Read the following as well as the topics stated in your syllabus

Overtime work

1) Realda vs. New Age Graphics, Inc. G.R. No. 192190, April 25, 2012*

Claim for Overtime pay; Proof required

2) ABDULJUAHID R. PIGCAULAN vs SECURITY and CREDIT INVESTIGATION, INC. and/or RENE AMBY
REYES, G.R. No. 173648, January 16, 2012

3) G.R. Nos. L-51612-13 July 22, 1986, GLOBAL INCORPORATED, petitioner, vs. HON.
COMMISSIONERS DIEGO D. ATIENZA, GERONIMO Q. QUADRA and CLETO T. VILLATUYA, and CLARITA
ROSAL,

Wages

Wages vs. Facilities

4) Atok-Big Wedge Mutual Benefit Assn. vs. Atok-Big Wedge Mining Co., Inc. 97 SCRA 294, G.R. No. L-7349,
July 19, 1955*

Art. 100
[G.R. No. 149434. June 3, 2004]

5) PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner, vs. THE COURT OF APPEALS, THE
HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and UNITED PHILACOR WORKERS
UNION-NAFLU, respondents.

6) EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. vs G.R. No. 185665, February 8, 2012

7) WESLEYAN UNIVERSITY PHILIPPINES, vs WESLEYAN UNIVERSITY- PHILIPPINES FACULTY and

STAFF ASSOCIATION, G.R. No. 181806, March 12, 2014

8) WILLIAM ENDELISEO BARROGA vs DATA CENTER COLLEGE OF THE PHILIPPINES, G.R. No.
174158, June 27, 2011
 G.R. No. 192190 April 25, 2012
BILLY M. REALDA, Petitioner, vs. NEW AGE GRAPHICS, INC. and JULIAN I. MIRASOL, JR. Respondents.

RESOLUTION
REYES, J.:
The petitioner, who was the former machine operator of respondent New Age Graphics Inc. (Graphics, Inc.), files this
petition for review under Rule 45 of the Rules of Court of the Decision1 dated June 9, 2009 and Resolution2 dated April
14, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 106928. By way of its June 9, 2009 Decision, the CA
reversed and set aside the March 31, 2008 Decision3 and October 28, 2008 Resolution4 of the National Labor Relations
Commission (NLRC) in NLRC LAC No. 10-002759-07 affirming the August 15, 2007 Decision5 of Labor Arbiter
Danna M. Castillon (LA Castillon), which found the petitioner to be illegally dismissed.
The CA exonerated the petitioner from the charges of destroying Graphics, Inc.s property and disloyalty to Graphics,
Inc. and its objectives. However, the CA ruled that the petitioners unjustified refusal to render overtime work,
unexplained failure to observe prescribed work standards, habitual tardiness and chronic absenteeism despite warning
and non-compliance with the directive for him to explain his numerous unauthorized absences constitute sufficient
grounds for his termination. Specifically:
On the ground of repeated violations of companys rules and regulations, namely: insubordination, deliberate
slowdown of work, habitual tardiness, absence without official leave and inefficiency; We find that public respondent
commission, in affirming labor arbiter Castillon, rushed into conclusion that petitioner has failed to convince the
commission a quo on what company rules and regulations private respondent had committed. x x x
The foregoing, notwithstanding, we find that private respondent should be dismissed on the ground of willful disobedience of the
warning and memoranda issued by petitioner. To be validly dismissed on the ground of willful disobedience requires the
concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness
being characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known
to the employee and must pertain to the duties which he had been engaged to discharge.
Private respondents continued refusal to acknowledge receipt and to present his defense against the notice of
suspension and of dismissal, render him guilty of insubordination or willful disobedience of the reasonable and lawful
order of petitioner. These orders were made with [regard] to his duties to the company as a punctual employee and as
the sole and exclusive operator of the printing machine provided to him by petitioner. Therefore, the obligation to
answer rests upon him who is alleged to have committed infractions against his employer, otherwise he is deemed to
have waived his right to be heard and would be made to suffer the consequences of such refusal.
Private respondent is also accused of insubordination for the reason that he stubbornly refused to follow the orders of
his General Manager to show the latter and check on the computer using the CMYK guide, whether the colors he is
running in his printing machine are correct. After initially following the said order, and confirming that the first color,
cyan, running in the machine was correct, he failed to observe the same procedure on the second color magenta and did
not even bother to remedy it after it was pointed out by the Computer Graphic Artist supervising him. Since this was
not the first time he was reprimanded for carelessly rushing the work assigned to him, disregarding certain procedures
to ensure the quality of the same and thereby resulting in mediocre products which earn the ire of the companys
clientele, his stubborn refusal to change shows a clear act of insubordination against private respondent.
xxx

Private respondent has pending work on La Salleo Magazine on May 25-26, 2004, but refused to do overtime in order
to finish the same. Aside from this, he has two other works required for him to finish, mainly: PCU-Manila Brochure
and Hijas de Maria souvenir program. In procuring absences during the times when workload was heavy, the printing
deadlines for the months of April and May were not met and petitioner incurred losses from overtime pay for the other
employees who were forced to take on the work left by private respondent and from penalties imposed by clients for
every day of delay after the deadlines set for the delivery of the printed materials.
xxx

Furthermore, private respondents refusal to render overtime work when required upon him, contributed to losses
incurred by the petitioner. Public respondent commission has erred in ruling that rendition of the same is not
mandatory. Art. 89 of the Labor Code empowers the employer to legally compel his employees to perform overtime
work against their will to prevent serious loss or damage, to wit:
xxxx

In the present case, petitioners business is a printing press whose production schedule is sometimes flexible and varying. It
is only reasonable that workers are sometimes asked to render overtime work in order to meet production deadlines.
On or before May 26, 2004, private respondent was asked to render overtime work but he refused to do so despite the "rush"
orders of customers and petitioners need to meet its deadlines set by the former. In fact, he reneged on his promise to do the
same, after being issued an Overtime Slip Form by Mylene Altovar, and instead went out with another individual, as attested
by his wife after calling the company to inform it of such absence. He knew that he was going to be unavailable for work on
the following day, but instead of trying to finish his work before that date by rendering overtime, due to the "rush" in
meeting the deadlines, he opted to forego with the same, and thereby rejecting the order of petitioner.
xxx

Petitioner further alleges habitual tardiness on the part of private respondent for which he received a warning notice in
April and May 2004. For the month of January and February 2004 alone, he reported late for work 23 times and on
May 2004, just prior to his suspension, he was yet again late for 6 times. The Daily Time Records of private respondent
contained the entries which [were] personally written by him. x x x
Finally, on petitioners allegation on private respondents absences without official leave, We hold that the latters
actions were indeed unjustified. Despite the warning issued to private respondent by petitioner on his AWOLs during
the month of April and May, and instead of reporting to the company to deny or to refute the basis for recommendation
of dismissal, he absented himself from Jun. 15 to Jul. 15, 2004, which prompted to (sic) the termination of his
employment. The ruling of the labor arbiter that since the final recommendation of petitioner was "dismissal for cause",
private respondent cannot be faulted for his failure to report for work on Jun. 15 does not hold water. What was given
to private respondent on Jun. 15, 2004 was indeed in the form of a notice of dismissal. However, it was only
recommended that he be dismissed from his employment and is still given the opportunity to present his defense to
deny or refute the said recommendation of company.6 x x x (Citations omitted)
Nonetheless, while the CA recognized the existence of just causes for petitioners dismissal, it found the petitioner
entitled to nominal damages in the amount of P5,000.00 due to Graphics, Inc.s failure to observe the procedural
requirements of due process.
Private respondent was not accorded due process when petitioner issued and served to the former the written notice of
dismissal dated Jun. 15, 2004. A careful perusal of the records will show that the notice issued by the employer gives
the employee only twenty-four (24) hours to answer and put up his defenses against the accusations laid upon him by
the company, in contravention with the rule of a "reasonable" period as construed in King of Kings Transport v.
Mamac. Moreover, the scheduled hearing in front of Leticia D. Lago was on the same date at 1:00 p.m., which left
private respondent with no recourse to secure the services of a counsel, much less prepare a good rebuttal against the
alleged evidences for the valid dismissal of the former.
xxxx
x x x Considering that petitioner has made efforts in the past to afford private respondent the opportunity to be able to
defend himself, but the latter, instead of availing such remedy, rejected the same; We have taken this into
consideration, and impose [P]5,000.00 as the penalty for the employers failure to comply with the due process
requirement.7 (Citations omitted)
This Court finds no cogent reason to reverse the assailed issuances of the CA.
First, the petitioners arbitrary defiance to Graphics, Inc.s order for him to render overtime work constitutes willful
disobedience. Taking this in conjunction with his inclination to absent himself and to report late for work despite being
previously penalized, the CA correctly ruled that the petitioner is indeed utterly defiant of the lawful orders and the
reasonable work standards prescribed by his employer.
This particular issue is far from being novel as this Court had the opportunity in R.B. Michael Press v. Galit 8 to
categorically state that an employer has the right to require the performance of overtime service in any of the situations
contemplated under Article 89 of the Labor Code and an employees non-compliance is willful disobedience. Thus:
For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employees assailed
conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated
must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been
engaged to discharge.
In the present case, there is no question that petitioners order for respondent to render overtime service to meet a
production deadline complies with the second requisite. Art. 89 of the Labor Code empowers the employer to legally
compel his employees to perform overtime work against their will to prevent serious loss or damage:
Art. 89. EMERGENCY OVERTIME WORK
Any employee may be required by the employer to perform overtime work in any of the following cases:
xxxx

(c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss
or damage to the employer or some other cause of similar nature;
xxx

In the present case, petitioners business is a printing press whose production schedule is sometimes flexible and
varying. It is only reasonable that workers are sometimes asked to render overtime work in order to meet production
deadlines.
xxx

The issue now is, whether respondents refusal or failure to render overtime work was willful; that is, whether such
refusal or failure was characterized by a wrongful and perverse attitude. In Lakpue Drug Inc. v. Belga, willfulness was
described as "characterized by a wrongful and perverse mental attitude rendering the employees act inconsistent with
proper subordination." The fact that respondent refused to provide overtime work despite his knowledge that there is a
production deadline that needs to be met, and that without him, the offset machine operator, no further printing can be
had, shows his wrongful and perverse mental attitude; thus, there is willfulness.
Respondents excuse that he was not feeling well that day is unbelievable and obviously an afterthought. He failed to
present any evidence other than his own assertion that he was sick. Also, if it was true that he was then not feeling well,
he would have taken the day off, or had gone home earlier, on the contrary, he stayed and continued to work all day,
and even tried to go to work the next day, thus belying his excuse, which is, at most, a self-serving statement.
After a re-examination of the facts, we rule that respondent unjustifiably refused to render overtime work despite a
valid order to do so. The totality of his offenses against petitioner R.B. Michael Press shows that he was a difficult
employee. His refusal to render overtime work was the final straw that broke the camels back, and, with his gross and
habitual tardiness and absences, would merit dismissal from service.9 (Citations omitted)
Noticeably, this case and R.B. Michael Press share a parallelism. Similar to the dismissed employee in the above-
quoted case, the petitioner exhibited willful disobedience to a reasonable order from his employer and this Court does
not find any reason why petitioner should be accorded a different treatment.
Second, the petitioners failure to observe Graphics, Inc.s work standards constitutes inefficiency that is a valid cause
for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work
goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing
unsatisfactory results. As the operator of Graphics, Inc.s printer, he is mandated to check whether the colors that
would be printed are in accordance with the clients specifications and for him to do so, he must consult the General
Manager and the color guide used by Graphics, Inc. before making a full run. Unfortunately, he failed to observe this
simple procedure and proceeded to print without making sure that the colors were at par with the clients demands.
This resulted to delays in the delivery of output, client dissatisfaction, and additional costs on Graphics, Inc.s part.

Security of tenure is indeed constitutionally guaranteed. However, this should not be indiscriminately invoked to
deprive an employer of its management prerogatives and right to shield itself from incompetence, inefficiency and
disobedience displayed by its employees. The procedure laid down by Graphics, Inc. which the petitioner was bound to
observe does not appear to be unreasonable or unnecessarily difficult. On the contrary, it is necessary and relevant to
the achievement of Graphics, Inc.s objectives. The petitioners non-compliance is therefore hard to comprehend.

While a penalty in the form of suspension had already been imposed on the petitioner for his habitual tardiness and
repeated absenteeism, the principle of "totality of infractions" sanctions the act of Graphics, Inc. of considering such
previous infractions in decreeing dismissal as the proper penalty for his tardiness and unauthorized absences incurred
afterwards, in addition to his refusal to render overtime work and conform to the prescribed work standards. In Merin
v. National Labor Relations Commission,10 this Court expounded on the principle of totality of infractions as follows:
The totality of infractions or the number of violations committed during the period of employment shall be considered
in determining the penalty to be imposed upon an erring employee. The offenses committed by petitioner should not be
taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles of
aspects of character, conduct and ability separate and independent of each other. While it may be true that petitioner
was penalized for his previous infractions, this does not and should not mean that his employment record would be
wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the
penalty that should be meted out since an employee's past misconduct and present behavior must be taken together in
determining the proper imposable penalty[.] Despite the sanctions imposed upon petitioner, he continued to commit
misconduct and exhibit undesirable behavior on board. Indeed, the employer cannot be compelled to retain a
misbehaving employee, or one who is guilty of acts inimical to its interests.11 (Citations omitted)

This Court cannot condone the petitioners attempt to belittle his habitual tardiness and absenteeism as these are
manifestation of lack of initiative, diligence and discipline that are adverse to Graphics, Inc.s interest. In Challenge
Socks Corporation v. Court of Appeals,12 this Court said that it reflects an indifferent attitude to and lack of motivation
in work. It is inimical to the general productivity and business of the employer. This is especially true when it occurred
frequently and repeatedly within an extensive period of time and despite several warnings.

This Court cannot likewise agree to the petitioners attempt to brush aside his refusal to render overtime work as
inconsequential when Graphics, Inc.s order for him to do so is justified by Graphics, Inc.s contractual commitments
to its clients. Such an order is legal under Article 89 of the Labor Code and the petitioners unexplained refusal to obey
is insubordination that merits dismissal from service.

The petitioner harped on the improper motivations of Graphics, Inc. in ordering his dismissal, primary of which was
the complaint he filed before the Department of Labor and Employment that eventually led to the finding of violations
of laws on labor standards and tax regulations. However, the petitioner fails to convince that he is not the incorrigible
employee portrayed by the evidence presented by the respondents. The petitioner does not deny that he had been
habitually tardy and absent and continued being so even after he had been warned and thereafter suspended. Neither
does he deny that he refused to render overtime work and that Graphics, Inc. had a legally acceptable reason for
requiring him to do so. The petitioner can only argue that his refusal is not tantamount to willful disobedience, which
of course, is disagreeable. In fact, the petitioners refusal despite knowledge that his regular presence at work and
extended hours thereat on some occasions were necessary for Graphics, Inc. to meet its obligations to its clients does
not only suggest willfulness on his part but even bad faith. On the other hand, the petitioner only proffers a general
denial of the claim that Graphics, Inc. earned the ire of its clients due to the defective output resulting from the
petitioners failure to comply with the prescribed work standards.

Even assuming as true the petitioners claim that such complaint gave rise to ill-feelings on Graphics, Inc.s part, he
cannot reasonably and validly suggest that the respondents have stripped themselves of the right to dismiss him for his
deliberate disobedience and lack of discipline in regularly and punctually reporting for work.

Undoubtedly, Graphics, Inc. complied with the substantive requirements of due process in effecting employee
dismissal. However, the same cannot be said insofar as the procedural requirements are concerned. In King of Kings
Transport, Inc. v. Mamac,13 this Court laid down the manner by which the procedural due requirements of due process
can be satisfied:
To clarify, the following should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination
against them, and a directive that the employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity
to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as
basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice
should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282
is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management.
During the hearing or conference, the employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of their employment.14

As correctly observed by the CA, Graphics, Inc. failed to afford the petitioner with a reasonable opportunity to be
heard and defend itself. An administrative hearing set on the same day that the petitioner received the memorandum
and the twenty-four (24) hour period for him to submit a written explanation are far from being reasonable.

Furthermore, there is no indication that Graphics, Inc. issued a second notice, informing the petitioner of his dismissal.
The respondents admit that Graphics, Inc. decided to terminate the petitioners employment after he ceased reporting
for work from the time he received the memorandum requiring him to explain and subsequent to his failure to submit a
written explanation. However, there is nothing on record showing that Graphics, Inc. placed its decision to dismiss in
writing and that a copy thereof was sent to the petitioner.

Notably, the respondents do not question the findings of the CA. The respondents chose not to convince this Court
otherwise by not filing an appeal, which reasonably suggests that Graphics, Inc.s failure to comply with the procedural
requirements of due process is admitted.

Nonetheless, while the CA finding that the petitioner is entitled to nominal damages as his right to procedural due
process was not respected despite the presence of just causes for his dismissal is affirmed, this Court finds the CA to
have erred in fixing the amount that the Company is liable to pay. The CA should have taken cognizance of the
numerous cases decided by this Court where the amount of nominal damages was fixed at P30,000.00 if the dismissal
was for a just cause. One of such cases is Agabon v. National Labor Relations Commission, 15 on which the CA relied
in the Assailed Decision and was reiterated in Genuino v. National Relations Commission16 as follows:
In view of Citibank's failure to observe due process, however, nominal damages are in order but the amount is hereby
raised to PhP 30,000 pursuant to Agabon v. NLRC. The NLRC's order for payroll reinstatement is set aside.
In Agabon, we explained:
The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of
indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the
court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at bar, we
deem it proper to fix it at [P]30,000.00. We believe this form of damages would serve to deter employers from future
violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of
this fundamental right granted to the latter under the Labor Code and its Implementing Rules.

Thus, the award of PhP 5,000 to Genuino as indemnity for non-observance of due process under the CA's March 31,
2000 Resolution in CA-G.R. SP No. 51532 is increased to PhP 30,000.17

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP
No. 106928 is AFFIRMED with MODIFICATION in that respondent New Age Graphics, Inc. is hereby ordered to pay
petitioner Billy M. Realda nominal damages in the amount of Thirty Thousand Pesos (P30,000.00).

SO ORDERED.
 Realda vs. New Age Graphics, Inc. G.R. No. 192190, April 25, 2012*

Facts: The petitioner in this case was the former machine operator of respondent New Age Graphics Inc.
The CA exonerated the petitioner from the charges of destroying Graphics, Inc.s property and disloyalty to Graphics,
Inc. and its objectives. However, the CA ruled that the petitioners unjustified refusal to render overtime work,
unexplained failure to observe prescribed work standards, habitual tardiness and chronic absenteeism despite warning
and non- compliance with the directive for him to explain his numerous unauthorized absences constitute sufficient
grounds for his termination. Nonetheless, while the CA recognized the existence of just causes for petitioners
dismissal, it found the petitioner entitled to nominal damages in the amount of P5,000.00 due to Graphics, Inc.s
failure to observe the procedural requirements of due process.

Issue: Whether or not there was an illegal dismissal.

Held:
This Court finds no cogent reason to reverse the assailed issuances of the CA.
1. First, the petitioners arbitrary defiance to Graphics, Inc.s order for him to render overtime work constitutes willful
disobedience

2. Second, the petitioners failure to observe Graphics, Inc.s work standards constitutes inefficiency that is a valid
cause for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work
goals or work quotas, either by failing to complete the same within the alloted reasonable period, or by producing
unsatisfactory results. As the operator of Graphics, Inc.s printer, he is mandated to check whether the colors that
would be printed are in accordance with the clients specifications and for him to do so, he must consult the General
Manager and the color guide used by Graphics, Inc. before making a full run. Unfortunately, he failed to observe this
simple procedure and proceeded to print without making sure that the colors were at par with the clients demands.
This resulted to delays in the delivery of output, client dissatisfaction, and additional costs on Graphics, Inc.s part.

3. While a penalty in the form of suspension had already been imposed on the petitioner for his habitual tardiness and
repeated absenteeism, the principle of totality of infractions sanctions the act of Graphics, Inc. of considering such
previous infractions in decreeing dismissal as the proper penalty for his tardiness and unauthorized absences incurred
afterwards, in addition to his refusal to render overtime work and conform to the prescribed work standards.

4. To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination
against them, and a directive that the employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that
management must accord to the employees to enable them to prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity
to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as
basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice
should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282
is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management.
During the hearing or conference, the employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of their employment.

4. Nonetheless, while the CA finding that the petitioner is entitled to nominal damages as his right to procedural due
process was not respected despite the presence of just causes for his dismissal is affirmed, this Court finds the CA to
have erred in fixing the amount that the Company is liable to pay. The CA should have taken cognizance of the
numerous cases decided by this Court where the amount of nominal damages was fixed at P30,000.00 if the dismissal
was for a just cause. Thus, the award of PhP 5,000 to Genuino as indemnity for non-observance of due process under
the CA's March 31, 2000 Resolution in CA-G.R. SP No. 51532 is increased to PhP 30,000.
 ABDULJUAHID R. PIGCAULAN VS SECURITY AND CREDIT INVESTIGATION, INC. AND/OR RENE
AMBY REYES G.R. No. 173648

Facts:
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs
different clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints for
underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and
13th month pays. Respondents, however, maintained that Canoy and Pigcaulan were paid their just
salaries and other benefits under the law; that the salaries they received were above the statutory minimum wage and
the rates provided by the Philippine Association of Detective and Protective Agency Operators (PADPAO) for security
guards; that their holiday pay were already included in the computation of their monthly salaries; that they were paid
additional premium of 30% in addition to their basic salary whenever they were required to work on Sundays and
200% of their salary for work done on holidays; and, that Canoy and Pigcaulan were paid the
corresponding 13th month pay for the years 1998 and 1999. Labor arbiter favored to the Petitioner and NLRC
affirmed the decision of the labor arbiter. Respondent appeal to the Court of Appeals set aside the ruling of the NLRC
and Labor Arbiter. Hence, the present Petition for Review on Certiorari.

Issues
I. The Honorable Court of Appeals erred when it dismissed the complaint on mere alleged failure of the
Labor Arbiter and the NLRC to observe the prescribed form of decision, instead of remanding the case for reformation
of the decision to include the desired detailed computation.

II. The Honorable Court of Appeals erred when it [made] complainants suffer the consequences of the alleged non-
observance by the Labor Arbiter and NLRC of the prescribed forms of decisions considering that they have
complied with all needful acts required to support their claims.

III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence
of legal and factual [bases] despite attendance of substantial evidence in the records.

Ruling
The Verification and Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it
was plainly and particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda,
that he is the Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that
the petition was brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy,
same has already become final and executory as to him. Canoy failed to show any reasonable cause for his failure to
join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to be prudent in
pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress.

The Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are self-
serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay.
Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated
therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time
records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as
basis to prove that the two were underpaid of their salaries. We find nothing contention that he had rendered service
beyond eight hours to entitle him to overtime pay and during Sundays to entitle him to restday pay. Hence, in the
absence of any in the records which could substantially support Pigcaulans concrete proof that additional service
beyond the normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to
Pigcaulan. Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year
2000. Article 94 of the Labor Code provides that Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments regularly employing less than ten (10) workers.
While Article 95 of the Labor Code provides Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive of five days with pay. Hence for he rendered service for more than a year already.
Furthermore, under Presidential Decree No. 851,[31] he should be paid his 13th month pay. As employer, SCII has the
burden of proving that it has paid these benefits to its employees. The CA is not correct in dismissing Pigcaulans
claims in its entirety.

Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within
three years from the time the cause of action accrued, [34] Pigcaulan can only demand the amounts due
him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the
records are insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the
Labor Arbiter for a detailed computation of the monetary benefits due to him.
ABDULJUAHID R. PIGCAULAN vs SECURITY and CREDIT INVESTIGATION, INC. and/or RENE AMBY
REYES, G.R. No. 173648, January 16, 2012
It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on the employer
that the burden of proving payment of these claims rests.
This Petition for Review on Certiorari assails the February 24, 2006 Decision of the Court of Appeals (CA)
in CA-G.R. SP No. 85515, which granted the petition for certiorari filed therewith, set aside the March 23, 2004 and
June 14, 2004[ Resolutions of the National Labor Relations Commission (NLRC), and dismissed the complaint filed by
Oliver R. Canoy (Canoy) and petitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit
Investigation, Inc. (SCII) and its General Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28,
2006 Resolution denying Canoys and Pigcaulans Motion for Reconsideration.
Factual Antecedents
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different clients.
Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints [if !supportFootnotes][7][endif] for
underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th month pays.
These complaints were later on consolidated as they involved the same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the number of
hours served and their wages for the same. They likewise presented itemized lists of their claims for the corresponding
periods served.
Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and other benefits
under the law; that the salaries they received were above the statutory minimum wage and the rates provided by the
Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holiday
pay were already included in the computation of their monthly salaries; that they were paid additional premium of 30%
in addition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work
done on holidays; and, that Canoy and Pigcaulan were paid the corresponding 13th month pay for the years 1998 and
1999. In support thereof, copies of payroll listings[if !supportFootnotes][8][endif] and lists of employees who received their 13th
month pay for the periods December 1997 to November 1998 and December 1998 to November 1999[if
!supportFootnotes][9][endif]
were presented. In addition, respondents contended that Canoys and Pigcaulans monetary claims
should only be limited to the past three years of employment pursuant to the rule on prescription of claims.
Ruling of the Labor Arbiter
Giving credence to the itemized computations and representative daily time records submitted by Canoy and Pigcaulan,
Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision [if !supportFootnotes][10][endif] dated
June 6, 2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove that Canoy
and Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13 th month payroll was,
however, acknowledged as sufficient proof of payment, for it bears Canoys and Pigcaulans signatures. Thus, without
indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtime pay,
holiday pay, service incentive leave pay and proportionate 13th month pay for the year 2000 in favor of Canoy and
Pigcaulan, viz:
WHEREFORE, the respondents are hereby ordered to pay the complainants: 1) their salary differentials in the amount
of P166,849.60 for Oliver Canoy and P121,765.44 for Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and
P2,449.71 for Pigcaulan for service incentive leave pay and; [3]) the sum of P1,481.85 for Canoy and P1,065.35 for
Pigcaulan as proportionate 13th month pay for the year 2000. The rest of the claims are dismissed for lack of sufficient
basis to make an award.
SO ORDERED.
Ruling of the National Labor Relations Commission
Respondents appealed to the NLRC. They alleged that there was no basis
for the awards made because aside from the self-serving itemized computations, no representative daily time record
was presented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted
should have been given more probative value. To strengthen their cause, they attached to their Memorandum on
Appeal payrolls[if !supportFootnotes][12][endif] bearing the individual signatures of Canoy and Pigcaulan to show that the latter
have received their salaries, as well as copies of transmittal letters[if !supportFootnotes][13][endif] to the bank to show that the
salaries reflected in the payrolls were directly deposited to the ATM accounts of SCIIs employees.
The NLRC, however, in a Resolution dated March 23, 2004, dismissed the appeal and held that the
evidence show underpayment of salaries as well as non-payment of service incentive leave benefit. Accordingly, the
Labor Arbiters Decision was sustained. The motion for reconsideration thereto was likewise dismissed by the NLRC in
a Resolution dated June 14, 2004.
Ruling of the Court of Appeals
In respondents petition for certiorari with prayer for the issuance of a temporary restraining order and preliminary
injunction[if !supportFootnotes][16][endif] before the CA, they attributed grave abuse of discretion on the part of the NLRC in
finding that Canoy and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13 th
month pay and in arriving at amounts without providing sufficient bases therefor.
The CA, in its Decision[if !supportFootnotes][17][endif] dated February 24, 2006, set aside the rulings of
both the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the
questioned rulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and
Pigcaulan on the following rationale:
First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at all events, as far as
practicable, the decision shall embody the detailed and full amount awarded.
Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for being unsigned by Canoy,
when, in fact, said payrolls, particularly the payrolls from 1998 to 1999 indicate the individual signatures of Canoy.
Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by Pigcaulan and Canoy as
well as the laws or jurisprudence that would show that the two are indeed entitled to the salary differential and
incentive leave pays.
Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed salaries and benefits
despite the absence of proof that Reyes deliberately or maliciously designed to evade SCIIs alleged financial
obligation; hence the Labor Arbiter ignored that SCII has a corporate personality separate and distinct from Reyes. To
justify solidary liability, there must be an allegation and showing that the officers of the corporation deliberately or
maliciously designed to evade the financial obligation of the corporation.[if !supportFootnotes][18][endif]
Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution dated June
28, 2006.
Hence, the present Petition for Review on Certiorari.
Issues
The petition ascribes upon the CA the following errors:
I. The Honorable Court of Appeals erred when it dismissed the complaint on mere alleged failure of the Labor Arbiter
and the NLRC to observe the prescribed form of decision, instead of remanding the case for reformation of the decision
to include the desired detailed computation.
II. The Honorable Court of Appeals erred when it [made] complainants suffer the consequences of the alleged non-
observance by the Labor Arbiter and NLRC of the prescribed forms of decisions considering that they have complied
with all needful acts required to support their claims.
III. The Honorable Court of Appeals erred when it dismissed the complaint allegedly due to absence of legal and
factual [bases] despite attendance of substantial evidence in the records.
It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan as petitioners, it
appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification of Non-Forum
Shopping was executed by Pigcaulan alone.
In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by the rules.
And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived at should be
embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and the specific
figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the form of
the handwritten detailed computations which the Labor Arbiter termed as representative daily time records, showing
that they were not properly compensated for work rendered. Thus, the CA should have remanded the case instead of
outrightly dismissing it.
In their Comment,[if !supportFootnotes][21][endif] respondents point out that since it was only Pigcaulan who filed the
petition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondents
submit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits of
evidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces
of evidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy and
Pigcaulan to discharge their burden to disprove payment.
Pigcaulan, this time joined by Canoy, asserts in his Reply that his filing of the present petition redounds
likewise to Canoys benefit since their complaints were consolidated below. As such, they maintain that any kind of
disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution of the
petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply they
appended Canoys affidavit[ where he verified under oath the contents and allegations of the petition filed by Pigcaulan
and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not filed any action or
claim in another court or tribunal involving the same issues. He likewise explains in said affidavit that his absence
during the preparation and filing of the petition was caused by severe financial distress and his failure to inform anyone
of his whereabouts.
Our Ruling
The assailed CA Decision is considered final as to Canoy.
We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is very clear
from the petitions prefatory which is phrased as follows:
COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto this Honorable Court x x x.
Also, under the heading Parties, only Pigcaulan is mentioned as petitioner and consistent with this, the body of the
petition refers only to a petitioner and never in its plural form petitioners. Aside from the fact that the Verification and
Certification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly and
particularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is the
Counsel for Petitioner Adbuljuahid Pigcaulan only. In view of these, there is therefore, no doubt, that the petition was
brought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has already
become final and executory as to him.
Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as he
is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filed
in behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as non-
compliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatally
defective.[if !supportFootnotes][24][endif] The court may order its submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may
be served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to
swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct.[if !supportFootnotes][25][endif] However, even if it were so, we note
that Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping.
The filing of a certificate of non-forum shopping is mandatory so much so
that non-compliance could only be tolerated by special circumstances and compelling reasons. [if !supportFootnotes][26][endif]
This Court has held that when there are several petitioners, all of them must execute and sign the certification against
forum shopping; otherwise, those who did not sign will be dropped as parties to the case. [if !supportFootnotes][27][endif] True, we
held that in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes
substantial compliance with the rule on the filing of a certificate of non-forum shopping on the ground of common
interest or common cause of action or defense.[if !supportFootnotes][28][endif] We, however, find that common interest is not
present in the instant petition. To recall, Canoys and Pigcaulans complaints were consolidated because they both
sought the same reliefs against the same respondents. This does not, however, mean that they share a common interest
or defense. The evidence required to substantiate their claims may not be the same. A particular evidence which could
sustain Canoys action may not effectively serve as sufficient to support Pigcaulans claim.
Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause for
his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, to
be prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress.
However, Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he
knows that he has a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit
the courts consideration or sympathy. It must be emphasized at this point that procedural rules should not be ignored
simply because their non-observance may result in prejudice to a partys substantial rights. The Rules of Court should
be followed except only for the most persuasive of reasons.[if !supportFootnotes][29][endif]
Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequent
pleadings, although apparently filed under his and Canoys name, as solely filed by the former.
There was no substantial evidence to support the grant of overtime pay.
The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13 th month pay
for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computations they
submitted which he considered as representative daily time records to substantiate the award of salary differentials. The
NLRC then sustained the award on the ground that there was substantial evidence of underpayment of salaries and
benefits.
We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations are
self-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime pay.
Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries stated
therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily time
records, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to prove
that the two were underpaid of their salaries. We find nothing in the records which could substantially support
Pigcaulans contention that he had rendered service beyond eight hours to entitle him to overtime pay and during
Sundays to entitle him to restday pay. Hence, in the absence of any concrete proof that additional service beyond the
normal working hours and days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.
Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13th month pay for year 2000.
However, with respect to the award for holiday pay, service incentive leave
pay and 13th month pay, we affirm and rule that Pigcaulan is entitled to these benefits.
Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers;
xxxx

While Article 95 of the Labor Code provides:

ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive of five days with pay.
xxxx

Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work.[if
!supportFootnotes][30][endif]
Likewise, express provision of the law entitles him to service incentive leave benefit for he
rendered service for more than a year already. Furthermore, under Presidential Decree No. 851, he should be paid his
13th month pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees.
SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan received their
salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, the
documents presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of records,
pertinent files or similar documents reflecting that the specific claims have been paid. With respect to 13 th month pay,
SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of proving
payment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has the
burden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on the
defendant to prove payment, rather than on the plaintiff to prove non-payment.[if !supportFootnotes][33][endif] Since SCII failed
to provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service
incentive leave benefits and proportionate 13th month pay for the year 2000.

The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a detailed computation of
the judgment award.

Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary
awards granted. Such failure, however, should not result in prejudice to the substantial rights of the party. While we
disallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of
right, to his holiday pay, service incentive leave pay and 13th month pay for year 2000. Hence, the CA is not correct in
dismissing Pigcaulans claims in its entirety.

Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed within
three years from the time the cause of action accrued,[if !supportFootnotes][34][endif] Pigcaulan can only demand the amounts due
him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are
insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter
for a detailed computation of the monetary benefits due to him.

WHEREFORE, the petition is GRANTED. The Decision dated

February 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 are
REVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared ENTITLED to holiday pay
and service incentive leave pay for the years 1997-2000 and proportionate 13th month pay for the year 2000.

The case is REMANDED to the Labor Arbiter for further proceedings to determine the exact amount and to make a
detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation
Inc. should pay without delay.

SO ORDERED.
 G.R. Nos. L-51612-13 July 22, 1986
GLOBAL INCORPORATED, petitioner, vs.
HON. COMMISSIONERS DIEGO D. ATIENZA, GERONIMO Q. QUADRA and CLETO T. VILLATUYA,
and CLARITA ROSAL, respondents.
Federico V. Ganaden for private respondent.

PARAS, J.:
The instant petition for "Certiorari, mandamus with Preliminary Injunction and/or Restraining Order", seeks a review
of the Decision dated June 28, 1979 of the National labor Relations Commission, which modified on appeal the
decision of the Labor Arbiter Miguel P. Soriano, Jr. in NLRC Case Nos. RB-IV-9962-77 and RB-IV-11544-77 entitled
"Clarita Rosal vs. Global Incorporated"

From the records, what appear undisputed are the following:

Clarita Rosal, herein private respondent, commenced her employment with petitioner Global Incorporated in February,
1970, as a "Sales Clerk" with a salary of P450.00 a month.

On November 11, 1976 Global Inc. filed with the Department of Labor, Regional Office No. 4, an application for
clearance to terminate the services of Clarita Rosal, for having violated company rules and regulations by incurring
repeated absences and tardiness. (Case No. T-IV-11-7480-76) The subject employee was placed under preventive
suspension on November 16, 1976 pending resolution of the application for clearance.

On December 3, 1976, Clarita Rosal filed her opposition to the clearance application as well as a counter-complaint
against Global Inc., for illegal dismissal, overtime pay and premium pay. (Case No. RB-IV-9962-77)

On February 3, 1977, the officer-in-charge of Regional Office No. 4, Ministry of labor, Vicente Leogardo, Jr. lifted the
preventive suspension of Clarita Rosal, finding her suspension not warranted, and reinstated her to her former position
without loss of rights and with full backwages from the time of preventive suspension up to the date of her actual
reinstatement. On the said issue of preventive suspension, the officer-in-charge opined.

. . . , it appears that the continued presence of the subject employee does not pose a serious and imminent threat to the
life or property of the employer or co-employees. Her tardiness does not in any way pose serious threat to the property
of the employer. As sales clerk, she was required to prepare reports and submit them before closing of office hours in
the afternoon. Herein complainant managed to comply with such requirement without prejudice to company's interest.
Consequently, the hearings on the issue of termination and the counter-complaint for illegal dismissal were
consolidated and jointly held before Labor Arbiter Miguel P. Soriano, Jr., docketed respectively as NLRC Case Nos.
RB-IV-9962-77 and RB-IV-1154-77.

On May 31, 1978, the Labor Arbiter rendered his decision, the dispositive portion of which reads
WHEREFORE, all things considered, this complaint for illegal dismissal, overtime compensation and premium pay is
hereby ordered DISMISSED for lack of merit. Accordingly, the clearance for complainant's termination is hereby
GRANTED.
SO ORDERED.

Clarita Rosal appealed the aforesaid decision to the National Labor Relations Commission. On June 28, 1979,
respondents, Commissioners Diego Atienza and Geronimo Quadra modified the appealed decision as follows:
WHEREFORE, responsive to the foregoing, the following dispositions are made:
(a) respondent is ordered to pay complainant overtime pay at the rate of one hour everyday starting Nov. 1, 1974 to
Nov. 16, 1976 when she was suspended;
(b) respondent is likewise ordered to pay complainant backwages from Dec. 2, 1976 to May 31, 1978;
(c) the decision of the Labor Arbiter granting clearance to terminate the services of the complainant is affirmed.

Compliance with the above orders is strictly enjoined and the respondent-appellee is further ordered to submit to the
Commission proof of compliance with this Decision after ten (10) days from receipt of the same.
SO ORDERED.

Respondent Commissioner Cleto T. Villatuya voted to affirm the Labor Arbiter's decision.
Hence, the instant petition praying that after hearing, judgment be rendered reversing or declaring the assailed decision
null and void and affirming in toto the decision of the Labor Arbiter Miguel P. Soriano, Jr.; to order the private
respondent Clarita Rosal to pay the petitioner the sum of Two Thousand Pesos (P2,000), as and for attorney's fees and
to pay costs of suit; and that pending the adjudication of the case on the merits, a writ of preliminary injunction or
restraining order be issued against the respondents or their representatives restraining them from executing or enforcing
the assailed decision.

In the Resolution of this Court dated Oct. 17, 1979 respondents were required to file their comment within ten (10)
days from notice. In the same resolution, a temporary restraining order was issued enjoining the respondents from
enforcing and/or carrying out the assailed decision.

In the subsequent Resolution dated March 21, 1980 this Court, acting on the Petition as well as the respondents'
Comments and petitioner's Reply to the said Comments resolved to give due course to the petition and required the
parties to file their respective memoranda, after which the case was deemed submitted for decision.

Petitioner takes issue with the ruling of the National Labor Relations Commission granting backwages and overtime
pay in favor of private respondent Clarita Rosal. Thus, it argues , that if both the Labor Arbiter who tried the case and
the National Labor Relations Commission which reviewed the same, found the grounds of absenteeism and tardiness as
valid and just causes to terminate the employment of Clarita Rosal, the inevitable conclusion is that the preventive
suspension on the same grounds is likewise just and valid. If the suspension is just and valid, she is not entitled to
backwages. (Be it noted that under the Rules of the Ministry, an employee placed unjustly under preventive suspension
is entitled to be paid her wages, even if she does not work during said period). On the issue of overtime pay, it is the
contention of petitioner that the grant of overtime pay in favor of Clarita Rosal at the rate of one hour everyday starting
Nov. 1, 1974 to Nov. 16, 1976 is not justified as there is nothing in the record except her bare allegations which would
show that she truly and actually rendered said overtime work. Besides it is highly improbable, if not impossible for
Clarita Rosal to have rendered continuous overtime services from Nov. 1, 1974 to Nov. 16, 1976, or a period of two (2)
years including Sundays and holidays.

After a careful review of the evidence on record as well as the arguments of both parties, We rule
1. On the issue of overtime pay, We agree with the conclusion of the labor Arbiter that the same should be denied for
want of sufficient factual and legal basis. The evidence on record shows that the office hours of the petitioner are from
8:00 in the morning to 5:00 in the afternoon, with noon break from 12:00 noon to 1:00 p.m. from Monday thru
Saturday. No employee is authorized to work after office hours, during Sundays and Holidays unless required by a
written memorandum from the General Manager. During the period from Nov. 1, 1974 to Nov. 16, 1976, no employee
of the company was never required to work after 5:00 in the afternoon. Neither did the company require any employee
to work during Sundays or Holidays except on Nov. 1, 1976, on which date respondent Clarita Rosal was requested to
work through a written memorandum signed by the General Manager. Respondent Rosal admitted this, and that she
was properly compensated for her work on said date (Exh. "10").

The claim of Clarita Rosal that she rendered overtime work from Nov. 1, 1974 to Nov. 16, 1976 has not been
substantiated by adequate evidence. Her time records for said period show that she had no time-in and time-out during
Sundays and Holidays. Except for some time records where there were no time-outs in the afternoon, Rosal's time
records show that she regularly left the office at or a few minutes after 5:00 o'clock in the afternoon. The records where
there were no time-outs in the afternoon were sufficiently explained by petitioner's witness as due to a mechanical
defect in the office bundy clock. The same omission of time-outs was found in the records of the other employees, but
only respondent complained.

2. On the issue of backwages, the National Labor Relation Commission ordered petitioner to pay Clarita Rosal
"backwages from Dec. 2, 1976 to May 31, 1978", the date when Asst. Secretary Vicente Leogardo, Jr., rendered his
decision lifting the preventive suspension of Clarita Rosal and ordering petitioner to reinstate her to her former position
without loss of rights and with full backwages from the time of preventive suspension up to the date of her actual
reinstatement.

We agree. We note that this decision of the Labor Arbiter ordering reinstatement had not been complied with. Neither
was it appealed by petitioner, therefore, the decision had become final and executory. To exempt petitioner from the
payment of backwages would be to give premium to the blant disregard of orders of the Ministry of Labor. Moreover,
it would be in consonance with compassionate justice that Clarita Rosal be paid backwages during the period that she
was supposed to be reinstated.

Note that the only ground for the imposition of preventive suspension is provided for under Sec. 4, Rule XIV of the
Implementing Regulations of the Ministry of Labor which reads-
SEC. 4. Preventive suspension. The employer may place the employee concerned under preventive suspension only if
the continued employment of the employee poses a serious and imminent threat to the life or property of the employer
or of the co-employees. Any preventive suspension before the filing of the application shall be considered worked
days, and shall be duly paid as such if the continued presence of the employee concerned does not pose a serious threat
to the life and property of the employer or of the co-employees.

As aptly held by Asst. Secretary Leogardo Jr. (Officer-in-charge of Regional Office No. IV of the Ministry of Labor),
the continued presence of Clarita Rosal never posed a serious and imminent threat to the life or property of the
employer or co-employees as would warrant her preventive suspension.

Accordingly, the assailed decision of the National Labor Relations Commissions is MODIFIED as follows:
(a) the decision granting clearance to terminate the services of private respondent Clarita Rosal is affirmed;
(b) petitioner is ordered to pay private respondent backwages from Dec. 2, 1976 to May 31, 1978;
(c) petitioner is ordered to pay costs of suit.
SO ORDERED.
 G.R. No. L-7349 July 19, 1955
ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION, petitioner, vs.
ATOK-BIG WEDGE MINING COMPANY, INCORPORATED, respondents.
Pablo C. Sanidad for petitioner.Roxas and Sarmiento for respondents.
REYES, J. B. L., J.:
On September 4, 1950, the petitioner labor union, the Atok-Big Wedge Mutual Benefit Association, submitted to the Atok-
Big Wedge Mining Co., Inc. (respondent herein) several demands, among which was an increase of P0.50 in daily wage. The
matter was referred by the mining company to the Court of Industrial Relations for arbitration and settlement (Case No. 523-
V). In the course of conciliatory measures taken by the Court, some of the demands were granted, and others (including the
demand for increased wages) rejected, and so, hearings proceeded and evidence submitted on the latter. On July 14, 1951,
the Court rendered a decision (Record, pp. 25-32) fixing the minimum wage at P2.65 a day with the rice ration, or P3.20
without rice ration; denying the deduction from such minimum wage, of the value of housing facilities furnished by the
company to the laborers, as well as the efficiency bonus given to them by the company; and ordered that the award be made
effective retroactively from the date of the demand, September 4, 1950, as agreed by the parties. From this decision, the
mining company appealed to this Court (G.R. No. L-5276).
Subsequently, an urgent petition was presented in Court on October 15, 1952 by the Atok-Big Wedge Mining Company for
authority to stop operations and lay off employees and laborers, for the reason that due to the heavy losses, increased taxes,
high cost of materials, negligible quantity of ore deposits, and the enforcement of the Minimum Wage Law, the continued
operation of the company would lead to its immediate bankruptcy and collapse (Rec. pp. 100-109). To avert the closure of
the company and the consequent lay-off of hundreds of laborers and employees, the Court, instead of hearing the petition on
the merits, convened the parties for voluntary conciliation and mediation. After lengthy discussions and exchange of views,
the parties on October 29, 1952 reached an agreement effective from August 4, 1952 to December 31, 1954 (Rec. pp. 18-23).
The Agreement in part provides:
I That the petitioner, Atok-Big Wedge Mining Company, Incorporated, agrees to abide by whatever decision that the
Supreme Court may render with respect to Case No. 523-V (G.R. 5276) and Case No. 523-1 (10) (G.R. 5594).
xxx xxx xxx

III
xxx xxx xxx

That the petitioner, Atok-Big Wedge Mining Company, Incorporated, and the respondent, Atok-Big Wedge Mutual Benefit
Association, agree that the following facilities heretofore given or actually being given by the petitioner to its workers and
laborers, and which constitute as part of their wages, be valued as follows:
Rice ration P.55 per day
Housing facility 40 per day
All other facilities such as recreation facilities, medical treatment to dependents of laborers, school
facilities, rice ration during off-days, water, light, fuel, etc., equivalent to at least 85 per day
It is understood that the said amount of facilities valued at the abovementioned prices, may be charged in full or partially by the
Atok-Big Wedge Mining Company, Inc., against laborer or employee, as it may see fit pursuant to the exigencies of its operation.
The agreement was submitted to the Court for approval and on December 26, 1952, was approved by the Court in an order
giving it effect as an award or decision in the case (Rec., p. 24).
Later, Case No. G.R. No. L-5276 was decided by this Court (promulgated March 3, 1953), affirming the decision of the
Court of Industrial Relations fixing the minimum cash wage of the laborers and employees of the Atok-Big Wedge Mining
Co. at P3.20 cash, without rice ration, or P2.65, with rice ration. On June 13, 1953, the labor union presented to the Court a
petition for the enforcement of the terms of the agreement of October 29, 1952, as allegedly modified by the decision of this
Court in G.R. No. L-5276 and the provisions of the Minimum Wage Law, which has since taken effect, praying for the
payment of the minimum cash wage of P3.45 a day with rice ration, or P4.00 without rice ration, and the payment of
differential pay from August 4, 1952, when the award became effective. The mining company opposed the petition claiming
that the Agreement of October 29, 1952 was entered into by the parties with the end in view that the company's cost of
production be not increased in any way, so that it was intended to supersede whatever decision the Supreme Court would
render in G.R. No. L-5276 and the provisions of the Minimum Wage Law with respect to the minimum cash wage payable to
the laborers and employees. Sustaining the opposition, the Court of Industrial Relations, in an order issued on September 22,
1953 (Rec. pp. 44-49), denied the petition, upon the ground that when the Agreement of the parties of October 29, 1952 was
entered into by them, they already knew the decision of said Court (although subject to appeal to the Supreme Court) fixing
the minimum cash wage at P3.20 without rice ration, or P2.65 with rice ration, as well as the provisions of the Minimum
Wage Law requiring the payment of P4 minimum daily wage in the provinces effective August 4, 1952; so that the parties
had intended to be regulated by their Agreement of October 29, 1952. On the same day, the Court issued another order (Rec.
pp. 50-55), denying the claim of the labor union for payment of an additional 50 per cent based on the basic wage of P4 for work
on Sundays and holidays, holding that the payments being made by the company were within the requirements of the law. Its
motion for the reconsideration of both orders having been denied, the labor union filed this petition for review by certiorari.
The first issue submitted to us arises from an apparent contradiction in the Agreement of October 29, 1952. By paragraph III
thereof, the parties by common consent evaluated the facilities furnished by the Company to its laborers (rice rations,
housing, recreation, medical treatment, water, light, fuel, etc.) at P1.80 per day, and authorized the company to have such
value "charge in full or partially against any laborer or employee as it may see fit"; while in paragraph I, the Company
agreed to abide by the decision of this Court (pending at the time the agreement was had) in G.R. No. L-5594; and as rendered, the
decision was to the effect that the Company could deduct from the minimum wage only the value of the rice ration.
It is contended by the petitioner union that the two provisions should be harmonized by holding paragraph III (deduction of
all facilities) to be merely provisional, effective only while this Court had not rendered its decision in G.R. No. L-5594; and
that the terms of said paragraph should be deemed superseded by the decision from the time the latter became final, some
four or five months after the agreement was entered into; in consequence, (it is claimed), the laborers became entitled by
virtue of said decision to the prevailing P4.00 minimum wage with no other deduction than that of the rice ration, or a net
cash wage of P3.45.
This contention, in our opinion, is untenable. The intention of the parties could not have been to make the arrangement in
paragraph III a merely provisional arrangement pending the decision of the Supreme Court for "this agreement" was
expressly made retroactive and effective as of August 4, 1952, and to be in force up to and including December 31, 1954"
(Par. IV). When concluded on October 29, 1952, neither party could anticipate the date when the decision of the Supreme
Court would be rendered; nor is any reason shown why the parties should desire to limit the effects of the decision to the
period 1952-1954 if it was to supersede the agreement of October 29, 1952.
To ascertain the true import of paragraph I of said Agreement providing that the respondent company agreed to abide by
whatever decision the Supreme Court would render in G.R. No. L-5276, it is important to remember that, as shown by the
records, the agreement was prompted by an urgent petition filed by the respondent mining company to close operations and
lay-off laborers because of heavy losses and the full enforcement of the Minimum Wage Law in the provinces, requiring it to
pay its laborers the minimum wage of P4; to avoid such eventuality, through the mediation of the Court of Industrial
Relations, a compromise was reached whereby it was agreed that the company would pay the minimum wage fixed by the
law, but the facilities then being received by the laborers would be evaluated and charged as part of the wage, but without in
any way reducing the P2.00 cash portion of their wages which they were receiving prior to the agreement (hearing of Oct.
28, 1952, CIR, t.s.n. 47). In other words, while it was the objective of the parties to comply with the requirements of the
Minimum Wage Law, it was also deemed important that the mining company should not have to increase the cash wages it
was then paying its laborers, so that its cost of production would not also be increased, in order to prevent its closure and the
lay-off of employees and laborers. And as found by the Court below in the order appealed from (which finding is conclusive
upon us), "it is this eventuality that the parties did not like to happen, when they have executed the said agreement" (Rec. p.
49). Accordingly, after said agreement was entered into, the Company started paying its laborers a basic cash or "take-home"
wage of P2.20 (Rec. p. 9), representing the difference between P4 (minimum wage) and P1.80 (value of all facilities).
With this background, the provision to abide by our decision in G.R. No. L-5276 can only be interpreted thus: That the
company agreed to pay whatever award this Court would make in said case from the date fixed by the decision (which was
that of the original demand, September 4, 1950) up to August 3, 1952 (the day previous to the effectivity of the Compromise
Agreement) and from August 4, 1954 to December 31, 1954, they are to be bound by their agreement of October 29, 1952.
This means that during the first period (September 4, 1950 to August 3, 1952), only rice rations given to the laborers are to
be regarded as forming part of their wage and deductible therefrom. The minimum wage was then fixed (by the Court of
Industrial Relations, and affirmed by this Court) at P3.20 without rice ration, or P2.65 with rice ration. Since the respondent
company had been paying its laborers the basic cash or "take-home" wage of P2 prior to said decision and up to August 3,
1952, the laborers are entitled to a differential pay of P0.65 per working day from September 4, 1950 (the date of the
effectivity of the award in G.R. L-5276) up to August 3, 1952.
From August 4, 1952, the date when the Agreement of the parties of October 29, 1952 became effective (which was also the
date when the Minimum Wage Law became fully enforceable in the provinces), the laborers should be paid a minimum
wage of P4 a day. From this amount, the respondent mining company is given the right to charge each laborer "in full or
partially", the facilities enumerated in par. III of the Agreement; i.e., rice ration at P0.55 per day, housing facility at P0.40
per day, and other facilities "constitute part of his wages". It appears that the company had actually been paying its laborers
the minimum wage of P2.20 since August 4, 1952; hence they are not entitled to any differential pay from this date.
Petitioner argues that to allow the deductions stipulated in the Agreement of October 29, 1952 from the minimum daily wage
of P4 would be a waiver of the minimum wage fixed by the law and hence null and void, since Republic Act No. 602,
section 20, provides that "no agreement or contract, oral or written, to accept a lower wage or less than any other under this
Act, shall be valid". An agreement to deduct certain facilities received by the laborers from their employer is not a waiver of
the minimum wage fixed by the law. Wage, as defined by section 2 of Republic Act No. 602, "includes the fair and
reasonable value as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the
employer to the employee." Thus, the law permits the deduction of such facilities from the laborer's minimum wage of P4, as
long as their value is "fair and reasonable". It is not here claimed that the valuations fixed in the Agreement of October 29,
1952 are not fair and reasonable. On the contrary, the agreement expressly states that such valuations:
"have been arrived at after careful study and deliberation by both representatives of both parties, with the assistance of their
respective counsels, and in the presence of the Honorable Presiding Judge of the Court of Industrial Relations" (Rec. p. 2).
Neither is it claimed that the parties, with the aid of the Court of Industrial Relations in a dispute pending before it, may not
fix by agreement the valuation of such facilities, without referring the matter to the Department of Labor.
Petitioner also argues that to allow the deductions of the facilities appearing in the Agreement referred to, would be contrary
to the mandate of section 19 of the law, that "nothing in this Act . . . justify an employer . . . in reducing supplements
furnished on the date of enactment.
The meaning of the term "supplements" has been fixed by the Code of Rules and Regulations promulgated by the Wage
Administration Office to implement the Minimum Wage Law (Ch. 1, [c]), as:
extra renumeration or benefits received by wage earners from their employees and include but are not restricted to pay for
vacation and holidays not worked; paid sick leave or maternity leave; overtime rate in excess of what is required by law;
sick, pension, retirement, and death benefits; profit-sharing; family allowances; Christmas, war risk and cost-of-living
bonuses; or other bonuses other than those paid as a reward for extra output or time spent on the job.
"Supplements", therefore, constitute extra renumeration or special privileges or benefits given to or received by the laborers
over and above their ordinary earnings or wages. Facilities, on the other hand, are items of expense necessary for the
laborer's and his family's existence and subsistence, so that by express provision of the law (sec. 2 [g]) they form part of the
wage and when furnished by the employer are deductible therefrom since if they are not so furnished, the laborer would
spend and pay for them just the same. It is thus clear that the facilities mentioned in the agreement of October 29, 1952 do
not come within the term "supplements" as used in Art. 19 of the Minimum Wage Law.
For the above reasons, we find the appeal from the Order of the Court a quo of September 22, 1953 denying the motion of
the petitioner labor union for the payment of the minimum wage of P3.45 per day plus rice ration, or P4 without rice ration,
to be unmeritorious and untenable.
The second question involved herein relates to the additional compensation that should be paid by the respondent company
to its laborers for work rendered on Sundays and holidays. It is admitted that the respondent company is paying an additional
compensation of 50 per cent based on the basic "cash portion" of the laborer's wage of P2.20 per day; i.e., P1.10 additional
compensation for each Sunday or holiday's work. Petitioner union insists, however, that this 50 per cent additional
compensation should be computed on the minimum wage of P400 and not on the "cash portion" of the laborer's wage of
P2.20, under the provisions of the Agreement of October 29, 1952 and the Minimum Wage Law.
SEC. 4. Commonwealth Act No. 444 (otherwise known as the Eight Hour Labor Law) provides:
No person, firm, or corporations, business establishment or place or center of labor shall compel an employee or laborer to
work during Sundays and holidays, unless he is paid an additional sum of at least twenty-five per centum of his regular
renumeration:
The minimum legal additional compensation for work on Sundays and legal holidays is, therefore, 25 per cent of the
laborer's regular renumeration. Under the Minimum Wage Law, this minimum additional compensation is P1 a day (25 per
cent of P4, the minimum daily wage).
While the respondent company computes the additional compensation given to its laborers for work on Sundays and holidays
on the "cash portion" of their wages of P2.20, it is giving them 50 per cent thereof, or P1.10 a day. Considering that the
minimum additional compensation fixed by the law is P1 (25 per cent of P4), the compensation being paid by the respondent
company to its laborers is even higher than such minimum legal additional compensation. We, therefore, see no error in the
holding of the Court a quo that the respondent company has not violated the law with respect to the payment of additional
compensation for work rendered by its laborers on Sundays and legal holidays.
Finding no reason to sustain the present petition for review, the same is, therefore, dismissed, with costs against the
petitioner Atok-Big Wedge Mutual Benefit Association.
 [G.R. No. 149434. June 3, 2004]
PHILIPPINE APPLIANCE CORPORATION (PHILACOR), petitioner, vs. THE COURT OF APPEALS, THE
HONORABLE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA and UNITED
PHILACOR WORKERS UNION-NAFLU, respondents.
DECISION
YNARES-SANTIAGO, J.:
Before us is an appeal by certiorari under Rule 45 of the Rules of Court which seeks to set aside the decision of the Court of
Appeals in CA-G.R. SP No. 59011, denying due course to petitioner Philippine Appliance Corporations partial appeal, as
well as the Resolution[ of the same court, dated August 10, 2001, denying the motion for reconsideration.
Petitioner is a domestic corporation engaged in the business of manufacturing refrigerators, freezers and washing
machines. Respondent United Philacor Workers Union-NAFLU is the duly elected collective bargaining representative
of the rank-and-file employees of petitioner. During the collective bargaining negotiations between petitioner and
respondent union in 1997 (for the last two years of the collective bargaining agreement covering the period of July 1,
1997 to August 31, 1999), petitioner offered the amount of four thousand pesos (P4,000.00) to each employee as an
early conclusion bonus. Petitioner claims that this bonus was promised as a unilateral incentive for the speeding up of
negotiations between the parties and to encourage respondent union to exert their best efforts to conclude a CBA. Upon
conclusion of the CBA negotiations, petitioner accordingly gave this early signing bonus
In view of the expiration of this CBA, respondent union sent notice to petitioner of its desire to negotiate a new CBA.
Petitioner and respondent union began their negotiations. On October 22, 1999, after eleven meetings, respondent
union expressed dissatisfaction at the outcome of the negotiations and declared a deadlock. A few days later, on
October 26, 1999, respondent union filed a Notice of Strike with the National Conciliation and Mediation Board
(NCMB), Region IV in Calamba, Laguna, due to the bargaining deadlock.
A conciliation and mediation conference was held on October 30, 1999 at the NCMB in Imus, Cavite, before
Conciliator Jose L. Velasco. The conciliation meetings started with eighteen unresolved items between petitioner and
respondent union. At the meeting on November 20, 1999, respondent union accepted petitioners proposals on fourteen
items,[if !supportFootnotes][5][endif] leaving the following items unresolved: wages, rice subsidy, signing, and retroactive bonus.
Petitioner and respondent union failed to arrive at an agreement concerning these four remaining items. On January 18,
2000, respondent union went on strike at the petitioners plant at Barangay Maunong, Calamba, Laguna and at its
washing plant at Paraaque, Metro Manila. The strike lasted for eleven days and resulted in the stoppage of
manufacturing operations as well as losses for petitioner, which constrained it to file a petition before the Department
of Labor and Employment (DOLE). Labor Secretary Bienvenido Laguesma assumed jurisdiction over the dispute and,
on January 28, 2000, ordered the striking workers to return to work within twenty-four hours from notice and directed
petitioner to accept back the said employees.[if !supportFootnotes][7][endif]
On April 14, 2000, Secretary Laguesma issued the following Order:
In view of the foregoing, we fix the wage increases at P30 per day for the first year and P25 for the second year.
The rice subsidy and retroactive pay base are maintained at their existing levels and rates.
Finally, this Office rules in favor of Companys proposal on signing bonus. We believe that a P3,000 bonus is fair and
reasonable under the circumstances.
WHEREFORE, premises considered, Philippine Appliance Corporation and United Philacor Workers Union-NAFLU
are hereby directed to conclude a Collective Bargaining Agreement for the period July 1, 1999 to June 30, 2001. The
agreement is to incorporate the disposition set forth above and includes other items already agreed upon in the course
of negotiation and conciliation.
SO ORDERED. (Emphasis supplied)
On April 27, 2000, petitioner filed a Partial Motion for Reconsideration stating that while it accepted the decision of
Secretary Laguesma, it took exception to the award of the signing bonus. Petitioner argued that the award of the
signing bonus was patently erroneous since it was not part of the employees salaries or benefits or of the collective
bargaining agreement. It is not demandable or enforceable since it is in the nature of an incentive. As no CBA was
concluded through the mutual efforts of the parties, the purpose for the signing bonus was not served. On May 22,
2000, Secretary Laguesma issued an Order[if !supportFootnotes][10][endif] denying petitioners motion. He ruled that while the
bargaining negotiations might have failed and the signing of the agreement was delayed, this cannot be attributed
solely to respondent union. Moreover, the Secretary noted that the signing bonus was granted in the previous CBA.
On June 2, 2000, petitioner filed a Petition for Certiorari with the Court of Appeals docketed as CA-G.R. SP No. 59011
which was dismissed. The Labor Secretarys award of the signing bonus was affirmed since petitioner itself offered the
same as an incentive to expedite the CBA negotiations. This offer was not withdrawn and was still outstanding when
the dispute reached the DOLE. As such, petitioner can no longer adopt a contrary stand and dispute its own offer.
Petitioner filed a Motion for Reconsideration but the same was denied. Hence this petition for review raising a lone
issue, to wit:
THE HONORABLE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
RENDERED A DECISION NOT IN ACCORD WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT,
SPECIFICALLY THE CALTEX DOCTRINE OF 1997.
The petition is meritorious.
Petitioner invokes the doctrine laid down in the case of Caltex v. Brillantes,[if !supportFootnotes][11][endif] where it was held that
the award of the signing bonus by the Secretary of Labor was erroneous. The said case involved similar facts
concerning the CBA negotiations between Caltex (Philippines), Inc. and the Caltex Refinery Employees Association
(CREA). Upon referral of the dispute to the DOLE, then Labor Secretary Brillantes ruled, inter alia:
Fifth, specifically on the issue of whether the signing bonus is covered under the maintenance of existing benefits
clause, we find that a clarification is indeed imperative. Despite the expressed provision for a signing bonus in the
previous CBA, we uphold the principle that the award for a signing bonus should partake the nature of an incentive and
premium for peaceful negotiations and amicable resolution of disputes which apparently are not present in the instant
case. Thus, we are constrained to rule that the award of signing bonus is not covered by the maintenance of existing
benefits clause.

On appeal to this Court, it was held:

Although proposed by [CREA], the signing bonus was not accepted by [Caltex Philippines, Inc.]. Besides, a signing
bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner under the
principle of maintenance of existing benefits of the old CBA. However, as clearly explained by [Caltex], a signing
bonus may not be demanded as a matter of right. If it is not agreed upon by the parties or unilaterally offered as an
additional incentive by [Caltex], the condition for awarding it must be duly satisfied. In the present case, the condition
sine qua non for its granta non-strike was not complied with.

In the case at bar, two things militate against the grant of the signing bonus: first, the non-fulfillment of the condition
for which it was offered, i.e., the speedy and amicable conclusion of the CBA negotiations; and second, the failure of
respondent union to prove that the grant of the said bonus is a long established tradition or a regular practice on the part
of petitioner. Petitioner admits, and respondent union does not dispute, that it offered an early conclusion bonus or an
incentive for a swift finish to the CBA negotiations. The offer was first made during the 1997 CBA negotiations and then again at
the start of the 1999 negotiations. The bonus offered is consistent with the very concept of a signing bonus.

In the case of MERALCO v. The Honorable Secretary of Labor,[if !supportFootnotes][12][endif] we stated that the signing bonus
is a grant motivated by the goodwill generated when a CBA is successfully negotiated and signed between the
employer and the union. In that case, we sustained the argument of the Solicitor General, viz:
When negotiations for the last two years of the 1992-1997 CBA broke down and the parties sought the assistance of the
NCMB, but which failed to reconcile their differences, and when petitioner MERALCO bluntly invoked the
jurisdiction of the Secretary of Labor in the resolution of the labor dispute, whatever goodwill existed between
petitioner MERALCO and respondent union disappeared. . . .

Verily, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that
culminated in the signing of a CBA.

In the case at bar, the CBA negotiation between petitioner and respondent union failed notwithstanding the intervention
of the NCMB. Respondent union went on strike for eleven days and blocked the ingress to and egress from petitioners
two work plants. The labor dispute had to be referred to the Secretary of Labor and Employment because neither of the
parties was willing to compromise their respective positions regarding the four remaining items which stood
unresolved. While we do not fault any one party for the failure of the negotiations, it is apparent that there was no more
goodwill between the parties and that the CBA was clearly not signed through their mutual efforts alone. Hence, the payment
of the signing bonus is no longer justified and to order such payment would be unfair and unreasonable for petitioner.

Furthermore, we have consistently ruled that a bonus is not a demandable and enforceable obligation. [ True, it may
nevertheless be granted on equitable considerations as when the giving of such bonus has been the companys long and
regular practice. To be considered a regular practice, however, the giving of the bonus should have been done over a
long period of time, and must be shown to have been consistent and deliberate. The test or rationale of this rule on long
practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well
that said employees are not covered by the law requiring payment thereof.[if !supportFootnotes][17][endif] Respondent does not
contest the fact that petitioner initially offered a signing bonus only during the previous CBA negotiation. Previous to
that, there is no evidence on record that petitioner ever offered the same or that the parties included a signing bonus
among the items to be resolved in the CBA negotiation. Hence, the giving of such bonus cannot be deemed as an
established practice considering that the same was given only once, that is, during the 1997 CBA negotiation.

WHEREFORE, premises considered, the instant petition is GRANTED. The decision of the Court of Appeals
in CA-G.R. SP No. 59011 affirming the Order of the Secretary of Labor and Employment, directing petitioner
Philippine Appliance Corporation to pay each of its employees a signing bonus in the amount of Three Thousand Pesos
(P3,000.00), is hereby REVERSED and SET ASIDE. No pronouncement as to costs.
SO ORDERED.
 EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. vs G.R. No. 185665, February 8, 2012
MENDOZA, J.:
Before the Court is a petition for review on certiorari seeking modification of the June 25, 2008 Decision [if
!supportFootnotes][1][endif]
of the Court of Appeals (CA) and its December 12, 2008 Resolution, in CA-G.R. SP No. 91974,
annulling the April 28, 2005 Resolution of the National Labor Relations Commission (NLRC) in NLRC-NCR-CC-
000273-04 entitled In the Matter of the Labor Dispute in Eastern Telecommunications, Philippines, Inc.
The Facts
As synthesized by the NLRC, the facts of the case are as follows, viz:
Eastern Telecommunications Phils., Inc. (ETPI) is a corporation engaged in the business of providing telecommunications
facilities, particularly leasing international date lines or circuits, regular landlines, internet and data services, employing
approximately 400 employees.
Eastern Telecoms Employees Union (ETEU) is the certified exclusive bargaining agent of the companys rank and file employees
with a strong following of 147 regular members. It has an existing collecti[ve] bargaining agreement with the company to expire in
the year 2004 with a Side Agreement signed on September 3, 2001.
In essence, the labor dispute was a spin-off of the companys plan to defer payment of the 2003 14 th, 15th and 16th month bonuses
sometime in April 2004. The companys main ground in postponing the payment of bonuses is due to allege continuing
deterioration of companys financial position which started in the year 2000. However, ETPI while postponing payment of bonuses
sometime in April 2004, such payment would also be subject to availability of funds.
Invoking the Side Agreement of the existing Collective Bargaining Agreement for the period 2001-2004 between ETPI and ETEU
which stated as follows:
4. Employment Related Bonuses. The Company confirms that the 14 th, 15th and 16th month bonuses (other than 13th month pay) are
granted.
The union strongly opposed the deferment in payment of the bonuses by filing a preventive mediation complaint with the NCMB
on July 3, 2003, the purpose of which complaint is to determine the date when the bonus should be paid.
In the conference held at the NCMB, ETPI reiterated its stand that payment of the bonuses would only be made in April 2004 to
which date of payment, the union agreed. Thus, considering the agreement forged between the parties, the said agreement was
reduced to a Memorandum of Agreement. The union requested that the President of the company should be made a signatory to the
agreement, however, the latter refused to sign. In addition to such a refusal, the company made a sudden turnaround in its position
by declaring that they will no longer pay the bonuses until the issue is resolved through compulsory arbitration.
The companys change in position was contained in a letter dated April 14, 2004 written to the union by Mr. Sonny Javier, Vice-
President for Human Resources and Administration, stating that the deferred release of bonuses had been superseded and voided
due to the unions filing of the issue to the NCMB on July 18, 2003. He declared that until the matter is resolved in a compulsory
arbitration, the company cannot and will not pay any bonuses to any and all union members.
Thus, on April 26, 2004, ETEU filed a Notice of Strike on the ground of unfair labor practice for failure of ETPI to pay the
bonuses in gross violation of the economic provision of the existing CBA.
On May 19, 2004, the Secretary of Labor and Employment, finding that the company is engaged in an industry considered vital to
the economy and any work disruption thereat will adversely affect not only its operation but also that of the other business relying
on its services, certified the labor dispute for compulsory arbitration pursuant to Article 263 (q) of the Labor Code as amended.
Acting on the certified labor dispute, a hearing was called on July 16, 2004 wherein the parties have submitted that the issues for
resolution are (1) unfair labor practice and (2) the grant of 14th, 15th and 16th month bonuses for 2003, and 14th month bonus for
2004. Thereafter, they were directed to submit their respective position papers and evidence in support thereof after which
submission, they agreed to have the case considered submitted for decision.
In its position paper,[if !supportFootnotes][5][endif] the Eastern Telecoms Employees Union (ETEU) claimed that
Eastern Telecommunications Philippines, Inc. (ETPI) had consistently and voluntarily been giving out 14th month
bonus during the month of April, and 15th and 16th month bonuses every December of each year (subject bonuses) to its
employees from 1975 to 2002, even when it did not realize any net profits. ETEU posited that by reason of its long and
regular concession, the payment of these monetary benefits had ripened into a company practice which could no longer
be unilaterally withdrawn by ETPI. ETEU added that this long-standing company practice had been expressly
confirmed in the Side Agreements of the 1998-2001 and 2001-2004 Collective Bargaining Agreements (CBA) which
provided for the continuous grant of these bonuses in no uncertain terms. ETEU theorized that the grant of the subject
bonuses is not only a company practice but also a contractual obligation of ETPI to the union members.
ETEU contended that the unjustified and malicious refusal of the company to pay the subject bonuses was a
clear violation of the economic provision of the CBA and constitutes unfair labor practice (ULP). According to ETEU,
such refusal was nothing but a ploy to spite the union for bringing the matter of delay in the payment of the subject
bonuses to the National Conciliation and Mediation Board (NCMB). It prayed for the award of moral and exemplary
damages as well as attorneys fees for the unfair labor practice allegedly committed by the company.
On the other hand, ETPI in its position paper,[if !supportFootnotes][6][endif] questioned the authority of the NLRC to
take cognizance of the case contending that it had no jurisdiction over the issue which merely involved the
interpretation of the economic provision of the 2001-2004 CBA Side Agreement. Nonetheless, it maintained that the
complaint for nonpayment of 14th, 15th and 16th month bonuses for 2003 and 14th month bonus for 2004 was bereft of
any legal and factual basis. It averred that the subject bonuses were not part of the legally demandable wage and the
grant thereof to its employees was an act of pure gratuity and generosity on its part, involving the exercise of
management prerogative and always dependent on the financial performance and realization of profits. It posited that it
resorted to the discontinuance of payment of the bonuses due to the unabated huge losses that the company had
continuously experienced. It claimed that it had been suffering serious business losses since 2000 and to require the
company to pay the subject bonuses during its dire financial straits would in effect penalize it for its past generosity. It
alleged that the non-payment of the subject bonuses was neither flagrant nor malicious and, hence, would not amount
to unfair labor practice.
Further, ETPI argued that the bonus provision in the 2001-2004 CBA Side Agreement was a mere
affirmation that the distribution of bonuses was discretionary to the company, premised and conditioned on the success
of the business and availability of cash. It submitted that said bonus provision partook of the nature of a one-time grant
which the employees may demand only during the year when the Side Agreement was executed and was never
intended to cover the entire term of the CBA. Finally, ETPI emphasized that even if it had an unconditional obligation
to grant bonuses to its employees, the drastic decline in its financial condition had already legally released it therefrom
pursuant to Article 1267 of the Civil Code.
On April 28, 2005, the NLRC issued its Resolution dismissing ETEUs complaint and held that ETPI could
not be forced to pay the union members the 14th, 15th and 16th month bonuses for the year 2003 and the 14th month
bonus for the year 2004 inasmuch as the payment of these additional benefits was basically a management prerogative,
being an act of generosity and munificence on the part of the company and contingent upon the realization of profits.
The NLRC pronounced that ETPI may not be obliged to pay these extra compensations in view of the substantial
decline in its financial condition. Likewise, the NLRC found that ETPI was not guilty of the ULP charge elaborating
that no sufficient and substantial evidence was adduced to attribute malice to the company for its refusal to pay the
subject bonuses. The dispositive portion of the resolution reads:
WHEREFORE, premises considered, the instant complaint is hereby DISMISSED for lack of merit.
SO ORDERED,
Respondent ETEU moved for reconsideration but the motion was denied by the NLRC in its Resolution
dated August 31, 2005.
Aggrieved, ETEU filed a petition for certiorari[if !supportFootnotes][8][endif] before the CA ascribing grave abuse of
discretion on the NLRC for disregarding its evidence which allegedly would prove that the subject bonuses were part
of the union members wages, salaries or compensations. In addition, ETEU asserted that the NLRC committed grave
abuse of discretion when it ruled that ETPI is not contractually bound to give said bonuses to the union members.
In its assailed June 25, 2008 Decision, the CA declared that the Side Agreements of the 1998 and 2001 CBA
created a contractual obligation on ETPI to confer the subject bonuses to its employees without qualification or
condition. It also found that the grant of said bonuses has already ripened into a company practice and their denial
would amount to diminution of the employees benefits. It held that ETPI could not seek refuge under Article 1267 of
the Civil Code because this provision would apply only when the difficulty in fulfilling the contractual obligation was
manifestly beyond the contemplation of the parties, which was not the case therein. The CA, however, sustained the
NLRC finding that the allegation of ULP was devoid of merit. The dispositive portion of the questioned decision reads:
WHEREFORE, premises considered, the instant petition is GRANTED and the resolution of the National Labor Relations
Commission dated April 28, 2005 is hereby ANNULLED and SET ASIDE. Respondent Eastern Telecommunications Philippines,
Inc. is ordered to pay the members of petitioner their 14th, 15th and 16th month bonuses for the year 2003 and 14 th month for the
year 2004. The complaint for unfair labor practice against said respondent is DISMISSED.
SO ORDERED.
ISSUES
Dissatisfied, ETPI now comes to this Court via Rule 45, raising the following errors allegedly committed by the CA, to wit:

I. THE COURT OF APPEALS COMMITTED GRAVE ERROR OF LAW WHEN IT ANNULLED AND SET ASIDE
THE RESOLUTIONS OF THE NLRC DISREGARDING THE WELL SETTLED RULE THAT A WRIT OF
CERTIORARI (UNDER RULE 65) ISSUES ONLY FOR CORRECTION OF ERRORS OF JURISDICTION OR GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
II. THE COURT OF APPEALS COMMITTED GRAVE ERROR OF LAW WHEN IT DISREGARDED THE RULE
THAT FINDINGS OF FACTS OF QUASI-JUDICIAL BODIES ARE ACCORDED FINALITY IF THEY ARE
SUPPORTED BY SUBSTANTIAL EVIDENCE CONSIDERING THAT THE CONCLUSIONS OF THE NLRC WERE
BASED ON SUBSTANTIAL AND OVERWHELMING EVIDENCE AND UNDISPUTED FACTS.
III. IT WAS A GRAVE ERROR OF LAW FOR THE COURT OF APPEALS TO CONSIDER THAT THE BONUS
GIVEN BY EASTERN COMMUNICATIONS TO ITS EMPLOYEES IS NOT DEPENDENT ON THE REALIZATION
OF PROFITS.
IV. THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW WHEN IT DISREGARDED THE
UNDISPUTED FACT THAT EASTERN COMMUNICATIONS IS SUFFERING FROM TREMENDOUS FINANCIAL
LOSSES, AND ORDERED EASTERN COMMUNICATIONS TO GRANT THE BONUSES REGARDLESS OF THE
FINANCIAL DISTRESS OF EASTERN COMMUNICATIONS.
V. THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW WHEN IT ARRIVED AT THE
CONCLUSION THAT THE GRANT OF BONUS GIVEN BY EASTERN COMMUNICATIONS TO ITS EMPLOYEES
HAS RIPENED INTO A COMPANY PRACTICE.[if !supportFootnotes][10][endif]
A careful perusal of the voluminous pleadings filed by the parties leads the Court to conclude that this case revolves
around the following core issues:
1. Whether or not petitioner ETPI is liable to pay 14 th, 15th and 16th month bonuses for the year 2003 and 14th month bonus for the
year 2004 to the members of respondent union; and
2. Whether or not the CA erred in not dismissing outright ETEUs petition for certiorari.
ETPI insists that it is under no legal compulsion to pay 14th, 15th and 16th month bonuses for the year 2003
and 14th month bonus for the year 2004 contending that they are not part of the demandable wage or salary and that
their grant is conditional based on successful business performance and the availability of company profits from which
to source the same. To thwart ETEUs monetary claims, it insists that the distribution of the subject bonuses falls well
within the companys prerogative, being an act of pure gratuity and generosity on its part. Thus, it can withhold the
grant thereof especially since it is currently plagued with economic difficulties and financial losses. It alleges that the
companys fiscal situation greatly declined due to tremendous and extraordinary losses it sustained beginning the year
2000. It claims that it cannot be compelled to act liberally and confer upon its employees additional benefits over and
above those mandated by law when it cannot afford to do so. It posits that so long as the giving of bonuses will result in
the financial ruin of an already distressed company, the employer cannot be forced to grant the same.
ETPI further avers that the act of giving the subject bonuses did not ripen into a company practice arguing
that it has always been a contingent one dependent on the realization of profits and, hence, the workers are not entitled
to bonuses if the company does not make profits for a given year. It asseverates that the 1998 and 2001 CBA Side
Agreements did not contractually afford ETEU a vested property right to a perennial payment of the bonuses. It opines
that the bonus provision in the Side Agreement allows the giving of benefits only at the time of its execution. For this
reason, it cannot be said that the grant has ripened into a company practice. In addition, it argues that even if such
traditional company practice exists, the CA should have applied Article 1267 of the Civil Code which releases the
obligor from the performance of an obligation when it has become so difficult to fulfill the same.
It is the petitioners stance that the CA should have dismissed outright the respondent unions petition for
certiorari alleging that no question of jurisdiction whatsoever was raised therein but, instead, what was being sought
was a judicial re-evaluation of the adequacy or inadequacy of the evidence on record. It claims that the CA erred in
disregarding the findings of the NLRC which were based on substantial and overwhelming evidence as well as on
undisputed facts. ETPI added that the CA court should have refrained from tackling issues of fact and, instead, limited
itself on issues of jurisdiction and grave abuse of jurisdiction amounting to lack or excess of it.
The Courts Ruling
As a general rule, in petitions for review under Rule 45, the Court, not being a trier of facts, does not normally embark
on a re-examination of the evidence presented by the contending parties during the trial of the case considering that the
findings of facts of the CA are conclusive and binding on the Court. The rule, however, admits of several exceptions,
one of which is when the findings of the appellate court are contrary to those of the trial court or the lower
administrative body, as the case may be.[if !supportFootnotes][11][endif] Considering the incongruent factual conclusions of the CA and the
NLRC, this Court finds Itself obliged to resolve it.

The pivotal question determinative of this controversy is whether the members of ETEU are entitled to the payment of
14th, 15th and 16th month bonuses for the year 2003 and 14 th month bonus for year 2004.

After an assiduous assessment of the record, the Court finds no merit in the petition.

From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient has no right to
demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon the employer
who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employees basic
salaries or wages.[if !supportFootnotes][13][endif]
A bonus, however, becomes a demandable or enforceable obligation when it is made part of the wage or salary or
compensation of the employee.[if !supportFootnotes][14][endif] Particularly instructive is the ruling of the Court in Metro Transit
Organization, Inc. v. National Labor Relations Commission, [if !supportFootnotes][15][endif] where it was written:
Whether or not a bonus forms part of wages depends upon the circumstances and conditions for its payment. If it is
additional compensation which the employer promised and agreed to give without any conditions imposed for its payment,
such as success of business or greater production or output, then it is part of the wage. But if it is paid only if profits are
realized or if a certain level of productivity is achieved, it cannot be considered part of the wage. Where it is not payable to
all but only to some employees and only when their labor becomes more efficient or more productive, it is only an
inducement for efficiency, a prize therefore, not a part of the wage.
The consequential question that needs to be settled, therefore, is whether the subject bonuses are demandable or not.
Stated differently, can these bonuses be considered part of the wage, salary or compensation making them enforceable obligations?

The Court believes so.

In the case at bench, it is indubitable that ETPI and ETEU agreed on the inclusion of a provision for the grant of 14th,
15 and 16 month bonuses in the 1998-2001 CBA Side Agreement,[if !supportFootnotes][16][endif] as well as in the 2001-2004 CBA Side
th th

Agreement,[if !supportFootnotes][17][endif] which was signed on September 3, 2001. The provision, which was similarly worded, states:
Employment-Related Bonuses
The Company confirms that the 14th, 15th and 16th month bonuses (other than the 13th month pay) are granted.
A reading of the above provision reveals that the same provides for the giving of 14 th, 15th and 16th month bonuses
without qualification. The wording of the provision does not allow any other interpretation. There were no conditions specified in
the CBA Side Agreements for the grant of the benefits contrary to the claim of ETPI that the same is justified only when there are
profits earned by the company. Terse and clear, the said provision does not state that the subject bonuses shall be made to depend
on the ETPIs financial standing or that their payment was contingent upon the realization of profits. Neither does it state that if the
company derives no profits, no bonuses are to be given to the employees. In fine, the payment of these bonuses was not related to
the profitability of business operations.
The records are also bereft of any showing that the ETPI made it clear before or during the execution of the Side
Agreements that the bonuses shall be subject to any condition. Indeed, if ETPI and ETEU intended that the subject bonuses
would be dependent on the company earnings, such intention should have been expressly declared in the Side Agreements or
the bonus provision should have been deleted altogether. In the absence of any proof that ETPIs consent was vitiated by
fraud, mistake or duress, it is presumed that it entered into the Side Agreements voluntarily, that it had full knowledge of the
contents thereof and that it was aware of its commitment under the contract. Verily, by virtue of its incorporation in the CBA
Side Agreements, the grant of 14th, 15th and 16th month bonuses has become more than just an act of generosity on the part of
ETPI but a contractual obligation it has undertaken. Moreover, the continuous conferment of bonuses by ETPI to the union
members from 1998 to 2002 by virtue of the Side Agreements evidently negates its argument that the giving of the subject
bonuses is a management prerogative.

From the foregoing, ETPI cannot insist on business losses as a basis for disregarding its undertaking. It is manifestly clear
that although it incurred business losses of 149,068,063.00 in the year 2000, it continued to distribute 14th, 15th and 16th
month bonuses for said year. Notwithstanding such huge losses, ETPI entered into the 2001-2004 CBA Side Agreement on
September 3, 2001 whereby it contracted to grant the subject bonuses to ETEU in no uncertain terms. ETPI continued to
sustain losses for the succeeding years of 2001 and 2002 in the amounts of 348,783,013.00 and 315,474,444.00,
respectively. Still and all, this did not deter it from honoring the bonus provision in the Side Agreement as it continued to
give the subject bonuses to each of the union members in 2001 and 2002 despite its alleged precarious financial condition.
Parenthetically, it must be emphasized that ETPI even agreed to the payment of the 14th, 15th and 16th month bonuses for
2003 although it opted to defer the actual grant in April 2004. All given, business losses could not be cited as grounds for
ETPI to repudiate its obligation under the 2001-2004 CBA Side Agreement.

The Court finds no merit in ETPIs contention that the bonus provision confirms the grant of the subject bonuses
only on a single instance because if this is so, the parties should have included such limitation in the agreement. Nowhere in
the Side Agreement does it say that the subject bonuses shall be conferred once during the year the Side Agreement was
signed. The Court quotes with approval the observation of the CA in this regard:

ETPI argues that assuming the bonus provision in the Side Agreement of the 2001-2004 CBA entitles the union members to
the subject bonuses, it is merely in the nature of a one-time grant and not intended to cover the entire term of the CBA. The
contention is untenable. The bonus provision in question is exactly the same as that contained in the Side Agreement of the
1998-2001 CBA and there is no denying that from 1998 to 2001, ETPI granted the subject bonuses for each of those years.
Thus, ETPI may not now claim that the bonus provision in the Side Agreement of the 2001-2004 CBA is only a one-time
grant.[if !supportFootnotes][18][endif]

ETPI then argues that even if it is contractually bound to distribute the subject bonuses to ETEU members under
the Side Agreements, its current financial difficulties should have released it from the obligatory force of said contract
invoking Article 1267 of the Civil Code. Said provision declares:

Article 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the
obligor may also be released therefrom, in whole or in part.

The Court is not persuaded.

The parties to the contract must be presumed to have assumed the risks of unfavorable developments. It is,
therefore, only in absolutely exceptional changes of circumstances that equity demands assistance for the debtor.[if
!supportFootnotes][19][endif] In the case at bench, the Court determines that ETPIs claimed depressed financial state will not release it

from the binding effect of the 2001-2004 CBA Side Agreement.

ETPI appears to be well aware of its deteriorating financial condition when it entered into the 2001-2004 CBA
Side Agreement with ETEU and obliged itself to pay bonuses to the members of ETEU. Considering that ETPI had been
continuously suffering huge losses from 2000 to 2002, its business losses in the year 2003 were not exactly unforeseen or
unexpected. Consequently, it cannot be said that the difficulty in complying with its obligation under the Side Agreement
was manifestly beyond the contemplation of the parties. Besides, as held in Central Bank of the Philippines v. Court of
Appeals,] mere pecuniary inability to fulfill an engagement does not discharge a contractual obligation. Contracts, once
perfected, are binding between the contracting parties. Obligations arising therefrom have the force of law and should be
complied with in good faith. ETPI cannot renege from the obligation it has freely assumed when it signed the 2001-2004
CBA Side Agreement.

Granting arguendo that the CBA Side Agreement does not contractually bind petitioner ETPI to give the subject
bonuses, nevertheless, the Court finds that its act of granting the same has become an established company practice such that
it has virtually become part of the employees salary or wage. A bonus may be granted on equitable consideration when the
giving of such bonus has been the companys long and regular practice. In Philippine Appliance Corporation v. Court of
Appeals,[if !supportFootnotes][21][endif] it was pronounced:

To be considered a regular practice, however, the giving of the bonus should have been done over a long period of time, and
must be shown to have been consistent and deliberate. The test or rationale of this rule on long practice requires an
indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not
covered by the law requiring payment thereof.

The records show that ETPI, aside from complying with the regular 13th month bonus, has been further giving its
employees 14th month bonus every April as well as 15th and 16th month bonuses every December of the year, without fail,
from 1975 to 2002 or for 27 years whether it earned profits or not. The considerable length of time ETPI has been giving the
special grants to its employees indicates a unilateral and voluntary act on its part to continue giving said benefits knowing
that such act was not required by law. Accordingly, a company practice in favor of the employees has been established and
the payments made by ETPI pursuant thereto ripened into benefits enjoyed by the employees.
 The giving of the subject bonuses cannot be peremptorily withdrawn by ETPI without violating Article 100 of the
Labor Code:

Art. 100. Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in
any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.

The rule is settled that any benefit and supplement being enjoyed by the employees cannot be reduced,
diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full protection.[if
!supportFootnotes][22][endif]

Interestingly, ETPI never presented countervailing evidence to refute ETEUs claim that the company has been
continuously paying bonuses since 1975 up to 2002 regardless of its financial state. Its failure to controvert the allegation,
when it had the opportunity and resources to do so, works in favor of ETEU. Time and again, it has been held that should
doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor
of the latter.

WHEREFORE, the petition is DENIED. The June 25, 2008 Decision of the Court of Appeals and its December 12, 2008
Resolution are AFFIRMED.

SO ORDERED.
 EASTERN TELECOM PHILIPPINES, INC. VS EASTERN TELECOM EMPLOYEES UNION
Date of Decision: FEBRUARY 8, 2011
G.R. Number: G.R. No. 185665

Topic: BENEFITS OF EMPLOYEES

Subtopic: BONUSES
Facts: Eastern Telecom Philippines, Inc. (ETPI) plans to defer payment of the 2003 14th, 15th and 16th month bonuses
sometime in April 2004. The company's main ground in postponing the payment of bonuses is due to allege continuing
deterioration of company's financial position which started in the year 2000. However, ETPI while postponing payment
of bonuses sometime in April 2004, such payment would also be subject to availability of funds.

The union strongly opposed the deferment in payment of the bonuses by filing a preventive mediation complaint with
the NCMB on July 3, 2003, the purpose of which complaint is to determine the date when the bonus should be paid.
In the conference held at the NCMB, ETPI reiterated its stand that payment of the bonuses would only be made in
April 2004 to which date of payment, the union agreed. Subsequently, the company made a sudden turnaround in its
position by declaring that they will no longer pay the bonuses until the issue is resolved through compulsory
arbitration.

Thus, on April 26, 2004, the union filed a Notice of Strike on the ground of unfair labor practice for failure of ETPI to
pay the bonuses in gross violation of the economic provision of the existing CBA.

On May 19, 2004, the Secretary of Labor and Employment, finding that the company is engaged in an industry
considered vital to the economy and any work disruption thereat will adversely affect not only its operation but also
that of the other business relying on its services, certified the labor dispute for compulsory arbitration.

Acting on the certified labor dispute, a hearing was called on July 16, 2004 wherein the parties have submitted that the
issues for resolution. Thereafter, they were directed to submit their respective position papers and evidence in support
thereof after which submission, they agreed to have the case considered submitted for decision.

On April 28, 2005, the NLRC issued its Resolution dismissing ETEU's complaint and held that ETPI could not be
forced to pay the union members the bonuses for the year 2003 and the 14th month bonus for the year 2004 inasmuch
as the payment of these additional benefits was basically a management prerogative, being an act of generosity and
munificence on the part of the company and contingent upon the realization of profits.

The CA declared that the Side Agreements of the 1998 and 2001 CBA created a contractual obligation on ETPI to
confer the subject bonuses to its employees without qualification or condition. It also found that the grant of said
bonuses has already ripened into a company practice and their denial would amount to diminution of the employees'
benefits.

Issue: Whether or not ETPI is liable to pay 14th, 15th and 16th month bonuses for the year 2003 and 14th month bonus
for the year 2004 to the members of respondent union.

Decision: From a legal point of view, a bonus is a gratuity or act of liberality of the giver which the recipient cannot
demand as a matter of right. The grant of a bonus is basically a management prerogative which cannot be forced upon
the employer who may not be obliged to assume the onerous burden of granting bonuses. However, a bonus becomes a
demandable or enforceable obligation if the additional compensation is granted without any conditions imposed for its
payment. In such case, the bonus is treated as part of the wage, salary or compensation of the employee.

In this case, there is no dispute that Eastern Telecommunications Phils., Inc. and Eastern Telecoms Employees Union
agreed on the inclusion of a provision for the grant of 14th, 15th and 16th month bonuses in the 1998-2001 CBA Side
Agreement, as well as in their 2001-2004 CBA Side Agreement, which contained no qualification for its payment.
There were no conditions specified in the CBA Side Agreements for the grant of the bonus. There was nothing in the
relevant provisions of the CBA which made the grant of the bonus dependent on the company's financial standing or
contingent upon the realization of profits. There was also no statement that if the company derives no profits, no bonus
will be given to the employees. In fine, the payment of these bonuses was not related to the profitability of business
operations. Consequently, the giving of the subject bonuses cannot be peremptorily withdrawn by Eastern
Telecommunications Phils., Inc. without violating Article 100 of the Labor Code, which prohibits the unilateral
elimination or diminution of benefits by the employer. The rule is settled that any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer.
 WILLIAM ENDELISEO BARROGA vs DATA CENTER COLLEGE OF THE PHILIPPINES,
G.R. No. 174158, June 27, 2011

DEL CASTILLO, J.:

Our labor laws are enacted not solely for the purpose of protecting the working class but also the management by
equally recognizing its right to conduct its own legitimate business affairs.
This Petition for Review on Certiorari[ seeks the reversal of the Resolutions dated May 15, 2006 and August 4, 2006
of the Court of Appeals (CA) in CA-G.R. SP No. 93991, which dismissed petitioner William Endeliseo Barrogas
Petition for Certiorari for procedural infirmities, as well as the Decision dated August 25, 2005 and Resolution dated
January 31, 2006 of the National Labor Relations Commission (NLRC), with respect to the dismissal of petitioners
claim of constructive dismissal against respondents Data Center College of the Philippines and its President and
General Manager, Wilfred Bactad.
Factual Antecedents
On November 11, 1991, petitioner was employed as an Instructor in Data Center College Laoag City branch in Ilocos
Norte. In a Memorandum dated June 6, 1992, respondents transferred him to University of Northern Philippines (UNP)
in Vigan, Ilocos Sur where the school had a tie-up program. Petitioner was informed through a letter[if dated June 6,
1992 that he would be receiving, in addition to his monthly salary, a P1,200.00 allowance for board and lodging during
his stint as instructor in UNP-Vigan. In 1994, he was recalled to Laoag campus. On October 3, 2003, petitioner
received a Memorandum[if !supportFootnotes][9][endif] transferring him to Data Center College Bangued, Abra branch as Head
for Education/Instructor due to an urgent need for an experienced officer and computer instructor thereat.
However, petitioner declined to accept his transfer to Abra citing the deteriorating health condition of his father and the absence of
additional remuneration to defray expenses for board and lodging which constitutes implicit diminution of his salary.
On November 10, 2003, petitioner filed a Complaint for constructive dismissal against respondents. Petitioner alleged
that his proposed transfer to Abra constitutes a demotion in rank and diminution in pay and would cause personal
inconvenience and hardship. He argued that although he was being transferred to Abra branch supposedly with the
same position he was then holding in Laoag branch as Head for Education, he later learned through a Memorandum [if
from the administrator of Abra branch that he will be re-assigned merely as an instructor, thereby relegating him from
an administrative officer to a rank-and-file employee. Moreover, the elimination of his allowance for board and lodging
will result to an indirect reduction of his salary which is prohibited by labor laws. Petitioner also claimed that when he
questioned the indefinite suspension of the scholarship for post-graduate studies extended to him by respondents,[if the
latter became indifferent to his legitimate grievances which eventually led to his prejudicial re-assignment. He averred
that his transfer is not indispensable to the schools operation considering that respondents even suggested that he take
an indefinite leave of absence in the meantime if only to address his personal difficulties. Petitioner thus prayed for his
reinstatement and backwages. Further, as Head for Education at Data Center College Laoag branch, petitioner asked
for the payment of an overload honorarium as compensation for the additional teaching load in excess of what should
have been prescribed to him. Exemplary damages and attorneys fees were likewise prayed for.
For their part, respondents claimed that they were merely exercising their management prerogative to transfer employees for
the purpose of advancing the schools interests. They argued that petitioners refusal to be transferred to Abra constitutes
insubordination. They claimed that petitioners appointment as instructor carries a proviso of possible re-assignments to any
branch or tie-up schools as the schools necessity demands. Respondents argued that petitioners designation as Head for
Education in Laoag branch was merely temporary and that he would still occupy his original plantilla item as instructor at his
proposed assignment in Abra branch. Respondents denied liability to petitioners monetary claims.
Ruling of the Labor Arbiter
On September 24, 2004, the Labor Arbiter rendered a Decision dismissing the Complaint for lack of merit. The Labor
Arbiter ruled that there was no demotion in rank as petitioners original appointment as instructor on November 11,
1991 conferred upon respondents the right to transfer him to any of the schools branches and that petitioners
designation as Head for Education can be withdrawn anytime since he held such administrative position in a non-
permanent capacity. The Labor Arbiter held that the exclusion of his allowance for board, lodging and transportation
was not constructive dismissal, enunciating that the concept of non-diminution of benefits under Article 100 of the
Labor Code prohibits the elimination of benefits that are presently paid to workers to satisfy the requirements of
prevailing minimum wage rates. Since the benefit claimed by petitioner is beyond the coverage of the minimum wage
law, its non-inclusion in his re-assignment is not considered a violation. The Labor Arbiter also denied petitioners
claim for overload honorarium for failure to present sufficient evidence to warrant entitlement to the same. The claim
for damages was likewise denied.

Ruling of the National Labor Relations Commission

In a Decision dated August 25, 2005, the NLRC affirmed the findings of the Labor Arbiter that there was no
constructive dismissal. It ruled that the management decision to transfer petitioner was well within the rights of
respondents in consonance with petitioners contract of employment and which was not sufficiently shown to have been
exercised arbitrarily by respondents. It agreed with the Labor Arbiter that petitioners designation as Head for Education
was temporary for which he could not invoke any tenurial security. Further, the NLRC held that it was not proven with
certainty that the transfer would unduly prejudice petitioners financial situation. The NLRC, however, found petitioner
to be entitled to overload honorarium pursuant to CHED Memorandum Order No. 25 for having assumed the position
of Head for Education, albeit on a temporary basis. The NLRC disposed of the case as follows:
WHEREFORE, premises considered, the decision under review is hereby MODIFIED by ordering the respondent Data
Center College of the Philippines, to pay the complainant the sum of SEVENTY THREE THOUSAND SEVEN
THUNDRED [sic] THIRTY and 39/100 Pesos (P73,730.39), representing overload honorarium.
All other claims are DISMISSED for lack of merit.
SO ORDERED.
From this Decision, both parties filed their respective motion for partial reconsideration. Petitioner assailed the NLRC
Decision insofar as it dismissed his claims for reinstatement, backwages, damages and attorneys fees. Respondents, for
their part, questioned the NLRCs award of overload honorarium in favor of petitioner. These motions were denied by
the NLRC in a Resolution dated January 31, 2006.
Ruling of the Court of Appeals
Both parties filed petitions for certiorari before the CA. Respondents petition for certiorari was docketed as CA-G.R.
SP No. 94205, which is not subject of the instant review. On the other hand, petitioner filed on April 7, 2006, a Petition
for Certiorari[if with the CA docketed as CA-G.R. SP No. 93991 assailing the NLRCs finding that no constructive
dismissal existed. Realizing his failure to attach the requisite affidavit of service of the petition upon respondents,
petitioner filed on April 27, 2006, an Ex-Parte Manifestation and Motion[ ] to admit the attached affidavit of service and
registry receipt in compliance with the rules.
On May 15, 2006, the CA dismissed the petition in CA-G.R. SP No. 93991 in a Resolution which reads:
Petition is DISMISSED outright due to the following infirmities:
There is no statement of material dates as to when the petitioner received the assailed decision dated August 25, 2005
and when he filed a Motion for Reconsideration thereof; there is no affidavit of service attached to the petition;
initiatory pleadings and the respondents Motion for Reconsideration of the Decision dated August 25, 2005 are not
attached to the petition.
SO ORDERED.
Petitioner filed a Motion for Reconsideration alleging that the material dates of receipt of the NLRC Decision and the
filing of his motion for reconsideration are explicitly stated in his Partial Motion for Reconsideration which was
attached as an annex to the petition and was made an integral part thereof. As to the absence of the affidavit of service,
petitioner argued that there is no legal impediment for the belated admission of the affidavit of service as it was duly
filed before the dismissal of the petition. As for his failure to attach respondents motion for reconsideration, petitioner
manifested that a separate petition for certiorari has been filed by respondents and is pending with the CA, docketed as
CA-G.R. SP No. 94205, where the denial of said motion is at issue.
On August 4, 2006, the CA issued the following Resolution:
Due to non-compliance despite opportunity afforded to comply, petitioners June 9, 2006 Motion for Reconsideration is
hereby DENIED for lack of merit.
SO ORDERED.
Issues
Hence, this petition assigning the following errors:
THE HONORABLE COURT OF APPEALS PATENTLY COMMITTED REVERSIBLE ERROR IN DISMISSING THE
PETITION FOR CERTIORARI [UNDER RULE 65] OF THE PETITIONER BY GIVING PRECEDENT TO TECHNICALITIES
RATHER THAN THE MERITORIOUS GROUNDS ASSERTED THEREIN.
THE PUBLIC RESPONDENT, NATIONAL LABOR RELATIONS COMMISSION, SERIOUSLY ERRED IN ITS
CONSLUSIONS OF LAW IN RENDERING IT[S] ASSAILED DECISION AND RESOLUTION STATING THAT THE
PETITIONER WAS NOT CONSTRUCTIVELY DISMISSED, THUS, NOT ENTITLED TO REINSTATEMENT,
BACKWAGES, AND ATTORNEYS FEES.[if !supportFootnotes][25][endif]
Petitioner imputes grave abuse of discretion on the CA in not giving due course to his petition despite substantial
compliance with the requisite formalities as well as on the NLRC in not ruling that he was constructively dismissed by
respondents.
Our Ruling
Petitioners substantial compliance calls for the relaxation of the rules. Therefore, the CA should have given due course
to the petition.
The three material dates which should be stated in the petition for certiorari under Rule 65 are the dates
when the notice of the judgment was received, when a motion for reconsideration was filed and when the notice of the
denial of the motion for reconsideration was received. These dates should be reflected in the petition to enable the
reviewing court to determine if the petition was filed on time. Indeed, petitioners petition before the CA stated only the
date of his receipt of the NLRCs Resolution denying his motion for partial reconsideration. It failed to state when
petitioner received the assailed NLRC Decision and when he filed his partial motion for reconsideration. However, this
omission is not at all fatal because these material dates are reflected in petitioners Partial Motion for Reconsideration
attached as Annex N of the petition. In Acaylar, Jr. v. Harayo,[if we held that failure to state these two dates in the
petition may be excused if the same are evident from the records of the case. It was further ruled by this Court that the
more important material date which must be duly alleged in the petition is the date of receipt of the resolution of denial
of the motion for reconsideration. In the case at bar, petitioner has duly complied with this rule.
Next, the CA dismissed the petition for failure to attach an affidavit of service. However, records show that
petitioner timely rectified this omission by submitting the required affidavit of service even before the CA dismissed
his petition.
 Thirdly, petitioners failure to attach respondents motion for reconsideration to the assailed NLRC decision is
not sufficient ground for the CA to outrightly dismiss his petition. The issue that was raised in respondents motion for
reconsideration is the propriety of the NLRCs grant of overload honorarium in favor of petitioner. This particular issue
was not at all raised in petitioners petition for certiorari with the CA, therefore, there is no need for petitioner to
append a copy of this motion to his petition. Besides, as already mentioned, the denial of respondents motion for
reconsideration has been assailed by respondents before the CA docketed as CA-G.R. SP No. 94205. At any rate, the
Rules do not specify the documents which should be appended to the petition except that they should be relevant to the
judgment, final order or resolution being assailed. Petitioner is thus justified in attaching the documents which he
believed are sufficient to make out a prima facie case.[if !supportFootnotes][29][endif]
The Court has time and again upheld the theory that the rules of procedure are designed to secure and not to
override substantial justice. These are mere tools to expedite the decision or resolution of cases, hence, their strict and
rigid application which would result in technicalities that tend to frustrate rather than promote substantial justice must
be avoided. The CA thus should not have outrightly dismissed petitioners petition based on these procedural lapses.
Petitioners transfer is not tantamount to constructive dismissal.
Nevertheless, the instant petition merits dismissal on substantial grounds. After a careful review of the records and the
arguments of the parties, we do not find any sufficient basis to conclude that petitioners re-assignment amounted to
constructive dismissal.
Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable or unlikely, or
because of a demotion in rank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility
or disdain by an employer which becomes unbearable for the employee to continue his employment. [if
!supportFootnotes][32][endif]
Petitioner alleges that the real purpose of his transfer is to demote him to the rank of an instructor
from being the Head for Education performing administrative functions. Petitioner further argues that his re-assignment
will entail an indirect reduction of his salary or diminution of pay considering that no additional allowance will be
given to cover for board and lodging expenses. He claims that such additional allowance was given in the past and
therefore cannot be discontinued and withdrawn without violating the prohibition against non-diminution of benefits.
These allegations are bereft of merit.
Petitioner was originally appointed as instructor in 1991 and was given additional administrative functions as Head for
Education during his stint in Laoag branch. He did not deny having been designated as Head for Education in a
temporary capacity for which he cannot invoke any tenurial security. Hence, being temporary in character, such
designation is terminable at the pleasure of respondents who made such appointment.[if !supportFootnotes][33][endif] Moreover,
respondents right to transfer petitioner rests not only on contractual stipulation but also on jurisprudential authorities.
The Labor Arbiter and the NLRC both relied on the condition laid down in petitioners employment contract that
respondents have the prerogative to assign petitioner in any of its branches or tie-up schools as the necessity demands.
In any event, it is management prerogative for employers to transfer employees on just and valid grounds such as
genuine business necessity.[if !supportFootnotes][34][endif] It is also important to stress at this point that respondents have shown
that it was experiencing some financial constraints. Because of this, respondents opted to temporarily suspend the post-
graduate studies of petitioner and some other employees who were given scholarship grants in order to prioritize more
important expenditures.[if !supportFootnotes][35][endif]
Indeed, we cannot fully subscribe to petitioners contention that his re-assignment was tainted with bad faith.
As a matter of fact, respondents displayed commiseration over the health condition of petitioners father when they
suggested that he take an indefinite leave of absence to attend to this personal difficulty. Also, during the time when
respondents directed all its administrative officers to submit courtesy resignations, petitioners letter of resignation was
not accepted.[if !supportFootnotes][36][endif] This bolsters the fact that respondents never intended to get rid of petitioner. In fine,
petitioners assertions of bad faith on the part of respondents are purely unsubstantiated conjectures.
The Court agrees with the Labor Arbiter that there was no violation of the prohibition on diminution of benefits.
Indeed, any benefit and perks being enjoyed by employees cannot be reduced and discontinued, otherwise, the
constitutional mandate to afford full protection to labor shall be offended. [if !supportFootnotes][37][endif] But the rule against
diminution of benefits is applicable only if the grant or benefit is founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate.[if !supportFootnotes][38][endif]
Petitioner was granted a monthly allowance for board and lodging during his stint as instructor in UNP-Vigan, Ilocos
Sur as evinced in a letter dated June 6,
1992 with the condition stated in the following tenor:
Please be informed that during your assignment at our tie-up at UNP-VIGAN, ILOCOS SUR , you will be receiving a
monthly Board and Lodging of Pesos: One Thousand Two Hundred x x x (P1,200.00).
However, you are only entitled to such allowance, if you are assigned to the said tie-up and the same will be changed
or forfeited depending upon the place of your next reassignment.[if !supportFootnotes][39][endif] (Italics supplied.)
Petitioner failed to present any other evidence that respondents committed to provide the additional allowance or that
they were consistently granting such benefit as to have ripened into a practice which cannot be peremptorily
withdrawn. Moreover, there is no conclusive proof that petitioners basic salary will be reduced as it was not shown that
such allowance is part of petitioners basic salary. Hence, there will be no violation of the rule against diminution of pay
enunciated under Article 100 of the Labor Code.[if !supportFootnotes][40][endif]
WHEREFORE, the Resolutions dated May 15, 2006 and August 4, 2006 of the Court of Appeals in CA-G.R. SP No.
93991 are SET ASIDE. The Decision dated August 25, 2005 and Resolution dated January 31, 2006 of the National
Labor Relations Commission in NLRC Case No. RAB I-12-1242-03 (LC) insofar as it found respondents Data Center
College of the Philippines and Wilfred Bactad not liable for constructive dismissal, are AFFIRMED.

SO ORDERED.