labor standards fin.docx

7/28/2019 labor standards fin.docx

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G.R. No. 78909 June 30, 1989

MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO,President, petitioner,vs.THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, REGIONX,respondents.

MEDIALDEA,J.:

This is a petition for certiorariseeking the annulment of the Decision of the respondent Secretary ofLabor dated September 24, 1986, affirming with modification the Order of respondent RegionalDirector of Labor, Region X, dated August 4, 1986, awarding salary differentials and emergency costof living allowances (ECOLAS) to employees of petitioner, and the Order denying petitioner's motionfor reconsideration dated May 13, 1987, on the ground of grave abuse of discretion.

Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro

Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. Thehospital derives its finances from the club itself as well as from paying patients, averaging 130 permonth. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De

Oro City government.

Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees aregiven food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo).

On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions fileda complaint with the Office of the Regional Director of Labor and Employment, Region X, forunderpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.

On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers toinspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p.98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May,

1986, were duly submitted for inspection.

On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming thatthere was underpayment of wages and ECOLAs of all the employees by the petitioner, the dispositiveportion of which reads:

IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmedper review of the respondent payrolls and interviews with the complainant workersand all other information gathered by the team, it is respectfully recommended to theHonorable Regional Director, this office, that Antera Dorado, President be ORDERED topay the amount of SIX HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX& 01/100 (P654,756.01), representing underpayment of wages and ecola to theTHIRTY SIX (36) employees of the said hospital as appearing in the attached Annex

"F" worksheets and/or whatever action equitable under the premises. (p. 99, Rollo)

Based on this inspection report and recommendation, the Regional Director issued an Order dated

August 4, 1986, directing the payment of P723,888.58, representing underpayment of wages andECOLAs to all the petitioner's employees, the dispositive portion of which reads:

WHEREFORE, premises considered, respondent Maternity and Children Hospital is

hereby ordered to pay the above-listed complainants the total amount indicatedopposite each name, thru this Office within ten (10) days from receipt thereof.


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Thenceforth, the respondent hospital is also ordered to pay its employees/workers theprevailing statutory minimum wage and allowance.

SO ORDERED. (p. 34, Rollo)

Petitioner appealed from this Order to the Minister of Labor and Employment, Hon. Augusto S.

Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order in that deficiencywages and ECOLAs should be computed only from May 23, 1983 to May 23, 1986, the dispositiveportion of which reads:

WHEREFORE, the August 29, 1986 order is hereby MODIFIED in that the deficiencywages and ECOLAs should only be computed from May 23, 1983 to May 23, 1986. Thecase is remanded to the Regional Director, Region X, for recomputation specifying theamounts due each the complainants under each of the applicable Presidential Decrees.(p. 40, Rollo)

On October 24, 1986, the petitioner filed a motion for reconsideration which was denied by theSecretary of Labor in his Order dated May 13, 1987, for lack of merit (p. 43 Rollo).

The instant petition questions the all-embracing applicability of the award involving salary differentialsand ECOLAS, in that it covers not only the hospital employees who signed the complaints, but alsothose (a) who are not signatories to the complaint, and (b) those who were no longer in the service ofthe hospital at the time the complaints were filed.

Petitioner likewise maintains that the Order of the respondent Regional Director of Labor, as affirmedwith modifications by respondent Secretary of Labor, does not clearly and distinctly state the facts andthe law on which the award was based. In its "Rejoinder to Comment", petitioner further questions theauthority of the Regional Director to award salary differentials and ECOLAs to private respondents,(relying on the case of Encarnacion vs. Baltazar, G.R. No. L-16883, March 27, 1961, 1 SCRA 860, asauthority for raising the additional issue of lack of jurisdiction at any stage of the proceedings, p.

52, Rollo), alleging that the original and exclusive jurisdiction over money claims is properly lodged inthe Labor Arbiter, based on Article 217, paragraph 3 of the Labor Code.

ISSUE:

The primary issue here is whether or not the Regional Director had jurisdiction over the case and if so,the extent of coverage of any award that should be forthcoming, arising from his visitorial andenforcement powers under Article 128 of the Labor Code. The matter of whether or not the decisionstates clearly and distinctly statement of facts as well as the law upon which it is based, becomesrelevant after the issue on jurisdiction has been resolved.

HELD:

This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by E.O.No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, rules, andregulations relating to wages, hours of work, cost of living allowance and other monetary and welfare

benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on theDisposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). 1 Under thepresent rules, a Regional Director exercises bothvisitorial and enforcement power over labor standards

cases, and is therefore empowered to adjudicate money claims,providedthere still exists anemployer-employee relationship, and the findings of the regional office is not contestedby theemployer concerned.

Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authorityover money claims was unclear. The complaint in the present case was filed on May 23, 1986 when


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E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case ofAntonio Ong,Sr. vs. Henry M. Parel, et al., G.R. No. 76710,dated December 21, 1987, thus:

. . . the Regional Director, in the exercise of his visitorial and enforcement powersunder Article 128 of the Labor Code, has no authority to award money claims, properlyfalling within the jurisdiction of the labor arbiter. . . .

. . . If the inspection results in a finding that the employer has violated certain laborstandard laws, then the regional director must order the necessary rectifications.However, this does not include adjudication of money claims, clearly within the ambitof the labor arbiter's authority under Article 217 of the Code.

The Ong case relied on the ruling laid down in Zambales Base Metals Inc. vs. The Minister of Labor, etal., (G.R. Nos. 73184-88, November 26, 1986, 146 SCRA 50) that the "Regional Director was notempowered to share in the original and exclusive jurisdiction conferred on Labor Arbiters by Article217."

We believe, however, that even in the absence of E. O. No. 111, Regional Directors already hadenforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975,which transferred labor standards cases from the arbitration system to the enforcement system.

To clarify matters, it is necessary to enumerate a series of rules and provisions of law on thedisposition of labor standards cases.

Priorto the promulgation of PD 850, labor standards cases were an exclusive function of laborarbiters, under Article 216 of the then Labor Code (PD No. 442, as amended by PD 570-a), which readin part:

Art. 216.Jurisdiction of the Commission. The Commission shall have exclusiveappellate jurisdiction over all cases decided by the Labor Arbiters and compulsoryarbitrators.

The Labor Arbiters shall have exclusive jurisdiction to hear and decide the followingcases involving all workers whether agricultural or non-agricultural.

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(c) All money claims of workers, involving non-payment orunderpayment of wages, overtime compensation, separation pay,maternity leave and other money claims arising from employee-employer relations, except claims for workmen's compensation, socialsecurity and medicare benefits;

(d) Violations of labor standard laws;

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(Emphasis supplied)

The Regional Director exercised visitorial rights only under then Article 127 of the Code as follows:

ART. 127. Visitorial Powers. The Secretary of Labor or his duly authorizedrepresentatives, including, but not restricted, to the labor inspectorate, shall haveaccess to employers' records and premises at any time of the day or night wheneverwork is being undertaken therein, and the right to copy therefrom, to question any


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employee and investigate any fact, condition or matter which may be necessary todetermine violations or in aid in the enforcement of this Title and of any Wage Orderor regulation issued pursuant to this Code.

With the promulgation of PD 850, Regional Directors were given enforcement powers, in addition tovisitorial powers. Article 127, as amended, provided in part:

SEC. 10. Article 127 of the Code is hereby amended to read as follows:

Art. 127. Visitorial and enforcement powers.

xxx xxx xxx

(b) The Secretary of Labor or his duly authorizedrepresentatives shall have the power to order andadminister, after due notice and hearing, compliancewith the labor standards provisions of this Code basedon the findings of labor regulation officers or industrialsafety engineers made in the course of inspection, and

to issue writs of execution to the appropriate authorityfor the enforcement of their order.

xxx xxx xxx

National Service Corp. v. NLRC, 168 SCRA 125 (1988) -- The civil service does not includeGovernment owned or controlledcorporations (GOCC) which are organized as subsidiaries of GOCCunder the general corporation law.F: Eugenio Credo was an employee of the National ServiceCorporation. She claims she was illegally dismissed. NLRC ruled orderingher reinstatement. NASECOargues that NLRC has no jurisdiction to order her reinstatement. NASECO as a governmentcorporation byvirtue of its being a subsidiary of the NIDC, which is wholly owned by the Phil. NationalBank which is in turn a GOCC, the terms andconditions of employment of its employees aregoverned by the Civil Service Law citing National Housing v Juco.

ISSUE: W/N employees of NASECO, a GOCC without original charter, are governed by the Civil ServiceLaw.

HELD: NO. The holding in NHC v Juco should not be given retroactive effect, that is to cases thatarose before its promulgation of Jan 17, 1985. To do otherwise would be oppressive to Credo andother employees similarly situated because under the 1973 Constibut prior to the ruling in NHC v Juco,this court recognized the applicability of the Labor jurisdiction over disputes involving termsandconditions of employment in GOCC's, among them NASECO.In the matter of coverage by the civilservice of GOCC, the 1987 Consti starkly differs from the 1973 consti where NHC v Juco wasbased. Itprovides that the "civil service embraces all branches, subdivisions, instrumentalities, and agencies ofthe Government,including government owned or controlled corporation with original charter."Therefore by clear implication, the civil service doesnot include GOCC which are organizedas subsidiaries of GOCC under the general corporation law

G.R. No. L-68147 June 30, 1988


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AMADA RANCE, MERCEDES LACUESTA, MELBA GUTIERREZ, ESTER FELONGCO, CATALINOARAGONES, CONSOLACION DE LA ROSA, AMANCIA GAY, EDUARDO MENDOZA, ETAL., petitioners,vs.

THE NATIONAL LABOR RELATIONS COMMISSION, POLYBAG MANUFACTURINGCORPORATION, VIRGINIA MALLARI, JOHNNY LEE, ROMAS VILLAMIN, POLYBAG WORKERSUNION, PONCIANO FERNANDEZ, AND ANTONIO ANTIQUERA, respondents.

PARAS,J.:

A review of the records shows that a Collective Bargaining Agreement was entered into on April 30,1981 by and between respondents Polybag Manufacturing Corporation and Polybag Workers Unionwhich provides among others:

ARTICLE V

UNION SECURITY

Any employee within the bargaining agreement who is a member of the union at thetime of the effectivity of this agreement or becomes a member of the UNIONthereafter, shall during the term thereof or any extention, continue to be a member ingood standing of the UNION as a condition of continued employment in the COMPANY.

Any employee hired during the effectivity of this agreement shall, within 30 days after

becoming regular join the UNION and continue to be a member in good standingthereof as a condition of continued employment in the COMPANY.

On the basis of a board resolution of the UNION, the COMPANY shall dismiss from the

service any member of the UNION who loses his membership in good standing eitherby resignation therefrom or expulsion therefrom for any of the following causes:

1. Disloyalty to the UNION;

2. Commission of acts inimical to the interest of the UNION;

3. Failure and refusal to pay UNION dues and other assessments;

4. Conviction for any offense or crime; or

5. Organizing and/or joining another labor organization claiming jurisdiction similar tothat of the UNION.

Provided, however, that in case expulsion proceedings are instituted against any

member of the UNION, pending such proceedings, the COMPANY, on the basis of aboard resolution of the UNION, shall suspend the member concerned; and providedfurther, that the UNION, jointly and severally with the officers and members of theboard voting for the dismissal or suspension, shall hold and render the COMPANY, itsexecutive, owners, and officers free from any and all claims and liabilities. (Rollo, p.64).

Petitioners herein were among the members of the respondent union who were expelled by the latterfor disloyaltyin that they allegedly joined the NAFLU a large federation. Because of the expulsion,petitioners were dismissed by respondent Corporation. Petitioners sued for reinstatement and


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backwages stating their dismissal was without due process. Losing both in the decisions of the LaborArbiter and the National Labor Relations Commission (NLRC), they elevated their cause to theSupreme Court.

Respondent Polybag Workers Union as already stated expelled 125 members on the ground ofdisloyalty and acts inimical to the interests of the Union (Resolution No. 84, series of 1982, Rollo, p.16) based on the findings and recommendations of the panel of investigators. Both the Labor Arbiter

and the NLRC found the Collective Bargaining Agreement and the "Union Security Clause" valid andconsidered the termination of the petitioners justified thereunder, for having committed an act ofdisloyalty to the Polybag Workers Union by having affiliated with and having joined the NAFLU,another labor union claiming jurisdiction similar to the former, while still members of respondent union(Rollo, pp. 45-46).

Among the disputed portions of the NLRC decision is its finding that it has been substantially proventhat the petitioners committed acts of disloyalty to their union as a consequence of the filing by NAFLUfor and in their behalf of the complaint in question (Rollo, p. 46).

Petitioners insist that their expulsion from the Union and consequent dismissal from employment haveno basis whether factual or legal, because they did not in fact affiliate themselves with another Union,the NAFLU. On the contrary, they claim that there is a connivance between respondents Company and

Union in their illegal dismissal in order to avoid the payment of separation pay by respondentcompany.

Petitioners' contention that they did not authorize NAFLU to file NLRC-AB Case No. 6-4275-82 forthem is borne out by the records which show that they did not sign the complaint, neither did theysign any document of membership application with NAFLU (Rollo, p. 323). Significantly, none ofprivate respondents was able to present any evidence to the contrary except for one employee whoadmitted having authorized NAFLU to file the complaint but only for the purpose of questioning thefunds of the Union (Rollo, p. 216).

Placed in proper perspective, the mere act of seeking help from the NAFLU cannot constitute disloyaltyas contemplated in the Collective Bargaining Agreement. At most it was an act of self-preservation ofworkers who, driven to desperation found shelter in the NAFLU who took the cudgels for them.

It will be recalled that 460 employees were temporarily laid off; some were laid-off as early as March22, 1982 although the actual official announcement and notice of the intended shutdown was madeonly on May 27, 1982 (Rollo, p. 151). The laid-off employees did not receive any separation paybecause as alleged by respondent company their dismissal was due to serious business reversessuffered by it. The only aid offered by the company which was offered when the disgruntledemployees began to discuss among themselves their plight, was a 1/2 sack of rice monthly and P50.00 weekly. Most of the employees did not avail themselves of the aid as those who did wereallegedly made to sign blank papers. To aggravate matters, petitioners complained that their pleas fortheir union officers to fight for their right to reinstatement, fell on deaf ears. Their union leaders

continued working and were not among those laid-off, which explains the lack of positive action on thepart of the latter to help or even sympathize with the plight of the members. All they could offer was astatement "marunong pa kayo sa may-ari ng kumpanya" ("you know more than the companyowners") (Rollo, p. 80). Under the circumutances, petitioners cannot be blamed for seeking help

wherever it could be found.

In fact even assuming that petitioners did authorize NAFLU to file the action for them, it would havebeen pointless because NAFLU cannot file an action for members of another union. The proper remedywould be to drop the union as party to the action and place the names of the employees instead(Lakas v. Marcelo Enterprises, 118 SCRA 422 [1982]) as what appears to have been done in this casebefore the Court.

Petitioners claim that the NLRC erred in ruling that the expulsion proceeding conducted by the Union

was in accordance with its by-laws. Respondent Union had notified and summoned herein petitioners


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to appear and explain why they should not be expelled from the union for having joined and affiliatedwith NAFLU.

Petitioners contend that the requisites of due process were not complied with in that, there was noimpartial tribunal or union body vested with authority to conduct the disciplinary proceeding under theunion constitution and by-laws, and, that complainants were not furnished notice of the charge againstthem, nor timely notices of the hearings on the same (Rollo, p. 48).

According to the minutes of the special meeting of the Board of Directors of respondent Union held onSeptember 14, 1982, the Chairman of the Board of Directors showed the members of the board,copies of the minutes of the investigation proceedings of each individual member, together with aconsolidated list of Union members found guilty as charged and recommended for expulsion asmembers of the respondent Union. The Board members examined the minutes and the list (Rollo, p.219).

It is to be noted, however, that only two (2) of the expelled petitioners appeared before theinvestigation panel (Rollo, pp. 203, 235). Most of the petitioners boycotted the investigationproceedings. They alleged that most of them did not receive the notice of summons from respondentUnion because they were in the provinces. This fact was not disproved by private respondents whowere able to present only a sample copy of proof of service, Annex "14" (Rollo, p. 215). Petitioners

further claim that they had no Idea that they were charged with disloyalty; those who came were notonly threatened with persecution but also made to write the answers to questions as dictated to themby the Union and company representatives. These untoward incidents prompted petitioners to requestfor a general investigation with all the petitioners present but their request was ignored by the panelof investigators (Rollo, pp. 280, 307). Again, these allegations were not denied by privaterespondents.

In any event, even if petitioners who were complainants in NLRC-AB Case No. 6-4275-82 appeared inthe supposed investigation proceedings to answer the charge of disloyalty against them, it could nothave altered the fact that the proceedings were violative of the elementary rule of justice and fair

play. The Board of Directors of respondent union would have acted as prosecutor, investigator andjudge at the same time. The proceeding would have been a farce under the circumstances (LitEmployees Association v. Court of Industrial Relations, 116 SCRA 459 [1982] citing Kapisanan ng MgaManggagawa sa MRR v. Rafael Hernandez, 20 SCRA 109). The filing of the charge of disloyalty againstpetitioners was instigated by the Chairman of the Board of Directors and Acting Union President,Ponciano Fernandez, in the special meeting of the members of the Board of Directors as convened bythe Union President on August 16, 1982 (Rollo, p. 213). The Panel of Investigators created under the

Board's Resolution No. 83, s. 1982 was composed of the Chairman of the Board, Ponciano Fernandez,and two (2) members of the Board, Samson Yap and Carmen Garcia (Rollo, p. 214). It is the sameBoard that expelled its 125 members in its Resolution No. 84, s. of 1982 (Rollo, p. 219).

All told, it is obvious, that in the absence of any full blown investigation of the expelled members ofthe Union by an impartial body, there is no basis for respondent Union's accusations.

It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII, Sec. 3 ofthe New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of socialjustice. When a person has no property, his job may possibly be his only possession or means of

livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. Article 280 ofthe Labor Code has construed security of tenure as meaning that "the employer shall not terminatethe services of an employee except for a just cause or when authorized by" the code (Bundoc v.People's Bank and Trust Company, 103 SCRA 599 [1981]). Dismissal is not justified for being arbitrarywhere the workers were denied due process (Reyes v. Philippine Duplicators, Inc., 109 SCRA 489[1981] and a clear denial of due process, or constitutional right must be safeguarded against at alltimes, (De Leon v. National Labor Relations Commission, 100 SCRA 691 [1980]). This is especiallytrue in the case at bar where there were 125 workers mostly heads or sole breadwinners of theirrespective families.


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Time and again, this Court has reminded employers that while the power to dismiss is a normalprerogative of the employer, the same is not without limitations. The employer is bound to exercisecaution in terminating the services of his employees especially so when it is made upon the request ofa labor union pursuant to the Collective Bargaining Agreement, as in the instant case. Dismissals mustnot be arbitrary and capricious. Due process must be observed in dismissing an employee because itaffects not only his position but also his means of livelihood. Employers should, therefore, respect andprotect the rights of their employees, which include the right to labor (Liberty Cotton Mills Workers

Union v. Liberty Cotton Mills, Inc., 90 SCRA 393 [1979], Resolution).

In the case at bar, the scandalous haste with which respondent corporation dismissed 125 employeeslends credence to the claim that there was connivance between respondent corporation andrespondent Union. It is evident that private respondents were in bad faith in dismissing petitioners.They, the private respondents, are guilty of unfair labor practice.

PREMISES CONSIDERED, (1) the decision of respondent National Labor Relations Commission inNLRC-NCR-11-6881-82 dated April 26, 1984 is REVERSED and SET ASIDE; and (2) respondentcorporation is ordered: (1) to reinstate petitioners to their former positions without reduction in rank,seniority and salary; (b) to pay petitioners three-year backwages, without any reduction orqualification, jointly and solidarily with respondent Union; and (c) to pay petitioners exemplarydamages of P500.00 each. Where reinstatement is no longer feasible, respondent corporation and

respondent union are solidarily ordered to pay, considering their length of service their correspondingseparation pay and other benefits to which they are entitled under the law.

SO ORDERED.

G.R. No. 70615 October 28, 1986


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VIRGILIO CALLANTA, petitioner,vs.CARNATION PHILIPPINES, INC., and NATIONAL LABOR RELATIONS COMMISSION[NLRC], respondents.

Danilo L. Pilapil for petitioner.

FERNAN,J.:

The issue raised in this petition for certiorari is whether or not an action for illegal dismissal prescribesin three [3] years pursuant to Articles 291 and 292 of the Labor Code which provide:

Art. 291. Offenses. Offenses penalized under this Code and the rules and regulationsissued pursuant thereto shall prescribe in three [3] years.

xxx xxx xxx

Art. 292. Money Claims. Allmoney claims arising from employer-employee relationsaccruing during the effectivity of this Code shall be filed within three [3] years fromthe time the cause of action accrued; otherwise, they shall be forever barred.

xxx xxx xxx

Petitioner Virgilio Callanta was employed by private respondent Carnation Philippines, Inc. [Carnation,

for brevity] in January 1974 as a salesman in the Agusan del Sur area. Five [51 years later or on June1, 1979, respondent Carnation filed with the Regional Office No. X of the Ministry of Labor andEmployment [MOLE], an application for clearance to terminate the employment of Virgilio Callanta onthe alleged grounds of serious misconduct and misappropriation of company funds amounting toP12,000.00, more or less.

Upon approval on June 26, 1979 by MOLE Regional Director Felizardo G. Baterbonia, of said clearanceapplication, petitioner Virgilio Callanta's employment with Carnation was terminated effective June 1,1979.

On July 5, 1982, Virgilio Callanta filed with the MOLE, Regional Office No. X, a complaint for illegaldismissal with claims for reinstatement, backwages, and damages against respondent Carnation.

In its position paper dated October 5, 1982, respondent Carnation put in issue the timeliness ofpetitioner's complaint alleging that the same is barred by prescription for having been filed more thanthree [3] years after the date of Callanta's dismissal.

On March 24, 1983, Labor Arbiter Pedro C. Ramos rendered a decision finding the termination ofCallanta's employment to be without valid cause. Respondent Carnation was therefore ordered to

reinstate Virgilio Callanta to his former position with backwages of one [1] year without qualificationincluding all fringe benefits provided for by law and company policy, within ten [10] days from receiptof the decision. It was likewise provided that failure on the part of respondent to comply with thedecision shall entitle complainant to full backwages and all fringe benefits without loss of seniorityrights.

On April 18, 1983, respondent Carnation appealed to respondent National Labor Relations Commission[NLRC] which in a decision dated February 25, 1985, 1 set aside the decision of the Labor Arbiter. Itdeclared the complaint for illegal dismissal filed by Virgilio Callanta to have already prescribed. Thus:


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Records show that Virgilio Callanta was dismissed from his employment withrespondent company effective June 1, 1979; and that on 5 July 1982, he filed theinstant complaint against respondent for: Unlawful Dismissal with Backwages, etc.

The provisions of the Labor Code applicable are:

Art. 291. Offenses. Offenses penalized under this Code and the rules andregulations issued pursuant thereto shall prescribe in three [3] years.

Art. 292. Money claims. All money claims arising from employer-employee relationsaccruing during the effectivity of this Code shall be filed within three [3] years fromthe time the cause of action accrued; otherwise, they shall be forever barred.

Obviously, therefore, the causes of action, i.e., "Unlawful Dismissal" and "Backwages,etc." have already prescribed, the complaint therefore having been filed beyond thethree-year period from accrual date.

With this finding, there is no need to discuss the other issues raised in the appeal.

WHEREFORE, in view of the foregoing, the Decision appealed from is hereby SETASIDE and another one entered, dismissing the complaint.

SO ORDERED.

Hence, this petition, which We gave due course in the resolution dated September 18, 1985. 2

Petitioner contends that since the Labor Code is silent as to the prescriptive period of an action forillegal dismissal with claims for reinstatement, backwages and damages, the applicable law, by way ofsupplement, is Article 1146 of the New Civil Code which provides a four [4]-year prescriptive periodfor an action predicated upon "an injury to the rights of the plaintiff" considering that an action forillegal dismissal is neither a "penal offense" nor a mere "money claim," as contemplated under Articles291 and 292, respectively, of the Labor Code. Petitioner further claims that an action for illegal

dismissal is a more serious violation of the rights of an employee as it deprives him of his means oflivelihood; thus, it should correspondingly have a prescriptive period longer than the three 13] yearsprovided for in "money claims."

Public respondent, on the other hand, counters with the arguments that a case for illegal dismissalfalls under the general category of "offenses penalized under this Code and the rules and regulationspursuant thereto" provided under Article 291 or a money claim under Article 292, so that petitioner'scomplaint for illegal dismissal filed on July 5, 1982, or three [3] years, one [1] month and five [5]days after his alleged dismissal on June 1, 1979, was filed beyond the three-year prescriptive periodas provided under Articles 291 and 292 of the Labor Code, hence, barred by prescription; that while itis admittedly a more serious offense as it involves an employee's means of livelihood, there is no logic

in assuming that it has a longer prescriptive period, as naturally, one who is truly aggrieved wouldimmediately seek the redress of his grievance; that assuming arguendo that the law does not providefor a prescriptive period for the enforcement of petitioner's right, it is nevertheless beyond dispute

that the said right has already lapsed into a stale demand; and that considering the seriousness of theact committed by petitioner, private respondent was justified in terminating the employment.

We find for petitioner.

Verily, the dismissal without just cause of an employee from his employment constitutes a violation ofthe Labor Code and its implementing rules and regulations. Such violation, however, does not amountto an "offense" as understood under Article 291 of the Labor Code. In its broad sense, an offense is anillegal act which does not amount to a crime as defined in the penal law, but which by statute carries


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with it a penalty similar to those imposed by law for the punishment of a crime. 3It is in this sensethat a general penalty clause is provided under Article 289 of the Labor Code which provides that "...any violation of the provisions of this code declared to be unlawful or penal in nature shall be punishedwith a fine of not less than One Thousand Pesos [P1,000.00] nor more than Ten Thousand Pesos[10,000.00], or imprisonmentof not less than three [3] months nor more than three [3] years, orboth such fine and imprisonment at the discretion of the court." [Emphasis supplied.]

The confusion arises over the use of the term "illegal dismissal" which creates the impression thattermination of an employment without just cause constitutes an offense. It must be noted, howeverthat unlike in cases of commission of any of the probihited activities during strikes or lockouts underArticle 265, unfair labor practices under Article 248, 249 and 250 and illegal recruitment activitiesunder Article 38, among others, which the Code itself declares to be unlawful, termination of anemployment without just or valid cause is not categorized as an unlawful practice.

Besides, the reliefs principally sought by an employee who was illegally dismissed from hisemployment are reinstatement to his former position without loss of seniority rights and privileges, ifany, backwages and damages, in case there is bad faith in his dismissal. As an affirmative relief,reinstatement may be ordered, with or without backwages. While ordinarily, reinstatement is aconcomitant of backwages, the two are not necessarily complements, nor is the award of one acondition precedent to an award of the other. 4 And, in proper cases, backwages may be awarded

without ordering reinstatement . In either case, no penalty of fine nor improsonment is imposed onthe employer upon a finding of illegality in the dismissal. By the very nature of the reliefs sought,therefore, an action for illegal dismissal cannot be generally categorized as an "offense" as used underArticle 291 of the Labor Code, which according to public respondent, must be brought within the

period of three[3] years from the time the cause of action accrued, otherwise, the same is foreverbarred.

It is true that the "backwwages" sought by an illegally dismissed employee may be considered, byreason of its practical effect, as a "money claim." However, it is not the principal cause of action in anillegal dismissal case but the unlawful deprivation of the one's employment committed by theemployer in violation of the right of an employee. Backwages is merely one of the reliefs which anillegally dismissed employee prays the labor arbiter and the NLRC to render in his favor as aconsequence of the unlawful act committed by the employer. The award thereof is not privatecompensation or damages 5but is in furtherance and effectuation of the public objectives of the Labor

Code. 6even though the practical effect is the enrichment of the individual, the award of backwages isnot inredness of a private right, but, rather, is in the nature of a command upon the employer tomake public reparation for his violation of the Labor Code. 7

The case ofValencia vs. Cebu Portland Cement, et al., 106 Phil. 732, a 1959 case cited by petitioner,is applicable in the instant case insofar as it concerns the issue of prescription of actions. In said case,this Court had occasion to hold that an action for damages involving a plaintiff seperated from hisemployment for alleged unjustifiable causes is one for " injury to the rights of the plaintiff, and mustbe brought within four [4] years. 8

In Santos vs. Court of Appeals, 96 SCRA 448 [1980], this Court, thru then Chief Justice Enrique M.Fernando, sustained the sand of the Solicitor General that the period of prescription mentioned underArticle 281, now Article 292, of the Labor Code, refers to and "is limited to money claims, an other

cases of injury to rights of a workingman being governed by the Civil Code." Accordingly, this Courtruled that petitioner Marciana Santos, who sought reinstatement, had four [4] years within which tofile her complaint for the injury to her rights as provided under Article 1146 of the Civil Code.

Indeed there is, merit in the contention of petitioner that the four [4]-year prescriptive period underArticle 1146 of the New Civil Code, applies by way of supplement, in the instant case, to wit:

Art. 1146. The following actions must be instituted within four years.

[1] Upon an injury to the lights of the plaintiff.


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xxx xxx xxx

[Emphasis supplied]

As this Court stated in Bondoc us. People's Bank and TrustCo., 9 when a person has no property, hisjob may possibly be his only possession or means of livelihood, hence, he should be protected against

any arbitrary and unjust deprivation of his job. Unemployment, said the Court inAlmira vs. B.F.Goodrich Philippines, 10 brings "untold hardships and sorrows on those dependent on the wageearners. The misery and pain attendant on the loss of jobs thus could be avoided if there beacceptance of the view that under all the circumstances of this case, petitioners should not bedeprived of their means of livelihood."

It is a principle in American jurisprudence which, undoubtedly, is well-recognized in this jurisdictionthat one's employment, profession, trade or calling is a "property right," and the wrongful interferencetherewith is an actionable wrong. 11 The right is considered to be property within the protection of aconstitutional guaranty of due process of law. 12Clearly then, when one is arbitrarily and unjustlydeprived of his job or means of livelihood, the action instituted to contest the legality of one'sdismissal from employment constitutes, in essence, an action predicated "upon an injury to the rightsof the plaintiff," as contemplated under Art. 1146 of the New Civil Code, which must be brought withinfour [4] years.

In the instant case, the action for illegal dismissal was filed by petitioners on July 5, 1982, or three [3]years, one [1] month and five [5] days after the alleged effectivity date of his dismissal on June 1,1979 which is well within the four [4]-year prescriptive period under Article 1146 of the New CivilCode.

Even on the assumption that an action for illegal dismissal falls under the category of "offenses" or"money claims" under Articles 291 and 292, Labor Code, which provide for a three-year prescriptiveperiod, still, a strict application of said provisions will not destroy the enforcement of fundamentalrights of the employees. As a statutory provision on limitations of actions, Articles 291 and 292 go tomatters of remedy and not to the destruction of fundamental rights. 13 As a general rule, a statute oflimitation extinguishes the remedy only. Although the remedy to enforce a right may be barred, thatright may be enforced by some other available remedy which is not barred. 14

More so, in the instant case, where the delay in filing the case was with justifiable cause. The threat topetitioner that he would be charged with estafa if he filed a complaint for illegal dismissal, whichprivate respondent did after all on June 22, 1981, justifies, the delayed filing of the action for illegaldismissal with the Regional Office No. X, MOLE on July 5, 1982. Laches will not in that sensestrengthen the cause of public respondent. Besides, it is deemed waived as it was never allegedbefore the Labor Arbiter nor the NLRC.

Public respondent dismissed the action for illegal dismissal on the sole issue of prescription of actions.It did not resolve the case of illegal dismissal on the merits. Nonetheless, to resolve once and for allthe issue of the legality of the dismissal, We find that petitioner, who has continuously servedrespondent Carnation for five [5] years was, under the attendant circumstances, arbitrarily dismissedfrom his employment. The alleged shortage in his accountabilities should have been impartiallyinvestigated with all due regard for due process in view of the admitted enmity between petitioner and

E.L. Corsino, respondent's auditor. 15 Absent such an impartial investigation, the alleged shortageshould not have been attended with such a drastic consequence as termination of the employmentrelationship. Outright dismissal was too severe a penalty for a first offense, considering that thealleged shortage was explained to respondent's Auditor, E.L. Corsino, in accordance with respondent'saccounting and auditing policies.

The indecent haste of his dismissal from employment was, in fact, aggravated by the filing of theestafa charge against petitioner with the City Fiscal of Butuan City on June 22, 1981, or two [2] yearsafter his questioned dismissal. After the case had remained pending for five [5] years, the Regional

Trial Court of Agusan del Norte and Butuan City, Branch V finally dismissed the same provisionally in


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an order dated February 21, 1986 for failure of the prosecution's principal witness to appear in court.Admittedly, loss of trust and confidence arising from the same alleged misconduct is sufficient groundfor dismissing an employee from his employment despite the dismissal of the criminalcase. 16However, it must not be indiscriminately used as a shield to dismiss an employeearbitrarily. 17 For, who can stop the employer from filing all the charges in the books for the simpleexercise of it, and then hide behind the pretext of loss of confidence which can be proved by merepreponderance of evidence.

We grant the petition and the decision of the NLRC is hereby reversed and set aside. Although We arestrongly inclined to affirm that part of the decision of the Labor Arbiter ordering the reinstatement ofpetitioner to his former position without loss of seniority rights and privileges, a supervening event,which petitioner mentioned in his motion for early decision dated January 6, 1986 18 that is, FILIPRO,Inc.'s taking over the business of Carnation, has legally rendered the order of reinstatement difficult toenforce, unless there is an express agreement on assumption of liabilities 19 by the purchasing

corporation, FILIPRO, Inc. Besides, there is no law requiring that the purchasing corporation shouldabsorb the employees of the selling corporation. 20In any case, the very concept of social justicedictates that petitioner shall be entitled to backwages of three [3] years. 21

WHEREFORE, respondent Carnation Philippines, Inc. is hereby ordered to pay petitioner VirgilioCallanta backwages for three [3] years without qualification and deduction. This decision is

immediately executory. No costs.

G.R. No. 144664 March 15, 2004

ASIAN TRANSMISSION CORPORATION, petitioner,vs.The Hon. COURT OF APPEALS, Thirteenth Division, HON. FROILAN M. BACUNGAN asVoluntary Arbitrator, KISHIN A. LALWANI, Union, Union representative to the PanelArbitrators; BISIG NG ASIAN TRANSMISSION LABOR UNION (BATLU); HON. BIENVENIDO T.LAGUESMA in his capacity as Secretary of Labor and Employment; and DIRECTOR CHITA G.CILINDRO in her capacity as Director of Bureau of Working Conditions, respondents.

D E C I S I O N

CARPIO-MORALES,J.:

Petitioner, Asian Transmission Corporation, seeks via petition for certiorariunder Rule 65 of the 1995Rules of Civil Procedure the nullification of the March 28, 2000 Decision1 of the Court of Appealsdenying its petition to annul 1) the March 11, 1993 "Explanatory Bulletin" 2 of the Department of Laborand Employment (DOLE) entitled "Workers Entitlement to Holiday Pay on April 9, 1993, Araw ngKagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July31, 1998 Decision3 of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin


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applied as well to April 9, 1998, and 3) the September 18, 19984 Resolution of the Panel of VoluntaryArbitration denying its Motion for Reconsideration.

The following facts, as found by the Court of Appeals, are undisputed:

The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano,

issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees areentitled to 200% of their basic wage on April 9, 1993, whether unworked, which[,] apart from beingGood Friday [and, therefore, a legal holiday], is alsoAraw ng Kagitingan [which is also a legalholiday]. The bulletin reads:

"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Fridayis alsoAraw ng Kagitingan, i.e., two regular holidays falling on the same day, this Department isof the view that the covered employees are entitled to at least two hundred percent (200%) of theirbasic wage even if said holiday is unworked. The first 100% represents the payment of holiday pay onApril 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date asAraw ng Kagitingan.

Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy ThursdayandAraw ng Kagitingan x x x x

Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to payits daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng AsianTransmission Labor Union (BATLU) protested.

In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA)existing between petitioner and BATLU, the controversy was submitted for voluntary arbitration. x x xx On July 31, 1998,the Office of the Voluntary Arbitrator rendered a decision directing petitioner topay its covered employees "200% and not just 100% of their regular daily wages for the unworkedApril 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy Thursday."(Emphasis and underscoring supplied)

Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:

ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regularholidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall bepaid a compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday,the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth ofNovember, the twenty-fifth and thirtieth of December and the day designated by law forholding a general election,

which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular

holidays are now:

1. New Years Day January 1

2. Maundy Thursday Movable Date

3. Good Friday Movable Date

4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)


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5. Labor Day May 1

6. Independence Day June 12

7. National Heroes Day Last Sunday of August

8. Bonifacio Day November 30

9. Christmas Day December 25

10. Rizal Day December 30

In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitratorheld that Article 94 of the Labor Code provides for holiday pay for every regular holiday, thecomputation of which is determined by a legal formula which is not changed by the fact that there aretwo holidays falling on one day, like on April 9, 1998 when it was Araw ng Kagitingan and at the sametime was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for

every year should not be interpreted as authorizing a reduction to nine the number of paid regularholidays "just because April 9 (Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy

Friday or Maundy Thursday."

In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holdingthat the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing therelations between them, clearly recognizes their intent to considerAraw ng Kagitingan and MaundyThursday, on whatever date they may fall in any calendar year, as paid legal holidays during theeffectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance fromthe clear intent that all holidays shall be compensated."5

The Court of Appeals further held that "in the absence of an explicit provision in law which provides for[a] reduction of holiday pay if two holidays happen to fall on the same day, any doubt in the

interpretation and implementation of the Labor Code provisions on holiday pay must be resolved infavor of labor."

By the present petition, petitioners raise the following issues:

I

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OFDISCRETION IN ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAININGAGREEMENT BETWEEN THE PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THEAGREEMENTS MADE BY THE PARTIES THEMSELVES

II

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF

DISCRETION IN HOLDING THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATEDIN THE EXPLANATORY BULLETIN WAS LAID TO REST BY THE REISSUANCE OF THE SAIDEXPLANATORY BULLETIN

III

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OFDISCRETION IN UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTINGTHAT THE SAID BULLEITN WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THERULES AND REGULATIONS THAT [Department of Labor and Employment] DOLE MAY PROMULGATE


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IV

WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BYISSUING EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDINGGUIDELINES ON ART. 94 OF THE LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS ITLEGISLATED AND INTERPRETED LEGAL PROVISIONS IN SUCH A MANNER AS TO CREATEOBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW

V

WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OFDISCRETION IN SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITSEXPLANATORY BULLETIN DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICYOBTAINED FOR APRIL 9, 1998 DESPITE THE RULINGS OF THE SUPREME COURT TO THE CONTRARY

VI

WHETHER OR NOT RESPONDENTS ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUEPROCESS BY THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS

The petition is devoid of merit.

At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition forreview oncertiorariunder Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the presentpetition for certiorari under Rule 65.

[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errorscommitted by it in the exercise of its jurisdiction would be errors of judgment which are reviewable bytimely appeal and not by a special civil action ofcertiorari. If the aggrieved party fails to do so withinthe reglementary period, and the decision accordingly becomes final and executory, he cannot availhimself of the writ of certiorari, his predicament being the effect of his deliberate inaction.

The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 andnot a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, ofthe 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of theCourt of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, maybe appealed to this Court by filing a petition for review, which would be but a continuation of theappellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen(15) days from notice of judgment or denial of motion for reconsideration.

x x x

For the writ ofcertiorariunder Rule 65 of the Rules of Court to issue, a petitioner must show that hehas no plain, speedy and adequate remedy in the ordinary course of law against its perceivedgrievance. A remedy is considered "plain, speedy and adequate" if it will promptly relieve thepetitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this

case, appeal was not only available but also a speedy and adequate remedy.6

The records of the case show that following petitioners receipt on August 18, 2000 of a copy of theAugust 10, 2000 Resolution of the Court of Appeals denying its Motion for Reconsideration, it filed thepresent petition for certiorari on September 15, 2000, at which time the Court of Appeals decision hadbecome final and executory, the 15-day period to appeal it under Rule 45 having expired.

Technicality aside, this Court finds no ground to disturb the assailed decision.


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Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shallafford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income ofthe workers on account of work interruptions. In other words, although the worker is forced to take arest, he earns what he should earn, that is, his holiday pay." 8 It is also intended to enable the workerto participate in the national celebrations held during the days identified as with great historical andcultural significance.

Independence Day (June 12),Araw ng Kagitingan (April 9), National Heroes Day (last Sunday ofAugust), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidaysto afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people,promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionallyreserved to celebrate the contributions of the working class to the development of the nation, whilethe religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faithwith his family.

As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of tenpaid regular holidays.9 The provision is mandatory,10 regardless of whether an employee is paid on amonthly or daily basis.11Unlike a bonus, which is a management prerogative,12 holiday pay is astatutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paidregular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine

the ten holiday pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clearand unequivocal, the law must be taken to mean exactly what it says.13 In the case at bar, there isnothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall bereduced to nine when two holidays fall on the same day.

Petitioners assertion thatWellington v. Trajano14 has "overruled" the DOLE March 11, 1993Explanatory Bulletin does not lie. In Wellington, the issue was whether monthly-paid employees areentitled to an additional days pay if a holiday falls on a Sunday. This Court, in answering the issue in

the negative, observed that in fixing the monthly salary of its employees, Wellington took into account"every working day of the year including the holidays specified by law and excluding only Sunday." Inthe instant case, the issue is whether daily-paid employees are entitled to be paid for two regularholidays which fall on the same day.15

In any event, Art. 4 of the Labor Code provides that all doubts in the implementation andinterpretation of its provisions, including its implementing rules and regulations, shall be resolved infavor of labor. For the working mans welfare should be the primordial and paramount consideration.16

Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that"Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits,supplements or payments for unworked regular holidays as provided in existing individual or collectiveagreement or employer practice or policy."17

From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself topay for the legal holidays as required by law. Thus, the 1997-1998 CBA incorporates the followingprovision:

ARTICLE XIVPAID LEGAL HOLIDAYS

The following legal holidays shall be paid by the COMPANY as required by law:

1. New Years Day (January 1st)

2. Holy Thursday (moveable)


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3. Good Friday (moveable)

4. Araw ng Kagitingan (April 9th)

5. Labor Day (May 1st)

6. Independence Day (June 12th)

7. Bonifacio Day [November 30]

8. Christmas Day (December 25th)

9. Rizal Day (December 30th)

10. General Election designated by law, if declared public non-working holiday

11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall beentitled to the holiday pay.

A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment inaddition to normal vacation pay but will not entitle the employee to another vacation leave.

Under similar circumstances, the COMPANY will give a days wage for November 1st and December31st whenever declared a holiday. When required to work on said days, the employee will be paidaccording to Art. VI, Sec. 3B hereof.18

WHEREFORE, the petition is hereby DISMISSED

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the July

27, 2001 Decision[2] and the January 29, 2002 Resolution[3] of the Court of Appeals (CA) in CA-GR

SP No. 50679. The dispositive portion of the Decision reads as follows:

WHEREFORE, premises considered, the decision dated May 30, 1997 of public respondent ishereby ANNULLED and SET ASIDEand the decision, dated February 27, 1997 of LaborArbiter Andres Zavalla is REINSTATED and AFFIRMED in toto. Costs against [hereinpetitioners].[4]
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The assailed Resolution denied petitioners' Motion for Reconsideration.

Land and housing corporation vs Esquillo

The Facts

The antecedents are narrated by the CA as follows:

[Respondent] Marianito C. Esquillo was hired as a structural engineer by [Petitioner] ABV RockGroup (ABV') based in Jeddah, Kingdom of Saudi Arabia. He commenced employment on July27, 1989, with an initial monthly salary of US$1,000.00 that was gradually increased, onaccount of his good performance and the annual renewal of his employment contract, until itreached US$1,300.00. Private respondent Land & Housing Development Corporation (LHDC'),a local placement agency, facilitated [respondent's ] employment papers.

Although [respondent's ] employment contract was supposed to be valid until July 26, 1995, itwas pre-terminated, through an Inter-Office Memo on Notice of Termination, dated November17, 1994, allegedly, for the reason, 'reduction of force. Petitioner however, claims that thereason adduced was 'negated by the fact that a lot of transferees from other sites were takenin and promotions as well as re-classifications in the lower ranks were done as shown by thelist of fifteen (15) transferees from Riyadh effective November 5, 1994, as well as letters of


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promotion and re-classification. He further claimed that [Petitioner] ABV maliciouslyconfiscated his 'iqama or resident visa despite the fact that it was [respondent's ] previousemployer, FEAL IBC., which secured his 'iqama. Consequently, [respondent] was preventedfrom getting another job in Jeddah.

[Respondent] subsequently received the amount of twenty-three thousand, one hundred fifty-three Saudi Riyals (SR23,153.00) from [Petitioner] ABV, as final settlement of his claims andwas issued an exit visa that required him to immediately go back to the Philippines.

As a result of the foregoing, [respondent] filed a complaint for breach of contract and/or illegaldismissal, before the Philippine Overseas Employment Administration which was referred tothe National Labor Relations Commission, Sub-Regional Arbitration Branch No. IV, San PabloCity, and docketed as SRAB-IV-4-0053-96-L. The parties were required to file their positionpapers and responsive pleadings.

In their position paper, [petitioners] maintained that [respondent's ] dismissal was for validcause, that is, reduction of force. Due to the Gulf War, the projects of [Petitioner] ABV werereduced and it was forced to 'terminate the contracts of workers whose job were not soimmediate and urgent and retain only those workers whose skills were needed just tomaintain the projects. [Respondent] was informed, one month in advance, of the pre-termination of his contract, and he was paid his salary, overtime pay, bonus and otherbenefits in the total amount of US$6,716.00 or Saudi Riyals SR25,192.00. With respect to thealleged confiscation of [respondent's ] iqama, [petitioners] alleged that the law requires itssurrender to the Saudi authorities upon the termination of the employee's contract ofemployment.

Upon the submission of the case for resolution, the Hon. Labor Arbiter Andres Zavalla issuedhis Decision, dated February 27, 1997, decreeing, as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering[petitioners] jointly and severally to pay [respondent] his salariescorresponding to the unexpired portion of his contract from December 19,1994 up to July 26, 1995 in the total amount of NINE THOUSAND FOUR

HUNDRED FORTY SEVEN U.S. Dollars (US$9,447.00) and ten percent(10%) of his monetary award as attorney's fees both in Philippinecurrency to be computed at the prevailing rate at the time of payment.

All other claims of [respondent] are hereby dismissed for lack of merit.

SO ORDERED.

When [petitioners] filed their joint appeal, docketed as NLRC NCR CA No. 012650-97, [theNLRC] in a Decision, dated May 30, 1997, reversed the aforecited decision and dismissed the


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[respondent's ] complaint for lack of merit. [Respondent's ] motion for reconsideration wasdenied in a Resolution, dated July 10, 1997.[5]

Ruling of the Court of Appeals

The Court of Appeals ruled that despite the absence of a written categorical objection to the

sufficiency of the payment received as consideration for the execution of the quitclaim,
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jurisprudence supported the right of respondent to demand what was rightfully his under our labor

laws. Hence, he should have been allowed to recover the difference between the amount he had

actually received and the amount he should have received.

The CA also found that the NLRC had erroneously applied RA 8042 to the case. The appellate court

held that respondent was entitled to the salaries corresponding to the unexpired portion of his

Contract, in addition to what he had already received.

Hence, this Petition.[6]

The Issues

Petitioners raise the following issues for this Court's consideration:

A. Whether or not the Honorable Court of Appeals committed reversible error when it tookcognizance of an issue of fact which was raised for the first time on appeal.

B. Whether or not the Honorable Court of Appeals committed reversible error in its 27 July2001 Decision and 29 January 2002 Resolution by affirming the 27 February 1997 Decision of

the Labor Arbiter which rendered as null and void and without binding effect the release andquitclaim executed by the respondent in favor of the petitioners, and, thereafter, granted therespondent monetary award.[7]

In the main, the issue is whether respondent, despite having executed a quitclaim, is entitled to a

grant of his additional monetary claims.

The Court's Ruling

The Petition has no merit.

At the outset, the Court notes the Manifestation of the Office of the Solicitor General (OSG),

recommending that the decision dated May 30, 1997 of the NLRC be annulled and set aside and that
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[Respondent] Esquillo be awarded the total amount of his salaries corresponding to the unexpired

portion of his contract of employment.

Main Issue:

Entitlements of a Dismissed

Employee Who Has Executed a Quitclaim

The factual findings of labor officials, who are deemed to have acquired expertise in matters within

their respective jurisdictions, are generally accorded not only respect but finality.[9] In the present

case, the labor arbiter found respondent's dismissal to be illegal and devoid of any just or authorized

cause. The factual findings of the NLRC and the CA on this matter were not contradictory. Hence, the

Court finds no reason to deviate from their factualfinding that respondent was dismissed without any

legal cause.

Indeed, an employee cannot be dismissed except for cause, as provided by law, and only after due

notice and hearing Employees who are dismissed without cause have the right to be reinstated

without loss of seniority rights and other privileges; and to be paid full back wages, inclusive of

allowances and other benefits, plus proven damages. With regard to contract workers, in cases arising

before the effectivity of RA 8042 (the Migrant Workers and Overseas Filipinos Act[11]), it is settled

that if 'the contract is for a fixed term and the employee is dismissed without just cause, he is entitled

to the payment of his salaries corresponding to the unexpired portion of his contract .[12] In the

present case, the Contract of respondent was until July 26, 1995. Since his dismissal from service

effective December 18, 1994, was not for a just cause, he is entitled to be paid his salary

corresponding to the unexpired portion of his Contract, in the total amount of US$9,447.

We now go to the Release and Quitclaim signed by respondent. The document, which was prepared by

Petitioner ABV Rock Group,[13] states:

KNOW ALL MEN BY THESE PRESENTS:
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That for and in consideration of the sum of Saudi Riyals SR: TWENTY THREE THOUSAND ONE

HUNDRED FIFTY THREE (SR23,153) receipt of which is hereby acknowledged to my full and

complete satisfaction, I,MARIANITO C. ESQUILLO do discharge my employer, ABV ROCK

GROUP KB, JEDDAH, & its recruitment agent, the LAND & HOUSING DEVP. CORP., from any

and all claims, demands, debts, dues, actions, or causes of action, arising from my

employment with aforesaid company/firm/entity.

'I hereby certify that I am of legal age, that I fully understand this instrument and agree that

this is a full and final release and discharge of the parties referred to herein, and I further

agree that this release may be pleaded as absolute and final bar to any suit or suits or legal

proceedings that may hereafter be prosecuted by me against aforementioned

companies/entities.

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HANDS THIS 29 day of NOV, 1994

'at JEDDAH.

SIGNED

MARIANITO C. ESQUILLO.[14]

Petitioners claim that the foregoing Release and Quitclaim has forever released them from

'any and all claims, demands, dues, actions, or causes of action arising from respondent's

employment with them. They also contend that the validity of the document can no longer be

questioned.


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Unfortunately for petitioners, jurisprudence does not support their stance. The fact that employees

have signed a release and/or quitclaim does not necessarily result in the waiver of their claims. The

law strictly scrutinizes agreements in which workers agree to receive less compensation than what

they are legally entitled to. That document does not always bar them from demanding benefits to

which they are legally entitled.[15] The reason for this policy was explained, inter alia, in Marcos v.

National Labor Relations Commission, which we quote:

We have heretofore explained that the reason why quitclaims are commonly frowned upon as

contrary to public policy, and why they are held to be ineffective to bar claims for the full

measure of the workers' legal rights, is the fact that the employer and the employee obviously

do not stand on the same footing. The employer drove the employee to the wall. The latter

must have to get hold of money. Because, out of a job, he had to face the harsh necessities of

life. He thus found himself in no position to resist money proffered. His, then, is a case of

adherence, not of choice. One thing sure, however, is that petitioners did not relent on their

claim. They pressed it. They are deemed not [to] have waived any of their rights. Renuntiatio

non praesumitur.

Along this line, we have more trenchantly declared that quitclaims and/or complete releases

executed by the employees do not estop them from pursuing their claims arising from unfair

labor practices of the employer. The basic reason for this is that such quitclaims and/or

complete releases are against public policy and, therefore, null and void. The acceptance of

termination does not divest a laborer of the right to prosecute his employer for unfair labor

practice acts. While there may be possible exceptions to this holding, we do not perceive any

in the case at bar.

x x x x x x x x x


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We have pointed out in Veloso, et al. vs. Department of Labor and Employment, et al., that:

While rights may be waived, the same must not be contrary to law,

public order, public policy, morals or good customs or prejudicial to a

third person with a right recognized by law.

Article 6 of the Civil Code renders a quitclaim agreement void ab

initio where the quitclaim obligates the workers concerned to forego

their benefits while at the same time exempting the employer from

any liability that it may choose to reject. This runs counter to Art. 22

of the Civil Code which provides that no one shall be unjustly enriched

at the expense of another.[16]

In Periquet v. NLRC, this Court set the guidelines and the current doctrinal policy regarding quitclaims

and waivers, as follows:

Not all waivers and quitclaims are invalid as against public policy. If the agreement was

voluntarily entered into and represents a reasonable settlement, it is binding on the parties

and may not later be disowned simply because of a change of mind. It is only where there is

clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms

of settlement are unconscionable on its face, that the law will step in to annul the questionable


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transaction. But where it is shown that the person making the waiver did so voluntarily, with

full understanding of what he was doing, and the consideration for the quitclaim is credible

and reasonable, the transaction must be recognized as a valid and binding undertaking.[17]

Hence, quitclaims in which employees voluntarily accept a reasonable amount or consideration as

settlement are deemed valid. These agreements cannot be set aside merely because the parties have

subsequently changed their minds.[18] Consistent with this doctrine, a tribunal has the duty of

scrutinizing quitclaims brought to its attention by either party, in order to determine their validity.

In the present case, petitioners themselves offered the Release and Quitclaim as a defense. Even

though respondent -- in his pleadings before the labor arbiter -- was silent on the matter, he

nonetheless filed this case and questioned his dismissal immediately, a few days after setting foot in

the Philippines. In asking for payment for the unexpired portion of his employment Contract, he was

eloquently taking issue with the validity of the quitclaim. His actions spoke loudly enough; words were

not necessary.

To determine whether the Release and Quitclaim is valid, one important factor that must be taken into

account is the consideration accepted by respondent; the amount must constitute a 'reasonable

settlement. The NLRC considered the amount of 'US$6,716 or SR23,153 reasonable, when compared

with (1) $3,900, the three-month salary that he would have been entitled to recover if RA 8042 were

applied; and (2) US$9,447, his salaries for the unexpired portion of his Contract.


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It is relevant to point out, however, that respondent was dismissed prior to the effectivity of RA 8042.

As discussed at the outset, he is entitled to his salaries corresponding to the unexpired portion of his

Contract. This amount is exclusive of the SR23,153 that he received based on the November 29, 1994

Final Settlement. The latter amount was comprised of overtime pay, vacation pay, indemnity, contract

reward and notice pay -- items that were due him under his employment Contract. For these reasons,

the consideration stated in the Release and Quitclaim cannot be deemed a reasonable settlement;

hence, that agreement must be set aside.

That respondent is a professional structural engineer did not make him less susceptible to

disadvantageous financial offers, faced as he was with the prospect of unemployment in a country not

his own. 'This Court has allowed supervisory employees to seek payment of benefits and a manager to

sue for illegal dismissal even though, for a consideration, they executed deeds of quitclaims releasing

their employers from liability.[19]

To stress, 'in case of doubt, laws should be interpreted to favor the working class -- whether in the

government or in the private sector -- in order to give flesh and vigor to the pro-poor and pro-labor

provisions of our Constitution.[20]

WHEREFORE, the Petition is DENIEDand the assailed Decision and ResolutionAFFIRMED. Costs

against petitioners.


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G.R. No. 101535 January 22, 1993

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner,vs.THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, SECOND DIVISION,PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, RAUL ABRICO, RODRIGOVASALLO, EDUARDO A. SIBBALUCA, and BENIGNO M. MANASIS, respondents.

Office of the Government Corporate Counsel for petitioner.

Apolinar L. Sevilla for private respondents.

CAMPOS, JR.,J.:

Subject of this petition is the Resolution ** of the National Labor Relations Commission (NLRC)affirming the decision of the Philippine Overseas Employment Administration (POEA) which held hereinpetitioner Philippine National Construction Corporation (PNCC) liable to private respondents RaulAbrico, Rodrigo Vasallo, Eduardo A. Sibbaluca, and Benigno M. Manasis for salary, overtime pay,vacation and sick leave, and completion bonus differentials.

The facts are as follows:

Herein private respondents Raul C. Abrico, Rodrigo Vasallo, Eduardo A. Sibbaluca, and Benigno M.Manasis were deployed by herein petitioner for overseas employment to Iraq as security guardspursuant to individual appointment contracts dated April 15, 1985. These were submitted to the POEAand were validated by the latter on April 22, 1985. The contracts provided for a US$350.00/monthsalary.

However, on May 12, 1985, a second overseas contract was executed by the PNCC which wasaccepted by private respondents. It modified the April 15, 1985 contract by providing for a monthlysalary of US$260.00 for the same position. The contract was for a two-year period. When the periodlapsed, private respondents were repatriated and were extended local employment. However, all ofthem filed their voluntary resignation effective August 31, 1987 so that they could avail of morebenefits under the Retirement Program offered by the PNCC.

On August 17, 1987, private respondents filed a complaint before the POEA for, among others, (a)non-payment of promotional pay increase for Raul C. Abrico and Rodrigo J. Vasallo; (b) underpaymentof salaries, overtime pay, bonuses, night differential pay, sick leave, and vacation leave benefits; (c)assigning Friday overtime guarding duties to non-guards.

In disposing of the complaint, the POEA ruled as follows:

The issues to be resolved in these are:


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1. Whether or not herein complainants are entitled to salary and overtime paydifferentials.

2. Whether or not herein complainants are entitled to vacation leave and sick leavedifferentials, bonus differential and night shift differential.

3. Whether or not complainants Raul Abrico and Rodrigo J. Vasallo are entitled topromotional pay differential.

This Office, after a thorough examination of the allegations as well as the evidence ofthe parties finds the answer of the first issue to be affirmative, affirmative also to thesecond issue as far as vacation and sick leaves (sic) differentials as well as bonusdifferential are concerned and negative as to the rest of the issues.

. . . The only dispute which remains unsolved is whether or not the monthly salary ofherein complainants is US$350.00 a month or US$260.00.

As correctly invoked by complainants paragraph (1) of Article 34 of the Labor Codeprohibits the substitution or alteration of employment contracts approved and verified

by the Department of Labor from the time (of) the actual signing thereof by theparties up to and including the period of expiration of the same without the approvalof the Department of Labor.

With regard to the first issue in this case the approved contract of employment of theherein complainants with the respondent is US$350.00 a month. This can be inferredfrom the POEA approved contract of employment and by the certification issued byrespondent's chief recruiting officer. This being so, herein complainants have the rightto be paid as monthly salaries the aforementioned amount.

Complainants having been granted voluntarily by the respondent a two-hour dailyovertime (Exh. "G", "G-1") during the durations of their contract, are also entitled tobe paid thereto based on the monthly salaries of US$350.00 and not US$260.00.

In connection with the second issues of vacation and sick leaves (sic) differentials aswell as bonus differential, there being no refutation from the respondent of theallegation of the complainants that they were paid the said benefits in accordance withthe monthly rate they were receiving while working in Iraq, that is US$260.00, insteadof US$350.00, their salary rate in their approved employment contract, this Officefinds it proper to award the complainants the difference of the two (2) aforementionedamounts as far as their vacation and sick leaves (sic) benefits as well as completionbonus are concerned. Subparagraph a of paragraph seven of the master employmentcontract of the respondent in its Iraq project during the year 1985 provides a vacationleave of 20 days and sick leave of 10 days or a total of thirty (30) days leave for each

of their employees for twelve (12) months service. The said leaves (sic) benefits arecommutable to cash at the rate of 100% of the employee's salary at the end ofemployees foreign assignment (subpar. c par. 7, respondent's Master EmploymentContract). Respondent's master employment contract also provides for completionbonus of fifteen (15) days for every year of service (par. 15). Respondents having paidthe complainants the said benefits in accordance with the monthly rate they actuallyreceived while working in Iraq, this Office finds it proper for the respondent to pay tocomplainants the difference of the two aforementioned amounts. 1

From the decision of the POEA, the PNCC appealed to the NLRC. It alleged that the POEA erred in

applying Article 34(i) of the Labor Code; and in holding that the notice of employment, dated April 15,1985, providing for a monthly salary of US$350.00 was the actual overseas employment contractinstead of the one dated May 12, 1985 which provided for a salary of US$260.00/month.


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In affirming the POEA decision, the NLRC stated:

. . . suffice it to state that in its aforestated Rejoinder respondent-appellantcorporation admitted as ". . . beyond question . . . that the contracts dated April 15,1985 were amended or modifiedon May 12, 1985" (Rollo 60) the latter sans ". . . theapproval of the Department of Labor . . ." and/or the POEA, thus within the context ofprohibited practices under Art. 34 (i) of the Labor Code, as amended.

As validated by the POEA, the approved employment contracts of complainants-appellees were for US$350.00 a month salary. Ms. Solis certified to the aforesaidsalary as PNCC Recruitment Head (Rollo 25-28); also, as per POEA AccreditationDepartment certification dated 25 June 1987. (Rollo24).

xxx xxx xxx

Relative to the last assignment of error, respondent-appellant corporation insists thatthe POEA('s) basis for the computation of the awarded differentials are erroneous forbeing without evidentiary basis or contrary to the evidence.

It must be noted that complainants-appellees presented its (sic) claims (Annex "M","N", "O", "P"; Rollo122-136, 73-98) for differentials in overtime pay, sick leave andvacation leave benefits and completion bonus, as well as its (sic) Exhibits "G" and "G-1", all of which served as POEA bases for entitlement (Rollo 181, 182) to the severalmoney claims; and the formula bases for the aforestated computation were detailedbesides, in the assailed decision (pages 6, 7; Rollo 179, 180).

The record is bereft however, of evidence of compliance with the aforesaidemployment contracts relative to the aforesaid claims.

Absolutely no evidence appears to have been submitted for respondent-appellantsrelative to satisfaction of the aforementioned claims: whether of payments for anyovertime as authorized and rendered, or availment of leave benefits or its computation(sic) to cash, etc., where the pertinent employment records, particularly

disbursements for services rendered, as well as for fringe benefits usually are for theaccount of the deploying employer. 2

A Motion for Reconsideration of this Resolution having been denied on August 23, 1991, petitionerfiled this petition for certiorarialleging that the public respondents committed grave abuse ofdiscretion amounting to lack or excess of jurisdiction in holding that the notice of employment datedApril 15, 1985 was the actual employment contract and that Article 34 (i) of the Labor Code wasapplicable.

We find no sufficient ground to annul the decision of the NLRC due to a capricious and whimsicalexercise of judgment. The petitioner's claim that the public respondent NLRC gravely abused itsdiscretion in holding that the private respondents were entitled to a monthly salary of US$350.00pursuant to the April 15, 1985 employment contract has not been adequately substantiated. One of

the axioms governing judicial review through certiorariis that the administrative decision mayproperly be annulled or set aside only upon clear showing that the administrative official or tribunalhas acted with grave abuse of discretion. 3

The assailed NLRC decision which affirmed the POEA ruling was based on the exhibits presented bythe parties, among which were the confirmation letters 4 issued to each of t

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