Labstandlaw - Part 8

8/10/2019 Labstandlaw - Part 8

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LABOR CODE] August 27, 2014

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THIRD DIVISION

[G.R. No.151370. December 4, 2002]ASIA PACIFIC CHARTERING (PHILS.) INC., petit ion er, vs. MARIA LINDA R. FAROLAN, respondent .

D E C I S I O N

CARPIO MORALES, J .:

Before this Court is a Petit ion for Review under Rule 45 of the 1997 Rules of Civil Procedure assailing the Court of Appeals 1) June 28, 2001 Decision

[1] which set aside the decision of the National Labor Relations Commission (NLRC

reversing that of the Labor Arbiter, and 2) January 9, 2002[2]

Resolution denying a reconsideration of its decision.

Petitioner Asia Pacific Chartering (Phils) Inc. was, until 1996, the general sales agent (GSA) of the Scandinavian AirlineSystem (SAS), an off-line international airline company with license to do business in the Philippines. As GSA, petitioner soldpassenger and cargo spaces for airlines operated by SAS.

Respondent Maria Linda R. Farolan was on December 16, 1992 hired as Sales Manager of petitioner for its passengerand cargo GSA operations for SAS, following her conformity to a December 10, 1992 letter-offer of employment

[3] from

petitioner through its Vice President/Comptroller Catalino Bondoc. The pertinent portion of the letter-offer reads:

―Dear Ms. Farolan:

Confirming our previous discussions, ASIA-PACIFIC CHARTERING PHIL., INC. is pleased to offer you the position of SalesManager of its Passenger and Cargo Operations for SCANDINAVIAN AIRLINES SYSTEM in the Philippines, commencing onDecember 16, 1992 on the following terms:

Monthly

Basic Pay P 22, 000.00Housing Allowance 4,000.00Transportation Allowance(200 liters of gas) Cash EquivalentMeal Allowance 750.00

Please affix your signature below if you find the foregoing acceptable and return to us a signed duplicate. Meanwhile, wecertainly look forward to your joining us and rest assured of our fullest support.xxx

(Sgd) Maria Linda R. Farolan

Conforme:‖ (Emphasis supplied).

It is gathered that Leslie Murray, the then Sales Manager of petitioner, talked to respondent into accepting the positionafter verbally briefing her on the nature of the position.

Soon after respondent assumed her post, she participated in a number of meetings/seminar s[4]

including a CustomeService Seminar in Bangkok, Thailand, a Regional Sales Meeting on the technical aspects of airline commercial operations inFebruary 1993, and a course on the highly technical airline computer reservations system called ―Amadeus‖, all gearedtowards improving her marketing and sales skills.

In September of 1993, respondent, upon instruction of Bondoc, submitted a repor t[5]

―RE: OUR COMMENTS AND

ACTIONS BEING TAKEN CONCERNING SAS‘ POOR P & L PERFORMANCE FOR JANUARY - JULY 1993‖ the pertinenportions of which read:

“1 January to July 1993 Sales x x x 1993 1992 CHANGE

Seaman 233 423 (190)Expats/Tourists 503 716 (213)PTAs 346 196 150Refugees/IOM 53 864 (811)x x x

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Explanations. 1. International Organization for Migration (IOM)-both Vietnam and Scandinavian Governments have terminated projects forrefugees; hence the tremendous decrease (94%) x x x.

2. Seaman‘s Fares-Rates not competitive enough.

3. Expats/Tourists-In a market where on-line carriers were dropping rates drastically, we were losing passengers to saidcarriers.

1 The present Market:

1. As SAS is off-line, we have no control over space and to an extent our rates are higher because of proration withdelivering carriers.

2. On-lines do not prorate with other carriers therefore can dive fares x x x.

I have convinced Mr. Jespersen to bring down the fares to be more competitive. The reason he did not do so earlier wasbecause low-yield fares are low in priority for confirming seats. But now that SAS is considering increasing their frequenciesex-Hongkong before year-end, this will be advantageous to boosting our sales.

A. Measures to take remainder of 1993 and for 1994:

1. We have negotiated a lower fare for seamen (effective September) which is competitive. We are already getting positiveresponse from agents. Since this(sic) low-yield sales, Hongkong did not adjust fare accordingly first half of 1993 because ofspace constraints.

2. As SAS still prefers high-yield sales, we have offered incentives to Ameco as Asian Development Bank (ADB) (effective1

st June for one year ) with Mr. Jespersen‘s approval x x x.

In addition, ADB itself is willing to consider proposals we submit to them in the case of cost-savings. In exchange, they canendorse to SAS a relevant share of their Europe travel x x x.

3. We have also negotiated a lower net fare for Economy Class. This rate is also competitive and is in force.

4. Incentive Program for Agents-Using the points system similar to PAL‘s promo (PALs Smiles), to stimulate sales. We are atpresent fine-tuning mechanics for Hongkong‘s approval which we intend to launch before Christmas. This promo is self-sustaining (no significant expenses to be incurred)

5. We are currently pushing sales for Baltic area/Russia as we have the best rates. We have identified the agents who havepassengers to these destinations and we are focusing on them x x x.‖ (Emphasis and underscoring supplied).

As reflected in respondent‘s report, there was a drop in SAS‘ sales revenues which to her was attributable to marketforces beyond her control.

Noting the marked decline in SAS‘ sales revenues, petitioner directed its high ranking officer Roberto Zozobrado inJanuary 1994 to conduct an investigation on the matter and identify the problem/s and implement possible solutions.

Zozobrado thus informally took over some of respondent‘s marketing and sales responsibilities, albeit respondenretained her title as Sales Manager and continued to receive her salary as such.

By petitioner‘s claim, Zozobrado found out that respondent did not adopt any sales strategy nor conduct any salesmeeting or develop other sources of revenue for SAS, she having simply let her sales staff perform their functions all bythemselves; in 1994, Soren Jespersen, General Manager of SAS in Hongkong, Southern China, Taipei and the Philippinescame to the Philippines to assess the statistics on SAS‘ sales revenues and SAS was convinced that respond ent was not fifor the job of Sales Manager; and in view of the changes introduced by Zozobrado, SAS-GSA sales operations drew positiveresults.

On May 21, 1994, respondent received a message[6]

from Jespersen reading:








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―Dear Linda and Bob [Zozobrado],

First of all congratulation to your sale result in April. You reached and exceeded the target by 50% In C/class (Fantastic!!!)and 1% In M/class. This is the second month in a row (and the last 2 first in more than a year) and hopefully the beginning ofa new and positive trend.

x x x

As you can see May looks very good.

With the agreed focus on selling the M/class and all the activities initiated, I‘m sure that the rest of the period will pick verysoon.

x x x‖ (Underscoring supplied; Quoted verbatim).

On July 18, 1994,[7]

respondent received another message from Jespersen reading:

―Dear Linda,

The sales report for June 1994 did unfortunately not reach target in C/class but in M/class you managed very well. Totally 9%

below target.

The pre bookings eff. 14 July looks very good and encouraging and with 2 weeks to go July should not be aproblem. (enclosed)

Please send my regards to all the girls and tell them to keep up the good work.

Just for reason of clarification. Enclosed to your action list is a production report for Jan-May 1994. The figures I send to youis only your long-haul sales and do not include European sectors. The correct figure for the period will be 436,000 USD intarget for long-haul (actual 362 TUSD) and 642 TUSD total with 514 TUSD achieved.

Please be so kind and inform Bob accordingly.

x x x

On even date, however, petitioner sent respondent a letter of termination[8]

on the ground of ―loss of confidence.‖ Theletter reads:

―This confirms our (‗Bob‘ Zozobrado and myself) July 4, 1994 verbal advice to you regarding Management‘s decision toterminate your Services as our GSA Manager for SCANDINAVIAN AIRLINES SYSTEM‘s Offline Operations in the Philippines,thirty (30) days upon receipt of this Notice, due to our loss of confidence in your Managerial and Marketing capabilities. Asexplained to you by Mr. Zozobrado and myself, records will show that under your Management (or lack of it), our SAS-GSAperformance is, as follows:

A. 1993 vs. 1992Gross Revenue - 29 % shortfallOperating Expenses - 2% over

Net Cash Flow - 79% shortfallB. JAN-APR ‟94 vs. JAN-APR „92 Revenues - 34% shortfallOperating Expenses - 6% overNet Cash Flow - 94% shortfall

Several times in the past, we have made you aware in the need to improve your sales performance and gain the respect ofyour staff which have openly expressed their concern on their lack of direction under your management. Even our principal(SAS) had negative comments about the way you handle urgent requirements of the Regional Office. SAS was also alarmedby the aforementioned dismal overall Performance of APC/SAS. All these prompted us to decide to replace you as our SASGSA Manager to save the situation and our representation of the SAS-GSA in the Philippines.x x x‖ (Quoted verbatim; Emphasis supplies).












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Thus spawned the filing by respondent of a complaint for illegal dismissal against petitioner, Bondoc, Zozobrado and oneDonald Marshall (the record indicates that he had ceased to be connected with petitioner when the case was pending beforethe Labor Arbiter), with prayer for damages and attorney‘s fees. In her complaint petitioner alleged that Bondoc andZozobrado had asked her to tender her resignation as she was not the person whom SAS was looking for to handle theposition of Sales Manager

[9] but that she refused, hence, she was terminated by the letter of July 18, 1994 letter .

[10]

The Labor Arbiter, after a detailed analysis of the evidence for both parties, found for respondent upon the followingissues:

1. Whether or not complainant was validly terminated for cause;

2. Whether or not due process was observed when complainant was terminated; and

3. Whether or not any of the parties are entitled to damages,

and disposed in his decision[11]

as follows:

―WHEREFORE, finding the dismissal of the complainant Ms Linda Farolan to be without just cause, effected with malice, ill wiland bad faith, respondent Asian Pacific Chartering Philippine, Inc. is hereby ordered to pay her separation pay of Forty FourThousand Pesos (P44,000.00), and all the benefit that would have been due her under the premises. Asian Pacific Charteringis likewise ordered to pay complainant moral damages in the amount of One Million Five Hundred Thousand Pesos(P1,500,000.00) and exemplary damages in the amount of Seven Hundred Fifty Thousand Pesos (P750,000.00), nominaldamages of Five Thousand Pesos (P5,000.00) and the equivalent of 25% of the total award as attorney‘s fees.‖

On appeal, the NLRC, by Decision of March 22, 1999,[12] reversed the Labor Arbiter‘s decision, it recognizing the right ofpetitioner as employer to terminate or dismiss employees based on loss of trust and confidence, the right being a managemenprerogative.

Respondent‘s Motion for Reconsideration of the NLRC Decision having been denied, she brought her case to the Courtof Appeals via Certiorari.

[13]

By Decision of June 28, 2001,[14]

the Court of Appeals, as stated early on, reversed the NLRC decision and disposed asfollows:

―WHEREFORE, premises considered, the challenged decision dated March 22, 1999 and the Resolution dated July 16, 1999of public respondent National Labor Relations Commission (Second Division) are hereby set aside for having been issued withgrave abuse of discretion amounting to lack or in excess of jurisdiction. The decision dated September 17, 1998 of Labor

Arbiter Romulus S. Protacio is hereby upheld with modifications that the award of attorney‘s fees shall only be equivalent toten percent (10%) of the total monetary award. In addition, the award for nominal damages is deleted for lack of

basis.‖ (Underscoring supplied).

Petitioner filed a motion for reconsideration[15]

of the Court of Appeals decision but it was denied, hence, the present Petitionfor Review on Certiorar i

[16] anchored on the following grounds:

“I

THE CA DEFIED THE WELL-ESTABLISHED RULE THAT APC, AS EMPLOYER, HAS THE MANAGEMENT PREROGATIVETO REPLACE A SALES MANAGER WHOM IT HAS REASONABLE GROUNDS TO BELIEVE CANNOT EFFECTIVELYDISCHARGE THE DUTIES DEMANDED BY SUCH POSITION.

II

THE CA DECISION WAS PREMISED ON LACK OF EVIDENCE TO DISPROVE RESPONDENT‘S THEORY THAT THEPOOR SALES PERFORMANCE OF SAS WAS DUE TO MARKET FORCES BEYOND HER CONTROL. YET, THE

EVIDENCE ON RECORD SHOWED THE CONTRARY. NO LESS THAN SAS CONFIRMED THAT RESPONDENT WASNOT FIT FOR THE POSITION OF MANAGER AND, THAT NO SPECIAL CIRCUMSTANCES SUFFICIENT TO TRIGGERTHE SHARP DECLINE IN SALES SUPERVENED IN THE PHILIPPINE MARKET.

III

IN AWARDING MORAL AND EXEMPLARY DAMAGES, THE CA ACTED WITH GRAVE ABUSE OF DISCRETION. EVEN ASSUMING, THAT RESPONDENT‘S TERMINATION WAS ‗WITHOUT JUST CAUSE‘, APC IS NOT LIABLE TO PAYDAMAGES [MILLARES vs. NLRC, 328 SCRA 79 (2001)] COROLLARILY, APC IS PRESUMED TO HAVE ACTED IN GOODFAITH [GONZALES vs. NLRC, G.R. NO. 131653-26 March 2001]. THE CA, HOWEVER, REVERSED THE PRESUMPTION.



































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IT PRESUMED-WITHOUT ANY EVIDENCE WHATSOEVER-THAT APC ACTED IN BAD FAITH IN TERMINATINGRESPONDENT ‗WITHOUT DUE REGARD TO THE HARSH CONSEQUENCES‘ OF THE TERMINATION

The issue in the main is whether or not respondent‘s dismissal was legal.

A statement of the requisites for a valid dismissal of an employee is thus in order, to wit: (a) the employee must beafforded due process, i.e., he must be given opportunity to be heard and to defend himself; and (b) dismissal must be for a

valid cause as provided in Article 282 of the Labor Code or any of the authorized causes under Article 283 and 284 of thesame Code.

[17]

As regards the first requisite, the following substantiated findings of the Labor Arbiter, which were adopted by the Courtof Appeals, reflect respondent‘s deprivation of due process:

―x x x

[W]e find that the manner by which complainant was dismissed violated the basic precepts of fairness and due process. First,without any semblance of, or written authority whatsoever (TSN dated January 30, 1996, pp. 46 - 48), respondent Zozobradotook over the functions of complainant. Complainant claims that she has been told it was upon the will of respondent Marshallthat she be replaced. Although respondent Zozobrado may have been merely giving pointers and suggestions to the staff ofcomplainant, the appearance of authority was unpleasantly conspicuous. Later, respondent Bondoc summoned complainantand told her to tender her resignation or face termination. Complainant, not having been given a justifiable ground,refused to resign. Thereafter, she was finally terminated, without being afforded the opportunity to be heard and to

present evidence in her defense. She was never given a written notice stating the particular acts or omissionconstituting the grounds for her dismissal as required by law . x x x‖[18]

As regards the second requisite, the rule is settled that in termination cases, the employer bears the onus of proving thathe dismissal is for just cause failing which the dismissal is not justified and the employee is entitled to reinstatement.

[19]

Petitioner claims that respondent failed to live up to management‘s expectation in light of her failure to adopt sales andmarketing strategies to increase sales revenues of SAS, which failure is reflective of her incompetence and inefficiency, thusresulting to loss of revenues in 1993 and 1994.

Petitioner adds that had it not been through Zozobrado‘s efforts, SAS sales revenues could not have recovered.

Petitioner further claims that Jespersen was the one who initiated the termination of respondent because of her ―dismalperformance‖ in handling its operations.

And petitioner reiterates the principle that the right to dismiss a managerial employee is a measure of self-preservation,

citing the cases of Grand Motor Parts Corp. v. Minister of Labor et al .,[20] and Buiser et al. v. Legardo.[21]

Before passing on petitioner‘s position, this Court deems it imperative to discuss the nature of respondent‘s job as salesmanager of petitioner. It is not disputed that her job description, and the terms and conditions of her employment, with theexception of her salary and allowances, were never reduced to writing.

Recent decisions of this Court distinguish the treatment of managerial employees from that of rank and file personneinsofar as the application of the doctrine of loss of trust and confidence is concerned.

[22]

―Thus with respect to rank and file personnel, loss of trust and confidence as ground for valid dismissal requires proof ofinvolvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer willnot be sufficient. But as regards a managerial employee, mere existence of a basis for believing that such employee hasbreached the trust of his employer would suffice for his dismissal.‖ (Underscoring supplied)

As enunciated in Samson v. NLRC , 330 SCRA 460,

―Before one may be properly considered a managerial employee, all the following conditions must be met:

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department orsubdivision thereof;

(2) They customarily and regularly direct the work of two or more employees therein;




























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(3) They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to thehiring and firing and as to the promotion or any other change of status of other employees are given particularweight. (Section 2(b), Rule I, Book III of the Omnibus Rules Implementing the Labor Code, emphasis supplied).

By respondent‘s claim, her function, as verbally explained to her by Murray, dealt mainly with servicing of existingclientele.

[23] Bondoc, however, described respondent‘s functions and duties as critical.

[24]

The following ruling of this Court in Paper Industries Corp. of the Philippines v. Laguesma

[25]

is instructive:

―Managerial employees are ranked as Top Managers, Middle Managers and First Line Managers. The mere fact that anemployee is designated ―manager‖ does not ipso facto make him one-designation should be reconciled with the actual jobdescription of the employee for it is the job description that determines the nature of employment.‖

24 (Underscoring supplied).

The absence of a written job description or prescribed work standards, however, leaves this Court in the dark.

Even assuming, however, that respondent was a managerial employee, the stated ground (in the letter of termination) foher dismissal, ―loss of confidence,‖ should have a basis and determination thereof cannot be left entirely to the employer.

Loss of trust and confidence to be a valid ground for an employee‘s dismissal must be based on a willful breach andfounded on clearly established facts.

[26] A breach is willful if it is done intentionally, knowingly and purposely

without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.[27]

Respondent‘s detailed REPORT dated September 8, 1993, quoted above, relative to SAS profit and loss for 1993, which

was closely examined and analyzed by the Labor Arbiter, contains an explanation of what brought about the decline in salesrevenues. And it contains too a number of recommended measures on improvement of sales for the remainder of 1993 and for1994.

As did the Labor Arbiter and the Court of Appeals, this Court finds respondent‘s explanation in her Report behind thedecline in sales revenues as due to market forces beyond respondent‘s control plausible. In any event, there is no showingthat the decline is reflective of any willfull breach of duties by respondent.

The two letters sent by SAS to respondent in 1994 in fact negate willful breach of her duties by respondent. The firs(received on May 21, 1994) congratulated her and Zozobrado for exceeding ―sale (sic) result in April‖ 1994. Petitioner‘sargument that respondent could not invoke these letters in her favor as they were intended for Zozobrado fails. The letterswere addressed to respondent and Zozobrado. The second letter (received on July 18, 1994) which was addressed torespondent, while noting that the sales for June 1994 did not reach the target in ―C/class‖, noted that in ―M/class‖ she―managed very well‖. And it went on to state that ―[t]he pre-bookings eff. 14 July looks (sic) very good and encouraging andwith 2 weeks to go July should not be a problem.‖ In fact it requested respondent to ―send . . . regards to all the girls and te

them to keep up the good work.‖

While petitioner attributes the improvement of sales in 1994 to Zozobrado, the fact remains that respondent was still theSales Manager up to July 1994, in charge of those ―sales meetings‖ during which pertinent market strategies were developedand utilized to increase sales.

In another vein, petitioner attributes loss of confidence to respondent‘s alleged ―gross inefficiency and incompetence,‖ itciting, as earlier stated, the cases of Grand Motor Parts Corp. (supra) and Buiser et al. (supra).

The Grand Motors case, however, involved a probationary employee-manager who failed to, among other thingssubmit required monthly reports and violated company policy, clearly mirroring his insubordination and disrespect to expressinstructions of management.

While this Court, in the Buiser case (supra), held that ―[f]ailure to observe prescribed standards of work, or to fulfireasonable work assignments due to inefficiency‖ may be just cause for dismissal, petitioner has neither shown whatstandards of work or reasonable work assignments were prescribed which respondent failed to observe nor that if she did fa

to observe any such, it was due to inefficiency.

Finally and at all events, given respondent‘s previous work experience as herein below indicated, to wit:

“Period Company Position1960-1967 Express Tours, Inc. Clerk-Reservations &Ticketing1968-1970 House of Travel, Inc. Sales Manager1971-1973 Super Travel Manager, Administration1973-1978 American Express, Manager, World Health Inc. Organization Account1978-1983 F.A.R. Travel President & General Manager Masters, Inc.1983-1984 Cebu Plaza Director, Convention1985-1989 American Express, Manager-World Health

Inc. Organization In-Plant Office







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Senior Manager-AsianDevelopment Bank In-Plant Office

1992-1994 Asia Pacific Sales Manager, PassengerChartering Phil. Inc. & Cargo GSA Operations,

Scandinavian AirlinesSystem.”

(Exhibit “A”, p. 72, Court of Appeals Rollo ),

this Court is not prepared to find for petitioner. It bears noting that there is no showing that respondent represented herself as

possessed of the highest degree of skill and care known in the trade. And it is not disputed that respondentwas approached by petitioner‘s then Sales Manager Murray, and offered the position of Sales Manager. She thus could no

just be unceremoniously discharged for ―loss of confidence‖ arising from alleged incompetency[28]

. ―While an employee may be dismissed because of inefficiency, neglect or carelessness, the law implies a situationor undertaking by an employee in entering into a contract of employment that he is competent to perform the work undertakenand is possessed of the requisite skill and knowledge to enable him to do so, and that he will do the work of the employer in acareful manner. If he is not qualified to do the work which he undertakes, if he is incompetent, unskillful or inefficient, or if heexecutes his work in a negligent manner or is otherwise guilty of neglect of duty, he may lawfully be discharged before theexpiration of his term of employment.‖

[29]

In fine, this Court finds that respondent had been illegally dismissed and is accordingly entitled to reinstatement to herformer position without loss of seniority rights and payment of backwages.

[30] But as the matter of reinstatement is no longer

feasible as the GSA contract between SAS and petitioner had been terminated in May of 1996, respondent is, as correctlyheld by the Court of Appeals, entitled to separation pay in an amount equivalent to one (1) month salary for every year of

service, a fraction of six (6) months to be considered a year.

Having been hired on December 16, 1992 and terminated on July 18, 1994, respondent is considered to have worked fotwo (2) years for purposes of computing her separation pay.

Respondent is also entitled to the award of backwages computed from July 18, 1994 up to May of 1996.

As regards the award to respondent of moral and exemplary damages, petitioner assails it in this wise: ―The award odamages in so far as the same was based solely on respondent‘s affidavit containing general and uncorroborated statementthat she suffered damages as a result of her termination is null and void [it being] insufficient to overcome the presumption ogood faith.‖

The following pertinent portions of petitioner‘s Affidavit which Affidavit was submitted as part of her testimony are self explanatory, however.

―x x x

8. On July 4, 1994, Messrs. Bondoc and Zozobrado summoned me and without any clear explanation, ordered meto submit a letter of resignation; they informed me that I was not the person whom SAS was looking for tohandle the position of Sales Manager; even as I was deeply hurt, shocked, and humiliated, I declined to resignfrom my position as I strongly believed that the instruction for me to resign was unjust and violative of myrights; during the conference, I was never given the chance to know precisely why I was being asked to resignor to explain my position; furthermore, I was informed then that Mr. Donald Marshall was the one who decidedand insisted on my termination.

9. On July 18, 1994, again without regard to the basic requirements of due process, I was given a notice oftermination signed by Mr. Bondoc; the supposed ground for my termination was APC‘s alleged ‗loss ofconfidence in my managerial and marketing capabilities due to the company‘s alleged dismal performance duringmy term of office as GSA Sales Manager‘; once more, I was never called to answer this charge; a copy of thenotice of termination is hereto attached as Annex ‗E‘;

10. The news of my termination circulated at once in the travel industry and as a result, I was and still am frequentlyasked by my friends and acquaintances in the industry about my termination from APC to my endless humiliationand embarrassment; this up to now causes me endless emotional pain that I even avoid my friends andacquaintances for fear that they might look at me differently after my termination from APC; my reputation as aprofessional has been totally shattered by the unjust act of APC;

11. Because of the extreme social humiliation, and serious anxiety over my now besmirched reputation in the t ravelindustry, I decided to seek legal advise; on July 21, 1994, my counsel wrote APC demanding for my immediate
















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reinstatement without loss of seniority rights and for damages; a copy of the letter-demand is hereto attached as Annex ‗F‘;

x x x‖.

They need no amplification and/or corroboration. Indeed, petitioner was deprived of due process and denied ―basicprecepts of fairness‖ when she was terminated. Her resultant sufferings thus entitle her to an award of moral damages.

To warrant award of moral damages, it must be shown that the dismissal of the employee was attended to by bad faith, orconstituted an act opposite to labor, or was done in a manner contrary to morals, good customs or public policy.

[31]

Award of moral and exemplary damages for an illegally dismissed employee is proper where the employee had been harassedand arbitrarily terminated by the employer .

32

In determining the amount of moral damages recoverable, however, the business, social and financial position of theoffended party and the business or financial position of the offender are taken into account .

33 Given petitioner‘s business

position or standing before and at the time of termination and petitioner‘s business and financial position, this Court reducesthe amount of moral damages awarded to P500,000.00 which it finds reasonable. The amount of exemplary damagesawarded is accordingly reduced too to P250,000.00.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the MODIFICATION that the amount o

moral damages and exemplary damages awarded to respondent, Ma. Linda R. Farolan, is hereby reduced to Five HundredThousand (P500,000.00) Pesos and Two Hundred Fifty Thousand (P250,000.00) Pesos, respectively.

Costs against petitioner.

SO ORDERED.

Panganiban, (Acting Chairman), Sandoval-Gutierrez and Corona, JJ., concur. Puno, (Chairman), J., on official leave.

[1] Rollo, p. 43 – 53.

[2] Rollo, p. 53.

[3] Record, p. 896.

[4] Affidavit of Ms. Farolan, Record, p. 892, par. 4.

[5] Records, pp. 78 – 79.

[6] Record, p. 88.

[7] Record, p. 81.[8]

Record, p. 898.[9]

Record, p. 51.[10]

See footnote 8.[11]

Decision of Labor Arbiter Romulus S. Protacio dated September 17, 1998, Rollo, pp. 112 – 137.[12]

Record, pp. 26 – 45.[13]

Record, p. 46.[14]

vide footnote 11.[15]

Record, pp. 205 – 225.[16]

Rollo, pp. 12 -42.[17]

Permex, Inc. v. NLRC , 323 SCRA 121 (2000).[18]

Decision of the Labor Arbiter, Rollo, pp. 133 – 134.[19]

Polymedic General Hospital v. NLRC , 134 SCRA 420 (1985), cited in Mabeza v. NLRC , 271 SCRA 670 (1997).[20]

130 SCRA 436 (1984).[21]

131 SCRA 157 (1984).[22]

Caoile v. NLRC , 299 SCRA 76 .[23]

TSN, July 12, 1995, p. 42, Records, p. 375.[24]

TSN, January 16, 1997, p. 34, Records, p. 808.[25]

330 SCRA 295 (2000).[26] Surigao del Norte Electric Cooperative v . NLRC, 309 SCRA 233 (1999) cited in National Bookstore, Inc. and Alfredo Ramos v . CA, et al. G. R. No. 146741, February 27, 2002.[27]

Ibid. [28]

35 Am Jur. 376.[29]

35 Am Jur. 376.[30]

De Guzman v . NLRC, 312 SCRA 266 (1999) cited in National Bookstore, Inc. and Alfredo Ramos v . CA, et al., G. R. No. 146741, February 27, 2002.[31]

Nueva Ecija I Electric Cooperative, Inc. v . NLRC, 323 SCRA 86, 98 (2000).32

Cruz v . NLRC, 324 SCRA 770 (2000).33

Nueva Ecija I Electric Cooperative, Inc. v . NLRC, supra, p. 99.










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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 162813 February 12, 2007

FAR EAST AGRICULTURAL SUPPLY, INC. and/orALEXANDER UY, Petitioners,vs.JIMMY LEBATIQUE and THE HONORABLE COURT OFAPPEALS, Respondents.

D E C I S I O N

QUISUMBING, J .:

Before us is a petition for review on certiorari assailing theDecision

1 dated September 30, 2003 of the Court of Appeals

in CA-G.R. SP No. 76196 and its Resolution2 dated March 15,2004 denying the motion for reconsideration. The appellatecourt had reversed the Decision

3 dated October 15, 2002 of

the National Labor Relations Commission (NLRC) settingaside the Decision

4 dated June 27, 2001 of the Labor Arbiter.

Petitioner Far East Agricultural Supply, Inc. (Far East) hiredon March 4, 1996 private respondent Jimmy Lebatique astruck driver with a daily wage of P223.50. He delivered animalfeeds to the company‘s clients.

On January 24, 2000, Lebatique complained of nonpaymentof overtime work particularly on January 22, 2000, when hewas required to make a second delivery in Novaliches,

Quezon City. That same day, Manuel Uy, brother of FarEast‘s General Manager and petitioner Alexander Uy,suspended Lebatique apparently for illegal use of companyvehicle. Even so, Lebatique reported for work the next day buthe was prohibited from entering the company premises.

On January 26, 2000, Lebatique sought the assistance of theDepartment of Labor and Employment (DOLE) Public

Assistance and Complaints Unit concerning the nonpaymentof his overtime pay. According to Lebatique, two days later,he received a telegram from petitioners requiring him to reportfor work. When he did the next day, January 29, 2000,

Alexander asked him why he was claiming overtime pay.Lebatique explained that he had never been paid for overtime

work since he started working for the company. He also told Alexander that Manuel had fired him. After talking to Manuel, Alexander terminated Lebatique and told him to look foranother job.

On March 20, 2000, Lebatique filed a complaint for illegaldismissal and nonpayment of overtime pay. The Labor Arbiterfound that Lebatique was illegally dismissed, and ordered hisreinstatement and the payment of his full back wages, 13thmonth pay, service incentive leave pay, and overtime pay.

The dispositive portion of the decision is quoted herein in full,as follows:

WHEREFORE, we find the termination of complainant illegalHe should thus be ordered reinstated with full backwages. Heis likewise ordered paid his 13th month pay, service incentiveleave pay and overtime pay as computed by the Computation

and Examination Unit as follows:

a) Backwages:01/25/00 - 10/31/00 = 9.23 mos.P 223.50 x 26 x 9.23 = P 53,635.5311/01/00 – 06/26/01 = 7.86 mos.P 250.00 x 26 x 7.86= 51,090.00 P 104,725.5313th Month Pay: 1/12 of P 104,725.53 =8,727.13Service Incentive Leave Pay01/25/00 – 10/31/00 = 9.23 mos.P 223.50 x 5/12 x 9.23 = P 859.5411/01/00 – 06/26/01 = 7.86 mos.

P 250.00 x 5/12 x 7.86 = [818.75] 1,678.29115,130.95b) Overtime Pay: (3 hours/day)

03/20/97 – 4/30/97 = 1.36 mos.P 180/8 x 1.25 x 3 x 26 x 1.36 = P 2,983.5005/01/97 – 02/05/98 = 9.16 mos.P 185/8 x 1.25 x 3 x 26 x 9.16 = 20,652.9402/06/98 – 10/30/99 = 20.83 mos.P 198/8 x 1.25 x 3 x 26 x [20.83] =50,265.3910/31/99 – 01/24/00 = 2.80 mos.P 223.50/8 x 1.25 x 3 x 26 x 2.80= 7,626.94 81,528.77

TOTAL AWARD P 196,659.72

SO ORDERED.5

On appeal, the NLRC reversed the Labor Arbiter anddismissed the complaint for lack of merit. The NLRC held thathere was no dismissal to speak of since Lebatique wasmerely suspended. Further, it found that Lebatique was a fieldpersonnel, hence, not entitled to overtime pay and serviceincentive leave pay. Lebatique sought reconsideration buwas denied.

Aggrieved, Lebatique filed a petition for certiorari with theCourt of Appeals.1awphi1.net

The Court of Appeals, in reversing the NLRC decision

reasoned that Lebatique was suspended on January 24, 2000but was illegally dismissed on January 29, 2000 when

Alexander told him to look for another job. It also found thaLebatique was not a field personnel and therefore entitled topayment of overtime pay, service incentive leave pay, and13th month pay.

It reinstated the decision of the Labor Arbiter as follows:

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WHEREFORE, premises considered, the decision of theNLRC dated 27 December 2002 is hereby REVERSED andthe Labor Arbiter‘s decision dated 27 June2001 REINSTATED.

SO ORDERED.6

Petitioners moved for reconsideration but it was denied.

Hence, the instant petition wherein petitioners assign thefollowing errors:

THE COURT OF APPEALS … ERRED IN REVERSING THEDECISION OF THE NATIONAL LABOR RELATIONSCOMMISSION DATED 15 OCTOBER 2002 AND IN RULINGTHAT THE PRIVATE RESPONDENT WAS ILLEGALLYDISMISSED.

THE COURT OF APPEALS … ERRED IN REVERSING THEDECISION OF THE NATIONAL LABOR RELATIONS

COMMISSION DATED 15 OCTOBER 2002 AND IN RULINGTHAT PRIVATE RESPONDENT IS NOT A FIELDPERSONNEL AND THER[E]FORE ENTITLED TOOVERTIME PAY AND SERVICE INCENTIVE LEAVE PAY.

THE COURT OF APPEALS … ERRED IN NOT DISMISSINGTHE PETITION FOR CERTIORARI FOR FAILURE OFPRIVATE RESPONDENT TO ATTACH CERTIFIED TRUECOPIES OF THE QUESTIONED DECISION ANDRESOLUTION OF THE PUBLIC RESPONDENT.

7

Simply stated, the principal issues in this case are: (1)whether Lebatique was illegally dismissed; and (2) whetherLebatique was a field personnel, not entitled to overtime pay.

Petitioners contend that, (1) Lebatique was not dismissedfrom service but merely suspended for a day due to violationof company rules; (2) Lebatique was not barred from enteringthe company premises since he never reported back to work;and (3) Lebatique is estopped from claiming that he wasillegally dismissed since his complaint before the DOLE wasonly on the nonpayment of his overtime pay.

Also, petitioners maintain that Lebatique, as a driver, is notentitled to overtime pay since he is a field personnel whosetime outside the company premises cannot be determinedwith reasonable certainty. According to petitioners, the driversdo not observe regular working hours unlike the other office

employees. The drivers may report early in the morning tomake their deliveries or in the afternoon, depending on theproduction of animal feeds and the traffic conditions.Petitioners also aver that Lebatique worked for less than eighthours a day.

8

Lebatique for his part insists that he was illegally dismissedand was not merely suspended. He argues that he neitherrefused to work nor abandoned his job. He further contendsthat abandonment of work is inconsistent with the filing of acomplaint for illegal dismissal. He also claims that he is not a

field personnel, thus, he is entitled to overtime pay andservice incentive leave pay.

After consideration of the submission of the parties, we findthat the petition lacks merit. We are in agreement with thedecision of the Court of Appeals sustaining that of the Labo

Arbiter.

It is well settled that in cases of illegal dismissal, the burden ison the employer to prove that the termination was for a validcause.

9 In this case, petitioners failed to discharge such

burden. Petitioners aver that Lebatique was merelysuspended for one day but he abandoned his work thereafterTo constitute abandonment as a just cause for dismissalthere must be: (a) absence without justifiable reason; and (ba clear intention, as manifested by some overt act, to severthe employer-employee relationship.

10

The records show that petitioners failed to prove thaLebatique abandoned his job. Nor was there a showing of aclear intention on the part of Lebatique to sever the employer

employee relationship. When Lebatique was verbally told by Alexander Uy, the company‘s General Manager, to look foanother job, Lebatique was in effect dismissed. Evenassuming earlier he was merely suspended for illegal use ocompany vehicle, the records do not show that he wasafforded the opportunity to explain his side. It is clear alsofrom the sequence of the events leading to Lebatique‘sdismissal that it was Lebatique‘s complaint for nonpayment ohis overtime pay that provoked the management to dismisshim, on the erroneous premise that a truck driver is a fieldpersonnel not entitled to overtime pay.

An employee who takes steps to protest his layoff cannot byany stretch of imagination be said to have abandoned his

work and the filing of the complaint is proof enough of hisdesire to return to work, thus negating any suggestion ofabandonment.

11 A contrary notion would not only be illogica

but also absurd.

It is immaterial that Lebatique had filed a complaint fornonpayment of overtime pay the day he was suspended bymanagement‘s unilateral act. What matters is that he filed thecomplaint for illegal dismissal on March 20, 2000, after hewas told not to report for work, and his filing was well withinthe prescriptive period allowed under the law.

On the second issue, Article 82 of the Labor Code is decisiveon the question of who are referred to by the term "field

personnel." It provides, as follows:

ART. 82. Coverage . - The provisions of this title [Working

Conditions and Rest Periods] shall apply to employees in alestablishments and undertakings whether for profit or not, bunot to government employees, managerial employees, fieldpersonnel, members of the family of the employer who aredependent on him for support, domestic helpers, persons inthe personal service of another, and workers who are paid byresults as determined by the Secretary of Labor in appropriateregulations.




























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x x x x

"Field personnel" shall refer to non-agricultural employeeswho regularly perform their duties away from the principalplace of business or branch office of the employer and whoseactual hours of work in the field cannot be determined withreasonable certainty.

In Auto Bus Transport Systems, Inc. v. Bautista,12

this Courtemphasized that the definition of a "field personnel" is notmerely concerned with the location where the employeeregularly performs his duties but also with the fact that theemployee‘s performance is unsupervised by the employer.We held that field personnel are those who regularly performtheir duties away from the principal place of business of theemployer and whose actual hours of work in the field cannotbe determined with reasonable certainty. Thus, in order todetermine whether an employee is a field employee, it is alsonecessary to ascertain if actual hours of work in the field canbe determined with reasonable certainty by the employer. Inso doing, an inquiry must be made as to whether or not the

employee‘s time and performance are constantly supervisedby the employer .13

As correctly found by the Court of Appeals, Lebatique is not afield personnel as defined above for the following reasons: (1)company drivers, including Lebatique, are directed to deliverthe goods at a specified time and place; (2) they are not giventhe discretion to solicit, select and contact prospective clients;and (3) Far East issued a directive that company driversshould stay at the client‘s premises during truck-ban hourswhich is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.

14 Even

petitioners admit that the drivers can report early in themorning, to make their deliveries, or in the afternoon,depending on the production of animal feeds.

15 Drivers, like

Lebatique, are under the control and supervision of

management officers. Lebatique, therefore, is a regularemployee whose tasks are usually necessary and desirable tothe usual trade and business of the company. Thus, he isentitled to the benefits accorded to regular employees of FarEast, including overtime pay and service incentive leave pay.

Note that all money claims arising from an employer-employee relationship shall be filed within three years fromthe time the cause of action accrued; otherwise, they shall beforever barred.

16 Further, if it is established that the benefits

being claimed have been withheld from the employee for aperiod longer than three years, the amount pertaining to theperiod beyond the three-year prescriptive period is thereforebarred by prescription. The amount that can only be

demanded by the aggrieved employee shall be limited to theamount of the benefits withheld within three years before thefiling of the complaint.

17

Lebatique timely filed his claim for service incentive leavepay, considering that in this situation, the prescriptive periodcommences at the time he was terminated.

18 On the other

hand, his claim regarding nonpayment of overtime pay sincehe was hired in March 1996 is a different matter. In the caseof overtime pay, he can only demand for the overtime pay

withheld for the period within three years preceding the filingof the complaint on March 20, 2000. However, we findinsufficient the selected time records presented by petitionersto compute properly his overtime pay. The Labor Arbiteshould have required petitioners to present the daily timerecords, payroll, or other documents in management‘s controto determine the correct overtime pay due Lebatique.

WHEREFORE, the petition is DENIED for lack of merit. TheDecision dated September 30, 2003 of the Court of Appealsin CA-G.R. SP No. 76196 and its Resolution dated March 152004 are AFFIRMED with MODIFICATIONto the effect thathe case is hereby REMANDED to the Labor Arbiter fo

further proceedings to determine the exact amount oovertime pay and other monetary benefits due JimmyLebatique which herein petitioners should pay without furthedelay.

Costs against petitioners.

SO ORDERED.

LEONARDO A. QUISUMBING Associate JusticeWE CONCUR:

ANTONIO T. CARPIO Associate Justice

CONCHITA CARPIO MORALES Associate Justice

DANTE O. TINGA Asscociate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

A T T E S T A T I O N I attest that the conclusions in the above Decision had been reached inconsultation before the case was assigned to the writer of the opinion of theCourt‘s Division. LEONARDO A. QUISUMBING Associate JusticeChairperson

C E R T I F I C A T I O N Pursuant to Section 13, Article VIII of the Constitution, and the DivisionChairperson‘s Attestation, I certify that the conclusions in the above Decision

had been reached in consultation before the case was assigned to the writer ofthe opinion of the Court‘s Division. REYNATO S. PUNO Chief Justice

Footnotes 1 Rollo, pp. 34-44. Penned by Associate Justice Buenaventura J.

Guerrero with Associate Justices Andres B. Reyes, Jr. andRegalado E. Maambong concurring.2 Id. at 62.

3 Id. at 194-203.

4 Id. at 167-174.

5 Id. at 173-174.

6 Id. at 44.

7 Id. at 17.

8 Id. at 375.

9 Micro Sales Operation Network v. National Labor Relations

Commission, G.R. No. 155279, October 11, 2005, 472 SCRA 328,337.10 Id. at 336.11

Veterans Security Agency, Inc. v. Gonzalvo, Jr.,G.R. No.159293, December 16, 2005, 478 SCRA 298, 305.12

G.R. No. 156367, May 16, 2005, 458 SCRA 578.13

Id. at 589.14

Rollo, p. 42.15

Id. at 375.16

Article 291 of the Labor Code.17

Supra note 12, at 591.18

See Auto Bus Transport Systems, Inc. v. Bautista, supra at 594.






















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epublic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 78210 February 28, 1989

TEOFILO ARICA, DANILO BERNABE, MELQUIADESDOHINO, ABONDIO OMERTA, GIL TANGIHAN, SAMUELLABAJO, NESTOR NORBE, RODOLFO CONCEPCION,RICARDO RICHA, RODOLFO NENO, ALBERTOBALATRO, BENJAMIN JUMAMOY, FERMIN DAAROL,JOVENAL ENRIQUEZ, OSCAR BASAL, RAMON ACENA,JAIME BUGTAY, and 561 OTHERS, HEREINREPRESENTED BY KORONADO B. APUZEN, petitionersvs.NATIONAL LABOR RELATIONS COMMISSION,HONORABLE FRANKLIN DRILON, HONORABLECONRADO B. MAGLAYA, HONORABLE ROSARIO B.ENCARNACION, and STANDARD (PHILIPPINES) FRUIT

CORPORATION, respondents.

Koronado B. Apuzen and Jose C. Espinas for petitioners.

The Solicitor General for public respondent.

Dominguez & Paderna Law Offices Co. for privaterespondent.

PARAS, J.:

This is a petition for review on certiorari of the decision of theNational Labor Relations Commission dated December 12,

1986 in NLRC Case No. 2327 MC-XI-84 entitled Teofilo Aricaet al. vs. Standard (Phil.) Fruits Corporation (STANFILCO)which affirmed the decision of Labor Arbiter Pedro C. Ramos,NLRC, Special Task Force, Regional Arbitration Branch No.XI, Davao City dismissing the claim of petitioners.

This case stemmed from a complaint filed on April 9, 1984against private respondent Stanfilco for assembly time, moraldamages and attorney's fees, with the aforementionedRegional Arbitration Branch No. XI, Davao City.

After the submission by the parties of their respective positionpapers (Annex "C", pp. 30-40; Annex "D", Rollo, pp. 41-50),Labor Arbiter Pedro C. Ramos rendered a decision dated

October 9, 1985 (Annex 'E', Rollo, pp. 51-58) in favor ofprivate respondent STANFILCO, holding that:

Given these facts and circumstances, wecannot but agree with respondent that thepronouncement in that earlier case, i.e. thethirty-minute assembly time long practicedcannot be considered waiting time or worktime and, therefore, not compensable, hasbecome the law of the case which can no

longer be disturbed without doing violenceto the time- honored principle of res

judicata.

WHEREFORE, in view of the foregoingconsiderations, the instant complaint shouldtherefore be, as it is hereby, DISMISSED.

SO ORDERED. (Rollo, p. 58)

On December 12, 1986, after considering the appeamemorandum of complainant and the opposition orespondents, the First Division of public respondent NLRCcomposed of Acting Presiding Commissioner Franklin DrilonCommissioner Conrado Maglaya, Commissioner Rosario DEncarnacion as Members, promulgated its Resolutionupholding the Labor Arbiters' decision. The Resolution'sdispositive portion reads:

'Surely, the customary functions referred toin the above- quoted provision of theagreement includes the long-standingpractice and institutionalized noncompensable assembly time. This, in effectestopped complainants from pursuing thiscase.

The Commission cannot ignore these hardfacts, and we are constrained to uphold thedismissal and closure of the case.

WHEREFORE, let the appeal be, as it ishereby dismissed, for lack of merit.

SO ORDERED. (Annex "H", Rollo, pp. 8689).

On January 15, 1987, petitioners filed a Motion foReconsideration which was opposed by private responden(Annex "I", Rollo, pp. 90-91; Annex J Rollo, pp. 92-96).

Public respondent NLRC, on January 30, 1987, issued aresolution denying for lack of merit petitioners' motion forreconsideration (Annex "K", Rollo, p. 97).

Hence this petition for review on certiorari filed on May 71987.

The Court in the resolution of May 4, 1988 gave due course tothis petition.

Petitioners assign the following issues:

1) Whether or not the 30-minute activity othe petitioners before the scheduledworking time is compensable under theLabor Code.




13 | P a g e

2) Whether or not res judicata applies whenthe facts obtaining in the prior case and inthe case at bar are significantly differentfrom each other in that there is merit in thecase at bar.

3) Whether or not there is finality in the

decision of Secretary Ople in view of thecompromise agreement novating it and thewithdrawal of the appeal.

4) Whether or not estoppel and laches lie indecisions for the enforcement of laborstandards (Rollo, p. 10).

Petitioners contend that the preliminary activities as workersof respondents STANFILCO in the assembly area iscompensable as working time (from 5:30 to 6:00 o'clock in themorning) since these preliminary activities are necessarilyand primarily for private respondent's benefit.

These preliminary activities of the workers are as follows:

(a) First there is the roll call. This is followedby getting their individual work assignmentsfrom the foreman.

(b) Thereafter, they are individually requiredto accomplish the Laborer's Daily

Accomplishment Report during which theyare often made to explain about theirreported accomplishment the following day.

(c) Then they go to the stockroom to get the

working materials, tools and equipment.

(d) Lastly, they travel to the field bringingwith them their tools, equipment andmaterials.

All these activities take 30 minutes to accomplish (Rollo,Petition, p. 11).

Contrary to this contention, respondent avers that the instantcomplaint is not new, the very same claim having beenbrought against herein respondent by the same group of rankand file employees in the case of Associated Labor Union andStandard Fruit Corporation, NLRC Case No. 26-LS-XI-76

which was filed way back April 27, 1976 when ALU was thebargaining agent of respondent's rank and file workers. Thesaid case involved a claim for "waiting time", as thecomplainants purportedly were required to assemble at adesignated area at least 30 minutes prior to the start of theirscheduled working hours "to ascertain the work forceavailable for the day by means of a roll call, for the purpose ofassignment or reassignment of employees to such areas inthe plantation where they are most needed." (Rollo, pp. 64-65)

Noteworthy is the decision of the Minister of Labor, on May12, 1978 in the aforecited case (Associated Labor Union vsStandard (Phil.) Fruit Corporation, NLRC Case No. 26-LS-XI76 where significant findings of facts and conclusions hadalready been made on the matter.

The Minister of Labor held:

The thirty (30)-minute assembly time longpracticed and institutionalized by mutuaconsent of the parties under Article IVSection 3, of the Collective Bargaining

Agreement cannot be considered as waitingtime within the purview of Section 5, Rule IBook III of the Rules and RegulationsImplementing the Labor Code. ...

Furthermore, the thirty (30)-minuteassembly is a deeply- rooted, routinarypractice of the employees, and theproceedings attendant thereto are no

infected with complexities as to deprive theworkers the time to attend to other personapursuits. They are not new employees as torequire the company to deliver longbriefings regarding their respective workassignments. Their houses are situatedright on the area where the farm arelocated, such that after the roll call, whichdoes not necessarily require the personapresence, they can go back to their housesto attend to some chores. In short, they arenot subject to the absolute control of thecompany during this period, otherwise, theifailure to report in the assembly time would

justify the company to impose disciplinary

measures. The CBA does not contain anyprovision to this effect; the record is alsobare of any proof on this point. Thistherefore, demonstrates the indubitable facthat the thirty (30)-minute assembly timewas not primarily intended for the interestsof the employer, but ultimately for theemployees to indicate their availability onon-availability for work during everyworking day. (Annex "E", Rollo, p. 57).

Accordingly, the issues are reduced to the sole question as towhether public respondent National Labor RelationsCommission committed a grave abuse of discretion in its

resolution of December 17, 1986.

The facts on which this decision was predicated continue tobe the facts of the case in this questioned resolution of theNational Labor Relations Commission.

It is clear that herein petitioners are merely reiterating the verysame claim which they filed through the ALU and whichrecords show had already long been considered terminatedand closed by this Court in G.R. No. L-48510. Therefore, the




14 | P a g e

NLRC can not be faulted for ruling that petitioners' claim isalready barred by res-judicata.

Be that as it may, petitioners' claim that there was a change inthe factual scenario which are "substantial changes in thefacts" makes respondent firm now liable for the same claimthey earlier filed against respondent which was dismissed. It

is thus axiomatic that the non-compensability of the claimhaving been earlier established, constitute the controllinglegal rule or decision between the parties and remains to bethe law of the case making this petition without merit.

As aptly observed by the Solicitor General that this petition is"clearly violative of the familiar principle of res judicata. Therewill be no end to this controversy if the light of the Minister ofLabor's decision dated May 12, 1979 that had long acquiredthe character of finality and which already resolved thatpetitioners' thirty (30)-minute assembly time is notcompensable, the same issue can be re-litigated again."(Rollo, p. 183)

This Court has held:

In this connection account should be takenof the cognate principle that res

judicata operates to bar not only therelitigation in a subsequent action of theissues squarely raised, passed upon andadjudicated in the first suit, but also theventilation in said subsequent suit of anyother issue which could have been raised inthe first but was not. The law provides that'the judgment or order is, with respect to thematter directly adjudged or as to any othermatter that could have been raised in

relation thereto, conclusive between theparties and their successors in interest bytitle subsequent to the commencement ofthe action .. litigating for the same thing andin the same capacity.' So, even if newcauses of action are asserted in the secondaction (e.g. fraud, deceit, unduemachinations in connection with theirexecution of the convenio de transaccion),this would not preclude the operation of thedoctrine of res judicata. Those issues arealso barred, even if not passed upon in thefirst. They could have been, but were not,there raised. (Vda. de Buncio v. Estate ofthe late Anita de Leon, 156 SCRA 352

[1987]).

Moreover, as a rule, the findings of facts of quasi-judicialagencies which have acquired expertise because their

jurisdiction is confined to specific matters are accorded notonly respect but at times even finality if such findings aresupported by substantial evidence (Special Events & CentralShipping Office Workers Union v. San Miguel Corporation,122 SCRA 557 [1983]; Dangan v. NLRC, 127 SCRA 706[1984]; Phil. Labor Alliance Council v. Bureau of Labor

Relations, 75 SCRA 162 [1977]; Mamerto v. Inciong, 118SCRA 265 (1982]; National Federation of Labor Union(NAFLU) v. Ople, 143 SCRA 124 [1986]; Edi-Staff BuildersInternational, Inc. v. Leogardo, Jr., 152 SCRA 453 [1987]

Asiaworld Publishing House, Inc. v. Ople, 152 SCRA 219[1987]).

The records show that the Labor Arbiters' decision datedOctober 9, 1985 (Annex "E", Petition) pointed out in detail thebasis of his findings and conclusions, and no cogent reasoncan be found to disturb these findings nor of those of theNational Labor Relations Commission which affirmed thesame.

PREMISES CONSIDERED, the petition is DISMISSED folack of merit and the decision of the National Labor RelationsCommission is AFFIRMED.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla and Regalado, JJ.concur.

Separate Opinions

SARMIENTO, J., Dissenting:

It is my opinion that res judicata is not a bar.

The decision penned by then Minister Blas Ople in ALU vSTANFILCO (NLRC Case No. 26-LS-XI-76) relied upon bythe respondents as basis for claims of res judicata, is not, tomy mind, a controlling precedent. In that case, it was held thathe thirty-minute "waiting time" complained of was a mere"assembly time" and not a waiting time as the term is knownin law, and hence, a compensable hour of work. Thus:

The thirty (30)-minute assembly time long practicedand institutionalized by mutual consent of the partiesunder Article IV, Section 3, of the CollectiveBargaining Agreement cannot be considered as

'waiting time' within the purview of Section 5, Rule 1Book III of the Rules and Regulations Implementingthe Labor Code. ...

Furthermore, the thirty (30)-minute assembly is adeeply- rooted, routinary practice of the employeesand the proceedings attendant thereto are noinfected with complexities as to deprive the workersthe time to attend to other personal pursuits. Theyare not new employees as to require the company todeliver long briefings regarding their respective work




15 | P a g e

assignments. Their houses are situated right on thearea where the farms are located, such that after theroll call, which does not necessarily require thepersonal presence, they can go back to their housesto attend to some chores.

In short, they are not subject to the absolute control

of the company during this period, otherwise, theirfailure to report in the assembly time would justifythe company to impose disciplinary measures. TheCBA does not contain any provision to this effect; therecord is also bare of any proof on this point. This,therefore, demonstrates the indubitable fact that thethirty (30)-minute assembly time was not primarilyintended for the interests of the employer, butultimately for the employees to indicate theiravailability or non-availability for work during everyworking day. (Decision, 6.)

Precisely, it is the petitioners' contention that the assemblytime in question had since undergone dramatic changes,

thus:

(a) First there is the roll call. This is followed bygetting their individual work assignments from theforeman.

(b) Thereafter,they are individually required toaccomplish the Laborer's Daily AccomplishmentReport during which they are often made to explainabout their reported accomplishment the followingday.

(c) Then they go to the stockroom to get the workingmaterials, tools and equipment.

(d) Lastly, they travel to the field bringing with themtheir tools, equipment and materials. (Supra, 4-5.)

The petitioners have vehemently maintained that in viewthereof, the instant case should be distinguished from the firstcase. And I do not believe that the respondents havesuccessfully rebutted these allegations. The Solicitor Generalrelies solely on the decision of then Minister Ople, thedecision the petitioners precisely reject in view of the changesin the conditions of the parties. The private respondent on theother hand insists that these practices were the samepractices taken into account in ALU v. STANFILCO. If thiswere so, the Ople decision was silent thereon.

It is evident that the Ople decision was predicated on theabsence of any insinuation of obligatoriness in the course orafter the assembly activities on the part of the employees.(" . .[T]hey are not subject to the absolute control of the companyduring this period, otherwise, their failure to report in theassembly time would justify the company to imposedisciplinary measures;" supra, 6.) As indicated, however, bythe petitioners, things had since changed, and remarkably so,and the latter had since been placed under a number of

restrictions. My considered opinion is that the thirty-minuteassembly time had become, in truth and fact, a "waiting time"as contemplated by the Labor Code.

I vote, then, to grant the petition.

Separate Opinions

SARMIENTO, J., Dissenting:

It is my opinion that res judicata is not a bar.

The decision penned by then Minister Blas Ople in ALU vSTANFILCO (NLRC Case No. 26-LS-XI-76) relied upon bythe respondents as basis for claims of res judicata, is not, tomy mind, a controlling precedent. In that case, it was held thathe thirty-minute "waiting time" complained of was a mere"assembly time" and not a waiting time as the term is knownin law, and hence, a compensable hour of work. Thus:

The thirty (30)-minute assembly time long practicedand institutionalized by mutual consent of the partiesunder Article IV, Section 3, of the CollectiveBargaining Agreement cannot be considered as'waiting time' within the purview of Section 5, Rule 1Book III of the Rules and Regulations Implementingthe Labor Code. ...

Furthermore, the thirty (30)-minute assembly is adeeply- rooted, routinary practice of the employeesand the proceedings attendant thereto are noinfected with complexities as to deprive the workersthe time to attend to other personal pursuits. Theyare not new employees as to require the company to

deliver long briefings regarding their respective workassignments. Their houses are situated right on thearea where the farms are located, such that after theroll call, which does not necessarily require thepersonal presence, they can go back to their housesto attend to some chores.

In short, they are not subject to the absolute controof the company during this period, otherwise, theifailure to report in the assembly time would justifythe company to impose disciplinary measures. TheCBA does not contain any provision to this effect; therecord is also bare of any proof on this point. Thistherefore, demonstrates the indubitable fact that thethirty (30)-minute assembly time was not primarily

intended for the interests of the employer, buultimately for the employees to indicate theiavailability or non-availability for work during everyworking day. (Decision, 6.)

Precisely, it is the petitioners' contention that the assemblytime in question had since undergone dramatic changesthus:




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(a) First there is the roll call. This is followed bygetting their individual work assignmentsfrom the foreman.

(b) Thereafter,they are individually required toaccomplish the Laborer's Daily

Accomplishment Report during which theyare often made to explain about their

reported accomplishment the following day.(c) Then they go to the stockroom to get the workingmaterials, tools and equipment.

(d) Lastly, they travel to the field bringing with themtheir tools, equipment and materials.(Supra, 4-5.)

The petitioners have vehemently maintained that in viewthereof, the instant case should be distinguished from the firstcase. And I do not believe that the respondents havesuccessfully rebutted these allegations. The Solicitor Generalrelies solely on the decision of then Minister Ople, thedecision the petitioners precisely reject in view of the changesin the conditions of the parties. The private respondent on theother hand insists that these practices were the same

practices taken into account in ALU v. STANFILCO. If thiswere so, the Ople decision was silent thereon.

It is evident that the Ople decision was predicated on theabsence of any insinuation of obligatoriness in the course orafter the assembly activities on the part of the employees.(" . .[T]hey are not subject to the absolute control of the companyduring this period, otherwise, their failure to report in theassembly time would justify the company to imposedisciplinary measures;" supra, 6.) As indicated, however, bythe petitioners, things had since changed, and remarkably so,and the latter had since been placed under a number ofrestrictions. My considered opinion is that the thirty-minuteassembly time had become, in truth and fact, a "waiting time"

as contemplated by the Labor Code.

I vote, then, to grant the petition.


Manila

THIRD DIVISION

G.R. Nos. 64821-23 January 29, 1993

UNIVERSITY OF PANGASINAN FACULTYUNION, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION andUNIVERSITY OF PANGASINAN, respondents.

Tanopo & Serafica for petitioner.

Hermogenes S. Decano for private respondents.

ROMERO, J .:

In the instant petition for mandamus and certiorari , petitioneunion seeks to enjoin the respondent National LaboRelations Commission (NLRC) to resolve, or direct the Labo

Arbiter to hear and decide, the merits of three of petitioner'sunresolved complaints, and to annul and set aside theresolution of the NLRC affirming the decision of the ExecutiveLabor Arbiter dismissing the petitioner's complaints foviolation of certain labor standards laws but requiringrespondent university to integrate the cost of living allowanceinto the basic pay of the covered employees and reminding itto pay its employees at intervals not exceeding sixteen (16)days.

The uncontroverted facts show that on various datespetitioner filed the following complaints against the Universityof Pangasinan (University for brevity) before the ArbitrationBranch of the NLRC in Dagupan City:

1. October 14, 1980 : for nonpayment of benefits underP.D. No. 1713 and emergency cost of living allowance(ecola) to part-time teachers, and for prompt andaccurate computation of benefits under P.D. No. 451and the payment of ecolas;

2. November 7, 1980 : for nonpayment of all ecolas toinstructors from October 18-31, 1980;

3. November 20, 1980 : for nonpayment of ecolasunder P.D. Nos. 525, 1123, 1614, 1634, 1678 and1713 for November 1-15, 1980, and extra loads duringtyphoons "Nitang" and "Osang" on July 21 and 25,1980, respectively;




17 | P a g e

4. April 13, 1981: for violation of P.D. No. 1751 andnonpayment of extra loads on February 12-13, 1980(Anniversary celebration);

5. April 27, 1981: for nonpayment of all ecolas for April1-15, 1981 to faculty members who were alsomembers of the union;

6. May 21, 1981: for violation of Wage Order No. 1 anddelayed payment of salaries; and

7. June 17, 1981: for nonpayment of salary differentialsfor summer under P.D. No. 451.

1

The Regional Director in San Fernando, La Union certified six(6) of these complaints to Labor Arbiter Pedro Fernandez ofthe Dagupan City District Office of the then Ministry of Laborand Employment for compulsory arbitration.

2 According to the

petitioner, it was made to understand by Fernandez that theseventh complaint should also be discussed in its positionpaper. Accordingly, petitioner filed a position paper discussingthe merits of all the seven complaints. On the other hand, theUniversity limited its discussion to only four: the complaintsfiled on April 13, 1981, April 27, 1981, May 21, 1981 and June17, 1981. Petitioner was of the view that Executive Labor

Arbiter Sotero L. Tumang adopted the stand of the Universityon the four complaints and accordingly dismissed them in hisdecision of January 25, 1982.

3

Observing that in its position paper, the petitioner includedmatters which were "beyond the scope of the issues allegedin the complaints," said Labor Arbiter discussed the fourcomplaints individually. On the April 13, 1981 complaint, heruled that because at the time P.D. No. 1123 took effect onMay 1, 1977, the University had not increased its tuition fees,

there was of "nothing to integrate." 4

However, from June 16,1979 when the University increased its tuition fees, it wasobligated to cause the integration of the across-the-boardincrease of P60.00 in emergency allowance into the basic payas mandated by P.D. Nos. 1123 and 1751.

On the alleged nonpayment of extra loads handled by theemployees on February 12 and 13, 1981 when classes weresuspended, Tumang stated that Consuelo Abad, thepetitioner's president, had no cause to complain because hersalary was fully paid and that, since there were "nocomplainants for the alleged nonpayment of extra loads fortwo days," the issue had become academic.

With respect to the April 27, 1981 complaint, Tumang saidthat since the salary paid to Consuelo Abad and other facultymembers for the April 1-15, 1981 period had been earned "aspart of their salary for the ten-month period," she was nolonger entitled to an emergency cost of living allowance. Headded that "payment of emergency cost of living allowance isbased on actual work performed except when they(employees) are on leave with pay." Hence, because classesended in March 1981, the teachers who did not report forwork could not be considered on leave with pay and,

therefore, they were not entitled to an emergency cost oliving allowance.

As regards the May 21, 1981 complaint alleging violation oWage Order No. 1, Tumang found that the University hadactually implemented the additional living allowance of P2.00a day required therein. On the alleged delay in the payment o

salaries of the employees, he rationalized that delays couldnot be avoided but he reminded the University to pay itsemployees on time.

The June 17, 1981 complaint was also resolved in favor of theUniversity. Stating that P.D. No. 451 which mandates salaryincreases is dependent on enrollment and allowabledeductions, Tumang ruled that, again, Consuelo Abad had nocause to complain as she had been paid out of the allowable12.74% for distribution which was a "substantial compliancewith P.D. No. 451."

5 The dispositive portion of the decision

states:

IN THE LIGHT OF THE FOREGOING

CONSIDERATION, the above-entitled cases aredismissed for lack of merit. Respondent however, isrequired to integrate the allowance of P60.00 underP.D. 1123 into the basic pay of the covered employeesif the same has not as yet been complied with.Respondent is also reminded to pay the employees atintervals not exceeding sixteen (16) days pursuant to

Article 102 of the Labor Code.

SO ORDERED.

The petitioner appealed the said decision to the NLRC. In itsresolution of June 20, 1993, the NLRC affirmed the decisionof Executive Labor Article Tumang. Hence, the instant petition

for mandamus and certiorari with the following prayer:

WHEREFORE, the foregoing premises considered, it isrespectfully prayed that this petition be given duecourse and that judgment issue:

1. Declaring petitioner as possessed with capacity torepresent its members in the complaints it filed thru itspresident, Miss Consuelo Abad, against privaterespondent, and the complaints are pertaining to themembers who are entitled under the law to the claimssought herein, not to Miss Abad alone;

2. Annulling and setting aside the appealed resolution

insofar as the issues of nonpayment of Ecola for Apri1-15, 1981 and nonpayment of salary differentials fosummer of 1981 under P.D. No. 451 are concerned;

3. Ordering private respondent to pay coveredmembers of petitioner their Ecola for April 1-15, 1981and their salary differentials for summer of 1981pursuant to the mandate of P.D. 451;




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4. Enjoining public respondent to resolve on themerits the issues of nonpayment of extra loads ofFebruary 12-13, 1980 and violation of Wage OrderNo. 1 which were properly brought on appeal to saidoffice;

5. Enjoining public respondent to resolve on the merits

the issues or grievances alleged in the complaints filedon October 14, November 7 and November 20, all in1980, which were not resolved by the labor arbiter butnonetheless appealed to public respondents, or

6. Enjoining public respondent to order or direct thelabor arbiter to resolve on the merits the said issues orgrievances alleged in the complaints mentioned in thenext preceding paragraph;

7. Attorney's fee in such amount as this HonorableTribunal may deem just and reasonable in thepremises;

8. Ordering private respondent to pay costs of suit,including this appeal.

Petitioner further prays for safeguards and/ormeasures to insure the correct computation of theamount of claims herein sought due to each coveredmember of petitioner, and for such other reliefs justand equitable in the premises.

6

We shall first deal with the propriety of the special civil actionof mandamus. In this regard, petitioner contends that theNLRC should have, in the exercise of its appellate jurisdiction,resolved the issues raised in the three (3) complaints filed onOctober 14, November 7 and November 20, 1980 or, in the

alternative, ordered the Labor Arbiter to hear and decide theaforementioned three (3) complaints, it having the power ofsupervision over Labor Arbiters.

Sec. 3, Rule 65 of the Rules of Court provides:

Sec. 3. Petition for Mandamus. — When any tribunal,corporation, board, or person unlawfully neglects theperformance of an act which the law specificallyenjoins as a duty resulting from an office, trust, orstation, or unlawfully excludes another from the useand enjoyment of a right or office to which such other isentitled, and there is no other plain, speedy andadequate remedy in the ordinary course of law, the

person aggrieved thereby may file a verified petition inthe proper court alleging the facts with certainty andpraying that judgment be rendered commanding thedefendant, immediately or at some other specifiedtime, to do the act required to be done to protect therights of the petitioner, and to pay the damagessustained by the petitioner by reason of the wrongfulacts of the defendant.

As succinctly provided in this section, anyone who wishes toavail of the remedy of mandamus must state in a verifiedpetition "the facts with certainty." On account of thisrequirement, mandamus is never issued in doubtful casesand showing of a clear and certain right on the part of thepetitioner is required.

7 Indeed, while the labor arbiter is duty

bound to resolve all complaints referred to him for arbitration

and, therefore, he may be compelled bymandamus to decidethem (although not in any particular way or in favor oanyone),

8 we find that the peculiar circumstances in this case

do not merit the issuance of the writ of mandamus.

Petitioner admits that only six of the complaints were certifiedto Labor Arbiter Fernandez for compulsory arbitration. Ifailed, however, to allege why this was the case or whether ithad exerted any effort to include the remaining complaint inthe certification. What it stresses is the alleged assurance oLabor Arbiter Fernandez that the seventh complaint may bediscussed in its position paper. It turned out, however, thataccording to the unrebutted allegation of the Solicitor GeneralLabor Arbiter Fernandez inhibited himself from handling thecases referred to him as he was teaching at the University

Hence, Labor Arbiter Fernandez forwarded the complaints tothe Assistant Director for Arbitration in Regional Office No. 1in San Fernando, La Union for appropriate action. He shouldhave forwarded all of the complaints to the said AssistanDirector, but it appears that Fernandez turned oveonly four of them. In turn, the Assistant Director referred onlycomplaints Nos. 5, 6 and 7, which had been docketed as RBIC-24-81, LS-42-81 and LS-43-81, to Executive Labor ArbiteSotero L. Tumang for compulsory arbitration. However, whileonly these three docket numbers appear on the caption of thedecision, the same actually resolved four complaints, asearlier mentioned.

9

From these facts, one may infer that there must have been a

mishandling of the complaints and/or the records of thecases. However, the petitioner failed to substantiate byevidence such negligence on the part of the publicrespondents as to warrant the issuance of a writof mandamus.

10 Its officials even neglected the simple act o

verifying from the MOLE office in Dagupan City whether therecords of all the cases filed had been forwarded to theproper official who should resolve them.

11 Infact, nowhere in

its pleadings12

is there an allegation to that effect.

On the contrary, the petitioner took Fernandez' wordsseriously and allowed the proceedings to reach its inevitableconclusion. When it received a copy of the decision, thepetitioner should have taken note of Executive Labor ArbiteTumang's observation therein that it had discussed matters"beyond the scope of the issues alleged in the complaints." Inits memorandum of appeal, it should have prayed for theinclusion of the three complaints inasmuch as in labor casesan appeal may be treated as a motion for reconsideration orvice-versa.

13 The fact that three complaints had been omitted

did not escape the attention of the NLRC which stated in itsresolution that "since those cases were not consolidated it isnow too late to consolidate them" with the four decidedcases.

14 We agree with the NLRC that the said complaints

should proceed separately as long as their resolution would




19 | P a g e

not conflict with the resolvedcases.

15 It should be added that under Art. 217(b) of the

Labor Code, the NLRC has "exclusive appellate jurisdictionover all cases decided by the Labor Arbiters." Needless tosay, the NLRC could not have acted on matters outside of thecases appealed to it.

Petitioner's contention that the cases filed by Consuelo Abadas its president should affect, not only herself, but all the otherunion members similarly situated as she was, is well taken.The uncontroverted allegation of the petitioner is that it is theholder of Registration Certificate No. 9865-C, having beenregistered with the then Ministry of Labor and Employment onFebruary 16, 1978. As such, petitioner possessed the legalpersonality to sue and be sued under its registeredname.

16 Corollarily, its president, Consuelo Abad, correctly

filed the complaints even if some of them involved rights andinterest purely or exclusively appertaining to individualemployees, it appearing that she signed the complaints "forand in behalf of the University of Pangasinan FacultyUnion."

17

The University's contention that petitioner had no legalpersonality to institute and prosecute money claims must,therefore, fail. To quote then Associate Justice Teehankeein Heirs of Teodelo M. Cruz v. CIR ,

18 "[w]hat should be borne

in mind is that the interest of the individual worker can bebetter protected on the whole by a strong union aware of itsmoral and legal obligations to represent the rank and filefaithfully and secure for them the best wages and workingterms and conditions. . . . Although this was stated within thecontext of collective bargaining, it applies equally well tocases, such as the present wherein the union, through itspresident, presented its individual members' grievancesthrough proper proceedings. While the complaints might nothave disclosed the identities of the individual employees

claiming monetary benefits, 19

such technical defect shouldnot be taken against the claimants, especially because theUniversity appears to have failed to demand a bill ofparticulars during the proceedings before the Labor Arbiter.

On the merits of the petition, the NLRC did not abuse itsdiscretion in resolving the appeal from the decision ofExecutive Labor Arbiter Tumang except for the disallowanceof the emergency cost of living allowance to members of thepetitioner. The Rules Implementing P.D. No. 1713 which tookeffect on August 18, 1980 provide:

Sec. 6. Allowances of full-time and part-timeemployees. — Employees shall be paid in full the

monthly allowance on the basis of the scales providedin Section 3 hereof, regardless of the number of theirregular working days if they incur no absences duringthe month. If they incur absences without pay, theamounts corresponding to the absences may bededucted from the monthly allowance provided that indetermining the equivalent daily allowance of suchdeduction, the applicable monthly allowance shall bedivided by thirty (30) days.

xxx xxx xxx

(Emphasis supplied).

This Section, which is a virtual reproduction of Section 12 ofthe old Rules Implementing P.D. No. 1123, has beeninterpreted by this Court as requiring that the full amount ofthe cost of living allowance mandated by law should be givenmonthly to each employee if the latter has workedcontinuously for each month, regardless of the number of theregular working days.

20 But more apropos is the ruling of this

Court in University of Pangasinan Faculty Union v. Universityof Pangasinan and NLRC ,

21 a case involving the same

parties as in the instant petition and dealing with a complainfiled by the petitioner on December 18, 1981 seeking, amongothers, the payment of emergency cost of living allowancesfor November 7 to December 5, 1981, a semestral break. TheCourt held therein:

. . . The "No work, no pay " principle does not apply inthe instant case. The petitioner's members received

their regular salaries during this period. It is clear fromthe . . . law that it contemplates a "no work" situationwhere the employees voluntarily absent themselvesPetitioners, in the case at bar, certainly do not, advoluntatem absent themselves during semestrabreaks. Rather, they are constrained to take mandatoryleave from work. For this, they cannot be faulted nocan they be begrudged that which is due them undethe law. To a certain extent, the private respondent canspecify dates when no classes would be held. Surely, iwas not the intention of the framers of the law to allowemployers to withhold employee benefits by the simpleexpedient of unilaterally imposing "no work" days andconsequently avoiding compliance with the mandate ofthe law for those days.

As interpreted and emphasized in the same case, the lawgranting emergency cost of living allowances was designed toaugment the income of the employees to enable them to copewith the rising cost of living and inflation. Clearly, it wasenacted in pursuance of the State's duty to protect labor andto alleviate the plight of the workers. To uphold privaterespondent's interpretation of the law would be runningcounter to the intent of the law and the Constitution.

WHEREFORE, the petition for mandamus is herebyDISMISSED. The decision of the NLRC is AFFIRMED subjecto the MODIFICATION that private respondent University oPangasinan shall pay its regular and fulltime teachers and

employees emergency cost of living allowance for the period April 1-15, 1981. Costs against private respondent.

SO ORDERED.

Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ., concur .

# Footnotes 1 Petition, pp. 3-4; Rollo, pp. 4-5.2 Rollo, p. 42.3 Petition, pp. 4-5; Rollo, pp. 5-6.




20 | P a g e

4 P.D. No. 1751 increased "the statutory daily minimum wage at alllevels by P4.00 after integrating the mandatory emergency livingallowances under Presidential Decrees 525 and 1123 into the basicpay of all covered workers."5 Decision, Rollo, pp. 62-67.6 Petition, pp. 35-36; Rollo, pp. 36-37.7 Marcelo v. Tantuico, Jr., G.R. No. 60074, July 7, 1986, 142 SCRA439, 445 citing Taboy v. Court of Appeals, L-47472, July 24, 1981, 105SCRA 758.8 Per Kant Kwong v. PCGG (G.R. No. 79484, December 7, 1987, 156SCRA 222), the writ of mandamus may be issued to direct an off icialwith discretionary powers "to act but not to act one way or the other."9 Comment, pp. 2-3; Rollo, pp. 126-127.10 See: Taboy v. Court of Appeals, supra.11 In Perez v. City Mayor of Cabanatuan (L-16786, October 31, 1961,3 SCRA 431), the Court held that special civil actionslike mandamus are not entertainable if a superior administrative officercould grant a relief.12 See: Tangonon v. Paño, L-45157, June 27, 1985, 137 SCRA 245where the Court held that a petition for mandamus, which demandsexpeditious determination, may be decided on the pleadings filed.13 While in its memorandum of appeal, petitioner revealed the fact thatthree complaints had been disregarded by Labor Arbiter Tumang andalleged that "the same ought to have been considered, passed uponand decided on their merits," it merely prayed for the reversal andsetting aside of the decision and that "a new one be entered inaccordance with the prayers in the various complaints filed." Rollo, pp.68-84.14 NLRC Resolution, p. 39.15 Ibid ., pp. 38-39.16 Art. 242(e), Labor Code, as amended.17 Solicitor General's Comment, p. 9, Rollo, p. 133.18 G.R. No. L-23331-32, December 27, 1969, 30 SCRA 817, 946.19 Private Respondent's Comment, p. 1; Rollo, p. 103.20 Needle Queen Corporation v. Nicolas, G.R. Nos. 60741-43,December 22, 1989, 180 SCRA 568.21 G.R. No. 63122, February 20, 1984, 127 SCRA 691.


Manila

SECOND DIVISION

G.R. No. 96078 January 9, 1992HILARIO RADA, petitioner,vs.NATIONAL LABOR RELATIONS COMMISSION (SecondDivision) and PHILNOR CONSULTANTS AND PLANNERSINC., respondents.Cabellero, Calub, Aumentado & Associates Law Offices for

petitioner.

REGALADO, J .:

In this special civil action for certiorari , petitioner Rada seeksto annul the decision of respondent National Labor RelationsCommission (NLRC), dated November 19, 1990, reversingthe decision of the labor arbiter which ordered thereinstatement of petitioner with backwages and awarded himovertime pay.

1

The facts, as stated in the Comment of private respondenPhilnor Consultants and Planners, Inc. (Philnor), are asfollows:

Petitioner's initial employment with this Respondentwas under a "Contract of Employment for a DefinitePeriod" dated July 7, 1977, copy of which is heretoattached and made an integral part hereof as Annex

A whereby Petitioner was hired as "Driver " for theconstruction supervision phase of the Manila NorthExpressway Extension, Second Stage (hereinafterreferred to as MNEE Stage 2) for a term of "about 24months effective July 1, 1977.

xxx xxx xxx

Highlighting the nature of Petitioner'semployment, Annex A specifically provides as follows:

It is hereby understood that the Employer doesnot have a continuing need for the services ofthe Employee beyond the termination date othis contract and that the Employee's servicesshall automatically, and without noticeterminate upon the completion of the abovespecified phase of the project; and that it isfurther understood that the engagement ohis/her services is coterminus with the same




21 | P a g e

and not with the whole project or other phasesthereof wherein other employees of similarposition as he/she have been hired. (Par. 7,emphasis supplied)

Petitioner's first contract of employment expiredon June 30, 1979. Meanwhile, the main project,

MNEE Stage 2, was not finished on account ofvarious constraints, not the least of which wasinadequate funding, and the same wasextended and remained in progress beyond theoriginal period of 2.3 years. Fortunately for thePetitioner, at the time the first contract ofemployment expired, Respondent was in needof Driver for the extended project. SincePetitioner had the necessary experience and hisperformance under the first contract ofemployment was found satisfactory, the positionof Driver was offered to Petitioner, which heaccepted. Hence a second Contract ofEmployment for a Definite Period of 10 months,that is, from July 1, 1979 to April 30, 1980 was

executed between Petitioner and Respondenton July 7, 1979. . . .

In March 1980 some of the areas or phases ofthe project were completed, but the bulk of theproject was yet to be finished. By that time someof those project employees whose contracts ofemployment expired or were about to expirebecause of the completion of portions of theproject were offered another employment in theremaining portion of the project. Petitioner wasamong those whose contract was about toexpire, and since his service performance wassatisfactory, respondent renewed his contract of

employment in April 1980, after Petitioneragreed to the offer. Accordingly, a third contractof employment for a definite period wasexecuted by and between the Petitioner and theRespondent whereby the Petitioner was againemployed as Driver for 19 months, from May 1,1980 to November 30, 1981, . . .

This third contract of employment wassubsequently extended for a number of times,the last extension being for a period of 3months, that is, from October 1, 1985 toDecember 31, 1985, . . .

The last extension, from October 1, 1985 toDecember 31, 1985 (Annex E) covered by an"Amendment to the Contract of Employmentwith a Definite Period," was not extended anyfurther because Petitioner had no more work todo in the project. This last extension wasconfirmed by a notice on November 28, 1985duly acknowledged by the Petitioner the verynext day, . . .

Sometime in the 2nd week of December 1985Petitioner applied for "Personnel Clearancewith Respondent dated December 9, 1985 andacknowledged having received the amount oP3,796.20 representing conversion to cash ounused leave credits and financial assistancePetitioner also released Respondent from al

obligations and/or claims, etc. in a "ReleaseWaiver and Quitclaim" . . .2

Culled from the records, it appears that on May 20, 1987petitioner filed before the NLRC, National Capital RegionDepartment of Labor and Employment, a Complaint for non-payment of separation pay and overtime pay. On June 31987, Philnor filed its Position Paper alleging, inter alia, thapetitioner was not illegally terminated since the project forwhich he was hired was completed; that he was hired undethree distinct contracts of employment, each of which was fora definite period, all within the estimated period of MNEEStage 2 Project, covering different phases or areas of the saidproject; that his work was strictly confined to the MNEE Stage2 Project and that he was never assigned to any other projec

of Philnor; that he did not render overtime services and thathere was no demand or claim for him for such overtime pay;that he signed a "Release, Waiver and Quitclaim" releasingPhilnor from all obligations and claims; and that Philnor'sbusiness is to provide engineering consultancy servicesincluding supervision of construction services, such that ihires employees according to the requirements of the projectmanning schedule of a particular contract.

3

On July 2, 1987, petitioner filed an Amended Complainalleging that he was illegally dismissed and that he was nopaid overtime pay although he was made to render threehours overtime work form Monday to Saturday for a period ofthree years.

On July 7, 1987, petitioner filed his Position Paper claimingthat he was illegally dismissed since he was a regulaemployee entitled to security of tenure; that he was not aproject employee since Philnor is not engaged in theconstruction business as to be covered by Policy InstructionsNo. 20; that the contract of employment for a definite periodexecuted between him and Philnor is against public policyand a clear circumvention of the law designed merely toevade any benefits or liabilities under the statute; that hisposition as driver was essential, necessary and desirable tothe conduct of the business of Philnor; that he renderedovertime work until 6:00 p.m. daily except Sundays andholidays and, therefore, he was entitled to overtime pay.

4

In his Reply to Respondent's Position Paper, petitioneclaimed that he was a regular employee pursuant to Article278(c) of the Labor Code and, thus, he cannot be terminatedexcept for a just cause under Article 280 of the Code; and thathe public respondent's ruling in Quiwa vs. PhilnoConsultants and Planners, Inc .

5 is not applicable to his case

since he was an administrative employee working as acompany driver, which position still exists and is essential tothe conduct of the business of Philnor even after thecompletion of his contract of employment.

6 Petitioner likewise




22 | P a g e

avers that the contract of employment for a definite periodentered into between him and Philnor was a ploy to defeat theintent of Article 280 of the Labor Code.

On July 28, 1987, Philnor filed its Respondent's SupplementalPosition Paper, alleging therein that petitioner was not acompany driver since his job was to drive the employees

hired to work at the MNEE Stage 2 Project to and from thefiled office at Sto. Domingo Interchange, Pampanga; that theoffice hours observed in the project were from 7:00 a.m. to4:00 p.m. Mondays through Saturdays; that Philnor adoptedthe policy of allowing certain employees, not necessarily theproject driver, to bring home project vehicles to afford fast andfree transportation to and from the project field officeconsidering the distance between the project site and theemployees' residence, to avoid project delays and inefficiencydue to employee tardiness caused by transportation problem;that petitioner was allowed to use a project vehicle which heused to pick up and drop off some ten employees alongEpifanio de los Santos Avenue (EDSA), on his way home toMarikina, Metro Manila; that when he was absent or on leave,another employee living in Metro Manila used the same

vehicle in transporting the same employees; that the timeused by petitioner to and from his residence to the project sitefrom 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to 6:00 p.m.,or about three hours daily, was not overtime work as he wasmerely enjoying the benefit and convenience of freetransportation provided by Philnor, otherwise without suchvehicle he would have used at least four hours by using publictransportation and spent P12.00 daily fare; that in the caseof Quiwa vs. Philnor Consultants and Planners, Inc ., supra,the NLRC upheld Philnor's position that Quiwa was a projectemployee and he was not entitled to termination pay underPolicy Instructions No. 20 since his employment wascoterminous with the completion of the project.

On August 25, 1987, Philnor filed its Respondent'sReply/Comments to Complainant's Rejoinder and Reply,submitting therewith two letters dated January 5, 1985 andFebruary 6, 1985, signed by MNEE Stage 2 Projectemployees, including herein petitioner, where they askedwhat termination benefits could be given to them as theMNEE Stage 2 Project was nearing completion, and Philnor'sletter-reply dated February 22, 1985 informing them that theyare not entitled to termination benefits as they arecontractual/project employees.

On August 31, 1989, Labor Arbiter Dominador M. Cruzrendered a decision

7 with the following dispositive portion:

WHEREFORE, in view of all the foregoingconsiderations, judgment is hereby rendered:

(1) Ordering the respondent company to reinstate thecomplainant to his former position without loss ofseniority rights and other privileges with full backwagesfrom the time of his dismissal to his actualreinstatement;

(2) Directing the respondent company to pay thecomplainant overtime pay for the three excess hours owork performed during working days from January1983 to December 1985; and

(3) Dismissing all other claims for lack of merit.

SO ORDERED.

Acting on Philnor's appeal, the NLRC rendered its assaileddecision dated November 19, 1990, setting aside the laboarbiter's aforequoted decision and dismissing petitioner'scomplaint.

Hence this petition wherein petitioner charges respondenNLRC with grave abuse of discretion amounting to lack of

jurisdiction for the following reasons:

1. The decision of the labor arbiter, dated August 31,

1989, has already become final and executory;2. The case of Quiwa vs . Phi lnor Consultants andPlanners , Inc . is not binding nor is it applicable to thiscase;3. The petitioner is a regular employee with eight yearsand five months of continuous services for his employer,private respondent Philnor;4. The claims for overtime services, reinstatement andfull backwages are valid and meritorious and should havebeen sustained; and5. The decision of the labor arbiter should be reinstatedas it is more in accord with the facts, the law andevidence.

The petition is devoid of merit.

1. Petitioner questions the jurisdiction of respondent NLRC intaking cognizance of the appeal filed by Philnor in spite of thelatter's failure to file a supersedeas bond within ten days fromreceipt of the labor arbiter's decision, by reason of which theappeal should be deemed to have been filed out of time. It wilbe noted, however, that Philnor was able to file a bondalthough it was made beyond the 10-day reglementary period

While it is true that the payment of the supersedeas bond isan essential requirement in the perfection of an appealhowever, where the fee had been paid although payment wasdelayed, the broader interests of justice and the desiredobjective of resolving controversies on the merits demands

that the appeal be given due course. Besides, it was withinthe inherent power of the NLRC to have allowed late paymenof the bond, considering that the aforesaid decision of thelabor arbiter was received by private respondent on Octobe3, 1989 and its appeal was duly filed on October 13, 1989However, said decision did not state the amount awarded asbackwages and overtime pay, hence the amount of thesupersedeas bond could not be determined. It was only in theorder of the NLRC of February 16, 1990 that the amount othe supersedeas bond was specified and which bond, after an




23 | P a g e

extension granted by the NLRC, was timely filed by privaterespondent.

Moreover, as provided by Article 221 of the Labor Code, "inany proceeding before the Commission or any of the Labor

Arbiters, the rules of evidence prevailing in Courts of law orequity shall not be controlling and it is the spirit and intention

of this Code that the Commission and its members and theLabor Arbiters shall use every and all reasonable means toascertain the facts in each case speedily and objectivelywithout regard to technicalities of law or procedure, all in theinterest of due process. 8 Finally, the issue of timeliness ofthe appeal being an entirely new and unpleaded matter in theproceedings below it may not now be raised for the first timebefore this Court.

9

2. Petitioner postulates that as a regular employee, he isentitled to security of tenure, hence he cannot be terminatedwithout cause. Private respondent Philnor believes otherwiseand asserts that petitioner is merely a project employee whowas terminated upon the completion of the project for which

he was employed.

In holding that petitioner is a regular employee, the laborarbiter found that:

. . . There is no question that the complainant wasemployed as driver in the respondent companycontinuously from July 1, 1977 to December 31, 1985under various contracts of employment. Similarly, thereis no dispute that respondent Philnor Consultant &Planner, Inc., as its business name connotes, hasbeen engaged in providing to its client(e)le engineeringconsultancy services. The record shows that while thedifferent labor contracts executed by the parties

stipulated definite periods of engaging the services ofthe complainant, yet the latter was suffered to continueperforming his job upon the expiration of one contractand the renewal of another. Under thesecircumstances, the complaint has obtained the statusof regular employee, it appearing that he has workedwithout fail for almost eight years, a fraction of sixmonths considered as one whole year, and that hisassigned task as driver was necessary and desirable inthe usual trade/business of the respondent employer.

Assuming to be true, as spelled out in the employmentcontract, that the Employer has no "continuing need forthe services of the Employe(e) beyond the terminationdate of this contract and that the Employee's servicesshall automatically, and without notice, terminate upon

completion of the above specified phase of theproject," still we cannot see our way clear why thecomplainant was hired and his services engagedcontract after contract straight from 1977 to 1985which, to our considered view, lends credence to thecontention that he worked as regular driver ferryingearly in the morning office personnel to the companymain office in Pampanga and bringing back late in theafternoon to Manila, and driving company executivesfor inspection of construction workers to the jobsites.

All told, we believe that the complainant, under the

environmental facts obtaining in the case at bar, is aregular employee, the provisions of written agreemento thecontrary notwithstanding and regardless of the oraunderstanding of the parties . . .

10

On the other hand, respondent NLRC declared that, as

between the uncorroborated and unsupported assertions opetitioners and those of private respondent which aresupported by documents, greater credence should be giventhe latter. It further held that:

Complainant was hired in a specific project orundertaking as driver. While such project wasstill on-going he was hired several times with hisemployment period fixed every time his contracwas renewed. At the completion of the specificproject or undertaking his employment contracwas not renewed.

We reiterate our ruling in the case of (Quiwa

vs. Philnor Consultants and PlannersInc ., NLRC RAB III 5-1738-84, it is beingapplicable in this case, viz .:

. . . While it is true that the activitiesperformed by him were necessary odesirable in the usual business or tradeof the respondent as consultantsplanners, contractor and while it is alsotrue that the duration of hisemployment was for a period of abouseven years, these circumstances didnot make him aregular employee in contemplation o

Article 281 of (the) Labor Code. . . .

11

Our ruling in Sandoval Shipyards, Inc . vs. National LaborRelations Commission, et al .

12 is applicable to the case at

bar. Thus:

We hold that private respondents were projecemployees whose work was coterminous with theproject or which they were hired. Project employeesas distinguished from regular or non-projecemployees, are mentioned in section 281 of the LaboCode as those "where the employment has been fixedfor a specific project or undertaking the completion otermination of which has been determined at the time

of the engagement of the employee."

Policy Instructions No. 20 of the Secretary of Laborwhich was issued to stabilize employer-employeerelations in the construction industry, provides:

Project employees are those employedin connection with a particulaconstruction project. Non-projec(regular) employees are those




24 | P a g e

employed by a construction companywithout reference to any particularproject.

Project employees are not entitled totermination pay if they are terminatedas a result of the completion of the

project or any phase thereof in whichthey are employed, regardless of thenumber of projects in which they havebeen employed by a particularconstruction company. Moreover, thecompany is not required to obtainclearance from the Secretary of Laborin connection with such termination.

The petitioner cited three of its own cases wherein theNational Labor Relations Commission, Deputy Ministerof Labor and Employment Inciong and the Director ofthe National Capital Region held that the layoff of itsproject employees was lawful. Deputy Minister Inciong

in TFU Case No. 1530, In Re Sandoval Shipyards, Inc. Application for Clearance to Terminate Employees,rendered the following ruling on February 26, 1979;

We feel that there is merit in thecontention of the applicant corporation.To our mind, the employment of theemployees concerned were fixed for aspecific project or undertaking.For thenature of the business the corporationis engaged into is one which will notallow it to employ workers for anindefinite period .

It is significant to note that thecorporation does not construct vesselsfor sale or otherwise which will demandcontinuous productions of ships andwill need permanent or regularworkers. It merely accepts contracts forshipbuilding or for repair of vesselsform third parties and, only, onoccasion when it has work contract ofthis nature that it hires workers to dothe job which, needless to say, lastsonly for less than a year or longer.

The completion of their work or projectautomatically terminates their

employment, in which case, theemployer is, under the law, onlyobliged to render a report on thetermination of the employment. (139-140, Rollo of G.R. No. 65689)(Emphasis supplied)

In Cartagenas, et al . vs. Romago Electric Company, Inc ., etal .,

13 we likewise held that:

As an electrical contractor, the private respondendepends for its business on the contracts it is able toobtain from real estate developers and builders ofbuildings. Since its work depends on the availability ofsuch contracts or "projects," necessarily the duration othe employment's of this work force is not permanentbut co-terminus with the projects to which they are

assigned and from whose payrolls they are paid. Iwould be extremely burdensome for their employewho, like them, depends on the availability of projectsif it would have to carry them as permanent employeesand pay them wages even if there are no projects forthem to work on. (Emphasis supplied.)

It must be stressed herein that although petitioner workedwith Philnor as a driver for eight years, the fact that hisservices were rendered only for a particular project which tookthat same period of time to complete categorizes him as aproject employee. Petitioner was employed for one specificproject.

A non-project employee is different in that the employee ishired for more than one project. A non-project employee, visa-vis a project employee, is best exemplified in the caseof Fegurin, et al . vs. National Labor Relations Commission, eal .

14 wherein four of the petitioners had been working with the

company for nine years, one for eight years, another for sixyears, the shortest term being three years. In holding thapetitioners are regular employees, this Court thereinexplained:

Considering the nature of the work of petitioners, thaof carpenter, laborer or mason, their respective jobswould actually be continuous and on-going. When aproject to which they are individually assigned iscompleted, they would be assigned to the next projec

or a phase thereof. In other words, they belonged to a"work pool" from which the company would drawworkers for assignment to other projects at itsdiscretion. They are, therefore, actually "non-projecemployees."

From the foregoing, it is clear that petitioner is a projecemployee considering that he does not belong to a "workpool" from which the company would draw workers foassignment to other projects at its discretion. It is likewiseapparent from the facts obtaining herein that petitioner wasutilized only for one particular project, the MNEE Stage 2Project of respondent company. Hence, the termination oherein petitioner is valid by reason of the completion of the

project and the expiration of his employment contract.

3. Anent the claim for overtime compensation, we hold thapetitioner is entitled to the same. The fact that he picks upemployees of Philnor at certain specified points along EDSAin going to the project site and drops them off at the samepoints on his way back from the field office going home toMarikina, Metro Manila is not merely incidental to petitioner's

job as a driver. On the contrary, said transportationarrangement had been adopted, not so much for the




25 | P a g e

convenience of the employees, but primarily for the benefit ofthe employer, herein private respondent. This fact is inevitablydeducible from the Memorandum of respondent company:

The herein Respondent resorted to the above transportarrangement because from its previous projectconstruction supervision experiences, Respondent

found out that project delays and inefficiencies resultedfrom employees' tardiness; and that the problem oftardiness, in turn, was aggravated by transportationproblems, which varied in degrees in proportion to thedistance between the project site and the employees'residence. In view of this lesson from experience, andas a practical, if expensive, solution to employees'tardiness and its concomitant problems, Respondentadopted the policy of allowing certain employees — notnecessarily project drivers — to bring home projectvehicles, so that employees could be afforded fast,convenient and free transportation to and from theproject field office. . . .

15

Private respondent does not hesitate to admit that it is usuallythe project driver who is tasked with picking up or dropping offhis fellow employees. Proof thereof is the undisputed fact thatwhen petitioner is absent, another driver is supposed toreplace him and drive the vehicle and likewise pick up and/ordrop off the other employees at the designated points onEDSA. If driving these employees to and from the project siteis not really part of petitioner's job, then there would havebeen no need to find a replacement driver to fetch theseemployees. But since the assigned task of fetching anddelivering employees is indispensable and consequentlymandatory, then the time required of and used by petitioner ingoing from his residence to the field office and back, that is,from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00p.m., which the labor arbiter rounded off as averaging three

hours each working day, should be paid as overtime work.Quintessentially, petitioner should be given overtime pay forthe three excess hours of work performed during workingdays from January, 1983 to December, 1985.

WHEREFORE, subject to the modification regarding theaward of overtime pay to herein petitioner, the decisionappealed from is AFFIRMED in all other respects.SO ORDERED.Melencio-Herrera, Paras and Padilla, JJ., concur. Nocon, J., took no part.Footnotes

1 Annex F, Petition; Rollo, 40.2 Rollo, 79-82.3 Ibid ., 61-62.4 Ibid ., 63.

5 NLRC Case NO. RAB-III-5-1738-84, January 28, 1986. Thepetition for certiorari in G.R. No. 73962, assailing the decision inthe aforesaid case, was dismissed for lack of merit by thi s Courtin its resolution of July 2, 1986.6 Ibid ., 64.7 Annex A, Petition; Rollo, 28.8 Philamlife Insurance Co. vs. Bonto-Perez, et al., 170 SCRA 508(1989).9 Arrastre Security Association-TUPAS, et al. vs. Ople, et al., 127SCRA 580 (1984).10 Rollo, 32-33.11 Ibid ., 47.12 136 SCRA 674 (1985).13 177 SCRA 637 (1989).14 120 SCRA 910 (1983).15 Rollo, 195.

FIRST DIVISION

[G.R. No. 100388. December 14, 2000] SOCIAL SECURITY SYSTEM, petit ion er, vs. THE COURT

OF APPEALS and CONCHITAAYALDE,respondents.

D E C I S I O N YNARES-SANTIAGO, J .:

In a petition before the Social Security CommissionMargarita Tana, widow of the late Ignacio Tana, Sr., allegedthat her husband was, before his demise, an employee oConchita Ayalde as a farmhand in the two (2) sugarcaneplantations she owned (known as Hda. No. Audit B-70 locatedin Pontevedra, La Carlota City) and leased from the Universityof the Philippines (known as Hda. Audit B-15-M situated in LaGranja, La Carlota City). She further alleged that Tanaworked continuously six (6) days a week, four (4) weeks amonth, and for twelve (12) months every year betweenJanuary 1961 to April 1979. For his labor, Tana allegedlyreceived a regular salary according to the minimum wage

prevailing at the time. She further alleged that throughout thegiven period, social security contributions, as well asmedicare and employees compensation premiums werededucted from Tana‘s wages. It was only after his death thaMargarita discovered that Tana was never reported focoverage, nor were his contributions/premiums remitted to theSocial Security System (SSS). Consequently, she wasdeprived of the burial grant and pension benefits accruing tothe heirs of Tana had he been reported for coverage.

Hence, she prayed that the Commission issue an ordedirecting:

1. respondents Conchita Ayalde and AnteroMaghari as her administrator to pay thepremium contributions of the deceased IgnacioTana, Sr. and report his name for SSScoverage; and

2. the SSS to grant petitioner Margarita Tana thefuneral and pension benefits due her .

[1]

The SSS, in a petition-in-intervention, revealed thaneither Hda. B-70 nor respondents Ayalde and Maghari wereregistered members-employers of the SSS, andconsequently, Ignacio Tana, Sr. was never registered as amember-employee. Likewise, SSS records reflected thathere was no way of verifying whether the alleged premiumcontributions were remitted since the respondents were noregistered members-employers. Being the agency chargedwith the implementation and enforcement of the provisions of

the Social Security Law, as amended, the SSS asked theCommission‘s leave to intervene in the case.

[2]

In his answer, respondent Antero Maghari raised thedefense that he was a mere employee who was hired as anoverseer of Hda. B-70 sometime during crop years 1964-65 to1971-72, and as such, his job was limited to those defined fohim by the employer which never involved matters relating tothe SSS. Hence, he prayed that the case against him bedismissed for lack of cause of action.

[3]

http://sc.judiciary.gov.ph/jurisprudence/2000/dec2000/100388.htm#_edn1















26 | P a g e

For her part, respondent Ayalde belied the allegationthat Ignacio Tana, Sr. was her employee, admitting only thathe was hired intermittently as an independent contractor toplow, harrow, or burrow Hda. No. Audit B-15-M. Tana usedhis own carabao and other implements, and he followed hisown schedule of work hours. Ayalde further alleged that shenever exercised control over the manner by which Tana

performed his work as an independent contractor. Moreover, Ayalde averred that way back in 1971, the University of thePhilippines had already terminated the lease over Hda. B-15-M and she had since surrendered possession thereof to theUniversity of the Philippines. Consequently, Ignacio Tana, Sr.was no longer hired to work thereon starting in crop year1971-72, while he was never contracted to work in Hda. No.

Audit B-70. She also prayed for the dismissal of the caseconsidering that Ignacio Tana, Sr. was never her employee.

[4]

After hearing both parties, the Social SecurityCommission issued a Resolution on January 28, 1988, thedispositive portion of which reads:

After a careful evaluation of the testimonies of the petitioner

and her witnesses, as well as the testimony of the respondenttogether with her documentary evidences, this Commissionfinds that the late Ignacio Tana was employed by respondentConchita Ayalde from January 1961 to March 1979. Thetestimony of the petitioner which was corroborated by AgatonLibawas and Aurelio Tana, co-workers of the deceasedIgnacio Tana, sufficienty established the latter‘s employmentwith the respondent.

As regards respondent Antero Maghari, he is absolved fromliability because he is a mere employee of Conchita Ayalde.

PREMISES CONSIDERED, this Commission finds and soholds that the late Ignacio Tana had been employed

continuously from January 1961 to March 1979 in Hda. B-70and Hda. B-15-M which are owned and leased, respectively,by respondent Conchita (Concepcion) Ayalde with a salarybased on the Minimum Wage prevailing during hisemployment.

Not having reported the petitioner‘s husband for coveragewith the SSS, respondent Conchita (Concepcion) Ayalde is,therefore, liable for the payment of damages equivalent to thedeath benefits in the amount of P7,067.40 plus the amount ofP750.00 representing funeral benefit or a total of P7,817.40.

Further, the SSS is ordered to pay to the petitioner heraccrued pension covering the period after the 5-year

guaranteed period corresponding to the employer‘s liability.

SO ORDERED.‖[5]

Respondent Ayalde filed a motion forreconsideration

[6]which the Commission denied for lack of

merit in an Order dated November 3, 1988.[7]

Not satisfied with the Commission‘s ruling, Ayaldeappealed to the Court of Appeals, docketed as CA-G.R. SPNo. 16427, raising the following assignment of errors:

IThe Social Security Commission erred in not finding that thereis sufficient evidence to show that:

(a) The deceased Ignacio Tana, Sr. never worked in thefarmland of respondent-appellant situated in Pontevedra, LaCarlota City, otherwise known as Hacienda No. Audit B-70,(Pontevedra B-70 Farm for short), in any capacity, whether asa daily or monthly laborer or as independent contractor;

(b) During the time that respondent-appellant was leasing aportion of the land of the University of the Philippines,otherwise known as Hacienda Audit No. B-15-M, (La GranjaB-15 Farm for short), the deceased Ignacio Tana, Sr. washired thereat on a ‗pakyaw‘ basis, or as an independentcontractor, performing the services of an ‗arador‘ (Plower), forwhich he was proficient, using his own carabao and farmingimplements on his own time and discretion within the perioddemanded by the nature of the job contracted.

IIThe Social Security Commission erred in holding that there isno evidence whatsoever to show that respondent-appellantwas no longer leasing La Granja B-15 Farm.

IIIThe Social Security Commission erred in not holding that thedeceased Ignacio Tana, having been hired as an independentcontractor on ‗pakyaw‘ basis, did not fall within the coverageof the Social Security Law.

[8]

The Court of Appeals rendered judgment in favor orespondent-appellant Conchita Ayalde and dismissed the

claim of petitioner Margarita Tan.The SSS, as intervenor-appellee, filed a Motion fo

Reconsideration, which was denied on the ground that thearguments advanced are ―mere reiterations of issues andarguments already considered and passed upon in thedecision in question which are utterly insufficient to justify amodification or reversal of said decision.‖

[9]

Hence, this petition for review on certiorari on thefollowing assigned errors:

1) The Court of Appeals was in error in ruling thatan employee working under the ― pakyaw ‖system is considered under the law to be anindependent contractor.

2) The Court of Appeals was in error in not givingdue consideration to the fundamental tenet thatdoubts in the interpretation and implementationof labor and social welfare laws should beresolved in favor of labor.

3) The Court of Appeals was in error indisregarding the settled rule that the factualfindings of administrative bodies on matters



























27 | P a g e

within their competence shall not be disturbedby the courts.

4) The Court of Appeals was in error in ruling thateven granting arguendo that Ignacio Tana wasemployed by Conchita Ayalde, suchemployment did not entitle him to compulsorycoverage since he was not paid any regulardaily wage or basic pay and he did not work foran uninterrupted period of at least six months ina year in accordance with Section 8(j) (1) of theSS Law.

The pivotal issue to be resolved in this petition iswhether or not an agricultural laborer who was hired on― pakyaw ‖ basis can be considered an employee entitled tocompulsory coverage and corresponding benefits under theSocial Security Law.

Petitioner, Social Security System (or SSS), argues thatthe deceased Ignacio Tana, Sr., who was hired by Conchita

Ayalde on ― pakyaw ‖ basis to perform specific tasks in hersugarcane plantations, should be considered an employee;

and as such, his heirs are entitled to pension and burialbenefits.

The Court of Appeals, however, ruled otherwise,reversing the ruling of the Social Security Commission anddeclaring that the late Ignacio Tana, Sr. was an independentcontractor, and in the absence of an employer-employeerelationship between Tana and Ayalde, the latter cannot becompelled to pay to his heirs the burial and pension benefitsunder the SS Law.

At the outset, we reiterate the well-settled doctrine thatthe existence of an employer-employee relationship isultimately a question of fact.

[10] And while it is the general rule

that factual issues are not within the province of the Supreme

Court, said rule is not without exception. In cases, such asthis one, where there are conflicting and contradictory findingsof fact, this Court has not hesitated to scrutinize the records todetermine the facts for itself .

[11] Our disquisition of the facts

shall be our guide as to whose findings are supported bysubstantial evidence.

The mandatory coverage under the SSS Law (Republic Act No. 1161, as amended by PD 1202 and PD 1636) ispremised on the existence of an employer-employeerelationship, and Section 8(d) defines an ―employee‖ as ―anyperson who performs services for an employer in which eitheror both mental and physical efforts are used and whoreceives compensation for such services where there is anemployer-employee relationship.‖ The essential elements of

an employer-employee relationship are: (a) the selection andengagement of the employee; (b) the payment of wages; (c)the power of dismissal; and (d) the power of control withregard to the means and methods by which the work is to beaccomplished, with the power of control being the mostdeterminative factor .

[12]

There is no question that Tana was selected and hisservices engaged by either Ayalde herself, or by AnteroMaghari, her overseer. Corollarily, they also held theprerogative of dismissing or terminating Tana‘s

employment. The dispute is in the question of payment owages. Claimant Margarita Tana and her corroboratingwitnesses testified that her husband was paid daily wages― per quincena‖ as well as on ― pakyaw ‖ basis. Ayalde, on theother hand, insists that Tana was paid solely on ― pakyawbasis. To support her claim, she presented payrolls coveringthe period January of 1974 to January of 1976;

[13] and

November of 1978 to May of 1979.

[14]

A careful perusal of the records readily show that theexhibits offered are not complete, and are but a meresampling of payrolls. While the names of the supposedlaborers appear therein, their signatures are nowhere to befound. And while they cover the years 1975, 1976 andportions of 1978 and 1979, they do not cover the 18-yearperiod during which Tana was supposed to have worked in

Ayalde‘s plantations. Also an admitted fact is that theseexhibits only cover Hda. B70, Ayalde having averred that alher records and payrolls for the other plantation (Hda. B-15M) were either destroyed or lost.

[15]

To our mind, these documents are not only sadlylacking, they are also unworthy of credence. The fact thaTana‘s name does not appear in the payrolls for the years1975, 1976 and part of 1978 and 1979, is no proof that he didnot work in Hda. B70 in the years 1961 to 1974, and the restof 1978 and 1979. The veracity of the alleged documents aspayrolls are doubtful considering that the laborers namedtherein never affixed their signatures to show that theyactually received the amounts indicated corresponding to theinames. Moreover, no record was shown pertaining to HdaB-15-M, where Tana was supposed to have worked. Even

Ayalde admitted that she hired Tana as ―arador ‖ andsometimes as laborer during milling in Hda. B-15-M.

[16] In ligh

of her incomplete documentary evidence, Ayalde‘s denial thaTana was her employee in Hda. B-70 or Hda. B-15-M mustfail.

In contrast to Ayalde‘s evidence, or lack thereof, isMargarita Tana‘s positive testimony, corroborated by two (2other witnesses. On the matter of wages, they testified asfollows:

Margarita Tana:

Q. During the employment of your late husband, was he paidany wages?

A. Yes, he was paid.

Q. What was the manner of payment of his salary, was it on―pakyaw‖ or daily basis?

A. Daily basis.

Q. How many times did he receive his salary in a month‘s time?

A. 2 times.

Q. You mean, payday in Hda. B-70 is every 15 days?

A. Yes, sir.

x x x x x x x x x

ATTY. GALVAN:































28 | P a g e

To prove that it is material to the main question because if everthe hacienda maintains complete payrolls of theiremployees, then the burden of proof lies in thepetitioner…..

HEARING OFFICER:

Let the witness answer, if she knows.

WITNESS:

There was no payroll, only pad paper.

ATTY. GALVAN: (continuing)

Q. Were the names of workers of the hacienda all listed in thatpad paper every payday?

A. Yes, we just sign on pad paper because we have no payrollto be signed.

x x x x x x x x x

Q. What do you understand by payroll?

A. Payroll is the list where the whole laborers are listed andreceive their salaries.

Q. And how did that differ from the pad paper which you saidyou signed?

A. There is a difference.

Q. What is the difference?

A. In the payroll, at the end there is a column for signature butin the pad paper, we only sign directly.

Q. Did it contain the amount that you receive?

A. Yes, sir.

Q. And the date corresponding to the payroll pad?

A. I am not sure but it only enumerates our names and then we

were given our salaries.Q. Now, did you have a copy of that?

ATTY. GALVAN:

Objection, Your Honor, it is not the petitioner who had a copy, it isusually the owner because the preparation of the payrolls isdone by the employer who…..

ATTY. UNGCO:

That is why I‘m asking …..

HEARING OFFICER:

Let the witness answer. Objection overruled.

WITNESS:

I don‘t have.

x x x x x x x x x

Q. When you are receiving daily wage of P4.00 how much wasyour quincenal together with your husband?

A. The highest salary I received for my own was P30.00 in onequincena.

Q. What about the salary of your husband, how much?

A. The same.

Q. Was this P30.00 per quincena later on increased?

A. There was an increase because formerly it was P4.00 now itis P8.00.

Q. In 1979 how much was your husband‘s salary per quincena?

A. In one quincena my husband receives P60.00 while I onlyreceive P30.00.

[17]

AGATON LIBAWAS:

Q. During your employment, do you sign payrolls everytime youdraw your salary?

A. We sign on intermediate pad.

Q. You mean, the practice of the hacienda is to have the namesof the laborers receiving that salaries listed on thatintermediate pad?

A. Yes, sir .[18]

AURELIO TANA:

Q. By the way, how many times did you receive your salaries ina month?

A. We receive our wages twice a month that is, every 15 days.

Q. Did you sign payrolls everytime you received your salaries?

A. In the pad paper as substitute payroll.

Q. Do you know if all the workers of the hacienda were listed inthat payrolls?

A. Yes, sir.

Q. Who was in charge in giving your salaries?

A. Antero Maghari.[19]

These witnesses did not waver in their assertion thawhile Tana was hired by Ayalde as an ―arador ‖ on ― pakyawbasis, he was also paid a daily wage which Ayalde‘s overseedisbursed every fifteen (15) days. It is also undisputed thatthey were made to acknowledge receipt of their wages bysigning on sheets of ruled paper, which are different fromthose presented by Ayalde as documentary evidence. In finewe find that the testimonies of Margarita Tana, AgatonLibawas and Aurelio Tana prevail over the incomplete andinconsistent documentary evidence of Ayalde.

In the parallel case of Opulencia Ice Plant and Storagev. NLRC , the petitioners argued that since Manuel P. Esita‘sname does not appear in the payrolls of the company itnecessarily means that he was not an employee. This Courheld:

―Petitioners further argue that ‗complainant miserably failed topresent any documentary evidence to prove hisemployment. There was no timesheet, pay slip and/orpayroll/cash voucher to speak of. Absence of these materialdocuments are necessarily fatal to complainant‘s cause.‘

We do not agree. No particular form of evidence is requiredto prove the existence of an employer-employee
















29 | P a g e

relationship. Any competent and relevant evidence to provethe relationship may be admitted. For, if only documentaryevidence would be required to show that relationship, noscheming employer would ever be brought before the bar of

justice, as no employer would wish to come out with any traceof the illegality he has authored considering that it should takemuch weightier proof to invalidate a written

instrument. Thus, as in this case where the employer-employee relationship between petitioners and Esita wassufficiently proved by testimonial evidence, the absence oftime sheet, time record or payroll has becomeinconsequential.‖

[20] (Underscoring ours)

Clearly, then, the testimonial evidence of the claimantand her witnesses constitute positive and credible evidence ofthe existence of an employer-employee relationship betweenTana and Ayalde. As the employer, the latter is duty-bound tokeep faithful and complete records of her business affairs, notthe least of which would be the salaries of the workers. Andyet, the documents presented have been selective, few andincomplete in substance and content. Consequently, Ayaldehas failed to convince us that, indeed, Tana was not her

employee.

The argument is raised that Tana is an independenentcontractor because he was hired and paid wages on ― pakyaw ‖basis. We find this assertion to be specious for severalreasons.

First, while Tana was sometimes hired as an ―arador ‖ orplower for intermittent periods, he was hired to do other tasksin Ayalde‘s plantations. Ayalde herself admitted as much,although she minimized the extent of Tana‘s labors. On theother hand, the claimant and her witnesses were direct andfirm in their testimonies, to wit:

MARGARITA TANA:

Q. Was your late husband‘s work continuous or not?

A. His work was continuous except on Sundays.

Q. Mrs. Witness, in January 1961, how many days in a weekdid your late husband work?

A. 4 weeks in January 1961.

Q. And how many months for that year did he work?

A. 12 months.

Q. Is this working pattern of your husband, considering that youtestified that he worked continuously, the same allthroughout his employment from 1961 to 1978?

A. Yes, he worked continuously from 1961 to 1978 for 6 days a

week, 4 weeks a month and 12 months each year.

Q. Mrs. Witness, how many months did your husband work in1979 considering that he died in 1979?

A. 3 months.

Q. What was the nature of the work of your late husband from1961 until his death in 1979?

A. Cutting canes, hauling canes with the use of canecarts,plowing, hauling fertilizers, weeding and stubble cleaning.

x x x x x x x x x

Q. Now, the other co-workers of yours, you said they were Agaton Libawas, Narciso Dueñas, Juan Dueñas, and Aurelio Tana, what were their jobs?

A. Hauling canes by the use of bull carts and cuttingcanes. Their works are the same with that of myhusband‘s.

Q. But you mentioned among the duties of your husband as―arador‖ meaning – plowing the fields?

A. Yes, he was also plowing because that is one of hisduties.

[21]

AGATON LIBAWAS:

Q. How about petitioner Margarita Tana and the late IgnacioTana, were they regular workers, or extra workers?

A. They were regular workers.

Q. In your case, Mr. Witness, considering that according to youyou are only a relief worker, please inform the Commissionhow many months each year from 1961 to 1984 did youwork in Hda. B-70 and Hda. B-15M with Conchita Ayalde?

A. During milling season, I worked 2 months, during cultivationif they are short of plowers then they would call me to workfor at least 3 months as a plower.

Q. So, all in all, each year, from 1961 to 1984 your averageworking months in Hda. B-70 and B-15M are 5 monthseach year?

A. Yes, sir.

Q. Mr. Witness, to prove that you have worked there, will youplease inform at least 5 laborers of Hda. B-70 and B-15M oConchita Ayalde?

A. Juan Dueñas, Narciso Dueñas, Aurelio Tana, Ignacio andMargarita Tana.

x x x x x x x x x

Q. Will you please inform the Commission if the deceasedIgnacio Tana which is according to you, was a regularworker of the 2 haciendas, if how many months did he workduring lifetime from 1961 until he died in 1979?

A. His work was continuous.

Q. And by continuous you mean he worked straight 12 monthseach year except in 1979?

A. He worked only for 10 months because the 2 months arealready preparation for cultivation.

x x x x x x x x x

Q. And according to you, in a year‘s time, you worked only forat least 5 months in Hda. B-70 and B-15M, is that correct?

A. Yes.

Q. And during this time that you are working in your ricelandyou will agree with me that you do not know whether thelaborers of this Hda. B-70 and Had B-15M are reallyworking because you are devoting your time in yourriceland, is that correct?

A. I knew because the place of their work is just near my houseit is along the way.












30 | P a g e

Q. How about when the canes are already tall, can you actuallysee the workers in Hda. B-70 and B-15M when you arebusy at your riceland?

A. Yes, because they have to pass in my house.

Q. Is there no other passage in that hacienda except that roadin front of your house?

A. Yes.

Q. Are you sure about that?

A. Yes, I am sure.[22]

AURELIO TANA:

Q. Do you know what is the work of the petitioner during thetime when you were together working in the field?

A. We were working together, like cutting and loading canes,hoeing, weeding, applying fertilizers, digging canals andplowing.

Q. During your employment in the said hacienda where wereyou residing?

A. There inside the hacienda.

Q. What about the petitioner?

A. The same.

Q. How far is your house from the house of the petitioner?

A. About 20 arms-length.

Q. How far is Hda. B-70 from Hda. B-15.

A. It is very near it is divided by the road.

Q. What road are you referring to?

A. Highway road from Barangay Buenavista to La Granja.

Q. During your employment will you please inform theCommission the frequency of work of the late IgnacioTana?

A. 4 weeks a month, 6 days a week, 12 months a year.

Q. Why is it that you are in a position to inform the Commissionabout the period of employment of Ignacio Tana?

A. Because we were together working.[23]

It is indubitable, therefore, that Tana workedcontinuously for Ayalde, not only as ―arador ‖ on ― pakyaw ‖basis, but as a regular farmhand, doing backbreaking jobs for

Ayalde‘s business. There is no shred of evidence to showthat Tana was only a seasonal worker, much less a migrantworker. All witnesses, including Ayalde herself, testified that

Tana and his family resided in the plantation. If he was amere ― pakyaw ‖ worker or independent contractor, then therewould be no reason for Ayalde to allow them to live inside herproperty for free. The only logical explanation is that he wasworking for most part of the year exclusively for Ayalde, inreturn for which the latter gratuitously allowed Tana and hisfamily to reside in her property.

The Court of Appeals, in finding for Ayalde, relied on theclaimant‘s and her witnesses‘ admission that her husbandwas hired as an ―arador ‖ on ― pakyaw ‖ basis, but it failed to

appreciate the rest of their testimonies. Just because he wasfor short periods of time, hired on ― pakyaw ‖ basis does nonecessarily mean that he was not employed to do other tasksfor the remainder of the year. Even Ayalde admitted thaTana did other jobs when he was not hired toplow. Consequently, the conclusion culled from theitestimonies to the effect that Tana was mainly and solely an

―arador ‖ was at best a selective appreciation of portions of theentire evidence. It was the Social Security Commission thatook into consideration all the documentary and testimoniaevidence on record.

Secondly, Ayalde made much ado of her claim thaTana could not be her employee because she exercised nocontrol over his work hours and method of performing his taskas ―arador .‖ It is also an admitted fact that Tana, Jr. used hisown carabao and tools. Thus, she contends that, applyingthe ―control test,‖ Tana was not an employee but anindependent contractor.

A closer scrutiny of the records, however, reveals thawhile Ayalde herself may not have directly imposed on Tanathe manner and methods to follow in performing his tasksshe did exercise control through her overseer.

Be that as it may, the power of control refers merely tothe existence of the power. It is not essential for the employeto actually supervise the performance of duties of theemployee; it is sufficient that the former has a right to wieldthe power .

[24] Certainly, Ayalde, on her own or through he

overseer, wielded the power to hire or dismiss, to check onthe work, be it in progress or quality, of the laborers. As theowner/lessee of the plantations, she possessed the power tocontrol everyone working therein and everything taking placetherein.

Jurisprudence provides other equally importanconsiderations which support the conclusion that Tana was

not an independent contractor. First, Tana cannot be said tobe engaged in a distinct occupation or business. His carabaoand plow may be useful in his livelihood, but he is notindependently engaged in the business of farming oplowing. Second, he had been working exclusively for Ayaldefor eighteen (18) years prior to his demise. Third, there is nodispute that Ayalde was in the business of growing sugarcanein the two plantations for commercial purposes. There is alsono question that plowing or preparing the soil for planting is amajor part of the regular business of Ayalde.

Under the circumstances, the relationship between Ayalde and Tana has more of the attributes of employeremployee than that of an independent contractor hired toperform a specific project. In the case of Dy Keh Beng v

International Labor ,[25]

we cited our long-standing rulingin Sunripe Coconut Products Co. v. Court of IndustriaRelations, to wit:

―When a worker possesses some attributes of an employeeand others of an independent contractor, which make him fallwithin an intermediate area, he may be classified under thecategory of an employee when the economic facts of therelations make it more nearly one of employment than one of




















31 | P a g e

independent business enterprise with respect to the endssought to be accomplished.‖ (Underscoring Ours)

[26]

We find the above-quoted ruling to be applicable in thecase of Tana. There is preponderance of evidence to supportthe conclusion that he was an employee rather than anindependent contractor.

The Court of Appeals also erred when it ruled, on thealternative, that if ever Tana was an employee, he was stillineligible for compulsory coverage because he was not paidany regular daily wage and he did not work for anuninterrupted period of at least six months in a year inaccordance with Section 8(j) (I) of the Social SecurityLaw. There is substantial testimonial evidence to prove thatTana was paid a daily wage, and he worked continuously formost part of the year, even while he was also occasionallycalled on to plow the soil on a ― pakyaw ‖ basis. As a farmlaborer who has worked exclusively for Ayalde for eighteen(18) years, Tana should be entitled to compulsory coverageunder the Social Security Law, whether his service wascontinuous or broken.

Margarita Tana alleged that SSS premiums werededucted from Tana‘s salary, testifying, thus:

Q. Were there deductions from the salaries of your husbandwhile he was employed with the respondent from 1961 to1979?

A. Yes, there were deductions but I do not know because theywere the ones deducting it.

Q. Why do you know that his salaries were deducted for SSSpremiums?

A. Because Antero Maghari asked me and my husband to signSSS papers and he told us that they will take care ofeverything.

Q. How much were the deductions every payday?

A. I do not know how much because our daily wage was onlyP4.00.

[27]

Agaton Libawas, also testified:

Q. Mr. Witness, in your 15-day wages do you notice anydeductions from it?

A. There were deductions and we were informed that it was forSSS.

Q. Mr. Witness, since when were there deductions from yoursalaries?

A. Since 1961.

Q. Up to when?

A. Up to 1979.

Q. Mr. Witness, are you a member of the SSS?

A. No.

Q. How about petitioner, if you know?

A. No, also.

Q. What happened to the deductions did you not ask youremployer?

A. We asked but we were answered that we were beingremitted for our SSS.

Q. Did you not verify?

A. No, because I just relied on their statement.[28]

Ayalde failed to counter these positive assertions. Evenon the assumption that there were no deductions, the factremains that Tana was and should have been covered undethe Social Security Law. The circumstances of hisemployment place him outside the ambit of the exceptionprovided in Section 8(j) of Republic Act No. 1611, asamended by Section 4 of R.A. 2658.

WHEREFORE, in view of all the foregoing, the Decisionof the Court of Appeals in C.A.-G.R. SP No. 16427 and theResolution dated June 14, 1991 are hereby REVERSED andSET ASIDE. The Resolution of the Social SecurityCommission in SSC Case No. 8851 is REINSTATED.

No costs.

SO ORDERED.Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo

JJ., concur.

[1] Petition before SSC Case No. 8851; Original Record, p. 1.

[2] Petition-in-Intervention, Case No. 8851; Original Record, pp. 9-12.

[3] Answer of Antero Maghari, Case No. 8851; Original Record, p. 25.

[4] Answer of Conchita Ayalde, Case No. 8851; Original Record, pp

26-29.[5]

Resolution of SSC; Original Record, pp. 134-135.[6]

Motion for Reconsideration; Original Record, pp. 153-167.[7]

Order of SSC; Original Record, pp. 175-178.[8]

CA Decision promulgated March 14, 1991; Rollo, pp. 34-35.[9]

CA Resolution promulgated June 14, 1991; Rollo, p. 39.[10]

Great Pacific Life Assurance Corp. v . NLRC, 187 SCRA 694

(1990); Santos v. NLRC, 293 SCRA 113 (1998).[11] Arambulo v. CA, 293 SCRA 567 (1998); Jison v. CA, 286 SCRA

495 (1998).[12]

Filipinas Broadcasting Network, Inc. v. NLRC, 287 SCRA 348(1998); Cabalan Pastulan Negrito Labor Association v . NLRC, 241SCRA 643 (1995).[13]

Exhibits ―4‖, ―4- A‖ to ―4-L‖, ―5‖; ―5- A‖ to ―5-J‖; ―7‖, ―7- A‖ to ―7-C(Exhibits for Ayalde).[14]

Exhibits ―8‖; ―9‖; ―9- A‖; ―9-B‖; ―10‖; ―10- A‖ to ―10-F‖ (Exhibits fo Ayalde).[15]

Deposition of Ayalde, January 28, 1986, p. 44 (Exhibits fo Ayalde).[16]

Deposition of Ayalde, January 28, 1986, p. 45.[17]

T.S.N., Margarita Tana, June 13, 1985, pp. 9,11-12, 17.[18]

T.S.N., Agaton Libawas, June 13, 1985, p. 25.[19]

T.S.N., Aurelio Tana, September 30, 1985, pp. 37-38.[20]

Opulencia Ice Plant and Storage v . NLRC, 228 SCRA 473 (1993).[21]

T.S.N., Margarita Tana, June 13, 1985, pp. 8-9; 13.[22] T.S.N., Agaton Libawas, June 13, 1985, pp. 24; 26; 30-31.

[23] T.S.N., Aurelio Tana, September 30, 1985, pp. 37-38.

[24] MAM Realty Dev‘t. Corp. v . NLRC, 244 SCRA 797 (1995).

[25] 90 SCRA 161 (1979).

[26] 83 Phil. 518, 523, L-2009, April 30, 1949.

[27] T.S.N., Margarita Tana, June 13, 1985, p. 17.

[28] T.S.N., Agaton Libawas, September 30, 1985. p. 39.










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Manila

FIRST DIVISION

G.R. No. 161713 August 20, 2008

LEPANTO CONSOLIDATED MININGCOMPANY, petitioner,vs.LEPANTO LOCAL STAFF UNION, respondent.

R E S O L U T I O N

CARPIO, J .:

The Case

Before the Court is a petition for review1 assailing the 22 July

2003 Decision2 and 20 January 2004 Resolution3 of the Courtof Appeals in CA-G.R. SP No. 60644.

The Antecedent Facts

Lepanto Consolidated Mining Company4 (petitioner) is a

domestic mining corporation. Lepanto Local Staff Union(respondent) is the duly certified bargaining agent ofpetitioner's employees occupying staff positions.

On 28 November 1998, petitioner and respondent enteredinto their fourth Collective Bargaining Agreement (4

th CBA) for

the period from 1 July 1998 to 30 June 2000. The 4th CBA

provides:

ARTICLE VIII - NIGHT SHIFT DIFFERENTIAL

Section 3. Night Differential pay. - The Companyshall continue to pay nightshift differential for workduring the first and third shifts to all coveredemployees within the bargaining unit as follows:

For the First Shift (11:00 p.m. to 7:00 a.m.), thedifferential pay will be 20% of the basic rate. For theThird Shift (3:00 p.m. to 11:00 p.m.), the differentialpay will be 15% of the basic rate.

However, for overtime work, which extends beyondthe regular day shift (7:00 a.m. to 3:00 p.m.), there[will] be no night differential pay added before theovertime pay is calculated.

ARTICLE XII - RIGHTS, PRIVILEGES AND OTHERBENEFITS

Section 9. Longevity pay - The company shall granlongevity pay of P30.00 per month effective July 11998 and every year thereafter .

5

On 23 April 2000, respondent filed a complaint with theNational Conciliation and Mediation Board, Cordillera

Administrative Region (NCMB-CAR) alleging that petitione

failed to pay the night shift differential and longevity pay ofrespondent's members as provided in the 4

th CBA. Petitione

and respondent failed to amicably settle the dispute. Theyagreed to submit the issues to Voluntary Arbitrator Norma B

Advincula (Voluntary Arbitrator) for resolution.

The Ruling of the Voluntary Arbitrator

In a Decision dated 26 May 2000,6 the Voluntary Arbitrato

ruled in favor of respondent as follows:

WHEREFORE, foregoing considered, this Officeholds and so orders respondent LepantoConsolidated Mining Corporation (LCMC) to grancomplainant Lepanto Local Staff Union (LLSU) thefollowing benefits:

Longevity pay of P30.00 per month which shall bereckoned form July 1, 1998 and every yeathereafter in consonance with their contract; and

Night shift differential pay of 15% of the basic rate fohours of work rendered beyond 3:00 p.m. for thefollowing shifts: 7:00 A.M. to 4:00 P.M., 7:30 A.M. to4:30 P.M. and 8:00 A.M. to 5:00 P.M. to be reckonedfrom the date of the effectivity of the 4

th CBA which

was on July 1, 1998.

SO ORDERED.7

The Voluntary Arbitrator ruled that petitioner had the legaobligation to pay longevity pay of P30 per month effective 1July 1998. The Voluntary Arbitrator rejected petitioner'scontention that "effective" should be understood as thereckoning period from which the employees start earning theiright to longevity pay, and that the longevity pay should bepaid only on 1 July 1999. The Voluntary Arbitrator ruled that 1July 1998 was the reckoning date that indicated when theamounts due were to be given.

The Voluntary Arbitrator agreed with respondent that surface

workers on the second shift who performed work after 3:00p.m. should be given an additional night shift differential payequivalent to 15% of their basic rate. Interpreting paragraph 3Section 3, Article VIII of the 4

th CBA, the Voluntary Arbitrato

ruled that it only meant that an employee who extends workbeyond the second shift shall receive overtime pay whichshall be computed before the night shift differential pay. Inother words, it excludes the night shift differential in thecomputation of overtime pay.

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33 | P a g e

The Voluntary Arbitrator ruled that the inclusion of paragraph3, Section 3, Article VIII of the 4

th CBA disclosed the intent of

the parties to grant night shift differential benefits toemployees who rendered work beyond the regular day shift.The Voluntary Arbitrator ruled that if the intention wereotherwise, paragraph 3 would have been deleted.

Finally, the Voluntary Arbitrator ruled that the respondent'sclaim for night shift differential arising from the 1

st, 2

nd, and

3rd

CBAs had already prescribed.

Petitioner filed a motion for reconsideration. In her Resolutiondated 5 August 2000,

8 the Voluntary Arbitrator denied the

motion for reconsideration for lack of merit.

Petitioner filed a petition for review before the Court of Appeals.

The Ruling of the Court of Appeals

In its 22 July 2003 Decision, the Court of Appeals affirmed theVoluntary Arbitrator's Decision.

The Court of Appeals ruled that paragraph 3, Section 3, Article VIII was clear and unequivocal. It grants night shiftdifferential pay to employees of the second shift for workrendered beyond their regular day shift. However, the nightshift differential was excluded in the computation of theovertime pay.

The Court of Appeals further ruled that the records of thecase revealed that during the effectivity of the 4

th CBA,

petitioner voluntarily complied with paragraph 3, Section 3, Article VIII by paying night shift differential to employees for

hours worked beyond 3:00 p.m. Petitioner's act disclosed theparties' intent to include employees in the second shift in thepayment of night shift differential. The Court of Appealsrejected petitioner's claim that the payment was due to errorand mere inadvertence on the part of petitioner's accountingemployees. The Court of Appeals noted that the recordsrevealed that petitioner still continued to pay night shiftdifferential for hours worked beyond 3:00 p.m. after theVoluntary Arbitrator rendered the 26 May 2000 Decision.Thus, petitioner is estopped from claiming erroneouspayment.

Petitioner filed a motion for reconsideration. In its 20 January2004 Resolution, the Court of Appeals denied the motion forlack of merit.

Hence, the petition before this Court.

The Issue

The sole issue in this case is whether the Court of Appealserred in affirming the Voluntary Arbitrator's interpretation ofthe 4

th CBA that the employees in the second shift are entitled

to night shift differential.

The Ruling of this Court

The petition has no merit.

The terms and conditions of a collective bargaining contractconstitute the law between the parties.

9 If the terms of the

CBA are clear and have no doubt upon the intention of thecontracting parties, the literal meaning of its stipulation shalprevail.

10

The disputed provision of the 4th CBA provides:

ARTICLE VIII - NIGHT SHIFT DIFFERENTIAL

Section 3. Night Differential pay. - The Companyshall continue to pay nightshift differential for workduring the first and third shifts to all coveredemployees within the bargaining unit as follows:

For the First Shift (11:00 p.m. to 7:00 a.m.), the

differential pay will be 20% of the basic rate. For theThird Shift (3:00 p.m. to 11:00 p.m.), the differentiapay will be 15% of the basic rate.

However, for overtime work, which extends beyond theregular day shift (7:00 a.m. to 3:00 p.m.), there [will] be nonight differential pay added before the overtime pay iscalculated.

There is no question that workers are entitled to night shiftdifferential of 20% of the basic rate for work performed duringthe first shift from 11:00 p.m. to 7:00 a.m. Workers are alsoentitled to night shift differential of 15% of the basic rate forwork performed during the third shift from 3:00 p.m. to 11:00

p.m. The issue is whether workers are entitled to night shifdifferential for work performed beyond the regular day shiftfrom 7:00 a.m. to 3:00 p.m.

We sustain the interpretation of both the Voluntary Arbitratorand the Court of Appeals. The first paragraph of Section 3provides that petitioner shall continue to pay night shifdifferential to workers of the first and third shifts. It does notprovide that workers who performed work beyond the secondshift shall not be entitled to night shift differential. Theinclusion of the third paragraph is not intended to exclude theregular day shift workers from receiving night shift differentiafor work performed beyond 3:00 p.m. It only provides that thenight shift differential pay shall be excluded in the

computation of the overtime pay.

It is settled that in order to ascertain the intention of thecontracting parties, the Voluntary Arbitrator shall principallyconsider their contemporaneous and subsequent acts as welas their negotiating and contractual history and evidence ofpast practices.

11 In this case, the Voluntary Arbitrator and the

Court of Appeals both found that the provision in questionwas contained in the 1

st, 2

nd, and 3

rd CBAs between petitione

and respondent. During the effectivity of the first three CBAspetitioner paid night shift differentials to other workers who




















34 | P a g e

were members of respondent for work performed beyond 3:00p.m. Petitioner also paid night shift differential for workbeyond 3:00 p.m. during the effectivity of the 4

th CBA.

Petitioner alleges that the payment of night shift differential forwork performed beyond 3:00 p.m. during the 4

th CBA was a

mistake on the part of its accounting department. However,the Court of Appeals correctly ruled that petitioner failed to

present any convincing evidence to prove that the paymentwas erroneous. In fact, the Court of Appeals found that evenafter the promulgation of the Voluntary Arbitrator's decisionand while the case was pending appeal, petitioner still paidnight shift differential for work performed beyond 3:00 p.m. Itaffirms the intention of the parties to the CBA to grant nightshift differential for work performed beyond 3:00 p.m.

WHEREFORE, we DENY the petition. We AFFIRM the 22July 2003 Decision and 20 January 2004 Resolution of theCourt of Appeals in CA-G.R. SP No. 60644. Costs againstpetitioner.

SO ORDERED.

ANTONIO T. CARPIO Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief JusticeChairperson

RENATO C. CORONA Associate Justice

ADOLFO S. AZCUNA Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that theconclusions in the above Decision had been reached in consultation before thecase was assigned to the writer of the opinion of the Court's Division.

REYNATO S. PUNO Chief Justice

Footnotes 1 Under Rule 45 of the 1997 Rules of Civil Procedure.

2 Rollo, pp. 46-54. Penned by Associate Justice Ruben T. Reyes

(now a member of this Court) with Associate Justices Elvi John S. Asuncion and Lucas P. Bersamin, concurring.3 Id. at 56.

4 Referred to as Lepanto Consolidated Mining Corporation by the

Voluntary Arbitrator.5 CA rollo, p. 25.

6 Id. at 24-30.

7 Id. at 30.

8 Id. at 31-34.

9 Holy Cross of Davao College, Inc. v. Holy Cross of Davao FacultyUnion-KAMAPI , G.R. No. 156098, 27 June 2005, 461 SCRA 319.10

United Kimberly-Clark Employees Union Philippine TransportGeneral Workers' Organization v. Kimberly-Clark Phils., Inc., G.R.No. 162965, 6 March 2006, 484 SCRA 187.11

Id.

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Labstandlaw - Part 8

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