Professional Documents
Culture Documents
Nadia Marie De Mesa Ellaine Janica Galias Ghyslaine San Andres Jennilyn Tugelida Michelle Yu LLB0202 Far Eastern University Institute of Law
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TABLE OF CONTENTS
G.R. No. 173648. January 16, 2011.....3 Abdul Juahid R. Pigcaulan v. Security and Credit Investigation, Inc. and/or Rene Amby Reyes **CASE DIGEST..11 G.R. No. 190436. January 16, 20113 Norman Yabut v. Manila Electric Company and Manuel M. Lopez **CASE DIGEST..22 G.R. No. 183350. January 18, 2011.24 Prudential Bank (now Bank of the Philippine Islands) v. Antonio S.A. Mauricio, substituted by his legal heirs Maria Fe, Voltaire, Antonio, Jr., Antonio, Earl John, and Francisco Roberto all surnamed Mauricio **CASE DIGEST..38 G.R. No. 177498. January 18, 2011.40 Stolt-Nielsen Transporation Group, Inc., et al. v. Sulpecio Modequillo **CASE DIGEST..48 G.R. No. 185280. January 18, 2011.50 Timoteo H. Sarona v. National Labor Relations Commission, Royale Security Agency, et al. **CASE DIGEST..66 G.R. No. 193484. January 18, 2011.68 Hypte R. Aujero v. Philippine Communications Satellite Corporation **CASE DIGEST..78 G.R. No. 153569. January 24, 2011.80 Lolita S. Concepcion v. Minex Import Corporation/Minerama Corporation, et al. **CASE DIGEST..90 G.R. No. 168120. January 25, 2011.91 Mansion Printing Center and Clement Cheng v. Diosdado Bitara, Jr. **CASE DIGEST..101 G.R. No. 174208. January 25, 2011.102 Jonathan V. Morales v. Harbour Centre Prot Terminal, Inc. **CASE DIGEST..109 G.R. No. 177578. January 25, 2011.110 Magsaysay Maritime Corporation, et al. v. Oberto S. Lobusta **CASE DIGEST..119
FIRST DIVISION
R.
Present: - versus CORONA, C.J., Chairperson, LEONARDO-DE CASTRO, DEL CASTILLO, ABAD, and VILLARAMA, JR., JJ.
SECURITY and CREDIT INVESTIGATION, INC. Promulgated: and/or RENE AMBY REYES , Respondents. January 16, 2012 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- x DECISION DEL CASTILLO, J.: It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer that the burden of proving payment of these claims rests. This Petition for Review on Certiorari[1] assails the February 24, 2006 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 85515, which granted the petition for certiorarifiled therewith, set aside the March 23, 2004[3] and June 14, 2004[4] Resolutions of the National Labor Relations Commission (NLRC), and dismissed the complaint filed by Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit Investigation, Inc. (SCII) and its General Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28, 2006 Resolution[5] denying Canoys and Pigcaulans Motion for Reconsideration.[6] Factual Antecedents Canoy and Pigcaulan were both employed by SCII as security guards and were
Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the
It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as petitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of Non-Forum Shopping was executed by Pigcaulan alone. In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the rules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at should be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the specific figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the form of the handwritten detailed computations which the Labor Arbiter termed as representative daily time records, showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the case instead of outrightly dismissing it. In their Comment,[21] respondents point out that since it was only Pigcaulan who filed the petition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondents submit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of evidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces of evidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and Pigcaulan to discharge their burden to disprove payment.
Also, under the heading Parties, only Pigcaulan is mentioned as petitioner and consistent with this, the body of the petition refers only to a petitioner and never in its plural form petitioners. Aside from the fact that the Verification and Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that the petition was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already become final and executory as to him. Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as he is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed in behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as noncompliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally defective.[24] The court may order its submission or correction, or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true and correct.[25] However, even if it were so, we note that Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping.
The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13th month pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations they submitted which he considered as representative daily time records to substantiate the award of salary differentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment of salaries and benefits. We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan,
However, with respect to the award for holiday pay, service incentive leave pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits. Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work.[30] Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered service for more than a year already. Furthermore, under Presidential Decree No. 851,[31] he should be paid his 13th month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees.[32] SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received their salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, the documents presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of records, pertinent files or similar documents reflecting that the specific claims have been paid. With respect to 13th month pay, SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of proving payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the burden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment.[33] Since SCII failed to provide convincing proof that it has already settled the
Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary awards granted. Such failure, however, should not result in prejudice to the substantial rights of the party. While we disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right, to his holiday pay, service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not correct in dismissing Pigcaulans claims in its entirety. Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within three years from the time the cause of action accrued,[34] Pigcaulan can only demand the amounts due him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter for a detailed computation of the monetary benefits due to him. WHEREFORE, the petition is GRANTED. The Decision dated February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are REVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared ENTITLED to holiday pay and service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000. The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make a detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation Inc. should pay without delay. SO ORDERED.
10
ABDULJUAHID R. PIGCAULAN VS. SECURITY AND CREDIT INVESTIGATION, INC. AND/OR RENE AMBY REYES
Facts Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays. Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other benefits under the law; that the salaries they received were above the statutory minimum wage and the rates provided by the Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30% in addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and 1999. Labor arbiter favored to the Petitioner and NLRC affirmed the decision of the labor arbiter. Respondent appeal to the Court of Appeals set aside the ruling of the NLRC and Labor Arbiter. Hence, the present Petition for Review on Certiorari. Issues I. The Honorable Court of Appeals erred when it dismissed the complaint on mere alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form of decision, instead of remanding the case for reformation of the decision to include the desired detailed computation. II. The Honorable Court of Appeals erred when it [made] complainants suffer the consequences of the alleged non-observance by the Labor Arbiter and NLRC of the prescribed forms of decisions considering that they have complied with all needful acts required to support their claims. III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence of legal and factual [bases] despite attendance of substantial evidence in the records. Ruling The Verification and Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that the petition was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already become final and executory as to him. Canoy failed to show any reasonable cause for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress. The Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time records, as termed by the Labor
11
12
SECOND DIVISION
- versus -
Chairperson, PEREZ, SERENO, REYES, and PERLAS-BERNABE, JJ. Promulgated: January 16, 2012
REYES, J.: Before us is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure which assails the Decision1 dated August 10, 2009 and Resolution2 dated November 26, 2009 of the Court of Appeals (CA) in the case docketed as CA-G.R. SP No. 96789, entitled Manila Electric Company (Meralco) and Manuel M. Lopez v. Norman Yabut and National Labor Relations Commission. The Facts This case stems from a complaint for illegal dismissal and monetary claims filed by herein petitioner Norman Yabut (Yabut) against respondents Manila Electric Company (Meralco) and Meralco officer Manuel M. Lopez (Lopez). The petitioner had worked with Meralco from February 1989 until his dismissal from
13
The offense under Section 7 (3) of Meralco's Company Code on Employee Discipline referred to in the aforequoted notice is with penalty of dismissal on the first offense and is defined as follows:
SECTION 7. Dishonesty. The following acts shall constitute violation of this Section: 3) Directly or indirectly tampering with electric meters or metering installations of the Company or the installation of any device, with the purpose of defrauding the Company.
In the course of the company's investigations, the petitioner presented his sworn statement7 which was executed with the assistance of Jose Tullo, the Chief Steward and Vice President of Meralco's supervisory union First Line Association of Meralco Supervisory Employees (FLAMES). Yabut admitted being the registered customer of Meralco at No. 17
14
In view of these findings, respondent Meralco, through its Senior Assistant Vice President for Human Resources Administration R. A. Sapitula, issued on February 4, 2004 a notice of dismissal10addressed to the petitioner. The notice cites violation of Section 7, paragraph 3 of Meralco's Company Code on Employee Discipline and Article 282 (a), (c), (d) and (e) of the Labor Code of the Philippines as bases for the dismissal. The pertinent
15
Aggrieved by the decision of the management, Yabut filed with the National Labor Relations Commission (NLRC) a complaint11 for illegal dismissal and money claims against Meralco and Lopez. The Ruling of the Labor Arbiter On December 28, 2004, Labor Arbiter Antonio R. Macam rendered his Decision,12 declaring the petitioner illegally dismissed from the service and hence, entitled to reinstatement plus backwages and attorney's fees. The dispositive portion of his decision reads:
WHEREFORE, premises all considered, judgment is hereby rendered, as follows: 1. Declaring the dismissal of complainant as illegal; 2. Ordering respondents to reinstate complainant to his former position without loss of seniority rights and privileges, immediately upon receipt of this decision, either physically or in the payroll, at the option of the respondent; 3. Ordering the respondents to pay complainant his full backwages from date of dismissal up to actual reinstatement, partially computed as follows: Backwages = [P]240,420.00 13th Mo. Pay = 24,042.00 _____________________ Total [P]264,462.00 4. Ordering respondents to pay complainant attorney's fees equivalent to 10% of his monetary award. All other claims are dismissed for lack of merit. SO ORDERED.13
16
The labor arbiter observed that there was no clear and direct evidence to prove that Yabut performed the shunting of his metering installation. Furthermore, the act imputed upon Yabut was not related to the performance of his duties as a Meralco employee, but as a customer of the company's electric business. Finally, it was ruled that Meralco failed to observe the twin requirements of due process in termination cases. The records are bereft of any evidence showing that the petitioner was apprised of the particular acts or omissions for which his dismissal was then sought. Unsatisfied, the respondents appealed from the decision of the labor arbiter to the NLRC.14 The Ruling of the NLRC On March 31, 2006, the NLRC rendered its Resolution15 dismissing the herein respondents' appeal for lack of merit. Subsequently, the NLRC denied for lack of merit the respondents motion for reconsideration via a Resolution16 dated August 28, 2006. This prompted the respondents to file a petition for certiorari with the CA. The Ruling of the CA On August 10, 2009, the CA rendered the now assailed Decision17 reversing the rulings of the NLRC. In finding the petitioner's dismissal lawful, the appellate court attributed unto Yabut authorship of the meter tampering and illegal use of electricity acts which it regarded as serious misconduct. The Court observed:
The Court notes that the meter base is located inside respondent Yabut's premises. Manila Electric Company vs. Court of Appeals said x x x Metro Concast should bear the responsibility for the tampering of the facilities within its compound, which was totally under its supervision and control. Being within its control, any resultant breach in the integrity of the equipment is indeed attributable to it.18 (citation omitted)
The court also ruled that the petitioner's right to due process was not violated, as he was served the required notices and given sufficient opportunity to be heard. In view of these, the CA annulled and set aside the NLRC's resolutions via its decision, the dispositive portion of which reads:
WHEREFORE, the petition is granted. The resolutions dated March 31, 2006 and August 28, 2006 are annulled and set aside. SO ORDERED.19
Yabut's motion for reconsideration was denied by the CA via a Resolution dated November 26, 2009.20 Hence, the present petition. The Issue
17
The requirement for a just cause was satisfied in this case. We note that the petitioner's employment was terminated by the herein respondents for violation of Section 7, par. 3 of Meralco's Company Code on Employee Discipline, and for the existence of just cause under Article 282 (a), (c), (d) and (e) of the Labor Code. The petitioner's violation of the company rules was evident. While he denies any involvement in the installation of the shunting wires which Meralco discovered, it is significant that said SIN 708668501 is registered under his name, and its meter base is situated within the premises of his property. Said meter registered electric consumption during the time his electric service was officially disconnected by Meralco. It was the petitioner and his family who could have benefited from the illegal connection, being the residents of the area covered by the service. His claim that he failed to know or even notice the shunted wires fails to persuade as we consider the meter located in the front of his house, the nature of his work as branch field representative, his long-time employment with Meralco and his familiarity with illegal connections of this kind. The logical conclusion that may be deduced from these attending circumstances is that the petitioner was a party, or at the very least, one who agreed to the installation of the shunted wires, and who also benefited from the illegal connection at the expense of his
18
19
In this case, the acts complained of were clearly work-related because they related to matters the petitioner handled as branch field representative. Taking into account the results of its investigations, Meralco cannot be expected to trust Yabut to properly perform his functions and to meet the demands of his job. His dishonesty, involvement in theft and tampering of electric meters clearly prejudice respondent Meralco, since he failed to perform the duties which he was expected to perform. Considering the foregoing, this Court agrees that there were just causes for the petitioner's dismissal. We emphasize that dismissal of a dishonest employee is to the best interest not only of the management but also of labor. As a measure of self-protection against acts inimical to its interest, a company has the right to dismiss its erring employees. An employer cannot be compelled to continue employing an employee guilty of acts inimical to the employers interest, justifying loss of confidence in him.26 The requirements of procedural due process were satisfied. On the matter of procedural due process, it is well-settled that notice and hearing constitute the essential elements of due process in the dismissal of employees. The employer must furnish the employee with two written notices before termination of employment can be legally effected. The first apprises the employee of the particular acts or omissions for which dismissal is sought. The second informs the employee of the employer's decision to dismiss him. With regard to the requirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held.27 These requirements were satisfied in this case. The first required notice was dated November 3, 2003, sufficiently notifying the petitioner of the particular acts being imputed against him, as well as the applicable law and the company rules considered to have been violated. Notably, in his sworn statement dated November 17, 2003, the petitioner admitted receiving Meralco's notice of investigation dated November 3, 2003, to wit:
37. T. Natanggap mo ba yong notice ng investigation na may petsang November 3, 2003 na personally na ipinadala namin sa iyo sa bahay mo na may numerong 17 Earth St., Meralco Village 8, Batia, Bocaue, Bulacan? S. Opo. 38. T. Ipinapakita ko sa iyo ang isang notice ng investigation na may petsang November 3, 2003 na naka-addressed (sic) sa isang Mr. Norman C. Yabut ng 17 Earth Street, Meralco Village 8, Batia, Bocaue, Bulacan at ang may lagda ay si Atty. J.R.T. Albarico, head ng InvestigationLitigation ng Meralco. Dito sa nasabing notice ay may nakalagay sa ibaba na received by Salvacio (sic) M. Yabut na may kanyang pirma, at nakalagay din ang date na 11/03/03 at ang
20
On November 17, 2003, Meralco conducted a hearing on the charges against the petitioner. During said time, the petitioner was accorded the right to air his side and present his defenses on the charges against him. Significantly, a high-ranking officer of the supervisory union of Meralco assisted him during the said investigation. His sworn statement29 that forms part of the case records even listed the matters that were raised during the investigation. Finally, Meralco served a notice of dismissal dated February 4, 2004 upon the petitioner. Such notice notified the latter of the company's decision to dismiss him from employment on the grounds clearly discussed therein. WHEREFORE, in view of the foregoing, the petition for review on certiorari is hereby DENIED. The assailed Decision dated August 10, 2009 and Resolution dated November 26, 2009 of the CA in CA-G.R. SP No. 96789 are hereby AFFIRMED. SO ORDERED.
21
22
23
FIRST DIVISION
Present: CORONA, C.J., Chairperson, LEONARDO-DE CASTRO, BERSAMIN, DEL CASTILLO, and VILLARAMA, JR., JJ. Promulgated: January 18, 2012
- versus -
ANTONIO S.A. MAURICIO substituted by his legal heirs, MARIA FE, VOLTAIRE, ANTONIO, JR., ANTONILO, EARL JOHN, and FRANCISCO ROBERTO all surnamed MAURICIO, Respondent.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION
VILLARAMA, JR., J.: . Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the January 30, 2008 Decision and June 16, 2008 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 82908. The appellate court ruled that respondent Antonio S.A. Mauricio was illegally dismissed from employment by petitioner Prudential Bank. The antecedent facts of the case are as follows:
24
The dollar checks were eventually returned by their drawee banks for having forged endorsements, alterations to the stated amounts, or being drawn against insufficient funds, among other reasons. Allegedly, upon receipt of the returned checks at the Magallanes Branch, Mauricio debited FXSD No. 221-6, but such debits were made against the uncollected deposits of the Spouses Cruz. Some of the returned checks and USTWs were lodged to accounts receivable because the balance of FXSD No. 221-6 was not sufficient to cover the returned checks. The other returned checks were then covered with the personal checks of the Spouses Cruz and their children. Said personal checks, however, were also returned by the drawee banks. According to the tellers, it was Mauricio who brings the checks to them with the prepared deposit slips for S/A No. 3396. He also received the proceeds of the withdrawals and the difference between the total peso equivalent of the checks and the amount being deposited to S/A No. 3396. When the available tellers machine tapes from March 1 to August 30, 1991 were examined, it was shown that in some instances, cash-in validations on the deposits slips for S/A No. 3396 were effected by the tellers without actual receipt of cash at the time the validations were made. Simultaneously, cash withdrawals were allowed even if S/A No. 3396 did not have sufficient balance to cover the withdrawals at the time they were made. The cash accountability of the tellers will balance only once the encashment of the USTWs were made later in the day. On October 16, 1992, Mauricio was directed to report for work at the Head Office immediately.
25
__ 3,190.58 $347,790.58
In his reply dated November 12, 1992, Mauricio stated that he is exhausting all efforts to get the Spouses Marcelo and Corazon Cruz to settle their obligation immediately and that they have requested the Bank to allow them to fully settle the obligations on or before 31 December 1992. He further stated that he is willing to face an investigation body to explain his side on the matter so he can clear his name and reputation. Incidentally, in the same year, the property subject of the deeds of real estate mortgage was gutted down by fire. The insurer, Rizal Surety Insurance, paid the proceeds of the policy to the Bank. As requested by Mauricio, a Hearing Committee was constituted and several hearings were held starting March 2, 1993. In all the proceedings, Mauricio was duly represented by counsel.
The hearings revolved on the following charges brought against Mauricio: A. VIOLATIONS OF SPECIFIC ORDERS AND MEMORANDUM 1. Violation of Office Order No. 1516 which enjoin approving officers from encashing U.S. Treasury Warrants (USTWs) whenever the presenter is not the payee of the check. x x x 2. Violation of Office Memorandum dated 7 March 1985 re: Any claim/s and/or case/s against the Prudential Bank or where the Bank is involved should be referred immediately to the Head Office, to Dr. Octavio D. Fule, Vice President and Legal Officer, who will take necessary and appropriate action on the said claim/s or case/s. x x x 3. Violation of Office Order No. 1666 re: Prohibition on Drawing against Uncollected Deposit. x x x 4. Violation of Office Order No. 1596 which states that returned items should be lodged to Accounts Receivable when there is no sufficient balance on the ac[c]ount. x x x B. COMMISSION OF IMPRUDENT ACTS PREJUDICIAL TO THE INTERESTS OF THE BANK 1. Concealment of the overdrawing effects of the returned checks on FXSD No. 221[-6], by allowing the depositor to cover the returned checks with other
26
On April 15, 1994, while the investigation against Mauricio was ongoing, the property subject of the deeds of real estate mortgage executed by the Spouses Cruz was extrajudicially foreclosed by the Bank for the amount of P5,660,000. Spouses Cruz, however, sought the
27
On the same day, A. Benedicto L. Santos, Senior Vice President for the Administrative Department of the Bank, issued a Memorandum to Mauricio, informing him of the Boards decision to terminate his employment effective immediately. Said memorandum was received by Mauricio on February 24, 1997. On January 28, 2000, Mauricio filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal with prayer for back wages; retirement and provident benefits; vacation and sick leave credits; and actual, moral and exemplary damages, plus attorneys fees. The parties were enjoined to settle the dispute amicably during the mandatory pre-trial conferences, but to no avail. Thus, they were required to submit their respective position papers and evidence. Mauricio, in his Position Paper, explained the questioned transactions, to wit:
a. No irregularity attended the transactions between the Magallanes Branch and Spouses Marcelo and Corazon Cruz. b. [He] allowed the US Treasury Warrant (USTW) and foreign check transactions with the Spouses Cruz on the premise that: (i) the Spouses were valued clients of the Bank, having been referred by the Banks legal counsel, Atty. Pablo Magno and having substantial deposits and security with the bank, (ii) the Spouses enjoyed a favorable credit
28
c.
d.
e.
f.
g.
The Bank, on the other hand, contended that the dismissal of Mauricio was for a just cause, citing the imprudent acts prejudicial to the banks interest and violations of several office orders and regulations which resulted to loss of trust and confidence on him. It further argued that they complied with the requirements of due process and that complainant was not entitled to payment of separation pay, back wages, retirement pay and provident fund benefits, moral and exemplary damages, and attorneys fees. While the illegal dismissal complaint was awaiting resolution by the Labor Arbiter, the Makati RTC rendered a Decision on September 28, 2000 in favor of the Spouses Cruz and Mauricio. The dispositive portion of the trial courts decision reads:
WHEREFORE, all the foregoing premises considered, judgment is hereby rendered: 1. Annulling the extrajudicial foreclosure sale conducted on April 15, 1994; 2. Ordering defendant to re-account the obligation of the plaintiffs reflecting the credit of the insurance proceeds to the mortgage obligation of the plaintiffs; 3. Dismissing defendants counterclaim and plaintiffs cross-claim for lack of merit. SO ORDERED. (Emphasis supplied.)
Said decision was affirmed in toto on appeal by the CA in a Decision dated February 27, 2004. The Bank filed a petition for review on certiorari before this Court appealing the CA decision, but its petition was denied on the ground that no reversible error was committed by the CA. On June 17, 2002, the labor arbiter rendered a Decision holding that the Bank was justified in terminating Mauricios employment. The labor arbiter ruled that even if Mauricio, as branch manager, was clothed with discretion, he gravely abused it to the detriment and prejudice of
29
The CA ruled that the NLRC should have taken into consideration the evidence presented in the civil case particularly as to the interpretation of Office Order No. 1516-A. The CA held that as correctly pointed out by Mauricio, the rule does not exactly prohibit an approving authority from encashing dubious checks as the rule is more permissive in nature, allowing any such approving authority to exercise discretion on whether to allow or not the encashment of such checks. The CA noted that it was the Banks own witness, Andres Mangahas, who testified that encashment of, or withdrawal against USTWs by valued clients, is not prohibited although it is not exactly encouraged. The CA further held that it is difficult to conclude that Mauricio abused his discretion absent some semblance of parameters by which such discretion is to be exercised. In the absence of such guidelines, the appellate court ruled that the validity of Mauricios acts may be tested using the accepted standards of reasonableness, or by determining whether said acts were justified under the circumstances. The appellate court also cited the decisions of the RTC and the CA in the civil case where it was found that Mauricio was not in any way prompted by malicious motive in approving the encashment and/or withdrawal. Caught in a dilemma of cashing the checks despite the irregularities evident on their face and refusing such encashment but risk the possibility of losing a valued client, Mauricio chose the former. The CA held that in doing so, Mauricio could not have acted in gross negligence because he made sure that in the final analysis, his employer would not be left holding an empty bag. Mauricio even sought the advice of the banks legal counsel who assured him that his actions were proper given the circumstances, and acted only after being assured that the Spouses Cruzs real estate mortgages could be made to answer for the premature encashments.
30
31
Considering that it is merely a cautionary measure, the bank officer is still given the prerogative to exercise his sound judgment under the circumstances. Mauricio likewise contends that the Bank cannot feign ignorance of the accommodation to the Spouses Cruz as all the subject transactions were reported to the Head Office. Had it found anything irregular about them, the Head Office should have ordered him to cease from doing such transactions or at the very least called his attention on the matter. Mauricio further argues that as testified in the civil case, USTWs are presumed to be cleared as to funding, within forty-five (45) days from its date of deposit. By the Banks own admission, they were returned only at the very least over one (1) year after they were deposited to the accounts of the Spouses Cruz. Thus, Mauricio contends that until the time
32
33
The doctrine of res judicata thus lays down two main rules which may be stated as follows: (1) The judgment or decree of a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a bar to a new action or suit involving the same cause of action either before the same or any other tribunal; and (2) Any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether the claim or demand, purpose, or subject matter of the two suits is the same or not. These two main rules mark the distinction between the principles governing the two typical cases in which a judgment may operate as evidence. In speaking of these cases, the first general rule above stated, and which corresponds to the aforequoted paragraph (b) of Section 47, is referred to as bar by former judgment while the second general rule, which is embodied in paragraph (c) of the same section, is known as conclusiveness of judgment. In Lopez v. Reyes, we further elaborated the distinction between the two:
The doctrine of res judicata has two aspects. The first is the effect of a judgment as a bar to the prosecution of a second action upon the same claim, demand or cause of action. The second aspect is that it precludes the relitigation of a particular fact or issues in another action between the same parties on a different claim or cause of action. The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in [a] former action [is] commonly applied to all matters essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties, and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself. x x x (Italics supplied.)
The foregoing finds application to the instant case. Irrefutably, the present labor case is closely related to the civil case that was decided with finality. In the civil case, the Banks counterclaim for actual and exemplary damages against Mauricio was grounded on his alleged violations of office policies when he allowed the encashment and/or withdrawal prior to clearing of numerous USTWs and dollar checks and allegedly tried concealing from the Bank the fact that said instruments were returned. Said violations allegedly caused undue damage and prejudice to the Bank. The Bank, in its Amended Answer with Counterclaim
34
The RTC, however, did not give merit to the above-quoted allegations of the Bank and absolved Mauricio from liability. The RTC ruled:
Further, this court finds that PRUDENTIALs branch manager MAURICIOs act of allowing SPOUSES CRUZ to immediately withdraw [the] above instruments is well within his functions as a branch manager. A person occupying such position exercises a certain degree of discretion with respect to the accommodations extended [to] certain valued clients such as herein plaintiffs SPOUSES CRUZ. Having been recommended by the legal counsel himself of PRUDENTIAL and in view of the fact that they have substantial deposit with the same bank, it cannot be doubted that SPOUSES CRUZ were valued clients. (TSN dated 8, November 1999 p. 14; TSN dated 27 January 1999, p. 10; and TSN dated 12 January 2000, pp. 7-10)[.] Further, as testified to by Andres Mangahas, witness of PRUDENTIAL, encashment of and/or withdrawal against US Treasury Warrants by valued client is not prohibited though it is not exactly encouraged. (TSN dated 27 January 1999, p. 10) This court moreover holds that MAURICIO was not in anyway prompted by any malicious motive in approving the encashment and/or withdrawal; he not only tried to collect from herein plaintiffs SPOUSES CRUZ, (Exhibit 8 Mauricio) he made sure that worst comes to worst, the withdrawals were covered (TSN dated 8 November 1999, p. 95) and that all the transactions were reported to the head office. (TSN dated 8 November 1999, pp. 17-18) In fact, before MAURICIO allowed the encashment of the dollar checks and as testified by SPOUSES CRUZ, a condition was imposed. (TSN dated 22 July 1998, pp. 10-13) So, if indeed such transaction was irregular or worse, prohibited, the Head Office of PRUDENTIAL should have immediately called MAURICIOs attention to the same. Instead, PRUDENTIAL continued to credit the account of the spouses for the value of the returned checks. (Emphasis supplied.)
35
The above company directive is an explicit admission that Mauricio was clothed with such discretion to enter into the questioned transactions as well as a forewarning that in case the
36
37
PRUDENTIAL BANK (now BPI), vs. ANTONIO S.A. MAURICIO substituted by his legal heirs
Facts Mauricio was hired by Prudential Bank on August 17, 1960. He was the Branch Manager of Prudential Banks Magallanes Branch in Makati City when he was dismissed from employment. Mauricio as branch manager made several transactions in behalf of Spouses Cruz. While Spouses Cruz executed in favor of the Bank a Deed of Real Estate Mortgage over their property in San Juan, Metro Manila. An audit investigation was conducted in the Magallanes Branch, later Prudential Bank President Santos issued a Memo to Mauricio furnishing him with a copy of the audit teams report and directing him to report in writing within 72hours from receipt of the memo why the bank should not institute an action against him. The report showed that the bank was exposed to losses amounting to $774,561.58. A Hearing Committee was constituted and several hearings were held. While the investigation against Mauricio was ongoing, the property subject of the deeds of real estate mortgage executed by the Spouses Cruz was extrajudicially foreclosed by the Bank. Spouses Cruz, however, sought the annulment and/or declaration of nullity of foreclosure. The Bank filed an Amended Answer to implead Mauricio in its counterclaim contending that he conspired and confederated with the Spouses Cruz to commit the fraud. Subsequently, the Banks investigation on Mauricio was terminated. A.B. Santos, Senior Vice President for the Administrative Department of the Bank, issued a Memo to Mauricio, informing him of the Boards decision to terminate his employment effective immediately. Said memo was received by Mauricio on February 24, 1997. On January 28, 2000, Mauricio filed with the NLRC a complaint for illegal dismissal with prayer for back wages; retirement and provident benefits; vacation and sick leave credits; and actual, moral and exemplary damages, plus attorneys fees. The labor arbiter rendered a Decision holding that the Bank was justified in terminating Mauricios employment. However, the labor arbiter nonetheless ordered the bank to pay Mauricio his 13th month pay and sick leaves. Mauricio filed a partial appeal of the labor arbiters decision with the NLRC, which, however, affirmed the labor arbiters decision on August 29, 2003. Upon recourse to the CA, the CA set aside the NLRC decision and ruled in favor of Mauricio. Aggrieved, the Bank filed the instant petition. Issue Whether or not Mauricio was dismissed illegally, thus entitled to back wages, allowance, benefits, etc. Held Yes, based on the doctrine of res judicata. The present labor case is closely related to the civil case that was decided with finality. In the civil case, the Banks counterclaim for actual and exemplary damages against Mauricio was grounded on his alleged violations of office policies when he allowed the encashment and/or withdrawal prior to clearing of numerous USTWs and dollar checks and allegedly tried concealing from the Bank the fact that said instruments were returned. Said violations allegedly caused undue damage and prejudice to the Bank. The RTC, however, did not give merit to the above-quoted allegations of the Bank and absolved Mauricio from liability. As mentioned above, the above findings were affirmed not only by the CA but also by this Court. Undeniably, the acts and omissions alleged by the Bank in the civil case as basis of its counterclaim against Mauricio, are the very same acts and omissions which were used as grounds to terminate his employment.
38
39
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP MANAGEMENT, Petitioners,
G.R. No. 177498 Present: CARPIO, J., Chairperson, PEREZ, SERENO, REYES, and PERLAS-BERNABE, JJ.* Promulgated:
-versus-
x------------------------------------------------x DECISION
PEREZ, J.: Before the Court is a Petition for Review on Certiorari1 of the Decision2 of the First Division of the Court of Appeals in CA-G.R. SP No. 91632 dated 31 January 2007, denying the petition for certiorari filed by Stolt-Nielsen Transportation Group, Inc. and Chung Gai Ship Management (petitioners) and affirming the Resolution of the National Labor Relations Commission (NLRC). The dispositive portion of the assailed decision reads:
WHEREFORE, the petition is hereby DENIED. Accordingly, the assailed Decision promulgated on February 28, 2003 and the Resolution dated July 27, 2005 are AFFIRMED.3
The facts as gathered by this Court follow: On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the Adjudication Office of the Philippine Overseas Employment Administration (POEA) against
40
41
1.
The Labor Arbiter found the first contract entered into by and between the complainant and the respondents to have been novated by the execution of the second contract. In other words, respondents cannot be held liable for the first contract but are clearly and definitely liable for the breach of the second contract.8 However, he ruled that there was no substantial evidence to grant the prayer for moral and exemplary damages.9 The petitioners appealed the adverse decision before the National Labor Relations Commission assailing that they were denied due process, that the respondent cannot be considered as dismissed from employment because he was not even deployed yet and the monetary award in favor of the respondent was exorbitant and not in accordance with law.10 On 28 February 2003, the NLRC affirmed with modification the Decision of the Labor Arbiter. The dispositive portion reads:
WHEREFORE, premises considered, the decision under review is hereby, MODIFIED BY DELETING the award of overtime pay in the total amount of Three Thousand Six Hundred Thirty Six US Dollars (US $3,636.00). In all other respects, the assailed decision so stands as, AFFIRMED. 11
Before the NLRC, the petitioners assailed that they were not properly notified of the hearings that were conducted before the Labor Arbiter. They further alleged that after the suspension of proceedings before the POEA, the only notice they received was a copy of the decision of the Labor Arbiter.12 The NLRC ruled that records showed that attempts to serve the various notices of hearing were made on petitioners counsel on record but these failed on account of their failure to furnish the Office of the Labor Arbiter a copy of any notice of change of address. There was also no evidence that a service of notice of change of address was served on the POEA.13 The NLRC upheld the finding of unjustified termination of contract for failure on the part of the petitioners to present evidence that would justify their non-deployment of the respondent.14 It denied the claim of the petitioners that the monetary award should be limited only to three (3) months for every year of the unexpired term of the contract. It ruled that the factual incidents material to the case transpired within 1991-1992 or before the effectivity of Republic Act No. 8042 or the Migrant Workers and Overseas Filipinos Act of 1995 which provides for such limitation.15 However, the NLRC upheld the reduction of the monetary award with respect to the deletion of the overtime pay due to the non-deployment of the respondent.16 The Partial Motion for Reconsideration filed by the petitioners was denied by the NLRC in its Resolution dated 27 July 2005.17
42
43
This ruling was later affirmed by the Court of Appeals in its decision ruling that:
Guided by the foregoing legal precepts, it is evident that novation took place in this particular case. The parties impliedly extinguished the first contract by agreeing to enter into the second contract to placate Medequillo, Jr. who was unexpectedly dismissed and repatriated to Manila. The second contract would not have been necessary if the petitioners abided by the terms and conditions of Madequillo, Jr.s employment under the first contract. The records also reveal that the 2nd contract extinguished the first contract by changing its object or principal. These contracts were for overseas employment aboard different vessels. The first contract was for employment aboard the MV Stolt Aspiration while the second contract involved working in another vessel, the MV Stolt Pride. Petitioners and Madequillo, Jr. accepted the terms and conditions of the second contract. Contrary to petitioners assertion, the first contract was a previous valid contract since it had not yet been terminated at the time of Medequillo, Jr.s repatriation to Manila. The legality of his dismissal had not yet been resolved with finality. Undoubtedly, he was still employed under the first contract when he negotiated with petitioners on the second contract. As such, the NLRC correctly ruled that petitioners could only be held liable under the second contract.21
We concur with the finding that there was a novation of the first employment contract. We reiterate once more and emphasize the ruling in Reyes v. National Labor Relations Commission,22 to wit:
x x x [F]indings of quasi-judicial bodies like the NLRC, and affirmed by the Court of Appeals in due course, are conclusive on this Court, which is not a trier of facts. xxxx x x x Findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals. Such findings deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed.(Emphasis supplied)23
With the finding that respondent was still employed under the first contract when he negotiated with petitioners on the second contract,24 novation became an unavoidable conclusion.
44
The issue that proceeds from the fact of novation is the consequence of the non-deployment of respondent. The petitioners argue that under the POEA Contract, actual deployment of the seafarer is a suspensive condition for the commencement of the employment.28 We agree with petitioners on such point. However, even without actual deployment, the perfected contract gives rise to obligations on the part of petitioners. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.29 The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.30 The POEA Standard Employment Contract provides that employment shall commence upon the actual departure of the seafarer from the airport or seaport in the port of hire.31 We adhere to the terms and conditions of the contract so as to credit the valid prior stipulations of the parties before the controversy started. Else, the obligatory force of every contract will be useless. Parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.32 Thus, even if by the standard contract employment commences only upon actual departure of the seafarer, this does not mean that the seafarer has no remedy in case of nondeployment without any valid reason. Parenthetically, the contention of the petitioners of the alleged poor performance of respondent while on board the first ship MV Stolt Aspiration
45
The appellate court correctly ruled that the penalty of reprimand36 provided under Rule IV, Part VI of the POEA Rules and Regulations Governing the Recruitment and Employment of Land-based Overseas Workers is not applicable in this case. The breach of contract happened on February 1992 and the law applicable at that time was the 1991 POEA Rules and Regulations Governing Overseas Employment. The penalty for non-deployment as discussed is suspension or cancellation of license or fine. Now, the question to be dealt with is how will the seafarer be compensated by reason of the unreasonable non-deployment of the petitioners? The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide for the award of damages to be given in favor of the employees. The claim provided by the same law refers to a valid contractual claim for compensation or benefits arising from employer-employee relationship or for any personal injury, illness or death at levels provided for within the terms and conditions of employment of seafarers. However, the absence of the POEA Rules with regard to the payment of damages to the affected seafarer does not mean
46
Following the law, the claim is still cognizable by the labor arbiters of the NLRC under the second phrase of the provision. Applying the rules on actual damages, Article 2199 of the New Civil Code provides that one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved. Respondent is thus liable to pay petitioner actual damages in the form of the loss of nine (9) months worth of salary as provided in the contract.38 This is but proper because of the non-deployment of respondent without just cause. WHEREFORE, the appeal is DENIED. The 31 January 2007 Decision of the Court of Appeals in CA-G.R. SP. No. 91632 is hereby AFFIRMED. The Petitioners are hereby ordered to pay Sulpecio Medequillo, Jr., the award of actual damages equivalent to his salary for nine (9) months as provided by the Second Employment Contract. SO ORDERED.
47
STOLT-NIELSEN TRANSPORTATION GROUP, INC. AND CHUNG GAI SHIP MANAGEMENT, vs. SULPECIO MEDEQUILLO, JR.
Facts Madequillo filed a complaint before the Adjudication Office of the POEA against StoltNielsen for illegal dismissal under a first contract and for failure to deploy under a second contract. In his complaint-affidavit, respondent alleged that he was hired by Stolt-Nielsen Marine Services, Inc as Third Assistant Engineer on board the vessel Stolt Aspiration for a period of 9 months. For nearly 3 months of rendering service and while the vessel was at Batangas, he was ordered by the ships master to disembark the vessel and repatriated back to Manila for no reason or explanation. Upon his return to Manila, he immediately proceeded to the petitioners office where he was transferred employment with another vessel named MV Stolt Pride under the same terms and conditions of the First Contract. On 23 April 1992, the Second Contract was noted and approved by the POEA. The POEA, without knowledge that he was not deployed with the vessel, certified the Second Employment Contract on 18 September 1992. Despite the commencement of the Second Contract on 21 April 1992, petitioners failed to deploy him with the vessel MV Stolt Pride. He made a follow-up with the petitioner but the same refused to comply with the Second Employment Contract. On 22 December 1994, he demanded for his passport, seamans book and other employment documents. However, he was only allowed to claim the said documents in exchange of his signing a document. He was constrained to sign the document involuntarily because without these documents, he could not seek employment from other agencies. He prayed for actual, moral and exemplary damages as well as attorneys fees for his illegal dismissal and in view of the Petitioners bad faith in not complying with the Second Contract. The case was transferred to the Labor Arbiter of the DOLE. Labor Arbiter rendered a judgment finding that the Medequillo was constructively dismissed. The petitioners appealed the adverse decision before the NLRC. The NLRC affirmed with modification the Decision of the Labor Arbiter, by deleting the award of overtime pay. The Partial Motion for Reconsideration filed by the petitioners was denied by the NLRC in its Resolution dated 27 July 2005. The petitioners filed a Petition for Certiorari before the Court of Appeals, however the CA affirmed the decision of the NLRC. Issue Whether or not Medequillo is entitled to compensation when he was not yet employed or deployed Held Yes. The agency argues that under the POEA Contract, actual deployment of the seafarer is a suspensive condition for the commencement of the employment. However, even without actual deployment, the perfected contract gives rise to obligations on the part of petitioners. The POEA Standard Employment Contract provides that employment shall commence upon the actual departure of the seafarer from the airport or seaport in the port of hire. However, this does not mean that the seafarer has no remedy in case of non-deployment without any valid reason. Parenthetically, the contention of the agency of the alleged poor performance of respondent while on board the first ship MV Stolt Aspiration cannot be sustained to justify the non-deployment, for no evidence to prove the same was presented. We rule that distinction must be made between the perfection of the employment contract and the commencement of the employer-employee relationship. The commencement of the employeremployee relationship, would have taken place had petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the
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SECOND DIVISION
G.R. No. 185280 Present: CARPIO, J., Chairperson, PEREZ, SERENO, REYES, and BERNABE, JJ.
- versus -
NATIONAL LABOR RELATIONS COMMISSION, ROYALE SECURITY AGENCY (FORMERLY SCEPTRE SECURITY AGENCY) and CESAR S. TAN, Respondents.
x-----------------------------------------------------------------------------------------x DECISION REYES, J.: This is a petition for review under Rule 45 of the Rules of Court from the May 29, 2008 Decision1 of the Twentieth Division of the Court of Appeals (CA) in CA-G.R. SP No. 02127 entitled Timoteo H. Sarona v. National Labor Relations Commission, Royale Security Agency (formerly Sceptre Security Agency) and Cesar S. Tan (Assailed Decision), which affirmed the National Labor Relations Commissions (NLRC) November 30, 2005 Decision and January 31, 2006 Resolution, finding the petitioner illegally dismissed but limiting the amount of his backwages to three (3) monthly salaries. The CA likewise affirmed the NLRCs finding that the petitioners separation pay should be computed only on the basis of his length of service with respondent Royale Security Agency (Royale). The CA held that absent any showing that Royale is a mere alter ego of Sceptre Security Agency (Sceptre), Royale cannot be compelled to recognize the petitioners tenure with Sceptre. The dispositive portion of the CAs Assailed Decision states:
WHEREFORE, in view of the foregoing, the instant petition is PARTLY GRANTED, though piercing of the corporate veil is hereby denied for lack of merit.
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Factual Antecedents On June 20, 2003, the petitioner, who was hired by Sceptre as a security guard sometime in April 1976, was asked by Karen Therese Tan (Karen), Sceptres Operation Manager, to submit a resignation letter as the same was supposedly required for applying for a position at Royale. The petitioner was also asked to fill up Royales employment application form, which was handed to him by Royales General Manager, respondent Cesar Antonio Tan II (Cesar).3 After several weeks of being in floating status, Royales Security Officer, Martin Gono (Martin), assigned the petitioner at Highlight Metal Craft, Inc. (Highlight Metal) from July 29, 2003 to August 8, 2003. Thereafter, the petitioner was transferred and assigned to Wide Wide World Express, Inc. (WWWE, Inc.). During his assignment at Highlight Metal, the petitioner used the patches and agency cloths of Sceptre and it was only when he was posted at WWWE, Inc. that he started using those of Royale.4 On September 17, 2003, the petitioner was informed that his assignment at WWWE, Inc. had been withdrawn because Royale had allegedly been replaced by another security agency. The petitioner, however, shortly discovered thereafter that Royale was never replaced as WWWE, Inc.s security agency. When he placed a call at WWWE, Inc., he learned that his fellow security guard was not relieved from his post.5 On September 21, 2003, the petitioner was once again assigned at Highlight Metal, albeit for a short period from September 22, 2003 to September 30, 2003. Subsequently, when the petitioner reported at Royales office on October 1, 2003, Martin informed him that he would no longer be given any assignment per the instructions of Aida Sabalones-Tan (Aida), general manager of Sceptre. This prompted him to file a complaint for illegal dismissal on October 4, 2003.6 In his May 11, 2005 Decision, Labor Arbiter Jose Gutierrez (LA Gutierrez) ruled in the petitioners favor and found him illegally dismissed. For being unsubstantiated, LA Gutierrez denied credence to the respondents claim that the termination of the petitioners employment relationship with Royale was on his accord following his alleged employment in another company. That the petitioner was no longer interested in being an employee of Royale cannot be presumed from his request for a certificate of employment, a claim which, to begin with, he vehemently denies. Allegation of the petitioners abandonment is negated by his filing of a complaint for illegal dismissal three (3) days after he was informed that he would no longer be given any assignments. LA Gutierrez ruled:
In short, respondent wanted to impress before us that complainant abandoned his employment. We are not however, convinced.
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Aside from lack of proof showing that complainant has abandoned his employment, the record would show that immediate action was taken in order to protest his dismissal from employment. He filed a complaint [for] illegal dismissal on October 4, 2004 or three (3) days after he was dismissed. This act, as declared by the Supreme Court is inconsistent with abandonment, as held in the case of Pampanga Sugar Development Co., Inc. vs. NLRC, 272 SCRA 737 where the Supreme Court ruled:
The immediate filing of a complaint for [i]llegal [d]ismissal by an employee is inconsistent with abandonment.7
The respondents were ordered to pay the petitioner backwages, which LA Gutierrez computed from the day he was dismissed, or on October 1, 2003, up to the promulgation of his Decision on May 11, 2005. In lieu of reinstatement, the respondents were ordered to pay the petitioner separation pay equivalent to his one (1) month salary in consideration of his tenure with Royale, which lasted for only one (1) month and three (3) days. In this regard, LA Gutierrez refused to pierce Royales corporate veil for purposes of factoring the petitioners length of service with Sceptre in the computation of his separation pay. LA Gutierrez ruled that Royales corporate personality, which is separate and distinct from that of Sceptre, a sole proprietorship owned by the late Roso Sabalones (Roso) and later, Aida, cannot be pierced absent clear and convincing evidence that Sceptre and Royale share the same stockholders and incorporators and that Sceptre has complete control and dominion over the finances and business affairs of Royale. Specifically:
To support its prayer of piercing the veil of corporate entity of respondent Royale, complainant avers that respondent Royal (sic) was using the very same office of SCEPTRE in C. Padilla St., Cebu City. In addition, all officers and staff of SCEPTRE are now the same officers and staff of ROYALE, that all [the] properties of SCEPTRE are now being owned by ROYALE and that ROYALE is now occupying the property of SCEPTRE. We are not however, persuaded.
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The respondents appealed LA Gutierrezs May 11, 2005 Decision to the NLRC, claiming that the finding of illegal dismissal was attended with grave abuse of discretion. This appeal was, however, dismissed by the NLRC in its November 30, 2005 Decision,9 the dispositive portion of which states:
WHEREFORE, premises considered, the Decision of the Labor Arbiter declaring the illegal dismissal of complainant is hereby AFFIRMED. However[,] We modify the monetary award by limiting the grant of backwages to only three (3) months in view of complainants very limited service which lasted only for one month and three days. 1. Backwages - [P]15,600.00 2. Separation Pay - 5,200.00 3. 13th Month Pay - 583.34 [P]21,383.34 Attorneys Fees- 2,138.33 Total [P]23,521.67 The appeal of respondent Royal (sic) Security Agency is hereby DISMISSED for lack of merit. SO ORDERED.10
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The NLRC partially affirmed LA Gutierrezs May 11, 2005 Decision. It concurred with the latters finding that the petitioner was illegally dismissed and the manner by which his separation pay was computed, but modified the monetary award in the petitioners favor by reducing the amount of his backwages from P95,600.00 to P15,600.00. The NLRC determined the petitioners backwages as limited to three (3) months of his last monthly salary, considering that his employment with Royale was only for a period for one (1) month and three (3) days, thus:11
On the other hand, while complainant is entitled to backwages, We are aware that his stint with respondent Royal (sic) lasted only for one (1) month and three (3) days such that it is Our considered view that his backwages should be limited to only three (3) months. Backwages: [P]5,200.00 x 3 months = [P]15,600.0012
The petitioner, on the other hand, did not appeal LA Gutierrezs May 11, 2005 Decision but opted to raise the validity of LA Gutierrezs adverse findings with respect to piercing Royales corporate personality and computation of his separation pay in his Reply to the respondents Memorandum of Appeal. As the filing of an appeal is the prescribed remedy and no aspect of the decision can be overturned by a mere reply, the NLRC dismissed the petitioners efforts to reverse LA Gutierrezs disposition of these issues. Effectively, the petitioner had already waived his right to question LA Gutierrezs Decision when he failed to file an appeal within the reglementary period. The NLRC held:
On the other hand, in complainants Reply to Respondents Appeal Memorandum he prayed that the doctrine of piercing the veil of corporate fiction of respondent be applied so that his services with Sceptre since 1976 [will not] be deleted. If complainant assails this particular finding in the Labor Arbiters Decision, complainant should have filed an appeal and not seek a relief by merely filing a Reply to Respondents Appeal Memorandum.13
Consequently, the petitioner elevated the NLRCs November 30, 2005 Decision to the CA by way of a Petition for Certiorari under Rule 65 of the Rules of Court. On the other hand, the respondents filed no appeal from the NLRCs finding that the petitioner was illegally dismissed. The CA, in consideration of substantial justice and the jurisprudential dictum that an appealed case is thrown open for the appellate courts review, disagreed with the NLRC and proceeded to review the evidence on record to determine if Royale is Sceptres alter ego that would warrant the piercing of its corporate veil.14 According to the CA, errors not assigned on appeal may be reviewed as technicalities should not serve as bar to the full adjudication of cases. Thus: In Cuyco v. Cuyco, which We find application in the instant case, the Supreme Court held:
54
Therefore, for full adjudication of the case, We have to primarily resolve the issue of whether the doctrine of piercing the corporate veil be justly applied in order to determine petitioners length of service with private respondents.15 (citations omitted)
Nonetheless, the CA ruled against the petitioner and found the evidence he submitted to support his allegation that Royale and Sceptre are one and the same juridical entity to be wanting. The CA refused to pierce Royales corporate mask as one of the probative factors that would justify the application of the doctrine of piercing the corporate veil is stock ownership by one or common ownership of both corporations and the petitioner failed to present clear and convincing proof that Royale and Sceptre are commonly owned or controlled. The relevant portions of the CAs Decision state:
In the instant case, We find no evidence to show that Royale Security Agency, Inc. (hereinafter Royale), a corporation duly registered with the Securities and Exchange Commission (SEC) and Sceptre Security Agency (hereinafter Sceptre), a single proprietorship, are one and the same entity. Petitioner, who has been with Sceptre since 1976 and, as ruled by both the Labor Arbiter and the NLRC, was illegally dismissed by Royale on October 1, 2003, alleged that in order to circumvent labor laws, especially to avoid payment of money claims and the consideration on the length of service of its employees, Royale was established as an alter ego or business conduit of Sceptre. To prove his claim, petitioner declared that Royale is conducting business in the same office of Sceptre, the latter being owned by the late retired Gen. Roso Sabalones, and was managed by the latters daughter, Dr. Aida Sabalones-Tan; that two of Royales incorporators are grandchildren [of] the late Gen. Roso Sabalones; that all the properties of Sceptre are now owned by Royale, and that the officers and staff of both business establishments are the same; that the heirs of Gen. Sabalones should have applied for dissolution of Sceptre before the SEC before forming a new corporation. On the other hand, private respondents declared that Royale was incorporated only on March 10, 2003 as evidenced by the Certificate of Incorporation issued by the SEC on the same date; that Royales incorporators are Bruino M. Kuizon, Wilfredo Gracia K. Tan, Karen Therese S. Tan, Cesar Antonio S. Tan II and [Gabeth] Maria K. Tan. Settled is the tenet that allegations in the complaint must be duly proven by competent evidence and the burden of proof is on the party making the allegation. Further, Section 1 of Rule 131 of the Revised Rules of Court provides:
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By way of this Petition, the petitioner would like this Court to revisit the computation of his backwages, claiming that the same should be computed from the time he was illegally dismissed until the finality of this decision.17 The petitioner would likewise have this Court review and examine anew the factual allegations and the supporting evidence to determine if the CA erred in its refusal to pierce Royales corporate mask and rule that it is but a mere continuation or successor of Sceptre. According to the petitioner, the erroneous computation of his separation pay was due to the CAs failure, as well as the NLRC and LA Gutierrez, to consider evidence conclusively demonstrating that Royale and Sceptre are one and the same juridical entity. The petitioner claims that since Royale is no more than Sceptres alter ego, it should recognize and credit his length of service with Sceptre.18 The petitioner claimed that Royale and Sceptre are not separate legal persons for purposes of computing the amount of his separation pay and other benefits under the Labor Code. The piercing of Royales corporate personality is justified by several indicators that Royale was incorporated for the sole purpose of defeating his right to security of tenure and circumvent payment of his benefits to which he is entitled under the law: (i) Royale was holding office in the same property used by Sceptre as its principal place of business; 19 (ii) Sceptre and Royal have the same officers and employees;20 (iii) on October 14, 1994, Roso, the sole proprietor of Sceptre, sold to Aida, and her husband, Wilfredo Gracia K. Tan (Wilfredo),21 the property used by Sceptre as its principal place of business;22 (iv) Wilfredo is one of the incorporators of Royale;23 (v) on May 3, 1999, Roso ceded the license to operate Sceptre issued by the Philippine National Police to Aida;24 (vi) on July 28, 1999, the business name Sceptre Security & Detective Agency was registered with the Department of Trade and Industry (DTI) under the name of Aida;25 (vii) Aida exercised control over the affairs of Sceptre and Royale, as she was, in fact, the one who dismissed the petitioner from employment;26 (viii) Karen, the daughter of Aida, was Sceptres Operation Manager and is one of the incorporators of Royale;27 and (ix) Cesar Tan II, the son of Aida was one of Sceptres officers and is one of the incorporators of Royale.28 In their Comment, the respondents claim that the petitioner is barred from questioning the manner by which his backwages and separation pay were computed. Earlier, the petitioner moved for the execution of the NLRCs November 30, 2005 Decision29 and the respondents paid him the full amount of the monetary award thereunder shortly after the writ
56
Before this Court proceeds to decide this Petition on its merits, it is imperative to resolve the respondents contention that the full satisfaction of the award under the NLRCs November 30, 2005 Decision bars the petitioner from questioning the validity thereof. The respondents submit that they had paid the petitioner the amount of P21,521.67 as directed by the NLRC and this constitutes a waiver of his right to file an appeal to this Court. The respondents fail to convince. The petitioners receipt of the monetary award adjudicated by the NLRC is not absolute, unconditional and unqualified. The petitioners May 3, 2007 Motion for Release contains a reservation, stating in his prayer that: it is respectfully prayed that the respondents and/or Great Domestic Insurance Co. be ordered to RELEASE/GIVE the amount
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The question of whether one corporation is merely an alter ego of another is purely one of fact. So is the question of whether a corporation is a paper company, a sham or subterfuge or whether the petitioner adduced the requisite quantum of evidence warranting the piercing of the veil of the respondents corporate personality.40 As a general rule, this Court is not a trier of facts and a petition for review on certiorari under Rule 45 of the Rules of Court must exclusively raise questions of law. Moreover, if factual findings of the NLRC and the LA have been affirmed by the CA, this Court accords them the respect and finality they deserve. It is well-settled and oft-repeated that findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the CA. 41 Nevertheless, this Court will not hesitate to deviate from what are clearly procedural guidelines and disturb and strike down the findings of the CA and those of the labor tribunals if there is a showing that they are unsupported by the evidence on record or there was a patent misappreciation of facts. Indeed, that the impugned decision of the CA is consistent with the findings of the labor tribunals does not per se conclusively demonstrate the correctness thereof. By way of exception to the general rule, this Court will scrutinize the facts if only to rectify the prejudice and injustice resulting from an incorrect assessment of the evidence presented. A resolution of an issue that has supposedly become final and executory as the petitioner only raised it in his reply to the respondents appeal may be revisited by the appellate court if such is necessary for a just disposition of the case.
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A corporation is an artificial being created by operation of law. It possesses the right of succession and such powers, attributes, and properties expressly authorized by law or incident to its existence. It has a personality separate and distinct from the persons composing it, as well as from any other legal entity to which it may be related. This is basic.45 Equally well-settled is the principle that the corporate mask may be removed or the corporate veil pierced when the corporation is just an alter ego of a person or of another corporation. For reasons of public policy and in the interest of justice, the corporate veil will justifiably be impaled only when it becomes a shield for fraud, illegality or inequity committed against third persons.46 Hence, any application of the doctrine of piercing the corporate veil should be done with caution. A court should be mindful of the milieu where it is to be applied. It must be certain that the corporate fiction was misused to such an extent that injustice, fraud, or crime was committed against another, in disregard of rights. The wrongdoing must be clearly and convincingly established; it cannot be presumed. Otherwise, an injustice that was never unintended may result from an erroneous application.47 Whether the separate personality of the corporation should be pierced hinges on obtaining facts appropriately pleaded or proved. However, any piercing of the corporate veil has to be done with caution, albeit the Court will not hesitate to disregard the corporate veil when it is misused or when necessary in the interest of justice. After all, the concept of corporate entity was not meant to promote unfair objectives.48
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Also, Sceptre and Royale have the same principal place of business. As early as October 14, 1994, Aida and Wilfredo became the owners of the property used by Sceptre as its principal place of business by virtue of a Deed of Absolute Sale they executed with Roso. 57 Royale, shortly after its incorporation, started to hold office in the same property. These, the respondents failed to dispute. The respondents do not likewise deny that Royale and Sceptre share the same officers and employees. Karen assumed the dual role of Sceptres Operation Manager and incorporator of Royale. With respect to the petitioner, even if he has already resigned from Sceptre and has been employed by Royale, he was still using the patches and agency cloths of Sceptre during his assignment at Highlight Metal. Royale also claimed a right to the cash bond which the petitioner posted when he was still with Sceptre. If Sceptre and Royale are indeed separate entities, Sceptre should have released the petitioners cash bond when he resigned and Royale would have required the petitioner to post a new cash bond in its favor. Taking the foregoing in conjunction with Aidas control over Sceptres and Royales business affairs, it is patent that Royale was a mere subterfuge for Aida. Since a sole proprietorship does not have a separate and distinct personality from that of the owner of the enterprise, the latter is personally liable. This is what she sought to avoid but cannot prosper. Effectively, the petitioner cannot be deemed to have changed employers as Royale and Sceptre are one and the same. His separation pay should, thus, be computed from the date he was hired by Sceptre in April 1976 until the finality of this decision. Based on this Courts ruling in Masagana Concrete Products, et al. v. NLRC, et al.,58 the intervening period between the day an employee was illegally dismissed and the day the decision finding
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Clearly, the law intends the award of backwages and similar benefits to accumulate past the date of the Labor Arbiter's decision until the dismissed employee is actually reinstated. But if, as in this case, reinstatement is no longer possible, this Court has consistently ruled that backwages shall be computed from the time of illegal dismissal until the date the decision becomes final.65 (citation omitted)
In case separation pay is awarded and reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal up to the finality of the decision should separation pay not be paid in the meantime. It is the employees actual receipt of the full amount of his separation pay that will effectively terminate the employment of an illegally dismissed employee.66 Otherwise, the employer-employee relationship subsists and the illegally dismissed employee is entitled to backwages, taking into account the increases and other benefits, including the 13th month pay, that were received by his co-employees who are not dismissed.67 It is the obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which he would have been normally entitled had he not been dismissed and had not stopped working.68 In fine, this Court holds Royale liable to pay the petitioner backwages to be computed from his dismissal on October 1, 2003 until the finality of this decision. Nonetheless, the amount received by the petitioner from the respondents in satisfaction of the November 30, 2005 Decision shall be deducted accordingly. Finally, moral damages and exemplary damages at P25,000.00 each as indemnity for the petitioners dismissal, which was tainted by bad faith and fraud, are in order. Moral damages may be recovered where the dismissal of the employee was tainted by bad faith or fraud, or where it constituted an act oppressive to labor, and done in a manner contrary to morals, good customs or public policy while exemplary damages are recoverable only if the dismissal was done in a wanton, oppressive, or malevolent manner.69 WHEREFORE, premises considered, the Petition is hereby GRANTED. We REVERSE and SET ASIDE the CAs May 29, 2008 Decision in C.A.-G.R. SP No.
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TIMOTEO H. SARONA VS. NATIONAL LABOR RELATIONS COMMISSION, ROYALE SECURITY AGENCY AND CESAR S. TAN
Facts Petitioner, a security guard in Sceptre since April 1976, was asked by Sceptres operations manager on June 2003, to submit a resignation letter as a requirement for an application in Royale and to fill up an employment application form for the said company. He was then assigned at Highlight Metal Craft Inc. from July 29 to August 8, 2003 and was later transferred to Wide Wide World Express Inc. On September 2003, he was informed that his assignment at WWWE Inc. was withdrawn because Royale has been allegedly replaced by another security agency which he later discovered to be untrue. Nevertheless, he was once again assigned at Highlight Metal sometime in September 2003 and when he reported at Royales office on October 1, 2003, he was informed that he would no longer be given any assignment as instructed by Sceptres general manager. He thus filed a complaint for illegal dismissal. The LA ruled in petitioners favor as he found him illegally dismissed and was not convinced by the respondents claim on petitioners abandonment. Respondents were ordered to pay backwages computed from the day he was dismissed up to the promulgation of his decision on May 11, 2005. The LA also ordered for the payment of separation pay but refused to pierce Royales corporate veil. Respondents appealed to the NLRC claiming that the LA acted with grave abuse of discretion upon ruling on the illegal dismissal of petitioner. NLRC partially affirmed the LAs decision with regard to petitioners illegal dismissal and separation pay but modified the amount of backwages and limited it to only 3 months of his last month salary reducing P95, 600 to P15, 600 since he worked for Royale for only 1 month and 3 days. Petitioner did not appeal to LA but raised the validity of LAs findings on piercing Royales corporate personality and computation of his separation pay and such petition was dismissed by the NLRC. Petitioner elevated NLRCs decision to the CA on a petition for certiorari, and the CA disagreed with the NLRCs decision of not proceeding to review the evidence for determining if Royale is Sceptres alter ego that would warrant the piercing of its corporate veil. Issues 1. Whether or not Royales corporate fiction should be pierced for the purpose of compelling it to recognize the petitioners length of service with Sceptre and for holding it liable for the benefits that have accrued to him arising from his employment with Sceptre; and Whether or not petitioners backwages should be limited to his salary for 3 months
2.
Ruling The doctrine of piercing the corporate veil is applicable on alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation. The way on how petitioner was made to resign from Sceptre then later on made an employee of Royale, reflects the use of the legal fiction of the separate corporate personality and is an implication of continued employment. Royale is a continuation or successor or Sceptre since the employees of Sceptre and of Royale are the same and said companies have the same principal place of business. Because petitioners rights were violated and his employer has not changed, he is entitled
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SECOND DIVISION HYPTE R. AUJERO, Petitioner, G.R. No. 193484 Present: CARPIO, J., Chairperson, PEREZ, SERENO, REYES, and BERNABE, JJ.
- versus -
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, Promulgated: Respondent. January 18, 2012 x-----------------------------------------------------------------------------------------x DECISION REYES, J: This is a Petition for Review under Rule 45 of the Rules of Court from the November 12, 2009 Decision1 and July 28, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 107233 entitled Hypte R. Aujero v. National Labor Relations Commission and Philippine Communications Satellite Corporation. In its November 12, 2009 Decision, the CA dismissed the petitioners petition for certiorari under Rule 65 of the Rules of Court from the National Labor Relations Commissions (NLRC) July 4, 2008 and September 29, 2008 Resolutions, the dispositive portion of which states:
WHEREFORE, the petition is DISMISSED. The assailed Resolutions dated July 4, 2008 and September 29, 2008 of public respondent National Labor Relations Commission in NLRC NCR Case No. 00-07-08921-2004 [NLRC NCR CA No. 049644-06] are AFFIRMED. SO ORDERED.3
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The petitioner calls attention to the August 15, 2001 letter of Philcomsat's Chairman and President, Mr. Carmelo Africa, addressed to UCPB for the release of P9,439,327.91 to the petitioner and P4,575,727.09 to Philcomsat, which predated the execution of his quitclaim on September 12, 2001.12 According to the petitioner, this indicates Philcomsats pre-conceived plans to deprive him of a significant portion of his retirement pay. On May 31, 2006, Labor Arbiter Joel S. Lustria (LA Lustria) issued a Decision13 in the petitioners favor, directing Philcomsat to pay him the amount of P4,575,727.09 andP274,805.00, representing the balance of his retirement benefits and salary for the period from August 15 to September 15, 2001, respectively. LA Lustria found it hard to believe that the petitioner would voluntary waive a significant portion of his retirement pay. He found the consideration supporting the subject quitclaim unconscionable and ruled that the respondent failed to substantiate its claim that the amount received by the petitioner was a product of negotiations between the parties. Thus:
It would appear from the tenor of the letter that, rather that the alleged agreement, between complainant and respondent, respondent is claiming payment for an outstanding due to Philcomsat out of the retirement benefits of complainant. This could hardly be considered as proof of an agreement to reduce complainants retirement benefits. Absent any showing of any agreement or authorization, the deductions from complainants retirement benefits should be considered as improper and illegal. If we were to give credence to the claim of respondent, it would appear that complainant has voluntarily waived a total amount of [P]4,575,727.09. Given the purpose of retirement benefits to provide for a retiree a source of income for the remainder of his years, it defies understanding how complainant could accept such an arrangement and lose more than [P]4.5 million in the process. One can readily see the unreasonableness of such a proposition. By the same token, the Quitclaim and Waiver over benefits worth millions is apparently unconscionable and unacceptable under normal circumstances. The Supreme Court has consistently ruled that waivers must be fair, reasonable, and just and must not be unconscionable on its face. The explanation of the complainant that he was presented with a lower amount on pain that the entire benefits will not be released is more believable and consistent with evidence. We, therefore, rule against the effectivity of the waiver and quitclaim, thus, complainant is entitled to the balance of his retirement benefits in the amount of [P]4,575,727.09.14
In its July 4, 2008 Resolution,15 the NLRC granted Philcomsats appeal and reversed and set aside LA Lustrias May 31, 2006 Decision. The NLRC dismissed the petitioners complaint for unpaid retirement benefits and salary in consideration of the Deed of Release and Quitclaim he executed in September 12, 2001 following his receipt from Philcomsat of the amount of P9,439,327.91, which constitutes the full settlement of all his claims against Philcomsat. According to the NLRC, the petitioner failed to allege, much less, adduce evidence that Philcomsat employed means to vitiate his consent to the quitclaim. The
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Philcomsats appeal to the NLRC from LA Lustrias May 31, 2006 Decision was filed and its surety bond posted beyond the prescribed period of ten (10) days. On June 20, 2006, a copy of LA Lustrias Decision was served on Maritess Querubin (Querubin), one of Philcomsats executive assistants, as Philcomsats counsel and the executive assistant assigned to her were both out of the office. It was only the following day that Querubin gave a copy of the said Decision to the executive assistant of Philcomsats counsel, leading the latter to believe that it was only then that the said Decision had been served. In turn, this led Philcomsats counsel to believe that it was on June 21, 2006 that the ten (10) day-period started to run.
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Be that as it may, the provisions of Section 10, Rule VII of the NLRC Rules of Procedure, states, that:
SECTION 10. TECHNICAL RULES NOT BINDING. The rules of procedure and evidence prevailing in courts of law and equity shall not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process. x x x Additionally, the Supreme Court has allowed appeals from decisions of the Labor Arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its appellate powers, correct, amend or waive any error, defect or irregularity whether in substance or in form. Further, Article 221 of the same provides that: In any proceedings before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process.17
In his petition for certiorari under Rule 65 of the Rules of Court to the CA, the petitioner accused the NLRC of grave abuse of discretion in giving due course to the respondents belated appeal by relaxing the application of one of the fundamental requirements of appeal. An appeal, being a mere statutory right, should be exercised in a manner that strictly conforms to the prescribed procedure. As of July 3, 2006, or when Philcomsat filed its appeal and posted its surety bond, LA Lustrias Decision had become final and executory and Philcomsats counsels failure to verify when the copy of said Decision was actually received does not constitute excusable negligence. The petitioner likewise anchored his allegation of grave abuse of discretion against the NLRC on the latter's refusal to strike as invalid the quitclaim he executed in Philcomsats
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The CA further ruled that the NLRC was correct in upholding the validity of the petitioners quitclaim. Thus:
In the same vein, this Court finds that the NLRC did not act with grave abuse of discretion amounting to lack or excess of jurisdiction in declaring as valid the Deed of Release and Quitclaim dated September 12, 2001 absolving private respondent from liability arising from any and all suits, claims, demands or other causes of action of whatever nature in consideration of the amount petitioner received in connection with his retirement signed by petitioner. x x x xxxx
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The petitioner ascribes several errors on the part of the CA. Specifically, the petitioner claims that the CA erred in not dismissing the respondents appeal to the NLRC, which was filed beyond the prescribed period. There is no dispute that Querubin was authorized to receive mails and correspondences on behalf of Philcomsats counsel and her receipt of LA Lustrias Decision on June 20, 2006 is binding on Philcomsat. Also, the failure of Philcomsats counsel to ascertain when exactly the copy of LA Lustrias Decision was received by Querubin is inexcusable negligence. Since the perfection of an appeal within the ten (10)-day period is a mandatory and jurisdictional requirement, Philcomsats failure to justify its delay should have been reason enough to dismiss its appeal. The petitioner also claims that the CA erred in upholding the validity of the subject quitclaim. The respondent has no right to retain a portion of his retirement pay and the consideration for the execution of the quitclaim is simply unconscionable. The petitioner submits that the CA should have taken into account that Philcomsats retirement plan was for the exclusive benefit of its employees and to allow Philcomsat to appropriate a significant portion of his retirement pay is a clear case of unjust enrichment. On the other hand, Philcomsat alleges that the petitioner willfully and knowingly executed the subject quitclaim in consideration of his receipt of his retirement pay. Albeit his retirement pay was in the reduced amount of P9,439,327.91, Philcomsat alleges that this was arrived at following its negotiations with the petitioner and the latter participated in the computation thereof, taking into account his accountabilities to Philcomsat and the latters financial debacles. Philcomsat likewise alleges that the NLRC is clothed with ample authority to set aside technical rules; hence, the NLRC did not act with grave abuse of discretion in entertaining Philcomsats appeal in consideration of the circumstances surrounding the late filing thereof and the amount subject of the dispute. Issues In view of the conflicting positions adopted by the parties, this Court is confronted with two (2) issues that are far from being novel, to wit:
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Confronted with the task of determining whether the CA erred in not finding grave abuse of discretion in the NLRC's decision to give due course to Philcomsat's appeal despite its being belatedly filed, this Court rules in Philcomsat's favor. Procedural rules may be waived or dispensed with in absolutely meritorious cases. A review of the cases cited by the petitioner, Rubia v. Government Service Insurance System22and Videogram Regulatory Board v. Court of Appeals,23 where this Court adhered to the strict implementation of the rules and considered them inviolable, shows that the patent lack of merit of the appeals render liberal interpretation pointless and naught. The contrary obtains in this case as Philcomsat's case is not entirely unmeritorious. Specifically, Philcomsat alleged that the petitioner's execution of the subject quitclaim was voluntary and he made no claim that he did so. Philcomsat likewise argued that the petitioner's educational attainment and the position he occupied in Philcomsat's hierarchy militate against his claim that he was pressured or coerced into signing the quitclaim. The emerging trend in our jurisprudence is to afford every party-litigant the amplest opportunity for the proper and just determination of his cause free from the constraints of technicalities.24 Far from having gravely abused its discretion, the NLRC correctly prioritized substantial justice over the rigid and stringent application of procedural rules. This, by all means, is not a case of grave abuse of discretion calling for the issuance of a writ of certiorari. Absent any evidence that any of the vices of consent is present and considering the
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While the law looks with disfavor upon releases and quitclaims by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities, a legitimate waiver representing a voluntary settlement of a laborer's claims should be respected by the courts as the law between the parties.29 Considering the petitioner's claim of fraud and bad faith against Philcomsat to be unsubstantiated, this Court finds the quitclaim in dispute to be legitimate waiver. While the petitioner bewailed as having been coerced or pressured into signing the release and waiver, his failure to present evidence renders his allegation self-serving and inutile to invalidate the same. That no portion of his retirement pay will be released to him or his urgent need for funds does not constitute the pressure or coercion contemplated by law. That the petitioner was all set to return to his hometown and was in dire need of money would likewise not qualify as undue pressure sufficient to invalidate the quitclaim. "Dire necessity" may be an acceptable ground to annul quitclaims if the consideration is unconscionably low and the employee was tricked into accepting it, but is not an acceptable ground for annulling the release when it is not shown that the employee has been forced to
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EN BANC
G.R. No. 153569 Present: CORONA, C.J., CARPIO, VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA, SERENO, REYES, and PERLAS-BERNABE, JJ.:
- versus -
MINEX IMPORT CORPORATION/MINERAMA CORPORATION, KENNETH MEYERS, SYLVIA P. MARIANO, and Promulgated: VINA MARIANO, Respondents. January 24, 2012 x-----------------------------------------------------------------------------------------x DECISION BERSAMIN, J.:
The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the validity of the dismissal. Nonetheless, the dismissal for a just or lawful cause must still be made upon compliance with the requirements of due process under the Labor Code; otherwise, the employer is liable to pay nominal damages as indemnity to the dismissed employee. Antecedents
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On appeal by the respondents, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter on December 28, 2000, declaring that the petitioner had not been dismissed, but had abandoned her job after being found to have stolen the proceeds of the sales; and holding that even if she had been dismissed, her dismissal would be justifiable for loss of trust and confidence in the light of the finding of probable cause by the DOJ and the City Prosecutor and the filing of the information for qualified theft against her.5 The NLRC deleted the awards of backwages, service incentive leave pay, holiday pay and 13 month pay, moral and exemplary damages and attorneys fees, opining that the petitioner would be entitled to an award of damages only when the dismissal was shown to be effected in bad faith or fraud or was an act oppressive to labor, or was done in a manner contrary to good morals, good customs, or public policy.6
th
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On May 13, 2002, the CA denied the petitioners motion for reconsideration.8
Issues In her appeal, the petitioner submits that: THE COURT OF APPEALS ERRED IN FINDING THAT THERE WAS NO ILLEGAL DISMISSAL IN THE CASE AT BAR, PARTICULARLY IN FINDING THAT: 1. THERE WAS JUST CAUSE FOR HER DISMISSAL, AND
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Ruling The petition lacks merit. The decisive issue for resolution is whether or not the petitioner was terminated for a just and valid cause. To dismiss an employee, the law requires the existence of a just and valid cause. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latters representative in connection with the employees work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. The NLRC held that the termination of the petitioner was due to loss of trust and confidence. Sustaining the NLRC, the CA stated:
With the finding of probable cause not only by the investigating prosecutor but by the Secretary of Justice no less, it cannot be validly claimed, as the Petitioner does, in her Petition at bench, that there is no lawful cause for her dismissal xxx. xxx Admittedly, there is no direct evidence that the Petitioner took the money from the drawer in the cabinet in the Kiosk. But direct evidence that the Petitioner took the money is not required for the Petitioner to be lawfully dismissed for the loss of the money of the Private Respondent corporation. If circumstantial evidence is sufficient on which to anchor a judgment of conviction in criminal cases under Section 4, Rule 133 of the Revised Rules of Evidence, there is no cogent reason why circumstantial evidence is not sufficient on which to anchor a factual basis for the dismissal of the Petitioner for loss of confidence.9
The petitioner still argues, however, that there was no evidence at all upon which Minex could validly dismiss her considering that she had not yet been found guilty beyond reasonable doubt of the crime of qualified theft. The petitioners argument is not novel. It has been raised and rejected many times before on the basis that neither conviction beyond reasonable doubt for a crime against the employer nor acquittal after criminal prosecution was indispensable. Nor was a formal charge in court for the acts prejudicial to the interest of the employer a pre-requisite for a valid dismissal.
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In Philippine Long Distance Telephone Co.(BLTB Co.) vs. NLRC,11 the Court held that the acquittal of the employee from the criminal prosecution for a crime committed against the interest of the employer did not automatically eliminate loss of confidence as a basis for administrative action against the employee; and that in cases where the acts of misconduct amounted to a crime, a dismissal might still be properly ordered notwithstanding that the employee was not criminally prosecuted or was acquitted after a criminal prosecution. In Batangas Laguna Tayabas Bus Co. v. NLRC,12 the Court explained further, as follows:
Fraud or willful breach of trust reposed upon an employee by his employer is a recognized cause for termination of employment and it is not necessary that the employer should await the employees final conviction in the criminal case involving such fraud or breach of trust before it can terminate the employees services. In fact, even the dropping of the charges or an acquittal of the employee therefrom does not preclude the dismissal of an employee for acts inimical to the interests of the employer. To our mind, the criminal charges initiated by the company against private respondents and the finding after preliminary investigation of their prima facie guilt of the offense charged constitute substantial evidence sufficient to warrant a finding by the Labor Tribunal of the existence of a just cause for their termination based on loss of trust and confidence. The Labor Tribunal need not have gone further as to require private respondents conviction of the crime charged, or inferred innocence on their part from their release from detention, which was mainly due to their posting of bail. (Emphasis supplied)
Indeed, the employer is not expected to be as strict and rigorous as a judge in a criminal trial in weighing all the probabilities of guilt before terminating the employee. Unlike a criminal case, which necessitates a moral certainty of guilt due to the loss of the personal liberty of the accused being the issue, a case concerning an employee suspected of wrongdoing leads only to his termination as a consequence. The quantum of proof required for convicting an accused is thus higher proof of guilt beyond reasonable doubt than the quantum prescribed for dismissing an employee substantial evidence. In so stating, we are not diminishing the value of employment, but only noting that the loss of employment occasions a consequence lesser than the loss of personal liberty, and may thus call for a lower degree of proof.
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The petitioner plainly demonstrated how quickly and summarily her dismissal was carried out without first requiring her to explain anything in her defense as demanded under Section 2 (d) of Rule I of the Implementing Rules of Book VI of the Labor Code. Instead, the respondents forthwith had her arrested and investigated by the police authorities for qualified theft. This, we think, was a denial of her right to due process of law, consisting in the opportunity to be heard and to defend herself.14 In fact, their decision to dismiss her was already final even before the police authority commenced an investigation of the theft, the finality being confirmed by no less than Sylvia Mariano herself telling the petitioner during their phone conversation following the latters release from police custody on November 11, 1997 that she (Sylvia) no longer wanted to see her. The fact that the petitioner was the only person suspected of being responsible for the theft aggravated the denial of due process. When the respondents confronted her in the morning of November 10, 1997 for the first time after the theft, they brought along a police officer to arrest and hale her to the police precinct to make her answer for the theft. They evidently already concluded that she was the culprit despite a thorough investigation of the theft still to be made. This, despite their obligation under Section 2 (d) of Rule I of the Implementing Rules of Book VI of the Labor Code, firstly, to give her a reasonable opportunity within which to explain (her) side; secondly, to set a hearing or conference during which the employee concerned, with the assistance of counsel if (she) so desires is given opportunity to respond to the charge, present (her) evidence, or rebut the evidence presented against (her); and lastly, to serve her a written notice of termination xxx indicating that upon due consideration of all the circumstances, grounds have been established to justify (her) termination. They wittingly shunted aside the tenets that mere accusation did not take the place of proof of wrongdoing, and that a suspicion or belief, no matter how sincere, did not substitute for factual findings carefully established through an orderly procedure.15 The fair and reasonable opportunity required to be given to the employee before dismissal encompassed not only the giving to the employee of notice of the cause and the ability of the employee to explain, but also the chance to defend against the accusation. This was our thrust in Philippine Pizza, Inc. v. Bungabong,16 where we held that the employee was not afforded due process despite the dismissal being upon a just cause, considering that he was not given a fair and reasonable opportunity to confront his accusers and to defend himself against the charge of theft notwithstanding his having submitted his explanation denying that he had stolen beer from the company dispenser. The termination letter was issued a day before the employee could go to the HRD Office for the investigation, which
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LOLITA S. CONCEPCION v. MINEX IMPORT CORPORATION/MINERAMA CORPORATION, KENNETH MEYERS, SYLVIA P. MARIANO, and VINA MARIANO
Facts Respondent Vina Mariano assigned petitioner Lolita Concepcion to the SM Harrison Plaza kiosk with the instruction to hold the keys of the kiosk. At the close of business, they conducted a cash-count of their sales proceeds amounting to P50,912.00. The next morning, the petitioner phoned Vina Mariano to report that the P50,912.00 was missing. Later, while the petitioner was giving a detailed statement on the theft to the security investigator of Harrison Plaza, Vina and Sylvia Mariano, her superiors, arrived with a policeman who immediately placed the petitioner under arrest, the police investigated her. She was detained for a day being released only because the inquest prosecutor instructed so. The petitioner complained against the respondents for illegal dismissal in the Department of Labor and Employment. Minex, through Vina, filed a complaint for qualified theft against the petitioner in the Office of the City Prosecutor in Manila. As to the petitioners complaint for illegal dismissal, the Labor Arbiter decided in favor of Lolita Concepcion. On appeal by the respondents, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter declaring that the petitioner had not been dismissed, but had abandoned her job after being found to have stolen the proceeds of the sales; and holding that even if she had been dismissed, her dismissal would be justifiable for loss of trust and confidence in the light of the finding of probable cause by the DOJ and the City Prosecutor and the filing of the information for qualified theft against her. The petitioner challenged the reversal by the NLRC in the Court of Appeals (CA). The CA sustained the NLRC mainly because of the DOJ Secretarys finding of probable cause for qualified theft. The CA denied the petitioners motion for reconsideration. Hence, the instant petition. Issue Whether or not the petitioner was terminated for a just and valid cause. Ruling YES. The employer may validly dismiss for loss of trust and confidence an employee who commits an act of fraud prejudicial to the interest of the employer. Neither a criminal prosecution nor a conviction beyond reasonable doubt for the crime is a requisite for the validity of the dismissal. Nonetheless, the dismissal for a just or lawful cause must still be made upon compliance with the requirements of due process under the Labor Code; otherwise, the employer is liable to pay nominal damages as indemnity to the dismissed employee.
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SECOND DIVISION
-versus-
x-----------------------------------------------------------------------------------------x DECISION PEREZ, J.: Before us is a petition for review on certiorari seeking to reverse and set aside the issuances of the Court of Appeals in CA-GR. SP No. 70965, to wit: (a) the Decision1 dated 18 March 2004 granting the petition for certiorari under Rule 65 of herein respondent Diosdado Bitara, Jr.; and (b) the Resolution2 dated 10 May 2005 denying the petitioners Motion for Reconsideration of the Decision. The assailed decision of the Court of Appeals reversed the findings of the National Labor Relations Commission3 and the Labor Arbiter4 that respondent was validly dismissed from the service. The Antecedents
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Despite respondents undertaking to report on time, however, he continued to disregard attendance policies. His weekly time record for the first quarter of the year 200010 revealed that he came late nineteen (19) times out of the forty-seven (47) times he reported for work. He also incurred nineteen (19) absences out of the sixty-six (66) working days during the quarter. His absences without prior notice and approval from March 11-16, 2000 were considered to be the most serious infraction of all11 because of its adverse effect on business operations. Consequently, Davis Cheng, General Manager of the company and son of petitioner Cheng, issued on 17 March 2000 another Memorandum12 (Notice to Explain) requiring respondent to explain why his services should not be terminated. He personally handed the Notice to Explain to respondent but the latter, after reading the directive, refused to
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It likewise denied respondents Motion for Reconsideration of the Resolution on 21 February 2002.27 Before the Court of Appeals, respondent sought the annulment of the Commissions Resolution dated 29 June 2001 and Order dated 21 February 2002 on the ground that they were rendered with grave abuse of discretion and/or without or in excess of jurisdiction.28 The Court of Appeals found for the respondent and reversed the findings of the Commission. The dispositive portion of its Decision dated 18 March 2004 reads:
WHEREFORE, the petition is GRANTED. In lieu of the assailed Resolution and Order of the respondent NLRC, a NEW DECISION is hereby rendered declaring petitioner Diosdado Bitara, Jr. to have been Illegally Dismissed and, thus, entitled to the following: 1. Reinstatement or if no longer feasible, Separation Pay to be computed from the commencement of his employment in August 1988 up to the time of his termination on April 1, 2000, including his imputed service from April 1, 2000 until the finality of this decision, based on the salary rate prevailing at the said finality; Backwages, inclusive of allowances and other benefits, computed from April 1, 2000 up to the finality of this decision, without qualification or deduction; and 5-day Service Incentive Leave Pay for every year of service from the commencement of his employment in August 1988 up to its termination on April 1, 2000. 29
2.
3.
On 10 May 2005, the Court of Appeals denied respondents Motion for Reconsideration of the decision for lack of merit. 30 Hence, the instant petition.31 Issue The core issue in this case is whether or not the Court of Appeals correctly found that the Commission acted without and/or in excess of jurisdiction and with grave abuse of discretion amounting to lack or excess of jurisdiction (a) in upholding the termination of respondents employment and (b) in affirming the denial of his claim for non-payment of holiday pay, service incentive leave pay, moral and exemplary damages. Our Ruling The petition is meritorious. The special civil action for certiorari seeks to correct errors of jurisdiction and not errors of judgment.32
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It is on the alleged lack of substantial evidence that the Court of Appeals found for the respondents, thereby reversing the decision of the Commission. We hold otherwise. Upon examination of the documents presented by the parties, we are convinced that the finding of facts on which the conclusions of the Commission and the Labor Arbiter were based was actually supported by substantial evidence that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.36 (Emphasis supplied.) I In order to validly dismiss an employee, the employer is required to observe both substantive and procedural aspects the termination of employment must be based on a just or authorized cause of dismissal and the dismissal must be effected after due notice and hearing.37 Substantive Due Process We cannot agree with the Court of Appeals that the sole basis of the termination of respondents employment was his absences from March 11-16, 2000. Indeed, the Notice to Explain38 clearly stated:
We are seriously considering your termination from service, and for this reason you are directed to submit a written explanation, within seventy-two hours from your receipt of this notice, why you should not be terminated from service for failure to report for work without verbal or written notice or permission on March 11, 13, 14, 15 and 16, 2000. xxx (Emphasis supplied.)
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Necessarily, he was considered for termination of employment because of his previous infractions capped by his recent unauthorized absences from March 11-16, 2000. That the recent absences were unauthorized were satisfactorily established by petitioners. Two (2) employees of the company belied the claim of respondents wife Mary Ann Bitara that she called the office on 11 March 2000, and, through a certain Delia, as allegedly later identified by respondent, informed petitioners that her husband would take a leave of absence for a week because he went to the province.39 Delia Abalos, a binder/finisher of the company, stated in her Affidavit that she never received a call from respondent nor his wife regarding his absences from March 11-16 and 17-23 during the month of March 2000.40 On the other hand, Ritchie Distor, a messenger of the company, narrated in his Affidavit that, upon instruction of the Management, he went to respondents house on 13 March 2000 to require him to report for work. Instead of relaying the message to him, as respondent would have it, the wife informed him that respondent had already left the house but that she did not know where he was going.41 The Court of Appeals relied heavily on our ruling in Stellar Industrial Services, Inc. vs. NLRC,42 which is not on all fours with the present case. In that case, the employer dismissed respondent for non-observance of company rules and regulations. On the basis of the facts presented, this Court honored the questioned medical certificate justifying the absences he incurred. It further ratiocinated:
xxx [P]rivate respondents absences, as already discussed, were incurred with due notice and compliance with company rules and he had not thereby committed a similar offense as those he had committed in the past [to wit: gambling, for which he was preventively suspended; habitual tardiness for which he received several warnings; and violation of company rules for carrying three sacks of rice, for which he was required to explain.] xxx To refer to those earlier violations as added grounds for dismissing him is doubly unfair to private respondent.43 (Emphasis supplied.)
In the present case, however, petitioners have repeatedly called the attention of respondent concerning his habitual tardiness. The Memorandum dated 23 June 1999 of petitioner Cheng required him to explain his tardiness. Also in connection with a similar infraction, respondent even wrote petitioner Cheng a letter dated 29 November 1999 where he admitted that his tardiness has affected the delivery schedules of the company, offered an apology, and undertook to henceforth report for duty on time. Despite this undertaking, he continued to either absent himself from work or report late during the first quarter of 2000. We, therefore, agree with the Labor Arbiters findings, to wit:
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There is likewise no merit in the observation of the Court of Appeals that the petitioners themselves are not certain of the official time of their employees after pointing out the seeming inconsistencies between the statement of the petitioners that there is no need for written rules since even the [respondent] is aware that his job starts from 8 am to 5 pm47 and its Memorandum of 23 June 1999, where it was mentioned that respondents official time was from 8:30 a.m. to 5:30 p.m. On the contrary, it was clearly stated in the Memorandum that the Management adjusted his official time from 8:00 a.m. to 5:00 p.m. to 8:30 a.m. to 5:30 p.m. to hopefully solve the problem on his tardiness.48 Neither is there basis to hold that the company tolerates the offsetting of under time with overtime services. The Weekly Time Record relied upon by respondent does not conclusively confirm the alleged practice. In Valiao,49 we defined gross negligence as want of care in the performance of ones duties50 and habitual neglect as repeated failure to perform ones duties for a period of time, depending upon the circumstances.51 These are not overly technical terms, which, in the first place, are expressly sanctioned by the Labor Code of the Philippines, to wit:
ART. 282. Termination by employer. - An employer may terminate an employment for any of the following causes: (a) xxx (b) Gross and habitual neglect by the employee of his duties; xxx
Clearly, even in the absence of a written company rule defining gross and habitual neglect of duties, respondents omissions qualify as such warranting his dismissal from the service. We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving employees. As aptly put by then Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the workplace, and it is within the managements prerogative xxx to terminate his employment. Even as the law is solicitous of the welfare of employees, it must also protect the
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And, in the words of then Associate Justice Ma. Alicia Austria-Martinez in Philippine Long Distance and Telephone Company, Inc. v. Balbastro:53
While it is true that compassion and human consideration should guide the disposition of cases involving termination of employment since it affects one's source or means of livelihood, it should not be overlooked that the benefits accorded to labor do not include compelling an employer to retain the services of an employee who has been shown to be a gross liability to the employer. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer.54 It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer.Justitia nemini neganda est (Justice is to be denied to none).55
Procedural Due Process Procedural due process entails compliance with the two-notice rule in dismissing an employee, to wit: (1) the employer must inform the employee of the specific acts or omissions for which his dismissal is sought; and (2) after the employee has been given the opportunity to be heard, the employer must inform him of the decision to terminate his employment.56 Respondent claimed that he was denied due process because the company did not observe the two-notice rule. He maintained that the Notice of Explanation and the Notice of Termination, both of which he allegedly refused to sign, were never served upon him.57 The Court of Appeals favored respondent and ruled in this wise:
Furthermore, We believe that private respondents failed to afford petitioner due process. The allegation of private respondents that petitioner refused to sign the memoranda dated March 17 and 21, 2000 despite receipt thereof is not only lame but also implausible. First, the said allegation is self-serving and unsubstantiated. Second, a prudent employer would simply not accept such mere refusal, but would exert effort to observe the mandatory requirement of due process. We cannot accept the self-serving claim of respondents that petitioner refused to sign both memoranda. Otherwise, We would be allowing employers to do away with the mandatory twin-notice rule in the termination of employees. We find more credible the claim of petitioner that he was illegally dismissed on April 1, 2000 when the lawyer of the company informed him, without prior notice and in derogation of his right to due process, of his termination by offering him a 1-month salary as separation pay. The petitioners immediate filing of a complaint for illegal dismissal on April 27, 2000 reinforced Our belief that petitioner was illegally dismissed and was denied due process. 58 (Emphasis in the original.)
We rule otherwise.
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Davis Cheng, on the other hand, did both. First, he indicated in the notices the notation that respondent refused to sign together with the corresponding dates of service. Second, he executed an Affidavit dated 29 July 2000 stating that: (1) he is the General Manager of the company; (2) he personally served each notice upon respondent, when respondent went to the office/factory on 17 March 2000 and 21 March 2000, respectively; and (3) on both occasions, after reading the contents of the memoranda, respondent refused to acknowledge receipt thereof. We are, thus, convinced that the notices have been validly served. Premises considered, we find that respondent was accorded both substantive and procedural due process. II As to respondents monetary claims, petitioners did not deny respondents entitlement to service incentive leave pay as, indeed, it is indisputable that he is entitled thereto. In Fernandez v. NLRC,62 this Court elucidated:
The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations63 provides that [e]very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. Service incentive leave is a right which accrues to every employee who has served within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year.64 It is also commutable to its money equivalent if not used or exhausted at the end of the year.65 In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value. xxx66 (Emphasis supplied.)
Be that as it may, petitioners failed to establish by evidence that respondent had already used the service incentive leave when he incurred numerous absences notwithstanding that employers have complete control over the records of the company so much so that they could easily show payment of monetary claims against them by merely presenting vouchers or payrolls,67 or any document showing the off-setting of the payment of
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As to the payment of holiday pay, we are convinced that respondent had already received the same based on the cash vouchers on record. Accordingly, we affirm the ruling of the National Labor Relations Commission that the dismissal was valid. However, respondent shall be entitled to the money equivalent of the five-day service incentive leave pay for every year of service from the commencement of his employment in August 1988 up to its termination on 1 April 2000. The Labor Arbiter shall compute the corresponding amount. WHEREFORE, the Resolution dated 29 June 2001 and the Order dated 21 February 2002 of the National Labor Relations Commission in NLRC NCR CASE No. 027871-01 are hereby REINSTATED with the MODIFICATION that petitioners are ORDERED to pay respondent the money equivalent of the five-day service incentive leave for every year of service covering his employment period from August 1988 to 1 April 2000. This case is hereby REMANDED to the Labor Arbiter for the computation of respondents service incentive leave pay. SO ORDERED.
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SECOND DIVISION
Present: - versus CARPIO, J., Chairperson, PEREZ, SERENO, REYES, PERLAS-BERNABE,* JJ. PORT Promulgated: January 25, 2012
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION
PEREZ, J.: Assailed in this petition for review on certiorari filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure is the Decision1 dated 19 June 2006 rendered by the Special Tenth Division of the Court of Appeals in CA-G.R. SP No. 92491,2 the dispositive portion of which states:
WHEREFORE, premises considered, the Petition is GRANTED and the assailed NLRC decision is hereby SET ASIDE. In lieu thereof, the decision of the Labor Arbiter is ordered REINSTATED. No costs. SO ORDERED.3
The Facts On 16 May 2000, petitioner Jonathan V. Morales (Morales) was hired by respondent Harbour Centre Port Terminal, Inc. (HCPTI) as an Accountant and Acting Finance Officer, with a monthly salary of P18,000.00.4 Regularized on 17 November 2000,5 Morales was promoted to Division Manager of the Accounting Department, for which he was compensated a
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With the NLRCs 10 October 2005 denial of the motion for reconsideration of the foregoing decision,22 HCPTI elevated the case to the CA through the Rule 65 petition for certioraridocketed before said courts then Special Tenth Division as CA-G.R. SP No. 92491.23 In view of the 3 November 2005 Entry of Judgment issued by the NLRC, 24 Morales filed a motion for execution25 which remained unresolved due to the parties signification of their willingness to explore the possibility of amicably settling the case.26 On 19 June 2006, the CA rendered the herein assailed decision, reversing the NLRCs 29 July 2005 Decision, upon the following findings and conclusions: (a) Morales reassignment to Operations Cost Accounting was a valid exercise of HCPTIs prerogative to transfer its employees as the exigencies of the business may require; (b) the transfer cannot be construed as constructive dismissal since it entailed no demotion in rank, salaries and benefits; and, (c) rather than
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FIRST DIVISION
MAGSAYSAY MARITIME G.R. No. 177578 CORPORATION and/or WASTFELPresent: LARSEN MANAGEMENT A/S, Petitioners, CORONA, C.J., Chairperson, LEONARDO-DE CASTRO, DEL CASTILLO, - versus VILLARAMA, JR., and MENDOZA, JJ. OBERTO S. LOBUSTA, Respondent. Promulgated: January 25, 2012 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION VILLARAMA, JR., J.: Petitioners appeal the Decision1 dated August 18, 2006 of the Court of Appeals (CA) in CAG.R. SP No. 74035 and its Resolution2 dated April 19, 2007, denying the motion for reconsideration thereof. The CA declared that respondent is suffering from permanent total disability and ordered petitioners to pay him US$2,060 as medical allowance, US$60,000 as disability benefits and 5% of the total monetary award as attorneys fees. The facts follow: Petitioner Magsaysay Maritime Corporation is a domestic corporation and the local manning agent of the vessel MV Fossanger and of petitioner Wastfel-Larsen Management A/S.3 Respondent Oberto S. Lobusta is a seaman who has worked for Magsaysay Maritime Corporation since 1994.4 In March 1998, he was hired again as Able Seaman by Magsaysay Maritime Corporation in behalf of its principal Wastfel-Larsen Management A/S. The employment contract5 provides for Lobusta's basic salary of US$515 and overtime pay of US$206 per month. It also provides that the standard terms and conditions governing the employment of Filipino seafarers on board ocean-going vessels, approved per Department
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The determination of disability and fitness for duty/return-to-work is more complex. During asymptomatic periods, Mr. Lobusta could conceivably be capable of performing the duties and responsibilities of an Able Seaman as listed in the memos provided by Pandiman (Duties of an Able Seaman on board an average vessel, January 26, 2000; and Deck Crew general Responsibilities, 95.11.01). However, consideration needs to be given to the following:
o
During the personal interview, Mr. Lobusta reported the need to use a selfcontained breathing apparatus (SCBA) for double bottom work. While the use of these devices may not appreciably increase the work of breathing, an individual who develops an acute asthmatic attack under conditions requiring the use of an SCBA (oxygen-poor atmospheres) may be at increased risk for a poor outcome. When out at sea, the medical facilities on board an average vessel may not be adequate to provide appropriate care for an acute asthmatic exacerbation. Severe asthmatic attacks require life-sustaining procedures such as endotracheal intubation and on occasion, mechanical ventilation. Asthma can be fatal if not treated immediately. The distance from and the time required to transport an individual having an acute asthmatic attack on a vessel at sea to the appropriate medical facilities on land are important factors in the decision regarding fitness for duty. Several of the duties listed for an Able Seaman require the use of a variety of chemical substances (e.g. grease, solvents, cleaning agents, de-greasers, paint, etc.), many of which are known or suspected asthma triggers in sensitized individuals. The potential for an Able Seaman's exposure to these asthma triggers is considerable.
Taken altogether, it is my opinion that Mr. Lobusta ought not to be considered fit to return to work as an Able Seaman. While the degree of impairment is mild, for the reasons stated above, it would be in the interest of all parties involved if he were to no longer be considered as capable of gainful employment as a seafarer. It is possible that he may perform adequately in another capacity, given a land-based assignment.19 (Stress in the original by Dr. David.)
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The CA faulted the NLRC for plucking only particular phrases from Dr. Davids report and said that the NLRC cannot wantonly disregard the full import of said report. The CA ruled that Lobusta's disability brought about by his bronchial asthma is permanent and total as he had been unable to work since May 14, 1998 up to the present or for more than 120 days, and because Dr. David found him not fit to return to work as an able seaman. Hence, this petition which raises two legal issues: I.
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The same principles were cited in the more recent case of Crystal Shipping, Inc. v. Natividad. In addition, the Court cited GSIS v. Cadiz and Ijares v. CA that permanent disability is the
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Section 2(b), Rule VII of the Implementing Rules of Title II, Book IV of the Labor Code, as amended, or the Amended Rules on Employees Compensation Commission (ECC Rules), reads:
Sec. 2. Disability. x x x (b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days, except as otherwise provided for in Rule X of these Rules. xxxx
According to Vergara,31 these provisions of the Labor Code, as amended, and implementing rules are to be read hand in hand with the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract which reads:
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Vergara continues:
As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of the treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally unable to work. He receives his basic wage during this period until he is declared fit to work or his temporary disability is acknowledged by the company to be permanent, either partially or totally, as his condition is defined under the POEA Standard Employment Contract and by applicable Philippine laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer requires further medical attention, then the temporary total disability period may be extended up to a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent partial or total disability already exists. The seaman may of course also be declared fit to work at any time such declaration is justified by his medical condition. xxxx
As we outlined above, a temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability.32 To be sure, there is one Labor Code concept of permanent total disability, as stated in Article 192(c)(1) of the Labor Code, as amended, and the ECC Rules. We also note that the first paragraph of Section 20(B)(3) of the 2000 POEA Standard Employment Contract was lifted verbatim from the first paragraph of Section 20(B)(3) of the 1996 POEA Standard Employment Contract, to wit:
Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days.
Applying the foregoing considerations, we agree with the CA that Lobusta suffered permanent total disability. On this point, the NLRC ruling was not in accord with law and jurisprudence. Upon repatriation, Lobusta was first examined by the Pulmonologist and Orthopedic Surgeon on May 22, 1998. The maximum 240-day (8-month) medical-treatment period expired, but no declaration was made that Lobusta is fit to work. Nor was there a declaration of the existence of Lobustas permanent disability. On February 16, 1999, Lobusta was still prescribed medications for his lumbosacral pain and was advised to return for reevaluation. May 22, 1998 to February 16, 1999 is 264 days or 6 days short of 9 months. On Lobustas other ailment, Dr. Roas clinical summary also shows that as of December 16, 1999, Lobusta was still unfit to resume his normal work as a seaman due to the persistence of his symptoms. But neither did Dr. Roa declare the existence of Lobustas permanent disability. Again, the maximum 240-day medical treatment period had already expired. May 22, 1998 to December 16, 1999 is 19 months or 570 days. In Remigio, unfitness to work for
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