Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 119500 August 28, 1998 PAGUIO TRANSPORT CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION an !IL"RE#O MELC$OR, respondents. PANGANIBAN, J.: In dismissing the petition, this Court reiterates the following doctrines: (1) the "boundary system" used in ta i (and !eepney) operations presupposes an employer"employee relation# ($) the employer must prove !ust (or authori%ed) cause and due process to !ustify dismissal of an employee# (&) strained relations must be demonstrated as a fact# and (') bac( wages and reinstatement are necessary conse)uences of illegal dismissal. The Case *efore us is a petition for certiorari and prohibition with preliminary in!unction, assailing the +ecember 1,, 1--' +ecision of the .ational /abor 0elations Commission 1 in ./0C .C0 Case .o. 11"1$"112,'"-' entitled "3ilfredo 4elchor vs. 5aguio 6ransport Corporation78erafin 5aguio." 6he dispositive portion of the challenged +ecision reads:
39:0:;<0:, premises considered, the appeal insofar as it see(s reversal of the finding on illegal dismissal is denied for lac( of merit. 6he decision declaring that complainant was illegally dismissed is affirmed. 6he decision is however partially modified insofar as liability therefor is concerned. 6he liability shall inure against 5=>?I< 60=.85<06 C<05<0=6I<., sub!ect to the provision of the Corporation Code and the 0ules of Court on matters ta(en herein. 6he bac(wages as computed in the assailed decision is set aside, and a new one is hereby provided in the amount of 5@,,'11.11 as computed in the immediately preceding paragraph.

5etitioner also impugns the ;ebruary $1, 1--2 ./0C 0esolution 2 denying the motion for reconsideration. 6he Aune $@, 1--' +ecision of the labor arbiter, % which the ./0C modified as to the amount of bac( wages, disposed as follows:
39:0:;<0:, the respondents are hereby ordered to reinstate the complainant with full bac(wages from the time his salaries were withheld from him until his actual reinstatement. 6he respondents are further ordered to pay him his 1&th month pay in the amount of 52,,11.11. ComplainantBs bac(wages up to the date of this +ecision as computed by /:I/=.I :. C=/=/=.> of the CommissionBs ./0C .C0 *ranch is: 117$@7-& " ,7$@7-' C D mos. 5@11.11 & days ' wee(s C 5-,,11.11 5-,,11.11 D mos. C 5,D,$11.11 6he aspect of reinstatement either in the !ob or payroll at the option of the employers being immediately e ecutory pursuant to =rticle $$& of the /abor Code, the respondents are hereby directed to so reinstate him when he reports for wor( by virtue of this +ecision. <ther claims are hereby dismissed for lac( of evidence.

The Facts 6he facts, as summari%ed in the challenged +ecision, are as follows:
Complainant 3ilfredo 4elchor was hired by respondent company as a ta i driver on $2 +ecember 1--$ under the "EbFoundary EsFystem. 9e EwasF engaged to drive the ta i unit assigned to him on a $'"hour schedule per trip every two ($) days, for which he used to earn an average income from 5211 to 5D11 per trip, e clusive of the 5,21.11 boundary and other deductions imposed on him. <n $' EsicF .ovember 1--&, complainant allegedly met a vehicular accident along Guirino =venue near the 5.0 8tation and 5la%a +ilao when he accidentally bumped a car which stopped at the intersection even when the traffic light was green and go. =fter he submitted the traffic accident report to the office of respondents, he was allegedly advised to stop wor(ing and have a rest. =fter several daysE,F he allegedly reported for wor( only to be told that his service was no longer needed. 9ence, the complaint for illegal dismissal, among others. 0espondentEsF for their part maintained that complainant was not illegally dismissed, there being in the first place no employer"employee relationship between them. In amplification, it was argued that the element of control which EwasF a paramount test to determine the e istence of such a relationship EwasF lac(ing. 8o too, it argued the element of the payment of compensation. Considering that in lieu of the latter, payment of boundary is instead made allegedly ma(es the relationship between them of a "wase"agreement" E sicF. 0espondents then argued that even if an employer" employee relationship were to be presumed as present, still complainantBs termination arose out of a valid cause and

after he refused to articulate his stand on the investigation being conducted on him. 0espondents then harped on the supposed three occasions when complainant figured in a vehicular accident involving the ta i unit he was driving, viz: <n =ugust &, which resulted in damages to the respondent in the amount of 5121.11# <n =ugust ' which again resulted EinF the damages to the respondent in the amount of 5,12.11# and, again on ' .ovember 1--&, the mishap costing the respondents this time 5$2,&D1.11 in damages. =s a result of the alleged compounded damages which the respondents had to shoulder on account of the supposed rec(less driving of the complainant, the former was allegedly left with no alternative but to as( complainantBs e planation why he should still be allowed to drive. Complainant, & despite several chances, allegedly failed to do so.

Ruling of the NLRC 6he ./0C held that private respondent was an illegally dismissed employee of petitioner. ?pholding the e istence of an employer"employee relationship, it cited Doce v. WCC, 5 in which the 8upreme Court ruled that "the relationship created between the parties operating under a Bboundary systemB is one of an employer and employee, and not of a lessor and a lessee." ' 6he ./0C sustained the ruling of the labor arbiter that the private respondent was illegally dismissed, for he "was not afforded the twin re)uirements of due process . . . ." ( It re!ected petitionerBs claim that private respondent had figured in three vehicular incidents because of his rec(less driving. It found that "e cept for petitionerBs bare statements, no proof was presented to establish with particularity the circumstances being claimed. . . . 6he guilt and culpability of Eprivate respondentF which would give EpetitionerF valid ground to effect his dismissal cannot be established by a mere allegation of his rec(less driving." 8 5ublic 0espondent ./0C found petitioner liable for bac( wages in the amount of 5@,,'11, and not 5,D,$11 as computed by the labor arbiter. It found, however, that this liability should be imposed on 5etitioner Corporation only, and not on its president who was also impleaded by private respondent. 9ence, this petition. 9 Issues 5etitioner raises the following issues:
a. 3hether or not public respondent Commission acted in e cess of !urisdiction and7or with grave abuse of discretion amounting to lac( of !urisdiction in ordering the reinstatement of private respondent with full bac(wages, despite its strained relations with the petitioner and the reinstatement would, in effect, be inimical to the interest of the latter in particular, and to the riding public in general# b. 3hether or not public respondent acted in e cess of !urisdiction and7or with grave abuse of discretion in refusing to 10 reconsider its decision and resolution complained of despite the facts prevailing to support the reconsideration.

In resolving the petition, we shall address the following points: (1) employer"employee relation, ($) presence of !ust cause, (&) due process, (') strained relationship, and (2) propriety of reinstatement and bac(wages. The Court's Ruling 6he petition is not meritorious. First Issue: Emplo er!Emplo ee Relation ?nder the "boundary system," private respondent was engaged to drive petitionerBs ta i unit on a $'"hour schedule every two days. <n each such trip, private respondent remitted to petitioner a "boundary" of 5,21. 3hatever he earned in e cess of that amount was considered his income. 5etitioner argues that under said arrangement, he had no control over the number of hours private respondent had to wor( and the routes he had to ta(e. 6herefore, he concludes that the employer" employee relationship cannot be deemed to e ist. 5etitionerBs contention is not novel. In "artinez v. National La#or Relations Commission, 11 this Court already ruled that the relationship of ta i owners and ta i drivers is the same as that between !eepney owners and !eepney drivers under the "boundary system." In both cases, the employer"employee relationship was deemed to e ist, viz.:
6he relationship between !eepney owners7operators on one hand and !eepney drivers on the other under the boundary system is that of employer"employee and not of lessor"lessee. . . . In the lease of chattelsE,F the lessor loses complete control over the chattel leased . . . . In the case of !eepney owners7operators and !eepney drivers, the former e ercise supervision and control over the latter. 6he fact that the drivers do not receive fi ed wages but get only the e cess of that so"called boundary they pay to the owner7operator is not sufficient to withdraw the relationship between them from that of employer and employee. 6he doctrine is applicable in the present case. 6hus, private respondents were employees. . . because they had been engaged to perform activities which were usually necessary or desirable in the 12 usual trade or business of the employer.

$econ% Issue: &ust Cause

5etitioner also asserts that private respondentBs involvement in three vehicular accidents within a span of several months constitutes !ust cause for his dismissal. It alleges that, according to the police report concerning the most recent and serious vehicular mishap, it was private respondent who was at fault and that the "city prosecutor of Gue%on City recommended that an Information for rec(less imprudence resulting in damage to property be filed against him." 1% 5etitioner, however, did not submit any proof to support these allegations. 3ell"settled is the rule that the employer has the burden of proving that the dismissal of an employee is for a !ust cause. 6he failure of the employer to discharge this burden means that the dismissal is not !ustified and that the employee is entitled to reinstatement and bac(wages. 1& In this case, petitioner failed to prove any !ust or authori%ed cause for his dismissal. 5rivate respondent, therefore, must be deemed illegally dismissed. 15 5etitioner contends that he "submitted and presented material and competent documentary evidence consisting of police reports of vehicular accidents of ta icab units owned by petitioner and driven by private respondent, the repairs and e penses suffered by the petitioner as a result thereof and the resolution of the EcFity EpFrosecutor of Gue%on City finding private respondent at fault for the .ovember ', 1--& vehicular accident caused by the latter." 1' =dding that the submission of these documents only on appeal does not diminish their probative value, petitioner cites =rticle $$1 of the /abor Code which reads:
=rt. $$1. Technical rules not #in%ing an% prior resort to amica#le settlement . H In any proceeding before the Commission or any of the /abor =rbiters, the rules of procedure prevailing in courts of law and e)uity shall not be controlling and it is the spirit and intention of the Code that the Commission and its members and the /abor =rbiters shall use every and all reasonable means to ascertain the facts in each case speedily and ob!ectively without regard to technicalities of law and procedure, all in the interest of due process. In any proceeding before the Commission or any /abor =rbiter, the parties may be represented by legal counsel but it shall be the duty of the Chairman, any 5residing Commissioner or Commissioner or any /abor =rbiter to e ercise complete control of the proceedings at all stages. =ny provision of law to the contrary notwithstanding, the /abor =rbiter shall e ert all efforts towards EtFhe amicable settlement of a labor dispute within his !urisdiction on or before the first hearing. 6he same rule shall apply to the Commission in the e ercise of its original !urisdiction.

9owever, a careful e amination of both the original Complaint and the 5etitionerBs 4emorandum of =ppeal from the labor arbiterBs +ecision reveals that said pieces of documentary evidence were not mentioned or included therein, 1( but were submitted by petitioner only when he filed his present petition with this Court. 6hese pieces of evidence were attached and referred to as =nne es ">", "9", "I", "A", "I" and "/" of the said petition. 8uch factual issues cannot be resolved in a petition for certiorari li(e the present case, because the CourtBs review of ./0C decisions is limited to )uestions of !urisdiction and grave abuse of discretion. In '"I Colleges v. NLRC, 18 the Court held:
6his Court is definitely not the proper venue to consider this matter for it is not a trier of facts. . . . Certiorari is a remedy narrow in its scope and infle ible in character. It is not a general utility tool in the legal wor(shop. ;actual issues are not a proper sub!ect for certiorari, as the power of the 8upreme Court to review labor cases is limited to the issue of !urisdiction and grave abuse of discretion. . . . . <f the same tenor was our dis)uisition in Ilocos $ur Electric Cooperative( Inc. v. NLRC where we made plain that: In certiorari proceedings under 0ule ,2 of the 0ules of Court, !udicial review by this Court does not go so far as to evaluate the sufficiency of evidence upon which the /abor =rbiter and the ./0C based their determinations, the in)uiry being limited essentially to whether or not said public respondents had acted without or in e cess of EtheirF !urisdiction or with grave abuse of discretion. . . . <ur deference to the e pertise ac)uired by )uasi"!udicial agencies and the limited scope granted us in the e ercise of certiorari !urisdiction restrain us from going so far as to probe into the correctness of a tribunalBs evaluation of evidence, unless there is a palpable mista(e and complete disregard thereof in which case certiorari would be proper. In plain terms, in certiorari proceedings, we are concerned with mere errors of !urisdiction and not errors of !udgment.

:)ually devoid of correctness is petitionerBs claim that the documents should be considered, pursuant to =rticle $$1 of the /abor Code which stares that technical rules are not binding in proceedings before the labor arbiters and the ./0C. 6he 8upreme Court is not a trier of facts# as earlier stated, its !urisdiction in a petition for certiorari, li(e the present case, is confined to )uestions of !urisdiction and grave abuse of discretion. 6he une plained failure of petitioner to present its evidence before the labor arbiter and the ./0C cannot compel this Court to e pand the scope of its review. Indeed, petitioner has not proffered a sufficient reason for this Court to do so. 5etitionerBs reliance on Canete v. National La#or Relations Commission 19 is misplaced. In that case, the documents were submitted to the ./0C before they were tac(led by the 8upreme Court. 5rivate respondentBs admission that he was involved in the .ovember ', 1--& accident did not give petitioner a !ust cause to dismiss him. 4ere involvement in an accident, absent any showing of fault or rec(lessness on the part of an employee, is not a valid ground for dismissal.

Thir% Issue: No Due 'rocess 5etitioner insists that private respondent was accorded due process, because he was allowed to e plain his side and to show cause why he should still be allowed to act as one of petitionerBs drivers. 6his does not persuade. 6he Court has consistently held that in the dismissal of employees, the twin re)uirements of notice and hearing are essential elements of due process. 6he employer must furnish the wor(er two written notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought and ($) the other to inform him of his employerBs decision to dismiss him. =s to the re)uirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not always and indispensably in an actual hearing. 20 In the present case, petitioner failed to present proof, other than its bare allegations, that it had complied with these re)uirements. 21 3e reiterate: the burden of proof rests on the employer. 5rivate respondent, in fact, was not given notice that he was being dismissed. 3hen ordered to e plain the vehicular accident that happened on .ovember ', 1--&, he was not informed that petitioner was contemplating his dismissal and that his involvement in said vehicular accident was the cause thereof. 5rivate respondent was merely as(ed to e plain the vehicular accident per se, not his defense against a charge of dismissal arising from the vehicular accident. 9e became aware of his employerBs intention to dismiss him only when he was actually told not to report for wor( anymore. Fourth Issue: $traine% Relations .otwithstanding its failure to prove !ust cause and due process in the dismissal of private respondent, petitioner see(s to bar his reinstatement by invo(ing the doctrine of strained relations. It contends that as a result of private respondentBs "rec(less and incompetent manner of driving . . ., compounded by the damages suffered by petitioner in terms of repairs, related e penses, and the institution of the instant case, the relationship between the parties are so strained as to preclude a harmonious wor(ing atmosphere to the pre!udice of the petitioner as well as private respondent." 22 3e are not persuaded. 8trained relations must be demonstrated as a fact. 5etitioner failed to do so. Its allegation that private respondent was incompetent and rec(less in his manner of driving, which led to the his involvement in three vehicular accidents, is not supported by the records. =s earlier noted, no evidence was properly submitted by petitioner to prove or give credence to his assertions. 6hus, 0espondent ./0C ruled:
+espite allegation on the matter, not an iota of proof was presented to establish the claim. 6his observation e)ually applies to the allegation that complainants, in three (&) occasions had figured in EaF vehicular accident due to his 2% rec(less driving . . . .

*ecause the claim of petitioner has no factual basis, the doctrine on strained relations cannot be applied in this case. 4oreover, the filing of the Complaint for illegal dismissal does not by itself !ustify the invocation of this doctrine. =s the Court held in Capili vs. NLRC: 2&
. . . E6Fhe doctrine on "strained relations" cannot be applied indiscriminately since every labor dispute almost invariably results in "strained relations"# otherwise, reinstatement can never be possible simply because some hostility is engendered between the parties as a result of their disagreement. 6hat is human nature.

Fifth Issue: Reinstatement an% )ac* Wages *ecause he was illegally dismissed, private respondent is entitled to reinstatement and bac( wages pursuant to 8ection $D- of the /abor Code, which reads:
=rt. $D-. 8ecurity of 6enure. H In cases of regular employment, the employer shall not terminate the services of an employee e cept for a !ust cause or when authori%ed by this 6itle. =n employee who is un!ustly dismissed from wor( shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full #ac*+ages, inclusive of allowances, and to his other benefits or their monetary e)uivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

Interpreting this provision, the Court held in )ustamante v. NLRC 25 that illegally dismissed employees are entitled to full bac( wages without conditions or limitations, viz.:
. . . E=F closer adherence to the legislative policy behind 0ep. =ct .o. ,D12 points to "full bac(wages" as meaning e actly that, i.e., without deducting from bac(wages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for "full bac(wages" to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation.

6he labor arbiter awarded bac( wages in the sum of 5,D,$11 based on the following computation:
117$@7-& " ,7$@7-' C D mos.

5@11.11 5-,,11

& days

' wee(s C 5,,,11.11

2'

D mos. C 5,D,$11.11

In modifying the foregoing award, the ./0C relied on this other formula:
117$@7-& " 117$@7-' C 1$ months 5,11.11 & days ' wee(s C 5 D,$11.11 5D,$11 1$ months C 5@,,'11.11.
2(

=lthough the ./0C ad!usted the amount of private respondentBs monthly income and the period during which bac( wages may be awarded, neither the petitioner nor the private respondent )uestioned the new computation. =ccordingly we sustain the award but stress that the bac( wages ought to be computed from the time of the illegal dismissal to the time of reinstatement, either actual or in the payroll, without any deduction or )ualification. 39:0:;<0:, the petition is hereby +I84I88:+ for utter lac( merit, and the assailed +ecision and 0esolution are hereby =;;I04:+. Costs against petitioners. 8< <0+:0:+. Davi%e( &r. an% ,itug( &&.( concur. )ellosillo( &.( too* no part. -uisum#ing( &.( concurs in the result.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 148508 May 20, 2004 R TRANSPORT CORPORATION, petitioner, vs. ROGELIO EJANDRA, respon ent. D!"ISION CORONA, J.: #efore us is a petition for revie$ of the ecision% of the "ourt of &ppeals' ate Dece(ber '', '))) is(issin* the petition for certiorari of the ecision of the National +abor Relations "o((ission, -N+R". ate Ma/ ,), %001. The latter affir(e the ecision2 of the labor arbiter ate Februar/ '1, %001 hol in* petitioner liable for ille*al is(issal an irectin* private respon ent3s reinstate(ent. Private respon ent Ro*elio !4an ra alle*e that, for al(ost si5 /ears, fro( 6ul/ %7, %00) to 6anuar/ ,%, %008, he $or9e as a bus river of petitioner R Transport "orporation. He plie the route :Muntilupa;&laban*;Malan a/;Monu(ento;<!;+etre;San*an aan: fro( 7=)) a.(. up to '=)) a.(. the ne5t a/ an $as pai %)> of his ail/ earnin*s. On 6anuar/ ,%, %008, an officer of the +an Transportation Office -+TO., ?ua alupe #ranch, Ma9ati "it/, apprehen e hi( for obstruction of traffic for $hich his license $as confiscate . <pon his arrival at petitioner3s *ara*e, he i((e iatel/ reporte the inci ent to his (ana*er, Mr. Oscar Pas@uin, $ho *ave hi( P7)) to re ee( his license. The follo$in* a/, he $ent to +TO, ?ua alupe #ranch, to clai( it but he $as tol that it ha not /et been turne over b/ the officer $ho apprehen e hi(. He $as able to retrieve his license onl/ after a $ee9. On Februar/ A, %008, private respon ent infor(e Mr. Pas@uin that he $as rea / to report for $or9. Ho$ever, he $as tol that the co(pan/ $as still stu /in* $hether to allo$ hi( to rive a*ain. Private respon ent $as li9e$ise accuse of causin* a(a*e to the bus he use to rive. Den/in* the char*e, private respon ent bla(e the person $ho rove the sai bus urin* his

absence, consi erin* that the a(a*e $as sustaine urin* the $ee9 that he i not rive the bus. Mr. Pac@uin nonetheless tol hi( :Magpahinga ka muna at tatawagin ka na lang namin kung kailangan ka na para magmaneho. Magbakasyon ka muna, bata.: Bhen respon ent as9e ho$ lon* he ha to rest, the (ana*er i not *ive a efinite ti(e. Petitioner enie private respon ent3s alle*ations an clai(e that private respon ent, a habitual absentee, aban one his 4ob. To belie private respon ent3s alle*ation that his license ha been confiscate , petitioner asserte that, ha it been true, he shoul have presente an apprehension report an infor(e petitioner of his proble(s $ith the +TO. #ut he i not. Petitioner further ar*ue that private respon ent $as not an e(plo/ee because theirs $as a contract of lease an not of e(plo/(ent, $ith petitioner bein* pai on co((ission basis. On Februar/ ',, %001, labor arbiter Ro*elio Culo ren ere his ecision in favor of private respon ent. The ispositive portion of the ecision rea = PR!MIS!S "ONSID!R!D, 4u *(ent is hereb/ ren ere fin in* the is(issal of Ro*elio !4an ra to be $ithout 4ust cause an , therefore, ille*al an ORD!RIN? R; Transport to R!INST&T! hi( to his for(er position $ithout loss of seniorit/ an other benefits an to pa/ hi( bac9$a*es fro( the ti(e of his is(issal until actual reinstate(ent. SO ORD!R!D.7 +abor arbiter Culo *ave no $ei*ht to petitioner3s clai( that private respon ent aban one his $or9. His one;$ee9 absence i not constitute aban on(ent of $or9 consi erin* that it too9 hi( the $hole $ee9 to reclai( his license. Private respon ent coul not retrieve it unless an until the apprehen in* officer first trans(itte it to their office. His inabilit/ to rive for petitioner that $hole $ee9 $as therefore not his fault an petitioner coul be hel liable for ille*al is(issal. Due process $as not accor e to private respon ent $ho $as never *iven the opportunit/ to contest the char*e of aban on(ent. Moreover, assu(in* actual aban on(ent, petitioner shoul have reporte such fact to the nearest e(plo/(ent office of the Depart(ent of +abor an !(plo/(ent. #ut no such report $as ever (a e. On Ma/ ,), %001, the N+R" ren ere a ecision affir(in* the ecision of the labor arbiter= BH!R!FOR!, pre(ises consi ere , the appeal is hereb/ DISMISS!D an the appeale ecision &FFIRM!D in toto. SO ORD!R!D.8 In isputin* petitioner3s clai( that private respon ent $as not its e(plo/ee an $as not therefore entitle to notice an hearin* before ter(ination, the N+R" hel that= It is ver/ clear that -sic. fro( no less than appellants3 a (ission, that co(plainant $as not affor e his ri*ht to ue process prior to the severance of his e(plo/(ent $ith respon ents. -First par. p.,, respon ents3 &ppeal Me(oran u(, p. 27, Rollo. &ppellants3 efense of en/in* the e5istence of e(plo/er;e(plo/ee relationship $ith the co(plainant base on the (anner b/ $hich co(plainant $as bein* pai his salar/, cannot hol $ater. 555 555 555 Bhile e(plo/ees pai on piece;rate an co((ission basis are not covere b/ the provisions of the +abor "o e, as a(en e , on hours of $or9, these e(plo/ees ho$ever, for all intents an purposes, are e(plo/ees of their e(plo/ers. 555 555 5 5 51

Petitioner file in the "ourt of &ppeals a petition for certiorari on the *roun that the N+R" co((itte *rave abuse of iscretion in affir(in* the ecision of the labor arbiter. On Dece(ber '', '))), the "ourt of &ppeals ren ere a ecision, the ispositive portion of $hich rea = BH!R!FOR!, the instant petition is hereb/ D!NI!D for lac9 of (erit. SO ORD!R!D.A "ate*oriDin* the issues raise b/ petitioner as factual, the appellate court hel that the fin in*s of fact of the labor arbiter -affir(e b/ the N+R". $ere entitle to *reat respect because the/ $ere supporte b/ substantial evi ence. The "ourt of &ppeals also rule that petitioner $as barre fro( en/in* the e5istence of an e(plo/er;e(plo/ee relationship because petitioner invo9e its ri*hts un er the la$ an 4urispru ence as an employer in is(issin* private respon ent. Hence, this appeal base on the follo$in* assi*n(ents of errors= & Bith ue respect, the Honorable "ourt of &ppeals, Tenth Division co((itte *rave abuse of iscretion $hen it affir(e Ea opte in toto the ecision of the National +abor Relations "o((ission -N+R". base purel/ on a speculation, sur(ise or con4ecture. # The fin in*s of facts are (ere conclusions $ithout citation or specific evi ence on $hich the/ are base . " Further, the Honorable "ourt of &ppeals, Tenth Division co((itte *rave abuse of iscretion a(ountin* to lac9 of 4uris iction in not rulin* that the relationship in la$ occurrin* bet$een the petitioner R Transport "orporation an the private respon ent $as in a nature of :lessor an lessee.: D Moreover, there is a nee b/ this Honorable "ourt to *ive a secon loo9 on the recor s of N+R" N"R "ase R&# No. IV;';10%);R E N+R" N"R "&;)%';8)7;01 to avoi (iscarria*e of 4ustice an furtherance of the statutor/ re@uire(ents of ue process. ! Finall/, the Honorable "ourt of &ppeals, Tenth Division *ravel/ erre in en/in* the petition in "&;?.R. SP. No. 7%08' in its ecision pro(ul*ate on Dece(ber '', '))) -&nne5es :?: an :?;%:. an in its Resolution ate 6une 2, '))% -&nne5 :#:., has acte contrar/ to la$ an the Rules of "ourt.0 &ccor in* to the petitioner, the appellate court erre in not fin in* that private respon ent aban one his $or9F that petitioner $as not the lessor of private respon entF that, as such, the ter(ination of the contract of lease of services i not re@uire petitioner to respect private respon ent3s ri*hts to notice an hearin*F an , that private respon ent3s affi avit $as hearsa/ an self;servin*. Be en/ the appeal. <n er Section %, Rule 27 of the %001 Rules of "ivil Proce ure, a petition for revie$ shall onl/ raise @uestions of la$ consi erin* that the fin in*s of fact of the "ourt of &ppeals are, as a *eneral rule, conclusive upon an bin in* on this "ourt.%) This octrine applies $ith *reater force in labor cases $here the factual fin in*s of the labor tribunals are affir(e b/ the "ourt of &ppeals. The reason is because labor officials are ee(e to have ac@uire e5pertise in (atters $ithin their 4uris iction an therefore, their factual fin in*s are *enerall/ accor e not onl/ respect but also finalit/, an are bin in* on this "ourt.%%

In the case at bar, the labor arbiter, the N+R" an the "ourt of &ppeals $ere unani(ous in fin in* that private respon ent $or9e as a river of one of the buses of petitioner an $as pai on a %)> co((ission basis. &fter he $as apprehen e for a traffic violation, his license $as confiscate . Bhen he infor(e petitioner3s *eneral (ana*er of such fact, the latter *ave hi( (one/ to re ee( his license. He $ent to the +TO office ever/ a/ but it $as onl/ after a $ee9 that he $as able to *et bac9 his license. Bhen he reporte bac9 to $or9, petitioner3s (ana*er tol hi( to $ait until his services $ere nee e a*ain. "onsi erin* hi(self is(isse , private respon ent file a co(plaint for ille*al is(issal a*ainst petitioner. Be have no reason to isturb all these factual fin in*s because the/ are a(pl/ supporte b/ substantial evi ence. Den/in* the e5istence of an e(plo/er;e(plo/ee relationship, petitioner insists that the parties3 a*ree(ent $as for a contract of lease of services. Be isa*ree. Petitioner is barre to ne*ate the e5istence of an e(plo/er;e(plo/ee relationship. In its petition file before this "ourt, petitioner invo9e our rulin*s on the ri*ht of an e(plo/er to is(iss an e(plo/ee for 4ust cause.%' Petitioner (aintaine that private respon ent $as 4ustifiabl/ is(isse ue to aban on(ent of $or9. #/ a optin* sai rulin*s, petitioner i(plie l/ a (itte that it $as in fact the e(plo/er of private respon ent. &ccor in* to the control test, the po$er to is(iss an e(plo/ee is one of the in ications of an e(plo/er;e(plo/ee relationship.%, Petitioner3s clai( that private respon ent $as le*all/ is(isse for aban on(ent $as in fact a ne*ative pre*nant=%2 an ac9no$le *e(ent that there $as no (utual ter(ination of the alle*e contract of lease an that private respon ent $as its e(plo/ee. The fact that petitioner pai private respon ent on co((ission basis i not rule out the presence of an e(plo/ee;e(plo/er relationship. &rticle 01-f. of the +abor "o e clearl/ provi es that an e(plo/ee3s $a*es can be in the for( of co((issions. Be no$ as9 the ne5t @uestion= $as private respon ent, an e(plo/ee of petitioner, is(isse for 4ust causeG Be o not thin9 so. &ccor in* to petitioner, private respon ent aban one his 4ob an lie about the confiscation of his license. To constitute aban on(ent, t$o ele(ents (ust concur= -%. the failure to report for $or9 or absence $ithout vali or 4ustifiable reason an -'. a clear intention to sever the e(plo/er;e(plo/ee relationship. Of the t$o, the secon ele(ent is the (ore eter(inative factor an shoul be (anifeste b/ so(e overt acts. Mere absence is not sufficient. It is the e(plo/er $ho has the bur en of proof to sho$ a eliberate an un4ustifie refusal of the e(plo/ee to resu(e his e(plo/(ent $ithout an/ intention of returnin*.%7 In the instant case, petitioner fell short of provin* the re@uisites. To be*in $ith, petitioner3s absence $as 4ustifie because the +TO, ?ua alupe #ranch, i not release his license until after a $ee9. This $as the unani(ous factual fin in* of the labor tribunals an the "ourt of &ppeals. &s aptl/ hel b/ labor arbiter Culo, the process of re ee(in* a confiscate license, base on co((on e5perience, epen e on $hen the apprehen in* officer turne over the sa(e. Secon , private respon ent never inten e to sever his e(plo/(ent as he in fact reporte for $or9 as soon as he *ot his license bac9. Petitioner offere no evi ence to rebut these establishe facts. Thir , labor arbiter Culo correctl/ observe that, if private respon ent reall/ aban one his $or9, petitioner shoul have reporte such fact to the nearest Re*ional Office of the Depart(ent of +abor an !(plo/(ent in accor ance $ith Section 1, Rule HHIII, #oo9 V of Depart(ent Or er No. 0, series of %001%8 -Rules I(ple(entin* #oo9 V of the +abor "o e.. Petitioner (a e no such report. In a ition to the fact that petitioner ha no vali cause to ter(inate private respon ent fro( $or9, it violate the latter3s ri*ht to proce ural ue process b/ not *ivin* hi( the re@uire notice

an hearin*. Section ', Rule HHIII, #oo9 V of Depart(ent Or er No. 0 provi es for the proce ure for is(issal for 4ust or authoriDe cause= S!". '. Stan a! " o# $% &!o'%""( !%)$*!%+%nt o# not*'%. , In all cases of ter(ination of e(plo/(ent, the follo$in* stan ar s of ue process shall be substantiall/ observe = I. For ter(ination of e(plo/(ent base on 4ust causes as efine in &rticle 'A' of the "o e= -a. & $ritten notice serve on the e(plo/ee specif/in* the *roun or *roun s for ter(ination, an *ivin* to sai e(plo/ee reasonable opportunit/ $ithin $hich to e5plain his si eF -b. & hearin* or conference urin* $hich the e(plo/ee concerne , $ith the assistance of counsel if the e(plo/ee so esires, is *iven opportunit/ to respon to the char*e, present his evi ence or rebut the evi ence presente a*ainst hi(F an -c. & $ritten notice of ter(ination serve on the e(plo/ee in icatin* that upon ue consi eration of all the circu(stances, *roun s have been establishe to 4ustif/ his ter(ination. In case of ter(ination, the fore*oin* notices shall be serve on the e(plo/ee3s last 9no$n a ress. II. For ter(ination of e(plo/(ent as base on authoriDe causes efine in &rticle 'A, of the "o e, the re@uire(ents of ue process shall be ee(e co(plie $ith upon service of a $ritten notice to the e(plo/ee an the appropriate Re*ional Office of the Depart(ent at least thirt/ a/s before the effectivit/ of the ter(ination, specif/in* the *roun or *roun s for ter(ination. III. If ter(ination is brou*ht about b/ the co(pletion of the contract or phase thereof, no prior notice is re@uire . If the ter(ination is brou*ht about b/ the failure of an e(plo/ee to (eet the stan ar s of the e(plo/er in case of probationar/ e(plo/(ent, it shall be sufficient that a $ritten notice is serve the e(plo/ee $ithin a reasonable ti(e fro( the effective ate of ter(ination. -.ERE/ORE, pre(ises consi ere , the petition is hereb/ DENIED. "osts a*ainst the petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L)(2'5&)'1 *anua+, 22, 1990 ALIPIO R. RUGA, *OSE PARMA, ELA#IO CAL#ERON, LAURENTE BAUTU, *AIME BARBIN, NICANOR "RANCISCO, P$ILIP CER-ANTES an ELEUTERIO BARBIN, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION an #E GU.MAN "IS$ING ENTERPRISES an /o+ ARSENIO #E GU.MAN, respondents. &.C. Espinas . /ssociates for petitioners.

Tomas /. Re es for private respon%ent. "ERNAN, C.J.: 6he issue to be resolved in the instant case is whether or not the fishermen"crew members of the trawl fishing vessel D7* 8andyman II are employees of its owner" operator, +e >u%man ;ishing :nterprises, and if so, whether or not they were illegally dismissed from their employment. 0ecords show that the petitioners were the fishermen"crew members of D7* 8andyman II, one of several fishing vessels owned and operated by private respondent +e >u%man ;ishing :nterprises which is primarily engaged in the fishing business with port and office at Camaligan, Camarines 8ur. 5etitioners rendered service aboard said fishing vessel in various capacities, as follows: =lipio 0uga and Aose 5arma patron7pilot# :ladio Calderon, chief engineer# /aurente *autu, second engineer# Aaime *arbin, master fisherman# .icanor ;rancisco, second fisherman# 5hilip Cervantes and :leuterio *arbin, fishermen. ;or services rendered in the conduct of private respondentBs regular business of "trawl" fishing, petitioners were paid on percentage commission basis in cash by one 4rs. 5ilar de >u%man, cashier of private respondent. =s agreed upon, they received thirteen percent (1&J) of the proceeds of the sale of the fish"catch if the total proceeds e ceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (11J) of the total proceeds of the sale. 6he patron7pilot, chief engineer and master fisherman received a minimum income of 5&21.11 per wee( while the assistant engineer, second fisherman, and fisherman"winchman received a minimum income of 5$,1.11 per wee(. 1 <n 8eptember 11, 1-@& upon arrival at the fishing port, petitioners were told by Aorge de >u%man, president of private respondent, to proceed to the police station at Camaligan, Camarines 8ur, for investigation on the report that they sold some of their fish"catch at midsea to the pre!udice of private respondent. 5etitioners denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of +efender of Industrial =gricultural /abor <rgani%ations and >eneral 3or(ers ?nion (+I=/<>3?) on 8eptember &, 1-@&. +uring the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were formally filed against them. .otwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their wor( on the same day, 8eptember 11, 1-@&. <n 8eptember $$, 1-@&, petitioners individually filed their complaints for illegal dismissal and non"payment of 1&th month pay, emergency cost of living allowance and service incentive pay, with the then 4inistry (now +epartment) of /abor and :mployment, 0egional =rbitration *ranch .o. K, /egaspi City, =lbay, doc(eted as Cases .os. 1''-"@& to 1'2,"@&. 2 6hey uniformly contended that they were arbitrarily dismissed without being given ample time to loo( for a new !ob. <n <ctober $', 1-@&, private respondent, thru its operations manager, Conrado 8. de >u%man, submitted its position paper denying the employer"employee relationship between private respondent and petitioners on the theory that private respondent and petitioners were engaged in a !oint venture. %

=fter the parties failed to reach an amicable settlement, the /abor =rbiter scheduled the case for !oint hearing furnishing the parties with notice and summons. <n +ecember $D, 1-@&, after two ($) previously scheduled !oint hearings were postponed due to the absence of private respondent, one of the petitioners herein, =lipio 0uga, the pilot7captain of the D7* 8andyman II, testified, among others, on the manner the fishing operations were conducted, mode of payment of compensation for services rendered by the fishermen"crew members, and the circumstances leading to their dismissal. & <n 4arch &1, 1-@', after the case was submitted for resolution, /abor =rbiter =sisclo 8. Coralde rendered a !oint decision 5 dismissing all the complaints of petitioners on a finding that a "!oint fishing venture" and not one of employer"employee relationship e isted between private respondent and petitioners. ;rom the adverse decision against them, petitioners appealed to the .ational /abor 0elations Commission. <n 4ay &1, 1-@2, the .ational /abor 0elations Commission promulgated its resolution ' affirming the decision of the labor arbiter that a "!oint fishing venture" relationship e isted between private respondent and petitioners. 9ence, the instant petition. 5etitioners assail the ruling of the public respondent ./0C that what e ists between private respondent and petitioners is a !oint venture arrangement and not an employer" employee relationship. 6o stress that there is an employer"employee relationship between them and private respondent, petitioners invite attention to the following: that they were directly hired by private respondent through its general manager, =rsenio de >u%man, and its operations manager, Conrado de >u%man# that, e cept for /aurente *autu, they had been employed by private respondent from @ to 12 years in various capacities# that private respondent, through its operations manager, supervised and controlled the conduct of their fishing operations as to the fi ing of the schedule of the fishing trips, the direction of the fishing vessel, the volume or number of tubes of the fish"catch the time to return to the fishing port, which were communicated to the patron7pilot by radio (single side band)# that they were not allowed to !oin other outfits even the other vessels owned by private respondent without the permission of the operations manager# that they were compensated on percentage commission basis of the gross sales of the fish"catch which were delivered to them in cash by private respondentBs cashier, 4rs. 5ilar de >u%man# and that they have to follow company policies, rules and regulations imposed on them by private respondent. +isputing the finding of public respondent that a "!oint fishing venture" e ists between private respondent and petitioners, petitioners claim that public respondent e ceeded its !urisdiction and7or abused its discretion when it added facts not contained in the records when it stated that the pilot"crew members do not receive compensation from the boat" owners e cept their share in the catch produced by their own efforts# that public respondent ignored the evidence of petitioners that private respondent controlled the fishing operations# that public respondent did not ta(e into account established !urisprudence that the relationship between the fishing boat operators and their crew is one of direct employer and employee. =side from see(ing the dismissal of the petition on the ground that the decision of the labor arbiter is now final and e ecutory for failure of petitioners to file their appeal with the ./0C within 11 calendar days from receipt of said decision pursuant to the doctrine

laid down in ,ir!&en $hipping an% "arine $ervices, Inc. vs. ./0C, 112 8C0= &'D (1-@$), the 8olicitor >eneral claims that the ruling of public respondent that a "!oint fishing venture" e ists between private respondent and petitioners rests on the resolution of the 8ocial 8ecurity 8ystem (888) in a 1-,@ case, Case .o. D1@ (+e >u%man ;ishing :nterprises vs. 888), e empting +e >u%man ;ishing :nterprises, private respondent herein, from compulsory coverage of the 888 on the ground that there is no employer"employee relations between the boat"owner and the fishermen" crew members following the doctrine laid down in 'a0arillo vs. $$$, 1D 8C0= 111' (1-,,). In applying to the case at bar the doctrine in 'a0arillo vs. $$$, supra, that there is no employer"employee relationship between the boat"owner and the pilot and crew members when the boat"owner supplies the boat and e)uipment while the pilot and crew members contribute the corresponding labor and the parties get specific shares in the catch for their respective contribution to the venture, the 8olicitor >eneral pointed out that the boat"owners in the 'a0arillo case, as in the case at bar, did not control the conduct of the fishing operations and the pilot and crew members shared in the catch. 3e rule in favor of petitioners. ;undamental considerations of substantial !ustice persuade ?s to decide the instant case on the merits rather than to dismiss it on a mere technicality. In so doing, we e ercise the prerogative accorded to this Court enunciated in Firestone Filipinas Emplo ees /ssociation, et al. vs. Firestone Tire an% Ru##er Co. of the 'hilippines, Inc., ,1 8C0= &'1 (1-D'), thus "the well"settled doctrine is that in labor cases before this 6ribunal, no undue sympathy is to be accorded to any claim of a procedural misstep, the idea being that its power be e ercised according to !ustice and e)uity and substantial merits of the controversy." Circumstances peculiar to some e tent to fishermen"crew members of a fishing vessel regularly engaged in trawl fishing, as in the case of petitioners herein, who spend one (1) whole wee( or more ( in the open sea performing their !ob to earn a living to support their families, convince ?s to adopt a more liberal attitude in applying to petitioners the 11"calendar day rule in the filing of appeals with the ./0C from the decision of the labor arbiter. 0ecords reveal that petitioners were informed of the labor arbiterBs decision of 4arch &1, 1-@' only on Auly &,1-@' by their non"lawyer representative during the arbitration proceedings, Aose +ialogo who received the decision eight (@) days earlier, or on Aune $2, 1-@'. =s adverted to earlier, the circumstances peculiar to petitionersB occupation as fishermen"crew members, who during the pendency of the case understandably have to earn a living by see(ing employment elsewhere, impress upon ?s that in the ordinary course of events, the information as to the adverse decision against them would not reach them within such time frame as would allow them to faithfully abide by the 11" calendar day appeal period. 6his peculiar circumstance and the fact that their representative is a non"lawyer provide e)uitable !ustification to conclude that there is substantial compliance with the ten"calendar day rule of filing of appeals with the ./0C when petitioners filed on Auly 11, 1-@', or seven (D) days after receipt of the decision, their appeal with the ./0C through registered mail. 3e have consistently ruled that in determining the e istence of an employer"employee relationship, the elements that are generally considered are the following (a) the selection and engagement of the employee# (b) the payment of wages# (c) the power of

dismissal# and (d) the employerBs power to control the employee with respect to the means and methods by which the wor( is to be accomplished. 8 6he employment relation arises from contract of hire, e press or implied. 9 In the absence of hiring, no actual employer"employee relation could e ist. ;rom the four (') elements mentioned, 3e have generally relied on the so"called right" of"control test 10 where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. 6he test calls merely for the e istence of the right to control the manner of doing the wor(, not the actual e ercise of the right. 11 6he case of 'a0arillo vs. $$$, supra, invo(ed by the public respondent as authority for the ruling that a "!oint fishing venture" e isted between private respondent and petitioners is not applicable in the instant case. 6here is neither light of control nor actual e ercise of such right on the part of the boat"owners in the 'a0arillo case, where the Court found that the pilots therein are not under the order of the boat"owners as regards their employment# that they go out to sea not upon directions of the boat" owners, but upon their own volition as to when, how long and where to go fishing# that the boat"owners do not in any way control the crew"members with whom the former have no relationship whatsoever# that they simply !oin every trip for which the pilots allow them, without any reference to the owners of the vessel# and that they only share in their own catch produced by their own efforts. 6he aforementioned circumstances obtaining in 'a0arillo case do not e ist in the instant case. 6he conduct of the fishing operations was undisputably shown by the testimony of =lipio 0uga, the patron7pilot of D7* 8andyman II, to be under the control and supervision of private respondentBs operations manager. 4atters dealing on the fi ing of the schedule of the fishing trip and the time to return to the fishing port were shown to be the prerogative of private respondent. 12 3hile performing the fishing operations, petitioners received instructions via a single"side band radio from private respondentBs operations manager who called the patron7pilot in the morning. 6hey are told to report their activities, their position, and the number of tubes of fish"catch in one day. 1% Clearly thus, the conduct of the fishing operations was monitored by private respondent thru the patron7pilot of D7* 8andyman II who is responsible for disseminating the instructions to the crew members. 6he conclusion of public respondent that there had been no change in the situation of the parties since 1-,@ when +e >u%man ;ishing :nterprises, private respondent herein, obtained a favorable !udgment in Case .o. D1@ e empting it from compulsory coverage of the 888 law is not supported by evidence on record. It was erroneous for public respondent to apply the factual situation of the parties in the 1-,@ case to the instant case in the light of the changes in the conditions of employment agreed upon by the private respondent and petitioners as discussed earlier. 0ecords show that in the instant case, as distinguished from the 'a0arillo case where the crew members are under no obligation to remain in the outfit for any definite period as one can be the crew member of an outfit for one day and be the member of the crew of another vessel the ne t day, the herein petitioners, on the other hand, were directly hired by private respondent, through its general manager, =rsenio de >u%man, and its operations manager, Conrado de >u%man and have been under the employ of private respondent for a period of @"12 years in various capacities, e cept for /aurente *autu

who was hired on =ugust &, 1-@& as assistant engineer. 5etitioner =lipio 0uga was hired on 8eptember $-, 1-D' as patron7captain of the fishing vessel# :ladio Calderon started as a mechanic on =pril 1,, 1-,@ until he was promoted as chief engineer of the fishing vessel# Aose 5arma was employed on 8eptember $-, 1-D' as assistant engineer# Aaime *arbin started as a pilot of the motor boat until he was transferred as a master fisherman to the fishing vessel D7* 8andyman II# 5hilip Cervantes was hired as winchman on =ugust 1, 1-D$ while :leuterio *arbin was hired as winchman on =pril 12, 1-D,. 3hile tenure or length of employment is not considered as the test of employment, nevertheless the hiring of petitioners to perform wor( which is necessary or desirable in the usual business or trade of private respondent for a period of @"12 years since 1-,@ )ualify them as regular employees within the meaning of =rticle $@1 of the /abor Code as they were indeed engaged to perform activities usually necessary or desirable in the usual fishing business or occupation of private respondent. 1& =side from performing activities usually necessary and desirable in the business of private respondent, it must be noted that petitioners received compensation on a percentage commission based on the gross sale of the fish"catch i.e. 1&J of the proceeds of the sale if the total proceeds e ceeded the cost of the crude oil consumed during the fishing trip, otherwise only 11J of the proceeds of the sale. 8uch compensation falls within the scope and meaning of the term "wage" as defined under =rticle -D(f) of the /abor Code, thus:
(f) "3age" paid to any employee shall mean the remuneration or earnings, however designated, capable of being e pressed in terms of money, whether fi ed or ascertained on a time, tas(, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for wor( done or to be done, or for services rendered or to be rendered, and included the fair and reasonable value, as determined by the 8ecretary of /abor, of board, lodging, or other facilities customarily furnished by the employer to the employee. . ..

6he claim of private respondent, which was given credence by public respondent, that petitioners get paid in the form of share in the fish"catch which the patron7pilot as head of the team distributes to his crew members in accordance with their own understanding 15 is not supported by recorded evidence. : cept that such claim appears as an allegation in private respondentBs position paper, there is nothing in the records showing such a sharing scheme as preferred by private respondent. ;urthermore, the fact that on mere suspicion based on the reports that petitioners allegedly sold their fish"catch at midsea without the (nowledge and consent of private respondent, petitioners were un!ustifiably not allowed to board the fishing vessel on 8eptember 11, 1-@& to resume their activities without giving them the opportunity to air their side on the accusation against them unmista(ably reveals the disciplinary power e ercised by private respondent over them and the corresponding sanction imposed in case of violation of any of its rules and regulations. 6he virtual dismissal of petitioners from their employment was characteri%ed by undue haste when less e treme measures consistent with the re)uirements of due process should have been first e hausted. In that sense, the dismissal of petitioners was tainted with illegality. :ven on the assumption that petitioners indeed sold the fish"catch at midsea the act of private respondent virtually resulting in their dismissal evidently contradicts private

respondentBs theory of "!oint fishing venture" between the parties herein. = !oint venture, including partnership, presupposes generally a parit of stan%ing between the !oint co" venturers or partners, in which each party has an e)ual proprietary interest in the capital or property contributed 1' and where each party e ercises e)ual lights in the conduct of the business. 1( It would be inconsistent with the principle of parity of standing between the !oint co"venturers as regards the conduct of business, if private respondent would outrightly e clude petitioners from the conduct of the business without first resorting to other measures consistent with the nature of a !oint venture underta(ing, Instead of arbitrary unilateral action, private respondent should have discussed with an open mind the advantages and disadvantages of petitionersB action with its !oint co"venturers if indeed there is a "!oint fishing venture" between the parties. *ut this was not done in the instant case. 5etitioners were arbitrarily dismissed notwithstanding that no criminal complaints were filed against them. 6he lame e cuse of private respondent that the non"filing of the criminal complaints against petitioners was for humanitarian reasons will not help its cause either. 3e have e amined the !urisprudence on the matter and find the same to be supportive of petitionersB stand. In Negre vs. WCC 1&2 8C0= ,2& (1-@2), we held that fishermen crew members who were recruited by one master fisherman locally (nown as "maestro" in charge of recruiting others to complete the crew members are considered employees, not industrial partners, of the boat"owners. In an earlier case of /#ong vs. WCC, 2' 8C0= &D- (1-D&) where petitioner therein, +r. =gustin =bong, owner of the fishing boat, claimed that he was not the employer of the fishermen crew members because of an alleged partnership agreement between him, as financier, and 8implicio 5anganiban, as his team leader in charge of recruiting said fishermen to wor( for him, we affirmed the finding of the 3CC that there e isted an employer"employee relationship between the boat"owner and the fishermen crew members not only because they wor(ed for and in the interest of the business of the boat"owner but also because they were sub!ect to the control, supervision and dismissal of the boat"owner, thru its agent, 8implicio 5anganiban, the alleged "partner" of +r. =bong# that while these fishermen crew members were paid in (ind, or by "pa(iao basis" still that fact did not alter the character of their relationship with +r. =bong as employees of the latter. In 'hilippine Fishing )oat 1fficers an% Engineers 2nion vs . Court of In%ustrial Relations, 11$ 8C0= 12- (1-@$), we held that the employer"employee relationship between the crew members and the owners of the fishing vessels engaged in deep sea fishing is merely suspended during the time the vessels are drydoc(ed or undergoing repairs or being loaded with the necessary provisions for the ne t fishing trip. 6he said ruling is premised on the principle that all these activities i.e., drydoc(, repairs, loading of necessary provisions, form part of the regular operation of the company fishing business. 39:0:;<0:, in view of the foregoing, the petition is >0=.6:+. 6he )uestioned resolution of the .ational /abor 0elations Commission dated 4ay &1,1-@2 is hereby 0:K:08:+ and 8:6 =8I+:. 5rivate respondent is ordered to reinstate petitioners to their former positions or any e)uivalent positions with &"year bac(wages and other monetary benefits under the law. .o pronouncement as to costs. 8< <0+:0:+. 3utierrez( &r.( )i%in an% Cort4s( &&.( concur.

Feliciano( &.( concurs in the result.

Republic of the Philippines SUPREME COURT Manila S!"OND DIVISION G.R. No. 8((00 *un0 1%, 1990 SAN MIGUEL CORPORATION EMPLO1EES UNION)PTG!O, #ANIEL S.L. BORBON II, $ERMINIA RE1ES, MARCELA PURI"ICACION, ET AL., petitioners, vs. $ON. *ESUS G. BERSAMIRA, IN $IS CAPACIT1 AS PRESI#ING *U#GE O" BRANC$ 1'', RTC, PASIG, an SAN MIGUEL CORPORATION, respondents. Romeo C. Lagman for petitioners. &ar%eleza( $o#revinas( Diaz( "a u%ini . )o%egon for respon%ents. MELENCIO)$ERRERA, J.: 0espondent Audge of the 0egional 6rial Court of 5asig, *ranch 1,,, is ta(en to tas( by petitioners in this special civil action for certiorari and 5rohibition for having issued the challenged 3rit of 5reliminary In!unction on $- 4arch 1-@- in Civil Case .o. 2D122 of his Court entitled "$an "iguel Corporation vs. $"CE2!'T3W1( et als." 5etitionersB plea is that said 3rit was issued without or in e cess of !urisdiction and with grave abuse of discretion, a labor dispute being involved. 5rivate respondent 8an 4iguel Corporation (8an4ig. for short), for its part, defends the 3rit on the ground of absence of any employer"employee relationship between it and the contractual wor(ers employed by the companies /ipercon 8ervices, Inc. (/ipercon) and +B0ite 8ervice :nterprises (+B0ite), besides the fact that the ?nion is bereft of personality to represent said wor(ers for purposes of collective bargaining. 6he 8olicitor >eneral agrees with the position of 8an4ig. 6he antecedents of the controversy reveal that: 8ometime in 1-@& and 1-@', 8an4ig entered into contracts for merchandising services with /ipercon and +B0ite (=nne es I and I, 8an4igBs Comment, respectively). 6hese companies are independent contractors duly licensed by the +epartment of /abor and :mployment (+</:). 8an4ig entered into those contracts to maintain its competitive position and in (eeping with the imperatives of efficiency, business e pansion and diversity of its operation. In said contracts, it was e pressly understood and agreed that the wor(ers employed by the contractors were to be paid by the latter and that none of them were to be deemed employees or agents of 8an4ig. 6here was to be no employer"employee relation between the contractors and7or its wor(ers, on the one hand, and 8an4ig on the other. 5etitioner 8an 4iguel Corporation :mployees ?nion"563>< (the ?nion, for brevity) is the duly authori%ed representative of the monthly paid ran("and"file employees of

8an4ig with whom the latter e ecuted a Collective *argaining =greement (C*=) effective 1 Auly 1-@, to &1 Aune 1-@- (=nne =, 8an4igBs Comment). 8ection 1 of their C*= specifically provides that "temporary, probationary, or contract employees and wor(ers are e cluded from the bargaining unit and, therefore, outside the scope of this =greement." In a letter, dated $1 .ovember 1-@@ (=nne C, 5etition), the ?nion advised 8an4ig that some /ipercon and +B0ite wor(ers had signed up for union membership and sought the regulari%ation of their employment with 84C. 6he ?nion alleged that this group of employees, while appearing to be contractual wor(ers supposedly independent contractors, have been continuously wor(ing for 8an4ig for a period ranging from si (,) months to fifteen (12) years and that their wor( is neither casual nor seasonal as they are performing wor( or activities necessary or desirable in the usual business or trade of 8an4ig. 6hus, it was contended that there e ists a "labor"only" contracting situation. It was then demanded that the employment status of these wor(ers be regulari%ed. <n 1$ Aanuary 1-@- on the ground that it had failed to receive any favorable response from 8an4ig, the ?nion filed a notice of stri(e for unfair labor practice, C*= violations, and union busting (=nne +, 5etition). <n &1 Aanuary 1-@-, the ?nion again filed a second notice of stri(e for unfair labor practice (=nne ;, 5etition). =s in the first notice of stri(e. Conciliatory meetings were held on the second notice. 8ubse)uently, the two ($) notices of stri(e were consolidated and several conciliation conferences were held to settle the dispute before the .ational Conciliation and 4ediation *oard (.C4*) of +</: (=nne >, 5etition). *eginning 1' ;ebruary 1-@- until $ 4arch 1-@-, series of pic(ets were staged by /ipercon and +B0ite wor(ers in various 84C plants and offices. <n , 4arch 1-@-, 84C filed a verified Complaint for In!unction and +amages before respondent Court to en!oin the ?nion from:
a. representing and7or acting for and in behalf of the employees of /I5:0C<. and7or +B0I6: for the purposes of collective bargaining# b. calling for and holding a stri(e vote, to compel plaintiff to hire the employees or wor(ers of /I5:0C<. and +B0I6:# c. inciting, instigating and7or inducing the employees or wor(ers of /I5:0C<. and +B0I6: to demonstrate and7or pic(et at the plants and offices of plaintiff within the bargaining unit referred to in the C*=,...# d. staging a stri(e to compel plaintiff to hire the employees or wor(ers of /I5:0C<. and +B0I6:# e. using the employees or wor(ers of /I5:0C<. =.+ +B0I6: to man the stri(e area and7or pic(et lines and7or barricades which the defendants may set up at the plants and offices of plaintiff within the bargaining unit referred to in the C*= ...# f. intimidating, threatening with bodily harm and7or molesting the other employees and7or contract wor(ers of plaintiff, as well as those persons lawfully transacting business with plaintiff at the wor( places within the bargaining unit referred to in the C*=, ..., to compel plaintiff to hire the employees or wor(ers of /I5:0C<. and +B0I6:# g. bloc(ing, preventing, prohibiting, obstructing and7or impeding the free ingress to, and egress from, the wor( places within the bargaining unit referred to in the C*= .., to compel plaintiff to hire the employees or wor(ers of /I5:0C<. and +B0I6:#

h. preventing and7or disrupting the peaceful and normal operation of plaintiff at the wor( places within the bargaining unit referred to in the C*=, =nne BCB hereof, to compel plaintiff to hire the employees or wor(ers of /I5:0C<. and +B0I6:. (=nne 9, 5etition)

0espondent Court found the Complaint sufficient in form and substance and issued a 6emporary 0estraining <rder for the purpose of maintaining the status 5uo( and set the application for In!unction for hearing. In the meantime, on 1& 4arch 1-@-, the ?nion filed a 4otion to +ismiss 8an4igBs Complaint on the ground of lac( of !urisdiction over the case7nature of the action, which motion was opposed by 8an4ig. 6hat 4otion was denied by respondent Audge in an <rder dated 11 =pril 1-@-. =fter several hearings on 8an4igBs application for in!unctive relief, where the parties presented both testimonial and documentary evidence on $2 4arch 1-@-, respondent Court issued the )uestioned <rder (=nne =, 5etition) granting the application and en!oining the ?nion from Committing the acts complained of, supra. =ccordingly, on $4arch 1-@-, respondent Court issued the corresponding 3rit of 5reliminary In!unction after 8an4ig had posted the re)uired bond of 5111,111.11 to answer for whatever damages petitioners may sustain by reason thereof. In issuing the In!unction, respondent Court rationali%ed:
6he absence of employer"employee relationship negates the e istence of labor dispute. Kerily, this court has !urisdiction to ta(e cogni%ance of plaintiffBs grievance. 6he evidence so far presented indicates that plaintiff has contracts for services with /ipercon and +B0ite. 6he application and contract for employment of the defendantsB witnesses are either with /ipercon or +B0ite. 3hat could be discerned is that there is no employer"employee relationship between plaintiff and the contractual wor(ers employed by /ipercon and +B0ite. 6his, however, does not mean that a final determination regarding the )uestion of the e istence of employer"employee relationship has already been made. 6o finally resolve this dispute, the court must e tensively consider and delve into the manner of selection and engagement of the putative employee# the mode of payment of wages# the presence or absence of a power of dismissal# and the 5resence or absence of a power to control the putative employeeBs conduct. 6his necessitates a full"blown trial. If the acts complained of are not restrained, plaintiff would, undoubtedly, suffer irreparable damages. ?pon the other hand, a writ of in!unction does not necessarily e pose defendants to irreparable damages. :vidently, plaintiff has established its right to the relief demanded. (p. $1, 0ollo)

=nchored on grave abuse of discretion, petitioners are now before us see(ing nullification of the challenged 3rit. <n $' =pril 1-@-, we issued a 6emporary 0estraining <rder en!oining the implementation of the In!unction issued by respondent Court. 6he ?nion construed this to mean that "we can now stri(e," which it superimposed on the <rder and widely circulated to entice the ?nion membership to go on stri(e. ?pon being apprised thereof, in a 0esolution of $' 4ay 1-@-, we re)uired the parties to "0:86<0: the status 5uo ante declaration of stri(e" (p. $,,$ 0ollo). In the meantime, however, or on $ 4ay 1-@-, the ?nion went on stri(e. =pparently, some of the contractual wor(ers of /ipercon and +B0ite had been laid off. 6he stri(e adversely affected thirteen (1&) of the latterBs plants and offices. <n & 4ay 1-@-, the .ational Conciliation and 4ediation *oard (.C4*) called the parties to conciliation. 6he ?nion stated that it would lift the stri(e if the thirty (&1) /ipercon and +B0ite employees were recalled, and discussion on their other demands, such as wage distortion and appointment of coordinators, were made. :ffected eventually was a 4emorandum of =greement between 8an4ig and the ?nion that

"without pre!udice to the outcome of >.0. .o. @DD11 (this case) and Civil Case .o. 2D122 (the case below), the laid"off individuals ... shall be recalled effective @ 4ay 1-@to their former !obs or e)uivalent positions under the same terms and conditions prior to "lay"off" (=nne 12, 8an4ig Comment). In turn, the ?nion would immediately lift the pic(ets and return to wor(. =fter an e change of pleadings, this Court, on 1$ <ctober 1-@-, gave due course to the 5etition and re)uired the parties to submit their memoranda simultaneously, the last of which was filed on - Aanuary 1--1. 6he focal issue for determination is whether or not respondent Court correctly assumed !urisdiction over the present controversy and properly issued the 3rit of 5reliminary In!unction to the resolution of that )uestion, is the matter of whether, or not the case at bar involves, or is in connection with, or relates to a labor dispute. =n affirmative answer would bring the case within the original and e clusive !urisdiction of labor tribunals to the e clusion of the regular Courts. 5etitioners ta(e the position that Bit is beyond dispute that the controversy in the court a 5uo involves or arose out of a labor dispute and is directly connected or interwoven with the cases pending with the .C4*"+</:, and is thus beyond the ambit of the public respondentBs !urisdiction. 6hat the acts complained of (i.e., the mass concerted action of pic(eting and the reliefs prayed for by the private respondent) are within the competence of labor tribunals, is beyond )uestion" (pp. ,"D, 5etitionersB 4emo). <n the other hand, 8an4ig denies the e istence of any employer"employee relationship and conse)uently of any labor dispute between itself and the ?nion. 8an4ig submits, in particular, that "respondent Court is vested with !urisdiction and !udicial competence to en!oin the specific type of stri(e staged by petitioner union and its officers herein complained of," for the reasons that:
=. 6he e clusive bargaining representative of an employer unit cannot stri(e to compel the employer to hire and thereby create an employment relationship with contractual wor(ers, especially were the contractual wor(ers were recogni%ed by the union, under the governing collective bargaining agreement, as e cluded from, and therefore strangers to, the bargaining unit. *. = stri(e is a coercive economic weapon granted the bargaining representative only in the event of a deadloc( in a labor dispute over Bwages, hours of wor( and all other and of the employmentB of the employees in the unit. 6he union leaders cannot instigate a stri(e to compel the employer, especially on the eve of certification elections, to hire strangers or wor(ers outside the unit, in the hope the latter will help re"elect them. C. Civil courts have the !urisdiction to en!oin the above because this specie of stri(e does not arise out of a labor dispute, is an abuse of right, and violates the employerBs constitutional liberty to hire or not to hire. (8an4igBs 4emorandum, pp. 'D2"'D,, 0ollo).

3e find the 5etition of a meritorious character. = "labor dispute" as defined in =rticle $1$ (1) of the /abor Code includes "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fi ing, maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the pro imate relation of employer and employee." 3hile it is 8an4igBs submission that no employer"employee relationship e ists between itself, on the one hand, and the contractual wor(ers of /ipercon and +B0ite on the other, a labor dispute can nevertheless e ist "regardless of whether the disputants stand in the pro imate relationship of employer and employee" (=rticle $1$ E1F, /abor Code, supra)

provided the controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof ( i#i%). 5ut differently, and as defined by law, the e istence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not stand in the pro imate relation of employer and employee. 6hat a labor dispute, as defined by the law, does e ist herein is evident. =t bottom, what the ?nion see(s is to regulari%e the status of the employees contracted by /ipercon and +B0ite in effect, that they be absorbed into the wor(ing unit of 8an4ig. 6his matter definitely dwells on the wor(ing relationship between said employees vis"a"vis 8an4ig. 6erms, tenure and conditions of their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor dispute. ;urther, the ?nion also see(s to represent those wor(ers, who have signed up for ?nion membership, for the purpose of collective bargaining. 8an4ig, for its part, resists that ?nion demand on the ground that there is no employer"employee relationship between it and those wor(ers and because the demand violates the terms of their C*=. <bvious then is that representation and association, for the purpose of negotiating the conditions of employment are also involved. In fact, the in!unction sought by 8an4ig was precisely also to prevent such representation. =gain, the matter of representation falls within the scope of a labor dispute. .either can it be denied that the controversy below is directly connected with the labor dispute already ta(en cogni%ance of by the .C4*"+</: (.C4*".C0" .8"11" 1$1"@-# .C4* .C0 .8"11"1-&"@&). 3hether or not the ?nion demands are valid# whether or not 8an4igBs contracts with /ipercon and +B0ite constitute "labor"only" contracting and, therefore, a regular employer"employee relationship may, in fact, be said to e ist# whether or not the ?nion can lawfully represent the wor(ers of /ipercon and +B0ite in their demands against 8an4ig in the light of the e isting C*=# whether or not the notice of stri(e was valid and the stri(e itself legal when it was allegedly instigated to compel the employer to hire strangers outside the wor(ing unit# H those are issues the resolution of which call for the application of labor laws, and 8an4igBs causeBs of action in the Court below are ine tricably lin(ed with those issues. 6he precedent in La no vs. %e la Cruz (>.0. .o. /"$-,&,, &1 =pril 1-,2, 1& 8C0= D&@) relied upon by 8an4ig is not controlling as in that case there was no controversy over terms, tenure or conditions, of employment or the representation of employees that called for the application of labor laws. In that case, what the petitioning union demanded was not a change in wor(ing terms and conditions, or the representation of the employees, but that its members be hired as stevedores in the place of the members of a rival union, which petitioners wanted discharged notwithstanding the e isting contract of the arrastre company with the latter union. 9ence, the ruling therein, on the basis of those facts uni)ue to that case, that such a demand could hardly be considered a labor dispute. =s the case is indisputably lin(ed with a labor dispute, !urisdiction belongs to the labor tribunals. =s e plicitly provided for in =rticle $1D of the /abor Code, prior to its amendment by 0.=. .o. ,D12 on $1 4arch 1-@-, since the suit below was instituted on , 4arch 1-@-, /abor =rbiters have original and e clusive !urisdiction to hear and decide the following cases involving all wor(ers including "1. unfair labor practice cases# $. those that wor(ers may file involving wages, hours of wor( and other terms and

conditions of employment# ... and 2. cases arising from any violation of =rticle $,2 of this Code, including )uestions involving the legality of stri(er and loc(outs. ..." =rticle $1D lays down the plain command of the law. 6he claim of 8an4ig that the action below is for damages under =rticles 1-, $1 and $1 of the Civil Code would not suffice to (eep the case within the !urisdictional boundaries of regular Courts. 6hat claim for damages is interwoven with a labor dispute e isting between the parties and would have to be ventilated before the administrative machinery established for the e peditious settlement of those disputes. 6o allow the action filed below to prosper would bring about "split !urisdiction" which is obno ious to the orderly administration of !ustice (5hilippine Communications, :lectronics and :lectricity 3or(ers ;ederation vs. 9on. .olasco, /"$'-@', $- Auly 1-,@, $' 8C0= &$1). 3e recogni%e the proprietary right of 8an4ig to e ercise an inherent management prerogative and its best business !udgment to determine whether it should contract out the performance of some of its wor( to independent contractors. 9owever, the rights of all wor(ers to self"organi%ation, collective bargaining and negotiations, and peaceful concerted activities, including the right to stri(e in accordance with law (8ection &, =rticle LIII, 1-@D Constitution) e)ually call for recognition and protection. 6hose contending interests must be placed in proper perspective and e)uilibrium. 39:0:;<0:, the 3rit of certiorari is >0=.6:+ and the <rders of respondent Audge of $2 4arch 1-@- and $- 4arch 1-@- are 8:6 =8I+:. 6he 3rit of 5rohibition is >0=.6:+ and respondent Audge is en!oined from ta(ing any further action in Civil Case .o. 2D122 e cept for the purpose of dismissing it. 6he status 5uo ante declaration of stri(e ordered by the Court on $' 4ay 1-@- shall be observed pending the proceedings in the .ational Conciliation 4ediation *oard"+epartment of /abor and :mployment, doc(eted as .C4*".C0".8"11"1$1@- and .C4*".C0".8"11"1-&"@&. .o costs. 8< <0+:0:+.

SECOND DI0ISION U12I3 CORPORATION an EDIL2ERTO 2. 2RA0O Petitioners, G.R. No. Present= I<IS<M#IN?, J., Chairperson, "&RPIO MOR&+!S, TIN?&, V!+&S"O, 6R., an #RION, JJ. 155645

1 4%!"$" 1

Pro(ul*ate = 0ALERIE ANNE .. .OLLERO, Respon ent. October ,%, '))A

5;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;5

DECISION

CARPIO MORALES, J.:

Petitioner <;#i5 "orporation -<;#i5. hire on March 8, %008 Valerie &nne H. Hollero -respon ent. as a (ana*e(ent trainee at its Furniture Division, $ith salar/ an allo$ances totalin* P%),))) (onthl/. On Ma/ %, %008, it pro(ote respon ent to facilities (ana*er, $ith salar/ an (onthl/. <;#i5 later sent respon ent an three other e(plo/ees to the <nite States for t$o (onths of trainin* for a ne$l/ ac@uire franchise, the ServiceMaster "o(pan/. The trainin* co((ence on 6ul/ 2, %008 an en e on Septe(ber ,, %008. allo$ances totalin* P'),)))

#efore respon ent left for the <nite States, she si*ne a contract $ith petitioner, the pertinent portion of $hich rea s=
V&+!RI! &NN! H. HO++!RO shall re(ain in the e(plo/ of <;#IH "ORPOR&TION for a perio of five -7. /ears fro( co(pletion of her <.S. Trainin* otherwise she shall rei(burse <;#IH "ORPOR&TION for all costs -prorate . an e5penses $hich <;#IH "ORPOR&TION incurre for her -HolleroJs. trainin* in the <.S.1K%L -<n erscorin* an italics supplie .

On Februar/ %2, %001, <;#i5, citin* respon entJs suppose e(plo/(ent for loss of trust an confi ence.3K,L

Mpattern of

tar iness, absences, ne*lect of uties, an lac9 of interest,N 2K'L ter(inate her

<;#i5 in fact file on Ma/ '', %001 a co(plaint 4K2L a*ainst respon ent before the +abor &rbiter for the rei(burse(ent of trainin* e5penses an <;#i5 alle*e a(a*es. In its co(plaint, $hich $as oc9ete as N+R" N"R "ase No. ));)7;),808;01, that upon respon ent3s return fro( her trainin* abroa , she e(onstrate *ross ne*lect of her uties as sho$n b/ her continue tar iness, habitual absences, an failure to sub(it reports an Eor ocu(ents on their ue ates, attention to $hich $as repeate l/ calle but she persiste in such con uctF that on Dece(ber %1, %008, respon entJs superiors iscusse $ith her the uties an responsibilities of a facilities (ana*er an the $or9 perfor(ance stan ar s e5pecte of her, follo$in* $hich or on Dece(ber %A an %0, %008, she i not
1 2 3 4

report for $or9 $ithout prior noticeF that on Dece(ber ',, %008, respon entJs superior #ill Malfitano -Malfitano. han carrie to her resi ence a (e(oran u( re@uirin* her to e5plain in $ritin* her unauthoriDe absences, $ith a $arnin* that failure to respon $ithin '2 hours fro( receipt thereof $oul be consi ere a $aiver of her ri*ht to *ive her e5planationF that respon ent, ho$ever, faile an refuse to sub(it an/ e5planation, constrainin* <;#i5 to ter(inate her e(plo/(entF an that on &pril '2, %001, <;#i5Js counsel $rote respon ent a letter5K7L e(an in* the rei(burse(ent of P%A1,7%) trainin* e5penses but the sa(e re(aine unhee e . Subse@uentl/ or on &u*ust '7, %001, respon ent file a co(plaint for ille*al is(issal a*ainst petitioner <;#i5 an Eor its Presi ent;petitioner ! ilberto #. #ravo.6K8L Her co(plaint, $hich $as oc9ete as N+R";N"R "ase No. ));)A; )70AA;01, alle*e as follo$s= &fter her trainin* abroa , she an her three other co;e(plo/ees;trainees an an &(erican (ana*er $ho $as assi*ne to the Philippines as part of the franchise a*ree(ent Mstarte the set;up of the ne$ franchise in the countr/.N She or*aniDe the launchin* of <;#i5Js subsi iar/ co(pan/ -Facilities Mana*ers, Inc.., traine personnel on ServiceMaster (etho s of cleanin* an branches upon MalfitanoJs a vice an *ui ance. &n custo(er service, an urin* the secon $ee9 of istribute che(icals an e@uip(ent fro( the <nite States to the various <;#i5

5 6

Dece(ber %008, she hea e the cleanin* personnel in cleanin* the pro uction plant in Sucat, ParaOa@ue $hich laste up to (i ni*ht for three a/s. Respon ent $ho $as (a e to un erstan that she $as the contact person of <;#i5 an the hea of the i(ple(entation tea(, $as furnishe a cop/ of her 4ob escription.7K1L On Dece(ber %1, %008, Malfitano (et $ith the i(ple(entation tea( an iscusse the various roles of each (e(ber thereof, since settin* up sta*e $as about to en strea(line . an the uties an responsibilities of each (e(ber $ere bein*

Fro( Dece(ber %A;%0, %008, respon ent suffere the co(pan/ of her absence.

fro( loose bo$el

(ove(ent, preventin* her fro( reportin* for $or9. She, ho$ever, faile to notif/

On the secon

a/ of her absence or on Dece(ber %0, %008, Malfitano

visite her urin* $hich she e5plaine to hi( that she ha no $a/ to co((unicate $ith the office e5cept b/ telephone but that her nei*hbor3s telephone $as out of or er. Bhen she reporte bac9 for $or9 on Dece(ber ',, %008, she $as as9e to e5plain $h/ she i not a vise the co(pan/ of her failure to report for $or9 on

Dece(ber %A an %0, %008. She reiterate her e5planation *iven to Malfitano, apolo*iDin* for the inconvenience her absence cause the office.

On the sa(e

a/ that she reporte

for $or9 on Dece(ber ',, %008,

Malfitano a vise her that he $as reco((en in* the ter(ination of her services an as9e her to, as she i , turn over her files an office 9e/s. &n he a vise her not to report for $or9 until further notice. She co(plie 8KAL an receive an/ $or receive a letter infor(in* her of her is(issal effective Februar/ %2, %001. i not fro( <;#i5 until the first $ee9 of March %001 $hen she

N+R";N"R "ase No. ));)7;),808;01 an N+R";N"R "ase No. )70AA;01 $ere consoli ate .9K0L

));)A;

#/ Decision of Februar/ A, %000, +abor &rbiter Donato ?. Iuinto, 6r., foun for <;#i5, isposin* as follo$s=10K%)L

BH!R!FOR!, 4u *(ent is hereb/ ren ere as follo$s= &. in N+R";N"R "ase No. ));)7;),808;01 %. Declarin* the is(issal of respon ent Valerie &nne H. Hollero to be vali an le*al, an
8 9 10

'. Or erin* sai respon ent Valerie &nne H. Hollero to pa/ co(plainant <;#i5 "orporation the a(ount of P%A1,7%).)) $ith interest at %'> per annu(, until full/ pai , as iscusse above. #. in N+R" N"R "ase No. ));)A;)70AA;01 P %. Dis(issin* co(plainant Valerie &nne H. Hollero3s co(plaint for ille*al is(issal an (one/ clai(s for lac9 of (erit. 11K%%L -<n erscorin* supplie .

On appeal before the National +abor Relations "o((ission -N+R". - oc9ete as N+R" N"R "& No. )%A000;00., 12K%'L the N+R" reverse the +abor &rbiterJs ecision. Fin in* that reinstate(ent $as not feasible ue to straine relations,13K%,L it a$ar e ispose =
BH!R!FOR!, pre(ises consi ere , the assaile A, %000 is hereb/ R!V!RS!D an S!T &SID! an follo$s= ecision ate Februar/ a ne$ one entere as

respon ent bac9$a*es an

separation pa/. Thus it

&. Dis(issin* the co(plaint of the respon ent;appellee <;#IH "ORPOR&TION, in N+R" N"R "ase No. ));)7;),808;01 for lac9 of 4uris ictionF an , #. Fin in* the is(issal of co(plainant;appellant Valerie &nne H. Hollero in N+R" N"R "ase No. ));)A;)70AA;01 to be ille*al thereb/ or erin* respon ents;appellees <;#IH "ORPOR&TIONE! ilberto #. #ravo to pa/ the for(er the follo$in*= %. #ac9$a*es P7'),))).)) '. Separation Pa/ 8),))).))F an Total P7A),))).))

11 12 13

&ll other clai(s for a(a*es are is(isse for insufficienc/ of evi ence. 14 K%2L -<n erscorin* supplie .

PetitionersJ Motion for Reconsi eration15K%7L havin* been N+R", the/ file

enie

b/ the

a Petition for "ertiorari -$ith application for issuance of

te(porar/ restrainin* or er an Eor $rit of preli(inar/ in4unction. 16K%8L before the "ourt of &ppeals $hich, b/ Decision17K%1L of 6anuar/ A, '))1, is(isse the sa(e, isposin* as follo$s=
-.ERE/ORE, the petition is DISMISSED. The assaile N+R" Resolutions ate 6ul/ %', %000 an March %2, '))) in N+R" N"R "& No. )%A000;00 are hereb/ A//IRMED $ith the clarification that N+R";N"R "ase No. ));)7;),808;01 is is(isse for lac9 of (erit instea of lac9 of 4uris iction. SO ORDERED.18K%AL -!(phasis in the ori*inal.

Their Motion for Reconsi eration19K%0L havin* been enie ,20K')L petitioners file the present Petition for Revie$ on "ertiorari, 21K'%L faultin* the "ourt of &ppeals
14 15 16 17 18 19 20 21

I 5 5 5 IN HO+DIN? TH&T P!TITION!RS F&I+!D TO !ST&#+ISH & V&+ID "&<S! FOR R!SPOND!NT HO++!ROJS DISMISS&+. II 5 5 5 IN R<+IN? TH&T P!TITION!R <;#IH F&I+!D TO O#S!RV! TH! PRO"!D<R&+ R!I<IR!M!NTS OF D<! PRO"!SS IN T!RMIN&TIN? R!SPOND!NT HO++!RO. III 5 5 5 IN R<+IN? TH&T P!TITION!R <;#IH IS NOT !NTIT+!D TO R!IM#<RS!M!NT OF R!SPOND!NT HO++!ROJS TR&ININ? !HP!NS!S.22K''L

In ter(ination cases, the e(plo/er has the bur en of provin* that the is(issal is for a vali an 4ust cause. 23K',L Bhile an e(plo/er en4o/s a $i er latitu e of iscretion in ter(inatin* the e(plo/(ent of (ana*erial e(plo/ees, 24 K'2L (ana*erial e(plo/ees are also entitle to securit/ of tenure an cannot be arbitraril/ is(isse at an/ ti(e an $ithout cause as reasonabl/ establishe in an appropriate investi*ation.25K'7L

In the case at bar, petitioners faile

to substantiate their alle*ations of

respon entJs habitual absenteeis(, habitual tar iness, ne*lect of uties, an lac9 of interest. Dail/ ti(e recor s, atten ance recor s, or other ocu(entar/ evi ence
22 23 24 25

attestin* to these *roun s coul alle*ations but none $as.

have rea il/ been presente

to support the

On the other han , copies of respon entJs Pa/ & vice Slips for Septe(ber; Dece(ber %008 sho$ no e uctions for absences or tar iness, e5cept in the Pa/ & vice Slip for October %;%7, %008 $hich e uctions correspon to a ul/ approve leave of absence $ithout pa/ fro( Septe(ber ',;'2, %008 -sub4ect of petitioner3s application file on Septe(ber '%, %008..26K'8L

& receipt ac9no$le *in* the turnover of 9e/s on Dece(ber ',, %008 27K'1L sub(itte b/ respon ent substantiates her account of the (eetin* that too9 place $hen she reporte bac9 for $or9 on that a/, $hich ocu(ent belies petitioners3 clai( that she aban one her $or9 an that MKoLn the evenin* of Dece(ber ',, %001, Mr. #ill Malfitano, one of respon entJs superiors, $ent out of his $a/ to eliver to the respon ent a letter re@uestin* for a $ritten e5planation as to her errant acts.N28K'AL

Malfitano3s (e(oran u( to respon ent ate Dece(ber %', %008, or close to t$o $ee9s before she $as as9e on Dece(ber ',, %008 to turn over the 9e/s, statin* that her Mlea ership role in this i(ple(entation is critical to our success in (eetin* our custo(ers3 nee sN29K'0L an she ha Mbeen intro uce as the FMI
26 27 28 29

(ana*er responsible for our pro*ra( i(ple(entation to the site coor inator at each of the <;#i5 facilities,N30K,)L belies <;#i5Js alle*ations of her habitual absenteeis(, habitual tar iness, ne*lect of ut/, an lac9 of interest.

Petitioners *o on to la/ stress on respon ent3s failure to report for $or9 on Dece(ber %A;'%, %008 $ithout notif/in* the office an $ithout e5plainin* her absence $hen she returne for $or9.31K,%L

&s the "ourt of &ppeals observe , ho$ever,

Recor s li9e$ise reveal that <;#i5 faile to a uce evi ence sho$in* that Mr. Malfitano enie or corroborate Kherein respon entL ValerieJs clai( that he ha visite her on the evenin* of Dece(ber %0, %008 an accepted the explanation for her absence. Bhile its plea in*s belo$ $ere silent on the (atter, <;#i5 a (its now that Mr. Malfitano $ent to ValerieJs house on sai ate 32K,'L but s9irte the issue of $hether or not he ha accepte her e5planation. That espite ValerieJs absences fro( Dece(ber %A to '%, %008 <;#i5 onl/ made issue of her absences on Dece(ber %A an %0, in icates that her con ition ha alrea / co(e to the latterJs 9no$le *e thereafter, thereb/ e5cusin* her absences on Dece(ber ') an '%. Thus, $hile the "ourt fin s it thou*htless of Valerie not to have e5erte ili*ent efforts to infor( the office of the reason for her absence at the earliest ti(e possible, it, ho$ever, believes in her clai( that she infor(e Mr. Malfitano about it an that the latter ha accepte her e5planation. In ee , the consistent rule is that if oubts e5ist bet$een the evi ence presente b/ the e(plo/er an the e(plo/ee, the scales of 4ustice (ust be tilte in favor of the latter.33K,,L -Italics in the ori*inalF un erscorin* supplie .

30 31 32 33

&ssu(in* arguendo that respon entJs four; a/ absence $as not 4ustifie , absences (ust be habitual to be a *roun for is(issal.34K,2L *rantin* that petitioners3 follo$in* contention is in or er, viz= &t all events,

In this a/ $here over;the;counter (e icines aboun for co((on ail(ents such as loose bo$el (ove(ent, HolleroJs stor/ of unabate +#M to cause her to be absent for 2 consecutive a/s startin* Dece(ber %A to Dece(ber '%, %008 is si(pl/ incre ible. BorsKeL, in this a/ an a*e of hi*h technolo*/ an (o ern teleco((unication facilities in Metro Manila, HolleroJs pitiful stor/ that she ha no other (eans of co((unicatin* $ith petitioner <;#i5 e5cept thru her nei*hborJs buste phone is even (ore incre ible. These bespea9 of an unresourceful an in ifferent (ana*er. It brea9s oneJs cre ibilit/ to believe that respon ent Hollero $as sufferin* for 2 consecutive a/s fro( unrelentin* +#M such that she coul not even re@uest so(ebo / to call her e(plo/er <;#i5 of her pre ica(ent. 5 5 5 35K,7L -<n erscorin* supplie .,

there (ust be reasonable proportionalit/ bet$een the offense an the penalt/. 36K,8L Dis(issal is the ulti(ate penalt/ that can be (ete to an e(plo/ee, an $here a penalt/ less punitive $oul suffice, $hatever (issteps (a/ be co((itte b/ labor ou*ht not to be visite $ith so severe conse@uence. 37K,1L Thus in Zagala v. Mikado hilippines Corporation,38K,AL this "ourt foun is(issal too severe a penalt/ on incurrin* of absences in e5cess of the allo$able nu(ber.
34 35 36 37 38

Further, petitioners ta9e respon entJs failure to pra/ for reinstate(ent as an a (ission that her straine is(issal $as vali .39K,0L Such position *losses over not be feasible ue to the #esi es, the (erits of a respon ent3s e5planation that reinstate(ent $oul relations bet$een her an

petitioners.40K2)L

co(plaint for ille*al is(issal o not epen on its pra/er but on $hether the e(plo/er ischar*es its bur en of provin* that the is(issal is vali . In another vein, the "ourt fin s that petitioners faile to co(pl/ $ith the proce ural re@uire(ents for a vali is(issal. Respon ent bein* a (ana*er i not e5cuse the( fro( observin* such proce ural re@uire(ents. Thus a first notice infor(in* an bearin* on the char*e (ust be sent to the e(plo/ee. The Dece(ber ',, %008 (e(oran u( of Malfitano $hich he han carrie to respon entJs resi ence on even ate (erel/ rea s=
I a( re@uestin* that /ou sen (e a $ritten e5planation $hich satisfactoril/ a resses the t$o a/s /ou aban one /our (ana*e(ent position $ithout a call or an/ contact $ith the ServiceM&ST!R tea( or an/one $ithin the <;#i5 Or*aniDation. The t$o a/s I a( referrin* to are Be nes a/, Dece(ber %A, %008 an Thurs a/, Dece(ber %0, %008. I a( re@uestin* that /ou respon in $ritin* b/ 7 p( on Tues a/, Dece(ber '2, %008. If $e o not receive a response $ithin the ti(e allotte $e $ill have to consi er this as $aivin* /our ri*ht to provi e an/ further e5planation relatin* to this absence.41K2%L

39 40

The notice oes not infor( outri*ht the e(plo/ee that an investi*ation $ill be con ucte on the char*es particulariDe therein $hich, if proven, $ill result to her is(issal. It oes not contain a plain state(ent of the char*es of (alfeasance or (isfeasance nor cate*oricall/ state the effect on her e(plo/(ent if the char*es are proven to be true.42K2'L It oes not apprise respon ent of possible is(issal shoul her e5planation prove unsatisfactor/. #esi es, the petitioners i not even establish that respon ent receive the (e(oran u(.

Neither i petitioners sho$ that the/ con ucte a hearin* or conference urin* $hich respon ent, $ith the assistance of counsel if she so esire , ha opportunit/ to respon to the char*e, present her evi ence, or rebut the evi ence presente a*ainst her.43K2,L The (eetin* $ith respon ent on Dece(ber ',, %008 i not satisf/ the hearin* re@uire(ent, for respon ent $as not *iven the opportunit/ to avail herself of counsel.

&rticle '11-b. of the +abor "o e (an ates that an e(plo/er $ho see9s to is(iss an e(plo/ee (ust Maffor the latter a(ple opportunit/ to be hear an to efen hi(self $ith the assistance of his representative if he so esires.N !5poun in* on this provision, this "ourt hel that MJKaL(ple opportunit/J connotes

41 42 43

ever/ 9in of assistance that (ana*e(ent (ust accor the e(plo/ee to enable hi( to prepare a e@uatel/ for his efense inclu in* le*al representation.N44K22L

Bith re*ar to <;#i5Js co(plaint for rei(burse(ent of trainin* e5penses, the "ourt fin s that the "ourt of &ppeals erre in hol in* that the +abor &rbiter has 4uris iction thereover. "onsi er the reason proffere for such rulin*=
5 5 5 In the instant case, $hile the principal relief pra/e for is the rei(burse(ent of a(a*es for breach of a contractual obli*ation, the issue of $hether or not Valerie shoul be hel liable therefor necessaril/ inclu es the eter(ination of the vali it/ of her ter(ination $hich can only be resolve b/ reference to, an application of, labor la$s an 4urispru ence. Thus, since the alle*e breach of the &*ree(ent is so closel/ intert$ine $ith the issue of ille*al is(issal, the resolution of both issues falls $ithin the area of co(petence or e5pertise of the labor arbiters an the N+R".45K27L -Italics in the ori*inal.

The le*alit/ of respon entJs is(issal $as, ho$ever, raise not b/ <;#i5Js co(plaint but in respon entJs Position Paper. 46K28L 6uris iction over the sub4ect (atter is eter(ine fro( the alle*ations (a e in the co(plaint, an cannot be (a e to epen upon the efenses (a e b/ a efen ant in his &ns$er or Motion to Dis(iss.47K21L The 4uris iction of labor arbiters, as $ell as of the N+R", is li(ite to isputes arisin* fro( an e(plo/er;e(plo/ee relationship $hich can onl/ be resolve b/ reference to the +abor "o e, other labor statutes, or their collective

44 45 46 47

bar*ainin* a*ree(ent.48K2AL <;#i5Js co(plaint $as one to collect su( of (one/ base on civil la$s P on obli*ations an contract, not to enforce ri*hts un er the +abor "o e, other labor statutes, or the collective bar*ainin* a*ree(ent.

-.ERE/ORE, the 6anuar/ A, '))1 Decision of the "ourt of &ppeals is A//IRMED 7*t8 MODI/ICATION in that N+R";N"R "ase No. ));)7;),808; 01 is is(isse , not for lac9 of (erit but, for lac9 of 4uris iction. SO ORD!R!D.

R%&$9:*' o# t8% P8*:*&&*n%"

S$&!%+% Co$!t
2a;$*o C*ty

T.IRD DI0ISION
JAGUAR SECURIT< an IN0ESTIGATION AGENC<, Petitioner, ; versus ; RODOL/O A. SALES, JAIME L. MORON, MEL0IN R. TAMA<O, JESUS 2. SIL0A, JR., DIONISIO C. CARAN<AGAN, DANET. /ETAL0ERO an
48

G.R. No. 162420

Present= CN&R!S;S&NTI&?O, J., Chairperson, &<STRI&;M&RTIN!Q, "HI"O;N&Q&RIO, N&"H<R&, and R!C!S, JJ.

DELTA MILLING INDUSTRIES, INC., Respon ents.

Pro(ul*ate = &pril '', '))A

5;;;;;;;;;;;;;;;;;;;;;;;;;; ;;;;;;;;;;;;;;;;;;;;;;;;;;5

DECISION
AUSTRIA1MARTINE=, J.!

&ssaile in the present Petition for Revie$ on Certiorari is the "ourt of &ppeals -"&. Decision49K%L ate October '%, '))' an Resolution50K'L ate Februar/ %,, '))2, is(issin* the petition file b/ 6a*uar Securit/ an Investi*ation &*enc/ -petitioner. an affir(in* the National +abor Relations "o((ission -N+R". Resolutions ate Septe(ber %0, '))) an Nove(ber 0, '))%. The facts of the case, as narrate b/ the "&, are un ispute = Petitioner 6a*uar Securit/ an Investi*ation &*enc/ -M6a*uarN. is a private corporation en*a*e in the business of provi in* securit/ services to its clients, one of $ho( is Delta Millin* In ustries, Inc. -MDeltaN.. Private respon ents Ro olfo Sales, Melvin Ta(a/o, Dionisio "aran/a*an, 6esus Silva, 6r., 6ai(e Moron an Daneth Fetalvero $ere hire as securit/ *uar s b/ 6a*uar. The/ $ere assi*ne at the pre(ises of Delta in +ibis, IueDon "it/. "aran/a*an an Ta(a/o $ere ter(inate b/ 6a*uar on Ma/ '8, %00A an &u*ust '%, %00A, respectivel/. &lle*e l/ their is(issals $ere arbitrar/ an ille*al. Sales, Moron, Fetalvero an Silva re(aine $ith 6a*uar. &ll the *uar ;e(plo/ees, clai( for (onetar/ benefits such as un erpa/(ent, overti(e pa/, rest a/ an holi a/ pre(iu( pa/, un erpai %,th (onth pa/, ni*ht shift ifferential, five a/s service an incentive leave pa/. In a ition to these (one/ clai(s, "aran/a*an an Ta(a/o ar*ue that the/ $ere entitle to separation pa/ an bac9 $a*es, for the ti(e the/ $ere ille*all/ is(isse until finalit/ of the ecision. Further(ore, all respon ents clai( for (oral an e5e(plar/ a(a*es. On Septe(ber %A, %00A, respon ent securit/ *uar s institute the instant labor case before the labor arbiter. 5555
49 50

On Ma/ '7, %000, the labor arbiter ren ere a ecision in favor of private respon ents Sales, et al., the ispositive portion of $hich provi es=
MBH!R!FOR!, 4u *(ent is hereb/ ren ere is(issin* the char*es of ille*al is(issal on the part of the co(plainants M!+VIN R. T&M&CO an DIONISIO ". "&R&NC&?&N for lac9 of (erit but or erin* respon ents 6&?<&R S!"<RITC &ND INV!STI?&TION &?!N"C an D!+T& MI++IN? IND<STRI!S, IN"., to 4ointl/ an severall/ pa/ all the si5 co(plainants, na(el/= RODO+FO &. S&+!S, M!+VIN R. T&M&CO, 6&IM! MORON an D&N!TH F!T&+V!RO the follo$in* (one/ clai(s for their services ren ere fro( &pril '2, %007 to &pril '2, %00A= a. b. c. . e. f. *. $a*e ifferentials overti(e pa/ ifferentials -2 hours a a/. rest a/ pa/ holi a/ pa/ holi a/ pre(iu( pa/ %,th (onth pa/ ifferentials five a/s service incentive leave pa/ per /ear e5ception earlier cite .

sub4ect to the

The Research an Infor(ation <nit of this "o((ission is hereb/ irecte to co(pute an @uantif/ the above a$ar s an sub(it a report thereon $ithin %7 a/s fro( receipt of this ecision. For purposes of an/ appeal, the appeal bon is tentativel/ set at P%)),))).)). &ll other clai(s are DISMISS!D for lac9 of (erit. SO ORD!R!D.N

On 6ul/ %, %000, petitioner 6a*uar file a partial appeal @uestionin* the failure of public respon ent N+R" to resolve its cross;clai( a*ainst Delta as the part/ ulti(atel/ liable for pa/(ent of the (onetar/ a$ar to the securit/ *uar s. In its Resolution ate Septe(ber %0, '))), the N+R" is(isse the appeal, hol in* that it $as not the proper foru( to raise the issue. It $ent on to sa/ that 6a*uar, bein* the irect e(plo/er of the securit/ *uar s, is the one principall/ liable to the e(plo/ees. Thus, it irecte petitioner to file a separate civil action for recover/ of the a(ount before the re*ular court havin* 4uris iction over the sub4ect (atter, for the purpose of provin* the liabilit/ of Delta. 6a*uar sou*ht reconsi eration of the is(issal, but the "o((ission enie the sa(e in its Resolution ate Nove(ber 0, '))%.51K,L

51

Petitioner file a petition for certiorari $ith the "&, $hich, in the herein assaile Decision ate October '%, '))'52K2L an Resolution ate Februar/ %,, '))2,53K7L is(isse the petition for lac9 of (erit. In the present petition, the follo$in* error is set forth as a *roun for the (o ification of the assaile Decision an Resolution= BITH &++ D<! R!SP!"T, TH! "O<RT OF &PP!&+S !RR!D IN NOT R!SO+VIN? P!TITION!RJS "ROSS;"+&IM &?&INST PRIV&T! R!SPOND!NT D!+T& MI++IN? IND<STRI!S, IN".54K8L Petitioner insists that its cross;clai( shoul have been rule upon in the labor case as the filin* of a cross;clai( is allo$e un er Section , of the N+R" Rules of Proce ure $hich provi es for the suppletor/ application of the Rules of "ourt. Petitioner ar*ues that the clai( arose out of the transaction or occurrence that is the sub4ect (atter of the ori*inal action. Petitioner further ar*ues that as principal, Delta Millin* In ustries, Inc. -Delta Millin*. is liable for the a$ar e $a*e increases, pursuant to Ba*e Or er Nos. N"R; )2, N"R;)7 an N"R;)8F an in line $ith the rulin* in "agle #ecurity $gency, %nc. v. &ational 'abor (elations Commission,55K1L petitioner shoul be rei(burse of an/ pa/(ents to be (a e. There is no @uestion as re*ar s the respective liabilities of petitioner an Delta Millin*. <n er &rticles %)8, %)1 an %)0 of the +abor "o e, the 4oint an several liabilit/ of the contractor an the principal is (an ate to assure co(pliance of the provisions therein inclu in* the statutor/ (ini(u( $a*e. The contractor, petitioner in this case, is (a e liable b/ virtue of his status as irect e(plo/er. On the other han , Delta Millin*, as principal, is (a e the in irect e(plo/er of the contractorJs e(plo/ees for purposes of pa/in* the e(plo/ees their $a*es shoul the contractor be unable to pa/ the(. This 4oint an several liabilit/ facilitates, if not *uarantees, pa/(ent of the $or9ersJ perfor(ance of an/ $or9, tas9, 4ob or pro4ect, thus *ivin* the $or9ers a(ple protection as (an ate b/ the %0A1 "onstitution.56KAL Ho$ever, in the event that petitioner pa/s his obli*ation to the *uar e(plo/ees pursuant to the Decision of the +abor &rbiter, as affir(e b/ the N+R" an "&, petitioner has the ri*ht of rei(burse(ent fro( Delta Millin* un er &rticle %'%1 of the "ivil "o e, $hich provi es= &rt. %'%1. Pa/(ent (a e b/ one of the soli ar/ ebtors e5tin*uishes the obli*ation. If t$o or (ore soli ar/ ebtors offer to pa/, the cre itor (a/ choose $hich offer to accept.
52 53 54 55 56

He $ho (a e the pa/(ent (a/ clai( fro( his co; ebtors onl/ the share $hich correspon s to each, $ith the interest for the pa/(ent alrea / (a e. If the pa/(ent is (a e before the ebt is ue, no interest for the intervenin* perio (a/ be e(an e . 5555 The @uestion that no$ arises is $hether petitioner (a/ clai( rei(burse(ent fro( Delta Millin* throu*h a cross;clai( file $ith the labor court. This @uestion has alrea / been ecisivel/ resolve in 'apanday $gricultural )evelopment Corporation v. Court of $ppeals,57K0L to $it= Be resolve first the issue of 4uris iction. Be a*ree $ith the respon ent that the RT" has 4uris iction over the sub4ect (atter of the present case. It is $ell;settle in la$ an 4urispru ence that $here no e(plo/er;e(plo/ee relationship e5ists bet$een the parties an no issue is involve $hich (a/ be resolve b/ reference to the +abor "o e, other labor statutes or an/ collective bar*ainin* a*ree(ent, it is the Re*ional Trial "ourt that has 4uris iction. In its co(plaint, private respon ent is not see9in* an/ relief un er the +abor "o e but see9s pa/(ent of a su( of (one/ an a(a*es on account of petitioner3s alle*e breach of its obli*ation un er their ?uar Service "ontract. T8% a't*on *" 7*t8*n t8% !%a:+ o# '*4*: :a7 8%n'% >$!*" *'t*on o4%! t8% 'a"% 9%:on;" to t8% !%;$:a! 'o$!t". -8*:% t8% !%"o:$t*on o# t8% *""$% *n4o:4%" t8% a&&:*'at*on o# :a9o! :a7", !%#%!%n'% to t8% :a9o! 'o % 7a" on:y #o! t8% %t%!+*nat*on o# t8% "o:* a!y :*a9*:*ty o# t8% &%t*t*on%! to t8% !%"&on %nt 78%!% no %+&:oy%!1%+&:oy%% !%:at*on %?*"t". &rticle '%1 of the +abor "o e as a(en e vests upon the labor arbiters e5clusive ori*inal 4uris iction onl/ over the follo$in*=
%. <nfair labor practicesF '. Ter(ination isputesF ,. If acco(panie $ith a clai( for reinstate(ent, those cases that $or9ers (a/ file involvin* $a*es, rates of pa/, hours of $or9 an other ter(s an con itions of e(plo/(entF 2. "lai(s for actual, (oral e5e(plar/ an other for(s of a(a*es arisin* fro( e(plo/er;e(plo/ee relationsF 7. "ases arisin* fro( an/ violation of &rticle '82 of this "o e, inclu in* @uestions involvin* le*alit/ of stri9es an loc9outsF an 8. !5cept clai(s for !(plo/ees "o(pensation, Social Securit/, Me icare an (aternit/ benefits, all other clai(s, arisin* fro( e(plo/er;e(plo/ee relations, inclu in* those of persons in o(estic or househol service, involvin* an a(ount e5cee in* five thousan pesos -P7,))).)). re*ar less of $hether acco(panie $ith a clai( for reinstate(ent.

In all these cases, an e(plo/er;e(plo/ee relationship is an in ispensable 4uris ictional re@uisiteF an there is none in this case.58K%)L -!(phasis supplie .
57 58

The 4uris iction of labor courts e5ten s onl/ to cases $here an e(plo/er;e(plo/ee relationship e5ists. In the present case, there e5ists no e(plo/er;e(plo/ee relationship bet$een petitioner an Delta Millin*. In its cross;clai(, petitioner is not see9in* an/ relief un er the +abor "o e but (erel/ rei(burse(ent of the (onetar/ benefits clai(s a$ar e an to be pai to the *uar e(plo/ees. There is no labor ispute involve in the cross;clai( a*ainst Delta Millin*. Rather, the cross;clai( involves a civil ispute bet$een petitioner an Delta Millin*. PetitionerJs cross;clai( is $ithin the real( of civil la$, an 4uris iction over it belon*s to the re*ular courts. Moreover, the liabilit/ of Delta Millin* to rei(burse petitioner $ill onl/ arise if an $hen petitioner actuall/ pa/s its e(plo/ees the a 4u *e liabilities.59K%%L Pa/(ent, $hich (eans not onl/ the eliver/ of (one/ but also the perfor(ance, in an/ other (anner, of the obli*ation, is the operative fact $hich $ill entitle either of the soli ar/ ebtors to see9 rei(burse(ent for the share $hich correspon s to each of the ebtors.60K%'L In this case, it appears that petitioner has /et to pa/ the *uar e(plo/ees. &s state in 'apanday! Ho$ever, it is not ispute that the private respon ent has not actuall/ pai the securit/ *uar s the $a*e increases *rante un er the Ba*e Or ers in @uestion. Neither is it alle*e that there is an e5tant clai( for such $a*e a 4ust(ents fro( the securit/ *uar s concerne , $hose services have alrea / been ter(inate b/ the contractor. &ccor in*l/, private respon ent has no cause of action a*ainst petitioner to recover the $a*e increases. Nee less to stress, the increases in $a*es are inten e for the benefit of the laborers an the contractor (a/ not assert a clai( a*ainst the principal for salar/ $a*e a 4ust(ents that it has not actuall/ pai . Other$ise, as correctl/ put b/ the respon ent, the contractor $oul be un ul/ enrichin* itself b/ recoverin* $a*e increases, for its o$n benefit.61K%,L "onse@uentl/, the "& i not co((it an/ error in is(issin* the petition an in affir(in* the N+R" Resolutions ate Septe(ber %0, '))) an Nove(ber 0, '))%. -.ERE/ORE, the petition is DENIED. Double costs a*ainst petitioner. SO ORDERED.

59 60 61

Republic of the Philippines SUPREME COURT Manila SECOND DI0ISION G.R. No. 16241@ J$:y 10, 2005 PAUL 0. SANTIAGO, petitioner, vs. C/ S.ARP CRE- MANAGEMENT, INC., respon ent. DECISION TINGA, J.: &t the heart of this case involvin* a contract bet$een a seafarer, on one han , an the (annin* a*ent an the forei*n principal, on the other, is this erst$hile unsettle le*al @uan ar/= $hether the seafarer, $ho $as prevente fro( leavin* the port of Manila an refuse eplo/(ent $ithout vali reason but $hose PO!&;approve e(plo/(ent contract provi es that the e(plo/er; e(plo/ee relationship shall co((ence onl/ upon the seafarer3s actual eparture fro( the port in the point of hire, is entitle to reliefG This treats of the petition for revie$ file b/ Paul V. Santia*o -petitioner. assailin* the Decision an Resolution of the "ourt of &ppeals ate %8 October ')), an %0 Februar/ '))2, respectivel/, in "&;?.R. SP No. 8A2)2.% Petitioner ha been $or9in* as a seafarer for S(ith #ell Mana*e(ent, Inc. -respon ent. for about five -7. /ears.' On , Februar/ %00A, petitioner si*ne a ne$ contract of e(plo/(ent $ith respon ent, $ith the uration of nine -0. (onths. He $as assure of a (onthl/ salar/ of <SR7%7.)), overti(e pa/ an other benefits. The follo$in* a/ or on 2 Februar/ %00A, the contract $as approve b/ the Philippine Overseas !(plo/(ent & (inistration -PO!&.. Petitioner $as to be eplo/e on boar the :MSV Seasprea : $hich $as sche ule to leave the port of Manila for "ana a on %, Februar/ %00A. & $ee9 before the sche ule ate of eparture, "apt. Pacifico Fernan eD, respon ent3s Vice Presi ent, sent a facsi(ile (essa*e to the captain of :MSV Seasprea ,: $hich rea s= I receive a phone call to a/ fro( the $ife of Paul Santia*o in Masbate as9in* (e not to sen her husban to MSV Seasprea an/(ore. Other callers $ho i not reveal their i entit/ *ave (e so(e fee bac9s that Paul Santia*o this ti(e if allo$e to epart $ill 4u(p ship in "ana a li9e his brother "hristopher Santia*o, OES $ho 4u(pe ship fro( the ".S. Ne5us in Sita;9/ushu, 6apan last Dece(ber, %001. Be o not $ant this to happen a*ain an have the vessel penaliDe li9e the ".S. Ne5us in 6apan. Fore$arne is forear(e li9e his brother $hen his brother $hen he $as appl/in* he behave li9e a Saint but in his heart he $as a serpent. If /ou a*ree $ith (e then $e $ill sen his replace(ent. Sin l/ a vise., To this (essa*e the captain of :MSV Seasprea : replie = Man/ than9s for /our a vice concernin* P. Santia*o, &E#. Please cancel plans for hi( to return to Seasprea .2 On 0 Februar/ %00A, petitioner $as thus tol that he $oul not be leavin* for "ana a an/(ore, but he $as reassure that he (i*ht be consi ere for eplo/(ent at so(e future ate.

Petitioner file a co(plaint for ille*al is(issal, a(a*es, an attorne/Js fees a*ainst respon ent an its forei*n principal, "able an Bireless -Marine. +t .7 The case $as raffle to +abor &rbiter Teresita "astillon;+ora, $ho rule that the e(plo/(ent contract re(aine vali but ha not co((ence since petitioner $as not eplo/e . &ccor in* to her, respon ent violate the rules an re*ulations *overnin* overseas e(plo/(ent $hen it i not eplo/ petitioner, causin* petitioner to suffer actual a(a*es representin* lost salar/ inco(e for nine -0. (onths an fi5e overti(e fee, all a(ountin* to <SR1, ')0.)). The labor arbiter hel respon ent liable. The ispositive portion of her Decision ate '0 6anuar/ %000 rea s= BH!R!FOR!, pre(ises consi ere , respon ent is hereb/ Or ere to pa/ co(plainant actual a(a*es in the a(ount of <SR1,')0.)) plus %)> attorne/Js fees, pa/able in Philippine peso at the rate of e5chan*e prevailin* at the ti(e of pa/(ent. &ll the other clai(s are hereb/ DISMISS!D for lac9 of (erit. SO ORD!R!D.8 On appeal b/ respon ent, the National +abor Relations "o((ission -N+R". rule that there is no e(plo/er;e(plo/ee relationship bet$een petitioner an respon ent because un er the Stan ar Ter(s an "on itions ?overnin* the !(plo/(ent of Filipino Seafarers on #oar Ocean ?oin* Vessels -PO!& Stan ar "ontract., the e(plo/(ent contract shall co((ence upon actual eparture of the seafarer fro( the airport or seaport at the point of hire an $ith a PO!&; approve contract. In the absence of an e(plo/er;e(plo/ee relationship bet$een the parties, the clai(s for ille*al is(issal, actual a(a*es, an attorne/3s fees shoul be is(isse .1 On the other han , the N+R" foun respon ent3s ecision not to eplo/ petitioner to be a vali e5ercise of its (ana*e(ent prero*ative.A The N+R" ispose of the appeal in this $ise= BH!R!FOR!, in the li*ht of the fore*oin*, the assaile Decision ate 6anuar/ '0, %000 is hereb/ &FFIRM!D in so far as other clai(s are concerne an $ith MODIFI"&TION b/ V&"&TIN? the a$ar of actual a(a*es an attorne/3s fees as $ell as e5clu in* Pacifico Fernan eD as part/ respon ent. SO ORD!R!D.0 Petitioner (ove for the reconsi eration of the N+R"3s Decision but his (otion $as enie for lac9 of (erit.%) He elevate the case to the "ourt of &ppeals throu*h a petition for certiorari. In its Decision%% ate %8 October ')),, the "ourt of &ppeals note that there is an a(bi*uit/ in the N+R"3s Decision $hen it affir(e $ith (o ification the labor arbiter3s Decision, because b/ the ver/ (o ification intro uce b/ the "o((ission -vacatin* the a$ar of actual a(a*es an attorne/3s fees., there is nothin* (ore left in the labor arbiter3s Decision to affir(.%' &ccor in* to the appellate court, petitioner is not entitle to actual a(a*es because a(a*es are not recoverable b/ a $or9er $ho $as not eplo/e b/ his a*enc/ $ithin the perio prescribe in the PO!& Rules.%, It a*ree $ith the N+R"3s fin in* that petitioner3s non; eplo/(ent $as a vali e5ercise of respon ent3s (ana*e(ent prero*ative.%2 It a e that since petitioner ha not eparte fro( the Port of Manila, no e(plo/er;e(plo/ee relationship bet$een the parties arose an an/ clai( for a(a*es a*ainst the so;calle e(plo/er coul have no le* to stan on.%7 Petitioner3s subse@uent (otion for reconsi eration $as enie on %0 Februar/ '))2.%8 The present petition is anchore on t$o *roun s, to $it= &. The Honorable "ourt of &ppeals co((itte a serious error of la$ $hen it i*nore KSLection %) of Republic &ct KR.&.L No. A)2' other$ise 9no$n as the Mi*rant Bor9er3s &ct of %007 as $ell as Section '0 of the Stan ar Ter(s an "on itions ?overnin* the

!(plo/(ent of Filipino Seafarers On;#oar Ocean;?oin* Vessels -$hich is ee(e incorporate un er the petitioner3s PO!& approve !(plo/(ent "ontract. that the clai(s or isputes of the Overseas Filipino Bor9er b/ virtue of a contract fall $ithin the 4uris iction of the +abor &rbiter of the N+R". #. The Honorable "ourt of &ppeals co((itte a serious error $hen it isre*ar e the re@uire @uantu( of proof in labor cases, $hich is substantial evi ence, thus a total eparture fro( establishe 4urispru ence on the (atter.%1 Petitioner (aintains that respon ent violate the Mi*rant Bor9ers &ct an the PO!& Rules $hen it faile to eplo/ hi( $ithin thirt/ -,). calen ar a/s $ithout a vali reason. In oin* so, it ha unilaterall/ an arbitraril/ prevente the consu((ation of the PO!&; approve contract. Since it prevente his eplo/(ent $ithout vali basis, sai eplo/(ent bein* a con ition to the consu((ation of the PO!& contract, the contract is ee(e consu((ate , an therefore he shoul be a$ar e actual a(a*es, consistin* of the stipulate salar/ an fi5e overti(e pa/.%A Petitioner a s that since the contract is ee(e consu((ate , he shoul be consi ere an e(plo/ee for all intents an purposes, an thus the labor arbiter an Eor the N+R" has 4uris iction to ta9e co*niDance of his clai(s.%0 Petitioner a itionall/ clai(s that he shoul be consi ere a re*ular e(plo/ee, havin* $or9e for five -7. /ears on boar the sa(e vessel o$ne b/ the sa(e principal an (anne b/ the sa(e local a*ent. He ar*ues that respon ent3s act of not eplo/in* hi( $as a sche(e esi*ne to prevent hi( fro( attainin* the status of a re*ular e(plo/ee.') Petitioner sub(its that respon ent ha no vali an sufficient cause to aban on the e(plo/(ent contract, as it (erel/ relie upon alle*e phone calls fro( his $ife an other unna(e callers in arrivin* at the conclusion that he $oul 4u(p ship li9e his brother. He points out that his $ife ha e5ecute an affi avit'% stron*l/ en/in* havin* calle respon ent, an that the other alle*e callers i not even isclose their i entities to respon ent.'' Thus, it $as error for the "ourt of &ppeals to a opt the unfoun e conclusion of the N+R", as the sa(e $as not base on substantial evi ence.', On the other han , respon ent ar*ues that the +abor &rbiter has no 4uris iction to a$ar petitioner3s (onetar/ clai(s. His e(plo/(ent $ith respon ent i not co((ence because his eplo/(ent $as $ithhel for a vali reason. "onse@uentl/, the labor arbiter an Eor the N+R" cannot entertain a 4u ication of petitioner3s case (uch less a$ar a(a*es to hi(. The controvers/ involves a breach of contractual obli*ations an as such is co*niDable b/ civil courts.'2 On another (atter, respon ent clai(s that the secon issue pose b/ petitioner involves a recalibration of facts $hich is outsi e the 4uris iction of this "ourt.'7 There is so(e (erit in the petition. There is no @uestion that the parties entere into an e(plo/(ent contract on , Februar/ %00A, $hereb/ petitioner $as contracte b/ respon ent to ren er services on boar :MSV Seasprea : for the consi eration of <SR7%7.)) per (onth for nine -0. (onths, plus overti(e pa/. Ho$ever, respon ent faile to eplo/ petitioner fro( the port of Manila to "ana a. "onsi erin* that petitioner $as not able to epart fro( the airport or seaport in the point of hire, the e(plo/(ent contract i not co((ence, an no e(plo/er;e(plo/ee relationship $as create bet$een the parties.'8 Ho$ever, a istinction (ust be (a e bet$een the perfection of the e(plo/(ent contract an the co((ence(ent of the e(plo/er;e(plo/ee relationship. The perfection of the contract, $hich in this case coinci e $ith the ate of e5ecution thereof, occurre $hen petitioner an respon ent a*ree on the ob4ect an the cause, as $ell as the rest of the ter(s an con itions therein. The

co((ence(ent of the e(plo/er;e(plo/ee relationship, as earlier iscusse , $oul have ta9en place ha petitioner been actuall/ eplo/e fro( the point of hire. Thus, even before the start of an/ e(plo/er;e(plo/ee relationship, conte(poraneous $ith the perfection of the e(plo/(ent contract $as the birth of certain ri*hts an obli*ations, the breach of $hich (a/ *ive rise to a cause of action a*ainst the errin* part/. Thus, if the reverse ha happene , that is the seafarer faile or refuse to be eplo/e as a*ree upon, he $oul be liable for a(a*es. Moreover, $hile the PO!& Stan ar "ontract (ust be reco*niDe an respecte , neither the (annin* a*ent nor the e(plo/er can si(pl/ prevent a seafarer fro( bein* eplo/e $ithout a vali reason. Respon ent3s act of preventin* petitioner fro( epartin* the port of Manila an boar in* :MSV Seasprea : constitutes a breach of contract, *ivin* rise to petitioner3s cause of action. Respon ent unilaterall/ an unreasonabl/ rene*e on its obli*ation to eplo/ petitioner an (ust therefore ans$er for the actual a(a*es he suffere . Be ta9e e5ception to the "ourt of &ppeals3 conclusion that a(a*es are not recoverable b/ a $or9er $ho $as not eplo/e b/ his a*enc/. The fact that the PO!& Rules'1 are silent as to the pa/(ent of a(a*es to the affecte seafarer oes not (ean that the seafarer is preclu e fro( clai(in* the sa(e. The sanctions provi e for non; eplo/(ent o not en $ith the suspension or cancellation of license or fine an the return of all ocu(ents at no cost to the $or9er. The/ o not forfen a seafarer fro( institutin* an action for a(a*es a*ainst the e(plo/er or a*enc/ $hich has faile to eplo/ hi(. The PO!& Rules onl/ provi e sanctions $hich the PO!& can i(pose on errin* a*encies. It oes not provi e for a(a*es an (one/ clai(s recoverable b/ a**rieve e(plo/ees because it is not the PO!&, but the N+R", $hich has 4uris iction over such (atters. Despite the absence of an e(plo/er;e(plo/ee relationship bet$een petitioner an respon ent, the "ourt rules that the N+R" has 4uris iction over petitioner3s co(plaint. The 4uris iction of labor arbiters is not li(ite to clai(s arisin* fro( e(plo/er;e(plo/ee relationships. Section %) of R.&. No. A)2' -Mi*rant Bor9ers &ct., provi es that= Sec. %). Money Claims. P Not$ithstan in* an/ provision of la$ to the contrar/, the +abor &rbiters of the National +abor Relations "o((ission -N+R". shall have the ori*inal an e5clusive 4uris iction to hear an eci e, $ithin ninet/ -0). calen ar a/s after the filin* of the co(plaint, the clai(s arisin* out of an e(plo/er;e(plo/ee relationship or b/ virtue of an/ la$ or contract involvin* Filipino $or9ers for overseas eplo/(ent inclu in* clai(s for actual, (oral, e5e(plar/ an other for(s of a(a*es. 5 5 5 K!(phasis supplie L Since the present petition involves the e(plo/(ent contract entere into b/ petitioner for overseas e(plo/(ent, his clai(s are co*niDable b/ the labor arbiters of the N+R". &rticle '%00 of the "ivil "o e provi es that one is entitle to an a e@uate co(pensation onl/ for such pecuniar/ loss suffere b/ hi( as he has ul/ prove . Respon ent is thus liable to pa/ petitioner actual a(a*es in the for( of the loss of nine -0. (onths3 $orth of salar/ as provi e in the contract. He is not, ho$ever, entitle to overti(e pa/. Bhile the contract in icate a fi5e overti(e pa/, it is not a *uarantee that he $oul receive sai a(ount re*ar less of $hether or not he ren ere overti(e $or9. !ven thou*h petitioner $as :prevente $ithout vali reason fro( ren erin* re*ular (uch less overti(e service,:'A the fact re(ains that there is no certaint/ that petitioner $ill perfor( overti(e $or9 ha he been allo$e to boar the vessel. The a(ount of <SR'A8.)) stipulate in the contract $ill be pai onl/ if an $hen the e(plo/ee ren ere overti(e $or9. This has been the tenor of our rulin*s in the case of #tolt*&ielsen Marine

#ervices + hils.,, %nc. v. &ational 'abor (elations Commission'0 $here $e iscusse the (atter in this li*ht= The contract provision (eans that the fi5e overti(e pa/ of ,)> $oul be the basis for co(putin* the overti(e pa/ if an $hen overti(e $or9 $oul be ren ere . Si(pl/ state , the ren ition of overti(e $or9 an the sub(ission of sufficient proof that sai $or9 $as actuall/ perfor(e are con itions to be satisfie before a sea(an coul be entitle to overti(e pa/ $hich shoul be co(pute on the basis of ,)> of the basic (onthl/ salar/. In short, the contract provision *uarantees the ri*ht to overti(e pa/ but the entitle(ent to such benefit (ust first be establishe . Realisticall/ spea9in*, a sea(an, b/ the ver/ nature of his 4ob, sta/s on boar a ship or vessel be/on the re*ular ei*ht; hour $or9 sche ule. For the e(plo/er to *ive hi( overti(e pa/ for the e5tra hours $hen he (i*ht be sleepin* or atten in* to his personal chores or even 4ust lullin* a$a/ his ti(e $oul be e5tre(el/ unfair an unreasonable.,) The "ourt also hol s that petitioner is entitle to attorne/3s fees in the concept of a(a*es an e5penses of liti*ation. &ttorne/Js fees are recoverable $hen the efen antJs act or o(ission has co(pelle the plaintiff to incur e5penses to protect his interest.,% Be note that respon ent3s basis for not eplo/in* petitioner is the belief that he $ill 4u(p ship 4ust li9e his brother, a (ere suspicion that is base on alle*e phone calls of several persons $hose i entities $ere not even confir(e . Ti(e an a*ain, this "ourt has uphel (ana*e(ent prero*atives so lon* as the/ are e5ercise in *oo faith for the a vance(ent of the e(plo/er3s interest an not for the purpose of efeatin* or circu(ventin* the ri*hts of the e(plo/ees un er special la$s or un er vali a*ree(ents.,' Respon ent3s failure to eplo/ petitioner is unfoun e an unreasonable, forcin* petitioner to institute the suit belo$. The a$ar of attorne/3s fees is thus $arrante . Ho$ever, (oral a(a*es cannot be a$ar e in this case. Bhile respon ent3s failure to eplo/ petitioner see(s baseless an unreasonable, $e cannot @ualif/ such action as bein* tainte $ith ba faith, or one eliberatel/ to efeat petitioner3s ri*hts, as to 4ustif/ the a$ar of (oral a(a*es. &t (ost, respon ent $as bein* overDealous in protectin* its interest $hen it beca(e too hast/ in (a9in* its conclusion that petitioner $ill 4u(p ship li9e his brother. Be li9e$ise o not see respon ent3s failure to eplo/ petitioner as an act esi*ne to prevent the latter fro( attainin* the status of a re*ular e(plo/ee. !ven if petitioner $as able to epart the port of Manila, he still cannot be consi ere a re*ular e(plo/ee, re*ar less of his previous contracts of e(plo/(ent $ith respon ent. In Millares v. &ational 'abor (elations Commission,,, the "ourt rule that seafarers are consi ere contractual e(plo/ees an cannot be consi ere as re*ular e(plo/ees un er the +abor "o e. Their e(plo/(ent is *overne b/ the contracts the/ si*n ever/ ti(e the/ are rehire an their e(plo/(ent is ter(inate $hen the contract e5pires. The e5i*encies of their $or9 necessitates that the/ be e(plo/e on a contractual basis.,2 BH!R!FOR!, petition is ?R&NT!D IN P&RT. The Decision ate %8 October ')), an the Resolution ate %0 Februar/ '))2 of the "ourt of &ppeals are R!V!RS!D an S!T &SID!. The Decision of +abor &rbiter Teresita D. "astillon;+ora ate '0 6anuar/ %000 is R!INST&T!D $ith the MODIFI"&TION that respon ent "F Sharp "re$ Mana*e(ent, Inc. is or ere to pa/ actual or co(pensator/ a(a*es in the a(ount of <SR2,8,7.)) representin* salar/ for nine -0. (onths as state in the contract, an attorne/3s fees at the reasonable rate of %)> of the recoverable a(ount. SO ORDERED. Carpio, Carpio*Morales, -elasco, Jr., JJ., concur.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 144565 Ma!'8 21, 2002 DIL< DAN< NACPIL, petitioner, vs. INTERNATIONAL 2ROADCASTING CORPORATION, respon ent. AAPUNAN, J.: This is a petition for revie$ on certiorari un er Rule 27, assailin* the Decision of the "ourt of &ppeals ate Nove(ber ',, %000 in "&;?.R. SP No. 7'177% an the Resolution ate &u*ust ,%, '))) en/in* petitioner Dil/ Dan/ NacpilJs (otion for reconsi eration. The "ourt of &ppeals reverse the ecisions pro(ul*ate b/ the +abor &rbiter an the National +abor Relations "o((ission -N+R"., $hich consistentl/ rule in favor of petitioner. Petitioner states that he $as &ssistant ?eneral Mana*er for FinanceE& (inistration an "o(ptroller of private respon ent Intercontinental #roa castin* "orporation -I#". fro( %008 until &pril %001. &ccor in* to petitioner, $hen !(iliano Te(plo $as appointe to replace I#" Presi ent To(as ?o(eD III so(eti(e in March %001, the for(er tol the #oar of Directors that as soon as he assu(es the I#" presi enc/, he $oul ter(inate the services of petitioner. &pparentl/, Te(plo bla(e petitioner, alon* $ith a certain Mr. #asilio an Mr. ?o(eD, for the prior (is(ana*e(ent of I#". <pon his assu(ption of the I#" presi enc/, Te(plo alle*e l/ harasse , insulte , hu(iliate an pressure petitioner into resi*nin* until the latter $as force to retire. Ho$ever, Te(plo refuse to pa/ hi( his retire(ent benefits, alle*e l/ because he ha not /et secure the clearances fro( the Presi ential "o((ission on ?oo ?overn(ent an the "o((ission on &u it. Further(ore, Te(plo alle*e l/ refuse to reco*niDe petitionerJs e(plo/(ent, clai(in* that petitioner $as not the &ssistant ?eneral Mana*erE"o(ptroller of I#" but (erel/ usurpe the po$ers of the "o(ptroller. Hence, in %001, petitioner file $ith the +abor &rbiter a co(plaint for ille*al is(issal an non;pa/(ent of benefits../wphi..n0t Instea of filin* its position paper, I#" file a (otion to is(iss alle*in* that the +abor &rbiter ha no 4uris iction over the case. I#" conten e that petitioner $as a corporate officer $ho $as ul/ electe b/ the #oar of Directors of I#"F hence, the case @ualifies as an intra;corporate ispute fallin* $ithin the 4uris iction of the Securities an !5chan*e "o((ission -S!".. Ho$ever, the (otion $as enie b/ the +abor &rbiter in an Or er ate &pril '', %00A.' On &u*ust '%, %00A, the +abor &rbiter ren ere a Decision statin* that petitioner ha been ille*all/ is(isse . The ispositive portion thereof rea s= BH!R!FOR!, in vie$ of all the fore*oin*, 4u *(ent is hereb/ ren ere in favor of the co(plainant an a*ainst all the respon ents, 4ointl/ an severall/, or erin* the latter= %. To reinstate co(plainant to his for(er position $ithout i(inution of salar/ or loss of seniorit/ ri*hts, an $ith full bac9$a*es co(pute fro( the ti(e of his ille*al is(issal on Ma/ %8, %001 up to the ti(e of his actual reinstate(ent $hich is tentativel/ co(pute as of the ate of this ecision on &u*ust '%, %00A in the a(ount of P%,',%,17).)) -i.e., P17,))).)) a (onth 5 %7.%8 (onths T P%,%,1,))).)) plus %,th (onth pa/ e@uivalent to %E%' of P %,%,1,))).)) T P02,17).)) or the total a(ount of P %,',%,17).)).. Shoul co(plainant be not

reinstate $ithin ten -%). a/s fro( receipt of this ecision, he shall be entitle to a itional bac9$a*es until actuall/ reinstate . '. +i9e$ise, to pa/ co(plainant the follo$in*= a. P ' Million as an for (oral a(a*esF b. P7)),))).)) as an for e5e(plar/ a(a*esF plus an -sic. c. Ten -%)>. percent thereof as an for attorne/Js fees. SO ORD!R!D., I#" appeale to the N+R", but the sa(e $as is(isse in a Resolution ate March ', %000, for its failure to file the re@uire appeal bon in accor ance $ith &rticle '', of the +abor "o e.2 I#" then file a (otion for reconsi eration that $as li9e$ise enie in a Resolution ate &pril '8, %000.7 I#" then file $ith the "ourt of &ppeals a petition for certiorari un er Rule 87, $hich petition $as *rante b/ the appellate court in its Decision ate Nove(ber ',, %000. The ispositive portion of sai ecision states= BH!R!FOR!, pre(ises consi ere , the petition for "ertiorari is ?R&NT!D. The assaile ecisions of the +abor &rbiter an the N+R" are R!V!RS!D an S!T &SID! an the co(plaint is DISMISS!D $ithout pre4u ice. #1 1()"(").8 Petitioner then file a (otion for reconsi eration, $hich $as enie b/ the appellate court in a Resolution ate &u*ust ,%, '))). Hence, this petition. Petitioner Nacpil sub(its that= I. TH! "O<RT OF &PP!&+S !RR!D IN FINDIN? TH&T P!TITION!R B&S &PPOINT!D #C R!SPOND!NTJS #O&RD OF DIR!"TORS &S "OMPTRO++!R. THIS FINDIN? IS "ONTR&RC TO TH! "OMMON, "ONSIST!NT POSITION &ND &DMISSION OF #OTH P&RTI!S. F<RTH!R, R!SPOND!NTJS #C;+&BS DO!S NOT IN"+<D! "OMPTRO++!R &S ON! OF ITS "ORPOR&T! OFFI"!RS. II. TH! "O<RT OF &PP!&+S B!NT #!COND TH! ISS<! OF TH! "&S! BH!N IT S<#STIT<T!D TH! N&TION&+ +&#OR R!+&TIONS "OMMISSIONJS D!"ISION TO &PP+C TH! &PP!&+ #OND R!I<IR!M!NT STRI"T+C IN TH! INST&NT "&S!. TH! ON+C ISS<! FOR ITS D!T!RMIN&TION IS BH!TH!R N+R" "OMMITT!D ?R&V! &#<S! OF DIS"R!TION IN DOIN? TH! S&M!.1 The issue to be resolve is $hether the +abor &rbiter ha 4uris iction over the case for ille*al is(issal an non;pa/(ent of benefits file b/ petitioner. The "ourt fin s that the +abor &rbiter ha no 4uris iction over the sa(e. <n er Presi ential Decree No. 0)';& -the Revise Securities &ct., the la$ in force $hen the co(plaint for ille*al is(issal $as institute b/ petitioner in %001, the follo$in* cases fall un er the e5clusive of the S!"= a. Devices or sche(es e(plo/e b/ or an/ acts of the boar of irectors, business associates, its officers or partners, a(ountin* to frau an (isrepresentation $hich (a/ be etri(ental to the interest of the public an Eor of the stoc9hol ers, partners, (e(bers of associations or or*aniDations re*istere $ith the "o((issionF

b. "ontroversies arisin* out of intra;corporate or partnership relations, bet$een an a(on* stoc9hol ers, (e(bers or associatesF bet$een an/ or all of the( an the corporation, partnership or association of $hich the/ are stoc9hol ers, (e(bers or associates, respectivel/F an bet$een such corporation, partnership or association an the State insofar as it concerns their in ivi ual franchise or ri*ht to e5ist as such entit/F c. Cont!o4%!"*%" *n t8% %:%'t*on o! a&&o*nt+%nt o# *!%'to!", t!$"t%%", o##*'%!", o! +ana;%!" o# "$'8 'o!&o!at*on", &a!tn%!"8*&" o! a""o'*at*on"( . Petitions of corporations, partnerships, or associations to be eclare in the state of suspension of pa/(ents in cases $here the corporation, partnership or association possesses propert/ to cover all of its ebts but foresees the i(possibilit/ of (eetin* the( $hen the/ respectivel/ fall ue or in cases $here the corporation, partnership or association has no sufficient assets to cover its liabilities, but is un er the Mana*e(ent "o((ittee create pursuant to this ecree. -!(phasis supplie .. The "ourt has consistentl/ hel that there are t$o ele(ents to be consi ere in eter(inin* $hether the S!" has 4uris iction over the controvers/, to $it= -%. the status or relationship of the partiesF an -'. the nature of the @uestion that is the sub4ect of their controvers/.A Petitioner ar*ues that he is not a corporate officer of the I#" but an e(plo/ee thereof since he ha not been electe nor appointe as "o(ptroller an &ssistant Mana*er b/ the I#"Js #oar of Directors. He points out that he ha actuall/ been appointe as such on 6anuar/ %%, %007 b/ the I#"Js ?eneral Mana*er, "eferino #asilio. In support of his ar*u(ent, petitioner un erscores the fact that the I#"Js #/;+a$s oes not even inclu e the position of co(ptroller in its roster of corporate officers.0 He therefore conten s that his is(issal is a controvers/ fallin* $ithin the 4uris iction of the labor courts.%) PetitionerJs ar*u(ent is untenable. !ven assu(in* that he $as in fact appointe b/ the ?eneral Mana*er, such appoint(ent $as subse@uentl/ approve b/ the #oar of Directors of the I#".%% That the position of "o(ptroller is not e5pressl/ (entione a(on* the officers of the I#" in the #/;+a$s is of no (o(ent, because the I#"Js #oar of Directors is e(po$ere un er Section '7 of the "orporation "o e%' an un er the corporationJs #/;+a$s to appoint such other officers as it (a/ ee( necessar/. The #/;+a$s of the I#" cate*oricall/ provi es= HII. OFFI"!RS The officers of the corporation shall consist of a Presi ent, a Vice;Presi ent, a Secretar/; Treasurer, a ?eneral Mana*er, an "$'8 ot8%! o##*'%!" a" t8% 2oa! o# D*!%'to!" +ay #!o+ t*+% to t*+% o%" #*t to &!o4* % #o!. Sa* o##*'%!" "8a:: 9% %:%'t% 9y +a>o!*ty 4ot% o# t8% 2oa! o# D*!%'to!" an shall have such po$ers an uties as shall hereinafter provi e -!(phasis supplie ..%, The "ourt has hel that in (ost cases the 2b/;la$s (a/ an usuall/ o provi e for such other officers,:%2 an that $here a corporate office is not specificall/ in icate in the roster of corporate offices in the b/;la$s of a corporation, the boar of irectors (a/ also be e(po$ere un er the b/;la$s to create a itional officers as (a/ be necessar/.%7 &n :office: has been efine as a creation of the charter of a corporation, $hile an :officer: as a person electe b/ the irectors or stoc9hol ers. On the other han , an :e(plo/ee: occupies no office an is *enerall/ e(plo/e not b/ action of the irectors an stoc9hol ers but b/ the (ana*in* officer of the corporation $ho also eter(ines the co(pensation to be pai to such e(plo/ee.%8

&s petitionerJs appoint(ent as co(ptroller re@uire the approval an for(al action of the I#"Js #oar of Directors to beco(e vali ,%1 it is clear therefore hol s that petitioner is a corporate officer $hose is(issal (a/ be the sub4ect of a controvers/ co*niDable b/ the S!" un er Section 7-c. of P.D. 0)';& $hich inclu es controversies involvin* both election an a&&o*nt+%nt of corporate irectors, trustees, officers, an (ana*ers.%A Ha petitioner been an or inar/ e(plo/ee, such boar action $oul not have been re@uire . Thus, the "ourt of &ppeals correctl/ hel that= Since co(plainantJs appoint(ent $as approve unani(ousl/ b/ the #oar of Directors of the corporation, he is therefore consi ere a corporate officer an his clai( of ille*al is(issal is a controvers/ that falls un er the 4uris iction of the S!" as conte(plate b/ Section 7 of P.D. 0)';&. The rule is that is(issal or non;appoint(ent of a corporate officer is clearl/ an intra;corporate (atter an 4uris iction over the case properl/ belon*s to the S!", not to the N+R".%0 &s to petitionerJs ar*u(ent that the nature of his functions is reco((en ator/ thereb/ (a9in* hi( a (ere (ana*erial officer, the "ourt has previousl/ hel that the relationship of a person to a corporation, $hether as officer or a*ent or e(plo/ee is not eter(ine b/ the nature of the services perfor(e , but instea b/ the inci ents of the relationship as the/ actuall/ e5ist.') It is li9e$ise of no conse@uence that petitionerJs co(plaint for ille*al is(issal inclu es (one/ clai(s, for such clai(s are actuall/ part of the per@uisites of his position in, an therefore lin9e $ith his relations $ith, the corporation. The inclusion of such (one/ clai(s oes not convert the issue into a si(ple labor proble(. "learl/, the issues raise b/ petitioner a*ainst the I#" are (atters that co(e $ithin the area of corporate affairs an (ana*e(ent, an constitute a corporate controvers/ in conte(plation of the "orporation "o e.'% Petitioner further ar*ues that the I#" faile to perfect its appeal fro( the +abor &rbiterJs Decision for its non;pa/(ent of the appeal bon as re@uire un er &rticle '', of the +abor "o e, since co(pliance $ith the re@uire(ent of postin* of a cash or suret/ bon in an a(ount e@uivalent to the (onetar/ a$ar in the 4u *(ent appeale fro( has been hel to be both (an ator/ an 4uris ictional.'' Hence, the Decision of the +abor &rbiter ha lon* beco(e final an e5ecutor/ an thus, the "ourt of &ppeals acte $ith *rave abuse of iscretion a(ountin* to lac9 or e5cess of 4uris iction in *ivin* ue course to the I#"Js petition for certiorari, an in eci in* the case on the (erits. The I#"Js failure to post an appeal bon $ithin the perio (an ate un er &rticle '', of the +abor "o e has been ren ere i((aterial b/ the fact that the +abor &rbiter i not have 4uris iction over the case since as state earlier, the sa(e is in the nature of an intra;corporate controvers/. The "ourt has consistentl/ hel that $here there is a fin in* that an/ ecision $as ren ere $ithout 4uris iction, the action shall be is(isse . Such efense can be interpose at an/ ti(e, urin* appeal or even after final 4u *(ent.', It is a $ell;settle rule that 4uris iction is conferre onl/ b/ the "onstitution or b/ la$. It cannot be fi5e b/ the $ill of the partiesF it cannot be ac@uire throu*h, enlar*e or i(inishe b/, an/ act or o(ission of the parties.'2 "onsi erin* the fore*oin*, the "ourt hol s that no error $as co((itte b/ the "ourt of &ppeals in is(issin* the case file before the +abor &rbiter, $ithout pre4u ice to the filin* of an appropriate action in the proper court. ./wphi..n0t It (ust be note that un er Section 7.' of the Securities Re*ulation "o e -Republic &ct No. A100. $hich $as si*ne into la$ b/ then Presi ent 6oseph !4ercito !stra a on 6ul/ %0, '))), the S!"Js 4uris iction over all cases enu(erate in Section 7 of P.D. 0)';& has been transferre to the Re*ional Trial "ourts.'7

-.ERE/ORE, the petition is hereb/ DISMISSED an the Decision of the "ourt of &ppeals in "&;?.R. SP No. 7'177 is A//IRMED. SO ORDERED. )avide, Jr., C.J., and 3nares*#antiago, JJ., concur. uno, J., on official leave.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 1410@B /%9!$a!y 20, 2001 PRUDENTIAL 2ANA an TRUST COMPAN<, petitioner, vs. CLARITA T. RE<ES, respon ent. GON=AGA1RE<ES, J.: #efore the "ourt is a petition for revie$ on certiorari of the Decision,% ate October %7, %000 of the "ourt of &ppeals in ".&.;?.R. SP No. ,)8)1 an of its Resolution, ate Dece(ber 8, %000 en/in* petitionerJs (otion for reconsi eration of sai ecision. The "ourt of &ppeals reverse an set asi e the resolution' of the National +abor Relations "o((ission -N+R". in N+R" N"R "& No.))0,82;07, reversin* an settin* asi e the labor arbiterJs ecision an is(issin* for lac9 of (erit private respon entJs co(plaint., The case ste(s fro( N+R" N"R "ase No.));)8;),28';0', $hich is a co(plaint for ille*al suspension an ille*al is(issal $ith pra/er for (oral an e5e(plar/ a(a*es, *ratuit/, frin*e benefits an attorne/Js fees file b/ "larita Tan Re/es a*ainst Pru ential #an9 an Trust "o(pan/ -the #an9. before the labor arbiter. Prior to her is(issal, private respon ent Re/es hel the position of &ssistant Vice Presi ent in the forei*n epart(ent of the #an9, tas9e $ith the uties, a(on* others, to collect chec9s ra$n a*ainst overseas ban9s pa/able in forei*n currenc/ an to ensure the collection of forei*n bills or chec9s purchase , inclu in* the si*nin* of trans(ittal letters coverin* the sa(e. &fter procee in*s ul/ un erta9en b/ the parties, 4u *(ent $as ren ere b/ labor &rbiter "ornelio +. +insan*an, the ispositive portion of $hich rea s= :BH!R!FOR!, fin in* the is(issal of co(plainant to be $ithout factual an le*al basis, 4u *(ent is hereb/ ren ere or erin* the respon ent ban9 to pa/ her bac9 $a*es for three -,. /ears in the a(ount of P72),))).)) -P%7,))).)) 5 ,8 (os... In lieu of reinstate(ent, the respon ent is also or ere to pa/ co(plainant separation pa/ e@uivalent to one (onth salar/ for ever/ /ear of service, in the a(ount of P2'),))).)) -P%7,))) 5 'A (os... In a ition, the respon ent shoul . also pa/ co(plainant profit sharin* an unpai frin*e benefits. &ttorne/Js fees e@uivalent to ten -%)>. percent of the total a$ar shoul li9e$ise be pai b/ respon ent. SO ORD!R!D.:2 Not satisfie , the #an9 appeale to the N+R" $hich, as (entione at the outset, reverse the +abor &rbiterJs ecision in its Resolution ate '2 March %001. Private respon ent sou*ht reconsi eration $hich, ho$ever, $as enie b/ the N+R" in its Resolution of 'A 6ul/ %00A. &**rieve , private respon ent co((ence on October 'A, %00A, a petition for certiorari before

the Supre(e "ourt.7 The sub4ect petition $as referre to the "ourt of &ppeals for appropriate action an isposition per resolution of this "ourt ate Nove(ber '7, %00A, in accor ance $ith the rulin* in #t. Marlin 4uneral 5omes vs. &'(C.8 In its assaile ecision, the "ourt of &ppeals a opte the follo$in* antece ent facts lea in* to Re/esJs is(issal as su((ariDe b/ the N+R"= :The au itors of the #an9 iscovere that t$o chec9s, No.)%%1'A;1',';%28, in the a(ount of <SR%)0,87).)), an No. )%%1,);1',';%28, in the a(ount of <SR%%7,))).)), receive b/ the #an9 on &pril 8, %0A0, ra$n ,b/ the Sanfor Tra in* a*ainst Hon*9on* an Shan*hai #an9in* "orporation, 6uron* #ranch, Sin*apore, in favor of Filipinas T/ro(, $ere not sent out for collection to Hon*9on* Shan*hai #an9in* "orporation on the alle*e or er of the co(plainant until the sai chec9s beca(e stale. The #an9 create a co((ittee to investi*ate the fin in*s of the au itors involvin* the t$o chec9s $hich $ere not collecte an beca(e stale. On March A, %00%, the presi ent of the #an9 issue a (e(oran u( to the co(plainant infor(in* her of the fin in*s of the au itors an as9e her to *ive her si e. In repl/, co(plainant re@ueste for an e5tension of one $ee9 to sub(it her e5planation. In a :subse@uent letter, ate March %2, %00%, to the presi ent, co(plainant state that in vie$ of the refusal of the #an9 that she be furnishe copies of the pertinent ocu(ents she is re@uestin* an the refusal to *rant her a reasonable perio to prepare her ans$er, she $as constraine to (a9e a *eneral enial of an/ (isfeasance or (alfeasance on her part an as9e that a for(al investi*ation be (a e. &s the co(plainant faile to atten an participate in the for(al investi*ation con ucte b/ the "o((ittee on Ma/ '2, %00%, espite ue notice, the "o((ittee procee e $ith its hearin*s an hear the testi(onies of several $itnesses. The "o((itteeJs fin in*s $ere= Ja. The t$o -'. HS#" chec9s $ere receive b/ the Forei*n Depart(ent on 8 &pril %0A0. On the sa(e a/, co(plainant authoriDe the cre itin* of the account of Filipinas T/ro( in the a(ount of P2,1A),%)'.1) correspon in* to the face value of the chec9s, -!5hibits 8, '' to '';& an ', to ',;&.. On the follo$in* a/, a trans(ittal letter $as prepare b/ Ms. "ecilia 6oven, a re(ittance cler9 then assi*ne in the Forei*n Depart(ent, for the purpose of sen in* out the t$o -'. HS#" chec9s for collection. She then re@ueste co(plainant to si*n the sai trans(ittal letters -!5hibits %, 1 an '7F TSN, %% March %00,, pp. 2';7'., as it is co(plainant $ho *ives her instructions irectl/ concernin* the trans(ittal of forei*n bills purchase . &ll other trans(ittal letters are in fact si*ne b/ co(plainant. b. &fter Ms. 6oven elivere the trans(ittal letters an the chec9s to the &ccountin* Section of the Forei*n Depart(ent, co(plainant instructe her to $ith ra$ the sa(e for the purpose of chan*in* the a ressee thereon fro( &(erican !5press #an9 to #an9 of Ha$aii -ibi .. un er a special collection sche(e -!5hibits 2 an 7 to 7;#.. c. &fter co(pl/in* $ith co(plainantJs instruction, Ms. 6oven then returne to co(plainant for the latter to si*n the ne$ trans(ittal letters. Ho$ever, co(plainant tol Ms. 6oven to 4ust hol on to the letters an chec9s an a$ait further instructions -ibi ... Thus, the ne$ trans(ittal letters re(aine unsi*ne . -See !5hibits 7 to 7;#..

. In 6une %0A0, Ms. 6oven $as transferre to another epart(ent. Hence, her uties, responsibilities an functions, inclu in* the responsibilit/ over the t$o -'. HS#" chec9s, $ere turne over to another re(ittance cler9, Ms. &nalisa "astillo -!5hibit %2F TSN, 2 6une %00,, pp. '1;'0.. e. Bhen as9e b/ Ms. "astillo about the t$o -'. HS#" chec9s, Ms. 6oven rela/e to the latter co(plainantJs instruction -!5hibit %2F TSN, 2 6une %00,, p. 2'.. f. &bout fifteen -%7. (onths after the HS#" chec9s $ere receive b/ the #an9, the sai chec9s $ere iscovere in the course of an au it con ucte b/ the #an9Js au itors. &tt/. Pablo Ma*no, the #an9Js le*al counsel, a vise co(plainant to sen the chec9s for collection espite the lapse of fifteen -%7. (onths. *. "o(plainant, ho$ever, eliberatel/ $ithhel &tt/. Ma*noJs a vice fro( her superior, the Senior Vice;Presi ent, Mr. Renato Santos an falsel/ infor(e the latter that &tt/ . Ma*no a vise that a e(an letter be sent instea , thereb/ further ela/in* the collection of the HS#" chec9s. h. On %) 6ul/ %00), the HS#" chec9s $ere finall/ sent for collection, but $ere returne on %8 6ul/ %00) for the reason Jaccount close J -!5hibits ';& an ,;&..J &fter a revie$ of the "o((itteeJs fin in*s, the #oar of Directors of the #an9 resolve not to re;elect co(plainant an/ lon*er to the position of assistant presi ent pursuant to the #an9Js #/;la$s. On 6ul/ %0, %00%, co(plainant $as infor(e of her ter(ination of e(plo/(ent fro( the #an9 b/ Senior Vice Presi ent #ene icto +. Santos, in a letter the te5t of $hich is @uote in full= JDear Mrs. Re/es= &fter a thorou*h investi*ation an appreciation of the char*es a*ainst /ou as containe in the Me(oran u( of the Presi ent ate March A, %00%, the Fact Fin in* "o((ittee $hich $as create to investi*ate the co((ission an Eor o(ission of the acts allu e therein, has foun the follo$in*= %. Cou have eliberatel/ hel the clearin* of "hec9s Nos. %%1'A an %%1,) of Hon*9on* an Shan*hai #an9in* "orporation in the total a(ount of <SR''2,87).)) b/ *ivin* instructions to the collection cler9 not to sen the chec9s for collection. In vie$ thereof, $hen the sai chec9s $ere finall/ sent to clearin* after the lapse of %7 (onths fro( receipt of sai chec9s, the/ $ere returne for the reason J&ccount close .J To ate, the value of sai chec9s have not been pai b/ Filipinas T/ro(, $hich as pa/ee of the chec9s, ha been cre ite $ith their peso e@uivalentF '. Cou trie to influence the ecision of &tt/. Pablo P. Ma*no, #an9 le*al counsel, b/ as9in* hi( to o so(ethin* alle*e l/ upon instructions of a Senior Vice Presi ent of the #an9 or else lose his 4ob $hen in truth an in fact no such instructions $as *ivenF an ,. Cou eliberatel/ $ithhel fro( Mr. Santos, Senior Vice Presi ent, the a vice *iven b/ the le*al counsel of the #an9 $hich Mr. Santos ha as9e /ou to see9. &s a (atter of fact, /ou even rela/e a false a vice $hich ela/e further the sen in* of the t$o chec9s for collection. +i9e$ise, /ou refuse to hee the a vice of the #an9Js le*al counsel to sen the chec9s for collection.

These fin in*s have *iven rise to the #an9Js loss of trust an confi ence in /ou, the sa(e bein* acts of serious (iscon uct in the perfor(ance of /our uties resultin* in (onetar/ loss to the #an9. In vie$ thereof, the #oar has resolve not to re;elect /ou to the position of &ssistant Vice Presi ent of the #an9. &ccor in*l/, /our services are ter(inate effective i((e iatel/. In relation thereto, /our (onetar/ an retire(ent benefits are forfeite e5cept those that have veste in /ou.J In her position paper, co(plainant alle*e that the real reason for her is(issal $as her filin* of the cri(inal cases a*ainst the ban9 presi ent, the vice presi ent an the au itors of the #an9, such filin* not bein* a vali *roun for her is(issal. Further(ore, she alle*e that it $oul be self;servin* for the respon ent to state that she $as foun *uilt/ of *ross (iscon uct in eliberatel/ $ithhol in* the clearin* of the t$o ollar chec9s. She further alle*e that she $as not affor e ue process as she $as not *iven the chance to refute the char*es (entione in the letter of is(issal. Hence, she $as ille*all/ is(isse . On the other han , respon ent ar*ues that there $ere substantial bases for the ban9 to lose its trust an confi ence on the co(plainant an , accor in*l/, ha 4ust cause for ter(inatin* her services. Moreover, for filin* the clearl/ unfoun e suit a*ainst the respon entJs officers, co(plainant is liable to pa/ (oral an e5e(plar/ a(a*es an attorne/Js fees.:1 The "ourt of &ppeals foun that the N+R" co((itte *rave abuse of iscretion in rulin* that the is(issal of Re/es is vali . In effect, the "ourt of &ppeals reinstate the 4u *(ent of the labor arbiter $ith (o ification as follo$s= :BH!R!FOR!, in the li*ht of the fore*oin*, the ecision appeale fro( is hereb/ R!V!RS!D an S!T &SID!. In lieu thereof, 4u *(ent is hereb/ ren ere or erin* respon ent #an9 as follo$s= %. To pa/ petitioner full bac9$a*es an other benefits fro( 6ul/ %0, %00% up to the finalit/ of this 4u *(entF '. To pa/ petitioner separation pa/ e@uivalent to one -%. (onth salar/ for ever/ /ear of service in lieu of reinstate(entF an ,. To pa/ attorne/Js fee e@uivalent to ten -%)>. percent of the total a$ar . SO ORD!R!D.:A Hence, the #an9Js recourse to this "ourt conten in* in its (e(oran u( that= :IN S!TTIN? &SID! TH! D!"ISION D&T!D '2 M&R"H %001 &ND TH! R!SO+<TION D&T!D 'A 6<+C %00A OF TH! N+R" &ND R!INST&TIN? BITH MODIFI"&TION TH! D!"ISION D&T!D ') 6<+C %007 OF +&#OR &R#IT!R "ORN!+IO +. +INS&N?&N, TH! HONOR&#+! "O<RT OF &PP!&+S S!RIO<S+C !RR!D, IN VI!B OF TH! FO++OBIN?= I. IT IS TH! S!" -NOB TH! R!?ION&+ TRI&+ "O<RT. &ND NOT TH! N+R" BHI"H H&S ORI?IN&+ &ND !H"+<SIV! 6<RISDI"TION OV!R "&S!S INVO+VIN? TH! R!MOV&+ FROM OFFI"! OF "ORPOR&T! OFFI"!RS. II.

!V!N &SS<MIN? &R?<!NDO TH&T TH! N+R" H&S 6<RISDI"TION, TH!R! B&S S<#ST&NTI&+ !VID!N"! OF R!SPOND!NTJS MIS"OND<"T 6<STIFCIN? TH! #&NSJS +OSS OF TR<ST &ND "ONFID!N"! ON -sic. H!R. III. !V!N &SS<MIN? &R?<!NDO TH&T R!SPOND!NT B&S !NTIT+!D TO #&"SB&?!S, TH! HONOR&#+! "O<RT OF &PP!&+S !RR!D IN &B&RDIN? <N+IMIT!D &ND <NI<&+IFI!D #&"SB&?!S TH!R!#C ?OIN? F&R #!COND TH! +&#OR &R#IT!RJS D!"ISION +IMITIN? TH! S&M! TO THR!! C!&RS, BHI"H D!"ISION R!SPOND!NT H!RS!+F SO<?HT TO !H!"<T!.: 0 In su(, the resolution of this petition hin*es on -%. $hether the N+R" has 4uris iction over the co(plaint for ille*al is(issalF -'. $hether co(plainant Re/es $as ille*all/ is(isse F an -,. $hether the a(ount of bac9 $a*es a$ar e $as proper. On the first issue, petitioner see9s refu*e behin the ar*u(ent that the ispute is an intra; corporate controvers/ concernin* as it oes the non;election of private respon ent to the position of &ssistant Vice;Presi ent of the #an9 $hich falls un er the e5clusive an ori*inal, 4uris iction of the Securities an !5chan*e "o((ission -no$ the Re*ional Trial "ourt. un er Section 7 of Presi ential Decree No. 0)';&. More specificall/, petitioner conten s that co(plainant is a corporate officer, an elective position un er the corporate b/;la$s an her non;election is an intra;corporate controvers/ co*niDable b/ the S!" invo9in* len*thil/ a nu(ber of this "ourtJs ecisions.%) Petitioner #an9 can no lon*er raise the issue of 4uris iction un er the principle of estoppel. The #an9 participate in the procee in*s fro( start to finish. It file its position paper $ith the +abor &rbiter. Bhen the ecision of the +abor &rbiter $as a verse to it, the #an9 appeale to the N+R". Bhen the N+R" eci e in its favor, the ban9 sai nothin* about 4uris iction. !ven before the "ourt of &ppeals, it never @uestione the procee in*s on the *roun of lac9 of 4uris iction. It $as onl/ $hen the "ourt of &ppeals rule in favor of private respon ent i it raise the issue of 4uris iction. The #an9 activel/ participate in the procee in*s before the +abor &rbiter, the N+R" an the "ourt of &ppeals. Bhile it is true that 4uris iction over the sub4ect (atter of a case (a/ be raise at an/ ti(e of the procee in*s, this rule presupposes that laches or estoppel has not supervene . In this re*ar , 6a7aga vs. Commission on the #ettlement of 'and roblems,%% is (ost enli*htenin*. The "ourt therein state = :This "ourt has ti(e an a*ain fro$ne upon the un esirable practice of a part/ sub(ittin* his case for ecision an then acceptin* the 4u *(ent, onl/ if favorable, an attac9in* it for lac9 of 4uris iction $hen a verse. Here, the principle of estoppel lies. Hence, a part/ (a/ be estoppe or barre fro( raisin* the @uestion of 4uris iction for the first ti(e in a petition before the Supre(e "ourt $hen it faile to o so in the earl/ sta*es of the procee in*s.: <n eterre , the #an9 also conten s that estoppel cannot lie consi erin* that :fro( the be*innin*, petitioner #an9 has consistentl/ asserte in all its plea in*s at all sta*es of the procee in*s that respon ent hel the position of &ssistant Vice Presi ent, an elective position $hich she hel b/ virtue of her havin* been electe as such b/ the #oar of Directors.: &s far as the recor s before this "ourt reveal ho$ever, such an assertion $as (a e onl/ in the appeal to the N+R" an raise a*ain before the "ourt of &ppeals, not for purposes of @uestionin* 4uris iction but to establish that private respon entJs tenure $as sub4ect to the iscretion of the #oar of Directors an that her non;reelection $as a (ere e5piration of her ter(. The #an9 insists that private

respon ent $as electe &ssistant Vice Presi ent so(eti(e in %00) to serve as such for onl/ one /ear. This ar*u(ent $ill not o either an (ust be re4ecte . It appears that private respon ent $as appointe &ccountin* "ler9 b/ the #an9 on 6ul/ %2, %08,. Fro( that position she rose to beco(e supervisor. Then in %0A', she $as appointe &ssistant Vice;Presi ent $hich she occupie until her ille*al is(issal on 6ul/ %0, %00%. The ban9Js contention that she (erel/ hol s an elective position an that in effect she is not a re*ular e(plo/ee is belie b/ the nature of her $or9 an her len*th of service $ith the #an9. &s earlier state , she rose fro( the ran9s an has been e(plo/e $ith the #an9 since %08, until the ter(ination of her e(plo/(ent in %00%. &s &ssistant Vice Presi ent of the forei*n epart(ent of the #an9, she is tas9e , a(on* others, to collect chec9s ra$n a*ainst overseas ban9s pa/able in forei*n currenc/ an to ensure the collection of forei*n bills or chec9s purchase , inclu in* the si*nin* of trans(ittal letters coverin* the sa(e. It has been state that :the pri(ar/ stan ar of eter(inin* re*ular e(plo/(ent is the reasonable connection bet$een the particular activit/ perfor(e b/ the e(plo/ee in relation to the usual tra e or business of the e(plo/er.%' & itionall/, :an e(plo/ee is re*ular because of the nature of $or9 an the len*th of service, not because of the (o e or even the reason for hirin* the(.:%, &s &ssistant Vice;Presi ent of the Forei*n Depart(ent of the #an9 she perfor(s tas9s inte*ral to the operations of the ban9 an her len*th of service $ith the ban9 totalin* 'A /ears spea9s volu(es of her status as a re*ular e(plo/ee of the ban9. In fine, as a re*ular e(plo/ee, she is entitle to securit/ of tenureF that is, her services (a/ be ter(inate onl/ for a 4ust or authoriDe cause.%2 This bein* in truth a case of ille*al is(issal, it is no $on er then that the #an9 en eavore to the ver/ en to establish loss of trust an confi ence an serious (iscon uct on the part of private respon ent but, as $ill be iscusse later, to no avail. This brin*s us to the secon issue $herein the #an9 insists that it has presente substantial evi ence to prove the breach of trust on the part of private respon ent $arrantin* her is(issal. On this point, the "ourt of &ppeals isa*ree an set asi e the fin in*s of the N+R" that Re/es eliberatel/ $ithhel the release of the t$o ollar chec9sF that she is *uilt/ of conflict of interest that she $aive her ri*ht to ue process for not atten in* the hearin*F an that she $as is(isse base on loss of trust an confi ence. Be @uote pertinent portions of the ecision, to $it= :FIRST= Respon ent #an9 heavil/ relie on the testi(on/ an affi avit of Re(ittance "ler9 6ovenJ in tr/in* to establish loss of confi ence. Ho$ever, 6ovenJs alle*ation that petitioner instructe her to hol the sub4ect t$o ollar chec9s a(ountin* to R''2,87).)) falls short of the re@uisite proof to $arrant petitionerJs is(issal. !5cept for 6ovenJs bare assertion to $ithhol the ollar chec9s per petitionerJs instruction, respon ent #an9 faile to a uce convincin* evi ence to prove ba faith an (alice. It bears e(phasiDin* that respon ent #an9Js $itnesses (erel/ corroborate 6ovenJs testi(on/. <pon this point, the rule that proof be/on reasonable oubt is not re@uire to ter(inate an e(plo/ee on the char*e of loss of confi ence an that it is sufficient that there is so(e basis for such loss of confi ence, is not absolute. The ri*ht of an e(plo/er to is(iss e(plo/ees on the *roun that it has lost its trust an confi ence in hi( (ust not be e5ercise arbitraril/ an $ithout 4ust cause. For loss of trust an confi ence to be vali *roun for an e(plo/eeJs is(issal, it (ust be substantial an not arbitrar/, an (ust be foun e on clearl/ establishe facts sufficient to $arrant the e(plo/eeJs separation fro( $or9 -+abor vs. N+R", '2A S"R& %A,.. S!"OND. Respon ent #an9Js char*e of eliberate $ithhol in* of the t$o ollar chec9s fin s no support in the testi(on/ of &tt/. 6ocson, "hair(an of the Investi*atin*

"o((ittee. On cross e5a(ination, &tt/. 6ocson testifie that the ocu(ents the(selves o not sho$ an/ irect $ithhol in* -pp. %A8;%A1, Rollo.. There bein* conflict in the state(ent of $itnesses, the court (ust a opt the testi(on/ $hich it believes to be true -<.S. vs. +osa a, %A Phil. 0).. THIRD. Settle is the rule that $hen the conclusions of the +abor &rbiter are sufficientl/ substantiate b/ the evi ence on recor , the sa(e shoul be respecte b/ appellate tribunals since he is in a better position to assess an evaluate the cre ibilit/ of the conten in* parties -&la Mo e ?ar(ents, Inc. vs. N+R", '8A S"R& 201.. In this re*ar , the "ourt @uotes $ith approval the follo$in* is@uisition of +abor &rbiter +insan*an, thus= This Office has repeate l/ *one over the recor s of the case an painsta9in*l/ e5a(ine the testi(onies of respon ent ban9Js $itnesses. One thin* $as clearl/ establishe = that the le*alit/ of co(plainantJs is(issal base on the first *roun state in respon entJs letter of ter(ination -e5h. '7;6, supra. $ill rise or fall on the cre ibilit/ of Miss 6oven $ho un ispute l/ is the star $itness for the ban9. It $ill be observe that the testi(onies of the ban9Js other $itnesses, &naliDa "astillo, Dante "astor an &ntonio Ra*asa pertainin* to the non;release of the ollar chec9s an their correspon in* trans(ittal letters $ere all anchore on $hat $as tol the( b/ Ms. 6oven, that is= she $as instructe b/ co(plainant to hol the release of sub4ect chec9s. In a nutshell, therefore, the issue boils o$n to $ho bet$een co(plainant an Ms. 6oven is (ore cre ible. &fter painsta9in*l/ e5a(inin* the testi(onies of Ms. 6oven an respon entJs other $itnessesJ this Office fin s the evi ence still $antin* in proof of co(plainantJs *uilt. This Office ha closel/ observe the e(eanor of Ms. 6oven $hile testif/in* on the $itness stan an $as not i(presse b/ her assertions. The alle*ation of Ms. 6oven in that her non;release of the ollar chec9s $as upon the instruction of co(plainant Re/es is e5tre(el/ oubtful. In the first place, the sai instruction constitutes a *ross violation of the ban9Js stan ar operatin* proce ure. Moreover, Ms. 6oven $as full/ a$are that the instruction, if carrie out, $ill *reatl/ pre4u ice her e(plo/er ban9. It $as incu(bent upon Ms. 6oven not onl/ to isobe/ the instruction but even to report the (atter to (ana*e(ent, if sa(e $as reall/ *iven to her b/ co(plainant. Our oubt on the veracit/ of Ms. 6ovenJs alle*ation even eepens as $e consi er the fact that $hen the non;release of the chec9s $as iscovere b/ Ms. "astillo the for(er contente herself b/ continuousl/ not ta9in* an/ action on the t$o ollar chec9s. Borse, Ms. 6oven even i(plie l/ tol b/ Ms. "astillo -sic. to i*nore the t$o chec9s an 4ust $ithhol their release. In her affi avit Ms. "astillo sai = J2. Bhen I as9e "ecille 6oven $hat I $as suppose to o $ith those chec9s, she sai the sa(e shoul be hel as per instruction of Mrs. Re/es.J -!5h. :%2:, supra.. The evi ence sho$s that it $as onl/ on %8 Ma/ %00) that Ms. 6oven bro9e her silence on the (atter espite the fact that on %7 Nove(ber %0A0, at about A=)) p.(. the co(plainant, acco(panie b/ river "elestino #anito, $ent to her resi ence an confronte her re*ar in* the non;release of the ollar chec9s. It too9 Ms. 6oven ei*hteen -%A. (onths before she e5plaine her si e on the

controvers/. &s to $hat pro(pte her to (a9e her letter of e5planation $as not even (entione . On the other han , the actions ta9en b/ the co(plainant $ere spontaneous. Bhen co(plainant $as infor(e b/ Mr. "astor an Ms. "astillo re*ar in* the non; release of the chec9s so(eti(e in Nove(ber, %0A0 she i((e iatel/ reporte the (atter to Vice Presi ent Santos, Hea of the Forei*n Depart(ent. &n as earlier (entione , co(plainant $ent to the resi ence of Ms. 6oven to confront her. In this re*ar , "elestino #onito, co(plainantJs river, state in his affi avit, thus= J%. So(eti(e on Nove(ber %7, %0A0 at about 1=)) oJcloc9 in the evenin*, Mrs. "larita Tan Re/es an I $ere in the resi ence of one Ms. "ecille 6oven, then a Processin* "ler9 in the Forei*n Depart(ent of Pru ential #an9F '. Ms. "ecille 6oven, her (other, (/self, an Mrs. "larita Tan Re/es $ere seate in the sala $hen the latter as9e the for(er, Ms. "ecille 6oven, ho$ it ca(e about that the t$o ollar chec9s $hich she $as then hol in* $ith the trans(ittal letters, $ere foun in a plastic envelope 9ept a/;to; a/ b/ the for(erF ,. Hesitatin*l/, "ecille 6oven sai = :!h, Mother -Mrs. Tan Re/es ha been inti(atel/ calle Mother in the #an9. a9ala 9o bouncin* chec9s /on (*a /on. 2. Mrs. "larita Tan Re/es, upon hearin* those $or s, $as surprise an she sai = :&no, papaano (on* ala( na bouncin* na hin i (o pa pina a ala= 7. Mrs. "ecille 6oven turne pale an $as not able to ans$er.J There are other factors that constrain this Office to oubt even (ore the le*alit/ of co(plainantJs is(issal base on the first *roun state in the letter of is(issal. The non;release of the ollar chec9s $as reporte to top (ana*e(ent so(eti(e on %7 Nove(ber %0A0 $hen co(plainant, acco(panie b/ Supervisor Dante "astor an &naliDa "astillo, reporte the (atter to Vice Presi ent Santos. &n /et, it $as onl/ on )A March %00%, after a lapse of si5teen -%8. (onths fro( the ti(e the non;release of the chec9s $as reporte to the Vice Presi ent, that co(plainant $as issue a (e(oran u( irectin* her to sub(it an e5planation. &n it too9 the ban9 another four -2. (onths before it is(isse co(plainant. The ela/e action ta9en b/ respon ent a*ainst co(plainant len s cre ence to the assertion of the latter that her is(issal $as a (ere retaliation to the cri(inal co(plaints she file a*ainst the ban9Js top officials. It clearl/ appears fro( the fore*oin* that the co(plainant herein has no 9no$le *e of, (uch less participation in, the non;release of the ollar chec9s un er iscussion. Ms. 6oven is solel/ responsible for the sa(e. Inci entall/, she $as not even repri(an e b/ the ban9. FO<RTH. Respon ent #an9 havin* faile to furnish petitioner necessar/ ocu(ents i(putin* loss of confi ence, petitioner $as not a(pl/ affor e opportunit/ to prepare an intelli*ent ans$er. The "ourt fin s nothin* confi ential in the au itorJs report an the affi avit of Trans(ittal "ler9 6oven. Due process ictates that (ana*e(ent accor the

e(plo/ees ever/ 9in of assistance to enable hi( to prepare a e@uatel/ for his efense, inclu in* le*al representation. The issue of conflict of interest not havin* been covere b/ the investi*ation, the "ourt fin s it irrelevant to the char*e.:%7 Be uphol the fin in*s of the "ourt of &ppeals that the is(issal of private respon ent on the *roun of loss of trust an confi ence $as $ithout basis. The char*e $as pre icate on the testi(on/ of Ms. 6oven an $e efer to the fin in*s of the +abor &rbiter as confir(e an a opte b/ the "ourt of &ppeals on the cre ibilit/ of sai $itness. This "ourt is not a trier of facts an $ill not $ei*h ane$ the evi ence alrea / passe upon b/ the "ourt of &ppeals.%8 On the thir issue, the #an9 @uestions the a$ar of full bac9$a*es an other benefits fro( 6ul/ %0, %00% up to the finalit/ of this 4u *(entF separation pa/ e@uivalent to one -%. (onth salar/ for ever/ /ear of service in lieu of reinstate(entF an attorne/Js fees e@uivalent to ten -%)>. percent of the total a$ar . The #an9 ar*ues, in the (ain, that private respon ent is not entitle to full bac9$a*es in vie$ of the fact that she i not bother to appeal that portion of the labor arbiterJs 4u *(ent a$ar in* bac9 $a*es li(ite to three /ears. It (ust be stresse that private respon ent file a special civil action for certiorari to revie$ the ecision of the N+R"%1 an not an or inar/ appeal. &n or inar/ appeal is istin*uishe fro( the re(e / of certiorari un er Rule 87 of the Revise Rules of "ourt in that in or inar/ appeals it is settle that a part/ $ho i not appeal cannot see9 affir(ative relief other than the ones *rante in the ecision of the court belo$.%A On the other han , resort to a 4u icial revie$ of the ecisions of the National +abor Relations "o((ission in a petition for certiorari un er Rule 87 of Rules of "ourt is confine to issues of $ant or e5cess of 4uris iction an *rave abuse of iscretion.%0 In the instant case, the "ourt of &ppeals foun that the N+R" *ravel/ abuse its iscretion in fin in* that the private respon entJs is(issal $as vali an so reverse the sa(e. "orollar/ to the fore*oin*, the appellate court a$ar e bac9$a*es in accor ance $ith current 4urispru ence. In ee , 4urispru ence is clear on the a(ount of bac9$a*es recoverable in cases of ille*al is(issal. !(plo/ees ille*all/ is(isse prior to the effectivit/ of Republic &ct No. 81%7 on March '%, %0A0 are entitle to bac9$a*es up to three -,. /ears $ithout e uction or @ualification, $hile those ille*all/ is(isse after are *rante full bac9$a*es inclusive of allo$ances an other benefits or their (onetar/ e@uivalent fro( the ti(e their actual co(pensation $as $ithhel fro( the( up to the ti(e of their actual reinstate(ent.') "onsi erin* that private respon ent $as ter(inate on 6ul/ %0, %00%, she is entitle to full bac9$a*es fro( the ti(e her actual co(pensation $as $ithhel fro( her -$hich, as a rule, is fro( the ti(e of her ille*al is(issal. up to the finalit/ of this 4u *(ent -instea of reinstate(ent. consi erin* that reinstate(ent is no lon*er feasible as correctl/ pointe out b/ the "ourt of &ppeals on account of the straine relations brou*ht about b/ the liti*ation in this case. Since reinstate(ent is no lon*er viable, she is also entitle to separation pa/ e@uivalent to one -%. (onth salar/ for ever/ /ear of service.'% +astl/, since private respon ent $as co(pelle to file an action for ille*al is(issal $ith the labor arbiter, she is li9e$ise entitle to attorne/Js fees'' at the rate above;(entione . There is no roo( to ar*ue, as the #an9 oes here, that its liabilit/ shoul be (iti*ate on account of its *oo faith an that private respon ent is not entirel/ bla(eless. There is no sho$in* that private respon ent is partl/ at fault or that the #an9 acte in *oo faith in ter(inatin* an e(plo/ee of t$ent/;ei*ht /ears. In an/ event, &rticle '10 of Republic &ct No. 81%7', clearl/ an plainl/ provi es for :full bac9$a*es: to ille*all/ is(isse e(plo/ees../wphi..n0t BH!R!FOR!, the instant petition for revie$ on certiorari is DENIED, an the assaile Decision of the "ourt of &ppeals, ate October %7, %000, is A//IRMED.

SO ORD!R!D. Melo, -itug, anganiban, and #andoval*8utierrez, JJ., concur.

T.IRD DI0ISION
RURAL 2ANA O/ CORON CPALA-AND, INC., EMPIRE COLD STORAGE AND DE0ELOPMENT CORPORATION, CITI=ENS DE0ELOPMENT INCOPRORATED, CARIDAD 2. GARCIA, SANDRA G. ESCAT, LORNA GARCIA, an OLGA G. ESCAT, Petitioners, G.R. No. 164888 Present= I<IS<M#IN?, J., "hairperson, "&RPIO, "&RPIO MOR&+!S, TIN?&, an V!+&S"O, 6R., JJ.

; versus ; Pro(ul*ate = ANNALISA CORTES, Respon ent.

Dece(ber 8, '))8

5 ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ; ;5

DECISION
CARPIO MORALES, J.:

In %0A1, Vir*ilio ?arcia, Mfoun erN of petitioner corporations -the corporations., hire the then still sin*le &nnalisa "ortes -respon ent. as cler9 of the Rural #an9 of "oron -Manila Office..

&fter Vir*ilio corporations.

ie , his son Victor too9 over the (ana*e(ent of the

&nita "ortes -&nita., the $ife of Victor ?arcia, $as also involve in the (ana*e(ent of the corporations. ! uar o "ortes. Respon ent later (arrie &nita3s brother

&nita soon assu(e the position of Vice Presi ent of petitioner "itiDens Develop(ent Incorporate -"DI. an practicall/ controlle the financial operations of al(ost all of the other corporations in the course of $hich she allo$e so(e of her relatives an in;la$s, inclu in* respon ent, to hol several 9e/ sensitive positions thereat.

Respon ent later beca(e the Financial &ssistant, Personnel Officer an "orporate Secretar/ of The Rural #an9 of "oron, Personnel Officer of "DI, an also Personnel Officer an these corporations. Disbursin* Officer of The !(pire "ol Stora*e Develop(ent "orporation -!"SD".. She si(ultaneousl/ receive salaries fro(

On e5a(ination of the financial boo9s of the corporations b/ petitioner San ra ?arcia !scat, a au*hter of Vir*ilio in Spain, she foun out petitioner corporations.63K'L ?arcia $ho $as previousl/ resi in* that respon ent $as involve in several ano(alies, 62K%L

ra$in* petitioners to ter(inate respon ent3s services on Nove(ber ',, %00A in

#/ letter of Nove(ber '7, %00A64K,L a

resse

to in ivi ual petitioners

"ari a #. ?arcia -$i o$ of Vir*ilio ?arcia., San ra ?. !scat, an Ol*a ?. !scat -another au*hter of Vir*ilio ?arcia., respon ent3s counsel conve/e respon ent3s $illin*ness to abi e b/ the ecision to ter(inate her but re(in e the( that she $as entitle to separation pa/ e@uivalent to %% (onths salar/ as $ell as to the other benefits provi e b/ la$ in her favor.

Respon ent3s counsel thus e(an e the pa/(ent of respon ent3s unpai salar/ for the (onths of October an Nove(ber %00A, separation pa/ e@uivalent to %' (onths salar/,65K2L %,th (onth pa/ an other benefits.

62 63 64 65

&s the e(an re(aine unhee e , respon ent file a co(plaint 66K7L for ille*al is(issal an non;pa/(ent of salaries an other benefits, N+R";N"R "ase No. ));)7;)71,A;00. oc9ete as

Petitioners (ove for the is(issal of the co(plaint on the *roun of lac9 of 4uris iction, conten in* that the case $as an intra;corporate controvers/ involvin* the re(oval of a corporate officer, respon ent bein* the "orporate Secretar/ of the Rural #an9 of "oron, Inc., hence, co*niDable b/ the Securities an !5chan*e "o((ission -S!". pursuant to Section 7 of PD 0)';&.67K8L In resolvin* the issue of 4uris iction, the +abor &rbiter note as follo$s=
It is to be note that co(plainant, asi e fro( her bein* "orporate Secretar/ of Rural #an9 of "oron, 'o+&:a*nant 7a" :*E%7*"% a&&o*nt% a" /*nan'*a: A""*"tant F P%!"onn%: O##*'%! o# a:: !%"&on %nt" 8%!%*n , $hose services $KereL ter(inate on ', Nove(ber %00A, hence, the instant co(plaint. Veril/, a /*nan'*a: A""*"tant F P%!"onn%: O##*'%! *" not a Co!&o!at% O##*'%! o# t8% G&%t*t*on%!"HI 'o!&o!at*on, thus, pursuant to &rticle '%1 of the +abor "o e, as a(en e , the instant case falls $ithin the a(bit of ori*inal an e5clusive 4uris iction of this Office.68K1L -!(phasis an un erscorin* supplie ..

!ventuall/, the +abor &rbiter foun (onetar/ a$ar

#ac9$a*es
66 67 68

for respon ent,

co(putin* the

ue her as follo$s=
P87A,))).))

%,th Month Pa/ for %00A, %000 U ')))

8,,))).)) P1'%,))).))

Separation Pa/ <npai Salar/ &ttorne/3s fees P%,%8A,)0).))

,%7,))).)) '7,0)).)) %)8,%0).))

Thus, the +abor &rbiter, b/ Decision of 6ul/ %A, '))%, ispose =

BH!R!FOR!, in vie$ of all the fore*oin*, respon ents are hereb/ or ere to 4ointl/ an severall/ pa/ co(plainant the total a(ount of ON! MI++ION ON! H<NDR!D SIHTC;!I?HT THO<S&ND NIN!TC -P%,%8A,)0).)). P!SOS as iscusse above.69KAL

On &u*ust %,, '))%, the tenth or last a/ of the perio of appeal, 70K0L petitioners file a &otice of $ppeal and Motion for (eduction of 6ond71K%)L to $hich the/ attache a Memorandum on $ppeal.72K%%L In their Motion for (eduction of 6ond, petitioners alle*e that the corporations $ere un er financial istress an the Rural #an9 of "oron $as un er receivership. The/ thus pra/e that the a(ount of bon be substantiall/ re uce , preferabl/ to one half thereof or even lo$er.73K%'L

69 70 71 72 73

#/ Resolution of October %8, '))%74K%,L, the National +abor Relations "o((ission -N+R"., $hile notin* that petitioners ti(el/ file the appeal, hel that the sa(e $as not acco(panie b/ an appeal bon , a (an ator/ re@uire(ent un er &rticle '',75K%2L of the +abor "o e an Section 8, Rule VI of the N+R" Ne$ Rules of Proce ure. It also note that the Motion for (eduction of 6ond $as Mpre(ise on self;servin* alle*ations.N It accor in*l/ is(isse the appeal.

Petitioners3 Motion for Reconsi eration76K%7L $as enie b/ the N+R" b/ Nove(ber '8, '))% Resolution,77K%8L hence, the/ file "ertiorari78K%1L before the "ourt of &ppeals. a Petition for

#/ Decision ate Ma/ '8, '))279K%AL, the appellate court is(isse the petition for lac9 of (erit. Petitioners3 (otion for reconsi eration $as also enie b/ Resolution of &u*ust %,, '))2.80K%0L

74 75 76 77 78 79 80

Hence, this petition,81K')L petitioners faultin* the appellate court for=

I . . . F&I+K<R!L TO R<+! TH&T TH! N+R"3S R<+! OF PRO"!D<R! BHI"H PROVID!S FOR TH! POSTIN? OF & #OND &S & "ONDITION PR!"!D!NT FOR P!RF!"TIN? &N &PP!&+ &S & "ONDITION PR!"!D!NT FOR P!RF!"TIN? &N &PP!&+ IS "ONTR&RC TO +&B &ND !ST&#+ISH!D 6<RISPR<D!N"!. II . . . DISMISSKIN?L P!TITION!RSK3L P!TITION FOR K"!RTIOR&RIL #&S!D ON T!"HNI"&+ITC &ND F&I+K<R!L TO D!"ID! TH! S&M! #&S!D ON ITS M!RIT.

III . . . DISMISSIN? P!TITION!RS3 P!TITION FOR "!RTIOR&RI FROM TH! D!"ISION OF TH! N+R" FOR NON;P!RF!"TION TH!R!OF. IV . . . DISMISSIN? P!TITION!RS3 P!TITION FOR K"!RTIOR&RIL FROM TH! D!"ISION OF TH! N+R" BITHO<T R!SO+VIN? TH! "&S! #&S!D ON ITS M!RITS. V . . . F&I+K<R!L TO D!"+&R! TH&T INDIVID<&+ P!TITION!RS &R! NOT SO+ID&RC +I&#+! TO P&C TH! R!SPOND!NT FOR H!R MON!T&RC "+&IM IN VI!B OF TH! &#S!N"! OF &NC !VID!N"! SHOBIN? TH&T TH!C B!R! MOTIV&T!D #C I++;BI++ OR M&+I"! IN S!V!RIN? H!R !MP+OCM!NT. VI

81

. . . F&I+K<R!L TO R!SO+V! TH! ISS<! OF 6<RISDI"TION.82K'%L

Bhile, in ee , respon ent $as the "orporate Secretar/ of the Rural #an9 of "oron, she $as also its Financial &ssistant an the Personnel Officer of the t$o other petitioner corporations.83K''L Mainland Construction Co., %nc. v. Movilla84K',L instructs that a corporation can en*a*e its corporate officers to perfor( services un er a circu(stance $hich $oul (a9e the( e(plo/ees.85K'2L The +abor &rbiter has thus 4uris iction over respon ent3s co(plaint. On the first three assi*ne errors $hich bear on $hether petitioners3 appeal before the N+R" $as perfecte = &s before the "ourt of &ppeals, petitioners cite Cosico, Jr. v. &'(C86[25] an 9aberrah v. &'(C87[26] in support of their contention that their appeal before the N+R" $as perfecte . &s correctl/ rule b/ the "ourt of &ppeals, ho$ever, the cite cases are not in point.
82 83 84 85 86 87

V The appellant in 9aberrah file a (otion to fi5 appeal bon instea of postin* an appeal bon F an the Supre(e "ourt rela5e the re@uire(ent consi erin* that the labor arbiter3s ecision i not contain a co(putation of the (onetar/ a$ar . In Cosico, the appeal bon poste $as of insufficient a(ount but the Supre(e "ourt rule that provisions of the +abor "o e on re@uirin* a bon on appeal involvin* (onetar/ a$ar s (ust be *iven liberal interpretation in line $ith the esire ob4ective of resolvin* controversies on their (erits. Herein , no a&&%a: 9on , 78%t8%! "$##*'*%nt o! not, 7a" %4%! #*:% 9y t8% &%t*t*on%!". 88K'1L -Italics in the ori*inalF e(phasis an un erscorin* supplie .

Petitioners a re*le(entar/ perio

itionall/ cite #tar $ngel 5andicraft v. &'(C89[28] to support an its perfection. In the parallel case of Computer

their position that there is a istinction bet$een the filin* of an appeal $ithin the %nnovations Center v. &ational 'abor (elations Commission ,90K'0L this "ourt hesitate to reiterate the octrine in #tar $ngel in this $ise=
Petitioners invo9e the afore(entione hol in* in #tar $ngel that there is a istinction bet$een the filin* of an appeal $ithin the re*le(entar/ perio an its perfection, an that the appeal (a/ be perfecte after the sai re*le(entar/ perio . In ee , #tar $ngel hel that the filin* of a (otion for re uction of appeal bon necessaril/ sta/s the re*le(entar/ perio for appeal. Ho$ever, in this case, the (otion for re uction of appeal bon , $hich $as incorporate in the appeal (e(oran u(, $as file onl/ on the tenth or final a/ of the re*le(entar/ perio . <n er such circu(stance, t8% +ot*on #o! !% $'t*on o# a&&%a: 9on 'an no :on;%! 9% %%+% to 8a4% "tay% t8% a&&%a:, an t8% &%t*t*on%! #a'%" t8% !*"E, a" 8a 8a&&%n% *n t8*" 'a"%, o# "$++a!y *"+*""a: o# t8% a&&%a: #o! non1&%!#%'t*on. Moreover, the reference in #tar $ngel to the istinction bet$een the perio to file the appeal an to perfect the appeal has been pointe l/ (a e onl/ once b/ this "ourt in 8ensoli v. &'(C thus, it has not ac@uire the sheen of venerabilit/ reserve for repeate l/;cite cases. The istinction, if an/, is not particularl/ evi ent or (aterial in the +abor "o eF hence, the reluctance of the "ourt to a opt such octrine. Moreover, t8% &!%"%nt &!o4*"*on *n t8% NLRC R$:%" o# P!o'% $!%, that Mthe filin* of a (otion to re uce bon shall not stop the runnin* of the perio to perfect appealN
88 89 90

#:at:y 'ont!a *'t" t8% not*on %?&!%""% *n Star Angel t8at t8%!% *" a *"t*n't*on 9%t7%%n t8% #*:*n; an a&&%a: an &%!#%'t*n; an a&&%a:. <lti(atel/, the isposition of #tar $ngel $as pre(ise on the rulin* that a (otion for re uction of the appeal bon necessaril/ sta/s the perio for perfectin* the appeal, an that the e(plo/er cannot be e5pecte to perfect the appeal b/ postin* the proper bon until such ti(e the sai (otion for re uction is resolve . T8% $n $:y "t!%t'8% 1o$t *"t*n't*on 9%t7%%n t8% &%!*o to #*:% an a&&%a: an to &%!#%'t an a&&%a: 7a" not +at%!*a: to t8% !%"o:$t*on o# Star Angel, an t8*" 'o$: 9% &!o&%!:y 'on"* %!% a" obiter dictum.91[30] -Italics in the ori*inalF e(phasis an un erscorin* supplie .

The appellate court i not thus err in is(issin* the petition before it. &n contrar/ to petitioners3 assertion, the appellate court is(isse its petition not Mon a (ere technicalit/.N For the non;postin* of an appeal bon $ithin the re*le(entar/ perio ivests the N+R" of its 4uris iction to entertain the appeal. Thus, in the sa(e case of Computer %nnovations Center, this "ourt hel =
Petitioners also characteriDe the appeal bon re@uire(ent as a technical rule, an that the is(issal of an appeal on purel/ technical *roun s is fro$ne upon. Ho$ever, A!t*':% 22B, 78*'8 &!%"'!*9%" t8% a&&%a: 9on !%)$*!%+%nt, *" a !$:% o# >$!*" *'t*on an not o# &!o'% $!%. There is a little lee$a/ for con onin* a liberal interpretation thereof, an certainl/ none pre(ise on the *roun that its re@uire(ents are (ere technicalities. It (ust be e(phasiDe that there is no inherent ri*ht to an appeal in a labor case, as it arises solel/ fro( *rant of statute, na(el/ the +abor "o e. Be have in ee hel that the !%)$*!%+%nt #o! &o"t*n; t8% "$!%ty 9on is not (erel/ proce ural but >$!*" *'t*ona: an cannot be trifle $ith. Non;co(pliance $ith such le*al re@uire(ents is fatal an has the effect of ren erin* the 4u *(ent final an e5ecutor/. The petitioners cannot be allo$e to see9 refu*e in a liberal application of rules for their act of ne*li*ence.92K,%L -!(phasis an un erscorin* supplie .

91 92

It bears e(phasis that all that is re@uire to perfect the appeal is the postin* of a bon to ensure that the a$ar is eventuall/ pai shoul the appeal be is(isse . Petitioners shoul thus have poste a bon , even if it $ere onl/ partial, but the/ i not. No rela5ation of the Rule (a/ thus be consi ere .93K,'L
In the case at bar, petitioner i not post a #$:: or &a!t*a: appeal bon $ithin the prescribe perio , thus, no appeal $as perfecte fro( the ecision of the +abor &rbiter. For this reason, the ecision sou*ht to be appeale to the N+R" ha beco(e final an e5ecutor/ an therefore i((utable. "learl/ then, the N+R" has no authorit/ to entertain the appeal, (uch less to reverse the ecision of the +abor &rbiter. &n/ a(en (ent or alteration (a e $hich substantiall/ affects the final an e5ecutor/ 4u *(ent is null an voi for lac9 of 4uris iction, inclu in* the entire procee in* hel for that purpose.94K,,L -!(phasis an un erscorin* supplie .

&s the ecision of the +abor &rbiter ha beco(e final an e5ecutor/, a iscussion of the fourth an fifth assi*ne errors is no lon*er necessar/.

-.ERE/ORE, the petition is DENIED. SECOND DIVISION

LESLIE OKOL, Petitioner,

G.R. No. 160146

Present:

93 94

- versus

SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., and RONALD JOSE H MO!, Respondents.

CARPI , J., C!"irperson, CARPI # RA$%&,' $% (AR) -)% CA&*R ,'' )%$ CA&*I$$ , "nd A+A), JJ.

Pro,u-."ted: )e/e,0er 11, 2009

1- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1

DECISION

CAR IO, J."

T#$ Ca%$ #efore the "ourt is a petition for revie$ on certiorari 07K%L assailin* the Decision08K'L ate %A October '))' an Resolution ate '' Septe(ber ')), of the "ourt of &ppeals in "&;?.R. SP No. 80A0,, $hich set asi e the Resolutions
' ' 95 96

ate

'0 Ma/ '))% an

'% Dece(ber '))% of the National +abor Relations T8% /a't"

"o((ission -N+R"..

Respondent &-i,,ers 2or-d Intern"tion"- oper"tin. under t!e n",e +e!"vior #odi3i/"tions, In/. 4&-i,,ers 2or-d5 e,p-o6ed petitioner $es-ie 7o- 4 7o-5 "s " ,"n".e,ent tr"inee on 15 8une 1992. &!e rose up t!e r"n7s to 0e/o,e 9e"d 33i/e #"n".er "nd t!en )ire/tor "nd :i/e President 3ro, 1996 unti- !er dis,iss"- on 22 &epte,0er 1999. n 28 8u-6 1999, prior to 7o-;s dis,iss"-, &-i,,ers 2or-d preventive-6 suspended 7o-. *!e suspension "rose 3ro, t!e sei<ure 06 t!e +ure"u o3 Custo,s o3 seven Pre/or e--ipti/"- ,"/!ines "nd seven Pre/or tre"d,i--s 0e-on.in. to or /onsi.ned to &-i,,ers 2or-d. *!e s!ip,ent o3 t!e e=uip,ent >"s p-"/ed under t!e n",es o3 7o- "nd t>o /usto,s 0ro7ers 3or " v"-ue -ess t!"n ?&@500. Aor 0ein. underv"-ued, t!e e=uip,ent >ere sei<ed. n 2 &epte,0er 1999, 7o- re/eived " ,e,or"ndu, t!"t !er suspension !"d 0een e1tended 3ro, 2 &epte,0er unti- 1 /to0er 1999 pendin. t!e out/o,e o3 t!e investi."tion on t!e Pre/or e=uip,ent i,port"tion. n 17 &epte,0er 1999, 7o- re/eived "not!er ,e,or"ndu, 3ro, &-i,,ers 2or-d re=uirin. !er to e1p-"in >!6 no dis/ip-in"r6 "/tion s!ou-d 0e t"7en "."inst !er in /onne/tion >it! t!e e=uip,ent sei<ed 06 t!e +ure"u o3 Custo,s. n 19 &epte,0er 1999, 7o- 3i-ed !er >ritten e1p-"n"tion. 9o>ever, &-i,,ers 2or-d 3ound 7o-;s e1p-"n"tion to 0e uns"tis3"/tor6. *!rou.! " -etter d"ted 22 &epte,0er 1999 si.ned 06 its president Ron"-d 8osep! #o6 4#o65, &-i,,ers 2or-d ter,in"ted 7o-;s e,p-o6,ent.

7o- 3i-ed " /o,p-"int97B3C >it! t!e Ar0itr"tion 0r"n/! o3 t!e ($RC "."inst &-i,,ers 2or-d, +e!"vior #odi3i/"tions, In/. "nd #o6 4/o--e/tive-6 /"--ed respondents5 3or i--e."- suspension, i--e."- dis,iss"-, unp"id /o,,issions, d",".es "nd "ttorne6;s 3ees, >it! pr"6er 3or reinst"te,ent "nd p"6,ent o3 0"/7>".es. n 22 Ae0ru"r6 2000, respondents 3i-ed " #otion to )is,iss 98B4C t!e /"se >it! " reserv"tion o3 t!eir ri.!t to 3i-e " Position P"per "t t!e proper ti,e. Respondents "sserted t!"t t!e ($RC !"d no Durisdi/tion over t!e su0De/t ,"tter o3 t!e /o,p-"int. In "n rder,99B5C d"ted 20 #"r/! 2000, t!e -"0or "r0iter .r"nted t!e ,otion to dis,iss. *!e -"0or "r0iter ru-ed t!"t 7o- >"s t!e vi/e-president o3 &-i,,ers 2or-d "t t!e ti,e o3 !er dis,iss"-. &in/e it invo-ved " /orpor"te o33i/er, t!e dispute >"s "n intr"-/orpor"te /ontrovers6 3"--in. outside t!e Durisdi/tion o3 t!e Ar0itr"tion 0r"n/!. 7o- 3i-ed "n "ppe"- >it! t!e ($RC. In " Reso-ution 100B6C d"ted 29 #"6 2001, t!e ($RC reversed "nd set "side t!e -"0or "r0iter;s order. *!e dispositive portion o3 t!e reso-ution st"tes:
29%R%A R%, t!e rder "ppe"-ed 3ro, is &%* A&I)% "nd R%:%R&%). A ne> one is !ere06 %(*%R%) orderin. respondent +e!"vior #odi3i/"tion, In/.E&-i,,ers 2or-d Intern"tion"- to reinst"te /o,p-"in"nt $es-ie A. 7o- to !er 3or,er position >it! 3u-- 0"/7 >".es >!i/! to d"te stood in t!e ",ount o3 P10,000,000.00 /o,puted 3ro, 8u-6 28, 1999 to (ove,0er 28, 2000 unti- 3u--6 reinst"tedF "nd t!e 3urt!er su, o3 P1,250,000.00 "s inde,nit6 p"6 p-us "ttorne6;s 3ee e=uiv"-ent to ten 410G5 o3 t!e tot"- ,onet"r6 ">"rd. 9o>ever, s!ou-d reinst"te,ent 0e not 3e"si0-e sep"r"tion p"6 e=uiv"-ent to one ,ont! p"6 97 98 99 100

per 6e"r o3 servi/e is ">"rded, " 3r"/tion o3 "t -e"st si1 ,ont!s /onsidered one >!o-e 6e"r.

A-- ot!er /-"i,s "re dis,issed 3or -"/7 o3 3"/tu"- or -e."- 0"sis. & R)%R%).101B7C

Respondents 3i-ed " #otion 3or Re/onsider"tion >it! t!e ($RC. Respondents /ontended t!"t t!e re-ie3 pr"6ed 3or >"s /on3ined on-6 to t!e =uestion o3 Durisdi/tion. 9o>ever, t!e ($RC not on-6 de/ided t!e /"se on t!e ,erits 0ut did so in t!e "0sen/e o3 position p"pers 3ro, 0ot! p"rties. In " Reso-ution102B8C d"ted 21 )e/e,0er 2001, t!e ($RC denied t!e ,otion 3or -"/7 o3 ,erit. Respondents t!en 3i-ed "n "ppe"- >it! t!e Court o3 Appe"-s, do/7eted "s CA-H.R. &P (o. 69893.

T8% R$:*n; o# t8% Co$!t o# A&&%a:"

In a Decision%),K0L ate %A October '))', the appellate court set asi e the N+R"3s Resolution ate '0 Ma/ '))% an affir(e the labor arbiter3s Or er ate ') March '))). The "ourt of &ppeals rule that the case, bein* an intra; corporate ispute, falls $ithin the 4uris iction of the re*ular courts pursuant to

101 102 103

Republic &ct No. A100.%)2K%)L The appellate court a $ithout 4uris iction in *ivin* O9ol file

e that the N+R" ha acte eprive in a

ue course to the co(plaint an enie

respon ents of their ri*ht to ue process in eci in* the case on the (erits. a Motion for Reconsi eration $hich $as Resolution%)7K%%L ate '' Septe(ber ')),.

Hence, the instant petition. T8% I""$% *!e issue is >!et!er or not t!e ($RC !"s Durisdi/tion over t!e i--e."dis,iss"- /"se 3i-ed 06 petitioner.

T8% Co$!tH" R$:*n; The petition lac9s (erit. Petitioner insists that the "ourt of &ppeals erre in rulin* that she $as a corporate officer an that the case is an intra;corporate ispute fallin* $ithin the 4uris iction of the re*ular courts. Petitioner asserts that even as vice;presi ent, the $or9 that she perfor(e confor(s to that of an e(plo/ee rather than a corporate officer. Mere title or esi*nation in a corporation $ill not, b/ itself, eter(ine the e5istence of an e(plo/er;e(plo/ee relationship. It is the Mfour;fol N test, na(el/ -%. the po$er to hire, -'. the pa/(ent of $a*es, -,. the po$er to is(iss, an -2. the po$er to control, $hich (ust be applie .

104 105

Petitioner enu(erate the instances that she $as un er the po$er an control of Mo/, Sli((ers Borl 3s presi ent= -%. petitioner receive salar/ evi ence b/ pa/ slips, -'. Mo/ e ucte Me icare an SSS benefits fro( petitioner3s salar/, an -,. petitioner $as is(isse fro( e(plo/(ent not throu*h a boar resolution but b/ virtue of a letter fro( Mo/. Thus, havin* sho$n that an e(plo/er;e(plo/ee relationship e5ists, the 4uris iction to hear an eci e the case is veste $ith the labor arbiter an the N+R". Respon ents, on the other han , (aintain that petitioner $as a corporate officer at the ti(e of her is(issal fro( Sli((ers Borl as supporte b/ the ?eneral Infor(ation Sheet an Director3s &ffi avit attestin* that petitioner $as an officer. &lso, the factors cite b/ petitioner that she $as a (ere e(plo/ee o not prove that she $as not an officer of Sli((ers Borl . !ven the alle*e absence of an/ resolution of the #oar of Directors approvin* petitioner3s ter(ination oes not constitute proof that petitioner $as not an officer. Respon ents assert that petitioner $as not onl/ an officer but also a stoc9hol er an irectorF $hich facts provi e further basis that petitioner3s separation fro( Sli((ers Borl oes not co(e un er the N+R"3s 4uris iction. The issue revolves (ainl/ on $hether petitioner $as an e(plo/ee or a corporate officer of Sli((ers Borl . Section '7 of the "orporation "o e enu(erates corporate officers as the presi ent, secretar/, treasurer an such other officers as (a/ be provi e for in the b/;la$s. In 9abang v. &'(C,%)8K%'L $e hel that an MofficeN is create b/ the charter of the corporation an the officer is electe b/ the irectors or stoc9hol ers. On the other han , an Me(plo/eeN usuall/ occupies no office an *enerall/ is e(plo/e not b/ action of the irectors or stoc9hol ers but b/ the (ana*in* officer of the corporation $ho also eter(ines the co(pensation to be pai to such e(plo/ee.

In the present case, the respon ents, in their (otion to is(iss file before the labor arbiter, @uestione the 4uris iction of the N+R" in ta9in* co*niDance of petitioner3s co(plaint. In the (otion, respon ents attache the ?eneral
106

Infor(ation Sheet%)1K%,L -?IS. ate %2 &pril %00A, Minutes%)AK%2L of the (eetin* of the #oar of Directors ate %2 &pril %001 an Secretar/3s "ertificate,%)0K%7L an the &(en e #/;+a$s%%)K%8L ate % &u*ust %002 of Sli((ers Borl as sub(itte to the S!" to sho$ that petitioner $as a corporate officer $hose ri*hts o not fall $ithin the N+R"3s 4uris iction. The ?IS an (inutes of the (eetin* of the boar of irectors in icate that petitioner $as a (e(ber of the boar of irectors, hol in* one subscribe share of the capital stoc9, an an electe corporate officer. *!e re-ev"nt portions o3 t!e A,ended +6-$">s o3 &-i,,ers 2or-d >!i/! enu,er"te t!e po>er o3 t!e 0o"rd o3 dire/tors "s >e-- "s t!e o33i/ers o3 t!e /orpor"tion st"te:
Arti/-e II *!e +o"rd o3 )ire/tors 1. Iu"-i3i/"tions "nd %-e/tion J *!e .ener"- ,"n".e,ent o3 t!e /orpor"tion s!"-0e vested in " 0o"rd o3 3ive dire/tors >!o s!"-- 0e sto/7!o-ders "nd >!o s!"-- 0e e-e/ted "nnu"--6 06 t!e sto/7!o-ders "nd >!o s!"-- serve unti- t!e e-e/tion "nd =u"-i3i/"tion o3 t!eir su//essors.

111

Arti/-e III 33i/ers

111

107 108 109 110

4. :i/e-President J $i7e t!e C!"ir,"n o3 t!e +o"rd "nd t!e President, t!e :i/ePresident s!"-- 0e e-e/ted 06 t!e +o"rd o3 )ire/tors 3ro, BitsC o>n ,e,0ers. *!e :i/e-President s!"-- 0e vested >it! "-- t!e po>ers "nd "ut!orit6 "nd is re=uired to per3or, "-- t!e duties o3 t!e President durin. t!e "0sen/e o3 t!e -"tter 3or "n6 /"use. *!e :i/e-President >i-- per3or, su/! duties "s t!e +o"rd o3 )ire/tors ,"6 i,pose upon !i, 3ro, ti,e to ti,e. 111

"learl/, fro( the ocu(ents sub(itte b/ respon ents, petitioner $as a irector an officer of Sli((ers Borl . The char*es of ille*al suspension, ille*al is(issal, unpai co((issions, reinstate(ent an bac9 $a*es i(pute b/ petitioner a*ainst respon ents fall s@uarel/ $ithin the a(bit of intra;corporate isputes. In a nu(ber of cases, %%%K%1L $e have hel that a corporate officer3s is(issal is al$a/s a corporate act, or an intra;corporate controvers/ $hich arises bet$een a stoc9hol er an a corporation. The @uestion of re(uneration involvin* a stoc9hol er an officer, not a (ere e(plo/ee, is not a si(ple labor proble( but a (atter that co(es $ithin the area of corporate affairs an (ana*e(ent an is a corporate controvers/ in conte(plation of the "orporation "o e.%%'K%AL Prior to its a(en (ent, Section 7-c. of Presi ential Decree No. 0)';&%%,K%0L -PD 0)';&. provi e that intra;corporate isputes fall $ithin the 4uris iction of the Securities an !5chan*e "o((ission -S!".=
&e/. 5. In "ddition to t!e re.u-"tor6 "nd "dDudi/"tive 3un/tions o3 t!e &e/urities "nd %1/!"n.e Co,,ission over /orpor"tions, p"rtners!ips "nd ot!er 3or,s o3 "sso/i"tions re.istered >it! it "s e1press-6 .r"nted under e1istin. -">s

111 112 113

"nd de/rees, it s!"-- !"ve ori.in"- "nd e1/-usive Durisdi/tion to !e"r "nd de/ide /"ses invo-vin.:

111 /5 Controversies in t!e e-e/tion or "ppoint,ents o3 dire/tors, trustees, o33i/ers or ,"n".ers o3 su/! /orpor"tions, p"rtners!ips or "sso/i"tions.

Subsection 7.', Section 7 of Republic &ct No. A100, $hich too9 effect on A &u*ust '))), transferre to re*ional trial courts the S!"3s 4uris iction over all cases liste in Section 7 of PD 0)';&=
5.2. *!e Co,,ission;s Durisdi/tion over "-- /"ses enu,er"ted under &e/tion 5 o3 Presidenti"- )e/ree (o. 902-A is !ere06 tr"ns3erred to t!e Courts o3 .ener"- Durisdi/tion or t!e "ppropri"te Re.ion"- *ri"- Court.

111

It is " sett-ed ru-e t!"t Durisdi/tion over t!e su0De/t ,"tter is /on3erred 06 -">.114B20C *!e deter,in"tion o3 t!e ri.!ts o3 " dire/tor "nd /orpor"te o33i/er dis,issed 3ro, !is e,p-o6,ent "s >e-- "s t!e /orrespondin. -i"0i-it6 o3 " /orpor"tion, i3 "n6, is "n intr"-/orpor"te dispute su0De/t to t!e Durisdi/tion o3 t!e re.u-"r /ourts. *!us, t!e "ppe--"te /ourt /orre/t-6 ru-ed t!"t it is not t!e ($RC 0ut t!e re.u-"r /ourts >!i/! !"ve Durisdi/tion over t!e present /"se. WHEREFORE, >e DEN! t!e petition. 2e AFFIRM t!e 18 /to0er

2002 )e/ision "nd 22 &epte,0er 2003 Reso-ution o3 t!e Court o3 Appe"-s

114

in CA-H.R. &P (o. 69893. *!is )e/ision is >it!out preDudi/e to petitioner $es-ie 7o-;s t"7in. re/ourse to "nd see7in. re-ie3 t!rou.! t!e "ppropri"te re,ed6 in t!e proper 3oru,.

SO ORDERED.

SECOND DIVISION
GLORIA V. GOME&,
Petitioner, Present= "arpio, J., "hairperson,

G.R. No. 1'4044

- versus -

$eon"rdo-)e C"stro, +rion, )e- C"sti--o, "nd A0"d, JJ.

NOC DEVELO MENT AND MANAGEMENT COR ORATION ( DMC) * (+o,-$,./ 0no1n a% FILOIL DEVELO MENT AND MANAGEMENT COR ORATION 2FDMC3), Respondent.

Pro,u-."ted: (ove,0er 27, 2009

1 ---------------------------------------------------------------------------------------- 1

DECISION
ABAD, J.:

*!is /"se is "0out >!"t distin.uis!es " re.u-"r /o,p"n6 ,"n".er per3or,in. i,port"nt e1e/utive t"s7s 3ro, " /orpor"te o33i/er >!ose e-e/tion "nd 3un/tions "re .overned 06 t!e /o,p"n6;s 06--">s.

T#$ Fa45% and 5#$ Ca%$

Petitioner H-ori" :. Ho,e< used to >or7 "s #"n".er o3 t!e $e.")ep"rt,ent o3 Petron Corpor"tion, t!en " .overn,ent-o>ned /orpor"tion. 2it! Petron;s priv"ti<"tion, s!e "v"i-ed o3 t!e /o,p"n6;s e"r-6 retire,ent pro.r", "nd -e3t t!"t or."ni<"tion on Apri- 30, 1994. n t!e 3o--o>in. d"6, #"6 1, 1994, !o>ever, Ai-oi- Re3iner6 Corpor"tion 4Ai-oi-5, "-so " .overn,ent-o>ned /orpor"tion, "ppointed !er its /orpor"te se/ret"r6 "nd -e."- /ounse-,115B1C >it! t!e s",e ,"n".eri"- r"n7, /o,pens"tion, "nd 0ene3its t!"t s!e used to enDo6 "t Petron.

+ut Ai-oi- >"s -"ter on "-so identi3ied 3or priv"ti<"tion. *o 3"/i-it"te its /onversion, t!e Ai-oi- 0o"rd o3 dire/tors /re"ted " 3ive-,e,0er t"s7 3or/e !e"ded 06 petitioner Ho,e< >!o !"d 0een desi.n"ted "d,inistr"tor. 116B2C 2!i-e do/u,entin. Ai-oi-;s "ssets, s!e 3ound sever"- properties >!i/! >ere not in t!e 0oo7s o3 t!e /orpor"tion. Conse=uent-6, s!e "dvised t!e 0o"rd to suspend t!e priv"ti<"tion unti- "-- "ssets !"ve 0een "//ounted 3or.

115 116

2it!

t!e

priv"ti<"tion >!i/!

te,por"ri-6 -"ter

s!e-ved,

Ai-oi-

under>ent P( C

reor."ni<"tion "nd >"s ren",ed Corpor"tion 4A)#C5,

Ai-oi- )eve-op,ent #"n".e,ent 0e/",e t!e respondent 2!en t!is !"ppened,

)eve-op,ent #"n".e,ent Corpor"tion 4P)#C5.

Ho,e<;s t"s7 3or/e >"s "0o-is!ed "nd its ,e,0ers, in/-udin. Ho,e<, >ere .iven ter,in"tion noti/es on #"r/! 5, 1996. 117B3C *!e ,"tter >"s t!en reported to t!e )ep"rt,ent o3 $"0or "nd %,p-o6,ent on #"r/! 7, 1996. 118 B4C

#e"nti,e, petitioner Ho,e< /ontinued to serve "s /orpor"te se/ret"r6 o3 respondent P)#C. n &epte,0er 23, 1996 its president reIn !ired !er "s "d,inistr"tor "nd -e."- /ounse- o3 t!e /o,p"n6. 119B5C >it! t!e Ai-oi- t"s7 3or/e.

"//ord"n/e >it! /o,p"n6 .uide-ines, it /redited !er t!e 6e"rs s!e served n #"6 24, 1998, t!e ne1t president o3 P)#C e1tended !er ter, "s "d,inistr"tor 0e6ond !er retire,ent ".e, 120B6C pursu"nt to !is "ut!orit6 under t!e P)#C Approv"-s #"nu"-. 121B7C &!e >"s supposed to serve 0e6ond retire,ent 3ro, Au.ust 11, 1998 to Au.ust 11, 2004. #e"nti,e, " ne> 0o"rd o3 dire/tors 3or P)#C too7 over t!e /o,p"n6.
117 118 119 120 121

n #"r/! 29, 1999 t!e ne> 0o"rd o3 dire/tors o3 respondent P)#C re,oved petitioner Ho,e< "s /orpor"te se/ret"r6. Aurt!er, "t t!e 0o"rd;s ,eetin. on /to0er 21, 1999 t!e 0o"rd =uestioned !er /ontinued In "ns>er, s!e presented t!e 3or,er e,p-o6,ent "s "d,inistr"tor.

president;s #"6 24, 1998 -etter t!"t e1tended !er ter,. )iss"tis3ied >it! t!is, t!e 0o"rd sou.!t t!e "dvi/e o3 its -e."- dep"rt,ent, >!i/! e1pressed t!e vie> t!"t Ho,e<;s ter, e1tension >"s "n ultra vires "/t o3 t!e 3or,er president. It re"soned t!"t, sin/e !er position >"s 3un/tion"--6 t!"t o3 " vi/e-president or .ener"- ,"n".er, !er ter, /ou-d 0e e1tended under t!e /o,p"n6;s 06--">s on-6 >it! t!e "pprov"- o3 t!e 0o"rd. B8C *!e -e."dep"rt,ent !e-d t!"t !er Kde factoL tenure /ou-d 0e -e."--6 put to "n end.122

&ou.!t 3or /o,,ent, t!e

33i/e o3 t!e Hovern,ent Corpor"te

Counse- 4 HCC5 !e-d t!e vie> t!"t >!i-e respondent P)#C;s 0o"rd did not "pprove t!e /re"tion o3 t!e position o3 "d,inistr"tor t!"t Ho,e< !e-d, su/! "/tion s!ou-d 0e dee,ed r"ti3ied sin/e t!e 0o"rd !"d 0een ">"re o3 it sin/e 1994. +ut t!e HCC ventured t!"t t!e e1tension o3 !er ter, 0e6ond retire,ent ".e s!ou-d !"ve 0een ,"de >it! t!e 0o"rd;s "pprov"-. 123B9C

Petitioner Ho,e< 3or !er p"rt /on/eded t!"t "s /orpor"te se/ret"r6, s!e served on-6 "s " /orpor"te o33i/er. +ut, >!en t!e6 n",ed !er "d,inistr"tor, s!e 0e/",e " re.u-"r ,"n".eri"- e,p-o6ee. Conse=uent-6,

122 123

t!e respondent P)#C;s 0o"rd did not !"ve to "pprove eit!er !er "ppoint,ent "s su/! or t!e e1tension o3 !er ter, in 1998.

Pendin. reso-ution o3 t!e issue, t!e respondent P)#C;s 0o"rd >it!!e-d petitioner Ho,e<;s >".es 3ro, (ove,0er 16 to 30, 1999, pro,ptin. !er to 3i-e " /o,p-"int 3or non-p"6,ent o3 >".es, d",".es, "nd "ttorne6;s 3ees >it! t!e $"0or Ar0iter on )e/e,0er 8, 1999. 124B10C &!e -"ter ",ended !er /o,p-"int to in/-ude ot!er ,one6 /-"i,s. 125B11C

In " spe/i"- ,eetin. !e-d on )e/e,0er 29, 1999 t!e respondent P)#C;s 0o"rd reso-ved to ter,in"te petitioner Ho,e<;s servi/es retro"/tive on Au.ust 11, 1998, !er retire,ent d"te. 126B12C ",ended !er /o,p-"int to in/-ude i--e."- dis,iss"-. 128B14C n 8"nu"r6 5, 2000 t!e 0o"rd in3or,ed petitioner o3 its de/ision. 127B13C *!us, s!e 3urt!er

Respondent P)#C ,oved to !"ve petitioner Ho,e<;s /o,p-"int dis,issed on .round o3 -"/7 o3 Durisdi/tion. *!e $"0or Ar0iter .r"nted t!e ,otion129B15C upon " 3indin. t!"t Ho,e< >"s " /orpor"te o33i/er "nd t!"t !er
124 125 126 127 128 129

/"se invo-ved "n intr"-/orpor"te dispute t!"t 3e-- under t!e Durisdi/tion o3 t!e &e/urities "nd %1/!"n.e Co,,ission 4&%C5 pursu"nt to Presidenti")e/ree 4P.).5 902-A.130B16C n ,otion 3or re/onsider"tion, t!e ("tion"$"0or Re-"tions Co,,ission 4($RC5 *!ird )ivision set "side t!e $"0or Ar0iter;s order "nd re,"nded t!e /"se to t!e "r0itr"tion 0r"n/! 3or 3urt!er pro/eedin.s.131B17C *!e *!ird )ivision !e-d t!"t Ho,e< >"s " re.u-"r e,p-o6ee, not " /orpor"te o33i/erF !en/e, !er /o,p-"int /",e under t!e Durisdi/tion o3 t!e $"0or Ar0iter.

?pon e-ev"tion o3 t!e ,"tter to t!e Court o3 Appe"-s 4CA5 in CA-H.R. &P 88819, !o>ever, t!e -"tter rendered " de/ision on #"6 19, 2006, 132B18C reversin. t!e ($RC de/ision. *!e CA !e-d t!"t sin/e Ho,e<;s "ppoint,ent "s "d,inistr"tor re=uired t!e "pprov"- o3 t!e 0o"rd o3 dire/tors, s!e >"s /-e"r-6 " /orpor"te o33i/er. *!us, !er /o,p-"int is >it!in t!e Durisdi/tion o3 t!e Re.ion"- *ri"- Court 4R*C5 under P.). 902-A, "s ",ended 06 Repu0-i/ A/t 4R.A.5 8799. 133B19C 2it! t!e deni"- o3 !er ,otion 3or re/onsider"tion,134B20C Ho,e< 3i-ed t!is petition 3or revie> on certiorari under Ru-e 45.

T#$ I%%6$ ,$%$n5$d

130 131 132 133 134

*!e 7e6 issue in t!is /"se is >!et!er or not petitioner Ho,e< >"s, in !er /"p"/it6 "s "d,inistr"tor o3 respondent P)#C, "n ordin"r6 e,p-o6ee >!ose /o,p-"int 3or i--e."- dis,iss"- "nd non-p"6,ent o3 >".es "nd 0ene3its is >it!in t!e Durisdi/tion o3 t!e ($RC.

T#$ Co6,57% R6.8n9

rdin"r6 /o,p"n6 e,p-o6ees "re .ener"--6 e,p-o6ed not 06 "/tion o3 t!e dire/tors "nd sto/7!o-ders 0ut 06 t!"t o3 t!e ,"n".in. o33i/er o3 t!e /orpor"tion >!o "-so deter,ines t!e /o,pens"tion to 0e p"id su/! e,p-o6ees.135B21C Corpor"te o33i/ers, on t!e ot!er !"nd, "re e-e/ted or "ppointed136B22C 06 t!e dire/tors or sto/7!o-ders, "nd "re t!ose >!o "re .iven t!"t /!"r"/ter eit!er 06 t!e Corpor"tion Code or 06 t!e /orpor"tion;s 06--">s.137B23C

9ere, it >"s t!e P)#C president >!o "ppointed petitioner Ho,e< "d,inistr"tor, not its 0o"rd o3 dire/tors or t!e sto/7!o-ders. *!e president "-one "-so deter,ined !er /o,pens"tion p"/7".e. 06--">s. #oreover, t!e "d,inistr"tor >"s not ",on. t!e /orpor"te o33i/ers ,entioned in t!e P)#C *!e /orpor"te o33i/ers proper >ere t!e /!"ir,"n, president,

135 136 137

e1e/utive vi/e-president, vi/e-president, .ener"- ,"n".er, tre"surer, "nd se/ret"r6.138B24C

Respondent P)#C /-"i,s, !o>ever, t!"t sin/e its 0o"rd !"d under its 06--">s t!e po>er to /re"te "ddition"- /orpor"te o33i/es, it ,"6 0e dee,ed to !"ve si,p-6 r"ti3ied its president;s /re"tion o3 t!e /orpor"te position o3 "d,inistr"tor.139B25C +ut /re"tin. "n "ddition"- /orpor"te o33i/e >"s de3inite-6 not respondent P)#C;s intent 0"sed on its sever"- "/tions /on/ernin. t!e position o3 "d,inistr"tor.

Respondent P)#C never to-d Ho,e< t!"t s!e >"s " /orpor"te o33i/er unti- t!e t"i--end o3 !er servi/e "3ter t!e 0o"rd 3ound -e."Dusti3i/"tion 3or .ettin. rid o3 !er 06 /onsu-tin. its -e."- dep"rt,ent "nd t!e HCC >!i/! supp-ied "n "ns>er t!"t t!e 0o"rd o0vious-6 >"nted. Indeed, t!e P)#C president 3irst !ired !er "s "d,inistr"tor in #"6 1994 "nd t!en "s K"d,inistr"torE-e."- /ounse-L in &epte,0er 1996 >it!out " 0o"rd "pprov"-. *!e president even e1tended !er ter, in #"6 1998 "-so >it!out su/! "pprov"-. *!e /o,p"n6;s ,indset 3ro, t!e 0e.innin., t!ere3ore, >"s t!"t s!e >"s not " /orpor"te o33i/er.

Respondent P)#C o3 /ourse /-"i,s t!"t "s "d,inistr"tor petitioner Ho,e< per3or,ed 3un/tions t!"t >ere si,i-"r to t!ose o3 its vi/e-president or its .ener"- ,"n".er, /orpor"te positions t!"t >ere ,entioned in t!e /o,p"n6;s 06--">s.
138 139

It points out t!"t Ho,e< >"s t!ird in t!e -ine o3

/o,,"nd, ne1t on-6 to t!e /!"ir,"n "nd president, 140B26C "nd !"d 0een e,po>ered to ,"7e ,"Dor de/isions "nd ,"n".e t!e "33"irs o3 t!e /o,p"n6.

+ut t!e re-"tions!ip o3 " person to " /orpor"tion, >!et!er "s o33i/er or ".ent or e,p-o6ee, is not deter,ined 06 t!e n"ture o3 t!e servi/es !e per3or,s 0ut 06 t!e in/idents o3 !is re-"tions!ip >it! t!e /orpor"tion "s t!e6 "/tu"--6 e1ist.141B27C 9ere, respondent P)#C !ired petitioner Ho,e< "s "n ordin"r6 e,p-o6ee >it!out 0o"rd "pprov"- "s >"s proper 3or " /orpor"te o33i/er. 2!en t!e /o,p"n6 .ot !er t!e 3irst ti,e, it ".reed to !"ve !er ret"in t!e ,"n".eri"- r"n7 t!"t s!e !e-d >it! Petron. 9er "ppoint,ent p"per s"id t!"t s!e >ou-d 0e entit-ed to "-- t!e ri.!ts, privi-e.es, "nd 0ene3its t!"t re.u-"r P)#C e,p-o6ees enDo6ed. 142B28C *!is is in s!"rp /ontr"st to >!"t t!e 3or,er P)#C president;s "ppoint,ent p"per st"ted: !e >"s e-e/ted to t!e position "nd !is /o,pens"tion depended on t!e >i-o3 t!e 0o"rd o3 dire/tors.143B29C

2!"t is ,ore, respondent P)#C enro--ed petitioner Ho,e< >it! t!e &o/i"- &e/urit6 &6ste,, t!e #edi/"re, "nd t!e P".-I0i. Aund. issued /erti3i/"tions d"ted
140 141 142 143 144

It even

/to0er 10, 2008, 144B30C st"tin. t!"t Ho,e< >"s

" per,"nent e,p-o6ee "nd t!"t t!e /o,p"n6 !"d re,itted /o,0ined /ontri0utions durin. !er tenure. *!e /o,p"n6 "-so ,"de !er " ,e,0er o3 t!e P)#C;s s"vin.s "nd provident p-"n145B31C "nd its retire,ent p-"n.146B32C It .rouped !er >it! t!e ,"n".ers /overed 06 t!e /o,p"n6;s .roup !ospit"-i<"tion insur"n/e.147B33C $i7e>ise, s!e under>ent re.u-"r e,p-o6ee per3or,"n/e "ppr"is"-s,148B34C pur/!"sed sto/7s t!rou.! t!e e,p-o6ee sto/7 option p-"n,149B35C "nd >"s entit-ed to v"/"tion "nd e,er.en/6 -e"ves.150B36C P)#C even >it!!e-d t"1es on !er s"-"r6 "nd de/-"red !er "s "n e,p-o6ee in t!e o33i/i"- +ure"u o3 Intern"- Revenue 3or,s. 151B37C *!ese "re "-- indicia o3 "n e,p-o6er-e,p-o6ee re-"tions!ip >!i/! respondent P)#C 3"i-ed to re3ute.

%stoppe-, "n e=uit"0-e prin/ip-e rooted on n"tur"- Dusti/e, prevents " person 3ro, reDe/tin. !is previous "/ts "nd represent"tions to t!e preDudi/e o3 ot!ers >!o !"ve re-ied on t!e,. 152B38C *!is prin/ip-e o3 -"> "pp-ies to
145 146 147 148 149 150 151 152

/orpor"tions "s >e--. *!e P)#C in t!is /"se is estopped 3ro, /-"i,in. t!"t despite "-- t!e "ppe"r"n/es o3 re.u-"r e,p-o6,ent t!"t it >e"ved "round petitioner Ho,e<;s position it ,ust !"ve te/!ni/"--6 !ired !er on-6 "s " /orpor"te o33i/er. *!e 0o"rd "nd its o33i/ers ,"de !er st"6 on "nd >or7 >it! t!e /o,p"n6 3or 6e"rs under t!e 0e-ie3 t!"t s!e !e-d " re.u-"r ,"n".eri"- position.

*!"t petitioner Ho,e< served /on/urrent-6 "s /orpor"te se/ret"r6 3or " ti,e is i,,"teri"-. A /orpor"tion is not pro!i0ited 3ro, !irin. " /orpor"te o33i/er to per3or, servi/es under /ir/u,st"n/es >!i/! >i-- ,"7e !i, "n e,p-o6ee.153B39C Indeed, it is possi0-e 3or one to !"ve " du"- ro-e o3 o33i/er "nd e,p-o6ee. In Elleccion Vda. De Lecciones v. National Labor Relations Commission,154B40C t!e Court up!e-d ($RC Durisdi/tion over " /o,p-"int 3i-ed 06 one >!o served 0ot! "s /orpor"te se/ret"r6 "nd "d,inistr"tor, 3indin. t!"t t!e ,one6 /-"i,s >ere ,"de "s "n e,p-o6ee "nd not "s " /orpor"te o33i/er.

WHEREFORE, t!e Court GRANTS t!e petition, REVERSES "nd SETS ASIDE t!e de/ision d"ted #"6 19, 2006 "nd t!e reso-ution d"ted Au.ust 15, 2006 o3 t!e Court o3 Appe"-s in CA-H.R. &P 88819, "nd REINSTATES t!e reso-ution d"ted (ove,0er 22, 2002 o3 t!e ("tion"$"0or Re-"tions Co,,ission;s *!ird )ivision in ($RC (CR 30-12-0085699. $et t!e re/ords o3 t!is /"se 0e REMANDED to t!e "r0itr"tion 0r"n/! o3 ori.in 3or t!e /ondu/t o3 3urt!er pro/eedin.s.
153 154

SO ORDERED. T.IRD DI0ISION

&TTC. VIR?I+IO R. ?&R"I&, Petitioner,

G.R. No. 1';11<

; versus ;

EASTERN TELECOMM:NICATIONS HILI INES, INC. and ATT!. SALVADOR C. HI&ON, Respon ents. 5;;;;;;;;;;;;;;;;;;;;;;5 !&ST!RN T!+!"OMM<NI"&TIONS PHI+IPPIN!S, IN". an &TTC. S&+V&DOR ". HIQON, Petitioners, G.R. No%. 1';16;=64 Present: M(AR%&-&A(*IAH , J., C!"irperson. A?&*RIA-#AR*I(%N, C9IC -(ANARI , (AC9?RA, "nd P%RA$*A, JJ. Pro,u-."ted:

; versus P

&TTC. VIR?I+IO R. ?&R"I&, Respon ent.

Apri- 16, 2009 1- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -1

DECISION

C9IC -(ANARI , J.:

Ass"i-ed 0e3ore ?s via /onso-id"ted petitions 3or certiorari under Ru-e 45 o3 t!e Ru-es o3 Court is t!e )e/ision 155B1C o3 t!e Court o3 Appe"-s in CAH.R. &P (o. 88887 "nd (o. 89066 d"ted 24 #"r/! 2006, >!i/! dis,issed t!e petitions 3or certiorari =uestionin. t!e )e/ision156B2C o3 t!e ("tion"$"0or Re-"tions Co,,ission 4($RC5 d"ted 21 #"r/! 2003, do/7eted "s ($RC (CR CA (o. 028901-01. *!e ($RC reversed t!e de/ision o3 t!e $"0or Ar0iter d"ted 30 &epte,0er 2002, 3indin. t!e preventive suspension "nd dis,iss"- o3 Att6. :ir.i-io R. H"r/i" i--e."-, "nd dis,issed t!e /"se 3or -"/7 o3 Durisdi/tion.
155 156

*!e 3"/ts "re not disputed.

Att6. :ir.i-io R. H"r/i" >"s t!e :i/e President "nd 9e"d o3 +usiness &upport &ervi/es "nd 9u,"n Resour/e )ep"rt,ents o3 t!e %"stern *e-e/o,,uni/"tions P!i-ippines, In/. 4%*PI5.

%*PI is " /orpor"tion du-6 or."ni<ed "nd e1istin. under t!e -">s o3 t!e Repu0-i/ o3 t!e P!i-ippines.

Att6. &"-v"dor C. 9i<on is t!e PresidentEC!ie3 %1e/utive %*PI.

33i/er o3

n 16 8"nu"r6 2000, Att6. H"r/i" >"s p-"/ed under preventive suspension 0"sed on t!ree /o,p-"ints 3or se1u"- !"r"ss,ent 3i-ed 06 Att6. #"ri" $"rrie A-insunurin, 3or,er ,"n".er o3 %*PI;s 33i/e o3 t!e $e."Counse-F #s. %,," :"-eros-Cru<, Assist"nt :i/e President o3 %*PI "nd 3or,er se/ret"r6 o3 Att6. H"r/i"F "nd )r. #er/edit" #. #"/"-int"-, ,edi/"ret"inerE/o,p"n6 p!6si/i"n o3 %*PI. In response to t!e /o,p-"ints, t!e 9u,"n Resour/es )ep"rt,ent /onstituted " Co,,ittee on )e/oru, to investi."te t!e /o,p-"ints. +6 re"son o3 s"id /o,p-"ints, Att6. H"r/i" >"s p-"/ed in preventive suspension. *!e /o,,ittee /ondu/ted "n investi."tion >!ere Att6. H"r/i" >"s .iven /opies o3 "33id"vits o3 t!e >itnesses "."inst !i, "nd " /!"n/e to de3end !i,se-3 "nd to su0,it "33id"vits o3 !is >itnesses. *!e Co,,ittee su0,itted " report >!i/!

re/o,,ended !is dis,iss"-.157B3C In " -etter d"ted 14 Apri- 2000, Att6. 9i<on "dvised Att6. H"r/i" t!"t !is e,p-o6,ent >it! %*PI >"s, per re/o,,end"tion o3 t!e Co,,ittee, ter,in"ted e33e/tive 16 Apri- 2000.

A complaint-affidavit for illegal dismissal >it! pr"6er 3or 3u-0"/7>".es158B4C "nd re/over6 o3 ,or"- "nd e1e,p-"r6 d",".es >"s filed on 11 July !!! 06 Att6. :ir.i-io R. H"r/i" "."inst %*PI "nd Att6. &"-v"dor C. 9i<on.159B5C *!e /"se, do/7eted "s ($RC (CR-30-07-02787-00, >"s "ssi.ned to $"0or Ar0iter P"tri/io P. $i0o-on. *!e p"rties su0,itted t!eir respe/tive position p"pers,160B6C rep-6 position p"pers161B7C "nd reDoinders.162 B8C Per ".ree,ent o3 t!e p"rties, %*PI "nd Att6. 9i<on 3i-ed " sur-reDoinder on 6 #"r/! 2001.163B9C Att6. H"r/i" ,"ni3ested t!"t !e >"s no -on.er su0,ittin. " sur-reDoinder "nd >"s su0,ittin. t!e /"se 3or reso-ution. n 15 Apri- 2001, Att6. H"r/i" 3i-ed " #otion to In!i0it, pr"6in. t!"t $"0or Ar0iter $i0o-on in!i0it !i,se-3 3ro, 3urt!er pro/eedin. >it! t!e /"se, on t!e .round t!"t !e >"s " 3r"ternit6 0rot!er o3 Att6. 9i<on. 164B10C Att6.

157 158 159 160 161 162 163

H"r/i" t!ere"3ter 3i-ed " se/ond #otion to In!i0it 165B11C on 10 #"6 2001. %*PI "nd Att6. 9i<on opposed s"id ,otion, "r.uin. t!"t t!e re"son on >!i/! it >"s .rounded >"s not one o3 t!ose provided 06 -">. 166B12C In "n rder d"ted 13 8une 2001, s"id ,otions >ere denied. 167B13C Att6. H"r/i" "ppe"-ed s"id order 0e3ore t!e ($RC vi" " #e,or"ndu, on Appe"- d"ted 4 8u-6 2001,168B14C to >!i/! %*PI "nd Att6. 9i<on 3i-ed "n Ans>er. 169B15C

*!e ($RC, in its de/ision d"ted 20 )e/e,0er 2001, set "side t!e order o3 $"0or Ar0iter $i0o-on "nd ordered t!e re-r"33-in. o3 t!e /"se. 170B16C %*PI "nd Att6. 9i<on ,oved 3or t!e re/onsider"tion 171B17C o3 t!e de/ision, 0ut t!e s",e >"s denied. 172B18C Conse=uent-6, t!e /"se >"s re-r"33-ed to $"0or Ar0iter R",on :"-entin C. Re6es. 173B19C
164 165 166 167 168 169 170 171 172 173

*!e p"rties >ere dire/ted to su0,it t!eir respe/tive ,e,or"nd". 174 B20C Att6. H"r/i" 3i-ed !is ,e,or"ndu, 175B21C on 9 8u-6 2002 >!i-e %*PI "nd Att6. 9i<on su0,itted t!eir ,e,or"ndu,176B22C on 22 8u-6 2002. "emorandum# raising for t$e first time t$e issue of lac% of &urisdiction . n 16 Au.ust 2002, >it! -e"ve o3 /ourt, %*PI "nd Att6. 9i<on filed a Reply

In !is d$48%8on da5$d ;0 S$>5$-?$, @00@ , $"0or Ar0iter Re6es 3ound t!e preventive suspension "nd su0se=uent dis,iss"- o3 Att6. H"r/i" i--e."-. *!e dispositive portion o3 t!e de/ision re"ds:

29%R%A R%, pre,ises "-- /onsidered, Dud.,ent is !ere06 rendered, 3indin. t!e preventive suspension "nd t!e dis,iss"- i--e."- "nd orderin. t!e respondents to:

1. Reinst"te /o,p-"in"nt to !is 3or,er position >it!out -oss o3 seniorit6 ri.!ts "nd ot!er 0ene3its "ppurten"nt to t!e position t!"t /o,p-"in"nt re/eived prior to t!e i--e."- dis,iss"-F

2. P"6 /o,p-"in"nt !is 0"/7>".es >!i/! 3or purpose o3 "ppe"- is /o,puted to t!e ",ount o3 P4,200,000.00 4P150,000 1 285F

3. P"6 /o,p-"in"nt #or"- d",".es in t!e ",ount o3 P1,000,000.00 "nd %1e,p-"r6 d",".es in t!e ",ount o3 P500,000.00.177B23C 174 175 176 177

n 14 (ove,0er 2002, Att6. H"r/i" 3i-ed "n %1-P"rte #otion 3or t!e Issu"n/e o3 " 2rit o3 %1e/ution.178B24C n 20 (ove,0er 2002, $"0or Ar0iter Re6es issued " 2rit o3 %1e/ution inso3"r "s t!e reinst"te,ent "spe/t o3 t!e de/ision >"s /on/erned.179B25C %*PI "nd Att6. 9i<on 3i-ed " :er6 ?r.ent #otion to $i3tEIu"s! 2rit o3 %1e/ution on 28 (ove,0er 2002. 180B26C Per &!eri33;s Return on t!e 2rit o3 %1e/ution, s"id >rit re,"ined uns"tis3ied 0e/"use %*PI "nd Att6. 9i<on re3used to reinst"te Att6. H"r/i" to !is 3or,er position.181B27C

n 29 (ove,0er 2002, Att6. H"r/i" 3i-ed "n %1-P"rte #otion 3or t!e Issu"n/e o3 "n A-i"s 2rit o3 %1e/ution pr"6in. t!"t s"id >rit 0e issued orderin. t!e s!eri33 to en3or/e t!e de/ision 06 ."rnis!in. t!e ",ount o3 P450,000.00 representin. !is ,ont!-6 s"-"ries 3or t>o ,ont!s "nd 13 t! ,ont! p"6 3ro, "n6 o3 %*PI;s 0"n7 "//ounts. 182B28C Att6. H"r/i" ,"ni3ested t!"t !e >"s no -on.er 3i-in. "n6 responsive p-e"din. to t!e :er6 ?r.ent #otion to $i3tEIu"s! 2rit o3 %1e/ution 0e/"use t!e $"0or Ar0iter -ost Durisdi/tion over t!e /"se >!en "n "ppe"- !"d 0een per3e/ted. 183B29C In "n rder d"ted 10 )e/e,0er 2002, $"0or Ar0iter Re6es denied t!e :er6
178 179 180 181 182

?r.ent #otion to $i3tEIu"s! 2rit o3 %1e/ution, e1p-"inin. t!"t it sti-- !"d Durisdi/tion over t!e reinst"te,ent "spe/t o3 t!e de/ision, not>it!st"ndin. t!e "ppe"- t"7en, "nd t!"t t!e .rounds re-ied upon 3or t!e -i3tin. or =u"s!in. o3 t!e >rit >ere not v"-id .rounds. 184B30C $"0or Ar0iter Re6es su0se=uent-6 issued " 1st A-i"s 2rit o3 %1e/ution d"ted 11 )e/e,0er 2002 orderin. t!e s!eri33 to pro/eed to t!e pre,ises o3 %*PI to reinst"te Att6. H"r/i" "ndEor ."rnis! t!e ",ounts pr"6ed 3or. 185B31C Per &!eri33;s Return d"ted 17 8"nu"r6 2003, t!e 1st A-i"s 2rit o3 %1e/ution >"s s"tis3ied >it! t!e ",ount o3 P450,000.00 0ein. re-e"sed 3or proper disposition to Att6. H"r/i".186B32C

%*PI "nd Att6. 9i<on "ppe"-ed t!e de/ision to t!e ($RC, 3i-in. " (oti/e o3 Appe"- "nd #e,or"ndu, o3 Appe"-, 187B33C >!i/! "ppe"- >"s opposed 06 Att6. H"r/i".188B34C *!e "ppe"- >"s do/7eted "s ($RC (CR CA C"se (o. 028901-01. %*PI "nd Att6. 9i<on 3i-ed " &upp-e,ent"rder5. 189B35C In " #"ni3est"tion ad Appe"- #e,or"ndu, d"ted 23 8"nu"r6 2003 42it! :er6 ?r.ent #otion 3or Issu"n/e o3 *e,por"r6 Restr"inin.
183 184 185 186 187 188 189

Cautelam d"ted 28 8"nu"r6 2003, >it!out >"ivin. t!eir ri.!t to /ontinue to =uestion t!e Durisdi/tion o3 t!e $"0or Ar0iter, t!e6 in3or,ed t!e $"0or Ar0iter t!"t t!e6 !"d 3i-ed " &upp-e,ent"- Appe"- #e,or"ndu, 0e3ore t!e ($RC "nd "s7ed t!"t "-- pro/esses re-"tin. to t!e i,p-e,ent"tion o3 t!e reinst"te,ent order 0e !e-d in "0e6"n/e so "s not to render ,oot t!e re-ie3s pr"6ed 3or in s"id &upp-e,ent"- Appe"- #e,or"ndu,. 190B36C *!e6 -i7e>ise 3i-ed on 31 8"nu"r6 2003 " :er6 ?r.ent #otion to $i3tEIu"s! rder o3 H"rnis!,ent ad Cautelam# pr"6in. t!"t t!e noti/e o3 ."rnis!,ent on %*PI;s 0"n7 "//ount >it! #etro0"n7, )e-" Cost" +r"n/!, or >it! ot!er 0"n7s >it! >!i/! %*PI ,"int"ined "n "//ount "nd >!i/! re/eived s"id noti/e o3 ."rnis!,ent 0e i,,edi"te-6 -i3tedE=u"s!ed. 191B37C 2003, Att6. H"r/i" 3i-ed !is #e,or"ndu,.192B38C n 12 Ae0ru"r6 pposition to s"id &upp-e,ent"- Appe"-

n 3 Ae0ru"r6 2003, Att6. H"r/i" 3i-ed "n %1-P"rte #otion 3or t!e Issu"n/e o3 " 2nd A-i"s 2rit o3 %1e/ution.193B39C In "n rder d"ted 5 n 10 Ae0ru"r6 2003, $"0or Ar0iter Re6es -i3ted t!e noti/e o3 ."rnis!,ent on %*PI;s 0"n7 "//ount >it! #etro0"n7, )e-" Cost" +r"n/!. 194B40C Ae0ru"r6 2003, $"0or Ar0iter Re6es issued " 2nd 2rit o3 %1e/ution.195B41C
190 191 192 193 194

In " #"ni3est"tion ad Cautelam196B42C d"ted 10 Ae0ru"r6 2003, %*PI "nd Att6. 9i<on s"id t!"t t!e6 3i-ed >it! t!e ($RC on 7 Ae0ru"r6 2003 "n ?r.ent Petition 43or Pre-i,in"r6 InDun/tion 2it! Issu"n/e o3 *e,por"r6 Restr"inin. rder5197B43C >!i/! pr"6ed, inter alia, 3or t!e issu"n/e o3 " te,por"r6 restr"inin. order to restr"in t!e e1e/ution pendin. "ppe"- o3 t!e order o3 reinst"te,ent "nd to enDoin t!e $"0or Ar0iter 3ro, issuin. >rits o3 e1e/ution or ot!er pro/esses i,p-e,entin. t!e de/ision d"ted 30 &epte,0er 2002. *!e6 "dded t!"t t!e6 "-so 3i-ed on 7 Ae0ru"r6 2003 " (oti/e to 2it!dr">198B44C t!eir &upp-e,ent"- Appe"- #e,or"ndu, d"ted 23 8"nu"r6 2003.

%*PI "nd Att6. 9i<on, >it!out >"ivin. t!eir ri.!t to /ontinue to =uestion t!e Durisdi/tion o3 t!e $"0or Ar0iter over t!e /"se, 3i-ed on 18 Ae0ru"r6 2003 " #otion to In!i0it, see7in. t!e in!i0ition o3 $"0or Ar0iter Re6es 3or "--e.ed-6 evident p"rti"-it6 in 3"vor o3 t!e /o,p-"in"nt in issuin. >rits o3 e1e/ution in /onne/tion >it! t!e order o3 reinst"te,ent /ont"ined in !is de/ision d"ted 30 &epte,0er 2002, despite t!e penden/6 o3 "n ?r.ent Petition 43or Pre-i,in"r6 InDun/tion 2it! Pr"6er 3or t!e Issu"n/e o3 *e,por"r6 Restr"inin.
195 196 197 198 199

rder5 >it! t!e ($RC, >!i/! sou.!t t!e restr"inin.

o3 t!e e1e/ution pendin. "ppe"- o3 t!e order o3 reinst"te,ent. 199B45C *!e

petition 3or inDun/tion >"s do/7eted "s ($RC (CR IC (o. 0001193-02. Att6. H"r/i" 3i-ed "n opposition, 200B46C to >!i/! %*PI "nd Att6. 9i<on 3i-ed " rep-6.201B47C &"id ,otion to in!i0it >"s su0se=uent-6 .r"nted 06 $"0or *!e /"se >"s re-r"33-ed to $"0or Ar0iter %-i"s 9. Ar0iter Re6es.202B48C &"-in"s.203B49C

In "n

rder d"ted 26 Ae0ru"r6 2003, t!e ($RC, in ($RC (CR IC (o.

0001193-02, issued " te,por"r6 restr"inin. order 4*R 5 enDoinin. $"0or Ar0iter Re6es 3ro, e1e/utin. pendin. "ppe"- t!e order o3 reinst"te,ent /ont"ined in !is de/ision d"ted 30 &epte,0er 2002, "nd 3ro, issuin. si,i-"r >rits o3 e1e/ution pendin. reso-ution o3 t!e petition 3or pre-i,in"r6 inDun/tion. It dire/ted %*PI "nd Att6. 9i<on to post " 0ond in t!e ",ount o3 P30,000.00 to "ns>er 3or "n6 d",".e >!i/! Att6. H"r/i" ,"6 su33er 06 re"son o3 t!e issu"n/e o3 t!e *R .204B50C

n @1 Ma,4# @00;, t!e ($RC rendered its de/ision in ($RC (CR CA C"se (o. 028901-01 ,$A$,%8n9 5#$ d$48%8on o+ La?o, A,?85$, Re6es "nd d8%-8%%8n9 5#$ 4a%$ +o, .a40 o+ B6,8%d8458on . *!e de/ret"- portion o3 t!e de/ision re"ds:
200 201 202 203 204

29%R%A R%, t!e de/ision "ppe"-ed 3ro, is R%:%R&%), "nd t!e inst"nt /"se )I&#I&&%) 3or -"/7 o3 Durisdi/tion.205B51C

*!e Co,,ission ru-ed t!"t t!e dis,iss"- o3 Att6. H"r/i", 0ein. %*PI;s :i/e President, p"rtoo7 o3 t!e n"ture o3 "n intr"-/orpor"te dispute /o.ni<"0-e 06 Re.ion"- *ri"- Courts "nd not 06 $"0or Ar0iters. It "dded t!"t %*PI "nd Att6. 9i<on >ere not 0"rred 06 estoppe- 3ro, /!"--en.in. t!e Durisdi/tion o3 t!e $"0or Ar0iter over t!e inst"nt /"se.

Att6. H"r/i" ,oved 3or t!e re/onsider"tion 206B52C o3 t!e de/ision, >!i/! %*PI "nd Att6. 9i<on opposed.207B53C ,erit.208B54C In " reso-ution d"ted 16 )e/e,0er 2003, t!e ,otion 3or re/onsider"tion >"s denied 3or -"/7 o3

n 26 #"r/! 2003, Att6. H"r/i" 3i-ed " #otion to In!i0it, re=uestin. Asso/i"te Co,,issioner An.e-it" A. H"/ut"n to in!i0it !erse-3 3ro, 3urt!er p"rti/ip"tin. in t!e de-i0er"tion "nd reso-ution o3 t!e /"se 3or ,"ni3est 0i"s

205 206 207 208

"nd p"rti"-it6 in 3"vor o3 %*PI "nd Att6. 9i<on. >it!dr">n.209B55C

*!e ,otion >"s -"ter

n 3 Apri- 2003, t!e ($RC ,"de per,"nent t!e *R

it issued

pursu"nt to its ru-in. in ($RC (CR CA C"se (o. 028901-01, t!"t sin/e t!e $"0or Ar0iter !"d no Durisdi/tion over t!e /"se, t!e de/ision o3 t!e $"0or Ar0iter d"ted 30 &epte,0er 2002 >"s void. 210B56C

n 6 #"r/! 2004, t!e reso-ution d"ted 16 )e/e,0er 2003 0e/",e 3in"- "nd e1e/utor6. Conse=uent-6, on 14 8une 2004, "n entr6 o3 Dud.,ent >"s ,"de re/ordin. s"id reso-ution in t!e +oo7 o3 %ntries o3 8ud.,ents. 211 B57C

n 18 8une 2004, %*PI "nd Att6. 9i<on 3i-ed " #otion to )is/!"r.e "ndEor Re-e"se t!e Appe"- +ond212B58C in t!e ",ount o3 P5,700,000.00 t!"t t!e6 !"d posted. 213B59C

209 210 211 212 213

n 9 8u-6 2004, Att6. H"r/i" 3i-ed " #otion to &et Aside Ain"-it6 o3 8ud.,ent 2it! pposition to #otion to )is/!"r.e Appe"- +ond, 214B60C /-"i,in. t!"t !e did not re/eive t!e reso-ution d"ted 16 )e/e,0er 2003 o3 t!e ($RC, t!e s",e !"vin. 0een sent to !is 3or,er "ddress "t 9 Isidor" &t., )on Antonio 9ei.!ts, )i-i,"n, Iue<on Cit6, "nd not to !is ne> "ddress "t 4 Pe-e &t., Ai-invest 2, +"t"s"n 9i--s, Iue<on Cit6, >!ere !e !"d 0een re/eivin. "-- p-e"din.s, Reso-utions, inst"nt /"se sin/e Apri- 2001. t!eir opposition t!ereto. rders "nd )e/isions pert"inin. to t!e n 19 8u-6 2004, %*PI "nd Att6. 9i<on 3i-ed

n 23 Au.ust 2004, t!e ($RC, "d,ittin. t!"t it

,issent t!e reso-ution d"ted 16 )e/e,0er 2003 den6in. Att6. H"r/i";s ,otion 3or re/onsider"tion, issued "n order granting t$e motion. It re/"--ed "nd set "side t!e %ntr6 o3 8ud.,ent d"ted 14 8une 2004 "nd denied t!e #otion to )is/!"r.e "ndEor Re-e"se t!e Appe"- +ond. 215B61C

In its #otion 3or Re/onsider"tion d"ted 17 &epte,0er 2004, %*PI "nd Att6. 9i<on "r.ued t!"t t!e ($RC /orre/t-6 sent t!e reso-ution o3 16 )e/e,0er 2003 to /ounse-;s "--e.ed-6 o-d "ddress, /onsiderin. t!"t s",e >"s /ounse-;s "ddress o3 re/ord, t!ere 0ein. no 3or,"- noti/e 3i-ed >it! t!e ($RC in3or,in. it o3 " /!"n.e o3 "ddress. *!e6 /ontended t!"t t!e "3ores"id reso-ution !"d 0e/o,e 3in"- "nd e1e/utor6, "nd t!"t Att6. H"r/i" s!ou-d 0e"r t!e /onse=uen/es o3 !is ine=uit"0-e /ondu/t "ndEor .ross

214 215

ne.-i.en/e.216B62C

n 10 8"nu"r6 2005, t!e ($RC denied t!e ,otion 3or

re/onsider"tion.217B63C

n 14 #"r/! 2005, Att6. H"r/i" "ppe"-ed to t!e Court o3 Appe"-s via " Petition 3or Certiorari. It pr"6ed t!"t t!e )e/ision d"ted 21 #"r/! 2003 "nd reso-ution d"ted 16 )e/e,0er 2003 o3 t!e ($RC 0e "nnu--ed "nd set "side, "nd t!"t t!e de/ision o3 t!e $"0or Ar0iter d"ted 30 &epte,0er 2002 0e reinst"ted.218B64C *!e "ppe"- >"s do/7eted "s CA-H.R. &P (o. 88887.

n 28 #"r/! 2005, %*PI "nd Att6. 9i<on -i7e>ise 3i-ed " Petition 3or Certiorari "s7in. t!"t t!e rders d"ted 23 Au.ust 2004 "nd 10 8"nu"r6 2005 o3 t!e ($RC 0e set "sideF t!"t its reso-ution d"ted 16 )e/e,0er 2003 0e de/-"red 3in"- "nd e1e/utor6F "nd t!"t t!e ($RC 0e dire/ted to dis/!"r.e "ndEor re-e"se &upersede"s +ond (o. 8C$ 4155 00823 &ICI +ond (o. 75069 d"ted 18 (ove,0er 2002 posted 06 t!e,. 219B65C "ppe"- >"s do/7eted "s CA-H.R. &P (o. 89066. *!e

?pon ,otion o3 Att6. H"r/i", t!e t>o petitions 3or /ertior"ri >ere /onso-id"ted.220B66C
216 217 218 219 220

n 24 #"r/! 2006, t!e "ss"i-ed de/ision o3 t!e Court o3 Appe"-s >"s rendered, t!e dispositive portion re"din.:

?P ( *9% :I%2 2% *AO% A *9I& CA&%, *9?&, t!e /onso-id"ted petitions "re !ere06 )I&#I&&%) 3or -"/7 o3 ,erit. 2it!out /osts in 0ot! inst"n/es.221B67C

*!e "ppe--"te /ourt, on %*PI "nd Att6. 9i<on;s "r.u,ent t!"t Att6. H"r/i";s petition 3or certiorari >"s 3i-ed out o3 ti,e, ru-ed t!"t t!e ($RC did not /o,,it .r"ve "0use o3 dis/retion in -i0er"--6 "pp-6in. t!e ru-es re."rdin. /!"n.es in t!e "ddress o3 /ounse-. It -i7e>ise ru-ed t!"t Att6. H"r/i", 0ein. t!e :i/e President 3or +usiness &upport &ervi/es "nd 9u,"n Resour/e )ep"rt,ents o3 %*PI, >"s " /orpor"te o33i/er "t t!e ti,e !e >"s re,oved. +ein. " /orpor"te o33i/er, !is re,ov"- >"s " /orpor"te "/t "ndEor "n intr"-/orpor"te /ontrovers6, t!e Durisdi/tion o3 >!i/! rested >it! t!e &e/urities "nd %1/!"n.e Co,,ission 4no> >it! t!e Re.ion"- *ri"Court5, "nd not t!e $"0or Ar0iter "nd t!e ($RC. It "dded t!"t %*PI "nd Att6. 9i<on >ere not estopped 3ro, =uestionin. t!e Durisdi/tion o3 t!e $"0or Ar0iter 0e3ore t!e ($RC on "ppe"-, in"s,u/! "s s"id issue >"s se"son"0-6 r"ised 06 %*PI "nd Att6. 9i<on in t!eir rep-6 ,e,or"ndu, 0e3ore t!e $"0or Ar0iter.

221

n 18 Apri- 2006, Att6. H"r/i" 3i-ed !is #otion 3or Re/onsider"tion. 222 B68C n 20 Apri- 2006, %*PI "nd Att6. 9i<on 3i-ed " #otion 3or P"rti"*!e p"rties 3i-ed t!eir respe/tive /o,,ents n 14 8une 2006, t!e Court o3 Appe"-s denied t!e ,otions Re/onsider"tion.223B69C t!ereon.224B70C 3or re/onsider"tion.225B71C

Att6. H"r/i" is no> 0e3ore us via " Petition 3or Revie>, >!i/! !e 3i-ed on 3 Au.ust 2006.226B72C *!e petition >"s do/7eted "s H.R. (o. 173115. n 8 Au.ust 2006, !e 3i-ed "n A,ended Petition 3or Revie>. 227B73C 9e pr"6s t!"t t!e de/ision o3 t!e ($RC d"ted 21 #"r/! 2003 "nd its reso-ution d"ted 16 )e/e,0er 2003, "nd t!e de/ision o3 t!e Court o3 Appe"-s d"ted 24 #"r/! 2006 "nd its reso-ution d"ted 14 8une 2006, 0e re/onsidered "nd set "side "nd t!"t t!e de/ision o3 t!e $"0or Ar0iter d"ted 30 &epte,0er 2002 0e "33ir,ed "nd reinst"ted.

222 223 224 225 226 227

%*PI "nd Att6. 9i<on "re "-so 0e3ore us 06 >"6 o3 " Petition 3or Certiorari.228B74C *!e petition >!i/! >"s 3i-ed on 6 8u-6 2006 >"s do/7eted "s H.R. (os. 173163-64.

In our reso-ution d"ted 30 Au.ust 2006, H.R. (os. 173163-64 >ere /onso-id"ted >it! H.R. (o. 173115, "nd t!e p"rties >ere re=uired to /o,,ent on t!e petitions >it!in ten d"6s 3ro, noti/e. 3i-ed t!eirs on 29 (ove,0er 2006.231B77C
229

B75C Att6. H"r/i"

3i-ed !is /o,,ent on 13 (ove,0er 2006, 230B76C >!i-e %*PI "nd Att6. 9i<on

n 15 8"nu"r6 2007, >e noted t!e /o,,ents 3i-ed 06 t!e p"rties "nd re=uired t!e, to 3i-e t!eir Rep-ies to s"id /o,,ents. 232B78C %*PI "nd Att6. 9i<on233B79C 3i-ed t!eir Rep-6 on 26 Ae0ru"r6 2007, >it! Att6. H"r/i" 3i-in. !is on 2 #"r/! 2007.234B80C

228 229 230 231 232 233 234

n 26 #"r/! 2007, >e ."ve due /ourse to t!e petitions "nd re=uired t!e p"rties to su0,it t!e respe/tive ,e,or"nd" >it!in 30 d"6s 3ro, noti/e.235B81C Att6. H"r/i" su0,itted !is #e,or"ndu, 236B82C on 12 8une 2007 "nd %*PI "nd Att6. 9i<on 3i-ed t!eirs on 13 8u-6 2007. 237B83C 2it! -e"ve o3 /ourt, %*PI "nd Att6. 9i<on 3i-ed " rep-6 ,e,or"ndu,. 238B84C

Att6. H"r/i" r"ises t!e -one issue:

29%*9%R *9% I?%&*I ( A $%HA$I*M R I$$%HA$I*M A *9% R%# :A$ R *%R#I(A*I ( A %#P$ M#%(* A A( AAIC%R A A C RP RA*I ( I& A( I(*RA-C RP RA*% C (*R :%R&M *9A* AA$$& ?()%R *9% RIHI(A$ %PC$?&I:% 8?RI&)IC*I ( A *9% R%HI (A$ *RIA$ C ?R*&Q239B85C

%*PI "nd Att6. 9i<on "r.ue t!"t t!e Court o3 Appe"-s, in ru-in. t!"t t!e ($RC did not /o,,it .r"ve "0use o3 dis/retion ",ountin. to -"/7 or e1/ess o3 Durisdi/tion in issuin. its order d"ted 23 Au.ust 2004 "nd its reso-ution d"ted 10 8"nu"r6 2005, /o,,itted .r"ve reversi0-e error "nd de/ided =uestions o3 su0st"n/e in " >"6 not in "//ord"n/e >it! -"> "nd "pp-i/"0-e de/isions o3 t!e 9onor"0-e Court, "nd dep"rted 3ro, t!e
235 236 237 238 239

"//epted "nd usu"- /ourse o3 Dudi/i"- pro/eedin.s, ne/essit"tin. t!e 9onor"0-e Court;s e1er/ise o3 its po>er o3 supervision.

I *9% R%& $?*I ( )A*%) 16 )%C%#+%R 2003 I&&?%) +M *9% (A*I (A$ $A+ R R%$A*I (& C ##I&&I ( 4&%C () )I:I&I (5 9A& A$R%A)M +%C #% AI(A$ A() %P%C?* RM A() 9A& :%&*%) ?P ( P%*I*I (%R& %*PI, %* A$. A RIH9* R%C H(IN%) A() PR *%C*%) ?()%R *9% $A2 C (&I)%RI(H *9A*:

A.

R%&P ()%(*;& C PM A &AI) R%& $?*I ( 2A& PR P%R$M &%(* * 9I& A))R%&& A R%C R), A* *9% $A*%&* ( 15 8A(?ARM 2004, I( ACC R)A(C% 2I*9 2%$$ %&*A+$I&9%) 8?RI&PR?)%(C%. 9%(C%, R%&P ()%(* HARCIA 9A) ($M ?(*I$ 15 #ARC9 2004 2I*9I( 29IC9 * AI$% 9I& P%*I*I ( A R C%R*I RARI 2I*9 *9% C ?R* A APP%A$&. R%&P ()%(* HARCIA AAI$%) * AI$% 9I& P%*I*I ( A R C%R*I RARI +M &AI) )A*%.

+.

( *2I*9&*A()I(H *9% A R%H I(H, R%&P ()%(* HARCIA 9A) AC*?A$ ( *IC% A *9% I&&?A(C% A *9% &A#% A& A 24 8?(% 2004. 9%(C% R%&P ()%(* HARCIA 9A) ($M ?(*I$ 23 A?H?&* 2004 2I*9I( 29IC9 * AI$% 9I& P%*I*I ( A R C%R*I RARI 2I*9 *9% C ?R* A APP%A$&. R%&P ()%(* HARCIA AAI$%) * AI$% 9I& P%*I*I ( A R C%R*I RARI +M &AI) )A*%.

C.

%:%( IA *9% )A*% A R%C%IP* I& R%CO (%) AR # 15 &%P*%#+%R 2005, *9% )A*% R%&P ()%(* HARCIA A)#I**%) I( 9I& P%*I*I ( A R C%R*I RARI * +% *9% )A*% A 9I& R%C%IP* A *9% C PM A *9% R%& $?*I ( )A*%) 16 )%C%#+%R 2003 A* 9I& A$$%H%) (%2 A))R%&&, R%&P ()%(* HARCIA 9A) ($M ?(*I$ 15 ( :%#+%R 2005 * AI$% 9I& P%*I*I ( A R C%R*I RARI )A*%) 11 #ARC9 2005. R%&P ()%(* HARCIA AAI$%) * AI$% 9I& P%*I*I ( A R C%R*I RARI +M &AI) )A*%.

II

*9% C ?R* A APP%A$& %RR%) I( AAAIR#I(H *9% ($RC;& $I+%RA$ APP$ICA*I ( A R?$%& C (&I)%RI(H *9A* A $I+%RA$ APP$ICA*I ( A R?$%& CA(( * +% ?&%) * )%PRI:% A RIH9* *9A* 9A& A$R%A)M IP& AAC* :%&*%) ( P%*I*I (%R& %*PI, %* A$.

III

*9% C ?R* A APP%A$& %RR%) I( R?$I(H *9A* *9% ($RC )I) ( * C ##I* HRA:% A+?&% A )I&CR%*I ( A# ?(*I(H * $ACO R %PC%&& A 8?RI&)IC*I ( I( I&&?I(H I*& R)%R )A*%) 23 A?H?&* 2004 A() R%& $?*I ( )A*%) 10 8A(?ARM 2005 C (&I)%RI(H *9A* R%&P ()%(* HARCIA #AM ( * A&&AI$ *9% AI(A$I*M A R%& $?*I ( )A*%) 16 )%C%#+%R 2003 *9R ?H9 A #%R% # *I (.

I:

*9% C ?R* A APP%A$& %RR%) I( AAI$I(H * R?$% ( P%*I*I (%R&; C ?(*%R-# *I ( * CI*% R%&P ()%(* HARCIA I( C (*%#P* A C ?R* )%&PI*% I*& PR%:I ?& R%& $?*I ( )A*%) 30 #AM 2005 &*A*I(H *9A* I* &9A$$ A))R%&& *9% &A#% I( *9% )%CI&I ( ( *9% #%RI*& A *9% CA&%.240B86C

*!e issue r"ised 06 Att6. H"r/i" J >!et!er t!e ter,in"tion or re,ov"o3 "n o33i/er o3 " /orpor"tion is "n intr"-/orpor"te /ontrovers6 t!"t 3"--s under t!e ori.in"- e1/-usive Durisdi/tion o3 t!e re.ion"- tri"- /ourts J is not nove-. *!e &upre,e Court, in " -on. -ine o3 /"ses, !"s de/reed t!"t a 4o,>o,a5$ o++84$,7% d8%-8%%a. o, ,$-oAa. 8% a.1a/% a 4o,>o,a5$ a45 andCo, an 8n5,a=4o,>o,a5$ 4on5,oA$,%/, over >!i/! t!e &e/urities "nd

240

%1/!"n.e Co,,ission B&%CC 4no> t!e Re.ion"- *ri"- Court5 241B87C !"s ori.in"- "nd e1/-usive Durisdi/tion.242B88C

2e !"ve ru-ed t!"t "n intr"-/orpor"te /ontrovers6 is one >!i/! pert"ins to "n6 o3 t!e 3o--o>in. re-"tions!ips: 415 0et>een t!e /orpor"tion, p"rtners!ip or "sso/i"tion "nd t!e pu0-i/F 425 0et>een t!e /orpor"tion, p"rtners!ip or "sso/i"tion "nd t!e &t"te inso3"r "s t!e 3or,er;s 3r"n/!ise, per,it or -i/ense to oper"te is /on/ernedF 435 between the corporation, p"rtners!ip or "sso/i"tion and its sto/7!o-ders, p"rtners, ,e,0ers or officersF "nd 445 ",on. t!e sto/7!o-ders, p"rtners or "sso/i"tes t!e,se-ves.243B89C In Lo'on v. National Labor Relations Commission ,244B90C >e de/-"red t!"t Presidenti"- )e/ree (o. 902-A /on3ers on t!e &%C ori.in"- "nd e1/-usive Durisdi/tion to !e"r "nd de/ide /ontroversies "nd /"ses invo-vin. intr"-/orpor"te "nd p"rtners!ip re-"tions 0et>een or ",on. t!e /orpor"tion, o33i/ers "nd sto/7!o-ders "nd p"rtners, in/-udin. t!eir e-e/tions or "ppoint,ents 1 1 1.

+e3ore " dis,iss"- or re,ov"- /ou-d proper-6 3"-- >it!in t!e Durisdi/tion o3 t!e &%C, it !"s to 0e 3irst est"0-is!ed t!"t t!e person re,oved or dis,issed >"s " /orpor"te o33i/er.245B91C KCorpor"te o33i/ersL in t!e /onte1t
241 242 243 244 245

o3 Presidenti"- )e/ree (o. 902-A246B92C "re t!ose o33i/ers o3 t!e /orpor"tion >!o "re .iven t!"t /!"r"/ter 06 t!e Corpor"tion Code or 06 t!e /orpor"tion;s 06--">s.247B93C *!ere "re t!ree spe/i3i/ o33i/ers >!o, " *!e nu,0er o3 /orpor"tion ,ust !"ve under &e/tion 25 o3 t!e Corpor"tion Code. 248B94C *!ese "re t!e president, se/ret"r6 "nd t!e tre"surer. o33i/ers is not -i,ited to t!ese t!ree. A /orpor"tion ,"6 !"ve su/! ot!er o33i/ers "s ,"6 0e provided 3or 06 its 06--">s -i7e, 0ut not -i,ited to, t!e vi/e-president, /"s!ier, "uditor or .ener"- ,"n".er. *!e nu,0er o3 /orpor"te o33i/ers is t!us -i,ited 06 -"> "nd 06 t!e /orpor"tion;s 06--">s.

In t!e /"se 0e3ore us, t!e 06--">s o3 %*PI provide:

AR*IC$% :

33i/ers

&e/tion 1. Number. J *!e o33i/ers o3 t!e Co,p"n6 s!"-- 0e " C!"ir,"n o3 t!e +o"rd, " President, one or ,ore :i/e-Presidents, " *re"surer, " &e/ret"r6, "n Assist"nt &e/ret"r6, "nd su/! ot!er o33i/ers "s ,"6 0e 3ro, ti,e to ti,e 0e e-e/ted or "ppointed 06 t!e +o"rd o3 )ire/tors. ne person ,"6 !o-d "n6 t>o 249 /o,p"ti0-e o33i/es. B95C

246 247 248 249

Att6. H"r/i" tries to den6 !e is "n o33i/er o3 %*PI. /"se.

(ot 0ein. "

/orpor"te o33i/er, !e "r.ues t!"t t!e $"0or Ar0iter !"s Durisdi/tion over t!e ne o3 t!e /orpor"te o33i/ers provided 3or in t!e 06--">s o3 %*PI is It /"n 0e ."t!ered 3ro, Att6. H"r/i";s /o,p-"intt!e :i/e-President.

"33id"vit t!"t !e >"s :i/e President 3or +usiness &upport &ervi/es "nd 9u,"n Resour/e )ep"rt,ents o3 %*PI >!en !is e,p-o6,ent >"s ter,in"ted e33e/tive 16 Apri- 2000. It is t!ere3ore /-e"r 3ro, t!e 06--">s "nd 3ro, Att6. H"r/i" !i,se-3 t!"t !e is " /orpor"te o33i/er. ne >!o is in/-uded in t!e 06--">s o3 " /orpor"tion in its roster o3 /orpor"te o33i/ers is "n o33i/er o3 s"id /orpor"tion "nd not " ,ere e,p-o6ee. 250B96C +ein. " /orpor"te o33i/er, !is re,ov"- is dee,ed to 0e "n intr"-/orpor"te dispute /o.ni<"0-e 06 t!e &%C "nd not 06 t!e $"0or Ar0iter.

2e ".ree >it! 0ot! t!e ($RC "nd t!e Court o3 Appe"-s t!"t Att6. H"r/i";s ouster "s :i/e-President, >!o is " /orpor"te o33i/er o3 %*PI, p"rt"7es o3 t!e n"ture o3 "n intr"-/orpor"te /ontrovers6, Durisdi/tion over >!i/! is vested in t!e &%C 4no> t!e R*C5. *!e $"0or Ar0iter t!us erred in "ssu,in. Durisdi/tion over t!e /"se 3i-ed 06 Att6. H"r/i", 0e/"use !e !"d no Durisdi/tion over t!e su0De/t ,"tter o3 t!e /ontrovers6.

9"vin. ru-ed >!i/! 0od6 !"s Durisdi/tion over t!e inst"nt /"se, >e 3ind it unne/ess"r6, due to ,ootness, to 3urt!er dis/uss "nd ru-e on t!e issues r"ised 06 %*PI "nd Att6. 9i<on re."rdin. t!e ($RC order d"ted 23 Au.ust 2004 .r"ntin. Att6. H"r/i";s #otion to &et Aside Ain"-it6 o3
250

8ud.,ent >it!

pposition to #otion to )is/!"r.e Appe"- +ond, "nd its

reso-ution d"ted 10 8"nu"r6 2005 den6in. t!eir ,otion 3or re/onsider"tion t!ereon. *!e de/ision o3 t!e $"0or Ar0iter, >!o !"d Durisdi/tion over t!e /"se, >"s proper-6 dis,issed 06 t!e ($RC. Conse=uent-6, &upersede"s +ond (o. 8C$ 4155 00823 &ICI +ond (o. 75069 d"ted 18 (ove,0er 2002, posted 06 %*PI "s " re=uire,ent 3or t!e 3i-in. o3 "n "ppe"- 0e3ore t!e ($RC, is ordered dis/!"r.ed.

WHEREFORE, pre,ises /onsidered, t!e petition 3or certiorari o3 Att6. H"r/i" in H.R. (o. 173115 is !ere06 DENIED. *!e petition 3or revie> on certiorari o3 %*PI "nd Att6. 9i<on in H.R. (os. 173163-64 is ARTIALL! GRANTED inso3"r "s t!e dis/!"r.e o3 &upersede"s +ond (o. 8C$ 4155 00823 &ICI +ond (o. 75069 d"ted 18 (ove,0er 2002 is /on/erned. *!is ru-in. is >it!out preDudi/e to Att6. H"r/i";s t"7in. re/ourse to "nd see7in. re-ie3 t!rou.! t!e "ppropri"te re,ed6 in t!e proper 3oru,.

SO ORDERED.

Republic of the Philippines

S$&!%+% Co$!t
Manila /IRST DI0ISION
RENATO REAL, etitioner, G.R. No. 168555 Present=

; versus;

"ORON&, C. J., Chairperson, V!+&S"O, 6R., +!ON&RDO;D! "&STRO, D!+ "&STI++O, and P!R!Q, JJ. Pro(ul*ate = 6anuar/ %0, ')%%

SANGU P.ILIPPINES, INC. an J o! AIIC.I A2E, (espondents.

5;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;5

DECISION
DEL CASTILLO, J.: The perennial @uestion of $hether a co(plaint for ille*al is(issal is intra; corporate an thus be/on the 4uris iction of the +abor &rbiter is the core issue up for consi eration in this case.

This Petition for Revie$ on Certiorari assails the Decision251K%L ate 6une 'A, '))7 of the "ourt of &ppeals -"&. in "&;?.R. SP. No. A8)%1 $hich is(isse the petition for certiorari file before it.

Factual Antecedents

Petitioner Renato Real $as the Mana*er of respon ent corporation San*u Philippines, Inc., a corporation en*a*e in the business of provi in* (anpo$er for
251

*eneral services, li9e 4anitors, 4anitresses an other (aintenance personnel, to various clients. In '))%, petitioner, to*ether $ith '0 others $ho $ere either 4anitors, 4anitresses, lea (en an (aintenance (en, all e(plo/e b/ respon ent corporation, file their respective "o(plaints252K'L for ille*al is(issal a*ainst the latter an respon ent Siichi &be, the corporation3s Vice;Presi ent an ?eneral Mana*er. These co(plaints $ere later on consoli ate .

Bith re*ar to petitioner, he $as re(ove fro( his position as Mana*er throu*h #oar Resolution '))%;),253K,L a opte b/ respon ent corporation3s #oar of Directors. Petitioner co(plaine that he $as neither notifie of the #oar Meetin* urin* $hich sai boar resolution $as passe nor for(all/ char*e $ith an/ infraction. He 4ust receive fro( respon ents a letter254K2L ate March '8, '))% statin* that he has been ter(inate fro( service effective March '7, '))% for the follo$in* reasons= -%. continuous absences at his post at O*ino Philippines Inc. for several (onths $hich $as etri(ental to the corporation3s operationF -'. loss of trust an confi enceF an , -,. to cut o$n operational e5penses to re uce further losses bein* e5perience b/ respon ent corporation.

Respon ents, on the other han , refute petitioner3s clai( of ille*al is(issal b/ alle*in* that after petitioner $as appointe Mana*er, he co((itte *ross acts of (iscon uct etri(ental to the co(pan/ since '))). &ccor in* to the(, petitioner $oul al(ost al$a/s absent hi(self fro( $or9 $ithout infor(in* the corporation of his
252 253 254

$hereabouts an that he $oul co(e to the office onl/ to collect his salaries. &s he $as al(ost al$a/s absent, petitioner ne*lecte to supervise the e(plo/ees resultin* in co(plaints fro( various clients about e(plo/ees3 perfor(ance. In one instance, petitioner to*ether $ith a fe$ others, $hile apparentl/ run9, $ent to the pre(ises of one of respon ents3 clients, !pson Precision -Phils.. Inc., an en*a*e in a heate ar*u(ent $ith the e(plo/ees therein. #ecause of this, respon ent &be alle*e l/ receive a co(plaint fro( !pson3s Personnel Mana*er concernin* petitioner3s con uct. Respon ents li9e$ise averre that petitioner establishe a co(pan/ en*a*e in the sa(e business as respon ent corporation3s an even sub(itte proposals for 4anitorial services to t$o of the latter3s clients. #ecause of all these, the #oar of Directors of respon ent corporation (et on March '2, '))% an a opte #oar Resolution No. '))%;), re(ovin* petitioner as Mana*er. Petitioner $as thereafter infor(e of his re(oval throu*h a letter ate March '8, '))% $hich he, ho$ever, refuse to receive.

Further, in $hat respon ents believe to be an act of retaliation, petitioner alle*e l/ encoura*e the e(plo/ees $ho ha been place in the (anpo$er pool to file a co(plaint for ille*al is(issal a*ainst respon ents. Borse, he later incite those assi*ne in !pson Precision -Phils.. Inc., O*ino Philippines "orporation, Hitachi "able Philippines Inc. an Philippine TR" Inc. to sta*e a stri9e on &pril %) to %8, '))%. Not satisfie , petitioner to*ether $ith other e(plo/ees also barrica e the pre(ises of respon ent corporation. Such acts respon ents posite constitute 4ust cause for petitioner3s is(issal an that sa(e $as vali l/ effecte .

Rulings o t!e "abor Arbiter and t!e #ational "abor Relations $ommission

The +abor &rbiter in a Decision255K7L ate 6une 7, ')), eclare petitioner an his co;co(plainants as havin* been ille*all/ is(isse an or ere respon ents to reinstate co(plainants to their for(er positions $ithout loss of seniorit/ ri*hts an other privile*es an to pa/ their full bac9$a*es fro( the ti(e of their is(issal until actuall/ reinstate an further(ore, to pa/ the( attorne/3s fees. The +abor &rbiter foun no convincin* proof of the causes for $hich petitioner $as ter(inate an note that there $as co(plete absence of ue process in the (anner of his ter(ination.

Respon ents thus appeale to the National +abor Relations "o((ission -N+R". an raise therein as one of the issues the lac9 of 4uris iction of the +abor &rbiter over petitioner3s co(plaint. Respon ents clai(e that petitioner is both a stoc9hol er an a corporate officer of respon ent corporation, hence, his action a*ainst respon ents is an intra;corporate controvers/ over $hich the +abor &rbiter has no 4uris iction.

The N+R" foun such contention of respon ents to be (eritorious. &si e fro( petitioner3s o$n a (ission in the plea in*s that he is a stoc9hol er an at the sa(e ti(e occup/in* a (ana*erial position, the N+R" also *ave $ei*ht to the corporation3s ?eneral Infor(ation Sheet256K8L -?IS. ate October '1, %000 listin* petitioner as one of its stoc9hol ers, conse@uentl/ his ter(ination ha to be effecte throu*h a boar resolution. These, the N+R" opine , clearl/ establishe as a corporate officer an petitioner3s status as a stoc9hol er an hence, his action a*ainst respon ent

corporation is an intra;corporate controvers/ over $hich the +abor &rbiter has no 4uris iction. &s to the other co(plainants, the N+R" rule that there $as no is(issal.

255 256

The N+R" ho$ever, (o ifie

the appeale

ecision of the +abor &rbiter in a

Decision257K1L ate Februar/ %,, '))2, the ispositive portion of $hich rea s=

BH!R!FOR!, all fore*oin* pre(ises consi ere , the appeale Decision ate 6une 7, ')), is hereb/ MODIFI!D. &ccor in*l/, 4u *(ent is hereb/ ren ere DISMISSIN? the co(plaint of Renato Real for lac9 of 4uris iction. &s to the rest of the co(plainants, the/ are hereb/ or ere to i((e iatel/ report bac9 to $or9 but $ithout the pa/(ent of bac9$a*es. &ll other clai(s a*ainst respon ents inclu in* attorne/3s fees are DISMISS!D for lac9 of (erit. SO ORD!R!D.

Still 4oine b/ his co;co(plainants, petitioner brou*ht the case to the "& b/ $a/ of petition for certiorari. Ruling o t!e $ourt o A%%eals

#efore the "&, petitioner i(pute upon the N+R" *rave abuse of iscretion a(ountin* to lac9 or e5cess of 4uris iction in eclarin* hi( a corporate officer an in hol in* that his action a*ainst respon ents is an intra;corporate controvers/ an thus be/on the 4uris iction of the +abor &rbiter.

Bhile a (ittin* that he is in ee a stoc9hol er of respon ent corporation, petitioner nevertheless ispute the eclaration of the N+R" that he is a corporate officer thereof. He posite that his bein* a stoc9hol er an his bein* a (ana*erial e(plo/ee o not ipso facto confer upon hi( the status of a corporate officer. To support this contention, petitioner calle the "&3s attention to the sa(e ?IS relie upon b/ the N+R" $hen it eclare hi( to be a corporate officer. He pointe out that althou*h sai
257

infor(ation sheet clearl/ in icates that he is a stoc9hol er of respon ent corporation, he is not an officer thereof as sho$n b/ the entr/ MNE&N or M not applicableN opposite his na(e in the officer colu(n. Sai colu(n re@uires that the particular position be in icate if the person is an officer an if not, the entr/ MNE&N. Petitioner further ar*ue that the fact that his is(issal $as effecte throu*h a boar resolution oes not li9e$ise (ean that he is a corporate officer. Other$ise, all that an e(plo/er has to o in or er to avoi co(pliance $ith the re@uisites of a vali is(issal un er the +abor "o e is to is(iss a (ana*erial e(plo/ee throu*h a boar resolution. Moreover, he insiste that his action for ille*al is(issal is not an intra;corporate controvers/ as sa(e ste((e fro( e(plo/ee;e(plo/er relationship $hich is $ell $ithin the 4uris iction of the +abor &rbiter. This can be e uce an is bolstere b/ the last para*raph of the ter(ination letter sent to hi( b/ respon ents statin* that he is entitle to benefits un er the +abor "o e, to $it=

In this connection -his is(issal. /ou are entitle to separation pa/ an other benefits provi e for $n %! t8% La9o! Co % o# t8% P8*:*&&*n%".258KAL -!(phasis supplie .

In contrast, respon ents stoo fir( that the action a*ainst the( is an intra; corporate controvers/. It cite 9abang v. &ational 'abor (elations Commission259K0L $herein this "ourt eclare that Man intra;corporate controvers/ is one $hich arises bet$een a stoc9hol er an the corporationFN that MKtLhere is no istinction, @ualification, nor an/ e5e(ption $hatsoeverFN an that it is Mbroa an covers all 9in s of controversies bet$een stoc9hol ers an corporations.N In vie$ of this rulin* an since petitioner is un ispute l/ a stoc9hol er of the corporation, respon ents conten e that the action institute
258 259

b/ petitioner a*ainst the( is an intra;corporate controvers/

co*niDable onl/ b/ the appropriate re*ional trial court. Hence, the N+R" correctl/ is(isse petitioner3s co(plaint for lac9 of 4uris iction.

In the assaile Decision260K%)L ate 6une 'A, '))7, the "& si e $ith respon ents an affir(e the N+R"3s fin in* that asi e fro( bein* a stoc9hol er of respon ent corporation, petitioner is also a corporate officer thereof an conse@uentl/, his co(plaint is an intra;corporate controvers/ over $hich the labor arbiter has no 4uris iction. Sai court opine that if it $as true that petitioner is a (ere e(plo/ee, the respon ent corporation $oul not have calle a boar (eetin* to pass a resolution for petitioner3s is(issal consi erin* that it $as ver/ te ious for the #oar of Directors to convene an to a opt a resolution ever/ ti(e the/ eci e to is(iss their (ana*erial e(plo/ees. To support its fin in*, the "& li9e$ise cite 9abang. &s to petitioner3s co;co(plainants, the "& li9e$ise affir(e the N+R"3S fin in* that the/ $ere never is(isse fro( the service. The ispositive portion of the "& Decision rea s=

BH!R!FOR!, the instant petition is hereb/ DISMISS!D. &ccor in*l/, the assaile ecision an resolution of the public respon ent National +abor Relations "o((ission in N+R" N"R "& No. ),8%'A;), N+R" SR&#;IV;)7;88%A;)%;#E)7; 88%0;)';#E)7;88');)';#E%);88,1;)%;#E%);8A,,;)%;#, ST&NDS. SO ORD!R!D.

No$ alone but still un eterre , petitioner elevate the case to us throu*h this Petition for Revie$ on Certiorari.

&!e 'arties( Arguments

Petitioner continues to insist that he is not a corporate officer. He ar*ues that a corporate officer is one $ho hol s an elective position as provi e in the &rticles of
260

Incorporation or one $ho is appointe to such other positions b/ the #oar of Directors as specificall/ authoriDe b/ its #/;+a$s. &n , since he $as neither electe nor is there an/ sho$in* that he $as appointe b/ the #oar of Directors to his position as Mana*er, petitioner (aintains that he is not a corporate officer contrar/ to the fin in*s of the N+R" an the "&.

Petitioner li9e$ise conten s that his co(plaint for ille*al

is(issal a*ainst

respon ents is not an intra;corporate controvers/. He avers that for an action or suit bet$een a stoc9hol er an a corporation to be consi ere an intra;corporate controvers/, sa(e (ust arise fro( intra;corporate relations, i.e., an action involvin* the status of a stoc9hol er as such. He believes that his action a*ainst the respon ents oes not arise fro( intra;corporate relations but rather fro( e(plo/er;e(plo/ee relations. @uote portion of the ter(ination letter the/ sent to hi(. This, accor in* to hi(, $as even i(plie l/ reco*niDe b/ respon ents as sho$n b/ the earlier

For their part, respon ents posit that $hat petitioner is essentiall/ assailin* before this "ourt is the fin in* of the N+R" an the "& that he is a corporate officer of respon ent corporation. To the respon ents, the @uestion of $hether petitioner is a corporate officer is a @uestion of fact $hich, as hel in a lon* line of 4urispru ence, cannot be the sub4ect of revie$ un er this Petition for Revie$ on Certiorari. &t an/ rate, respon ents insist that petitioner $ho is un ispute l/ a stoc9hol er of respon ent corporation is li9e$ise a corporate officer an that his action a*ainst the( is an intra; corporate ispute be/on the 4uris iction of the labor tribunals. To support this, the/ cite several 4urispru ence such as earson : 8eorge +#.". $sia,, %nc. v. &ational 'abor

(elations Commission,261K%%L hilippine #chool of 6usiness $dministration v. 'eano, 262 K%'L 4ortune Cement Corporation v. &ational 'abor (elations Commission263K%,L an a*ain, 9abang v. &ational 'abor (elations Commission.264K%2L

Moreover, in an atte(pt to

e(olish petitioner3s clai( that the present the

controvers/ concerns e(plo/er;e(plo/ee relations, respon ents enu(erate

follo$in* facts an circu(stances= -%. Petitioner $as an incorporator, stoc9hol er an (ana*er of respon ent co(pan/F -'. &s an incorporator, he $as one of onl/ seven incorporators of respon ent corporation an one of onl/ four Filipino (e(bers of the #oar of DirectorsF -,. &s stoc9hol er, he has One Thousan -%,))). of the Ten Thousan !i*ht Hun re -%),A)). co((on shares hel b/ Filipino stoc9hol ers, $ith a par;value of One Hun re Thousan Pesos -P%)),))).)).F -2. His appoint(ent as (ana*er $as b/ virtue of Section %, &rticle IV of respon ent corporation3s #/;+a$sF -7. &s (ana*er, he ha irect (ana*e(ent an authorit/ over all of respon ent corporation3s even causin* friction $ith the s9ille e(plo/eesF -8. Petitioner has sho$n hi(self to be an inco(petent (ana*er, unable to properl/ supervise the e(plo/ees an corporation3s clients b/ en*a*in* in unrul/ behavior $hile in client3s pre(isesF -1. &s if his inco(petence $as not enou*h, in a blatant an palpable act of islo/alt/, he establishe another co(pan/ en*a*e in the sa(e line of business as respon ent corporationF -A. #ecause of these acts of inco(petence an corporation throu*h a Resolution a opte
261 262 263 264

islo/alt/, respon ent

b/ its #oar

of Directors $as finall/

constraine to re(ove petitioner as Mana*er an the( to believe that the/ have been ille*all/ &pparentl/, respon ents inten e

eclare his office vacantF -0. &fter his is(isse fro( e(plo/(ent. 265K%7L

re(oval, petitioner ur*e the e(plo/ees un er hi( to sta*e an unla$ful stri9e b/ lea in* to sho$ fro( this enu(eration that petitioner3s

re(oval pertains to his relationship $ith respon ent corporation, that is, his utter failure to a vance its interest an the pre4u ice cause b/ his acts of islo/alt/. For this reason, respon ents see the action a*ainst the( not as a case bet$een an e(plo/er an an e(plo/ee as $hat petitioner alle*es, but one b/ an officer an at sa(e ti(e a (a4or stoc9hol er see9in* to be reinstate to his for(er office a*ainst the corporation that eclare his position vacant.

Finall/, respon ents state that the fact that petitioner is bein* *iven benefits un er the +abor "o e as state in his ter(ination letter oes not (ean that the/ are reco*niDin* the e(plo/er;e(plo/ee relations bet$een the(. The/ e5plain that the benefits provi e un er the +abor "o e $ere (erel/ (a e b/ respon ent corporation as the basis in eter(inin* petitioner3s co(pensation pac9a*e an that sa(e are (erel/ part of the per@uisites of petitioner3s office as a irector an (ana*er. It oes not an it cannot chan*e the intra;corporate nature of the controvers/. Hence, respon ents pra/ that this petition be is(isse for lac9 of (erit.
I""$%"

Fro( the fore*oin* an as earlier (entione , the core issue to be resolve in this case is $hether petitioner3s co(plaint for ille*al is(issal constitutes an intra;corporate controvers/ an thus, be/on the 4uris iction of the +abor &rbiter.

265

O$! R$:*n;

9wo*tier test in determining the existence of intra*corporate controversy

Respon ents stron*l/ rel/ on this "ourt3s pronounce(ent in the %001 case of 9abang v. &ational 'abor (elations Commission, to $it=
K&Ln intra;corporate controvers/ is one $hich arises bet$een a stoc9hol er an the corporation. There is no istinction, @ualification nor an/ e5e(ption $hatsoever. The provision is broa an covers all 9in s of controversies bet$een stoc9hol ers an corporations.266K%8L

In vie$ of this, respon ents conten that even if petitioner challen*es his bein* a corporate officer, the present case still constitutes an intra;corporate controvers/ as petitioner is un ispute l/ a stoc9hol er an a irector of respon ent corporation.

It is $orth/ to note, ho$ever, that before the pro(ul*ation of the 9abang case, the "ourt provi e in Mainland Construction Co., %nc. v. Movilla267K%1L a Mbetter polic/N in eter(inin* $hich bet$een the Securities an !5chan*e "o((ission -S!". an the +abor &rbiter has 4uris iction over ter(ination isputes,268K%AL or si(ilarl/, $hether the/ are intra;corporate or not, viz=
The fact that the parties involve in the controvers/ are all stoc9hol ers or that the parties involve are the stoc9hol ers an the corporation oes not necessaril/ place the ispute
266 267 268

$ithin the a(bit of the 4uris iction of the S!" -no$ the Re*ional Trial "ourt269K%0L.. &!e better %olic) to be ollo*ed in determining +urisdiction o,er a case s!ould be to consider concurrent actors suc! as t!e status or relations!i% o t!e %arties or t!e nature o t!e -uestion t!at is sub+ect o t!eir contro,ers). In the absence of an/ one of these factors, the S!" $ill not have 4uris iction. Further(ore, it oes not necessaril/ follo$ that ever/ conflict bet$een the corporation an its stoc9hol ers $oul involve such corporate (atters as onl/ S!" -no$ the Re*ional Trial "ourt270K')L. can resolve in the e5ercise of its a 4u icator/ or @uasi;4u icial po$ers. -!(phasis ours.

&n , $hile 9abang $as pro(ul*ate later than Mainland Construction Co., %nc., the Mbetter polic/N enunciate in the latter appears to have evelope into a stan ar approach in classif/in* $hat constitutes an intra;corporate controvers/. This is e5plaine len*thil/ in (eyes v. (egional 9rial Court of Makati, 6r. .;<,271K'%L to $it=
%ntra*Corporate Controversy & revie$ of relevant 4urispru ence sho$s a evelop(ent in the "ourt3s approach in classif/in* $hat constitutes an intra;corporate controvers/. Initiall/, the (ain consi eration in eter(inin* $hether a ispute constitutes an intra;corporate controvers/ $as li(ite to a consi eration of the intra;corporate relationship e5istin* bet$een or a(on* the parties. The t/pes of relationships e(brace un er Section 7-b. 5 5 5 $ere as follo$s=
a. b. c. . bet$een the corporation, partnership or association an the publicF bet$een the corporation, partnership or association an its stoc9hol ers, partners, (e(bers or officersF bet$een the corporation, partnership or association an the State as far as its franchise, per(it or license to operate is concerne F an a(on* the stoc9hol ers, partners or associates the(selves.

The e5istence of an/ of the above intra;corporate relations $as sufficient to confer 4uris iction to the S!" -no$ the RT"., re*ar less of the sub4ect (atter of the ispute. This ca(e to be 9no$n as the relationship test.

269 270 271

Ho$ever, in the %0A2 case of )M(C "nterprises v. "sta del #ol Mountain (eserve, %nc., the "ourt intro uce the nature of the controvers/ test. Be eclare in this case that it is not the (ere e5istence of an intra;corporate relationship that *ives rise to an intra;corporate controvers/F to rel/ on the relationship test alone $ill ivest the re*ular courts of their 4uris iction for the sole reason that the ispute involves a corporation, its irectors, officers, or stoc9hol ers. Be sa$ that there is no le*al sense in isre*ar in* or (ini(iDin* the value of the nature of the transactions $hich *ives rise to the ispute. <n er the nature of the controvers/ test, the inci ents of that relationship (ust also be consi ere for the purpose of ascertainin* $hether the controvers/ itself is intra; corporate. The controvers/ (ust not onl/ be roote in the e5istence of an intra;corporate relationship, but (ust as $ell pertain to the enforce(ent of the parties3 correlative ri*hts an obli*ations un er the "orporation "o e an the internal an intra;corporate re*ulator/ rules of the corporation. If the relationship an its inci ents are (erel/ inci ental to the controvers/ or if there $ill still be conflict even if the relationship oes not e5ist, then no intra;corporate controvers/ e5ists. The "ourt then co(bine the t$o tests an eclare that 4uris iction shoul be eter(ine b/ consi erin* not onl/ the status or relationship of the parties, but also the nature of the @uestion un er controvers/. This t$o;tier test $as a opte in the recent case of #peed )istribution %nc. v. Court of $ppeals!
WTo eter(ine $hether a case involves an intra;corporate controvers/, an is to be hear an eci e b/ the branches of the RT" specificall/ esi*nate b/ the "ourt to tr/ an eci e such cases, t$o ele(ents (ust concur= -a. the status or relationship of the parties, an -'. the nature of the @uestion that is the sub4ect of their controvers/. The first ele(ent re@uires that the controvers/ (ust arise out of intra; corporate or partnership relations bet$een an/ or all of the parties an the corporation, partnership, or association of $hich the/ are not stoc9hol ers, (e(bers or associates, bet$een an/ or all of the( an the corporation, partnership or association of $hich the/ are stoc9hol ers, (e(bers or associates, respectivel/F an bet$een such corporation, partnership, or association an the State insofar as it concerns the in ivi ual franchises. The secon ele(ent re@uires that the ispute a(on* the parties be intrinsicall/ connecte $ith the re*ulation of the corporation. If the nature of the controvers/ involves (atters that are purel/ civil in character, necessaril/, the case oes not involve an intra;corporate controvers/.3 K"itations o(itte .L

?ui e b/ this recent 4urispru ence, $e thus fin no (erit in respon ents3 contention that the fact alone that petitioner is a stoc9hol er an irector of respon ent corporation auto(aticall/ classifies this case as an intra;corporate controvers/. To reiterate, not all conflicts bet$een the stoc9hol ers an the corporation are classifie as

intra;corporate. There are other factors to consi er in eter(inin* $hether the ispute involves corporate (atters as to consi er the( as intra;corporate controversies.

=hat then is the nature of petitioner>s Complaint for %llegal )ismissal? %s it intra* corporate and thus beyond the @urisdiction of the 'abor $rbiter? Be shall ans$er this @uestion b/ usin* the stan ar s set forth in the (eyes case. &o intra*corporate relationship between the parties

&s earlier state , petitioner3s status as a stoc9hol er an

irector of respon ent

corporation is not ispute . Bhat the parties isa*ree on is the fin in* of the N+R" an the "& that petitioner is a corporate officer. &n e5a(ination of the co(plaint for ille*al is(issal, ho$ever, reveals that the root of the controvers/ is petitioner3s is(issal as Mana*er of respon ent corporation, a position $hich respon ents clai( to be a corporate office. Hence, petitioner is involve in this case not in his capacit/ as a stoc9hol er or irector, but as an alle*e corporate officer. In appl/in* the relationship test, therefore, it is necessar/ to eter(ine if petitioner is a corporate officer of respon ent corporation so as to establish the intra;corporate relationship bet$een the parties. &n albeit respon ents clai( that the eter(ination of $hether petitioner is a corporate officer is a @uestion of fact $hich this "ourt cannot pass upon in this petition for revie$ on certiorari, $e shall nonetheless procee to consi er the sa(e because such @uestion is not the (ain issue to be resolve in this case but is (erel/ collateral to the core issue earlier (entione .

Petitioner ne*ates his status as a corporate officer b/ pointin* out that althou*h he $as re(ove as Mana*er throu*h a boar resolution, he $as never electe to sai

position nor $as he appointe thereto b/ the #oar of Directors. Bhile the #/;+a$s of respon ent corporation provi es that the #oar (a/ fro( ti(e to ti(e appoint such officers as it (a/ ee( necessar/ or proper, he avers that respon ents faile to present an/ boar resolution that he $as appointe pursuant to sai #/;+a$s. He instea alle*es that he $as hire as Mana*er of respon ent corporation solel/ b/ respon ent &be. For these reasons, petitioner clai(s to be a (ere e(plo/ee of respon ent corporation rather than as a corporate officer.

Be fin (erit in petitioner3s contention.

MW"orporate officers3 in the conte5t of Presi ential Decree No. 0)';& are those officers of the corporation $ho are *iven that character b/ the "orporation "o e or b/ the corporation3s b/;la$s. There are three specific officers $ho( a corporation (ust have un er Section '7 of the "orporation "o e. These are the presi ent, secretar/ an the treasurer. The nu(ber of officers is not li(ite to these three. & corporation (a/ have such other officers as (a/ be provi e for b/ its b/;la$s li9e, but not li(ite to, the vice;presi ent, cashier, au itor or *eneral (ana*er. The nu(ber of corporate officers is thus li(ite b/ la$ an b/ the corporation3s b/;la$s.N272K''L

Respon ents clai( that petitioner $as appointe Mana*er b/ virtue of Section %, &rticle IV of respon ent corporation3s #/;+a$s $hich provi es=
&RTI"+! IV OFFI"!R Section %. "lectionA$ppointment P I((e iatel/ after their election, the #oar of Directors shall for(all/ or*aniDe b/ electin* the Presi ent, Vice;Presi ent, the Secretar/ at sai (eetin*.
272

&!e .oard/ ma) rom time to time/ a%%oint suc! ot!er o icers as it ma) determine to be necessar) or %ro%er. &n/ t$o -'. or (ore positions (a/ be hel concurrentl/ b/ the sa(e person, e5cept that no one shall act as Presi ent an Treasurer or Secretar/ at the sa(e ti(e. 5 5 5 5273K',L -!(phasis ours.

Be have ho$ever e5a(ine the recor s of this case an $e fin nothin* to prove that petitioner3s appoint(ent $as (a e pursuant to the above;@uote provision of respon ent corporation3s #/;+a$s. No cop/ of boar resolution appointin* petitioner as Mana*er or an/ other ocu(ent sho$in* that he $as appointe to sai position b/ action of the boar $as sub(itte b/ respon ents. Bhat $e foun instea $ere (ere alle*ations of respon ents in their various plea in*s 274K'2L that petitioner $as appointe as Mana*er of respon ent corporation an nothin* (ore. MThe "ourt has stresse ti(e an a*ain that alle*ations (ust be proven b/ sufficient evi ence because (ere alle*ation is efinitel/ not evi ence.N275K'7L

It also

oes not escape our attention that respon ents (a e the follo$in*

conflictin* alle*ations in their Me(oran u( on &ppeal276K'8L file before the N+R" $hich cast oubt on petitioner3s status as a corporate officer, to $it=
5555

273 274 275 276

'2. "o(plainant;appellee Renato Real $as appointe as the (ana*er of respon ent;appellant San*u on Nove(ber 8, %00A. Priorl/ KsicL, he $as $or9in* at &tlas +t . "o. at Mito;shi, Ibara9i;9en 6apan. He $as sta/in* in 6apan as an ille*al alien for the past eleven -%%. /ears. He ha a proble( $ith his fa(il/ here in the Philippines $hich pro(pte hi( to surren er hi(self to 6apan3s #ureau of I((i*ration an $as eporte bac9 to the Philippines. His for(er e(plo/er, Mr. Tsuto(o No*a(i re@ueste Mr. Masahi9o Shibata, one of respon ent;appellant San*u3s #oar of Directors, if co(plainant;appellee Renato Real coul $or9 as one of its e(plo/ees here in the Philippines because he ha been blac9liste at 6apan3s I((i*ration Office an coul no lon*er *o bac9 to 6apan. And so it *as arranged t!at !e *ould ser,e as res%ondent0 a%%ellant Sangu(s manager/ recei,ing a salar) o '25/000.00. &s such, he $as tas9e to oversee the operations of the co(pan/. 5 5 5 -!(phasis ours. 5555 &s earlier state , co(plainant;appellee Renato Real $as !ired as the (ana*er of respon ent;appellant San*u. &s such, his position $as repose $ith full trust an confi ence. 5 5 5

Bhile respon ents repeate l/ clai( that petitioner $as appointe as Mana*er pursuant to the corporation3s #/;+a$s, the above;@uote inconsistencies in their alle*ations as to ho$ petitioner $as place in sai position, couple b/ the fact that the/ faile to pro uce an/ ocu(entar/ evi ence to prove that petitioner $as appointe thereto b/ action or $ith approval of the boar , onl/ lea s this "ourt to believe other$ise. It has been consistentl/ hel that MKaLn Woffice3 is create b/ the charter of the corporation an the officer is electe -or appointe . b/ the irectors or stoc9hol ers.N277K'1L "learl/ here, respon ents faile to prove that petitioner $as appointe b/ the boar of irectors. Thus, $e cannot subscribe to their clai( that petitioner is a corporate officer. Havin* sai this, $e fin that there is no intra;corporate relationship bet$een the parties insofar as petitioner3s co(plaint for ille*al is(issal is concerne an that sa(e oes not satisf/ the relationship test.

277

resent controversy does not relate to intra* corporate dispute

Be no$ *o to the nature of controvers/ test. &s earlier state , respon ents ter(inate the services of petitioner for the follo$in* reasons= -%. his continuous absences at his post at O*ino Philippines, IncF -'. respon ents3 loss of trust an confi ence on petitionerF an , -,. to cut o$n operational e5penses to re uce further losses bein* e5perience b/ the corporation. Hence, petitioner file a co(plaint for ille*al is(issal an sou*ht reinstate(ent, bac9$a*es, (oral a(a*es an attorne/3s fees. Fro( these, it is not ifficult to see that the reasons *iven b/ respon ents for is(issin* petitioner have so(ethin* to o $ith his bein* a Mana*er of respon ent corporation an nothin* $ith his bein* a irector or stoc9hol er. For one, petitioner3s continuous absences in his post in O*ino relates to his perfor(ance as Mana*er. Secon , respon ents3 loss of trust an confi ence in petitioner ste((e fro( his alle*e acts of establishin* a co(pan/ en*a*e in the sa(e line of business as respon ent corporation3s an sub(ittin* proposals to the latter3s clients $hile he $as still servin* as its Mana*er. Bhile $e note that respon ents also clai( these acts as constitutin* acts of islo/alt/ of petitioner as irector an stoc9hol er, $e, ho$ever, thin9 that sa(e is a (ere afterthou*ht on their part to (a9e it appear that the present case involves an ele(ent of intra;corporate controvers/. This is because before the +abor &rbiter, respon ents i not see such acts to be islo/al acts of a irector an stoc9hol er but rather, as constitutin* $illful breach of the trust repose upon petitioner as Mana*er. 278K'AL It $as onl/ after respon ents invo9e the +abor &rbiter3s lac9 of 4uris iction over petitioner3s co(plaint in the Supple(ental Me(oran u( of &ppeal279K'0L file
278 279

before the N+R" that

respon ents starte consi erin* sai acts as such. Thir , in sa/in* that the/ $ere is(issin* petitioner to cut operational e5penses, respon ents actuall/ $ant to save on the salaries an other re(unerations bein* *iven to petitioner as its Mana*er. Thus, $hen petitioner sou*ht for reinstate(ent, he $ante to recover his position as Mana*er, a position $hich $e have, ho$ever, earlier eclare to be not a corporate position. He is not tr/in* to recover a seat in the boar of irectors or to an/ appointive or elective corporate position $hich has been eclare vacant b/ the boar . "ertainl/, $hat $e have here is a case of ter(ination of e(plo/(ent $hich is a labor controvers/ an not an intra;corporate ispute. In su(, $e hol that petitioner3s co(plaint li9e$ise oes not satisf/ the nature of controvers/ test.

Bith the ele(ents of intra;corporate controvers/ bein* absent in this case, $e thus hol that petitioner3s co(plaint for ille*al is(issal a*ainst respon ents is not intra; corporate. Rather, it is a ter(ination ispute an , conse@uentl/, falls un er the 4uris iction of the +abor &rbiter pursuant to Section '%1280K,)L of the +abor "o e.

Be ta9e note of the cases cite b/ respon ents an fin the( inapplicable to the case at bar. 4ortune Cement Corporation v. &ational 'abor (elations Commission 281K,%L involves a (e(ber of the boar of irectors an at the sa(e ti(e a corporate officer $ho clai(s he $as ille*all/ is(isse after he $as strippe of his corporate position of !5ecutive Vice;Presi ent because of loss of trust an confi ence. On the other han , hilippine #chool of 6usiness $dministration v. 'eano282[32] an
280 281 282

earson : 8eorge v.

&ational 'abor (elations Commission283K,,L both concern a co(plaint for ille*al is(issal b/ corporate officers $ho $ere not re;electe to their respective corporate positions. The "ourt eclare all these cases as involvin* intra;corporate controversies an thus affir(e the 4uris iction of the S!" -no$ the RT". 284K,2L over the( precisel/ because the/ all relate to corporate officers an their re(oval or non;reelection to their respective corporate positions. Sai cases are b/ no (eans si(ilar to the present case because as iscusse earlier, petitioner here is not a corporate officer. Bith the fore*oin*, it is clear that the "& erre in affir(in* the ecision of the N+R" $hich is(isse petitioner3s co(plaint for lac9 of 4uris iction. In cases such as this, the "ourt nor(all/ re(an s the case to the N+R" an irects it to properl/ ispose of the case on the (erits. MHo$ever, $hen there is enou*h basis on $hich a proper evaluation of the (erits of petitioner3s case (a/ be ha , the "ourt (a/ ispense $ith the ti(e;consu(in* proce ure of re(an in or er to prevent further ela/s in the isposition of the case.N285K,7L MIt is alrea / an accepte rule of proce ure for us to strive to settle the entire controvers/ in a sin*le procee in*, leavin* no root or branch to bear the see s of liti*ation. If, base on the recor s, the plea in*s, an other evi ence, the ispute can be resolve b/ us, $e $ill o so to serve the en s of 4ustice instea of re(an in* the case to the lo$er court for further procee in*s.N286K,8L Be have *one over the recor s before us an $e are convince that $e can no$ alto*ether resolve the issue of the vali it/ of petitioner3s is(issal an hence, $e shall procee to o so.
283 284 285 286

etitioner>s dismissal not in accordance with law MIn an ille*al is(issal case, the onus probandi rests on the e(plo/er to prove that KtheL is(issal of an e(plo/ee is for a vali cause.N 287K,1L Here, as correctl/ observe b/ the +abor &rbiter, respon ents faile to pro uce an/ convincin* proof to support the *roun s for $hich the/ ter(inate petitioner. Respon ents conten that petitioner has been absent for several (onths, /et the/ faile to present an/ proof that petitioner $as in ee absent for such a lon* ti(e. &lso, the fact that petitioner $as still able to collect his salaries after his alle*e absences casts oubts on the truthfulness of such char*e. Respon ents li9e$ise alle*e that petitioner en*a*e in a heate ar*u(ent $ith the e(plo/ees of !pson, one of respon ents3 clients. #ut 4ust li9e in the char*e of absenteeis(, there is no sho$in* that an investi*ation on the (atter $as one an that isciplinar/ action $as i(pose upon petitioner. &t an/ rate, $e have revie$e the recor s of this case an $e a*ree $ith the +abor &rbiter that un er the circu(stances, sai char*es are not sufficient bases for petitioner3s ter(ination. &s to the char*e of breach of trust alle*e l/ co((itte b/ petitioner $hen he establishe a ne$ co(pan/ en*a*e in the sa(e line of business as respon ent corporation3s an sub(itte proposals to t$o of the latter3s clients $hile he $as still a Mana*er, $e a*ain observe that these are (ere alle*ations $ithout sufficient proof. To reiterate, alle*ations (ust be proven b/ sufficient evi ence because (ere alle*ation is efinitel/ not evi ence.288K,AL

287 288

Moreover, petitioner3s is(issal $as effecte $ithout ue process of la$. MThe t$in re@uire(ents of notice an hearin* constitute the essential ele(ents of ue process. The la$ re@uires the e(plo/er to furnish the e(plo/ee sou*ht to be is(isse $ith t$o $ritten notices before ter(ination of e(plo/(ent can be le*all/ effecte = -%. a $ritten notice apprisin* the e(plo/ee of the particular acts or o(issions for $hich his is(issal is sou*ht in or er to affor hi( an opportunit/ to be hear an to efen hi(self $ith the assistance of counsel, if he esires, an -'. a subse@uent notice infor(in* the e(plo/ee of the e(plo/er3s ecision to is(iss hi(. This proce ure is (an ator/ an its absence taints the is(issal $ith ille*alit/.N289K,0L Since in this case, petitioner3s is(issal $as effecte throu*h a boar resolution an all that petitioner receive $as a letter infor(in* hi( of the boar 3s ecision to ter(inate hi(, the above(entione proce ure $as clearl/ not co(plie $ith. &ll tol , $e a*ree $ith the fin in*s of the +abor &rbiter that petitioner has been ille*all/ is(isse . &n , as an ille*all/ is(isse e(plo/ee is entitle to the t$o reliefs of bac9$a*es an reinstate(ent, 290K2)L $e affir( the +abor &rbiter3s 4u *(ent or erin* petitioner3s reinstate(ent to his for(er position $ithout loss of seniorit/ ri*hts an other privile*es an a$ar in* bac9$a*es fro( the ti(e of his is(issal until actuall/ reinstate . "onsi erin* that petitioner has to secure the services of counsel to protect his interest an necessaril/ has to incur e5penses, $e li9e$ise affir( the a$ar of attorne/3s fees $hich is e@uivalent to %)> of the total bac9$a*es that respon ents (ust pa/ petitioner in accor ance $ith this Decision. -.ERE/ORE, the petition is hereb/ GRANTED. The assaile 6une 'A, '))7 Decision of the "ourt of &ppeals insofar as it affir(e the National +abor Relations "o((ission3s is(issal of petitioner3s co(plaint for lac9 of 4uris iction, is hereb/
289 290

RE0ERSED an SET ASIDE. The 6une 7, ')), Decision of the +abor &rbiter $ith respect to petitioner Renato Real is A//IRMED an this case is or ere REMANDED to the National +abor Relations "o((ission for the co(putation of petitioner3s bac9$a*es an attorne/3s fees in accor ance $ith this Decision. SO ORDERED.

THIRD DIVISION K?.R. No. %71)%). 6une '%, '))7L PHI+IPPIN! N&TION&+ #&NS, petitioner, vs. F+OR!N"! O. "&#&NS&?, respondent. D!"ISION P&N?&NI#&N, J.= The "ourt reiterates the basic polic/ that all Filipino $or9ers, $hether e(plo/e locall/ or overseas, en4o/ the protective (antle of Philippine labor an social le*islations. Our labor statutes (a/ not be ren ere ineffective b/ la$s or 4u *(ents pro(ul*ate , or stipulations a*ree upon, in a forei*n countr/. The "ase #efore us is a Petition for Revie$ on CertiorariE1F un er Rule 27 of the Rules of "ourt, see9in* to reverse an set asi e the 6ul/ %8, '))' DecisionE$F an the 6anuar/ '0, ')), ResolutionE&F of the "ourt of &ppeals -"&. in "&;?R SP No. 8A2),. The assaile Decision is(isse the "& Petition -file b/ herein petitioner., $hich ha sou*ht to reverse the National +abor Relations "o((ission -N+R".3s 6une '0, '))% Resolution,E'F affir(in* +abor &rbiter 6oel S. +ustria3s 6anuar/ %A, '))) Decision.E2F The assaile "& Resolution enie herein petitioner3s Motion for Reconsi eration. The Facts The facts are narrate b/ the "ourt of &ppeals as follo$s= MIn late %00A, Kherein Respon ent Florence "abansa*L arrive in Sin*apore as a tourist. She applie for e(plo/(ent, $ith the Sin*apore #ranch of the Philippine National #an9, a private ban9in* corporation or*aniDe an e5istin* un er the la$s of the Philippines, $ith principal offices at the PN# Financial "enter, Ro5as #oulevar , Manila. &t the ti(e, the Sin*apore PN# #ranch $as un er the hel( of Ruben ". Tobias, a la$/er, as ?eneral Mana*er, $ith the ran9 of Vice;Presi ent of the #an9. &t the ti(e, too, the #ranch Office ha t$o -'. t/pes of e(plo/ees= -a. e5patriates or the re*ular e(plo/ees, hire in Manila an assi*ne abroa inclu in* Sin*apore, an -b. locall/ - irect. hire . She applie for e(plo/(ent as #ranch "re it Officer, at a total (onthl/ pac9a*e of RS?2,7)).)), effective upon assu(ption of uties after approval. Ruben ". Tobias foun her e(inentl/ @ualifie an $rote on October '8, %00A, a letter to the Presi ent of the #an9 in Manila, reco((en in* the appoint(ent of Florence O. "abansa*, for the position. 555 555 555

MThe Presi ent of the #an9 $as i(presse $ith the cre entials of Florence O. "abansa* that he approve the reco((en ation of Ruben ". Tobias. She then file an W&pplication,3 $ith the Ministr/ of Manpo$er of the ?overn(ent of Sin*apore, for the issuance of an W!(plo/(ent Pass3 as an e(plo/ee of the Sin*apore PN# #ranch. Her application $as approve for a perio of t$o -'. /ears. MOn Dece(ber 1, %00A, Ruben ". Tobias $rote a letter to Florence O. "abansa* offerin* her a te(porar/ appoint(ent, as "re it Officer, at a basic salar/ of Sin*apore Dollars 2,7)).)), a (onth an , upon her successful co(pletion of her probation to be eter(ine solel/, b/ the #an9, she (a/ be e5ten e at the iscretion of the #an9, a per(anent appoint(ent an that her te(porar/ appoint(ent $as sub4ect to the follo$in* ter(s an con itions= W%. Cou $ill be on probation for a perio of three -,. consecutive (onths fro( the ate of /our assu(ption of ut/. W'. Cou $ill observe the #an93s rules an re*ulations an those that (a/ be a opte fro( ti(e to ti(e. W,. Cou $ill 9eep in strictest confi ence all (atters relate to transactions bet$een the #an9 an its clients. W2. Cou $ill evote /our full ti(e urin* business hours in pro(otin* the business an interest of the #an9. W7. Cou $ill not, $ithout prior $ritten consent of the #an9, be e(plo/e in an/$a/ for an/ purpose $hatsoever outsi e business hours b/ an/ person, fir( or co(pan/. W8. Ter(ination of /our e(plo/(ent $ith the #an9 (a/ be (a e b/ either part/ after notice of one -%. a/ in $ritin* urin* probation, one (onth notice upon confir(ation or the e@uivalent of one -%. a/3s or (onth3s salar/ in lieu of notice.3 MFlorence O. "abansa* accepte the position an assu(e office. In the (eanti(e, the Philippine !(bass/ in Sin*apore processe the e(plo/(ent contract of Florence O. "abansa* an , on March A, %000, she $as issue b/ the Philippine Overseas !(plo/(ent & (inistration, an WOverseas !(plo/(ent "ertificate,3 certif/in* that she $as a bona fi e contract $or9er for Sin*apore. 555 555 555 M#arel/ three -,. (onths in office, Florence O. "abansa* sub(itte to Ruben ". Tobias, on March 0, %000, her initial WPerfor(ance Report.3 Ruben ". Tobias $as so i(presse $ith the WReport3 that he (a e a notation an , on sai WReport3= W?OOD BORS.3 Ho$ever, in the evenin* of &pril %2, %000, $hile Florence O. "abansa* $as in the flat, $hich she an "ecilia &@uino, the &ssistant Vice;Presi ent an Deput/ ?eneral Mana*er of the #ranch an Rosanna Sar(iento, the "hief Dealer of the sai #ranch, rente , she $as tol b/ the t$o -'. that Ruben ". Tobias has as9e the( to tell Florence O. "abansa* to resi*n fro( her 4ob. Florence O. "abansa* $as perple5e at the su en turn of events an the runabout $a/ Ruben ". Tobias procure her resi*nation fro( the #an9. The ne5t a/, Florence O. "abansa* tal9e to Ruben ". Tobias an in@uire if $hat "ecilia &@uino an Rosanna Sar(iento ha tol her $as true. Ruben ". Tobias confir(e the veracit/ of the infor(ation, $ith the e5planation that her resi*nation $as i(perative as a Wcost;cuttin* (easure3 of the #an9. Ruben ". Tobias, li9e$ise, tol Florence O. "abansa* that the PN# Sin*apore #ranch $ill be sol or transfor(e into a re(ittance office an that, in either $a/, Florence O. "abansa* ha to resi*n fro( her e(plo/(ent. The (ore Florence O. "abansa* $as perple5e . She then as9e Ruben ". Tobias

that she be furnishe $ith a WFor(al & vice3 fro( the PN# Hea Office in Manila. Ho$ever, Ruben ". Tobias flatl/ refuse . Florence O. "abansa* i not sub(it an/ letter of resi*nation. MOn &pril %8, %000, Ruben ". Tobias a*ain su((one Florence O. "abansa* to his office an e(an e that she sub(it her letter of resi*nation, $ith the prete5t that he nee e a "hinese; spea9in* "re it Officer to penetrate the local (ar9et, $ith the infor(ation that a "hinese; spea9in* "re it Officer ha alrea / been hire an $ill be reportin* for $or9 soon. She $as $arne that, unless she sub(itte her letter of resi*nation, her e(plo/(ent recor $ill be ble(ishe $ith the notation WDISMISS!D3 sprea thereon. Bithout *ivin* an/ efinitive ans$er, Florence O. "abansa* as9e Ruben ". Tobias that she be *iven sufficient ti(e to loo9 for another 4ob. Ruben ". Tobias tol her that she shoul be Wout3 of her e(plo/(ent b/ Ma/ %7, %000. MHo$ever, on &pril %0, %000, Ruben ". Tobias a*ain su((one Florence O. "abansa* an a a(antl/ or ere her to sub(it her letter of resi*nation. She refuse . On &pril '), %000, she receive a letter fro( Ruben ". Tobias ter(inatin* her e(plo/(ent $ith the #an9. 555 555 555 MOn 6anuar/ %A, '))), the +abor &rbiter ren ere 4u *(ent in favor of the "o(plainant an a*ainst the Respon ents, the ecretal portion of $hich rea s as follo$s= WBH!R!FOR!, consi erin* the fore*oin* pre(ises, 4u *(ent is hereb/ ren ere fin in* respon ents *uilt/ of Ille*al is(issal an evoi of ue process, an are hereb/ or ere = %. To reinstate co(plainant to her for(er or substantiall/ e@uivalent position $ithout loss of seniorit/ ri*hts, benefits an privile*esF '. Soli aril/ liable to pa/ co(plainant as follo$s= a. To pa/ co(plainant her bac9$a*es fro( %8 &pril %000 up to her actual reinstate(ent. Her bac9$a*es as of the ate of the pro(ul*ation of this ecision a(ounte to S?D 2),7)).)) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(entF b. Mi ;/ear bonus in the a(ount of S?D ','7).)) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(entF c. &llo$ance for Sun a/ ban9in* in the a(ount of S?D %').)) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(entF . Monetar/ e@uivalent of leave cre its earne on Sun a/ ban9in* in the a(ount of S?D %,771.81 or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(entF e. Monetar/ e@uivalent of unuse sic9 leave benefits in the a(ount of S?D %,%7).8) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(ent. f. Monetar/ e@uivalent of unuse vacation leave benefits in the a(ount of S?D ,%0.A7 or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(ent. *. %,th (onth pa/ in the a(ount of S?D 2,7)).)) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(entF ,. Soli aril/ to pa/ co(plainant actual a(a*es in the a(ount of S?D %,01A.)) or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(ent, an (oral a(a*es in the a(ount of PhP ')),))).)), e5e(plar/ a(a*es in the a(ount of PhP %)),))).))F 2. To pa/ co(plainant the a(ount of S?D 7,),0.A% or its e@uivalent in Philippine "urrenc/ at the ti(e of pa/(ent, representin* attorne/3s fees. SO ORD!R!D.N E,F K!(phasis in the ori*inal.L

PN# appeale the labor arbiter3s Decision to the N+R". In a Resolution ate 6une '0, '))%, the "o((ission affir(e that Decision, but re uce the (oral a(a*es to P%)),))) an the e5e(plar/ a(a*es to P7),))). In a subse@uent Resolution, the N+R" enie PN#3s Motion for Reconsi eration. Rulin* of the "ourt of &ppeals In isposin* of the Petition for Certiorari, the "& note that petitioner ban9 ha faile to a uce in evi ence the Sin*aporean la$ suppose l/ *overnin* the latter3s e(plo/(ent "ontract $ith respon ent. The appellate court foun that the "ontract ha actuall/ been processe b/ the Philippine !(bass/ in Sin*apore an approve b/ the Philippine Overseas !(plo/(ent & (inistration -PO!&., $hich then use that "ontract as a basis for issuin* an Overseas !(plo/(ent "ertificate in favor of respon ent. &ccor in* to the "&, even thou*h respon ent secure an e(plo/(ent pass fro( the Sin*apore Ministr/ of !(plo/(ent, she i not thereb/ $aive Philippine labor la$s, or the 4uris iction of the labor arbiter or the N+R" over her "o(plaint for ille*al is(issal. In so oin*, neither i she sub(it herself solel/ to the Ministr/ of Manpo$er of Sin*apore3s 4uris iction over isputes arisin* fro( her e(plo/(ent. The appellate court further note that a cursor/ rea in* of the Ministr/3s letter $ill rea il/ sho$ that no such $aiver or sub(ission is state or i(plie . Finall/, the "& hel that petitioner ha faile to establish a 4ust cause for the is(issal of respon ent. The ban9 ha also faile to *ive her sufficient notice an an opportunit/ to be hear an to efen herself. The "& rule that she $as conse@uentl/ entitle to reinstate(ent an bac9 $a*es, co(pute fro( the ti(e of her is(issal up to the ti(e of her reinstate(ent. Hence, this Petition.EDF Issues Petitioner sub(its the follo$in* issues for our consi eration= M%. Bhether or not the arbitration branch of the N+R" in the National "apital Re*ion has 4uris iction over the instant controvers/F M'. Bhether or not the arbitration of the N+R" in the National "apital Re*ion is the (ost convenient venue or foru( to hear an eci e the instant controvers/F an M,. Bhether or not the respon ent $as ille*all/ is(isse , an therefore, entitle to recover (oral an e5e(plar/ a(a*es an attorne/3s fees.NE@F In a ition, respon ent assails, in her "o((ent,E-F the propriet/ of Rule 27 as the proce ural (o e for see9in* a revie$ of the "& Decision affir(in* the N+R" Resolution. Such issue eserves scant consi eration. Respon ent (isco(prehen s the "ourt3s iscourse in #t. Martin 4uneral 5ome v. &'(C,E11F $hich has in ee affir(e that the proper (o e of revie$ of N+R" ecisions, resolutions or or ers is b/ a special civil action for certiorari un er Rule 87 of the Rules of "ourt. The Supre(e "ourt an the "ourt of &ppeals have concurrent original 4uris iction over such petitions for certiorari. Thus, in observance of the octrine on the hierarch/ of courts, these petitions shoul be initiall/ file $ith the "&.E11F Ri*htl/, the ban9 elevate the N+R" Resolution to the "& b/ $a/ of a Petition for Certiorari. In see9in* a revie$ b/ this "ourt of the "& Decision ;; on @uestions of 4uris iction, venue an vali it/ of e(plo/(ent ter(ination ;; petitioner is li9e$ise correct in invo9in* Rule 27.E1$F It is true, ho$ever, that in a petition for revie$ on certiorari, the scope of the Supre(e "ourt3s 4u icial revie$ of ecisions of the "ourt of &ppeals is *enerall/ confine onl/ to errors of la$. It oes not e5ten to @uestions of fact. This octrine applies $ith *reater force in labor cases. Factual @uestions are for the labor tribunals to resolve. E1&F In the present case, the labor arbiter

an the N+R" have alrea / eter(ine the factual issues. Their fin in*s, $hich are supporte b/ substantial evi ence, $ere affir(e b/ the "&. Thus, the/ are entitle to *reat respect an are ren ere conclusive upon this "ourt, absent a clear sho$in* of palpable error or arbitrar/ isre*ar of evi ence.E1'F The "ourt3s Rulin* The Petition has no (erit. First Issue= Jurisdiction The 4uris iction of labor arbiters an the N+R" is specifie in &rticle '%1 of the +abor "o e as follo$s= M&RT. '%1. 6uris iction of +abor &rbiters an the "o((ission. P -a. !5cept as other$ise provi e un er this "o e the +abor &rbiters shall have ori*inal an e5clusive 4uris iction to hear an eci e, $ithin thirt/ -,). calen ar a/s after the sub(ission of the case b/ the parties for ecision $ithout e5tension, even in the absence of steno*raphic notes, the follo$in* cases involvin* all $or9ers, $hether a*ricultural or non;a*ricultural= %. <nfair labor practice casesF '. Ter(ination isputesF ,. If acco(panie $ith a clai( for reinstate(ent, those cases that $or9ers (a/ file involvin* $a*e, rates of pa/, hours of $or9 an other ter(s an con itions of e(plo/(ent 2. "lai(s for actual, (oral, e5e(plar/ an other for(s of a(a*es arisin* fro( the e(plo/er;e(plo/ee relationsF 7. "ases arisin* fro( an/ violation of &rticle '82 of this "o e, inclu in* @uestions involvin* the le*alit/ of stri9es an loc9outsF an 8. !5cept clai(s for !(plo/ees "o(pensation, Social Securit/, Me icare an (aternit/ benefits, all other clai(s, arisin* fro( e(plo/er;e(plo/ee relations, inclu in* those of persons in o(estic or househol service, involvin* an a(ount of e5cee in* five thousan pesos -P7,))).)). re*ar less of $hether acco(panie $ith a clai( for reinstate(ent. -b. The co((ission shall have e5clusive appellate 4uris iction over all cases eci e b/ +abor &rbiters. 555 555 5 5 5.N More specificall/, Section %) of R& A)2' rea s in part= MS!"TION %). Money Claims. X Not$ithstan in* an/ provision of la$ to the contrar/, the +abor &rbiters of the National +abor Relations "o((ission -N+R". shall have the ori*inal an e5clusive 4uris iction to hear an eci e, $ithin ninet/ -0). calen ar a/s after the filin* of the co(plaint, the clai(s arisin* out of an e(plo/er;e(plo/ee relationship or b/ virtue of an/ la$ or contract involvin* Filipino $or9ers for overseas eplo/(ent inclu in* clai(s for actual, (oral, e5e(plar/ an other for(s of a(a*es. 555 555 5 5 5N #ase on the fore*oin* provisions, labor arbiters clearl/ have original and exclusive 4uris iction over clai(s arisin* fro( e(plo/er;e(plo/ee relations, inclu in* termination disputes involvin* all $or9ers, a(on* $ho( are overseas Filipino $or9ers -OFB..E12F Be are not un(in ful of the fact that respon ent $as irectl/ hire , $hile on a tourist status in Sin*apore, b/ the PN# branch in that cit/ state. Prior to e(plo/in* respon ent, petitioner ha to

obtain an e(plo/(ent pass for her fro( the Sin*apore Ministr/ of Manpo$er. Securin* the pass $as a re*ulator/ re@uire(ent pursuant to the i((i*ration re*ulations of that countr/.E1,F Si(ilarl/, the Philippine *overn(ent re@uires non;Filipinos $or9in* in the countr/ to first obtain a local $or9 per(it in or er to be le*all/ e(plo/e here. That per(it, ho$ever, oes not auto(aticall/ (ean that the non;citiDen is thereb/ boun b/ local la$s onl/, as averre b/ petitioner. It oes not at all i(pl/ a $aiver of one3s national la$s on labor. &bsent an/ clear an convincin* evi ence to the contrar/, such per(it si(pl/ (eans that its hol er has a le*al status as a $or9er in the issuin* countr/. Note$orth/ is the fact that respon ent li9e$ise applie for an secure an Overseas !(plo/(ent "ertificate fro( the PO!& throu*h the Philippine !(bass/ in Sin*apore. The "ertificate, issue on March A, %000, eclare her a bona fi e contract $or9er for Sin*apore. <n er Philippine la$, this ocu(ent authoriDe her $or9in* status in a forei*n countr/ an entitle her to all benefits an processes un er our statutes. Thus, even assu(in* arguendo that she $as consi ere at the start of her e(plo/(ent as a M irect hireN *overne b/ an sub4ect to the la$s, co((on practices an custo(s prevailin* in Sin*aporeE1DF she subse@uentl/ beca(e a contract $or9er or an OFB $ho $as covere b/ Philippine labor la$s an policies upon certification b/ the PO!&. &t the ti(e her e(plo/(ent $as ille*all/ ter(inate , she alrea / possesse the PO!& e(plo/(ent "ertificate. Moreover, petitioner a (its that it is a Philippine corporation oin* business throu*h a branch office in Sin*apore.E1@F Si*nificantl/, respon ent3s e(plo/(ent b/ the Sin*apore branch office ha to be approve b/ #en4a(in P. Pal(a ?il,E1-F the presi ent of the ban9 $hose principal offices $ere in Manila. This circu(stance (ilitates a*ainst petitioner3s contention that respon ent $as Mlocall/ hire NF an totall/ M*overne b/ an sub4ect to the la$s, co((on practices an custo(sN of Sin*apore, not of the Philippines. Instea , $ith (ore reason oes this fact reinforce the presu(ption that respon ent falls un er the le*al efinition of migrant worker, in this case one eplo/e in Sin*apore. Hence, petitioner cannot escape the application of Philippine la$s or the 4uris iction of the N+R" an the labor arbiter. In an/ event, $e recall the follo$in* polic/ pronounce(ent of the "ourt in (oyal Crown %nternationale v. &'(C!E$1F M5 5 5. Bhether e(plo/e locall/ or overseas, all Filipino $or9ers en4o/ the protective (antle of Philippine labor an social le*islation, contract stipulations to the contrar/ not$ithstan in*. This pronounce(ent is in 9eepin* $ith the basic public polic/ of the State to affor protection to labor, pro(ote full e(plo/(ent, ensure e@ual $or9 opportunities re*ar less of se5, race or cree , an re*ulate the relations bet$een $or9ers an e(plo/ers. For the State assures the basic ri*hts of all $or9ers to self;or*aniDation, collective bar*ainin*, securit/ of tenure, an 4ust an hu(ane con itions of $or9 K&rticle , of the +abor "o e of the PhilippinesF #ee also Section %A, &rticle II an Section ,, &rticle HIII, %0A1 "onstitutionL. This rulin* is li9e$ise ren ere i(perative b/ &rticle %1 of the "ivil "o e $hich states that la$s W$hich have for their ob4ect public or er, public polic/ an *oo custo(s shall not be ren ere ineffective b/ la$s or 4u *(ents pro(ul*ate , or b/ eter(ination or conventions a*ree upon in a forei*n countr/.3N Secon Issue= roper -enue Section %-a. of Rule IV of the N+R" Rules of Proce ure rea s= MSection %. Venue P -a. &ll cases $hich +abor &rbiters have authorit/ to hear an eci e (a/ be file in the Re*ional &rbitration #ranch havin* 4uris iction over the $or9place of the co(plainantEpetitionerF Provi e , ho$ever that cases of Overseas Filipino Bor9er -OFB. shall

be file before the Re*ional &rbitration #ranch $here the co(plainant resi es or $here the principal office of the respon entEe(plo/er is situate , at the option of the co(plainant. MFor purposes of venue, $or9place shall be un erstoo as the place or localit/ $here the e(plo/ee is re*ularl/ assi*ne $hen the cause of action arose. It shall inclu e the place $here the e(plo/ee is suppose to report bac9 after a te(porar/ etail, assi*n(ent or travel. In the case of fiel e(plo/ees, as $ell as a(bulant or itinerant $or9ers, their $or9place is $here the/ are re*ularl/ assi*ne , or $here the/ are suppose to re*ularl/ receive their salariesE$a*es or $or9 instructions fro(, an report the results of their assi*n(ent to their e(plo/ers.N <n er the MMi*rant Bor9ers an Overseas Filipinos &ct of %007N -R& A)2'., a migrant worker Mrefers to a person $ho is to be en*a*e , is en*a*e or has been en*a*e in a re(unerate activit/ in a state of $hich he or she is not a le*al resi entF to be use interchan*eabl/ $ith overseas Filipino $or9er.NE$1F <n eniabl/, respon ent $as e(plo/e b/ petitioner in its branch office in Sin*apore. & (itte l/, she is a Filipino an not a le*al resi ent of that state. She thus falls $ithin the cate*or/ of M(i*rant $or9erN or Moverseas Filipino $or9er.N &s such, it is her option to choose the venue of her "o(plaint a*ainst petitioner for ille*al is(issal. The la$ *ives her t$o choices= -%. at the Re*ional &rbitration #ranch -R&#. $here she resi es or -'. at the R&# $here the principal office of her e(plo/er is situate . Since her is(issal b/ petitioner, respon ent has returne to the Philippines ;; specificall/ to her resi ence at Filinvest II, IueDon "it/. Thus, in filin* her "o(plaint before the R&# office in IueDon "it/, she has (a e a vali choice of proper venue. Thir Issue= %llegal )ismissal The appellate court $as correct in hol in* that respon ent $as alrea / a re*ular e(plo/ee at the ti(e of her is(issal, because her three;(onth probationar/ perio of e(plo/(ent ha alrea / en e . This rulin* is in accor ance $ith &rticle 'A% of the +abor "o e= M&n e(plo/ee $ho is allo$e to $or9 after a probationar/ perio shall be consi ere a re*ular e(plo/ee.N In ee , petitioner reco*niDe respon ent as such at the ti(e it is(isse her, b/ *ivin* her one (onth3s salar/ in lieu of a one;(onth notice, consistent $ith provision No. 8 of her e(plo/(ent "ontract. &otice and 5earing &ot Complied =ith &s a re*ular e(plo/ee, respon ent $as entitle to all ri*hts, benefits an privile*es provi e un er our labor la$s. One of her fun a(ental ri*hts is that she (a/ not be is(isse $ithout ue process of la$. The t$in re@uire(ents of notice an hearin* constitute the essential ele(ents of proce ural ue process, an neither of these ele(ents can be eli(inate $ithout runnin* afoul of the constitutional *uarantee.E$$F In is(issin* e(plo/ees, the e(plo/er (ust furnish the( t$o $ritten notices= %. one to apprise the( of the particular acts or o(issions for $hich their is(issal is sou*htF an '. the other to infor( the( of the ecision to is(iss the(. &s to the re@uire(ent of a hearin*, its essence lies si(pl/ in the opportunit/ to be hear .E$&F The evi ence in this case is cr/stal;clear. Respon ent $as not notifie of the specific act or o(ission for $hich her is(issal $as bein* sou*ht. Neither $as she *iven an/ chance to be hear , as re@uire b/ la$. &t an/ rate, even if she $ere *iven the opportunit/ to be hear , she coul not have efen e herself effectivel/, for she 9ne$ no cause to ans$er to.

&ll that petitioner ten ere to respon ent $as a notice of her e(plo/(ent ter(ination effective the ver/ sa(e a/, to*ether $ith the e@uivalent of a one;(onth pa/. This "ourt has alrea / hel that nothin* in the la$ *ives an e(plo/er the option to substitute the re@uire prior notice an opportunit/ to be hear $ith the (ere pa/(ent of ,) a/s3 salar/.E$'F Bell;settle is the rule that the e(plo/er shall be sanctione for nonco(pliance $ith the re@uire(ents of, or for failure to observe, ue process that (ust be observe in is(issin* an e(plo/ee.E$2F &o -alid Cause for )ismissal Moreover, &rticles 'A',E$,F 'A,E$DF an 'A2E$@F of the +abor "o e provi e the vali *roun s or causes for an e(plo/ee3s is(issal. The e(plo/er has the bur en of provin* that it $as one for an/ of those 4ust or authoriDe causes. The failure to ischar*e this bur en (eans that the is(issal $as not 4ustifie , an that the e(plo/ee is entitle to reinstate(ent an bac9 $a*es. E$-F Notabl/, petitioner has not asserte an/ of the *roun s provi e b/ la$ as a vali reason for ter(inatin* the e(plo/(ent of respon ent. It (erel/ insists that her is(issal $as vali l/ effecte pursuant to the provisions of her e(plo/(ent "ontract, $hich she ha voluntaril/ a*ree to be boun to. Trul/, the contractin* parties (a/ establish such stipulations, clauses, ter(s an con itions as the/ $ant, an their a*ree(ent $oul have the force of la$ bet$een the(. Ho$ever, petitioner overloo9s the @ualification that those ter(s an con itions a*ree upon (ust not be contrar/ to la$, (orals, custo(s, public polic/ or public or er.E&1F &s e5plaine earlier, the e(plo/(ent "ontract bet$een petitioner an respon ent is *overne b/ Philippine labor la$s. Hence, the stipulations, clauses, an ter(s an con itions of the "ontract (ust not contravene our labor la$ provisions. Moreover, a contract of e(plo/(ent is i(bue $ith public interest. The "ourt has ti(e an ti(e a*ain re(in e parties that the/ Mare not at libert/ to insulate the(selves an their relationships fro( the i(pact of labor la$s an re*ulations b/ si(pl/ contractin* $ith each other.NE&1F &lso, $hile a contract is the la$ bet$een the parties, the provisions of positive la$ that re*ulate such contracts are ee(e inclu e an shall li(it an *overn the relations bet$een the parties.E&$F #asic in our 4urispru ence is the principle that $hen there is no sho$in* of an/ clear, vali , an le*al cause for the ter(ination of e(plo/(ent, the la$ consi ers the (atter a case of ille*al is(issal.E&&F $wards for )amages Justified Finall/, (oral a(a*es are recoverable $hen the is(issal of an e(plo/ee is atten e b/ ba faith or constitutes an act oppressive to labor or is one in a (anner contrar/ to (orals, *oo custo(s or public polic/.E&'F &$ar s for (oral an e5e(plar/ a(a*es $oul be proper if the e(plo/ee $as harasse an arbitraril/ is(isse b/ the e(plo/er.E&2F In affir(in* the a$ar s of (oral an e5e(plar/ a(a*es, $e @uote $ith approval the follo$in* ratiocination of the labor arbiter= MThe recor s also sho$ that Krespon ent3sL is(issal $as effecte b/ Kpetitioners3L capricious an hi*h;han e (anner, anti;social an oppressive, frau ulent an in ba faith, an contrar/ to (orals, *oo custo(s an public polic/. #a faith an frau are sho$n in the acts co((itte b/ KpetitionersL before, urin* an after Krespon ent3sL is(issal in a ition to the (anner b/ $hich

she $as is(isse . First, Krespon entL $as pressure to resi*n for t$o ifferent an contra ictor/ reasons, na(el/, cost;cuttin* an the nee for a "hineseK;Lspea9in* cre it officer, for $hich no $ritten a vice $as *iven espite co(plainant3s re@uest. Such $averin* stance or vacillatin* position in icates ba faith an a ishonest purpose. Secon , she $as e(plo/e on account of her @ualifications, e5perience an rea iness for the position of cre it officer an pressure to resi*n a (onth after she $as co((en e for her *oo $or9. Thir , the e(an for Krespon ent3sL instant resi*nation on %0 &pril %000 to *ive $a/ to her replace(ent $ho $as alle*e l/ reportin* soonest, is $hi(sical, frau ulent an in ba faith, because on %8 &pril %000 she $as *iven a perio of KsicL until %7 Ma/ %000 $ithin $hich to leave. Fourth, the pressures (a e on her to resi*n $ere hi*hl/ oppressive, anti;social an cause her absolute torture, as KpetitionersL isre*ar e her situation as an overseas $or9er a$a/ fro( ho(e an fa(il/, $ith no prospect for another 4ob. She $as not even provi e $ith a return trip fare. Fifth, the notice of ter(ination is an utter (anifestation of ba faith an $hi( as it totall/ isre*ar s Krespon ent3sL ri*ht to securit/ of tenure an ue process. Such notice to*ether $ith the e(an s for Krespon ent3sL resi*nation contravenes the fun a(ental *uarantee an public polic/ of the Philippine *overn(ent on securit/ of tenure. MKRespon entL li9e$ise establishe that as a pro5i(ate result of her is(issal an prior e(an s for resi*nation, she suffere an continues to suffer (ental an*uish, fri*ht, serious an5iet/, bes(irche reputation, $oun e feelin*s, (oral shoc9 an social hu(iliation. Her stan in* in the social an business co((unit/ as $ell as prospects for e(plo/(ent $ith other entities have been a versel/ affecte b/ her is(issal. KPetitionersL are thus liable for (oral a(a*es un er &rticle ''%1 of the "ivil "o e. 555 555 555 MKPetitionersL li9e$ise acte in a $anton, oppressive or (alevolent (anner in ter(inatin* Krespon ent3sL e(plo/(ent an are therefore liable for e5e(plar/ a(a*es. This shoul serve KsicL as protection to other e(plo/ees of KpetitionerL co(pan/, an b/ $a/ of e5a(ple or correction for the public *oo so that persons si(ilarl/ (in e as KpetitionersL $oul be eterre fro( co((ittin* the sa(e acts.NE&,F The "ourt also affir(s the a$ar of attorne/3s fees. It is settle that $hen an action is institute for the recover/ of $a*es, or $hen e(plo/ees are force to liti*ate an conse@uentl/ incur e5penses to protect their ri*hts an interests, the *rant of attorne/3s fees is le*all/ 4ustifiable.E&DF -.ERE/ORE, the Petition is )"&%") an the assaile Decision an Resolution $44%(M"). "osts a*ainst petitioner. SO ORD!R!D. San oval;?utierreD, "orona, "arpio;Morales, an ?arcia, 66., concur.
6oday is 8unday, +ecember 11, $11&

Republic of the Philippines SUPREME COURT

Manila THIRD DIVISION G.R. No. 128024 May @, 2000 2E2IANO M. 2AKE=, petitioner, vs. .ON. DO-NE< C. 0ALDE0ILLA an ORO MARAETING, INC., respon ents. GON=AGA1RE<ES, J.: The or ers of respon ent 4u *e % ate 6une '), %008 an October %8, %008, ta9in* 4uris iction over an action for a(a*es file b/ an e(plo/er a*ainst its is(isse e(plo/ee, are assaile in this petition for certiorari un er Rule 87 of the Rules of "ourt for havin* been issue in *rave abuse of iscretion. Petitioner $as the sales operations (ana*er of private respon ent in its branch in Ili*an "it/. In %00,, private respon ent :in efinitel/ suspen e : petitioner an the latter file a co(plaint for ille*al is(issal $ith the National +abor Relations "o((ission -:N+R":. in Ili*an "it/. In a ecision ate 6ul/ 1, %002, +abor &rbiter Nico e(us ?. Palan*an foun petitioner to have been ille*all/ is(isse an or ere the pa/(ent of separation pa/ in lieu of reinstate(ent, an of bac9$a*es an attorne/Js fees. The ecision $as appeale to the N+R", $hich is(isse the sa(e for havin* been file out of ti(e. ' !levate b/ petition for certiorari before this "ourt, the case $as is(isse on technical *roun s,F ho$ever, the "ourt also pointe out that even if all the proce ural re@uire(ents for the filin* of the petition $ere (et, it $oul still be is(isse for failure to sho$ *rave abuse of iscretion on the part of the N+R". On Nove(ber %,, %007, private respon ent file a co(plaint for a(a*es before the Re*ional Trial "ourt -:RT":. of Misa(is Oriental, oc9ete as "ivil "ase No. 07;772, $hich pra/e for the pa/(ent of the follo$in*= a. P1)0,'%1.01 plus %'> interest as loss of profit an Eor unearne inco(e of three /earsF b. P%%0,1)).)) plus %'> interest as esti(ate cost of supplies, facilities, properties, space, etc. for three /earsF c. P7,))).)) as initial e5penses of liti*ationF an . P'7,))).)) as attorne/Js fees. 2 On 6anuar/ ,), %008, petitioner file a (otion to is(iss the above co(plaint. He interpose in the court belo$ that the action for a(a*es, havin* arisen fro( an e(plo/er;e(plo/ee relationship, $as s@uarel/ un er the e5clusive ori*inal 4uris iction of the N+R" un er &rticle '%1-a., para*raph 2 of the +abor "o e an is barre b/ reason of the final 4u *(ent in the labor case. He accuse private respon ent of splittin* causes of action, statin* that the latter coul ver/ $ell have inclu e the instant clai( for a(a*es in its counterclai( before the +abor &rbiter. He also pointe out that the civil action of private respon ent is an act of foru(;shoppin* an $as (erel/ resorte to after a failure to obtain a favorable ecision $ith the N+R". Rulin* upon the (otion to is(iss, respon ent 4u *e issue the herein @uestione Or er, $hich su((ariDe the basis for private respon entJs action for a(a*es in this (anner= Para*raph 7 of the co(plaint alle*e that the efen ant violate the plaintiffJs polic/ re= His business in his branch at Ili*an "it/ $herein efen ant $as the Sales Operations Mana*er, an para*raph 1 of the sa(e co(plaint briefl/ narrate the modus operandi of efen ant, @uote herein= Defen ant canvasse custo(ers personall/ or throu*h sales(en of plaintiff $hich $ere hire or recruite b/ hi(. If sai custo(er eci e to bu/ ite(s fro( plaintiff on install(ent basis, efen ant, $ithout the 9no$le *e of sai custo(er an plaintiff, $oul bu/ the ite(s on cash basis at e5;factor/ price, a privile*e not *iven to custo(ers, an thereafter re@uire the custo(er to si*n pro(issor/ notes an other ocu(ents usin* the na(e an propert/ of plaintiff, purportin* that sai custo(er purchase the

ite(s fro( plaintiff on install(ent basis. Thereafter, efen ant collecte the install(ent pa/(ents either personall/ or throu*h Venus +oDano, a ?roup Sales Mana*er of plaintiff but also utiliDe b/ hi( as secretar/ in his o$n business for collectin* an receivin* of install(ents, purporte l/ for the plaintiff but in realit/ on his o$n account or business. The collection an receipt of pa/(ents $ere (a e insi e the Ili*an "it/ branch usin* plaintiffJs facilities, propert/ an (anpo$er. That accor in*l/ plaintiffJs sales ecrease an re uce to a consi erable e5tent the profits $hich it $oul have earne . 7 In eclarin* itself as havin* 4uris iction over the sub4ect (atter of the instant controvers/, respon ent court state = & perusal of the co(plaint $hich is for a(a*es oes not as9 for an/ relief un er the +abor "o e of the Philippines. It see9s to recover a(a*es as re ress for efen antJs breach of his contractual obli*ation to plaintiff $ho $as a(a*e an pre4u ice . The "ourt believes such cause of action is $ithin the real( of civil la$, an 4uris iction over the controvers/ belon*s to the re*ular courts. Bhile see(in*l/ the cause of action arose fro( e(plo/er;e(plo/ee relations, the e(plo/erJs clai( for a(a*es is *roun e on the nefarious activities of efen ant causin* a(a*e an pre4u ice to plaintiff as alle*e in para*raph 1 of the co(plaint. The "ourt believes that there $as a breach of a contractual obli*ation, $hich is intrinsicall/ a civil ispute. The aver(ents in the co(plaint re(ove the controvers/ fro( the covera*e of the +abor "o e of the Philippines an brou*ht it $ithin the purvie$ of civil la$. -Sin*apore &irlines, +t . Vs. PaYo, %'' S"R& 81%.. . . . 8 PetitionerJs (otion for reconsi eration of the above Or er $as enie for lac9 of (erit on October %8, %008. Hence, this petition. &ctin* on petitionerJs pra/er, the Secon Division of this "ourt issue a Te(porar/ Restrainin* Or er -:TRO:. on March 7, %001, en4oinin* respon ents fro( further procee in* $ith "ivil "ase No. 07;772 until further or ers fro( the "ourt. #/ $a/ of assi*n(ent of errors, the petition reiterates the *roun s raise in the Motion to Dis(iss ate 6anuar/ ,), %008, na(el/, lac9 of 4uris iction over the sub4ect (atter of the action, res @udicata, splittin* of causes of action, an foru(; shoppin*. The eter(inin* issue, ho$ever, is the issue of 4uris iction. &rt. '%1-a., para*raph 2 of the +abor "o e, $hich $as alrea / in effect at the ti(e of the filin* of this case, rea s= &rt. '%1. Jurisdiction of 'abor $rbiters and the Commission. X -a. !5cept as other$ise provi e un er this "o e the +abor &rbiters shall have ori*inal an e5clusive 4uris iction to hear an eci e, $ithin thirt/ -,). calen ar a/s after the sub(ission of the case b/ the parties for ecision $ithout e5tension, even in the absence of steno*raphic notes, the follo$in* cases involvin* all $or9ers, $hether a*ricultural or non;a*ricultural= 555 555 555 2. "lai(s for actual, (oral, e5e(plar/ an other for(s of a(a*es arisin* fro( the e(plo/er;e(plo/ee relationsF 555 555 555 The above provisions are a result of the a(en (ent b/ Section 0 of Republic &ct -:R.&.:. No. 81%7, $hich too9 effect on March '%, %0A0, an $hich put to rest the earlier confusion as to $ho bet$een +abor &rbiters an re*ular courts ha 4uris iction over clai(s for a(a*es as bet$een e(plo/ers an e(plo/ees. It $ill be recalle that /ears prior to R.&. 81%7, 4uris iction over all (one/ clai(s of $or9ers, inclu in* clai(s for a(a*es, $as ori*inall/ lo *e $ith the +abor &rbiters an the N+R" b/ &rticle '%1 of the +abor "o e. 1 On Ma/ %, %010, ho$ever, Presi ential Decree -:P.D.:. No. %,81 a(en e sai &rticle '%1 to the effect that :Re*ional Directors shall not in orse an +abor &rbiters shall not entertain clai(s for (oral or other for(s of a(a*es.: A This li(itation in 4uris iction, ho$ever, laste onl/ briefl/ since on Ma/ %, %0A), P.D. No. %80% nullifie P.D. No. %,81 an restore &rticle '%1 of the +abor "o e al(ost to its ori*inal for(. Presentl/, an as a(en e b/ R.&. 81%7, the 4uris iction of +abor &rbiters an the N+R" in &rticle '%1 is co(prehensive enou*h to inclu e clai(s for all for(s of a(a*es :arisin* fro( the e(plo/er;

e(plo/ee relations: Bhereas this "ourt in a nu(ber of occasions ha applie the 4uris ictional provisions of &rticle '%1 to clai(s for a(a*es file b/ e(plo/ees, 0 $e hol that b/ the esi*natin* clause :arisin* fro( the e(plo/er;e(plo/ee relations: &rticle '%1 shoul appl/ $ith e@ual force to the clai( of an e(plo/er for actual a(a*es a*ainst its is(isse e(plo/ee, $here the basis for the clai( arises fro( or is necessaril/ connecte $ith the fact of ter(ination, an shoul be entere as a counterclai( in the ille*al is(issal case. !ven un er Republic &ct No. A17 -the :In ustrial Peace &ct:, no$ co(pletel/ superse e b/ the +abor "o e., 4urispru ence $as settle that $here the plaintiffJs cause of action for a(a*es arose out of, or $as necessaril/ intert$ine $ith, an alle*e unfair labor practice co((itte b/ the union, the 4uris iction is e5clusivel/ $ith the -no$ efunct. "ourt of In ustrial Relations, an the assu(ption of 4uris iction of re*ular courts over the sa(e is a nullit/. %) To allo$ other$ise $oul be :to sanction split 4uris iction, $hich is pre4u icial to the or erl/ a (inistration of 4ustice.: %% Thus, even after the enact(ent of the +abor "o e, $here the a(a*es separatel/ clai(e b/ the e(plo/er $ere alle*e l/ incurre as a conse@uence of stri9e or pic9etin* of the union, such co(plaint for a(a*es is eepl/ roote fro( the labor ispute bet$een the parties, an shoul be is(isse b/ or inar/ courts for lac9 of 4uris iction. &s hel b/ this "ourt in &ational 4ederation of 'abor vs. "isma, %'1 S"R& 2%0= "ertainl/, the present +abor "o e is even (ore co((itte to the vie$ that on polic/ *roun s, an e@uall/ so in the interest of *reater pro(ptness in the isposition of labor (atters, a court is spare the often onerous tas9 of eter(inin* $hat essentiall/ is a factual (atter, na(el/, the a(a*es that (a/ be incurre b/ either labor or (ana*e(ent as a result of isputes or controversies arisin* fro( e(plo/er;e(plo/ee relations. There is no (ista9in* the fact that in the case before us, private respon entJs clai( a*ainst petitioner for actual a(a*es arose fro( a prior e(plo/er;e(plo/ee relationship. In the first place, private respon ent $oul not have ta9en issue $ith petitionerJs : oin* business of his o$n: ha the latter not been concurrentl/ its e(plo/ee. Thus, the a(a*es alle*e in the co(plaint belo$ are= first, those a(ountin* to lost profits an earnin*s ue to petitionerJs aban on(ent or ne*lect of his uties as sales (ana*er, havin* been other$ise preoccupie b/ his unauthoriDe install(ent sale sche(eF an secon , those e@uivalent to the value of private respon entJs propert/ an supplies $hich petitioner use in con uctin* his :business :. Secon , an (ore i(portantl/, to allo$ respon ent court to procee $ith the instant action for a(a*es $oul be to open ane$ the factual issue of $hether petitionerJs install(ent sale sche(e resulte in business losses an the issipation of private respon entJs propert/. This issue has been ul/ raise an rule upon in the ille*al is(issal case, $here private respon ent brou*ht up as a efense the sa(e alle*ations no$ e(bo ie in his co(plaint, an presente evi ence in support thereof. The +abor &rbiter, ho$ever, foun to the contrar/ X that no business losses (a/ be attribute to petitioner as in fact, it $as b/ reason of petitionerJs install(ent plan that the sales of the Ili*an branch of private respon ent -$here petitioner $as e(plo/e . reache its hi*hest recor level to the e5tent that petitioner $as a$ar e the %0A0 Fiel Sales &chieve(ent &$ar in reco*nition of his e5ceptional sales perfor(ance, an that the install(ent sche(e $as in fact $ith the 9no$le *e of the (ana*e(ent of the Ili*an branch of private respon ent. %' In other $or s, the issue of actual a(a*es has been settle in the labor case, $hich is no$ final an e5ecutor/. Still on the prospect of re;openin* factual issues alrea / resolve b/ the labor court, it (a/ help to refer to that perio fro( %010 to %0A) $hen 4uris iction over e(plo/(ent;pre icate actions for a(a*es vacillate fro( labor tribunals to re*ular courts, an bac9 to labor tribunals. In "bon vs. de 8uzman, %%, S"R& 7', % this "ourt iscusse = The la$(a9ers in ivestin* the +abor &rbiters an the N+R" of 4uris iction to a$ar (oral an other for(s of a(a*es in labor cases coul have assu(e that the +abor &rbitersJ position;paper proce ure of ascertainin* the facts in ispute (i*ht not be an a e@uate tool for arrivin* at a 4ust an accurate assess(ent of a(a*es, as istin*uishe fro( bac9$a*es an separation pa/, an that the trial proce ure in the "ourt of First Instance $oul be a (ore effective (eans of eter(inin* such a(a*es. . . . !vi entl/, the la$(a9in* authorit/ ha secon thou*hts about eprivin* the +abor &rbiters an the

N+R" of the 4uris iction to a$ar a(a*es in labor cases because that setup $oul (ean duplicity of suits, splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and the same claim. So, on Ma/ %, %0A), Presi ential Decree No. %80% -$hich substantiall/ reenacte &rticle '%1 in its ori*inal for(. nullifie Presi ential Decree No. %,81 an restore to the +abor &rbiter an the N+R" their 4uris iction to a$ar all 9in s of a(a*es in cases arisin* fro( e(plo/er;e(plo/ee relations. . . . -!(phasis supplie .. "learl/, respon ent courtJs ta9in* 4uris iction over the instant case $oul brin* about precisel/ the har( that the la$(a9ers sou*ht to avoi in a(en in* the +abor "o e to restore 4uris iction over clai(s for a(a*es of this nature to the N+R". This is, of course, to istin*uish fro( cases of actions for a(a*es $here the e(plo/er;e(plo/ee relationship is (erel/ inci ental an the cause of action procee s fro( a ifferent source of obli*ation. Thus, the 4uris iction of re*ular courts $as uphel $here the a(a*es, clai(e for $ere base on tort %2, (alicious prosecution %7, or breach of contract, as $hen the clai(ant see9s to recover a ebt fro( a for(er e(plo/ee %8 or see9s li@ui ate a(a*es in enforce(ent of a prior e(plo/(ent contract. %1 Neither can $e uphol the reasonin* of respon ent court that because the resolution of the issues presente b/ the co(plaint oes not entail application of the +abor "o e or other labor la$s, the ispute is intrinsicall/ civil. &rticle '%1-a. of the +abor "o e, as a(en e , clearl/ besto$s upon the +abor &rbiter ori*inal an e5clusive 4uris iction over clai(s for a(a*es arisin* fro( e(plo/er;e(plo/ee relations X in other $or s, the +abor &rbiter has 4uris iction to a$ar not onl/ the reliefs provi e b/ labor la$s, but also a(a*es *overne b/ the "ivil "o e. %A Thus, it is obvious that private respon entJs re(e / is not in the filin* of this separate action for a(a*es, but in properl/ perfectin* an appeal fro( the +abor &rbiterJs ecision. Havin* lost the ri*ht to appeal on *roun s of unti(eliness, the ecision in the labor case stan s as a final 4u *(ent on the (erits, an the instant action for a(a*es cannot ta9e the place of such lost appeal. Respon ent court clearl/ havin* no 4uris iction over private respon entJs co(plaint for a(a*es, $e $ill no lon*er pass upon petitionerJs other assi*n(ents of error. BH!R!FOR!, the Petition is ?R&NT!D, an the co(plaint in "ivil "ase No. 07;772 before #ranch ,0 of the Re*ional Trial "ourt of Misa(is Oriental is hereb/ DISMISS!D. No pronounce(ent as to costs. SO ORD!R!D. Melo, -itug and anganiban, JJ., concur. urisima, J., abroad * no part.