ALVIADO V PROCTER AND GAMBLE

MARCH 9, 2010
Labor laws expressly prohibit labor-only contracting. To prevent its circumvention, the Labor
Code establishes an employer-employee relationship between the employer and the
employees of the labor-only contractor.
The instant petition for review assails the March 21, 2003 Decision[1] of the Court of Appeals
(CA) in CA-G.R. SP No. 52082 and its October 20, 2003 Resolution[2] denying the motions
for reconsideration separately filed by petitioners and respondent Procter & Gamble Phils. Inc.
(P&G). The appellate court affirmed the July 27, 1998 Decision of the National Labor
Relations Commission (NLRC), which in turn affirmed the November 29, 1996 Decision[3] of
the Labor Arbiter. All these decisions found Promm-Gem, Inc. (Promm-Gem) and Sales and
Promotions Services (SAPS) to be legitimate independent contractors and the employers of the
petitioners.

wages, the power of dismissal and control with respect to the means and methods by which
their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He further
found that Promm-Gem and SAPS were legitimate independent job contractors. The
dispositive portion of his Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered
Dismissing the above-entitled cases against respondent Procter &
Gamble (Phils.), Inc. for lack of merit.
SO ORDERED.[12]
Ruling of the NLRC
Appealing to the NLRC, petitioners disputed the Labor Arbiters findings. On July
27, 1998, the NLRC rendered a Decision[13] disposing as follows:
WHEREFORE, premises considered, the appeal of complainants is
hereby DISMISSED and the decision appealed from AFFIRMED.

Factual Antecedents
Petitioners worked as merchandisers of P&G from various dates, allegedly starting
as early as 1982 or as late as June 1991, to either May 5, 1992 or March 11, 1993, more
specifically as follows:
They all individually signed employment contracts with either Promm-Gem or
SAPS for periods of more or less five months at a time. [5] They were assigned at different
outlets, supermarkets and stores where they handled all the products of P&G. They received
their wages from Promm-Gem or SAPS.[6]
SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers
for reasons such as habitual absenteeism, dishonesty or changing day-off without prior notice.

SO ORDERED.[14]
Petitioners filed a motion for reconsideration but the motion was denied in the November 19,
1998 Resolution.[15]
Ruling of the Court of Appeals
Petitioners then filed a petition for certiorari with the CA, alleging grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the Labor Arbiter and the
NLRC. However, said petition was also denied by the CA which disposed as follows:
WHEREFORE, the decision of the National Labor Relations
Commission dated July 27, 1998 is AFFIRMED with the
MODIFICATION that respondent Procter & Gamble Phils., Inc. is
ordered to pay service incentive leave pay to petitioners.

[7]

P&G is principally engaged in the manufacture and production of different consumer and
health products, which it sells on a wholesale basis to various supermarkets and distributors.
[8]
To enhance consumer awareness and acceptance of the products, P&G entered into
contracts with Promm-Gem and SAPS for the promotion and merchandising of its products.[9]
In December 1991, petitioners filed a complaint[10] against P&G for regularization,
service incentive leave pay and other benefits with damages. The complaint was later
amended[11] to include the matter of their subsequent dismissal.
Ruling of the Labor Arbiter
On November 29, 1996, the Labor Arbiter dismissed the complaint for lack of
merit and ruled that there was no employer-employee relationship between petitioners and
P&G. He found that the selection and engagement of the petitioners, the payment of their

SO ORDERED.[16]
Petitioners filed a motion for reconsideration but the motion was also denied. Hence, this
petition.
Issues
Petitioners now come before us raising the following issues:
I.
WHETHER X X X THE HONORABLE COURT OF APPEALS
HAS COMMITTED [A] REVERSIBLE ERROR WHEN IT DID
NOT FIND THE PUBLIC RESPONDENTS TO HAVE ACTED

WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO

LACK OF OR IN EXCESS OF JURISDICTION IN RENDERING
THE QUESTIONED JUDGMENT WHEN, OBVIOUSLY, THE
PETITIONERS WERE ABLE TO PROVE AND ESTABLISH THAT
RESPONDENT PROCTER & GAMBLE PHILS., INC. IS THEIR
EMPLOYER AND THAT THEY WERE ILLEGALLY DISMISSED
BY THE FORMER.

facts of the NLRC, particularly where the NLRC and the Labor Arbiter are in agreement, are
deemed binding and conclusive on the Supreme Court.

II.
WHETHER X X X THE HONORABLE COURT OF APPEALS
HAS COMMITTED [A] REVERSIBLE ERROR WHEN IT DID
NOT DECLARE THAT THE PUBLIC RESPONDENTS HAD
ACTED WITH GRAVE ABUSE OF DISCRETION WHEN THE
LATTER DID NOT FIND THE PRIVATE RESPONDENTS LIABLE
TO THE PETITIONERS FOR PAYMENT OF ACTUAL, MORAL
AND EXEMPLARY DAMAGES AS WELL AS LITIGATION
COSTS AND ATTORNEYS FEES.[17]

P&G also contends that the Labor Code neither defines nor limits which services or
activities may be validly outsourced. Thus, an employer can farm out any of its activities to an
independent contractor, regardless of whether such activity is peripheral or core in nature. It
insists that the determination of whether to engage the services of a job contractor or to engage
in direct hiring is within the ambit of management prerogative.

Simply stated, the issues are: (1) whether P&G is the employer of petitioners; (2)
whether petitioners were illegally dismissed; and (3) whether petitioners are entitled for
payment of actual, moral and exemplary damages as well as litigation costs and attorneys fees.
Petitioners Arguments
Petitioners insist that they are employees of P&G. They claim that they were
recruited by the salesmen of P&G and were engaged to undertake merchandising chores for
P&G long before the existence of Promm-Gem and/or SAPS. They further claim that when
the latter had its so-called re-alignment program, petitioners were instructed to fill up
application forms and report to the agencies which P&G created.[18]
Petitioners further claim that P&G instigated their dismissal from work as can be
gleaned from its letter[19] to SAPS dated February 24, 1993, informing the latter that their
Merchandising Services Contract will no longer be renewed.
Petitioners further assert that Promm-Gem and SAPS are labor-only contractors
providing services of manpower to their client. They claim that the contractors have neither
substantial capital nor tools and equipment to undertake independent labor
contracting. Petitioners insist that since they had been engaged to perform activities which are
necessary or desirable in the usual business or trade of P&G, then they are its regular
employees.[20]
Respondents Arguments
On the other hand, P&G points out that the instant petition raises only questions of
fact and should thus be thrown out as the Court is not a trier of facts. It argues that findings of

P&G further argues that there is no employment relationship between it and

petitioners. It was Promm-Gem or SAPS that (1) selected petitioners and engaged their
services; (2) paid their salaries; (3) wielded the power of dismissal; and (4) had the power of
control over their conduct of work.

At this juncture, it is worth mentioning that on January 29, 2007, we deemed as

waived the filing of the Comment of Promm-Gem on the petition.[21] Also, although SAPS
was impleaded as a party in the proceedings before the Labor Arbiter and the NLRC, it was no
longer impleaded as a party in the proceedings before the CA.[22] Hence, our pronouncements
with regard to SAPS are only for the purpose of determining the obligations of P&G, if any.
Our Ruling
The petition has merit.
As a rule, the Court refrains from reviewing factual assessments of lower courts and
agencies exercising adjudicative functions, such as the NLRC. Occasionally, however, the
Court is constrained to wade into factual matters when there is insufficient or insubstantial
evidence on record to support those factual findings; or when too much is concluded, inferred
or deduced from the bare or incomplete facts appearing on record. [23] In the present case, we
find the need to review the records to ascertain the facts.
Labor-only contracting and job contracting
In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to
first determine whether Promm-Gem and SAPS are labor-only contractors or legitimate job
contractors.
The pertinent Labor Code provision on the matter states:
ART. 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person for the performance
of the formers work, the employees of the contractor and of the latters
subcontractor, if any, shall be paid in accordance with the provisions of
this Code.

In the event that the contractor or subcontractor fails to pay

the wages of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or subcontractor
to such employees to the extent of the work performed under the
contract, in the same manner and extent that he is liable to employees
directly employed by him.
The Secretary of Labor may, by appropriate regulations,
restrict or prohibit the contracting out of labor to protect the rights of
workers established under this Code. In so prohibiting or restricting, he
may make appropriate distinctions between labor-only contracting and
job contracting as well as differentiations within these types of
contracting and determine who among the parties involved shall be
considered the employer for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code.
There is labor-only contracting where the person supplying
workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business
of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible
to the workers in the same manner and extent as if the latter were
directly employed by him. (Emphasis and underscoring supplied.)
Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code, as
amended by Department Order No. 18-02,[24] distinguishes between legitimate and labor-only
contracting:

Section 5. Prohibition against labor-only contracting. Laboronly contracting is hereby declared prohibited. For this purpose, laboronly contracting shall refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to perform a
job, work or service for a principal, and any of the following elements
are present:
i) The contractor or subcontractor does not have substantial
capital or investment which relates to the job, work or service to be
performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly
related to the main business of the principal; or
ii) [T]he contractor does not exercise the right to control
over the performance of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the
application of Article 248 (c) of the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and
subscribed capitalization in the case of corporations, tools, equipment,
implements, machineries and work premises, actually and directly used by the
contractor or subcontractor in the performance or completion of the job, work
or service contracted out.
The right to control shall refer to the right reserved to the person
for whom the services of the contractual workers are performed, to determine
not only the end to be achieved, but also the manner and means to be used in
reaching that end.

xxxx
Section 3. Trilateral Relationship in Contracting
Arrangements. In legitimate contracting, there exists a trilateral
relationship under which there is a contract for a specific job, work or
service between the principal and the contractor or subcontractor, and a
contract of employment between the contractor or subcontractor and its
workers. Hence, there are three parties involved in these arrangements,
the principal which decides to farm out a job or service to a contractor or
subcontractor, the contractor or subcontractor which has the capacity to
independently undertake the performance of the job, work or service,
and the contractual workers engaged by the contractor or subcontractor
to accomplish the job[,] work or service.
xxxx

x x x x (Underscoring supplied.)
Clearly, the law and its implementing rules allow contracting arrangements for the
performance of specific jobs, works or services. Indeed, it is management prerogative to farm
out any of its activities, regardless of whether such activity is peripheral or core in
nature. However, in order for such outsourcing to be valid, it must be made to anindependent
contractor because the current labor rules expressly prohibit labor-only contracting.
To emphasize, there is labor-only contracting when the contractor or sub-contractor
merely recruits, supplies or places workers to perform a job, work or service for a
principal[25] and any of the following elements are present:
i) The contractor or subcontractor does not have substantial
capital or investment which relates to the job, work or service to be
performed and the employees recruited, supplied or placed by such

contractor or subcontractor are performing activities which are directly

related to the main business of the principal; or
ii) The contractor does not exercise the right to control over
the performance of the work of the contractual employee.
(Underscoring supplied)
In the instant case, the financial statements[26] of Promm-Gem show that it
has authorized capital stock of P1 million and a paid-in capital, or capital available for
operations, of P500,000.00 as of 1990.[27] It also has long term assets worth P432,895.28 and
current assets of P719,042.32. Promm-Gem has also proven that it maintained its own
warehouse and office space with a floor area of 870 square meters. [28] It also had under its
name three registered vehicles which were used for its promotional/merchandising business.
[29]
Promm-Gem also has other clients[30] aside from P&G.[31] Under the circumstances, we find
that Promm-Gem has substantial investment which relates to the work to be performed. These
factors negate the existence of the element specified in Section 5(i) of DOLE Department
Order No. 18-02.
The records also show that Promm-Gem supplied its complainant-workers with the
relevant materials, such as markers, tapes, liners and cutters, necessary for them to perform
their work. Promm-Gem also issued uniforms to them. It is also relevant to mention that
Promm-Gem already considered the complainants working under it as its regular, not merely
contractual or project, employees.[32] This circumstance negates the existence of element (ii) as
stated in Section 5 of DOLE Department Order No. 18-02, which speaks
of contractual employees. This, furthermore, negates on the part of Promm-Gem bad faith and
intent to circumvent labor laws which factors have often been tipping points that lead the Court
to strike down the employment practice or agreement concerned as contrary to public policy,
morals, good customs or public order.[33]
Under the circumstances, Promm-Gem cannot be considered as a labor-only
contractor. We find that it is a legitimate independent contractor.
On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in
capital of only P31,250.00. There is no other evidence presented to show how much its
working capital and assets are. Furthermore, there is no showing of substantial investment in
tools, equipment or other assets.
In Vinoya v. National Labor Relations Commission,[34] the Court held that [w]ith
the current economic atmosphere in the country, the paid-in capitalization of PMCI amounting
to P75,000.00 cannot be considered as substantial capital and, as such, PMCI cannot qualify as
an independent contractor.[35] Applying the same rationale to the present case, it is clear that
SAPS having a paid-in capital of only P31,250 - has no substantial capital. SAPS lack of
substantial capital is underlined by the records [36] which show that its payroll for its
merchandisers alone for one month would already total P44,561.00. It had 6-month contracts
with P&G.[37] Yet SAPS failed to show that it could complete the 6-month contracts using its

own capital and investment. Its capital is not even sufficient for one months payroll. SAPS
failed to show that its paid-in capital of P31,250.00 is sufficient for the period required for it to
generate its needed revenue to sustain its operations independently. Substantial capital refers to
capitalization used in the performance or completion of the job, work or service contracted
out. In the present case, SAPS has failed to show substantial capital.
Furthermore, the petitioners have been charged with the merchandising and
promotion of the products of P&G, an activity that has already been considered by the Court as
doubtlessly directly related to the manufacturing business,[38] which is the principal business of
P&G. Considering that SAPS has no substantial capital or investment and the workers it
recruited are performing activities which are directly related to the principal business of P&G,
we find that the former is engaged in labor-only contracting.
Where labor-only contracting exists, the Labor Code itself establishes an employeremployee relationship between the employer and the employees of the labor-only contractor.
[39]
The statute establishes this relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only contractor as if such
employees had been directly employed by the principal employer.[40]
Consequently, the following petitioners, having been recruited and supplied
by SAPS[41] -- which engaged in labor-only contracting -- are considered as the employees of
P&G: Arthur Corpuz, Eric Aliviado, Monchito Ampeloquio, Abraham Basmayor, Jr.,
Jonathan Mateo, Lorenzo Platon, Estanislao Buenaventura, Lope Salonga, Franz David,
Nestor Ignacio, Jr., Rolando Romasanta, Roehl Agoo, Bonifacio Ortega, Arsenio Soriano, Jr.,
Arnel Endaya, Roberto Enriquez, Edgardo Quiambao, Santos Bacalso, Samson Basco,
Alstando Montos, Rainer N. Salvador, Pedro G. Roy, Leonardo F. Talledo, Enrique F. Talledo,
Joel Billones, Allan Baltazar, Noli Gabuyo, Gerry Gatpo, German Guevara, Gilbert V.
Miranda, Rodolfo C. Toledo, Jr., Arnold D. Laspoa, Philip M. Loza, Mario N. Coldayon,
Orlando P. Jimenez, Fred P. Jimenez, Restituto C. Pamintuan, Jr., Rolando J. De Andres, Artuz
Bustenera, Jr., Roberto B. Cruz, Rosedy O. Yordan, Orlando S. Balangue, Emil Tawat,
Cresente J. Garcia, Melencio Casapao, Romeo Vasquez, Renato dela Cruz, Romeo Viernes, Jr.,
Elias Basco and Dennis Dacasin.
The following petitioners, having worked under, and been dismissed by PrommGem, are considered the employees of Promm-Gem, not of P&G: Wilfredo Torres, John
Sumergido, Edwin Garcia, Mario P. Liongson, Jr., Ferdinand Salvo, Alejandrino Abaton,
Emmanuel A. Laban, Ernesto Soyosa, Aladino Gregore, Jr., Ramil Reyes, Ruben Vasquez, Jr.,
Maximino Pascual, Willie Ortiz, Armando Villar, Jose Fernando Gutierrez, Ramiro Pita,
Fernando Macabenta, Nestor Esquila, Julio Rey, Albert Leynes, Ernesto Calanao, Roberto
Rosales, Antonio Dacuma, Tadeo Durano, Raul Dulay, Marino Maranion, Joseph Banico,
Melchor Cardano, Reynaldo Jacaban, and Joeb Aliviado.[42]
Termination of services

We now discuss the issue of whether petitioners were illegally dismissed. In cases
of regular employment, the employer shall not terminate the services of an employee except
for a just[43] or authorized[44] cause.
In the instant case, the termination letters given by Promm-Gem to its employees uniformly
specified the cause of dismissal as grave misconduct and breach of trust, as follows:
xxxx
This informs you that effective May 5, 1992, your
employment with our company, Promm-Gem, Inc. has been
terminated. We find your expressed admission, that you considered
yourself as an employee of Procter & Gamble Phils., Inc. and assailing
the integrity of the Company as legitimate and independent promotion
firm, is deemed as an act of disloyalty prejudicial to the interests of our
Company: serious misconduct and breach of trust reposed upon you as
employee of our Company which [co]nstitute just cause for the
termination of your employment.
x x x x[45]
Misconduct has been defined as improper or wrong conduct; the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty, unlawful in
character implying wrongful intent and not mere error of judgment. The misconduct to be
serious must be of such grave and aggravated character and not merely trivial and unimportant.
[46]
To be a just cause for dismissal, such misconduct (a) must be serious; (b) must relate to the
performance of the employees duties; and (c) must show that the employee has become unfit
to continue working for the employer.[47]
In other words, in order to constitute serious misconduct which will warrant the dismissal of an
employee under paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act
or conduct complained of has violated some established rules or policies. It is equally
important and required that the act or conduct must have been performed with wrongful intent.
[48]
In the instant case, petitioners-employees of Promm-Gem may have committed an error of
judgment in claiming to be employees of P&G, but it cannot be said that they were motivated
by any wrongful intent in doing so. As such, we find them guilty of only simple misconduct
for assailing the integrity of Promm-Gem as a legitimate and independent promotion firm. A
misconduct which is not serious or grave, as that existing in the instant case, cannot be a valid
basis for dismissing an employee.
Meanwhile, loss of trust and confidence, as a ground for dismissal, must be based on the
willful breach of the trust reposed in the employee by his employer. Ordinary breach will not
suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely, without
justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.[49]

Loss of trust and confidence, as a cause for termination of employment, is premised

on the fact that the employee concerned holds a position of responsibility or of trust and
confidence. As such, he must be invested with confidence on delicate matters, such as custody,
handling or care and protection of the property and assets of the employer. And, in order to
constitute a just cause for dismissal, the act complained of must be work-related and must
show that the employee is unfit to continue to work for the employer.[50] In the instant case, the
petitioners-employees of Promm-Gem have not been shown to be occupying positions of
responsibility or of trust and confidence. Neither is there any evidence to show that they are
unfit to continue to work as merchandisers for Promm-Gem.
All told, we find no valid cause for the dismissal of petitioners-employees of Promm-Gem.
While Promm-Gem had complied with the procedural aspect of due process in
terminating the employment of petitioners-employees, i.e., giving two notices and in between
such notices, an opportunity for the employees to answer and rebut the charges against them, it
failed to comply with the substantive aspect of due process as the acts complained of neither
constitute serious misconduct nor breach of trust. Hence, the dismissal is illegal.
With regard to the petitioners placed with P&G by SAPS, they were given no written notice of
dismissal. The records show that upon receipt by SAPS of P&Gs letter terminating their
Merchandising Services Contact effective March 11, 1993, they in turn verbally informed the
concerned petitioners not to report for work anymore. The concerned petitioners related their
dismissal as follows:
xxxx
5. On March 11, 1993, we were called to a meeting at SAPS office. We
were told by Mr. Saturnino A. Ponce that we should already stop
working immediately because that was the order of Procter and
Gamble. According to him he could not do otherwise because Procter
and Gamble was the one paying us. To prove that Procter and Gamble
was the one responsible in our dismissal, he showed to us the
letter[51] dated February 24, 1993, x x x
February 24, 1993
Sales and Promotions Services
Armons Bldg., 142 Kamias Road,
Quezon City
Attention: Mr. Saturnino A. Ponce
President & General Manager
Gentlemen:

Based on our discussions last 5 and 19 February 1993,

this formally informs you that we will not be
renewing our Merchandising Services Contract
with your agency.
Please immediately undertake efforts to ensure that
your services to the Company will terminate
effective close of business hours of 11 March
1993.

With regard to the employees of Promm-Gem, there being no evidence of bad faith, fraud or
any oppressive act on the part of the latter, we find no support for the award of damages.

This is without prejudice to whatever obligations you

may have to the company under the
abovementioned contract.
Very truly yours,

As for P&G, the records show that it dismissed its employees through SAPS in a manner
oppressive to labor. The sudden and peremptory barring of the concerned petitioners from
work, and from admission to the work place, after just a one-day verbal notice, and for no
valid cause bellows oppression and utter disregard of the right to due process of the concerned
petitioners. Hence, an award of moral damages is called for.

(Sgd.)
EMMANUEL M. NON
Sales Merchandising III

Attorneys fees may likewise be awarded to the concerned petitioners who

were illegally dismissed in bad faith and were compelled to litigate or incur expenses to
protect their rights by reason of the oppressive acts[56] of P&G.

6. On March 12, 1993, we reported to our respective outlet

assignments. But, we were no longer allowed to work and we were
refused entrance by the security guards posted. According to the
security guards, all merchandisers of Procter and Gamble under S[APS]
who filed a case in the Dept. of Labor are already dismissed as per letter
of Procter and Gamble dated February 25, 1993. x x x[52]
Neither SAPS nor P&G dispute
the
existence
of these
circumstances. Parenthetically, unlike Promm-Gem which dismissed its employees for grave
misconduct and breach of trust due to disloyalty, SAPS dismissed its employees upon the
initiation of P&G. It is evident that SAPS does not carry on its own business because the
termination of its contract with P&G automatically meant for it also the termination of its
employees services. It is obvious from its act that SAPS had no other clients and had no
intention of seeking other clients in order to further its merchandising business. From all
indications SAPS, existed to cater solely to the need of P&G for the supply of employees in the
latters merchandising concerns only. Under the circumstances prevailing in the instant case, we
cannot consider SAPS as an independent contractor.
Going back to the matter of dismissal, it must be emphasized that the onus
probandi to prove the lawfulness of the dismissal rests with the employer. [53] In termination
cases, the burden of proof rests upon the employer to show that the dismissal is for just and
valid cause.[54] In the instant case, P&G failed to discharge the burden of proving the legality
and validity of the dismissals of those petitioners who are considered its employees. Hence, the
dismissals necessarily were not justified and are therefore illegal.
Damages

We now go to the issue of whether petitioners are entitled to damages. Moral

and exemplary damages are recoverable where the dismissal of an employee was attended by
bad faith or fraud or constituted an act oppressive to labor or was done in a manner contrary to
morals, good customs or public policy.[55]

Lastly, under Article 279 of the Labor Code, an employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other privileges,
inclusive of allowances, and other benefits or their monetary equivalent from the time the
compensation was withheld up to the time of actual reinstatement. [57] Hence, all the petitioners,
having been illegally dismissed are entitled to reinstatement without loss of seniority rights and
with full back wages and other benefits from the time of their illegal dismissal up to the time of
their actual reinstatement.
WHEREFORE, the petition is GRANTED. The Decision dated March 21, 2003 of the
Court of Appeals in CA-G.R. SP No. 52082 and the Resolution dated October 20,
2003are REVERSED and SET ASIDE. Procter & Gamble Phils., Inc. and Promm-Gem,
Inc. are ORDERED to reinstate their respective employees immediately without loss of
seniority rights and with full backwages and other benefits from the time of their illegal
dismissal up to the time of their actual reinstatement. Procter & Gamble Phils., Inc. is
further ORDERED to pay each of those petitioners considered as its employees, namely
Arthur Corpuz, Eric Aliviado, Monchito Ampeloquio, Abraham Basmayor, Jr., Jonathan
Mateo, Lorenzo Platon, Estanislao Buenaventura, Lope Salonga, Franz David, Nestor Ignacio,
Rolando Romasanta, Roehl Agoo, Bonifacio Ortega, Arsenio Soriano, Jr., Arnel Endaya,
Roberto Enriquez, Edgardo Quiambao, Santos Bacalso, Samson Basco, Alstando Montos,
Rainer N. Salvador, Pedro G. Roy, Leonardo F. Talledo, Enrique F. Talledo, Joel Billones,
Allan Baltazar, Noli Gabuyo, Gerry Gatpo, German Guevara, Gilbert Y. Miranda, Rodolfo C.
Toledo, Jr., Arnold D. Laspoa, Philip M. Loza, Mario N. Coldayon, Orlando P. Jimenez, Fred
P. Jimenez, Restituto C. Pamintuan, Jr., Rolando J. De Andres, Artuz Bustenera, Jr., Roberto B.
Cruz, Rosedy O. Yordan, Orlando S. Balangue, Emil Tawat, Cresente J. Garcia, Melencio
Casapao, Romeo Vasquez, Renato dela Cruz, Romeo Viernes, Jr., Elias Basco and Dennis

Dacasin, P25,000.00 as moral damages plus ten percent of the total sum as and for attorneys
fees.

Let this case be REMANDED to the Labor Arbiter for the computation, within 30 days from
receipt of this Decision, of petitioners backwages and other benefits; and ten percent of the
total sum as and for attorneys fees as stated above; and for immediate execution.