Bautista v. Peralta[6] -
    In the particular case of petitioner herein, the penalty imposed by the Civil Service Board of Appeals was in effect served
    by him during the first two months of his preventive suspension. His reinstatement during the rest of the period
    was no longer physically possible, but there is no inherent obstacle to his receiving the back salaries
    corresponding to such period. Denial of the back salaries would amount to an amendment of the decision
    of the Civil Service Board of Appeals, in effect increasing the two-month suspension meted out to him and
    converting the preventive suspension into the penalty itself. It would then make no difference, as far as
    petitioner is concerned, whether the Board had suspended him for two months or for two years, or indeed for any length
    of time, provided it did not exceed the period of preventive suspension already undergone. These implications cannot
    reasonably be read into the Board's decision in this case (emphasis supplied).
    It must be pointed out that restitution is strongly mandated in the present case since the dismissal order against
    Clerk of Court Villanueva, Jr. was found to be improper. The reconsideration of the initial order is proof of such
    impropriety or incorrectness of our resolution of dismissal. While the immediate implementation of our order of dismissal
    may have been correct and could therefore have been legal before this was modified, the modificatory resolution
    removed completely the basis of such implementation and, as a necessary legal consequence, the effects thereof must be
    set aside and rectified.This is the essence of justice and the rule of law. As stated in Batungbakal v. National
    Development Co.,[7] "[t]o remedy the evil and wrong committed, the least that could be done is to restore to him the
    office and post of which he had been illegally deprived, and to include in that remedy or redress payment of the salary
    which he should have received during this period of illegal suspension and dismissal is far from unreasonable and unjust"
    (underscoring supplied). In point of procedural law, the payment of back salaries is not unfounded. For, in Sec. 5, Rule
    39, of the Rules of Civil Procedure, restitution is called for "in the event the executed judgment is reversed."
    Indeed, to insist on denying to respondent Villanueva, Jr., his back salaries and other economic benefits on the
    ground that he has not been completely exonerated or that he did not work, is to indulge ourselves in a tyranny of
    concepts. To adopt such formula would be to resort to circuitous arguments: he cannot be compensated because his
    dismissal was justified or because he did not work. But, for one thing, such penalty can never be justified since the facts,
    although they remain the same, only amount to an offense that is clearly not so punishable. For the record, Clerk of Court
    Villanueva, Jr. was completely exonerated in our Resolution dated 8 August 2000 of the administrative offense of gross
    misconduct with which he was charged. For this reason, we ordered his reinstatement.
    True it is that we found him negligent in the discharge of his duties (a finding that we concede although in
    conscience hardly admit), but this finding would not still have called for his dismissal from the service. At the outset, had
    we properly characterized the offense for which he is truly responsible and thereafter justly imposed the proper penalty,
    he would not have suffered the dire consequences of our first decision. In granting his claim for back salaries and other
    economic benefits, we are thus simply repairing the damage that was unduly caused him, and unless we can turn back
    the hands of time, we can do so only by restoring to him that which is physically feasible to do under the
    circumstances. Back salaries are after all meant to recover from the employer that which the employee had lost by way of
    wages as a result of his unfounded dismissal.[8]
    To be sure, it is not unprecedented to order the payment of back salaries and other economic benefits to one who
    has been harshly penalized for otherwise very negligible omissions. This principle is well entrenched in labor law, and
    there is no reason to deny civil servants of its salutary effects.After all, both are workers in our compassionate
    understanding of this term. Thus, in Sampung v. Inciong[9] we awarded full back wages to an employee who was unduly
    dismissed from work when the penalty of suspension was enough. Citing Almira v. B.F. Goodrich Philippines, Inc.,[10] we
    said therein that "[i]t would imply at the very least that where a penalty less punitive would suffice, whatever missteps
    may be committed by labor ought not to be visited with a consequence so severe. It is not only because of the law's
    concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and
    sorrows on those dependent on the wage-earner. The misery and pain attendant on the loss of jobs then could be
    avoided if there be acceptance of the view that under all circumstances of this case, petitioners should not be deprived of
    their means of livelihood. Nor is this to condone what had been done by them. For all this while, since private respondent
    considered them separated from the service, they had not been paid. From the strictly juridical standpoint, it cannot be
    strongly stressed, to follow Davis in his masterly work, Discretionary Justice, that where a decision may be made to rest
    on informed judgment rather than rigid rules, all the equities of the case must be accorded their due weight. Finally, labor
    law determinations, to quote from Bultmann, should be not only secundum rationem but also secundum caritatem."
    We also cannot deny back salaries and other economic benefits on the ground that respondent Clerk of Court did not
    work. For the principle of "no work, no pay" does not apply when the employee himself was forced out of job. As ruled
    sympathetically in University of Pangasinan Faculty Union v. University of Pangasinan, [11] the "no work, no pay" principle
    does not apply where the employee is "constrained to take mandatory leave from work," and for this, Clerk of Court
    Villanueva, Jr. cannot altogether be faulted or begrudged for asserting and claiming that which is due him under the
    law. Indeed, it is not always true that back salaries are paid only when work was done. Thus in Serrano vs. NLRC,[12] the
    employer is liable for back wages when he fails to give notice to the employee before the latter is dismissed from work,
    regardless of fault. Back wages too are paid to an employee who is merely reinstated in the payroll under Art. 223 of the
    Labor Code which provides that "[i]n any event, the decision of the Labor Arbiter reinstating a dismissed or separated
    employee, insofar as the reinstated aspect is concerned, shall be immediately executory, even pending appeal. The
    employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or
    separation or, at the option of the employer, merely reinstated in the payroll x x x x" For another, the poor employee
    could offer no work since he was forced out of work. Thus, to always require complete exoneration or performance of
    work would ultimately leave the dismissal uncompensated no matter how grossly disproportionate the penalty
    was. Clearly, it does not serve justice to simply restore the dismissed employee to his position and deny him his claim for
    back salaries and other economic benefits on these grounds. We would otherwise be serving justice in halves.
    To be sure, the act of respondent Villanueva, Jr., for which he stands charged - failing to diligently supervise his
    subordinate - did not constitute gross misconduct which would have justified separation from the service; neither was it
    as evil as the dishonest acts involved in the jurisprudence of old whereby the payment of back salaries would certainly be
    odious and insulting to the sensibilities of honest workers. What is at stake here is a simple case of isolated oversight,
    which does not call for dismissal from the service. If it were, then most civil servants would by now be rotting away for
    being out of work. The rule has thus been instituted that "x x x [a]ll heads of offices have to rely to a reasonable extent
    on their subordinates and on the good faith of those who prepare bids, purchase supplies, or enter into negotiations x x x
    x There has to be some added reason why he should examine each voucher in such detail." [13] The fact is that Clerk of
    Court Villanueva, Jr., like other clerks of court, is saddled with numerous documents, letters, memoranda,
    vouchers, and supporting papers that routinely pass through his desk for his signature. To miss out on any one of them,
    after good faith reliance upon subordinates is done, would not humanly be possible to avoid. The important thing is that
    such omission could be easily and conveniently remedied at no expense to any party. Surely, to visit such failing with
    dismissal from service, or with denial of back salaries that respondent should have been receiving in the first place, is
    most unjust and unfair.
    It is rather unfortunate that the Court in countless occasions has readily bent backwards to accommodate workers
    perceived to have been unduly deprived of their rights under the Labor Code. Yet this same Court is now inordinately
    strict with its own people to such an extent that a totally different set of rules is being applied. It must be repeatedly
    stressed that respondent Villanueva, Jr. was completely exonerated from the charge of gross misconducthence the
    setting aside of the order of dismissal. What does this mean? Under Labor Laws, the aggrieved employee is entitled to
    back wages and other benefits which he should have earned if he was not terminated. The objective is to restore him as
    far as practicable to the same state he was in before he was unjustifiably dismissed. Should our own people in the
    Judiciary deserve any less? Are they several notches below the ordinary workers that they should not be given the same
    consideration? The oft-cited principle of "no work, no pay" invoked here should be reexamined as to its application since
    it smacks of arbitrariness and unconcern, given the present factual milieu.
    It is interesting to note that at the time the foreclosure sale was effected the rule then prevailing, SC - AO No. 3 (19
    October 1994), was that the responsibility for signing and issuing certificates of sale devolved upon the Office of the
    Sheriff, although subject to the approval of the Executive Judge, or in his absence, the Vice-Executive Judge. This rule
    was subsequently amended by SC - Adm. Circ. No. 3-98 (5 February 1998) whereby the duty of signing and issuing
    certificates of sale still devolved upon the Office of the Sheriff, but the Clerk of Court as Ex-Officio Sheriff was tasked only
    with the duty of receiving "a quarterly report to include all foreclosure sales he has conducted, dates of the auction sales,
    descriptions of the properties, sale prices, names of the highest bidders, numbers of the official receipts issued for the
    fees paid, and amounts paid. The Clerk of Court shall certify the report and submit the same to the Financial Management
    Office, Office of the Court Administrator, within fifteen (15) days after the end of each quarter," and supervise "the work
    of the implementing sheriffs in connection with extrajudicial foreclosures."
    Significantly, the express directive to Clerks of Court to sign and issue certificates of sale came only upon the
    promulgation of A.M. No. 99-10-05-0 (28 December 1999) expressly amending the two (2) previous orders of this
    Court, viz:
    Resolution Re: Procedure in Extra-Judicial Foreclosure of Mortgages; Administrative Circular # 3-98 of 05 February 1998
    amended by Resolution AM # 99-10-05-0; Administrative Order # 3 dated October 19, 1984 amended by Resolution AM
    # 99-10-05-0; Auction Sale at least two (2) participating bidders; Extra-judicial Foreclosure of Mortgage Procedure;
    Foreclosure of property in different locations covering one indebtedness. -
    Gentlemen:
    Quoted hereunder for your information is a resolution of the Court En Banc dated 14 DECEMBER 1999 (A.M. No. 99-10-
    05-0):
    PROCEDURE IN EXTRA-JUDICIAL FORECLOSURE OF MORTGAGE
    In line with the responsibility of an Executive Judge under Administrative Order No. 6, dated June 30, 1975, for the
    management of courts within his administrative area, included in which is the task of supervising directly the work of the
    Clerk of Court, who is also the Ex-Officio Sheriff, and his staff, and the issuance of commissions to notaries public and
    enforcement of their duties under the law, the following procedures are hereby prescribed in extrajudicial foreclosure of
    mortgages: x x x x 2. Upon receipt of an application for extra-judicial foreclosure of mortgage, it shall be the duty of the
    Clerk of Court to: x x x x (d) sign and issue the certificate of sale, subject to the approval of the Executive Judge, or in his
    absence, the Vice-Executive Judge; and (e) after the certificate of sale has been issued to the highest bidder, keep the
    complete records, while awaiting any redemption within a period of one (1) year from date of registration of the
    certificate of sale with the Register of Deeds concerned, after which the records shall be archived x x x x This Resolution
    amends or modifies accordingly Administrative Order No. 3 issued by then Chief Justice Enrique M. Fernando on 19
    October 1984 and Administrative Circular No. 3-98 issued by the Chief Justice Andres R. Narvasa on 5 February 1998 x x
    xx
    This clear delineation of responsibility only goes to show that during all the relevant times, Clerk of Court Villanueva,
    Jr., might not have had in the first place the responsibility for the alleged negligent act of signing and issuing the
    certificate of sale without ascertaining beforehand the existence of any excess in the amount collected from the
    foreclosure and the amount of indebtedness. The penalty of fine therefore may not have in fact been called for under this
    state of responsibilities that he is to discharge. Justice dictates that all the inconvenience caused him, not the least of
    which is the promulgation to the whole world that he had been dismissed from the service, should be mended. The only
    rectification that can be done now is the payment of his back salaries and other economic benefits.
    We can make the difference: precisely, recourse may be had to our corrective powers to avoid a right granted in law
    from being rendered illusory in fact. Clerk of Court Villanueva, Jr. was fined all right, but he ended up suffering
    suspension from work too; worse, he was deprived of his salaries and other economic benefits. We may have humored
    him at one end, only to fry him at the other. To stress once again, our Resolution of 8 August 2000 penalized him only
    with fine, and did not see it fit to include as part of his penalty his suspension from work for the period he was dismissed
    from the service on account of our Resolution of 29 October 1999, much less did it order the forfeiture of his salaries and
    other economic benefits. It behooves us to empathize with Clerk of Court Villanueva, Jr., that being out of job even for
    one day for an act that does not deserve such consequence is like being condemned to an eternity of distress. This is
    what unjust acts, after all, bring about.
    Clerk of Court Ildefonso M. Villanueva, Jr., did not commit an act of dishonesty. This we are all in agreement. He
    may have blundered in failing to properly supervise Sheriff Nelson N. Abordaje in one isolated incident. We may all
    agree on this matter too. But one important point we probably have missed out here is the clear outpouring of support
    for Clerk of Court Villanueva, Jr. His steady influence upon the lives of the people in his community shows how efficient
    and effective a court employee he has been. If one is to name thus an epitome of the countless, faceless, nameless men
    and women who, with optimism, courage and fortitude have kept the judicial torch alive, even against the hostile and
    merciless winds, we certainly can readily refer to respondent Clerk of Court Villanueva, Jr.
    It is not amiss, as it is important, to point out also that even the complainant himself, Kenneth S. Neeland, perhaps
    upon deep examination of his conscience, has come out openly in support of respondent Sheriff Nelson N. Abordaje's call
    for clemency. With more reason should this call of the complainant be made to affect favorably Clerk of Court Villanueva,
    Jr., who certainly was not the principal "offender" (if such terms be used) in the omission now sought to be
    punished. Significantly, the relevant personalities in Bacolod City have spoken for the integrity, efficiency and
    effectiveness of Clerk of Court Villanueva, Jr. We should now take time to listen to what our individual consciences for
    justice tell each of us.
    WHEREFORE, the prayer of respondent Atty. Ildefonso M. Villanueva, Jr., Clerk of Court VI and Ex-Officio Provincial
    Sheriff, Regional Trial Court, Bacolod City, to be paid his back salaries and other economic benefits to which he was
    entitled for the period of his dismissal from the service to his actual reinstatement be paid to him is GRANTED. The Office
    of the Court Administrator through the Officer-in-Charge, Financial Management Office, and all concerned are DIRECTED
    to immediately effect payment to respondent Villanueva, Jr. in accordance herewith.
    SO ORDERED.
    SECOND DIVISION
    [G.R. No. 109002. April 12, 2000]
    DELA SALLE UNIVERSITY, petitioner, vs. DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA)
    and BUENAVENTURA MAGSALIN, respondents.
    [G.R. No. 110072. April 12, 2000]
    DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS AND
    EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner, vs. DELA SALLE UNIVERSITY and BUENAVENTURA
    MAGSALIN, respondents.
    DECISION
    BUENA, J.:
    Filed with this Court are two petitions for certiorari,[1] the first petition with preliminary injunction and/or temporary
    restraining order,[2]assailing the decision of voluntary arbitrator Buenaventura Magsalin, dated January 19, 1993, as
    having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction. These two petitions have
    been consolidated inasmuch as the factual antecedents, parties involved and issues raised therein are
    interrelated.[3] Missc
    The facts are not disputed and, as summarized by the voluntary arbitrator, are as follows. On December 1986, Dela Salle
    University (hereinafter referred to as UNIVERSITY) and Dela Salle University Employees Association - National Federation
    of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular non-academic rank and file
    employees,[4] (hereinafter referred to as UNION) entered into a collective bargaining agreement with a life span of three
    (3) years, that is, from December 23, 1986 to December 22, 1989. [5] During the freedom period, or 60 days before the
    expiration of the said collective bargaining agreement, the Union initiated negotiations with the University for a new
    collective bargaining agreement[6] which, however, turned out to be unsuccessful, hence, the Union filed a Notice of
    Strike with the National Conciliation and Mediation Board, National Capital Region. [7] After several conciliation-mediation
    meetings, five (5) out of the eleven (11) issues raised in the Notice of Strike were resolved by the parties. A partial
    collective bargaining agreement was thereafter executed by the parties.[8] On March 18, 1991, the parties entered into a
    Submission Agreement, identifying the remaining six (6) unresolved issues for arbitration, namely: "(1) scope of the
    bargaining unit, (2) union security clause, (3) security of tenure, (4) salary increases for the third and fourth years [this
    should properly read second and third years][9] of the collective bargaining agreement, (5) indefinite union leave,
    reduction of the union presidents workload, special leave, and finally, (6) duration of the agreement." [10] The parties
    appointed Buenaventura Magsalin as voluntary arbitrator.[11] On January 19, 1993, the voluntary arbitrator rendered the
    assailed decision.[12] Spped
    In the said decision, the voluntary arbitrator, on the first issue involving the scope of the bargaining unit, ruled that "the
    Computer Operators assigned at the CSC [Computer Services Center], just like any other Computer Operators in other
    units, [should be] included as members of the bargaining unit,"[13] after finding that "[e]vidently, the Computer Operators
    are presently doing clerical and routinary work and had nothing to do with [the] setting of management policies for the
    University, as [may be] gleaned from the duties and responsibilities attached to the position and embodied in the CSC
    [Computer Services Center] brochure. They may have, as argued by the University, access to vital information regarding
    the Universitys operations but they are not necessarily confidential."[14] Regarding the discipline officers, the voluntary
    arbitrator "believes that this type of employees belong (sic) to the rank-and-file on the basis of the nature of their
    job."[15] With respect to the employees of the College of St. Benilde, the voluntary arbitrator found that the College of St.
    Benilde has a personality separate and distinct from the University and thus, held "that the employees therein are outside
    the bargaining unit of the Universitys rank-and-file employees."[16]
    On the second issue regarding the propriety of the inclusion of a union shop clause in the collective bargaining
    agreement, in addition to the existing maintenance of membership clause, the voluntary arbitrator opined that a union
    shop clause "is not a restriction on the employees right of (sic) freedom of association but rather a valid form of union
    security while the CBA is in force and in accordance with the Constitutional policy to promote unionism and collective
    bargaining and negotiations. The parties therefore should incorporate such union shop clause in their CBA." [17]
    On the third issue with respect to the use of the "last-in-first-out" method in case of retrenchment and transfer to other
    schools or units, the voluntary arbitrator upheld the "elementary right and prerogative of the management of the
    University to select and/or choose its employees, a right equally recognized by the Constitution and the law. The
    employer, in the exercise of this right, can adopt valid and equitable grounds as basis for lay-off or separation, like
    performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an employee is an employers
    exclusive right and prerogative."[18]
    Regarding the fourth issue concerning salary increases for the second and third years of the collective bargaining
    agreement, the voluntary arbitrator opined that the "proposed budget of the University for SY 1992-93 could not
    sufficiently cope up with the demand for increases by the Union. xxx xxx. With the present financial condition of the
    University, it cannot now be required to grant another round of increases through collective bargaining without
    exhausting its coffers for other legitimate needs of the University as an institution,"[19] thus, he ruled that "the University
    can no longer be required to grant a second round of increase for the school years under consideration and charge the
    same to the incremental proceeds."[20] Misspped
    On the fifth issue as to the Unions demand for a reduction of the workload of the union president, special leave benefits
    and indefinite union leave with pay, the voluntary arbitrator rejected the same, ruling that unionism "is no valid reason for
    the reduction of the workload of its President,"[21] and that there is "no sufficient justification to grant an indefinite
    leave."[22] Finding that the Union and the Faculty Association are not similarly situated, technically and
    professionally,[23] and that "[w]hile professional growth is highly encouraged on the part of the rank-and-file employees,
    this educational advancement would not serve in the same degree as demanded of the faculty members," [24]the voluntary
    arbitrator denied the Unions demand for special leave benefits.
    On the last issue regarding the duration of the collective bargaining agreement, the voluntary arbitrator ruled that "when
    the parties forged their CBA and signed it on 19 November 1990, where a provision on duration was explicitly included,
    the same became a binding agreement between them. Notwithstanding the Submission Agreement, thereby reopening
    this issue for resolution, this Voluntary Arbitrator is constrained to respect the original intention of the parties, the same
    being not contrary to law, morals or public policy."[25] As to the economic aspect of the collective bargaining agreement,
    the voluntary arbitrator opined that the "economic provisions of the CBA shall be re-opened after the third year in
    compliance with the mandate of the Labor Code, as amended."[26]
    Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the
    voluntary arbitrator "pursuant to existing rules and jurisprudence governing voluntary arbitration cases." [27] Josp-ped
    On March 5, 1993, the University filed with the Second Division of this Court, a petition for certiorari with temporary
    restraining order and/or preliminary injunction assailing the decision of the voluntary arbitrator, as having been rendered
    "in excess of jurisdiction and/or with grave abuse of discretion."[28] Subsequently, on May 24, 1993, the Union also filed a
    petition for certiorari with the First Division.[29] Without giving due course to the petition pending before each division, the
    First and Second Divisions separately resolved to require the respondents in each petition, including the Solicitor General
    on behalf of the voluntary arbitrator, to file their respective Comments. [30] Upon motion by the Solicitor General dated July
    29, 1993, both petitions were consolidated and transferred to the Second Division. [31]
    In his consolidated Comment[32] filed on September 9, 1993 on behalf of voluntary arbitrator Buenaventura C. Magsalin,
    the Solicitor General agreed with the voluntary arbitrators assailed decision on all points except that involving the
    employees of the College of St. Benilde. According to the Solicitor General, the employees of the College of St. Benilde
    should have been included in the bargaining unit of the rank-and-file employees of the University.[33] The Solicitor General
    came to this conclusion after finding "sufficient evidence to justify the Unions proposal to consider the University and the
    CSB [College of St. Benilde] as only one entity because the latter is but a mere integral part of the University," to wit: [34]
    "1. One of the duties and responsibilities of the CSBs Director of Academic Services is to coordinate with
    the Universitys Director of Admissions regarding the admission of freshmen, shiftees and transferees
    (Annex "3" of the Universitys Reply);
    "2. Some of the duties and responsibilities of the CSBs Administrative Officer are as follows:
    A. xxx xxx xxx.
    4. Recommends and implements personnel policies and guidelines (in accordance with
    the Staff Manual) as well as pertinent existing general policies of the university as a
    whole. xxx.
    12. Conducts and establishes liaison with all the offices concerned at the Main Campus as
    well (sic) with other government agencies on all administrative-related matters. xxx Spp-
    edjo
    B. xxx xxx xxx
    7. Handles processing, canvassing and direct purchasing of all requisitions worth more
    than P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions
    worth more than P10,000. xxx
    C. xxx xxx xxx
    7. Plans and coordinates with the Security and Safety Committee at the Main Campus the
    development of a security and safety program during times of emergency or occurrence
    of fire or other natural calamities. xxx (Annex "4" of the Universitys Reply).
    "3. The significant role which the University assumes in the admission of students at the CSB is revealed
    in the following provisions of the CSBs Bulletin for Arts and Business Studies Department for the
    schoolyear 1992-1993, thus:
    Considered in the process of admission for a (sic) high school graduate applicants are the
    following criteria: results of DLSU College Entrance Examination xxx.
    Admission requirements for transferees are: xxx and an acceptable score in the DLSU
    admission test. xxx
    Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with
    the DLSU policy on shifting. Considering that there sometimes exist exceptional cases
    where a very difficult but temporary situation renders a DLSU student falling under this
    category a last chance to be re-admitted provided he meets the cut-off scores required in
    the qualifying examination administered by the university. xxx
    He may not be remiss in his study obligations nor incur any violation whatsoever, as such
    will be taken by the University to be an indication of his loss of initiative to pursue further
    studies at DLSU. In sch (sic) a case, he renders himself ineligible to continue studying at
    DLSU. DLSU thus reserves the right to the discontinuance of the studies of any enrolee
    whose presence is inimical to the objectives of the CSB/DLSU. xxx Mi-so
    As a college within the university, the College of St. Benilde subscribes to the De La Salle
    Mission." (Annexes "C-1," "C-2," and "C-3" of the Unions Consolidated Reply and
    Rejoinder)
    "4. The academic programs offered at the CSB are likewise presented in the Universitys Undergraduate
    Prospectus for schoolyear 1992-1993 (Annex "D" of the Unions Consolidated Reply and Rejoinder).
    "5. The Leave Form Request (Annex "F" of the Unions Position Paper) at the CSB requires prior
    permission from the University anent leaves of CSB employees, to wit:
    AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE
    UNIVERSITY OR WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE WITHOUT
    SECURING AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO BE RECALLED
    FROM AN APPROVED LEAVE SHALL BE CONSIDERED ABSENT WITHOUT LEAVE AND
    SHALL BE SUBJECT TO DISCIPLINARY ACTION.
    "6. The University officials themselves claimed during the 1990 University Athletic Association of the
    Philippines (UAAP) meet that the CSB athletes represented the University since the latter and the CSB
    comprise only one entity."
    On February 9, 1994, this Court resolved to give due course to these consolidated petitions and to require the parties to
    submit their respective memoranda.[35]
    In its memorandum filed on April 28, 1994,[36] pursuant to the above-stated Resolution,[37] the University raised the
    following issues for the consideration of the Court:[38] Ne-xold
    I.
    "WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
    ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT COMPRISING THE UNIVERSITYS
    RANK-AND-FILE EMPLOYEES, THE COMPUTER OPERATORS ASSIGNED AT THE UNIVERSITYS COMPUTER
    SERVICES CENTER AND THE UNIVERSITYS DISCIPLINE OFFICERS, AND WHEN HE EXCLUDED THE
    COLLEGE OF SAINT BENILDE EMPLOYEES FROM THE SAID BARGAINING UNIT.
    II.
    "WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
    ARBITRATOR WHEN HE UPHELD THE UNIONS DEMAND FOR THE INCLUSION OF A UNION SHOP
    CLAUSE IN THE PARTIES COLLECTIVE BARGAINING AGREEMENT.
    III.
    "WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
    ARBITRATOR WHEN HE DENIED THE UNIONS PROPOSAL FOR THE "LAST-IN-FIRST-OUT" METHOD OF
    LAY-OFF IN CASES OF RETRENCHMENT. Sc
    IV.
    "WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
    ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO LONGER BE REQUIRED TO GRANT A
    SECOND ROUND OF WAGE INCREASES FOR THE SCHOOL YEARS 1991-92 AND 1992-93 AND CHARGE
    THE SAME TO THE INCREMENTAL PROCEEDS.
    V.
    "WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE VOLUNTARY
    ARBITRATOR WHEN HE DENIED THE UNIONS PROPOSALS ON THE DELOADING OF THE UNION
    PRESIDENT, IMPROVED LEAVE BENEFITS AND INDEFINITE UNION LEAVE WITH PAY."
    The Union, on the other hand, raised the following issues, in its memorandum, [39] filed pursuant to Supreme Court
    Resolution dated February 9, 1994,[40] to wit; that the voluntary arbitrator committed grave abuse of discretion in:
    "(1)......FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION OF THE COLLEGE
    OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF SUFFICIENT BASIS TO DO SO AND IN FINDING
    THAT THE EMPLOYEES THEREAT ARE OUTSIDE OF THE BARGAINING UNIT OF THE DLSUS RANK-AND-
    FILE EMPLOYEES. HE ALSO ERRED IN HIS INTERPRETATION OF THE APPLICATION OF THE
    DOCTRINE; x-sc
    "(2)......DENYING THE PETITIONERS PROPOSAL FOR THE LAST-IN FIRST-OUT METHOD OF LAY-OFF IN
    CASE OF RETRENCHMENT AND IN UPHOLDING THE ALLEGED MANAGEMENT PREROGATIVE TO SELECT
    AND CHOOSE ITS EMPLOYEES DISREGARDING THE BASIC TENETS OF SOCIAL JUSTICE AND EQUITY
    UPON WHICH THIS PROPOSAL WAS FOUNDED;
    "(3)......FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT UNIVERSITY IS THE
    LEGITIMATE GROUP WHICH DETERMINES AND SCRUTINIZES ANNUAL SALARY INCREASES AND FRINGE
    BENEFITS OF THE EMPLOYEES;
    "(4)......HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS IS THE ONLY
    SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE EMPLOYEES;
    "(5)......FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT UNIVERSITYS FINANCIAL
    STATEMENTS FACTUALLY TO DETERMINE THE FORMERS CAPABILITY TO GRANT THE PROPOSED
    SALARY INCREASES OVER AND ABOVE THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS
    AND IN GIVING WEIGHT AND CONSIDERATION TO THE RESPONDENT UNIVERSITYS PROPOSED
    BUDGET WHICH IS MERELY AN ESTIMATE.
    "(6)......FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION PRESIDENT WITH
    THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION WHICH IS NOT EVEN A LEGITIMATE LABOR
    ORGANIZATION AND IN SPECULATING THAT THE PRESIDENT OF THE FACULTY ASSOCIATION SUFFERS
    A CORRESPONDING REDUCTION IN SALARY ON THE ACCOUNT OF THE REDUCTION OF HIS
    WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL RIGHTS OF THE MEMBERS OF THE UNION AND
    OF THE FACULTY FOR PROFESSIONAL ADVANCEMENT AS WELL AS THE DESIRABLE EFFECTS OF THE
    INSTITUTIONALIZATION OF THE SPECIAL LEAVE AND WORKLOAD REDUCTION BENEFITS." [41] xl-aw
    The question which now confronts us is whether or not the voluntary arbitrator committed grave abuse of discretion in
    rendering the assailed decision, particularly, in resolving the following issues: (1) whether the computer operators
    assigned at the Universitys Computer Services Center and the Universitys discipline officers may be considered as
    confidential employees and should therefore be excluded from the bargaining unit which is composed of rank and file
    employees of the University, and whether the employees of the College of St. Benilde should also be included in the same
    bargaining unit; (2) whether a union shop clause should be included in the parties collective bargaining agreement, in
    addition to the existing maintenance of membership clause; (3) whether the denial of the Unions proposed "last-in-first-
    out" method of laying-off employees, is proper; (4) whether the ruling that on the basis of the Universitys proposed
    budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92
    and 1992-93 and charge the same to the incremental proceeds, is correct; (5) whether the denial of the Unions proposals
    on the deloading of the union president, improved leave benefits and indefinite union leave with pay, is proper; (6)
    whether the finding that the multi-sectoral committee in the University is the legitimate group which determines and
    scrutinizes the annual salary increases and fringe benefits of the employees of the University, is correct; and (7) whether
    the ruling that the 70% share in the incremental tuition proceeds is the only source of salary increases and fringe benefits
    of the employees, is proper.
    Now, before proceeding to the discussion and resolution of the issues raised in the pending petitions, certain preliminary
    matters call for disposition. As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S.
    Brillantes,[42] the following are the well-settled rules in a petition for certiorari involving labor cases. "First, the factual
    findings of quasi-judicial agencies (such as the Department of Labor and Employment), when supported by substantial
    evidence, are binding on this Court and entitled to great respect, considering the expertise of these agencies in their
    respective fields. It is well-established that findings of these administrative agencies are generally accorded not only
    respect but even finality.[43] Man-ikx
    "Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as
    adequate to justify a conclusion.[44]
    "Third, in Flores vs. National Labor Relations Commission,[45] we explained the role and function of Rule 65 as an
    extraordinary remedy:
    "It should be noted, in the first place, that the instant petition is a special civil action for certiorari under
    Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively
    in truly exceptional cases those wherein the action of an inferior court, board or officer performing
    judicial or quasi-judicial acts is challenged for being wholly void on grounds of jurisdiction. 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 public
    respondent NLRC's evaluation of the evidence and factual findings based thereon, which are generally
    accorded not only great respect but even finality.
    "No question of jurisdiction whatsoever is being raised and/or pleaded in the case at bench. Instead,
    what is being sought is a judicial re-evaluation of the adequacy or inadequacy of the evidence on record,
    which is certainly beyond the province of the extraordinary writ of certiorari. Such demand is
    impermissible for it would involve this Court in determining what evidence is entitled to belief and the
    weight to be assigned it. As we have reiterated countless times, judicial review by this Court 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." (emphasis
    supplied).
    With the foregoing rules in mind, we shall now proceed to discuss the merit of these consolidated petitions.
    We affirm in part and modify in part. Scl-aw
    On the first issue involving the classification of the computer operators assigned at the Universitys Computer Services
    Center and discipline officers, the University argues that they are confidential employees and that the Union has already
    recognized the confidential nature of their functions when the latter agreed in the parties 1986 collective bargaining
    agreement to exclude the said employees from the bargaining unit of rank-and-file employees. As far as the said
    computer operators are concerned, the University contends that " the parties have already previously agreed to exclude
    all positions in the Universitys Computer Services Center (CSC), which include the positions of computer operators, from
    the collective bargaining unit. xxx xxx."[46] The University further contends that "the nature of the work done by these
    Computer Operators is enough justification for their exclusion from the coverage of the bargaining unit of the Universitys
    rank-and-file employees. xxx xxx."[47] According to the University, the Computer Services Center, where these computer
    operators work, "processes data that are needed by management for strategic planning and evaluation of systems. It also
    houses the Universitys confidential records and information [ e.g. student records, faculty records, faculty and staff payroll
    data, and budget allocation and expenditure related data] which are contained in computer files and computer-generated
    reports. xxx xxx. Moreover, the Computer Operators are in fact the repository of the Universitys confidential information
    and data, including those involving and/or pertinent to labor relations. xxx xxx."[48]
    As to the discipline officers, the University maintains that "they are likewise excluded from the bargaining unit of the rank-
    and-file employees under the parties 1986 CBA. The Discipline Officers are clearly alter egos of management as they
    perform tasks which are inherent in management [e.g. enforce discipline, act as peace officers, secure peace and safety
    of the students inside the campus, conduct investigations on violations of University regulations, or of existing criminal
    laws, committed within the University or by University employees] xxx xxx." [49] The University also alleges that "the
    Discipline Officers are privy to highly confidential information ordinarily accessible only to management." [50] Manik-s
    With regard to the employees of the College of St. Benilde, the Union, supported by the Solicitor General at this point,
    asserts that the veil of corporate fiction should be pierced, thus, according to the Union, the University and the College of
    St. Benilde should be considered as only one entity because the latter is but a mere integral part of the University. [51]
    The Universitys arguments on the first issue fail to impress us. The Court agrees with the Solicitor General that the
    express exclusion of the computer operators and discipline officers from the bargaining unit of rank-and-file employees in
    the 1986 collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in
    the bargaining unit. During the freedom period, the parties may not only renew the existing collective bargaining
    agreement but may also propose and discuss modifications or amendments thereto. With regard to the alleged
    confidential nature of the said employees functions, after a careful consideration of the pleadings filed before this Court,
    we rule that the said computer operators and discipline officers are not confidential employees. As carefully examined by
    the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and non-
    confidential in nature.[52] As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of
    their duties, they are not confidential employees and should therefore be included in the bargaining unit of rank-and-file
    employees.
    The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be
    excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational
    institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of
    the veil of corporate fiction.[53] Man-ikan
    On the second issue involving the inclusion of a union shop clause in addition to the existing maintenance of membership
    clause in the collective bargaining agreement, the University avers that "it is in the spirit of the exercise of the
    constitutional right to self-organization that every individual should be able to freely choose whether to become a
    member of the Union or not. The right to join a labor organization should carry with it the corollary right not to join the
    same. This position of the University is but in due recognition of the individuals free will and capability for
    judgment."[54] The University assails the Unions demand for a union shop clause as "definitely unjust and amounts to
    oppression. Moreover, such a demand is repugnant to democratic principles and the constitutionally guaranteed freedom
    of individuals to join or not to join an association as well as their right to security of tenure, particularly, on the part of
    present employees."[55]
    The Union, on the other hand, counters that the Labor Code, as amended, recognizes the validity of a union shop
    agreement in Article 248 thereof which reads:
    "ART. 248. Unfair labor practices of employers.
    xxx......xxx......xxx
    (e) To discriminate in regard to hire or tenure of employment or any term or condition of employment in
    order to encourage or discourage membership in any labor organization. Nothing in this Code or in
    any other law shall prevent the parties from requiring membership in a recognized collective
    bargaining agent as a condition for employment, except of those employees who are already
    members of another union at the time of the signing of the collective bargaining
    agreement. xxx xxx." (emphasis supplied) Ol-dmiso
    We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the existing
    maintenance of membership clause in the collective bargaining agreement. As the Solicitor General asserted in his
    consolidated Comment, the Universitys reliance on the case of Victoriano vs. Elizalde Rope Workers Union[56] is
    clearly misplaced. In that case, we ruled that "the right to join a union includes the right to abstain from joining any
    union. xxx xxx. The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is,
    however, limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law,
    where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only
    members of the collective bargaining union, and the employees must continue to be members of the union for the
    duration of the contract in order to keep their jobs. xxx xxx."[57]
    On the third issue regarding the Unions proposal for the use of the "last-in-first-out" method in case of lay-off,
    termination due to retrenchment and transfer of employees, the Union relies on social justice and equity to support its
    proposition, and submits that the Universitys prerogative to select and/or choose the employees it will hire is limited,
    either by law or agreement, especially where the exercise of this prerogative might result in the loss of
    employment.[58] The Union further insists that its proposal is "in keeping with the avowed State policy (q) To ensure the
    participation of workers in decision and policy-making processes affecting their rights, duties and welfare (Art. 211, Labor
    Code, as amended)."[59]
    On the other hand, the University asserts its management prerogative and counters that "[w]hile it is recognized that this
    right of employees and workers to participate in policy and decision-making processes affecting their rights and benefits
    as may be provided by law has been enshrined in the Constitution (Article III, [should be Article XIII], Section 3, par. 2),
    said participation, however, does not automatically entitle the Union to dictate as to how an employer should choose the
    employees to be affected by a retrenchment program. The employer still retains the prerogative to determine the
    reasonable basis for selecting such employees."[60] Nc-m
    We agree with the voluntary arbitrator that as an exercise of management prerogative, the University has the right to
    adopt valid and equitable grounds as basis for terminating or transferring employees. As we ruled in the case of Autobus
    Workers' Union (AWU) and Ricardo Escanlar vs. National Labor Relations Commission ,[61] "[a] valid exercise of
    management prerogative is one which, among others, covers: work assignment, working methods, time, supervision of
    workers, transfer of employees, work supervision, and the discipline, dismissal and recall of workers. Except as
    provided for, or limited by special laws, an employer is free to regulate, according to his own discretion and
    judgment, all aspects of employment." (emphasis supplied)
    On the fourth issue involving the voluntary arbitrators ruling that on the basis of the Universitys proposed budget, the
    University can no longer be required to grant a second round of wage increases for the school years 1991-92 and 1992-
    93 and charge the same to the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of
    discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex Refinery Employees Association
    (CREA) vs. Jose S. Brillantes,[62] "xxx xxx. [w]e believe that the standard proof of a company's financial standing is its
    financial statements duly audited by independent and credible external auditors." [63] Financial statements audited by
    independent external auditors constitute the normal method of proof of profit and loss performance of a company. [64]The
    financial capability of a company cannot be based on its proposed budget because a proposed budget does not reflect the
    true financial condition of a company, unlike audited financial statements, and more importantly, the use of a proposed
    budget as proof of a companys financial condition would be susceptible to abuse by scheming employers who might be
    merely feigning dire financial condition in their business ventures in order to avoid granting salary increases and fringe
    benefits to their employees.
    On the fifth issue involving the Unions proposals on the deloading of the union president, improved leave benefits and
    indefinite union leave with pay, we agree with the voluntary arbitrators rejection of the said demands, there being no
    justifiable reason for the granting of the same. Nc-mmis
    On the sixth issue regarding the finding that the multi-sectoral committee in the University is the legitimate group which
    determines and scrutinizes the annual salary increases and fringe benefits of the employees of the University, the Court
    finds that the voluntary arbitrator did not gravely abuse his discretion on this matter. From our reading of the assailed
    decision, it appears that during the parties negotiations for a new collective bargaining agreement, the Union demanded
    for a 25% and 40% salary increase for the second and third years, respectively, of the collective bargaining
    agreement.[65] The Universitys counter-proposal was for a 10% increase for the third year.[66] After the meeting of the
    multi-sectoral committee on budget, which is composed of students, parents, faculty, administration and union, the
    University granted across-the-board salary increases of 11.3% and 19% for the second and third years,
    respectively.[67] While the voluntary arbitrator found that the said committee "decided to grant the said increases based
    on the Universitys viability which were exclusively sourced from the tuition fees. xxx xxx.," no finding was made as to the
    basis of the committees decision. Be that as it may, assuming for the sake of argument that the said committee is the
    group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the
    committees determination must still be based on duly audited financial statements following our ruling on the fourth
    issue.
    On the seventh and last issue involving the ruling that the 70% share in the incremental tuition proceeds is the only
    source of salary increases and fringe benefits of the employees, the Court deems that any determination of this alleged
    error is unnecessary and irrelevant, in view of our rulings on the fourth and preceding issues and there being no evidence
    presented before the voluntary arbitrator that the University held incremental tuition fee proceeds from which any wage
    increase or fringe benefit may be satisfied.
    WHEREFORE, premises considered, the petitions in these consolidated cases, G.R. No. 109002 and G.R. No. 110072 are
    partially GRANTED. The assailed decision dated January 19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby
    AFFIRMED with the modification that the issue on salary increases for the second and third years of the collective
    bargaining agreement be REMANDED to the voluntary arbitrator for definite resolution within one month from the finality
    of this Decision, on the basis of the externally audited financial statements of the University already submitted by the
    Union before the voluntary arbitrator and forming part of the records. Scnc-m
    SO ORDERED.
    FIRST DIVISION

    PHILEX GOLD PHILIPPINES, G.R. No. 149758


    INC., GERARDO H. BRIMO,
    LEONARD P. JOSEF, and Present:
    JOSE B. ANIEVAS,
    Petitioners,
    DAVIDE, C.J. (Chairman),
    QUISUMBING,
    YNARES-SANTIAGO,
    - versus - CARPIO, and
    AZCUNA, J.J.
    PHILEX BULAWAN SUPERVISORS Promulgated:
    UNION, represented by its President,
    JOSE D. PAMPLIEGA, August 25, 2005
    Respondents.
    x-----------------------------------------------------------------------------------------x

    DECISION

    AZCUNA, J.:

    This is a petition for review on certiorari, with prayer for the issuance of a temporary restraining and/or
    status quoorder, assailing the Decision of the Court of Appeals in CA-G.R. SP No. 57701 promulgated on April 23,
    2001 and its Resolution, promulgated on August 29, 2001, denying petitioners Motion for Reconsideration. The said
    Decision of the Court of Appeals reversed and set aside the Resolution dated February 29, 2000 of the Voluntary
    Arbitrator and reinstated the Voluntary Arbitrators Resolution dated January 14, 2000 with modification.

    The antecedents[1] of the case are as follows:

    Respondent Philex Bulawan Supervisors Union (Philex Supervisors Union) is the sole and exclusive bargaining
    representative of all supervisors of petitioner Philex Gold Philippines, Incorporated (Philex Gold), a gold mining company
    with mine site at Vista Alegre, Nabulao, Sipalay, Negros Occidental. On July 2, 1997, respondent union entered into a
    Collective Bargaining Agreement (CBA) with petitioner company effective August 1, 1996 up to July 31, 2001.

    It appears, however, that after the signing of the CBA, Philex Gold made the employees of Philex Mining
    Corporation from Padcal, Tuba, Benguet, its regular supervisory employees effective July 1, 1997. Some of the so-called
    ex-Padcal supervisors began to work in the Bulawan mines of Philex Mining Corporation in 1992 as ordinary rank-and-file
    workers. When Philex Gold was incorporated in 1996 to exclusively handle gold mining, it took over the operations of the
    Bulawan mines and absorbed some of the ex-Padcal employees.

    Philex Gold conveyed to Philex Supervisors Union the status of the ex-Padcal supervisors in November 1997 upon
    the insistence of the union to be informed of their standing.

    It turned out that the ex-Padcal supervisors were maintained under a confidential payroll, receiving a different set
    of benefits and higher salaries compared to the locally hired supervisors of similar rank and classification doing parallel
    duties and functions.

    Philex Supervisors Union filed a Complaint[2] against Philex Gold with the National Conciliation and Mediation
    Board (NCMB), Bacolod City, for the payment of wage differential and damages and the rectification of the discriminatory
    salary structure and benefits between the ex-Padcal supervisors and the local-hires.

    After the submission of the parties respective position papers and rejoinders/supplemental position papers, the
    Voluntary Arbitrator rendered a decision on January 14, 2000 in favor of respondent Union.

    As regards the supervisors wage rates[3] which was submitted by Philex Gold, the Voluntary Arbitrator held:

    ...

    The Wage rates of the employers as classified and classed by them are not also reasonable and
    undiscriminatory.

    This is shown by the fact that the maximum rate for S-4 at P18,065 per month is higher than the
    minimum rate for S-5, the highest category at P13,295 a month only. The rate difference between the
    maximum rate of S-4 and the minimum rate for S-5 is P4,770, the maximum rate of S-4 being higher
    than the minimum rate of S-5.
    Simply stated, an S-4 employee getting the maximum salary of P18,065 a month will merely get
    a reduced or diminished salary of P13,295 upon his promotion to S-5, the highest class or category of
    supervisors upon his promotion. This condition is not an ideal labor relation but a situation which will
    surely ignite labor conflicts and disputes in the work place.

    In whatever shade or color that we shall look upon the issue of whether or not the herein
    employer can be held liable to pay the wage differential pay to the LOCALLY HIRED SUPERVISORS due to
    its obvious discriminatory wage policy, one thing stands outsupervisors of the same ranks are not paid
    the same rates of pay.

    This inequitable rates of pay being implemented by respondents result naturally into the herein
    employers discriminatory wage policy which Article 248 (e) of the LABOR CODE prohibits and defines as
    UNFAIR LABOR PRACTICE OF EMPLOYERS.[4]

    The dispositive portion of the Decision reads:

    WHEREFORE, in view of all the FOREGOING, judgment is hereby decreed ORDERING the
    respondent PHILEX GOLD PHILIPPINES, INC./GERARD H. BRIMO/LEONARD P. JOSEF/JOSE B. ANIEVAS,
    JOINTLY and SEVERALLY to:

    1. Readjust the MONTHLY RATES OF PAY of locally hired SUPERVISORS in the


    categories of S-1 to S-5 RANKS in the same level/or amount with that of PADCAL
    SUPERVISORS of the same RANKS namely:

    S-1 ----------------- P13,081.60


    S-2 ----------------- P13,893.60
    S-3 ----------------- P15,209.60
    S-4 ----------------- P17,472.00
    S-5 ----------------- P20,300.00

    effective November 1, 1998 and to pay Wage differential pay from November 1, 1998 up
    to the date of the Decision to all affected locally hired supervisors.

    2. To revise or modify its existing wage rates per supervisory ranking, making the
    maximum rate of a lower category lower than the minimum rate of the next higher
    category; and,

    3. Pay to the UNION ATTORNEYS FEES at 5% of the total sum of the Wage
    differential pay awarded within ten (10) days from receipt of this Decision.

    The respondent is further ordered to deposit with the cashier of the NCMB the sum which is
    equivalent to the wage differential pay computed at a differential of P5,501.24 per person/supervisor per
    month from November 1, 1998 up to the date of this decision, for S-1; P5,663.24 per month per
    supervisor, for S-2; P5,979.24 per supervisor per month, for S-3; P7,065.75 per supervisor per month for
    S-4 and P8,428.46 per supervisor per month for S-5, and the ATTORNEYS FEE which is 5% of the total
    wage differential pay also within ten (10) days from receipt of this decision.

    SO ORDERED.[5]

    Philex Supervisors Union filed a Motion for Partial Reconsideration dated January 20, 2000, seeking, among
    others, the modification of the effectivity of the readjustment of the monthly rates of pay of the locally hired supervisors
    and of the computation of their wage differential from November 1, 1998 to August 1, 1997 although the discrimination in
    wages started upon the regularization of the ex-Padcal supervisors on July 1, 1997.

    On January 25, 2000, Philex Gold also filed a motion for reconsideration, which was allegedly filed a day late,
    contending that it was denied due process as the Voluntary Arbitrator decided the

    case without its supplemental position paper, that the decision undermined the collective bargaining process between the
    parties relative to wage differentials, and that there was neither unlawful discrimination nor wage distortion between the
    ex-Padcal supervisors and the locally hired supervisors.

    On February 29, 2000, the Voluntary Arbitrator issued the assailed Resolution modifying his earlier Decision
    dated January 14, 2000, this time finding that there was no discrimination in the determination of the rates of pay of the
    supervisors. The Voluntary Arbitrator, however, readjusted the amount of wages of local supervisors by adding or
    increasing their wages in the uniform sum of P800.00 a month effective October 1, 1999 to erase the shadows of
    inequities among the various grades of supervisors. The dispositive portion of the Decision reads:
    WHEREFORE, IN VIEW of the foregoing, the Decision dated January 14, 2000 is hereby modified
    in the following manner, to wit:

    1. The respondent employer is hereby ordered to re-adjust the wage rates of S-1 to
    S-5 supervisors by adding or increasing their wages in the uniform sum of P800.00 a
    month each effective October 1, 1999; and to compute and pay their differential pay
    from October 1, 1999 up to the time it is paid and implemented;

    2. The respondent is further ordered to pay Attorneys Fee to the Unions lawyer at
    5% of the total amount of WAGE DIFFERENTIAL PAY;

    3. Finally, the respondent employer is ordered to deposit to the cashier of the NCMB
    the WAGE DIFFERENTIAL PAY and the Attorneys Fee adjudged within 10 days from
    receipt of this Resolution.

    SO ORDERED. [6]

    On March 13, 2000, respondent Union filed a petition for review before the Court of Appeals raising the following
    issues: (1) whether or not the Voluntary Arbitrator erred in admitting petitioners motion for reconsideration which was
    filed beyond the reglementary period; (2) whether or not the Voluntary Arbitrator erred in modifying his decision by
    finding petitioner to be liable to its locally hired members in the sum of P800 per month as wage adjustment effective
    October 1999; and (3) whether or not the Voluntary Arbitrator erred in failing to grant 10 percent attorneys fees on the
    total awards.

    On March 2, 2000, petitioners filed a Manifestation of Compliance with the Voluntary Arbitrator alleging that on
    account of its payment to respondent union members of monetary benefits (in the amount of P1,000) provided by the
    Amendments and Supplement to the CBA, it has complied with the Resolution dated February 29, 2000.

    In a Resolution dated April 4, 2000, the Voluntary Arbitrator denied [7] said Manifestation of Compliance for lack of
    merit.

    While CA-G.R. SP No. 57701 was pending, respondent Union filed on April 8, 2000 a Motion for Issuance of Writ
    of Execution of the Resolution dated February 29, 2000.

    In an Order dated June 27, 2000, the Voluntary Arbitrator issued a Writ of Execution enforcing the Resolution
    dated February 29, 2000.

    On June 29, 2000, Philex Gold filed a Motion to Lift Writ of Execution, which was not acted upon by the Voluntary
    Arbitrator.

    On July 10, 2000, Philex Gold filed a petition for review before the Court of Appeals, docketed as CA-G.R. SP No.
    60065, questioning the propriety and validity of the Voluntary Arbitrators Order granting execution pending appeal. Said
    petition was denied for lack of merit.

    On April 23, 2001, the Court of Appeals rendered the assailed Decision, in CA-G.R. SP No. 57701, finding that
    petitioners failed to prove that they did not discriminate against the locally hired supervisors in paying them lower salaries
    than the ex-Padcal supervisors. It held, thus:

    Philex Golds attempt to explain the disparity in the salary rates between ex-Padcal supervisors
    and the local-hires failed to convince Us. It presented a salary structure for supervisors classified into five
    categories, namely: S-1, S-2, S-3, S-4, and S-5 with different rates of pay. Each classification is further
    divided in terms of wage rates into minimum, medium, and maximum. While the ex-Padcal supervisors
    received the maximum for each category, presumably because of seniority in employment, longer work
    experience in gold mining, specialized skills, and the dislocation factor, the local-hires received the
    minimum.

    This explanation is fraught with inconsistencies. First, the CBA between the parties did not
    disclose this multi-tiered classification of supervisors (Rollo, pp. 36-37, 46-74). Second, as found by the
    voluntary arbitrator in his original decision, the local-hires actually received salaries less than those they
    were supposed to be entitled (Rollo, p. 41). Third, the minimum wage rate for a higher category
    happened to be lesser than the maximum rate of a lower category such that a supervisor with a rank of
    S-1 maximum would get less upon his promotion to S-2 minimum (Rollo, pp. 38-39, 90). And finally, this
    pay structure was kept from the knowledge of the union and was only revealed in the course of the
    proceedings before the voluntary arbitrator. These factors only accentuate the fact which Philex Gold
    tried to hide, that is, it unduly favored the ex-Padcal supervisors over the local-hires through a system of
    confidential salary structure.

    The long honored legal truism of equal pay for equal work, meaning, persons who work with
    substantially equal qualification, skill, effort and responsibility, under similar conditions, should be paid
    similar salaries, has been institutionalized in our jurisdiction. Such that if an employer accords employees
    the same position and rank, the presumption is that these employees perform equal work as borne by
    logic and human experience. The ramification is that (i)f the employer pays one employee less than the
    rest, it is not for that employee to explain why he receives less or why the others receive more. That
    would be adding insult to injury. The employer has discriminated against that employee; it is for the
    employer to explain why the employee is treated unfairly. ( International School Alliance of Educators v.
    Quisumbing, et al., G.R. No. 128845, June 1, 2000).

    Philex Gold having failed to discharge this burden, We opt therefore to reinstate, albeit with
    modification, the original decision dated 14 January 2000 of the voluntary arbitrator as the same is duly
    supported by the pleadings filed before Us.[8]

    The dispositive portion of the Decision reads:

    WHEREFORE, premises considered, the assailed resolution of 29 February 2000


    is REVERSED and SET ASIDE and a new one entered REINSTATING the 14 January 2000 decision
    subject to the MODIFICATION that the readjustment of the monthly rates of pay of locally hired
    supervisors as well as their wage differential pay be made effective 1 August 1997 up to the finality of
    this decision. This case is REMANDED to the voluntary arbitrator for the proper computation of wage
    differential and attorneys fees. No costs.

    SO ORDERED.[9]

    Petitioners motion for reconsideration was denied by the appellate court in its Resolution dated August 29, 2001.

    Petitioners thus filed this petition with a prayer for the issuance of a temporary restraining order. The Court
    issued a temporary restraining order enjoining the execution of the Decision of the Court of Appeals dated April 23,
    2001 and its Resolution dated August 29, 2001 after petitioners posted a cash bond.

    Petitioners raise the following issues:

    1. Section 4, Rule 43 and Luzon Development Bank [v. Association of Luzon


    Development Bank Employees, 249 SCRA 162 (1995)] provide that the decision of a voluntary
    arbitrator becomes final after 15 days from notice of the award. Assuming the validity of service
    on Philex Golds liaison office, instead of its counsels address on record, did the Court of Appeals
    commit an error in law by stating that the Decision dated 14 January 2000 of VA Sitjar became
    final and executory after eleven days from notice?

    2. Granting arguendo that Philex Gold had only a period of 10 days within which to
    seek reconsideration of the Sitjar Decision, did the period begin to run upon service of said
    Decision at an address which is not the address on record or upon the actual receipt thereof by
    Philex Golds counsel?

    3. VA Sitjar found petitioners Brimo, Josef and Jose B. Anievas, in their capacity as
    corporate officers, jointly and severally liable for the alleged obligation of Philex Gold to pay wage
    differentials to PBSU. Did the Court of Appeals commit an error in law in affirming VA Sitjar when
    the latter disposed of an issue not submitted to him for arbitration and in directing solidary
    liability between Philex Gold and its top officers despite the absence of any finding of malice, bad
    faith, or gross negligence?

    4. In leveling the wages of the Padcal Supervisors and the Locally-Hired


    Supervisors, the Court of Appeals applied the egalitarian doctrine of equal pay for equal work
    in International School Alliance of Educators v. Quisumbing. Does equal pay for equal work
    unqualifiedly remove management prerogative to institute qualitative difference in pay and
    benefits on the basis of seniority, skill, experience and other valid factors in the same class of
    workers doing the same kind of work?[10]

    The relevant issues in this case are as follows:

    (1) Whether the notice sent through petitioner companys Liaison Office can be considered as notice to counsel;

    (2) Whether the petitioners-corporate officers are solidarily liable with Philex Gold in any liability to
    respondent Union;

    (3) Whether the doctrine of equal pay for equal work should not remove management prerogative to institute
    difference in salary on the basis of seniority, skill, experience and the dislocation factor in the same class
    of supervisory workers doing the same kind of work.
    First Issue : Whether the notice sent through petitioner
    companys Liaison Office can be considered as notice to counsel

    Petitioners contend that the Court of Appeals erred in holding that their motion for reconsideration of the
    Decision of the Voluntary Arbitrator dated January 14, 2000 was filed out of time.

    Indeed, the Court of Appeals found that [b]ased on the certification issued by the voluntary arbitrator himself,
    the decision was received by the respondents (petitioners herein) on 14 January 2000 (Rollo, p. 123), and they filed their
    motion for reconsideration on 25 January 2000, or on the eleventh day from receipt of the decision. The appellate court
    ruled that the late filing rendered the decision final and executory as regards the petitioners, and that the Voluntary
    Arbitrator erred in admitting petitioners motion for reconsideration.

    Petitioners argue that the service of the Voluntary Arbitrators Decision on Philex Golds Liaison Office at Libertad
    St., Bacolod City on January 14, 2000 was improper since their counsels address of record was at Vista Alegre, Nabulao,
    Sipalay, Negros Occidental 6113. Petitioners state that Philex Golds Liaison Office forwarded said Decision to their counsel
    only the next day or on January 15, 2000, which should be the date of notice to counsel and the basis for computation of
    the period to file a motion for reconsideration of said Decision.

    The contention is meritorious.

    Section 4, Rule III of the NCMB Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings states:

    Section 4. Service of Pleadings, Notices and Awards. Copies of pleadings, notices or copies of
    [an] award may be served through personal service or by registered mails on the parties to the
    dispute: Provided, that where a party is represented by counsel or authorized representative,
    service shall be made on the latter. Service by registered mail is complete upon receipt by the
    addressee or his agents.[11]
    In this case, petitioners were represented before the Voluntary Arbitrator by Attys. Deogracias G. Contreras Jr.
    and Weldy U. Manlong. Hence, under the NCMB Guidelines, service of pleadings, notices and awards should be made on
    petitioners counsel.

    The Court noted that in petitioners Position Paper and Supplemental Position Paper filed with the Voluntary
    Arbitrator, the address of petitioners counsel was indicated as Vista Alegre, Nabulao, Sipalay, Negros Occidental, 6113.
    However, the Decision of the Voluntary Arbitrator dated January 14, 2000 was sent through the Liaison Office of Philex
    Gold, thus:

    ATTY. WENDY U. MANLONG


    Counsel for the Respondents
    PHILEX GOLD PHILIPPINES, INC.
    GERARDO BRIMO, LEONARD P. JOSEF,
    JOSE B. ANIEVAS
    C/O Liaison Office, Libertad St.
    Bacolod City

    Even the Court of Appeals stated that based on the certification issued by the voluntary arbitrator himself, the decision
    was received by the respondents on 14 January 2000. . . . Said service on Philex Golds Liaison Office or on the petitioners
    themselves cannot be considered as notice in law to petitioners counsel.

    Under the circumstances, reliance may be placed on the assertion of petitioners that a copy of the Decision of the
    Voluntary Arbitrator dated January 14, 2000 was delivered to their counsel the next day or on January 15, 2000, which
    must be deemed as the date of notice to counsel of said Decision. [12]
    Hence, when petitioners motion for reconsideration was filed on January 25, 2000, it was filed within the 10-day
    reglementary period under Article 262-A of the Labor Code. The Court of Appeals,
    therefore, erred in holding that said motion for reconsideration was filed out of time.

    Second Issue : Whether the petitioners-corporate officers are solidarily liable with Philex
    Gold in any liability to respondent Union

    Petitioners officers contend that they should not be adjudged solidarily liable with Philex Gold.

    The contention is meritorious.

    A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its
    behalf and, in general, from the people comprising it.[13] The rule is that obligations incurred by the corporation, acting
    through its directors, officers and employees, are its sole liabilities. [14] However, it is possible for a corporate director,
    trustee or officer to be held solidarily liable with the corporation in the following instances:
    1. When directors and trustees or, in appropriate cases, the officers of a corporation--

    (a) vote for or assent to patently unlawful acts of the corporation;


    (b) act in bad faith or with gross negligence in directing the
    corporate affairs;
    (c) are guilty of conflict of interest to the prejudice of the
    corporation, its stockholders or members, and other persons.

    2. When a director or officer has consented to the issuance of watered


    stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written
    objection thereto.

    3. When a director, trustee or officer has contractually agreed or stipulated


    to hold himself personally and solidarily liable with the Corporation.
    -
    4. When a director, trustee or officer is made, by specific provision of law,
    personally liable for his corporate action.[15]

    The corporate officers in this case have not been proven to fall under any of the aforecited instances; hence, they
    cannot be held solidarily liable with the company in the payment of any liability.

    Third Issue : Whether the doctrine of equal pay for equal work should not remove
    management prerogative to institute difference in salary within the
    same supervisory level

    Petitioners submit that the equal pay for equal work doctrine in International School Alliance of Educators v.
    Quisumbing,[16] which the Court of Appeals cited to support its Decision should be narrowly construed to apply to a
    situation where invidious discrimination exists by reason of race or ethnicity, but not where valid factors exist to justify
    distinctive treatment of employees even if they do the same work.

    Petitioners explained that the ex-Padcal supervisors were paid higher because of their longer years of service,
    experience, their training and skill in the underground mining method wanting in the local supervisors, and their
    relocation to Bulawan, Negros Occidental. They assert that the differential treatment of the ex-Padcal supervisors is not
    arbitrary, malicious or discriminatory but justified by the circumstances of their relocation and integration in the new
    mining operation in Bulawan.

    The Court is not persuaded by petitioners contention.

    Petitioners admit that the same class of workers [are] doing the same kind of work. This means that an ex-Padcal
    supervisor and a locally hired supervisor of equal rank do the same kind of work. If an employer accords employees the
    same position and rank, the presumption is that these employees perform equal work. [17] Hence, the doctrine of equal
    pay for equal work in International School Alliance of Educators was correctly applied by the Court of Appeals.

    Petitioners now contend that the doctrine of equal pay for equal work should not remove management
    prerogative to institute difference in salary on the basis of seniority, skill, experience and the dislocation factor in the
    same class of supervisory workers doing the same kind of work.[18]

    In this case, the Court cannot agree because petitioners failed to adduce evidence to show that an ex-Padcal
    supervisor and a locally hired supervisor of the same rank are initially paid the same basic salary for doing the same kind
    of work. They failed to differentiate this basic salary from any kind of salary increase or additional benefit which may have
    been given to the ex-Padcal supervisors due to their seniority, experience and other factors.

    The records only show that an ex-Padcal supervisor is paid a higher salary than a locally hired supervisor of the
    same rank. Therefore, petitioner failed to prove with satisfactory evidence that it has not discriminated against the locally
    hired supervisor in view of the unequal salary.

    To reiterate the ruling of Philippine-Singapore Transport Services, Inc. v. NLRC,[19] which was cited by the Court
    of Appeals in its Decision:

    ...

    It is noteworthy to state that an employer is free to manage and regulate, according to his own
    discretion and judgment, all phases of employment, which includes hiring, work assignments, working
    methods, time, place and manner of work, supervision of workers, working regulations, transfer of
    employees, lay-off of workers, and the discipline, dismissal and recall of work. While the law recognizes
    and safeguards this right of an employer to exercise what are clearly management prerogatives, such
    right should not be abused and used as a tool of oppression against labor. The companys prerogative
    must be exercised in good faith and with due regard to the rights of labor. A priori, they are not absolute
    prerogatives but are subject to legal limits, collective bargaining agreements and the general principles of
    fair play and justice.[20] (Emphasis supplied.)
    WHEREFORE, the petition is hereby DENIED. No reversible error was committed by the Court of Appeals in its
    Decision in CA-G.R. SP No. 57701 and in its Resolution promulgated on August 29, 2001. The Temporary Restraining
    Order issued by the Court is LIFTED.

    No costs.

    SO ORDERED.
    Republic of the Philippines
    SUPREME COURT
    Manila
    FIRST DIVISION
    G.R. No. 166647 March 31, 2006
    PAG-ASA STEEL WORKS, INC., Petitioner,
    vs.
    COURT OF APPEALS, FORMER SIXTH DIVISION and PAG-ASA STEEL WORKERS UNION (PSWU), Respondent.
    DECISION
    CALLEJO, SR., J.:
    This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 65171 ordering
    Pag-Asa Steel Works, Inc. to pay the members of Pag-Asa Steel Workers Union (Union) the wage increase prescribed
    under Wage Order No. NCR-08. Also assailed in this petition is the CA Resolution denying the corporations motion for
    reconsideration.
    Petitioner Pag-Asa Steel Works, Inc. is a corporation duly organized and existing under Philippine laws and is engaged in
    the manufacture of steel bars and wire rods. Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the
    rank-and-file employees of petitioner.
    On January 8, 1998, the Regional Tripartite Wages and Productivity Board (Wage Board) of the National Capital Region
    (NCR) issued Wage Order No. NCR-06.2 It provided for an increase of P13.00 per day in the salaries of employees
    receiving the minimum wage, and a consequent increase in the minimum wage rate to P198.00 per day. Petitioner and
    the Union negotiated on how to go about the wage adjustments. Petitioner forwarded a letter 3dated March 10, 1998 to
    the Union with the list of the salary adjustments of the rank-and-file employees after the implementation of Wage Order
    No. NCR-06, and the notation that said "adjustments [were] in accordance with the formula [they] have discussed and
    [were] designed so as no distortion shall result from the implementation of Wage Order No. NCR-06."
    NAME DATE REGULAR PRESENT RATE ADJUST EFF 2/6/98 NEW RATE
    1. PEPINO EMMANUEL 08.01.97 191.00 13.00 204.00
    2. SEVANDRA RODOLFO 01.17.98 192.00 13.00 205.00
    3. BERNABE ALFREDO 10.24.97 200.00 13.00 213.00
    4. UMBAL ADOLFO 08.18.97 215.00 12.00 227.00
    5. AQUINO JONAS 08.25.97 215.00 12.00 227.00
    6. AGCAOILI JAIME 01.08.98 220.00 11.00 231.00
    7. BERMEJO JIMMY JR. 04.01.97 221.00 11.00 232.00
    8. EDRADAN ELDEMAR P. 04.17.97 221.00 11.00 232.00
    9. REBOTON RONILO 05.14.97 221.00 11.00 232.00
    10. TABAOG ALBERT 04.10.97 221.00 11.00 232.00
    11. SALEN EDILBERTO 02.10.97 221.00 11.00 232.00
    13. PAEZ REYNALDO 02.27.97. 235.00 11.00 246.00
    14. HERNANDEZ ALFREDO 03.23.96 246.00 10.00 256.00
    15. BANIA LUIS JR. 12.08.95 246.00 10.00 256.00
    16. MAGBOO VICTOR 05.25.96 246.00 10.00 256.00
    17. NINORA BONIFACIO 03.22.96 246.00 10.00 256.00
    18. ALANCADO RODERICK 11.10.95 246.00 10.00 256.00
    19. PUTONG PASCUAL 06.23.96 246.00 10.00 256.00
    20. PAR EULOGIO JR. 08.16.95 246.00 10.00 256.00
    21. SALON FONDADOR 11.16.95 246.00 10.00 256.00
    22. RODA GEORGE 10.11.95 246.00 10.00 256.00
    23. RIOJA JOSEPH 12.28.95 246.00 10.00 256.00
    24. RAYMUNDO ANTONIO 06.05.96 246.00 10.00 256.00
    25. BUGTAI ROBERTO 04.10.96 246.00 10.00 256.00
    26. RELATO RAMON 07.07.96 265.00 10.00 275.00
    27. REGACHUELO DENNIS 11.30.95 265.00 10.00 275.00
    28. ORNOPIA REYNALDO 08.09.94 268.00 10.00 278.00
    29. PULPULAAN JAIME 01.18.96 275.00 10.00 285.00
    30. PANLAAN FERDINAND 01.18.96 275.00 10.00 285.00
    31.BAGASBAS EULOGIO JR. 01.18.96 275.00 10.00 285.00
    32. ALEJANDRO OLIVER 12.03.95 275.00 10.00 285.00
    33. PRIELA DANILO 11.30.95 280.00 10.00 290.00
    34. NOBELJAS EDGAR 07.10.95 283.00 10.00 293.00
    35. SAJOT RONNIE 10.02.93 288.00 10.00 298.00
    36. WHITING JOEL 09.30.93 288.00 10.00 298.00
    37. SURINGA FRANKLIN 12.19.93 288.00 10.00 298.00
    38. SIBOL MICHAEL 12.11.93 288.00 10.00 298.00
    39. SOLO JOSE 02.20.94 288.00 10.00 298.00
    40. TIZON JOEL 12.23.93 288.00 10.00 298.00
    41. SABATIN GILBERT 04.19.94 288.00 10.00 298.00
    42. REYES RONALDO 04.14.94 288.00 10.00 298.00
    43. AMANIA WILFREDO 01.06.94 288.00 10.00 298.00
    44. QUIDATO ARISTON 12.12.93 288.00 10.00 298.00
    45. LAROGA CLAUDIO JR. 10.13.93 288.00 10.00 298.00
    46. MORALES LUIS 09.30.93 288.00 10.00 298.00
    47. ANTOLO DANILO 12.26.93 288.00 10.00 298.00
    48. EXMUNDO HERCULES 05.13.94 288.00 10.00 298.00
    49. AMPER VALENTINO 08.02.93 288.00 10.00 298.00
    50. BAYO-ANG ALDEN JR. 07.14.93 288.00 10.00 298.00
    51. BASCONES NELSON 02.26.94 288.00 10.00 298.00
    52. DECENA LAURO 09.18.93 288.00 10.00 298.00
    53. CHUA MARLONITO 10.20.93 288.00 10.00 298.00
    54. CATACUTAN JUNE 03.02.94 288.00 10.00 298.00
    55.DE LOS SANTOS REYNALDO 12.23.93 288.00 10.00 298.00
    56. REYES EFREN 10.23.93 288.00 10.00 298.00
    57. CAGOMOC DANILO 01.13.94 288.00 10.00 298.00
    58. DOROL ERWIN 09.16.93 288.00 10.00 298.00
    59. CURAMBAO TIRSO 09.23.93 288.00 10.00 298.00
    60. VENTURA FERDINAND 09.20.94 292.00 10.00 302.00
    61. ALBANO JESUS 01.06.94 297.00 10.00 307.00
    62. CALLEJA JOSEPH 05.10.93 303.00 10.00 313.00
    63. PEREZ DANILO 03.01.93 303.00 10.00 313.00
    64. BATOY ERNIE 06.15.93 305.00 10.00 315.00
    65. SAMPAGA EDGARDO 06.07.93 307.00 10.00 317.00
    66. SOLON ROBINSON 05.10.94 315.00 10.00 325.00
    67. ELEDA FULGENIO 06.07.93 322.00 10.00 332.00
    68. CASCARA RODRIGO 06.07.93 322.00 10.00 332.00
    69. ROMANOS ARNULFO 06.07.93 322.00 10.00 332.00
    70. LUMANSOC MARIANO 06.07.93 322.00 10.00 332.00
    71. RAMOS GRACIANO 06.07.93 322.00 10.00 332.00
    72. MAZON NESTOR 07.24.90 330.00 10.00 340.00
    73. BRIN LUCENIO 07.26.90 330.00 10.00 340.00
    74. SE FREDIE 03.25.90 340.00 10.00 350.00
    75. RONCALES DIOSDADO 04.30.90 340.00 10.00 350.00
    76. DISCAYA EDILBERTO 09.06.89 340.00 10.00 350.00
    77. SUAREZ LUISTO 06.10.92 347.00 10.00 357.00
    78. CASTRO PEDRO 10.30.92 348.00 10.00 358.00
    79. CLAVECILLA AMBROSIO 09.09.88 351.00 10.00 361.00
    80. YSON ROMEO 09.11.88 351.00 10.00 361.00
    81. JUMAWAN URBANO JR. 12.20.87 354.00 10.00 364.00
    82. MARASIGAN GRACIANO 05.20.88 354.00 10.00 364.00
    83. MAGLENTE ROLANDO 09.03.87 354.00 10.00 364.00
    84. NEBRIA CALIX 02.25.88 354.00 10.00 364.00
    85. BARBIN DANIEL 09.03.87 354.00 10.00 364.00
    86. CAMAING CARLITO 12.22.87 354.00 10.00 364.00
    87. BUBAN JONATHAN 10.22.87 354.00 10.00 364.00
    88. GUEVARRA ARNOLD 10.04.87 354.00 10.00 364.00
    89. MALAPO MARCOS JR. 08.04.87 354.00 10.00 364.00
    90. ZUNIEGA CARLOS 02.19.88 354.00 10.00 364.00
    91. SABORNIDO JULITO 12.20.87 354.00 10.00 364.00
    92. DALUYO LOTERIO 04.02.88 354.00 10.00 364.00
    93. AGUILLON GRACIANO 05.27.87 359.00 10.00 369.00
    94. CRISTY EMETERIO 04.06.87 359.50 10.00 369.50
    95. FULGUERAS DOMINGO 01.25.87 362.00 10.00 372.00
    96. ZIPAGAN NELSON 02.07.84 370.00 10.00 380.00
    97. LAURIO JESUS 06.01.82 371.00 10.00 381.00
    98. ACASIO PEDRO 11.21.79 372.00 10.00 382.00
    99. MACALISANG EPIFANIO 02.01.88 372.00 10.00 382.00
    100. OFILAN ANTONIO 03.12.79 374.50 10.00 384.50
    101. SEVANDRA ALFREDO 05.02.69 374.50 10.00 384.50
    102. VILLAMER JOEY 11.04.81 374.50 10.00 384.50
    103. GRIPON GIL 01.17.76 374.75 10.00 384.75
    104. CARLON HERMINIGILDO, JR. 04.17.87 375.00 10.00 385.00
    105. MANLABAO HEROHITO 04.14.81 375.00 10.00 385.00
    106. VILLANUEVA DOMINGO 12.01.77 375.50 10.00 385.50
    107. APITAN NAZARIO 09.04.79 376.00 10.00 386.00
    108. SALAMEDA EDUARDO 02.13.79 377.00 10.00 387.00
    109. ARNALDO LOPE 05.02.69 378.50 10.00 388.50
    110. SURIGAO HERNANDO 12.29.79 379.00 10.00 389.00
    111. DE LA CRUZ CHARLIE 07.14.76 379.00 10.00 389.00
    112. ROSAURO JUAN 07.15.76 379.50 10.00 389.50
    113 HILOTIN ARLEN 10.10.77 383.00 10.00 393.004
    On September 23, 1999, petitioner and the Union entered into a Collective Bargaining Agreement (CBA), effective July 1,
    1999 until July 1, 2004. Section 1, Article VI (Salaries and Wage) of said CBA provides:
    Section 1. WAGE ADJUSTMENT - The COMPANY agrees to grant all the workers, who are already regular and covered by
    this AGREEMENT at the effectivity of this AGREEMENT, a general wage increase as follows:
    July 1, 1999 . . . . . . . . . . . P15.00 per day per employee
    July 1, 2000 . . . . . . . . . . . P25.00 per day per employee
    July 1, 2001 . . . . . . . . . . . P30.00 per day per employee
    The aforesaid wage increase shall be implemented across the board. Any Wage Order to be implemented by the Regional
    Tripartite Wage and Productivity Board shall be in addition to the wage increase adverted to above. However, if no wage
    increase is given by the Wage Board within six (6) months from the signing of this AGREEMENT, the Management is
    willing to give the following increases, to wit:
    July 1, 1999 . . . . . . . . . . . P20.00 per day per employee
    July 1, 2000 . . . . . . . . . . . P25.00 per day per employee
    July 1, 2001 . . . . . . . . . . . P30.00 per day per employee
    The difference of the first year adjustment to retroact to July 1, 1999.
    The across-the-board wage increase for the 4th and 5th year of this AGREEMENT shall be subject for a re-opening or
    renegotiation as provided for by Republic Act No. 6715.5
    For the first year of the CBAs effectivity, the salaries of Union members were increased as follows:
    NAME WAGE NAME WAGE
    1. Pedro Acasio P427.00 53. Nestor Mazon P385.00
    2. Roderick Alancado 301.00 54. Luis Morales 343.00
    3. Jesus Albano 352.00 55. Calix Nebria 409.00
    4. Oliver Alejandro 330.00 56. Bonifacio Ninora Jr. 301.00
    5. Welfredo Amania 343.00 57. Edgar Noblejas 338.00
    6. Valentino Amper 343.00 58. Antonio Ofilan 429.50
    7. Danilo Antolo 343.00 59. Reynaldo Ornopia 323.00
    8. Nazario Apitan 431.00 60. Reynaldo Paez 291.00
    9. Jonas Aquino 272.00 61. Ferdinand Panlaan 330.00
    10. Eulogio Bagasbas, Jr. 330.00 62. Eulogio Par Jr. 301.00
    11. Luis Bania, Jr. 301.00 63. Marvin Peco 223.00
    12. Daniel Barbin 409.00 64. Emmanuel Pepino 249.00
    13. Nelson Bascones 343.00 65. Danilo Perez 358.00
    14. Alden Bayo-ang, Jr. 343.00 66. Jaime Pulpulaan 330.00
    15. Jimmy Bermejo 277.00 67. Ariston Quidato 343.00
    16. Alfredo Bernabe 258.00 68. Graciano Ramos Jr. 377.00
    17. Lucenio Brin 385.00 69. Antonio Raymundo 301.00
    18. Jonathan Buban 409.00 70. Ronilo Reboton 277.00
    19. Roberto Bugtai 301.00 71. Ramon Relato 320.00
    20. Danilo Cagomoc 343.00 72. Efren Reyes 343.00
    21. Joseph Calleja 358.00 73. Ronaldo Reyes 343.00
    22. Carlito Camaing 409.00 74. Joseph Rioja 301.00
    23. Hermenigildo Carlon, Jr. 430.00 75. George Roda 301.00
    24. June Catacutan 343.00 76. Diosdado Roncales 395.00
    25. Marlonito Chua 343.00 77. Gilbert Sabatin 343.00
    26. Ambrocio Clavecilla 406.00 78. Julito Sabornido 409.00
    27. Emeterio Cristy 414.50 79. Ronnie Sajot 343.00
    28. Tirso Curambao 343.00 80. Eduardo Salameda 432.00
    29. Loterio Daluyo 409.00 81. Edilberto Salen 277.00
    30. Lauro Decena 343.00 82. Fundador Salon 301.00
    31. Charlie dela Cruz 434.00 83. Edgar Sampaga 362.00
    32. Raynaldo delos Santos 343.00 84. Fredie Se 395.00
    33. Edilberto Discaya 395.00 85. Rodolfo Sevandra 250.00
    34. Erwin Dorol 343.00 86. Jose Solo 343.00
    35. Eldemar Edradan 277.00 87. Robinson Solon 370.00
    36. Fulgencio Eleda 377.00 88. Luisito Suarez 402.00
    37. Hercules Exmundo 343.00 89. Jeriel Suico 223.00
    38. Domingo Fulgueras 417.00 90. Hernando Surigao 434.00
    39. Federico Garcia 277.00 91. Franklin Suringa 343.00
    40. Gil Gripon 429.75 92. Albert Tabaog 277.00
    41. Arnold Guevarra 409.00 93. Joel Tizon 343.00
    42. Arlen Hilotin 438.00 94. Alfredo Umbal 272.00
    43. Urbano Jumawan, Jr. 409.00 95. Ferdinand Ventura 347.00
    44. Ronilo Lacandoze 265.00 96. Joey Villamer 429.50
    45. Claudio Laroga, Jr. 343.00 97.Domingo Villanueva 430.50
    46. Jesus Laurio 426.00 98. Joel Whiting 343.00
    47. Mariano Lumansoc 377.00 99. Romeo Yson 406.00
    48. Victor Magboo 301.00 100. Carlos Zuniega 409.00
    49. Rolando Maglente 409.00 101. Nelson Zipagan 425.00
    50. Marcos Malapo Jr. 409.00 102. Michael Sibol 343.00
    51. Herohito Manlabao 430.00 103. Renante Tangian 223.00
    52. Graciano Marasigan 409.00 104. Rodrigo Cascara 377.006
    On October 14, 1999, Wage Order No. NCR-077 was issued, and on October 26, 1999, its Implementing Rules and
    Regulations. It provided for a P25.50 per day increase in the salary of employees receiving the minimum wage and
    increased the minimum wage to P223.50 per day. Petitioner paid the P25.50 per day increase to all of its rank-and-file
    employees.
    On July 1, 2000, the rank-and-file employees were granted the second year increase provided in the CBA in the amount
    of P25.00 per day.8
    On November 1, 2000, Wage Order No. NCR-089 took effect. Section 1 thereof provides:
    Section 1. Upon the effectivity of this Wage Order, private sector workers and employees in the National Capital Region
    receiving the prescribed daily minimum wage rate of P223.50 shall receive an increase of TWENTY SIX PESOS and FIFTY
    CENTAVOS (P26.50) per day, thereby setting the new minimum wage rate in the National Capital Region at TWO
    HUNDRED FIFTY PESOS (P250.00) per day.10
    Then Union president Lucenio Brin requested petitioner to implement the increase under Wage Order No. NCR-08 in favor
    of the companys rank-and-file employees. Petitioner rejected the request, claiming that since none of the employees
    were receiving a daily salary rate lower than P250.00 and there was no wage distortion, it was not obliged to grant the
    wage increase.
    The Union elevated the matter to the National Conciliation and Mediation Board. When the parties failed to settle, they
    agreed to refer the case to voluntary arbitration. In the Submission Agreement, the parties agreed that the sole issue is
    "[w]hether or not the management is obliged to grant wage increase under Wage Order No. NCR #8 as a matter of
    practice,"11 and that the award of the Voluntary Arbitrator (VA) shall be final and binding. 12
    In its Position Paper, the Union alleged that it has been the companys practice to grant a wage increase under a
    government-issued wage order, aside from the yearly wage increases in the CBA. It averred that petitioner paid the
    salary increases provided under the previous wage orders in full (aside from the yearly CBA increases), regardless of
    whether there was a resulting wage distortion, or whether Union members salaries were above the minimum wage rate.
    Wage Order No. NCR-06, where rank-and-file employees were given different wage increases ranging from P10.00
    to P13.00, was an exception since the adjustments were the result of the formula agreed upon by the Union and the
    employer after negotiations. The Union averred that all of their CBAs with petitioner had a "collateral agreement" where
    petitioner was mandated to pay the equivalent of the wage orders across-the-board, or at least to negotiate how much
    will be paid. It pointed out that an established practice cannot be discontinued without running afoul of Article 100 of the
    Labor Code on non-diminution of benefits.13
    For its part, petitioner alleged that there is no such company practice and that it complied with the previous wage orders
    (Wage Order Nos. NCR-01-05) because some of its employees were receiving wages below the minimum prescribed
    under said orders. As for Wage Order No. NCR-07, petitioner alleged that its compliance was in accordance with its verbal
    commitment to the Union during the CBA negotiations that it would implement any wage order issued in 1999. Petitioner
    further averred that it applied the wage distortion formula prescribed under Wage Order Nos. NCR-06 and NCR-07
    because an actual distortion occurred as a result of their implementation. It asserted that at present, all its employees
    enjoy regular status and that none receives a daily wage lower than the P250.00 minimum wage rate prescribed under
    Wage Order No. NCR-08.14
    In reply to the Unions position paper, petitioner contended that the full implementation of the previous wage orders did
    not give rise to a company practice as it was not given to the workers within the bargaining unit on a silver platter, but
    only per request of the Union and after a series of negotiations. In fact, during CBA negotiations, it steadfastly rejected
    the following proposal of the Unions counsel, Atty. Florente Yambot, to include an across-the-board implementation of
    the wage orders:15
    x x x To supplement the above wage increases, the parties agree that additional wage increases equal to the wage orders
    shall be paid across-the-board whenever the Regional Tripartite Wage and Productivity Board issues wage orders. It is
    understood that these additional wage increases will be paid not as wage orders but as agreed additional salary increases
    using the wage orders merely as a device to fix or determine how much the additional wage increases shall be paid. 16
    The Union, however, insisted that there was such a company practice. It pointed out that despite the fact that all the
    employees were already receiving salaries above the minimum wage, the CBA still provided for the payment of a wage
    increase using wage orders as the yardstick. It claimed that the parties intended that petitioner-employer would pay the
    additional increases apart from those in the CBA. 17 The Union further asserted that the CBA did not include all the
    agreements of the parties; hence, to determine the true intention of the parties, parol evidence should be resorted to.
    Thus, Atty. Yambots version of the wage adjustment provision should be considered. 18
    On June 6, 2001, the VA rendered judgment in favor of the company and ordered the case dismissed. 19 It held that there
    was no company practice of granting a wage order increase to employees across-the-board, and that there is no provision
    in the CBA that would oblige petitioner to grant the wage increase under Wage Order No. NCR08 across-the-board.20
    The Union filed a petition for review with the CA under Rule 43 of the Rules of Court. It defined the issue for resolution as
    follows:
    The principal issue in the present petition is whether or not the wage increase of P26.50 under Wage Order No. NCR-08
    must be paid to the union members as a matter of practice and whether or not parol evidence can be resorted to in
    proving or explaining or elucidating the existence of a collateral agreement/company practice for the payment of the
    wage increase under the wage order despite that the employees were already receiving wages way above the minimum
    wage of P250.00/day as prescribed by Wage Order No. NCR-08 and irrespective of whether wage distortion exists.21
    On September 23, 2004, the CA rendered judgment in favor of the Union and reversed that of the VA. The fallo of the
    decision reads:
    WHEREFORE, the assailed Decision dated June 6, 2001 of public respondent Voluntary Arbitrator is REVERSED and SET
    ASIDE. Private respondent Pag-Asa Steel Works, Inc. is ordered to pay the members of the petitioner union the P26.50
    daily wage by applying the wage increase prescribed under Wage Order No. NCR-08. Costs against private respondent.
    SO ORDERED.22
    The CA stressed that the CBA constitutes the law between the employer and the Union. It held that the CBA is plain and
    clear, and leaves no doubt as to the intention of the parties, that is, to grant a wage increase that may be ordered by the
    Wage Board in addition to the CBA-mandated salary increases regardless of whether the employees are already receiving
    wages way above the minimum wage. The appellate court further held that the employer has no valid reason not to
    implement the wage increase mandated by Wage Order No. NCR-08 because prior thereto, it had been paying the wage
    increase provided for in the CBA even though the employees concerned were already receiving wages way above the
    applicable minimum wage.23 Petitioner filed a motion for reconsideration which the CA denied for lack of merit on January
    11, 2005.24
    Petitioner then filed the instant petition in which it raises the following issues:
    I. WHETHER THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT FINDING THAT
    THE INCREASES PROVIDED FOR UNDER WAGE ORDER NO. 8 CANNOT BE DEMANDED AS A MATTER OF RIGHT BY THE
    RESPONDENT UNDER THE 1999 CBA, in that:
    a) Issue not averred in the complaint nor raised during the trial cannot be raised for the first time on
    appeal; and
    b) The Rules of Statutory Construction, in relation to Article 1370 and 1374 of the New Civil Code, as well
    as Section 11 of the Rules of Court, requires that contract must be read in its entirety and the various
    stipulations in a contract must be read together to give effect to all.
    II. WHETHER THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT FINDING THAT
    THE INCREASES PROVIDED FOR UNDER WAGE ORDER NO. 8 CANNOT BE DEMANDED BY THE RESPONDENT UNION AS
    A MATTER OF PRACTICE.25
    Petitioner points out that the only issue agreed upon during the voluntary arbitration proceedings was whether or not the
    company was obliged to grant the wage increase under Wage Order No. NCR-08 as a matter of practice. It posits that the
    respondent did not anchor its claim for such wage increase on the CBA but on an alleged company practice of granting
    the increase pursuant to a wage order. According to petitioner, respondent Union changed its theory on appeal when it
    claimed before the CA that the CBA is ambiguous.26 Petitioner contends that respondent Union was precluded from raising
    this issue as it was not raised during the voluntary arbitration. It insists that an issue cannot be raised for the first time on
    appeal.27
    Petitioner further argues that there is no ambiguity in the CBA. It avers that Section 1, Article VI of the CBA should be
    read in its entirety.28 From the said provision, it is clear that the CBA contemplated only the implementation of a wage
    order issued within six months from the execution of the CBA, and not every wage order issued during its effectivity.
    Hence, petitioner complied with Wage Order No. NCR-07 which was issued 28 days from the execution of the CBA.
    Petitioner emphasizes that this was implemented not because it was a matter of practice but because it was agreed upon
    in the CBA.29 It alleges that respondent Union in fact realized that it could not invoke the provisions of the CBA to enforce
    Wage Order No. NCR-08, which is why it agreed to limit the issue for voluntary arbitration to whether respondent Union is
    entitled to the wage increase as a matter of practice. The fact that the "Yambot proposals" were left out in the final
    document simply means that the parties never agreed to them. 30
    In any case, petitioner avers that respondent Union is not entitled to the wage increase provided under Wage Order No.
    NCR-08 as a matter of practice. There is no company practice of granting a wage-order-mandated increase in addition to
    the CBA-mandated wage increase. It points out that, as admitted by respondent Union, the previous wage orders were
    not automatically implemented and were made applicable only after negotiations. Petitioner argues that the previous
    wage orders were implemented because at that time, some employees were receiving salaries below the minimum wage
    and the resulting wage distortion had to be remedied.31
    For its part, respondent Union avers that the provision "[a]ny Wage Order to be implemented by the Regional Tripartite
    Wage and Productivity Board shall be in addition to the wage increase adverted to above" referred to a company practice
    of paying a wage increase whenever the government issues a wage order even if the employees salaries were above the
    minimum wage and there is no resulting wage distortion. According to respondent, the CBA contemplated all the salary
    increases that may be mandated by wage orders to be issued in the future. Since the wage order was only a device to
    determine exactly how much and when the increase would be given, these increases are, in effect, CBA-mandated and
    not wage order increases. 32 Respondent further avers that the ambiguity in the wage adjustment provision of the CBA
    can be clarified by resorting to parol evidence, that is, Atty. Yambots version of said provision. 33
    The petition is meritorious. We rule that petitioner is not obliged to grant the wage increase under Wage Order No. NCR-
    08 either by virtue of the CBA, or as a matter of company practice.
    On the procedural issue, well-settled is the rule, also applicable in labor cases, that issues not raised below cannot be
    raised for the first time on appeal.34 Points of law, theories, issues and arguments not brought to the attention of the
    lower court need not be, and ordinarily will not be, considered by the reviewing court, as they cannot be raised for the
    first time at that late stage. Basic considerations of due process impel this rule. 35
    We agree with petitioners contention that the issue on the ambiguity of the CBA and its failure to express the true
    intention of the parties has not been expressly raised before the voluntary arbitration proceedings. The parties specifically
    confined the issue for resolution by the VA to whether or not the petitioner is obliged to grant an increase to its
    employees as a matter of practice. Respondent did not anchor its claim for an across-the-board wage increase under
    Wage Order No. NCR-08 on the CBA. However, we note that it raised before the CA two issues, namely:
    x x x whether or not the wage increase of P26.50 under Wage Order No. NCR-08 must be paid to the union members as
    a matter of practice and whether or not parol evidence can be resorted to in proving or explaining or elucidating the
    existence of a collateral agreement/company practice for the payment of the wage increase under the wage order despite
    that the employees were already receiving wages way above the minimum wage of P250.00/day as prescribed by Wage
    Order No. NCR-08 and irrespective of whether wage distortion exists.36
    Petitioner, in its Comment on the petition, delved into these issues and elaborated on its contentions. By so doing, it
    thereby agreed for the CA to take cognizance of such issues as defined by respondent (petitioner therein). Moreover, a
    perusal of the records shows that the issue of whether or not the CBA is ambiguous and does not reflect the true
    agreement of the parties was, in fact, raised before the voluntary arbitration proceedings. Despite the submission
    agreement confining the issue to whether petitioner was obliged to grant an increase pursuant to Wage Order No. NCR-
    08 as a matter of practice, respondent Union nevertheless raised the same issues in its pleadings. In its Position Paper, it
    asserted that the CBA consistently contained a collateral agreement to pay the equivalent of the wage orders across-the-
    board; in its Reply, it claimed that such provision clearly provided that petitioner would pay the additional increases apart
    from the CBA and that the wage order serves only as a measure of said increase. These assertions indicate that
    respondent Union also relied on the CBA to support its claim for the wage increase.
    Central to the substantial issue is Article VI, Section I, of the CBA of the parties, dated September 23, 1999, viz:
    SALARIES AND WAGE
    Section 1. WAGE ADJUSTMENT The COMPANY agrees to grant to all workers who are already regular and covered by
    this AGREEMENT at the effectivity of this AGREEMENT a general wage increase as follows:
    July 1, 1999 . P15.00 per day per employee
    July 1, 2000 . P25.00 per day per employee
    July 1, 2001 . P 30.00 per day per employee
    The aforesaid wage increase shall be implemented across the board. Any Wage Order to be implemented by the Regional
    Tripartite Wage and Productivity Board shall be in addition to the wage increase adverted to above. However, if no wage
    increase is given by the Wage Board within six (6) months from the signing of this AGREEMENT, the Management is
    willing to give the following increases, to wit:
    July 1, 1999 . P 20.00 per day per employee
    July 1, 2000 . P 25.00 per day per employee
    July 1, 2001 P 30.00 per day per employee
    The difference of the first year adjustment to retroact to July 1, 1999.
    The across-the-board wage increase for the 4th and 5th year of this AGREEMENT shall be subject for a reopening or
    renegotiation as provided for by Republic Act No. 6715.37
    On the other hand, Wage Order No. NCR-08 specifically provides that only those in the private sector in the NCR receiving
    the prescribed daily minimum wage rate of P223.00 per day would receive an increase of P26.50 a day, thereby setting
    the new minimum wage rate in said region to P250.00 per day. There is no dispute that, when the order was issued, the
    lowest paid employee of petitioner was receiving a wage higher than P250.00 a day. As such, its employees had no right
    to demand for an increase under said order. As correctly ruled by the VA:
    We now come to the core of this case. Is [petitioner] under an obligation to grant wage increase to its workers under
    W.O. No. NCR-08 as a matter of practice? It is submitted that employers (unless exempt) in Metro Manila (including the
    [petitioner]) are mandated to implement the said wage order but limited to those entitled thereto. There is no legal basis
    to implement the same across-the-board. A perusal of the record shows that the lowest paid employee before the
    implementation of Wage Order #8 is P250.00/day and none was receiving below P223.50 minimum. This could only mean
    that the union can no longer demand for any wage distortion adjustment. Neither could they insist for an adjustment
    of P26.50 increase under Wage Order #8. The provision of wage order #8 and its implementing rules are very clear as to
    who are entitled to the P26.50/day increase, i.e., "private sector workers and employees in the National Capital Region
    receiving the prescribed daily minimum wage rate of P223.50 shall receive an increase of Twenty-Six Pesos and Fifty
    Centavos (P26.50) per day," and since the lowest paid is P250.00/day the company is not obliged to adjust the wages of
    the workers.
    With the above narration of facts and with the union not having effectively controverted the same, we find no merit to
    the complainants assertion of such a company practice in the grant of wage order increase applied across-the-board. The
    fact that it was shown the increases granted under the Wage Orders were obtained thru request and negotiations
    because of the existence of wage distortion and not as company practice as what the union would want.
    Neither do we find merit in the argument that under the CBA, such increase should be implemented across-the-board.
    The provision in the CBA that "Any Wage Order to be implemented by the Regional Tripartite Wage and Productivity
    Board shall be in addition to the wage increase adverted above" cannot be interpreted in support of an across-the-board
    increase. If such were the intentions of this provision, then the company could have simply accepted the original demand
    of the union for such across-the-board implementation, as set forth in their original proposal (Annex "2" union[]s counsel
    proposal). The fact that the company rejected this proposal can only mean that it was never its intention to agree, to
    such across-the-board implementation. Thus, the union will have to be contented with the increase of P30.00 under the
    CBA which is due on July 31, 2001 barely a month from now.38
    The error of the CA lies in its considering only the CBA in interpreting the wage adjustment provision, without taking into
    account Wage Order No. NCR-08, and the fact that the members of respondent Union were already receiving salaries
    higher than P250.00 a day when it was issued. The CBA cannot be considered independently of the wage order which
    respondent Union relied on for its claim.
    Wage Order No. NCR-08 clearly states that only those employees receiving salaries below the prescribed minimum wage
    are entitled to the wage increase provided therein, and not all employees across-the-board as respondent Union would
    want petitioner to do. Considering therefore that none of the members of respondent Union are receiving salaries below
    the P250.00 minimum wage, petitioner is not obliged to grant the wage increase to them.
    The ruling of the Court in Capitol Wireless, Inc. v. Bate39 is instructive on how to construe a CBA vis--vis a wage order.
    In that case, the company and the Union signed a CBA with a similar provision: "[s]hould there be any government
    mandated wage increases and/or allowances, the same shall be over and above the benefits herein
    granted."40 Thereafter, the Wage Board of the NCR issued several wage orders providing for an across-the-board increase
    in the minimum wage of all employees in the private sector. The company implemented the wage increases only to those
    employees covered by the wage orders - those receiving not more than the minimum wage. The Union protested,
    contending that, pursuant to said provision, any and all government-mandated increases in salaries and allowance should
    be granted to all employees across-the-board. The Court held as follows:
    x x x The wage orders did not grant across-the-board increases to all employees in the National Capital Region but limited
    such increases only to those already receiving wage rates not more than P125.00 per day under Wage Order Nos. NCR-01
    and NCR-01-A and P142.00 per day under Wage Order No. NCR-02. Since the wage orders specified who among the
    employees are entitled to the statutory wage increases, then the increases applied only to those mentioned therein. The
    provisions of the CBA should be read in harmony with the wage orders, whose benefits should be given only to those
    employees covered thereby. (Emphasis added)41
    In this case, as gleaned from the pleadings of the parties, respondent Union relied on a collateral agreement between it
    and petitioner, an agreement extrinsic of the CBA based on an alleged established practice of the latter as employer. The
    VA rejected this claim:
    Complainant Pag-Asa Steel Workers Union additionally advances the arguments that "there exist a collateral agreement to
    pay the equivalent of wage orders across the board or at least to negotiate how much will be paid" and that "parol
    evidence is now applicable to show or explain what the unclean provisions of the CBA means regarding wage
    adjustment." The respondent cites Article XXVII of the CBA in effect, as follows:
    "The parties acknowledged that during the negotiation which resulted in this AGREEMENT, each had the unlimited right &
    opportunity to make demands, claims and proposals of every kind and nature with respect to any subject or matter not
    removed by law from the Collective Bargaining and the understanding and agreements arrived at by the parties after the
    exercise of that right & opportunity are set forth in this AGREEMENT. Therefore, the COMPANY and the UNION, for the
    life of this AGREEMENT, agrees that neither party shall not be obligated to bargain collectively with respect to any subject
    matter not specifically referred to or covered in this AGREEMENT, and furthermore, that each party voluntarily &
    unqualifiedly waives such right even though such subject may not have been within the knowledge or contemplation of
    either or both of the parties at the time they signed this AGREEMENT."
    From the said CBA provision and upon an appreciation of the entire CBA, we find it to have more than amply covered all
    aspects of the collective bargaining. To allow alleged collateral agreements or parol/oral agreements would be violative of
    the CBA provision afore-quoted.42
    We agree with petitioners contention that the rule excluding parol evidence to vary or contradict a written agreement,
    does not extend so far as to preclude the admission of extrinsic evidence, to show prior or contemporaneous collateral
    parol agreements between the parties. Such evidence may be received regardless of whether or not the written
    agreement contains reference to such collateral agreement. 43 As the Court ruled in United Kimberly-Clark Employees
    Union, et al. v. Kimberly-Clark Philippines, Inc.:44
    A CBA is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly
    anticipate. It covers the whole employment relationship and prescribes the rights and duties of the parties. It is a system
    of industrial self-government with the grievance machinery at the very heart of the system. The parties solve their
    problems by molding a system of private law for all the problems which may arise and to provide for their solution in a
    way which will generally accord with the variant needs and desires of the parties.
    If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its
    stipulation shall prevail. However, if, in a CBA, the parties stipulate that the hirees must be presumed of employment
    qualification standards but fail to state such qualification standards in said CBA, the VA may resort to evidence extrinsic of
    the CBA to determine the full agreement intended by the parties. When a CBA may be expected to speak on a matter, but
    does not, its sentence imports ambiguity on that subject. The VA is not merely to rely on the cold and cryptic words on
    the face of the CBA but is mandated to discover the intention of the parties. Recognizing the inability of the parties to
    anticipate or address all future problems, gaps may be left to be filled in by reference to the practices of the industry, and
    the step which is equally a part of the CBA although not expressed in it. In order to ascertain the intention of the
    contracting parties, their contemporaneous and subsequent acts shall be principally considered. The VA may also consider
    and rely upon negotiating and contractual history of the parties, evidence of past practices interpreting ambiguous
    provisions. The VA has to examine such practices to determine the scope of their agreement, as where the provision of
    the CBA has been loosely formulated. Moreover, the CBA must be construed liberally rather than narrowly and technically
    and the Court must place a practical and realistic construction upon it. 45
    However, just like any other fact, habits, customs, usage or patterns of conduct must be proved. Thus was the ruling of
    the Court in Bank of Commerce v. Manalo, et al.:46
    Habit, custom, usage or pattern of conduct must be proved like any other facts. Courts must contend with the caveat
    that, before they admit evidence of usage, of habit or pattern of conduct, the offering party must establish the degree of
    specificity and frequency of uniform response that ensures more than a mere tendency to act in a given manner but
    rather, conduct that is semi-automatic in nature. The offering party must allege and prove specific, repetitive conduct that
    might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of evidence must be
    numerous enough to base on inference of systematic conduct. Mere similarity of contracts does not present the kind of
    sufficiently similar circumstances to outweigh the danger of prejudice and confusion.
    In determining whether the examples are numerous enough, and sufficiently regular, the key criteria are adequacy of
    sampling and uniformity of response. After all, habit means a course of behavior of a person regularly represented in like
    circumstances. It is only when examples offered to establish pattern of conduct or habit are numerous enough to lose an
    inference of systematic conduct that examples are admissible. The key criteria are adequacy of sampling and uniformity
    of response or ratio of reaction to situations.
    We have reviewed the records meticulously and find no evidence to prove that the grant of a wage-order-mandated
    increase to all the employees regardless of their salary rates on an agreement collateral to the CBA had ripened into
    company practice before the effectivity of Wage Order No. NCR-08. Respondent Union failed to adduce proof on the
    salaries of the employees prior to the issuance of each wage order to establish its allegation that, even if the employees
    were receiving salaries above the minimum wage and there was no wage distortion, they were still granted salary
    increase. Only the following lists of salaries of respondent Unions members were presented in evidence: (1) before Wage
    Order No. NCR-06 was issued; (2) after Wage Order No. NCR-06 was implemented; (3) after the grant of the first year
    increase under the CBA; (4) after Wage Order No. NCR-07 was implemented; and (5) after the second year increase in
    the CBA was implemented.
    The list of the employees salaries before Wage Order No. NCR-06 was implemented belie respondent Unions claim that
    the wage-order-mandated increases were given to employees despite the fact that they were receiving salaries above the
    minimum wage. This list proves that some employees were in fact receiving salaries below the P198.00 minimum wage
    rate prescribed by the wage order two rank-and-file employees in particular. As petitioner explains, a wage distortion
    occurred as a result of granting the increase to those employees who were receiving salaries below the prescribed
    minimum wage. The wage distortion necessitated the upward adjustment of the salaries of the other employees and not
    because it was a matter of company practice or usage. The situation of the employees before Wage Order No. NCR-08,
    however, was different. Not one of the members of respondent Union was then receiving less than P250.00 per day, the
    minimum wage requirement in said wage order.
    The only instance when petitioner admittedly implemented a wage order despite the fact that the employees were not
    receiving salaries below the minimum wage was under Wage Order No. NCR-07. Petitioner, however, explains that it did
    so because it was agreed upon in the CBA that should a wage increase be ordered within six months from its signing,
    petitioner would give the increase to the employees in addition to the CBA-mandated increases. Respondents isolated act
    could hardly be classified as a "company practice" or company usage that may be considered an enforceable obligation.
    Moreover, to ripen into a company practice that is demandable as a matter of right, the giving of the increase should not
    be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer.
    Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to a CBA, the
    same would not automatically ripen into a company practice. In this case, petitioner granted the increase under Wage
    Order No. NCR-07 on its belief that it was obliged to do so under the CBA.
    WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No.
    65171 and Resolution dated January 11, 2005 are REVERSED and SET ASIDE. The Decision of the Voluntary Arbitrator is
    REINSTATED. No costs.
    SO ORDERED.

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