25. Retirement Pay

FIRST DIVISION

[G.R. No. 117174. November 13, 1996.]

CAPITOL WIRELESS, INC., petitioner, vs. HONORABLE

SECRETARY MA. NIEVES R. CONFESOR and KILUSANG

MANGGAGAWA NG CAPWIRE KMC-NAFLU, respondents.

R. M. Lee & Associates for petitioner.

The Solicitor General for public respondent.

Flores Saladero Bunao & Olalia Law Offices for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF

EMPLOYMENT; CRITERIA IN SELECTING EMPLOYEES TO BE DISMISSED.

Petitioner misses the point. Its violation of due process consists in its failure, as found by

respondent Secretary of Labor, to apprise respondent Union of any fair and reasonable

criteria for implementation of its redundancy program. In Asiaworld we laid down the

principle that in selecting the employees to be dismissed a fair and reasonable criteria

must be used, such as but not limited to: (a) less preferred status (e.g., temporary

employee), (b) efficiency and (c) seniority. Although the case of Asiaworld dealt with

retrenchment, still the principle is applicable to the present case because in effecting the

dismissals petitioner had to select from among its employees. cdasia

2. ID.; ID.; ID.; REDUNDANCY PROGRAM, THE COMPANY MUST APPRAISE

THE UNION OF ANY FAIR AND REASONABLE CRITERIA FOR ITS

IMPLEMENTATION. As has been made clear, even this Office recognized that an

authorized cause for dismissal did exist; what it could not countenance is the means

employed by the Company in making the cause effective. But no matter what kind of

justification the Company presents now, this has become moot, academic and irrelevant.

The same should have been communicated to the affected employees prior to or

simultaneously with the implementation of the redundancy, or at the very least, before the

assailed order was rendered. In any event, the explanation being advanced by the

Company now purportedly based on areas of assignment loses significance from the

more compelling viewpoint of efficiency and seniority. For instance, during the period

covered by the Company's own time and motion analysis, Rogelio Varona delivered 96

messages but was dismissed; Resurrecion Bordeos delivered only an average of 75 but

was retained. In terms of seniority, the Company itself states that "Ms. Bordeos holds the

same position/area as Rogelio Varona, however, she was retained because she is more

senior than the latter." The Company should look at its own evidence again. Bordeos had

only 16 years of service. Varona had 19, Neves 18, and Valle, Basig and Santos 17, yet

all five were dismissed. One should also consider that the redundancy was implemented

at the height of bargaining negotiations. The bargaining process could have been the best

opportunity for the Company to apprise the Union of the necessity for redundancy. For

unknown reasons, the Company did not take advantage of it. Intended or not, the

redundancy reinforced the conditions for a deadlock, giving the Union members the

impression that it was being used by the Company to obtain a bargaining leverage.

3. ID.; ID.; ID.; WHERE PROCEDURAL DUE PROCESS WAS NOT AFFORDED

THE DISMISSED EMPLOYEES THE EMPLOYER MUST INDEMNIFY THE

FORMER; THE MEASURE OF THE AWARD DEPENDS ON THE FACTS OF EACH

CASE AND THE GRAVITY OF THE OMISSION COMMITTED BY THE

EMPLOYER. Petitioner argues next that granting that procedural due process was not

afforded the dismissed employees, still, the award of two (2) months salary for each of

them is not in accord with existing jurisprudence. The Wenphil doctrine teaches, as in

other cases, that where the dismissal of an employee is for a just cause but without due

process, the employer must indemnify the dismissed employee. Petitioner must have

failed to read the full text of Wenphil or simply chose to ignore the sentence immediately

succeeding the P1,000.00 indemnity enunciated therein. The case is explicit that the

measure of the award depends on the facts of each case and the gravity of the omission

committed by the employer. In fact, in the recent case of Reta vs. NLRC, the Court saw fit

to impose P10,000.00 as penalty for the employer's failure to comply with the due

process requirement. The ratiocination of respondent Secretary of Labor should have put

petitioner's argument at rest . . . Wenphil, however, simply provides the authority to

impose the indemnity; it is not meant to be definitive as to the amount of indemnity

applicable in all cases, this being dependent on the particular circumstances of a case.

Indeed, in the later case of Maritime Seahorse vs. NLRC, G.R. No. 84712, 5 May 1989,

the Supreme Court applied the Wenphil doctrine but awarded an indemnity of P5,000.00.

Clearly, there is a recognition that the amount of indemnity to be awarded is subject to

the discretion of the agency making the award, considering all attendant circumstances. AaHTIE

4. ID.; ID.; RETIREMENT FROM THE SERVICE; .MEANING OF ONE HALF (1/2)

MONTH SALARY; DEFINED. The records fail to disclose that petitioner bothered to

inform the Court how it arrived at 21.82 days as basis in the computation of the

retirement pay. Anyway, it is clear in the law that the term "one-half (1/2) month salary"

means 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the 13th month

pay plus 5 days of service incentive leave. In this regard, there is no reason for petitioner

to complain that the retirement benefits granted by respondent Secretary of Labor

exceeded the requirements of the law.

5. ID.; ID.; ID.; AN EMPLOYEE MAY RECEIVE MORE RETIREMENT BENEFITS

PROVIDED FOR BY LAW AND ANY CBA OR OTHER AGREEMENTS. With

respect to the additional six (6) days for compulsory retirement and three (3) days for

optional retirement, these may appear in excess of the requirements of the law and the

demand of respondent Union. Yet, it should be noted that the law merely establishes the

minimum retirement benefits as it recognizes that an employee may receive more under

existing laws and any CBA or other agreements. Besides, respondent Secretary of Labor

had to break the bargaining deadlock. After taking into account all the circumstances,

public respondent found it expedient to strike a reasonable middle ground between the

parties' respective positions.

6. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE SECRETARY OF

LABOR, GENERALLY RESPECTED ON APPEAL. Unless there are cogent

reasons, and we do not find any, this Court will not alter, modify or reverse the factual

findings of the Secretary of Labor because, by reason of her official position, she is

considered to have acquired expertise as her jurisdiction is confined to specific matters. EcSCHD

D E C I S I O N

BELLOSILLO, J p:

Petitioner Capitol Wireless, Inc., and respondent Kilusang Manggagawa ng Capwire

KMC-NAFLU (Union) entered into a Collective Bargaining Agreement (CBA) on 15

November 1990 covering a period of five (5) years. Towards the end of the third year of

their CBA the parties renegotiated the economic aspects of the agreement. On 18 July

1993 when the negotiations were on-going petitioner dismissed on the ground of

redundancy eight (8) out of its eleven (11) couriers who were Union members.

As a consequence, respondent Union filed a notice of strike with the National

Conciliation and Mediation Board (NCMB) on the ground of bargaining deadlock and

unfair labor practice, specifically, for illegal dismissal and violations of the CBA.

Conciliation proceedings were conducted by the NCMB but the same yielded negative

results. On 20 August 1993 respondent Union went on strike. On the same day,

respondent Secretary assumed jurisdiction over the controversy.

In the conference held on 14 September 1993 the parties agreed to confine the scope of

the dispute to the following issues: (a) unfair labor practice, consisting of CBA violations

and acts inimical to the workers' right to self-organization; (b) redundancy, affecting the

dismissed employees; and, (c) CBA deadlock, which includes all items covered by

respondent Union's proposals.

On 2 May 1994 respondent Secretary of Labor resolved the controversy in this manner:

(1) the parties were ordered to modify the fourth and fifth years of their CBA in

accordance with the dispositions she found just and equitable 1 the same to be retroactive

to 1 July 1993 and effective until 30 June 1995 or until superseded by a new agreement;

(2) all other provisions of the existing CBA were deemed retained but all new demands

of respondent Union that were not passed upon by her were deemed denied; (3) the

dismissal of the eight (8) employees on the ground of redundancy was upheld, but due to

defective implementation by petitioner the latter was ordered to pay each of the former an

indemnity equivalent to two (2) months' salary based on their adjusted rate for the fourth

year in addition to the separation benefits due them under the law and the CBA, and if

still unpaid, petitioner to pay the same immediately; and, (4) the charge of unfair labor

practice was dismissed for lack of merit. 2

On 28 July 1994 the motion for reconsideration of petitioner was denied. 3

Petitioner imputes grave abuse of discretion on respondent Secretary of Labor for holding

that it failed to accord due process to the dismissed employees; in not applying to the

letter the ruling in Wenphil Corp. v. NLRC; 4 and, in awarding retirement benefits beyond

those granted by R.A. 7641. 5

Petitioner argues that what it implemented was not retrenchment but redundancy

program, as such, respondent Secretary of Labor should not have relied upon Asiaworld

Publishing House, Inc. v. Ople 6 in holding that the dismissed employees were not

accorded procedural due process. The additional requirements enumerated in Asiaworld

are inapplicable to the present case because that case involved retrenchment, and

petitioner's basis in deciding those to be covered by the redundancy program was the area

serviced by the couriers. All areas outside the vicinity of its head office, which were the

areas of delivery of the dismissed employees, were declared redundant.

Petitioner misses the point. Its violation of due process consists in its failure, as found by

respondent Secretary of Labor, to apprise respondent Union of any fair and reasonable

criteria for implementation of its redundancy program. In Asiaworld we laid down the

principle that in selecting the employees to be dismissed a fair and reasonable criteria

must be used, such as but not limited to: (a) less preferred status (e.g., temporary

employee), (b) efficiency and (c) seniority. Although the case of Asiaworld dealt with

retrenchment, still the principle is applicable to the present case because in effecting the

dismissals petitioner had to select from among its employees.

We agree with respondent Secretary of Labor in her observation and conclusion that the

implementation by petitioner of its redundancy program was inconsistent with established

http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote1_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote2_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote3_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote4_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote5_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote6_0

principles of procedural due process. She elaborated on this point in her resolution of the

motion for reconsideration. Thus

Whether it is redundancy or retrenchment, no employee may be dismissed

without observance of the rudiments of good faith. This is the point of our

assailed order. If the Company (were) really convinced of the reasons for

dismissal, the least it could have done to the employees affected was to observe

fair play and transparency in implementing the decision to dismiss. To stress,

the redundancy was implemented without the Company so much apprising the

Union of any fair and reasonable criteria for implementation.

As a matter of fact, this Office called the parties to a conference on 14 March

1994, at which the Company was given an opportunity to clarify the criteria it

used in effecting redundancy. Represented by Ms. Ma. Lourdes Mendoza of

Mercado and Associates, its counsel of record, the Company submitted

quitclaims which do not contain any amounts purportedly executed by five of

the eight dismissed employees. More importantly, the minutes of the conference

show that within two days thereafter, the Company committed to submit a

pleading to explain the criteria it used in effecting the redundancy; where no

such submission is made by 17 March 1994, the case shall be deemed submitted

for resolution. The Company never complied with this commitment.

As has been made clear, even this Office recognized that an authorized cause

for dismissal did exist; what it could not countenance is the means employed by

the Company in making the cause effective. But no matter what kind of

justification the Company presents now, this has become moot, academic and

irrelevant. The same should have been communicated to the affected employees

prior to or simultaneously with the implementation of the redundancy, or at the

very least, before the assailed order was rendered.

In any event, the explanation being advanced by the Company now purportedly

based on areas of assignment loses significance from the more compelling

viewpoint of efficiency and seniority. For instance, during the period covered by

the Company's own time and motion analysis, Rogelio Varona delivered 96

messages but was dismissed; Resurrecion Bordeos delivered only an average of

75 but was retained. In terms of seniority, the Company itself states the "Ms.

Bordeos holds the same position/area as Rogelio Varona, however, she was

retained because she is more senior than the latter." The Company should look

at its own evidence again. Bordeos had only 16 years of service. Varona had 19,

Neves 18, and Valle, Basig and Santos 17, yet all five were dismissed.

One should also consider that the redundancy was implemented at the height of

bargaining negotiations. The bargaining process could have been the best

opportunity for the Company to apprise the Union of the necessity for

redundancy. For unknown reasons, the Company did not take advantage of it.

Intended or not, the redundancy reinforced the conditions for a deadlock, giving

the Union members the impression that it was being used by the Company to

obtain a bargaining leverage. 7

Petitioner argues next that granting that procedural due process was not afforded the

dismissed employees, still, the award of two (2) months salary for each of them is not in

accord with existing jurisprudence. The Wenphil doctrine teaches, as in other cases, that

where the dismissal of an employee is for a just cause but without due process, the

employer must indemnify the dismissed employee.

Petitioner must have failed to read the full text of Wenphil or simply chose to ignore the

sentence immediately succeeding the P1,000.00 indemnity enunciated therein. The case

is explicit that the measure of the award depends on the facts of each case and the gravity

of the omission committed by the employer. In fact, in the recent case of Reta v. NLRC, 8

the Court saw fit to impose P10,000.00 as penalty for the employer's failure to comply

with the due process requirement. The ratiocination of respondent Secretary of Labor

should have put petitioner's argument at rest

. . . Wenphil, however, simply provides the authority to impose the indemnity; it

is not meant to be definitive as to the amount of indemnity applicable in all

cases, this being dependent on the particular circumstances of a case. Indeed, in

the later case of Maritime Seahorse v. NLRC, G.R. No. 84712, 5 May 1989, the

Supreme Court applied the Wenphil doctrine but awarded an indemnity of

P5,000.00. Clearly, there is a recognition that the amount of indemnity to be

awarded is subject to the discretion of the agency making the award,

considering all attendant circumstances. 9

Lastly, petitioner argues that the retirement benefits granted by respondent Secretary of

Labor are in excess of what is required of it under the law and what the Union demands.

In particular, R.A. 7641 grants to the employee retirement pay equivalent to 21.82 days

per year of service only but respondent Secretary of Labor granted the equivalent of 22.5

days. To this, six (6) more days were granted for compulsory retirement and three (3)

days for optional retirement. The existing provisions of the CBA, the respective proposals

of the parties, and the award of respondent Secretary of Labor are reproduced hereunder

EXISTING PROVISIONS OF THE CBA

a. Normal Retirement

Compulsory upon reaching 60 years of age or after 35 years of continuous

service, whichever comes first, provided that those who reach 55 or have 10

years of uninterrupted service may be retired at employee's or Company's

option.

PETITIONER'S PROPOSAL

http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote7_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote8_0http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote9_0

a. Normal Retirement

60 years old R.A. 7641

b. Optional Retirement

55 years old or 10 years of continuous service 1/2 month's basic salary for every

year of continuous service plus 1 day equivalent pay.

UNION'S PROPOSAL

a. Normal Retirement 150% of basic salary

b. Optional Retirement 50% of basic salary commencing in the 5th year of

service

SECRETARY'S AWARD

a. Compulsory Retirement

An employee shall be compulsorily retired upon reaching the age of sixty (60),

or after thirty-five (35) years of continuous service, whichever comes first.

An employee shall be entitled to a retirement benefit of 1/2 month salary plus

six (6) days multiplied by the number of years in service.

b. Optional Retirement

At his option, an employee may retire upon reaching the age of fifty-five (55) or

more if he has served for at least five (5) years; provided, however, that any

employee who is under fifty-five (55) years old may retire if he has rendered at

least ten (10) years of continuous service.

Such an employee shall be entitled to a retirement benefit of 1/2 month salary

plus three (3) days multiplied by the number of years in service.

For purposes of computing compulsory and optional retirement benefits and to

align the current retirement plan with the minimum standards of Art. 287 of the

Labor Code, as amended by R.A. 7641, and Sec. 5 (5.2) of its implementing

rules, "1/2 month salary" means 22.5 days salary, exclusive of leave conversion

benefits.

Article 287 of the Labor Code, as amended by R.A. 7641, provides

Art. 287. Retirement. Any employee may be retired upon reaching the

retirement age established in the collective bargaining agreement or other

applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement

benefits as he may have earned under existing laws and any collective

bargaining agreement and other agreements: provided, however, That an

employee's retirement benefits under any collective bargaining and other

agreements shall not be less than those provided herein.

In the absence of a retirement plan or agreement providing for retirement

benefits of employees in the establishment, an employee upon reaching the age

of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby

declared the compulsory retirement age, who has served at least five (5) years in

the said establishment, may retire and shall be entitled to retirement pay

equivalent to at least one-half (1/2) month salary for every year of service, a

fraction of at least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term 'one-half (1/2 month

salary' shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month

pay and the cash equivalent of not more than five (5) days of service incentive

leaves . . . (emphasis supplied).

The records fail to disclose that petitioner bothered to inform the Court how it arrived at

21.82 days as basis in the computation of the retirement pay. Anyway, it is clear in the

law that the term "one-half (1/2) month salary" means 22.5 days: 15 days plus 2.5 days

representing one-twelfth (1/12) of the 13th month pay plus 5 days of service incentive

leave. In this regard, there is no reason for petitioner to complain that the retirement

benefits granted by respondent Secretary of Labor exceeded the requirements of the law.

With respect to the additional six (6) days for compulsory retirement and three (3) days

for optional retirement, these may appear in excess of the requirements of the law and the

demand of respondent Union. Yet, it should be noted that the law merely establishes the

minimum retirement benefits as it recognizes that an employee may receive more under

existing laws and any CBA or other agreements. Besides, respondent Secretary of Labor

had to break the bargaining deadlock. After taking into account all the circumstances,

public respondent found it expedient to strike a reasonable middle ground between the

parties' respective positions. Unless there are cogent reasons, and we do not find any, this

Court will not alter, modify or reverse the factual findings of the Secretary of Labor

because, by reason of her official position, she is considered to have acquired expertise as

her jurisdiction is confined to specific matters. 10

http://cdasiaonline.com/jurisprudences/13960?hits%5B%5D%5Bid%5D=13960&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=117174&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote10_0

As we perceive it, by design or otherwise, petitioner's arguments only scratch the surface,

so to speak. They do not extend beneath, as our studies of jurisprudence and the law

disclose. Otherwise, the baselessness of the instant petition and the absence of any abuse

of discretion, much less grave, would have earlier been exposed.

WHEREFORE, the petition is DISMISSED. The Order of 2 May 1994 of respondent

Secretary of Labor and her Resolution of 28 July 1994 are AFFIRMED.

SO ORDERED.

Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.

||| (Capitol Wireless, Inc. v. Confesor, G.R. No. 117174, November 13, 1996)

FIRST DIVISION

[G.R. No. 155214. February 13, 2004.]

R & E TRANSPORT, INC., and HONORIO ENRIQUEZ, petitioners,

vs. AVELINA P. LATAG, representing her deceased husband,

PEDRO M. LATAG, respondent.

D E C I S I O N

PANGANIBAN, J p:

Factual issues may be reviewed by the Court of Appeals (CA) when the findings of fact

of the National Labor Relations Commission (NLRC) conflict with those of the labor

arbiter. By the same token, this Court may review factual conclusions of the CA when

they are contrary to those of the NLRC or of the labor arbiter.

The Case

Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking to

nullify the June 3, 2002 Decision 2 and the August 28, 2002 Resolution 3 of the Court of

Appeals in CA-GR SP No. 67998. The appellate court disposed as follows:

"WHEREFORE, premises considered, the petition is hereby GRANTED. The

assailed Order of public respondent NLRC is SET ASIDE. The March 14, 2001

4 [D]ecision of the Labor Arbiter a quo is REINSTATED." 5

The challenged Resolution denied petitioners' Motion for Reconsideration.

The Factual Antecedents

The antecedents of the case are narrated by the CA as follows:

"Pedro Latag was a regular employee . . . of La Mallorca Taxi since March 1,

1961. When La Mallorca ceased from business operations, [Latag] . . .

transferred to [petitioner] R & E Transport, Inc. . . .. He was receiving an

average daily salary of five hundred pesos (P500.00) as a taxi driver.

"[Latag] got sick in January 1995 and was forced to apply for partial disability

with the SSS, which was granted. When he recovered, he reported for work in

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote1_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote2_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote3_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote4_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote5_0

September 1998 but was no longer allowed to continue working on account of

his old age.

"Latag thus asked Felix Fabros, the administrative officer of [petitioners], for

his retirement pay pursuant to Republic Act 7641 but he was ignored. Thus, on

December 21, 1998, [Latag] filed a case for payment of his retirement pay

before the NLRC.

"Latag however died on April 30, 1999. Subsequently, his wife, Avelina Latag,

substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in

favor of [Latag], the dispositive portion of which reads:

'WHEREFORE, judgment is hereby rendered ordering . . . LA

MALLORCA TAXI, R & E TRANSPORT, INC. and their owner/chief

executive officer HONORIO ENRIQUEZ to jointly and severally pay

MRS. AVELINA P. LATAG the sum of P277,500.00 by way of

retirement pay for her deceased husband, PEDRO M. LATAG.

'SO ORDERED.' DCHaTc

"On January 21, 2000, [Respondent Avelina Latag,] with her then counsel[,]

was invited to the office of [petitioners'] counsel and was offered the amount of

P38,500.00[,] which she accepted. [Respondent] was also asked to sign an

already prepared quitclaim and release and a joint motion to dismiss the case.

"After a day or two, [respondent] received a copy of the January 10, 2000

[D]ecision of the Labor Arbiter.

"On January 24, 2000, [petitioners] filed the quitclaim and motion to dismiss.

Thereafter, on May 23, 2000, the Labor Arbiter issued an order, the relevant

portion of which states:

'WHEREFORE, the decision stands and the Labor Arbitration Associate

of this Office is directed to prepare the Writ of Execution in due course.

'SO ORDERED.'

"On January 21, 2000, [petitioners] interposed an appeal before the NLRC. On

March 14, 2001, the latter handed down a [D]ecision[,] the decretal portion of

which provides:

'WHEREFORE, in view of the foregoing, respondents' Appeal is hereby

DISMISSED for failure to post a cash or surety bond, as mandated by

law.

'SO ORDERED.'

"On April 10, 2001, [petitioners] filed a motion for reconsideration of the above

resolution. On September 28, 2001, the NLRC came out with the assailed

[D]ecision, which gave due course to the motion for reconsideration." 6

(Citations omitted)

Respondent appealed to the CA, contending that under Article 223 of the Labor Code and

Section 3, Rule VI of the New Rules of Procedure of the NLRC, an employer's appeal of

a decision involving monetary awards may be perfected only upon the posting of an

adequate cash or surety bond.

Ruling of the Court of Appeals

The CA held that the labor arbiter's May 23, 2000 Order had referred to the earlier

January 10, 2000 Decision awarding respondent P277,500 as retirement benefit.

According to the appellate court, because petitioners' appeal before the NLRC was not

accompanied by an appropriate cash or surety bond, such appeal was not perfected. The

CA thus ruled that the labor arbiter's January 10, 2000 Decision and May 23, 2000 Order

had already become final and executory.

Hence, this Petition. 7

Issues

Petitioners submit the following issues for our consideration:

"I

Whether or not the Court should respect the findings of fact [of] the NLRC as

against [those] of the labor arbiter.

"II

Whether or not, in rendering judgment in favor of petitioners, the NLRC

committed grave abuse of discretion.

"III

Whether or not private respondent violated the rule on forum-shopping.

"IV

Whether or not the appeal of petitioners from the Order of the labor arbiter to

the NLRC involves [a] monetary award." 8


In short, petitioners raise these issues: (1) whether the CA acted properly when it

overturned the NLRC's factual findings; (2) whether the rule on forum shopping was

violated; and (3) whether the labor arbiter's Order of May 23, 2000 involved a monetary

award.

The Court's Ruling

The Petition is partly meritorious.

First Issue:

Factual Findings of the NLRC

Petitioners maintain that the CA erred in disregarding the factual findings of the NLRC

and in deciding to affirm those of the labor arbiter. Allegedly, the NLRC findings were

based on substantial evidence, while those of the labor arbiter were groundless.

Petitioners add that the appellate court should have refrained from tackling issues of fact

and, instead, limited itself to those of jurisdiction or grave abuse of discretion on the part

of the NLRC.

The power of the CA to review NLRC decisions via a Rule 65 petition is now a settled

issue. As early as St. Martin Funeral Homes v. NLRC, 9 we have definitively ruled that

the proper remedy to ask for the review of a decision of the NLRC is a special civil action

for certiorari under Rule 65 of the Rules of Court, 10 and that such petition should be

filed with the CA in strict observance of the doctrine on the hierarchy of courts. 11

Moreover, it has already been explained that under Section 9 of Batas Pambansa (BP)

129, as amended by Republic Act 7902, 12 the CA pursuant to the exercise of its

original jurisdiction over petitions for certiorari was specifically given the power to

pass upon the evidence, if and when necessary, to resolve factual issues. 13

Likewise settled is the rule that when supported by substantial evidence, 14 factual

findings made by quasi-judicial and administrative bodies are accorded great respect and

even finality by the courts. These findings are not infallible, though; when there is a

showing that they were arrived at arbitrarily or in disregard of the evidence on record,

they may be examined by the courts. 15 Hence, when factual findings of the NLRC are

contrary to those of the labor arbiter, the evidentiary facts may be reviewed by the

appellate court. 16 Such is the situation in the present case; thus, the doors to a review are

open. 17

The very same reason that behooved the CA to review the factual findings of the NLRC

impels this Court to take its own look at the findings of fact. Normally, the Supreme

Court is not a trier of facts. 18 However, since the findings of fact in the present case are

conflicting, 19 it waded through the records to find out if there was enough basis for the

appellate court's reversal of the NLRC Decision. IEHTaA

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote9_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote10_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote11_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote12_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote13_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote14_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote15_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote16_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote17_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote18_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote19_0

Number of Creditable Years of Service

for Retirement Benefits

Petitioners do not dispute the fact that the late Pedro M. Latag is entitled to retirement

benefits. Rather, the bone of contention is the number of years that he should be credited

with in computing those benefits. On the one hand, we have the findings of the labor

arbiter, 20 which the CA affirmed. According to those findings, the 23 years of

employment of Pedro with La Mallorca Taxi must be added to his 14 years with R & E

Transport, Inc., for a total of 37 years. On the other, we also have the findings of the

NLRC 21 that Pedro must be credited only with his service to R & E Transport, Inc.,

because the evidence shows that the aforementioned companies are two different entities.

After a careful and painstaking review of the evidence on record, we support the NLRC's

findings. The labor arbiter's conclusion that Mallorca Taxi and R & E Transport, Inc.,

are one and the same entity is negated by the documentary evidence presented by

petitioners. Their evidence 22 sufficiently shows the following facts: 1) R & E Transport,

Inc., was established only in 1978; 2) Honorio Enriquez, its president, was not a

stockholder of La Mallorca Taxi; and 3) none of the stockholders of the latter company

hold stocks in the former. In the face of such evidence, which the NLRC appreciated in

its Decision, it seems that mere surmises and self-serving assertions of Respondent

Avelina Latag formed the bases for the labor arbiter's conclusions as follows:

"While [Pedro M. Latag] claims that he worked as taxi driver since March 1961

since the days of the La Mallorca Taxi, which was later renamed R & E

Transport, Inc., [petitioners] limit the employment period to 14 years.

"Resolving this matter, we note [respondent's] ID (Annex "A", [Latag] position

paper), which appears to bear the signature of Miguel Enriquez on the front

portion and the date February 27, 1961 when [. . . Latag] started with the

company. We also note an SSS document (Annex 'C') which shows that the gate

of initial coverage of Pedro Latag, with SSS No. 03-0772155, is February 1961.

"Viewed against [petitioners'] non-disclaimer [sic] that La Mallorca preceded R

& E Taxi, Inc.[;] . . . that both entities were/are owned by the Enriquez family,

with [petitioner] Honorio [Enriquez] as the latter's President[; and] . . . that La

Mallorca was a different entity (page 2, [petitioners'] position paper), we are of

the conclusion that [Latag's] stint with the Enriquez family dated back since

February 1961 and thus, he should be entitled to retirement benefits for 37

years, as of the date of the filing of this case on December 12, 1998." 23

Furthermore, basic is the rule that the corporate veil may be pierced only if it becomes a

shield for fraud, illegality or inequity committed against a third person. 24 We have thus

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote20_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote21_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote22_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote23_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote24_0

cautioned against the inordinate application of this doctrine. In Philippine National Bank

v. Andrada Electric & Engineering Company, 25 we said:

". . . [A]ny application of the doctrine of piercing the corporate veil should be

done with caution. A court should be mindful of the milieu where it is to be

applied. It must be certain that the corporate fiction was misused to such an

extent that injustice, fraud, or crime was committed against another, in disregard

of its rights. The wrongdoing must be clearly and convincingly established; it

cannot be presumed. Otherwise, an injustice that was never unintended may

result from an erroneous application.

xxx xxx xxx

"The question of whether a corporation is a mere alter ego is one of fact.

Piercing the veil of corporate fiction may be allowed only if the following

elements concur: (1) control not mere stock control, but complete

domination not only of finances, but of policy and business practice in

respect to the transaction attacked, must have been such that the corporate entity

as to this transaction had at the time no separate mind, will or existence of its

own; (2) such control must have been used by the defendant to commit a fraud

or a wrong to perpetuate the violation of a statutory or other positive legal duty,

or a dishonest and an unjust act in contravention of plaintiff's legal right; and (3)

the said control and breach of duty must have proximately caused the injury or

unjust loss complained of." 26

Respondent has not shown by competent evidence that one taxi company had stock

control and complete domination over the other or vice versa. In fact, no evidence was

presented to show the alleged renaming of "La Mallorca Taxi" to "R & E Transport, Inc."

The seven-year gap between the time the former closed shop and the date when the latter

came into being also casts doubt on any alleged intention of petitioners to commit a

wrong or to violate a statutory duty. This lacuna in the evidence compels us to reverse the

Decision of the CA affirming the labor arbiter's finding of fact that the basis for

computing Pedro's retirement pay should be 37 years, instead of only 14 years.

Validity of the Quitclaim and Waiver

As to the Quitclaim and Waiver signed by Respondent Avelina Latag, the appellate court

committed no error when it ruled that the document was invalid and could not bar her

from demanding the benefits legally due her husband. This is not say that all quitclaims

are invalid per se. Courts, however, are wary of schemes that frustrate workers' rights and

benefits, and look with disfavor upon quitclaims and waivers that bargain these away.

Courts have stepped in to annul questionable transactions, especially where there is clear

proof that a waiver, for instance, was wangled from an unsuspecting or a gullible person;

or where the agreement or settlement was "unconscionable on its face." 27 A quitclaim is


ineffective in barring recovery of the full measure of a worker's rights, and the acceptance

of benefits therefrom does not amount to estoppel. 28 Moreover, a quitclaim in which the

consideration is "scandalously low and inequitable" cannot be an obstacle to the pursuit

of a worker's legitimate claim. 29

Undisputably, Pedro M. Latag was credited with 14 years of service with R & E

Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641, 30

provides:

"Art. 287. Retirement. . . .

xxx xxx xxx

"In the absence of a retirement plan or agreement providing for retirement

benefits of employees in the establishment, an employee upon reaching the age

of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby

declared the compulsory retirement age, who has served at least five (5) years in

said establishment, may retire and shall be entitled to retirement pay equivalent

to at least one-half (1/2) month salary for every year of service, a fraction of at

least six (6) months being considered as one whole year.

"Unless the parties provide for broader inclusions, the term one half-month

salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay

and the cash equivalent of not more than five (5) days of service incentive

leaves. EISCaD

xxx xxx xxx" (Emphasis supplied)

The rules implementing the New Retirement Law similarly provide the above-mentioned

formula for computing the one-half month salary. 31 Since Pedro was paid according to

the "boundary" system, he is not entitled to the 13th month 32 and the service incentive

pay; 33 hence, his retirement pay should be computed on the sole basis of his salary.

It is accepted that taxi drivers do not receive fixed wages, but retain only those sums in

excess of the "boundary" or fee they pay to the owners or operators of their vehicles. 34

Thus, the basis for computing their benefits should be the average daily income. In this

case, the CA found that Pedro was earning an average of five hundred pesos (P500) per

day. We thus compute his retirement pay as follows: P500 x 15 days x 14 years of service

equals P105,000. Compared with this amount, the P38,850 he received, which

represented just over one third of what was legally due him, was unconscionable.

Second Issue:

Was There Forum Shopping?

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote28_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote29_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote30_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote31_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote32_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote33_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote34_0

Also assailed are the twin appeals that two different lawyers filed for respondent before

the CA. Petitioners argue that instead of accepting her explanation, the appellate court

should have dismissed the appeals outright for violating the rule on forum shopping.

Forum shopping is the institution of two or more actions or proceedings grounded on the

same cause, on the supposition that one or the other court would render a favorable

disposition. 35 Such act is present when there is an identity of parties, rights or causes of

action, and reliefs sought in two or more pending cases. 36 It is usually resorted to by a

party against whom an adverse judgment or order has been issued in one forum, in an

attempt to seek and possibly to get a favorable opinion in another forum, other than by an

appeal or a special civil action for certiorari. 37

We find, as the CA 38 did, that respondent has adequately explained why she had filed

two appeals before the appellate court. In the August 5, 2002 Affidavit 39 that she

attached as Annex "A" to her Compliance to Show Cause Order with Comment on

petitioners' Motion for Reconsideration, 40 she averred that she had sought the services

of another counsel to file her Petition for certiorari before the CA. She did so after her

original counsel had asked for an extension of time to file the Petition because of time

constraints and a tremendous workload, only to discover later that the original counsel

had filed a similar Petition.

We cannot fault respondent for her tenacity. Besides, to disallow her appeal would not be

in keeping with the policy of labor laws 41 to shun highly technical procedural laws in the

higher interest of justice.

Third Issue:

Monetary Award

Petitioners' contention is that the labor arbiter's January 10, 2000 Decision was

supplanted by the Compromise Agreement that had preceded the former's official release

42 to, and receipt 43 by, the parties. It appears from the records that they had entered into

an Amicable Settlement on January 21, 2000; that based on that settlement, respondent

filed a Motion to Dismiss on January 24, 2000, before the labor arbiter who officially

released on the same day his Decision dated January 10, 2000; that upon receipt of a copy

thereof, respondent filed a Manifestation and Motion to Set Aside the Motion to Dismiss;

and that the labor arbiter subsequently calendared the case for conference, held hearings

thereon, and required the parties to exchange positions by way of comments, replies

and rejoinders after which he handed down his May 23, 2000 Order.

Under the circumstances, the case was in effect reopened by the proceedings held after

respondent had filed her Manifestation and Motion to Set Aside the Motion to Dismiss.

This ruling is in accordance with the fourth paragraph of Section 2, Rule V of the New

Rules of Procedure of the NLRC, 44 which therefore correctly held as follows:

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote35_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote36_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote37_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote38_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote39_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote40_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote41_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote42_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote43_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote44_0

". . . Thus, the further hearings conducted thereafter, to determine the validity of

complainant's manifestation and motion are but mute confirmation that indeed

the 10 January 2000 decision in this case has not as yet attained finality. Finally,

the appealed order of 23 May 2000 itself declaring [that] 'the decision stands

and the Labor Arbitration Associate of this office is directed to prepare the Writ

of Execution in due course,' obviously, is a conclusion that the decision in this

case has been supplanted and rendered functus oficio by the herein parties' acts.

Thus, when the Labor Arbiter a quo found in his appealed order that the amount

of P38,850.00 is 'unconscionable viewed against the amount awarded in the

decision,' the same became appealable independently of the 10 January 2000

decision, which has not attained finality, in the first place." 45

We cannot concur, however, in petitioners' other contention that the May 23, 2000 Order

did not involve a monetary award. If the amicable settlement between the parties had

rendered the January 10, 2000 Decision functus oficio, then it follows that the monetary

award stated therein was reinstated by reference by the aforementioned Order. The

appeal from the latter should perforce have followed the procedural requirements under

Article 223 of the Labor Code.

As amended, this provision explicitly provides that an appeal from the labor arbiter's

decision, award or order must be made within ten (10) calendar days from receipt of a

copy thereof by the party intending to appeal it; and, if the judgment involves a monetary

award, an appeal by the employer may be perfected only upon the posting of a cash or

surety bond. Such cash or bond must have been issued by a reputable bonding company

duly accredited by the NLRC in the amount equivalent to the monetary award stated in

the judgment. Sections 1, 3 and 6 of Rule VI of the New Rules of Procedure of the NLRC

implement this Article. cDCaTH

Indeed, this Court has repeatedly ruled that the perfection of an appeal in the manner and

within the period prescribed by law is not only mandatory but jurisdictional, and the

failure to perfect an appeal has the effect of rendering the judgment final and executory.

46 Nonetheless, procedural lapses may be disregarded because of fundamental

considerations of substantial justice; 47 or because of the special circumstances of the

case combined with its legal merits or the amount and the issue involved. 48

The requirement to post a bond to perfect an appeal has also been relaxed in cases when

the amount of the award has not been included in the decision of the labor arbiter. 49

Besides, substantial justice will be better served in the present case by allowing

petitioners' appeal to be threshed out on the merits, 50 especially because of serious

errors in the factual conclusions of the labor arbiter as to the award of retirement benefits.

http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote45_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote46_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote47_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote48_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote49_0http://cdasiaonline.com/jurisprudences/8509?hits%5B%5D%5Bid%5D=8509&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=155214&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote50_0

WHEREFORE, this Petition is partly GRANTED. The Decision of the Court of Appeals

is MODIFIED by crediting Pedro M. Latag with 14 years of service. Consequently, he is

entitled to retirement pay, which is hereby computed at P105,000 less the P38,850 which

has already been received by respondent, plus six (6) percent interest thereon from

December 21, 1998 until its full payment. No costs.

SO ORDERED.

Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.

||| (R & E Transport v. Latag, G.R. No. 155214, February 13, 2004)

THIRD DIVISION

[G.R. No. 187698. August 9, 2010.]

2:45 P.M.

RODOLFO J. SERRANO, petitioner, vs. SEVERINO SANTOS

TRANSIT and/or SEVERINO SANTOS, respondents.

DECISION

CARPIO MORALES, J p:

Petitioner Rodolfo J. Serrano was hired on September 28, 1992 as bus conductor by

respondent Severino Santos Transit, a bus company owned and operated by its co-

respondent Severino Santos.

After 14 years of service or on July 14, 2006, petitioner applied for optional retirement

from the company whose representative advised him that he must first sign the already

prepared Quitclaim before his retirement pay could be released. As petitioner's request to

first go over the computation of his retirement pay was denied, he signed the Quitclaim

on which he wrote "U.P." (under protest) after his signature, indicating his protest to the

amount of P75,277.45 which he received, computed by the company at 15 days per year

of service.

Petitioner soon after filed a complaint 1 before the Labor Arbiter, alleging that the

company erred in its computation since under Republic Act No. 7641, otherwise known

as the Retirement Pay Law, his retirement pay should have been computed at 22.5 days

per year of service to include the cash equivalent of the 5-day service incentive leave

(SIL) and 1/12 of the 13th month pay which the company did not.

The company maintained, however, that the Quitclaim signed by petitioner barred his

claim and, in any event, its computation was correct since petitioner was not entitled to

the 5-day SIL and pro-rated 13th month pay for, as a bus conductor, he was paid on

commission basis. Respondents, noting that the retirement differential pay amounted to

only P1,431.15, explained that in the computation of petitioner's retirement pay, five

months were inadvertently not included because some index cards containing his records

had been lost. cDTSHE

By Decision 2 of February 15, 2007, Labor Arbiter Cresencio Ramos, Jr. ruled in favor of

petitioner, awarding him P116,135.45 as retirement pay differential, and 10% of the total

http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote1_0http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote2_0

monetary award as attorney's fees. In arriving at such computation, the Labor Arbiter

ratiocinated:

In the same Labor Advisory on Retirement Pay Law, it was likewise decisively

made clear that "the law expanded the concept of "one-half month salary" from

the usual one-month salary divided by two", to wit:

B.COMPUTATION OF RETIREMENT PAY

A covered employee who retires pursuant to RA 7641 shall be entitled to

retirement pay equivalent to at least one-half (1/12) month salary for

every year of service, a fraction of at least six (6) months being

considered as one whole year.

The law is explicit that "one-half month salary shall mean fifteen (15)

days plus one-twelfth (1/12) of the 13th month pay and the cash

equivalent of not more than five (5) days service incentive leaves"

unless the parties provide for broader inclusions. Evidently, the law

expanded the concept of "one-half month salary" from the usual one-

month salary divided by two.

The retirement pay is equal to half-month's pay per year of service. But "half-

month's pay" is "expanded" because it means not just the salary for 15 days but

also one-twelfth of the 13th-month pay and the cash value of five-day service

incentive leave. THIS IS THE MINIMUM. The retirement pay package can be

improved upon by voluntary company policy, or particular agreement with the

employee, or through a collective bargaining agreement." (The Labor Code with

Comments and Cases, C.A. Azcunea, Vol. II, page 765, Fifth Edition 2004).

Thus, having established that 22.5 days pay per year of service is the correct

formula in arriving at the complete retirement pay of complainant and inasmuch

as complainant's daily earning is based on commission earned in a day, which

varies each day, the next critical issue that needs discernment is the

determination of what is a fair and rational amount of daily earning of

complainant to be used in the computation of his retirement pay.

While complainant endeavored to substantiate his claim that he earned average

daily commission of P700.00, however, the documents he presented are not

complete, simply representative copies, therefore unreliable. On the other hand,

while respondents question complainant's use of P700.00 (daily income) as

basis in determining the latter's correct retirement pay, however it does not help

their defense that they did not present a single Conductor's Trip Report to

contradict the claim of complainant. Instead, respondents adduced a handwritten

summary of complainant's monthly income from 1993 until June 2006. It must

be noted also that complainant did not contest the amounts stated on the

summary of his monthly income as reported by respondents. Given the above

considerations, and most importantly that complainant did not dispute the

figures stated in that document, we find it logical, just and equitable for both

parties to rely on the summary of monthly income provided by respondent, thus,

we added complainant's monthly income from June 2005 until June 2006 or the

last twelve months and we arrived at (P189,591.30) and we divided it by twelve

(12) to arrive at complainant's average monthly earning of P15,799.28.

Thereafter, the average monthly of P15,799.28 is divided by twenty-six (26)

days, the factor commonly used in determining the regular working days in a

month, to arrive at his average daily income of P607.66. Finally, P607.66

(average daily income) x 22.5 days = P13,672.35 x 14 (length of service) =

P191,412.90 (COMPLETE RETIREMENT PAY). However, inasmuch as

complainant already received P75,277.45, the retirement differential pay due

him is P116,135.45 (P191,412.90-P75,277.45). (underscoring partly in the

original and partly supplied) IaESCH

The National Labor Relations Commission (NLRC) to which respondents appealed

reversed the Labor Arbiter's ruling and dismissed petitioner's complaint by Decision 3

dated April 23, 2008. It, however, ordered respondents to pay retirement differential in

the amount of P2,365.35.

Citing R & E Transport, Inc. v. Latag, 4 the NLRC held that since petitioner was paid on

purely commission basis, he was excluded from the coverage of the laws on 13th month

pay and SIL pay, hence, the 1/12 of the 13th month pay and the 5-day SIL should not be

factored in the computation of his retirement pay.

Petitioner's motion for reconsideration having been denied by Resolution 5 of June 27,

2008, he appealed to the Court of Appeals.

By the assailed Decision 6 of February 11, 2009, the appellate court affirmed the NLRC's

ruling, it merely holding that it was based on substantial evidence, hence, should be

respected.

Petitioner's motion for reconsideration was denied, hence, the present petition for review

on certiorari.

The petition is meritorious.

Republic Act No. 7641 which was enacted on December 9, 1992 amended Article 287 of

the Labor Code by providing for retirement pay to qualified private sector employees in

the absence of any retirement plan in the establishment. The pertinent provision of said

law reads:

Section 1.Article 287 of Presidential Decree No. 442, as amended, otherwise

known as the Labor Code of the Philippines, is hereby amended to read as

follows:

http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote3_0http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote4_0http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote5_0http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote6_0

xxx xxx xxx

In the absence of a retirement plan or agreement providing for

retirement benefits of employees in the establishment, an employee

upon reaching the age of sixty (60) years or more, but not beyond

sixty-five (65) years which is hereby declared the compulsory

retirement age, who has served at least five (5) years in the said

establishment, may retire and shall be entitled to retirement pay

equivalent to at least one-half (1/2) month salary for every year of

service, a fraction of at least six (6) months being considered as one

whole year.

Unless the parties provide for broader inclusions, the term one-half

1/2 month salary shall mean fifteen 15 days plus one-twelfth (1/12)

of the 13th month pay and the cash equivalent of not more than five

(5) days of service incentive leaves.

Retail, service and agricultural establishments or operations

employing not more than (10) employees or workers are exempted

from the coverage of this provision.

xxx xxx xxx (emphasis and underscoring supplied)

Further, the Implementing Rules of said law provide:

RULE II

Retirement Benefits

SECTION 1

General Statement on Coverage. This Rule shall apply to all employees in

the private sector, regardless of their position, designation or status and

irrespective of the method by which their wages are paid, except to those

specifically exempted under Section 2 hereof. As used herein, the term "Act"

shall refer to Republic Act No. 7641 which took effect on January 7, 1993.

SECTION 2

Exemptions. This Rule shall not apply to the following employees:

2.1Employees of the National Government and its political subdivisions,

including Government-owned and/or controlled corporations, if they are

covered by the Civil Service Law and its regulations. caTIDE

2.2Domestic helpers and persons in the personal service of another.

2.3Employees of retail, service and agricultural establishment or operations

regularly employing not more than ten (10) employees. As used in this sub-

section;

xxx xxx xxx

SECTION 5

Retirement Benefits

5.1In the absence of an applicable agreement or retirement plan, an employee

who retires pursuant to the Act shall be entitled to retirement pay equivalent to

at least one-half (-) month salary for every year of service, a fraction of at least

six (6) months being considered as one whole year.

5.2Components of One-half (-) Month Salary. For the purpose of

determining the minimum retirement pay due an employee under this Rule, the

term "one-half month salary" shall include all of the following:

(a)Fifteen (15) days salary of the employee based on his latest salary rate.

As used herein, the term "salary" includes all remunerations paid by an

employer to his employees for services rendered during normal working

days and hours, whether such payments are fixed or ascertained on a time,

task, piece of commission basis, or other method of calculating the same, and

includes the fair and reasonable value, as determined by the Secretary of Labor

and Employment, of food, lodging or other facilities customarily furnished by

the employer to his employees. The term does not include cost of living

allowances, profit-sharing payments and other monetary benefits which are not

considered as part of or integrated into the regular salary of the employees.

(b)The cash equivalent of not more than five (5) days of service incentive

leave.

(c)One-twelfth of the 13th month pay due the employee.

(d)All other benefits that the employer and employee may agree upon that

should be included in the computation of the employee's retirement pay.

xxx xxx xxx (emphasis supplied)

Admittedly, petitioner worked for 14 years for the bus company which did not adopt any

retirement scheme. Even if petitioner as bus conductor was paid on commission basis

then, he falls within the coverage of R.A. 7641 and its implementing rules. As thus

correctly ruled by the Labor Arbiter, petitioner's retirement pay should include the cash

equivalent of the 5-day SIL and 1/12 of the 13th month pay.

The affirmance by the appellate court of the reliance by the NLRC on R & E Transport,

Inc. is erroneous. In said case, the Court held that a taxi driver paid according to the

"boundary system" is not entitled to the 13th month and the SIL pay, hence, his

retirement pay should be computed on the sole basis of his salary.

For purposes, however, of applying the law on SIL, as well as on retirement, the Court

notes that there is a difference between drivers paid under the "boundary system" and

conductors who are paid on commission basis.

In practice, taxi drivers do not receive fixed wages. They retain only those sums in excess

of the "boundary" or fee they pay to the owners or operators of the vehicles. 7

Conductors, on the other hand, are paid a certain percentage of the bus' earnings for the

day.

It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its coverage of

workers who are paid on a purely commission basis is only with respect to field

personnel. The more recent case of Auto Bus Transport Systems, Inc. v. Bautista 8

clarifies that an employee who is paid on purely commission basis is entitled to SIL: CDAHaE

A careful perusal of said provisions of law will result in the conclusion that the

grant of service incentive leave has been delimited by the Implementing Rules

and Regulations of the Labor Code to apply only to those employees not

explicitly excluded by Section 1 of Rule V. According to the Implementing

Rules, Service Incentive Leave shall not apply to employees classified as

"field personnel." The phrase "other employees whose performance is

unsupervised by the employer" must not be understood as a separate

classification of employees to which service incentive leave shall not be

granted. Rather, it serves as an amplification of the interpretation of the

definition of field personnel under the Labor Code as those "whose actual hours

of work in the field cannot be determined with reasonable certainty."

The same is true with respect to the phrase "those who are engaged on task

or contract basis, purely commission basis." Said phrase should be related

with "field personnel," applying the rule on ejusdem generis that general and

unlimited terms are restrained and limited by the particular terms that they

follow. Hence, employees engaged on task or contract basis or paid on

purely commission basis are not automatically exempted from the grant of

service incentive leave, unless, they fall under the classification of field

personnel.

xxx xxx xxx

According to Article 82 of the Labor Code, "field personnel" shall refer to

non-agricultural employees who regularly perform their duties away from

the principal place of business or branch office of the employer and whose

http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote7_0http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_finder%5D=&q%5Bfull_text%5D=&q%5Bissue_no%5D=187698&q%5Bponente%5D=&q%5Bsyllabus%5D=&q%5Btitle%5D=&q%5Butf8%5D=%E2%9C%93&q%5Byear_end%5D=&q%5Byear_start%5D=#footnote8_0

actual hours of work in the field cannot be determined with reasonable

certainty. This definition is further elaborated in the Bureau of Working

Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical

Commercial Employees Association which states that:

As a general rule, [field personnel] are those whose performance of their

job/service is not supervised by the employer or his representative, the

workplace being away from the principal office and whose hours and

days of work cannot be determined with reasonable certainty; hence,

they are paid specific amount for rendering specific service or

performing specific work. If required to be at specific places at specific

times, employees including drivers cannot be said to be field personnel

despite the fact that they are performing work away from the principal

office of the employee.

xxx xxx xxx (emphasis, italics and underscoring supplied)

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision of February

11, 2009 and Resolution of April 28, 2009 are REVERSED and SET ASIDE and the

Labor Arbiter's Decision dated February 15, 2007 is REINSTATED.

SO ORDERED. THADEI

Brion, Bersamin, Abad * and Villarama, Jr., JJ., concur.

||| (Serrano v. Severino Santos Transit, G.R. No. 187698, August 09, 2010)

http://cdasiaonline.com/jurisprudences/53473?hits%5B%5D%5Bid%5D=53473&hits%5B%5D%5Btype%5D=Jurisprudence&path=%2Fjurisprudences%2Fsearch&q%5Bcitation_find

25. Retirement Pay

Documents

Transcript of 25. Retirement Pay