Professional Documents
Culture Documents
L-23357 April 30, 1974 Relations, from the resolution of February 25, 1964 of the Presiding
Judge and three Associate Judges of the respondent Court of
Industrial Relations denying herein petitioners' motion for
MERCURY DRUG CO., INC. and MARIANO QUE, petitioners,
reconsideration of their decision dated January 17, 1964.
vs.
COURT OF INDUSTRIAL RELATIONS and NARDO
DAYAO, respondents. I
Caparas and Ilagan for petitioner. It is an established principle that the findings of fact of the Court of
Industrial Relations, when supported by substantial evidence, are
conclusive and binding on this Court (Sec. 6, R.A. No. 875; Phil. Fiber
E. M. Banzali for private respondent.
Processing Co., Inc. vs. CIR, L-29770, July 19, 1973, 52 SCRA 110,
114; Bulakea Rest. & Cat. vs. CIR, L-26796, May 25, 1972, 45 SCRA
87, 100; Compania Maritima vs. Compania Maritima Labor Union, L-
29504, Feb. 29, 1972, 43 SCRA 464, 468; Cruz vs. Phil. Assn. of Free
Labor Unions, L-26519, Oct. 29, 1971, 42 SCRA 68; Phil. Eng. Corp.
MAKASIAR, J.:p
vs. CIR, L-27880, Sept. 30, 1971, 41 SCRA 89; Castillo vs. CIR, L-
26124, May 29, 1971 39 SCRA 75, 83; Lakas ng Manggagawang
Petitioners Mercury Drug Co., Inc. and Mariano Que, as manager, Makabayan vs. CIR, L-32178, Dec. 28, 1970, 36 SCRA 600).
seek the reversal of the decision of respondent Court of Industrial
Relations dated January 17, 1964 and its order dated February 25,
If the respondent Court ignored the evidence adduced by herein
1964 denying petitioners' motion for reconsideration of the said petitioners, it would be guilty of grave abuse of discretion to warrant a
decision. review by Us of the findings of fact (Caltex Filipino, etc. vs. CIR, L-
30632-33, Apr. 11, 1972).
Private respondent Nardo Dayao was employed on February 13, 1956
by the petitioners originally as driver, later assigned as delivery man, Contrary to the contention of herein petitioners, the finding of fact that
then as checker and was last promoted to the position of assistant
herein private respondent Nardo Dayao was dismissed from the
chief checker in the checking department with the salary of P225.00 a service because of his union activities and that consequently herein
month until his separation on April 10, 1961. petitioners were guilty of unfair labor practice is amply substantiated by
credible evidence. Thus, the referee hearing officer, whose findings of
Dayao's appointment as checker states that his annual compensation fact and conclusions of law, were affirmed in toto by the respondent
was P2,400.00 "which includes the additional compensation for work Court to be "supported by the evidence and the law on the matter,"
on Sundays and legal holidays. Our firm being a Service Enterprise, stated in his report:
you will be required to perform work every day in a year as follows: 8
hours work on regular days and all special holidays that may be Dayao testified that on April 10, 1961, respondent
declared but with 25% additional compensation; 4 hours work on every Que summoned him in the office and inquired why
other Sunday of the month; 4 hours work on all legal holidays. For any he was organizing a new union in spite of the fact
work performed in excess of the hours as above mentioned, you shall
that there is already a labor organization existing
be paid 25% additional compensation per hour." (Exh. 2, pp. 59-60, in the company and when he replied: "I did this
rec.). thing because the company has not been paying
us the minimum wage the company has not been
Days before April 10, 1961, Dayao in vain urged herein petitioners to paying us for four hours work rendered on
pay them overtime pay, criticized their, employees' association for Sundays and also for four hours work rendered on
failing to protect the welfare of the employees by not securing such special holidays" (Tsn. pp. 8-9, July 10, 1963),
additional compensation for overtime, and campaigned among his co- respondent Que said: "Ah ganoon pala. So you
employees to organize another labor union. Hearing of Dayao's union are organizing a new union, if that is so, from now
activities, petitioner Mariano Que called for Dayao on April 10, 1961, on I do not like to see you any more in this office
told him to resign and persuaded him to accept the amount of P562.50 and you can no longer enter the service or work in
as termination pay and to sign a clearance stating to the effect that he the company, I don't like unionist" (Tsn. pp. 10-
has no claims whatsoever of any kind and nature against herein 11, ibid); that several minutes after he was told to
petitioners (Exh. 1). wait, respondent Que brought out an amount of
money and a piece of paper which he was asked
to sign before delivering to him the money that he
On April 25, 1963, exactly two years and fifteen days from his told respondent Que: "I cannot sign this paper
separation on April 10, 1961, Dayao filed a complaint for unfair labor because in fact and in truth I am not resigning
practice against herein petitioners for dismissing him because of his from the company" but respondent Que retorted:
having campaigned among his co-employees to become members of a whether you sign it or not, you could no longer
new labor union that he was then organizing (Annex A, pp. 19-20, work so you better sign it; and that "after thinking
rec.). about the matter that whether or not I sign the
paper I would be laid off and if I would be laid off I
In their answer dated May 10, 1963 to the ULP complaint, herein would have no money, so ultimately, I signed the
petitioners interposed as their only defense that Dayao "was separated paper and received the amount of P562.50 stated
from the service ... for cause because of creating trouble with another in the paper." (Tsn. pp. 11-12, ibid). The paper
employee who was also dismissed and that even if the said referred to is a cash voucher (Exhibit "A" and also
complainant was separated for cause, he received compensation pay Exhibit "4") covering complainant's separation pay
and hereby relieved respondent from whatever claim or claims that he of 15 days for every year of service.
had against respondents." Laches was not invoked by herein
petitioners in their answer (Annex B, pp. 21-22, rec.), nor in their Dayao also declared that the proximate or
memorandum dated October 28, 1963 (Annex C, pp. 23-32, rec.), immediate cause why he made efforts to organize
much less in their arguments dated February 12, 1964 in support of a separate union which he actually began in
their motion dated and filed on August 3, 1964 for the reconsideration February, 1961, "was because the management,
of the decision dated January 23, 1964. It is only in their instant petition particularly the manager, in spite of my several
for review filed on August 28, 1964 that they relied on laches, aside approaches to him, and in spite of my several
from estoppel, to defeat herein private respondent Dayao's ULP representations made to pay us the additional
charge, taking a cue from the dissent dated July 27, 1964 of Judge twenty-five percent and excess of the four hours
Emiliano R. Tabigne of the herein respondent Court of Industrial work on Sundays and legal holidays, did not like to
give us such right or such payment" and for the respondents (EXHIBIT "1"). Concepcion, however,
further reason that "our union, the Mercury Drug confessed no personal knowledge of the alleged
Company, Incorporated Employees" Union, was quarrel between Dayao and Ranin in the Apollo
anemic in that it did not do anything towards the Restaurant on the evening of April 8, 1961, except
welfare and protection of its member-employees, from what respondent Que told him on April 10,
like for example those employees who were 1961.
dismissed were not investigated and also I
approached our president of the union bringing to
Romualdo Reyes, secretary and legal counsel of
his attention my request to the manager about the
the corporation, among others, claimed that
payment of extra-compensation for work on
sometime before the separation of complainant,
Sundays and special holidays and our union
the latter had consulted him outside of the office
president told me that he could not do anything
about the vale system of the Association and
about that.' (Tsn. pp. 34-35, ibid). According to
asked his intercession so that said complainant
Dayao, among the employees he had convinced
could also get bigger vales like the other officers of
beginning February, 1961 and who agreed with
the Association but that he refused telling Dayao
him to organize another union were Josias
that the company has nothing to do about the
Fideras, Nestor Talampas, Armando de Leon,
matter for that is the affair of the Association. Atty.
Aladdin Dimagmaliw and Rogelio Orbeta.
Reyes was not present at the conference between
respondent Que and complainant Dayao on April
The testimonies of Josias Fideras and Nestor 10, 1961, and just like Concepcion, he was only
Talampas, assistant traffic supervisor and driver- informed by Que of what transpired therein.
delivery man, respectively, substantially
corroborated Dayao's declaration in material
In the examination in chief and in rebuttal, Dayao
points, in that sometime in February, 1961, the
denied having had a quarrel with the Association
latter talked to them to joining a new labor union
president, Apolinario Ranin, on any date before his
that he was organizing; that they were convinced
dismissal and also asserted that he is not aware of
of Dayao's explanations and agreed to go along
whether Ranin was also dismissed or not. Fideres
with his activities because of the management's
and Talampas also professed no knowledge about
aversion to pay them overtime on Sundays and
the alleged quarrel.
holidays and in of the fact that their Association in
the company was not good or it was not doing
anything for the interest of its welfare of its There is no question that complainant from the
members; and that Dayao was not able to formally respondents the two sums of money stated above,
organize a separate union, as planned, because as well as having signed Exhibits "1", "3" and "4".
he was discharged from the service of the There is also no dispute that he was called by
corporation. respondent Que in the Office on April 10, 1961,
and on that date was separated from employment.
The only question to be decided is whether Nardo
On the other hand, testifying on the cause of
Dayao was discharged due to union activities, as
complainant's separation from the service, the
he alleged, or for valid cause because of creating
president and general manager of the corporation,
trouble with another employee, as claimed by the
respondent Mariano Que, declared: "I think he
respondents.
(Dayao) quarreled with the president of their
union, as a matter of fact he even have his head
swollen, and he also threatened, I think Ranin. He After carefully scrutinizing the records and
even threatened that he would kill Ranin so I evidence adduced in this case, the Court is not
called them to the office to discuss the matter. I inclined to believe the version given by the
tried to pacify them, but they seem to be really respondents. Be it noted that there is no clear and
very very mad at each other and they wanted to positive proof establishing the fact that there really
quarrel. So I told them if that is the case, that they was a quarrel between Dayao and Ranin which
want to create scandal in the office, I think it would allegedly happened in the Apollo Restaurant on
be better for them to resign. At that time actually the night of April 8, 1961. Respondent Que's
they were in a furious mood that they could not be declaration that "I think" there was such a quarrel
pacified, so I requested that they resign from their and that he again "think" that Dayao would inflict
job because I did not want to affect the office, and bodily harm to Ranin could not be given credence
they both agreed that they resign." (Tsn. pp. 7-8, as it was only based on surmise and belief.
September 21, 1963). According to respondent Likewise, the testimonies of Jacinto Concepcion
Que, the quarrel between Dayao and Ranin and Romualdo Reyes regarding the said incident
happened on Saturday, April 8, 1961, in the Apollo could not be given probative weight because the
Restaurant. In other words, the alleged incident tales they narrated in Court relative thereto were
did not take place in the office or premises of the just information they received from respondent
respondent corporation. Que, who may be said is not a disinterested party
if not biased. And while it is incumbent upon
Concepcion to make investigation of troubles
Jacinto Concepcion, personnel manager and also
among the company employees in view of his
acting paymaster, stated that on Monday, April 10,
position as personnel manager, as he admitted, no
1961, upon instruction of Mariano Que, he
investigation was made in the case of Dayao and
prepared the cash voucher covering the
Ranin even after he was so informed of such
separation pay of Dayao of 15 days for every year
trouble. (Tsn. p. 69, J. Concepcion, August 31,
of service, as well as the corresponding check
1963). It must be noted that Dayao vehemently
therefor in the sum of P562.50 and that after
and steadfastly denied having had a quarrel with
Dayao had signed the voucher, the check was
Ranin on any given time and expressed no
delivered to him on that same day; and that Dayao
knowledge of whether Ranin was also discharged
likewise received the amount of P140.58
or is still in the employ of the corporation. In this
representing his salary for a certain period not
connection, it is significant that Ranin, then union
shown in the records (Exhibit "3"), and also signed
president and one of the alleged protagonists, who
a clearance statement to the effect that he has no
could very well corroborate respondent Que's
claims of whatever kind and nature against the
testimony on the incident and thus overcome
Dayao's denial, was not presented by the corporation because of his union activities. It has
respondents as a witness in this case, a been shown that his efforts and representations
circumstance which strongly militates against their made to respondent Que for the payment of
cause. overtime compensation and for the excess hours
of work rendered on Sundays and holidays were
of no avail. According to the respondents, such
But granting arguendo that the quarrel did really
claims are not tenable because they are fully
occur, the Court nevertheless is of the opinion that
covered by the contracts of employment. But, as
it could not be a sufficient basis for discharging
the records will indicate, Dayao believed otherwise
from employment complainant herein. The quarrel
and his stand was shared by the other employees,
admittedly took place in a restaurant far from the
like Josias Fideres and Ernesto Talampas. An
company premises and, therefore, did not and
examination of the employment or appointment
could not have prejudiced and affected in any
paper of Nardo Dayao, dated October 30, 1959
manner the normal course of business of the
(Exh. "B", also Exh. "2") would show that the
corporation nor, to say the least, has it relevant
contents thereof may be subject to interpretation,
bearing on the complainant's employment as there
more particularly with respect to whether the
is no showing that the incident happened during
employee is entitled to overtime or additional
complainant's official working time. The added
compensation to the "4 hours work on every
contention that the complainant resigned when
Sunday of the month" and "4 hours work on all
told to do so by respondent Que does not
legal holidays," or that the same is included in the
generate belief. It is worthy to mention that the
basic pay. But the Court refrains from passing on
complainant had been continuously in the service
the matter because that is not the issue in this
of the corporation for more than five years since
case. What is important to state is the fact that the
February 23, 1956, working as a driver, a delivery
management had received same request from the
man, a checker, and then as assistant to the chief
employees for clarification on whether they should
checker of the checking department. There is no
be given additional compensation for four hours
doubt his promotions in positions were with
work on Sundays and holidays. Thus, Concepcion
corresponding increase in pay. He is a family man.
declared
His employment in the corporation is his only
means of livelihood. This being so and taking into
account the prohibitive prices of prime necessities HEARING OFFICER (To the witness)
in life nowadays, the tightness of money and
scarcity of employment opportunities being felt not
On this particular matter of
only in metropolitan areas but also in rural and
four hours work on every
urban places, it is hard to believe that Dayao
other Sunday of the month
would be so irresponsible and reckless to resign
and four hours work on legal
his position. He never intended leaving the service
holidays, have you received a
of the corporation but, as the records demonstrate
request for clarification of
the receipt of the money, execution of Exhibits "1",
such matter,
"3" and "4", and consequent separation from
employment were forced upon him. There was no
actual physical force employed by respondent Que THE WITNESS
upon the person of Davao into making him sign
the documents and receive the termination pay.
But the act of the president and general manager Yes, sir. (Tsn. p. 87, August
of the corporation in telling complainant herein that 31, 1963)
whether or not he signs the documents he would
be dismissed just the same could be said a direct Moreover, according to Atty. Reyes, in a special
threat and a display of force and authority which meeting of the Mercury Drug Company, Inc.
afforded Dayao no alternative but to obey as he Employees' Association held on August 31, 1969,
was bided to do. While troubles among the he took the opportunity to explain to those
employees, according to personnel manager gathered in the said meeting that the additional
Concepcion, are investigated by him, no such compensation for the four hours work on Sundays
investigation was conducted by him regarding the and holidays is already included in their basic pay,
alleged trouble between Dayao and Ranin which only demonstrate that there was already a
"because I did not want to prejudice the general clamor then for such additional pay. The foregoing
manager inasmuch as he was personally handling buttress the complainant's assertion that on
the case." (Tsn. p. 69, August 31, 1963). If several occasions he had requested respondent
Concepcion, who belongs to the managerial staff, Que for the payment of such additional
was fearful of antagonizing the president and compensation, a fact not denied or rebutted by the
general manager of the corporation, how much said respondent.
more of a minor employee like Dayao. Under such
a situation, it is believed that no reasonable
person would do less than what Dayao did in It has also been established that Dayao brought to
signing the documents and receiving the amount the attention of the president of the Association
of his separation pay. But acceptance of the matter of additional compensation with the
termination pay does not divest a laborer the right view to having their union make a concerted
to prosecute his employer for unfair labor practice request from management for the payment thereof
acts (PMC vs. National Labor Union, 48 O.G. but Apolinario Ranin, then the Association
2765; Philippine Sugar Institute vs. CIR, et al., president, told him that nothing could be done
G.R. No. L-13475, Sept. 29, 1960), much less for about his request. This piece of evidence
signing the clearance paper, Exhibit "1", remained unrebutted also because Ranin was not
considering the attendant circumstances called by the respondents to testify in this case. In
surrounding the execution of the same. (See also relation thereto, there is reason to believe that the
Sec. 5[a], R.A. 875). Association had been less vigorous and potent as
an existing labor organization because before and
after the present dispute arose, it had and still
The fact is that complainant herein was given the continues to have as its presidents persons
separation pay and told to leave the service of the occupying managerial and high confidential
positions, whose interests are evidently allied with The insistence on the part of petitioners that the acceptance by private
that of the management. This conclusion finds respondent Dayao of a separation pay and his signing a renunciation
further support from the testimony of the present of any other claim against herein petitioners, militates against the
Association president, Jacinto Concepcion, that he charge of unfair labor practice gets into the teeth of the principle that
was unaware of any meeting held during the such waiver of the rights of labor contravenes public policy and
incumbency of his predecessor, Apolinario Ranin, therefore null and void, more so in this case when the root cause of the
and that it was through his personal talks with union activities of Dayao was precisely motivated by his campaign for
management and not through the representation additional compensation for overtime pay under the Eight-Hour Labor
of the Association that the employees have been Law, against which claim estoppel or laches is unavailing (see Manila
granted each a sack of rice or equivalent value of Terminal Co., Inc. vs. CIR, et. al., 91 Phil. 625); because acceptance of
P25.00 a month and also the benefit of group termination pay does not divest a laborer of the right to prosecute his
insurance. What is even worse is that Concepcion employer for unfair labor practice acts (Carino vs. ACCFA, L-19808,
could not state the names of the other officers of Sept. 29, 1966, 18 SCRA 183, 190; DMC vs. National Labor Union, 48
the Association during his incumbency, as well as O.G. 2765; Phil. Sugar Institute vs. CIR, et. al., L-13475, Sept. 29,
during the term of office of Ranin. "Considering the 1960). As Mr. Justice Conrado Sanchez, speaking for the Court in the
foregoing facts and circumstances, there is reason Carino case, supra, stated: "Acceptance of those benefits would not
to believe complainant's assertion that due to the amount to estoppel. The reason is plain. Employer and employee,
failure of the management to pay them the obviously, do not stand on the same footing. The employer drove the
additional compensation for services on Sundays employee to the wall. The latter must have to get hold of money.
and holidays and for the excess of the four hours Because, out of job, he had to face the harsh necessities of life. He
work on said days and compounded by the refusal thus found himself in no position to resist money preferred him. His,
of the then Association president to take common then, in a case of adherence, not of choice. One thing sure, however,
cause with his request for the payment of such is that petitioners did not relent on their claim. They pressed it. They
money claim, he did plan to form a separate union, are deemed not to have waived any of their rights. Renuntiatio non
no doubt, upon the hypothesis that in union there praesumitur."
is strength. The records show that beginning
February, 1961, he put into effect his plan by
As in the case at bar, private respondent has never relented in his
campaigning among his co-employees in the
claim. His filing was merely delayed and he is pressing it.
respondent corporation, like Josias Fideres,
Nestor Talampas, Armando de Leon, Aladdin
Dimagmaliw and Rogelio Orbeta. That he really From the time he was employed as checker, private respondent was
exerted efforts talking to, and convincing, the made to waive his right for additional compensation for overtime pay
employees and laborers of the corporation to join under the appointment extended to him (see pp. 59-60, rec., or pp. 14-
with him in organizing a new union was 15, Annex F). Said qualified appointment is clearly an exploitation of
satisfactorily substantiated and corroborated by the employee who would be compelled to work more than eight hours
two witnesses, Fideres and Talampas, whose on Sundays and legal holidays without additional compensation, since
presence in Court it may be worth mentioning in his appointment additional compensation for work on Sundays and
was made possible by the complainant herein holidays was deemed or expressly included in his annual salary of
only through the coercive processes of the Court. P2,400.00. Under such an appointment, he can be required to work for
They, however, declared that the new union was four hours every Sunday and for four hours on every legal holiday
formally established, as planned, due to the without additional pay.
complainant's separation from the service.
III
Be it emphasized that respondent Que never
disclaimed knowledge of charging employee's
It is true that unfair labor practice charge with the prayer for
union activity. In his testimony, he did not state or
in any way insinuate that he was not aware of reinstatement with back wages should be filed within a reasonable
Dayao's union activity before April 10, 1961. It was period of time. But laches, like estoppel, should also be alleged as a
defense in the answer, otherwise the same is considered renounced.
Concepcion who expressed into the records no
knowledge of the activity of Dayao, but whose Petitioners failed to expressly allege the same in their answer to the
testimony to that effect, nevertheless, is of no ULP charge, in their memorandum and in their motion for
reconsideration of the CIR decision.
moment considering that he had no hand nor was
he consulted by respondent Que in the punitive
action taken against Dayao. The evidence, However, the lapse of two years and 15 days from the dismissal from
therefore, of the complainant that respondent Que the service to the filing of the ULP charge is not an unreasonable
came to know of his activity of trying to organize period of time under the circumstances.
another union before his discharge remained
unassailed.
In this respect, the statute of limitations prescribed by the Civil Code of
the Philippines should apply in the absence of any other specific legal
From all the foregoing discussion, it is clear that provision. Article 1146 of the Civil Code of the Philippines directs that
the preponderance of evidence sustains a finding the action upon an injury to the rights of the plaintiff must be instituted
in favor of the complainant's version of what within four years. An action upon a contract should be filed within 10
occurred between him and respondent Que in the years (Art. 1144, CCP). All other actions whose periods are not fixed in
office of the corporation on April 10, 1961, and the the Civil Code or in other laws must be brought within five years from
Court, therefore, holds that respondents have the time the right of action accrues (Art. 1149, CCP). Whether the ULP
interfered with complainant's union activity and charge is based on an injury to the rights of Dayao or placed under the
that his dismissal from employment was category of all other actions for which no law prescribes the time limit
discriminatory. (Pp. 35-42, rec.). for their institution, the filing by respondent Dayao of the ULP charge
against herein petitioners was well within either the prescriptive period.
It should be stressed that the 1935 Constitution has been very
The foregoing searching analysis by the hearing officer of the evidence
submitted by the parties in the hearing of the unfair labor practice solicitous for the welfare of labor and expressly stated that the State
charge, is so impressive and so logical that his findings of facts and shall afford protection to labor (Sec. 6, Art. XIV, 1935 Constitution) and
expressly committed itself to the promotion of social justice to insure
conclusions of law were unqualifiedly adhered to by the four members
of the respondent Court of Industrial Relations. WE can do no less. the well-being and economic security of all the people (Sec. 5, Art. II,
1935 Constitution). The 1973 Constitution expanded such guarantees
and imposes upon the State the duty to "assure the rights of workers to
II self-organization, collective bargaining, security of tenure, and just and
humane conditions of work," after stipulating that the State "shall SO ORDERED.
promote full employment and equality in employment, insure equal
work opportunities regardless of sex, race or creed" (Sec. 9, Art. II,
Makalintal, C.J., Zaldivar, Castro, Fernando, Barredo, Antonio,
1973 Constitution). WE would be denying such constitutional
Esguerra, Fernandez, Muoz Palma and Aquino, JJ., concur.
guarantees to herein private respondent Dayao, if the position of
herein petitioners were sustained.
Finally, if the dismissal of herein private respondent Dayao was for just
cause, then there was no reason for petitioners-employers to give him
termination pay; because under the Termination Pay Law, otherwise
known as Republic Act No. 1052, as amended by Republic Act No.
1787, the employee whose services are terminated for just cause is
not entitled to termination pay (Sec. 1, Rep. Act No. 1052, as
amended).
Even under the Termination Pay Law, the alleged quarrel between
private respondent Dayao and one Ranin, the president of the labor
union, in the presence of herein petitioner Mariano Que as manager of G.R. No. 100898 July 5, 1993
petitioner corporation, is not one of the grounds justifying the dismissal
of private respondent Dayao. It is not even analogous to "serious ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO
misconduct or willful disobedience of the orders of his employer or its BANCOLITA, GIL DE GUZMAN, and FEDERATION OF
representative in connection with his work." Even if it were conceded DEMOCRATIC LABOR UNIONS, (FEDLU), petitioners,
that private respondent Dayao verbally quarrelled with the former vs.
president of their employees' association in the presence of manager NATIONAL LABOR RELATIONS COMMISSION (SECOND
Mariano Que and that both ignored the latter's admonition for them to DIVISION), HUI KAM CHANG (In his capacity as General Manager
stop quarrelling, at most the same was discourtesy which was not of Occidental Foundry Corporation), OCCIDENTAL FOUNDRY
intended considering the origin of their quarrel the failure of Ranin, CORPORATION, MACEDONIO S. VELASCO (In his capacity as
former president of the labor union, to fight for overtime pay for representative of the Federation of Free Workers), GENARO
services rendered on Sundays and holidays. Such discourtesy, at CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO
most, merits merely a reprimand or admonition but not outright LLENA, GODOFREDO PACHECO, MARCELINO CASTILLO,
dismissal, since it did not involve the efficiency nor honesty of private GEORGE IGNAS, PIO DOMINGO, and JAIME
respondent Dayao. The fact that Dayao had been in the service for five BAYNADO, respondents.
years and ten months, during which period of time he was promoted
from driver to delivery man, to checker and finally to assistant chief
checker in the Checking Department with a salary of P225.00 a month Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.
demonstrates his efficiency, competence and trustworthiness.
While this case was submitted for decision on March 29, 1965, the The petition for certiorari before us seeks to annul and set aside: (a)
delay in its resolution is not due to the parties. However, it should be the decision dated June 20, 1991 of the Second Division of the
noted that private respondent Dayao filed his ULP charge with National Labor Relations Commission (NLRC) (Penned by
reinstatement and back wages about two years and fifteen days after Commissioner Rustico L. Diokno and concurred in by Presiding
his separation on April 10, 1961. As aforestated, the shortest Commissioner Edna Bonto-Perez and Commissioner Domingo H.
prescriptive period for the filing of all other actions for which the statute Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor
of limitations does not fix a period, is four years. The period of delay in Arbiter Eduardo J. Carpio dismissing the complaint for illegal dismissal
instituting this ULP charge with claim for reinstatement and back and unfair labor practice on the ground that both the company and the
wages, although within the prescriptive period, should be deducted union merely complied with the collective bargaining agreement
from the liability of the employer to him for back wages. In order that provision sanctioning the termination of any employee who fails to
the employee however should be relieved from proving his income retain membership in good standing with the union; and (b) the NLRC
during the period he was out of the service and the employer from resolution denying the motion for the reconsideration of said decision
submitting counter-proofs, which may delay the execution of the (NLRC NCR Case No. 00-10-04855-89).
decision, the employer in the case at bar should be directed to pay
private respondent Dayao back wages equivalent to one year, eleven
months, and fifteen days without further disqualifications. Petitioners were regular and permanent employees of the Occidental
Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila
which was under the management of Hui Kam Chang. As piece
In fairness to the employer, he should not be compelled to reinstate an workers, petitioners' earnings ranged from P110 to P140 a day. They
employee who is no longer physically fit for the job from which he was had been in the employ of OFC for about ten years at the time of their
illegally ousted. dismissal in 1989 (p. 38, Rollo).
WHEREFORE, THE PETITION IS HEREBY DISMISSED AND On January 5, 1989, the Samahang Manggagawa ng Occidental
PETITIONERS ARE HEREBY DIRECTED: Foundry Corporation-FFW (SAMAHAN) and the OFC entered into a
collective bargaining agreement (CBA) which would be effective for the
(1) TO PAY PRIVATE RESPONDENT NARDO DAYAO BACK three-year period between October 1, 1988 and September 30, 1991
WAGES EQUIVALENT TO ONE YEAR, ELEVEN MONTHS, AND (Memorandum for OFC and Hui Kam Chang, p. 6, Rollo; p. 551).
FIFTEEN DAYS; . Article II thereof provides for a union security clause thus:
(2) TO REINSTATE HIM AFTER CERTIFICATION OF HIS PHYSICAL Sec. 1 The company agrees that all permanent
FITNESS BY A GOVERNMENT PHYSICIAN; AND and regular factory workers in the company who
are members in good standing of the union or who
thereafter may become members, shall as a
(3) TO PAY THE COSTS. condition of continued employment, maintain their
membership in the union in good standing for the which they sent the Federation of Democratic Labor Unions (FEDLU).
duration of the agreement. They volunteered therein to be admitted as members of the FEDLU
and requested that they be represented ("katawanin") by said
federation before the DOLE in the complaint which they intended to file
xxx xxx xxx
against the union (SAMAHAN), the FFW and the company for illegal
dismissal, reinstatement, and other benefits in accordance with law
Sec. 3 The parties agree that failure to retain (p. 74, Rollo).
membership in good standing with the UNION
shall be ground for the operation of paragraph 1
Thereafter, on various dates, petitioners sent individual letters to Hui
hereof and the dismissal by the company of the
Kam Chang professing innocence of the charges levelled against them
aforesaid employee upon written request by the
by the SAMAHAN and the FFW and pleading that they be reinstated
union. The aforesaid request shall be
(pp. 69-73, Rollo). Their letters appear to have elicited no response.
accompanied by a verified carbon original of the
Board of (sic) Resolution by the UNION signed by
at least a majority of its officers/directors. (p. Thus, contending that their dismissal was without cause and in utter
562, Rollo.) disregard of their right to due process of law, petitioners, through the
FEDLU, filed a complaint for illegal dismissal and unfair labor practice
before the NLRC against Hui Kam Chang, OFC, Macedonio S.
On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the
Velasco (as representative of the FFW) the FFW, and the SAMAHAN
Department of Labor and Employment (DOLE), a complaint for the
officers headed by Capitle (p. 75, Rollo).
expulsion from SAMAHAN of the following officers: Genaro Capitle
(president), Jesus Tumagan (vice-president), Godofredo Pacheco
(auditor), and Marcelino Pacheco (board member) (Case No. NCR-00- In due course, after the case was ventilated through position papers
M-89-11-01). The complaint was founded on said officers' alleged and other documents, the labor arbiter rendered a decision dismissing
inattentiveness to the economic demands of the workers. However, on petitioners' complaint (pp. 79-89, Rollo). He found that in dismissing
September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the petitioners, OFC was "merely complying with the mandatory provisions
petition (p. 590, Rollo). of the CBA the law between it and the union." He added:
On September 10, 1989, petitioners conducted a special election of To register compliance with the said covenant, all
officers of the SAMAHAN (pp. 205 & 583, Rollo). Said election was, that is necessary is a written request of the union
however, later questioned by the FFW. Nonetheless, the elected set of requesting dismissal of the employees who have
officers tried to dissuade the OFC from remitting union dues to the failed to retain membership in good standing with
officers led by Capitle who were allied with the FFW. Later, however, the union. The matter or question, therefore of
Romulo Erlano, one of the officers elected at the special election, determining why and how did complainants fail to
manifested to the DOLE that he was no longer objecting to the retain membership in good standing is not for the
remittance of union dues to the officers led by Capitle. Petitioners' company to inquire via formal investigation. By
move to stage a strike based on economic demands was also later having the request of the union, a legal
disowned by members of the SAMAHAN. presumption that the request was born out of a
formal inquiry by the union that subject employees
failed to exist. This means generally that where a
The intraunion squabble came to a head when, on September 11,
valid closed shop or similar agreement is in force
1989, a resolution expelling petitioners from the SAMAHAN was issued
with respect to a particular bargaining unit as in
by the aforesaid union officials headed by Capitle, together with board
the case a quo, the employer shall refuse to
members George Ignas, Pio Domingo, and Jaime Baynado (pp. 286 &
employ any person unless he is a member of the
599, Rollo). The following day, Capitle sent OFC the following letter:
majority union and the employer shall dismiss
employees who fail to retain their membership in
Mr. Hui Kam Chang the majority union. This must be deemed a just
General Manager cause recognized by law and jurisprudence. The
Malanday, Valenzuela effect is discrimination to encourage membership
Metro Manila in other unions. (pp. 86-87, Rollo.)
Dear Mr. Chang: Hence, the labor arbiter concluded, the dismissal of petitioners was an
exercise of legitimate management prerogative which cannot be
considered as an unfair labor practice. On whether the SAMAHAN and
In compliance with Article II, Sec. 3 of the Union Security Clause as the FFW could be held liable for illegal dismissal and unfair labor
enunciated in our Collective Bargaining Agreement, I would like you to practice, the arbiter opined that since there was no employer-employee
dismiss the following employees on the ground of failure to retain
relationship between petitioners and respondent unions, the complaint
membership in good standing: against the latter has no factual and legal bases, because petitioners
"should not have confused expulsion from membership in the union as
1. Alex Ferrer one and the same incident to their subsequent employment
2. Gil de Guzman termination."
3. Henry Diaz
4. Domingo Bancolita
Consequently, petitioners appealed to the NLRC on the grounds that
5. Rafael Ferrer, Jr. there was prima facie evidence of abuse of discretion on the part of the
labor arbiter and that he committed serious errors in his findings of
Attached herewith is the verified carbon original of the Board facts.
Resolution of the union signed by the majority of its officers/directors.
On June 20, 1991, the NLRC rendered the herein questioned decision
Thank you very much. affirming in toto the decision of the arbiter. Petitioners motion for the
reconsideration of the NLRC decision having been denied, they
resorted to the instant petition for certiorari which presents the issue of
wether or not respondent Commision gravely t abused its discretion in
affirming the decision of the labor arbiter which is allegedly in defiance
Although petitioners received this letter weeks after its date, it appears of the elementary principles of procedural due process as the
that on that same date, they had learned about their dismissal from petitioners were summarily dismissed from employment without an
employment as shown by the letter also dated September 13, 1989
investigation having been conducted by the OFC on the veracity of the SAMAHAN had failed to maintain their membership in good standing in
allegation of the SAMAHAN-FFW that they violated the CBA. accordance with the CBA, it summarily dismissed petitioners. To make
matters worse, the labor arbiter and the NLRC shared the same view
in holding that "(t)he matter or question, therefore, of determining why
A CBA is the law between the company and the union and compliance
and how did complainants fail to retain membership in good standing is
therewith is mandated by the express policy to give protection to labor.
not for the company to inquire via formal investigation" (pp. 87 &
Said policy should be given paramount consideration unless otherwise
135, Rollo). In this regard, the following words of my learned brother,
provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50
Mr. Justice Feliciano, in the Resolution in Cario are apt:
[1990]. A CBA provision for a closed shop is a valid form of union
security and it is not a restriction on the right or freedom of association
guaranteed by the Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 4. Turning now to the involvement of the Company
SCRA 87 [1981]. However, in the implementation of the provisions of in the dismissal of petitioner Cario, we note that
the CBA, both parties thereto should see to it that no right is violated or the Company upon being formally advised in
impaired. In the case at bar, while it is true that the CBA between OFC writing of the expulsion of petitioner Cario from
and the SAMAHAN provided for the dismissal of employees who have the Union, in turn simply issued a termination letter
not maintained their membership in the union, the manner in which the to Cario, the termination being made effective the
dismissal was enforced left much to be desired in terms of respect for very next day. We believe that the Company
the right of petitioners to procedural due process. should have given petitioner Cario an opportunity
to explain his side of the controversy with the
Union. Notwithstanding the Union's Security
In the first place, the union has a specific provision for the permanent
Clause in the CBA, the Company should have
or temporary "expulsion" of its erring members in its constitution and
reasonably satisfied itself by its own inquiry that
by-laws ("saligang batas at alituntunin"). Under the heading
the Union had not been merely acting arbitrarily
membership and removal ("pag-aanib at pagtitiwalag"), it states:
and capriciously in impeaching and expelling
petitioner Cario . . .
Sec. 4. Ang sinumang kasapi ay maaring itwalag
(sic) ng Samahan pangsamantala o tuluyan sa
xxx xxx xxx
pamamagitan (sic) ng tatlo't ikaapat () na bahagi
ng dami ng bilang ng Pamunuang
Tagapagpaganap. Pagkaraan lamang sa pandinig 5. We conclude that the Company had failed to
sa kanyang kaso. Batay sa sumusunod: accord to petitioner Cario the latter's right to
procedural due process. The right of an employee
to be informed of the charges against him and to
(a) Sinumang gumawa ng mga bagay bagay na
reasonable opportunity to present his side in a
labag at lihis sa patakaran ng Samahan.
controversy with either the Company or his own
Union, is not wiped away by a Union Security
(b) Sinumang gumawa ng mga bagay na Clause or a Union Shop Clause in a CBA. An
maaaring ikabuwag ng Samahan. employee is entitled to be protected not only from
a company which disregards his rights but also
from his own Union the leadership of which could
(c) Hindi paghuhulog ng butaw sa loob ng tatlong yield to the temptation of swift and arbitrary
buwan na walang sakit o Doctor's Certificate.
expulsion from membership and hence dismissal
from his job. (pp. 186 & 189.)
(d) Hindi pagbibigay ng abuloy na itinatadhana ng
Samahan.
The need for a company investigation is founded on the consistent
ruling of this Court that the twin requirements of notice and hearing
(e) Sinumang kasapi na natanggal sa kapisanan which are essential elements of due process must be met in
at gustong, sumapi uli ay magpapanibago ng employment-termination cases. The employee concerned must be
bilang, mula sa taon ng kanyang pagsapi uli sa notified of the employer's intent to dismiss him and of the reason or
Samahan. (Emphasis supplied; Ibid., p. 177). reasons for the proposed dismissal. The hearing affords the employee
an opportunity to answer the charge or charges against him and to
defend himself therefrom before dismissal is effected (Kwikway
No hearing ("pandinig") was ever conducted by the SAMAHAN to look Engineering Works vs. NLRC, 195 SCRA 526 [1991]; Salaw vs. NLRC,
into petitioners' explanation of their moves to oust the union leadership 202 SCRA 7 [1991]). Observance to the letter of company rules on
under Capitle, or their subsequent affiliation with FEDLU. While it is investigation of an employee about to be dismissed is not mandatory. It
true that petitioners' actions might have precipitated divisiveness and, is enough that there is due notice and hearing before a decision to
later, showed disloyalty to the union, still, the SAMAHAN should have dismiss is made (Mendoza vs. NLRC, 195 SCRA 606 (1991]). But
observed its own constitution and by-laws by giving petitioners an even if no hearing is conducted, the requirement of due process would
opportunity to air their side and explain their moves. If, after an have been met where a chance to explain a party's side of the
investigation the petitioners were found to have violated union rules, controversy had been accorded him (Philippine Airlines, Inc. vs. NLRC,
then and only then should they be subjected to proper disciplinary 198 SCRA 748 [1991]).
measures.
With the passage of Republic Act No. 6715 which took effect on March
21, 1989, Article 279 of the Labor Code was amended to read as
follows: G.R. No. 96779 November 10, 1993
PINE CITY EDUCATIONAL CENTER and EUGENIO complainants immediately to their former positions
BALTAO, petitioners, and to pay their full backwages and other benefits
vs. and privileges without qualification and deduction
THE NATIONAL LABOR RELATIONS COMMISSION (THIRD from the time they were dismissed up to their
DIVISION) and DANGWA BENTREZ, ROLAND PICART, APOLLO actual reinstatement.
RIBAYA, SR., RUPERTA RIBAYA, VIRGINIA BOADO, CECILIA
EMOCLING, JANE BENTREZ, LEILA DOMINGUEZ, ROSE ANN
Thus respondents should pay complainants the
BERMUDEZ and LUCIA CHAN, respondents.
following:
For their part, petitioners contended that private respondents' a) Latest salary per month P1,648.00
separation from employment, apart from their poor performance, was b) Multiplied by period covered x 10 months
due to the expiration of the periods stipulated in their respective
contracts. In the case of private respondent Dangwa Bentrez, the c) Equals backwages due P16,480.00
duration of his employment contract was for one year, or beginning
June, 1988 to March 1989 whereas in the case of the other private
respondents, the duration of their employment contracts was for one 6) ROSE ANN BERMUDEZ
semester, or beginning November, 1988 to March 1989. These
stipulations were the laws that governed their relationships, and there a) Latest salary per month P2,600.00
was nothing in said contracts which was contrary to law, morals, good b) Multiplied by period covered x 10 months
customs and public policy. They argued further that they cannot be
compelled o enter into new contracts with private respondents. they c) Equals backwages due P26,000.00
concluded that the separation of private respondents from the service
was justified.
7) DANGWA BENTREZ
In support of this decision, the Labor Arbiter rationalized that the Insofar as the private respondents who knowingly and voluntarily
teacher's contracts2 are vague and do not include the specific agreed upon fixed periods of employment are concerned, their
description of duties and assignments of private respondents. They do services were lawfully terminated by reason of the expiration of the
not categorically state that there will be no renewal because their periods of their respective contracts. These are Dangwa Bentrez,
appointments automatically terminate at the end of the semester. Apollo Ribaya, Sr., Ruperta Ribaya, Virginia Boado, Cecilia Emocling,
Petitioners did not present any written evidence to substantiate their Jose Bentrez, Leila Dominguez and Rose Ann Bermudez. Thus, public
allegation that the Academic Committee has evaluated private respondent committed grave abuse of discretion in affirming the
respondents' performance during their one semester employment. On decision of the Labor Arbiter ordering the reinstatement and payment
the contrary, they were hastily dismissed. of full backwages and other benefits and privileges.
On appeal to the National Labor Relations Commission, the decision With respect to private respondents Roland Picart and Lucia Chan,
was affirmed in toto in its resolution dated November 29, 1990, with the both of whom did not sign any contract fixing the periods of their
additional reasoning that "the stipulation in the contract providing for a employment nor to have knowingly and voluntarily agreed upon fixed
definite period in the employment of complainant is obviously null and periods of employment, petitioners had the burden of proving that the
void, as such stipulation directly assails the safeguards laid down in termination of their services was legal. As probationary employees,
Article 280 (of the Labor Code), 3 which explicitly abhors the they are likewise protected by the security of tenure provision of the
consideration of written or oral agreements pertaining to definite period Constitution. Consequently, they cannot be removed from their
in regular employments. 4 Hence, the present petition for certiorari with positions unless for cause. 10 On the other hand, petitioner contended
prayer for the issuance of a temporary restraining order. that base don the evaluation of the Academic Committee their
performance as teachers was poor. The Labor Arbiter, however, was
not convinced. Thus he found as follows:
As prayed for, this Court issued a temporary restraining order on
March 11, 1991, enjoining respondents from enforcing the questioned
resolution.5 Respondents likewise aver that the Academic
Committee has evaluated their performance
during their one semester employment (see
Petitioners raise this sole issue: "THAT THERE IS PRIMA Annexes "M" to "X" of complainants' position
FACIE EVIDENCE OF GRAVE ABUSE OF DISCRETION ON THE
paper). However, they did not present any written
proofs or evidence to support their allegation. 11
G.R. No. 111651 November 28, 1996
xxx xxx xxx
OSMALIK S. BUSTAMANTE, PAULINO A. BANTAYAN,
There is absolutely nothing in the record which will FERNANDO L. BUSTAMANTE, MARIO D. SUMONOD, and SABU J.
show that the complainants were afforded even an LAMARAN, petitioners,
iota of chance to refute respondents' allegations vs.
that the complainants did not meet the reasonable NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION,
standards and criteria set by the school. . . .12 and EVERGREEN FARMS, INC. respondents.
We concur with these factual findings, there being no showing that RESOLUTION
they were resolved arbitrarily. 13 Thus, the order for their reinstatement
and payment of full backwages and other benefits and privileges from
the time they were dismissed up to their actual reinstatement is proper,
conformably with Article 279 of the Labor Code, as amended by
Section 34 of Republic Act No. 6715, 14 which took effect on March 21, PADILLA, J.:
1989. 15 It should be noted that private respondents Roland Picart and
Lucia Chan were dismissed illegally on March 31, 1989, or after the
effectivity of said amendatory law. However, in ascertaining the total On 15 March 1996, the Court (First Division) promulgated a decision in
amount of backwages payable to them, we go back to the rule prior to this case, the dispositive part of which states:
the mercury drug rule 16 that the total amount derived from employment
elsewhere by the employee from the date of dismissal up to the date of WHEREFORE, the Resolution of the National
reinstatement, if any, should be deducted therefrom. 17 We restate the Labor Relations Commission dated 3 May 1993 is
underlying reason that employees should not be permitted to enrich modified in that its deletion of the award for
themselves at the expense of their employer.18In addition, the law backwages in favor of petitioners, is SET ASIDE.
abhors double compensation.19 to this extent, our ruling in Alex Ferrer, The decision of the Labor Arbiter dated 26 April
et al., v. NLRC, et al.,G.R. No. 100898, promulgated on July 5, 1993, is 1991 is AFFIRMED with the modification that
hereby modified. backwages shall be paid to petitioners from the
time of their illegal dismissal on 25 June 1990 up
Public respondent cannot claim not knowing the ruling in to the date of their reinstatement. If reinstatement
the Brent case because in its questioned resolution, it is stated that is no longer feasible, a one-month salary shall be
one of the cases invoked by petitioners in their appeal is said paid the petitioners as ordered in the labor
case.20 This notwithstanding, it disregarded Our ruling therein without arbiter's decision, in addition to the adjudged
any reason at all and expressed the erroneous view that: backwages.
The agreement of the parties fixing a definite date Private respondent now moves to reconsider the decision on grounds
for the termination of the employment relations is that (a) petitioners are not entitled to recover backwages because they
contrary to the specific provision of Article 280. not actually dismissed but their probationary employment was not
being contrary to law, the agreement cannot be converted to permanent employment; and (b) assuming that petitioners
legitimized. . . . 21 are entitled to backwages, computation thereof should not start from
cessation of work up to actual reinstatement, and that salary earned
elsewhere (during the period of illegal dismissal) should be deducted
Stare decisis et no quieta movere. Once a case ha been decided one from the award such backwages.
way, then another case, involving exactly the same point at issue,
should be decided in the same manner. Public respondent had no
choice on the matter. It could not have ruled in any other way. This There is no compelling reason to reconsider the decision of the Court
Tribunal having spoken in the Brent case, its duty was to obey. 22 Let it (First Division) dated 15 March 1996. However, we here clarify the
be warned that to defy its decisions is to court contempt. 23 computation of backwages due an employee on account of his illegal
dismissal from employment.
In accordance with these provisions, backpay (the same as . . . an award of back wages equivalent to three
backwages) could be awarded where, in the opinion of the Court of years (where the case is not terminated sooner)
Industrial Relations (CIR), such was necessary to effectuate the should serve as the base figure for such awards
policies of the Industrial Peace without deduction, subject to deduction where
Act. 1 Only in one case was backpay a matter of right, that was, when there are mitigating circumstances in favor of the
an employer had declared a lockout without having first bargained employer but subject to increase by way of
collectively with his employees in accordance with the provisions of the exemplary damages where there are aggravating
Act. circumstances (e.g. oppression or dilatory
appeals) on the employer's part. 10
As the CIR was given wide discretion to grant or disallow payment of
backpay (backwages) to an employee, it also had the implied power of The proposal on the three-year backwages was subsequently adopted
mitigating (reducing) the backpay where backpay was allowed. 2 Thus, in later cases, among them, Feati University Faculty
in the exercise of its jurisdiction, the CIR increased or diminished the Club (PAFLU) v. Feati University (No. L-31503, 15 August 1974, 58
award of backpay, depending on several circumstances, among them, SCRA 395), Luzon Stevedoring Corporation v. CIR (No. L-34300, 22
the good faith of the employer, 3 the employee's employment in other November 1974, 61 SCRA 154), Danao Development Corporation
establishments during, the period of illegal dismissal, or the probability v. NLRC (Nos. L-40706 and L-40707, 16 February 1978, 81 SCRA
that the employee could have realized net earnings from outside 487), Associated Anglo-American Tobacco Corporation v.Lazaro (No.
employment if he had exercised due diligence to search for outside 63779, 27 October 1983, 125 SCRA 463), Philippine National Oil
employment. 4 In labor cases decided during the effectivity of R.A. No. Company - Energy Development Corporation v. Leogardo (G.R. No.
875, this Court acknowledged and upheld the CIR's authority to deduct 58494, 5 July 1989, 175 SCRA 26).
any amount from the employee's backwages, 5 including the discretion
to reduce such award of backwages whatever earnings were obtained
Then came Presidential Decree No. 442 (the Labor Code of
by the employee elsewhere during the period of his illegal
Philippines) which was signed into law on 1 May 1974 and which took
dismissal. 6 In the case of Itogon-Suyoc Mines, Inc. v. Sagilo-Itogon
effect on 1 November 1974. Its posture on the award of backwages, as
Workers' Union, 7 this Court restated the guidelines for determination of
amended, was expressed as follows.
total backwages, thus:
In accordance with the above provision, an illegally dismissed MARANAW HOTELS AND RESORTS CORPORATION (CENTURY
employee is entitled to his full backwages from the time his PARK SHERATON MANILA), petitioner,
compensation was witheld from him (which, as a rule, is from the time vs.
of his illegal dismissal) up to the time of his actual reinstatement. It is COURT OF APPEALS, HON. SANTIAGO O. TAADA (Voluntary
true that this Court had ruled in the case of Pines City Educational Arbitrator) and GREGORIO GALE, respondents.
Center vs. NLRC (G.R. No. 96779, 10 November 1993, 227 SCRA
655) that "in ascertaining the total amount of backwages payable to
them (employees), we go back to the rule prior to the Mercury Drug
rule that the total amount derived from employment elsewhere by the
employee from the date of dismissal up to the date of reinstatement, if BELLOSILLO, J.:
any, should be deducted therefrom." 15 The rationale for such ruling
was that, the earnings derived elsewhere by the dismissed employee
while litigating the legality of his dismissal, should be deducted from For blurting out offensive remarks 1 against his supervisors in their
the full amount of backwages which the law grants him upon absence but promptly reported to them, private respondent Gregorio
reinstatement, so as not to unduly or unjustly enrich the employee at Gale, a roomboy at the five-star Century Park Sheraton Manila owned
the sense of the employer. and operated by petitioner Maranaw Hotels and Resorts Corporation,
was dismissed for "discourtesy and use of disrespectful and impolite
language against a superior which constitutes gross misconduct."
The Court deems it appropriate, however, to reconsider such earlier on
the computation of backwages as enunciated in said Pines City
Educational Center case, by now holding that comformably with the Gregorio Gale subsequently instituted a complaint for illegal dismissal
evident legislative intent as expressed in Rep. Act No. 6715, above- which, conformably with their collective bargaining agreement, was
quoted, backwages to be awarded to an illegally dismissed employee, then submitted to retired Judge Santiago O. Taada for voluntary
should not, as general rule, be diminished or reduced by the earnings arbitration.
derived by him elsewhere during the period of his illegal dismissal. The
underlying reason of this ruling is that the employee, while litigating the On 13 December 1989, after hearing and the submission of the
legality (illegality) of his dismissal, must still earn a living to support evidence, position papers and memoranda of the parties, Voluntary
himself and family, while his backwages have to be paid by the Arbitrator Taada rendered a decision pertinent portions of which read
employer as part of the price or penalty he has to pay for illegally
dismissing his employee. The clear legislative intent of the amendment
in Rep. Act No. 6715 is to give more benefits to workers than was
previously given them under the Mercury Drug rule or the "deduction of After going over the evidence adduced by the
earnings elsewhere" rule. Thus, a closer adherence to the legislative parties, the Arbitrator finds no evidence that there
policy behind Rep. Act No. 6715 points to "full backwages" as meaning was fighting, nor challenging to a fight, no
exactly that, i.e., without deducting from backwages the earnings assaulting nor intimidation of co-employees or
derived elsewhere by the concerned employee during the period of his supervisors within the hotel premises. What was
illegal dismissal. 16 In other words, the provision handling for "full established as per evidence on record was more
backwages" to illegally dismissed employees is clear, plain and free of discourtesy, and use of disrespectful and
from ambiguity and, therefore, must be applied without attempted or impolite language uttered by complainant which
strained interpretation. Index animi sermo est. 17 falls under Section 2, Rule VI of the Rules of the
Hotel and carries the penalty of 7 days of
suspension for first offense. The evidence shows it
Therefore, in accordance with R.A. No. 6715, petitioners are entitled was a first offense.
on their full backwages, inclusive of allowances and other benefits or
their monetary equivalent, from the time their actual compensation was
withheld on them up to the time of their actual reinstatement. IN VIEW OF THE FOREGOING, the Arbitrator
finds and so holds that complainant Gregorio Gale
has violated Section 2, Rule VI of the Rules of the
As to reinstatement of petitioners, this Court has already ruled that Hotel and orders his suspension for a period of
reinstatement is no longer feasible, because the company would be seven (7) days. However, as per admission of the
adjustly prejudiced by the continued employment of petitioners who at parties, Mr. Gale has already been dismissed. In
present are overage, a separation pay equal to one-month salary case complainant Mr. Gale has been out of his job
granted to them in the Labor Arbiter's decision was in order and, as roomboy of the Hotel for more than that period
therefore, affirmed on the Court's decision of 15 March 1996. of 7 days, his immediate reinstatement is hereby
Furthermore, since reinstatement on this case is no longer feasible, the ordered with right to collect his share in the service
amount of backwages shall be computed from the time of their illegal charge. 2
termination on 25 June 1990 up to the time of finality of this decision. 18
And while We have continued applying the rule in New Manila Candy
We reiterated the principle against unjust enrichment in East Asiatic
Workers Union (Naconwa-Paflu) v. CIR 23 in some cases, e.g., Panday
Co., Ltd. v. CIR 19
v. NLRC 24 where five (5) years' backwages were decreed on account
of employer's unfair labor practice and evident bad faith, the general
In other words, the just and equitable rule rule remains: where the illegal dismissal transpired before the
regarding the point under discussion is this: It is effectivity of R.A. 6715, or before 21 March 1989, the award of
the obligation of the employer to pay an illegally backwages in favor of the dismissed employee is limited to three (3)
dismissed employee or worker the whole amount years without deduction or qualification. 25
of the salaries or wages, plus all other benefits
and bonuses and general increases, to which he
In the case before Us, since the illegal dismissal of private respondent
would have been normally entitled had he not
occurred on 4 December 1987, or before R.A. 6715 took effect on 21
been dismissed and had not stopped working, but
March 1989, he is entitled only to three (3) years' backwages, inclusive
it is the right, on the other hand, of the employer to
of all allowances and other benefits, without deducting any
deduct from the total of these, the amount
renumerations he may have received as member of the Armed Forces
equivalent to the salaries or wages the employee
of the Philippines, or from any other employment, and not to his full
or worker would have earned in his old
wages from the time he was dismissed up to the present. Certainly,
employment on the corresponding days that he
private respondent cannot be allowed to receive salary from petitioner
was actually gainfully employed elsewhere with an
for the whole duration that he was not working as roomboy by reason
equal or higher salary or wage, such that if his
of his unjust dismissal, while at the same time, draw compensation as
salary or wage in his other employment was less,
member of the Armed Forces of the Philippines which would not have
the employer may deduct only what has been
been possible had he continued to work for petitioner; for that would be
actually earned.
unjust enrichment. Consequently, if private respondent already
received more than what he is entitled to in accordance herewith, he
Although the principle that no one should be allowed to enrich himself should reimburse petitioner such amount in excess of what is due him;
at the expense of another has thus far endured, We have, however, otherwise, petitioner should make good the corresponding deficiency.
modified the rule. In the course of time We have adopted the policy of
fixing the amount of backwages at a just and reasonable level without
WHEREFORE, except as herein above modified, the Decision of 24
qualification or deduction so as to free the employees from the burden
October 1991 and the Resolution of 4 December 1991 of respondent
of proving their earnings during their layoffs and the employer from
Court of Appeals are hereby AFFIRMED. No costs.
submitting counter proofs and thus obviate the twin evils of idleness on
the part of employees and attrition and delay by the employer in
satisfying the award. This practice has been hailed as a realistic, SO ORDERED.
reasonable and mutually beneficial solution. An award of backwages
equivalent to three (3) years (where the case is not terminated sooner)
serves as the base figure, without qualification or deduction. 20 Cruz, Padilla and Grio-Aquino, JJ., concur.
12 However, the Agency claims that the complainants, after being placed
In their memoranda, the Agency poses this question:
off-detail, abandoned their employ. The solicitor general, siding with
the Agency and the labor arbiter, contends that while abandonment of
. . . [Whether . . . Sentinel is guillty of illegal employment is inconsistent with the filing of a complaint for illegal
dismissal[,] dismissal, such rule is not applicable "where [the complainant]
expressly rejects this relief and asks for separation pay instead."
On the other hand, the Client raises the following issues: 13
The Court disagrees. Abandonment, as a just and valid cause for
termination, requires a deliberate and unjustified refusal of an
Whether . . . [the complainants] were illegally
employee to resume his work, coupled with a clear absence of any
dismissed by their employer, Sentinel Security
intention of returning to his or her work. 16 That complainants, did not
Agency, Inc., and in holding petitioner to be
pray for reinstatement is not sufficient proof of abandonment. A strong
equally liable therefor.
indication of the intention of complainants to resume work is their
allegation that on several dates they reported to the Agency for
Whether . . . petitioner is jointly and severally liable reassignment, but were not given any. In fact, the contention of
with Sentinel Security Agency, Inc., in the latter's complainant is that the Agency constructively dismissed them.
payment of backwages, 13th month pay and Abandonment has recently been ruled to be incompatible with
service incentive leave pay to its employees . . . . constructive dismissal. We, thus, rule that complainants did not
abandon their jobs. 17
We will now demonstrate why we believe complainants were illegally prescribed by the Labor Code, pursuant to Articles 106, 107 and 109
dismissed. thereof, which we quote hereunder:
In several cases, the Court has recognized the prerogative of Art. 106. Contractor or subcontractor.
management to transfer an employee from one office to another within Whenever an employer enters into a contract with
the same business establishment, as the exigency of the business my another person for the performance of the
require, provided that the said transfer does nor result in a demotion in former['s] work, the employees of the contractor
rank or a diminution in salary, benefits and other privileges of the and of the latter['s] subcontractor, if any, shall be
employee; 18 or is not unreasonable, inconvenient or prejudicial to the paid in accordance with the provisions of this
latter; 19 or is not used as a subterfuge by the employer to rid himself of Code.
an undesirable worker. 20
In the event that the contractor or subcontractor
A transfer means a movement (1) from one position to another of fails to pay the wages of his employees in
equivalent rank, level or salary, without a break in the service; 21 and accordance with this Code, the employer shall be
(2) from one office to another within the same business jointly and severally liable with his contractor or
establishment. 22 It is distinguished from a promotion in the sense that subcontractor to such employees to the extent of
it involves a lateral change as opposed to a scalar ascent. 23 the work performed under the contract, in the
same manner and extent that he is liable to
employees directly employed by him.
In this case, transfer of the complainants implied more than a relief
from duty to give them time to rest a mere "changing of the guards.
"Rather, their transfer connoted a reshuffling or exchange of their The Secretary of Labor may, by appropriate
posts, or their reassignment to other posts, such that no security guard regulations, restrict or prohibit the contracting out
would be without an assignment. of labor to protect the rights of workers established
under this Code. In so prohibiting or restricting, he
may make appropriate distinctions between labor-
However, this legally recognized concept of transfer was not
only contracting and job contracting as well as
implemented. The Agency hired new security guards to replace the
differentiations within these types of contracting
complainants, resulting in a lack of posts to which the complainants
and determine who among the parties involved
could have been reassigned. Thus, it refused to reassign Complainant
shall be considered the employer for purposes of
Andoy when he reported for duty on February 2, 4 and 7, 1994; and
this Code, to prevent any violation or
merely told the other complainants on various dates from January 25
circumvention of any provision of this Code.
to 27, 1994 that they were already too old to be posted anywhere.
Hence, the herein petition alleging that the petitioner was denied due
process of law by the NLRC and it committed a grave abuse of
discretion in considering private respondents as employees of
petitioner, in ruling that the "floating status" of private respondents
G.R. Nos. 82823-24 July 31, 1989 amounted to an illegal dismissal, and in causing the execution of the
judgment pending a complete and full adjudication of the issues.
AGRO COMMERCIAL SECURITY SERVICES AGENCY,
INC., petitioner, Forthwith, the allegation of denial of due process is without basis.
vs. Petitioner was afforded the opportunity to file its position paper. It even
THE NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR entered into a stipulation of facts with private respondent.
ARBITER BIENVENIDO V. HERMOGENES and MANUEL JIMENEZ.
ET AL., respondents.
As to the issue of employer-employee relationship, an examination of
the records shows that private respondents are regular employees of
San Juan, Gonzalez, San Agustin & Sinense for petitioner. petitioner. Their individual length of service ranges from four (4) to
more than ten (10) years. In accordance with the stipulation of facts, it
Mauricio Law Office for private respondents. appears that private respondents worked with petitioner as security
guards/janitors Their employment contracts provide, among others:
e) That the AGENCY may terminate or dismiss the SECURITY From the foregoing it is clear that when
GUARD, if, after proper and due investigation it is shown that the the bonafide suspension of the operation of a
SECURITY GUARD has violated any rule, regulation, code of conduct business or undertaking exceeds six (6) months
and discipline, imposed by the AGENCY; then the employment of the employee shall be
deemed terminated. By the same token and
applying the said rule by analogy to security
f) That the terms and conditions pertinent to service and discipline
guards, if they remained without work or
embodied in the Agreement executed between the AGENCY and any assignment that is in "floating status" for a period
person, establishment, or entity with whom the SECURITY GUARD is exceeding six (6) months, then they are in effect
going to serve or is assigned shall be considered part of this
constructively dismissed.
Agreement and therefore binding on SECURITY GUARD. 2
Obviously, the filing of the complaint was premature. Apparently, this SO ORDERED.
issue was not raised at all and so it is deemed waived. Thus, when the
labor arbiter rendered his decision, he considered those who have Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.
been out of work or "floating status" for a period exceeding six (6)
months to have been terminated from the service without just cause
thus entitling them to the corresponding benefits for such separation.
We agree.