THIRD DIVISION

[ G.R. No. 175678, August 22, 2012 ]

BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. BANK OF THE

PHILIPPINE ISLANDS EMPLOYEES UNION- METRO MANILA, 22
AUGUST 2012 RESPONDENT.

DECISION

PERALTA, J.:
For resolution of this Court is the Petition for Review under Rule 45 of the
Revised Rules of Court, dated January 20, 2007, of petitioner Bank of the
Philippine Islands (BPI) which seeks to reverse and set aside the Court of
Appeals' (CA) Decision[1] and Resolution,[2] dated June 8, 2006 and
November 29, 2006, respectively, in CA-G.R. SP No. 83387.

The antecedent facts follow.

Respondent Bank of the Philippine Islands Employees Union-Metro Manila

(BPIEU-MM), a legitimate labor organization and the sole and exclusive
bargaining representative of all the regular rank-and-file employees of
petitioner BPI in Metro Manila and petitioner BPI have an existing
Collective Bargaining Agreement (CBA)[3] which took effect on April 1,
2001. The CBA provides for loan benefits and relatively low interest rates.
The said provisions state:

Article VIII - Fringe Benefits

xxxx

Section 14. Multi-Purpose Loan, Real Estate Secured Housing Loan and
Car Loan. - The Bank agrees to continue and maintain its present policy
and practice, embodied in its Collective Bargaining Agreement with the
Union which expired on 31 March 2001, extending to qualified regular
employees the multi-purpose and real estate secured housing loans, subject
to the increased limits and provisions hereinbelow, to wit:
(a) Multi-Purpose Loan not exceeding FORTY THOUSAND PESOS
(P40,000.00), payable within the period not exceeding three (3) years via
semi-monthly salary deductions, with interest at the rate of eight percent
(8%) per annum computed on the diminishing balance.

(b) Real Estate-Secured Housing Loan not exceeding FOUR HUNDRED

FIFTY THOUSAND " PESOS (P450,000.00), payable over a period not
exceeding fifteen (15) years via semi-monthly salary deductions, with
interest at the rate of nine percent (9%) per annum computed on the
diminishing balance.

The rate of interest on real estate secured loans, however, may be reduced
to six percent (6%) per annum, subject to the following conditions:

1. If the loan is accepted for coverage by the Home Insurance and Guaranty
Corporation (HIGC).

2. The HIGC premium shall be paid by the borrower.

3. The borrower procures a Mortgage Redemption Insurance coverage from

an insurance company selected by the BANK.

4. The BANK may increase the six percent (6%) interest if the HIGC or the
Government imposes new conditions or restrictions necessitating a higher
interest in order to maintain the BANK'S position before such conditions or
restrictions were imposed.

5. Such other terms or conditions imposed or which may be imposed by the

HIGC.

6. It is distinctly understood that the rate of interest shall automatically

revert to nine percent (9%) per annum upon cancellation of the HIGC
coverage for any cause.

The BANK shall make strong representations with the Bangko Sentral ng
Pilipinas for a second upgrade and/or availment under the Housing Loan
Program.
(c) Car Loan. - The BANK shall submit a revised plan for the approval of the
Bangko Sentral ng Pilipinas which shall incorporate a car loan program in
its existing Housing Loan Program. The said car loan shall be a sub-limit
under the program such that any availment thereof shall operate to
decrease the available housing loan limit. Therefore, the combined amount
of both housing and car loans that may be availed of shall not exceed FOUR
HUNDRED FIFTY THOUSAND PESOS (P450,000.00). This supplemental
revision of the loan program shall be subject to the rules and regulations
{e.g., amount of sub-limit, credit ratio, type and age of vehicle, interest rate,
etc.) which the BANK may promulgate, and to the terms of the approval of
the Bangko Sentral ng Pilipinas.

The multi-purpose and housing loans stated in the next preceding

paragraphs, as well as the car loan which shall be incorporated in the
housing loan program, shall be subject further to the applicable provisions,
guidelines and restrictions set forth in the Central Bank Circular No. 561, as
amended by Central Bank Circular No. 689, and to the rules, regulations
and policies of the BANK on such loans insofar as they do not violate the
provisions, guidelines and restrictions set forth in said Central Bank
Circular No. 561, as amended.

Section 15. Emergency Loans. - The BANK agrees to increase the amount of
emergency loans assistance, upon approval by the Central Bank of the
Philippines, from a maximum amount of Ten Thousand Pesos (PI
0,000.00) to a maximum amount of Fifteen Thousand Pesos (P15,000.00)
to qualified employees intended to cover emergencies only, i.e., expenses
incurred but could not be foreseen such as those arising from natural
calamities, emergency medical treatment and/or hospitalization of an
employee and/or his immediate family and other genuine emergency cases
of serious hardship as the BANK may determine. Hospital expenses for
caesarian delivery of a female employee or an employee's wife not covered
by the Group Hospitalization Insurance Plan shall qualify for the
emergency loan.

Emergency loans shall be playable in twenty-four (24) months via semi-

monthly salary deductions and shall be charged interest at the minimal rate
of Seven percent (7%) per annum for the first P10,000.00 and Nine percent
(9%) for the additional P5.000.00 computed on the diminishing balance.
The emergency loan assistance program shall be governed by the rules,
regulations and policies of the BANK and such amendments or
modifications thereof which the BANK may issue from time to time.[4]

Thereafter, petitioner issued a "no negative data bank policy"[5] for the
implementation/availment of the manpower loans which the respondent
objected to, thus, resulting into labor-management dialogues. Unsatisfied
with the result of those dialogues, respondent brought the matter to the
grievance machinery and afterwards, the issue, not having been resolved,
the parties raised it to the Voluntary Arbitrator.

In his decision, the Voluntary Arbitrator found merit in the respondent's

cause. Hence, the dispositive portion of the said decision reads as follows:

WHEREFORE, viewed in the light of the foregoing circumstances, this

Arbitrator hereby rules:

1. That the imposition of the NO NEGATIVE DATA BANK as a new

condition for the implementation and availment of the manpower loan
benefits by the employees evidently violates the CBA;

2. That all employees who were not allowed or deprived of the manpower
loan benefits due to the NO NEGATIVE DATA BANK POLICY be
immediately granted in accordance with their respective loan benefits
applied for;

3. That the respondent herein is ordered likewise to pay ten percent (10%)
of the total amount of all loans to be granted to all employees concerned as
Attorney's Fees; and

4. That the parties herein are directed to report compliance with the above
directives within ten (10) days from receipt of this ORDER.

SO ORDERED.[6]

Aggrieved, petitioner appealed the case to the CA via Rule 43, but the latter
affirmed the decision of the Voluntary Arbitrator with the modification that
the award of attorney's fees be deleted. The dispositive portion states:
WHEREFORE, premises considered, the Voluntary Arbitrator's Decision
dated April 5, 2004 is hereby AFFIRMED with the MODIFICATION that
the award of attorney's fees is hereby deleted.

SO ORDERED.[7]
Petitioner filed a motion for reconsideration, but it was denied in a
Resolution[8] dated November 29, 2006.

Hence, the present petition.

Petitioner raises the following arguments:

A. The "No NDB policy" is a valid and reasonable requirement that is

consistent with sound banking practice and is meant to inculcate among
officers and employees of the petitioner the need for fiscal responsibility
and discipline, especially in an industry where the element of trust is
paramount.

B. The "No NDB policy" does not violate the parties' Collective Bargaining
Agreement.

C. The "No NDB policy" conforms to existing BSP regulations and circulars,
and to safe and sound banking practices.[9]

Respondent, on the other hand, claims that the petition did not comply
with Section 4, Rule 45 of the Revised Rules of Court and must be
dismissed outright in accordance with Section 5 of the same rule; that the
CA did not commit any reversible error in the questioned judgment to
warrant the exercise of its discretionary appellate jurisdiction; and that the
Voluntary Arbitrator and the CA duly passed upon the same issues raised in
the instant petition and their decisions are based on substantial evidence
and are in accordance with law and jurisprudence.[10]

Tn its Reply[11] dated September 21, 2007, petitioner reiterates the issues it
presented in its petition. It also argues that the present petition must not be
dismissed based on mere technicality.
Subsequently, the parties submitted their respective memoranda.

Petitioner's arguments are mere rehash of those it raised in the CA. It

insists that the rationale behind the use of the "no negative data bank
policy" aims to encourage employees of a banking institution to exercise the
highest standards of conduct, considering the bank's fiduciary relationship
with its depositors and clients. It likewise contends that a scrutiny of the
CBA reveals an express conformity to petitioner's prerogative to issue
policies that would guide the parties in the availment of manpower loans
under the CBA.

Furthermore, petitioner avers that the subject policy does not only conform
to the provisions of the parties' CBA, but it is also in harmony with the
circulars and regulations of the Bangko Sentral ng Pilipinas.

The petition lacks merit.

In a petition for review on certiorari, this Court's jurisdiction is limited to

reviewing errors of law in the absence of any showing that the factual
findings complained of are devoid of support in the records or are glaringly
erroneous.[13] Firm is the doctrine that this Court is not a trier of facts, and
this applies with greater force in labor cases.[14] The issues presented by the
petitioner are factual in nature. Nevertheless, the CA committed no error in
its questioned decision and resolution.

A CBA refers to the negotiated contract between a legitimate labor

organization and the employer concerning wages, hours of work and all
other terms and conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries.[15] As in
all other contracts, there must be clear indications that the parties reached
a meeting of the minds.[16] Therefore, the terms and conditions of a CBA
constitute the law between the parties.[17]

The CBA in this case contains no provision on the "no negative data bank
policy" as a prerequisite in the entitlement of the benefits it set forth for the
employees. In fact, a close reading of the CBA would show that the terms
and conditions contained therein relative to the availment of the loans are
plain and clear, thus, all they need is the proper implementation in order to
reach their objective. The CA was, therefore, correct when it ruled that,
although it can be said that petitioner is authorized to issue rules and
regulations pertinent to the availment and administration of the loans
under the CBA, the additional rules and regulations, however, must not
impose new conditions which are not contemplated in the CBA and should
be within the realm of reasonableness. The "no negative data bank policy"
is a new condition which is never contemplated in the CBA and at some
points, unreasonable to the employees because it provides that before an
employee or his/her spouse can avail of the loan benefits under the CBA,
the said employee or his/her spouse must not be listed in the negative data
bank, or if previously listed therein, must obtain a clearance at least one
year or six months as the case may be, prior to a loan application.

It must be remembered that negotiations between an employer and a union

transpire before they agree on the terms and conditions contained in the
CBA. If the petitioner, indeed, intended to include a "no negative data bank
policy" in the CBA, it should have presented such proposal to the union
during the negotiations. To include such policy after the effectivity of the
CBA is deceptive and goes beyond the original agreement between the
contracting parties.

This Court also notes petitioner's argument that the "no negative data bank
policy" is intended to exact a high standard of conduct from its employees.
However, the terms and conditions of the CBA must prevail. Petitioner can
propose the inclusion of the said policy upon the expiration of the CBA,
during the negotiations for a new CBA, but in the meantime, it has to honor
the provisions of the existing CBA.

Article 1702 of the New Civil Code provides that, in case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety
and decent living of the laborer. Thus, this Court has ruled that any doubt
or ambiguity in the contract between management and the union members
should be resolved in favor of the latter.[18] Therefore, there is no doubt, in
this case, that the welfare of the laborers stands supreme.

WHEREFORE, the Petition for Review under Rule 45 of the Revised

Rules of Court, dated January 20, 2007, of petitioner Bank of the
Philippine Islands, is hereby DENIED and the Court of Appeals' Decision
and Resolution, dated June 8, 2006 and November 29, 2006, respectively,
are hereby AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

CHERRY J. PRICE, STEPHANIE G. G.R. No. 178505

DOMINGO AND LOLITA
ARBILERA, Petitioners, Present:

- versus - YNARES-SANTIAGO, J.,

Chairperson,
INNODATA PHILS. INC.,/ INNODATA
CORPORATION, LEO RABANG AND AUSTRIA-MARTINEZ,
JANE NAVARETTE, Respondents. 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
EMPLOYEE’s 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-à-vis the
completion of the project, this contract shall automatically terminate.

6.3 COMPANY’s 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 Complaint6 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 attorney’s 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. Attorney’s fees (10% of total award) 13,946.40

Total Award P153,410.40

Respondent INNODATA appealed the Labor Arbiter’s Decision to the NLRC.

The NLRC, in its Decision dated 14 December 2001, reversed the Labor
Arbiter’s 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. Theresa’s 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
EMPLOYEE’s 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 employee’s 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 pay31 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 attorney’s 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 attorney’s fees. Costs
against respondent Innodata Philippines, Inc./Innodata Corporation.

SO ORDERED.
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 petition for review on certiorari under Rule 45 of the Rules of Court. The
1

petition challenges the 20 July 2006 Decision and 11 September 2006 Resolution of
2 3

the Court of Appeals in CA-G.R. SP No. 94004. The Court of Appeals set aside the 17
October 2005 and 24 January 2006 Resolutions of the National Labor
4 5

Relations Commission (NLRC) in CA No. 044428-05, affirming the 6 July 2004

Decision of the Labor Arbiter in NLRC NCR Case No. 05-06181-03.
6

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 memorandum dated 2 May
7

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 one’s duty which disrupt/obstruct Company’s 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 Gurango’s 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
Gurango’s head against the floor and provoked him to fight back.

Gurango’s 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 Albao’s gun. Albao and Gurango engaged in a fistfight. Cordero, Pablis, and
another security guard, Fredrick Lañada, 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 report and 9

advised Gurango to rest for three days.

In a letter dated 5 May 2003, BCPI asked Gurango to explain in writing why no
10

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 letter to BCPI 11

narrating what happened. On 8 May 2003, Gurango wrote another letter to BCPI 12

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 Company’s Code of Discipline.

Another issue is the preventive suspension I’m 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 letter to BCPI narrating what he saw. Juanitas
14

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 ako’y 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 Lañada 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
ni Alex hanggang sa naitulak ko sila papunta sa guardhouse. Ng sa loob na
ng guardhousehindi 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,
Lañada 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 Albao dahil 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 letter to BCPI stating that:
16
 I again would like to reiterate that I was never involved nor commit [sic] any
violation of Company’s 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 complaint against Albao, Cordero and Pablis for slight
18

physical injury.

In a letter dated 19 May 2003, BCPI dismissed Gurango effective 20 May 2003.
19

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 Company’s 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 one’s 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 Arbiter’s 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 complainant’s 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 complainant’s statement is freshly unblemished, and, therefore, very

credible while Albao’s contradictory statement is the fruit of afterthought.

Moreover, I don’t 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 NLRC’s Ruling

In its 17 October 2005 Resolution, the NLRC affirmed in toto the Labor Arbiter’s 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
complainant’s 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
company’s 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 complainant’s 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 guard” and that engaging
23

in a fistfight constituted serious misconduct.

Gurango filed a motion for reconsideration, which the Court of Appeals denied in its
24

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 Court’s 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, the 25

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, the Court held that:
27

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 employee’s 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 Albao’s statement, BCPI did not present any evidence
to show that Gurango engaged in a fistfight. Moreover, there is no showing that
Gurango’s 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 respondent’s actions
were motivated by a perverse and wrongful intent, as required by Article 282(a) of
the Labor Code. (Emphasis supplied)
29

The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in
his 9 May 2003 letter to BCPI, Juanitas corroborated Gurango’s version of the facts;
(2) nobody corroborated Albao’s 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 Gurango’s statement credible and unblemished; (6) the Labor
Arbiter found Albao’s 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 Albao’s 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.