FIRST DIVISION

[G.R. No. 117174. November 13, 1996.]

CAPITOL WIRELESS, INC., petitioner, vs. HONORABLE
SECRETARY MA. NIEVES R. CONFESOR and KILUSANG
MANGGAGAWA NG CAPWIRE KMC-NAFLU, respondents.
R. M. Lee & Associates for petitioner.
The Solicitor General for public respondent.
Flores Saladero Bunao & Olalia Law Offices for private respondent.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF
EMPLOYMENT; CRITERIA IN SELECTING EMPLOYEES TO BE DISMISSED.
Petitioner misses the point. Its violation of due process consists in its failure, as found by
respondent Secretary of Labor, to apprise respondent Union of any fair and reasonable
criteria for implementation of its redundancy program. In Asiaworld we laid down the
principle that in selecting the employees to be dismissed a fair and reasonable criteria
must be used, such as but not limited to: (a) less preferred status (e.g., temporary
employee), (b) efficiency and (c) seniority. Although the case of Asiaworld dealt with
retrenchment, still the principle is applicable to the present case because in effecting the
dismissals petitioner had to select from among its employees.
cdasia

2. ID.; ID.; ID.; REDUNDANCY PROGRAM, THE COMPANY MUST APPRAISE

THE UNION OF ANY FAIR AND REASONABLE CRITERIA FOR ITS
IMPLEMENTATION. As has been made clear, even this Office recognized that an
authorized cause for dismissal did exist; what it could not countenance is the means
employed by the Company in making the cause effective. But no matter what kind of
justification the Company presents now, this has become moot, academic and irrelevant.
The same should have been communicated to the affected employees prior to or
simultaneously with the implementation of the redundancy, or at the very least, before the
assailed order was rendered. In any event, the explanation being advanced by the
Company now purportedly based on areas of assignment loses significance from the
more compelling viewpoint of efficiency and seniority. For instance, during the period
covered by the Company's own time and motion analysis, Rogelio Varona delivered 96
messages but was dismissed; Resurrecion Bordeos delivered only an average of 75 but

was retained. In terms of seniority, the Company itself states that "Ms. Bordeos holds the
same position/area as Rogelio Varona, however, she was retained because she is more
senior than the latter." The Company should look at its own evidence again. Bordeos had
only 16 years of service. Varona had 19, Neves 18, and Valle, Basig and Santos 17, yet
all five were dismissed. One should also consider that the redundancy was implemented
at the height of bargaining negotiations. The bargaining process could have been the best
opportunity for the Company to apprise the Union of the necessity for redundancy. For
unknown reasons, the Company did not take advantage of it. Intended or not, the
redundancy reinforced the conditions for a deadlock, giving the Union members the
impression that it was being used by the Company to obtain a bargaining leverage.
3. ID.; ID.; ID.; WHERE PROCEDURAL DUE PROCESS WAS NOT AFFORDED
THE DISMISSED EMPLOYEES THE EMPLOYER MUST INDEMNIFY THE
FORMER; THE MEASURE OF THE AWARD DEPENDS ON THE FACTS OF EACH
CASE AND THE GRAVITY OF THE OMISSION COMMITTED BY THE
EMPLOYER. Petitioner argues next that granting that procedural due process was not
afforded the dismissed employees, still, the award of two (2) months salary for each of
them is not in accord with existing jurisprudence. The Wenphil doctrine teaches, as in
other cases, that where the dismissal of an employee is for a just cause but without due
process, the employer must indemnify the dismissed employee. Petitioner must have
failed to read the full text of Wenphil or simply chose to ignore the sentence immediately
succeeding the P1,000.00 indemnity enunciated therein. The case is explicit that the
measure of the award depends on the facts of each case and the gravity of the omission
committed by the employer. In fact, in the recent case of Reta vs. NLRC, the Court saw fit
to impose P10,000.00 as penalty for the employer's failure to comply with the due
process requirement. The ratiocination of respondent Secretary of Labor should have put
petitioner's argument at rest . . . Wenphil, however, simply provides the authority to
impose the indemnity; it is not meant to be definitive as to the amount of indemnity
applicable in all cases, this being dependent on the particular circumstances of a case.
Indeed, in the later case of Maritime Seahorse vs. NLRC, G.R. No. 84712, 5 May 1989,
the Supreme Court applied the Wenphil doctrine but awarded an indemnity of P5,000.00.
Clearly, there is a recognition that the amount of indemnity to be awarded is subject to
the discretion of the agency making the award, considering all attendant circumstances.
AaHTIE

4. ID.; ID.; RETIREMENT FROM THE SERVICE; .MEANING OF ONE HALF (1/2)
MONTH SALARY; DEFINED. The records fail to disclose that petitioner bothered to
inform the Court how it arrived at 21.82 days as basis in the computation of the
retirement pay. Anyway, it is clear in the law that the term "one-half (1/2) month salary"
means 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the 13th month
pay plus 5 days of service incentive leave. In this regard, there is no reason for petitioner
to complain that the retirement benefits granted by respondent Secretary of Labor
exceeded the requirements of the law.

5. ID.; ID.; ID.; AN EMPLOYEE MAY RECEIVE MORE RETIREMENT BENEFITS

PROVIDED FOR BY LAW AND ANY CBA OR OTHER AGREEMENTS. With
respect to the additional six (6) days for compulsory retirement and three (3) days for
optional retirement, these may appear in excess of the requirements of the law and the
demand of respondent Union. Yet, it should be noted that the law merely establishes the
minimum retirement benefits as it recognizes that an employee may receive more under
existing laws and any CBA or other agreements. Besides, respondent Secretary of Labor
had to break the bargaining deadlock. After taking into account all the circumstances,
public respondent found it expedient to strike a reasonable middle ground between the
parties' respective positions.
6. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE SECRETARY OF
LABOR, GENERALLY RESPECTED ON APPEAL. Unless there are cogent
reasons, and we do not find any, this Court will not alter, modify or reverse the factual
findings of the Secretary of Labor because, by reason of her official position, she is
considered to have acquired expertise as her jurisdiction is confined to specific matters.
EcSCHD

DECISION

BELLOSILLO, J :
p

Petitioner Capitol Wireless, Inc., and respondent Kilusang Manggagawa ng Capwire

KMC-NAFLU (Union) entered into a Collective Bargaining Agreement (CBA) on 15
November 1990 covering a period of five (5) years. Towards the end of the third year of
their CBA the parties renegotiated the economic aspects of the agreement. On 18 July
1993 when the negotiations were on-going petitioner dismissed on the ground of
redundancy eight (8) out of its eleven (11) couriers who were Union members.
As a consequence, respondent Union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB) on the ground of bargaining deadlock and
unfair labor practice, specifically, for illegal dismissal and violations of the CBA.
Conciliation proceedings were conducted by the NCMB but the same yielded negative
results. On 20 August 1993 respondent Union went on strike. On the same day,
respondent Secretary assumed jurisdiction over the controversy.
In the conference held on 14 September 1993 the parties agreed to confine the scope of
the dispute to the following issues: (a) unfair labor practice, consisting of CBA violations
and acts inimical to the workers' right to self-organization; (b) redundancy, affecting the
dismissed employees; and, (c) CBA deadlock, which includes all items covered by
respondent Union's proposals.

On 2 May 1994 respondent Secretary of Labor resolved the controversy in this manner:
(1) the parties were ordered to modify the fourth and fifth years of their CBA in
accordance with the dispositions she found just and equitable 1 the same to be retroactive
to 1 July 1993 and effective until 30 June 1995 or until superseded by a new agreement;
(2) all other provisions of the existing CBA were deemed retained but all new demands
of respondent Union that were not passed upon by her were deemed denied; (3) the
dismissal of the eight (8) employees on the ground of redundancy was upheld, but due to
defective implementation by petitioner the latter was ordered to pay each of the former an
indemnity equivalent to two (2) months' salary based on their adjusted rate for the fourth
year in addition to the separation benefits due them under the law and the CBA, and if
still unpaid, petitioner to pay the same immediately; and, (4) the charge of unfair labor
practice was dismissed for lack of merit. 2
On 28 July 1994 the motion for reconsideration of petitioner was denied. 3
Petitioner imputes grave abuse of discretion on respondent Secretary of Labor for holding
that it failed to accord due process to the dismissed employees; in not applying to the
letter the ruling in Wenphil Corp. v. NLRC; 4 and, in awarding retirement benefits beyond
those granted by R.A. 7641. 5
Petitioner argues that what it implemented was not retrenchment but redundancy
program, as such, respondent Secretary of Labor should not have relied upon Asiaworld
Publishing House, Inc. v. Ople 6 in holding that the dismissed employees were not
accorded procedural due process. The additional requirements enumerated in Asiaworld
are inapplicable to the present case because that case involved retrenchment, and
petitioner's basis in deciding those to be covered by the redundancy program was the area
serviced by the couriers. All areas outside the vicinity of its head office, which were the
areas of delivery of the dismissed employees, were declared redundant.

Petitioner misses the point. Its violation of due process consists in its failure, as found by
respondent Secretary of Labor, to apprise respondent Union of any fair and reasonable
criteria for implementation of its redundancy program. In Asiaworld we laid down the
principle that in selecting the employees to be dismissed a fair and reasonable criteria
must be used, such as but not limited to: (a) less preferred status (e.g., temporary
employee), (b) efficiency and (c) seniority. Although the case of Asiaworld dealt with
retrenchment, still the principle is applicable to the present case because in effecting the
dismissals petitioner had to select from among its employees.
We agree with respondent Secretary of Labor in her observation and conclusion that the
implementation by petitioner of its redundancy program was inconsistent with established

principles of procedural due process. She elaborated on this point in her resolution of the
motion for reconsideration. Thus
Whether it is redundancy or retrenchment, no employee may be dismissed
without observance of the rudiments of good faith. This is the point of our
assailed order. If the Company (were) really convinced of the reasons for
dismissal, the least it could have done to the employees affected was to observe
fair play and transparency in implementing the decision to dismiss. To stress,
the redundancy was implemented without the Company so much apprising the
Union of any fair and reasonable criteria for implementation.
As a matter of fact, this Office called the parties to a conference on 14 March
1994, at which the Company was given an opportunity to clarify the criteria it
used in effecting redundancy. Represented by Ms. Ma. Lourdes Mendoza of
Mercado and Associates, its counsel of record, the Company submitted
quitclaims which do not contain any amounts purportedly executed by five of
the eight dismissed employees. More importantly, the minutes of the conference
show that within two days thereafter, the Company committed to submit a
pleading to explain the criteria it used in effecting the redundancy; where no
such submission is made by 17 March 1994, the case shall be deemed submitted
for resolution. The Company never complied with this commitment.
As has been made clear, even this Office recognized that an authorized cause
for dismissal did exist; what it could not countenance is the means employed by
the Company in making the cause effective. But no matter what kind of
justification the Company presents now, this has become moot, academic and
irrelevant. The same should have been communicated to the affected employees
prior to or simultaneously with the implementation of the redundancy, or at the
very least, before the assailed order was rendered.
In any event, the explanation being advanced by the Company now purportedly
based on areas of assignment loses significance from the more compelling
viewpoint of efficiency and seniority. For instance, during the period covered by
the Company's own time and motion analysis, Rogelio Varona delivered 96
messages but was dismissed; Resurrecion Bordeos delivered only an average of
75 but was retained. In terms of seniority, the Company itself states the "Ms.
Bordeos holds the same position/area as Rogelio Varona, however, she was
retained because she is more senior than the latter." The Company should look
at its own evidence again. Bordeos had only 16 years of service. Varona had 19,
Neves 18, and Valle, Basig and Santos 17, yet all five were dismissed.
One should also consider that the redundancy was implemented at the height of
bargaining negotiations. The bargaining process could have been the best
opportunity for the Company to apprise the Union of the necessity for
redundancy. For unknown reasons, the Company did not take advantage of it.
Intended or not, the redundancy reinforced the conditions for a deadlock, giving

the Union members the impression that it was being used by the Company to
obtain a bargaining leverage. 7

Petitioner argues next that granting that procedural due process was not afforded the
dismissed employees, still, the award of two (2) months salary for each of them is not in
accord with existing jurisprudence. The Wenphil doctrine teaches, as in other cases, that
where the dismissal of an employee is for a just cause but without due process, the
employer must indemnify the dismissed employee.
Petitioner must have failed to read the full text of Wenphil or simply chose to ignore the
sentence immediately succeeding the P1,000.00 indemnity enunciated therein. The case
is explicit that the measure of the award depends on the facts of each case and the gravity
of the omission committed by the employer. In fact, in the recent case of Reta v. NLRC, 8
the Court saw fit to impose P10,000.00 as penalty for the employer's failure to comply
with the due process requirement. The ratiocination of respondent Secretary of Labor
should have put petitioner's argument at rest
. . . Wenphil, however, simply provides the authority to impose the indemnity; it
is not meant to be definitive as to the amount of indemnity applicable in all
cases, this being dependent on the particular circumstances of a case. Indeed, in
the later case of Maritime Seahorse v. NLRC, G.R. No. 84712, 5 May 1989, the
Supreme Court applied the Wenphil doctrine but awarded an indemnity of
P5,000.00. Clearly, there is a recognition that the amount of indemnity to be
awarded is subject to the discretion of the agency making the award,
considering all attendant circumstances. 9

Lastly, petitioner argues that the retirement benefits granted by respondent Secretary of
Labor are in excess of what is required of it under the law and what the Union demands.
In particular, R.A. 7641 grants to the employee retirement pay equivalent to 21.82 days
per year of service only but respondent Secretary of Labor granted the equivalent of 22.5
days. To this, six (6) more days were granted for compulsory retirement and three (3)
days for optional retirement. The existing provisions of the CBA, the respective proposals
of the parties, and the award of respondent Secretary of Labor are reproduced hereunder

EXISTING PROVISIONS OF THE CBA

a. Normal Retirement
Compulsory upon reaching 60 years of age or after 35 years of continuous
service, whichever comes first, provided that those who reach 55 or have 10
years of uninterrupted service may be retired at employee's or Company's
option.
PETITIONER'S PROPOSAL

a. Normal Retirement
60 years old R.A. 7641
b. Optional Retirement
55 years old or 10 years of continuous service 1/2 month's basic salary for every
year of continuous service plus 1 day equivalent pay.
UNION'S PROPOSAL
a. Normal Retirement 150% of basic salary
b. Optional Retirement 50% of basic salary commencing in the 5th year of
service
SECRETARY'S AWARD
a. Compulsory Retirement
An employee shall be compulsorily retired upon reaching the age of sixty (60),
or after thirty-five (35) years of continuous service, whichever comes first.
An employee shall be entitled to a retirement benefit of 1/2 month salary plus
six (6) days multiplied by the number of years in service.
b. Optional Retirement
At his option, an employee may retire upon reaching the age of fifty-five (55) or
more if he has served for at least five (5) years; provided, however, that any
employee who is under fifty-five (55) years old may retire if he has rendered at
least ten (10) years of continuous service.
Such an employee shall be entitled to a retirement benefit of 1/2 month salary
plus three (3) days multiplied by the number of years in service.
For purposes of computing compulsory and optional retirement benefits and to
align the current retirement plan with the minimum standards of Art. 287 of the
Labor Code, as amended by R.A. 7641, and Sec. 5 (5.2) of its implementing
rules, "1/2 month salary" means 22.5 days salary, exclusive of leave conversion
benefits.

Article 287 of the Labor Code, as amended by R.A. 7641, provides

Art. 287. Retirement. Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other
applicable employment contract.
In case of retirement, the employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any collective
bargaining agreement and other agreements: provided, however, That an
employee's retirement benefits under any collective bargaining and other
agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age
of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in
the said establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
Unless the parties provide for broader inclusions, the term 'one-half (1/2 month
salary' shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5) days of service incentive
leaves . . . (emphasis supplied).

The records fail to disclose that petitioner bothered to inform the Court how it arrived at
21.82 days as basis in the computation of the retirement pay. Anyway, it is clear in the
law that the term "one-half (1/2) month salary" means 22.5 days: 15 days plus 2.5 days
representing one-twelfth (1/12) of the 13th month pay plus 5 days of service incentive
leave. In this regard, there is no reason for petitioner to complain that the retirement
benefits granted by respondent Secretary of Labor exceeded the requirements of the law.
With respect to the additional six (6) days for compulsory retirement and three (3) days
for optional retirement, these may appear in excess of the requirements of the law and the
demand of respondent Union. Yet, it should be noted that the law merely establishes the
minimum retirement benefits as it recognizes that an employee may receive more under
existing laws and any CBA or other agreements. Besides, respondent Secretary of Labor
had to break the bargaining deadlock. After taking into account all the circumstances,
public respondent found it expedient to strike a reasonable middle ground between the
parties' respective positions. Unless there are cogent reasons, and we do not find any, this
Court will not alter, modify or reverse the factual findings of the Secretary of Labor
because, by reason of her official position, she is considered to have acquired expertise as
her jurisdiction is confined to specific matters. 10

As we perceive it, by design or otherwise, petitioner's arguments only scratch the surface,
so to speak. They do not extend beneath, as our studies of jurisprudence and the law
disclose. Otherwise, the baselessness of the instant petition and the absence of any abuse
of discretion, much less grave, would have earlier been exposed.
WHEREFORE, the petition is DISMISSED. The Order of 2 May 1994 of respondent
Secretary of Labor and her Resolution of 28 July 1994 are AFFIRMED.
SO ORDERED.
Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.
|||

(Capitol Wireless, Inc. v. Confesor, G.R. No. 117174, November 13, 1996)

FIRST DIVISION
[G.R. No. 155214. February 13, 2004.]
R & E TRANSPORT, INC., and HONORIO ENRIQUEZ, petitioners,
vs. AVELINA P. LATAG, representing her deceased husband,
PEDRO M. LATAG, respondent.

DECISION

PANGANIBAN, J :
p

Factual issues may be reviewed by the Court of Appeals (CA) when the findings of fact
of the National Labor Relations Commission (NLRC) conflict with those of the labor
arbiter. By the same token, this Court may review factual conclusions of the CA when
they are contrary to those of the NLRC or of the labor arbiter.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking to
nullify the June 3, 2002 Decision 2 and the August 28, 2002 Resolution 3 of the Court of
Appeals in CA-GR SP No. 67998. The appellate court disposed as follows:
"WHEREFORE, premises considered, the petition is hereby GRANTED. The
assailed Order of public respondent NLRC is SET ASIDE. The March 14, 2001
4 [D]ecision of the Labor Arbiter a quo is REINSTATED." 5

The challenged Resolution denied petitioners' Motion for Reconsideration.

The Factual Antecedents
The antecedents of the case are narrated by the CA as follows:
"Pedro Latag was a regular employee . . . of La Mallorca Taxi since March 1,
1961. When La Mallorca ceased from business operations, [Latag] . . .
transferred to [petitioner] R & E Transport, Inc. . . .. He was receiving an
average daily salary of five hundred pesos (P500.00) as a taxi driver.
"[Latag] got sick in January 1995 and was forced to apply for partial disability
with the SSS, which was granted. When he recovered, he reported for work in

September 1998 but was no longer allowed to continue working on account of

his old age.
"Latag thus asked Felix Fabros, the administrative officer of [petitioners], for
his retirement pay pursuant to Republic Act 7641 but he was ignored. Thus, on
December 21, 1998, [Latag] filed a case for payment of his retirement pay
before the NLRC.
"Latag however died on April 30, 1999. Subsequently, his wife, Avelina Latag,
substituted him. On January 10, 2000, the Labor Arbiter rendered a decision in
favor of [Latag], the dispositive portion of which reads:
'WHEREFORE, judgment is hereby rendered ordering . . . LA
MALLORCA TAXI, R & E TRANSPORT, INC. and their owner/chief
executive officer HONORIO ENRIQUEZ to jointly and severally pay
MRS. AVELINA P. LATAG the sum of P277,500.00 by way of
retirement pay for her deceased husband, PEDRO M. LATAG.
'SO ORDERED.'

DCHaTc

"On January 21, 2000, [Respondent Avelina Latag,] with her then counsel[,]
was invited to the office of [petitioners'] counsel and was offered the amount of
P38,500.00[,] which she accepted. [Respondent] was also asked to sign an
already prepared quitclaim and release and a joint motion to dismiss the case.
"After a day or two, [respondent] received a copy of the January 10, 2000
[D]ecision of the Labor Arbiter.
"On January 24, 2000, [petitioners] filed the quitclaim and motion to dismiss.
Thereafter, on May 23, 2000, the Labor Arbiter issued an order, the relevant
portion of which states:
'WHEREFORE, the decision stands and the Labor Arbitration Associate
of this Office is directed to prepare the Writ of Execution in due course.
'SO ORDERED.'
"On January 21, 2000, [petitioners] interposed an appeal before the NLRC. On
March 14, 2001, the latter handed down a [D]ecision[,] the decretal portion of
which provides:
'WHEREFORE, in view of the foregoing, respondents' Appeal is hereby
DISMISSED for failure to post a cash or surety bond, as mandated by
law.
'SO ORDERED.'

"On April 10, 2001, [petitioners] filed a motion for reconsideration of the above
resolution. On September 28, 2001, the NLRC came out with the assailed
[D]ecision, which gave due course to the motion for reconsideration." 6
(Citations omitted)

Respondent appealed to the CA, contending that under Article 223 of the Labor Code and
Section 3, Rule VI of the New Rules of Procedure of the NLRC, an employer's appeal of
a decision involving monetary awards may be perfected only upon the posting of an
adequate cash or surety bond.
Ruling of the Court of Appeals
The CA held that the labor arbiter's May 23, 2000 Order had referred to the earlier
January 10, 2000 Decision awarding respondent P277,500 as retirement benefit.
According to the appellate court, because petitioners' appeal before the NLRC was not
accompanied by an appropriate cash or surety bond, such appeal was not perfected. The
CA thus ruled that the labor arbiter's January 10, 2000 Decision and May 23, 2000 Order
had already become final and executory.
Hence, this Petition. 7
Issues
Petitioners submit the following issues for our consideration:
"I
Whether or not the Court should respect the findings of fact [of] the NLRC as
against [those] of the labor arbiter.
"II
Whether or not, in rendering judgment in favor of petitioners, the NLRC
committed grave abuse of discretion.
"III
Whether or not private respondent violated the rule on forum-shopping.
"IV
Whether or not the appeal of petitioners from the Order of the labor arbiter to
the NLRC involves [a] monetary award." 8

In short, petitioners raise these issues: (1) whether the CA acted properly when it
overturned the NLRC's factual findings; (2) whether the rule on forum shopping was
violated; and (3) whether the labor arbiter's Order of May 23, 2000 involved a monetary
award.
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Factual Findings of the NLRC
Petitioners maintain that the CA erred in disregarding the factual findings of the NLRC
and in deciding to affirm those of the labor arbiter. Allegedly, the NLRC findings were
based on substantial evidence, while those of the labor arbiter were groundless.
Petitioners add that the appellate court should have refrained from tackling issues of fact
and, instead, limited itself to those of jurisdiction or grave abuse of discretion on the part
of the NLRC.
The power of the CA to review NLRC decisions via a Rule 65 petition is now a settled
issue. As early as St. Martin Funeral Homes v. NLRC, 9 we have definitively ruled that
the proper remedy to ask for the review of a decision of the NLRC is a special civil action
for certiorari under Rule 65 of the Rules of Court, 10 and that such petition should be
filed with the CA in strict observance of the doctrine on the hierarchy of courts. 11
Moreover, it has already been explained that under Section 9 of Batas Pambansa (BP)
129, as amended by Republic Act 7902, 12 the CA pursuant to the exercise of its
original jurisdiction over petitions for certiorari was specifically given the power to
pass upon the evidence, if and when necessary, to resolve factual issues. 13
Likewise settled is the rule that when supported by substantial evidence, 14 factual
findings made by quasi-judicial and administrative bodies are accorded great respect and
even finality by the courts. These findings are not infallible, though; when there is a
showing that they were arrived at arbitrarily or in disregard of the evidence on record,
they may be examined by the courts. 15 Hence, when factual findings of the NLRC are
contrary to those of the labor arbiter, the evidentiary facts may be reviewed by the
appellate court. 16 Such is the situation in the present case; thus, the doors to a review are
open. 17
The very same reason that behooved the CA to review the factual findings of the NLRC
impels this Court to take its own look at the findings of fact. Normally, the Supreme
Court is not a trier of facts. 18 However, since the findings of fact in the present case are
conflicting, 19 it waded through the records to find out if there was enough basis for the
appellate court's reversal of the NLRC Decision.
IEHTaA

Number
of
for Retirement Benefits

Creditable

Years

of

Service

Petitioners do not dispute the fact that the late Pedro M. Latag is entitled to retirement
benefits. Rather, the bone of contention is the number of years that he should be credited
with in computing those benefits. On the one hand, we have the findings of the labor
arbiter, 20 which the CA affirmed. According to those findings, the 23 years of
employment of Pedro with La Mallorca Taxi must be added to his 14 years with R & E
Transport, Inc., for a total of 37 years. On the other, we also have the findings of the
NLRC 21 that Pedro must be credited only with his service to R & E Transport, Inc.,
because the evidence shows that the aforementioned companies are two different entities.
After a careful and painstaking review of the evidence on record, we support the NLRC's
findings. The labor arbiter's conclusion that Mallorca Taxi and R & E Transport, Inc.,
are one and the same entity is negated by the documentary evidence presented by
petitioners. Their evidence 22 sufficiently shows the following facts: 1) R & E Transport,
Inc., was established only in 1978; 2) Honorio Enriquez, its president, was not a
stockholder of La Mallorca Taxi; and 3) none of the stockholders of the latter company
hold stocks in the former. In the face of such evidence, which the NLRC appreciated in
its Decision, it seems that mere surmises and self-serving assertions of Respondent
Avelina Latag formed the bases for the labor arbiter's conclusions as follows:
"While [Pedro M. Latag] claims that he worked as taxi driver since March 1961
since the days of the La Mallorca Taxi, which was later renamed R & E
Transport, Inc., [petitioners] limit the employment period to 14 years.
"Resolving this matter, we note [respondent's] ID (Annex "A", [Latag] position
paper), which appears to bear the signature of Miguel Enriquez on the front
portion and the date February 27, 1961 when [. . . Latag] started with the
company. We also note an SSS document (Annex 'C') which shows that the gate
of initial coverage of Pedro Latag, with SSS No. 03-0772155, is February 1961.

"Viewed against [petitioners'] non-disclaimer [sic] that La Mallorca preceded R

& E Taxi, Inc.[;] . . . that both entities were/are owned by the Enriquez family,
with [petitioner] Honorio [Enriquez] as the latter's President[; and] . . . that La
Mallorca was a different entity (page 2, [petitioners'] position paper), we are of
the conclusion that [Latag's] stint with the Enriquez family dated back since
February 1961 and thus, he should be entitled to retirement benefits for 37
years, as of the date of the filing of this case on December 12, 1998." 23

Furthermore, basic is the rule that the corporate veil may be pierced only if it becomes a
shield for fraud, illegality or inequity committed against a third person. 24 We have thus

cautioned against the inordinate application of this doctrine. In Philippine National Bank
v. Andrada Electric & Engineering Company, 25 we said:
". . . [A]ny application of the doctrine of piercing the corporate veil should be
done with caution. A court should be mindful of the milieu where it is to be
applied. It must be certain that the corporate fiction was misused to such an
extent that injustice, fraud, or crime was committed against another, in disregard
of its rights. The wrongdoing must be clearly and convincingly established; it
cannot be presumed. Otherwise, an injustice that was never unintended may
result from an erroneous application.
xxx xxx xxx
"The question of whether a corporation is a mere alter ego is one of fact.
Piercing the veil of corporate fiction may be allowed only if the following
elements concur: (1) control not mere stock control, but complete
domination not only of finances, but of policy and business practice in
respect to the transaction attacked, must have been such that the corporate entity
as to this transaction had at the time no separate mind, will or existence of its
own; (2) such control must have been used by the defendant to commit a fraud
or a wrong to perpetuate the violation of a statutory or other positive legal duty,
or a dishonest and an unjust act in contravention of plaintiff's legal right; and (3)
the said control and breach of duty must have proximately caused the injury or
unjust loss complained of." 26

Respondent has not shown by competent evidence that one taxi company had stock
control and complete domination over the other or vice versa. In fact, no evidence was
presented to show the alleged renaming of "La Mallorca Taxi" to "R & E Transport, Inc."
The seven-year gap between the time the former closed shop and the date when the latter
came into being also casts doubt on any alleged intention of petitioners to commit a
wrong or to violate a statutory duty. This lacuna in the evidence compels us to reverse the
Decision of the CA affirming the labor arbiter's finding of fact that the basis for
computing Pedro's retirement pay should be 37 years, instead of only 14 years.
Validity of the Quitclaim and Waiver
As to the Quitclaim and Waiver signed by Respondent Avelina Latag, the appellate court
committed no error when it ruled that the document was invalid and could not bar her
from demanding the benefits legally due her husband. This is not say that all quitclaims
are invalid per se. Courts, however, are wary of schemes that frustrate workers' rights and
benefits, and look with disfavor upon quitclaims and waivers that bargain these away.
Courts have stepped in to annul questionable transactions, especially where there is clear
proof that a waiver, for instance, was wangled from an unsuspecting or a gullible person;
or where the agreement or settlement was "unconscionable on its face." 27 A quitclaim is

ineffective in barring recovery of the full measure of a worker's rights, and the acceptance
of benefits therefrom does not amount to estoppel. 28 Moreover, a quitclaim in which the
consideration is "scandalously low and inequitable" cannot be an obstacle to the pursuit
of a worker's legitimate claim. 29
Undisputably, Pedro M. Latag was credited with 14 years of service with R & E
Transport, Inc. Article 287 of the Labor Code, as amended by Republic Act No. 7641, 30
provides:
"Art. 287. Retirement. . . .
xxx xxx xxx
"In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age
of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in
said establishment, may retire and shall be entitled to retirement pay equivalent
to at least one-half (1/2) month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year.
"Unless the parties provide for broader inclusions, the term one half-month
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay
and the cash equivalent of not more than five (5) days of service incentive
leaves.
EISCaD

xxx xxx xxx" (Emphasis supplied)

The rules implementing the New Retirement Law similarly provide the above-mentioned
formula for computing the one-half month salary. 31 Since Pedro was paid according to
the "boundary" system, he is not entitled to the 13th month 32 and the service incentive
pay; 33 hence, his retirement pay should be computed on the sole basis of his salary.
It is accepted that taxi drivers do not receive fixed wages, but retain only those sums in
excess of the "boundary" or fee they pay to the owners or operators of their vehicles. 34
Thus, the basis for computing their benefits should be the average daily income. In this
case, the CA found that Pedro was earning an average of five hundred pesos (P500) per
day. We thus compute his retirement pay as follows: P500 x 15 days x 14 years of service
equals P105,000. Compared with this amount, the P38,850 he received, which
represented just over one third of what was legally due him, was unconscionable.
Second Issue:
Was There Forum Shopping?

Also assailed are the twin appeals that two different lawyers filed for respondent before
the CA. Petitioners argue that instead of accepting her explanation, the appellate court
should have dismissed the appeals outright for violating the rule on forum shopping.
Forum shopping is the institution of two or more actions or proceedings grounded on the
same cause, on the supposition that one or the other court would render a favorable
disposition. 35 Such act is present when there is an identity of parties, rights or causes of
action, and reliefs sought in two or more pending cases. 36 It is usually resorted to by a
party against whom an adverse judgment or order has been issued in one forum, in an
attempt to seek and possibly to get a favorable opinion in another forum, other than by an
appeal or a special civil action for certiorari. 37
We find, as the CA 38 did, that respondent has adequately explained why she had filed
two appeals before the appellate court. In the August 5, 2002 Affidavit 39 that she
attached as Annex "A" to her Compliance to Show Cause Order with Comment on
petitioners' Motion for Reconsideration, 40 she averred that she had sought the services
of another counsel to file her Petition for certiorari before the CA. She did so after her
original counsel had asked for an extension of time to file the Petition because of time
constraints and a tremendous workload, only to discover later that the original counsel
had filed a similar Petition.
We cannot fault respondent for her tenacity. Besides, to disallow her appeal would not be
in keeping with the policy of labor laws 41 to shun highly technical procedural laws in the
higher interest of justice.
Third Issue:
Monetary Award
Petitioners' contention is that the labor arbiter's January 10, 2000 Decision was
supplanted by the Compromise Agreement that had preceded the former's official release
42 to, and receipt 43 by, the parties. It appears from the records that they had entered into
an Amicable Settlement on January 21, 2000; that based on that settlement, respondent
filed a Motion to Dismiss on January 24, 2000, before the labor arbiter who officially
released on the same day his Decision dated January 10, 2000; that upon receipt of a copy
thereof, respondent filed a Manifestation and Motion to Set Aside the Motion to Dismiss;
and that the labor arbiter subsequently calendared the case for conference, held hearings
thereon, and required the parties to exchange positions by way of comments, replies
and rejoinders after which he handed down his May 23, 2000 Order.
Under the circumstances, the case was in effect reopened by the proceedings held after
respondent had filed her Manifestation and Motion to Set Aside the Motion to Dismiss.
This ruling is in accordance with the fourth paragraph of Section 2, Rule V of the New
Rules of Procedure of the NLRC, 44 which therefore correctly held as follows:

". . . Thus, the further hearings conducted thereafter, to determine the validity of
complainant's manifestation and motion are but mute confirmation that indeed
the 10 January 2000 decision in this case has not as yet attained finality. Finally,
the appealed order of 23 May 2000 itself declaring [that] 'the decision stands
and the Labor Arbitration Associate of this office is directed to prepare the Writ
of Execution in due course,' obviously, is a conclusion that the decision in this
case has been supplanted and rendered functus oficio by the herein parties' acts.
Thus, when the Labor Arbiter a quo found in his appealed order that the amount
of P38,850.00 is 'unconscionable viewed against the amount awarded in the
decision,' the same became appealable independently of the 10 January 2000
decision, which has not attained finality, in the first place." 45

We cannot concur, however, in petitioners' other contention that the May 23, 2000 Order
did not involve a monetary award. If the amicable settlement between the parties had
rendered the January 10, 2000 Decision functus oficio, then it follows that the monetary
award stated therein was reinstated by reference by the aforementioned Order. The
appeal from the latter should perforce have followed the procedural requirements under
Article 223 of the Labor Code.
As amended, this provision explicitly provides that an appeal from the labor arbiter's
decision, award or order must be made within ten (10) calendar days from receipt of a
copy thereof by the party intending to appeal it; and, if the judgment involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or
surety bond. Such cash or bond must have been issued by a reputable bonding company
duly accredited by the NLRC in the amount equivalent to the monetary award stated in
the judgment. Sections 1, 3 and 6 of Rule VI of the New Rules of Procedure of the NLRC
implement this Article.
cDCaTH

Indeed, this Court has repeatedly ruled that the perfection of an appeal in the manner and
within the period prescribed by law is not only mandatory but jurisdictional, and the
failure to perfect an appeal has the effect of rendering the judgment final and executory.
46 Nonetheless, procedural lapses may be disregarded because of fundamental
considerations of substantial justice; 47 or because of the special circumstances of the
case combined with its legal merits or the amount and the issue involved. 48
The requirement to post a bond to perfect an appeal has also been relaxed in cases when
the amount of the award has not been included in the decision of the labor arbiter. 49
Besides, substantial justice will be better served in the present case by allowing
petitioners' appeal to be threshed out on the merits, 50 especially because of serious
errors in the factual conclusions of the labor arbiter as to the award of retirement benefits.

WHEREFORE, this Petition is partly GRANTED. The Decision of the Court of Appeals
is MODIFIED by crediting Pedro M. Latag with 14 years of service. Consequently, he is
entitled to retirement pay, which is hereby computed at P105,000 less the P38,850 which
has already been received by respondent, plus six (6) percent interest thereon from
December 21, 1998 until its full payment. No costs.
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.
|||

(R & E Transport v. Latag, G.R. No. 155214, February 13, 2004)

THIRD DIVISION
[G.R. No. 187698. August 9, 2010.]
2:45 P.M.
RODOLFO J. SERRANO, petitioner, vs. SEVERINO SANTOS
TRANSIT and/or SEVERINO SANTOS, respondents.

DECISION

CARPIO MORALES, J :
p

Petitioner Rodolfo J. Serrano was hired on September 28, 1992 as bus conductor by
respondent Severino Santos Transit, a bus company owned and operated by its corespondent Severino Santos.
After 14 years of service or on July 14, 2006, petitioner applied for optional retirement
from the company whose representative advised him that he must first sign the already
prepared Quitclaim before his retirement pay could be released. As petitioner's request to
first go over the computation of his retirement pay was denied, he signed the Quitclaim
on which he wrote "U.P." (under protest) after his signature, indicating his protest to the
amount of P75,277.45 which he received, computed by the company at 15 days per year
of service.
Petitioner soon after filed a complaint 1 before the Labor Arbiter, alleging that the
company erred in its computation since under Republic Act No. 7641, otherwise known
as the Retirement Pay Law, his retirement pay should have been computed at 22.5 days
per year of service to include the cash equivalent of the 5-day service incentive leave
(SIL) and 1/12 of the 13th month pay which the company did not.
The company maintained, however, that the Quitclaim signed by petitioner barred his
claim and, in any event, its computation was correct since petitioner was not entitled to
the 5-day SIL and pro-rated 13th month pay for, as a bus conductor, he was paid on
commission basis. Respondents, noting that the retirement differential pay amounted to
only P1,431.15, explained that in the computation of petitioner's retirement pay, five
months were inadvertently not included because some index cards containing his records
had been lost.
cDTSHE

By Decision 2 of February 15, 2007, Labor Arbiter Cresencio Ramos, Jr. ruled in favor of
petitioner, awarding him P116,135.45 as retirement pay differential, and 10% of the total

monetary award as attorney's fees. In arriving at such computation, the Labor Arbiter
ratiocinated:
In the same Labor Advisory on Retirement Pay Law, it was likewise decisively
made clear that "the law expanded the concept of "one-half month salary" from
the usual one-month salary divided by two", to wit:
B.COMPUTATION OF RETIREMENT PAY
A covered employee who retires pursuant to RA 7641 shall be entitled to
retirement pay equivalent to at least one-half (1/12) month salary for
every year of service, a fraction of at least six (6) months being
considered as one whole year.
The law is explicit that "one-half month salary shall mean fifteen (15)
days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days service incentive leaves"
unless the parties provide for broader inclusions. Evidently, the law
expanded the concept of "one-half month salary" from the usual onemonth salary divided by two.
The retirement pay is equal to half-month's pay per year of service. But "halfmonth's pay" is "expanded" because it means not just the salary for 15 days but
also one-twelfth of the 13th-month pay and the cash value of five-day service
incentive leave. THIS IS THE MINIMUM. The retirement pay package can be
improved upon by voluntary company policy, or particular agreement with the
employee, or through a collective bargaining agreement." (The Labor Code with
Comments and Cases, C.A. Azcunea, Vol. II, page 765, Fifth Edition 2004).
Thus, having established that 22.5 days pay per year of service is the correct
formula in arriving at the complete retirement pay of complainant and inasmuch
as complainant's daily earning is based on commission earned in a day, which
varies each day, the next critical issue that needs discernment is the
determination of what is a fair and rational amount of daily earning of
complainant to be used in the computation of his retirement pay.
While complainant endeavored to substantiate his claim that he earned average
daily commission of P700.00, however, the documents he presented are not
complete, simply representative copies, therefore unreliable. On the other hand,
while respondents question complainant's use of P700.00 (daily income) as
basis in determining the latter's correct retirement pay, however it does not help
their defense that they did not present a single Conductor's Trip Report to
contradict the claim of complainant. Instead, respondents adduced a handwritten
summary of complainant's monthly income from 1993 until June 2006. It must
be noted also that complainant did not contest the amounts stated on the
summary of his monthly income as reported by respondents. Given the above

considerations, and most importantly that complainant did not dispute the
figures stated in that document, we find it logical, just and equitable for both
parties to rely on the summary of monthly income provided by respondent, thus,
we added complainant's monthly income from June 2005 until June 2006 or the
last twelve months and we arrived at (P189,591.30) and we divided it by twelve
(12) to arrive at complainant's average monthly earning of P15,799.28.
Thereafter, the average monthly of P15,799.28 is divided by twenty-six (26)
days, the factor commonly used in determining the regular working days in a
month, to arrive at his average daily income of P607.66. Finally, P607.66
(average daily income) x 22.5 days = P13,672.35 x 14 (length of service) =
P191,412.90 (COMPLETE RETIREMENT PAY). However, inasmuch as
complainant already received P75,277.45, the retirement differential pay due
him is P116,135.45 (P191,412.90-P75,277.45). (underscoring partly in the
original and partly supplied)
IaESCH

The National Labor Relations Commission (NLRC) to which respondents appealed

reversed the Labor Arbiter's ruling and dismissed petitioner's complaint by Decision 3
dated April 23, 2008. It, however, ordered respondents to pay retirement differential in
the amount of P2,365.35.
Citing R & E Transport, Inc. v. Latag, 4 the NLRC held that since petitioner was paid on
purely commission basis, he was excluded from the coverage of the laws on 13th month
pay and SIL pay, hence, the 1/12 of the 13th month pay and the 5-day SIL should not be
factored in the computation of his retirement pay.
Petitioner's motion for reconsideration having been denied by Resolution 5 of June 27,
2008, he appealed to the Court of Appeals.
By the assailed Decision 6 of February 11, 2009, the appellate court affirmed the NLRC's
ruling, it merely holding that it was based on substantial evidence, hence, should be
respected.
Petitioner's motion for reconsideration was denied, hence, the present petition for review
on certiorari.
The petition is meritorious.
Republic Act No. 7641 which was enacted on December 9, 1992 amended Article 287 of
the Labor Code by providing for retirement pay to qualified private sector employees in
the absence of any retirement plan in the establishment. The pertinent provision of said
law reads:
Section 1.Article 287 of Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines, is hereby amended to read as
follows:

xxx xxx xxx

In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee
upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said
establishment, may retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one
whole year.
Unless the parties provide for broader inclusions, the term one-half
1/2 month salary shall mean fifteen 15 days plus one-twelfth (1/12)
of the 13th month pay and the cash equivalent of not more than five
(5) days of service incentive leaves.
Retail, service and agricultural establishments or operations
employing not more than (10) employees or workers are exempted
from the coverage of this provision.
xxx xxx xxx (emphasis and underscoring supplied)

Further, the Implementing Rules of said law provide:

RULE II
Retirement Benefits
SECTION 1
General Statement on Coverage. This Rule shall apply to all employees in
the private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid, except to those
specifically exempted under Section 2 hereof. As used herein, the term "Act"
shall refer to Republic Act No. 7641 which took effect on January 7, 1993.
SECTION 2
Exemptions. This Rule shall not apply to the following employees:
2.1Employees of the National Government and its political subdivisions,
including Government-owned and/or controlled corporations, if they are
covered by the Civil Service Law and its regulations.
caTIDE

2.2Domestic helpers and persons in the personal service of another.

2.3Employees of retail, service and agricultural establishment or operations

regularly employing not more than ten (10) employees. As used in this subsection;
xxx xxx xxx
SECTION 5
Retirement Benefits
5.1In the absence of an applicable agreement or retirement plan, an employee
who retires pursuant to the Act shall be entitled to retirement pay equivalent to
at least one-half (-) month salary for every year of service, a fraction of at least
six (6) months being considered as one whole year.
5.2Components of One-half (-) Month Salary. For the purpose of
determining the minimum retirement pay due an employee under this Rule, the
term "one-half month salary" shall include all of the following:
(a)Fifteen (15) days salary of the employee based on his latest salary rate.
As used herein, the term "salary" includes all remunerations paid by an
employer to his employees for services rendered during normal working
days and hours, whether such payments are fixed or ascertained on a time,
task, piece of commission basis, or other method of calculating the same, and
includes the fair and reasonable value, as determined by the Secretary of Labor
and Employment, of food, lodging or other facilities customarily furnished by
the employer to his employees. The term does not include cost of living
allowances, profit-sharing payments and other monetary benefits which are not
considered as part of or integrated into the regular salary of the employees.
(b)The cash equivalent of not more than five (5) days of service incentive
leave.
(c)One-twelfth of the 13th month pay due the employee.
(d)All other benefits that the employer and employee may agree upon that
should be included in the computation of the employee's retirement pay.
xxx xxx xxx (emphasis supplied)

Admittedly, petitioner worked for 14 years for the bus company which did not adopt any
retirement scheme. Even if petitioner as bus conductor was paid on commission basis
then, he falls within the coverage of R.A. 7641 and its implementing rules. As thus
correctly ruled by the Labor Arbiter, petitioner's retirement pay should include the cash
equivalent of the 5-day SIL and 1/12 of the 13th month pay.

The affirmance by the appellate court of the reliance by the NLRC on R & E Transport,
Inc. is erroneous. In said case, the Court held that a taxi driver paid according to the
"boundary system" is not entitled to the 13th month and the SIL pay, hence, his
retirement pay should be computed on the sole basis of his salary.
For purposes, however, of applying the law on SIL, as well as on retirement, the Court
notes that there is a difference between drivers paid under the "boundary system" and
conductors who are paid on commission basis.
In practice, taxi drivers do not receive fixed wages. They retain only those sums in excess
of the "boundary" or fee they pay to the owners or operators of the vehicles. 7
Conductors, on the other hand, are paid a certain percentage of the bus' earnings for the
day.
It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its coverage of
workers who are paid on a purely commission basis is only with respect to field
personnel. The more recent case of Auto Bus Transport Systems, Inc. v. Bautista 8
clarifies that an employee who is paid on purely commission basis is entitled to SIL:
CDAHaE

A careful perusal of said provisions of law will result in the conclusion that the
grant of service incentive leave has been delimited by the Implementing Rules
and Regulations of the Labor Code to apply only to those employees not
explicitly excluded by Section 1 of Rule V. According to the Implementing
Rules, Service Incentive Leave shall not apply to employees classified as
"field personnel." The phrase "other employees whose performance is
unsupervised by the employer" must not be understood as a separate
classification of employees to which service incentive leave shall not be
granted. Rather, it serves as an amplification of the interpretation of the
definition of field personnel under the Labor Code as those "whose actual hours
of work in the field cannot be determined with reasonable certainty."
The same is true with respect to the phrase "those who are engaged on task
or contract basis, purely commission basis." Said phrase should be related
with "field personnel," applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the particular terms that they
follow. Hence, employees engaged on task or contract basis or paid on
purely commission basis are not automatically exempted from the grant of
service incentive leave, unless, they fall under the classification of field
personnel.
xxx xxx xxx
According to Article 82 of the Labor Code, "field personnel" shall refer to
non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose

actual hours of work in the field cannot be determined with reasonable

certainty. This definition is further elaborated in the Bureau of Working
Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical
Commercial Employees Association which states that:
As a general rule, [field personnel] are those whose performance of their
job/service is not supervised by the employer or his representative, the
workplace being away from the principal office and whose hours and
days of work cannot be determined with reasonable certainty; hence,
they are paid specific amount for rendering specific service or
performing specific work. If required to be at specific places at specific
times, employees including drivers cannot be said to be field personnel
despite the fact that they are performing work away from the principal
office of the employee.
xxx xxx xxx (emphasis, italics and underscoring supplied)

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision of February

11, 2009 and Resolution of April 28, 2009 are REVERSED and SET ASIDE and the
Labor Arbiter's Decision dated February 15, 2007 is REINSTATED.
SO ORDERED.

THADEI

Brion, Bersamin, Abad * and Villarama, Jr., JJ., concur.

|||

(Serrano v. Severino Santos Transit, G.R. No. 187698, August 09, 2010)

THIRD DIVISION
[G.R. No. 155146. January 24, 2006.]
DR. PERLA A. POSTIGO, FRANCISCO F. ALMACEN, NARCISO
M. ALMENDRAL, NENA E. BASTO, JUANITO M.
BERNARDINO, ADELFA B. CRESCINI, MARCIAL R. DE JESUS,
DR. PEDRO LOPEZ DE LEON, PREMIA M. DUMLAO, DAVID F.
ESTACIO, LINA G. ESTRELLA, GENOVEVA V. HERNANDEZ,
PEDRO A. PARIL, PEDRO H. SINGSON, ALBERTO A. TUDIO,
MARIETTA B. ULIT, LOURDES C. LEGASPI, PEDRO
PEROCHO, LANI CORTEZ, GUADALUPE B. MACATANGAY,
DOLORES C. FERNANDEZ, LUMINOSA G. REYNO, ESTRELLA
P. SURATOS, LYDIA E. DE BOSCH, ZENAIDA C. CARRIEDO,
DR. FINAFLOR C. TAN, petitioners, vs. PHILIPPINE
TUBERCULOSIS SOCIETY, INC., respondent.
Basilio C. Almazan, Jr. for petitioners.
Rene V. Sarmiento and Rolando M. Delfin for respondent.
SYLLABUS
1.LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; APPEAL FROM
LABOR ARBITER'S DECISION INVOLVING MONETARY AWARD; WHEN
RELAXATION OF THE RULE ON APPEAL BOND REQUIREMENT IS JUSTIFIED.
In Ong v. Court of Appeals, we ruled that the aggrieved party may file the appeal
bond within the ten-day reglementary period following the receipt of the resolution of the
NLRC to forestall the finality of such resolution. Hence, while the appeal of a decision
involving a monetary award in labor cases may be perfected only upon the posting of a
cash or surety bond and the posting of the bond is an indispensable requirement to perfect
such an appeal, a relaxation of the appeal bond requirement could be justified by
substantial compliance with the rule. Article 223 of the Labor Code provides that an
appeal from a decision of the Labor Arbiter must be made within ten calendar days from
receipt of a copy of the decision by the aggrieved party; and if the decision involves a
monetary award, an appeal by the aggrieved party may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited
by the NLRC in the amount equivalent to the monetary award. In addition, Section 6,
Rule VI of the New Rules of Procedure of the NLRC provides that the Commission may,
in justifiable cases and upon motion of the aggrieved party, reduce the amount of the
bond. Further, the filing of the motion to reduce bond does not stop the running of the

period to perfect appeal. Time and again, this Court has ruled that while the abovementioned rule treats the filing of a cash or surety bond in the amount equivalent to the
monetary award in the judgment appealed from, as a jurisdictional requirement to perfect
an appeal, the bond requirement on appeals involving awards is sometimes given a liberal
interpretation in line with the desired objective of resolving controversies on the merits.
The special circumstances in this case, upon which the motion to reduce the bond was
predicated, justify the relaxation of the appeal bond requirement. However, considering
that the claim for retirement benefits was made sometime in 1999 to support the
petitioners during the twilight years of their lives, there is no doubt that a remand of the
case to the NLRC will only unduly delay the determination of their entitlement to such
benefits. Moreover, since the case calls for the resolution of a question of law, we
consider it more appropriate to resolve the appeal at this juncture, rather than remand the
case to the NLRC.
2.ID.; ID.; EMPLOYEES OF GOVERNMENT-OWNED AND CONTROLLED
CORPORATIONS UNDER THE CORPORATION CODE ARE GOVERNED BY THE
PROVISIONS OF THE LABOR CODE; APPLICATION IN CASE AT BAR. In Juco
v. NLRC, we clarified that employees of government-owned and controlled corporations
with special charters are covered under the Civil Service. On the other hand, employees
of government-owned and controlled corporations under the Corporation Code are
governed by the provisions of the Labor Code. The Philippine Tuberculosis Society, Inc.
(PTSI) belongs to the latter category and, therefore, covered by Rep. Act No. 7641 which
is an amendment to the Labor Code. The accommodation under Rep. Act No. 1820
extending GSIS coverage to PTSI employees did not take away from petitioners the
beneficial coverage afforded by Rep. Act No. 7641. Hence, the retirement pay payable
under Article 287 of the Labor Code as amended by Rep. Act No. 7641 should be
considered apart from the retirement benefit claimable by the petitioners under the social
security law or, as in this case, the GSIS law.

DECISION

QUISUMBING, J :
p

This petition assails the Decision 1 dated June 13, 2002 of the Court of Appeals in CAG.R. SP No. 59597, which set aside the Resolution 2 dated January 31, 2000 of the
National Labor Relations Commission (NLRC) in NLRC NCR CN 00-02-02148-99. The
NLRC had dismissed the respondent's appeal from the Decision of the Labor Arbiter,
who ordered the payment of retirement benefits under Republic Act No. 7641 to
petitioners. This petition likewise assails the Resolution 3 dated September 3, 2002 of
the Court of Appeals denying petitioners' motion for reconsideration.

The antecedent facts, as summarized by the Court of Appeals and borne by the records,
are as follows:
Petitioners Dr. Perla A. Postigo, et al., were regular employees of the respondent
Philippine Tuberculosis Society, Inc. (PTSI). They retired on various dates from 1996 to
1998. Upon retirement from service, some of the petitioners who were compulsory
members of the Government Service Insurance System (GSIS) obtained retirement
benefits from the GSIS.
At the time the petitioners retired, Article 287 of the Labor Code had been amended by
Republic Act No. 7641. 4 Rep. Act No. 7641 granted retirement pay to qualified
employees in the private sector, in the absence of any retirement plan or agreement with
the company. As the respondent did not have a retirement plan for its employees, aside
from its contribution to the GSIS, petitioners claimed from the respondent their
retirement benefits under Rep. Act No. 7641. The respondent denied their claims on the
ground that the accommodation extended by the GSIS to the petitioners removed them
from the coverage of the law.
The petitioners then sought the opinion of the Bureau of Working Conditions (BWC) of
the Department of Labor and Employment regarding their entitlement to the retirement
benefits provided in Rep. Act No. 7641. 5 The BWC confirmed their entitlement. 6 The
same opinion was rendered and submitted by the respondent's legal counsel, Atty. Rene
V. Sarmiento, to its Board of Directors. 7 Despite this, respondent PTSI refused to pay
the petitioners their retirement benefits.
The petitioners then filed a complaint before the Labor Arbiter.
In a Decision 8 dated June 30, 1999, the Labor Arbiter declared petitioners entitled to
retirement benefits under Rep. Act No. 7641. However, one petitioner, Dr. Finaflor C.
Tan who was awarded her terminal leave pay, was not included in the award of
retirement benefits.
HSIaAT

Aggrieved, respondent PTSI appealed to the NLRC. Instead of posting the required cash
or surety bond equivalent to the amount of the award, the respondent filed a Motion to
Reduce Bond on the ground that the amount awarded by the Labor Arbiter was
erroneous. On January 31, 2000, the NLRC dismissed the appeal for failure to post the
required cash or surety bond.
Undaunted, the respondent elevated the matter to the Court of Appeals. On June 13,
2002, the CA reversed the NLRC's decision in this wise:
Indeed, in several occasions, the Supreme Court has cautioned the NLRC to
give Article 223 of the Labor Code, as amended, particularly the provisions on

requiring a bond on appeals involving monetary awards, a liberal interpretation

in line with the desired objective of resolving controversies on the merits.
Hence, considering the timeliness of the filing of the motion to reduce the
appeal bond and the meritorious ground upon which it relies, We believe and so
hold that the legal requirement of posting an appeal bond has been substantially
satisfied. Public respondent acted with grave abuse of discretion in dismissing
the appeal without passing upon the motion to reduce the appeal bond.
WHEREFORE, the petition is hereby GRANTED. Resolutions dated 31
January 2000 and 24 May 2000 in NLRC-NCR CN 00-02-02148-99 of public
respondent National Labor Relations Commission are hereby SET ASIDE. The
NLRC is directed to act on the Motion to Reduce Bond and to give due course
to the Appeal.
SO ORDERED. 9

The petitioners now submit the following issues for our consideration:
I.Whether or not the remand of the case to the NLRC would only further delay
the resolution of this case.
II.Whether or not the Honorable Court of Appeals decided the instant case in
accordance with law and applicable jurisprudence and based on the
evidence on record for having failed to apply the jurisprudential precepts
that:
a.errors in the computation of the monetary award are properly a subject
of appeal and should be ventilated at the appropriate time, not in
a mere motion to reduce bond; and
b.the posting of a bond is an indispensable requirement to perfect an
employer's appeal.
III.Whether or not Petitioners are entitled to the benefits of the Retirement Pay
Law.
IV.Whether or not Petitioners are entitled to interest on their retirement benefits
for the unjustified withholding thereof.
V.Whether or not Petitioner Dr. Tan should be made similarly entitled to her
retirement pay, which was inadvertently excluded by the Labor Arbiter,
pursuant to the timely motion to render judgment nunc pro tunc she filed
before the Labor Arbiter and which was consistently raised all the way
up to this Honorable Court, in order to effect a complete disposition of
the instant case. 10

In short, petitioners raise for our resolution these issues: (1) Did the Court of Appeals err
in granting the petition and directing the NLRC to act on the Motion to Reduce Bond and
to give due course to the appeal? and (2) Are the petitioners entitled to benefits under
Rep. Act No. 7641?
ASaTCE

On the first issue, petitioners contend that (1) errors in the computation of the monetary
award are properly a subject of appeal and should be ventilated at the appropriate time,
not in a mere motion to reduce bond; and (2) the posting of a bond is an indispensable
requirement to perfect an employer's appeal.
Respondent counters that in case the monetary award is being disputed, an appeal may
still be filed without the appeal bond, provided that a motion to reduce bond is filed
within the reglementary period.
We think that the Court of Appeals did not err in granting the petition and holding that
there was substantial compliance in the posting of a cash or surety bond. We likewise
find Nationwide Security and Allied Services, Inc. v. NLRC 11 and Rosewood Processing,
Inc. v. NLRC 12 inapplicable to this case.
In Nationwide Security, the petitioners therein filed a motion to reduce bond instead of an
appeal or surety bond. The NLRC denied the motion on the grounds that petitioners'
alleged inability to post the bond was without basis, and to grant the motion on the
grounds stated therein would be tantamount to ruling on the merits. In affirming the
decision of the NLRC, the Court noted that petitioners had funds from its other
businesses to post the required bond. Further, the errors raised in the motion dealt with
matters that would go into the merits of the case and were thus more appropriate in an
appeal.
In this case, respondent deferred the posting of the surety bond in view of the alleged
erroneous computation by the Labor Arbiter of the monetary award. While the Labor
Arbiter awarded P5,480,484.25 13 as retirement benefits, only P5,072,277.73, 14
according to the respondent's computation was due and owing to the petitioners. Since
the motion raised a pure mathematical error, the same may be resolved without going into
the merits of the case.
In Rosewood, the petitioner therein filed a motion to reduce the bond with the appeal
bond, albeit not in the amount equivalent to the monetary award in the judgment appealed
from. The Court held that the NLRC gravely abused its discretion in dismissing the
appeal since a consideration of the merits appearing in the appeal as well as the filing of
the appeal bond show that there was substantial compliance with the rules governing
appeal.

Here, aside from the fact that the filing of the motion was justified, the respondent
immediately submitted a supersedeas bond 15 with its motion for reconsideration of the
NLRC resolution dismissing its appeal. In Ong v. Court of Appeals, 16 we ruled that the
aggrieved party may file the appeal bond within the ten-day reglementary period
following the receipt of the resolution of the NLRC to forestall the finality of such
resolution. 17 Hence, while the appeal of a decision involving a monetary award in labor
cases may be perfected only upon the posting of a cash or surety bond and the posting of
the bond is an indispensable requirement to perfect such an appeal, a relaxation of the
appeal bond requirement could be justified by substantial compliance with the rule.
Article 223 of the Labor Code provides that an appeal from a decision of the Labor
Arbiter must be made within ten calendar days from receipt of a copy of the decision by
the aggrieved party; and if the decision involves a monetary award, an appeal by the
aggrieved party may be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the NLRC in the amount equivalent
to the monetary award. In addition, Section 6, Rule VI of the New Rules of Procedure of
the NLRC provides that the Commission may, in justifiable cases and upon motion of the
aggrieved party, reduce the amount of the bond. Further, the filing of the motion to
reduce bond does not stop the running of the period to perfect appeal.
CTacSE

Time and again, this Court has ruled that while the above-mentioned rule treats the filing
of a cash or surety bond in the amount equivalent to the monetary award in the judgment
appealed from, as a jurisdictional requirement to perfect an appeal, the bond requirement
on appeals involving awards is sometimes given a liberal interpretation in line with the
desired objective of resolving controversies on the merits. 18
The special circumstances in this case, upon which the motion to reduce the bond was
predicated, justify the relaxation of the appeal bond requirement. However, considering
that the claim for retirement benefits was made sometime in 1999 to support the
petitioners during the twilight years of their lives, there is no doubt that a remand of the
case to the NLRC will only unduly delay the determination of their entitlement to such
benefits. Moreover, since the case calls for the resolution of a question of law, we
consider it more appropriate to resolve the appeal at this juncture, rather than remand the
case to the NLRC.
We come now to the second issue. The petitioners contend that despite their compulsory
membership in the GSIS, they are still covered by Rep. Act No. 7641 for the following
reasons: (1) the respondent is registered with the Securities and Exchange Commission as
a non-stock and non-profit corporation; hence, it is a private entity and its employees are
employees in the private sector; and (2) the petitioners are not included in the exemptions
from coverage of Rep. Act No. 7641.

Respondent PTSI counters that as an employer in the public sector, it is not covered by
Rep. Act No. 7641 which applies only to employees in the private sector. It relies on
Section 3, Rule I of the Amended Rules Implementing Title II, Book IV of the Labor
Code, to wit:
SEC. 3.Employer (a) The term shall mean any person natural or juridical,
domestic or foreign, who carries on in the Philippines any trade, business,
industry, undertaking or activity of any kind and uses the services of another
person who is under his orders as regards the employment.
(b)An employer shall belong to either:
(1)The public sector covered by the GSIS, comprising the National
Government, including government-owned or controlled
corporations, the Philippine Tuberculosis Society, the Philippine
National Red Cross, and the Philippine Veterans Bank; or
(2)The private sector covered by the SSS, comprising all employers
other than those defined in the immediately preceding paragraph.

Respondent's reliance on the afore-quoted rules is unfounded. The definition of a public

sector employer as quoted above is relevant only for purposes of coverage under the
Employees' Compensation and State Insurance Fund. Instead, it is the implementing rules
of Title II, Book VI of the Labor Code, which provides for the coverage and exemptions
of retirement benefits. Thus:
SECTION 1. General Statement on Coverage. This Rule shall apply to all
employees in the private sector, regardless of their position, designation or
status and irrespective of the method by which their wages are paid, except to
those specifically exempted under Section 2 hereof. As used herein, the term
"Act" shall refer to Republic Act No. 7641 which took effect on January 7,
1993.
SEC. 2.Exemption. This Rule shall not apply to the following employees:
2.1Employees of the National Government and its political subdivisions,
including Government-owned and/or -controlled corporations, if
they are covered by the Civil Service Law and its regulations.
aEIcHA

xxx xxx xxx

Having determined the applicable implementing rules, we now proceed to resolve

whether the respondent is a private corporation or a public corporation; and consequently,
whether the petitioners are employees in the private sector or in the public sector.

On this score, the case of Feliciano v. Commission on Audit, 19 finds strong relevance.
Although with different factual circumstances, the Court discussed therein the two classes
of corporations recognized by the 1987 Constitution. The first refers to private
corporations created under a general law; the second refers to government-owned or
controlled corporations created by special charters. We also reiterated that under Section
14 of the Corporation Code, "[a]ll corporations organized under this Code shall file with
the Securities and Exchange Commission articles of incorporation . . ."
The respondent was incorporated on March 11, 1960 as a non-profit, benevolent and nonstock corporation under the Corporation Code. 20 Having been created under the general
corporation law instead of a special charter, we hold that the respondent is a private and
not a governmental corporation. More so, Section 2(1), Article IX(B) of the 1987
Constitution provides:
SECTION 2. (1) The civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including governmentowned or controlled corporations with original charters.

Extant on the records is the respondent's admission that although its employees are
compulsory members of the GSIS, said employees are not governed by the Civil Service
Law. If the respondent is truly a government-owned or controlled corporation, and
petitioners are employees in the public sector, then, they should have been covered by
said law. The truth, however, is that, the respondent is a non-profit but private
corporation organized under the Corporation Code, and the petitioners are covered by the
Labor Code and not by the Civil Service Law.
From the foregoing, it is clear to us that the petitioners are employees in the private
sector, hence entitled to the benefits of Rep. Act No. 7641.
Even assuming that by virtue of their compulsory inclusion in the GSIS, the petitioners
became employees in the public sector, they are still entitled to the benefits of Rep. Act
No. 7641 since they are not covered by the Civil Service Law and its regulations. This
much is certain upon reading the implementing rules of Title II, Book VI of the Labor
Code as afore-cited as well as the Labor Advisory on Retirement Pay Law. 21 Under the
said advisory, the coverage of, as well as the exclusion from, Rep. Act No. 7641 has been
delineated as follows:
RA 7641 or the Retirement Pay Law shall apply to all employees in the private
sector, regardless of their position, designation or status and irrespective of the
method by which their wages are paid. They shall include part-time employees,
employees of service and other job contractors and domestic helpers or persons
in the personal service of another.

The law does not cover employees of retail, service and agricultural
establishments or operations employing not more than (10) employees or
workers and employees of the National Government and its political
subdivisions, including Government-owned and/or controlled corporations, if
they are covered by the Civil Service Law and its regulations. (Underscoring
ours.)

Neither do we find merit in the respondent's argument that the rationale behind the
enactment of Rep. Act No. 7641 justifies the exclusion of employees in the public sector,
who are already enjoying retirement benefits under the GSIS law, from the New
Retirement Law.
We direct the respondent's attention to Section 2 of Rep. Act No. 7641, to wit:
SEC. 2.Nothing in this Act shall deprive any employee of benefits to which he
may be entitled under existing laws or company policies or practices.
aTIAES

In addition, Rule II of the Rules Implementing Book VI of the Labor Code provides as
follows:
SEC. 8.Relation to agreements and regulations. Nothing in this Rule shall
justify an employer from withdrawing or reducing any benefits, supplements or
payments as provided in existing laws, individual or collective agreements or
employment practices or policies.
xxx xxx xxx

In Juco v. NLRC, 22 we clarified that employees of government-owned and controlled

corporations with special charters are covered under the Civil Service. On the other hand,
employees of government-owned and controlled corporations under the Corporation
Code are governed by the provisions of the Labor Code.
The Philippine Tuberculosis Society, Inc. (PTSI) belongs to the latter category and,
therefore, covered by Rep. Act No. 7641 which is an amendment to the Labor Code. The
accommodation under Rep. Act No. 1820 extending GSIS coverage to PTSI employees
did not take away from petitioners the beneficial coverage afforded by Rep. Act No.
7641. Hence, the retirement pay payable under Article 287 of the Labor Code as amended
by Rep. Act No. 7641 should be considered apart from the retirement benefit claimable
by the petitioners under the social security law or, as in this case, the GSIS law.
As to the alleged prolonged refusal by the respondent to pay the petitioners their
retirement benefits, we do not think that the respondent's stance was entirely in bad faith.
The respondent harbored the honest belief that their compulsory coverage in the GSIS
converted it into a public corporation excluded from the coverage of Rep. Act No. 7641.

As noted by this Court, the respondent even filed a supersedeas bond, albeit belatedly,
with its motion for reconsideration of the NLRC resolution dismissing its appeal. Such
act only demonstrates that the respondent filed the appeal in good faith. We could not
speculate and say that respondent did not intend to pay the petitioners their retirement
benefits in case the appeal is dismissed.
On the matter of petitioner Dr. Finaflor C. Tan, records show she has two causes of
action: (1) non-payment of terminal leave pay; and (2) non-payment of retirement
benefits. 23 While the Labor Arbiter ruled that she is entitled to the commutation into
cash of her unused leave credits which is the equivalent of her terminal leave pay, the
former did not include her in the award of retirement benefits. This was properly raised in
the Motion to Render Judgment Nunc Pro Tunc 24 filed by the petitioners on October 29,
1999 before the NLRC. We see no cogent reason why she should be excluded from the
over-all award of retirement benefits considering that she has participated in the
proceedings before the Labor Arbiter.

WHEREFORE, this petition is PARTIALLY GRANTED. The Decision dated June 13,
2002 of the Court of Appeals in CA-G.R. SP No. 59597, directing the NLRC to act on
the Motion to Reduce Bond and to give due course to the Appeal, as well as its
Resolution denying the petitioners' motion for reconsideration, are MODIFIED.
Consequently, it is DECLARED that the petitioners are entitled to retirement benefits
under Rep. Act No. 7641. In addition to retirement benefits, petitioner Dr. Finaflor C.
Tan is entitled to the commutation into cash of her unused leave credits which is the
equivalent of her terminal leave pay. Likewise, the petitioners are entitled to attorney's
fees, equivalent to 10% of the total monetary award.
Let this case be remanded to the Labor Arbiter for the computation of the retirement
benefits and terminal leave pay above-mentioned. No pronouncement as to costs.
HAaDTE

SO ORDERED.
Carpio, Carpio Morales and Tinga, JJ., concur.
|||

(Postigo v. Philippine Tuberculosis Society, Inc., G.R. No. 155146, January 24, 2006)