Contents

Dealco v NLRC ......................................................................................................................................... 1

Star v symbol......................................................................................................................................... 15
Duncan v Galaxo .................................................................................................................................. 24
Del monte v velasco ............................................................................................................................ 32
Lakpue drug v belga............................................................................................................................ 39
Domingo v rayala ................................................................................................................................. 45

Dealco v NLRC
DEALCO FARMS, INC., G.R. No. 153192

Petitioner,

Present:

AUSTRIA-MARTINEZ, J.,

- versus - Acting Chairperson,

TINGA,*

CHICO-NAZARIO,

NACHURA, and

NATIONAL LABOR RELATIONS COMMISSION PERALTA, JJ.

(5th DIVISION), CHIQUITO BASTIDA, and ALBERT CABAN,

Respondents.
Promulgated:

January 30, 2009

x------------------------------------------------------------------------------------x

Page 1 of 69
DECISION

NACHURA, J.:

Under review are Resolutions[1] of the Court of Appeals (CA) in CA-G.R. SP No.
68972 denying due course to and dismissing petitioner Dealco Farms, Inc.s petition
for certiorari.

Petitioner is a corporation engaged in the business of importation, production,

fattening and distribution of live cattle for sale to meat dealers, meat traders, meat
processors, canned good manufacturers and other dealers in Mindanao and in Metro
Manila. Petitioner imports cattle by the boatload from Australia into the ports
of General Santos City, Subic, Batangas, or Manila. In turn, these imported cattle
are transported to, and housed in, petitioners farms in Polomolok, South Cotabato,
or in Magalang, Pampanga, for fattening until the cattle individually reach the
market weight of 430 to 450 kilograms.

Respondents Albert Caban and Chiquito Bastida were hired by petitioner on June
25, 1993 and October 29, 1994, respectively, as escorts or comboys for the transit
of live cattle from General Santos City to Manila. Respondents work entailed
tending to the cattle during transportation. It included feeding and frequently
showering the cattle to prevent dehydration and to develop heat resistance. On the
whole, respondents ensured that the cattle would be safe from harm or death
caused by a cattle fight or any such similar incident.

Upon arrival in Manila, the cattle are turned over to and received by the duly
acknowledged buyers or customers of petitioner, at which point, respondents work
ceases. For every round trip travel which lasted an average of 12 days, respondents
were each paid P1,500.00. The 12-day period is occasionally extended when
petitioners customers are delayed in receiving the cattle. In a month, respondents
usually made two trips.

Page 2 of 69
On October 15, 1999, respondents Bastida and Caban, together with Ramon
Maquinsay and Roland Parrocha, filed a Complaint for illegal dismissal with claims
for separation pay with full backwages, salary differentials, service incentive leave
pay, 13th month pay, damages, and attorneys fees against petitioner, Delfin
Alcoriza[2] and Paciano Danilo Ramis[3] before the National Labor Relations
Commission (NLRC), Sub-Regional Arbitration Branch No. XI, General Santos City.
Although the four complainants collectively filed a case against petitioner,
Maquinsay and Parrocha never appeared in any of the conferences and/or hearings
before the Labor Arbiter. Neither did they sign the verification page of complainants
position paper. Most importantly, Maquinsay and Parrocha executed affidavits in
favor of petitioner praying for the dismissal of the complaint insofar as they were
concerned.

It appears that, on August 19, 1999, respondents were told by a Jimmy Valenzuela,
a hepe de viaje, that he had been instructed by Ramis to immediately effect their
replacement. Valenzuela proffered no reason for respondents replacement.
Respondents repeated attempts to see and meet with Ramis, as well as to write
Alcoriza, proved futile, compelling them to file an illegal dismissal case against
petitioner and its officers.

In all, respondents alleged in their position paper that: (1) they were illegally
dismissed, as they never violated any of petitioners company rules and policies; (2)
their dismissal was not due to any just or authorized cause; and (3) petitioner did
not observe due process in effecting their dismissal, failing to give them written
notice thereof. Thus, respondents prayed for money claims, i.e., salary differentials,
service incentive leave pay, cost of living allowance (COLA) and 13th month pay.

Petitioner, however, paints a different picture. Petitioner asserts that the finished
cattle are sold to traders and middlemen who undertake transportation thereof
to Manila for distribution to the wet markets. In fact, according to petitioner, the
buyers and end-users of their finished cattle actually purchase the cattle as soon as
they are considered ready for the market. Petitioner claims that once the finished
cattle are bought by the buyers, these buyers act separately from, and
independently of, petitioners business. In this regard, the buyers themselves
arrange, through local representatives, for the (a) hauling from petitioners farm to
the port area; (b) shipment of the finished cattle to Manila; and (c) escort or
comboy services to feed and water the cattle during transit.

Page 3 of 69
In its position paper, petitioner relates only one instance when it engaged the
services of respondents as comboys. Petitioner maintains that their arrangement
with respondents was only on a per-trip or per-contract basis to escort cattle
to Manila which contemplated the cessation of the engagement upon return of the
ship to the port of origin the General Santos City port.

Petitioner further narrates that sometime in 1998, and well into 1999, its import of
cattle from Australia substantially decreased due to the devalued dollar.
Consequently, petitioner was forced to downsize, and the sale and shipments
to Manila were drastically reduced. Thus, petitioner and/or its buyers no longer
retained escort or comboy services.

Ultimately, petitioner denies the existence of an employer-employee

relationship with respondents. Petitioner posits that: (a) respondents are
independent contractors who offer comboy services to various shippers and traders
of cattle, not only to petitioner; (b) in the performance of work on board the ship,
respondents are free from the control and supervision of the cattle owner since the
latter is interested only in the result thereof; (c) in the alternative, respondents can
only be considered as casual employees performing work not necessary and
desirable to the usual business or trade of petitioner, i.e., cattle fattening to market
weight and production; and (d) respondents likewise failed to complete the one-
year service period, whether continuous or broken, set forth in Article 280[4] of the
Labor Code, as petitioners shipments were substantially reduced in 1998-1999,
thereby limiting the escort or comboy activity for which respondents were
employed.

On June 30, 2000, the Labor Arbiter found that respondents were employees
of petitioner, thus:

[Petitioner] admits having engaged the services of [respondents] as

caretakers or comboys (convoys) though it qualifies that it was on a per trip or per
contract basis. It also admits paying their remuneration of P1,500.00 per trip. It
tacitly admits having terminated [respondents] services when it said that
[respondents] were among the group of escorts who were no longer accommodated
due to the decrease in volume of imports and shipments. [Petitioner] also
undoubtedly exercised control and supervision over [respondents] work as
caretakers considering that the value of the cattle shipped runs into hundreds of

Page 4 of 69
thousands of pesos. The preparation of the cattle for shipment, manning and
feeding them prior to and during transit, and making a report upon return
to General Santos City to tally the records of the cattle shipped out versus cattle
that actually reached Manila are certainly all in accordance with [petitioners]
instructions.

Thus, all the four elements in the determination of an employer-

employee relationship being present, [x x x] [respondents] were,
therefore, employees of [petitioner].

x x x [Respondents] also performed activities which are usually

necessary or desirable in the usual business or trade of [petitioner]
(Art. 280, Labor Code). [Petitioners] contention, to the contrary, is
erroneous. Transporting the cattle to its main market in Manila is an
essential and component aspect of [petitioners] operation. As held by
[the NLRCs] Fifth Division in one case:

Complainants task of escorting the livestock shipped

to Manila, taking care of the livestock in transit, is an activity which is
necessary and desirable in the usual business or trade of respondent.
It is of judicial notice that the bulk of the market for livestock of big
livestock raisers such as respondent is in Manila. Hogs do not swim,
they are shipped. When in transit (usually two-and-one-half days) they
do not queue to the mess hall, they are fed. x x x The caretaker is a
component of the business, a part of the scheme of the operation.
(NFL and Ricardo Garcia v. Bibiana Farms, Inc., NLRC CA No. XI-
065089-99 (rab-xi-01-50026-98); prom. April 28, 2000).

More, it also appears that [respondents] had rendered

service for more than one year doing the same task
repeatedly, thus, even assuming they were casual
employees they may be considered regular employees
with respect to the activity in which they were employed
and their employment shall continue while such activity
exists (last par. of Art. 280). [Respondents], in fact, were
hired on October 29, 1994 (Bastida) and June 25, 1993
(Caban), a fact which [petitioner] dismally failed to
refute.

Given the foregoing, [petitioners] contention that [respondents] were

independent contractors and free lancers deserves little consideration.
Its argument that its usual trade or business (importation/production

Page 5 of 69
 and fattening) ends in General Santos City, and does not include
transporting the cattle, does not persuade us.

[Petitioners] witnesses tried to corroborate [its] contention that

[respondents] also offered their services to various shippers and
traders of cattle, not only to [petitioner]. Former complainants
Maquinsay and Parrocha mentioned the names of these traders/buyers
or shippers as Lozano Farms, Bibiana Farms and other big cattle
feedlot farms in SOCSARGEN (Annexes A and E, [petitioners] position
paper.) But not a modicum of evidence was adduced to prove payment
of [respondents] services by any of these supposed traders or that
[respondents] received instructions from them. There is also no record
that shows that the trader/s actually shipped livestock and engaged
the services of caretakers.[5]

Accordingly, the Labor Arbiter granted respondents claim for separation pay, COLA
and union service fees. The Labor Arbiter awarded respondents: (a) separation pay
of one month for every year of service; (b) COLA, as petitioner failed to prove
payment thereof or its exemption therefrom; and (c) union service fees fixed at
10% of the total monetary award. The Labor Arbiter computed respondents total
monetary awards as follows:

NAME SEPARATION COLA SUB-TOTAL

PAY

Chiquito P15,000.00 P2,400.00 P17,400.00

Bastida

Albert Caban 18,000.00 2,400.00 20,400.00

P37,800.00

Plus 10% Union Service 3,780.00

Fees

TOTAL ----- P41,580.00[6]

-

However, the Labor Arbiter denied respondents claim for backwages, 13th month
pay, salary differential, service incentive leave pay and damages, to wit:

Page 6 of 69
 But we deny the claim for backwages which was merely inserted in the
prayer portion of [respondents] position paper. Reasons are abundant
why we decline to grant the same. In their complaint, [respondents]
prayed for separation pay (not reinstatement with consequent
backwages) thereby indicating right from the start that they do not
want to work with [petitioner] again. More importantly[,] during the
conference held on January 6, 2000, [petitioner] manifested its
willingness to reinstate [respondents] to their former work as
[comboys] under the same terms and conditions but [respondents]
answered that they do not want to return to work and instead are
asking for payment of their separation pay. Finally[,] [respondents] do
not dispute that [petitioners] downsizing of its escorts in 1999 was due
to a legitimate cause, i.e., dollar devaluation.

Also to go are [respondents] labor standard claims for 13th month pay
and service incentive leave pay as well as the claim for damages. We
also deny the claim for salary differentials.

[Respondents] are not entitled to their claims for 13th month pay and
service incentive leave pay because they were paid on task basis. The
claim for damages is denied for lack of factual and legal basis as there
is no showing that respondent acted in bad faith in downsizing the
number of its caretakers. It even appears that the same is due to a
legitimate cause. The claim for salary differentials is denied on two
grounds: (1) [these are] not prayed for in their complaint; and (2) for
lack of merit. It takes not more than 3 days for the Gen. Santos-
Manila trip. Even if we include counting the return trip that would be
total of six (6) days to the maximum. [Respondents] were
paid P1,500.00 per trip. Or, since they made an average of 2
trips/month they were paid P3,000.00 for a twelve (12) days work (or
the equivalent of P250.00/day).[7]

On appeal to the NLRC, the Fifth Division affirmed the Labor Arbiters ruling on the
existence of an employer-employee relationship between the parties and the total
monetary award of P41,580.00 representing respondents separation pay, COLA and
union service fees. The NLRC declared:

After a judicious review of the records of this case, we found no cogent

reason to disturb the findings of the branch.

The presence of the four (4) elements in the determination of an

employer-employee relationship has been clearly established by the
facts and evidence on record, starting with the admissions of

Page 7 of 69
 [petitioner] who acknowledged the engagement of [respondents] as
escorts of their cattles shipped from General Santos to Manila, and the
compensation of the latter at a fee of P1,500.00 per trip. The dates
claimed by [respondents] that they were engaged remain not disputed
by [petitioner] as observed by the branch.

The element of control, jurisprudentially considered the most essential

element of the four, has not been demolished by any evidence to the
contrary. The branch has noticed that the preparation of the shipment
of cattle, manning and feeding them while in transit, and making a
report upon their return to General Santos that the cattle shipped and
which reached Manila actually tallied were all indicators of instructions,
supervision and control by [petitioner] on [respondents] performance
of work as escorts for which they were hired. This we agree on all
four[s]. The livestock shipment would cost thousands of pesos and the
certainty of it reaching its destination would be the only thing any
operator would consider at all [time] and under all circumstances.
Nothing more, nothing less. It is illogical for [petitioner] to argue that
the shipment was not necessary [or] desirable to their business, as
their business was mainly livestock production, because they were
undeniably the owners of the cattle escorted by [respondents]. Should
losses of a shipment occur due to [respondents] neglect these would
still be [petitioners] loss, and nobody elses.

At this point, we emphasize the fact that even on appeal [petitioner]

declines to refute, by way of evidence, the finding of the branch that
they failed to prove the payment of [respondents] services by any of
the supposed traders, or that said traders actually shipped livestock.
This is the point where the case of NFL v. Bibiana Farms cited by
[petitioner] differs from the instant case in that bills of lading issued
to, thus, in the name of the hog shippers were submitted as proof that
said shippers engaged, compensated and supervised the escorts or
convoys in their work, and not the hog raisers.[8]

Undaunted, petitioner filed a petition for certiorari before the CA. As

previously adverted to, the CA denied due course and dismissed the petition for the
following procedural flaws:

1) other material portions of the record referred to in the petition are

not attached thereto such as the Complaint for illegal dismissal and
position papers of the parties, in violation of Sec. 3, Rule 46 of the
1997 Rules of Civil Procedure; and

Page 8 of 69
 2) there is no written explanation why personal service was not
resorted to, as required under Sec. 11, Rule 13, Ibid.[9]

Petitioners motion for reconsideration was, likewise, denied by the appellate court.

Hence, this appeal positing the following issues:

1. Whether the CA gravely abused its discretion when it dismissed the petition
for certiorari based on technical rules of procedure.

2. Whether the NLRC gravely abused its discretion when it affirmed the Labor
Arbiters ruling on the existence of an employer-employee relationship between the
parties.

3. Corollary thereto, whether the NLRC gravely erred when it affirmed the Labor
Arbiters finding that respondents were illegally dismissed by petitioner and the
consequent award of money claims to respondents.

At the outset, we observe that petitioner raises extraneous issues which were
obviously not passed upon by appellate court when the latter denied due course
and dismissed outright the petition for certiorari. As such, the instant petition for
review on certiorari directly assails the NLRCs decision which mainly involves
factual issues, such as whether respondents were employees of petitioner and if
they are entitled to their money claims.

Petitioner is unconcerned with the CAs reasons for dismissing the petition and, in
fact, declares that the dismissal was done with grave abuse of discretion for
sticking to the provisions of the Rules of Court a mere technicality as petitioner
cavalierly puts it. Petitioner asseverates that the CA dismissal defeat[s] substantial
justice considering that [it] has a strong cause of action against [respondents]. In
all, petitioner submits that it had faithfully complied with Section 11, Rule 13 of the
Rules of Court by submitting an explanation and a duly notarized affidavit of service
of Maria Fe Sobrevega. Petitioner likewise points out that the Explanation for the
resort to service of the petition for certiorari via registered mail is found on page 30
thereof. Curiously, however, only the copy of the same document submitted to the
CA lacked an Explanation.

Page 9 of 69
We completely agree with the appellate courts forthright dismissal of the petition
for certiorari.

Even if we are to overlook petitioners account on the curious case of the missing
Explanation only in the CAs copy of the petition, petitioners non-compliance with
the requisites for the filing a petition for certiorari remains. We detect petitioners
ploy to sidestep a more fatal procedural error, i.e., the failure to attach copies of all
pleadings and documents relevant and pertinent to the petition for certiorari set
forth in paragraph 2, Section 1, Rule 65 of the Rules of Court which reads:

The petition shall be accompanied by a certified true copy of the

judgment, order or resolution subject thereof, copies of all
pleadings and documents relevant and pertinent thereto, and a
sworn certification of non-forum shopping as provided in the third
paragraph of Section 3, Rule 46.[10]

Corollary thereto, the second paragraph of Section 6, Rule 65, the first
paragraph of Section 2, Rule 56, and the last paragraph of Section 3, Rule 46
respectively read:

SEC. 6. Order to comment. x x x

In petitions for certiorari before the Supreme Court and the Court of
Appeals, the provisions of Section 2, Rule 56, shall be observed. x x x

SEC. 2. Rules applicable. The procedure in original cases for certiorari,

prohibition, mandamus, quo warranto and habeas corpus shall be in
accordance with the applicable provisions of the Constitution, laws,
and Rules 46, 48, 49, 51, 52 and this Rules[.] x x x

SEC. 3. Contents and filing of petition; effect of non-compliance

with requirements. x x x

The failure of the petitioner to comply with any of the foregoing

requirements shall be sufficient ground for the dismissal of the
petition.

Quite apparent from the foregoing is that the CA did not err, much less commit
grave abuse of discretion, in denying due course to and dismissing the petition
for certiorari for its procedural defects. Petitioners failure to attach copies of all
pleadings and documents relevant and pertinent to its petition
for certiorari warranted the outright dismissal thereof.

Page 10 of 69
Petitioner, however, invokes the righteous ends of substantial justice as would
exempt it from adherence to procedural rules. Petitioner claims that the merits of
its case necessitate a liberal interpretation of the Rules of Court leading to a
reversal of the appellate courts outright dismissal of its petition.

Regrettably, upon an evaluation of the merits of the petition, we do not find cause
to disturb the findings of the Labor Arbiter, affirmed by the NLRC, which are
supported by substantial evidence.

The well-entrenched rule is that factual findings of administrative or quasi-judicial

bodies, which are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality,
and bind the Court when supported by substantial evidence.[11] Section 5, Rule 133
defines substantial evidence as that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion.

Consistent therewith is the doctrine that this Court is not a trier of facts, and
this is strictly adhered to in labor cases.[12] We may take cognizance of and resolve
factual issues only when the findings of fact and conclusions of law of the Labor
Arbiter are inconsistent with those of the NLRC and the CA.[13]

In the case at bench, both the Labor Arbiter and the NLRC were one in their
conclusion that respondents were not independent contractors, but employees of
petitioner. In determining the existence of an employer-employee relationship
between the parties, both the Labor Arbiter and the NLRC examined and weighed
the circumstances against the four-fold test which has the following elements: (1)
the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the
power to control the employees conduct, or the so-called control test.[14] Of the
four, the power of control is the most important element. More importantly, the
control test merely calls for the existence of the right to control, and not necessarily
the exercise thereof.[15]

Naturally, both petitioners and respondents claims are on opposite poles.

Respondents aver that they were regular employees of petitioner, designated as
escorts or comboys for the latters cattle. Petitioner, on the other hand, denies that
claim, and simultaneously asserts that respondents are free lance escorts who offer

Page 11 of 69
their services to the buyers, middlemen and traders of petitioner. Petitioner further
asserts that its business is only confined to the fattening of cattle and their sale
once they reach the required market weight. According to petitioner, its business
does not include the shipment of cattle, which is undertaken by the middlemen,
traders and buyers, who, as owners thereof, engage respondents services to care
for the cattle while in transit. Thus, petitioner ultimately asserts that respondents,
at that juncture, were under the control and supervision of these middlemen,
traders and buyers.

To support the foregoing contentions, petitioner simply presents the affidavits of

Maquinsay and Parrocha, original complainants before the Labor Arbiter, praying for
the withdrawal of the complaint for illegal dismissal insofar as they are concerned.
Maquinsay and Parrocha both allege that their engagement with petitioner is on a
per-trip or per-contract basis, and that they and their fellow comboys or escorts,
herein respondents, did not offer their services to petitioner alone.

Paying no heed to petitioners narration of the contemplated arrangement with

respondents, the Labor Arbiter pointed out the following:

[Maquinsay and Parrocha, petitioners] witnesses, tried to corroborate

[petitioners] contention that complainants also offered their services to
various shippers and traders of cattle, not only to [petitioner]. Former
complainants Maquinsay and Parrocha mentioned the names of these
traders/buyers or shippers as Lozano Farms, Bibiana Farms and other
big cattle feedlot farms in SOCSARGEN (Annexes A and B, [petitioners]
position paper). But not a modicum of evidence was adduced to
prove payment of [respondents] services by any of these
supposed traders or that [respondents] received instructions
from them. There is also no record that the trader/s actually
shipped livestock and engaged the services of caretakers.[16]

Echoing the same observation, the NLRC declared, thus:

At this point, we emphasize the fact that even on appeal [petitioner]

decline to refute, by way of evidence, the finding of the branch that
they failed to prove the payment of [respondents] services by any of
the supposed traders, or that said traders actually shipped livestock.
This is the point where the case of NFL v. Bibiana Farms cited by
[petitioner] differ from the instant case in that bills of lading issued to,
thus, in the name of the hog shippers were submitted as proof that

Page 12 of 69
 said shippers engaged, compensated and supervised the escorts or
convoys in their work, and not the hog raisers.[17]

Yet, petitioner is adamant that its lack of documentary evidence should not be
taken against it since Maquinsay and Parrocha, two of the original complainants,
attest to the nature of a comboys or escorts work.

Significantly, Maquinsays and Parrochas affidavits proffer no reason why, in the first
place, they filed, along with herein respondents, the complaint for illegal dismissal
against petitioner. Maquinsay and Parrocha made an absolute turnaround and
retracted their previous claim of regular employee status without proof to support
their allegations as against the claim of the remaining complainants, herein
respondents.

Conveniently, for its purposes, petitioner claims that Maquinsays and Parrochas
affidavits substantiate the claim of petitioner that indeed shipping arrangements
and accommodation of escorts, which are informal in nature and, thus, unrecorded,
are under the responsibility, control and supervision of the buyers and traders.
Essentially, petitioner insists that the affidavits of Maquinsay and Parrocha should
bear more weight than the claims of respondents in their complaint and position
paper.

We reject petitioners self-serving contention. Having failed to substantiate its

allegation on the relationship between the parties, we stick to the settled rule in
controversies between a laborer and his master that doubts reasonably arising from
the evidence should be resolved in the formers favor.[18] The policy is reflected in no
less than the Constitution,[19] Labor Code[20] and Civil Code.[21]

Moreover, petitioners other contention that the shipment and the escort of
live cattle is not part of its business, thus, at most, respondents may only be
considered as casual employees, likewise fails to persuade.

First. Petitioner failed to disprove respondents claim that they were hired by
petitioner as comboys from 1993 and 1994, respectively. In fact, petitioner admits
that respondents were engaged, at one point, as comboys, on a per trip or per
contract basis. This assertion petitioner failed anew to substantiate. Noteworthy is
the fact that Maquinsays and Parrochas affidavit merely contain a statement that

Page 13 of 69
the offer of their services as comboys or escorts was not limited to petitioner alone.
The affidavits simply aver that they, including herein respondents, were engaged by
Dealco on a per trip basis, which commenced upon embarkation on a ship
for Manila and terminated upon their return to the port of origin. Maquinsay and
Parrocha did not state that respondents engagement by petitioner was on a one-
time basis. As a result, petitioners claim remains an unsubstantiated and bare-
faced allegation.

Second. Even assuming that respondents task is not part of petitioners

regular course of business, this does not preclude their attainment of regular
employee status.

Article 280 of the Labor Code explicitly provides:

Art. 280. Regular and Casual Employment. The provisions of

written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee
or where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the

preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his
employment shall continue while such activity exists.[22]

Undoubtedly, respondents were regular employees of petitioner with respect to the

escort or comboy activity for which they had been engaged since 1993 and 1994,
respectively, without regard to continuity or brokenness of the service.

Lastly, considering that we have sustained the Labor Arbiters and the NLRCs finding
of an employer-employee relationship between the parties, we likewise sustain the
administrative bodies finding of respondents illegal dismissal. Accordingly, we are
not wont to disturb the award of separation pay, claims for COLA and union service

Page 14 of 69
fees fixed at 10% of the total monetary award, as these were based on the finding
that respondents were dismissed without just or authorized cause.

WHEREFORE, the petition is DENIED. The Resolution dated July 29, 2001 of the
NLRC in NLRC CA No. M-005974-2000 (RAB-11-10-50453-99) is
hereby AFFIRMED. Costs against the petitioner.

Star v symbol
STAR PAPER CORPORATION, G.R. No. 164774
JOSEPHINE ONGSITCO &
SEBASTIAN CHUA,
Petitioners, Present:

PUNO, J., Chairman,

SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
-versus- GARCIA, JJ.

Promulgated:
RONALDO D. SIMBOL, April 12, 2006
WILFREDA N. COMIA &
LORNA E. ESTRELLA,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

PUNO, J.:

We are called to decide an issue of first impression: whether the policy of the
employer banning spouses from working in the same company violates the rights of
the employee under the Constitution and the Labor Code or is a valid exercise of
management prerogative.
At bar is a Petition for Review on Certiorari of the Decision of the Court of
Appeals dated August 3, 2004 in CA-G.R. SP No. 73477 reversing the decision of
the National Labor Relations Commission (NLRC) which affirmed the ruling of the
Labor Arbiter.
Petitioner Star Paper Corporation (the company) is a corporation engaged in trading
principally of paper products. Josephine Ongsitco is its Manager of the Personnel
and Administration Department while Sebastian Chua is its Managing Director.

Page 15 of 69
The evidence for the petitioners show that respondents Ronaldo D. Simbol
(Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all
regular employees of the company.[1]
Simbol was employed by the company on October 27, 1993. He met Alma Dayrit,
also an employee of the company, whom he married on June 27, 1998. Prior to the
marriage, Ongsitco advised the couple that should they decide to get married, one
of them should resign pursuant to a company policy promulgated in 1995,[2] viz.:

1. New applicants will not be allowed to be hired if in case he/she has

[a] relative, up to [the] 3rd degree of relationship, already employed
by the company.

2. In case of two of our employees (both singles

[sic], one male and another female) developed a friendly relationship
during the course of their employment and then decided to get
married, one of them should resign to preserve the policy stated
above.[3]

Simbol resigned on June 20, 1998 pursuant to the company policy.[4]

Comia was hired by the company on February 5, 1997. She met Howard Comia, a
co-employee, whom she married on June 1, 2000. Ongsitco likewise reminded them
that pursuant to company policy, one must resign should they decide to get
married. Comia resigned on June 30, 2000.[5]
Estrella was hired on July 29, 1994. She met Luisito Zuiga (Zuiga), also a co-
worker. Petitioners stated that Zuiga, a married man, got Estrella pregnant. The
company allegedly could have terminated her services due to immorality but she
opted to resign on December 21, 1999.[6]
The respondents each signed a Release and Confirmation Agreement. They stated
therein that they have no money and property accountabilities in the company and
that they release the latter of any claim or demand of whatever nature.[7]

Respondents offer a different version of their dismissal. Simbol and Comia allege
that they did not resign voluntarily; they were compelled to resign in view of an
illegal company policy. As to respondent Estrella, she alleges that she had a
relationship with co-worker Zuiga who misrepresented himself as a married but
separated man. After he got her pregnant, she discovered that he was not
separated. Thus, she severed her relationship with him to avoid dismissal due to
the company policy. On November 30, 1999, she met an accident and was advised
by the doctor at the Orthopedic Hospital to recuperate for twenty-one (21) days.
She returned to work on December 21, 1999 but she found out that her name was
on-hold at the gate. She was denied entry. She was directed to proceed to the
personnel office where one of the staff handed her a memorandum. The
memorandum stated that she was being dismissed for immoral conduct. She

Page 16 of 69
refused to sign the memorandum because she was on leave for twenty-one (21)
days and has not been given a chance to explain. The management asked her to
write an explanation. However, after submission of the explanation, she was
nonetheless dismissed by the company. Due to her urgent need for money, she
later submitted a letter of resignation in exchange for her thirteenth month pay.[8]
Respondents later filed a complaint for unfair labor practice, constructive dismissal,
separation pay and attorneys fees. They averred that the aforementioned company
policy is illegal and contravenes Article 136 of the Labor Code. They also contended
that they were dismissed due to their union membership.
On May 31, 2001, Labor Arbiter Melquiades Sol del Rosario dismissed the complaint
for lack of merit, viz.:

[T]his company policy was decreed pursuant to what the

respondent corporation perceived as management prerogative. This
management prerogative is quite broad and encompassing for it
covers hiring, work assignment, working method, time, place and
manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees,
work supervision, lay-off of workers and the discipline, dismissal and
recall of workers. Except as provided for or limited by special law, an
employer is free to regulate, according to his own discretion and
judgment all the aspects of employment.[9] (Citations omitted.)

On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter
on January 11, 2002. [10]

Respondents filed a Motion for Reconsideration but was denied by the NLRC in a
Resolution[11] dated August 8, 2002. They appealed to respondent court via Petition
for Certiorari.
In its assailed Decision dated August 3, 2004, the Court of Appeals reversed the
NLRC decision, viz.:

WHEREFORE, premises considered, the May 31, 2002 (sic)[12] Decision

of the National Labor Relations Commission is hereby REVERSED and
SET ASIDE and a new one is entered as follows:

(1) Declaring illegal, the petitioners dismissal from

employment and ordering private respondents to
reinstate petitioners to their former positions without loss
of seniority rights with full backwages from the time of
their dismissal until actual reinstatement; and

(2) Ordering private respondents to pay petitioners

attorneys fees amounting to 10% of the award and the
cost of this suit.[13]

Page 17 of 69
On appeal to this Court, petitioners contend that the Court of Appeals erred in
holding that:

1. X X X THE SUBJECT 1995 POLICY/REGULATION IS VIOLATIVE OF

THE CONSTITUTIONAL RIGHTS TOWARDS MARRIAGE AND THE
FAMILY OF EMPLOYEES AND OF ARTICLE 136 OF THE LABOR CODE;
AND
2. X X X RESPONDENTS RESIGNATIONS WERE FAR FROM
VOLUNTARY.[14]

We affirm.

The 1987 Constitution[15] states our policy towards the protection of labor
under the following provisions, viz.:

Article II, Section 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their
welfare.

xxx

Article XIII, Sec. 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work, and
a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by
law.

The State shall promote the principle of shared responsibility between

workers and employers, recognizing the right of labor to its just share
in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.

The Civil Code likewise protects labor with the following provisions:

Art. 1700. The relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good. Therefore, such contracts
are subject to the special laws on labor unions, collective bargaining,

Page 18 of 69
 strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.

Art. 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the
laborer.

The Labor Code is the most comprehensive piece of legislation protecting labor. The
case at bar involves Article 136 of the Labor Code which provides:

Art. 136. It shall be unlawful for an employer to require as a condition

of employment or continuation of employment that a woman employee
shall not get married, or to stipulate expressly or tacitly that upon
getting married a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of her marriage.

Respondents submit that their dismissal violates the above provision. Petitioners
allege that its policy may appear to be contrary to Article 136 of the Labor Code but
it assumes a new meaning if read together with the first paragraph of the rule. The
rule does not require the woman employee to resign. The employee spouses have
the right to choose who between them should resign. Further, they are free to
marry persons other than co-employees. Hence, it is not the marital status of the
employee, per se, that is being discriminated. It is only intended to carry out its no-
employment-for-relatives-within-the-third-degree-policy which is within the ambit
of the prerogatives of management.[16]
It is true that the policy of petitioners prohibiting close relatives from working in the
same company takes the nature of an anti-nepotism employment policy.
Companies adopt these policies to prevent the hiring of unqualified persons based
on their status as a relative, rather than upon their ability.[17] These policies focus
upon the potential employment problems arising from the perception of favoritism
exhibited towards relatives.
With more women entering the workforce, employers are also enacting employment
policies specifically prohibiting spouses from working for the same company. We
note that two types of employment policies involve spouses: policies banning only
spouses from working in the same company (no-spouse employment policies),
and those banning all immediate family members, including spouses, from working
in the same company (anti-nepotism employment policies).[18]

Unlike in our jurisdiction where there is no express prohibition on marital

discrimination,[19] there are twenty state statutes[20] in the United
States prohibiting marital discrimination. Some state courts [21]
have been

Page 19 of 69
confronted with the issue of whether no-spouse policies violate their laws
prohibiting both marital status and sex discrimination.
In challenging the anti-nepotism employment policies in the United States,
complainants utilize two theories of employment discrimination:
the disparate treatment and the disparate impact. Under the disparate
treatment analysis, the plaintiff must prove that an employment policy is
discriminatory on its face. No-spouse employment policies requiring an employee of
a particular sex to either quit, transfer, or be fired are facially discriminatory. For
example, an employment policy prohibiting the employer from hiring wives of male
employees, but not husbands of female employees, is discriminatory on its face.[22]
On the other hand, to establish disparate impact, the complainants must prove
that a facially neutral policy has a disproportionate effect on a particular class. For
example, although most employment policies do not expressly indicate which
spouse will be required to transfer or leave the company, the policy often
disproportionately affects one sex.[23]
The state courts rulings on the issue depend on their interpretation of the scope of
marital status discrimination within the meaning of their respective civil rights acts.
Though they agree that the term marital status encompasses discrimination based
on a person's status as either married, single, divorced, or widowed, they are
divided on whether the term has a broader meaning. Thus, their decisions vary.[24]
The courts narrowly[25] interpreting marital status to refer only to a person's
status as married, single, divorced, or widowed reason that if the legislature
intended a broader definition it would have either chosen different language or
specified its intent. They hold that the relevant inquiry is if one is married rather
than to whom one is married. They construe marital status discrimination to include
only whether a person is single, married, divorced, or widowed and not the identity,
occupation, and place of employment of one's spouse. These courts have upheld
the questioned policies and ruled that they did not violate the marital status
discrimination provision of their respective state statutes.

The courts that have broadly[26] construed the term marital status rule that it
encompassed the identity, occupation and employment of one's spouse. They strike
down the no-spouse employment policies based on the broad legislative intent of
the state statute. They reason that the no-spouse employment policy violate the
marital status provision because it arbitrarily discriminates against all spouses of
present employees without regard to the actual effect on the individual's
qualifications or work performance.[27] These courts also find the no-spouse
employment policy invalid for failure of the employer to present any evidence
of business necessity other than the general perception that spouses in the same
workplace might adversely affect the business.[28] They hold that the absence of
such a bona fide occupational qualification[29] invalidates a rule denying
employment to one spouse due to the current employment of the other spouse in
the same office.[30] Thus, they rule that unless the employer can prove that the

Page 20 of 69
reasonable demands of the business require a distinction based on marital status
and there is no better available or acceptable policy which would better accomplish
the business purpose, an employer may not discriminate against an employee
based on the identity of the employees spouse.[31] This is known as the bona fide
occupational qualification exception.

We note that since the finding of a bona fide occupational qualification justifies an
employers no-spouse rule, the exception is interpreted strictly and narrowly by
these state courts. There must be a compelling business necessity for which no
alternative exists other than the discriminatory practice.[32] To justify a bona fide
occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job
involved; and, (2) that there is a factual basis for believing that all or substantially
all persons meeting the qualification would be unable to properly perform the duties
of the job.[33]

The concept of a bona fide occupational qualification is not foreign in our

jurisdiction. We employ the standard of reasonableness of the company policy
which is parallel to the bona fide occupational qualification requirement. In the
recent case ofDuncan Association of Detailman-PTGWO and
Pedro Tecson v. Glaxo Wellcome Philippines, Inc.,[34]
we passed on the
validity of the policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company. We held that Glaxo has a right to
guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors. We considered the
prohibition against personal or marital relationships with employees of competitor
companies upon Glaxos employees reasonable under the circumstances because
relationships of that nature might compromise the interests of Glaxo. In laying
down the assailed company policy, we recognized that Glaxoonly aims to protect its
interests against the possibility that a competitor company will gain access to its
secrets and procedures.[35]

The requirement that a company policy must be reasonable under the

circumstances to qualify as a valid exercise of management prerogative was also at
issue in the 1997 case of Philippine Telegraph and Telephone Company v.
NLRC.[36]In said case, the employee was dismissed in violation of petitioners policy
of disqualifying from work any woman worker who contracts marriage. We held that
the company policy violates the right against discrimination afforded all women
workers under Article 136 of the Labor Code, but established a permissible
exception, viz.:

[A] requirement that a woman employee must remain unmarried could

be justified as a bona fide occupational qualification, or BFOQ,
where the particular requirements of the job would justify the same,

Page 21 of 69
 but not on the ground of a general principle, such as the desirability of
spreading work in the workplace. A requirement of that nature would
be valid provided it reflects an inherent quality reasonably
necessary for satisfactory job performance.[37] (Emphases supplied.)

The cases of Duncan and PT&T instruct us that the requirement of

reasonableness must be clearly established to uphold the questioned employment
policy. The employer has the burden to prove the existence of a reasonable
business necessity. The burden was successfully discharged in Duncan but not in
PT&T.

We do not find a reasonable business necessity in the case at bar.

Petitioners sole contention that the company did not just want to have two
(2) or more of its employees related between the third degree by affinity and/or
consanguinity[38] is lame. That the second paragraph was meant to give teeth to
the first paragraph of the questioned rule[39] is evidently not the valid reasonable
business necessity required by the law.

It is significant to note that in the case at bar, respondents were hired after
they were found fit for the job, but were asked to resign when they married a co-
employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the Repacking Section,
could be detrimental to its business operations. Neither did petitioners explain how
this detriment will happen in the case of Wilfreda Comia, then a Production Helper
in the Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees married to
each other will be less efficient. If we uphold the questioned rule without valid
justification, the employer can create policies based on an unproven presumption of
a perceived danger at the expense of an employees right to security of tenure.

Petitioners contend that their policy will apply only when one employee
marries a co-employee, but they are free to marry persons other than co-
employees. The questioned policy may not facially violate Article 136 of the Labor
Code but it creates a disproportionate effect and under the disparate impact theory,
the only way it could pass judicial scrutiny is a showing that it
is reasonable despite the discriminatory, albeit disproportionate, effect. The failure
of petitioners to prove a legitimate business concern in imposing the questioned
policy cannot prejudice the employees right to be free from arbitrary discrimination
based upon stereotypes of married persons working together in one company.[40]

Lastly, the absence of a statute expressly prohibiting marital discrimination in

our jurisdiction cannot benefit the petitioners. The protection given to labor in our

Page 22 of 69
jurisdiction is vast and extensive that we cannot prudently draw inferences from the
legislatures silence[41] that married persons are not protected under our
Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for
failure of petitioners to present undisputed proof of a reasonable business
necessity, we rule that the questioned policy is an invalid exercise of management
prerogative. Corollarily, the issue as to whether respondents Simbol and Comia
resigned voluntarily has become moot and academic.
As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling
on the singular fact that her resignation letter was written in her own handwriting.
Both ruled that her resignation was voluntary and thus valid. The respondent court
failed to categorically rule whether Estrella voluntarily resigned but ordered that
she be reinstated along with Simbol and Comia.

Estrella claims that she was pressured to submit a resignation letter because
she was in dire need of money. We examined the records of the case and
find Estrellas contention to be more in accord with the evidence. While findings of
fact by administrative tribunals like the NLRC are generally given not only respect
but, at times, finality, this rule admits of exceptions,[42] as in the case at bar.

Estrella avers that she went back to work on December 21, 1999 but was
dismissed due to her alleged immoral conduct. At first, she did not want to sign the
termination papers but she was forced to tender her resignation letter in exchange
for her thirteenth month pay.

The contention of petitioners that Estrella was pressured to resign because

she got impregnated by a married man and she could not stand being looked upon
or talked about as immoral[43] is incredulous. If she really wanted to avoid
embarrassment and humiliation, she would not have gone back to work at all. Nor
would she have filed a suit for illegal dismissal and pleaded for reinstatement. We
have held that in voluntary resignation, the employee is compelled by personal
reason(s) to dissociate himself from employment. It is done with the intention of
relinquishing an office, accompanied by the act of abandonment. [44] Thus, it is
illogical for Estrella to resign and then file a complaint for illegal dismissal. Given
the lack of sufficient evidence on the part of petitioners that the resignation was
voluntary, Estrellas dismissal is declared illegal.

Page 23 of 69
 IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R. SP No.
73477 dated August 3, 2004 is AFFIRMED.

SO ORDERED.

Duncan v Galaxo

[G.R. No. 162994. September 17, 2004]

DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.

TECSON, petitioners, vs. GLAXO WELLCOME PHILIPPINES,
INC. respondent.

RESOLUTION
TINGA, J.:

Confronting the Court in this petition is a novel question, with constitutional

overtones, involving the validity of the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any competitor company.
This is a Petition for Review on Certiorari assailing the Decision[1] dated May 19,
2003 and the Resolution dated March 26, 2004 of the Court of Appeals in CA-G.R.
SP No. 62434.[2]
Petitioner Pedro A. Tecson (Tecson) was hired by respondent Glaxo Wellcome
Philippines, Inc. (Glaxo) as medical representative on October 24, 1995, after
Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates, among
others, that he agrees to study and abide by existing company rules; to disclose to
management any existing or future relationship by consanguinity or affinity with co-
employees or employees of competing drug companies and should management
find that such relationship poses a possible conflict of interest, to resign from the
company.
The Employee Code of Conduct of Glaxo similarly provides that an employee is
expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug
companies. If management perceives a conflict of interest or a potential conflict
between such relationship and the employees employment with the company, the
management and the employee will explore the possibility of a transfer to another

Page 24 of 69
department in a non-counterchecking position or preparation for employment
outside the company after six months.
Tecson was initially assigned to market Glaxos products in the Camarines Sur-
Camarines Norte sales area.
Subsequently, Tecson entered into a romantic relationship with Bettsy, an
employee of Astra Pharmaceuticals[3] (Astra), a competitor of Glaxo. Bettsy was
Astras Branch Coordinator in Albay. She supervised the district managers and
medical representatives of her company and prepared marketing strategies for
Astra in that area.
Even before they got married, Tecson received several reminders from his
District Manager regarding the conflict of interest which his relationship with Bettsy
might engender. Still, love prevailed, and Tecson married Bettsy in September
1998.
In January 1999, Tecsons superiors informed him that his marriage to Bettsy
gave rise to a conflict of interest. Tecsons superiors reminded him that he and
Bettsy should decide which one of them would resign from their jobs, although they
told him that they wanted to retain him as much as possible because he was
performing his job well.
Tecson requested for time to comply with the company policy against entering
into a relationship with an employee of a competitor company. He explained that
Astra, Bettsys employer, was planning to merge with Zeneca, another drug
company; and Bettsy was planning to avail of the redundancy package to be
offered by Astra. With Bettsys separation from her company, the potential conflict
of interest would be eliminated. At the same time, they would be able to avail of
the attractive redundancy package from Astra.
In August 1999, Tecson again requested for more time resolve the problem. In
September 1999, Tecson applied for a transfer in Glaxos milk division, thinking that
since Astra did not have a milk division, the potential conflict of interest would be
eliminated. His application was denied in view of Glaxos least-movement-possible
policy.
In November 1999, Glaxo transferred Tecson to the Butuan City-Surigao City-
Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his
request was denied.
Tecson sought Glaxos reconsideration regarding his transfer and brought the
matter to Glaxos Grievance Committee. Glaxo, however, remained firm in its
decision and gave Tescon until February 7, 2000 to comply with the transfer order.
Tecson defied the transfer order and continued acting as medical representative in
the Camarines Sur-Camarines Norte sales area.
During the pendency of the grievance proceedings, Tecson was paid his salary,
but was not issued samples of products which were competing with similar products
manufactured by Astra. He was also not included in product conferences regarding
such products.

Page 25 of 69
 Because the parties failed to resolve the issue at the grievance machinery level,
they submitted the matter for voluntary arbitration. Glaxo offered Tecson a
separation pay of one-half () month pay for every year of service, or a total
of P50,000.00 but he declined the offer. On November 15, 2000, the National
Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid
Glaxos policy on relationships between its employees and persons employed with
competitor companies, and affirming Glaxos right to transfer Tecson to another
sales territory.
Aggrieved, Tecson filed a Petition for Review with the Court of Appeals assailing
the NCMB Decision.
On May 19, 2003, the Court of Appeals promulgated its Decision denying
the Petition for Review on the ground that the NCMB did not err in rendering
its Decision. The appellate court held that Glaxos policy prohibiting its employees
from having personal relationships with employees of competitor companies is a
valid exercise of its management prerogatives.[4]
Tecson filed a Motion for Reconsideration of the appellate courts Decision, but
the motion was denied by the appellate court in its Resolution dated March 26,
2004.[5]
Petitioners filed the instant petition, arguing therein that (i) the Court of
Appeals erred in affirming the NCMBs finding that the Glaxos policy prohibiting its
employees from marrying an employee of a competitor company is valid; and (ii)
the Court of Appeals also erred in not finding that Tecson was constructively
dismissed when he was transferred to a new sales territory, and deprived of the
opportunity to attend products seminars and training sessions.[6]
Petitioners contend that Glaxos policy against employees marrying employees
of competitor companies violates the equal protection clause of the Constitution
because it creates invalid distinctions among employees on account only of
marriage. They claim that the policy restricts the employees right to marry.[7]
They also argue that Tecson was constructively dismissed as shown by the
following circumstances: (1) he was transferred from the Camarines Sur-Camarines
Norte sales area to the Butuan-Surigao-Agusan sales area, (2) he suffered a
diminution in pay, (3) he was excluded from attending seminars and training
sessions for medical representatives, and (4) he was prohibited from promoting
respondents products which were competing with Astras products.[8]
In its Comment on the petition, Glaxo argues that the company policy
prohibiting its employees from having a relationship with and/or marrying an
employee of a competitor company is a valid exercise of its management
prerogatives and does not violate the equal protection clause; and that Tecsons
reassignment from the Camarines Norte-Camarines Sur sales area to the Butuan
City-Surigao City and Agusan del Sur sales area does not amount to constructive
dismissal.[9]
Glaxo insists that as a company engaged in the promotion and sale of
pharmaceutical products, it has a genuine interest in ensuring that its employees
avoid any activity, relationship or interest that may conflict with their

Page 26 of 69
responsibilities to the company. Thus, it expects its employees to avoid having
personal or family interests in any competitor company which may influence their
actions and decisions and consequently deprive Glaxo of legitimate profits. The
policy is also aimed at preventing a competitor company from gaining access to its
secrets, procedures and policies.[10]
It likewise asserts that the policy does not prohibit marriage per se but only
proscribes existing or future relationships with employees of competitor companies,
and is therefore not violative of the equal protection clause. It maintains that
considering the nature of its business, the prohibition is based on valid grounds.[11]
According to Glaxo, Tecsons marriage to Bettsy, an employee of Astra, posed a
real and potential conflict of interest. Astras products were in direct competition
with 67% of the products sold by Glaxo. Hence, Glaxos enforcement of the
foregoing policy in Tecsons case was a valid exercise of its management
prerogatives.[12] In any case, Tecson was given several months to remedy the
situation, and was even encouraged not to resign but to ask his wife to resign from
Astra instead.[13]
Glaxo also points out that Tecson can no longer question the assailed company
policy because when he signed his contract of employment, he was aware that such
policy was stipulated therein. In said contract, he also agreed to resign from
respondent if the management finds that his relationship with an employee of a
competitor company would be detrimental to the interests of Glaxo.[14]
Glaxo likewise insists that Tecsons reassignment to another sales area and his
exclusion from seminars regarding respondents new products did not amount to
constructive dismissal.
It claims that in view of Tecsons refusal to resign, he was relocated from the
Camarines Sur-Camarines Norte sales area to the Butuan City-Surigao City and
Agusan del Sur sales area. Glaxo asserts that in effecting the reassignment, it also
considered the welfare of Tecsons family. Since Tecsons hometown was in Agusan
del Sur and his wife traces her roots to Butuan City, Glaxo assumed that his
transfer from the Bicol region to the Butuan City sales area would be favorable to
him and his family as he would be relocating to a familiar territory and minimizing
his travel expenses.[15]
In addition, Glaxo avers that Tecsons exclusion from the seminar concerning
the new anti-asthma drug was due to the fact that said product was in direct
competition with a drug which was soon to be sold by Astra, and hence, would pose
a potential conflict of interest for him. Lastly, the delay in Tecsons receipt of his
sales paraphernalia was due to the mix-up created by his refusal to transfer to
the Butuan City sales area (his paraphernalia was delivered to his new sales area
instead of Naga City because the supplier thought he already transferred to
Butuan).[16]
The Court is tasked to resolve the following issues: (1) Whether the Court of
Appeals erred in ruling that Glaxos policy against its employees marrying
employees from competitor companies is valid, and in not holding that said policy

Page 27 of 69
violates the equal protection clause of the Constitution; (2) Whether Tecson was
constructively dismissed.
The Court finds no merit in the petition.
The stipulation in Tecsons contract of employment with Glaxo being questioned
by petitioners provides:

10. You agree to disclose to management any existing or future relationship you
may have, either by consanguinity or affinity with co-employees or employees of
competing drug companies. Should it pose a possible conflict of interest in
management discretion, you agree to resign voluntarily from the Company as a
matter of Company policy.

[17]

The same contract also stipulates that Tecson agrees to abide by the existing
company rules of Glaxo, and to study and become acquainted with such
policies.[18] In this regard, the Employee Handbook of Glaxo expressly informs its
employees of its rules regarding conflict of interest:

1. Conflict of Interest

Employees should avoid any activity, investment relationship, or interest that may
run counter to the responsibilities which they owe Glaxo Wellcome.

Specifically, this means that employees are expected:

a. To avoid having personal or family interest, financial or otherwise, in any

competitor supplier or other businesses which may consciously or
unconsciously influence their actions or decisions and thus deprive Glaxo
Wellcome of legitimate profit.

b. To refrain from using their position in Glaxo Wellcome or knowledge of

Company plans to advance their outside personal interests, that of their
relatives, friends and other businesses.

c. To avoid outside employment or other interests for income which would impair
their effective job performance.

d. To consult with Management on such activities or relationships that may lead to

conflict of interest.

1.1. Employee Relationships

Employees with existing or future relationships either by consanguinity or affinity

with co-employees of competing drug companies are expected to disclose such
relationship to the Management. If management perceives a conflict or potential

Page 28 of 69
conflict of interest, every effort shall be made, together by management and the
employee, to arrive at a solution within six (6) months, either by transfer to
another department in a non-counter checking position, or by career preparation
toward outside employment after Glaxo Wellcome. Employees must be prepared for
possible resignation within six (6) months, if no other solution is feasible.[19]

No reversible error can be ascribed to the Court of Appeals when it ruled that
Glaxos policy prohibiting an employee from having a relationship with an employee
of a competitor company is a valid exercise of management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from competitors,
especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees of
competitor companies upon Glaxos employees is reasonable under the
circumstances because relationships of that nature might compromise the interests
of the company. In laying down the assailed company policy, Glaxo only aims to
protect its interests against the possibility that a competitor company will gain
access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises to adopt
and enforce such a policy to protect its right to reasonable returns on investments
and to expansion and growth.[20] Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the protection of labor, it does not mean
that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and
enforcement in the interest of fair play.[21]
As held in a Georgia, U.S.A case,[22] it is a legitimate business practice to guard
business confidentiality and protect a competitive position by even-handedly
disqualifying from jobs male and female applicants or employees who are married
to a competitor.Consequently, the court ruled than an employer that discharged an
employee who was married to an employee of an active competitor did not violate
Title VII of the Civil Rights Act of 1964.[23] The Court pointed out that the policy was
applied to men and women equally, and noted that the employers business was
highly competitive and that gaining inside information would constitute a
competitive advantage.
The challenged company policy does not violate the equal protection clause of
the Constitution as petitioners erroneously suggest. It is a settled principle that the
commands of the equal protection clause are addressed only to the state or those
acting under color of its authority.[24] Corollarily, it has been held in a long array of
U.S. Supreme Court decisions that the equal protection clause erects no shield
against merely private conduct, however, discriminatory or wrongful.[25] The only
exception occurs when the state[26] in any of its manifestations or actions has been
found to have become entwined or involved in the wrongful private
conduct.[27] Obviously, however, the exception is not present in this

Page 29 of 69
case. Significantly, the company actually enforced the policy after repeated
requests to the employee to comply with the policy. Indeed, the application of the
policy was made in an impartial and even-handed manner, with due regard for the
lot of the employee.
In any event, from the wordings of the contractual provision and the policy in
its employee handbook, it is clear that Glaxo does not impose an absolute
prohibition against relationships between its employees and those of competitor
companies. Its employees are free to cultivate relationships with and marry persons
of their own choosing. What the company merely seeks to avoid is a conflict of
interest between the employee and the company that may arise out of such
relationships. As succinctly explained by the appellate court, thus:

The policy being questioned is not a policy against marriage. An employee of the
company remains free to marry anyone of his or her choosing. The policy is not
aimed at restricting a personal prerogative that belongs only to the
individual. However, an employees personal decision does not detract the employer
from exercising management prerogatives to ensure maximum profit and business
success. . . [28]

The Court of Appeals also correctly noted that the assailed company policy
which forms part of respondents Employee Code of Conduct and of its contracts
with its employees, such as that signed by Tecson, was made known to him prior to
his employment.Tecson, therefore, was aware of that restriction when he signed his
employment contract and when he entered into a relationship with Bettsy. Since
Tecson knowingly and voluntarily entered into a contract of employment with
Glaxo, the stipulations therein have the force of law between them and, thus,
should be complied with in good faith.[29] He is therefore estopped from questioning
said policy.
The Court finds no merit in petitioners contention that Tecson was
constructively dismissed when he was transferred from the Camarines Norte-
Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales
area, and when he was excluded from attending the companys seminar on new
products which were directly competing with similar products manufactured by
Astra. Constructive dismissal is defined as a quitting, an involuntary resignation
resorted to when continued employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to the
employee.[30] None of these conditions are present in the instant case. The record
does not show that Tecson was demoted or unduly discriminated upon by reason of
such transfer. As found by the appellate court, Glaxo properly exercised its
management prerogative in reassigning Tecson to the Butuan City sales area:

. . . In this case, petitioners transfer to another place of assignment was merely in

keeping with the policy of the company in avoidance of conflict of interest, and thus
validNote that [Tecsons] wife holds a sensitive supervisory position as Branch
Coordinator in her employer-company which requires her to work in close
coordination with District Managers and Medical Representatives. Her duties include

Page 30 of 69
monitoring sales of Astra products, conducting sales drives, establishing and
furthering relationship with customers, collection, monitoring and managing Astras
inventoryshe therefore takes an active participation in the market war characterized
as it is by stiff competition among pharmaceutical companies. Moreover, and this is
significant, petitioners sales territory covers Camarines Sur and Camarines Norte
while his wife is supervising a branch of her employer in Albay. The proximity of
their areas of responsibility, all in the same Bicol Region, renders the conflict of
interest not only possible, but actual, as learning by one spouse of the others
market strategies in the region would be inevitable. [Managements] appreciation of
a conflict of interest is therefore not merely illusory and wanting in factual basis[31]

In Abbott Laboratories (Phils.), Inc. v. National Labor Relations

Commission,[32] which involved a complaint filed by a medical representative
against his employer drug company for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment to a new area, the Court
upheld the right of the drug company to transfer or reassign its employee in
accordance with its operational demands and requirements. The ruling of the Court
therein, quoted hereunder, also finds application in the instant case:

By the very nature of his employment, a drug salesman or medical representative

is expected to travel. He should anticipate reassignment according to the demands
of their business. It would be a poor drug corporation which cannot even assign its
representatives or detail men to new markets calling for opening or expansion or to
areas where the need for pushing its products is great. More so if such
reassignments are part of the employment contract.[33]

As noted earlier, the challenged policy has been implemented by Glaxo

impartially and disinterestedly for a long period of time. In the case at bar, the
record shows that Glaxo gave Tecson several chances to eliminate the conflict of
interest brought about by his relationship with Bettsy. When their relationship was
still in its initial stage, Tecsons supervisors at Glaxo constantly reminded him about
its effects on his employment with the company and on the companys
interests. After Tecson married Bettsy, Glaxo gave him time to resolve the conflict
by either resigning from the company or asking his wife to resign from Astra. Glaxo
even expressed its desire to retain Tecson in its employ because of his satisfactory
performance and suggested that he ask Bettsy to resign from her company
instead. Glaxo likewise acceded to his repeated requests for more time to resolve
the conflict of interest. When the problem could not be resolved after several years
of waiting, Glaxo was constrained to reassign Tecson to a sales area different from
that handled by his wife for Astra. Notably, the Court did not terminate Tecson from
employment but only reassigned him to another area where his home province,
Agusan del Sur, was included. In effecting Tecsons transfer, Glaxo even considered
the welfare of Tecsons family.Clearly, the foregoing dispels any suspicion of
unfairness and bad faith on the part of Glaxo.[34]
WHEREFORE, the Petition is DENIED for lack of merit. Costs against
petitioners.
SO ORDERED.

Page 31 of 69
Del monte v velasco

G.R. NO. 153477 March 6, 2007

DEL MONTE PHILIPPINES, INC., Petitioner,

vs.
LOLITA VELASCO, Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before this Court is a Petition for Certiorari under Rule 45 seeking to reverse and
set aside the Decision1 dated July 23, 2001 of the Court of Appeals (CA) in CA-G.R.
SP No. 56571 which affirmed the Decision dated May 27, 1999 of the National
Labor Relations Commission (NLRC); and the CA Resolution2 dated May 7, 2002
which denied the petitioner's Motion for Reconsideration.

The facts of the case, as stated by the CA, are as follows:

Lolita M. Velasco (respondent) started working with Del Monte Philippines

(petitioner) on October 21, 1976 as a seasonal employee and was regularized on
May 1, 1977. Her latest assignment was as Field Laborer.

On June 16, 1987, respondent was warned in writing due to her absences. On May
4, 1991, respondent, thru a letter, was again warned in writing by petitioner about
her absences without permission and a forfeiture of her vacation leave entitlement
for the year 1990-1991 was imposed against her.

On September 14, 1992, another warning letter was sent to respondent regarding
her absences without permission during the year 1991-1992. Her vacation
entitlement for the said employment year affected was consequently forfeited.

In view of the said alleged absences without permission, on September 17, 1994, a
notice of hearing was sent to respondent notifying her of the charges filed against
her for violating the Absence Without Official Leave rule: that is for excessive
absence without permission on August 15-18, 29-31 and September 1-10, 1994.
The hearing was set on September 23, 1994.

Page 32 of 69
Respondent having failed to appear on September 23, 1994 hearing, another notice
of hearing was sent to her resetting the investigation on September 30, 1994. It
was again reset to October 5, 1994.

On January 10, 1995, after hearing, the petitioner terminated the services of
respondent effective January 16, 1994 due to excessive absences without
permission.

Feeling aggrieved, respondent filed a case for illegal dismissal against petitioner
asserting that her dismissal was illegal because she was on the family way suffering
from urinary tract infection, a pregnancy-borne, at the time she committed the
alleged absences. She explained that for her absence from work on August 15, 16,
17 & 18, 1994 she had sent an application for leave to her supervisor, Prima
Ybaez. Thereafter, she went to the company hospital for check-up and was
advised accordingly to rest in quarters for four (4) days or on August 27 to 30,
1994. Still not feeling well, she failed to work on September 1, 1994 and was again
advised two days of rest in quarters on September 2-3, 1994. Unable to recover,
she went to see an outside doctor, Dr. Marilyn Casino, and the latter ordered her to
rest for another five (5) consecutive days, or from September 5 to 9, 1994. She
declared she did not file the adequate leave of absence because a medical
certificate was already sufficient per company policy. On September 10, 1994 she
failed to report to work but sent an application for leave of absence to her
supervisor, Prima Ybaez, which was not anymore accepted.3

On April 13, 1998, the Labor Arbiter dismissed the Complaint for lack of merit. The
Labor Arbiter held that the respondent was an incorrigible absentee; that she failed
to file leaves of absence; that her absences in 1986 and 1987 were without
permission; that the petitioner gave the respondent several chances to reform
herself; and that the respondent did not justify her failure to appear during the
scheduled hearings and failed to explain her absences.

Respondent appealed to the NLRC. On May 29, 1999, the NLRC issued its
Resolution, the dispositive portion of which reads:

WHEREFORE, foregoing considered, the instant decision is hereby VACATED and a

new one entered declaring the dismissal of complainant as ILLEGAL. In consonance
with Art. 279 of the Labor [Code], her reinstatement with full backwages from the
date of her termination from employment to her actual reinstatement is necessarily
decreed.4

The NLRC held that, under the company rules, the employee may make a
subsequent justification of her absenteeism, which she was able to do in the instant
case; that while it is not disputed that the respondent incurred absences exceeding
six (6) days within one employment year a ground for dismissal under the
company rules the petitioner actually admitted the fact that the respondent had
been pregnant, hence, negating petitioners assertion that the respondent failed to
give any explanation of her absences; that the records bear the admission of
petitioners officer of the receipt of the hospital record showing the cause of her

Page 33 of 69
absences ("RIQ advice" or "rest-in-quarters") for August 19-20, 1994 which, in
turn, could already serve as reference in resolving the absences on August 15 to
18; that the petitioner further admitted that the respondent was under "RIQ advice"
on September 2-3, 1994 and yet insisted in including these dates among
respondents 16 purported unexplained absences; that it is sufficient notice for the
petitioner, "a plain laborer" with "unsophisticated judgment," to send word to her
employer through a co-worker on August 15 to 16, 1994 that she was frequently
vomiting; that the sheer distance between respondents home and her workplace
made it difficult to send formal notice; that respondent even sent her child of
tender age to inform her supervisor about her absence on September 5, 1994 due
to stomach ache, but her child failed to approach the officer because her child felt
ashamed, if not mortified; that respondents narration that she had to bear pains
during her absences on September 21 to 27, 1994 is credible; that she dared not
venture through the roads for fear of forest creatures or predators; that the
petitioner is guilty of unlawfully discharging respondent on account of her
pregnancy under Article 137(2) of the Labor Code; and, that petitioners reference
to the previous absenteeism of respondent is misplaced because the latter had
already been penalized therefor.

Petitioners Motion for Reconsideration was denied on September 30, 1999.

The petitioner then appealed to the CA. On July 23, 2001, the CA promulgated its
Decision the dispositive portion of which states:

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the instant petition is DISMISSED,
the Resolutions, dated May 27, 1999 and September 30, 1999 of the National Labor
Relations Commission in NLRC CA No. M-003926-98, are hereby AFFIRMED in toto.

SO ORDERED.5

In affirming the NLRC, the CA held that absences due to a justified cause cannot be
a ground for dismissal; that it is undisputed that the respondent was pregnant at
the time she incurred the absences in question; that the certification issued by a
private doctor duly established this fact; that it was no less than petitioners
company doctor who advised the respondent to have rest-in-quarters for four days
on account of a pregnancy- related sickness; that it had been duly established that
respondent filed leaves of absence though the last had been refused by the
company supervisor; that the dismissal of an employee due to prolonged absence
with leave by reason of illness duly established by the presentation of a medical
certificate is not justified; that it is undisputed that respondents sickness was
pregnancy-related; that under Article 137(2) of the Labor Code, the petitioner
committed a prohibited act in discharging a woman on account of her pregnancy.

On May 7, 2002, the CA denied petitioners Motion for Reconsideration.

Hence, the instant Petition raising the following issues:

I.

Page 34 of 69
The court of appeals seriously erred In considering respondents Excessive aWOPs
as justified Simply on account of her pregnancy.

II.

THE COURT OF APPEALS SERIOUSLY ERRED IN NOT CONSIDERING THAT

RESPONDENTS LATEST STRING OF ABSENCES INCURRED WITHOUT ANY PRIOR
PERMISSION, AND AS ABOVE SHOWN, WITHOUT ANY VALID JUSTIFICATION,
TAKEN TOGETHER WITH HER DAMAGING awop history, established her gross and
habitual neGlect of duties, a just and valid ground for dismissal.

III.

The court of appeals seriously erred in holding that respondents dismissal was in
violation of article 137 (prohibiting an employer to discharge an employee on
account of her pregnancy).

IV.

The court of appeals seriously erred in awarding full backwages in favor of

respondent notwithstanding petitioners evident good faith.6

The essential question is whether the employment of respondent had been validly
terminated on the ground of excessive absences without permission. Corollary to
this is the question of whether the petitioner discharged the respondent on account
of pregnancy, a prohibited act.

The petitioner posits the following arguments: (a) The evidence proffered by the
respondent, to wit: (1) the Discharge Summary indicating that she had been
admitted to the Phillips Memorial Hospital on August 23, 1994 and discharged on
August 26, 1994, and that she had been advised to "rest in quarters" for four days
from August 27, 1994 to August 30, 1994, and (2) the Medical Certificate issued by
Dr. Marilyn M. Casino stating that respondent had sought consultation on
September 4, 2002 because of spasm in the left iliac region, and was advised to
rest for five days (from September 4, 1994 up to September 8, 1994), due to
urinary tract infection, all in all establish respondents sickness only from August
23, 1994 up to August 30, 1994 and from September 4, 1994 up to September 8,
1994. In other words, respondent was absent without permission on several other
days which were not supported by any other proof of illness, specifically, on August
15, 16, 17, 18, 31, 1994 and September 1, 2, 3, 9, and 10, 1994, and, hence, she
is guilty of ten unjustified absences; (b) Per Filflex Industrial and Manufacturing Co.
v. National Labor Relations Commission (Filflex),7 if the medical certificate fails to
refer to the specific period of the employees absence, then such absences,
attributable to chronic asthmatic bronchitis, are not supported by competent proof
and, hence, they are unjustified. By parity of reasoning, in the absence of evidence
indicating any pregnancy-borne illness outside the period stated in respondents
medical certificate, such illness ought not to be considered as an acceptable excuse
for respondents excessive absences without leave; (c) Respondents latest string of

Page 35 of 69
absences, taken together with her long history of absenteeism without permission,
established her gross and habitual neglect of duties, as established by
jurisprudence; (d) The respondent was dismissed not by reason of her pregnancy
but on account of her gross and habitual neglect of duties. In other words, her
pregnancy had no bearing on the decision to terminate her employment; and, (e)
Her state of pregnancy per se could not excuse her from filing prior notice for her
absence.

Petitioners arguments are without merit.

First. The Filflex Industrial and Manufacturing Co. case is not applicable, principally
because the nature and gravity of the illness involved in that case chronic
asthmatic bronchitis are different from the conditions that are present in the
instant case, which is pregnancy and its related illnesses.

The Court takes judicial notice of the fact that the condition of asthmatic bronchitis
may be intermittent, in contrast to pregnancy which is a continuing condition
accompanied by various symptoms and related illnesses. Hence, as to the former, if
the medical certificate or other proof proffered by the worker fails to correspond
with the dates of absence, then it can be reasonably concluded that, absent any
other proof, such absences are unjustified. This is the ruling in Filflex which cannot
be applied in a straight-hand fashion in cases of pregnancy which is a long-term
condition accompanied by an assortment of related illnesses.

In this case, by the measure of substantial evidence, what is controlling is the

finding of the NLRC and the CA that respondent was pregnant and suffered from
related ailments. It would be unreasonable to isolate such condition strictly to the
dates stated in the Medical Certificate or the Discharge Summary. It can be safely
assumed that the absences that are not covered by, but which nonetheless
approximate, the dates stated in the Discharge Summary and Medical Certificate,
are due to the continuing condition of pregnancy and related illnesses, and, hence,
are justified absences.

As the CA and the NLRC correctly noted, it is not disputed that respondent was
pregnant and that she was suffering from urinary tract infection, and that her
absences were due to such facts. The petitioner admits these facts in its Petition for
Review.8 And, as the CA aptly held, it was no less than the company doctor who
advised the respondent to have "rest-in-quarters" for four days on account of a
pregnancy-related sickness.9

On this note, this Court upholds and adopts the finding of the NLRC, thus:

In this jurisdiction tardiness and absenteeism, like abandonment, are recognized

forms of neglect of duties, the existence of which justify the dismissal of the erring
employee. Respondents rule penalizing with discharge any employee who has
incurred six (6) or more absences without permission or subsequent justification is
admittedly within the purview of the foregoing standard.

Page 36 of 69
However, while it is not disputed that complainant incurred absences exceeding six
(6) days as she actually failed to report for work from August 15-18, 23-26, 29-31,
September 1-3, 5-10, 12-17, 21-24, 26-30, and October 1-3, 1994, her being
pregnant at the time these absences were incurred is not questioned and is
even admitted by respondent. It thus puzzles us why respondent asserts
complainant failed to explain satisfactorily her absences on August 15-18, 29-31,
September 1-3 and 5-10, 1994, yet reconsidered the rest of her absences for being
covered with "rest-in-quarters" (RIQ) advice from its hospital personnel when this
advice was unquestionably issued in consideration of the physiological and
emotional changes complainant, a conceiving mother, naturally developed. Medical
and health reports abundantly disclose that during the first trimester of
pregnancy, expectant mothers are plagued with morning sickness,
frequent urination, vomiting and fatigue all of which complainant was
similarly plagued with. Union official IBB Lesnas observation on
complainant being [sic] apparently not feeling well during the
investigation conducted by respondent on October 5, 1994 even remains in
the records of said proceedings. For respondent to isolate the absences of
complainant in August and mid-September, 1994 from the absences she
incurred later in said month without submitting any evidence that these
were due to causes not in manner associated with her [ ] condition renders
its justification of complainants dismissal clearly not convincing under the
circumstances.

Despite contrary declaration, the records bear the admission of

respondents P/A North Supervisor, PB Ybanez, of her receipt of the
hospital record showing complainants RIQ advice for August 19-20, 1994
which could already serve as respondents reference in resolving the
latters absences on August 15 to 18, 1994. Respondent further admitted
complainant was under RIQ advice on September 2-3, 1994, yet, insisted
in including these dates among her 16 purported unexplained absences
justifying termination of her employment.10 (emphasis supplied)

Petitioners contention that the cause for the dismissal was gross and habitual
neglect unrelated to her state of pregnancy is unpersuasive.

The Court agrees with the CA in concluding that respondents sickness was
pregnancy-related and, therefore, the petitioner cannot terminate respondents
services because in doing so, petitioner will, in effect, be violating the Labor Code
which prohibits an employer to discharge an employee on account of the latters
pregnancy.11

Article 137 of the Labor Code provides:

Art. 137. Prohibited acts. It shall be unlawful for any employer:

(1) To deny any woman employee the benefits provided for in this Chapter or
to discharge any woman employed by him for the purpose of preventing her
from enjoying any of the benefits provided under this Code;

Page 37 of 69
 (2) To discharge such woman on account of her pregnancy, while on
leave or in confinement due to her pregnancy; or

(3) To discharge or refuse the admission of such woman upon returning to

her work for fear that she may again be pregnant. (Emphasis supplied)

Second. The petitioner stresses that many women go through pregnancy and yet
manage to submit prior notices to their employer, especially if "there is no evidence
on record indicating a condition of such gravity as to preclude efforts at notifying
petitioner of her absence from work in series."12 But it must be emphasized that
under petitioners company rules, absences may be subsequently justified.13 The
Court finds no cogent reason to disturb the findings of the NLRC and the CA that
the respondent was able to subsequently justify her absences in accordance with
company rules and policy; that the respondent was pregnant at the time she
incurred the absences; that this fact of pregnancy and its related illnesses had been
duly proven through substantial evidence; that the respondent attempted to file
leaves of absence but the petitioners supervisor refused to receive them; that she
could not have filed prior leaves due to her continuing condition; and that the
petitioner, in the last analysis, dismissed the respondent on account of her
pregnancy, a prohibited act.

Third. Petitioners reliance on the jurisprudential rule that the totality of the
infractions of an employee may be taken into account to justify the dismissal, is
tenuous considering the particular circumstances obtaining in the present case.
Petitioner puts much emphasis on respondents "long history" of unauthorized
absences committed several years beforehand. However, petitioner cannot use
these previous infractions to lay down a pattern of absenteeism or habitual
disregard of company rules to justify the dismissal of respondent. The undeniable
fact is that during her complained absences in 1994, respondent was pregnant and
suffered related illnesses. Again, it must be stressed that respondents discharge by
reason of absences caused by her pregnancy is covered by the prohibition under
the Labor Code. Since her last string of absences is justifiable and had been
subsequently explained, the petitioner had no legal basis in considering these
absences together with her prior infractions as gross and habitual neglect.

The Court is convinced that the petitioner terminated the services of respondent on
account of her pregnancy which justified her absences and, thus, committed a
prohibited act rendering the dismissal illegal.

In fine, the Court finds no cogent reason to disturb the findings of the CA and the
NLRC.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated July 23,
2001 and the Resolution dated May 7, 2002 of the Court of Appeals
are AFFIRMED.

No pronouncement as to costs.

Page 38 of 69
SO ORDERED.

Lakpue drug v belga

LAKPUE DRUG, INC., LA G.R. No. 166379
CROESUS PHARMA, INC.,
TROPICAL BIOLOGICAL PHILS.,
INC. (all known as LAKPUE GROUP
OF COMPANIES) and/or ENRIQUE
CASTILLO, JR.,
Petitioners, Present:
Davide, Jr., C.J. (Chairman),

- versus - Quisumbing,

Ynares-Santiago,

Carpio, and

Azcuna, JJ.

MA. LOURDES BELGA,

Respondent. Promulgated:

October 20, 2005

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

Before us is a petition for review of the July 28, 2004 Decision[1] of the Court of
Appeals in CA-G.R. SP No. 80616 which reversed and set aside the April 14, 2003
Decision[2] of the National Labor Relations Commission (NLRC) in NLRC NCR 00-09-
04981-01; and its December 17, 2004 Resolution[3] denying the motion for
reconsideration.

Petitioner Tropical Biological Phils., Inc. (Tropical), a subsidiary of Lakpue Group of

Companies, hired on March 1, 1995 respondent Ma. Lourdes Belga (Belga) as
bookkeeper and subsequently promoted as assistant cashier. On March 19, 2001,

Page 39 of 69
Belga brought her daughter to the Philippine General Hospital (PGH) for treatment
of broncho-pneumonia. On her way to the hospital, Belga dropped by the house of
Marylinda O. Vegafria, Technical Manager of Tropical, to hand over the documents
she worked on over the weekend and to give notice of her emergency leave.

While at the PGH, Belga who was pregnant experienced labor pains and gave birth
on the same day. On March 22, 2001, or two days after giving birth, Tropical
summoned Belga to report for work but the latter replied that she could not comply
because of her situation. On March 30, 2001, Tropical sent Belga another
memorandum ordering her to report for work and also informing her of the
clarificatory conference scheduled on April 2, 2001. Belga requested that the
conference be moved to April 4, 2001 as her newborn was scheduled for check-up
on April 2, 2001. When Belga attended the clarificatory conference on April 4, 2001,
she was informed of her dismissal effective that day.

Belga thus filed a complaint with the Public Assistance and Complaint Unit
(PACU) of the Department of Labor and Employment (DOLE). Attempts to settle the
case failed, hence the parties brought the case before the NLRC-NCR.

Tropical, for its part, averred that it hired Belga on March 1, 1995 as a bookkeeper
and later promoted to various positions the last of which was as Treasury Assistant.
Tropical claimed that this position was not merely clerical because it included duties
such as assisting the cashier in preparing deposit slips, bills purchased, withdrawal
slips, provisional receipts, incoming and outgoing bank transactions, postdated
checks, suppliers checklist and issuance of checks, authorities to debit and doing
liaison work with banks.

Tropical also alleged that Belga concealed her pregnancy from the company. She
did not apply for leave and her absence disrupted Tropicals financial transactions.
On March 21, 2001, it required Belga to explain her unauthorized absence and on
March 30, 2001, it informed her of a conference scheduled on April 2, 2001.
Tropical claimed that Belga refused to receive the second memorandum and did not
attend the conference. She reported for work only on April 4, 2001 where she was
given a chance to explain.

On April 17, 2001, Tropical terminated Belga on the following grounds: (1) Absence
without official leave for 16 days; (2) Dishonesty, for deliberately concealing her
pregnancy; (3) Insubordination, for her deliberate refusal to heed and comply with

Page 40 of 69
the memoranda sent by the Personnel Department on March 21 and 30, 2001
respectively.[4]

The Labor Arbiter ruled in favor of Belga and found that she was illegally
dismissed, thus:

WHEREFORE, the termination of complainant is hereby declared

illegal. ACCORDINGLY, she should be reinstated with full backwages,
which as of May 31, 2002, now amounts to P122, 248.71.

Ten (10%) percent of the total monetary award as attorneys

fees is likewise ordered.

SO ORDERED.[5]
Tropical appealed to the NLRC, which reversed the findings of the labor arbiter in its
Decision dated April 14, 2003, thus:

WHEREFORE, in the light of the foregoing, the assailed Decision

is REVERSED and SET ASIDE. We thereby render judgment:

(1) declaring complainant-appellees dismissal valid;

and

(2) nullifying complainant-appellees monetary claims.

SO ORDERED.[6]

Upon denial of the motion for reconsideration on September 24, 2003,[7] Belga filed
a petition for certiorari with the Court of Appeals which found in favor of Belga,
thus:

WHEREFORE, premises considered, the Decision promulgated on

April 14, 2003 and the Resolution promulgated on September 24, 2003
of the public respondent National Labor Relations Commission are
hereby REVERSED and SET ASIDE. The decision of the Labor Arbiter
dated June 15, 2002 is hereby REINSTATED.

SO ORDERED.[8]
Hence, Tropical filed the instant petition claiming that:

Page 41 of 69
 I.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN

HOLDING THAT RESPONDENT WAS ILLEGALLY DISMISSED.

II.

THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERROR IN

DISREGARDING THE FINDINGS OF THE NATIONAL LABOR RELATIONS
COMMISSION.[9]

The petition lacks merit.

Tropicals ground for terminating Belga is her alleged concealment of pregnancy. It
argues that such non-disclosure is tantamount to dishonesty and impresses upon
this Court the importance of Belgas position and the gravity of the disruption her
unexpected absence brought to the company. Tropical also charges Belga with
insubordination for refusing to comply with its directives to report for work and to
explain her absence.

Tropical cites the following paragraphs of Article 282 of the Labor Code as legal
basis for terminating Belga:

Article 282. Termination by employer. An employer may

terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee

of the lawful orders of his employer or representative in connection
with his work;

....

(c) Fraud or willful breach by the employee of the trust reposed

in him by his employer or duly authorized representative; ....

We have defined misconduct as a transgression of some established and definite

rule of action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment. The misconduct to be serious must
be of such grave and aggravated character and not merely trivial and unimportant.
Such misconduct, however serious, must, nevertheless, be in connection with the
employees work to constitute just cause for his separation.[10]

Page 42 of 69
In the instant case, the alleged misconduct of Belga barely falls within the situation
contemplated by the law. Her absence for 16 days was justified considering that
she had just delivered a child, which can hardly be considered a forbidden act, a
dereliction of duty; much less does it imply wrongful intent on the part of Belga.
Tropical harps on the alleged concealment by Belga of her pregnancy. This
argument, however, begs the question as to how one can conceal a full-term
pregnancy. We agree with respondents position that it can hardly escape notice
how she grows bigger each day. While there may be instances where the pregnancy
may be inconspicuous, it has not been sufficiently proven by Tropical that Belgas
case is such.

Belgas failure to formally inform Tropical of her pregnancy can not be

considered as grave misconduct directly connected to her work as to constitute just
cause for her separation.

The charge of disobedience for Belgas failure to comply with the memoranda
must likewise fail. Disobedience, as a just cause for termination, must be willful or
intentional. Willfulness is characterized by a wrongful and perverse mental attitude
rendering the employees act inconsistent with proper subordination.[11] In the
instant case, the memoranda were given to Belga two days after she had given
birth. It was thus physically impossible for Belga to report for work and explain her
absence, as ordered.

Tropical avers that Belgas job as Treasury Assistant is a position of responsibility

since she handles vital transactions for the company. It adds that the nature of
Belgas work and the character of her duties involved utmost trust and confidence.

Time and again, we have recognized the right of employers to dismiss employees
by reason of loss of trust and confidence. However, we emphasize that such ground
is premised on the fact that the employee concerned holds a position of
responsibility or trust and confidence.[12] In order to constitute a just cause for
dismissal, the act complained of must be work-related such as would show the
employee concerned to be unfit to continue working for the employer.[13] More
importantly, the loss of trust and confidence must be based on the willful breach of
the trust reposed in the employee by his employer. A breach of trust is willful if it is
done intentionally, knowingly and purposely, without justifiable excuse, as

Page 43 of 69
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.[14]

Belga was an assistant cashier whose primary function was to assist the cashier in
such duties as preparation of deposit slips, provisional receipts, post-dated checks,
etc. As correctly observed by the Court of Appeals, these functions are essentially
clerical. For while ostensibly, the documents that Belga prepares as Assistant
Cashier pertain to her employers property, her work does not call for independent
judgment or discretion. Belga simply prepares the documents as instructed by her
superiors subject to the latters verification or approval. Hence, her position cannot
be considered as one of responsibility or imbued with trust and confidence.

Furthermore, Tropical has not satisfactorily shown how and to what extent it had
suffered damages because of Belgas absences. For while it may be true that the
company was caught unprepared and unable to hire a temporary replacement, we
are not convinced that Belgas absence for 16 days has wreaked havoc on Tropicals
business as to justify her termination from the company. On the other hand, it is
undisputed that Belga has worked for Tropical for 7 years without any blemish on
her service record. In fact, the company admitted in its petition that she has
rendered seven (7) years of service in compliance with [the companys]
rules. [15]
And her fidelity to her work is evident because even in the midst of an
emergency, she managed to transmit to the company the documents she worked
on over the weekend so that it would not cause any problem for the company.

All told, we find that the penalty of dismissal was too harsh in light of the
circumstances obtaining in this case. While it may be true that Belga ought to have
formally informed the company of her impending maternity leave so as to give the
latter sufficient time to find a temporary replacement, her termination from
employment is not commensurate to her lapse in judgment.

Even assuming that there was just cause for terminating Belga, her dismissal is
nonetheless invalid for failure of Tropical to observe the twin-notice requirement.
The March 21, 2001 memorandum merely informed her to report for work and
explain her absences. The March 30, 2001 memorandum demanded that she report
for work and attend a clarificatory conference. Belga received the first
memorandum but allegedly refused to receive the second.

Page 44 of 69
In Electro System Industries Corporation v. National Labor Relations
Commission,[16] we held that, in dismissing an employee, the employer has the
burden of proving that the worker has been served two notices: (1) one to apprise
him of the particular acts or omissions for which his dismissal is sought, and (2) the
other to inform him of his employers decision to dismiss him. The first notice must
state that the dismissal is sought for the act or omission charged against the
employee, otherwise the notice cannot be considered sufficient compliance with the
rules. It must also inform outright that an investigation will be conducted on the
charges particularized therein which, if proven, will result to his dismissal. Further,
we held that a notation in the notice that the employee refused to sign is not
sufficient proof that the employer attempted to serve the notice to the employee.

An employee who was illegally dismissed from work is 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.[17] Thus, Belga is entitled to be reinstated to her former or
equivalent position and to the payment of full backwages from the time she was
illegally dismissed until her actual reinstatement.

WHEREFORE, the instant petition is DENIED. The July 28, 2004 Decision of the
Court of Appeals in CA-G.R. SP No. 80616 and its December 17, 2004 Resolution
are AFFIRMED in toto.

Domingo v rayala
MA. LOURDES T. DOMINGO, G.R. No. 155831

Petitioner,

- versus -

Page 45 of 69
ROGELIO I. RAYALA,

Respondent.

x-------------------------x

ROGELIO I. RAYALA, G.R. No. 155840

Petitioner,

- versus -

OFFICE OF THE PRESIDENT; RONALDO V. ZAMORA, in his

capacity as Executive Secretary; ROY V. SENERES, in his
capacity as Chairman of the National Labor Relations
Commission (in lieu of RAUL T. AQUINO, in his capacity
as Acting Chairman of the National labor Relations
Commission); and MA. LOURDES T. DOMINGO,

Respondents.

x-------------------------x

The REPUBLIC OF THE PHILIPPINES, represented by the

OFFICE OF THE PRESIDENT; and ALBERTO G. ROMULO, in
his capacity as Executive Secretary,

Petitioners,

G.R. No. 158700

- versus -
Present:

YNARES-SANTIAGO, J.,

Chairperson,

Page 46 of 69
ROGELIO I. RAYALA, AUSTRIA-MARTINEZ,

Respondent. CORONA,*

NACHURA, and

REYES, JJ.

Promulgated:

February 18, 2008

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

Sexual harassment is an imposition of misplaced superiority which is enough

to dampen an employees spirit and her capacity for advancement. It affects her
sense of judgment; it changes her life.[1]

Before this Court are three Petitions for Review on Certiorari assailing the
October 18, 2002 Resolution of the CAs Former Ninth Division[2] in CA-G.R. SP No.
61026. The Resolution modified the December 14, 2001 Decision[3] of the Court of
Appeals Eleventh Division, which had affirmed the Decision of the Office of the
President (OP) dismissing from the service then National Labor Relations
Commission (NLRC) Chairman Rogelio I. Rayala (Rayala) for disgraceful and
immoral conduct.

All three petitions stem from the same factual antecedents.

Page 47 of 69
 On November 16, 1998, Ma. Lourdes T. Domingo (Domingo), then
Stenographic Reporter III at the NLRC, filed a Complaint for sexual harassment
against Rayala before Secretary Bienvenido Laguesma of the Department of Labor
and Employment (DOLE).

To support the Complaint, Domingo executed an Affidavit narrating the

incidences of sexual harassment complained of, thus:

xxxx

4. Sa simula ay pabulong na sinasabihan lang ako ni Chairman Rayala

ng mga salitang Lot, gumaganda ka yata?

5. Sa ibang mga pagkakataon nilalapitan na ako ni Chairman at

hahawakan ang aking balikat sabay pisil sa mga ito habang ako
ay nagta-type at habang nagbibigay siya ng diktasyon. Sa mga
pagkakataong ito, kinakabahan ako. Natatakot na baka
mangyari sa akin ang mga napapabalitang insidente na nangyari
na noon tungkol sa mga sekretarya niyang nagbitiw gawa ng
mga mahahalay na panghihipo ni Chairman.

6. Noong ika-10 ng Setyembre, 1998, nang ako ay nasa 8th Floor, may
nagsabi sa akin na kailangan akong bumaba sa 7th Floor kung
nasaan ang aming opisina dahil sa may koreksyon daw na
gagawin sa mga papel na tinayp ko. Bumaba naman ako para
gawin ito. Habang ginagawa ko ito, lumabas si Chairman Rayala
sa silid ni Mr. Alex Lopez. Inutusan ako ni Chairman na
sumunod sa kaniyang silid. Nang nasa silid na kami, sinabi niya
sa akin:

Chairman: Lot, I like you a lot. Naiiba ka sa lahat.

At pagkatapos ako ay kaniyang inusisa tungkol sa mga personal na

bagay sa aking buhay. Ang ilan dito ay tungkol sa aking mga
magulang, kapatid, pag-aaral at kung may boyfriend na raw ba ako.

Chairman: May boyfriend ka na ba?

Lourdes: Dati nagkaroon po.

Chairman: Nasaan na siya?

Lourdes: Nag-asawa na ho.

Chairman: Bakit hindi kayo nagkatuluyan?

Page 48 of 69
 Lourdes: Nainip po.

Chairman: Pagkatapos mo ng kurso mo ay kumuha ka ng

Law at ako ang bahala sa iyo, hanggang ako
pa ang Chairman dito.

Pagkatapos ay kumuha siya ng pera sa kaniyang amerikana at inaabot

sa akin.

Chairman: Kuhanin mo ito.

Lourdes: Huwag na ho hindi ko kailangan.

Chairman: Hindi sige, kuhanin mo. Ayusin mo ang dapat

ayusin.

Tinanggap ko po ang pera ng may pag-aalinlangan. Natatakot at

kinakabahan na kapag hindi ko tinanggap ang pera ay baka siya
magagalit kasabay na rito ang pagtapon sa akin kung saan-saan
opisina o kaya ay tanggalin ako sa posisyon.

Chairman: Paglabas mo itago mo ang pera. Ayaw ko ng

may makaka-alam nito. Just the two of us.

Lourdes: Bakit naman, Sir?

Chairman: Basta. Maraming tsismosa diyan sa labas. But

I dont give them a damn. Hindi ako mamatay
sa kanila.

Tumayo na ako at lumabas. Pumanhik na ako ng 8th Floor at pumunta

ako sa officemate ko na si Agnes Magdaet. Ikinwento ko ang nangyari
sa akin sa opisina ni Chairman. Habang kinikwento ko ito kay Agnes ay
binilang namin ang pera na nagkakahalaga ng tatlong libong piso (PHP
3,000). Sinabi ni Agnes na isauli ko raw ang pera, pero ang sabi ko ay
natatakot ako baka magalit si Sir. Nagsabi agad kami kay EC Perlita
Velasco at sinalaysay ko ang nangyari. Sinabi niya na isauli ko ang
pera at noong araw ding iyon ay nagpasiya akong isauli na nga ito
ngunit hindi ako nagkaroon ng pagkakataon dahil marami siyang
naging bisita. Isinauli ko nga ang pera noong Lunes, Setyembre 14,
1998.

7. Noong huling linggo ng Setyembre, 1998, ay may tinanong din sa

akin si Chairman Rayala na hindi ko masikmura, at sa aking palagay at
tahasang pambabastos sa akin.

Page 49 of 69
 Chairman: Lot, may ka live-in ka ba?

Lourdes: Sir, wala po.

Chairman: Bakit malaki ang balakang mo?

Lourdes: Kayo, Sir ha! Masama sa amin ang may ka live-

in.

Chairman: Bakit, ano ba ang relihiyon ninyo?

Lourdes: Catholic, Sir. Kailangan ikasal muna.

Chairman: Bakit ako, hindi kasal.

Lourdes: Sir, di magpakasal kayo.

Chairman: Huh. Ibahin na nga natin ang usapan.

8. Noong Oktubre 29, 1998, ako ay pumasok sa kwarto ni Chairman

Rayala. Ito ay sa kadahilanang ang fax machine ay nasa loob ng
kaniyang kwarto. Ang nag-aasikaso nito, si Riza Ocampo, ay naka-
leave kaya ako ang nag-asikaso nito noong araw na iyon. Nang
mabigyan ko na ng fax tone yung kausap ko, pagharap ko sa kanan ay
nakaharang sa dadaanan ko si Chairman Rayala. Tinitingnan ako sa
mata at ang titig niya ay umuusad mula ulo hanggang dibdib tapos ay
ngumiti na may mahalay na pakahulugan.

9. Noong hapon naman ng pareho pa ring petsa, may nag-aapply na

sekretarya sa opisina, sinabi ko ito kay Chairman Rayala:

Lourdes: Sir, si Pinky po yung applicant, mag-

papainterview po yata sa inyo.

Chairman: Sabihin mo magpa-pap smear muna siya

Chairman: O sige, i-refer mo kay Alex. (Alex Lopez, Chief

of Staff).

10. Noong Nobyembre 9, 1998, ako ay tinawag ni Chairman Rayala sa

kaniyang opisina upang kuhanin ko ang diktasyon niya para kay ELA
Oscar Uy. Hindi pa kami nakakatapos ng unang talata, may pumasok
na bisita si Chairman, si Baby Pangilinan na sinamahan ni Riza
Ocampo. Pinalabas muna ako ni Chairman. Nang maka-alis na si Ms.
Pangilinan, pinapasok na niya ako ulit. Umupo ako. Lumapit sa likuran
ko si Chairman, hinawakan ang kaliwang balikat ko na pinipisil ng
kanang kamay niya at sinabi:

Page 50 of 69
 Chairman: Saan na ba tayo natapos?

Palakad-lakad siya sa aking likuran habang nag-didikta. Huminto siya

pagkatapos, at nilagay niya ang kanang kamay niya sa aking kanang
balikat at pinisil-pisil ito pagkatapos ay pinagapang niya ito sa kanang
bahagi ng aking leeg, at pinagapang hanggang kanang tenga at saka
kiniliti. Dito ko inalis ang kaniyang kamay sa pamamagitan ng aking
kaliwang kamay. At saka ko sinabi:

Lourdes: Sir, yung kamay ninyo alisin niyo!

Natapos ko rin ang liham na pinagagawa niya pero halos hindi ko na

maintindihan ang na-isulat ko dahil sa takot at inis na nararamdaman
ko.[4]

After the last incident narrated, Domingo filed for leave of absence and asked
to be immediately transferred. Thereafter, she filed the Complaint for sexual
harassment on the basis of Administrative Order No. 250, the Rules and
Regulations Implementing RA 7877 in the Department of Labor and Employment.

Upon receipt of the Complaint, the DOLE Secretary referred the Complaint to
the OP, Rayala being a presidential appointee. The OP, through then Executive
Secretary Ronaldo Zamora, ordered Secretary Laguesma to investigate the
allegations in the Complaint and create a committee for such purpose. On
December 4, 1998, Secretary Laguesma issued Administrative Order (AO) No. 280,
Series of 1998,[5] constituting a Committee on Decorum and Investigation
(Committee) in accordance with Republic Act (RA) 7877, the Anti-Sexual
Harassment Act of 1995.[6]

The Committee heard the parties and received their respective evidence. On
March 2, 2000, the Committee submitted its report and recommendation to
Secretary Laguesma. It found Rayala guilty of the offense charged and
recommended the imposition of the minimum penalty provided under AO 250,
which it erroneously stated as suspension for six (6) months.

The following day, Secretary Laguesma submitted a copy of the Committee

Report and Recommendation to the OP, but with the recommendation that the
penalty should be suspension for six (6) months and one (1) day, in accordance
with AO 250.

Page 51 of 69
 On May 8, 2000, the OP, through Executive Secretary Zamora, issued AO
119,[7] the pertinent portions of which read:

Upon a careful scrutiny of the evidence on record, I concur with

the findings of the Committee as to the culpability of the respondent
[Rayala], the same having been established by clear and convincing
evidence. However, I disagree with the recommendation that
respondent be meted only the penalty of suspension for six (6) months
and one (1) day considering the circumstances of the case.

What aggravates respondents situation is the undeniable

circumstance that he took advantage of his position as the superior of
the complainant. Respondent occupies the highest position in the
NLRC, being its Chairman. As head of said office, it was incumbent
upon respondent to set an example to the others as to how they
should conduct themselves in public office, to see to it that his
subordinates work efficiently in accordance with Civil Service Rules and
Regulations, and to provide them with healthy working atmosphere
wherein co-workers treat each other with respect, courtesy and
cooperation, so that in the end the public interest will be benefited
(City Mayor of Zamboanga vs. Court of Appeals, 182 SCRA 785
[1990]).

What is more, public service requires the utmost integrity and

strictest discipline (Gano vs. Leonen, 232 SCRA 99 [1994]). Thus, a
public servant must exhibit at all times the highest sense of honesty
and integrity, and utmost devotion and dedication to duty (Sec. 4 (g),
RA 6713), respect the rights of others and shall refrain from doing acts
contrary to law, and good morals (Sec. 4(c)). No less than the
Constitution sanctifies the principle that a public office is a public trust,
and enjoins all public officers and employees to serve with the highest
degree of responsibility, integrity, loyalty and efficiency (Section 1,
Article XI, 1987 Constitution).

Given these established standards, I see respondents acts not

just [as] a failure to give due courtesy and respect to his co-
employees (subordinates) or to maintain good conduct and behavior
but defiance of the basic norms or virtues which a government official
must at all times uphold, one that is contrary to law and public sense
of morality. Otherwise stated, respondent to whom stricter standards
must apply being the highest official [of] the NLRC had shown an
attitude, a frame of mind, a disgraceful conduct, which renders him
unfit to remain in the service.

Page 52 of 69
 WHEREFORE, in view of the foregoing, respondent Rogelio I.
Rayala, Chairman, National Labor Relations Commission, is found
guilty of the grave offense of disgraceful and immoral conduct and is
hereby DISMISSED from the service effective upon receipt of this
Order.

SO ORDER[ED].

Rayala filed a Motion for Reconsideration, which the OP denied in a

Resolution[8] dated May 24, 2000. He then filed a Petition for Certiorari and
Prohibition with Prayer for Temporary Restraining Order under Rule 65 of the
Revised Rules on Civil Procedure before this Court on June 14, 2000. [9] However,
the same was dismissed in a Resolution dated June 26, 2000 for
disregarding the hierarchy of courts.[10] Rayala filed a Motion for

Reconsideration[11] on August 15, 2000. In its Resolution[12] dated September 4,

2000, the Court recalled its June 26 Resolution and referred the petition to the
Court of Appeals (CA) for appropriate action.

The CA rendered its Decision[13] on December 14, 2001. It held that there
was sufficient evidence on record to create moral certainty that Rayala committed
the acts he was charged with. It said:

The complainant narrated her story complete with details. Her

straightforward and uninhibited testimony was not emasculated by the
declarations of Commissioner Rayala or his witnesses. x x x

Moreover, Commissioner Rayala has not proven any vicious

motive for Domingo and her witnesses to invent their stories. It is very
unlikely that they would perjure themselves only to accommodate the
alleged conspiracy to oust petitioner from office. Save for his empty
conjectures and speculations, Rayala failed to substantiate his
contrived conspiracy. It is a hornbook doctrine that conspiracy must be
proved by positive and convincing evidence (People v. Noroa, 329
SCRA 502 [2000]). Besides, it is improbable that the complainant
would concoct a story of sexual harassment against the highest official
of the NLRC and thereby expose herself to the possibility of losing her
job, or be the subject of reprisal from her superiors and perhaps public
ridicule if she was not telling the truth.

It also held that Rayalas dismissal was proper. The CA pointed out that
Rayala was dismissed for disgraceful and immoral conduct in violation of RA 6713,

Page 53 of 69
the Code of Conduct and Ethical Standards for Public Officials and Employees. It
held that the OP was correct in concluding that Rayalas acts violated RA 6713:

Indeed, [Rayala] was a public official, holding the Chairmanship

of the National Labor Relations Commission, entrusted with the sacred
duty of administering justice. Occupying as he does such an exalted
position, Commissioner Rayala must pay a high price for the honor
bestowed upon him. He must comport himself at all times in such a
manner that the conduct of his everyday life should be beyond
reproach and free from any impropriety. That the acts complained of
were committed within the sanctuary of [his] office compounded the
objectionable nature of his wrongdoing. By daring to violate the
complainant within the solitude of his chambers, Commissioner Rayala
placed the integrity of his office in disrepute. His disgraceful and
immoral conduct warrants his removal from office.[14]

Thus, it dismissed the petition, to wit:

IN VIEW OF ALL THE FOREGOING, the instant petition is hereby

DISMISSED and Administrative Order No. 119 as well [as] the
Resolution of the Office of the President in O.P. Case No. 00-E-9118
dated May 24, 2000 are AFFIRMED IN TOTO. No cost.

SO ORDERED.[15]

Rayala timely filed a Motion for Reconsideration. Justices Vasquez and

Tolentino voted to affirm the December 14 Decision. However, Justice Reyes
dissented mainly because AO 250 states that the penalty imposable is suspension
for six (6) months and one (1) day.[16] Pursuant to the internal rules of the CA, a
Special Division of Five was constituted.[17] In its October 18, 2002 Resolution, the
CA modified its earlier Decision:

ACCORDINGLY, the Decision dated December [14], 2001 is

MODIFIED to the effect that the penalty of dismissal is DELETED and
instead the penalty of suspension from service for the maximum
period of one (1) year is HEREBY IMPOSED upon the petitioner. The
rest of the challenged decision stands.

SO ORDERED.

Domingo filed a Petition for Review[18] before this Court, which we denied in
our February 19, 2003 Resolution for having a defective verification. She filed a

Page 54 of 69
Motion for Reconsideration, which the Court granted; hence, the petition was
reinstated.

Rayala likewise filed a Petition for Review[19] with this Court essentially
arguing that he is not guilty of any act of sexual harassment.

Meanwhile, the Republic filed a Motion for Reconsideration of the CAs October
18, 2002 Resolution. The CA denied the same in its June 3, 2003 Resolution, the
dispositive portion of which reads:

ACCORDINGLY, by a majority vote, public respondents Motion

for Reconsideration, (sic) is DENIED.

SO ORDERED.

The Republic then filed its own Petition for Review.[20]

On June 28, 2004, the Court directed the consolidation of the three (3)
petitions.

G.R. No. 155831

Domingo assails the CAs resolution modifying the penalty imposed by the
Office of the President. She raises this issue:

The Court of Appeals erred in modifying the penalty for the respondent
from dismissal to suspension from service for the maximum period of
one year. The President has the prerogative to determine the proper
penalty to be imposed on an erring Presidential appointee. The
President was well within his power when he fittingly used that
prerogative in deciding to dismiss the respondent from the service.[21]

She argues that the power to remove Rayala, a presidential appointee, is

lodged with the President who has control of the entire Executive Department, its
bureaus and offices. The OPs decision was arrived at after affording Rayala due
process. Hence, his dismissal from the service is a prerogative that is entirely with
the President.[22]

As to the applicability of AO No. 250, she argues that the same was not
intended to cover cases against presidential appointees. AO No. 250 refers only to
the instances wherein the DOLE Secretary is the disciplining authority, and thus,

Page 55 of 69
the AO does not circumscribe the power of the President to dismiss an erring
presidential appointee.

G.R. No. 155840

In his petition, Rayala raises the following issues:

I. CONTRARY TO THE FINDINGS OF THE COURT OF

APPEALS, THE ACTS OF HEREIN PETITIONER DO NOT
CONSTITUTE SEXUAL HARASSMENT AS LAID DOWN BY
THE En Banc RULING IN THE CASE OF AQUINO vs.
ACOSTA, ibid., AS WELL AS IN THE APPLICATION OF
EXISTING LAWS.

II. CONTRARY TO THE FINDINGS OF THE HONORABLE

COURT OF APPEALS, INTENT IS AN INDISPENSABLE
ELEMENT IN A CASE FOR SEXUAL HARASSMENT. THE
HONORABLE COURT ERRED IN ITS FINDING THAT IT IS
AN OFFENSE THAT IS MALUM PROHIBITUM.

III. THE INVESTIGATION COMMITTEE, THE OFFICE OF

THE PRESIDENT, AND NOW, THE HONORABLE COURT OF
APPEALS, HAS MISAPPLIED AND EXPANDED THE
DEFINITION OF SEXUAL HARASSMENT IN THE
WORKPLACE UNDER R.A. No. 7877, BY APPLYING DOLE
A.O. 250, WHICH RUNS COUNTER TO THE RECENT
PRONOUNCEMENTS OF THIS HONORABLE SUPREME
COURT.[23]

Invoking Aquino v. Acosta,[24] Rayala argues that the case is the definitive
ruling on what constitutes sexual harassment. Thus, he posits that for sexual
harassment to exist under RA 7877, there must be: (a) demand, request, or
requirement of a sexual favor; (b) the same is made a pre-condition to hiring, re-
employment, or continued employment; or (c) the denial thereof results in
discrimination against the employee.

Page 56 of 69
 Rayala asserts that Domingo has failed to allege and establish any sexual
favor, demand, or request from petitioner in exchange for her continued
employment or for her promotion. According to Rayala, the acts imputed to him are
without malice or ulterior motive. It was merely Domingos perception of malice in
his alleged acts a product of her own imagination[25] that led her to file the sexual
harassment complaint.

Likewise, Rayala assails the OPs interpretation, as upheld by the CA, that RA
7877 is malum prohibitum such that the defense of absence of malice is unavailing.
He argues that sexual harassment is considered an offense against a particular
person, not against society as a whole. Thus, he claims that intent is an essential
element of the offense because the law requires as a conditio sine qua non that a
sexual favor be first sought by the offender in order to achieve certain specific
results. Sexual harassment is committed with the perpetrators deliberate intent to
commit the offense.[26]

Rayala next argues that AO 250 expands the acts proscribed in RA 7877. In
particular, he assails the definition of the forms of sexual harassment:

Rule IV

FORMS OF SEXUAL HARASSMENT

Section 1. Forms of Sexual Harassment. Sexual harassment

may be committed in any of the following forms:

a) Overt sexual advances;

b) Unwelcome or improper gestures of affection;

c) Request or demand for sexual favors including but not limited

to going out on dates, outings or the like for the same purpose;

d) Any other act or conduct of a sexual nature or for purposes of

sexual gratification which is generally annoying, disgusting or offensive
to the victim.[27]

He posits that these acts alone without corresponding demand, request, or

requirement do not constitute sexual harassment as contemplated by the
law.[28] He alleges that the rule-making power granted to the employer in Section
4(a) of RA 7877 is limited only to procedural matters. The law did not delegate to
the employer the power to promulgate rules which would provide other or

Page 57 of 69
additional forms of sexual harassment, or to come up with its own definition of
sexual harassment.[29]

G.R. No. 158700

The Republic raises this issue:

Whether or not the President of the Philippines may validly

dismiss respondent Rayala as Chairman of the NLRC for
committing acts of sexual harassment.[30]

The Republic argues that Rayalas acts constitute sexual harassment under
AO 250. His acts constitute unwelcome or improper gestures of affection and are
acts or conduct of a sexual nature, which are generally annoying or offensive to the
victim.[31]

It also contends that there is no legal basis for the CAs reduction of the
penalty imposed by the OP. Rayalas dismissal is valid and warranted under the
circumstances. The power to remove the NLRC Chairman solely rests upon the
President, limited only by the requirements under the law and the due process
clause.

The Republic further claims that, although AO 250 provides only a one (1)
year suspension, it will not prevent the OP from validly imposing the penalty of
dismissal on Rayala. It argues that even though Rayala is a presidential appointee,
he is still subject to the Civil Service Law. Under the Civil Service Law, disgraceful
and immoral conduct, the acts imputed to Rayala, constitute grave misconduct
punishable by dismissal from the service.[32] The Republic adds that Rayalas
position is invested with public trust and his acts violated that trust; thus, he should
be dismissed from the service.

This argument, according to the Republic, is also supported by Article 215 of

the Labor Code, which states that the Chairman of the NLRC holds office until he
reaches the age of 65 only during good behavior.[33] Since Rayalas security of
tenure is conditioned upon his good behavior, he may be removed from office if it is
proven that he has failed to live up to this standard.

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 All the issues raised in these three cases can be summed up in two ultimate
questions, namely:

(1) Did Rayala commit sexual harassment?

(2) If he did, what is the applicable penalty?

Initially, however, we must resolve a procedural issue raised by Rayala. He

accuses the Office of the Solicitor General (OSG), as counsel for the Republic, of
forum shopping because it filed a motion for reconsideration of the decision in CA-
G.R. SP No. 61026 and then filed a comment in G.R. No. 155840 before this Court.

We do not agree.

Forum shopping is an act of a party, against whom an adverse judgment or

order has been rendered in one forum, of seeking and possibly securing a favorable
opinion in another forum, other than by appeal or special civil action
for certiorari.[34]It consists of filing multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of
obtaining a favorable judgment.[35]

There is forum shopping when the following elements concur: (1) identity of
the parties or, at least, of the parties who represent the same interest in both
actions; (2) identity of the rights asserted and relief prayed for, as the latter is
founded on the same set of facts; and (3) identity of the two preceding particulars
such that any judgment rendered in the other action will amount to res judicata in
the action under consideration or will constitute litis pendentia.[36]

Reviewing the antecedents of these consolidated cases, we note that the CA

rendered the assailed Resolution on October 18, 2002. The Republic filed its Motion
for Reconsideration on November 22, 2002. On the other hand, Rayala filed his
petition before this Court on November 21, 2002. While the Republics Motion for
Reconsideration was pending resolution before the CA, on December 2, 2002, it
was directed by this Court to file its Comment on Rayalas petition, which it
submitted on June 16, 2003.

When the CA denied the Motion for Reconsideration, the Republic filed its
own Petition for Review with this Court on July 3, 2003. It cited in its Certification
and Verification of a Non-Forum Shopping (sic), that there was a case involving the

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same facts pending before this Court denominated as G.R. No. 155840. With
respect to Domingos petition, the same had already been dismissed on February
19, 2003. Domingos petition was reinstated on June 16, 2003 but the resolution
was received by the OSG only on July 25, 2003, or after it had filed its own
petition.[37]

Based on the foregoing, it cannot be said that the OSG is guilty of forum
shopping. We must point out that it was Rayala who filed the petition in the CA,
with the Republic as the adverse party. Rayala himself filed a motion for
reconsideration of the CAs December 21, 2001 Decision, which led to a more
favorable ruling, i.e., the lowering of the penalty from dismissal to one-year
suspension. The parties adversely affected by this ruling (Domingo and the
Republic) had the right to question the same on motion for reconsideration. But
Domingo directly filed a Petition for Review with this Court, as did Rayala. When the
Republic opted to file a motion for reconsideration, it was merely exercising a
right. That Rayala and Domingo had by then already filed cases before the SC did
not take away this right. Thus, when this Court directed the Republic to file its
Comment on Rayalas petition, it had to comply, even if it had an unresolved motion
for reconsideration with the CA, lest it be cited for contempt.

Accordingly, it cannot be said that the OSG file[d] multiple suits involving the
same parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment.

We now proceed to discuss the substantive issues.

It is noteworthy that the five CA Justices who deliberated on the case were
unanimous in upholding the findings of the Committee and the OP. They found the
assessment made by the Committee and the OP to be a meticulous and
dispassionate analysis of the testimonies of the complainant (Domingo), the
respondent (Rayala), and their respective witnesses. [38] They differed only on the
appropriate imposable penalty.

That Rayala committed the acts complained of and was guilty of sexual
harassment is, therefore, the common factual finding of not just one, but three
independent bodies: the Committee, the OP and the CA. It should be remembered
that when supported by substantial evidence, factual findings made by quasi-

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judicial and administrative bodies are accorded great respect and even finality by
the courts.[39] The principle, therefore, dictates that such findings should bind us.[40]

Indeed, we find no reason to deviate from this rule. There appears no valid
ground for this Court to review the factual findings of the CA, the OP, and the
Investigating Committee. These findings are now conclusive on the Court. And quite
significantly, Rayala himself admits to having committed some of the acts imputed
to him.

He insists, however, that these acts do not constitute sexual harassment,

because Domingo did not allege in her complaint that there was a demand, request,
or requirement of a sexual favor as a condition for her continued employment or for
her promotion to a higher position.[41] Rayala urges us to apply to his case our
ruling in Aquino v. Acosta.[42]

We find respondents insistence unconvincing.

Basic in the law of public officers is the three-fold liability rule, which states
that the wrongful acts or omissions of a public officer may give rise to civil, criminal
and administrative liability. An action for each can proceed independently of the
others.[43] This rule applies with full force to sexual harassment.

The law penalizing sexual harassment in our jurisdiction is RA 7877. Section

3 thereof defines work-related sexual harassment in this wise:

Sec. 3. Work, Education or Training-related Sexual Harassment

Defined. Work, education or training-related sexual harassment is
committed by an employer, manager, supervisor, agent of the
employer, teacher, instructor, professor, coach, trainor, or any other
person who, having authority, influence or moral ascendancy over
another in a work or training or education environment, demands,
requests or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for
submission is accepted by the object of said Act.

(a) In a work-related or employment environment, sexual

harassment is committed when:

(1) The sexual favor is made as a condition in the hiring or in

the employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the refusal to grant the
sexual favor results in limiting, segregating or classifying the employee

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 which in a way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee;

(2) The above acts would impair the employees rights or

privileges under existing labor laws; or

(3) The above acts would result in an intimidating, hostile, or

offensive environment for the employee.

This section, in relation to Section 7 on penalties, defines the criminal aspect of the
unlawful act of sexual harassment. The same section, in relation to Section 6,
authorizes the institution of an independent civil action for damages and other
affirmative relief.

Section 4, also in relation to Section 3, governs the procedure for administrative

cases, viz.:

Sec. 4. Duty of the Employer or Head of Office in a Work-

related, Education or Training Environment. It shall be the duty of the
employer or the head of the work-related, educational or training
environment or institution, to prevent or deter the commission of acts
of sexual harassment and to provide the procedures for the resolution,
settlement or prosecution of acts of sexual harassment. Towards this
end, the employer or head of office shall:

(a) Promulgate appropriate rules and

regulations in consultation with and jointly
approved by the employees or students or
trainees, through their duly designated
representatives, prescribing the procedure
for the investigation or sexual harassment
cases and the administrative sanctions
therefor.

Administrative sanctions shall not be a

bar to prosecution in the proper courts for
unlawful acts of sexual harassment.

The said rules and regulations issued

pursuant to this section (a) shall include,
among others, guidelines on proper decorum
in the workplace and educational or training
institutions.

(b) Create a committee on decorum and

investigation of cases on sexual harassment.

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 The committee shall conduct meetings, as
the case may be, with other officers and
employees, teachers, instructors, professors,
coaches, trainors and students or trainees to
increase understanding and prevent
incidents of sexual harassment. It shall also
conduct the investigation of the alleged
cases constituting sexual harassment.

In the case of a work-related environment, the committee shall

be composed of at least one (1) representative each from the
management, the union, if any, the employees from the supervisory
rank, and from the rank and file employees.

In the case of the educational or training institution, the

committee shall be composed of at least one (1) representative from
the administration, the trainors, teachers, instructors, professors or
coaches and students or trainees, as the case maybe.

The employer or head of office, educational or training

institution shall disseminate or post a copy of this Act for the
information of all concerned.

The CA, thus, correctly ruled that Rayalas culpability is not to be determined
solely on the basis of Section 3, RA 7877, because he is charged with the
administrative offense, not the criminal infraction, of sexual harassment.[44] It
should be enough that the CA, along with the Investigating Committee and the
Office of the President, found substantial evidence to support the administrative
charge.

Yet, even if we were to test Rayalas acts strictly by the standards set in
Section 3, RA 7877, he would still be administratively liable. It is true that this
provision calls for a demand, request or requirement of a sexual favor. But it is not
necessary that the demand, request or requirement of a sexual favor be articulated
in a categorical oral or written statement. It may be discerned, with equal certitude,
from the acts of the offender. Holding and squeezing Domingos shoulders, running
his fingers across her neck and tickling her ear, having inappropriate conversations
with her, giving her money allegedly for school expenses with a promise of future
privileges, and making statements with unmistakable sexual overtones all these
acts of Rayala resound with deafening clarity the unspoken request for a sexual
favor.

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 Likewise, contrary to Rayalas claim, it is not essential that the demand,
request or requirement be made as a condition for continued employment or for
promotion to a higher position. It is enough that the respondents acts result in
creating an intimidating, hostile or offensive environment for the employee.[45] That
the acts of Rayala generated an intimidating and hostile environment for Domingo
is clearly shown by the common factual finding of the Investigating Committee, the
OP and the CA that Domingo reported the matter to an officemate and, after the
last incident, filed for a leave of absence and requested transfer to another unit.

Rayalas invocation of Aquino v. Acosta[46] is misplaced, because the factual

setting in that case is different from that in the case at bench. In Aquino, Atty.
Susan Aquino, Chief of the Legal and Technical Staff of the Court of Tax Appeals
(CTA), charged then CTA Presiding Judge (now Presiding Justice) Ernesto Acosta of
sexual harassment. She complained of several incidents when Judge Acosta
allegedly kissed her, embraced her, and put his arm around her shoulder. The case
was referred to CA Justice Josefina G. Salonga for investigation. In her report,
Justice Salonga found that the complainant failed to show by convincing evidence
that the acts of Judge Acosta in greeting her with a kiss on the cheek, in a `beso-
beso fashion, were carried out with lustful and lascivious desires or were motivated
by malice or ill motive. It is clear from the circumstances that most of the kissing
incidents were done on festive and special occasions, and they took place in the
presence of other people and the same was by reason of the exaltation or
happiness of the moment. Thus, Justice Salonga concluded:

In all the incidents complained of, the respondent's pecks on the

cheeks of the complainant should be understood in the context of
having been done on the occasion of some festivities, and not the
assertion of the latter that she was singled out by Judge Acosta in his
kissing escapades. The busses on her cheeks were simply friendly and
innocent, bereft of malice and lewd design. The fact that respondent
judge kisses other people on the cheeks in the 'beso-beso' fashion,
without malice, was corroborated by Atty. Florecita P. Flores, Ms.
Josephine Adalem and Ms. Ma. Fides Balili, who stated that they
usually practice 'beso-beso' or kissing on the cheeks, as a form of
greeting on occasions when they meet each other, like birthdays,
Christmas, New Year's Day and even Valentine's Day, and it does not
matter whether it is Judge Acosta's birthday or their birthdays.
Theresa Cinco Bactat, a lawyer who belongs to complainant's
department, further attested that on occasions like birthdays,

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 respondent judge would likewise greet her with a peck on the cheek in
a 'beso-beso' manner. Interestingly, in one of several festive
occasions, female employees of the CTA pecked respondent judge on
the cheek where Atty. Aquino was one of Judge Acosta's well wishers.

In sum, no sexual harassment had indeed transpired on those

six occasions. Judge Acosta's acts of bussing Atty. Aquino on her
cheek were merely forms of greetings, casual and customary in
nature. No evidence of intent to sexually harass complainant was
apparent, only that the innocent acts of 'beso-beso' were given
malicious connotations by the complainant. In fact, she did not even
relate to anyone what happened to her. Undeniably, there is no
manifest sexual undertone in all those incidents.[47]

This Court agreed with Justice Salonga, and Judge Acosta was exonerated.

To repeat, this factual milieu in Aquino does not obtain in the case at bench. While
in Aquino, the Court interpreted the acts (of Judge Acosta) as casual gestures of
friendship and camaraderie, done during festive or special occasions and with other
people present, in the instant case, Rayalas acts of holding and squeezing
Domingos shoulders, running his fingers across her neck and tickling her ear, and
the inappropriate comments, were all made in the confines of Rayalas office when
no other members of his staff were around. More importantly, and a circumstance
absent in Aquino, Rayalas acts, as already adverted to above, produced a hostile
work environment for Domingo, as shown by her having reported the matter to an
officemate and, after the last incident, filing for a leave of absence and requesting
transfer to another unit.

Rayala also argues that AO 250 does not apply to him. First, he argues that
AO 250 does not cover the NLRC, which, at the time of the incident, was under the
DOLE only for purposes of program and policy coordination. Second, he posits that
even assuming AO 250 is applicable to the NLRC, he is not within its coverage
because he is a presidential appointee.

We find, however, that the question of whether or not AO 250 covers Rayala
is of no real consequence. The events of this case unmistakably show that the
administrative charges against Rayala were for violation of RA 7877; that the OP
properly assumed jurisdiction over the administrative case; that the participation of
the DOLE, through the Committee created by the Secretary, was limited to

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initiating the investigation process, reception of evidence of the parties, preparation
of the investigation report, and recommending the appropriate action to be taken
by the OP. AO 250 had never really been applied to Rayala. If it was used at all, it
was to serve merely as an auxiliary procedural guide to aid the Committee in the
orderly conduct of the investigation.

Next, Rayala alleges that the CA erred in holding that sexual harassment is
an offense malum prohibitum. He argues that intent is an essential element in
sexual harassment, and since the acts imputed to him were done allegedly without
malice, he should be absolved of the charges against him.

We reiterate that what is before us is an administrative case for sexual

harassment. Thus, whether the crime of sexual harassment is malum in
se or malum prohibitum is immaterial.

We also reject Rayalas allegations that the charges were filed because of a
conspiracy to get him out of office and thus constitute merely political harassment.
A conspiracy must be proved by clear and convincing evidence. His bare assertions
cannot stand against the evidence presented by Domingo. As we have already
ruled, the acts imputed to Rayala have been proven as fact. Moreover, he has not
proven any ill motive on the part of Domingo and her witnesses which would be
ample reason for her to conjure stories about him. On the contrary, ill motive is
belied by the fact that Domingo and her witnesses all employees of the NLRC at
that time stood to lose their jobs or suffer unpleasant consequences for coming
forward and charging their boss with sexual harassment.

Furthermore, Rayala decries the alleged violation of his right to due process.
He accuses the Committee on Decorum of railroading his trial for violation of RA
7877. He also scored the OPs decision finding him guilty of disgraceful and immoral
conduct under the Revised Administrative Code and not for violation of RA 7877.
Considering that he was not tried for disgraceful and immoral conduct, he argues
that the verdict is a sham and total nullity.

We hold that Rayala was properly accorded due process. In previous cases,
this Court held that:

[i]n administrative proceedings, due process has been

recognized to include the following: (1) the right to actual or
constructive notice of the institution of proceedings which may affect a

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 respondents legal rights; (2) a real opportunity to be heard personally
or with the assistance of counsel, to present witnesses and evidence in
ones favor, and to defend ones rights; (3) a tribunal vested with
competent jurisdiction and so constituted as to afford a person
charged administratively a reasonable guarantee of honesty as well as
impartiality; and (4) a finding by said tribunal which is supported by
substantial evidence submitted for consideration during the hearing or
contained in the records or made known to the parties affected.[48]

The records of the case indicate that Rayala was afforded all these procedural
due process safeguards. Although in the beginning he questioned the authority of
the Committee to try him,[49] he appeared, personally and with counsel, and
participated in the proceedings.

On the other point raised, this Court has held that, even in criminal cases,
the designation of the offense is not controlling, thus:

What is controlling is not the title of the complaint, nor the

designation of the offense charged or the particular law or part thereof
allegedly violated, these being mere conclusions of law made by the
prosecutor, but the description of the crime charged and the particular
facts therein recited. The acts or omissions complained of must be
alleged in such form as is sufficient to enable a person of common
understanding to know what offense is intended to be charged, and
enable the court to pronounce proper judgment. No information for a
crime will be sufficient if it does not accurately and clearly allege the
elements of the crime charged. Every element of the offense must be
stated in the information. What facts and circumstances are necessary
to be included therein must be determined by reference to the
definitions and essentials of the specified crimes. The requirement of
alleging the elements of a crime in the information is to inform the
accused of the nature of the accusation against him so as to enable
him to suitably prepare his defense.[50]

It is noteworthy that under AO 250, sexual harassment amounts to

disgraceful and immoral conduct.[51] Thus, any finding of liability for sexual
harassment may also be the basis of culpability for disgraceful and immoral
conduct.

With the foregoing disquisitions affirming the finding that Rayala committed
sexual harassment, we now determine the proper penalty to be imposed.

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 Rayala attacks the penalty imposed by the OP. He alleges that under the
pertinent Civil Service Rules, disgraceful and immoral conduct is punishable by
suspension for a period of six (6) months and one (1) day to one (1) year. He also
argues that since he is charged administratively, aggravating or mitigating
circumstances cannot be appreciated for purposes of imposing the penalty.

Under AO 250, the penalty for the first offense is suspension for six (6)
months and one (1) day to one (1) year, while the penalty for the second offense is
dismissal.[52] On the other hand, Section 22(o), Rule XVI of the Omnibus Rules
Implementing Book V of the Administrative Code of 1987[53] and Section 52 A(15)
of the Revised Uniform Rules on Administrative Cases in the Civil Service[54] both
provide that the first offense of disgraceful and immoral conduct is punishable by
suspension of six (6) months and one (1) day to one (1) year. A second offense is
punishable by dismissal.

Under the Labor Code, the Chairman of the NLRC shall hold office during
good behavior until he or she reaches the age of sixty-five, unless sooner
removed for cause as provided by law or becomes incapacitated to discharge
the duties of the office.[55]

In this case, it is the President of the Philippines, as the proper disciplining

authority, who would determine whether there is a valid cause for the removal of
Rayala as NLRC Chairman. This power, however, is qualified by the phrase for
cause as provided by law. Thus, when the President found that Rayala was indeed
guilty of disgraceful and immoral conduct, the Chief Executive did not have
unfettered discretion to impose a penalty other than the penalty provided by law for
such offense. As cited above, the imposable penalty for the first offense of either
the administrative offense of sexual harassment or for disgraceful and immoral
conduct is suspension of six (6) months and one (1) day to one (1) year.
Accordingly, it was error for the Office of the President to impose upon Rayala the
penalty of dismissal from the service, a penalty which can only be imposed upon
commission of a second offense.

Even if the OP properly considered the fact that Rayala took advantage of his
high government position, it still could not validly dismiss him from the service.
Under the Revised Uniform Rules on Administrative Cases in the Civil
Service, [56]
taking undue advantage of a subordinate may be considered as an

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aggravating circumstance[57] and where only aggravating and no mitigating
circumstances are present, the maximum penalty shall be imposed.[58] Hence, the
maximum penalty that can be imposed on Rayala is suspension for one (1) year.

Rayala holds the exalted position of NLRC Chairman, with the rank equivalent
to a CA Justice. Thus, it is not unavailing that rigid standards of conduct may be
demanded of him. In Talens-Dabon v. Judge Arceo,[59] this Court, in upholding the
liability of therein respondent Judge, said:

The actuations of respondent are aggravated by the fact that

complainant is one of his subordinates over whom he exercises control
and supervision, he being the executive judge. He took advantage of
his position and power in order to carry out his lustful and lascivious
desires. Instead of he being in loco parentis over his subordinate
employees, respondent was the one who preyed on them, taking
advantage of his superior position.

In yet another case, this Court declared:

As a managerial employee, petitioner is bound by more exacting
work ethics. He failed to live up to his higher standard of responsibility
when he succumbed to his moral perversity. And when such moral
perversity is perpetrated against his subordinate, he provides a
justifiable ground for his dismissal for lack of trust and confidence. It is
the right, nay, the duty of every employer to protect its employees
from oversexed superiors.[60]
It is incumbent upon the head of office to set an example on how his
employees should conduct themselves in public office, so that they may work
efficiently in a healthy working atmosphere. Courtesy demands that he should set a
good example.[61]
Rayala has thrown every argument in the book in a vain effort to effect his
exoneration. He even puts Domingos character in question and casts doubt on the
morality of the former President who ordered, albeit erroneously, his dismissal from
the service. Unfortunately for him, these are not significant factors in the
disposition of the case. It is his character that is in question here and sadly, the
inquiry showed that he has been found wanting.
WHEREFORE, the foregoing premises considered, the October 18, 2002
Resolution of the Court of Appeals in CA-G.R. SP No. 61026
is AFFIRMED. Consequently, the petitions in G.R. Nos. 155831, 155840, and
158700 are DENIED. No pronouncement as to costs.

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