Cooperative (CBPPWC) before they were hired and allowed to work at the On the first factor, (selection and
ction and engagement of the employer), it is
5. CERTIFICATION ELECTION
Sumifru (Philippines) Corp. Vs. Nagkahiusang
Mamumuo sa Suyapa Farm (Namasufa-Naflu-Kmu); G.R.
No. 202091; June 7, 2017
CAGUIOA, J:Before the Court is a Petition for Review on Certiorari[2] under
Rule 45 of the Rules of Court filed by petitioner Sumifiu (Philippines) Corp.
(Sumifru), assailing the Decision[3] dated February 8, 2012 and
Resolution[4] dated May 18, 2012 of the Court of Appeals (CA) in CA-G.R. SP
No. 03574. The CA affirmed the Resolution dated February 8, 2010 [5] of the
Secretary of the Department of Labor and Employment (DOLE) which, in
turn, affirmed the Order dated July 28, 2008 [6] of DOLE Regional Office No.
XI Circuit Mediator-Arbiter (Med-Arbiter), which ordered the conduct of
certification election of the rank-and-file employees of Sumifru in P-1
Upper Siocon, Compostela, Comval Province.
Facts
Sumifru is a domestic corporation and is the surviving corporation after its
merger with Fresh Banana Agricultural Corporation (FBAC) in 2008.
[7]
FBAC was engaged in the buying, marketing, and exportation of
Cavendish bananas.[8]
Respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA-
NAFLU-KMU) (NAMASUFA) is a labor organization affiliated with the
National Federation of Labor Unions and Kilusang Mayo Uno. [9]
The CA summarized the start of the proceedings with the Med-Arbiter as
follows:
On March 14, 2008, the private respondent Nagkahiusang Mamumuo sa
Suyapa Farm (NAMASUFA-NAFLU-KMU), a legitimate labor organization,
filed a Petition for Certification Election before the Department of Labor
and Employment, Regional Office No. XI in Davao City. NAMASUFA sought
to represent all rank-and-file employees, numbering around one hundred
forty, of packing plant 90 (PP 90) of Fresh Banana Agricultural Corporation
(FBAC). NAMASUFA claimed that there was no existing union in the
aforementioned establishment.
On May 9, 2008 FBAC filed an Opposition to the Petition. It argued that
there exists no employer-employee relationship between it and the
workers involved. It alleged that members of NAMASUFA are actually
employees of A2Y Contracting Services (A2Y), a duly licensed independent
contractor, as evidenced by the payroll records of the latter.
NAMASUFA, in its Comment to Opposition countered, among others, that its
members were former workers of Stanfilco before FBAC took over its
operations sometime in 2002. The said former employees were then
required to join the Compostela Banana Packing Plant Workers’
Packing Plant of FBAC. It further alleged that the members of NAMASUFA
were working at PP 90 long before A2Y came.
In June 20, 2008, pending resolution of the petition, FBAC was merged with
SUMIFRU, the latter being the surviving corporation. [10]
On July 28, 2008, the DOLE Med-Arbiter issued an Order granting the
Petition for Certification Election of NAMASUFA and declared that Sumifru
was the employer of the workers concerned. The dispositive portion of the
Order states:
WHEREFORE, premises considered, the petition for certification election
filed by Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA) – NAFLU –
KMU is hereby GRANTED. Let a certification election among the rank-and-
file workers of Fresh Banana Agricultural Corporation be onducted at the
company premises located at P-1 Upper Siocon, Compostela, Comval
Province with the following as choices:
1. Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA) –
NAFLU – KMU; and
2. No Union
Let the entire records of this case be forwarded to Comval Field Office, this
Department, for the usual pre-election conference.
The employer Fresh Banana Agricultural Corporation is
hereby DIRECTED to submit within five (5) days from receipt of this Order,
a certified list of the rank-and-file employees in the establishment or the
payrolls covering the members of the bargaining unit for the last three (3)
months prior to the issuance of this Order.
SO ORDERED.[11]
In ruling that an employer-employee relationship existed, the Med-Arbiter
stated:
The “four-fold test” will show that respondent FBAC is ·the employer of
petitioner’s members. The elements to determine the existence of an
employment relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee’s conduct. The most important
element is the employer’s control of the employee’s conduct, not only as to
the result of the work to be done, but also as to the means and methods to
accomplish it.
apparent that the staff of respondent FBAC advised those who are
interested to be hired in the Packing Plant to become members first of
CBPPWC and get a recommendation from it.
On the second factor (payment of wages), while the respondent tried to
impress upon us that workers are paid by A2Y Contracting Services, this at
best is but an administrative arrangement. We agree with petitioner that
the payroll summary submitted does not contain the relevant information
such as the employee’s rate of pay, deductions made and the amount
actually paid to the employee.
On the third factor, (the power of dismissal), it is very clear that respondent
FBAC is the authority that imposes disciplinary measures against erring
workers. This alone proves that it wields disciplinary authority over them.
Finally, on the fourth factor which is the control test, the fact that the
respondent FBAC gives instructions to the workers on how to go about
their work is sufficient indication that it exercises control over their
movements. The workers are instructed as to what time they are supposed
to report and what time they are supposed to return. They were required to
fill up monitoring sheets as they go about their jobs and even the materials
which they used in the packing plant were supplied by FBAC.
Viewed from the above circumstances, it is clear that respondent FBAC is
the real employer of the workers of Packing Plant 90. They are in truth and
in fact the employees of the respondent and its attempt to seek refuge on
A2Y Contracting Services as the ostensible employer was nothing but an
elaborate scheme to deprive them their right to self-organization. [12]
Sumifru appealed to the DOLE Secretary and in a Resolution dated
February 8, 2010, the DOLE Secretary dismissed the appeal, the dispositive
portion of which states:
WHEREFORE, considering the foregoing, the appeal is
hereby DISMISSED for lack of merit and the assailed Order dated 28 July
2008 of DOLE Regional Office No. XI Circuit Mediator-Arbiter Gerardine A.
Jamora is AFFIRMED.
Let the entire records of this case be remanded to the Regional Office of
origin for the immediate conduct of a certification election subject to the
usual pre-election conference.
SO RESOLVED.[13]
The DOLE Secretary ruled that Sumifru is the true employer of the workers,
as follows:
In the present case, it is undisputed that CBPPWC is supplying workers to
FBAC (now Sumifru). In fact, FBAC required its applicants to become
members of the cooperative first and seek recommendation from it before
hiring them. Appellant Sumifru failed to proffer evidence to prove that
CBPPWC is duly registered under Department Order No. 18-02. Also, it
does not appear on record that CBPPWC possesses substantial capital or
investment in relation with the work or services that are being performed
by its members and that the employees placed by CBPPWC in Sumifru are
performing activities distinct and independent from that of the main
business of Sumifru. As such, this Office is inclined to believe that CBPPWC
is engaged in labor-only contracting and the true employer of the subject
workers is Sumifru.
The alleged partnership agreement between CBPPWC and A2Y is of no
moment. It is well-settled that mere allegation without evidence to prove
the same is self-serving that should not be given weight in any proceedings.
Nonetheless, even if the alleged agreement indeed took place, the four-fold
test in determining the existence of an employer-employee relationship
still points to Sumifru as the employer.
xxxx
In this case, Sumifru’s control over the subject employees is evident. The
fact that the subject workers are required by Sumifru to fill up monitoring
sheets as they go about their jobs and the imposition of disciplinary actions
for non-compliance with the “No Helmet – No Entry and No ID – No Entry”
policies prove that it is indeed Sumifru, and not A2Y Contracting Services,
that exercises control over the conduct of the subject workers. [14]
Sumifru then filed a Petition for Certiorari with the CA raising the issue of
whether the DOLE Secretary committed grave abuse of discretion in
declaring it as the employer of the workers at PP 90. [15] But the CA
dismissed the petition. The dispositive portion of the CA Decision states:
WHEREFORE, finding no grave abuse of discretion on the part of the public
respondent, the petition is DENIED. The Resolution dated February 8, 2010
issued by the public respondent Honorable Secretary of the Department of
Labor and Employment is hereby AFFIRMED.
SO ORDERED.[16]
The CA ruled that the DOLE Secretary did not commit grave abuse of
discretion because the latter’s ruling that Sumifru was the employer of the
workers was anchored on substantial evidence, thus:
SUMIFRU raises the same issue of non-existence of employer-employee
relationship, which had been squarely resolved in the negative by the Med-
Arbiter and the DOLE Secretary. We find no traces of abuse in discretion in
the ruling of the DOLE Secretary anchored as it is on substantial evidence.
The Court has consistently applied the “four-fold test” to determine the
existence of an employer-employee relationship: the employer (a) selects
and engages the employee; (b) pays his wages; (c) has power to dismiss
him; and (d) has control over his work. Of these, the most crucial is the
element of control. Control refers to the right of the employer, whether
actually exercised or reserved, to control the work of the employee as well
as the means and methods by which he accomplishes the same.
In this case, the records are replete with evidence which would show that
SUMIFRU has control over the concerned workers, to wit:
1. FBAC memorandum on “Standardized Packing Plant
Breaktime”;
2. Material Requisition for PP 90;
3. Memorandum dated February 9, 2008 on “no helmet, no
entry” policy posted at the packing plant;
4. Memorandum dated October 15, 2007 on “no ID, no entry
policy”;
5. Attendance Sheet for General Assembly Meeting called by
FBAC on February 18[,] 2004;
6. Attendance Sheet for Packers ISO awareness seminar on
February 11, 2004 called by FBAC;
7. FBAC Traypan Fruit Inspection Packer’s Checklist issued
by FBAC for the use of workers in the Packing Plant;
8. FBAC KD Gluing Pattern Survey.
The above orders issued by SUMIFRU/FBAC would show that not only does
it have control over the results of the workers in PP 90 but also in the
manners and methods of its accomplishment. [17]
The CA, after reviewing the records, accorded respect to the findings of
facts of the DOLE Secretary, which affirmed the Med-Arbiter, as they have
special knowledge and expertise over matters under their jurisdiction. The
CA ruled:
As stated beforehand, there is no cogent reason to set aside the ruling of
the DOLE Secretary which affirmed the findings of the Med-Arbiter. By
reason of their special knowledge and expertise over matters falling under
their jurisdiction, they are in a better position to pass judgment thereon
and their findings of fact in that regard are generally accorded respect and
even finality by the courts when supported by substantial evidence, as in
this case.[18]
Sumifru moved for reconsideration but the CA denied this in its Resolution
dated May 18, 2012.
Hence, this Petition.
Issues
As stated in its Petition, Sumifru raised the following:
THE COURT OF APPEALS COMMITTED PALPABLE MISTAKE AND RULED
CONTRARY TO LAW AND SETTLED JURISPRUDENCE WHEN IT AFFIRMED
THE FINDINGS OF THE DOLE SECRETARY AND CONCLUDED THAT HEREIN
PETITIONER, SUMIFRU, IS THE EMPLOYER OF THE WORKERS ENGAGED
BY THE COOPERATIVE AND/OR A2Y FOR THE UPPER SIOCON GROWERS’
PACKAGING OPERATIONS IN PACKING PLANT 90.
1. A2Y Contracting Services was engaged either by the
Upper Siocon Growers or the Cooperative for the packing
operations at PP 90.
2. Even assuming, for the sake of argument, that the
Cooperative and/or A2Y are not legitimate labor
contractors, only the Upper Siocon Growers, and not
SUMIFRU, may be deemed the employer of the workers at
PP 90.
3. The Department of Labor and Employment committed
grave and palpable mistake when it grossly
misapprehended the facts and evidence on record, that if
properly appreciated will clearly establish that SUMIFRU
is not the employer of the members of NAMASUFA
working at PP 90.
4. The reliance on the alleged inconsistencies in the
pleadings submitted by SUMIFRU is misplaced as there
are no inconsistencies at all.[19] (Emphasis omitted)
The Court’s Ruling
The Petition is denied.
Sumifru’s arguments raise questions of facts. Indeed, it even submitted to
this Court, as annexes to its Petition, the very same evidence it had
presented before the Med-Arbiter, the DOLE Secretary, and the CA in its
attempt to try to convince the Court that the members of NAMASUFA are
not its employees.
It is fundamental that in a petition for review on certiorari, the Court is
limited to only questions of law. As specifically applied in a labor case, the
Court is limited to reviewing only whether the CA was correct in
determining the presence or absence of grave abuse of discretion on the
part of the DOLE Secretary. Thus, in Holy Child Catholic School v. Sto. Tomas,
[20]
the Court ruled:
Our review is, therefore, limited to the determination of whether the CA
correctly resolved the presence or absence of grave abuse of discretion in
the decision of the [Secretary of Labor and Employment (SOLE)], not on the
basis of whether the latter’s decision on the merits of the case was strictly
correct. Whether the CA committed grave abuse of discretion is not what is
ruled upon but whether it correctly determined the existence or want of
grave abuse of discretion on the part of the SOLE.[21]
In this regard, as held in Telefunken Semiconductors Employees Union-FFW
v. Court of Appeals, [22] findings of fact of quasi-judicial agencies are entitled
to great respect when they are supported by substantial evidence and, in
the absence of any showing of a whimsical or capricious exercise of
judgment, the factual findings bind the Court:
We take this occasion to emphasize that the office of a petition for review
on certiorari under Rule 45 of the Rules of Court requires that it shall raise
only questions of law. The factual findings by quasi-judicial agencies,
such as the Department of Labor and Employment, when supported
by substantial evidence, are entitled to great respect in view of their
expertise in their respective fields. Judicial review of labor cases does
not go so far as to evaluate the sufficiency of evidence on which the labor
official’s findings rest. It is not our function to assess and evaluate all over
again the evidence, testimonial and documentary, adduced by the parties to
an appeal, particularly where the findings of both the trial court (here, the
DOLE Secretary) and the appellate court on the matter coincide, as in this
case at bar. The Rule limits that function of the Court to the review or
revision of errors of law and not to a second analysis of the evidence. Here,
petitioners would have us re-calibrate all over again the factual basis and
the probative value of the pieces of evidence submitted by the Company to
the DOLE, contrary to the provisions of Rule 45. Thus, absent any
showing of whimsical or capricious exercise of judgment, and unless
lack of any basis for the conclusions made by the appellate court be
amply demonstrated, we may not disturb such factual findings.
[23]
(Emphasis supplied.)
Here, the CA was correct in finding that the DOLE Secretary did not commit
any whimsical or capricious exercise of judgment when it found substantial
evidence to support the DOLE Secretary’s ruling that Sumifru was the
employer of the members of NAMASUFA.
As defined, substantial evidence is “that amount of relevant evidence as a
reasonable mind might accept as adequate to support a conclusion, even if
other minds, equally reasonable, might conceivably opine
otherwise.”[24]Here, the Med-Arbiter found, based on documents submitted
by the parties, that Sumifru gave instructions to the workers on how to go
about their work, what time they were supposed to report for work,
required monitoring sheets as they went about their jobs, and provided the
materials used in the packing plant.[25]
In affirming the Med-Arbiter, the DOLE Secretary relied on the documents
submitted by the parties and ascertained that Sumifru indeed exercised
control over the workers in PP 90. The DOLE Secretary found that the
element of control was present because Sumifru required monitoring
sheets and imposed disciplinary actions for non-compliance with “No
Helmet – No Entry” “No ID – No Entry” policies.[26]
In turn, the CA, even as it recognized that the findings of facts of the DOLE
Secretary and the Med-Arbiter were binding on it because they were
supported by substantial evidence, even went further and itself reviewed
the records — to arrive, as it did arrive, at the same conclusion reached by
the DOLE Secretary and Med-Arbiter: that is, that Sumifru exercised control
over the workers in PP 90.[27]
In light of the foregoing, the Court cannot re-calibrate the factual bases of
the Med-Arbiter, DOLE Secretary, and the CA, contrary to the provisions of
Rule 45, especially where, as here, the Petition fails to show any
whimsicality or capriciousness in the exercise of judgment of the Med-
Arbiter or the DOLE Secretary in finding the existence of an employer-
employee relationship.
WHEREFORE, premises considered, the petition for review is
hereby DENIED. The Decision of the Court of Appeals dated February 8,
2012 and Resolution dated May 18, 2012 are hereby AFFIRMED.
6. CONSTRUCTIVE DISMISSAL
Constructive dismissal exists where there is cessation of work, because
‘continued employment is rendered impossible, unreasonable or unlikely,
as an offer involving a demotion in rank or a diminution in pay’ and other
benefits.
Sumifro vs. Baya
Facts
Baya filed an illegal/constructive dismissal against AMS Farming
Corporation (AMSFC) and Davao Fruits Corporation (DFC), before the
NLRC.
Baya was employed as a supervisor and joined the union of supervisors,
and eventually, formed AMS Kapalong Agrarian Reform Beneficiaries
Multipurpose Cooperative (AMSKARBEMCO), the basic agrarian reform
organization of the regular employees of AMSFC.
Baya was reassigned to a series of supervisory positions in AMSFC’s sister
company also joined the supervisory positions and became a member of
the latter’s supervisory union.
Later on and upon AMSKARBEMCO’s petition before the Department of
Agrarian Reform (DAR), some 220 hectares of AMSFC’s 513-hectare banana
plantation were covered by the Comprehensive Agrarian Reform Law.
Eventually, said portion was transferred to AMSFC’s regular employees as
Agrarian Reform Beneficiaries (ARBs), including Baya.
ARBs held a referendum in order to choose as to which group between
AMSKARBEMCO or SAFFPAI, an association of pro-company beneficiaries,
they wanted to belong. 280 went to AMSKARBEMCO while 85 joined
SAFFPAI.
When AMSFC learned that AMSKARBEMCO entered into an export
agreement with another company, it summoned AMSKARBEMCO officers,
including Baya, to lash out at them and even threatened them that the
ARBs’ takeover of the lands would not push through. Thereafter, Baya was
again summoned, this time by a DFC manager, who told the former that he
would be putting himself in a “difficult situation” if he will not shift his
loyalty to SAFFPAI; this notwithstanding, Baya politely refused to betray his
cooperative. A few days later, Baya received a letter stating that his
secondment with DFC has ended, thus, ordering his return to AMSFC.
However, upon Baya’s return to AMSFC on August 30, 2002, he was
informed that there were no supervisory positions available; thus, he
was assigned to different rank-and-file positions instead.
Baya filed a Complaint. LA ruled in Baya’s favor.
NLRC found that the termination of Baya’s employment was not caused by
illegal/ constructive dismissal, but by the cessation of AMSFC’s business
operation or undertaking in large portions of its banana plantation due to
the implementation of the agrarian reform program. Thus, the NLRC opined
that Baya is not entitled to separation pay as such cessation was not
voluntary, but rather involuntary, on the part of AMSFC as it was an act of
the State, i.e., the agrarian reform program, that caused the same.
Issues
Whether or not NLRC committed grave abuse of discretion;
Whether or not Abaya was constructive dismissal;
Whether or not AMSFC and DFC are liable to Baya for separation
pay, moral damages, and attorney’s fees;
Whether or not Sumifru should be held solidarily liable with
AMSFC’s for Baya’s monetary awards.
 Held Yes.“To justify the grant of the extraordinary remedy of certiorari, the
petitioner must satisfactorily show that the court or quasi-judicial
authority gravely abused the discretion conferred upon it. Grave abuse of
discretion connotes a capricious and whimsical exercise of judgment, done
in a despotic manner by reason of passion or personal hostility, the
character of which being so patent and gross as to amount to an evasion of
positive duty or to a virtual refusal to perform the duty enjoined by or to
act at all in contemplation of law.” Guided by the foregoing considerations,
the Court finds that the CA correctly ascribed grave abuse of discretion on
the part of the NLRC in reversing the LA ruling, as the LA’s finding that Baya
was constructively dismissed from employment is supported by substantial
evidence.
2. Yes. “Constructive dismissal exists where there is cessation of
work, because ‘continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank or a
diminution in pay’ and other benefits. Aptly called a dismissal in disguise or
an act amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part
of the employee that it could foreclose any choice by him except to forego
his continued employment.” In Peckson v. Robinsons Supermarket Corp., the
Court held that the burden is on the employer to prove that the transfer or
demotion of an employee was a valid exercise of management prerogative
and was not a mere subterfuge to get rid of an employee; failing in which,
the employer will be found liable for constructive dismissal, viz.:
In case of a constructive dismissal, the employer has the burden of proving
that the transfer and demotion of an employee are for valid and legitimate
grounds such as genuine business necessity. Particularly, for a transfer not
to be considered a constructive dismissal, the employer must be able to
show that such transfer is not unreasonable, inconvenient, or prejudicial to
the employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Failure of the employer to overcome
this burden of proof, the employee’s demotion shall no doubt be
tantamount to unlawful constructive dismissal.
In this case, a judicious review of the records reveals that the top
management of both AMSFC and DFC, which were sister companies at the
time, were well-aware of the lack of supervisory positions in AMSFC. This
notwithstanding, they still proceeded to order Baya’s return therein, thus,
forcing him to accept rank-and-file positions. Notably, AMSFC and DFC
failed to refute the allegation that Baya’s “end of secondment with DFC”
only occurred after: (a) he and the rest of AMSKARBEMCO officials and
members were subjected to harassment and cooperative busting tactics
employed by AMSFC and DFC; and (b) he refused to switch loyalties from
AMSKARBEMCO to SAFFPAI, the pro-company cooperative. In this relation,
the Court cannot lend credence to the contention that Baya’s termination
was due to the ARBs’ takeover of the banana plantation, because the said
takeover only occurred on September 20, 2002, while the acts constitutive
of constructive dismissal were performed as early as August 30, 2002,
when Baya returned to AMSFC. Thus, AMSFC and DFC are guilty of
constructively dismissing Baya.
Yes. Under the doctrine of strained relations, the payment of
separation pay is considered an acceptable alternative to reinstatement
when the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly oppressive
work environment. On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust.” 36 Thus, it is more prudent that Baya be awarded
separation pay, instead of being reinstated, as computed by the CA.
Further, and as aptly pointed out by both the LA and the CA, the acts
constitutive of Baya’s constructive dismissal are clearly tainted with bad
faith as they were done to punish him for the actions of his cooperative,
AMSKARBEMCO, and for not switching his loyalty to the pro-company
cooperative, SAFFPAI. This prompted Baya to litigate in order to protect his
interest and to recover what is properly due him. Hence, the award of moral
damages and attorney’s fees are warranted.
Yes. Finally, Sumifru’s contention that it should only be held liable
for the period when Baya stayed with DFC as it only merged with the latter
and not with AMSFC is untenable. Section 80 of the Corporation Code of the
Philippines clearly states that one of the effects of a merger is that the
surviving company shall inherit not only the assets, but also the liabilities
of the corporation it merged with, to wit:
Section 80. Effects of merger or consolidation. – The merger or
consolidation shall have the following effects:
The constituent corporations shall become a single corporation
which, in case of merger, shall be the surviving corporation designated in
the plan of merger; and, in case of consolidation, shall be the consolidated
corporation designated in the plan of consolidation;
The separate existence of the constituent corporations shall cease,
except that of the surviving or the consolidated corporation;
The surviving or the consolidated corporation shall possess all the
rights, privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under this Code;
The surviving or the consolidated corporation shall thereupon
and thereafter possess all the rights, privileges, immunities and franchises
of each of the constituent corporations; and all property, real or personal,
and all receivables due on whatever account, including subscriptions to
shares and other choses in action, and all and every other interest of, or
belonging to, or due to each constituent corporation, shall be deemed
transferred to and vested in such surviving or consolidated corporation
without further act or deed; and
The surviving or consolidated corporation shall be responsible
and liable for all the liabilities and obligations of each of the constituent
corporations in the same manner as if such surviving or consolidated
corporation had itself incurred such liabilities or obligations; and any
pending claim, action or proceeding brought by or against any of such
constituent corporations may be prosecuted by or against the surviving or
consolidated corporation. The rights of creditors or liens upon the property
of any of such constituent corporations shall not be impaired by such
merger or consolidation.
In this case, it is worthy to stress that both AMSFC and DFC are guilty of
acts constitutive of constructive dismissal performed against Baya. As such,
they should be deemed as solidarily liable for the monetary awards in favor
of Baya. Meanwhile, Sumifru, as the surviving entity in its merger with DFC,
must be held answerable for the latter’s liabilities, including its solidary
liability with AMSFC arising herein. Verily, jurisprudence states that “in the
merger of two existing corporations, one of the corporations survives and
continues the business, while the other is dissolved and all its rights,
properties and liabilities are acquired by the surviving corporation,” as in
this case.
7. AKOANG CASE- EE TO PROVE DISMISSAL
8. ENTITLED TO SEPARATION &
RETIREMENT PAY
Goodyear Phils., Inc. v. Angus
DOCTRINE:
Retirement benefits and separation pay are not mutually
exclusive. Retirement benefits are a form of reward for
anemployee’s loyalty and service to an employer, whereas
separation pay is that amount which an employee receives at
the time of his severance from employment, designed to
provide the employee with the wherewithal during the
period that he is looking for another employment.
PETITIONERS:
Goodyear Philippines, Inc.; Remegio M. Ramos
RESPONDENT:
Marina L. Angus
SUMMARY:
When Goodyear experienced economic reversals, it resorted to
the retrenchment of certain employees in order tocontinue its
operations. One such employee is Marina, and she was granted
an early retirement benefit, as per company practice.However,
she claimed entitled to separation pay in addition to the
retirement benefits already received.
FACTS:
1.19 November 1966: Marina was employed by Goodyear
on November 19, 1966 as the secretary to the Manager ofQuality and
Technology. 2.
Goodyear experienced economic reversals. To continue
itsoperations, it resorted to retrenchment. 3.
18 September 2001: Marina received a letter
from RemegioRamos, HR Director, stating that management
consideredher position redundant and no longer necessary and
is to beabolished on the same day, with her services to
beterminated after a month. Per company practice, thecompany
only granted her an early retirement benefit. 4.
Marina claims that she is entitled to separation pay inaddition
to retirement benefits. 5.
Goodyear points to a provision in their CBA stating thatthe
availment of retirement benefits therein shall
excludeentitlement to any separation pay, termination
pay,redundancy pay, retrenchment pay, or any other
severance pay.6.
The parties finally agreed that an employee shall be entitled to
the higher of either benefit. However, Marina later contested
this.
ISSUE:
WON Marina is entitled to both retirement benefits and
separation pay.
RATIO:
Labor Law; Retirement Benefits; Separation Pay; Retirementbenefits and
separation pay are not mutually exclusive.
—It is worthy to mention at this point that retirement benefits
and separation pay are not mutually exclusive. Retirement
benefits are a form of reward for an employee’s loyalty and
service to an employer and are earned under existing laws,
CBAs,employment contracts and company policies. On the other
hand, separation pay is that amount which an employee
receives at the time of his severance from employment,
designed to provide the employee with the wherewithal during
the period that he is looking for another employment and is
recoverable only in instances enumerated under Articles 283
and 284 of the Labor Code or in illegal dismissal cases when
reinstatement is not feasible. In the case at bar, Article 283
clearly entitles Angus to separation pay apart from the
retirement benefits she received from petitioners.
PETITIONERS:
Goodyear Philippines, Inc.; Remegio M. Ramos
RESPONDENT:
Marina L. Angus
SUMMARY:
When Goodyear experienced economic reversals, it resorted to
the retrenchment of certain employees in order to continue its
operations. One such employee is Marina, and she was granted
an early retirement benefit, as per company practice. However,
she claimed entitled to separation pay in addition to the
retirement benefits already received.
DOCTRINE:
Retirement benefits and separation pay are not mutually
exclusive. Retirement benefits are a form of reward for an
employee’s loyalty and service to an employer, whereas
separation pay is that amount which an employee receives at
the time of his severance from employment, designed to
provide the employee with the wherewithal during the
period that he is looking for another employment.
9. ESSENTIAL AND CONFIRMATORY ELEMENT
W.M. MANUFACTURING, INC., v. RICHARD R. DALAG AND GOLDEN
ROCK MANPOWER SERVICES
G.R. No. 209418, December 07, 2015VELASCO JR., J.
Section 5 of DO 18-02 laid down the criteria in determining
whether or not labor-only contracting exists between two parties,
as
Section 5. Prohibition against labor-only contracting. Labor-only
contracting is hereby declared prohibited. For this purpose, labor-
only contracting shall refer to an arrangement where the
contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any
of the following elements are present:chanRoblesvirtualLawlibrary
The contractor or subcontractor does not have
substantial capital or investment which relates to the job,
work or service to be performed and the employees
recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly
related to the main business of the principal; or
the contractor does not exercise the right to control over
the performance of the work of the contractual
employee.
It is clear from the above section that the essential element in
labor-only contracting is that the contractor merely recruits,
supplies or places workers to perform a job, work or service for a
principal. However, the presence of this essential element is not
enough and must, in fact, be accompanied by any one of the
confirmatory elements to be considered a labor-only contractor
58
within the contemplation of the rule.
The presence of the essential element in the extant case cannot be
gainsaid. This much is clearly provided in the service agreement
between WM MFG and Golden Rock:
The CONTRACTOR shall render, undertake, perform and employ
the necessary number of workers as the CLIENT may need,
at such dates and times as the CLIENT may deem necessary.
As to the presence of the confirmatory elements, Dalag draws our
attention to (1) Golden Rock's lack of substantial capital, coupled
with the necessity and desirability of the job he performed in WM
MFG; and (2) Golden Rock's lack of control over the employees it
supplied WM MFG.
i. Golden Rock lacked substantial capital
Anent the first confirmatory element, petitioner and Golden Rock
refuted the latter's alleged lack of substantial capital by presenting
its Certificate of Registration from the DOLE Regional Office in
Valenzuela City. Although not conclusive proof of legitimacy as a
manpower provider, the certification nevertheless prevented the
59
presumption of labor-only contracting from arising. In its stead,
the certification gave rise to a disputable presumption that the
follows:
contractor's operations are legitimate. As provided in Gallego v.
 60
Bayer Philippines, Inc.:
The DOLE certificate having been issued by a public officer, it
carries with it the presumption that it was issued in the regular
performance of official duty. Petitioners bare assertions fail to
rebut this presumption. Further, since the DOLE is the agency
primarily responsible for regulating the business of independent
job contractors, the Court can presume, in the absence of evidence
to the contrary, that it had thoroughly evaluated the requirements
submitted by PRODUCT IMAGE before issuing the Certificate of
Registration. x x x
Among the requirements for registration is a copy of the
contractor's audited financial statements, if the applicant is a
corporation, partnership, cooperative or a union, or a copy of the
latest income tax return if the applicant is a sole
61
proprietorship. Upon submission of the requirements, the DOLE
Regional Director concerned will then have seven (7) days to
evaluate the information supplied and determine whether the
application ought to be approved or denied. Since Golden Rock's
application was approved, both petitioner and respondent company
claimed that the DOLE Regional Office found Golden Rock's
capitalization to be satisfactory and substantial, contrary to Dalag's
claim.
Petitioner and Golden Rock's claim fails to convince.
It may be that the DOLE Regional Director for the National Capital
Region was satisfied by Golden Rock's capitalization as reflected on
its financial documents, but the basis for determining the
substantiality of a company's "capital" rests not only thereon but
also on the tools and equipment it owns in relation to the job,
work, or service it provides. DO 18-02 defines "substantial capital
or investment" in the context of labor-only contracting as referring
not only to a contractor's financial capability, but also
encompasses the tools, equipment, implements, machineries and
work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or
62
service contracted out.
Here, the Certificate of Registration may have prevented the
presumption of labor-only contracting from arising, but the
evidence Dalag adduced was sufficient to overcome the disputable
presumption that Golden Rock is an independent contractor. To be
sure, in performing his tasks, Dalag made use of the raw materials
and equipment that WM MFG supplied. He also operated the side-
seal machine in the workplace of WM MFG, not of Golden Rock.
With these attendant circumstances, the Court rules that the first
confirmatory element indubitably exists.
ii. WM MFG exercised control over the employees supplied by
Golden Rock
As to the second confirmatory element (i.e. control), petitioner
argues that the Service Agreement it forged with Golden Rock
specifically provides that the latter exclusively exercises control
over the employees it assigns to WM MFG. What is more, it is
Golden Rock who paid for Dalag's salaries and wages, a badge of
their employer-employee relation.
Petitioner's claim does not persuade.
The second confirmatory element under DO 18-02 does not require
the application of the economic test and, even more so, the four-
fold test to determine whether or not the relation between the
parties is one of labor-only contracting. All it requires is that the
contractor does not exercise control over the employees it
supplies, making the control test of paramount consideration. The
fact that Golden Rock pays for Dalag's wages and salaries then has
no bearing in resolving the issue.
Under the same DO 18-02, the "right to control" refers to the right
to determine not only the end to be achieved, but also the manner
63
and means to be used in reaching that end. Here,
notwithstanding the contract stipulation leaving Golden Rock the
exclusive right to control the working warm bodies it provides WM
MFG, evidence irresistibly suggests that it was WM MFG who
actually exercised supervision over Dalag's work performance. As
culled from the records, Dalag was supervised by WM MFG's
employees. Petitioner WM MFG even went as far as furnishing
Dalag with not less than seven (7) memos directing him to explain
64
within twenty-four (24) hours his alleged work infractions. The
company likewise took pains in issuing investigation reports
65
detailing its findings on Dalag's culpability. Clearly, WM MFG took
it upon itself to discipline Dalag for violation of company rules,
regulations, and policies, validating the presence of the second
confirmatory element.
Having ascertained that the essential element and at least one
confirmatory element obtain in the extant case, there is then no
other result than for the Court to rule that WM MFG and Golden
Rock engaged in labor-only contracting. As such, they are, by legal
fiction, considered principal and agent, respectively, jointly and
severally liable to their illegally dismissed employees, in
66
accordance with Art. 109 of the Labor Code and Sec. 19 of DO
67
18-02.
We stress, however, that this finding of labor-only contracting does
not preclude the Court from re-examining, in future cases, the
nature of the contractual relationship between WM MFG and
Golden Rock under Department Order No. 18-A, series of 2011,
which redefined the parameters of legitimate service contracting,
private recruitment and placement services, and labor-only
contracting.
10. FLOATING STATUS
SOLIMAN SECURITY SERVICES, INC. AND TERESITA L.
SOLIMAN, Petitioners, v. IGMEDIO C. SARMIENTO, JOSE
JUN CADA AND ERVIN R. ROBIS, Respondents.
This is a Petition for Review on Certiorari1 under Rule 45 of the
Rules of Court, assailing the Decision 2dated 27 August 2010
and the Resolution3 dated 25 November 2010 of the Court of
Appeals in CA-G.R. SP No. 110905, which affirmed the 2 June
2009 Decision4 of the National Labor Relations Commission
(NLRC) declaring respondents Igmedio C. Sarmiento
(Sarmiento), Jose Jun Cada (Cada), and Ervin R. Robis (Robis)
to have been illegally dismissed from employment.
The Antecedent Facts
This case stemmed from a complaint filed by respondents
against petitioners Soliman Security Services, Inc. (the
agency) and Teresita L. Soliman (Teresita) for illegal dismissal;
underpayment of salaries, overtime pay and premium pay for
holiday and rest day; damages; attorney's fees; illegal
deduction and non-payment of ECOLA.
Respondents were hired as security guards by petitioner
Soliman Security Services, Inc. and were assigned to Interphil
Laboratories, working seven (7) days a week for twelve (12)
straight hours daily. Respondents alleged that during their
employment - from May 1997 until January 2007 for Robis and
from May 2003 until January 2007 for Sarmiento and Cada —
they were paid only P275.00 a day for eight (8) hours of work
or P325.00 for twelve (12) hours of work but were not paid
ECOLA, night shift differentials, holiday pay, as well as rest day
premiums. For cash bond and mutual aid contributions, the
amounts of P400.00 and P100.00, respectively, were deducted
from their salaries per month. Respondents claimed that they
sought a discussion of the nonpayment of their benefits with
petitioner Teresita Soliman but the latter refused to take heed
and told them to tender their resignations instead. According to
respondents, on 21 January 2007, they received an order
relieving them from their posts and since then, they were not
given any assignments.
On the other hand, the agency's version of the story hinges on
an alleged placement of the respondents under a "floating
status." The agency admitted relieving the respondents from
duty on 20 January 2007 but insists that the same was only
done pursuant to its contract with client Interphil Laboratories.
To support this claim, petitioners presented a standing
contract5 with Astrazeneca Pharmaceuticals, Interphil's
predecessor-in-interest. The contract contained stipulations
pertaining to the client's policy of replacing guards on duty
every six (6) months without repeat assignment. The agency
further posits that respondent guards were directed several
times to report to the office for their new assignments but they
failed to comply with such directives.
A review of the records reveals the following timeline: (1) on
20 January 2007, the agency sent respondents notices
informing them that they were being relieved from their
current posts pursuant to a standing contract with Interphil
Laboratories6 with directives for respondents to report to the
office for their new assignments; (2) on 7 February 2007, the
agency sent another letter addressed to Robis, directing him to
report to the office for his new assignment; 7 (3) on 22
February 2007, the first complaint for illegal dismissal was filed
with the Labor Arbiter;8 (4) on 26 March 2007, a hearing
before the Executive Labor Arbiter was conducted, where
petitioner agency's representative presented respondents an
offer to return to work;9 (5) the agency sent respondents
letters dated 2410 and 2611April 2007, directing them to clarify
their intentions as they have not been reporting to seek new
assignments; (6) on 3 August 2007, respondents filed a
Supplemental Complaint,12 the purpose of which was to
anticipate the possibility that the agency might set up the
defense of pre-maturity of filing of the constructive dismissal
complaint; (7) respondents executed their respective complaint
affidavits on 8 August 2007; 13 (8) and finally after the parties
submitted their respective position papers, the Executive Labor
Arbiter rendered a decision on 4 January 2008. 14chanrobleslaw
Finding that respondents' failure to comply with the
Memoranda amounted to abandonment, the Labor Arbiter
dismissed the complaint. 15 The Labor Arbiter concluded that
there can be no dismissal to speak of, much less an illegal
dismissal. On appeal, the NLRC reversed the 4 January 2008
decision of the the Executive Labor Arbiter, ultimately finding
respondents to have been illegally dismissed. The NLRC ruled
that the letters directing respondents to "clarify their
intentions" were not in the nature of return-to-work orders,
which may effectively interrupt their floating status. The NLRC
observed that the Memoranda received by respondents were
but mere afterthoughts devised after the case for illegal
dismissal was filed. The NLRC also put the agency to task for
failing to traverse the guards' averment that there were other
employee-guards who stayed with the same client beyond the
six-month term imposed.
Aggrieved, the petitioners brought the case to the Court of
Appeals, asking the court to issue an extraordinary writ
of certiorari to reverse the NLRC decision. Reiterating that the
agency had no legitimate reasons for placing respondents on
prolonged floating status, the appellate court affirmed the
decision of the NLRC. The dispositive portion of the NLRC
decision reads:ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the decision of the
Executive Labor Arbiter Fatima Jambaro-Franco dated 4
January 2008 is reversed and set aside and a new one is
rendered ordering [petitioners] to pay [respondents] the
following:
chanRoblesvirtualLawlibrary1. Backwages from 21 January
2007 until finality of this Decision;
2. Separation pay equivalent to one-month salary for every
year of service from the date of employment as appearing in
the complaint also up to finality of this Decision;
and cralawlawlibrary
3. Salary differentials for the period not yet barred by
prescription.
All other claims are dismissed for lack of
merit.16chanroblesvirtuallawlibrary
Petitioners sought a reconsideration of the decision but the
appellate court denied the same. Hence, this Petition for
Review on Certiorari.
Our Ruling
After a careful evaluation of the records of the case, this Court
finds no reversible error in the NLRC decision as affirmed by
the Court of Appeals. The petition is denied for lack of merit.
Placement on floating status as a management
prerogative
The Court is mindful of the fact that most contracts for services
stipulate that the client may request the replacement of
security guards assigned to it. 17 Indeed, the employer has the
right to transfer or assign its employees from one area of
operation to another, "provided there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the
transfer is not motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without
sufficient cause."18 During that period of time when they are in
between assignments or when they are made to wait for new
assignments after being relieved from a previous post, guards
are considered on temporary "off-detail" or under "floating
status". It has long been recognized by this Court that the
industry practice of placing security guards on floating status
does not constitute dismissal, as the assignments primarily
depend on the contracts entered into by the agency with third
parties19 and the same is a valid exercise of management
prerogative. However, such practice must be exercised in good
faith and courts must be vigilant in assessing the different
situations, especially considering that the security guard does
not receive any salary or any financial assistance provided by
law when placed on floating status. 20chanrobleslaw
Constructive Dismissal
Though respondents were not per se dismissed on 20 January
2007 when they were ordered relieved from their posts, we
find that they were constructively dismissed when they were
not given new assignments. As previously mentioned, placing
security guards under floating status or temporary off-detail
has been an established industry practice. It must be
emphasized, however, that they cannot be placed under
floating status indefinitely; thus, the Court has applied Article
29221 (formerly Article 286) of the Labor Code by analogy to
set the specific period of temporary off-detail to a maximum of
six (6) months.22 It must also be clarified that such provision
does not entitle agencies to retain security guards on floating
status for a period of not more than six (6) months for
whatever reason. Placing employees on floating status requires
the dire exigency of the employer's bona fide suspension of
operation. In security services, this happens when there is a
surplus of security guards over available assignments as when
the clients that do not renew their contracts with the security
agency are more than those clients that do. 23chanrobleslaw
The crux of the controversy lies in the consequences of the
lapse of a significant period of time without respondents having
been reassigned. Petitioner agency faults the respondents for
their repeated failure to comply with the directives to report to
the office for their new assignments. To support its argument,
petitioner agency submitted in evidence notices addressed to
respondents, which read:ChanRoblesVirtualawlibrary
You are directed to report to the undersigned to clarify your
intentions as you have not been reporting to seek a new
assignment after your relief from Interphil.
To this date, we have not received any update from
you neither did you update your government requirements x x
x
We are giving you up to May 10, 2007 to comply or we will be
forced to drop you from our roster and terminate your services
for abandonment of work and insubordination.
Consider this our final warning.24 (Emphasis ours)
As for respondents, they maintain that the offers of new
assignments were mere empty promises. Respondents claim
that they have been reporting to the office for new
assignments only to be repeatedly turned down and ignored by
petitioner's office personnel.25cralawredchanrobleslaw
We rule that such notices were mere afterthoughts. The notices
were allegedly sent to respondents on 24 and 26 April 24
2007, a month after the hearing before the Executive Labor
Arbiter. By the time the notices were sent, a complaint for
illegal dismissal with a prayer for reinstatement was already
filed. In fact, the agency, through its representative, already
had the chance to discuss new assignments during the hearing
before the Labor Arbiter. Instead of taking the opportunity to
clarify during the hearing that respondents were not dismissed
but merely placed on floating status and instead of specifying
details about the available new assignments, the agency
merely gave out empty promises. No mention was made
regarding specific details of these pending new assignments. If
respondent guards indeed had new assignments awaiting
them, as what the agency has been insinuating since the day
respondents were relieved from their posts, the agency should
have identified these assignments during the hearing instead of
asking respondents to report back to the office. The agency's
statement in the notices - that respondents have not clarified
their intentions because they have not reported to seek new
assignments since they were relieved from their posts - is
specious at best. As mentioned, before these notices were sent
out, a complaint was already filed and a hearing before the
Labor Arbiter had already been conducted. The complaint
clarified the intention of respondents. Indeed, respondents'
complaint for illegal dismissal with prayer for reinstatement is
inconsistent with the agency's claim that respondents did not
report for reassignment despite the notices directing them to
do so. It is evident that the notices sent by the agency were
mere ostensible offers for new assignments. It was intended to
cover the illegality of the termination of respondents'
employment.
Lack of service agreement for a continuous period of 6
months as an authorized cause for termination
It is significant to note that had the reason for such failure to
reassign respondents been the lack of service agreements for a
continuous period of six (6) months, petitioner agency could
have exercised its right to terminate respondents for an 4. Lack of service assignment for a continuous
authorized cause upon compliance with the procedural period of 6 months. (Emphasis and underlining
requirements. supplied)
On this score, Department Order No. 14, Series of 2001 26 (DO xxxx
14-01) of the Department of Labor and Employment is It bears stressing that the only time a prolonged floating status
instructive. Section 9.3 of the same is considered an authorized cause for dismissal is when the
provides:ChanRoblesVirtualawlibrary security agency experiences a surplus of security guards
9.3 Reserved status - x x x brought about by lack of clients.27 We quote with approval the
pertinent portion of the NLRC's decision as affirmed by the
x x x x appellate court, to wit:ChanRoblesVirtualawlibrary
Being placed on floating status is only legitimate when
If after a period of 6 months, the security agency/employer guaranteed by bona fide business exigencies. In security
cannot provide work or give assignment to the reserved services, this happens when there is a surplus of security
security guard, the latter can be dismissed from service and guards over available assignments as when the clients that do
shall be entitled to separation pay as described in subsection not renew their contracts with the security agency are more
6.5 than those clients that do x x x.28chanroblesvirtuallawlibrary
Otherwise stated, absent such justification, the placing of a
xxxx security guard on floating status is tantamount to constructive
In relation thereto, Section 6.5 of DO 14-01 treats such lack of dismissal. And, when the floating status is justified, the lapse
service assignment for a continuous period of six (6) months of a continuous period of six (6) months results in an
as an authorized cause for termination of employment entitling authorized cause for termination of employment, the security
the security guard to separation pay, to guard being entitled, however, to separation pay.
wit:ChanRoblesVirtualawlibrary
6.5 Other Mandatory Benefits. In appropriate cases, security As for the procedural aspect, employer agencies must be
guards/similar personnel are entitled to the mandatory benefits reminded that to validly terminate a security guard for lack of
as listed below, although the same may not be included in the service assignment for a continuous period of six months, the
monthly cost distribution in the contracts, except the required agency must comply with the provisions of Article 289
premiums form their coverage: (previously Art. 283) of the Labor Code, 29 "which mandates
that a written notice should be served on the employee on
a. Maternity benefit as provided under SS Law; temporary off-detail or floating status and to the DOLE one (1)
month before the intended date of termination." 30 Sec. 9.2 of
b. Separation pay if the termination of employment is DO 14-01 provides for a similar procedure, to
for authorized cause as provided by law and as wit:ChanRoblesVirtualawlibrary
enumerated below: 9.2 Notice of Termination - In case of termination of
employment due to authorized causes provided in Article 283
and 284 of the Labor Code and in the succeeding subsection,
Half-Month Pay Per Year of Service, but in no case less than
One Month Pay if separation pay is due to: the employer shall serve a written notice on the security
guard/personnel and the DOLE at least one (1) month before
the intended date thereof.
1. Retrenchment or reduction of personnel effected by It cannot be denied that the placement of security guards on
management to prevent serious losses; floating status may be subject to abuse by agencies,
considering that they are not obliged to pay the security
2. Closure or cessation of operation of an establishment guards while placed on floating status. Recognizing the
not due to serious losses or financial reverses; jurisprudence elaborating on the application of DO 14-01, we
now provide a summary as follows:
3. Illness or disease not curable within a period of 6
months and continued employment is prohibited by law chanRoblesvirtualLawlibraryThe floating status period, wherein
or prejudicial to the employee's health or that of co- the security guards are not paid, should not last longer than six
employees; (6) months as provided by law. Before the lapse of six (6)
months, the agency should have recalled the security guard for
a new assignment. If the agency failed to do so due to the lack
of service agreements for a continuous period of six (6)
months, an authorized cause for dismissal as per DO 14-01,
the security guard may be considered permanently retrenched
and validly dismissed upon compliance with the procedural
requirements laid down by the Department Order and the
Labor Code.31 It must be emphasized however, that in order for
the dismissal to be valid and in order for the employer agency
to free itself from any liability for illegal dismissal, the
justification for the failure to reassign should be the lack of
service agreements for a continuous period of six (6) months,
aside from the other authorized causes provided by the Labor
Code. Corollarily, placing the security guard on floating status
in bad faith, as when there is failure to reassign despite the
existence of sufficient service agreements will make the
employer agency liable for illegal dismissal. In such cases,
there is no bona fide business exigency which calls for the
temporary retrenchment or laying-off of the security guards.
Lastly, if six (6) months have already lapsed and the employer
agency failed to either (a) reassign the security guard or (b)
validly dismiss and give him/her the corresponding separation
pay, the security guard may be considered to have been
constructively dismissed.32chanrobleslaw
On the finding that respondents are entitled to their
money claims
In its decision, the Court of Appeals discussed how the NLRC
might have erred in its computations of the wages received by
the private respondents. However, despite such observation,
the appellate court dismissed the petition for certiorari,
ultimately holding that the NLRC based its decision on all the
evidence presented, with nary an abuse of the exercise of its
discretion. The appellate court found that petitioners failed to
discharge their burden of showing at least an abuse of
discretion on the part of the NLRC, when the latter found that
the security guards were underpaid. Petitioners now fault the
appellate court for affirming the NLRC decision declaring them
liable for private respondents' monetary claims.
Petitioners' contention is bereft of merit
In petitioners' Motion for Reconsideration of the NLRC decision,
they invested heavily in the argument about the validity of the
dismissal, stating only briefly in the penultimate paragraph
their manifestation to reserve a purported right to submit
additional evidence in a supplemental pleading, if necessary to
strengthen their arguments regarding the award of monetary
claims. The Court of Appeals correctly ruled that such scheme
subverts the reglementary periods established by law and
more significantly, the NLRC would no longer have the
opportunity to correct itself, assuming errors, since the Motion
for Reconsideration filed before it did not detail the
computations regarding monetary benefits. Said computations
were only subsequently raised in their petition before the
appellate court.
In the Court of Appeals, petitioners adopted a similar scheme.
In their Petition for Certiorari, they did not anymore dispute
the NLRC's determinations as to the monetary aspects.
Instead, their arguments on the alleged issue of monetary
awards were inserted in their Reply to Comment pleading. The
Court of Appeals correctly ruled that such scheme contradicts
elementary due process as the arguments raised were not
dealt with in the comment the Reply supposedly responds to.
From the foregoing, it is quite obvious that the NLRC may not
be faulted for relying on the evidence presented before it when
it made its computations for underpayment. Neither may the
appellate court be faulted for declaring that the NLRC did not
abuse its discretion. The task of resolving the issue on
monetary claims, purely factual, properly pertains to the NLRC
as the quasi-judicial appellate body to which these documents
were presented to review the arbiter's ruling. 33 The appellate
court correctly ruled that the usual appeal in labor cases is
exhausted after the NLRC has decided. Petitioner cannot fault
the Court of Appeals in affirming the NLRC decision despite the
alleged computational error as the special civil action
of certiorari is a remedy to correct errors of jurisdiction and not
mere errors of judgment. Consequently, an error of judgment
that the court may commit in the exercise of its jurisdiction is
not correctable through the original civil action of certiorari.
The present petition is a Rule 45 petition reviewing a Rule 65
ruling of the Court of Appeals. This Court's jurisdiction is thus
limited to errors of law which the appellate court might have
committed in its Rule 65 ruling. 34 In essence, in ruling for legal
correctness, "we have to view the CA's decision in the same
context that the petition for certiorari it ruled upon was
presented to it; we have to examine the CA decision from the
prism of whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC decision
before it, not on the basis of whether the NLRC decision on the
merits of the case, was correct."35 After a meticulous review of
the facts of the case, the records, relevant laws and
jurisprudence, we rule that the Court of Appeals correctly
determined that the NLRC did not abuse its discretion when it
held that respondents were constructively dismissed and
entitled to their monetary claims.
WHEREFORE, the petition is DENIED. The assailed 27 August
2010 Decision and 25 November 2010 Resolution of the Court
of Appeals in CA-G.R. SP No. 110905 are AFFIRMED.
Accordingly, petitioners Soliman Security Services, Inc. and
Teresita L. Soliman are hereby ORDERED to pay respondents
Igmedio C. Sarmiento, Jose Jun Cada, and Ervin R. Robis, to
wit:
1. Backwages from 21 January 2007 until finality of this
decision;
2. Separation pay equivalent to one-month salary for
every year of service from the date of employment as
appearing in the complaint also up to finality of this
decision; and cralawlawlibrary
3. Salary differentials for the period not yet barred by
prescription.
All other claims are dismissed for lack of merit.
SO ORDERED.chanRoblesvirtualLawlibrary
11. INDEPENDENT
CONTRACTOR DEFINED
To determine the existence of independent contractorship,
it is necessary to establish that the contractor carries a
distinct and independent business, and undertakes to
perform work on its own account and under its
responsibility and pursuant to its own manner and method,
without the control of the principal, except as to the result;
that the contractor has substantial capital or investment;
and, that the agreement between the principal and the
contractor assures the contractual employees to all labor
and occupational safety and health standards, to right to
74
self-organization, security of tenure and other benefits.
G.R. No. 202215, December 09, 2015
VICMAR DEVELOPMENT CORPORATION VS CAMILO
ELARCOSA
Before us is a Petition for Review on Certiorari assailing the
November 24, 2009 Decision9 of the Court of Appeals (CA) in CA-
G.R SP No. 01853-MN. The CA granted the Petition
for Certiorari filed therewith, and reversed and set aside the
February 2, 200710 Resolution of the National Labor Relations
Commission (NLRC), Fifth Division, Cagayan de Oro, which in turn,
affirmed the May 25, 200611 and May 29, 200612respective
Decisions of Executive Labor Arbiters (LA) Benjamin E. Pelaez
(Pelaez) and Noel Augusto S. Magbanua (Magbanua) dismissing
the complaints for lack of merit. Also assailed is the May 10, 2012
CA Resolution13 denying the motion for reconsideration.
Factual Antecedents
This case stemmed from a Complaint for illegal dismissal and
money claims filed by Ruben Panes, Ruel Cabanday and Jonard
Abugho (respondents) against Vicmar Development Corporation
(Vicmar) and/or Robert Kua (Kua), its owner and Juanito
Pagcaliwagan (Pagcaliwagan), its manager, docketed as NLRC
Case No. RAB-10-08-00593-2005;14 and consolidated Complaints
for illegal dismissal and money claims filed by Camilo Elarcosa,
Marlon Banda, Dante Balamad, Rodrigo Colanse, Chiquito Pacaldo,
Robinson Panaga, Romel Patoy, Wilfredo Ladra, Junie Abugho,
Silverio Narisma, Armando Gonzales, Teofilo Elbina, Francisco
Baguio, Gelven Rhyan Ramos, Julito Siman, Recarido Panes, Jesus
Tinsay, Agapito Cafias, Jr., Oliver Lobaynon, Rolando Tacbobo,
Simeon Baguio, Roberto Paguican, Joseph Salcedo, Donil Indino,
Wilfredo Gulben, Jesreil Taneo, Renante Pamon, Richie Gulben,
Daniel EUo, Rexy Dofeliz, Ronald Noval, Norberto Belarca, and
Allan Baguio (respondents), among others, against Vicmar, Kua,
and Pagcaliwagan (petitioners), docketed as NLRC Case Nos. RAB-
10-09-00603-2004; RAB-10-09-00609-2004; RAB-10-09-00625-
2004; and RAB-10-02-00190-2005.15
Respondents alleged that Vicmar, a domestic corporation engaged
in manufacturing of plywood for export and for local sale,
employed them in various capacities - as boiler tenders, block
board receivers, waste feeders, plywood checkers, plywood
sander, conveyor operator, ripsaw operator, lumber grader, pallet
repair, glue mixer, boiler fireman, steel strap repair, debarker
operator, plywood repair and reprocessor, civil workers and plant
maintenance. They averred that Vicmar has two branches, Top
Forest Developers, Incorporated (TFDI) and Greenwood
International Industries, Incorporated (GUI) located in the same
compound where Vicmar operated.16
According to respondents, Vicmar employed some of them as early
as 1990 and since their engagement they had been performing the
heaviest and dirtiest tasks in the plant operations. They claimed
that they were supposedly employed as "extra" workers; however,
their assignments were necessary and desirable in the business of
Vicmar. They asserted that many of them were assigned at the
boilers for at least 11 hours daily.17 They emphasized that the
boiler section was necessary to Vicmar's business because it was
where pieces of plywood were dried and cooked to
perfection.18 They further stated that a number of them were also
assigned at the plywood repair and processing section, which
required longer working hours.19
Respondents declared that Vicmar paid them minimum wage and a
small amount for overtime but it did not give them benefits as
required by law, such as Philhealth, Social Security System,
13th month pay, holiday pay, rest day and night shift
differential.20 They added that Vicmar employed more than 200
regular employees and more than 400 "extra" workers.21
Sometime in 2004, Vicmar allegedly informed respondents that
they would be handled by contractors. 22Respondents stated that
these contractors were former employees of Vicmar and had no
equipment and facilities of their own.23 Respondents averred that
as a result thereof, the wages of a number of them who were
receiving P276.00 as daily wage, were reduced to P200.00 or
P180.00, despite overtime work; and the wages of those who were
receiving P200.00 and P180.00 were reduced to P145.00 or
P131.00. Respondents protested said wage decrease but to no
avail. Thus, they filed a Complaint with the DOLE24for violations of
labor standards for which appropriate compliance orders were
issued against Vicmar.25cralawred
Respondents claimed that on September 13, 2004, 28 of them
were no longer scheduled for work and that the remaining
respondents, including their sons and brothers, were subsequently
not given any work schedule.26
Respondents maintained that they were regular employees of
Vicmar; that Vicmar employed a number of them as early as 1990
and as late as 200327 through Pagcaliwagan, its plant manager;
that Vicmar made them perform tasks necessary and desirable to
its usual business; and that Vicmar paid their wages and controlled
the means and methods of their work to meet the standard of its
products. Respondents averred that Vicmar dismissed them from
service without cause or due process that prompted the filing of
this illegal dismissal case.28
Respondents claimed that they were illegally dismissed after
"vicmar learned that they instituted the subject Complaint through
the simple expedience of not being scheduled for work. Even those
persons associated with them were dismissed. They also asserted
that Vicmar did not comply with the twin notice requirement in
dismissing employees.29
Furthermore, respondents contended that while Vicmar, TFDI and
Gin were separately registered with the SEC,30 they were involved
in the same business, located in the same compound, owned by
one person, had one resident manager, and one and the same
administrative department, personnel and finance sections. They
claimed that the employees of these companies were identified as
employees of Vicmar even if they were assigned in TFDI or GIII. 31
On the other hand, petitioners stated that Vicmar is a domestic
corporation engaged in wood processing, including the
manufacture of plywood since 1970;32 that Vicmar employed
adequate regular rank-and-file employees for its normal operation;
and that it engaged the services of additional workers when there
were unexpected high demands of plywood products and when
several regular employees were unexpectedly absent or on leave. 33
Petitioners pointed out that the engagement of Vicmar's "extra"
workers was not continuous and not more than four of them were
engaged per section in every shift. They added that from the time
of engagement, respondents were not assigned for more than one
year in a section or a specific activity.34They explained that some
of Vicmar's "extra" workers were engaged under "pakyaw" system
and were paid based on the items repaired or
retrieved.35 Petitioners also stated that respondents Allan Baguio,
Romel Patoy, Rexy Dofeliz, Marlon Banda, Gulben Rhyan Ramos,
Julieto Simon and Agapito Canas, Jr. were "extra" workers of TFDI,
not Vicmar.36 They likewise alleged that a number of respondents
were engaged to assist regular employees in the company,37 and
the others were hired to repair used steel straps and retrieve
useable veneer materials, or to perform janitorial services. 38
Moreover, petitioners argued that the engagement of additional
workforce was subject to the availability of forest products, as well
as veneer materials from Malaysia or Indonesia and the availability
of workers.39
Petitioners further asseverated that sometime in August 2004,
they decided to engage the services of legitimate independent
contractors, namely, E.A. Rosales Contracting Services and
Candole Contracting Services, to provide additional
workforce.40 Petitioners claimed that they were unaware that
respondents were dissatisfied with this decision leading to the
DOLE case.41 They insisted that hiring said contractors was a cost-
saving measure, which was part of Vicmar's management
prerogative.42
Ruling of the Executive Labor Arbiters
On May 25, 2006, ELA Pelaez dismissed the complaints in NLRC
Case Nos. RAB-10-09-00603-2004; RAB-10-09-00609-2004; RAB-
10-09-00625-2004; and RAB-10-02-00190-2005.43 On May 29,
2006, ELA Magbanua dismissed the complaint in NLRC Case No.
RAB-10-08-00593-2005.44
Both ELAs Pelaez and Magbanua held that respondents were
seasonal employees of Vicmar, whose work was "co-terminus or
dependent upon the extraordinary demands for plywood products
and also on the availability of logs or timber to be processed into
plywood."45 They noted that Vicmar could adopt cost-saving
measures as part of its management prerogative, including
engagement of legitimate independent contractors. 46
Ruling of the National Labor Relations Commission

Consequently, respondents filed a Notice of Appeal with Motion to
Consolidate Cases47 alleging that the foregoing cases involved
same causes of actions, issues, counsels, and respondents, and
complainants therein were similarly situated.
Thereafter, in their Consolidated Memorandum on
Appeal,48 respondents argued that their work in Vicmar was not
seasonal. They averred that since their employment in 1990 until
their termination in 2004, they continuously worked for Vicmar and
were not allowed to work for other companies. They alleged that
there was never a decline in the demand and production of
plywood. They also claimed that they continuously worked in
Vicmar the whole year, except in December during which the
machines were shut down for servicing and clean-up. They,
nonetheless, stated that some of them were the ones who had
been cleaning these machines.
In addition, respondents averred that even assuming that they
were seasonal employees, they were still regular employees whose
employment was never severed during off-season. Thus, they
asserted that the decision to farm them out to contractors was in
violation of their right to security of tenure and was an evidence of
bad faith on the part of Vicmar.
On February 2, 2007, the NLRC affirmed the Decisions of ELAs
Pelaez and Magbanua.49 On April 30, 2007, it denied respondents'
motion for reconsideration.50
Ruling of the Court of Appeals
Undaunted, respondents filed with the CA a
Petition51 for Certiorari maintaining that they were regular
employees of Vicmar and that the latter illegally dismissed them.
They insisted that the labor contractors engaged by Vicmar were
"labor-only" contractors, as they have no equipment and facilities
of their own.
Petitioners, for their part, reiterated that Vicmar employed
respondents as additional workforce when there was high demand
for plywood thus, they were merely seasonal employees of Vicmar.
They argued that Vicmar engaged independent contractors as a
cost-saving measure; and these contractors exercised direct
control and supervision over respondents. In conclusion,
petitioners declared that respondents were not illegally dismissed
but lost their employment because of refusal to coordinate with
Vicmar's independent contractors.
On November 24,2009, the CA rendered the assailed Decision
granting the Petition for Certiorari, the dispositive portion of which
reads:
WHEREFORE, premises considered, the Petition is GRANTED. The Petitioners maintain that respondents were Vicmar's "extra"
Resolution dated February 2,2007 of the National Labor Relations workers;58 that the engagement of independent contractors was a
Commission (NLRC), Fifth Division, Cagayan de Oro City is management prerogative exercised in good faith;59 that some of
REVERSED and SET ASIDE. Private respondents are ORDERED to the respondents were engaged by TFDI and thus, they have no
reinstate petitioners to their former positions, without loss of standing in this case.60
seniority rights, and to pay full backwages from the time they were
illegally dismissed until actual reinstatement. Respondents, on their part, assert that petitioners have the burden
to prove that they (respondents) were seasonal employees
SO ORDERED.52 ChanRoblesVirtualawlibrary because such allegation is a critical fact that must be
substantiated.61 They likewise restate that they were regular
The CA held that a number of respondents were assigned to the
employees of Vicmar because they had been performing tasks
boiler section where plywood was dried and cooked to perfection;
necessary and desirable for the production of plywood; they
and while the other respondents were said to have been assigned
continuously worked in Vicmar for more than 11 hours daily until
at the general service section, they were "cleaners on an industrial
they were terminated in September 2004; and they were not
level handling industrial refuse."53 As such, according to the CA,
allowed to work for companies other than Vicmar. 62
respondents performed activities necessary and desirable in the
usual business of Vicmar, as they were assigned to departments
Respondents claim that assuming that they were "extra" workers,
vital to its operations. It also noted that the repeated hiring of
still, their continued and repeated hiring for more than 10 years
respondents proved the importance of their work to Vicmar's
made their functions necessary or desirable in the usual business
business. It maintained that the contractors were engaged by
of Vicmar.63
Vicmar only for the convenience of Vicmar. In sum, the CA
declared that respondents were illegally dismissed since there was
Issue
no showing of just cause for their termination and of compliance
by Vicmar to due process of law.
Did the CA err in finding that the NLRC gravely abused its
On May 10, 2012, the CA denied petitioners' motion for discretion in affirming the ELAs' Decisions dismissing the
complaint?
reconsideration.54
Our Ruling
Petitioners thus filed this Petition raising the sole ground as
follows:
In labor cases, grave abuse of discretion may be ascribed to the
THE HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT
AND DEFERENCE, ERRED IN REVERSING AND SETTING ASIDE THE NLRC when its findings and conclusions are not supported by
substantial evidence or such relevant evidence that a reasonable
FINDINGS OF FACTS AND CONCLUSIONS OF THE NATIONAL
mind might accept as adequate to support a conclusion.64 The CA
LABOR RELATIONS COMMISSION (NLRC). THE DECISION AS WELL
may grant a Petition for Certiorari if it finds that the NLRC
AS THE RESOLUTION ARE NOT IN ACCORDANCE WITH LAW AND
committed grave abuse of discretion by capriciously, whimsically or
APPLICABLE JURISPRUDENCE AND IF NOT CORRECTED, WILL
arbitrarily disregarding the material evidence decisive of a case. It
CAUSE GRAVE INJUSTICE AND IRREPERABLE [SIC] DAMAGE TO
cannot "make this determination without looking into the evidence
THE PETITIONERS WHO WILL BE CONSTRAINED TO ABSORB
UNCESSARY [SIC] WORKFORCE, WHICH WILL LEAD TO THE presented by the parties. Necessarily, the appellate court can only
evaluate the materiality or significance of the evidence, which is
FURTHER DETERIORATION OF ITS FINANCIAL INSTABILITY [SIC]
alleged to have been capriciously, whimsically, or arbitrarily
AND POSSIBLY TO ITS CLOSURE.55
ChanRoblesVirtualawlibrary
Petitioners contend that it is irregular for the CA to reverse the disregarded by the NLRC, in relation to all other evidence on
record."65
findings of facts of the NLRC and the ELAs based on two work
schedules of different companies and identification cards of five
In this case, we find that the CA correctly granted respondents'
respondents. They maintain that said evidence cannot conclusively
Petition for Certiorari because the NLRC gravely abused its
prove that respondents were regular employees of Vicmar.56
discretion when it affirmed the dismissal of respondents'
Complaints.
Additionally, petitioners argue that the CA erred in finding that
they (petitioners) have the burden to prove that respondents were
Section 280 of the Labor Code defines a regular employee as one
hired for only one season to establish that they were mere
who is 1) engaged to perform tasks usually necessary or desirable
seasonal employees. Petitioners emphasize that since the inception
in the usual business or trade of the employer, unless the
of this case, they have been denying respondents' claim that they
were working under regular working hours and working days. 57 employment is one for a specific project or undertaking or where
the work is seasonal and for the duration of a season; or 2) has
rendered at least 1 year of service, whether such service is
continuous or broken, with respect to the activity for which he is
employed and his employment continues as long as such activity
exists.66
Here, there is substantial evidence to prove that respondents were
regular employees such that their separation from work without
valid cause amounted to illegal dismissal.
To support their illegal dismissal case, respondents listed the date
of their hiring, the date they were terminated and the sections
where they were assigned prior to dismissal, to wit:67
The foregoing allegations were uncontroverted as no relevant
employment files, payrolls and records were submitted by
petitioners to refute the information. Being the employer,
petitioners have custody and control of important employment
documents. As such, failure to submit them gives rise to the
presumption that their presentation would be prejudicial to
petitioners' cause and leads the Court to conclude that the
assertions of respondents are truthful declarations. 68
Interestingly, in the DOLE case filed by respondents against
Vicmar and TFDI, the latter did not also submit documents to
disprove respondents' claim for wage differentials, 13th month pay
and holiday pay. Because of this, the DOLE Secretary denied their
appeal. In her February 17, 2006 Order,69 the DOLE Secretary
made the following pronouncements:
In this case, the appellants (Vicmar and TFDI) were given seven x
x x days to comply with the Notice of Inspection Results or to
contest the findings therein, but they chose to ignore the directive.
Summary hearings were conducted x x x to give the appellants
ample time to submit payrolls, but they merely promised to do so
x x x [A]t the extra hearing on 18 November, they still failed to do
so. x x x There being none, the Director could not but sustain the
inspection report.
Neither can the Director be faulted for not referring the case to the
NLRC on the ground that material evidence, namely, the payrolls
and the daily time records, were not duly considered during
inspection. The appellants cannot raise this argument because it
was they who failed to produce the records for the consideration of
the inspector and the Regional Director[.]70ChanRoblesVirtualawlibrary
Similarly, we cannot fault the CA in the instant case for giving
credence to the assertions and documentary evidence adduced by
respondents. Petitioners had the opportunity to discredit them had
they presented material evidence, including payrolls and daily time
records, which are within their custody, to prove that respondents
were mere additional workforce engaged when there are
extraordinary situations, such as high demands for plywood
products or unexpected absences of regular employees; and that
respondents were not assigned for more than one year to the
same section or activity.
Moreover, respondents were shown to have performed activities
necessary in the usual business of Vicmar. Most of them were
assigned to activities essential for plywood production, the central
business of Vicmar. In the list above, more than half of the
respondents were assigned to the boiler, where pieces of plywood
were cooked to perfection. While the other respondents appeared
to have been assigned to other sections in the company, the
presumption of regular employment should be granted in their
favor pursuant to Article 280 of the Labor Code since they had
been performing the same activity for at least one year, as they
were assigned to the same sections, and there is no indication that
their respective activities ceased.71
The test to determine whether an employee is regular is the
reasonable connection between the activity he performs and its
relation to the employer's business or trade, as in the case of
respondents assigned to the boiler section. Nonetheless, the
continuous re-engagement of all respondents to perform the same
kind of tasks proved the necessity and desirability of their services
in the business of Vicmar.72 Likewise, considering that respondents
appeared to have been performing their duties for at least one
year is sufficient proof of the necessity, if not the indispensability
of their activities in Vicmar's business.73
The Court also holds that Vicmar failed to prove that the
contractors it engaged were legitimate labor contractors.
To determine the existence of independent contractorship, it is
necessary to establish that the contractor carries a distinct and
independent business, and undertakes to perform work on its own
account and under its responsibility and pursuant to its own
manner and method, without the control of the principal, except as
to the result; that the contractor has substantial capital or
investment; and, that the agreement between the principal and
the contractor assures the contractual employees to all labor and
occupational safety and health standards, to right to self-
organization, security of tenure and other benefits.74
Other than their respective Certificates75 of Registration issued by
the DOLE on August 12, 2004, E.A Rosales Contracting Services
and Candole Labor Contracting Services were not shown to have
substantial capital or investment, tools and the like. Neither was it
established that they owned equipment and machineries for the
purported contracted job. Also, the allegation that they had clients
other than Vicmar remained to be bare assertion without
corresponding proof. More importantly, there was no evidence
presented that these contractors undertook the performance of
their service contracts with Vicmar pursuant to their own manner
and method, without the control and supervision of Vicmar. 76
Petitioners cannot rely on the registration of their contractors to
prove that the latter are legitimate independent contractors. Such
registration is not conclusive of the status of a legitimate
contractor; rather, it merely prevents the presumption of being a
labor-only contractor from arising. Indeed, to determine whether
labor-only contracting exists, the totality of the facts and
circumstances of the case must be considered.77
The Court also gives merit to the finding of the CA that Vicmar is
the employer of respondents despite the allegations that a number
of them were assigned to the branches of Vicmar. Petitioners failed
to refute the contention that Vicmar and its branches have the
same owner and management - which included one resident
manager, one administrative department, one and the same
personnel and finance sections. Notably, all respondents were
employed by the same plant manager, who signed their
identification cards some of whom were under Vicmar, and the
others under TFDI.
Where it appears that business enterprises are owned, conducted
and controlled by the same parties, law and equity will disregard
the legal fiction that these corporations are distinct entities and
shall treat them as one. This is in order to protect the rights of
third persons, as in this case, to safeguard the rights of
respondents.78
Considering that respondents were regular employees and their
termination without valid cause amounts to illegal dismissal, then
for its contrary ruling unsupported by substantial evidence, the
NLRC gravely abused its discretion in dismissing the complaints for
illegal dismissal. Therefore, the CA Decision setting aside that of
the NLRC is in order and must be sustained.79
WHEREFORE, the Petition is DENIED. The Decision dated
November 24,2009 and Resolution dated May 10, 2012 of the
Court of Appeals in CA-G.R. SP No. 01853-MIN are AFFIRMED.
SO ORDERED. chanroblesvirtuallawlibrary
12. backwages execption to fallo-
United Coconut Chemicals, Inc. v. Victoriano B. ValmoresPetitioner:
United Coconut Chemicals, Inc.Respondent: Victoriano B. ValmoresDate:
12 July 2017G.R. No.: 201018Ponente: Bersamin, J
.FACTS:
•
UCCI hired the respondent as its Senior Utilities Inspector with a monthly
salary of P11,194.00. He then became amember of the United Coconut
Chemicals, Inc. Employees' Labor Organization (UELO) until his
expulsionsometime in 1995.
•
Due to the expulsion, UELO formally demanded that UCCI terminate the inclusive of allowances, and to his other benefits or their monetary equivalent
services of the respondent pursuant tothe union security clause of the CBA. ." Considering that the lawdoes not distinguish between the benefits granted by
• the employer and those granted under the CBA, he should not be denied the
latter benefits.
UCCI dismissed him. He then filed a complaint for illegal dismissal in the •
NLRC.
LA Nonetheless, the respondent still had to prove his entitlement to the benefits by
’ submitting proof of his havingreceived the same at the time of his illegal
s Ruling dismissal. Respondent must have submitted before the Labor Arbitersufficient
Respondents are liable for illegal dismissal and ordered them to reinstate evidence establishing his receiving meal subsidy, SOFA, financial grant,
complainant to his former position withoutloss of seniority rights and with full medical assistance, built-inovertime and night shift differential, rice subsidy,
backwages from the date of dismissal on 22 February 1996 to the date of uniform allowance, Christmas package, vacation and sick leaveat the time he
actualreinstatement. Labor Arbiter Lontoc opined that the backwages due to the was dismissed. Yet, the respondent was unable to discharge his burden because
respondent should be computed byexcluding the benefits under the CBA the relevantdocuments, including the CBA, had been in UCCI's exclusive
NLRC possession and custody. Unfortunately, the LaborArbiter did not rule on his
’ motion to compel the production of the documents by subpoena
s Ruling duces tecum.
Affirmed LA DISPOSITION:
’ We consider as patent error on the part of the Labor Arbiter to declare that the
s ruling. respondent had not proved hisentitlement to the CBA benefits. Accordingly, the
CA remand to enable the proper determination of the CBA benefitsthat the
’ respondent had been receiving as of February 22, 2006 is proper and necessary.
s Ruling
Affirmed NLRC 13. illegal dismissal verbal
’
s ruling.
ISSUE:
notice of termination
W/N the computation for the payment of back wages should include the
benefits granted in the CBA - YES
HELD & RATIO:
•

Art. 279 of the Labor Code provides that

“
an employee who is unjustly dismissed from work shall be entitled
toreinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive ofallowances, and to his other benefits or their
monetary equivalent computed from the time his compensation waswithheld
from him up to the time of his actual reinstatement.
”

The purpose for this is to compensate the worker for what he has lost because of
his dismissal, and to set the priceor penalty on the employer for illegally
dismissing his employee.
•

CBA allowances and benefits that the respondent was regularly receiving before
his illegal dismissal should beadded to the base figure of P11,194.00. This is
because Article 279 of the
Labor Code
decrees that the backwagesshall be "