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Present:
- versus -
ROMIL V. CUAMBOT,
Respondent.
Promulgated:
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When respondent asked Motairi for his salary, he was told that since a
huge sum had been paid to the agency for his recruitment and deployment, he
would only be paid after the said amount had already been recovered. He was
also told that his salary was only 800 Saudi Riyals (SAR) per month, in contrast
to the SAR1200 that was promised him under the contract. Motairiwarned that
he would be sent home the next time he demanded for his salary. Due to his
familys incessant letters asking for financial support, however, respondent
mustered the courage to again demand for his salaries during the second week
of July 1996. True to his word, Motairi ordered him to pack up and leave. He
was able to purchase his plane ticket only through the contributions of his
fellow Filipinos. Motairi even accompanied him to the airport when he bought
his plane ticket. In the meantime, his wife had been making inquiries about him.
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reply[10] from the Riyadh LBP representative requesting for contact numbers to
facilitate communication with respondent.
Respondent further claimed that his employers actuations violated
Articles 83 and 103 of the Labor Code. While he was entitled to terminate his
employment in accordance with Article 285 (b) due to the treatment he
received, he did not exercise this right. He was nevertheless illegally dismissed
by his employer when he tried to collect the salaries due him. Respondent
further claimed that the reduction of his monthly salary from SAR1,200 to
SAR800 and petitioners failure to furnish him a copy of the employment
contract before his departure amounted to prohibited practices under Article 34
(i) and (k) of the Labor Code.
Respondent prayed for the following relief:
(2)
(3)
(4)
(5)
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(1)
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In its position paper, petitioner alleged that respondent was deployed for
overseas work as car body builder for its Principal Golden Wings Est. for
General Services and Recruitment in Saudi Arabia for an employment period of
24 months, with a monthly salary of US$400.00.[12] It insisted that respondent
was religiously paid his salaries as they fell due. After working for a little over
seven months, respondent pleaded with his employer to be allowed to return
home since there were family problems he had to settle personally. Respondent
even submitted a resignation letter[13] dated July 23, 1995.
To support its claim that respondent had been paid his salaries as they fell
due, petitioner submitted in evidence copies of seven payslip[14] authenticated
by the Philippine Labor Attach in Riyadh, Saudi Arabia. Petitioner asserted
that since respondent only worked for a little over seven months and did not
finish his contract, he should pay the cost of the plane ticket. It pointed out that
according to the standard employment contract, the employer would provide the
employee with a free plane ticket for the flight home only if the worker finishes
his contract.
Respondent countered that his signatures in the purported payslips were
forged. He denied having received his salaries for the said period, except only
for the SAR100 as monthly allowance. He pointed out that the authentication of
the alleged pay slips and resignation letter before the labor attach in Riyadh is
immaterial, since the documents themselves were falsified.
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cashier, to prepare the resignation letter for him. While it is the employer who
fills up the pay slip, respondent could have asked another employee to prepare
the resignation letter, particularly if he (respondent) did not know how to phrase
it himself. Moreover, it could not be presumed that the payslip and resignation
letter were prepared by one and the same person, as respondent is not a
handwriting expert. Petitioner further pointed out that respondent has different
signatures, not only in the pleadings submitted before the Labor Arbiter, but
also in respondents personal documents.
On January 30, 1997, Labor Arbiter Jose De Vera ruled in favor of
respondent on the following ratiocination:
What convinced this Arbitration Branch about the unreliability of the
complainants signature in the payslip is the close semblance of the
handwritings in the payslips and the handwritings in the purported handwritten
resignation of the complainant. It unmistakably appears to this Arbitration
Branch that the payslips as well as the handwritten letter-resignation were
prepared by one and the same person. If it were true that the handwritten
letter-resignation was prepared by the complainant, it follows that he also
prepared the payslips because the handwritings in both documents are exactly
the same and identical. But [this] is quite unbelievable that complainant
himself as the payee prepared the payslips with the corresponding entries
therein in his own handwriting. Under the circumstances, the only logical
conclusion is that both the payslips and the handwritten letter-resignation were
prepared and signed by one and the same person definitely not the
complainant.
With the foregoing findings and conclusions, this Arbitration Branch is
of the well-considered view that complainant was not paid his salaries
from January 5, 1995 up to July 23, 1995 and that he was unjustifiably
dismissed from his employment when he repeatedly demanded for his unpaid
salaries. Respondents are, therefore, liable to pay the complainant his salaries
from January 5, 1995 up to July 23, 1995 which amount to US$2,640.00
(US$400 x 6.6 mos). Further, respondents are also liable to the complainant
for the latters salaries for the unexpired portion of his contract up to the
maximum of three (3) months pursuant to Section 10 of RA 8042, which
amount to US$1,200.00. Respondents must also refund complainants plane
fare for his return flight. And finally, being compelled to litigate his claims, it
is but just and x x x that complainant must be awarded attorneys fees at the
rate of ten percent (10%) of the judgment award.
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Respondent appealed the decision before the NLRC, alleging that the
Labor Arbiter failed to consider the genuineness of the signature which appears
in the purported resignation letter dated July 23, 1995, as well as those that
appear in the seven pay slips. He insisted that these documents should have
been endorsed to the National Bureau of Investigation Questioned Documents
Division or the Philippine National Police Crime Laboratory for calligraphy
examination.
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Petitioner points out that most of the signatures which Labor Arbiter De
Vera used as standards for comparison with the signatures appearing on the
questioned documents were those in the pleadings filed by the respondent long
after the questioned documents had been supposedly signed by him. It claims
that respondent affixed his signatures on the pleadings in question and
intentionally made them different from his true signature so that he could later
on conveniently impugn their authenticity. Petitioner claims that had Labor
Arbiter De Vera taken pains in considering these circumstances, he could have
determined that respondent may have actually intentionally given a different
name and slightly changed his signature in his application, which name and
signature he used when he signed the questioned letter of resignation
and payslips, only to conveniently disown the same when he came back to the
country to file the present case.[23] Thus, according to petitioner, the CA clearly
committed a palpable error of law when it reversed the ruling of the NLRC,
which in turn affirmed Labor Arbiter Portillos decision.
For his part, respondent contends that petitioners arguments were already
raised in the pleadings filed before Labor Arbiter De Vera which had already
been passed upon squarely in the Labor Arbiters Decision of January 30, 1997.
The determinative issues in this case are essentially factual in nature - (a)
whether the signatures of respondent in the payslipsare mere forgeries, and (b)
whether respondent executed the resignation letter. Generally, it is not our
function to review findings of fact. However, in case of a divergence in the
findings and conclusions of the NLRC on the one hand, and those of the Labor
Arbiter and the CA on the other, the Court may examine the evidence presented
by the parties to determine whether or not the employee was illegally dismissed
or voluntarily resigned from employment.[24] The instant case thus falls within
the exception.
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In its Decision[25] dated December 9, 1997, the NLRC had ordered the
case remanded to the Labor Arbiter precisely so that the questioned documents
purportedly signed/executed by respondent could be subjected to calligraphy
examination by experts. It is precisely where a judgment or ruling fails to make
findings of fact that the case may be remanded to the lower tribunal to enable it
to determine them.[26] However, instead of referring the questioned documents
to the NBI or the PNP as mandated by the Commissions ruling, Labor Arbiter
Portillo proceeded to rule in favor of petitioner, concluding that respondents
signatures were not forged, and as such, respondents separation from
employment was purely voluntary. In fine, then, the Labor Arbiter gravely
abused his discretion when he ruled in favor of petitioner without abiding by the
Commissions directive.
We have carefully examined the evidence on record and find that the
petition must fail.
We note, however, that a remand of the case at this juncture would only
result in unnecessary delay, especially considering that this case has been
pending since 1995. Indeed, it is this Courts duty to settle, whenever possible,
the entire controversy in a single proceeding, leaving no root or branch to bear
the seeds of future litigation.[27] Hence, the case shall be fully resolved on its
merits.
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We find that petitioners failure to submit the original copies of the pay
slips and the resignation letter raises doubts as to the veracity of its claim that
they were actually signed/penned by respondent. The failure of a party to
produce the original copy of the document which is in issue has been taken
against such party, and has even been considered as a mere bargaining chip, a
dilatory tactic so that such party would be granted the opportunity to
adduce controverting evidence.[28] In fact, petitioner did not even present in
evidence the original copy of the employment contract, much less a machine
copy, giving credence to respondents claim that he was not at all given a copy
of the employment contract after he signed it. What petitioner presented was a
mere photocopy of the OCW Info Sheet[29] issued by the Philippine Overseas
Employment Administration as well as the Personal Data Sheet[30]which
respondent filled up. It bears stressing that the original copies of all these
documents, including the employment contract, were in the possession of
petitioner, or, at the very least, petitioners principal.
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Even a cursory perusal of the resignation letter[34] and the handwritten pay
slips will readily show that they were written by only one person. A mere
layman will immediately notice that the strokes and letters in the documents are
very similar, if not identical, to one another. It is also quite apparent from a
comparison of the signatures in the pay slips that they are inconsistent, irregular,
with uneven and faltering strokes.
We also find it unbelievable that after having waited for so long to be
deployed to Saudi Arabia and with the hopes of opportunity to earn a better
living within his reach, respondent would just suddenly decide to abandon his
work and go home due to family problems. At the very least, respondent
could have at least specified the reason or elaborated on the details of such an
urgent matter so as not to jeopardize future employment opportunities.
That respondent also filed the complaint immediately gives more
credence to his claim that he was illegally dismissed. He arrived in
the Philippines on July 24, 1995, and immediately filed his complaint for illegal
dismissal two days later, on July 26, 1995.
We are not impervious of petitioners claim that respondent could have
asked another person to execute the resignation letter for him. However,
petitioner failed to present even an affidavit from a representative of its foreign
principal in order to support this allegation.
Indeed, the rule is that all doubts in the implementation and the
interpretation of the Labor Code shall be resolved in favor of labor,[35] in order
to give effect to the policy of the State to afford protection to labor, promote
full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers, and to
assure the rights of workers to self-organization, collective bargaining, security
of tenure, and just and humane conditions of work.[36] We reiterate the
following pronouncement in Nicario v. National Labor Relations
Commission:[37]
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Moreover, one who pleads payment has the burden of proving it. The
reason for the rule is that the pertinent personnel files, payrolls, records,
remittances and other similar documents which will show that overtime,
differentials, service incentive leave, and other claims of workers have been
paid are not in the possession of the worker but in the custody and absolute
control of the employer. Thus, the burden of showing with legal certainty that
the obligation has been discharged with payment falls on the debtor, in
accordance with the rule that one who pleads payment has the burden of
proving it.[38] Only when the debtor introduces evidence that the obligation has
been extinguished does the burden shift to the creditor, who is then under a duty
of producing evidence to show why payment does not extinguish the
obligation.[39] In this case, petitioner was unable to present ample evidence to
prove its claim that respondent had received all his salaries and benefits in full.
IN LIGHT OF ALL THE FOREGOING, the Petition is DENIED for
lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No. 64744
is AFFIRMED. Costs against the petitioners.
SO ORDERED.
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cralawBefore
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12
15, 2000, he was examined and found to have neuromyositis with the
waist and diabetes. The examining physician prescribed medicine and
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December 5, 2000, petitioner was referred to the companydesignated physician, Dr. Teodoro F. Pidlaoan, Medical Director of the
Our Lady of Fatima Medical Clinic. The x-ray of his lumbosacral spine
revealed normal results and his Fasting Blood Sugar test revealed 9.1
(NV 4.1-6.1 umol/l). Petitioner was given Alaxan tablet for his back
pain and Euglocon for his elevated blood sugar. He was also advised to
return for follow-up evaluation. On December 13, 2000, he returned to
the clinic with no more complaints of back pains. His sugar examination
likewise revealed normal results. Petitioner was then declared 'fit for
duty effective on that day.[7]
cralawOn
cralawHowever,
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SO ORDERED.[14]chanroblesvirtuallawlibrary
cralawWHEREFORE,
ORDERED.[17]chanroblesvirtuallawlibrary
cralawPetitioner
14
Page
cralawIN
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ORDERED.[20]chanroblesvirtuallawlibrary
cralaw
cralawPetitioner's
I.
IN LIGHT OF THE DECISION OF THIS HONORABLE COURT IN
'GERMAN MARINE AGENCIES, INC. VS. NLRC, ET AL., 350
SCRA 629, CAN THE RESPONDENTS' COMPANY-DESIGNATED
DOCTOR BE CONSIDERED COMPETENT AND RELIABLE
ENOUGH TO DECLARE PETITIONER AS FIT TO WORK
CONTRARY TO THE DECLARATIONS OF THREE (3)
INDEPENDENT PHYSICIANS SIMILARLY FINDING HIM
OTHERWISE?
II.
DOES THE EXECUTION BY PETITIONER OF A RELEASE AND
QUITCLAIM ESTOP HIM FROM CLAIMING DISABILITY
BENEFITS UNDER THE POEA STANDARD EMPLOYMENT
CONTRACT?[22]
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In the instant case, Dr. Pidlaoan diagnosed petitioner as 'fit for duty as
gleaned from hisDecember 13, 2000 Medical Report, to wit:
xxxx
Referred and consulted our medical clinic on December 05,
2000 still complaining of on-and-off low back pain
aggravated by movements. X-ray of the lumbosacral spine
revealed normal findings, Fasting Blood Sugar revealed 9.1
(NV 4.1 - 6.1 umol/l). Patient was given Alaxan tablet 2-3x
a day for his back pain and Eugoclon 1 tablet daily for his
elevated blood sugar and advised to come back regularly for
repeat blood sugar and for follow-up evaluation on his back
pain.
Today, December 13, 2000, he came back with no more
complaints of back pain and repeat sugar examination
revealed already normal results.
DIAGNOSIS: Lumbar Strain
Diabetes Mellitus
RECOMMENDATION: Fit for duty effective today, December
13, 2000.
xxxx
cralawSince
jointly between the employer and the seafarer whose decision shall be
final and binding on both parties.
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17
Petitioner did not question the findings of Dr. Pidlaoan and his
recommendation.He questioned the doctor's competency and the
correctness of his findings only when he filed the complaint against
respondents before the Labor Arbiter, roughly 11 months after
petitioner was examined by the doctor. Petitioner consulted his
personal doctors only in July and August 2001, long after he had been
examined by the company-designated physician.
cralawPetitioner's
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18
cralawDr.
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cralawIn
the instant case, petitioner, by his own hand, wrote the following
in the March 20, 2001 release and quitclaim:
cralawThat
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19
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cralawThat
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20
cralawNot
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21
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
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MELO, J.:
In the instant petition for certiorari, the Court is presented the issue of
whether or not the formulation of a Code of Discipline among employees
is a shared responsibility of the employer and the employees.
On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised
its 1966 Code of Discipline. The Code was circulated among the
employees and was immediately implemented, and some employees were
forthwith subjected to the disciplinary measures embodied therein.
22
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Labor Arbiter Isabel P. Ortiguerra handling the case called the parties to a
conference but they failed to appear at the scheduled date. Interpreting
such failure as a waiver of the parties' right to present evidence, the labor
arbiter considered the case submitted for decision. On November 7, 1986,
a decision was rendered finding no bad faith on the part of PAL in
adopting the Code and ruling that no unfair labor practice had been
committed. However, the arbiter held that PAL was "not totally fault free"
considering that while the issuance of rules and regulations governing the
23
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24
PAL appealed to the NLRC. On August 19, 1988, the NLRC through
Commissioner Encarnacion, with Presiding Commissioner Bonto-Perez and
Commissioner Maglaya concurring, found no evidence of unfair labor
practice committed by PAL and affirmed the dismissal of PALEA's charge.
Nonetheless, the NLRC made the following observations:
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PAL then filed the instant petition for certiorari charging public
respondents with grave abuse of discretion in: (a) directing PAL "to share
its management prerogative of formulating a Code of Discipline"; (b)
engaging in quasi-judicial legislation in ordering PAL to share said
prerogative with the union; (c) deciding beyond the issue of unfair labor
practice, and (d) requiring PAL to reconsider pending cases still in the
arbitral level (p. 7, Petition; p. 8, Rollo.)
As stated above, the Principal issue submitted for resolution in the instant
petition is whether management may be compelled to share with the
union or its employees its prerogative of formulating a code of discipline.
PAL asserts that when it revised its Code on March 15, 1985, there was
no law which mandated the sharing of responsibility therefor between
employer and employee.
Indeed, it was only on March 2, 1989, with the approval of Republic Act
No. 6715, amending Article 211 of the Labor Code, that the law explicitly
considered it a State policy "(t)o ensure the participation of workers in
decision and policy-making processes affecting the rights, duties and
welfare." However, even in the absence of said clear provision of law, the
exercise of management prerogatives was never considered boundless.
Thus, in Cruz vs. Medina (177 SCRA 565 [1989]) it was held that
management's prerogatives must be without abuse of discretion.
In San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA
25 [1989]), we upheld the company's right to implement a new system of
distributing its products, but gave the following caveat:
So long as a company's management prerogatives are
exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid
agreements, this Court will uphold them.
(at p. 28.)
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26
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27
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28
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29
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12 months
Position
Chief Officer
US$1,400.00
Hours of work
Overtime
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30
May
US$ 413.90
27/31,
1998
(5
days)
incl.
Leave
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pay
June
2,590.00
01/30,
1998
July
2,590.00
01/31,
1998
August 2,590.00
01/31,
1998
Sept.
2,590.00
01/30,
1998
Oct.
2,590.00
01/31,
1998
Nov.
2,590.00
01/30,
1998
Dec.
2,590.00
01/31,
1998
Jan.
2,590.00
01/31,
1999
Feb.
2,590.00
01/28,
1999
Mar.
1/19,
1999
(19
days)
incl.
leave
pay
1,640.00
31
------------------------------------------------------------------------------25,382.23
Page
Amoun
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t
adjust
ed to
chief
mate's
salary
(March 1,060.5010
19/31,
1998
to
April
1/30,
1998)
+
--------------------------------------------------------------------------------------------TOTAL US$ 26,442.7311
CLAIM
as well as moral and exemplary damages and attorney's fees.
The LA rendered a Decision dated July 15, 1999, declaring the
dismissal of petitioner illegal and awarding him monetary benefits,
to wit:
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32
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45.00
US$4,245.00
424.50
33
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TOTAL US$4,669.50
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In the alternative that the Court of Appeals and the Labor Tribunals were
merely applying their interpretation of Section 10 of Republic Act No.
8042, it is submitted that the Court of Appeals gravely erred in law when
it failed to discharge its judicial duty to decide questions of substance not
theretofore determined by the Honorable Supreme Court, particularly, the
constitutional issues raised by the petitioner on the constitutionality of
said law, which unreasonably, unfairly and arbitrarily limits payment of
the award for back wages of overseas workers to three (3) months.
34
II
III
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35
36
Lastly, petitioner claims that the subject clause violates the due process
clause, for it deprives him of the salaries and other emoluments he is
entitled to under his fixed-period employment contract.39
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37
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When the Court is called upon to exercise its power of judicial review of
the acts of its co-equals, such as the Congress, it does so only when
these conditions obtain: (1) that there is an actual case or controversy
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39
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40
other GFIs had been exempted from the SSL by their respective charters.
Finding that the disputed provision contained a suspect classification
based on salary grade, the Court deliberately employed the standard of
strict judicial scrutiny in its review of the constitutionality of said
provision. More significantly, it was in this case that the Court revealed
the broad outlines of its judicial philosophy, to wit:
Congress retains its wide discretion in providing for a valid classification,
and its policies should be accorded recognition and respect by the courts
of justice except when they run afoul of the Constitution. The deference
stops where the classification violates a fundamental right, or prejudices
persons accorded special protection by the Constitution. When
these violations arise, this Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a stricter and more
exacting adherence to constitutional limitations. Rational basis should not
suffice.
Admittedly, the view that prejudice to persons accorded special protection
by the Constitution requires a stricter judicial scrutiny finds no support in
American or English jurisprudence. Nevertheless, these foreign decisions
and authorities are not per se controlling in this jurisdiction. At best, they
are persuasive and have been used to support many of our decisions. We
should not place undue and fawning reliance upon them and regard them
as indispensable mental crutches without which we cannot come to our
own decisions through the employment of our own endowments. We live
in a different ambience and must decide our own problems in the light of
our own interests and needs, and of our qualities and even idiosyncrasies
as a people, and always with our own concept of law and justice. Our laws
must be construed in accordance with the intention of our own lawmakers
and such intent may be deduced from the language of each law and the
context of other local legislation related thereto. More importantly, they
must be construed to serve our own public interest which is the be-all and
the end-all of all our laws. And it need not be stressed that our public
interest is distinct and different from others.
xxxx
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Equality is one ideal which cries out for bold attention and action in the
Constitution. The Preamble proclaims "equality" as an ideal precisely in
protest against crushing inequities in Philippine society. The command to
promote social justice in Article II, Section 10, in "all phases of national
development," further explicitated in Article XIII, are clear commands to
the State to take affirmative action in the direction of greater equality. x x
x [T]here is thus in the Philippine Constitution no lack of doctrinal support
41
Further, the quest for a better and more "equal" world calls for the use of
equal protection as a tool of effective judicial intervention.
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In the case at bar, the challenged proviso operates on the basis of the
salary grade or officer-employee status. It is akin to a distinction based
on economic class and status, with the higher grades as recipients of a
benefit specifically withheld from the lower grades. Officers of the BSP
now receive higher compensation packages that are competitive with the
industry, while the poorer, low-salaried employees are limited to the rates
prescribed by the SSL. The implications are quite disturbing: BSP rankand-file employees are paid the strictly regimented rates of the SSL while
employees higher in rank - possessing higher and better education and
opportunities for career advancement - are given higher compensation
packages to entice them to stay. Considering that majority, if not all, the
rank-and-file employees consist of people whose status and rank in life
are less and limited, especially in terms of job marketability, it is they -
42
xxxx
and not the officers - who have the real economic and financial need for
the adjustment . This is in accord with the policy of the Constitution "to
free the people from poverty, provide adequate social services, extend to
them a decent standard of living, and improve the quality of life for all."
Any act of Congress that runs counter to this constitutional desideratum
deserves strict scrutiny by this Court before it can pass muster.
(Emphasis supplied)
Imbued with the same sense of "obligation to afford protection to labor,"
the Court in the present case also employs the standard of strict judicial
scrutiny, for it perceives in the subject clause a suspect classification
prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially neutral, for it
applies to all OFWs. However, a closer examination reveals that the
subject clause has a discriminatory intent against, and an invidious
impact on, OFWs at two levels:
First, OFWs with employment contracts of less than one year vis-vis OFWs with employment contracts ofone year or more;
Second, among OFWs with employment contracts of more than one
year; and
Third, OFWs vis--vis local workers with fixed-period employment;
OFWs with employment contracts of less than one year vis-vis OFWs with employment contracts of one year or more
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43
Period
Applied in
the
Computation
of the
Monetary
Award
44
Contract Period of
Period
Service
Page
Case Title
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6 months
2 months
4 months
4 months
Bahia
Shipping v.
Reynaldo
Chua 85
9 months
8 months
4 months
4 months
Centennial 9 months
Transmarine
v. dela Cruz
l86
4 months
5 months
5 months
Talidano v.
Falcon87
12
months
3 months
9 months
3 months
Univan v.
CA 88
12
months
3 months
9 months
3 months
Oriental v.
CA89
12
months
more than
2 months
10 months
3 months
PCL v.
NLRC90
12
months
more than
2 months
more or less
9 months
3 months
Olarte v.
Nayona91
12
months
21 days
11 months
and 9 days
3 months
JSS
v.Ferrer92
12
months
16 days
11 months
and 24 days
3 months
9 months
and 7
days
2 months
and 23 days
2 months and
23 days
Pentagon v.
Adelantar93
12
months
Phil. Employ
v. Paramio,
et al.94
12
months
10
months
2 months
Unexpired
portion
Flourish
Maritime v.
Almanzor 95
2 years
26 days
23 months
and 4 days
6 months or 3
months for
each year of
contract
Athenna
Manpower
v.
Villanos 96
1 year,
10
months
and 28
days
1 month
1 year, 9
months and
28 days
6 months or 3
months for
each year of
contract
Page
Skippers v.
Maguad84
45
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As the foregoing matrix readily shows, the subject clause classifies OFWs
into two categories. The first category includes OFWs with fixed-period
employment contracts of less than one year; in case of illegal dismissal,
they are entitled to their salaries for the entire unexpired portion of their
contract. The second category consists of OFWs with fixed-period
employment contracts of one year or more; in case of illegal dismissal,
they are entitled to monetary award equivalent to only 3 months of the
unexpired portion of their contracts.
The disparity in the treatment of these two groups cannot be discounted.
In Skippers, the respondent OFW worked for only 2 months out of his 6month contract, but was awarded his salaries for the remaining 4 months.
In contrast, the respondent OFWs in Oriental and PCL who had also
worked for about 2 months out of their 12-month contracts were awarded
their salaries for only 3 months of the unexpired portion of their
contracts. Even the OFWs involved inTalidano and Univan who
had worked for a longer period of 3 months out of their 12-month
contracts before being illegally dismissed were awarded their salaries for
only 3 months.
To illustrate the disparity even more vividly, the Court assumes a
hypothetical OFW-A with an employment contract of 10 months at a
monthly salary rate of US$1,000.00 and a hypothetical OFW-B with an
employment contract of 15 months with the same monthly salary rate of
US$1,000.00. Both commenced work on the same day and under the
same employer, and were illegally dismissed after one month of work.
Under the subject clause, OFW-A will be entitled to US$9,000.00,
equivalent to his salaries for the remaining 9 months of his contract,
whereas OFW-B will be entitled to only US$3,000.00, equivalent to his
salaries for 3 months of the unexpired portion of his contract, instead of
US$14,000.00 for the unexpired portion of 14 months of his contract, as
the US$3,000.00 is the lesser amount.
Contract
Period
Period
of
Service
Unexpired
Period
Period Applied
in the
Computation of
the Monetary
Award
ATCI v. CA,
2 years
22 months
22 months
Page
Case Title
46
The disparity becomes more aggravating when the Court takes into
account jurisprudence that, prior to the effectivity of R.A. No. 8042
on July 14, 1995,97 illegally dismissed OFWs, no matter how long the
period of their employment contracts, were entitled to their salaries for
the entire unexpired portions of their contracts. The matrix below speaks
for itself:
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et al.98
months
Phil.
Integrated
v. NLRC99
2 years
7 days
23 months
and 23
days
23 months and
23 days
JGB v.
NLC100
2 years
9 months
15 months
15 months
Agoy v.
NLRC101
2 years
2 months
22 months
22 months
EDI v.
NLRC, et
al.102
2 years
5 months
19 months
19 months
Barros v.
NLRC, et
al.103
12
months
4 months
8 months
8 months
Philippine
Transmarine
v. Carilla104
12
months
6 months
and 22
days
5 months
and 18
days
5 months and 18
days
It is plain that prior to R.A. No. 8042, all OFWs, regardless of contract
periods or the unexpired portions thereof, were treated alike in terms of
the computation of their monetary benefits in case of illegal dismissal.
Their claims were subjected to a uniform rule of computation: their basic
salaries multiplied by the entire unexpired portion of their employment
contracts.
The enactment of the subject clause in R.A. No. 8042 introduced a
differentiated rule of computation of the money claims of illegally
dismissed OFWs based on their employment periods, in the
process singling out one category whose contracts have an unexpired
portion of one year or more and subjecting them to the peculiar
disadvantage of having their monetary awards limited to their salaries for
3 months or for the unexpired portion thereof, whichever is less, but all
the while sparing the other category from such prejudice, simply because
the latter's unexpired contracts fall short of one year.
Among OFWs With Employment Contracts of More Than One Year
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The Court notes that the subject clause "or for three (3) months for every
year of the unexpired term, whichever is less" contains the qualifying
47
phrases "every year" and "unexpired term." By its ordinary meaning, the
word "term" means a limited or definite extent of time.105 Corollarily, that
"every year" is but part of an "unexpired term" is significant in many
ways: first, the unexpired term must be at least one year, for if it were
any shorter, there would be no occasion for such unexpired term to be
measured by every year; and second, the original term must be more
than one year, for otherwise, whatever would be the unexpired term
thereof will not reach even a year. Consequently, the more decisive factor
in the determination of when the subject clause "for three (3) months
forevery year of the unexpired term, whichever is less" shall apply is not
the length of the original contract period as held in Marsaman,106 but the
length of the unexpired portion of the contract period -- the subject
clause applies in cases when the unexpired portion of the contract period
is at least one year, which arithmetically requires that the original
contract period be more than one year.
Viewed in that light, the subject clause creates a sub-layer of
discrimination among OFWs whose contract periods are for more than one
year: those who are illegally dismissed with less than one year left in their
contracts shall be entitled to their salaries for the entire unexpired portion
thereof, while those who are illegally dismissed with one year or more
remaining in their contracts shall be covered by the subject clause, and
their monetary benefits limited to their salaries for three months only.
To concretely illustrate the application of the foregoing interpretation of
the subject clause, the Court assumes hypothetical OFW-C and OFW-D,
who each have a 24-month contract at a salary rate of US$1,000.00 per
month. OFW-C is illegally dismissed on the 12th month, and OFW-D, on
the 13th month. Considering that there is at least 12 months remaining in
the contract period of OFW-C, the subject clause applies to the
computation of the latter's monetary benefits. Thus, OFW-C will be
entitled, not to US$12,000,00 or the latter's total salaries for the 12
months unexpired portion of the contract, but to the lesser amount of
US$3,000.00 or the latter's salaries for 3 months out of the 12-month
unexpired term of the contract. On the other hand, OFW-D is spared from
the effects of the subject clause, for there are only 11 months left in the
latter's contract period. Thus, OFW-D will be entitled to US$11,000.00,
which is equivalent to his/her total salaries for the entire 11-month
unexpired portion.
OFWs vis--vis Local Workers
With Fixed-Period Employment
Page
48
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Citing Manresa, the Court in Lemoine v. Alkan112 read the disjunctive "or"
in Article 1586 as a conjunctive "and" so as to apply the provision to local
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Page
Article 1586. Field hands, mechanics, artisans, and other laborers hired
for a certain time and for a certain work cannot leave or be dismissed
without sufficient cause, before the fulfillment of the contract. (Emphasis
supplied.)
49
While Article 605 has remained good law up to the present,111 Article 299
of the Code of Commerce was replaced by Art. 1586 of the Civil Code of
1889, to wit:
workers who are employed for a time certain although for no particular
skill. This interpretation of Article 1586 was reiterated in Garcia Palomar
v. Hotel de France Company.113 And in both Lemoine and Palomar, the
Court adopted the general principle that in actions for wrongful discharge
founded on Article 1586, local workers are entitled to recover damages to
the extent of the amount stipulated to be paid to them by the terms of
their contract. On the computation of the amount of such damages, the
Court in Aldaz v. Gay114held:
The doctrine is well-established in American jurisprudence, and nothing
has been brought to our attention to the contrary under Spanish
jurisprudence, that when an employee is wrongfully discharged it is his
duty to seek other employment of the same kind in the same community,
for the purpose of reducing the damages resulting from such wrongful
discharge. However, while this is the general rule, the burden of showing
that he failed to make an effort to secure other employment of a like
nature, and that other employment of a like nature was obtainable, is
upon the defendant. When an employee is wrongfully discharged under a
contract of employment his prima facie damage is the amount which he
would be entitled to had he continued in such employment until the
termination of the period. (Howard vs. Daly, 61 N. Y., 362; Allen vs.
Whitlark, 99 Mich., 492; Farrell vs. School District No. 2, 98 Mich.,
43.)115(Emphasis supplied)
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50
On August 30, 1950, the New Civil Code took effect with new provisions
on fixed-term employment: Section 2 (Obligations with a Period), Chapter
3, Title I, and Sections 2 (Contract of Labor) and 3 (Contract for a Piece
of Work), Chapter 3, Title VIII, Book IV.116 Much like Article 1586 of the
Civil Code of 1889, the new provisions of the Civil Code do not expressly
provide for the remedies available to a fixed-term worker who is illegally
discharged. However, it is noted that in Mackay Radio & Telegraph Co.,
Inc. v. Rich,117 the Court carried over the principles on the payment of
damages underlying Article 1586 of the Civil Code of 1889 and applied the
same to a case involving the illegal discharge of a local worker whose
fixed-period employment contract was entered into in 1952, when the
new Civil Code was already in effect.118
for a fixed term of two years, but who was illegally dismissed after only
nine months on the job -- the Court awarded him salaries corresponding
to 15 months, the unexpired portion of his contract. In Asia World
Recruitment, Inc. v. National Labor Relations Commission,122 a Filipino
working as a security officer in 1989 in Angola was awarded his salaries
for the remaining period of his 12-month contract after he was wrongfully
discharged. Finally, in Vinta Maritime Co., Inc. v. National Labor Relations
Commission,123 an OFW whose 12-month contract was illegally cut short
in the second month was declared entitled to his salaries for the
remaining 10 months of his contract.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term
employment who were illegally discharged were treated alike in terms of
the computation of their money claims: they were uniformly entitled to
their salaries for the entire unexpired portions of their contracts. But with
the enactment of R.A. No. 8042, specifically the adoption of the subject
clause, illegally dismissed OFWs with an unexpired portion of one year or
more in their employment contract have since been differently treated in
that their money claims are subject to a 3-month cap, whereas no such
limitation is imposed on local workers with fixed-term employment.
The Court concludes that the subject clause contains a suspect
classification in that, in the computation of the monetary benefits
of fixed-term employees who are illegally discharged, it imposes a
3-month cap on the claim of OFWs with an unexpired portion of
one year or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term employment. The
subject clause singles out one classification of OFWs and burdens
it with a peculiar disadvantage.
There being a suspect classification involving a vulnerable sector
protected by the Constitution, the Court now subjects the classification to
a strict judicial scrutiny, and determines whether it serves a compelling
state interest through the least restrictive means.
What constitutes compelling state interest is measured by the scale of
rights and powers arrayed in the Constitution and calibrated by
history.124 It is akin to the paramount interest of the state125 for which
some individual liberties must give way, such as the public interest in
safeguarding health or maintaining medical standards,126 or in
maintaining access to information on matters of public concern.127
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The OSG defends the subject clause as a police power measure "designed
to protect the employment of Filipino seafarers overseas x x x. By limiting
the liability to three months [sic], Filipino seafarers have better chance of
51
In the present case, the Court dug deep into the records but found no
compelling state interest that the subject clause may possibly serve.
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Page
52
Page
53
the same burden on another sector, especially when the favored sector is
composed of private businesses such as placement agencies, while the
disadvantaged sector is composed of OFWs whose protection no less than
the Constitution commands. The idea that private business interest can
be elevated to the level of a compelling state interest is odious.
Moreover, even if the purpose of the subject clause is to lessen the
solidary liability of placement agencies vis-a-vistheir foreign principals,
there are mechanisms already in place that can be employed to achieve
that purpose without infringing on the constitutional rights of OFWs.
The POEA Rules and Regulations Governing the Recruitment and
Employment of Land-Based Overseas Workers, dated February 4, 2002,
imposes administrative disciplinary measures on erring foreign employers
who default on their contractual obligations to migrant workers and/or
their Philippine agents. These disciplinary measures range from
temporary disqualification to preventive suspension. The POEA Rules and
Regulations Governing the Recruitment and Employment of Seafarers,
dated May 23, 2003, contains similar administrative disciplinary measures
against erring foreign employers.
Resort to these administrative measures is undoubtedly the less
restrictive means of aiding local placement agencies in enforcing the
solidary liability of their foreign principals.
Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No.
8042 is violative of the right of petitioner and other OFWs to equal
protection.1avvphi1
Further, there would be certain misgivings if one is to approach the
declaration of the unconstitutionality of the subject clause from the lone
perspective that the clause directly violates state policy on labor under
Section 3,131Article XIII of the Constitution.
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54
While all the provisions of the 1987 Constitution are presumed selfexecuting,132 there are some which this Court has declared not judicially
enforceable, Article XIII being one,133 particularly Section 3 thereof, the
nature of which, this Court, in Agabon v. National Labor Relations
Commission,134 has described to be not self-actuating:
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The view that the concepts of suspect classification and strict judicial
scrutiny formulated in Central Bank Employee Association exaggerate the
significance of Section 3, Article XIII is a groundless
apprehension. Central Bank applied Article XIII in conjunction with the
equal protection clause. Article XIII, by itself, without the application of
the equal protection clause, has no life or force of its own as elucidated
in Agabon.
55
It must be stressed that Section 3, Article XIII does not directly bestow
on the working class any actual enforceable right, but merely clothes it
with the status of a sector for whom the Constitution urges protection
through executive or legislative action and judicial recognition. Its
utility is best limited to being an impetus not just for the executive and
legislative departments, but for the judiciary as well, to protect the
welfare of the working class. And it was in fact consistent with that
constitutional agenda that the Court in Central Bank (now Bangko Sentral
ng Pilipinas) Employee Association, Inc. v. Bangko Sentral ng
Pilipinas, penned by then Associate Justice now Chief Justice Reynato S.
Puno, formulated the judicial precept that when the challenge to a statute
is premised on the perpetuation of prejudice against persons favored by
the Constitution with special protection -- such as the working class or a
section thereof -- the Court may recognize the existence of a suspect
classification and subject the same to strict judicial scrutiny.
Along the same line of reasoning, the Court further holds that the subject
clause violates petitioner's right to substantive due process, for it deprives
him of property, consisting of monetary benefits, without any existing
valid governmental purpose.136
The argument of the Solicitor General, that the actual purpose of the
subject clause of limiting the entitlement of OFWs to their three-month
salary in case of illegal dismissal, is to give them a better chance of
getting hired by foreign employers. This is plain speculation. As earlier
discussed, there is nothing in the text of the law or the records of the
deliberations leading to its enactment or the pleadings of respondent that
would indicate that there is an existing governmental purpose for the
subject clause, or even just a pretext of one.
The subject clause does not state or imply any definitive governmental
purpose; and it is for that precise reason that the clause violates not just
petitioner's right to equal protection, but also her right to substantive due
process under Section 1,137 Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his
salaries for the entire unexpired period of nine months and 23 days of his
employment contract, pursuant to law and jurisprudence prior to the
enactment of R.A. No. 8042.
On the Third Issue
Petitioner contends that his overtime and leave pay should form part of
the salary basis in the computation of his monetary award, because these
are fixed benefits that have been stipulated into his contract.
Petitioner is mistaken.
Page
56
The word salaries in Section 10(5) does not include overtime and leave
pay. For seafarers like petitioner, DOLE Department Order No. 33, series
1996, provides a Standard Employment Contract of Seafarers, in which
salary is understood as the basic wage, exclusive of overtime, leave pay
and other bonuses; whereas overtime pay is compensation for all work
"performed" in excess of the regular eight hours, and holiday pay is
compensation for any work "performed" on designated rest days and
holidays.
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57
SO ORDERED.
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Joy claims that she was told that from June 26 to July 14, 1997, she only
earned a total of NT$9,000.15According to her, Wacoal deducted
NT$3,000 to cover her plane ticket to Manila.16cralawred
Page
On October 15, 1997, Joy filed a complaint17 with the National Labor
Relations Commission against petitioner and Wacoal. She claimed that
58
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she was illegally dismissed.18 She asked for the return of her placement
fee, the withheld amount for repatriation costs, payment of her salary for
23 months as well as moral and exemplary damages.19 She identified
Wacoal as Sameer Overseas Placement Agencys foreign
principal.20cralawred
Sameer Overseas Placement Agency alleged that respondent's
termination was due to her inefficiency, negligence in her duties, and her
failure to comply with the work requirements [of] her foreign
[employer].21 The agency also claimed that it did not ask for a placement
fee of ?70,000.00.22 As evidence, it showed Official Receipt No. 14860
dated June 10, 1997, bearing the amount of ?20,360.00.23 Petitioner
added that Wacoal's accreditation with petitioner had already been
transferred to the Pacific Manpower & Management Services, Inc. (Pacific)
as of August 6, 1997.24 Thus, petitioner asserts that it was already
substituted by Pacific Manpower.25cralawred
Pacific Manpower moved for the dismissal of petitioners claims against
it.26 It alleged that there was no employer-employee relationship between
them.27 Therefore, the claims against it were outside the jurisdiction of
the Labor Arbiter.28 Pacific Manpower argued that the employment
contract should first be presented so that the employers contractual
obligations might be identified.29 It further denied that it assumed liability
for petitioners illegal acts.30cralawred
On July 29, 1998, the Labor Arbiter dismissed Joys complaint.31 Acting
Executive Labor Arbiter Pedro C. Ramos ruled that her complaint was
based on mere allegations.32 The Labor Arbiter found that there was no
excess payment of placement fees, based on the official receipt presented
by petitioner.33 The Labor Arbiter found unnecessary a discussion on
petitioners transfer of obligations to Pacific34 and considered the matter
immaterial in view of the dismissal of respondents complaint.35cralawred
Joy appealed36 to the National Labor Relations Commission.
59
Page
The National Labor Relations Commission did not rule on the issue of
reimbursement of placement fees for lack of jurisdiction.43 It refused to
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Page
60
Although the public respondent found the dismissal of the complainantrespondent illegal, we should point out that the NLRC merely awarded her
three (3) months backwages or the amount of NT$46,080.00, which was
based upon its finding that she was dismissed without due process, a
finding that we uphold, given petitioners lack of worthwhile discussion
upon the same in the proceedings below or before us. Likewise we sustain
NLRCs finding in regard to the reimbursement of her fare, which is
squarely based on the law; as well as the award of attorneys fees.
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61
Page
62
This public policy should be borne in mind in this case because to allow
foreign employers to determine for and by themselves whether an
overseas contract worker may be dismissed on the ground of illness
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Page
(c) Fraud or willful breach by the employee of the trust reposed in him by
his employer or duly authorized representative;chanroblesvirtuallawlibrary
63
Page
64
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Page
A valid dismissal requires both a valid cause and adherence to the valid
procedure of dismissal.75 The employer is required to give the charged
employee at least two written notices before termination.76 One of the
written notices must inform the employee of the particular acts that may
cause his or her dismissal.77 The other notice must [inform] the
employee of the employers decision.78 Aside from the notice
requirement, the employee must also be given an opportunity to be
65
Respondents dismissal less than one year from hiring and her
repatriation on the same day show not only failure on the part of
petitioner to comply with the requirement of the existence of just cause
for termination. They patently show that the employers did not comply
with the due process requirement.
heard.79cralawred
Petitioner failed to comply with the twin notices and hearing
requirements. Respondent started working on June 26, 1997. She was
told that she was terminated on July 14, 1997 effective on the same day
and barely a month from her first workday. She was also repatriated on
the same day that she was informed of her termination. The abruptness
of the termination negated any finding that she was properly notified and
given the opportunity to be heard. Her constitutional right to due process
of law was violated.
II
Respondent Joy Cabiles, having been illegally dismissed, is entitled to her
salary for the unexpired portion of the employment contract that was
violated together with attorneys fees and reimbursement of amounts
withheld from her salary.
Section 10 of Republic Act No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, states that overseas workers
who were terminated without just, valid, or authorized cause shall be
entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the
unexpired term, whichever is less.
Page
66
Such liabilities shall continue during the entire period or duration of the
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67
The Labor Code81 also entitles the employee to 10% of the amount of
withheld wages as attorneys fees when the withholding is unlawful.
her repatriation.
We uphold the finding that respondent is entitled to all of these
awards. The award of the three-month equivalent of respondents
salary should, however, be increased to the amount equivalent to
the unexpired term of the employment contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Inc.,82 this court ruled that the clause or for three (3) months for every
year of the unexpired term, whichever is less83 is unconstitutional for
violating the equal protection clause and substantive due
process.84cralawred
A statute or provision which was declared unconstitutional is not a law. It
confers no rights; it imposes no duties; it affords no protection; it
creates no office; it is inoperative as if it has not been passed at
all.85cralawred
We are aware that the clause or for three (3) months for every year of
the unexpired term, whichever is less was reinstated in Republic Act No.
8042 upon promulgation of Republic Act No. 10022 in 2010. Section 7 of
Republic Act No. 10022 provides:chanRoblesvirtualLawlibrary
Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby
amended to read as follows:chanRoblesvirtualLawlibrary
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68
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution,
amendment or modification made locally or in a foreign country of the
said contract.
Any compromise/amicable settlement or voluntary agreement on money
claims inclusive of damages under this section shall be paid within thirty
(30) days from approval of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or
authorized cause as defined by law or contract, or any unauthorized
deductions from the migrant workers salary, the worker shall be entitled
to the full reimbursement if [sic] his placement fee and the deductions
made with interest at twelve percent (12%) per annum, plus his salaries
for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less.
In case of a final and executory judgement against a foreign
employer/principal, it shall be automatically disqualified, without further
proceedings, from participating in the Philippine Overseas Employment
Program and from recruiting and hiring Filipino workers until and unless it
fully satisfies the judgement award.
Noncompliance with the mandatory periods for resolutions of case
provided under this section shall subject the responsible officials to any or
all of the following penalties:cralawlawlibrary
(a) The salary of any such official who fails to render his decision or
resolution within the prescribed period shall be, or caused to be, withheld
until the said official complies therewith;chanroblesvirtuallawlibrary
(b) Suspension for not more than ninety (90) days; or
(c) Dismissal from the service with disqualification to hold any appointive
public office for five (5) years.
Page
Republic Act No. 10022 was promulgated on March 8, 2010. This means
that the reinstatement of the clause in Republic Act No. 8042 was not yet
in effect at the time of respondents termination from work in
1997.86 Republic Act No. 8042 before it was amended by Republic Act No.
10022 governs this case.
69
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When a law is passed, this court awaits an actual case that clearly raises
adversarial positions in their proper context before considering a prayer to
declare it as unconstitutional.
However, we are confronted with a unique situation. The law passed
incorporates the exact clause already declared as unconstitutional,
without any perceived substantial change in the circumstances.
This may cause confusion on the part of the National Labor Relations
Commission and the Court of Appeals. At minimum, the existence of
Republic Act No. 10022 may delay the execution of the judgment in this
case, further frustrating remedies to assuage the wrong done to
petitioner. Hence, there is a necessity to decide this constitutional issue.
Moreover, this court is possessed with the constitutional duty to
[p]romulgate rules concerning the protection and enforcement of
constitutional rights.87 When cases become moot and academic, we do
not hesitate to provide for guidance to bench and bar in situations where
the same violations are capable of repetition but will evade review. This is
analogous to cases where there are millions of Filipinos working abroad
who are bound to suffer from the lack of protection because of the
restoration of an identical clause in a provision previously declared as
unconstitutional.
In the hierarchy of laws, the Constitution is supreme. No branch or office
of the government may exercise its powers in any manner inconsistent
with the Constitution, regardless of the existence of any law that supports
such exercise. The Constitution cannot be trumped by any other law. All
laws must be read in light of the Constitution. Any law that is inconsistent
with it is a nullity.
Thus, when a law or a provision of law is null because it is inconsistent
with the Constitution, the nullity cannot be cured by reincorporation or
reenactment of the same or a similar law or provision. A law or provision
of law that was already declared unconstitutional remains as such unless
circumstances have so changed as to warrant a reverse conclusion.
We are not convinced by the pleadings submitted by the parties that the
situation has so changed so as to cause us to reverse binding precedent.
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The new law puts our overseas workers in the same vulnerable position
as they were prior to Serrano. Failure to reiterate the very ratio decidendi
of that case will result in the same untold economic hardships that our
reading of the Constitution intended to avoid. Obviously, we cannot
70
Likewise, there are special reasons of judicial efficiency and economy that
attend to these cases.
countenance added expenses for further litigation that will reduce their
hard-earned wages as well as add to the indignity of having been
deprived of the protection of our laws simply because our precedents
have not been followed. There is no constitutional doctrine that causes
injustice in the face of empty procedural niceties. Constitutional
interpretation is complex, but it is never unreasonable.
Thus, in a resolution88 dated October 22, 2013, we ordered the parties
and the Office of the Solicitor General to comment on the constitutionality
of the reinstated clause in Republic Act No. 10022.
In its comment,89 petitioner argued that the clause was
constitutional.90 The legislators intended a balance between the
employers and the employees rights by not unduly burdening the local
recruitment agency.91 Petitioner is also of the view that the clause was
already declared as constitutional inSerrano.92cralawred
The Office of the Solicitor General also argued that the clause was valid
and constitutional.93 However, since the parties never raised the issue of
the constitutionality of the clause as reinstated in Republic Act No. 10022,
its contention is that it is beyond judicial review.94cralawred
On the other hand, respondent argued that the clause was
unconstitutional because it infringed on workers right to
contract.95cralawred
We observe that the reinstated clause, this time as provided in Republic
Act. No. 10022, violates the constitutional rights to equal protection and
due process.96 Petitioner as well as the Solicitor General have failed to
show any compelling change in the circumstances that would warrant us
to revisit the precedent.
We reiterate our finding in Serrano v. Gallant Maritime that
limiting wages that should be recovered by an illegally dismissed
overseas worker to three months is both a violation of due
process and the equal protection clauses of the Constitution.
Page
In creating laws, the legislature has the power to make distinctions and
classifications.99 In exercising such power, it has a wide
discretion.100cralawred
71
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We also noted in Serrano that before the passage of Republic Act No.
8042, the money claims of illegally terminated overseas and local workers
with fixed-term employment were computed in the same manner.112 Their
money claims were computed based on the unexpired portions of their
contracts.113The adoption of the reinstated clause in Republic Act No.
8042 subjected the money claims of illegally dismissed overseas workers
with an unexpired term of at least a year to a cap of three months worth
of their salary.114 There was no such limitation on the money claims of
illegally terminated local workers with fixed-term
72
employment.115cralawred
We observed that illegally dismissed overseas workers whose employment
contracts had a term of less than one year were granted the amount
equivalent to the unexpired portion of their employment
contracts.116 Meanwhile, illegally dismissed overseas workers with
employment terms of at least a year were granted a cap equivalent to
three months of their salary for the unexpired portions of their
contracts.117cralawred
Observing the terminologies used in the clause, we also found that the
subject clause creates a sub-layer of discrimination among OFWs whose
contract periods are for more than one year: those who are illegally
dismissed with less than one year left in their contracts shall be entitled
to their salaries for the entire unexpired portion thereof, while those who
are illegally dismissed with one year or more remaining in their contracts
shall be covered by the reinstated clause, and their monetary benefits
limited to their salaries for three months only.118cralawred
We do not need strict scrutiny to conclude that these classifications do not
rest on any real or substantial distinctions that would justify different
treatments in terms of the computation of money claims resulting from
illegal termination.
Overseas workers regardless of their classifications are entitled to security
of tenure, at least for the period agreed upon in their contracts. This
means that they cannot be dismissed before the end of their contract
terms without due process. If they were illegally dismissed, the workers
right to security of tenure is violated.
The rights violated when, say, a fixed-period local worker is illegally
terminated are neither greater than nor less than the rights violated when
a fixed-period overseas worker is illegally terminated. It is state policy to
protect the rights of workers without qualification as to the place of
employment.119 In both cases, the workers are deprived of their expected
salary, which they could have earned had they not been illegally
dismissed. For both workers, this deprivation translates to economic
insecurity and disparity.120The same is true for the distinctions between
overseas workers with an employment contract of less than one year and
overseas workers with at least one year of employment contract, and
between overseas workers with at least a year left in their contracts and
overseas workers with less than a year left in their contracts when they
were illegally dismissed.
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73
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Page
Section 10 of R.A. No. 8042 affects these well-laid rules and measures,
and in fact provides a hidden twist affecting the principal/employers
liability. While intended as an incentive accruing to recruitment/manning
agencies, the law, as worded, simply limits the OFWs recovery in
wrongful dismissal situations. Thus, it redounds to the benefit of whoever
may be liable, including the principal/employer the direct employer
primarily liable for the wrongful dismissal. In this sense, Section 10
read as a grant of incentives to recruitment/manning agencies
oversteps what it aims to do by effectively limiting what is otherwise the
full liability of the foreign principals/employers. Section 10, in short, really
operates to benefit the wrong party and allows that party, without
justifiable reason, to mitigate its liability for wrongful dismissals. Because
of this hidden twist, the limitation of liability under Section 10 cannot be
an appropriate incentive, to borrow the term that R.A. No. 8042 itself
74
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Page
Respondent Joy Cabiles is entitled to her salary for the unexpired portion
of her contract, in accordance with Section 10 of Republic Act No. 8042.
The award of the three-month equivalence of respondents salary must be
modified accordingly. Since she started working on June 26, 1997 and
was terminated on July 14, 1997, respondent is entitled to her salary
from July 15, 1997 to June 25, 1998. To rule otherwise would be
iniquitous to petitioner and other OFWs, and would, in effect, send a
wrong signal that principals/employers and recruitment/manning agencies
may violate an OFWs security of tenure which an employment contract
75
Along the same line, we held that the reinstated clause violates due
process rights. It is arbitrary as it deprives overseas workers of their
monetary claims without any discernable valid purpose.128cralawred
Page
76
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For example, Section 10 of Republic Act No. 8042 provides that unlawfully
terminated overseas workers are entitled to the reimbursement of his or
her placement fee with an interest of 12% per annum. Since Bangko
Sentral ng Pilipinas circulars cannot repeal Republic Act No. 8042, the
issuance of Circular No. 799 does not have the effect of changing the
interest on awards for reimbursement of placement fees from 12% to 6%.
This is despite Section 1 of Circular No. 799, which provides that the 6%
interest rate applies even to judgments.
Page
77
We add that Circular No. 799 is not applicable when there is a law that
states otherwise. While the Bangko Sentral ng Pilipinas has the power to
set or limit interest rates,133 these interest rates do not apply when the
law provides that a different interest rate shall be applied. [A] Central
Bank Circular cannot repeal a law. Only a law can repeal another
law.134cralawred
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Every contract, thus, contains not only what has been explicitly
stipulated, but the statutory provisions that have any bearing on the
matter.135 There is, therefore, an implied stipulation in contracts between
the placement agency and the overseas worker that in case the overseas
worker is adjudged as entitled to reimbursement of his or her placement
fees, the amount shall be subject to a 12% interest per annum. This
implied stipulation has the effect of removing awards for reimbursement
of placement fees from Circular No. 799s coverage.
The same cannot be said for awards of salary for the unexpired portion of
the employment contract under Republic Act No. 8042. These awards are
covered by Circular No. 799 because the law does not provide for a
specific interest rate that should apply.
In sum, if judgment did not become final and executory before July 1,
2013 and there was no stipulation in the contract providing for a different
interest rate, other money claims under Section 10 of Republic Act No.
8042 shall be subject to the 6% interest per annum in accordance with
Circular No. 799.
This means that respondent is also entitled to an interest of 6% per
annum on her money claims from the finality of this judgment.
IV
Finally, we clarify the liabilities of Wacoal as principal and petitioner as the
employment agency that facilitated respondents overseas employment.
Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995
provides that the foreign employer and the local employment agency are
jointly and severally liable for money claims including claims arising out of
an employer-employee relationship and/or damages. This section also
provides that the performance bond filed by the local agency shall be
answerable for such money claims or damages if they were awarded to
the employee.
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78
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79
with the resources to determine the proper legal remedies to enforce its
rights against Pacific, if any.
V
Many times, this court has spoken on what Filipinos may encounter as
they travel into the farthest and most difficult reaches of our planet to
provide for their families. In Prieto v. NLRC:141cralawred
The Court is not unaware of the many abuses suffered by our overseas
workers in the foreign land where they have ventured, usually with heavy
hearts, in pursuit of a more fulfilling future. Breach of contract,
maltreatment, rape, insufficient nourishment, sub-human lodgings, insults
and other forms of debasement, are only a few of the inhumane acts to
which they are subjected by their foreign employers, who probably feel
they can do as they please in their own country. While these workers may
indeed have relatively little defense against exploitation while they are
abroad, that disadvantage must not continue to burden them when they
return to their own territory to voice their muted complaint. There is no
reason why, in their very own land, the protection of our own laws cannot
be extended to them in full measure for the redress of their
grievances.142chanrobleslaw
But it seems that we have not said enough.
We face a diaspora of Filipinos. Their travails and their heroism can be
told a million times over; each of their stories as real as any other.
Overseas Filipino workers brave alien cultures and the heartbreak of
families left behind daily. They would count the minutes, hours, days,
months, and years yearning to see their sons and daughters. We all know
of the joy and sadness when they come home to see them all grown up
and, being so, they remember what their work has cost them. Twitter
accounts, Facetime, and many other gadgets and online applications will
never substitute for their lost physical presence.
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This government loses its soul if we fail to ensure decent treatment for all
Filipinos. We default by limiting the contractual wages that should be paid
to our workers when their contracts are breached by the foreign
employers. While we sit, this court will ensure that our laws will reward
our overseas workers with what they deserve: their dignity.
80
Unknown to them, they keep our economy afloat through the ebb and
flow of political and economic crises. They are our true diplomats, they
who show the world the resilience, patience, and creativity of our people.
Indeed, we are a people who contribute much to the provision of material
creations of this world.
Page
81
SO ORDERED.
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[2]
[4]
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Page
82
The parties were required to submit their position papers, on the basis of which the
Labor Arbiter defined the issues as follows:
[5]
[6]
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83
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Page
84
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85
[9]
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[10]
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[12]
In the case at bar, we have only the bare assertion of petitioner that, in abolishing
the security section, private respondents real purpose was to avoid payment to the
security checkers of the wage increases provided in the collective bargaining
agreement approved in 1990. Such an assertion is not a sufficient basis for
concluding that the termination of petitioners employment was not a bona
fide decision of management to obtain reasonable return from its investment,
which is a right guaranteed to employers under the Constitution. Indeed, that the
phase-out of the security section constituted a "legitimate business decision" is a
factual finding of an administrative agency which must be accorded respect and
even finality by this Court since nothing can be found in the record which fairly
detracts from such finding.
[13]
[14]
[15]
86
To be sure, this is not the first time this question has arisen. In Sebuguero v.
NLRC, workers in a garment factory were temporarily laid off due to the
cancellation of orders and a garment embargo. The Labor Arbiter found that the
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[16]
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workers had been illegally dismissed and ordered the company to pay separation
pay and backwages. The NLRC, on the other hand, found that this was a case of
retrenchment due to business losses and ordered the payment of separation pay
without backwages. This Court sustained the NLRCs finding. However, as the
company did not comply with the 30-day written notice in Art. 283 of the Labor
Code, the Court ordered the employer to pay the workers P2,000.00 each as
indemnity.
The decision followed the ruling in several cases involving dismissals which,
although based on any of the just causes under Art. 282, were effected without
notice and hearing to the employee as required by the implementing rules. As this
Court said: "It is now settled that where the dismissal of one employee is in fact for
a just and valid cause and is so proven to be but he is not accorded his right to due
process, i.e., he was not furnished the twin requirements of notice and opportunity
to be heard, the dismissal shall be upheld but the employer must be sanctioned for
non-compliance with the requirements of, or for failure to observe, due process."
[17]
[18]
[19]
The rule reversed a long standing policy theretofore followed that even though the
dismissal is based on a just cause or the termination of employment is for an
authorized cause, the dismissal or termination is illegal if effected without notice to
the employee. The shift in doctrine took place in 1989 inWenphil Corp. v.
NLRC. In announcing the change, this Court said:
[20]
[21]
The Court holds that the policy of ordering the reinstatement to the
service of an employee without loss of seniority and the payment of
his wages during the period of his separation until his actual
reinstatement but not exceeding three (3) years without qualification
or deduction, when it appears he was not afforded due process,
although his dismissal was found to be for just and authorized cause
in an appropriate proceeding in the Ministry of Labor and
Employment, should be re-examined. It will be highly prejudicial to
the interests of the employer to impose on him the services of an
employee who has been shown to be guilty of the charges that
warranted his dismissal from employment. Indeed, it will demoralize
the rank and file if the undeserving, if not undesirable, remains in the
service.
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87
....
[23]
[24]
[25]
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We agree with our esteemed colleagues, Justices Puno and Panganiban, that we
should rethink the sanction of fine for an employers disregard of the notice
requirement. We do not agree, however, that disregard of this requirement by an
employer renders the dismissal or termination of employment null and void. Such a
stance is actually a reversion to the discredited pre-Wenphil rule of ordering an
employee to be reinstated and paid backwages when it is shown that he has not
been given notice and hearing although his dismissal or layoff is later found to be
for a just or authorized cause. Such rule was abandoned in Wenphil because it is
really unjust to require an employer to keep in his service one who is guilty, for
example, of an attempt on the life of the employer or the latters family, or when
the employer is precisely retrenching in order to prevent losses.
88
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The need is for a rule which, while recognizing the employees right to notice
before he is dismissed or laid off, at the same time acknowledges the right of the
employer to dismiss for any of the just causes enumerated in Art. 282 or to
terminate employment for any of the authorized causes mentioned in Arts. 283284. If the Wenphil rule imposing a fine on an employer who is found to have
dismissed an employee for cause without prior notice is deemed ineffective in
deterring employer violations of the notice requirement, the remedy is not to
declare the dismissal void if there are just or valid grounds for such dismissal or if
the termination is for an authorized cause. That would be to uphold the right of the
employee but deny the right of the employer to dismiss for cause. Rather, the
remedy is to order the payment to the employee of full backwages from the time of
his dismissal until the court finds that the dismissal was for a just cause. But,
otherwise, his dismissal must be upheld and he should not be reinstated. This is
because his dismissal is ineffectual.
For the same reason, if an employee is laid off for any of the causes in Arts. 283284, i.e., installation of a labor-saving device, but the employer did not give him
and the DOLE a 30-day written notice of termination in advance, then the
termination of his employment should be considered ineffectual and he should be
paid backwages. However, the termination of his employment should not be
considered void but he should simply be paid separation pay as provided in Art.
283 in addition to backwages.
Justice Puno argues that an employers failure to comply with the notice
requirement constitutes a denial of the employees right to due process.
Prescinding from this premise, he quotes the statement of Chief Justice
Concepcion in Vda. de Cuaycong v. Vda. de Sengbengco that "acts of Congress,
as well as of the Executive, can deny due process only under the pain of nullity,
and judicial proceedings suffering from the same flaw are subject to the same
sanction, any statutory provision to the contrary notwithstanding." Justice Puno
concludes that the dismissal of an employee without notice and hearing, even if for
a just cause, as provided in Art. 282, or for an authorized cause, as provided in
Arts. 283-284, is a nullity. Hence, even if just or authorized causes exist, the
employee should be reinstated with full back pay. On the other hand, Justice
Panganiban quotes from the statement in People v. Bocar that "[w]here the denial
of the fundamental right of due process is apparent, a decision rendered in
disregard of that right is void for lack of jurisdiction."
[26]
[27]
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Page
The cases cited by both Justices Puno and Panganiban refer, however, to the denial
of due process by the State, which is not the case here. There are three reasons
why, on the other hand, violation by the employer of the notice requirement cannot
be considered a denial of due process resulting in the nullity of the employees
dismissal or layoff.
89
The first is that the Due Process Clause of the Constitution is a limitation on
governmental powers. It does not apply to the exercise of private power, such as
the termination of employment under the Labor Code. This is plain from the text of
Art. III, 1 of the Constitution, viz.: "No person shall be deprived of life, liberty, or
property without due process of law. . . ." The reason is simple: Only the State has
authority to take the life, liberty, or property of the individual. The purpose of the
Due Process Clause is to ensure that the exercise of this power is consistent with
what are considered civilized methods.
The second reason is that notice and hearing are required under the Due Process
Clause before the power of organized society are brought to bear upon the
individual. This is obviously not the case of termination of employment under Art.
283. Here the employee is not faced with an aspect of the adversary system. The
purpose for requiring a 30-day written notice before an employee is laid off is not
to afford him an opportunity to be heard on any charge against him, for there is
none. The purpose rather is to give him time to prepare for the eventual loss of his
job and the DOLE an opportunity to determine whether economic causes do exist
justifying the termination of his employment.
Even in cases of dismissal under Art. 282, the purpose for the requirement of
notice and hearing is not to comply with Due Process Clause of the Constitution.
The time for notice and hearing is at the trial stage. Then that is the time we speak
of notice and hearing as the essence of procedural due process. Thus, compliance
by the employer with the notice requirement before he dismisses an employee does
not foreclose the right of the latter to question the legality of his dismissal. As Art.
277(b) provides, "Any decision taken by the employer shall be without prejudice to
the right of the worker to contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National Labor Relations Commission."
Indeed, to contend that the notice requirement in the Labor Code is an aspect of
due process is to overlook the fact that Art. 283 had its origin in Art. 302 of the
Spanish Code of Commerce of 1882 which gave either party to the employeremployee relationship the right to terminate their relationship by giving notice to
the other one month in advance. In lieu of notice, an employee could be laid off by
paying him a mesada equivalent to his salary for one month. This provision was
repealed by Art. 2270 of the Civil Code, which took effect on August 30, 1950.
But on June 12, 1954, R.A. No. 1052, otherwise known as the Termination Pay
Law, was enacted reviving the mesada. On June 21, 1957, the law was amended by
R.A. No. 1787 providing for the giving of advance notice or the payment of
compensation at the rate of one-half month for every year of service.
[28]
[29]
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90
The Termination Pay Law was held not to be a substantive law but a regulatory
measure, the purpose of which was to give the employer the opportunity to find a
replacement or substitute, and the employee the equal opportunity to look for
another job or source of employment. Where the termination of employment was
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for a just cause, no notice was required to be given to the employee. It was only
on September 4, 1981 that notice was required to be given even where the
dismissal or termination of an employee was for cause. This was made in the rules
issued by the then Minister of Labor and Employment to implement B.P. Blg. 130
which amended the Labor Code. And it was still much later when the notice
requirement was embodied in the law with the amendment of Art. 277(b) by R.A.
No. 6715 on March 2, 1989. It cannot be that the former regime denied due process
to the employee. Otherwise, there should now likewise be a rule that, in case an
employee leaves his job without cause and without prior notice to his employer, his
act should be void instead of simply making him liable for damages.
[30]
The third reason why the notice requirement under Art. 283 can not be considered
a requirement of the Due Process Clause is that the employer cannot really be
expected to be entirely an impartial judge of his own cause. This is also the case in
termination of employment for a just cause under Art. 282 (i.e., serious misconduct
or willful disobedience by the employee of the lawful orders of the employer, gross
and habitual neglect of duties, fraud or willful breach of trust of the employer,
commission of crime against the employer or the latters immediate family or duly
authorized representatives, or other analogous cases).
Justice Puno disputes this. He says that "statistics in the DOLE will prove that
many cases have been won by employees before the grievance committees manned
by impartial judges of the company." The grievance machinery is, however,
different because it is established by agreement of the employer and the employees
and composed of representatives from both sides. That is why, in Batangas Laguna
Tayabas Bus Co. v. Court of Appeals, which Justice Puno cites, it was held that
"Since the right of [an employee] to his labor is in itself a property and that the
labor agreement between him and [his employer] is the law between the parties, his
summary and arbitrary dismissal amounted to deprivation of his property without
due process of law." But here we are dealing with dismissals and layoffs by
employers alone, without the intervention of any grievance machinery.
Accordingly in Montemayor v. Araneta University Foundation, although a
professor was dismissed without a hearing by his university, his dismissal for
having made homosexual advances on a student was sustained, it appearing that in
the NLRC, the employee was fully heard in his defense.
[31]
[32]
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91
[33]
resignation, as the case may be) void. The measure of damages is the amount of
wages the employee should have received were it not for the termination of his
employment without prior notice. If warranted, nominal and moral damages may
also be awarded.
We hold, therefore, that, with respect to Art. 283 of the Labor Code, the
employers failure to comply with the notice requirement does not constitute a
denial of due process but a mere failure to observe a procedure for the termination
of employment which makes the termination of employment merely ineffectual. It
is similar to the failure to observe the provisions of Art. 1592, in relation to Art.
1191, of the Civil Code in rescinding a contract for the sale of immovable
property. Under these provisions, while the power of a party to rescind a contract is
implied in reciprocal obligations, nonetheless, in cases involving the sale of
immovable property, the vendor cannot exercise this power even though the
vendee defaults in the payment of the price, except by bringing an action in court
or giving notice of rescission by means of a notarial demand. Consequently, a
notice of rescission given in the letter of an attorney has no legal effect, and the
vendee can make payment even after the due date since no valid notice of
rescission has been given.
[34]
[35]
[36]
Indeed, under the Labor Code, only the absence of a just cause for the termination
of employment can make the dismissal of an employee illegal. This is clear from
Art. 279 which provides:
Security of Tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just
causeor when authorized by this Title. An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.
[38]
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Thus, only if the termination of employment is not for any of the causes provided
by law is it illegal and, therefore, the employee should be reinstated and paid
backwages. To contend, as Justices Puno and Panganiban do, that even if the
termination is for a just or authorized cause the employee concerned should be
reinstated and paid backwages would be to amend Art. 279 by adding another
ground for considering a dismissal illegal. What is more, it would ignore the fact
that under Art. 285, if it is the employee who fails to give a written notice to the
employer that he is leaving the service of the latter, at least one month in advance,
his failure to comply with the legal requirement does not result in making his
resignation void but only in making him liable for damages. This disparity in
legal treatment, which would result from the adoption of the theory of the minority
cannot simply be explained by invoking President Ramon Magsaysays motto that
92
[37]
"he who has less in life should have more in law." That would be a misapplication
of this noble phrase originally from Professor Thomas Reed Powell of the Harvard
Law School.
Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC, in support of his view
that an illegal dismissal results not only from want of legal cause but also from the
failure to observe "due process." The Pepsi-Cola case actually involved a dismissal
for an alleged loss of trust and confidence which, as found by the Court, was not
proven. The dismissal was, therefore, illegal, not because there was a denial of due
process, but because the dismissal was without cause. The statement that the
failure of management to comply with the notice requirement "taints the dismissal
with illegality" was merely a dictum thrown in as additional grounds for holding
the dismissal to be illegal.
[39]
Given the nature of the violation, therefore, the appropriate sanction for the failure
to give notice is the payment of backwages for the period when the employee is
considered not to have been effectively dismissed or his employment terminated.
The sanction is not the payment alone of nominal damages as Justice Vitug
contends.
Unjust Results of Considering Dismissals/Layoffs Without Prior Notice As
Illegal
The refusal to look beyond the validity of the initial action taken by the employer
to terminate employment either for an authorized or just cause can result in an
injustice to the employer. For not giving notice and hearing before dismissing an
employee, who is otherwise guilty of, say, theft, or even of an attempt against the
life of the employer, an employer will be forced to keep in his employ such guilty
employee. This is unjust.
It is true the Constitution regards labor as "a primary social economic force." But
so does it declare that it "recognizes the indispensable role of the private sector,
encourages private enterprise, and provides incentives to needed
investment." The Constitution bids the State to "afford full protection to
labor." But it is equally true that "the law, in protecting the rights of the laborer,
authorizes neither oppression nor self-destruction of the employer." And it is
oppression to compel the employer to continue in employment one who is guilty or
to force the employer to remain in operation when it is not economically in his
interest to do so.
[40]
[41]
[42]
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In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown
that the termination of employment was due to an authorized cause, then the
employee concerned should not be ordered reinstated even though there is failure
to comply with the 30-day notice requirement. Instead, he must be granted
separation pay in accordance with Art. 283, to wit:
93
[43]
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94
SO ORDERED.
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Carpio,
Austria-Martinez,
Corona,
Carpio-Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario, and
Garcia, JJ.
Promulgated:
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Respondents.
95
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x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks to reverse the decision[1] of the Court of
Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, modifying the
decision of National Labor Relations Commission (NLRC) in NLRC-NCR Case No.
023442-00.
Jenny M. Agabon
Virgilio C. Agabon
P56, 231.93
56, 231.93
Page
96
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On appeal, the NLRC reversed the Labor Arbiter because it found that the
petitioners had abandoned their work, and were not entitled to backwages
and separation pay. The other money claims awarded by the Labor Arbiter
were also denied for lack of evidence.[5]
Upon denial of their motion for reconsideration, petitioners filed a
petition for certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners
was not illegal because they had abandoned their employment but ordered
the payment of money claims. The dispositive portion of the decision reads:
97
Page
SO ORDERED.[6]
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Hence, this petition for review on the sole issue of whether petitioners
were illegally dismissed.[7]
Petitioners assert that they were dismissed because the private
respondent refused to give them assignments unless they agreed to work on
a pakyaw basis when they reported for duty on February 23, 1999. They did
not agree on this arrangement because it would mean losing benefits as Social
Security System (SSS) members. Petitioners also claim that private respondent
did not comply with the twin requirements of notice and hearing.[8]
Private respondent, on the other hand, maintained that petitioners were
not dismissed but had abandoned their work.[9] In fact, private respondent
sent two letters to the last known addresses of the petitioners advising them
to report for work. Private respondents manager even talked to petitioner
Virgilio Agabon by telephone sometime in June 1999 to tell him about the new
assignment at Pacific Plaza Towers involving 40,000 square meters of cornice
installation work. However, petitioners did not report for work because they
had subcontracted to perform installation work for another company.
Petitioners also demanded for an increase in their wage to P280.00 per day.
When this was not granted, petitioners stopped reporting for work and filed
the illegal dismissal case.[10]
It is well-settled that findings of fact of quasi-judicial agencies like the
NLRC are accorded not only respect but even finality if the findings are
supported by substantial evidence. This is especially so when such findings
were affirmed by the Court of Appeals.[11] However, if the factual findings of
the NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing
court may delve into the records and examine for itself the questioned
findings.[12]
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Page
To dismiss an employee, the law requires not only the existence of a just
and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself.[13] Article 282 of the Labor
Code enumerates the just causes for termination by the employer: (a) serious
98
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99
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The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of
notice and hearing in the termination of employment. On the other hand, the
law also recognizes the right of the employer to expect from its workers not
only good performance, adequate work and diligence, but also good
conduct[19] and loyalty. The employer may not be compelled to continue to
employ such persons whose continuance in the service will patently be inimical
to his interests.[20]
After establishing that the terminations were for a just and valid cause,
we now determine if the procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I,
Section 2(d) of the Omnibus Rules Implementing the Labor Code:
Standards of due process: requirements of notice. In all
cases of termination of employment, the following standards of due
process shall be substantially observed:
I.
For termination of employment based on just causes as
defined in Article 282 of the Code:
(a)
A written notice served on the employee specifying the
ground or grounds for termination, and giving to said employee
reasonable opportunity within which to explain his side;
(b)
A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so desires,
is given opportunity to respond to the charge, present his evidence
or rebut the evidence presented against him; and
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100
(c)
A written notice of termination served on the
employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.
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In the second and third situations where the dismissals are illegal, Article
279 mandates that the employee is entitled to reinstatement without loss of
seniority rights and other privileges and full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from
101
In the first situation, the dismissal is undoubtedly valid and the employer
will not suffer any liability.
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the time the compensation was not paid up to the time of actual
reinstatement.
In the fourth situation, the dismissal should be upheld. While the
procedural infirmity cannot be cured, it should not invalidate the dismissal.
However, the employer should be held liable for non-compliance with the
procedural requirements of due process.
The present case squarely falls under the fourth situation. The dismissal
should be upheld because it was established that the petitioners abandoned
their jobs to work for another company. Private respondent, however, did not
follow the notice requirements and instead argued that sending notices to the
last known addresses would have been useless because they did not reside
there anymore. Unfortunately for the private respondent, this is not a valid
excuse because the law mandates the twin notice requirements to the
employees last known address.[21] Thus, it should be held liable for noncompliance with the procedural requirements of due process.
A review and re-examination of the relevant legal principles is
appropriate and timely to clarify the various rulings on employment
termination in the light of Serrano v. National Labor Relations Commission.[22]
Prior to 1989, the rule was that a dismissal or termination is illegal if the
employee was not given any notice. In the 1989 case of Wenphil Corp. v.
National Labor Relations Commission,[23] we reversed this long-standing rule
and held that the dismissed employee, although not given any notice and
hearing, was not entitled to reinstatement and backwages because the
dismissal was for grave misconduct and insubordination, a just ground for
termination under Article 282. The employee had a violent temper and caused
trouble during office hours, defying superiors who tried to pacify him. We
concluded that reinstating the employee and awarding backwages may
encourage him to do even worse and will render a mockery of the rules of
discipline that employees are required to observe.[24] We further held that:
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102
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The rule thus evolved: where the employer had a valid reason to dismiss
an employee but did not follow the due process requirement, the dismissal
may be upheld but the employer will be penalized to pay an indemnity to the
employee. This became known as the Wenphil or Belated Due Process Rule.
On January 27, 2000, in Serrano, the rule on the extent of the sanction
was changed. We held that the violation by the employer of the notice
requirement in termination for just or authorized causes was not a denial of
due process that will nullify the termination. However, the dismissal is
ineffectual and the employer must pay full backwages from the time of
termination until it is judicially declared that the dismissal was for a just or
authorized cause.
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103
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We believe, however, that the ruling in Serrano did not consider the full
meaning of Article 279 of the Labor Code which states:
ART. 279. Security of Tenure. In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
This means that the termination is illegal only if it is not for any of the
justified or authorized causes provided by law. Payment of backwages and
other benefits, including reinstatement, is justified only if the employee was
unjustly dismissed.
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104
The fact that the Serrano ruling can cause unfairness and injustice which
elicited strong dissent has prompted us to revisit the doctrine.
Due process under the Labor Code, like Constitutional due process, has
two aspects: substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of
dismissal. Procedural due process requirements for dismissal are found in the
Implementing Rules of P.D. 442, as amended, otherwise known as the Labor
Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by Department
Order Nos. 9 and 10.[27] Breaches of these due processrequirements violate the
Labor Code. Therefore statutory due process should be differentiated from
failure to comply withconstitutional due process.
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Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services,
Inc. v. National Labor Relations Commission,[30]which opinion he reiterated
in Serrano, stated:
105
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This would encourage frivolous suits, where even the most notorious
violators of company policy are rewarded by invoking due process. This also
creates absurd situations where there is a just or authorized cause for
dismissal but a procedural infirmity invalidates the termination. Let us take for
example a case where the employee is caught stealing or threatens the lives of
his co-employees or has become a criminal, who has fled and cannot be found,
or where serious business losses demand that operations be ceased in less
than a month. Invalidating the dismissal would not serve public interest. It
could also discourage investments that can generate employment in the local
economy.
106
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107
This is not to say that the Court was wrong when it ruled the way it did
in Wenphil, Serrano and related cases. Social justice is not based on rigid
formulas set in stone. It has to allow for changing times and circumstances.
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Justice in every case should only be for the deserving party. It should not
be presumed that every case of illegal dismissal would automatically be
decided in favor of labor, as management has rights that should be fully
respected and enforced by this Court. As interdependent and indispensable
partners in nation-building, labor and management need each other to foster
productivity and economic growth; hence, the need to weigh and balance the
rights and welfare of both the employee and employer.
Page
108
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights, as ruled in Reta v. National Labor Relations
Commission.[36] The indemnity to be imposed should be stiffer to discourage
the abhorrent practice of dismiss now, pay later, which we sought to deter in
the Serrano ruling. The sanction should be in the nature of indemnification or
penalty and should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer.
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Private respondent claims that the Court of Appeals erred in holding that
it failed to pay petitioners holiday pay, service incentive leave pay and
13th month pay.
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As a general rule, one who pleads payment has the burden of proving it.
Even where the employee must allege non-payment, the general rule is that
the burden rests on the employer to prove payment, rather than on the
employee to prove non-payment. The reason for the rule is that the pertinent
109
Anent the deduction of SSS loan and the value of the shoes from
petitioner Virgilio Agabons 13th month pay, we find the same to be
unauthorized. The evident intention of Presidential Decree No. 851 is to grant
an additional income in the form of the 13th month pay to employees not
already receiving the same[43] so as to further protect the level of real wages
from the ravages of world-wide inflation.[44] Clearly, as additional income, the
13th month pay is included in the definition of wage under Article 97(f) of the
Labor Code, to wit:
(f)
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from which an employer is prohibited under Article 113[45] of the same Code
from making any deductions without the employees knowledge and consent.
110
In the instant case, private respondent failed to show that the deduction of the
SSS loan and the value of the shoes from petitioner Virgilio Agabons
13th month pay was authorized by the latter. The lack of authority to deduct is
further bolstered by the fact that petitioner Virgilio Agabon included the same
as one of his money claims against private respondent.
No costs.
Page
111
SO ORDERED.
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Alcaraz further claims that the Court erred in considering her dismissal
on the third month of her probationary employment to be a mere due
process violation that only warrants an award of nominal damages. In
support, Alcaraz cites Abbott's own rules under which Abbott must
evaluate Alcaraz's performance on the third and fifth months of the
probationary period; if Abbott finds Alcaraz to be underperforming on the
third month, Abbott should come up with a performance improvement
plan (PEP). Only upon her failure to meet this PEP that Abbott may end
her probationary employment.
112
Alcaraz also points out that Abbott failed to abide by its own rules and
immediately dismissed Alcaraz, without any just cause under Article 281
of the Labor Code to support its action. Without a just cause, the
dismissal is illegal and entitles her to reinstatement and backwages.
Lastly, even assuming that Abbott can terminate Alcaraz at any time for
failure to qualify for regularization, it is clear that Abbott "merely feigned
its dissatisfaction"3 of Alcarazs job performance as shown by the highhanded manner Abbott used in implementing her dismissal.
THE COMMENT
In their Comment, the petitioners maintained the correctness of the
Courts ruling on both procedural and substantive grounds.
Abbott argues that the Court correctly proceeded as it did in evaluating
the facts and evidence in deciding the case. While the Court does not
normally embark on the re-examination of the evidence presented by the
parties, it may do so when, among others: (i) the findings are grounded
entirely on speculation, surmises or conjectures; (ii) the judgment is
based on misapprehension of facts; (iii) the findings of fact are
conflicting; (iv) when the findings are contrary to the trial court; and (v)
the Court of Appeals (CA) manifestly overlooked certain relevant facts
not disputed by the parties which, if properly considered, would justify a
different conclusion. In the present case, all these instances are present.
The probationary nature of Alcarazs employment is clear from the
evidence and should be respected. In fact, in her reply-letter to Abbott,
Alcaraz even asked that the probationary period of six months be
reduced to three months since "Abbott can already determine if [she] is
fit for the position."4 Her statement does not only show her knowledge of
the nature of her employment but proves her acknowledgment that there
were standards to be met and that the company will evaluate her
compliance with these standards.
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113
The petitioners posit that this same statement belies Alcarazs claim that
she was not informed of these standards.5In fact, Alcaraz herself
admitted that "Abbott has only one evaluation system for all types of
employees in the organization."6 She knew that she had to undergo the
The petitioners also note that in signing her appointment paper, Alcaraz
agreed "to abide by all existing policies, rules and regulations of the
company, as well as those, which may hereinafter be promulgated."7 All
these taken together comply with the legal requirement that the
probationary employee be informed of the reasonable standards at the
time of her engagement.
Citing Alcira v. NLRC,8 the petitioners claim that they "substantially
complied" with the notification requirement since they informed Alcaraz
of the PPSE; it is only natural that the evaluation should be made vis-vis the performance standards for the job.
DISCUSSION
A. Procedural Objection
I shall first address the petitioners claim that the Court can normally
undertake a review of the facts and evidence under a Rule 45 petition,
citing the numerous exceptions to what is otherwise claimed as the
general rule. In doing so, I reiterate my position in my earlier Dissent,
with added arguments to specifically address the petitioners claim and
the ponencias present explanation.
A1. The Rule 65 petition and Montoya v. Transmed
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Once the CA decision reaches the Court under a Rule 45 petition for
review on certiorari, from what prism does the Court examine the CA
decision? Note that Rule 45 of the Rules of Court limits the scope of the
petition to "pure questions of law."9 This review is not a matter of right
but of sound judicial discretion. Obviously, the sound judicial discretion
requirement is meant to limit what could otherwise be an unlimited
exercise of discretion by the Highest Court to lay open and review the
whole case, both as to fact and law.
114
When a labor case reaches the judicial system, courts must proceed
based on two basic premises: first, the ruling of the National Labor
Relations Commission (NLRC) is declared by law to be a final ruling that
is no longer appealable; and second, the only remedy left to set aside or
modify this ruling is through a Rule 65 review by the CA that is narrowly
grounded on jurisdictional errors i.e., whether the NLRC acted without
or in excess of its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction.
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115
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116
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117
xxxx
that, by law, the employer set or prescribed at the time of the employees
engagement. If none had been prescribed in the first place, under what
basis could the employee then be assessed for purposes of termination
or regularization?
Second, in considering the "ancillary issue" as a proper subject of a Rule
45 petition for review on certiorari of a ruling rendered under a Rule 65
petition, the ponencia apparently fails to distinguish the difference
between errors of law and errors of jurisdiction in an attempt to justify its
decision that is based solely on assumptions.
Error of jurisdiction is one where the act complained of was issued by
the court without or in excess of jurisdiction. This is the province of the
writ of certiorari. The writ of certiorari will not be issued to cure errors in
the appreciation of the evidence of the parties, and its conclusions
anchored on the said findings and its conclusions of law. If the CA finds
that the NLRC committed no error of jurisdiction, the Courts task is to
only determine the legal correctness of this CA finding and not to
supplant the NLRC and the CAs conclusion with what the Court thinks
should be the correct interpretation of the law, in utter disregard of the
different levels of review the case underwent. If the Court will undertake
a review of the "ancillary issues" suggested by the ponencia, the Court
will in effect create a right of appeal from the NLRC ruling when the law
confers none.
Too, a Rule 65 petition requires the presence of grave abuse of
discretion and not mere abuse of discretion before courts may issue
the corrective writ of certiorari in labor cases not only because the ruling
under review is already final; but, more importantly, because the
appreciation of the evidence and its legal effects carries with it discretion
within the bounds of the law. The discretion granted to the NLRC to
affirm or reverse the LA, on one hand, and the discretion granted to the
CA to determine whether grave abuse of discretion attended the NLRCs
ruling, on the other hand, are discretions within legal bounds that the
Court cannot supplant at will, much less via mere assumption.
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118
In sum, these are what the NLRC and the CA found as matters of fact
and law:
2. The employment contract does not show that Alcaraz had been
apprised of the requirements to become a regular employee.
3. The Labor Arbiters reasoning that a top level pharmaceutical
corporation would not be remiss in leaving its standards of
continued employment undisclosed to its employees is simply non
sequitur.
4. Alcaraz receipt of Abbotts Code of Good Corporate Conduct,
Probationary Performance Standards and Evaluation and
Performance Excellence Orientation Modules for the Hospira
ALSU Staff cannot be equated with being actually informed of the
performance standards.
Notably, what Alcaraz received was the Probationary Performance
Standards for the Hospira ALSU Staff.
5. Alcaraz received these various documents not at the time of her
engagement but only on March 3, 2005 or a month after her
engagement.
6. Abbotts claim on Alcaraz poor performance (on account of her
tardiness, poor time management, failure to build effective rapport,
non-completion of training and poor time management skills) [was]
not supported by evidence.
7. There is also no evidence to show that Abbott conveyed to or
confronted Alcaraz with her alleged inefficiencies or incompetence
at any time during her tenure with Abbott.
8. While Abbott has a standard operating procedure in evaluating
probationary employees, there is no evidence that Alcaraz
underwent this procedure.
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Based on these findings, the CA correctly determined that the NLRC did
not commit grave abuse of discretion in reversing the LAs ruling.
Consider the following: first, the LAs ruling that Alcaraz was apprised of
the reasonable standards (to qualify as regular employee) was merely
based on Alcarazs factual narrations in her position paper narrations
119
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120
its power to hire. If the employer opts for the latter, however, he may not
easily sever the relationship without proving the existence of a just or
authorized cause and without complying with procedural due process. If
the employer opts to hire an employee on a probationary basis, valid
severance of the employer-employee relationship - outside of the just
and authorized causes - presupposes that the employer had
accomplished the following things:
1. The employer must communicate to the employee that he is
being hired on a probationary basis;
2. The employer must convey to the probationary employee the
reasonable standards to qualify for regularization;
3. The probationary status of the newly-hired employee must be
communicated to him prior to the commencement of his
employment;
4. The employer must convey these reasonable standards at the
time of the probationary employees engagement;
5. The employer must evaluate the performance of the
probationary employee vis the duly communicated reasonable
standards; and
6. The employee fails to comply with these reasonable standards
before the completion of the probationary period.
These cumulative requirements are demanded from the employer itself
and cannot be supplied for him by law. These requirements, too, should
serve to dispel the wrong notion that a probationary employee enjoys
lesser rights than a regular employee under the Labor Code. Since a
probationary employment is not an "employment at will" situation as that
phrase is understood in American jurisprudence, the only way by which
the constitutional guarantee of security of tenure may be enforced is to
ensure that the employer sufficiently discharges its burden of proving
compliance with these requirements in the same manner that it is
burdened to prove the existence of a valid cause in dismissing an
employee.16
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121
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In the same manner that the probationary period of employment (or trial
period) is meant to serve the interests of both the employer and the
employee, the requirement of reasonable standards seeks to protect the
rights of both the employer (to his management prerogative) and the
employee (since his employment is in a sense a property right).
122
The reason for requiring the existence of reasonable standards that are
duly communicated to the employee is not hard to discern. The
probationary period of employment is not exclusively for the benefit of
the employer but of both the employer and the employee: on one hand,
the employer observes the fitness, propriety and efficiency of a
probationary employee to ascertain whether she is qualified for
permanent employment; the probationary employee, on the other hand,
seeks to prove to the employer that she has the qualifications to meet
the reasonable standards duly communicated by the employer for
permanent employment.
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123
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In the present case, while the ponencia did not and could not
expressly claim that the petitioners case falls within the exceptions it
oddly leaned on the exceptions to stretch its reading of the general rule.
124
This legal maneuvering is most unwarranted for going against the basic
principle in dismissal-of-employees cases, i.e., the burden of proof rests
upon the employer to show that the dismissal is for a just cause and
failure to do so would necessarily mean that the dismissal is not
justified.21
These observations lead to the conclusion that the laws demand for
compliance with the two requirements (for a valid probationary
employment to exist) becomes greater as the complexity of the job
increases since the same complex nature of the job results in varying
needs and specific expectations from different employers that are
engaged in the same line of industry. Hence, it is highly inappropriate to
cite Alcarazs "extensive training and background" to effectively make up
for Abbotts own failure to comply with the requirements of the law.
In other words, the more complex the job is (like that of managerial
employee) the more it becomes necessary to specify what the
employers specific expectations are vis--vis the duties and
responsibilities that the job entails. In this manner, compliance with the
twin requirements of a valid probationary employment may require the
employer to lay down a quantitative or qualitative standard (or both) in
measuring the performance of a probationary employee.
In the present case, none of the petitioners evidence shows what these
quantitative and/or qualitative standards are.
Interestingly, even if these documents were not given to Alcaraz for the
purpose of communicating the performance standards that apply to her,
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125
Abbott claims that since it has only one evaluation system for all its
employees, Alcaraz very well knew that the contents of these documents
would be the same measure in evaluating Alcarazs performance.
However, the facts, as found by the ponencia itself, tell otherwise, i.e.,
that Alcaraz was actually subjected to a different work performance
evaluation:
On April 20, 2005, Alcaraz had a meeting with petitioner Cecille Terrible
(Terrible), Abbotts former HR Director, to discuss certain issues
regarding staff performance standards. In the course x x x thereof,
Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh to
some staff members which essentially contained queries regarding the
formers job performance. Alcaraz asked if Walshs action was the
normal process of evaluation. Terrible said that it was not.22 (emphasis
ours)
This is a uniform, undisputed finding of fact of the LA, the NLRC and the
CA. Given the difference in treatment by Abbott in Alcarazs case, Abbott
cannot avoid the conclusion that it may only legally be allowed to divert
from the usual procedure on the ground that Alcaraz is actually bound by
a different set of specific expectations by her employer because of the
nature of the duties and responsibilities that a managerial employee like
her has to discharge. If she is bound by a different set of expectations,
then Abbott must prove what these expectations are in order to comply
with the requiredperformance standards.
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Abbotts own admission that it had only one evaluation system for all of
its employees actually backfires against it for being inconsistent with its
own conduct (when it subjected Alcaraz to a different evaluation
process) and omission (when it failed to communicate to Alcaraz the
performance standards that are actually applicable to her). By itself, its
admission proves the utter lack of evidence to show Abbotts compliance
with the first (and, much less the second) requirement of a valid
probationary employee. If Abbott would insist on the uniformity of its
performance standard, one can be tempted to ask whether Abbott can
assess its Regulatory Affairs Manager, like Alcaraz, who has an initial
salary of P110,000.00 on the same standard Abbott applies to its office
126
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First, the labor tribunals and the CA uniformly found the lack of
performance standards duly communicated to the employee. In the
present case, the fact that the LA arrived at a conclusion different from
those reached by the NLRC and the CA does not authorize the Court to
simply brush aside the factual findings at these two levels of review
because the Courts jurisdiction under a Rule 45 petition is limited. More
importantly, the LAs ruling itself was legally and factually baseless, thus
warranting its reversal on appeal.
127
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128
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129
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On this point and contrary to the ponencias view, Abbotts noncompliance with the terms of the PPSE cannot be regarded as a mere
matter of procedural lapse. In reality, one cannot divorce the
requirement of reasonable standards and of duly communicating it to the
probationary employee, on one hand, and the requirement that the
employee, in fact, failed to comply with these standards in the manner
that the employer himself had contractually determined if only to give life
to the constitutional guarantee of security of tenure to all workers, on the
130
other hand. For this reason, the ponencia cannot insist that the noncompliance with the PPSE is only a formal defect and yet claim that
adequacy of performance is not reducible to figures. Abbott cannot have
its cake and eat it too.
Notably, prior to or at the time of Alcarazs engagement, Abbotts
communications to Alcaraz comprised only of: (i) her job description; (ii)
the duties and responsibilities attached to the position; (iii) the conditions
of her employment, i.e., the position title, the assigned department, the
status of employment, and the period of employment; (iv) Abbotts
organizational structure; and (v) what she had to implement, i.e.,
Abbotts Code of Conduct, office policies on human resources and
finance, and to whom she would be reporting to.
Even if we go by the ponencias reasoning, these communications by
themselves do not establish the legal gauge of "adequacy" of
performance by which Alcarazs probationary performance would be
measured. To emphasize, Abbotts PPSE serves as a legal gauge to
measure the adequacy of Alcarazs performance. Unfortunately, the
silence of the ponencia and the dearth of evidence on why this legal
gauge was not applied to Alcaraz would keep this aspect of the case in
mystery. To make matters worse, the PPSE (together with the
Performance Excellence Orientation Modules) was given to Alcaraz
almost a month after her engagement.
In other words, even the "totality of circumstances" approach by the
ponencia is fractured from the very start. The 2nd requirement for a valid
probationary employment under the Labor Code is, in fact, an offshoot of
the first requirement of a reasonable standard: a standard is reasonable
not only because it lays down the employers specific expectations
applicable to a particular type of employee vis the attendant duties and
responsibilities but also because it is duly communicated to the
employee. A belated communication of what the reasonable standard is
deprives the standard of the character of reasonableness.
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131
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Third, the ponencia wrote too early in claiming that it did not undertake a
"factual appellate review" of the case. Yet, it weighed in on the supposed
"reasonableness of [the petitioners] assessment" of Alcarazs
performance because it "clearly appears on the record."35 As the NLRC
132
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133
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134
Since Abbott failed to comply with the requisites for valid probationary
employment, then Alcaraz should be deemed a regular employee who
can be removed only with just or authorized causes. In the present case,
the petitioners failed to show that Alcaraz's dismissal was for a valid
cause. The petitioners also failed to comply with the two-written notice
requirement under Section 2, Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, in violation of Alcaraz's procedural due
process rights under the law.
The narration of facts of the Labor Arbiter, the NLRC and the CA shows,
among others, that: ( 1) the individual petitioners did not follow the
petitioner's prescribed procedure performance evaluation as, in fact, the
respondent's work was not evaluated; (2) the individual petitioners,
through their concerted actions, ganged up on the respondent in forcing
her to resign from employment; (3) the individual petitioners pressured
the respondent to resign by announcing her resignation to the office
staff, thereby subjecting her to unwarranted humiliation; and (4) they
blackmailed the respondent by withholding her personal possessions
until she resigned from employment.
Bad faith can also be inferred from the lack of fairness and
underhandedness employed by the individual petitioners on how they
informed the respondent of the termination of her employment. The
records disclose that the respondent was lured into a meeting on the
pretext that her work performance was to be evaluated; she was caught
off-guard when she was info1med that her employment had been
terminated. Aside from the abrupt notification, bad faith can also be
deduced from the fact that the termination was made immediately
effective; the respondent was immediately banned from the petitioner's
premises after she was informed that her employment had been
terminated.
In these lights, I vote to grant the motion for reconsideration.
Page
135
ARTURO D. BRION
Associate Justice
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On 19 August 1996, the Director of the Regional Office (Regional Director) issued an
Order, the dispositive portion of which reads:
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136
DEFICIENCY
1. ALEXANDER POCDING
P 36,380.85
2. FIDEL BALANGAY
36,380.85
3. BUAGEN CLYDE
36,380.85
4. DENNIS EPI
36,380.85
36,380.85
6. GABRIEL TAMULONG
36,380.85
7. ANTON PEDRO
36,380.85
8. FRANCISCO PINEDA
36,380.85
9. GASTON DUYAO
36,380.85
10. HULLARUB
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
36,380.85
TOTAL
P 763,997.85
xxxx
SO ORDERED.7
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137
EBVSAI filed a motion for reconsideration8 and alleged that the Regional Director
does not have jurisdiction over the subject matter of the case because the money
claim of each private respondent exceeded P5,000. EBVSAI pointed out that the
Regional Director should have endorsed the case to the Labor Arbiter.
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In its 29 May 2001 Decision, the Court of Appeals dismissed the petition and
affirmed the Secretary of Labor's decision. The Court of Appeals adopted the
Secretary of Labor's ruling that RA 7730 repealed the jurisdictional limitation
imposed by Article 129 on Article 128 of the Labor Code. The Court of Appeals also
agreed with the Secretary of Labor's finding that EBVSAI was accorded due process.
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The Court of Appeals also denied EBVSAI's motion for reconsideration in its 26
February 2002 Resolution.
138
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EBVSAI maintains that under Articles 129 and 217(6) of the Labor Code, the Labor
Arbiter, not the Regional Director, has exclusive and original jurisdiction over the
case because the individual monetary claim of private respondents exceeds P5,000.
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139
In this case, EBVSAI does not deny having received the notices of hearing. In fact,
on 29 March and 13 June 1996, Danilo Burgos and Edwina Manao, detachment
commander and bookkeeper of EBVSAI, respectively, appeared before the Regional
Director. They claimed that the 22 March 1996 notice of hearing was received late
and manifested that the notices should be sent to the Manila office. Thereafter, the
notices of hearing were sent to the Manila office. They were also informed of
EBVSAI's violations and were asked to present the employment records of the
private respondents for verification. They were, moreover, asked to submit, within 10
days, proof of compliance or their position paper. The Regional Director validly
acquired jurisdiction over EBVSAI. EBVSAI can no longer question the jurisdiction of
the Regional Director after receiving the notices of hearing and after appearing
before the Regional Director.
EBVSAI also argues that the case falls under the exception clause in Article 128(b)
of the Labor Code. EBVSAI asserts that the Regional Director should have certified
the case to the Arbitration Branch of the National Labor Relations Commission
(NLRC) for a full-blown hearing on the merits.
In Allied Investigation Bureau, Inc. v. Sec. of Labor, we ruled that:
While it is true that under Articles 129 and 217 of the Labor Code, the Labor
Arbiter has jurisdiction to hear and decide cases where the aggregate money
claims of each employee exceeds P5,000.00, said provisions of law do not
contemplate nor cover the visitorial and enforcement powers of the Secretary
of Labor or his duly authorized representatives.
Rather, said powers are defined and set forth in Article 128 of the Labor Code
(as amended by R.A. No. 7730) thus:
Art. 128 Visitorial and enforcement power. --- x x x
(b) Notwithstanding the provisions of Article[s] 129 and 217 of this
Code to the contrary, and in cases where the relationship of employeremployee still exists, the Secretary of Labor and Employment or his
duly authorized representatives shall have the power to issue
compliance orders to give effect to [the labor standards provisions of
this Code and other] labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers
made in the course of inspection.The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where the
employer contests the findings of the labor employment and
enforcement officer and raises issues supported by documentary
proofs which were not considered in the course of inspection.
xxxx
Page
This was further affirmed in our ruling in Cirineo Bowling Plaza, Inc. v.
Sensing,24 where we sustained the jurisdiction of the DOLE Regional Director and
held that "the visitorial and enforcement powers of the DOLE Regional Director
to order and enforce compliance with labor standard laws can be exercised
even where the individual claim exceeds P5,000."
140
The aforequoted provision explicitly excludes from its coverage Articles 129
and 217 of the Labor Code by the phrase "(N)otwithstanding the provisions of
Articles 129 and 217of this Code to the contrary x x x" thereby retaining and
further strengthening the power of the Secretary of Labor or his duly
authorized representatives to issue compliance orders to give effect to the
labor standards provisions of said Code and other labor legislation based on
the findings of labor employment and enforcement officer or industrial safety
engineer made in the course of inspection.23 (Italics in the original)
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However, if the labor standards case is covered by the exception clause in Article
128(b) of the Labor Code, then the Regional Director will have to endorse the case
to the appropriate Arbitration Branch of the NLRC. In order to divest the Regional
Director or his representatives of jurisdiction, the following elements must be
present: (a) that the employer contests the findings of the labor regulations officer
and raises issues thereon; (b) that in order to resolve such issues, there is a need to
examine evidentiary matters; and (c) that such matters are not verifiable in the
normal course of inspection.25 The rules also provide that the employer shall raise
such objections during the hearing of the case or at any time after receipt of the
notice of inspection results.26
In this case, the Regional Director validly assumed jurisdiction over the money
claims of private respondents even if the claims exceeded P5,000 because such
jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and
the case does not fall under the exception clause.
The Court notes that EBVSAI did not contest the findings of the labor regulations
officer during the hearing or after receipt of the notice of inspection results. It was
only in its supplemental motion for reconsideration before the Regional Director that
EBVSAI questioned the findings of the labor regulations officer and presented
documentary evidence to controvert the claims of private respondents. But even if
this was the case, the Regional Director and the Secretary of Labor still looked into
and considered EBVSAI's documentary evidence and found that such did not
warrant the reversal of the Regional Director's order. The Secretary of Labor also
doubted the veracity and authenticity of EBVSAI's documentary evidence. Moreover,
the pieces of evidence presented by EBVSAI were verifiable in the normal course of
inspection because all employment records of the employees should be kept and
maintained in or about the premises of the workplace, which in this case is in
Ambuklao Plant, the establishment where private respondents were regularly
assigned.27
WHEREFORE, we DENY the petition. We AFFIRM the 29 May 2001 Decision and
the 26 February 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 57653.
Page
141
SO ORDERED.
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x-----------------------------------------------------------------------------------------x
RESOLUTION
PEOPLES BROADCASTING
SERVICE (BOMBO RADYO
PHILS., INC.),
Petitioner,
- versus -
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Page
142
submitted their position papers, the DOLE Regional Director found that private
respondent was an employee of petitioner, and was entitled to his money
claims.[2] Petitioner sought reconsideration of the Directors Order, but failed.
The Acting DOLE Secretary dismissed petitioners appeal on the ground that
petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a
cash or surety bond. When the matter was brought before the CA, where
petitioner claimed that it had been denied due process, it was held that petitioner
was accorded due process as it had been given the opportunity to be heard, and
that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional
limitation imposed by Article 129 of the Labor Code on the power of the DOLE
Secretary under Art. 128(b) of the Code had been repealed by Republic Act No.
(RA) 7730.[3]
In the Decision of this Court, the CA Decision was reversed and set aside,
and the complaint against petitioner was dismissed. The dispositive portion of
the Decision reads as follows:
WHEREFORE, the petition is GRANTED. The Decision
dated 26 October 2006 and the Resolution dated 26 June 2007 of the
Court of Appeals in C.A. G.R. CEB-SP No. 00855
are REVERSED and SET ASIDE. The Order of the then Acting
Secretary of the Department of Labor and Employment dated 27
January 2005 denying petitioners appeal, and the Orders of the
Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27
February 2004, respectively, are ANNULLED. The complaint
against petitioner isDISMISSED.[4]
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Page
From this Decision, the Public Attorneys Office (PAO) filed a Motion
for Clarification of Decision (with Leave of Court). The PAO sought to clarify
as to when the visitorial and enforcement power of the DOLE be not considered
143
as co-extensive with the power to determine the existence of an employeremployee relationship.[6] In its Comment,[7] the DOLE sought clarification as
well, as to the extent of its visitorial and enforcement power under the Labor
Code, as amended.
The Court treated the Motion for Clarification as a second motion for
reconsideration, granting said motion and reinstating the petition.[8] It is
apparent that there is a need to delineate the jurisdiction of the DOLE Secretary
vis--vis that of the NLRC.
Under Art. 129 of the Labor Code, the power of the DOLE and its duly
authorized hearing officers to hear and decide any matter involving the recovery
of wages and other monetary claims and benefits was qualified by the proviso
that the complaint not include a claim for reinstatement, or that the aggregate
money claims not exceed PhP 5,000. RA 7730, or an Act Further Strengthening
the Visitorial and Enforcement Powers of the Secretary of Labor, did away with
the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial
and enforcement power for claims beyond PhP 5,000. The only qualification to
this expanded power of the DOLE was only that there still be an existing
employer-employee relationship.
144
Page
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The prior decision of this Court in the present case accepts such answer,
but places a limitation upon the power of the DOLE, that is, the determination
of the existence of an employer-employee relationship cannot be co-extensive
with the visitorial and enforcement power of the DOLE. But even in conceding
the power of the DOLE to determine the existence of an employer-employee
relationship, the Court held that the determination of the existence of an
employer-employee relationship is still primarily within the power of the
NLRC, that any finding by the DOLE is merely preliminary.
This conclusion must be revisited.
No limitation in the law was placed upon the power of the DOLE to
determine the existence of an employer-employee relationship. No procedure
was laid down where the DOLE would only make a preliminary finding, that
the power was primarily held by the NLRC. The law did not say that the DOLE
would first seek the NLRCs determination of the existence of an employeremployee relationship, or that should the existence of the employer-employee
relationship be disputed, the DOLE would refer the matter to the NLRC. The
DOLE must have the power to determine whether or not an employer-employee
relationship exists, and from there to decide whether or not to issue compliance
orders in accordance with Art. 128(b) of the Labor Code, as amended by RA
7730.
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Page
145
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Page
There is a view that despite Art. 128(b) of the Labor Code, as amended
by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the
Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and
146
below, the jurisdiction is with the regional director of the DOLE, under Art.
129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the
labor arbiter, under Art. 217. The view states that despite the wording of Art.
128(b), this would only apply in the course of regular inspections undertaken by
the DOLE, as differentiated from cases under Arts. 129 and 217, which
originate from complaints. There are several cases, however, where the Court
has ruled that Art. 128(b) has been amended to expand the powers of the DOLE
Secretary and his duly authorized representatives by RA 7730. In these cases,
the Court resolved that the DOLE had the jurisdiction, despite the amount of the
money claims involved. Furthermore, in these cases, the inspection held by the
DOLE regional director was prompted specifically by a complaint. Therefore,
the initiation of a case through a complaint does not divest the DOLE Secretary
or his duly authorized representative of jurisdiction under Art. 128(b).
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Page
In the present case, the finding of the DOLE Regional Director that there
was an employer-employee relationship has been subjected to review by this
Court, with the finding being that there was no employer-employee relationship
between petitioner and private respondent, based on the evidence
presented. Private respondent presented self-serving allegations as well as selfdefeating evidence.[10] The findings of the Regional Director were not based on
substantial evidence, and private respondent failed to prove the existence of an
employer-employee relationship. The DOLE had no jurisdiction over the case,
147
Page
148
______________________________________________________________
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CELESTINO VIVERO, in this petition for review, seeks the reversal of the
Decision of the Court of Appeals of 26 May 1999 setting aside the Decision of the
National Labor Relations Commission of 28 May 1998 as well as its Resolution of 23
July 1998 denying his motion for its reconsideration, and reinstating the decision of
the Labor Arbiter of 21 January 1997.
Petitioner Vivero, a licensed seaman, is a member of the Associated Marine
Officers and Seamen's Union of the Philippines (AMOSUP). The Collective
Bargaining Agreement entered into by AMOSUP and private respondents provides,
among others -
ARTICLE XII
GRIEVANCE PROCEDURE
xxxx
Sec. 3. A dispute or grievance arising in connection with the terms and provisions
of this Agreement shall be adjusted in accordance with the following procedure:
1. Any seaman who feels that he has been unjustly treated or even subjected to an
unfair consideration shall endeavor to have said grievance adjusted by the
designated representative of the unlicensed department abroad the vessel in the
following manner:
A. Presentation of the complaint to his immediate superior.
B. Appeal to the head of the department in which the seaman involved shall be
employed.
C. Appeal directly to the Master.
Page
149
Sec. 4. If the grievance cannnot be resolved under the provision of Section 3, the
decision of the Master shall govern at sea x x x x in foreign ports and until the
vessel arrives at a port where the Master shall refer such dispute to either the
COMPANY or the UNION in order to resolve such dispute. It is understood,
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however, if the dispute could not be resolved then both parties shall avail of the
grievance procedure.
Sec. 5. In furtherance of the foregoing principle, there is hereby created a
GRIEVANCE COMMITTEE to be composed of two COMPANY
REPRESENTATIVES to be designated by the COMPANY and two LABOR
REPRESENTATIVES to be designated by the UNION.
Sec. 6. Any grievance, dispute or misunderstanding concerning any ruling,
practice, wages or working conditions in the COMPANY, or any breach of the
Employment Contract, or any dispute arising from the meaning or the application
of the provision of this Agreement or a claim of violation thereof or any complaint
that any such crewmembers may have against the COMPANY, as well as
complaint which the COMPANY may have against such crewmembers shall be
brought to the attention of the GRIEVANCE COMMITTEE before either party
takes any action, legal or otherwise.
Sec. 7. The COMMITTEE shall resolve any dispute within seven (7) days from
and after the same is submitted to it for resolution and if the same cannot be settled
by the COMMITTEE or if the COMMITTEE fails to act on the dispute within the
7-day period herein provided, the same shall be referred to a VOLUNTARY
ARBITRATION COMMITTEE.
An "impartial arbitrator" will be appointed by mutual choice and consent of the
UNION and the COMPANY who shall hear and decide the dispute or issue
presented to him and his decision shall be final and unappealable x x x x[1]
As found by the Labor Arbiter -
Complainant was hired by respondent as Chief Officer of the vessel "M.V. Sunny
Prince" on 10 June 1994 under the terms and conditions, to wit:
Duration of Contract - - - - 10 months
Basic Monthly Salary - - - - US $1,100.00
Hours of Work - - - - 44 hrs./week
Overtime - - - - 495 lump O.T.
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Page
On grounds of very poor performance and conduct, refusal to perform his job,
refusal to report to the Captain or the vessels Engineers or cooperate with other
ship officers about the problem in cleaning the cargo holds or of the shipping pump
150
and his dismal relations with the Captain of the vessel, complainant was repatriated
on 15 July 1994.
On 01 August 1994, complainant filed a complaint for illegal dismissal at
Associated Marine Officers and Seamans Union of the Philippines (AMOSUP)
of which complainant was a member. Pursuant to Article XII of the Collective
Bargaining Agreement, grievance proceedings were conducted; however, parties
failed to reach and settle the dispute amicably, thus, on 28 November 1994,
complainant filed [a] complaint with the Philippine Overseas Employment
Administration (POEA).[2]
The law in force at the time petitioner filed his Complaint with the POEA was EO No.
247.[3]
While the case was pending before the POEA, private respondents filed
a Motion to Dismiss on the ground that the POEA had nojurisdiction over the case
considering petitioner Vivero's failure to refer it to a Voluntary Arbitration Committee
in accordance with the CBA between the parties. Upon the enactment of RA 8042,
the Migrant Workers and Overseas Filipinos Act of 1995, the case was transferred to
the Adjudication Branch of the National Labor Relations Commission.
On 21 January 1997 Labor Arbiter Jovencio Ll. Mayor Jr., on the basis of the
pleadings and documents available on record, rendered a decision dismissing
the Complaint for want of jurisdiction.[4] According to the Labor Arbiter, since the CBA
of the parties provided for the referral to a Voluntary Arbitration Committee should
the Grievance Committee fail to settle the dispute, and considering the mandate of
Art. 261 of the Labor Code on the original and exclusive jurisdiction of Voluntary
Arbitrators, the Labor Arbiter clearly had no jurisdiction over the case.[5]
Thus, private respondents raised the case to the Court of Appeals contending
that the provision in the CBA requiring a dispute which remained unresolved by the
Grievance Committee to be referred to a Voluntary Arbitration Committee, was
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Page
The NLRC then remanded the case to the Labor Arbiter for further
proceedings. On 3 July 1998 respondents filed a Motion for Reconsideration which
was denied by the NLRC on 23 July 1998.
151
Petitioner (complainant before the Labor Arbiter) appealed the dismissal of his
petition to the NLRC. On 28 May 1998 the NLRC set aside the decision of the Labor
Arbiter on the ground that the record was clear that petitioner had exhausted his
remedy by submitting his case to the Grievance Committee of
AMOSUP. Considering however that he could not obtain any settlement he had to
ventilate his case before the proper forum, i.e., the Philippine Overseas Employment
Administration.[6] The NLRC further held that the contested portion in the CBA
providing for the intercession of a Voluntary Arbitrator was not binding upon
petitioner since both petitioner and private respondents had to agree voluntarily to
submit the case before a Voluntary Arbitrator or Panel of Voluntary Arbitrators. This
would entail expenses as the Voluntary Arbitrator chosen by the parties had to be
paid. Inasmuch however as petitioner chose to file his Complaint originally with
POEA, then the Labor Arbiter to whom the case was transferred would have to take
cognizance of the case.[7]
mandatory in character in view of the CBA between the parties. They stressed that
"since it is a policy of the state to promote voluntary arbitration as a mode of settling
labor disputes, it is clear that the public respondent gravely abused its discretion in
taking cognizance of a case which was still within the mantle of the Voluntary
Arbitration Commitees jurisdiction."[8]
On the other hand, petitioner argued -
(A)s strongly suggested by its very title, referral of cases of this nature to the
Voluntary Arbitration Committee is voluntary in nature. Otherwise, the committee
would not have been called Voluntary Arbitration Committee but rather, a
Compulsory Arbitration Committee. Moreover, if the referral of cases of similar
nature to the Voluntary Arbitration Committee would be deemed mandatory by
virtue of the provisions in the CBA, the [NLRC] would then be effectively
deprived of its jurisdiction to try, hear and decide termination disputes, as provided
for under Article 217 of the Labor Code. Lastly, [respondents] ought to be deemed
to have waived their right to question the procedure followed by [petitioner],
considering that they have already filed their Position Paper before belatedly
filing a Motion to Dismiss x x x x [9]
But the Court of Appeals ruled in favor of private respondents. It held that the
CBA "is the law between the parties and compliance therewith is mandated by the
express policy of the law."[10] Hence, petitioner should have followed the provision in
the CBA requiring the submission of the dispute to the Voluntary Arbitration
Committee
once
the
Grievance
Committee
failed
to settle
the
[11]
controversy. According to the Court of Appeals, the parties did not have the choice
to "volunteer" to refer the dispute to the Voluntary Arbitrator or a Panel of Arbitrators
when there was already an agreement requiring them to do so. "Voluntary
Arbitration" means that it is binding because of a prior agreement or contract, while
"Compulsory Arbitration" is when the law declares the dispute subject to arbitration,
regardless of the consent or desire of the parties.[12]
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Finally, the appellate court ruled that a case falling under the jurisdiction of the
Labor Arbiter as provided under Art. 217 of the Labor Code may be lodged instead
with a Voluntary Arbitrator because the law prefers, or gives primacy, to voluntary
arbitration instead ofcompulsory arbitration.[15] Consequently, the contention that the
NLRC would be deprived of its jurisdiction to try, hear and decide termination
disputes under Art. 217 of the Labor Code, should the instant dispute be referred to
the Voluntary Arbitration Committee, is clearly bereft of merit. [16] Besides, the
Voluntary Arbitrator, whether acting solely or in a panel, enjoys in law the status of a
152
The Court of Appeals further held that the Labor Code itself enumerates the
original and exclusive jurisdiction of the Voluntary Arbitrator or Panel of Voluntary
Arbitrators, and prohibits the NLRC and the Regional Directors of the Department of
Labor and Employment (DOLE) from entertaining cases falling under the
same.[13] Thus, the fact that private respondents filed their Position Paper first before
filing theirMotion to Dismiss was immaterial and did not operate to confer jurisdiction
upon the Labor Arbiter, following the well-settled rule that jurisdiction is determined
by law and not by consent or agreement of the parties or by estoppel.[14]
quasi-judicial agency independent of, and apart from, the NLRC since his decisions
are not appealable to the latter.[17]
Celestino Vivero, in his petition for review assailing the Decision of the Court of
Appeals, alleges that the appellate court committed grave abuse of discretion in
holding that a Voluntary Arbitrator or Panel of Voluntary Arbitrators, and not the
Adjudication
Branch
of
the
NLRC,
has
jurisdiction
over
his
complaint for illegal dismissal. He claims that his complaint for illegal dismissal was
undeniably a termination dispute and did not, in any way, involve an "interpretation or
implementation of collective bargaining agreement" or "interpretation" or
"enforcement" of company personnel policies. Thus, it should fall within the original
and exclusive jurisdiction of the NLRC and its Labor Arbiter, and not with a Voluntary
Arbitrator, in accordance with Art. 217 of the Labor Code.
Private respondents, on the other hand, allege that the case is clearly one
"involving
the
proper interpretation and implementation of
theGrievance
Procedure found in the Collective Bargaining Agreement (CBA) between the
parties"[18] because of petitioners allegation in his claim/assistance request form
submitted to the Union, to wit:
NATURE OF COMPLAINT
3. Illegal Dismissal - Reason: (1) That in this case it was the master of M.V.
SUNNY PRINCE Capt. Andersen who created the trouble with physical injury and
stating false allegation; (2) That there was no proper procedure of grievance; (3)
No proper notice of dismissal.
Is there a Notice of dismissal? _x_ Yes or ____ No
What date? 11 July 1994
Is there a Grievance Procedure observed? ____ Yes or _x_ No[19]
Private respondents further allege that the fact that petitioner sought the
assistance of his Union evidently shows that he himself was convinced that
his Complaint was within the ambit of the jurisdiction of the grievance machinery and
subsequently by a Panel of Voluntary Arbitrators as provided for in their CBA, and as
explicitly mandated by Art. 261 of the Labor Code.[20]
Page
On the original and exclusive jurisdiction of Labor Arbiters, Art. 217 of the Labor
Code provides -
153
Thus, the issue is whether the NLRC is deprived of jurisdiction over illegal
dismissal cases whenever a CBA provides for grievance machinery and voluntary
arbitration proceedings. Or, phrased in another way, does the dismissal of an
employee constitute a "grievance between the parties," as defined under the
provisions of the CBA, and consequently, within the exclusive original jurisdiction of
the Voluntary Arbitrators, thereby rendering the NLRC without jurisdiction to decide
the case?
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Art. 217. Jurisdiction of Labor Arbiters and the Commission. - (a) Except as
otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural: (1) Unfair labor practice cases; (2) Termination
disputes; (3) If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and other terms and
conditions of employment; (4) Claims for actual, moral, exemplary and other
forms of damages arising from the employer-employee relations; (5) Cases arising
from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and, (6) Except claims for Employees
Compensation, Social Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including those of persons in domestic
or household service, involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
(c) Cases arising from the interpretation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements
(emphasis supplied).
However, any or all of these cases may, by agreement of the parties, be
submitted to a Voluntary Arbitrator or Panel of Voluntary Arbitrators for
adjudication. Articles 261 and 262 of the Labor Code provide -
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Page
The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances or
matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or
154
Art. 261. Jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel policies
referred to in the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall
no longer be treated as unfair labor practice and shall be resolved as grievances
under the Collective Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.
panel of Voluntary Arbitrators and shall immediately dispose and refer the same to
the Grievance Machinery or Voluntary Arbitration provided in the Collective
Bargaining Agreement.
Art. 262. Jurisdiction Over Other Labor Disputes. - The Voluntary Arbitrator or
panel of Voluntary Arbitrators, upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor practices and bargaining
deadlocks (emphasis supplied).
Private respondents attempt to justify the conferment of jurisdiction over the case
on the Voluntary Arbitrator on the ground that the issue involves the proper
interpretation and implementation of the Grievance Procedure found in the
CBA. They point out that when petitioner sought the assistance of his Union to avail
of the grievance machinery, he in effect submitted himself to the procedure set forth
in the CBA regarding submission of unresolved grievances to a Voluntary Arbitrator.
The argument is untenable. The case is primarily a termination dispute. It is clear
from the claim/assistance request form submitted by petitioner to AMOSUP that he
was challenging the legality of his dismissal for lack of cause and lack of due
process. The issue of whether there was proper interpretation and implementation of
the CBA provisions comes into play only because the grievance procedure provided
for in the CBA was not observed after he sought his Unions assistance in contesting
his termination. Thus, the question to be resolved necessarily springs from the
primary issue of whether there was a valid termination; without this, then there would
be no reason to invoke the need to interpret and implement the CBA provisions
properly.
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Page
In this case, however, while the parties did agree to make termination disputes
the proper subject of voluntary arbitration, such submission remains discretionary
upon the parties. A perusal of the CBA provisions shows that Sec. 6, Art. XII
(Grievance Procedure) of the CBA is the general agreement of the parties to refer
grievances, disputes or misunderstandings to a grievance committee, and
155
In San Miguel Corp. v. National Labor Relations Commission[21] this Court held
that the phrase "all other labor disputes" may include termination disputes provided
that the agreement between the Union and the Company states "in unequivocal
language that [the parties] conform to the submission of termination disputes and
unfair labor practices to voluntary arbitration."[22] Ergo, it is not sufficient to merely say
that parties to the CBA agree on the principle that "all disputes" should first be
submitted to a Voluntary Arbitrator. There is a need for an express stipulation in the
CBA that illegal termination disputes should be resolved by a Voluntary Arbitrator or
Panel of Voluntary Arbitrators, since the same fall within a special class of disputes
that are generally within the exclusive original jurisdiction of Labor Arbiters by
express provision of law. Absent such express stipulation, the phrase "all disputes"
should be construed as limited to the areas of conflict traditionally within the
jurisdiction of Voluntary Arbitrators, i.e., disputes relating to contract-interpretation,
contract-implementation, or interpretation or enforcement of company personnel
policies. Illegal termination disputes - not falling within any of these categories should then be considered as a special area of interest governed by a specific
provision of law.
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Page
The CBA clarifies the proper procedure to be followed in situations where the
parties expressly stipulate to submit termination disputes to the jurisdiction of a
Voluntary Arbitrator or Panel of Voluntary Arbitrators. For when the parties have
validly agreed on a procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly observed. Non-
156
Private respondents invoke Navarro III v. Damasco[25] wherein the Court held that
"it is the policy of the state to promote voluntary arbitration as a mode of
settling disputes."[26] It should be noted, however, that in Navarro III all the parties
voluntarily submitted to the jurisdiction of the Voluntary Arbitrator when they filed
their respective position papers and submitted documentary evidence before
him.Furthermore, they manifested during the initial conference that they were not
questioning the authority of the Voluntary Arbitrator.[27] In the case at bar, the dispute
was never brought to a Voluntary Arbitrator for resolution; in fact, petitioner precisely
requested the Court to recognize the jurisdiction of the Labor Arbiter over the
case. The Court had held in San Miguel Corp. v. NLRC[28] that neither officials nor
tribunals can assume jurisdiction in the absence of an express legal conferment. In
the same manner, petitioner cannot arrogate into the powers of Voluntary Arbitrators
the original and exclusive jurisdiction of Labor Arbiters over unfair labor practices,
termination disputes, and claims for damages, in the absence of an express
agreement between the parties in order for Art. 262 of the Labor Code to apply in the
case at bar. In other words, the Court of Appeals is correct in holding that Voluntary
Arbitration is mandatory in character if there is a specific agreement between the
parties to that effect. It must be stressed however that, in the case at bar, the use of
the word "may" shows the intention of the parties to reserve the right of recourse to
Labor Arbiters.
(p) It shall be the duty of any labor organization and its officers to inform its
members on the provisions of its constitution and by-laws, collective bargaining
agreement, the prevailing labor relations system and all their rights and obligations
under existing labor laws.
In fact, any violation of the rights and conditions of union membership is a
"ground for cancellation of union registration or expulsion of officer from office,
whichever is appropriate. At least thirty percent (30%) of all the members of a union
or any member or members especially concerned may report such violation to the
Bureau [of Labor Relations] x x x x"[29]
It may be observed that under Policy Instruction No. 56 of the Secretary of
Labor, dated 6 April 1993, "Clarifying the Jurisdiction Between Voluntary Arbitrators
and Labor Arbiters Over Termination Cases and Providing Guidelines for the
Referral of Said Cases Originally Filed with the NLRC to the NCMB," termination
cases arising in or resulting from the interpretation and implementation of collective
bargaining agreements and interpretation and enforcement of company personnel
policies which were initially processed at the various steps of the plant-level
Grievance Procedures under the parties' collective bargaining agreements fall within
the original and exclusive jurisdiction of the voluntary arbitrator pursuant to Art. 217
(c) and Art. 261 of the Labor Code; and, if filed before the Labor Arbiter, these cases
shall be dismissed by the Labor Arbiter for lack of jurisdiction and referred to the
concerned NCMB Regional Branch for appropriate action towards an expeditious
selection by the parties of a Voluntary Arbitrator or Panel of Arbitrators based on the
procedures agreed upon in the CBA.
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Page
157
As earlier stated, the instant case is a termination dispute falling under the
original and exclusive jurisdiction of the Labor Arbiter, and does not specifically
involve the application, implementation or enforcement of company personnel
policies contemplated in Policy Instruction No. 56. Consequently, Policy Instruction
No. 56 does not apply in the case at bar. In any case, private respondents never
invoked the application of Policy Instruction No. 56 in their Position Papers, neither
did they raise the question in their Motion to Dismisswhich they filed nine (9) months
after the filing of their Position Papers. At this late stage of the proceedings, it would
not serve the ends of justice if this case is referred back to a Voluntary Arbitrator
considering that both the AMOSUP and private respondents have submitted to the
jurisdiction of the Labor Arbiter by filing their respective Position Papers and ignoring
the grievance procedure set forth in their CBA.
the filing of their Position Paper with the POEA before it moved to dismiss the case
purportedly for lack of jurisdiction. As it is, private respondents are deemed to have
waived their right to question the procedure followed by petitioner, assuming that
they have the right to do so. Under their CBA, both Union and respondent
companies are responsible for selecting an impartial arbitrator or for convening an
arbitration committee;[30] yet, it is apparent that neither made a move towards this
end. Consequently, petitioner should not be deprived of his legitimate recourse
because of the refusal of both Union and respondent companies to follow the
grievance procedure.
WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and the case
is remanded to the Labor Arbiter to dispose of the case with dispatch until terminated
considering the undue delay already incurred.
SO ORDERED.
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